USG activities which incur expenses and generate revenues are now subjected to standard audit practices, given the reinstatement of the Commission on Audit this year.
After being brought to life this academic year, the Commission on Audit (COA) has started its audit of University Student Government finances, with five units set to be sanctioned immediately, according to the Office of the Ombudsman and the COA’s Vice Chair for Audit. As of press time, the offices concerned have already released statements clarifying their positions on their compliance with the audit requirements, particularly the Office of the Vice President for Internal Affairs and FAST 2012.
The units – the Office of the Vice President for Internal Affairs, BLAZE 2013, FAST 2011, 2012 and 2013 – have, according to the Commission on Audit, not responded to the Notices of Audit Disengagement sent to the respective treasurers in charge of the units’ finances. This non-compliance may eventually lead to the freezing of accounts or the impeachment of certain officers, based on the sanctions to be recommended by the Judiciary. As of press time, the notices of disengagement have been recognized by the units, but the COA is continuing to consolidate the reports with the actually documents submitted.
COA Vice Chair Jessamine Alvaro shares that the COA is having difficulty auditing financial statements given that the supporting documents submitted by units are lacking. “We can’t check all documents kasi kulang pa talaga siya [The documents are insufficient],” she attests.
When units that have not submitted their COA requirements fail to reply to the Letter of Demand within three days of its receipt, units will be immediately sent notices of audit disengagement, which if not replied to will be within one week will result in the COA’s issuing of a disclaimer of opinion and a corresponding recommendation for sanctioning by the Ombudsman.
In standard audit practice, a disclaimer of opinion is a statement by auditors that do not express an opinion on the financial position of, say, a public entity because said entity has not provided information broad enough in scope to enable auditors to form an opinion on their finances. The disclaimer of opinion, however, may permit the COA to provide recommendations to a sanctioning body such as the Judiciary for courses of action and further investigation.
USG Ombudsman Hanz Darryl Tiu says, “The freezing of their accounts will take effect immediately; as for the [case proceedings], it is still in my discretion. I believe that no one is above [compliance] even if you may be a Vice President or even the President, if a case is needed I will file it.”
The documents required by the Commission on Audit include the basic and necessary financial record of unit treasurers, such as journals and ledgers and any equivalent computerized track records of funds received, expenses made and financial records of activities organized as available. The unit’s income statement is included as a requirement for the financial records.
The photocopies of financial transactions and supporting documents such as receipts, vouchers and reports as collected by the Office of the Treasurer should also be available from the executive board office – it should have already been submitted by the unit concerned. The statement of government unit’s responsibility, or the form acknowledging the COA’s mandate and the unit’s responsibility to accomplish the audit requirements, must also be delivered to the COA.
According to Alvaro, some unit treasurers have difficulty complying with the requirements because the appointed officers responsible could not be reached, or have an authority that is non-replaceable by anybody else in the unit; case in point, a batch treasurer’s signature cannot be superseded by a higher appointed or elected officer, even the batch president, even when the individual mentioned provides an explicit letter of authorization.
When asked about the treasurers, Alvaro adds, “Yung iba hindi talaga sila nagreply.” Alvaro also clarifies that when the COA recommends the freezing of accounts, disclaimer of opinion is not the sole option – there is also the adverse opinion, which is when accounts do not match, or are inconsistent with records and reported amounts.
“Fishy yung amounts ng nirereport at yung transactions nila overspending. So that time talaga mag-ffreeze ang accounts nila. But then yung pangunahin naming kailangan is yung suporting documents, kasi according sa COA manual, dapat ang COA ang may responsibility to demand the documents whenever they need them. So basically yung role ng USG is to pass the documents in time, kasi yung documents yung evidence namin for proving na ganun na talaga yung ginagamit nila for their budget [When the amounts reported are fishy and their transactions indicate overspending, so that time is when we actually freeze accounts. But what we’re really looking for are the supporting documents, because according to the COA manual, we have the responsibility to demand the documents when we need them. Basically, the role of the USG is to pass the documents on time, because the documents are the evidence that help us prove that the expenses they made are in accordance to the projects proposed in their budget].”
Another difficulty Alvaro elaborates on is the excuse that the treasurers claim that the documents required are not yet given by SLIFE. “When we talked with OTREAS, some of the documents haven’t been released by SLIFE, so they are also having a hard time photocopying the documents. Pero, ang dami na rin units complete or clear pagdating sa requirements ng COA [Notwithstanding, most units have already complied with our requirements].”
Such difficulties in the processing of financial records is an issue which the Office of the Executive Treasurer (OTREAS) claims to have been trying to remedy and address. USG Executive Treasurer Kayne Litonjua notes, “There’s a sense of redundancy between COA and OTREAS in terms of auditing the accounts, since OTREAS already undergoes the initial checking of the documents. Basically, nagawa na namin yung gagawin nila [We have already performed their basic task]. However, COA serves as the unbiased checker of the accounts.”
In line with what Alvaro mentioned, Litonjua tells that the units must comply with whatever COA demands from them, as this is what was stated in the COA manual, and adds that the office is trying to reduce the workload for units so that the process of auditing is more streamlined in terms of submitting requirements, such as the photocopied records of financial transactions, and term-end income statements. These documents, which is expected to be in the possession of OTREAS, should be demanded by COA from OTREAS.
But even as OTREAS tries to streamline the document requirements from treasurers, the process of gathering information necessary for audit, such as the qualitative description and assessment of the activities of the unit, would make such a streamlining incomplete if not ineffective, and may make it more difficult to trace the accountability of unit officers, especially when a certain transaction is anomalous, with this transaction only being discovered when the COA begins the audit.
However, the units in violation, as of press time, are still able to access their funds. The violator with the largest standing fund is the Office of the Vice President for Internal Affairs (OVPIA). Historically, OVPIA requires its funds for the biggest annual fundraising activity of the University, the University Vision Mission Week; the freezing of OVPIA’s accounts as an exception to all other offices may paralyze the mobility of its operations over the course of the week. As of press time, the accounts are still accessible to the offices – they may still make deposits and withdraw cash advances.
The COA and the Ombudsman, however, remain adamant in pursuing the due process. Tiu shares, “This isn’t the first instance that a certain unit has failed to comply with what is required; there have been units that were already [given] a subpoena, but still did not comply. Now I see that these units have been abusing other units and not respecting the law.”
“If we want change or to have One USG, we must get rid of the inefficient people who can’t comply with [the accomplishment] of simple documents such as these, given the fact that the first letter was sent [as far back as] last year.” The notices for the disclaimer of opinion were released to the violating offices as early as the third week of January.
The LaSallian will be continuing this series with the testimonies of the non-compliant units in a future article.