EXECUTIVE SUMMARY OF THE
1999 ANNUAL AUDIT REPORT ON THE
ENVIRONMENTAL MANAGEMENT BUREAU
The Environmental Management Bureau (EMB) was created as a
staff bureau of the DENR by virtue of Executive Order No. 192 and is a merger of
two agencies: The National Environmental Protection Council and the National
Pollution Control Commission. However, Republic Act No. 8749, otherwise known as
the Philippine Clean Air Act of 1999 was passed providing among others that EMB
should be converted to a line bureau for a period of not more than two (2)
years, unless a separate comprehensive management agency is created.
The functions of the EMB are as follows:
Recommend possible legislation, policies and programs for
environmental management and pollution control;
Formulate environmental quality standards such as the
quality standards for water, air, land noise and radiation;
Recommend rules and regulations for environmental impact
assessments and provide technical assistance for their implementation and
Formulates rules and regulations for the proper disposition
of solid, toxic and hazardous waste;
Provide secretariat assistance to the Pollution
Assist the Secretary and the Regional Officers by providing
technical assistance in the implementation of environmental and pollution
control laws; and
Provide scientific assistance to the Regional Offices in
the conduct of environmental research programs.
During the year, EMB undertook the following major
accomplishments which were validated on random sampling basis only due to sudden
transfer of the Office to DENR compound upon the instruction of the DENR
Assessed the implementation of Executive Order No. 446
(Lead Gasoline Phase-Out).
Reviewed and finalized the Environmental Userís Fee
Guideline and Waste-Water Discharge Permit.
Issued 363 permits/clearances for chemicals subject to
Chemical Control Orders/Interim Status Permit and Letter of Intent.
Published the Philippine Inventory of Chemicals and
Chemical Substances (PICCS).
Assessed 31 existing dump sites/facilities.
Conducted national workshop/conference for the formulation
of solid waste management laws and legislation.
Conducted 60 site inspections and public hearings on
Environmental Compliance Certificate (ECC) cases.
Recommended the issuance of Environmental Compliance
Certificate (ECC) to 140 establishments.
Issued 49 notices of violation on ECC conditions.
For calendar year 1999, the Bureau received total allotment
P70,793,217.00 and P222,000.00 for fund 101
and fund 102 respectively. In addition, there were continuing appropriations of P7,904,493.00
for fund 101 and P41,304.00 for fund 102. Out of it, the Bureau
incurred total expenditures of P78,594.110.00 for fund 101 and P260,334.76
for fund 102, thereby leaving an unutilized allotment of P103,600.00
and P2,969.24 for fund 101 and fund 102, respectively.
SCOPE OF AUDIT
The audit covered the operations of the Environmental
Management Bureau for 1999. The audit was aimed to ascertain the propriety and
validity of disbursements selected through test audit scheme and reliability of
the accounts in the trial balance. It was also aimed to determine whether the
Bureau managed its resources and properties in accordance with pertinent rules
and regulations. Evaluation of the procedures being adopted at the Accounting
Section and validation of the reported accomplishments on random sampling basis
were conducted. Value for Money Audit (VFM) was also conducted and a separate
report shall be presented.
OPINION IN THE STATE AUDITORíS REPORT ON THE FINANCIAL
The Auditor rendered a disclaimer of opinion on the
presentation of the financial statements as the physical existence of the
recorded Supplies and Material and Equipment for fund 101 and fund 102 amounting
P13,201,987.65 and P248,549,294.49,
respectively, could not be established due to the failure of management to
submit physical inventory report since 1997 and alternative audit procedures
could not be applied in view of the failure of the Bureau to maintain equipment
ledger card, no perpetual inventory reports available and only 21% of the total
equipment were covered by memorandum receipts (MRs). Furthermore, management
failed to reconcile the discrepancies which existed between the general ledger
and subsidiary ledger on cash accounts (8-70-300, 8-70-370 and 8-70-500)
totaling to P89,748.16.
SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS
For the deficiencies cited above, the Auditor recommended
that Management should speed up the completion of inventory-taking and reconcile
it against accounting records for immediate submission to COA. Likewise, she
also recommended that MR should be issued to all pieces of equipment regardless
of the mode of its acquisition. Furthermore, she recommended that equipment
ledger card and perpetual inventory report should be maintained by the
Accounting Section and Property Section, respectively. Reconcile the
discrepancies on cash accounts that existed between the general ledger and
subsidiary ledger. In addition, the following are the other significant findings
The Bureau suffered losses due to unaccounted gasoline of
3,093.87 liters worth
P35,572.21. The officials, including
the In-Charge, Motor Pool Section and the drivers must be required to
explain/justify the unaccounted gasoline costing P35,572.21.
Failure to do so, hold them personally liable, in addition to administrative
and criminal charges as may be warranted by the circumstances, including the
withdrawal of the privilege to use government vehicles.
Unutilized Notice of Cash Allocation (NCA) at year-end
P926,579.06 were transferred into trust account
and deposited with an authorized government depository bank (AGDB), in
violation of National Budget Circular (NBC) No. 437 dated January 2, 1995
and Executive Order (EO) No. 338 dated May 17, 1996, respectively. Management
should stop transferring unutilized NCA into trust account and depositing
with an AGDB. Further, they should be required to adhere strictly to EO No.
338 and NBC No. 437 dated May 17, 1996 and January 2, 1995, respectively.
The Bureau could have saved by as much as
or more than 50 percent of the amount actually incurred, had it observed
restraint and economy in the conduct of trainings, workshops and meetings by
utilizing the DENR facilities and other government facilities instead. In as
much as the Bureau has no available space for the holding of such trainings
and workshops they can, however, utilize the training facilities of the
DENR-OSEC and other government facilities in order to reduce its training
expenses, particularly now that the country is suffering financial
Suspensions in audit have reduced from
in 1998 to P3,462,608.06 in 1999, or a 47% mark down.
However, out of P17,807,405.70 outstanding suspensions and P24,281,253.28
outstanding disallowances at the beginning of the year, only P5,819,530.35
and P566,376.01 were settled respectively during the year.
Management should enforce the immediate settlement of audit suspensions and
disallowances of P11,987,875.35 and P23,714,877.27,
The findings were discussed with Mr. Honorito Chaneco, Senior
Environmental Management Specialist, who was designated by the Director as his
representative in a meeting held for the purpose last February 7, 2000, in view
that EMB Director could not make it because he was then with the DENR Secretary.
However, we have discussed our findings with the concerned Chiefs of Offices
during audit and incorporated their comments in the report, where appropriate.
STATUS OF IMPLEMENTATION BY THE AUDITEE OF PRIOR YEARSí
Of the seven (7) recommendations for the 1998 operation, two
(2) were partially implemented, one (1) was not implemented. While for prior
years, four (4) recommendations remained unimplemented.
It was noticed that management, particularly the Program
Management Staff (PMS) conducted validation of accomplishment of the Bureau
during the year. Also, it was observed that the Environmental Impact Assessment
(EIA) Section submitted a more realistic target for its output to be achieved