Republic of the Philippines COMMISSION ON AUDIT Office of the Auditor Philippine Statistics Authority INDEPENDENT AUDITOR'S REPORT The National Statistician and Civil Registrar General Phi[ippine Statistics Authority 1ast Avenue, Quezon Citx We have audited the accompanying financial statements of the Philippine Statislics \uthority (PSA), which comprise the Statement of Financial Position as at December 31 2016, and the Statement of Financial Performance, Statement of Changes in Net Assets/Equity, Statement of Cash Flows, Statement of Comparison of Budget and Actual Anount for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility br the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Philippine Public Sector Accounting Standards (PPSAS), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Philippine Public Sector Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management. as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basesjbr Qualified Opinion 1. Out of the Y1.260 billion Property, Plant and Equipment (PPE), R1.191 billion PPE accounts of the CO and 10 ROs were unreliable due to: (a) erroneous capitalization/recognition of expenses as Buildings account, erroneous recognition of Construction in Progress-Building and Other Structures (CIP-BOS) account instead of CIP-Land Improvements (CIP-LI) and incorrect recognition in the CIP- BOS account in the CO; (b) inclusion of lost/missing PPE in the Report on the Physical Count of PPE (RPCPPE) in NCR; (c) non-recognition of PPE transferred from CO to NCR, ROs I and IX; (d) inclusion of semi-expendable assets with value of less than P15,000.00; (e) purchased PPE were recorded as supplies expenses in the books of RO II; (f) non-reconciliation of the accounting and property records in ROs VII, IX and XII; (g) non-disposal of unserviceable PPE in NCR, ROs VI and XIII; (h) non-conduct of physical inventory of PPE, and non- preparation/submission of the RPCPPE in ROs I, 111, VI, VII and XII; (i) non- maintenance of PPE Ledger Cards (PPELCs) and non-updating of Property Cards (PCs) and PPELCs in NCR, ROs 1, VI, and FX. 2. The regularity and validity of the disbursements in the CO of P496.521 million out of the P585.726 million recognized under the account Other MOOE as of December 31, 2016 is doubtful due to the non-submission of the JEVs and supporting documents for transactions amounting to P472-276 million and the non- attachment of supporting documents such as Disbursement Vouchers (DVs) and Payroll amounting to P24.245 million, contrary to Section 4(6) of PD 1445, COA Circular Nos. 2012-001 and 2015-007 dated June 14, 2012 and October 22, 2015, respectively. 3. Of the P88.284 million recognized as Due from GOCCs account as of December 31, 2016, P86.860 million remained unliquidated as of date despite the lapse of almost 10 years and COA's issuance of an Audit Observation Memorandum (AOM) pertaining to the said issue. 4. The carrying amount of the Inventory accounts of P71 135 million is unreliable due to: (a) non-reconciliation of accounting and property records in CO, NCR and RO Vil; (b) non-adjustment of semi-expendable assets, non-utilization of the weighted average method in costing inventories, non-reporting of all inventories in the Report on the Physical Count of Inventories (RPCI), non-utilization of the prescribed Requisition and Issue Slips (RIS), Report on Supplies and Materials and Issued (RSMI) and RPCL in NCR; (c) non-recognition of purchases as inventories in RO 2 VIII; (d) non- mnaintenance/non-updating of Stock Cards (SCs) and Stock Ledger Cards (SLCs) in NCR, ROs II, VI, VII and IX; (e) non-conduct of physical inventory and non-preparation/non-subrnission of the RPCI in ROs 11, I1, VI, VII and IX; (f) non-preparation of the RIS, RSMI and RPCI and non-utilization n Inventory Custodian Slip (LCS) in ROs II and IX. Qualified Opinion ln ou1r opinion, except for the effeets of the matters described in the Basis for Qualified Opinion paragraph, the financial statenents present fairly, in all material respects tc inancial position of the Philippine Statisties Authority as at December 3i, 2016, and its financial performance and its cash flows for the year then ended in accordance with PPSAS. COMMISSION ON AUDIT Byl NELI A R. BARCIAL State Auditor LV OIC-Supervising Auditor April 26 2017 REPIJISLC OF -THE PHJ.IPN2NE5 PHILIPPINE STATISTICS AUTHORITY Refcren v Nu iFASO3 t 2C STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS (conosEidated Al Funds) .he management of PHILIPPINE STATISTICS AUTHORITV is responsible for all information and representations contained in the accotnpanying Statement of Financial Position as at December 31, 2016 and the related Statements of Financial Performance, Statement of Cash Flows, Statement of Comparison of Budget and Actual Amounts, Statement of Changes in Net Assets/Equity and Notes to Financial Statements for the ycar then ended. The financial statements haNe been prepared in conformity with generally accepted stat uccounting principlesý and reflect amounts that are based on the best estirates and informed judgnent of management with an appropriate consideration to material iy- In this regard, management maintains a system of accounting and reporting which provides for the necessary internai controls to ensure that ransclions Ure properly authorized and recorded, assets are safeguarded against unauthorized use or dispositioh and liabilities are recognized, EVFLY F TOLENTINO LISA GRACE S. BERSALES Ph.0 S Chief, Accounting Divisitn National Staistician ad Civil Registra General Febrary 2, 2017 Ferruary 2R 2017 Date signed Date signed ÆF/mcAb/ngO-sp2ø 2/F TAM Buiiding.. PSA CompleX, East Avehlue, Tibman, QuezOn C'ty, PbiPPnrs1O PH ILIPPINE STATISTICS AUTHORITY STATEMENT OF FINANCIAL POSITION As at December 31, 2016 (In Philippine Peso) Note 2016 2t)13 ASSETS Current Assets Cash and Cash Equivalenits 4 344,630,714.39 259,962,536.45 Recivables5 383,069,005.51 245,683,915.40 nifvclor-ies 6 71,135,709.27 38,437,134.72 Other Current Assets 9 39,524,075.28 52,001,439.71 Total Current Assets 838,359,504.45 596,085,026.28 Non-Current Assets Property Plart and Equipment 7 1,260,027,366.25 731 ,236,468.28 Intangible Assets 8 104,952.50 158,956.43 Other Non-Current Assets 9 10,291,226.17 16,362,817.72 Total Non-Current Assets 1,27_,423,544.92 747,758,242.43 Total Assets 2,108,783,049.37 1,343,843,268.71 LIA BIL ITI ES Current Liabilities Financial Liabilities 10 634,765,664.75 609,577,978.69 [nter-Agency Payables I 1 383,799,436.26 24,194,71723 Intra-Agency Payables 12 45,027,703.90 - Trust Liabilities 13 344,308,389.14 270,563,000.47 Other Payables 14 1,975,657.45 1,267,478.48 Total Current Liabilities 1,409,876,851.50 905,603,174.87 Total Liabilities 1,409,876,851.50 905,603,174.87 Total Assets less Total Liabilities 698,906,197.87 438,240,09384 NET ASSETS[EQU1TY Equity Accuinulated Surplus/(Deficit) 698,906,197-87 438,240,093.84 Trotal Net Assets(Ecluity 698,906,197.87 438,240,093.84 err Tis statement should be rend in conjuncii<9n with the accoiPanvying notc-. 5 PHILIPPINE STATISTICS AUTHORITY STATEMENT OF FINANCIAL PERFORMANCE For the Year Ended December 31, 2016 (in Philippine Peso) Note 2016 2015 Revenue Service and Business Income 15 925,870,489.65 863132,081.63 Shares, Grants and Donations I0 1,756,810.00 - Total Revenue 927,627,299.65 863,132,081.63 Less: Current Operating Expenses Personal Services I7 1,688,846,247.50 1,331,816,211.67 Maintenance and Other Operating Expenses 18 2,207,308,956.63 3,263740 17'239 Financial Expenses 19 374,031.71 519,738.85 Non-Cash Expenses 20 84,620,400.04 95,972,061 80 Tolal Current Operating Expenses 3,981,149,635.88 4,690 048,124 71 Su rplus (Deficit) from Current Operations (3,053,522,336.23) (3,828,916,103.08) Net Financial Assistance/Subsidy 21 4,647,318,971.81 4,935,124,256 15 Gains 2.1 142,136.02 652.996.34 Losses 2' 6,076,521,69 Surplus (Deficit) for the period 1,587,862,249.91 1,106,861,149.41 this statemer) should be read in conjunction with the accompewnving notes. PHILIPPINE STATISTICS AUTHORITY STATEMENT OF CHANGES IN NET ASSETS/EQUITY For the Year Ended December 31, 2016 (In Philippine Peso) 2016 2015 Balance at January l 438,240,093.84 427,142,861,77 Add/(Deduit): .Changes in Accointing Policies (7,253,921.66) (10,454,098.60) Pror period adjustments 42,945,065.04 (485,81 [.35) Other Adjustments 2,142,981.06 Restated balance 476,074,218.28 416,202,951.82 Add/(Dedapt): Changes in Net Assets/Equity for the Calendar Year Surplus for the period 1,587,862,249.91 1,106,861,149.41 Adjustnment of net revenue recognized direetly in net assets/equit (1,385,022,368.17) (1,037,884,768-64) Others 19,992,097.85 (46,939,238.75) Balance at December 31 698,906,197.87 438,240,093-84 7 PHILIPPINE STATISTICS AUTHORITY STATEMENT OF CASH FLOWS For the Year Ended December 31, 2016 (In Philippine Peso) 2016 2015 Cash FIow from Operating Activities Lsb Inflows Receipt ofrNotice of Cash Allocation 7,792,021,013.16 5,430,754,717.00 Constructive Receipt of TRA 162,124,761.85 212,723,477.92 Collections of Income/Revenues 926,279,407.98 863,653,184.66 Collee tion of Receivables 246,320.09 120,175.15 Receiþt of Inter-Agency Fund Transfers 64,492,904.60 82,939,850.00 Receipt of Intra-Agency Fund Transfers 179,062,206.63 83,497,198.63 [rust Receipts 2,966,628,152.61 2,751,058,076.88 Other Receipts 17,385,965.74 31,075,023.03 Adjustments 14,715,042.43 5,356,100.85 TotalCash Inflows 12,122,955,775.09 9,461,177,804.12 Cash Ouflows Remittance to National Treasury 925,180,412.06 72,930.02 Payment of Operating Expenses 3,535,668,107.55 1,326,195,300.87 Purchase of Invenrtories 48,122,843.54 26,1 59.50 Grant of Cash Advances 1,123,088.62 120,630,095.8 I Prepayments 17,314,242.09 153,777,467-53 Paynlt of Deposits 1,797,927.78 50,000.00 Pavrnent of Prior Year's Accounts Payable 56,747,794.59 69,755,448.86 Remittance of Personnel Benefit Contributions and Mandatory Deduetions 742,698,016.90 651,260,563-26 Grant of Financial Assistance/Subsidy - 2,821,948,377.00 Release of Inter-Agency Fund Transfers 3,000,000.00 Release of Intra-Agency Fund Transfers 2,697,841,648.50 71,968,081.63 Payment from Trust Liabilities/Fund Transfers 2,607,655,200.80 2,326,500,270.38 Other Disbursements 10,171,103.86 4,351, 89-16 Adjustments 1,362,470,346.53 1,724,073,61 3.56 Total Cash Outflows 12,009,790,732.82 9,270,609,497 58 Net Cash Provided by (Used in) Operating Activities 113,165,042.27 190,568,306.54 Cash Flows from Investing Activities Cash Inflows Proceeds from Sale/Disposal of Property, Plant and Equipnent 34,634.00 Total Cash Inflows 34,634.00 2016 CashOuttlows 2 2-322 874,88 urchase/ColstructiQon of Property, Plant and EBqui pme31,498.33 Total Cash Outflows 28,531,498.33 25 22 874.8X Net Cash Provided by (Used in) Investing Activities 2496,864.33) (25,32,874.88) Increase/(1)erease) in Casht and Cash Equivalents 84,668,177.94 165,245431 J6 2-59,962,536.45 94,717,14-79 Cash and Cash lquivalents, Januarv 1 ----- 1- Cash and Cash Equivalents, December 31 PHILIPPINE STATISTICS A UTHORITY STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNT For the Year Ended December 31, 2016 (In Philippine Peso) ¯Budgeled Amiounkt Aclal Amiouts:, onDiTrec Patcuas(Current Year Appropriation) 1inkal Butet and(lL Origna inaComprabe Bsis Acl.ual Seri s ank lusincss InCOMC 740,469,000.00 740,469,000.00 920,839,517.16 (180,370317 740,469,000.00 740,469,000.0 920,839,517 16 (180,370.517 I ) payiw.wls.ý Peasnnel ctviccs 1,066.436,055.44 1,527,448,549.44 1, 174,369,309.44 353,079,240 00 Majiice and Other Operating Expetnses 1,877,356,887"67 1877,356,887.67 1,442,335,765.81 435,021. 186 (AiI)l Olfflay 500,539,166.00 -500,539,166,00 27,6)39,306.33 472,899.859.67 ipnil layp e 284,344.42 284,344.42 326,184.42 (41,84000) 3,444,616,453.53 3,905,628,947.53 2,644,670,566.00 1,260,958.38 1.53 NI TRIi[111S/PAYMENTS (2,704,147,453.53 (3,165,159,947.53 1,723,83 1,048.8 41,328 LO