EXECUTIVE SUMMARY

A. Introduction

The University of Northern Philippines (UNP) was created by virtue of Republic

Act (RA) No. 4449 holding the distinction of being the first and oldest state university in
Northern Luzon. The University is mandated to give technical and professional trainings,
advanced instructions in literature, philosophy, the science and arts besides promotion of
technological and scientific researches and extension services.

The administration of the University and the exercise of its corporate powers are
vested exclusively in the Board of Regents.

The University is headed by Dr. Erwin F. Cadorna as President, who is assisted by

three Vice Presidents (VPs) for Academic Affairs, Finance and Administration, and
Research and Extension.

As of December 31, 2021, UNP had a total manpower complement of 1,176 which
is composed of 587 permanent/temporary, 42 contractual, 293 part-time and 254 job
orders/contract of service.

B. Operational Highlights

The reported targets and accomplishments of the University for Calendar Year
(CY) 2021 are as follows:

Organizational Outcomes/ Performance Target Actual Percentage of

Indicators Accomplishments
I. Higher Education Program
Outcome Indicators:
1. Percentage of first-time licensure exam- 50 63 126
takers that pass the licensure exams
2. Percentage of graduates (2 years prior) 45 50 111
that are employed
Output Indicators:
1. Percentage of undergraduate student 58 48 83
population enrolled in Commission on
Higher Education
(CHED)-identified and RDC-identified
priority programs
2. Percentage of undergraduate programs 91 100 110
with accreditation
II. Advanced Education Program
Outcome Indicators:
1. Percentage of graduate school faculty
engaged in research work applied in any
of the following:
a. Pursuing advance research degree 17 18 106
program (PhD)

i
 Organizational Outcomes/ Target Actual Percentage of
Performance Indicators Accomplishments
b. Actively pursuing in the last three 82 92 112
years investigating research, basic
and applied scientific research,
policy research, social science
research, etc.
Output Indicators:
1. Percentage of graduate students enrolled 100 100 100
in research degree programs
2. Percentage of accredited graduate 83 85 102
programs
III. Research Program
Outcome Indicators:
1. Number of research outputs in the last 6 7 117
three years utilized by the industry or by
other beneficiaries
Output Indicators:
1. Number of research outputs completed 35 36 103
within the year
2. Percentage of research outputs published 13 24 185
in internationally-refereed journal within
the year
IV. Technical Advisory Extension Program
Outcome Indicators:
1. Number of active partnership with LGUs, 40 42 105
industries, NGOs, NGAs, SMEs and
other stakeholders as a result of extension
activities
Output Indicators:
1. Number of trainees weighted by the 5,520 5,542 100
length of training
2. Number of extension programs organized 130 140 108
and supported consistent with the SUC’s
mandate and priority programs
3. Percentage of beneficiaries who rate the 94 97 103
training course/s as satisfactory or higher
in terms of quality and relevance

C. Financial Highlights

The financial position and financial performance of the UNP for CYs 2021 and
2020 are shown below:

Financial Position

2021 2020 Increase/ Percentage

(Restated) (Decrease) of
Inc./(Dec.)
Assets 2,422,836,814.82 1,861,304,566.52 561,532,248.30 30
Liabilities 250,694,316.85 173,847,280.58 76,847,036.27 44
Net Assets/Equity 2,172,142,497.97 1,687,457,285.94 484,685,212.03 29

ii
 Financial Performance

2021 2020 Increase/ Percentage

(Restated) (Decrease) of
Inc./(Dec.)
Revenue 222,837,094.69 235,495,897.02 (12,658,802.33) (5)
Current Operating Expenses 688,005,645.15 643,675,459.64 44,330,185.51 7
Net Financial Assistance/
Subsidy 949,853,762.49 528,353,169.38 421,500,593.11 80
Surplus (Deficit) for the year 484,685,212.03 120,173,606.76 364,511,605.27 303

Summary of Total Appropriations, Allotments, Obligations and Disbursements

2021 2020 Increase/ Percentage

(Decrease) of
Inc./(Dec.)
Fund 01
Appropriations 925,593,324.00 711,240,282.00 214,353,042.00 30
Allotments 805,332,219.00 711,240,282.00 94,091,937.00 13
Continuing Appropriations 33,089,502.09 41,280,930.57 (8,191,428.48) (20)
Obligation Incurred 795,383,268.10 682,926,455.99 112,456,812.11 16
Disbursements 646,606,647.58 464,570,551.41 182,036,096.17 39
Unobligated Allotment 43,238,452.99 28,313,826.01 14,924,626.98 53

Fund 05
Approved Allotment 733,690,493.66 460,617,000.00 273,073,493.66 59
Utilization Incurred 212,704,323.44 87,998,000.00 124,706,323.44 142
Unutilized Allotment 520,986,170.22 372,619,000.00 148,367,170.22 40

D. Scope of Audit

The audit covered the accounts and operations of the UNP for CY 2021. The audit
was conducted to: a) ascertain the level of assurance that may be placed on the
Management’s assertion on the financial statements; b) determine the propriety of
transactions as well as extent of compliance on the applicable laws, rules and regulations;
c) recommend agency’s improvement opportunities; and d) determine the extent of
implementation of prior years’ audit recommendations. The audit was conducted in
accordance with International Standards of Supreme Audit Institutions (ISSAIs).

E. Auditor’s Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the

financial statements of UNP as at December 31, 2021 due to the following:

a. Bank credit transactions under the four depository accounts of the University
covering CYs 2018 to 2021 were temporarily lodged to Other Deferred Credits
account in the total amount of ₱24,158,514.91 as at December 31, 2021 and
remained not classified/adjusted to its proper accounts, thus, affecting the
fairness of presentation of affected accounts in the financial statements.

iii
 b. One hundred seven (107) DVs and its corresponding supporting documents
covering April to December 2021 under the different funds totaling
₱102,929,248.03 were not submitted to the audit team within the prescribed
period, incurring 1 to 9 months of delays, which was contrary to Section 7.2.1
(a) of COA Circular No. 2009-006, precluding the timely conduct of post-audit
of government transactions and determination of complete and proper recording
of accounts in the financial statements.

c. Purchased inventory items were outrightly recorded in the books as Expenses,

instead of, Inventories using Perpetual Inventory Method as prescribed under
Sections 7 and 9, Chapter 8 of GAM for NGAs Volume I, thus, understating
the Inventory accounts and equally overstating the related Expense accounts by
an undetermined amount.

F. Summary of Significant Observations and Recommendations

Other than the bases for modifying our opinion on the financial statements, the
following are some of the significant audit observations and the corresponding
recommendations, which were discussed with Management officials concerned during the
exit conference held on March 14, 2022, details of which are discussed in Part II of this
report. Management views and comments were incorporated in the report, where
appropriate.

a. The fund transferred by the Commission on Higher Education (CHED) for the
implementation of a special project sourced from the appropriations of RA No.
11494 in the total amount of ₱25,000,000.00 is no longer valid for obligation
and utilization as it already lapsed on June 30, 2021 prior to the receipt thereof
and such amount remained undisbursed as at December 31, 2021, yet, not
reverted to the National Treasury contrary with Section 1 of RA No. 11519 and
Section 3.2.1 of DBM NBC No. 585, hence, casting doubts on the propriety and
legality of the project undertaking. As such, the intended purpose of the smart
campus development project was not realized during the emergence of the
COVID-19 pandemic.

We recommended that Management direct the Project

Leader/Accountant/Budget Officer to immediately secure clearance from the
DBM as regards the validity/availability of the fund for disbursement.
Otherwise, terminate the contract and return the full amount to the National
Treasury in compliance with Section 1 of RA No. 11519.

b. Bid evaluation and post-qualification procedures were not judiciously

conducted by the BAC and/or TWG, and supplemental/bid bulletins were not
issued to amend inconsistent provisions of bid documents contrary to Sections
30.1, 30.2 and 32.2.1, 34.3 (b) (i) (ii) of the 2016 Revised IRR of RA No. 9184,
casting doubts on the legality and propriety of 12 procurement transactions
aggregating ₱307,589,616.28.

iv
 We recommended that Management direct the:

1.) BAC to (i) reconstitute the composition of the TWG and tap those who
are meticulous and qualified to assist in the procurement process to ensure
that the BAC is harnessed the needed knowledge, experience and/or
expertise in the procurement process, if warranted; (ii)issue the necessary
Supplemental/Bid Bulletin for all clarifications made during pre-bid
conference that warrant a modification/amendment of certain provisions
or portions of the bidding documents; and (iii) thoroughly review bid
documents so that any inconsistencies or defects noted therein, a
corresponding Supplemental Bid Bulletin is immediately issued at least
seven calendar days before the deadline for the submission and receipt of
the bids in conformity with Section 22.5.2 of the 2016 Revised IRR of RA
No. 9184;

2.) TWG and BAC to carefully assess the technical and financial
requirements of bids prescribed under Sections 30.1, 30.2 and 32.2.1 of
the 2016 Revised IRR of RA No. 9184 and strictly observe the post-
qualification procedures as mandated under Section 34.3 (b) (i) (ii) of said
IRR of RA No. 9184; and capacitate them through attendance to seminars
on bidding procedures to improve their competencies, and

3.) Head, Accounting Office to recognize in the books as Accounts

Receivable due from concerned contractors the amount of ₱ 584,043.00,
and to deduct the corresponding receivable from the future claims of the
concerned Contractors.

Discussions of the foregoing including other significant audit observations are

detailed in Part II of this Report.

G. Summary of Audit Suspensions, Disallowances and Charges

Suspensions Disallowances Charges

Balance, January 1, 2021 - 17,898,646.45 -
Add: Suspensions, Disallowances and 1,262,380.35 7,043,021.72 -
Charges during the year
Total 1,262,380.35 24,941,668.17 -
Less: Settlements made during the year 1,262,380.35 479,031.72 -
Balance, December 31, 2021 - 24,462,636.45 -

H. Status of Implementation of Prior Years’ Audit Recommendations

Of the 40 audit recommendations contained in the CYs 2020, 2019, 2018 and 2017
Annual Audit Reports, 27 were implemented and 13 were not implemented. The details
are presented in Part III of this report.