COMMENTS AND OBSERVATIONS

1. Estimated money value of earned leave redits of

1!"#$% &&C 'ersonnel amountin( to &!.)*+ ,illion -as
not reo(ni.ed as ,ene/t lia,ility as of Deem,er #1"
!%%$.
Philippine Accounting Standard (PAS) No. 19 prescribes the
accounting and disclosure for employee benefts. It also
reuires the recognition!
"f a liability #hen an employee has pro$ided ser$ice in
e%change for employee benefts to be paid in the future!
and
an e%pense #hen the entity consumes the economic
beneft arising from ser$ice pro$ided by an employee in
e%change for employee benefts
&mployee benefts include long ' term compensated absences
such as long ser$ice or sabbatical lea$e. (he amount
recogni)ed as a liability shall be the present $alue of the
defned beneft obligation at the balance sheet date (PAS 19
Par. 128 (a))
In PP* +egion I, #ith -1. employee/ money $alue of lea$e
credits earned amounts to P101/01-/23..00. 4sing the
computed money lea$e credits of said region/ it is presumed
that for e$ery -00 personnel/ estimated money $alue of
earned lea$e credits is P100 million.
(herefore/ estimated money $alue of earned lea$e credits of
1./210 PP* personnel as of 5ecember 21/ .001 is P..637
billion.
Actual terminal lea$e benefts paid in .001 and .003 are
P11./3.1/060 and P91/701/917/ respecti$ely.
+&*"88&N5A(I"N
8anagement should consider recogni)ing the liability for
earned lea$e credits of PP* personnel in its balance sheet as
of 5ecember 21/ .001.
8ANA9&8&N(:S *"88&N(
17
8anagement agreed #ith the recommendation
!. &&C did not meet t0e re1uirements on t0e ondut of
year2end inventory of 'ro'erty.
Physical in$entory ta;ing is a control procedure for
determining the condition of the properties of the *orporation.
Presented belo# are obser$ations relating to the physical
in$entory of property at the *entral "<ce and +egional
"<ces.
RE3ION BOO4
VA56E
REMAR4S
=ead
"<ce
337/26-/2.-.
66
Incomplete in$entory report
+egion I 9/9-7/-60.00
Physical in$entory #as ta;en but no
report #as submitted
+egion I> 1/.../313.00
Physical in$entory ta;en #as not
complete
+egion >II
-./707/19-.0
0
No in$entory report submitted
+egion
>III
62/000/000.0
0
No physical in$entory #as ta;en
+egion I, 3/671/963.00
No physical in$entory #as ta;en
+egion ,
.-/-12/.12.0
0
No physical in$entory #as ta;en
+egion ,II
10/21./-01.0
0
No physical in$entory #as ta;en
* A +
.1/211/.79.0
0
No physical in$entory #as ta;en
+&*"88&N5A(I"N
8anagement should conduct the prescribed annual in$entory
of all property carried in the boo;s in order to ascertain the
physical e%istence and condition and re?ect accurate fgures
in the fnancial statements.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
CAS7 IN BAN4
#. Of t0e Cas0 in Ban8 ,alane of &1"%1) Million only
&1$) Million -ere on/rmed ,y t0e ,an8s.
18
@e compared the aggregate balance of ban; accounts #ith
the amount confrmed by the ban; and #e arri$ed at the
follo#ing tabular presentationA
Re(io
n
Balane &er
Boo8
Con/rmed
96nder: Over
Boo8 Balane
="
.62/-.9/731.9
3
76/361/2-1..
.
131/311/2.3.3
-
I>
.17/071/217.7
9
1./206/.21.0
.
.02/3-3/01-.7
3
Re(io
n
Balane &er
Boo8
Con/rmed
96nder: Over
Boo8 Balane
, 179/237/10-.-. 1/--2/36..13 170/1../272.2-
III 1-2/711/0.3.-. 11/169/.1..69 161/371/36-.02
*A+ 9-/239/729.76 -/936/3.-.99 19/606/912.7-
>I 21/---/2-1.6- 9/.1./013.-. .9/.32/.72.92
N*+ .1/177/1.1.16 .2/.6-/792..3 (1/239/-7-.12)
II 19/220/-.1.-2 7/160/302.9- 1./619/113.-1
>III 11/376/067.17 1./6.0/9.1..3 7/262/1.6.19
>II 1./036/1-7.72 9/77./9.3.7. ./611/..9.01
> 9/90./729.36 1/16-/700.79 1/0-3/029.0-
I, 7/613/773.-0 1/690/620.79 6/9.3/.27.11
,II 7/23./290.73 3/220/171.76 (9-3/333.93)
I 2/--6/177.-1 1/19./11..-1 1/771/2-6.03
TOTA
5
1"%1)"$%1"$#+.*
)
1$)")#)"+*;.
%<
$#%"#+*"1<*.
+;
As regards the =ead "<ce:s accounts/ a case in point is
Banco de "ro ' 58"C account #here the proceeds from the
issuance of all domestic money order chec;s issued are
deposited and against #hich the said chec;s are cleared. (he
said account had a boo; balance of P1.2/931/1-2 against the
amount confrmed of P16/9-./161 or a diDerence of
P109/019/30-.
As regards the +egional "<ces: accounts and in a related
Cinding No. 2/ the +egional "<ce failed to record the transfer
of funds to the *entral "<ce. An aggregate amount of
P1-2.1 8illion #ere ta;en up as recei$ed by the *entral "<ce
but #ere not ta;en up in the +egional "<ce. As a result/ the
balance appearing in the boo;s of the +egional "<ce is
substantially higher than the actual balance in its ban;
accounts.
19
As sho#n in the table belo#/ out of a total of .21 ban;
accounts maintained/ -. ha$e no ban; reconciliation
statements/ #hile 111 #ere prepared late. (he nonE
preparationF delayed preparation of the ban; reconciliation
statements resulted in the accumulation of reconciling items
in the *ash in Ban; accounts.
Re(ion
No. of Ban8
Aounts
No.
BRS
Delayed
BRS
No. of
Days
Delayed
=ead "<ce .1 6 13 - mos.
N*+ 1. 2 9 6E.. mos.
*A+ .3 E .9 . yrs.
+egion I 7- E 7- 1E. mos.
Re(ion
No. of Ban8
Aounts
No.
BRS
Delayed
BRS
No. of
Days
Delayed
+egion II .. . .0 .E1 mos.
+egion III 17 3 9 Not stated
+egion I> 1- 2 1. Not stated
+egion >I 17 17 E E
+egion I, 9 E 9 .E11 mos.
+egion , .9 1- 16 .E.. mos.
+egion ,II 7 . 6 1E. mos.
Total !#$ <! 1$$ E
+&*"88&N5A(I"N
(a;e steps to establish the actual amount of cash in ban; and
ma;e the appropriate adGusting entries. Accountants should
prepare promptly the monthly Ban; +econciliation Statements
pursuant to Section 36/ P.5. 166- so that appropriate
adGusting entries could be immediately eDected.
Send periodic reminders to depository ban;s to ensure that
the ban; furnishes the PP* =ead "<ce and +egional "<ces
#ith the reuired ban; statements #ithin the prescribed
period obser$ed in the ban;ing industry.
Issue instructions to address the root cause of this problem.
>alidate compliance #ith those instructions through internal
audit.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
20
). T0e amount of &!1.% million 'ertains to t0e domesti
issuanes and re'orted amon( t0e lia,ilities for
outstandin( 'ostal money orders. It -as derived
t0rou(0 an estimate rat0er t0an an atual
determination of money order issued t0at 0ave not yet
leared t0e ,an8. 7ene -e -ere not a,le to esta,lis0
if t0e said amount is a true and fair value of t0e said
aount.
(he boo; $alue of the liability for unpaid domestic money
orders issued #as P170.7 million. (his amount/ although still
in the boo;s is no# reported in the balance sheet at P.1.0
million #hich #as deri$ed through an estimate. (his amount
should ha$e been established by preparing a listing of money
orders not yet cleared #ith the ban;. (his #ould ha$e been
done had PP* maintained a record of money orders issued but
not yet cleared #ith the ban;. Although PP* recei$es the
cleared money orders from the ban;/ it does not compare the
serial nos. of chec; cleared against the serial nos. of #hat
#ere issued by the post o<ces.
+&*"88&N5A(I"N
*ompare the serial nos. of money order chec;s cleared by the
ban; against the serial nos. of money order chec;s issued by
post o<ces. Based on this comparison/ PP* shall prepare a list
of outstanding chec;s or money order chec;s issued but not
yet cleared by the ban;.
Cor the purpose of establishing the $alue of outstanding
chec;s as of 5ecember 21/ .001/ management may ta;e an
in$entory of all money order chec;s that cleared during the
frst three months of *H .009 that #ere issued in the last
three months of *H .001.
8ANA9&8&N(:S *"88&N(
(his recommendation shall be considered by management. A
memorandum dated 01 Ianuary .009 #as prepared reuiring
all +egional 5irectors to submit the 8" Stoc; Account/ 8"
Issued/ 8" Paid out of *A to identify the serial numbers and
date of issuances. Initially to adGust the boo; balance of the
liability account/ estimation based on the a$erage issuances
and clearing of 8" chec;s #as done considering the 90 days
$alidity period. (his #as re?ected in the .001 Balance Sheet.
21
AdGustment to actual outstanding chec;Fliability amounts #ill
be made soon as reconciliation is fnished.
<. &ostmasters re'orted unde'osited olletions" t0e
a((re(ate amount of -0i0 is &<#.+ million less t0an
t0e amount a''earin( in t0e ,oo8s of t0e Re(ional
O=es.
Although the Accounting +ecords sho# an aggregate amount
of P3. million in undeposited collections of Postmasters/ the
postmasters: fnancial reports re?ect an aggregate amount of
only P11.2 million as of 5ecember 21/ .001. (his is presented
by regional o<ce as follo#sA
Re(ion
al
O=e
&er Boo8s
&er
&ostmaster>s
Mont0ly
Re'ort
&er Boo8s
Over96nder:
III 62/--0/.01.1
6
2/---/1-1.63 29/99-/0-0.2
3
N*+ 11/211/917.-
1
1/307/9-7.2- 9/711/970..
2
Re(ion
al
O=e
&er Boo8s
&er
&ostmaster>s
Mont0ly
Re'ort
&er Boo8s
Over96nder:
>II 2/-69/721.1
-
1/009/9.1.96 ./-29/317..
1
>I 1/107/-19.1
3
.11/173.07 111/6...1
1
I> ./66./679.6
7
1/313/661.62 7--/0.1.0
2
*A+ -9./.00.2
1
.97/170.-3 .97/029.36
I 1/132/16..9
1
./.71/660.7. (296/-93.7
6)
II -.7/6.-..
9
-.1/929.20 (./-16.01
)
TOTA5 *!"%#%"!;%.
*$
1$"#*1"1$<.*) <#"+<;"1%<.
%)
(he reasons cited by our Auditors assigned at the regions are
as follo#sA
failure to record cash shortages and losses of PP*
accountable o<cers li;e postmasters or cashiers
because of una$ailability of records/
22
changes introduced in the system of recording of
fnancial transactions from clustering system or group of
post o<ces to a per post o<ce operation/
erroneous entries made in prior years/ and
inability to settle or record the settlement of cash
accountabilities of transferred/ dismissed and deceased
accountable o<cers.
(his is a reiteration of prior year:s audit fndings.
+&*"88&N5A(I"N
+eclassify the amount of shortages recorded in the account
*ash *ollecting "<cer to an appropriate account to the
e%tent that the subGect cash no longer e%ists/ e.g. from *ash
collecting "<cer Account to +ecei$able Account.
4pdate subsidiary ledgers of collecting o<cers and reconcile
#ith the general ledger and record appropriate adGusting
entries on reconciling items.
+eE$isit and ma;e appropriate modifcations to procedures
pertaining to accountability of postmasters to ensure prompt
and accurate reporting/ accounting/ and reconciliation of
accountabilities.
4se Internal Audit Ser$ices to ascertain compliance #ith
e%isting policies and procedures.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
+. T0e Mana(ement of &&C does not 0ave reasona,le
assurane t0at remittanes of &+).* Million of
olletions from 'ost o=es nation-ide 0ave in fat
,een reeived ,y t0e Central O=e. T0is is ,eause it
0as not instituted ontrols to ensure t0at all
remittanes of olletions from 'ost o=e ,an8
aounts nation-ide 0ave ,een redited to t0e
orres'ondin( entral o=e ,an8 aount.
23
An aggregate amount of P.11/7-3/701.-9 #as recorded as
transferred from the post o<ce ban; account to the head
o<ce ban; account. "f this amount/ P 1-2/13-/102.-6 #ere
recorded as ha$ing been recei$ed in the head o<ce but no
corresponding entry #as made in the +egional "<ce to record
the transfer to the head o<ce. As a result/ the *ash in Ban;
accounts in the regional o<ces are o$erstated by this amount.
"n the other hand/ the amount of P76/31./691.0- #as
recorded in the regional o<ce as ha$ing been transferred to
the head o<ce but no corresponding entry #as made in the
head o<ce to record the receipt . (his results to an
understatement of central o<ce ban; account by this amount.
(he eDect of these o$erFunder statements is a net
o$erstatement of P19/09./70-.69.
(his scenario confrms the practice of +egional "<ces #here
they #ait for I&> of the =ead "<ce as their basis in recording
the Js#eepingK. (his may also e%plain #hy the boo; balances
of cash in ban; of the +egional "<ce is bigger than #hat is
confrmed by the ban;. Curthermore/ PP* 8anagement does
not ha$e assurance that the P76/31./691.0- amounts s#ept
from the +egional "<ce ban; account ha$e been credited to
the ban; account of the =ead "<ce.
+&*"88&N5A(I"N
5etermine if the appropriate central o<ce ban; accounts
#ere credited for the unrecorded remittance of P76.3 million.
Issue policies and procedures on accounting for the interE
branch transactions. (he said issuance should ensure that
causes of diDerences in the amounts recorded bet#een the
=ead "<ce and the +egional "<ce are identifed and
appropriated correcti$e actions are ta;en/ including the
boo;ing up of adGustments.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
*. &&C 0as ta8en no le(al ation on t0e COA Disallo-ane
of t0e refund made ,y t0e &0ili''ine &ostal
Cor'oration 9&&C: to &0il'ost 6SA of ?1"%#1";#+ or
&<#"%)#"$#<.
24
Based on A"8 No. IA5 .006E0 dated 8arch .9/ .006 issued
by PP*E*"A/ relati$e to the refund of terminal dues amounting
to L1/021/927 to P=IMP"S( 4SA/ MM*/ *"AEMegal and
AdGudication "<ce issued Notice of 5isallo#ance PP*E.00-E
001(.002) dated August 6/ .00-.
*onseuently/ motions for reconsideration fled by the then
PP* Assistant Postmaster 9eneral for Cinance/ Antonio +.
Siapno dated No$ember .2/.00- and by the then PP*
Postmaster 9eneral/ 5iomedio P. >illanue$a #ere denied #ith
fnality for lac; of merit as per MA"E*orporate 5ecision No.
.003E01- dated 8arch 16/ .003.
Based on an agreement/ entered into and by PP* and Philpost
4SA in April/ .000/ the latter has the e%clusi$e right to
establish and operate an "<ce of &%change of PP* in the 4SA
and to use the Philippine Postage Indicia #ithin the 4SA.
As a procedure/ based on the monthly statements of outgoing
mails submitted/ the International Accounts 5i$ision of PP*
bills Philpost 4SA for the terminal dues and premiums of all
mails recei$ed and deli$ered by the latter to other countries.
(he terminal dues then collected from Philpost 4SA are
temporarily held in trust by PP* for later remittance to the
countries of destination upon presentation of the billing
statements. =o#e$er/ a 4N foreign mail administration/ the
+oyal 8ail/ did not send in$oicesFclaims for payment of .001
terminal dues.
In No$ember .002/ PP* refunded to Philpost 4SA/ upon the
latter:s reuest/ the amount of L1/021/927 or P-2/062/12-
representing the terminal dues pre$iously paid by Philpost
4SA for the reason that +oyal 8ail has not sent in$oicesFclaim
for the .001 terminal dues.
In their A"8 issued in .006/ *"A asserts that/ considering the
nature of the contract bet#een PP* and Philpost 4SA #hich is
basically a licensee and licensor relationship/ Philpost 4SA has
no legal personality as far as +oyal 8ail and other foreign
postal administration are concerned. It is only the PP* #ho
has the sole legal authority to deal and transact business #ith
any CPA. (herefore/ not#ithstanding the failure of +oyal 8ail
to send in$oicesFclaim for payment/ the amount refunded
should ha$e remained intact in the custody of the PP* and it
is only PP* #ho has the legal authority to pay #hat is due to
+oyal 8ail.
25
+&*"88&N5A(I"N
Cile ci$il and criminal case against Philpost 4SA/ former P89
5iomedio P. >illanue$a/ AP89 Antonio +. Siapno/ and 8r.
Meonido (. Basilio.
8ANA9&8&N(:S *"88&N(
In reply to *"A:s Audit Ouery/ management commented thatA
(hey ha$e already sent copies of the Notice of
5isallo#ance to 8r. 5iomedio P. >illanue$a/ 8r. Antonio +.
Siapno/ 8r. Meonido (. Basilio
PP4SA oDered good#ill payment for the settlement of the
refunded terminal dues if they #ill be allo#ed by PP* to
accept local mails for international destinations #herein
portion of the income #ill be set aside as part of the
good#ill payment. =o#e$er/ due to some disagreements/
the proposal did not push through.
PP* has been sending demand letters and &Emails to
PP4SA but they ne$er ans#ered bac;. PP*:s last demand
letter #as dated Cebruary/ .009 sent to their ne#ly
disco$ered address but there is still no response.
+eferred the matter to their Megal 5epartment for legal
action.
$. &&C Mana(ement availed t0e servies of Trans'a Air
Car(o" In. and Trans'a Container 5ine -it0out t0e
,ene/t of 'u,li ,iddin( -0i0 is re1uired ,y R.A.
;1$)" and 'aid &+%.$ Million in C@ !%%$ for su0
servies.
"n September 11/ .007/ the PP* Board of 5irectors (B"5)/
through Board +esolution (B+) No. .007E97/ resol$ed to direct
management to draft a contract of international carriage of
mails (by air) to be entered into by and bet#een PP* and
(ranspac Air *argo.
(he B+ stated that the Bids and A#ards *ommittee (BA*)
recommended the a#ard of the contract to (ranspac Air
*argo/ after the conduct of public bidding on April 1-/ .00-.
26
(he follo#ing #ere further stated in the B+A
a. (he then Postmaster 9eneral/ in his memorandum dated
Ianuary .6/ .007/ manifested the #ithdra#al of such an
a#ard and decided to deal directly #ith airline
companies #hich #as appealed to the B"5 by (ranspac
#hich oDered to match the rates of the airline
companies/ gi$ing PP* a credit line and #ithout reuiring
PP* to put up letter of credit! and
b. After said appeal/ the PP* Board concurred that
management should prepare a draft of contract in order
to protect the interest of PP* and abide by the la# on
public bidding.
"n No$ember 9/ .007/ the amended contract bet#een PP*
and (ranspac Air *argo for the international carriage of mails
#as appro$ed through PP* B+ No. .007E113.
(hereafter/ on 5ecember 19/ .003/ PP* B+ No. .003E103
appro$ed the e%tension of the contract for si% months/ from
the Ianuary 20/ .001 e%piration of the contract/ and in a
special meeting on Iune .7/ .001/ the PP* Board resol$ed to
appro$e the e%tension of the contract for another si% months
from Iune 20/ .001.
4nder par. 6.0 of Anne% JAK of 9PPB +esolution No. .2E.003/
(Appro$ing and Adopting the +e$ised 9uidelines on the
&%tension
of *ontracts for 9eneral Support Ser$ices) dated September
.1/ .003/ the follo#ing general conditions must be complied
#ith before e%tension of contracts for general support
ser$ices may be appro$edA
a. No contract e%tension shall e%ceed one year!
b. (he original contract subGect of the e%tension #as
a#arded in accordance #ith the pro$isions of +.A. 9116
and its Implementing +ules and +egulations Part A (I++E
A)!
c. (he procuring entity concerned has substantially
underta;en the procurement acti$ities reuired prior to
a#ard of the ne# contract under +.A. 9116 and its I++EA
27
d. (he aforesaid contract e%tension is underta;en due to
circumstances beyond its control and the procuring entity
concerned cannot a#ard a ne# contract #ithin a month
after the e%piration of the term of the original contract!
e. (he contemplated e%tension is merely an emergency
measure to maintain status uo in the operations of the
Procuring &ntity and to a$oid interruption of ser$ice!
f. (he current ser$ice pro$ider has not $iolated any of the
pro$isions of the original contract! and
g. (he terms and conditions of the original contract shall not
be changed or modifed/ e%cept #hen changes or
modifcations #ill redound to the ad$antage of the
go$ernment at no additional cost to the Procuring &ntity.
8oreo$er/ procedural reuirements pro$ided under par. -.0 of
Anne% JAK of said 9PPB resolution/ states that all contract
e%tensions shall be subGect to the prior appro$al of the =ead
of the Procuring &ntity or hisFher duly authori)ed
representati$e upon recommendation of the Bids and A#ards
*ommittee. Also/ in addition to the foregoing/ if the proposed
e%tension e%ceeds si% (7) months/ the =ead of the Procuring
&ntity or hisFher duly authori)ed representati$e shall
immediately report to the 9o$ernment Procurement Policy
Board in #riting of its intent to e%tend beyond si% months.
Inasmuch as e%tensions of contracts for the deli$ery and
transportation of $arious classes of mails of PP* #ere made
by the *orporation #ithout the reuired public bidding/ this
"<ce in our Audit Ouery No. .009E002 (*H .001)/ reuested
management to inform us if PP* met the general conditions
and complied #ith the procedural reuirements mentioned in
paragraphs 6 and - of Anne% JAK of 9PPB +esolution No. .2E
.003. As of this date ho#e$er/ PP* has not yet submitted
their reply to our Audit Ouery.
+&*"88&N5A(I"N
In the acuisition of deli$ery and transportation ser$ices for
the $arious classes of mails of PP*/ the pro$isions of +A 9116
and its implementing rules and regulations should be
complied #ith. In instances #hen e%tension of contract is
necessary/ the general conditions and procedural
reuirements contained in paragraphs 6 and - of Anne% JAK of
28
9PPB +esolution No. .2E.003 must be metFcomplied #ith by
management.
8ANA9&8&N(:S *"88&N(
(he e%isting contract of (ranspac Air *argo is a rene#al of a
contract #on in a bidding in .007. (he contract stipulates that
the rates shall be the same rate used by alternate airlines
using the IA(AE4P4 agreed rates. (ranspac:s ser$ices is
a$ailed of to ta;e ad$antage of the longer period credit line
allo#ed to ease our cash ?o#.
;. Aounts Reeiva,le A &osta(e C0ar(e Aount
T0e allo-ane for dou,tful aounts of &<$.$ Million
may not ,e ade1uate to 'rovide for 'ro,a,le losses on
aounts reeiva,le A NCR aount of &!)$.; Million.
In the National *apital +egion the pro$ision for doubtful
accounts is computed at 10P of the outstanding recei$able
net of the related allo#ance for doubtful accounts. Such #as
the practice of PP* since *H .002 until *H .003. In Ianuary
.001/ PP* reduced the allo#ance for doubtful accounts by
P12.1 8illion corresponding to a reduction of the percentage
from 10P to .P made retroacti$e to *H .003. It did not
pro$ide for additional allo#ance for *H .001.
(he balance of the allo#ance for doubtful accounts of P-1.1
8illion may be applied to each category of the Accounts
+ecei$able balance as follo#sA
Cate(or
y
At.
Reeiva,le
Allo- for DA Net Amount
A
9M bal #Fo SM 11/231/1-7.-6 11/231/1--.-6 E
B
Bad account #ith
SM
.2/9-1/20-.76 .2/9-1/20-.76 E
*
9ood Account #F
SM
.07/726/7-2..9 17/-62/-99.1. 190/091/0-2.63
Total !)$";*1"$1<.)* <$"$$%"*+1.%
%
1;%"%;1"%<#.)
*
A 100P allo#ance maybe pro$ided for categories A and B
since their collectibility is unli;ely. P1.3.7 8illion of category
* accounts #ere more than 70 days o$erdue. (his is P.-.1
8illion higher than last year. If the remaining allo#ance for
doubtful accounts of P17.- 8illion #ere to be applied to this
balance/ #e ha$e a 12P co$erage.
29
+&*"88&N5A(I"N
8anagement should issue policies and procedures in
estimating the allo#ance for doubtful accounts. (his should
be based on an understanding of the factors that aDect
collectibility of an account/ for e%ample/ the age of the
account/ among others. It may e%tend the aging beyond the
90 day period and apply an appropriate percentage on each
brac;et to estimate the amount that may not be collected.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
1%. Cas0 s0orta(es totalin( &1"%)*"1!+.<+ -ere
disovered in four 9): 'ost o=es in Re(ion <.
Binanial re'orts 0ave not yet ,een su,mitted in )<
'ost o=es -it0 delays ran(in( from ! to 1! mont0s.
(he unsubmitted fnancial reports by postmastersFaccountable
o<cers are unrecorded in the boo;s of the regional o<ce
rendering the *ash and Income accounts understated.
(he regional accountant #as not able to re$ie# the
correctness and completeness of these reports so that they
cannot detect any mal$ersation or manipulation of the
records.
(he regional accountant:s responsibility is not only to record
the fgures appearing in these fnancial reports but also to
chec; the correctness of these fgures. It #as obser$ed that
Accounting prepares the Summary of *ollection and 5eposit
by merely copying the P8:s fnancial report. (here #as no
chec;ing made against the duplicate copies of the o<cial
receipts/ money order issued/ and postage stamps issued.
Mi;e#ise the deposits #ere not chec;ed indi$idually #ith the
ban; $alidated deposit slips. &rrors #ere unco$ered only upon
preparation of ban; reconciliation statements #hich is one or
t#o months delayed.
+&*"88&N5A(I"N
Basic internal control reuires continuous super$ision and
re$ie# of #or; of staD to reduce the ris; of not detecting the
custodians: misuse of assets entrusted to them.
30
(he director of PP* region > and its accounting di$ision should
reuire submission of postmaster:s fnancial report monthly.
(he regional accounting di$ision should re$ie# the
correctness of the Postmasters Cinancial +eport before ta;ing
it up in the boo;s.
+euire the accountable o<cer to restitute the shortage and
fle the appropriate administrati$e charges against him.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
11. &0il'ost 4ar(a,ilis &roCet in &&C Re(ion ; 9&;4B: 0as
no aut0ority from t0e &ostmaster 3eneral and t0e
Board of Diretors" and -it0out ade1uate internal
ontrol system.
+egion I,/ in its pursuit of generating more re$enues/ issued
+egional *ircular No. 0.E03 dated 8arch .2/ .003
implementing guidelines of a re$enue generating proGect
;no#n as Philpost Nargabilis ProGect (P9NB) to operate #ithin
+egion 9. (he obGecti$e of the proGect is to a) ma%imi)e the
use of mail $ehicles (Might 8ail >ans)/ b) additional re$enue
generations and c) impro$e corporate image.
(he types of cargoes for the proGect are the follo#ingA
Agricultural products (in sac;s up to -0 ;gs.)
Agricultural products (in bundles and pieces)
8erchandise in bo%es (up to -0 ;gs.)
9eneral =ard#are
8achineries
Curniture sets
Mipat bahay
=o#e$er/ the cargo operations en$isioned under the P9NB is
not among the functions and po#ers enumerated under
31
Section -/ 7/ and 3 stated under +A 32-6 creating Philippine
Postal *orporation. In this conte%t/ the operation of Philpost
Nargabilis ProGect as #ell as 8obile Parcel Ser$ices in PP*E
+egion 11 does not only need the appro$al of the Postmaster
9eneral but also the concurrence of the PP* Board of
5irectors.
Curthermore/ the proGect has no adeuate internal control and
monitoring system as inA
*opies of #aybill and *argo 8anifest are not preE
numbered and not controlled by the +egional *ustodian.
No copies of #aybills and cargo manifest #ere attached
to the fnancial report of the postmaster thus the
Accounting Section relied only on #hate$er fgures are
reported in the fnancial reports.
@hether or not the proGect indeed brought income to the
corporation could not be established due to the follo#ingA
(he ;argabilis income in .001 amounts to P90/711.-3
and included under "ther +e$enue Income account. (he
guideline issued by the regional director is silent on #hat
specifc re$enue account shall be used.
(here #as no allocation of e%penses or cost center for the
operations of the proGect. &%penses related thereto #ere
charged to "ther Supplies &%pense account #hich
sho#ed a signifcant increase of 112P or from
P133/1-7.1. in .003 to P231/732..7 in .001.
Signifcantly/ the interest of the agency is not protected
against any liability or ris; that may be incurred in the
operation of the proGect. Since the NB proGect is #ithout
e%press authority from the Postmaster 9eneral and
concurrence of the PP* Board of 5irectors damages arising
from operations of the proGect shall become the personal
liability of the PP* regional o<cers.
+&*"88&N5A(I"N
(he ;argabilis proGect in +egion 9 and the 8obile Parcel
Ser$ices in +egion 11 should not only be appro$ed by the
Postmaster 9eneral but should ha$e the concurrence of the
32
Board of 5irectors through the issuance of a board of
resolution.
8anagement should include in their guidelines measures to
insure that all income from proGect are all accounted for/
properly recorded and reported.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
1!. Cas0 advanes amountin( to &!)"1**"#;< remained
unli1uidated as of Deem,er #1" !%%$ ontrary to Se.
$; of &D 1))<.
Section 19 of P5 166- on the limitations on cash ad$ances
pro$ides thatA
JA cash ad$ance shall be reported on and liuidated as soon
as the purpose for #hich it #as gi$en has been ser$ed.K
5etails of these unliuidated cash ad$ances are as follo#sA
Re(ional O=e
Outstandin(
for less t0an 1
yr
Outstandin(
for more t0an
1 yr.
=ead "<ce 6/.22/160 6/399/977
N*+ 2/2.1/63- 1/-72/10.
*A+ 2/1.6/117 E
+egion I> 2/617/263 ./607/-02
+egion >I E -0-/120
+egion I, -60/32. E
+egion , .-3/316 E
Total 1)";%1";;) ;"!*<")%1
+&*"88&N5A(I"N
Strictly adhere to e%isting la#s/ rules/ and regulations in the
granting/ utili)ation and liuidation of cash ad$ances pursuant
to Section 1/ *"A *ircular No. 93E00..
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
1#. 5and and related im'rovements -it0 a ,oo8 value of
&#)"<*+"+%% 0ave not yet ,een re(istered in t0e name
of t0e &&C.
33
@e present in tabular form our obser$ations on real estate
that #ere donated to PP* as e$idenced by 5eeds of 5onation
but ha$e not yet been registered in the name of PP*.
RE3ION No. of 5ots Boo8 Value
+eg. . N.A. P 3/3-1/900
+eg. 6 .3 1-/172/300
+eg. 10 31 11/700/000
Total &#)"<1<"+%%
+&*"88&N5A(I"N
Secure (*(s of the donated real estate properties. (his is a
reiteration of prior years: obser$ation.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
1). Audit of 3ender and Develo'ment 93AD: Bund
As in .003/ PP* did not appropriate at least f$e percent (-P)
of their total .001 budget appropriations in accordance #ith
&" .32 mandating agencies to institutionali)e 9ender and
5e$elopment in go$ernment by incorporating the 9A5
concerns spelled out in their planning/ programming and
budgeting processes.
Cor the year .001/ PP* has utili)ed only P173/0.9.17 for 9A5
proGects and acti$ities #hich is only .006P of their total
appro$ed budget appropriations. (he amount #as used to
conduct seminar on *ommittee on 5ecorum In$estigation and
9ender Sensiti$ity Seminar in three PP* regional o<ces.
Pursuant to the annual 9eneral Appropriations Act/ agencies
are tas;ed to formulate a 9A5 plan and to implement the
same by utili)ing at least f$e percent (-P) of their total
budget appropriations. (his is in accordance #ith &%ecuti$e
"rder (&") .32 (Appro$ing and Adopting the Philippines Plan
for 9enderE+esponsi$e 5e$elopment/ 199-E10.-)
+&*"88&N5A(I"N
Allocate funds for 9ender and 5e$elopment proGects and
acti$ities in accordance to the pro$isions of the 9eneral
Appropriations to Act.
34
*omply #ith guidelines of N&5AFN*+C@ Ioint *ircular No.
.006E1 in the preparation of annual 9A5 plan and budget and
accomplishment reports.
8ANA9&8&N(:S *"88&N(
8anagement agreed #ith the recommendation
35