Government auditors said the total value of the coconut harvesting trust fund, currently valued at 111.252 billion pesos, could still be adjusted pending an audit of other related assets.
In its special audit of assets levied on coconuts, the Board of Auditors (COA) said that the total audited assets of about $2023 billion at current exchange rates “still subject to further adjustments.”
Possible adjustments were discussed at the 7th meeting of the Trust Fund Management Committee (TFMC) on May 4, government auditors said.
“Total net audit adjustments of 2,626,074,699.53 pesos exclude the effects of subsequent events after the dates of each coconut company’s audited statement of financial position and other significant audit matters,” the COA said in a statement.
The COA report was signed by Melissa Grace B. Martinez, Head of Cluster 8 (Agriculture and Environment) and Machael R. Bakani of Cluster 4 (Industrial and Regional Development).
Matters excluded from the COA’s special audit include the conversion of 12 billion pesos of capital notes from a Philippine insurance company to United Coconut Planters Bank and the subsequent issuance of 12 billion pesos of special preference shares for PDIC on July 9, 2020.
The COA report added that the privatization or reacquisition from UCPB of Balmoral Resources Corp. with a net worth of 11.076 million pesos as of December 31, 2019 by the Villar Group of Companies in 2017, as well as the unconfirmed assets of United Coconut Planters International (UCPInt.) were also excluded from the special audit.
The COA stated that its special audit covered the accounting and inventory of assets levied on coconuts as of December 31, 2020, conducted by the President’s Commission on Good Government (PCGG), which were presented to government auditors on April 12, 2021.
A special audit by the COA required a “determination” of the completeness of the accounting and inventory of assets levied on coconuts, including the determination of the “reasonableness of the asset valuation”.
The special review also included monitoring the flow of funds collected for the collection of coconuts and compliance with relevant laws, rules and regulations for the retransfer of the Collection Assets for coconuts and / or the Fund to the Republic of the Philippines.
The COA says that only 52 companies out of 70 coconut tax companies identified by the PCGG were audited, while the remaining 18 companies were not covered due to lack of documents and records.
The 18 companies that were not covered by the special audit included United Coconut Planters Life Assurance Corp., UCPB General Insurance Company Inc., Cocoplans Inc., Ultra Security Services Inc., UCPInt., United Cocoa Plantation Inc. and Cocofed Marketing Corp. . . .
Other companies were Davao Coconut Planters Trading Inc., Zamboanga Coconut Planters Trading Inc., Leyte Coconut Planters Trading Inc., Northern Mindanao Planters Trading Inc., Visayan Coconut Planters Inc., Bicol Coconut Planters Trading Inc. and Tagalog Coconut Planters Inc.
The following companies were also excluded from the COA special audit: Balmoral Resources Corp., UCPB Properties Macaria Homes Corp., UCPB-CIIF Finance Development Corp. and UCPB-CIIF Foundation Inc.
The COA report also indicated that three other companies – United Coconut Oil Mills Inc., United Coconut Planters Management and the Philippine Coconut Growers Federation – were not audited because they were not included in PCGG’s accounting and inventory.
However, the COA noted that in its 1986 special audit report, UNICOM and UCPMI received appropriations from the CIIF of 544.2 million pesos and 10 million pesos, respectively.
“This report has been limited to documents provided by the PCGG, SEC, and audited coconut charging companies such as financial statements, general information sheets and other financial charts/reports/reports, responses to confirmation letters from individuals/agencies / companies. involved, as well as the results of an audit and evaluation conducted by a special audit team of the COA Technical Services [COA TSO-SAT]with reference to the 1986 COA Special Audit Report,” the COA said in a statement.
The COA says that various companies’ accounts of 134,481 million pesos were also verified and verified by the audit team due to the failure to provide financial statements and charts such as ledgers, bank statements and bank reconciliation reports.
“Based on the results of the audit, and after considering the implications of the aforementioned audit observations and other audit limitations and exceptions as noted above, the total amount of audit adjustments to be made was 2,626,074,699.53 pesos. [net] which represents an overstatement of total declared tax assets on coconuts of 113.878 billion pesos as of December 31, 2020,” the statement said.
“So the total audited tax on coconuts on an even date is only 111.252 billion pesos,” he added.