EXECUTIVE SUMMARY OF THE
The Home Development Mutual Fund (HDMF), was created on June 11, 1978 by virtue of Presidential Decree No. 1530 primarily to address the nationís basic concerns, generation of savings and the provision of shelter for the members. The HDMF is popularly known as Pag-IBIG Fund, an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno. The Fund initiated its decentralization in the last quarter of 1988 as a result of the increasing requirements of the Regional Fund members. The decentralization was completed in early 1989 with 12 regional branches and ten extension offices nationwide.
Due to the increasing demand on the Fundís accessibility to members in Metro Manila, the operations in the National Capital Region (NCR) was deconcentrated on December 7, 1992, under Special Order 92-215, creating the North Sector covering Cubao, EDSA/East, Ortigas and Kalookan and the South Sector comprising Baclaran, Malate, Intramuros, Makati I and Makati II accounts.
Special Order No. 97-132 dated March 24, 1997, was issued to efficiently and effectively meet Pag-IBIG Fundís increasing commitments both as a provident savings fund and a housing fund. The Fund was divided into Provident Fund Operations and Housing Fund Operations, effective July 1, 1997. The HDMF Ė Ortigas Branch belongs to Provident Fund Operations Group and managed by Ms. Edna D. Ancheta.
The HDMF - Ortigas Branch aims primarily to service all private and government employees within the areas of Pasig City, Mandaluyong City, Pateros and San Juan.
The Branchís total assets increased in CY 2000 by P 794.32 M due to an increase in Due to/from Head Office and Loans Receivable by P 577.18 M and P 227.91 M, respectively. Membersí Contributions increased by P 759.86 M. The Branchís realized a net income of P 14.44 M or 31.37% lower than last yearís P 21.04 M which can be attributed to the decrease in penalties and other charges of P 2 M and total expenditures increased by P19.89 M or 46.90% as compared to previous yearís P 6.38 M.
SCOPE OF AUDIT
The audit included, among others, the verification of accounts and transactions to ascertain the fairness and reliability of the Branchís financial statements. A compliance audit was also conducted to check the legality and propriety of transactions selected through sampling.
STATE AUDITORíS REPORT ON THE FINANCIAL STATEMENTS
The auditor rendered a qualified opinion on the fairness of presentation of the financial statements of HDMF - Ortigas Branch due to variances between the general ledger and subsidiary ledger balances of Loans Receivable - Multi-Purpose Loan and Membersí Contributions as of December 31, 2000 amounting to P 103,470,681.71 and P(50,250,576.52), respectively.
SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS
For the exception cited above, the Auditor recommended the continuous reconciliation of the differences between the general ledger and subsidiary ledger balances of the affected accounts, establishing a GL/SL reconciliation monitoring scheme to effectively monitor the reconciliation process and to fully document the progress made and reclassification of currently maturing Membersí Contributions to Current Liabilities Ė Membersí Contributions.
Other findings and recommendations are as follows:
Reclassify the estimated P134,479,035.12 maturing Members' Contributions to Members' Contributions - Current under the Current Liabilities to recognize the MC's maturing in CY 2001.
Reclassify/adjust the MPL negative balances/overpayments to AP - Borrowers to reflect the correct balances of the affected accounts as of year-end.
Adjust the balances of both funds by debiting the amount of P133,408.10 to Cash in Bank - Claims Fund and crediting the same amount to Cash in Bank - MPL Fund.
Prepare a monthly summary of MPL refunds and inform the bank to debit and/or credit the appropriate Cash in Bank accounts.
Monitor and analyze individual accounts to ensure that the correct balance of the Accounts Receivable - Borrowers - STL is presented in the financial statements.
Send demand letters to concerned borrowers to settle their accounts.
Request appropriate authorization from Head Office to write-off from the books of the Branch receivables from deceased member-borrowers.
Coordinate with the Head Office on the set-up of reasonable allowance for probable loss to conform with SFAS No. 3, paragraph 5.
The above findings and recommendations contained in the report were discussed with concerned officials of the Branch in an exit conference held on March 21, 2000. Managementís views and reactions were considered in the report, where appropriate.
STATUS OF IMPLEMENTATION BY THE BRANCH OF LAST YEARSí AUDIT RECOMMENDATIONS
Of the 8 audit recommendations embodied in the 1999 Annual Audit Report, four were fully implemented, three were partially implemented and one was referred to Head Office for action.