BICOL UNIVERSITY

LEGAZPI CITY
CONSOLIDATED NOTES TO FY 2013 FINANCIAL STATEMENTS

Note 1 – Introduction and Basis of Reporting

 Bicol University was created as a State University from six (6) reputable schools
and colleges on June 21, 1969 by virtue of Republic Act 5221. The Bicol Teachers
College (BTC) with its Laboratory School (BTLS) at Daraga, Albay, the Daraga
East Central School (DECS) also at Daraga, Albay and Albay High School formed
the College of Education and its Laboratory School. The Bicol Regional School of
Arts and Trades (BRSAT) at Legazpi City became the College of Industrial
Technology and College of Engineering. The Roxas Memorial Agricultural School
(RMAS) at Guinobatan, Albay became the College of Agriculture and Forestry,
while the School of Fisheries at Tabaco City formed the College of Fisheries.

 Its progressive development brought Bicol University to its present distinctive form
and status as an academic institution, composed of fourteen (14) independent
colleges and units spread over seven (7) campuses in the Bicol Region. The base of
BU Administration remains in Legazpi City.

 In 2006, as part of the effort to improve its systems and procedures, Bicol
University and the Commission on Audit executed a Letter of Engagement for the
implementation of the Electronic National Government Accounting System (e-
NGAS). The financial statements and its supporting schedules were then generated
with the aid of the e-NGAS.

 In recognition of the University’s commitment to continually strive for excellence

in instruction, research and extension by meeting the highest level of clientele
satisfaction and adhering to quality standards, Bicol University was awarded the
ISO 9001-2008 Institutional Certification by TUV-SUD PSB (Phils.) Inc. last
January 4, 2011. The University passed the 1st surveillance audit last November 18,
2011 and subsequently passed the 2 nd surveillance audit last December 2012.
Likewise, the University passed the Re-Certification Audit last December 18-20,
2013.

 Last January 17, 2012 a plaque of recognition was awarded to Bicol University for
establishing a Quality Management System Certified to ISO 9001 Standards at
Malacañang Palace in compliance with Executive Order No. 605 series of 2007.

 Bicol University maintains three funds, the General Fund (Fund 101), Special Trust
Fund (Fund 164) and the Income Generating Projects (Fund 161).

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  The Financial Statements were prepared in accordance with the generally accepted
state accounting principles and standards.

Note 2 – Significant Accounting Policies

 The accrual basis of accounting is adopted. In compliance with COA Circular Letter
No. 2004-002 dated September 30, 2004, all expenses are recognized when incurred
and reported in the financial statements in the period to which they relate.

 Property, Plant and Equipment are only at cost less accumulated depreciation.

 For assets under construction, the Construction Period Theory is applied for costing
purposes. Related expenses incurred during the construction of the project formed
part of the cost of the asset. Progress payments of the infrastructure projects and all
related expenses are initially recorded under the Construction in Progress-Agency
Assets account. The corresponding asset account is recorded upon completion and
final acceptance/payment. Expenses incurred after the construction of the asset are
charged against the current year’s operations depending upon the materiality of the
expense incurred. Major repairs/renovations and improvements that would extend
the life of the asset are capitalized to the appropriate asset account.

 Payable accounts are recognized and recorded in the books of accounts only upon
delivery of the goods and rendition of services to the agency.

Note 3 – Correction of Fundamental Errors

 Fundamental errors of prior years are corrected using the Prior Years’ Adjustment
account. Errors affecting current year’s operations are charged against the current
year’s accounts.

Note 4 – Cash

 This account is broken down as follows:

2013 2012
Cash on Hand
Cash-Collecting Officers ₱ 87,218.98 ₱ 127,606.69
Cash-Disbursing Officers 3,239.50 76,903.73
Petty Cash Fund 716,410.28 568,221.80
Payroll Fund 1,013,048.46 17,492.98

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 2013 2012
Cash in Bank-Local Currency ₱ 240,347,226.05 ₱ 208,100,772.16
Cash in Bank-Local
Cash Currency,
-National Treasury, CA
MDS - -
Cash in Bank-Local Currency, Time
Deposits 74,378,665.19 73,627,467.80
Total Cash ₱ 316,545,808.46 ₱ 282,518,465.16

 The balance of the Cash – Collecting Officers account pertains to undeposited

collection at year-end.

 In January and September 2004, the amount of Thirty Five Million Pesos
(P35,000,000.00) and Twenty Million Pesos (P20,000,000.00) respectively were
transferred from L.B.P. Current Account No. 0132-0265-48 to LB.P. High Yield
Savings (Time Deposit) Account No. 0131-2482-61. As of December 31, 2013, this
account has a balance of P74,378,665.19.

 Petty Cash Fund is being maintained under the Imprest Fund System. All
replenishments are charged against the expense accounts. At year–end, this account
is adjusted for the unreplenished expenses out of the PCF to reflect the correct
balance.

Note 5-Receivables 2013 2012

Receivable Accounts
Accounts Receivables ₱ 4,462,157.74 ₱ 4,400,222.47
Due from Officers and Employees 190,388.85 210,869.06
Advances to Officer and Employees 2,449,936.30 1,179,826.67

Inter-Agency Receivables
Due from National Treasury 37,432,936.43 87,727,163.08
Due from NGAs 10,001,177.06 2,267,755.48
Due from LGUs 4,636,743.20 4,636,743.20
Other Receivables
Receivables-Disallowances/Charges 1,502,790.46 1,474,790.46
Other Receivables 4,245,902.93 4,904,456.02
Tot al Receivables ₱ 64,922,032.97 ₱ 106,801,826.44

Account Receivables

 These are the amounts of school fees due from students who availed the installment
scheme of payment.
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 Other Receivables

 These are the amounts due from the students who availed of the various loan
programs offered by the University.

Due from Officers and Employees

 This account consists of the long – overdue cash advances to officers and
employees, which remains unliquidated as of the end of the year. Also included are
excess cash advances due for refund.

Advances to Officers and Employees

 This account consists of the amount granted as advances to employees to defray the
various expenses to be incurred while on travel and attending trainings/seminars. It
also includes special cash advances granted for other operating expenses.

Due from National Treasury

 This account represents the deposits made to the National Treasury representing
trust collections from other NGAs in compliance with EO#338 as implemented by
COA – DBM – DOF JC#1-97 dated January 2, 1997.

Due from NGAs

 This account includes the unliquidated amount for the transfer of Bicol University’s
Capital Outlay Program funds to the Department of Public Works and Highways,
Regional Office No. V per Memorandum of Agreement signed on August 15, 2008.
The funding requirement for this Capital Outlay, CY 2008 Continuing
Appropriations representing Congressional Initiatives (CI) was covered by SARO
No. ROV-08-0182 dated May 20, 2008. As of December 31, 2012, the DPWH has
already submitted liquidation reports amounting to P71,645,244.52 for this various
fund transfers leaving a balance of P1,952,755.48.

Due from LGUs

 This account represents the receivable from the National Government for the grant
of free tuition and matriculation fees to SK officials pursuant to the Local
Government Code of 1991. Also included are the unliquidated financial assistance
received from the Provincial Government of Albay for the benefit of BU scholars.

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Note 6 – Inventories

2013 2012
Office Supplies Inventory ₱ 73,586,401.43 ₱ 67,472,082.81
Accountable Forms Inventory 491,230.00 491,230.00
Animal/Zoological Supplies Inventory 15,790.00 -
Drugs and Medicines Inventory 2,012,107.49 1,627,098.49
Medical, Dental and Laboratory Supplies 1,879,700.39 1,491,060.39
Gasoline, Oil and Lubricants Inventory 1,769,819.66 1,650,863.16
Agricultural Supplies Inventory 4,027,920.55 2,951,096.35
Textbooks and Instructional Materials 510,589.00 460,012.00
Other Supplies Inventory 13,712,242.21 10,741,182.22
Construction Materials Inventory 201,426.57 6,200.00
Livestock Inventory 635,572.00 545,572.00
Other Agricultural, Fishery & Forestry 133,712.00 133,712.00
Products Inventory
Total Inventories ₱ 98,976,511.30 ₱ 87,570,109.42

 Semi – expendable properties acquired at less than P10,000.00 each are included in
the office and other supplies inventory balance and to be reclassified to the
appropriate asset accounts. Still included in the inventories are the consumable
supplies that were already issued but were not yet dropped from the records. On-
going reconciliation of the records and conduct of physical counts are being made
to come up with a realistic figure for the Inventories account.

Note 7 – Prepayments

2013 2012
Advances to Contractors ₱ 5,336,390.66 ₱ 4,823,603.89
Other Prepaid Expenses 965,767.00 753,501.00

Total Prepayments ₱ 6,302,157.66 ₱ 5,577,104.89

Advances to Contractors

 These are the amounts granted as mobilization fee for the various infrastructure
projects undertaken by the contractors. This is equivalent to 15% of the total
contract price.

Other Prepaid Expenses

 These are the prepayments for various magazine/journal subscriptions for library
use.

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Note 8 – Investments

Other Investments and Marketable Securities

 The establishment of the Bicol University Provident Fund was approved in

principle per BU-BOR Resolution No. 079 series of 2005 on November 29, 2005.
The implementing Rules and Regulations were approved thru Resolution No. 054
series of 2007 by the BU-BOR during its 80th Regular Meeting held in September
12, 2007. A total endowment amounting to Six Million Pesos (P6,000,000.00) was
granted in CY 2008.

Note 9 - Property, Plant and Equipment

 This account consist of the following:

Cost Accumulated Net Book

Depreciation Value
Land and Land
Improvements
Land ₱ 21,979,656.14 ₱ - ₱ 21,979,656.14
Land Improvements 62,243,357.56 24,081,943.40 38,161,414.16
Buildings
Office Buildings ₱ 53,029,019.43 ₱ 7,807,147.85 ₱ 45,221,871.58
School Buildings 401,060,835.96 53,378,022.63 347,682,813.33
Other Structures 221,618,218.59 20,817,542.37 200,800,676.22
Office Equipt., Fur-
niture and Fixtures
Office Equipment ₱ 39,341,577.16 ₱ 9,025,412.55 ₱ 30,316,164.61
Furniture and
Fixtures 26,821,855.30 11,888,796.24 14,933,059.06
IT Equipment and
Software 99,833,484.81 41,785,747.65 58,047,737.16
Library Books 22,467,322.11 10,460,307.77 12,007,014.34
Machineries and
Equipment
Machineries ₱ 3,664,320.84 ₱ 806,862.41 ₱ 2,857,458.43
Communication
Equipment 8,463,265.45 2,865,153.70 5,598,111.75
Firefighting Equipt. 1,366,154.50 516,751.86 849,402.64
Hospital Equipment 133,061.72 8,574.88 124,486.84
Medical. Dental and
Laboratory
Equipment 10,400,377.90 2,340,598.85 8,059,779.05

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 Cost Accumulated Net Book
Depreciation Value
Military and Police ₱ 317,463.20 ₱ - ₱ 317,463.20
Equipment
Sports Equipment 143,443.00 30,598.69 112,844.31
Technical & Scien-
tific Equipment 32,547,377.45 4,502,873.42 28,044,504.03
Other Machineries
and Equipment 26,146,232.79 4,143,445.25 22,002,787.54
Transportation
Equipment
Motor Vehicles ₱ 28,335,531.39 ₱ 6,353,658.73 ₱ 21,981,872.66
Watercrafts 81,800.00 - 81,800.00
Other Transporta-
tion Equipment 17,235.00 10,293.61 6,941.39
Other Property,
Plant & Equipment ₱ 9,904,375.70 ₱ 5,025,236.73 ₱ 4,879,138.97
Public Infrastructure
Artesian Wells,
Reservoirs, Pump-
ing Stations and
Conduits ₱ 105,322.90 ₱ - ₱ 105,322.90
Construction in
Progress - Agency
Assets ₱ 110,778,910.87 P - P 110,778,910.87
Total Property, Plant
and Equipment ₱ 1,180,800,199.77 ₱ 205,848,968.59 ₱ 974,951,231.18

 Property, plant and equipment (PPE) are being carried at cost less accumulated
depreciation. This account still includes the BU Little Theater with a book value of
P562,500.00 which was destroyed by fire on April 1, 2006.

 Regular maintenance, repair and minor replacements were charged against the
Maintenance and Other Operating Expenses as these were incurred. Repairs of
material amount that extends the life, increase the capacity or improve the
efficiency or safety of the property were charged against the appropriate PPE
account.

 Depreciation was provided only for the recent acquisitions of property, plant and
equipment due to the insufficiency of data of the Inventory Record of the PPE
account.

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  The Construction in Progress-Agency Assets account pertains to the total progress
payments made for the on-going infrastructure projects of the University. This also
includes the payments made for the related project management costs.

Note 10 – Liabilities

2013 2012
Payable Accounts
Accounts Payable ₱ 13,766,825.93 ₱ 11,458,701.64
Due to Officers and Employees 12,247,296.79 8,529,275.66

Inter-Agency Payables
Due to BIR ₱ 19,580,843.45 ₱ 11,955,176.16
Due to GSIS 1,763,604.93 1,027,214.35
Due to PAG-IBIG 409,584.96 429,173.21
Due to PHILHEALTH 217,150.66 219,676.79
Due to Other NGAs 68,226,928.25 120,953,336.05
Due to LGUs 3,405,159.59 1,505,821.09

Other Liability Accounts

Guaranty Deposits Payable 9,672,549.99 8,258,854.55
Performance/bidder's 3,451,763.60 3,073,236.90
bail bonds payable
Other Payables 24,388,129.03 14,932,454.40

Deferred Credits 4,697,839.35 4,697,839.35

Total Liabilities ₱ 161,827,676.53 ₱ 187,040,760.15

Due to Officers and Employees

 Recorded in this account are the unpaid honoraria, salaries, wages, other personnel
benefits/bonuses and reimbursement for travelling and seminar expenses due to the
officers and employees. The balances for each individual Due to Officers and
Employees subsidiary ledgers pertain to accounts payable for monetization. Also
included is the amount of accounts payable for monetization of leave credits of BU
employees.

Due to BIR

 Includes unremitted December 2013 taxes withheld from employees and various
creditors. Reconciliation is on-going on this account to establish the unremitted
taxes withheld and the unrecorded tax remittances of prior years.

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 Due to GSIS

 Includes unremitted December 2013 various GSIS premiums and loan repayments.

Due to PAG-IBIG

 Includes unremitted December 2013 Pag-ibig contribution and various loan

repayments.

Due to PHILHEALTH

 Includes unremitted December 2013 PHILHEALTH premium.

Due to Other NGAs

 Recorded in this account are the various grants, trusts and projects funded by other
government agencies and instrumentalities intended for infrastructure projects,
equipment outlays, instruction, research and extension activities.

For the year 2012, the funding from the Commission on Higher Education alone
have the following balances:

Construction of the College of Medicine Building ₱50,000,000.00

Regional Research Center for Food Safety and Quality
Assurance 17,000,000.00
Students Grants in Aid Program for Poverty Alleviation
(SGPPA) 9,051,463.40

For the year 2013, the above-cited funds from CHED have the following balances:

Construction of the College of Medicine Building ₱ 8,561,960.52

Regional Research Center for Food Safety and Quality
Assurance 8,209,058.45
Students Grants in Aid Program for Poverty Alleviation
(SGPPA) 9,514,165.90

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Note 12 – Expenses
2013 2012
Personal Services

Salaries and Wages

Salaries and Wages-Regular ₱ 305,425,483.31 ₱ 296,383,885.56
Salaries and Wages-Casual 3,873,240.40 3,402,511.79
Salaries and Wages-Contractual 9,681,612.45 300,046.94

Other Compensation
Personnel Economic Relief Allowance (PERA) 21,999,666.10 22,312,262.22
Representation Allowance (RA) 319,500.00 200,400.00
Transportation Allowance (TA) 300,500.00 189,327.38
Clothing/Uniform Allowance 4,663,000.00 4,612,000.00
Subsistence, Laundry and Quarters Allowances 78,100.00 87,480.00
Productivity Incentive Allowance 1,816,000.00 1,580,000.00
Other Bonuses and Allowances - 2,986,000.00
Honoraria 63,794,471.36 70,418,240.28
Hazard Pay 796,194.47 851,334.50
Longevity Pay 15,478.86 34,028.34
Overime and Night Pay 7,412,054.61 6,286,394.36
Cash Gift 5,940,473.88 4,732,375.00
Year-End Bonus 23,944,463.44 25,575,022.48

Personnel Benefits Contribution

Life and Retirement Insurance Contributions 35,331,945.49 34,985,597.37
PAG-IBIG Contributions 1,170,707.82 1,134,537.96
PHILHEALTH Contributions 3,223,659.86 3,036,428.00
ECC Contributions 1,080,267.75 1,123,118.31

Other Personnel Benefits

Retirement Benefits-Civilian 7,368.40 1,525,190.68
Terminal Leave Benefits 11,892,764.84 5,401,087.12
Other Personnel Benefits 29,955,200.00 29,943,100.00

Total Personal Services ₱ 532,722,153.04 ₱ 517,100,368.29

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 2013 2012

Maintenance and Other Operating Expenses

Traveling Expenses
Traveling Expenses-Local ₱ 14,268,744.82 ₱ 11,252,470.36
Traveling Expenses-Foreign 2,552,627.49 1,528,830.83

Training and Scholarship Expenses

Training Expense 8,575,146.48 6,045,618.68
Scholarship Expense 6,362,259.33 7,720,275.47

Supplies and Materials Expense

Office Supplies Expenses 6,748,777.78 9,223,841.79
Accountable Forms Expenses 463,119.40 312,510.00
Food Supplies Expense 3,015,284.90 -
Animal/Zoological Supplies Expenses 113,694.00 408,322.00
Drugs and Medicines Expenses 316,423.40 167,802.00
Medical, Dental and Laboratory Supplies 271,021.00 674,387.35
Gasoline, Oil and Lubricants Expenses 2,169,854.98 1,770,058.90
Agricultural Supplies Expenses 1,261,485.00 2,183,941.00
Textbooks and Instructional Materials Expenses 8,024.29 2,372.20
Other Supplies Expense 16,035,679.41 15,256,259.58

Utility Expenses
Water Expenses 1,908,405.93 1,340,333.14
Electricity Expenses 17,782,081.35 21,187,768.56
Cooking Gas Expenses 55,675.00 -

Communication Expenses
Postage and Deliveries 124,143.50 51,082.50
Telephone Expenses-Landline 1,519,442.63 1,505,325.14
Telephone Expenses-Mobile 189,109.71 132,041.45
Internet Expenses 2,280,544.55 2,018,613.74
Cable, Satellite, Telegraph aand Radio Expenses 60,175.99 25,576.34
Membership Dues & Contributions to Orgs. 1,055,096.11 182,748.75
Advertising Expenses 203,080.80 155,903.60
Printing and Binding Expenses 1,107,958.71 1,324,048.99
Rent Expenses 64,000.00 -
Representation Expenses 1,765,000.00 1,254,998.00
Transportation and Delivery Expenses 1,758,636.40 1,204,951.00
Subscription Expenses 980,674.00 289,168.20

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 2013 2012
Professional Services
Legal Services ₱ 31,300.00 ₱ -
Auditing Services 246,311.97 282,378.30
Consultancy Services 168,000.00 163,000.00
General Services 18,055,034.46 16,383,254.84
Janitorial Services 5,891,543.99 5,657,807.28
Security Services 12,358,609.89 12,849,509.35
Other Professional Services 7,231,843.68 986,014.74

Repairs and Maintenance

Land Improvements 192,427.98
Office Buildings 1,209,145.21 429,625.12
School Buildings 4,493,197.47 530,506.89
Other Structures 551,956.80 296,742.10
Office Equipment 205,713.00 199,339.00
Furnitures and Fixtures 12,400.00 -
IT Equipment & Software 124,055.00 20,450.00
Other Machineries and Equipment 27,200.00 7,131.00
Motor Vehicles 1,272,668.51 1,204,255.42
Other Property, Plant & Equipment 138,750.00 19,500.00

Extraordinary Expenses 166,681.96 194,575.87

Taxes, Duties and Licenses 175,095.62 692,412.10
Fidelity Bond Premiums 652,607.30 577,992.31
Insurance Expenses 2,444,909.50 2,203,984.57

Depreciation Accounts
Land Improvements 4,967,704.56 4,530,825.78
Office Buildings 1,368,780.33 1,370,932.08
School Buildings 9,515,868.52 9,824,689.39
Other Structures 5,834,927.70 5,160,742.78
Office Equipment 2,407,281.59 2,044,063.30
Furnitures & Fixtures 2,873,452.88 2,380,207.30
IT Equipment & Software 8,895,192.46 8,123,107.75
Library Books 2,421,691.80 2,278,002.65
Machineries 330,324.71 247,544.40
Communication Equipment 586,679.10 607,313.47
Firefighting Equipment and Accessories 124,551.02 127,489.20
Hospital Equipment 6,936.88 756.00
Medical, Dental & Laboratory Equipment 790,073.03 503,930.52
Sports Equipment 14,472.51 7,956.10
Technical and Scientific Equipment 768,404.10 760,678.95

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 2013 2012
Other Machineries & Equipment ₱ 1,285,894.82 ₱ 921,182.23
Motor Vehicles 1,668,182.77 1,205,861.04
Other Transportation Equipment 1,175.64 1,525.93
Other Property, Plant & Equipment 976,587.50 1,013,227.57
Other Maintenance and Other Operating Expenses 58,306,352.45 30,395,463.96
Total Maintenance and Other Operating Expenses ₱ 251,617,725.69 ₱ 201,615,656.84
TOTAL OPERATING EXPENSES ₱ 784,339,878.73 ₱ 718,716,025.13

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