EXECUTIVE SUMMARY

Carlos Hilado Memorial State College with its three (3) extension campuses commits to
the advancement of knowledge and skills in teacher education, technology, informatics,
accountancy, fishery, engineering and other disciplines that may emerge in the future.

The College is governed by the Board of Trustees. It is headed by Dr. Benny A. Palma,
as Acting President. He is assisted by the following Vice-Presidents:

Vice-President for Academic Affairs - Dr. Orlando Benales

Vice-President for Administration - Dr. Salvador B. Zaragoza (until Aug. 2011)
Dr. Eduardo G. Sayson (starting Sept. 2011)
Vice-President for Research
and Extension - Dr. Renato B. Salmingo

The College has a manpower complement of 503 composed of 224 faculty members and
284 general administration and auxiliary services personnel distributed among the campuses, as
follows:

Talisay Alijis Fortune Binalbagan Total

Towne
Faculty 112 37 21 54 224
Admin 48 8 9 21 86
Part-time 52 15 34 18 119
Contractual 53 10 7 4 74
Casual - - - - -
Pre-school - - - - -
Total 265 70 71 97 503

The members of the faculty are composed of 13% teachers holding doctorate degrees,
30% with masters degrees and 57% has bachelor’s degrees.

Financial Highlights

The College’s assets, liabilities and government equity as of December 31, 2011 were
P330,719,672.08, P32,757,207.85 and P297,962,464.23, respectively, which correspondingly
increased by 8.34% or P25,507,963.99, .86% or P282,497.25 and 9.25% or P25,225,466.74 from
last year’s balances of P305,211,708.09, P32,474,710.60 and P272,736,997.49.

For Calendar Year 2011, the College generated a total income of P242,524,042.69,
broken down as follows:

Subsidy Income from National Government - P 136,711,104.31

 Less: Reversion of Unused NCA - 5,858,865.86

Net Subsidy Income - P 130,852,238.45

Add: Service Income - 111,671,804.24
Total Income - P 242,524,042.69
============

Total expenses incurred during the year amounted to P210,781,036.80, of which

P152,351,968.26 was spent for Personal Services and P58,429,068.54 for Maintenance and
Other Operating Expenses, with an excess of income over expenses of P31,743,005.89. This
year’s allotment of P99,162,000.00 was P4,026,000.00 or 4.23% higher than last year’s
allotment of P95,136,000.00.

Operational Highlights

Notable among the accomplishments of the Carlos Hilado Memorial State College for the
year are the following:

1. The Licensure Examination for Teachers (LET) results showed 84 BEEd passers with a
passing percentage of 56.38%; 49 BSEd passers with a passing percentage of 37.40% for
Talisay campus and 5 BEEd passers with a passing percentage of 50%; 8 BSEd passers
with a 25.53% passing rate for Binalbagan campus.

2. The Civil Engineering Licensure examination results showed 100% passing percentage in
May and 10 BSCE passers with a passing percentage of 76.92% in November. The
national passing percentage is 34.3%.

3. The Bachelor of Science in Accountancy obtained a passing percentage of 83.33% or 5

passers out of 6 takers and 38.89% or 7 passers out of 18 takers in the May and October
2011 Accountancy Board Examinations, respectively.

4. The Bachelor of Science in Criminology obtained a passing percentage of 79.17% or 19

passers out of 24 takers in the Criminology Board Examinations.

5. The Bachelor of Science in Fisheries obtained a passing percentage of 37.5% or 3 passers

out of 8 takers in the Fisheries Board Examinations.

6. A total of 28 faculty are under scholarship programs.

7. 79 trainings were attended by the College faculty.

8. CHMSC had 22 completed and 10 ongoing researches for the year.

9. 5 researches were published in the national and international levels and 5 won awards in
the 2nd International Conference on Multidisciplinary Research.
 10. Community development activities of the different units were initiated and sustained by
the Extension and Community Services Unit. Technologies were packaged and
disseminated.

11. The College has 63 Income Generating Projects (IGP’s) with a gross of P1,561,459.50 to
support Instruction, Research and Extension Programs.

12. A partnership was forged with Korea International Cooperation Agency (KOICA) which
paved the way for the upgrading of the Automotive Program of the College. KOICA
donated a fully-upgraded lecture room and a previously-owned Starex van for instruction.

Scope of Audit

A comprehensive audit was conducted on the accounts and operations of Carlos A.

Hilado Memorial State College for the Calendar Year 2011. The audit was aimed to ascertain
whether financial transactions were carried out in accordance with existing laws, rules and
regulations.

The audit procedures and techniques applied included the verification and analysis of
accounts, inspection, interviews with the school officials and faculty and other procedures
necessary to afford a reasonable basis for our findings and observations.

A Value-for-Money audit was also conducted to ensure the economy, efficiency and
effectiveness in the carrying out of the agency’s programs/projects, activities and/or management
of its resources.

Auditor’s Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the accompanying financial statements of

the school due to its failure to conduct physical inventory of its Property, Plant and Equipment
amounting to P246,289,263.93 and, the Due from Officers and Employees amounting to
P4,344,057.40 which could not be ascertained as of December 31, 2011.

Significant Findings and Recommendations

1. The agency failed to conduct physical inventory of its property, plant and equipment for CY
2011 amounting to P246,289,263.93 contrary to the provision of Section 490 of the
Government Accounting and Auditing Manual (GAAM), Volume 1 thereby, rendering the
account doubtful.

We recommend that a yearly physical count of its properties be conducted. The Inventory
Report should contain the actual status of the assets whether it is unserviceable, scrap or
already junk so that proper adjustments in the books can be made. Properties with no
available historical records should be appraised/revalued by an Appraisal Committee created
by the head of the agency.
2. Unliquidated Cash Advances has further increased to P4,344,057.40 as of December 31,
2011 due to non-liquidation within the prescribed period and additional cash advances were
granted even though the previous ones were not yet liquidated, contrary to Section 89 of
Presidential Decree No. 1445, thereby misstating the assets and government equity accounts.

We recommend that the Agency should refrain from granting cash advances to officers and
employees with outstanding cash advances to prevent the accumulation of the same. Adhere
strictly to the policy that no additional cash advances shall be granted to officials and
employees with unliquidated cash advances.

We further recommend the withholding of salaries of personnel who failed to settle their cash
advances within the prescribed period until such time that the amount is fully settled as
provided under COA Circular No. 97-002 dated February 10, 1997.

3. Procured furniture, fixtures and equipment amounting to P2,680,159.62 were not issued
Acknowledgment Receipt for Equipment to the respective official/personnel is contrary to
Section 492 of GAAM, Volume 1 thus, responsibility for care and safekeeping thereof were
not lodged to the end-users. Further, accountability for the equipment in case of loss, could
be hardly established.

We recommend that the school issue the necessary Acknowledgment Receipt for Equipment
(ARE) of properties issued to its officials/personnel in order to establish accountability and
control in its proper use and care. Henceforth, all issuances of properties shall be covered by
ARE in compliance with Section 492 of GAAM, Volume 1.

4. Payment of Representation and Transportation Allowance (RATA) to personnel/officials

amounting to P904,000.00 were not in accordance with the provision of R.A. No. 10147
(GAA, FY 2011), National Budget Circular No. 404 dated March 29, 1989 and R.A. No.
8292 (Modernization of Higher Education Act).

We recommend that management

a. Comply strictly with the provisions of NBC Circular No. 404 to ensure that only
authorized officials are allowed payment of RATA.

b. Stop the payment of RATA pending justification and submission of legal basis.

5. Procurement of 520 pieces of Steel Armchair aggregating P416,000.00 is questionable

because the contract was not awarded to the lowest complying bidder thus, defeating the
purpose of competitive public bidding mandated by R.A. 9184.

We recommend that the agency adhere strictly to the provisions of R.A. 9184 in the awarding
of contracts to the lowest calculated responsive bidder which is the most advantageous to the
government.
 We recommend further that the BAC submit a written explanation why the contract was
awarded to the Industrial Power Control System, Incorporated when Hardy Marketing
Enterprises offered the lowest bid.

6. Overtime claims amounting to P232,543.25 were not deducted of withholding taxes in

violation Section 79 of the National Internal Revenue Code thereby depriving the
government of much needed revenue to finance its obligations.

We recommend that the Accountant adhere strictly to the provisions of the National Internal
Revenue Code to withhold the corresponding taxes from overtime pay of officials/personnel
in accordance with the BIR rules and regulations.

7. The Chairman, Members and Secretary of the Board of Trustees continues to claim per
diem/honoraria per board meeting at the rate in excess of what is allowed under National
Budget Circular No. 2007-510 which resulted to over payments amounting to P 57,250.00.

We recommend that management shall require the members of the Board of Trustees to
refund the amount in excess of the prescribed rate. Furthermore, discontinue the payment of
honoraria that is more than what is allowed by our rules and regulations.

8. The submission of year-end financial reports was not timely resulting in the delay in the
review of financial statements of the agency contrary to COA Circular No. 92-89E dated
March 4, 1992.

We recommend that the Accountant adhere strictly to the provision of COA Circular No. 92-
89E in order not to hamper the review of accounts of the agency and effect the timely
submission of the Annual Audit Report.

Likewise, we recommend that additional employees be augmented in the Accounting

department to ensure compliance of all reportorial requirements.

9. The practice of the Accountant of not attaching Journal Entry Voucher (JEV) in financial
transactions hindered post audit work especially in determining the veracity of accounting
entries contrary to the provision of Section 112 of Presidential Decree 1445.

We recommend that the Accountant submit the CY 2011 Journal Entry Vouchers (JEVs) and
henceforth include it as supporting document of financial transactions in order to determine
the accuracy of the accounting entries.

Status of Implementation by the Auditee of Prior Year’s Audit Recommendations

Of the seven (7) recommendations embodied in the 2010 Annual Audit Reports, one (1) were
implemented, three (3) were partially implemented and three (3) were not implemented.