EXECUTIVE SUMMARY

A. Introduction

The National Book Development Board (NBDB) was created through Republic Act
(RA) No. 8047, known as the Book Publishing Industry Development Act, which was
enacted on June 7, 1995.

It is mandated to formulate, adopt and implement a National Book Policy and

National Book Development Plan that will serve as the basis for fostering the progressive
growth and viability of the country’s book industry.

Its mission is to promote the continuing development of the book publishing

industry, with the active participation of the private sector, to ensure an adequate supply of
affordable, quality-produced books for both domestic and foreign markets.

The Board is governed by 12 members currently headed by Chairperson Dante

Francis Mariano Ang II. It has a permanent Secretariat under Executive Director Charisse
Aquino-Tugade, who is responsible for the day-to-day management and direction of the
affairs and operations of the NBDB. The Governing Board of NBDB is composed of the
following officials:

Name Position/Designation Mother Unit/Agency

Dante Francis M. Ang II Chairperson
Annalyn M. Sevilla Vice Chairperson
(January to September 2022)
Ariz Delson Acay D. Vice Chairperson
Cawilan (October to December 2022)
Ronald L. Adamat Member
Arsenio De Jesus Lizaso Member
(January to September 2022)
Rene R. Escalante Member
(October to December 2022)
Josette T. Biyo Member
Ceferino S. Rodolfo Member
Mary Ann A. Ordinario Member
Teresita Q. Adriano Member
Yvonne F. De Mesa Member
Private Sector, Ex-officio
Undersecretary of Department of
Education (DepEd), Ex-officio
Director IV, Bureau of Learning
Resources under the DepEd, Ex-
officio
Commissioner of Commission on
Higher Education (CHED), Ex-
officio
Chairperson of National
Commission for Culture and the
Arts (NCCA), Ex-officio
Chairperson of NCCA, Ex-officio
Director of Department of Science
and Technology (DoST), Ex-
officio
Under Secretary of Department of
Trade and Industry (DTI), Ex-
officio
Private Sector, Ex-officio
Private Sector, Ex-officio
Private Sector, Ex-officio

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 Name Position/Designation Mother Unit/Agency
Maureen Alexandra Ramos Member Private Sector, Ex-officio
Padilla

As of December 31, 2022, the NBDB had a total personnel complement of 74, of
which 47 have permanent status, four are temporary, one Presidential Appointee, two co-
terminus and 20 Job Orders.

B. Operational Highlights

The reported major accomplishments of the NBDB for Calendar Year (CY) 2022
against its set targets are shown below:

Actual
PPAs Targets Accomplish- Variance Remarks
ments
Local Book Publishing Industry Development Program
Outcome Indicators
1. Percentage increase in 5 663 658 The target increase in
the number of (1,659) (3,478) number of manuscripts
manuscripts/titles by was already
NBDB-registered accomplished in the first
authors quarter (Q1).
2. Percentage increase in 2 71 69 The target increase in
the number of titles (4,039) number of titles
published by NBDB- published was already
registered accomplished in the
authors/publishers third quarter (Q3).
3. Percentage increase in 5 531 526 The target increase in
the gross revenue of (P4.98B) gross revenue was
NBDB-registered already accomplished in
publishers the third quarter (Q3).
Output Indicators
1. Number of capacity- 34 164 130 Q1: Conducted seven
building and trade capacity building and
promotion initiatives trade promotion
undertaken initiatives;
Q2: Conducted 32
capacity building and
trade promotions
initiatives;
Q3: Conducted 69
capacity building and
trade promotion
activities;
Q4: Conducted 56
capacity building and
trade promotions
initiatives.

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 Actual
PPAs Targets Accomplish- Variance Remarks
ments
2. Number of awards, 29 162 133 Q1: 12 awards, grants
grants and incentives and incentives given;
given Q2: Five awards, grants
and incentives given;
Q3: 82 awards, grants
and incentives given;
Q4: 63 grants and
incentives given.
3. Number of policies 7 41 34 Q1: 11 consultation
developed, researches meetings conducted for
conducted, the development
information systems policies;
developed and/or Q2: seven consultation
managed, and meetings conducted for
information the development
campaigns conducted policies;
Q3: six consultation
meetings conducted for
the development
policies;
Q4: 17 consultation
meetings conducted for
the development
policies;

C. Financial Highlights

The NBDB has total adjusted appropriations of P123,246,265.85 consisting of

P121,205,793.00 current appropriations under RA No. 11639, the General Appropriations
Act (GAA) for Fiscal Year (FY) 2022 and P2,040,472.85 continuing appropriations. Out
of the total adjusted appropriations, P123,176,265.85 of allotments was received, of which
P119,798,187.64 was obligated, thereby leaving an unobligated balance of P3,378,078.21,
shown as follows:

Obligations Unobligated
Appropriations Allotments
Particulars Incurred Balance
(In PhP)
A. Current Appropriations
1. Agency-Specific Budget
Personnel Services 27,443,461.53 27,443,461.53 27,443,461.24 0.29
(PS)
Maintenance and 73,289,538.47 73,289,538.47 72,668,333.15 621,205.32
Other Operating
Expenses (MOOE)
Capital Outlays (CO) 4,585,000.00 4,585,000.00 2,032,370.00 2,552,630.00
Subtotal 105,318,000.00 105,318,000.00 102,144,164.39 3,173,835.61

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 Obligations Unobligated
Appropriations Allotments
Particulars Incurred Balance
(In PhP)
2. Automatic Appropriations
Retirement and Life
Insurance Premium
PS 3,330,882.00 3,330,882.00 3,327,965.19 2,916.81
3. Special Purpose Funds
Miscellaneous
Personnel Benefits
Fund
PS 11,524,490.00 11,524,490.00 11,524,490.00 0.00
Pension and Gratuity
Fund
PS 1,032,421.00 1,032,421.00 1,015,168.95 17,252.05
Subtotal 12,556,911.00 12,556,911.00 12,539,658.95 17,252.05
Total 121,205,793.00 121,205,793.00 118,011,788.53 3,194,004.47
B. Continuing Appropriations
Agency-Specific Budget
MOOE 919,372.85 919,372.85 894,899.11 24,473.74
CO 1,121,100.00 1,051,100.00 891,500.00 159,600.00
Total 2,040,472.85 1,970,472.85 1,786,399.11 184,073.74
Grand Total 123,246,265.85 123,176,265.85 119,798,187.64 3,378,078.21

The NBDB’s financial position and financial performance for CY 2022 with
corresponding figures for CY 2021 are presented below:

Particulars 2022 2021

Financial Position
Assets 162,380,939.88 150,980,804.88
Liabilities 8,947,122.65 524,163.56
Net Asset/Equity 153,433,817.23 150,456,641.32
Financial Performance
Revenue 4,628,691.53 4,880,140.35
Less: Current Operating Expenses
PS 41,880,285.72 32,336,880.11
MOOE 50,930,576.01 44,354,048.88
Non-Cash Expenses 665,162.74 560,865.78
Total Expenses 93,476,024.47 77,251,794.77
Surplus (Deficit) from Current Operating (88,847,332.94) (72,371,654.42)
Expenses
Other Non-Operating Income 9,500.00 51,717.26
Surplus (Deficit) (88,837,832.94) (72,319,937.16)
Net Financial Assistance/Subsidy 104,524,686.98 82,821,090.58
Net Surplus (Deficit) for the period 15,686,854.04 10,501,153.42

D. Scope and Objectives of the Audit

The audit covered the review of the accounts and operations of the NBDB for the
year ended December 31, 2022. The audit was conducted to: (a) ascertain the level of
assurance that may be placed on Management’s assertions on the financial statements (FS);

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(b) determine the extent of compliance with applicable laws, rules, and regulation; and
(c) determine the extent of implementations of prior years’ audit recommendations.

E. Independent Auditor’s Report on the Financial Statements

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

the FS of the NBDB for CY 2022.

F. Summary of Significant Audit Observations and Recommendations

Below are the significant audit observations with the corresponding

recommendations which are discussed in detail in Part II of this report.

1. Out of the P123,176,265.85 adjusted allotments received by the Agency in FY 2022,

P119,798,187.64 or 97.26 percent was obligated, leaving an unobligated balance of
P3,378,078.21, while of the total Notice of Cash Allocation (NCA) of
P119,158,546.00, P10,756,338.85 or 9.03 percent had lapsed due to the unimplemented
retrofitting project for its building and for the procurement of ICT Equipment.
(Observation No. 2)

We recommended and Management agreed to present a catch-up action plan on

the unimplemented programs to fully utilize the continuing allotments for the
succeeding year.

2. For four consecutive years or since CY 2019, no grants were awarded for the support
and promotion of Filipino authorship thereby failing to attain the purpose for which the
National Book Development Trust Fund (NBDTF) was established, resulting also in
unutilized accumulated income earned totaling P18,597,477.99. In addition, the
NBDB, as the Fund Administrator, still was not able to finalize the formulation of
policies and guidelines in the current year relative to the effective utilization of the
Fund. Moreover, a continuous decrease in interest income and an increase in unrealized
losses has been observed over the years in the maintenance of the subject fund with the
related Government Financial Institution. (Observation No. 3)

We reiterated our recommendations and the Management agreed, as the Fund

Administrator of the NBDTF, to :

a) create/revive relevant programs that will support and promote the Filipino
authorship to ensure the efficient and effective utilization of the interest
income earned from the Fund, so that the purpose for the establishment of
such Fund will be attained;

b) expedite the finalization of the updated guidelines for the effective

implementation of the Fund and its IRR and submit a final copy of the same
to the Audit Team; and

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 We also recommended and the Management agreed, for the sound and judicious
management of the Fund, to review the continuous decrease of interest income
and increase of unrealized losses incurred and look into the possibility of finding
a better government financial institution which can provide a higher return on
investment while the fund remains unutilized.

3. Lapses were noted in the maintenance of PPE accounts such as: a) PPE were not
properly tagged; b) non-maintenance of the Property Cards (PCs) and PPE Ledger
Cards (PPELCs); and c) non-disposal of unserviceable properties, contrary to pertinent
sections of the Government Accounting Manual (GAM) for National Government
Agencies (NGAS) Volumes I and III. (Observation No. 4)

We recommended and the Management agreed to:

a) improve the property identification tagging system by providing property

tags in all properties and equipment of the Agency and reflect completely
therein the required information as prescribed in Paragraph 5.7 of COA
Circular No. 2020-006;

b) require the Accountant and Property Officer to maintain and regularly

update the PPELCs and PCs for all PPE items, and accomplish the forms in
accordance with the GAM for NGAs;

c) instruct the Disposal and Appraisal Committee to undertake the immediate

disposal procedures of unserviceable properties to avoid possible loss due to
further deterioration of the said properties and to decongest the areas where
these are stored.

4. Submission of the required budgetary and financial reports to the Office of the
Auditor within the prescribed periods was not adhered to by NBDB contrary to
Sections 7.1.1 and 7.2.1 of COA Circular No. 2009-006, and various sections of
the GAM for NGAs Volume I; thus, precluded the conduct of timely audit,
evaluation, and determination of the regularity, validity, completeness, and
accuracy of the recorded transactions in CY 2022. (Observation No.5)

We recommended and the Management agreed to require the heads of the

Accounting and the Budget Offices to strictly comply with the timely
submission of the financial and budgetary reports in hard copies including its
supporting documents.

5. The purchase of 31 laptops ranging from P58,200.00 to P67,835.00 each for a total
of P1,912,992.00 in CY 2022, is not in keeping with various provisions of RA No.
9184 such as: a) modality of procurement does not fall in any of the conditions
where an emergency purchase can be resorted to; b) specification were made in
reference to brand names; c) non-submission of advance copies of the POs and
incomplete and improperly prepared supporting documents; and d) other

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 noted deficiencies. Moreover, the submission of supporting documents for all
procurement of ICT Equipment was not done by NBDB. (Observation No. 6)

We recommended and the Management agreed to:

a) resort to emergency purchase and generic specifications of items for

procurement following the conditions provided under Sections 53 and 18
of the Revised IRR of RA No. 9184, respectively;

b) check meticulously the completeness and accuracy of every document

being prepared/processed/submitted, as these documents are vital in the
Audit Team’s validation of the veracity and propriety of every transaction
being undertaken by the Agency; and

c) submit complete supporting documents in all agency procurement and

ensure its full adherence to the required details and forms as prescribed
by relevant guidelines;

6. The National Book Policy and National Book Development Plan that will promote
the viability and the progressive growth of the book publishing industry has not
been updated by NBDB to conform with the changing times. Further, no PPA
relative to the annual evaluation of the progress in the shift of functions from the
DepEd to the private sector on the textbook provision program was conducted
contrary to Section 10 of RA No. 8047 and Rule VII, Section 1(c) of the IRRs.
Meanwhile, absence of updated collaboration with the Commission on Higher
Education (CHED) on matters concerning books for higher learning was also
observed contrary to Executive Order (EO) No. 119. (Observation No. 7)

We recommended and the Management agreed to:

a) update and finalize the National Book Policy and National Book
Development Plan to ensure the development and viability of the book
publishing industry;

b) conduct monitoring and annual evaluation of the progress in the shift of

functions from the DepEd to the private sector on the textbook provision
program (publication and distribution); and

c) work closely with the CHED on matters related to books for higher
learning in accordance with EO No. 119 on the Adoption of National Book
Policy.

The foregoing audit observations and recommendations were communicated

through Audit Observation Memoranda and discussed with agency officials in an Exit
Conference held on May 8, 2023. Management comments were incorporated in this Annual
Audit Report (AAR), where appropriate.

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G. Status of Settlement of Suspensions, Disallowances and Charges

Audit disallowances totaling P92,400.00 remained unsettled as at the end of the

year.

H. Status of Implementation of Prior Years’ Audit Recommendations

Out of the 15 audit recommendations as at December 31, 2021, eight or 50 percent

were implemented. The other seven or 50 percent recommendations remained not
implemented, of which three were reiterated under Part II of this report, while four was not
implemented. The details of the implemented and not implemented recommendations are
presented hereunder.

Number of
Status of Implementation Percentage
Recommendations
Implemented 8 67
Not Implemented 4 33
Total 12 100

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