FCT auditor speaks out, stands by his findings

FCT auditor speaks out, stands by his findings

TORONTO–Halloween is still weeks away, but it seems members of the Filipino Centre Toronto (FCT) board of directors may have played a trick that audit committee chair Julito Longkines did not find particularly funny.

Longkines was referring to a press statement issued recently which basically states the FCT board’s unwavering support for its president, Rosalinda Javier, and her husband, Felino, despite certain questionable transactions involving the couple outlined in Longkines’s internal audit findings.

Acting on an earlier decision by the board to issue a press release in response to newspaper reports about the audit findings, Longkines signed the document under the impression that all members of the board will be signing the same statement, as an “official board response.”

“During the September 21st (FCT) board meeting…the board unanimously approved to issue a press release which would be signed by all directors, including (myself), to respond to the article that appeared in The Philippine Reporter,” Longkines said during a press conference held Saturday (Oct. 8).

However, the press release, published verbatim in this newspaper, only contained Longkines’s signature. No other member of the board signed the press release that was sent to the various community publications.

Longkines said that when he signed the press statement he saw all the names of the FCT board underneath his name, indicating to him that the board will be signing the document, as well. He was not given a copy of the actual statement since the other members still had to sign it, he said.

Longkines, who has been an accountant for 17 years, believed the press release was “tampered” by intentionally covering the part of the document that contained all the names of the FCT board, and photocopying or scanning the covered signature page so that it would only show his name and signature.

He got his surprise after several publications, including The Philippine Reporter, published the press statement and saw his name as the sole signatory to it.

“(The statement) was signed in good faith, being mandated by the board of directors. It never crossed my mind that the names of the 14 directors would be covered before sending it to the press. Had I known of their intent, I would never have signed the press release,” said Longkines.

During the board meeting, Longkines said, he felt he had two choices: sign the press release as an official board response, or not sign it and resign. He chose to go with the board’s decision to issue a statement, he said.

Quoting an e-mail he received from FCT PRO Aida D’Orazio, Longkines said the other members of the board were unable to sign the document because D’Orazio was trying to beat the deadline for the publications.

FCT vice president and director Wendy Arena told The Philippine Reporter that as far as she knew, the press statement issued to Balita and other publications was signed by most of the FCT board of directors.

“Aida D’Orazio…was the one who sent the statement to Balita and I believe at that time the statement was still missing two signatures of the board members,” Arena said.

The FCT auditor stressed, however, the statement was not a “retraction” of his audit findings, which also outlines some recommendations for the FCT to establish accounting controls within the organization.
He said the audit findings were submitted to the board so it can approve or reject the recommendations, but not the audit findings because the findings are “statements of facts.”

“The board does not have to approve my audit findings, but they have to approve (or reject) my recommendations. But (also) the Board has to prove that my findings were wrong,” said Longkines.

One of the issues raised by the July 27, 2005 audit findings was a series of reimbursements to Felino amounting to $11,836.46 in connection with some renovation work done on certain units in the FCT building in 2003.

The auditor also found that no purchase order system was in place for the procurement of materials for the renovation works, and quotes from other suppliers pertaining to large purchases “were neither obtained nor documented,” which would have given FCT some form of assurance that it is getting the best price.

Other accounting concerns were raised such as the practice of pre-signing cheques by authorized signatories without any indication of the amount or purpose of the cheques, some claims for reimbursements for gasoline allowances by president Javier and Felino, and the questionable payment of commission to an agent of Remax Condo Plus despite an expired agreement and for a particular unit that was not part of the original listing agreement with the agent.

“My main objective for preparing the audit findings report is to provide internal controls and procedures for FCT to follow and to protect its assets,” said Longkines.

Longkines outlined several recommendations to the board in an effort to institute a form of “check and balance” in FCT. Among these recommendations include: strict adherence to a PO system for purchases over $100; avoid pre-signing cheques and inform the bank in writing that there should always be two authorized signatories before clearing a cheque; open a credit account with large suppliers to avoid the use of personal credit cards; cheques should be prepared and released every 15th and 30th of the month.

Longkines is president of the Association of Filipino Canadian Accountants. He is manager at a chartered accountants firm based in Markham, Ontario and was formerly audit manager at leading Philippine accounting firm Sycip, Gorres & Velayo Company.

When asked by this reporter whether the FCT board or Javier offered any justification or explanation for the issues raised by the audit report, Longkines declined to comment.

However, the auditor said he submitted a final audit report to FCT chairman Dr.Victoria Santiago, which included his original findings, Javier’s response to the findings, and the latest financial statement.

Copies of the final report were distributed to the board members during the September 21st board meeting where, according to an FCT source, Longkines “was grilled” and asked to issue an apology to the board.

Longkines, however, refused to apologize maintaining that he stood by his findings.
He said following heated discussions among the board members, the secretary was asked to take back the copies of Longkines’s report earlier distributed to the members so that no member would leave the meeting with Longkines’s audit findings.

Longkines took this as a board rejection of the audit findings.

“They were not happy with (the audit findings), according to them it was accusatory,” said Longkines.
Longkines remains as auditor of the FCT and said he has no immediate plans to resign. However, he said he is “entertaining” the idea of resigning from the board and admitted that the FCT is no longer “a friendly environment.”

“To stay with FCT would not be beneficial to me or to the board,” he said.

He is, however, being urged by some members of the community to stay on and maintain his post at the FCT to ensure that proper accounting standards and ethics are observed.

This reporter attempted to contact Javier but was told the FCT president was unavailable for comment as she was in a meeting. The man that answered the call, however, refused to identify himself when asked for his name saying simply, “It doesn’t matter.”