EXECUTIVE SUMMARY

A. Introduction

The Housing and Land Use Regulatory Board (HLURB) was reconstituted as
the Human Settlements Adjudication Commission (HSAC), referred to as the
"Commission" by virtue of Section 12, Chapter IV of the Republic Act (RA) No.
11201, otherwise known as the “Department of Human Settlements and Urban
Development Act” which was signed on February 14, 2019 by President Rodrigo
Roa Duterte. The Commission assumes and continues to perform the adjudication
function of HLURB, and is attached to the Department of Human Settlements and
Urban Development (DHSUD) for policy, planning and program coordination only.

The Commission shall be guided by the Constitutional provision that affords

all persons the right to a speedy disposition of their cases before all judicial, quasi-
judicial or administrative bodies relating to Real Estate Development, Homeowners
Associations and appeals from decisions of Local and Regional Planning and
Zoning Bodies. HSAC is vested with exclusive and original jurisdiction to hear and
decide cases involving subdivisions, condominiums, memorial parks and similar
real estate developments and transactions, homeowners associations, the
implementation of the balanced housing development provision of RA No. 7279 as
amended, and laws and regulations being implemented by DHSUD; and appellate
jurisdiction over decisions of local zoning bodies.

Pursuant to Section 13, Chapter IV of the same RA, the Commission shall be
composed of Commission en banc-Five Commissioners appointed by the President,
and Regional Adjudication Branch (RAB). The Executive Commissioner, chosen
by the President from among the five Commissioners, shall be responsible for the
administration and operations of the Commission, including supervision of
personnel, and shall be assisted by the Executive Clerk of the Commission. On the
other hand, there shall be as many RABs as there are Regional Offices (ROs) of
DHSUD. The President shall appoint as many Regional Adjudicators as may be
necessary upon the recommendation of the Secretary of DHSUD.

The HSAC is presently headed by Executive Commissioner Melzar P. Galicia

and assisted by four Commissioners.

The Commission has 16 operational RABs, as follows:

RAB Coverage in CY 2021 Coverage in CY 2020

1. RAB-NCR National Capital Region Expanded National
(NCR) Capital Region (ENCR)
2. RAB-CAR Cordillera Administrative Northern Luzon Region
Region (CAR) (NLR)
3. RAB-I Ilocos Region

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 RAB Coverage in CY 2021 Coverage in CY 2020
4. RAB-II Cagayan Valley
5. RAB-III Central Luzon Northern Tagalog
Region (NTR)
6. RAB-IV-A CALABARZON Southern Tagalog
Region (STR)
7. RAB-IV-B MIMAROPA Region
8. RAB-V Bicol Region Bicol Region (BR)
9. RAB-VI Western Visayas Western Visayas Region
(WVR)
10. RAB-VII Central Visayas Central Visayas Region
(CVR)
11. RAB-VIII Eastern Visayas
12. RAB-IX Zamboanga Peninsula
13. RAB-X Northern Mindanao Northern Mindanao
Region (NMR)
14. RAB-XI Davao Region Southern Mindanao
Region (SMR)
15. RAB-XII SOCCSKSARGEN
16. RAB-XIII Caraga

As of December 31, 2021, the Commission had a total personnel complement

of 318, consisting of 263 filled plantilla positions and 55 Contract of Service
personnel:

Plantilla Total
Office Contractual
Position Personnel
Central Office (CO) 106 14 120
RAB-NCR 24 3 27
RAB-CAR 10 3 13
RAB-I 8 3 11
RAB-II 6 1 7
RAB-III 13 4 17
RAB-IV-A 11 4 15
RAB-IV-B 12 1 13
RAB-V 11 3 14
RAB-VI 8 1 9
RAB-VII 9 2 11
RAB-VIII 5 2 7
RAB-IX 5 3 8
RAB-X 9 3 12
RAB-XI 8 3 11
RAB-XII 12 4 16
RAB-XIII 6 1 7
Total 263 55 318

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B. Operational Highlights

The reported agency’s targets and accomplishments for Calendar Year (CY)
2021 are the following:

Organizational Outcomes (OO) / Physical Accomplishments

Baseline
Performance Indicators (PIs) Target Physical Percentage
HUMAN SETTLEMENTS ADJUDICATION PROGRAM
Outcome Indicators:
1. Percentage of decisions elevated to
Court of Appeals that are 91% 90% 94% 104.44
affirmative
2. Percentage of stakeholders who
rated adjudication process as 60% 50% 71% 142
satisfactory or better
Output Indicators:
1. Percentage of decisions rendered
45% 36% 39% 108.33
out of the total number of cases
2. Percentage of decisions rendered
within sixty (60) days out of the
60% 50% 28% 56
total number of cases ripe for
resolution
3. Percentage of decisions rendered
on Home Owners Association
(HOA) disputes within sixty (60) 60% 40% 33% 82.50
days out of the total number of
HOA cases ripe for resolution

C. Financial Highlights

The financial position, financial performance and sources and utilization of

funds of the Commission for CY 2021, with the corresponding figures for CY 2020,
are summarized below:

Amount (P)
Particulars 2020
2021
(As Restated)
Financial Position
Assets 1,601,874,509.28 1,544,420,380.74
Liabilities 274,352,043.08 233,876,707.62
Net Assets/Equity 1,327,522,466.20 1,310,543,673.12
Financial Performance
Revenue 10,584,409.52 7,161,311.62
Current Operating Expenses 288,347,564.45 208,369,963.87
Net Financial Assistance/Subsidy 306,935,420.28 268,724,651.12

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 Amount (P)
Particulars 2020
2021
(As Restated)
Miscellaneous Income 133.56 405,000.00
Gains 30,000.00 -
Losses (11,731.93) (427,387.68)
Surplus/(Deficit) 29,190,666.98 67,493,611.19
Sources and Utilization of Funds
Appropriations 284,452,614.00 263,704,968.00
Continuing Appropriations 46,385,335.54 -
Allotments 330,837,949.54 263,704,968.00
Obligations Incurred 303,533,477.49 209,168,665.30
Disbursements 293,006,916.38 208,980,127.17
Unobligated Allotment 27,304,472.05 54,536,302.70

The Summary of Appropriations, Allotments, Obligations, Disbursements and

Balances (SAAODB) for CY 2021 is shown in Annex A.

D. Scope of Audit

The audit covered the accounts and operations of the HSAC-Central Office
(CO) and its RABs except for RAB-XII, for CY 2021. It was conducted to: a)
ascertain the level of assurance that may be placed on the Management’s assertions
on the financial statements (FSs); 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 year’s audit recommendations. Moreover, the audit was conducted in
accordance with International Standards of Supreme Audit Institutions (ISSAIs).

E. Opinion of the auditor on the fairness of presentation of the Financial

Statements

The Auditor rendered an unmodified opinion on the fairness of presentation of

the consolidated FSs of HSAC as at December 31, 2021.

F. Summary of Significant Observations and Recommendations

The following are the significant audit observations and corresponding

recommendations:

1. Various accounting errors and omissions in recording resulted in the

overstatement and understatement of the affected accounts’ year-end balances
by P7,786,459.59 and P881,546.73, respectively; thus, not fairly presented,

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 contrary to Section 7, Chapter 19, Volume I of the Government Accounting
Manual (GAM) for National Government Agencies (NGAs). (Finding No. 1).

We recommended and Management agreed to instruct the Chief Accountant

of HSAC-CO and Regional Accountant of RAB-V, VI, and IX to prepare the
adjusting entry to correct the errors.

2. Various accounting deficiencies that were noted in the recording and reporting
of financial transactions aggregating P60,694,266.30 had undermined the
qualitative characteristics of information in the FSs. (Finding No. 2).

We recommended and Management agreed to require: a) the Chief

Accountant and the Head of General Service Division (GSD) of HSAC-CO to
reconcile the discrepancy between the General Ledger (GL) and the Report on
the Physical Count of Property, Plant and Equipment (RPCPPE), and adjust
their records accordingly; b) the Chief Accountant and the Head of
GSD/Property Officer of HSAC-CO and RAB-NCR to ensure that their
records of Property, Plant and Equipment (PPE) are reconciled every after
physical count; c) all employees of RAB-IV-A that were transferred to
DHSUD to obtain from the agency clearance from fund and property
accountabilities, and to return their issued properties to the Acting Property
Officer who, in turn, must update/cancel the related Property
Acknowledgement Receipt (PAR), and determine whether subject PPE would
be retained by the agency or be transferred; and d) the Property Custodian of
RAB-IV-A to prepare the list of transferred and turned-over properties and to
submit the same to the Regional Accountant for his reference and appropriate
action; e) the Property Custodian of RAB-IV-A and XI to prepare a Property
Transfer Report (PTR) for the transfer of PPE, and update/issue a new PAR to
HSAC employees for their issued properties; and f) the concerned
Accountants of RAB-IV-A and XI to prepare the necessary adjusting entries
for the transfer of properties to DHSUD.

We further recommended and Management agreed to strengthen the agency’s

internal control and monitoring of the account through the following: a) the
Chairperson of the Committee of HSAC-CO to continue the analysis,
monitoring, and reconciliation of the inventory of cases vis-à-vis the balance
of the cash bond or consignation money received in trust by the agency and
henceforth, provide a copy of its status to the Chief Accountant to facilitate
the reconciliation of its balances with the recorded Trust Liabilities account;
and b) the Chief Accountant to review, analyze, and reconcile the dormant
consignation fees and henceforth, prepare the necessary adjusting entries; c)
the Adjudicators of RAB-NCR to provide the Accounting Division with the
copy of the status of cases filed so that the Regional Accountant could
determine the resolved cases; d) henceforth, the Regional Accountant of
RAB-NCR to inform the Adjudicators to prepare and issue order of release of
consignation fees of those resolved cases; and e) the Regional Accountant of

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 RAB-NCR to identify those dormant consignation fees with no available
documents and propose the request for its write-off to the agency head
supported with the required documents in Section III.A.10 of COA Circular
97-001.

3. Various deficiencies were noted in the compliance of the agency with existing
rules and regulations on: (a) collections and deposits; (b) Petty Cash Fund
(PCF); (c) procurement of inventory; (d) maintenance of accounting and
property records; (e) conduct of physical count of inventories and PPE; and (f)
reporting and disposal of unserviceable PPE. (Finding No. 3).

We recommended and Management agreed to require the: a) Chief Regional

Adjudicator of RAB-NCR to monitor the compliance of the Special Collecting
Officer (SCO) with Section 32, Chapter II of the Revised Cash Examination
Manual (RCEM); b) Regional Accountant of RAB-NCR and IV-B to ensure
the completeness of all documentary requirements in the grant of petty cash
advance; c) Petty Cash Fund Custodian (PCFC) of RAB-NCR to ensure the
completeness of all documentary requirements in the liquidation of PCF,
prepare the necessary Report of Paid Petty Cash Voucher (RPPCV) every
replenishment of PCF and familiarize himself and comply with the necessary
provisions of Chapter 6, Volume I of the GAM for NGAs on the accounting
policies regarding PCF; d) PCFC of RAB-NCR and IV-B to replenish the PCF
as soon as disbursements reached at least 75 percent or as needed; e) PCFC of
RAB-IV-B to avoid using the PCF for payment of regular expenses and
purchases of semi-expendable properties; f) PCFC of RAB-XIII to prepare the
Petty Cash Fund Record (PCFR) to monitor the grant and utilization of PCF;
g) Chief Regional Adjudicator of RAB-NCR and IV-B to review the monthly
recurring petty operating expenses of the agency and prepare estimates of
petty expenses to be able to set up a realistic PCF sufficient for one month; h)
Chief Regional Adjudicator of RAB-XIII to strictly observe Section 101(2) of
Presidential Decree (PD) No. 1445 and ensure that all Accountable Officers
are properly bonded as required and comply with Section 26 of the General
Provisions (GPs) of General Appropriations Act (GAA) for Fiscal Year (FY)
2021 and in the subsequent GAA containing such provisions; i) Supply
Officer of RAB-XIII to closely monitor the movement of inventories to avoid
purchasing office supplies more than the two-month requirement; j) Acting
Property/Supply Officer of RAB-III and VI to update/accomplish, prepare and
maintain Stock Card (SC) to be used for reconciliation with accounting
records; k) Regional Accountant of RAB-II and VI to prepare and maintain
Supply Ledger Card (SLC) for each type of inventory item; l) Inventory
Committee of RAB-II, III and VI to conduct physical count of inventories
every end of the semester to determine the actual existence and condition of
inventories and prepare the Report on the Physical Count of Inventories
(RPCI) and submit a copy to the Audit Team within the prescribed period; m)
Property/Supply Officer of HSAC-CO and RAB-V to account the
unserviceable PPE and prepare the Inventory and Inspection Report of

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 Unserviceable Property (IIRUP); n) Henceforth, Property/Supply Officer of
HSAC-CO, RAB-NCR, and V to furnish the Chief/Regional Accountant with
a copy of the IIRUP as basis for dropping from the books of accounts the cost
of PPE once disposed; o) Head of HSAC-CO to create a Disposal Committee
to undertake the immediate disposal of the unserviceable PPE items; p) Chief
Regional Adjudicator of RAB-NCR to instruct the Disposal Committee to
immediately undertake the disposal of unserviceable PPE items after the
online training in accordance with Section 79 of PD No. 1445 and the Manual
on Disposal of Government Property to maximize their realizable value; q)
instruct the inventory committee of RAB-CAR, II and IV-A to prepare the
RPCPPE after the conduct of physical count and submit a copy to the Audit
Team; r) require the Regional Accountant and the Property Officer of RAB-
CAR, II and IV-A to reconcile their records; s) Chief Regional Adjudicator of
RAB-I and V to refrain the payment of purchases of goods and services on the
basis of reimbursement and ensure that payments for the purchase of goods
and services are in accordance with COA Circular No. 97-002; and t) Chief
Regional Adjudicator of RAB-VII and VIII to ensure the proper
accomplishment of the Purchase Orders (POs) and Inspection and Acceptance
Reports (IARs).

4. In HSAC-CO, out of 265 appealed cases deemed submitted for decision for
CY 2021, 35 cases were resolved within the prescribed period, one (1) case
was resolved beyond the prescribed period with delays of 80 days, 145 cases
were resolved but cannot be determined if within the prescribed period due to
incomplete data on the date when the appealed cases were deemed submitted
for decision, and 84 cases were not yet due for decision. (Finding No. 4).

We recommended and Management agreed to instruct the Officer-in-Charge

(OIC)-Office of the Executive Clerk to continue to monitor the disposition of
appealed cases in accordance with Section 121, Rule 27 of the HSAC Rules
and Procedure.

5. In RAB-NCR, III, IV-A and XI, out of 1,694 cases deemed submitted for
decision, 805 cases were not resolved within the prescribed period incurring
delays ranging from 1 to 7,142 days contrary to Section 54, Rule 14 of the
HSAC Rules of Procedure-En Banc Resolution No. 8, Series of 2021 and
Section 48, Rule 14 of the 2019 Revised HLURB Rules of Procedure-
Resolution No. 980, Series of 2019. (Finding No. 5).

We recommended and Management agreed to: a) develop and implement an

efficient recording system and strengthen the monitoring of cases deemed
submitted for decision by: (a) preparing a Monitoring Report indicating the
date when the case is deemed submitted and when the case is resolved in order
to determine whether the case is resolved within the prescribed period; and (b)
evaluating the necessity of procuring a database system for all cases handled
by the agency (for RAB-III, IV-A and XI); and b) propose to the Head of the

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 Human Resource Development Division (HRDD) to evaluate the necessity of
hiring of additional personnel to assist the adjudicators of the agency (for
RAB-NCR, III, IV-A and XI).

6. In HSAC-CO, RAB-II, IV-B, VI, VII, VIII, X, and XIII, various deficiencies
were noted such as: (a) various Disbursement Vouchers (DVs) totaling
P3,994,678.57 were submitted to the Audit Team without the complete
supporting documents contrary Section 4(6) of PD No. 1445 and COA
Circular No. 2012-001 and Section 12, Chapter 6, Volume I of the GAM for
NGAs; and (b) various financial and budgets reports including the supporting
documents such as DVs and Official Receipts (ORs) were submitted late and
not submitted totaling P5,343,504.95 and P13,648,294.39, respectively, to the
Audit Team within the prescribed period provided in Volume I of the GAM
for NGAs, Section 7 of the COA Circular No. 2009-006, Section 361 (g),
Volume II of the Government Accounting and Auditing Manual (GAAM) and
COA Circular No. 77-61; thus, precluding the timely review and verification
of the validity, propriety, and regularity of the transactions. (Finding No. 6).

We recommended and Management agreed to require the: a) Head of GSD of

HSAC-CO to coordinate with the Accounting Division and monitor any
revision on the SOA and henceforth, instruct the service provider to issue an
updated Statement of Account (SOA), instruct the Cashier to prepare and
issue a written letter addressed to the suppliers or service providers who have
already received the payment but have not yet issued or provided the ORs
reminding them to submit it to the HSAC-CO, and instruct the Cashier to
submit to the Audit Team a complete list of the ORs that were not yet
submitted and a list of all paid DVs with no supporting ORs; b) Regional
Accountant of RAB-VII, VIII and XIII to submit the lacking documents for
their respective transactions; c) Concerned employees of RAB-III to monitor
the submission of all perfected POs and Contracts to the Audit Team within
the prescribed period; d) Concerned personnel of RAB-X to submit the
monthly Report of Fuel Consumption in accordance with the Section 361 (g)
of the GAAM and COA Circular No. 77-61; e) Regional Accountant of RAB-
X to submit the monthly Report of Official Travels and Driver’s Trip Tickets
to the Audit Team; f) Chief Accountant of HSAC-CO to ensure that the DVs
are fully accomplished; g) OIC, Accounting Division/Accountants of HSAC-
CO, RAB-IV-B, VII, VIII and XIII to ensure that all DVs are supported with
complete documentary requirements; h) Chief/Regional Accountant of
HSAC-CO, RAB-II, IV-B, VI, VII, and VIII to strictly observe the submission
of monthly financial reports including its supporting documents within the
prescribed period; and i) Budget Officer of RAB-II and IV-B to strictly
observe the submission of monthly budget reports and its supporting
documents within the prescribed period.

7. In RAB-VII and XI, various expenditures totaling P115,535.79 comprising of:

(a) expenses incurred during the conduct of Gender and Development (GAD)

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 Sensitivity and Capability Building Training of P63,700.94; (b) meals
expenses during webinar of P9,880.00; and (c) Christmas gift packs provided
to employees, contract of service (COS) personnel and security guards of
P41,954.85 were considered irregular, unnecessary, and excessive pursuant to
the COA Circular 2012-003. (Finding No. 7).

We recommended and Management of RAB-VII agreed to refrain from

incurring excessive and unnecessary expenditures and to exercise prudence in
the disbursement of government funds.

We further recommended and Management of RAB-XI agreed to: a) refund

the amount of Christmas gift packs worth P41,954.85; and b) stop providing
any form of benefits without legal basis such as Christmas gift packs.

The above findings and recommendations were discussed with Management

officials concerned in an exit conference held on May 27, 2022. Management views
and comments were incorporated in the report, where appropriate. The details of the
above observations were discussed in Part II of this report.

G. Status of Audit Suspensions, Disallowances and Charges

There was no audit suspensions, disallowances and charges issued and settled
for CY 2021.

H. Implementation of Prior Year’s Audit Recommendations

Of the 66 audit recommendations contained in the CYs 2018, 2019 and 2020
Annual Audit Report (AAR) on HLURB/HSAC, 50 were implemented and 16 were
not implemented.

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