EXECUTIVE SUMMARY

A.

INTRODUCTION
The Inter-Country Adoption Board (ICAB) was created by virtue of
Republic Act (RA) No. 8043 or the Inter-Country Adoption Law on June 7, 1995
which serve as the Central Authority to ensure compliance with the Hague
Convention of 1993.
Pursuant to the authority of ICAB under Section 6 (a) of RA No. 8043 and
in accordance with the relevant provisions of RA No. 8552 otherwise known as
the Domestic Adoption Act of 1998 and the provisions of the Hague
Convention on Protection of Children and Cooperation in Respect of Intercountry Adoption as well as the United Nations Convention on the Rights of the
Child, ICAB promulgated the Implementing Rules and Regulations (IRR) of RA
No. 8043 on December 26, 1995 to govern the adoption of a Filipino child
abroad. The IRR was amended on March 22, 2004 and March 13, 2007.
The ICAB is an attached agency of the Department of Social Welfare and
Development (DSWD) mandated to be the central authority on matters relating to
the foreign adoption placement of Filipino children to applicants who are either
former Filipinos or foreigner permanently residing abroad and the policy-making
body for purposes of carrying out the provisions of the aforesaid law.
The mission of ICAB is to find permanent families abroad for Filipino
children when there is absolutely no possibility that they can be adopted by
families in the Philippines.
The Board is composed of Undersecretary Parisya H. Taradji of DSWD
who acts as Alternate Chairperson and six other members, five of whom are
appointed by the President for a non-renewable term of six years. The Boards
implementing arm is the Secretariat, which is headed by an Executive Director
where the Operations Division and the Administrative and Finance Divisions are
placed.
To carry out its function, the Board has a workforce of twenty four (24)
regular positions, six (6) temporary, ten (10) through placement agency and one
(1) hired as Memorandum of Agreement (MOA) or Contract of Service (COS).

B.

OPERATIONAL HIGHLIGHTS
The reported major accomplishments for the year are summarized on the
next page.

2012 Programs/Activities/Plans (PAPS)

Actual

MFO 1 Policy Formulation and Research

1. Number of policy guidelines formulated/resolution
prepared/approved
2. Approved USA based foreign adoption agencies (FAA)
3. Approved provisional accreditation as Liaison Service Agency

18
51
1

MFO 2 Standards Setting, Licensing and Accreditation

1. Worked with international partners
2. Monitored international/foreign FAA on compliance with
adoption laws in the Philippines
3. Granted to operate as LSA
4. Percentage of accredited Foreign Adoption Agencies (FAAs)
monitored for compliance to standards
5. Worked with Child Caring Agencies

107
55
6
100%
99

MFO 3 Inter-country Adoption Placement Services

C.

1. Number of adoption inquiries responded to

2. Number and percentage of adoption application assessed
within standard time
3. Number of applicants approved
4. Number of approved applicants matched & approved
5. Number and percentage of approved applicants who accepted
child proposals
6. Number of approved applicants entrusted with their PAC
7. Number of children cleared for inter-country adoption
8. Number and percentage of ICA cleared children matched
within timeline
9. Number of matched children accepted by PAPs
10. Number and percentage of children entrusted to PAPs
MFO 4 Capability Building and Advocacy

1,044
251

1. Dialogue and consultative sessions with Association of Child

Caring Agencies and other stakeholders
2. Briefing session with different embassies/immigration
3. Number of training attended by Board/ICPC/Secretariat

41

254
342
237
308
488
400
282
364

10
41

FINANCIAL HIGHLIGHTS
RA 10155, also known as the GAA of 2012, provided a total
appropriation of P25,381,000.00 and additional Sub-Allotment Release Order
(SARO) of P5,723,241.00 for the operations of the ICAB. The total allotment
received for 2012 amounted to P 31,104,241.00. Of this amount, total obligations
incurred amounted to P 30,545,896.15 thereby leaving a balance of P558,344.85.

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The ICABs assets, liabilities, government equity and sources and

application of funds for CY 2012 with comparative figures in CY 2011 are
presented as follows:

Particulars
A. Financial Condition
Assets
Liabilities
Government Equity
B.1 Sources of Fund
Income
Total Income
B.2 Application of
Funds
Personal Services
Maintenance &
Other Operating
Expenses
Financial Expenses
Total Expenses
Excess of Income
Over Expenses

D.

2012

2011

Increase/
(Decrease)

P39,850,841.33 P 41,038,564.94 (P 1,187,723.61)

15,750,749.85
15,037,850.98
(712,898.87)
24,100,091.48
26,000,713.96
1,900,622.48
31,564,051.80
31,564,051.80

28,412,647.42
28,412,647.42

3,151,404.38
3,151,404.38

12,194,561.17

7,896,535.62

4,298,025.55

19,223,843.77

17,567,053.03

1,656,790.74

50.00
31,418,454.94

100.00
25,463,688.65

(50.00)
5,954,766.29

P 145,596.86

P 2,948,958.77 (P 2,803,361.91)

SCOPE OF AUDIT
The audit covered the review of the accounts and operations of ICAB for
CY 2012. The objectives of the audit were to ascertain the fairness and reliability
of its financial position and the results of operations for the year then ended and to
determine whether it adhered to prescribed accounting and auditing laws, rules
and regulations.

E.

INDEPENDENT AUDITORS REPORT ON THE FINANCIAL

STATEMENTS
The Auditor rendered a qualified opinion on the fairness of the
presentation of the financial statements of ICAB for CY 2012, due to material
exceptions noted in audit, which are shown in Annex A and which are stated in
the Independent Auditors Report and discussed in detail in Part II of the report.

F.

SUMMARY OF SIGNIFICANT AUDIT OBSERVATIONS AND

RECOMMENDATIONS

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The details of the following observations and recommendations, among

others, are discussed in the Part II of the report. We have also discussed with
management officials in an exit conference on April 3, 2013, and their views and
comments were incorporated in the report, where appropriate.
1.

The Due from NGAs account stated at P3,906,048.34 remained dormant and
unliquidated for thirteen years due to non-submission of liquidation report by the
DPWH-NCR despite completion of the project, thus affecting the fair presentation
of the Building and Receivable accounts in the FSs.
We recommended that Management write a letter-request to the Director of
the DPWH-NCR for the immediate submission of the liquidation documents
and official turnover of the building to the ICAB in order to record the
construction and renovation cost of the building and credit the Due from
NGAs account for accurate and fair presentation in the FSs.

2.

Discrepancies totaling P251,649.19 were noted between the accounting records

and the Report on Physical Count of Inventories (RPCI) due to the non conduct of
periodic reconciliation of records and non-maintenance of the stock cards (SCs)
by the property unit as required under the New Government Accounting System.
Overstocking and improper segregation of inventories were also noted.
We recommended that Management instruct the Administrative Officer to,
among others: (i) observe the prescribed three-months requirement in the
procurement of supplies to avoid overstocking and non-utilization; (ii)
prepare and maintain SCs and always update entries in the SCs for the
purpose of monitoring the stock level; (iii) establish a reorder point as basis
in procuring supplies; (iv) ensure every item of stock/inventory will not be
comingled and are issued on a first in, first out basis to ensure fresh usable
items are always available; (v) ensure that the balances in the SCs are
regularly checked and reconciled with the balances in the ledger cards of the
Accounting Unit; and, (vi) dispose unused ink through public auction.

3.

The existence and accuracy of the PPE accounts valued at P19,079,031.27 could
not be ascertained due to non-conduct of physical count and the discrepancies
between the accounting and property records in the amount of P2,640,983.00
rendering the balances unreliable.
We recommended and Management agreed to: (i) create an Inventory
Committee to conduct physical count of the ICAB PPE in accordance with
Section 490, GAAM, Volume I and to prepare and submit an RPCPPE to
establish the accuracy and existence of the recorded balances of the PPE
accounts; and, (ii) require the Accountant and Administrative Officer to
exert efforts in
reconciling their respective records and effect the
corresponding adjustments and updating of both records.

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4.

Unserviceable properties were not reclassified to Other Assets account, thus

overstating and understating the PPE and Other Assets accounts. The failure to
dispose these assets that are already beyond repair resulted in their (i) continued
deterioration due to prolonged exposure to natural elements; (ii) use of
considerable space of the building due to accumulation; and, (iii) deprivation of
additional income for the government from the sale thereof.
We recommended and Management agreed that the Administrative Officer:
(i) prepare the Inventory and Inspection Report of Unserviceable Property
(IIRUP) and submit to the Accountant as basis to reclassify unserviceable
PPEs to Other Assets account; and (ii) create an Appraisal and Disposal
Committee to undertake appraisal and disposal of unserviceable properties.
5. Discrepancy of P3,553,848.96 between SL and GL balances of Other Payables
account under Fund 108 due to the absence of accounting records summarizing
the SL balances for Pre-adoptive Placement Cost (PPC) to support the controlling
GL account contrary to the MNGAS.
We recommended that the Accounting Unit prepare a schedule of SL
balances for PPC to support the controlling GL account balance and
thereafter reconcile the SL balance against the GL discrepancy noted by the
Audit Team.

6.

Unspent amount of fees totaling P5,700,238.18 collected from Prospective

Adoptive Parents (PAPs) for PPC remained unreturned to the PAPs contrary to
Section 29 of the Amended IRR of RA 8043.
We recommended that ICAB Management communicate with the concerned
PAPs to facilitate the return of the unspent amount or ask them to donate it
instead to the agency.

G.

STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT

RECOMMENDATIONS (PYARs)
The status of implementation of PYARs embodied in the CY 2011 Audit
Report is shown below and the details discussed in Part III.
STATUS
Fully Implemented
Partially Implemented
Not Implemented
Total

NUMBER
7
14
1
22

PERCENTAGE
31%
63%
6%
100%

We recommended that Management ensure full implementation of all

PYARs to improve the operational and financial efficiency of the ICAB.