PART II - OBSERVATIONS AND RECOMMENDATIONS

FINANCIAL AND COMPLIANCE

Unliquidated Advances to Officers and Employees – P1,990,054.17

1. Advances to Officers and Employees stated at P1,990,054.17 remained unliquidated due to the practice of granting additional cash advances despite non-liquidation of previous cash advances and non-submission of liquidation reports by accountable officers.

Section 89 of PD 1445 states that “No Cash Advance shall be given unless for a legally authorized specific purpose. A cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served. No additional cash advance shall be allowed to any official or employee unless the previous cash advance given to him is first settled or a proper accounting thereof is made”. (Emphasis added)

Section 5 of COA Circular No. 97-002, dated February 10, 1997, states that the accountable officer (AO) shall liquidate his cash advance as follows:

a) Official travel within sixty (60) days after return to the Philippines in the case of foreign travel;

b) Within thirty (30) days after return to his permanent official station in the case of local travel; and,

c) Petty Operating Expenses and Field Operating Expenses – within twenty (20) days after the end of the year; subject to replenishment as frequently as necessary during the year.

As of December 31, 2012, the Information and Communications and Technology Office (ICTO) has unliquidated advances to officers and employees amounting to P1,990,054.17. Aging of this account is summarized below and presented in detail in Annex 1.

Particulars Amount

90 days and below P1,128,420.00

Less than 1 year 453,094.74

Over 1 year 161,722.15

Over 3 years 246,817.28

Total P1,990,054.17

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The cash advances were granted to Regular and Special Disbursing Officers and officials and employees of the ICTO, National Computer Center (NCC) and Telecommunications Office (TELOF) to defray expenses for special projects, miscellaneous and operating expenses and local/foreign travels, as summarized below and shown in Annex 1a.

Particulars Office Amount

A. Special Projects and MOOE

1. ASEAN 13th Telecommunications Ministerial Meeting and 12th Telecom-munications Senior Official Meeting

ICTO, TELOF

1,000,000.00

2. Revolving fund for PMO NCC 99,922.153. eSkwela Project ICTO 77,448.334. ICT Industry Development Program ICTO 100,000.005. Other Operating Expenses 344,707.56

Sub-Total 1,622,078.04

B. Travels

1. Foreign 117,347.182. Local 250,628.95

Sub-Total 367,976.13

GRAND TOTAL 1,990,054.17

Further, we noted that cash advances amounting to P246,817.28 of seventeen AOs became dormant and remained unliquidated for more than three years. The reasons for non-liquidation were unknown but demand for liquidation was sent to these AOs.

The accumulation of unliquidated amount was due to the practice of granting additional cash advances despite the non-liquidation of previous ones and non-compliance with the prescribed period within which to liquidate the same. Shown below are the additional cash advances granted in CY 2012 without any liquidations.

AO/(Nature of Cash Advance) CA Granted Amount

Casambre, Louis Napoleon(Travel)

12/06/11 11,136.5505/02/12 21,789.75

Total P 32,926.30

Diaz, Cecile(Special Projects)

10/12/12 60,000.00 10/31/12 50,000.00 11/30/12 220,000.00

Total P330,000.00

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AO/(Nature of Cash Advance) CA Granted Amount

Galua Fe Marie(Travel and Special Projects)

05/25/12 260.00 06/06/12 155,341.5610/29/12 200,000.00 12/13/12 10,000.0012/20/12 35,000.0012/20/12 65,000.00

Total P465,601.56

Considering the length of time that has elapsed, the cash advances may have been expended, thus overstating the Advances to Officers and Employees and understating the related expenses accounts.

We recommended and Management agreed to:

a)Strictly adhere to COA Circular No. 97-002 dated February 10, 1997 on the grant, utilization and liquidation of cash advances;

b)Identify all accounts which are dormant; exhaust all possible remedies to have these liquidated; and, if all efforts proved futile, request for its write-off to the COA following the requirements and procedures embodied in COA Circular No. 97-001dated February 27, 1997; and,

c)Require all AOs to liquidate their cash advances on time, otherwise, impose administrative sanctions against them for unjustified failure to liquidate their cash advances within the prescribed period, in accordance with Section 89 of PD 1445, COA Circular No. 97-002 dated February 10, 1997 and Civil Service Commission Resolution No. 04-0676 dated June 17, 2004.

Delayed Submission of Bank Reconciliation Statement

2. The correctness of the balances of Cash - National Treasury, MDS and Cash in Bank - LCCA of P 53,919,343.88 and P 5,485,861.82, respectively, could not be ascertained due to delayed submission of BRS.

Section 74 of the same P.D. No. 1445 (Government Auditing Code of the Philippines) provides that at the close of each month, depositories shall report to the agency head, in such form as he may direct, the condition of the agency account standing on their books. The head of the agency shall see to it that reconciliation is made between the balance shown in the reports and the balance found in the books of the agency.

COA Circular 92-125A dated March 4, 1992 requires the preparation of the Bank Reconciliation Statement (BRS) by the Accountant for submission to the

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Auditor within 15 days after the end of each month. Periodic reconciliation of bank and book balances should be undertaken and reconciling items immediately corrected to ensure accuracy of cash balances appearing in the financial statements.

As of December 31, 2012, the total recorded balances of the Cash-in-Bank accounts is P59,405,205.70, which comprised of the MDS and LCCA trust accounts. Results of confirmation sent on January 23, 2013 revealed a difference of P97,686,439.86 between the book and bank balances as shown below:

Account Name

Bank Account No.

Balance as of December 31, 2012 Difference

Book Bank

Cash-NT, MDS (108)

2070-9017-17 53,919,343.88 150,772,095.16 96,852,751.282070-9017-25 -0- 260,270.59 260,270.59

Cash-LCCA (111)

0702-1052-85 252,496.84 252,496.84 0.000702-1052-93 5,233,364.98 5,806,782.97 573,417.99

TOTAL 59,405,205.70 157,091,645.56 97,686,439.86

We were unable to verify the accuracy of recorded book balances since the Accounting Division has not prepared the BRSs for these bank accounts regularly due to lack of personnel to do the job and delayed submission of bank statements by the bank.

Management submitted the BRSs for both the MDS and trust bank accounts covering the period March to December 2012 and April to December 2012 respectively, on March 13, 2013. Verification of the BRS for March 2012 to December 2012 disclosed that the bulk of the unreconciled balances consist of outstanding checks and unrecorded unreverted cash balances. Details of which are as follows :

Reconciling Item LBP Account No.

TOTALS 2070-9017-17 2070-9017-25 0702-1052-93

Outstanding Checks 57,950,245.24 573,417.99 58,523,663.23

Unrecorded unreverted Cash

38,902,506.04 260,270.59 -  39,162,776.63

Totals 96,852,751.28 260,270.59 573,417.99 97,686,439.86

The failure of the accounting Division to regularly prepare BRS is not in keeping with Section 74 of PD 1445 and rendered the existence and accuracy of the recorded Cash-in-Bank balances as of December 31, 2012 unreliable.

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We recommended and Management agreed to require the Accounting Unit to:

a) Prepare and submit the BRS as required in COA Circular No. 92-125A to ensure that all cash transactions are identified, documented and properly recorded in the books; and,

b) Enroll the agency’s depository accounts in the LBP’s website for the on-line generation and printing of B/Ss to facilitate reconciliation.

Undelivered items by the PS-DBM - P31,363,505.03

3. Advances to PS-DBM amounting to P31,363,505.03 for the procurement of various equipment and supplies remained undelivered due to laxity in monitoring deliveries per Agency Purchase Requests, thus causing delays in the implementation of ICTO programmed projects. A discrepancy of P782,609.23 was also noted between the balances per book and per PS-DBM records.

Section 53 of RA 9184 (Government Procurement Act) provides one of the cases wherein negotiated procurement may be resorted to and which states that “Purchases of goods from another agency of the Government, such as the PS-DBM, which is tasked with a centralized procurement of commonly used Goods for the government in accordance with Letters of Instruction No. 755 and Executive Order No. 359 dated June 2, 1989.

Analysis of the trial balance disclosed that of the total balance of the Due from NGAs account amounting to P211,314,256.96 as of December 31, 2012, approximately 14.84% or P31,363,505.03 pertains to advances made to the PS-DBM since CY 2007. Details are as follows:

NGAs Amount

43 State Universities and Colleges 170,238,504.10Komisyon ng Wikang Pilipino 55,200.00National Commission on Culture and Arts 1,552,032.83 Phil. Council for Health Research and Dev’t. 46,015.00Procurement Service - DBM 31,363,505.03UNESCO National Commission of the Phil Statistical Research and Training Center

172,500.004,800,000.00

Telecommunications Office-Central 1,500,000.00 Telecommunications Office-Region VII 1,586,500.00

Total P 211,314,25 6.96

The balance is the residue of the total advance payments made to the PS-DBM for the procurement of various supplies and equipment intended for ICT4BE and the operations of ICTO amounting to P378,470,144.45, details as shown in Annex 2. As of December 31, 2012, the PS-DBM has so far delivered supplies and

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equipment in the total amount of P347,106,639.42, leaving a balance of P31,363,505.03. Per verification of the postings made by Management as of November 31, 2012, the balance comprises the following:

Particulars Amount Percentage

Undelivered items for ICT4BE projects P31,347,292.33 99%Undelivered supplies and materials for ICTO

16,212.70 1%

Total P 31,363,505.03

Confirmation also disclosed a discrepancy of P782,609.23 between the balance per book and per PS-DBM records amounting to P31,887,036.53 and P31,104,427.30, respectively, as of March 31, 2012. As of December 31, 2012, Management has established unutilized deposits of P29,610,005.73 from the ICT4BE advance payments for further reconciliation with the PS-DBM.

Management mentioned that the discrepancy amounting to P782,609.23 were unrecorded delivery receipts from the PS-DBM not yet received by the ICTO. Our verification of the said discrepancy disclosed the following:

PARTICULARS AMOUNTUnrecorded Delivery Receipts not yet received by ICTO but already deducted by DBM-PS (Annex 2a)

P159,090.03

Delivery Receipts already received by ICTO butnot yet recorded (Annex 2b)

586,572.00

Unrecorded transfer to DBM PS for reconciliation (Annex 2a)

36,947.20

TOTAL P782,609.23

The laxity of Management in monitoring the deliveries of the PS-DBM per Agency Purchase Requests has contributed to delays in implementation of the ICT4BE project and other operational needs of the ICTO, to the disadvantage of the intended beneficiary schools and the non-attainment of the goals and objectives of the Agency as a whole.

We recommended and Management agreed to:

a) Require the Supply Accountable Officer to coordinate with the PS-DBM for the immediate delivery of the items enumerated in the approved Agency Purchase Requests so as not to hamper the completion of the projects, otherwise, cause the refund of the amount to the ICTO; and,

b) Require the Accounting Unit to religiously and periodically reconcile the its account with the PS-DBM and make appropriate adjustment, if there is any.

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Unliquidated fund transfers - P170,238,504.10

4. Fund transfers to 45 SUCs amounting to P170,238,504.10 remained unliquidated as of December 31, 2012 due to non-adherence to COA Circular No. 94-013, thus rendering the balance of Due from NGAs- SUCs unreliable.

Section 5.4 of COA Circular 94-013, dated December 13, 1994, states that the Source Agency (SA) shall require Implementing Agency (IA) to submit the reports and furnish the IA with a copy of the journal voucher taking up the expenditures. Upon receipt of the copy of the Certificate of Settlement and Balances (CSB) and the Credit Notice (CN), issued by the IA Auditor, the Accountant shall draw a journal voucher restoring back the amount previously credited for any disallowance. He shall furnish the IA with a copy of the JV.

Section 6.4 also requires that within five days after the end of each month,

the AO of the IA shall prepare and submit the Report of Checks Issued (RCI) and the Report of Disbursements (RD) duly approved by the head of the agency with all supporting vouchers/payrolls and documents to the Accountant.

As of December 31, 2012, the recorded balance of the Due from NGAs-

State Universities and Colleges (SUCs) totaled P170,238,504.10 (Annex 3). This represents funds transferred to 45 SUCs, identified as beneficiaries, for the implementation of ICT4BE projects. The amounts transferred will be utilized to defray expenses for the following, as stipulated in the MOA:

a) Conduct of social preparation activities;b) Hardware and internet deployment;c) Trainings of Trainers;d) Computer maintenance;e) Troubleshooting and recycling project; and,f) Other expenditures related to the implementation of the program.

For CY 2012, the beneficiary SUCs liquidated a total of P29,274,319.05 for funds transferred from CY 2006 to CY 2011 and made additional fund transfers amounting to P11,210,707.50 to cover the provision of internet connections and project closeout. However, liquidation of the fund transfers remained to be desired since percentage of liquidations stood at 17.20% only, hence, the outstanding amount of P170,238,504.10 as of December 31, 2012. This is due to lax compliance with COA Circular No. 94-013 dated December 13, 1994.

Considering the length of time that has elapsed, the said fund transfers could have been expended and the appropriate account recorded thus, overstating the Due from NGAs- SUCs while understating the related expenses accounts.

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We recommended and Management agreed to:

a) Require the Finance Head, Project Manager and the Project Directors of the ICTO to institute remedies to cause and facilitate liquidation of the balances; and,

b) Require the IAs to strictly comply with COA Circular No. 94-013 dated December 13, 1994, and refund the unexpended balance, if any.

Lack of formal Monitoring System

5. There was inadequate system to facilitate monitoring and evaluation of projects’ accomplishments costing P1,762,006,143.00 and with total recorded expenditure of P1,050,151,006.67 as of December 31, 2012, particularly for projects which were started way back three to six years, which were not yet completed and has a low percentage of completion and/or accomplishment not known.

The agency does not have clear-cut policies on reporting, monitoring and evaluation of projects. The basic elements or component of a Management Information System include the following:

Policies - which seeks to guide management in the efficient

implementation of its operations;

Reporting - considered as an integral part of the government’s accountability framework. Reporting is the final phase of any activity and the resultant reports are considered to be the windows of accomplishments. For this reason, performance reports to be useful must be credible;

Feedback and monitoring - the systematic collection and analysis of information as a project progresses. Its primary aim is to improve the efficiency and effectiveness of project implementation. It looks on targets set and activities planned during the planning phases of work and helps keep work on track and an invaluable tool for management in evaluation.

As of December 31, 2012, the ICTO has on its list a total of nine projects with a total project cost of P1,762,006,143.00 and with total recorded expenditure of P1,050,151006.67as follows:

PROJECT NAMETOTAL

PROJECTFUND

TOTALEXPENDITURE

1. e-Skwela (ICT4BE) P88,611,500.00 P86,686,212.002. i-Schools (ICT4BE) 1,104,106,600.00 522,195,862.003. iGov-Phil 164,582,397.00 61,980,024.72

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PROJECT NAMETOTAL

PROJECTFUND

TOTALEXPENDITURE

4. Implementing the Phil. Com eCenter (PHILCEC)

121,701,446.00 129,382,671.77

5. eLGU Projects 144,567,200.00 119,967,210.006. Contact Center ng Bayan 54,686,000.00 54,686,000.007. Update to GISP 13,751,000.00 11,851,000.008. E3 Pilot Project 40,000,000.00 39,908,364.009. Phil. Cyberspace Security

Coordination Project30,000,000.00 23,493,662.18

TOTAL P1,762,006,143.00 P 1,050,151,006.67

On August 23, 2012, we issued an audit query on the overall ICT Plan, monitoring, reporting and evaluation of the ICTO with the following objectives:

a) Determine whether an Overall ICT Plan was prepared by ICTO to support the achievement of the organization’s overall missions and goals;

b) Determine whether monitoring and evaluation of the project were undertaken and whether reports were prepared and submitted as required in the Project MOA and/or ICTO guidelines;

c) Determine whether projects activities were undertaken on schedule and according to work plan;

d) Determine whether the level of project accomplishments is parallel with the project expenditures;

e) Compare whether actual project impacts against the agreed strategic plans are met; and

f) Determine whether the resources allotted for the project are available, sufficient and are being well used.

Management was not able to submit status of projects as well as policies on reporting, monitoring and evaluation of projects and other related documents to facilitate the review and evaluation of the completed and ongoing projects of the Agency. Instead, it submitted a collated report, which enumerates: (i) Endorsement date of the Project; (ii) Name of Project Director; (iii) Name of Project Manager; (iv) Project Timeframe; (v) Total Project Fund; (vi) Total Expenditure to date; (vii) Project Status report; (viii) Project Description; and (ix) Project Accomplishments.

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Review of the report disclosed a number of data deficiencies as follows:

a) no uniform data on: (i) Percentage/status of accomplishment (Physical and Financial); (ii) Details of approved budget; (iii) Targets and Expected outputs; (iv) Deliverables vis a vis accomplishment;

b) no details of expenditure per approved budget to monitor over expenditures on certain line budget; and,

c) No data was available on the reasons or resolutions why a certain project was delayed or under implemented

Accomplishment reports are used for monitoring and evaluating performance against targets and for planning and decision-making purposes. For reports to be useful, these must not only be credible but should also be available at the time they are most needed. The timeliness of the report is, likewise, defined by the agency’s established deadlines for submission.

The usefulness of the Project’s accomplishment data for decision-making ultimately depends on the degree of confidence the users can have on the data. For reports to be of use then, the agencies should produce performance data that are accurate and valid.

Further, we noted that no reporting standards or criteria were set for the Project Management Office to accomplish and which will be used in monitoring and evaluation of project’s efficiency and effectiveness, since there were no clear-cut policies established or circularized to guide concerned officials in the performance of their duties and to ensure efficient implementation of ICT projects.

The absence of a clear-cut policy on the reporting, monitoring and evaluation of projects brought about the following:

a) Project documents were not submitted on time for review and evaluation;

b) Data on percentage of accomplishment vis a vis project target outputs for various projects undertaken were not known;

c) Projects with total costs of P138,437,000.00 and with total recorded expenditures of P129,939,026.18 started way back three to six years were not yet completed or percentage of completion not known, the details shown in Annex 4; and,

d) Reports of Disbursements for each project were not readily available for audit purposes

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Without a feedback and monitoring system in place, the above-listed projects will not be properly evaluated and monitored as to whether the projects were implemented in accordance with approved budget, terms and conditions, project milestones and performance expectations.

Considering the fast-paced change of technology and the delays in the implementation of needed technology, these information technology projects may become obsolete, before these are completed, to the disadvantage of the government.

We recommended and Management agreed to:

a) Formulate and implement a written policy to effectively monitor timely submission of reports, identify causes of delay in the submission and establish treatment plans to address this concern; and a well defined and clear policies and procedures on reporting, prescribing, among others, the following:

reportorial requirements, such as the type and formats of reports to be prepared;

information to be included; person/office responsible for reporting; intended use and users of the report; frequency and deadline for submission; and, relevant performance indicators to be used that are

descriptive of the project’s accomplishments should be present.

b) Adopt and establish a feedback and monitoring system to ensure that the projects are implemented in accordance with the approved budget, terms and conditions, project milestones, performance expectations and maximization of desired benefits; and,

c) Submit to the auditor the following documents for review and audit purposes:

Approved Project Document and its annexes; Detailed report of disbursements for the expenditures

incurred for each project; and, Percentage of accomplishment vis a vis approved target

Gender and Development (GAD)

6. The ICTO was able to implement only three of five activities embodied in the GAD Plan and Budget of P395,000.00 for CY 2012, which was also 69% below the allowable budget for gender-responsive programs and projects as provided in RA 10155 (GAA for Fiscal Year 2012). Moreover, accomplishment reports

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were not submitted to the PCW and DBM contrary to EO 273 and NEDA/DBM/ NCRFW Joint Circular No. 2004-1.

Section 28 of the General Provisions of the GAA for FY 2012 requires all agencies of the government to formulate a Gender and Development (GAD) Plan designed to address gender issues within their concerned sectors or mandate and implement applicable provisions under RA 9710 or the Magna Carta of Women, Convention on the Elimination of All Forms of Discrimination Against Women, the Beijing Platform for Action, the Millennium Development Goals (2005-2015), the Philippine Plan for Gender-Responsive Development (1995-2005), and the Philippine Development Plan (2011-2016).

Projects/activities geared towards poverty alleviation, economic empowerment especially of marginalized women, protection, promotion and fulfillment of women's human rights, and practice of gender-responsive governance are considered sufficient compliance with said requirement. Utilization of the GAD budget shall be evaluated based on the GAD performance indicators identified by said agencies.

The ICTO provided a total amount of P395,000.00 for its FY 2012 GAD Annual Plan and Budget, which represents only 1.55%, instead of at least 5% or P1,273,250.00 of its FY 2012 appropriations of P25,465,000.00. Presented below are the plans and programs and the corresponding Accomplishments for CY 2012:

Program/ Activity/Project

ObjectivesPlans and Programs Accomplishments

Activity Cost Activity CostProvision of technical assistance in the formulation and implementation of ICT related policies, programs projects, plan and activities

Strengthen a mechanism to oversee GAD mainstreaming efforts

Creation of ICTO GAD Team

P50,000.00 Participation in the ICTO GAD Committee Planning

-

Strengthen ICTO CAD Committee via further equip-ping & exposure

Active participation in Woman’s Month Celebration

35,000.00 Participation in the month long Woman’s Month Celebration

23,221.90

Continue to increase aware-ness and understanding of GAD concepts among ICTO officials and employees

Conduct of GST and GRP for the ICTO GAD Committee

60,000.00 Conduct of Gender Sensitivity Training

19,967.00

Conduct of GST for the Officials and Employees of ICTO

250,000.00 - -

Totals P395,000.00 P43,188.90

As shown in the above table, out of the total budget allotted for GAD, the ICTO expended only P43,188.90 due to non-implementation of the Conduct of GST

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for the Officials and Employees of ICTO and partial implementation of the Conduct of Gender Sensitivity Training (GST and Gender Responsive Planning (GRP) for the ICTO GAD Committee, due to the on-going rationalization plan of the agency, thereby limiting the benefits that could have been derived by the employees to uplift gender issues.

We also noted that the GAD accomplishment report was not submitted to the PCW and DBM for information and reference.

We reiterate our prior year’s audit recommendation and Management assured to submit the annual GAD plans and budgets and GAD accomplishment report, duly approved by the agency head, to the PCW and DBM. Likewise, ensure adequate allocation of funds for programs and activities that will uplift the gender issues of ICTO employees as well as implementation of the planned programs and activities.

Seniors Citizen’s and Differently-Abled

7. Plans, programs and projects concerning senior citizens and the differently- abled were not included in the programmed activities of the agency, which run counter to Section 29 of the General Provisions of the FY 2012 GAA.

Sec. 29. Programs and Projects Related to Senior Citizens and Differently-Abled requires that All agencies of the government shall formulate plans, programs and projects intended to address the concerns of senior citizens and differently-abled person, and integrate the same in their regular activities, which shall be at least one percent (1%) of their budget.

Moreover, all government facilities, including infrastructure, non-infrastructure and civil works projects of the government, as well as office buildings, streets and highways, shall provide architectural facilities or structural features and designs that shall reasonably enhance the mobility, safety and welfare of differently-abled persons pursuant to B.P. Blg. 344 and R.A. No. 7277.

Management did not submit a copy of approved Senior Citizens and Differently Abled persons plans for CY 2012, hence we concluded that there were no plans, budget and activities prepared to address issues concerning the elderly and the differently-abled during the year.

The non inclusion of projects in the programmed activities of the agency concerning senior citizens and the differently- abled defeats the purpose for which the law was envisioned.

We reiterate our prior year’s audit recommendation Management assured to include in their plans at least one per cent of the budget for projects

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and activities that will help address the concerns of the senior citizens and the differently-abled.

Audit Suspensions/Disallowances/Charges

8. Suspensions of P204,926,382.86 remained unsettled at year end contrary to Section 9.4 of the 2009 Rules and Regulations on Settlement of Accounts.

The 2009 Rules and Regulations on the Settlement of Accounts (RRSA) requires that a suspension should be settled within 90 calendar days from receipt of the Notice of Suspension (NS); otherwise the transaction covered by it shall be disallowed/charged after the Auditor shall have satisfied himself that such action is appropriate. Consequently, the Auditor shall issue the corresponding Notices of Disallowance (ND). The disallowance shall be settled within six months from receipt of the ND by the persons liable.

The unsettled balance of NSs at year-end amounted to P204,926,382.86 while ND disclosed zero balances. However, the said NSs were issued a Notice of Settlement of Suspensions, Disallowances and Charges in the first month of CY 2013 except that the documents relating to the TRC amounting to P203,354,382.86 is still under review by this Office and awaiting the results of confirmation made with the resident auditor of TRC before this will be issued a Notice of Settlement of Suspension, Disallowances and Charges . Details are as follows:

NS No. Date Payee AmountDate

SettledDate

Lifted

09-001-101(09) 12/23/09 Antonette Torres P 1,500.00 02/11/13 2/11/2013

12-01-101 08/17/12 Dr. Luis Sison 77,189.56 10/01/12 1/30/2013

12-02-101 09/07/12 Fe Marie Galua 250,000.00 12/17/12 1/30/2013

12-03-101 09/12/12 Hotel Phil. Plaza Holdings

1,059,375.00 12/17/12 1/30/2013

12-04-101 10/03/12 Rubert James Exhibit Masters

183,498.30 12/17/12 1/30/2013

12-05-101 11/05/12 TRC 203,354,820.00 12/17/12

Total P204,926,382.86

Compliance with Tax Laws

During the year, the ICTO withheld taxes totaling P6,941,389.71 from the payments made to suppliers and for the salaries, wages and overtime pay of officials and employees, of which P5,642,957.76 was remitted to the BIR, which included balance of the preceding year. As of year-end, the remaining unremitted balance totaled P1,298,431.30, representing taxes withheld for the month of December 2012, which were remitted on January 10, 2013.

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We commend Management for withholding and remitting government taxes to the BIR in accordance with the National Internal Revenue Code and DOF-DBM-COA Joint Circular No. 1-2000 and Joint Circular No. 1-2000A, respectively.

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