Audit Observation and Recommendations
Autor: Jeruz Roberts • February 24, 2017 • Essay • 9,619 Words (39 Pages) • 1,141 Views
AUDIT OBSERVATIONS AND RECOMMENDATIONS
Outstanding financial performance for the year 2014
1.0 The corporation attained an outstanding financial position as of December 31, 2014 resulting from the joint efforts of all Clark Development Corporation (CDC) units, wisdom of the Board of Directors and Bases Conversion and Development Authority (BCDA), vision by Management, cooperation of the workforce, and the confidence of the locators.
1.1 The corporation’s net income for the year was ₱554,464,404.00 or 67 percent higher than last year’s ₱331,736,917.00, the highest income generated during the last four years, as shown below:
2014 | 2013 | 2012 | 2011 | |
Revenue Income | ₱ 1,389,053,651 | ₱ 1,212,722,982 | ₱ 1,119,043,891 | ₱ 984,360,676 |
Other Income | 91,365,323 | 91,275,142 | 62,886,687 | 158,882,276 |
Total | 1,480,418,974 | 1,303,998,124 | 1,181,930,578 | 1,143,242,952 |
Total Expenses | 925,954,570 | 972,261,207 | 994,647,711 | 899,970,033 |
Net Income | ₱ 554,464,404 | ₱ 331,736,917 | ₱ 187,282,867 | ₱ 243,272,919 |
Table 1- CDC Net Income 2011-2014
1.2 The record breaking results of operations during the year was achieved by the following:
- Full recognition of leases after the grace period; lease escalations, and incremental revenue shares. Lease rate of contracts are now more reflective of the actual value of lands in Clark;
- Continuous implementation of cost-cutting measures on operating expenses;
- Collection of transfer fees;
- Legal actions initiated for the collection of arrears/accrued unpaid lease rentals;
- Reduction of CDC operating cash funds to the required minimum and investing the rest in one investment basket;
- Realized forex gain of ₱3.5Million;
- Retirement, termination, no replacement and freeze hiring policy of CDC’s manpower complement resulting in a substantial reduction of the number of employees from 730 as of 2013 to 660 as of end of 2014; and
- Diligent monitoring and rationalization in the availment of the health care benefits and overtime pay.
1.3 Also, the year-end cash balance of ₱1,959,310,990.00 was almost twice the 2012 ending cash level of ₱1.099 Billion, net of BCDA funding of ₱202,000,000.00. This was after the payment of cash dividends, infrastructure projects and retirement pay.
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