THE total value of the coconut levy trust fund—currently valued at P111.252 billion—could still be adjusted pending audit of other related assets, state auditors said.
In its special audit of the coconut levy assets, the Commission on Audit (COA) said the total audited amount of the assets of about $2.023 billion at current exchange rates is “still subject to further adjustments.”
The possible adjustments, the state auditors said were discussed during the 7th Trust Fund Management Committee (TFMC) meeting last May 4.
“The total net audit adjustments of P2,626,074,699.53 excluded the effects of subsequent events after the dates of the audited Statement of Financial Position of each coco levy company and other significant audit matters,” the COA said.
The COA report was signed by Melissa Grace B. Martines, officer-in-charge of Cluster 8 (Agriculture and Environment) and Mcihael R. Bacani of Cluster 4 (Industrial and Area Development).
The matters excluded from the COA’s special audit include the conversion of the P12-billion capital notes of the Philippine Deposit Insurance in United Coconut Planters Bank and the subsequent issuance of P12-billion special preferred shares to the PDIC on July 9, 2020.
The COA report added that the privatization or reacquisition from UCPB of Balmoral Resources Corp. with a net equity of P11.076 million as of December 31, 2019 by the Villar Group of Companies in 2017 and the unverified assets of United Coconut Planters International (UCPInt.) were also excluded from the special audit.
The COA said its special audit covered the Accounting and Inventory of Coconut Levy Assets as of December 31, 2020, by the Presidential Commission on Good Government (PCGG), which were submitted to state auditors last April 12, 2021.
The special audit by the COA sought the “determination” of the completeness of the accounting and inventory of the coconut levy assets, including the establishment of the “reasonableness of the asset valuation.”
The special audit also involved the tracing of the flow of the coconut levy funds and compliance with pertinent laws, rules and regulations on the reconveyance of the Coconut Levy Assets and/or Fund to the Republic of the Philippines.
The COA said only 52 companies out of the 70 coconut levy 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 were 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.
The 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 COA’s special audit did not also cover the following companies: Balmoral Resources Corp., UCPB Properties Macaria Homes Corp., UCPB-CIIF Finance Development Corp. and UCPB-CIIF Foundation Inc.
The COA report also pointed out that three additional companies – United Coconut Oil Mills Inc., United Coconut Planters Management and Philippine Coconut Producers Federation—were not audited since they were not included in the PCGG Accounting and Inventory.
However, the COA noted that in its 1986 special audit report the UNICOM and UCPMI received allocation from the CIIF amounting to P544.2 million and P10 million, respectively.
“This Report was limited only to the documents provided by the PCGG, SEC and the coco levy companies covered by the audit such as Financial Statements, General Information Sheets and other financial schedules/reports/records, confirmations letter replies from individuals/agencies/companies involved and the results of inspection and appraisal conducted by the COA Technical Services Office Special Audit Team [COA TSO-SAT], with due reference to the 1986 COA Special Audit Report,” COA said.
The COA said P134.481-million worth of accounts of various companies were also note validated and verified by the audit team due to non-submission of financial reports and schedules such as ledgers, bank statements, and bank reconciliation statements.
“Based on the results of audit and after considering the effects of the foregoing audit observations and other audit limitations and exclusions as above-mentioned, the total audit adjustments to be made amounted to P2,626,074,699.53 [net] representing an overstatement in the total reported coconut levy assets of P113.878 billion as of December 31, 2020,” it said.
“Thus, the total audited amount of coconut levy assets as of even date is only P111.252 billion,” it added.