EXECUTIVE SUMMARY. A. Introduction

Transcription

1 EXECUTIVE SUMMARY A. Introduction The Games and Amusements Board (GAB or the Board ) was created by virtue of Executive Order (E.O.) No. 392 series of 1951, amending E.O. No. 120 and Republic Act (R.A.) No. 309, series of It is under the immediate supervision and control of the Executive Secretary and headed by a chairman and two members who are appointed by the President of the Philippines. Initially, GAB was vested with supervisory authority over only three professional sports, namely; Jai Alai, Boxing and Wrestling, and Racing. In 1974, however, the regulatory and supervisory authority and functions of GAB over horse racing, except for the betting aspect thereof, were transferred to the Philippine Racing Commission. Then in 1976, with the organization of the Professional Basketball Association, Presidential Decree (P.D.) No. 871 was issued expanding the regulatory and supervisory powers and functions of GAB over professional sports. These are basketball, boxing, wrestling, betting aspect of horse racing, cycling, golf, billiards, and all sports activities where the athletes play for pay. Moreover, on January 17, 1992, the President issued Administrative Order (A.O.) No. 262, later amended by A.O. No. 222 issued on October 9, 1995, constituting an Anti-Illegal Gambling Unit in GAB and detailed personnel of various law-enforcement agencies whose purpose is to combat and eradicate illegal gambling in professional sports. Also, the enactment of the Local Autonomy Code (R.A.7160) presaged the issuance of E.O. No. 149 dated December 28, 1993, streamlining certain offices under the Office of the President, which transferred to GAB the remnants of the Philippine Gamefowl Commission pending its final abolition. Under this Order, GAB assumed the functional gray area of regulating and supervising international cockfight derbies in the meantime that the jurisdictional situs for the performance of the function has not yet been clarified. On December 16, 2011, in a decision promulgated by the Court of Appeals in August 2011, the authority of the GAB to supervise and regulate Jai Alai was decided in its favor against Meridien Vista Gaming Corporation. Subsequently, this resumed GAB s supervisory and regulatory power over the Jai Alai operations in the country. As a result, GAB had issued a new total of 31 licenses and 74 permits for Jai Alai for Also, the number of betting/events regulated and supervised for Jai Alai operations reached 459 for As of December 31, 2012, GAB has 150 filled-up permanent manpower complement. i

2 B. Financial Highlights The comparative financial condition, results of operations and sources and utilization of funds of the Agency are as follows: Particulars Increase/ Financial Position Assets RA books P25,287, P 18,845, P 6,441, NG 273, , Liabilities RA books 7,845, ,433, , NG 273, , Equity RA books 17,441, ,411, ,029, NG Results of Operations Income RA books 76,748, ,199, ,549, NG 6,784, ,575, ,208,315,98 Expenses RA books 73,256, ,118, ,137, Excess of Income over 3,492, ,080, ,411, Expenses Sources and Utilization of Funds Appropriations 65,990, ,077, ,913, Allotments 76,613, ,566, ,046, Continuing 4, , (124,802.25) Appropriations Obligations Incurred 76,578, ,562, ,016, Unexpended Balance P 34, P 4, P 30, The Statement of Allotments, Obligations and Balances as of December 31, 2012 is shown in Annex A. C. Operational Highlights A comparative analysis of the agency s major accomplishments for CYs 2012 and 2011 is presented below: Particulars Increase/ Sports/games and betting events regulated and supervised Illegal bookie joints and other illegal forms of organized gambling in professional sports/games detected and prevented 28,775 25,962 2, ,014 (809) ii

3 Particulars Increase/ Licenses and permits issued 5,091 4, D. Scope of Audit An audit was made on the accounts and operations of GAB for CY 2012 in order to determine propriety of disbursements and collections, reliability of the financial reports, adequacy of accounting records and to ascertain compliance with laws, rules and regulations. E. Auditor s Report on the Financial Statements The Auditor rendered a qualified opinion on the fairness of presentation of the financial statements of GAB as of December 31, 2012 due to the doubtful validity of Other Receivables account of P7,790, F. Observations and Recommendations The following are the audit observations and corresponding recommendations, which were discussed with Management officials concerned, details of which are further discussed in the report. Management views and comments were incorporated in the report, where appropriate. 1. The validity of Other Receivables account of P7,790, could not be ascertained due to the discrepancy of P5,276, between the balance per RA books and the result of confirmation and the presence of dormant accounts of P208, and P273, that remained for more than five years in the RA and NG books, respectively, contrary to COA Resolution No dated April 23, 1980 and COA Circular No dated February 5, We recommended and Management agreed to strictly monitor the case with the Office of the Solicitor General for its immediate resolution on the accuracy of the computation of the billing to PBA and to request an authority from COA for the write-off of the dormant accounts amounting to P481, following the guidelines set forth under COA Circular No dated February 5, If authority for write-off is approved, require the Accountant to effect the corresponding adjusting entry to drop the accounts from the books. 2. The absence of a more authoritative specific guidelines/policies for the accounting and monitoring of unclaimed dividend resulted to non-collection, non-recording and non-remittance to National Treasury of more than P33,950, and undetermined balance of previous years unclaimed iii

4 dividends from the Manila Jockey Club Inc. (MJCI). Likewise, the noninclusion in the Monthly Report on the Distribution of Wager Funds of the actual claimed and unclaimed dividends in every racing events, pursuant to Section 11 of R.A. No. 09, allowed MJCI to claim it as private/corporate income. We recommended and Management agreed to: a.) prioritize the request for a Declaratory Relief from the Department of Justice (DOJ), for an authoritative opinion on the nature of the unclaimed dividends, if public or private funds, to compel MJCI to remit it to National Treasury; b) coordinate with proper government agencies on the promulgation of monitoring guidelines and policies for the unclaimed dividends for their eventual collection recording in the books of accounts and remittance to the National Treasury if opined as public by DOJ; c) require strictly MJCI and Philippine Racing Club Inc. (PRCI) to submit immediately the report of previous year s forfeited unclaimed dividends; d) require the Chief of Sports and Games Regulation Office (SGRO) to perform its audit functions and specify in their Monthly Report on Distribution of Wager Funds the actual claimed and unclaimed dividends on each racing events; e) enforce the Racing Clubs to remit the remaining balance of the unclaimed dividends and henceforth, all unclaimed dividends of future racing events to National Treasury; f) require the submission to COA of all disbursement vouchers/withdrawals for review and evaluation; and g) require MJCI to submit evidence of payment of taxes to the Bureau of Internal Revenue for the previous year s unclaimed dividends which it claimed as corporate earnings. 3. The inaction of Management to enforce the submission of the required documents from the Promoters for the monitoring of the three per cent share from the sale of tickets pursuant to Articles 4 and 63 of the Rules and Regulations governing Professional Boxing (RRPB) deprived the agency of additional income from collection to augment the funds needed to finance its operation. We recommended and Management agreed to strictly require the Promoters to submit the following documents: Before giving permit - the printer s affidavit containing the number, classification and prices of tickets printed; Before the contest - a Report on the number and prices of patron and sponsor; and After the contest - the unsold tickets of the contest as basis for the computation of three per cent share of the Board. Henceforth, Management is required to compute and collect the three per cent share from the Promoters. If the Promoters failed to comply with the iv

5 submission of the aforementioned documents, an application to hold a contest filed by delinquent Promoters shall not be granted nor given due course. 4. Deviation from the usual procedure in the granting to employees of authority to travel, resulted to excessive local travels of an employee to the hometown province totaling P111, which purpose of travels and attendance to meetings were not one of the urgent and extremely necessary assignments allowed under Section 7 of E.O. No. 248 A dated August 14, Such travels were determined to be unnecessary and improper spending not only of government funds as well as man-hours lost for extended travels contrary to Section 2 of COA Circular No dated March 29, We recommended that Management adopt the regular practice of granting authority to lower ranked employees, who are not directly involved in the boxing and mixed martial arts activities in the region, only upon the favorable recommendation of the Chief of SGRO and consider the beneficial effects to the agency. 5. Local travels amounting to P110, were not properly supported with Travel Orders and Certificate of Appearance required under Section a. of COA Circular No dated April 19, 1996 as amended by Sections and of COA Circular No dated June 14, 2012 to determine the urgency and necessity of travel pursuant to Section 2 of E.O. No. 248 dated May 29, We recommended and Management agreed to strictly comply with the submission of the required supporting documents for local travels, plan local travels to save costs and limit travels to home province to efficiently and effectively serve the government. 6. The Cashier failed to issue official receipts (ORs) for performance bonds of private entities contrary to Section 69 of the Government Accounting and Auditing Manual (GAAM), Volume 1 and Section 7 of the General Provisions of R.A. No , the GAA for FY We recommended and Management agreed to issue ORs and refrain from issuing acknowledgement receipts for performance bonds collection. G. Implementation of Prior Year s Audit Recommendations Of the five audit recommendations contained in the 2011 Annual Audit Report, one was implemented, one was partially implemented and three were not implemented. The details are presented in Part III of this report. v