WHAT IS THE PROBLEM?
RECOMMENDATION
 Based on the interview with the President,
there was an instance wherein a lecturer
of MSU-IIT was registered as a member
and was deducted from the payroll when
in fact he should not have been deducted
because he cannot qualify as a member.
The membership must have been
overlooked due to the simultaneous
payment of membership fee and
submission of application.
 The collections are put together in a
single/common fund without monitoring
how much of the balance is actually
appropriated for each breakdown. This
could result to a problem of having not
enough funds for such program supported
by the breakdown.
 There are not enough reconciling records.
As per the interview with the treasurer, it
was found out that due to difficulty of
reconciling the items from the previous
treasurer’s transactions, she was forced to
just refer to the passbook for the
disbursements in order to balance and
start new reports for her term. The ways
of how the past officer handled the
transactions are different from the new
one because there is no guideline of how
to do so.
 Problems arise most especially when the
collecting and recording officers do not
have basic knowledge of how to handle
the financials.
 Application of membership must first be
approved and reviewed by the executive body before
the qualified applicant pays to the treasurer a
membership fee of one hundred pesos (Php 100.00)
together with the membership form. Upon approval by
the body and payment made by the applicant, the
treasurer will then prepare and update the list of
members of the union to be given to the accounting
office for the processing of salary deductions of the
monthly dues of the new members of the union.
 The union must maintain different
logbooks/records of each breakdown of the
membership fee to trace its appropriate balances. The
treasurer must account for the beginning balance,
related transactions, additional contributions for the
the month, the corresponding expenses and the ending
balance during the period. The sum of the ending
balances of each particular should be the sum of the
Faculty Union’s account balances.
 Officers holding the position of the treasurer and
the auditor should preferably be both from the College
of Business Administration and Accountancy to help
them in managing the faculty union’s finances properly.
In case no one from the suggested college will take the
positions, it should be required that at least the
succeeding officer has basic financial knowledge.
 Guidelines on how the finances of the union
should be handled as well as an established format of
the financial reports and internal documents would be
helpful for the efficiency of recording and reporting of
the next treasurer.
 A format or manual will be helpful in preparation
for the succeeding officers and to serve as guidelines in
handling transactions and generating statements.
 The system used to record transactions will be
more effective if the union will follow good record
keeping practices. They must maintain a
cash/checkbook to monitor all its cash receipts,
payments, including the union’s bank deposits and
withdrawals. The union must indicate the source of
deposits and the type of expense in the
cash/checkbook. Per interview, the treasurer does not
have basis as to the bank charges that was deducted by
the bank. The union should ask for Statement of
Account from PNB since the treasurer needs to
properly account for the bank charges. The union
should reconcile the checking account each month.
 WHAT IS THE PROBLEM?
 For retirees, regardless of how long they have
been members of the union, when they retire
they receive the same amount of benefit. This
could create a problem when the funding for
that particular becomes insufficient because
the appropriate amount from the
membership fees of the retirees is the same
as for those who will resign.
 There is a common fund for everything not no
records of the balances for each breakdown.
The problem is the lack of monitoring for each
breakdown and the disbursements related to
it cannot be checked whether there is still a
balance to cover for it. Additionally, there is
also no proper monitoring of what portion is
being invested on a time deposit.
 Based on the interview, when officers exceed
their budget and paid more than their Cash
Advances, they are reimbursed as long as they
can provide supporting documents. The
problem is that an officer could irresponsibly
purchase items out of the budget knowing
they will be reimbursed anyway.
 There is no strict deadline for the liquidation
reports to be passed resulting to a problem
on the part of the treasurer to generate
accurate records. According to the interview,
there is a deadline of 1-2 weeks after the cash
advance, depending on what transaction.
However, this is not strictly followed because
of how busy the officers are also with their
job.
 The reimbursement process is treated as if it
was a cash advance, only done in reverse (e.i
purchase first then fill up CA forms).
 The return of excess of cash advances is
sometimes paid for miscellaneous expense or
as reimbursement of other officers. This
would create a difficulty of tracing the
amounts later on for audit trail.
 Officers are allowed to purchase and back it
up with an acknowledgement receipts in case
the provider do not have an official receipt.
However, there is not established threshold
as to how ‘small’ this transaction should be to
be acceptable.
RECOMMENDATION
● Retirement criteria should be established and
their benefits should be based on that criteria
(e.g bracket of years stay). Loan applications
should be amply supported with documents to
ascertain whether or not the applicant is
eligible for the loan and that the loan will be
used for the benefit of the faculty’s fulfilment
of responsibilities and not for irresponsible
personal expenses.
● Disbursements must be properly recorded on
the basis of their respective funds to properly
account for the balance of each breakdown of
the monthly dues of the members.
● During the Budget Presentation, a canvass from
at least three (3) suppliers should be presented
for the formulation of their Budget Proposal.
The three suppliers should provide a Summary
of Price Quotation as a basis for their
estimates. This will help them in tracing costs in
cases where the actual expense for a certain
activity exceeds its allocated budget.
● The deadline set for the submission of
liquidation reports should be strictly
implemented by the treasurer. There should be
appropriate sanctions on those who do not
follow. This is to avoid instances where the
officer in charge holds the union’s money for
too long in case there is an excess and also to
help the treasurer generate reports.
● A Reimbursement Expense Receipt (RER)
should be used instead of the Cash Advance
Form when filling up for a reimbursement to
properly classify the transactions and to avoid
confusions between the two when auditing
such.
● Excess of Cash Advances must not be used as
payment for reimbursement. The aggregate
balance on the liquidation forms in a day must
be reflected on the deposit slip to coop. This is
to provide better trail of transactions when
auditing.
● Threshold should be set up for the amount of
acknowledgement receipts acceptable by the
treasurer in cases where the member cannot
provide an official receipt. This is to avoid
irresponsible purchases and possible fraud.