Auditors call out Phividec over inventory report failure

By LITO RULONA
Correspondent .

STATE auditors have called out the Phividec Industrial Authority in Misamis Oriental over its failure to submit an inventory report on its land investment properties amounting to P1.1 billion.

The Commission on Audit (COA) stated in a 2017 report that the validity of the investment properties, including the one used by the Phividec administration, is doubtful because the Authority failed to conduct and submit Phividec’s current land inventory report.

Celso Vocal, COA regional director, called the attention of Phividec chairman Jesus Guevara II, and administrator and chief executive officer Franklin Quijano in a letter about the auditors’ findings.

Vocal said the audit was conducted to ascertain the degree of reliance that may be placed on the Phividec management’s assertion on its financial statements, to recommend improvement opportunities, and determine if previous recommendations were followed.

Other COA observations:

• various asset and liability accounts recorded were not properly monitored, and journal entries were not properly set up, resulting in negative balances amounting to P4.4 million “contrary to sound system of internal control, thereby affecting the reliability of the financial statements”;
• property, plant and equipment amounting to P.3 billion as of Dec. 31, 2017 could not be ascertained due to the absence of inventory report and reconciliation with the records maintained by the Authority’s accounting division, contrary to Section 58 of PD 1445, and Section IV-V of COA Circular 80-124 dated Jan. 18, 1980;
• liability accounts with an aggregate amount of P8.4 million which have remained outstanding for two years or over have not been reverted to the unappropriated surplus of Phividec’s general fund contrary to RA 3526, casting doubt on the existence, validity and legality of the accounts; and
• other receivables – due from separated employees amounting to P4.2 billion as of Dec. 31, 2017, of which 93 percent are still for verification by the accounting division, remain outstanding for over 17 years resulting in the doubtful validity of the claims, and overstating the asset account of the Authority.