EXECUTIVE SUMMARY

A. Introduction

The National Book Development Board (NBDB) was created by Republic Act
(RA) No. 8047, known as the Book Publishing Industry Development Act, which was
enacted on June 7, 1995.

It is mandated to formulate, adopt and implement a National Book Policy and

National Book Development Plan that will serve as the basis for fostering the progressive
growth and viability of the country’s book industry.

Its mission is to promote the continuing development of the book publishing

industry, with the active participation of the private sector, to ensure an adequate supply
of affordable, quality-produced books for both domestic and foreign markets.

The Board is governed by 11 members currently headed by Chairperson Dante

Francis Mariano Ang II. It has a permanent Secretariat under Executive Director Charisse
Aquino-Tugade, who is responsible for the day-to-day management and direction of the
affairs and operations of the NBDB. The Governing Board of NBDB is composed of the
following officials:

Name Position/Designation Mother Unit/Agency

Dante Francis Mariano Ang II Chairman Private Sector, Ex-officio
Annalyn Macam Sevilla Vice Chairman Under Secretary of
Department of Education
(DepEd), Ex-officio
Ronald Lapat Adamat Member Commissioner of
Commission on Higher
Education (CHED), Ex-
officio
Arsenio De Jesus Lizaso Member Chairman of NCCA, Ex-
officio
Josette Talamera Biyo Member Director of Department of
Science and Technology
(DOST), Ex-officio
Ceferino Samson Rodolfo Member Under Secretary of
Department of Trade and
Industry (DTI), Ex-officio
Yvonne Fuentes De Mesa Member Private Sector, Ex-officio
(August to December 2021)
Mary Ann Arcedo Ordinario Member Private Sector, Ex-officio
Teresita Quizo Adriano Member Private Sector, Ex-officio
Jose Mirasol De Member Private Sector, Ex-officio
Mesa(deceased) (January to June 2021)
Maureen Alexandra Ramos Member Private Sector, Ex-officio
Padilla

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 As of December 31, 2021, the NBDB had a total personnel complement of 114, of
which 37 have permanent status, two are under Contract of Service and 75 Job Orders.

B. Operational Highlights

The reported major accomplishments of the NBDB for Calendar Year (CY) 2021
against its set targets are shown below:

Actual
Programs/Projects/Activities Targets Variance Remarks
Accomplishments
Local Book Publishing Industry Development Program
Outcome Indicators
1. Percentage increase in the number of 5 143 138
manuscripts/titles by NBDB-registered
authors
2. Percentage increase in the number of titles 2 24 22
published by NBDB-registered
authors/publishers
3. Percentage increase in the gross revenue of 5 117 112 The target increase in
NBDB-registered publishers gross revenue was
already accomplished
in the third quarter
(Q3).
Output Indicators (see Annex A)
1. Number of capacity-building and trade 21 145 124 Q1: Conducted one
promotion initiatives undertaken capacity building and
trade promotion
initiative;
Q2: Conducted 14
capacity building and
trade promotion
initiatives;
Q3: Conducted 64
capacity building and
trade promotion
initiatives; Q4: 66
capacity building and
trade promotion
initiatives
2. Number of awards, grants and incentives 10 40 30 Q1: None Q2: One
given TADFI –
Bloombooks Inc.,
Coated Paper Board
(Foldcote cal 10 in
sheets) 190 GSM,
584x889mm;
Q3: Awarded three
awards for the
National Children's
Book Awards; One
Income Tax Holiday

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 Actual
Programs/Projects/Activities Targets Variance Remarks
Accomplishments
Incentive; Four
grantees for the
Professional
Textbook Subsidy;
and 14 grantees for
The Great Tradebook
Offset; Q4: Two
grantees for the
Creative Nation
Grant; Awarded 15
awards for the
Gintong Aklat
Awards
3. Number of policies developed, researches 7 72 65 Q1: Excerptional:
conducted, information systems developed Excerpts from
and/or managed, and information Exceptional Books:
campaigns conducted The Legacy of Abad
Santos, El
Periodismo, The
Betrayal, Tatlong
Dula,
Cosmopolitanism;
Q2: Targets for Q2
were cancelled due to
COVID-19
Pandemic; Q3: 41
policies and
information systems
developed and
information
campaigns
conducted; Q4: 30
policies and
information systems
developed and
information
campaigns conducted

C. Financial Highlights

The NBDB has total adjusted appropriations of P114,425,846.91 consisting of

P93,795,542.00 current and P20,630,304.91continuing appropriations under RA No.
11518, the General Appropriations Act (GAA) for Fiscal Year (FY) 2021. Out of the total
adjusted appropriations, P97,371,846.91 of allotments was received, of which
P96,331,835.28 was obligated, thereby leaving an unobligated balance of P1,040,011.63,
as shown on the next page:

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 Obligations Unobligated
Particulars Appropriations Allotments
Incurred Balance
A. Current Appropriations
1. Agency-Specific Budget
Personnel Services (PS) P 25,113,000.00 P 25,113,000.00 P 25,107,439.78 P 5,560.22
Maintenance and Other 58,377,000.00 58,377,000.00 57,457,627.15 919,372.85
Operating Expenses
(MOOE)
Capital Outlays (CO) 3,720,000.00 2,600,000.00 2,598,900.00 1,100.00
Subtotal 87,210,000.00 86,090,000.00 85,163,966.93 926,033.07
2. Automatic Appropriations
Retirement and Life
Insurance Premium
PS 2,337,976.00 2,337,976.00 2,301,601.78 36,374.22
Subtotal 2,337,976.00 2,337,976.00 2,301,601.78 36,374.22
3. Special Purpose Funds
Miscellaneous
Personnel Benefits Fund
PS 4,247,566.00 4,247,566.00 4,245,175.84 2,390.16
Subtotal 4,247,566.00 4,247,566.00 4,245,175.84 2,390.16
Total Current Appropriations 93,795,542.00 92,675,542.00 91,710,744.55 964,797.45
B. Continuing Appropriations
1. Agency-Specific Budget
PS 72,943.95 72,943.95 71,903.16 1,040.79
MOOE 18,999,081.16 3,965,081.16 3,933,518.90 31,562.26
CO 942,279.80 42,279.80 - 42,279.80
Subtotal 20,014,304.91 4,080,304.91 4,005,422.06 74,882.85
2. Special Purpose Funds
PS 616,000.00 616,000.00 615,668.67 331.33
Subtotal 616,000.00 616,000.00 615,668.67 331.33
Total Continuing Appropriations 20,630,304.91 4,696,304.91 4,621,090.73 75,214.18
Grand Total P114,425,846.91 P97,371,846.91 P96,331,835.28 P1,040,011.63

The NBDB’s financial position and financial performance for CY 2021 with
comparative figures for CY 2020 are presented below:

Particulars 2021 2020 Increase/(Decrease)

Financial Position
Assets P 150,980,804.87 P 145,795,290.02 P 5,185,514.85
Liabilities 524,163.56 990,055.08 (465,891.53)
Net Asset/Equity 150,456,641.32 144,805,234.94 5,651,406.38
Financial Performance
Revenue 4,931,857.61 5,486,863.51 (555,005.90)
Less: Current Operating Expenses
PS 32,336,880.11 25,150,922.52 7,185,957.59
MOOE 44,354,048.88 11,659,154.19 32,694,894.69
Non-Cash Expenses 560,865.78 779,261.16 (218,395.38)
Total 77,251,794.77 37,589,337.87 39,662,456.90
Surplus (Deficit) from (72,319,937.16) (32,102,474.36) (40,217,462.80)
Current Operating Expenses
Net Financial 82,821,090.58 39,418,388.45 43,402,702.13
Assistance/Subsidy

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 Particulars 2021 2020 Increase/(Decrease)

Surplus (Deficit) for the P 10,501,153.42 P 7,315,914.09 P3,185,239.33

period

D. Scope and Objectives of Audit

The audit covered the review of the accounts and operations of the NBDB for the
year ended December 31, 2021. The audit was conducted to: (a) ascertain the level of
assurance that may be placed on Management’s assertions on the financial statements;
(b) determine the extent of compliance with applicable laws, rules, and regulation; and
(c) determine the extent of implementations of prior years’ audit recommendations.

E. Independent Auditor’s Report on the Financial Statements

The Audit Team rendered an unmodified opinion on the fairness of the

presentation of the financial statements of the NBDB for CY 2021.

F. Summary of Significant Audit Observations and Recommendations

Below are the significant audit observations with the corresponding

recommendations which are discussed in detail in Part II of this report.

1. No Programs, Projects, and Activities (PPAs) were conducted by the NBDB

related to its mandate of monitoring and conducting an annual evaluation of the
progress in the shift of functions from the DepEd to the private sector on the
textbook provision program which should have been done in the last 26 years,
contrary to Section 10 of RA No. 8047 and Rule VII, Section 1 (c) of the
Implementing Rules and Regulations (IRRs).

Similarly, to date, the required National Book Policy and National Development
Plan that will serve as a roadmap to effectively discharge its mandate under RA
No. 8047 were not formulated by the Agency. Nonetheless, PPAs that are aligned
with the basic objectives and purposes of said law were conducted during the
year.

On the other hand, on aspects relative to the registration of entities engaged in

local book publishing and provision of incentive and on assisting the DepEd, in
prescribing the guidelines, rules, and regulations in preparing the minimum
learning competencies and/or prototypes and other specifications for books
required by public elementary and secondary schools, the NBDB had sufficiently
performed its responsibilities related thereto, as reported in its Calendar Year
(CY) 2021 Accomplishment Report, Enhanced quarterly report of the publicized
Government Programs/Projects/Activities (GPPAs), Budget Accountability
Report (BAR) No. 1 - Quarterly Physical Report of Operation (QPRO), posted
procurement opportunities, and the Procurement Monitoring Report (PMR).
(Observation No. 2)

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 We recommended that Management:

a) conduct monitoring and annual evaluation of the progress in the shift of

functions from the DepEd to the private sector on the textbook
provision program (publication and distribution);

b) formulate and adopt a clear National Book Policy and National Book
Development Plan reduced in writing to ensure the development and
viability of the book publishing industry;

c) continue accomplishing the PPAs related to its mandate under RA No.

8047, particularly on the formulation and implementation of a National
Book Policy and National Development Book Plan, registration of
entities engaged in local publishing and provision of incentives; and

d) maintain the assistance provided to DepEd in prescribing the

guidelines, rules, and regulations in preparing the minimum learning
competencies and/or prototypes and other specifications for books
required by public elementary and secondary schools and submit a
quarterly status report and a copy of report on accomplished PPAs
related to this.

2. The copies of the MOA between NBDB and Partner-Implementers, submitted to

the Audit Team, are either undated, unsigned, or not notarized which affects the
determination of its effectivity date and period covered by the MOA. Moreover,
any penalties and sanctions in case of loss/damage to books and total costs of the
books to be delivered to Book Nook Sites were not stated in the MOA.

Further, the ocular inspections conducted by the Audit Team in Mindanao showed
that four out of six Book Nook sites visited are compliant with the most
significant requirements outlined in the MOA between the NBDB and the
Partner-Implementers, while the other two sites are partially compliant only due
to lack of furniture/shelves for book storage and incomplete inventory-taking and
recording of books received. Moreover, during the actual count of books using
random sampling, missing items and discrepancies in the distribution list were
noted. (Observation No. 3)

We recommended that Management:

a) clarify the effectivity date of the MOA entered into with all the Partner-
Implementers to establish the period of implementation of the Book
Nook Program and have it signed by the Accountant and notarized;

b) consider including provisions in the MOA imposing penalties and

sanctions in case of loss/damage to the books and consider indicating

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 the total costs of books delivered to each site to establish accountability
on the part of Partner-Implementers;

c) submit updated monitoring report on the compliance of Book Nook

sites with their obligations prescribed in the MOA including the status
of the provision of bookshelves by Book Nook Koronadal and the
proper inventory-taking and recording/tracking of books by Book Nook
Koronadal and Book Nook Lake Sebu;

d) ensure complete delivery of Book Nook packages consisting of Filipino-

authored quality books and other reading materials in all Book Nook
sites and provide updates on the status of the three undelivered titles in
Book Nook RMMC-General Santos; and

e) reconcile the discrepancies found in the distribution list of the first

three boxes delivered to each site with the books actually delivered.

3. The a) non-preparation/submission of PMR; and b) non-submission/delays from

two to 42 days in the submission of contracts, together with the supporting
documents for CY 2021 transactions, precluded the Audit Team from the timely
validation and complete evaluation of NBDB’s compliance with Section 3 and 12
of RA No. 9184 and its revised IRR on transparency, competitiveness and
accountability and Section 3.1.1. COA Circular No. 2009-001 dated February 12,
2009. (Observation No. 4)

We recommended that Management:

a) compel the BAC to submit to the Office of the Auditor the PMR and the
procurement contracts entered into by the Agency, together with the
required supporting documents, within the prescribed timelines;

b) explain/justify the non-submission of these reports and non-compliance

thereof as well as with the posting requirement under RA No. 9184 and
its IRR;

c) review the Agency’s internal processes related to procurement in order

to further improve its service delivery and its compliance with the
existing timeline requirements; and

d) ensure the subsequent submission of the required documents to the

Office of the Auditor and other government oversight bodies and
posting on the Agency’s official website to promote transparency,
accountability, and economy in its procurement of goods and services.

4. No grants were awarded for three years since CY 2019, for the support and
promotion of Filipino authorship, thereby failing to attain the purpose of

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 establishing the NBDTF resulting in accumulated unutilized income earned from
the Fund totaling P14,140,333.08. Moreover, the NBDB, as the Fund
Administrator, failed to formulate policies and guidelines on the effective
utilization of the Fund. (Observation No. 5)

We reiterated that the Management, as the Fund Administrator of the

NBDTF:

a) create/revive relevant programs that will support and promote the

Filipino authorship to ensure the efficient and effective utilization of the
interest income earned from the Fund, so that the purpose in the
establishment of such Fund will be attained; and

b) submit the final copy of the updated guidelines for the effective
implementation of the Fund and its IRR.

5. The NBDB was able to effectively and efficiently utilize their budget and cash
requirements, since out of the P97,371,846.91 adjusted allotments received by the
Agency in CY 2021, P96,331,835.28 or 98.93 percent was obligated, leaving only
P1,040,011.63 or 1.07 percent unobligated balance, while P2,088,054.35 or 2.41
percent of the total P86,538,251.00 Notice of Cash Allocation (NCA) received
had lapsed and was reverted to the Bureau of the Treasury (BTr).

Furthermore, review of the submitted Budget Accountability Report (BAR) No. 1

– Quarterly Physical Report of Operation (QPRO) as of yearend showed
improvements in its accomplishments revealing attainment of the targets set for
the year. (Observation No. 6)

We recommended that Management:

a) continue the effective and efficient utilization of the Agency budget and
cash requirements and the minimal up to zero reversion of NCA to the
BTr; and

b) continue attaining and exceeding the targets set for each year.

The foregoing audit observations and recommendations were communicated

through Audit Observation Memoranda and discussed with agency official in a virtual
Exit Conference via Zoom on March 31, 2022. Management comments were
incorporated in this Annual Audit Report (AAR), where appropriate.

G. Status of Settlement of Suspensions, Disallowances and Charges

Audit disallowances totaling P92,400.00 remained unsettled as at the end of the

year.

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H. Status of Implementation of Prior Years’ Audit Recommendations

Of the 16 prior years’ audit recommendations embodied in the CY 2020 AAR of

the NBDB, 11 were fully implemented and five were not implemented, the details of
which are discussed in Part III of this Report.

Number of
Status of Implementation Percentage
Recommendations
Fully Implemented 11 68.75
Not Implemented 5 31.25
Total 16 100.00

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