2018 Annual Financial Report on the Local Government ... · XVI – Negros Island Region ..... 437 ARMM – Autonomous Region in Muslim Mindanao ..... 451 PART II Audit Observations

CY 2018

Annual Financial Report

Local Government

Volume II

CY 2018

ANNUAL FINANCIAL REPORT

LOCAL GOVERNMENT

Volume II

TABLE OF CONTENTS

Page

PART I Consolidated Summary of Audit Opinions on the

Fairness of Presentation of the Financial Statements

NCR – National Capital Region ................. 1

CAR – Cordillera Administrative Region ....... 10

I – Ilocos Region ..................................... 24

II – Cagayan Valley .................................. 49

III – Central Luzon .................................... 77

IV-A – CALABARZON ................................ 104

IV-B – MIMAROPA ..................................... 171

V – Bicol Region ...................................... 193

VI – Western Visayas ................................ 218

VII – Central Visayas .................................. 247

VIII – Eastern Visayas .................................. 279

IX – Zamboanga Peninsula ........................ 326

X – Northern Mindanao ............................ 354

XI – Davao Region ..................................... 388

XII – SOCCSKSARGEN ............................ 400

XIII – Caraga Region .................................... 412

XVI – Negros Island Region ......................... 437

ARMM – Autonomous Region in Muslim

Mindanao ............................................

451

PART II Audit Observations and Recommendations .................... 471

PART III Summary of Audit Observations and

Recommendations on Barangays ...................................

500

PART IV Status of Implementation of Prior Years’ Audit

Recommendations on Provinces, Cities, and

Municipalities ...................................................................

512

PART I

CONSOLIDATED

SUMMARY OF

AUDIT OPINIONS

1

Consolidated Summary of Audit Opinions Rendered on the Fairness of Presentation of the Financial Statements

Calendar Year 2018

LGU AUDIT OPINION Reasons for Opinion other than Unqualified

National Capital Region (NCR)

Cities:

Caloocan Qualified Cash in Bank - Local Currency, Current Account

(CIB-LCCA), Cash in Bank - Local Currency, Savings Account

(CIB-LCSA) and Cash in Bank - Local Currency, Time Deposit

(CIB-LCTD) amounting to P1.837 billion, P1.372 billion and P0.080

billion, respectively, or a total of P3.289 billion did not reconcile

with the cashbook and confirmed bank balances of P2.875 billion

and P3.306 billion, respectively, compromising the accuracy,

correctness and reliability of the cash balances appearing in the

financial statements;

Property, Plant and Equipment (PPE) accounts totaling P15.956

billion in the books and P13.709 billion in the Report on the

Physical Count of Property, Plant and Equipment (RPCPPE)

showed a net variance of P2.247 billion due to (a)

unidentified/unspecified forwarded balances of P2.952 billion; (b)

misclassified accounts and erroneous/double entries of P706.491

million; and (c) inclusion of small tangible items amounting to

P29.642 million, thus, compromised the existence, validity and

reliability of the PPE balances appearing in the financial

statements; and,

Due from Other Funds and Due to Other Funds under the GF, SEF

and TF at year end totaling P194.165 million and P210.577 million,

respectively, showed a total difference of P16.412 million, thereby,

casting doubt on the correctness and reliability of the balances.

Las Piñas Qualified Property, Plant and Equipment (PPE) accounts with total

acquisition costs of P2.401 billion and P1,109 billion, under the

General Fund (GF) and Special Education Fund (SEF),

respectively, could not be ascertained due to (a) undetermined

details of PPE subsidiary ledger (SL) beginning balance of

P779.163 million; (b) non-conduct of actual physical inventory for

the current year; and (c) unreconciled discrepancy of P213.180

million between the balances per books and the General Services

Office (GSO) records; and,

Non-dropping of disposed unserviceable properties from the books

in the amount of P31.050 million resulted to the overstatement of

the PPE balances reported in the financial statements. Moreover,

the recognition of Miscellaneous Income relative to the receipt from

2


sale of unserviceable properties does not reflect the correct gain

or loss on the sale of unserviceable asset in the financial

statements.

Makati Unqualified

Malabon Qualified Property, Plant and Equipment (PPE) accounts of P2.487 billion is

unreliable due to (a) unreconciled difference of P315.766 million

between the book balance and the Report on the Physical Count

of PPE (RPCPPE) of P2.171 billion;

(b) presence of items costing below P10,000 amounting to

P63.021 million which should have been reclassified to the semi-

expendable accounts; and (c) inclusion of unserviceable items

amounting to P5.152 million;

Cash account balance of P702.969 million is unreliable due to the

(a) unrecorded disbursements and unidentified reconciling items

in the amount of P19.772 million and P5.894 million, respectively,

carried over from CYs 1999 to 2003 in the General Fund (GF)

books; and (b) discrepancies between the book and bank balances

of P4.684 million for the Special Education Fund (SEF), P1.438

million for Trust Fund (TF) and P.386 million for the City of Malabon

University (CMU), which cannot be adjusted/ascertained in the

absence of supporting documents and Bank Reconciliation

Statements (BRS); and,

Failure to conduct physical inventory of supplies and materials and

maintain supplies ledger cards and other inventory records to

support the balances per books, thereby casting doubt on the

correctness of the inventory accounts balance of P27.890 million

at year-end.

Mandaluyong Qualified Property, Plant and Equipment (PPE) year-end account balances

totaling P5.344 billion could not be ascertained due to (a)

unreconciled discrepancies totaling

P262.442 million between the balances appearing in the Report on

the Physical Count of PPE (RPCPPE) and records of the City

Accounting Department (CAD); (b) non-recognition of the 25

percent portion of completed public infrastructure projects for CYs

2016 to 2018 totaling P111.669 million; (c) non-derecognition of

the demolished properties in the PPE accounts amounting to

P52.172 million; and (e) unrecorded 435 donated/procured

property without cost;

Cash - Local Treasury reported at P118.759 million is unreliable

due to discrepancy of P66.144 million between the General Ledger

balance and the Treasurer’s Cashbook balance partly caused by

unrecorded reconciling items of prior years with no supporting

documents;

3


Cash in Bank (CIB) accounts consisting of Local Currency, Current

Accounts, Local Currency, Time Deposits and Local Currency,

Savings Account in the amount of P1.737 billion, P522.430 million

and P1.150 million, respectively, could not be ascertained due to

(a) unrecorded/ unadjusted reconciling items pertaining to CY

2018 and prior years amounting to P316.209 million; (b) net

discrepancy of P224.550 million between the Subsidiary Ledger

(SL) balances and treasury records; (c) absence of Bank

Reconciliation Statements (BRS) on three bank accounts with a

balance of P3.822 million; (d) non-inclusion of two current

accounts in the CIB balance amounting to P3.516 million that was

confirmed by the bank; and (e) inclusion of closed account and

dormant time deposit account amounting to P9.000 million and

P1.011 million, respectively; and,

Real Property Tax (RPT) and Special Education Tax (SET)

Receivable accounts amounting to P184.805 million and P167.027

million, respectively, are not reliable due to (a) setting-up of the

receivable accounts based on income estimates instead of the

Certified List of Taxpayers; and (b) discrepancy between the

balances of the RPT/SET Receivable and the List of Real Property

Tax Delinquencies as of December 31, 2018.

Manila Adverse Cash in Bank (CIB) accounts totaling P11.772 billion cannot be

ascertained due to (a) net discrepancy of P391.051 million

between the book and bank balances due to

unrecorded/unadjusted reconciling items; (b) variance of P682.876

million between the General Ledger (GL) and Treasury records; (c)

difference between the bank and Treasury records of P291.825

million; and (d) absence of Subsidiary Ledgers (SLs) for the

General Fund (GF);

Reconciling items in the BRSs for the current and prior years in the

net amount of P4.692 million and P13.470 million, respectively,

were not adjusted, thus, rendering the correctness of the balances

of the affected accounts unreliable;

PPE account of P23.696 billion, net of Construction in Progress

(CIP), could not be ascertained due to the noted discrepancy of

P21.578 billion when compared against the Report on Physical

Count of Property, Plant and Equipment (RPCPPE) of P2.118

billion;

Due to NGAs account of

P154.682 million at year-end was doubtful due to (a) existence of

negative balance of P3.353 million in the GF and disparity between

the GL and SLs for TF by P.068 million and (b) improper

maintenance of SLs and existence of dormant accounts amounting

to P33.302 million aged eight to 11 years, thus, the account was

not fairly presented in the financial statements (FSs); and,

4


Acounts Payable (AP) amounting to P4.745 billion was not provided with complete SLs, thus, details could not be easily verified and confirmed. Of the amount, P2.087 billion pertains to the current year of which P1.196 billion was not supported with sufficient documents, hence, validity and propriety of the claims could not be established.

Marikina Qualified Inventories - Construction Materials, Office Supplies and Drugs

and Medicine were misstated due to higher balances per books as

compared to the Report on Physical Count of Inventory (RPCI),

with variances amounting to P50.925 million, P9.388 million and

P3.384 million, respectively or a total of P63.696 million;

Property, Plant and Equipment (PPE) account was doubtful due to

(a) unreconciled discrepancies between the Report of Physical

Count of PPE (RPCPPE) and accounting records, showing a net

variance of P39.633 million; and (b) absence of documents

showing the details of several PPE totaling P171.088 million which

resulted to the non-determination of the economic useful life of

these assets for the provision of depreciation. Also, various

improvements in CY 2018 totaling P3.743 million were classified as

PPE instead of Maintenance and Other Operating Expenses

(MOOE); and,

Terminal Leave Benefits (TLB) amounting to P0.876 million was

derecognized in the books of account, misconstruing Section 38 of

CSC Memorandum Circular (MC) No. 41 series of 1998, thus, the

obligation of the City was extinguished without a valid basis.

Muntinlupa Qualified Property, Plant and Equipment (PPE) accounts totaling P7.315

billion were unreliable due to unreconciled net discrepancy of

P232.465 million between the Report on the Physical Count of PPE

(RPCPPE) and PPE book balances.

Navotas Unqualified

Parañaque Qualified Cash in Bank account balance totaling P3.142 billion as at

December 31, 2018 could not be substantiated due to the difficulty

in securing proper documentation as basis in ascertaining the

validity of reconciling items which accumulated since CY 1998 and

beyond amounting to P(118.362) million and effect the necessary

adjustments in the accounting records; and,

PPE account balance of P11.144 billion could not be ascertained

due to (a) unreconciled discrepancies of P9.873 billion between the

various PPE account balances in the books and in the Report on

the Physical Count of Property, Plant and Equipment (RPCPPE);

(b) inclusion of the cost of the old Legislative Building which had

already been demolished in CY 2009; and (c) incomplete physical

count of inventory.

5


Pasay Qualified Cash – Local Treasury account balance of P0.988 million was not

fairly presented as its beginning balance included the amount of

P0.998 million, which was not backed-up with actual cash on hand

and has been carried in the books in the past five years. Moreover,

adjusting entries to the account made in CY 2018 amounting to

P100.00 and P10,862.80, are erroneous and not valid,

respectively;

Contingent asset pertaining to the claim against the Metropolitan

Manila Development Authority (MMDA) amounting to P84.147

million as of December 31, 2018, which the City is pursuing through

legal processes albeit with uncertain outcome, was recognized

under the Due from National Government Agencies account rather

than merely disclosing its nature in the Notes to Financial

Statements, as provided in the relevant provisions of Paragraph 18,

IPSAS 19, thus, the Due from National Government Agencies and

the related accounts were overstated by P84.147 million;

Non-adjustment of the Insurance Expenses account for the

unexpired portion, which is contrary to Paragraph 7 of the IPSAS

1, resulted to the understatement and overstatement of the Prepaid

Insurance and Insurance Expenses accounts, respectively, by

P7.240 million;

PPE accounts totaling P7.583 billion were unreliable due to (a)

the recognition at P1.00 each of four parcels of land of the private

domain of the government reserved by the State for the City as

one-stop government center pursuant to Proclamation No. 1303,

with fair market value (FMV) per tax declaration of P6.540 million;

(b) the non-derecognition of the cost of replaced/removed materials

incident to the repairs, renovation and rehabilitation made on

buildings and structures totaling P4.938 billion; and (c) the non-

reclassification of completed projects valued at P64.065 million

from the Construction in Progress (CIP) accounts to the

appropriate PPE accounts;

Accounts Payable and the Government Equity accounts were

overstated and understated by P14.026 million, respectively, due

to (a) double set-up of payables totaling P3.710 million; (b)

improper recording as expense of settlement/payment of payables

amounting to P1.803 million; (c) recording of outstanding payables

on utilities which were higher by P9.952 million than the billing

statements from the service providers; and (d) the non-set-up of

Accounts Payable upon incurrence of obligations, but the same

was debited upon payment amounting to P1.439 million. Further,

outstanding payables totaling P0.104 million were not supported

with complete documents to establish the validity of claims

contraryto Section 4 (6) of PD No. 1445; and the Due to Officers

and Employees account totaling P2.330 million was erroneously

6


presented as Accounts Payable in the Statement of Financial

Position;

Due to GOCCs account was understated by P66.369 million

caused by the non-recognition of liability of the City to the Philippine

Reclamation Authority RA(P) representing the cost of documentary

stamps and value added tax (VAT) to be shouldered by the City as

provided in the Compromise Agreement between the parties for the

transfer of land owned by the PRA to the City as settlement for

unpaid real property tax;

Furniture and Fixtures, Accounts Payable, Government Equity and

Water Expense accounts were understated by P1.375 million,

P8.395 million, P5.837 million and P6.530 million, respectively,

while the Other Maintenance and Operating Expenses and Other

Supplies and Materials Expenses accounts were overstated by

P3.972 million and P1.375 million, respectively, due to (a)

erroneous recognition in CY 2018 of prior year’s expenses and the

non-recognition of unpaid water expenses incurred in 2018, which

is not in accordance with the accrual basis of accounting under

IPSAS 1; and (b) erroneous recognition of procured furniture and

fixtures as direct expense instead of asset, which is not in

conformity with the accounting standards under IPSAS 17; and,

Status of accounting records and absence of documents did not

allow the application of alternative audit procedure to establish the

validity of the affected accounts.

Pasig Qualified Land account balance of P1.024 billion does not reconcile with the

Report on the Physical Count of Property, Plant and Equipment

(RPCPPE) amounting to P205.573 million, showing a discrepancy

of P818.159 million caused by some items that are without cost in

the RPCPPE. Real Property Ledger Cards (RPLC) are maintained

for 13 lots only totaling P33.692 million, while the description of 10

items totaling P15.012 million is more appropriately classified as

Road Networks;

Property, Plant and Equipment (PPE) accounts, except Land, could

not be reliably established due to (a) the non-reconciliation of

property and accounting records with a total discrepancy of

P92.844 million; (b) misclassification of PPEs totaling P476.538

million; (c) non-provision of depreciation for properties totaling

P1.612 billion and lapses/errors noted in the recording and in

providing for depreciation, all contrary to the applicable provisions

of the New Government Accounting System (NGAS) Manual for

Local Government Units (LGUs), International Public Sector

Accounting Standards (IPSAS) and Government Accounting and

Auditing Manual (GAAM); and,

7


Inventories aggregating P1.464 billion cannot be ascertained

because (a) the Report on the Physical Count of Inventories (RPCI)

reflected a total inventory balance of P26.550 million only; (b) the

non-reconciliation of the balances per stock cards and supplies

ledger cards due to the improperly maintained and incomplete

records of the Central Supply Office (CSO) and the City Accounting

Office (CAO), respectively; and (c) inconsistencies and delays in

the recording of acquisitions and issuances of supplies and

materials, all contrary to the applicable provisions of the NGAS

Manual for LGUs.

Pamantasan ng Lungsod ng Maynila

Unqualified

Quezon City

Qualified Various asset and liability accounts totaling P5.347 billion and

P145.981 million, respectively, initially recorded as “unreconciled

beginning balances” in the eNGAS subsidiary ledgers, are doubtful

in view of the non-reclassification of these balances to the

appropriate subsidiary ledger accounts in the absence of

supporting documents and/or details;

151 stale checks amounting to P8.446 million were not cancelled,

contrary to Section 59 of the Manual on the New Government

Accounting System (NGAS) for Local Government Units (LGU’s)

Volume I, thus, understating the CIB-LCCA and the corresponding

liability account balances;

Cash Advances for Payroll of P0.571 million, Advances to Special

Disbursing Officers of P160.419 million and Advances to Officers

and Employees of P57.414 million or a total of P218.405 million

remained unliquidated as of December 31, 2018 contrary to

Sections 5.1.1 and 5.1.3 of COA Circular No. 97-002 resulting in

the non-recognition of expenses in the period incurred. Moreover,

advances in the total amount of P35.843 million granted in CY 2011

and earlier years remained not liquidated despite issuance of

demand letters, contrary with the provisions of Section 9.0 of COA

Circular No. 2012-004 dated 28 November 2012. Thus, cash

advances remained outstanding and dormant and resulted to the

overstatement of Receivables and understatement of the

Expense/Equity accounts; and,

Cost of Buildings and Other Structures amounting to P59.867

million was not derecognized in the books from the time it was

demolished in the CYs 2014-2018, contrary to Section 82 of IPSAS

17. As a result, the PPE, related Accumulated Depreciation and

Depreciation Expense accounts are overstated for CY 2018, while

the Government Equity account is understated as a result of non-

derecognition of the demolished buildings and other structures in

the previous years.

8


Quezon City General Hospital

Qualified Cash in Bank (CIB) - Local Currency, Current Account balances

with an aggregate amount of P1.559 billion were unreliable due to

unadjusted/unrecorded reconciling items in the net amount of

P4.271 million, which resulted to a net understatement of the CIB

account by the same amount;

Property, Plant and Equipment (PPE) accounts as of December 31,

2018 amounting to P1.007 billion remained unreliable due to

unreconciled net difference of P295.931 million between the

balances per books and the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE). Moreover, the

RPCPPE for fixed assets was not submitted to the Office of the

Auditor within the prescribed period; and,

Inventory account in the amount of P114.313 million as of

December 31, 2018 could not be ascertained due to (a) non-

submission of the Report of Physical Count of Inventory (RCPI);

and (b) non-maintenance of Supplies Ledger Cards and stock

cards as required in Sections 114 and 124, Volume I of the NGAS

Manual for LGUs.

San Juan Qualified Incomplete physical inventory taking by the Inventory Committee

and the non-reconciliation of the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) with the City Accounting

Department (CAD) records resulted in the significant positive and

negative variances of P1.494 billion and P254.979 million,

respectively, or a net variance of P1.239 billion, casting doubt on

the validity, existence, ownership and conditions of the PPE items

and the reliability of the recorded balance of the PPE account at

year-end;

Cash - Local Treasury and Cash in Bank - Local Currency, Current

Account amounting to P147.335 million and P411.379 million,

respectively, is doubtful due to the unreconciled General Ledger

(GL) balances of the CAD and the Cashbooks of the City Treasury

Department (CTD), resulting in discrepancies totaling P11.521

million; and,

Real Property Auction under the Trust Liabilities account

amounting to P10.124 million is unreliable due to the unreconciled

balances between the records of the CAD and the CTD.

Taguig Qualified Unrecorded credit and debit memos and other reconciling items of

P75.907 million which include an unreconciled bank and book

beginning balance of P6.408 million, understated the Cash in Bank

- Local Currency, Current Account; and,

9


Property, Plant and Equipment (PPE) account in the accounting

records with carrying value of P6.790 billion does not reconcile with

the Report on the Physical Count of PPE (RPCPPE) prepared by

the City General Services Office (CGSO) due to the absence of the

cost of certain inventory items totaling P4.761 billion. Further, the

Bids and Awards Committee (BAC) did not provide the CGSO with

copies of the Purchase Orders (POs) and Acceptance and

Inspection Reports (AIRs) as basis for the costing of inventory

items, thus, precluded the completion of the RPCPPE and its

reconciliation with the accounting and property records.

Valenzuela

Qualified

Reconciling items under the Cash in Bank (CIB) accounts for all

funds with a net amount of P4.755 million as of December 31, 2018

remained unadjusted in the books of accounts, thus, the

correctness of the account balances appearing in the financial

statements could not be ascertained;

Property, Plant and Equipment (PPE) accounts with an aggregate

balance of P8.804 billion could not be ascertained due to (a)

unreconciled difference of P141.945 million between the

accounting records and the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE); (b) non-maintenance of

complete Property, Plant and Equipment Ledger Cards (PPELC);

(c) undetermined details of PPE amounting to P1.329 million per

Subsidiary Ledger and Lapsing Schedule; and (d) misclassification

of PPE accounts amounting to P13.425 million; and,

Land account amounting to P898.921 million was found overstated

by P97.769 million due to inclusion of (a) 15 percent of the market

value of land per Tax Declaration deposited in court relative to

expropriation cases filed since 2009 amounting to P48.608 million;

and (b) the difference in amount between the total assessed value

per Tax Declarationless 15 percent deposit in court for

expropriation cases amounting to P49.161 million resulting to

understatement of Other Prepayments account by P48.608 million

and overstatement of Other Provisions account by P49.161 million.

Moreover, about 661 parcels of donated land covered with original

titles and/or Deeds of Donation in the possession of the City were

still in the name of previous owners and the corresponding fair

market values were not recorded in the books of accounts.

Municipality

Pateros

Unqualified

10


Cordillera Administrative Region (CAR)

Abra

Management Letter Year- end financial statements, monthly accounts and financial reports were submitted late with significant delays precluding the conduct of timely audit of the accounts and operations of the provincial government.

Municipalities

Bangued

Boliney Management Letter Non-submission of the year-end financial statements and accounts for CY 2018 as well as accomplishment reports, precluded the Audit Team in ascertaining the current financial condition and financial performance of the LGU.

Bucay

Modified/ Qualified

Non-submission of the Report of Physical Count of Local Road Networks (RPCLRN) in its prescribed format, non-maintenance of Local Road Network Ledger Card and Property Card as well as non-preparation of the Local Road Map casted doubt as to the existence, valuation, condition as well as propriety of the recorded balance of Road Networks account amounting to P100.307 million in the year-end financial statements;

Construction in progress (CIP) accounts of various Infrastructure Assets totaling P8.550million, and Buildings and Other Structures

amounting to P.447million remained uncompleted and dormant for several years, rendering the accuracy of the recorded amounts and existence of the assets doubtful;

Journal entry for the set-up of Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable amounting to P1.100

million and P1.100 million was not supported with Journal Entry Voucher and Certified List of Taxpayers, hence, the existence and accuracy of the ending balances of RPT and SET Receivables

totaling P7.734 million and P7.479 million respectively, could not be readily determined;

Due to National Government Agencies and Due to LGUs account totaling P7.483 million and P.075 million, respectively, were carried over in the books and remained dormant for ten (10) years, the purpose of which and corresponding cash funding could not be determined if still intact, thus, casting doubt as to the validity of the existence of such account in the Financial Statements;

Mandatory trust liability accounts totaling P1.669 million were carried over in the books despite the absence of pertinent documents to support the validity of the recorded balances, casting doubt on the fairness of presentation of the Financial Statements; and,

Management failed to initiate action with regards to the absence of supporting documents for its dormant receivables totaling P1.386 million thereby, casting doubt as to the propriety and validity of the recorded receivables.

http://en.wikipedia.org/wiki/Bangued,_Abra

http://en.wikipedia.org/wiki/Boliney,_Abra

http://en.wikipedia.org/wiki/Bucay,_Abra

11


Bucloc Management Letter Significant delays were noted in the submission to the Commission on Audit of the Disbursement Vouchers (DV-all funds) and Official Receipts. Moreover, the monthly/quarterly/year-end Financial Statements for January to December 2018 remained un-submitted as of to date contrary to pertinent laws and regulations, hence, the current financial condition and financial performance of the LGU could not be readily ascertained.

Daguioman Management Letter Delayed submission of the disbursement vouchers and collections, monthly trial balance, quarterly and year-end financial statements and other reports which precluded timely review and evaluation and the conduct of the necessary procedures.

Danglas

Dolores Management Letter Non-submission of Pre-closing trial balances for July to December 2018, 3rd and 4th Quarterly Statements of Financial Position, Statements of Financial Performance, Statements of Cash Flow, Statement of Comparison of Budget and Actual Amounts, Notes to Financial Statements and Year-end Financial Statement . There was also delay in the submission of January to June 2018 vouchers and non-submission on July to December 2018 vouchers.

La Paz Qualified Property, Plant and Equipment (PPE) with a net book value of P35.738 million representing 16.30% of total net assets of P219.202 million and the related provisions for depreciation are doubtful due to: (a) non-conduct/submission of the annual physical count of PPE; (b) non-maintenance of PPE ledger and properly cards; and (c) non-maintenance of updated Acknowledgment Receipt for Equipment (ARE) or Property Acknowledgement Receipt (PAR);

Road Networks in the amount of P39.733 million representing 18.13% of total net assets of P219.202 million could not be ascertained due to: (a) the Report on the Physical Count of Local Road Networks lacked the required road components, construction date and corresponding costs; (b) non-maintenance/submission of Local Road Network Ledger Card, Report on Local Road Network, Local Road Network Property Cards and Road Map; and (c) no disclosure in the Notes to the Financial Statements regarding Road Network System;

Balance of Construction in Progress (CIP) - Infrastructure Assets account amounting to P21.156 million is doubtful due to: (a) the amount of P4.373 million pertaining to CIP-Roads, Highways and Bridges per subsidiary ledger and disclosure in the Notes to the Financial Statements did not tally with the on-going concreting of roads totaling P7.521, million 473.49; and (b) the balance of CIP-Irrigation, Canals and Laterals amounting to P10.572 million per subsidiary ledger since CY 2015; thus, its being construction in progress until now is questionable;

Dormant Receivable accounts in the amount of P3.174 million, still exist in the books of the agency rendering the account balance doubtful;

http://en.wikipedia.org/wiki/Bucloc,_Abra

http://en.wikipedia.org/wiki/Dolores,_Abra

12


Failure to set-up amount for Real Property Tax Receivable at the beginning of the year for CYs 2017 to 2018 and there was no list of taxpayers supporting previous year’s balances; thus, the validity and propriety of the receivable balances of P.441 million and P.102 million and entries for the collections totaling P.338 million and P.339 million for CY 2017 and CY 2018, respectively, could not be ascertained;

Difference of P.137 million between balances of reciprocal accounts Due from Other Funds of P.140 million,123.93 and Due to Other Funds of P.278 million and non-disclosure of the nature thereof in the Notes to Financial Statements rendered the accounts doubtful; and,

Significant delays in the submission to the Commission on Audit of Financial Statements (FS) and Trial Balances (TB), Official Receipts (OR) and Disbursement Vouchers (DV)/payrolls ranging from 22 to 359 days, 35 to 391 days and 57 to 397 days, respectively, precluded the timely examination of accounts, post-audit of transactions and the conduct of other necessary audit procedures. Also, eight (8) DVs amounting to P1.451 million,have not been submitted for audit.

Lacub

Lagangilang

Lagayan Management Letter Non-submission of journals, trial balances and financial statements for the 4th Quarter on 2018; Year-end Financial statements and two

hundred thirty five (235) DVs/Payrolls amounting to P10.724 million under General Fund, 4th Quarter accounts under 20% Development Fund and Trust Fund.

Langiden Management Letter Due to the non-submission of the following: 1) Journals, Trial Balances and Financial Statements for the 4th Quarter; 2) Year-end Financial Statements composed of Statement of Financial Position, Statement of Financial Performance, Statement of Changes in Net Assets/Equity, Statement of Cash Flows, Statement of Comparison of Budget and Actual Amounts and Notes to Financial Statements; and 3)Seven (7) DVs/payrolls totaling P653,081.10 and December 2018 check DVs.

Licuan-Baay

Luba Modified/ Qualified

Non-submission of Report of Physical Count of Local Road Networks in its prescribed format, non-maintenance Local Road Network Ledger Card and Property Card as well as non-preparation of the Local Road Map casted doubt as to the existence, valuation, condition as well as propriety of the recorded

balance of Road Networks account amounting to P114.873 million in the year-end financial statements;

Journal entry for the set-up of Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable amounting to P.445 million and P.423 million was not supported with Journal Entry Voucher and Certified List of Taxpayers, hence, the existence and accuracy of the ending balances totaling, P1,529 million could not be readily determined;

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http://en.wikipedia.org/wiki/Licuan-Baay,_Abra

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Due to National Government Agencies amounting to P1 million, previously recorded as Loans Payable-Domestic, for the implementation of the OTOP Project, remained dormant for 14 years, thus, validity of the said amount could not be determined.

Trust Liability pertaining to unexpended / unobligated balance of the LDRRMF from prior year and in current year amounting to P.137 million and P.819 million respectively were not recognized and transferred to a Special Trust Fund account at year-end.

Due from NGOs/POs amounting to P.355 million aged more than

1 year remained unliquidated, hence the current asset is overstated

while the corresponding expense account is understated by the

same amount. Moreover, loan assistance to PO granted in CY

2018 amounting to P.050 million was posted in the ledger as Other

Receivables instead of Due from NGOs/POs.

Malibcong Management Letter Non-submission of the disbursement vouchers, collections, monthly trial balance, quarterly and year-end financial statements and other reports which precluded timely review and evaluation and the conduct of necessary procedures.

Manabo Qualified Non-submission of Report on the Physical Count of Local Road

Networks as well as non-maintenance of Local Road Network Ledger Card (LRNLC) and Local Road Network Property Card (LRNPC) casted doubt as to the existence, valuation, condition, and propriety of the recorded balance of the Road Networks totaling P96.554 million as well as the Government Equity in the year-end financial statements;

Absence of a complete archival system had caused unreconciled difference between the Report of Physical Count of Property, Plant and Equipment (RPCPPE) and the costs presented in the trial balances totaling P31.966 million which compromised the reliability and propriety of the financial statements;

Projects not yet completed with total costs incurred of P25.534 million were closed to their asset account at the end of the year, thus, Construction in Progress – Infrastructure Assets were understated while Road networks account was overstated both by the same amount.

Absence of Transfer Certificates of Titles (TCT) for Land properties recorded amounting to P3.518 million as well as unreconciled

discrepancy of P1.214 million between the balances per Financial Statement and Tax Declaration casted doubts as to the reliability and propriety of the balance of the Land Account.

Dormant Receivable and Payable accounts maintained in the books totaling P.369 million and P.227 million, respectively, were not supported with bills or relevant records, valid proofs to warrant payment and subsidiary ledgers for each debtor/creditor containing adequate information affecting the fair presentation of the financial statements; and,

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http://en.wikipedia.org/wiki/Manabo,_Abra

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Real Property Tax Receivable and Special Education Tax Receivable were not established for CY 2018 in violation of Section 246 of the Republic Act 7160 resulting to understatement of RPT/SET Receivables and Deferred RPT/SET Income.

Peñarrubia

Pidigan Management Letter Non-submission of journals and financial statements/trial balances for the 1st to 4th Quarter for all funds; Year-end financial statements and Official Receipts and Check Disbursement Vouchers for December 2018 and Cash Disbursement Vouchers and Cash Disbursement and Payrolls for CY 2018.

Pilar Qualified Land with a market value of P33.384 million identified by the Provincial Assessor’s Office as owned by the Municipality of Pilar was not recorded in the books, thus, understating the assets of the Municipality.

The Municipality did not fully comply with the transition provision on the complete recognition of the local road network in the books of accounts which requires 75% compliance at the end of 2018 pursuant to Item IX of COA Circular No. 2015-008, thus Road Network account balance of P182.753 million could not be ascertained;

Trust Liability pertaining to unexpended / unobligated balance of the LDRRMF from prior year and in current year amounting to P.344 million were not recognized and transferred to a Special Trust Fund account at year-end; and,

Information pertaining to DRRM was not evident on the face of the Financial Statements as this was not disclosed in the Notes to Financial Statements.

Sallapadan

Management Letter Delayed and non-submission of the Municipality’s accounts, monthly trial balance, quarterly financial statements and other reports which precluded timely review and evaluation and the conduct of the necessary procedures.

San Isidro Management Letter Management was not able to submit as of to date the Municipality’s 2018 accounts, trial balance, financial statements and various reports which precluded timely auditorial review and prompt detection/correction of possible deficiencies.

San Juan

San Quintin

Tayum

Qualified Unaccounted difference between the accounting and treasury records by P1.138 million as well as accounting and bank records by P1.076 million for Cash in Bank accounts, thus, the accuracy of the cash account balances remained in questioned;

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Receivables totaling P3.382 million remained dormant and uncollected over the years which questioned the capability of the management to enforce collection and / or liquidation of overdue receivables. Likewise, receivables totaling P2.029 million lacks relevant records containing adequate information to validly support such claim, casting doubt as to the propriety and validity of the recorded current assets account;

Delinquent Real Property and Special Education Taxes totaling P5.439 million remained uncollected depriving the Municipal Government of substantial income that could have been used for priority projects and programs that would benefit the community;

Existence, valuation, condition and propriety of Road Networks totaling P268.586 million could not be ascertained due to non-submission of the Report on the Physical Count of Local Road Networks, Local Road Network Ledger Card and Local Road Network Property Card; and,

Non-conduct of Physical Count of Property, Plant and Equipment and non-maintenance of required records renders the validity, existence and accuracy of the said accounts worth P41.163 million uncertain and doubtful.

Tineg Management Letter Non-submission of Pre-closing Trial Balances for July to December 2018, 3rd and 4th Quarterly Statements of Financial Positions, Statements of Financial Performance, Statement of Cash Flows, Statement of Comparison of Budget and Actual Amounts, Notes to Financial Statements, and Year-end Financial Statements and delayed submission of disbursement vouchers and financial statements for January to June 2018.

Tubo Management Letter Delays in the submission of disbursement vouchers and non-submission of financial statements for CY 2018 precluded the prompt audit of accounts and financial statements, early detection and correction of errors/deficiencies and timely reporting of audit results to the management.

Villaviciosa

Qualified

Balance of loan per record of the Land Bank and the Municipality remained unreconciled by P1.636 million Entries to record the loan amortizations and interest payments were not supported with debit memos, thus, the correctness of the entries could not be ascertained;

Budget Office did not maintain the Registries of Appropriations,

Allotment and Obligations as required under Section 18-22 of Volume II of the New Government Accounting System (NGAS) Manual which resulted in the failure to prepare and submit the Status of Appropriations, Allotments, Obligations and Balances as required under Section 711, Volume I of the same Manual and the correctness and reliability of the financial statements specifically the Statement of Comparison of Budget and Actual Amounts (SCBAA) could not be established;

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http://en.wikipedia.org/wiki/Villaviciosa,_Abra

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Submitted Report on the Physical Count of PPE was not classified to its category and was incomplete on some information. Property, Plant and Equipment Ledger Card (PPELC) and Property Card were not maintained by the accounting office and supply and property office, casting doubt on the reliability of balances of PPE accounts with carrying amount of P361.556 million;

Subsidiary ledgers that enable the agency to control and analyze

its financial information were not maintained for the dormant and of unknown nature account “Due from Officers and Employees”

totaling P.212 million casting doubt on the collectability or settlement of the receivables and the reliability of the amount presented in the Financial Statements;

Failure to comply with the transition provision on the complete recognition of the local road network in the books of accounts which requires 75% compliance at the end of 2018 pursuant to Item IX of COA Circular No. 2015-008, thus Road Network account balance

of P219.476 million could not be ascertained;

School buildings costing P1.095 million remained in the books of accounts although the Municipality do not have beneficial ownership and control over said PPE items, thus overstating the assets of the Municipality.

Subsidiary ledgers that enable the agency to control and analyze its financial information were not maintained for “Inter-Agency Payables” accounts amounting to P25.508 million, thus, the balances presented in the Financial Statements could not be ascertained.

Apayao Unqualified

Municipalities

Calanasan Unqualified

Conner Qualified Doubtful balance of the reported Inventory accounts totaling P7.075 million because of (a) non-maintenance of inventory records; (b) non-conduct of inventory count; and (c) non-preparation/non-submission of Report on the Physical Count of Inventory (RPCI) contrary to the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I and II; and,

Erroneous and/or non-recording of various transactions contrary to the Philippine Public Sector Accounting Standards Nos. 1, resulted in the overstatement of both assets and liabilities in the amount of P.389 million Moreover, erroneous and/or non-recording of various transactions contrary to the Philippine Public Sector Accounting Standards Nos. 1, resulted in the overstatement of both assets and liabilities in the amount of P.202 million.

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Flora

Qualified Due from NGAs and Due from Local Government Units accounts

amounting to million P2.215 million and P5.328 million, respectively; and the payables – Accounts Payable, Due to NGAs, Due to GOCC and Due to LGUs accounts amounting to P8.983 million, P38.957 million, P.236 million and P11.338 million, respectively as of December 31, 2018 could not be ascertained because these were not supported with schedules;

Due from Other Funds and Due to Other Funds with a variance of

P.723 million could not be ascertained due to failure of the Municipal Accountant to effect reconciliation; and,

Delayed and non-submission of liquidation reports with its supporting documents that are duly accounted per books created doubts on the veracity of the cash advances account balance.

Kabugao Qualified Failure of the Municipal Treasury to submit the Disbursement Vouchers and supporting documents amounting to P8.780 million to the Municipal Accountant, thus, remained unrecorded and unaccounted resulting in the overstatement of the Cash in Bank and Government Equity accounts, and rendering the transactions irregular;

Erroneous and/or non-recording of various transactions contrary to the Philippine Public Sector Accounting Standards Nos. 1 resulted in the understatement of Assets and Liabilities in the amounts of P3.420 million and P3.421 million, respectively; and overstatement of P500.00 in the Government Equity. Moreover, the Municipal Accountant failed to update the monthly Bank Reconciliation Statements contrary to COA Circular No. 96-011 dated October 2, 1996, thus, the correctness of the Cash in Bank balance amounting to P20.007 million as of December 31, 2018 could not be fully ascertained.

Luna Qualified Road Network account amounting to P44.479 million includes road networks outside the Municipality’s jurisdiction contrary to the Republic Act (RA) 7160 and COA Circular 2015-008 dated November 23, 2015.

Pudtol Qualified Balance of Due to NGA’s was overstated in the amount of P44.574 million due to non- recording of liquidations submitted and duly received by the source agency, which could mislead users of the financial statements.

Santa Marcela Qualified Loans Payable-Domestic General Fund Account with a balance of P17.962 million because loan records was not properly maintained and updated in violation of Section 313 of the Local Government Code of 1991 and Section 107 of the NGAS Manual for LGUs, Volume I. This also resulted in the accumulation of unpaid loan amortization from calendar years 2012 to 2018 amounting to P2.142 million which were not recorded in the books, and the incurrence of penalties amounting to P.124 million.

Benguet Qualified Local Road Networks (LRN) account totaling P1.025 billion recognized as infrastructure assets in the books of accounts could not be ascertained due to a) discrepancy of P403.211 million between the accounting and property records; and b) non-provision of depreciation for ten(10) LRN items amounting to P18.713 million.

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City

Baguio City Qualified Property, Plant and Equipment (PPE) account with a total book value of P1.869 billion could not be ascertained due to (a) unaccounted balance of the PPE marked as “for reconciliation” amounting to P181.619 million; (b)property recorded in the General Ledger but not in the Report of Count of Property, Plant and Equipment (RCPPE) amounting to P181.158 million; (c) unrecorded property amounting to P170.744 million included in the report on physical count (RCPPE); and (d) inconsistent acquisition cost of various property between the accounting and property records amounting to P39.805 million, with a net discrepancy of P152.227 billion.

Municipalities

Atok Qualified Property, Plant and Equipment Account amounting to P77.887 million is unreliable due to: a) unreconciled discrepancy of P49.767 million between the accounting and property records; b) non-conduct of physical inventory; and c) non-maintenance of the property and ledger cards; and,

Completed projects funded under the Local Government Support

Fund amounting to P3.161 million were not recognized in the books of accounts.

Bakun Qualified Local Road Networks (LRN) account in the amount of P39.979

million is unreliable due to: a) unreconciled description of LRN asset between accounting record and inventory report; b) absence of the reportorial requirements; and c) non-provision of depreciation;

Accumulated delinquent taxes due to: a) ineffective collection

policy; and/or b) un-updated Real Property Tax Account Register caused the significant ending balances of the Real Property Taxes Receivable and Special Education Taxes Receivable accounts amounting to P4.382 million and P2.092 million, respectively;

Trust Liabilities-Disaster Risk Reduction Management Fund

(DRRMF) totaling P3.503 million is inaccurate in view of: a) incorrect accomplishment of the form prescribed; and b) unreconciled difference between the balances presented in the DRRMF report and the Statement of Financial Position, and (c) failure to provide the required disclosure in the Notes to Financial Statements, caused the transfer of an incorrect amount of unutilized DRRMF to the Trust fund;

Non-submission of the vouchers and its supporting documents

deprived the confirmation of the existence and validity of the P3.084 million liabilities set-up at the end of the year; and,

Failure to recognize liabilities for the on-going construction projects

at the end of the year caused the understatement of the Accounts Payable and Construction in Progress accounts.

19


Bokod

Qualified

Property, Plant and Equipment (PPE) account totaling P181.399 million is unreliable due to the following: a) different description of recording by the accounting office and the property office; discrepancy of P29.513 million between the accounting and property records; non-provisions of depreciation; and non-disclosure of the account in the Notes to Financial Statements of the LRN account amounting to P30.052 million; b) Unreconciled differences of some PPE items amounting to P20.438 million between the accounting and property records; and c) Unserviceable PPE items totaling P3.845 million remained in the books of accounts and were not disposed of as of year-end; and,

Inventory account in the amount of P1.68 million is doubtful due to non-conduct of periodic reconciliation between the accounting and property records resulting in a discrepancy of P0.83 million

Buguias Qualified Property, Plant and Equipment (PPE) account aggregating P143.89 million is unreliable due to: unreconciled description of road networks items between the accounting and property report; absence of the reportorial requirements; and non-provisions of depreciation for the LRN account totaling P36.583 million; Inclusion/non-disposal of unserviceable properties amounting to P14.458 million;

Unreconciled balance of the reciprocal accounts Due to Other Funds / Due from Other Funds amounting to almost P25 million; and,

Inaccuracy of the Accounts Payable in the amount of P3.952 million in view of: (a) non-submission of the vouchers and its supporting documents; and (b) presence of negative figures in the account’s schedule.

Itogon Qualified Local Road Network (LRN) account amounting to P33.053 million

is unreliable due to: a) significant discrepancy aggregating P90.544 million between the accounting and property records; b) different description and acquisition costs in recording LRN items by the accounting and property office; c) non-preparation of the Local Road Inventory and Road Map, LRN Property Card and Report on Physical Count of LRN; and d) non- disclosure in the Notes to Financial Statements.

Kabayan Qualified Property, Plant and Equipment (PPE) account with an aggregate

amount of P59.83 million is unreliable due to the following: a) Non-conduct of physical inventory, absence of the reportorial requirements and non-provision of depreciation for Local Road Network account totaling P19.181 million; and, b) PPE items worth P1.15 million remained unrecognized in the books of accounts, unserviceable and donated property with a net book value of P.324 million and P.004 million, respectively, remained in the books of accounts, and PPE items with a total cost of P.222 million were not accounted during the inventory taking as of December 31, 2018; and,

20


Balances of the intra-agency accounts: (a) Due from Other Funds/Due to Other Funds; and (b) Due from Special accounts /Due to Special accounts had unreconciled differences amounting to P.081 million and P.347 million, respectively, as a result of inconsistencies in recording transactions between reciprocal accounts.

Kapangan Qualified Property, Plant and Equipment (PPE) account with an aggregate amount of P144.127 million is unreliable due to the following: a) Inclusion of projects that were not under the description of a road, reportorial requirements were not prepared and/or followed, depreciation were not provided for some roads, incorrect computation of depreciation and non-disclosure in the Notes to Financial Statements of the Local Road Network account totaling P32.608 million; and, b) PPE items worth P9.565 million remained unrecognized in the books of accounts, inclusion of a PPE item amounting to P.091 million with an acquisition date of January 2019 in the Schedule of PPE and some PPE items in the RPCPPE had different cost as compared to the Schedule of PPE.

Kibungan Qualified Property, Plant and Equipment (PPE) account aggregating P73.526 million is unreliable due to: a) the unreconciled difference between the Report of Physical Count of Property, Plant and Equipment and the PPE Ledger Cards maintained by the Treasury Office and the Accounting Office, respectively, resulting in a net variance of P3.963 million; and b) failure to completely conduct an inventory of the roads networks, non-preparation of reportorial requirements, non-disclosure in the Notes to the Financial Statements of the Local Road Networks account totalling P11.806 million;

Inventory account amounting P2.45 million is inaccurate due to the non-conduct of complete physical count and non-maintenance of complete inventory records; and,

Stale checks totaling P1.429 million remained unadjusted in the books of accounts.

La Trinidad Qualified Property, Plant and Equipment account due to: (a) unserviceable properties with a carrying value of P298,112.63 remained in the books of accounts; (b) a motor vehicle with a total cost of P48,913.05 was not accounted during the inventory taking as of year-end; and (c) non-recognition of local road networks.

Cash in Bank-Local Currency Current Account with a net amount

of P.625 million as reflected in the Monthly Bank Reconciliation Statements is unreliable due to non-recording of the reconciling items.

Mankayan Qualified 75 percent of the account Local Road Network embodied in the Registry of Public Infrastructure was not recognized in the books of accounts.

Sablan Qualified Local Road Network (LRN) account amounting to P23.596 million is unreliable due to: a) significant discrepancy aggregating P.562 million between the accounting and property records; b) non-provision of depreciation for five LRN items; and c) non-preparation of the Local Road Inventory and Road Map, LRN Property Card and Report on Physical Count of LRN.

21


Tuba Qualified Property, Plant and Equipment (PPE) account is unreliable due to non-compliance with the accounting and reporting guidelines on the Local Road Networks account.

Tublay Unqualified

Ifugao Qualified Unresolved, unadjusted and unreconciled net difference of P4.871 million in the Cash in Bank-Local Currency, Current Account and the existence of “Government Equity” account amounting to P8.686 million in the Trust Fund Books.

Municipalities

Aguinaldo Qualified Non-recording of completed projects totaling P14.750 million; and non-transfer of unexpended/unobligated balances of the Quick Response Fund (QRF) and the DRRMF-MOOE for CY 2018 totaling P2.527 million to the “Trust Liability-DRRM” account in the Trust Fund books.

Alfonso Lista Qualified Erroneous computation of the Accumulated Depreciation-Road Networks totaling P6.439 million as it was computed based on a standard of five (5) years estimated useful life and 5% residual value; incorrect disclosure of the Road Networks account in the Notes to Financial Statements; and the misclassification of fund transfers from the Bureau of Treasury totaling P16.932, million, as Subsidy Income from NGAs in the General Fund Books.

Asipulo Qualified Erroneous recording as subsidy income of funds received from the Bureau of Treasury totaling P10.131 million; non-recording as asset of completed project costing P2.495 million; and unreliable Road Networks account totaling P113.647 million.

Banaue Qualified Non-recording of various items of PPE totaling P14.982 million; unreconciled depreciation expense and accumulated depreciation in the Statement of Financial Performance and Statement of Financial Position with the lapsing schedule totaling P4.940 million and P5.142 million, respectively; erroneous recording as interest expense instead of capitalizing as part of the cost of the asset the interest paid on the loan granted for the Construction and Trade

Center Building II totaling P1.197 million; and non-transfer to a Special Trust Fund Trust Liabilities – DRRM account of the unexpended LDRRMF QRF and MOOE totaling P1.424 million.

Hingyon Unqualified

Hungduan Unqualified

Kiangan Qualified Non-recording of property, plant and equipment totaling P5.633 million; the understatement of the Due from LGUs account by P.033 million; and the misclassification of payables to : employees, barangay, municipality, and GSIS totaling P1.997 million, as Accounts Payable instead of Due to Officers and Employees, Due to LGUs and Due to GSIS.

22


Lagawe Qualified Non-recording of at least 75% of road networks totaling P16.304 million, from the Registry of Public Infra; non-recording of final and executory disallowances totaling P.951 million, and the non-transfer to the Trust Fund books of the unexpended LDRRMF totaling P.118 million, and the existence of negative and dormant accounts respectively in the Due to NGAs and Due to LGUs account totaling P.044 million and P1.964 million, respectively.

Lamut Qualified Non-recording as assets of four completed core road access

projects totaling P2.982 million; the non-transfer of the unexpended/unobligated balances of the Quick Response Fund (QRF) and the DRRMF-MOOE for CY 2018 totaling P2.317 million to the “Trust Liabilty-DRRM” account in the Trust Fund Books; the transfer to the Accounts Payable in the General Fund of unspent

2017 DRRMF amounting to P2.320 million during the current year; and the non-disclosure of Property, Plant and Equipment, including Local Road Networks totaling million (net of depreciation).

Mayoyao

Qualified Non-recording as Property, Plant and Equipment of at least 75% of public infrastructures totaling P37.339 million;

Erroneous or non-recording of final and executory disallowances amounting to P1.758 million; unexpended QRF & DRRMF MOOE for CY 2018 totaling P3.284 million not transferred to the Special Trust Fund; and,

Capital outlay/continuing DRRM totaling P.995 million transferred to STF; and non-recording in the STF receipts of DRRMF from other LGUs & sources amounting to P1.625 million.

Tinoc Qualified Inclusion in the Due to NGAs account the cost of completed

projects amounting to P7.8 million; and,

Non-recording of at least 75% of road networks totaling P56.580 million.

Kalinga Qualified Various accounting errors and deficiencies resulting in the understatement of Assets and Equity by P101.228 million and P232.508 million, respectively, and the overstatement of Liabilities by P131.281 million.

City

Tabuk City Qualified Various errors/omissions and deficiencies in the recording of transactions resulted in the understatement of Assets and Government Equity by P1.695 million and P3.417 million,

respectively, and overstatement of Liabilities by P1.722 million.

Municipalities

Balbalan Qualified Various accounting errors and non-adherence to accounting guidelines resulting to the overstatement of Assets and Equity by

P6.446 million and P6.542 million, respectively and the understatement of liabilities by P.096 million.

23


Lubuagan Unqualified

Pasil Qualified Due to lack of subsidiary and general ledgers rendering the doubtful accuracy of account balances particularly Cash in Bank (CIB), Accounts Payable and Due to National Government

Agencies amounting to P39.242 million, P6.986 million and

P17.093 million, respectively and the non-recording of unexpected DRRMF as Trust Liability; and,

Erroneous recording of various completed infrastructure projects resulted in the understatement of both assets and Government Equity in the amount of P5.270 million.

Rizal Unqualified

Pinukpuk Qualified Property, Plant and Equipment (PPE) accounts amounting to P61.191 million were not provided depreciation resulting in the doubtful reliability of the account balance as of December 31, 2018;

Recorded expenses on the issuance of various inventories held for

distribution and consumption in the total amount of P86.213 million

were not duly supported resulting in the doubtful accuracy of the

balance of Inventories amounting to P36.737 million at yearend;

Recognition of at least 75% of the total road networks was not complied as of December 31, 2018 due to the absence of Public Infrastructure Registry for local road networks and Property Ledger Cards, incomplete inventory and the non-determination of fair market value of said items, resulting in the misstatement of infrastructure assets particularly Road Networks.

Tanudan Qualified Compliance with the required 75% recognition of Road Networks could not be determined due to lacking Registry of Public Infrastructure-Road network, thus the accuracy of Road Networks amounting to P43.803 million could not be ascertained.

Discrepancy of P1.241 million in the balance of Trust Liability-LDRRM and the erroneous recording of various transactions, respectively, resulted in the understatement of Liabilities and corresponding overstatement of Government Equity in the amount of P1.406 million.

Tinglayan Unqualified

Mountain Province Unqualified

Municipalities

Barlig Unqualified

Bauko Unqualified

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Besao Unqualified

Bontoc Unqualified

Natonin Unqualified

Paracelis Unqualified

Sabangan Unqualified

Sadanga Unqualified

Sagada Unqualified

Tadian Unqualified

REGION I - Ilocos Region

Ilocos Norte Qualified Recording to expense of drugs and medicines and medical, dental

and laboratory inventories, in the amounts P74.353 million and

P61.803 million respectively, upon issuance to the different

hospitals;

Inclusion of condemned and/or unserviceable tangible properties

to the property, plant and equipment account in the total of P14.960

million; and,

Misclassification of donated supplies, inventories and/or goods to

supplies and materials expense in the total amount of P27.094

million.

Cities

Batac City Qualified Property, Plant and Equipment and Inventories in the amount of

P1.107 billion and P14.243 million respectively, could not be

ascertained due to non-conduct of physical count thereof and the

non-submission of the required Inventory Reports and failure to

comply with the transition provision for the recognition of 75%

Local Road and Road Network System as part of the City's

property, plant and equipment (PPE) account at the end of

calendar year 2018 contrary to COA Circular No. 2015-008 dated

November 23, 2015, thus affecting the fair presentation of the

infrastructure assets account in the financial statements;and,

25


Accounts Payable for all funds at year-end amounting to P6.528

million were doubtful due to non-presentation of supporting

documents to vouch the claims which is not in line with pertinent

provisions of laws, rules and regulations, thus, overstating the

recorded accounts payable and corresponding expense accounts

and understating Government Equity by the same amount.

Laoag City Qualified Property, Plant and Equipment (PPE) accounts as well as the

accuracy, reliability and correctness of their balances amounting

to P234.938 million as of December 31, 2018 could not be

reasonably ascertained due to various deficiencies uncovered in

audit;

Recognition of Road Networks as Property, Plant and Equipment

was undertaken without adhering to the guidelines set forth in COA

Circular No. 2015-008 to assure fair presentation of the account

Road Networks in the financial statements, thus the said account

with carrying amount of P240.092 million is unreliable;

Accounts Receivable and Other Receivables totaling to P18.948

million were not subjected to periodic verification, analysis and

validation as required under COA Circular No. 2016-005, hence

the validity and collectability of the receivables account reflected in

the financial statement is doubtful; and,

Supporting documents for several items in the Accounts Payable

schedule amounting to P9.848 million, were not presented for

verification as to its existence, validity and compliance with Section

46 of PD 1177, thus the accuracy of the amount presented as valid

and demandable obligation is doubtful.

Municipalities

Adams Qualified Property, Plant and Equipment (PPE) accounts as of December 31,

2018 totaling to P171.925 million does not reconcile with the

balance per inventory report in the amount of P102.149 million

which is not in accordance with Section 124 of the Manual on

NGAS for LGUs rendering the balance of the PPE accounts in the

financial statements unreliable; and,

Forty (40) paid disbursement vouchers with a total amount of

P3.665 million remained unsubmitted, hence we could not

ascertain the validity and propriety of the recorded transactions that

might affect the fair presentation of the financial statements.

Bacarra Qualified Reconciliation between the accounting and property records as

required under Sec. 124 of NGAS Manual for LGUs was not

undertaken for the balances of PPE accounts amounting to

P241.854 million which resulted in the net difference of

26


P.044 million between the balances of the books and the balances

appearing on the Report of Physical Count of Property, Plant and

Equipment (RPCPPE) rendering the financial statements

unreliable;

Local Road Networks account amounting to P109.584 million was

not provided with any depreciation which is not in conformity with

Paragraph 59 of PPSAS 17, thus resulting to misstatement of PPE,

expense and Government Equity accounts.

Badoc Qualified Property, Plant and Equipment amounting to P117.211 million

were unreliable due to the unreconciled difference of P7.476

million between the balances of the Inventory Report and

Accounting records and the inclusion of unserviceable properties

in the books of accounts amounting to P4.902 million; and

Inventory account totaling to P4.304 million could not be

ascertained due to the non-conduct of physical count and non-

existing Inventory Held for Distribution in the amount of P23.301

million was still carried in the books, thereby resulting to

overstatement of the assets and understatement of the

corresponding expense account.

Bangui

Qualified PPE totaling to P218.102 million was unreliable due to the

unreconciled difference of P46.882 million between the balances

of the General Ledger and Report of Physical Count of Property,

Plant and Equipment; and non-recording of five parcels of land with

an appraised value of P1.760 million resulting for the

understatement of Land account by the same amount.

Banna

Qualified Inability to conduct/submit physical inventory of its Property, Plant

and Equipment totaling to P253.218 million (net book value) that

would vouch for the physical existence, validity and correctness of

the balances of the Property, Plant and Equipment;

Correctness and reliability of the year-end balance of Cash in Bank-

Local Currency, Current Account amounting to P235.419 million;

Non-disclosure of recognition of the account Local Road Network;

and,

Inability of the Municipal Accountant to submit several

disbursement vouchers totaling to P8.804 million.

Burgos Qualified Accuracy of the reported balance of movable properties of the

municipality amounting to P68.361 million in the year-end financial

statements could not be established due to the non-reconciliation

of the actual inventory of properties as contained in the Report of

Physical Count of Property, Plant and Equipment (RPCPPE) with

the accounting records.

27


Carasi Qualified Failure to reconcile the balances of the Property, Plant and

Equipment account which resulted to disparity of P3.749 billion;

and,

Failure to conduct the accounting and reporting procedures to

account the Road Networks affected the correctness and

existence of the reported balances.

Currimao

Qualified Unreconciled balances between the Accounting and Property

Records amounting to P138.702 million affecting the validity and

accuracy of the year-end balances of Property, Plant and

Equipment with a total book value of P249.318 million;

Inclusion of unserviceable and obsolete properties in the books of

accounts amounting to P1.920 million; and,

Non-conduct of complete physical count on the municipality's

Inventories amounting to P1.550 million.

Dingras

Qualified Inability to maintain Property, Plant and Equipment Ledger Cards,

Property Cards and the non-classification of the Inventory Report

for each type of the Property, Plant and Equipment;

Real Property Tax Receivable and Special Education Tax

Receivable accounts as of December 31, 2018 totaling to P7.700

million and P7.700 million, respectively;

Non-recording and non-disclosure in the Notes to Financial

Statements the initial recognition of the account Local Road

Networks;

Non-provision of depreciation on Infrastructure Assets, the non-

reconciliation of reciprocal accounts Due from Other Funds and

Due to Other Funds amounting to P6.226 million; and.

Inability of the Municipal Accountant to submit several

disbursement vouchers totaling to P16.813 million of which the

amount of P4.649 million represents infrastructure projects.

Dumalneg Qualified PPE totaling to P105.520 million was unreliable due to unrecorded difference of P16.549 million between the balances of the Accounting Records and the Report of the Physical Count of Property, Plant and Equipment; and,

Unserviceable properties amounting to P1.416 million were still carried in the books of accounts and inventory report.

Marcos

Qualified Inability to conduct/submit physical inventory of its movable

properties totaling to P37.282 million (net book value) that would

vouch for the physical existence, validity and correctness of the

balances of the Property, Plant and Equipment;

28


Inability to fully establish the RPT and SET totaling to P12.545

million and P12.545 million, respectively;

Non-disclosure of recognition of the account Local Road Network

and the inability of the Municipal Accountant to submit several

disbursement vouchers totaling to P58.627 million of which the

amount of P53.107 million represents infrastructure projects.

Nueva Era Qualified Incomplete conduct of physical count of the total road networks

costing P72.033 million;

Non-preparation, non-submission of the Report on the Physical

Count of Local Road Network affecting the validity and accuracy

of the year-end balances of Property, Plant and Equipment with a

total book value of P509.287 million; and,

Non-conduct of complete physical count on the municipality's

Inventories amounting to P.678 million.

Pagudpud Unqualified

Paoay Qualified Property, Plant and Equipment account in the amount of P249,161

million as well as P.428million worth of Inventories as of December

31, 2018 could not be ascertained due to non-conduct of physical

count thereof and the non-submission of the required inventory

reports;

Failure to comply with the transition provision for the recognition of

75% of Local Road and Road Network System as part of the

municipality's property, plant and equipment (PPE) account at the

end of the calendar year 2018;

Cash in Bank account between the records of the Municipal

Accountant and the Municipal Treasurer showed a negative

variance of P5.328 million;

Accounts Payable for all funds amounting to P.195 million were not

supported with complete documentations to prove their validity,

propriety and existence;

Real Property Tax Receivable and Special Education Fund Tax Receivable amounting to P29.714 million and P24.551 million respectively, do not reconcile with the Certified List of All Property Tax Delinquencies amounting to P3.336 million both for RPT and SEFT, leaving an unreconciled balance of P47.593 million.

Pasuquin

Adverse Failure to adjust the Construction in Progress account amounting

to P62.663 million to its proper Asset account and adjust the

corresponding liability account to Government Equity by the same

amount;

29


Failure to recognize depreciation on various Property, Plant and

Equipment with a book value of P217.700 million;

Failure to provide complete subsidiary ledger for accounts Land,

Land Improvements, Buildings, Other Structures, and School

Buildings and Market with a recorded amount of P105.218 million;

and,

The agency carried in its books of accounts Inventories amounting

to P2.680 million that were already consumed and distributed.

Piddig

Adverse The LGU's subsidiary schedule of trial balance accounts totalling

to P585 Million were not maintained and submitted thus the

accuracy of the account balances presented in the financial

statements were doubtful.

Non-maintenance of stock cards, property, plant and equipment

ledger cards and real property ledger cards and RPCI and

RPCPPE was not conducted, resulted to unreliable balance of the

said accounts; and,

Failure to recognize the assets from the implementation of projects

funded by NGAs.

Pinili

Qualified Property, Plant and Equipment could not be ascertained due to: a)

failure of the agency to conduct and submit a complete inventory

report; b) non-reconciliation between the balances in the Inventory

Report and Accounting Records; c) non-provision of depreciation

of some properties; and, d) inclusion of unserviceable properties in

the books of accounts and inventory report; and,

Non-submission of disbursement vouchers and liquidation reports

totaling to P30.364 million affected the accuracy and completeness

of recorded transactions of the municipality.

San Nicolas Qualified Reconciliation between the accounting and property records as

required in Sec. 114 of NGAS Manual for LGUs was not undertaken

which resulted to a difference of P29.532 million between the two

records rendering the affected Property, Plant and Equipment

items in the financial statements unreliable.

Sarrat Qualified Road Networks account as of year-end amounting to P99.424

million is unreliable due to the failure of the municipality to follow

the proper accounting and reporting procedures provided in COA

Circular No. 2015-008;

Failure to conduct a complete inventory and maintain a road map

of its local roads;

No Report on the Physical Count of Local Road Networks

(RPCLRN) was prepared and submitted as of year-end;

30


The subsidiary ledgers maintained by the municipal accountant

does not provide a complete description or information on the roads

and road components for every road network and proper disclosure

in the Notes to Financial Statements was not made on the total road

network system.

Solsona

Qualified Inventory and Property, Plant and Equipment account amounting

to P2.081 million and P273.437 million, respectively could not be

ascertained because of non-submission of Report of Physical

Count of Inventories and Property, Plant and Equipment;

Misclassification of liabilities with different nature recorded as Due

to LGUs amounting to P39,562 million; and,

Non-provision of depreciation to various public infrastructures with

a total cost of P117.944 million.

Vintar Qualified Failure to conduct all the necessary Accounting and Reporting

Procedures of Road Networks amounting to P143.805 million as

of December 31, 2018 renders the reported balance doubtful.

Ilocos Sur

Qualified

Discrepancy of P810.283 million on the total Property, Plant and

Equipment between the Financial Statements and Inventory

Report, thus the validity and accuracy of the account is doubtful;

Loans Payable-Domestic and Interest Payable accounts were

understated by P108.424 million and P1.417 billion, respectively,

due to the non-recording of the restructured amount of loan of the

Province as per Statement of Account provided by PDIC;

Due from LGUs in the total amount of P30.189 million representing

shares of the province from Real Property Tax and Special

Education Tax was not ascertained due to the discrepancy of

records between the province and the cities/municipalities; and,

Incomplete recognition of the Local Roads Network account in the

amount of P686.879 million which is only 50% recognized instead

of 75% as of December 31, 2018.

Drugs and medicines requisitioned from BPIS during the year and

prior years by the seven (7) District Hospitals, Provincial Hospital

and Governor’s Office totaling P37.734 million and P105.551

million, respectively, were not obligated which resulted in the

understatement of Expenses by P37.734 million during the year,

and understatement of Accounts Payable and overstatement of

Government Equity by the same amounts of P143.286 million.

31


Cities:

Candon City

Qualified Property, Plant and Equipment (PPE) accounts per books in the

amount of P1.354 billion could not be ascertained due to the failure

of the General Services Office to conduct complete inventory taking

and non-disposal of unserviceable properties amounting to

P49.029 million; and

Failure of the City Accountant to transfer in the books at least

seventy-five percent (75%) of Public Infrastructure accounts

contrary to Section 3.7 of COA Circular No. 2016-004 thus, the

Property, Plant and Equipment and Government Equity accounts

were understated by P354.339 million.

Vigan City Qualified Property, Plant and Equipment of the City totaling to P965.470

million in the financial statements as of December 31, 2018 could

not be ascertained due to the unreconciled balance of the PPE

account and the submitted Report on the Physical Count of PPE

amounting to P7.342 million; and.

Real Property Tax/Special Education Tax Receivable and the

related Deferred Real Property Tax/Special Education Tax

accounts were overstated by P7.220 million and P2.905 million,

respectively.

Municipalities

Alilem Qualified Monthly Bank Reconciliation Statements were not prepared and

submitted to the Auditor which is not in consonance to COA

Circular No. 96-011 dated October 2, 1996 thus casting doubts on

the reliability and accuracy of the cash in bank presented in the


Submitted RPCPPE amounting to P23.429 million did not tally with

the PPE as appearing in the Financial Statements in the amount of

₱151.236 million or a discrepancy of P127.807 million, thus,

casting doubt on the accuracy and fair presentation of the financial

statements.

Banayoyo Qualified Property, Plant and Equipment (PPE) recorded in the books of

accounts with total gross amount of P365.666 million did not tally

with the actual count of P82.245 million or a difference of P283.421

million;

Failure to record in the books of accounts at least 75% of the Public

Infrastructures from the registries to their appropriate accounts of

the Property, Plant and Equipment (PPE) which is equivalent to

P155.694 million, resulted to understatement of both PPE and

Government Equity accounts by the same amount; and ,

32


Long outstanding liabilities amounting to P.786 million were not

substantiated with any documents rendering doubts on the validity

and existence of these obligations.

Bantay

Qualified Property, Plant and Equipment amounting to P470.916 million were

not established due to inability of the Municipality’s Inventory

Committee to conduct complete physical inventory taking.

Burgos Qualified Property, Plant and Equipment (PPE) of the municipality with total

gross amount of P384.434 million could not be ascertained due to

inability of management to conduct the physical count of properties.

Cabugao Qualified Property, Plant and Equipment (PPE) account as appearing in the financial statements showed a difference of P656.554 million as against the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Caoayan Qualified Property, Plant and Equipment (PPE) as appearing in the Financial

Statements and Report of Physical Count of Property, Plant &

Equipment (RPCPPE) showed an unreconciled difference of

P5.292 million.

Cervantes Qualified Local Road Network account amounting to P146.389 million as of

December 31, 2018 is doubtful due to non-conduct of inventory,

non-assessment of the cost component on the present condition of

the assets for proper recognition of impairment loss and non-

maintenance of appropriate records.

Galimuyod Qualified Due to the unreconciled variance of P55.039 million between the result of physical inventory count and balance per books.

Gregorio Del Pilar

Qualified Due to the unreconciled variance of P105.866 million between the result of physical inventory count and balance per books.

Lidlidda

Qualified Property, Plant and Equipment excluding Land and Construction in

Progress accounts with a total gross amount of P202.342 million;

Depreciation Expenses and Accumulated Depreciation could not

be ascertained due to the inability of the municipality to conduct

physical inventory;





Government Equity accounts by the same amount;

Murrah buffalos acquired in CY 2017 for the Livelihood Assistance

to Tobacco Farmers in the total amount of P6.344 million was not

yet booked up as Biological Assets resulting in the understatement

of both Asset and Government Equity Accounts by the same

amount, and

33


Inventories distributed to recipients in the amount of P.638 million were included in the Inventories Account thereby causing an overstatement of Income, Assets and Government Equity and understatement of Expenses by the same amount.

Magsingal

Qualified Property, Plant and Equipment in the amount of P809.921 million in the financial statements as of December 31, 2018 could not be ascertained due to unreconciled difference of P105.588 million in the submitted Report on the Physical Count of PPE;

Public Infrastructure projects were transferred and recognized only on CYs 2016 and 2017 in the books of accounts as Property, Plant and Equipment, thereby rendering uncertainty on the fair presentation of the financial statements; and,

Local Disaster Risk Management Fund balance of P.291 million at the end of the year was not transferred to Trust Fund which resulted in the understatement of the Cash in Bank Account and the Trust Liability Account in the Trust Fund books.

Nagbukel Qualified Property, Plant and Equipment account as appearing in the year-

end financial statements in the total amount of P237.094 million

was not ascertained because of the unreconciled difference of

P52.858 million with the inventory report of properties.

Narvacan Qualified Property, Plant and Equipment (PPE) as appearing in the Financial

Statements and Report of Physical Count of Property, Plant &

Equipment (RPCPPE) showed an unreconciled difference of

P806.200 million, thus, casting doubt on the accuracy and fair

presentation of the PPE account;

Cash in Bank of the municipality amounting to P45.376 million was

not reliable due to the non-preparation of Bank Reconciliation

Statements and confirmed balances from banks differ from the

reported amounts in the books of accounts; and,

Misclassification of accounts totaling to P46.811 million.

Quirino Qualified Local Road Network account amounting to P173.709 million as of December 31, 2018 is doubtful due to non-conduct of inventory, non-assessment of the cost component on the present condition of the assets for proper recognition of impairment loss and non-maintenance of appropriate records.

Salcedo Unqualified

San Emilio Qualified Failure to record in the books of accounts at least 75% of the Public




Government Equity accounts by the same amount.

34


Inventories appearing in the Statement of Financial Position as of

year-end in the amount of P1.114 million did not tally with the actual

count of P.395 million or an overstatement of P.719 million.

San Esteban Unqualified

San Ildefonso Qualified No physical count of municipal properties conducted during the

year and no inventory report was submitted, thus, the existence of

the recorded properties in the books under the Property, Plant and

Equipment (PPE) accounts, and the reliability, accuracy and

correctness of their balances as reflected in the Financial

Statements amounting to P259.799 million as of December 31,

2018 could not be ascertained.

Road network system amounting to P42.294 million was not

disclosed in the Notes to Financial Statement;

Local Disaster Risk Management Fund (LDRRMF) balance of

P1.341 million at the end of the year was not transferred to Trust

Fund resulted to understatement of the Cash In Bank Account and

the Trust Liability Account in the Trust Fund books.

San Juan Qualified Unreconciled items totaling to P11.187 million were included as

adjustments to book balances, thus, the reliability and accuracy of

the Cash in Bank account as presented in the financial statements

were not ascertained;

Cash Local Treasury account amounting to P1.501 million in the

books of accounts were not ascertained due to non-reconciliation

of balances in the cashbooks and general ledgers;

PPE accounts totaling P546.400 million as of December 31, 2018

could not be ascertained because no complete inventory taking

was conducted and no corresponding Report on the Physical

Count of PPE(RPCPPE) was submitted.

San Vicente

Qualified Property, Plant and Equipment (PPE) of the LGU with a gross value

of P 81.288 million in the books as of December 31, 2018 is

unreliable due to various deficiencies noted in audit.

Public Infrastructure projects of the Municipality were not recorded

in the books of accounts due to incomplete Registry of Public

Infrastructures;

Several accounts were misclassified during the recording of the

transactions;

Unspent Local Disaster Risk Reduction Management Fund

(LDRRMF) pertaining to calendar year 2018 amounting to P.131

million was not transferred to Trust Fund which resulted to

35


understatement of the Cash In Bank Account and the Trust Liability

Account in the Trust Fund books.

Santa Qualified Property, Plant and Equipment accounts amounting to P317.963

million as of December 31, 2018 could not be ascertained due to

failure to conduct an annual physical count of its properties and the

non-submission of the Report of Physical Count of Property, Plant

& Equipment (RPCPPE).

Santa Catalina Qualified Property, Plant and Equipment accounts amounting to P101.035


failure to conduct an annual physical count of its properties and

the non-submission of the Report of Physical Count of Property,

Plant & Equipment (RPCPPE);

Public Infrastructures previously transferred to registries were not

recorded in the books of accounts which resulted to

understatement of Property, Plant and Equipment and Government

Equity by the same amount of P86.709 million;

Non-current portion of Loans Payable-Domestic was not

presented in the Statement of Financial Position as at December

31, 2018; and,

Proper accounting for the Share from Tobacco Excise Tax was not

observed.

Santa Cruz Qualified Local Road Network account amounting to P236.008 million as of




maintenance of appropriate records .

Santa Lucia Qualified Local Road Network account amounting to P148.276 million as of




maintenance of appropriate records in accordance with the

accounting and reporting guidelines

Santa Maria Qualified Property, Plant and equipment (PPE) account as appearing in the

year-end financial statements in the total amount of P857.634

million was not ascertained because of the total unreconciled

amount of P107.162 million with the inventory report of properties.

Santiago Qualified Property, Plant and Equipment (PPE) of the municipality excluding

Land with total gross amount of P774.245 million in the books of

accounts as of December 31, 2018 and the related Depreciation

Expenses and Accumulated Depreciation are doubtful due to

various deficiencies uncovered in audit;

36






Government Equity accounts by the same amount; and,

Registries of Public Infrastructures and other necessary records

were not maintained by the Accounting Section;

Check disbursements aggregating P127.522 million were not

submitted for post audit despite the issuance of Audit Observation

Memorandum and Notices of Suspension requiring submission

thereby casting doubts on the validity, legality and propriety of the

transactions;

Non/delayed submission of the 2018 accounts and quarterly trial

balances and monthly bank reconciliation statements precluded

timely auditorial review and prompt detection/correction of possible

deficiencies and caused delay in the preparation of the Annual

Audit Report.

Santo Domingo Qualified Report of Physical Count of Property, Plant and Equipment

(RPCPPE) amounting to P285.8156 million did not tally with the

PPE as appearing in the Financial Statements in the amount of

P520.583 million or a discrepancy of P234.767 million;

Dormant asset accounts include Loans Receivable – Others and

Due from NGOs/POs in the amount of P1.136 million and P2.161

million respectively.

Sigay Qualified Due to the unreconciled variance of P274.675 million between the

result of physical inventory count and balance per books.

Sinait Qualified Unreconciled items totaling to P1.988 million were included as

adjustments to book balances thus, the reliability and accuracy of

the Cash in Bank account can not be ascertained;

Cash Local Treasury account amounting to P.960 million in the

books of accounts were not ascertained due to non-reconciliation

of balances in the cashbooks and general; and,

Physical inventory of LGU Properties was not conducted during the

year, thus the validity, existence and correctness of the Property,

Plant and Equipment (PPE) accounts amounting to P563.289

million could not be ascertained.

Sugpon

Qualified Property, Plant and Equipment (PPE) of the Municipality with a total cost of P107.202 million in the books as of December 31, 2018 is doubtful due to several deficiencies

No provision for depreciation for all depreciable assets of the Municipality;

37


Construction-in-Progress account includes cost of completed projects amounting to P3.469 million;

No Monthly Bank Reconciliation Statements (BRS) were prepared and submitted to the Auditor for verification/review, thus, casting doubts on the reliability and accuracy of the Cash in Bank account amounting to P192.746 million.

Suyo Unqualified

Tagudin

Unqualified

La Union Qualified Land account in the amount of P129.101 million cannot be

ascertained due to unreconciled records of the Provincial

Accountant and General Services Officer with that of the Provincial

Assessor.

La Union Medical Center

Qualified Accounts Payable account was overstated by P9.256 million due

to the improper setting-up and recording of payables; and,

P2.763 million or 13% of the total Accounts Payable were

outstanding for more than two years, thus, rendered the existence

and validity doubtful.

City:

San Fernando City

Qualified

Land account with reported balance of P78.560 million as of

December 31, 2018, could not be ascertained due to non-

reconciliation of records between the Accounting Office and

Assessor’s Office, showing a discrepancy of P39.624 million;

Valuation of the majority of lots was recorded at assessed values

instead of acquisition cost and reclassification did not conform to

its actual use; and,

Buildings and Other Structures totaling P2.257 million are carried

in the books of the City government despite the fact that these are

not held for use by the LGU, thereby overstating its assets.

Municipalities:

Agoo

Qualified

Property, Plant and Equipment (PPE) and Inventory accounts

amounting to P790.221 million and P2.579 million, respectively,

could not be ascertained due to non-conduct of periodic physical

inventory and non-maintenance of complete property records.

38


Aringay Qualified Property, Plant and Equipment (PPE) accounts amounting to

P266.669 million could not be ascertained due to the non-

submission of the agency’s annual Physical Inventory Report.

Bacnotan Qualified Cash in Bank – Local Currency, Current Account and Time Deposit

accounts were understated by P7.317 million due to non-

preparation of adjusting and correcting entries to effect various

reconciling items as identified in the Bank Reconciliation

Statements; and,

Property, Plant and Equipment accounts with gross amount of

P739 million as of December 31, 2018 is of doubtful reliability due

to various deficiencies.

Bagulin Qualified Property, Plant and Equipment in the total net amount of P77,145

million were doubtful due to the non-maintenance of PPE Ledger

Cards and Property Cards, inability of the Municipality to conduct

inventory and non-submission of RPCPPE; and,

Errors in recording and reporting of Local Disaster Risk Reduction

and Management Fund (LDRRMF) aggregating P4.242 million

resulted to understatement of the Trust Liabilities-DRRMF Account

by the same amount.

Balaoan Qualified Property, Plant and Equipment (PPE) account in the net amount of

P230.54 million could not be ascertained due to: a) non-conduct of

physical count; b) non-reconciliation of Accounting and Property

Records; c) inclusion of non-serviceable properties; and d)

unrecorded PPE.

Bangar Qualified Property, Plant and Equipment totaling P375.39 Million could not be ascertained due to various deficiencies noted which include partial conduct of physical count of PPE, unreconciled records of the Accounting Office and the General Services Office, non-maintenance of property cards and ledger cards, inclusion of unserviceable properties in the PPE account and appropriate disposal of such properties were not yet undertaken.

Bauang Qualified Property, Plant and Equipment (PPE) account totaling P709.964

million could not be properly ascertained due to (a) the property

and accounting records differ by P474.952 million; (b) properties

included in the Report on the Physical Count of Property, Plant and

Equipment (RCPPE) were not inventoried; and (c) some

unserviceable properties cannot be located;

Cash in Bank – Local Currency – Current Account and Time

Deposits accounts in the total amount of P277,941 million could not

be verified due to non-submission of Bank Reconciliation

Statements, copies of bank statements with returned checks, debit

and credit memoranda, and subsidiary ledgers;

39


Subsidiary ledger and cashbook balances at year-end were not

reconciled;

Various expenses of the LGU amounting to P2.513 million incurred

in CY 2017 were taken up as Prior Period Adjustment for CY 2018.

Burgos Qualified Trust Liability-DRRMF account was overstated and the

corresponding cash accounts of the General Fund and Trust Fund

were understated and overstated, respectively by P4.508 million.

Local Disaster Risk Reduction and Management Fund (LDRRMF)–

Trust transactions amounting to P4.508 million were recorded and

paid out of the General Fund instead of under the Trust Fund

books.

Caba Qualified Property, Plant and Equipment accounts in the aggregate amount of P236.147 million could not be ascertained because physical inventory was not conducted for CY 2018; property cards and Acknowledgement Receipts for Equipment were not maintained; property tags were not posted; and disclosures were not complete.

Luna Qualified Several lapses in the disbursement process of the Municipality

were noted which resulted to non-recording of disbursements

totalling P7.349, million and non-adjustment of stale checks

totalling P.086 million;

Property, Plant and Equipment account with gross amount of

P139.354 million in the books as of December 31, 2018 could not

be ascertained due to: a) non-conduct of the annual physical count;

b) non-reconciliation of Accounting and Property Records; and c)

non-maintenance of subsidiary ledgers, property ledger cards, and

property cards.

Naguilian Qualified Property, Plant and Equipment accounts with net book values

totaling P464.640 million as of December 31, 2018 were doubtful

due to the non-conduct of the yearly physical count and non-

submission of Report on the Physical Count of Property, Plant and

Equipment (RPCPPE).

Pugo Qualified Appropriation and obligation pertaining to RA No. 7171 amounting

to P32.851 million and P.227million, respectively were not

presented in the Statement of Comparison of Budget and Actual

Amounts (SCBAA).

Rosario Qualified Property, Plant and Equipment (PPE) accounts amounting to

P168.609 million (net of accumulated depreciation) could not be

ascertained due to non-submission of Agency’s Inventory Report

resulting from incomplete inventory-taking of properties and non-

maintenance of complete property records.

40


San Gabriel Unqualified

San Juan Qualified Property, Plant and Equipment (PPE) accounts with a gross

amount of P592.393 million as of year-end could not be ascertained

due to unreconciled balance amounting to P10.249 million, non-

conduct of inventory-taking and the non-preparation of the Report

on the Physical Count of PPE.

Santo Tomas Qualified Property, Plant and Equipment (PPE) accounts as presented in the

Financial Statements of the Municipality amounting to P378.812

million (net of accumulated depreciaiton), could not be ascertained

due to the non-conduct of physical inventory and non-maintenance

of complete property records.

Santol Qualified Property, Plant and Equipment (PPE) accounts totaling P392.782

million were of doubtful reliability due to unreconciled balances

resulting from a) incomplete physical inventory; b) incomplete

subsidiary ledger and ledger cards; c) absence of property cards

and property tags on the PPEs; d) no file of Acknowledgement

Receipt of Equipment (ARE); e) non-issuance of Inventory

Custodian Slips (ICS); and f) non-recognition of at least 75% of

Public Infrastructures in the books of account and unrecorded

completed projects such as Road Network, Building and Water

System funded out of Bottom-Up Budgeting (BUB) and Assistance

to Municipalities (AM) amounting to P38.250 million.

Sudipen Qualified Property, Plant and Equipment account with gross amount of

P69.007 million as of December 31, 2018 could not be determined

due to non-reconciliation of book balance and inventory report and

non-maintenance of property records.

Tubao Qualified Property, Plant and Equipment (PPE) account with a total book

value of P95.885 million could not be readily ascertained due to

several deficiencies such as non-reconciliation of records

pertaining to Land, Buildings & Other Structures accounts; non-

maintenance and non-submission of property records and Report

on the Physical Count of PPE.

Pangasinan Qualified Property, Plant and Equipment (PPE) account with a book value of P9.381 billion could not be ascertained due to absence of complete Report of the Physical Count of PPE and lack of complete and updated Property/Subsidiary Ledger Cards and non-provision of depreciation on PPE amounting to P2.154 billion;

Non-reconciliation against cashbook balances of the Cash-in-Bank-Local Currency, Current Account and Time Deposit account totaling P1.079 billion, and existence of various long outstanding and current reconciling items in the Bank Reconciliation Statements in the amount of P250.462 million rendering the balance unreliable;

41


Inclusion of dormant accounts with doubtful existence due to incomplete supporting documents amounting to P29.931 million;

Office Supplies Inventory account amounting to P36.294 million cannot be ascertained due to non-reconciliation of the accounting records with the Report on the Physical Count of Inventories resulting in a discrepancy of P29.031 million; and,

Recording of expenses of P34.298 million whose obligation pertained to prior year’s appropriations and no accounts payable have been set up.

Cities

Alaminos City

Qualified Property, Plant and Equipment (PPE) accounts with book value of

P520.816 million as of year-end was unreliable due to (a)

discrepancy of P49.189 million between the accounting records

and the Report of Physical Count of Property, Plant and Equipment

(RCPPE) and (b) unserviceable properties worth P3.642 million still

included in the PPE account; and,

Local Road Networks totaling P267.871 million as of December 31,

2018 has accounting error/omissions and deficiencies in the

reporting resulting to misstatements of P17.858 million.

Dagupan City Qualified Property, Plant and Equipment (PPE) account with a gross amount

of P1.894 billion as of December 31, 2018 could not be

ascertained due to the failure of the Municipality to conduct the

physical count of PPE for the current year and that the basis of the

Report on Physical Count of PPE (RPCPPE) is the previous year’s

physical count.

Non-compliance with the transition provision for the recognition of

the 75% of Local Road Network System for calendar year 2018.

San Carlos City Qualified Property, Plant and Equipment (PPE) account could not be

ascertained due to the discrepancy of P10.551 million between the

Accounting records and Report on the Physical Count of Property,

Plant and Equipment (RCPPE);

Depreciation cost was not provided for Property, Plant and

Equipment (PPE) valued at P3.404 million under Special Education

Fund (SEF).

Urdaneta City

Qualified Property, Plant and Equipment (PPE) balance of P1.289 billion, net

of accumulated depreciation, only P1.162 billion were not properly

validated and identified, due to the absence of complete report on

physical count of PPE, inventory tags and complete subsidiary

records;

Land wherein the local roads were constructed with an assessed

value of P15.267 million was not recognized on the books,

42


Construction-in-Progress (CIP) – Infrastructure Assets account

with a total balance of P8.362 million as of the year-end did not

reconcile with the Report of the Completed and On-going

Infrastructure Projects from the City Engineering Office showing

the on-going projects as of December 31, 2018 of P4.785 million,

thus posting difference of P3.577 million or 42.78%.

Municipalities

Agno Qualified Property, Plant and Equipment (PPE) account with book value of

P249.374 million as of December 31, 2018 could not be

ascertained with the accounting records due to non-conduct of

complete physical inventory, non-submission of corresponding

report thereon, duly reconciled with the accounting records and

inability of the Municipality to maintain updated, complete and

accurate Property Plant Equipment Ledger Cards (PPELC) and

Property Cards.

Aguilar Qualified Property, Plant and Equipment (PPE) of the Municipality with net

book value of P265.357 million in the books as of December 31,

2018 could not be ascertained due to the non-submission of

complete and updated Inventory Report on Property, Plant and

Equipment and lack of Property, Plant and Equipment Ledger

Cards, and subsidiary ledgers maintained by the Accounting Office.

Alcala Qualified Properties of the municipality with a net book value of P271.384

millon cannot be ascertained due to non-conduct of annual physical

count during the year hence existence and conditions of these

properties cannot be determined thereby affecting the reliability

and accuracy of the Property, Plant and Equipment account

presented in the Financial Statements.

Anda

Qualified Property, Plant and Equipment with book value of P244,918 million

as of December 31, 2018 could not be ascertained due to failure to

conduct complete physical inventory of Property, Plant and

Equipment (PPE) and prepare the report thereon;

Non-provision of depreciation costs of Office Equipment valued at

P.069 million and the non-transfer of the Office Building amounting

to P.678 million from Trust Fund to General Fund; and,

Infrastructure projects totaling to P2 million recorded as

Construction in Progress account already completed in CY 2018

but were not transferred to the appropriate asset account.

Asingan Qualified Property, Plant and Equipment (PPE) accounts amounting to

P207.025, million as of December 31, 2018 could not be readily

ascertained due to non-conduct of annual physical count and non-

preparation/non-maintenance of complete Report of Inventory of

PPE, as well as property records; and,

43


Road Networks account with a carrying amount of P60.347million

could not be ascertained and its existence could not be established

due to failure of the management to: (a) conduct physical count and

submit the Report on the Physical Count of the Road Network

System; (b) maintain a Local Road Inventory and Road Map; and

(c) keep a complete Local Road Network Property Card.

Balungao Qualified Property, Plant and Equipment (PPE) account with a gross amount

of P293.316 million as of December 31, 2018 could not be

ascertained due to the failure of the Municipality to conduct the

physical count of PPE for the current year and that the basis of the

Report on Physical Count of PPE (RPCPPE) is the previous year’s

physical count;

Non-compliance with the transition provision for the recognition of

the 75% of Local Road Network System for calendar year 2018 as

part of the Municipality’s PPE.

Bani Qualified Property, Plant and Equipment (PPE) account with book value of

P170.421 million could not be established due to non-maintenance

of complete and updated Property Ledger Cards and Property

Cards and absence of a Report on the Physical Count of PPE;

Some PPE items totaling to P13.346 million were erroneously

recorded as Furniture and Fixtures and Disaster Response and

Rescue Equipment accounts in the books of accounts, thus,

understating the Communication Equipment and Buildings

accounts by P.121 million and P13.225 million, respectively;

Accuracy and reliability of the Accumulated Depreciation accounts

amounting to P35.730 million could not be ascertained due to

Management’s failure to provide a complete and detailed schedule

of depreciation.

Five percent (5%) residual value of fully depreciated assets could

not be verified due to the same reason.

Basista Qualified Property, Plant and Equipment (PPE) with net book value of

P61.894 million could not be ascertained due to the failure of the

Municipality to conduct physical inventory of its Property, Plant and

Equipment and the General Services Officer- Designate and

Municipal Accountant did not maintain the prescribed Property

Cards and Property, Plant and Equipment Ledger Cards,

respectively.

Bautista Qualified Properties of the municipality with a net book value of P138.610

million cannot be ascertained due to non-conduct of annual

physical count during the year.

44


Bayambang Qualified Property, Plant and Equipment (PPE) account with book value of

P645.517 million could not be ascertained due to the discrepancy

of P215.428 million between the accounting records and Report on

the Physical Count of Property, Plant and Equipment (RCPPE).

Binalonan Qualified Property, Plant and Equipment (PPE) with a net amount of

P395.272 million could not be ascertained due to the inability of the

municipality to conduct complete physical count of its properties.

Binmaley Qualified Property, Plant and Equipment (PPE) account balance with a net

book value of P295,837million at year-end could not be ascertained

due to non-inventory taking of properties and non-maintenance of

complete property records and ledger cards for each PPE account;

Unserviceable properties were still included in the PPE account

balance and were not yet disposed of, thereby depriving the LGU

of higher net realizable value upon immediate disposal thereof;


established due to failure of the personnel concerned to undertake

complete physical count and non-recognition of expenses for all

issued and consumed items;

Accounts payable totaling to P2.835 million could not be

ascertained due to the absence of documents to establish the

claims and were not reverted to unappropriated surplus despite of

being outstanding for more than two years; and,

Real Property Tax and Special Education Tax Receivable accounts

showed abnormal balances of (P.789 million) and (P.809 million),

respectively;

Bolinao Qualified Property Plant and Equipment (PPE) account with book value of

P338,258 million could not be ascertained due to inability to

maintain updated, complete and accurate Property Plant

Equipment Ledger Cards (PPELC) and Property Cards, non-

conduct of complete physical inventory and non-submission of

corresponding report duly reconciled with the accounting records.

Bugallon Qualified Real Property Tax Receivable account amounting to P4.468 million

as of December 31, 2018 was established based on estimates, and

SET Receivables account under Special Education Fund was not

set up at the beginning of the year.

Burgos Qualified Road Networks account amounting to P72,301 million as of

December 31, 2018 could not be ascertained due to non-

preparation of Inventory of Local Roads and Road Map,

deficiencies in the preparation of Report on the Physical Count of

Local Road Network, non-disclosure and recording of valid and

existing road components constructed prior to year 2010 and non-

provision of depreciation on all road network components

45


Calasiao Qualified PPE account of P543.317 million could not be ascertained due to

incomplete and unreconciled Report on the Physical Count of

Property, Plant and Equipment (PPE) and lack of complete and

updated PPE Property/Ledger Cards with book value; and,

Non-depreciation of some PPE accounts valued at P7.012 million,

thus; and estimates were used in setting-up the Real Property Tax

(RPT).

Dasol Qualified Property, Plant and Equipment (PPE) account with net book value


ascertained due to the 1) absence of a Report on the Physical

Count of PPE (RPCPPE) and non-maintenance of complete and

updated PPE Ledger Cards and Property Cards, 2) absence of

Transfer Certificates of Title (TCT) for the total Land recorded in

the books amounting to P12.064 million; and 3) misclassification of

PPE items with net carrying value of P2.453 million and erroneous

recording of mobilization fee amounting to P3.600 million under

Construction in Progress account.

Infanta Qualified Property, Plant and Equipment (PPE) account with book value of

P281.132 million was not reconciled with the Report on the

Physical Count of PPE of the Municipality showing a discrepancy

of P222.584 million; and,

Accounting office and the GSO did not maintain separate ledger

cards for every PPE and prescribed formant of property cards,

respectively.

Labrador Qualified PPE account with book value of P247.734 million could not be

ascertained due to the non-submission of the Report on the

Physical Count of PPE, and the lack of complete and updated

Property/Equipment Ledger Cards.

Lingayen Qualified Property, Plant and Equipment (PPE) account with a book value of

P453.325 million could not be established due to the absence of a

Report on the Physical Count of PPE and non-maintenance of

complete and updated Property, Plant and Equipment Ledger

Cards, Property Cards and other documents;


ascertained due to the non-conduct of physical count and non-

recognition of expenses for all issued items;

Real Property Tax Receivable and Deferred Real Property Tax

Income were erroneously recorded and Special Education Tax

Receivable and Deferred Special Education Tax Income were not

set-up, thus, resulted in zero balances of said accounts; and,

46


Dormant unliquidated fund transfers and Due to LGUs accounts

amounting to P2.194 million and P3.085 million, respectively, as of

December 31, 2018 remained in the books for more than 10 years

with no supporting documents or records.

Mabini Qualified Property, Plant and Equipment with a book value of P177.088

million in the books as of December 31, 2018 could not be

ascertained due to the non-submission of the required Report on

Physical Count of Property, Plant and Equipment and lack of

Property, Plant and Equipment (RPCPPE) and absence of

complete and updated Property Cards and PPE Ledger Cards.

Malasiqui Qualified PPE account with net book value of P 449.782 million could not be

ascertained due to absence of Report on the Physical Count of

Property, Plant and Equipment (PPE) and lack of complete and

updated Property/Subsidiary Ledger Cards;

Non-provision of depreciation cost of some Property, Plant and

Equipment (PPE) account with total book value of P19.071 million

resulted in the understatement of expense accounts and

overstatement of government equity account; and


receivables had zero balances at the end of the year and no duly

updated Real Property Tax Account Register (RPTAR) was

submitted in setting up of the Receivables at the beginning of the

year;

Manaoag Qualified Property, Plant and Equipment (PPE) accounts amounting to

P397,313 million as of December 31, 2018 could not be readily

ascertained due to non-conduct of annual physical count and

absence of records among which is the ledger cards; and,

Road Networks account with a carrying amount P171.705 million

could not be ascertained and its existence could not be established

due to failure of the management to: (a) conduct physical count and




Mangaldan Qualified Property, Plant and Equipment (PPE) accounts amounting to

P92.380 million as of December 31, 2018 could not be readily


absence of records among which is the ledger cards; and,

Road Networks account totaling P37.437 million could not be

ascertained and its existence could not be established due to

failure of the management to: (a) conduct physical count and




47


Mangatarem Qualified Property, Plant and Equipment (PPE) of the Municipality with book

value of P434.352 million could not be ascertained due to non-

conduct of physical inventory of Property, Plant and Equipment and

lack of PPE ledger cards and subsidiary ledgers.

Mapandan Qualified Loans Payable – Domestic account in the financial statements was

understated by P.292 million due to the non-recognition of

expenses related to the acquisition of loan at the end of the year.

Natividad Qualified Property, Plant and Equipment (PPE) account with a total net book value of P190.238 million was not physically counted and the Report of Physical Count of Property, Plant and Equipment (RPCPPE) is not prepared/ maintained by the LGU to validate its accuracy and reliability.

Pozzorubio

Qualified Property, Plant and Equipment (PPE) with a net amount of


municipality to conduct complete physical count of properties.

Rosales Qualified Property, Plant and Equipment account with a total net book value

of P809.430 million could not be ascertained due to the huge

discrepancies amounting to P303.118 million between the

accounting records and the report on Physical Inventory of PPE.

San Fabian Qualified Property, Plant and Equipment (PPE) with a gross amount of P

152,742 million as of December 31, 2018 could not be ascertained

due to the failure of the Management to conduct physical count for

the current year and the absence of the RPCPPE; and,

Reconciling items appearing in the Bank Reconciliation Statement

(BRS) as of December 31, 2018 termed as “Un-accounted Bank

Credits” amounting to P 1.327 million remained un-adjusted in the

books of accounts that eventually lead to inaccurate balance of

Cash in Bank- Current Account as of year-end.

San Jacinto Qualified Property, Plant and Equipment (PPE) accounts amounting to

P1.434 billion as of December 31, 2018 could not be readily


absence of records; and,


ascertained and its existence could not be established due to

failure of the management to: (a) conduct physical count and




San Manuel


P406.636 million could not be readily ascertained due to the

inability of the municipality to conduct complete physical count of

properties.

48


San Nicolas Qualified Property, Plant and Equipment (PPE) accounts amounting to

P154.921 million was not physically counted and the Report on

Physical Count of Property, Plant and Equipment (RPCPPE) is not

prepared/maintained by the LGU to validate its accuracy and

reliability; and,

Road Networks account amounting to P42.176 million could not be

established due to failure of the management to: (a) conduct

physical count and submit the Report on the Physical Count of the

Road Network System; (b) maintain a Local Road Inventory and

Road Map; and (c) keep a complete Local Road Network Property

Card.

San Quintin Qualified Property, Plant, and Equipment acquired by the municipality from

calendar year 2017 backwards with a total gross value of P107.967

million as of year-end are doubtful due to non-completion of annual

physical inventory for calendar year 2018.

Santa Barbara Qualified Property, Plant and Equipment (PPE) account could not be

ascertained due to incomplete and unreconciled Report on the

Physical Count of PPE and lack of complete and updated PPE

Property/Ledger Cards.

Santa Maria Qualified Annual physical inventory-taking was not undertaken by the Municipality, thereby casting doubt on the management assertion on existence, completeness and accuracy of the reported gross value of PPE accounts totaling P296.882 million at year-end.

Santo Tomas Unqualified

Sison



municipality to conduct complete physical count of properties.

Sual Qualified Property, Plant and Equipment (PPE) account with book value of

P1.081 billion could not be ascertained due to the absence of a

Report on the Physical Count of PPE and lack of complete and

updated PPE Ledger Cards and Property Cards;

Various adjustments to Real Property Tax and Special Education

Tax Receivables were not effected by Management; hence,

rendering the ending balances of RPT/SET receivable accounts as

at year-end amounting to P801.960 million and P714,170 million,

respectively, unreliable;

Long outstanding reconciling items presented in the Bank

Reconciliation Statements in the total amount of P8.586 million

remained unadjusted in the books of accounts as of December 31,

2018 contrary to the requirements of COA Circular No. 96-011;

49


Fund transfers from National Agencies that were already disbursed

in the implementation of different projects remained in the book of

accounts due to non-submission of liquidation reports, thus,

resulting in the overstatement of Due to NGAs account by P56.691

million and understatement of the Government Equity account by

the same amount; and

Obligations amounting to P10.014 million were taken up as

Accounts Payable in the Special Education Fund (SEF) books

despite the absence of sufficient evidence to support valid claims

and proper authority for its incurrence

Accounts payable amounting to P5.520 million remained

outstanding and unsettled for two years or more, thus, casting

doubts on the validity and reliability of the Payable account.

Tayug

Qualified Annual physical inventory-taking was not undertaken by the

Municipality, thereby casting doubt on the management assertion

on existence, completeness and accuracy of the reported gross

value of PPE accounts totaling P277.857 million at year-end;

Umingan Qualified Property, Plant and Equipment (PPE) accounts totaling P238.677


failure to conduct inventory of its Property, Plant and Equipment;

and,

Purchases of medicines in bulk amounting to P3.196 million were

recorded in the books of accounts as an outright expense instead

of inventory account, thereby overstating the expense account

while understating the inventory account.

Urbiztondo Qualified Property, Plant and Equipment-Road Networks with book value of

P51.144 million could not be ascertained due to the absence of

actual physical count on road network and non-preparation of the

Report on Physical Count of Local Road Network (RPCLRN) and

Report on Local Road Network.

Villasis Unqualified

REGION II - Cagayan Valley

Batanes Qualified Reliability of long outstanding cash advances totaling P8.458

million as of year-end;

Property, Plant and Equipment (PPE) valued at P257.259 million

could not be ascertained due to the non-submission of the Report

on the Physical Count of Property, Plant and Equipment

(RPCPPE);

50


Infrastructure Assets in the Property, Plant and Equipment account

with carrying value of P50.993 million could not be ascertained due

to the non-preparation of the Report on Physical Count of Local

Road Network (RPCLRN) to support the recorded balance and

non-disclosure in the Notes to Financial Statements; and,

Non-liquidation of fund transfers to Local Government Units amounting to P.879 million as at year-end.

Municipalities

Basco Unqualified

Itbayat

Qualified Property, plant and equipment accounts amounting to P22.209 million are not reliable due to non-recording of Local Road Networks and the absence of the required reports therein.

Ivana Qualified Property, Plant and Equipment (PPE) account as of December 31, 2018 in the books of the Municipality is unreliable due to unreconciled amount of P10.5 million between the accounting records and the Report on the Physical Count of Property, Plant and Equipment and incorrect accounting entries on the collection of advance payments of Real Property Tax and Special Education Tax that resulted to a negative balance in the financial statements amounting to P.420 million and P.083 million, respectively.

Mahatao Unqualified

Sabtang

Qualified Property, Plant and Equipment (PPE) valued at P38,998,410.92 could not be ascertained due to the non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE); and,

Cash advances for local travel in the total amount of P.293 million remained unliquidated as of year-end.

Uyugan

Qualified Existence and valuation of the properties could not be relied upon due to the presence of unserviceable Property, Plant and Equipment of P2.750 million and failure to conduct physical count.

Cagayan Qualified Non-settlement of cash advances totaling P65.730 million as of year-end affected the reliability of the assets, expenses and government equity accounts;

Non-liquidation and/or non-reconciliation of fund transfers to other LGUs and various national government agencies in the amount P2.521 million and P57.742 million, respectively, rendered the Due from Other LGUs and Due from NGAs accounts unreliable;

Non-collection of past due Other Receivables amounting to P11.930 million affected the reliability and validity of said account; and,

51


Non-collection of long outstanding loans granted to other LGUs and various individuals in the total amount of P1.922 million and P36.398 million, respectively, rendered the balance of the Loans Receivable-LGUs and Loans Receivable-Others unreliable.

City

Tuguegarao City

Qualified Cash in Bank-Local Currency Current Account balances of the

three funds totaling P479.663 million are not reliable due to the

unadjusted reconciling items and the delay in the preparation of the

monthly Bank Reconciliation Statements;

Receivables-Disallowances/Charges account, with a balance of

P.761 million does not reflect the correct amount of disallowances

that are final and executory;

Other Receivables account under the General Fund showed

negative balances totalling P.262 million and various reconciling

items amounting to P2.487 million;

Road Networks account of P527.848 million could not be

ascertained due to failure to follow accounting and reporting

guidelines on local roads asset management embodied in COA

Circular No. 2015-008;

School buildings and other structures equipment, furniture and

fixtures, with total net book value of P146.673 million, are carried

in the books of accounts of the City Government, instead of these

being transferred to the City Schools Division Office/Department of

Education; and

Property, Plant and Equipment accounts, with gross value of

P2.376 billion could not be ascertained due to Management’s

failure to conduct complete physical inventory.

Municipalites

Abulug Qualified Accounting and reporting guidelines on local roads asset management embodied in COA Circular No. 2015-008 were not strictly observed by concerned departments, thus the correctness of the balance of Road Networks account of P99.672 million as of December 31, 2018 could not be ascertained.

Alcala Qualified Property, Plant and Equipment (PPE) account, with a carrying amount of P97.714 million, could not be ascertained due to the following:a) Non-conduct of physical count of majority of its PPE accounts; b) Incomplete details of Report on Physical Count of Property, Plant and Equipment (RPCPPE); c) Failure to maintain PPE Ledger Cards and Property Cards; and, d) Unreconciled balances on the inventoried PPE between the financial statements and RCPPE by P1.133 million;

52


Allacapan Qualified Road Networks account as part of LGU’s Property, Plant and Equipment (PPE) valued at P110.724 million (net of depreciation) as of December 31, 2018 could not be ascertained due to the failure of the LGU officials concerned to strictly observed complete and proper accounting and reporting guidelines on local road network system.

Amulung Qualified Property, Plant & Equipment with a net book value totaling

P199.266 million could not be relied upon due to the failure of the

Municipality to conduct physical inventory of all its properties and

the non-submission of Inventory Report;

Unrecorded Real Property Tax (RPT) – Basic, Discount of Real

Property Tax-Basic, and Fines and Penalties – Property Taxes

amounting to P.120 million, P.077 million and P.245 million,

respectively, which resulted in the understatement of the Tax

Revenue account by P.288 milllion;

Share of the Special Education Fund (SEF) totaling P2.339 milllion

in the collection of RPT for CY 2018 was recorded in the books of

the General Fund under the Real Property Tax Receivable account

instead of in the SEF books under the Special Education Tax

Receivable account, thus understating the RPT Receivable

account in the General Fund and overstating the Special Education

Tax Receivable account; and

Discrepancy between the Real Property Tax Receivable and Special Education Tax Receivable accounts amounting to P8.584 million.

Aparri Qualified Compliance of the Municipality with the transition provision on the

phased recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of calendar year 2018 cannot be ascertained because the Municipality was not able to observe the proper accounting and reporting guidelines prescribed under COA Circular No. 2015-008 dated November 23, 2015 thus, casts doubt on the fair presentation of the “Road Network” account amounting P120.762 million as at December 31, 2018.

Baggao Qualified Reliability and existence of Property, Plant and Equipment (PPE)

account, with a carrying amount of P227.972 million, could not be ascertained due to the non-conduct of physical count of some PPE accounts, incomplete Report on Physical Count of Property, Plant and Equipment (RPCPPE) and failure to maintain PPE Ledger Cards and Property Cards.

Ballesteros Qualified Property, Plant and Equipment (PPE) stated at P98.787 million or

38.56% of the total assets as at December 31, 2018 could not be ascertained due to non-inventory taking, inadequacies of subsidiary records and accounting deficiencies.

53


Buguey Qualified Correctness and validity of the Property, Plant and Equipment account valued at P141.475 million (net of depreciation) could not be ascertained due non- recognition of at least 75% of Local Road and Road Network System and non-recording of procured Fire Truck in books of the Municipality.

Calayan Qualified Failure to comply with the transitory provision on the phased

recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of calendar year 2018 pursuant to Item IX of COA Circular No. 2015-008 dated November 23, 2015 thus, affecting the fair presentation of the “Road Network” account amounting to P4.981 million as at December 31, 2018.

Camalaniugan Qualified Discrepancy between the value of Property, Plant and Equipment

in the financial statements and the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) amounted to P51.317

million due to the continued non-reconciliation and non-

maintenance of Real Property Ledger Cards; and,

Non-compliance with the transition provision on the phased recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of calendar year 2018 as mandated under Item IX of COA Circular No. 2015-008 dated November 23, 2015 resulting in understated balance of the “Road Network” account and the total assets of the Municipality.

Claveria Qualified Property, Plant and Equipment account valued at P93.989 million

(net of depreciation) could not be ascertained due to the non-recognition of at least 75% of Local Road and Road Network System in the books of the Municipality.

Enrile

Qualified Property, Plant and Equipment, with carrying value of P171.982

million, could not be ascertained due to: (a) non-provision of

depreciation for some PPEs totaling P45.427 million; (b) the

carrying value of the PPE Account in the Statement of Financial

Position does not reconcile with the balances of the individual

accounts in the supporting Schedule of PPEs; (c) the presence of

discrepancies between the general ledger account balances and

the results of the physical inventory; and (d) non-maintenance of

PPE Ledger Cards by the Accounting Office;

Balances of the following accounts could not be relied upon: a)

RPT/SET Receivables amounting to P2.664 million, due to the

failure of the Municipal Treasurer to furnish a duly certified list

showing the names of taxpayers, the amount due and collectible

for the year to the Municipal Accountant, and the non-maintenance

of subsidiary ledgers by the Municipal Accountant; b) Deferred

RPT/SET amounting to P2.664 million, due to the failure of the

Municipal Accountant to record an adjusting entry for the

realized/earned Tax Revenue – RPT/SET at year-end and the non-

maintenance of subsidiary ledgers; c) Other Payables Account

under the Trust Fund amounting to P1.385 million , due to the

inclusion of transactions which pertain to other accounts;

54


Various accounts under the General Fund and Trust Fund totaling

P1.980 million were of doubtful validity since these accounts had

been dormant for 5 to 38 years.

Balances of the following accounts could not be relied upon due to

absence of supporting schedules/subsidiary records to

substantiate the same: a) Other Payables under the General Fund

amounting to P.027 million; b) Due to NGAs under the General

Fund and Trust Fund amounting to P1.172 million and P10.629

million, respectively; c) Due to LGUs under the General Fund

amounting to P2.863 million; d) Receivables –

Disallowance/Charges under the Special Education Fund and

Trust Fund amounting to P732.01 and P.034 million, respectively;

e) Due from Other Funds totaling P1.278 million; f) Due to Other

Funds amounting to P1.278 million; and, g) Inventories amounting

to P2.044 million.

Advances for Special Disbursing Officer totaling P.216 million

remained unliquidated at year-end;

LDRRMF unexpended balance totaling P.126 million was not

transferred to the Special Trust Fund at year-end, rendering the

Account Trust Liabilities -DRRM understated;

Due to GSIS, Due to PHIC and Due to Pag-Ibig accounts

amounting to P.125 million, P.032 million and P.198 million,

respectively, do not reflect the actual amount payable because

prior years’ understatements were not corrected; and,

Accounting and reporting guidelines on local roads asset

management embodied in COA Circular No. 2015-008 were not

strictly observed by concerned departments, thus the correctness

of the balance of Road Networks account of P30.460 million could

not be ascertained.

Gattaran

Qualified Property, Plant and Equipment (PPE) account, with a carrying amount of P280.714 million could not be ascertained due to the unreconciled balances between the Statement of Financial Position and the PPE Lapsing Schedule by P7.506 million; and

Property, Plant and Equipment (PPE) account, with a carrying amount of P223.516 million, could not be ascertained due to non-conduct of physical count of some PPE accounts, incomplete Report on Physical Count of Property, Plant and Equipment (RCPPE) and failure to maintain PPE Ledger Cards and Property Cards.

Gonzaga Qualified Failure to comply with the transitory provision on the phased recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of calendar year 2018 pursuant to Item IX of COA Circular No. 2015-008 dated November 23, 2015, thus, affecting the fair presentation of the “Road Network” account amounting to P65.573 million as at December 31, 2018.

55


Iguig

Qualified Cash in Bank, Local Currency Current Account of P59.548 million

for all funds as of December 31, 2018 could not be relied upon due

to the non-preparation of Monthly Bank Reconciliation Statements

by the Municipal Accountant; and,

Property, Plant and Equipment totaling P156.339 million could not be relied upon due to the failure of the Municipality to conduct physical inventory on all its properties and the non-submission of Report on the Physical Count of Property, Plant and Equipment (RPCPPE) thereon.

Lal-lo Qualified Failure to comply with the transition provision on the phased recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of calendar year 2018 as mandated under Item IX of COA Circular No. 2015-008 dated November 23, 2015 due to the absence of Local Road Inventory and Road Map, thus, casts doubt on the fair presentation of the “Road Network” account in the financial statements.

Lasam Qualified Road Networks account as part of LGU’s Property, Plant and Equipment (PPE) valued at P23.772 million (net of depreciation) as of December 31, 2018 could not be ascertained due to the failure of the LGU officials concerned to strictly observed complete and proper accounting and reporting guidelines on local road network system.

Pamplona Qualified Property, Plant and Equipment, as well as the correctness and validity of the account valued at P84.786 million (net of depreciation) could not be ascertained due to the non-recognition of at least 75% of Local Road and Road Network System in the books of the Municipality.

Peñablanca

Qualified Cash in Bank - Local Currency Current account that pertains to the two (2) bank accounts of the LGU amounting to P.760 million could not be relied upon due to the non-preparation of Monthly Bank Reconciliation Statements by the Municipal Accountant; while the difference of P.355 million between the Bank Balance per BRS in the General Fund Proper account and the bank confirmation reply cannot be verified due to the non-submission of the supporting documents; and,

Property, Plant and Equipment account appearing in the Financial Statement with the total amount of P250.362 million (net of Road Networks) as of year – end cannot be relied upon due to (a) non-maintenance of Property, Plant and Equipment ledger cards by the Accounting Office; and (b) the failure of the Accounting and General Services Office to correct, adjust and record the unreconciled balances between the books and the physical inventory reports.

Piat

Qualified Stale checks totaling P.554 million, which have been long outstanding, remained unadjusted and continuously reported in the Bank Reconciliation Statements;

Property, Plant and Equipment (PPE), with a carrying value of P30.447 million, could not be ascertained due to a discrepancy of (P5.476 million) between the accounting records and inventory reports;

56


Reconciling items in the Bank Reconciliation Statement-General Fund totaling P2.713 million remained unadjusted; and,

Supplies and materials in the total amount of P6.230 million procured in CY 2018 were treated as outright expense instead of using the “Inventory” account.

Rizal

Qualified Cash advances totaling P4.891 million remained unliquidated at

year-end because Management did not strictly enforce the rules

and regulations on the grant, utilization, and liquidation of cash

advances under COA Circular No. 97-002 dated February 10,

1997;

Receivable accounts for Real Property Tax and Special Education

Tax, totaling P12.066 million could not be ascertained due to

absence of a duly certified list showing the name of taxpayers and

the amount due and collectible for the year,

Low collection efficiency of 6% owing to the lack of intensive tax

campaigns and no-enforcement of remedies against delinquent

taxpayers as provided under Section 254 (a) of R.A. No. 7160 or

the Local Government Code;

No documents or records that support the details of the

transaction/s and the rightful names of government agencies

pertaining to “Due from National Government Agencies (NGAs)”,

“Due from Government Owned and/or Controlled Corporations

(GOCCs)” and “Due from Local Government Units (LGUs)”

accounts totaling to P.048 million, P2.163 million and P1.917

million, respectively;

Property, Plant and Equipment (PPE)-General Fund, with a

carrying value of P67.004 million, could not be ascertained due to

a discrepancy between the accounting records and inventory

reports;

Disclosure requirements in the Notes to Financial Statements

under the International Public Sector Accounting Standards

(IIPSAS) 1 were not fully observed; and,

Disbursement vouchers amounting to P1.808 million were not submitted to the Auditor concerned for audit contrary to Sections 39(1) and 39(3) of Presidential Decree No. 1445 and created doubts on the regularity and propriety of the payments made.

Sanchez-Mira Qualified Property, Plant and Equipment account valued at P131.880 million

(net of depreciation) could not ascertained due to the non-recognition of at least 75% of Local Road and Road Network System in the books of the Municipality.

57


Santa Ana Qualified Failure to comply with the transitory provision on the phased recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of calendar year 2018 pursuant to Item IX of COA Circular No. 2015-008 dated November 23, 2015 thus, affecting the fair presentation of the “Road Network” account amounting to P48.501 million as at December 31, 2018.

Santa Praxedes Qualified Property, Plant and Equipment account valued at P69.537 million (net of depreciation) could not be ascertained due to the non-recognition of at least 75% of Local Road and Road Network System in the books of the Municipality. The audit team was not able to apply other alternative audit procedures in determining the correct amount of said accounts.

Santa Teresita Qualified Failure to able to comply with the transition provision on the phased recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of calendar year 2018 as mandated under Item IX of COA Circular No. 2015-008 dated November 23, 2015 due to lacking Registry for Public Infrastructure and Local Road Inventory and Road Map, thus affecting the fair presentation of the “Road Network” account amounting P.983 million as at December 31, 2018.

Santo Niño

Qualified Unreconciled balance of Cash in bank account by P15.804 million between the general ledger and bank confirmation as a result of the non-preparation of Bank Reconciliation Statements, hence, the balance of the Cash in Bank Account appearing in the financial statements as of December 31, 2018 of P95.700 million cannot be ascertained.

Inventories and Property, Plant and Equipment accounts amounting to P3.616 million and P162.125 million, respectively, could not be ascertained due to the non-conduct of physical count of Inventories and PPE and the non-submission of the Report of

Physical Count of Inventories and Report on the Physical Count of Property, Plant and Equipment;

Road Network account, with a total cost of P25.232 million, and Water Supply System account, with a total cost of P2.164 million were not provided with depreciation expense;

Advances to Officer and Employees totaling P1.125 million remained unliquidated as of year-end;

Intra-Agency accounts, Due from Other Funds and Due to Other Funds of P34.694 million and P.056 million, respectively, are unreliable due to the disparity of P34.638 million.

Solana Unqualified

Tuao

Qualified Interest of the loan granted by the Development Bank of the Philippines to the Municipality for the construction of public market amounting to P1.467 million was treated as an expense;

Disclosure requirements in the Notes to Financial Statements under the International Public Sector Accounting Standards (IPSAS) 1 were not fully observed;

58


Road Network account, with a total cost of P9.819 million was not provided with depreciation expense as required under Paragraph 66 of International Public Sector Accounting Standards (IPSAS) 17 and Item IV of COA Circular 2015-008 dated November 23, 2015.;

Receivables and Deferred Income account balances of Real Property Tax and Special Education Tax (RPT/SET) of P2.972 million and P1.774 million, respectively, were unreliable due to non setting-up of RPT and SET receivables and inaccurate recording of collections; and,

The Municipality entered into related party transactions, which were not disclosed in the Notes to Financial Statements.

Isabela

Qualified Cash balance of the Provincial Government of Isabela (PGI) amounting to P3.382 billion as of December 31, 2018 could not be ascertained due to unrecorded collection of hospital fees amounting to Three Million Two Hundred Seventy Nine Thousand Five Hundred Sixty Nine Pesos (P3.280 million);

Advances to Officers and Employees account as of December 31, 2018 amounting to P21.542 million cannot be ascertained due to the following deficiencies/errors, to wit:

a. Various cash advances for travel were not liquidated within the prescribed period; were not duly supported with required documents; and,

b. The granting of cash advances for travel is not compliant with Executive Order No. 248, as amended by Executive Order No. 298 and Section 3.1.1.1 of COA Circular No. 96-004.

Advances to Special Disbursing Officer account in the amount of P411.267 million could not be ascertained due to cash advances which were not liquidated within the periods prescribed in COA Circular No. 97-002;

Advances granted for operating expenses and to special disbursing officers were not supported with documents;

Reconciliation of the current balance of account Due from Local Government Units (LGUs) and Due from Non-Government Organizations/ People’s Organizations (NGOs/POs) amounting to P65.400 million and P.455 million, respectively, as of December 31, 2018 showed a total difference of P3.447 million based on confirmations conducted;

The granting of Bro Livelihood Assistance amounting to P.220 million as of October 31, 2018 was taken up as expense recorded and debited to Other Maintenance and Operating Expenses account instead of Loans Receivables-Others account; and,

Real Property Tax-Basic account amounting to P58.094 million as of December 31, 2018 could not be ascertained due to non-recording of Real Property Tax-basic at the beginning of the year.

59


Cities

Cauayan City

Qualified Parcels of land with a total acquisition cost of P54.302 million were not yet transferred in the name of the City Government; and,

Donated lands to schools amounting to P.844 million are still in the books of accounts of the city; and,

Land owned by city with a market value amounting to P189.270 million were not recorded in the books of accounts.

Ilagan City

Qualified Other Receivables account amounting to P14.657 million was not fairly presented at its net realizable value as of December 31, 2018; and,

Reported year-end net carrying value for Property, Plant and Equipment account at P1.826 billion was not reliable because (a) the different classes composing the PPE were not adequately supported by subsidiary ledgers contrary to Section 13, Volume II of the New Government Accounting System (NGAS); (b) the PPE account balance does not reconcile with the balance per Report on the Physical Count of Property, Plant, and Equipment (RPCPPE) amounting to P844.379 million or a difference of P982.055 million; and (c) the recorded Road Networks account amounting to P814.282 million, net of accumulated depreciation in the books cannot be fully ascertained whether this represents at least 75 percent of the entire road networks of the City Government .

Santiago City Qualified Property, Plant and Equipment (PPE) stated at P4.011 billion, or

87% of total assets, as at December 31, 2018 could not be

ascertained due to incomplete inventory taking, unreconciled

discrepancy of P3.4 billion between accounting and property

records, inclusion of unserviceable properties totaling P218.967

million, inadequacies of subsidiary records and accounting

deficiencies, and non-recognition of Road Networks account from

its Registry of Public Infrastructure totaling P401.547 million;

Cash-in-bank accounts totaling P1.167 billion as of December 31,

2018 cannot be ascertained due to (a) variance of P19.470 million

between the Accounting Records and Treasury Records, (b)

current and prior years’ book and bank reconciling items were not

immediately adjusted and/or remained unadjusted; and (c) failure

of the City Accountant’s Office to prepare and submit monthly Bank

Reconciliation Statements (BRS) together with the paid checks and

original copies of debit/credit memos;

Inventory accounts amounting to P115.894 million at year-end is

unreliable and their existence and completeness could not be fully

established due to (a) non-conduct of physical count of Inventories;

(b) purchases of supplies and materials totaling P158.500 million

directly recorded as expenses; and (c) non-maintenance of stock

ledger cards and stock cards;

60


Accounts Payable and Due to Officers and Employees accounts

amounting to P106.813 million and P9.236 million, respectively, are

unreliable due to (a) variance of P3.271 million and P3.808 million

from their respective subsidiary ledgers’ balances, and (b) inclusion

of long outstanding payable accounts unclaimed for more than two

(2) years;

Unable to utilize P1.226 billion or 77% of the programs and projects

out of the P1.585 billion appropriations for 20 percent Development

Fund (DF) depriving the intended beneficiaries on the

consequential socio-economic and environmental benefits that

could have been derived therefrom;

Efficiency and effectiveness of projects implemented from fund

transfers from National Government Agencies with a book balance

of P59.490 million were not fully evaluated due to absence of

subsidiary records and incomplete submission of Memoranda of

Agreement, Status Reports, Liquidation Reports and other

pertinent documents to facilitate audit contrary to Section 6 of COA

Circular No. 94-013 dated December 13, 1994; and

Failure to maximize its revenue earning capacity due to non-renewal of the expired lease contracts of five hundred seventy (570) market stallholders or 86% of the total market stalls aging from 5 months to more than 20 years of non-renewal.

Municipalities

Alicia Unqualified

Angadanan

Qualified Property, Plant and Equipment accounts with a net book value of

P394.752 million cannot be fully established;

Accounting and reporting procedures on the recognition of Local

Roads Assets with a net book value of P283.863 million was not

yet fully complied;

Non-current liability amounting to P1 million was not founded upon

any valid contractual agreement; and,

Non-moving Biological Assets account balance of P.625 million as of December 31, 2018 was not fairly presented and disclosed due to the: (a) unrecorded biological assets, b) non-preparation of ledger and property cards and (c) unrecognized changes in the assets inconsistent with International Public Sector Accounting Standards (IPSAS) No. 27, Section 4.5 of COA Circular No. 2016-004 dated September 30, 2016, and Section 114, Volume I of the New Government Accounting System Manual (NGAS) for Local Government Units.

Aurora Unqualified

61


Benito Soliven

Qualified Real Property Tax (RPT) and Special Education Tax (SET)

Receivable amounting to P8.081 million and P8.080 million

respectively, cannot be ascertained;

Disallowance which had become final and executory totaling P.431

million was not recorded in the books;

Lack of records and inconsistencies of information in the subsidiary

ledger renders the account Due from Officers and Employees

totaling P1.178 million unreliable;

Advances to Officers and Employees totaling P2.401 million;

Updated inventory of local roads under the LGU’s jurisdiction is still

on going;

Lot which was donated years back was not yet derecognized in the

books;

Non-observance of capitalization threshold for Property, Plant and

Equipment resulted to an overstatement of PPE accounts by P.679

million and accumulated depreciation by P2.139 million;

No depreciation was provided to Property, Plant and Equipment

amounting to P38.228 million as of December 31, 2018 thus

overstating the asset account and understating the expense

account;

Property, Plant and Equipment (PPE) with a carrying amount of

P151.212 million could not be ascertained due to (a) non-

reconciliation of accounts and incomplete inventory taking and (b)

lapses identified on the detailed schedule of annual depreciation

due to erroneous computation, recognition of residual value for

road networks and non-specification of necessary details to

substantiate the computed annual depreciation;

Loan cannot be established since the balance of P2.641 million

presented in the Statement of Financial Position, do not conform

with the balance of P2.601 million; and,

Terminal Leave Benefits was recognized in the books of accounts only upon actual payment/settlement regardless of the period when it was incurred resulting to misstatement of the liability and equity accounts amounting to P.358 million and P1.438 million.

Burgos

Qualified Recognition of various Municipal Roads under Road Network (1-07-03-010) account totaling P62.024 million was not supported with Registry of Public Infrastructures and Report on the Physical Count of Local Road Network (RPCLRN) duly prepared by the Inventory Committee and Local Road Network Map;

62


Road Networks Account totaling P62.024 million was not provided with any depreciation;

Inaction on the audit observation relative to stale checks totaling P.083 million reflected in the bank reconciliation statements as outstanding checks rendered the cash in bank account balances unreliable as of December 31, 2018;

Request for write-off for the Due from National Government Agencies Account – Trust Fund account amounting to P.297 million was not facilitated and filed to the Commission on Audit; and,

Financial assistance granted to various Non-Government Organizations and Peoples Organizations (NGOs/POs) and individuals totaling P.567 million;

Other Receivables Account amounting to P.242 million were likewise dormant since 2003.

Cabagan

Qualified Other Receivables amounting to P.067 million had been outstanding for more than 10 years;

Due to LGU amounting to P95.361 million as of December 31, 2018 was not supported with a subsidiary ledger (SL) or a listing of the creditors. Without the SL or a listing of the creditor-LGUs; and,

Other MOOE amounting to P17.719 million or 21.26% of the total MOOE for the year ended December 31, 2018 was not supported with a subsidiary ledger or a listing of the component transactions.

Cabatuan

Qualified

Infrastructure Assets with carrying amount of P78.147 million could

not be ascertained due to absence of inventory report;

Public Infrastructures undertaken during CY 2011 to CY 2014

totaling P15.383 million, only the amount of P3.226 million or 21%

thereof were restored to PPE accounts attributed by the inability of

the accounting office to maintain Registry of Public Infrastructure,

understating the PPE accounts; and,

Unreconciled balance of P.820 million for the Due from Other Funds and Due to Other Funds accounts affecting fair presentation of the accounts in the financial statements.

Cordon Qualified Property, Plant and Equipment (PPE) stated at P200.7 million as

of December 31, 2018 could not be ascertained due to incomplete

inventory taking, unreconciled discrepancy of P1.242 million

between accounting and property records, inclusion of

unserviceable properties totaling P12.599 million, inadequacies of

subsidiary records and accounting deficiencies, and non-

recognition of Road Networks account from its Registry of Public

Infrastructure;

63


Cash-in-Bank accounts totalling P32.899 million as at December

31, 2018 could not be ascertained due to (a) variance of P12.188

million, between the Accounting Records and Treasury Records,

(b) current and prior years’ book and bank reconciling items were

not immediately adjusted and/or remained unadjusted; and (c)

failure of the Municipal Accountant’s Office to prepare and submit

monthly Bank Reconciliation Statements (BRS) together with the

paid checks and original copies of debit/credit memos within the

prescribed;

Due to Special Education Fund (SEF) totalling P17.374 million

were not automatically transferred/deposited to the SEF account;

Due to LGU totalling P4.350 million were still not remitted by the

Municipality of Cordon;

Cash advances amounting to P1.323 million remained

unliquidated as at December 31, 2018;

Unused balances from completed projects totalling P.313 million

out of fund transfers from different national government agencies

were not returned; and,

Unable to utilize P6.995 million or 30.26% out of P23.120 million appropriations for 20 percent Development Fund (DF.

Delfin Albano

Qualified

Failure to update and balance daily all financial transactions in the

Cashbooks;

Accountabilities of the Municipal Treasurer and the other

accountable officers could not be readily determined due to late

submission of complete reports in violation of Sections 7.1.1(a) and

7.2.1(a) of COA Circular No. 2009-006 dated September 15, 2009,

thus, causing delay in the preparation of our cash examination

report;

Collections of Delfin Albano Community Hospital were used to pay

outright disbursements;

Failure to establish Real Property Tax and Special Education Tax

Receivables at the beginning of the year; and,

Account balances of Drugs and Medicines Inventory of P.422 million and Medical, Dental and Laboratory Supplies Inventory of P.228 million were unreliable due to procedural lapses in the reporting process.

64


Dinapigue

Qualified Bank reconciling items totaling P.236 million and stale checks totaling P.929 million were not adjusted in the books thereby understating the Cash in Bank account by a net amount of P.693 million;

Absence of subsidiary ledgers, schedules and/or reports to completely account the balances of receivables and liabilities totaling P6.317 million million and P42.881 million, respectively, rendered the accounts unreliable because the accuracy and validity of the reported balance in the Statement of Financial Position at year-end cannot be fully established. Furthermore, the abnormal debit balance of Other Payable account of P311.550 million in the General Fund is not correct due to incomplete and incorrect accounting thereof;

Cash advances granted to various employees and individuals for travel, special purposes/time-bound activities and other undertakings totaling P7.317 million were not settled at year-end;

Property, Plant and Equipment (PPE) account of P207.940 million was not reliable because (a) subsidiary ledgers or records supporting each item in the PPE account was not available; (b) existence of assets recorded at P189.650 million was not determined due to incomplete physical count; (c) depreciation expense and accumulated depreciation for assets with acquisition cost of P128.709 million was not provided; (d) the validity of Construction in Progress account costing P50.634 million could not be completely verified; (e) unserviceable properties costing P.886 million still included in the PPE account; and fair values of serviceable properties found during physical count were not recognized; and,

Due to Other Funds account under the Trust Fund books of P.571

million did not have the corresponding reciprocal account Due from

Other Funds in the General Fund books of the Municipality thus

overstated the liability account at year-end.

Divilacan

Qualified Receivables/Cash Advances amounting to P.455 million which

remained long outstanding in the books were not acted upon to

facilitate the proper write- off/adjustment thereof which is not in

accord with COA Circular No. 2016-005 dated December 19, 2016,

affecting the fair presentation of accounts in the Financial

Statements due to inclusion of accounts of doubtful existence;

Failure to collect Real Property Tax (RPT) Receivable amounting

to P2.36 million due to Management's leniency in the collection

thereof;

Road networks ledger and property card for all roads and its

components were not prepared and maintained by the Accounting

Office;

Fuel consumption amounting to P3.094 million for CY 2018 have

incomplete and deficient supporting documents;

65


Utilization of the 20% Development Fund (DF) was not maximized

since only 41% or P36.045 million of the total appropriation of

P86.934 million was obligated for CY 2018;

Out of the P.757 million total Special Education Fund (SEF)

appropriation for CY 2018, only P.152 million or 20% of its total

budget appropriation were utilized to implement the Municipality’s

programmed PPAs for the year; and,

Failure to comply with the provisions of COA Circular No. 2013-004

dated January 30, 2013 concerning Information and Publicity on

Programs/Projects/Activities of Government Agencies.

Echague

Qualified Property, Plant and Equipment (PPE) accounts totaling P836.959

million is unreliable due to variances and discrepancies in the

books and Report of Physical Count of PPE and incomplete

records;

Accrual basis of accounting was not consistently adopted in the

recognition of revenues amounting to P29.468 million in the books

and accounts of the Municipality of Echague, thereby fair

presentation of financial statements and compliance with

International Public Sector Accounting Standards are not achieved;

Accounting and reporting procedures on the Local Roads Assets

with net book value of P79.279 million were not yet complied;

Information and Technology (I.T.) Equipment and Security

surveillance equipment for a total cost of P16.513 million were not

recorded in the proper accounts;

Inter-agency liabilities amounting to P7.064 million do not fairly

present the balances of mandatory contributions and other

deductions withheld from LGU officials and employees, suppliers

and other entities;

Then-moving Biological Assets account balance of P.277 million

as of December 31, 2018 is doubtful and unreliable due to the: (a)

absence of Inventory of Breeding Stocks, Property Cards, Work,

Other Animals & Breeding Stocks Ledger Card (WOABSLC) and

(b) non-determination of prevailing market price and cost to sell for

each item as of reporting date; and.

Prepayments and accrual of interests for two long-term loans

amounting to P.250 million and P.281 million, respectively were not

properly accounted for in the books inconsistent with Philippine

Public Sector Accounting Standards.

Gamu

Unqualified

66


Jones

Qualified Inconsistency in the accounting policy used for the measurement

of Property, Plant and Equipment (PPE);

Unreconciled discrepancy of PPE account amounting to P47.922

million between accounting and property records;

Local Road Networks was not recognized in the Financial

Statements;

Completed Projects are still recorded under CIP account, thus

overstating the CIP account and understating the specific PPE

account and the corresponding depreciation;

Non-provision for depreciation of PPE accounts with an amount of

P1.563 million;

Fund transfers from various Government Agencies were booked

up under “Other Payables” account amounting to P30.288 million;

Unreconciled balances of fund transfers balances from Department

of Health and Department of Agriculture amounting to P.609 million

and P.882 million respectively;

Due to GSIS, Due to Pag-IBIG and Due to PhilHealth showed a

debit balances amounting to P.027 million, P.283 million and P.063


Due to LGUs showed debit amount of P2.139 million;

Unreconciled balance of reciprocal account Due to /Due from Other

Funds by P1.266 million; and,

Existence of Government Equity account in the Trust Fund amounting to P.322 million.

Luna Qualified Due to material misstatements of various accounts.

Maconacon

Qualified Property, Plant and Equipment per books was not reconciled with the balance per Report on the Physical Count of Property, Plant and Equipment (RPCPPE) due to a discrepancy of P77.451 million as of December 31, 2018;

Some PPE accounts were not provided with their corresponding depreciation expenses;

Other Receivables amounting to P.392 million remained outstanding in the books of LGU Maconacon, Isabela as of December 31, 2018 for 17 years; and,

Reciprocal accounts Due from Other Funds and Due to Other Funds amounting to P.013 million and P.127 million, respectively, were not reconciled.

67


Mallig

Qualified Property, Plant and Equipment (PPE) of the Municipality with a net book value of P420.108 million as of December 31, 2018 could not be ascertained due to lack of physical inventory report and property ledger card maintained by the Management; and,

Road Networks of P189.50 million recorded in the books and reflected in its financial statements represents only the cost incurred in the construction/rehabilitation of its municipal roads from CY 2016 to CY2018.

Naguilian Qualified Estimated income/revenue from the Basic Real Property Tax (RPT)

for the year 2018 was overly conservative due to non-setting up of

annual RPT Receivables based on the assessed values of taxable

RPTs as basis of the estimates and absence of accurate/certified

list of taxpayers which indicates the amount due and collectible

from them.;

Inventory of local roads under the LGU’s jurisdiction is still on-

going, hence, recognition of the Local Road Network in the books

of accounts was not yet started except for those road projects

completed last 2015 to present which consequently understates

the asset account;

Land with an area of 9,133 square meters located at Barangay

Magsaysay, Naguilian from which the new Municipal Hall was

constructed was not recorded in the books; and,

Several Infrastructure Projects and Other Structures with an accumulated cost of P6.815 million were sourced out of the General Fund-Maintenance and Other Operating Expenses and recorded as an outright expense thereby understating the appropriate Property, Plant and Equipment account and overstating the Repairs and Maintenance account.

Palanan

Qualified Unreliable year-end balances of receivable accounts totaling P1.946 million due to the absence of subsidiary ledgers, schedules and/or reports hence the accuracy and validity of recorded balances cannot be reasonably determined;

Unreliable year-end carrying amount of the Property, plant and equipment (PPE) account of P174.236 million; and,

Unreconciled amount of Due to NGA account against the balance confirmed by the source agency of P1.748 million.

Quezon Qualified Property, Plant and Equipment (PPE) of the Municipality with a net book value of P107.948 million as of December 31, 2018 could not be ascertained due to lack of physical inventory report and property ledger card maintained by the Management; and,

Road Networks amounting to P20.450 million recorded in the books of the Municipality and reflected in its submitted year-end financial statements represents only the cost incurred in the construction/rehabilitation of its municipal roads in 2016 to 2018.

68


Quirino Unqualified

Ramon Qualified Property, Plant and Equipment (PPE) stated at P308.944 million,

or 83% of total assets, as at December 31, 2018 could not be

ascertained due to incomplete inventory taking, unreconciled

discrepancy of P150.856 million between accounting and property

records, inclusion of unserviceable properties totaling P10.743

million, inadequacies of subsidiary records and accounting

deficiencies, and non-recognition of Road Networks account from

its Registry of Public Infrastructure totaling P23.780 million;

Inventory accounts amounting to P1.497 million at year-end is

unreliable and their existence and completeness could not be fully

established due to (a) non-conduct of physical count of Inventories;

and (b) non-maintenance of stock ledger cards and stock cards;

Due to LGU totaling P13.315 million were still not remitted by the

Municipality of Ramon;

Unused balances from completed projects totalling P1.919 million

out of fund transfers from different national government agencies

were not returned;

Failure to maintain special accounts in the general fund for

economic enterprises and development projects;

Efficiency and effectiveness of projects implemented from fund

transfers from National Government Agencies with a book balance

of P5.264 million were not fully evaluated due to absence of

subsidiary records and incomplete submission of Memoranda of

Agreement, Status Reports, Liquidation Reports and other

pertinent documents; and,

Special Education Fund (SEF) budget for CY 2018 was not fully utilized resulting to an unobligated appropriation of P3.046 million as of year-end which could have been reprogrammed for other priority projects as prescribed under Section 272 of the Local Government Code of 1991.

Reina Mercedes Qualified Failure to install and maintain property control, records-keeping

and reconciliation procedures in all inventories and property, plant and equipment casting doubt on the validity and accuracy of its reported balances in aggregate amount of P114.679 million as of December 31, 2018.

Roxas Qualified Road Networks amounting to P15.940 million recorded in the

books of the Municipality and reflected in its submitted year-end financial statements under the account represents only the cost incurred in the construction/rehabilitation of municipal roads in 2018;

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Roxas

Qualified

Inventory accounts totaling P.955 million was doubtful due to (a) non-preparation and submission of the Report on the Physical Count of Inventory (RCPI) and (b) non-reconciliation of balances between Accounting and General Services Office (GSO); and,

Property, Plant and Equipment (PPE) account valued at P139.446 million remained doubtful due to failure of management to reconcile the physical inventory balances with the subsidiary ledger balances.

San Agustin

Qualified

Reconciling items in bank reconciliation statement amounting to

P9.310 million were not adjusted in agency’s book of accounts;

Unreconciled difference of Cash in Bank account amounting to

P43.004 million between the Cashbook and General Ledgers;

Unreconciled difference of Advances .to Officers and Employees

account amounting to P2.474 million between the general ledger

and the total balances contained in subsidiary ledgers;

Unreconciled difference of Property, Plant and Equipment (PPE)

accounts amounting to P58.713 million between the cost of PPE in

the Financial Statements and the cost in the Inventory of Physical

Count of Assets;

Completed Projects in Trust Fund amounting to P19.450 million

were closed to Due to NGAs account, thus the specific PPE

accounts was understated and the corresponding depreciation was

understated;

On-going projects in the general fund amounting to P7.720 million

was recorded in the specific PPE account and provision for

depreciation was already made;

Completed project in general fund amounting to P.506 million still

recorded as CIP account, thus understating the PPE account and

depreciation;

Local Road Networks was not recognized in the Financial

Statements;

Non-provision for depreciation of PPE accounts with an amount of

P10.092 million;

Biological assets amounting to P.566 million cannot be ascertained

as it did not include the amount attributed to biological

transformation;

70


Fund transfers from various government offices amounting to

P5.866 million were booked-up under Due to NGAS account

instead of its proper “Due to” account, thus overstating the Due to

NGAS account and understating the Due to LGUs and Due to

GOCCs account;

Cash in bank balance is overstated by P5.406 million due to error

in recording the transfer of unexpended mitigation fund –

Maintenance and Other Operating Expenses (MOOE) and Quick

Response Fund (QRF);

Cash in bank balance is overstated by P3.669 million, Motor

Vehicle is understated by P2.744 million and Trust Liability – DRRM

is overstated by P.924 million;

Unreconciled balance of Due from other Funds and Due to Other

Funds amounting to P3.438 million; and,

Income and Government Equity accounts were understated by

P.094 million and P.056 million respectively while Trust Liability

account was overstated by P.150 million.

San Guillermo

Qualified Property, Plant and Equipment (PPE) accounts totalling P102.656

million cannot be fully established due to variances and

discrepancies in the books and inventory reports, incomplete

records and non-provision of depreciation charges and impairment

losses;

Accounting and reporting procedures on the recognition of the

Local Roads Assets with a book value of P7.805 million was not

complied;

Inter-agency liabilities amounting to P2.254 million do not fairly

present the balances of taxes, mandatory contributions and other

deductions withheld from LGU officials and employees, suppliers

and other entities;

One loan account amounting to P1.700 million was outstanding for

more than 15 years; and,

Biological Assets account balance of P.591 million as at December 31, 2018 was not fairly presented and disclosed due to: (a) unrecorded biological assets, b) non-preparation of ledger cards and (c) unrecognized changes in the assets.

San Isidro Qualified Cash in treasury account as per Financial Statement does not reconcile with Cashbook balance by P1.305 million;

Completed Projects are still recorded under CIP account;

Biological Assets amounting to P.470 million cannot be ascertained due to the non-movement during the year and previous years;

71


Unreconciled balance of reciprocal account Due to /Due from Other Funds by P10.056 million and Real Property Tax Receivable and Deferred Real Property Tax by P.525 million;

Prior year expenses for electricity amounting to P.307 million; and Unutilized balance of LDRRMF amounting to P3.064 million was not transferred to Trust Liability – DRRM.

San Manuel Qualified Unreconciled balances by P.447 million of the Due to LGUs

Account (LGU San Manuel, Isabela Books) and the Due from LGUs

Account (Provincial Government Books); and,

Real Property Tax Receivables totaling P25.760 million was not reconciled with the Deferred Real Property Tax account totaling P26.147 million as reported in the FS at year-end with a total difference of P.388 million.

San Mariano Qualified Operating Lease Receivable from lease of assets and Accounts

Receivables from the LGU’s water system amounting to P.080

million and P.011 million respectively were not recognized in the

books of accounts;

Real Property Tax Receivable totaling P3.829 million cannot be

established; and,

Credit to RPT Receivable in the amount of P11.482 million was

made for RPT collections which has no receivable counterpart;

Lot which was donated years back was not yet derecognized in the

books;

Inventory of local roads under the LGU’s jurisdiction is still on going,

hence, the recorded Local Road Network in the books cannot be

relied upon in the absence of inventory report;

Biological Assets could not be ascertained due to non-

reconciliation between the general ledger balance of P.895 million

and the Biological Assets Property Cards of P1,429 million

showing a net difference of P.534 million;

Property, Plant and Equipment (PPE) with a carrying amount of

P500.958 million could not be ascertained due to (a) non-

reconciliation of accounts and incomplete inventory taking; (b) non

- maintenance of property cards for check and balance (c)

existence of unserviceable properties totaling to P23.899 million;

and, (d) non-observance of the capitalization threshold in

recognizing individual assets as PPE;

Loans Payable account from Land Bank of the Philippines (LBP)

for the acquisition of Heavy Equipment could not be ascertained

due to unreconciled balance in the books against the billing

statement issued by LBP;

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Loans Payable account from Land Bank of the Philippines (LBP)

for the construction of various projects could not be ascertained

due to unreconciled balance in the books against the billing

statements issued by LBP;

Other Payables account pertaining to customers’ deposit from

public market totaling P.948 million could not be ascertained due

to absence of subsidiary ledgers;

Amount of expense to recognize the issuance/consumption of fuel

was not accurate due to deficiencies observed in the preparation

of monthly fuel consumption, rendering the appropriate expense

and inventory account unreliable; and,

Fuels procured under the 20% development fund were used for the travels of different offices.

San Mateo Unqualified

San Pablo

Qualified Other Receivables amounting to P2.350 million remained outstanding for more than 10 years and/or with no details in the books of LGU San Pablo, Isabela as of December 31, 2018;

Breeding Stocks costing P.100 million remained unchanged in the books since 2015;

Due to NGAs amounting to P13.918 million as of December 31, 2018 was not supported with a subsidiary ledger or a complete information on the dates of receipt, purpose/s, amount received and amount utilized/liquidated; and,

Other MOOE amounting to P10.493 million or 18.93% of the total MOOE for the year ended December 31, 2018 was not supported with a subsidiary ledger or a listing of the component transactions

Santa Maria

Qualified Other Receivables amounting to P.384 million remained outstanding in the books of LGU Sta. Maria, Isabela for years and with no supporting documents as of December 31, 2018; and

Donations and Other MOOE amounting to P17.802 million and P8.070 million or 31.15% and 14.26%, respectively, of the total MOOE for the year ended December 31, 2018 were not supported with subsidiary ledgers or a listing of the component transactions.

Santo Tomas Management Letter No Financial Statements submitted

Tumauini

Qualified Cashbook balances are not being reconciled with that of the

Subsidiary Ledger's maintained by the Office of the Municipal

Accountant;

Collection of Tumauini Community Hospital were used to pay

outright disbursement;

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Propriety and existence of the PPEs valued at P 530.842 million

could not be ascertained;

Physical Inventory Report of PPEs disclosed various

damaged/unserviceable furniture & fixtures, office equipment,

watercrafts and ICT equipment of undetermined value were still

carried under PPE account in the Financial Statement; and,

Validity and correctness of the balance of Infrastructure Assets

Road Networks account presented in the Financial Statements

amounting to P28.619 million could not be ascertain due to

unrecorded/unbooked completed prior year’s Municipal Road

Networks projects;

Nueva Vizcaya

Qualified Accumulated depreciation – motor vehicles account of the Province

is understated by P15.631 million;

Cash in Bank-LCCA totaling P1.205 billion could not be relied upon

due to several unsupported and unadjusted reconciling items in the

Bank Reconciliation Statements (BRS);

Due to BIR, Due to GSIS, Due to Pag-IBIG and Due to PhilHealth,

with a total balance of P16.818 million, included abnormal negative

balances totaling P5.036 million.

Correctness and reliability of Motor Vehicles account could not be

ascertained due to unreconciled net difference of P10.688 million

between Accounting records and Report of Physical Count of PPE

(RPCPPE); and,

Fund transfers to NGOs/POs amounting to P8.710 million was

taken up in the books as outright expense under Donations account

instead of recognizing as receivables or Due from NGOs/Pos.

Municipalities

Alfonso Castaneda

Qualified Property, Plant and Equipment (PPE) do not reconcile with the report on physical count for a total of P7.356 million; and,

Consolidated Inventory account from the Accounting Office does not reconcile with the report on the physical count of inventories prepared by the General Services Office (GSO) for a total net amount of P2.591 million.

Ambaguio Qualified Property, Plant and Equipment account amounting to P108.051 million, P788.54 could not be relied upon due to unreconciled difference of P12.245 million between the accounting and property records; and

Cash in Bank - LCCA totaling P27.636 million could not be relied upon due to unreconciled balances between the book and bank balances of the municipality as at year – end.

74


Aritao

Unqualified

Bagabag

Qualified Property, Plant and Equipment and Inventories totaling to P118.615 million and P3.614 million, respectively, could not be verified and ascertained because physical count was neither conducted nor ledger cards/supporting schedules have been; and,

Failure to set-up allowance for depreciation for some of the depreciable properties of the Municipality amounting to P11.343 million.

Bambang Qualified Inability of the Municipality to finish the conduct of annual physical

inventory renders unreliable and inaccurate the Property, Plant and

Equipment (PPE) account of the Municipality totaling P217.156

million;

Accounts Receivable account was understated by at least P12.861 million as of November 30, 2018.

Bayombong Qualified Property, Plant and Equipment account amounting to P90.613 million is doubtful due non – submission of Report on the Physical Count of Property, Plant and Equipment (RPCPPE); and

Cash in Bank – LCCA totaling P142.384 million could not be relied upon due to non – submission of the monthly Bank Reconciliation Statements (BRS) .

Diadi Qualified Property, Plant and Equipment account, with a carrying amount of

P53.110 million could not be ascertained;

Failure to set-up allowance for depreciation for some of the

depreciable properties of the municipality amounting to P2.691

million;

Cash in Bank account totaling P15.451 million cannot be

ascertained;

Infrastructure Assets were not recognized in the books of accounts;

Incomplete set of Books of Accounts;

Insufficient monitoring in the grant and liquidation of cash advances

resulted in the negative balances of individual accounts at year-

end; and

Reciprocal accounts “Due from Other Funds” and “Due to Other Funds” with balances of P18.553 million and P20.491 million, respectively, as at December 31, 2018 are doubtful due to discrepancy of (P1.938 million).

Dupax del Norte

Qualified Cash in Bank-LCCA totaling P108.314 million could not be relied upon;

75


Current and prior years’ collections on the hands of designated collectors totaling P1.081 million were not remitted to the Liquidating Officer; and,

Balances of the LDRRMF-Trust Fund pertaining to years 2012 and 2013 were not reverted back to the unappropriated surplus of the General Fund as at December 31, 2018.

Dupax del Sur

Qualified Property, Plant and Equipment (PPE) and Biological Assets totaling P171.279 million and P1.295 million, respectively, cannot be determined due to the absence of actual physical inventory thereof;

Infrastructure assets recognized in the General Fund books totaling P91.201 million were not duly provided with depreciation; and,

Twenty-one (21) stale checks totaling P.044 million were still included in the list of outstanding checks as of December 31, 2018.

Kasibu Qualified Cash in Bank – Local Currency Current Account as at December

31, 2018 amounting to P331.735 million was overstated by P2.293

million due to the unrecorded check disbursements;

Property, Plant and Equipment account amounting to P176.608 million is unreliable due to the unreconciled difference of P119.866 million between the accounting and property records; and

Accounts Payable amounting to P33.628 million includes unsupported claims of P2.796 million.

Kayapa Qualified Failure to conduct physical inventory of Property, Plant and Equipment (PPE); and,

Failure to recognize of prior years’ infrastructure assets previously logged to the Registry of Public Infrastructure back to the books of accounts of the Municipality.

Quezon Qualified Property, Plant and Equipment account amounting to P89.772 million could not be relied upon.

Santa Fe

Qualified Total of subsidiary ledger accounts of the Trust Liability Due to NGAs did not tally with the general ledger;

Failure to prepare and submit the Report on the Physical Count of Property, Plant and Equipment of municipal properties amounting to P143.667 million; and,

Total of subsidiary ledger accounts of the Trust Liability Due to LGUs did not tally with the general ledger;

Due from Other Funds and Due to Other Funds have a discrepancy of P.156 million;

Discrepancy on the RPT Receivable and SET Receivable and in the Deferred RPT Tax and Deferred SET Tax; and,

76


Cash-in-Bank was understated as at year-end due to the

inappropriate treatment of unreleased check to suppliers totaling

P2.567 million which were still at the custody of the Municipal

Treasurer and not yet presented to the bank for payment.

Solano Qualified Property, Plant and Equipment account amounting to P627.492

millioncould not be relied upon due to a net unreconciled difference

of P242.556 million between the general ledger of the Accounting

Office and the Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) of the General Services Office;

Ending balance of P79.204 million Road Networks account as of

December 31, 2018 was unreliable due to the inability of concerned

officials/offices to perform their duties and responsibilities relative

to the accounting and reporting on Local Roads Asset

Management System enunciated under COA Circular No. 2015-

008;

Receivable accounts totaling P4.986 million remained dormant and outstanding for five (5) years; and,

Accounts Payable totaling P11.601 million and Other Payables of P21.581 million were doubtful due to the existence of long outstanding payables that were not supported with valid claims and documentations and misclassification in the recording of transactions.

Villaverde

Qualified Property, Plant and Equipment could not be verified and ascertained because Infrastructure Assets totaling P3.713 million as at December 31, 2018 were unreliable due to the inability of concerned officials/offices to perform their duties and responsibilities relative to the accounting and reporting of infrastructure assets.

Quirino Unqualified

Municipalities

Aglipay

Qualified Unreconciled Cash in Bank balance of P22.054 million; and,

Property, Plant and Equipment amounting to P110.619 million cannot be ascertained due to failure to conduct actual physical count.

Cabarroguis

Qualified Property, Plant and Equipment (PPE) in the financial statements amounting to P121.222 million cannot be ascertained due to the failure of the municipality to conduct physical count of its properties as well as the failure of the accounting office to maintain PPE ledger cards.

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Diffun

Qualified Amounts reflected for the following accounts in the financial

statements cannot be ascertained due to non-availability of

documents, incomplete records, absence of subsidiary ledgers and

no physical inventory conducted:

a) Property,Plant and Equipment costing P268,707 million;

b) Other Receivables and Payables account that remained in

the books for several years; and,

c) Supplies amounting to P3.504 million directly charged to expense accounts upon purchase.

Maddela

Qualified Property, Plant and Equipment balance amounting to P293.957 million cannot be ascertained due to the failure of the municipality to conduct annual physical count.

Nagtipunan

Qualified Property, Plant and Equipment (PPE) in the financial statements amounting to P388.397 million cannot be ascertained due to the failure of the municipality to conduct physical count of its properties as well as the failure of the accounting office to maintain PPE ledger cards.

Saguday

Qualified Property, Plant and Equipment (PPE) in the financial statements

amounting to P12.582 million cannot be ascertained due to the

failure of the accounting office to maintain PPE ledger cards and

reconcile with the inventory report submitted by the municipal

treasurer’s office.

REGION III - Central Luzon

Aurora Qualified Cash-in-Bank (CIB) account balances amounting to P907.454

million as of December 31, 2018 remained unreliable due to (a)

non-reconciliation of the Cash-in-Bank ledger balances with

treasury and bank records which showed a total variance of

P39,119 million; (b) un-updated Bank Reconciliation Statements

(BRS) for seven bank accounts with total reported balances of

P734.163 million as at same year end; and (c) existence of

unadjusted reconciling items in net deductive amount of P2.994

million .

Municipalites

Baler Unqualified

Casiguran Qualified Property, Plant and Equipment (PPE) accounts with a reported net

book balance of P217.857 million, which represents 58.44% of the

total assets of the municipality as of December 31, 2018 remained

unreliable due to (a) absence of complete accounting and property,

records, and documents evidencing ownership on lots with a

recorded value of ₱32,268,190.06; and (b) failure to conduct the

physical count of PPEs.

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Dilasag

Qualified Cash-in-Bank - Local Currency, Current Account as of December 31, 2018 totaling P66.314 million cannot be ascertained due to (a) non-recording of reconciling items reflected in the Bank Reconciliation Statements of P.981 million and (b) failure to recognize the closure of three bank accounts in the amount of P8.354 million.

Dinalungan


million were not provided with depreciation;

Cash-in-Bank- Local Currency, Current Account accounts as of

December 31, 2018 totaling P34.788 million cannot be

ascertained due to (a) disparity of P19.207 million between the

balances of bank accounts per General Ledger (GL) and per

Municipal Treasurer’s Office records; and (b) non-adjustment of

the reconciling items of (P7.396 million ) between the general

ledger and balance per bank as a result of non-preparation/non

submission of bank reconciliation statement for all accounts; and,

Loans Payable-Domestic, reported under non-current liabilities in

the Statement of Financial Position was overstated by P3.907

million due to a) non-classification of the current portion of the long-

term loan as current liabilities; and b) erroneous recording of

interest due for the whole term of the loan as payable.

Dingalan Unqualified

Dipaculao Unqualified

Maria Aurora Unqualified

San Luis

Qualified Cash-in-Bank- Local Currency, Current Account as of December

31, 2018 totaling P89.420 millioncannot be ascertained due to (a)

disparity of P17.130 million between the balances of bank

accounts per Subsidiary Ledger (SLs) and per Municipal

Treasurer’s Office records; and (b) non-adjustment of the

reconciling items of P2.546 million (net amount) reflected in the

Bank Reconciliation Statements (BRS) due to absence of

supporting documents.

Bataan Qualified Significant deficiencies and misstatement in the audit of accounts

such as (a) erroneous recording of Property, Plant and equipment

(PPE) accounts amounting to P32.033 million; (b) understatement

of PPE accounts due to delayed recognition of cost of donated

cement of various infrastructure projects aggregating to P10.923

million; (c) inadequate provision of depreciation expense and

accumulated depreciation for assets amounting to P2.840 million;

(d) undisposed unserviceable properties totaling P9.643 million;

and (e) unreliable balances of PPE account due to the partial

conduct of the physical inventory.

79


Erroneous recognition of (a) 100% completed and fully paid Department of Energy (DOE)-funded projects and (b) interest income accruing from the interest-bearing checking account maintained for the said DOE fund transfers resulted in the overstatement of Due to NGAs account by P1.507 million and understatement of Due to NGAs account by P.005 million, respectively.

City

Balanga City Qualified Real Property Tax (RPT)/ Special Education Tax (SET) Receivables amounting to P39.556 million and P40.129 million, respectively, were unreliable due to the absence of details to support the accuracy of the accounts’ beginning balances; and

Absence of details to support the beginning balance of Land in the amount of P20.697 million in the records maintained by the Treasury, Accounting and General Services Department rendered the accounts unreliable.

Municipalities

Abucay Qualified RPT/SET Receivables amounting to Zero (P0.00) is unreliable due to the failure to ascertain and substantiate the reported figures with subsidiary records;

Inclusion of the 56 unreleased checks as issued in the report and the Municipal Accountant’s recording in the Check Disbursement Journal as credit to cash in bank resulted in the understatement of the cash account by P5.110 million; and (c) erroneous entry to Other Payable account amounting to P33.000 million.

Bagac Qualified RPT/SET Receivables amounting to P49.786 million and P49,786

million respectively, were unreliable due to the absence of certified list of taxpayers from the Municipal Treasurer’s Office to support the accuracy of the amount set up for 2018.

Dinalupihan Qualified Loans Receivable-Others account with balance of P.135 million

and Other Receivables account of P.007 million is doubtful for the failure to substantiate the accounts with necessary documents and detailed information;

Property, Plant and Equipment and Inventory accounts with a net book value of P199.298 million and P2.183 million, respectively, are unreliable due to partial completion of the actual physical count, non-submission of required inventory reports, inclusion of unserviceable/obsolete properties in the books and improbability to reconcile the balance of Property, Plant and Equipment account with the inventory report; and (c) the Trust Fund account balances of Due to NGAs, Due to LGUs and Due to Officers and Employees included dormant and long outstanding balances amounting to P1.179 million and P.875 million, respectively, which were not yet returned/transferred to the source agencies/persons.

80


Hermosa Qualified Property, Plant and Equipment (PPE) account totaling to P338.146 million and Inventory balance of P1.530 million could not be ascertained due to (a) partial completion of the actual physical count; (b) non-submission of required inventory reports; (c) inclusion of unserviceable/obsolete properties in the books and; (d) improbability to reconcile the balance of Property, Plant and Equipment account with the inventory report.

Limay Management Letter

Due to non submission of reports

Mariveles Qualified Property, Plant and Equipment (PPE) balances at year-end could not be ascertained because of the continuous (a) non-appraisal/revaluation of renovated/reconstructed market, slaughterhouse, municipal building, donated lots and other properties with no costs ; (b) non-conduct of physical inventory of PPEs; (c) non-maintenance of PPE Ledger Cards (PPELC) and property cards (PC); (d) non-reconciliation of property and accounting records; and (e) inclusion of disposed unserviceable properties of P3.496 million to PPE accounts;

Long outstanding RPT and SET Receivables amounting to P494.095 million and P494.095 million, respectively, for a total of P988.190 million were not provided allowance for impairment; and (c) various receivables amounting to P1.570 million remained past due for more than 10 years.

Morong Qualified Various receivable and payable accounts amounting to P.553 million and P.784 million, respectively, remained unsubstantiated and had been long outstanding ; and,

Property, Plant and Equipment (PPE) account totaling to P184.755 million and Inventory balance of P.828 million could not be ascertained due to failure to conduct complete annual physical count of PPE, non-submission of required PPE and inventory reports, non-updating of ledger and property cards and inclusion of unserviceable/obsolete properties in the books.

Orani Qualified RPT/SET Receivables mounting to P14.166 million and P14.162 million respectively, or a total of P28.328 million at year end due to the failure to ascertain and substantiate the reported figures with subsidiary records;

Long overdue Loans Receivables – Others, Due from NGAs and Loans Receivables – GOCCs amounting to P.086 million, P.009 million and P.138 million, respectively which were not covered with subsidiary ledgers or sufficient documentation;

Land account is inaccurate due to various parcels of land such as the old market site which is the current municipal hall site and plaza amounting to P2.831, million have no transfer certificates of title and overstatement of land account due to the parcels of land donated by the municipality to the DPWH amounting to P5.975 million still lodged in this account.

81


Orion Qualified Property, Plant and Equipment (PPE) balances at year-end could not be ascertained because of the continuous (a) non-submission of Report on the Physical Count of Property, Plant and Equipment (RPCPPE); (b) non-maintenance of complete and updated PPE Ledger Cards (PPELC) and property cards (PC); (c) non-reconciliation of property and accounting records; (d) inclusion of unserviceable/destroyed properties of P2.592 million to PPE accounts; and (e) non-appraisal/revaluation of properties with no costs; and,

Long outstanding RPT and SET Receivables amounting to P6.049 million and P6.049 million, respectively, for a total of P12,098 million were not provided allowance for impairment.

Pilar Qualified Failure to substantially address prior year’s issue on PPE such as

failure to (a) address the unreconciled balances between the inventory report and financial statements amounting to P25.153 million; (b) establish the ownership of the recorded land and building accounts totaling P11.121 million; and (c) dispose the unserviceable properties totaling P1.310 million resulting to unreliable balance of the PPE account.

RPT Receivables and SET Receivables amounting to P4.546 million and P1.480 million, respectively, were found to be unreliable because of absence of subsidiary ledgers that will substantiate the balance reflected in the Statement of Financial Position.

Samal Qualified RPT/SET Receivables amounting to P3.822 million, and P3.814

million, respectively, or a total of P7.636 million at year end is unreliable due to the failure to ascertain and substantiate the reported figures with subsidiary records; and,

Building account is overstated due to the demolished Municipal Building with net book value of P1.869 million still lodged in this account.

Bulacan Qualified Significant deficiencies and misstatement in the audit of accounts

such as (a) erroneous recording of Property, Plant and equipment

(PPE) accounts amounting to P32.033 million; (b) understatement

of PPE accounts due to delayed recognition of cost of donated

cement of various infrastructure projects aggregating to P10.923

million; (c) inadequate provision of depreciation expense and

accumulated depreciation for assets amounting to P2.840 million;

(d) undisposed unserviceable properties totaling P9.643 million;

and (e) unreliable balances of PPE account due to the partial

conduct of the physical inventory.

Erroneous recognition of (a) 100% completed and fully paid Department of Energy (DOE)-funded projects and (b) interest income accruing from the interest-bearing checking account maintained for the said DOE fund transfers resulted in the overstatement of Due to NGAs account by P1.507 million and understatement of Due to NGAs account by P.005 million, respectively.

82


Cities

Malolos City Qualified Cash in bank account totaling P165.262 million is unreliable due to

unadjusted stale checks, unupdated and undocumented bank

accounts, unrecorded deposits attributable to the Special

Education Fund (SEF), and unadjusted unclaimed checks in the

books;

Unrecognized expenses relevant to long outstanding cash

advances aggregating to P4.106 million;

Ununaccounted inventories on hand totaling P4.007 million;

Unreliable Property, Plant and Equipment (PPE) accounts

balances aggregating to P857.456 million owing to unrecognized

parcels of land, understated road networks account, and erroneous

computation of depreciation expenses, among others;

Unreliable loans payable account due to disagreement with the

bank-confirmed balance; and,

Unreliable trust liability account for local disaster and risk reduction

management fund (LDRRMF) amounting to P187.503 million due

to the unreverted prior years’ unexpended balance to the General

Fund and misclassification of accounts affecting the transfer and

utilization of the LDRRMF.

Meycauayan City Qualified Cash account representing receipt of donations for disaster victims

of P.739 million was erroneously classified and deposited in the

general fund instead of trust fund;

Sinking Fund of P29.799 million was understated by P24.835

million which is the net effect of the error in recognition of the

remittance to Philippine National Bank Trust Banking Group set

aside to pay off long-term debt while the Trustee Fee recorded

under the said account was not reclassified to the appropriate

expense account at year-end;

Other Receivable included the amount of P8.610 million

representing the account of the former official for alleged

anomalous transactions incurred in CY 2007 which was recorded

in CY 2013 without Notice of Finality of Decision;

Unrecorded Merchandise Inventory For Sale consisting of 117 sets

of gold jewelries amounting to P.400 million recorded as Trust

Liabilities under One Town One Product (OTOP) Bottom Up

Budgeting (BUB) Project of the City’s Pasalubong Center;

Other Supplies Inventory was understated by P2.248 million owing

to stocks still on hand at City Environment and Natural Resources

Office (CENRO) at the end of the year;

83


Unrecognized Disaster Response and Rescue Equipment

consisting of rescue boats totaling P2.875 million;

Disposed vehicles with Net Book Value of P.713 million were

continuously recognized as Property Plant and Equipment (PPE);

Books under PPE recorded in Special Education Fund since CY

2006 amounting to P23.148 million still included the value of

issued books;

Bonds Payable had a discrepancy of P1.659 million between the

bank and book balances; and,

Environment and Sanitary Services were overstated by P2.248

million due to direct recording of inventory.

San Jose del Monte City

Qualified Cash Advances included confidential funds of P16.400 million

under the Advances to Special Disbursing Officers account which

remained in the books from four to five years; and P9.371 million

or 36.46% which were not liquidated at year end;

Loans Receivable account of P6.520 million remained uncollected

from five to eight years owing to unavailability of supporting

records, absence of debtor’s information, and non-imposition of

effective collection strategy; and,

Property, Plant and Equipment (PPE) account of P1.590 billion or

68.76% could not be reconciled owing to: absence of physical

inventory of buildings, infrastructures and other assets;

unrecorded donated properties of still undetermined amount; and

non-disposal of unserviceable property totaling P59.970 million.

Municipalities

Angat Qualified Property, Plant and Equipment (PPE) amounting to P107.107

million or 34.62% of the total assets remain doubtful due to: (a)

absence of certificate of ownership for some assets; (b) continued

inclusion of obsolete, unserviceable and fully depreciated items in

the books amounting toP2.759 million; and, (c) unreconciled

beginning balances carried over in the books during the transition

from OGAS to NGAS.

Balagtas

Qualified Property, Plant and Equipment (PPE) with net book value of P321.705 million was not established due to (a) absence of physical inventory reports; (b) PPE accounts costing P1.746 million from Trust Fund consisting of forwarded balances from previous years did not have adequate accounting records; and (c) unascertained ownership of several parcels of lots and vehicles;

Real Property Tax (RPT) and Special Education Tax (SET) Receivables for CY 2018 with year-end balances of P56.085 million and P54.929 million respectively, were set up based on collection estimates on the taxable assessed values instead of using the certified list of taxpayers.

84


Baliuag

Qualified

Property, Plant and Equipment (PPE) amounting to P677.630

million or 68.85% is unreliable due to (a) non-recognition in the

books of 32 parcels of Land valued at P142.693 million due to

unavailability of evidences of ownership; (b) misclassification of a

portion of land being held for lease with a total carrying value of

P145.501 million as Land instead of Investment Property; (c)

continued inclusion in the books of unserviceable items due for

disposal amounting to P1.624 million, and unaccounted items

totaling P1.656 million; and (d) failure to complete the annual

physical inventory of PPE for CY 2018.

Bocaue Qualified Property, Plant and Equipment (PPE) with net book value of

P199.092 million as of December 31, 2018 remained unreliable

due to (a) absence of complete and accurate property cards; (b) 12

lots recorded in the Land account with book value of P19.878

million were not supported by Transfer Certificate of Titles (TCTs);

and, (c) 23 properties in the Municipality of Bocaue with TCTs

under the custody of the Municipal Treasurer’s Office remained

unrecognized in the books.

Bulakan Qualified Property, Plant and Equipment account with a year-end balance

totaling P216.404 million was unreliable due to: (a) the GSO did

not maintain the Property Cards for each item of equipment; and,

(b) The Municipality failed to request immediate disposal of

unserviceable assets to prevent their further deterioration.

Bustos Qualified Due from Local Government Units and the corresponding Tax

Revenue accounts of the Municipality were understated by P.539

million, P818.19 representing the receivables from the Provincial

Government of Bulacan; and,


million, the amount of P18.159 million procured by the Municipality

during the year for its various programs and projects were validated

and included in the Report of Physical Inventory of Property, Plant

and Equipment (RCPPE) submitted by the Municipal Treasurer

(MT). However, the following deficiencies were noted (a) non-

provision for depreciation of the PPE under the Military, Police and

Security Equipment, Other Machinery and Equipment, and Other

Property, Plant and Equipment accounts; and (b) non-maintenance

of complete property records at the MTO and Accounting Offices.

Calumpit Qualified Property, Plant and Equipment (PPE) account balances with total

net-carrying value of P234.247 million could not be relied upon due

to (a) failure to establish the propriety of the land account; (b) non-

submission of inventory report due to uncompleted inventory

taking; and (c) failure of the Municipal Accounting Office (MAO) and

the General Services Office (GSO) to maintain PPE Ledger Cards

(PPELC) Property Cards (PCs).

85


Doña Remedios Trinidad

Qualified Cash in Bank – Local Currency, Current and Time Deposit account

in the total amount of P155.361 million were doubtful due to (a)

errors in the year-end Bank Reconciliation Statements (BRS)

submitted by the Accounting Office; (b) deposits amounting to

P.138 million were not recorded in the books due to the loss of

validated deposit slips by the Treasury; (c) disbursement vouchers

totaling to P.153 million were not submitted by the Treasury to the

Accounting Office; and (d) a PNB account amounting to P.002

million which has long been terminated was continuously

recognized in the books of accounts;

Liquidation Documents submitted to the COA Intelligence and

Confidential Fund Audit Unit on the cash advances aggregating

P1.650 million for the Confidential and Intelligence Fund were not

properly recognized in the books and remained in the receivable

account; and,

Property, Plant and Equipment (PPE) accounts amounting to

P385.141 million was not established due to the failure of the (a)

General Services Officer to properly maintain Property Cards; and

(b) Inventory Committee to complete the physical inventory-taking.

Guiguinto Qualified Property, Plant and Equipment (PPE) amounting to P41.185 million

procured by the Municipality during the year for its various

programs and projects were validated and included in the Report

of Inventory submitted by the General Services Officer. However,

several deficiencies were found in the audit of the PPE account: a)

Four parcels of Land were not supported with Transfer Certificates

of Titles; b) absence of property, plant and equipment ledger

cards, real property cards for land and property cards to

substantiate the details of the PPE account; c) non- disposal of

unserviceable assets which were still recognized in the property

and accounting records and; d) non recognition of various disaster

equipment purchased totaling P.310 million.

Hagonoy Qualified Property, Plant and Equipment (PPE) accounts totaling P28.418

million were not established arising from (a) unreconciled

difference of P15.565 million between the accounting records and

the inventory reportdue to non-maintenance of records for the PPE

account such as Property Ledger Cards by the General Services

Office (GSO) and Property, Plant, and Equipment Ledger Cards

(PPELCs) by the Municipal Accounting Office (MAO); and (b)

Unserviceable Properties totaling P5.343 million were not

disposed during the year.

Marilao Qualified Property, Plant and Equipment (PPE) amounting to P 838.193

million was unreliable due to (a) non-provision for depreciation of

the PPE under the Market and Agricultural and Forestry Equipment

accounts with reported balances of P12.865 million and P.038

million, respectively; (b) non-maintenance of complete property

86


records at the MTO and Accounting Office; and (c) erroneous

classification of procured properties totaling to P4.420 million; and,

Due from Local Government Units and the corresponding Tax

Revenue accounts of the Municipality were understated by P2.528

million representing the receivables from the Provincial

Government of Bulacan.

Norzagaray Qualified Unliquidated cash advances totaling P21.317 million composed of

P7.568 million unliquidated cash advances of prior years and

P16.068 million from the current year which remained unliquidated

at year-end; and,

Lack of action on the disposal of unserviceable property totaling

P7.211 million and the non-disclosure thereof in the financial

statements mislead readers on the actual condition of the agency's

properties thereby affecting the accuracy and reliability of the

recorded PPE account totaling P983.862 million.

Obando Qualified Cash donation of P.100 million from Land Bank of the Philippines

intended for disaster victims were recorded under the Due to LGU

account of the General Fund instead of Trust Liabilities-Disaster

Risk Reduction and Management Fund account;

Unrecorded receivables from stallholders at the Obando Public

Market representing market stall fees which remained uncollected

for several years amounting to P3.320 million were not recognized

in the books;

Various unserviceable vehicles, furniture and equipment with net

book value of P691 million disposed during the year were not

derecognized in the books;

Purchase of slightly used Backhoe Crawler type amounting to

P2.390 million using the Disaster Risk Reduction and Management

Fund was erroneously recorded as Disaster Response and Rescue

Equipment instead of Construction and Heavy Equipment; and,

Transferred motorized banca from the Department of Environment

and Natural Resources to the Municipality thru the Municipal

Environment and Natural Resources Office in CY 2018 costing

P300 million was not recognized in the books as asset.

Pandi Qualified Property, Plant and Equipment (PPE) accounts with carrying value of P282.803 million as of year-end could not be relied upon due to the (a) Municipality’s continuous failure to prepare and submit a complete Report on the Physical Count of Property, Plant and Equipment (RPCPPE) of all PPE; (b) non-reconciliation of property records by the Municipal Accountant’s Office and the Property Custodian; and (c) disparities of records among the Municipal Assessor’s Office, Municipal Treasurer’s Office, and Municipal Accounting Office on the results of actual audit on the titles and ownership documents.

87


Paombong Qualified Property, Plant, and Equipment (PPE) accounts is unreliable

owing to failure to transfer P3.195 million worth of Construction in

Progress to the specific PPE account consequently failing to

compute depreciation charge over the years, and understatement

of the land account, among others;

Due to NGA's account amounting to P2.386 million is unreliable;

Misclassified income aggregating to P250 million:

Understatement of the loans payable account by P2.233 million;

and

Unreliable trust liability account for local disaster and risk reduction

management fund due to the unreverted prior years’ unexpended

balance to the General Fund amounting to P2.060 million; non

transfer of the unexpended LDRRMF attributable to QRF and

MOOE for CY2018 totaling P1.448 million and misclassification of

accounts affecting the transfer and utilization of the LDRRMF.

Plaridel Qualified Several deficiencies were found in the audit of the PPE account

such as (a) the Land account included the lot in Barangay Poblacion, purchased to be used as Multi-Purpose Building was not evidenced by a Transfer Certificate of Title (TCT) in the name of the Municipality; (b) the GSO failed to request disposal of unserviceable assets totaling to P16.504 million; and, (c) the GSO did not maintain the Property Cards for each item of equipment under the PPE account;

Infractions were observed in the handling, monitoring and recording of Inventories totaling P23.665 million such as (a) direct recording of purchases as outright expenses instead of inventories; and (b) insufficient records of supplies.

Pulilan

Qualified Property, Plant and Equipment recorded at P260.772 million

remained unreconciled in the books of the Municipality owing to (a)

non-submission of the physical inventory report; (b) non-

maintenance of records for the PPE account (c) disparity between

the records of the Municipal Accounting Office and the Municipal

Treasurer’s Office, and other deficiencies noted in the actual audit

of the Transfer Certificates of Titles (TCT) and ownership

documents affecting the Land account.

(San) Ildefonso Qualified Property, Plant and Equipment (PPE) account totaling to P338.458

million was doubtful due to (a) absence of transfer certificate of

title/ownership of four lots recognized under the Land account; (b)

PPE was not supported with ledger cards, real property cards for

land, and subsidiary ledgers at the accounting and property offices;

and, (c) non-disposal of unserviceable assets which were still

recognized in the Accounting and GSO records.

88


San Miguel Qualified Property, Plant and Equipment (PPE) account was doubtful due to

the failure to conduct physical inventory of all PPE with a carrying

value of P227.908 million and property records were not

maintained.

San Rafael Qualified Cash in Bank accounts as at year-end were understated by a net

amount of P1.345 million; and,


P492.440 million was not established due to the failure of the (a)

Supply/Property Officer to properly maintain Property Cards; (b)

Inventory Committee to complete the physical inventory-taking and

include in the RPCPPE the procured PPE in the current year

amounting to P66.032 million.

Santa Maria Qualified Property, Plant and Equipment (PPE) of P1.012 billion per books is

unreliable due (a) lack of legal ownership document over the

purchased lot amounting to P7.821 million; (b) PPE were not

supported with property cards to record the same in the property

office; (c) the MT failed to request the immediate disposal of

unserviceable assets with book value of P.184 million to prevent

their further deterioration; and (d) erroneous classification of

procured properties in the amount of P2.898 million; and,

Due from Local Government Units and the corresponding Tax

Revenue accounts of the Municipality were understated by P1.767

million representing the receivables from the Provincial

Government of Bulacan.

Nueva Ecija

Qualified

Property, Plant and Equipment (PPE) account balances with carrying value of P5.510 billion were not established owing to incomplete physical count, un-updated PPE Ledger Cards and Real Property Ledger Cards, non-maintenance of Property Card, and non-disposal of unserviceable property and misstatement of P6.878 million in the PPE accounts due to (a) over-provision of depreciation by P4.117 million; (b) non-depreciation of some PPEs by P10.995 million; and (c) over-provision of depreciation on one equipment that resulted in a negative value of P.659 million;

Inventory Accounts amounting to P348.981 million could not be ascertained due to (a) discrepancy of P340.071 million when compared with the Report of Physical Count of Inventories amounting to P8.910 million; (b) the use of First-in-First-out instead of moving average method in costing of inventory; (c) derecognition in the books of the some issued inventory from the books; and (d) non-preparation of the Summary of Supplies and Materials;

Loans Receivable totaling P8.046 million remained outstanding for more than fourteen years due to the failure of the concerned officials to give appropriate action, thus rendering its collectability uncertain; and,

89


Biological Assets amounting to P.204 million representing 45 Ostriches were not existing but recorded in the books of the Province, while 42 goats found in government premises were not recorded.

Cities

Cabanatuan City

Modified/ Qualified

• Unreliable balance of receivables for Real Property Tax (RPT) and

Special Education Tax (SET) with an aggregate amount of

P732,432,339.03 as of December 31, 2018 due to the absence of

Certified List of Taxpayers as the basis in setting up of RPT/SET

Receivable at every beginning of the year;

• Non-transfer of completed projects totaling P64,304,828.95 from

Construction in Progress (CIP) account to appropriate asset

accounts, understated the affected appropriate PPE accounts by

the same amount; and

• Unrecorded land of undetermined amount with an area of 6,215

square meters and non-transfer of unrecorded donated lot in the

name of the City Government with an area of 1,032 square meters

renders the correctness of the Land account balance unreliable.

Gapan City

Qualified • Real Property Tax (RPT) and Special Education Tax (SET)

receivables with an aggregate amount of P59.693 million as of

December 31, 2018 could not be ascertained .

Palayan City

Qualified • Other Receivable accounts of P33.397 million or 99.67% of the

total reported account balance of P33.509 million as of December

31, 2018 could not be ascertained due to incomplete subsidiary

ledgers and supporting documents/schedules;

• Other Investment account balance of P17.339 million pertaining to

the Local Pabahay Project in CY 1996, was not supported with

records and documents,

• Property, Plant and Equipment (PPE) account is doubtful due to

failure to (a) maintain adequate property records/supporting

schedules for the total Property, Plant and Equipment (PPE)

account balance of P163.392 million; (b) recognize depreciation

expense of P4,378 million and accumulated depreciation of

P8,281 million; and (c) adjust the noted deficiencies in recording

of various PPEs and depreciation expense totaling P4.700 million;

and, (d) Public Infrastructures totaling P23.395 million previously

transferred to registries were not recorded to appropriate PPE.

San Jose City Unqualified

90


Science City of Muñoz

Unqualified

Municipalities

Aliaga

Unqualified

Bongabon Qualified • Unreliable basis of recorded RPT and SET receivables totaling to

P181.268 million; and,

• Accounts payable for two to five years amounting to P2.242 million

remained dormant.

Cabiao Qualified • Unreliable PPE accounts totaling P221.844 million, of which

various items totaling P4.603 million erroneously recorded as part

of Disaster Response and Rescue Equipment and non-submission

of Report on the Physical Count of PPE (RPCPPE);

• Unliquidated Cash Advances totaling P2.484 million affecting the

expense account;

• Discrepancy of P.004 million between the year-end balances of

the reciprocal accounts, Due from Other Funds and Due to Other

Funds amounting to P4.487 million and P4.491 million,

respectively; and,

• Presence of abnormal balances of accounts Due to GSIS, Due to

Pag-IBIG and Due to PhilHealth totaling (P.037 million).

Carranglan

Modified/ Qualified

• Real Property Tax (RPT) Receivables and Special Education Tax

(SET) Receivables reported in the books at P5.243 million and

(P2.399 million), respectively, are not reliable due to improper

bases of setting up the said receivables.

• Non-classification of current portionof the Loans Payable-Domestic

and the variance of P3.109 million between the book balance of

P9.401 million and the amount of P12.510 million as confirmed by

the lending bank.

Cuyapo Modified/ Qualified

• Unreliability of the (1) reported balances of Cash-in-Bank (CIB)

accounts as of December 31, 2018 totaling P25.394 million due to

(a) unaccounted net difference of P.512 million between adjusted

book and bank balances; and (b) uncancelled stale checks of

P.573 million; and,

• Property Plant and Equipment (PPE) totaling P324.842 million is

unreliable due to unreconciled difference of P210.713 million

between the Accounting records and the report in the physical

count of PPE.

91


Gabaldon Unqualified

General Mamerto Natividad

Qualified • Receivables of the Municipality totaling P1.561 million as of

December 31, 2018 remained outstanding in the books for over ten

years without documents evidencing their existence;

• Inventory accounts totaling P.392 million were doubtful due to the

unrecorded issuances of inventory items.

• Failure to (a) maintain complete Property Ledgers Cards and

conduct of yearly physical inventory on all PPE casting doubt on

the accuracy and existence of Property, Plant and Equipment

(PPE) accounts valued at P211.386 million as at year end; (b)

prepare supporting computation of accumulated depreciations

amounting to P17.178 million; and (c) recognize depreciation for

public infrastructure accounts recorded back from registries.

General Tinio

Qualified • Real Property Tax (RPT) and Special Education Tax (SET)

receivables with an aggregate amount of P53,389 million as of

December 31, 2018 could not be ascertained due to unreliable

basis in recording of receivables at the beginning of the year.

Guimba Qualified • Property, Plant and Equipment (PPE) with a recorded value of

P427.374 million as of December 31, 2018 is unreliable due to

deficient property accounting and management practices.

Jaen Qualified • Unreconciled difference of P22.407 million between the bank and

book balances of the cash in bank account due to non-preparation

of bank reconciliation statements;

• Unreliable balance of PPE accounts due to (a) non-conduct of the

complete physical inventory of PPE and non-reconciliation of its

report with the accounting records casting doubt on the correctness

of PPE with carrying value of P177.587 million; (b) non-recognition

of depreciation on depreciable assets amounting to P141.048

million; and, (c) non-recognition of at least 75% of the

Infrastructure Assets recorded in the Registry of Public

Infrastructure amounting to P86.386 million;

• Unaccounted and undocumented Other Receivable account

amounting to P.043 million which constitutes 27% of the total Other

Receivable account of P.158 million;

• Discrepancy amounting to P2.880 million of reciprocal accounts,

Due from Other Funds and Due to Other Funds, for all funds; and,

• Failure to transfer the unexpended/unutilized and unobligated

LDRRMF balances in the total amount of P5.072 million to a

Special Trust Fund.

92


Laur Qualified • Failure to recognize Allowance for Impairment of Receivables;

• Presence of dormant receivables which were non-moving for more

than 10 years; and,

• Failure to recognize infrastructure assets that were recorded in the

Registry of Public Infrastructures (RPI) as at end of CY 2018.

Licab Unqualified

Llanera Unqualified

Lupao Unqualified

Nampicuan Qualified • Real Property Tax (RPT) and Special Education Tax (SET)receivables with an aggregate amount of P13.904 million as of December 31, 2018 is unreliable due to incorrect basis in recording receivable at the beginning of CY 2018 and the failure to set up the said receivables for CY 2016.

Pantabangan

Qualified • Unreliable reported balances of Property, Plant and Equipment (PPE) accounts as of December 31, 2018 totaling P739.878 million;

• Non-recording of the balances of Receivables from Real Property Tax (RPT) and Special Education Tax (SET) understated the receivable accounts; and,

• Unclassified completed infrastructure projects amounting to P56.344 million to its proper Property, Plant and Equipment accounts.

Peñaranda

Qualified • Unreliable Real Property Tax (RPT) and Special Education Tax

(SET) receivables amounting to P 75.900 million due to incorrect

basis in recording at the beginning of the year.

Quezon

Qualified • Unreliable balances of Real Property Tax (RPT) and Special

Education Tax (SET) accounts amounting to P15.778 million;

• Failure to accrue to a special trust fund the unexpended balances

of Local Disaster Risk Reduction Management Fund (LDRRMF)

amounting to P10.941 million in CY 2018;

• Doubtful validity and correctness of the reported lability accounts

of the Municipality amounting to P23.252 million due to various

deficiencies noted in audit;

• Unreliable balance of Property, Plant and Equipment amounting to

P88.427 million due to discrepancy between general and

subsidiary ledgers balances, abnormal balance and other various

deficiencies noted in audit such as failure to conduct required

93


annual physical count, non-submission of Report on Physical

Count of PPE (RPCPPE) and non-maintenance of property cards

and records; and,

• Unsubmitted accounts such as official receipts, disbursement

vouchers and payroll of P36.357 million as of February 15, 2019.

Rizal

Unqualified

San Antonio

Qualified Non-recognition of depreciation of all depreciable assets amounting to P18.449 million affecting the carrying value of the PPE accounts; non-recognition of at least 75% of the Infrastructure Assets recorded in the Registry of Public Infrastructure to specific asset accounts amounting to P31.027 million; (c) non conduct of the complete physical inventory of PPE and non-reconciliation of its report with the accounting records casting doubt on the correctness of PPE with carrying value of P368.455 million; and,

Failure to set up Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable for CY 2018, render the year end balances of the accounts of P14.915 million unreliable.

San Isidro

Qualified Unreliable balance of tax account receivables for Real Property

Tax (RPT) and Special Education Tax (SET) with an aggregate

amount of P89.905 million due to incorrect basis in recording of

receivables at the beginning of the year.

Assistance to Individuals in Crisis Situation (AICS) amounting to

P1.626 million was recognized in the books of accounts as Other

Maintenance and Operating Expenses instead of Donations

account.

San Leonardo

Modified/ Qualified

PPE and Government Equity accounts is understated due to

derecognition of completed projects amounting to P35.059 million;

non-recognition of at least 75% of the Infrastructure Assets

recorded in the Registry of Public Infrastructure to specific asset

accounts amounting to P111.562 million; non-recognition of the

depreciation for depreciable assets totaling P120,041 million; and,

non-conduct of the complete physical inventory of PPE by

Inventory Committee and non-reconciliation of the corresponding

report with the accounting record;

Cash in Bank – Local Currency amounting to P18.380 million as

of December 31, 2018 is unreliable due to (a) non reconciliation

between the records of the Accounting and Treasurer’s Office; (b)

improper recording of checks issued in the cashbook; and (c) non-

submission of monthly bank reconciliation statements (BRS)

resulting in the unreconciled difference of P10.591 million; and,

Real Property Tax/Special Education Tax Receivables balance

amounting to P51.869 million as of year-end is inaccurate due to

incorrect basis in recording of tax receivables.

94


Santa Rosa


receivables with an aggregate amount of P66.771 million as of

December 31, 2018 could not be ascertained due to incorrect basis

in recording of receivables at the beginning of the year.

Santo Domingo Qualified Real Property Tax (RPT) and Special Education Tax (SET)

receivable accounts amounting to P104.297 million is unreliable

because of the incorrect basis in setting up of the said receivables

at every beginning of the year;

Cash advances amounting to P.906 million remained unliquidated

as of year-end; and,


million or 64% of the total assets of the Municipality as of December

31, 2018 could not be ascertained due to various deficiencies noted

in audit.

Talavera


receivable accounts amounting to P365.833 million is doubtful

because the setting up of the said receivables at every beginning

of the year was based on the unupdated Real Property Tax

Account Register (RPTAR);

Loans Receivable amounting to P5.253 million is unreliable due to

the non-moving/overdue accounts and failure to

compute/determine impairment losses;

Property, Plant & Equipment (PPE) account amounting to

P729,843 million or 59.75% of the total assets of the Municipality

as of December 31, 2018 is doubtful due to incomplete conduct of

annual inventory taking of the Inventory Committee and non-

reconciliation of balances between the Report on Physical Count

of PPE (RPCPPE) and records of Accounting Unit and non-existing

PPEs amounting to P.331 million still recorded in the book of

accounts; and

Inventory account is overstated due to unrecorded

distribution/issuance of Agricultural and Marine Supplies

amounting to P.112 million.

Talugtug Unqualified

Zaragoza

Unqualified

Pampanga

Qualified

Inventories is overstated due to inclusion of non-existent inventories costing P1.845 billion;

95


Pampanga

Qualified Property, Plant, and Equipment (PPE) is understated due to the non-recognition of the cost of (a) local road networks totaling P2.962 billion; (b) undetermined value of 80 titled lots and 523 untitled lots with value of at least P29.194 million; and (c) the balance in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) was not in consonance with that of the accounting books amounting to P157.770 million ;

Cash-in-Bank account balances totaling P4,317,325,427.18 is doubtful due to discrepancy of P118.212 million in the confirmed bank balances and delayed preparation of 51 bank reconciliation statements; and,

Accounts Payable is doubtful due to existence of dormant accounts totaling P183.899 million.

Cities

Angeles City

Qualified Property, Plant and Equipment (PPE) accounts with carrying value of P3.236 billion and the existence thereof were not established due to (a) unaccounted property items (b) unreconciled/un-updated property records of the General Service Office and Accounting Office with discrepancy of P102.698 million; and (e) unaccounted prior year’s Construction in Progress account balances included in the year-end balance of P960.720 million; and,

Accounts Payable account of P329.427 million was doubtful because of the (a) continued presence of payables aged to two to ten years in the total amount of P47.256 million; and (b) inadequacy of pertinent documents to substantiate the regularity and existence of obligations.

San Fernando City

Qualified Long-term debt amounting to P26.580 million were not recorded

under current liabilities;

Interest on the loan granted aggregating to P3.497 million which

requires the capitalization of borrowing costs of the qualifying asset

was treated as outright expense;

Depreciation for assets with total acquisition cost of P405.713

million was not computed;

Inventory account of P81.088 remained unreconciled with the

records of the City General Services Office (CGSO);

Accounts Payable (AP) of P527.848 million were not established

for lack of complete documentations to substantiate the items; and

Accounts payable amounting to P17.243 million is dormant for two

to five years.

Mabalacat City Management Letter

No submitted Financial Statements

96


Municipalities

Apalit Qualified Property, Plant and Equipment (PPE) accounts amounting to

P160.755 million were not established due to (a) absence of

complete records for PPE totaling to P160.755 million; (b)

unreconciled PPE balance of P24.950 million; (c) unreconciled

Land balance of P2.450 million; (d) non-maintenance of Subsidiary

Ledger Cards and Property, Plant and Equipment Ledger Cards;

and (e) Property custodianship and location were neither

established due to absence of property records and non-conduct

of the annual physical inventory.

Arayat Qualified PPE Accounts of P77.320 million cannot be ascertained due to

failure of the Management to report the value of infrastructure

assets amounting to P51.446 million which should have been an

addition to the existing balance of the account as at year end.

Bacolor Qualified Property, Plant and Equipment (PPE) amounting to P117.386

million were not established due to (a) absence of records for PPE

totaling to P94.947 million; (b) unreconciled difference of P11.288

million between the accounting records and the inventory report;

(c) undepreciated various PPE valued at P63.077 million; (d)

unrecorded donated properties without cost; and (e) non-

maintenance of Property Cards by the Municipal Treasurer’s

Office.

Candaba Qualified Cash in bank amounting to P101.517 million remained unreliable due to failure of the Management to prepare Bank Reconciliation Statements.

Floridablanca

Qualified Property, Plant and Equipment (PPE) accounts with a reported net book value of P135.992 million (net of Construction in Progress amounting to P29.298 million) as of December 31, 2018 was unreliable owing to the (a) failure of the Management to conduct a complete physical inventory; (b) unreconciled amounts of the physical inventory report with the accounting records; (c) various parcels of land declared and owned by the Municipality not covered with Transfer Certificates of Title; and (d) non-provision of depreciation at an undetermined amount for Infrastructure Assets and other PPE.

Guagua

Modified/ Qualified

Property, Plant and Equipment (PPE) with reported net book value

of P162.899 million (net of Construction in Progress accounts) as

of December 31, 2018 was not established owing to (a) various

parcels of land declared as owned and titled in the Municipality of

Guagua not recognized in the books; and not covered with

Transfer Certificates of Title (TCT)/Original Certificates of Title

(OCT); (b) incomplete physical inventory and property records; (c)

unreconciled amounts of the report of inventory with the accounting

records; and (d) non-provision of depreciation at an undetermined

amount for the infrastructure assets totaling P86.764 million.

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Lubao

Qualified

Property, Plant and Equipment (PPE) accounts with carrying value

of P296.676 million or 39.17% of the total assets was not

established owing to (a) continuous failure of the Management to

complete the conduct physical inventory of its property during the

year; (b) non-submission of the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE); (c) non-reconciliation of

property records by the Municipal Accountant’s Office and the

Property Custodian; (d) unrecognized parcels of land of

undetermined value owned by the Municipality; and (e)

unascertained ownership of several parcels of land without TCTs

with a total assessed value of P20.889 million.

Macabebe

Qualified Property, Plant and Equipment (PPE) accounts carried in the

statement of financial position at P97.343 million were not

established due to (a) non-submission of a comprehensive

inventory report; (b) continual omission on the maintenance of

Property Cards, Ledger Cards and Acknowledgement Receipts; (c)

inability to substantiate the details of land account; (d) unrecorded

Transportation Equipment; (e) understatement of recorded

depreciation expense; and (f) failure to monitor and report

Unserviceable PPEs.

Magalang Qualified Accounts in the financial statements did not reflect the actual

balances when tallying all accounting journals and comparing it

with working trial balance resulting in huge variance of P36.938

million and P31.658 million, respectively; (b) over-provision of

depreciation expense equivalent to one-month or P.781 million; (c)

unaccounted recorded land valued at P7.472 million; and (d)

understatement of various Property, Plant and Equipment accounts

totaling P23.974 million acquired thru Trust Fund.

Masantol

Qualified

Property, Plant and Equipment (PPE) accounts are carried in the statement of financial position at P86.336 million were not established due to (a) absence of records for PPE totaling to P86.336 million; (b) unreconciled Land balance of P3.067 million; (c) non-maintenance of Subsidiary Ledger Cards and Property, Plant and Equipment Ledger Cards; and (d) Property custodianship and location were neither established due to absence of property records and non-conduct of the annual physical inventory.

Mexico

Qualified Understatement of the receivables and government equity owing to the non-recording of the disallowances which became final and executory as receivable of P19.693 million;

Overstatement of inventories due to inclusion of non-existent inventories totaling to P6.539 million; and,

Overstatement of the Due to BIR accounts by P.515 million due to errors in recording.

98


Minalin

Modified/ Qualified

Property, Plant and Equipment (PPE) accounts are carried in the

statement of financial position at P46.025 million were not

established due to (a) failure of the Inventory Committee to fully

complete the physical inventory taking of the property owned by the

agency; (b) failure to prepare and submit complete Report on the

Physical Count of Property, Plant and Equipment (RPCPPE) of all

PPE; (c) non-reconciliation of property records by the Municipal

Accountant’s Office and the Property Custodian; and (d)

unrecognized 34 parcels of land (including donated lots); and (e)

unascertained ownership of several parcels of land without TCT’s

with total market value of P3.120 million and assessed value of

P.573 million.

Porac

Qualified Land account booked at P12.185 million under the Property, Plant

and Equipment (PPE) accounts as of year-end was not established

due to the (a) unrecognized parcels of land of undetermined value

owned by the Municipality; and (b) unascertained ownership of

several parcels of land without TCTs as of year-end.

San Luis

Qualified Overstatement of inventories due to inclusion of non-existent inventories totaling to P.160 million;

Property, Plant and Equipment (PPE) accountis unreliable due to the failure to account/recognized infrastructure assets and record donated medical equipment with aggregate value of P1.827 million and failure to de-recognize in the books of accounts the cost of donated parcels of land.

San Simon

Qualified Property, Plant and Equipment accounts, net of depreciation,

amounting to P126.255 million was not substantiated due to non-

conduct of physical inventory/non-submission of the Report on the

Physical Count of PPE (RPCPPE), non-maintenance of property

records, and annual depreciation for CY 2017-2018 was not

recognized; and (b) roads and infrastructure assets costing P22.985

million were not recorded in their respective PPE account.

Santa Ana

Qualified Property, Plant and Equipment (PPE) account is unreliable due to

the failure to record donated medical equipment with aggregate

value of P1.167 million and absence of property records, non-

conduct of physical count and failure to submit the required report.

Santa Rita

Qualified

Property, Plant and Equipment (PPE) accounts with a reported

carrying value of P180.110 million as of December 31, 2018 was

unreliable owing to the (a) failure of the Management to conduct

physical inventory; (b) non-provision of depreciation amounting

to P2.330 million of the PPE acquired in CY 2018 totaling P21,961

million; c) non-maintenance of complete property cards by the

Municipal Treasurer; and (e) parcels of land declared and owned

by the Municipality not covered with Transfer Certificates of Title.

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Santo Tomas Qualified Property, Plant and Equipment are carried in the statement of financial position at P54.036 million were not established owing to inability of the Accounting and General Services Offices to (a) conduct a complete physical count and submit the corresponding Report on the Physical Count of PPE (RPCPPE); (b) comply with the initial recognition of local road networks costing P7 million as part of the PPE of CY 2018 accounts; and (c) prepare Property Cards (PCs) and Property, Plant and Equipment Ledgers Cards (PPELC) for each category of assets.

Sasmuan

Qualified Real Property Tax and Special Education Tax Receivables as of December 31, 2018 in the amount of P2.308 million and P.081 million, respectively, was not established due to the difference of P2.226 million.

Tarlac

Qualified Doubtful balance of the cash in bank amounting to P2.229 billion;

Unadjusted year-end balance of advances to officers and

employees owing to non-liquidation of non-moving cash advances

worth P12.144 million and current year’s cash advances of P1.688

million;

Un-updated receivables from NGOs/POs and NGAs of P8 million

and P1.760 million, respectively;

Unreliable negative balance of inventory accounts at P31.389

million;

Inaccurate year-end net carrying value of Property, Plant and

Equipment (PPE) at P4.371 billion; and,

Unreconciled balance of Due to BIR account amounting to P21.218

million.

City

Tarlac City

Qualified Cash in bank accounts as of December 31, 2018 remained irreconcilable with those appearing in the bank documents, and the Treasury and Accountant’s Office reported cash accounts balances of P801.635 million and P876.160, million, respectively, registering a disparity of P74.525 million;

Receivables amounting to P31.962 million is doubrtful because

P6.414 million of which, aging from ten to 42 years lacked the

detailed information/supporting documents to substantiate the

recorded values; and

Due from Other Funds and Due to Other Funds, for all funds in the amount of P54.308 million and P85.446 million, respectively, are doubtful due to a difference of P31.136 million.

100


Municipalities

Anao Unqualified

Bamban

Qualified Real Property Tax Receivables and Special Education Tax

Receivables totaling P2.020 million as at year-end are unreliable;

and ,

Property, Plant and Equipment (PPE) accounts with a carrying

value of P346.720 million as of December 31, 2018 is unreliable.

Camiling

Unqualified

Capas

Qualified Unreliability of RPT and SET receivables totaling to P22.597 million

as of December 31, 2018 are unreliable; and.

PPE at P500.989 million at year end is inaccurate.

Concepcion Unqualified

Gerona Unqualified

La Paz

Qualified RPT and SET receivables totaling to P1.005 million as of December 31, 2018 are unreliable; and.

PPE amounting to P278.108 million is inaccurate.

Mayantoc

Unqualified

Moncada Qualified RPT and SET receivables totaling to P15.703 million as of December 31, 2018 are unreliable; and.

PPE amounting to P414.441 million is inaccurate.

Paniqui Modified/ Qualified

Overstatement of the balance of the Guaranty Deposits Payable account by P3.813 million;

Unreliable balance of RPT and SET receivables totaling P61.722 million; and,

Inaccurate year-end net carrying value of Property, Plant and Equipment (PPE) at P407.396 million.

Pura Unqualified

Ramos Unqualified

San Clemente

Unqualified

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San Jose

Unqualified

San Manuel Unqualified

Santa Ignacia Qualified RPT and SET receivables totaling P38.436 million are unreliable;

and,

Property, Plant and Equipment (PPE) at P215.440 million is

inaccurate.

Victoria

Qualified Real Property Tax Receivables and Special Education Tax Receivables totaling P2.833 million as at year-end are unreliable; and,

Property, Plant and Equipment (PPE) accounts with a carrying value of P235.337 million as of December 31, 2018 is inaccurate.

Zambales Qualified The Property, Plant and Equipment accounts were overstated by a

net amount of P91.974 million;

Shares from Real Property Taxes totaling to P15.431 million were

not recognized which prescribes the recognition of revenue from

Non-exchange Transactions;

Discrepancy of P21.390 million between the reciprocal accounts

Due to and Due from Other Funds;

Liability accounts were overstated by a net amount of P9.919

million for non-derecognition of settled loans amounting to P10.012

million; and,

Non-recognition of accrued interest expense of P.093 million.

City

Olongapo City

Qualified Non-maintenance of Subsidiary Ledgers (SLs) to substantiate the

PPE General Controlling accounts totaling to P5.078 billion as at

year-end;

Depreciation was either not provided or erroneously recorded

resulting to the net overstatement of various PPE accounts by

P160,274 million;

Discrepancy of P50.519 million was noted between the reciprocal

accounts Due to Other Funds and Due from Other Funds.

Municipalities

Botolan

Qualified Failure to restore the recording of Public Infrastructures with a net

carrying value of P77.848 million to the Property, Plant and

Equipment accounts;

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Unrecorded unissued medicines and medical supplies totaling to

P.286 million;

Erroneous recognition of fees amounting to P.099 million, imposed

for the processing of Certificate of Title on housing units and lots of

beneficiaries at New Taugtog Resettlement Area, as Other Service

Income instead of Trust Liability;

Non-recognition of various equipment and tools worth P.236 million

as assets; and

Shares of a Non-Governmental Organization (NGO) in the

entrance fees collected at Tukal-Tukal Falls amounting to P.019

million were erroneously treated as income of the Municipality

instead of Other Payables.

Cabangan

Qualified Understatement of accumulated depreciation of Road Networks

and Motor Vehicles by P1.264 million; and,

Non-recognition of certain PPE items amounting to P6.120 million.

Candelaria

Qualified Collections made during the month of December 2018 amounting

to P.464 million were not recognized on the proper accounting

period;

Construction Materials Inventory and Construction in Progress

accounts were understated by a total of P1.177 million:

Inventory items such as personal protective equipment totaling to

P.096 million were inappropriately charged to Other Maintenance

and Operating Expenses account.

Castillejos Qualified Property, Plant and Equipment (PPE) accounts were uncertain due

to recording of several property, plant and equipment based on the

tax assessed value instead of the cost or market value and non-

recognition of depreciation thereof resulting in a net

understatement of P8.553 million;

Existence of dormant balances under the Due to NGAs/GOCCs

and Due from Other LGUs accounts casting doubt on the

collectability and reliability of the ledger balances of P10.483

million and P.553 million, respectively.

Iba

Modified/ Qualified

Property, Plant and Equipment (PPE) accounts with a net carrying amount of P354.704 million as of December 31, 2018 were uncertain due to the failure to adopt depreciation accounting for various PPE accounts costing P126.893 million or 38.82% of the total depreciable assets of the LGU; and improper accounting treatment for completed project/PPEs acquired out of Trust Fund resulting to the non-recognition of depreciation expenses of P.339 million;

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Interest Expenses incurred on loans from East West Banking Corporation and Interest Payable accounts were both understated by P1.020 million due to failure to recognize the accrual thereof in the books of the Municipality; and,

Receivables from market rental were not recognized.

Masinloc

Qualified Property, Plant and Equipment (PPE) accounts with a net carrying amount of P897.502 million as of December 31, 2018 were uncertain due to the (a) improper accounting treatment for (a) ongoing and completed projects totaling to P47.218 million; and (b) erroneous classification to PPE of assets acquired for distribution and small tangible items with aggregate costs of P.7307 million; and (b) misclassification of PPE accounts amounting to P.282 million.

Palauig Qualified Property, Plant and Equipment (PPE) accounts with carrying

amount of P172.347 million or 74.48% were uncertain due to non-

provision of depreciation and P.137 million was committed in

recording the accumulated depreciation of irrigation canal to

Accumulated Depreciation – Flood Control System, instead of

Accumulated Depreciation – Water Supply System.

San Antonio Modified/ Qualified

Property, Plant and Equipment valued at P269.184 million is

unreliable due to non-recognition of depreciation of P5.908 million

and improper accounting treatment for a completed project of

P3.947 million;

Purchases of welfare goods for distribution amounting to P1.224

million were recognized as outright expenses.

San Felipe

Modified/ Qualified

Assets and liabilities were misstated by P9.737 million and P4.523

million, respectively, due to the improper recording of the receipt,

transfer and utilization of the loan from the Municipal Development

Fund Office (MDFO).

San Marcelino

Modified/ Qualified

Properties acquired such as furnitures, fixtures and office

equipment worth P1.050 million were erroneously recognized as

Repair and Maintenance Expenses and Construction in Progress,

thus, the corresponding cost of depreciation of P.227 million was

not taken-up;

Shares from Real Property Taxes and Tax on Sand, Gravel and

Other Quarry Products totaling P1.214 million were not

recognized;

Uncollected rentals from stall leases/occupants of government-

owned building and market amounting to P.384 million were not

accrued as at year-end;

RPT/SET Receivables and Deferred Credit accounts was not

made upon receipt of the municipal share from RPT and SET of

P.452 million each;

104


Payables totaling to P.530 million which were already paid

remained unadjusted in the books.

San Narciso

Modified/ Qualified

Overstatement in the Property, Plant and Equipment (PPE)

accounts of P.142 million due to the non-provision of depreciation

of P.848 million;

Improper recording/non-recording of assets with net

understatement of P.705 million; and,

Unreconciled differences of P2.445 million between the amount of

the recorded RPT and SET receivables and the related Deferred

Credits accounts.

Santa Cruz Qualified Understatement in the Assets account of P10.157 million due to

the non – capitalization of borrowing cost;

Non–recognition of audit disallowances under Receivables –

Disallowances and Charges amounting to P3.772, million; and,

Understatement of Net Assets/Equity for P2.389 million due to the

overstatement of Interest Expenses on loans.

Subic

Disclaimer Failure of the Municipality to submit 5,411 transaction documents

which is equivalent to 89.77% of the total transactions for CY 2018

Region IV-A - CALABARZON

Batangas

Qualified Other Receivables and Trust Liabilities accounts are overstated by the amount of P581.315 million;

Recorded transactions relating to the Renewal of Lease Agreement

dated September 25, 2017 with the Lyceum of the Philippines

University (LPU)- Batangas on the lease of the 27,270 square

meters lot and recognition of the said lot amounting to P245.430

million do not conform with the provisions of Philippine Public

Sector Accounting Standards (PPSAS) 1, “.

Inventories of P251.015 million cannot be fully ascertained ;

Receivables – Due from LGUs and Financial Liabilities, Current –

Due to LGUs, as of December 31, 2018 of P93.423 million and

P81.467 million, respectively, are doubtful, arising from non-

identification of reconciling items of P68.262 million and P80.018

million, respectively, on the reciprocal accounts of the concerned

Municipal Accountants.

Financial Liabilities, Current - Accounts Payable and Due to

Officers and Employees of P32.908 million is also doubtful;

105


Loans Receivables-Others of P13.093 million include accounts

which had been outstanding for more than five years and not

reconciled with complementary records of the concerned provincial

offices.

Biological Assets of P13.240 million are doubtful since it is not supported by an updated Inventory Report and/or Status Report for Livestock Dispersal Project;

Motor Vehicles still includes units that were already auctioned and disposed through negotiated sale in January 13, 2016;

Other Property, Plant and Equipment (OPPE) also includes lost/stolen vehicles with carrying value of P1.663 million;

Surplus is understated by Income from Consignment Operations of


Hospital Fees formed part of the P164.069 million Receivables

from PhilHealth and other sponsoring agencies, where such

accounts have been recognized as Trust Liabilities.

Receivables and Surplus are overstated by the Utilities Expense

that should have been borne by entities that are not within the

Province’s operations but are doing business inside the Provincial

Capitol compound.

Cities:

Batangas City Qualified Unreconciled Property, Plant and Equipment (PPE) accounts with

the Report of Physical Count of PPE (RPCPPE) maintained by the

General Services Office (GSO) still persisted as of year-end 2018

with a total deficiency of P447.440 million due to presence in the

books of properties already auctioned/sold/demolished,

unidentified beginning balances, and unreconciled items with the

inventory report;

Receivables accounts totaling P56.552 million remains doubtful .

Lipa City

Qualified Real Property Tax (RPT) Receivables/Deferred Real Property Tax

Income of P15.024 million and Special Education Tax (SET)

Receivables/Deferred Special Education Tax Income of P3.956

million are unreliable;

Land account balance of P196.463 million as of December 31,

2018 was misstated due to 37 unrecorded lots owned by the City

and one lot costing P6.569 million, recorded twice in the books

accounts due to non-reconciliation of inventory results and

accounting records.

Tanauan City

Modified/ Qualified

Property, Plant and Equipment (PPE) with an aggregate carrying

value of P2.539 billion net of Construction in Progess (CIP) could

106


not be ascertained due to: a) non-creation of an Inventory

Committee to conduct physical count of PPE and prepare the

corresponding report in the prescribed form; b) non-disposal of

unserviceable property valued at P22.960 million; and c) non-

reconciliation of the discrepancy amounting to P633.220 million

between the Accounting and Property records;

Road Networks Ledger and Property Cards for all roads and its


Office and the General Service Office (GSO), thus, casting doubts

on the validity, accuracy and existence of the recorded Road

Networks of P292.221 million, net of depreciation as of year-end;

One Hundred Eleven (111) parcels of land acquired by the City

through purchase and donations amounting to P23.993 million and

were recorded in the City’s books of accounts, were not covered

with Transfer Certificate of Title (TCT), while 49 parcels with a

market value of P211.281 million were not booked-up, of which 31

parcles were also not covered with TCT.

Land with an area of 13,638 square meters and assessed value of

P.859 million registered in the name of the Roman Catholic church

was recorded in the books and included in the Inventory of Land

submitted;

Fund Transfers/Grants and other collections received from

Commission on Higher Education (CHED), Technical Education

and Skills Development Authority (TESDA) and other sources

amounting to P9.462, million as well as the disbursements in the

total amount of P.321 million were not recorded in the City’s books

of accounts;

Cash Advances for confidential funds and specific purpose

amounting to P3.560 million and P.036 million, respectively, were

not liquidated at year-end and/or settled;

Loans Receivable balance of P9.162 million as of December 31,

2018, only P1.236 million or 12.02 per cent were collected during

the year;

Absence of proper monitoring and control on the maintenance of

subsidiary ledgers/records per debtor resulted in

abnormal/negative balances on the schedules of Loan Receivable

account in the Trust Fund amounting to P.017 million;

Eight thousand two hundred sixteen (8,216) pieces of Accountable

Forms/Official Receipts issued by the City for the period January to

November 2018 with an aggregate value of P60.524 million were

not submitted to the Audit Team for post-audit;

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Unremitted GSIS premium contributions of P.008 million as of

December 31, 2018 and unreconciled in-default loan accounts and

unpaid premiums in the total amount of P2.909 million per GSIS

records.

Municipalities

Agoncillo

Qualified Property, Plant and Equipment (PPE) account amounting to

P140.048 million (gross) of the Municipality could not be

ascertained due to several noted deficiencies.

Cash in Bank- Local Currency, Current Account (LCCA) could not

be established due to (a) unreconciled Cash in Bank balance as of

December 31, 2018 of P105.143 million with the Municipal

Treasurer’s cashbook of P105.160 million resulting to a difference

of (P.017 million); (b) non-maintenance of separate cashbook and

subsidiary ledger for each Cash in Bank account under Trust Fund;

and (c) the presence of stale checks amounting to P.555 million

and cancelled check in the amount of P.001 million.

Real Property Tax (RPT) Receivables and Special Education Tax

(SET) Receivables as of December 31, 2018 totaling P3.372

million, net of discount, were doubtful as to its reliability due to (a)

untimely set up of the RPT/SET Receivable; (b) undue cancellation

of the beginning balance of the receivable account; and (c) failure

of the Municipal Treasurer to furnish the Summary of Tax

Delinquent as of year-end.

Various supplies procured by the Municipality during the year which

amounted to P5.369 million were taken up in the books as direct

expenses instead of recording them through their proper Inventory

accounts following the perpetual inventory approach.

Alitagtag

Qualified Property, Plant and Equipment accounts totaling P148.855 million

352.72 net of depreciation, has a reported discrepancy of P161.350

million between the latest physical count and financial statement

balances

Unaccounted and unserviceable properties amounted to P22.734

million and P4.610 million as well as barangay structures still form

part of the PPE:

11 parcels of Land with a total assessed value of P2.639 million

have no Torrens Certificate of Title under the name of Municipality

hence not recorded in the books of accounts; and,

Real Property (RPT) and Special Education Tax (SET)

Receivables totaling P5.306 million at year-end was doubtful due

to discrepancies of P2.448 million with the Municipal Treasurer’s

Report of Delinquent Accounts of P2.858 million.

108


Balayan Qualified Property, Plant and Equipment (PPE) with a carrying amount of

P422.092 million remained unreliable due to: a) inclusion of

undetermined prior years’ balances totaling P104.605 million in the

reports submitted by the Municipal General Services Officer; b)

unreconciled PPE records between Accounting Office and General

Services Office; c) payments for various PPE under Trust Fund

directly debited to Trust Liability account instead to appropriate

asset account; and d) inclusion of unserviceable properties

amounting to P14.033 million in the inventory reports and in the

books;


Receivables of the Municipality amounting to P119.396 million and

P119.008 million respectively, are doubtful due to: a) unreconciled

balances; and b) absence of details of the accounts showing the

list of the taxpayers and the amounts collectible from them and

were not reconciled with the Summary of Delinquent Properties

submitted by the Municipal Treasurer’s Office as at December 31,

2018;

P10 Million representing payment of business taxes was

erroneously taken up in the Trust Fund under account Due to LGUs

instead of Due to Other Funds and the amount of P.049 million as

receivables from Special Education Fund/General Fund (SEF/GF)

was presented as Other Receivables in the Trust Fund instead of

account Due from Other Funds;

Due from Other Funds and Due to Other Funds, which are

reciprocal in nature, under the General Fund (GF) and Trust Fund

(TF) showed an unreconciled difference of P.070 million as of

year-end; and,

Due to LGU under Trust Fund cannot be ascertained due to: (a)

non disclosure in the Notes to Financial Statements on the nature

of P16.007 million; (b) unreconciled balance with the reciprocal

accounts in the books of the Province; (c) inappropriate

classification of account; and (d) the amount of P.369 million was

not substantiated with documents and remained in the books for

several years that considered as dormant, thus rendered the

balance of this account doubtful.

Balete Qualified Property, Plant and Equipment (PPE) accounts costing P107.310

million, with net book value of P75.990 million, as of December 31,

2018 remained doubtful due to: (a) unreconciled discrepancies of

P79.386 million between the Accounting and Treasurer’s Office

records; (b) maintaining unserviceable properties as stated in the

Treasurer’s Office inventory report with total cost of P1.365 million;

and (c) improper format of Report on Physical Count of Property,

Plant and Equipment (RPCPPE);

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Land account year-end balance of P14.829 million is unreliable due

to 16 unrecorded lots owned by the Municipal Government and

Land amounting to P1.764 million were reflected in the books of

accounts without proof of ownership.

Bauan

Qualified Property, Plant and Equipment (PPE) with acquisition cost of at

least P63.329 million was not established affecting the fair

presentation of the PPE accounts financial statements.

Two hundred twenty-five (225) parcels of land owned by the

Municipality with market value of P1.439 billion were not recorded

in the books of account; and,

Inventory account balances totaling P23.007 million is misstated

due to misclassification of land amounting to P19.035 million for a

housing project.

Calaca

Qualified A net difference of P2.271 million between the total reported

balance of Property, Plant and Equipment (PPE) accounts of

P1.214, billion in the accounting records and the corresponding


(RCPPE) of P1.212 billion;

Direct debit to School Buildings account and Construction in

Progress Account instead of Advances to Contractors Account for

payment of 15% mobilization fee amounting to P11.296 million

affected the fair presentation of the Property, Plant and Equipment

accounts; and,

Real Property Tax (RPT) and Special Education Tax (SET) Receivables of the Municipality amounting to P15.812 million and P12.597 million respectively are unreliable due to unreconciled difference of P3.214 million and discrepancies with the Municipal Treasurer’s Office’s reported balances of tax delinquencies as of December 31, 2018.

Calatagan Qualified Property, Plant and Equipment worth P448.929 million, gross of

accumulated depreciation, could not be ascertained due to: a) partial physical count and incomplete Report of Physical Count of Property, Plant and Equipment (RPCPPE) totaling P247.923 million; b) discrepancies between the RPCPPE submitted by the Municipal Treasurer’s Office and the Subsidiary Ledgers (SL) of the Accounting Department totaling to P146.735 million; c) presence of beginning/unidentified balances of PPEs in the Accounting’s SL totaling P64.300 million; d) non-recognition of depreciation for PPEs with a total cost of P4.111 million; e) various projects funded from the trust fund which were completed as of December 31, 2018 included items and works totaling P6.213 million were not recorded as PPE and were not subject to depreciation in the general fund; and f) PPE Ledger Card and Property Card were not maintained while Acknowledgement Receipts for Equipment were not updated.

110


Calatagan

Qualified

Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable totaling P36.978 million could not be ascertained due to its discrepancies with the Municipal Treasurer’s Office reported balance of P17.992 million in their delinquent real property and special education taxes as of December 31, 2018, thereby incurring a total difference of P18.986 million;

Report of RPT Delinquency as of December 31, 2017 showed an ending balance of P17.992 million; and,

Due from LGUs and Due to LGUs of the Municipality amounting to P0.00 and P 6.106 million, respectively, could not be fully ascertained due to: (a) non-reconciliation of the said receivables and payables with the books of the Province of Batangas; (b) presence of long outstanding unaccounted/unsupported balance of Due to LGUs of P.106 million and; (c) inclusion of various items amounting to P3.061 million, the nature of which does not primarily fall under such account.

Cuenca

Qualified Real Property Tax Receivable (RPT) and Special Education Tax

(SET) Receivable totaling P2.683 million were not reconciled with

the Summary of Tax Delinquencies as of December 31, 2018 of

P3.151 million.

Ibaan Qualified Property, Plant and Equipment (PPE) accounts totaling P114.006

million, net of depreciation, were doubtful due to a reported

discrepancy of P85.692 million with the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and presence

of unidentified/unaccounted beginning balances of P22.123 million

and absence of reconciliation between accounting and property

records and failure to dispose unserviceable properties.

Laurel Qualified Property, Plant and Equipment (PPE) of P313.570 million

representing 60 per cent of the total assets is unreliable due to (a)

inclusion of small value items; (b) presence of undisposed

properties and (c) unreconciled records;

Unremitted GSIS contributions of P1.145 million, as of December

31, 2018 and unreconciled in-default loan accounts and unpaid

premiums in the total amount of P.155 million per GSIS records,

cast doubts on the reliability of the ‘Due to GSIS’ account and

detrimental to the GSIS members-employees of the LGU.

Lemery Modified/ Qualified

Property, Plant and Equipment account amounting to P575.534

million (gross) could not be ascertained due to several deficiencies

noted.

Lian Modified/ Qualified

Property, Plant and Equipment worth P274.179 million gross of accumulated depreciation, could not be ascertained due to: a) partial physical count and incomplete Report of Physical Count of Property, Plant and Equipment (RPCPPE) totaling P242.680 million; b) discrepancies between the RPCPPE submitted by the General Services Office (GSO) and the Subsidiary Ledgers (SL) of

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the Accounting Department totaling to P11.464 million; c) presence of beginning/unidentified balances of PPEs in the Accounting’s SL totaling P2.219 million; d) non-recognition of depreciation for PPEs with a total cost of P.631 million; and e) PPE Ledger Card and Property Card were not maintained while Acknowledgement Receipts for Equipment were not updated;

Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable totaling P24.456 million could not be ascertained due to its discrepancies with the Municipal Treasurer’s Office reported balance of P20.695 million in their delinquent real property and special education taxes as of December 31, 2018, thereby incurring a total difference of P3.761 million;

Report of RPT Delinquency as of December 31, 2018 showed an ending balance of P20.695 million implying the Municipality’s failure to enforce its collection;

Due from LGUs and Due to LGUs of the Municipality amounting to P.028 million and P6.138 million, respectively, could not be fully ascertained due to: (a) non reconciliation of the said receivables and payables with the books of the Province of Batangas; (b) presence of long outstanding unaccounted/unsupported balance of Due to LGUs of P.034 million; and, (c) inclusion of various items amounting to P4.658 million; and,

The current portion of the Loans Payable - Domestic amounting to

P6.406 million was presented as Non-current liabilities.

Lobo

Qualified Property, Plant and Equipment totaling P147.862 million was not

reconciled with the Inventory Report balances of P157.610 million

or differed by P9.748 million and the absence of specific and

detailed description, physical attributes and location of reported

properties of P32.597 million in the Inventory Report rendered the

report unreliable;

Disclosure for other receipts of P79.675 million and other payments

of P20.437 million were not provided in the Notes to the Financial

Statements as of December 31, 2018.

Mabini

Qualified Property, Plant and Equipment accounts totalling P386.752 million net of depreciation, could not be ascertained due to: a) continuous failure of the Municipality to conduct physical inventory of all its assets and prepare the Report on Physical Count of Property, Plant and Equipment (RPCPPE) b) non-identification of missing and unserviceable properties and c) absence of reconciliation of accounting and property records; and,


Receivables amounting to P7.281 million and P6.144 million,

respectively at year end were doubtful due to booking up of

receivables based on estimates and not from the Treasurer’s

Certified List of Taxpayers.

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Malvar Qualified Property, Plant and Equipment (PPE) accounts with net book value

of P328.398 million was not substantiated by physical count;

Real Property Tax (RPT) Receivables/Deferred Real Property Tax

Income of P26.825 million and Special Education Tax (SET)

Receivables/Deferred Special Education Tax Income of P23.919

million totaling P50.744 million are unreliable as they do not tally

with the total amount of delinquent taxes reported by the Municipal

Treasurer amounting to P11.949 million and set up of tax

collectible on taxable real properties at the beginning of the year

was based on RPT Target made by the former OIC - Municipal

Treasurer;

Road Networks ledger and property cards for all roads and its

components were still not prepared and maintained by the

Accounting Office and the Treasurer’s Office, respectively, and the

Report on Local Road Network and Report on the Physical Count

of the Road Network System were not prepared, thus rendering the

recorded Road Networks of P2.166 million unreliable.

Mataas na Kahoy

Qualified Inventories and Property, Plant and Equipment (PPE) valued at

P.722 million and P113.988 million, respectively as of end of the

year could not be determined due to non-submission of the Report

on the Physical Count of Inventories and Report on the Physical

Count of Property, Plant and Equipment (RPCPPE);

Real Property Tax and Special Education Tax Receivables of

P.616 million, and P.348 million, respectively do not reconcile with

the Municipal Treasurer’s report on Tax delinquency totaling

P4.306 million.

Nasugbu Qualified Property, Plant and Equipment worth P1.112 billion, gross of accumulated depreciation, could not be ascertained due to: a) partial physical count and incomplete Report of Physical Count of Property, Plant and Equipment (RPCPPE) totaling P1.016 billion; b)discrepancies between the RPCPPE submitted by the General Services Office (GSO) and the Subsidiary Ledgers (SL) of the Accounting Department totaling to P44.687 million; c) presence of beginning/unidentified balances of PPEs in the Accounting’s SL totaling P243.664 million; and d) PPE Ledger Card and Property Card were not maintained and Acknowledgement Receipts for Equipment were not updated;

Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable totaling P610.587 million could not be ascertained due to its discrepancies with the Municipal Treasurer’s Office reported balance of P609.413 million in their delinquent real property and special education taxes as of for CY 2018, thereby incurring a total difference of P1.351 million;

Report of RPT Delinquency as of December 31, 2018 showed an ending balance of P609.413 million implying the Municipality’s failure to enforce its collection.

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Due from LGUs and Due to LGUs of the Municipality amounting to

P50.470 million and P37.612 million, respectively, could not be

fully ascertained due to non-reconciliation of the said receivables

and payables with the books of the Province of Batangas;

Due and Subsidy from Other Funds accounts balance of P17.258

millionat year end did not reconcile with its reciprocal account Due

and Subsidy to Other Funds accounts with total balance amounting

to P16.483 million, thus cast doubt on the reliability of the recorded

transactions.

Padre Garcia Qualified Property, Plant and Equipment (PPE) accounts totaling P282.875

million net, were doubtful due to the failure of the General Services

Officer- Designate to prepare a complete Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and non-

reconciliation of records between the Accounting Office and

General Service Office;

Land account in the amount of P32.178 million under the General

Fund is doubtful due to eleven (11) parcels of land acquired either

through purchase or donation which were without peso value in the

books of account, remained untitled and the amount disbursed for

the purchased of four (4) parcels of land amounting P9.011 million

had exceeded by P.346 million and disallowed in audit and are not

covered by Tax Declarations of Real Property/ Assessment of Real

Property and Transfer Certificate of Titles.

Rosario Modified/ Qualified


million net of depreciation, were doubtful due to the failure of the

General Services Officer to conduct, prepare and submit a

complete Report on Physical Count of Property, Plant and

Equipment (RPCPPE) and non-reconciliation of records between

the Accounting Office; and,

Cash in Bank – Local Currency, Current Account balance of

P248.550 million could not be determined due to various stale

checks amounting to P.110 million and P.210 million in the General

Fund and Trust Fund, respectively; reconciling items of P8.057

million not taken up in the General Ledgers/Financial Statements;

and variance of P2.373 million between the cashbooks and the

general ledgers.

San Jose Unqualified

San Juan

Qualified Absence of inventory committee created for the conduct of physical

checking of municipal properties, the preparation of the appropriate

inventory reports and its reconciliation with the accounting records,

resulted to increase in the reported deficiency between the year-

end book balances of Property, Plant and Equipment (PPE)

accounts and the Report on Physical Count of Property, Plant and

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Equipment (RPCPPE) at year-end in the total amount of P93.546

million from last year’s difference of P4.818 million; and,

Cost of the two units, two-storey apartment building with

construction cost of P1.196 million and the proportionate

acquisition cost of the 2,044 square meters (sqm2) parcel of land,

both intended for sale to municipal employees or to any interested

buyer were recorded under the accounts, Investment Property-

Building, and Property Plant and Equipment-Land, respectively,

instead of Merchandise Inventory account.

San Luis Qualified PPE accounts with a net book value of P112.717 million as of

December 31, 2018 remains doubtful; and,

Real Property Tax (RPT) Receivable and Special Education Tax

(SET) Receivable totaling P3.134 million were not reconciled with

the delinquent taxes per Treasury records amounting to P10.456

million as of December 31, 2018, thereby incurring a total

difference of P7.332 million.

San Nicolas Qualified Property, Plant and Equipment amounting to P84.734 million was

not validated, thereby rendering the balances of the said accounts

unreliable.


Receivables for CY 2018 were not set up.

Failure to record Biological Assets that are still existing but were

acquired prior to 2017 and the receivables arising from the sale of

these assets;

Non reconciliation of the CY 2018 surplus with the net cash flows

from operating activities, casting doubt in the reliability of the

amounts presented in the financial statements.

San Pascual

Qualified Property, Plant and Equipment totaling P739.445 million remained not reconciled with the Inventory Report balances of P630.234 million or differed by P109.211 million;

103 parcels of land owned by the Municipality with market value of P47.427 million based on Tax Declaration were not recorded in its books of accounts;

141 parcels of land, consisting of 103 unrecorded and 38 recorded in the books, were not yet covered by Certificate of Title; and,

Infrastructure assets totaling P18.582 million 384.56 funded out of Trust Funds/Receipts were not promptly recognized in the books.

Property, Plant and Equipment (PPE) accounts as of year-end amounting to P134.788 million gross with an accumulated depreciation of P31.414 million remained unreliable due to unlocated properties worth P1.601 million (gross) and due to incomplete inventory taking of all the LGU’s owned properties;

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Santa Teresita

Qualified Completed projects under 20% Development Fund totaling P2.666 million were booked as Donations instead of PPE;

Budget and actual amounts of Maintainance and Other Operating

Expenses per Statement of Comparison of Budget and Actual

Amounts (SCBAA) as of December 31, 2018 does not reconcile

with the figures presented in the Statement of Financial

Performance for the same year.

Sto. Tomas Qualified Property, Plant and Equipment (PPE) of P812.672 million representing 47.21 per cent of the total assets is unreliable due to (a) inclusion of small value items; (b) presence of undisposed properties and (c) unreconciled records;

Road Networks ledger and property cards for all roads and its


Office and the General Service Office (GSO), respectively, due to

the non-submission of the complete description and cost

segregation of road components for road projects by the

Engineering Office, thus casting doubts on the validity, accuracy

and existence of the recorded Road Networks of P33.331 million,

net of depreciation as of year-end.

Taal Qualified Property, Plant and Equipment (PPE) totaling P280.405 million

(gross) could not be ascertained due to a) balances of PPE

accounts in the Lapsing Schedule did not tally with the balances

presented in the Financial Statements; b) Property Plant and

Equipment totaling P58.751 million were not provided with

depreciation resulting in overstatement of PPE accounts and

understatement of expenses in the financial statements for the

year; c) results of the physical count by the Inventory Committee

were not reconciled with the property and accounting records; and

d) Property, Plant and Equipment Ledger Cards and Property

Cards maintained by the Accounting Office and General Services

Office, respectively, were not updated and the Acknowledgement

Receipts of Equipment (ARE) of PPE from prior years’ acquisitions

were also not updated;

Unexpended balance of the Local Disaster Risk Reduction and

Management Fund of P2.729 million was not transferred to the

Special Trust Fund under the account “Trust Liability – DRRM” in

the trust funds books; and,

Loans Payable – Domestic amounting to P5.593 million was

classified under Current Liabilities.

Talisay

Qualified

Property, Plant and Equipment (PPE) of P368.615 million

representing 68.38 per cent of the total assets is unreliable due to

(a) inclusion of small value items; (b) presence of undisposed

properties and (c) unreconciled records;

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Prior year’s obligations for delivered good and services,

transportation expenses and utilities amounting to P1.927 million

were paid out of the current year appropriations even if these were

not recorded as Account Payable;

Financial assistance to schools/school officials and barangays

totaling P1.111 million and P1.440 million, respectively, were not

based on a clear-cut guidelines on the implementation and

submission of liquidation report,

Unremitted GSIS contributions of P.809 million as of December 31,

2018 and unreconciled in-default loan accounts and unpaid

premiums in the total amount of P3.336 million per GSIS records.

Taysan Qualified Prior year’s obligations for delivered good and services,

transportation expenses and utilities amounting to P1.926 million

were paid out of the current year appropriations even if these were

not recorded as Account Payable.

Tingloy

Qualified Property, Plant and Equipment with a net book value of P45.357

million could not be ascertained due to unreliable Report on

Physical Count of Property, Plant and Equipment; and,

Receivables for Real Property and Special Education Taxes

amounting to P.808 million and P.001 million, respectively does not

include taxes collectible for the year due to the absence of amount

receivable per taxpayer certified by the Municipal Treasurer.

Tuy Qualified Property, Plant and Equipment worth P362.636 million, gross of accumulated depreciation, could not be ascertained due to: a) partial physical count and incomplete Report of Physical Count of Property, Plant and Equipment (RPCPPE) totaling P185.175 million; b) discrepancies between the RPCPPE submitted by the designated GSO and the Schedule of PPE from the Accounting Department totaling to P4.570 million; c) presence of beginning/unidentified balances of PPEs in the Accounting’s SL totaling P181.901 million and d) PPE Ledger Card and Property Card were not maintained and Acknowledgement Receipts for Equipment were not updated;

Inventory accounts balance totaling P1.839 million were doubtful due to the failure to conduct the physical count and prepare the Report of Physical Count of Inventories (RPCI) as of December 31, 2018; and,


(SET) Receivable totaling P30.035 million could not be ascertained

due to its discrepancies with the Municipal Treasurer’s Office

reported balance of P19.412 million in their delinquent real property

and special education taxes for CY 2018, thereby incurring a total

difference of P10.622 million.

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Cavite Modified/ Qualified

Provincial Accountant and Provincial Treasurer to continue with

their verification of the discrepancies in the balances of the

reciprocal accounts Due to LGUs and Due from LGUs, noted

above, with the concerned cities and municipalities, after which

make the necessary adjustments. For those receivables and

payables found to be valid, enforce collection and settlement,

respectively;

Provincial Accountant to regularly furnish the City and Municipal

Accountant of the concerned Local Government Units with the

Journal Entry Voucher (JEV) taking up their share in real property,

special education and amusement taxes collected by the Province

so that the concerned Accountants could accordingly record the

receivables from the Province in their respective books.

Heads of Departments and Hospitals to keep records pertaining to the inventory items for distribution transferred to their respective Offices and to conduct semestral physical stock-taking of each inventory item and prepare and submit the Report on the Physical Count of Inventories to Provincial General Services Office for consolidation after which a Consolidated Report be submitted to the Office of the Auditor, copy furnished the Office of the Provincial Accountant.

Cities

Bacoor City


billion could not be established due to the continuous inability of the

City to reconcile the difference of P128.470 million between the

Accounting records and the Report on Physical Count of Property,

Plant and Equipment (RPCPPE); and,


Receivables totaling P349.696 million and the Certified List of

Delinquent Taxes submitted by the Treasurer’s Office amounting

to P708.416 million were both unreliable due to discrepancy of

P358.719 million and the inability of the City to cleanse real

property tax records thru tax mapping.

Cavite City

Modified/ Qualified

Property, Plant and Equipment (PPE) with net book value of

P527,689 million, excluding Land, Construction in Progress and

Items in Transit, as of December 31, 2018 could not be ascertained

due to the existence of a discrepancy of P20.039 million between

the physical count and the accounting records;

Depreciable PPE owned by the City valued at P168.599 million

were not provided with depreciation;

Unserviceable PPE awaiting disposal totaling P24.689 million were

derecognized and the loss from the anticipated sales thereof

amounting to P19.050 million were already recorded in the books,

118


thereby understating the asset and overstating the expense

accounts and these unserviceable properties remained not

disposed of and exposed to further deterioration.

Dasmariñas City Modified/ Qualified


billion could not be established due to the continuous inability of the

City to reconcile the difference of P871.200 million between the

Accounting and Property records;

Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P143.669 million and P205.715 million, respectively, were not reliable as the receivables were set up based on the lump-sum estimates from the Assessor’s Office;

Discrepancies of P62.046 million between the RPT and SET Receivables and the P249.697 million between the said accounts and the List of Delinquent Taxes submitted by the Treasurer’s Office.

Gen. Trias City Qualified Property, Plant and Equipment (PPE) with total book value of

P1.614 billion, excluding Construction in Progress of P11.333

million remained doubtful due to the inability of the Inventory

Committee to conduct physical count of PPE, and the absence of

Property Cards (PCs) thereof and Property, Plant and Equipment

Ledger Cards (PPELCs) for property amounting to P489.525

million.

Inventories and Supplies and Materials Expenses totaling P1.420

million and P337.772 million, respectively, are doubtful due to

adoption of Direct Expense Method of accounting for the receipt

and issuance of supplies and materials instead of the Perpetual

Inventory System; and,

Expenses for the collection, hauling and disposal of solid waste of

the City amounting to P130.540 million was erroneously accounted

as Other Supplies and Materials Expenses instead of the account

Environment/Sanitary Services,

Imus City

Qualified Property, Plant and Equipment (PPE) accounts with carrying

amount of P1.890 billion (Construction in Progress of P64.987

million excluded) as of December 31, 2018 could not be

ascertained due to: (1) discrepancy of P102.745 million between

the accounting records and inventory reports; (2) beginning

balances in lump sum amount of P418.717 million and

unaccounted balances of P87.199 million in the inventory reports;

(3) PPE accounts with carrying amount of P27.802 million without

a corresponding inventory report; and (4) incomplete/unupdated

PPE Ledger Cards;

Local roads network accounts in the Registry of Public

Infrastructure were not yet taken up in the books as Property, Plant

and Equipment (PPE) under the Road Networks account due to the

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inability of the Inventory Committee to conduct an inventory of the

local roads under the jurisdiction of the City;

Due to GSIS of P11.039 million, Due to Pag-IBIG of P2.676 million

and Due to PhilHealth of P1.124 million could not be ascertained

due to: (a) material amount of unremitted/unaccounted balances in

prior years totaling P3.929 million; and (b) discrepancy of P2.341

million between the amount withheld totaling P80,687, million and

actual remittances of P78.345 million for premium contributions

and deductions for loan amortization for the applicable months from

January to November 2018.

Tagaytay City Qualified Property, Plant and Equipment (PPE) accounts with total carrying

value of P3.559 billion, representing 58 per cent of the total assets

of P6.115 billion as of December 31, 2018 were unreliable due to

a discrepancy of P1.023 billion between the Accounting records

and the Report on the Physical Count of Property, Plant, and

Equipment (RPCPPE);

Completed and accepted infrastructure projects in CYs 2015, 2016

and 2017 totaling P45.924 million were recognized in the financial

statement only upon payment in CY 2018; and,

Five ongoing infrastructure projects totaling P12.103 million were

not recorded as Construction in Progress-Infrastructure Assets and

depreciation expenses of completed and accepted projects in

previous years were likewise not recognized in the books.

Trece Martires City

Qualified

Land account was overstated by P31.195 million due to the

inclusion of Land property intended for sale and rental/lease with a

total cost of P13.015 million and P18.182 million, respectively,

while understating the Merchandise Inventory and Investment

Property, Land accounts by the respective amounts.

Seventy five (75) percent of the Infrastructure Assets recorded in

the Registry of Public Infrastructures amounting to P76.033 million

were not yet recognized in the books of account as of December

31, 2018, thereby understating the Infrastructure Assets and

Government Equity accounts by an amount equivalent to the

carrying value of the subject infrastructure assets;

Depreciation expense was not provided for the Infrastructure

Assets recorded in the books amounting to P59.705 million; and,

Recording and reporting guidelines for the Local Roads Asset

Management System were not strictly adhered to by both the City

Accounting and General Services Offices.

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Municipalities

Alfonso Qualified Property, Plant and Equipment (PPE) accounts with total carrying

value of P194.193, million, representing 54.15 per cent of the total

assets of P358.597 million as of December 31, 2018 were

unreliable due to a discrepancy of P20.306 million between the

Accounting records and the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE);

Loans Payable having an account balance of P10.426 million as of

December 31, 2018 disclosed a variance of P.561 million when

compared with the amount reflected in the record of the Land Bank

of the Philippines (LBP).

Amadeo Qualified Property, Plant and Equipment (PPE) accounts with total carrying

value of P194.193 million 54.15 per cent of the total assets of

P358.597 million as of December 31, 2018 were unreliable due to

a discrepancy of P20.306 million between the Accounting records

and the Report on the Physical Count of Property, Plant and

Equipment (RPCPPE);

Loans Payable having an account balance of P10.426 million as of

December 31, 2018 disclosed a variance of P.561 million when

compared with the amount reflected in the record of the Land Bank

of the Philippines (LBP).

Carmona

Unqualified

General Mariano Alvarez

Qualified Property, Plant and Equipment (PPE) accounts aggregating P531.960 million which partake 91 per cent of the Municipality’s total assets of P582,424 million could not be ascertained due to the following:

Existing discrepancies between the accounting records and the Report on the Physical Count of Property, Plant, and Equipment (RPCPPE) of as much as P104.262 million with the former showing bigger amount than the latter;

Inclusion of disposed assets amounting to P1.463 million in the Report on the Physical Count of Property, Plant, and Equipment (RPCPPE); and,

Non-maintenance of Property, Plant and Equipment Ledger Cards (PPELC) and Real Property Ledger Cards (RPLC) by the Accounting Office and incomplete Property Cards by the GSO

Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P7.749 million and P7.258 million, respectively, were not reliable as they differed from each other by P.491 million and its aggregate amount by P24.116 million from the List of Delinquent Taxes submitted by the Treasurer’s Office.

121


General Emilio Aguinaldo

Qualified Real Property Tax and Special Education Tax (RPT/SET)

Receivables amounting to P4.644 million were lesser by P3 million

compared with the amount obtained from the Certified List of Real

Property Tax Delinquencies as of December 31, 2017 prepared

and submitted by the Municipal Treasurer amounting to P7.644

million each casting doubt on the accuracy of the year-end balance

of each account of P4.287 million.

Indang

Qualified Penalties totaling P26.484 million for delinquent Real Property Tax (RPT) and Special Education Tax (SET) were recorded as part of the RPT and SET Receivables, contrary to Section 23 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, thus overstating the RPT and SET Receivables and the corresponding reciprocal accounts Deferred RPT and Deferred SET by P13.242 million each;

Lot procured by one barangay with subsidy from the Municipality amounting to P.200 million was again recorded both in the Report on the Physical Count of Property, Plant and Equipment and books of accounts of the Municipality;

Land titles of seven recorded lots were still not yet transferred in the name of the Municipality;

The reliability of Inventory Held for Consumption accounts totaling P4.074 million as of December 31, 2018 could not be ascertained due to the inability of the Municipal officials and/or employees in-charge to conduct inventory taking and submit the Report on the Physical Count of Inventories;

Laxity in the administration of the Indang Public Market and non-enforcement of relevant rules and regulations of the Municipality’s Revised Revenue Code in its operation resulted in uncollected market stall rental fees totaling P.485 million in Calendar Year 2018; and,

Progress billing for the construction of Multi-Purpose Hall

amounting to P2.488 million were directly recorded to the specific

asset account instead of Construction-in-Progress account with

corresponding charges to accumulated depreciation of P.099

million commencing from the project’s partial completion.

Kawit

Qualified The correctness and reliability of the year-end balances of the various Property, Plant and Equipment (PPE) accounts totaling P487.921 million, could not be established ; and,


Receivables as of December 31, 2018 reflected a balance of

P2.996 million and P2.553 million, respectively, or a total of P5.549

million while the Certified List of RPT Delinquencies, prepared by

the Municipal Treasurer showed only a total of P21.671 million

inclusive of penalty of P9.905 million hence a total difference of

P16.122 million between the accounting and treasury records,

thereby casting doubt on the accuracy and reliability of the reported

balances of the RPT and SET Receivable accounts.

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Magallanes Qualified Ownership and rights of the Municipality of Magallanes over recorded Property, Plant and Equipment – Land with a total value at P12.904 million could not be fully ascertained due to absence of land title; and,

Depreciation expenses were not provided by the Municipality of

Magallanes on the recognized Property, Plant and Equipment (PPE) - Local Road Networks and PPE – Other Public Infrastructures totalling P22.563 million and P15.141 million, respectively; and,

Cash basis accounting was applied by the Municipality of

Magallanes in recognizing monthly water sales income to its

concessionaires/constituents from its Community Water System

(CWS).

Maragondon Qualified The inability of the Municipality of Maragondon to conduct complete

physical inventory taking of its Property, Plant and Equipment (PPE) and prepare the report on the Physical Count of Property, Plant and Equipment (RPCPPE) cast doubts on the existence, accuracy, reliability and validity of the recorded balances of the PPE amounting to P129.583 million as of December 31, 2018;and,

Collection efficiency on Real Property Tax (RPT) and Special

Education Tax (SET) for Calendar Year (CY) 2018 was relatively low at only 21.19 percent and 23.40 percent, respectively;

No records of Property, Plant and Equipment – Infrastructure

Assets in the books of the Municipality could be found and the cost of several major repairs relating to Buildings and Other Structures amounting to P16.044 million and P1.216 million, respectively, were charged to repairs and maintenance expenses; and,

Ownership and rights of the Municipality of Maragondon over recorded Property, Plant and Equipment – Land with a total value at P48.720 million could not be fully ascertained due to absence of land title.

Mendez Qualified Unreconciled variances between the CY 2018 Report on the

Physical Count of Property, Plant and Equipment (RCPPE) and the accounting records of Property,, Plant and Equipment (PPE) accounts;

The validity of the account balances of the Due from NGAs, Due

from LGUs, and Other Receivables amounting to P.662 million, P.690 million and P1.48, million, respectively, were unreliable due to the absence of documentary evidences and accounting records;

Reconciling items in the Bank Reconciliation Statements with total

net amount of P.138 million comprising of seven stale checks, two cancelled checks, unrecorded interest income, deposit, disbursements, credit memo, debit memos and other necessary correcting entries remained unadjusted/not taken up in the books as of December 31, 2018;

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No reconciliation of the balances of the Due from and Due to LGU accounts of the Municipality with that of the Provincial Government was undertaken;

Laxity in the administration of the Mendez Public Market and non-enforcement of relevant rules and regulations of the Mendez Market Code and the Municipality’s Revenue Code in its operation resulted in uncollected market stall rental fees, water consumption charges and permit fees totalling P.443 million as of December 31, 2018.

Naic Modified/ Qualified

Unreconciled variances between the Report on the Physical Count of Property, Plant and Equipment (RCPPE) and the accounting records of Property, Plant and Equipment (PPE) accounts;

Real Property Tax (RPT) and Special Education Tax (SET) Receivables and its reciprocal accounts Deferred RPT and SET Income of P19.191 million and P19.698 million, respectively, at year-end of CY 2018 remained doubtful as the amounts were based on the real property assessments prepared by the Municipal Assessor and not on the certified list of taxpayers with taxes due and collectible prepared by the Municipal Treasurer as required under Section 20 of the Manual on NGAS for LGUs, Volume I;

Due from and Due to LGUs accounts of the Municipality as of year-end in the amount of P3.936 million andP.241 million, respectively, did not reconcile with their respective reciprocal accounts of P3.865 million, and P.254 million in the books of the Province;

Business permit for CY 2019 was issued to a contractor, with business address in the Municipality of Naic, despite non-payment of business tax amounting to P.067 million for CY 2018 and business tax due was not recorded in the books of accounts.

Noveleta Qualified Property, Plant and Equipment (PPE) with carrying value of P79.052 million as of December 31, 2018, could not be ascertained due to inability of the Municipality to conduct a complete physical count of all PPEs, submit a properly accomplished Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and maintain PPE Ledger Cards.

Rosario Qualified Property, Plant and Equipment (PPE) with carrying value of P1.218 billion as of December 31, 2018, could not be ascertained due to discrepancy of P117.538 million between the General Ledger balance and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE), unserviceable, disposed/donated and missing PPEs of P91.464 million and lumped PPE items totaling P274.862 million which were not properly identified in the RPCPPE.

Silang

Qualified

Property, Plant and Equipment (PPE) accounts aggregating

P1.601 billion, which partake 84 percent of the Municipality’s total

assets of P1.900 billion could not be ascertained due to the

following:

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a) No physical count was conducted in Calendar Year 2018

and the corresponding Report on the Physical Count of

Property, Plant, and Equipment (RPCPPE) was not

prepared; and

b) Non-maintenance of Property, Plant and Equipment

Ledger Cards (PPELC) and Real Property Ledger Cards

(RPLC) by the Accounting Office and incomplete/un-

updated Property Cards by the General Services Office

(GSO); and,


Receivables amounting to P8.319 million and P.165 million,

respectively, were not reliable as the same differed from each other

by P8.154 million and P139.432 million from that of the List of

Delinquent Taxes submitted by the Treasurer’s Office.

Tanza Qualified Property, Plant and Equipment (PPE) with total book value of

P600.624 million excluding Construction in Progress of P35.929

million remained doubtful due to the discrepancy of P411.060

million between the Accounting and General Services Office

records and inability of the Inventory Committee to conduct

physical count of PPE; and,

Adoption of the Direct Expense Method of accounting for the

receipt and issuance of supplies and materials instead of the

Perpetual Inventory System, thus, putting in doubt the accuracy of

the `account balances of Inventories and Supplies and Materials

Expenses totaling P2.286 million and P12.679 million,

respectively, as of year-end.

Ternate Qualified Collection efficiency on Real Property Tax (RPT) and Special Education Tax (SET) for Calendar Year (CY) 2018 was relatively low at only 26.46 per cent for both accounts,

Failure to set-up the RPT and SET receivables in CY 2018 resulting in the understatement of the RPT and SET receivables together with the Deferred Income accounts by P56.818 million and increased accumulated balance of uncollected RPT and SET receivables by P2.550 million and P2.550 million, respectively at the end of the year; and,

Failure of the Municipality of Ternate to conduct physical inventory taking of its Property, Plant and Equipment (PPE) and prepare the report on the Physical Count of Property, Plant and Equipment (RPCPPE); non-maintenance of Property Cards by the General Services Office (GSO) and maintenance of incomplete and not updated Property, Plant and Equipment Ledger Cards (PPELC) by the Accounting Department cast doubts on the existence, accuracy, reliability and validity of the recorded balances of the PPE amounting to P93.374 million as of December 31, 2018; and,

Withholding taxes amounting to P4.523 million as of December 31, 2018 remained unremitted to the Bureau of Internal Revenue (BIR).

125


Laguna Qualified Cash in Bank account of P1.672 billion for Calendar Year (CY)

2018 was not fairly presented due to the presence of a stale check

amounting to P1.560 million and a difference of P.072 million

between the General Ledger (GL) and the Cashbook balances;

Physical count of seven out of 15 inventory types amounting to P188.406 million or 74 per cent of the total inventory valued at P255.178 million was not conducted due to attendance to pressing undertakings that requires immediate action by the Inventory Committee;

Long overdue loans and receivables totaling P140.762 million which have been dormant for ten years or more are presented as current assets in the financial statements; and,

Accounts Payable as of December 31, 2018 totaling P527.842 million included claims amounting to P91.217 million which have been outstanding for two years or more; and,

Buildings owned by the Province valued at P26.664 million and rented out to private entities and government agencies were recorded as Buildings instead of Investment Property – Buildings, resulting in the overstatement of the Buildings account balance and understatement of the Investment Property- Buildings each by P26.664 million;

Due from Local Government Units (LGUs) account amounting to P17.176 million is doubtful due to a net difference of P.649 million between the account balances of the Due from LGUs maintained by the Province and the account Due to LGUs recorded by the eight LGUs in the Province of Laguna; and,

Accounts Payable included amounts Due to National Government Agencies, Due to Government Owned and/or Controlled Corporations and Due to Local Government Units amounting to P.032 million, P.124 million and P8.503 million, respectively, or a total of P8.658 million, resulting in the misstatements of the affected accounts’ balances.

Cities

Biñan City

Qualified Property, Plant and Equipment (PPE) account reported at a

carrying amount of P5.567 billion as of year-end could not be

ascertained due to the difference of PPE balances between the

Accounting and Property records of P493.905 million, in all funds;

Small tangible assets totaling P15.927 million which were already

issued to end-users with serviceable lives of more than one year

and acquisition cost of less than P.010 million overstated both the

PPE and Government Equity accounts by the same amount;

Sixty-six disbursement vouchers and their supporting documents

involving a total amount of P56.137 million, covering payments

made in Calendar Year 2018 remained not submitted to the Office

126


of the Auditor as of year-end due to continued disregard of the

accounting and reporting guidelines;

Accounts Payable totaling P36.425 million remained outstanding

for more than two years;

The City did not recognize in the books accrued interest on long-

term loans payable totaling P16.299 million, thus resulting in the

understatement of Interest Expense and Interest Payable accounts

by the same amount as of year-end;

The accumulation of uncollected and unrecorded market stall rental

fees totaling P4.364 million as of December 31, 2018; and,

Cash advances totaling P.540 million remained unliquidated at

year-end.

Cabuyao City

Qualified Property, Plant and Equipment (PPE) totaling P3.075 billion (gross),

could not be ascertained due to incomplete physical count resulting

in an unreconciled balance of P1.318 billion between the

accounting records and the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE); the unserviceable

Property, Plant and Equipment of P7.557 million remained

undisposed; inclusion of semi-expendable supplies of P.461 million

in the PPE accounts; and non-provision of depreciation of the City’s

Road Networks.

Due from Other Funds and Due to Other Funds showed a

discrepancy of P41.372 million as of year-end;

Reconciling items totaling P2.022 million were not corrected and

adjusted in the book of accounts, thus rendering the validity,

accuracy and reliability of the Cash in Bank account balance stated

at P1.549 billion as of December 31, 2018, doubtful;

Granting and liquidation of cash advances were not strictly

monitored by the City, resulting in the accumulation of the

unliquidated balances in an aggregate amount of P25.253

millionas of December 31, 2018; and,

Significant information to support the balances of some accounts

presented in the financial statements were not disclosed in the

Notes to financial statements, thus casting doubt on the said

balances and depriving the users of the financial statements of

additional information value.

Calamba City

Qualified Property, Plant and Equipment (PPE) totaling P8.516 billion

appearing in the Financial Statements and Accounting records

remained not reconciled with the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) resulting in a total

variance of P3.864 billion;

127


Inventory account totaling P131.190 million as of December 31,

2018 was doubtful due to inability of the City Accounting Office

(CAO) to reconcile balances of supplies ledger cards with the stock

cards maintained by the City General Services Office (CGSO), and

inability of the CGSO to furnish the CAO with copies of the

Requisition and Issue Slip (RIS), Summary of Supplies and

Materials Issued (SSMI), and Report of the Physical Count of

Inventories (RPCI);

Due to Pag-IBIG and GSIS amounting to P.255 million and P1.209

million, respectively, pertaining to premium contributions and loan

amortizations were of doubtful validity;

Financial Liabilities – Current was overstated and Loans Payable –

Domestic was understated both by P261.837 million since the non-

current portion of long-term loan amounting to P261.837 million

was not classified as non-current liabilities;

Unexpended balance of the Local Risk Reduction and

Management Fund (LDRRMF) of P18.896 million was not

transferred to the Trust Fund books, and its details were not

properly disclosed in the Notes to Financial Statements; and

Financial statements were not supported with complete subsidiary

ledgers and financial reports of the special accounts for economic

enterprises in the General Fund.

San Pedro City Qualified Property, Plant and Equipment (PPE) balances differs between the

Accounting and Property records in the General Fund due to

inability of the City General Service Officer (GSO) to fully conduct

physical count of PPE, submit complete Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and non-

maintenance of Property, Plant and Equipment Ledger Card

(PPELC) and Property Cards (PCs);

Titles to 793 parcels of acquired land totaling P996.293 million by

the City Government of San Pedro in CY 2018 and prior years were

not yet transferred in the name of the City due to incomplete

documentary requirements of the Registry of Deeds, thus the risk

of third party claims and non-establishment of the City’s ownership

over the parcel of lands;

Thirty four (34) Unserviceable Motor Vehicles valued at P12.286

million were still not disposed of as required procedures and

documentation for property disposal have not been complied with,

thus resulting in the further deterioration and loss of economic

value and overstatement of the agency’s PPE account balance;

Cash advances (CAs) totaling P7.634 million were not liquidated

at the end of the year as some City officials and employees did not

comply with the rules and regulations on CAs, thus understated the

128


related expense accounts for the amount expended and exposed

the fund to risk of loss and misuse; and,

Purchase of supplies totaling P34.360 million was directly

recorded in the books as expense instead of inventory following the

Perpetual Inventory Method, thus the cost of unused supplies

which were not consumed at year-end were not reflected in the

financial statements, affecting the fair presentation of the inventory

and expense accounts’ balances.

Santa Rosa City

Qualified Cash in Bank-Local Currency account presented in the statement

of financial position at P3.358 billion could not be ascertained due

to a net difference of P22.246 million between the Subsidiary

Ledger (SL) and the Cashbook;

Reconciling items reflected in the Bank Reconciliation Statements

totaling P11.380 million were not booked up, thus affecting the

reliability of the Cash in Bank-Local Currency account;

Property, Plant and Equipment (PPE) accounts recorded in the

books with net book value of P6.573 billion remained doubtful due

to: (a) the variance of P1.310 billion between the records of the

Office of City Accountant (OCA) and the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) submitted by

the City General Services Office (CGSO) and (b) unaccounted

properties amounting to approximately P2.274 million or .03% of

the total PPE at the time of physical inventory;

The City Government did not comply with the reporting guidelines

on the Local Roads Asset Management System, thus desired

information on the City’s Local Road Network presented in the

financial statements at P224.684 million was not fully provided;

and,

Payment of loan amortization amounting to P3.139 million was not

booked up, thereby overstating the Cash in Bank-Local Currency

account by P3.139 million and Loans Payable-Domestic account

by P3.097 million and understating the Interest Expense by P.042

million.

Municipalities

Alaminos

Modified/ Qualified

Property, Plant and Equipment (PPE) accounts with a total net

book value of P173.442 million excluding the Construction in

Progress account, were doubtful due to total discrepancy of P4.654

million that exists between the accounting records and the Report

on the Physical Count of Property, Plant and Equipment (RPCPPE)

submitted by the General Services Officer (GSO);

129


PPE totaling P17.628 million funded out of the Trust Fund which

were already completed as of year-end were not recognized and

transferred to the General Fund, resulting in the understatement of

both the PPE and Government Equity accounts;

Unserviceable property with a total net book value of P.056

millionwhich were already disposed were still included in the book

of accounts of the Municipality, thus overstating the PPE account

by the same amount;

Breeding Stocks of P.820 million was measured at its acquisition

cost at the reporting date, instead of its fair value less cost to sell,

thus, casted doubt on the correctness, valuation and reliability of

the Biological Assets as of year-end, and,

Stale checks amounting to P.110 million remained unadjusted in the book of accounts, thus resulting in the understatement of the balances of both the Cash in Bank and Accounts Payable accounts.

Bay Qualified Property, Plant and Equipment (PPE) account, reported at a

carrying amount of P179.328 million as of year-end could not be


Accounting and Property records of P.559 million in all funds;

Small tangible assets totaling P2.738 million which were already

issued to end-users with serviceable lines of more than one year

and an acquisition cast of less than P.010 million over stated both

the PPE and Government Equity Accounts by the same amount;

and,

Non-recognition of accrued interest on long-term loans payable totaling P.861 million understated the Interest Payable accounts by the same amount as of year-end.

Calauan

Qualified Discrepancy in reporting Cash in Bank – Local Currency, Current

Account between cashbooks and general ledgers by P3.517

million and between general ledgers and bank confirmation by

P14.148 million;

Property, Plant and Equipment (PPE) account recorded at

P144.224 million as of December 31, 2019 was doubtful due to the

inclusion of unserviceable property amounting to P3.482 million;

and,

One hundred ninety-two (192) Disbursement Vouchers (DVs) and

its supporting documents totaling P1.100 million or 0.85% of the

total expenses for Calendar Year 2018 of P129.680 million

remained unsubmitted to the Office of the Auditor as of December

31, 2018.

130


Cavinti

Qualified Property, Plant and Equipment (PPE) reported at P146.877 million

could not be ascertained due to existence of P54.878 million

variance between the records of the Accounting and the Report on


Cash in Bank account balance shown in the Statement of Financial

Position at P11.358 million could not be determined due to a net

difference of P35.272 million between the General Ledger and the

Cashbook;

Purchase of supplies totalling P5.933 million was directly recorded

in the books as expense instead of inventory following the

perpetual inventory method, thus cost of unused supplies which

were not consumed at year-end were not reflected in the financial

statements affecting the fair presentation of the affected accounts

in the financial statements;

Due from and Due to Other Funds showed a difference of P3.418

million; and,

Accounts Receivable account balance of P2.164 million is doubtful

due to lack of Subsidiary Ledger.

Famy

Qualified

Cash in Bank (CIB) accounts totaling P91.314 million could not be

ascertained due to absence of Bank Reconciliation Statements

(BRS) and subsidiary ledgers of all depository accounts and the

unreconciled balances of accounting and treasury records;

Property, Plant and Equipment (PPE) accounts with a total

acquisition cost of P34.160 million, excluding construction in

progress, were doubtful due to total discrepancy of P8.362 million

that exists between the accounting records and the Report on the

Physical Count of PPE (RPCPPE) submitted by the Municipal

Treasurer;

Perpetual Inventory Method was not adopted in accounting for the

acquisition of supplies and materials in Calendar Year (CY) 2018

totaling P3.260 million, resulting in the overstatement of the

affected expense accounts and the understatement of the inventory

accounts by an amount equivalent to the supplies and materials

inventory still on hand as of year-end;

Negative balances of the five payable accounts with amount

aggregating (P2.340 million) did not conform with the Local

Government Chart of Accounts;

“Due From Other Funds” and “Due to Other Funds” showed a

discrepancy of P1.001 million as of year-end;

131


Real Property Tax (RPT) Receivables and Special Education Tax

(SET) Receivables and its contra accounts Deferred Real Property

Tax and Deferred Special Education Tax were reported at different

amounts when both receivables were computed at one percent of

the assessed value of the real property units, thus the doubtful

validity of RPT/SET Receivables and Deferred RPT/SET Income

year-end balances reported both at P.172 million and P.568

million, respectively; and,

Significant information to support the balances of some accounts

presented in the financial statements were not disclosed in the

Notes to Financial Statements, thus casting doubt on the balances

of said accounts and depriving the users of the financial statements

of additional information value.

Kalayaan

Qualified Property, Plant and Equipment (PPE) totaling P116.046 million

(net) could not be ascertained due to: (a) unreconciled PPE

balances between the Accounting and Property Records; and (b)

unrecorded four donated PPE items in the books of account of the

Municipality.

Thirty-Six parcels of land owned by the Municipality with a total fair

market value of P15.421 million were not recorded in the books of

accounts due to the inability of the Municipal Accountant to

consider the land owned by the Municipality as reported and per

records of the Municipal Assessor’s Office;

Road network system was still not disclosed in the Notes to the

Financial Statements due to the inability of the Municipal Engineer

to provide the Municipal Accountant with the complete description

and cost segregation of road network assets, thus casting doubt on

the accuracy of the recorded Road Netwrks totalling P10.005

million;

Debit or abnormal balances in Other Payables and Due to Pag-

IBIG accounts under the General Fund of the Municipality

amounting to P.091 million and P.006 million, representing the

over remittance of employees’ loan nad premium payments to

PAG-IBIG, respectively, or total of P.097 million was not adjusted

in the books of accounts as Other Receivables, thus claims of the

Municipality for the over payment were not presented as receivable

in the Financial Statements as of year-end;

Stale check amounting to P.025 million remained unadjusted as of

December 31, 2018;

Complete set of Special Accounts in the General Fund for the

Municipality’s economic enterprises and development projects

were still not prepared due to the inability of the Municipal

Accountant to maintain separate records from the special accounts,

132


thus depriving management and other users of the financial

statements of vital financial information on their operations.

Disclosure requirement for Local Disaster Risk Reduction

Management Fund (LDRRMF) which showed a balance of P7.532

million as of the end of Calendar Year 2018 was still not provided

in the Notes to Financial Statements, thereby depriving the users

of the financial statements of the information on the amount set

aside for LDRRMF, the amount utilized during the year and the

unexpended balance.

Liliw

Qualified Property, Plant and Equipment (PPE) accounts amounting to

P115.751 million remained doubtful due to the inability of the

Municipality to complete the actual physical inventory of the assets,

prepare the Report of the Physical Count of Property, Plant, and

Equipment (RPCPPE) and reconcile the property and accounting

records for lack of manpower.

“Due From Other Funds” and “Due to Other Funds” showed a

discrepancy of P8.160 million as of year-end, thus rendering the

balances of the accounts unreliable.

Real Property Tax Receivable (RPTR) and Special Education Tax

Receivable (SETR) and its contra accounts Deferred Real Property

Tax Income (DRPTI) and Deferred Special Education Tax Income

(DSETI) were reported at different amounts when both receivables

were computed at one percent of the assessed value of real

property units, thus affected the reliability of the accounts’

RPT/SET Receivables and Deferred RPT/SET Income year-end

balances reported at P11.276 million/P3.021 million and P12.404

million/P3.021 million, respectively;

Asset, liabilities and equity accounts in the amounts of P99.04,

P.748 million and P.317 million, respectively, were incorrectly

presented with negative balances due to the inability of the

Accounting Office to account pertinent financial transactions

properly, thus affected the reliability of the financial statements;

and,

Significant information to support the balance of several accounts presented in the financial statements were not disclosed in the Notes to Financial Statements, thus casting doubt on the balances of accounts and depriving the users of the financial statements of additional informative value.

Los Baños

Qualified Property, Plant and Equipment (PPE) account reported at a

carrying amount of P319.949 million as of year-end could not be


Accounting and Property records of P195.595 million in all funds

and inclusion of small tangible assets totaling P1.115 million which

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were already issued to end-users with serviceable lives of more

than one year and an acquisition cost of less than P.010 million

overstated the PPE and Government Equity accounts by the same

amount.

Stale checks totaling P1.306 million remained not adjusted as of

year-end, thus understating the Cash in Bank-Local Currency,

Current Account and Accounts Payable balances both by P1.306

million.

Luisiana Qualified Property, Plant and Equipment (PPE) accounts totaling P152.486

million could not be determined due to the inability of the Municipal

General Service Office (MGSO) to submit properly accomplished

Report on Physical Count of Property, Plant and Equipment

(RPCPPE) and maintain property records, thereby affecting the fair

presentation of the PPE accounts;

Failure to comply with the reporting guidelines on the Local Roads

Asset Management System as prescribed under COA Circular No.

2015-008, thus the desired information on the Municipality’s Local

Road Network presented in the financial statements at P14.495

million was not fully provided.

Inventory account balance of P.169 million could not be

ascertained due to: (a) non-maintenance of Stock Cards and (b)

non-submission of the Report on the Physical Count of Inventories

(RPCI), thus casting doubt on the existence and valuation of the

account.

Lumban

Qualified Difference of P43.089 million exists between the Statement of

Financial Position and the Subsidiary Ledgers of Property, Plant

and Equipment (PPE) accounts, valued in the books at P118.054

million and variance of P75.871 million exists between the

Statement of Financial Position and the Report on the Physical

Count of PPE (RPCPPE) on seven accounts due to inability to

reconcile the records of the Accounting and the General Services

Office, thus the accuracy and reliability of the accounts’ balances

remained doubtful;

Perpetual Inventory Method was not adopted in accounting for

purchases of supplies and materials totaling P4.298 million, thus

resulted in the understatement of the affected inventory accounts

by an amount equivalent to the inventory still on hand as of year-

end and physical inventory for supplies was not conducted, hence,

the required Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) was not prepared and submitted to the

Office of the Audtor.

Loan payments totaling P17.014 million which include interest

amounting to P2.871 million were directly deducted from the

134


outstanding balance of Loans Payable – Domestic account, thus,

resulted in the non-recognition of interest expense, understatement

of liability accounts and overstatement of Government Equity

account;

Subsidiary Ledgers were not maintained for various accounts with

significant balances, thus, casted doubt on the reliability of the

affected accounts as of end of the Calendar Year (CY) 2018; and,

Fourteen (14) Disbursement Vouchers (DVs) and their supporting

documents involving a total amount of P.270 million for payments

made in the Calendar Year (CY) 2018 remained unsubmitted to the

Office of the Auditor as of year-end, thus, the validity, legality and

propriety of the covered transactions could not be ascertained.

Mabitac Qualified Property, Plant and Equipment (PPE) accounts recorded in the

books with net book value of P52.283 million remained doubtful due

to the variance of P.394 million between the records of the Office

of Municipal Accountant and the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) submitted by the

Municipal General Services Office;

Perpetual Inventory Method was not adopted in accounting for the

purchases of supplies and materials totaling P2.033 million due to

non-preparation by the Supply Officer of the Reports on Supplies

and Materials Issued (RSMI) and Physical Count of Inventories

(RPCI), thus understating the inventory and overstating the

expense accounts both by an amount equivalent to the inventory

that could still be on hand as of December 31, 2018 and Supplies

Ledger Cards and Stock Cards were not maintained by the

Accounting Office and the Supply Section, respectively, thus

reconciliation of both records was not possible.

Fourteen Disbursement Vouchers (DVs) and their supporting

documents involving a total amount of P.525 million covering

payments made in Calendar Year (CY) 2018 remained not

submitted to the Office of the Auditor as of December 31, 2018,

thus validity and propriety of the covered transactions could not be

ascertained; and,

Cash Advances to Officers and Employees in the amount of P.245

million were not fully liquidated at the end of the year, resulting in

the overstatement of the Advances to Officers and Employees

account and understatement of the affected expense accounts by

an amount equivalent to the unreported disbursements.

Majayjay Qualified Property, Plant and Equipment (PPE) with acquisition cost totaling

P103.360 million is unreliable due to the unreconciled balance

between the General Ledger (GL) and Property, Plant and

Equipment Ledger Card (PPELC) amounting to P11.855 million,

thus casting doubt on the fairness of presentation of the account in

the Financial Statements;

135


Annual physical inventory of the Property, Plant and Equipment

(PPE) with a total net book value of P114.196 million was not

properly planned resulting in the non-completion of the physical

inventory, thus casting doubt on the existence and accuracy of PPE

accounts;

Cash - Local Treasury and Cash in Bank - Local Currency, Current

Account with year-end balances of P.073 million and P63.526

million, respectively, remained doubtful due to non-reconciliation

between accounting and treasury records resulting in net

discrepancies of (P10 million) and P.053 million, respectively;

Inventory amounting to P5.024 million as of December 31, 2018

could not be ascertained due to non-maintenance of Supplies

Ledger Cards and Stock Cards and non-submission of Report of

Physical Count of Inventories.

Due from Officers and Employees totaling P1.162 million was not

supported with Subsidiary Ledgers due to absence of relevant

documents and records casting doubt on the collectability of the

receivables and the reliability of the amount presented in the

Financial Statements;

Significant information to support the balance of some accounts

presented in the financial statements was not disclosed in the

Notes to Financial Statements, thus depriving the users of the

financial statements of additional relevant information on the

affected accounts; and,

Due from Other Funds of P0.00 does not reconcile with its

reciprocal account Due to Other Funds of P.028 million, casting

doubt as to the accuracy of their balances reported in the Financial

Statements as of year-end.

Nagcarlan Qualified Property, Plant and Equipment (PPE) account balance of P276.473

million as of December 31, 2018 was doubtful due to the inclusion

of unserviceable property in the amount of P5.360 million both in

the Report on the Physical Count of Property, Plant and Equipment

(RPCPPE) and the PPE account; and,

Thirty (30) parcels of land valued at P6.142 million were not

covered by Transfer Certificates of Title (TCT), thus ownership over

the said property has not been duly established, hence, casting

doubt on the reliability of the Land account as of December 31,

2018.

Paete Qualified Property, Plant and Equipment with a reported net book value

P114.196 million is unreliable due to (a) non-disposal of

unserviceable properties amounting to P.311 million; (b) PPE

totalling P.659 million was not properly classified to

136


appropriate accounts; and (c) PPE amounting to P3.237 million

was not provided with depreciation expense.

Public Infrastructure Assets of the Municipality were not all

recorded in the books due to the absence of Registry of Public

Infrastructure (RPI), thus resulting in the understatement of

Property, Plant and Equipment (PPE) and Government Equity

accounts equivalent to the unrecorded amount of the Public

Infrastructure Assets; and,



Notes to Financial Statements, thus depriving the users of financial

statements of additional information value.

Pagsanjan Qualified Discrepancy in reporting the Property, Plant and Equipment (PPE) between the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and accounting records by P88.636 million, thus, casting doubt on the proper valuation and existence of the PPE account recorded at P.404 million as of December 31, 2018.

Pakil Qualified Property, Plant and Equipment (PPE) with a net book value of

P93.373 million or 52.23 per cent of the total assets of the

Municipality was doubtful as to its existence, accuracy and validity

due to absence of Report on the Physical Count of Property, Plant

and Equipment (RPCPPE) at year-end, Property Cards of the

GSO, Property Ledger Cards in the Accounting Office;

Land Acquired in Calendar Year 2018 and prior years valued at

P17.920 million is doubtful since 52 parcels of land were not

covered with Transfer Certificate of Title in the name of the

Municipality; and,

Purchases of various supplies and materials totaling P2.400 million

were directly charged to expense accounts due to inability of the

Chief Accountant and MGSO-Designate to maintain Supplies

Ledger Cards and Stock Cards, respectively, resulting in the

understatement of the Inventory account and overstatement of the

corresponding expense accounts by an amount equivalent to the

supplies and materials still on hand or not consumed as of year-

end.

Pangil Qualified Property, Plant and Equipment accounts totaling P103.626 million

million net of Accumulated Depreciation of P32.478 million, were

doubtful due to the inability of the Inventory Committee to conduct

physical count of property of the Municipality, and prepare and

submit the Report on the Physical Count of Property, Plant and

Equipment due to manpower constraint;

137


Balance of P2.451 million of Loans Payable – Domestic account

presented as current liability in the Statement of Financial Position

(SFP) includes the amount of long-term loan of P1.405 million,

thus, resulting in the overstatement of Loans Payable – Domestic

– current and understatement of Loans Payable – Domestic – non-

current, both by P1.405 million;

Liquidated damages totaling P.275 million collected from the

contractors for the delay in the implementation of infrastructure

projects were misclassified in the books of account of the

Municipality as liability, thus overstating the Due to LGUs account

and understating the Miscellaneous Income account both by the

same amount;

Local Road Network Property Cards were not maintained by the

Municipal Treasurer, while the total road network system was still

not disclosed in the Notes to the Financial Statements due to the

inability of the Municipal Engineer to provide the Municipal

Treasurer and Municipal Accountant with the complete description

and cost segregation of road network assets, thus casting doubt on

the accuracy of the recorded Road Networks totaling P15.090

million; and,



million as of the end of Calendar Year 2018 was still not provided

in the Notes to Financial Statements, thereby depriving the users

of the financial statement of the information on the amount set

aside for LDRRMF, the amount utilized during the year and the

details of the unexpended balance.

Pila Qualified Property, Plant and Equipment (PPE) with a net book value of


Municipality was doubtful as to its existence, reliability and

correctness due to absence of Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) at year-end, non-

reconciliation of Property Cards maintained by the General Service

Officer (GSO) with the Property Ledger Cards of the Accounting

Office, and absence of Transfer Certificate of Title (TCT) in the

name of the Municipality for 21 parcels of lot;

Loans Receivable – Others and Other Receivables totaling P4.393

million as of December 31, 2018 remained outstanding for more

than 18 years due to lack of documents are doubtful and unreliable;

and,

Land acquired in Calendar Year 2018 in prior years valued at

P10.105 million in the General Fund and P.591 million in the

Special Education Fund or a total of P10.696 million consisting of

21 parcels of lot were not covered with Transfer Certificates of Title

in the name of the Municipality.

138


Rizal Qualified Property, Plant and Equipment (PPE) accounts totaling P38.329

million net of Accumulated Depreciation of P1.286 million, were

doubtful due to the following: a) Inadequacy of the accounting and

property records, and inability to reconcile both records; b) Inability

of the Inventory Committee to conduct physical count of the

properties of the Municipality and prepare and submit the Report

on the Physical Count of Property, Plant and Equipment;

Local Road Networks totaling P9.437 million were not recognized

in the Financial Statements for Calendar Year (CY) 2018 and

disclosed in the Notes to Financial Statements, due to the inability

of the Municipal Accountant to consider the cost and complete

description of road network assets provided by the Municipal

Engineer, thus understating both the Road Networks and

Government Equity accounts by the same amount and depriving

the stakeholders and the other users of the financial statements of

information and data on the local road network of the Municipality;

Accounts payable totaling P7.000 million relative to the land

purchased on installment basis charged out of the 20 per cent

development fund was not recorded in the books of account of the

Municipality, thus resulted in the understatement of the accounts

Land and Accounts Payable both by P7.000 million;

Bottom-up Budgeting projects and other projects funded by the

different National Government Agencies amounting to P53.281

million was not properly accounted for in the books of accounts,

thus understating both the PPE and Government Equity accounts

by same amount;

Land owned by the Municipality with a total fair market value of

P.918 million was not recorded in the books of account, thus,

resulting in the understatement of the year-end balance of both

Land and Government Equity accounts by the same amount;

Property, Plant and Equipment (PPE) totaling P13.099 million were

not provided with depreciation due to absence of relevant records

to determine its date or period of acquisition, thus overstating the

PPE and Government Equity as of December 31, 2018 by an

amount equivalent to the unrecorded depreciation expenses;and,



million as of the end of CY 2018 was still not provided in the Notes

to Financial Statements, thereby depriving the users of the financial

statements of the information on the amount set aside for

LDRRMF, the amount utilized during the year and the details of the

unexpended balance.

139


Santa Cruz Qualified Failure to comply with the reporting guidelines on the Local Roads

Asset Management System, thus the desired information on the

Municipality’s Local Road Network presented in the financial

statements at P27.952 million was not fully provided;

Real Property Tax Receivables and Special Education Tax

Receivables were understated by P18.528 million and P17.029


Long outstanding receivables totaling P2.482 million which have

been dormant for more than 20 years were still reflected in the

books of accounts, thus raising doubts as to their collectability;

Inventory account balance of P1.004 million could not be

ascertained due to (a) non-maintenance of Stock Cards and (b)

non-submission of the Report on the Physical Count of Inventories

(RPCI), thus casting doubt on the existence and valuation of the

account; and,

Due from Local Government Units (LGUs) is doubtful due to a net

difference of P.506 million between the account Due from LGUs

maintained by the Municipality and the account Due to LGUs

recorded by Provincial Government of Laguna.

Santa Maria Qualified Property, Plant and Equipment (PPE) with a net book value of


ascertained due to non-maintenance of Property, Plant and

Equipment Ledger Cards by the Accounting Office and Property

Cards by the Municipal General Services Office and discrepancy in

reporting PPE balances between the accounting records and the

Report on Physical Count of Property, Plant and Equipment

(RPCPPE) by P133.805 million and were not provided with

depreciation expense, thus resulting in the overstatement of the

PPE and understatement of the Depreciation Expense and

Accumulated Depreciation by an amount equivalent to the

unrecorded depreciation expenses;

Discrepancy of P5.820 million in reporting Cash-in-Bank - Local

Currency, Current Account (LCCA) balance between the book and

bank records, resulting from non-preparation of monthly Bank

Reconciliation Statements, thus affecting the reliability of the year-

end balance of the Cash in Bank – LCAA of P46.710 million;

Cash-Local Treasury and Cash in Bank – Local Currency, Current

Account (LCCA) with a year-end balances of P.304 million and

P46.710 million, respectively, remained doubtful due to non-

reconciliation between accounting and treasury records, resulting

in net discrepancies of P.306 million and P9.509 million,

respectively; and,

140




Notes to Financial Statements, contrary to Paragraphs 127 (c) and

129 of Philippine Public Sector Accounting Standards (PPSAS) 1,

thus depriving the users of the financial statements of additional

relevant information on the affected accounts.

Siniloan Qualified Cash Local Treasury and Cash in Bank-Local Currency, Current

Account with year-end balances of P1.427 million and P13.492

million, respectively, remained doubtful due to non-reconciliation

between accounting and treasury records, resulting in net

discrepancies of P1.109 million and P17.055 million, respectively;


million remained doubtful due to the following deficiencies: (a)

variance of P45.677 million between the records of the Office of the

Municipal Accountant and the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) which resulted from the

inability of the Inventory Team to conduct a complete physical

count of PPE and the non-maintenance of Property, Plant and

Equipment Ledger Cards (PPELCs) and Property Cards (PCs);

and (b) PPE with a total cost of P39.737 million were not provided

with depreciation expenses, thus resulted in the understatement of

expenses and overstatement of PPE by an amount equivalent to

the unrecorded depreciation expenses;

Failure to comply with the reporting guidelines or required

disclosures on the Local Roads Asset Management System due to

inability of the Municipal Engineer to provide the Municipal

Accountant with the complete description and cost segregation of

road network assets, thus desired information on the Municipality’s

Local Road Network presented in the financial statements at

P25.000 million was not fully provided;

Perpetual Inventory Method was not adopted in accounting for

receipts and issuances of supplies and materials totaling P7.352

million, thus understating the inventory and overstating the

expense accounts both by an amount equivalent to inventory still

on hand as of December 31, 2018. Moreover, the accuracy and

reliability of the amount presented as Inventory Held for

Consumption amounting P.692 million could not be ascertained

due to the absence of Supplies Ledger Cards (SLC) and Stock

Cards (SC);

Discrepancy in reporting the Loans Payable-Domestic account and

the Interest Expense between the accounting records and

amortization schedule of the Land Bank of the Philippines (LBP) by

P.498 million and P2.395 million, respectively, which resulted in the

overstatement of the Loans Payable-Domestic account and

understatement of the Interest Expense account equivalent to the

amount of the noted variance, thus the doubtful reliability of the

141


accounts Loans Payable-Domestic and Interest Expense reported

at P40.798 millionand P0.00, respectively, as of year-end;



Notes to Financial Statements, thus depriving the users of financial

statements of additional information value;

Discrepancy of P1.439 million between the reciprocal accounts

Due from Other Funds and Due to Other Funds, and the necessary

schedules and disclosures in the Notes to Financial Statements

were not provided, thus the doubtful reliability and accuracy of the

accounts; and,

One hundred eighty seven (187) disbursement vouchers (DV) paid

in Calendar Year (CY) 2018 totaling P16.782 million were not yet

submitted to the Audit Team as of year-end, thus resulted in the

delayed review and verification on the propriety and validity of the

covered transactions.

Victoria Qualified Property, Plant and Equipment (PPE) with a net book value of


Municipality was doubtful as to its existence, accuracy and validity

due to absence of Report on the Physical Count of Property, Plant

and Equipment (RPCPPE) at year-end and non-reconciliation of

Property Cards maintained by the General Services Office with the

Property Ledger Cards of the Accounting Office;

Inventory account totaling P1.133 million as of December 31, 2018

was doubtful as to the existence and accuracy due to non-

maintenance of Supplies Stock Cards and non-submission of

Report on Physical Count of Inventories (RPCI) from the General

Services Officer (GSO) – Designate; and,

Collectability of the accounts Loans Receivable – Others, Due from NGAs and Other Receivables totaling P.414 million as of December 31, 2018 which remained outstanding for more than three to 25 years are doubtful and unreliable.

Quezon Qualified Cash in Bank – Local Currency, Current Account (CIB – LCCA) as

of December 31, 2018 totaling P1.968 billion was unreliable due to

the presence of (a) long outstanding reconciling items; (b) stale

checks totaling P.758 million; and (c) non-existent deposit account

with the Philippine National Bank (PNB) totaling P.324 million;

Cash Advances totaling P8.116 million were not liquidated as of

December 31, 2018, P1.683 million or 21% of which pertains to

unliquidated cash advances which have been outstanding for one

to 22 years due to non-settlement by the Accountable Officers, who

were either retired, resigned or deceased;

142


Due from Other Funds and Due to Other Funds under the General

Fund, Special Education Fund and Trust Fund, showed a

difference of P57.816 million due to erroneous recording of various

transactions;

Agricultural and Marine Supplies for Distribution account balance

of P78.075 million as of December 31, 2018 includes inventories

totaling P12.202 million which have been outstanding in the books

for two to three years due to the failure of the accountable persons

to submit to the Provincial Accounting Office the List of Recipients

(LOR) including the duly signed Certificate of Acceptance;


billion per Accounting records was not reconciled with the

Cumulative Annual Report of Property, Plant and Equipment of the

General Services Office (GSO) amounting to P4.655 billion,

showing a difference of P2.139 billion due to non-completion of

physical count and non-reconciliation of records by the Accounting

and GSO, thus rendering the accounts’ balances unreliable and not

fairly presented;

Breeding Stocks account balance amounting to P6.976 million is

doubtful and unreliable due to the presence of dormant balances

totaling P5.962 million which have been outstanding for six to 10

years and was not reconciled with the records of the General

Services Office amounting to P.480 million showing a difference of

P6.497 million;

Construction in Progress (CIP) - Building and Other Structures

account as of December 31, 2018 totaling P127.084 million of the

General Fund could not be relied upon due to the presence of non-

moving balances totaling P16.247 million which have been

dormant for seven to 13 years;

Due to Officers and Employees account as of December 31, 2018

under the General Fund amounting to P52.428 million is unreliable

and not fairly presented in the Financial Statements due to the

inclusion of negative balances totaling P.467 million; and,

Due to GSIS account balance totaling P48.142 million as of

December 31, 2018 are doubtful due to significant amount of

unreconciled balances amounting to P18.428 million and improper

posting resulted in negative balances amounting to P1.539 million.

Cities

Lucena City

Qualified

Other Receivables totaling P2.381 million remained in the books of

accounts for more than 15 years and were not requested for write-

off, thus, rendering the account balance unreliable and affecting its

fair presentation in the financial statements.

143


Guaranty/Security Deposits Payable totaling P3.293 million which

have been outstanding for more than two years, were not reverted

to the Unappropriated Surplus of the General Fund (GF);

Excess collections from the sale of bidding documents for CY 2018

amounting to P.151 million remained in the Trust Fund (TF) books,

thus, overstating the Trust Liabilities account and understating the

affected income account by the same amount;

Payables totaling P2.653 million as of December 31, 2018, which

were not supported with complete documentation, were recognized

in the books of accounts of the City and had been outstanding for

more than two years; and,

Stale checks totaling P.099 million remained outstanding in the

Bank Reconciliation Statements of the City at year-end, thus,

resulting in understatement of the Cash in Bank account and

overstatement of the respective expenses account by the same

amount.

Tayabas City Qualified Property, Plant and Equipment (PPE) account balances with a

gross amount of P223.542 million as of December 31, 2018

(excluding Land, Land Improvements, Infrastructure Assets,

Buildings and Other Structures and Construction in Progress) could

not be ascertained due to the non-reconciliation of the Report on

the Physical Count of PPE (RPCPPE) and records of the

Accounting Office;

Inventory account balance presented in the Financial Statements

totaling P10.592 million (excluding Accountable Forms, Plates and

Stickers) is not reliable as to existence and valuation due to non-

submission of the Report of the Physical Count of Inventories

(RPCI) since physical count was not conducted by the City General

Services Officer (CGSO), non-maintenance of supplies ledger

cards by the City Accountant;

Real Property Tax/Special Education Tax (RPT/SET) Receivables

and Deferred RPT/SET Income reciprocal accounts reflect

unreconciled balances with a total discrepancy of P4.962 million,

due to recording to Deferred RPT/SET Income of collections made

in advance for Real Property and Special Education Taxes,

overstating Deferred RPT/SET Income and understating Other

Deferred Income by the same amount;

Unserviceable properties with a total book value of P2.308 million

were not disposed; and,

Only P.627 million of the P1.848 million balance of the Accounts

Payable in Calendar Year (CY) 2017 which have been outstanding

for more than two years were reverted to the Unappropriated

Surplus of the General Fund.

144


Municipalities

Agdangan Qualified Five parcels of land recorded in the books at P1.180 million, one titled in the name of a private person, were not supported with Transfer Certificate of Title (TCT) in the name of the Municipality due to lack of supporting documents to facilitate the titling, thus rendering the valuation and ownership doubtful;

Biological Assets of P.925 million is unreliable as to valuation and existence because the adjustments were not made for the sale and death of the dispersed animals due to lack of supporting documents;

Accounts Payable of P1.004 million includes prior years’ obligations of P.900 million without supporting documents while payables of P.031 million which have been outstanding for several years were not reverted to the Unappropriated Surplus of the General Fund due to non-observance of the existing rules and regulation; and,

Dormant receivables totaling P.398 million are still recorded in the books due to lack of documents to support the write-off of the accounts, thus the balance of receivables in the financial statements is overstated by the same amount.

Alabat Qualified Property, Plant and Equipment account excluding Land and Construction in Progress amounting to P44.852 million is unreliable due to (a) submission of an incomplete Report on Physical Count of Property, Plant and Equipment not presented per type; (b) non-reconciliation of the property cards and ledger cards; (c) non-recognition of depreciation for various infrastructure assets and office equipment; and, (d) misclassification of a rescue vehicle; and,

Confidential fund amounting to P.025 million was not liquidated as of year-end due to non-submission of the liquidation report to the Intelligence and Confidential Fund Audit Unit of the Commission on Audit within the prescribed period and was recorded under Advances for Officers and Employees account instead of Advances to Special Disbursing Officer account due to misclassification of the said cash advance.

Atimonan Qualified Property, Plant and Equipment (PPE) accounts per financial statements and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) have a net discrepancy of P78.299 million due to submission of an incomplete RPCPPE and non-reconciliation of the property cards and ledger cards;

Land account of P16.092 million could not be ascertained due to: (a) the inclusion of an amount worth P1.702 million without details/breakdown in the General and Special Education Funds; (b) unrecorded parcels of land owned and titled under the name of the Municipality; (c) lots with tax declarations named under the Municipality but were not supported with certificate of titles which are subject to verification of ownership; and, (d) four lots owned by the Municipality are still untitled under;

145


Due from Other Funds and Due to Other Funds accounts are not reconciled due to non-recording of the corollary entry in the Trust Fund pertaining to the constructive transfer of unspent Disaster Risk Reduction and Management Fund (DRRMF) of the Municipality for the current year amounting to P4.880 million;

Computer software for the Accounting Information System of the Municipality costing P1.057 million was not provided with amortization due to lack of information regarding the estimated useful life of the said asset;

Work/Zoo Animals and Breeding Stocks accounts amounting to P.250 million and P.090 million, respectively, are unreliable due to non-reconciliation of the ledger cards and property cards and non-submission of status report of the said animals as of year-end; and,

Bail bonds payable amounting to P.170 million were still not supported with details/breakdown as the Municipal Accountant is still in the process of retrieving its supporting documents, thus, validity and accuracy of the account cannot be relied upon.

Buenavista Qualified Property, Plant and Equipment (PPE) account in the Financial Statements totaling P193.165 million is not reliable as to existence and valuation due to non-reconciliation of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and records of the Accounting Office;

Receivables totaling P.526 million is doubtful due to the lapse of time where no collection letters were sent to various debtors;

Due from Officers and Employees totaling P.149 million representing balances of cash advances granted to various employees were not collected/refunded within the prescribed period; .

Guaranty/Security Deposits Payable as of December 31, 2018 included claims amounting to P1.348 million which have been outstanding for more than two years or more due to failure of the claimants to demand payment, and these were not reverted to the Unappropriated Surplus of the General Fund.

Burdeos Management Letter Due to non-submission of accounts and financial reports.

Calauag Unqualified

Candelaria Qualified Road Networks account totaling P49.403 million could not be

ascertained due to non-compliance with the transition on the

phased recognition of the Local Road Network in the books of

accounts which requires 75% compliance at the end of CY 2018

contrary to Item IX of Commission on Audit (COA) Circular No.

2015-008, thus resulting in the understatement of road network

account 3ts by undetermined amount and affecting its fair

presentation in the financial statements;

146


Due from Other Funds of P21.297 million and Due to Other Funds

of P31.145 million are doubtful due to unreconciled balances of

P9.848 million and were not provided with complete details;

Real Property Tax and Special Education Tax (RPT/SET)

Receivable totaling P18.638 are doubtful due to unreconciled

discrepancies of P2.979 million against the Municipal Treasurer’s

uncollected amounts of P21.617 million;

Payment of P16 million for the purchase of parcel of land from

QUEDANCOR was doubtful because it was not supported with

complete documentation as required under Section 4 (6) of PD No.

1445 and COA Circular No. 2012-001 and the land was not

supported with Certificate of Title in the name of the Municipality;

Receivables account balances totaling P.524 million as of

December 31, 2018 are dormant and were not requested for write-

off; and,

Trust Liabilities - Disaster Risk Reduction Management Fund

(DRRMF) account of P33.113 million is unreliable due to

unreconciled difference of P13.674 million between Local Disaster

Risk Reduction Management Fund (LDRRMF) Utilization Report

and the subsidiary ledgers showing the transfers of unutilized

LDRRMF to the special trust fund and details and amounts of the

unexpended balance were not disclosed in the Notes to Financial

Statements.

Catanauan Qualified Thirteen lots titled in the name of the Municipality were not recorded in the books;

Property, Plant and Equipment (PPE) with a net book value of P304.984 million could not be ascertained due to non-completion of the physical inventory during the year as well as non-preparation and non-maintenance of property cards and subsidiary ledgers for each category of PPE; and,

The valuation and existence of the inventory account balances as of year-end totaling P1.717 million could not be ascertained due to non-submission of the Report of the Physical Count of Inventories (RPCI) since physical count was not conducted by the General Services Officer (GSO) as well as non-maintenance of supplies ledger cards by the Accounting Office.

Dolores Qualified Property, Plant and Equipment (PPE) accounts totaling P78.842 million, net of depreciation, could not be ascertained due to (a) non-conduct of physical count of PPE hence Report on Physical Count of Property, Plant and Equipment (RPCPPE) was not prepared and submitted; (b) unaccounted properties totaling P11.684 million; and, (c) discrepancies in the amounts reflected in the financial statements and the Schedule of Depreciation;

Land account recorded in the books of accounts of the Municipality amounting P3.056 million could not be ascertained and 17 of 29 parcels of land owned by the Municipality were still untitled;

147


Failure to comply with the transitory provision on the phased recognition of the Local Road Networks in the books of accounts which requires 75% compliance at the end of the Calendar Year (CY) 2018;

Other Receivables and Due from Officers and Employees totaling P.214 million and P.003 million, respectively, remained in the books of accounts for more than four to 21 years and were not requested for write-off;

Liquidation reports of cash advances for Intelligence Fund from CYs 2010-2015 of former Municipal Mayor totaling P.130 million were not submitted to the Intelligence and Confidential Fund Audit Unit (ICFAU) of the Commission on Audit;

Payables totaling P.643 million which have been outstanding in the books of accounts for more than two to 12 years were not reverted to the Unappropriated Surplus of the General Fund (GF); and,

Guaranty/Security Deposits Payable totaling P.037 million which have been outstanding for more than two years were not reverted to the Unappropriated Surplus of the General Fund (GF).

General Luna Qualified Property, Plant and Equipment (PPE) accounts with a net book

value totaling P32.284 million could not be ascertained due to the

failure of the Inventory Committee to complete the physical

inventory during the year as well as to prepare and maintain

property cards and subsidiary ledgers for each category of PPE;

Five parcels of land recorded in the books at P3.091 million were

not supported with Transfer Certificate of Title in the name of the

Municipality;

Inventory account with zero balance as of year-end is doubtful due

to non-submission of the Report on the Physical Count of

Inventories (RPCI) and non-maintenance of supplies ledger cards

by the Accounting Office; and,

Real Property Tax (RPT) delinquencies were accumulated at a

total amount of P8.243 million at year-end, due to lack of full

enforcement of statutory remedies for the collection of delinquent

accounts by the Municipal Treasurer’s Office.

General Nakar Qualified Property, Plant and Equipment (PPE) accounts in the Financial

Statements totaling P267.875 million (excluding Land, Buildings,

Public Infrastructures and Construction in Progress) as of year-end

are doubtful due to non-completion of the reconciliation of the


(RPCPPE) and records of the Accounting Office, thus showing a

material variance of P52.986 million;

148


Land account valued at P32.128 million is doubtful due to inclusion

of 11 parcels of land valued at P2.262 million that were not

supported with Transfer Certificate of Title duly issued by the

Registry of Deeds in the name of the Municipality;

Inventory account balances as of year-end totaling P7.746 million

are doubtful due to non-reconciliation of the Report on the Physical

Count of Inventory (RPCI) and records of the Accounting Office,

thus showing a material variance of P7.694 million;

Receivables of P5.259 million remain uncollected for more than 11

years of which the total amount of P1.550 million was not supported

with documentation and schedule of debtors;


of P4.177 million are doubtful;

Due to GSIS, Pag-IBIG, and BIR accounts representing

contributions withheld from its officials/employees, suppliers and

contractors amounting to P.485 million, P.315 million, and P2.486

million, respectively, as of December 31, 2018 are doubtful due to

unreconciled/unremitted prior months contributions;

Advances to Special Disbursing Officer and Advances to Officers

and Employees accounts amounting to P.154 million and P.109

million, respectively, remain unliquidated at year-end; and,

Abnormal balances in the Cash Local Treasury, Due to GOCCs

and Due to PhilHealth accounts of negative P.109 million, P.001

million and P.002 million, or a total of P.112 million, were due to the

unrecorded collections, payroll in trust fund and over-remittance to

PhilHealth brought about by the difference between manual

computation during payroll and computation in PhilHealth

Electronic Premium Remittance System for every remittance,

respectively.

Guinayangan Qualified Property, Plant and Equipment (PPE) accounts with total book

value of P169.691 million as of year-end are unreliable due to: a)

incomplete conduct of physical count; b) unaccounted/unidentified

PPE of General Fund and Special Education Fund (SEF) totaling

P12.092 million; c) unrecorded PPE of SEF and TF totaling P.262

million; and, d) non-maintenance of complete and updated

Property Card and Property Acknowledgement Receipt;

Cash in Bank-Local Currency, Current Account account of

P144.664 million is unreliable due to various unadjusted reconciling

items shown in the Bank Reconciliation Statements as of

December 31, 2018 totaling P6.661 million;

149



Receivables totaling P55.987 million are unreliable because: a) no

set up for RPT and SET Receivables for CYs 2017 and 2018; b)

the List of Real Property Delinquent Taxpayers from the Municipal

Treasurer’s Office (MTO) shows a total amount of P42.176 million

and it includes the collectibles for CY 2001 and below; c) non-

maintenance of subsidiary ledger for each taxpayer by the

Accounting Office;

Land account of P9.470 million is unreliable in the absence of

documents as basis for the valuation of the 15

purchased/donated/possessed/reclaimed parcels of land, and five

of which were still not titled to the Municipality.

Drugs and Medicines for Distribution and Agricultural Produce for

Distribution of P.700 million and P.004 million, respectively, are

unreliable because they have no corresponding Report of the

Physical Count of Inventories;

Breeding Stocks account amounting to P.605 million as of year-end

is unreliable due to lack of supporting documents;

Payables for various expenses totaling P.334 million were

erroneously recorded in the Advances to Operating Expenses and

Advances to Payroll accounts, thereby resulted in the

overstatement of said accounts and understatement of relative

expenses.;

Cash advances were not liquidated within the prescribed period,

thus resulted in unliquidated amount of P.510 million as of

December 31, 2018 and liquidation reports and supporting

documents for advances for payroll and operating expenses

totaling P1.641 million were not submitted to the Audit Team;

Insurance and improvement expenses relative to economic

enterprises totaling P.452 million were charged to the GF;

Construction in Progress – Infrastructure Assets, Due to NGAs,

Due to Other Funds and Guaranty/Security Deposits Payable in the

books of Philippine Rural Development Project (PRDP)-Intensified

Building-up of Infrastructure and Logistics for Development

(IBUILD) under the Trust Fund are understated by P1.644 million,

P0.01, P1.467 million and P.177 million, respectively, due to

erroneous recording of expenses for honorarium, travelling and

cost of checkbook as part of project cost; non-inclusion of interest

expenses and gross receipt taxes on loans as project cost; and

various erroneous adjustments; and,

Fund transfers made by the Municipality to the Capuluan Central

Fishermen/Farmers Association for the implementation of the

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project under PRDP-Investment in Rural Enterprises and

Agriculture and Fisheries Productivity (IREAP) totaling P.940

million were debited to the Due to NGAs and Due to Other Funds

accounts instead of Due from Non-Government

Organizations/People's Organizations account, and funds received

from the General Fund as LGU Equity amounting to P.030 million

was credited to the Due to NGAs account instead of Due to Other

Funds, hence resulted in the understatement of Due to NGAs, Due

to Other Funds and Due from Non-Government

Organizations/People's Organizations account by P.281 million,

P.108 million and P.389 million, respectively.

Gumaca Qualified Property, Plant and Equipment (PPE) account totaling P307.002

million except Land is unreliable due to non-submission of a

complete Physical Count of Property, Plant and Equipment

(RPCPPE);

Purchases of accountable forms, animal/zoological supplies, drugs

and medicines, medical and laboratory supplies, agricultural

supplies, and other supplies of P3.826 million were directly

recorded in the books as outright expense;

Accounts Payable of P.357 million which have been outstanding

for two years or more, were still not reverted to the Unappropriated

Surplus of the General Fund; and,

Guaranty/Security Deposits Payable cannot be relied upon due to the total amount of P.475 million which have been outstanding for two years or more were not reverted to the Unappropriated Surplus of the General Fund.

Infanta Qualified Property, Plant and Equipment (PPE) accounts in the Financial



are doubtful due to non-completion of the reconciliation of the


(RPCPPE) and records of the Accounting Office, thus showing a

material variance of P34.874 million;

Land account valued at P90.893 million is doubtful due to inclusion

of four parcels of land valued at P5.925 million that were not

supported with Transfer Certificate of Title duly issued by the

Registry of Deeds in the name of the Municipality;


of P4.602 million are doubtful due to unreconciled balance of

P3.272 million;

Failure to setup the SET Receivable at the beginning of the year

due to non-submission of the certified list of taxpayers by the

Municipal Treasurer;

151


Inventory account balances as of year-end totaling P1.316 million

could not be ascertained due to non-completion of the Report of

Physical Count of Inventories (RPCI) and purchases of medicine,

medical, dental and laboratory supplies were recorded as an

outright expense;

Advances for Payroll and Advances to Officers and Employees

accounts amounting to P.803 million and P.010 million,

respectively, remain unliquidated at year-end; and,

Due to GSIS, PhilHealth, Pag-IBIG, and BIR accounts representing

contributions withheld from its employees, suppliers and

contractors amounting to P.979 million, P.065 million, P.293 million

811.22 and P1.160 million, respectively, as of December 31, 2018

are doubtful due to unreconciled/unremitted prior months

contributions.

Jomalig Management Letter

Due to non-submission of accounts and financial reports.

Lopez Qualified Property, Plant and Equipment (PPE) accounts with total book

value of P295.778 million as of year-end are unreliable due to: a)

incomplete conduct of physical count; b) unaccounted/unidentified

PPE of General Fund (GF) and Special Education Fund totaling

P5.452 million; and c) non-maintenance of complete and updated

Property Cards and Property Acknowledgement Receipt;


Receivables totaling P90.129 million are unreliable;

Inventories totaling P4.823 million and corresponding expenses

accounts of P3.707 million are unreliable;

Land account of P9.603 million as of December 31, 2018 is

unreliable due to the recording of 13 parcels of land at market

value instead of at their purchase cost or fair value for donation and

non-recording of one parcel of titled land; and,

Improvements and insurance of Public Market totalling P3.123 million were charged to the GF due to the absence of appropriations in Lopez Municipal Economic Enterprises Unit (LMEEU), hence resulted in the understatement of operating loss and operating income of LMEEU and GF, respectively, both byP3.123 million.

Lucban Qualified Land account recorded in the books of accounts at P6.312 million

includes 17 parcels of land totaling P2.191 million that were not

supported with Transfer Certificate of Title in the name of the

Municipality, due to incomplete documents necessary for the titling

and special patent issuance;

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Property, Plant and Equipment (PPE) account in the Financial

Statements totaling P135.635 million is not reliable as to existence

and valuation due to the non-completion of the reconciliation of the


(RPCPPE) and records of the Accounting Office; and,

Fifteen (15) motor vehicles and four heavy equipment acquired

through purchase worth P4.265 million and there were those

received as donations which were not recorded in the books of

accounts as of year-end due to incomplete documents and

absence of fair values, resulting in the understatement of the Motor

Vehicles and Construction and Heavy Equipment accounts and 19

motor vehicles worth P8.428 million were not registered in the

name of the Municipality.

Macalelon Unqualified

Mauban Qualified Property, Plant and Equipment (PPE) account in the Financial

Statements totaling P768.845 million is not reliable as to existence

and valuation due to: a) non-reconciliation of the Report on the

Physical Count of Property, Plant and Equipment (RPCPPE) and

records of the Accounting Office with a discrepancy of P10.577

million representing items in the Construction and Heavy

Equipment account which were dropped from the books of

accounts because of disposal and b) inclusion of PPE of P1.278

million in both accounting and property records which were already

disposed;

Land account recorded in the books of General Fund at P69.220

million has an unaccounted balance of P29.630 million;

Land account in the books of accounts at P88.690 million includes

22 parcels of land valued at P14.156 million were without Transfer

Certificate of Title (TCT) in the name of the Munucipality;

Cash Advances totaling P.942 million which include the balance of

P.090 million for intelligence fund remained unliquidated as at year-

end; and,

Loans Receivables - Others from various debtors totaling P14.054

million remained uncollected for several years due to: a) lack of

efforts to enforce the repayment scheme and to monitor the

status/payment of the project; and, b) failure to adopt efficient and

aggressive collection strategies thereby exposing the livelihood

projects/programs to sustainability risk and may further result in the

loss of government funds.

Mulanay Unqualified

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Padre Burgos Qualified Report on the Physical Count of Property, Plant and Equipment

(RPCPPE) was not submitted to the Audit Team and the Property

Cards for Property, Plant and Equipment (PPE) were not

maintained by the Municipal Treasurer’s Office (MTO), due to lack

of manpower and time constraint thus, the valuation and existence

of the properties could not be ascertained and rendered the PPE

account balance of P36.992 million in the financial statements

unreliable;

Fully-depreciated and unserviceable properties with residual value

totaling P.318 million were not disposed;

Fifteen (15) parcels of land recorded in the books at P2.916 million

are not supported with Transfer Certificate of Title, due to lack of

funds for titling and pending verification of land classification and

status with the other government agencies; and,

Payable accounts totaling P.129 million which have been

outstanding for ten years were not reverted to the Unappropriated

Surplus of the General Fund because the supporting documents

were no longer available.

Pagbilao Qualified Land account recorded in the books of accounts at P19.233 million

includes five parcels of land valued at P9.923 million that were not

supported with Transfer Certificate of Title in the name of the

Municipality, due to lack of documents to support the titling;

Loans Receivables - Others from various debtors totaling P.341

million remained uncollected for more than 10 years;

Other Receivables account balance of P.066 million in the Trust

Fund representing KKK Project remained outstanding for a period

ranging from 33 to 36 years and the collectability of the total amount

of P.044 million is nil because the borrowers/proponents are

already dead, thus resulting to loss of government funds contrary

to Section 2 of PD No. 1445.

Guaranty/Security Deposits Payable totaling P.097 million which

have been outstanding for two years or more were still not reverted

to the Unappropriated Surplus of the General Fund; and,

Failure to comply with the transitory provision on the phased

recognition of the Local Road Networks in the books of accounts

which requires 75% compliance at the end of CY 2018.

Panukulan Qualified Property, Plant and Equipment (PPE) accounts in the Financial



are doubtful due to non-reconciliation of the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and records of

the Accounting Office brought about by workload and lack of

154


personnel, thus showing a material variance of P26.767 million

which may include unserviceable properties;

Land account valued at P6.403 million is doubtful due to lack of

Transfer Certificate of Title duly issued by the Registry of Deeds

brought about by the lack of coordination among those responsible

for the titling of the parcels of land, and only P.601 million was with

appropriate subsidiary ledger;

Inventory account balances as of year-end totaling P.252 million

are doubtful due to non-recognition of donated drugs and

medicines from the Department of Health (DOH), thus resulting to

unrecorded inventory of P.018 million and cast doubt on the

reliability of accounts as of year-end;

Unaccounted balance of 93% or P.496 million was included in the

Other Payable account because the Municipal Accounting

personnel was not able to locate records/files to support the claim,

hence affecting the reliability of balance of the account of P536

million as of December 31, 2018.

Patnanungan Disclaimer Balance Sheet accounts of the Municipality as of December 31, 2018 remain unreliable because the Municipal Treasurer was unable to submit accounts, reports and accounting records prior to August 2004;

Non-rendition of the records and accountabilities resulted in the unreliability of Receivables (Due from Officers and Employees;

Property, Plant and Equipment (PPE) presented in the Financial Statements totaling P9.043 million (excluding Land, Infrastructure Assets, MDRRMC Building, Senior Citizen Building, Construction and Heavy Equipment and Construction in Progress) is not reliable as to existence and valuation due to the non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and non-maintenance of property cards and subsidiary ledgers in the Accounting Office;

Supplies and Material Expenses reported in the Financial Statements totaling P3.234 million could not be ascertained due to non-maintenance of Supplies Ledger Cards (SLC) and stock cards and non-submission of Summary of Supplies and Materials Issued (SSMI);

Cash advances totaling P2.667 million remain unliquidated as of December 31, 2018 which includes long outstanding cash advances, in violation of COA Circular No. 97-002, due to granting of additional cash advances even though previous cash advances have not been liquidated;

Unable to set up the Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable at the beginning of the year, due to non-submission of the certified list of taxpayers by the

155


relieved Municipal Treasurer, hence the RPT and SET Receivables accounts totaling P14.057 million as of December 31, 2018 are unreliable.

Unable to prepare the necessary adjusting entry on the difference in the amount of P6.972 million between the Due from Other Funds of P4.469 million and its reciprocal account Due to Other Funds of P11.441 million as of year-end, due to the non-verification of the cause/s in the unreconciled balances;

Unaccounted balance of P.230 million recorded under Due to NGAs account which have been outstanding for more than two years were not reverted to the Unappropriated Surplus of the General Funds; and,

Receivables of P.147 million which were not supported with details and documentation remain in the books of accounts as of December 31, 2018 and were not requested for write-off.

Perez Qualified Property, Plant and Equipment (PPE) account excluding Land and

Construction in Progress amounting to P89.538 million is unreliable

due to some PPE items without value in the Report on Physical

Count of Property, Plant and Equipment (RPCPPE) and the

submission of the said Report not presented per type, hence the

accuracy and valuation of the said assets could not be ascertained;

Amounts due to the Bureau of Internal Revenue and Philippine

Health Insurance Corporation amounting to P.042 million and

P.005 million, respectively, remain unremitted as of December 31,

2018 due to the inability of the Municipal Accountant to provide its

details/breakdown.

Pitogo Qualified Report on the Physical Count of Property, Plant and Equipment

(RPCPPE) was not submitted, PPE accounts totaling P14.078

million were not provided with depreciation and the property ledger

cards/property cards are not maintained due to non-conduct of

physical inventory, lack of manpower and unavailability of relevant

records/documents, thus the year-end carrying balance of PPE

accounts totaling P49.302 million is unreliable as to valuation and

existence.

Bank reconciliation statement for the closed Special Deposit

Account (SDA) with a book balance of P.896 million was not made

because the bank statement was not requested by the Municipal

Accountant when it was not furnished by the Ban;

Dormant receivables totaling P.914 million was not written-off due

to non-compliance with the guidelines and procedures on the write-

off of dormant receivable account;

Receivables from various beneficiaries/borrowers of the livelihood

project of the Municipality totaling P2.627 million remain

uncollected for a period of five to 10 years, due to lack of collection

156


strategies and the balance of the receivables per book and per

record of the Municipal Treasurer’s Office (MTO) disclosed a

discrepancy of P.345 million due to non-reconciliation of their

records regularly, thus the reported receivables in the financial

statements is unreliable;

Fully-depreciated and serviceable properties with residual value

totaling P.481 million were not disposed; and,

Cash advances granted for official travel totaling P.047 million

recorded under the Advances to Officers and Employees account

remain unliquidated at year-end due to lack of supporting

documents.

Plaridel Qualified Property, Plant and Equipment (PPE) account totaling P84.654

million except Land is unreliable due to non-submission of a

complete Physical Count of Property, Plant and Equipment

(RPCPPE) due to partial validation of the existence of properties

and equipment; and,

Unutilized Local Disaster Risk Reduction Management Fund

(LDRRMF) of Calendar Years (CYs) 2012 and 2013 remained in

the Trust Fund Books due to oversight, thus rendering the accuracy

of the Trust Liabilities - DRRMF account balance of P4.298 million

unreliable.

Polillo Qualified Property, Plant and Equipment (PPE) accounts in the Financial Statements totaling P58.129 million (excluding Land, Buildings, Public Infrastructures and Construction in Progress) as of year-end are doubtful due to non-completion of the reconciliation of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and records of the Accounting Office;

Due to non-preparation of Inventory and Inspection Report of Unserviceable Property (IIRUP) brought about by the absence of necessary information thereon, the Municipality was unable to dispose off unserviceable properties totaling P4.257 million representing 9.51 percent of the total recorded properties; and,

Inventory account balances as of year-end totaling P1.163 million could not be ascertained due to non-submission of the Report of the Physical Count of Inventories (RPCI) since physical count was not conducted by the Acting General Service Officer (GSO) and non-maintenance of stock cards as well as non-maintenance of supplies ledger cards by the Accounting Office.

Quezon Qualified Property, Plant and Equipment (PPE) totaling P66.949 million

could not be ascertained due to the non-submission of the

Inventory Committee of the duly accomplished Report on the


non-preparation of property cards by the GSO for reconciliation

with the PPE ledger cards maintained by the Accounting Office;

157


Failure to set up Real Property Tax (RPT) and Special Education

Tax (SET) Receivables at the beginning of the year, thus, the RPT

and SET Receivables totaling P9.739 million as of December 31,

2018 were unreliable.

Accounts Payable totalling P.217 million which have been

outstanding for two years or more were still not reverted to the

Unappropriated Surplus of the General Fund;

Cash advance granted to the Municipal Treasurer amounting to

P.014 million was not liquidated as of year-end, resulting in the

overstatement of the receivables account and understatement of

the affected expense accounts by amount corresponding to the

unreported disbursements; and,

Due to GSIS, Pag-IBIG and PhilHealth accounts are doubtful due

to the inability of the Accounting Office to establish the

details/breakdown of the unreconciled balances of P.015 million,

P.002 million and P.012 million, respectively.

Real Qualified Property, Plant and Equipment (PPE) account in the Financial Statements totaling P185.843 million as at year-end is doubtful due to non-reconciliation of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and records of the Accounting Office thus showing a material variance of P1.351 million;

Records of the List of Tax Delinquent submitted by the Treasurer’s Office is not reconciled with the records of the Accounting Office thereby showing a difference of P9.029 million, thus, validity and accuracy of the year-end balance of Real Property/Special Education Tax Receivables totaling P35.058 million is unreliable;

Unserviceable property, plant and equipment valued at P5.163 million, net of depreciation were still not disposed; and,

Cash Advances totaling P1.366 million remained unliquidated as at year end and cash advances were granted to not duly designated disbursing and bonded officer for various programs totaling P.094 million.

Sampaloc Qualified Land account recorded in the books at P2.579 million includes 14 parcels of land costing P2.429 million that were not supported with Transfer Certificate of Title in the name of the Municipality and five (5) parcels of land were registered in the name of a Municipal official and private persons due to lack of documents vital to support its ownership, thus, exposing the subject lots to possible third party claims and overstating the Land account by P2.429 million;

Three (3) motor vehicles received as donations were not recorded in the books of accounts as of year-end due to the absence of fair values; four other motor vehicles were not yet registered in the

158


name of the Municipality, and unserviceable motor vehicles were not.

Loans Receivable-Others from 21 debtors totaling P.335 million remain uncollected for more than nine years; and,

Cash advances granted to the Municipal Treasurer/Special Disbursing Officer totaling P.167 million recorded under the Advances to Special Disbursing Officer and Advances for Payroll accounts have not been fully liquidated.

San Andres Qualified Property, Plant and Equipment (PPE) totaling P59.512 million

could not be ascertained due to non-submission of the Municipality

of the Report on the Physical Count of Property, Plant and

Equipment (RPCPPE), and non-maintenance of Property Cards for

each category of PPE;

Land Improvements account balance of P.324 million is unreliable

because it is not supported with details/subsidiary ledger and was

not provided with depreciation rendering the account balance

doubtful;

Cash advances to officers and employees totaling P1.068 million

remain unliquidated as at year-end due to non-submission of

various officers and employees of the Liquidation Reports and its

supporting document to the Office of the Municipal Accountant and

some employees are no longer connected to the Municipality;

Due from NGAs account totaling P.392 million is of doubtful validity

and collectibility due to the inability of the Municipal Budget Officer

(MBO) to retrieve the records that would substantiate its validity;

Cash corresponding to the total unexpended balance of

appropriation for CYs 2012 and 2013 Local Disaster Risk

Reduction and Management Fund (LDRRMF) of P3.844 million

was not reverted back to the Unappropriated Surplus of the GF to

the detriment of the other social services of the Municipality and the

unexpended balances of the appropriated funds for LDRRM for

CYs 2016, 2017, and 2018 totaling P9.488 million were not

transferred to Trust Liability-DRRMF resulting to deprivation of the

purpose of LDRRMF; and,

Due to BIR account could not be ascertained due to unable to

adjust immediately the remittance of taxes paid by GF for Special

Education Fund (SEF) and Trust Fund (TF) totaling P1.122 million.

San Antonio Qualified


million net of depreciation, representing 59.76 percent of the total

assets could not be ascertained due to a) inability of the Inventory

Committee to conduct a complete physical count of PPE; b) non-

reconciliation of the inventoried PPE against the Accounting

records; c) undervalued amount of the Municipal Building in

159


connection with its renovation funded by the Department of Public

Works and Highways; and, d) disposal of unserviceable properties

has not yet been undertaken;

Bank Reconciliation Statement cannot be ascertained due to the existence of a) long outstanding deposit in transit totalling P.219 million probably caused by double postings in the Accounting Office records; and b) 74 stale checks from July 2012 to June 2018 totalling P1.078 million;

Cash Advances (CAs) totaling P1.479 million were not liquidated at year-end; and,

Land account of P10.492 million is unreliable due to a) 11 donated lots not supported with Transfer Certificate of Title (TCT); and, b) unidentified land recorded at P.061 million, thus, ownership over the lots was not established and exposing the same to third party claims and land disputes.

San Francisco Qualified

Property, Plant and Equipment (PPE) totaling P166.085 million

could not be ascertained due to failure of the Municipality to finish

the conduct of physical count of inventory, prepare and submit the


(RPCPPE);

Ledger balances of Cash on Hand and Cash in Bank-Local

Currency were not tally with the cashbook, with discrepancies of

P.176 million and P25.755 million, respectively, which could not be

reconciled due to incomplete accounting records, rendering the

account balances unreliable;

Cash Advances recorded in the books totaling P18.430 million

remain unliquidated as at year-end due to non-submission of

various Accountable Officers and employees of the Liquidation

Reports and its supporting document to the Office of the Municipal

Accountant, thus exposing the funds to possible loss or misuse;

Due from Officers and Employees year-end balance is unreliable

due to failure of the Municipal Accountant to support it with

schedule;

Due to National Government Agencies (NGAs) account of P3.451

million includes unaccounted beginning balance of P.746 million

which was dormant for eight years due to lack of available records

and supporting documents, thus rendering the account balance

doubtful and unreliable;

Due from Other Funds and Due to Other Funds account of the

Municipality as of December 31, 2018 showed a difference of

P4.402 million which could not be reconciled due to incomplete

accounting records, thereby rendering their balances unreliable;

160


Construction in Progress account balance of P15.851 million of

which P4.556 million was not transferred to the corresponding

asset account due to difficulty in retrieving the records, thus casting

doubts on the validity of the accounts; and,

Unexpended balance of appropriation for Local Disaster Risk

Reduction Management Fund (LDRRMF) for CYs 2017 and 2018

was not transferred to the Special Trust Fund in the Trust Fund (TF)

books while the unexpended balance for CYs 2012 and 2013

totaling P3.266 million in the TF was not reverted back to the

General Fund (GF) and cash corresponding to the unexpended

balance of LDRRMF for CYs 2014, 2015, and 2016 totaling P5.835

million was not transferred to a special trust fund account, to the

detriment of the programs under the disaster risk reduction and

management of the Municipality.

San Narciso Qualified


could not be ascertained due to failure of the Municipality to

prepare and submit the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE), and non-maintenance of Property

Cards for each category of PPE;

Cash Advances totaling P1.008 million remain unliquidated as at

year-end due to non-submission of various Accountable Officers

and employees of the Liquidation Reports and its supporting

document to the Office of the Municipal Accountant;

Receivable accounts totaling P1.252 million are of doubtful validity

and collectibility due to the inability of the Municipal Treasurer and

Municipal Accountant to retrieve the records that would

substantiate its validity;

Purchase of four carabaos in the amount of P.120 million for the

Carabao Dispersal Project of the Municipality were not recognized

and recorded in the books as Biological Assets – Breeding Stocks;

Due to Other Funds account could not be ascertained due to

erroneous entries of transactions totaling P.296 million; and,

Cash corresponding to the total unexpended balance of

appropriation for Calendar Years (CYs) 2012 and 2013 for Local

Disaster Risk Reduction and Management Fund (LDRRMF) of

P2.485 million was not reverted back to the Unappropriated

Surplus of the General Fund (GF).

Sariaya Qualified

Property, Plant and Equipment (PPE) accounts recorded in the

books of accounts at cost totaling P227.512 million as of year-end,

of which P52.630 million remained unaccounted, is unreliable due

to non-reconciliation between the records in the Accounting Office

and the Report on the Physical Count of Property, Plant and

Equipment (RPCPPE), which resulted to a net discrepancy of

161


P71.289 million between the schedule and RPCPPE and inclusion of unserviceable properties;

Parcels of land recorded in the books of accounts at market value totaling P16.672 million were not supported with Transfer Certificate of Title (TCT) in the name of the Municipality;

Other Receivables totaling P.882 million remained in the books of accounts for more than 11 years and were not requested for write-off;

Guaranty/Security Deposits Payable totaling P.033 million which have been outstanding for 10 years was not reverted to the Unappropriated Surplus of the General Fund (GF);

Cash advance granted to the Municipal Mayor of P.033 million recorded under the Advances to Officers and Employees was not liquidated at the end of the year; and,

Stale checks totaling P.012 million remained outstanding in the Bank Reconciliation Statements of the Municipality at year-end.

Tagkawayan Qualified Property, Plant and Equipment (PPE) accounts totaling P388.832

million as of year-end are unreliable due to: a) incomplete conduct

of physical count; b) unreconciled balances between the recorded

PPE and Report on the Physical Count of Property, Plant and

Equipment (RPCPPE); c) inclusion in the RPCPPE of

unidentified Other PPE, intangible assets, missing and stolen PPE

amounting to P2.937 million, P4.970 million, P.007 million and

P.009 million, respectively; and, d) non-submission of the

schedule of recorded PPE;


Receivables totaling P84.324 million are unreliable because: a) it

was not supported with a schedule of individual taxpayers from

whom the amount will be collected; b) the List of Real Property

Delinquent Taxpayers from the Municipal Treasurer’s Office shows

a total amount of P43.085 million only and it includes the

collectibles for Calendar Year (CY) 2001 and below; and c) the

amounts set up from CYs 2002 to 2010 were based on the

Assessment Rolls.

Land account of P27.193 million as of December 31, 2018 is

unreliable due to: a) use of market value in recording the 57

donated parcels of land instead of at its fair value at the time of

acquisition; b) recording of one parcel of land with market value of

P1.225 million which is titled to the Municipality of Atimonan,

Quezon; and c) non-recording of purchased lot amounting to P.060

million;

Forty-five stale checks totaling P.527 million remain not adjusted in

the books of accounts because the In-Charge-of-Office–Municipal

Treasurer did not return to the Accounting Office the ten

162


unclaimed/unreleased checks with its disbursement vouchers and

supporting documents; and the Municipal Accountant did not

prepare the Journal Entry Voucher to facilitate adjustment of the

35 released checks which have been long outstanding and without

request for replacement; and,

Advances to Special Disbursing Officer is understated by P.025

million because the liquidation of cash advances for Confidential

Fund of P.125 million were recorded as P.150 million.

Tiaong Unqualified

Unisan Qualified Property, Plant and Equipment (PPE) accounts totaling P163.570

million is unreliable as to valuation and existence due to non-

submission of the Report on the Physical Count of Property, Plant

and Equipment (RPCPPE) and net discrepancies in cost and

accumulated depreciation of P18.665 million, and P.009 million,

respectively, between the ledger and the PPE schedule and of

P7.257 million between the ledger and the property cards of the

Municipal Treasurer’s Office (MTO);

Fully-depreciated and unserviceable properties with residual value

totaling P.796 million were not disposed;

Due from Other Funds and Due to Other Funds showed a

discrepancy of P3.210 million due to incorrect recording of receipts

of municipal counterpart or equity share in the Trust Fund books;

Guaranty/Security Deposits Payable of P.364 million which have

been outstanding for five to 11 years were not reverted to the

Unappropriated Surplus of the General Fund, due to non-

monitoring, thus casting doubt on the reliability of the presented

account balance in the financial statements.

Loans Receivable-Others amounting to P.280 million was not

written-off due to non-compliance with the guidelines and

procedures on the write-off of dormant receivable accounts; and,

Biological Assets account with a book balance of P.050 million and

without supporting documents was still recorded in the books

because the authority for the derecognition was not secured, thus

the account balance was overstated by the same amount.

Rizal

Qualified

Cash in Bank-Local Currency, Current Account amounting to P3.032 billion as of year-end is unreliable as the periodic reconciliation of Accounting and Treasury’s records was not conducted, resulting in the net accumulated variance of P33.381 million between the two records and various reconciling items between the Province’s books and bank records totaling P172.400 million (net) remained unadjusted as of year-end;

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Inventories and Property, Plant and Equipment (PPE) accounts amounting to P216.332 million and P9.732 billion, excluding total Construction in Progress of P307.944 million, respectively, at year-end remained doubtful, and their existence and condition could not be readily and fully established due to continued failure to conduct physical count of Inventories; incomplete and unreliable report on the physical count of fixed assets; lack and/or incomplete supply and property records being maintained by the Accounting and General Services Offices; non-recognition of the values of forfeited real property; non-provision of depreciation for PPE costing P1.345 billion; incorrect account classification of various property costing P291.475 million; transfer of local road accounts from the Registry of Public Infrastructures to the books of accounts was valued at replacement cost in the amount of P643.739 million instead at depreciable replacement cost; and continuous inclusion in the books of accounts of unserviceable and obsolete property subject for disposal;

Several accounts which have abnormal year-end balances in Calendar Years 2015, 2016 and 2017 totaling P34.478 million remained unadjusted as of December 31, 2018, and in CY 2018 in the total amount of P4.736 million, thus, rendering those account balances unreliable; and,

Subsidiary Ledger (SL) balances of the Due from LGUs and Due to LGUs accounts in all funds for 14 LGUs of the Province aggregating P137.228 million and P24.626 million, respectively, have discrepancies of P8.678 million and (P39.958 million) with their reciprocal accounts in the respective books of the City and Municipalities, thus rendering the recorded balances of Due from LGUs and Due to LGUs accounts of the Province unreliable.

City

Antipolo City

Qualified

Property, Plant and Equipment (PPE) accounts with a total book value of P3.604 billion as of December 31, 2018 remained doubtful and their existence and condition could not be readily and fully established due to incomplete physical count of property, plant and equipment and non-reconciliation of the results of the count of property and accounting records, and deficiencies noted in the previous years on property management were not yet corrected at the end of the year, such as non-provision of depreciation for PPE costing P166.273 million; continuous recognition in the books of accounts the cost of property that were razed by the fire amounting to P8.531 million; incomplete Property Cards (PC) being maintained by the General Services Office and unreliable PPE Ledger Cards (PPELC) maintained by the Accounting Office;

Cash in Bank-Local Currency, Current Account (CIB - LCCA) amounting to P4.258 billion was overstated by P8.698 million due to reconciling items such as unrecorded disbursements, credit memos and book error remained unadjusted in the City’s books of accounts as of year-end; and,

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Accounts Payable totaling P460.760 million is unreliable due to inclusion of claims without the required documents other than the Obligation Request and various misclassified payables amounting to P56.673 million and P47.856 million, respectively.

Municipalities

Angono Qualified Property, Plant and Equipment (PPE) accounts with carrying amount of P286.502 million or 44.22 percent of the total assets of the Municipality excluding total Construction in Progress and Intangible Assets of P24.897 million and P6.357 million, respectively, at year-end could not be determined due to: (a) incomplete and unreliable report; (b) incomplete Acknowledgement Receipt for Equipment (ARE) being maintained by the General Services Office; (c) non-preparation of the required reports for Local Road Network; and (d) non-disclosure of total road network system in the Notes to the Financial Statement;

Cash in Bank account remained unreliable due to unadjusted/unrecorded reconciling items, such as unrecorded disbursements, debit memo and returned checks totaling P3.157 million and stale checks amounting to P.102 million; and,

Real Property Tax (RPT) and Special Education Tax (SET) Receivables as of December 31, 2018 amounting to P66.461 million and P66.461 million, respectively, are still unreliable due to the continued failure of the Municipal Treasurer to furnish the Municipal Accountant certified list of taxpayers as basis for the setting-up of at the start of the year.

Baras Qualified Property, Plant and Equipment (PPE) accounts with carrying amount of P178.563 million remained unreliable as of year-end due to: (a) the submitted Report on the Physical Count on Property, Plant and Equipment (RPCPPE) was inaccurate and incomplete; (b) P38.814 million worth of unsubstantiated PPE accounts were not provided with depreciation and (c) Construction in Progress balance amounting to P9.231 million under the Trust Fund (TF) has been dormant in the books of accounts for more than four years;

Cash in Bank balance amounting to P128.431 million could not be ascertained due to: a) absence of periodic reconciliation between the Accounting and Treasury Office resulting to a total difference of P1.053 million; b) discrepancy between the balance appearing in the accounting and bank records amounting to P.437 million; and c) existence of various reconciling items consisting mostly of unrecorded transactions, staled outstanding checks and unidentified items; and,

Due from Other Funds and Due to Other Funds remained unreconciled with a total difference of P12.991 million at the end of the year, despite prior years’ recommendation.

Binangonan Qualified Property, Plant and Equipment (PPE) accounts costing P1.713 billion and with carrying value of P1.506 billion remained doubtful, and their existence could not be readily established due to

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(a) continued failure to conduct a complete physical inventory of

the Municipality’s property; (b) undocumented dropping of PPE

totaling P73.118 million; (c) lack and/or incomplete property

records maintained by the Municipal Accounting and the General

Services Offices; and, (d) absence of a lapsing schedule;

Cash in Bank – Local Currency, Current Account of P480.796

million at year-end remained doubtful due to the discrepancies of

the balances of the bank accounts appearing in the Accounting,

Treasury and bank records; and unadjusted/unrecorded

reconciling items presented in the Bank Reconciliation Statements

(BRS) ;

Road Networks account amounting to P95.944 million remained

unreliable due to (a) inability to conduct inventory of Local Road

Networks of the Municipality; (b) discrepancies noted between the

Municipal Accounting and General Services Office Records; and

(c) non-recognition of the 75 percent of prior year’s Public

Infrastructure-Roads;

Receivables and Payables accounts totaling P8.142 million were

still carried in the Municipality’s books for more than ten years and

remained dormant due to lack of details and supporting documents

to substantiate the said balances; and,



respectively, for CY 2018 remained doubtful due to the failure of

the Municipal Treasury Office to provide duly certified list showing

the name of the taxpayers and the amount due and collectibles.

Cainta

Qualified

Property, Plant and Equipment (PPE) accounts with carrying value

of P2.347 billion or 52.90 percent of the total assets of the

Municipality remained unreliable due to: (a) absence of the report

on the physical count of its fixed assets (b) continues inclusion of

the properties lost/damaged by fire in May 1992 with a net book

value of P2 billion; (c) incomplete property records to account

every item composing the PPE; and (d) non-provision for

depreciation for some of the municipal properties amounting to

P1,092 billion, which represents the unsubstantiated balances of

the PPE accounts;

Cash in Bank account of P685.727 million was doubtful, due to: (a)

unreconciled balances in the records of the treasury and bank at

P87.493 million and P3.718 million, respectively; and (b) existence

of various unadjusted reconciling items of P8.393 million in the

books of the Municipality, thus provided inaccurate and misleading

information to the users of the financial statements;

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Real Property Tax and Special Education Tax Receivables of

P597.155 million and P598.227 million, respectively, are doubtful

due to a) absence of details of the accounts showing the list of the

taxpayers and the amounts collectible from them; and b) the

beginning balances of said accounts were not set up based on the

Real Property Tax Account Register for CY 2018; and,

Accounts Payable account balance of P373.155 million includes

balances which were not supported with documents to prove valid

claims and remained unpaid for more than two years, and which

were not reverted to the Unappropriated Surplus, and the year-end

balance differs by the amount of (P149.760 million) from the

supporting schedule, thereby affecting the validity and reliability of

the said account as of December 31, 2018.

Cardona Qualified Property, Plant and Equipment (PPE) accounts costing P186.210

million with carrying value of P146.811 million remained doubtful

and their existence could not be readily established due to (a)

continued failure to conduct a complete physical inventory of the

Municipality’s property; (b) lack and/or incomplete property records

maintained by the Municipal Accounting and Property Custodian;

and (d) absence of a lapsing schedule.

Cash in Bank – Local Currency, Current Account of P72.236 million

at year-end remained doubtful due to the discrepancies of the

balances of the bank accounts appearing in the Accounting,

Treasury and bank records;

Road Networks account amount to P20.250 million remained

unreliable due to (a) inability of the Municipal Engineer to provide

complete description and detailed cost segregation of road

components; (b) inability to conduct inventory of Local Road

Networks of the Municipality; and, (c) non-recognition of the 75

percent of prior year’s Public Infrastructure-Roads, contrary to the

provisions of COA Circular No. 2015-008 dated November 23,

2015; and,


Receivables for Calendar Year (CY) 2018 were not set up at the

beginning of the year due to the failure of the Municipal Treasury

Office to provide duly certified list of taxpayers and the amount due

and collectible, thus, the correctness of the recorded balance of the

RPT and SET Receivables of P11.584 million and P11.584 million,

respectively, remained doubtful.

Jalajala Qualified Property, Plant and Equipment (PPE) accounts with carrying value

of P143.924 million at year-end remained unreliable due to: a) non-

maintenance of PPE Ledger Cards (PPELCs) and Property Cards

(PC) by the Municipal Accountant and General Services Officer

(GSO), respectively; and b) discrepancy of P21.819 million

167


between the reported balance of PPE per financial statements and

the submitted Report on the Physical Count of Property, Plant and

Equipment (RPCPPE; and,

Cash in Bank accounts amounting to P86.963 million could not be

ascertained due to existence of various unidentified reconciling

items in different funds of the Municipality and the submitted Bank

Reconciliation Statements (BRSs) were not supported with bank

statements, debit/credit memoranda and paid checks.

Morong Qualified Property, Plant and Equipment (PPE) accounts with carrying value

P224.283 million or 65.8 percent of the total assets of the

Municipality at year-end remained unreliable due to: (a) absence of

a report on the physical count of its PPE; (b) non-preparation of

the required reports for Local Road Network; (c) continues

inclusion of the property lost/damaged by fire in December 10,

2009 with a net book value of P3.606 million; (d) non-provision for

depreciation for some of the properties amounting to P24.210

million which represents the unsubstantiated balances of the PPE

accounts; (e) discrepancy of P.162 million between the audited

and recorded balances of Accumulated Depreciation - Road

Network due to the five percent residual value provided for the

depreciable components on the Road Network System account;

and, (f) non-disclosure of total road network system in the Notes to

the Financial Statement;

Cash in Bank and Cash - Local Treasury accounts in the

accounting books of the Municipality amounting P89.721 million

and P4.680 million, respectively, was doubtful due to absence of

periodic reconciliation between the Accounting and Treasury

records resulting to a total difference of P31.310 million and (P.012

million), correspondingly;

Disbursement and collection reports and their supporting

documents were not submitted to the Auditor within the prescribed

period and 267 Journal Entry Vouchers (JEV) and its supporting

documents amounting to P139.309 million were not submitted to

the Audit Team as of report date;

CY 2017 Disbursement Vouchers (DVs) and Liquidation Reports

aggregating P4.563 million and P.166 million, respectively, were

still not submitted to the Audit Team; and,

Unable to set up again the Real Property Tax (RPT) and Special

Education Tax (SET) Receivables at the beginning of the year with

both zero balances.

Pililla Qualified Property, Plant and Equipment (PPE) accounts with carrying

amount of P159.865 million remained unreliable as of year-end due

to: (a) deficiencies in the submitted Report on the Physical Count

of Property, Plant and Equipment (RPCPPE) of the Municipality;

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(b) non-submission of a detailed PPE lapsing schedule which will

validate the correctness of the computed depreciation for the

year; and, (c) incomplete property records maintained by the

Municipal Accounting Office and the General Services Office;

Disbursement Vouchers and their supporting documents

amounting to P78.738 million, P16.803 million, and P33.522

million for General Fund (GF), Special Education Fund (SEF) and

Trust Fund (TF), respectively, or 57.76 percent of all check

disbursements from all funds were not submitted to the Audit

Team and the submission of disbursement, collection and deposit

vouchers with their respective journals, and financial reports for

CY 2018 was not made within the reglementary period, thus

causing delay in the review and verification of the transactions of

the Municipality;

Cash in Bank balance amounting to P158.675 million could not be

ascertained due to: a) absence of periodic reconciliation between

the Accounting and Treasury Offices resulting in a total difference

of P18.284 million; b) discrepancy between the balances

appearing in the accounting and bank records amounting to

P1.496 million; and, c) unaccounted prior years’ book reconciling

item in the Trust Fund amounting to P.188 million that was

improperly closed to Other Payables account without pertinent

documents to support the same was still not reverted back to

original account; and,


Receivables, both amounting to P24.279 million remained doubtful

due to inability of the Municipal Accounting Office to set-up the

amount collectible for both accounts at the beginning of the year

and to maintain a complete set of Subsidiary Ledger (SL) of

taxpayers per Real Property Unit (RPU).

Rodriguez Qualified Property, Plant and Equipment (PPE) accounts of P841.376 million

or 51.06 percent of the total assets of the Municipality are doubtful

due to: (a) incomplete physical inventory of the Municipality’s

property; (b) non-recognition of two units second hand heavy

equipment totaling P2.800 million in the Municipality’s books; (c)

net under provision for depreciation by P1.025 million on property

amounting to at least P25.988 million; (d) difference of P6.217

million between the balances reflected in the lapsing schedule and

Report of Physical Count on Property, Plant and Equipment

(RPCPPE); (e) inclusion of various unserviceable and obsolete

property worth P2.751; and, (f) incomplete property records being

maintained by the Accounting and General Services Offices;

Cash in Bank – Local Currency, Current Account and Cash - Local

Treasury accounts amounting to P678.950 million and P29.455

million, respectively could not be ascertained due to (a) absence of

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periodic reconciliation between the accounting and treasury

records; and (b) inability of the Municipal Accounting Office to make

the necessary adjustments for all valid reconciling items in the

books of the Municipality;


Receivables and its reciprocal accounts at the beginning of the year


were again based on estimates instead of the certified list showing

the name of the taxpayers and the corresponding amount of taxes

due and collectible, thus, rendering a zero year-end balances of the

RPT/SET Receivables unreliable and the actual tax due and the

amount collectible from taxpayers were not established and the

Acting Municipal Treasurer may no longer pursue the collection of

actual tax due to the Municipality;

Cash advances of P7.418 million were allowed to remained

unliquidated as of year-end; and,

Accounts Payables for CYs 2006 to 2013 totaling P5.625 million

were still recorded in the books of accounts despite of the absence

of complete supporting documents.

San Mateo Qualified Property, Plant and Equipment (PPE) accounts with a carrying

amount of P631.570 million of 41.96 percent of the total assets is

doubtful and their existence and condition could not be readily and

fully established due to: (a) insufficient property records and

inability of the Inventory Committee to conduct a complete physical

inventory of the Municipality’s property for the year; (b) non-

provision of depreciation or impairment for property costing

P158.447 million; (c) absence of complete and detailed lapsing

schedule; and, (d) inclusion of obsolete and unserviceable items

amounting to P.841 million;

Cash in Bank and Cash Local Treasury accounts amounting to

P536.477 million and P8.588 million, respectively, could not be

ascertained due to absence of periodic reconciliation between the

accounting and treasury records as well as accounting and bank

records, and failure of the Municipal Accounting Office to make the

necessary adjustments for all valid reconciling items in the

Municipality’s book;



respectively, were doubtful as to their accuracy, validity and

reliability due to: (a) non-preparation of subsidiary ledgers (SLs) to

support the recorded balances; (b) setting up of the Receivable

accounts at the beginning of the year were based on estimates

provided by the Treasury Office instead of the certified list showing

the name of the taxpayers and the corresponding amount of taxes

170


due and collectible; and, (c) erroneous entries made on the setting

up of RPT and SET Receivables and their corresponding liability

accounts; and,

Payment for the procurement of various medical, dental and

laboratory supplies and drugs and medicines totaling P3.720

million and P17.190 million, respectively, was recorded as outright

expense.

Tanay Qualified Property, Plant and Equipment (PPE) accounts with carrying

amount of P760.136 million excluding Construction in Progress

(CIP) of P88.583 million at year-end remained unreliable due to: a)

discrepancy of P15.400 million between the accounting records

and the submitted Report on the Physical Count of Property, Plant

and Equipment (RPCPPE); b) inclusion of demolished buildings in

the Municipality’s books of accounts; c) completed Water Supply

Systems project in the Trust Fund (TF) was not transferred to

General Fund (GF) books; and, d) inclusion of abnormal negative

balance in Markets account; and,

Cash in Bank balance amounting to P515.667 million could not be

ascertained due to: a) absence of periodic reconciliation between

the Accounting and Treasury Offices resulting in a total difference

of P124.006 million; b) discrepancy between the balance appearing

in the accounting and bank records amounting to (P4.412 million);

and c) various reconciling items consisting mostly of unrecorded

transactions, staled outstanding checks and unidentified items

remained unadjusted in the Municipality’s books.

Taytay Qualified Property, Plant and Equipment (PPE) accounts with carrying

amount of P901.388 million or 87.43 percent of the total assets of

the Municipality excluding total Construction in Progress of

P129.635 million, at year-end could not be determined due to: (a)

incomplete and unreliable report; (b) incomplete PPE Ledger

Cards, Property Cards and Acknowledgement Receipt for

Equipment (ARE) being maintained by the Accounting and General

Services Office, respectively; c) inclusion of cost of public market

of P17.903 million destroyed by fire in the Municipality’s books of

accounts; (d) inaccurate report prepared by the General Service

Office for Local Road Network; and, (e) non-disclosure of total road

network system in the Notes to the Financial Statement.

Cash in Bank account remained unreliable due to inability of the

OIC-Municipal Accountant to ascertain the validity of book

reconciling items identified in previous years and stale checks

amounting to P3.449 million; and P.130 million, respectively;


Receivables as of December 31, 2018 amounting to P.668 million

and P.668 million, respectively, are doubtful due to: a) continued

171


inability of the OIC-Municipal Accountant to maintain subsidiary

ledger of taxpayers per Real Property Unit (RPU); b) inclusion of

total delinquent RPT collectibles for Calendar Year 2018; and, c)

deduction of uncollectible real property tax for restricted properties;

and,

Other Receivables account of P17.858 million at year-end is

unreliable due to the adjustments made on the reconciling items in

the Bank Reconciliation Statements (BRSs) for various unrecorded

disbursements incurred in the previous years without details

totaling P17.692 million.

Teresa Qualified Property, Plant and Equipment (PPE) accounts with carrying amount of P151.420 million or 36.70 percent of the total assets of the Municipality excluding total Construction in Progress of P1.166 million at year-end could not be determined due to: (a) incomplete and unreliable Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and non-reconciliation of the results of the count of property and accounting records; (b) incomplete PPE Ledger Cards (PPELCs), Property Cards (PCs) and Acknowledgement Receipt for Equipment (ARE) being maintained the Accounting and General Services Offices; (c) non-preparation of required reports for Local Road Network; and, (d) non-disclosure of total road network system in the Notes to Financial Statements, contrary to Item VI of COA Circular No. 2015-008 dated November 25, 2015;

Cash in Bank – Local Currency, Current Account of P174.224 million at year-end remained doubtful due to the discrepancies in the bank accounts’ balances in the Accounting and Treasury records; and continued inability of the Accounting Office to identify the details of the reconciling items per book amounting to P.261 million.

REGION IV-B MIMAROPA

Marinduque Qualified Inventory accounts as of year-end were unreliable attributed to (a) inadequate records and failure to conduct actual physical count of inventories to substantiate the balance of P1.200 million of Agricultural and Marine Supplies for Distribution account which resulted in a net variance of P27.788 million between the books of accounts and the Report on the Physical Count of Inventories (RPCI); and (b) incorrect classification and recording of inventories for the Drugs and Medicines account and Medical, Dental and Laboratory Supplies account amounting to P11.252 million and P14.376 million, respectively, due to non-segregation of inventory held for sale, held for distribution, held for manufacturing and held for consumption; and (c) purchases of agricultural supplies totaling to P2.890 million were directly recorded as Agricultural and Marine Supplies Expenses instead of Agricultural and Marine Supplies Inventory which understated the inventory accounts and overstated the related expense accounts;

Construction-in-Progress (CIP) account amounting to P467.796 million includes the cost of awarded contracts which were not yet

172


started in CY 2018 totaling P189.614 million which were not

yetstarted as of December 31, 2018, and completed projects with

an aggregate amount of P133.825 million, hence, the CIP and

Other Provisions account were overstated by P323.438 million and

P189.614 million, respectively, and understated Building, Hospital

and Health Centers, Roads Networks and Water Supply Systems

accounts by P133.825 million as of year-end;

The total cost of 14 air conditioning units and their installation of

P2.225 million at the DRRM Training and Convention Center was

recorded under Buildings and Structures account instead of Office

Equipment account; and,

Due from Local Government Units (LGUs) account of the Provincial

Government with aggregate total of P5.290 million differ by P2.242

million with that of reciprocal Due to LGU account of five (5)

municipalities and 48 barangays with balances totaling P3.048

million as of year-end.

Boac Qualified Failure to recognize allowance for impairment of receivables as

prescribed under paragraph 67 of Philippine Public Sector

Accounting Standards (PPSAS) 29 on impairment and

uncollectibility of financial assets despite the presence of dormant

receivables amounting to P6.442 million which were non-moving

for more than 10 years and where settlement could no longer be

ascertained;

Property, Plant and Equipment accounts valued at P127.086

million exclusive of the Construction in Progress accounts as of

December 31, 2018 cannot be relied upon due to (a) unreconciled

difference of P68.228 million between the accounting records and

inventory report; and,

Construction in Progress (CIP) Infrastructure Assets and Building

and Other Structures under the General Fund includes completed

projects amounting to P4.102 million thereby overstating the

balances of the CIP accounts, understating the balances of the

related asset accounts and the corresponding depreciation on said

assets were not provided.

Buenavista Qualified Ten bank accounts with an aggregate amount of P73.222 million

could not be ascertained due to continuous failure of the Municipal

Accountant to prepare the required Bank Reconciliation

Statements (BRS); and,

Property, Plant and Equipment (PPE) account registered a total

discrepancy of P8.193 million when compared to the Report on the

Physical Count of Property, Plant and Equipment (RPCPPE) due

to failure of the Municipal Accountant and Municipal General

Services Officer to reconcile their records and unserviceable and

non-existent properties amounting to P7.325 millionand P1.742

million, respectively, still form part of the PPE balance.

173


Gasan Qualified Cash in Bank – Local Currency, Current Account amounting to

P113.039 million was overstated by P.030 million representing the

bank alance of the combo account previously maintained with the

Philippine National Bank – Boac Branch which was unfounded and

already closed as of July 30, 2018; and,

Property, Plant and Equipment (PPE) account registered a total

discrepancy of P8.193 million when compared to the Report on the


to failure of the Municipal Accountant and Municipal General

Services Officer to reconcile their records and unserviceable and

non-existent properties amounting to P7.325 million and P1.742

million, respectively.

Mogpog Qualified Unable to reconcile the significant difference of P116.353 million

between their records due to non-completion of the physical

inventory taking thus, affecting the fair presentation of the Property,

Plant and Equipment account balances in the financial statements

as of December 31, 2018;

Property, Plant and Equipment (PPE) under the General Fund,

Special Education Fund and Trust Fund with a carrying value of

P10.244 million were not provided with the prescribed depreciation;

and,

Land account of P8.103 million as of December 31, 2018 was

unreliable due to inclusion of 45 parcels of land valued at P4.796

million which were still not covered by Torrens Title/Transfer of

Certificate of Title (TCT).

Santa Cruz Qualified Cash in Bank account could not be ascertained due to non-

cancellation of stale checks totaling P.054 million which have been

outstanding for more than six months and not effecting in the books

the reconciling items of Cash in Bank – Local Currency Current

Account (LCCA) amounting to P.142 million;

Property Plant and Equipment (PPE) at year-end amounting to

P237.561 million was not fully established due to (a) inclusion of

unserviceable PPEs with book value amounting to P23.965 million

and (b) non-submission of a complete Report on the Physical

Count of PPE resulting to a discrepancy of P20.948, million, as well

as non-recognition of depreciation for PPEs valued at P.589 million

under the Special Education Fund

Construction in Progress (CIP) account amounting to P35.009

million cannot be ascertained due to inclusion of the total contract

cost of infrastructure projects unbilled and unfinished as of year-

end; and,

Loans Payable account amounting to P.144 million remained

dormant for more than 10 years.

174


Torrijos Qualified Real Property Tax (RPT) Receivables and Special Education Tax

(SET) Receivables amounting to P1.668 million and P2.323 million,

respectively, or a total of P3.991 million could not be ascertained

due to the unreconciled difference of P21.620 million between the

records of the Accounting and Treasurer’s Office;

Procurement of various supplies and materials with carrying

amount of P6.463 million were directly charged to expense

accounts upon receipt from dealers instead of recording first as

inventory accounts prior to distribution to requesting officials; and,

Property, Plant and Equipment (PPE) account year-end balances

in the Financial Statements and the Report on the Physical Count

of Property, Plant and Equipment (RPCPPE) showed a

discrepancy amounting to P1.034 million representing the carrying

amount of the unserviceable properties.

Occidental Mindoro

Qualified Property and accounting records for Land Improvement accounts

were not reconciled showing a net difference of P89.121 million

between the two records rendering the Land Improvements

account balance of P182.631 million (net of depreciation) doubtful;

and

Cash advances totaling P48.812 million remained unliquidated as

of the year-end and additional cash advances were granted despite

non-settlement of previous cash advances.

Municipalities

Abra de Ilog Qualified Inventories and Property, Plant and Equipment accounts


could not be ascertained due to failure of the Municipality to

conduct physical inventory and submit the reports thereon, and

reconciliation with the general ledger was not conducted.

Calintaan Qualified Failure to recognize in the books of accounts at least 75% of public

infrastructures completed in previous years;

Property, Plant and Equipment (PPE) account reflected in the

Statement of Financial Position was overstated by P1.105 million

considering that the stolen/carnapped vehicle was still recorded in

the books as of December 31, 2018;

Procurement of supplies and inventories were directly charged to

the related expense accounts thus, there was no inventory

accounts recorded in the Statement of Financial Position,

consequently overstating the expense accounts as of

December 31, 2018; and

175


Advances for Operating Expenses and Due from Officers and

Employees accounts were understated by P3.052 million and

P1.604 million, respectively, due to the following:

a) Cash totaling P3.052 million out of the cash advances of

the Municipal Treasurer refunded in January and

February 2019 were reflected in the books as liquidations

as of December 31, 2018 thereby, understating the

Advances for Operating Expenses account;

b) Rrequest for write-off for cash advances amounting to

P.365 million was already removed from the books of

accounts as of year-end even though said request was

granted only in January 4, 2019 per COA Regional Office

IV-B Decision No. 2019-02 hence, understating the Due

from Officers and Employees account; and,

c) One unit stolen/carnapped service vehicle with

acquisition cost of P1.238 million was not recorded in the

books of accounts under the accountability of the former

Municipal Mayor after the request for relief from property

accountability has been denied under COA Decision No.

2017-024 dated February 16, 2017 thereby, understating

the Due from Officers and Employees account at year-

end.service.

Looc Unqualified

Lubang Unqualified

Magsaysay Qualified Balances of six (6) financial statement accounts (Cash-Local

Treasury, Cash in Bank, Accounts Payable, Loans Payable-

Domestic, Due to and Due from Other Funds) totaling P81.927

million were not properly and accurately presented in the

Statement of Financial Position as of December 31, 2018 due to

errors in recording, misclassification of account, unadjusted

reconciling items and unreconciled balances of reciprocal

accounts;

Existence, valuation and rights over the Property, Plant and

Equipment (PPE) of the Municipality with carrying amount of

P141.638 million as of December 31, 2018 was uncertain due to

the following:

a) Land costing P.300 million were not covered with a

Certificate of Title under the name of the Municipality;

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b) Land acquired at no cost was valued in the books at P1.494

million but reported at its current assessed value of P2.833

million in the Report on the Physical Count of Property, Plant

and Equipment (RPCPPE) or a difference of P1.339 million;

c) Unserviceable PPEs totaling P23.142 million were still not

yet disposed or tested for impairment despite the evidence of

physical damage and the cessation of service provided by the

assets;

d) Two motor vehicles totaling P.970 million per RPCPPE

were not found during the ocular visit; and,

e) PPEs donated to various Barangays costing P.262 million

were still recognized in the books thereby, overstating the

PPE year-end balance in the books. and,

Cash advances for operating expenses and travel purposes

totaling P2.546 million under the Due from Officers and Employees

account were not reclassified to a proper Receivable account.

Mamburao Qualified PPE with a net book value of P116.503 million is unreliable due to

failure to complete the conduct of physical inventory of PPE;

Cash in Bank - LCCA balance totaling P94.673 million was

overstated by P14.330 million;

Inventory account balances totaling P2.216 million were unreliable

due to the failure to submit the required PRCI and non-existing

items were still carried in the books.

Paluan Qualified Property, Plant and Equipment account balances totaling P266.870

million do not reconcile with the Report on the Physical Count of

Property, Plant and Equipment totaling P35.790 million, thereby

showing a difference of P231.080 million;

Thirteen Statement of Financial Position accounts totaling P91.956

million were not fully disclosed in the Notes to Financial Statements

as these were not supported with complete Subsidiary Ledgers,

thus showed a difference of P70.538 million rendering the account

balances unreliable; and,

Failure to reconcile records with the local creditors regularly thus,

Loans Payable - Domestic outstanding balance in the books as of

December 31, 2018 amounting to P21.960 million was understated

by P3.192 million.

Rizal Qualified Inventories and Property, Plant and Equipment (PPE) accounts

amounting to P1.053 million and P149.695 million, at gross

amounts, excluding the Construction in Progress account,

respectively, could not be ascertained due to the: a) Failure of the

177


Inventory Committee to conduct complete physical inventory on all

supplies and PPE of the Municipality; b) PPE ledger balances that

did not reconcile with the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) showing a material discrepancy

of P76.400 million; c) Unserviceable vehicles totaling P18.396

million were not yet disposed and were not tested for impairment

despite the evidence of physical damage and the cessation of

service provided by the assets; and, d) The list/schedule of PPEs

submitted by the Municipal Accountant were also not reconciled

with the PPE ledger balances with discrepancies totaling P55.252

million.

Sablayan Qualified Property, Plant and Equipment totaling P956.904 million (gross)

was not reconciled with the inventory report with a balance of

P895.214 million, showing a discrepancy of P61.690 million;

Inventory accounts valued in the books at P40.994 million was also

not reconciled with the inventory report totaling P10.139 million,

showing a difference of P30.855 million; and,

Cash in Bank-Local Currency, Current Account balance totaling

P101.146 million was understated by P7.892 million since valid

book reconciling items remained unadjusted in the books of

accounts.

San Jose Qualified Property, Plant and Equipment with carrying value of P639.097

million, net of the Construction-in-Progress accounts, as of

December 31, 2018 could not be ascertained due to the: (a) failure

of the Inventory Committee to conduct complete physical count on

all PPEs of the Municipality; and (b) unreconciled balances

between the reported amounts in the Statement of Financial

Position and the Report on the Physical Count of Property, Plant

and Equipment (RPCPPE) resulting in a material difference of

P424.350 million;

Long outstanding cash advances totaling P19.012 million remained

unliquidated as of year-end; and,

Trust Liabilities - Disaster Risk Reduction and Management

account balance was understated due to the failure of the Municipal

Accountant to transfer and record the unexpended balances of the

CY 2018 Local Disaster Risk Reduction and Management Fund


Santa Cruz Qualified Inventory Committee failed to complete the conduct of the physical

inventory of Property, Plant and Equipment valued in the books of

account at P316.108 million as of December 31, 2018;

Cash in Bank-Local Currency, Current Account balance totaling

P121.602 million as of December 31, 2018 was overstated by

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P9.241 million because of erroneous recording of receipt of loan

and other valid book reconciling items remained unadjusted in the

books of accounts; and,

Failure to reconcile records with the local creditors regularly thus,

Loans Payable - Domestic outstanding balance in the books of

accounts as of December 31, 2018 amounting to P170.649 million

was overstated by P7.740 million.

Oriental Mindoro Qualified The accuracy and reliability of the balances of the following

accounts could not be ascertained:

Cash-in-Bank-Local Currency, Current Account (CIB-LCCA)

account totalling P1.050 billion includes (a) identified book

reconciling items amounting to P33.875 million in the Bank

Reconciliation Statements (BRS) which remained unadjusted in the

books of accounts as of year-end; and (b) book and bank

reconciling items of P1.425 million aged three to 16 years and

staled checks totalling P.319 million which remained unadjusted as

of year-end;

Loans Receivables-Others account totalling P11.737 million (a) the

accuracy of which could not be fully determined due non-

reconciliation of the Accounting and the implementing offices’

records relative thereto; (b) was understated by P.942 million since

the collected monthly loan amortizations were recorded under

Other Payables account instead of Loans Receivables-Others

account; and (c) includes accounts with negative balances totalling

P.122 million as shown in the Statement of Loans Receivables as

of December 31, 2018;

Due from Non-Governmental Organizations (NGOs) and/or

People’s Organizations (POs) account was understated by P1.500

million due to the recording of the grants by said amount under

Donations or Subsidy to Other Local Government Units (LGUS)

account instead of to the former account;

Property, Plant and Equipment (PPE) accounts with a net carrying

value of P3.810 billion under the General, Special Education, and

Trust Funds (a) were not supported with complete physical

inventory and existence of discrepancy of P4.128 billion between

the accounting and property records; and (b) include negative

carrying value of Land Improvements account of P.525 million due

to erroneous recording of depreciation; and,

Due to NGAs account balance of P773.834 million (a) includes

dormant accounts of P22.124 million aged four to ten years; and

(b) was understated by P8.183 million attributed to the inadvertent

recording of professional fees of doctors in the Due to NGAs

account instead of Other Payables account by same amount.

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City

Calapan City Qualified The accuracy and reliability of the balances of the following


Due from NGOs/POs account amounting to P.200 million was

understated due to recording of the grants by the said amount

under Donations account instead of to the former account;

Property, Plant and Equipment (PPE) accounts with a net carrying

value of P676.680 million under the General and Special Education

Funds were unreliable due to substantial discrepancy of P299.450

million between the accounting records and inventory reports

attributed to (a) unaccounted beginning balance of P81.385 million;

(b) transfer of completed projects from Trust Fund (TF) to GF

totaling P24.133 million were not properly identified and recorded

in lump-sum amount; and (c) incomplete physical count of road

networks;

Agricultural and Forestry Equipment and Donation accounts was

understated and overstated, respectively, both by P2.988 million

due to the improper recording of the acquisition of agricultural

machineries; and,

Other Receivables and Other Income accounts were understated

both by P.239 million due to failure to set-up receivables to account

the annual payment to be rendered by Calapan Federation of

Farmers Association (CALFFA) for the required equity in

agricultural equipment for the Farm Mechanization Project.

Municipalities

Baco Qualified The accuracy and correctness of the account balances of the

following accounts could not be ascertained:

Property, Plant and Equipment (PPE) accounts with reported

net carrying value of P180.801 million as of December 31,

2018 due to (a) incomplete physical inventory and non-

reconciliation of the results thereof with the accounting and

property records in conflict with Section 124 of the Manual on

the NGAS for LGUs, Volume I and Section C.3, Chapter V of

the Manual on Property Custodianship; (b) non-maintenance

by the Municipal Treasurer of Property Cards (PCs) for

properties acquired in CY 2017 and prior years which was

inconsistent with Section 114 of the Manual on the NGAS for

LGUs, Volume I; (c) unreconciled PPE records and reports

with a variance of P5.101 million disregarding Section 491 of

the Government Accounting and Auditing Manual (GAAM); (d)

non-provision of depreciation to various properties totaling

P10.664 million in contrast to COA Circular No. 2003-007

180


dated December 11, 2003; and (e) undisposed unserviceable

properties totaling P1.617 million which was not in

accordance with COA Circular No. 92-386 dated October 20,

1992;

Cash in Bank-Local Currency, Current Account (CIB-LCCA)

totaling P102.398 million due to (i) non-adjustment of book

reconciling items and stale checks totaling P.922 million and

P3,600.00, respectively; and (ii) bank reconciling item

amounting to P.073 million which remained reflected in the

BRS since 2017. Moreover, the monthly BRS and their

supporting documents were not submitted within the

prescribed period in violation of COA Circular No. 96-011

dated October 2, 1996; and

The Municipality still failed to recognize accrued income from

delinquent stall and lot occupants for CY 2018 totaling P2.375

million thus, understating the accounts Operating Lease

Receivable (1-03-02-010), Receipts from Market Operations

(4-02-02-150) and Fines and Penalties-Business Income

(4-02-02-980) accounts for CY 2018.

Bansud Modified/

Qualified The balances of the following accounts as of December 31, 2018

were unreliable:

Cash in Bank-Local Currency, Current Account of P137.720 million

due to (a) unreconciled balances totaling P.449 million between the

accounting and treasury records; (b) inclusion of non-existing

account; (c) net reconciling items totaling P.535 million which

remained unadjusted in the accounting records; and (d) stale

checks remained unadjusted at year-end;

Property, Plant and Equipment accounts reported at a net carrying

value of P79.031 million due to (a) material difference of P81.748

million between the inventory reports and accounting records as a

result of incomplete inventory and documentation of properties,

and unidentified beginning balances of P70.915 million in property

records and P35.406 million in property ledgers; (b) failure to

establish and transfer the completed infrastructure projects from

Government Equity account to appropriate Infrastructure Assets

accounts due to non-consolidation of the Registry of Public

Infrastructure (RPI); and (c) non-preparation of a complete Report

on the Physical Count of Local Road Network; and,

Loans Payable-Domestic account with outstanding balance of

P9.720 million was understated by P.105 million due to erroneous

recording of the cost of heavy equipment purchased out of the loan

instead of the approved loan from the bank.

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Bongabong Qualified Property, Plant and Equipment (PPE) account balance of P377.397


(a) unreconciled balance of P22.391million between accounting

records and Report of Physical Count of Property Plant and

Equipment (RPCPPE); (b) unserviceable properties amounting to

P6.399 million remained undisposed and exposed to further

deterioration; (c) inclusion of expendable and semi-expendable

supplies or property totaling P1.833 million; and (d) misclassified

recording of procured/constructed property out of local funds and

fund transfers; and,

10 parcels of land remained untitled, thus exposing the properties

to risk of third-party claims which could be disadvantageous to the

government in terms of proceedings cost and risk of loss of

property due to repossession by the registered owners or their heirs

and possibility of squatting and unlawful occupants.

Bulalacao Qualified The accuracy and reliability of the balances of the following


Property, Plant and Equipment (PPE) account balance of P193.572

million as of December 31, 2018 due to (a) unreconciled balance

of P75.472 million between Municipal Accounting Office (MAO)


Equipment (RPCPPE) submitted by the ICO-Municipal Treasurer,

(b) failure of the Municipal Treasurer’s Office (MTO) to maintain the

required property records (c) inclusion of expendable and semi-

expendable supplies or property to PPE account, (d) misclassified

recording of transactions, (e) undisposed unserviceable properties

amounting to P1.972 million, and (f) non-preparation of Report on

the Physical count of Local Road Network (RPCLRN); and,

Cash in Bank – Local Currency Current Account (LCCA) totaling

P55.420 million as of December 31, 2018 due to: (a) non-

reconciliation of the Cash in-Bank ledger balances with the bank

and treasury records, and (b) non-adjustment and exclusion of net

reconciling items in the submitted Bank Reconciliation Statements

totaling P.050 million; and,

Nine (9) stale checks totaling P.094 million were still included in the

list of outstanding checks in the General Fund.

Gloria Unqualified

Mansalay Qualified

The accuracy and reliability of the balances of the following




of P407.829 million between Municipal Accounting Office (MAO)


182


Equipment (RPCPPE) submitted by the Municipal Treasurer; (b)

failure of the Municipal Treasurer’s Office (MTO) to maintain the

required property records; (c) inclusion of expendable and semi-

expendable supplies or property to PPE account; (d) misclassified

recording of transactions; (e) unserviceable properties amounting

to P1.651 million remained undisposed and exposed to further

detoriation; and (f) non-preparation of Report on the Physical count

of Local Road Network (RPCLRN); and,

Cash in Bank – Local Currency Current Account (LCCA) and Local

Currency, Saving Account (LCSA) accounts totaling P130.818

million as of December 31, 2018 due to (a) non-reconciliation of the

Cash in Bank per ledger balances, and bank and treasury records;

(b) non-adjustments of the net reconciling items as of December

31, 2018 totaling P.442 million in the cashbooks and accounting

records; (c) net reconciling items (exclusive of outstanding checks)

totaling P1.450 million that needs further analysis and

reconciliation with the depository bank; and (d) 10 stale checks

totaling P.066 million were still included in the list of outstanding

checks in the General and Trust Funds.

Naujan Qualified


million could not be ascertained due to difference of P321.620

million between Inventory Reports and Accounting records as a

result of incomplete inventory and documentation of the properties

and non-preparation and maintenance of the complete Report on

the Physical Count of Local Road Network.

Pinamalayan Qualified

The validity and accuracy of the following accounts could not be

ascertained:


million as of December 31, 2018 due to discrepancy of P4.928

million between Accounting Office and General Services Office

(GSO) records caused by non-reconciliation of both Office of the

Report on the Physical Count of PPE (RPCPPE) for calendar year

(CY) 2018 after the conduct of physical inventory of property with

that of the accounting records due to failure of the said offices to

maintain the required property records; inclusion of expendable

and semi-expendable supplies or property totaling P1.420 million

in the PPE account; and non-recording to appropriate PPE account

the acquired/constructed property out of Trust Fund totaling

P20.980 million; unserviceable properties amounting to P1.703

million remained undisposed and exposed to further deterioration;

and non-preparation of Report on the Physical count of Local Road

Network (RPCLRN); and,

Cash in Bank - Local Currency Current Account (LCCA) and Local

Currency, Saving Account (LCSA) totalling P293.122 million as of

December 31, 2018 due to non reconciliation of the cash in-bank

183


ledger balances with the bank and treasury records, non-

adjustments of the net reconciling items as of December 31, 2018

totalling P3.120 million in the cashbooks and accounting records,

and inclusion of 31 stale checks totalling P1.478 million.

Pola Qualified

Cash in Bank-Local Currency, Current Account of P146.114 million

could not be ascertained due to the continuous failure of the

Municipal Accounting Office to prepare Bank Reconciliation

Statements; and,

Property, Plant and Equipment accounts of P134.262 million could

not be established due to the (a) non-undertaking of annual

physical count of properties and non-preparation of Report on the

Physical Count of Property, Plant and Equipment, (b) non-

maintenance of property/ledger cards, (c) inability to transfer prior

years’ completed infrastructure projects from Government Equity

account to their respective Property accounts due to non-

maintenance of Registry of Public Infrastructure, and (d) non-

preparation and maintenance of the complete Report on the

Physical Count of Local Road Network.

Puerto Galera Qualified

The existence, completeness, accuracy and reliability of the

following accounts could not be ascertained:


million as of December 31, 2018 due to (a) failure to properly

accomplish the Report on Physical Count of Property, Plant and

Equipment (RPCPPE), (b) non-preparation of Property Cards, and

(c) non-preparation of Report on the Physical Count of Local Road

Network (RPCLRN) and other required reports for Road Network

for CYs 2016 and below; and,

Cash in Bank (CIB)-Local Currency, Current Account of P141.252

million 0 as at December 31, 2018 due to non-adjustment of

reconciling items totaling P.219 million and stale checks totaling

P.241 million.

Roxas Qualified

The accuracy and correctness of the balances of the following


Cash in Bank – Local Currency Current Account (LCCA) and Local

Currency, Saving Account (LCSA) in the accounting books of the

Municipal Government of Roxas totaling P91.043 million as of

December 31, 2018 due to (a) non-submission of Bank

Reconciliation Statements (BRS); (b) non-reconciliation of the

Cash in-Bank ledger balances with the bank and treasury records;

(c) non-maintenance of Subsidiary Ledgers (SL) for each bank

accounts and cashbooks for two bank accounts; and (d) non-

recording of one bank account with balance of P.080 million in the

Cash in Bank account.

184




of P147.689 million between the records of the Municipal

Accounting Office and Report of Physical Count of Property Plant

and Equipment (RPCPPE) submitted by the General Service

Officer (GSO)–Designate; (b) failure of the GSO-Designate to

maintain the required property records; (c) inclusion of expendable

and semi-expendable supplies or property to PPE accounts; (d)

misclassified recording of transactions; (e) unserviceable

properties remained undisposed and exposed to further

deterioration; and (f) failure to prepare the Report on the Physical

count of Local Road Network (RPCLRN); and,

Eleven (11) parcels of land remained untitled in the name of the

Municipality, thus exposing the properties to risk of third party

claims.

San Teodoro Qualified

The accuracy and correctness of the balances of the following


Cash in Bank-Local Currency Current Account (CIB-LCCA) totaling

P51.582 million due to the non-preparation or delayed submission

of the bank reconciliation statement (BRS) thus, prevented the

Audit Team to establish the nature and validity of the net reconciling

amount totaling P1.059 million;

Property, Plant and Equipment (PPE) accounts with reported net

carrying value of P91.032 million as of December 31, 2018 due to

the (a) incomplete physical inventory and non-reconciliation of the

results thereof with the accounting and property records; (b) non-

maintenance of property cards for properties acquired in CY 2012

and prior years and of PPE Ledger Cards for properties acquired

and booked in CY 2017 and prior years by the Municipal Treasurer

and Municipal Accountant, respectively; (c) unreconciled PPE

records and reports amounting to P4.062 million; (d) non-

recognition of Public Infrastructure accounts in the books of

accounts totaling P.901 million; and, (e) negative (abnormal)

carrying value of Communication Equipment account in the

General Fund books of accounts amounting to P.292 million;

Loans Payable-Domestic (2-01-02-040) account amounting to

P2.200 million due to the (a) failure of the Municipal Accountant to

(i) record in the books of accounts the loan releases for Subaan

River Protection and Solid Waste Management Facility with

Equipment totaling P11.084 million; and (ii) reverse the erroneous

adjustments made in the account totaling P3.715 million; (b)

recognition of loans payable in the books amounting to P2.200

million even without actual release and receipt of fund; and

185


(c) interest payments totaling P9.810 million were deducted from

the principal balance of the loan, erroneously debited the Due from

Other Funds (1-03-04-050) account to set-up loans payable for CY

2018 amounting to P4.746 million. and subsidiary ledger per loan

account to keep track of releases, principal and interest payments

was still not maintained; and,

Due from/Due to Other Funds accounts in the CY 2018 General

and Trust Fund books with a discrepancy of P5.120 million due to

erroneous entries of the loans set-up, BEMONC collections, and

health employees payroll and unidentified transactions in the Trust

Fund-Proper, thus, compromising the validity and reliability of the

recorded transactions and adversely affecting the account

balances and other related accounts.

Socorro Unqualified

Victoria Qualified



difference of P15.573 million between accounting and inventory

records, not properly accomplished Report on Physical Count of

Local Road Network (RPCLRN) amounting to P30.455 million and

non-preparation of the required reports for Road Network.

Palawan Qualified

Cash-in-Bank accounts as of December 31, 2018 totaling P4.633

billion could not be relied upon due to discrepancies between the

accounting, treasury and bank records attributable to

unrecorded/unadjusted transactions, unreconciled account

balances and non-cancellation of stale checks.

City

Puerto Princesa City

Qualified

Cash-in-Bank–Local Currency, Current Account (LCCA) and Local

Currency, Time Deposit (LCTD) account balances of P3.538 billion

as of December 31, 2018 was doubtful due to (a) existence of

reconciling items in the Bank Reconciliation Statements (BRS)

totalling P10.164 million which remained unadjusted in the books

of accounts; (b) closed bank accounts with balances totalling

P14.486 million were still carried in the books; and (c)

discrepancies between cashbook balances and accounting records

accumulated to P26.377 million for failure of the accountable

officers to conduct monthly reconciliation of the cashbook with the

subsidiary ledgers; and,

Property, Plant and Equipment (PPE) and Investment Property

valued at P4.235 billion as of December 31, 2018 could not be

ascertained due to (a) non-conduct of physical count of properties

and non-maintenance of property cards and PPE ledger cards by

186


the General Services Officer and the City Accountant, respectively;

(b) the account balances include unidentified fixed assets totaling

P226.834 million; and (c) depreciation was not provided for

depreciable assets under the SEF and TF books valued at P2.875

million and P2.002 million, respectively, as of CY 2018 and Motor

Vehicle account was overstated by P6.300 million due to the inclusion

of undelivered 21 units of electric powered vehicles.

Municipalities

Aborlan Qualified

Property, Plant and Equipment with net book value of P60.416

million carried in the Statement of Financial Position as at

December 31, 2018 could not be ascertained due to the failure of

the Municipality to complete the conduct physical inventory of its

Property, Plant and Equipment, thus rendering the existence,

completeness and valuation of the recorded property balances

doubtful.

Agutaya Management Letter

Due to non-submission of financial documents for CY 2018

Araceli Qualified

Property, Plant and Equipment account with net book value of

P36.508 million as at December 31, 2018 could not be ascertained

because it was not supported by physical inventory report, property

cards, property ledger cards, complete lapsing schedules and

updated Acknowledgement Receipt for Equipment; and,

Cash in Bank-Local Currency, Current Account totaling P97.628

millioncould not be ascertained due to a) non-submission of Bank

Reconciliation Statements of five depository accounts; b)

unidentified reconciling items between book and bank balances of

two depository accounts totaling P.689 million; c) variance between

the General Ledger balance and subsidiary records totaling P2.625

million; and d) non-reconciliation of cashbook with accounting

records.

Balabac Management Letter


Bataraza Qualified


million, net of Construction-in-Progress, as of December 31, 2018

cannot be ascertained due to: (a) non-reconciliation between the

General Ledger (GL) balances and Report on Physical Count of

Property, Plant and Equipment (RPCPPE) as of year-end; (b)

RPCPPE was not presented by type of PPE, and unit cost or

equivalent fair value and assigned property number were also not

presented; and (c) other PPE amounting to P6.384 million, which

were identified as impaired by the agency, were derecognized from

the books instead of setting up an allowance for the impairment

and impairment of the assets was recognized at its carrying amount

resulting in net overstatement of recognized Impairment Loss

amounting to P.234 million.

187


Brooke's Point Qualified

Cash and Cash Equivalents account as of December 31, 2018

amounting to P317.742 million could not be ascertained due to: (a)

failure of the Municipal Accountant and the Municipal Treasurer to

reconcile their respective records resulting in discrepancies totaling

P15.703 million for Cash – Local Treasury and Cash in Bank

accounts; and (b) various reconciling items reflected in the bank

reconciliation statements remained unadjusted in the accounting

books due to lack of documents to support the same

Unable to conduct the yearly physical inventory count of Property,

Plant and Equipment (PPE), Investment Property and Biological

Assets as of December 31, 2018 with net book value of P340.989

million, excluding Construction-in-Progress totaling P233.388

million and the Municipal General Service Officer failed to maintain

property cards.

Busuanga Management Letter


Cagayancillo Management Letter


Coron Management Letter


Culion Management Letter


Cuyo Qualified

Cash and Cash Equivalents as of December 31, 2018 amounting

to P120.639 million could not be relied upon due to the following

deficiencies and errors in the records and procedures of the

Accounting and Treasury Office: (a) The General Ledger was not

maintained for CY; (b) Collections totaling P20.074 million were

accounted for without specific journal entries per individual Report

of Collections and Deposits (RCD); (3) Bank deposits totaling

P39.162 million were reported under Reports of Disbursements

(RDs) instead of Reports of Collections and Deposits (RCDs); (4)

The Municipal Treasurer and the Municipal Accountant failed to

reconcile the cashbook balances with the subsidiary accounting

records as of December 31, 2018; and, (5) Entries in the cashbooks

of the Municipal Treasurer were not consistently presented in

chronological order and did not reflect the true and accurate timing

of transactions, resulting in misleading information.

Dumaran Qualified


P36.508 million as at December 31, 2018 could not be ascertained

because it was not supported by physical inventory report, property

cards, property ledger cards, complete lapsing schedules and

updated Acknowledgement Receipt for Equipment; and,

Cash in Bank-Local Currency, Current Account totaling P97.628

million could not be ascertained due to a) non-submission of Bank

188


Reconciliation Statements of five depository accounts; b)

unidentified reconciling items between book and bank balances of

two depository accounts totaling P.689 million; c) variance between

the General Ledger balance and subsidiary records totaling P2.625

million; and d) non-reconciliation of cashbook with accounting

records.

El Nido Management Letter


Kalayaan Qualified Property, Plant and Equipment (PPE) as of December 31, 2018

was unreliable due to (a) unreconciled variance of P5.443 million

between the GL balance and report on physical inventory (b)

unrecorded donated PPE amounting to P.899 million; (c) land with

acquisition cost of P.060 million was not yet covered by certificate

of title in the name of Municipality; and (d) deficiencies in the

maintenance of property records.

Linapacan Management Letter

due to non-submission of financial documents for CY 2018

Magsaysay Disclaimer

Failure to maintain the General Ledger and Subsidiary Ledgers for

CY 2018 thus, the correctness of all assets, liability, equity, revenue

and expense accounts totaling P167.827 million, P77.245 million,

P90.582 million, P60.844 million and P42.291 million, respectively,

could not be ascertained; and,

Failure to prepare the Consolidated Financial Statement for all

funds, Notes to Financial Statements, Statement of Comparison of

Budget and Actual Amounts for General and Special Education

Fund and Statement of Cash Flows for the Trust Fund thus, limiting

the scope of our audit.

Narra Qualified Failure to conduct the physical inventory of property, plant and

equipment (PPE) totaling P227.373 million, excluding construction

in progress accounts, thus, the validity and existence of the PPE

reflected in the books as at December 31, 2018 could not be

ascertained.

Quezon Qualified Failure to conduct the physical inventory count of the Property,

Plant and Equipment (PPE) totaling P163.136 million, excluding

Construction in Progress accounts, thus, the existence,

completeness and valuation of the PPE reflected in the books as

at December 31, 2018 could not be ascertained.

Rizal Adverse Non-reconciliation of physical inventory count against the recorded

Property, Plant and Equipment (PPE) totaling P311.580 million,

excluding Construction in Progress accounts;

Material misstatement of the financial statements due to: a)

unrecorded bank reconciling items totaling P57.167 million; b)

unrecorded unexpended portion of the Local Disaster Risk

189


Reduction and Management Fund (LDRRMF) for CYs 2015, 2017

and 2018 amounting to P3.873 million, P4.632 million and P6.364

million, respectively, or a total of P14.869 million; c) unrecorded

balance of the First Consolidated Bank (FCB) bank account

amounting to P.554 million; and d) failure to recognize the 75% of

the Local Road Network Systems;

Weakness of internal control that resulted to: (a) material

differences between the Cashbooks and Subsidiary of the Cash-in-

Bank and Cash in Local Treasury accounts of P44.920 million and

P16.502 million, respectively; and (b) insufficient cash backup in

the adjusted General Fund Proper bank balance of P43.017 million

as against the amount to be transferred to the 20% Development

Fund and Special Trust Fund of the LDRRMF amounting to

P44.864 million and P14.869 million, respectively, or a cash

deficiency of P16.716 million; and,

Non-submission of the Bank Reconciliation Statements for all bank

accounts from CYs 2003 to 2015.

Roxas Qualified


P369.323 million as at December 31, 2018 could not be

ascertained because it was not supported by physical inventory

report and complete and accurate property cards.

San Vicente Disclaimer

Asset account balances totalling P580.788 million or 76% of the

total assets and liabilities account balances totalling P68.912

million or 29% of the total liabilities were not supported with

adequate accounting records and subsidiary ledgers that did not

permit the application of alternative audit procedures.

Sofronio Española Qualified Property, Plant and Equipment (PPE), excluding Land and Land

Improvements and Construction in Progress, valued in the books

with net amount of P67.482 million were doubtful due to the (a)

continued inability of the Municipality to complete physical

inventory and to maintain property cards contrary to the provisions

of the Manual on the New Government Accounting System (NGAS)

for LGUs, and (b) erroneous computation of depreciation

expenses.

Taytay Qualified Real Property Tax (RPT) Receivable and Special Education Tax

(SET) Receivable as well as their corresponding deferred income

accounts amounting to P42.499 million and P46.001 million,

respectively, as of December 31, 2018 could not be ascertained

because the amount of RPT and SET Receivables established at

the beginning of the year were not based on the Real Property Tax

Account Register/Taxpayer’s Index Card showing the total amount

due and collectible from the taxpayers;

Disparity of P4.423 million in the balances of reciprocal accounts

Due from Other Funds and Due to Other Funds valued at

190


P49.213 million and P44.790 million, respectively, as of December

31, 2018 rendered these account balances unreliable;

Inventories totaling P4.510 million and Property, Plant and

Equipment accounts with net book value of P226.089 million as of

December 31, 2018 could not be ascertained because it was not

supported by physical inventory reports duly reconciled with

supplies and property ledger cards.

Romblon Qualified Inventories and Property, Plant and Equipment (excluding

Construction in Progress accounts) with net book value of P4.302

million and P1.603 billion, respectively, as of December 31, 2018,

could not be ascertained due to the non-submission of the required

reports;

Dormant/non-moving Inventory accounts totaling P22.046 million

were dropped in the books million.

Municipalities

Alcantara Qualified Failure to submit the Report on the Physical Count of Inventories

(RPCI) and Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) to support the Inventories and Property,

Plant and Equipment valued at P.694 million and P103.475 million,

respectively, as of end of the year.

Banton Qualified Inventories and Property, Plant and Equipment (excluding

Construction in Progress accounts) with net book value of P1.406

million and P79.886 million, respectively, as of December 31, 2018,

could not be ascertained due to the non-submission of the required

reports.

Cajidiocan Qualified PPE and Inventory accounts with net book values of P133.997

million and P1.536 million, respectively, as of December 31, 2018

could not be ascertained due to non-conduct of physical count;

Accounts Payable account of P3.298 million as of December 31,

2018 includes payables without valid supporting documents

totaling P3.136 million, thereby overstating the account by the

same amount; and,

Cash and Cash Equivalents of P197.247 million as of December

31, 2018 is understated by P1.554 million due to unrecorded book

reconciling items.

Calatrava Qualified Property, Plant and Equipment (PPE) account as of December 31,

2018 amounting to P77.724 million, could not be ascertained due

to failure of the Municipality to conduct an actual physical inventory

of the Municipality’s property and reconcile the same with

accounting record; and,

191


Directly charged all regular purchases of supplies and materials in

the total amount of P.642 million to expense accounts, instead of

booking them up through inventory account.

Concepcion Qualified Failure to reconcile the individual balances of bank accounts with

that of the General Ledger, which rendered the balance of Cash in

Bank-Local Currency, Current account as of December 31, 2018

totaling P75.944 million, unreliable;

Inventory account as at December 31, 2018 could not be

ascertained because the Municipal Accountant directly charged all

regular purchases of supplies and materials in the total amount of

P1.236 million to expense accounts, instead of booking them up

through inventory account; and,

Property, Plant and Equipment (PPE) account as at December 31,

2018 amounting to P53.653 million, could not be ascertained due

to failure of the Municipality to conduct an actual physical inventory

of the municipality’s property and reconcile the same with

accounting records.

Corcuera Unqualified

Ferrol Qualified Inventory and Property, Plant and Equipment (PPE) accounts as of

December 31, 2018 amounting to P.844 million and P67.425

million (net of accumulated depreciation and excluding Land and

Construction in Progress), respectively, were not supported with

complete and accurate Report on the Physical Count of Inventories

(RPCI) and Report on the Physical Count of PPE (RPCPPE).

Looc Qualified Failure to submit the Report on the Physical Count of Inventories

(RPCI) and Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) to support the Inventories and Property,

Plant and Equipment (PPE) valued at P8.320 million and P34.554

million, respectively, as of end of the year,;

Lapses in the setting up of Real Property Tax Receivable and

Special Education Tax Receivable accounts at the beginning of the

year, rendering the balances of both accounts and the

corresponding contra accounts overstated as of end of the year;

and,

Lapses in the preparation of monthly Bank Reconciliation

Statements (BRS), rendering the consolidated balance of Cash in

Bank – Local Currency as of December 31, 2018 amounting to

P84.140 million unreliable.

Magdiwang Unqualified

192


Odiongan Qualified Property, Plant and Equipment (PPE) account as of December 31,

2018 amounting to P169.324 million could not be ascertained due

to: a) failure of the Municipality to conduct a complete physical

inventory of the municipality’s property and reconcile same with the

accounting record; b) erroneous recording of progress billings and

final payment for infrastructure projects to Due to NGAs account

instead of appropriate Construction in Progress account; c)

Transfer from Trust Fund to General Fund of Disaster Response

and Rescue equipment amounting to P4.990 million was not taken

up in the General Fund books; and, d) failure to support the

computation of depreciation with lapsing schedule.

Romblon Qualified Property, Plant and Equipment (PPE) of P110.386 million

(exclusive of Construction in Progress) as of December 31, 2018

was unreliable as to their existence, completeness and valuation

due to the failure of the management to conduct physical count of

PPE; and,

Due from/to Other Funds as of December 31, 2018 of P.333 million

and P3.515 million, respectively, remained unreconciled, thus,

rendered the account balances unreliable as of year-end.

San Agustin Qualified Inventory and Property, Plant and Equipment (PPE) as of

December 31, 2018 amounting to P.889 million and P72.966

million (net of accumulated depreciation), respectively, cannot be

ascertained due to incomplete physical count of the properties of

the Municipality.

San Andres

Adverse Property, Plant and Equipment (PPE) account as of December 31,

2018 amounting to P147.219 million, which represents 62% of

LGUs total assets is unreliable due to: a) failure of the Municipality

to conduct physical inventory of the Municipality’s property and

reconcile the same with accounting record; b) transfer from Trust

Fund to General Fund of Motor Vehicles and Disaster Response

and Rescue Equipment amounting to P6.970 million and P.132

million, respectively, were not taken up in the General Fund books;

c) PPE accounts recorded in the Trust Fund books totaling P4.406

million were not transferred to the General Fund books; d)

completed projects recorded under Construction in Progress(CIP)

account in the SEF and Trust Fund books amounting to at least

P25.613 million were not transferred to appropriate asset account;

and e) allowance for depreciation was not provided for depreciable

assets.

San Fernando Qualified

PPE and Inventory accounts as compared with the balance per

report on the physical count have net discrepancy of P.260 million

and P.430 million, respectively, as of December 31, 2018 thereby

casting doubt on the accuracy and reliability of the presented

balances in the financial statements;

193


Due to NGAs account of P.107 million as of December 31, 2018

was misstated due to the inclusion of items that do not share the

nature of a fund transfer from NGAs and the exclusion of legitimate

fund transfers from NGAs amounting to P12.645 million that were

improperly recorded under Other Payables account; and,

Accounts Payable account of P3.726 million as of December 31,

2018 includes payables without valid supporting documents

totaling P.811 million thereby overstating the account by the same

amount.

San Jose Qualified

Failure to submit the financial reports pertaining to years 1994 to

2002, rendering the forwarding balances of all accounts unreliable;

b) Failure to identify and adjust the unreconciled difference

between the book and bank balances of Cash in Bank accounts,

rendering the consolidated balance as of December 31, 2018

amounting to P42.613 million unreliable; c) failure to strictly

observe the guidelines in the grant, utilization and liquidation of

cash advances , resulting to accumulation of unliquidated cash

advances as of December 31, 2018 in the amount of P20.232

million; and d) failure to provide allowance for depreciation on

Infrastructure Assets totaling to P14.326 million, thus, overstating

the Asset and Government Equity account balances and rendering

the accuracy of the financial statements doubtful and unreliable.

Santa Fe Qualified

Inventory and Property, Plant and Equipment (PPE) as of

December 31, 2018 amounting to P2.222 million and P130.380

million (net of accumulated depreciation), respectively, cannot be

ascertained due to the failure of the Municipality to conduct physical

count of the properties at year-end.

Santa Maria Qualified

Failure to identify and provide the details of Property, Plant and

Equipment (PPE) costing P5.679 million and prepare the Inventory

and Inspection Report of Unsercieable Property (IIRUP) for

unserviceable properties, thus, rendering the management’s

assertion on the validity, existence and correctness of the reported

balances of PPE accounts, unreliable and exposing those PPE to

further deterioration and loss of the value thereof.

REGION V – Bicol Region

Albay Unqualified

Cities

Legazpi City Unqualified

Ligao City Qualified

Property, Plant and Equipment (PPE) account cannot be

ascertained due to the variance of P117.190 million between the

recorded balance and the balance per Report on the Physical

Count of PPE; and,

194


Cash-in-Bank-Local Currency, Current Account is overstated by

P0.740 million due to unrecorded long outstanding reconciling

items amounting to P0.540 million (debits) and P1.290 million

(credits).

Tabaco City Qualified

Property, Plant and Equipment (PPE) account as of December 31,

2018 cannot be relied upon due to the inability of the City

Government to: (a) reconcile PPE account balances between the

accounting records and the RPCPPE resulting in a discrepancy of

P76.290 million; and (b) secure title of ownership for the 124 lots

with a total market value of P168.820 million, exposing the said real

properties to risk of third party claim;

Receivable account of P4.700 million as of December 31, 2018 is

unreliable as the Real Property Tax (RPT) and the Special

Education Tax (SET) Receivables were not established at the

beginning of each year due to the absence of Certified List from the

City Treasurer and non-recording of delinquent receivables from

market stall holders amounting to P3.0 million; and,

Payable accounts totaling P27.680 million to surplus account could

not be substantiated due to the absence of documents to

validate/support the entries made.

Municipalities

Bacacay Qualified

Property, Plant and Equipment (PPE) accounts with a net book

balance of P262.630 million as of December 31, 2018, which

comprise 40.57 percent of its total assets of P647.290 million could

not be ascertained due to the repeated inability of the Municipality

to conduct a complete physical inventory of all its properties,

maintain PPE inventory records and prepare and/or submit the

complete Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) at year-end.

Camalig Qualified

Property, Plant and Equipment (PPE) accounts valued at P16.140

million could not be ascertained due to the unreconciled balance of

P15.700 million due to inability by both the Accounting and Property

Units to regularly reconcile their records; and parcels of land

totaling P9.440 million are not yet registered in the name of the

Municipality.

Daraga Qualified

Property, Plant and Equipment (PPE) accounts valued in the books

at P731.520 million could not be ascertained due to the

unreconciled balance of P174.580 million, which comprises 13.85

per cent of the total assets of P1.280 billion, because the Municipal

Accountant and Property Officer were not able to reconcile their

records; and,

195


Due from and Due to Other Funds, were not reconciled, with a

variance of P14.300 million, due to errors in the recording of

transactions involving transfers of funds.

Guinobatan Qualified

Property, Plant and Equipment (PPE) accounts valued at P393.070

million could not be ascertained due to the unreconciled balance of

P15.700 million due to inability by both the Accounting and Property

Units to regularly reconcile their records; and parcels of land

purchased in CY 2018 totaling P17.090 million are not yet

registered in the name of the Municipality.

Jovellar Qualified


at P101.700 million at year end, could not be ascertained due to

the inability of Management to complete the physical inventory,

reconcile Accounting and Property records and finally submit the

report thereon to the Audit Team, thus, rendered the PPE account

balances unreliable.

Libon Qualified

Property, Plant and Equipment (PPE) account cannot be

ascertained due to the variance of P120.860 million between the

recorded balance and the balance per Report on the Physical

Count of PPE; and,

Cash-in-Bank-Local Currency, Current Account is overstated by

P2.770 million due to unrecorded long outstanding reconciling

items amounting to P2.810 million (debits) and P5.580 million

(credits).

Malilipot Qualified


2018 amounting to P180.130 million cannot be relied upon due to

the inability of the Municipal Government to: (a) reconcile PPE

accounts balances between the accounting records and the

RPCPPE resulting in a discrepancy of P18.820 million; (b) secure

title of ownership for the 16 lots with a total market value of P71.110

million or assessed value of P11.250 million exposing the said real

properties to risk of third party claim; and (c) provide depreciation

for its depreciable real properties with a reported book value of

P140.120 million, resulting in understatement of the expense and

overstatement of both the asset and equity accounts;

Accounts Receivables of P4.730 million as of December 31, 2018

is unreliable due to the: (a) none establishment of Real Property

Tax (RPT) and the Special Education Tax (SET) Receivables of

P1.780 million at the beginning of the year; (b) unrecorded prior

years’ receivables from RPT/SET, Market Stall Rental and Water

System amounting to P26.880 million, P116,820 and P0.770

million, respectively; and (c) unrecorded collectibles from the

Commission on Higher Education (CHED) for the School Year

2018 totaling to P25.970 million; and,

196


The correctness of Inventories amounting to P2.620 million cannot

be relied upon due to the unreconciled amount of P2.510 million

against the Report of Physical Count of Inventories (RPCI).

Malinao Qualified


2018 cannot be relied upon due to the inability of the Municipal

Government to: (a) to conduct physical count of its properties; (b)

secure title of ownership for the 32 lots with a total market value of

P177.640 million exposing the said real properties to risk of third

party claim; (c) reconcile PPE account balances between the

accounting records and the RPCPPE resulting in a discrepancy of

P21.360 million; and (d) provide depreciation on properties with

book value totaling P98.350 million, understating the expense and

overstating the asset and equity accounts;

Cash in Bank - Local Currency-Current Account – Trust Fund

amounting to P12.360 million is unreliable due to unrecorded bank

reconciling items totaling P5.660 million; and,

Real Property Tax (RPT) and the Special Education Tax (SET)

Receivables amounting to P.495 million is unreliable as the CY

2018 receivables totaling P2.620 million was not established at the

beginning of the year due to the absence of Certified List from the

Municipal Treasurer and non-recording of prior years’ delinquent

property tax receivables.

Manito Qualified


at P230.960 million (except Construction in Progress accounts)

could not be ascertained due to the unreconciled balance of P1.740

million between the Accounting and Property records, which

comprises 0.44 per cent of the total assets.

Oas Qualified

Property, Plant and Equipment account cannot be ascertained due

to the variance between the recorded balance and the balance per

Report on the Physical Count PPE, of P37.870 million which

comprises 7.73 per cent of the total assets of P490 million; and,

Failure to conduct physical inventory of its Supplies totaling P4.180

million as of December 31, 2018, which comprises 0.85 percent of

the total assets for the same period.

Pio Duran Qualified



unreconciled balance of P3.420 million, which comprises 1.25 per

cent of the total PPE, for the inability of the Municipal Accountant

and Property Officer to reconcile the records of these accounts.

Polangui Qualified

Property, Plant and Equipment (PPE) account valued in the books


unreconciled balance of P35.930 million, which comprises 5.64 per

197


cent of the total PPE, for the inability of the Municipal Accountant

and Property Officer to reconcile the records of these accounts;

and,

Unreconciled reciprocal accounts in Due to and Due from, showing

a variance of P4.420 million as of year end.

Rapu-Rapu Unqualified

Santo Domingo Qualified


P147.050 million which represents 62.73 per cent of the total

assets is unreliable due to the unreconciled difference of P33.410

million with the Report on the Physical Count of Property, Plant and

Equipment (RPCPPE); and,

Cash in Bank account as at December 31, 2018 amounting to

P41.14 million is doubtful because of the absence of monthly Bank

Reconciliation Statements of the current bank accounts of the LGU.

Tiwi Qualified


2018 amounting to P260.310 million cannot be relied upon due to

the inability of the Municipal Government to: (a) reconcile PPE

account balances between the accounting records and the

RPCPPE resulting in a discrepancy of P30.660 million; and (b)

secure title of ownership for the 66 lots with a total market value of

P156.990 million exposing the said real properties to risk of third

party claim; and,

Real Property Tax (RPT) and the Special Education Tax (SET)

Receivables totaling to P1.040 million as of December 31, 2018 is

unreliable due to the none establishment of CY 2018 Real Property

Tax (RPT) and the Special Education Tax (SET) Receivables at the

beginning of the year and the unrecorded prior years’ RPT/SET

receivables amounting to P3.980 million.

Camarines Norte Qualified Property Plant and Equipment (PPE) account of the Province has

a variance of P3.410 million between the accounting records and

the submitted Report on the Physical Count of Property, Plant and

Equipment (RPCPPE); and,

Accounting Subsidiary Ledger balance of Cash account under

Local Currency Current Account (LCCA) has a variance totaling

P58.670 million when compared with balances per cashbook of the

Provincial Treasury Office (PTO).

Municipalities

Basud Qualified Due to non-reconciliation of the Report of Physical Count of

Property, Plant and Equipment (RPCPPE) of the Municipality with

the recorded PPE accounts in the General Ledger (GL) as of

198


December 31, 2018 having a variance of P12.250 million, thus, the

reliability and accuracy of PPE accounts in the Financial

Statements as of year-end could not be ascertained.

Capalonga Qualified Out of the P196.140 million worth of Property, Plant, and Equipment (PPE), P40.390 million (excluding depreciation) were impaired as at December 31, 2018 due to inability of the Management to reconcile physical PPEs and records and the books; and unidentifiable old PPEs in the books from prior years due to lack of records.

Daet Qualified Due to the non-preparation of a prescribed complete and accurate report on the physical count of all its inventories and PPE and their non-reconciliation with the recorded Inventories and PPE accounts (excluding Land, Land Improvements, Building and Other Structures and Construction in Progress) as of December 31, 2018 having a variance of P1.050 million and P59.950 million, respectively.

Jose Panganiban Qualified Out of the P127.820 million worth of Property, Plant, and

Equipment (PPE), P34.16 million (excluding depreciation) were

impaired as at December 31, 2018 due to inability of the

Management to reconcile physical PPEs and records and the

books; and unidentifiable old PPEs in the books from Calendar

Year 2003 and below due to lack of records;

Differences in the balances of Real Property Tax (RPT) and Special

Education Tax (SET) Receivables, and their Deferred Income

counterparts totalling P2.450 million and P2.140 million,

respectively, due to inadvertent erroneous accounting treatment,

non-setup of RPT and SET Receivables for various years, and non-

reconciliation of entries between process owners.

Unverifiable Inventory Accounts and Breeding Stocks Account

totalling P1.790 million and P.287 million due to non-reconciliation

between physical inventory and book records and non-conformity

for the required procedures and accounting for the procurement

and utilization of supplies; and,

Unverified and unrecorded expenditure totalling P.532 million due

to non-submission of Disbursement Vouchers by the Municipal

Treasurer to the Municipal Accountant.

Labo Qualified Due to (a) unreconciled balance amounting to P11.120 million

between the Report on the Physical Count of PPE (RPCPPE) and

the recorded PPE in the books, excluding Land and Land

Improvements, Infrastructure Assets, Buildings and other

Structures and Construction in Progress accounts; and (b) variance

amounting to P.228 million and P100.740 million in the land

account balances taken up in the books as compared with the

records in the General Services Office and Office of the Municipal

Assessor, respectively.

199


Mercedes Qualified PPE accounts (excluding Land, Land Improvements, Buildings and

Other Structures and Construction in Progress) in the books as of

December 31, 2018 totalling to P79.770 million could not be

ascertained due to non-reconciliation with submitted Report of


totalling P122.380 million, thus, resulted to a variance of P42.610

million; and,

Inventory accounts in the books as of December 31, 2018 with total

book value totalling to P2.720 million could not be ascertained due

to non-preparation of a complete and accurate report of Report of

Physical Count of Inventories (RPCI).

Paracale Qualified Unverifiable Property, Plant and Equipment (PPE) totaling P69.570

million (excluding depreciation) in the books as at December 31,

2018 due to unreconciled PPEs and non-computation of

depreciation expense;

Abnormal balance of Government Equity Account in the Trust Fund

(TF) totaling P66.580 million;

Non-classification of current and non-current Loans Payable

currently included in the Financial Liabilities under Current Asset

as at December 31, 2018;

Irregular balance of Real Property Tax (RPT) and Special

Education Tax (SET) Receivables amounting to P1.610 million and

P14.620 million respectively as at December 31, 2018; and,

Major repairs from Calendar Year (CY) 2017 totaling P8.280 million

were not yet capitalized as at December 31, 2018.

San Lorenzo Ruiz Qualified Due to the non-preparation of a prescribed complete and accurate

report on the physical count of all PPE and its non-reconciliation

with the accounting records as of December 31, 2018 having a

variance of P3.440 million.

San Vicente Qualified Due to the (a) inability of the management to properly observe the

regular conduct of physical inventory taking of PPE and conduct

reconciliation of records casting doubt on the existence, accuracy

and reliability of recorded PPE, P33.760 million excluding Land and

Land Improvements, Infrastructure Assets, Buildings and Other

Structures and Construction in Progress (CIP); and,

Incomplete supporting documents of the recorded disbursements

for 20 infrastructures projects, P26.120 million.

Santa Elena Qualified Out of the P221.990 million worth of Property, Plant, and

Equipment (PPE), P31.640 million (excluding depreciation) were

impaired as at December 31, 2018 due to inability of the

Management to reconcile physical PPEs and records and the

200


books; and unidentifiable old PPEs in the books from prior years

due to lack of records; and,

Unverifiable Inventory Accounts totalling P11.340 million due to

non-reconciliation between physical inventory and book records;

non-conformity for the required procedures and accounting for the

procurement and utilization of supplies and insufficiency of records

to support the presented Inventory Accounts as at December 31,

2018.

Talisay Disclaimer Failure to submit the transaction documents for the period from

January to December 31, 2018.

Vinzons Qualified Due to the (a) inability to properly observe the regular conduct of

physical inventory taking of PPE and conduct reconciliation of

records casting doubt on the accuracy and correctness of recorded

PPE amounting P37.660 million excluding Land and Land

Improvements, Infrastructure Assets, Buildings and Other

Structures and Construction in Progress; and insufficient

documentation and inadequate disclosures in the financial

statements of long outstanding receivables classified as current

assets amounting to P7.590 million.

Camarines Sur Qualified Inventory accounts totaling P261.330 million cannot be ascertained

due to the absence of the Report on the Physical Count of

Inventories (RPCI) while property and accounting records of

Property, Plant and Equipment (PPE) were not reconciled by

P36.130;

Discrepancies with a net amount of P34.0150 million existed

between the balances per books and the balances per bank of the

Cash-in-Bank-LCCA and Cash-in-Bank-FCCA due to the non-

recording of fund transfers; and,

Cash advances totaling P66.250 million remained outstanding as

of December 31, 2018, resulting to possible overstatement of

assets and government equity accounts.

Cities:

Iriga City Qualified Cash in Bank - Local Currency, Current Account (LCCA) balances

with an aggregate amount of P164.948 million as of December 31,

2018 could not be relied upon due to unrecorded/unadjusted

reconciling items pertaining to CY 2018 and prior years in the total

amount of P2.979 million (additions) and P68.972 million

(deductions);

Paid Disbursement Vouchers (DVs) and related supporting

documents in CY 2018 and prior years totaling P58.600 million

201


were not submitted, thus raising doubts as to validity, legality,

existence and correctness of the transactions; and,

Accounts Payable and Other Payables accounts totaling P44.900

million were not adequately supported with complete

documentation, proper aging, and adequate disclosure in the

financial statements, thus, the correctness and validity of these

obligations cannot be ascertained.

Naga City Qualified Understatement of cash in bank accounts totalling P1.180 billion by

P21.630 million when compared with the confirmed bank balances

of P1.206 billion as at year end;

Overstatement by P35.720 million of the Inventory accounts; and,

Discrepancy amounting to P3.230 billion between the accounting

and property records of Property, Plant and Equipment existed as

of December 31, 2018 due to incomplete actual physical.

Municipalities:

Baao Qualified Projects not yet started amounting to P31.290 million were

recorded to Construction in Progress and Accounts Payable

accounts thereby overstating both asset and liability accounts by

the same amount.

Balatan Qualified Cash in Bank–Local Currency, Current Account year-end balance

of P60.308 million for all funds was understated due to unrecorded

deposits amounting to P10.270 million; and,

Property and accounting records had a variance of P70.333 million

valued at gross book value. The discrepancy could not be

reconciled due to the absence of updated PPE records and reports.

Bato Qualified Receivable and equity accounts were overstated by P5.906 million

because cash advances granted more than 31 days to over three

years remained unliquidated despite completion of purpose thus

failing to recognize expenses in the period/s to which they relate;

and,




Bombon Qualified No physical count of supplies and materials was conducted, thus

the validity and existence of recorded Inventory accounts totaling

P3.977 million cannot be relied upon.

Buhi Qualified Past due cash advances in the amount of P9.836 million were not

liquidated despite completion of purpose failing to recognize

expenses on the period to which they relate, overstating assets and

equity accounts by the same amount;

202


Unadjusted reconciling difference understated the Cash in Bank–

LCCA account by P4.823 million;


Receivables for CY 2018 were understated by approximately

P6.800 million;

Variance of P61.590 million between the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and accounting

records for the PPE accounts; and,

Paid disbursement vouchers and the related support documents

totaling P12.277 million were not submitted for audit.

Bula Qualified Property and accounting records had a variance of P30.210 million


reconciled due to the absence of updated PPE inventory reports

and ledger cards.

Cabusao Qualified Receivables and equity accounts were overstated by P4.210 million as cash advances have remained unliquidated despite completion of purpose for over 31 days to more than three years, thus failing to recognize expenses in the period to where they relate;

Fuel, Oil and Lubricants Inventory reflected a balance of P0.950 million despite issuance or consumption thereof resulting to overstatement of the inventory account; and,

Property and accounting records had a variance of P28.190 million valued at gross book value. The discrepancy could not be reconciled due to the absence of updated PPE records and reports.

Calabanga Qualified Various entries totaling P2.262 million were improperly recorded as

deductions to the Cash-Local Treasury (1-01-01-010) account

understating this account by the same amount;

Bank reconciling items totaling P1.394 million were continuously

not adjusted/recorded in the books, thereby overstating the Cash

in Bank-Local Currency, Current Account (1-01-02-010); and,

Due from Other Funds (1-03-04-050) and Due to Other Funds (2-

03-01-010), in the amount of P14.293 million and (P13.787 million),

respectively, were not reconciled by P28.080 million and without

Subsidiary Ledgers (SL).

Camaligan Qualified Disbursements totaling P4.503 million were not recorded

understating the related expense and/or asset accounts;

Receivables and Equity accounts were overstated by P1.287

million because cash advances for travel have remained

unliquidated despite completion of purpose for over a year to more

than three years;

203


General ledger and Subsidiary ledger balances of one asset and

two liability accounts were not reconciled by P5.836, thus casts

doubt on the accuracy and reliability of the recorded balances in

the financial statements; and,

Property, Plant and Equipment (PPE) accounts cannot be

ascertained because movable properties in the amount of P25.748

million were not supported with property ledger cards, inventory

reports and other records.

Canaman Qualified Cash Advances granted for over a year totaling P1.068 million

remained unliquidated despite completion of purpose or execution

of related activities, thus failing to recognize expenses in the

periods to which they relate and overstating receivables and equity

accounts;

Property, Plant and Equipment (PPE) valued in the books at

P11.785 million as of December 31, 2018 cannot be ascertained

due to the absence of updated and/or complete PPE reports and

records; and,

Accounts Payable totaling P4.978 million were set-up for services

not yet rendered, resulting to the overstatement of the Accounts

Payable, CIP-Infrastructure Assets and CIP-Building and Structure

accounts.

Caramoan Qualified Cash advances totaling P2.498 million had long been spent yet

remain unliquidated as of December 31, 2018 overstating the

assets and equity by the same amount; and,

Property, Plant and Equipment (PPE) in the amount of P34.459

million (excluding Construction in Progress) could not be

ascertained due to the absence of updated PPE inventory reports

and records.

Del Gallego

Unqualified

Gainza Qualified Various entries totaling P3.193 million were erroneously recorded

in the Cash-Local Treasury account, thereby overstating the said

account;

Due from Other Funds and Due to Other Funds, in the amount of

P47.222 million and P19.957 million, respectively, were not

reconciled by P27.265 million; and,

Fund transfer from DILG for the Salintubig Project amounting to

P10.000 million for CY 2018 was recorded twice in the books of the

LGU, thus, overstating the Due to NGAs account by the same

amount.

204


Garchitorena Qualified Payables totaling P19.481 million could not be substantiated

hence, liability accounts were overstated; and,




and records.

Goa Qualified Cash advances totaling P20.524 million had long been spent yet


assets and equity accounts;

Payables totaling P34.800 million could not be substantiated

hence, liability accounts were overstated;

Disbursement vouchers and corresponding supporting documents

totaling P83.961 million were not submitted for audit, thus, the

validity, accuracy and propriety of the transactions were not

validated; and,




and records.

Lagonoy Qualified Cash advances totaling P20.524 million had long been spent yet



Payables totaling P34.800 million could not be substantiated

hence, liability accounts were overstated;




validated; and,




and records.

Libmanan Qualified Welfare Goods for Distribution totaling P.389 million was reported

as inventory as of December 31, 2018, despite issuance to end-

users, overstating the account and understating its corresponding

expense account; and,




205


Lupi Qualified Land (1-07-01-010) and Government Equity (3-01-01-010)

accounts were understated by P4.094 million due to the non-

recording of nine (9) parcels of land with valid ownership

documents and recording of four (4) parcels of land at lower than

purchase cost/market value hence understating Assets and

Government Equity;


P79.578 million (excluding Construction in Progress account of

P2.049 million) could not be ascertained due to the absence of

updated PPE inventory reports and ledger cards.

Magarao Qualified Receivables and equity accounts were overstated by P1.607

million because cash advances for travel have remained

unliquidated despite completion of purpose for over a year to more

than three years, thus failing to recognize expenses in the period/s

to which they relate; and,

Property, Plant and Equipment (PPE) accounts cannot be

ascertained because movable properties in the amount of P10.829

million were not supported with property ledger cards, inventory

reports and other records.

Milaor Qualified Cash Advances granted for over a year totaling P1.768 million




accounts; and,




records.

Minalabac Qualified Cash Advances granted for over a year totaling P4.262 million




accounts; and,




records.

Nabua

Qualified

Receivable and equity accounts were overstated by P8.373 million

because cash advances remained unliquidated despite completion

of purpose thus failing to recognize expenses in the period/s to

which they relate; and,

206


Property and accounting records had a variance of P226 million


reconciled due to the absence of updated PPE reports and records.

Ocampo Qualified Completed projects and procurement of tools/equipment

amounting to P12.977 million were not recognized in the books

resulting in the understatement of the related PPE and government

equity accounts; and,

No physical inventory of supplies and inventory was conducted,

thus validity and existence of Inventory accounts amounting to

P9.721 million cannot be relied upon; and (c) property and

accounting records on movable properties were not reconciled by

P11.157 million.

Pamplona Qualified Biological Assets and Other Structures costing P0.805 million were

not recognized in the books understating the accounts; and,




Pasacao Qualified Cash advances totaling P5.960 million remained unliquidated as of

year-end despite completion of purpose or execution of related

activities thus failing to recognize expenses in the period/s to which

they relate and overstating the receivable and equity accounts by

the same amount;

Expenditures totaling P0.425 million were not recorded in the

books overstating Cash in Bank-LCCA and understatement of

other related accounts; and,


P180.348 million (excluding Construction in Progress account of

P28.437 million) were not supported with inventory reports and

ledger cards.

Pili

Qualified

Cash, receivable and equity accounts were overstated by P5.936

million because cash advances remained unliquidated despite

completion of purpose, thus failing to recognize expenses in the

period/s to which they relate;

Eighty nine disbursement vouchers totaling P2.884 million were not

submitted nor recorded in the books overstating Cash in Bank-

LCCA and related accounts; (c) asset and equity accounts were

overstated by P5.197 million because expenses were not

recognized upon issuance of inventories; and,

207


Movable Property, Plant, and Equipment (PPE) valued in the books

at P69.208 million cannot be ascertained due to the absence of

updated PPE ledger cards, property cards, and the year-end

physical inventory report.

Presentacion Qualified Cash advances totaling P8.759 million had long been spent yet






validated; and,




and records.

Ragay Qualified Land (1-07-01-010), Other Payables (2-99-99-990), and Equity (3-

01-01-010), accounts were understated by P32.810 million, P3.800

million, and P29.010 million, in order, due to non-recording of 26

parcels of land with market value/cost of P32.810 million.

Sagñay Qualified Property, Plant and Equipment (PPE) with book value of P164.010

million was not reconciled with the year-end inventory report by

P10.555 million, and lands owned by the LGU totalling P1.468

million were not recorded in the books.

San Fernando Qualified Completed infrastructure projects totaling P22.910 million sourced

from LGSF were not recognized in the books; and,




records.

San Jose Qualified Cash, receivable and equity accounts were overstated by P1.957


completion of purpose for over one year or more than three years,

thus failing to recognize expenses in the period/s to which they

relate; and,

Property, Plant, and Equipment (PPE) valued in the books at

P44.613 million cannot be ascertained due to the absence of

updated PPE ledger cards, property cards, and the year-end

physical inventory report.

Sipocot Qualified Entries prepared and posted at the end of the year to adjust the

inventory accounts totaling P2.470 million resulted to

overstatement of payable and expense accounts;

208


Fuel consumptions in the amount of P2.790 million were recorded

as outright expense overstating the related expense accounts;

Property and accounting records had a variance of P184.011

million valued at gross book value. The discrepancy could not be


Siruma Qualified Liquidation of cash advances for payment of wages of casual

employees amounting to P.306 million was not taken up in the

books of the municipality, thereby overstating the Advances for

Payroll (1-03-05-020) and understating the related expense

accounts; and,

Recorded expense on salaries and wages in the amount of

P19.543 million could not be ascertained due to lack of proper basis

in the computation and payment thereof.

Tigaon Qualified Cash, receivable and equity accounts were overstated by P8.045


completion of purpose, thus failing to recognize expenses in the

period/s to which they relate.

Tinambac Qualified Stale checks totaling P1.692 million as of December 31, 2018 were

not cancelled, thereby understating the Cash in Bank-LCCA and

Accounts Payable;

Erroneous entries amounting to P2.297 million were recorded in

the Due to BIR (2-02-01-010) account resulting to the

understatement of the account;

Due from Other Funds (1-03-04-050) and Due to Other Funds (2-

03-01-010), in the amount of P9.160 million and P3.974 million,

respectively, were not reconciled by P5.187 million; and,

Recorded expense on salaries and wages in the amount of

P36.500 million and P37.718 million for regular and job-order

employees, respectively, could not be ascertained due to lack of

proper basis in the computation and payment thereof.

Catanduanes

Qualified

Unrecorded/unadjusted reconciling items amounting to P7.110

million (additions) and P14.150 million (deductions) resulted to a

net overstatement in the Cash-in- Bank, Local Currency, Current

Account as of December 31, 2018, by P7.040 million;

Inventories totaling P67.880 million already issued but still carried

in the books of accounts, overstated the affected inventory

accounts and understated related expenditures by the same

amount; and,

209


Unreconciled variance of P99.460 million between the balances

per books and physical inventory of the Property, Plant and

Equipment (PPE) rendered the PPE balances unreliable as of year-

end.

Municipalities:

Bagamanoc Qualified Property, Plant and Equipment accounts totaling P29.900 million or

22.8 per cent of Total PPEs, representing the variance between the

total PPE per ledger and the PPE items actually counted and

verified, could not be ascertained because of inability of the LGU

to conduct complete physical count of PPE as of December 31,

2018.

Baras Adverse Property, Plant and Equipment accounts totaling P69.740 million or

65.3 per cent of Total Assets, representing the difference between

the total PPE of P106.820 million and cost of verified PPEs

amounting to P37.080 million could not be ascertained because of

inability of the LGU to conduct the physical count and submit the

RPCPPE as of December 31, 2018.

Bato Qualified Property, Plant and Equipment (PPE) amounting to P27.354 million

were not verified/substantiated because the agency was unable to

conduct physical count, submit inventory report and reconcile the

same with accounting records.

Caramoran Qualified Property, Plant and Equipment (PPE) account balances of the

difference of P46.780 million between the inventory report and

ledger balances could not be ascertained due to inability of the

Accounting and General Services Units to completely reconcile

their books.

Gigmoto Qualified Property, Plant and Equipment (PPE) amounting to P9.192 million

could not be ascertained because the agency was unable to


same with accounting records; and,

Improper accounting of collections of Special Education Tax

Revenue by P0.517 million and abnormal negative balances of

Special Education Tax Receivables and Deferred Special

Education Tax accounts.

Pandan Qualified Inability to conduct the physical inventory of its Property, Plant and

Equipment amounting to P144.560 million of which P23.820 million

was not validated by the Auditor; and,

Difference in the balance of the Cash in Bank account between the

ledger and bank records of P10.300 million as of December 31,

2018 could not be validated due to non-preparation of bank

reconciliation statement.

210


Panganiban

Unqualified

San Andres

Unqualified

San Miguel Qualified Thirteen bank accounts with a total balance of P6.665 million as of

December 31, 2018 as well as the deposits and disbursements

relative thereto were not recognized in the books of accounts; and,

Property, Plant and Equipment (PPE) amounting to P6.721 million

were not verified/substantiated because the agency was unable to


same with accounting records.

Viga

Unqualified

Virac Qualified Property, Plant and Equipment (PPE) amounting to P60.191 million

could not be ascertained because the agency was unable to

conduct complete physical count, submit inventory report and

reconcile the same with accounting records; and,

Unrecorded credit memo’s totaling P3.207 million resulting to

understatement of Cash in Bank and Government Equity accounts

Masbate

Qualified

Failure to submit complete Report on the Physical Count of

Property, Plant and Equipment (PPE), thus, the validity, existence

and condition of the Provincial Government’s properties amounting

to P453.212 million or 79.54% of the PPE subject to inventory

aggregating P569.775 million, could not be ascertained;

Non – submission of disbursement vouchers amounting to

P102.766 million or 4.48% of the disbursements totaling P2.295

billion, precluded the Auditor from determining the validity,

propriety and legality of the financial transactions;

Unable to complete the physical inventory of its Property, Plant and

Equipment (PPE) and submit the reconciled inventory report, thus,

the correctness of PPE items worth P257.921 million, which

represents 23.55% of the total PPE, were unreliable;

Construction in Progress-Buildings & Other Structures and

Government Equity accounts amounting to P9.549 million were

understated because of the agency’s inability to capitalize the

interest on the loan availed by the agency; and,

Accounts Payable worth P15.370 million could not be ascertained

due to the absence of supporting documents/valid proofs.

211


City

Masbate City Unable to complete the physical inventory of its Property, Plant and

Equipment (PPE) and submit the reconciled inventory report, thus,

the correctness of PPE items worth P257.921 million, which

represents 23.55% of the total PPE, were unreliable;

Construction in Progress-Buildings & Other Structures and

Government Equity accounts amounting to P9.549 million were

understated because of the agency’s inability to capitalize the

interest on the loan availed by the agency;


due to the absence of supporting documents/valid proofs; and,

Statement of Comparison of Budget and Actual Amounts (SCBAA)

in the financial statements showing a difference of P32.380 million

was unreliable due to non-reconciliation of records between the

budget and accounting pertaining to actual amounts and non-

provision of explanation in the notes to financial statements.

Municipalities

Aroroy Qualified Failure to conduct physical count of its inventories and was still not

able to conduct a complete physical count of all its properties and

reconcile the Property and Accounting records, thus, the existence

and condition of inventories amounting to P2.722 million and

property, plant and equipment with gross value of P66.492 million,

or at least 8.03 percent of the total gross PPE of P828.427 million,

cannot be readily ascertained; and,

Lump sum balances of various items under the assets and liabilities


respectively, were without subsidiary ledgers and schedules, thus,

the existence and correctness of the said amounts cannot be

determined.

Baleno Qualified Cash in Bank account may not be relied upon due to continuous

non-preparation of bank reconciliation statements for all bank

accounts and the agency was still not able to conduct a complete

physical count of all its properties and reconcile the property and

accounting records.

Balud Qualified Property, Plant and Equipment (PPE) accounts valued at

P155.226 million taken as a whole could not be established due to

the non-maintenance of Property Cards by the General Services

Office (GSO) and/or other documents pertaining thereto which

rendered the account balance of the Property, Plant and

Equipment Account inaccurate and/or unreliable.

212


Batuan Qualified Doubtful accuracy and reliability of the consolidated balance of the

Cash in Bank (CIB) account due to the unreconciled amount of

P4.228 million as a result of non-preparation od Bank

Reconciliation Statements (BRS) for 10 bank accounts; and,

Property, Plant and Equipment (PPE) accounts subject to physical

inventory could not e ascertained due to non-submission of the


(RPCPPE); and the PPE accounts are overstated due to non-

provision of depreciation.

Cataingan Qualified Inventories and Property, Plant and Equipment (PPE) account of

the Municipality were not established due to unreconciled

difference between the accounting records and the Report of

Physical Count of Property, Plant and Equipment; and,

Cash in Bank (CIB) account balances were of doubtful validity due

to the unreconciled difference between the book balance and the

bank statement balance which is caused by the non-preparation of

Bank Reconciliation Statement (BRS).

Cawayan Qualified Doubtful accuracy and reliability of the consolidated balance of the

Cash in Bank (CIB) accounts due to the unreconciled amount of

P13.500 million as a result of non-preparation of Bank

Reconciliation Statements (BRS) for 17 bank accounts with a total

recorded balance of P74.100 million;

Property, Plant and Equipment accounts subject to physical

inventory could not be ascertained due to non- submission of the

Report on the Physical Count of Property Plant and Equipment

(RPCPPE); and,

Due from Other Funds and Due to Other Fund, for all funds showed

a total difference of P9.670 million due to unadjusted reconciling

items.

Claveria Qualified Inability to conduct complete physical count of its properties had

unreconciled difference between the submitted report and

accounting records.

Dimasalang Qualified Land account with a total book value of P4.310 million as of

December 31, 2018 remained unreliable due to unrecorded lands

owned by the Municipality with undetermined value; and,


million remained uncertain due to submission of incomplete

inventory of PPE.

Esperanza Qualified Property, Plant and Equipment (PPE) accounts valued at



Office (GSO) and/or other documents pertaining thereto

213


Mandaon Qualified Property, Plant and Equipment (PPE) accounts valued at



Office (GSO) and/or other documents pertaining thereto.

Milagros Qualified Property, Plant and Equipment accounts with a total gross value

of P492.270 million, excluding construction in progress accounts,

could not be ascertained as the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) showed a total gross

value of P362.150 million, thereby showing a variance of P130.110

million, incomplete Property Cards and non-maintenance of Ledger

Cards by the GSO and Accounting Office.

Mobo Qualified Unable to conduct a physical count of all its properties and

reconcile the Property and Accounting Records.

Monreal Qualified Unaccounted balance of Property, Plant and Equipment due to

incomplete inventory taking of LGU assets and absence and non-

reconciliation of perpetual inventory records and P2.726 million of

PPE items comprising 1.40% of total assets are unaccounted; and,

Cash in Bank account has an unreconciled balance totalling

P12.444 million. Hence, the correctness and reliability of the cash

in bank amounting to P35.790 million, representing 18% of total

assets is doubtful.

Palanas Qualified Property, Plant and Equipment (PPE) account were not established

due to unreconciled difference of P20.700 million between the

accounting records and the Report of Physical Count of PPE; and,

Cash in Bank (CIB) account balances were doubtful due to

unreconciled difference amounting to P2.800 million between the

book balance and the bank statement balance which is caused by

the non-preparation of Bank Reconciliation Statement (BRS).

Pio V. Corpuz Qualified Property, Plant and Equipment (PPE) accounts valued at P144.564

million taken as a whole could not be established due to the non-

maintenance of Property Cards by the General Services Office

(GSO) and/or other documents pertaining thereto.

Placer Qualified Land account as of December 31, 2018 remained unreliable due to

unrecorded lands owned by the Municipality; and,

Property, Plant and Equipment, remained uncertain due to

submission of incomplete inventory of PPE and various errors in

recording transactions affecting the PPE accounts.

San Fernando Qualified The PPE items amounting to P37.661 million were not subjected to

depreciation for CY 2018 and the unaccounted balance of PPE

account amounting to P11.948 million due to the agency’s inability

to conduct the physical inventory and absence of perpetual

inventory records.

214


San Jacinto Qualified Due from Other Funds and Due to Other Funds, for all funds in the

amount of P3.934 million and P2.722 million, respectively, showed

a total difference of P1.212 million due to unadjusted reconciling

items.

Property, Plant and Equipment (PPE) accounts subject to physical

inventory totaling P7.072 million could not be ascertained due to

non-submission of the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE); and the PPE accounts totaling

P56.201 million is overstated due to non-provision of depreciation.

San Pascual

Qualified Unable to set up the Real Property Tax and Special Education

Receivable accounts and Deferred Real Property Tax and Deferred

Special Education Tax Income at the beginning of the year for CY

2018 and previous years thus, understating the receivables and

deferred credits accounts in the financial statements;

Annual physical inventory-taking was not undertaken by the

Municipality, thereby casting doubt on the existence, completeness

and accuracy of the balance of PPE accounts totaling P29.620

million (gross amount) at year-end;


due to the absence of supporting documents/valid proofs; and,

Unable to submit the disbursement and collection accounts totaling

P228.804 million, thereby rendering the validity and the validity and

propriety of the accounts doubtful.

Uson Qualified Unable to set up the Real Property Tax and Special Education Tax

Receivables accounts at the beginning of the year due to the

absence of the Real Property Tax Assessment Roll, thus

understating the receivables and deferred credits accounts in the


Annual physical inventory taking was not undertaken and

inadequate maintenance of property records, thus, the reliability

and validity of the balance of PPE items worth P126.125 million

which represents 38.70 per cent of the total PPE could not be

ascertained;

Unable to submit the Disbursement and collection accounts totaling

P186.583 million within the prescribed period, hence, the validity

of the affected financial transactions and the correctness of the

account balances of assets, liabilities and equity could not be

ascertained; and,

Statement of Comparison and Budget and Actual Amounts (

SCBAA ) in the financial statements was unreliable due to the non-

reconciliation of the budget and accounting records pertaining to

the actual amounts and the non-provision of explanation in the

notes to financial statements

215


Sorsogon Qualified Property, Plant and Equipment (PPE) accounts is doubtful due to

the discrepancy amounting to P342.220 million between the

accounting and property records and lack of information to

substantiate the balances;

Direct recording of the on-going construction of infrastructure

projects amounting to P33.770 million to the respective PPE

accounts and not to the Construction in Progress (CIP) accounts

overstated the said PPE accounts and understated the CIP

accounts;

Unreliability of the receivable accounts aggregating P31.620 million

due to the undocumented dormant accounts for more than 10

years; and,

Overstatement of P2.640 million in the Cash in Bank – LCCA

accounts due to the continuous non-adjustment of reconciling

items because of the Provincial Accountant’s Office (PAccO)

inability to provide the necessary supporting documents.

City

Sorsogon City Qualified Property, Plant and Equipment (PPE) account balance is unreliable

because (a) four parcels of land owned by the City are undervalued

by P13.190 million while three parcels valued at P68.890 million

remain unrecorded in the books; (b) unserviceable properties for

disposal costing P76.060 million have not been disposed and are

still recorded in the books; (c) 198 untitled real property units

(RPUs) with tax declarations in the name of the City Government

were not recognized as PPE in the books since ownership is still to

be verified; and, (d) PPE balances per books and per Report on the

Physical Count of PPE (RPCPPE) are unreconciled by P24 million;

Cash in Bank reconciling items amounting to P.970 million (net)

remain unadjusted in the books of accounts;

Due to National Government Agencies (NGAs) account between

the City’s books and the books of the source agencies’ (SAs) books

are unreconciled by P14.490 million.

Municipalities

Barcelona Qualified Allowance for depreciation amounting to P8.630 million was not

recognized which resulted in overstatement of total asset and total

equity in the same amount; and,

Unable to conduct a complete physical count of all its PPE and

prepare a report thereon, thus, the existence of Property, Plant and

Equipment (PPE) amounting to P32.860 million cannot be relied

upon.

216


Bulan Qualified Unreconciled variance of P88.550 million between the General

Ledgers (GL) and the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE), rendered doubtful the accuracy

and reliability of the reported PPE accounts balance;

Inability to maintain detailed information to support the accuracy,

existence and validity of the reported liability accounts of P218.540

million casted doubt on the fair presentation of related accounts in

the Financial Statements;

Receivable accounts amounting to P158.120 million are not

supported with complete subsidiary ledger thus casted doubt on

the validity of the figures reported in the financial statements; and,

Cash in Bank – Local Currency, Current Account balance of

P108.560 million is unreliable due to numerous deficiencies and

reconciling items that remain unadjusted.

Bulusan Qualified PPE balances per book and per RPCPPE were unreconciled by

P15.70 million;

Discrepancy of P2.080 million between SL and BS were unreliable

due to non-preparation of BRS and book reconciling items of P.206

million in the CIB-LCCA remained unadjusted; and,

Trust Liability - DRRMF was understated by P2.120 million

because of erroneous recording.

Casiguran Qualified PPE account balance is unreliable because (a) Construction in

Progress (CIP) account balance and the total cost of ongoing

projects at year-end are unreconciled by P62.020 million; and (b)

PPE balances per books and per RPCPPE are unreconciled by

P30 million; and,

Unrecorded check disbursements and stale checks amounting to

P20.240 million and P1.850 million, respectively, remain

unadjusted in the books of accounts.

Castilla Unqualified

Donsol Qualified Variance of P13.460 million in the PPE records between the books

and the RPCPPE casted doubt on the accuracy and reliability of

Municipality’s Property, Plant and Equipment (PPE); and,

Cash accounts cannot be ascertained due to (a) unaccounted and

unreconciled difference of P.256 million between the ledger and

the cashbook of Cash – Local Treasury account balances; (b)

unaccounted and unreconciled difference of P4.220 million

between the ledger and the cashbook of Cash in Bank account

balances; and (c) non-preparation of the CY 2018 monthly Bank

Reconciliation Statements for Special Education Fund and Trust

Fund.

217


Gubat Unqualified

Irosin Unqualified

Juban Qualified Unreconciled PPE balances between the General Ledger and the

Report on the Physical Count of Property, Plant and Equipment by

P4.360 million;

Uncollected receivables amounting to P2.660 million raised doubts

on the accuracy and reliability of these records and fair

presentation of related accounts in the Financial Statements; and,

Reconciling items which remained unadjusted for more than eight

years overstated the reported Cash in Bank, Local Currency –

Current Account (LCCA) balance by as much as P.990 million.

Magallanes Qualified PPE account balance is unreliable because (a) PPE balances per

books and per RPCPPE are unreconciled by P40.570 million; and,

(b) 72 untitled real property units with tax declarations in the name

of the Municipal Government were not recognized as PPE in the

books since ownership is still to be verified; and,

Cash in Bank reconciling items amounting to P8.980 million remain

unidentified and unadjusted in the books of accounts.

Matnog Qualified PPE accounts balance are unreliable due to unverified amount of

P21.160 million and non-existent equipment amounting to P1.700

million was provided with depreciation which resulted in

understatement of total assets and total equity by P1.310 million.

Pilar

Unqualified

Prieto Diaz Qualified PPE balances are unreliable due to unverified amount of P24.500

million and PPE costing P81.950 million were not provided with

depreciation;

Prior years transactions amounting to P23.900 million were

erroneously adjusted in CY 2018 and transactions in CY 2018

amounting to P7.130 million were erroneously recorded thus

resulted in overstatement of total assets by ₱6.83 million,

overstatement of total liabilities by P15.040 million and

understatement of government equity by P8.220 million; and,

Trust Liability - Disaster Risk Reduction Management Fund

(DRRMF) balance of P6.500 million is unreliable because of

erroneous recording.

Santa Magdalena Qualified PPE balances per book and per RPCPPE were unreconciled by

P23.800 million and PPE costing P12.710 million were not provided

with depreciation;

218


CIB-LCCA balances is unreliable because (a) balances per

accounting records and treasury records were not reconciled by net

amount of P2.400 million; (b) book reconciling items amounting to

P.880 million remained unadjusted in the book of accounts; and

BRS were not submitted for ten bank accounts with total book

balance of P1.340 million.

REGION VI – Western Visayas

Aklan Qualified Local Roads Asset Management System have not been fully

complied with which resulted to the non-recognition or non-

presentation of the Road Lot component of the Infrastructure

Assets, hence, Property, Plant and Equipment in the financial

statements is understated by P436.793 million;

Unserviceable and lost government properties totaling P153.230

million forms part of the Report on the Physical Count of Property,

Plant and Equipment and are still included in the Books of

Accounts, thereby overstating the Property Plant and Equipment

accounts;

Controls and policies on the grant, utilization and liquidation of fund

transfer to various Local Government Units (LGUs) were not

established and imposed which resulted to the

unusual/uncharacteristic accumulation to P98.516 million of the

fund transfer, hence, overstated the reported Due from LGUs

account and casted doubt on whether or not the funds were actually

used for its intended purpose;


lacks vital information which renders it incomplete and unreliable

and the same was not duly reconciled with the balances per books

which resulted to a discrepancy of P49.922 Million between the two

records, hence, the validity, existence and accuracy of the PPE

accounts could not be ascertained;

Cash advances to officers and employees amounting to P21.017

million remained unliquidated resulting to its accumulation as of

year-end, thereby overstating the receivable accounts and

understating the expense accounts; and,

P933.123 million Cash-in-Bank – Local Currency, Current Account balance in the financial statements are not assured due to the non-adjustment in the books of the long outstanding reconciling items in the Bank Reconciliation Statements amounting to P5.779 million.

Municipalities

Altavas Qualified Complete actual physical count of the Property, Plant and Equipment (PPE) amounting to P84.942 million was not conducted;

219


Correctness of Land valued at P2.677 million is not ascertained due to lack of RPCPPE, property records, subsidiary ledger and Torrens Title;

PPE amounting to P36.313 million were not provided with depreciation;

Accounts Payable amounting to P6.671 million which has been outstanding in the books for more than two years were not reverted to the General Fund;

Due from Other Funds and Due to Other Funds showed a difference of P1.270 million and (6) Stale checks amounting to P.066 million remained unadjusted in the books of accounts.

Balete Qualified Physical count of the Property, Plant and Equipment (PPE) amounting to P225.261 million was not conducted;

Land valued at P.910 million is not ascertained due to lack of RPCPPE, property records, subsidiary ledger and Torrens Title; and,

Due from other Funds and Due to Other Funds showed a difference of P.088 million; and,

Stale checks amounting to P.011 million remained unadjusted in the books of accounts.

Banga Qualified Property, Plant and Equipment (PPE) accounts in the total amount

of P186.526 million could not be established nor a Report on the

Physical Count of Property, Plant and Equipment (RPCPPE) was

prepared or submitted due to the failure of the Inventory Committee

to conduct physical count of PPE, thus, rendering the accounts

doubtful and failure to issue Property Acknowledgment Receipt

(PAR) on properties issued to officials and employees, thus,

property accountability could not be easily established; and,

Cash advances to officers and employees amounting to P8.006 million remained unliquidated, resulting to its accumulation as of year-end, thus, overstating the receivable accounts, understating the expense accounts.

Batan Qualified Failure of the agency to complete the physical count of its PPE amounting to P74.535 million;

PPE amounting to P35.964 million were not provided with depreciation;

Due from Other Funds and Due to Other Funds showed a difference of P2.023 million;

Land valued at P1.157 million is not ascertained due to lack of RPCPPE, property records, subsidiary ledger and Torrens Title;

Cash advances to officers and employees amounting to P1.133 million remained unliquidated;

220


Receivables amounting to P.423 remained outstanding and dormant in the books for more than 8-10 years; and ,

Stale checks amounting to P.022 remained unadjusted in the books of accounts.

Buruanga Qualified Property, Plant and Equipment (PPE) amounting to P103.699 million which is equivalent to 53% of the total assets of P196.218 million cannot be validated due to the non-completion of the physical inventory.

Ibajay Qualified Property, Plant and Equipment (PPE) with a net carrying value of


ascertained since the management was not able to complete the

inventory taking of its PPE and to submit the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE); and,

Turn-over of collections and control in the issuance of Accountable

Forms (AF) to Revenue Collections Officers (RCO) were not strictly

enforced by the Municipal Treasurer resulting to unremitted

collections amounting to P3.114 million and more, thus, resulting

to understatement of cash and cash equivalent.

Kalibo Qualified Unable to conduct physical count of its Property, Plant and Equipment (PPE) with a total cost of P715.836 million as of December 31, 2018, hence, existence, condition, accuracy and validity of the recorded PPE could not be ascertained;

Accumulation of long outstanding reconciling items in the Bank Reconciliation Statements which remained unadjusted casting doubt on the reliability of the Cash in Bank-Local Currency, Current Account balance of P122.439 million; and,

Inter-Agency Receivable Accounts totaling P0.877 million reflected in the Year-End Financial Statements were not supported with subsidiary ledger balances casting doubts on the validity of its existence.

Lezo Qualified Property, Plant and Equipment (PPE) with a net carrying value of

P55.533 million as of December 31, 2018 could not be ascertained

due to the failure of the Municipality to complete the inventory

taking of its PPE and to submit the Report on the Physical Count

of Property, Plant and Equipment (RPCPPE);

Some depreciable Property, Plant and Equipment (PPE)

amounting to P53.927 million were not provided with depreciation;

Accounts Receivable, Other Receivables, Due from NGAs, Notes

Receivables and Due from LGUs amounting to P1.409 million

which remained dormant in the books for more than 10 years were

not acted upon to facilitate the proper write-off of these accounts;

and

Cash advances to officers and employees amounting to P.267million remained unliquidated as of December 31, 2018.

221


Libacao Qualified Property, Plant and Equipment (PPE) accounts in the total amount

of P190.191 million could not be established nor a Report on the

Physical Count of Property, Plant and Equipment (RPCPPE) was

prepared or submitted due to the failure of the Inventory Committee

to conduct physical count of PPE and failure to issue Property

Acknowledgment Receipt (PAR) on properties issued to officials

and employees, thus, property accountability could not be easily

established;

Due to Pag-ibig account has a debit/negative and unreconciled

balance amounting to P.009 million, thereby, causing misstatement

in the Financial Statement; and,

Cash advances to officers and employees amounting to P2.840 million remained unliquidated, resulting to its accumulation as of year-end, thus, overstating the receivable accounts, understating the expense accounts.

Madalag Qualified Reconciliation of the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) and balances per books was not made by the Municipal Supply/Property Unit and Accounting Office, resulting to a discrepancy of P23.775 million, hence, validity, existence and accuracy of the recorded PPE could not be ascertained.

Makato Qualified Inter-Agency Receivable Accounts totaling to P1.612 million were

not supported with complete subsidiary ledger information and documents casting doubt on the validity of its existence; and,

Absence of updated Property Cards and non-conduct of physical count of P129.373 million Property, Plant and Equipment as of year-end casting doubt on the existence and validity of the recorded PPE balance in the books of the Municipality.

Malay Qualified Property, Plant and Equipment (PPE) amounting to P465.305

million or 40.12% of the total assets of P1.160 million cannot be validated due to the non-completion of the physical inventory.

Malinao Qualified Some depreciable Property, Plant and Equipment (PPE)

amounting to P126.735 million were not provided with depreciation

resulting to overstatement of PPE accounts and changes in net

assets/equity as reflected in the Statement of Financial Position

and understatement of depreciation expenses as reflected in the

Statement of Financial Performance, thus, affected the fair

presentation of the accounts in the financial statements; and,

Due from NGAs, Due from GOCCs, Due from LGUs, Loans Receivable-Others and Other Receivables amounting to P2.844 million which remained dormant in the books for more than 10 years were not acted upon to facilitate the proper write-off of these accounts, resulting in the overstatement of agency assets.

222


Nabas

Qualified Failure to submit complete financial reports such as Statement of Comparison of Budget and Actual Amounts and any required supporting schedules, thus not able to ascertain the correctness and validity of the accounts and its balances and unable to maintain adequate accounting records such as ledgers or books of final entry.

New Washington Qualified Non-preparation of bank reconciliation statements, hence, any

adjustments or reconciling items between the book balance and the bank balance could not be ascertained casting doubt on the correctness and accuracy of the P124.685 million Cash in Bank–Local Currency, Current Account balance presented in the agency’s Financial Statements; and,

Receivable account balances totaling P11.657 million were not supported with schedules of its subsidiary ledger balances rendering the account of doubtful validity and existence; and existence of negative balances in the agency’s Due to BIR and Due to GSIS account under General Fund (Proper) causing misstatement in the financial statements.

Numancia Qualified Property, Plant and Equipment (PPE) amounting to P74.912 million

were not provided with depreciation resulting to overstatement of

PPE accounts and changes in net assets/equity as reflected in the

Statement of Financial Position and understatement of

depreciation expenses as reflected in the Statement of Financial

Performance, thus, affected the fair presentation of the financial

statements;

Due from LGUs, Due from NGO’s/POs and Other Receivables

amounting to P.835 million which remained dormant in the books

for more than 10 years were not acted upon to facilitate the proper

write-off of these accounts, resulting in the overstatement of

agency assets; and,

Cash advances to officers and employees amounting to P.343 million remained unliquidated as of December 31, 2018, resulting to its accumulation and understated the total expenses and overstated the government equity and total receivables, thus affecting its fair presentation in the financial statements.

Tangalan Unqualified

Antique Qualified 539 claimed DVs amounting to P137.737 million were not yet submitted for audit as of January 31, 2019 hindering timely audit work; and,

Difference of P60.356 million in the balances of Property, Plant and Equipment (PPE) accounts per accounting records and per Report of Physical Count of Property, Plant and Equipment (RPCPPE) thus, the reliability and accuracy of the said accounts are doubtful.

223


Municipalities

Anini-y Qualified Non-reconciliation of the accounting and property records on Property, Plant, and Equipment (PPE) accounts amounting to P48.118 million net of depreciation or 42.13 per cent of the total assets of the Municipality which rendered the financial statements doubtful as to the accuracy, existence and completeness of the PPE balances.

Barbaza Qualified Property Plant and Equipment (PPE) valued at P 74.137 million

could not be ascertained because the physical count of PPE was not conducted regularly, variance of P 23.196 million also exists between the Report of the Physical Count of Property, Plant and Equipment (RPCPPE) and the combined statement of financial position and unserviceable properties amounting P .446 million were not disposed resulting to overstatement of assets and government equity accounts in the financial statements; and,

Real Property Tax (RPT) Receivables and Special Education Fund (SEF) Tax Receivables totaling P3.412 million were doubtful since the amounts recorded in the books by the Municipal Accountant did not reconcile with the balance of receivables prepared by the Municipal Assessor resulting to a difference of P1.053 million.

Belison Qualified Property, Plant and Equipment (PPE) valued at P79.112 million

could not be ascertained because the physical count of PPE

conducted by the agency was incomplete and unserviceable

properties amounting P.256 million were not disposed resulting to

overstatement of assets and government equity accounts in the

financial statements; and,

Real Property Tax (RPT) Receivables and Special Education Fund

(SEF) Tax Receivables totaling P3.498 million were doubtful since

the amounts recorded in the books by the Municipal Accountant did

not reconcile with the Certified List of All Real Property Tax

Delinquencies prepared by the Municipal Treasurer.

Bugasong

Qualified Failure to conduct physical inventory and to reconcile the records of

its Property, Plant and Equipment valued at P162.573 million as of

December 31, 2018; and,

Non-reconciliation of ledger balances and cashbook balances of the

Cash – Local Treasury and Cash in Bank – Local Currency Current

Account which resulted to accumulated differences of P.892 million

and P61.495 million, respectively, also rendered the amounts

presented in the financial statements doubtful and unreliable.

Caluya Qualified Incomplete inventory of Property, Plant and Equipment (PPE) amounting to P20.569 million and unserviceable properties amounting to P8.418 million are still carried in the books; and,

Cash account because book reconciling items totaling P18.575 million remained unrecorded at year end.

224


Culasi Qualified Property, Plant and Equipment (PPE) accounts totaling P150.472

million per books as of December 31, 2018 were not reconciled to

PPE records per count because the preparation of the Report on

the Physical Count of Property, Plant and Equipment (RPCPPE)

was accomplished only after the preparation of the year-end

financial statements and PPE ledger cards and property cards

were not maintained; and,

Property, Plant and Equipment (PPE) constructed and/or procured out of the Municipality’s Trust Fund from CY 2016 to CY 2018 with acquisition costs totaling P27.736 million were not recorded and recognized in the books.

Hamtic Qualified Failure to conduct a physical inventory of Property, Plant and Equipment (PPE) and reconcile accounting and property records which resulted to the doubtful existence and accuracy of the PPE account totaling P175.157 million or 57.51% of the total Assets of P304.544 million.

Laua-an Qualified Property, Plant, and Equipment (PPE) valued at P96.050 million

as of December 31, 2018 were doubtful due to failure of the

management to conduct the physical count of its Property, Plant,

and Equipment and non- submission of Report of Physical Count

of PPE to the Office of the Auditor; and,

Construction in Progress Account is unreliable due to the effects

of non- transfer of completed projects of P10.509 million to

appropriate asset account, therefore, the corresponding

accumulated depreciation and depreciation expense were not

recongnized.

Libertad Disclaimer Management had not submitted the transaction documents of the Municipality of Libertad for the period from April to December 2018 for the General and Trust Fund.

Pandan Qualified Property, Plant and Equipment (PPE) accounts are doubtful and not reliable because Property, Plant and Equipment (PPE) accounts totaling P111.713 million per books as of December 31, 2018 were not reconciled to PPE records per count because the Municipality did not conduct physical inventory of PPE, submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and maintain the prescribed property cards and property ledger cards.

Patnongon Qualified Failue to conduct physical inventory and to reconcile the records of its Property, Plant and Equipment valued at P122.934 million as of December 31, 2018.

San Jose Qualified

Property, Plant and Equipment (PPE) valued at P229.36 million as of December 31, 2018 were doubtful due to non-submission of Report of Physical Count of PPE to the Office of the Auditor.

San Remigio Qualified Property, Plant, and Equipment (PPE) valued at P148.326 million as of December 31, 2018 were doubtful due to failure of the management to conduct the physical count of its Property, Plant, and Equipment and non- submission of Report of Physical Count of PPE to the Office of the Auditor.

225


Sebaste Qualified

Property, Plant and Equipment (PPE) valued in the books at P197.976 million; P465.305 million as of December 31, 2018 remained doubtful due to failure to conduct physical inventory and prepare a report thereof, property cards and property ledger cards were not maintained by the property custodian and accountant respectively and depreciation expenses were not provided for the properties of the Municipality.

Sibalom Adverse Property Plant and Equipment (PPE) valued at P237.165 million could not be ascertained since physical count was not conducted and no report was submitted thereon;

Cash in Bank appearing on the statement of financial position at P161.419 million could not be ascertained due to the non-reconciliation of balances of the said account in the cashbooks of the Municipal Treasurer, subsidiary ledgers maintained by the Municipal Accountant and results of bank confirmation inquiries;

Real Property Tax (RPT) Receivables and Special Education Fund (SEF) Tax Receivables totaling P16.212 million were doubtful since the amounts recorded in the books by the Municipal Accountant did not reconcile with the balance of receivables prepared by the Municipal Assessor resulting to a difference of P.846 million;

Unserviceable properties amounting P1.725 million were not disposed resulting to overstatement of assets and government equity accounts in the financial statements;

Receivable accounts totaling P0.952 million were written-off in the books without proper authority/approval from the Commission on Audit (COA) and write-off of said accounts were also debited to the Prior Period Adjustment account, thus affecting the fair presentation of the financial statements due to the understatement of receivables and government equity account;

Fund transfers to Non-Governmental Organizations (NGOs) or People’s Organizations (POs) amounting P.772 million remained unliquidated as of year-end causing the assets and government equity accounts to be overstated;

Cash advances for travel totaling P.409 million were not also liquidated resulting to overstatement of receivables and understatement of expenses;

Stale checks with a total amount of P.327 million remained outstanding in the bank reconciliation statements as well as long outstanding accounts payables related to these checks were unadjusted in the books, thus understated the cash in bank, accounts payable and government equity accounts in the financial statements; and,

Due from Local Government Units account reflected in the statement of financial position at P.195 million was not reliable since fund transfers to NGOs/POs remained unliquidated as of year-end causing the assets and government equity accounts to be overstated.

226


Tibiao Qualified


million per books as of December 31, 2018 were not reconciled

to PPE records per count because the preparation of the Report


(RPCPPE) was accomplished only after the preparation of the

year-end financial statements and PPE ledger cards and property

cards were not maintained; and,

Property, Plant and Equipment (PPE) constructed and/or

procured out of the Municipality’s Trust Fund from CY 2016 to CY

2018 with acquisition costs totaling P35.538 million were not

recorded and recognized in the books.

Tobias Fornier Unqualified

Valderrama Qualified

Failure to reconcile the records and to submit the required report on the physical inventory of its Property, Plant and Equipment valued in the books at P132.554 million as at year end.

Capiz Qualified Twenty seven parcels of land owned by the Capiz Provincial

Government with a total land area of 507,834 square meters

valued at P317.36 million were not recorded in the books of

accounts which resulted to understatement of Land and Equity

accounts.

City

Roxas City Qualified Non-liquidation of cash advances totaling P6.611 million as of December 31, 2018; and,

Annual physical inventory of Property, Plant and Eequipment (PPE) totaling P1.262 billion as of December 31, 2018 was not conducted as required by existing rules and regulations, thus, validity, existence and condition of the PPE account remain doubtful as validation could not be conducted.

Municipalities

Cuartero Unqualified

Dao Unqualified

Dumalag Qualified Non-liquidation of cash advances totaling P3.245 million; and,

Failure to conduct the annual Physical Inventory of Property Plant and Equipment (PPE) as of December 31, 2018 with the Property Ledger Cards and PPE General Ledger (GL) balances as of December 31, 2018 totaling P242.316 million.

Dumarao Qualified Non-moving receivable accounts of the Municipality totaling

P2.717 million, the possibility of collection of which is nil,

remained in the books of the Municipality, thereby affecting the

reliability and fair presentation of the receivable accounts in the

financial statements

227


Eight (8) parcels of land claimed by the Municipality with a total

market value of P17.065 million were not registered under the

Torrens Title System and were not recorded in the agency books

thereby resulting to understatement of Land account as of

December 31, 2018.

Ivisan Qualified Property, Plant and Equipment of P109.843 million cannot be

ascertained due to the following: (a) Failure of the Inventory

Committee to submit the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE); and,

Failure of the Municipal Accountant and Supply Officer to

maintain and reconcile the Property, Plant and Equipment Ledger

Cards (PPELC) and Property Cards (PC), respectively.

Jamindan Qualified Physical inventory of the Property Plant and Equipment (PPE)

amounting to P131.307 million was not conducted, thus, the

correctness, accuracy and existence of the reported PPE, as well

as property accountability may not be ascertained; and,

Non-moving and dormant accounts totaling P1.934 million as of

December 31, 2018 remained in the books of the Municipality,

thus, casting doubt as to the reliability of the account balances

presented in the Financial Statements (FS).

Maayon Qualified Non-conduct of physical inventory for property, plant and

equipment totaling P186.278 million, thus, the correctness,

accuracy and existence of the reported PPE, as well as property

accountability may not be ascertained; and,

Non-liquidation of cash advances for travel amounting P.459 million as of December 31, 2018, resulted in the overstatement of equity and understatement of expense accounts.

Mambusao Qualified Physical inventory of the Property, Plant and Equipment (PPE)

amounting to P284.158 million was not conducted thus, the


as property accountability could not be ascertained; and,

PPE with a total acquisition cost of P217.341 million were not

provided with depreciation, thus overstating the PPE accounts

and understating expense accounts.

Panay Qualified Non-enforcement of tax collections from taxes of delinquent

taxpayers on real property including penalties totaling P 8.100

million; and,

Non-registration of assets owned by the LGU under the Torrens

Title System deter absolute possession of the LGU, thereby

influence the accuracy of the assets and net worth of the agency.

228


Panitan Qualified Property, Plant and Equipment carried in the statement of

financial position at December 31, 2018, includes

unserviceable/obsolete properties in the LGU’s records that

indicate an overstatement of the assets and net worth of the LGU

totaling P21.600 million; and,

Non-provision of depreciation for road networks amounting to

P6.300 million affects the net value of the infrastructure assets at

a given period which also constitute a departure from IPSASs.

Pilar Unqualified

Pontevedra Qualified PPE account of the Municipality was rendered doubtful, in view

non-recognition of lands owned by the LGU in the Land Accounts

with the year-end balance of P1.185 million which casted doubt

on the reliability and accuracy of the said account.

President Roxas Qualified Cash advances totaling P.507 million remained

unliquidated/unsettled as of December 31, 2018, resulted in the

overstatement of equity and understatement of expense

accounts; and,

Physical inventory of properties totaling P221.186 million as of

December 31, 2018 was not conducted and a report on the

physical count was not submitted to the Audit Team, thus, the


as property accountability may not be ascertained.

Sapian Qualified Property, Plant and Equipment of P136.426 million cannot be


Committee to conduct Physical Inventory and submit the Report


(RPCPPE); and,

Failure of the Municipal Accountant and Municipal Treasurer to



Sigma Qualified Failure to recognize in its books of accounts the additional income

totalling P.622 million for CY 2018, which could have been

generated from the operations of Public Market had the

provisions contained in the Municipal Revenue Code were strictly

enforced and which could have been utilized to implement

meaningful programs of the LGU;

Several non-moving and dormant accounts amounting to P3,132

million as of December 31, 2018 remained in the books of the

Municipality thus, casting doubt as to the reliability of the account

balances presented in the Financial Statements (FS); and,

229


Due to Other Funds account in the amount of P3.609 million as

of December 31, 2018 in the Trust Fund book had no

corresponding Due from Other Funds account in other funds,

thus, rendering the correctness and accuracy of the recorded

transactions doubtful.

Tapaz Qualified Inadequate monitoring of the Status of Unliquidated Cash

Advances for Advances to Officers and Employees amounting

to P.398 million as of December 31, 2018, resulted in the

overstatement of equity and understatement of expense

accounts; and,

Property, Plant and Equipment of P189.461 million cannot be


Committee to conduct Physical Inventory and submit the Report


(RPCPPE); and,

Failure of the Municipal Accountant and Municipal Treasurer to



Guimaras Qualified

Cash advances for travel and specific purpose totaling P4.178

million aged over 30 days to over 1 year remained unliquidated

as of year-end and additional cash advances were granted

despite non-liquidation of previous cash advances;

Due from LGUs of the Province and Due to LGUs of the

Municipalities for the collections of Real Property Taxes (RPT)

and Special Education Taxes (SET) had a difference of P17.438

million due to non-reconciliation of accounts at year-end;

Receivables totaling P3.842 million aged two years to over ten

(10) years remained uncollected, due to lack of information and

incomplete records;

Reliability of the PPE accounts totaling P1.993 billion, cannot be

ascertained due to a difference of P1.311 billion between the

accounting records and the Report on Physical Count of Property,

Plant and Equipment (RPCPPE);

Petty Cash Fund totaling P.018 million aged over five (5) years

remained unliquidated as of year-end;

Accounts Payable and Other Payables amounting to P.604

million and P4.736 million, respectively, aged over 2 years and

not supported with valid claims were not reverted to the

unappropriated surplus;

230


Fund Transfers in CY 2016-2017 to different municipalities and

barangays of Guimaras intended for specific purposes totaling

P28.638 million, remained unliquidated as of December 31, 2018,

due to lack of emphasis on the specific period of project

implementation. Liquidation totaling P2.386 million was also

recorded in the books despite the absence of documents;

Expenditures amounting P.187 million for labor directly

associated with construction of water supply facilities were

recorded as expense instead of the appropriate asset account;

and,

Expenditures amounting to P13.440 million were not recorded to

its appropriate expense accounts as prescribed under COA

Circular No. 2015-009 dated December 1, 2015, instead they

were recorded under Other MOOE (Account 5-02-99-990).

Municipalities

Buenavista Qualified

Unreconciled PPE accounts with a difference of P1.991 million;

Unreconciled Due to LGUs account with a difference of P1.609

million; and,

Unliquidated cash advances amounting to P.151 million.

Jordan Qualified

Property, Plant and Equipment balances totaling P103.933

million due to non-submission of the Report on Physical Count of

Property, Plant and Equipment (RPCPPE);

Property, Plant and Equipment totaling P76.433 million were not

provided with depreciation expense; and,

Variance amounting P3.267 million resulted from the non-

reconciliation of Due From/Due To accounts between the books

of the Municipality and the Province of Guimaras.

Nueva Valencia Qualified

Non-reconciliation of Property, Plant and Equipment (PPE)

balances in the books of account with the balances presented in

the Report on Physical Count of Property, Plant and Equipment

(RPCPPE) which resulted to a difference of P138.103 million;

Completed projects recorded as Property, Plant and Equipment

(PPE) in the Trust Fund (TF) totaling P29.080 million were not

transferred to the General Fund (GF) and were not depreciated;

Non-reconciliation of Due From/Due To accounts between the

Municipality and the Provincial Government resulted to a

difference of P10.895 million;

231


Construction In Progress (CIP) account was overstated by

P5.605 million due to the failure to transfer the completed projects

to their appropriate Infrastructure Asset accounts;

Depreciation expenses estimated at P4.537 million for properties

totaling P101.056 million were not provided ; and,

Dormant accounts totaling P2.609 million remained in the books

for 10 years and were not written off.

San Lorenzo

Qualified

Unreliable reported PPE with net book value totaling P80.053

million due to non-submission of RPCPPE;

Unreconciled reciprocal accounts (Due From/To LGUs) between

the Municipal Government and the Provincial Government with a


Non-transfer of Construction in Progress to its appropriate

Property, Plant and Equipment accounts totaling P9.900 million;

Long outstanding Accounts Payable under the General Fund

totaling P.373 million;

Unliquidated cash advances amounting to P.282 million; and,

Non-provision of allowance for impairment on receivables from

Non-Government Organizations (NGOs) amounting to P.078

million.

Sibunag Qualified

Unreliable reported PPE with net book value totaling P75.458

million due to non-submission of RPCPPE;

Non-reclassification of Construction-in-Progress to appropriate

PPE accounts for completed project totaling P2.998 million;

Non-provision of depreciation estimated at P2.564 million for

properties totaling P57.133 million;

Unreconciled Due to LGUs with the recorded receivables of the

Province resulting to a difference of P2.435 million;

Non-transfer of completed projects recorded as PPE in the Trust

Fund to the General Fund totaling P2.312 million; and,

Unliquidated cash advances granted in CY 2011 and earlier

amounting to P.225 million and in CY 2012 to 2018 in the amount

of P.287 million, or totaling P.512 million.

232


Iloilo Qualified

Land owned and controlled by the Iloilo Provincial Government

(IPG) were not monitored and duly accounted in the Report on

the Physical Count of Property Plant and Equipment; and neither

were deeds of usufruct, contracts of lease or similar documents,

authorizing other government or private entities to use the same,

appropriately kept and maintained, thereby understating the

account balance by P408.993 million;

System of controls, policies and procedures were not established

and the work plan for Asset Management and monitoring was not

updated that resulted in the inefficiency of reconciliation,

redundancy and duplication of the work and functions performed

by the GSO personnel, hence increasing the unreconciled

balance of Property, Plant and Equipment between the RPCPPE

and the Accounting Ledger to P390.252 million.

Several accounts in the Iloilo Provincial Government’s Financial

Statements as of December 31, 2018 contained dormant/non-

moving, unreconciled, unidentified and unsupported subsidiary

ledger balances totaling P212.178 million, thus, management

assertions on existence, occurrence, valuation, and rights and

obligations cannot be validated, and rendered the concerned

account balances unreliable;

Failure to conduct annual physical count of the Inventory Held for

Consumption while the concerned Iloilo Provincial Government

Offices did not regularly prepare and submit Requisition and

Issue Slips for the periods such were issued or utilized and

matching principle of accounting, consequently expenses or

construction in progress accounts were understated while the

corresponding inventory accounts were overstated, increasing

the Inventory Held for Consumption Account balance to P395.095

million casting doubts on its accuracy, existence and reliability.

Adjusting entries for Cash reconciling items totaling P65.119

million were not drawn due to the failure of the Provincial

Treasurer’s Office and Provincial Engineering Office to forward

the disbursement vouchers and letters of credit for the purchase

of various equipment, respectively, undocumented bank debit

and credit memoranda, long standing deposit in transit and

outstanding check, and delayed preparation of bank

reconciliation statements, rendering the accuracy and reliability of

Cash in Bank balances doubtful;

Provincial Livelihood Program Loans Receivable from various

Civil Society Organizations (CSOs) totaling P49.836 million were

not periodically verified and validated, inconsistent with Section

7.0 of COA Circular No. 2016-005, thus no reconciliations were

made with the records of the Provincial Cooperative Development

Office while receivables from non-operating and inexistent CSOs

233


were not requested write-off, casting doubts on its existence and

reliability of the account;

Government Equity balance of P26.998 million in the Trust Fund

remained unadjusted, thereby affecting the fair presentation of

the financial statements;

Differences of the actual amounts in the Statement of

Comparison of Budget and Actual Amounts with that of the

Statement of Financial Performance totaling P80.248 million and

P7.193 million in the General and Special Education Fund,

respectively, were not identified and reconciled, thereby limited

transparency and hindered the public from validating whether the

entity is discharging its accountability obligations;

Appropriate accounting policies, adequate maintenance of Subsidiary Ledgers, and periodic reconciliation and verification of account balances were not carried out, resulting in idle and unidentified receivables and payables in three IPG District Hospitals totaling P14.978 million and unreliable balance of inventory account amounting to P17.268 million, inconsistent with the fair presentation of financial statements.

Cities

Iloilo City Qualified Book reconciling items reflected in the Monthly Bank

Reconciliation Statements (BRS) totaling P59.431 million remain

unadjusted/unrecorded in the books of accounts, thus, rendered

the accuracy of the Cash in Bank account doubtful and monthly

BRS were not submitted within the reglementary period,

preventing the auditorial review and early detection of any errors

and/or irregularities;

Due from Other Funds and Due to Other Funds intra-agency receivable payable accounts for all funds do not reconcile by P13.578 million as of December 31, 2018, resulting in the unreliable balance of the said accounts in the financial statements;

Cash advance for travel and special purpose granted in CY 2012 to CY 2018 totaling P7.972 million remained unsettled/unliquidated as of December 31, 2018, thus, may result in the understatement of the related expense accounts and exposed government funds to the risk of possible misuse and loss;

Advances to Officers and Employees and Other Receivables

account balances amounting to P.476 million granted in CY 2011

and earlier remained unliquidated, thereby affecting the fair

presentation of the affected accounts in the financial statements;

234


Purchases of medicines, chemicals and medical, dental and

laboratory supplies amounting to P22.088 million were recorded

as outright expenses, , thus, resulted in the overstatement and

understatement of the expense and inventory accounts

respectively and possible inventory misuse or loss;


(RCPPE) was not submitted with the prescribed period, thus,

precluding auditorial review and casting doubt on the existence,

accuracy and completeness of the Property, Plant and Equipment

(PPE) account balances at year end amounting P3.569 billion;

Property Plant and Equipment (PPE) SL balances amounting to

P798.712 million as of December 31, 2018 were not supported

with schedules or details, thus, may result to doubtful reliability of

the account balances in the financial statements;

Construction in Progress (CIP) accounts totaling P90.560 million

remain unadjusted/transferred to its appropriate asset accounts,

of which P57.120 million had been completed/sold and P33.440

million have no details or schedules, rendering the correctness

and reliability of the asset and CIP accounts doubtful; and,

Other Payables account amounting to P138.260 million as of December 31, 2018 is doubtful due to the existence of the following subsidiary ledger account balances: (a) unreconciled and/or no detail/schedule and negative balances of P91.200 million and P10.250 million respectively, settlement of audit disallowances of P3.660 million, stale checks of P.913 million, various collections held in trust, and prior year’s unclaimed accounts, thereby, affecting the fair presentation of the affected accounts in the financial statements.

Passi City Qualified Property, Plant and Equipment totaling P1.444 billion as per Report on the Physical Count of Property, Plant and Equipment (RPCPPE) for CY 2018 were not reconciled with the property, plant and equipment account in the general ledger, hence, the existence and correctness of the Property, Plant and Equipment accounts as of December 31, 2018 were uncertain.

Municipalities

Ajuy Qualified Property Plant and Equipment (PPE) accounts as of December

31, 2018 amounting to P79.379 million were doubtful because the

Municipal Officials/Personnel responsible did not conduct

physical inventory and prepare the Report on the Physical Count

of PPE and PPE Ledger Cards, hindering the reconciliation of

balances between the Accounting and General Services Office;

and the Municipal Officials were not able to dispose

unserviceable properties and insure and register various

vehicles, thus the accuracy, completeness, existence and legal

rights on the PPE cannot be ascertained;

235


Cash–Local Treasury totaling P4.940 million remained

undeposited as of December 31, 2018, thus rendered the

correctness of the account doubtful and may expose government

funds to possible loss or misapplication;

Cash advances totaling P.810 million remained unliquidated as of

year-end, thereby overstating the asset account and understating

the concerned expense accounts and exposing the funds to risk

of misapplication; and,

Due from Other LGUs account of the Municipality amounting to

P.808 million was not ascertained due to lack of documents to

validate the beginning balance, non-recognition of refund by one

Barangay and non-liquidation by other recipient Barangays; and

the Memorandum of Agreement between the Municipality and

each beneficiary Barangay on the fund transfer, as local

counterpart in the KALAHI CIDSS-NCDDP, was not executed.

Alimodian Qualified Cash in Bank-Local Currency, Current Account amounting to

P33.023 million is doubtful because of unreconciled balances of

cashbook-treasury and accounting records, non-submission of

monthly Bank Reconciliation Statements and unrecorded book

reconciling items thereon;

Erroneous charging of cash advances amounting to P.080

million,000.00;

Property Plant and Equipment account amounting to P185.440

million is also doubtful caused by the failure to conduct physical

inventory of all its property;

Non-provision of allowance for depreciation for depreciable

assets totaling P17.579 million; and,

Non-submission of disbursement vouchers amounting to P8.534

million.

Anilao Qualified Property Plant and Equipment accounts amounting to P140.664

million could not be ascertained because the Municipality has not

conducted a complete physical inventory of its properties and


Equipment to the Auditor;

Year-End balance of Cash Local Treasury account amounting to

P1.008 million as of December 31, 2018 remained doubtful due

to the discrepancies between the records of the Accounting and

Treasury Offices in the amount of P.654 million;

236


Cash advances amounting to P.440 million remained outstanding

as of December 31, 2018, thereby overstated the asset account

and understated the concerned expense accounts and exposed

the funds to risk of misapplication;

Bank Reconciliation Statements with the paid checks and original

copies of the Debit and Credit Memos were not submitted by the

Acting Municipal Accountant to the Auditor, thus correctness and

reliability of the Cash in Bank balances totaling P60.003 million

could not be ascertained.


Fund, Special Education Fund and Trust Fund, showed a total

difference of P10.504 million, thereby casting doubt on the

correctness of the balances of said accounts;

Complete Subsidiary Schedules of General Ledger Accounts

were not submitted, hence correctness and reliability of the

submitted reports were not assured; and,

Reconciliation between actual amounts on a comparable basis as

presented in Statement of Comparison of Budget and Actual

Amounts and in the Statement of Financial Performance and

Reconciliation of Net Cash Flows from Operating Activities to

Surplus/ (Deficit) for the year ended December 31, 2018 were not

presented for verification, casting doubt on the correctness of the

affected accounts in the financial statements.

Badiangan Qualified Property, Plant and Equipment (PPE) accounts as at December

31, 2018 valued at P102.372 million may not be properly

presented in the statement of financial position caused by the

failure of the municipality to submit an inventory report and to

reconcile PPE accounts with accounting records contrary to

concerned regulations.

Balasan Qualified Incomplete physical inventory on Property, Plant and Equipment

(PPE) and submitted the corresponding inventory report beyond

the prescribed deadline of submission, thus rendered the

accuracy and existence of the PPE accounts amounting to

P101.349 million doubtful;

Land, with aggregate Market Value and Assessed Value of

P268.645 million and P23.464 million, respectively, under the

name of the Municipality were not recorded in the books of

accounts, thus resulted to the understatement of both Land and

Equity accounts; and,

Failure to recognize the Local Road Network in the books of

accounts which understated both the asset and equity accounts,

thus affected the fair presentation of the financial statements.

237


Banate Qualified Property Plant and Equipment (PPE) accounts as of December

31, 2018 amounting to P123.124 million were doubtful because

the Municipal Officials/Personnel responsible did not (a) conduct


of PPE, hindering the reconciliation of balances between the

Accounting and General Services Office; and (b) dispose

unserviceable properties, thus the accuracy, completeness and

existence of the PPE cannot be ascertained;


outstanding as of December 31, 2018, due to (a) non-liquidation

within the prescribed period; (b) granting of additional cash

advances to accountable officers although previous advances

were unsettled/unliquidated; and (c) non-observance of

guidelines on the write-off of dormant unliquidated cash

advances, thereby overstating the asset accounts and

understating the concerned expenses accounts and exposing the

funds to risk of misapplication and losses to the government;

Cash – Local Treasury totaling P2.062 million remained



funds to possible loss or misapplication; and,

Reciprocal accounts Due from Other Funds and Due to Other

Funds were not reconciled resulting to a discrepancy of P9.608

million, thereby casting doubt on the accuracy and reliability of

the account balances.

Barotac Nuevo Management Letter

Barotac Viejo Disclaimer Recording of expenses totaling P1.563 million to inappropriate

accounts, rendered the Financial Reports of the Municipality

unreliable;

Property Plant and Equipment (PPE) accounts as of December

31, 2018 amounting to P54.886 million were doubtful because the

Municipal Officials/Personnel responsible did not (a) conduct


of PPE, hindering the reconciliation of balances between the

Accounting and General Services Office; (b) record depreciation

on various PPEs; and (c) dispose unserviceable properties, thus

the accuracy, completeness and existence of the PPE cannot be

ascertained;


of December 31, 2018 due to the non-imposition of appropriate

measures against erring officials and employees who do not

submit liquidation documents within the prescribed period that

238


resulted to the overstatement of asset and understatement of

certain expenses;

Cash – Local Treasury totaling P14.564 million remained



funds to possible loss or misapplication;


Funds were not reconciled resulting to a discrepancy of P.422,

thereby casted doubt on the accuracy and reliability of the

account balances;

Disbursement Vouchers totaling P4.202 million were not

submitted to the COA Office; and transactions worth P4.257

million lacked the required supporting documents, thus validity

and propriety of the transactions covered by those unsubmitted

vouchers could not be ascertained and affected the reliability of


Failure to submit the Statement of Comparison of Budget and

Actual Amounts and the Notes to the Financial Statements within

the prescribed period, thus resulting to the delay in the audit of

financial transactions and/or accounts, as well as affecting the

completeness and fairness of presentation of the financial

statements.

Batad Qualified Property, Plant and Equipment account balances as of December

31, 2017 totaling P80.207 million are doubtful due to the non-

conduct of annual physical inventory count and non-submission

of the corresponding inventory report, hence, affecting the

reliability and integrity of the Financial Statements; and,

Correctness and existence of the Cash Local Treasury amounting

to P2.149 million cannot be ascertained due to the non-deposit of

collections regularly and intact and unreconciled balances of the

Cashbooks and General Ledgers.

Bingawan Qualified Property, Plant and Equipment totaling P181.898 million as per


(RPCPPE) for CY 2018 were not reconciled with the property,

plant and equipment account in the general ledger totaling

P138.965 million, hence, the existence and correctness of the

Property, Plant and Equipment accounts as of December 31,

2018 were uncertain.

Cabatuan Qualified Property, Plant and Equipment (PPE) accounts as of December

31, 2018 totaling P228.820 million remained unreliable due to

existence of reconciling items with a total amount of P.415 million,

inclusion of missing items valued at P2.733 million and

unserviceable assets remains undisposed.

239


Calinog Qualified Property, Plant and Equipment (PPE) account balances totaling


agency to conduct physical count of all its property which caused

the non-submission of Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) and non-maintenance of

property cards and ledger cards as well as the absence of

ownership documents for some assets; and,

Stale checks amounting to P.097 million remained unadjusted in

the books of accounts, which resulted to the understatement of

the Cash in Bank – Local Currency, Current Account and Payable

Accounts by the same amount.

Carles Qualified Property, Plant and Equipment account could not be ascertained

due to incomplete physical inventory of all its properties, and

inadequate submission of the required reports, hence created a

risk that these accounts totaling P230.591 million may not be

fairly presented in the Financial Statements;

Failure to record in the books of accounts all the parcels of land

under the name of the Municipality with market value and

assessed value of P371.189 million and P28.678 million,

respectively, thus resulted to the understatement of the Land

Account;

Reciprocal accounts cannot be ascertained due to non-

reconciliation of balances for more than two (2) years and with a

variance for the current year amounting to P4.297 million, thus,

rendered the fair presentation of the financial statements

doubtful;

Prior years collections aggregating to P4.447 million remained

undeposited as of December 31, 2018, hence exposed

government funds to possible loss or misapplication and created

doubt on the existence and correctness of the Cash in Local

Treasury account;

Items for adjustments in the Cash in Bank-LCCA totaling P.140

million are not promptly taken up in the books of accounts that

resulted to discrepancy in cash balance between the book and

bank records; and,

Cash advances totaling P3.531 million were not fully liquidated at

the end of each year and within the period prescribed, thus

overstated the asset account and understated the concerned

expense accounts for cash advances which may have been

actually incurred but were not reported due to non-submission of

liquidation reports, and exposed the funds to risk of

misapplication.

240


Concepcion Qualified Property, Plant and Equipment account totaling P104.923 million

as of December 31, 2018 was not ascertained due to incomplete

actual physical count of the inventory and non-reconciliation of

reports between the Municipal Accounting Office and General

Services Office;

Cash Local Treasury amounting to P15.970 million remained

undeposited as of December 31, 2018 due to the non-deposit of

collections intact and regularly, failure of the previous Municipal

Treasurer to settle her accountability and non-reconciliation of

reports between the Treasury and Accounting Offices;

Cash advances granted to officers and employees totaling

P3.191 million remained unliquidated as of December 31, 2018;

and,

Motor vehicles donated to the Municipality of Concepcion by

private entities were not recorded in the books of accounts as of

December 31, 2018, resulting in the understatement of

transportation equipment account by an undetermined amount.

Dingle Qualified Land valued at P13.013 million was not recorded as Inventory

Held for Sale as intended; and,

Due to NGAs account amounting to P17.836 million as of year-

end could not be ascertained due to certain deficiencies noted in

the subsidiary ledgers.

Dueñas Qualified Non-conduct of physical inventory of Property, Plant and

Equipment (PPE) accounts amounting to P121.282 million as of

December 31, 2018 and non-reconciliation of records thereof,

thus, PPE accounts may not be fairly presented in the financial

statements at year-end;

Depreciation accounts were doubtful due to the non-recording of

adjusting entries for depreciation of some PPE accounts

amounting to P85.846 million as of December 31, 2018, thereby,

overstating the assets and government equity accounts.

Bank reconciling items and stale checks totaling P1.004 million

and P.163 million, respectively, remained unadjusted as of

December 31, 2018, thereby the Cash in Bank-Local Currency

Current Account amounting to P106.753 million may not be fairly

presented in the financial statements at year-end; and,


Receivable with balances of P14.679 million and P4.073 million,

respectively, as of year-end were doubtful due to non-setting up

of the same at the beginning of the year and were not based on

duly updated Real Property Tax Account Register (RPTAR).

241


Dumangas Qualified Property Plant and Equipment accounts amounting to P264.010

millioncould not be ascertained because the Municipality did not

conduct a complete physical inventory of its properties and submit

the Report on the Physical Count of Property, Plant and

Equipment to the Auditor;


undeposited as of December 31, 2018;


outstanding as of December 31, 2018, thereby overstating the

asset account and understating the concerned expense accounts

and exposing the funds to risk of misapplication;

Bank Reconciliation Statements with the paid checks and original

copies of the Debit and Credit Memos were not submitted by the

Municipal Accountant to the Auditor, thus correctness and

reliability of the Cash in Bank balances could not be ascertained;


Fund, Special Education Fund and Trust Fund, showed a total

difference of P1.152 million as of December 31, 2018; and,

Disbursement vouchers /payrolls, liquidations and supporting

documents covering the period March to December 2018 and

official receipts and deposit slips for Calendar Year 2018 were not

submitted for verification, casting doubt on the correctness of the


Estancia Qualified Failure to conduct its annual physical inventory on Property, Plant

and Equipment (PPE) amounting to P67.123 million and submit

the corresponding inventory report;

Land with a Market Value of P1.395 billion under the name of the

Municipality were not recorded in the books of accounts,;

Items for adjustments as additions and deductions in the Cash in

Bank–LCCA amounting to P1.814 million and P.043 million,

respectively, were not taken up promptly in the books of accounts;

Deficiencies were observed in the establishment and recording of

Real Property Tax (RPT)/Special Education Tax (SET)

Receivables in the books of accounts; and,

Recorded materials and labor for the fabrication of the Materials

Recovery Facility and Municipal Aid for Barangay as outright

expenses in the books of accounts.

Guimbal Qualified Failure to conduct physical inventory of its PPE’s and prepare a

report thereon, thus, the fairness of the presentation of the

account Property, Plant and Equipment totaling P117.894 million

as of December 31, 2018 could not be verified with reasonable

certainty.

242


Igbaras Qualified Failure to conduct the annual physical inventory of Property,

Plant, and Equipment amounting to P160.943 million at year-end;

Real Property Tax Receivables/Special Education Tax

Receivables and the corresponding Deferred RPT/SET Income

were not established at the beginning of the year contrary to

concerned regulations.

Janiuay Qualified Failure of the municipality to submit a complete inventory report

and reconcile its PPE accounts contrary to concerned regulations

resulted in the risk that the Property, Plant and Equipment (PPE)

accounts valued at P370.305 million may not be properly

presented in the financial statements.

Lambunao Qualified Failure of the municipality to complete the physical inventory

taking, submit a detailed Report on RPCPPE and reconcile its

fixed assets resulted in the risk that the Property, Plant and

Equipment accounts valued at P266.643 million may not be

properly presented in the financial statements.

Leganes Qualified Cash advances for P4.102 million remained unliquidated as of

year-end, hence, expenses and corresponding asset/equity

accounts were not reliable as of December 31, 2018;

Due from LGUs account amounting to P1.474 million as of year-

end could not be ascertained due to the absence of subsidiary

ledger consequently casting doubt as to the validity and accuracy

of the balances of the account as of year-end;

Fund transfers to barangays amounting to P.300 million were

directly taken up as “Donations” in the books of accounts resulting

to non-establishment of reciprocal accounts between the

municipality and the barangays and overstatement of expenses

for the same amount; and,

Failure to conduct a physical inventory of its Property, Plant and

Equipment with a carrying value of P115.648 million as of

December 31, 2018, thus, completeness and accuracy of the

account could not be properly established.

Lemery Qualified Monthly Bank Reconciliation Statements with the original copies

of the Bank Statements, paid and cancelled checks, Bank Debit

and Credit Memos were not submitted within the prescribed

period to the Auditor, thus hindered the timely verification of the

correctness and reliability of the Cash in Bank balances


Property, Plant and Equipment amounting to P92.258 million as

of December 31, 2018 could not be ascertained because the

Municipality had not conducted a complete physical inventory of

all its properties, nor prepared the annual inventory report;

243


Trust Liabilities-DRRM account amounting to P24.462 million was

reported under the General Fund books as of December 31,

2018; and unutilized balance of the Local Disaster Risk Reduction

Management Fund for Calendar Years 2010 to 2013 amounting

to P4.943 million was not reverted to the unappropriated surplus

of the General Fund;


outstanding as of December 31, 2018, thereby overstating the

asset account and understating the concerned expense

accounts; and,

Due from Other Funds and Due to Other Funds are not reconciled

resulting to a discrepancy of P.578 million, thereby casting doubt

on the accuracy and reliability of the account balances.

Leon Qualified Inability of the Agency to create Inventory Committee to conduct

physical inventory of all its property and non-submission of report

for assets valued at P220.172 million as of December 31, 2018

and PPE Ledger Cards were not maintained by the Accounting

Office and depreciation was not taken up for properties

amounting P56.271 million.

Maasin Qualified Property, Plant and Equipment (PPE) account balances totaling


agency to conduct physical count of all its property which caused

the non-submission of Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) and non-maintenance of

property cards and ledger cards as well as the absence of

ownership documents for some assets;

Monthly Bank Reconciliation Statements (BRS) were not

prepared and submitted by the Municipal Accountant due to

failure to obtain from its depository banks copy of Bank

Statements on time, thus, the accuracy of Cash in Bank -Local

Currency, Current Account amounting to P144.701 million as of

year - end could not be ascertained.

Miag-ao Qualified Failure to maintain Property, Plant and Equipment Ledger Cards

for each category of its assets and Real Property Ledger Cards

for its land, no physical inventory of its PPE’s and ledger cards,

Property, Plant and Equipment amounting to P 230.970 million as

of December 31, 2018 could not be verified.

Mina Qualified Reconciliation of P70.466 million difference between the total

book value of P283.498 million and actual inventory of P353.965

million of Property, Plant and Equipment (PPE) accounts as of

December 31, 2018 could not be effected since inventory counts

per Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) were not categorized per PPE account and

244


Property Stock Cards were not maintained/updated by the

GSO/Inventory Personnel In-charge; and,

Failure to recognize allowance for impairment of dormant

receivables amounting to P.629 million which were non-moving

and settlement could no longer be ascertained.

New Lucena Management Letter

Oton Qualified Incomplete physical inventory of all the Property, Plant, and

Equipment (PPE) totaling P356.416 million which resulted to an

unreconciled variance of P79.759 million between the Report on

the Physical Count of Property, Plant and Equipment (RPCPPE)

and the accounting records.

Pavia Qualified Failure to submit the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) and maintain the required

property ledger cards and reconcile the PPE accounts valued at

P211.015 million at year-end with its actual physical count.

Pototan Qualified Iincomplete conduct and non-reporting of physical inventory of


P237,522 million as of December 31, 2018 and non-reconciliation

of records thereof, thus, PPE accounts may not be fairly

presented in the financial statements at year-end;

Biological Assets in the form of dispersed breeding

stocks/animals costing P.883 million remained dormant in the

books since pertinent records were not properly kept and

existence were not properly monitored; and,

Bank reconciling items and stale checks totaling P.121 million and

P.277 million, respectively, remained unadjusted as of December

31, 2018, thereby, the Cash in Bank-Local Currency, Current

Account amounting to P316.792 million may not be fairly

presented in the financial statements at year-end.

San Dionisio Qualified Cash Local Treasury amounting to P16.829 million cannot be

ascertained due to the non-deposit of collections regularly and

intact, unreconciled balance of the Cashbook and General

Ledger and the failure of the absconded Municipal Treasurer to

account for her collections;

Recurring reconciling item and outstanding stale checks in the

bank reconciliation statements amounting to P.692 million and

P.231 million, respectively, cast doubt on the accuracy, propriety

and reliability of the Cash in Bank account in the Financial

Statements;

Cash advances granted to officers and employees totaling

P4.820 million, remained unliquidated as of December 31, 2018;

245


Land Account with a total book value of P2.382 million as of

December 31, 2018 was not ascertained due to absence of

property records, subsidiary ledger and Torrens Title;

Property, Plant and Equipment account as of December 31, 2018

totaling P143.994 million remained unreliable due to the non-

conduct of the Annual Physical Inventory Count and non-

submission of the corresponding inventory report; and,

Depreciation for Property, Plant and Equipment with a total cost

of P9.871 million as of December 31, 2018 has not been

provided.

San Enrique Qualified Property, Plant and Equipment totaling P48.630 million were not

reconciled with the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) for CY 2018,hence, the

existence and correctness of the Property, Plant and Equipment

accounts as of December 31, 2018 were uncertain.

San Joaquin Qualified Failure to conduct the annual physical inventory of Property, Plant

and Equipment amounting to P139.484 million, thus, the reliability

of the reported balance and the existence of the assets are

doubtful.

San Miguel Qualified Inability of the agency to conduct physical inventory of all its

property and non-submission of the report thereon as of year-end

for assets valued at P158.897 million and non-maintenance of the

required Property, Plant and Equipment Ledger Cards (PPELC)

and depreciation was not taken up for properties amounting

P33.981 million renders the PPE account unreliable;

Non-submission of the Bank Reconciliation Statements to show

that monthly reconciliation between the balance per bank and

balance found in the books were made for Cash in Bank- LCCA;

Non-submission of disbursement vouchers totaling P2.765

million.

San Rafael Qualified Property, Plant and Equipment amounting to P135.382 million as



all its properties, nor prepared the annual inventory report;



Loans Payable - Domestic account of P25.376 million in the

Statement of Financial Position as of December 31, 2018 did not

reconcile with the total confirmed balance of P25.483 million from

the authorized government depository bank/lending institution,

with a net variance of P.107 million;

246



unliquidated and the Municipal Treasurer and Municipal

Accountant-Designate did not reconcile their records regularly;

Monthly Bank Reconciliation Statements with the original copies


and Credit Memos were not submitted by the Municipal

Accountant to the Auditor;

Government Equity totaling P2.122 million as of December 31,

2018, with no complete details, records and supporting

schedules, was reported under the Municipality’s Trust Fund trial

balance and financial statements.

Due from National Government Agencies and Due from Local

Government Units accounts amounting to P1.707 million and

P.331 million, respectively, were doubtful considering that these

have remained long outstanding in the books and the accuracy of

the balances were unreliable; and,

Due from Other Funds and Due to Other Funds were not

reconciled that resulted to a discrepancy of P2.192 million.

Santa Barbara Qualified Failure to submit the Report on the Physical Count of Property,


property ledger cards and reconcile the PPE accounts with actual

physical count and depreciation expense for some Property,

Plant and Equipment (PPE) accounts was not recorded for CY

2018 and prior years’, thus the correctness, existence and

reliability of Property, Plant and Equipment totaling P150.198


Sara Qualified Property, Plant and Equipment amounting to P148.450 million as



all its properties, nor prepared the inventory report;

Monthly Bank Reconciliation Statements with the original copies


and Credit Memos were not submitted within the prescribed

period to the Auditor, thus hindered the verification of the

correctness and reliability of the Cash in Bank – Local Currency,

Current Account balance reported in the Financial Statements

amounting to P24.167 million as of December 31, 2018;

Government Equity totaling P15.716 million as of December 31,

2018, with no complete details, records and supporting

schedules, was reported under the Municipality’s Trust Fund trial

balance and financial statements.

247


Loans Payable - Domestic account amounting to P55.741 million

in the Statement of Financial Position as of December 31, 2018

did not reconcile with the confirmed balance of P55.777 million

from the Municipality’s authorized government depository banks

in the amount of P.036 million and portion of the loans payable

amounting to P3.949 million was not presented as a current

financial liability in the Statement of Financial Position;


reconciled resulting to a discrepancy of P3.515 million;



Cash advances amounting to P.902 million remained

unliquidated as of December 31, 2018; and,

Disbursement vouchers and supporting documents amounting to

P1.071 million for Calendar Year 2018 were not submitted.

Tigbauan

Qualified Incomplete physical inventory on all of the municipality’s

properties totaling P183.475 million which resulted to an

unreconciled variance amounting to P57.623 million between the


(RPCPPE) and the accounting records; and,

Land account was not supported with a subsidiary ledger; and’

Unrecorded donated Ambulance unit from Philippine Charity

Sweepstakes Office (PCSO) amounting to P.858 million.

Tubungan Qualified Inclusion of non-existing properties totaling P4.364 million in the

Property, Plant and Equipment (PPE) accounts; and,

Donated Ambulance unit from Philippine Charity Sweepstakes

Office (PCSO) was not recorded in the books of the municipality

resulting in an understatement of Government Equity and PPE

accounts.

Zarraga Qualified Failure to submit the Report on the Physical Count of Property,


property ledger cards and reconcile the PPE accounts with actual

physical count, thus, the correctness, existence and reliability of

Property, Plant and Equipment totaling P246.054 million could

not be ascertained.

Region VII – Central Visayas

Bohol

Qualified

Reconciling items with absolute value of P2.883 million remained

unadjusted for 3 to 17 years rendering doubtful the Cash in Bank-

Current and Savings Account as of December 31, 2018;

248


Inventory Accounts totaling P213.141 million are rendered

doubtful by the (a) continued inclusion for at least twelve (12)

years of unreconciled ‘For ID’ accounts amounting to P9.727

million net of abnormal/negative balance of P.958 million; and,

(b) absence of physical count of inventory to determine actual and

correct balances of inventories; and,

Abnormal balances of P19.042 million and recorded credits of

P6.145 million for accumulated bank credits from Land Bank of

the Philippines (LBP) in the ‘Due to National Government

Agencies’ render the presentation of the account in the financial

statements unreliable.

City

Tagbilaran City Qualified Property, Plant and Equipment (PPE) account balance is

uncertain due to differences between the accounting and property

records by P7.731 million, unserviceable properties amounting

to P7.683 million supported with approved Inventory and

Inspection Report for Unserviceable Property (IIRUP) were still

included in the Property Plant and Equipment (PPE) account in

the financial statements as of December 31, 2018, overstated the

PPE account by the same amount; and,

Payables totaling P4.648 million are doubtful as to validity since

the composition thereof could not be established.

Municipalities

Alburquerque Qualified Property, Plant and Equipment (PPE) as of December 31, 2018

are different from that of the Inventory Report with a difference of

P9.860 million and Depreciation Expense amounting to P3.215

million could not be validated.

Alicia Qualified Property, Plant and Equipment with total cost of P189.018 million

cannot be ascertained due to absence of property records and

ledger cards and failure to conduct a complete physical inventory

and reconcile the results with the recorded balances;

Unutilized Disaster Risk Reduction and Management Fund

(DRRMF) CY 2010-2011 amounting to P1.279 million was

erroneously recorded as Trust Liabilities – DRRMF in the General

Fund;

Due to GSIS, Due to Pag-ibig and Due to Philhealth under the

Trust Fund has a total outstanding balance of P.171 million which

represented prior years’ amounts that were not remitted to the

concerned agency; and,

249


Net Income/Surplus is understated by P1.825 million due to the

erroneous recording of the prior year’s unexpended Local

Disaster Risk Reduction and Management Fund (LDRRMF) as

Transfers of Unspent Current Year DRRM Funds to the Trust

Fund.

Anda Qualified Non-moving Receivables Account aging 8 years and more

totaling P.444 million whose possibility of collection or settlement

is doubtful still remain in the books;

Breeding stocks amounting to P.200 million which remained

dormant for several years is of doubtful validity due to non-

monitoring of the existence and condition of the dispersed

breeding stocks, non-maintenance of the required records and

non-preparation of inventory report thereon;

Property, Plant and Equipment amounting to P105.852 million

(net of accumulated depreciation) were not supported with a

Report of Physical Count of Property, Plant and Equipment

(RPCPPE) and a copy of the said report was not submitted to

the Auditor because the inventory committee did not conduct a

physical count of its properties;

Outstanding checks totaling to P4.319 million as of December 31,

2018 in the General Fund included stale checks amounting to

P.510 million which have been stale for more than 6 months, thus,

casting doubt on the accuracy, propriety and reliability of the Cash

in Bank account; and,

Aid to Barangays from 20% Development Fund amounting to

P1.412 million were recorded as Subsidy to Local Government

Units instead of recording it as Due from Local Government Units.

Antequera Qualified Property, Plant and Equipment accounts as of December 31,

2018 totaling P175.318 million which constitutes 74.51% of the

total assets were doubtful due to the failure of the management

to conduct physical inventory of its properties and equipment;

Property, Plant and Equipment with an aggregate amount of

P7.252 million were erroneously classified;

Trust receipts from Department of Social Welfare and

Development for social pensions totaling P9.704 million recorded

in the General Fund overstated the expenses by the same

amount resulting to the LGU operating at a loss of P8.614 million;

Income totaling P1.095 million were booked up as trust

collections, thereby resulting in the overstatement of liability by

P1.095 million and understatement of income/government equity

by the same amount; and,

250


Unexpended Local Disaster Risk Reduction Management Fund

(LDRRMF) – MOOE amounting to P.475 million were not

transferred to a special trust fund at year end.

Baclayon Qualified Property, Plant and Equipment (PPE), net of accumulated

depreciation, amounting to P40.419 million in CY 2018 could not

be ascertained due to the non-completion of the annual physical

inventory of properties to determine unrecorded assets,

unserviceable and missing properties; and,

Depreciation Expense amounting to P1.350 million could not be

validated as to accuracy and correctness due to non-submission

of documents/lapsing schedules detailing the depreciable

properties and the computation of depreciation expense for each

PPE.

Balilihan Qualified Breeding Stocks account amounting to P.354 million has

remained dormant for years;

Eight (8) stale checks totaling to P.168 millionstill existed in the

books;

Real Property Tax and Special Education Receivables totaling

P7.613 million could not be ascertained as the amount was not

based on Certified List of Taxpayers and taxes due and

collectible;

Various Accounts totaling P.357 million which remained dormant

in the books for unknown period were not acted upon, to which

the proper write-off thereof could not be facilitated;

Failure to conduct the required physical inventory of its

Inventories, Property, Plant and Equipment and Other Assets,

thus, casting doubt on the validity and accuracy of its reported

balances in the aggregate amount of P159.026 million as of


Thirty-one (31) parcel of lots owned by the municipality with a total

assessed value of P7.747 million are not covered with Certificate

of Titles in its name.

Batuan Qualified Cash in Bank reconciling items, net of P1.306 million were not

recorded rendering the accuracy and reliability of the Cash in

Bank accounts doubtful;

Unrecorded checks totaling P1.408 million remained reconciling

items in the Bank Reconciliation Statements;

Other Receivables totaling P.664 million are of doubtful validity

and chances of collection are remote;

251


P1.140 million Accounts Payable as of September 30, 2018 aged

2 years and above which are not paid;

Due to Other National Government Agencies (NGAs) totaling

P39.208 million in the Trust Fund lacks subsidiary ledgers and

included projects/programs which were not yet implemented or

implemented but not yet liquidated and balances which were not

returned to the concerned source agencies;

Bank interest totaling P1.057 million of Trust Fund deposits were

erroneously recorded under the Other Payables account instead

of income or payable account in the General Fund;

Due to BIR totaling P.749 million is unreliable due to errors in the

remittances of these withholding taxes; and,

Due from Other Funds and Due To Other Funds has

unsettled/unadjusted difference of P.753 million.

Bien Unido Adverse Abnormal balances were found in the supporting schedules of

Due to NGAs, Due to LGUs and Other Payables totaling P4.180

million which continually remained unadjusted/corrected as of

December 31, 2018;

1,519 pieces of Accountable Forms Without Money Value from

current and previous cash examinations were still found

unaccounted;

Unserviceable assets totaling P13.221 million were not yet

dropped from the books of the municipality due to the failure of

the Property Officer/Disposal Committee to dispose the

unserviceable properties;

Cash Advances and Other Receivables amounting to P.589

million were not liquidated for a period of one (1) year and above;

and,

Due to and Due from Other Funds of the Municipality were not

reconciled resulting in unreliable balances of the Financial

Statements.

Bilar Qualified Fund assistance to various barangays in the amount of P3.095

million remained unliquidated as of December 31, 2018 despite

completion of the intended purposes thereof;

Physical Count of Inventories totaling P.428 million was not

conducted; and,

Property, Plant and Equipment (PPE) account as of December

31, 2018 amounting to P113.699 million could not be ascertained

due to the failure of the Inventory Committee to conduct a

complete physical inventory and submit the corresponding Report

of the Physical Count.

252


Buenavista Qualified Property, Plant and Equipment (PPE) account balances

remained doubtful due to incomplete physical inventory count.

Calape Qualified Payment of various materials or bills for on-going projects totaling

P10.219 million were recorded to its specific Property, Plant and

Equipment (PPE) accounts even if the assets were not yet

completed and turned-over;

Completed structures funded by the national government

agencies that are barangays properties amounting to P8.378

millionwere still recorded in the books;

Withholding of mandatory deductions, contributions and loan

amortization of officials and employees resulted in under –

remittance totaling P.496 million and doubtful balances of the Due

to GSIS, BIR, Pag-ibig, PHIC; and,

Due to Other National Government Agencies (NGAs) amounting

to P1.956 million remained in the books of the agency as of

December 31, 2018 due to the failure of the management to

transfer the balances to the National Treasury.

Candijay Qualified Cash in Bank accounts reported at P35.736 millionin the financial

statements as of December 31, 2018 is unreliable;

Outstanding checks in the Bank Reconciliation Statements

include stale checks amounting to P.515 million;

Dormant Receivables amounting to P7.097 million which

remained uncollected beyond one (1) year and of doubtful chance

of collection;

Abnormal balances of various Liability Accounts in the total

amount of (P10.293 million);and,

Failure to set up Real Property Tax (RPT) Receivable and Special

Education Tax (SET) Receivable based on the certified list of

taxpayers showing the amount of tax due and collectible for the

year because of the failure of the Municipal Treasurer to make

the said list available hence the RPT and SET Receivables in the

amount of P.068 million and P.063 million, respectively, as of the

end of the year 2018 is unreliable.

Carmen

Qualified

Property, Plant and Equipment and Biological Assets amounting

to P323.021 million (net of depreciation) are doubtful due to the

absence of Report of Physical Count of Property, Plant and

Equipment (RPCPPE) caused by the failure of the inventory

committee to conduct physical count of LGU properties; and,

253


No reconciliations and adjustments were made for the P.170

million stale checks, P.220 million unrecorded checks, P.025 non-

moving current asset accounts, P1.234 million Due from LGUs,

P1.605 million other investments, and P1.032, million Other

Payables which balances remain dormant and questionable for a

long period.

Catigbian Qualified Property, Plant and Equipment as of December 31, 2018

amounting to P227.854 million, could not be ascertained due to

the failure of the Inventory Committee to conduct a complete

physical inventory and submit the corresponding Report of the

Physical Count of PPE (RPCPPE);

Unliquidated Cash Advances accumulated to P.138 million at

year end due to non-compliance of the officials and employees

on the timely liquidation of cash advances;

Interest income recorded in the Trust Fund totaling P.283 million

resulted to the non-recognition of income thus rendering the

overstatement of the liabilities misstatement of the financial

statements;

Withholding of the mandatory deductions, contributions, and loan

amortizations of officials and employees resulted in under-

remittance amounting to P.501 million and doubtful balances of

the Due to GSIS, BIR, PAG-IBIG, PHIC;

Existence of unreconciled balances of Intra-agency accounts Due

from Other Funds and Due to Other Funds amounting to negative

P.092 million, Real Property Tax Receivable and deferred RPT

amounting to negative P371.04; and Special Education Tax and

deferred SET P652.63; and,

Unexpended balances of trust receipts under Due to Other

National Government Agencies (NGAs) and Due to LGUs

amounting to P.916 million and P.007 million respectively,

remained in the books of the agency as of December 31, 2018.

Clarin Qualified Property, Plant and Equipment (PPE) account balances

remained doubtful due to failure to conduct physical inventory

count.

Corella Qualified Unliquidated cash advances at year-end had a total balance of

P2.149 million;

Financial assistance to various government agencies amounting

P.060 million and P.250 million were erroneously recorded as

cash advance and expense respectively while financial

assistance to barangays totaling P.080 million were erroneously

classified and remained unliquidated as of December 31, 2018

254


despite completion of the intended purposes thereof, resulting in

misstatement of the related receivable accounts;

Withholding taxes on compensation of the municipal officials and

employees were not in accordance with Republic Act No. 10963

resulting in the over-withholding of income taxes and unreliable

Due to BIR balances as of December 31, 2018;

Absence of proper monitoring and reconciliation of accounts

resulted to abnormal subsidiary balances of the Due to NGAs and

Due to LGUs account, thus, fairness of the financial statements

cannot be relied upon;

Non-disposal of the unserviceable properties totaling P5.660

million affected the fair presentation of the Property, Plant and

Equipment account in the Financial Statement and exposed them

to further deterioration and deprived the agency of any

benefit/income that may have been derived from the assets; and,

Failure to conduct the required physical inventory of its

Inventories, Property, Plant and Equipment and Other Assets,

thus, casting doubt on the validity and accuracy of its reported

balances in the aggregate amount of P37.564 million as of

December 31, 2014.

Cortes

Qualified Undocumented prior years balances of dormant receivable

accounts (Due from Officers and Employees and Advances to

Officers and Employees) totaling P.501 million remained in the

books from seven to 14 years;

Physical inventory taking of Property, Plant and Equipment

totaling P42.392 million was incomplete;

Erroneous recording of disallowances which are on appeal and

failure to record disallowances which have become final and

executory totaling P3.480 million; and,

Failure to record payment to the Bureau of Internal Revenue

(BIR) for the income taxes of the municipal officials and

employees and the corresponding interest/penalties totaling

P.385 million.

Dagohoy Qualified Property, Plant and Equipment (PPE) accounts as of December

31, 2018 amounting to P113.105 million could not be ascertained

due to the failure of the Inventory Committee to conduct a

complete physical inventory and submit the corresponding Report

of the Physical Count; and,

Reported balance of the Work/Zoo Animals account amounting to

P1.290 million has remained dormant for years, rendering the

account balance unreliable.

255


Danao Qualified Property, Plant and Equipment (PPEs) and Inventories totaling

P30.934 million and P3.931 million, respectively, cannot be

established due to non-submission of Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and Report

of the Physical Count of Inventories (RPCI);

Non-submission of Bank Reconciliation Statements (BRS) by the

Municipal Accountant hindered the timely verification of Cash in

Bank balances thus, casting doubt on the accuracy of its reported

balance in the financial statements totaling P108.795 million as of

December 31, 2018;

Cash in Bank balances per cashbook and subsidiary ledgers are

not regularly reconciled, thus, casting doubts on the fairness of

presentation of the Cash in Bank account balance of P108.795

million in the financial statements as of December 31, 2018;

Reported balance of the Agricultural Produce for Distribution

account amounting to P.848 million has remained dormant for

years, rendering the account balance unreliable due to the

absence of physical count of the said account;


eliminated in the consolidated financial statements due to a

difference of P2.385 million between the two accounts as at year-

end; and,

Non-reversion of the unexpended balance of Local Disaster Risk

Reduction and Management Fund (LDRMMF) in CY 2018 in the

amount of P3.510 million, and non-reversion of unutilized CY

2013 DRRMF from TF to GF, rendered the accuracy of Trust

Liabilities – DRRMF account totaling P6.025 million as of year-

end, doubtful.

Dauis Qualified Physical existence, condition, ownership and valuation of

properties were not ascertained due to failure of the LGU to

conduct actual physical inventory of its properties amounting to

P126.900 million, net of depreciation, thus balances of the PPE

accounts are unreliable;

Reliability of the year-end balances of payable accounts

amounting to P3.750 million could not be ascertained due to the

absence of adequate subsidiary ledgers;

Reconciling items totaling P1.200 million remained unadjusted as

of December 31, 2018, rendering the validity of these reconciling

items doubtful, thus accuracy of Cash in Bank- Local Currency,

Current Account balance of P171.022 million cannot be

ascertained; and,

256


Reciprocal accounts Due From Other Funds and Due To Other

Funds has unsettled/unadjusted difference of P.719 million

casting doubt on the accuracy of the asset and liability accounts.

Dimiao Qualified Real Property Tax/Special Education Tax Receivable balances at

year end amounting to P20.396 million and P20.157 million,

respectively, is doubtful due to inaccurate basis of setting-up of

the receivables.

Duero

Qualified Property, Plant and Equipment amounting to P113.690 million

(net of depreciation) are doubtful due to the absence of Report of


caused by the failure of the inventory committee to conduct

physical count of LGU properties;

Stale checks amounting to P.094 million remained unadjusted

rendering the correctness and accuracy of the recorded Cash in

Bank, doubtful;

Unserviceable properties amounting to P.700 million were not

reclassified to Other Assets;

Undocumented Payable totaling P.696 million as of December

31, 2018 were still carried in the books casting doubt on the

validity and accuracy of the liability account; and,

Interest earned on Trust Fund deposits amounting to P.095

million was not transferred to the General Fund understating the

income as well as the government equity account.

Garcia Hernandez Qualified Physical count of Property, Plant and Equipment was not

conducted, thus validity, existence and correctness of the

recorded Property, Plant and Equipment amounting to P98.889


Getafe Qualified Property, Plant and Equipment (PPE) account balances

remained doubtful due to incomplete physical inventory count.

Guindulman Qualified Dormant Receivables amounting to P3.354 million which

remained uncollected beyond one (1) year and of doubtful chance

of collection are presented as current assets in the financial

statements;

Other Machinery & Equipment Account includes a total amount of

P.851 million which is considered unreconciled affecting the

reliability of the financial statements;

Completed projects in the total amount of P11.887 million still

formed part of Construction in Progress – Infrastructure Assets

and were not transferred to the appropriate asset accounts;

257


Unserviceable properties were not disposed of or dropped from

the books resulting to the overstatement of Property, Plant and

Equipment (PPE) by P.031 million;


Funds were not reconciled resulting in the net discrepancy of

P.008 million; and,

Absence of proper monitoring and control on the maintenance of

accounts resulted to abnormal negative balances of the Due to

BIR Account in the total amount of (P.310 million).

Inabanga

Qualified

Property, Plant and Equipment (PPE) account balances

remained doubtful due to failure to conduct physical inventory

count.

Jagna

Qualified

Report of Physical Count of Property, Plant and Equipment

(RPCPPE), Report of Physical Count of Inventories (RPCI) and

Biological Assets were not submitted to the Auditor, thus,

correctness of the recorded balances totaling P106.687 million

cannot be ascertained; and,

“Due from NGA’s and Other Receivables” showed a year-end

balances of P.832 million and P.292 million, respectively, were

dormant receivables for over a period of 20 years and above

causing doubt as to its existence and collectibility.

Lila

Qualified

Inventory and Property, Plant and Equipment balances

amounting to P.656 million and P95.246 million, respectively,

could not be ascertained due to the failure of the Municipality to

conduct a physical inventory; and,

Gasoline, oil and lubricant expense amounting to P.579 million

was doubtful due to the absence of duly accomplished Driver’s

Trip Tickets, thus, exposing public funds to possible misuse or

wastage.

Loay

Qualified

Property, Plant and Equipment amounting to P67.521 million is

doubtful due to the absence of Report of Physical Count of

Property, Plant and Equipment (RPCPPE) caused by the failure

of the inventory committee to conduct physical count of LGU

properties.

258


Loboc Qualified Property, Plant and Equipment amounting to P108.141 million,

were not supported with a Report of Physical Count of Property,

Plant and Equipment (RPCPPE) thus, the validity, existence

and correctness of the account could not be ascertained;

Stale checks amounting to P.833 million remained unadjusted

rendering the correctness and accuracy of the recorded Cash in

Bank doubtful;

Prior year’s expenses amounting to P.593 million were paid out

of current year’s appropriation resulting in the overstatement of

expenses of the year under audit and understatement of its

current income by the same amount;

Due From Other Funds (1-03-04-050) and Due To Other Funds

(2-03-01-010) has unsettled/unadjusted difference of P12.051

million casting doubt on the accuracy of the asset and liability

accounts; and,

Real Property Tax and Special Education Tax Receivables,

amounting to P.351 million and P.091 million, respectively, could

not be ascertained because they were based on the Quarterly

Report of Real Property Assessment from the Municipal

Assessor.

Loon Qualified Cash advances amounting to P3.654 million remain unliquidated

at year-end, thus, affecting the fairness of the presentation of the

year-end financial statements;

Ongoing construction of trust fund funded projects amounting to

P31.357 million were immediately debited to Due to NGAs/ Due

to LGUs account in the Trust Fund Books and transferred and

recognized in the General Fund Books as Grants and Donations

in Kind, resulting to an overstatement of income and

understatement of liabilities;

Payment for Comprehensive Land Use Plan (CLUP) Workshop

amounting to P.305 million was erroneously debited to

Construction in Progress account, resulting to overstatement of

assets and understatement of expenses;

Cost of construction/ rehabilitation/ improvement of barangay

roads, barangay day care centers, barangay health stations,

barangay halls aggregating P40.234 million remained in the

books thereby overstating the assets of the municipality as of

December 31, 2018 by the same amount; and,

Property, Plant and Equipment with an aggregate amount of

P4.762 million were erroneously classified resulting to inaccurate

account balances.

259


Mabini Qualified Lack of proper control and close monitoring in the grant, utilization

and liquidation of cash advances resulted to the accumulation of

unliquidated cash advances to P1.835 million as of December 31,

2018, thus overstated the receivable and understated the related

expense accounts;

Due from National Government Agencies (NGAS) and other

receivables totaling P.115 million were dormant for more than ten

years (10) years due to laxity in monitoring and enforcing

collections, thereby overstating the receivables; and,

Property, Plant and Equipment amounting to P190.716 million as

of December 31, 2018 was not supported with a Report of


to the failure of the Municipality to conduct a complete physical

inventory-taking, thus rendering doubtful the correctness and

reliability of the recorded Property, Plant and Equipment.

Maribojoc Qualified Property, Plant and Equipment (PPE) and Inventory accounts

amounting P172.855 million (net of depreciation) and P1.008

million respectively, could not be ascertained due to failure to

conduct actual physical count;

Supplies and Materials Expense accounts amounting P3.761

million, could not be ascertained due to failure to prepare the

Summary of Supplies and Materials Issued (SSMI);

Failure to transfer the unutilized Municipal Disaster Risk

Reduction and Management Funds (MDRRMF) of CY 2018

totaling P2.193 million to Trust Liabilities - DRRM account;

Unutilized Municipal Disaster Risk Reduction and Management

Fund (MDRRMF) for more than five (5) years totaling P1.090

million was not reverted to the General Fund books; and,

Registration Fees paid in attendance to various

trainings/conventions and seminars/workshops totaling P.252

million were incorrectly recorded as Traveling Expenses instead

of Training Expenses.

Panglao Qualified Property, Plant and Equipment (PPE) account balances totaling

P259.700 million as of December 31, 2018 per accounting

records could not be assured due to the failure of the LGU to

conduct physical inventory of its properties;

Due From Other Funds and Due To Other Funds has

unsettled/unadjusted difference of P26 million casting doubt on

the accuracy of the asset and liability accounts;

Due from LGUs and Other Receivables accounts amounting to

P.506 million and P.442 million, respectively, could not be

ascertained due to unavailability of source documents;

260


Absence of proper monitoring and control in the maintenance of

accounts resulted in abnormal negative balances of various Due

to BIR subsidiary accounts totaling P7.518 million, thus, fairness

of the financial statements cannot be relied upon.

Pilar

Adverse

Unliquidated Cash Advances accumulated to P1.290 million at

year end due to non-compliance of the officials and employees

on the timely liquidation of cash advances;

Financial assistance with total amount of P5.683 million granted

to other municipalities and barangays were directly recorded as

expense instead of a receivable under the Due from LGUs

account;

Existence and completeness of the recording of Property, Plant

and Equipment with total cost of P193.379 million cannot be

ascertained due to a) absence of property records and ledger

cards; and, b) the failure to complete the physical inventory and

reconcile the results with the recorded balances;

Due from National Government Agencies (NGAs) with total

balance of P1.540 million was dormant for ten (10) years and

lacks subsidiary ledgers to identify the agency-debtor;

Cash in Bank balance of P90.810 million is misstated due to long

outstanding reconciling items with total amount of P8.172 million

that were not substantiated and recorded in the books,

unaccounted difference totaling P.069 million, and adjustments

with no basis amounting to P1.430 million;

Miscellaneous Income account is overstated by P4.938 million

due to the erroneous recording of the surplus from the previous

year;

Due to LGUs under the General Fund amounting to P13.610

million is doubtful due to debit balances, old accounts,

misclassification and weakness in monitoring the remittances of

the provincial and barangays’ share of taxes;

Due to Other NGAs under the General Fund amounting to

P12.235 million is doubtful due to old and unclassified accounts,

thus, indicating weakness in the control and liquidation of fund

transfer; and,


(SET) Receivable balances of P6.685 million and P6.659 million,

respectively, are not correctly stated due to difference of P.026

million and absence of a duly certified list of taxpayers.

261


President Carlos P. Garcia

Qualified Non-reconciliation of the Report on Physical Count of Property,

Plant and Equipment and accounting records.

Sagbayan Qualified Movable Property, Plant and Equipment account amounting to

P31.929 million as of December 31, 2018 remained doubtful due

to non-conduct of physical inventory count and lapses in the

implementation of physical monitoring procedures;

Cashbook and general ledger balances of the Cash in Bank

account reflected a difference of P10,108 million as of December

31, 2018 due to the failure of the Municipal Treasurer and

Municipal Accountant to reconcile the cashbooks and general

ledgers at least quarterly, thus, rendering the accuracy of the

reported Cash in Bank balances doubtful.

Accounts totaling P2.163 million recorded as “for ID” in the

different General Ledgers could not be established due to lack of

details and non-reclassification of these balances to their

appropriate Subsidiary Ledger accounts in the absence of

supporting details;

Land account totaling P1.698 million is rendered doubtful due to

the absence of valid proofs of ownership caused by delay in

processing the transfer of titles for land donated and bought by

them, and for failure to record in the books lots already owned

by the Municipality amounting to P2.728 million, thereby,

rendering ownership thereto uncertain and exposing the

Municipal Government to risk of third party claims and illegal

dispositions, and understating the Land account;

Improper charging of conducted trainings, conventions and

seminar/workshops, as well as minimal guest food

accommodation expenses, resulted in the overstated

Representation Expense account in the financial statement

amounting to P.884 million as of December 31, 2018; and,

Variances on the monthly remittances against taxes withheld by

the LGU as much as P.378 million resulted in negative and

unreconciled monthly balances of the Due to BIR account.

San Isidro Adverse Of the P1.354 million, Due from Officers and Employees

Account, a total of P.794 million or 58.67% aged over one to more

than ten years remained unliquidated at year-end;

Cash advances totaling P.350 million for Intelligence Fund

remained unliquidated for more than 5 years;

Propriety and validity in the recording of the municipality’s

Property, Plant and Equipment (PPE) account could not be

ascertained due to the failure of the management to conduct

262


actual physical inventory taking, non-preparation of inventory

reports and determination of unserviceable items.

Due From Other Funds and Due To Other Funds have

unsettled/unadjusted difference of P.308 million;

Cash in Bank – Local Currency, Current account (GF) totaling

P26.201 million could not be validated due to non-preparation and

non-submission of Bank Reconciliation Statement; and,

Absence of proper monitoring and control on the

recording/maintenance of majority of the accounts resulted in

abnormal negative balances of different accounts in the total

amount of P4.820 million.

San Miguel Qualified Movable Property, Plant and Equipment (PPEs) and Inventories

totaling P22.104 million and P1.775 million, respectively, cannot

be fully established due to incomplete conduct of physical count;

Cash advances for travel and special purposes totaling P.407

million as at year-end were not yet liquidated;

Book reconciling items were not immediately recorded in the LGU

books as reflected in the Bank Reconciliation Statement (BRS)

as of December 31, 2018 thus, understating the Cash in Bank

and related income and expense accounts by a net amount of

P.396 million; and,

Reported balance of the Agricultural Produce for Distribution

account amounting to P.121 million has remained dormant for

years, rendering the account balance unreliable due to the

absence of physical count of the said account.

Sevilla Qualified Property, Plant and Equipment and Biological Assets amounting

to P217.314 million (net of depreciation) are doubtful due to the

absence of Report of Physical Count of Property, Plant and

Equipment (RPCPPE) caused by the failure of the inventory

committee to conduct physical count of LGU properties.

Sierra Bullones Qualified Existence of unreconciled balances of Intra-agency Accounts

Due From Other Funds and Due to Other Funds amounting to

negative P.066 million casts doubt as to the accuracy of the

transactions recorded under these accounts;

Government Equity account balance could not be ascertained

due to non-liquidation of past due cash advances amounting to

P.133 million; and,

Year-end balance of the account Due to Other National

Government Agencies (NGAs) totaling P22.906 million included

projects/programs which were not yet implemented or

263


implemented but not yet liquidated and balances which were not

returned to the concerned source agencies.

Sikatuna Qualified Property, Plant and Equipment with total amount of P106.408

million cannot be ascertained due to the failure to conduct a

complete physical inventory and reconcile the results with the

recorded balances; and,


December 31, 2018, resulting in the non-recognition of

expenditures.

Talibon Qualified Due from Local Government Units (10303030) amounting to

P3.617 million remained unliquidated as of December 31, 2018,

thereby rendering understatement of expense and overstatement

of income and possibly exposing unused cash in the hands of the

concerned LGUs to misapplication;

Unsettled/Unadjusted difference of P.084 million in the reciprocal

accounts Due to and from Other Funds were not reconciled

resulting in unreliable balances in the asset and liability accounts

of municipality.

Due to BIR and GSIS accounts were found to have negative

balances in their subsidiary ledgers totaling P.117 million which

continually remained unadjusted/corrected as of December 31,

2018; and,

Depreciable assets totaling P2.307 million were not depreciated

during the year, thus, Property Plant and Equipment (PPE) and

the related Government Equity account were overstated and

expenses understated.

Trinidad Qualified Unserviceable assets totaling P2.061 million were not yet

disposed due to the failure of the Property Officer/Disposal

Committee to process application by disposal of unserviceable

properties on a timely basis;

Demolished/destroyed Old Restaurant Building having a book

value of P.319 million was still carried in the books of accounts of

the municipality;

Balance of the Building account (1-07-04-010) in the amount of

P14.388 million (net of depreciation) does not include the costs of

major repairs/rehabilitation and construction being implemented

by DPWH-Bohol 2nd District Engineering Office in Ubay, Bohol

thereby understating the asset accounts; and,

Cash advances for official travels and other purposes totaling

P.144 million, were still not liquidated.

264


Tubigon Qualified Property, Plant and Equipment accounts amounting to P419.015

million at year-end could not be ascertained due the failure to

reconcile the inventory report of the Municipal Treasurer and with

the records of the Municipal Accountant with a difference of

P216.856 million;

LDDRMF amounting to P5.458 million per books is different from

the status report of fund utilization showing a balance of P5.801

million, showing a difference of P.343 million;

Other Deferred Credits totaling P2.182 million showed recording

of earned income;

Withholding of the mandatory deductions and loan amortizations

of officials and employees resulted to the doubtful balances of the

Due to GSIS, BIR, PAG-IBIG and under-remittance amounting to


Fund that was not yet deposited amounting to P1.425 million was

recorded as part of the Cash in Bank and recognized as Deposit

in Transit (DIT) in the Bank Reconciliation Statement (BRS).

Ubay Qualified Failure to conduct actual physical inventory taking and

incomplete preparation and submission of inventory report.

Valencia Qualified Depreciable assets amounting to P112.426 million which

represented 63.3% of the total thereof were not provided with

depreciation. This resulted in the misstatement of assets,

expenses and government equity at year-end.

Cebu Qualified Property, Plant and Equipment (PPE) account balance is

unreliable because it included unidentified items costing

P272.012 million and had an unreconciled difference of P251.049

million compared to the property records of the Provincial General

Services Office and included the book value of P2.111 billion of

several lots that were donated to the City Government of Cebu

on August 3, 2018;

Cash in Bank-LCCA was understated by P88.421 million because

cash equivalent to unreleased checks and stale checks totaling

P87.880 million and P.541 million, respectively, were not restored

to the account at year end;

Interest Expenses totaling P5.090 million on Loans Payable was

misclassified under the "Other Maintenance and Operating

Expenses" account and Interest Expenses and accrued Interest

Payable at year end amounting P.715 million was not recorded,

thereby misstating the account balances in the financial

statements; and,

265


Due from NGOs/POs account was not fairly presented because

dormant accounts aging twelve years or more totaling P7.106

million, the settlement of which is uncertain, was not provided with

Allowance for Impairment Loss.

Cities

Bogo City Adverse

Property Plant and Equipment (PPE) account balance of

P845.733 million as of December 31, 2018 is doubtful due to the

following: (a) the required physical inventory count of PPE during

the year was not completed (b) the Property Cards were not

updated; and (c) property records were not reconciled with the

accounting records; and,

Ownership on the City’s Real Properties numbering 72 parcels of

land, which were booked at a total cost of P111.942 million could

not be ascertained due to non-completion of land titling.

Cebu City Qualified Unsubstantiated, unreconciled and dormant significant amount of

beginning balances of asset and liability accounts totaling P9.555

billion and P6.208 billion, respectively;

Unreliable balances of Property, Plant and Equipment (PPE)

accounts totaling P10.495 billion due to unreconciled difference

of P612.030 million between accounting and property records;

Unreliable balances of the Inventory accounts totaling P514.174

million due to the non-conduct of physical count of inventories and

the non-submission of reports on the physical count of P185.780

million on various inventories;

Unliquidated financial assistance granted to the barangays of the

City totaling P315.127 million;

Inaccurate balances of Construction in Progress accounts due to

the non-submission of the Certificate of Completion by the City

Engineer, thus, various completed infrastructure projects totaling

P117.271 million were not yet recorded to its proper PPE

accounts, including its corresponding depreciation charges;

Understated Cash in Bank-Local Currency, Time Deposits under

SEF by P106.277 million when compared with the bank/passbook

balances;

Unrecovered advance payments/mobilization fees granted to

various contractors totaling P23.490 million despite the

cancellation/termination of the projects;

Unremitted taxes withheld due to BIR totaling P4.310 million;

266


Receivable accounts totaling P3.605 million, outstanding for 10

years or more not applied authority for write-off;

Unreliable balances of the Receivable accounts due to the

negative balances of subsidiary ledgers totaling P1.668 million;

and,

Unrecovered cash shortages from under- remittance of

collections of taxes, revenues and receipts, and from receipt of

trust liabilities totaling P.933 million.

Carcar City Adverse

Cash in Bank – Local Currency, Current Account (1-01-02-010)

is not reliable due to the continued existence of unreconciled

differences already noted in previous years totaling P12.999

million and which include the amount of P24.148 million from a

closed PNB account;

Thirty six (36) accounts – cash, receivables and payables, had

negative balances and some accounts had no subsidiary ledgers

and remained unadjusted and were not disclosed in the Notes to

Financial Statements and account balances reported in the trial

balance do not reconcile with the balances reported in the

subsidiary ledgers, thereby casting doubt on the accuracy in the

presentation of the financial statements;

Real Property Tax Receivable/Special Education Tax Receivable

were not equal to its reciprocal accounts-the Deferred Tax

Income and real property tax was not a major source of fund in

the preparation of the budget as collections thereof in the

previous year was relatively low;

Progress payments for the new Carcar City Hall and Public

Market were booked directly as Buildings (1-07-04-010) and

Other Infrastructure Asset (1-07-03-990) and Markets (1-07-04-

040), respectively, and were not booked as Construction in

Progress–Buildings and Other Structures (1-07-10-030); and,

Abnormal balance of Advances to Contractors (1-05-01-010)

account under the Trust Fund amounting to P1.113 million due to

the transfer of the unutilized appropriation for the Riprapping of

Carcar River under the General Fund Books to Trust Fund books

under Trust Liabilities-DRRM Fund account.

Danao City Unqualified

Lapu-Lapu City Qualified Property, Plant and Equipment (PPE) account balance as of

December 31, 2018 totaling to P3.113 billion and P499.623

million under the General Fund (GF) and Special Education Fund

(SEF), respectively, were not established due to the discrepancy

267


noted totaling P391.824 million between the inventory list of the

General Services Office (GSO) and the General Ledger (GL)

balance and unserviceable properties amounting to P29.195

million were still recorded as PPE; and,

Due From Other Funds in the General Fund (GF) totaling P17.566

million Special Education Fund (SEF) amounting to P.017 million

and in the Trust Fund (TF) amounting to P34.107 million did not

reconcile with its respective reciprocal accounts Due To Other

Funds in the GF totaling P88.782 million, in the SEF amounting

to P.092 million and in the TF amounting to P32.282 million with

a difference of P69.485 million, thus, casting doubt on the

accuracy of the amounts presented in the financial statements.

Mandaue City Qualified PPE items in the financial statements of P3.891 billion did not

reconcile with the actual physical count of P810.073 million

conducted by the General Services Office with a disparity

amounting to P3.081 billion which affect the fair presentation of

the account in the financial statements; and,

Transferred Assets in the form of Drugs and Medicines received

from the Department of Health in the total amount of P1.087

million for the period 2016-2018 was not recorded in the books of

accounts.

Naga City Qualified Property, Plant and Equipment accounts totaling P1.904 billion

(excluding Construction in Progress accounts), are not reliable

due to the unreconciled difference of P127.076 million between

accounting records and physical inventory report, and the

inclusion of unserviceable and other items which could no longer

be identified and not found;

Supplies inventory accounts per accounting records totaling

P44.747 million and per inventory report of the GSO of P1.045

million showed a difference of P43.701 million due to: a) non-

submission of the inventory reports on some accounts; b) non-

conduct of reconciliation between the balances per books and

inventory reports; and c) non-issuance of Requisition and Issue

Slip, thereby affecting the reliability of the accounts in the financial

statements; and,

Due to LGUs account totaling P45.216 million in the General

Fund and Trust Fund is not reliable due to erroneous

classification of accounts totaling P10.611 million of which P.168

million and P10.443 million should be booked to Due to NGAs

and Trust Liabilities, respectively.

Talisay City

Qualified

Unreconciled difference of P4.524 million between the book and

bank balances of the Cash in Bank account;

268


Unreliable balance of the Receivable accounts due to the non-

recording of the accounts receivables from stall rentals


Misstatements of the inventory and expense accounts amounting

to P39.629 million due to the outright recording as expenses of

the procured materials and supplies for the year 2018;

Unreliable balance of the Inventory accounts amounting to

P23.681 million due to the non-preparation of the Summary of

Supplies and Materials Issued (SSMI) and the Report of Physical

Count of Inventories (RPCI); and,

Unreliable one hundred ninety (190) general ledger accounts

consisting of the balances of assets, liabilities, income and

expense accounts in the General, Special Education and Trust

Funds totaling P2.082 billion, P188.744 million and P66.736

million, respectively due to the non-reparation of the subsidiary

schedules.

Toledo City Qualified Property, Plant and Equipment accounts amounting to P2.437

billion cannot be relied upon due to the variances noted per

accounting records and per inventory report of the General

Services Department (GSD);

Cash-in-Bank – Local Currency Account balance of P2.493 billion

is doubtful due to unreconciled amount of P14.921 million

between the General Ledger balance and the bank balance per

confirmation replies from the concerned banks as no bank

reconciliation statements were prepared and submitted for the

period October to December 2018; and,

Dormant receivable accounts totaling P1.088 million still carried

in financial statements are not supported by subsidiary ledgers

casting doubt on the reliability of the said amounts.

Municipalities:

Alcantara Qualified Due to the failure of Management to prepare and submit the

updated inventory report of the Property, Plant and Equipment

totaling P101,830 million or 54% of the total asset and the none

maintenance of PPE ledger cards rendering the existence,

valuation and correctness of the total PPE balances doubtful.

Alcoy Adverse Subsidiary Ledgers for Cash – Local Treasury (Account 1-01-01-

010) was not maintained by the Municipal Accountant while

cashbook maintained by the Municipal Treasurer was not

reconciled with the accounting records every month, thus the

accuracy, validity and reliability of account balance amounting to

P2.167 million is doubtful; and,

269


Disbursements totaling P11.097 million and other reconciling

items noted in the bank reconciliation statements with a net

overstatement of P2.657 million have not been recorded and/or

adjusted in the books while Cash in a Savings Account amounting

to P4.305 million was not recorded and reported in the Financial

Statements (FS) which understated the Cash-in-Bank balance by

P4.282 million as of December 31, 2018.

Alegria Management Letter

Due to Non-Submission of Financial Statements for CY 2018.

Aloguinsan Qualified Property, Plant and Equipment account balance as of December

31, 2018 stated as P66.603 million could not be ascertained by

reason of non-preparation or non-submission of physical

inventory report.

Argao Management Letter


Asturias Unqualified

Badian Qualified Due from Other Funds and Due to Other Funds, for all funds in

the amount of P9.870 million and P11.604 million, respectively,

showed a total difference of (P1.734 million) due to unadjusted

reconciling items.

Balamban Qualified Non-submission of the completed Report on the Physical Count

of Property, Plant and Equipment (RPCPPE) totaling to P728.131

million, thereby resulting to the audit team’s inability to ascertain

the existence, completeness, and valuation of the account as of

December 31, 2018;

Road Networks and Flood Control Systems accounts totaling

P291.051 million were not provided with Allowance for

Depreciation for CY 2015 to 2018 or a month after the

construction was completed and turned-over, thus understating

the expenses and overstating the net income and PPE accounts

presented in the financial statement as of December 31, 2018;

Road Network System was not also presented in the Notes to

Financial Statements and included in the Report on the Physical

Count of Local Road Networks as required

Bantayan Qualified Non-preparation and submission of updated inventory reports

rendered the non-reliability of the Property, Plant and Equipment

account balances totaling P243.787 million; and,

Loans Receivable-Others account recorded under the General

Fund of the Municipality totaling P11.902 million

as of December 31, 2017 have been outstanding for more than

270


eight (8) years and could not be ascertained due to non-

submission of schedules and pertinent records or documents

making the account doubtful as to its collectability, validity and

propriety.

Barili Qualified Property, Plant and Equipment account balance as of December

31, 2018 stated as P225.003 million (net of depreciation) could

not be ascertained by reason of non-preparation and non-

submission of physical inventory report.

Boljoon Qualified Cash In Bank amounting to P10 million was recorded under the

Savings, instead of Current account, and cash balance per books

has a net understatement of P.137 million due to unadjusted

reconciling items which misstated the Cash balance, respectively,

as of December 31, 2018.

Borbon Management Letter

Carmen Qualified Property, Plant and Equipment (PPE) account balances totaling

P299.775 million which is 56.02% of its total assets are doubtful

due to the unreliable report of physical count of PPE which was

materially incomplete and lacking vital information on values and

description; and,

Correctness of the ledger balances of PPE cannot be ascertained

because no complete and updated PPE ledger cards were

maintained by the accounting department.

Catmon Qualified Property, Plant and Equipment (PPE) account balances totaling

P120.206 million are doubtful due to the unreliable report of

physical count of PPE which was materially incomplete and

lacking vital information on values and description and the

correctness of the ledger balances of PPE cannot be ascertained

because no complete and updated PPE ledger cards were

maintained by the accounting department.

Compostela Qualified Property, Plant and Equipment (PPE) accounts with a total of

P198.885 million as of December 31, 2018 were noted with

deficiencies, to wit: a) Report on Physical Count of PPE was not

submitted; b) PPE Ledger Cards included CY 2018 acquisitions

only; and, c) PPE account balances and depreciation were not

supported with schedules; and,

Financial assistance amounting to P.149 million given to the

barangays were not supported with documents required and were

outright recorded as expenses without the necessary liquidation.

Consolacion Management Letter

271


Cordova Management Letter

Daanbantayan Qualified Property, Plant and Equipment (PPE) account balances of

P207.990 million cannot be completely validated because the

accounting and property records were incomplete & unreconciled

and a physical inventory was not conducted for the past several

years to check the existence and actual physical condition of the

assets and the identified PPEs were not provided with

depreciation charges;

Failure to transfer the unexpended balances of the Local Disaster

Risk Reduction and Management Fund (LDRRMF) to the Trust

Liability-DRRM account in the Trust Fund books amounting to

P22.012 million, thereby rendering the balance of the account

amounting to P6.429 million as of December 31, 2018 inaccurate

and the LDRRMF utilization report of the Municipality were not

supported with separate Registries of Appropriations, Allotments

and Obligations (RAAO) as required; thus, the unutilized

balances cannot be verified;

Cash advances on Supplemental Feeding Program (SFP)

totaling P4.617 million were already recorded as fully liquidated

in the Municipality’s books even though the liquidation reports

were either not submitted or the supporting documents were

insufficient to the amount granted thereby overstating the

expenses and understating the receivable & government equity;

thus, the propriety and validity of the recorded expenses cannot

be ascertained and disbursement voucher and its supporting

documents for the purchase of 812 sacks of rice amounting to

P1.624 million which was paid to Brynt Marketing on September

4, 2018 was not presented for audit;

Various asset & liability accounts totaling P3.552 million and

P.131 million, respectively, were doubtful due to its dormancy

status and absence of Subsidiary Ledgers; and,

Due from Other Funds account in the amount of P1.908 million

did not reconcile with the consolidated balance of the Due to

Other Funds amounting to P1.493 million, thereby rendering both

accounts unreliable.

Dalaguete Qualified Funds received for specific purposes totaling P19.300 million

were recorded under the General (GF), instead of under the Trust

Fund (TF), while economic enterprises operated by the

Municipality of Dalaguete have no special accounts in the GF and

not all income-generating activities were reported in the financial

statements while reconciling items noted in the bank

reconciliation statements with a net overstatement of P2.691

million have not been adjusted in the books which misstated the

272


Cash-in-Bank balance as of December 31, 2018 and casts doubt

on the propriety of reported income.

Dumanjug Qualified Due from Other Funds and Due to Other Funds were not

reconciled showing a discrepancy at year-end amounting to

P15.252 million;

The General Fund year-end balances of statutory mandatory

deductions did not reconcile with the December withholding

amounts by P2.354 million;

Entries in Statement of Changes in Net Assets/Equity totaling

P6.604 million were not in accordance with IPSAS 3; and,

Property, Plant and Equipment (PPE) stated as P165.189 million,

(net of depreciation) as of December 31, 2018 could not be

ascertained due to the inability of the management to conduct and

submit a report on the physical inventory of the same.

Ginatilan Qualified Receivable accounts totaling P7.710 million were unreliable due

to absence of subsidiary records and source documents, thus

schedules provided did not contain the required details precluding

complete review of items in the schedule;

Property, Plant and Equipment accounts totaling P131.536

million are unreliable due to: (a) inclusion of unserviceable

properties, P2.369 million; (b) unaccounted properties, P.246

million; and (c) small items capitalized, P.110 million; and,

Physical existence of Breeding Stocks and Agricultural Produce

for Distribution totaling to P.746 million is unascertained due to

the non-submission of list of beneficiaries and trust/memorandum

of agreement with the recipients, thus rendering the balances

unreliable.

Liloan Qualified Deficiencies were noted on Property, Plant, and Equipment (PPE)

accounts with a total of P380.139 million as of December 31,

2018;

Financial Assistance amounting to P3.993 million given by MLGU

Liloan to the barangays and the Liga ng mga Barangay were not

covered with documents and were outright recorded as expenses

without the necessary liquidation; and,

Fund transfers to two hospitals amounting to P1.300 million were

outright recorded as Donations (5-02-99-080) and without the

required liquidation.

Madridejos Management Letter


273


Malabuyoc Adverse

Seventy-four (74) account balances in the total amount P232.189

million are not supported with subsidiary schedules since 2001,

thus rendering such balances unreliable;

Non-conduct of complete physical count of all its properties/ non-

submission of the report on Physical count of Property, Plant and

Equipment (RPCPPE) since 2009 or earlier and non-conduct of

reconciliation of property and accounting records of PPE

balances totaling P116.880 million (net), thus existence of assets

and accuracy of property records are unascertained;

Loans Payable-Domestic amounting to P11.826 million is

unreliable due to: (a) erroneous recording of monthly

amortization; (b) non-presentation of its current portion under

Current Liabilities section in the financial statements; and, (c)

non-submission of complete loan documents; and,

Disbursements totaling P2.662 million from January to October

2018 and all disbursement vouchers from November to

December 2018 could not be verified due to non-submission of

the disbursement vouchers and its supporting documents.

Medellin Qualified Property, Plant & Equipment account balance of P193.521 million

(net of depreciation) cannot be determined due to inadequate and

unreconciled subsidiary and property records and no physical

inventory was conducted to identify and check the existence and

condition of the assets;

Cash advances balance of P11.831 million remained unliquidated

even if the purposes for which these were given have already

been served;

Sixteen (16) projects / programs / activities under the Trust Fund

totaling P1.060 million from Due to Other National Government

Agencies (NGAs) account were not yet implemented or

implemented but not yet liquidated thereby unexpended balances

were not returned to the concerned source agencies; and,

Funds totaling P1.083 millionreceived in CY 2018 and prior years

as financial assistance for the implementation of certain

programs/projects booked under Due to LGUs account remained

idle due to failure of the Municipal Accountant to fully liquidate or

return the unused funds to the source agency.

Minglanilla Management Letter

Moalboal Management Letter

274


Oslob Qualified Financial Statements (FS) and related accounting reports for CY

2018 were not submitted within the prescribed period, preventing

the timely audit of transactions and accounts; while procurements

of various spare parts for municipal vehicles and supplies

aggregating P1.456 million were not taken up as “Other Supplies

and Materials Inventory” but recorded directly as an expense

instead of upon actual issuance thereof which understated the

Inventory account as of a particular period.

Pilar Qualified Physical Inventory of PPE not completed during the year and non

preparation of subsidiary ledgers/cards per item of PPE.

Pinamungajan Unqualified

Poro Qualified Unreliable inventory accounts due to the non-maintenance and

non-preparation of perpetual inventory records at the Accounting

Division and stock cards and property cards at the General

Service Office; and,

Several assets and liability accounts have negative balances, a

condition which may mislead the user of the financial statements

in their economic decisions and accuracy and validity of these

accounts were doubtful due to lack of data and subsidiary

ledgers; and,

Due from Other Funds and Due to Other Funds accounts showed

unreconciled balances amounting to P1.146 remained

unliquidated, thereby casting doubts on the accuracy and

reliability of the balances presented in the financial statements.

Ronda Management Letter

Samboan Qualified Property, Plant and Equipment account balances including

Breeding Stocks totaling P259.634 million are unreliable due to

the inclusion of properties amounting to P37.491 million without

breakdown or details, with unascertained physical existence in

the amount of P72.452 million and P2.156 million unserviceable

properties, thus management’s assertions on existence,

classification and understandability are not achieved; and,

Forty general ledger accounts were unreliable due to the absence

of subsidiary schedules supporting such accounts with balances

totaling P59.445 million, thus, the accuracy of the balances of

assets and liabilities in the General, Special Education and Trust

Funds could not be ascertained and relied on.

San Fernando Management Letter

Due to non-submission of financial statements.

275


San Francisco Management Letter

Due to non-submission of financial statements.

San Remigio Qualified Cash advances of P1.666 million remained unliquidated even if

the purposes for which these were given have already been

served;

Depreciable Property, Plant and Equipment (PPE) costing

P45.286 million, equivalent to 19.75% of total depreciable PPE of

P229.234 million were not provided with Accumulated

Depreciation, resulting in the understatement of Depreciation

Expenses and corresponding overstatement of Net PPE and

Government Equity;

Inventory accounts totaling P.953 million could not be determined

due to inadequate records and failure to conduct physical count

on the reported balance and Summary of Supplies and Materials

Issued were not regularly prepared;

Funds totaling P13,728 million and P1.265 million received in CY

2017 and prior years as financial assistance for the

implementation of certain programs/projects booked under Due

to NGAs & Due to LGUs account, respectively, were either

unutilized; and,

Real Property Tax (RPT) / Special Education Tax (SET)

Receivables totaling P15.860 million remained uncollected as of

December 31, 2018 which if management collected could have

been used to augment the limited resources of the Municipality to

finance other undertakings.

Santa Fe Unqualified

Santander Qualified Non-submission of subsidiary schedules to support one hundred

two (102) account balances in the trial balance totaling P294.525

million, thus, rendering balances of accounts in the financial

statements unreliable;

Receivables in the amount of P19.212 million included P10.423

million representing the unrecovered amount of deposit in the

Rural Bank of Santander, Inc. (RSBI), which was held under

receivership by the Philippine Deposit Insurance Commission

(PDIC) in 1999; and,

Marine Engines and Motorized Bancas acquired in 2010 and

2013 totaling P2.811 million were not recorded in the

municipality’s books of accounts.

276


Sibonga

Qualified


could not be ascertained as physical inventory was not conducted

for more than five years and the unavailability of adequate

records made it difficult to apply other alternative audit

procedures;

Land Account totaling P11.808 million was only supported with

Tax Declarations instead of the Transfer Certificate of Titles for

the 67 municipal lots;

Dormant Breeding Stocks Account in the amount of P1.993

million was written-off from the books of accounts; and,

Cash in bank – local currency totaling P188.295 million cannot be

ascertained as monthly bank reconciliation statements were not

prepared.

Sogod

Qualified

Due to the unreconciled balance of the Property, Plant and

Equipment (PPE) in the amount of P17.221 million, thus the

accuracy of the recorded PPE was doubtful.

Tabogon

Qualified

Fifteen (15) projects/programs/activities under the Trust Fund

totaling P31.323 million from Due to Other National Government

Agencies (NGAs) account were not yet implemented or

implemented but not yet liquidated thereby unexpended balances

were not returned to the concerned source agencies;

Funds totaling P.985 million received in CY 2014 and prior years

as financial assistance for the implementation of certain

programs/projects booked under Due to LGUs account remained

idle due to failure of the Municipal Accountant to fully liquidate or

return the unused funds to the source agency;

Land account totaling P12.220 million could not be ascertained

due to the absence of valid proofs of ownership;

Reconciling items in the Bank Reconciliation Statement (BRS) of

all Funds which had accumulated to a net understatement of

P.412 million over the years remained unrecorded / unadjusted

due to the inability of management to secure proper

documentation to determine the nature of the transactions as

basis for adjustments in the books; and,

Breeding Stocks of P3.310 million was unreliable due to

erroneous recognition, inaccurate measurement and non-

monitoring of the account.

277


Tabuelan Unqualified

Tuburan Adverse

Incomplete conduct of physical inventory of all its properties,

hence, the existence, completeness and valuation of the

Property, Plant and Equipment (PPE) account in the books

totaling P344.289 million (inclusive of depreciation) cannot be

relied upon as of year-end;

Non-recognition in the books of the Public Infrastructure accounts

as of December 31, 2012 totaling P52.119 million understated the

PPE accounts by the same amount; and,

Non-capitalization of the interest incurred in CY 2017 and 2018

for loans availed for the construction of Tuburan Two-Storey

Public Market totaling P1.191 million has overstated the

expenses and understated the net income realized as well as

understating the CIP-Building and Other Structures account by

the same amount in the financial statements as of December 31,

2018.

Tudela Qualified Physical Inventory of PPE not completed during the year and non

preparation of subsidiary ledgers/cards per item of PPE;

Failure of the municipality to set up the Real Property Tax

Receivables and Special Education Tax Receivables since 2012

have rendered the accuracy of the account balances

doubtful;and,

Transactions from January 2009 up to June 2010 remained

unrecorded in the books due to non-submission of transaction

documents as basis for recording.

Siquijor Qualified Land account of P47.996 million is not reliable because of the

unreconciled difference of P20.385 million as compared with the

report by the General Services Office (GSO) and the reported

balance includes values of parcels of land that are not covered by

Certificates of Title in the name of the Provincial Government as

compared with the accounting records;

Movable Property, Plant and Equipment (PPE) accounts of

P233.857 million per accounting records remained unreconciled

with the Report of Physical Count of Property, Plant and

Equipment (RPCPPE) of the GSO as at year-end showing a


Inventories of P25.590 million could not be ascertained due to the

non-conduct of physical count, while the Accounting Office and

the GSO did not maintain property ledger cards and stock cards;

278


Due from Other Funds and Due to Other Funds showed an

unreconciled balance of P3.426 million; and,

Contract costs of infrastructure projects were taken up as debit to

Construction in Progress and credit to Accounts Payable

accounts instead of recording to a separate registry to control the

appropriations, allotments and obligations.

Municipalities

Enrique Villanueva Qualified Inventories costing P1.115 million and movable properties with

net book value of P6.741 million could not be ascertained due to

the non-conduct of physical count, while the Accounting and the

Municipal Treasurer’s Office did not maintain property ledger

cards and stock cards, respectively; and,

Due from Other Funds and Due to Other Funds showed an

unreconciled balance of P.063 million, thus affecting the reliability

of the financial statements.

Larena Qualified Movable Property, Plant and Equipment and Inventories

accounts totaling P12.110 million or 9.49% of the total PPE as of

December 31, 2018, could not be ascertained since these were

not supported by physical inventory report due to the non-conduct

of actual physical count and inventory taking.

Lazi Management Letter

Maria Qualified Property, Plant and Equipment and Inventories accounts totaling

P7.500 million or 45% of the total PPE as of December 31, 2018,

could not be ascertained since these were not supported by

physical inventory report due to the non-conduct of actual

physical count and inventory taking.

San Juan Qualified Movable properties in the Property, Plant and Equipment (PPE)

accounts with a net book value of P11.120 million could not

ascertained since the Municipality did not establish its existence

and valuation due to the continuous non-conduct of physical

count and the non-maintenance of property ledger cards and

stock cards by the Municipal Accountant and Municipal

Treasurer; and,

Breeding Stocks in the total amount of P.334 million remained

unadjusted despite the granting of relief of accountabilities and

the recommendations to write-off from the books the

corresponding costs of the deceased animals and the agency did

not prepare the inventory report of the breeding stocks and

reconcile the same with the accounting records which render the

account unreliable.

279


Siquijor Qualified Property, Plant and Equipment and Inventories accounts totaling

P21.160 million or 14.48% of the total PPE, could not be

ascertained since these were not supported by physical inventory

report due to the non-conduct of actual physical count and

inventory taking.

Region VIII – Eastern Visayas

Biliran Qualified Public infrastructure projects implemented prior to CY 2015 totaling P176 million or 75% of the total cost in the Registry of Public Infrastructures, were not transferred in CY 2018 to the Infrastructure Assets account in the Property, Plant and Equipment.

Municipalities:

Almeria Qualified Land and Infrastructure Asset accounts in the Property, Plant and

Equipment are unreliable due to the following: Land owned by the

LGU with assessed value of P2.800 million were not recorded,

road projects implemented prior to CY 2015 at P12 million were

not transferred from the Registry of Public Infrastructures, the

cost of repaired roads was not derecognized, impairment loss on

damaged property was not computed nor recorded and

computation of accumulated depreciation was in lump sum

instead of per individual account in the PPE.

Biliran Qualified Public infrastructure projects implemented prior to CY 2016

totaling P3.800 million were not transferred to the Infrastructure

Asset account in the Property, Plant and Equipment (PPE) in CY

2018 from the Registry of Public Infrastructures.

Cabucgayan Qualified Certain accounts were unreliable due to the following:

Infrastructure assets under Property, Plant and Equipment

totaling P30 million was not provided with depreciation; Inter-

agency payables has and unreconciled difference of P21.600

million between balance per books and per bank; and Cash in

Bank account was understated by P5.700 million due to

unrecorded disbursements.

Caibiran Qualified Property, Plant and Equipment (PPE) account with a balance of

P99 million as of December 31, 2018 is inaccurate and unreliable

due to unrecorded lands owned by the LGU amounting of P.711

million, unrecorded donated assets of P.123 million and non-

provision of depreciation on properties costing P32 million.

Culaba Qualified Property, Plant, and Equipment (PPE) totaling P98 million as of

December 31, 2018 were inaccurate and unreliable due to the

following: 1.) donated assets totaling P.377 million were not

recorded 2.) ownership of lands recorded at P2.300 million were

not transferred to the LGU; 3.) physical count of properties was

not conducted and the related Report on the Physical Count of

280


Property, Plant, and Equipment (RPCPPE) was not prepared and

reconciled with accounting records; 4.) Property Cards and PPE

Ledger Cards were not maintained, and; 5.) unserviceable

properties were not disposed.

Kawayan Qualified Property, Plant and Equipment (PPE) with a balance of P120

million as of December 31, 2018 is unreliable due to the

following: lands owned by the LGU with appraised value of

P6.300 million and donated assets of P1.300 million were not

recorded; the carrying value of repaired infrastructure assets

were not derecognized; and depreciation of some properties were

not provided; and,

Due to NGAs account amounting to P31.700 million is unreliable

as it includes the amount of P12 million which had been carried

in the books for nearly ten years even if it was already utilized.

Maripipi Qualified Property, Plant and Equipment (PPE) with a balance of P33

million as of December 31, 2018 could not be ascertained caused

by the following: properties without any records on file were

valued at P1.00 or were not assigned any value at all instead of

determining its fair market value, depreciation was not provided

for CY 2018, various equipment were difficult to identify as these

were not labelled with Property Tags, Property Acknowledgement

Receipts (PAR) on issued equipment were not renewed every

three years and Property Cards were not maintained and conduct

of the annual physical count of its properties, prepare the related

Report on the Physical Count of PPEs and reconcile the same

with accounting and property records remained unimplemented

audit recommendations for the past years.

Naval Qualified Public infrastructure projects implemented prior to CY 2015

totaling P3.300 million or 75% of the total cost in the Registry of

Public Infrastructures, were not recorded in CY 2018 to the

Infrastructure Assets account in the Property, Plant and

Equipment.

Eastern Samar Qualified Road Networks account amounting to P487.909 million could not be ascertained due to: a) no disclosure of total road network system in the Notes to Financial Statements (FS); b) non-preparation and non-submission of Report on Physical Count of Local Road Network (RPCLRN) and ; c) non-segregation of costs for each road component of local roads in the Report of Local Road Network (RLRN);

Accounts payable recorded at year-end amounting to P153.362 million could not be ascertained due to non-submission of documents to support that all the transactions were founded on valid claims and excess obligations amounting to P1.211 million were not adjusted and absence of subsidiary ledgers weakened accounting controls over monitoring of the Accounts Payable account;

281


Local Disaster Risk Reduction and Management Fund (LDRRMF) for CY 2018 on Quick Response Fund (QRF) and Maintenance and Other Operating Expenses (MOOE) in the amount of P40.568 million instead of transferring actual cash of the same amount and the utilization of the LDRRMF for the year was not completely disclosed in the Notes to FS;

Due from Other Funds and Due to Other Funds with reported balances of P95.740 million and P100.277 million, respectively, as of December 31, 2018 are of doubtful accuracy with a total variance of P4.537 million due to erroneous recording of transactions in the accounts;

Stale checks in the accumulated amount of P3.690 million remained as reconciling items in the Bank Reconciliation Statements (BRS) as of December 31, 2018 and were not reverted to cash; and,

The submitted FS were not compliant with the provisions of PPSAS No. 1 on Presentation of Financial Statements and accounting errors/deficiencies were noted in various accounts aggregating P.830 million.

City

Borongan City Modified/ Qualified

Property, Plant and Equipment (PPE) account balances per books with net book value of P848.457 million remained doubtful due to the non-reconciliation between the records of the Office of the City Accountant and those of City General Services Office (CGSO) because of incomplete Property Ledger Cards (PLC) and Property Cards (PC), respectively and Report of Physical Count of Property, Plant and Equipment (RPCPPE) does not agree with the total amount of PPE in the record of the Office of the City Accountant for failure on the part of CGSO to include real properties, complete disclosure of unit value and to account for the 431 properties at the time of physical inventory in the RPCPPE.

Road Networks account with the balance of P139,418 million as of December 31, 2018 could not be ascertained due to the non-preparation and submission of Local Road Inventory and Road Map;

Due from Other Funds and Due to Other Funds, for all funds, do not reconcile by P27.698 million as of December 31, 2018;

Various liability accounts totaling P6.364 million aging two years and more are doubtful;

Provision of depreciation expense of all infrastructure projects completed during CY 2017 worth P3.347 million was overlooked and was not recognized and corrected in the books;

Depreciation expense is overstated by P2.538 million due to whole-year recognition of depreciation of PPE disregarding the actual acquisition/completion date;

282


No adequate disclosures in the Notes to the Financial statements pertaining to the details of the Loans Payable-Domestic account with an outstanding balance of P8.215 million as of December 31, 2018, thus resulting in the unaccounted loans payable in the amount of P2.775 million; and,

Cash-Local Treasury account at year-end in the General Fund books in the amount of P.282 million consisted of prior year’s unreconciled balances, caused by the failure of the City Treasurer and the City Accountant to render a complete and accurate recording of the collections and deposits.

Municipalities

Arteche Qualified Reconciliations between the book and bank balances of the cash in bank accounts were not prepared regularly and correctly resulting to the treatment of eight (8) checks totaling P.057 million as outstanding checks even if the same were negotiated or paid and other errors in the reconciliation, thereby affecting the accuracy of the P13.689 million balance of Cash in Bank-LCCA.

Balangiga Adverse Cash in Bank-Local Currency, Current Account (CIB-LCCA) balance of P91.009 million is doubtful because of unreconciled amounts totaling P6.161 million;

Discrepancy of P.482 million was noted between receivables reported in the FS and the Notes to FS;

Doubtful presentation of total PPE balance of P178.135 million due to discrepancy of P69.776 million between the Financial Statement and the Notes to FS, difference by P.389 million between the ending balance in 2017 and beginning balance in 2018 due to unreconciled costs of 6 PPE items presented in the FS and RPCPPE, incomplete recording of completed projects totaling to P32.602 million, and error in addition of total PPE in the amount of P.158 million in the Notes to FS;

Medical, Dental and Laboratory Supplies for Distribution in the amount of P.095 million recorded as Inventory in the FS was not disclosed in the Notes to FS;

Inter-Agency Payables account has a discrepancy of P51.731 million between the FS and the Notes to FS, and discrepancy of P4.058 million was noted between the GL and FS;

Trust Liabilities account in the FS has a difference of P5.400 million from the Notes to FS and P.539 million discrepancy between the GL and FS;

Variance of P21.712 million between the FS and Notes to FS were observed for the accounts Shares, Grants and Donations, Maintenance and Other Expenses, Non-Cash Expenses, Financial Assistance/Subsidy to LGUs, Collections from Taxes, and Other Receipts;

283


Unaccounted difference by P.010 million of reciprocal accounts, Due from Other Funds and Due to Other Funds;

Non-recognition of Property Tax Receivables and Deferred Real Property Tax Income, collectibles from concerned constituents in Calendar Year (CY) 2018; and,

Revenues and Expenses reported in the Statement of Comparison of Budget and Actual Amounts have total difference of P3.198 million, as against the (SFPe) in the General Fund.

Balangkayan Qualified PPE account balance of P111.059 million as of December 31, 2018 could not be ascertained due to the non-reconciliation between the records of the office of the Accountant and those of the General Services Office (GSO) because of incomplete Property Ledger Cards (PLC) and Property Cards (PC);

Road Networks of P 10.547 million for the year 2018 could not be ascertained of its reliability due to the non-presentation and submission of Local Road Inventory and Road Map and not properly recorded and presented in the statement of financial position according to the provisions of COA Circular No. 2015-008;

Loans Payable-Domestic amounting to P.654 million is understated by P13.967 million because of erroneous accounting entries made and no adequate disclosure in the Notes to the Financial Statements pertaining to the details of the Loans Payable; and,

Cash, Local Treasury account at year-end in the General Fund

books in the amount of P1.186 million consisted of prior year’s

unreconciled balances and current years erroneous entries,

caused by the failure of the Municipal Treasurer and Municipal

Accountant to render a complete and accurate recording of the

collections and deposits.

Can-avid Qualified Cash in Bank account balance for the General Fund is understated by P7.311 million due to failure of the Municipal Accountant to prepare bank reconciliation statements and identify items that could have needed adjustments, thus may render the Financial Statements unreliable if aggregated with other misstatements and found material in amount; and,

Building, Motor Vehicle, and Office Equipment accounts of the agency were not properly recorded and their corresponding depreciation were computed erroneously due to the laxity of the Municipal Accountant in reviewing and correcting their records and reports resulting in an overstated account balance of Motor Vehicles and Office Equipment of P1.391 million and P.970 million, respectively, and understatement of P2.920 million for the Building account and seven (7) Motor Vehicle, and two-hundred four (204) Office Equipment items per Report on Physical Count of Property, Plant and Equipment was not included in the PPE per books of accounts, due to non-maintenance of the PPE Ledger Cards (PPELC) by the municipal accountant and non-reconciliation of his records with the RPCPPE of the General Services Officer.

284


Dolores Qualified Property, Plant and Equipment is doubtful because of the discrepancies of balances per Books and per Report on Physical Count of Property, Plant and Equipment with a net amount of P22.907 million caused by non-reconciliation by the accounting records and records of the General Services Officer.

General MacArthur Qualified Various account balances totaling P14.736 million in the financial statements (FS) were of doubtful accuracy and reliability, due to deficiencies found in audit, and failure to provide a copy of complete General Ledger and Subsidiary Ledgers to support the balance presented in FS.

Giporlos Qualified Loans payable with year-end outstanding balance of P6.615

million were not fully disclosed in the notes to the financial

statements; and,

Use of inappropriate account to take-up the wages for the hired

job orders totalling P600,000.00 resulted to improper

classification and presentation of the financial statements.

Guiuan Qualified Inventories are carried in the statement of financial position at

P2.470 million, of which it increase by P2.435 million from the

previous year. Management has not stated the inventories at the

lower of cost and net realizable value but has stated them solely

at cost.

Hernani Qualified Property, Plant and Equipment (PPE) amounting to P120.342 million cannot be fully ascertained due to: 1) failure of the agency to prove the existence of ICT Equipment amounting to P.920 million; 2) the agency did not conduct physical count of inventory at year end; 3) discrepancy between the submitted Inventory List of PPE and the balances reflected in the FS amounting to P9.904 million; and 4) non-preparation of PPE ledger cards and Property Cards.

Jipapad Qualified Cash in Bank-LCCA account with a balance of P 49.839 million could not be ascertained due to non-preparation of bank reconciliation statement resulting to unreconciled difference of P34.914 million; and,

Property, Plant and Equipment of P58.840 millionis unreliable due to failure of the LGU to conduct physical inventory of its properties and non-provision of depreciation during the year for the Water System and Land Improvements costing P19.977 million.

Lawaan Adverse Property, Plant and Equipment and Inventories amounting to P117.967 million and P6.343 million respectively could not be ascertained due to the absence of records and reports, and Property, Plant and Equipment of P27.771 million disclosed under Noncurrent Assets;

Due from Other Funds and Due to Other Funds account amounting to P5.675 million were presented in the noncurrent section of the Assets and Liabilities respectively wherein these should be presented as current;

285


Loans Payable-Domestic is overstated by P1.846 million due to erroneous recording of amortization;

“Due to BIR”, “Due to GSIS” and “Due to PAG-IBIG” showed a debit balance in the General Fund financial statements of P.196 million, P.212 million and P.056 million, respectively, said over remittance could not be verified due to the absence of records;

Payables account under Current Liabilities in the Statement of Financial Position amounted to P11.651 million but amounts disclosed in the Notes to Financial Statements totaled only to P11.566 million having a difference of P.085 million;

Supplies and Consumables Used account presented in the Statement of Financial Performance amounted to P10.495 million, however, disclosure of the account in the Notes to Financial Statements totaled only to P10.479 million having a difference of P.016 million; and,

Road Networks of P10.184 million for the year 2018 could not be ascertained of its reliability due to the non-preparation and submission of Local Road Inventory and Road Map.

Llorente Unqualified

Maslog Qualified Cash in Bank account balances for the General Fund, Trust Fund and Special Education Fund totalling P75.788 million is non-reliable due to non-submission of Bank Reconciliation Statements.

Property, Plant and Equipment account balance of P89.800 million is doubtful due to absence of complete inventory reports; and,

Trust Liability-DRRM account amounting to P7.452 million is understated by such amount due to failure of the Accountant to transfer unexpended balances of DRRM Funds from prior years.

Maydolong Qualified Road Networks of P17.648 million for the year 2018 could not be ascertained of its reliability due to the non-preparation and submission of Local Road Inventory and Road Map;

Negative or abnormal balances were incurred under Asset and

Liability Accounts amounting to P.479 million and P.607 million,

respectively, due to erroneous recording of transactions;

Loans Payable – Domestic recorded in Trust Fund (TF) amounting to P13.245 million was overstated by P2.232 million due to incorrect recording of loan repayments for year 2017 and 2018 and interest expense of P.350 million was not taken up in the books and no adequate disclosure in the Notes to the Financial Statements pertaining to the details of the Loans Payable; and,

Depreciation expenses were still not recognized in the books.

286


Mercedes Adverse Cash in Bank has an unreconciled amount of P.733 million arrived

at comparing the amount recognized per books and the amount

per audit;

Property, Plant and Equipment of P37.992 million is not properly

and fairly presented in the financial statements due to non-

computation and recording of accumulated depreciation of Water

Supply System, Office Buildings, School Building, Hospital and

Health Center, Market and Slaughterhouses, Other Structures,

Sports Equipment, Communication Equipment, Disaster

Response and Rescue Equipment, Technical and Scientific

Equipment, Other Machinery and Equipment, Motor Vehicles,

Watercrafts, Other Transportation Equipment, Other PPE and

Other Infrastructure Assets, thus affecting fair presentation of the

account, existence of items of PPE cannot be ascertained due to

partial submission of reports on physical count thereof and net

addition to the beginning balance of Government Equity

representing Prior Period Errors amounting to P.280 million

cannot be verified due to absence of schedules and journals to

ascertain propriety of the adjustment.

Oras Qualified Cash in Bank, Local Currency Current Account balance of P37.221 million is unreliable due to erroneous reconciliation between the book and bank balances;

Property, Plant and Equipment of P99.879 million is doubtful due to the failure of the Municipal Inspection Team and the GSO to conduct complete physical count of all their properties; and,

Inadequate disclosure in the Notes to Financial Statement of the credit financing amounting to P135.600 million entered into by the LGU with Land Bank of the Philippines.

Quinapondan Unqualified

Salcedo Qualified Receivable accounts totalling P15.820 million were not properly

valued, presented and disclosed in the financial statements and

could not be related to its subsidiary records that renders

inaccurate and misleading information;

Loans payable with year-end outstanding balance of P6.101

million were not fully disclosed in the notes to the financial

statements, thus, understanding thereof was not enhanced; and,

Uses an inappropriate account to take-up the wages for hired job

orders totalling P8.253 million resulted to improper classification

and presentation of the financial statements.

San Julian Qualified Loans payable with year-end outstanding balance of P4.680 million were not fully disclosed in the notes to the financial statements, thus, understanding thereof was not enhanced.

287


San Policarpo Qualified Cash in Bank Local Currency Current Account balance of P27.739 million is unreliable due to erroneous reconciliation between the book and bank balances resulting to the treatment of five (5) checks totaling P.718 million as outstanding checks even if the same were cancelled or paid and other errors of recording which were not corrected; and,

Infrastructure Assets amounting to P5.246 million is unreliable due to non-provision of depreciation and impairment losses and inadequate disclosure as to the useful lives and depreciation rates.

Sulat Qualified

Property, Plant and Equipment balance of P111.139 million could

not be ascertained due to : (a) absence of complete and properly

accomplished Report of the Physical Count of Property, Plant &

Equipment (RPCPPE) and Property Cards; and (b) non-

maintenance of complete and properly accomplished Property,

Plant and Equipment Ledger Cards and Real Property Ledger

Cards.

Taft Modified/

Advances to contractors totalling P3.117 million were not provided with appropriate disclosure in the financial statement rendering the report not fairly presented;

Biological assets costing P.049 million acquired and distributed to the intended beneficiaries but such amount remained in the statement of financial position rendering the financial statement not reliable; and,

Inappropriate account used to take-up the wages for the hired job orders totalling P.600 million resulted to improper classification and presentation of the financial statements.

Leyte Qualified Inventory accounts amounting to P266.580 million at year-end could not be established and the accuracy of the balance could not be ascertained because no physical inventory was conducted, and supplies and materials purchased during the year totaling P66.980 million were recorded as outright Expense instead of recognizing them as Asset.

Cities

Baybay City Qualified Property, Plant and Equipment (PPE) was understated by P264 million due to derecognition of PPEs without valid documents;

Inventories amounting to P1.600 million were no longer reflected in the books even if not yet consumed or distributed;

Receivables totaling to at least P4.800 million from services already rendered by Baybay City Medical Diagnostics and Dialysis Center (BCMDDC) were unrecorded, and;

Cash in Bank was understated by P.900 million due to unrecorded reimbursements received from Philhealth for services rendered by BCMDDC.

288


Ormoc City Qualified Road Network in the Infrastructure Asset account with a balance of P702.762 million or 10% of the total assets of the City as of December 31, 2018, could not be confirmed since the City did not conduct an inventory of its local roads, no Report on the Physical Count of the Road Network System was prepared nor reconciled with accounting records and disclosures in the Notes to the Financial Statements were insufficient; and,

Other properties in the Property, Plant and Equipment (PPE) account valued at P3 billion at year-end remain unconfirmed due to unimplemented audit recommendations for the past years to conduct the annual physical count of its properties, prepare the related Report on the Physical Count of PPEs and reconcile the same with accounting and property records.

Tacloban City Qualified Property, Plant and Equipment totaling P2.080 Billion, excluding Land and Construction in Progress totaling P577.890 million, could not be ascertained because of the (a) disparity of the account balance at year-end as against the Report on the Physical Count on Property, Land, and Equipment and the lapsing schedule totaling P1.820 billion and P23.720 million, respectively, for the same period; (b) misclassification of accounts that overstated the Property, Plant, and Equipment by P2.600 million; and, (c) failure of the City to comply with the accounting and reporting requirement for Road Networks with a balance at year-end totaling P137.160 million;

Accounts Payable totaling P260.910 million was overstated by P28.930 million due to: (a) inclusion of obligations totaling P21.320 million that were already paid; (b) misclassification of accounts totaling P6.860 million; and (c) inclusion of payables amounting to P.739 million aging two years or more which are not covered by perfected contracts, representing balances of completed projects, the corresponding funds of which are subject for return to the source agency; and,

Loans Receivable-Others account totaling P10.840 million had remained outstanding and non-moving for the past three years, and no allowance for impairment was provided for losses which may arise from its non-collection.

Municipalities

Abuyog Qualified Property, Plant and Equipment (PPE) accounts with a book value of P670.700 million as of December 31, 2018 could not be ascertained due to the following: unaccounted difference of P581.500 million between the physical inventory report and accounting records caused by incomplete physical count; Infrastructure assets totaling P186 million were not depreciated; and Road Network account under Infrastructure Asset with a balance of P132.600 million were not supported with Local Road Inventory Report and subsidiary records to identify road components of each road network.

289


Alangalang Qualified Road Networks account totaling P22.239 million as at year-end could not be ascertained due to failure to conduct physical count of road network system, maintain complete records for roads and road network components and prepare a lapsing schedule for depreciation; and,

Due to Other funds of P45.329 million and Due from Other Funds totaling P7.563 million could not be ascertained due to a difference of P37.766 million which remained unadjusted at year-end.

Albuera Qualified Property, Plant and Equipment (PPE) account with carrying value

of P240 million as of December 31, 2018 due to incomplete

Report on the Physical Count of PPE, unreconciled amount of

P74 million between accounting and property records and

unrecorded delivered motor vehicles worth P4.900 million;

Cash in Bank account with year end balance of P269 million due

to unadjusted reconciling items amounting to P3.500 million and

untraced difference of P1.900 million between book balance and

Trial Balance;

Inventories due to erroneous recording of certain transactions

under the Philippine Rural Development Project (PRDP) which

overstated the Agricultural and Marine Supplies Inventory by at

least P1.5 million and the inclusion of issued semi-expendable

properties amounting to P.813 million instead of recording an

expense; and,

Payables due to erroneous entries which overstated the Due to

NGA account by P1.100 million.

Almeria Qualified Property, Plant and Equipment are unreliable due to the following: Land owned by the LGU with assessed value of P2.800 million were not recorded, road projects implemented prior to CY 2015 at P12 million were not transferred from the Registry of Public Infrastructures, the cost of repaired roads was not derecognized, impairment loss on damaged property was not computed nor recorded and computation of accumulated depreciation was in lump sum instead of per individual account in the PPE.

Babatngon Qualified Road Networks account totaling P1.702 million as at year-end could not be ascertained due to the failure to conduct physical count of road network system, maintain complete records for roads and road network components and prepare a lapsing schedule for depreciation.

Barugo Qualified Road Networks account amounting P51.211 million as of December 31, 2018 could not be ascertained due to failure of the management to: (a) comply with the transitory provision for the transfer of 75% of the local roads to the Road Networks account by end of 2018; (b) compute the correct depreciation expense; and, (c) render, prepare and maintain a Report on Local Road Network, Report on the Physical Count of Local Road Network and Local Road Network Property Card;

290


Loans Payable account amounting P2.400 million as of December 31, 2018 was not substantiated / supported with documents thus, casting doubt on its existence, validity and legality; and,

Cash in Bank, Local Currency Current Account at year-end totaling P107.511 million is unreliable because of the incomplete submission of bank reconciliation statements for the six (6) existing current and savings accounts resulting in the presence of unidentified reconciling items amounting to P.192 million.

Bato Qualified Property, Plant and Equipment (PPE) account at P214 million as of December 31, 2018 is unreliable due to the recognition as PPE construction materials procured by the LGU for projects undertaken by administration even if some were not yet utilized while Infrastructure Assets including road networks were not correctly valued due to non-provision of depreciation on the said assets.

Biliran Qualified Public infrastructure projects implemented prior to CY 2016 totaling P3.800 million were not transferred to the Infrastructure Asset account in the Property, Plant and Equipment (PPE) in CY 2018 from the Registry of Public Infrastructures.

Burauen Qualified Road Networks account totaling P24.205 million could not be ascertained and the existence of the account balance could not be established due to failure of the management to : (a) conduct physical count and submit the Report on the Physical Count of the Road Network System; (b) prepare a lapsing schedule for the computation of depreciation and disclose the road network system in the Notes to Financial Statements; (c) maintain a Local Road Inventory and Road Map; (d) keep a complete Local Road Network Property Card; and, (e) prepare a Report on Local Road Network;

Cash in Local Treasury balance of P.507 million in CY 2016, which was increased to P1.085 million in CY 2018 could not be ascertained due to untraceable variances and various errors noted between the books of accounts and actual cash on hand of the Municipal Treasurer; and,

Property, Plant and Equipment account amounting to P157.475 million in CY 2015, which was increased to P290.796 million in CY 2018 could not be ascertained due to inadequacy of the records maintained in the accounting and property units, and their existence could not be established due to management’s continued disregard to conduct physical inventory and submit reports thereon.

Cabucgayan

Qualified Infrastructure assets under Property, Plant and Equipment totaling P30 million was not provided with depreciation;

Inter-agency payables has and unreconciled difference of P21.600 million between balance per books and per bank; and,

Cash in Bank account was understated by P5.700 million due to unrecorded disbursements.

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Caibiran

Qualified Property, Plant and Equipment (PPE) account with a balance of

P99 million as of December 31, 2018 is inaccurate and unreliable

due to unrecorded lands owned by the LGU amounting of P.711

million, unrecorded donated assets of P.123 million and non-

provision of depreciation on properties costing P32 million.

Calubian Qualified Due to NGAs and Due to LGUs totaling P52 million and P61 million, respectively, are unreliable as liquidation reports on completed projects totaling P56 million were not submitted to reduce the liabilities of the LGU; accuracy and valuation of assets in the Property, Plant and Equipment (PPE) were also unreliable since completed projects totaling P73 million were retained in the Construction in Progress account, the corresponding depreciation were not computed and the balance of Road Network account does not include completed road projects in CY 2016 and prior years.

Capoocan Qualified Road Networks account amounting P15.858 million as of December 31, 2018 could not be ascertained due to failure of the management to (a) comply with the transitory provision for the transfer of 75% of the local roads top the Road Networks account by end of 2018; (b) compute the correct depreciation expense; and (c) render, prepare and maintain a Report on Local Road Network (RLRN), Report on the Physical Count of Local Road Network (RPCLRN) and Local Road Network Property Card (LRNPC);

Receivables accounts totaling P1.561 million as of December 31, 20148 were doubtful due to existence of dormant or long outstanding account balance amounting to P.876 million and insufficient pertinent documents to substantiate the same; and,

Cash in Bank-Local Currency, Current Account and Savings Account at year-end totaling P201.152 million could not be ascertained because: (a) the monthly bank reconciliation statements (BRS) prepared and submitted by the Municipal Accountant were not supported with the original copies of bank statements, cancelled and paid checks, bank debit and credit memos resulting in the presence of unverified reconciling items amounting to P7.610 million; and (b) presence of cash balance per record in the general fund amounting P2.381 million, representing a time deposit and current account from Philippine Postal Savings Bank, which were not supported by a certificate of time deposit and BRS.

Carigara Qualified Road Networks account amounting P31.554 million as at December 31, 2018 could not be ascertained due to failure of the management to: (a) comply with the transitory provision for the transfer of 75% of the local roads to the Road Networks account by end of 2018; (b) recognize depreciation expense; and, (c) render, prepare and maintain a Report on Local Road Network (RLRN), Report on the Physical Count of the Road Network System (RPCLRN), Local Road Network Property Card (LRNPC), and Local Road Inventory and Road Map;

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Failure to recognize depreciation for Property, Plant and Equipment (PPE) accounts totalling P17.090 million and a residual value of ten percent (10%) was used in the computation of depreciation expense of other PPE accounts, resulting in the overstatement of the carrying amount of the PPE accounts and understatement of depreciation expense account; and,

Cash in Bank, Local Currency Current Account (LCCA) balance at year-end totaling P221.415 million is unreliable because of the:

(a) non-preparation of bank reconciliation statements for the nine (9) existing current and savings accounts resulting in the presence of unidentified reconciling items amounting to P.915 million;

(b) presence of cash balance per record in the general fund amounting P3.941 million, representing a time deposit which is not supported by a certificate of time deposit; and,

(c) disparity between the recorded time deposit per books and the reported balance per servicing bank amounting to P.410 million.

Culaba Qualified Property, Plant, and Equipment (PPE) totaling P98 million as of December 31, 2018 were inaccurate and unreliable due to the following: a) donated assets totaling P.377 million were not recorded; b) ownership of lands recorded at P2.300 million were not transferred to the LGU; c) physical count of properties was not conducted and the related Report on the Physical Count of Property, Plant, and Equipment (RPCPPE) was not prepared and reconciled with accounting records; d) Property Cards and PPE Ledger Cards were not maintained, and; e) unserviceable properties were not disposed.

Dagami Qualified Due to GOCC’s account under the General Fund showed a

negative balance amounting to P.070 million due to erroneous

recording, thus resulting to an unreliable balance; and,

Unexpended balance of the LDRRM Fund amounting to P1.691

million was not transferred to a Special Trust Fund in the Trust

Fund books and its details were not disclosed in the Notes to the

year-end Financial Statements.

Dulag Qualified Of the P10.434 million balance of Road Networks account as of December 31, 2018, the carrying amount of P6.693 million could not be ascertained as there is no breakdown as to its composition and failure to compute its depreciation expense;

Due to NGAs in Trust Fund are overstated by P1.130 million as such amount was labelled “for reconciliation” in its subsidiary schedule, thus, affecting its fair presentation in the financial statements; and,

Two (2) completed infrastructure projects funded from DILG RAY and DA-BUB in the amounts of P3.490 million and P2.016 million, respectively were not recognized as Property, Plant and Equipment of the Municipality, thus, understating the account by the same amount.

293


Hilongos Qualified Road Network balance of P62 million in the Infrastructure Asset account is unreliable as it included barangay roads which were not turned-over to the respective barangays, municipal road lots with an appraisal cost of P11 million were not included while road lots totaling P3.700 million were erroneously recorded in the Land account instead of Road Network account.

Hindang Qualified Property, Plant and Equipment (PPE) account at P68 million as of December 31, 2018 was unreliable due to the non-provision of depreciation on the Infrastructure Assets including the road networks of the Municipality while the Construction in Progress account balance was doubtful since purchased construction materials and supplies worth P1.644 million were not recorded as inventories but as Construction in Progress without proper accountability of its issuances while year-end inventory report was not prepared.

Inopacan Qualified Property, Plant and Equipment (PPE) accounts with a book value of P138.500 million as of December 31, 2018 could not be ascertained due to the difference of P24.800 million between the physical inventory report and accounting records arising from incomplete physical count and the unrecorded donated office equipment from the Department of Finance (DOF) without assigned cost.

Isabel Qualified Property, Plant and Equipment (PPE) with carrying value of P568

million cannot be ascertained due to incomplete physical count,

unrecorded equipment of P6 million and non-provision of

depreciation on Infrastructure Assets for CY 2016 to CY 2018;

Liabilities were unreliable due to misclassification of long-term

loans payable amounting to P133 million as current liabilities in

the Statement of Financial Position;

Unresolved discrepancy in the Due to NGAs account balance by

P28 million between the financial statements and subsidiary

ledgers; and,

Cash in Bank was overstated by P11 million due to uncorrected

prior years’ errors and unadjusted stale checks while the

existence of Receivables totaling P6.7 million aged 91 days to

over ten years are doubtful.

Jaro Qualified Failure to adjust for reciprocal changes affecting the accounts

Due from Other Funds and Due to Other Funds resulted to an

unreconciled balance amounting to P.194 million; and.

Property, Plant and Equipment with a carrying amount of

P237.748 million could not be ascertained due to the continued

failure to conduct and submit a Report on the Physical Count of

Property, Plant and Equipment (RPCPPE).

Javier Qualified Property, Plant and Equipment (PPE) with a book value of P493

million as of December 31, 2018 could not be ascertained due the

physical inventory report and accounting records caused by the

294


following: Unaccounted difference of P169 million between the incomplete physical count; non-provision of depreciation on Infrastructure Assets totaling P224 million; and Road Network account under Infrastructure Asset with a balance of P164 million was not supported with Local Road Inventory Report and subsidiary records to identify road components of each road network.

Julita Qualified Property, Plant and Equipment (PPE) accounts totaling P164.266 million could not be ascertained due to the following: (a) material disparity of (10) PPE items between the reported amounts in the Detailed Statement of Financial Position and or General Ledger, and the reported balance of the related subsidiary ledger accounts or Property, Plant and Equipment Ledger Cards (PPELC) amounting to P 10.747 million, and, (b) the latter does not reconcile with the Report on the Physical Count of Property, Plant and Equipment; and,

Goods purchased totalling P2.684 million were not coursed through the Inventory account, and the recorded expenses for supplies and materials totaling P1.669 million were not supported with the Summary of Supplies and Materials Issued (SSMI), thus, rendering unreliable, the inventory account and expense account balances at year-end.

Kananga Qualified The Infrastructure Assets account in the Property, Plant and Equipment (PPE) was understated due to road networks projects and other public infrastructure assets costing P119.862 million which were not transferred from the Registry of Public Infrastructure to the appropriate accounts in LGU books and existence of other properties in the PPE account valued at P361.239 million as of year-end, including Road Network account, remain unconfirmed due to unimplemented audit recommendations for the past years to conduct the annual physical count of its properties, prepare the related Report on the Physical Count of PPEs and reconcile the same with accounting and property records.

Kawayan

Qualified Property, Plant and Equipment (PPE) with a balance of P120

million as of December 31, 2018 is unreliable due to the

following: lands owned by the LGU with appraised value of

P6.300 million and donated assets of P1.300 million were not

recorded; the carrying value of repaired infrastructure assets

were not derecognized; and depreciation of some properties were

not provided; and,

Due to NGAs account amounting to P31.700 million is unreliable as it includes the amount of P12 million which had been carried in the books for nearly ten years even if it was already utilized.

La Paz Qualified Road Networks account amounting P4.822 million as of December 31, 2018 could not be ascertained due to failure of the management to prepare and maintain a Report on Local Road Network (RLRN), Report on the Physical Count of Local Road Network (RPCLRN) and Local Road Network Property Card (LRNPC).

295


Leyte Qualified Property, Plant and Equipment was not correctly reported due to non-provision of depreciation for Infrastructure Assets totaling P31 million and misclassification of road projects costing P3.900 million as Land Improvements or Roads, Highways and Bridges instead of Road Network; and,

Fuel expenses totaling P1.900 million is unreliable due to recording of requisitions as outright expense upon purchase even without proof of proper and authorized utilization.

MacArthur Qualified Despite the significant increase in the total amount of P60.328 million, the accuracy of the Property, Plant and Equipment (PPE) accounts, with a total carrying amount of P121.212 million, as of December 31, 2018, cannot be confirmed, as the Municipality still failed to implement previous years’ recommendation of conducting and preparing the Report on the Physical Count of Property, Plant & Equipment (RPCPPE) for CY 2018;

Due to NGAs account in Trust Fund is understated by P6.795 million as such amount was debited without supporting documents, while various liquidations of fund transfers for completed infrastructure projects/delivery of goods were not recorded to its corresponding asset account totaling P9.177 million, thereby understating the said assets by the same amount;

Current and prior years’ unexpended/unobligated balances of the Quick Response Fund (QRF) and the DRRMF-MOOE for CY 2018 totaling P6.258 million was not transferred to Trust Fund, thus, overstating the Government Equity and understating the Trust Liabilities-Disaster Risk Reduction and Management Fund accounts by the same amount.

Mahaplag Qualified Property, Plant and Equipment (PPE) with a book value of P183 million as of December 31, 2018 could not be ascertained since only 14% of the recorded PPE was included in the Report of Physical Count of Property, Plant and Equipment (RPCPPE) resulting from incomplete physical inventory while Infrastructure Assets totaling P71 million were not depreciated.

Maripipi Qualified Property, Plant and Equipment (PPE) with a balance of P33 million as of December 31, 2018 could not be ascertained caused by the following: properties without any records on file were valued at P1.00 or were not assigned any value at all instead of determining its fair market value, depreciation was not provided for CY 2018, various equipment were difficult to identify as these were not labelled with Property Tags, Property Acknowledgement Receipts (PAR) on issued equipment were not renewed every three years and Property Cards were not maintained and the conduct of the annual physical count of its properties, prepare the related Report on the Physical Count of PPEs and reconcile the same with accounting and property records remained unimplemented audit recommendations for the past years.

Matag-ob Qualified Property, Plant and Equipment account was not correctly reported due to understated accumulated depreciation on Infrastructure Assets by P3.400 million, incomplete list of projects that supports the balance of the Road Network account,

296


erroneous recording of road projects costing P1.500 million as Land and erroneous recording of major repair of municipal facilities amounting to P.440 million as expenses.

Matalom Qualified Inventory Account amounting to P.811 million, or 2% of the total assets of the Municipality as of December 31, 2018, is doubtful because the purchased construction materials and supplies worth P2.578 million were not recorded as Construction Materials Inventory but as Construction in Progress; and, drugs and medicines worth P1.999 million were not recorded as Inventories upon purchase but as outright expenses without proper accountability of its issuances while year-end balance was not supported with an inventory report.

Mayorga Qualified Road Networks account amounting P52.653 million as of December 31, 2018 could not be ascertained due to failure of the management to prepare and maintain a Report on Local Road Network (RLRN), Report on the Physical Count of Local Road Network (RPCLRN) and Local Road Network Property Card (LRNPC);

Release of retention money to contractor(s) amounting to P1.957 million was erroneously debited to Guaranty/Security Deposits Payable account even without an existing liability thereby, understating the said Trust Liability account and understating the corresponding Asset account by the same amount; and,

Unutilized balance of the Disaster Risk Reduction Management Fund (DRRMF)-Quick Response Fund (QRF) and MOOE were not transferred to the Special Trust.

Merida Qualified Property, Plant and Equipment included completed projects totaling P35.600 million erroneously classified as Construction In-Progress;

Inter-agency Payables was overstated by P4.700 million due to erroneous recording of insurance proceeds from GSIS as payables instead of income;

Inventories amounting to P2.800 million was not supported with a Physical Inventory Report and other records to adequately support the existence of the assets; and,

Trust Liabilities-DRRMF was understated by P13.100 million due to erroneous recording of prior years unexpended LDRRMF as Due From Other Fund.

Naval Qualified Public infrastructure projects implemented prior to CY 2015 totaling P3.300 million or 75% of the total cost in the Registry of Public Infrastructures, were not recorded in CY 2018 to the Infrastructure Assets account in the Property, Plant and Equipment.

297


Palo Qualified Completed infrastructure projects in CY 2018 from various fund of the LGU totaling P48.955 million were not recognized in the books as Property, Plant and Equipment (PPE);

Recorded check disbursements totaling P1.086 million in CY 2018, were without the covering disbursement vouchers, thus the accuracy of the recorded amount could not be ascertained; and,

Cashbook maintained by the Municipal Treasurer does not

reconcile with the Cash-Local Treasury account in the general

ledger, and the conduct of physical inventory and the submission

of Report on the Physical Count of PPE was only partially

implemented, thus the accuracy of the PPE account could not be

ascertained and its existence could not be established.

Palompon Qualified Assets were not accurately and properly presented due to non-

recording in the Infrastructure Assets account of P74.800 million

or 75% of the cost of public infrastructure projects implemented

prior to CY 2015 previously reflected in the Registry of Public

Infrastructures, erroneous recording of road projects from CY

2015 up to the current year totaling P63 million as Other

Infrastructures instead of Road Network and inclusion in the

Inventories account supplies totaling P3.300 million which were

already issued and distributed as of December 31, 2018.

Pastrana Qualified Property, Plant and Equipment account as of year-end is unreconciled against the Report on the Physical Count of PPE.

San Isidro Qualified Public Infrastructures of P12.352 million were not transferred to

the Infrastructure Asset account;

Road Network account at P52 million was not supported with the

Report on Physical Count of Local Road Network;

Procurement of projects costing P.994 million were not recorded

which understand the Property, Plant and Equipment, Cash in

Bank and other related accounts; and,

Accounts Payable amounting to P.159 million have no valid

claimants.

San Miguel Qualified Cash in Bank, Local Currency account could not be ascertained

due to a difference of P3.088 million with that of the bank balance

which remained unadjusted at year end due to non-preparation of

bank reconciliation statements; and,


ascertained due to the failure to conduct physical count of road

network system, maintain complete records for roads and road

network components and prepare a lapsing schedule for

depreciation.

298


Santa Fe Qualified Road Networks account totaling P 46.826 million as at year-end could not be ascertained due to the failure to conduct physical count of road network system, maintain complete records for roads and road network components and prepare a lapsing schedule for depreciation.

Tabango Qualified Infrastructure Asset account totaling P62 million does not reflect all public infrastructures implemented by the LGU due to the absence of its Registry and Report on Physical Count;

Road Network account totaling P44 million was not supported with the Local Road Network Inventory Report;

Cash in Bank-LCCA account totaling P24 million in the Trust Fund Books were not reconciled with the Bank Statements; and,

Agricultural equipment and materials totaling P2 million out of transferred funds were not recorded as assets but as direct reduction to a liability account.

Tabontabon Qualified Stale checks and undetermined book adjustments of previous year’s amounting to P649.98 and P.059 million, respectively, have remained as reconciling items in Trust Fund books and were not adjusted and corrected; and,

Retention moneys against completed infrastructure projects totalling P.565 million were erroneously recorded as Bail Bonds Payable instead of its proper account – Guarantee/Security Deposits Payable.

Tanauan Qualified Income earned from market operation but not received at year-end were not recorded in the books, while advance payment made by stallholders were inadvertently recorded as Receipts from Market Operations, thereby causing an understatement in the accounts, namely: Receipt from Market Operations; Permit Fees; Customers Deposits; and Other Receivables by a net amount of P.163 million; P.143 million; P1.308 million and P1.614 million, respectively;

Three (3) completed infrastructure projects in CY 2018 funded from Yolanda Rehabilitation and Reconstruction Program (YRRP) totaling P4.659 million were not recognized as Property, Plant and Equipment of the LGU thus, understating the account by the same amount; and,

The disclosure requirements on Investment, Inventory and Financial Liabilities were not fully observed, thus information contained in the Notes to Combined Financial Statements do not adequately assist users in understanding the affected accounts.

Tolosa Qualified Property, Plant and Equipment (PPE) accounts totaling P149.471 million could not be ascertained due to the following: (a) material disparity between the Report on Physical Count of PPE (RPCPPE) and reported balance per books totaling P31.576 million; (b) unrecorded donated properties of undetermined amounts; (c) inclusion of properties with no future economic benefits or service potential expected from its use or disposal totaling P3.010 million; and, (d) absence of a detailed PPE lapsing schedule; and,

299


Road Networks account totaling P51.267 million could not be ascertained and its existence could not be established due to management’s failure to (a) account for the difference of P3.447 millionbetween the balance per books and the Inventory Report on Road Network System; (b) prepare lapsing schedule for the computation of depreciation and disclose the road network system in the Notes to Financial Statements; and, (c) maintain a Local Road Inventory and Road Map, keep a complete Local Road Network Property Card, as well as prepare a Report on Local Road Network.

Tunga Qualified Road Networks account amounting P5.605 million as of December 31, 2018 could not be ascertained due to failure of the management to: (a) comply with the transitory provision for the transfer of 75% of the local roads to the Road Networks account by end of 2018; (b) recognize depreciation expense; and, (c) render, prepare and maintain a Report on Local Road Network (RLRN), Report on the Physical Count of Local Road Network (RPCLRN), Local Road Network Property Card (LRNPC), and Local Road Inventory and Road Map; and,

Cash in Bank-Local Currency, Current Account could not be

ascertained and established because the Municipal Accountant

failed to prepare and submit monthly bank reconciliation

statements.

Villaba Qualified Public Infrastructures of P60 million were not transferred from the

Registry to the Infrastructure Asset account;

Difference of P31 million between the Cash in Bank-LCCA

account balance and per bank statements in the Trust Fund

books;

Road Network account at P7.200 million was not supported with

the Report on Physical Count of Local Road Network; and,

Outright recording as Other Maintenance & Operating Expenses

of funds transferred to farmer’s associations totaling P1 million

instead of recognizing a collectible from the recipients.

Northern Samar Qualified Cash in Bank-Local Currency Current Account balance of P1.950 billion could not be ascertained due to the difference of P.788 million between the balance per Statement of Financial Position and adjusted balance per bank statement and long outstanding reconciling items totaling P2.531 million;

Bank Reconciliation Statements and subsidiary ledgers were not prepared for sixteen savings account maintained with DBP and PVB, with balance totaling P60 million and P67.5 million respectively;

Unreconciled variance of P42.2 million of the reciprocal accounts “Due from Other Funds and Due to Other Funds account in the Combined Financial Statement of Financial Position;

300


Construction in Progress accounts and Accounts payables totaling P1.284 billion and P566.968 million respectively are doubtful due to premature recognition of costs of construction and development without the corresponding Statement of Work Accomplished;

Loans Payable-Domestic account with a balance of P701,156 million could not be verified due to absence of subsidiary ledgers, non-classification of the current and non-current portion of the obligation, and insufficient disclosure of the loan details in the Notes to Financial Statements; and,

Double recording of the transfer of unexpended/unobligated balance of the Quick Response Fund and the Disaster Risk Reduction and Management (DRRM) Fund-Maintenance and Other Operating Expenses resulted in the overstatement of Transfers of Unspent Current Year DRRM funds to the Trust Fund and Due to Other Funds account by P22.150 million.

Municipalities

Allen Qualified

Biri Qualified Property, Plant and Equipment (RPCPPE) on depreciable assets prepared by the Property Officer, with a total value of P2.232 million was incomplete and did not reconcile with the accounting records due to failure of the Inventory Committee to conduct physical count of Property Plant and Equipment (PPE), thus, the said assets under PPE account with a total value of P89.425 million as of December 31, 2018 which is 61.24% of total assets is unreliable;

Cash in Treasury account balance of P.145 million is doubtful due to the continued failure of management to identify the person accountable on the undeposited amount of P.141 million collected in the previous years and failure to maintain subsidiary record thereof;

Thirty six (36) Disbursement Vouchers and its supporting documents amounting to P.706 million were not submitted for audit, thus, creating doubt on the propriety and regularity of the disbursements; and,

138 reported cancelled checks were not submitted for verification, thereby affecting the reliability of the reports made by the LGU.

Bobon Qualified Accounts Receivable outstanding account balances of P11.934

million was inaccurate due to unsubstantiated and undocumented

Accounts Receivable and Inter and Intra-Agency fund transfer in

the total amount of P.237 million; unliquidated Advances and

dormant Other Receivable accounts which are outstanding and

uncollected from more than one year to over five years in the total

amount of P2.887 million;

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Property, Plant and Equipment (PPE) account totaling P217.276

million or 66%% of the total assets was not fully established and

remained doubtful due to the continuous failure of the municipality

to constitute an Inventory Committee that will conduct physical

inventory, maintain complete property records and provide the

depreciation for some depreciable PPE and recognize

impairment losses on recorded assets due to deterioration; and,

Unreliable CIP account amounting to P55.806 million due to lack

of subsidiary records, improper maintenance of Construction in

Progress Ledger Card (CIPLC) and uncoordinated monitoring

and reporting of completed projects.

Capul Qualified Property, Plant and Equipment totaling P100.047 million has no report on its physical inventory and no maintained property cards;

Accounts payable in the sum of P.675 million was not supported with complete documentation;

Advances for Payroll and Advances for Officers and Employees amounting to P.041 million and P.072 million, respectively, were not liquidated at the end of the year; and,

Payment of interest in the sum of P2.603 million was not recorded in the books of accounts resulted the interest expense and the loan payable account to be understated.

Catarman Qualified Failure to record the thirty-eight (38) lots with a total fair market

value of P362.809 million all with Tax Declaration in the name of LGU-Catarman which understated the reported balance of the Property, Plant and Equipment as at year-end.

Catubig Qualified Cash in Bank – Local Currency, Current Account in the amount

of P170.801 million as of December 31, 2018 could not be ascertained due to the continued failure of the accountant to prepare and submit the monthly and year end Bank Reconciliation Statements for each bank account;

Property, Plant and Equipment (PPE) with a net book value of P97.198 million as of December 31, 2018 (excluding Construction in Progress) could not be relied upon due to inability of the management to create an Inventory Committee to conduct an annual physical count of all properties of the Municipality for CY 2018; and,

“Due to NGAs” included PPAs in the total amount of P8.986 million which should have been reclassified to other accounts including the amount of P3.750 million which has no details, thus, the carrying amount of P82.143 million, shown in the financial statement as of December 31, 2018 is doubtful.

Gamay Qualified Property, Plant and Equipment (PPE) and Investment Property

accounts valued at P252.294 million and P24.522 million,

respectively, or a total amount of P276.817 million as of

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December 31, 2018, which is 79.80% of the total assets is

unreliable due to non-presentation of the PPE accounts as to its

classification/type in the Report of PPE, the total value of

P28.461million, per RPCPPE did not reconcile with the

accounting records of P252.294, million, the 120 listed PPEs has

no value assigned in the report, and the physical count of

Infrastructure Assets with a total cost of P156.115 million was not

conducted.

Laoang Qualified Cash-In-Bank account totaling P256.752 million as of December 31, 2018 cannot be relied upon due to non-submission of Bank Reconciliation Statements from July to December, 2018 and non-recording of reconciling items in the amount of P.304 million;

Due to the Failure of the Municipal Treasurer to provide the Municipal Accountant a copy of a duly certified list showing the names of the taxpayers and the amount due and collectible, the Real Property Tax (RPT) and Special Education Tax (SET) Receivables and the corresponding Deferred RPT and SET Income was not set up at the beginning of the year, thus, the balances of RPT and SET Receivables, and Deferred RPT and SET accounts of P.410 million and P1.058 million, respectively, at year-end are understated;

Procured inventories and equipment of P1.354 million and P.092 million respectively, or a total of P1.446 million were recorded as an outright expense instead of the appropriate inventory and equipment account that understated the inventory and equipment account and overstated the affected expense account by the amount of P1.446 million; and,

Completed Water Supply System project amounting to P9.778

million under Salintubig DOH Project in CY 2012 was not

transferred to the General Fund Books upon completion of the

project that understated the PPE and Government Equity account

by the same amount in the General Fund Books.

Lapinig Qualified Cash-In-Treasury and Cash-In-Bank accounts totaling P48.707 million is questionable due to delayed and irregular deposit of collections, existence of adjustments without sufficient basis and invalid reconciling items, also, reconciliation of net cash flows from operation to surplus was not appropriately disclosed in the Notes to Financial Statements;

Advances account balance of P.170 million is questionable due to recording of liquidation and adjustment in the amount of P3.331 million without basis and discrepancies in the amounts appearing in the ledger and other reports/schedules in the amount of P.274 million;

Purchase of medicines amounting to P.770 million were directly recorded as expense, while, medicines acquired thru donation in the amount of P.028 million were not recorded thereby understating the inventory account by P.032 million, and the related expense account by P.766 million;

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PPE account with a net book value of P73.741 million is unreliable;

Work/Zoo Animals and Biological Assets totaling P1.317 million were not determined due to non-conduct of physical count of living animals and non-recording of plants and trees; and,

Inter-Agency Payable and Trust Liabilities accounts totaling P16.612 million is unreliable due to deficiencies and errors in recording the liquidation/utilization of fund transfers received from other agencies and discrepancies in the balances from the books of the LGU and the source agency.

Las Navas Qualified Cash-in-Treasury account balance of P1.175 million is

questionable due to unaccounted Accountable Forms and

identified unrecorded collection amounting to P.092 million;

Cash in Bank-Local Currency, Current Account balance of

P108.352 million is unreliable due to failure to prepared the bank

reconciliation statements and lack of adequate disclosure in the

Notes to Financial statements;

Purchases of medicines amounting to P.671 million were directly

recorded as expense, while, medicines acquired thru donation in

the amount of P.722 million were not recorded, thus, the inventory

account is understated by P.080 million and the related expense

account is understated by P.642 million;

Validity and correctness of the advances accounts balance

totaling P48.995 million is doubtful due to absence of complete

disclosures in the Notes to Financial Statement and schedules

detailing the details of the advances and age of the cash advance;

Receivables-Disallowances/Charges is understated by P.407

million due to recording of the settlement without the Notices of

Settlement of Suspension/Disallowance/Charge from the Audit

Team and other errors in recording;

Correctness of the valuation of the Hospital building and Water

Supply system valued at P.603 million and P6.993 million,

respectively, was not ascertained due to absence of complete

records and documents;

Valuation and ownership of Property, Plant and Equipment

amounting to P160.922 million, comprising 47.53% of the

municipality’s total assets was not ascertained due to failure of

the Inventory Committee to complete the conduct of physical

count and provide the amounts in the Report;

Construction-in-progress in the amount of P55.966 million, while,

the status report rendered by the Municipal Engineer reflected an

amount of P23.069 million or a difference of P32.897 million; and

304


Validity and correctness of the claims against the LGU amounting

to P21.820 million could not be established due to absence of list

of claimants and aging schedule supported with valid

claims/contracts.

Lavezares Qualified Receivable account balances of P31.340 million was unreliable due to uncollected past-due Accounts Receivable totaling P.365 million, which remained outstanding for more than seven (7) to nine (9) years; unliquidated Inter and Intra-Agency fund transfer which are outstanding ranging from over six (6) years to more than eight (8) years totaling P10.974 million; unsubstantiated Advances accounts ages three (3) to seven (7) years totaling P7.641 million; and,

Property, Plant and Equipment account totaling P175.138 million or 66.23% of the total assets was not fully established and remained doubtful due to continuous inaction of the LGU to constitute an Inventory Committee that will conduct physical inventory; non-maintenance of property records; failure to provide the depreciation for some depreciable PPE and recognize impairment losses on assets due to deterioration.

Lope de Vega Qualified Collection from previous year (CY 2017) totaling P.042 million was remitted/deposited and reported as income in CY 2018 which overstated the income by the same amount;

Inventory account totaling P1.130 million was not supported with actual physical existence of inventories due to non-submission of the Report of Physical Count of Inventory and non-maintenance of supplies ledger cards and stock cards to reconcile the property records of the Accounting and Supply Office while inventory recognized as expense at the end of the year totaling P2.128 million were not supported with Requisition Issue Slip (RIS) and Summary of Supplies and Materials Issued (SSMI), thus reliability of the reported balance at year-end cannot be ascertained;

Reconciliation of the physical inventory report of Property, Plant and Equipment (PPE) against the general ledger control accounts to verify the agreement of PPE balances was not undertaken because of the absence of property card/PPE ledger cards and inventory report required, thus, correctness of the reported balance at year-end totaling P104.422 million is doubtful;

10% retention money from progress payments to contractors amounting to P2.090 million was erroneously recorded as Accounts Payable instead of the prescribed account Guaranty/Security Deposits Payable, resulting to misrepresentations of the affected accounts in the financial statements;

CY 2018 unexpended/unobligated LDRRMF balance of P2.598 million was not transferred to Special Trust Fund while the CY 2012 unexpended balance of P.300 million was not reverted to the General Fund that resulted in the net understatement of the Trust Liabilities - Disaster Risk Reduction and Management Fund

305


(DRRMF) account by P2.298 million, thus, affecting the fair presentation of the financial statements;

Validity of Receivable and Payable Accounts amounting to P2.241 million and P1.035 million, respectively, are doubtful due to the absence of subsidiary ledger, creditors, valid claimants, and documentary references to support the amount; and,

The failure of the recipient barangays to submit liquidation report on the financial assistance of P.333 million which may affect the accuracy of the related expenses thereon.

Mapanas Unqualified

Mondragon Qualified Share from real property tax for Special Education Fund amounting to P.014 million for the month of February, 2018 was recorded in the Special Education Fund books, thereby overstating the Special Education Tax (SET) Receivable and Deferred Special Education Fund Tax accounts by P.014 million;

Various Supplies and Materials issued amounting to P2.801 million were still included in the total Inventory of P5.655 million as of December 31, 2018 due to non-preparation and non-submission of Summary of Supplies and Materials (SSMI) and Report on the Physical Count of Inventories (RPCI), hence, the inventory and government equity account were overstated by the amount of P2.801 million; and,

Expenditure totaling P2.708 million were erroneously credited to Accounts Payable account that overstated the said account and the Cash in Bank account by the same account.

Palapag Qualified Property, Plant and Equipment (PPE) with a net book value of P151.006 million as of December 31, 2018 could not be ascertained due to inability of the Inventory Committee to conduct an annual physical count of all properties of the Municipality for CY 2018;

Unutilized amounts of the account Trust Liability-Local Disaster Risk Reduction and Management Fund (LDRRMF) aging 5 years and beyond (CYs 2011 to 2013), totaling P.939 million, were not reverted back to the General Fund as required, thus, the maturing and unspent funds were not made available for utilization for other social services in the LGU while Trust Liability Account is overstated and Equity Account is understated by P.939 million;

Balances for local collections between the Cash Books and Accounting records differ by P.677 million, thus, the accuracy of Cash-Local Treasury is unreliable; and,

Due to the difference of P.003 million between the carrying

amount of Land account and subsidiary ledger balance, and the

failure to take up in the books, five lots acquired by the LGU, the

Land account balance of P13.760 million is understated.

306


Pambujan Qualified Due from Other Funds and Due to Other Funds in the Combined Statement of Financial Position as of December 31, 2018 has a variance of P2.530 million;

Remaining Useful Value (RUV) of the second-hand/reconditioned firefighting equipment acquired for a total cost of P1.998 million was not determined due to the absence of the acquisition cost and number of years of actual service from its original purchase and specification indicated in the Purchase Request differs from the approved Purchased Order, hence, the price of the equipment procured which is the most advantageous to the government was not assured;

Disbursements totaling P3.766 million were erroneously debited to Other Maintenance and Operating Expenses (OMOE) account, that overstated the OMOE and understated the affected real and nominal accounts; and,

Payment of P1.110 million to 24 casual employees hired by the LGU in CY 2018 were improperly charged to Other General Services and Other Maintenance and Operating Expenses (OMOE) instead of the lump-sum funds for the purpose under agency appropriations/budgets for Personal Services (PS), that understated the PS and overstated the Other General Services and OMOE by P1.110 million.

Rosario Qualified Failure to submit the Journal Entry Vouchers (JEVs), the General Ledgers, and the Subsidiary Ledgers of LGU-Rosario for the period from January to December 31, 2018.

San Antonio Qualified Unimplemented recommendations in calendar year 2017 Annual

Audit Report particularly on the absence of a bank reconciliation

which consequently affected the propriety of the balance of Cash

in Bank, Local Currency-Current Account of P45.898 million and

doubtful existence of the Property, Plant and Equipment

amounting to P51.063 million due to the absence of physical

inventory during the year.

San Isidro Qualified Unreliable receivable account balances for all funds due to unsubstantiated and undocumented Inter-Agency fund transfers, Loan Receivable and Other Receivable accounts in the total amount of P.424 million which are outstanding and dormant ranging from more than thirteen (13) years to seventeen (17) years;

Of the P.237 million total unliquidated balance of accounts Advances to Officers and Employees and Advances to Special Disbursing Officer as of December 31, 2018, P.155 million or 65.30% remained unliquidated for more than five (5) years, that could result to unreported expenses, unaccounted cash and probable misappropriation of funds;

Purchase of various inventory items amounting to P.455 million were directly recorded as Office Supplies Expense instead of recording to their appropriate inventory account, thus, resulted in the understatement of inventory account and overstated the related expense account; and,

307


Unreliable balance of Property, Plant and Equipment (PPE) account of P199.653 million due to inability to conduct inventory and submit Report on Physical Count of Property, Plant and Equipment (RCPPE).

San Jose Qualified Property, Plant and Equipment with a net book value of P86.191 million as of December 31, 2018 is doubtful due to unreconciled balance between the records of the Municipal Accountant of P117.100 million and the costs in the Report of Physical Count of PPE of P94.800 million submitted by the GSO/Municipal Treasurer showing a difference of P22.300 million, thereby rendering the reported balance at year end unreliable;

Implementation of infrastructure projects funded thru financial

assistance received from various national government agencies recorded as Construction in Progress account under Trust Fund totaling to P15.690 million were debited to “Trust Liabilities” or “Due to NGAs” account and these ongoing infrastructure projects were transferred to the General Fund at the year end, thereby understating the affected accounts under Trust Fund and overstating the affected balances in the General Fund; and,

Accounts Payable and Due to Officers and Employees accounts amounting to P.357 million and P.813 million, respectively were not supported with valid claims and contracts, thus the validity of the account balances as of year-end could not be established.

San Roque Qualified Failure of the Municipal Treasurer to provide the Municipal Accountant a copy of a duly certified list showing the names of the taxpayers and the amount due and collectible, the Real Property Tax (RPT) and Special Education Tax (SET) Receivables and the corresponding Deferred RPT and SET Income was not set up at the beginning of the year, thus, the balances of RPT and SET Receivables, and Deferred RPT and SET accounts of P1.287 million and P.816 million, respectively, at year-end are understated;

Purchased supplies and materials of P3.007 million were recorded as an outright expense instead of the appropriate inventory account that understated the Inventory account and overstated the affected expense account by the amount of P3.007 million;

Livestock Ledger Cards were not maintained by the Accounting Office nor were Property Cards kept by the General Services Office on the LGU’s Biological Assets of P1.733 million, and dispositions such as transfer or death were not reported, thus, indicating lose control over these assets that resulted to undetected losses and misstatement of the related account in the financial statements; and,

Disbursements totaling P.778 million were erroneously recorded

in the books as OMOE while P.015 million was misclassified as

Office Supplies Inventory, that overstated the OMOE account and

understated the affected real and nominal accounts.

308


San Vicente Qualified Inventory account aggregating P.891 million was not substantiated due to non-inventory taking while issuance thereof to end user were not supported with Requisition Issue Slip (RIS) and Summary of Supplies and Materials Issued (SSMI), thus recognition of expense could not be effected while purchase of inventory items during the year in the amount of P1.082 million were outrightly expended;

Abnormal balance of Due to BIR account of P1.969 million and Other Payable account of P.256 million;

Non-provision of the depreciation to the depreciable assets totaling P17.953 million;

CY 2017 expenses totaling P.442 million were recorded as expense in CY 2018, thus overstating the current year expenses by the same amount;

Unimplemented prior year’s recommendation on the unaccounted discrepancies in the amount of P.708 million affecting the Cash in Bank – LCCA amounting to P54.133 million;

Failure to substantiate the physical existence of PPE account of P30.483 million due to the absence of property records and non-conduct of physical inventory; and,

Unliquidated cash advances amounting to P9.836 million.

Silvino Lubos Qualified Cash In Bank – Local Currency Account is understated by P.050 million, due to non-cancellation of checks that are outstanding for over six months from its issuance;

Inventories account totalling P4.978 million is doubtful due to failure to conduct physical count of inventories and render a report thereon and purchase of inventory items were directly recorded as expense and inventory held for distribution and medical equipment acquired thru donation were not recorded and its valuation cannot be ascertained due to absence of record;

Physical count of Property, Plant and Equipment (PPE) in the amount of P140.008 million was not completed and provisions for depreciation of some PPE account amounting to P14.820 million were not made;

Disaster response and rescue equipment acquired thru donation were not recorded in the books and its fair value cannot be determined due to absence of record or information;

Construction-In-Progress totalling P54.157 million was doubtful due to the discrepancy of the amount reported in the List of Infrastructure Projects rendered by the Municipal Engineer; and,

Absence of schedule to support the validity and existence of the liabilities account totaling P48.645 million.

309


Victoria Qualified Receivable account balances of P70.313 million was unreliable due to uncollected past-due Loans Receivable-Others account amounting to P.010 million which continued to be outstanding and dormant for over fifteen (15) years; unliquidated Inter and Intra-Agency fund transfer and the dormant Other Receivable accounts totaling to P70.303 million which have been outstanding for more than eight (8) years to over fifteen (15) years; and,

Property, Plant and Equipment (PPE) account totaling P180.055 million or 57.20% of the total assets was not fully established and remained doubtful due to the continuous failure of the municipality to constitute an Inventory Committee that will conduct physical inventory; non-maintenance of property records; failure to provide depreciation on depreciable PPE and recognize impairment losses on assets due to deterioration.

Samar Qualified Funds totaling P6.622 million granted as financial assistance to various barangays for the implementation of projects were recorded as “Donations” instead of “Due from Local Government Units”;

Due from Other Funds and Due to Other Funds; Real Property Tax Receivable and Deferred Real Property Tax; and Special Education Tax Receivable and Deferred Special Education Tax have reported material differences of P2.586 million, P3.504 million and P1.357 million, respectively;

Unadjusted reconciling items accumulating to P5.227 million of the Cash in Bank-Local Currency Account.

Cities

Calbayog City Qualified Reconciling items amounting to P41.871 million from various bank accounts of the General Fund, Trust Fund and Special Education Fund were unadjusted in the books of accounts;

Various past due cash advances totaling P116.012 million have remained outstanding in the books for more than 2 years thus affecting the surplus account;

Property, Plant and Equipment (PPE) with a net book value of P1.836 billion is not reliable due to the discrepancy of the records of the Accounting Office and General Services Office.

Current liabilities-loans payable domestic is misstated due to the inclusion of the long term portion of the liability amounting to P149.496 million and the overstatement of the loans payable principal balance by P30.106 million and the borrowing costs incurred by the City amounting to P16.787 million and P10.300 million respectively, or a total of P27.088 million was treated as an outright expenses affecting the costs of the qualifying assets;

Non-recognition of the accrual approach in the income recognition and erroneous income classifications in the Economic Enterprise and Development Management (EEDM) operations resulted in the misstatement of the Income account of P13.307 million and other financial statement related accounts for Calendar Year 2018;

310


Business Tax for Calendar Year 2018 totaling P60.563 million is misstated due to erroneous classification of accounts;

Other Maintenance and Operating Expenses (OMOOE) in the total amount of P151.132 million includes expenditures that has specific expense accounts, thus, affecting the propriety of the accounting record and the fair presentation of the financial statements;

Other Deferred Credits totaling P14.250 million was used for all amounts withheld as retention fee from various contractors on the performance of the terms of the contract resulting to the overstatement of this account and the corresponding understatement of the Guaranty/Security Deposits Payable by the said amount;

Failure to adjust the unremitted taxes from SEF payments totaling P.011 million which were taken up as payments in the books resulted to the understatement of the liability and cash account;

Check disbursements totaling P8.421 million could not be ascertained due to the non-submission of 20 Disbursement Vouchers, together with their supporting documents.

Catbalogan City Qualified Cash in Bank-LCCA account amounting P511.701 million could not be ascertained due to: (a) non-adjustment/cancellation of stale checks totaling P.147 million; (b) unrecorded bank account amounting P.001 million; (c) existence of dormant bank accounts in the sum of P.403 million; and, (d) non-submission of the General Ledger and Subsidiary Ledgers;

Advances for Payroll, Advances to Special Disbursing Officer; and the related expense accounts are misstated due to error in recording cash advances for special purpose/time-bound undertakings as Advances for Payroll; the balance of Advances to Special Disbursing Officers account is overstated due to unrecorded liquidation of cash advances for Confidential and Intelligence Fund amounting to P30.904 million; and,

Other Structures, Road Networks, Flood Control System and Other Infrastructure Assets accounts are misstated due to erroneous recording of infrastructure assets during construction period and after their completion; and the accuracy of the balances of Construction and Heavy Equipment and Road Networks accounts could not be ascertained due to the failure of management to present their updated balances.

Municipalities

Almagro Management Letter

Due to non-submission of Financial Statements.

311


Basey Qualified Due from Other Funds account amounting to P176.049 million in the General Fund could not be ascertained because subsidiary ledgers were not maintained for the account and the non-submission of the financial statements for Infrastructures for Rural Productivity Enhancement Sector (InFRES) I and II, and DAR-ADB Second Agrarian Reform Communities Project II (ARCP II) funds;

Property, Plant and Equipment account valued at P221.880 million is overstated by P.437 million because of erroneous recording of expenses to the PPE accounts; and,

Inventory Held for Distribution is understated due to improper recording of inventories to Donations account.

Calbiga Qualified Cash in Bank Local Currency, Current Account balance of P48.418 million is unreliable due to the discrepancy of P.489 million between the reported book balance and the adjusted bank balance;

Uncollected rentals on awarded market stalls accumulating to P.304 million was not reflected in the books of accounts of the municipality; and,

Inventories procured amounting to P2.053 million were recognized as expenses at year-end although not supported with necessary documents to prove its issuance.

Gandara Qualified Cash in Bank - Local Currency, Current Account balance amounting to P18.088 million could not be ascertained due to a net variance of P.413 million between the book and bank balance and the non-preparation of Bank Reconciliation Statements for the seven out of eleven bank depository accounts;

Stale Checks totaling P.274 million which had been outstanding for over six months or more were not cancelled, adjusted and corrected in the books resulting in the understatement of the account balances of the Cash in Bank - Local Currency, Current Account and Accounts Payable;

Funds transferred to People’s Organization totaling P.100 million as assistance for various projects were recorded as Donations instead of as receivables - Due from Non-Government Organizations/People's Organizations;

Property, Plant and Equipment (PPE) account with a total acquisition cost of P312.838 million could not be ascertained due to the (a) failure of the Municipality to create a Committee to conduct the required annual physical count of all its properties which resulted to the non-submission of the Report on the Physical Count of Property, Plant and Equipment; (b) non-maintenance by the General Services Office and Accounting Office of property cards and perpetual inventory records, respectively, for each class of PPE; and, (c) non-reconciliation of the property and accounting records against the general ledger

balances;

312


Operations of the Gandara Water System is still not maintained as a special account in the General Fund (GF) and its income, expenses and other financial transactions were recorded under the Due to LGUs account in the books of the General Fund resulting to the overstatement of the payable account as well as the understatement of the income, expense and other affected accounts; and,

Due to National Government Agencies is overstated due to unspent balance totaling P.946 million which was not yet returned to the concerned Source Agencies or transferred to the General Fund, and an abnormal balance totaling P.198 million.

Hinabangan Qualified Cash in Bank – Local Currency Current Account amounting to

P70.622 million could not be ascertained due to the non-

submission of the bank statements for all bank accounts for the

period September to December 2018, non-

adjustment/cancellation of the stale checks, and the discrepancy

of P5.249 million between the general ledger and balances per

Bank Reconciliation Statements;

Property, Plant and Equipment account valued at P99.239 million

is misstated because 75% of the Public Infrastructures totaling

P12.125 million were not recognized in the books and no

depreciation was provided for CY 2015 to CY 2018 on PPEs with

carrying amount of P17.241 million;

Advances for Payroll amounting to P12.200 million were

erroneously recorded as Advances to Special Disbursing Officer;

and,

Advances to Special Disbursing Officers amounting to P.923

million were erroneously debited to the Accounts Payable

account.

Jiabong

Qualified

Cash in Bank – Local Currency, Current Account totaling P16.322 million could not be ascertained due to non-maintenance of subsidiary ledger for each bank account and non-preparation of Bank Reconciliation Statements on the two bank accounts with an aggregated balance of P.478 million per bank statements;

Waterworks System Fees Account in the Statement of Financial Performance totaling P.073 million could not be ascertained due to absence of the prescribed rates for its collection in the Municipal Revenue Code of the LGU;

Payments for Office Supplies and Other Supplies Expenses from the Special Education Fund amounting to P.070 million were inadvertently posted to Due to Local Government Units, thereby understating both the expense and liabilities accounts;

313


Recognition in the books of at least 75% of the Local Road Network at the end of CY 2018 was not met due to the failure of concerned personnel to keep, maintain and prepare the

records/reports thereby, understating the Property, Plant and Equipment account; and,

Fifty-seven (57) disbursement vouchers and its supporting documents amounting to P13.803 million and twenty-seven (27) checks reported as cancelled, both under the General Fund, were not submitted for audit; and,

Forty-five disbursement vouchers and its supporting documents

amounting to P5.628 million pertaining to CY 2017 transactions

were still not submitted as at CY 2018 year-end.

Marabut Qualified Presence of entries in the General Journals (GJ) totaling P8.236

million without supporting documents, entries in the General

Ledgers (GL) accumulating to P12.515 million not found in the

GJ and unsubmitted Journal Entry Vouchers and supporting

documents affected the reliability of the accounts, while entries in

the GJ of the Trust Fund books totaling P.402 million not

transferred/posted to the GL of the General Fund understated the

accounts;

Recorded cost at P115.841 million for the Municipal Building

donated by the Japan International Cooperation Agency (JICA)

is unreliable due to incomplete records/information as basis for

its determination and the noted discrepancy of P66.634 million

between the balance per books and the physical inventory report

has misstated the Property, Plant and Equipment account;

Loans Payable account was understated by P.130 million due to:

a) various recording errors of the CY 2017 and 2018 transactions

with net overstatement effect of P.111 million and unidentified

prior years’ understatement of P 241 million; and,

Due from LGUs and Other Receivables account amounting to

P.601 million and P.228 million, respectively, which remained

dormant in the books for more than ten (10) years overstated the

asset accounts.

Matuguinao Modified/ Qualified

The balances of the Cash in Bank-Local Currency Current

Account (CIB-LCCA) amounting to P66,936,3578.52, and the

Property, Plant and Equipment account valued at

P52,097,839.55 could not be ascertained due to the non-

preparation and submission of the Bank Reconciliation

Statements, and the non-maintenance of the property cards and

property cards and property, plant and equipment ledger cards,

and failure to conduct physical inventory of properties,

respectively. Likewise, the propriety of the recorded check

disbursements totaling P413,655.70 could not be ascertained

314


due to the absence of the covering disbursement vouchers for

expenditures out of the 20% Development Fund and Local Risk

Reduction Management Fund (LDRRMF).

Motiong Qualified Cash in Bank- Local Currency, Current Account in the amount of

P37.495 million is unreliable due to the failure of the Accountant

to prepare and submit the required Monthly Bank Reconciliation

Statements for all its bank accounts, and to record in the

Municipality’s books two bank accounts totaling P.542 million;

Property, Plant and Equipment accounts totaling P105.715

million could not be ascertained due to: a) absence of updated

Property, Plant and Equipment Ledger Cards (PPELCs) and

Property Cards (PCs); b) failure to conduct physical count of

properties and to prepare Report on the Physical Count of

Property Plant and Equipment (RPCPPE); c) non-provision of

depreciation for Infrastructure Assets totaling P53.468 million; d)

erroneous recording of the accumulated cost of infrastructure

assets and non-reclassification of completed projects to the

proper Property, Plant and Equipment accounts; and, e) double

recording of purchased generator sets;

Loans Payable account as of December 31, 2018 amounting to

P7.820 million is unreliable due to: a) unreconciled beginning

balances; and b) absence of Subsidiary Ledgers to support the

balance per General Ledger and lack of required disclosures in

the Notes to Financial Statement; and,

Due to Special Account, Subsidy from Other Funds and Subsidy

to Other Funds accounts are unreliable due to erroneous

recording of financial transactions.

Pagsanghan Qualified Advances to Special Disbursing Officer account is doubtful due

to failure of the Municipal Accountant to strictly monitor the grant

and liquidation of cash advances for Confidential and/or

Intelligence Funds, and to record a cash advance granted to one

Accountable Officer;

Overstatement of the reported Surplus for the Period in the

Statement of Financial Performance for the year ended

December 31, 2018 due to error in recording the transfer of

Property, Plant and Equipment (PPE) from Trust Fund to the

General Fund; and,

Property, Plant and Equipment accounts is unreliable due to

failure of the Municipal Accountant and Municipal

Treasurer/Property Custodian to reconcile the material disparity

between the balance per books and per inventory report, and to

maintain and update property cards and ledger cards, as

recommended in the CYs 2012, 2013, 2014 and 2015 Annual

Audit Reports (AAR).

315


Paranas Qualified Local road networks costing P24.957 million was unrecorded; completed project costing P10.280 million funded through the CY 2017 Assistance to Disadvantaged Municipalities Program was unrecorded; water bills and market stall rentals amounting to P.948 million and P.100 million, respectively, were unrecorded;

Cash in Bank-Local Currency, Current Account totaling P77.380 millioncould not be ascertained due to: (a) failure to record/adjust in the books various reconciling items amounting to P.462 million, (b) accumulation of doubtful items owing to scrutiny of its causes amounting to P.310 million, and (c) failure to reconcile the Accounting and Treasury books resulting to a variance of P.018 million;

Due from LGUs account amounting to P.032 million which remained dormant in the books for more than ten (10) years was not acted upon to facilitate the proper write-off thereof; and the inadvertent charging of wages of job order personnel totaling P13.434 million to Salaries and Wages-Casual/Contractual account title, instead of charging the same to the appropriate Maintenance and Other Operating Expenses account titles; and,

Equipment and in-kind donations were not recorded amounting to P.171 millionand P1.293 million, respectively; and,

Zero balance of inventory as of December 31, 2018 is unreliable because a total of 116,420 pieces of accountable forms were not yet used or issued.

Pinabacdao Qualified Cash in Bank – Local Currency, Current Account with a balance of P62.567 million is unreliable due to non-preparation of complete bank reconciliation statements, which resulted to unrecorded bank credits of P.597 million and existence of unidentified balance of P1.596 million;

Loans Receivable – Others account was understated by P.401 million due to various erroneous recording of loan transactions;

Accounts Receivable was also understated by P.283 million, due to non-recording of uncollected water bills from its waterworks system consumers;

Difference of P15.377 million between the year-end balances of the reciprocal accounts Intra-Agency Receivables and Intra-Agency Payables valued at P5.665 million and P21.042 million, respectively; and,

Property, Plant and Equipment (PPE) account with carrying amount of P96.237 million in CY 2017 which increased to P124.721 million in CY 2018 could not be ascertained due to non-submission of the Report on the Physical Count of PPE as of December 31, 2018 and non-provision of depreciation on some of its depreciable assets .

San Jorge Qualified Receivable accounts which remained dormant in the books for more than ten (10) years were not acted upon to facilitate the proper write-off thereof, resulting in the overstatement of agency assets totaling P.722 million;

316


Recognition in the books of at least 75% of the Local Road Network at the end of CY 2018, was not met due to the failure of concerned personnel to keep, maintain and prepare the records/reports thereby, understating the Property, Plant and Equipment account;

Errors in the classification of projects completed in CY 2016 remained unadjusted;

Disclosures of the Loans Payable-Domestic Account with an outstanding balance of P18.683 million were omitted in the Notes to Financial Statement.

Balances of some line items in the Statement of Cash Flows still

do not reconcile with the account details in the Notes to Financial

Statements and no cross-referencing was made for the line items

in the Statement of Comparison of Budget and Actual Amounts

to any related information in the Notes to Combined Financial

Statements; and,

Property, Plant and Equipment accounts balance in CY 2017 with

carrying amount of P50.368 million which increased to P117.408

million in CY 2018 could still not be ascertained due to absence

of provision for depreciation on some accounts and

discrepancies between the actual physical count and balances

per book.

San Jose de Buan Adverse Cash in Bank – Local Currency, Current Account totaling P78.304 million could not be ascertained due to non-maintenance of subsidiary ledger for each bank account, non-preparation of Bank Reconciliation Statements on the seven bank accounts and non-submission of bank statements of the four bank accounts with undetermined balances;

Cash Local Treasury Account for GF and SEF with year end balances of (P.011 million) and (P.008 million) respectively could not be ascertained due to the failure to reconcile the Accounting and Treasury books;

Depreciable assets totaling P66.556 million were not provided with an allowance for deprecation, thus understating the related Expense and Accumulated Depreciation accounts, as well as overstating the Property, Plant and Equipment and Government Equity accounts;

Loans Payable – Domestic account amounting to (P.537 million) has decreased the total liability amount presented in the Statement of Financial Position;

LDRRMF unexpended balance of P3.168 million for CY 2018 and those from previous years’ was not transferred to a special trust fund; and,

Forty-three (43) paid disbursement vouchers for CY 2018 amounting to P3.251 million under the General Fund were not submitted for audit.

317


San Sebastian Modified/ Qualified

Cash in Bank – Local Currency, Current Account amounting to P55.410 million is unreliable due to non-preparation and non-maintenance of bank reconciliation statements;

Property, Plant and Equipment (PPE) account amounting to P43.679 million, net of accumulated depreciation, is not reliable because: (1) beginning balance of PPE was underdepreciated by P.244 million and no depreciation was recognized on PPE totaling P19.219 million which comprised 36% of the total PPE; (2) the same was not supported with property, plant and equipment ledger cards as well as property cards; and, (3) physical inventory was not conducted on all PPE;

Subsidiary ledgers/records were not maintained for 21 receivable and liability accounts totaling P85.002 million while fifteen accounts remained dormant for 2 to 4 years and the reasons for their dormancy were not sufficiently disclosed in the Notes to Financial Statements; and,

Disbursements totaling P1.461 million and two checks reported as cancelled is doubtful due to non-submission of the disbursement vouchers and supporting documents.

Santa Margarita Qualified Cash in Bank - Local Currency, Current Account amounting to

P33.984 million could not be ascertained because of a) various reconciling items totaling P3.112 million remained unadjusted in the books of the General Fund; (b) unreconciled difference in the book and bank balances in prior years totaling P7.622 million; (c) unidentified debit in the General Ledger under the Trust Fund amounting to P26.273 million;

Stale checks totaling P.035 million which had been outstanding for over six months were not cancelled, adjusted and corrected in the books resulting in the understatement of the account balances of the Cash in Bank - Local Currency, Current Account and Accounts Payable;

Collections totaling to P.090 million were not recorded in the books as of year-end, thus, the Cash - Local Treasury and income accounts are understated by the same amount, and in CY 2014, the Cash – Local Treasury account was unreasonably reduced by recording deposits amounting to P.547 million which were not supported with validated deposit slips, and this remained unadjusted in the books to date;

Property, Plant and Equipment account with a carrying amount of P93.416 million (excluding Construction in Progress totaling P44.314 million) could still not be ascertained due to absence of property records, and their existence could not be established due to the absence of a Report on the Physical Count of Property, Plant and Equipment;

Funds transferred to various barangays totaling P.137 million as assistance for various projects were recorded as Donations instead of Due from Local Government Units;

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Failure to transfer the current year unexpended balance of the LDRRMF Special Trust Fund amounting to P1.573 million as well as the transfer of the prior year’s unexpended balance amounting to P3.738 million which remained unrecorded as of year-end thus, resulting to the understatement and overstatement of the affected accounts in both the books of the Trust and General Funds; and,

Ownership of the lot purchased in CY 2016 totaling P2.723 million was not established.

Santa Rita Qualified Cash in Bank – Local Currency, Current Account totaling P96.764

million is unreliable due to (a) credit adjustment of P.579 million without supporting documents; (b) unadjusted reconciling items amounting to P5.297 million; (c) inclusion of stale checks as outstanding checks totaling P2.792 million; and, (d) absence of bank statement for one DBP loan account;

Inventories procured amounting to P16.762 million were recognized as expenses at year-end although not supported with necessary documents to prove its issuance;

Property, Plant and Equipment with total cost of P442.167 million is unreliable due to erroneous use of accounts in recording assets procured during the year totaling P2.404 million and the noted discrepancy of P64.004 million between the balance per books and the physical inventory report; and,

Due from Other Funds and Due to Other Funds in the amount of P10.770 million and P2.277 million, respectively, could not be ascertained due to a material difference of P8.493 million.

Santo Niño Qualified Cash in Bank - Local Currency, Current Account amounting to

P60.554 million could not be ascertained due to: (a) various reconciling items totaling P.903 million which remained unadjusted in the books; (b) unreconciled discrepancy in the book and bank balances in prior years totaling a net amount of P.096 million; and (c) unrecorded bank account balances totaling P.577 million of which no Bank Reconciliation Statements (BRS) were prepared and submitted; stale checks totaling P.138, million which had been outstanding for over six months or more were not cancelled, adjusted and corrected in the books, resulting in the understatement of the account balances of the Cash in Bank - Local Currency, Current Account and Accounts Payable;

Property, Plant and Equipment account with a total acquisition

cost of P129.242 million excluding Construction in Progress totaling P24.031 million, could not be ascertained and established due to the failure of the Inventory Committee to conduct the required annual physical count of all its properties which resulted to the non-submission of the Report on the Physical Count of Property, Plant and Equipment as well as the disparity amounting to P4.293 million between the inventory report prepared by the Municipal Accountant - Designate and the reported book balance; and,

319


Failure to transfer the unexpended/unobligated balance of the LDRRMF to the Special Trust Fund for CYs 2017 and 2018 amounting to P3.568 million resulted to the understatement and overstatement of the affected accounts in both the Trust and General Fund books.

Tagapul-an Qualified Material disparity between the balance per books and the

balance per bank, and the existence of unreconciled items

pertaining to prior years’ transactions in the Cash in Bank-Local

Currency, Current Account of P9.426 million; b) absence of a

bank certificate to validate the existence of the Cash in Bank-

Local Currency, Savings Account of P.309 million;

Inability of the management to conduct an annual physical count

of all properties, maintain Property Cards, PPE Ledgers Cards,

and Real Property Ledger Cards of the Property, Plant and

Equipment (PPE) with a net book value of P33.217 million

renders the PPA account unreliable;

Erroneous classification of various nominal and real account

balances totaling P2.935 million;

Discrepancy of P.181 million between the reciprocal accounts

Due from Other Funds and Due to Other Funds for all funds, and,

Non-submission of disbursement vouchers and supporting

documents totaling P11.355 million.

Talalora Qualified Cash Local Treasury amounting to P1.838 million is doubtful due

to the continued failure of the Municipal Treasurer to deposit the

amount;

Cash in Bank – Local Currency Current Account could not be

ascertained due to the unverified reconciling item in the General

Fund amounting to P33.696 million;

Due to GSIS, Due to PhilHealth and Due to GOCCs with negative

balances of P.105 million, P.040 million and P.537 million,

respectively are unreliable due to the absence of the payrolls

which remained unsubmitted, to support the recorded amount

withheld from salaries of officials and employees; and.

Disbursements totaling P12.631 million could not be ascertained

due to the absence of the covering disbursements vouchers for

expenditures out of the General Fund and the Local Disaster Risk

Reduction Management Fund.

Tarangnan

Qualified Due from Other Funds and Due to Other Funds accounts were

not reconciled due to the failure of the Municipal Accountant to

close the Due from Other Funds-KC-NCDDP account under the

General Fund amounting to P.150 million after completion of the

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KC-NCDDP project and closure of the Due to Other Funds

account under the Trust Fund;


ascertained and its existence could not be established due to the

failure of management to maintain subsidiary records for roads

and road components for every road network, as well as a Local

Road Inventory and Road Map, to keep a complete Local Road

Network Property Card, to conduct physical count and prepare

the Report on the Physical Count of the Road Network System;

and,

Land, Land Improvements, and Buildings accounts totaling

P19.242 million could not be ascertained because management

failed to reconcile the balances with the real property of the

Municipal Assessor, as recommended in the CY 2010 AAR.

Villareal Qualified Cash in Bank-Local Currency, Current Account (CIB-LCCA)

amounting to P38.354 million was unreliable because bank reconciliation statements included unsubstantiated book and bank errors totaling P.742 million, while sixteen stale checks totaling P.604 million were not restored to the CIB-LCCA;

Cash-Local Treasury account’s general ledger were overstated by P.023 million;

Property, Plant and Equipment (PPE) account amounting to P122.961 million net of accumulated depreciation, was not reliable because: (1) the beginning balance of PPE was overstated by P2.560 million, depreciation expense for the year is overstated by P.190 million and no depreciation was recognized on PPE totaling P38.037 million which comprised 31% of the total PPE; (2) the same was not supported with property, plant and equipment ledger cards as well as property cards; and (3) physical inventory was not conducted on all PPE;

Subsidiary ledgers/records were not maintained for 21 receivable and liability accounts totaling P74.345 million while fifteen accounts remained dormant for 2 to 5 years and the reasons for their dormancy were not sufficiently disclosed in the Notes to Financial Statements; and,

Disbursements totaling P4.131 million is doubtful due to non-submission of the disbursement vouchers and supporting documents and 99 checks reported as cancelled.

Zumarraga Qualified Bank reconciliation statements included unknown reconciling

item of P7.750 million; three outstanding stale checks totaling P.011 million were not restored to Cash in Bank – Local Currency, Current Account; and deposits and disbursements posted to the account’s general ledger were overstated by P.291 million and P1.649 million, respectively;

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Property, Plant and Equipment (PPE) account amounting to P44.105 million net of accumulated depreciation, is not reliable because: (1) beginning balance of PPE was underdepreciated by P.781 million and no depreciation was recognized on PPE totaling P21.879 million which comprised 35% of the total PPE; (2) the same was not supported with property, plant and equipment ledger cards as well as property cards; and (3) physical inventory was not conducted on all PPE;

Subsidiary ledgers/records were not maintained for eighteen receivable and liability accounts totaling P47.892 million, while twelve accounts remained dormant for 3 to 5 years and the reasons for their dormancy were not sufficiently disclosed in the Notes to Financial Statements; and,

Disbursements totaling P5.943 million and 70 checks reported as cancelled is doubtful due to non-submission of the disbursement vouchers and supporting documents.

Southern Leyte

Qualified

Property, Plant and Equipment (PPE) account amounting to P1.189 billion (exclusive of the Construction in Progress) cannot be ascertained due to the incomplete data in the Report of Physical Count of Property, Plant and Equipment (RPCPPE) caused by the unfinished physical count of PPE and unreconciled balances between the accounting records and the General Services Office records amounting to P439.056 million;

Cash in Bank balance amounting to P1.122 billion as of

December 31, 2018 which cannot be ascertained due to the

absence of Bank Reconciliation Statements (BRS) as of

Statement of Financial Position date;

Accounts Payable under the General Fund amounting to P10.502 million from CYs 2004-2016, representing 22% of its total balance of P47.768 million remained dormant in the book of accounts as of December 31, 2018 due to recorded payables without valid supporting documents.

City

Maasin City

Qualified

Property, Plant and Equipment account amounting to P978.282

million could not be ascertained due to the absence of the Report


(RPCPPE) as of year-end;

Cash in Bank – Local Currency, Time Deposit and Cash in Bank

- Local Currency, Checking Account are not reliable due to

unrecorded interests earned from time deposits from December

2015 to December 2018 in the amount of P1.772 million and

unrecorded bank deposit of P.064 million;

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Loans Payable amounting to P26.925 million as reflected in the

book of accounts does not reconcile with the actual loan balance

per bank records;

Inter-Agency Payables to BIR and GSIS included a negative

balance of P.176 million; and,

Cash in Bank - LCCA of LDRRMF amounting to P24.823 million

as of December 31, 2018 is understated due to the non-

adjustment of the reported expense of P.200 million but was

unclaimed as of year-end.

Municipalities

Anahawan

Qualified

PPE account amounting to P114.488 million as of December 31,

2018 cannot be ascertained due to the absence of the Report on


Bontoc Qualified Property, Plant and Equipment (PPE) account amounting to P 158.660 million (net of Depreciation) as of December 31, 2018 cannot be ascertained due to the unreconciled balances between the accounting records and the general services office records.

Hinunangan Qualified Property, Plant and Equipment (PPE) account amounting to

P140.039 million cannot be ascertained due to: (a) the absence of the Report of the Physical Count of Property, Plant and Equipment (RPCPPE) caused by the incomplete physical count of properties, and (b) non-reconciliation of records between the Accounting office and the General Services Office; and,

Cash in Bank balance amounting to P86.220 million is doubtful due to unreconciled and unadjusted reconciling items pertaining to CY 2018 and prior years in the total amount of P3.176 million (deductions).

Hinundayan

Qualified

Property, Plant and Equipment (PPE) account amounting to P95.677 million cannot be ascertained due to the (a) absence of the Report of Physical Count of Property, Plant and Equipment (RPCPPE) caused by the incomplete physical count of properties; (b) non-provision of depreciation of some properties; and, (c) non-reconciliation of records between the accounting and the General Service Office;

Cash in Bank in the amount of P64.660 million is doubtful because of the (a) presence of stale checks amounting to P.468 million (b) unaccounted difference between the book and the bank balance of P387.52 (c) issued checks totaling P1.307 million which remained outstanding for more than six months, thus, have become stale, and were continually treated as reconciling items in the books;

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Loans payable balance amounting to P17.605 million is doubtful due to non-reconciliation of records between the Accounting and the MDFO; and,

The erroneous recording of interest expense of loans which debited the Government Equity account in the amount of P5.230 million.

Libagon Qualified Property, Plant and Equipment (PPE) account amounting to

P163.689 million as of December 31, 2018 cannot be ascertained due to the a) absence of the Report of Physical Count of Property, Plant and Equipment (RPCPPE) caused by the incomplete physical count of properties; b) inclusion of unserviceable/demolished properties amounting to P9.399 million; and, c) unreconciled balances between the accounting records and the general services office records; and,

Cash in Bank account was doubtful because of the unreconciled

balance amounting to P1.438 million per book records and per bank confirmation; errors in the books totaling P.005 million were not corrected; and issued checks totaling P.006 million that remained outstanding for more than six months, thus, have become stale, were continually treated as reconciling items in the book.

Liloan Qualified PPE account as of yearend amounting to P192.425 million cannot

be ascertained due to the non-conduct of physical count of properties caused by the lack of properly trained personnel to conduct the inventory.

Limasawa Qualified Property, Plant and Equipment (PPE) account amounting to


due to the absence of the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) and unreconciled

balances between the Accounting records and General Services

Office records amounting to P10.948 million.

Macrohon Qualified Construction-in-Progress (CIP)-Buildings and Other Structures amounting to P.798 million, under the Special Education Fund (SEF) was overstated and Property, Plant and Equipment (PPE) account was understated by the same amount due to the non-reclassification of the CIP account to PPE account upon completion of the project.

Malitbog Qualified Property, Plant and Equipment (PPE) account balance

amounting to P164.253 million as of December 31, 2018 cannot be ascertained due to: (a) unreconciled account balances between the accounting records and the Report of Physical Count of Property, Plant and Equipment (RPCPPE); (b) unrecorded PPEs amounting to P10.157 million due to improper recording of disbursements charged against the Bottom-up Budgeting (BuB) Fund; and, unrecorded reconciling items in the amount of P1.997 million;

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Discrepancy between the amount of Cash in Bank per bank confirmation and Cash in Bank per Bank Statement as reflected in the Bank Reconciliation Statements in the amount of P.953 million and unrecorded Cash in Bank amounting to P.922 million cast doubt on the reliability of the Cash in Bank balance of P48.845 million as at year-end;

Iimproper recording of disbursements charged against the Bottom-up-Budgeting (BuB) Fund resulted in the non-booking up of PPEs acquired in the amount of P10.157 million in the book of accounts, understating the said account of the same amount.

Padre Burgos Qualified Property, Plant and Equipment (PPE) account amounting to P107.236 million as of December 31, 2018 cannot be ascertained due to the (a) incomplete physical count of properties and non-reconciliation of records between the accounting and the General Service Office (GSO) and (b) the amount of P2.041 million representing cost of demolished municipal building which is still carried in the book of accounts resulting in the overstatement of PPE and Government Equity accounts;

Cash in Bank account was doubtful because of the (a) unreconciled balance between the bank reconciliation statement and bank confirmation in the amount of P.244 million; (b) errors in the books totaling P1.395 million which were not corrected; and, (c) issued checks totaling P.318 million that remained outstanding for more than six months, thus, have become stale, were continually treated as reconciling items in the books.

Pintuyan Qualified PPE account amounting to P99.408 million as of December 31, 2018 cannot be ascertained due to the absence of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) caused by the incomplete physical count of properties; and,

Cash in Bank (CIB) balance amounting to P85.871 million is doubtful due to its non-reconciliation with the balances provided by the Land Bank of the Philippines (LBP), Sogod/Maasin branches upon confirmation with a difference amounting to P.694 million, the bank balance being greater than the book balance.

Saint Bernard Qualified Property, Plant and Equipment (PPE) amounting to P174.555

million cannot be ascertained due to the absence of the Report of the Physical Count of Properties, Plant and Equipment (RPCPPE) caused by the non-conduct of physical count of properties and non-reconciliation of records between the Accounting and the General Service Office (GSO).

San Francisco Qualified PPE account totaling P125.668 million cannot be ascertained

due to the absence of the Report of the Physical Count of Properties, Plant and Equipment (RPCPPE) caused by the non-conduct of physical count of properties.

San Juan Qualified Property, Plant and Equipment (PPE) account totaling P 58.840

million, net of depreciation, cannot be ascertained due to the unreconciled difference of P1.300 million between the

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accounting records and the Report of Physical Count of Property, Plant and Equipment (RPCPPE) and the unrecorded 1 unit school building (Child Development Center) with a cost of P 2.064 million; and,

Cash in Bank balance as at year-end amounting to P 103.204

million was not established due to the unrecorded Cash in Bank

amounting to P .053 million.

San Ricardo Qualified Property, Plant and Equipment (PPE) account totaling P108.547 million as of December 31, 2018 cannot be ascertained due to the absence of the Report of the Physical Count of Property, Plant and Equipment (RCPPE) caused by the non-conduct of physical count of properties; and,

Cash in Bank balance totaling P82.329 million as of December 31, 2018 is doubtful since it did not reconcile with the balance per Land Bank of the Philippines (LBP), Sogod branch confirmation with a difference amounting to P5.303 million, the bank balance being greater than the book balance.

Silago Qualified Investment properties and Property, Plant and Equipment (PPE) accounts amounting to P9.010 million and P169.664 million, respectively, as of December 31, 2018 cannot be ascertained due to the absence of the Report of Physical Count of Property, Plant and Equipment (RPCPPE)caused by the incomplete some properties and non-reconciliation of records between the accounting and the General Service Office;

Cash in Bank (CIB) balance with an aggregate amount of P34.677 million as of December 31, 2018 is doubtful due to unrecorded/unadjusted reconciling items pertaining to CY 2018 and prior years in the total amount of P.50 (additions) and P1.081 million (deductions);

Cash in Local Treasury balance in the amount of P.648 million as

of December 31, 2018 is doubtful due to the negative balance in

the Special Education Fund amounting to P.088 million.

Sogod Qualified Property, Plant and Equipment account amounting to P312.778

million as of December 31, 2018 cannot be ascertained due to

the absence of the Report of Physical Count of Property, Plant

and Equipment (RPCPPE) and unreconciled balances between

the Accounting and the Municipal Treasury Office;

Issued checks amounting to P.284 million which remained outstanding for six months to four years have been continually treated as reconciling items in the books;

Difference between the recorded balance of the loans payable and the loans payable per bank confirmation amounting to P.010 million;

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Property, Plant and Equipment-Land account is understated by P.647 million because the disbursement on the right of way was not capitalized;

Work/Zoo Animals and Breeding Stock accounts in the amount

of P.140 million and P.128 million respectively, remained dormant

since 2008 due to the non-monitoring of the existence and

condition of the dispersed breeding stocks/animals as evidenced

by the absence of records and inventory report thereon.

Tomas Oppus Modified

Property, Plant and Equipment (PPE) account amounting to P88.942 million as of December 31, 2018 cannot be ascertained due to the absence of the Report on the Physical Count of Property, Plant and Equipment caused by the incomplete physical count of properties and unreconciled balances between the Accounting and General Services Office records; and,

Cash in Bank account was doubtful because of the (a) unreconciled balance of (P.692 million) per bank confirmation; (b) errors in the books totaling P63,211.01 were not corrected; and (c) issued checks totaling P.148 million that remained outstanding for more than six months, thus, have become stale, were continually treated as reconciling items in the books.

Region IX – Zamboanga Peninsula

Zamboanga del Norte

Unqualified

Cities

Dapitan City Qualified Four accounts amounting to P12.100 million under the Inventory Held for Consumption account with a total amount of P18.7 million reflected more or less the same amount for the last five years casting doubt on the correctness, existence, reliability and validity of the account;

Annual physical inventory of Property, Plant and Equipment (PPE) was not performed in CY 2018, thus, the existence and valuation of PPE with a total amount of P913.500 million, net of depreciation, could not be ascertained; and,

Land account totaling P19.200 million is understated by the cost of six acquisitions of about P3.500 million, and also the value of seven lots with structures of the City constructed thereon, which have not been recorded in the books.

Dipolog City Qualified Unreconciled difference of P179.903 million between the Report of Physical Count of PPE (RPCPPE) amounts and those of the accounting records casts doubt on the reliability of reported PPE totaling P1.410 billion as of December 31, 2018;

Inventory accounts totaling P91.004 million as of December 31, 2018 could not be ascertained due to the (a) unreconciled difference of P80.917 million between the balances per books and actual physical count, and (b) incomplete submission of Report of Physical Count of Inventories (RPCI);

327


Cash in Bank (CIB) balance of P746.760 million could not be established due to unadjusted reconciling items of P2.844 million which have been unadjusted for more than five years, and discrepancies amounting to P72.631 million between the balances of the cashbook of the City Treasurer and those per accounting ledgers;

CIB balance totaling P2.062 million under the Trust Fund as of December 31, 2018 could not be ascertained due to the absence of bank reconciliation statements and cashbook; and,

Advances to Special Disbursing Officers with a total amount of P15.166 million (net of intelligence funds), as well as Advances to Officers and Employees amounting to P.956 million out of which, P6.080 million, or 40.09% and P.579 million, or 60.54%, respectively, remained unliquidated for over a year as of December 31, 2018, thereby affecting the timing and recognition of expenses.

Municipalities

Baliguian Adverse Failure to prepare and submit monthly the bank reconciliation

statement for all funds (GF, SEF and TF), totaling P69.097

million;

Abnormal balances of specific accounts in Inter-Agency

Payables, resulting to a net credit balance of P1.369 million;

Other Deferred Credit Account was overstated by P22.833

million, due to erroneous recording to the account of

Disallowances, upon receipt of the Notice of Finality of

Disallowance (NFD);

No depreciation expenses for PPEs were charged for the year;

and,

Ninety (90) Statement of Financial Position accounts of the

municipality’s CY 2018 financial statements with a total Debit and

Credit Balances of P450.220 million and P266.829 million,

respectively, were not supported with necessary schedules.

Godod Qualified Bank Reconciliation Statements (BRS) were not prepared and

submitted regularly on time thus casting doubt as to the

correctness of the Cash in Bank account balance of P64.002

million, resulting to the non-adjustment of the corresponding

reconciling items; and staled checks totaling to P.095 million

remained outstanding as of year-end, resulting to the

understatement of both the Cash in Bank and Payable accounts;

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Property, Plant and Equipment (PPE) with a carrying value of

P137.650 million were doubtful because of (a) non-completion of

the Report on the Physical Count of Property, Plant and

Equipment (RPCPPE); (b) non-maintenance of updated

Acknowledgement Receipts for Equipment (ARE); (c) non-

maintenance of subsidiary ledgers at the Accounting Office; and,

(d) unreconciled property and accounting records.

Gutalac Qualified Various deficiencies were noted in the audit of cash such as: (1)

non preparation of bank reconciliation statements (BRSs)

rendering balances of cash amounting to P39.926 million

doubtful; and (2) inadequate internal control arising from (a) non

reconciliation between the cash book and accounting records

which resulted to a total variance of P.337 million; and, (b) non

preparation of cash book from various accountable officers

exposing government funds to possible misuse due to laxity of

control in handling cash accounts; and,

Inventory and Property, Plant and Equipment (PPE) accounts

amounting to P.136 million and P162.725 million, respectively are

doubtful due to non-conduct of annual physical count;

No provision for depreciation for PPE under General and Trust

Fund totaling P94.044 million;

Road Network account in the amount of P52.444 million is

doubtful due to no Report of the Physical Count of Local Road

Network and no proper disclosure;

Jose Dalman Qualified Infrastructure assets accounts of the Municipality totaling

P28.133 million, net of accumulated depreciation, as of

December 31, 2018 cannot be relied upon due to lack of reports

Kalawit Qualified Property, Plant and Equipment accounts totaling P 120.541

million could not be ascertained due to a) inability of the

management to reconcile the physical inventory report with the

accounting records, and, b) non-preparation/maintenance of

Property Cards by the General Services Office; and,

Road Networks amounting to P 29.714 million as of December

31, 2018 is doubtful due to the failure to reconcile its road

networks with the Physical Inventory Report and to maintain the

required records enumerated under COA Circular No. 2015-008.

Katipunan Qualified Road Network account in the amount P27.341 million in the General Fund could not be ascertained due to; (a) non –taking - up of depreciation on the depreciable Road Network component; (b) no Report on the Physical Count of Local Road Network; (c) non - maintenance of subsidiary ledger for the road networks account; and (d) no proper disclosure in the Notes to Financial Statements;

329


Property Plant and Equipment (PPE) account in the amount of P156.024 million was not established due to unreconciled difference between the Report of Physical Count of PPE and the Accounting Records amounting to P55.553 million, non- recognition of depreciation expense for CY 2018 of its Property, Plant and Equipment (PPE) with book value amounting to P28.523 million and non-preparation of bank reconciliation statement of fourteen (14) bank accounts maintained by the Municipality.

La Libertad Qualified Inventory and Property, Plant and Equipment (PPE) accounts

totaling P4.343 million and P99.521 million, respectively, cannot be ascertained; and,

Property, Plant and Equipment under the General Fund totaling P23.145 million, resulting to the misstatement of affected accumulated depreciation, depreciation expenses and government equity accounts.

Labason Qualified Due from Non-Government Organization (NGO)/People’s

Organization (PO) amounting to P.313 million remained

unliquidated and/or unrefunded;

Distributed drugs and medicine amounting to P4.496 million

remained in the books of accounts;

Advances to Contractors amounting to P.249 million remained in

the books of accounts of the Municipality;

Doubtful Inventory and Property, Plant and Equipment (PPE)


respectively, due to non-conduct of annual physical count;

No provision for depreciation for PPE under Trust Fund totaling

P26.633 million and the inclusion of residual value in the

computation of Road Network account;

Doubtful Road Network account in the amount of P87.944 million

due to no Report of the Physical Count of Local Road Network

and no proper disclosure; and,

Erroneous classification in the recording of PPE in the books of

accounts.

Leon B. Postigo Qualified Staled checks totaling to P.008 million remained outstanding as

of year-end resulting to the understatement of both the Cash-In

Bank and Payable accounts;

Cash advances granted to municipal officials, employees and

other government personnel totaling P.682 million remained

unliquidated as of year-end resulting to timing differences of the

expenses accounts; and,

330


No provision of Depreciation on some of the Property, Plant and

Equipment; and Biological Assets accounts consisting of 1,713

Plants and Trees (10801020) in an area of 13.25 hectares were

not recognized in the books of accounts of the municipality.

Liloy Qualified Doubtful Inventory and Property, Plant and Equipment (PPE)

accounts amounting to P.870 million and P164.629 million,

respectively due to non-conduct of annual physical count and to

support the recorded balance with property cards and PPE ledger

cards;

No provision for depreciation for PPE totaling P40.028 million;

Doubtful Road Network account in the amount of P30.829 million

due to no Report of the Physical Count of Local Road Network

and no proper disclosure; and,

Continuous non-application of modified accrual as basis of

accounting its income.

Manukan Qualified Road Network account in the amount P124.012 million in the General Fund could not be ascertained due to; (a) non – preparation of Report on the Physical Count of Local Road Network; (b) non - maintenance of subsidiary ledger for the road networks account; and, (c) the absence of proper disclosure in the Notes to Financial Statements.

Mutia Qualified Inventory and property, plant and equipment (PPE) accounts totaling P5.178 million and P149.966 million, respectively, cannot be ascertained due to (a) non-reconciliation of the results of the physical inventory-taking with accounting records; (b) non-submission of various records, documents and reports related to Fuel, Oil and Lubricants Inventory; (c) recognized Local Road Networks in the books of accounts of the LGU are doubtful due to incomplete documentation; (d) real estate owned by the municipality lacked Transfer Certificates of Title (TCTs) to prove ownership; and (e) no provision for depreciation was made for certain PPEs totaling P89.107 million.

Piñan Qualified Real Property Tax Receivables (RPT) and Special Education Tax (SET) Receivables at the beginning of the year were based on income estimates instead of the actual receivables from said taxes; hence, resulted to the understatement of the accounts RPT/SET Receivables and Deferred Real Property Taxes Income/Deferred Special Education Tax Income;

Road Networks totaling to P103.213 million as of December 31, 2018 could not be ascertained due to the failure to conduct physical count of its road networks, maintain the required records and provide depreciation for its Road Networks;

No provision for depreciation was provided for its depreciable assets totaling to P10.156 million; hence, resulted to the misstatements of income, and assets and equity accounts at year-end; and,

331


Due from Other Funds and Due to Other Funds had a net difference of P11.619 million; hence, rendering the accuracy and reliability of the affected accounts doubtful.

Polanco Qualified Failure to conduct physical count and maintain Property Cards

casted doubt on the existence and completeness of the PPE account balance totaling to P40.967 million;

Road Networks could not be ascertained due to: (a) non-conduct of annual physical inventory of its Road Networks totaling to P11.587 million; (b) non-preparation/maintenance of Report of the Local Road Network, Local Road Network Property Card and Road Map; (c) non-maintenance of Local Road Network Ledger Card on Road Networks totaling to P1.826 million; and, (c) non-recognition of depreciation for its Road Networks;

Seventy five percent (75%) of the Public Infrastructures Assets transferred to the Registry of Public Infrastructures from CY 2015 and earlier years amounting to P1.615 million were not recognized back in the books of accounts;

Accounts Payable totaling to P24.220 million included goods which are not yet received and accepted by the LGU and are not supported with the required documents; hence, the existence and validity of the accounts payable balance could not be ascertained;

Due from Other Funds and Due to Other Funds had a net difference of P.487 million; thus, rendering the accuracy and reliability of the affected accounts doubtful; and,

Cash advances totaling to P.341 million remained unliquidated at year-end; thus, timely recognition of the affected accounts could not be effected.

President Manuel A. Roxas

Qualified Road Network account in the amount of P 55.930 million could not be ascertained due to; (a) unreconciled Local Road Network inventory records in the amount of P9.524 million; (b) non - maintenance of subsidiary ledger for the road networks account; (c) lack of proper disclosure in the Notes to Financial Statements; and, (d) non – recognition of depreciation/impairment.

Rizal Qualified Inventory and PPE accounts totaling P1.104 million and

P106.640 million, respectively, cannot be ascertained due to (a) failure to conduct physical count and reconciliation thereof of inventories and PPEs; (b) incomplete documentation of recognized Local Road Networks; and, (c) inadequate supporting documents to prove ownership and not properly valued land accounts; and,

Representation and transportation allowance (RATA) totaling to P2.750 million was charged against the funds for Maintenance and Other Operating Expenses (MOOE) instead of Personal Services (PS) to show that it is compliant to the budgetary limitation provided in Section 325 (a) of R.A. 7160.

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Salug Qualified Cash in Bank account balance could not be ascertained due to

(a) Consolidated Statement of Financial Position and Notes to FS

balance of Cash in Bank account for the General Fund does not

tally with its subsidiary ledger, thereby overstating it by P1.822

million; (b) Reconciling items were not adjusted to the Cash in

Bank account at year-end resulting to an overstatement totaling

to P501 million,446.48; (c) Trust Fund KALAHI PROJECT Bank

Reconciliation Statement (BRS) for December 2018 was not

prepared and submitted on time; and, (d) Staled checks totaling

to P.654 million remained outstanding as of year-end, resulting

to the understatement of both the Cash In Bank and Payable

accounts;

Recording for the purchases of gasoline and diesel fuel as

Gasoline, Oil and Lubricants Inventory instead of Other

Prepayments is inappropriate since the items are not received by

the agency but instead kept at the supplier’s depot for

safekeeping subject to withdrawal. Thus, the said account is

overstated by P.463 million and Other Prepayments is

understated by the same amount;

Other Supplies and Materials Inventory totaling to P.124 million

were booked as Other Property Plant and Equipment, thereby

overstating the Other Property Plant and Equipment (10799990)

by P.124 million and understating the Other Supplies and

Materials Inventory account (10404990) by the same amount;

Depreciation on all Property, Plant and Equipment under the

General Fund were not provided; and,

Biological Assets accounts totaling to P.750 million was not

recognized in the books of accounts of the municipality and

Breeding Stocks 10801010) and Other Bearer Biological Assets

(10801990) were not recorded in the books.

Sergio Osmeña Sr. Qualified Reconciling items appearing in the Bank Reconciliation Statements totaling to P4.385 million remained unrecognized/uncorrected in the books f accounts which resulted to the net understatement of Cash in bank by P1.844 million and understatement/overstatement of various affected accounts;

Issued accountable forms totaling to 9,424 pieces remained unreported/unremitted for several years; hence, resulted to the non-recognition of the corresponding collections in the books of accounts;

Non-liquidation of cash advances totaling to P2.720 million.

Due to Other Funds and Due from Other Funds had a net difference of P3.397 million; hence, rendering the accuracy and reliability of the affected accounts doubtful;and,

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Real Property Tax Receivables (RPT) and Special Education Tax (SET) Receivables at the beginning of the year were not supported with a Certified List of Taxpayers with the corresponding amount due and collectible in CY 2018; hence, casted doubt on the accuracy and reliability of the accounts RPT/SET Receivables and Deferred RPT/SET Income.

Siayan Qualified Various deficiencies noted in handling, issuance, recording and reporting of inventories, resulted to overstatement of Inventory and Government Equity accounts amounting to P11.998 million as of December 31, 2018 and understating expenses for the period then ended.

The year-end balances of the Real Property Tax (RPT) and Special Education Tax (SET) Receivables totaling P12.201 million cannot be relied upon due to the failure of the Municipal Treasurer to submit the certified list of taxpayers to the Municipal Accountant as basis for the setting-up of receivables; and,

Accounts Payable as of December 31, 2018 amounting to

P19.375 million is overstated by P8.039 million or 41.49% due to

the inclusion of claims that were not supported with complete

documentary evidence, thus, overstate the liabilities and the

asset/expense accounts and affects the fair presentation of the

accounts in the financial statements.

Sibuco Qualified Property, Plant and Equipment account in the total amount of

P337.252 million is doubtful due to a) non–conduct of actual

physical count for CY 2018 by the inventory committee and b)

non–preparation of the Report of the Physical Count of Property,

Plant and Equipment (RPCPPE); and,

Non-preparation of monthly bank reconciliation statements which

is necessary to determine the actual balance of agency

bank/treasury account and to detect errors committed by either

the bank or by the municipality and prepare adjustments and

update records.

Sibutad Qualified Property, Plant and Equipment (PPE) accounts with a net carrying book value of P90.711 million as of December 31, 2018 cannot be ascertained due to the (a) failure of inventory committee to complete the annual physical count and reconcile the result of the count with the property and accounting records; (b) non-compliance with the PPSAS on the provision for impairment; and, (c) incomplete documentation relative to the Local Road Networks amounting to P27.730 million.

Sindangan Qualified Failure to transfer the required 75% or P82.676 million of its

registered Public Infrastructure assets to the Property, Plant and

Equipment accounts;

Various unserviceable Properties and Equipments amounting

P19.106 million were not derecognized and/or disposed, thus

exposed to possible loss and further deterioration;

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P10.324 million or 75% of the recorded Accounts Payable as of

December 31, 2018 cannot be relied upon due to the absence of

sufficient documentary evidence to support valid claims, thereby

affecting the fairness of presentation of financial statements; and,

Completed and projects costing P54.090 million were not

appropriately reported thus affected the timely accounting and

recognition of Asset and Government Equity Accounts.

Siocon Qualified Property, Plant and Equipment (PPE) account of the LGU

constitutes more than 75% of the total municipal assets or an

equivalent of P498 million out of the total P658 million cannot be

ascertained due to the presence of un-reconciled balances in its

supporting schedule amounting P57.885 million, the non-conduct

of complete physical count at year-end to ascertain completeness

thereof, and the non-provision of depreciation expenses to all

PPE items and/or class of PPE, overstating the book value of

PPE accounts presented per FS while understating the

depreciation expenses and accumulated depreciation expenses;

Non-recognition of local roads except for those completed in CY

2016 is not in accordance with PPSAS;

Provision of 5% residual value in the computation of Road

Networks resulted to the erroneous computation of depreciation

expenses which understates the depreciation expenses and the

accumulated depreciation expense as of year-end by P.356


Sirawai Qualified Cash and cash items in the financial position at P47.218 million

which include cash in bank under Trust Fund in the amount of

P25.741 million was not reconciled with the bank balance as of

December 31, 2018;

Receivable is overstated; and,

Property, Plant, and Equipment account in the financial position

is understated due to the failure of management to consider the

total cost of the gymnasium which is under a build and transfer

swap with a local company in the total amount of P3.530 million

and incomplete recording of the local road network resulted to its

understatement which is part of the property, plant, and

equipment in the financial position; and the continuing effect of

undetermined amount of its property, plant and equipment in the

financial position due to management continued failure to

complete its conduct of physical inventory.

Tampilisan Qualified Property, Plant and Equipment (PPE) in the amount of P144.338

million cannot be ascertained due to (a) incomplete and

unreconciled Property, Plant and Equipment Ledger Cards

(PPELC) and Property Cards maintained; (b) failure of the

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Inventory Committee to complete the physical inventory-taking;

and, (c) default of the Disposal Committee to undertake

immediate action to dispose of unserviceable properties; and,

Road Networks Account which continually reported a balance of

P5.987 million, inclusive of accumulated depreciation, did not

pertain to 75% of the assets to be restored since no inventory was

made.

Zamboanga del Sur

Qualified Reimbursable Medical Assistance (MA) Program of the Department of Health (DOH), Department of Social Work and Development (DSWD) and Philippine Charity Sweepstakes Office (PCSO) with total amount of P19.731 million;

Unpaid promissory notes (PN) totaling P1,824 million as of December 31, 2018, were not reported and recorded as receivable and revenues in the books due to lack of proper monitoring by the Accounting Section in the ZDS Medical Center (ZDSMC), resulting in the understatement of the receivable and revenue accounts in the consolidated FS by P21.555 million;

Indigency Fund balance of P3.818 million per Subsidiary Ledger (SL) is not reconciled with ZDSMC control sheet records of P2.442 million, resulting in a net difference of P1.376 million, which may cause delay in the recognition of income after services have been rendered and payment of financial assistance in excess of the available balance of the requesting LGU;

No retention money was deducted from the progress payments to contractors totaling P37.732 million, understating Guaranty Deposits Payable by the same amount, and exposing projects to risks that discovered defects during construction period may not be immediately corrected;

Payments for Janitorial and Security Services in the amount of P33.077 million and P23.315 million, respectively, were paid regardless of the actual services rendered and were not properly supported with documents, casting doubt on the validity of payments made, and resulting in excessive expenditures of at least P5.324 million;

Cash Advances except for Confidential Fund (CF) totaling P25.736 million remained unliquidated as at December 31, 2018 affecting the timing of recognition of expenses;

Unreconciled differences of P410.672 million between the General Ledger (GL)/SL balances of Property, Plant and Equipment (PPE) against the Report on the Physical Count of PPE balance affect the reliability of the PPE accounts as at December 31, 2018; and,

Balances of Drugs and Medicines and Medical Supplies are not reconciled with Report on Physical Count of Inventory (RPCI), with a net difference of P3.268 million and balances of drugs and medicines and medical supplies issued to Pharmacy per Report of Materials and Supplies Issued (RMSI) and Pharmacy Dispensing Report differed by P.298 million, affect the reliability and accuracy of the affected accounts as of year-end.

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Cities

Pagadian City Disclaimer Various accounts which have unidentified beginning balances for years totaling P184.143 million could not be ascertained due to lack of vital information in the subsidiary ledgers and schedules;

Long outstanding receivables of P21.725 million remained unsettled for years, and the collectability of which is uncertain, affecting the timing recognition of expenses and other affected accounts;

Cash Advances, Due to Local Government Units and Other Payables accounts totaling P6.287 million have negative balances due to erroneous recording of transactions;

Receivables from the Common Usage, Security and Ancillary (CUSA) services of the City Commercial Center (C3) of P2.970 million were not set-up due to improper monitoring and recording of C3 transactions, exposing funds to loss or wastage; and,

Inadequate records and absence of proper monitoring resulted to a net overstatement of the Loans Payable and the corresponding net understatement of Interest Expense accounts of P392 million; and unrecorded increase in interest expense, which were not considered in the current year’s appropriation.

Zamboanga City Qualified Road Networks and other Infrastructure Assets totaling P2.380 billion and P2.050 billion, respectively, completed in CY 2018 and prior years were not taken up as Property, Plant and Equipment (PPE), thereby understating PPE by the said amounts;

Land account amounting to P472.370 million as of December 31, 2018 cannot be ascertained due to absence of vital details in the Schedule of Lands maintained by the City Accountant’s Office (CAO) and the non-reconciliation of data in the same schedule with those of the records of the City General Services Office (CGSO) and City Assessor’s Office (CAsO);

Land account is understated due to non-inclusion of 2,363 parcels of donated land in the books of the City;

Receipt of donated medical equipment from the Department of Health (DOH) amounting to P1.560 million was not properly documented and were not recognized in the books of accounts as assets thus understating the PPE account;

Items in Transit account in the amount of P5.100 million, which was reclassified as Information and Communication Technology Equipment (ICTE) upon the adoption of PPSAS, cannot be ascertained;

PPE amounting to P29.650 million have remained in the Trust Fund (TF) books for several years and no depreciation was taken up for these, thus overstating PPE with the depreciation on said property;

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Stalls for rent at the Paseo del Mar, Plaza del Pilar and Paseo de Jardin Pasonanca are recorded in the Infrastructure Assets - Parks, Plazas and Monuments account instead of Investment Property – Building account, overstating the former and understating the latter with the value or cost of the stalls;

P2.900 million, or 73% of the total Livestock under the Animal Dispersal Program of the City per physical count conducted in the three Veterinary Services Field Offices (VSFOs) were not properly accounted and reconciled with accounting and inventory records which creates doubts as to the reliability and accuracy of the recorded Biological Asset accounts;

P1.320 million, or 39% of the total Point-of-Sale (POS) Payment System collections of P3.410 million for CY 2018 remained unsettled or uncredited to the Bank account of the City resulting to an overstatement in the reported balances of Cash in Bank – LCCA and an understatement in the Other Receivables account as of December 31, 2018;

Due to Bureau of Internal Revenue (BIR) and Cash in Bank – Local Currency, Current Account (LCCA) balances are understated by P3.830 million due to the non-recording of unremitted Value Added Tax (VAT) and percentage taxes withheld from Government Money Payments (GMP) for August 2018 mainly caused by an error in the processing of the payment made through the Development Bank of the Philippines (DBP) Electronic Payment System (EPS);

Real Property Tax (RPT) Receivable amounting to P194.890

million as of December 31, 2018 cannot be ascertained due to discrepancies between the records of the CAO and City Treasurer’s Office (CTO);

Cash advances for Confidential Funds (CF) granted in CYs 2017 to 2018 totalling P38.500 million remained outstanding despite submission and receipt of liquidation documents, thereby overstating Advances to Special Disbursing Officer (SDO) account by the same amount;

Due from National Government Agencies (NGAs) - Procurement Service of the Department of Budget and Management (PS-DBM) with a balance of P5.100 million as of December 31, 2018 is overstated by P3.980 million due to unrecorded deliveries and unreconciled difference of P1.11 million casts doubt on the reliability of the account;

Accounts Payable and Subsidy to Local Government Units (LGUs) accounts are overstated and Trust Liability – Disaster Risk Reduction and Management (DRRM) account is understated by P86.280 million due to the erroneous recording of the transfer of the unexpended portion of the 2018 Local DRRM Fund of the City;

338


Accounts Payable and Due to BIR are understated by P54.830 million and P3.100 million, respectively as of December 31, 2018 due to the non-recognition of liabilities despite acceptance of some motor vehicles, medicines and properties by the City, and correspondingly understating the related Motor Vehicles, Other PPE and Drugs and Medicines accounts by P51.190 million, P1.600 million and P5.130 million, respectively;

Sub-accounts totalling P6.850 million under the Due to Government Service Insurance System (GSIS) account remained unremitted and non-moving for several years and several sub-accounts totalling P1.15 million under the same account have debit balances which raise doubt as to the validity and accuracy of the reported balances in the FS of the City;

Guaranty Deposits Payable account amounting to P13.720 million cannot be ascertained due to being dormant for more than five years and inclusion of a negative balance of P.010 million; and,

Accounts Payable and Due to LGU accounts with balances of P3.920 million and P4.320 million, respectively, as of December 31, 2018 remained outstanding for more than two years, casting doubt on the validity of the accounts.

Municipalities

Aurora Qualified Cash-LCCA and Cash-Savings Account amounting to P235.663


the non-submission of the monthly Bank Reconciliation

Statements;

Cash in Bank – LCCA in the total amount of P235.663 million as

at December 31 could not relied upon due to non-reconciliation

between subsidiary ledger (book balance) and bank statement

(bank balance);


was not prepared and submitted, hence, validity, existence and

propriety of classification of fixed assets accounts in the amount


Property, Plant and Equipment (PPE) Accounts in the total

amount of P147.789 million was not provided with depreciation

expense;

Accounts payable totalling P31.962 million cannot be fully relied

upon due to unsubstantiated claims;

Fuel, oil, and lubricants inventory and Other Supplies and

Materials Inventory in the amount of P1.970 million and P1.577

million, respectively, as reported in the books cannot be relied

upon as to its existence;

339


Receivable Accounts in the total amount of P6.226 million remain

dormant where settlement or collectability could no longer be

ascertained; and,

Unreconciled balance of the Trust Liabilities-LDRRMF Account in

the amount of P5.657 million resulting to the understatement of

the account.

Bayog Qualified Three current bank accounts totaling P4.663 million which do not

have specific account number and not substantiated with actual

bank records may result to overstatement of Cash in Bank;

Petty Cash and Due to Pag-Ibig accounts showed a negative

balances of P931.55 and P.065 million, respectively;

Cash advances to Officers and Employees amounting to P1.260

million remained unliquidated as of December 31, 2018;

Purchases of drugs and medicines totaling P.521 million were

recorded as outright expense contrary to the Perpetual Inventory

Method required in government accounting, thereby misstating

the balance of Inventory and Government Equity accounts;

Plastic chairs totaling P.320 million accounted for as Furniture

and Fixtures does not fall within the policy prescribed in COA

Circular 2005-002 dated April 14, 2005, thus, resulting in

inappropriate use and overstatement of the account Furniture and

Fixtures;

Depreciation was not provided for some Property, Plant and

Equipment (PPE) booked under General Fund (GF) valued at

P57.071 million and Special Education Fund (SEF) valued at

P.235 million, and some PPE accounts totaling P.852 million were

accounted in an inappropriate accounts thereby affecting the fair

presentation of the accounts in the financial statements.

Dimataling Qualified Failure to disclose in the Notes to the Financial Statements the amount and details of the unexpended balance of LDRRMF, thus, precluding the users of the Financial Statement in verifying and accessing the additional information that is useful in making sound judgment and economic decisions;

Purchases of various supplies and materials totaling P 2.152 million were not coursed through the inventory accounts but rather charged directly to expenses, inconsistent with the applicable provisions of the Manual on New Government Accounting System (NGAS) for Local Government Units (LGUs) and failure to prepare or maintain a complete supplies and materials inventory records, hence, the reported balances of Inventory Accounts and Supplies and Materials Expense Accounts may be held unreliable affecting the fair presentation of the Agency’s Financial Statements for CY 2018;

340


Various deficiencies were noted in the agency’s grant of travelling allowance to its officials and/or employees totaling P.702 million, rendering the transaction doubtful as to the fairness of travelling allowances granted to its officials and employees and affecting the reliability of travelling expenses reflected in the agency’s financial statement; and,

Property, Plant and Equipment (PPE) accounts in the agency’s financial statements as of December 31, 2018 with an aggregate book value amounting to P54.453 million cannot be fully relied upon due to the absence of a complete physical count of PPE and non-preparation and non-maintenance of complete property records, hence, no Report on the Physical Count of Property, Plant and Equipment (RPCPPE) can be submitted and asset reconciliation cannot be conducted.

Dinas Qualified Continuous inaction of management to conduct physical

inventory, submit inventory report and maintain adequate property records for all Property, Plant and Equipment totaling P189.192 million, resulted to the non-reconciliation of the accounting and property records thus existence, condition and valuation of the properties could not be ascertained;

Depreciation Expense on various depreciable properties with a depreciable cost of P44.781 million was not set-up thereby overstating the assets and understating the corresponding expense accounts; and,

Failure to initiate the liquidation of the Due from Officers and Employees and Advances to Officers and Employees totaling to P6.100 million, thus, the recognition of expenses on its appropriate period cannot be made.

Dumalinao Qualified Unreliable Property, Plant and Equipment (PPE) account

amounting to P 152.374 million; and,

Cash advances amounting to P6.402 million remained unliquidated as of year-end.

Dumingag Qualified Cash in Treasury Account amounting to P1.574 million are

doubtful due to the discrepancies of P1.022 million with the Cash Book Balances;

Cash advances totaling P8.412 million remained unliquidated at the end of the year;

Report on the Physical Count of Inventories (RPCI) was not prepared and submitted, hence, existence and valuation of the Inventory Accounts totaling P.651 million could not be ascertained;

Public market, market stalls and market blocks accounted for as Markets held to earn rentals with book value of P55.926 million were classified as Property, Plant and Equipment (PPE) rather than Investment Properties;

341


Report on the Physical Count of Property, Plant and Equipment (RPCPPE) was not prepared and submitted, hence, validity, existence and propriety of classification of fixed assets accounts in the amount of P211.983 million could not be ascertained;

Due to Other Funds and Due from Other Funds are doubtful due to discrepancies of P5.835 million;

Non-current portion of the long-term loans payable totaling P18.507 million, was not properly presented as non-current liability in the Statement of Financial Position since the whole outstanding balance was presented as current liability; and,

Unutilized balances of the CY 2012 Local Disaster Risk Reduction and Management Fund (LDRRMF) appropriation amounting to P1,360 million previously transferred to the Trust Fund Account was not reverted to the General Fund.

Guipos Qualified Due to the Discrepancy between the balances of the reciprocal

accounts Due from Other Funds and Due to Other Funds amounting to (P2.287 million) as of December 31, 2018, thus casting doubt on the accuracy of their balances in the financial statements, and runs counter to the ideals on keeping accurate the accounts of the government.

Josefina Qualified Cash in treasury amounting to P.257 million as reflected in the

financial statements for all funds remained undeposited as of year-end;

Cash advances totaling P3.326 million remained unliquidated at the end of the year;

Market blocks and market stalls and accounted for as Markets held to earn rentals with book value of P26.497 million were classified as Property, Plant and Equipment (PPE) rather than Investment Properties;

Report on the Physical Count of Property, Plant and Equipment (RPCPPE) was not prepared and submitted, hence, existence and propriety of classification of fixed assets accounts in the amount of P127.463 million could not be ascertained; and,

Due to Other Funds and Due from Other Funds are doubtful due to discrepancies of P51.046 million.

Kumalarang Qualified Cash advances to Officers and Employees totaling P2.660 million

remained unliquidated as of December 31, 2018; and,

Property, Plant and Equipment (PPE) of P322.720 million cannot

be ascertained since records of physical inventory were not

reconciled, reports were not properly made and the

corresponding adjustment for losses and other items necessary

to bring its value to the correct amount was not properly.

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Labangan Qualified Cash and cash equivalents amounting to P115.519 million as of

December 31, 2018 cannot be ascertained due to the non-

submission of the monthly Bank Reconciliation Statements;

Advances to Officers and Employees account totaling P9.512

million, remain unliquidated and long outstanding;


was not prepared and submitted hence, validity, existence and



Transfers of funds from one bank account to another or from one

fund to another in the total amount of P50.797 million 25 were

made without the authorization from the Legislative Body;

Amount transferred to Special Trust Fund Account pertaining to

unutilized LDRRM Fund was insufficient by P1.758 million; and,

Continuing appropriation in the total amount of P13.916 million as

reflected in the monthly utilization report could not be ascertained

due to absence of supporting schedules.

Lakewood Qualified The LGU has not prepared the SCBAA and its required disclosure for CY 2018;

Unliquidated cash advances amounting to P10.515 million;

No provision for depreciation was made for some Property, Plant and Equipment (PPE) account totaling P35.008 million;

Unutilized Local Disaster Risk Reduction and Management Fund (LDRRMF) to the General Fund amounting to P1.547 million was accounted as Trust Liability.

Lapuyan Qualified Depreciation Expense was not provided for Property, Plant and Equipment totaling P92.624 million which resulted to the overstatement of the PPE accounts, and overstatement of the surplus and government equity, thereby affecting the fair presentation of the accounts in the financial statements; and,

Trust Liabilities-DRRMF account per audit differs with the amount in the Financial Statement by P.108 million and the amount in the Subsidiary Ledger by P7.733 million.

Mahayag Qualified Advances to Officers and Employees (1030540), Special

Disbursing Officers (SDO) (1030530) and Other Receivables

accounts (10306990) totaling P4.207 million remain unliquidated

and has been long outstanding;

Report on the Physical Count of Inventories (RPCI) was not

prepared and submitted, hence, existence and valuation of the

Drugs and Medicines Inventory account totaling P2.449 million

could not be ascertained;

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Property, Plant and Equipment (PPE) accounts in the financial

statements (FS) as of year-end could not be ascertained due to

non-performance of the physical inventory count, presence of

unreconciled balances between of the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and the

general ledger (GL) amounting to P.277 million and the absence

of complete records or detailed schedules on the components of

the assets classified under the PPE account;

Public market, market stalls and market blocks accounted for as

Markets held to earn rentals with book value of P4.846 million

were classified as Property, Plant and Equipment (PPE) rather

than Investment Properties; and,

Due to and from Other Funds and Due to and from Special

Accounts are doubtful due to discrepancies of P5.141 million and

P.018 million, respectively.

Margosatubig Qualified Depreciation Expenses were not provided for various PPE accounts totaling P26.300 million which resulted to the overstatement of the PPE accounts, understatement of expenses and overstatement of the surplus and government equity;

Due to BIR, Pag-IBIG, PhilHealth and GOCCs accounts showed

a negative balance of P.133 million, P.328 million, P.114 million (TF) and P.122 million (GF); respectively; and,

Payment of prior year’s van rental totaling P.074 million was charged to current year’s appropriation without attaching any authority allowing such payment.

Midsalip Disclaimer “Unreconciled Amount” in the Statements of Bank Reconciliation of the Municipality amounting to P17.592 million affects the correctness of Cash in Bank – Local Currency, Current Account totaling to P184.119 million as of 31 December 2018 and thus the latter could not be sufficiently relied upon.

Property, Plant and Equipment (PPE) accounts totaling P249.807 million remained doubtful due to the incomplete conduct of physical count thereof and the non-depreciation of certain class of properties;

Due from Other Funds and Due to Other Funds were not recorded simultaneously rendering the account balances unreliable;

Budget and Accounting Offices recognized different accounts in the disbursement vouchers and ledger accounts for the same consultancy services expenditures amounting to P1.334 million affecting the fair presentation in the financial statements, on top of not following pertinent provisions of RA 9184;

Several checks were still reported as outstanding despite being dated up to four years ago casting doubt as to the fair presentation of the total balance in the Bank Reconciliation Statements; and,

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Numerous DVs including their supporting documents which were paid in checks for CY 2015 and CY 2016 remained not submitted to the Office of the Auditor, on top of the delayed submission of the CY 2018 accounts precluding review and examination thereof.

Molave Qualified Property, Plant and Equipment (PPE) accounts totalling

P463.533 million remained doubtful due to the incomplete conduct of physical count thereof and the non-depreciation of certain class of properties; and, ‘

Due from Other Funds and Due to Other Funds was not recorded simultaneously rendering the account balances unreliable.

Pitogo Qualified Various mathematical errors and discrepancies were observed in

the Financial Statements resulting to failure of the management

to enhance the degree of confidence of intended users in the

Financial Statement (FS) and forfeit the main purpose of the FS

that is to provide the users with financial information useful in

making sound judgment and economic decisions; and,

Property, Plant and Equipment (PPE) with a carrying value of

P12.826 million were doubtful because of (a) failure to conduct

the physical inventory; (b) failed to update the file of

Acknowledgement Receipts for Equipment (ARE) and subsidiary

ledgers at the accounting office; and, (d) unreconciled property

and accounting records.

Ramon Magsaysay Qualified Incomplete conduct of physical count of the municipality’s Property, Plant and Equipment valued at P195.405 million and the non-depreciation of certain class of properties. This includes the noncompliance with the accounting and reporting procedures on the Local Roads Asset Management System; and,

Due from Other Funds and Due to Other Funds were not recorded simultaneously rendering the account balances unreliable.

San Miguel Qualified Failure to trace the unreconciled amount of P22.200 million as

appearing in the Bank Reconciliation Statement (BRS); and,

Improper recording of Prior Period Adjustment (PPA) of P3.600 million thereby understating the asset/expense account.

San Pablo Qualified Cash in Bank of the General Fund includes reconciling items from

prior years with an aggregate amount of P2.302 million as of year-end that were still not taken-up for corrections or adjustments in the books of accounts;

Cash advances granted to officers and employees amounting to P2.637 million, remained unliquidated as of year-end;

No provision for depreciation was made for PPE totaling P18.282 million;

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Construction in Progress- Infrastructure Assets amounting to P88.279 million and Construction in Progress- Buildings and Other Structures amounting to P4.634 million has not been adjusted for completed projects in the Trust Fund books.

Sominot Qualified Cash and cash equivalents account amounting to P56.713 million

as of December 31, 2018 cannot be ascertained due to the non-

submission of the monthly Bank Reconciliation Statements;

Cash deficit of P5.433 million was incurred as of December 31,

2018;

Misclassification of Advances Accounts in the total amount of

P.600 million

Advances for special purpose/time bound activity in the amount

of P.436 million remain long outstanding;


was not prepared and submitted, hence, validity, existence and





expense; and,

Trust Liabilitities – Disaster Risk Reduction and Management

Fund in the total amount of P7.233 million was not recorded in the

books.

Tabina Qualified • Various funds granted by the National Government Agencies totaling P11.738 million were still in the Due to NGAs account despite its full liquidation and failure to return to the source agency the total unused balance of P.043 million upon completion of the project;

Infrastructure assets, buildings and other structures totaling P45.346 million were still in the Construction in Progress account and were not reclassified to appropriate agency asset account;

Property, Plant and Equipment (PPE) accounts in the agency’s financial statements as of December 31, 2018 with an aggregate book value amounting to P31.863 million cannot be fully relied upon due to the absence of a complete physical count of PPE and non-preparation and non-maintenance of complete property records; and,

Failure to disclose in the Notes to the Financial Statements the amount and details of the unexpended balance of LDRRMF, thus, precluding the users of the Financial Statement in verifying and accessing the additional information that is useful in making sound judgment and economic decisions.

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Tambulig Qualified Lump sum reconciling items in the Statements of Bank Reconciliation of the Municipality, including the incomplete preparation for all accounts, makes the correctness of Cash in Bank – Local Currency, Current Account totaling P102.928 million, as of 31 December 2018 doubtful;

Property, Plant and Equipment (PPE) accounts totaling P166.646 million were not supported with property and ledger cards nor with complete and accurate Inventory Reports hence the reconciliation of both accounting and property records were not possible and includes the noncompliance with the accounting and reporting procedures on the Local Roads Asset Management System;

Real Property Tax (RPT) and Special Education Tax (SET) Receivables were not set up at the beginning of the year putting doubt on the reliability of the accounts as of year-end;

Due from Other Funds and Due to Other Funds were not recorded simultaneously rendering the account balances unreliable;

An accounting entry made for the 2018 Liquidation Report for the CY 2012, 2013 and 2014 Advances for Confidential Fund amounting to P.733 million understated both the Due from Officers and Employees (1-03-06-020) and Accounts Payable (2-01-01-010) accounts; and,

Special Education Fund transactions were not supported with Obligation Requests, apart from the non-preparation of the SCBAA for the fund.

Tigbao Qualified Disbursements totaling P.088 million remained unrecorded in the

books resulting in overstatement of cash and government equity accounts by the same amount;

Cash advances to Officers and Employees amounting to P9.490 million remained unliquidated as of December 31, 2018;

Property, Plant and Equipment of P226.800 million, cannot be ascertained since physical inventory was not conducted, records were not reconciled, reports were not properly made and the corresponding adjustment for losses and other items necessary to bring its value to the correct amount was not properly done as required under existing laws, rules and regulations on supply and property management; and,

Purchases of drugs and medicines totaling P.383 million were recorded as outright expense.

Tukuran Qualified Cash and cash equivalents account amounting to P154.957


the non-submission of the monthly Bank Reconciliation

Statements;

Advances to Officers and Employees account (1030540) totaling

P1.475 million remain unliquidated and long outstanding;

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Receivables totalling P8.529 million cannot be fully relied upon

due to unwarranted claims, failure to reflect the necessary

adjustments, erroneous recording and misclassification of

accounts;

Fuel, oil, and lubricants inventory in the amount of P2.886 million

as reported in the books cannot be relied upon as to its existence;



expense; Report on the Physical Count of Property, Plant and

Equipment was not prepared and submitted hence, validity,

existence and propriety of classification of fixed assets accounts

in the amount of P296.758 million could not be ascertained;

Other Receivables Account (1-03-06-990) in the total amount of

P.290 million remain dormant;

Unsubstantiated Accounts Payable amounting to P8.071 million;

Unsubstantiated adjustment in Other Payable amounting to

P3.072 million; and Due to GSIS in the total amount of P3.835

million remained long outstanding.

Vincenzo A. Sagun Qualified Cash in Bank – LCCA is overstated by P.121 million due to the unrecorded book reconciling items;

Cash in Bank – LCCA is overstated by P.190 million due to unrecorded reconciling items representing checks drawn which were not supported with the required documents;

Payables totaling P1.164 million remained outstanding for more

than two years and were not supported with documentation for

valid claims;

Due to NGAS totaling P.039 million remained in the books for

several years;

Disbursement of supplies for the 35th Araw ng Vincenzo Sagun totaling P.227 million were recorded to Representation Expense although the items purchased could be properly identified and classified to prescribed specific accounts;

Aid to DILG and PNP for the month of March 2018 totaling P.020 million were recorded to Auditing Services instead of Other Professional Services; and,

Municipal Hall worth about P2 million more or less was not booked up resulting to the understatement of the total assets of the Municipality.

348


Zamboanga Sibugay

Qualified Receivables account amounting to P26.760 million remained in the books for more than ten years, affecting the timing of recognition of expenses and other affected accounts;

Inventory and Property, Plant and Equipment (PPE) accounts totaling P63.804 million and P1.146 billion respectively, as of December 31, 2018, could not be established because the amounts are not reconciled with those in the Report on the Physical Count of Inventories and Report on the Physical Count of PPE (RPCPPE), with variances of P56.799 million and P80.170 million, respectively, as of year end and, the RPCPPE for eight PPE accounts with a net book value of P267.506 million have not been submitted;

Partial billings of various infrastructure projects under Trust Funds were not recorded to Construction in Progress (CIP) account, thus understating the CIP-Infrastructure Assets;

Due to National Government Agencies and Trust Liabilities-Disaster Risk Reduction Management Funds by P197.203 million, P195.627 million and P1.576 million, respectively;

Land where the Zamboanga Sibugay Provincial Hospital and other improvements were constructed have not been recorded in the books nor reflected in the RPCPPE;

Procurement of livestock for distribution to beneficiaries totaling P.241 million were erroneously recorded under the Breeding Stock, instead of the Agricultural Produce for Distribution account, overstating the former and understating the latter account by the said amount; and,

Dormant Guaranty/Security Deposits Payable of P1.099 million was erroneously recorded/classified to the Bail Bond Payable account, overstating the latter and understating Guaranty/Security Deposits Payable account by the said amount

Municipalities

Alicia Qualified Non-preparation of Bank Reconciliation Statement for the cash in

bank totalling P68.181 million;

Non-liquidation of Advances to Officers and Employees of P3.856

million, thus, expenses were not recognized in the proper period;

Failure to conduct physical inventory of PPE accounts amounting

to P302.724million and the non-reconciliation of records;

Non-submission/maintenance of subsidiary schedules of

accounts totaling P205.618 million;

Non-reconciliation of Due from Other Funds and Due to Other

Funds of P59.765 million and P71.954 million, respectively; and,

Non-preparation of Statement of Financial Performance for the

Trust Fund.

349


Buug Qualified Property, Plant and Equipment (PPE) amounting to P329.598

million remained doubtful due to the Municipality’s failure to

conduct physical inventory and to reconcile the same against the

property and accounting records;

Depreciation expenses were not provided to various Property,

Plant and Equipment (PPE);

Taxes withheld from suppliers in the Trust Fund (TF) were

transferred to the General Fund (GF) resulting to improper flow

and recording of transactions; and,

Cash advances for the 2018 celebration of the Municipality’s Bog

Festival were improperly recorded.

Diplahan Qualified No inventory taking of PPEs and non-reconciliation of inventory

records;

Disclosures of information in the Notes to Financial Statements

were not adequately presented;

The balances of reciprocal accounts Due from Other Funds and

Due to Other Funds were not reconciled;

Purchase of transportation equipment amounting to P1.044

million was not recognized as assets in the General Fund;

Non recognition of revenue for the amount billed to Philhealth

from the operations of Wilfredo C. Palma Memorial Hospital

(WCPMH); and,

Purchase of inventory items and semi-expendable supplies and

materials was directly debited to expense.

Imelda Qualified Non-moving or dormant “Due to NGA” account amounting to

P10.397 million as of December 31, 2018;

Long overdue loans receivable account amounting to P.239

million remain outstanding in the books of the LGU; and,

Incurrence of losses for two consecutive years of its CHIKEN ATI-ATIHAN a Local Economic Enterprise (LEE).

Ipil Qualified Receivables were not liquidated and monitored resulting to outstanding past due receivables of P9.132 million, or 57% of the balance of receivables accounts as of December 31, 2018, affecting the timing recognition of expenses;

Property, Plant and Equipment (PPE) accounts per General Ledger showed a discrepancy amounting to P32.441 million as against the Report of Physical Count of PPE; Unserviceable, damaged and demolished properties were not disposed of and still carried under the PPE accounts totalingm P32.596 million; and,

350


Uncollected rentals from delinquent stall occupants totaling P4.834 million were not taken up in the books understating receivable and income accounts.

Kabasalan Qualified Advances for Payroll, Advances to Special Disbursing Officer and Advances for Officers & Employees amounting to P.767 million, P.017 million and P9.814 million, respectively, remained unliquidated as of December 31, 2018 affecting the timing recognition of expenses;

Inventories and Property Plant & Equipment amounting to P2.134 million and P203.437 million, respectively, cannot be relied upon due to the failure to prepare the Reports on the Physical Count of Inventories, PPE and Road Network System for the physical count conducted and to conduct the reconciliation of records;

Due from NGAs, Due from LGUs, Due from Officers & Employees and Other Receivables amounting to P.576 million, P18.419million, P6.598 million and P.185 million, respectively remained outstanding from one to 21 years affecting the existence of the accounts; and,

Abnormal balances in Advances for Officers & Employees, Accounts Payable, Due to Other Funds, Guaranty Deposits Payable, Due to NGAs and Due to LGUs with an aggregate amount of P.622 million affected the accuracy of the accounts

Mabuhay Qualified Failure to conduct a periodic physical inventory of supplies or

property and PPE amounting to P241.103 million as of December

31, 2018 and to reconcile the accounting and property records;

Unreconciled reciprocal accounts Due from Other Fund and Due

to Other Funds of P1.716 million and P31.952 million,

respectively as of December 31, 2018 ;

Unidentified balance in the asset and liability accounts totalling

P.249 million and P31.901 million, respectively as of December

31, 2018 ; and,

Abnormal Balance in the Due to Officers and Employees and Due

to NGA accounts in the Trust Fund and WMSU-SHS books

amounting to P.233 million and P.068 million, respectively as of

December 31, 2018.

Malangas Qualified No inventory taking of PPEs and non-reconciliation of inventory

records;

Disclosures of information in the Notes to Financial Statements

were not adequately presented;

Supplies were recorded as outright expense instead of Inventory

or Asset account;

351


Charging of SEF and TF transactions amounting to P4.633 million

against the GF; and,


reconciled.

Naga Qualfied Unreliable balance of Cash in Bank – LCCA amounting to P53.373 million due to continuous delay in the preparation of Bank Reconciliation Statements (BRS), huge amounts of book and bank reconciling items and failure to reconcile SL balances with that of the controlling accounts;

Failure to conduct physical inventory; prepare, update and maintain property cards and ledger cards and non-reconciliation of the accounting records with property custodian records; provide depreciation expense to Other Land Improvements account and non-preparation of comprehensive Lapsing Schedule of Depreciation Expenses; dispose unserviceable and obsolete PPE; and properly classify PPE items resulting to doubtful existence and accuracy of recorded Property, Plant and Equipment (PPE) of P173.536 million which represents 63.80% of the agency’s total assets;

Unreliability and invalidity of the balance of the Construction in Progress account totaling P34.133 million in the General Fund due to non-adjustment of completed projects to appropriate assets accounts and non-maintenance of subsidiary ledgers, particularly, Construction in Progress Ledger Card (CIPLC) on a per project basis;

Unliquidated cash advances and other receivables at year-end amounting to P35.518 million for which P25.229 million or 71.03% has been outstanding for more than three (3) years and unrecoverable aged accounts amounting to P5.358 million from persons responsible who were already terminated from government service or no longer connected with the Municipality; and,

Existence of negative balances in various liability accounts

totaling P1.350 million.

Olutanga Qualfied Failure to conduct a periodic physical inventory of supplies or property and PPE amounting to P111.740 million as of December 31, 2018 and to reconcile the accounting and property records;

Stale Checks amounting to P.117 million were not cancelled;

Unreconciled reciprocal accounts Due from Other Funds and Due to Other Funds of P1.665 million and P1.695 million, respectively; and,

Existence of unidentified balances in the liability accounts totalling P.476 million as of December 31, 2018.

352


Payao Qualfied Existence of accounts in negative balances amounting to P1.302

million;

Non-liquidation of Advances to Officers and Employees of P9.020

million, including outstanding balance of over five (5) years

amounting to P2.184 million and non-moving cash advances for

officers and employees that were already dead, resigned, retired

and separated from the municipality;

Non-reconciliation of Due from Other Funds and Due to Other

Funds of P8.282 million and P7.313 million, respectively or a

variance of P.969 million;

Inclusion in the PPE accounts of items that were already

destroyed/unserviceable and not found in station during the

physical count amounting to P8.398 million and P.559 million,

respectively;

Existence of the balance of the Cash in Local Treasury amounting

to P1.355 million,075.05; and,

Long outstanding Accounts Payable of P1.355 million.

Roseller T. Lim Qualfied Advances for Payroll and Advances for Officers & Employees amounting to P.015 million and P8.170 million, respectively, remained unliquidated as of December 31, 2018 affecting the timing recognition of expenses;

Inventories and Property Plant & Equipment amounting to P.216 million and P75.178 million, respectively cannot be relied upon due to the failure to conduct physical count and reconciliation of records;

Accounts Receivable, Loans Receivable, Due from Officers & Employees and Other Receivables amounting to P.002 million, P2.669 million, P1.166 million and P.755 million, respectively remained outstanding from one to 19 years affecting the existence of the accounts;

Abnormal balances in Due from Other Funds, Due from Officer & Employees, Advances to Contractors, Other Receivables, Accounts Payable, Due to Officers & Employees, Due to GSIS, Due to NGAs, Due to GOCCs, Due to LGUs, Due to Other Funds and Guaranty/Security Deposits Payable with an aggregate amount of P9.464 million affected the accuracy of the accounts;

Reconciling items in the Bank Reconciliation Statements and stale checks amounting to P.930 million and P.101 million, respectively, remained uncorrected or unadjusted in the books of accounts, affecting the accuracy of the Cash in Bank; and,

Due from Other Funds and Due to Other Funds accounts cannot be relied upon due to a discrepancy amounting to P7.106 million.

353


Siay Disclaimer Expenditure items that were capitalized and recorded as PPE

account totaling P11.262 million;

Inclusion of disposed/transferred assets in the PPE costing

P4.450 million;

Misclassification of PPE totaling P29.285 million;

Recognition of road networks totaling P12.700 million with no

specific reference point/location; and,

Unrecorded due to NGAs amounting to P14.348 million.

Talusan Qualfied Failure to conduct a periodic physical count of its Property Plant and Equipment (PPE) amounting to P248.097 million as of December 31, 2018 and to reconcile the accounting and property records;

Presence of dormant reconciling items amounting to P.054 million and P.026 million in the General and Trust Fund books of accounts for many years;

Existence of Other Payables amounting to P.032 million which has been outstanding in the books for more than two years; and,

Unreconciled reciprocal accounts Due from Other Funds and Due to Other Funds of P2.678 million and P.096 million, respectively.

Titay

Qualfied Past due Receivables balance of P33.373 million or 87.64% of the total receivables, affecting the timing recognition of expenses;

PPE accounts per GL also showed a discrepancy amounting to P68.209 million as against the Report of Physical Count of PPE; and,

Discrepancies in the balances of accounts of Real Property Tax (RPT) receivables and Special Education Tax (SET) receivables amounting to P14.908 million and P13.597 million, respectively.

Tungawan Qualfied Advances for Officers & Employees amounting to P3.865 million remained unliquidated as of December 31, 2018 affecting the timing recognition of expenses;

Property Plant & Equipment (PPE) was not reconciled with the Report of Physical Count of PPE (RPCPPE) resulting to a variance of P.655 million affecting the accuracy, completeness and existence of the PPE accounts;

Accounts Receivable and Other Receivables amounting to P.404 million and P2,880.00, respectively remained outstanding from one to five years affecting the existence of the accounts; and,

Abnormal balances in Due to BIR, Due to NGAs, Due to LGUs, Other Payables and Other Deferred Credits with an aggregate amount of P.639 million affected the accuracy of the accounts.

354


Region X – Northern Mindanao

Bukidnon Modified/ Qualfied

Funds transferred to LGUs totaling P672.324 million from

calendar years 2012 to 2017 were not liquidated;

Inventories of P309.604 million are still carried in the books

despite completely distributed;

Non provision of previous and current years’ depreciation for

agency assets aggregating to P983.067 million; and,

Completed projects totaling P193.198 million are still recorded in

the books as Construction in Progress (CIP) and not transferred

to the appropriate asset account.

Cities

Malaybalay City Qualified

Valencia City

Qualified “Due to LGUs” under the general fund of the agency in the

aggregate amount of P16.040 million as of November 2018

included some of the latter’ other operating and service income

thereby, understating the revenue account of the city and

exposed the fund for the payment of expenditures, obligations or

purposes not specifically allowed by law;

Allotted amount for Pre-engineering and Project Monitoring of

the numerous infrastructure projects of the City of Valencia were

obligated without actual expenses incurred and the same were

recorded as payable account with an accumulated amount of

P10.110 million as of November 2018, thus, the accuracy of the

balances of some of the accounts in the General Ledger cannot

be established and may eventually affect the fair presentation of


Partial compliance of last year’s audit findings on the numerous

book reconciling items, some of them were from prior years, still

were not adjusted in the Books of Accounts as of December 2018.

Municipalities

Baungon Qualified Due to non-submission of the Property Inventory Report, the

failure to conduct actual physical count, and the non-

reconciliation of property and accounting records, evaluation on

the reliability of the PPE year-end account balance of P87.773

million (net of accumulated depreciation) could not be confirmed

in audit;

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Construction in Progress Account was over by P8.082 million

compared with project status reports from the Office of the

Municipal Engineer on the on-going and completed projects due

to failure of the Municipal Accounting Office to reclassify those

completed projects to appropriate PPE accounts on the premise

that the former failed to furnish Certificate of Completion to the

latter, thereby casting doubt on the validity of the Construction in

Progress Account.

Inherited variance aggregating to P1.031 million exists between

the Due to Other Funds and Due from Other Funds (Reciprocal

Accounts) accounts of the Consolidated Financial Statements of

LGU Baungon, thereby casting doubt on the reliability of the asset

and liability accounts.

Land account of the Municipality of Baungon amounting to P2.380

million as of December 31, 2018 is understated by P4.193 million

due to various unbooked and undervalued land properties;

Land Properties with book value of P1.050 million were neither

covered by Transfer Certificates of Title (TCT) nor Original

Certificates of Title (OCT) and/or tax declarations under the name

of the Municipality of Baungon, thereby casting doubt on the

validity of the claim of ownership and rights over said properties;

Loans Receivable account of the Municipality of Baungon

totaling P3.080 million were not backed-up with loan agreements

to support recording of receivable account and right to enforce

collections thereby overstating the receivables account for lack

of right to collect.

Reconciling items addition to book balance (Stale Checks,

Interests Income, Credit Memos and other reconciling items)

aggregating to P.809 million and reconciling items deduction to

book balance (Debit Memos, Unrecorded Disbursements, and

other reconciling deduction) aggregating to P.147 million

consistently appearing in their monthly Bank Reconciliation

Statements (BRSs) because the management failed to reflect

those reconciling items in their records resulting to net

understatement P.662 million, thereby understating the cash

account;

Guaranty/Security Deposits Payable has a difference of P.337

million in the Subsidiary and General Ledger Balances, thereby

casting doubt on the accuracy and reliability of the liability

account.

Due to NGAs amounting to P.096 million cannot be attributed to

any national government agencies and is marked ‘unidentified’ in

the subsidiary ledger of the accounting department, thereby

356


casting doubt on the valuation and accuracy of the liability

account; and,

Subsidiary ledger of the Due to LGU account in the Trust Fund

had an unreconciled balance of P.072 million as compared with

the financial statements and general ledger, thereby casting

doubt on the accuracy and correct valuation of the liability

account.

Cabanglasan Qualified Property, plant and equipment (PPE) and inventory accounts as

of December 31, 2018 is doubtful due to (a) Ninety eight and

01/100 percent (98.01%) of recorded inventory and PPE

accounts were not included in the conduct of physical count; (b)

the difference between the physical count of PPE amounting to

P1.050 million against accounting records of P2.922 million

showing a difference of P1.864 million; (c) various supplies and

materials were not recorded in an inventory account; d) delayed

submission of the Report on the Physical Count of Property, plant

and equipment (RPCPPE); and, e) Non-maintenance of complete

Property, plant and equipment ledger card (PPELC)/Supplies

Ledger Card (SLC) and absence of property and stock cards;

Construction in Progress” accounts includes the cost of projects

already completed but not transferred to the appropriate asset

accounts due to inadequate supporting schedules and absence

of a certified report of completion or any sufficient documents

evidencing project completion, thereby rendering the construction

in progress account balances unreliable; and,

Existence of dormant “Other Receivable” account amounting to

P.208 million that were undocumented casts doubts on its

collectability and validity of the reported balance.

Damulog Qualified Property, Plant and Equipment (PPE) account totaling P158.135

million cannot be ascertained due to inappropriate and

incomplete count of the subject assets and the failure of the

Municipal Accountant to reconcile the result of the count with the

accounting records, thereby affecting the fair presentation of the

Financial Statements for CY 2018.

Dangcagan Qualified Completed projects with aggregate book value of P32.617 million

remained to be recorded as Construction in Progress as of

yearend thus corresponding depreciation therein were not

recognized thereby overstating government equity account;

Four (4) completed core local access road projects costing P

13.217 million were not recognized as assets in the books thereby

resulting to understated PPE;

357



Receivable were not recognized thereby understating the RPT

and SEF Receivable accounts amounting to P408.730 million

each, and the corresponding Deferred Income accounts; and,

Expenditures for the construction of various projects undertaken

using the trust fund amounting to P6.330 million were directly

closed from the corresponding liability account and were not

recognized as Construction in Progress, thereby resulting to

understated assets and liability accounts.

Don Carlos Qualified Lump sum appropriations were present in the municipality’s

budget under continuing appropriations for development projects

totalling P14.656 million;

Unreconciled balance of Construction in Progress account

between the Municipality’s General Ledger and its supporting

schedules by a total of P26.091 million as a result of the presence

of lump sum appropriations in the budget of the LGU, hence, the

balance appearing in the financial reports as of December 31,

2018 as P40.671 million under the CIP- Infrastructure Assets

account cannot be ascertained;

Disposal of its unserviceable properties amounting to P4.650

million were not initiated nor reclassified to “Other Assets”

account, which may not be beneficial to the government in terms

of higher appraisal value for the property, lesser storage cost and

better management of limited storage space, thus, creating doubt

on the year-end balance of its Property Plant and Equipment as

stated in the financial statements;

Accrued Interest Payable of an agency’s loan was not recognized

at Year-End which resulted to understatement of the account by

a total of P.984 million, thereby casting doubts as to the reliability

and proper disclosure of their Interest Payable Account as of


Unexpended Local Disaster Risk Reduction and Management

Fund from 2011 to 2013 totalling P2.412 million was not reverted

back to the General Fund.

Impasugong Qualified PPE accounts as of December 31, 2018 is doubtful due to (a) the

material difference between the physical count of PPE amounting

to P103.320 million against accounting records of P132.622

million, showing a difference of P29.301 million and (b) Only fifty

six percent (56%) of the recorded PPE have been included in the

Physical Count conducted;

Inventory accounts amounting to P4.112 million as of December

31, 2018 cannot be ascertained, due to the failure to conduct

358


physical inventory of supplies that will enable the reconciliation of

the accounting records with the actual existence of the inventory

items;

“Construction in Progress” accounts includes the cost of projects

amounting to P107.970 million already completed but not

transferred to the appropriate asset accounts due to absence of

a certified report of completion or any sufficient documents


in progress account balances unreliable;

Completeness of the recorded Property, Plant and Equipment –

Land account were doubtful due to the discrepancies between the

records kept by the Municipal Accounting and the records of the

Municipal Assessor, thereby affecting the reliability of the land

account that was presented in the financial statements; and,

Loans availed by the LGU from National Housing Authority (NHA)

with a total amount of P3.136 million and an outstanding balance

of P2.195 million were not recorded in the Loans Payable account

of LGU Impasugong, resulting in the understatement of Loans

Payable – Domestic account, Land, and Receivable accounts.

Kadingilan Unqualified

Kalilangan Qualified The agency failed to submit its financial reports, accounts and

pertinent supporting documents within the prescribed period,

thereby causing undue delay in the examination and audit of

financial transactions;

Receivable accounts at year end amounting to P5.884 million

cannot be determined because of unliquidated/unsettled special

cash advance for confidential expenses and cash advances for

travelling expenses, amounting to P0.900 million and P0.263


Dormant or long outstanding and/or unidentified receivables

aging more than ten (10) years amounting to P4.721 million, thus

overstating the Receivable accounts and understating the

Government Equity account in the Statement of Financial

Position as at year end;

Property, Plant and Equipment (PPE) accounts, net of

accumulated depreciation, aggregating to P262.968 million or

54.69% of the total assets as at December 31, 2018 cannot be

ascertained due to: a) failure to conduct a physical count of all

PPE assets owned by the Municipality and reconcile them in the

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accounting records; b) non–maintenance of complete Property

Acknowledgment Receipts and Property Cards per category of

PPE by the General Services Office; and, c) failure to adopt

uniform procedures, systematic and timely disposal of

unserviceable properties with undetermined value, so as to

generate greater benefits to the government in terms of higher

appraisal value for the property, lesser storage cost and better

management of limited storage space; and,

Accounts Payable and Other Payables amounting to P44.083

million and P6.179 million respectively, were doubtful due to non-

submission of aging of payables as support to annual financial

statement and the existence of long outstanding obligation for

over 2 years amounting to P13.054 million which no claim has

been filed as of December 31, 2018, were not reverted to the

unappropriated surplus.

Kibawe Qualified Inventories, Property, Plant and Equipment (PPE), and Biological

Assets with a total net book value of P246.041 million could not

be verified due to the absence of the Report of the Physical Count

of Inventories (RPCI) and Report on the Physical Inventory Count

of Property, Plant and Equipment (RPCPPE) as required to be

submitted.

Failure to establish the Real Property Tax and Special Education

Tax Receivable and Deferred Real Property Tax/Special

Education Tax Income every beginning of the year, thus,

understating the financial statements of the Municipality; and,

Failure to disclose in the Notes to Financial Statements the

liquidation of the amount of P10.000 million to the Provincial

Government of Bukidnon, a deviation to the guidelines set forth

by the Philippine Public Sector Auditing Standards, thus, affecting

the fair presentation of its financial statement.

Kitaotao Qualified Cash in Bank accounts recorded in the Subsidiary Ledger in the

total amount of P2.927 million as of December 31, 2017, could

not be validated because the concerned depository banks did not

provide copies of bank statements to the agency informing the

latter as to the agency account standing, which greatly affects

proper management of the municipality cash in bank accounts.;

Lands in the total amount of P3.107 million could not be

ascertained due to the absence of supporting documents to prove

that such lands were really existing and were owned by the

Municipal Government of Kitaotao, Bukidnon;

Disposal of its unserviceable properties amounting to P22.975

million were not initiated nor reclassified to “Other Assets”

360


account, which may not be beneficial to the government in terms

of higher appraisal value for the property, lesser storage cost and

better management of limited storage space, thus, creating doubt

on the year-end balance of its Property Plant and Equipment as

stated in the financial statements; and,

Loans Payable amounting to P3.249 million in the subsidiary

ledger is higher by P.649 million with the creditor’s records and

Accrued Interest Payable of an agency’s loan was not recognized

at Year-End which resulted to understatement of the account by

a total of P.128 million thereby casting doubts as to the reliability

and proper disclosure of their Loans and Interest Payable as of

December 31, 2018.

Lantapan Qualified Property and Equipment accounts and Inventories totaling


established due to the failure of the LGU to conduct physical

inventory and update the required ledger and property cards;

“Construction in Progress” account on December 31, 2018

includes the cost of projects amounting to P31.921 million already

completed during CY 2018 but not transferred to the appropriate

asset accounts due to lack of any sufficient documents


in progress account balances unreliable; and,

A difference of P14.596 million exists between the reciprocal

accounts Due from and Due to Other Funds.

Libona Qualified Long overdue/dormant receivable accounts as part of the LGUs

Current Assets, consisting of Loans Receivable and Due from

NGOs and POs amounting to P.892 million and P4.828 million,

respectively, is not in conformity with the standards thereby

affecting the fair presentation of the Statement of Financial

Position as of December 31, 2018;

Subsidiary Ledgers for the Receivable accounts totaling P3.411

million were not maintained and updated, hence, verification and

validation on the existence of the receivables cannot be made,

thereby affecting the accuracy, reliability and validity of the

amounts reported in the financial statements as of December 31,

2018;

Inventory accounts amounting to P6.931 million as of December

31, 2018 cannot be ascertained, due to the failure to conduct

physical inventory of supplies or property that will enable the

reconciliation of the accounting records with the actual existence

of the inventory items; and,

361


Property, Plant and Equipment (PPE) accounts with a total net

book value of P306.002 million could not be ascertained due to

the non- submission of the Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) as of December 31,

2018 thereby failing to prove the existence and accuracy of the

reported balance in the Statement of Financial Position.

Malitbog Qualified Cash in Bank accounts of the Trust Fund totaling P53.148 million

or 32.58% of the year-end balance of Cash and Cash Equivalents

account recorded in the consolidated Financial Statements

cannot be ascertained due to Management’s failure to conduct

Monthly Bank Reconciliation;

The year-end Bank Reconciliation Statements for General Fund

(GF) and Local Development Fund (LDF) consistently showing

reconciling items consisted of Stale Checks aggregating to P.754

million and Deposits in Transit totalling P.086 million because

management overlooked to institute action appropriate thereof,

thus, casting doubt on the validity and reliability of the cash in

bank accounts;

Subsidiary ledgers were not maintained by the Accounting

Department to substantiate Assets accounts totaling to P661.037

million and Liabilities accounts totaling to P290.147 million,

thereby casting doubt on the reliability and validity of financial

records;

Depreciable Property, Plant and Equipment (PPE) totalling

P186.947 million were not subjected with periodic recognition of

depreciation, thereby overstating assets and net income

accounts;

Cash advances aggregating to P.844 million remain outstanding

in the accounting records as of December 31, 2018, thereby not

only exposing government funds to risks and understating the

expense account.

Book variance aggregating to P.418 million exists between the

Due to Other Funds and Due from Other Funds accounts (a

reciprocal accounts) in the Consolidated Financial Statements of

LGU Malitbog, thereby casting doubt on the reliability of the asset

and liability accounts. The Real Property Tax Receivable and the

Deferred Real Property Tax accounts were both overstated by

P.702 million due to erroneous accounting entries, thereby

casting doubt on the reliability and validity of the accounts

balances presented in Agency’s year-end financial statements;

Failure to set up Special Education Tax Receivable at the

beginning of year (January 2018) thereby understating the

receivable asset account by P1.194 million;

362


Biological Assets - Breeding Stocks Account of P.325 million

defers with the total value of P.182 million recorded in the Report

on Physical Count of Breeding Stocks, thereby resulting in a

variance of P.143 million which casts doubt on the existence of

the biological assets and validity of the reported year-end account

balance;

Land account is understated by P.942 million due to various

unbooked and undervalued land properties;

Land with book value of P.400 million was erroneously recorded

as Investment Property thereby casting doubt on the proper

classification of property, plant and equipment;

Land Properties costing P8.926 million were not covered by

Transfer Certificates of Title (TCT) or Original Certificates of Title

(OCT) nor any tax declarations for some land properties under

the name of the Municipality of Malitbog, thereby ownership of

those land properties were not established and,

Two (2) completed Philippine Rural Development Projects

amounting to P81.577 million remained in the Construction in

Progress account as of year-end in spite of the certificate of

turnover of the Department of Agriculture.

Manolo Fortich Qualified Failure to recognize in its appropriate Property, Plant and

Equipment (PPE) accounts the cost of the completed projects in

the Trust Fund aggregating to P35.605 million. Correspondingly,

the balances of these completed projects totaling P33.321 million

in the Due to NGA and Due to LGU accounts remained

unadjusted despite liquidations made to the Source Agencies;

Loan Payable account balance as of December 31, 2018

amounting to P87.649 million was not fairly presented in the

Statement of Financial Position due to advance recording of the

unreleased portion of the loan from Landbank of the Philippines

amounting to P11.312 million; PRDP Subprojects amounting to

P17.180 million was erroneously recorded as Due from Other

Funds in the General Fund (GF) books and Due to Other Funds

in the Trust Fund (TF) books instead of “Transfers for Project

Equity Share/LGU Counterpart” and “Trust Liabilities” accounts in

the books of GF and TF respectively, thus, rendering the

accuracy and reliability of reported balances in the accounting

books doubtful; and,

Various accounts appearing in the Statement of Financial

Position as of December 31, 2018 were not accurately presented

due to the failure to effect adjustments of the completed PRDP

Subproject for the Rehabilitation and Concreting of Aurora- Sto.

Nino FMR amounting to P30.875 million, thereby affecting the

363


fairness of the presentation of the financial statements. Food

supplies intended for the 6th round of DSWD Supplemental

Feeding Program already consumed and fed to day care pupils

remained as inventories in the general ledger under Food

Supplies for Distribution account as of December 31, 2018, thus

overstating the inventory account and government equity by

P3.027 million affecting the fair presentation of the financial

statements and proof of distribution to the end users (Day Care

Workers) were not made part of the supporting documents for the

reversal of the inventory account, rendering the reversal entry

inadequately supported.

Maramag Qualfied Failure to record previous years Real Property Tax Receivable

and Deferred Real Property Tax Income, thus, understating the

financial statements of the Municipality by more or less P30.710

million;

Failure to recorded P9.248 million in its Other Receivables

Account in connection to the Housing Project of LGU Maramag;

Failure to properly present as Non-Current Liabilities – Financial

Liabilities, the non-current portion of its long-term debt secured

from lending banks/agencies amounting to P79.074 million.

Pangantucan Qualified Receivable accounts at year end amounting to P50.148 Million

cannot be determined because of P0.8 Million

unliquidated/unsettled special cash advance, P16.304 Million

dormant or long outstanding fund transfers and other receivables

aging one (1) year to more than ten (10) years, and P33.044

Million intra-agency receivables not eliminated in full in the

consolidated financial statements, contrary to COA Circular Nos.

97-002 and 2016-005, Presidential Decree No. 1445 and PPSAS

Manual, thus overstating the Receivable accounts and

understating the Government Equity account in the Statement of

Financial Position as at year end; and,

Accounts Payable, Due to Officers and Employees, Due to LGUs

and Other Payables accounts amounting to P.112 million, P2.044

million, P22.339 million and P18.749 million, respectively, were

doubtful due to failure to present documents to prove the

existence of obligations.

Quezon

Qualified Cash in Bank account balances as of December 31, 2018 is

overstated by P25.632 million due to improper/erroneous

recording of reconciling items and improper use of cash account,

rendering the accuracy and presentation of the Cash in Bank

account balance as of December 31, 2018 amounting to

P165.848 million unreliable;

364


Collections in CY2018 amounting to P4.023 million were not

reported on the period they were actually collected, due to failure

to closely monitor the collections and remittances and failure to

enforce the submission of the collectors’ individual Report of

Accountability for Accountable Forms, thereby understating the

Cash, Revenue and Liability accounts presented in the financial

statements as of December 31, 2018;




ascertained due to: a) failure to reconcile the difference of

P230.682 million between Report of Physical Count of PPE

(RPCPPE) and accounting records; b) failure to dispose and drop

from records unserviceable properties totaling P15.464 million; c)

failure to establish good supply and property management

procedures resulting to accumulated missing properties of

P13.777 million; and d) failure to reclassify the subsidiary ledgers

(SL) initially recorded as “unreconciled beginning balances” to

appropriate SL accounts amounting to P120.812 million, thus

affecting the fair presentation of PPE, Government Equity and

Depreciation Expenses accounts reflected in the financial

statements as at year end;

Liability accounts with an aggregate balance of P108.574 million

as of year-end could not be ascertained due to failure to present

documents to prove the existence of obligations and absence of

detailed schedule of individual subsidiary ledger and aging of

payables as support to annual financial statements;


cannot be determined because of P0.808 million

unliquidated/unsettled cash advances aging three (3) months to

more than 10 years, P4.967 million dormant or long outstanding

fund transfers and other receivables aging nine (9) months to

more than 10 years, P1.120 million unidentified and/or

unreconciled beginning balances occurring from prior years and

P0.120 million intra-agency receivables not eliminated in full in

the consolidated financial statements, thus overstating the

Receivable accounts and understating the Government Equity

account in the Statement of Financial Position.

San Fernando Qualified Other Receivables as of December 31, 2018 remained to be

unaccounted, thus casting doubt on the validity and existence of

the reported balance;

Accounts Payable representing the liabilities of LGU to various

suppliers and employees in the aggregate amount of P9.219

million could not be established due to the absence of sufficient

365


supporting documents to evidence the actual incurrence of

obligations;and,

Failure to submit disbursements vouchers and payroll reports with

a total amount of P5.706 million, including various journal entry

vouchers, covering the period January to December 2018 .

Sumilao Qualfied Cash in Bank account balances as of December 31, 2018 is

overstated by P25.632 million due to improper/erroneous

recording of reconciling items and improper use of cash account,

rendering the accuracy and presentation of the Cash in Bank

account balance as of December 31, 2018 amounting to

P165.848 million unreliable;

Collections in CY2018 amounting to P4.023 million were not

reported on the period they were actually collected, due to failure

to closely monitor the collections and remittances and failure to

enforce the submission of the collectors’ individual Report of

Accountability for Accountable Forms, contrary to NGAS Manual

and Local Treasury Operations Manual, thereby understating the

Cash, Revenue and Liability accounts presented in the financial

statements as of December 31, 2018;




ascertained due to: a) failure to reconcile the difference of

P230.682 million between Report of Physical Count of PPE

(RPCPPE) and accounting records; b) failure to dispose and drop

from records unserviceable properties totaling P15.464 million; c)

failure to establish good supply and property management

procedures resulting to accumulated missing properties of

P13.777 million; and d) failure to reclassify the subsidiary ledgers

(SL) initially recorded as “unreconciled beginning balances” to

appropriate SL accounts amounting to P120.812 million, thus

affecting the fair presentation of PPE, Government Equity and

Depreciation Expenses accounts reflected in the financial

statements as at year end;

Liability accounts with an aggregate balance of P108.574 million

as of year-end could not be ascertained due to failure to present

documents to prove the existence of obligations and absence of

detailed schedule of individual subsidiary ledger and aging of

payables as support to annual financial statements; and,


cannot be determined because of P0.808 million

unliquidated/unsettled cash advances aging three (3) months to

more than 10 years, P4.967 million dormant or long outstanding

fund transfers and other receivables aging nine (9) months to

366


more than 10 years, P1.12 million unidentified and/or

unreconciled beginning balances occurring from prior years and

P0.12 million intra-agency receivables not eliminated in full in the

consolidated financial statements.

Talakag

Qualified

Non-submission of the Property Inventory Report, the failure to

conduct actual physical count, and the non-reconciliation of

property and accounting records, evaluation on the reliability of

the PPE year-end account balance of P194.229 million (net of

accumulated depreciation) could not be confirmed in audit,

Assumed ownership on various municipally initiated and finance

barangay facilities aggregating to P 6.624 million and recorded

the same as among the component cost of its Office Building

Account though custodial responsibility and control of economic

benefit of such facilities were with barangay units being the end-

user, thus potentially overstating its PPE account;

Receivables totaling P1.125 million were from deceased

and/separated employees and job orders of the Municipality;

Other Payables totaling P1.193 million lacks any contract or

agreement or any proof supporting the burden to pay and

recognize the liability on hand.;

Variance of P.554 million between the Due to Other Funds and

Due from Other Funds (Reciprocal Accounts) since the adoption

Electronic -National government Accounting System (e-NGAS)

remained existing in the year-end (as of December 31, 2018)

financial statements of LGU Talakag, thereby casting doubt on

the reliability of asset and liability accounts.

Erroneous recording in the books of accounts under account

“Work/Zoo Animals and Breeding Stocks Assets” the amount of

P.534 million as the cost of farm animals received from the

Department of Agriculture for dispersal thru the Municipal

Agriculture Office to qualified beneficiaries within municipal

jurisdiction, thereby casting doubt on the reliability of the recorded

asset account; and,

SEA K receivables totaling P.989 million under the Due from

NGOs/POs account for livelihood projects granted as loan to

qualified individual were not supported with any contract or

agreement to establish validity of receivable and rights to

collection thereof.

367


Camiguin Qualified Non-reconciliation of General Ledger (GL) with bank statements

and cashbook maintained by the Provincial Treasurer casts doubt

on the validity and reliability of the consolidated balance of Cash

in Bank (CIB) account of P213.522 million;

Due from NGAs, Due from GOCCs, Due from LGUs, and Due

from NGOs/POs accounts under the GENERAL FUND totaling

P7.420 million as of December 31, 2018 remained uncollected,

long outstanding and non-moving;

Road Network account as at year-end under the General Fund

totaling P218.604 million, could not be ascertained due to the

failure of the Provincial Government to keep and maintain a Local

Road Inventory and Road Map, and a Report on the Physical

Count of the Road Network System, and reconcile the same with

the Registry of Public Infrastructures;

Due to NGAs account amounting to P125.829 million as of

December 31, 2018 included non-moving and long outstanding

accounts totaling P22.697 million; and,

Bail Bonds Payable account, totaling P1.386 million as of August

31, 2018, was erroneously recorded and included under the

Guaranty Deposits Payable account during the conversion of

account balances in view of the implementation of the enhanced

eNGAS/eBudget Version 2.0.

Municipalities

Catarman Unqualified

Mambajao Qualified Non-preparation of property cards and failure to conduct an

annual physical inventory count, rendered the year-end balance

of the Property, Plant and Equipment account totaling P178.611

million unreliable;

Cash in Bank accounts amounting to P75.902 million is doubtful

due to unreconciled amount of P6.047 million as a result of non-

reconciliation of the General Ledger maintained by the Municipal

Accountant with the Cashbook maintained by the Municipal

Treasurer;

Advances for Operating Expenses, Advances for Payroll,

Advances to Special Disbursement Officers and Advances to

Officers and Employees accounts with an aggregate balance of

P.545 million is not supported by Subsidiary Ledger due to non-

preparation of the same, thus considered doubtful.

368


Due from Other Funds and Due to Other Funds, for all funds in

the amount of P1.241 million and P1.421 million, respectively,

showed a total difference of P.180million due to unadjusted

reconciling items, thereby casting doubts on the correctness of

balances of said accounts.

Guinsiliban Qualified Non-recognition of depreciation expense as observed in the

previous audit year on depreciable assets with an updated

accumulated amount of P20.685 million and the recognition of the

Land Asset Account totaling P1.049 million in books even when

such lands are bereft of TCTs and/or OCTs resulting to

unreliability of the Asset account and overstating the Net Income

and Government Equity.

Mahinog Unqualified

Sagay Qualified Asset accounts totaling P112.087 million are doubtful due to

properties still recorded under Construction in Progress in the

amount of P29.996 million, thereby understating the proper

Property, Plant and Equipment Account, the corresponding

depreciation expense and overstatement of the Net Income; and,

Unreconciled Road Network in the amount of P10.488 million and

unverified Work/Zoo Animals amounting to P.330 million renders

the asset balances unreliable.

Lanao del Norte Qualfied Drugs and Medicines Inventory and Medical, Dental and

Laboratory Supplies Inventory accounts totaling P97.322 million

are unreliable;

Deficiencies noted in Advances for Operating Expenses and

Advances to Officers and Employees accounts totaling P19.168

million resulted to misstatement of asset and expense accounts;

Accounts Payable account to Prior Years Adjustment account

amounting to P169.767 million without supporting

documentations resulted to its unreliability; and,

Non-recording of collections of receipts in the Sales Revenue

Account or Other Business Income Account understated the said

accounts by the aggregate amount of P1.456 million.

City

Iligan City Qualified Due to the effects of the noted deficiencies on the unreconciled

balances of Property, Plant and Equipment with a difference

amounting to P324.351 million between the books and inventory

reports,

369


Unliquidated cash advances and Due from NGOs/POs


Uncollected outstanding loans receivables amounting to P7.051

million.

Municipalities

Bacolod Qualified Due to unreliability of Property, Plant and Equipment account

amounting to P87.662 million attributable to failure to conduct

complete physical inventory and absence of Report on the


non-reconciliation of records.

Baloi Qualified Financial Statements are not free of material misstatement/s and

were not prepared in accordance with applicable laws, rules and

regulations and not in conformity with generally accepted state

accounting principles because the agency failed to submit the

bank reconciliation statement on time, failed to conduct physical

inventory of government properties, and other deficiencies noted

in the audit.

Baroy Qualified Cash in Bank in the books of accounts of P41.605 million are

unreliable due the non-submission of Bank Reconciliation

Statements for depository accounts together with its supporting

documents.

Kapatagan

Qualified


of December 31, 2018 due to the failure of the management to

strictly enforce the existing rules and regulations on the grant,

utilization, and liquidation of cash advances and negative

balances due to over-collection/deduction of refund of cash

advances amounting to P.027 million were reported as part of the

‘Advances to Officers and Employees’ account, thereby

understating the said asset account;

Adjusting entries pertaining to book reconciling items amounting

to P.302 million of total debits and P2.734 million of total credits

were not recognized in the books, hence, affecting the accuracy

and reliability of the Cash in Bank balance due to reporting of

unadjusted book balances and misstatement of affected

accounts;

Forty-five (45) checks amounting to P.294 million were already

over six (6) months from the date of issue, thus, already

considered stale checks as of December 31, 2018;

370


Property, Plant and Equipment (PPE) account amounting to

P405.021 million did not reconcile with the balance per Report of

Physical Count of PPE (RPCPPE) amounting to P11.039 million

or a difference of P390.104 million due to the failure of the

Accounting and Property (GSO) Units to regularly reconcile their

records, and the failure to include other PPE accounts in the

annual physical count.

Kauswagan Qualified Property, Plant and Equipment account balance of P217.70


the unreconciled accounting records;

Government properties worth P217.270 million are exposed to

risks due to non-compliance with “Property Insurance Law” or

Republic Act No. 6556 dated September 1, 1951 as amended by

PD No. 245 dated July 13, 1973;

Delayed submission of the Bank Reconciliation Statements of the

Municipality on a monthly basis as required under item 3.2 of

COA Circular No. 96-011 dated October 2, 1996, thus creating

doubts as to the accuracy of the balances of the Cash in Bank

Accounts reported in the financial statements amounting to

P37M;

Cash advances of P6.578 million were not liquidated within the

prescribed period, in violation of COA Circular No. 97-002 dated

February 10, 1997 and Section 89 of PD 1445 thus, overstated

the asset accounts and understated the expense account;

Copies of contracts totaling to P19.313 million were delayed

submitted contrary to COA Circular No. 2009-001 dated February

12, 2009, causing undue delay in the post audit of transactions;

Lot where the three PAMANA infrastructure projects were

constructed is a privately-owned property;

Disbursements of P1.910 million from the DA-Fund were utilized

without supporting accomplishment reports; and,

Payments under contract of services / job orders were without

proper documentation as to urgently needed in various programs

and projects resulting to incurring an additional cost of P15.764

million contrary to Section 4((f) of P.D. 1445.

Kolambugan Qualified Accuracy and correctness of cash in bank account amounting to

P116 Million cannot be ascertained due to delay in the

submission of Bank Reconciliation Statements in violation of Sec.

74 0 of PD 1445 and COA Cir. No.92-125A dated March 4,

1992.

371



P177.113 million cannot be ascertained due to failure of agency

to conduct physical inventory in violation of Section 2 of P.D. 1445

thereby affecting the reliability of the account;

Loan Receivable account amounting to P.303 million have been

outstanding for more than five years in the books contrary to

Section 111 of P.D. 1445 and COA Circular 2016-005, thus,

resulting to unreliable reporting of financial statements; and,

Due to NGAS account amounting to P27.074 million representing

fund transfers from different National Government Agencies

(NGA’s) is misstated due to various lapses including an

erroneous entry amounting to P1.426 million which is contrary to

Section 111 of P.D. 1445,thereby, resulting to unreliable financial

statements.

Lala Qualified Inventories and Investment Property and Property Plant and

Equipment account valued at P372.029 million remained

unverified due to absence of Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) and failure to conduct

complete physical inventory.

Linamon Qualified Property, Plant and Equipment (PPE) account balances are

carried in the statement of financial position at P74.762 million is

unreliable due to failure to undertake reconciliation between

accounting and property records;

Cash in bank balance in the total amount of P49.492 million as of

December 31, 2018 was unreliable since bank reconciliation

statements for its nine (9) bank accounts were not submitted to

the Audit Team within the prescribed period.

Magsaysay Qualified Accuracy and correctness of cash in bank account amounting to

P10.824 million cannot be ascertained due to non-submission of

eleven out of fourteen Bank Reconciliation Statements ,hence, a

violation of Sec. 74 PD 1445 affecting the presentation of the

financial position of the agency;

Unliquidated cash advances amounting to P1.246 million,

multiple cash advances and other deficiencies in granting and

liquidation of cash advances is contrary to COA Circular No. 97-

002, thus, there could be risk of possible misuse or

misappropriation of funds and misstatement of the affected

accounts in the financial statements; and,


P20.981 million is unreliable due to continued failure of agency to

conduct physical inventory, maintain property ledger cards and

property cards contrary to Section 2 of P.D. 1445 thereby

affecting the reliability and accuracy of the financial statements.

372


Maigo Qualified Due to undeposited collections from Maigo Water Utilities of

P3.601 million and unreported collections of P.767million;

Unliquidated cash advances of P5.226 million; and,

Absence of Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) valued at P99.236 million.

Matungao Qualified Property, Plant and Equipment account balance of P58 million as

of December 31, 2018 cannot be ascertained due to the failure of

the auditee to conduct periodic physical inventory taking;

Cash in bank account in the total amount of P25.441 million

cannot be ascertained due to non-preparation of Bank

Reconciliation Statement for all the funds;

Failure to establish collectible Real Property Tax and Special

Education Fund for the CY 2016 - 2018 due to the failure of the

management to develop a comprehensive program to intensify

tax collection;

Disbursement Vouchers and its supporting documents of all

general fund, trust fund and special education fund covering the

period January to December 2018 were not submitted within the

prescribed period,

Copies of contracts totaling to P50.999 million were not

submitted; and,

Shares from National Wealth in the amount of P.862 million was

disbursed without adhering to the guidelines prescribed under

Section 2.4 of DILG-DOE Circular No. 98-01.

Munai Qualified Due to unreliability of the cash in bank accounts amounting to

P2.715 million due to non-submission of bank reconciliation

statements; and,

Property, Plant and Equipment valued at P77.111 million is

unreliable due to absence of Report on the Physical Count of



Nunungan Qualified Cash in Bank- Local Currency Account amounting to P62.773

million could not be validated due to failure to submit the Bank

Reconciliation Statements and its supporting documents; and,

Property Plant and Equipment account in the amount of

P180.969 million which could not be ascertained due to failure to

conduct complete physical inventory, non-submission of the

RPCPPE and non-maintenance of property ledger cards.

373


Pantao Ragat Qualified The municipality failed to submit bank reconciliation statements,

municipality expenditures’ were paid out of the cash advance,

failed to conduct physical inventory of government properties,

and deficiencies noted in the audit.

Pantar Qualified Municipality’s expenditures amounting to P75.850 million were

paid out of the cash advance of the Disbursing Officer; and,

Property, Plant and Equipment account balance of P2.522 million

as of December 31, 2018 cannot be ascertained due to the failure

of the auditee to conduct periodic physical inventory taking; and

Due from Officers and Employees account amounting to P.738

million was the accountability of the former Municipal Treasurer

who died last January 1998 and had been written off without

proper authority, thus misrepresenting the cash, receivable and

operating expense accounts;

Failure to deposit her collections intact or at least once a week or

as soon as the collections reach P10,000.00 due to risk to travel

to depository bank;




prescribed period;

Bank Reconciliation Statement for trust funds were not prepared

because bank statements were sent thru post-office

arrangement, thus, the accuracy of the Cash in Bank balance for

the trust account amounting to P.055 million cannot be

ascertained;




tax collection and the vacancy of the position for Municipal

Assessor; and,

Non-maintenance of Subsidiary Ledgers (SL) for inventory

accounts.

Poona Piagapo Qualified Property, Plant and Equipment account balance of P186 million

as of December 31, 2018 cannot be ascertained due to the failure

of the auditee to conduct periodic physical inventory taking;

Municipality’s expenditures amounting to P75.850 million were

paid out of the cash advance of the Disbursing Officer designate,

due to unstable political crisis in the Municipality, in violation to

provisions of COA Circular No. 97-002.

374


Delay in the remittances of collections of the Municipal Treasurer

for almost ten (10) month;




prescribed period, contrary to Section 122 of P.D. 1445 and COA

Circular No. 95-006, thus, preventing the conduct of timely audit

and prejudices the interest of the Local Government Unit and

defeated the purpose of providing important financial information

to the users of the financial statements. The management failed

to receive the Land Bank of the Philippines (LBP) bank

statements due to post-office arrangement, thus,

Cash in bank account for the trust fund accounts cannot be

ascertained due to non-preparation of Bank Reconciliation.




tax collection and the vacancy of the position for Municipal

Assessor; and,

Non-maintenance of Subsidiary Ledgers (SL) for inventory

accounts.

Salvador Qualified Inventories and Investment Property and Property Plant and





Sapad Qualified Cash in Bank accounts amounting to P18.282 million as of

December 31, 2018 is unreliable as to the fairness of the

presentation of the financial statementsdue to unable to prepare

and submit monthly bank reconciliation; and,

Inventories and Investment Property and Property Plant and





Sultan Naga Dimaporo

Qualified Cash in Bank-Local Currency in the amount of P42.028 million

791 for CY 2018 cannot be verified and ascertained due to the

failure of the Municipal Accountant Designate to prepare and

submit the Bank Reconciliation Statements for CY 2018;

Property, Plant and Equipment account balance in the amount

P66.596 million for CY 2018 cannot be ascertained due to the

375


failure of the General Servicer Officer to conduct periodic physical

inventory taking for CY 2018 and maintain updated records on

inventory and property; and,

Cost of construction of several infrastructure projects in the total

amount of P49.104 million funded from National Government

Agencies were recorded as expenses.

Tagoloan Qualified Cash in Bank cannot be ascertained and verified failure of the

Municipality to prepare and submit monthly Bank Reconciliation

Statements; and,

Unable to submit the reports of their transactions such as

Disbursement Vouchers; Report of Collections and Deposits;

Report of Disbursements; Report of Checks Issued; Report of

Accountability of Accountable Forms; Report on Physical Count

of Property, Plant, and Equipment; Report on Physical Count on

Inventories; Monthly Trial Balances; and Quarterly Financial

Statements;

Failure of the Municipality to submit Journal Entry Vouchers in the

disbursements, thus, reliability, accuracy, and completeness of

income and expense accounts could not be established; and,

Non-maintenance of Subsidiary Ledgers (SL) for inventory and

property accounts, thus, the reliability, accuracy, and

completeness of such controlling accounts could not be

reconciled and verified.

Tangcal Qualified Cash in bank account amounting to P8.979 million cannot be

ascertained due to non-submission of Bank Reconciliation

Statements;


P151.768 million cannot be ascertained due to failure of agency

to conduct physical inventory; and,

Receivable and Payable accounts totaling P2.789 million

remained dormant.

Tubod Qualified Property, Plant and Equipment account balance amounting to

P222.712 million could not be ascertained or relied upon since it

was not supported by physical inventory report,

Other Maintenance and Operating Expenses amounting to

P1.518 million is unreliable since it pertains to expenses like

honoraria, traveling expenses, office supplies expenses,

representation expenses, and others; and,

Fuel, Oil and Lubricants Expenses totaling P2.643 million cannot

be ascertained due to failure of the General Services Office to

prepare the Monthly Report of Fuel Consumption.

376


Misamis Occidental

Modified/ Qualfied

Inventories amounting to P46.5 million remained dormant for two

years to over fifteen years;

Property, Plant and Equipment accounts amounting P3.5 billion

could still not be ascertained and relied upon due to the failure of

the accounting and General Services Office (GSO) to reconcile

their records after inventory taking; and,

Receivables amounting P24.9 million which remained dormant

for ten years or over resulted in the overstatement of agency

assets and government equity due to inclusion of accounts with

doubtful existence and collectability.

Cities:

Oroquieta City Qualfied Inventory Accounts with balance totaling P16.763 million most of

which had already been consumed are still carried in the books

due to the failure of the offices concerned to keep adequate

records of its issuance in violation of Section 375 (b) of the Local

Government Code of the Philippines and Sec 114. Vol. I of the

New Government Accounting System Manual; and,

Physical count of Property, Plant and Equipment (PPE) accounts

totaling P1.225 billion was not conducted.

Ozamiz City Qualfied Properties and equipment assigned and situated in the different

departments and offices of the Agency were not properly labelled

and identified, thus weakening internal control on property

accountability and making physical inventory taking difficult;

Failure to exercise legal and civil remedies and developed other

feasible strategies to enhance collections of delinquent taxes

from taxpayers; and,

Special Education Funds totalling P31.249 million were placed

under “Time Deposit” investments.

Tangub City Qualfied Failure to employ and implement sound internal controls in the

management of its property, plant and equipment (PPE)

amounting to P839.425 million thus, existence, accuracy, proper

presentation and valuation, serviceability and good custodianship

of the PPE accounts could not be ascertained.

Inventory accounts are unreliable for lack of actual conduct of

physical inventory and non-preparation of inventory reports which

will corroborate the reported balance of P78.741 million; and,

Dormant receivable accounts/unliquidated cash advances

totaling P1.575 million whose possibility of collection is nil, remain

377


in the books of the city for more than ten (10) years, thereby

affecting the reliability and fair presentation of accounts in the

financial statements.

Municipalities:

Aloran Qualified Property, Plant and Equipment account amounting P155.743

million could not be validated due to non-submission of the Report

of Physical Count of Property, Plant and Equipment (RPCPPE)

and non-maintenance of Stock/Property Cards and

Supplies/Property and Equipment Ledger Cards.

Baliangao Qualified Failure to conduct physical count and absence of Local Road

Inventory and Road Map for Road Networks, thus the existence,

validity and accuracy of the Property, Plant and Equipment (PPE)

and Biological Asset account with book value of P88.334 million

and P.106 million, respectively, could not be ascertained;

Unreconciled Cash-in-Bank balances per Ledger and per

Cashbook with noted difference of P3.549 million, thereby casting

doubts on the veracity of the reported balance of Cash in Bank –

LCCA account; and,

Unliquidated cash advances totaling P.622 million, thus,

understating recorded expenses in the year they were incurred.

Bonifacio Qualified Failure to conduct physical count and absence of Local Road



account with book value of P390.664 million could not be

ascertained; and,




LCCA account; and the use of the cash basis method in

recognizing revenue from waterworks system and stall rentals,

thus resulted to unrecorded receivables of at least P.824 million.

Calamba Qualified Property, Plant and Equipment account amounting P155.743

million could not be validated due to non-submission of the Report

of Physical Count of Property, Plant and Equipment (RPCPPE)

and non-maintenance of Stock/Property Cards and

Supplies/Property and Equipment Ledger Cards and failure to

secure Transfer Certificate of Title (TCT) and effect revaluation

on its land properties contrary to the Asset Recognition Criteria

and Philippine Public Sector Accounting Standards (PPSAS) No.

17, thereby casting doubts as to its recognition as an asset and

possibly understating said account and government equity by

P14.345 million.

378


Clarin Qualified Failure to conduct physical count and absence of Local Road



and Biological Asset account with book value of P88.334 million

and P.106 million, respectively, could not be ascertained;




LCCA account; and,

Unliquidated cash advances totaling P.622 million, thus

understating recorded expenses in the year they were incurred.

Concepcion Qualified Due to unreconciled and unliquidated fund transfers and

unreconciled reciprocal accounts

Don Victoriano Chiongbian

Qualified Due to delayed preparation of Bank Reconciliation Statements,

thereby casting doubts on the veracity of the Cash in Bank –

LCCA account totaling P149.654 million;

Unliquidated cash advances totaling P6.864 million, thus

understating recorded expenses in the year they were incurred;

and,

Erroneous entries committed that affected the accuracy of the

balances of Waterworks System Fees, Rent Income and Rent

Expenses accounts.

Jimenez Modified/ Qualfied

Property, Plant and Equipment (PPE) accounts with net book

value of P279.044 million representing 72.87% of the LGU’s total

assets could not be relied upon due to (a) non-submission of the

Report of the Physical Count of PPE (RPCPPE) and (b) the failure

of the General Services Office to maintain property cards (PCs)

and the Accounting Office to maintain Property, Plant and

Equipment Ledger Cards (PPELC) for each class of PPE,

contrary to Sections 114 (Volume 1) and 45 (Volume II) of Manual

on NGAS for LGUs

Lopez Jaena Unqualified

Panaon Qualified Property, Plant and Equipment and Inventory Accounts in the

amount of P202.172 million and P.780 million, respectively, could

not be ascertained, due to non-conduct of actual physical count

by the duly designated Inventory Committee, non-reconciliation

of accounting and property records, in violation of pertinent

provisions of Section 2 of PD 1445, thereby creating doubt as to

the propriety, book balance of the Property, Plant and Equipment

and Inventories Accounts.

379


Plaridel Qualified PPE accounts which totaled P228.708 million as of December 31,

2018 remained doubtful due to the failure of management to

submit the physical inventory reports and reconcile the records of

the Supply Office and the Accounting Office.

Sapang Dalaga Qualified Cash in Bank – LCCA account amounting to P29.703 million as

of December 31, 2018 remained doubtful due to the non-

submission of Bank Reconciliation Statements (BRS) in violation

of COA Circular No. 96-011 dated October 2, 1996; and,

PPE accounts which totaled P123.802 million as of December 31,

2018 remained doubtful due to the failure of management to

submit the physical inventory reports and reconcile the records of

the Supply Office and the Accounting Office.

Sinacaban Qualified Due to the absence of Report on the Physical Count of Property,

Plant and Equipment, lack of complete and updated PPE ledger

cards, non-depreciation of some properties, absence of Local

Road Inventory and Road Map for Road Networks, non-

maintenance of subsidiary records for fund transfers from NGAs

and Other LGUs, non-adherence to accrual accounting in the

operation of the Municipality Water System thereby the accuracy,

reliability, validity, and existence of the municipality’s assets,

liabilities, and income cannot be ascertained.

Tudela Qualified Due to absence of Local Road Inventory and Road Map for Road

Networks, untitled Land properties, dormant OFW loan

assistance, dormant Accounts Payable accounts, and unreliable

Rent Income account due to absence of Lease Contracts thereby

the accuracy, reliability, validity, and existence of municipality’s

assets, liabilities, and equity cannot be ascertained.

Misamis Oriental Qualified Cash in Bank of P 1.248 billion could not be established due to

absence of Bank Reconciliation Statements for 43 bank accounts

and subsidiary leadger for each account;

Road assets with aggregate costs of P658.616 million could not

be ascertained due to absence of physical count, Local Road

Network Ledger Card and Local Road Network Property Card.

The cost also included maintenance expenses of not lesser than

P109.847 million. There was also overlapping of projects listed in

the Report of Local Road Network;

Accounts Receivable totaling P188.707 million of MisOrTel which

represents 99% of the total Accounts Receivable was not

provided impairment loss despite collectibles of P188.707 million

from disconnected accounts. The omission gave wrong

information regarding the status of the accounts; the same quality

of information could be gleaned because of unreconciled records

that showed a difference of P9.731 million;

380


Purchases of supplies and materials were directly expensed

contrary to the Standard which required the agency to adopt the

perpetual inventory method. Also, the existence and accuracy of

the reported balances of the inventories totaling P15.378 million

could not be ascertained due to absence physical count, ledger

cards and stock cards from which the accuracy of the balances

could be verified. In addition, of the total P15.378 million

inventory, P12.235 million or 77-per cent of the total inventory

accounts was non-moving balance of prior year/s; and,

Weighted average method of costing of inventory as prescribed

under Philippine Application Guidance (PAG) 2 of the Philippine

Public Sector Accounting Standard (PPSAS) 12 was not adopted

in the costing of Accountable Forms, Plates and Stickers

inventory.

Cities

Cagayan de Oro Qualified Advances for Operating Expense and to Officers and Employees

in the total amount of P293.874 million aging 31 days to more

than one year remained unliquidated as of December 31, 2018,

thereby affecting the fair presentation of the corresponding

expense accounts in the financial statements;

Failure to recognize an Allowance for Impairment Losses on the

Receivable accounts totaling P1.797 million while the book

balance of Accumulated Depreciation amounting to P427.844

million as at 31 December 2018 was not fairly presented due to

non-recognition of depreciation of some items in Combined book

balance of cash account as of November 30, 2018 amounting to

P1.495 billion did not reconcile with the combined cash book

balance of P1.405 billion having a variance of P90 billion, hence,

the accuracy of the book balance of cash account presented in

the financial statement could not be validated.

Combined book balance of cash account as of November 30,

2018 amounting to P1.495 billion did not reconcile with the

combined cash book balance of P1.405 billion having a variance

of P90 billion, hence, the accuracy of the book balance of cash

account presented in the financial statement could not be

validated.

El Salvador City Qualified Failure to set up and maintain subsidiary ledger for all

accountable officers thus reconciliation of accountability cannot

be made;

Due from Accounts amounting to P.880 million as at year-end

remained unliquidated for one month to six months, thereby

rendering the validity of the account balance doubtful and resulted

381


to an overstatement of an asset account and understatement of

expenses; and,

Guarantee Deposits or Cash Deposits of Waterworks

concessionaires of P.047 million for the year or total estimated at

P.622 million for 3,112 concessionaires were treated as Income

instead of Trust Liabilities

Gingoog City Qualified Property, Plant, and Equipment (PPE) account could not be

ascertained due to lack of Report on Physical Count on Property,

Plant, and Equipment (RPCPPE) in some PPE items and

unreconciled balances between RPCPPE and trial balance

noncompliant with Section 124 of Chapter 7, Volume 1 on the

Manual on NGAS for LGUs, which may likely misstate the PPE

and related accounts in the financial statements;

P30.423 million balance of inventories is unreliable due to the

presence of non–moving inventory items totalled P7.930 million

representing 20%, may cause misstatement of affected inventory

account in the financial statements which does not conform to

PPSAS 12;

Due from LGU and Due from NGOs/POs City’s fund transfers to

barangays out of its 20% Development Fund amounting to

P3.367 million and P2.792 million, respectively, cannot be

ascertained due to non–liquidation for more than three years;

Minimal settlement of P.019 million representing 0.05% of the

total dormant balance of P39.466 million of the Receivables –

Disallowances/ Charges contrary to the provisions of COA

Circular No. 2009-006 on the Rules and Regulations on the

Settlement of Accounts dated September 15, 2009; and,

Unreliable balance of Accounts Payable amounting to P18.497

million that remained outstanding for over two (2) years are not

reverted to the unappropriated surplus, inconsistent with Section

98 of Presidential Decree No. 1445 and Paragraph 29 of PPSAS

29 which overstated the account.

Municipalities

Alubijid Qualified Due from National Government Agencies, Due from GOCCs, Due

from Local Government Units, Due from Officers & Employees,

and Other Receivables has an outstanding balance amounting a

total of P4.372 million which were not supported with documents

evidencing its existence and Due to National Government

Agencies account under Trust Fund as of December 31, 2018

included negative balances amounting to a total of P47.479

million which rendered the account unreliable; and,

382


Construction in progress account is understated by P20.753

million because disbursements of ongoing infrastructure projects

implemented by the LGU where directly debited to Due to NGA

account.

Balingasag Unqualified

Balingoan Qualified Failure to conduct an inventory of the local roads under its

jurisdiction and the absence of the Registry of Public

Infrastructure casted doubt on the reliability of its recorded Road

Network amounting P.333 million in the financial statements.

Binuangan Qualified Cash advances totaling P.119 million remained unliquidated as of

December 31, 2018 and additional cash advances were granted

to officers and employees of the Municipality with unsettled prior

cash advances which is inconsistent with Section 89 of

Presidential Decree No. 1445 and Sections 5.1 and 5.8 of COA

Circular No. 97-002 dated February 10, 1997, thereby

understating the related expenses and receivable account;

Loans Payable- Domestic amounting to P7.274 million cannot be

ascertained due to the failure of the Accounting Office to maintain

subsidiary records which is inconsistent with Sections 111(1) and

114(2) of Presidential Decree No. 1445, thereby casting doubt on

the accuracy and correctness of its balances; and,

Validity of ownership and rights of all land properties of the

Municipality as well as the reliability and accuracy of its recorded

balance totaling P1.628 million cannot be ascertained due to: (a)

failure to register its land properties under the Torrens Title

System; and (b) Non-maintenance of Property Cards (PC) by the

General Services Officer or the Local Treasurer and Property,

Plant and Equipment Ledger Card (PPELC) by the Municipal

Accountant contrary Section 39(2) of Presidential Decree 1445,

Section 148 of COA Circular 92-386 and Sections 114 and 119

Volume I of the Manual on NGAS for LGUs, respectively.

Claveria Qualified Incurrence of cash shortage amounting to P3.372 million contrary

to Sections 101 and 105 of PD 1445 and malversation of public

funds which is penalized under Article 217 of the Revised Penal

Code, thereby resulting in the loss of government funds;

Cash Advances and Other Receivables remains unliquidated/

unpaid after a period of 9 to 11 years from the date it was granted/

released due to non-enforcement of collections contrary to COA

Circular 97-002 and the Memorandum of Agreement (MOA)

thereby depriving the agency on the use of the said funds for

other important projects and misstated the presentation of the

accounts in the financial statements; and,

383


322 Disbursement Vouchers (DVs) totaling P51.856 million for

Calendar year 2018 remained unsubmitted more than a month

after the year ended contrary to PD 1445 and COA Circular 95-

006 causing delays in the prompt verification of said

disbursements rendering the accounts unreliable.

Gitagum Qualified Property Plant and Equipment amounting to P80.948 million were

not observed contrary to the provisions of COA Circular No. 92-

386 and Section 124 of the NGAS Manual thus existence of the

assets, and reliability and accuracy of the account balances

presented in the Financial Statements could not be ascertained:

a. Management failed to conduct physical inventory, maintain

and update property stock and ledger cards, provide lapsing

schedule and reconcile records of the General Services Office

and the Accounting Unit. b. Internal controls to safeguard

procured supplies, inventories and properties and issuance to

end users were not in placed due to failure to label assets with

property tags/stickers, Inspection and Acceptance Reports were

signed prior to actual delivery, failure to issue Requisition and

Issue Slips, and necessary details such as brand names and

serial numbers were not reflected in the Acknowledgement

Receipt for Equipment thus the assets were not protected against

loss and identification thereof was cumbersome during inventory

taking.

Initao Qualified Property, Plant and Equipmentamounting to P264.585 million

were not observed contrary to Section 124 of the NGASManual,

COA Circular No. 2015-008, PPSAS 17 and 21, hence, the

reliability and accuracyof the account balances presented in the

Financial Statements could not be ascertained:

a. The submitted Report on the Physical Count of Property

Plant and Equipment(RPCPPE) for CY 2018 was not reconciled

with Accounting’s property ledger cards;

b.The lapsing schedule was not prepared and submitted for

verification;

c. Adequate disclosures in the notes to financial

statements were not prepared inaccordance with PPSAS 17;

and

d. Impairment losses were not recorded for unserviceable

properties due to non-submission of inventory and inspection

reports contrary to paragraph 2 of PhilippinePublic Sector

Accounting Standards (PPSAS) No. 21, thus, overstating the

account balances of PPE as of reportng date

Jasaan Qualified 390 Disbursements Vouchers (DVs) with amount totaling

P49.828 million for the months of January to October 2018

remains unsubmitted more a month after the year ended contrary

to PD 1445 and COA Circular 95-006 causing delays in the

prompt verification of said disbursements rendering the accounts

unreliable.

384


Kinoguitan Qualified Failure to conduct an inventory of the local roads under its

jurisdiction and the absence of the Registry of Public

Infrastructure casted doubt on the reliability of its recorded Road

Network amounting P19.417 million in the financial statements.

Lagonglong Unqualified

Laguindingan Qualified Loans Receivables, Receivables – Disallowance/Charges,

Accounts Receivables, Due from National Government Agencies,

and Due from Officers & Employees account balances amounting

to a total of P4.861 million is unreliable; and,

Unreliability of the Road Networks account with a book value of

P40.296 million since it was not supported with Report of the

Local Road Network, disclosure in Notes to the Financial

Statements, Report on the Physical Count of Local Road Network

and its corresponding Local Road Network Ledger Cards as

prescribed by COA Circular 2015-008 dated November 25, 2015

which affected the fair presentation of the Road network account

in the financial statements.

Libertad Qualified Property Plant and Equipment amounting to P45.562 million were

not observed contrary to the provisions of COA Circular No. 92-

386, Sections 114 to 124 of the NGAS Manual, thus, existence

and physical condition of the assets were not validated, losses

from impaired assets were not recognized, and the reliability and

accuracy of the account balances presented in the Financial

Statements could not be ascertained.

a. Management failed to conduct physical inventory, maintain and

update property stock and ledger cards, provide lapsing schedule

and reconcile records of the General Services Office and the

Accounting Unit.

b. The Municipality failed to recognize impairment losses for its

unserviceable properties due to non-completion and non-

submission of inventory and inspection reports contrary to

paragraph 2 of Philippine Public Sector Accounting Standard

(PPSAS) No. 21, thus, overstating the account balances of PPE

as of reporting date.

c. Internal controls in the procurement of supplies, inventories and

properties and in the subsequent issuance to end users were not

in placed due to failure to label assets with property tags/stickers,

and necessary details such as brand names and serial numbers

were not reflected in the Acknowledgement Receipt for

Equipment, thus, assets were not safeguarded against loss and

identification thereof was cumbersome during inventory taking.

Lugait Qualified Property, Plant and Equipment (PPE) amounting to P270.437

million could not be ascertained due to the absence of physical

inventory and non-maintenance of Property Cards and PPE

Ledger Cards;

385


Construction in Progress Accounts were not closed to the

appropriate asset accounts for the completed projects costing

P8.313 million, thus, the related asset account and the

corresponding depreciation were not recorded;

Cash in bank balances could not be ascertained due to non-

submission of Monthly Bank Reconciliation Statements (BRS)

from December 2017 to September 2018; and,

Dormant Other Receivables amounting to P15.231 million were

not acted upon to facilitate the proper write-off, resulting in the

overstatement of agency assets due to the inclusion of accounts

with doubtful existence.

Magsaysay Qualified Failure to record the completed Local Road Networks in the

books of account contrary to the provisions of COA Circular No.

2015-008 dated November 25, 2015, thus understating the

municipality’s asset and equity accounts in the financial

statements;

Long outstanding Advances to Officers and Employees for travel,

special purpose and time-bounded undertakings including

confidential/intelligence funds amounting to P.973 million

remained unliquidated as at year-end, thus, resulted in the

overstatement of assets and understatement of expenses

reflected in the financial statements; and,

Out of the P164.755 million recorded Property, Plant and

Equipment, only P71.746 million were reported in the Annual

Inventory Report, the variance of P93.009 million was due to non-

recording of the costs of Land Improvements, Public

Infrastructures, Buildings and Other Equipment in the Inventory

Report of the Municipal Treasurers Office; and the failure of the

Municipal Accounting Office and Municipal Treasurers Office to

reconcile their respective records, thereby, rendering the PPE

account balances unreliable.

Manticao Qualified Property, Plant and Equipment (PPE) amounting to P126.884,

million could not be ascertained due to absence of physical

inventory and non-maintenance of PPE Ledger Cards. In

addition, the accuracy and validity of the cash accounts could not

be relied upon since the Accountant was unable to set-up

subsidiary ledgers for the collections of individual collectors by

fund.

Medina Qualified Failure to record the completed Local Road Networks in the




statements; and,

386


Depreciation for several PPE accounts was not provided in the

books of accounts in violation to the provisions of International

Public Sector Accounting Standards (IPSAS) No. 17, Property,

Plant and Equipment and COA Circular No. 2004-003 thus

affecting the accuracy and valuation of PPE, expense and equity


Naawan Qualified Property, Plant and Equipment (PPE) amounting to P168.179

million could not be ascertained due to absence of physical

inventory and non-maintenance of Property Cards and PPE

Ledger Cards;

Construction in Progress Accounts were not closed to the

appropriate asset accounts for the completed projects costing

P3.927 million, thus, the related asset account and the

corresponding depreciation were not recorded; and,

Receivables amounting to P.631 million which remained inactive

for nine to ten years were not acted upon to facilitate the proper

write-off, resulting in the overstatement of agency assets due to

the inclusion of accounts with doubtful existence.

Opol Qualified Debiting the Due to NGA account instead of the Construction in

Progress accounts, thus understating the Assets of the Local

Government Unit by P15.018 million;

Road Networks with a book value of P20.662 million were not

supported with pertinent reports thus affecting the fair

presentation of the Road network account in the financial

statements; and,

Construction in Progress accounts as of December 31, 2018

includes projects which were already completed, projects which

cannot be readily identified (unreconciled), and negative

balances amounting to P19.865 million, P70.374 million, and

P2.069 million, respectively, thus affecting the fair presentation of

the account in the financial statements.

Salay Unqualified

Sugbongcogon Qualified Loans Payable- Domestic amounting to P22.645 million cannot

be ascertained due to the failure of the Accounting Office to

maintain subsidiary records which is inconsistent with Sections

111(1) and 114(2) of Presidential Decree No. 1445, thereby

casting doubt on the accuracy and correctness of its balances;

Validity of ownership and rights of all land properties of the

Municipality as well as the reliability and accuracy of its recorded

balance totaling P1.164 million cannot be ascertained due to: (a)

failure to register its land properties under the Torrens Title

387


System; and (b) Non-maintenance of Property Cards (PC) by the

General Services Officer or the Local Treasurer and Property,

Plant and Equipment Ledger Card (PPELC) by the Municipal

Accountant contrary Section 39(2) of Presidential Decree 1445,

Section 148 of COA Circular 92-386 and Sections 114 and 119

Volume I of the Manual on NGAS for LGUs, respectively.


Receivable account balances as of December 31, 2018 totaling

P.461 million and P.466 million,respectively, are understated due

to the failure of the Accountant to draw Journal Entry voucher

(JEV) at the beginning of the year to record these taxes which are

due and collectible for the year contrary to Section 20, Volume 1

of the NGAS Manual; and,

Trust Fund’s Due from NGA’s and Due from LGU’s amounting to

P.100 million and P.202 million, respectively, were not supported

with Subsidiary Ledgers casting doubt on the reliability of the

balances of these accounts.

Tagoloan Qualified Receivable and Payable accounts amounting to P7.927 million

and P.078 million, respectively, were not backed with Subsidiary

Ledgers preventing the thorough examination and verification of

said accounts, thus, the correctness of the accounts’ balances

shown in the Financial Statements could not be ascertained; and,

Local Roads and Road Asset account was lodged in Construction

in Progress-Infrastructure account amounting to P60.881 million,

misstating both accounts and their related accumulated

depreciation and impairment losses for the current and prior

years;

Property, Plant and Equipment account balances totaling

P232.457 million as of December 31, 2018, could not be

ascertained due to the perennial failure of management to

maintain Plant, Property and Equipment Ledger Card (PPELC)

and property cards for each category of Property, Plant and

Equipment (PPE) and non-submission of the Annual Report on

Physical Count of PPE; and,

4,571 Disbursement Vouchers and related supporting documents

in an aggregate amount of P315.051 million were not submitted

within the reglementary period, thus, the legality and propriety of

the disbursements and transactions made could not be validated.

Talisayan Qualified Physical inventory of the PPE was not conducted by the

Municipality contrary to section 156 of COA Circular No. 92-386

and paragraph 27 of International Public Sector Accounting

Standards (IPSAS) No. 1, casting doubt on the existence,

accuracy and completeness of the account;

388


Depreciation for PPE accounts were not provided in the books of

accounts in violation of IPSAS No. 17, Property, Plant and

Equipment and COA Circular 2004-003 thus affecting the

accuracy and valuation of PPE, expense and equity accounts in


Failure to record the completed Local Road Networks in the




statements.

Villanueva Qualified Property, Plant and Equipment (PPE) amounting to P44.177

million was not reconciled with the balance of P361.141 million in

the books of accounts, with a variance of P316.964 million, thus,

not fairly presented in the financial statements as of December

31, 2018 and not conforming with Section 111, PD No. 1445; and,

Road Networks prepared by the General Service Office of

P180.310 million, was not reconciled with the balance of P32.716

million in the books of accounts, contrary to COA Circular No.

2015-008, thus, not fairly presented in the financial statements

as of December 31, 2018.

Region XI – Davao Region

Compostela Valley Qualified Due to accounting errors/omissions and deficiencies totaling

P998.942 million and P588.189 million, that affected the fair

presentation of the financial statement; and,

Additions/acquisitions during the year were not presented in the

Inventory accounts. Expensed/issuances of inventory during the

year were not disclosed.

Municipalities

Compostela Qualified Various accounting errors/omissions totaling P.588 million and various deficiencies/discrepancies noted which affect the reported total Assets, Liabilities and Government Equity amounting to P663.236 million, P251.107 million and P 412.128 million, respectively.

Laak Qualified Various accounting errors/omissions totaling P33.286 million and various deficiencies/discrepancies noted which affect the fair presentation of the financial statements at year-end.

Mabini Qualified Due to accounting errors/omissions totaling P47.447 million and

various deficiencies/discrepancies noted which affect the fair

presentation of the reported total Assets, Liabilities and

Government Equity amounting to P246.641 million, P62.863

million and P183.778 million, respectively.

389


Maco Qualified Due to accounting errors/omissions totaling P55.779 million, and

various errors/deficiencies noted.

Maragusan Qualified Various accounting errors/omissions totaling P10.809 million and various deficiencies/discrepancies noted which affect the fair presentation of the reported total Assets, Liabilities and Government Equity amounting to P327.878 million, P53.973 million, and P273.904 million, respectively.

Mawab Qualified Due to accounting errors/omissions totaling P15.003 million and various deficiencies/discrepancies noted which affect the fair presentation of the reported total Assets, Liabilities and Government Equity amounting to P419.640 million, P220.401 million and P199.240 million, respectively.

Monkayo Unqualified

Montevista

Qualified

Due to accounting errors/omissions totaling P1.328 million and various deficiencies/discrepancies noted which affect the fair presentation of the reported total Assets, Liabilities and Government Equity amounting to P301.830 million, P150.444 million and P151.386 million, respectively.

Nabunturan Qualified Due to accounting errors/omissions totaling P12.542 million and various deficiencies/discrepancies noted.

New Bataan Qualified Various accounting errors/omissions totaling P99.434 million and

various deficiencies noted which affected the fair presentation of

the reported total Assets, Liabilities and Government Equity

amounting to P408.238 million, P177.276 million and P230.962

million, respectively.

Pantukan Qualified Due to accounting errors/omissions totaling P49.218 million and

various deficiencies/discrepancies noted.

Davao del Norte Qualified Unrecorded three (3) parcels of Lands owned by the Province of

Davao del Norte with an estimated recognizable amount of P1.193 million;

Inaccurate and unreliabile ending balance of “Inventory” accounts amounting to P30.934 million as at December 31, 2018 and, additions to PPE accounts in CY 2018 amounting to P817.560 million due to unsubmitted RPCI RPCPE;

Overstated Construction-in-Progress (CIP) accounts under Trust Fund as at December 31, 2018 which pertain to 100% completed projects amounting to P328.768 million not reclassified to appropriate asset accounts;

Nine (9) completed infrastructure projects under the DA and DILG PAMANA Program were not closed upon liquidation/completion recorded under “Due to NGAs” account amounting to P94.238 million;

390


Understated Sales Revenue for consigned drugs and medicines amounting to P63.392 million of DavNor Pharmacy Economic Enterprise were recorded as “Other Payables” in the Trust Fund instead of a special account in the General Fund, thus, the income/profits derived therefrom amounting to P5.630 million for CY 2018 were not recognized in the books;

Stock Cards (SCs) and Subsidiary Ledgers (SLs) for the construction materials were not properly maintained and updated by the PGSO and PACCO, respectively affecting the validity, reliability and accuracy of the account balance amounting to P11.227 million as at December 31, 2018.

Cities

IGACOS Qualified Unissued check and similar reconciling items on Loans Payable

– Domestic were not adjusted in the books contrary to existing

regulations resulting in the understatement of said account

amounting to P3.765 million; and,

Cash in Bank, Local Currency - Current Account amounting to

P4.016 million in the year-end financial statements;

Panabo City Qualified The accuracy and reliability of the consolidated balance of Cash

in Bank accounts amounting to P766.37 million is doubtful due to

unreconciled amount of P12.140 million as a result of delayed

preparation of bank reconciliation statements for twenty one (21)

bank accounts. The propriety of reported balance of Inter and

Intra-Agency payables totaling P141.82 million is unreliable due

to non-remittance of the 20 percent share of Department of Public

Works and Highways (DPWH) and Office of Building Office

(OBO) from building fees and other charges totaling P2.289

million.

The presence of long overdue receivables totaling P1.389 million

booked under Other Receivables account failed to reflect the

correct valuation of the accounts in the financial statements;

Delay in the reconciliation of Trust Liabilities – LDRRMF account

balance with the subsidiary ledger resulted to overstatement of

the said account by P32.638 million. The Trust Liabilities –

LDDRMF account at yearend reflected a balance of P74.277

million while the LDRRMF utilization report that should support

said account reported a balance of P41.638 million.

Validation of Construction and Office Supplies Inventory balances

with their corresponding inventory report reflected a variance of

P51.864 million. Such discrepancy was not disclosed in the notes

to Financial Statements. The same observation has already been

made in CY2016 Annual Audit Report as stated in Item 20 Part III

of this report.

391


Tagum City Qualified PPE accounts presented in the Statement of Financial Position of

the City totaling P3.017 billion could not be ascertained due to the

absence of the Report on the Physical Count of Property, Plant

and Equipment (RPCPPE) as of December 31, 2018, thereby

casting doubts on the existence, accuracy and completeness of

recorded PPE which is discussed in detail in Part II of this report.

Municipalities:

Asuncion Qualified Inability to conduct inventory of the Local Roads and record in the

books of accounts under Property, Plant and Equipment – Road

Networks the previously completed roads closed to the

Government Equity and recorded in the Registry of Public

Infrastructure totaling P41.87 million casts doubts on the

completeness, accuracy and reliability of the reported Road

Networks and resulting further to understatement of the

depreciation and its related contra-asset account.

Braulio E. Dujali Unqualified

Carmen Unqualified

Kapalong Qualified Inability to conduct inventory of the Local Roads and record in the

books of accounts under Property, Plant and Equipment – Road

Networks the previously completed roads closed to the

Government Equity and recorded in the Registry of Public

Infrastructure totaling P43.89 million casts doubts on the

completeness, accuracy and reliability of the reported Road

Networks and resulting further to understatement of the

depreciation and its related contra-asset account.

New Corella Unqualified

San Isidro Qualified Failure of the management to install adequate, effective controls

and monitoring system on the animal dispersal livelihood program

resulted to unreported losses of assets/property thus, affecting

the reliability of the amount appearing in the financial statements

as of December 31, 2018 totaling P2.492 million.

Santo Tomas Unqualified

Talaingod Qualified Existence of the items composing the Property, Plant and

Equipment account, the proper valuation of its balance as at

December 31, 2018, and the computation of depreciation

expenses, as presented in the financial statement of the

Municipality are rendered doubtful due to the unreconciled

difference of P606.806 million of the RPCPPE (P929.204 million)

and the Accounting Records (P322.399 million) as at December

31, 2018.

392


Talaingod Qualified Existence of the items composing the Property, Plant and

Equipment account, the proper valuation of its balance as at

December 31, 2018, and the computation of depreciation

expenses, as presented in the financial statement of the

Municipality are rendered doubtful due to the unreconciled

difference of P606.806 million of the RPCPPE (P929.204 million)

and the Accounting Records (P322.399 million) as at December

31, 2018.

Davao del Sur Qualified Inadequate information on schedules and subsidiary ledgers of

Receivables and Payables in the amount of P47 million and

P442.7 million, and remained uncollected/unliquidated and/or

unpaid/unremitted, respectively; and,

Non-reconciliation of Inventories and PPE accounts per book

balance as against the balance per Report of Physical Count of

PPE and Inventories.

Cities

Davao City Qualified Property, Plant and Equipment accounts totaling P7.683 billion

could not be ascertained due to incomplete physical inventory

count; and,

Cash in bank and income accounts have been understated by the

unrecorded collections/deposits totaling P24.680 million.

Digos City Qualified Property, Plant and Equipment valued at P372.124 million or

19% of its total assets of P1.972 billion as of December 31, 2018

were not validated due to failure of the management to submit on

time the Report on the Physical Count of Property Plant and

Equipment (RPCPPE);

Non-provision of related depreciation for projects already

completed but still recorded as Construction in Progress-

Infrastructure Assets and Construction in Progress-Building and

Other Structures amounting to P13.931 million and P1.973

million, respectively; and,

Property, Plant and Equipment (PPE) with a net book value of

P38.081 million were not derecognized in its books as at year-

end even though control and benefits no longer accrue to it.

Municipalities

Bansalan Qualified Uncertainty on the accuracy of reciprocal accounts - Due from/to Other Funds, Due from/to Special Accounts, and Due from/to Local Economic Enterprises due to the variances computed amounting to P8.742 million, P8.801 million and P.226 million, respectively;

Doubts on the actual existence of inventory account balances totaling P2.594 million which remained non-moving throughout CY 2018; and,

393


Unreliability of the subsidiary ledgers (SLs) maintained for three (3) projects under the Due to NGAs account in the amount of P.757 million arising from the discrepancies noted between the general ledger and the supporting records in disregard of the pertinent provisions in PD 1445.

Hagonoy Qualified Purchases of supplies and materials totaling P9.010 million were

immediately recorded as expense, thus the corresponding

expense accounts may have been overstated due to non-

recognition of the inventory accounts for unused or unconsumed

supplies and materials, andaffecting the fair presentation of the

financial statementsas at December 31, 2018.

Kiblawan Qualified PPE accounts balances totaling P244.645 million as at

December 31, 2018 were not supported with Report on the

Physical Count of PPE (RPCPPE), thus the accuracy and

reliability of accounts balances, as well as their existence and

completeness, cannot be ascertained.

Magsaysay Unqualified

Malalag Qualified PPE accounts balances totaling P192.632 million as at

December 31, 2018 were not supported with duly reconciled

Report on the Physical Count of PPE (RPCPPE), thus the

accuracy and reliability of accounts balances, as well as their

existence and completeness, cannot be ascertained; and,

Due from Other Funds and Due to Other Funds accounts with a

net difference of P9.423 million cannot be ascertained due to

improper classification of transactions.

Matanao Unqualified

Padada Qualified Accuracy and completeness of the accounts balances relative to

the transfer of the unexpended Quick Response and Mitigation

Funds-MOOE of MDDRM Fund for CY 2018 could not be

ascertained due to erroneous accounting entry and/or

misclassification of accounts made in the General Fund and

non-recognition of receivable account in the Trust Fund


Santa Cruz

Qualified

Monthly transactions that range from P250,000.00 to P14 million

were not recorded by the Municipality due to the method of

recognizing only paid disbursement vouchers with complete

supporting documents hence, the accuracy and fair presentation

of the balances of cash in bank-LCCA, related expenses

accounts, cash advances and trust liabilities accounts cannot be

ascertained; and,

394


PPE and Inventory accounts balances totaling P356.891 million

and P16.516 million, respectively as at December 31, 2018 were

not supported with the Report on the Physical Count of PPE

(RPCPPE) and Report of the Physical Count of Inventories

(RPCI), thus, the accuracy and reliability of accounts as well as

their existence and completeness cannot be ascertained.

Sulop Qualified Reconciling items amounting to P12 million remained unadjusted

casting doubt on the completeness, accuracy and correctness of

the Cash in Bank – LCCA balances with a total amount of

P42.489 million as at December 31, 2018.

Davao Occidental Unqualified

Municipalities

Don Marcelino Qualified Property, Plant and Equipment accounts balances with carrying

value totaling P111.486 million is unreliable due to non-

reconciliation of property record with book balances;

Cash-in-Bank – LCCA balances (all funds) totaling to P88.572

million could not be substantiated since the account is not

supported with Bank Reconciliation Statement at year-end; and,

Materials and Inventory accounts balances totaling P1.682

million since no Stock Cards and Ledger Cards were maintained,

affect the fair presentation of financial statements as at December

31, 2018.

Jose Abad Santos Qualified Property, Plant and Equipment balances reported as at year-end amounting to P228.378 million is unreliable resulting from the non-maintenance of property cards and property ledger cards by the General Services Office and the Accounting Office, respectively, contrary to Section 114 (4) of the Manual on New Government Accounting System for LGUs;

Cash in Bank – LCCA balance totaling P85.717 million is uncertain due to the non-submission of Bank Reconciliation Statements (BRS) showing agreement between bank and book balances and subsequent adjustments of book reconciling items as at year-end in violation of Section 74 of PD 1445; and,

Supplies and materials purchased amounting to P2.176 million were directly accounted as expense negating from the prescribed perpetual inventory method of accounting, thereby causing the understatement or non-recognition of appropriate inventory account as at year-end.

Malita Qualified Property, Plant and Equipment accounts with net book value

totaling P517.332 million due to failure to complete the physical

count and non-reconciliation of property record with book

balances, affect the fair presentation of financial statements as at

December 31, 2018.

395


Santa Maria Qualified Purchases made on Barangay’s supplies and materials for calendar year 2017 and 2018 amounting to P.316 million and P.145 million, respectively, were directly charged to expense account negating from the prescribed perpetual inventory method of accounting thereby, causing the understatement or no recognition of appropriate inventory account at year-end;

No reports on the Barangay properties submitted by the BRK to the Municipal Accountant for reconciliation purposes in violation to item 3(d), Vol. I on System and Procedures Manual on the Management of Barangay Funds and Property, thereby, casting doubts on the propriety, certainty, and verifiability of reported balances totaling to P3.734 million and P3.755 million, respectively;

Cash in Bank – LCCA balances amounting to P2.103 million and P1.880 million for calendar 2017 and 2018, respectively, were uncertain due to the unavailability of Bank Reconciliation Statements (BRS) showing agreement between bank and book balances at year-end in violation of Section 74 of PD 1445, rendering the correctness and existence of the book balances doubtful;

Barangay’s rightful claim of ownerships on projects implemented to various locations amounting to P2.643 million could not be ascertain considering no action has been made to secure evidence proving government’s full control over the lands where the projects are situated, thereby, causing a possibility of depriving the constituents to benefits derived from these projects and resulting to misused/disused of government funds.

Sarangani Qualified Property, Plant and Equipment accounts with net book value

totaling P120.361 million due to failure to complete the physical

count and non-reconciliation of property record with book

balances, affect the fair presentation of financial statements as at

December 31, 2018.

Davao Oriental Qualified Cash in bank amounting to P43.597 million, remained

unreconciled due to the inability of the Provincial Accountant to

update the preparation and submission of the required Bank

Reconciliation Statements and effect timely adjustments for

reconciling items in the books, thus casting doubts on the

reliability of the balance thereof;

Receivables account may be overstated due to the inability of the

Province to recognize Allowance for Impairment as prescribed

under Philippine Public Sector Accounting Standards (PPSAS)

29 paragraph 67 on impairment and uncollectability of financial

assets despite the presence of dormant receivables amounting to

P12.212 million, thereby affecting the fairness in the presentation

of the said account in the financial statements;

Capital expenditures charged against the funds received from

National Government Agencies for the implementation of

programs, projects and activities totaling P66.470 million were

396


not properly recorded in the books of the Province caused by

improper accounting on the disbursement thereof, thus

understating the Property, Plant and Equipment account as of

year-end;

Outstanding balance of loans payable with the MDFO that

matured during the year amounting to P20.766 million as at

December 31, 2018 differs by P3.748 million against the

recorded amount of P17.018 million in the books of the Province,

due to the inability to monitor and appropriate sufficient fund for

its settlement, thereby rendering the unreliability of the account

balance in the financial statements as at year-end and exposing

the agency to risk of additional payment for penalties;

Funds received from National Government Agencies totaling

P28.692 million for the implementation of programs, projects and

activities could not be readily determined due to the absence of

periodic reports on its utilization and inappropriate maintenance

of accounting records, rendering the uncertainty of the said

balance of the Due to NGAs account as of year-end; and,

Hospital Fees are overstated by at least P27.817 million as

collection of prior years’ claims from the PhilHealth were recorded

as income during the year, thus affecting the fairness of the

balance of the said account as presented at year-end.

City

Mati City Qualified Reconciling items in the Bank Reconciliation Statement totaling P4.141 million that were either additions or deductions to book and bank balances as at December 31, 2018 remained unadjusted in the books; hence, the accuracy of the balance of Cash in Bank is doubtful;

Non-adherence by the City to the rules and regulations in the granting and liquidation of cash advances resulted to the accumulation of unliquidated cash advances totaling P19.842 million as at December 31, 2018; thus, exposing government funds to risk of loss and misuse.

Fund transfers to LGUs amounting to P1.093 million remain unliquidated, despite the lapse of more than one year from the time the funds were released, due to the failure of the City to enforce liquidation; thus, casting doubts whether funds had been used for the intended purpose.

Accounts payable totaling P69.424 million as presented in the financial statements inadvertently included eight (8) infrastructure projects amounting to P17.092 million that were either not yet started nor completed as at year end contrary to COA Circular No. 2015-009 dated December 1, 2015; thus affecting the fair presentation of the financial statement.

397


Borrowing cost incurred totaling P4.774 million in relation to the loan availed of by the LGU from Municipal Development Fund Office (MDFO) amounting to P 65 million for the construction of the City Hall Annex New Building and the Renovation of the Old Municipal Hall was inadvertently not capitalized as prescribed by Philippine Public Sector Accounting Standards; thus, affecting the fair presentation of the financial statements.

Municipalities

Baganga Qualified Non-submission of related documents for several adjustments to the Cash in Bank- Local Currency, Current Account amounting to P.103 million;

Accumulation of unliquidated cash advances amounting to P3.548 million as at December 31, 2018;

Non-reconciliation of records between the Accounting Office and General Service Office and erroneous classification of its Property, Plant and Equipment totaling P336.370 million;

Improper recording of Due to NGAs in the amount of P.828 million; and,

Improper recording of Other Payables with outstanding balances of P.921 million and P7.825 million under General Fund and Trust Fund books.

Banaybanay Qualified Unable to conduct a complete physical inventory count for all its


million as at December 31, 2018, thus rendering the existence of

the properties and accuracy of the reported balance to be

doubtful; and,

Interest expenses amounting to P2.665 million which were

incurred in connection with loan repayments for the procurement

of various Property, Plant and Equipment were overstated thus

affecting its fair presentation in the financial statements.

Boston Qualified Non-preparation of the monthly Bank Reconciliation Statements (BRS) resulted to a variance of P13.572 million between ledger balance and confirmed balance by the bank that included ledger balance of closed accounts, thus, the reliability and correctness of Cash in Bank-Local Currency Account balances amounting to P59.527 million could not be ascertained;

Accumulation of unliquidated cash advances amounting to P15.097 million as at year-end;

Property, Plant and Equipment (PPE) totaling P97.595 million cannot be ascertained due to failure of the management to conduct physical count as at year-end and erroneous classification of accounts; and,

Improper recording of Due to NGAs in the amount of P1.074 million and P.117 million.

398


Caraga Qualified Cash-in-Bank balance of P151.152 million as at December 31, 2018 could not ascertained due to the existence of unreconciled amount of P7.611 million and failure to timely submit the monthly Bank Reconciliation Statements contrary to Circular No. 96-011 dated October 2, 1996, thereby affecting the fair presentation of the account in the financial statements;

Cash advances and other receivables from officers and employees in total amount of P67.404 million as at year-end, 63% of which or P42.408 million remained outstanding for more than 10 years, due to the failure to conduct regular monitoring and analysis of the accounts and strictly enforce settlements thereof, overstated total assets and government equity, thereby not fairly presenting the actual financial position and operations of the municipality;

PPE of P172.972 million is doubtful due to the unreconciled balance of P171.384 million between the Report of Physical Count of PPE submitted by the General Services Officer and the records of the Accounting Office, thereby casting doubt on the accuracy and reliability of the reported balances in the financial statements;

Complete and timely submission of disbursement vouchers, various reports and other pertinent documents were not strictly complied with, despite previous audit recommendation, which resulted to bulk submission of vouchers and official receipts on February 2019. As at February 28, 2019, a total P14.440 million vouchers and official receipts from October to December 2018 remained unsubmitted, thus hindering the application of substantive audit procedures and posing risk to non-detection of errors and/or irregularities.

Cateel Qualified Cash in Bank-Local Currency, Current Account was understated by P1.395 million and the Cash in Bank-Local Currency, Savings Account was overstated by P1.798 million due to unrecorded reconciling items;

Inclusion of unliquidated but expended cash advances amounting to P7.484 million;

Failure to conduct annual physical count of its Property, Plant and Equipment (PPE) amounting to P168.930 million that casted doubt on the accuracy and reliability of the reported balance;

Inclusion of long overdue receivables from NGOs/POs amounting to P1.142 million; and,

Misclassification of various liability accounts amounting to P1.233 million.

Governor Generoso Qualified Unable to conduct a complete physical inventory count for all its




doubtful.

399


Lupon Qualified Unable to conduct a completel physical inventory count for all its


million,834.97 as at December 31, 2018, thus rendering the

existence of the properties and accuracy of the reported balance

to be doubtful; and,

Completed projects amounting to P12.637 million funded by the

Department of the Interior and Local Government (DILG) were

not recorded as assets thereby understating the affected


Manay Qualified Cash-in-Bank balance of P27.688 million as at December 31, 2018 could not be ascertained due to failure of the Municipal Accountant to timely submit the monthly Bank Reconciliation Statements, thereby affecting the fair presentation of the account in the financial statements;

Accumulation of unliquidated cash advances and other receivables from officers and employees in total amount of P8.586 million as at year-end, due to the failure to conduct regular monitoring and analysis of the accounts and strictly enforce settlements thereof, overstated total assets and government equity, thereby not fairly presenting the actual financial position and operations of the municipality;

Fuel, Oil and Lubricants Inventory of P3.421 million as at December 31, 2018 could not be ascertained due to the failure to conduct physical count, and maintain appropriate ledger and stock cards, thereby casting doubt on of the reported balances in the financial statements.

PPE with net book values of P170.787 million could not be ascertained due to the failure to reconcile the variance of P28.688 million in the beginning balances, submit the Report on the Physical Count of PPE as at December 31, 2018, and maintain appropriate ledger and stock cards, thereby affecting the fair presentation of the accounts in the financial statements;

Spare parts of heavy equipment charged to development fund in the total amount P2.856 million were erroneously recorded as Construction in Progress-Infrastructure Assets (1-07-10-020);

Complete and timely submission of disbursement vouchers, various reports and other pertinent documents were not strictly complied with, which resulted to bulk submission of vouchers and official receipts on January and February 2019. As at February 28, 2019, total amount of unsubmitted vouchers is P13.009 million, thus hindering the application of substantive audit procedures and posing risk to non-detection of errors and/or irregularities.

San Isidro Qualified Unable to conduct a complete physical inventory count for all its




doubtful.

400


Tarragona Qualified Accumulation of unliquidated cash advances and other receivables from officers and employees in total amount of P3.592 million as at year-end, due to the failure to conduct regular monitoring and analysis of the accounts and strictly enforce settlements thereof, had overstated total assets and understated government equity, thereby not fairly presenting the actual financial position and operations of the municipality.

Property, Plant and Equipment with net book values of P275.993 million could not be ascertained due to failure to submit Report on the Physical Count of Property, Plant and Equipment, thereby casting doubt on the accuracy and reliability of the reported balances in the financial statements; and,

Complete and timely submission of disbursement vouchers, official receipts and other pertinent documents were not strictly complied with, despite previous audit recommendation, hence a total of fifty-eight (58) disbursement vouchers with an aggregate value of P15.342 million were not submitted as at February 28, 2019, which further hindered the application of substantive audit procedures and posing risk to non-detection of errors and/or irregularities.

Region XII - SOCCSKSARGEN

Cotabato City Qualified Plant and Equipment accounts with a net book value of P1.310

billion could not be ascertained due to (a) Non-conduct of physical

inventory, (b) Property records not prepared and maintained, (c)

Incomplete documentation of Road Network account in the

amount of P18.051 million, and (d) Inaccurate computation of

depreciation amounting to P63.929 million; and,

Cash in Bank-Local Currency Current Account under General

Fund totaling P26.554 million cannot be ascertained due to

unadjusted/unidentified/unsupported discrepancies between

bank and book balances and non-reconciliation of Accounting

and Treasury records.

North Cotabato Qualified Lapses in the internal control of the Property, Plant and

Equipment account cast doubt as to the reliability and accuracy

of the reported net balance amounting to P4.824 billion; and,

Funds transferred to other Local Government Units (LGUs) in the

amount of P56.689 million remain in the books of accounts due

to lack of proper monitoring and lenience in the terms prescribed

in the Memoranda of Agreement.

City

Kidapawan City Qualified Non-recording of the prior year's RPT deliquencies involving

P24.663 million had understated the Real Property Tax (RPT)

and Special Education Tax (SET) Receivables thereby rendering

its ending balance inaccurate and unreliable; and,

401


Procedural gaps in the recording and accounting of Accounts

Payable and Other Payables had rendered its year balances

inaccurate and unreliable.

Municipalities

Alamada Qualified Total balances of Property, Plant and Equipment per Report of


amounting to P157.777 million did not reconcile with the balance

per ledger of P236.039 million resulting to unaccounted

difference of P78.262 million, thus management assertion on the

accuracy and completeness of the balances of the accounts could

not be relied upon, affecting their fair presentation in the financial

statements;

Real Property Tax and Special Education Tax Receivables in the

balance sheet totaling P3.875 million did not reconcile with the

delinquent taxes amounting to P76.603 million reflecting the

substantial difference of P72.728 million thus, casting doubt on

the reliability of the said accounts and that the deferred Real

Property Tax and Special Education Tax Income.

Aleosan Qualified Due to unserviceable properties valued at P14.958 million were

still carried in the Financial Statement and Inventory Report.

Antipas Qualified Property, Plant and Equipment (PPE) account with net book value

of P114.522 million as of year-end could not be ascertained due

to failure of the agency to conduct complete physical count of

PPE thereby exposing said properties to possible loss while

unaccounted; and,

Property, Plant and Equipment totaling P8.067 million were not

provided with periodic depreciation in violation of PAG3 to IPSAS

17 hence the total carrying amount of the subject accounts is

misstated.

Arakan Qualified Property, Plant and Equipment (PPE) account with net book value

of P 153,132 million as of year-end could not be ascertained due

to failure of the agency to conduct complete physical count of

PPE thereby exposing said properties to possible loss while

unaccounted; and,

Parcel of land with a book value of P1.080 million for CY 2018

remained untitled in the name of the Municipal Government of

Arakan, contrary to Section 449 of GAAM, Volume I, thereby

rendering the ownership doubtful and consequently exposing the

Municipality to third party claim.

402


Banisilan Qualified Unreconciled difference in the Due from Other Funds and Due to

Other Funds accounts by P22.564 million and the accuracy of

Cash in Bank account balance of P5.737 million could not be

ascertained because of non-preparation of the Monthly Bank

Reconciliation Statements.

Carmen Qualified Existence of long reconcillinf items on the Cash in Bnak- Local

Currency Accounts and for lack of supporting documtnes for land

account acmounting to P8.626 million which casted doubt in the

reliability and accuracy of the accounts.

Kabacan Qualified Existence of the long outstanding reconciling items on the Cash

in Bank – Local Currency Accounts;

Loans Payable account amounting P50.190 million was doubtful

due to a discrepancy of P15.214 million between the books and

the creditors’ record; and,

Land account amounting to P10.061 million was doubtful for lack

of supporting ownership documents.

Libungan Qualified Non-reconciliation of balances of Property, Plant and Equipment

accounts as per Report of Physical Count of PPEs and balances

per ledger resulting to a variance of P159.814 million;

Non-preparation and submission of the Inventory and Inspection

Report of Unserviceable Properties (IIRUP) evidencing existence

of unserviceable and obsolete PPEs that were not dropped in the

books amounting to P22.002 million;

Absence of Certificate of Title evidencing the ownership of

parcels of land amounting to P4.873 million;

Non-dropping of balances of inventories and biological assets in

the books amounting to P4.180 million; and,

Inappropriate charging of interest under 20% EDF to Loans

Payable – Domestic Account amounting to P2.332 million.

M'lang Qualified Due to (a) various bank reconciling items remain unadjusted in

the books which resulted to the overstatement of Cash in Bank

by P.632 million;

Unliquidated cash advances amounting to P4.004 million;

Various deficiencies in the accounting and reporting of Road

Network System;

Non-transfer of completed projects from the CIP account;

Non-reconciliation of reciprocal accounts; and,

403


Non-classification of Non-current Loans Payable account thereby

affecting the fair presentation of the accounts in the financial

statements.

Magpet Qualified Property, Plant and Equipment could not be ascertained due to

unreconciled discrepancy of P181.960 million between the

Report on Physical Count of PPE (RPCPE) and accounting

records;

Land Improvements account costing P7.302 million was not

provided with periodic depreciation in violation of PAG3 to IPSAS

17 hence the total carrying amount of the subject accounts is

misstated;

Parcel of land with a book value of P5.406 million for CY 2018


Magpet, contrary to Section 449 of GAAM, Volume I, thereby

rendering the ownership doubtful and consequently exposing the

Municipality to third party claims; and,

Real Property Tax(RPT) and Special Education Tax (SET)

Receivables and their Deferred Income counterparts as of

December 31, 2018 are doubtful due to unreconciled difference

of the aforementioned accounts and their corresponding

reciprocal accounts, contrary to Section 20, Volume I of the

Manual on New Government Accounting System (MNGAS).

Makilala Qualified Discrepancies of setting-up receivables resulted in unreliable

balances of the recorded Real Property Tax (RPT) and Special

Education Tax (SET) Receivables amounting to P26.478 million

and P27.203 million, respectively.

Matalam Qualified Due to various reconciling items which remain unadjusted

resulted to the understatement of cash in bank account by P2.616

million; and,

Deficiencies in the accounting and reporting of road networks

account with value stated at P221.940 million, thereby affecting

the fair presentation of the accounts in the financial statements.

Midsayap Qualified Due to unreconciled balance between the General Ledger of

Property, Plant & Equipment and Report on Physical Count of

Property, Plant & Equipment amounting to P174.697 million and

failure to provide Depreciation Expense account on the specified

Property Plant and Equipment totaling P21.220 million of the

Municipality for the Calendar Year 2018.

Pigcawayan Qualified Failure to conduct physical count of the properties and non-

reconciliation of the properties with the accounting records


404


Failure to transfer to the Road Networks accounts the local roads

of the LGU amounting to P47.329 million;

Non-recognition of allowance for depreciation of some PPEs


Inappropriate recording of acquisition of various inventories

amounting to P10.242 million to expense accounts; and,

Non-reconciliation of reciprocal accounts with a net difference of

P2.088 million.

Pikit Qualified Due to unreconciled balance between the General Ledger of

Property, Plant & Equipment and Report on Physical Count of

Property, Plant & Equipment amounting to P237.760 million and

failure to provide Depreciation Expense account on the specified

Property Plant and Equipment totaling P152.160 million of the

Municipality for the Calendar Year 2018.

President Roxas Qualified Property, Plant and Equipment could not be ascertained due to

unreconciled discrepancy of P119.593 million between the

Report on Physical Count of PPE (RPCPE) and accounting

records;

Parcel of land with a book value of P.729 million for CY 2018


President Roxas, contrary to Section 449 of GAAM, Volume I,

thereby rendering the ownership doubtful and consequently

exposing the Municipality to third party claims.

Discrepancies between the reciprocal accounts Due from and

Due to Other Funds amounting to P.611 million indicated errors

in recording of

Tulunan Qualified Due to various reconciling items remain unadjusted which

resulted to the understatement of cash in bank account by P1.073

million;

Fund transfer from PRDP totaling P3.740 million remained

outstanding despite of project termination, thereby affecting the

reliability and accuracy of the reported Due to NGAs and other

related accounts; and,

Various deficiencies in the accounting and reporting of road

networks account with value stated at P26.061 million, thereby


statements.

405


Sarangani Qualified Unsettled reconciling items between the book and the bank

records as well as the variance between the cash balances in the

financial statements and the treasurer’s cash book amounting to

P2.5 million affect reliability of the cash balance at year end;

Non-recording of issuances and consumption of various supplies

and materials affects the accuracy of inventories account

amounting to P123 million;

Cash advances of P10.870 million and fund transfers to other

LGUs of P20.460 million which remained outstanding for more

than one year as well as grants to NGOs/POs of P22.470 million

for more than 10 years understate expenses in the applicable

period at the same amounts; and,

Credit variance amounting to P5.5 million between reciprocal

accounts Due from and Due to Other Funds renders such

accounts unreliable.

Municipalities

Alabel Qualified Cash in bank – LCCA accounts could not be ascertained due to

reconciling items which remains unadjusted in the books

amounting to P.544 million; and,

Property, Plant and Equipment (PPE) stated at P161.2 million, or

49.48% of total assets, as at December 31, 2018 could not be

ascertained due to unreconciled discrepancy of P75.04 million

between the accounting and property records.

Glan Qualified Property, Plant and Equipment (PPE) stated at P417.91 million,



between the accounting and property records;

Cash in Bank balance amounting to P321.03 million is unreliable

due to unreconciled balance between the book and bank in the

net credit amount of P9.01 million; and,

Inaccuracy of receivable and expenses due to delayed liquidation

of fund transfers to component barangays amounting to P6.270

million.

Kiamba Qualified Cash advances amounting to P32.503 million remained

unliquidated at year-end resulting in the non-recognition of

expenses in the period incurred;

Receivables and Due to NGAs accounts amounting P.880 million

and P.781 million, respectively, cannot be ascertained since

these have already been dormant for more than ten years;

406


Property, Plant and Equipment account as of year-end amounting

to P72.183 million is doubtful due to non-reconciliation with the

property schedules amounting to P34.150 million and the

absence of Report on the Physical Count of Property, Plant and

Equipment;

Transactions pertaining to Assistance to Disadvantaged

Municipalities amounting to P9.530 million were inappropriately

recorded to Due to Other Funds; and,

Capital expenditures under 20% Local Development Fund

amounting to P8.510 million were not booked as assets

Maasim Qualified Property, Plant and Equipment (PPE) stated at P168.380 million

(net), or 37.09% of total assets, as at December 31, 2018 could

not be ascertained due to unreconciled discrepancy of P65.030

million between the accounting and property records;

Non-recognition of expenses due to non-liquidation of cash

advances at year end amounting to P.523 million (excluding CIF);

and,

Unreliable presentation of fund transfers accounts amounting to

P.462 million due to dormant balances for more than four years.

Maitum Qualified Presence of “unreconciled amounts” in the assets and liabilities

accounts totaling P51 million and P5 million, respectively,

rendered the financial statements unreliable; and,

Dormant Other Receivables account amounting to P1.054 million

still exists in the books despite prior years’ audit recommendation

to seek approval for its write-off.

Malapatan Qualified Property, Plant and Equipment (PPE) stated at P339.800 million,



between the accounting and property records and non-

recognition of depreciation expenses;

Cash in Bank balance amounting to P87.380 million is unreliable

due to unrecorded cash in bank balances, inclusion of balances

from closed bank accounts, existence of unsubstantiated

reconciling items, and non-adjustment of valid reconciling items;

Inaccuracy of receivable and expenses due to non-liquidation of

cash advances amounting to P57.870 million.

Malungon Qualified Property, Plant and Equipment (PPE) stated at P201.070 million,



between the accounting and property records and non-

recognition of depreciation expenses for several properties;

407


Cash in Bank balance amounting to P66.86 million is doubtful due

to unreconciled balance between the book and bank in the net

debit amount of P0.87 million; and,

Doubtful validity of Due to LGUs account totaling P33.600 million

due to absence of General and Subsidiary Ledgers.

South Cotabato Qualified Inventories and its related expenses are unreliable due to

significant delays in the submission of the required reports

relating to its issuances and distribution and late and incomplete

of the Report on the Physical Count of Inventories with reported

balance of P314.240 million at year end;

Inaccuracy of receivables relating to unreconciled and unadjusted

advances to contractors account in the amount of P3.090 million;

and,

Non-reconciliation of some subsidiary ledger and cashbook

entries and inclusion of unrecovered deposits in a defunct

depository bank in an aggregate of P2.130 million which affected

the valuation of cash in bank accounts at year-end.

Cities

General Santos City Qualified Cash on hand and in banks amounting P3.792 billion could not

be ascertained as there were no bank reconciliation statements,

continuous unreconciled balances and maintenance of dormant

bank accounts;

P.699 million Petty Cash Fund was unliquidated;

P84.291 million cash advances was unliquidated;

P2.990 billion Property, Plant and Equipment (PPE)is unreliable

due to no physical count and reconciliation with controlling

accounts were not complete and

P11.232 million Construction-In-Progress (CIP) were dormant for

five years and were not reported as completed and closed to

proper asset account; and,

Non–recognition of P154.577 million receivable from Philippine

Health and Insurance Corporation (PHIC) cast doubts to the

reliability and fairness of presentation of the financial statements.

Koronadal City Qualified Cash in Bank account is unreliable due to non-preparation of the

bank reconciliation statements and non-preparation of cashbooks

and reconciliation of records.

408


Municipalities

Banga Qualified Property, Plant and Equipment account totaling P442 million, net

of accumulated depreciation, is doubtful due to the inexistence of

property cards and non-conduct of physical count; and,

Trust Liability-DRRM account is understated by P4.880 million

due to the non-transfer of unutilized / unexpended balance of the

Quick Response Fund and the LDRRM-MOE of the current year

to the Special Trust Fund.

Lake Sebu Qualified Due to the existence of unliquidated cash advances;

Unreconciled PPE accounts; and,

Unrecorded book reconciling items, totaling P144 million as of

December 31, 2018, which casts doubts on the reliability of the

affected reported assets, liabilities and expenses accounts.

Norala Qualified Misstatements of the reported Property, Plant and Equipment and

Government Equity accounts on the financial statements for the

CY 2018.

Polomolok Qualified Cash in Bank balance was doubtful due to the lack of review on

the validity of reconciling items in the Bank Reconciliation

Statements which remain outstanding for a long period of time

with a net amount of P11.400 million;

Outstanding receivable accounts amounting to P22.400 million

were uncertain due to the insufficient conduct of regular and

periodic verification, analysis and validation of the existence of

the receivable accounts;

P1.1 billion Property, Plant and Equipment (PPE), net of

accumulated depreciation, is doubtful due to the net difference

between the accounting records and the submitted Report on

Physical Count on Property, Plant and Equipment (RPCPPE) and

the capitalization of small tangible and semi-expendable items

totaling P1.300 million, net of depreciation;

Unsettled P1.700 million dormant payables overstated the

liabilities and understated the government equity accounts;

Erroneous transfer of P2.300 million savings from the capital

outlay projects under the current and continuing appropriations to

Special Trust Fund and unrecorded P4.600 million equipment of

LDRRMF under Disaster Response and Rescue Equipment

account misstated the balances of the accounts affected at the

year-end; and,

Failure to set-up the Real Property Tax (RPT)/ Special Education

Tax (SET) Receivables at the beginning of the applicable year

misstated the asset and liability accounts of the Municipality as of

year-end.

409


Santo Niño Qualified Due to the non-reconciliations of Cash in Bank accounts and

records, unreconciled balances of PPE, and non-liquidation of

cash advances, amounting to P18.900 million, P28.500 million

and P11.500 million, respectively, as of year-end which affect the

reliability of the reported assets, expenses and net income as of

December 31, 2018.

Surallah Qualified Unreconciled difference of the reported cash balances between

the book and bank records amounting to P.080 million; and,

Incomplete Report on the Physical Count of Property, Plant and

Equipment and its non-reconciliation with the book records in an

aggregate of P283.310 million.

T'boli Qualified Due to the effects of the improper capitalization of Fuel, Repair

and Maintenance, and Subsidy Expenses, totaling P 18 million,

to Road Networks Account under PPE, thereby affecting the

reliability of the reported assets, expenses and equity as of year-

end.reliability of the reported assets, expenses and equity as of

year-end.

Tampakan Qualified Cash in Bank cannot be ascertained due to the incomplete

maintenance of bank reconciliation report and the non-settlement

of long outstanding reconciling items;

Loans Receivable-Others, Other Receivables and payable

accounts existed in the books for a long period of time thus casts

doubt on its legitimacy as bonafide receivable/obligation of the

Municipality;

Property, Plant and Equipment (PPE), net of accumulated

depreciation, is doubtful due to the net difference of depreciation,

inclusion of fully depreciated assets which cannot be ascertained

due to non-preparation and submission of the Report on Physical

Count on Property, Plant and Equipment (RPCPPE) & Inventory

and Inspection Report of Unserviceable Property (IIRUP) and the

capitalization of small tangible and semi-expandable items;

Intra-agency accounts amounting to P.511 million were doubtful

due to the unrecorded transactions; and,


Tax (SET) Receivables at the beginning of the year misstates the

asset and liability accounts of the Municipality as of year-end.

Tantangan Qualified Cash in Bank – Local Currency, Current account amounting to

P53.500 million is uncertain due to the overstatement of P5.200

million and non-reconciliation of cash balances as well as the

preparation and maintenance of bank reconciliation statement

and cash books; and,

410


Property, Plant and Equipment account totaling P254.800 million,

net of accumulated depreciation, is doubtful due to the existence

of variance of P24.200 million between the balance per books and

the inventory reports, non-recognition of depreciation, and non-

compliance to the transition provision for the recognition of local

road networks.

Tupi Qualified Outstanding receivable accounts amounting to P11 million were

doubtful due to the insufficient conduct of regular and periodic

verification, analysis and validation of the existence of the

receivable accounts;

Property, Plant and Equipment (PPE), net of accumulated

depreciation, is doubtful due to the net difference between the

accounting records and the submitted Report on Physical Count

on Property, Plant and Equipment (RPCPPE);

Unexpended balance of the Quick Response Fund (QRF) and

Mitigation Fund-MOOE for CY 2018 were not transferred to the

Special Trust Fund at year-end, thereby, understating the Trust

Liability- DRRM and Transfers from General Fund of Unspent

DRRM Funds to the Trust Funds accounts;

Unrecorded P.015 million equipment understated the Disaster

Response and Rescue Equipment account in the General Fund

books;

Intra-agency accounts were doubtful due to the net difference of

P.407 million; and,


Tax (SET) Receivables at the beginning of the applicable year

misstated the asset and liability accounts of the Municipality as of

year-end.

Sultan Kudarat Unqualified

City

Tacurong City Qualified Unrecorded Cash in Bank adjustments aggregating to P1.180

million which may have caused the understatement of the related

asset, income and expense accounts.

Municipalities

Bagumbayan Qualified

Property, Plant and Equipment (PPE) account balances of

P255.265 million could not be established due to various

deficiencies in property records/managemenbt and non-conduct

of physical count; and,

411


Trust Liability DRRM balance of P.175 million is doubtful due to

understatement in the same account by P8.084 million.

Columbio Qualified

Assets and liabilities totaling P5.648 million and P.056 million,

respectively, are of doubtful existence, accuracy and validity due

to inadequacy of records;



respectively, could not be ascertained due to errors in recording

and inadequacy of records; and,

Due from Other Funds and Due to Other Funds accounts showed

unreconciled net discrepancy balance of P4.720 million.

Esperanza Qualified

Property, Plant, and Equipment (PPE) account balances of

P235.108 million comprising 51.76% of the total assets could not

be established due to various deficiencies in property

records/management and non-conduct of physical count; and,

Unreliable balance of Trust Liability-DRMM of P15.141 million

due to non-reconciliation of reports and non-disclosure in the

Notes to Financial Statements despite that this was already

observed in the previous year.

Isulan Qualified

Failure to set up receivables on Real Property Tax (RPT) and

Special Education Tax (SET) resulting in the understatement of

both RPT and SET Receivables and corresponding Deferred RPT

and SET Income by P47.693 million; and,

Supplies and materials purchased totalling P7.960 million were

not recorded as inventory but directly charged to expenses

resulting in the misstatement of the inventory and expense

accounts.

Kalamansig Qualified

Overstatement of Cash in Bank-Local Currency Account and

Understatement of Cash-Local Treasury.

Lambayong Qualified

Due to understatement in the Cash-in-Bank Adjustments

aggregating to P10.110 million;

Unreconciled book and balances of the DRRM fund totalling to

P2.698 million which resulted to either overstatement or

understatement of the cash balance presented; and,

Gaps in the classification of account totalling P4.013 million which

have caused the understatement/overstatement of the identified

expense accounts.

412


Lebak Qualified

Construction and heavy equipment Account and related payable

and interest expense were misstated due to erroneous

recognition of assets as well as the non-recording of current

payable and interest expense.

Lutayan Qualified

Assets and liabilities accounts totaling P161.044 million and

P75.388 million, respectively, are of doubtful accuracy and

validity due to absence of Subsidiary Ledgers/Schedules and

failure to conduct a complete physical inventory of Property, Plant

and Equipment.

Palimbang Qualified

Collections amounting to P.345 million were not remitted to the

Liquidatng Officer on time exposing the funds to risks of loss or

misuse; and,

Non-submission for audit evaluation of bid documents and

financial documents/reports for expenditures totaling P55.728

million grossly obstructs COA's legally mandated attestation on

management's assertions on the finanacial statements and

deprives management of timely improvement opportunities

resulting from efficiency, economy and effectiveness evaluation

of the LGU's operations.

President Quirino Qualified

Financial reports for CY 2018 were not submitted within the

prescribed period to the Audit Team, thus, preventing the timely

audit of accounts and financial transactions of the Municipality.

Senator Ninoy Aquino

Qualified

PPE account balances of P87.841 million could not be

established due to various deficiencies in property

records/management and non-conduct of physical count.

Region XIII – CARAGA

Agusan del Norte Qualified

Cash in bank account balance totaling P1.301 billion as of

December 31, 2018 is doubtful due to non–submission of bank

reconciliation statements (BRS) and the pertinent bank

statements; net unreconciled balances amounting to P104.847

million between bank confirmations and books of accounts; and

net unreconciled balances amounting to P6.215 million between

the books of accounts and cashbooks, consequently affects the

fair presentation of the financial statements; and,

Property, Plant and Equipment Accounts amounting to P2.087

billion in the Statement of Financial Position for the Calendar Year

2018 could not be verified and ascertained due to the failure of

the Provincial Accounting Office (PACCO) to maintain Property

Plant and Equipment (PPE) Ledger Card and Registries of Public

Infrastructures and the non-submission of the Report on the

Physical Count of the Property, Plant and Equipment (RPCPPE)

by the Provincial General Services Office (PGSO).

413


Cities

Butuan City Qualified

Cash-in-Bank and the Accounts Payable accounts are

understated by an aggregate amount of P.488 million due to the

failure of the Accountant to effect the required adjustments in the

books the total stale checks issued outstanding as of December

31, 2018;

Accounts Receivable from stallholders delinquency aggregating

P1.306 million as of December 31, 2018 was not recorded in the

books of accounts due to the failure of the Office of the City

Economic Enterprise (OCEE) to submit to the Office of the

Accountant the Journal of Bills Rendered, thus not only

understated the Income and Total Asset Account, but also

exposed government funds to the risk of loss from unaccounted

collection; and,

Net realizable value or recoverable amount of Receivable

Accounts cannot be ascertained due to the failure of the

Accountant to set up Allowance for Impairment-Other Receivable

Account (1-03-05-991), thus the Net Book Value of Due from

NGO/PO Account carried in the Statement of Financial Position

at P6.074 million is misstated.

Financial and livelihood assistance granted by the previous

administration to Non-Government Organization/Peoples

Organization (NGO/PO) with an outstanding unliquidated balance

of P17.512 million as of December 31, 2018 was erroneously

charged to the Due from NGO/PO Account instead of the

Donation Account thus resulted in overstatement of the Total

Asset and understatement of the Equity accounts in the

Statement of Financial Position.

Cabadbaran Qualified

Cash in Bank between the Accounting and Treasury Books with

recorded amount of P888.033 million and P887.430 million,

respectively, was not reconciled resulting in a variance of P.602

million, thus, affecting the reliability of the Cash in Bank account




could not be verified and ascertained due to incomplete

information in the Report on the Physical Count of the Property,

Plant & Equipment (RPCPPE) and the non-submission of the

Report on the Physical Count of Inventories (RPCI);

Unble to inform the City General Services Office or furnish the

documents covering transfer of property and equipment from the

Department of Health, Regional Office No. 13 to the City

Government amounting P3.233 million, thus, said property and

414


equipment were not recorded in the City’s books and

accountability thereof was not established and exposed the

property to the risk of loss or theft; and,

Accounts Payable which remained outstanding for two to three

years amounting to P.758 million were not reverted to the

unappropriated surplus of the general fund, thus, deprived the

City from appropriating the amount to more beneficial programs

and projects and affected the fair presentation of the affected


Municipalities

Buenavista Qualified

Property, Plant and Equipment (PPE) Accounts in the Statement

of Financial Position for the Calendar Year 2018 could not be

validated due to the unreconciled net variance amounting to

P81.132 million against the incomplete Report on the Physical

Count of the Property, Plant & Equipment (RPCPPE) and non-

provision of depreciation charges of some assets.

Inventory Accounts in the Statement of Financial Position for the

Calendar Year 2018 totaling P36.674 million, could not be relied

upon due to the failure to maintain the Supplies Ledger Cards by

the Accounting Office and non-submission of Report on the

Physical Count of Inventories (RPCI); and,

Advances and Other Receivables accounts as of December 31,

2018 are doubtful due to discrepancies noted in the schedule of

advances amounting to P10.658 million, thus, affects the fair

presentation of the financial statements.

Carmen Qualified

Property, Plant and Equipment Accounts in the Statement of

Financial Position for the Calendar Year 2018 in the total amount

of P166.897 million could not be validated due to non-submission

of Report on the Physical Count of the Property, Plant &

Equipment (RPCPPE).

Jabonga Qualified

Property, Plant and Equipment and Inventories amounting to

P145.157 million and P.180 million, respectively, could not be

ascertained due to failure to conduct the required physical

inventory and non-preparation and submission of inventory

report;

Depreciable properties and equipment amounting to P122.820

million were not provided with depreciation due to absence of

updated PPE records, thus, the recorded balance of depreciable

PPE were not properly stated in their carrying amounts; and,

415


Understatement of the accounts Subsidy to Other Funds and

Trust Liabilities – DRMM by P2.448 million due to failure to

transfer unexpended Local Disaster Risk and Management Fund

to the Special Trust Fund in the Special Trust Fund books.

Kitcharao Qualified

Unreliable balances of the Property, Plant and Equipment (PPE)

and Inventory accounts amounting to P331.302 million and P.525

million, respectively, due to incomplete information in the Report

on the Physical Count of the Property, Plant & Equipment

(RPCPPE) and the non-submission of the Report on the Physical

Count of Inventories (RPCI).

Las Nieves Qualified

Property, Plant and Equipment (PPE) and Inventories presented

in the Statement of Financial Position at a carrying amount

totaling P261.393 million and P3.458 million, respectively, could

not be relied upon due to non-submission of Report on the

Physical Count of Property Plant and Equipment (RPCPPE) and

Report on the Physical Count of Inventories (RPCI).

Consequently, we were unable to determine whether any

adjustment to the reported amount was necessary.

Magallanes Qualified


amounting to P176.046 million and P.372 million, respectively,

could not be verified and ascertained due to incomplete

information in the Report on the Physical Count of the Property,

Plant & Equipment (RPCPPE) and the non-submission of the

Report on the Physical Count of Inventories (RPCI).

Nasipit Qualified

Property, Plant and Equipment Accounts amounting to P156.864

million in the Statement of Financial Position for the Calendar

Year 2018 could not be verified and ascertained due to

incomplete information in the Report on the Physical Count of the

Property, Plant & Equipment (RPCPPE).

Remedios T. Romualdez

Qualified

Property, Plant and Equipment accounts amounting to P129.166

million in the Statement of Financial Position for the Calendar

Year 2018 could not be verified and ascertained due to

incomplete information in the Report on the Physical Count of the

Property, Plant & Equipment (RPCPPE).

Santiago Qualified

Physical inventory of Property, Plant and Equipment (PPE) and

Inventories carried in the books totaling P212.612 million and

P8.387 million, respectively, was not conducted contrary to

Section 124 of the New Government Accounting Systems Manual

Volume I, thus, rendering the accounts Property, Plant and

Equipment (PPE) and Inventories in the Statement of Financial

Position unreliable;

416



million were not provided with depreciation in CY 2018, thereby,

rendering the Asset and Expense accounts overstated and

understated, respectively, by the amount of the depreciation that

should have been provided; and,

Unexpended Local Disaster Risk Reduction and Management

Fund (LDRRMF) for CY 2018 and 2017 amounting P4.239 million

was not transferred to the Special Trust Fund Account “Trust

Liability – DRRMF” in the Trust Fund books, understating the

accounts “Subsidy to Other Funds and Trust Liabilities –DRRMF.

Tubay Qualified

Property, Plant and Equipment (PPE) and Inventories carried in

the books totaling P62.714 million and P.428 million, respectively,

could not be relied upon due to inability to conduct physical count.

Thus, rendering the balances reported in the Statement of

Financial Position unreliable. Consequently, we were unable to

determine whether any adjustment to the reported amount was

necessary.

Agusan del Sur Qualified

Cash in Bank – Local Currency, Current Account (LCCA) and

Cash in Bank - Local Currency, Savings Account (LCSA) in the

total amount of P2.748 billion could not be ascertained due to

existence of a variance with a net amount of P1.364 million

between the records of the accounting unit and the treasury,

thereby affecting the fairness of the presentation of the Financial

Statements;

Property, Plant and Equipment account recorded in the books at

P4.396 billion cannot be ascertained due to the unreconciled

records between the accounting unit and the General Services

Office and Inventory Committee; and,

Fund transfers to Local Government Units (LGUs) amounting to

P94.067 million for the implementation of various projects

remained unliquidated at year-end, casting doubts on the

propriety of the reported balance as shown in the Statement of

Financial Position.

City

Bayugan City Qualified

Property, Plant and Equipment as of December 31, 2018

amounting to P2.026 billion could not be ascertained due to

failure of the Management to conduct actual physical count of

properties and submit report thereof, thus affecting the reliability

of PPE accounts in the financial statements; and,

Balances of various assets and liabilities accounts totaling to

P88.738 million and P1.486 million, respectively, was not

supported with sufficient details inconsistent with Section 111 of

P.D. 1445, thus rendering the accuracy and reliability of the

related account balances doubtful.

417


Municipalities

Bunawan Qualified

Property, Plant and Equipment (PPE) accounts as at December

31, 2018 amounting to P190.093 million (except Construction in

progress and Infrastructure accounts) remained unreliable due to

absence of Report on the Physical Count of Property, Plant and

Equipment (RPCPPE), unrecorded cost of heavy equipment and

non-provision of depreciation on some PPE.

Esperanza Qualified

PPE account as of year-end totalling P583.514 million was

unreliable due to (a) unreconciled balance between the book

balances and Report on Physical Count of Property, Plant and

Equipment (RPCPPE) of P152.029 million; (b) failure to maintain

PPE Ledger Cards in the Accounting Office; and (c) non-provision

of depreciation for some PPE, thereby affecting the fair

presentation of the financial statements.

La Paz Qualified


amounting to P342.805 million and P.534 million, respectively, in

the Statement of Financial Position is doubtful due to 1) conduct

of physical inventory was not undertaken for all PPE and non-

conduct of physical count for Inventory accounts; non-

reconciliation between Accounting Office and Inventory

Committee with a difference of P44.630 million; and, 3)

incomplete information for some items of the PPE, thus rendering

the PPE and Inventory Accounts unreliable.

Loreto Qualified

Non submission of Reports of Physical Count of Inventory (RPCI)

for Inventory account totaling P11.008 million; and,

Property, Plant and Equipment (PPE) account balance of

P300.315 million does not reconcile with the balance per Report

of Physical Count of the said accounts due to non-reconciliation

of the records maintained by the Accounting and Property Units,

thus existence, accuracy and reliability of these accounts in the

financial statements cannot be ascertained.

Prosperidad Qualified

Property Plant and Equipment amounting to P347.407 million is

doubtful due to the failure to conduct comprehensive physical

inventory as at December 31, 2018.

Rosario Qualified

Construction-In-Progress accounts amounting to P210.695

million could not be ascertained due to non-reclassification of

completed projects to its appropriate PPE account, thus,

overstating/understating the affected accounts in the financial

statements.


Land under PPE and Investment Property account amounting to

P558.582 million is doubtful of validity due to the absence of

transfer certificates of title (TCTs), thus, rendering the ownership

thereto uncertain and exposing the Municipality to risk of third-

party claims and illegal dispositions;

418


Cash advances excluding Confidential Fund totaling P5.201

million remained outstanding as at year end due to non-

submission of liquidation documents by the Accountable Officers

of their cash advances within the prescribed period and the

Management did not enforce strictly the prescribed rules and

regulations in granting, utilization and liquidation of cash

advances, hence, no proper accounting can be made thereof;

Funds downloaded to the Barangays amounting to P3.673 million

remained unliquidated as of December 31, 2018, thus providing

no basis for its proper accounting. Of the total amount, P.918

million remained outstanding for more than two years, thus,

casting doubt on the proper utilization of the said fund.

San Luis Qualified

Property, Plant and Equipment (PPE) accounts of the

Municipality appearing in the Statement of Financial Position with

net amount of P274.231 million could not be determined due to

the non-conduct of comprehensive physical inventory, moreover,

reconciliation with the accounting records could not be attained.

Santa Josefa Qualified

Property, Plant and Equipment (PPE) accounts as of December

31, 2018 could not be established due to unreconciled balance

between the RPCPEE of P157.696 million, incomplete conduct of

physical count of PPE and non or erroneous computation of

depreciation, thus affecting the fair presentation of the PPE


Sibagat Qualified

Inventory and Property, Plant and Equipment (PPE) account

balances of P2.145 million and P220.994 million, respectively,

does not reconcile with the balance per Report of Physical Count

of the said accounts due to the non-reconciliation of the records

maintained by the Accounting and Property Units thus, existence,

accuracy and reliability of these accounts in the financial

statements cannot be ascertained.

Talacogon Qualified

Failure of the Inventory Committee to conduct comprehensive

physical inventory taking, failure of the Municipal Accounting

Office (MAO) and Municipal General Services Office (MGSO) to

maintain Property, Plant and Equipment Ledger Cards and

Property Cards, respectively, and the non-reconciliation of the

property and accounting records renders the year-end balance of

Property, Plant and Equipment accounts totalling P366.135

million unreliable.

Trento Qualified

Cash and Cash Equivalents account balance in the Statement of

Financial Position totaling to P254.015 million could not be

ascertained due to: (a) failure to record/adjust in the books

various reconciling items; (b) accumulation of doubtful items

owing to scrutiny of its causes; and (c) failure to reconcile the

Accounting and Treasury books, thereby rendering the cash in

bank account unreliable;

419


Inventory accounts amounting to P9.994 million and the Property,

Plant and Equipment (PPE) amounting to P525.676 million were

doubtful due to the: misclassification of inventories, non-

submission of Report of Physical Count for Inventories, inclusion

of damaged, disposed, non-functional properties and presenting

incomplete information for some items of the PPE;

Negative balances, unrecorded loan repayments, unverified, and

unreconciled accounts totaling P12.691 million, P10.739 million,

P.882 million and P59.592 million, respectively, were disclosed in

the financial statements rendering the reliability, existence and

accuracy of the affected accounts presented thereat.

Veruela Qualified

The Inventory and Property, Plant and Equipment (PPE) account

balances of P.198 million and P171.173 million, respectively, do

not reconcile with the balance per Report of Physical Count of the

said accounts due to the non-reconciliation of the records

maintained by the Accounting and Property Units thus, existence,

accuracy and reliability of these accounts in the financial

statements cannot be ascertained.

Surigao del Norte Qualified

Despite prior year’s audit finding and recommendation, the LGU’s

year-end physical inventory of all Property, Plant and Equipment

(PPE) was still not conducted and PPE ledgers card and

Acknowledgment Receipts of Equipment were not maintained,

thus, the correctness and validity of the PPE balance totaling

P5.584 billion could not be ascertained and their existence could

not be established.

City

Surigao City Qualified

Property, Plant and Equipment with a net book value of P934

million was not ascertained due to non-conduct of annual physical

count, and non-maintenance of Property Cards, and updated

Property Acknowledgment Receipt; and,

Various Assets and Liabilities accounts recorded as “for recon” in

the e-PPSAS Subsidiary Ledger of the City Government of

Surigao with an aggregate amount of P65.700 million and

P91.700 million, respectively, could not be established due to the

absence of schedules and supporting documents, adversely


statements.

Municipalities

Alegria Qualified

Non-reconciliation between the cash and cash equivalents

account ledgers and cashbooks with a variance of P.014 million

as of December 31, 2018 affecting the fair presentation of the

account balance.

420


Cash in Bank – LCCA account balance at P6.331 million as of

December 31, 2018 is doubtful due to non-preparation of the

Bank Reconciliation Statements (BRSs);

Non-reconciliation of the RPCI and RPCPPE with the ledgers and

failure of the agency to keep records of the inventory, property,

plant and equipment (PPE) and biological asset accounts in the

amount of P.100 million, P117.791 million and P.084 million,

respectively, rendering the amounts reflected in the financial

statements as of December 31, 2018 doubtful as to validity,

accuracy and existence;

Failure of the agency to capitalize and disclose the borrowing

costs for CY 2018 totaling P2.136 million affecting the fair

presentation of the financial statements; and,

Non-recognition of the unexpended portion of the CY 2018

LDRRMF in the books therefore misstating the equity and liability

accounts in the amount of P.490 million.

Bacuag Qualified

Property, Plant and Equipment (PPE) totaling P72.564 million is

unreliable due to no annual physical count of PPE was conducted

and no Property Cards and Ledger Cards on PPE were

maintained by the General Service Officer/Municipal Treasurer

and Municipal Accountant’s Office, respectively and no

depreciation is recognized on depreciable PPE accounts;

Due from Other Funds and Due to Other Funds as reciprocal

accounts with balances of P4.892 million and P2.227 million,

respectively, are doubtful due to non-reconciliation of their

balances and resulted to a variance of P2.665 million; and,

Due from LGUs accounts amounting to P.190 million cannot be

ascertained due to non-demand by LGU Bacuag from concerned

LGUs on the liquidation and/or refund on the funds transferred

and non-moving for more than six (6) years.

Burgos Qualified

Cash in Bank accounts as at year-end in the amount of P22.269

million was understated by P.152 million due to inadvertent

exclusion of the Philhealth Trust Fund account and the bank

account of General Fund-LDRRMF was reported with an

overstatement of P.811 million due to the inclusion of Special

Trust Fund of LDRRMF account thereby, casting doubts as to the

accuracy and fair presentation of the Cash in Bank accounts and

may mislead the users of the financial statements;

Collections which averaged P.007 million were not remitted daily

to the Liquidating Officer thus incurred delays in remittances that

ranged from 1-165 working days, then the delays as well in the

deposit of collections resulted in the highest accumulated balance

of P.465 million during the year and incurred delays that ranged

from 3-69 working days;

421


Cash-Local Treasury is understated by P.347 million for failure to

account unremitted collections as at year-end thereby exposing

the funds to possible loss, theft or misappropriation and affecting

the timely recognition of income and cash accounts in the


Cash Advances for official travel amounting to P.654 million were

recorded as outright expense and disregarded the submission of

required liquidation, thereby, resulting in the absence of

accountability to concerned accountable officers and a departure

of the matching principle which may lead to the risk of loss and

misappropriation and may affect the fair presentation of the


Property, Plant and Equipment and Biological Assets accounts

totaling P82.46 million and P0.45 million, respectively, as at year-

end were unreliable due to the absence of Property and Ledger

Cards, and the non-creation of an inventory committee resulted

to the continued wanting of periodic physical inventory report to

ascertain the validity, existence and accuracy of the said

accounts thereby, exposing these government properties to the

possibility of loss and/or misuse due to absence of monitoring;

Fund transfer received from Department of Science and

Technology (DOST) – RO XIII totaling P.500 million remained

outstanding for more than 3 years as of December 31, 2018 due

to wanting of liquidation reports from the Municipality, thus,

casting doubt on the proper utilization of the fund and affected the

fair presentation of balances in the financial statements;

Prescribed policies and procedures for an effective inventory

management of supplies and materials such as perpetual

inventory system, maintenance of supplies and materials stock

cards and ledger cards, preparation of supplies and materials

issued and actual physical count of inventories were still not

observed and performed due to misapplication of accounting

principles, inadequate planning with the concerned personnel

and lack of coordination mechanism which indicates inaccurate

inventory records and weakness of internal control over supplies

and materials that may affect the fair presentation of the financial

statements.

Loan Proceeds in the total amount of P23.998 million were still

recorded as Due to NGAs account instead of the proper Loans

Payable account and the proposed adjusting journal entries in last

year’s audit were not booked yet due to the Agency’s lack of

information as to what specific fund should the loans be charged.

Hence, subsequent entries related to the amortization of the said

loan were not also properly charged to its proper accounts. In

effect, the financial statements to be presented at year-end shall

422


be materially misstated and the unreliable assessment of the

liquidity and solvency may affect the quality of public service of

the Municipality to its constituents; and,

Special Trust Fund account established for the unexpended

balance of the LDRRMF in the amount of P.811 million was

erroneously recorded in the General Fund-LDRRMF books

instead of the Trust Fund books, thereby, not establishing a Trust

Liability-DRRM account in the Trust Fund books which affected

the fair presentation of affected accounts in the financial

statements.

Claver Qualified

Cash in Bank – Local Currency Current Account balance of

P636.040 million is doubtful due to unrecorded prior year’s

reconciling items totaling P.269 million of the Bank Reconciliation

Statements (BRS) in the books of the agency and no BRS were

prepared by the Municipal Accountant on two (2) depository bank

accounts;

Property, Plant and Equipment (PPE) and Depreciation

Expense accounts amounting to P972.257 million and P19.393

million, respectively, were unascertained due to no annual

physical count of PPE was conducted and no Property Cards

and Ledger Cards on PPE were maintained by the General

Service Officer and Municipal Accountant’s Office, respectively;

and ongoing construction of infrastructure projects funded by the

20% Development Fund totaling P6.770 million were not

recorded as Construction in Progress (CIP);

Accounts Payable-Current account balance of P80.659 million is

doubtful due to inclusion of P25.133 million or 31.16% which have

been outstanding and/or not settled for more than 12 months and

recording of some obligations with no valid claimants and not

supported with sufficient evidence prior to calendar year 2018;

Due from NGOs/POs account totaling P3.535 million is unreliable

due to no identified valid recipients of the transferred fund

amounting to P2.535 million or 71.82% and non-liquidation by

CLACOFARMCO of P1 million which was granted prior to year

2018 and no assurance that it was utilized to its intended purpose;

Balances of all accounts in the General Fund is doubtful due to

non-preparation and non-maintenance of subsidiary ledgers, trial

balance and financial statements by LGU Claver for all special

accounts, thus difficulty in the validation of management’s

assertions on the financial statements as these were reported in

a lump-sum amount in the General Fund and evaluation whether

the income generated by the economic enterprises are sufficient

to meet their respective operating costs; and,

423


Uncollected rent income on the lease of space in the market

premises of LGU Claver and penalties thereon by delinquent

Stallholders were not accounted and recorded in the books of the

LGU.

Dapa Qualified

Property, Plant and Equipment (PPE) accounts with a total

amount of P172.285 million as of December 31, 2018 are still of

doubtful validity, accuracy and existence due to the continued

failure by the Municipality to update records and conduct periodic

physical inventory of its property;

Failure to record in the books of accounts the unused portion of

the employees earned leave credits totalling P6.317 million as of

December 31, 2018 and no fund was ever set-up for the same

thereby may affect the timely and expeditious release of the

retirement pay and other benefits of all retiring employees of the

Municipality; and,

Unutilized LDRRMF for CYs 2016 to 2018 with an aggregate

amount of P5.581 million was not transferred to Special Trust

Fund Account and disbursements thereof for CY 2018 totaling

P.372 million were made without adhering to existing rules and

regulations in the allocation and utilization of the fund as defined

in Item 6 of the NDRRMC-DILG-DBM Joint Memorandum Circular

No. 2013-1 dated March 25, 2013 and COA Circular No. 2012-

003 dated October 29, 2012.

Del Carmen Qualified

Dormant unliquidated cash advances aged 10 years and above

totaling P5.065 million were not acted upon by the Municipal

Mayor and Accountant to facilitate their write-off resulting to

overstatement of the agency’s assets in the same amount;

Investment Property and Property, Plant and Equipment (PPE)

accounts as of December 31, 2018 totaling P363.479 million are

still of doubtful existence, accuracy and validity due to continued

non-maintenance of PPE Cards, non-issuance of Property

Acknowledgment Receipt (PAR) and failure of the Municipality to

submit to COA not later than January 31, 2019 the Report on

Physical Count on PPE due to laxity of the Inventory Committee

to facilitate its preparation and non-religious conduct of the

required annual physical count on Investment Property and

Property, Plant and Equipment;

Unreconciled difference of P 82.520 million between the

accounting ledgers and the cashbooks on the reported ending

balances of Cash accounts due to the absence of periodic

reconciliation of the Accounting and Treasury Offices which

exemplified a breakdown of the internal control of the Agency,

thereby affecting the fairness of the presentation of the Financial

Statements;

424


Balances of Intra-Agency reciprocal accounts of Due from Other

Funds and Due to Other Funds as at December 31, 2018 did not

reconcile which showed a net difference of P.073 million, thus,

casted doubts on the accuracy and reliability of the said accounts

in the financial statements; and,


management of supplies and materials such as: maintenance of

supplies and materials stock cards and ledger cards, preparation

of summary of supplies and materials issued and the conduct of

actual physical count of inventories, were still not observed and

complied as provided for in Section 119,120,121 and 124 of

Volume I of the New Government Accounting System (NGAS)

Manual due to lack of knowledge and inadequate planning and

coordination mechanism which indicates inaccurate inventory

records and weakness of internal control over supplies and

materials that may affect the fair presentation of the accounts in

the financial statements.

General Luna Qualified


P59.727 million as of December 31, 2018 are still of doubtful

validity, accuracy and existence due to the continued failure of

the Municipality to keep records and conduct periodic physical

inventory of its properties;


the employees earned leave credits totaling P9.275 million as of




Municipality;

Information and Communication Technology Equipment procured

by the Municipality with a total cost of P1.255 million were not

properly recognized and recorded and effective controls on

government properties were not observed, thus, casted doubt as

to accuracy, validity and existence of the reported balance in the


Unutilized LDRRMF for CYs 2016 to 2018 with an aggregate

amount of P10.566 million was not transferred to Special Trust

Fund Account, thus, exposing the fund to a higher risk of possible

misuse and financial statements were not fairly presented.

Gigaquit Qualified

Property, Plant and Equipment (PPE) and Depreciation Expense

accounts of P99.883 million and P12.563 million, respectively,

are unreliable due to no report on the physical count of PPE was

submitted and no Property Cards on PPE were maintained by

the General Service Officer and non-recognition of depreciation

on some depreciable PPE accounts.

425


Due from LGUs and Due from NGOs/POs as reciprocal accounts

with balances of P-0- and P.006 million, respectively, are doubtful

due to non-reconciliation their balances and resulted to a variance

of P.006 million.

Breeding Stocks account of P.239 million is unreliable due to non-

maintenance of Property Card and Ledger Card on Work, Other

Animals and Breeding Stocks by the Property Office and

Municipal Accountant’s Office whose balance existed since

calendar year 2012;

Construction in Progress, Advances for Payroll, Advances to

Contractors, Due to NGAs, Guaranty/Security Deposits Payable,

and Other Maintenance and Operating Expenses accounts are

doubtful due to debiting the Due to National Government

Agencies (NGAs) account in recording the issuance of check in

the utilization of fund transfers totaling P15.988 million; and,

Donations account and Due from Local Government Units

account was overstated and understated, respectively, due to

recording the cash assistance of P.788 million by LGU Gigaquit

to eleven (11) Barangays for the implementation of projects/

programs/ activities (PPAs) and purchase of goods as a direct

expense instead of receivables.

Mainit Qualified

Year-end physical inventory of Property, Plant and Equipment

(PPE) was not conducted, PPE Property Cards were not

maintained and PPE Ledger Cards were not updated, thus, the

correctness, completeness and reliability of the PPE account

balance of P179.913 million could not be ascertained and their

existence could not be established; and,

Cash in Bank – Local Currency, Current Account balance in the

Trust Fund could not be ascertained due to the unadjusted

reconciling items of stale checks amounting to P.368 million,

thereby affecting the fair presentation of the cash account in the

financial statements as of year-end.

Malimono Qualified

Non-reconciliation of the cash balances between the cashbooks

and ledgers posting a variance of P.526 million, rendering the

Cash and Cash Equivalents account which is stated in the

statement of financial position at P38.634 million as of December

31, 2018, doubtful as to accuracy and reliability;

Receivable and Payable Accounts amounting to P33.816 million

and P91.944 million, respectively, or a total of P125.761 million

are of doubtful existence, accuracy and reliability due to the

absence of supporting schedules and other specific information;

Failure of the Municipality to keep records and conduct physical

count of its Inventories, Property, Plant and Equipment (PPE) and

Biological Assets in CY 2018 in the amount of P.852 million,

426


P163.338 million and P.051 million, respectively, rendering the

amounts reflected in the financial statements as of December 31,

2018 doubtful as to validity, accuracy and existence;

Non-reclassification and failure to present in the financial

statements the current portion of the Loans Payable – Domestic

Account as current liabilities in the amount of P1.084 million and

failure to capitalize and disclose the borrowing costs directly

attributable to the construction of a qualifying asset totalling

P7.542 million, thus, the financial statements were not fairly

presented.

Pilar Qualified

The Property, Plant and Equipment (PPE) Accounts with a total amount of P113.707 million as of December 31, 2018 are of doubtful validity and accuracy due to the absence of records and the Municipality’s continued failure to conduct physical inventory of its property; and,






Municipality.

San Benito Adverse Property, Plant and Equipment (PPE) and Depreciation Expense


are unreliable due to no annual physical count of PPE was

conducted and no Property Cards and Ledger Cards on PPE

were maintained by the General Service Officer/Municipal

Treasurer and Municipal Accountant’s Office, respectively;

Due from LGUs and Due from NGOs/POs accounts amounting to

P.632 million and P.060 million, respectively, cannot be

ascertained due to non-demand by LGU Placer from the

NGOs/POs and barangays on the liquidation and/or refund on the

funds transferred totaling P.692 million granted in calendar years

2016 and below;

Due to LGUs account was overstated due to non-submission of

liquidation reports by LGU Placer to LGU Bacuag and

Development Bank of the Philippines on the financial assistance

received for specific activities totaling P.030 million despite the

full utilization of the funds and incorrect use of accounts in receipt

and utilization thereof; and,

Guaranty/Security Deposits Payable account was understated

due to recording of retention money totaling P.402 million on the

Construction of Material Recovery Facility Phase 1 and

Construction of Placer Integrated Land Transportation and Food

Terminal Phase II as Other Payables instead of

Guaranty/Security Deposits Payable.

427


San Benito Adverse Cash Local Treasury accounts in the total amount of P2.786

million could not be established due to the absence of details

and/or failure of the Accounting Office to maintain Subsidiary

Ledger for each accountability of the Municipal Treasurer and

other Accountable Officers;

Cash in bank account balances in the Cashbook totaling P28.156

million did not reconcile with the balances in the General Ledger

of P31.543 million resulting in a variance of P3.387 million,

thereby casting doubts on the validity and existence of the

reported balance in the financial statements;

Cash in bank account balances in the Cashbook totaling P28.156

million did not reconcile with the balances in the General Ledger

of P31.543 million resulting in a variance of P3.387 million,

thereby casting doubts on the validity and existence of the

reported balance in the financial statements;

Bank Reconciliation Statements (BRS) of the Municipality were

not prepared and submitted to the Office of the Auditor all its bank

accounts on each fund which have a total cash balance of

P31.543 million as of December 31, 2018. Hence, casting doubts

as to the existence, accuracy and correctness of the recorded

Cash in Bank –Local Currency, Current Account balance;


management of supplies and materials such as: perpetual

inventory system, maintenance of supplies and materials stock

cards and ledger cards, preparation of supplies and materials

issued and actual physical count of inventories were still not

observed and complied;

Property, Plant and Equipment (PPE) accounts as of December

31, 2018 totaling P110.195 million are still of doubtful existence,

accuracy and validity due to continued non-maintenance of PPE

Cards, non-issuance of Acknowledgement Receipt for Equipment

(ARE) and failure of the Municipality to submit to COA not later

than January 31, 2019 the Report on Physical Count on PPE

(RPCPPE) due to laxity of the Inventory Committee to facilitate its

preparation and non-religious conduct of the required annual

physical count on Investment Property and Property, Plant and

Equipment;


Funds and Due to Other Funds as of December 31, 2018 did not

reconcile which showed a net difference of P1.111 million, thus,

casted doubt on the reliability of the balances of the said accounts


428


Special trust account established for the unexpended balance of

the LDRRMF in the amount of P.703 million was erroneously

recorded in the GF books instead of the Trust Fund books,

thereby not establishing a Trust Liability-DRRM account in the

Trust Fund books which affected the fair presentation of affected

accounts in the financial statements;

Four (4) Inter-Agency Payable accounts showed

abnormal/negative balances in the financial statements in the

total amount of P8.886 million in contrary to sound accounting

practice and principles dictating liabilities accounts to have a

normal credit balances, thus, reliability and accuracy of the

accounts cannot be ascertained which may affect the fairness of

presentation in the Financial Statements;

Balance of Prior Period Errors account under the Equity section

of the Consolidated Financial Position as of December 31, 2018

in the amount of P8.248 million was not supported with subsidiary

ledgers and detailed schedule, thus, casting doubts as to the

validity and reliability of the account balance and may affect the

fairness of presentation in the financial statements; and,

Dormant unliquidated cash advances amounting to P1.166

million that are long outstanding in the books for more than 10

years were not acted upon to facilitate in write-off thus resulting

in overstatement of the agency’s assets in the same amount.


Failure of the Municipality to keep records and submit a report on

the physical count of its Inventory and Property, Plant and

Equipment (PPE) in CY 2018 in the amount of P.053 million and

P42.762 million, respectively, rendering the amounts reflected in

the financial statements as of December 31, 2018 doubtful as to

validity, accuracy and existence; and,

Recording of the Level III Water System as part of the Property, Plant and Equipment (PPE) having a book value of P8.660 million as of December 31, 2018 despite the transfer of ownership to SMWD, render the account not fairly stated.

San Isidro Qualified

Dormant receivables and unliquidated cash advances amounting

to P.257 million and P3.385 million, respectively, that are long

outstanding in the books were not acted upon to facilitate in write-

off resulting in overstatement of the agency’s assets in the same

amount;

Prescribed policies and procedures for an effective control of

government properties such as maintenance of supplies and

materials stock cards and ledger cards, issuance of requisition

and issue slip, preparation of supplies and materials issued and

conduct of semi-annual physical count. Such condition likewise

indicates weakness of internal control over properties of the

Municipality which may affect the fair presentation of its financial

statements.

429


Receivables arising from disallowances/charges totaling P1.476

million which have not become final and executory was

erroneously recognized in the books of accounts, resulting in a

materially misstated financial statement affecting its fair

presentation;


Funds and Due to Other Funds as of December 31, 2018 did not

reconciled which showed a net difference of P2.344 million, thus,

casted doubt on the reliability of the balances of the said accounts



P143.074 million as of December 31, 2018 is still of doubtful

accuracy and validity due to continued non-maintenance of PPE

Cards and PPE Ledger Cards, non-issuance of Acknowledgment

Receipt for Equipment and the continued failure of the

Municipality to conduct the required annual physical inventory

count due to lack of planning and coordination with the Inventory

Committee;

Non-presentation of the current portion of the LGU’s Loans

Payable affected the assessment of its liquidity and solvency for

the settlement of its liabilities and distinguishing the net assets

that are continuously circulating as working capital from those

used in the entity’s long-term operations;

Bank balance of General Fund account as at year-end was

overstated by P.025 million due to unrecorded disbursement and

the reported bank balances of General Fund-LDRRMF and 20%

Local Development Fund as at year end were both understated

due to undeposited fund transfers of P.434 million and P.873

million, respectively, thereby affecting the reliability, accuracy,

and fair presentation which may mislead the users of the financial

statements;

Collections received by the Revenue Collection Clerks were still

not remitted daily to the Municipal Treasurer resulting in

accumulated unremitted cash in the maximum amount of P.497

million during the year, and delayed remittance and deposit

ranged from one to 36 days and one to 38 days, respectively and

Cash-Local Treasury is understated by P.278 million for failure to

account unremitted collections as of year-end thereby exposing

the funds to possible loss, theft or misappropriation and affecting

the timely recognition of income and cash accounts in the

financial statements;and,

Stale checks totaling P.034 million remained unadjusted in the books of accounts, thereby affecting the fair presentation of the cash account in the financial statements as of year-end.

430


Santa Monica

Qualified

Unreconciled difference of P1.140 million between the cash book

and ledger balances due to absence of periodic reconciliation

between the Accounting and Treasury Offices and the non-

preparation of subsidiary ledgers for each account and various

disbursements were not charged against its proper fund account

which caused the balances of General Fund-IRA and Special

Trust Fund to be understated by P.084 million and P.692 million,

respectively, while the LDRRMF-Regular Fund to be overstated

by P.776 million. Hence, accuracy and reliability of these account

balances in the financial statements cannot be ascertained;

Collections which averaged P.004 million were not remitted daily

to the Liquidating Officer thus incurred delays in remittances that

ranged from 1-149 working days, then the delays as well in the

deposit of collections resulted in the highest accumulated balance

of P.641 million during the year and incurred delays that ranged

from 1-41 working days and Cash-Local Treasury account is

understated by P.571 million for failure to account unremitted

collections as at year-end thereby exposing the funds to possible

loss, theft or misappropriation and affecting the timely recognition

of income and cash accounts in the financial statements;

Stale checks totaling P1.555 million remained unadjusted in the

books of accounts in contravention to Section 59 of the New

Government Accounting System (NGAS) Manual for LGUs,

Volume I resulting in the understatement of the Cash in Bank –

Local Currency, Current Account (LCCA) by the same amount,

and other appropriate liability and equity accounts;

Reported balances of P.985 million and P.191 million for Intra-

Agency reciprocal accounts of Due from Other Funds and Due to

Other Funds, respectively as of December 31, 2018 did not

reconcile which showed a net difference of P.794 million, thus

casted doubts on the accuracy and reliability of the said accounts

in the financial statements; and,

Special trust account established for the unexpended balance of

the LDRRMF in the amount of P2.786 million was erroneously

recorded in the General Fund books instead of the Trust Fund

books, thereby not establishing a Trust Liability-DRRM account

in the Trust Fund books which affected the fair presentation of


Sison Qualified

Non-reconciliation of the balances of the cashbooks and ledgers

and non-submission of bank reconciliation statements casting

doubt to the reliability of the cash and cash equivalents account

balance of P37.610 million as of December 31, 2018;

Failure by the Municipality to keep records and conduct physical

count of its Inventory, Investment Property, Property, Plant and

431


Equipment and Biological Assets Accounts in CY 2017 in the

amount of P2.889 million, P3 million, P159.195 million and

P1.016 million, respectively, rendering the amounts reflected in

the financial statements as of December 31, 2018 doubtful as to

validity, accuracy and existence; and,

Non-recognition of Subsidy to Other Funds and Trust Liability for

the unexpended CY 2018 LDRRMF misstating the equity and

liability accounts in the amount of P1.243 million.

Socorro Qualified

Inventories and Property, Plant and Equipment (PPE) accounts

amounting to P.696 million and P115.243 million or a total of

P115.939 million, as of December 31, 2018 are of doubtful

validity, accuracy and existence due to the continued failure by

the Municipality to keep records and conduct physical inventory

of its supplies and properties; and,






Municipality.

Tagana-an Qualified

Bank and book reconciling items totaling P.968 million and P.142

million, respectively, which reflected in the Bank Reconciliation

statements remained unadjusted for a long period of time due to

lack of supporting details and non-reconciliation of balances to

controlling account regularly or at year-end, thus affecting the

accuracy and completeness of Cash in Bank account; and,

Reconciliation of accounting and property records was not done

to support the accuracy and validity of the Property, Plant and

Equipment (PPE) accounts of P250 million as of December 31,

2018, thus, balances reflected in the financial statement was not

ascertained.

Tubod Qualified

Property, Plant and Equipment (PPE) and Depreciation Expense


are unreliable due to no report on the physical count of PPE was

submitted and no Property Cards on PPE were maintained by the

General Service Officer; and non-recognition of depreciation on

some depreciable PPE accounts; and,

Due from Other Funds and Due to Other Funds, and Subsidy from

Other Funds and Subsidy to Other Funds as reciprocal accounts

are doubtful due to non-reconciliation of their balances and

resulted to a variance of P2.459 million and P3.036 million,

respectively, or a total variance of P5.495 million.

432


Surigao del Sur Qualified

Collections from fees for services rendered by Eight (8) different

Community Hospitals of the Province totaling P251.702 million

were considered as Trust Fund, thus resulted to (a) non-inclusion

of cash collection in the GF cash account; (b) procured Property

Plant and Equipment (PPE) out of the cash collection were not

recorded in the General Fund (GF) account thus no depreciation

was provided on the PPE; and (c) resources were not adequately

safeguarded from abuse, mismanagement, fraud, error and

irregularities;

Property Plant and Equipment (PPE) totaling P190.660 million

procured out of collections from different community hospitals

were not recorded in the books under General Fund, thus resulted

to understatement of PPE and understatement of Government

Equity accounts by the same amount; and,

Due to BIR of P4.672 million is erroneously presented due to non-

recording in the books of accounts the payment to BIR for

remittance of taxes withheld from the contractor during the year,

thus, resulted to an overstatement of Due to BIR and Cash in

Bank accounts by P3.422 million.

Cities

Bislig City Qualified

Receivable accounts totaling P9.144 million have been

outstanding in the books for over ten years due to the absence of

documents to prove their validity and information as to the details

of the account balances; and,

Land account under the General Fund and Special Education

Fund totaling P34.370 million could not be ascertained due to the

absence of evidence to establish ownership and the noted

discrepancy amounting to P2.750 million between the balance in

the General Ledger and the Report on the Physical Count of

Property, Plant and Equipment.

Tandag City Qualified

Setting-up of Real Property Tax (RPT) and Special Education Tax

(SET) Receivables were based on estimates submitted by the

Treasurer’s Office instead of the Certified List of the Taxpayers

(CLT). As a result, delinquent RPT and SET Receivables,

inclusive of interests per CLT does not reconcile with the

balances of RPT and SET Receivables as presented in the

Financial Statements as of December 31, 2018 with a

discrepancy amounting to P98.955 million; and,

Acquisition of supplies and materials in the amount of P36.044

million was indirectly treated as outright expense, thus weaken

the City’s internal control and affected the fair presentation of

appropriate inventory accounts and its related expenses.

433


Municipalities

Barobo Qualified

Failure of the management to conduct the annual physical

inventory of PPE, non-preparation and submission of the report


(RPCPPE), and absence of pertinent information on the items

comprising the PPE accounts reported at P106.542 million as of


Failure to submit the 581 Liquidation Reports (LRs) amounting to

P60.554 million together with the supporting documents, which

precluded the Audit Team to conduct timely audit.

Bayabas Qualified

Not setting up Real Property Tax (RPT) and Special Education

Tax (SET) at the beginning of the year, thus understated both the

asset (receivables account) and liabilities (deferred accounts).

Cagwait Qualified

Non-reconciliation of accounting records with the submitted

Report of Physical Count of PPE (RPCPPE) casted doubt as to

the reasonableness of the P228.005 million PPE account balance

reported in the Statement of Financial Position.

Cantilan Qualified


Report of Physical Count of PPE (RPCPPE) casted doubt as to

the reasonableness of the P213.700 million PPE account balance

reported in the Statement of Financial Position.

Carmen Qualified

Due to the failure of the agency to prepare and submit the

reconciliation of the result of the inventory count with that of the

property and accounting records casting doubt on the correctness

of the Property, Plant and Equipment Account amounting to

P49.456 million as of December 31, 2018.

Carrascal Unqualified

Cortes Qualified

Failure to submit the required Report on the Physical Count of

Property, Plant and Equipment (RPCPPE) due to the non-

maintenance of property cards, thus precluded the Audit Team

from verifying the existence, validity and reliability of the reported

Property, Plant and Equipment (PPE) valued at P107,009 million.

Hinatuan Qualified

Due to inability of the management to submit the Report on the


totalling P177.721 million, thus, the accuracy and existence the

reported property, plant and equipment cannot be ascertained.

Lanuza Qualified


Report of Physical Count of PPE (RPCPPE) which casted doubt

as to the reasonableness of the P136.630 million PPE account

balance reported in the Statement of Financial Position.

434


Lianga Qualified

Real Property Tax (RPT) and special education tax (SET)

receivables amounting to P.892 million and P.944 million

respectively, as of December 31, 2018 could not be ascertained

due to the absence of the certified list of the taxpayers; and,

Property, Plant and Equipment has an unreconciled balance of

P26.307 million with its schedule casting doubt on the accuracy,

validity and reliability of the amounts presented.

Lingig Qualified

Due to inability of the management to submit the Report on the


totalling P141.786 million, thus the accuracy, validity and

existence of these properties cannot be ascertained.

Madrid Qualified

Due to the inability of the management to provide a complete and

adequate records/reports and the absence of inventory taking,

hence, the existence, reliability and completeness of Property,

Plant and Equipment in the amount of P114.816 million as of

year-end could not be ascertained.

Marihatag Qualified

Property, Plant and Equipment which are stated in the Statement

of Financial Position at a carrying amount of P163.696 million as

of December 31, 2018 could not be validated because of the

failure of the agency to conduct a physical count and submit the

required Report on the Physical Count of Property, Plant and

Equipment (RPCPPE), thus precluded the Audit Team from

verifying the existence, validity and reliability of the reported

Property, Plant and Equipment (PPE).

San Agustin Qualified

Inability of the Municipality to reconcile the Report on Physical

Count of PPE with the accounting records casted doubt on the

correctness, existence and reliability of Property, Plant and

Equipment (PPE) account balances totaling to P156.701 million

at December 31, 2018.

San Miguel Qualified

Property, Plant and Equipment valued at P231.714 million as of

December 31, 2018 cannot be ascertained as to its existence,

reliability and completeness due to the inadequacy of

records/reports and absence of physical inventory-taking;

Recorded Real Property Taxes and Special Education Tax

receivables amounting to P14.939 million and P16.845 million,

respectively, as of December 31, 2018 were unreliable due to the

absence of the certified list of taxpayers with the amount due and

collectibles for the period.

Tagbina Qualified Failure to conduct physical inventory count on all of its supplies

and inventories on hand due to the non-establishment of the

Inventory Committee, and the non-submission of SSMI before

recording expenses which resulted to doubtful balances of

Supplies and Inventory accounts totaling P2.685 million;and,

435


RPT and SET Receivables for the year were established without

supporting the certified list of real property tax receivable from the

MTO which could affect the correctness and/or accuracy of

reporting of these receivables account in the financial statements

Tago Qualified Inability of the management to conduct the reconciliation of the

result of the inventory count of PPE with that of the property and

accounting records; and,


receivables as of December 31, 2018, were unreliable due to the

absence of the certified list of taxpayers with the amount due and

collectibles for the period.

Dinagat Islands Qualified Property, Plant and Equipment (PPE) account balance of


ascertained due to non-reconciliation of the property and the

accounting records and the non-reconciliation of accounting and

property records, rendered the existence and valuation of the

Inventories account totaling P60.296 million doubtful.

Municipalities

Basilisa (Rizal) Qualified Due to the failure of the municipal accountant to submit Bank

Reconciliation Statements, Cash in Bank-LCCA totaling P85.577

million could not be verified, thereby rendering unreliable cash

account and precluding the auditor in obtaining sufficient

appropriate audit evidence on the existence and accuracy of the

cash in bank accounts; and,

Due from Other Funds and Due to Other Funds accounts, which

are reciprocal in nature, showed a net difference of (P.900

million), resulted to unreliable and misleading information on the

financial position of the municipality.

Cagdianao Qualified Non-recyclable materials and special wastes of the three (3)

barangays of were not collected by the Municipality, thus

protection of public health and the environment could not be

assured;

Collections of solid wastes practiced by the Municipality is not

compliant to the standards set forth under Section 23(a) of R.A.

9003 since garbage collectors were not provided with protective

equipment and supplies thereby exposing them to various health

hazards;

PhilHealth program amounting to P1.200 million which is

considered not gender-responsive and gender-sensitive was

erroneously charged to GAD Fund, thereby defeating the purpose

for which the fund was intended.

436


Dinagat Qualified Property, Plant and Equipment (PPE) accounts of P155.723

million as of December 31, 2018 could not be ascertained as to

existence and valuation due to non-conduct of complete physical

count and the non-reconciliation of property and accounting

records due to the absence of property and ledger cards and

other property records;

Failure to compute and provide for the depreciation of depreciable

Property, Plant and Equipment (PPE) totaling P40.669 million for

CY 2018 thereby resulting to the understatement of the

depreciation expense and its Accumulated Depreciation accounts

and correspondingly overstatement of its Asset and Government

Equity accounts; and,

Various receivables totaling P2.618 million remained outstanding

in the books for more than five (5) years due to the failure of the

management to exert efforts to enforce collection.

Libjo (Albor) Qualified Property, Plant and Equipment (PPE) accounts of P17.472 million

could not be ascertained as to existence and valuation due to

incomplete conduct of physical count and the non-reconciliation

of property and accounting records due to the absence of

property and ledger cards and other property records, rendering

the Property, Plant and Equipment account presented in the

Statement of Financial Position to be unreliable.

Loreto Qualified Due to the failure of the Municipal Accountant - Designate to

submit Bank Reconciliation Statements, Cash in Bank-LCCA

totaling P124.641 million could not be verified, thereby rendering

unreliable cash account and precluding the auditor in obtaining

sufficient appropriate audit evidence on the existence and

accuracy of the cash in bank accounts, and any deficiency that

may be found in the verification thereof could not be immediately

communicated to Management for appropriate action; and,


are reciprocal in nature, showed a net difference of (P59.967

million).

San Jose Qualified Fund transfers to various Non-Governmental Organizations

(NGOs)/Peoples Organizations (POs) amounting to P2.773

million remained unliquidated as of December 31, 2018 due to

non-compliance of the Municipality with the provisions of COA

Circular No. 2007-001 and COA Circular 96-003 dated October

25, 2007 and February 27, 1996, respectively; thus, the balance

of the account Due from NGOs/POs appearing in the statement

of financial position is unreliable; and,


are reciprocal in nature, showed a net difference of

(P2.415million), resulted to unreliable and misleading information

on the financial position of the municipality.

437


Tubajon Qualified The reliability of the net book value of Property, Plant and

Equipment (PPE) accounts of P101.354 million as of December

31, 2018 which could not be ascertained as to existence and

valuation due to non-conduct of complete physical count and the

non-reconciliation of property and accounting records due to the

absence of property and ledger cards and other property records

Sub-Region XVI - Negros Island Region

Negros Occidental

Qualifie

Failure to conduct physical inventory its Property, Plant and

Equipment (PPE) in the amount of P6.991 billion, Investment

Property of P32,439 million and Biological Assets of P114.553

million.

Municipalities

Bacolod City Qualified Failure to update by the General Services Officer its records in

Property, Plant and Equipment (PPE) cards, hence there was no

reconciliation of account balances shown in the Report on

Physical Count of PPE (RPCPPE) at P753.732 million and in the

financial statements and subsidiary ledgers maintained in the

Office of City Accountant amounting to P869.762 million 515.14,

thus, rendering the correctness of PPE accounts balances as of

December 31, 2018 doubtful;

Construction in Progress (CIP) balance of P377.741 million per

records of the City Accounting Office (CAO) differs from the

amount of CIP projects reported by the City Engineer’s Office

(CEO) of P88.655 million due to absence of regular reconciliation

between the records of the two concerned offices;

Advances to Officers and Employees and Special Disbursing

Officers have accumulated to P41.657 million as of December

31, 2018 due to continued failure of the City officials and

employees to liquidate the amount granted;

Financial assistance totaling P16.098 million granted to 45

NGOs/POs remained unliquidated as of December 31, 2018;

Financial assistance totaling P5.695 million granted to five leagues/federations in prior years 2007 to 2017 still remained outstanding as of December 31, 2018;

Fund transfers/financial assistance to barangays totaling P5,880 million for CY 2018 and prior years’ fund transfers of P5.416 million remained unliquidated as of December 31, 2018; and,

Management has still not implemented our CY 2012 recommendation to reconcile the Inventories totaling P149.592 million as of December 31, 2018 making the inventory figures doubtful.

438


Bago City Qualified Property, Plant and Equipment accounts totaling P989.615

million could not be ascertained due to the absence of complete

physical inventory report and not updated property, plant and

equipment ledger cards and property cards;

Cash-in-Bank, Local Currency, Current Account balance of all

funds as of December 31, 2018 totaling P278.186 million cannot

be ascertained due to non-submission of the monthly bank

reconciliation statements for the month of December, 2018 of

some bank account; and,

Records submitted by the Acting City Treasurer and the City

Accountant on the Real Property Tax Receivable account

showed a difference of P31.505 million, thereby casting doubt on

the correctness of the balance shown in the financial statements.

Cadiz City Qualified Failure to conduct physical inventory of its Property, Plant and

Equipment (PPE) totaling P2.088 billion. The absence of property

cards on their huge properties aggravated the difficulty of the

Audit Team to conduct alternative audit procedures to ascertain

the validity of the PPE accounts balances.

Escalante City Qualified Failure of the City to reconcile the Inventory Report of Property,

Plant and Equipment (PPE) with the general ledger of the

Accounting Office which resulted to a difference of P41.481

billion.

Himamaylan City Qualified Unreconciled difference of P46.352 million between the Property,

Plant and Equipment (PPE) account balance per books and the

Report on the Physical Count of PPE for CY 2018 due to the

failure of the Accounting and the General Services Office to

complete the reconciliation of their records; and,

Advances to Officers and Employees for travel and other

purposes totaling P3.132 million remained unliquidated as of

December 31, 2018.

Kabankalan City Qualified Failure of the agency to conduct a complete physical inventory of

its Property, Plant and Equipment, Investment Property and

Biological Assets;

Non-settlements of unliquidated cash advances; and,

Non-disposal of its unserviceable properties.

La Carlota City Qualified Physical count Property, Plant and Equipment (PPE) with a total

value of P775.142 million as of December 31, 2018 were not

conducted and absence of updated and regularly reconciled

PPE Ledger and Property Cards.

439


Sagay City Qualified Failure to conduct a complete physical inventory of its Property,

Plant and Equipment (PPE) amounting to P1.517 billion as of

December 31, 2018, inadequacy of accounting records and the

unreconciled PPE ledger and property cards, which affected the

fair presentation of the financial statements.

San Carlos City Qualified No adjustments were taken up by the City to close Special

Education Tax (SET) Receivable and the corresponding Deferred

SET Income after actual SET Income of P64,530 million were

recorded in the books.

Silay City Qualified Variance of P441.139 million between the Accounting and the

General Service records due to non-reconciliation of records on

the Property, Plant and Equipment. The accuracy and the validity

of the reported PPE balances in the financial statements could

not be ascertained.

Sipalay City Qualified Difference of P16.758 million between the reciprocal accounts

Due from Other Funds and Due to Other Funds; and,

Discrepancies between the physical count reports and the

carrying balance as of December 31, 2018 which substantially

understated the Property, Plant and Equipment account by

P124.686 million.

Talisay City Qualified Possible effect of any adjustments which might have been made

had the agency conducted complete physical inventory of its

properties valued at P844.025 million and had reconciliation

been undertaken by the General Services Office (GSO) and the

Accounting Office and resolved the discrepancy of P8.427 million

between the general and property cards on Transportation

Equipment valued at P100.195 million as against the Inventory

Report of the General Services Office (GSO) amounting to

P91.768 million.

Victorias City

Qualified

Variance of P177.477 million between the Accounting and

General Services Office records due to non-reconciliation and

incomplete physical inventory of property, plant and equipment;

and,

Unliquidated cash advances to officers and employees totaling

P25.322 million consisting of P23.700 million unliquidated cash

advance from Confidential Fund and P1.622 million to officers

and employees rendered the related accounts unreliable.

440


Municipalities

Binalbagan Qualified Failure to conduct physical inventory of all its properties and to


Equipment valued in the books at P413.888 million for CY; and,



December 31, 2018.

Calatrava Qualified Non-recognition of Real Property Tax/Special Education Tax

(RPT/SET) Receivable and Deferred RPT/SET Income totalling

P98.151 million.

Candoni Qualified Failure of the agency to conduct a complete physical inventory of

its Property, Plant and Equipment and Inventories; and,

Non-settlements of unliquidated the cash advances.

Cauayan Qualified Unreconciled balances of Cash in Local Treasury account by

P26.161 million when compared with balances per cash book;

and,

Non submission of annual physical inventory report which

rendered Property, Plant and Equipment (PPE) account with

carrying value of P327.165 million doubtful.

Don Salvador Benedicto

Management Letter Failure to submit the year end Financial Statements of the General Fund.

Enrique B. Magalona

Qualified Absence of physical inventory count of its PPE totaling P211.094

million and failure to submit the RPCPPE;

Unliquidated Advances to Officers and Employees totaling

P6.943 million, consisting of P 5.352 million cash advances

charged to Confidential Fund and P1.591 million pertains to

advances to officers and employees; and,

Non-preparation of the monthly bank reconciliation statement for

all funds rendered the related acccounts unreliable.

Hinigaran Qualified Unreconciled Property, Plant and Equipment (PPE) account

balance per books of P215.570 million for CY 2018 due to the

failure of the Accounting and the General Services Office to

complete the reconciliation of their records; and,



December 31, 2018.

441


Hinoba-an Qualified “Due from Other Funds” and “Due to Other Funds” accounts amounting to P3.789 million and P7.523 million were doubtful due to a variance of P3.733 million which indicated errors in the recording of the transactions; and

Property, Plant and Equipment (PPE) accounts could not be fully ascertained due to the failure of the Municipality to reconcile the difference of P278.7 million between the accounting and property records.

Ilog Qualified Failure of the agency to conduct physical count of inventories of

its Property, Plant and Equipment; and,

Non-settlements of unliquidated cash advances.

Isabela Qualified Non submission of the Report of the Physical Count of Property,

Plant and Equipment (RPCPPE) for CYs 2017 and 2018 because

of the failure to conduct the required physical inventory count of

its property, plant and equipment amounting to P P223.180

million.

La Castellana Qualified Non submission of the Report of the Physical Count of Property,



its property, plant and equipment amounting to P39.626 million;

and,

Failure to record Public Infrastructure from completed projects

from grants.

Manapla Qualified Failure of the Municipality to conduct physical count of its

property, plant and equipment valued at P131.384 million

rendering the accounts reflected in the financial statements

unreliable.

Moises Padilla Qualified Non submission of the Report of the Physical Count of Property,



its property, plant and equipment amounting to P247.724 million.

Murcia Qualified Failure of the Municipality to conduct complete physical count of

its property, plant and equipment (PPE) with a net book value of


Unliquidated Advances to Officers and Employees totaling

P11.821 million, consisting of P5.737 million unliquidated cash

advance from Confidential Fund and P6.084 million to officers

and employees.

Pontevedra Qualified Physical count of the Property, Plant and Equipment (PPE)

valued at P215.022 million as of December 31, 2018 were not

conducted and absence of updated and regularly reconciled PPE

Ledger and Property Cards.

442


Pulupandan Qualified Property, Plant and Equipment account amounting to P44.215


the failure of the municipality to conduct complete physical

inventory;

Depreciation for Land Improvements, Water Supply System,

Buildings and Other Structures, Machinery and Equipment,

Transportation Equipment, and Furniture, Fixtures and Books

with a total cost of P39.364 million were not recorded in the

books; and,

Cash in Bank, Local Currency totaling P69.582 million as of

December 31, 2018 cannot be established due to the failure of

the OIC-Municipal Accountant to submit the Month Bank

Reconciliation Statements for CY 2018.

San Enrique Qualified Physical count Property, Plant and Equipment (PPE) with a total

value of P84.196 million as of December 31, 2018 were not

conducted and absence of updated and regularly reconciled PPE

Ledger and Property Cards.

Toboso Qualified Failure to conduct the annual physical count of property, plant and

equipment (PPE) totaling P302.060 million, thus the reported

gross carrying value of PPE was unreliable.

Valladolid Qualified Property, Plant and Equipment account amounting to P104.947


the failure of the municipality to conduct complete physical

inventory;

Cash in Treasury and Cash in Bank per Treasury/Cashier’s

Cashbook for the three funds do not reconcile with the balances

per General Ledger for the year ended December 31, 2018, with

a difference of P.266 million and P46.538 million, respectively;

and,

RPT and SET Receivables were still not booked up in CY 2018,

thus, rendering the accuracy of the accounts doubtful at year end

at P10.767 million and P.232 million, respectively.

Negros Oriental Qualified Cash in Bank-Local Currency-Current account balance amounting to P3.794 billion was not fairly presented due to the unreconciled difference of P49,014 million between the books and the bank;

Receivables account amounting to P186.467 millionwas overstated because P13.458 million of which had been non-moving or dormant for 10 to more than 20 years without provision for the allowance for impairment;

Due from Local Government Units account balance of P32.572 million showed a discrepancy of P10.384 million upon confirmation from cities and municipalities;

443


Results of the physical count of properties in CYs 2014 to 2017 were not yet reconciled with the accounting records while no physical count was conducted in CY 2018 of the inventory and movable property, plant and equipment accounts valued at P260.342 millionand P951.049 million 950.02, respectively;

Reported balance of the Breeding Stocks account amounting to

P13.617 million could not be ascertained due to the absence of

supporting schedules; and,

Materials amounting to P6.160 million which were distributed to

various beneficiaries in CY 2010 were still recorded in the

Construction in Progress account and motor vehicles costing

P27.328 million which were donated to other local government

units were not yet dropped from the books.

Cities

Bais City Qualified Cash advances amounting to P35.658 million remained

unliquidated for at least 31 days to almost eight years, thereby

overstating the assets and equity;

Road Networks and CIP-Infrastructure Assets accounts were

overstated by P7.014 million since declogging of canals were

erroneously capitalized instead of recording these as outright

expenses;

Movable PPE and Inventories remained unreliable due to

discrepancies between the physical count and the book balances

amounting to P13.949 million and P57.353 million, respectively;

and,

Current liabilities and equity are overstated by payables

amounting to P8.609 million which have been outstanding for two

years to over 10 years and have not been reverted to the surplus

account.

Bayawan City Qualified Property, Plant and Equipment (PPE) accounts valued at P1.743 billion could not be ascertained because the conduct of the physical count of movable properties was not completed and the property cards maintained by the City General Services Office (CGSO) did not reconcile with the equipment ledger cards kept by the City Accountant’s Office (CAO);

Land account was questionable because real properties amounting to P16.194 million were not covered with Transfer Certificates of Title;

Interests on borrowings for the purchase of heavy equipment and implementation of infrastructure projects which were already completed amounting to P3.638 million and P1.892 million, respectively, were capitalized which resulted in the overstatement of asset and equity accounts; and,

444


The year-end balances of Loans Receivables and Other Payable accounts were misstated by P1.140 million because Management recorded the transactions even if the contracts for the granting of loans to Non-Government Organizations/People’s Organizations (NGOs/POs) were not yet perfected.

Canlaon City Qualified Variance of P48.814 million between the physical count of

movable assets and the accounting records, rendering the book

balance of movable assets of P146.472 million unreliable;

Neglect to provide depreciation on depreciable assets amounting

to P701.860 million; and,

Failure of officers and employees to liquidate cash advances

amounting to P11.707 million understated expenses and

overstated assets and equity by an undetermined amount.

Dumaguete City Qualified Property, Plant and Equipment (PPE) valued at P11.537 million were recorded in the books using incorrect accounts;

Nine parcels of land of undetermined value donated by private individuals and/or group of individuals to the City were not taken up in the books, thereby, understating both the asset and equity accounts as of December 31, 2018;

PPE accounts amounting to P1.453 billion remained doubtful because the PPE accounts amounting to P41.388 million were yet identified, accounting records did not agree with the General Service Office (GSO) records, and the conduct of physical count of PPE was not completed;

Land account amounting to P59.431 million could not be ascertained while its absolute ownership over these lots could not be established due to lack of supporting documents; and,

Due from Non-Governmental Organizations/People’s Organizations (NGOs/POs) and Due to Other National Government Agencies (NGAs) accounts amounting to P50.548 million and P61.249 million, respectively, were unreliable due to lack of sufficient details and supporting records.

Guihulngan City Qualified Movable properties amounting to P129.638 million or 15.35% of

total Properties, Plant and Equipment could not be confirmed due

to the failure of the City to complete the physical inventory.

Tanjay City Qualified Discrepancies between the physical count and book balances of

Property, Plant and Equipment amounting to P37.447 million

which remained unreconciled;

Construction and heavy equipment and agricultural and forestry

equipment accounts were understated by P16.534 million and

P2.597 million, respectively, as a result of double recording,

erroneous classification and non-recognition of existing

445


equipment, notwithstanding the questionable existence of

equipment with a total cost of P3.845 million which were not

located during the ocular inspection;

Medicines and medical supplies totaling P11.511 million were

directly recorded as expenses despite the existence of

unconsumed inventories, thereby overstating expenses and

understating inventories;

Various asset accounts are understated while the Construction in

Progress (CIP) is overstated by P300.470 million due to the

neglect to transfer completed projects from CIP to the asset

accounts;

Other Public Infrastructures are overstated by P30.161 million for

payments made by the LGU to the Local Water Utilities

Administration for the acquisition of Tanjay Water District (TWD)

which did not materialize as the LGU has not secured its

ownership thereof nor taken over its operation; and,

Unserviceable properties amounting to P15.730 million are still

recorded in the books, thus overstating the balance of movable

properties.

Municipalities

Amlan Qualified Cash Local Treasury account per books and per cashbooks of

the Municipal Treasurer reflected a substantial difference of

P4.550 million, thereby, rendering the account balance at year

end unreliable; and,

Movable Property, Plant and Equipment (PPE) with a net book

value of P30.205 million as of December 31, 2018 remained

unreliable due to the inability of the Inventory Committee to

complete and reconcile the results of the physical count with the

accounting records resulting in discrepancies amounting to

P12.948 million.

Ayungon

Qualified Real Property/Special Education Tax Receivables were

recognized using the Assessment Roll instead of the Certified List

of Taxpayers and Amounts Due and Collectible resulted in the

understatement of the said receivables by P19.906 million; and,

Failure to complete the conduct of physical inventory of the items

booked under property, plant and equipment accounts, thus the

existence and accuracy of its movable properties valued at

P39.271 million, which comprises 9% of total assets as at year-

end, could not be ascertained.

446


Bacong Modified/ Qualified

Unreconciled balance of Real Property Tax (RPT) Receivable

and Special Education Tax (SET) Receivable as of December 31,

2018 between the records of the Municipal Accountant’s Office

and Municipal Treasurer’s Office of P18.359 million;

Expenses related to post-planting maintenance totaling P372

million were erroneously capitalized to account Plants and Trees

instead of Maintenance and Other Operating Expenses (MOOE);

Failure to record in the books of accounts nine parcels of land

amounting to P19.737 million, thus, understating the asset and

equity accounts;

Ownership of land valued at P2,944 million remained unreliable

because these were not covered by Transfer Certificate of

Title/Original Certificates of Title (TCT/OCT) in the name of the

Municipality;

Adjustment amounting to P10.363 million crediting the Land

account was taken up in the books without submitting the Journal

Entry Vouchers (JEVs) together with the complete supporting

documents to the Auditor for verification despite several requests;

and,

Movable Property, Plant and Equipment (PPE) valued at P28.349

million (net of accumulated depreciation), which comprises

21.94% of its total PPE and 8.40% of its total assets as at

December 31, 2018, remained unreliable.

Basay Qualified Property, Plant and Equipment (PPE) valued at P124.366 million as of December 31, 2018 could not be relied upon because no Inventory Committee was created to conduct a physical count of movable properties amounting to P24.196 million, thus, the required reconciliation between the results of the actual count and the related accounting and property records could not be done; and,

Cash advances amounting to P4.607 million still remained unsettled as of December 31, 2018.

Bindoy Qualified Failure to complete the conduct of physical inventory of the items

booked under the property, plant and equipment accounts, thus

the existence and accuracy of movable properties valued at

P21.298 million which comprises 6% of total assets as at year-

end, could not be ascertained; and,

Real Property Tax Receivables and Special Education Tax

Receivables were not recognized base on Certified List of

Taxpayers and Amounts Due and Collectible, thus, resulted in the

understatement of the said receivables by P68.160 million as of

December 31, 2018.

447


Dauin Qualified Real Property Tax (RPT) Receivable and Special Education Tax

(SET) Receivable as of December 31, 2018, with a difference of

P5.327 million between the records of the Municipal Accounting

Office (MAO) and Municipal Treasurer’s Office (MTO),could not

be reconciled because the MAO and MTO did not maintain

subsidiary ledgers and RPT Account Registers/Taxpayer’s index

cards, respectively;

Inter-agency and Other Receivables account balances totaling

P.848 million had been dormant for over 10 years, yet no

allowance for impairment of receivables was recognized; and,

Movable Property, Plant and Equipment account balances as of

December 31, 2018 valued at P23.529 million which comprised

23.03% of its total PPE and 8.21% of its total assets could not be

ascertained because the Inventory Committee did not conduct

physical count and the Municipal Treasurer did not maintain

property cards.

Jimalalud Qualified Breeding Stocks and Road Networks are understated by P.966

million and P6.665 million, respectively, due to the neglect of the

accountant to recognize assets purchased out of trust funds; and,

Movable PPE accounts valued at P17.889 million comprising

10.72% of total assets could not be ascertained because a

physical count and reconciliation with book balances was not

done.

La Libertad Qualified Thirty-three parcels of land owned by the municipality were not recorded in the books nor in the annual inventory report of PPE, thereby understating the municipality’s assets by at least P3.173 million;

Failure to account for disbursements totaling P10.834 million, which were not supported with duly approved disbursement vouchers and supporting documents and which were unduly recorded as Accounts Receivable, thereby resulting in the overstatement of the said account and impairing the accuracy of the Cash in Bank balances presented in the financial statements; and,

Movable PPE accounts valued at P39.421 million which comprises 5.77% of total assets as of December 31, 2018, cannot be ascertained since the inventory committee was not able to conduct the physical count and prepare the corresponding report.

Mabinay

Qualified

Real Property/Special Education Tax Receivables were


of Taxpayers and Amounts Due and Collectible, resulted in the

understatement of the said receivables by P35.654 million; and,

448





P44.845 million, which comprises 7% of total assets as at year-


Manjuyod Qualified Real Property/Special Education Tax Receivables were


of Taxpayers and Amounts Due and Collectible resulted in the

understatement of the said receivables by P1.075 million;




P43.507 million which comprises 9% of total assets as at year-


Pamplona Modified/ Qualified

Inventory of Breeding Stocks and the prevailing market price for

each item as of reporting date was not submitted by the Local

Agriculturist to the Municipal Accountant, hence, the existence

and condition of the Biological Assets with an acquisition cost of

P2.394 million could not be ascertained and was not fairly

presented in the financial statement;

Inter-agency and Other Receivables account balances

amounting to P1.151 million had been dormant for over 10 years,

yet no allowance for impairment of receivables was recognized;

and,

Movable Property, Plant and Equipment (PPE) totaling P20.177

million as at December 31, 2018 could not be relied upon

because the Inventory Committee did not complete the physical

count.

San Jose Qualified Movable Property, Plant and Equipment (PPE) totaling P22.417 million as at December 31, 2018 still could not be fully relied upon because the existence and condition of the movable PPE could not be ascertained since the important data, such as the balance per card and on hand per count were not indicated in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Unserviceable properties with acquisition costs and net book values totaling at least P1.571 million and P.448 million, respectively, were not yet disposed;

Inventory of breeding stocks and the prevailing market price for each item as of reporting date was not submitted by the Local Agriculturist to the Municipal Accountant, hence, the biological assets account balance of P.318 million is not;

449


Receivables pertaining to real property and special education taxes totaling P2.943 million and the related deferred credit accounts is unreliable because the setting up of these accounts was not based on a certified list of tax payers resulting in a difference of P1.636 million against the certified list of delinquent real property taxes; and,

Unexpended/unobligated balance of the Quick Relief Fund (QRF) and the Local Disaster Risk Reduction and Management Fund (LDRRMF) Maintenance and Other Operating Expenses (MOOE) amounting to P1.591 million was not transferred to the Special Trust Fund (STF) under the account “Trust Liability-DRRMF” pending reconciliation of balances with the records of the Municipal Budget Officer, thereby, understating the expenses in the General Fund and the liabilities in the Trust Fund as of reporting date.

Santa Catalina Qualified Property, Plant and Equipment (PPE) account valued at P304.162 million as of December 31, 2018 could not be relied upon because the Inventory Committee did not conduct a physical inventory count of the movable properties amounting to P75.708 million, thus, the required reconciliation between the results of the actual count and the related accounting and property records could not be done;

Interests on borrowings for the on-going construction of two infrastructure projects located in Barangay Buenavista amounting to P.516 million were not capitalized which resulted in the understatement of asset and equity accounts;

Twenty-five stale checks totaling P.094 million aged seven to 50 months were still reported as outstanding checks in the bank reconciliation statements (BRS), thereby, understating the Cash in Bank and Accounts Payable accounts;

Nine general ledger accounts totaling P6.007 million temporarily lodged in the “For ID” accounts during the initial roll out of the Electronic New Government Accounting System (e-NGAS) in July 2006 remained unidentified as of December 31, 2018; and

Assets costing P33.308 million acquired prior to calendar year

2002 and carried in the books beyond their estimated useful lives

were not fully depreciated, thus, overstating the asset and equity

accounts.

Siaton Qualified Property, Plant and Equipment (PPE) valued at P231,664 millionas of December 31, 2018 could not be relied upon because no Inventory Committee was created to conduct a physical count of movable properties amounting to P88.139 million;

Ownership of parcels of land costing P8.599 million could not be fully validated because these lots were not covered by Transfer Certificates of Title; and,

Cash advances amounting to P.709 million included past due accounts of P.136 million which still remained unsettled as of December 31, 2019.

450


Sibulan Qualified Basic and Special Education Tax (SET) Receivables established

at the beginning of the year were based on estimates resulting in

zero balances in the RPT Receivables and Deferred RPT Income

accounts at year end, thus, understating these accounts by

approximately P34.508 million; and,

Movable Property, Plant and Equipment (PPE) totaling P49.380

million as at December 31, 2018 could not be fully relied upon

because the Inventory Committee had not completed the physical

count, thus, the existence and condition of the movable PPE

could not be ascertained.

Tayasan Qualified Difference of P10.344 million exists between the balance per

bank statements and book balance for Cash in Bank as of

December 31, 2018 which remains unreconciled as a result of the

failure to prepare bank reconciliation statements;

Movable PPE accounts valued at P43.776 million which

comprises 11.39% of total assets as of December 31, 2018 could

not be ascertained because a physical count and reconciliation

with book balances were not done; and,

Receivables are understated by an undetermined amount

because no receivables from Real Property Tax/Special

Education Tax were recognized in the books due to the neglect

of the Municipal Assessor to prepare the Assessment Roll.

Valencia Qualified Movable Property, Plant and Equipment (PPE) accounts valued

at P47.844 million which comprises 11.34% of its PPE or 4.846%

of its total assets could not be ascertained because the physical

inventory count did not reconcile with the accounting records, and

property cards were not maintained;

Inter-agency and Other Receivables account balances totaling

P2.212 million had been dormant for over 10 years, yet no

allowance for impairment of receivables was recognized;


December 31, 2018;

Breeding Stocks and other Biological Assets valued at P.610

million could not be ascertained because the Municipal

Agriculturist did not submit to the Municipal Accountant the

inventory report including the prevailing market price of each

stock; and,

Land account amounting to P68.567 million or 6.95% of its total

assets could not be established due to lack of supporting

documents.

451


Vallehermoso Qualified Movable PPE accounts valued P36.799 million, which comprises 13.69% of total assets as of December 31, 2018, cannot be ascertained since the inventory committee was not able to complete the physical count and prepare the corresponding report; and,

Several parcels of land with a total market value of P34.020

million remained unrecorded in the books of accounts, thereby

understating the assets presented in the financial statements.

Zamboanguita Qualified Real Property Tax (RPT) Receivable and Special Education Tax

(SET) Receivable as of December 31, 2018 showed a difference

of P4.263 million per records of the Municipal Accountant’s Office

and Municipal Treasurer’s Office, which could not be reconciled

because the Municipal Accountant did not maintain subsidiary

ledgers;

Breeding Stocks and other Biological Assets valued at P3.614

million could not be ascertained because the Municipal

Agriculturist did not submit to the Municipal Accountant the

inventory report including the prevailing market price of each

stock; and,

Movable property, plant and equipment account balances as of

December 31, 2018 valued at P20.013 million (net of

accumulated depreciation) which comprised 12.69% of its total

PPE and 7.68% of its total assets could not be ascertained

because the Inventory Committee did not conduct physical count

and the Municipal Treasurer did not maintain property cards.

Autonomous Region in Muslim Mindanao (ARMM)

Basilan Unqualified

Cities

Isabela City Qualified Non-preparation of monthly bank reconciliation statements (BRS)

by the City Accountant thereby casting a doubt on the accuracy

of the Cash in Bank Accounts as of December 31, 2018


Unreconciled Cash in Bank – Local Currency, Current account

between the Accounting and the Treasury resulting to the net

variance of (P3.548 million) between the accounting and the

treasury records;

Cash advances remained unliquidated at year-end totaling

P83.312 million despite the purpose for which it was granted has

already been served and the amount presented in the financial

statements submitted by the agency does not coincide with the

amount per schedule of the unliquidated cash advance of General

Fund as of December 31, 2018;

452


Property, Plant and Equipment (PPE) stated at P726.639 million

or 63.98% of total assets, as at December 31, 2018 remained

unreliable and could not be ascertained due to (1) incomplete

physical inventory count; (2) inadequacies of property ledger

cards; and, (3) wrong valuation of PPE accounts which are not

in conformity with the existing rules and regulations;

Lands with book value of P2.593 million and with purchase price

of P21.146 million were not supported by land titles;

Urban Ambulance and Mobile Dental Vehicle with undetermined

value, donated by the Department of Health to the City

Government was not recorded in the books of accounts;

Investment Property amounting to P30.113, million presented in

the financial statements submitted by the agency does not

coincide with the amount per schedule submitted;

Inventory accounts amounting to P.774 million at year-end is

unreliable, and their existence and completeness could not be

fully determined due to (1) incomplete physical count of

inventories; and, (2) non-preparation of the stock ledger card and

stock cards; and,

Proper disclosure and presentation of the status and utilization of

DRRMF was not made in the Notes to Financial Statements.

Lamitan City Qualified Property Plant and Equipment (PPE) account amounting to

P554.969 million could not be ascertained due to the failure to

reconcile the ledger cards of the Accounting office and the annual

inventory report of the City General Service Office amounting to

P75.482 million.

Municipalities

Akbar Qualified Non-submission of a complete, updated and extensive subsidiary

ledger for prior period error account amounting to P 44.945

million.

Al-Barka Disclaimer

Non submission of the disbursement vouchers with its supporting

documents for CY 2018, required financial reports and other

monthly reports, bank reconciliation statements and other

transaction documents.

Hadji Mohammad Ajul

Qualified Failure of the Municipal Accountant to prepare and submit

monthly Bank Reconciliation Statements (BRS) together with the

paid checks and original copies of debit/credit memos within the

prescribed period and Bank Reconciliation Statement submitted

by the Municipal Government was not prepared for all bank

accounts.

453


Hadji Muhtamad Disclaimer

Non submission of the transaction documents for the period from

January to December 31, 2018.

Lantawan Qualified Property, Plant and Equipment account balance of P127.385

million or 55.88% of the total assets is unreliable due to: (a) non-

conduct of inventory count for CY 2018; (b) inadequacies of

subsidiary records and property ledger cards; and, (c) wrong

valuation of PPE accounts which are not in conformity with the

existing rules and regulations.

Maluso Qualified Property, Plant and Equipment amounting to P 115.943, million

or 74.48% of the total assets could not be ascertained due to: (a)

non-conduct of inventory count for CY 2018; and, (b)

inadequacies of subsidiary records and property ledger cards.

Sumisip Disclaimer

Non submission of the transaction documents of the for the period

of January to December 31, 2018.

Tabuan-Lasa Qualified Property, Plant and Equipment amounting to P45.384 million or

94.64% of the total assets could not be ascertained due to: (a)

non-conduct of inventory count for CY 2018; and, (b)

inadequacies of subsidiary records and property ledger cards.

Tipo-Tipo Qualified Property, Plant and Equipment account balance of P 57.424

million or 19% of the total assets is unreliable due to: (a) non-





Tuburan Qualified Property, Plant and Equipment account balance of P99.198

million or 76% of the total assets is unreliable due to: (a) non-





Ungkaya Pukan Qualified Property, Plant and Equipment amounting to P 200.265 million or

87.78% of the total assets could not be ascertained due to non-

conduct and non-submission of the Report on Physical Count of

Property, Plant and Equipment

Lanao del Sur Unqualified

454


City:

Marawi City Qualified Property Plant and Equipment presented in the Statement

of Financial Position as at December 31, 2018 totaling

P1.809 billion could not be verified and ascertained due to

inadequacy of subsidiary records, property records and

incomplete report on the annual physical count of

properties.

Municipalities

Amai Manabilang (Bumbaran)

Qualified Property, Plant and Equipment with a total consolidated booked

value of P51.446 million presented in the financial statements of

the LGU's three (3) funds could not be validated for two (2)straight

years due to the absence of a complete Report on Physical Count

of Property, Plant and Equipment (RPCPPE) and the non-

reconciliation of property plant and equipment ledger cards

(PPELC) and property cards of the accounting and general

services offices.

Bacolod-Kalawi Qualified Property, Plant and Equipment (PPE) with net book value

amounting to P225.550 million as of December 31, 2018 could

not be ascertained due to incomplete inventory taking,

unreconciled discrepancy per accounting and property records,

and inadequacy of subsidiary records.

Balabagan Qualified

Failure of the LGU to conduct and submit report of inventory of

PPE coupled with the inappropriate classification of accounts and

the non- maintenance of equipment records and property cards

resulting to non-reliability of the year- end balance of P129.275

million.

Balindong Qualified Property Plant and Equipment account in the amount of P80.221

million could not be ascertained due to failure to conduct

complete physical inventory, non-submission of the RPCPPE,

and non-maintenance of property ledger cards.

Bayang Qualified Cash in Bank in the books of accounts of P2.410 million was

unreliable due to the non-submission of Bank Reconciliation


documents within the prescribed period.

Binidayan Qualified Property, Plant and Equipment (PPE) with a Balance of P58.629

million is doubtdul due to failure to conduct physical inventory and

PPE Ledger Cards and Acknowledgement Receipt for Equipment

were not maintained; and,

Dormant accounts amounting to P.930 million remained

outstanding in the books of accounts for more than five years and

were not acted upon to facilitate the proper write-off thereof,

455


resulting in the overstatement of assets, liabilities and

government equity accounts affecting fair presentation of


Buadi Puso-Buntong Qualified Failure to submit the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) amount to P18.571 million, thus,

correctness, valuation and existence of the Property, Plant and

Equipment in the financial Statement as at year end is doubtful.

Bubong Qualified Property, Plant and Equipment with a total consolidated booked


the LOU's three (3) funds could not be validated due to the

absence of a complete Report on Physical Count of Property,

Plant and Equipment (RPCPPE) and the non-reconciliation of

PPE ledger cards and property cards of the accounting and

general services offices.

Butig Qualified Property, Plant and Equipment accounts totaling to

P72,486,181.50 cannot be account due to unavailability of

subsidiary records, report of inventory and other reports and due

to non-conduct of physical count thereof;

Cash in Bank-Local Currency Current Account amounting to

P2.169 million cannot be ascertained due to non-preparation and

non-submission of the required monthly bank reconciliations;

Loans Payable-Domestic amounting to P24.689 million was not

reclassified as current liabilities.

Calanogas Qualified Failure to conduct a physical count of its property, plant and

equipment (PPE) at a book value of P63.951 million as of

December 31, 2018, casting doubt on the existence and valuation

of the PPE accounts;

“Due to GSIS” account in the amount of P.360 million could not

be ascertained as it did not tally with the records of the GSIS

which reflected a balance of P16.646 million collectible against

the Municipality way back as of December 31, 2014 consisting of

P5.634 million principal amount and P11.012 million accumulated

interests.

Ditsaan-Ramain Qualified Property Plant and Equipment account in the amount of P105.052

million could not be ascertained due to failure to conduct

complete physical inventory, non-submission of the RPCPPE and

non-maintenance of property ledger cards

Ganassi Qualified Failure of the LGU to conduct and submit report of inventory of

PPE coupled with the inappropriate classification of accounts and

the non maintenance of equipment records and property cards

resulting to non-reliability of the year end balance of P131.625

million which affect the fairness of the presentation of the PPE

Account in the financial statement.

456


Kapai Qualified Non-preparation and non-submission of Bank Reconciliation

Statement (BRS) for cash in bank accounts render unreliable

balances of account Cash in Bank – Local Currency Current

Account of P1.942 million.

Kapatagan Qualified Property, Plant and Equipment with a total consolidated booked

value of Pl95.536 million presented in the financial statements of

the LGU 's three (3) funds could not be validated due to the


Plant and Equipment (RPCPPE) and the non-reconciliation of

ledger cards and stock cards of the accounting and general

services offices.

Lumba-Bayabao Qualified Failure to conduct physical inventory of its Property, Plant and

Equipment (PPE) totaling P46.672 million and to submit report

thereon; and.

Failure to submit Report on the utilization of the Local Disaster

Risk Reduction Management Fund (LDRRMF), renders the

disbursement of P6.194 million doubtful.

Lumbaca-Unayan Qualified Property, Plant and Equipment accounts totaling to P8,000

million is doubrful due unavailability of subsidiary records, report

of inventory and other reports and due non-conduct of physical

count thereof.; and,

Cash in Bank-Local Currency Current Account amounting to

P.875 million cannot be ascertained due to non-preparation and

non-submission of the required monthly Bank Reconciliation

Statements.

Lumbatan Qualified Property, Plant and Equipment totaling to P88,705 million is

doubtful because the LGU failed to conduct physical count during

the year and, Property, Plant and Equipment Ledger Cards of the

accounting section as well as the Property Cards are not

complete, thus no reconciliation was made; and,

Loans Payable-Domestic of P43.092 million was not reclassified

as current liabilities.

Lumbayanague Modified/ Qualified

Cash in Bank in the books of accounts of P2.358 million was



documents within the prescribed period; and,

Property, Plant and Equipment amounting P111.715 million is

unreliable.

Madalum Qualified Property, Plant and Equipment (PPE) with net book value

amounting to P108.258 million as of December 31, 2018 could

not be ascertained due to incomplete inventory taking,

unreconciled discrepancy per accounting and property records,

and inadequacies of subsidiary records.

457


Madamba Qualified Property, Plant and Equipment (PPE) with net book value

amounting to P15.891 million as of December 31, 2018 could not

be ascertained due to incomplete inventory taking, unreconciled

discrepancy per accounting and property records, and

inadequacies of subsidiary records.

Maguing Qualified Report on the utilization of the Local Disaster Risk Reduction

Management Fund (LDRRMF) , has yet to be submitted which

renders the disbursement amounting to P7.913 million doubtful.

Malabang Qualified Cash in Bank – Local Currency Current Account of P1.549 million

is doubtful due to non-preparation and non-submission of Bank

Reconciliation Statement (BRS) for cash in bank accounts;

Property, Plant and Equipment (PPE) accounts totaling to

P79.710 million cannot be established due to partial inventory

report on physical count of PPE and net understatement of same

accounts by P.728, million due to incorrect usage of

salvage/residual value in the computation of annual depreciation.

Non-recognition of account “Road Network” totaling to P2.531

million.

Marantao Qualified Due to the effect of the incomplete physical inventory of the

property, plant and equipment as noted in prior year audit which

remained unimplemented in the current audit.

Marogong Qualified Dormant accounts amounting to P.654 million remained

outstanding in the books of accounts for more than five years and

were not acted upon to facilitate the proper write-off thereof,

resulting in the overstatement of assets, liabilities and

government equity accounts affecting fair presentation of


Year-end physical inventory was not conducted for the account of

Property, Plant and Equipment (PPE) with a Balance of P116.729

million and PPE Ledger Cards and Acknowledgement Receipt for

Equipment were not maintained.

Masiu Qualified Failure to set up Real Property Tax (RPT) Receivables/Special

Education Tax (SET) Receivables for the CY 2018, due to non-

submission by the Municipal Treasurer’s Office (MTO) of certified

list of taxpayers, indicating the amounts due and collectible for

the year.

Mulondo Qualified Due to the effect of the incomplete physical inventory of the



Pagayawan Qualified Failure to conduct a physical count of its property, plant and

equipment (PPE) at a book value of P78.687 million as at

December 31, 2018, casting doubt on the existence and valuation

of the PPE accounts.

458


Failure to disclose the nature and other necessary details of the

‘Prior Period Errors’ in the amount of (P10.676 million), thereby

casting doubt on the validity of the ‘Government Equity’ account.

Piagapo Qualified Property, Plant and Equipment with book value of Pl34.426

million presented in the financial statements could not be

validated due to the absence of Report on Physical Count of

Property, Plant and Equipment (RPCPPE) and reconciliation of

ledgers cards and stock cards of the accounting and general

services office;

Cash in Bank, Local Currency, Current Accounts under the

General Funds, Special Education Funds and Trust Funds as of

December 31, 2018 in the amounts of P3.003 million, P.019

million and P7.636 million respectively, could not be ascertained

due to the failure of the agency to prepare and submit periodic

Bank Reconciliation Statements; and,

Receivables, inventory and deferred credits remained dormant

for more than five years in the amount of P1.235 million, P.115


Picong Qualified Cash in Bank – Local Currency Current Account of P2.358 million

is unreliable due to non-preparation and non-submission of Bank

Reconciliation Statement (BRS) for cash in bank;

Property, Plant and Equipment (PPE) accounts totaling to P91.95

Million cannot be established due to partial inventory report on

physical count of PPE and net overstatement of same accounts

by P.592 million due to incorrect usage of salvage/residual value

in the computation of annual depreciation.

Non recognition of account “Road Network” totaling to P1.782

million in the LGU books of accounts for calendar years 2016 –

2018.

Poona Bayabao Qualified Failure to set up Real Property Tax (RPT) Receivables/Special

Education Tax (SET) Receivables for the CY 2018 due to non-



the year,.

Pualas Qualified Failre to conduct a physical count of its property, plant and

equipment (PPE) at a book value of P77.846 million as of

December 31, 2018, casting doubt on the existence and proper

valuation of the PPE accounts;

459


“Due to GSIS” account in the amount of P.117 million could not

be ascertained as it did not tally with the GSIS records which

reflected a balance of P31.683 million as of December 31, 2014

consisting of P9.383, million principal balance and P22.300

million accumulated interests.

Saguiaran Qualified Due to the effect of the incomplete physical inventory of the



Sultan Dumalondong

Qualified Cash in Bank in the books of accounts of P.722 million was



documents.

Property, Plant and Equipment were not insured with the General

Insurance fund of the GSIS.

Tagoloan Qualified Property, Plant and Equipment with a total consolidated booked


the LGU 's three (3) funds could not be validated due to the


Plant and Equipment (RCPPE) and the non-reconciliation of PPE

ledger cards and property cards of the accounting and general

services offices.

Tamparan Qualified

Failure to set up Real Property Tax (RPT) Receivables/Special

Education Tax (SET) Receivables for the CY 2018, due to non-



the year.

Taraka Qualified Report on the utilization of the Local Disaster Risk Reduction

Management Fund (LDRRMF), as required under Sub-paragraph

c (24) Section 12 of Republic Act No. 10121, has yet to be

submitted to the Office of the Auditor which renders doubtful the

amount of P5.429 million disbursed out of the fund.

Tubaran Qualified Unexpended portion of LDRRMF amounting to P2.561 million

was not deposited to Special Trust Fund at the end of the year;

and,

Year-end physical inventory was not conducted for the account of

Property, Plant and Equipment (PPE) with a balance of P55.079

million and PPE Ledger Cards and Acknowledgement Receipt for

Equipment were not maintained, thus, the correctness and

validity of the PPE account could not be ascertained and their

existence could not be established.

460


Tugaya Qualified Cash in Bank – Local Currency Current Account of P.930 million

is unreliable due to non-preparation and non-submission of Bank

Reconciliation Statement (BRS) for cash in bank account.

Property, Plant and Equipment (PPE) accounts totaling to

P25.530 Million cannot be established due to partial inventory

report on physical count of PPE and net understatement of same

accounts by P1.612 million due to incorrect usage of

salvage/residual value in the computation of annual depreciation.

Non-recognition of account “Road Network” totaling to P.861

million in the LGU books of accounts for calendar years 2016 –

2018.

Wao Qualified Only the Inventory of the service vehicles, motorcycles and heavy

equipment were prepared by the Supply Officer in the total

amount of P53.859 million and was submitted for audit.; and,

Property , Plant and Equipment in the amount of P302.084 million

out of the total consolidated booked value of P355.943 million

presented in the financial statements of the LGU's three (3) funds

could not be validated due to the absence of a complete Report

on Physical Count of Property, Plant and Equipment (RPCPPE)

and the non- reconciliation of ledger cards and stock cards of the

accounting and general services offices.

Maguindanao Qualified

Municipalities

Ampatuan Qualified Propriety and reliability of the Property, Plant and Equipment in

the books of accounts in the amount of P91.611 million could not

be ascertained due to the failure of the municipality to submit

annual physical inventory report; and,

Cash and Cash Equivalents amounting to P6.819 million were

doubtful for failure of the management to prepare and submit

Bank Reconciliation Statements (BRS).

Barira Qualified Property, Plant and Equipment Account of P399.159 million as of

December 31, 2018 under the Trust Fund account, could not be

relied upon because the management failed to provide

depreciation on the Office Equipment of P.810 million; Road

Networks with a cost of P380.164 million; Office Building of

P6.948 million and Other Public Infrastructure in the amount of

P3.488 million. It also failed to submit the Report of Physical

Count on the Property, Plant and Equipment (RPCPPE).

461


Buldon Qualified Real Property Tax Receivable Account was overstated by P4.240

million; and,

Report of the Physical Count of the Property, Plant and

Equipment (RPCPPE) was not submitted by the management

which had affected the Property, Plant and Equipment Account of

P42.314 million on its ascertainty and reliability as of December

31, 2018.

Buluan Qualified Land Improvement Account of P .384 million as of December 31,

2018 in the Consolidated Statement of Financial Position for CY

2018 was overstated because the management failed to

depreciate said account affecting the Property, Plant and

Equipment Account of P73.771 million; and,

Office Equipment Account of P1.390 million in the Consolidated

Statement of Financial Position for CY 2018 was fully depreciated

by the management which resulted to the understatement of the

Property, Plant and Equipment Account of P 73.771 million.

Datu Abdullah Sangki

Qualified Property, Plant and Equipment (PPE) account totaling P59.246

million is incorrect due to inability of the Management to prepare

and reflect Depreciation for the prior and current year;

Failure to recognize its Local Road Networks in the books of

accounts; and,

Various supplies and materials totaling P1.562 million purchases

were immediately recorded as expense accounts without passing

through the inventory account.

Datu Anggal Midtimbang

Qualified Property, Plant and Equipment valued at P19.880 million which is

99.67% of the total assets could not be ascertained due to the (a)

continuing failure of the management to conduct physical count

of its Property Plant and Equipment, (b) and non-maintenance of

complete and properly accomplished Property, Plant and

Equipment Ledger Cards and Real Property Ledger.

Datu Blah T. Sinsuat

Qualified Non preparation of Bank Reconciliation Statement that makes the

Cash in Bank account; and,

Due to the failure of the agency to conduct physical inventory

count on all of the agency’s PPE.

462


Datu Hoffer Ampatuan

Qualified Various Property, Plant and Equipment under the TRUST FUND

with a total cost of P13 million were not provided with

depreciation;

P.125 million was collected, however no Report of Collections

and Deposit for 2018 prepared and submitted to the auditor

concerned and no indication that this was included in the Cash

Balance as of December 31, 2018. The cash balance as of year-

end is remained doubtful; and,

Share of the other LGUs for the collection of RPT/SET which is

held for the former was not recognized as liability, thus liability

was understated.

Datu Montawal Qualified Failure to conduct physical inventory of its Property, Plant, and

Equipment which rendered the accuracy, validity and existence

of the amount presented in the Financial Statements unrealiable


Datu Odin Sinsuat Qualified Property Plant and Equipment in the total amount of P63.747

million cannot be relied upon due to the failure of the agency to

conduct physical inventory count on all of the agency’s PPE.

Datu Paglas Qualified Failure to conduct physical inventory of its Property, Plant and

Equipment which rendered the accuracy, validity and

reasonableness of the amount presented in the Financial

Statements unreliable amounting to P120.997 million.

Datu Piang Qualified Failure to conduct physical count of its existing Property, Plant

and Equipment, and no Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) was submitted thereby the

accuracy of the Property, Plant and Equipment balance totaling

P34.731 million (Combined) is uncertain.

Datu Salibo Qualified Due to incomplete accounting records and failure to prepare bank

reconciliation statements, the financial statements as a whole for

CY 2018 is doubtful.

Datu Saudi-Ampatuan

Qualified Cash in Bank balance for the Trust Fund – P9.340 million could

not be ascertained due to the failure of the management to submit

Bank Reconciliation Statements and/or bank certifications for the

CY 2018.

Datu Unsay Qualified Cash balances of all funds totaling P2.489 million could not be

verified because of the absence of Bank Reconciliation

Statement and the Bank Statements; and,


million could not be ascertained due to absence of supporting

documents.

463


General Salipada K. Pendatun

Qualified Terminal Leave Benefit Account of P3.226 million was overstated

by P.254 million.

Guindulungan Qualified Property, Plant and Equipment balance of P119.552 million which

is 97% of the total assets could not be ascertained, due to the

continuing failure of the management to conduct physical count.

Kabuntalan Qualified Real Property Tax (RPT) Receivable amounting to P2.630 million

could not be ascertained due to failure of the Municipal Treasurer

to submit certified list showing the name of taxpayers and the

amounts due and collectible for the year; and,

Due to GSIS in the Statement of Financial Position of the General

Fund as of December 31, 2018 amounting to P26.771 million

cannot be ascertained due to absence of supporting documents.

Mamasapano Qualified Cash and Cash Equivalent amounting to P.665 million cannot be

ascertained because an amount of P.637 million collection that

has been omitted in the Financial Statement of Cash Flows thus

reflecting an understatement of the cash balance in the Statement

of Financial Position and no submissions of bank reconciliation

statement and snapshots for the months of July to December

2018.

Mangudadatu Qualified Property, Plant and Equipment (PPE) Account of P 29.969 million

in the Consolidated Statement of Financial Position for CY 2018

could not be relied because the management incurred delays in

the submission of the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE).

Matanog Qualified Property, Plant and Equipment Account of P169.242 million was

overstated because the management failed to depreciate the

Disaster Response and Rescue Equipment Account, Military

Police and Security Equipment Account, Other Machineries

Equipment Account and Watercrafts Account with an aggregated

acquisition cost of P14.278 million.

Northern Kabuntalan

Qualified Cash balances of all funds totaling P.062 million could not be

verified because of the absence of Bank Reconciliation

Statement and the Bank Statements; and,



documents, and non-recognition of depreciation.

Pagalungan Qualified Failure to conduct physical inventory of its Property, Plant, and

Equipment rendered the accuracy, validity and reasonableness



464


Paglat Qualified Failure to conduct physical inventory of its Property, Plant, and

Equipment rendered the accuracy, validity and reasonableness


amounting to P52.773 million; and,

Failure to prepare and submit Bank Reconciliation Statements

casting doubt to the accuracy and validity of its Cash in Bank

balance amounting to P1.066 million.

Pandag Qualified Property, Plant and Equipment Account of P2.354, million in the

Consolidated Statement of Financial Position for CY 2018 could

not be relied because the management failed to depreciate the

Office Equipment Account of P.625 million and Motor Vehicle

amounting to P.216 million was over depreciated.

Parang Qualified Impairment Losses of P6.097 million decreased the value of

the Land from P28.103 million to P22.006 million, resulting to

the understatement of the Land Account as of Dec. 31, 2018;

Road Networks Account of P.024 million were understated

because the management failed to consider on the other

roads of the Municipality; and,

Depreciations were not taken up in the above account as

well as the several equipment under the General Fund and

Trust Fund totaling to P13.148 million which overstated the

Property, Plant and Equipment Account totaling to P105.983

million.

Rajah Buayan Qualified Property, Plant and Equipment Accounts with the total amount of

P32.199 million cannot be ascertained due to failure to finish the

physical inventory of the existing Property, Plant and Equipment,

and no Report on the Physical Count of PPE (RPCPPE) was

submitted during the year.

Shariff Aguak Qualified Failure to capitalize P.422 million for the Salintubig Project and

this was charged to the current operating expenses of the TRUST

FUND account thus, overstating the expenses and understating

the PPE for the same amount;

P.442 million received from DTI-ARMM (P.150 million) and

DOLE-Region 12 (P.292 million.) for implementation of various

program for the year 2018 was charged to expenses without

corresponding income recognized for the TRUST FUND; and,

Failure to recognized fund transfer amounted to more than

P9.800 million as trust liability.

465


Shariff Saydona Mustapha

Qualified Property, Plant and Equipment Accounts with the total amount of

P15.301 million cannot be ascertained due to failure to finish the

physical inventory of the existing Property, Plant and Equipment,

and no Report on the Physical Count of PPE (RPCPPE) was

submitted during the year.

South Upi Qualified Property, Plant and Equipment in the total amount of P27.041

million cannot be relied upon due to the failure of the agency to

conduct physical Accounting System and absence of Property

Ledger Card.

Sultan Kudarat Qualified Cash balances of all funds totaling P26.188 million could not be

verified and validated because of the absence of Bank

Reconciliation Statement and the Bank Statements; and,

Property, Plant and Equipment (PPE) accounts balance of

P249.524 million could not be ascertained due to non-

performance of actual physical inventory by the Inventory

Committee.

Sultan Mastura Qualified The validity and accuracy of the reported Cash in Bank - Local

Currency Current Account amounting to P17,033 million could not

be readily established due to non-preparation and non

submission of Bank Reconciliation and bank statements; and,



documents, and non-recognition of depreciation; and,

Failure to transfer the Quick Response Fund and the DRRM-

MOOE amounting to P14.183 million to the Trust Fund account.

Sultan sa Barongis Qualified Property, Plant & Equipment with the total amount of P20.428

million cannot be ascertained due to unable to finish the physical

inventory of the existing Property, Plant and Equipment, and no

Report on the Physical Count of PPE (RPCPPE) was submitted

during the year.

Sultan Sumagka

Talayan Qualified Property, Plant and Equipment valued at P165.875 million which

is 98.5% of the total assets could not be ascertained due to the

(a) continuing failure of the management to conduct physical

count of its Property, Plant and Equipment (b) and non-

maintenance of complete and properly accomplished Property,

Plant and Equipment Ledger Cards and Real Property Ledger.

466


Talitay Qualified Property, Plant and Equipment valued at P16.167 million which is

92% of the total assets could not be ascertained; and,

Failure to prepare and submit the Bank Reconciliation

Statements of all funds and recording of the reconciling items and

weak internal control system of Cash Account resulted to

unreconciled cash in bank balance amounting to P.058 million.

Upi Qualified Account Construction in Progress – Infrastructure Asset in the

total amount of P16. 059 million cannot be verified due to the

absence of subsidiary ledgers, records and information to

validate its existence.

Sulu

Municipalities

Banguingui

Hadji Panglima Tahil

Indanan

Jolo

Kalingalan Caluang

Lugus

Luuk

Maimbung

Panamao

Omar

Pandami

Panglima Estino

467


Pangutaran

Parang

Pata

Patikul

Siasi

Talipao

Tapul

TAWI-TAWI Qualified Property, Plant and Equipment accounts with net book value

totaling P1.655 billion could not be ascertained due to the failure

of the LGU to update the physical inventory and to validate the

existence of reported various Construction and Heavy Equipment

with net book value of P49.872 million;

Copies of Purchase Orders (POs)/ Contracts and Acceptance

and Inspection Reports (AIR) covering the procurement of

supplies, materials and equipment were not submitted to the

Auditor’s Office on time for the conduct of evaluation and

inspection of items purchased; and,

Financial reports and paid Disbursement Vouchers (DVs) with

the corresponding supporting documents were not submitted on

time.

Municipalities

Bongao Qualified Failure to conduct a physical inventory of its property, plant and

equipment as of year-end valued in the books at P 85.748 million.

The inadequacy of its records did not permit us to apply adequate

alternative procedures to determine the validity and correctness

of these accounts.

Languyan Qualified Property, Plant and Equipment accounts with net books value

totalling P143.008 million could not be ascertained due to the

failure of the LGU to prepare and update physical inventory;

Prior years payables due to the GSIS has unreconciled balances

and remained unremitted as of December 31, 2018 in the amount

of P2.411 million;

468


Copies of Purchase Orders (POs)/Contracts and Acceptance and

Inspection Reports (AIR) covering the procurement of supplies,

materials and equipment were not submitted to the Auditor’s

Office on time for the conduct of evaluation and inspection of

items purchased; and,

Financial reports and Disbursement Vouchers with the

corresponding supporting documents were not submitted on time.

Mapun Qualified Failure to conduct a physical inventory of its property, plant and

equipment as of year-end valued in the books at P5.252 million;

and,

Payable to GSIS amounting to P1.059 million did not reconcile

with the accounting records.

Panglima Sugala Qualified Property, Plant and Equipment accounts with net book value

totaling P347.338 million could not be ascertained due to the

failure of the LGU to update physical inventory;





items purchased; and,

Financial reports and Disbursement Vouchers (DVs) with the


Sapa-Sapa Qualified Property, Plant and Equipment accounts with net book value



Copies of Purchase Orders (POs)/Contracts and Acceptance

and Inspection Reports (AIR) covering the procurement

of supplies, materials and equipment were not submitted

to the Auditor’s Office on time for the conduct of evaluation and

inspection of items purchase;



of P1.227 million; and,

Financial reports and paid Disbursement Vouchers (DVs) with the


Sibutu Qualified Property, Plant and Equipment accounts with net book value



469






items purchased,;



of P.481 million; and,



Simunul Qualified Failure to conduct a physical inventory of its property, plant and

equipment as of year-end valued in the books at P 90.288 million;

and,

Payable to GSIS amounting to P 3.281 million did not reconcile


Sitangkai Qualified Property, Plant and Equipment accounts with net book value

totaling P211.268 million could not be ascertained due to

the failure of the LGU to prepare and update physical

inventory ;


Inspection Reports (AIR) covering the procurement of

supplies, materials and equipment were not submitted

to the Auditor’s Office on time for the conduct of

evaluation and inspection of items purchased; and,

Financial reports and paid Disbursement Vouchers

(DVs) with the corresponding supporting documents were

not submitted on time

South Ubian Qualified Payable to GSIS amounting to P2.704 million did not reconcile


Tandubas Qualified Property, Plant and Equipment Accounts with net book value

totaling P285.001 million could not be ascertained due to the

failure of the LGU to update physical inventory;

Copies of Purchase Orders (POs)/Contracts and Acceptance

and Inspection Reports (AIR) covering the procurement of

supplies, materials and equipment were not submitted to

the Auditor’s Office on time for the conduct of evaluation and

inspection of items purchased; and,



470


Turtle Islands Qualified Failure to conduct a physical inventory of its property, plant and

equipment as of year-end valued in the books at P 31.220 million;

and,

Payable to GSIS amounting to P2.514 million did not reconcile


PART II

AUDIT

OBSERVATIONS

AND

RECOMMENDATIONS

471

AUDIT OBSERVATIONS AND RECOMMENDATIONS

One of the constitutional mandates of this Commission is to recommend measures necessary to improve the effectiveness and efficiency of the operations of the government. To comply with this constitutional duty, presented herein is the consolidated significant and common audit observations among local government units (LGUs) and the recommendations intended to address them. The compendium consists of significant and common audit observations and recommendations culled from the CY 2018 Annual Audit Reports (AARs) on LGUs, which is presented according to the identified audit foci/areas for CY 2018. A. 20% Development Fund The Local Government Code (LGC) of 1991 provides that LGUs shall have a share in the national internal revenue taxes equivalent to 40% of the total internal revenue collections of the third fiscal year preceding the current fiscal year. The share is commonly known as the Internal Revenue Allotment (IRA), which is allocated to LGUs in the following manner: Provinces (23%), Cities (23%), Municipalities (34%) and Barangays (20%). The Department of Budget and Management (DBM) computes the IRA for each LGU and the Bureau of the Treasury (BTr) releases the funds. Further, Section 287 of the LGC requires each LGU to appropriate in its annual budget no less than 20% of its annual IRA for development projects called as the 20% Development Fund (DF). For calendar year (CY) 2018, the IRA of the LGUs totalled P419,082.5 million1, of which at least P83,816.5 million is appropriated for development projects. DILG-DBM Joint Memorandum Circular (JMC) No. 2017-1 dated February 22, 2017 provides the updated guidelines on the appropriation and utilization of the 20% DF. The JMC aims to enhance transparency and accountability in the LGUs' utilization of the 20% DF. The guidelines provide that the LGUs may utilize the fund to finance their priority development projects and programs, as embodied in the duly approved local development plan that directly support the Philippine Development Plan, the Medium-Term Public Investment Program and the Annual Investment Program (AIP). Further, the guidelines require that the projects considered for funding shall contribute to the attainment of desirable socio-economic development and environmental management outcomes and shall partake the nature of investments or capital expenditures. The guidelines also enumerates those social, economic and environmental development projects that are eligible for financing from the 20% DF, as well as those expenditure items that are not allowed to be charged against the fund.

Budgetary requirements discourage the presentation of the LGUs budget for the 20% DF in lump sum. Also, the AIP requires the presentation of the specific projects. However, in case of appropriations for the fund presented in generic terms or in lump sum, its utilization needs prior authorization from the local sanggunian.

Accounting policies require the maintenance of the 20% DF in a special account in the general fund.

1 Net of the IRA for Metro Manila Development Authority amounting to P411.302 million (Source: www.dbm.gov.ph)

http://www.dbm.gov.ph/

472

The CY 2018 AARs on LGUs reported the following observations on the 20% DF: On the appropriation of the fund:

a) Nine LGUs failed to re-appropriate the total amount of P115.158 million representing

savings from previous years’ implementation of various development projects under the 20% DF.

b) Twenty-Eight (28) LGUs presented their appropriation aggregating P982.399 million in lump sum or generic terms, of which, 16 LGUs spent the lump sum appropriations totaling P150.787 million without the prior authorization from the local sanggunian.

On the implementation of the appropriation:

a) Eighty-Nine (89) LGUs utilized the 20% DF totaling P1,356.313 million for programs and projects classified as not among the priority development projects and do not partake the nature of investments or capital expenditures, while 101 LGUs used allocations amounting to P456.583 million for expenditures not related to the implementation of development programs and projects. The expenditures included salaries and wages, fuel expense, rent expense, repairs and maintenance, and other operating and administrative expenses.

b) Current and continuing appropriations for the 20% DF aggregating P16,035.910 million of 499 LGUs remained unutilized as of the end of year due to non-implementation and/or delayed implementation of the development projects attributed to poor planning, lack of coordination with concerned offices, and non-monitoring of the implementation of the development projects. On the other hand, two LGUs implemented/completed the projects totaling P2.996 million funded under the 20% DF but the projects remained unutilized, thus, defeating the objectives of the projects and the desired benefit for the intended users.

c) Disbursements from the 20% DF totaling P817.625 million of 35 LGUs were not supported with complete documentary requirements.

On the maintenance of records for the fund:

a) A special account to record separately the specific transactions of the 20% DF of 15 LGUs was not maintained in the General Fund.

Recommendations:

Ensure that savings from the implemented development projects are re-appropriated for priority projects for funding under the 20% DF to optimize the utilization of the fund and help augment the attainment of desirable socio-economic development and environmental management outcome as envisioned in the comprehensive development of the LGUs.

The DILG and the DBM should strictly require the preparation of the AIP containing the detailed information of the specific programs, projects and activities funded from the 20% DF.

473

Require the Local Chief Executives (LCEs) to strictly adhere to the guidelines provided under DILG-DBM Joint Memorandum Circular No. 2017-1 dated February 22, 2017 on the appropriation and utilization of the 20% DF. Also, require the regular monitoring and evaluation in the implementation of the development projects to ensure optimum utilization of the 20% DF and to achieve the main purpose of the fund.

Stop the disbursement of government funds without complete documentations.

Maintain a special account in the General Fund for the 20% DF to record and monitor the disbursements from the fund.

B. Fund Transfers from National Government Agencies (NGAs) to Local Government Units (LGUs) – Direct Releases to LGUs

B.1 Bottom-Up Budgeting (BuB); Assistance to Disadvantaged Municipalities (ADM); Assistance to Municipalities; Assistance to Cities; and Financial Assistance to LGUs

The Bottom-up Budgeting (BuB) program seeks to increase the citizens’ access to local

service delivery through a demand-driven budget planning process and to strengthen government accountability in local public service provision (DBM-DILG-DSWD-NAPC Joint Memorandum Circular No. 7 dated November 3, 2015). The BuB oversight and participating agencies are tasked to ensure the implementation of priority poverty reduction projects as identified at the city/municipal level through the BuB participatory planning and budgeting process. Under the Special Provisions of the FY 2018 General Appropriations Act, allocations to the Local Government Units (LGUs) were as follows:

Financial Assistance to LGUs P 7.030 billion Assistance to Municipalities 11.714 Assistance to Cities 2.590_____ Total P21.334 billion The CY 2018 AARs on LGUs disclosed delays/partial implementation of projects

amounting to P1,252.560 million in 78 LGUs. On the other hand, 17 LGUs with funds aggregating to P258.662 million projects were not implemented. The unutilized funds/excess funds from completed projects amounting to P243.336 million of 26 LGUs were not returned to the Source Agency or the Bureau of Treasury (BTr).

In the disbursements of funds totaling P1,975.130 million, 74 LGUs failed to submit

supporting documents, rendering the regularity and propriety of the transactions doubtful. Deficiencies were noted in the implemented projects of 30 LGUs costing P418.598 million as they failed to meet the standards of their partner agencies and to comply with the guidelines on the procurement, budgeting, accounting and auditing rules and regulations casting doubt on the validity of the transactions.

474

As regards the recording of transactions related to program, the auditors noted deficiencies in 18 LGUs with funds totaling P237.613 million in the recognition of the transactions and the non-recording of the completed projects, thus, affecting the fair presentation of financial statements. Recommendations:

Require the partner/monitoring agencies to:

Conduct regular monitoring and evaluation on the status of implementation of the different programs, projects and activities, and initiate measures to assist the implementing agencies compliance with the implementation and/or liquidation requirements.

Encourage implementing agencies to coordinate with the source agency for possible re-alignment of the unutilized funds to related projects or return the funds to the source agency.

Require the Local Chief Executives to:

Ensure timely implementation of projects and address the deficiencies noted in the implemented projects in order to operationalize them;

Coordinate with the source agencies for the possible realignment of unutilized funds to related projects or the return of the funds to the source agency or the BTr;

Strictly comply with the requirements in the recognition, utilization and recording of the transferred funds; and

Strengthen internal control systems in the different financial processes.

B.2 Conditional Matching Grant to Provinces (CMGP) Program/Konkreto at Ayos na Lansangan at Daan sa Pangkalahatang Kaunlaran (KALSADA) Program

The National Government allocated under the Special Provisions of the FY 2018 General Appropriations Act, funds amounting to P8.224 billion for CMGP for road and bridge repair, rehabilitation and improvement. It is a partnership program between the Department of the Interior and Local Government (DILG) and Department of Budget and Management (DBM) for Provincial Local Government Units in response to the needed infrastructure support, as well as reforms in local roads management (LRM) and public financial management (PFM). DILG and DBM Joint Memorandum Circular No. 2017-2 dated April 26, 2017 prescribes the guidelines for the implementation of the CMGP for FY 2017 and thereafter.

The CY 2018 AARs on LGUs disclosed delays in the implementation of projects amounting

to P718.915 million in 10 LGUs due to the following factors:

a) Failure to monitor the project implementation resulting to non-imposition of liquidated damages on defaulting contractor or termination of contracts for negative slippages of more than 15%; and

475

b) Conditions such as unworkable weather, site problems and heavy traffic that caused lag days ranging from 146 to 268 days.

On the other hand, implemented projects of eight LGUs with funds aggregating P177.771

million showed deficiencies upon inspection and contract review such as follows:

a) Deficiencies in noted upon technical inspection of the project. b) Final payment to contractors lacked supporting documents. c) Project costs were found to be excessive as the contract cost exceeded the COA cost.

In one province, Quarterly Reports on Utilization and Accomplishments for the KALSADA

and CMGP Programs were not uploaded to the Open Roads Portal and the Provincial Government’s Website, inconsistent with the provisions of the DBM Local Budget Circular No. 117 dated February 5, 2018, and Section 90 of the General Appropriation Act for Fiscal Year 2018, thereby limiting transparency in the fund utilization and efficiency of implementation, that hindered the general public and other stakeholders from participating in the monitoring and evaluation thereof. Recommendations:


Ensure timely implementation of projects and closely monitor all projects. Evaluate the contractor’s capacity to enter into contracts and the status of the projects, then, take immediate action on problems encountered and impose sanctions to erring contractors.

Exercise due care and diligence in monitoring the project implementation. Ensure completion of projects on target date and in accordance with the terms of the contract.

Direct the contractor to initiate repair on observed deficiencies in the project and demand payment of cost from the contractor responsible for the deficiencies.

Review and check the completeness and propriety of supporting documents before claims are processed for payment.

Demand refund from the contractor of the amount or specific performance, if feasible.

Regularly upload quarterly reports on fund utilization and accomplishments to the Open Roads Portal and the LGU’s Website, respectively; and in case of unavailability of the portal, certification from the Portal Manager and alternative procedures shall be secured.

476

B.3 PAyapa at MAsaganang PamayaNAn (PAMANA) Program

PAyapa at MAsaganang PamayaNAn or PAMANA is the national government’s convergence program that extends development interventions to isolated, hard-to-reach and conflict-affected communities, ensuring that they are not left behind. The program aims to bring back government to PAMANA areas, thereby ensuring that the communities benefit from the improved delivery of basic services and are served by responsive, transparent and accountable government units as aimed by the Local Government Code.

The FY 2018 General Appropriations Act allocated funds under the Office of the Presidential Adviser on the Peace Process (OPAPP) for the implementation of PAMANA Program, the amount of P5.207 billion to be used for the construction of roads and bridges in conflict-affected areas already identified by the OPAPP.

The CY 2018 AARs on LGUs disclosed the following observations in the implementation of

the PAMANA Program:

a) Out of the six projects under the PAMANA program of an LGU, only two projects were completed, two were delayed and the rest were terminated.

b) PAMANA projects with funds already transferred to the LGUs and some with completed

projects have not been utilized yet, thus, defeating the purpose of the downloaded funds.

On the other hand, implemented projects of five LGUs with funds aggregating to P123.243 million had deficiencies as follows:

a) Project Proposals of an LGU were not responsive to the objectives of the program and

were not compliant to the documentary requirements enumerated under Annex E of the Joint Memorandum Circular of the Department of the Interior and Local Government (DILG) and OPAPP.

b) Noted violations of PAMANA beneficiaries to the terms and conditions of the Memorandum

of Agreement (MOA).

c) Transactions involving procurement were not compliant to the requirements set forth under the Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 or the Government Procurement Reform Act.

d) Completed projects were not closed upon liquidation/completion, thus affecting the fair

presentation of the account in the financial statements. Also, unexpended funds of completed projects were not returned to the DILG. Liquidation Reports and pertinent documents were not submitted for audit.

Recommendations:


Ensure timely implementation of projects and closely monitor all projects. Evaluate the contractor’s capacity to enter into contract and impose appropriate sanctions to

477

erring contractors to ensure project completion. Strictly enforce the provisions of Annex I of the 2016 Revised IRR of RA No. 9184 relative to termination of contracts for default.

Fast track implementation of project and prioritize utilization of allocated funds. Otherwise, the fund should be returned to the National Government.

Review and evaluate the project proposal and ensure that these projects respond to the peace and development issue(s) identified to be existing in the conflict-affected area/population, supportive of the objectives of the PAMANA Program and in accordance with the implementing guidelines.

Comply strictly with the requirements as detailed in the MOA. Capacitate the beneficiaries by providing them with the written policy, their duties and responsibilities, among others.

Ensure compliance with the documentary requirements and strictly observe provisions on transferred funds under COA Circular No. 94-013 dated December 13, 1994 and Sections 97, 100 and 101(b) of the New Government Accounting System Manual for LGUs, Volume I.

B.4 Provision of Potable Water Supply – Sagana at Ligtas na Tubig sa Lahat

(SALINTUBIG) Program

The SALINTUBIG program aims to provide potable water supply systems to waterless municipalities, barangay, health centers, and resettlement sites to lessen the spread of diseases and improve sanitation services.

The FY 2018 General Appropriations Act allocated funds under the Local Government

Support Fund (LGSF) in the amount of P1.386 billion to be used exclusively for SALINTUBIG projects.

The Department of the Interior and Local Government (DILG) Memorandum Circular No.

2018-104 dated July 5, 2018 provides policy guidelines in monitoring, among other programs under the LGSF, the FY 2018 SALINTUBIG program, and thereafter.

The CY 2018 AARs on LGUs disclosed the following observations in the implementation of

SALINTUBIG Program:

a) Delayed/partial implementation of projects totaling P76.483 million by 13 LGUs, thus, depriving the constituents of the benefits expected from completed projects.

b) Poor maintenance on completed projects deprived the beneficiaries of enjoying the

benefits of the program and realizing revenue targets.

c) Uncompleted/Non-operational projects deprived the constituents of the timely delivery of services and intended benefits.

478

d) Non-compliance to DILG Memorandum/Memorandum of Agreement (MOA) on the operation, monitoring and maintenance of completed projects; and also as regards preparation and submission of documentary requirements.

e) Accomplishments and implementation did not conform to the Program of Work, Revised

Implementing Rules and Regulations of Republic Act (RA) No. 9184 and Section 86 of Presidential Decree No. 1445.

f) Disbursements and reports of 18 LGUs amounting to P594.786 million lacked sufficient

supporting documents.

g) Projects totaling P47.346 million remained unliquidated in the books of two LGUs resulting in the failure to close “Due to NGAs” account and to recognize depreciation expense in the financial statement.

Recommendations:


Fast track implementation of projects and closely monitor all projects, otherwise, impose applicable sanctions and penalties if warranted.

Enhance monitoring of the facilities to determine the necessary course of actions which shall be undertaken to address the current issues and concerns involving the SALINTUBIG Project. Strengthen the operations of the waterworks. Appropriate funds for the maintenance of the projects.

Conduct an assessment and technical evaluation of the water system project to find out the reasons for the non-operation and to undertake the necessary remedial measures so that expected benefits due to intended recipients be timely delivered and to ensure that the amount spent in the construction of the water system would not have been wasted.

Strictly comply with the relevant provisions of the DILG Memorandum Circulars, as well as all applicable laws, circulars and issuances relative to the implementation of SALINTUBIG program. Compliance with the requirements as detailed in the MOA should also be observed.

Abide with the standards set forth in the existing procurement regulations to protect the interest of the Government and to avoid suspension or disallowance. Avail remedies for the needed rectification over the constructed structures as prescribed in the rules and regulations under RA No. 9184.

Ensure compliance with the documentary requirements and strictly observe provisions on transferred funds under COA Circular No. 94-013 dated December 13, 1994 and Sections 97, 100 and 101(b) of the New Government Accounting System Manual for LGUs, Volume I.

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Require the contractors to submit immediately the billing documents. Upon submission, concerned offices should process the documents for immediate preparation of disbursement vouchers and issuance of checks, then make the necessary adjustments to the account “Due to Other NGAs” to reflect the completion of projects and liquidation of the transferred fund.

B.5 Recovery Assistance for Yolanda (RAY)

The Government formulated the Recovery Assistance on Yolanda (RAY) as a strategic plan to guide the recovery and reconstruction initiatives in the areas affected by Typhoon Yolanda. The fund was sourced from the Department of Budget and Management (DBM) for the repair and reconstruction of damaged infrastructures in the municipal and barangay level with a total funding support of P5.221 billion. The DBM released funds to the Department of the Interior and Local Government for the implementation of Local Government Unit (LGU) Programs/Projects in the Yolanda-affected areas.

For CY 2018 audit, three (3) LGUs disclosed the following:

a) Expenditures in some programs for the Yolanda Rehabilitation and Reconstruction Program (YRRP) for CY 2016 and CY 2017 exceeded the allocated amounts, in violation of the Work and Financial Plan and the Memorandum of Agreement.

b) Balances from completed projects totaling P1.331 billion were not returned to the Source

Agencies, contrary to Section 4.9 of COA Circular No. 94-013, thus, were used for other on-going projects and the full liquidation of the funds were not made.

c) Distribution of agricultural goods and facilities totaling P11.410 million to various Farmers’

Associations out of 2016 and 2017 YRRP-Department of Agriculture (DA) funds were made without executing a Memorandum of Agreement between the LGU and the respective association, contrary to Section 102 of Presidential Decree No. 1445 and pertinent provisions of COA Circular No. 2012-001, thus, accountabilities were not established.

d) Monitoring and inspection of the project implementation is not being done, to the

disadvantage of the government and the intended beneficiaries. Recommendations:

Require the City Accountant to: a. Obtain the complete set of Memorandum of Agreement (MOA) on all programs

including the Work and Financial Plans as guide in the disbursements; b. Certify expenditures within the approved allocation in the MOA; and c. Return unused funds on completed projects based on the Fund Utilization

Report (FUR).

Amend the MOA to include the provisions defining the accountabilities and responsibilities of both parties as regards the distributed equipment, livestock, other

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agricultural supplies and interventions to ensure that the objectives of the program will be achieved for the benefit of the associations and its members.

Ensure compliance with the provisions of the MOA and, secure an authority from the DA to utilize the savings to offset against the excess expenditures. Otherwise, the excess amount may be disallowed in audit.

B.6 Bohol Earthquake Assistance (BEA)

The Bohol Earthquake Assistance (BEA) funded thru the Department of the Interior and Local Government (DILG) was formulated to facilitate the recovery and return to normalcy of government operations, services and accelerate economic activities in the areas affected by the Bohol Earthquake. The initial fund for BEA was P2.4 billion. There were 44 LGUs in Bohol that were considered in the program.

In the CY 2018 audit, it was noted that:

a) Fund transfers amounting to P0.323 million to other LGUs remained unliquidated contrary to the Memorandum of Agreement entered into with the Municipality of Dauis, Bohol, thus, propriety of fund utilization cannot be determined.

b) Reconstruction/rehabilitation of various projects totaling P166.750 million were not covered

by insurance as required in Section 5.1 of the Tripartite Memorandum of Agreement (MOA) for the BEA-DILG Fund, hence, exposing the LGU in Sagbayan, Bohol to risk of loss of funds and further depletion of limited financial resources.

Recommendations:

The Municipality of Dauis, Bohol send Demand Letters to the recipient agencies with unliquidated fund transfers. Ensure that liquidations are made for any previous financial aid/assistance before the release of additional funds to ensure their proper utilization; and

The Local Chief Executive of Sagbayan, Bohol should take out coverage with responsible insurers for completed projects to cover risk of fire, flood and other damages in accordance with the Tripartite Memorandum of Agreement for the DILG-BEA Fund to minimize risk of loss of funds and depletion of financial resources.

C. Fund Transfers Received from NGAs, Non-Government Organizations/People’s Organizations (NGOs/POs), and Other LGUs

Sec. 25 (b) of RA 7160, otherwise known as the Local Government Code, specifically provides that “National agencies and offices with project implementation functions shall coordinate with one another and with the local government units concerned in the discharge of these functions. They shall ensure the participation of local government units both in the planning and implementation of said national projects.”

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Also, Section 34 thereof institutionalizes the partnership of the non-governmental, community-based or sectoral organizations with the LGUs. Section 36 further states that an LGU may, through its Local Chief Executive and with the concurrence of the Sanggunian concerned, provide assistance, financial or otherwise, to such people’s and non-governmental organizations for economic, socially-oriented, environmental, or cultural projects to be implemented within its territorial jurisdiction.

Commission on Audit Circular No. 2012-001 dated June 14, 2012 enumerates the

documentary requirements for the release and liquidation of funds transferred to NGOs/POs and Implementing Agencies. In addition, COA Circular No. 2007-001 dated October 25, 2007 provides the guidelines in the grant, utilization and liquidation of funds transferred to implementing agencies and funds released to NGOs/POs.

In the CY 2018 audit on the LGUs, the AARs disclosed the following observations:

On the implementation of Programs, Projects and Activities (PPAs) funded by the NGAs:

a) There were delayed and partial implementation of PPAs amounting to P3.247 billion in 62 LGUs, partly due to incomplete download of funds from Source Agencies. Other projects were initiated at a much later date and not completed within the desired project duration as specified in the contract. On the other hand, eight LGUs with project funds amounting to P499.490 million were unable to implement the projects funded by NGAs, thus, defeating the purpose of the downloaded funds.

b) Inspection of projects implemented in 12 LGUs amounting to P255.298 million disclosed that these were still on-going or have not yet been completed.

c) Funds of P3.955 billion received from NGAs for implementation of PPAs by 81 LGUs were not utilized and remained idle, thereby, depriving their constituents of the intended benefits expected therefrom.

d) Twelve LGUs completed PPAs amounting to P68.971 million but the projects have not been utilized or not yet operational/functional and remained idle, resulting in opportunity losses and unrealized objectives/purpose for the fund transfer.

e) Utilization of funds amounting to P123.783 million received by 15 LGUs could not be evaluated due to the absence of Memorandum of Agreement (MOA)/Trust Agreement (TA)/Memorandum of Understanding (MOU) between the Source Agencies (SA) and the LGUs. Requirements for project implementation, reporting and responsibilities of both parties were not clearly defined and made official contrary to Section 4.1 of COA Circular 94-013 dated December 13, 1994, thus, accountabilities could not be established. The monitoring and inspection of the implemented projects could not be done in the absence of guidelines as basis for the objective/proper evaluation of projects.

f) There were deviations in the implementation of projects by 11 LGUs as terms and conditions in the MOA were not strictly observed by the implementing parties.

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The review of the transaction documents and reports revealed the following deficiencies:

a) Fund transfers to 26 LGUs amounting to P1.122 billion and fund transfers made by 17 LGUs to NGOs/POs amounting to P96.264 million remained in the books of accounts due to unsubmitted or delayed submissions of Liquidation Reports/Fund Utilization Reports. Balances in the books include unliquidated fund transfers or unrecorded liquidations. Also, deficiencies on the release of funds and the monitoring of project implementation were noted on funds amounting to P32.637 million transferred by 12 LGUs to NGOs/POs.

b) Fund transfers to 29 LGUs amounting to P310.689 million were booked up as subsidy income instead of liability, thus, financial statements were not fairly presented.

c) Utilization of funds amounting to P1.620 billion by 70 LGUs were without complete supporting documents. Records such as schedules and/or subsidiary ledgers or other relevant documents were not readily available and documentary requirements for COA’s review were submitted late by nine LGUs.

d) There were no separate Subsidiary Ledgers (SLs) for each project funded by NGAs. Costs of assets amounting to P142.871 million acquired upon utilization of fund were not taken up in the books.

e) There were noted variances between the balances of the General Ledger and SLs of the Due To/Due From accounts. Some Trust Fund accounts reflect negative balances which affected their fair presentation in the financial statements.

Other observations: a) Excess funds amounting to P672.729 million from completed projects of 88 LGUs were not

returned to the Source Agencies or the Bureau of Treasury (BTr). Twenty-two LGUs had excess funds amounting to P335.471 million that remained outstanding in the books and have been dormant for more than 10 years.

b) Unutilized balances of the Priority Development Assistance Funds (PDAF) amounting to P11.396 million of 13 LGUs were not returned to BTr despite the Supreme Court’s Decision declaring PDAF as unconstitutional in G.R. Nos. 208566, 208493 and 209251, all dated November 19, 2013.

c) Funds downloaded by NGAs to 28 LGUs remained dormant, while 37 LGUs had unliquidated funds amounting to P540.857 million. On the other hand, nine LGUs have P85.336 million funds downloaded to NGOs/POs which have been long outstanding and unliquidated.

d) SLs were not maintained for each project funded from transfers. Likewise, assets acquired/constructed from the transfers were not recognized in the books of accounts of the LGUs.

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Recommendations:


Ensure prompt and efficient implementation of projects/programs funded from transfers of other entities.

Formulate work plans/actions to immediately address risks of any delays or non-implementation of projects. Regularly conduct monitoring and evaluation on the project implementation and use of completed projects.

Execute MOA/TA/MOU for every project funded from other Government Agencies to ensure that PPAs are implemented according to the purpose and reported compliant with the standard/guidelines set in the agreement.

Enjoin the local fiscal officers to: a. Cause the return of the unutilized balances of fund transfers and PDAF to the

SA or the BTr. b. Submit reports of utilization to the SA to effect liquidation in their books of

accounts. c. Maintain Subsidiary Ledgers for each project funded by the NGAs and those

funds downloaded to other LGUs and NGOs/POs. Take up unbooked transactions.

D. Local Disaster Risk Reduction Management Fund (LDRRMF)

Republic Act No. 10121, also known as the “Philippine Disaster Risk Reduction and Management Act of 2010”, strengthen the Philippine Disaster Risk Reduction and Management System, provide for the National Disaster Risk Reduction and Management Framework and institutionalize the National Disaster Risk Reduction and Management Plan, appropriate funds therefore and for other purposes.

Sec. 21 of the Act requires that no less than 5% of the estimated revenue from regular sources shall be set aside as the Local Disaster Risk Reduction Management Fund (LDRRMF) to support disaster risk management activities. Of the amount appropriated for LDRRMF, thirty percent (30%) shall be allocated as Quick Response Fund (QRF) or stand-by fund for relief and recovery programs in order that situation and living conditions of people in communities or areas stricken by disasters, calamities, epidemics, or complex emergencies, may be normalized as quickly as possible. Unexpended LDRRMF shall accrue to a special trust fund solely for the purpose of supporting disaster risk reduction and management activities of the Local Disaster Risk Reduction Management Council (LDRRMC) within the next five (5) years.

NDRRMC-DBM-DILG Joint Memorandum Circular (JMC) No. 2013-1 dated March 25, 2013 provides for the allocation and utilization of Local Disaster Risk Reduction and Management Fund (LDRRMF), which guide the LGUs in the allocation and use of the LDRRMF and to enhance transparency and accountability in using the fund. The issuance provides that the Local Disaster Risk Reduction and Management Plan (LDRRMP) shall be the basis for the allocation of the LDRRMF. The LGUs have to “formulate and implement a comprehensive and integrated LDRRMP in accordance with the national, regional and provincial framework, and policies on disaster risk

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reduction in close coordination with the local development councils” (Section 12 (6) of RA 10121). It should encompass the four (4) thematic areas of disaster risk reduction and management such as disaster prevention and mitigation, disaster preparedness, disaster response, and disaster rehabilitation and recovery.

Also, Item 6.7 of the JMC provides that the procurement of supplies and equipment chargeable against the LDRRMF shall be subject to RA 9184 (An Act Providing for the Modernization, Standardization, and Regulation of the Procurement Activities of the Government and For Other Purposes) and its Implementing Rules and Regulations.

COA Circular No. 2012-002 dated September 12, 2012, provides the Accounting and Reporting Guidelines for the Local Disaster Risk Reduction and Management Fund of Local Government Units, National Disaster Risk Reduction and Management (NDRRM) Fund, given to LGUs and Receipts from Other Sources.

Item 4.4 of the Circular provides that the unexpended LDRRMF shall accrue to a special trust fund solely for the purpose of supporting disaster risk reduction and management activities of the LDRRMC within the next five years. The LDRRMCs shall decide on the use of the unexpended balance of the LDRRMF which shall be incorporated in the Local Disaster Risk Reduction Management Fund Investment Plan (LDRRMFIP).

Also, Item 5.1.10 provides that all unexpended/unobligated balance of the QRF and the

DRRMF-MOOE shall be transferred to the Special Trust Fund under the account “Trust Liability-DRRM” (Code 438) in the Trust Fund books.

Review of the LGUs’ CY 2018 transactions and operations on the LDRRMF showed

deficiencies, as hereunder presented in three groups, namely: planning, utilization and reporting. Planning – the auditors reported the following observations on the (i) preparation of the

LDRRMP, (ii) LDRRMFIP, (iii) Allocation for the LDRRMF, and (iv) creation of the Local Disaster Risk Reduction Management Office (LDRRMO):

a) The prior years’ unexpended balance of the LDRRMF totaling P2.737 billion of 80

LGUs were not incorporated in the LDRRMFIP.

b) Thirty (30) LGUs failed to prepare or submit the LDRRMP.

c) One Hundred Fourteen (114) LGUs failed to prepare or submit the LDRRMFIP compliant with the prescribed format listing the programs, projects and activities to be implemented and funded from the LDRRMF.

d) The required creation of the LDRRMO in every province, city or municipality to oversee

the implementation and monitoring of the disaster activities remained unimplemented in 35 LGUs. Although the office was created in some LGUs, the hiring of the mandatory position for the Office has not been effected.

Utilization of the LDRRMF – the reported observations under the category, to wit:

a) The expenditures and disbursements totaling P233.802 million charged against the

allocated LDRRMF in 141 LGUs were not related to disaster preparedness, prevention,

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mitigation and rehabilitation activities, or the corresponding program, project and activities were not included in the LDRRMFIP. Also, various transactions of 53 LGUs were not properly recorded and supported with complete documentation.

b) The utilization of the LDRRMF totaling P3.408 billion in 203 LGUs was not maximized. Low utilization rate was reported in 15 LGUs. The condition goes against the declared policy which is to strengthen the capacity of the LGUs to build a disaster resilient community.

c) Some LGUs failed to observe the provisions on procurement or RA 9184.

Recording and Reporting the LDRRMF – reported the following findings and observations under the group:

a) The unexpended/unutilized LDRRMF totalling P864.561 million in 137 LGUs which

accrues to the special trust fund in the Trust Fund books still remained in the General Fund books, thereby, exposing the funds to possible misuse.

b) The unexpended/unutilized LDRRMF after the period of five years totaling P296.135 million in 46 LGUs were not reverted back to the General Fund and made available for use in other social services identified by the local sanggunian.

c) One Hundred Eighty-Eight (188) LGUs failed to prepare and submit the Monthly Report on the Sources and Utilization of the DRRMF.

d) Twenty-Six (26) LGUs failed to comply with the accounting and reporting requirements

provided under COA Circular Nos. 2012-002 dated September 12, 2012 and 2014-002 dated April 15, 2014, respectively.

e) Thirty-Seven (37) LGUs failed to disclose the details of unexpended balance of the

LDRRMF in the Notes to Financial Statement contrary to item 5.1.16 of COA Circular No. 2012-002 dated September 12, 2012.

Other observations:

a) Forty-Eight (48) LGUs fall short in observing the disaster preparedness minimum

standards, thus, creating doubts on their capability to respond to emergency and critical incidents to prevent or mitigate the impact of the hazards, risks and vulnerabilities.

b) Three LGUs failed to comply with the minimum equipment requirement under the standards for disaster preparedness.

Recommendations:

Require each LGU to establish the LDRRMO and fill up the positions provided for the Office in order to have a dedicated office responsible for setting the direction, development, implementation and coordination of the disaster risk reduction and management programs and activities.

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Enjoin the LDRRMCs to monitor and evaluate the implementation of the LDRRMPs.

Require the inclusion of the unspent prior years’ LDRRMF in the preparation of the LDRRMFIP.

Utilize the LDRRMF in accordance with PPAs detailed in the LDRRMFIP and require the complete documentation of all expenditures incurred.

Require the submission of the Monthly Report on Sources and Utilization of the DRRMF, transfer the unexpended LDRRMF to the special trust fund in the Trust Fund books, and revert back to the General Fund the unutilized LDRRMF after five years.

Observe the disaster preparedness minimum standards set by the DILG to effectively prevent and mitigate the risks and impacts of the hazards of calamities.

Comply on the provisions of RA 9184, in the procurement process and in the implementation of procurement contracts.

E. Solid Waste Management

The Local Government Code mandates the LGUs to discharge functions and

responsibilities necessary for the efficient and effective provision of the basic services and facilities which include solid waste disposal system and services or facilities related to general hygiene and sanitation, beautification, and solid waste collection as provided for under Section 17 of this Code.

Further, Republic Act No. 9003 otherwise known as an “Ecological Solid Waste Management Act of 2000”, declared the policy of the State to adopt a systematic, comprehensive and ecological solid waste management program that ensures the protection of public health and the environment and the proper segregation, collection, transport, storage, treatment and disposal of solid waste through the formulation and adoption of best environmental practices.

The law provides the comprehensive solid waste management and the following

institutional mechanism affecting the LGUs:

Every LGU has to establish a Solid Waste Management Board (SWMB) and has to prepare a Solid Waste Management Plan (SWMP) to be approved by the National Solid Waste Management Commission (NSWMC).

Each LGU must adopt and properly implement the components of the SWMP.

The Ecological Solid Waste Management Act of 2000 also provides the financing for the solid waste management known as the “Solid Waste Management Fund.” The LGUs are authorized to collect solid waste management fees, fines and penalties.

However, the CY 2018 audit showed that in 26 LGUs, the collection of solid waste/garbage

fees, fines and penalties was not imposed due to unclear guidelines imposing such fees and violation of solid waste regulation.

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Hereunder is the summary of the reported common audit observations in the CY 2018 AARs on LGUs:

Nature of Deficiency No. of LGUs with the reported deficiency

Total Provinces Cities Municipalities

a) Failure to appropriate funds for the SWM program and activities

1 0 6 7

b) Non-creation/establishment of the SWMB

1 4 30 35

c) Failure to update or formulate the SWMP

11 6 146 163

d) Absence of Multi-Purpose Environment Cooperatives or Association

0 1 1 2

e) Failure to implement effective and efficient waste disposal facility; still operating open dumpsite

2 8 66 76

f) Delay or failure to establish and maintain a sanitary landfill due to non- compliance of requirements

2 8 67 77

g) Failure to establish or maintain Materials Recovery Facility

2 16 82 100

h) Poor enforcement or implementation of the policies and rules of mandatory segregation of waste at source and the proper collection, transfer and storage of solid wastes

2 17 147 166

i) Non-observance of the requirements for collection of solid waste, like wearing protective equipment and relevant trainings to ensure proper handling of waste

1 7 19 27

j) Failure to conduct information and education campaign leading to non-awareness on the rules and regulations on solid waste management

2 5 79 86

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Nature of Deficiency No. of LGUs with the reported deficiency

Total Provinces Cities Municipalities

k) Non-enforcement of rules and regulations and provide Incentives to encourage LGUs to participate and develop SWM

1 0 15 16

l) Failure to comply with the requirements of RA 9003 for the full attainment of an environment-friendly and healthy community.

2 0 31 33

m) Delay or failure to entirely implement the activities in the SWMP

3 1 18 22

n) Non-utilization of fund transfer, financial assistance and appropriation for the implementation of SWMP

0 1 3 4

o) Non-compliance of RA 9003

3 0 9 12

p) Failure to submit or provide documentary requirements on disbursements for solid waste management.

0 5 2 7

Recommendations:

Provide clear guidelines on the collection of garbage or solid waste management fees.

Comply strictly to all provisions of the RA No. 9003, in the formulation of solid waste management plans, adoption of best environmental practices and implementation of the plans, in order to achieve the intended purpose of the law and to ensure protection of public health and environment.

Utilize funds appropriated for environmental programs and activities in order to attain the objective of ensuring protection of public health and the environment.

Conform to the prescribed guidelines for the efficient and effective discharge of its Solid Waste Management function.

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F. Financial Liabilities – Loans Payable Section 296 of Republic Act No. 7160 otherwise known as the Local Government Code of

1991 empowers the Local Government Units (LGUs) to create indebtedness, avail of credit facilities to finance local infrastructure and other-socio-economic projects in accordance with the approved Local Development Plan and Public Investment Program from government or private banks and other lending institutions. Further, Section to 297 of the said law also allows the LGUs to contract loans, credits, and other forms of indebtedness with any government or domestic private bank and other lending institutions to finance the construction, installation, improvement, expansion, operation, or maintenance of public facilities, infrastructure facilities, housing projects, and acquisition of real property. The Department of Finance, as one of the oversight agencies, may render technical assistance to LGUs who wants to avail loans.

The CY 2018 AARs on LGUs disclosed that balances of Loans Payable accounts and Interest Payables accounts are of doubtful reliability due to the following reasons:

a) Loans and Interest were not capitalized nor recorded in the books of accounts;

b) Inadequate documents support the Loans and Interests Payable balances;

c) There were unreconciled/discrepancies of balances between bank records and accounting records;

d) Loans amortizations and interests have not been paid for several years;

e) Penalties were incurred due to non –payment of loan amortizations and interest charges;

f) Information on Loans was not discussed in the Financial Statements; and,

g) Loans will still contracted despite the existence of available cash balances.

Recommendations:

Require the local chief executives to:

Direct the local accountant to review the Loans Payable account to:

a. verify the correctness of the transactions included in the account and their proper classification and presentation in the financial statement;

b. confirm from the grantor/lending agencies to determine the existence of the

loans receivable accounts in their books of accounts; and,

c. prepare the necessary Journal Vouchers (JVs) to adjust the correct accounting entries in recording loans and interests.

With the concurrence of the Sanggunian, set–up the appropriation for payment of monthly amortization and interest of loans. Thereafter, cause the regular payment of loan to avoid penalties.

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G. Audit of Revenue-Generating Programs Section 129 of the 1991 Local Government Code gives full fiscal autonomy to all Local

Government Units (LGUs) the power to create its own sources of revenue and to levy taxes, fees and charges subject to the provisions of the Local Government Code, which income derived therefrom accrue exclusively to LGUs concerned. The Sangguniang Panglalawigan, Panglungsod or Bayan will passed a Resolution or Ordinance authorizing the Provincial/City or Municipal Treasurers to collect taxes, fees and charges.

The CY 2018 AARs on LGUs disclosed the following observations:

a) One Hundred Thirty-Nine (139) LGUs were unable to maximize their revenue earning capabilities resulting in possible losses of P4.485 billion;

b) Revenue Codes of 51 LGUs were not updated, causing the loss of additional income

estimated at P17.946 million; and,

c) Thirty-Four (34) LGUs failed to execute or renew their Contract of Lease. In addition, some contracts were disadvantageous to the government.

Recommendations:

Maximize the operations of stall in the market by leasing vacant stalls to interested constituents.

Update/Revise the LGUs’ Revenue Code to generate more income.

Require the Provincial/City/Municipal Treasurers to issue demand letters for delinquent taxpayers and institute/file appropriate action against the delinquent taxpayers.

Enjoin the Local Treasurers to revisit the lease contract agreements executed by the local government unit to update the terms and conditions in order to become advantageous to the government.

H. Payment to Casuals, Job Orders, Contractuals and Consultants Title III, Section 77 of Republic Act No. 7160 - Responsibility for Human Resources and

Development, provides that the chief executive of every LGU shall be responsible for human resources and development in his unit and shall take all personnel actions in accordance with the Constitutional provisions on civil service, pertinent laws, rules and regulations thereon, including such policies, guidelines and standards as the Civil Service Commission may establish. However, the local chief executive may employ emergency or casual employees or laborers paid on a daily wage or piecework basis and hired through job orders for local projects authorized by the Sanggunian concerned, without need of approval or attestation by the Civil Service Commission provided that the period of employment of emergency or casual laborers does not exceed six months.

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Payments to casuals, job orders (JOs), contractuals, consultants, private lawyers, and legal researchers follow the regular process of financial transactions in the LGUs.

In the review of the CY 2018 transactions pertaining to payments to casuals, JOs,

contractuals, consultants, private lawyers, and legal researchers, the Auditors reported the following observations.

Hiring:

a) Eighty-three (83) LGUs continuously hired casuals, JOs, contractuals, and consultants to

augment their regular workforce. The casuals, JOs and contractuals were assigned to perform regular/recurring and administrative functions, which were not related to the implementation of specific local projects; while consultants were hired for the jobs that were not considered highly technical in nature and were within the capacity of agency personnel to perform, thus, resulting in excessive workforce, duplication of work and eventual wastage of government funds.

b) The necessity and reasonableness of hiring JOs and contractual workers of 31 LGUs could not be validated and ascertained due to absence of well-defined system to justify the exigency of their services. There were no written policies or guidelines on the hiring of job order and contract of service personnel, thereby, casting doubt on the validity of expenditures incurred therefor.

c) Four legal consultants were hired by two LGUs without the required written conformity of the Solicitor General and the concurrence of the Commission on Audit (COA) contrary to COA Circular No. 98-002 dated June 9, 1998, thereby, incurring irregular expenditures totaling P595,000.00.

d) The hiring of 74 consultants in nine LGUs was not made in accordance with R.A. No. 9184, or “The Government Procurement Reform Act”, and its Implementing Rules and Regulations, thus, casting doubt on the propriety and regularity of the consultancy expenses totaling P11.232 million.

Contracts: a) JO personnel of 20 LGUs were hired without job order contracts or Memorandum of

Agreement, contrary to Civil Service Commission (CSC) Resolution No. 06-2256 dated December 20, 2006 as embodied in CSC Memorandum Circular No. 1 s. 2007 and COA Circular No. 2012-001 dated June 14, 2012.

b) Contracts of employment with the JOs did not contain statements of duties and responsibilities or specific nature/scope of works to be performed contrary to the governing rules of the CSC and the COA, thus, the incurrence of consultancy services totaling P95.359 million was not justified.

Payment of Wages and Allowances: a) Payment of wages to consultants, contractuals and JO personnel by 46 LGUs totaling

P239.233 million were not supported with complete and proper documentation in violation to Section 4(6) of Presidential Decree (PD) 1445 (Claims against government funds shall

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be supported with complete documentation) and COA Circular No. 2012-001 dated June 14, 2012 (Prescribing the Revised Guidelines and Documentary Requirements for Common Government Transactions).

b) Additional benefits/allowances totaling P1.321 million were paid to contractuals and JO personnel of 11 LGUs even if they were not entitled to it. These benefits/allowances include clothing allowance, per diems, travelling/transportation expenses, overtime pay, personnel economic relief allowance (PERA), and mid-year and year-end bonuses. Likewise, financial assistance in the form of Calamity Relief and Economic Assistance (CREA) was granted to the Contract of Service workers and volunteer workers of the barangays by two LGUs without any legal basis authorizing the receipt thereof.

c) Payment of wages to JO personnel totaling P40.189 million of two LGUs were

inappropriately charged to Salaries and Wages –Casual/Contractual account under Personnel Services (PS), instead of Maintenance and Other Operating Expenses (MOOE), thereby, misstating the affected accounts in the financial statements at year-end.

d) JO personnel of four LGUs were paid below the prevailing minimum wage rates for the

services they have rendered, as approved by the Regional Tripartite Wages and Productivity Board of the Department of Labor and Employment (DOLE), thus, depriving the JO personnel of compensation due them.

Documentation of services: a) There were no biometric entries in the morning OUT and in the afternoon IN of the daily

time records (DTRs) of the contractuals and JO personnel of one LGU. Likewise, entries in their DTRs do not match to the entries in the accomplishment reports, thus, casting doubt as to the propriety of their claims.

b) The services rendered 22 technical assistants of one LGU could not be verified due to the absence of appropriate entries and specific information in their DTRs and accomplishment reports as proof that the required number of hours of service have been rendered and the expected output have been delivered, thus, the propriety and regularity for the payments of their compensation could not be ascertained.

c) Some casuals, contractuals, and JO personnel of two LGUs did not present themselves during the physical validation, thereby, castingt doubt on the existence and identity of the casuals, contractuals, JOs and holders of contracts of service.

Recommendations:


Prepare a thorough study and evaluation of the LGUs’ needs for additional personnel to avoid excessive hiring of JOs and contractuals. Fill up vacant plantilla positions to minimize the hiring of job orders and contract of service workers especially those performing clerical, administrative and regular functions. Also, ensure that the hiring of JOs and contractual personnel is based on the actual

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need of the LGUs to perform a piece of work or intermittent job of short duration in accordance with Civil Service laws;

Enjoin the Human Resource Management Officer to clearly define the works or activities to be accomplished through hiring of consultants, contractuals and JO personnel. Include the duties and responsibilities, expected outputs/deliverables, terms of reference and time frames in the contracts to be used as bases in justifying the need for the contracts of services;

Formulate clear policy guidelines in hiring of JOs and contractual personnel providing the conditions when services may be contracted, period within which the workers will render their services, qualification standards, required documents to be submitted by applicants and screening process;

Require the JOs and contractual personnel to submit personal records and undergo interview to establish their identities and qualifications;

Stop the hiring of legal consultants without the required conformity and concurrence of the Solicitor General and the COA, respectively, and other consultants as additional personnel when there are regular employees capable of rendering the same services to be required of said consultants;

Strictly adhere to the provisions of R.A. No. 9184 on the procurement of consulting services;

Ensure that payments of wages and/or consulting services to contractual/JOs/consultants are based on actual and complete services rendered and supported with complete and proper documentation, as prescribed, to prove the validity and propriety of the claims. Direct the hired contractuals, JOs, and consultants to submit the duly certified DTRs and accomplishment reports to support the claim for wages;

Stop the practice of granting ineligible benefits/allowances to contracted personnel. Further, secure a legal basis to warrant the giving of the CREA to aid in the determination of the propriety and validity of the disbursements; and

Monitor the activities and accomplishments of contracted personnel. Enforce the fulfilment of responsibilities as provided for in their respective contracts.

I. Enforcement of COA Disallowances and Charges Article IX-D of the 1987 Philippine Constitution grants the Commission on Audit (COA) the

power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue/receipts and expenditures/uses of government2 funds and properties. Further, the

2 Or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a

post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity.

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Constitution states that the COA has the exclusive authority to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties.

Pursuant to the above-mentioned provisions, the Commission issued COA Circular No. 2009-006 dated September 15, 2009 to prescribe the COA Revised Rules and Regulations on Settlement of Accounts.

In the audit of the transaction documents and accounts, the auditor issues an audit decision which may be in the form of a Notice of Suspension (NS), Notice of Disallowance (ND), or Notice of Charge (NC). Unsettled NSs within the prescribed period mature into a disallowance or charge. The auditor issues the ND or NC, as the case may be, which needs to be settled within the prescribed period. Unsettled NDs or NCs within the prescribed period become final and executory and the auditor issues a Notice of Finality of Decision (NFD) to inform the agency head that such decision has become final and executory. The NFD then becomes the basis for the recognition of the disallowance/charge in the agency’s books of accounts.

The agency head ensures the settlement of the suspensions, disallowances, and charges within the prescribed period, while the auditor monitors the enforcement of the settlement thereof. The auditor issues a COA Order of Execution (COE) to enforce the settlement of audit disallowance/charge, whenever the persons liable refuse or fail to settle the same after the decision has become final and executory.

The table below shows the LGUs’ unsettled suspensions, disallowances, and charges as at the end of CY 2018.

Region # of

LGUs Suspensions

(in millions of pesos)

Disallowances (in millions of pesos)

Charges (in millions of pesos)

Total (in millions of pesos)

NCR 19 1,361.595 3,201.870 44.936 4,608.401

CAR 61 178.613 550.728 8.903 738.244

BARMM 23 2.939 90.732 - 93.671

Region I 22 1,861.407 53.524 - 1,914.931

Region II 31 10.032 150.418 - 160.450

Region III 80 1,729.772 1,085.626 0.525 2,815.923

Region IV-A 2 - 68.528 7.650 76.178

Region IV-B 18 10.162 67.336 - 77.499

Region V 1 0.690 28.397 - 29.086

Region VI 1 - 23.151 - 23.151

Region VII 3 0.691 5.424 - 6.115

Region VIII 14 - 49.186 - 49.186

Region IX 4 3.668 8.662 1.369 13.699

Region XI 6 10.900 11.601 - 22.501

TOTAL 285 5,170.469 5,395.183 63.383 10,629.035

The recovery of disallowances and charges that have become final and executory

registered a low percentage despite the issuance of COA Order of Execution due to management’s inability to enforce settlement through withholding of salaries from persons liable or deduction from the claims/terminal leave pay of retiring employees. Also, the difficulty in locating those persons

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liable who were already separated from the service, contributes to the accumulation of the disallowances and charges.

Audit disallowances that have become final and executory totaling P11.795 million were not recorded in the books of accounts of seven LGUs, thus, understating the Receivables – Disallowances/Charges account balance. Recommendations:

Enforce the settlement of all audit suspensions, disallowances and charges in compliance with COA Circular No. 2009-006 dated September 15, 2009; and

Require the recognition of the disallowances and charges that have become final

and executory in the books of accounts.

J. Compliance with Tax Laws Section 80(A) of Republic Act (R.A.) No. 8424, or the National Internal Revenue Code (NIRC) of 1997, provides that the employer shall be liable for the withholding and remittance of the correct amount of tax required to be deducted and withheld from the compensation of the employees. It is further provided therein that, if the employer fails to withhold and remit the correct amount of tax, such tax shall be collected from the employer together with the penalties or additions to the tax otherwise applicable in respect to such failure to withhold and remit. Section 2.81 of the Bureau of Internal Revenue (BIR) Revenue Regulations No. 2-98 dated April 17, 1998, as amended, requires that the taxes withheld on compensation shall be remitted on or before the 10th day of the month following the month in which the withholding was made, to any authorized agent bank within the Revenue District Office (RDO), or in places where there are no agent banks, to the Revenue District Officer of the City or Municipality where the withholding agents’/employers’ legal residence or place of business or office is located. Likewise, the creditable and final withholding taxes deducted and withheld by the withholding agents are required to be remitted to the authorized agent banks within the jurisdiction of the RDO not later than the last day of the month following the close of the calendar quarter during which the withholding was made, pursuant to R.A. No. 10963 otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act dated December 19, 2019 and BIR Revenue Regulations No. 11-2018 dated January 31, 2018. For CY 2018, the Auditors reported the following observations as to compliance with tax laws and regulations by the LGUs:

a) Taxes withheld on salaries/compensation and payment to suppliers/creditors totaling P208.759 million of 81 LGUs were not remitted to the BIR within the prescribed period. On the other hand, one LGU incurred over-remittance to the BIR for taxes withheld on employees’ compensation and payment to creditors amounting to P183,366.61.

b) Taxes on (i) payment for the procurement of goods; (ii) fees to consultants and

professionals; (iii) wages to job order and contractual personnel; (iv) overtime pay to employees; (v) bonuses/allowances to officials and employees; and (vi) honoraria of the

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Bids and Awards Committee (BAC) Members, Technical Working Group and Secretariat totaling P13.573 million were not withheld by 20 LGUs. Further, five LGUs improperly withheld taxes on compensation of officials and employees, payment to suppliers of goods and services, and payment for infrastructure contracts aggregating P2.312 million. However, the Representation Allowance and Transportation Allowance (RATA) granted to the officials of one LGU were subjected to withholding tax.

c) The accuracy and propriety of the balance of Due to BIR account totaling P20.444 million of nine LGUs could not be ascertained due to the following reasons:

o The balance has been outstanding or dormant for more than a year as the origin and details of the amount could not be determined;

o There were variances on the monthly remittances as against the taxes withheld; o Documents were not submitted to show proof of remittances to the BIR and

adjusting entries were not prepared on stale checks issued to BIR; and o The Accounting Office did not maintain subsidiary ledger to monitor and reconcile

the remittances against the taxes withheld. Recommendations:

Require the Local Chief Executives to compel the LGU fiscal officers to:

Strictly comply with the regulations set by the BIR as regards the withholding of taxes and prompt remittances thereof to avoid incurrence of fines and penalties; and

Maintain subsidiary ledgers for each supplier/creditor/employee to monitor the taxes withheld from them and their remittance to the BIR.

K. Remittance of Mandatory GSIS, PhilHealth and Pag-IBIG Contributions and Loan Amortizations

Section 6(a) of R.A. No. 8291 or “The Government Service Insurance System (GSIS) Act of 1997” provides that all employers shall deduct each month from the monthly salary or compensation of each employee the contribution payable by the employee in accordance with the schedule prescribed therein. Further, Section 6(b) thereof provides that the employees’ and employers’ contributions shall be directly remitted to the GSIS within the first ten days of the calendar month following the month to which the contributions apply, and that the remittance of the contributions to the GSIS shall take priority over and above the payment of any obligations, except salaries and wages of the employees. Section 17, Rule III of the IRR of R.A. No. 7875 or the “National Health Insurance Act of 2013” provides that all government agencies are required to include the payment of premium contributions in their respective annual appropriations. Further, Section 18 thereof provides that the premium contributions shall be divided equally between the employer and the employee. The members’ monthly contributions shall be deducted and withheld automatically from their salary, wage or earning, and that the employer’s counterpart shall not be charged to the employees. The premium contributions shall be remitted to the Philippine Health Insurance Corporation (PHIC) by the employer on or before the date prescribed by the PHIC.

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Section 2, Rule VII of the Implementing Rules and Regulations of R.A. No. 9679, otherwise known as the “Home Development Mutual Fund (HDMF) Law of 2009” or Pag-IBIG provides that the monthly contributions of the members shall be collected through payroll deductions by their respective employers. Section 3(a) thereof further provides that the contributions of the employer and its employees, and the loan amortizations or payments, shall be remitted within 15 days from the date the contributions/loan amortizations were collected unless another period is previously agreed upon between the employer and the HDMF, or within such periods as the HDMF may prescribe otherwise. Review of the CY 2018 LGUs’ compliance with the withholding and remittance of the mandatory GSIS, PhilHealth and Pag-IBIG contributions and loan amortizations disclosed the following observations as reported in the AARs:

a) Premium contributions and loan amortizations withheld from the salaries of employees totaling P146.130 million of 90 LGUs were not remitted or partially remitted to the GSIS, PHIC and HDMF, while 23 LGUs incurred delays in the remittance of mandatory contributions and loan amortizations totaling P42.839 million to the concerned government financial institutions.

b) Four LGUs did not withhold from the salaries and wages of the employees the mandatory

contributions and loan amortizations totaling P1.285 million for the GSIS, PhilHealth and Pag-IBIG resulting in the non-remittance of premiums, contributions and loan amortizations to the GSIS, PHIC and HDMF. On the other hand, two LGUs incorrectly computed and withheld the contributions totaling P205,776.89, resulting in the remittance of inaccurate contributions to the concerned government financial institutions.

c) The LGUs’ share on the Pag-IBIG premium contributions totaling P4.658 million of 17 LGUs exceeded the allowable maximum share per employee resulting in the over-remittance thereof to the HDMF.

d) The amount withheld for premium contributions and loan payments in seven LGUs were different from the amount actually remitted to the concerned government financial institutions resulting in a total discrepancy of P2.491 million.

e) Twenty-Two (22) LGUs failed to reconcile their records with that of the GSIS, PhilHealth and Pag-IBIG resulting in an unreconciled amount of P7.833 million.

f) Eleven (11) LGUs reported negative balances totaling P22.504 million in their Due to GSIS, Due to Pag-IBIG and Due to PhilHealth accounts as of December 31, 2018.

Recommendations:

Require the Local Chief Executives to enjoin the fiscal officers to:

Remit all withheld funds due to the GSIS, PhilHealth and Pag-IBIG within the prescribed period to avoid incurrence of interest, penalties and surcharges;

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Observe their duty/responsibility to withhold the mandatory contributions and loan amortizations from the salaries of the employees and remit the same to the GSIS, PhilHealth and Pag-IBIG;

Apply the mandatory rate for the LGUs’ share to avoid excessive payment of monthly contributions; and

Regularly reconcile the amounts withheld and remitted with the records of the GSIS, PhilHealth, and Pag-IBIG in order to ascertain the accuracy and reliability of the balances of Due to GSIS, Due to PhilHealth, and Due to Pag-IBIG accounts in the financial statements.

L. Gender and Development

Republic Act (RA) No. 9710, otherwise known as the “Magna Carta of Women (MCW)” was enacted on August 14, 2009 to eliminate discrimination against women by recognizing, respecting, protecting, fulfilling and promoting the rights of Filipino women, especially those in the marginalized sectors.

The MCW provides that the cost of implementing GAD programs shall be the agency’s or the LGU’s GAD budget which shall be at least five percent (5%) of the agency’s or the LGU’s total budget appropriation.

Pursuant to the MCW, the Philippine Commission on Women (PCW), the Department of the Interior and Local Government (DILG), the Department of Budget and Management (DBM), and the National Economic and Development Authority (NEDA) issued Joint Memorandum Circular (JMC) No. 2013-01 to prescribe the policies and procedures in mainstreaming gender perspectives in: (a) local planning, programming, and budgeting; (b) local legislation; and (c) project development, implementation, monitoring and evaluation. The JMC aims to align efforts of LGUs and National Government on Gender and Development with its commitments to international pronouncements.

On January 12, 2016, PCW-DILG-DBM-NEDA JMC No. 2016-01 amended some parts of JMC No. 2013-01 particularly Sections 4.1.C (Gender and Development Planning and Budgeting) and 5.0 (Monitoring and Evaluating the Implementation of the Magna Carta of Women). The issuance clarifies the process of costing, allocation and attribution of the GAD budget, and the review, endorsement and monitoring of the GAD Plans and Budget (GPBs) and GAD Accomplishment Reports (GAD ARs) of the LGUs.

The CY 2018 AARs showed the following audit observations on the review of the LGUs’ compliance with the GAD policies on the institutionalization, planning and budgeting:

a) Seventeen (17) LGUs allocated less than the 5% of its total budget appropriation for the implementation of GAD related programs, projects and activities.

b) Twenty-Eight (28) LGUs failed to create and/or strengthen the GAD Focal Point System;

c) Twelve (12) LGUs did not formulate GAD Code;

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d) A total of 124 LGUs did not establish/maintain the required GAD Database;

e) Twenty-One (21) LGUs did not institutionalize a GAD Monitoring and Evaluation (M&E) System, while five LGUs needed to improve their GAD M&E System;

f) Fifty-Three (53) LGUs did not administer the Harmonized Gender and Development

Guidelines (HGDG) tool in the design, management, implementation, evaluation and monitoring of their GAD programs and projects, while the HGDG analysis of one LGU was administered using inappropriate checklist and without means of verification;

g) Fifty-One (51) LGUs failed to prepare and/or submit their GPBs to the DILG for review and

endorsement while 82 LGUs failed to submit their GAD ARs. Further, the GPBs and/or GAD ARs of 68 LGUs were not submitted to the Auditor for evaluation. Also, the DILG overlooked to review and endorse the GPBs of five LGUs due to delayed submission thereof.

On the other hand, audit of the implementation of the GAD plan and budget disclosed the

following observations:

a) Sixty-Six (66) LGUs allotted/utilized its GAD fund totaling P350.924 million on projects/activities that do not clearly address gender-related issues.

b) GAD fund totaling P1,177.311 million of 121 LGUs was not utilized due to non-

implementation or partial implementation of its programs, projects and activities, thus, the identified gender issues were not fully addressed. Inadequate planning, lack of monitoring in the implementation, and lack of manpower to implement the GAD activities caused the partial/non-implementation thereof.

Recommendations:

Strictly comply with PCW-DILG-DBM-NEDA JMC Nos. 2013-01 and 2016-01.

Ensure that the programs, projects and activities are aligned with GAD-related undertakings so that the intended beneficiaries are assured of the services, protection, and other assistance that the GAD provision seeks to provide.

Fully implement the GAD programs, projects and activities identified in the GPBs in order to recognize the fundamental equality of women and men and ensure responsive governance.

PART III

SUMMARY OF AUDIT

OBSERVATIONS AND

RECOMMENDATIONS

ON BARANGAYS

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Summary of Audit Observations and Recommendations on Barangays

The following is the summary of audit observations and recommendations culled from the submitted CY 2018 Annual Audit Reports on barangays:

Observations Recommendations

A. Submission of Accounts

1. Barangays numbering 1,054 were unable to submit or were delayed in the submission of Disbursement Vouchers, Supporting Documents and other required Reports.

Enjoin the Barangay Treasurers to adhere strictly to the provisions of COA Resolution No. 2008-011 dated October 10, 2008, re: Custody of all financial records of the barangays and the rendition of accounts by the barangay treasurer and Section 3.1 of COA Circular No. 2012-005 dated December 7, 2012, regarding the timely submission of Disbursement Vouchers and their supporting documents, to ensure the validity and propriety of the transactions of the Barangays.

2. Cash and Check disbursements of 301 barangays were unsupported by Disbursement Vouchers (DVs) and supporting documents.

Ensure that all disbursements are supported by approved disbursement vouchers.

3. A total of 384 barangays processed disbursements without supporting documents/ incomplete documentation.

The Punong Barangay should ensure the legality, propriety and validity of transactions by complete supporting documentation in conformity with the provisions of Sec. 4(6) of PD 1445 which provides that “claims against government funds shall be supported with complete documentation.”

4. Unrecorded disbursements amounting to P87,233.37 of 36 barangays affected the fair presentation of cash, liability and expense accounts in the financial statements resulting in the overstatement of assets and understatement of expenses/liabilities.

Require timely submission of disbursement vouchers with complete supporting documents and prepare the Summary of Checks Issued whenever a check is issued for the barangay bookkeeper to record the disbursements and purchases. Strict adherence to the provisions of Sections 114 and 121 of the Manual on New Government Accounting System (NGAS) is hereby enjoined.

5. Barangays totalling 651 failed to prepare and submit the Registry of Appropriations and Commitments (RAC) and the Status of Appropriations, Commitments and Balances (SACB) to the Municipal Budget Officer for consolidation as of December 31, 2016. The practice was contrary to the Policies and Guidelines for Appropriations and Commitments, Systems and Procedures Manual on the

Prepare the RAC and SACB in accordance with the prescribed policies and guidelines and submit same for review and consolidation by the Municipal Budget Officer. Require the Barangay Treasurer to submit the PBC and TL within ten (10) calendar days after the end of the month, in compliance with Section 3.1 of COA Circular No. 2012-005 dated December 7, 2012.

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Management of Barangay Funds and Property, Volumes I, II and III and Section 4 (1) of Presidential Decree No. 1445, resulting in possible disbursements in excess of their appropriations. In addition, The Punong Barangay’s Certification (PBC) and Transmittal Letter (TL) were not submitted within ten (10) days after the end of the month, contrary to Commission on Audit (COA) Circular No. 2012-005 dated December 7, 2012, thereby increasing the risk that the efficiency, economy and effectiveness of barangay operations/transactions may not be monitored properly.

6. General and Subsidiary Ledgers for the accounts of 512 barangays of four regions were not maintained/not reconciled by the Municipal Accountant contrary to the Duties and Responsibilities of the City/Municipal Accountant in the Accounting System Manual for Barangay, Volume IV. Thus, the correctness of the balances of the accounts cannot be properly determined.

Require the City/Municipal Accountant to maintain/reconcile general and subsidiary ledgers for all accounts of the barangay in accordance with the prescribed rules and regulations.

B. Cash

1. Barangay collections of 1,142 barangays amounting to P9,065,396.00 in seven regions were not deposited promptly and intact with the authorized depository banks.

Direct the Barangay Treasurers to strictly comply with the policies and procedures provided in the Systems and Procedures Manual on the Management of Barangay Funds and Property on the deposit of barangay collections.

2. Cash receptacle or safe/vault was not maintained by 132 barangays in four (4) regions for the safekeeping of collections, unused accountable forms and other important documents thus, exposing Barangay funds to risk of loss or theft.

Include in the ensuing budget, the provision for a cash safe or vault for the safekeeping of government funds, accountable forms; (b) require the Barangay Treasurer to keep all collections of the barangays in a cash safe or vault, properly secured and maintained in the Barangay Hall.

3. A number of Official Receipts were not issued in numerical sequence in 28 barangays in three regions contrary to existing regulations. This created difficulty in the accounting of collections and exposed the barangay collections to misappropriation and the official receipts to misuse and/or loss.

Require the barangay treasurer to issue the official receipt in numerical sequences to acknowledge every receipt of payment for proper accounting of collections and recording in the books of accounts.

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4. Cash shortages totaling ₱3,782,751.07 were discovered in six barangays of CAR, Regions II, VIIII and XI during the conduct of cash examination due to lapses in handling cash advances, cash receipts/collections and disbursements of public funds.

Require the concerned accountable officers to restitute the full amount misappropriated and relieve them from their post.

5. The Imprest System in handling cash was not adopted in 172 barangays which was not in line with the general principles stated in COA Circular No. 97-002 dated February 10, 1997. Also, frequent reimbursements and immoderate use of the Petty Cash Fund revealed of weak internal control system in handling cash which may result in possible loss or misuse of government funds.

Cause the adoption of imprest system in handling cash as provided in Section 2 of COA Circular No. 97-002 to ensure that payments are made directly to the suppliers or creditors. The Punong Barangay should ensure that (a) disbursements be made directly to suppliers in the form of check to ensure the withholding of the applicable taxes due the government; (b) only payments in small amount should be paid out of the petty cash fund to minimize and regulate the replenishment of the fund; (c) Petty Cash Voucher (PCV) is prepared and duly supported with documents evidencing the transactions for approval; and (d) the procurement activities are properly planned in an effective and efficient manner.

6. Bank Reconciliation Statements of 946 barangays in five regions were not made available at the time of audit in accordance with the provision on Accounting Policies on Receipts and Deposits, Vol. IV of Systems and Procedures Manual on Management of Barangay Funds, Section 3.2 of COA Circular No. 96-011 and Section 74 of P.D. 1445.

Punong Barangays and Accountants should ensure that Bank Reconciliation Statements are prepared to ensure timely detection of errors requiring adjustments.

7. Unbooked items for adjustments were noted in the Bank Reconciliation Statements of 343 barangays in 10 regions resulting in unreliable balance of the Cash in Banks accounts contrary to Section 74 of PD 1445 and Section 3 of COA Circular No. 96-011.

Direct the Accountant to effect the necessary adjustments in the books of accounts to present fairly the balances of the cash accounts in the financial statements.

8. The monthly Report of Accountability for Accountable Forms (RAAF) of 288 barangays were not prepared and submitted as required in Volumes I and III of the Systems and Procedures Manual on the Management of Barangay Funds

Require the Barangay Treasurers to regularly prepare and submit RAAF and update their Cashbooks/Cash Registries regularly in accordance with the provisions on the Reporting Procedures in the Systems and Procedures Manual on the Management of Barangay Funds

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and Property; thus, actual accountability could not be immediately ascertained as of a given period. Lack of updated barangay Cashbooks/Cash Registries was likewise observed. Proper turnover of money and property accountabilities was not made by the outgoing to the incoming barangay officials contrary to the basic policy in the management of barangay funds and properties.

and Property, Volume III. The Punong Barangay should demand for the settlement of accountabilities by the former barangay officials and an invoice receipt covering a detailed listing of their accountabilities as of the date of the transfer in addition to the Property Acknowledgement Receipt and the RAAF.

The outgoing barangay officials should likewise seek clearances from money and property accountabilities using the prescribed form Transfer of Money and Property Accountability (TMPA). In addition, the incumbent barangay officials shall not effect the payment on the last claim for honoraria in the absence of the TMPA as supporting documents thereto.

9. Long outstanding Dormant Accounts noted in 36 barangays in two regions.

Exert all efforts to locate the records/documents supporting the dormant accounts for analysis/review of accounts

10. Paid vouchers, payrolls and supporting documents of 381 barangays from two regions were not stamped "PAID" as prescribed under Item 2-Q of the COA Circular No. 92-389 dated November 3, 1992.

Ensure that all paid vouchers and their supporting documents are stamped/marked “PAID” after payment or upon release of the check to avoid risk of double payment of the same transaction.

C. Cash Advances

1. Cash Advances amounting to P35,684,764.74 for 666 barangays in nine regions remained unliquidated as of year-end. Additional cash advances were granted to officers and employees despite non-settlement of previous cash advances, in violation of Sections 4.1.2 and 5.1 of COA Circular No. 97-002 dated February 10, 1997.

Punong Barangays should direct the immediate and full settlement of existing cash advances. Concerned barangay officials should strictly observe the guidelines on the granting and liquidation of cash advances as provided for under COA Circular No. 97-002 dated February 10, 1997. The immediate liquidation and settlement of all cash advances as of December 31, 2011 should be demanded pursuant to COA Circular No.2012-004 dated November 28. 2012.

2. Accountable officers of 501 barangays from twelve regions were not covered or have inadequate fidelity bond coverage.

Secure all barangay accountable officers with adequate fidelity bond equivalent to the maximum accountability in order to safeguard the barangay’s assets in case of loss through theft, misappropriation and other loss due to fortuitous events. Appropriate funds to cover the payment of premiums on the renewal of the fidelity bonds.

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D. Receivables

1. Prior years’ audit disallowances of 48 barangays from four regions remained unsettled and unrecorded in the books of accounts.

Direct the Barangay Bookkeeper to record in the books the total disallowed amount. Enforce settlement of the audit disallowances of payees or persons identified to be liable who are still in service with the barangay.

E. Procurement

1. Procurements were made by 213 barangays insix regions without the approved Annual Procurement Plan (APP) contrary to Article 431, Rule XXXV of the Implementing Rules and Regulations (IRR) of Republic Act (RA) 7160 and Section 7 of RA 9184.

Prepare and comply with the Annual Procurement Plan for the effective management of its procurement requirement to avoid unnecessary purchases and wastage of government funds.

2. Supplies requirements of 367 barangays inseven regions were not purchased from the Procurement Service (PS), Department of Budget and Management (DBM), contrary to Section 53.5 of the IRR of RA 9184 and Administrative Order No. 17 dated July 28, 2011.

The Punong Barangay should enforce DBM Circular and Administrative Order on the procurement of commonly used supplies and equipment from the PS-DBM.

3. There were 389 barangays infive regions without Bids and Awards Committee (BAC) responsible for the procurement activities of the Barangays. Sixty-one barangays with BAC were found deficient on their duties and functions as regard procurement deficiencies on eligibility requirements/technical documents in violation of the Revised IRR of RA 9184.

Punong Barangays should create the BAC pursuant to Republic Act 9184 and its Implementing Rules and Regulations and GPPB Circular No. 03-2013 dated April 26, 2013 to be responsible of all procurement activities in the barangay.

4. Procurement of goods/services of 331 barangays in 5 regions were made thru selective/shopping/canvass instead of public bidding in violation of Section 10, Rule IV of the IRR of Republic Act (R.A.) 9184. There were purchases paid thru reimbursements while some procurements were made through small value procurement/split in disregard of the principles of transparency, competitiveness and efficiency espoused by R.A. 9184. As such, there was no assurance that the items were procured at prices most advantageous to the government in violation of Section 54.1 of

Adhere strictly to the provisions of R.A. 9184 in the procurement of goods and services. Procure supplies in bulk through competitive public bidding. Procurement through alternative methods of procurement may be resorted to only upon compliance with the required conditions set under Sections 48-54 of the Revised Implementing Rules and Regulations (R-IRR) of R.A. 9184.

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the R-IRR of R. A. 9184. Likewise, some procurement of supplies and equipment indicated the brand name of the item in violation to Section 18 of R.A. 9184.

F. Inventories, and Property, Plant and Equipment

1. Two thousand six hundred thirty-eight barangays in seven regions were unable to conduct physical count of Inventories, and Property, Plant and Equipment (PPE) at year-end and no Report on the Physical Count of Property, Plant and Equipment (RPCPPE) were submitted.

Conduct physical count of all barangay property to establish their existence and condition and facilitate proper financial statement classification in compliance with the provisions of the Systems and Procedures Manual on the Management of Barangay Fund and Property, Volume III.

2. The PPE accounts in 1,480 barangays in five regions were not reconciled against the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Ensure that Barangay Bookkeepers maintain subsidiary ledgers and reconcile property, plant and equipment balance with the physical inventory reports. Identify the causes of the discrepancies so that the necessary adjustments in the books could be made.

3. Depreciation Expenses and Allowance for Depreciation for PPE accounts were not provided by 341 barangays from six regions.

Require the Accountants to provide depreciation expenses and allowance for depreciation for all the PPE accounts of the barangays for the proper recognition of the depreciation expense and a fair presentation of the book values of PPEs in compliance with prescribed policies and guidelines under the Accounting System Manual for Barangay, Volume IV.

4. Property Acknowledgement Receipt (PAR) and PPE Registers were not prepared by 46 barangays in two regions, while those with PAR and PPE Registers, records were not updated.

Require the Property Officers to issue PAR to all officers and employees who were issued government properties for control purposes. PPE Registers should be maintained for control and monitoring purposes. These registers should be reconciled regularly with the recorded PPE in the books of accounts so that any difference can be promptly resolved.

5. Costs of land/lots in 14 barangays were not recorded or taken up in the books of accounts in view of the lack of documents supporting ownership thereof.

Management should exhaust all possible means to document the ownership of the land/lots through Transfer Certificate of Title in the name of the Barangay in coordination with the Municipal Assessor. In recording, land/lots acquired thru purchase or donation should be recorded at cost including incidental expenses in order to present it fairly in the financial statements.

506


6. Various properties with insurable risk of 114 barangays in four regions were not insured with the Property Insurance Fund of the GSIS which is not in line with the provisions of R.A. 656 otherwise known as the “Property Insurance Law” and Item No. 6.

Insure all the Barangay insurable properties pursuant to the provisions of R.A. 656 and on the basic policies and procedures of the System & Procedures Manual on the Management of Barangay Funds and Property.

7. Obsolete and unserviceable properties of 105 barangays inthree regions have not been disposed of and still included in the Physical Inventory report.

Instruct the Accountant to reclassify the cost of unserviceable asset to the Other Asset account in accordance with NGAS. Consider the immediate disposal of unserviceable properties.

8. Barangays in numbering to 101 in three regions did not adopt the perpetual inventory method in the inventory valuation of Other Supplies Inventory.

Adopt the perpetual inventory system in the inventory valuation and effect the necessary adjustments in order to present fairly and accurately the Other Supplies Inventory account in the financial statements.

G. Payables

1. Long outstanding payables of seven barangays have not yet been reverted to Unappropriated Surplus account.

Effect the adjustments of the accounts pursuant to the guidelines on the handling of accounts payable and require the Accountant to revert certain accounts payable with no actual claim filed, administrative or judicial and which are not covered by perfected contracts on record.

H. Remittance to other Government Entities

1. Three Hundred Sixty-Five barangays were unable to remit the taxes withheld to the BIR. Likewise, three hundred fifty-seven barangays were delayed in the remittance of the same to the BIR. There were instances of failure to withhold VAT in violation of BIR Regulation Memorandum Circular No. 23-2007 dated March 20, 2007.

Direct the Barangay Treasurers to remit, in full, taxes withheld within the prescribed period to BIR to avoid incurrence of penalty charges.

I. Fund Transfers

1. Due from Other LGUs account of 168 barangays in seven regions remained unremitted to the barangay, thus depriving the barangay of the additional resources needed for its operation.

Make representations to the Municipal Mayor and Municipal Treasurer for the early release of the RPT shares and municipal aid to the barangay, to provide additional resources to finance its operation.

2. Funds of 65 barangays which were transferred from other local government units and recorded as receivables in the account Due from/Due to Other LGUs

Exert effort in locating the documents and look for the details of the aforesaid balance. Verify the real status of the projects/activities funded by these funds. Prepare Statement of Liquidations

507


were carried over in the book of accounts of the Barangay despite being inactive or non-moving for more than three to ten years contrary to COA Circular No. 2016-005 dated December 19, 2016. No actions have been taken by concerned barangay officials to monitor the status of implementation of programs and projects funded.

for proper reporting and accounting of the funds utilized and return any unutilized amount pursuant to COA Circular No. 94-013.

J. Development Funds

1. The 20% Development Fund of 1,643barangays fin nine regions were not fully utilized in accordance with Section 287 of the Local Government Code (RA 7160) and DILG-DBM Joint Memorandum Circular No. 2011-1, dated April 13, 2011.

Utilize fully the 20% Development Fund in accordance with the purpose as mandated by the DILG-DBM Joint Memorandum Circular No. 2011-1 dated April 13, 2011.

K. Gender and Development (GAD)

1. Failure of 822 barangays in nine regions to appropriate funds or to appropriate funds equivalent to the minimum five percent (5%) of their local annual appropriations and to create a GAD Focal Point resulted to non-implementation of programs designed to address the gender issues for women empowerment and gender equality. Gender and Development (GAD) Plan, Program and Budget (GPB) and Accomplishment Report (AR) were not prepared and submitted to DILG contrary to JMC No. 2013-01 of the PCW-DILG-DBM-NEDA thus, depriving the targeted beneficiaries of the opportunity to avail of the benefits derived therefrom.

Formulate the GAD Plan which contain projects and activities on gender issues that may be embedded in regular projects of the LGUs in accordance with PCW-DILG-NEDA-DBM Joint Circular No. 2013-01.

2. There were 590 barangays in nine regions which failed to implement projects/did not fully utilize the 5% allocation for GAD resulting in the non-attainment of the GAD objectives as provided under Executive Order 273 and Republic Act 7192, thus, depriving the men and women of the Barangay of the benefits that maybe derived from the projects.

Utilize completely the 5% budget allocation for GAD.

508


L. LDRRMF Investment Plan

1. There were 333 barangays in eight regions which did not prepare the annual Local Disaster Risk Reduction Management Fund (LDRRMF) Investment Plan for CY 2016. There were also instances of low utilization of the fund. Non-accrual to a special trust fund depository account for the unexpended amount of LDRRMF of the Barangay may endanger or jeopardize the purpose for which the fund was appropriated.

Comply with COA Circular No. 2012-002 dated September 12, 2012 and prepare the annual LDRRMF Investment Plan, submit quarterly report on the utilization of LDRRMF. Furthermore, follow the accounting and reporting guidelines particularly in the creation of a separate special trust fund bank account for the unexpended balance in the preceding years as well as the retention of the back-up fund for LDRRMF allocation in the General Fund.

2. There were 682 barangays infour regions that utilized the 2016 appropriation for calamity fund for MOOE expenses not related to disaster risk management activities which is in violation to Section 21 of R.A. 10121; Sections 6.3, 6.4 and 6.5 of Joint Memorandum Circular No. 2013-1 of NDRRMC-DBM-DILG, thus, no stand-by fund available for relief and recovery programs in case of calamity.

Comply with the regulations in accordance with Section 21, Par. 1, of Republic Act 10121 and follow the guidelines in the Joint Memorandum Circular No. 2013-1 of NDRRMC-DBM-DILG.

3. The amount and details of unexpended LDRRMF required under COA Circular 2012-002 dated September 12, 2012 was not disclosed in the Notes to Financial Statements of 385 barangays in four regions. Said barangays also failed to submit the Monthly Report on Sources and Utilization of the Fund.

Fully disclose in the Notes to Financial Statements for proper information. Strictly follow the provisions of Sections 5.1.1 to 5.1.5 of COA Circular No. 2012-002 dated September 12, 2012 for the preparation/submission of required report on LDRRMFIP and Report on Sources and Utilization of DRRMF to enhance proper accounting and reporting of calamity fund for transparency and accountability.

M. Fund for Senior Citizens and Differently-Abled

1. Six barangays failed to appropriate 1% of their budget for programs and projects related to Senior Citizens and Differently-Abled. Furthermore, they did not prepare a work and financial plan that will be used as guide in the utilization of the fund.

Comply with the existing laws, rules and regulations on affairs of senior citizens and differently-abled persons to ensure that the plans, programs, projects and activities are aligned to address their intended purpose.

N. Local Council for the Protection of Children

1. The 704 barangays in seven regions did not allocate one percent (1%) of their Internal Revenue Allotment for juvenile justice and welfare contrary to Section 15

Establish a Barangay Council for the Protection of Children (BCPC) effective CY 2016, endeavor to learn the proper usage of the fund and implement the appropriate programs, projects and activities

509


of Republic Act No. 9344.Appropriations. If there were allocations, these fell below the required amount allocated for programs and projects of the Local Council for the Protection of Children. Funds were utilized for programs & projects not related thereto or were left unutilized, thus, depriving the children and the youth of the benefits which can be derived from the programs allowed in the same Act.

which may be funded thereby.

O. Environmental Compliance

1. No funds or no budget were appropriated and no Materials Recovery Facility was established by the 359 barangays from six regions for Ecological Solid Waste Management Program which is not in accordance with Section 32 of Republic Act No. 9003, thus, no projects were implemented addressing environmental protection and waste management.

Develop programs and provide the required funds to address environmental protection and waste management and establish a Materials Recovery Facility as required under Section 32 of R.A. No. 9003.

2. The National Greening Program was not implemented by 110 barangays in five regions as no accomplishment was reported contrary to Executive Order No.26 dated February 24, 2011 and the National Greening Program (NGP).

Punong Barangay should (a) spearhead the implementation of the NGP program where all personnel, including Barangay Officials will plant at least ten seedlings annually over the remaining years of the six-year period which started in CY 2011; (b) comply with the provisions of E.O. No. 26 by formulating guidelines regarding the implementation of the NGP for dissemination to all departments concerned and furnish the NGP Oversight Committee with a copy thereof as required under Section 6 of the said E.O.; and (c) institutionalize the NGP by converging into the Local Greening Program the setting of quantifiable plans and target vis-à-vis the budget in the implementation of mandated responsibilities of the LGU pursuant to Section 5.6 of EO No. 26.

P. Revenues

1. Revenue powers as provided under the Local Government Code of 1991 to generate additional income was not fully exercised by 744 barangays six regions.

Barangay officials should exercise their revenue raising powers as provided for under the Local Government Code of 1991 to generate additional income and augment their share of Internal Revenue Allotment and Real Property Tax to fast track the delivery of basic services to its constituents.

510


Q. Expenditures

1. Failure to monitor expenditures against appropriations by 792 barangays from five regions led to incurrence of excess expenditures over appropriations cash overdrafts contrary to Section 305.a of R.A. 7160 and pertinent policies and procedures of Barangay Accounting Manual.

Monitor strictly the incurrence of expenditures to the Registry of Appropriations and Commitments (RAC) should be maintained by Fund (General, 20% Development, Calamity, SK, where applicable and GAD), by class (PS, MOOE, FE and CO) with breakdown as to account classification for monitoring of the approved appropriations and the corresponding utilization.

2. There were 371 barangays in 12 regions that did not adhere to the guidelines on the grant of Productivity Enhancement Incentive (PEI) resulting to excessive disbursement of funds.

Direct the persons responsible to restitute, restore and settle immediately the excess amount granted as PEI.

3. The appropriation and actual expenses for personal services of 94 barangays exceeded the 55% limitation as set in Section 331 (b) of Republic Act 7160 and Local Budget Circular No. 98 dated October 14, 2011.

The Barangays should observe the general limitations on personal services cited under Section 331(b) of RA 7160 and Local Budget Circular No. 98 to ensure that adequate funds are allocated for the delivery of basic services and development projects.

4. Unauthorized/illegal expenditures were incurred by 245 barangays in four regions.

Punong barangays should enforce the Notices of Disallowance issued and exercise prudence in the disbursement of funds.

5. Honoraria were paid to officials of 174 barangays even in the absence of supporting documents such as the minutes of meetings of the Sanggunian Barangay (SB) duly approved by the members of the SB and Barangay Secretary. Cash advances for honoraria of barangay officials were granted and disbursed prior to the rendition of actual services or without proof of actual service rendered, contrary to Section 88 of PD 1445 and Section 338 of RA 7160.

Support payments of honoraria with duly approved budget/appropriation together with the minutes of meetings of the Sangguniang Barangay approving the budget. Honoraria should be paid only after rendition of actual service.

6. Barangay fiesta related expenses and barangay contributions for municipal fiesta of 54 barangays were made on reimbursement basis in the name of various barangay/municipal officials. As such the corresponding value added taxes (VAT) or other percentage taxes were not withheld and remitted as prescribed under Revenue Memorandum

Direct the concerned official to prepare and submit the consolidated report of expenses during 2016 fiesta celebrations based on the 2015 expenses and limit payment for reimbursement only for emergency cases. Strictly adhere to the guidelines prescribed by the above cited laws and regulations.

511


Circular No. 2-98 dated April 17, 1998 as amended by Revenue Memorandum Circular No. 5-2006 dated November 5, 2005 issued by the Bureau of Internal Revenue. Payments for various expenses intended for barangay fiesta celebration for CY 2016 were contrary to the provisions of Section 335 of Republic Act No. 7160, Section 33 of Presidential Decree No. 1445 and Section 3.0 and 4.0 of COA Circular No. 2012-003 dated October 29, 2012, thus depriving the constituents of social services derived from the funds received.

7. Prior years’ expenditures of 192 barangays were charged against current year’s appropriation contrary to Sections 305 and 350 of the Local Government Code of 1991 thus, overstating the current year expenditures and depleting the current year MOOE funds.

Ensure that expenditures in a given year are obligated and funded in that particular year. Ensure that cash is available before obligations are incurred so as to comply with the modified accrual basis of accounting for complete reporting of all financial transactions. Obligate all valid claims not paid during the year for fair presentation of the financial statements.

PART IV

STATUS OF

IMPLEMENTATION

OF PRIOR YEARS’ AUDIT

RECOMMENDATIONS

ON PROVINCES, CITIES

AND MUNICIPALITIES

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented

Status of Implementation of Prior Years’ Audit Recommendations

on Provinces, Cities and Municipalities

Calendar Year 2018

Province/City/Municipality

1 Caloocan 52 29 20 3

2 Las Piñas 47 28 16 3

3 Makati 23 16 4 3

4 Malabon 77 24 39 14

5 Mandaluyong 134 26 87 21

6 Manila 104 29 37 38

7 Marikina 56 23 23 10

8 Muntinlupa 366 172 130 64

9 Navotas 50 36 8 6

10 Parañaque 33 20 10 3

11 Pasay 195 47 95 53

12 Pasig 77 29 34 14

13 Quezon 242 162 49 31

14 San Juan 74 34 12 28

15 Taguig 81 60 20 1

16 Valenzuela 52 26 23 3

Sub-total 1,663 761 607 295

Municipality:

1 Pateros 48 33 11 4

Component Units:

1 Pamantasan ng Lungsod ng Maynila 20 14 6 0

2 Quezon General Hospital 28 14 13 1

Sub-total 48 28 19 1

1,759 822 637 300

1 Abra

2 Apayao 26 13 4 9

3 Benguet 79 34 33 12

4 Ifugao 83 19 49 15

5 Kalinga 49 19 18 12

6 Mountain Province 34 18 12 4

Sub-total 271 103 116 52

1 Baguio 72 28 32 12

2 Tabuk 23 9 6 8

Sub-total 95 37 38 20

1 Municipalities of Abra 305 85 114 106

2 Municipalities of Apayao 196 70 85 41

3 Municipalities of Benguet 500 209 155 136

4 Municipalities of Ifugao 413 144 103 166

5 Municipalities of Kalinga 183 78 65 40

6 Municipalities of Mountain Province 143 78 33 32

Sub-total 1,740 664 555 521

2,106 804 709 593

Cities:

Municipalities:

Total Cordillera Administrative Region

Total National Capital Region

Provinces:

Cities:

National Capital Region

Cordillera Administrative Region

512

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


1 Ilocos Norte 37 24 10 3

2 Ilocos Sur 33 5 14 14

3 La Union 9 3 6 0

4 La Union Medical Center 4 2 2 0

5 Pangasinan 10 3 4 3

Sub-total 93 37 36 20

Cities:

1 Alaminos 22 8 2 12

2 Batac 58 23 3 32

3 Candon 28 9 18 1

4 Dagupan 19 9 6 4

5 Laoag 44 10 23 11

6 San Carlos 12 4 8 0

7 San Fernando 11 5 1 5

8 Vigan 20 14 4 2

9 Urdaneta 18 7 6 5

Sub-total 232 89 71 72

Municipalities:

1 Municipalities of Ilocos Norte 588 242 195 151

2 Municipalities of Ilocos Sur 458 130 138 190

3 Municipalities of La Union 323 115 123 85

4 Municipalities of Pangasinan 757 304 189 264

Sub-total 2,126 791 645 690

2,451 917 752 782

1 Batanes 17 4 5 8

2 Cagayan 33 8 17 8

3 Isabela 22 16 6 0

4 Nueva Vizcaya 54 27 22 5

5 Quirino 9 5 4 0

Sub-total 135 60 54 21

1 Tuguegarao 32 16 11 5

2 Ilagan 14 11 3 0

3 Cauayan 9 5 2 2

4 Santiago 13 2 2 9

Sub-total 68 34 18 16

1 Municipalities of Batanes 94 35 36 23

2 Municipalities of Cagayan 466 194 138 134

3 Municipalities of Isabela 633 252 240 141

4 Municipalities of Nueva Vizcaya 359 143 111 105

5 Municipalities of Quirino 122 46 45 31

Sub-total 1,674 670 570 434

1,877 764 642 471

Cities:

Region I

Total Region I

Provinces:

Region II

Provinces:

Municipalities:

Total Region II

513

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


1 Aurora 32 8 10 14

2 Bataan 51 15 16 20

3 Bulacan 62 35 12 15

4 Nueva Ecija 40 15 22 3

5 Pampanga 74 24 35 15

6 Tarlac 177 133 35 9

7 Zambales 65 15 14 36

Sub-total 501 245 144 112

1 Angeles 89 48 30 11

2 Balanga 17 7 8 2

3 Cabanatuan 73 35 19 19

4 Gapan 26 4 4 18

5 Mabalacat 71 18 13 40

6 Malolos 68 44 3 21

7 Meycauayan 63 31 8 24

8 Olongapo 92 21 25 46

9 Palayan 54 18 19 17

10 San Fernando 57 35 6 16

11 San Jose 32 16 15 1

12 San Jose del Monte 27 22 1 4

13 Science of Muñoz 43 30 12 1

14 Tarlac 94 69 10 15

Sub-total 806 398 173 235

1 Municipalities of Aurora 229 97 67 65

2 Municipalities of Bataan 413 117 148 148

3 Municipalities of Bulacan 571 296 136 139

4 Municipalities of Nueva Ecija 802 342 226 234

5 Municipalities of Pampanga 999 489 237 273

6 Municipalities of Tarlac 450 168 152 130

7 Municipalities of Zambales 569 144 185 240

Sub-total 4,033 1,653 1,151 1,229

5,340 2,296 1,468 1,576

1 Batangas 45 26 12 7

2 Cavite 15 6 6 3

3 Laguna 39 21 17 1

4 Rizal 41 19 13 9

5 Quezon 17 7 8 2

Sub-total 157 79 56 22

1 Antipolo 38 12 19 7

2 Bacoor 27 15 5 7

3 Batangas 31 15 11 5

4 Biñan 43 14 15 14

Provinces:

Cities:

Municipalities:

Total Region III

Provinces:

Cities:

Region III

Region IV-A

514

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


5 Cabuyao 40 14 22 4

6 Calamba 22 14 8 0

7 Cavite 25 18 2 5

8 Dasmariñas 36 22 9 5

9 Gen. Trias 25 9 7 9

10 Imus 24 9 12 3

11 Lipa 60 35 13 12

12 Lucena 18 12 4 2

13 San Pablo 33 20 7 6

14 San Pedro 39 16 19 4

15 Santa Rosa 56 26 17 13

16 Tagaytay 14 11 2 1

17 Tanauan 25 18 3 4

18 Tayabas 17 2 3 12

19 Trece Martires 24 11 9 4

Sub-total 597 293 187 117

1 Municipalities of Batangas 1,333 535 410 388

2 Municipalities of Cavite 312 162 74 76

3 Municipalities of Laguna 538 231 162 145

4 Municipalities of Quezon 737 268 230 239

5 Municipalities of Rizal 395 119 158 118

Sub-total 3,315 1,315 1,034 966

4,069 1,687 1,277 1,105

1 Marinduque 55 29 18 8

2 Occidental Mindoro 11 4 7 0

3 Oriental Mindoro 46 11 30 5

4 Palawan 18 7 9 2

5 Romblon 18 3 11 4

Sub-total 148 54 75 19

1 Calapan 34 13 12 9

2 Puerto Princesa 31 9 7 15

Sub-total 65 22 19 24

1 Municipalities of Romblon 318 53 148 117

2 Municipalities of Marinduque 250 102 65 83

3 Municipalities of Oriental Mindoro 592 147 307 138

4 Municipalities of Palawan 435 58 112 265

5 Municipalities of Occidental Mindoro 154 33 100 21

Sub-total 1,749 393 732 624

1,962 469 826 667

Provinces:

1 Albay 153 120 32 1

2 Camarines Norte 77 58 14 5

Municipalities:

Total Region IV-A

Provinces:

Region IV-B

Region V

Cities:

Municipalities:

Total Region IV-B

515

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


3 Camarines Sur 58 3 49 6

4 Catanduanes 55 18 33 4

5 Masbate 36 20 14 2

6 Sorsogon 82 38 40 4

Sub-total 461 257 182 22

Cities:

1 Iriga 47 16 23 8

2 Legazpi 50 46 4 0

3 Ligao 70 24 35 11

4 Masbate 41 9 32 0

5 Naga 46 20 25 1

6 Sorsogon 49 15 21 13

7 Tabaco 92 33 50 9

Sub-total 395 163 190 42

1 Municipalities of Albay 845 323 313 209

2 Municipalities of Camarines Norte 789 193 228 368

3 Municipalities of Camarines Sur 637 171 237 229

4 Municipalities of Catanduanes 374 135 118 121

5 Municipalities of Masbate 442 102 226 114

6 Municipalities of Sorsogon 674 246 284 144

Sub-total 3,761 1,170 1,406 1,185

4,617 1,590 1,778 1,249

1 Aklan 63 24 33 6

2 Antique 98 44 50 4

3 Capiz 18 11 4 3

4 Guimaras 36 12 16 8

5 Iloilo 186 34 60 92

Sub-total 401 125 163 113

1 Roxas 48 16 21 11

2 Iloilo 76 27 33 16

3 Passi 171 53 49 69

Sub-total 295 96 103 96

1 Municipalities of Aklan 375 110 131 134

2 Municipalities of Antique 516 159 215 142

3 Municipalities of Capiz 362 192 93 77

4 Municipalities of Guimaras 138 61 57 20

5 Municipalities of Iloilo 2,430 530 1,006 894

Sub-total 3,821 1,052 1,502 1,267

4,517 1,273 1,768 1,476

Provinces:

1 Cebu 52 17 26 9

2 Bohol 39 11 11 17

Sub-total 91 28 37 26

Municipalities:

Total Region V

Region VI

Total Region VI

Region VII

Provinces:

Cities:

Municipalities:

516

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


Cities:

1 Bogo 32 16 8 8

2 Carcar 60 19 23 18

3 Cebu 58 35 15 8

4 Danao 19 9 7 3

5 Lapu-Lapu 55 45 5 5

6 Mandaue 67 47 5 15

7 Naga 30 21 8 1

8 Tagbilaran 85 37 38 10

9 Talisay 63 38 6 19

10 Toledo 69 14 40 15

Sub-total 538 281 155 102

Municipalities:

1 Municipalities of Cebu 1,152 368 289 495

2 Municipalities of Bohol 1,093 392 408 293

Sub-total 2,245 760 697 788

2,874 1,069 889 916

1 Biliran 27 17 10 0

2 Eastern Samar 69 39 14 16

3 Leyte 50 11 31 8

4 Northern Samar 28 8 19 1

5 Samar 55 29 17 9

6 Southern Leyte 54 14 38 2

Sub-total 283 118 129 36

1 Borongan 58 30 25 3

2 Catbalogan 19 8 11 0

3 Calbayog 48 17 30 1

4 Tacloban 30 8 8 14

5 Ormoc 72 31 16 25

6 Baybay 36 25 8 3

7 Maasin 19 11 8 0

Sub-total 282 130 106 46

1 Municipalities of Eastern Samar 345 152 133 60

2 Municipalities of Leyte 1,676 616 566 494

3 Municipalities of Biliran 314 159 101 54

4 Municipalities of Northern Samar 655 210 297 148

5 Municipalities of Samar 924 309 317 298

6 Municipalities of Southern Leyte 446 173 184 89

Sub-total 4,360 1,619 1,598 1,143

4,925 1,867 1,833 1,225

1 Zamboang del Norte 27 19 8 0

2 Zamboanga del Sur 68 19 42 7

3 Zamboanga Sibugay 20 8 12 0

Sub-total 115 46 62 7

Region VIII

Municipalities:

Total Region VIII

Provinces:

Region IX

Total Region VII

Provinces:

Cities:

517

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


1 Dapitan 28 14 13 1

2 Dipolog 69 23 32 14

3 Pagadian 30 15 13 2

4 Zamboanga 143 47 73 23

Sub-total 270 99 131 40

1 Municipalities of Zamboanga del Norte 590 263 224 103

2 Municipalities of Zamboanga del Sur 718 289 228 201

3 Municipalities of Zamboanga Sibugay 512 191 165 156

Sub-total 1,820 743 617 460

2,205 888 810 507

1 Bukidnon 13 9 4

2 Camiguin 27 4 17 6

3 Lanao del Norte 17 8 5 4

4 Misamis Occidental 40 24 8 8

5 Misamis Oriental 47 6 14 27

Sub-total 144 51 48 45

1 Cagayan de Oro 30 12 18

2 El Salvador 8 4 4

3 Gingoog 15 3 5 7

4 Malaybalay 16 3 8 5

5 Valencia 26 16 9 1

6 Iligan 69 21 28 20

7 Oroquieta 13 3 8 2

8 Ozamiz 29 19 9 1

9 Tangub 49 31 14 4

Sub-total 255 112 103 40

1 Municipalities of Bukidnon 321 143 123 55

2 Municipalities of Camiguin 65 30 15 20

3 Municipalities of Lanao del Norte 364 98 141 125

4 Municipalities of Misamis Occidental 171 53 82 36

5 Municipalities of Misamis Oriental 471 206 183 82

Sub-total 1,392 530 544 318

1,791 693 695 403

1 Compostela Valley 40 33 3 4

2 Davao del Norte 37 15 22 0

3 Davao del Sur 123 71 46 6

4 Davao Oriental 99 43 23 33

5 Davao Occidental 20 18 2 0

Sub-total 319 180 96 43

Region X

Region XI

Provinces:

Cities:

Municipalities:

Total Region IX

Total Region X

Provinces:

Cities:

Municipalities:

518

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


1 Tagum 96 32 39 25

2 Panabo 112 85 20 7

3 Island Garden of Samal 110 75 23 12

4 Digos 119 67 21 31

5 Mati 80 26 37 17

6 Davao 42 28 12 2

Sub-total 559 313 152 94

1 Municipalities of Compostela Valley 363 192 129 42

2 Municipalities of Davao del Norte 409 185 82 142

3 Municipalities of Davao del Sur 333 229 67 37

4 Municipalities of Davao Oriental 922 315 246 361

5 Municipalities of Davao Occidental 385 166 106 113

Sub-total 2,412 1,087 630 695

3,290 1,580 878 832

1 North Cotabato 8 2 6

2 Sarangani 127 29 56 42

3 South Cotabato 31 11 20 0

4 Sultan Kudarat 42 17 25 0

Sub-total 208 59 107 42

Cities:

1 Kidapawan 6 5 1 0

2 Cotabato 35 16 17 2

3 Tacurong 26 26 0 0

4 Koronadal 40 6 30 4

5 General Santos 135 44 73 18

Sub-total 242 97 121 24

1 Municipalities of North Cotabato 175 43 106 26

2 Municipalities of Sultan Kudarat 237 83 101 53

3 Municipalities of South Cotabato 423 171 196 56

4 Municipalities of Sarangani 232 83 83 66

Sub-total 1,067 380 486 201

1,517 536 714 267

1 Agusan Del Norte 23 14 7 2

2 Agusan Del Sur 22 7 15 0

3 Dinagat Islands 19 13 6 0

4 Surigao Del Norte 35 8 19 8

5 Surigao Del Sur 28 14 9 5

Sub-total 127 56 56 15

1 Bayugan 15 5 7 3

2 Bislig 33 9 21 3

3 Butuan 57 32 21 4

Cities:

Municipalities:

Total Region XII

Provinces:

Municipalities:

Total Region XI

Region XII

Provinces:

Region XIII

Cities:

519

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


4 Cabadbaran 24 6 18 0

5 Surigao 60 8 43 9

6 Tandag 19 16 2 1

Sub-total 208 76 112 20

1 Municipalities of Agusan del Norte 134 45 60 29

2 Municipalities of Agusan del Sur 243 81 104 58

3 Municipalities of Dinagat Islands 131 45 52 34

4 Municipalities of Surigao del Norte 823 267 383 173

5 Municipalities of Surigao del Sur 363 152 135 76

Sub-total 1,694 590 734 370

2,029 722 902 405

1 Negros Occidental 35 7 10 18

2 Negros Oriental 40 4 18 18

3 Siquijor 34 9 22 3

Sub-total 109 20 50 39

1 City of San Carlos 32 18 13 1

2 City of Silay 59 27 26 6

3 City of Talisay 20 4 12 4

4 City of Escalante 53 15 15 23

5 City of Cadiz 37 15 8 14

6 City of Sagay 29 11 8 10

7 City of Victorias 46 15 25 6

8 Bacolod City 63 10 49 4

9 Bago City 12 3 8 1

10 La Carlota City 32 2 12 18

11 Himamaylan City 31 3 19 9

12 Kabankalan City 17 5 10 2

13 Sipalay City 14 6 6 2

14 Bais City 33 9 16 8

15 Bayawan City 18 9 6 3

16 Canlaon City 46 15 15 16

17 Dumaguete City 42 9 30 3

18 Guihulngan City 43 9 30 4

19 Tanjay City 37 7 16 14

Sub-total 664 192 324 148

1 Municipalities of Negros Occidental 481 124 197 160

2 Municipalities of Negros Oriental 504 115 237 152

3 Municipalities Siquijor 156 50 71 35

Sub-total 1,141 289 505 347

1,914 501 879 534

1 Lanao Del Sur 10 7 3 0

2 Basilan 11 4 7

Total Region XIII

Total Sub-Region XVI

Provinces:

Sub-Region XVI

Autonomous Region in Muslim Mindanao

Provinces:

Cities:

Municipalities:

Municipalities:

520

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2018


3 Tawi Tawi 5 1 3 1

4 Sulu

5 Maguindanao 11 2 5 4

Sub-total 37 14 18 5

1 Isabela 20 5 8 7

2 Lamitan 10 8 2

3 Marawi 13 8 2 3

Sub-total 43 21 12 10

1 Municipalities of Lanao del Sur 335 84 116 135

2 Municipalities of Basilan 125 36 31 58

3 Municipalities of Tawi-Tawi 94 14 31 49

4 Municipalities of Sulu

5 Municipalities of Maguindanao 258 127 41 90

Sub-total 812 261 219 332

892 296 249 347

50,135 18,774 17,706 13,655

Municipalities:

Total Autonomous Region in Muslim

GRAND TOTAL

Cities:

521