The Commission on Audit (COA) asked the Northern Foods Corp. (NFC) to be conservative in its estimate and to wisely estimate its target to save cash and prevent products from spoilage.
State auditors wanted the government-owned and -controlled corporation in the Ilocos region to be prudent in their production target, considering that they left a P2.6- million expense on top of a four-year losing streak in sales.
NFC operates under the supervision of the Department of Agriculture to manufacture tomato paste and consequently to process other agricultural-based products.
In the 2012 COA report, the Commission said that since between 2007 and 2012, the corporation had been missing its target as actual production volume of tomato paste were lower.
In crop years 2007 to 2008, the company only produced 2,035 metric tons compared with its 3,000 target. In 2009, only 3,477 metric tons was produced (4,000 target), 3,302 metric tons in 2010 (3,500 target), 3,038 metric tons in 2011 (3,500 target) while 2,851 metric tons in 2012 (4,500 target).
“In spite of the fact that the agency did not realize its targeted production for 2010 to 2011 of 3,500 metric tons, still, it increased its targeted production for crop year 2011 to 2012 to 4,500,” auditors said, noting only a 63 percent accomplishment.
The audit team said that considering the data from past years, the NFC should have only set a 3,330-metric ton target for 2012 to 2013.