REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT
Commonwealth Avenue, Queon C!t"
State Au#!to$%& Re'o$t on the F!nan(!al Statement&
The Board of Directors
Philippine Postal Corporation
Plaza Lawton, Manila
We have audited the accompanying alance sheet of the Philippine Postal
Corporation !PPC" as of Decemer #$, $%%& and the related statements of income
and cash flows for the year then ended pursuant to 'ection (, )rticle *+,D, of the
Philippine Constitution and 'ection -# of Presidential Decree .o/ $--0/ These
financial statements are the responsiility of the Corporation1s management/ 2ur
responsiility is to e3press an opinion on these financial statements ased on our
audit/
We conduct our audit in accordance with generally accepted auditing
standards/ Those standards re4uire that we plan and perform the audit to otain
reasonale assurance that the financial statements are free of material
misstatements/ 2ur audit included e3amining on a test evidence supporting the
amounts and disclosures in the financial statements/ We also included assessing
the accounting principles used and significant estimates made y management as
well as evaluating the overall financial statements presentation/ We elieve that
our audit provides a reasonale asis for our opinion/
The agency1s accounting system is inade4uate such that the alances
reflected in the financial statements cannot e considered fairly stated/ )s noted in
5inding .o/ $, Cash in an6 amounting to P07%,008,#0# is not reconciled with
alances per an6 resulting in an unreconciled difference of P$$-,887,(90/ *n
5inding .o/ (, #&: or P$(-,0%&,(70 out of P($-,0%&,(&0 short term investment
cannot e accounted for due to failure to reconcile the accounts/ *n 5inding .o/ #,
collection of accounts Due from Philippine Postal Ban6 in the amount of
P$9,($&,#&( is doutful ecause no corresponding Due to PPC account was
recorded in the oo6s of PP'B/
)s discussed in 5inding .os/ -, 0 ; 7, validity of )ccounts <eceivale from
5oreign Postal )dministration, from employees and other government agencies
amounting to P$,7&#,8##,-$#, P$#,($7,&%8, and P(,9&%,%$8 respectively, are
doutful due to non,sumission of supporting documents to sustantiate the
corrections of the amount involved, non,maintenance of susidiary ledgers and
poor coordination with other agencies=offices/ *n 5inding .o/ $8, $$ and $#, 5i3ed
)ssets, Leasing Cost, *nventories,>asoline and 2il, 'upplies and Materials, 'tamps
and Money 2rder 5orms cannot e considered reliale ecause the agency failed
to conduct inventory ta6ing, sumit reports and necessary documents and reconcile
alances per oo6s and actual inventory/
*n our opinion, due to the materiality of the effects of the matters discussed
in the preceding paragraphs, the financial statements referred to aove do not
present fairly, the financial position of the Philippine Postal Corporation as of
Decemer #$, $%%& and the results of its operations and cash flows for the year
ended in conformity with the generally accepted accounting principles/
COMMISSION ON AUDIT
)"*

!2riginal 'igned"
ATT+, ELENITA DE -ERA . LUMON/SOD
'tate )uditor *?
Corporate )uditor
March #$, $%%%
2