EXECUTIVE SUMMARY

A. Introduction
The Aklan State College of Agriculture, formerly known as Aklan Agriculture
College, is located in the Municipality of Banga, Province of Aklan, and was converted
into the Aklan State University under Republic Act No. 9055 and approved by then
President Gloria Macapagal - Arroyo on April 4, 2001.
The University is primarily responsible in providing advanced instruction and
professional training in agriculture, science and technology, education and other related
fields, research and extension services, and progressive leadership in these areas.
The University is mandated to offer undergraduate, graduate and short-term
technical courses within its areas of specialization, especially agriculture, and according
to its capabilities, in order to meet the needs of the province and region. The University is
also mandated to strengthen the post-graduate courses, particularly the Masteral and
Doctorate programs in agricultural courses.
The Aklan State Universitys policy-making body is the Board of Regents,
composed of the Commission on Higher Education (CHED) Commissioner as Chairman:
the ASU President as Vice Chairman and eight Members from different Government
Offices and Sectors as follows:
Chair
Chair /Designate
Presiding Officer
Vice Chair
Member
Member
Member
Member
Member
Member
Member
Member

- Chairman, Commission on Higher Education

- Commissioner, Commission on Higher Education
- President, Aklan State University
- Chair of the Senate Committee on Education,
Arts and Culture
- Chair of the House Committee on Higher &
Technical Education
- Regional
Director, National Economic and
Development Authority, Region VI Western Visayas
- Regional Director, Department of Agriculture,
Region VI Western Visayas
- Regional Director, Department of Science
and Technology Region VI Western Visayas
- President, Federation of Faculty Associations,
Aklan State University
- President, Federation of Alumni Associations,
Aklan State University
- President, Federation of Supreme Student Councils,
Aklan State University

Dr. Danilo E. Abayon, Ph.D., was appointed as President of the Aklan State
University, effective March 16, 2011.
The consolidated manpower as of December 31, 2012, was 724 consisting of
410 permanent, 3 temporary, 7 casuals, 147 contract of service, and 157 job orders,
broken down below:
Campus
Banga
New Washington
Makato
Kalibo
Ibajay
Total

No. of Personnel
350
97
11
162
104
724

B. Financial Highlights
The assets and government equity of the university as of December 31, 2012 are
P283,393,051.64 and P260,737,523.30 respectively, compared to last years
P280,991,246.76 and P244,806,920.48 reflecting a corresponding increase of
P2,401,804.88 or
0.85% and P15,930,602.82 or 6.51%.
Liabilities totaling
P22,655,528.34 registered a decrease of P13,528,797.94 or 37.39% compared to previous
years liabilities of P36,184,326.28
Total expenses incurred amounted to P288,900,547.05, while total income and
collections from tuition and other fees amounted to P304,367,820.23, resulting in excess
of income over expenses of P15,467,273.18.
The university reported a net income of P4,773,321.14 generated from this years
Income Generating Projects (IGP).

C. Operational Highlights
For CY 2012, six of the ten examinees from the ASU-CIT Kalibo Campus passed
the Licensure Examination for Architects, while 13 of the 15 examinees passed the
Civil Engineering Board Examination.

A tabulated presentation of the results of examinations is shown below:

Licensure Examination
1.

2.

3.

4.

Architect Licensure Examination (ALE)

LET Secondary

LET Elementary

LET Secondary

5.

LET Elementary

6.

Civil Engineer Licensure Examination

7.

Nurse Licensure Examination

8.
9.

Forester Licensure Examination

Agriculturist Licensure Examination

Campus

Date of Exam

Takers

Passers

% Passed

January 2012
June 2012

4
5

3
2

75.00%
40.00%

October
(Middle East)

100.00%

Banga
Ibajay
Kalibo
Makato
New wash

March 2012

92
17
44
14
23

21
4
12
2
3

22.83%
23.53%
27.27%
14.29%
13.04%

Banga
Ibajay
New wash

March 2012

1
20
27

1
12
15

100.00%
60.00%
55.56%

Banga
Ibajay
Kalibo
Makato
New wash

Sept. 2012

157
44
100
33
32

57
25
49
15
14

36.31%
56.82%
49.00%
45.45%
43.75%

Ibajay
New wash

Sept. 2012

29
26

16
12

55.17%
46.15%

Kalibo

May 2012
Nov. 2012

2
13

2
11

100.00%
84.62%

132

84

63.64%

42

17

40.48%

July 2012

2
37
13

0
8
2

0.00%
21.62%
15.38%

Kalibo

Banga

Banga

Dec. 2011
Released
Feb. 2012
June 2012

Ibajay
10.

Veterinarian Licensure Examination

Banga

Aug. 2012

33

18.18%

11.

Accountancy

Banga

Oct. 2012

13

61.54%

12.

Master Plumber

Sept. 2012

0.00%

D. Scope of Audit
A comprehensive audit was conducted on the accounts and operations of the
Aklan State University, Banga, Aklan and its three campuses for Calendar Year 2012.
The audit was aimed to ascertain whether the financial transactions were carried out in
accordance with existing laws, rules and regulations.
The objective of the audit was to ascertain the fairness and reliability of the
agencys report on its financial position and results of operation. It also included test of
compliance of transactions to existing laws, rules and regulations to ensure to their
regularity and propriety.

E. Auditors Report on Financial Statements

The auditor rendered a qualified opinion on the fairness of presentation of the
financial statements of the university as of December 31, 2012, due to the
non-reconciliation of the Property, Plant and Equipment Account of the four campuses of
the University.

F. Summary of Significant Observations and Recommendations

The following
recommendations:

are

the

significant

findings

and

the

corresponding

1. A net discrepancy of P133,649,263.17 between the Inventory of Property, Plant

and Equipment totaling P148,263,063.13 of the Aklan State University as of
December 31, 2012 vis--vis the Consolidated Balance Sheet amount of
P281,912,326.30, contrary to Section 111 of P.D. 1445 and Section 12, appendix
8, paragraph. C of the Manual on the NGAS, Vol. II, resulted in doubtful
accuracy and reliability of the PPE accounts.
We recommend that a Committee should conduct an inventory of Property, Plant and
Equipment, as well as, prepare the corresponding Report on the Physical Count of
Property, Plant and Equipment, to be subsequently reconciled with the Accounting
records, pursuant to Section 111 of P.D. 1445 and Section 12, appendix 8, paragraph
C of NGAS, Vol. II. Discrepancies noted should be immediately verified and
adjusting entries should be prepared, if warranted.
Management should require the Accountants of the four Campuses to review and
conduct periodic reconciliation of account balances, to ensure the accuracy and
reliability of the PPE accounts and the fair presentation of the Financial Statements.

2. Property, Plant and Equipment (PPE) totaling P5,630,954.29, were not provided
with depreciation, contrary to Section 67 of NGAS, resulting in the
overstatement of the reported income in the Financial Statement.
We recommend the following:
a. The Accounting Unit of CIT- Kalibo Campus should retrieve data from
previous transactions, to expedite proper identification of the properties
involved, particularly the brand, date purchased/acquired, number of units and
unit cost, which would provide accurate data for the provision of depreciation;
and prepare/ maintain Property Ledger Cards for these items and subsequent
acquisitions of property to facilitate allocation of depreciation; and
b. Management should require the Chief Accountant to correct the accounting
treatment for Land Improvements and Other Structures in the books as
prescribed under COA Circular No. 2003-001 dated June 17, 2003 and cause
the provision of depreciation allowance for these accounts under Property,
Plant and Equipment, so that the cost of these assets are properly distributed
as depreciation expense over the years that they are in use, in accordance with
the government accounting policies for depreciation under COA Circular No.
2003-007 dated December 11, 2003.
ASU- Main Campus, Banga, Aklan
3. Various accounts reflected in the Financial Statements of ASU-Main Campus do
not reconcile with the corresponding accounts in the consolidated Balance Sheet
prepared by the three other campuses, contrary to Section 111 of P.D. 1445,
resulting in doubtful reliability on the correctness of the amounts reported and
the fair presentation of the Financial Statements.
We recommend that Management coordinate the immediate reconciliation of various
accounts reflected in the Financial Statements of ASU-Main vis-a-vis the
corresponding accounts in the consolidated Balance Sheet, prepared by the three
other campuses, to ensure the reliability on the correctness of the accounts reported
and the fair presentation of the Financial Statements.
Henceforth Management should require regular reconciliation of related accounts by
Accountants of the four campuses. Likewise, thorough review of the financial
statements must be undertaken, prior to submission, to ascertain the correctness of
balances reflected.
4. Several parcels of Land were not recorded in the books of the ASU Main
Campus, contrary to Section 63 of P.D. 1445, resulting in the understatement of
the Land account.

We recommend that Management expedite the process for the titling of four parcels
of land. Subsequently, upon receipt of complete documentation, the Accountant
should book up the value of the land, in accordance with Section 63 of P.D. 1445.
5. Property, Plant and Equipment Ledger Cards (PPELC) were not maintained by
the Agency contrary to Section 114 of P.D. 1445 and Section 12, Volume II of the
Manual on the New Government Accounting System (NGAS) for National
Government Agencies, thus, affecting the accuracy and reliability of the
Property, Plant and Equipment (PPE) accounts totaling P 196,617,312.07, net of
depreciation and causing delayed verification.
We recommend that Property, Plant and Equipment Ledger Cards (PPELC) should
be maintained by the Agency, pursuant to Section 114 of P.D. 1445 and
Section
12, Volume II of the Manual on the New Government Accounting System (NGAS)
for National Government Agencies, to ensure the accuracy and reliability of the
Property, Plant and Equipment (PPE) accounts totaling P 196,617,312.07, net of
depreciation.
ASU-Kalibo Campus
6. Books of Accounts of the Agency were not completely and properly maintained,
contrary to Section 114 of PD 1445 and Section 4.d of the Manual on the
New Government Accounting System (NGAS), Volume I, thus, affecting the
accuracy and reliability of financial reports and causing delayed verification of
accounts.
We recommend the following:
a. The Accountant should set-up and maintain General Journals, General Ledger
(GL) and Subsidiary Ledgers (SL), pursuant to Section 114 of PD 1445 and
Section 4.d of the Manual on the New Government Accounting System,
Volume I; and
b. The Agency Head should also designate a Bookkeeper, to maintain Subsidiary
Ledgers. The Administrative Officer should provide training for the SL
bookkeeping, the reconciliation process between the GL and the SL as well
as ensure the supervision and monitoring of said activities.

7. The 20 years estimated useful life assigned to Library Books was beyond
the
useful life stipulated in COA Circular No. 2003-007, dated December 11, 2003,
resulting to the understatement of accumulated depreciation and depreciation
expense recorded at P405,380.32 as of December 31, 2012.
We recommend compliance with COA Circular No. 2003-007, dated December 11,
2003, and preparation of journal entries for the adjustment of the estimated useful

life of Books from 20 to five years as well as the corresponding accumulated

depreciation.
8. Erroneous recording of transactions included in the Prior Years Adjustment
Account for Fund 164 (STF) totaling P96,924.00 as of year-end, contrary to
Section 111.2 of PD 1445, resulted to doubtful reliability on the accuracy of the
said account.
We recommend that the Accountant analyze the Prior Years Adjustments" account
for Fund 164 (STF) and prepare the necessary adjusting entries, to ensure the
accuracy of the account, pursuant to Section 111.2 of PD 1445.

G. STATUS OF SUSPENSIONS, DISALLOWANCES AND CHARGES

Audit disallowances of Aklan State University, Banga, Aklan, amounting to
P923,320.81 remained unsettled as of December 31, 2012, for failure of the Agency
to enforce the settlement of the same contrary to Section 7.1 of the 2009 Rules
and Regulations on the Settlement of Accounts prescribed under COA Circular
No. 2009-006. (Please see Schedule 1 for details.)

H. IMPLEMENTATION OF PRIOR YEARS RECOMMENDATIONS

Twenty of the 26 recommendations embodied in the CY 2011 Annual Audit

Report were fully implemented, while three were partially implemented and the
remaining three which were not implemented, are reiterated in this report.