2017 Annual Financial Report for the Local Government ... · a result of the non-reconciliation of...

CY 2017

Annual Financial Report

Local Government

Volume II

2017

ANNUAL FINANCIAL REPORT

LOCAL GOVERNMENT

TABLE OF CONTENTS Page

Part I Consolidated Summary of Audit Opinions

Rendered on the Fairness of Presentation of the

Financial Statements

NCR – National Capital Region 1

CAR – Cordillera Administrative Region 12

I – Ilocos Region 30

II – Cagayan Valley 56

III – Central Luzon 78

IV-A – CALABARZON 117

IV-B – MIMAROPA 203

V – Bicol Region 224

VI – Western Visayas 251

VII – Central Visayas 277

VIII – Eastern Visayas 309

IX – Zamboanga Peninsula 362

X – Northern Mindanao 387

XI – Davao Region 415

XII – SOCCSKSARGEN 429

XIII – Caraga Region 441

XVI – Negros Island Region 468

ARMM – Autonomous Region in Muslim Mindanao 482

Part II Audit Observations and Recommendations 503

Part III Summary of Audit Observations and

Recommendations on Barangays

532

Part IV Status of Implementation of Prior Years’ Audit

Recommendations on Provinces, Cities and

Municipalities

538

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 2017

LGU AUDIT

OPINION Reasons for Opinion other than Unqualified

National Capital Region

Cities:

Caloocan Qualified/ Modified

Doubtful accuracy and reliability of the consolidated balance of the Cash in Bank (CIB) accounts amounting to P2.618 billion due to the unreconciled amount of P320.100 million as a result of the non-reconciliation of the General Ledger (GL) balance with the cashbook maintained by the City Treasurer; and the non-preparation of Bank Reconciliation Statements (BRS) for 30 bank accounts with a total recorded balance of P1.110 million;

Disbursement Vouchers (DVs) covering CY 2017 for all funds totalling P3.570 billion were not submitted to the Auditor’s Office for audit, contrary to Section 6.05 of COA Circular No. 95-006 dated May 18, 1995, resulting in the non-application of necessary audit procedures to establish validity of transactions;

The validity and accuracy of the Property, Plant and Equipment (PPE) accounts totaling P12.842 billion could not be ascertained as the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) showed a balance of P10.528 billion, or a difference of P2.312 billion;

The validity and accuracy of the Land account under the Special Education Fund (SEF) amounting to P 40.037 million could not be ascertained due to the absence of the Transfer Certificates of Title (TCT) and the discrepancy between the balance per books and the RPCPPE of P9.459 million; and,

The balances of reciprocal accounts, Due from Other Funds and Due to Other Funds, for all funds in the amount of P217.976 million and P239.670 million, respectively, showed a total difference of P21.694 million due to unadjusted reconciling items contrary to COA Circular No. 2015-009 dated December 1, 2015, thereby, casting doubt on the correctness of balances of said accounts.

Las Piñas Qualified/ Modified

The existence of various Property, Plant and Equipment (PPE) items and the accuracy and completeness of the PPE account balances amounting to P1.913 billion and P983.831 million under the General Fund (GF) and Special Education Fund (SEF), respectively, could not be ascertained due to:

a) discrepancies between the balances per books and the records of the General Services Office (GSO) totalling P505.534 million; and,

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b) incomplete details in the subsidiary records; and,

c) erroneous classification of PPE and small tangible items amounting to P11.502 million and P7.392 million, respectively. Moreover, the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) was inaccurately prepared and not submitted on time.

The reliability and accuracy of the reported year-end balances of some expense accounts for supplies and materials totalling P230.349 million could not be ascertained due to the inability of the concerned Departments to follow the required procedures in the monitoring, control and accounting of procured inventory items.

Makati Unmodified/ Unqualified

Malabon Qualified/ Modified

The reported cash account balance of P932.242 million is unreliable due to unrecorded disbursement in the amount of P19.772 million and unidentified reconciling items appearing in the Bank Reconciliation Statements (BRSs) for CYs 1999 to 2003 amounting to P5.893 million. Likewise, the net difference of P4.420 million between the book and bank balances cannot be ascertained due to the absence of the BRSs and supporting documents.

The Property, Plant and Equipment (PPE) account is unreliable due to unreconciled book balance of P1.628 billion with the Report on the Physical Count of PPE (RPCPPE) of P1.670 billion, showing a difference of P42.197 million.

The balance of the Due to NGAs account of P179.448 million is unreliable due to the inclusion of the unutilized amount of the fund transfer from the Department of Public Works and Highways (DPWH) and the Department of Health (DOH) amounting to P101.514 million and P4.106 million, respectively, which did not reconcile with the Liquidation Report and Confirmation Letter and/or Utilization Report, with a difference of P94.304 million and P3.145 million, respectively. Furthermore, the unutilized balance was not returned to the source agencies.

Mandaluyong Qualified/ Modified

The validity, accuracy and reliability of the Property, Plant and Equipment (PPE) accounts totaling P3.208 billion were not established due to (a) unreconciled difference of P939.458 million between the accounting records and the inventory report which is partly caused by the non-inclusion of PPE totaling P251.996 million in the physical inventory report; and (b) unrecorded 435 donated/procured property without cost.

The Cash in Bank (CIB) account balances with an aggregate amount of P2.166 billion were of doubtful validity due to (a) unrecorded/unadjusted reconciling items pertaining to CY 2017 and prior years in the total amount of P14.811 million (additions) and P313.056 million

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LGU AUDIT


(deductions); and (b) absence of Bank Reconciliation Statement (BRS) on three accounts with a balance of P2.975 million.

The balance of the Cash - Local Treasury reported at P74.076 million is unreliable due to discrepancy of P56.158 million between the General Ledger balance and the Treasurer’s Cashbook balance partly due to unrecorded reconciling items of prior years’ with no supporting documents.

Manila Adverse The existence, completeness and accuracy of the Cash in Bank accounts totalling P10.535 billion cannot be ascertained due to:

a) net discrepancy of P256.573 million between the

book and bank balances which could not be validated due to absence of Bank Statements (BSs) resulting to the non-preparation of Bank Reconciliation Statements (BRSs);

b) disparity of P2.723 billion between the Subsidiary

Ledger (SL) balances and Treasury records; and, c) difference of P15.502 million between the General

Ledger (GL) and SL balances.

The book reconciling items for the current and prior years in the net amount of P78.155 million and P572.605 million, respectively, were not adjusted, thus, rendering the correctness of the balances of the affected accounts unreliable;

The conduct of annual physical inventory of the PPE accounts with a net carrying amount of P18.102 billion was not judiciously planned resulting to the non-completion of the inventory taking, thus, the accuracy, validity and existence of the City’s PPE could not be ascertained. Likewise, the OCAT and the City General Services Office (CGSO) failed to maintain PPE Ledger Cards (PPELCs) and Property Cards (PCs), respectively;

The accuracy and validity of the recorded beginning balance of the Infrastructure Assets-Road Networks account amounting to P708.623 million could not be ascertained due to lack of pertinent documents/reports to substantiate the same contrary to the provisions of COA Circular No. 2015-008 dated November 23, 2015;.

The year-end balance of the Construction in Progress (CIP) account under the GF and SEF totalling P1.486 billion showed a difference of P105.673 million when compared with the balance of the subsidiary schedules of the said account totalling P1.380 billion and,

The subject account included 35 completed projects amounting to P617.352 million, which were not reclassified to

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the appropriate PPE accounts, thereby, overstating the balances of the CIP accounts and understating the balances of the related PPE accounts.

Marikina Qualified/ Modified

Cash advances totaling P3.170 million, whose purposes were already undertaken remained unliquidated as of December 31, 2017, contrary to Item 5 of COA Circular No. 97-002 dated February 10, 1997 and Section 89 of P.D. No. 1445, thus, expenses are understated by the same amount and various receivable accounts are overstated by an aggregate amount of P3.170 million;

Unreconciled variances between the books of accounts and the Report on Physical Count of Inventory (RPCI) under the account Inventories Held for Consumption – Construction Materials, Office Supplies and Drugs and Medicine in the amounts of P112.736 million, P14.614 million, and P13.186 million, respectively, or a total of P140.536 million, cast doubts on the accuracy of the said Inventories account balances reported in the financial statements;

Other Supplies and Materials costing P86.639 million that are still in the warehouse of the City Government as of December 31, 2017 were recorded as issued contrary to COA Circular 2015-009 dated December 31, 2015, which resulted in the overstatement of Other Supplies and Materials Expense and understatement of Other Supplies and Materials Inventory by the same amount;

Discrepancies between the various Property, Plant and Equipment (PPE) account balances in the accounting records and the Report on the Physical Count of PPE (RPCPPE) amounted to P373.027 million;

The balances of the accounts Construction in Progress – Buildings and Other Structures and Infrastructure Assets have accumulated to P390.940 million due to delayed recording of completed projects to the appropriate PPE accounts. Consequently, the related asset account and the corresponding depreciation were not recorded;

Accounts Payable totaling P16.838 million was recognized as of December 31, 2017, when there were no actual deliveries of goods or services, contrary to COA Circular No. 2015-009 dated December 1, 2015, resulting in the overstatement of Accounts Payable by P16.838 million; Repairs and Maintenance accounts by P3.017 million and Other Supplies and Materials Expenses by P13.821 million;

Balances in the Subsidiary Ledgers of Accounts Payable totaling P3.310 million remained dormant for more than two years;

A loan amounting to P2.585 million granted on December 29, 2017 was not recorded in the books which resulted in the understatement of Loans Payable – Domestic account, Cash in Bank-Local Currency, Current Account and Bank Charges

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LGU AUDIT


account by P2.585 million, P2.573 million and P0.012 million, respectively; and,

Interest Expense for the first three quarters of CY 2017 totaling P14.032 million was recorded in December 31, 2016 resulting in the understatement of the account and consequently affected the fair presentation of the Financial Performance for CY 2017.

Muntinlupa Qualified/ Modified

The valuation, existence and ownership of Property, Plant and Equipment (PPE) accounts totaling P6.109 billion were unreliable due to:

a) unreconciled net discrepancy of P160.273 million

between the Report on the Physical Count of PPE (RPCPPE) and book balances;

b) dormant or non-moving infrastructure projects of

P60.522 million recorded under the Construction in Progress (CIP) account for the past four to ten years;

c) undepreciated various PPE valued at P193.768

million; and,

d) non-maintenance of Property Cards by the General Services Office (GSO).

The existence and accuracy of the balance of the Cash in Bank – Local Currency, Current Account of P1.091 billion could not be ascertained due to a net discrepancy of P29.155 million between the book and bank balances which is partly due to unrecorded disbursement of P28.057 million, unreconciled discrepancy of P203.801 million between the SLs and cashbook balance, and non-maintenance of cashbook for five bank accounts;

The balances of Accounts Payable totaling P250.581 million and Other Payables of P302.695 million were doubtful due to the existence of long outstanding payables that were not supported with valid claims and documentations, misclassification/erroneous recording of transactions and existence of negative balances, and accounts without information on the creditors in the subsidiary ledgers (SLs); and,

The accuracy and validity of the Due to Other NGAs account balance of P142.264 million were unreliable due to misclassified accounts of P3.752 million, net of negative balance of P0.266 million; and dormant accounts of P0.270 million. Moreover, unused/unexpended balances of project funds and other fund transfers totaling P2.457 million remained unremitted to the source agencies and/or the National Treasury.

Navotas Unmodified/ Unqualified

6

LGU AUDIT


Parañaque

Qualified/ Modified

The Property, Plant and Equipment (PPE) year-end balance of P5.853 billion differs with the physical inventory totaling P396.257 million by P5.457 billion due to non-reconciliation between the City Accounting and CGSO records, thereby, casting doubt on the reliability of the PPE account balance in the financial statement; and,

The reliability and accuracy of the consolidated Cash in Bank, Local Currency – Current Account balance of P1.981 billion could not be established due to insufficient supporting documents to prove the validity of reconciling items which have accumulated since CY 1998 to P25.799 million.

Pasay

Qualified/ Modified

The Cash – Local Treasury account balance of P1.003 million in the financial statements is not fairly presented as it consists of P0.998 million which is not backed-up with actual cash and has been carried in the books in the past years; and erroneous recording of collection and deposit in the net amount of P4,790.7;

The bank account at the Philippine National Bank (PNB) – Makati still registers a balance of P25.571 million in the books, although not backed-up with actual cash in the bank, arising from the reversal entry made to recognize the bounced check issued to settle the account held in trust for Makati City, hence, the Cash in Bank – Local Currency, Savings Account is overstated by the same amount;

The accuracy and reliability of the balances of the Inventory accounts totalling P221.127 million were doubtful due to incorrect valuation of Drugs and Medicines Inventory and Medical, Dental and Laboratory Supplies Inventory accounts amounting to P103.272 million and P45.272 million, respectively, contrary to PPSAS 12 and to the accounting policy of the City.

The PPE account balance of P11.146 billion is unreliable due to:

a) unreconciled amount of P8.196 million between the

books and the Report on the Physical Count of PPE (RPCPPE) due to errors in recording transactions;

b) double recognition in the books and in the RPCPPE

of project cost in the amount of P5.841 million; c) non-reclassification of a completed project costing

P5.446 million to the appropriate PPE account; and, d) inappropriate recognition of other PPE items totalling

P41.877 million.

7

LGU AUDIT


Pasig Adverse Of the total Property, Plant and Equipment, other than Land, totaling P19.133 billion, property amounting to P7.588 billion were not inventoried, the property and accounting records differ by P4.557 billion; items totaling P731.755 million were misclassified; investment property and semi-expendable items were included in the PPE balances; assets aggregating P66.785 million were not provided with depreciation; and lapses/errors were noted in recording and provision for depreciation, rendering the account balances unreliable;

The physical existence and validity of Inventories aggregating P1.51 billion cannot be ascertained because these were not supported with Reports of Physical Count of Inventories (RPCI) since no physical count was conducted; the reconciliation of the balances per stock cards and Accounting records cannot be made due to improperly maintained stock cards and absence of supplies ledger cards; and, there are inconsistencies, procedural lapses and delays in recording acquisitions and issuances;

The validity and reliability of the balance of the Land account stated at P1.120 billion cannot be established because the Inventory Report submitted by the City General Services Office, which appears to be a transaction list only, contains lots with acquisition costs totaling P336.91 million which are covered by Transfer Certificates of Title (TCT) in the name of the City Government, while others consist of lots without assigned values and description of actual use; misclassified items; and unidentified adjustments; and,

Accounts Payable is overstated by P605.56 million due to errors in recording and absence of documents to support the validity of claims.

Pamantasan ng Lungsod ng Maynila

Qualified/ Modified

The presence of long overdue receivables totaling P3.048 million consisting of Accounts Receivable, Other Receivables and Due from Officers and Employees amounting to P52,034.60, P1.340 million and P1.656 million, respectively, failed to reflect the correct valuation of the accounts in the financial statements contrary to Paragraph 76 of the PPSAS 1;

The validity and propriety of the reported balances of Accounts Payable account totaling P31.507 million and Due to Officers and Employees account amounting to P16.033 million is doubtful due to:

a) non-submission/presentation of sufficient supporting

documents to determine if claims are correct, valid and properly authorized as required under Section 157 of the Government Auditing and Accounting Manual, Volume I; and,

b) misclassification in the Due to Officers and Employees account of the employer’s share of contribution to GSIS, Pag-IBIG and PhilHealth totaling P3.234 million.

8

LGU AUDIT


Quezon City General Hospital

Qualified/ Modified

The Cash in Bank (CIB) account balances with an aggregate amount of P1.449 billion were of doubtful validity due to unrecorded/unadjusted reconciling items with no supporting documents pertaining to CY 2017 and prior years in the total net amount of P0.989 million;

The balance of the Property, Plant and Equipment (PPE) accounts amounting to P1.377 billion is unreliable due to the unreconciled difference of P121.829 million with the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) amounting to P1.499 billion; and,

The balances of the Inventory accounts in the total amount of P85.544 million are unreliable due to unreconciled difference of P27.179 million between the books and the Report on the Physical Count of Inventories (RPCI) with reported amount of P58.365 million.

Quezon City

Qualified/ Modified

The validity of the balances of various asset and liability accounts totaling P6.416 billion and P113.325 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;

Cash account balances include P215.330 million dormant/unreconciled/unresolved account balances that were carried forward since 2003, thus, casting doubt on the accuracy and correctness of the cash account balances; and,

The Property, Plant and Equipment (PPE) account includes P4.300 billion unreconciled amounts which were carried forward from the old to the new accounting system; PPE items physically counted but not reconciled with the accounting records; and various errors and omissions in recording transactions affecting PPE accounts, which cast doubt on the validity and accuracy of the balances presented in the financial statements.

San Juan Qualified/ Modified

The balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables in the amounts of P84.087 million and P48.842 million, respectively, and the corresponding Deferred RPT/SET totaling P385.441 million as of December 31, 2017 remained doubtful due to:

a) non-correction/adjustment of the beginning balances

of the said accounts;

b) non-inclusion of RPUs with Unpaid RPT/SET for CY 2017; and,

c) variances in the setting-up of tax receivables for the year which caused the understatement of the RPT Receivable/Deferred RPT and SET Receivable/Deferred SET by P19.027 million and P17.133 million, respectively;

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LGU AUDIT


The balance of the PPE account amounting to P3.276 billion is unreliable due to:

(a) unreconciled account balances between the accounting records and the Report on Physical Count of Property, Plant and Equipment (RPCPPE);

(b) inclusion and exclusion of items of PPE account in either the CAD records or in the RPCPPE;

(c) beginning balances without supporting details; and

(d) misclassification of PPE items in the books of accounts totaling P10.977 million, resulting in a significant positive and negative variances of P804.107 million and P454.484 million, respectively, or a net variance of P349.623 million.

Unserviceable properties totaling P27.680 million were not disposed during the year; and,

The balances of Office Supplies Inventory (OSI) and Other Supplies and Materials Inventory (OSMI) accounts amounting to P9.794 million and P1.623 million, respectively, are doubtful due to:

a) application of varying methods of recording the purchases and issuances of inventories;

b) inclusion in the Summary of Supplies and Materials Issued (SSMI) of the cost of items not taken up as Inventory;

c) unreconciled data between the issued RIS and the SSMI;

d) misclassification of inventory items in the books that resulted to the overstatement of the OSI account and the understatement of the Office Supplies Expenses by P4.382 million; and the understatement of the OSMI account and overstatement of Other Supplies and Materials Expense (OSME) by P1.772 million; and,

e) improper charging of other general services amounting to P2.426 million to OSME.

The writing-off of the City’s dormant receivable accounts and fund transfers in the total amount of P5.470 million was made without seeking approval from the Commission on Audit contrary to COA Circular No. 2016-005, and resulted in the understatement of the Government Equity and other related accounts by the same amount; and,

The accounts payable reverted during the year amounting to P684,869 included the Guaranty and Security Deposits Payable and Trust Liability-DRRM balance, thus, understated the said accounts by the same amount.

10

LGU AUDIT


Taguig Adverse The habitual practice of the City Accountant to submit the financial statements, official receipts, and other accounting reports too far beyond the prescribed period and unjustified failure to submit the Report of Collections and Deposits (RCD) for the period February to December 2017 including Disbursement Vouchers/Payrolls and Journal Entry Vouchers totaling P10.082 billion, both for the General Fund and Special Education Fund, precluded the Auditor in conducting timely audit of the same to determine legality and propriety of transactions.

The existence, completeness and correctness of the reported Property, Plant and Equipment (PPE) accounts for all funds with total acquisition costs of P8.483 billion could not be ascertained due to:

a) incomplete physical inventory of city-owned property, showing a difference of P7.825 billion against the subsidiary ledger balances;

b) lack of details as to description and specific cost for account balances totaling P2.514 billion;

c) unrecorded fifty five units of motor vehicles costing P52.550 million;

d) erroneous classification of various PPE totaling P404.363 million; and,

e) undetermined details of City property acquired in previous years totaling P1.702 billion.

Fifteen (15) parcels of land with total acquisition costs of P145.819 million were still in the name of previous owners, thus, depriving the City Government of inherent rights thereto;

The carrying value of the PPE accounts totaling P5.400 billion is not reliable/misleading due to:

a) absence of depreciation for city property totaling P81.709 million;

b) overstated accumulated depreciation and depreciation expense by P141.021 million and P32.651 million, respectively, due to error in the estimated useful life and inconsistent application of percentage of residual value; and,

c) failure to transfer the accumulated depreciation of reclassified property. The overstatement of depreciation expense reduced the income and equity accounts by P32.651 million.

The accuracy of the consolidated balance of Cash in Bank-Local Currency, Current Account amounting to P2.677 billion could not be ascertained due to:

a) unavailability of supporting documents to prove the validity of reconciling items presented in the Bank Reconciliation Statements;

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LGU AUDIT


b) the non-submission of related disbursement vouchers, payrolls, bank’s debit/credit memos covering both current and prior years’ transactions; and,

c) the non-reconciliation of quarterly balances of the subsidiary ledgers and cashbook.

The balance of the Inventory accounts aggregating P249.376 million could not be ascertained due to:

a) non-submission of the Report of the Physical Count of Inventories (RPCI);

b) undisclosed/undetermined utilization of supplies and materials worth P810.064 million;

c) unverified deliveries made during the last days of December amounting to P412.995 million; and,

d) dormant accounts for five years amounting to P84.432 million under the Taguig City Hospital-General Fund books of accounts.

Valenzuela Qualified/ Modified

Variance on the uncollected Real Property Tax (RPT) between the subsidiary ledgers and Database System of RPT Collection in the total amount of P935.517 million have compromised the reliability and correctness of the RPT Receivables account and/or reported RPT collections;

Prior period purchases of construction materials totaling P5.349 million were recorded in the books under the Infrastructure Asset account instead of recording the same as Construction Materials Inventory or Construction in Progress - Infrastructure Assets upon receipt and utilization of the same, which compromised the correctness and reliability of the beginning balances of the accounts; and,

Understatement of the beginning balances of Accounts Payable, Inventory, and PPE accounts by P5.072 million due to late recording of prior year delivered items; and overstatement of Fuel, Oil and Lubricants Expenses and Printing and Publications Expenses by P2.281 million due to recording in the current year of prior year expenses.

Municipality:

Pateros Qualified The accuracy, existence and validity of the consolidated Property, Plant and Equipment (PPE) totaling P228.635 million could not be ascertained due to:

a) unreconciled variance between the Subsidiary Ledgers (SLs) and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) in the amount of P0.840 million including donated property and those found in station without cost;

b) inclusion of semi-expendable property costing below the capitalization threshold totaling P3.861 million;

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c) understatement of depreciation for property totaling P20.517 million; and,

d) inclusion of demolished building with construction cost of P0.362 million.

The existence and ownership of investment in stocks amounting to P0.314 million is doubtful due to inability of the Municipal Treasurer to present the stock certificates from MERALCO and PLDT amounting to P0.258 million.

Cordillera Administrative Region

Province of Abra

Qualified/ Modified

The correctness of the net book value of Property, Plant and Equipment (PPE) assets totaling P607,987,311.37 representing 20.63% of the total net assets of P2,947,680,811.47, as of December 31, 2017 and its provision for depreciation cannot be ascertained due to non-maintenance of complete Property, Plant and Equipment Ledger Cards (PPELC) and non-reconciliation of property records;

The reported balance of Drugs and Medicines Inventory account of P30,932,811.34 did not reconcile with the records of the Supply Unit by P7,233,379.11;

The Province did not fully comply with the transition provision on the complete recognition of the local road network in the books of accounts which requires 50% compliance at the end of 2017; and,

There were significant delays in the submission to the Commission on Audit of Financial Statements (FS), Trial Balances (TB) and Disbursement Vouchers (DV) together with their supporting documents ranging from 27 to 203 days and 47 to 407 days, respectively; moreover, 45 DVs amounting to P4,144,234.39 have not been submitted for audit.

Municipalities:

Bangued

Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) amounting to P68,663,738.98 was not supported with the required Report on the Physical Count of PPE (RPCPPE) and the accuracy and correctness of PPE accounts totaling P213,285,492.65 presented in the financial statements could not be ascertained since no Property, Plant and Equipment Ledger Card (PPELC) was maintained. Further, depreciation was not provided in 2017 and previous years’ for assets recorded under the Special Education Fund (SEF); and,

The Loans Payable – Domestic account showed an unreconciled variance of P712,975.14 from prior years between the General Ledger and Subsidiary Ledger/Bank Records.

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

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Boliney No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Bucay

Qualified/ Modified

Construction in Progress (CIP) accounts of various Infrastructure Assets totaling P6,147,586.14, and Buildings and Other Structures account amounting to P249,998.00 remained uncompleted and dormant for several years, rendering the accuracy of the recorded amounts and existence of the assets doubtful. In addition, the amount of P905,908.54 which pertains to the costs incurred for Calao CIS since January 2013 and previously accounted for as CIP – Irrigation, Canals and Laterals was immediately closed to Public Infrastructure account then to Government Equity in CY 2015 without the required Journal Entry Voucher and supporting documents that proves that the said project was already 100% complete;

Various infrastructure projects and Other Structure totaling P1,985,170.37 were still carried in the books as CIP – Infrastructure Assets/Buildings and Other Structures despite that the expected cost for the project based on the Program of Work (POW)/ Approved Budget for the Contract (ABC) was fully/almost fully disbursed, casting doubt whether the project was implemented and completed in accordance with plans and specifications;

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 require 50% compliance at the end of 2017 pursuant to Item IX of COA Circular No. 2015-008. The amount of P399,067.34 which pertains to the costs incurred for San Miguel Multi-purpose Drying Pavement previously accounted for as Other Infrastructure Assets was derecognized in the books of accounts without the required Journal Entry Voucher and supporting documents casting doubt on the validity of the journal entry made;

Improper recording of transactions, improper accounting procedures and misclassification of accounts were noted on various accounts, as follows:

a) The project “Improvement of Processional Route” costing P508,500.00 was erroneously recorded by the Municipal Accountant as Other Machinery and Equipment; thereby, understating Infrastructure Assets – Other Infrastructure Assets account and overstating Other Machinery and Equipment account by P508,500.00;

b) Cost incurred amounting to P232,458.44 for the Rehabilitation of One (1) Unit Classroom School Building was not reclassified to CIP – Buildings and Other Structures from CIP – Infrastructure Assets before recognizing as School Buildings account upon completion. As a result, CIP – Buildings and Other Structures was understated and CIP – Infrastructure Assets was overstated by P232,458.44;

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

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

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c) Validity of the classification of the project “Rehabilitation and Maintenance of Barangay Roads” costing P194,087.00 accounted for as Repairs and Maintenance-Machinery and Equipment cannot be fully evaluated due to incomplete documentation; and,

d) The unexpended/ unobligated balances of the QRF and DRRMF – MOOE for CY 2017 and in the prior yearstotaling P2,480,736.57 were not transferred to the special trust fund.

The unexpended/ unobligated DRRMF balance in CY 2012 amounting to P2,095,687.52 was not reverted. As a result, Trust Liabilities – DRRM Fund, Miscellaneous Income, and Transfers of Unspent Current Year DRRM Funds to the Trust Funds accounts were understated by P2,480,736.46 (net amount), P2,095,687.52 and P1,236,525.21, respectively, and Government Equity account was overstated by P3,339,898.77; and,

The Statement of Comparison of Budget and Actual Amounts did not include continuing appropriation from the CY 2016 20% Development Fund for Local Counterpart on BUB-GPB Projects of P1,930,000.00 of which the municipality incurred the same amount for the purchase of 2-in-1 Backhoe Loader.

Bucloc No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Daguioman

Qualified/ Modified

The non-conduct/non-submission of the Report of actual physical count of Local Road Networks as well as non-recording of prior years’ completed local road projects totaling P14,446,155.14 casted doubt as to the existence, valuation, condition as well as propriety of the recorded balance of Road Networks account as well as 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 amounting toP10,350,229.54 which compromised the reliability and propriety of the financial statements;

Disbursement vouchers and liquidations of the Municipal Treasurer amounting to P4,094,342.18 and P904,226.47 respectively were not submitted to the audit team contrary to Sections 39, 100 and 122 of PD 1445, hence, necessary audit to determine the regularity, validity and propriety of said payments as well as the accuracy of entries recorded in the journals could not be readily made;

Funds transferred to KALAHI Barangay Community account totaling P1,385,237.88 were directly debited to Due to Other Funds, instead of recognizing receivable from the recipients, as a result, fund transfers were not liquidated and reported which prevented the proper evaluation of its utilization;

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

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

15

LGU AUDIT


Abnormal balances of Due to Pag-IBIG and Due to GOCCs accounts amounting to P5,929.82 and P140,750.03 respectively, under the General Fund and existence of balance of Government Equity account in the Trust Fund amounting to P268,224.02, affected the reliability of the Municipality’s financial statements; and,

Evaluation on the accuracy of the submitted Statement of Comparison of the Budget and Actual Amounts could not be made due to delayed submission, improperly accomplished Obligation Requests and non-submission of the Statement of Appropriations, Allotments and Obligations (SAAOB) and supporting schedules.

Danglas

Qualified/ Modified

The existence, completeness, validity and accuracy of Property, Plant and Equipment (PPE) with a net book value of P21,422,263.61, and the related provisions for depreciation is doubtful due to:

a) non conduct of annual physical count of PPE;

b) non maintenance of PPE ledger cards; and

c) non maintenance of updated Acknowledgement Receipt for Equipment (ARE).

The non-conduct/ non submission of the report of actual physical count of Local Road Networks totaling P6,670,408.36 casted doubt as to the existence, valuation, condition and the propriety of the recorded balance of Road Networks account as well as Government Equity in the year- end financial statements; and,

Dormant accounts of P9,060,659.82 are being maintained in the books of the agency rendering the account balances doubtful which ultimately affects the fair presentation of the financial statements.

Dolores Management Letter

Non/delayed submission of accounts and financial reports for audit contrary to pertinent laws and regulations.

La Paz

Qualified/ Modified

The validity and accuracy of the Property, Plant and Equipment (PPE) account balance of P41,010,878.74 could not be ascertained due to inclusion of unidentified/missing/no status items amounting to P17,179,377.23 contrary to Section 124 of the New Government Accounting System (NGAS) Manual for LGUs;

The non-conduct/non-submission of the Report of actual physical count of Local Road Networks totaling P19,128,879.22 casted doubt as to the existence, valuation, condition and the propriety of the recorded balance of Road Networks account as well as Government Equity in the year-end financial statements.

Dormant accounts were being maintained in the books of the agency rendering the account balances doubtful, thus, affecting the fair presentation of the financial statements. - P3,174,020.00.

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

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

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

16

LGU AUDIT


Lacub

Qualified/ Modified

The non-submission of disbursement vouchers totaling P5,154,139.30 precluded the Audit Team in verifying the accuracy and reliability of the balances of the affected accounts as presented in the Financial Statements;

Doubtful validity of the Statement of Comparison of Budget and Actual Amounts due to the non-preparation/non-maintenance of various budgetary reports resulting in the non-verification of the legality and validity of the disbursements and the related savings thereof;

The existence, valuation and condition of Property, Plant and Equipment (PPE) with a book value totaling P52,546,893.93 as well as its local road networks could not be ascertained due to the non-conduct of physical count and consequently, the reliability, propriety, and fairness of presentation of the balances appearing in the financial statements remain doubtful;

Long-overdue receivables and fund transfers remained uncollected thereby depriving the government of additional funds needed for its operation while dormant receivables account were not requested for write-off, thus, casting doubt as to the propriety and validity of the recorded current assets account totaling P3,219,159.57; and,

The Due to National Government Agencies account totaling P1,348,157.00 was carried over in the books and remained dormant for eight (8) 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.

Lagangilang

Disclaimer

The municipality recognized P21,921,136.28 as Local Road Network in the books of account from CY 2015 and CY 2014 in compliance of Item IX of COA Circular 2015-008. However, the recognition is doubtful due to incomplete documentation, thus, the validity, accuracy of Property, Plant and Equipment (PPE) totaling P119,592,379.73 could not be ascertained.

The legality, accuracy and validity of the charges to inventory expenses totaling P7,710,355.31 could not be readily validated and ascertained due to the absence of Requisition Issue Slips as required under NGAS Vol. 1 of LGUs.

Cash Advances granted to Officers and Employees totaling P1,375,702.49 were not liquidated as of year-end. Also, a total of P112,300.00 liquidations of the cash advances granted to the Municipal Treasurer were not submitted for audit.

Management was not able to initiate action to enforce collection and/or liquidation of overdue receivables and fund transfers. Likewise, 49% or P10,575,155.10 of the recorded balance of receivables totaling P21,314,509.09 lack relevant records containing adequate information to validly support such claim casting doubt as to the propriety and validity of the recorded current assets account;

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

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

17

LGU AUDIT


Subsidiary ledgers for the Real Property Taxes and Special Education Taxes were not maintained, rendering the balance of Due to LGUs account of P1,265,044.63 unreliable;

Journal Entry Vouchers submitted were not supported, thus the validity and correctness of journal entries made in the General Journal could not be ascertained;

Disbursement vouchers totaling P1,617,771.33 were not submitted to the Auditor’s Office contrary to Section 7.2.1 of the 2009 COA Rules and Regulations on the Settlement of Accounts (RRSA) dated September 15, 2009 and the provisions of Republic Act (R.A.) No. 7160; thus, the correctness of the entries made and the propriety and legality of the transactions could not be evaluated; and,

Disbursements totaling P26,902,064.28 lacked documentation in violation of Section 4.6 of Government Auditing Code of the Philippines (PD 1445) and COA Circular No. 2012-001, casting doubt on the propriety of accounts used, and the validity, regularity and necessity of the transactions.

Lagayan

Qualified/ Modified

Building owned by the municipality with a total cost of P1,071,850.00 was not provided with depreciation in violation of Paragraph 4 and 6 of PPSAS 17, thus, asset was over valuated and Depreciation Expense was understated for the depreciation for the year;

The existence and accuracy of Property, Plant and Equipment maintained in the books at P14,167,989.79 could not be ascertained due to the failure of the Municipality to conduct physical inventory and maintain subsidiary ledgers to support the balances of the accounts as required under Section 124 of the New Government Accounting System Manual for LGUs. Balance of School Buildings amounting to P503,673.00 was not dropped from the books of accounts and transferred to the Department of Education;

The non-conduct/non-submission of the Report of actual physical count of Local Road Networks totaling P27,363,709.18 casted doubt as to the existence, valuation, condition and the propriety of the recorded balance of Road Networks account as well as Government Equity in the year-end financial statements; and,

Disbursement vouchers totaling P980,387.84 were not submitted for audit in violation of Section 100 and 105 of Presidential Decree 1445 and Section 7.2.1(a) of COA Circular 2009-006, on the +Rules and Regulations on Settlement of Accounts, thus, the correctness of the entries made and the legality and propriety of the transactions could not be evaluated.

Langiden No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

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

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

18

LGU AUDIT


Licuan-Baay No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Luba

Qualified/ Modified

Improper recording of transactions, improper accounting procedures and misclassification of accounts were noted thus, affecting the proper presentation of the various accounts affected;

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 require 50% compliance at the end of 2017 pursuant to Item IX of COA Circular No. 2015-008;

The unexpended/unobligated balances of the QRF and DRRMF – MOOE for CY 2017 and in the prior years totaling P1,215,881.34 were not transferred to the special trust fund. As a result, Trust Liabilities – DRRM Fund and Transfers of Unspent Current Year DRRM Funds to the Trust Funds accounts were understated by P1,176,041.33 and P1,215,881.34, respectively, and Government Equity and Grants and Donations in Cash accounts were overstated by P14,840.01 and P25,000.00, respectively;

Budgeted amounts in the Statement of Comparison of Budget and Actual Amounts (SCBAA) do not match with the approved budget by P656,803.48. Consequently, the actual amounts totaling P88,419.28 do not reflect the proper amount for MOOE and Capital Outlay charged to the LDRRMF; and,

Physical count of Welfare Goods Inventory totaling P54,420.00 was not conducted and no inventory report was submitted; thus, the reliability and accuracy of the balances presented in the Financial Statement could not be ascertained.

Malibcong No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Manabo No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Peñarrubia

Qualified/ Modified

Absence of a complete archival system had caused unreconciled difference between the book value presented in the financial statements and Report of Physical Count of Property, Plant and Equipment (RPCPPE) totaling P80,796,652.63 which compromised the reliability and propriety of the financial statements;

Long-overdue receivables and fund transfers remained uncollected thereby depriving the government of additional funds needed for its operation while dormant receivables account were not requested for write-off, thus, casting doubt as to the propriety and validity of the recorded current assets account totalingP3,511,592.46;

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

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

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

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

http://en.wikipedia.org/wiki/Pe%C3%B1arrubia,_Abra

19

LGU AUDIT


Various journal entries prepared by the Municipal Accountant-Designate were not supported with Journal Entry Vouchers and proper supporting documents showing among others the necessary information needed to verify the validity of the transactions totalingP2,484,059.00; and,

Dormant balance of mandatory trust liabilities totaling P2,372,954.30 were carried over in the books of account despite the absence of pertinent documents to support the validity of the recorded balance, thus, casting doubt on the fairness of presentation of the Financial Statement.

Pidigan No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Pilar Qualified/ Modified

The reliability, propriety, and fairness of presentation of the balances appearing in the financial statements for PPE account is doubtful due to the following deficiencies:

a) Land identified by the Provincial Assessor’s Office as owned by the Municipality of Pilar was not recorded in the books;

b) School buildings costing P4,947,137.44 remained in the books although the municipality do not have beneficial ownership and control over said PPE items; and,

c) The recorded local road networks account totaling P171,300,976.05 could not be ascertained due to incomplete documentation and non-conduct/non-submission of the Report of physical count.

Sallapadan

Qualified/ Modified

The non-submission of the updated Report on the Physical Count of Local Road Networks as well as 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 P45,242,438.40 as well as the Government Equity in the year-end financial statements;

The validity, existence and accuracy of the Property, Plant and Equipment (PPE) accounts worth P11,523,126.47 could not be ascertained due to non-submission of the updated Report on the Physical Count of PPE and non-maintenance of required records;

Depreciation for Property, Plant and Equipment (PPE) with a total cost of P2,728,174.34 has not been provided as prescribed under Item 43 of PPSAS No. 17, resulting in the overvaluation of assets and understatement of depreciation expenses for the current year and Government Equity for the unrecorded depreciation for years; and,

Evaluation on the accuracy of the submitted Statement of Comparison of the Budget and Actual Amounts could not be made due to improperly accomplished Obligation Requests and non-submission of the Statement of Appropriations, Allotments and Obligations (SAAOB) and supporting schedules.

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

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

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

20

LGU AUDIT


San Isidro No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

San Juan

Qualified/ Modified

The net book value of certain PPE items of the Municipality totaling P22,984,396.98 representing 21% of the total net assets of P109,030,451.60 as of December 31, 2017 and its related provision for depreciation cannot be ascertained due to unreconciled discrepancy between the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and the financial statements totaling P4,504,185.38 and non-maintenance of Property, Plant and Equipment Ledger Cards (PPELC) contrary to Sections 120 and 124 of the New Government Accounting System (NGAS) Manual, Volume 1.

The partial recognition by the municipality of the Local Road Networks account in the books at year-end totaling P65,399,421.90 pursuant to Item IX of COA Circular 2015-008 remains doubtful due to incomplete documentation to support the balance and non-provision of depreciation;

Completed project costing P2,946,708.73 was incorrectly recorded as repairs and maintenance rather than recognized as Road networks, understating income and public infrastructures by the same amount;

Reciprocal accounts Due from Other Funds and Due to Other Funds remained unreconciled by P612,702.26 as of December 31, 2017 Trial Balance; and,

Accuracy of the Cash in Bank account balances as of December 31, 2017 Statement of Financial Position could not be ascertained due to non-reconciliation of the general ledger balances with the bank record by P289,439.74 under the General Fund and an unaccounted amount of P22,000.00 under the Trust Fund resulting from the non-preparation of bank reconciliation statements in the previous years and limited efforts of management in tracing the source of said discrepancy.

San Quintin

Qualified

The existence, valuation and condition of local road networks could not be ascertained due to the non-conduct/non-submission of the Report of physical count; thus, the reliability, propriety, and fairness of presentation of the balances in the financial statements remain doubtful;

Long-overdue receivables and fund transfers remained uncollected thereby depriving the government of additional needed for its operation while dormant receivables account were not requested for write-off, thus, casting doubt as to the propriety and validity of the recorded current assets account totaling P 1,375,799.25; and,

Dormant balances of mandatory trust liability accounts totaling P81,730.30 were carried over in the books despite the absence of pertinent documents to support the validity of the recorded balances, thus, casting doubt on the fairness of presentation of the Financial Statements.

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

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

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

21

LGU AUDIT


Tayum

Qualified/ Modified

The validity, existence and accuracy of the Property, Plant and Equipment accounts worth P30,572,342.08 could not be ascertained due to non-submission of the updated Report on the Physical Count of PPE and non-maintenance of required records;

Eight (8) parcel of Lands with Fair Value totaling P1,879,840.00 covered by Tax Declaration under the name of the Municipality were not recorded in the books of accounts. Moreover, the validity of ownership is doubtful due to the absence of Transfer Certificate of Titles in the name of the Municipality;

Unaccounted difference between the accounting and treasury records by P1,138,537.72 as well as accounting and bank records by P1,076,587.11 for Cash in Bank accounts is yet to be reconciled, thus, the accuracy of the cash account balances remained doubtful;

Disbursement vouchers and liquidation documents of cash advances with amounts totaling P687,692.00 and P781,224.35 respectively were not submitted contrary to Sections 39, 100 and 122 of PD 1445. Hence, necessary audit thereof to determine the regularity, validity and propriety of said payments could not be readily conducted; and,

Evaluation on the accuracy of the submitted Statement of Comparison of the Budget and Actual Amounts could not be made due to improperly accomplished Obligation Requests and non-submission of the Statement of Appropriations, Allotments and Obligations (SAAOB) and supporting schedules.

Tineg No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Tubo No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Villaviciosa

Qualified/ Modified

The balance of loan per record of the Land Bank and the Municipality remained unreconciled by P1,635,780.71. 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; and,

Correctness and reliability of the submitted Statement of Comparison of Budget and Actual Amounts (SCBAA) could not be established due to non-maintenance of Registries of Allotment and Obligation and non-submission of reconciliation between actual amounts;

The 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 costing P31,759,741.07;

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

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

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

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

22

LGU AUDIT


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 P211,538.00, casting doubt on the collectability or settlement of the receivables and the reliability of the amount presented in the Financial Statements; and,

The Municipality partially recognized P140,062,776.86 of Local Road Networks in the books of account in compliance with Item IX of COA Circular No. 2015-008. However, the recognition is doubtful due to incomplete documentation.

Province of Apayao Unqualified/ Unmodified

Municipalities:

Calanasan Unqualified/ Unmodified

Conner Unqualified/ Unmodified

Flora

Qualified/ Modified

The reliability of the balances of receivable and liability accounts amounting to P20,311,269.38 and P79,535,841.08, respectively as of December 31, 2017 could not be ascertained due to incomplete data presented on the schedules submitted; and,

The validity and reliability of the reciprocal account balance of Due from Other Funds and Due to Other Funds could not be ascertained due to failure of the Municipal Accountant to reconcile the said accounts with a variance of P782,767.61.

Kabugao Qualified/ Modified

Accounts payable totaling P47,227,899.09 were not properly documented casting doubt on the validity and propriety of financial claims; Erroneous and/or non-recording of various transactions contrary to the Public Sector Accounting Standard No. 1, resulted in the overstatement of assets and liabilities in the amount 2,606,347.34 and P3,740,718.09, respectively; and understatement of 1134370.75 in the government equity.

Luna Qualified/ Modified

There is an unreconciled variance amounting to P7,974,588.31 between the financial statements and the Subsidiary Ledger (SL). Accounts Payable totaling P30,208,997.73 were already recognized although the services have not yet been rendered nor goods delivered.

Pudtol

Qualified/ Modified

Cash-in-Bank balances totaling to ₽96,518,017.89 were not reconciled with the balances per cashbooks, and the balances per bank statements, thereby casting doubts on their reliability;

The Building accounts in the total amount of ₽23,626,706.20 were not provided with resulting in the understatement of the PPE and expenses; and overstatement of the income and Government Equity accounts; and,

23

LGU AUDIT


Liabilities amounting to P222,151.19 were understated due to erroneous recording and/or non-recording of various transactions.

Santa Marcela Qualified/ Modified

The Construction in Progress accounts amounting to P20,379,806.44 as of December 31, 2017 was not supported with schedules, rendering the account balance doubtful.

Province of Benguet

Qualified/ Modified

Discrepancy between the accounting and property records on the Land and Buildings and Other Structures account aggregating to P67.402 million and P154.070 million, respectively, due to non-recording and unaccounted land and buildings that rendered the validity of the accounts doubtful;

The accuracy and validity of the Property, Plant and Equipment (PPE) account balance of Benguet General Hospital Economic Enterprise (BeGHEE) amounting to P353.873 million could not be ascertained due to:

a) Missing PPE aggregating P56.108 million; and

b) Inclusion of transferred and disposed PPE totalling P8.634 million and P6.149 million, respectively, thus rendering the affected accounts misstated.

Revenues for services rendered on patients who executed promissory notes were not recognized in the period they were rendered because of the practice of recording revenues only upon receipt of payment thereby understating the revenue and receivable accounts by P4.36 million as presented in the financial statements contrary to Philippine Public Sector Accounting Standards 9.

City:

Baguio City Qualified/ Modified

The validity and accuracy of the balance of the Property, Plant and Equipment (PPE) account amounting to P2,517,540,264.06 is uncertain due to an unreconciled difference of P153,398,105.38 between the accounting and property records.

Municipalities:

Atok Qualified/ Modified

The existence, condition and valuation of the Property, Plant and Equipment account with a total book value of P70,119,090.90 as of December 31, 2017 could not be ascertained due to the absence of an Inventory Committee to conduct a physical inventory and thereafter submit a Report on Physical Count of Property, Plant and Equipment that resulted to the non-reconciliation of the property records with the accounting records.

Bakun

Qualified/ Modified

Failure to observe the documentation requirements in setting up the Accounts Payable at the end of the year cast doubt on the reliability and propriety of said account’s balance of P1,347,124.07;

24

LGU AUDIT


Non-adjustment of the Construction in Progress account despite 100 percent completion and acceptance by the end user inversely affecting the correctness and reliability of its total balance of P6,403,152.57 and the appropriate asset accounts;

Reliability and existence of the receivables account totaling P15,698,042.09 were in doubt to due inclusion of accounts which had :

a) Uncertain possibility of collection/settlement

b) No supporting documents

c) Not been provided with allowances for impairment

Non-preparation of Report on the Physical Count of Property, Plant and Equipment and Report on the Physical Count of Inventories caused by the failure of the Municipality to conduct a physical count of Property and Supply Management System, resulted in the uncertainty of the reliability, accuracy and existence of the total accounts balances of P33,758,302.50.

Bokod

Qualified/ Modified

The Report of Physical Count of Property, Plant and Equipment (RPCPPE) for Calendar Year 2017 was not prepared due to the non-conduct of physical inventory-taking as required by established rules and regulations. As such, validity, correctness and existence of the Property, Plant and Equipment account totaling P116 million could not be ascertained rendering doubt on the accuracy of the balance of the account in the financial statements; and,

The existence and valuation of Inventory account totaling P1.63 million is unrealiable due to absence of physical count of inventories contrary to the provision of Section 124, Volume I of the New Government Accounting System Manual.

Buguias Qualified/ Modified

The correctness of the balance of the Cash in bank – Local Currency Current Account could not be ascertained due to unreconciled difference of P51.86 million between the cashbook and accounting records;

Validity of the Cash in Bank – Time Deposit account balance in the amount of P1,123,483.59 was uncertain for failure to support with any financial or bank document to authenticate its existence in the Municipality’s Authorized Government Depository Bank;

Non-adjustment of the Construction in Progress account despite 100 percent completion and acceptance of the projects by the end-users affected the correctness and reliability of its total balance of P31.36 million and the appropriate asset accounts;

Completed infrastructure projects funded from financial assistance released by the national government in the implementation of the Local Government Support Fund and Assistance to Disadvantages Municipalities programs for local government units in the aggregate amount of P27.12 million were not recognized in the accounting records as of December 31, 2017; and,

25

LGU AUDIT


The Inter-agency Payables – Due to GSIS, PAG-IBIG and Philhealth accounts had abnormal debit balances of P343,999.14, P61,056.83 and P18,500.00, respectively.

Itogon Unqualified/ Unmodified

Kabayan

Qualified/ Modified

The reliability of the Property, Plant and Equipment (PPE) account balance could not be ascertained due to non-recognition of property and equipment worth P1.31 million in the books of accounts; thus, understating the PPE Account;

Unserviceable properties with a total net book value of P374,072.26 remained in the books of accounts and were not disposed of as of year-end due to :

a) failure of management to prepare the Inspection and Inventory Report for Unserviceable Property (IIRUP) for CY 2017 inventory; and,

b) inaction of the Municipality’s disposal committee on an IIRUP submitted by the Municipal Treasurer’s Office for CY 2016 inventory; thus, effective overstating the PPE account.

Stale checks totaling P55,396.81 remained unadjusted in the books of accounts as of December 31, 2017, thereby, understating the accounts Cash in Bank – Local Currency Current Account and the Accounts Payable;

The total reported balance of the Inter-Agency Payables account of P16,843,694.60 as of December 31, 2017 was not accurate due to: (a) accounting errors totaling P71,084.25; and (b) abnormal balance amounting to P172,194.23; thus, affecting the reliability of the account balance and,

The 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 P19,359,571.64 and P19,600,249.16, respectively, as a result of inconsistencies in recording transactions between reciprocal accounts.

Kapangan Unqualified/ Unmodified

Kibungan Qualified/ Modified

Small tangible items worth P131,144.34 were classified as Property, Plant and Equipment (PPE), contrary to COA Circular No. 2005-002 dated April 14, 2005, thus, the PPE account was overstated by P131,144.34 and the expenses account had a net understatement of P72,563.39.

La Trinidad

Qualified/ Modified

Reliability of the Inventory and Property, Plant and Equipment (PPE) accounts presented in the financial statements were doubtful due to the continued inability of the Municipality to conduct the Physical count of inventories and PPE resulting in the non-preparation of the corresponding inventory reports necessary for reconciliation of property records. As such, the validity, accuracy and existence of the Inventory and PPE accounts totaling P9,077,428.28 and P129,872,664.59, respectively, could not be ascertained.

26

LGU AUDIT


Reconciling items reflected in the Monthly Bank Reconciliation Statements with a net amount of P700,490.21 remained unadjusted in the books of accounts rendering the accuracy and propriety of the Cash in Bank – Local Currency Current Account doubtful;

The Due from Non-Government Organizations/People’s Organizations account balance of the Municipality is unreliable due to non-liquidation of its long outstanding balance of P1,906,250.00; and,

The balances of the intra-agency accounts :

a) Due from Other Funds/Due to Other Funds;

b) Due from Special Accounts / Due to Special Accounts; and,

c) Due form Local Economic Enterprises / Due to Local Economic Enterprises had unreconciled differences amounting to P9,707,722.23, P1,982,405.28 and P7,725,316.95, respectively, as a result of inconsistencies in recording transactions between reciprocal accounts.

Mankayan Qualified/ Modified

Motor vehicles with an estimated cost of P1,375,000.00 were not recognized in the books of accounts resulting in the understatement of Property, Plant and Equipment and Government Equity accounts.

Sablan Unqualified/ Unmodified

Tuba

Qualified/ Modified

A motor vehicle – firetruck donated by the Provincial Government of Benguet costing P1,395,000.00 was not recorded in the books of accounts resulting in the understatement of Property, Plant and Equipment and Government Equity Accounts;

Expenses for the major repair of service vehicle amounting to P107,000.00 were not capitalized, thus understating the Motor Vehicles account and overstating the Repairs and Maintenance – Motor Vehicle account; and,

Payment made on disallowed personnel benefits were erroneously lodged under Other Payables account resulting in the overstatement of payables account and understatement of government equity account by P36,000.00.

Tublay Unqualified/ Unmodified

Province of Ifugao Qualified/ Modified

The Cash in Bank, Intra-agency and Other Receivables Account balances are unreliable due to unresolved/unadjusted and unreconciled differences of P11,125,447.92, P19,021,147.26, and P4,090,208.07, respectively; and,

27

LGU AUDIT


Due to National Agencies account contained dormant funds and negative balances amounting to P10,825,399.96 and P138,413.77.

Municipalities:

Aguinaldo Unqualified/ Unmodified

Alfonso Lista Qualified/ Modified

Acquired property and equipment under the trust fund with a total cost of P18,032,026.00 were not booked up, thereby, understating the asset and equity accounts.

Asipulo Unqualified/ Unmodified

Banaue

Qualified/ Modified

The non-compliance with the Philippine Public Sector Accounting Standards (PPSAS) and COA Circulars relative to the preparation and presentation of the financial statements (FS) due to:

a) inadequate, erroneous, and unnecessary disclosures in the Notes to FS;

b) defective Statement of Financial Performance (SFPer); and,

c) erroneous classification of activities in the Statement of Cash Flows (SCF) results in insufficient and misleading information to FS users, and affects the fair presentation thereof.

The existence, validity and accuracy of the Property, Plant and Equipment (PPE) account balances could not be verified and relied upon by a total of P71,111,560.87, net of accumulated depreciation, because of the auditee’s inability to maintain property records, to conduct physical count and periodic reconciliation of records, and to completely record PPE assets, as prescribed by the Manual on the New Government Accounting System for Local Government Units and the PPSAS;

The non-recording in the books of three Trust Fund bank accounts, totaling P274,361.20, renders the Cash balance understated by the same amount;

The misclassification of the LGU counterpart funds to PRDP and other national government agency-funded projects totaling P17,975,782.00 and P4,200,000.00 for CY 2017 and prior years, respectively, renders the information contained in the FS misleading to users, and creates doubt on the fairness of presentation of the FS, as it is not in accord with the Revised Chart of Accounts for LGUs; and,

The incomplete submission of vouchers affects the validity and propriety of the recorded transactions and accuracy of the account balances in the FS by as much as P10,059,505.08 and P11,322,704.39 for Assets and Expenses, respectively.

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LGU AUDIT


Hingyon Qualified/ Modified

Management did not book up the cost of acquired property and equipment under the trust fund with a total cost of P5,699,287.50, thereby understating the Asset and Equity accounts.

Hungduan Unqualified/ Unmodified

Kiangan Qualified/ Modified

Management did not book up the cost of acquired property and equipment under the trust fund with a total cost of P14,543,770.08, thereby understating the Asset and Equity accounts.

Lagawe Unqualified/ Unmodified

Lamut Unqualified/ Unmodified

Mayoyao

Qualified/ Modified

The balances of Property, Plant and Equipment, Net and Government Equity were understated by P15,281,012.24 and P16,893,598.24, respectively, due to non-recogntition of PPEs, erroneous recording back to the books of CYs 2012-2015 public infrastructures, errors in recording the payment of previously obligated PPEs, non-capitalization of directly attributable cost, erroneous recording of PPEs with General Fund counterpart, non-observance of the reporting cut-off date in recording completed projects at year end, and non-provision of depreciation expense on certain PPEs; and,

At least 50% of public infrastructures of prior years were not recorded back to the books, as part of the transitional provisions in the adoption of the Philippine Public Sector Accounting Standards; the minimum disclosure requirements on the implementation of the Municipal Risk Reduction and Management Fund were not included in the Notes to Financial Statements; and biological assets of the Municipality’s operations of its loach hatchery and rubber trees were not recognized.

Tinoc Unqualified/ Unmodified

Province of Kalinga Unqualified

City:

Tabuk City Qualified/ Modified

Due to to the improper classification of accounts totalling P47,114,010.69.

Municipalities:

Balbalan Unqualified/ Unmodified

Lubuagan Unqualified/ Unmodified

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LGU AUDIT


Pasil Qualified/ Modified

Due to the non-reporting of the Trust Fund account resulting in the understatement of assets and liabilities by as much as P14,989,624.72 as of December 31, 2017.

Pinukpuk

Qualified/ Modified

Due to the erroneous and/or non-recording of various transactions that resulted in the overstatement of assets, liabilities and government equity in the amount of P22,187,292.93, P14,083,266.77, and P8,104,026.16, respectively as of December 31, 2017;

The PPE accounts amounting to P52,859,676.15 were not provided depreciation while others were provided inadequate or erroneous depreciation expenses resulting in the misstatement of PPE accounts totaling P66,694,403.87 as of December 31, 2017; and,

The unaccounted utilization of or unsupported supplies expenses amounting to P13,824,208.00 due to weak controls in the handling and management of supplies resulted in the doubtful accuracy of the balance of inventories in the total amount of P94,336,609.05 at year-end.

Rizal Unqualified/ Unmodified

Tanudan Qualified/ Modified

Due to understatement of Assets, Liabilities, and Government Equity in the amount of P651,700.00, P231,900.00, and P419,800.00, respectively.

Tinglayan Qualified/ Modified

Due to the doubtful accuracy of the PPE accounts with Net Book Value of P34,815,768.43 and its existence could not be established due to various items not included in the inventory report, discrepancies in cost and the inadequacy of PPE Ledgers and Property Cards.

Mountain Province Unqualified/ Unmodified

Municipalities:

Barlig Unqualified/ Unmodified

Bauko Unqualified/ Unmodified

Besao Unqualified/ Unmodified

Bontoc Unqualified/ Unmodified

Natonin Unqualified/ Unmodified

Paracelis Unqualified/ Unmodified

Sabangan Unqualified/ Unmodified

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LGU AUDIT


Sadanga Unqualified/ Unmodified

Sagada Unqualified/ Unmodified

Tadian Unqualified/ Unmodified

Region I – Ilocos Region

Ilocos Norte Qualified/ Modified

Doubtful existence and completeness of inventories totaling P125,058,784.71 and erroneous classification of collections and expenses of the Plaza Del Norte (PDN) Hotel and Convention Center amounting P29,250,761.17 and 13,137,442.48 respectively.

Cities:

Batac City

Qualified/ Modified

The existence, completeness, accuracy and reliability of the recorded Property, Plant and Equipment and Inventories in the amount P947,477,839.33 and P5,856,400.49, respectively, could not be ascertained due to non-conduct of physical count thereof and the non-submission of the required inventory reports;

The land account carried in the Statement of Financial Position at P19,202,964.32 is of doubtful validity and reliability due to the inclusion of 179 parcels with a total land area of 1,120,348.24 square meters costing P15,533,407.08 which are not yet covered by Torrens/Transfer Certificates of Title (TCT) in the name of the City Government. Likewise, several parcels of land do not have assigned costs;

The accuracy of the Cash – Local Treasury and Cash in Bank – Local Currency Current Account balances of P4,441,778.10 and P691,583,460.00, respectively, was not ascertained due to non-reconciliation of the records of the City Accountant and the City Treasurer. This resulted in the differences of (P246,563.37) and P1,919,987.93, respectively;

The classification of the share from RA 7171 in the amount of P24,026,263.88 to Due to National Government Agencies account instead of Share from Tobacco Excise Tax overstated total liabilities and understated equity by the same amount;

The validity, propriety, and existence of the reported Accounts Payable for all funds at year-end amounting to P18,682,474.55 were doubtful due to non-presentation of supporting documents to vouch the claims;

The unutilized balance of the Local Disaster Risk Reduction Management Fund (LDRRMF) transferred to Trust Liabilities – Disaster Risk Reduction Management Fund as of December 31, 2107 still included the 2012 unutilized LDRRMF in the amount of P8,824,766.51, thus, overstating total liabilities and understating equity by the same amount; and,

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LGU AUDIT


375 disbursement vouchers (DVs) covering December 2017 for all funds amounting to P12,942,620.59 and 198 payrolls for the period June 16, 2017 to December 2017 totaling P27,915,280.07 were not submitted for audit within the reglementary period, thus, their propriety and validity were not ascertained.

Laoag City Adverse The accuracy of reported balances of 29 trial balance accounts totaling to P977.86 M was uncertain due to absence of supporting schedules; accuracy and existence of asset accounts amounting to P746.18 M were uncertain due to prior years’ issues not addressed by management; accuracy, propriety and existence of Accounts Payable amounting to P66.3 M were unreliable due to incomplete documentation.

Municipalities

Adams

Qualified/ Modified

The year-end balances of Property, Plant and Equipment accounts amounting to P94,241,688.81 are unreliable due to

a) incomplete physical count of PPE;

b) unreconciled PPE balance of RPCPPE with the books of accounts;

c) inclusion of unserviceable properties; and,

d) non-provision of depreciation on Other Land Improvements and Infrastructure Assets accounts.

The non-submission of vouchers and liquidation reports totaling P20,976,253.86 affected the accuracy and completeness of recorded transactions of the municipality.

Bacarra Qualified/

Modified The year-end balances of the Property, Plant and Equipment

(PPE) accounts amounting to P154,235,149.70 could not be ascertained due to

a) non-conduct of regular physical inventory;

b) non-maintenance of property records;

c) non-disposal of unserviceable assets contrary to Section 79 of P.D. 1445;

d) non-recording of donated properties; and,

e) non-provision of depreciation on Local Road Networks account.

Badoc Qualified/

Modified The balances of the Property, Plant and Equipment (PPE)

accounts as of December 31, 2017 amounting to P351,842,970.63 were unreliable due to:

a) unreconciled difference of P6,686,179.20 between the balances per books and the inventory reports;

b) non-maintenance of complete property, plant and equipment ledger cards by Accounting Office and property cards by General Services Office;

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LGU AUDIT


c) failure to regularly renew Property Acknowledgement Receipt (PAR); and,

d) non-transfer of accountability of some items which were still assigned to persons no longer connected to the municipality.

Reported balance of Inventory account totaling to P25,628,378.71 as of December 31, 2017 is rendered doubtful and unreliable due to the non-conduct of physical count of the said account.

Bangui

Qualified/ Modified

The reliability and correctness of the reported Property, Plant and Equipment could not be ascertained due to non-reconciliation of accounting records against property records showing a difference of P106,469,891.01; and,

The non-reconciliation of reciprocal accounts Due from Other Funds and Due to Other Funds with a difference of P2,023,116.76; and the inaccurate balances of Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable amounting to P15,077.93 and P15,077.93 respectively.

Banna

Qualified/ Modified

The correctness and reliability of the year-end balance of the Cash in Bank – Local Currency, Current Account amounting to Php124,665,267.18 cannot be established due to non-submission of bank reconciliation statements and bank statements;

The propriety of the year-end balance of the Inventory and Property, Plant and Equipment account amounting to Php480,282.70 and Php226,450,085.56 respectively cannot be established due to non-submission of Report of the Physical Count of Inventories and Property, Plant and Equipment;

The correctness and reliability of non-cash accounts cannot be established due to the absence of General Journals;

The correctness and reliability of the recorded transactions of the municipality could not be ascertained due to non-submission of disbursement vouchers and liquidation reports;

The cash advances for Petty Cash Fund with a total amount of Php40,000.00 were incorrectly recorded as Due from Officers and Employees; and,

The balance of Cash Advances for Payroll account is misstated due to the incorrect liquidation of cash advances.

Burgos Qualified/ Modified

The accuracy and validity as well as physical existence and condition of the reported account balances of Property, Plant and Equipment totaling P52,994,286.12 could not be established and verified due to the continued inability of management to conduct physical count of all assets, the non-maintenance of property ledger cards/supporting schedules and property cards to support the amount presented in the year-end financial statements and the non-provision of depreciation for Infrastructure Assets.

33

LGU AUDIT


Carasi Qualified/ Modified

The non-reconciliation of the balances of the Cash accounts between the cashbook and general resulted to an unaccounted difference of P19,396,577.76; and,

The accuracy of the year-end balance of the Construction-in-Progress (CIP) account was doubtful due to a disparity of P11,553,712.95.

Currimao

Qualified/ Modified

Due to the unreconciled balances between the Accounting and Property records amounting to P99,496,284.71 affecting the validity and accuracy of the balances of Property, Plant and Equipment with a total book value of P240,984,143.53; and

Included in the books of account and inventory report are unserviceable and obsolete properties totaling P1,636,066.23, thus, overstating the same.

Dingras

Qualified/ Modified

Land account amounting to P3,520,745.17 was not covered by Certificate of Title and not supported with documents, thus the existence, accuracy and validity of land ownership could not be ascertained;

Long outstanding reconciling items in the Bank Reconciliation Statements that were not adjusted at year-end, thus casting doubts on the correctness and reliability of the balance of Cash in Bank – Local Currency, Current Account in the financial statements amounting to P66,387,687.77; and,

Accounts Payable amounting to P6,064,532.90 which were not found on valid claims and not reverted to the unappropriated surplus, casting doubts on the validity and adversely affect the management’s assertion on existence

Dumalneg Qualified/ Modified

The reported balance of the PPE totaling P58,932,905.30 was unreliable due to the unreconciled difference of P423,916.54 between the balances of the Accounting Records and the Report on the Physical Count of Property, Plant and Equipment; two units ambulance, with undetermined value, donated by the PCSO and some equipment, furniture and fixtures were not recorded in the books of the accounts and inventory report and the value of the demolished public market and stalls in the amount P2,512,466.55 is still included in the books of accounts and inventory report.

Marcos

Qualified/ Modified

The propriety of the year-end balance of the Inventory and Property, Plant and Equipment account amounting to Php3,020,595.97 and Php219,969,066.49 respectively cannot be established due to non-submission of Report of the Physical Count of Inventories and Property, Plant and Equipment; and,

The non-recording of the purchased Dump Truck and constructed Evacuation Building as assets in the Property, Plant and Equipment account amounting to Php1,699,000.00 and Php1,748,235.10 respectively.

Nueva Era Qualified/ Modified

The balances of Plant, Property and Equipment with a total book value of P380,057,391.16 cannot be ascertained due to

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LGU AUDIT



b) non-maintenance of complete property, plant and equipment ledger cards by Accounting Office and property cards by General Services Office,

c) failure to regularly renew Acknowledgement Receipt for Equipment (ARE); and,

d) non provision of depreciation to various PPE accounts totaling to p78,757,129.16;

Improper classification of the non-current portion of Loans Payable-Domestic with an outstanding balance amounting to P2,772,410.01;

Failure to disclosed essential information to the notes to the financial statement for line items Other Payables totaling to P114,828,625.05; and,

Improper recording of unexpended balance of receipts from Tobacco Excise Tax (RA 7171) for CY 2016 under Trust Fund totaling to P33,151,574.55.

Pagudpud Qualified/ Modified

Inclusion of unserviceable properties in the PPE account amounting to P12,321,440.60.

Paoay

Qualified/ Modified

The existence, completeness, accuracy and reliability of the recorded Property, Plant and Equipment in the amount of P205,928,147.57 could not be ascertained due to non-conduct of physical count thereof and the non-submission of the required Inventory Report;

The land account carried in the Statement of Financial Position at P34,505,238.03 is of doubtful validity and reliability due to the inclusion of 20 parcels with a total land area of 149,314 square meters costing P5,721,595.00 which are not yet covered by Torrens/Transfer Certificates of Title (TCT) in the name of the Municipal Government and a difference of P7,248,286.73 was noted because the balance of the Land account in the financial statements does not tally with the total amount of lots in the submitted List of Government Real Properties by the Municipal Assessor. Likewise, several parcels of land do not have assigned costs;

The accuracy of the Cash in Bank – Local Currency, Current Account balances of P98,139,713.56 was not ascertained due to non-reconciliation of the records of the Municipal Accountant and the Municipal Treasurer. This resulted in the difference of (P3,156,475.80);

The validity, propriety and existence of the reported Accounts Payable for all funds at year-end amounting to P3,087,393.18 were doubtful due to non-presentation of supporting documents to vouch the claims;

The Municipal Government faces the risk of not being able to fund its obligations to be incurred for the unexpended/unobligated balance of the 20% Development Fund, Calamity Fund, RA 7171 and Continuing Appropriations under General and Special Education Funds

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LGU AUDIT


totaling P45,704,182.98 as of year-end since the available cash balance for the same period amounted to P32,646,153.39 only or a forecasted cash deficit of P16,935,526.59; and,

The Municipal Government faces the risk of not being able to fund its obligations to be incurred for the unexpended/unobligated balance of the 20% Development Fund, Calamity Fund, RA 7171 and Continuing Appropriations under General and Special Education Funds totaling P45,704,182.98 as of year-end since the available cash balance for the same period amounted to P32,646,153.39 only or a forecasted cash deficit of P16,935,526.59.

Pasuquin

Qualified/ Modified

Non-submission of DVs from August to December 2017;

The correctness of year-end balances of the movable PPE amounting to P60,349,281.81 was not established due to non-reconciliation of actual inventory in RPCPPE with accounting records;

The accuracy and reliability of the affected accounts totaling to P77,306,791.78 could not be determined due to absence of complete subsidiary ledgers for Land, Land Improvements, Road Networks, Buildings, Other Structures and Books; and,

Piddig

Qualified/ Modified

The correctness and existence of the Property, Plant and Equipment (PPE) accounts amounting to P227,450,110.96 cannot be ascertained due to the non-completion of annul physical inventory and the failure of the General Services and Accounting Offices to reconcile their records;

The correctness of the balances of the cash accounts is doubtful due to the non-reconciliation of the balances between the cashbook and general ledger;

The balances of the Due to NGAs and Construction in Progress accounts at year-end are doubtful due to unaccounted amounts;

The balances of Inventory Held for Distribution and Consumption amounting to P11,864,219.09 and P3,903,480.58 respectively could not be ascertained due to the non-adjustment of the distribution and issuances of inventories; and,

The non-submission of Disbursement Vouchers amounting to P18,252,376.22 may affect the reliability of the affected accounts in the financial statements.

Pinili

Qualified/ Modified

The non-reconciliation of books of accounts and RPCCPE;

Non-provision of depreciation to some properties;

Inclusion of unserviceable/obsolete properties;

Unrecorded property acquired through donations;

Non-titling of land recorded in the books at P19,793,587.52; and,

Non-submission of vouchers totaling P28,888,603.53 affected the accuracy and completeness of recorded transactions of the municipality

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LGU AUDIT


San Nicolas Qualified/ Modified

The year-end balance of the PPE totaling P466,486,490.87 was unreliable due to the unreconciled difference of P37,003,855.53 between the balances of the General Ledger and RPCPPE.

Sarrat Qualified/ Modified

The correctness of the balances of the property, plant and equipment and inventories worth P205,488,843.72 and P14,057,784.97 respectively, were not ascertained due to non-completion of physical inventory of its properties and non-adjustment of the issuances of inventories.

Solsona

Qualified/ Modified

Land account amounting to P3,371,170.45 was not covered by Certificate of Title and not supported with documents thus the existence, accuracy and validity of the land ownership could not be ascertained;

The accuracy and validity of the PPE account balances totaling P187,577,205.88 could not be assured due to difference of P124,268,928.1 between the Inventory Report of the GSO and the Accounting records and the existence of unaccounted balances of PPE accounts in the books as well as in the inventory report; and,

Cost of completed projects charged under the 20% development fund totaling P7,719,102.26 were inappropriately charged to expense, under the Other Maintenance and Other Expenses account, thus the expense account was overstated by P7,719,102.26 and the assets accounts was understated by the same amount.

Vintar Qualified/ Modified

The balances of Property, Plant and Equipment (PPE) accounts totaling P273,093,083.04, as of December 31, 2017, are misstated due to the non-completion of physical inventory of its properties. Moreover, the correctness of the balances of the Inventory Held for Distribution totaling P16,978,828.41 were not ascertained due to the non-adjustment of the issuances of some inventories to their appropriate accounts which overstated the assets of the municipality.

Ilocos Sur

Qualified/ Modified

There was an unreconciled difference of P311,644,384.99 on the comparison of the balances of PPE as appearing in the General Ledger and RPCPPE, thus casting doubt on the validity, existence, accuracy and fair presentation of the PPE accounts;

Loans Payable-Domestic and Interest Payable accounts in the General Fund were understated by P108,343,160.63 and P1,343,341,273.24, respectively by not recognizing the amount of restructured loan as determined by PDIC;

Drugs and medicines requisitioned from the BPIS during the year and prior years totaling to P87,459,034.26 and P28,421,116.78, respectively were not obligated thus, understating expenses by P87,590,034.26 during the year and overstating government equity and understating accounts payable by the same amounts of P115,880,151.04; and

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LGU AUDIT


There was an overstatement of surplus for the period considering the sales revenue reflected amounting to P 29,796,802.29 showed no cost of sales deducted.

Cities:

Candon City

Qualified/ Modified

The accuracy, completeness and existence of the Property, Plant and Equipment accounts totaling to P1,216,089,828.77 were unreliable due to:

a) inability of the City to conduct complete physical count of Property, Plant and Equipment;

b) lack of complete and updated property records; c) inclusion of Land totaling P32,348,261.86 not

supported with Transfer Certificates of Title;

d) inclusion of completed infrastructure projects amounting to P49,651,258.92 under Construction in Progress;

e) non-disposal of unserviceable PPE amounting to P39,287,387.27.

We were not able to adopt other alternative audit procedures to ascertain the accuracy and reliability of the account due to the absence of complete and updated property records.

Vigan City Qualified/ Modified

The reliability of the Property, Plant and Equipment as appearing in the books of the City amounting to P833,843,227.25 could not be ascertained due to the failure of the City to conduct a complete physical count of all its properties and the non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) or Report on the Physical Count of Inventories (RPCI);

Cash in Bank – Local Currency Account (LCCA) amounting to P452,693,074.16 is unreliable because of the unreconciled difference of P2,225,618.69 between the books of accounts and the cashbook; and,

The unreconciled balances of the Due to LGUs account amounting to P5,686,593.66 as against the balances of the Provincial Government of Ilocos Sur due to non-availability of records had affected the fair presentation of the account in the financial statements.

Municipalities:

Alilem Qualified/ Modified

Only yearly Bank Reconciliation Statements (BRS) instead of monthly were submitted to the Auditor but four (4) funds have unreconciled balances totaling P1,148,745.50 thus casting doubts on the reliability and accuracy of the cash in bank presented in the financial statements; and,

Balances of the Property, Plant and Equipment (PPE) as appearing in the General Ledger and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) showed an unreconciled difference of P70,840,641.48, thus casting doubt on the accuracy and fair presentation of the PPE accounts.

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LGU AUDIT


Banayoyo

Qualified/ Modified

The existence and accuracy of some balances of properties under the Property, Plant and Equipment Account could not be ascertained due to unreconciled balance of P91,742,521.44 between per books and Physical Inventory Report; and,

The inability of the municipality to record back in the boos of accounts at least 50% of the Public Infrastructures from the registries to their appropriate accounts of the Property, Plant and Equipment amounting P103,796,152.50 may understate the said account as of the end of the year which is not in accordance with Section 3.7 of COA Circular No. 2016-004 dated September 30, 2016.

Bantay

Qualified/ Modified

There is risk that total of PPE amounting to P377,832,334.98 as appearing in the FS is misstated due to the inability of the Inventory Committee to complete inventory taking, due to the inclusion in some PPE accounts the costs of projects that are not permanent in nature and those already beyond economical repair and for taking up as expenses some capitalizable costs during the year;

Defects were noted in some of the documents that supported Liquidation Reports thereby understating the balane of the accounts Advances to Officers and Employees amounting to P147,253.30 by P608,922.36; and,

Some purchases of supplies and materials were recorded as outright expenses hence, there is risk that several expense accounts are overstated and assets and equity are understated.


The validity, existence, serviceability, ownership and correctness of the recorded PPE with a total gross amount of P295,203,742.81 and its provision for depreciation could not be ascertained due to the inability of the management to conduct the physical count and non-submission of the Report on the Physical Count of PPE (RPCPPE); and,

Dormant receivables in the total amount of P6,085,307.47 were not substantiated with any documents showing the names of debtors, nature of the transactions and other vital information affecting the fair presentation of the financial statements.

Cabugao Qualified/ Modified

The reliability, accuracy and existence of the recorded Property, Plant and Equipment (PPE) in the amount P712,916,234.06 as of December 31, 2017 were not ascertained due to the inability of the municipality to conduct the required annual physical count as of December 31, 217, hence reconciliation of the result of the count with the accounting records was not also done.

Caoayan Unqualified/ Unmodified

Cervantes Unqualified/ Unmodified

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LGU AUDIT


Galimuyod Qualified/ Modified

The existence, actual condition, ownership and correct valuation of the Property, Plant and Equipment accounts amounting to P225,428,470.62 as of December 31, 2017 could not be ascertained because the municipality was not able to conduct an annual physical count of its properties and due to the inclusion in the PPE account the costs unserviceable properties and demolished buildings amounting to P945,375.86 and P333,670.74, respectively.

Gregorio Del Pilar

Qualified/ Modified

The validity, existence, serviceability and correctness of the recorded Property, Plant and Equipment (PPE) in the amount of P216,787,980.56 as of December 31, 2017 could not be ascertained due to the inability of the municipality to conduct the physical count of its PPE and the non-submission of the annual physical inventory report; and,

Bank reconciliation statements were not prepared and submitted for verification, thus the reliability and correctness of the Cash in Bank – Local Currency account amounting to P71,519,772.83 could not be established.

Lidlidda

Qualified/ Modified

The existence and accuracy of some balances of properties under the Property, Plant and Equipment Account could not be ascertained due to unreconciled balance of P10,326,043.97 between per books and Physical Inventory report; and

The inability of the municipality to record back in the books of accounts at least 50% of the Public Infrastructures from the registries to their appropriate accounts of the Property, Plant and Equipment amounting to P20,690,882.26 may understate the said account as of the end of the year which is not in accordance with Section 3.7 of COA Circular No. 2016-004 dated September 30, 2016.

Magsingal

Qualified/ Modified

The Property, Plant and Equipment in the amount of P471,461,191.65 was unreliable due to inability of the municipality to conduct a physical count and inventory of its Property, Plant and Equipment as of December 31, 2017. We were not able to apply alternative auditing procedures to determine the reliability of the account;

The Municipality was not able to record back 25% of the prior year’s Public Infrastructure Projects in the books of accounts due to incomplete Registry of Public Infrastructures, thereby rendering uncertainty on the fair presentation of the financial statements; and,

The Local Disaster Risk Management Fund (LDRRMF) balance of P1,447,872.50 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/ Modified

The Property, Plant and Equipment (PPE) account having a total gross amount of P169,940,729.73 did not tally with the actual count of P66,758,665.46 or a difference of P103,182,064.27 due to the failure of the municipality to complete the conduct of physical inventory which affects the fair presentation of the financial statements.

40

LGU AUDIT


Narvacan Qualified/ Modified

The reliability of the Property, Plant and Equipment (PPE) of the municipality with a gross value of P1,057,555,971.06 as of December 31, 2017 was doubtful due to various deficiencies uncovered in audit; and,

Cash in Bank of the municipality amounting to P587,529,962.60 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, thus resulting to a line item that was not fairly presented in the financial statements.

Quirino Qualified/ Modified

The accuracy and existence of the recorded property, plant and equipment in the amount of P337,625,537.83 could not be ascertained due to the inability of the management to conduct physical inventory of fixed assets.

Salcedo Qualified/ Modified

The existence, actual condition, ownership and correct valuation of the Property, Plant and Equipment accounts amounting to P258,817,418.94 as of December 31, 2017 could not be ascertained because the municipality was not able to conduct an annual physical count of its properties and the inclusion of unserviceable properties amounting to P7,939,318.49.

San Emilio Qualified/ Modified

The inability of the municipality to record back in the books of accounts of at least 50% of the Public Infrastructures from the registries to their appropriate accounts of the Property, Plant and Equipment Account amounting to P33,905,103.80 may understate the said account as of the end of the year which is not in accordance with Section 3.7 COA Circular No. 2016-004 dated September 30, 2017.

San Esteban Unqualified/ Unmodified

San Ildefonso

Qualified/ Modified

The total Property, Plant and Equipment (PPE) presented in the Financial Statements is misstated due to the inability of the Inventory Committee to complete inventory taking and due to the inclusion in the Building and Other Structures accounts the costs of structures that were already demolished; and,

Receivable totaling to P4,214,502.39 accounted for in the books as Due from LGUs and Due from NGOs/POs remained uncollected for several years now misstating the financial statements by the amount of receivables that are already beyond recovery/collection.


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 P474,160,168.20 as of December 31, 2017 could not be ascertained due to the inability of the municipality to conduct compete annual physical count on all its properties and the reports were not consolidated and reconciled with the accounting records.

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LGU AUDIT


San Vicente

Qualified/ Modified

Inventory Committee was not able to conduct inventory taking of the PPE and no public infrastructures were transferred in the books during the year hence, there is risk that the total PPE presented in the FS is misstated;

Monthly Bank Reconciliation Statements were not prepared and submitted for review or verification thus, there is risk that the total Cash in Bank balances is misstated;

Cash advances that were granted to an official of the Municipality and to the Municipal Treasurer totaling to P105,000.00 and P215,800.00, respectively remained unliquidated and were erroneously recorded in the books; and,

The unexpended balances of the Quicl Response Fund (QRF) and the DRRMF-MOOE for the years 2016 and 2017 were not transferred to Trust Fund thus misstating the Transfer of Unspent Current Year DRRM funds to the Trust Funds, Trust Liability – DRRMF and Government Equity accounts by P1,540,927.12.

Santa

Qualified/ Modified

The existence, validity, accuracy and fair presentation of the Property, Plant and Equipment of the municipality totaling to P226,184,595.52 as of December 31, 2017 could not be ascertained due to the failure of the municipality to conduct physical count of its properties and submit the corresponding Report on the Physical Count of Property, Plant and Equipment (RPCPPE); and,

No property cards were maintained. In addition, there were unaccounted receivables and payables totaling to P7,045,764.88. The inadequacy of records did not allow us to apply adequate alternative audit procedures to determine the validity of the accounts.

Santa Catalina Qualified/ Modified

The existence, validity, accuracy and fair presentation of the Property, Plant and Equipment of the municipality totaling to P78,580,682.63 as of December 31, 2017 could not be ascertained due to various deficiencies noted in audit; and,

Public Infrastructures previously transferred to registries were not recorded back in the books of accounts which resulted to understatement of Property, Plant and Equipment and Government Equity by the same amount of P57,805,833.69 thereby, affecting the fair presentation of the financial statements at year-end.

Santa Cruz Unqualified/ Unmodified

Santa Lucia Qualified/ Modified

The balances of Cash Local Treasury accounts in the ledger did not tally with the cashbook balances amounting to P405,911.83 due to non-reconciliation of Accounting and Treasury records. The inadequacy of its records did not allow us to apply adequate alternative procedures to determine the validity of these accounts.

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LGU AUDIT


Santa Maria Qualified/ Modified

The Property, Plant and Equipment (PPE) recorded in the books of accounts with total gross amount of P686,976,802.11 did not tally with the actual count of P78,399,744.97 or a difference of P608,577,057.14 due to the failure of the municipality to complete the conduct of physical inventory.

Santiago Qualified/ Modified

The existence and accuracy of some balances of properties under the Property, Plant and Equipment Account could not be ascertained due to unreconciled balance of P42,269,808.75 between per books and Physical Inventory Report; and,

The inability of the municipality to record back in the books of accounts at least 50% of the Public Infrastructures from the registries to their appropriate accounts of the Property, Plant and Equipment amounting to P80,417,187.46 may understate the said accounts as of the end of the year which is not in accordance with Section 3.7 of COA Circular No. 2016-004 dated September 30, 2016.

Santo Domingo Qualified/ Modified

Dormant receivables presented in the books as Due from NGOs/POs and Loans Receivables-Others remained not written-off despite previous audit recommendations hence misstating total assets presented in the financial statements.

Sigay Qualified/ Modified

The existence, actual condition, ownership and correct valuation of the Property, Plant and Equipment account amounting to P226,852,817.76 as of December 31, 2017 could not be ascertained due to the failure of the Municipality to conduct an annual physical count of its properties and the non-submission of the annual physical inventory report.

Sinait Qualified/ Modified

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 P419,365,246.54 as of December 31, 2017 could not be ascertained due to the failure of the municipality to conduct the required annual physical count as of December 31, 2017, hence reconciliation of the result of the count with the accounting records was not also done.

Sugpon

Qualified/ Modified

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 P112,991,955.51 as presented in the financial statements;

The accuracy and fair presentation of the Property, Plant and Equipment (PPE) with a gross value of P92,953,014.64 in the books as of December 31, 2017 cannot be ascertained due to unreconciled balances of the PPE accounts per Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and balances per financial statements;

The provision for depreciation for all depreciable assets of the municipality for CY 2017 and prior year adjustments

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LGU AUDIT


totaling P3,936,381.36 was erroneously recorded as debit to the corresponding PPE accounts which is not in compliance with paragraph 64 of the Philippine Public Sector Accounting Standards (PPSAS) 17 thus, overstating income, understating expenses and overstating the balances of PPE accounts; and,

Construction-in-Progress account includes cost of completed projects amounting to P3,469,413.68 violating the recognition of PPE in accordance with paragraph 14 of PPSAS 17, Property, Plant and Equipment, thus, understating the respective PPE accounts and understating the corresponding depreciation.

Suyo Unqualified/ Unmodified

Tagudin Unqualified/ Unmodified

La Union Qualified/ Modified

Due to the non-reconciliation of Inventory accounts in the total amount of P68,741,631.28 with the stock cards of the General Services Office thereby creating doubt on the correctness of the inventory balances in the financial statements. The Report on the Physical Count of Inventories (RPCI) were not also prepared.

La Union Medical Center Qualified/ Modified

The balances of the Inventory accounts in the total amount of P27,414,179.63 could not be ascertained due to incomplete inventory-taking and non-preparation and non-submission of the Report on the Physical Count of Inventories (RPCI) thereby, creating doubt on the correctness of the inventory balances in the financial statements.

City:

San Fernando City Qualified/ Modified

The accuracy and reliability of Property, Plant and Equipment could not be ascertained due to unreconciled balances between the reports of the Accounting Office and General Services Office amounting to P7,851,057.74;

Major repairs in the aggregate amount of P8,048,560.59 were recorded as an outright expenses and the items replaced were not derecognized in the books, thus, affecting the fair presentation of the PPE account; and,

Receivables amounting P17,102,843.24 remained long outstanding.

Municipalities:

Agoo Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) accounts amounting to P695,354,980.67 under the General Fund (GF) and Special Education Fund (SEF) could not be ascertained due to the non-submission of the agency’s annual Physical Inventory Report because the periodic physical inventory was not conducted and complete property records was not maintained as required under Sections 119, 120 and 124 of the Manual on the New Government Accounting System (MNGAS).

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LGU AUDIT


Aringay Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) accounts amounting to P198,403,998.95 under the General Fund (GF) and Special Education Fund (SEF) could not be ascertained due to the non-submission of the agency’s annual Physical Inventory Report because the periodic physical inventory was not conducted and complete property records was not maintained as required under Sections 119, 120 and 124 of the Manual on the New Government Accounting System (MNGAS).

Bacnotan Qualified/ Modified

The gross amount of the agency’s Property, Plant and Equipment (PPE) accounts totaling P594,068,881.80 were of doubtful reliability due to unreconciled balances resulting from a.) failure to conduct a complete physical inventory; b.) incomplete subsidiary ledgers and ledger cards; c.) incomplete property cards and property tags on properties and d.) recognition of at least 50% of Public Infrastructures in the books of account is unreliable.

Bagulin Qualified/ Modified

The existence, reliability and accuracy of the Property, Plant and Equipment balance aggregating P63,125,025.96 were doubtful due to non-maintenance of required accounting and inventory records and incomplete physical inventory taking.

Balaoan Qualified/ Modified

The correctness of the balances of the Cash in Bank – Local Currency – Current Account and Time Deposits accounts in the total amount of P199,689,250.32 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.

Bangar Qualified/ Modified

The correctness, completeness, existence and serviceability of Property, Plant and Equipment (PPE) accounts with net book value of P268,424,653.71 as of December 31, 2017 could not be ascertained due to various deficiencies in the accounting and management of properties of the Municipality contrary to relevant provisions of the Manual on New Government Accounting System and COA Circular No. 92-386 and PPSAS 17.

Bauang Qualified/ Modified

The accuracy of year-end balances of 17 PPE categories was doubtful due to discrepancies amounting to P25,476,982.02 noted between the General Ledger (GL) control accounts and the corresponding Subsidiary Ledger (SL) details; and the existence and validity of dormant current liabilities amounting to P1,689,395.96 cannot be ascertained due to the absence of corresponding supporting documents.

Burgos Unqualified/ Unmodified

Caba Qualified/ Modified

The balances of the Inventory accounts in the total amount of P7,347,003.15 were not reconciled with the stock cards of the Supply Officer and the Report on the Physical Count of Inventories (RPCI) were not also prepared. Likewise, the accuracy, existence and completeness of the Property, Plant and Equipment (PPE) accounts totaling P140,935,011.43 could not be ascertained due to the non-maintenance of

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LGU AUDIT


complete and updated accounting records and non-submission of the Report on Physical Count of PPE on account of its failure to conduct the periodic physical inventory; and

The accuracy, existence and completeness of the Property, Plant and Equipment (PPE) accounts totaling P140,935,011.43 could not be ascertained due to the non-maintenance of complete and updated accounting records and non-submission of the Report on Physical Count of PPE on account of its failure to conduct the periodic physical inventory.

Luna Qualified/ Modified

Unreleased checks totaling to P2,148,166.70 were not reverted to Cash in Bank – Local Currency - Current Account and non-recording of the required adjustments for reconciling items in the bank reconciliation statements resulted in the understatement of the account balance.

Naguilian Unqualified/ Unmodified

Pugo Qualified/ Modified

The existence, validity and accuracy of the Property, Plant and Equipment balances in the aggregate amount of P172,272,847.74 could not be ascertained because property records were not maintained and the Property, Plant and Equipment Ledger Card were not reconciled with the Report on Physical Count of Property, Plant and Equipment and Acknowledgement Receipt for Equipment records; and,

Fair presentation of Real Property and Special Education Taxes Receivables in the aggregate amount of P10,922,027.18 and Other Receivables amounting to P877,452.00 cannot be ascertained because of doubtful collectability thereof.

Rosario Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) accounts amounting to P150,604, 186.96 under the General Fund (GF) and Special Education Fund (SEF) could not be ascertained due to the non-submission of the agency’s annual Physical Inventory Report because the periodic physical inventory was not conducted and complete property records was not maintained as required under Sections 119, 120 and 124 of the Manual on the New Government Accounting System (MNGAS).

San Gabriel Qualified/ Modified

The gross amount of the agency’s Property, Plant and Equipment (PPE) accounts totaling P102,260,585.11 were of doubtful reliability due to unreconciled balances resulting from

a) failure to conduct the required annual physical count;

b) incomplete and not updated property cards;

c) non-maintenance of complete and updated subsidiary ledger; and,

d) failure to recognize at least 50% of Public Infrastructures in the books of account.

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LGU AUDIT



The reported balances of the PPE account amounting to P318,830,008.15 were unreliable due to

a) failure to conduct complete annual physical count,

b) incomplete and not updated property cards;

c) non-maintenance of complete and updated subsidiary ledger;

d) non-maintenance of Acknowledgement Receipts of

Equipment,

e) non-maintenance of property tags;

f) non-utilization of Inventory Custodian Slip; and,

g) failure to recognize 50% of Public Infrastructure in the books of accounts.

Santo Tomas Qualified/ Modified

The balance of the Property, Plant and Equipment (PPE) accounts amounting to P327,036,045.43 under the General Fund (GF) and Special Education Fund (SEF) could not be ascertained due to the non-submission of the agency’s annual Physical Inventory Report because the periodic physical inventory was not conducted and complete property records was not maintained as required under Sections 119, 120 and 124 of the Manual on the New Government Accounting System (MNGAS).

Santol Qualified/ Modified

Because of the doubtful reliability of the reported balance of the Property, Plant and Equipment (PPE) account amounting to P209,302,742.32 due to unreconciled balances resulting from

a) failure to conduct a complete physical inventory,

b) incomplete subsidiary ledger and ledger cards;

c) no property cards and property tags on the PPE;

d) no file of Acknowledgement Receipt of Equipment;

e) Inventory Custodian Slip (ICS) were not used;

f) failure to recognize at least 50% of Public Infrastructure in the books of account; and,

g) the unrecorded completed projects such as Road Networks, Buildings, Water System and Machineries and Equipment funded out of Bottom-Up Budgeting (BUB) and Assistance to Disadvantaged Municipalities (ADM) amounting to P48,563,053.43.

Sudipen Qualified/ Modified

The validity, correctness and existence of Property, Plant and Equipment totaling P40.67 Million could not be ascertained due to unreconciled amount of P21.80 Million between the records of the Accounting Office and the General Services Office, non-maintenance of property cards, inclusion of unserviceable properties in the PPE account and incomplete disclosures for property, plant and equipment in the Notes to Financial Statements.

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LGU AUDIT


Tubao Qualified/ Modified

The existence, validity and accuracy of the Property, Plant and Equipment (PPE) balances in the aggregate amount of P102,869,262.80 cannot be ascertained because physical inventory was not conducted, property cards were not maintained and Acknowledgement Receipt of Equipment (ARE) records were not complete contrary to Sections 124 and 114 of Manual on the New Government Accounting System.

Pangasinan Qualified/ Modified

Due to the non-reconciliation of the Property, Plant and Equipment account (exclusive of Infrastructure Assets, Construction in Progress account and Accumulated Depreciation) amounting to P4,107,647,669.29 with the Inventory Report with a total amount of P1,467,239,847.21 with a difference of P2,640,407,822.08.

Cities:

Alaminos City

Qualified/ Modified

Accuracy, validity and existence of the Property, Plant and Equipment (PPE) account valued at P1,039,818,538.10 were not ascertained due to management’s inability to conduct complete actual physical inventory and non-updated property ledger cards;

Validity, accuracy and existence of various Inventory account balances at year-end totaling P3,933,660.45 cannot be ascertained due to

a) non-submission of the Report on Physical Count of Inventories;

b) non-maintenance of stock cards and supplies ledger cards; and,

c) non-submission of Report of Supplies and Materials Issued.

Receivable Accounts amounting to P1,321,796.31 as of year-end were doubtful of recovery due to non-availability of supporting documents and deemed dormant for ten years and more were not acted upon by the management to facilitate the proper write-off thereof, resulting in the overstatement of agency assets due to the inclusion of accounts with doubtful existence.

Dagupan City Qualified/ Modified

The accuracy and reliability of the Property, Plant and Equipment (PPE) account with a net booked value of P1,062,402,466.93 in the books as of December 31, 2017 could not be ascertained due to the failure of the City to complete the physical count of Property, Plant and Equipment (PPE), inclusion of Land totaling P65,065,000.00 not supported with Transfer Certificate of Titles and non-derecognition of properties where the City is not the beneficial owner.

San Carlos City Qualified/ Modified

The accuracy, validity and existence of the PPE accounts with the carrying amount of P901,487,325.67 could not be ascertained due to:

a) unvalidated PPE accounts of P9,595,263.56 for lack of inventory reports, property and subsidiary records;

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LGU AUDIT


b) unreconciled balances between the inventory report and accounting records amounting to P387,295,158.67; and,

c) no action was taken to dispose the unserviceable properties which were still included under the PPE accounts.

Urdaneta City

Qualified/ Modified

Due to the absence of the Report on Physical Inventory of Property, Plant and Equipment (PPE), hence it was not determined whether the balance of the PPE account amounting to P1,192,409,078.10 as appeared in the accounting records reconciled with the records of the Supply Office and semi-expendable supplies totaling P1,346,568.20 were included in the account;

Various materials and supplies totaling P2,746,372.00 distributed to various barangay still included in the account. In addition, unserviceable properties amounting to P9,376,010.00 were not derecognized in the book.

Various PPE totaling P121,896,740.87 acquired through donations and from the funds derived from various activities of the Urdaneta City University were not recognized from the books, thereby, understating the PPE account.

Municipalities:

Agno Qualified/ Modified

The non-reliability of the Property, Plant and Equipment (PPE) of the Municipality with a net book value of P170,512,492.98 in the books of accounts as of December 31, 2017 is doubtful due to various deficiencies uncovered in audit;

Misclassification of accounts with an aggregate value of P1,380,624.00 and no adjustment was made to correct the erroneous entries;

Payroll accounts totaling P605,427.82 could not be relied upon due to erroneous classification resulting to unreliable balances; and,

Dormant account balances totaling P1,167,505.62 which remained in the books of accounts for more than five years could not be ascertained/substantiated due to absence of records and Trust Liability-DRRM account balance of P5,794,573.28 under the Trust Fund book include the amount of unutilized balance of DRRMF-QRF & MOOE per records, but the actual fund transfer of cash was not made, thus, recorded balance was not properly valued.

Aguilar Qualified/ Modified

Due to failure to conduct physical inventory and the General Services Officer and Accountant did not maintain the prescribed Property Cards and Property, Plant and Equipment Ledger Cards, thus the accuracy, validity and existence of the Property, Plant and Equipment (PPE) account with a net book value of P232,285,434.20 as of year-end could not be ascertained.

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LGU AUDIT


Alcala Qualified/ Modified

The validity, existence and accuracy of the Property, Plant and Equipment (PPE) account with a gross amount of P288,387,723.29 as of December 31, 2017 could not be ascertained due to the failure of the municipal officials concerned to submit the Report on the Physical Count of Plant, Property and Equipment (RCPPE) which was not in consonance with Section 124 of Vol. I - Manual on the New Government Accounting System (MNGAS), thereby creating doubts as to its accuracy, validity, existence and actual condition.

Anda

Qualified/ Modified

Incomplete property records and non-conduct of complete physical count of agency’s book value of P179,964,747.13, failure to record capitalizable assets under PPE amounting to P565,779.80 which were expensed outright, and non-provision of depreciation to fixed assets amounting to P747,110.96;

Non-reconciliation of the Cash in Bank balance of the General ledger against the Cashbook of P8,360,710.36; and,

Non-reconciliation of the reciprocal accounts, Due from Other Funds and Due to Other Funds, which resulted in a net difference of P3,068,145.00.

Asingan Qualified/ Modified

The existence, valuation and accuracy of the year-end balance of Property, Plant and Equipment (PPE) account with a net book value of P171,088,249.40 cannot be substantiated due to inadequacies and deficiencies in the accounting records, thus, accuracy and reliability of the said account as presented in the financial statements is doubtful, hence, affected the reliability of the account in the financial statement.

Balungao Qualified/ Modified

Check Disbursement Vouchers totaling to P1,394,361.87 as noted in the Disbursement Journal were not yet submitted to the Office of the Auditor, thus preventing the conduct of post-audit on those disbursements.

Bani Qualified/ Modified

Non-maintenance of complete inventory records and documents and non-conduct of complete physical count to agency’s fixed assets with a net book value of P95,310,358.96, misclassified PPE account totaling P144,341.55 and unreliable accumulated depreciation amounting P30,893,158.25 due to management’s failure to provide a complete and detailed schedule of depreciation; Trust Liabilities-DRRMF account (2-04-01-020) balance of P5,740,517.53 under the Trust Fund were doubtful due to various deficiencies uncovered in audit.

Basista Qualified/ Modified

Due to failure to conduct physical inventory and the General Services Officer and Accountant did not maintain the prescribed Property Cards and Property, Plant and Equipment Ledger Cards, thus the existence, accuracy and validity of Property, Plant and Equipment with a net book value of P53,624,735.79 as of year-end could not be ascertained and their existence could not be established.

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LGU AUDIT


Bautista Qualified/ Modified

The balance of the Property, Plant and Equipment (PPE) with a gross value of P140,441,993.22 as of December 31, 2017 was not reconciled with property records due to non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and incomplete property cards, PPE ledger cards and real property ledger cards. The same balance of the PPE was overstated in view of the non-depreciation of the School Buildings costing P463,997.15.

Bayambang Qualified/ Modified

The accuracy, existence and validity of the recorded balance of Property, Plant and Equipment (PPE) account of all funds in the amount P437,741,315.40 could not be ascertained due to the absence of complete physical inventory and non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) of the Municipality pursuant to Section1 24 of the Manual on the New Government Accounting System Volume I.

Binalonan Qualified/ Modified

The reliability, existence and condition of the Property, Plant and Equipment (PPE) with a net book value of P351,396,493.51 could not be ascertained due to the inability of the municipality to conduct complete physical count of properties.

Binmaley Qualified/ Modified

Due to incomplete inventory of records and documents and non-conduct of actual physical count of all the agency’s fixed assets with a net book value of P251,666,659.10 thus, the Property, Plant and Equipment account presented in the financial statements could not be relied upon. The inadequacy of records did not permit us to apply adequate alternative audit procedures to ascertain the accuracy, existence and validity of the account. Furthermore, cash advances amounting to P1,146,244.18 and P231,576.31 for the previous and current years remained unliquidated at year end which resulted to unrecorded expenses.

Bolinao Qualified/ Modified

Non-reliability of the Property, Plant and Equipment (PPE) of the Municipality with a carrying value of P222,380,991.70 in the books of accounts as of December 31, 2017 is doubtful due to various deficiencies uncovered in audit and misclassified accounts with an aggregate value of P7,296,850.80 were made by the Municipal Accountant, however, no adjustment was made to correct the erroneous entries, thus affecting the accuracy of reported year-end balances of some PPE accounts;

Reciprocal accounts, Due from Other Funds and Due to Other Funds showed a net credit difference of P293,750.04 after consolidation of all funds of the municipality, thus affecting the fair presentation in the financial statements; and,

Trust Liability-DRRM account balance of P19,483,440.59 under the Trust Fund Book include the amount of unutilized balance of DRRM-QRF and MOOE as per records, but actual fund transfer was not made, thus recorded balance was not properly valued.

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LGU AUDIT


Bugallon Qualified/ Modified

The validity of ownership of some lots could not be ascertained due to lack of proper evidence to establish rights over these properties in the amount of P32,507,120.00 rendering the fairness and certainty of the Investment Property (Land) and Property, Plant and Equipment (PPE) Accounts unreliable.

Burgos Unqualified/ Unmodified

Calasiao Qualified/ Modified

Due to the non-performance of annual physical inventory of all municipal properties, lack of complete and updated Property/Subsidiary Ledger Cards and property records maintained, and lack of monitoring of land account, thus existence, validity and accuracy of the year-end balance of Property, Plant and Equipment (PPE) account with book value of P472,298,682.23 could not be ascertained.

Dasol Qualified/ Modified

Due to non-conduct of complete physical count of all properties and non-maintenance of property records which rendered the balance of the Property, Plant and Equipment (PPE) account amounted to P202,962,109.40 unreliable.

Infanta Qualified/ Modified

Non-ascertainment of the balance of the Property, Plant and Equipment (PPE) account amounted to P179,309,532.87 as to its accuracy, validity and existence for non-submission of complete physical inventory report.

Labrador Qualified/ Modified

Due to non-reconciliation of the Property, Plant and Equipment Account balance of P148,911,498.40 with the Property Records and the validity of ownership of 25 parcels of land could not be ascertained due to lack of proper evidence to establish rights over these properties in the amount of P849,892.29 rendering the fairness and certainty of the Investment Property (Land) and Property, Plant and Equipment (PPE) Accounts unreliable.

Laoac Qualified/ Modified

The validity, existence and accuracy of the Property, Plant and Equipment (PPE) account with a gross amount of P354,671,631.07 as of December 31, 2017 could not be ascertained due to the failure of the municipal officials concerned to submit Report on the Physical Count of Plant, Property and Equipment (RCPPE) which was not in consonance with Section 124 of Vol. I - Manual on the New Government Accounting System (MNGAS), thereby creating doubts as to its accuracy, validity, existence and actual condition.

Lingayen Qualified/ Modified

Due to the validity of ownership of some lots could not be ascertained for lack of proper evidence to establish rights over these properties in the amount of P65,306,170.00 rendering the fairness and certainty of the Investment Property (Land) and Property, Plant and Equipment (PPE) Accounts unreliable.

Mabini Qualified/ Modified

Various deficiencies in the accounting and management of Property, Plant and Equipment (PPE) with a net book value of P117,435,357.79;

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LGU AUDIT


Year-end balance of inventory accounts totaling P3,851,411.85 includes items already consumed but not recognized as expense due to non-undertaking of physical count and non-recording of the same;

Year-end balances of RPT and SET receivables in the total amount of P15,406,904.23 were based on estimates; and,

Due to inadequacy of records, we were not able to apply other alternative audit procedures to ascertain the accuracy, validity and existence of the aforesaid accounts.

Malasiqui Qualified/ Modified

Due to the non-performance of annual physical inventory of Property, Plant and Equipment (PPE) account with book value of P391,935,466.29 as of December 31, 2017, and lack of complete and updated Property/Subsidiary Ledger Cards and absence of property records maintained, thus the existence, valuation and accuracy of the year-end balance of PPE account could not be ascertained; and,

The costs of the Rehabilitation/Concrete Paving of Farm to Market Roads in various Barangays amounting to P17,465,956.50 were not recorded as asset account thereby understating the Road Networks account.

Manaoag Qualified/ Modified


Mangaldan Qualified/ Modified


Mangatarem Qualified/ Modified

Due to failure to conduct physical inventory and the General Services Officer and Accountant did not maintain the prescribed Property Cards and Property, Plant and Equipment (PPE) account with a net book value of P271,007,114.04 as of year-end could not be ascertained.

Mapandan Qualified/ Modified

The Constructions of Drainage System and Concreting of Core Local Roads in the amount of P1,383,853.15 and P5,146,458.10, respectively, were not recorded as Asset account in the books under Trust Fund, thus understating the Water Supply System and Road Networks accounts in the financial statements.

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LGU AUDIT


Natividad Qualified/ Modified


Pozzorubio

Qualified/ Modified

The reliability, accuracy and existence of the Property, Plant and Equipment (PPE)with a net amount of P493,125,226.69 could not be ascertained due to the failure of the municipality to conduct annual physical count of properties; and,

The inadequacy of records did not permit us to apply alternative procedures to ascertain the accuracy, validity and existence of the said assets.

Rosales Qualified/ Modified

Acquired municipal properties and equipment from calendar year 2016 backwards with a total book value of P566,676,324.55 as of year-end are doubtful due to non-conduct of annual physical inventory for calendar year 2017; and,

General Ledger balances of Property, Plant and Equipment (PPE) does not reconcile with the Report on Physical Count of Property, Plant and Equipment (RCPPE) totaling to P24,479,337.63, thereby, affecting the fairness in the presentation of these accounts.

San Fabian Qualified/ Modified

The existence, completeness and accuracy of the balances of Property, Plant and Equipment accounts with a net booked value of P84,172,538.78 as of December 31, 2017, could not be ascertained due to unbooked real properties of Municipality of San Fabian; and,

The booked-up land accounts totaling P20,478,931.96 were not supported with Transfer Certificate of Titles (TCT) or other evidence satisfactory to it that the title is in the Government, thus exposing to third party.

San Jacinto Qualified/ Modified


San Manuel

Qualified/ Modified

The reliability, accuracy and existence of the Property, Plant and Equipment (PPE) with a net amount of P363,983,385.98 could not be ascertained due to failure of the municipality to conduct annual physical count of properties; and,

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LGU AUDIT



San Nicolas Qualified/ Modified


San Quintin Qualified/ Modified

Acquired Municipal properties and equipment from calendar year 2016 backwards with a total book value of P93,452,336.39 as of year-end are doubtful due to non-conduct of annual physical inventory. In addition, the non-recognition of depreciation expense and impairment loss on some Property, Plant and Equipment (PPE) account totaling to P5,012,326.71 and P116,677,324.15 respectively, resulting to understatement of expense and overstatement of assets book value at year end.

Santa Barbara Qualified/ Modified

The balance of the Property, Plant and Equipment (PPE) with book value of P535,744,648.71 as of December 31, 2017 could not be ascertained due to non-performance of complete annual physical inventory count and no complete and updated subsidiary ledger and property cards were maintained, thus affecting the reliability of the account; and,

Not all of the land owned were registered in the name of Municipality but only covered by Tax Declaration.

Santa Maria Unqualified

Santo Tomas Unqualified/ Unmodified

Sison

Qualified/ Modified

The reliability, accuracy and existence of the Property, Plant and Equipment (PPE) with a net amount of P248,459,199.44 could not be ascertained due to failure of the municipality to conduct annual physical count of properties; and,


Sual Qualified/ Modified

Due to the non-adjustment of that portion of receivables from Sual Power Station that was condoned by the government thru issuance of Executive Order No. 173 as well as non-adjustment of receivables based on 40 percent assessment level for period of 2015-2017, thus rendering unreliable and inaccurate the ending balances of Real Property Tax and Special Education Tax Receivables amounting to P1,433,465,089.70;

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LGU AUDIT


The non-ascertainment of the balance of the Property, Plant and Equipment (PPE) account amounted P920,528,462.55 as to its accuracy, validity and existence due to the absence of a Report on the Physical Count of PPE and lack of complete and updated Property/Subsidiary Ledger Cards;

The existence of various long outstanding reconciling items in the Bank Reconciliation Statements that remained unadjusted in the books of accounts in the amount of P4,662,834.97 which affected the accuracy of Current Account amounted to P230,439,661.30, thus, rendering the balance unreliable as reflected in the financial statements;

The non-submission of liquidation reports to different national government agencies for funds transferred to the Municipality in the implementation of various projects which resulted in the overstatement of Due to NGAs account by P54,783,359.70 and understatement of Government Equity account by same amount; and,

The non-submission of accounts for the months of November to December 2017 within the prescribed period, which likewise, precluded the Audit Team to conduct the necessary audit and examination of the accounts on time.

Tayug

Qualified/ Modified

The validity and correctness of the Property, Plant and Equipment (PPE) account having a net value of P91,738,992.51 could not be ascertained due to non-submission of physical inventory report and absence of property ledger cards.


Umingan Qualified/ Modified

Year-end account balances of the Property, Plant and Equipment (PPE) valued at P180,502,205.10, is unreliable and their existence and condition could not be fully ascertained due to the failure of the Municipality to conduct physical inventory; and,

Purchases of medicines, office supplies and other supplies and materials in bulk amounting to P9,468,445.13 were recorded in the books of accounts as outright expenses instead on inventory account, thereby, affecting the fairness in the presentation of these accounts.

Urbiztondo Qualified/ Modified

Due to the non-reconciliation of the Property, Plant and Equipment amounted to P199,443,200.06 with the Inventory Report by P198,401,246.48, thereby casting doubt on the reliability of the account.

Villasis Unqualified/ Unmodified

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LGU AUDIT


Region II - Cagayan Valley

Batanes

Qualified/ Modified

The account Loans Receivable of the agency amounting to P2.7million has been outstanding for more than ten (10) years now and the probability of its collection is doubtful;

There was a balance of unliquidated cash advances amounting to P9.2million that has been long outstanding. These amounts or some parts thereof may have been utilized/expended for the purpose they were granted but not yet recognized as expenditures due to non-submission of the liquidation reports. Audit Suspensions and Disallowances amounting to P1.3million and P5.8million remained unsettled as of year-end; and,

The existence, actual condition and validity of the account Property, Plant and Equipment in the amount of P183.3million could not be ascertained, thus, affecting the financial position of the agency.

Municipalities:

Basco Qualified/ Modified

The grant of year-end bonus and procurement of goods in the amount of P6,092,076.00 and P381,747.80, respectively, were not subjected to withholding tax resulting to overstatement of Payroll Fund and corresponding supplies and expense accounts of the goods;

The grant of Economic Relief Assistance amounting to P3,575,000.00 resulted to overstatement of other maintenance and operating expense account; and,

The non-conduct of actual physical count of properties and failure to prepare and submit a report thereof of property, plant and equipment (PPE) in the amount of P45,681,044.49 resulting to unreliable PPE account.

Itbayat

Qualified/ Modified

The assets were overstated due to unliquidated/unsettled cash advances of P799,601.08. The audit disallowance of P2,543,723.93 remained unsettled as of year-end. Receivables representing long overdue loans receivables amounting to P4,381,865.00 were not collected depriving the constituents of other benefits; and,

The property, plant and equipment account amounting to P10,705,860.19, net of depreciation, were unverified due to non submission of the RPCPPE and non-reconciliation of records between the accounting office and property records resulted to unreliable asset account balances.

Ivana Qualified/ Modified

The validity and accuracy of the balances of Property, Plant and Equipment (PPE) account as of December 31, 2017 in the books of the Municipality is unreliable due to unreconciled amount of P2,555,444.76 between the accounting records and the Report on the Physical Count of Property, Plant and Equipment and Audit Disallowances amounting to P1.2 million remained unsettled thus, affecting the financial position of the agency.

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LGU AUDIT


Mahatao

Qualified/ Modified

The accuracy and reliability of the Cash in Bank – Local Currency Current Account balance of P42,293,826.22 cannot be ascertained as of year-end; and,

The failure to conduct physical count of property, plant and equipment in the amount of P21,032,397.20, thus the assertion of the agency in the property, existence and valuation of their properties could not be relied upon.

Sabtang

Qualified/ Modified

The asset was overstated due to unliquidated/unsettled cash advances in the amount of P383,128.65; and,

The existence, actual condition and validity of the account Property, Plant and Equipment in the amount of P9.7M could not be ascertained, thus, affecting the financial position of the agency.

Uyugan

Qualified/ Modified

The asset was overstated due to unliquidated/unsettled cash advances of P350,950.21.

There is also an unserviceable Property, Plant and Equipment of P2,749,615.52 and failure to conduct physical count of property, plant and equipment in the amount of P5,600,203.51, thus the assertion of the agency in the property, existence and valuation of their properties could not be relied upon.

Cagayan

Qualified/ Modified

Non-settlement of cash advances totalling P45,584,356.78 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 P130,817,859.25 and P45,249,548.37, respectively, rendered the Due from Other LGUs and Due from NGAs accounts unreliable;

Non-collection of past due Accounts Receivable and Other Receivables amounting to P5,605,256.59 and P5,355,851.45, respectively, affected the reliability and validity of said accounts;

Non-collection of long outstanding loans granted to other LGUs and various individuals in the total amount of P1,921,660.61 and P36,428,671.72, respectively, rendered the balance of the Loans Receivable-LGUs and Loans Receivable-Others unreliable; and,

Inclusion in the Property, Plant and Equipment account of unserviceable/obsolete properties totalling P89,618,358.99 rendered the balance of said account not reliable.

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LGU AUDIT


City:

Tuguegarao City

Qualified/ Modified

The construction costs of the Tuguegarao City Public Market was erroneously recorded in the books as Construction in Progress-Buildings and Other Structures at Ᵽ505,857,243.58 instead of Construction in Progress-Investment Property, Buildings in the amount of Ᵽ525,061,604.62 in accord with PPSAS 16; and,

The balances of Cash on Hand and Advances for Payrolls appearing in the general ledgers and the cashbooks do not tally at the end of the year because of failure of both of the City Treasurer’s Office and the City Accountant’s Office to regularly reconcile their balances as required under COA Circular No. 97-002 dated February 10, 1997.

Municipalities:

Abulug Unqualified

Alcala Qualified/ Modified

The variance between the balances per books and per physical inventory report amounting to P5,900,477.28 which is not in consonance with Section 111 (2) of P.D. No. 1445, thereby casting doubt as to the correctness, validity and accuracy of the Property, Plant and Equipment (PPE) account as of December 31, 2017.

Allacapan Qualified/ Modified

Inability of management to complete the conduct of physical count of PPE and to submit the Report thereon rendering the PPE accounts with a net book value of P143,260,897.80 unreliable.

Amulung Qualified/

Modified Inability of management to complete the conduct of physical

count of PPE and to submit the Report thereon rendering the PPE accounts with a net book value of P143,260,897.80 unreliable.

Aparri Unqualified/

Unmodified

Baggao Qualified/ Modified

Management’s inability to maintain adequate accounting and property records and late submission of annual physical count of its properties as required by Sections 119, 120 and 124, Volume I of the Manual on New Government Accounting System (NGAS) for Local Government Units (LGUs), hence, the propriety and reliability of the recorded Property, Plant and Equipment account with a net recoverable value of P352,947,776.48 could not be ascertained.

Ballesteros Qualified/

Modified The validity, existence and correctness of the Property, Plant

and Equipment accounts with net carrying value amounting to P90,555,440.54 as at December 31, 2017 could not be ascertained due to failure of the agency to conduct annual physical inventory of properties as of year-end.

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LGU AUDIT


Buguey Qualified/ Modified

The reliability and correct valuation of the Property, Plant and Equipment account amounting to P123,568,855.39 cannot be verified due to the non-maintenance of property/ledger cards which is contrary to Sections 114 of the Manual on New Government Accounting System (MNGAS) Volume 1.

Calayan Qualified/


and Equipment accounts with net book value amounting to P162,020,076.61 as of December 31, 2017 could not be ascertained due to failure of the agency to conduct annual physical inventory of properties as of year-end which is contrary to Section 156 of COA Circular No. 92-386.

Camalaniugan Qualified/

Modified Non- reconciliation on the balance of the Property, Plant and

Equipment (PPE) account of P26,876,557.74 and Investment Property account of P4,783,526.82 appearing on the Financial Statements as of December 31, 2017 due to the absence of PPE and Real Property Ledger Cards and late submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) contrary to Sections 120 and 124 of the New Government Accounting System (NGAS) Manual, thus, casting doubt on the accuracy, validity and reliability of the accounting records and related reports, thus affecting the fair presentation of the accounts in the financial statements.

Claveria Unqualified/

Unmodified

Enrile

Qualified/ Modified

The non-submission of the Report on the Physical Count of Property, Plant and Equipment and the non-preparation of subsidiary ledgers rendered the Property, Plant and Equipment accounts with a net book value of P155,297,928.45 doubtful;

The balance of the accounts Due from Other Funds and Due to Other Funds is not reliable due to an unreconciled balance of P110,214.22; and,

The failure to request from the COA for authority to write-off the Other Receivables in the amount of P673,282.40 which remained outstanding/dormant for eight to thirty five years, thereby affecting the fairness of the presentation of the affected accounts in the financial statements.

Gattaran

Qualified/ Modified

Non-preparation of bank reconciliation statements for CY 2017 rendering the Cash in Bank – Local Current, Current account balance of P134,393,054.14 unreliable; and,

Property, Plant and Equipment of P178,959,737.05 is doubtful due to non-conduct of physical count and the non-preparation and non-submission of the corresponding Report on the Physical Count of PPE.

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LGU AUDIT


Gonzaga Qualified/ Modified

The validity, existence and correctness of the Property, Plant and Equipment accounts with net book value amounting to P251,957,512.81 as of December 31, 2017 could not be ascertained due to failure of the agency to conduct annual physical inventory of properties as of year-end which is contrary to Section 156 of COA Circular No. 92-386.

Iguig

Qualified/ Modified

The effect of the non-preparation of bank reconciliation statements for CY 2017 rendering the Cash in Bank account balance under all funds of P17,216,912.94 unreliable; and,

Property, Plant and Equipment of P138,065,697.83 is doubtful due to non-preparation and non-submission of the Report on the Physical Count of PPE.

Lal-lo Unqualified/ Unmodified

Lasam Qualified/ Modified

The validity, existence and correctness of the Property, Plant and Equipment accounts with net carrying value amounting to P125,871,748.66 as at December 31, 2017 could not be ascertained due to failure of the agency to conduct annual physical inventory of properties as of year-end.

Pamplona Qualified/ Modified

The validity, existence and correctness of the Property, Plant and Equipment accounts with net carrying value amounting to P66,208,756.03 as at December 31, 2017 could not be ascertained due to failure of the agency to conduct annual physical inventory of properties as of year-end which is contrary to Section 156 of COA Circular No. 92-386.

Peñablanca

Qualified/ Modified

The effect on the non-preparation of bank reconciliation statements for CY 2017 rendering the Cash in Bank account balance under all funds of P 82,660,946.43 unreliable; and,

Property, Plant and Equipment of P254,077,113.35 is doubtful due to non-preparation and non-submission of the Report on the Physical Count of PPE.

Piat

Qualified/ Modified

Inadequate accounting and property records and non-conduct of physical count to support the balance of the recorded Property, Plant and Equipment (PPE) account totalling P68,432,732.58 and,

Cost of supplies and materials in the total amount of P3,665,457.20 procured during 2017 were treated as outright expense instead of using the “Inventory” account rendering the asset and expense account misstated.

Rizal

Qualified/ Modified

Inadequate accounting and property records and non-conduct of physical count to support the balance of the recorded Property, Plant and Equipment (PPE) account totalling P58,134,717.99;

Accumulated cash advances in the total amount of P5,007,132.19 remained unsettled as of December 31, 2017 resulting in the non-recording of expenses in the year they were incurred and consequently, in the understatement of the expense account and overstatement of the asset and equity accounts.

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LGU AUDIT


Non-separation of books under Special Education Fund and General Fund;

Cost of supplies and materials in the total amount of P2,658,870.31 procured during 2017 were treated as outright expense instead of using the “Inventory” account rendering the asset and expense account misstated; and,

There were no documents or records that will support the details of the transaction/s and the rightful names of government agencies pertaining to the “Due from Government Owned and/or Controlled Corporations (GOCCs)” and “Due from Local Government Units (LGUs)” totalling to P2,162,643.29 and P1,916,881.80, respectively, thus, the rightfulness of the Management’s claim cannot be established.

Sanchez-Mira Unqualified/ Unmodified

Santa Ana Qualified/ Modified

The validity, existence and correctness of the Property, Plant and Equipment accounts with net carrying value amounting to P162,397,822.09 as at December 31, 2017 could not be ascertained due to failure of the agency to conduct annual physical inventory of properties as of year-end which is contrary to Section 156 of COA Circular No. 92-386.

Santa Praxedes Unqualified/ Unmodified

Santa Teresita Unqualified/ Unmodified

Santo Niño

Qualified/ Modified

Inadequate accounting and property records and non-conduct of physical count to support the balance of the recorded Property, Plant and Equipment (PPE) account totalling P120,882,154.33;

Unreconciled difference of the consolidated balances of “Due from Other Funds” and “Due to Other Funds” under the Intra-agency Receivable and Payable accounts amounting to P27,433,639.88; and,

Unreconciled difference between the Cash in Bank accounts in the General Ledger and in the balances confirmed by depository banks which accumulated to P17,332,363.87 due to the continued non-preparation of monthly Bank Reconciliation Statements (BRSs)to validate the reliability and accuracy of the Cash in Bank – Local Currency Account with a total balance of P72,116,413.56

Solana Unqualified/ Unmodified

Tuao

Qualified/ Modified

Inadequate accounting and property records and non-conduct of physical count to support the balance of the recorded Property, Plant and Equipment (PPE) account totalling P201,644,131.76; and, .

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LGU AUDIT


Unreconciled difference between the Cash in Bank accounts in the General Ledger and in the balances confirmed by depository banks which accumulated to P20,143,083.43 due to the continued non-preparation of monthly Bank Reconciliation Statements (BRSs)to validate the reliability and accuracy of the Cash in Bank – Local Currency Account with a total balance of P129,257,884.82.

Isabela

Qualified/ Modified

The balances of the accounts Advances to Special Disbursing Officer and Advances for Officers and Employees amounting to P208,583,019.71, and P22,266,978.09, respectively, as of December 31, 2017 cannot be ascertained due to:

a) Advances to Officers and Employees granted in 2017 amounting to P123,618,861.84 were not in accordance COA Circular No. 97-002 dated February 10, 1997, hence resulted to the accumulation of unliquidated cash advances; and,

b) Prior year’s Advances to Officers and Employees amounting to P14,736,218.06 and Advances to Special Disbursing Officers amounting to P71,111,132.76, of December 31, 2017 remains outstanding between one (1) year to more than three (3) years, contrary to COA Circular No 97-002 dated February 10, 1997 and COA Circular No. 2016-005 dated December 19, 2016.

The balances of the accounts Due from National Government Agencies, Due from Government Owned and Controlled Corporations, and Due from Local Government Units, amounting to P6,479,894.50, P4,890,234.61, and P145,960,930.44, respectively, as of December 31, 2017 cannot be ascertained due to funds transferred to different Local Government Units in Isabela totalling P87, 202,019.94 as of December 31, 2017 remained unliquidated/dormant for a period of one (1) to three (3) years, which is not in accordance with COA Circular No. 94-013 dated December 13, 1994 and COA Circular No. 2016-005 dated December 19, 2016;

The non-preparation of Summary of Supplies and Materials Issued (SSMI), Stock Card (SC) and Report on the Physical Count of Inventories (RPCI) resulted to non-recognition of related expense of the Agricultural and Marine Supplies Inventory account amounting to P998,871.00 as of December 31, 2017 which are not in accordance with the guidelines set in Sections 43, 44 and 56 of Manual on New Government Accounting System (MNGAS) Volume 2 and paragraph 44 of the Philippine Public Sector Accounting Standards (PPSAS) 12;

The balances of Other Machinery and Equipment and Other Property, Plant and Equipment accounts under the Philippine Rural Development Project (PRDP) as of December 31, 2017 amounting to P1,280,000.00 and P1,730,000.00, respectively, did not correspond with the Inventory Report of Equipment totalling P11,107,000.00 thus a discrepancy in the

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LGU AUDIT


amount of P8,097,000.00 due to the inability of management to conduct timely reconciliation of its property and accounting records thereby resulted in an understatement of the value of Property, Plant and Equipment as presented in the financial statements; and,

Review on the balance of Local Disaster Risk Reduction and Management Fund (LDRRMF) totalling P270,136,618.91 as of December 31, 2017 showed the following errors/discrepancies, which is not in keeping with the provisions of DBM & DILG Joint Memo Circular (JMC) No.2013-1 dated March 25, 2013, to wit:

a) Unexpended balance of the current year totalling P178,702,548.94 as of December 31, 2017 was not transferred in the special trust fund account for DRRM, hence understating the trust liabilities account; and,

b) Expenses totalling P6,586,837.23 were charged to Quick Response Fund (QRF) of FY 2017 even if it lacks the required resolution of the local Sanggunian declaring the LGU under the state of calamity or a Presidential declaration of state of calamity upon the recommendation of the NDRRMC.

Cities:

Cauayan City

Qualified/ Modified

Property, Plant and Equipment (PPE) balance of P609,498,495.76 is unreliable due to the following deficiencies:

a) depreciation was not applied consistently as provided under COA Circular 2003-007 while other PPE items were not depreciated at all since their acquisitions;

b) actual inventory of PPE was not yet completed for proper verification of its existence and reconciliation between records; and,

c) residual value were not adjusted to 5% as required in PPSAS No. 17.

Ilagan City

Qualified/ Modified

Inadequate evidence to support the adjustments made to decrease the Property, Plant and Equipment account totaling P136,542,071.99. Also, the lack of sufficient records and documents prevented the independent verification and substantiation of the recorded Accumulated Depreciation of all properties. Due to the above conditions, we were not able to satisfy ourselves as to the carrying value of PPE of P1,375,962,615.85 as at December 31, 2017; and,

Non-recognition of completed and on-going projects funded by national government agencies totaling P3,410,239.91 thus the related asset, income and government equity accounts were understated at year-end.

Santiago City Qualified/ Modified

The validity, propriety and existence of Property, Plant and Equipment (PPE) stated at P3.621 billion, or 87% of total assets, as at December 31, 2017 could not be ascertained due to incomplete inventory taking, unreconciled discrepancy

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LGU AUDIT


of P2.7 billion between accounting and property records, inclusion of unserviceable properties totalling P161.982 million, inadequacies of subsidiary records and accounting deficiencies, which are not in conformity with existing laws, rules and regulations prescribed under Paragraph 2, Section 124, Volume I of Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs); Sec. 13, Volume II, of the MNGAS for LGUs; and Sections 58 and 79 of PD 1445.

Municipalities:

Alicia Unqualified/ Unmodified

Angadanan

Qualified/ Modified

Existence and accuracy of Property, Plant and Equipment (PPE) with a book value of P344,472,188.25 as of December 31, 2017 cannot be established due to noted variances and inconsistencies in the books and in the Report of Physical Count of PPE, thereby affecting the fair presentation of the account in the financial statements;

Proper disclosure, accuracy and reliability of the Cash in Bank account balances as of December 31, 2017 amounting to P101,058,885.72 may be affected by inconsistent preparation of Reports of Checks Issued (RCI) and cashbooks, variances noted between the accounting records and treasurer's cashbooks, and Check Disbursement Process was not undertaken properly inconsistent with Item b(3) of Section 83, Book III of Local Treasury Operations Manual, Sections 43 and 44 (i,j,k), Chapter 3, Volume I of New Government Accounting System (NGAS) Manual for Local Government Units (LGUs), hence casting doubts on the fair presentation of the account in the financial statement;

The validity and correctness of the Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P4,615,353.44 and P4,615,353.44, respectively, as of December 31, 2017 cannot be established reliably due to: 1) incorrect bases in setting up the beginning balances of the receivables; 2) non-preparation of a duly certified list showing the name of taxpayers and the amount due and collectible for the year; and 3) non-preparation of the Real Property Tax Account Register/Taxpayer’s Index Card (RPTAR/TIC) inconsistent with Sections 20, Volume I of the Manual on the New Government Accounting System (MNGAS) for LGUs, Sections 1(C1) and 6(A1) of the Manual on Real Property Appraisal and Assessment Operations, and Section 248 of Republic Act No. 7160;

Deficiencies were observed in the utilization and fund tracking of the LDRRM Fund amounting to P12,895,371.06 inconsistent with Section 4 of IRR of RA 10121, COA Circular Nos. 2012-002 dated September 12, 2012 and 2014-002 dated April 15, 2014 hence propriety and validity of the charges against the funds cannot be rendered; and,

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LGU AUDIT


Inter-agency receivables and other receivables amounting to P 308,004.87 and P 2,602,005.06 as of December 31, 2017, respectively, remained outstanding; accordingly, collectability and existence of which may be rendered doubtful and may affect the fair presentation of the accounts.

Aurora Unqualified/ Unmodified

Benito Soliven

Qualified/ Modified

Unaccounted variance of P783,144.80 in the Cash in Bank account of the Municipality and reconciling items which were not immediately adjusted in the books;

The accuracy and existence of the account Welfare Goods for Distribution totaling P203,400.00 cannot be relied upon since the goods pertaining to the account were already distributed; and,

Unaccounted variance of P2,078,518.29 in the PPE accounts occurred between the ledger and the reported balance as at year end and non-reconciliation of accounts due to incomplete inventory taking of properties.

Burgos

Qualified/ Modified

The Municipality’s basis of reported balance of RPT and SET Receivables totallingP36,582,527.30 was inaccurate; and,

Reciprocal accounts – Due from LGU and Due to LGU as appearing in the books of the Provincial Government of Isabela and the Municipality, respectively, were not fully reconciled with a discrepancy of P422,696.85.

Cabagan

Qualified/ Modified

Other Receivables amounting to P247,768.00 remained long outstanding in the books of LGU Cabagan, Isabela as of December 31, 2017;

The reciprocal accounts Due from Other Funds and Due to Other Funds were not reconciled by P62,034.00 as of December 31, 2017; and,

The account Due to LGU amounting to P49,357,213.00 as of December 31, 2017 was not supported with a subsidiary ledger or a listing of the creditor LGUs.

Cabatuan Qualified/ Modified

Seventeen completed infrastructure projects costing P 34,999,042.49 funded out of Local Government Support Fund were not recognized in the books of the LGU understating Property, Plant and Equipment and Government Equity accounts.

Cordon Qualified/ Modified

The validity, propriety and existence of Property, Plant and Equipment (PPE) stated at P128.139M could not be ascertained due to incomplete inventory taking, unreconciled discrepancy of P18.781M between accounting and property records, inadequacies of subsidiary records and accounting deficiencies, which are not in conformity with existing rules and regulations.

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LGU AUDIT


Delfin Albano

Qualified/ Modified

Unreconciled balances of reciprocal accounts, Due from Local Government Units and Due to Local Government Units for all funds from the Book of Accounts of LGU-Delfin Albano against Provincial Government of Isabela (PGI) resulting to discrepancies of P2,505,310.85 and P 165,146.25, respectively; and,

Unreliable balances of Supplies Inventory and its corresponding expenses accounts due to direct recording of purchased supplies and materials as outright expense instead of recording the same to its proper Inventory account amounting to P3,302,119.53.

Dinapigue

Qualified/ Modified

The different classes of Property, Plant and Equipment (PPE) with total carrying amount of P162,430,805.07 in the financial statements was not adequately supported by subsidiary ledgers for each class of PPE thus affected the accuracy and reliability of the recorded balances as at December 31, 2017. Also, the results of physical inventory on some classes of PPE were not adjusted in the books hence generating an unreconciled difference of P22,460,366.94 between the accounting and property records and the inclusion of unserviceable properties not yet disposed totalling P1,286,608.00. Furthermore, depreciation was not provided for PPEs worth P17,415,466.37 under the Trust Fund books; and,

Accuracy and reliability of the recorded balances of receivables and liabilities in the financial statements totalling P5,940,220.94 and P49,847,189.36, respectively, could not be ascertained due to the absence of subsidiary ledgers and/or schedules, thus affecting the fair presentation of the Financial Statements for CY 2017.

Divilacan

Qualified/ Modified

The unreconciled balances of reciprocal accounts, Due from Local Government Units and Due to Local Government Units for all funds from the Book of Accounts of LGU-Divilacan against Provincial Government of Isabela (PGI) resulting to discrepancies of P984,055.91 and P754,100.00, respectively; and

Unreliable balances of Property, Plant and Equipment as completed infrastructure projects costing P 17,304,787.00 being used and controlled by the Barangays were still recorded and maintained in the books of accounts of the LGU-Divilacan.

Echague

Qualified/ Modified

Existence and accuracy of Property, Plant and Equipment (PPE) with a book value of P493,286,220.25 as of December 31, 2017 cannot be established due to noted variances and inconsistencies in the books and in the Report of Physical Count of PPE, thereby affecting the fair presentation of the account in the financial statements;

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LGU AUDIT


Proper disclosure, accuracy and reliability of the Cash in Bank (CIB) accounts and balances of the Agency totalling to P133,848,783.58 may be affected by 1) discrepancies in the reporting two (2) bank accounts amounting to P24,140,397.41 and P24,168,654.28; 3) unsupported adjustments of P2,301,000.00 credited to CIB account and 4) inconsistent preparation and/or submission of Report of Checks Issued and Journals which are not in consonance with Section 111 of PD 1445, Item b (3) of Section 83, Book III of Local Treasury Operations Manual and Section 2, Chapter 1, Volume II of Manual on the New Government Accounting System for LGUS;

The validity and correctness of the Real Property Tax (RPT)

and Special Education Tax (SET) Receivables amounting to 41,006,863.09 and P33,783,476.70, respectively as of December 31, 2017 cannot be established reliably due to: 1) incorrect bases in setting up the beginning balances of the receivables; 2) non-preparation of a duly certified list showing the name of taxpayers and the amount due and collectible for the year; and 3) non-updating of the Real Property Tax Account Register/Taxpayer’s Index Card (RPTAR/TIC inconsistent with Sections 20, Volume I of the Manual on the New Government Accounting System (MNGAS) for LGUs, Section 6.A(1) of the Manual on Real Property Appraisal and Assessment Operations, and Section 248 of Republic Act No. 7160. Furthermore, inefficiency in the tax collection system and non-availment of other remedies under RA 7160 may affect the collectability of these outstanding tax receivables and may result to misstatements in the cash and income accounts of the Agency;

Income totalling to P17,891,327.75 was improperly recognized in the books when its sources were not legally included in its 2017 Revised Local Revenue Code nor earned from any of its existing Local Economic Enterprises (LEEs), consequently causing misstatements in the financial statements and affecting its fair presentation; and,

Inter-agency receivables and other receivables amounting to

P748,102.84 and P2,663,089.07 as of December 31, 2017, respectively, remained outstanding for a period ranging between two and twenty-four years; accordingly, collectability and existence of which may be rendered doubtful and may affect the fair presentation of the accounts.

Gamu

Qualified/ Modified

No clear cut reconciliation was undertaken despite having confirmation letters on the reciprocal accounts- Due from LGU and Due to LGU as appearing in the books of the Municipality of Gamu, Isabela and the Provincial Government of Isabela, respectively hence, disclosed a discrepancy amounting to P450,630.00; and

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LGU AUDIT


The recognition of Road Networks amounting to P15,098,081.95, net of accumulated depreciation in the books was not supported with disclosures, Registry of Public Infrastructures, Report on the Physical Count of Local Road Network (RPCLRN), Local Road Network Ledger Card, Local Road Inventory records with Road Map and Local Road Network Property Cards hence, contributed to the total unreconciled balance amounting to P16,808,303.95 of Property, Plant and Equipment as against the inventoried properties. Likewise, other PPE accounts inventoried were noted to have differences against the recorded PPE amounts.

Jones

Qualified/ Modified

Inconsistency in the accounting policy used for the measurement of Property, Plant and Equipment (PPE);

Unreconciled balance of reciprocal account Due to /Due from Other Funds by P2,293,085.37;

Accuracy of the reported balance of Biological Assets amounting to P450,000.00 cannot be ascertained due to its non-movement during the year and even in previous years; and,

Prior year expenses for electricity totalling to P707,379.28 was reported in 2017.

Luna Unqualified/ Unmodified

Maconacon

Qualified/ Modified

The account Cash in Bank-Local Currency, Savings was maintained and used by the LGU for its deposits/receipt and withdrawals/disbursements, thus, the balance of P62,899,637.02 as of December 31, 2017 was rendered doubtful;

The reciprocal accounts Due from Other Funds and Due to Other Funds were not reconciled by P3,833,812.21 as of December 31, 2017;

The account Other Payables included rice and agricultural supplies amounting to P1,064,768.12 purchased on cash basis and stocked for sale to constituents during rainy days;

Other Receivables amounting to P550,343.21 remained long outstanding as of December 31, 2017; and,

The balance of Due to NGAs-Trust Fund in the amount of P14,660,073.61 did not tally with the balance per schedule by P103,128.88.

Mallig

Qualified/ Modified

Non-preparation of Bank Reconciliation Statement which renders the Cash in Bank account valued at P 16,640,302.11 doubtful and the non-conduct of physical inventory of property and equipment with a net book value of P 199,342,541.78 which forms a material part of the financial statements as at December 31, 2017 making the accounts unreliable.

Naguilian Unqualified/ Unmodified

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Palanan

Qualified/ Modified

Inadequate evidence to support the adjustments made to decrease the Property, Plant and Equipment (PPE) account totalling P8,919,066.54. Also, the lack of sufficient records and documents prevented the independent verification and substantiation of the recorded Accumulated Depreciation of all properties amounting to P35,795,543.72;

Due to the above conditions, we were not able to satisfy ourselves as to the carrying value of PPE of P116,688,622.75 as at December 31, 2017; and,

Unreconciled difference of P2,237,944.79 in the Cash Local Treasury account per Cash Book balance vis-à-vis General Ledger balance due to the continued failure to reconcile both records, thus the accuracy and reliability of the Cash Local Treasury account with a total balance of P3,717,238.21 cannot be accurately established.

Quezon Qualified/

Modified Non-reconciliation of records of the Municipal Treasurer and

Municipal Accountant has rendered the balance of account Cash – Local Treasury amounting to P 1,464,437.68 as at December 31, 2017 doubtful.

Quirino Unqualified/ Unmodified

Ramon Qualified/ Modified

The Property, Plant and Equipment stated at P219,682,410.97 could not be ascertained due to incomplete inventory taking, unreconciled discrepancy of P163,150,059.79 between accounting and property records, inclusion of unserviceable properties totaling P7,963,876.94 million, inadequacies of subsidiary records and accounting deficiencies, which are not in conformity with existing rules and regulations.

Reina Mercedes Qualified/ Modified

Property, Plant and Equipment (PPE) balance of P77,470,101.04 was doubtful due to the deficiencies that would affect the overall presentation of the financial statements.

Roxas Unqualified/ Unmodified

San Agustin

Adverse

Property, Plant and Equipment (PPE) balance of P77,470,101.04 was doubtful due to the deficiencies that would affect the overall presentation of the financial statements;

Property, Plant and Equipment (PPE) balance of P77,470,101.04 was doubtful due to the deficiencies that would affect the overall presentation of the financial statements;

Unreconciled balances of Cash in Bank-LCCA and Cash in Treasury presented in Financial Statement as against General Ledger (GL);

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Unreconciled balance of Advances to Officers and Employees presented in FS/GL with the total balances of Subsidiary Ledger;

Material net difference between reciprocal accounts;

Unreconciled balances between the cost of PPE appearing in the FS and the cost shown in the Inventory of Physical Assets;

accuracy of the reported balance of Biological assets of P565,996.00 was unreliable due to its non-movement during the year and even in previous years;

Unutilized LDRRMF for CY 2016 and 2017 not transferred to Trust Liability;

Discrepancy in the amount presented in the FS and SL of various payable Accounts;

Unrecorded Notice of Disallowance that becomes final and executory; and,

Unrecorded settlement of disallowance

San Guillermo

Qualified/ Modified

Accuracy and reliability of the Cash in Bank year-end balances amounting to P99,011,783.96 may be affected by incomplete and/or unupdated Cash books and Reports of Checks Issued (RCI) and unsatisfactory reconciliation between the records of the accounting and treasurer's office inconsistent with Item b(3) of Section 83, Book III of Local Treasury Operations Manual, Sections 43 and 44 (i,j,k), Chapter 3, Volume I and Section 27, Chapter 1, Volume II of New Government Accounting System (NGAS) Manual for Local Government Units (LGUs), hence fair presentation of the account in the financial statement may not be achieved;

The validity and correctness of the Real Property Tax (RPT)

and Special Education Tax (SET) Receivables amounting to P439,266.59 and P614,959.67 as of December 31, 2017 cannot be established reliably due to 1) incorrect estimates used as bases in setting up the beginning balances of the receivables 2) non-preparation of a duly certified list showing the name of taxpayers and the amount due and collectible for the year and Real Property Tax Account Register/Taxpayer’s Index Card (RPTAR/TIC) and 3) noted lapses in the system and operations of the Office of Municipal Assessor inconsistent with Sections 20, Volume I of the Manual on the New Government Accounting System (MNGAS) for LGUs, Sections 1(C1) and 6(A1) of the Manual on Real Property Appraisal and Assessment Operations, Sections 233, 235 and 248 of Republic Act No. 7160 and Section 182 of the Local Treasury Operations Manual;

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Section of Implementing Rules and Regulations of RA 10121 and Sections 5.1.5 and 5.1.16 of COA Circular No. 2012-002 dated September 12, 2012 were not complied with, which affected the timely review and conduct of post-audit of the utilization of the LDRRM Funds and caused the non-presentation of the Funds amounting to P 6,479,157.85 as of December 31, 2017 in the Notes to Financial Statements.

San Isidro Qualified/ Modified

General Ledgers and Subsidiary Ledgers were not prepared for all accounts;

The continued inability of management to submit annual physical inventory report rendering Property, Plant and Equipment totalling P218,358,138.31 doubtful;

Biological assets account was still reported amounting to P470,452.00 despite the fact that it was already issued to beneficiaries;

Unreconciled balance of reciprocal account Due to /Due from Other Funds by P10,053,412.02; and,

Unutilized balance of LDRRMF amounting to P1,831,879.83 was not transferred to Trust Liability – DRRM account.

San Manuel Qualified/ Modified

The account balances of the reciprocal accounts-Due from LGU and Due to LGU as appearing in the books of the Provincial Government of Isabela and the Municipality of San Manuel, Isabela, respectively, disclosed a discrepancy amounting to P68,003,524.60.; and,

Various unbooked reconciling items in the Bank Reconciliation Statements amounting to P3,506,016.80 rendered the September 30, 2017 cash in bank account balances uncertain

San Mariano Qualified/ Modified

The existence and accuracy on the reported Property, Plant and Equipment with a carrying amount of P403,472,364.66 cannot be ascertained due to non-reconciliation of PPE accounts, incomplete inventory taking and unaccounted variance in the depreciation of PPE in the total amount of P5,681,611.47.

San Mateo Unqualified/ Unmodified

San Pablo

Qualified/ Modified

Other Receivables amounting to P2,350,548.76 as of December 31, 2017 were not supported with complete details and have been long outstanding in the books of LGU San Pablo, Isabela;

The balance of Due to NGAs as of December 31, 2017 did not tally with the balance per schedule by P2,334,218.42; and,

The account Other MOOE amounting to P11,012,285.72 or 20.32% of the total MOOE for the year ended December 31, 2017 was not supported with a subsidiary ledger or a listing of the component transactions.

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Santa Maria

Qualified/ Modified

Other Receivables amounting to P378,136.79 remained long outstanding as of December 31, 2017;

Purchased rescue and safety materials amounting to P384,328.00 were classified as expenses instead of as inventories;

Purchased air conditioning unit and generator set amounting to P859,000.00 were classified as expenses instead of as property, plant and equipment (PPE); and,

Other MOOE amounting to P4,604,992.15 as of December 31, 2017 was not supported with a subsidiary ledger or a listing of the component transactions.

Santo Tomas No Opinion No Financial Statements submitted hence, the Auditor

prepared a Management Letter

Tumauini

Qualified/ Modified

The account balances of the reciprocal accounts-Due from LGU and Due to LGU as appearing in the books of the Provincial Government of Isabela and the Municipality of Tumauini, Isabela, respectively, disclosed a discrepancy amounting to P8,887,000.26; and

Unreliable balances of Supplies Inventory and its corresponding expenses accounts due to direct recording of purchased supplies and materials as outright expense instead of recording the same to its proper Inventory account amounting to P5,340,446.00.

Nueva Vizcaya

Qualified/ Modified

The Drugs and Medicines accounts has a discrepancy of P10.8 million from the Drugs and Medicines Inventory reports of the five (5) Hospitals and Provincial Integrated Health Office, hence doubtful and unreliable;

The balance of inventory account totalling P24.8 million is unreliable and unrealistic because procurement of supplies and inventories were recorded as expenses even if these were not yet issued for consumption to end-users. The amount reported of P24.8 million was also non-moving since CY 2015;

The balance of inventory account totalling P24.8 million is unreliable and unrealistic because procurement of supplies and inventories were recorded as expenses even if these were not yet issued for consumption to end-users. The amount reported of P24.8 million was also non-moving since CY 2015;

Funds transferred to other LGUs for the provincial counterpart to different projects, programs and activities amounting to P30.8 million were incorrectly taken up in the books of accounts as outright expenses under the subsidy to LGUs and Donations accounts instead of Due from LGUs account. Hence, expense was overstated while asset was understated;

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Fund transferred to the Dep-Ed amounting to P2 million for implementation of Indigenous Peoples’ Workshop was recorded directly as expenses “Donations” account instead of Due from National Agency (NGA). Hence, expense was overstated while asset was understated;

Dormant Advances to/Due from Officers and Employees accounts totalling P19.7 million remained in the books of accounts without details, hence actual claims was doubtful for not being substantiated;

The cost of two (2) units Ten-Wheeler Dump Trucks under the Local Disaster Risk Reduction Management Fund totalling P5.3 million was not recorded in the general fund books, hence asset and equity accounts were both understated;

Checks issued were not chronologically reported in the Report of Checks Issued, hence several checks were not report during the year and not taken up in the books of accounts.

Municipalities:

Alfonso Castaneda

Qualified/ Modified

Property Plant and Equipment (PPE) do not reconcile with the report on physical count for a total of P10,432,755.01 as at December 31, 2017 in violation of Section 491 of the Government Accounting and Auditing Manual (GAAM) Vol. I and Section 43 and Section 66 of the Manual on the New Government Accounting System (NGAS), Vol. I and II respectively.

No reconciliation was made between the Accounting Office and the General Services Office on the account Other Supplies and Materials Inventory in the amount of P2,229,054.55 as at December 31, 2017, hence the validity cannot be ascertained, contrary to the Manual on the New Government Accounting System, Volume I and DBM Circular Letter No. 2016-7 dated July 20, 2016; and,

The accuracy of the Work/Zoo Animals and Breeding Stocks accounts amounting to P222,000.00 as at December 31, 2017 is doubtful due to insufficiency of records to support its presentation in the financial statements contrary to Section 2 of P.D. No. 1445.

Ambaguio Qualified/ Modified

The balance of the Property, Plant and Equipment account amounting to P71,315,226.68 could not be relied upon due to unreconciled difference of P22,188,794.32 between the accounting and property records.

Aritao

Qualified/ Modified

Six (6) out of eight (8) lots recorded in the financial statements (FS) amounting to P1,908,938.76 were not supported with title in the treasury, five (5) lots were unrecorded and the lot where the Sanitary Landfill (SLF) was situated was not disclosed in the books of accounts, hence, the balance account of land in the FS is understated;

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Unpaid electric consumptions totalling P110,589.64 was not recorded as expenses for the year and as liability of the LGU to the Nueva Vizcaya Electric Cooperative (NUVELCO), thus, understating the expense and the liability accounts for CY 2017; and,

Collections, disbursements and cash-in-bank amounting to P513,550.00, P319,927.00 and P193,623.00 for the Centennial Celebration was not recorded in the Trust Fund books, thus, recorded revenue, expenses and cash-in-bank were understated.

Bagabag

Qualified/ Modified

The existence, condition and propriety of the Property, Plant and Equipment and Inventories amounting to P146,944,348.69 and P2,802,073.02, respectively, as at December 31, 2017 could not be verified and ascertained because physical count was neither conducted nor ledger cards/supporting schedules been prepared for reference, contrary to Section 124 of the Manual on the New Government Accounting System, Volume I; and,

The Accounting Office did not set-up allowance for depreciation for some of the depreciable properties of the Municipality amounting to P17,320,705.74 contrary to Paragraph 59 of Philippine Public Sector Accounting Standards (PPSAS) No. 17. Thus, the Property, Plant, and Equipment (PPE), equity and income accounts in the Financial Statements as at December 31, 2017 were overstated.

Bambang Qualified/ Modified

The consistent inability of the Municipality to finish the conduct of annual physical inventory rendered unreliable and inaccurate the Property, Plant and Equipment (PPE) account of the Municipality totaling P152,002,014.20 contrary to Section 124, Volume I of the NGAS for LGUs and Chapter 4 of the Handbook on Property & Supply Management System.

Bayombong Qualified/ Modified

The balance of the Property, Plant and Equipment account amounting to P64,172,762.96 could not be relied upon due to unreconciled difference of P41,396,526.10 between the accounting and property records; and,

The reciprocal accounts “Due from Other Funds” and “Due to Other Funds” with balances amounting to P7,782,308.31 and P4,080,501.44 respectively as at December 31, 2017 are doubtful due to the unreconciled difference of P3,701,806.87

Diadi Qualified/ Modified

The existence and completeness of the balances of Property, Plant and Equipment (PPE) amounting to P65,340,439.46 as at December 31, 2017 could not be ascertained due to non-preparation of Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and failure to maintain property ledger cards, which affected the fair presentation of the financial statements.

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Dupax del Norte

Qualified/ Modified

The accuracy and reliability of the Cash in Bank-LCCA totalling P110,055,900.65 could not be relied upon due to Several unsupported and unadjusted reconciling items;

Special Trust Fund account balance for unspent appropriations of the Local Disaster Risk Reduction and Management Fund (LDRRMF) for the years 2013-2016 was reverted to the General Fund, consequently misrepresenting Assets, Liabilities and Equity balances;

The discrepancy/difference noted between the balances of “Due from Other Funds” and “Due to Other Funds” of the Municipality totalling P76,463.11 as at December 31, 2017 renders doubt on the reliability of the reported balance on the financial statements; and,

Receivable account balances reported in the financial statements may not represent actual net realizable value of the accounts due to the existence of long outstanding accounts which may indicate impairment and uncollectibility.

Dupax del Sur

Qualified/ Modified

Failure to initiate the recognition of prior years’ infrastructure assets previously logged to the Registry of Public Infrastructures back to the books of accounts of the Municipality;

The validity of Property, Plant and Equipment (PPE) amounting to P77,200,522.07 cannot be determined due to the absence of actual physical inventory thereof contrary to Section 124, Volume I of the MNGAS, hence unreliable;

Unspent appropriation of CY 2017 Local Disaster Risk Reduction and Management Fund’s (LDRRMF) Quick Response Fund (QRF) and DRRMF-MOOE was not transferred to Trust Liabilities-DRRM; and,

The discrepancy/difference noted between the balances of “Due from Other Funds” and “Due to Other Funds” of the Municipality totaling P4,947.29 as at December 31, 2017 renders doubt on the reliability of the reported balance on the financial statements.

Kasibu Qualified/ Modified

The balance of the Property, Plant and Equipment account amounting to P111,807,591.54 could not be relied upon due to unreconciled difference of P65,566,604.29 between the accounting and property records.

Kayapa Qualified/ Modified

The Inventory Committee was able to perform the inventory count of Property, Plant and Equipment (PPE), however the reconciliation of accounting records and property cards was not finished and the Report on the Physical Count of Property, Plant and Equipment bearing any shortage/overage was not submitted, contrary to Section 124, Volume I of the MNGAS and Chapter 4 of the Handbook on Property and Supply Management System, hence affecting the fair presentation of the account on the financial statements.

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Quezon Qualified/ Modified

Invalid payables amounting to P871,153.46 which were booked without any evidence supporting the contractual relations between the municipality and the creditors and the unreconciled difference of Property, Plant and Equipment between accounting and property records amounting to P91,437,316.34.

Santa Fe

Qualified/ Modified

Management did not conduct physical inventory-taking of properties and did not prepare and submit the Report on the Physical Count of Property, Plant and Equipment of municipal properties amounting to P119,745,675.11, hence, the propriety, validity, existence and condition of PPEs could not be ascertained;

Liability and Asset accounts with ratio of 11.50% amounting to P15,539,158.26 and 1.97% amounting to P2,656,887.38, respectively on total assets were not supported with financial schedules, thus, making the financial statements doubtful and unreliable;

The Cash-in-Bank amounting to P20,751,074.06 was unreconciled making the account inaccurate and unreliable;

The RPT and SET Receivables and corresponding Deferred Credits with balances of P7,525,509.65 and P5,878,006.98, respectively, were not reconciled, thus, true balance was not presented as at year-end;

Cash-in-Bank was understated by P1,236,952.81 representing unreleased checks as at year-end which were already deducted from the depository account and reported as outstanding checks in the bank reconciliation statements; and,

The Due From Other Funds and Due to Other Funds have a discrepancy of P23,965.63. Electricity consumption of P260,338.54 were not accrued, thus, Expenses and Government Equity were also misstated.

Solano Qualified/ Modified

The balance of the Property, Plant and Equipment account amounting to P437,834,661.54 is doubtful due to a net unreconciled difference of P117,348,199.44 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 which is not in accord with Sections 114 and 124, Volume I of the NGAS and Chapter 4 of the Handbook on Property & Supply Management System.

Villaverde

Qualified/ Modified

Property, Plant and Equipment (PPE) totalling P9,285,885.95 were still recorded under the Trust Fund which is not in accordance with Section 104 of NGAS for LGU Volume 1, hence, the balances in the Financial Statements were not properly presented; and,

Current and Non-current Assets and Liabilities accounts were not properly classified and presented in the Financial Statements as prescribed under Paragraphs 76 and 80 of the Philippine Public Sector Accounting Standards (PPSAS) No. 1, thereby rendering the Financial Statements inaccurate.

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Quirino Unqualified/ Unmodified

Municipalities:

Aglipay

Qualified/ Modified

Unreconciled Cash in Bank balance of P 36,497,636.73;

Existence and correctness of Property, Plant and Equipment amounting to P113,027,843.84 cannot be ascertained due to failure to conduct actual physical count; and,

Procured supplies amounting to P 2,360,898.17 were directly charged to expense.

Cabarroguis

Qualified/ Modified

Unreconciled Cash in Bank balance of P86,669,863.47;

Existence and correctness of Property. Plant and Equipment amounting to P 110, 884,264.26 cannot be ascertained due to failure to conduct actual physical count; and,

Procured medicines, supplies and equipment amounting to P 1,493,653.15 were directly charged to expense.

Diffun

Qualified/ Modified

The amounts reflected for the following accounts in the financial statements cannot be ascertained due to non-availability of documents/records and bank reconciliation statements:

a) Cash in Bank balances of P151,792,299.17;

b) Receivable accounts with no identified legitimate debtors amounting to P992,790.33 that remained outstanding for more than 5 years; and,

c) Property, Plant and Equipment account amounting to P189,084,409.85.

Maddela

Qualified/ Modified

Existence and correctness of Property, Plant and Equipment amounting to P248,016,264.05 cannot be ascertained due to failure to conduct actual physical count; and,

Procured supplies amounting to P5,588,792.86 were directly charged to expense.

Nagtipunan

Qualified/ Modified

Existence and correctness of Property, Plant and Equipment amounting to P 337,562,194.37 cannot be ascertained due to failure to conduct actual physical count; and,

Procured supplies amounting to P 4,146,720.36 were directly charged to expense.

Saguday

Qualified/ Modified

Existence and correctness of Property, plant and equipment balances of P14,600,872.80 cannot be ascertained due to failure to conduct actual physical count; and,

Inventory accounts because of the recording as outright expenses of all procured supplies totalling P2.804 million during the year.

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Region III – Central Luzon

Aurora Qualified/ Modified

The reported balances of Cash-in-Bank accounts as of December 31, 2017 totaling P755,274,998.33 were unreliable due to (a) unavailability of bank statements which resulted in the non-preparation of the monthly Bank Reconciliation Statements (BRS) for seven depository accounts under the General Fund, with reported balances totaling P610,431,661.69 as at year end (b) non-recording/adjustments of reconciling items of P658,533.53.

Municipalities:

Baler Unqualified/ Unmodified

Casiguran Qualified/ Modified

The absence of land titles in the name of LGU-Casiguran for an undetermined number of lots with a recorded value of P28,816,690.06; the non-maintenance of Property Cards, Property, Plant and Equipment Ledger Cards (PPELC) and Real Property Ledger Cards (RPLC) ; and the non-submission of the Report of Physical Count of Property, Plant and Equipment (RPCPPE), rendered unreliable the balances of the Property, Plant and Equipment (PPE) accounts amounting to P149,340,151.48 or 53% of the total assets of the Municipality as at year-end.

Dilasag

Qualified/ Modified

Cash in Bank accounts of the Municipality as of December 31, 2017 was overstated by P9,449,438.51 due to non-recording of reconciling items reflected in the Bank Reconciliation Statements and failure to recognize the closure of three bank accountswith reported balances of P8,353,750.41; and,

The accuracy and existence of the Property, Plant and Equipment totaling P69,048,309.34 could not be ascertained due to inability of management to conduct physical count of all the agency assets and non-maintenance of adequate property records.

Dinalungan

Qualified/ Modified

The accuracy, existence and valuation of the reported carrying value of Property, Plant and Equipment (PPE) accounts of P60,230,109.98 as of December 31, 2017 remained unreliable due to:

a) non-maintenance of property records;

b) incomplete physical count of property; and,

c) non-provision of depreciation contrary to the pertinent provisions of the Manual on the New Government Accounting System (NGAS) Volume 1.

Out of the P14,575,010.00 reported Land account balances, only four lots with assessed value of P11,907,090.00 were registered in the name of the Municipality while P2,667,920.00 remained undocumented to prove the LGUs ownership thereof; and

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The balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables totaling P1,023,958.50 as of December 31, 2017 were understated by a total of at least P6,598,220.98 or 644.38% of the recorded year-end balance owing to the Municipal Treasurer's non-submission of certified list of taxpayers to the Municipal Accountant at the beginning of the year.

Dingalan Qualified/ Modified

The existence, valuation and accuracy of the balances of Property, Plant and Equipment (PPE) accounts totaling P99,195,576.05 was doubtful due to (a) non-provision for depreciation for all PPE account; (b) non-maintenance of property records by the Accounting and General Services offices; and (c) non-completion of inventory taking of PPE accounts. Due to the nature of the municipality’s records, we were unable to satisfy ourselves as to the inventory quantities and valuation by means of other auditing procedures.

Dipaculao Qualified/ Modified

The accuracy and existence of the reported carrying value of Property, Plant and Equipment (PPE) accounts of P133,742,838.84 as of December 31, 2017 remained unreliable due to

a) incomplete/un-updated property records; and,

b) incomplete physical count of property.

Owing to the Municipal Treasurer’s non-submission of certified list of taxpayers to the Municipal Accountant at the beginning of the year, the latter’s non-maintenance of subsidiary records therefor and the non-recognition of delinquencies as at December 31, 2017, the balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables totaling P274,911.20 as of December 31, 2017 were understated by a total of at least P6,757,123.36 or 2,457.93% of the recorded balance at year-end.

Maria Aurora Qualified/ Modified

The correctness of Property, Plant, and Equipment (PPE) accounts of P 155,025,510.61 as of December 31, 2017 remained unreliable due to (a) discrepancy of P 39,475,266.31 between accounting records and physical inventory report and; (b) incomplete PPE records.

San Luis

Qualified/ Modified

The reported balances of Cash-in-Bank accounts as of December 31, 2017 totaling P75,729,635.97 were unreliable due to

a) non-recording/adjustments of reconciling items of P3,192,359.74 (net amount); and,

b) lack of supporting documents of prior years’ reconciling items amounting to P2,563,821.24.

The Municipal Treasurer and Accountant failed to reconcile their property records, thus, a difference of P2,228,922.04 remained unsettled rendering the PPE accounts unreliable with an aggregate balance of P262,441,556.65 as of December 31, 2017.

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LGU AUDIT


Bataan Qualified/ Modified

There were unreliable balances of Property, Plant and Equipment (PPE) amounting to P4,810,822,096.84; RPT/SET Receivables, Loans Receivable – GOCCs, Loans Receivable – Others, Due from NGAs and Other Receivables amounting to P27,689,750.55, P39,256,294.66, P60,000.00, P6,335,888.78, P15,389,971.85, and P573,465.47, respectively; Construction-in-Progress and Accounts Payable (Trust Fund) amounting to P70,827,213.25; and Due to NGAs and Government Equity (Trust Fund) amounting to P21,821,791.81 as of year-end due to

a) the non-completion of the physical count of Property, Plant and Equipment (PPE), which includes the infrastructure assets;

b) existence of dormant and long outstanding receivables;

c) non-recognition of Construction-in-Progress and Accounts Payable in the books of account for the status of work accomplished at year end pertaining to the CMGP, KALSADA, and PRDP projects;

d) error in recording the (i) 70% share of the NGA in the Improvement of Morong-Mabayo Road and (ii) share of the Loan Proceeds and GOP in the acquisition cost of Agricultural and Forestry Equipment; and,

e) existence of dormant and unliquidated Due to NGAs

City:

Balanga City Qualified/ Modified

A qualified opinion was rendered because of the absence of the certified list of taxpayers/assessment roll to support the amount set up as receivables during the year totaling P96,000,000.00. Likewise, the absence of details identifying each item on Land, Buildings and Furniture and Fixtures account totaling P31,833,593.66 remained unreconciled rendering the accounts unreliable.

Municipalities:

Abucay Qualified/ Modified

Unreliable balance of RPT/SET Receivables amounting to (P572,962.16) due to the failure to ascertain and substantiate the reported figures with subsidiary records; and,

Doubtful balances of the presented Property, Plant and Equipment with a carrying value amounting to P124,829,056.04 due to the failure of management to ascertain existence and valuation through actual inventory and non-maintenance of property/ledger cards.

Bagac Qualified/ Modified

The absence of accurate basis of setting up RPT/SET Receivables, the Treasurer’s and Accounting office’s continuously failed to reconcile the RPT/SET records rendering the accounts unreliable.

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LGU AUDIT


Procurement of small PPE items totalling P53,130.00 which are properly classified as inventory or recorded as appropriate expense accounts were inadvertently recognized as Equipment and Other Machinery and Equipment while disbursements for rehabilitation of barangay stage amounting to P49,296.75 was recorded as Road Network instead of Repairs and Maintenance; and,

Depreciation expense for newly acquired property was overstated due to improper estimates applied thereto, thus, overstating the assets and equity accounts.

Dinalupihan Qualified/ Modified

Doubtful validity of Loans Receivable-Others account with balance of P145,290.03 and Other Receivables account of P6,697.02 for the failure to substantiate the accounts with necessary documents and detailed information;

Unreliable balance of Property, Plant and Equipment accounts with a net book value of P183,571,297.81 due to partial completion of the actual physical count and non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) as of year-end, non-inclusion of parcels of land owned by the Municipality but not yet titled under its name, 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,

Unutilized balances of Due to NGAs account amounting to P1,190,103.29 and long outstanding Due to Officers and Employees and Due to LGUs account amounting to P5,720.84 and P626,544.52, respectively, are still in the books and not yet returned/transferred to the corresponding persons/agencies.

Hermosa Qualified/ Modified

Unreliable balance of RPT and SET Receivable amounting to P18,202,225.18 and P19,575,976.68, respectively, due to the failure of the Municipal Treasurer to provide the Accounting Office with a certified list of taxpayers and the set-up of each account was still based on estimates;

Unreliable balance of Property, Plant and Equipment account with a net book value of P228,355,496.98 which could not be determined due to the unreconciled PPE balances between the books and physical inventory report, non-Writing Off/Dropping of unserviceable/obsolete PPE in the books; and,

Cash advances totaling P5,521,970.00 remain unliquidated or not refunded despite completion of the purpose for which these were granted resulting in the understatement of expenses and overstatement of receivables account balances.

Limay Qualified/ Modified

The Property, Plant and Equipment (PPE) balances at year-end could not be ascertained because of the continuous

a) non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

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b) non-maintenance of complete and updated PPE Ledger Cards (PPELC) and property cards (PC);

c) non-reconciliation of property and accounting records; and

d) non-appraisal/revaluation of properties with no costs.

Non-setting up of Real Property Tax (RPT) and Special Education Tax (SET) Receivables at the beginning of the year owing to the continuous failure of the OIC-Municipal Treasurer to submit the duly certified list of taxpayers showing the amount due and collectible for the year and unreconciled disparity between their balances;

Unreliable Cash in Bank balances at yearend due to unadjusted reconciling items;

Outstanding receivables of P7,702,897.54 for more than three years; and

Non-setting up of impairment on Receivables and PPE accounts and non-depreciation of some properties cause the Receivables and PPE accounts overstated and Depreciation Expenses understated by an undetermined amount as at year-end.

Mariveles Qualified/

Modified The Property, Plant and Equipment (PPE) balances at year-

end could not be ascertained because of the continuous

a) non-conduct of physical inventory of PPE;

b) non-maintenance of complete PPE Ledger Cards (PPELC) and property cards (PC);

c) non-reconciliation of property and accounting records;

d) inclusion of disposed unserviceable properties of P3,496,581.00 to PPE accounts; and

e) non-appraisal/revaluation of renovated/reconstructed market, slaughterhouse, municipal building, donated lots and other properties with no costs;

Non-setting up of Real Property Tax (RPT) and Special Education Tax (SET) Receivables at the beginning of the year owing to the continuous failure of the OIC-Municipal Treasurer to submit the duly certified list of taxpayers showing the amount due and collectible for the year and unreconciled disparity between their balances;

Procured supplies and materials recognized as outright expense instead of coursing it first to the appropriate inventory accounts;

Outstanding receivables of P1,591,995.76 for more than ten years.

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Non-setting up of impairment on Receivables and PPE accounts and non-depreciation of Public Infrastructures cause the Receivables and PPE accounts overstated and Depreciation Expenses understated by an undetermined amount;

Inactive loans payable of P3,601,146.65; and,

Trust Liabilities-DRRMF overstated due to the double recording of the fund transfer of unexpended/unutilized LDRRMF for CYs 2014-2015 and the under-recognition of the constructed riprap and non-transfer of procured infrastructure assets from Trust Liabilities-DRRMF to General Fund which resulted to understatement of PPE as at year-end.

Morong Qualified/ Modified

Unreliable Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable because the set-up in the amount of P25,421,900.00 for each account was still based on estimates; and

Unreliable balance of the Property, Plant and Equipment of P163,920,802.53 due to continuous failure to substantiate the reported figures with actual physical count and inability to reconcile the property and accounting records due to non-update of the property cards and property, plant and equipment ledger cards.

Orani Qualified/ Modified

Unreliable balance of RPT/SET Receivable amounting to P22,616,727.58 due to the failure to ascertain and substantiate the reported figures with subsidiary records; and,

Doubtful balances of the presented Property, Plant and Equipment with a carrying value amounting to P266,301,378.24 due to the failure of management to ascertain existence and valuation through actual inventory and non-maintenance of property/ledger cards.

Orion Qualified/ Modified

The Property, Plant and Equipment (PPE) balances at yearend could not be ascertained because of the

a) non-conduct of physical inventory of PPE;

b) non-maintenance of complete PPE Ledger Cards (PPELC) and property cards (PC);

c) non-reconciliation of property and accounting records;

d) inclusion of unserviceable/destroyed properties of P2,591,947.95 to PPE accounts; and

e) non-appraisal/revaluation of properties with no costs

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LGU AUDIT


The Real Property Tax (RPT) and Special Education Tax (SET) Receivables at the end of the year remained inaccurate and unreliable owing to the amount set up at beginning of the year was still based on Assessor’s Report on Real Property Assessments instead of duly certified list of taxpayers showing the amount due and collectible for the year and unreconciled disparity between their balances;

Non-setting up of impairment on Receivables and PPE accounts and non-depreciation of Public Infrastructures cause the Receivables and PPE accounts overstated and Depreciation Expenses understated by an undetermined amount;

Cash-Local Treasury were understated by P1,303,393.97 due to the failure of the Municipal Treasurer to account the collections amounting to P2,042,365.47;

Doubtful treatment of municipal shares on sales proceeds of the Small Town Lottery (STL) due to lack of basis on recording and reportorial requirements; and,

Non-transfer of procured rescue vehicles and equipment from Trust Liabilities-DRRMF to General Fund which resulted to understatement of PPE as at year-end.


Unreliable balances of Property, Plant and Equipment amounting to P238,251,775.24 due to failure to support the Inventory of Fixed Assets and Report of Physical Count of Property, Plant and Equipment (RPCPPE); and non-inclusion of some Property, Plant and Equipment in the RPCPPE; and,

RPT/SET Receivable amounting to P5,750,396.92 due to non-maintenance of subsidiary ledgers by the Municipal Accountant to support the figures.

Samal Qualified/ Modified

Unreliable balance of RPT/SET Receivables amounting to P2,360,317.42 due to the failure to ascertain and substantiate the reported figures with subsidiary records; and,

Doubtful balances of the presented Property, Plant and Equipment with a net book value amounting to P109,737,355.75 due to the failure of management to ascertain existence and valuation through actual inventory, non-maintenance of property/ledger cards and understatement of provision for depreciation.

Bulacan Qualified/ Modified

The balance of the cash in bank account was understated by P3,546,792.65 which is the net effect of the unrecorded interest earned from bank deposits, gain in the conversion of FOREX ($) to local currency (P), debit memos, other reconciling items and doubtful existence of two bank accounts with book balance of P584,645.72. It also consisted of non-moving deposit accounts aggregating to P16,710,441.10 which remained dormant from three to 18 years thus placing them at risk of being declared as “unclaimed balances” and reclassified by the bank as “Due to Treasurer of the Philippines;

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Dormant accounts receivables, aged over two to ten years totaling P78,397,927.35, hence, resulting in the uncertainty and nil possibility of the collection/settlement of the accounts;

Unreliable year-end balances of inventory accounts by P636,921,177.29 due to misclassification of Inventory Accounts, inconsistencies in the accounting treatment for recording of procurement of various supplies and materials as asset, expense or Prior Years Adjustment; and,

Unreliable PPE account amounting to P8,382,795,721.50 due to unreconciled difference of P184,788,026.30 between the Report on the Physical Count of PPE and the accounting records; and unsubstantiated Land account of P507,224,105.47 which is not evidenced by land titles/ other proofs of ownership, and with no acquisition costs or fair values and continuous recognition of unserviceable properties totaling P22,757,177.03.

Cities:

Malolos City Qualified/ Modified

Unreliable Cash in Bank account totaling P137,174,905.28;

Unrecognized expenses relevant to long outstanding cash advances aggregating to P3,399,271.99;

Unrecorded inventories on hand totaling P1,267,362.63;

Unreliable Property, Plant and Equipment (PPE) accounts balances aggregating to P603,244,640.56;

Misstated Due to NGA account balance and other affected accounts totaling P39,446,071.63; and,

Inaccuracy of the Trust Liability account for LDRRMF amounting to P187,502,967.46 due to the unreverted 2012 unexpended balance to the General Fund.

Meycauayan City Qualified/ Modified

The Balances of the Cash, Property, Plant and Equipment (PPE), Bonds Payable accounts as of year-end were unreliable due to the following:

a) the accuracy of the balances of the Cash in Bank accounts of Ᵽ1,072,347,402.32 as of December 31, 2017 could not be determined due to various reconciling items pertaining to prior and current years’ transactions affecting the bank and book balances;

b) the reliability of the recorded balance of the Property, Plant and Equipment (PPE) with net book value of P1,508,910,501.42 was not established because of unrecognized Medical Equipment and Disaster Equipment amounting to P2,438,000.00 and P420,000.00, respectively and undetermined cost of unrecorded donated land; and,

c) Confirmation of loan balances with the Philippine National Bank revealed unreconciled balances for the Bonds Payable account for the Construction of the Meycauayan General Hospital with discrepancy amounting to P21,070,586.73.

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LGU AUDIT


San Jose del Monte City Qualified/ Modified

The accuracy, validity and existence of the Property Plant and Equipment (PPE) amounting to P1,985,258,594.14 could not be ascertained owing to failure of the Accounting and the General Services Office to reconcile the variance of P30,070,593.19 between the books and physical inventory reports; and,

The correctness and existence of the balance of Inventory accounts amounting to P54,934,757.86 as of year-end remained unreliable due to the continuous failure of the Accounting and General Service Offices to reconcile the discrepancy of P45,193,391.00.

Municipalities:

Angat Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) with net book value of P97,144,669.20 as of December 31, 2017 could not be relied upon due to the

a) failure of the municipal officials to conduct complete annual physical inventory of all PPE owned by the municipality and submit the inventory report thereon;

b) the absence of PPE Registry and non-reconciliation of available records with the PPE ledger balances, contrary to the provisions of Section 124 of the NGAS Manual; and,

c) continued inclusion of obsolete, unserviceable and fully depreciated items in the books.

Balagtas

Qualified/ Modified

The existence, completeness and accuracy of property, plant and equipment (PPE) with net book value of P259,336,549.36 were not established due to

a) absence of physical inventory reports contrary to existing accounting standards, rules and regulations; and,

b) unascertained ownership of several parcels of lots and vehicles.

Real Property Tax (RPT) and Special Education Tax (SET) Receivables for CY 2017 with year-end balances of P46,478,274.50 and P45,321,788.87, respectively, were set up based on collection estimates on the taxable assessed values instead of using the certified list of taxpayers contrary to Section 20, Vol. I of the Manual on NGAS, creating doubt on the accuracy of the said balances.

Baliuag Qualified/ Modified

The accuracy, existence and ownership assertions on the reported year-end carrying value of the Property, Plant and Equipment (PPE) amounting to P329,766,200.24 or 53.76% of the total assets remained to be unreliable due to

a) non-completion of the physical inventory contrary to existing accounting standards, rules and regulations;.

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b) non-recognition of purchased and/or donated Land and Building in the books, contrary to PPSAS provisions;

c) unavailability of the certificates of ownership for some assets;

d) continued inclusion of obsolete, unserviceable and fully depreciated items in the books; and,

e) unreconciled beginning balances of PPE accounts.

Bocaue Qualified/

Modified The existence and accuracy of Property, Plant and

Equipment (PPE) account with net book value of P168,596,764.66 as of December 31, 2017 could not be ascertained since it was not supported by physical inventory report and complete and accurate property cards contrary to Sections 114, 119 and 124, Volume I of the Manual on New Government Accounting System (NGAS) for LGUs;

Several lots evidenced by land title under the custody of the Municipal Treasurer’s Office remained unrecorded while several parcels of lots booked at P19,878,274.34 were not supported by Certificates of Title, contrary to Section 148 of COA Circular No. 92-386, thus exposing government property to third party claims;

The balances of the Inventory accounts in the amount of P2,763,620.00 as of December 31, 2017 remained unreliable and doubtful due to

a) direct charging to expense account of inventories purchased regularly totalling to P1,458,761.29; and,

b) non-validation of the physical existence of inventories owing to non-conduct of physical count.

Bulakan Qualified/ Modified

The reliability of the reported Property, Plant and Equipment (PPE) accounts balances with a total net carrying value of P144,511,241.02 remained uncertain due to deficiencies noted contrary to the provisions of Volume I of the Manual on New Government Accounting System (NGAS) for Local Government Units (LGUs), Section 111 of PD 1445 and PAG3 of Volume II of the Philippine Public Sector Accounting Standards (PPSAS) No. 17.

Bustos Qualified/

Modified The accuracy and reliability of the reported Cash in Bank

account balance was not established due to

a) non-reconciliation of the cash balances per ledger and per cashbook on a regular basis; and,

b) failure of the Accounting Office to prepare the Monthly Bank Reconciliation Statements for all funds.

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LGU AUDIT


Various asset accounts totaling P1,671,392.21 remained dormant and unadjusted in the books for several years affecting the reliability of the reported balances of these accounts and the fairness of the presentation of the financial condition of the Municipality;

The accuracy of the reported Property, Plant and Equipment (PPE) account with net book value of P68,334,744.25 was doubtful due to

a) non-provision of allowance for depreciation on PPE acquired prior to CY 2003;

b) non-submission of Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

c) non-maintenance of property records at the Municipal Treasurer’s Office (MTO) and Accounting Office; and,

d) lack of ownership documents over the recorded lots; and (d) misstatement of the Motor Vehicle account due to the continuous recognition of the net carrying values of the unserviceable motor vehicles amounting to P92,502.00.

Calumpit Qualified/ Modified

The reliability and accuracy of the recorded Property, Plant and Equipment accounts with total book value of P200.972 million could not be determined owing to

a) failure of Management to acquire titles on various lots in favor of the Municipality;

b) non-submission of inventory report due to unfinished inventory taking; and

c) failure of the Accounting Office to maintain Property, Plant and Equipment Ledger Cards (PPELC) for each class of PPE and the General Services Office to maintain Property Cards (PCs).

Doña Remedios Trinidad Qualified/ Modified

The reliability of the recorded balance of the accounts under the Property, Plant and Equipment (PPE) with net book value of P323,369,959.87 as of December 31, 2017 was not established because of

a) the failure of the GSO to conduct a complete physical inventory as of December 31, 2017; and,

b) unreconciled accounting and property records due to the absence of subsidiary/property ledgers at the Accounting Office and property cards of GSO, contrary to the pertinent provisions of the NGAS Manual.

Guiguinto Qualified/ Modified

The Property, Plant and Equipment accounts recorded at P259,279,373.21 remained unreconciled due to

a) non-maintenance of records by the Accounting and Municipal Treasurer’s office for the PPE accounts;

b) failure to reconcile PPE accounts balances with the list of properties maintained as well by the Municipal Accounting Office;

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c) failure to provide allowance for depreciation on all depreciable assets of the Municipality;

d) doubtful accuracy of the reported balance of the Land account; and,

e) failure to secure the Transfer Certificates of Titles (TCT) on the ownership of six lots thus, the existence and ownership of the recorded assets could not be established contrary to the provisions of Volume I of the Manual on New Government Accounting System (NGAS) for Local Government Units (LGUs), Section 111 of PD 1445 and PAG3, Volume II of the Philippine Public Sector Accounting Standards (PPSAS)17.

Hagonoy Qualified/ Modified

The Property, Plant and Equipment (PPE) accounts were unreliable due to

a) non-reconciliation between the balances per books and physical inventory report amounting to P95,976,905.27;

b) inclusion of unserviceable properties totaling P7,119,652.90;

c) non-maintenance of property records,

d) inclusion of semi-expendable items,

e) non-capitalization of P18,194,541.24 worth of major repairs and completed CIP; and,

f) absence of land titles for 23 parcels of land with assessed value of P11,135,830.00.

Marilao Qualified/ Modified

The reported net carrying values of the Property, Plant and Equipment (PPE) accounts totaling P725,812,405.31 were doubtful due to

a) non-provision of allowance for depreciation on Agricultural and Forestry Equipment account;

b) non-submission of Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

c) non-maintenance of property records at the Municipal Treasurer’s Office (MTO) and Accounting Office; and,

d) lack of ownership documents over the recorded lots, thereby affecting the reliability of the reported balances of these accounts and the fairness of the presentation of the financial condition of the Municipality.

Norzagaray Qualified/ Modified

The accuracy, validity and existence of the recorded Property Plant and Equipment (PPE) and Supplies Inventory accounts amounting to P651,846,554.42 and P600,490.00, respectively, could not be ascertained owing to

a) failure of the Accounting and the General Services Office to reconcile the unresolved variance of P104,971,610.12 between the books and physical inventory reports;

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b) unaccounted PPE balance of 31,778,975.48;

c) absence of physical inventory of buildings and physical infrastructures; and,

d) completed projects and PPE purchased charged to Trust Fund were not transferred and recorded in the books of accounts of the General Fund.

Obando Qualified/ Modified

The balances of the Cash, Other Receivable and Property, Plant and Equipment (PPE) accounts as of year-end were unreliable due to

a) unadjusted and unreconciled bank and book reconciling items amounting to P271,339.79pertaining to prior and current years’ transactions that remained unadjusted in the books of accounts as of audit date;

b) Other Receivables account totaling to Ᵽ247,000.00 which was dormant for more than ten years; and,

c) Unreliable Property Plant and Equipment Account totaling to Ᵽ50,520,188.81 due to unreconciled difference of P20,585,853.87 between the Report on the Physical Count of PPE and the accounting records.

Pandi Qualified/ Modified

The accuracy, existence and ownership on the Property, Plant and Equipment (PPE) accounts were not established and remained doubtful due to the Municipality’s continuous failure to

a) conduct a complete physical count of all its properties amounting to P210,420,480.16;

b) non-reconciliation of property and accounting records;

c) non-disposal of unserviceable PPE amounting to P2,852,162.92; and (d) disparity in the records of the Assessor’s Office, Treasurer’s Office on the results of actual audit on the titles and ownership documents affecting the Land account.

Paombong Qualified/ Modified

Significant accounting errors and deficiencies were incurred such as

a) inaccurate Cash in Bank account totaling P65,967,629.80;

b) unrecognized expenses relevant to long outstanding cash advances aggregating to P997,186.89;

c) unreliable Property, Plant and Equipment (PPE)

accounts balances with total historical cost of P112,918,152.25;

d) understated loans payable account by P5,855,989.36;

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e) unreliable Due to NGA account balance totaling P33,843,470.78; and,

f) unreverted long outstanding payables of P311,434.34

Plaridel Qualified/ Modified

The Property, Plant and Equipment recorded at P544,923,951.33 remained unreconciled in the books of the agency due to

a) non-completion and non-submission of the physical inventory report;

d) non-maintenance of records for the PPE accounts;

c) unresolved variance of P36,509,185.65between the general ledger balance and the list of properties;

d) failure to provide allowance for depreciation on all depreciable assets of the Municipality;

e) disparity in the records of the Assessor’s Office,Treasurer’s Office and results of actual audit on the titles and ownership documents affecting the Land account; and,

f) failure to secure the Transfer Certificates of Titles (TCTs) on the ownership of two donated lots on the public market and slaughter house resulting in their non-recognition in the books.

Pulilan

Qualified/ Modified

The Property, Plant and Equipment recorded at P209.81 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.

Failure to prepare Bank Reconciliation for Cash in Bank – Local Currency, Current Account and the Cash in Bank – Local Currency, Time Deposits accounts amounting to P207,172,976.05 and P11,056,851.70, respectively;

Failure to maintain cashbook for the Cash in Bank; and

Erroneous recording of procurement of supplies, materials, equipment and relief goods out of the Local Disaster Risk Reduction and Management Fund.

(San) Ildefonso Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) with net book value of P249,487,985.05 could not be relied upon due to the:

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a) failure of the municipal officials to conduct complete annual physical inventory of all PPE owned by the municipality and submit the inventory report thereon;

b) the absence of PPE Registry and non-reconciliation of available records with the PPE ledger balances, contrary to the provisions of Section 124 of the NGAS Manual; and,

c) continued inclusion of obsolete, unserviceable and fully depreciated items in the books.

San Miguel Qualified/

Modified The reliability of the recorded balance of the accounts under

the Property, Plant and Equipment (PPE) with net book value of P209,034,159.75 as of December 31, 2017 was not established because of

a) the failure of the GSO to conduct a complete physical inventory as of December 31, 2017; and,


San Rafael Qualified/

Modified The reliability of the recorded balance of the accounts under

the Property, Plant and Equipment (PPE) with net book value of P457,401,933.66 as of December 31, 2017 was not established because of:

a) The failure of the GSO to conduct a complete physical inventory as of December 31, 2017; and,


Santa Maria Qualified/

Modified Four asset accounts totaling P20,956,025.93 remained

unsubstantiated and dormant for several years affecting the reliability of the reported balances of these accounts as well as the fairness of presentation of the financial condition of the Municipality;

Unserviceable properties were not disposed of that may lead to possible loss and further deterioration; and,

Balances of NALGU and RPTA funds amounting to P137,255.06 remained in the local currency current accounts at the Land Bank of the Philippines and were not returned to the source agencies or reverted to the unappropriated surplus of the general fund thereby depriving the government of the use of the funds for other developmental projects.

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LGU AUDIT


Nueva Ecija

Qualified/ Modified

Doubtful existence and accuracy of the inventory accounts amounting to P411,231,972.01 as of December 31, 2017 due to (i) non-conduct of complete inventory count and non-submission of corresponding inventory report thereon; (ii) non-maintenance of a complete supplies ledger card and stock card; and (iii) non-reconciliation of the balances in the financial statements, partial inventory reports, stock cards and stock ledger cards;

Unliquidated cash advances at year-end totaling P3,655,103.10, overstating the asset and government equity accounts;

Dormant Loan Receivables-Others totaling P2,059,544.89 overstating the current assets and the government equity accounts;

Dormant Accounts Payable amounting to P22,820,114.72 overstating the liabilities and understating the government equity accounts; and

Donated medical equipment which includes pharmaceutical refrigerator and mechanical beds with a total cost of P1,857,075.00 were not recorded in the books, understating the Property, Plant and Equipment and its corresponding depreciation cost and the Government Equity accounts.

Cities:

Cabanatuan City

Qualified/ Modified

The accuracy, existence and completeness of the net book value of Property, Plant and Equipment (PPE) accounts totaling P2,554,787,073.94 or 54% of total assets of the City could not be relied upon due to

a) incomplete maintenance of property records by the General Services Office;

b) incomplete conduct of annual inventory taking and non-submission of complete inventory reports of all PPEs by the Inventory Committee; and,

c) unreliable land account balance attributable from (i) non-transfer of title on ownership of land to the City amounting to P41,694,746.59; (ii) unrecorded land of undetermined amount with an area of 6,215 square meters; and (iii) non-transfer of unrecorded donated lot in the name of the City Government with an area of 1,032 square meters casts doubts on the correctness of the Land and Government Equity accounts balances

Non-transfer of completed projects from Construction in Progress (CIP) account to appropriate asset accounts totaling P286,284,458.42, understated the affected appropriate PPE accounts by the same amount as of December 31, 2017.

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PhilHealth Fund (PCF) received by the City from PhilHealth intended for other expenses of the City Hospital and for the professional fees of medical doctors who have rendered services therein were erroneously recorded in the books which resulted in overstatement of Due to Philhealth account and understatement of Other Payable account by P23,738,740.45, respectively as of December 31, 2017.

Gapan City

Qualified/ Modified

The correctness and existence of Property, Plant and Equipment (PPE) accounts with a reported net book balance of P936,093,234.32 as of December 31, 2017 is unreliable due to:

a) the absence of vital supporting documents of the Accounting and the Property Office and their failure to conduct the physical inventory, thus the non-reconciliation of records between the two Offices;

b) lack of records and documents to prove the correctness of the computation of the corresponding depreciation which also affected expense accounts; and

c) issuance of PPE items without an Acknowledgement Receipt for Equipment (ARE), inconsistent with the Manual on NGAS for LGUs, Volume II and Section 491 of GAAM Volume I.

The reliability of the accumulated balance of receivables for

Real Property Tax (RPT) and Special Education Tax (SET) with an aggregate amount of P62,233,551.82 as of December 31, 2017 could not be ascertained due to unreliable basis in recording of receivables at the beginning of the year, inconsistent with Section 20 of the New Government Accounting System (NGAS).

Palayan City

Qualified/ Modified

Unreconciled/Discrepancy between reciprocal accounts Due from/Due to Other Funds amounting to P1,108,132.49 cast doubts on the accuracy of the balances of both accounts;

Unliquidated cash advances totaling P7,428,818.68 as of December 31, 2017 thus understating the expense account and overstating the government equity account;

Dormant long overdue Receivables from Disallowances/Charges, Due from Non-Government Organizations/Peoples Organization and Other Receivables in a total amount of P33,306,254.05 as of December 31, 2017 renders the uncertainty of its collections thus casting doubt on the validity of the said accounts; and,

Non-conduct of physical inventory and incomplete maintenance of property ledger cards affecting reliability of the PPE accounts with a carrying value of P413,024,342.64 in the books as of December 31, 2017

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LGU AUDIT


San Jose City Qualified/ Modified

The balances of the Real Property Tax (RPT) Receivables and Special Education Tax (SET) Receivables reported in the books at P9,671,408.04 and P15,391,278.66, respectively, are not reliable due to improper bases of setting up the receivables.

Science City of Muñoz

Qualified/ Modified

The City did not set up receivables on Real Property Tax (RPT) and Special Education Tax (SET) but applied cash basis in recording these incomes, which resulted in the understatement by undetermined amounts of the said accounts; and,

The reliability of the carrying value of Property, Plant and Equipment (PPE) accounts totaling P1,096,769,732.73 at year-end remained doubtful due to continuous failure of the City to (a) maintain complete property records, (b) recognize impairment losses on recorded assets due to deterioration.

Municipalities:

Aliaga

Qualified/ Modified

Discrepancies totaling P101,435,345.20 were noted between the amount of delinquent RPT/SET reported by the Municipal Treasurer and Municipal Accountant due to incomplete RPTARs, thus affecting the reliability of the account; and business tax delinquencies could not be determined due to non-maintenance of individual index card; and,

Non-liquidation of cash advances with a total amount of P1,915,146.00 at year-end, thereby overstating the assets and understating the expenses.

Bongabon Unqualified/ Unmodified

Cabiao Qualified/ Modified

Unreliable PPE accounts totaling P131,383,021.47, of which items totaling P1,712,215.19 have no complete details of information and non- conduct of physical inventory of all PPE;

Doubtful Accounts Payable totaling P1,551,145.59, of which P325,533.51 was not supported by adequate documentation and prior years payable’s of P314,991.71 which remained outstanding for more than two years;

Discrepancy of P188,709.55 between the year- end balances of the reciprocal accounts, Due from Other Funds and Due to Other Funds amounting to P3,712,185.09 and P3,900,894.64, respectively;

Presence of abnormal balances of accounts Due to GSIS, Due to Pag-IBIG and Due to PhilHealth totaling P(221,956.32);

Unliquidated cash advances of P2,478,728.15 as of year-end affecting the expense account; and,

Unreliable Real Property Tax (RPT) and Special Education Tax (SEF) receivables amounting of P102,217,094.10 due to incorrect basis in recording at the beginning of the year.

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LGU AUDIT


Carranglan

Qualified/ Modified

The respective account balances of RPT and SET Receivables of P5,242,675.37 and (P2,398,922.93) as of December 31, 2017 remained unreliable.

Non-classification of current portion of Loans Payable-Domestic Account as of December 31, 2017; Variance of P2,985,624.99 between the book balance of P12,718,886.50 and the amount of P15,704,511.49 as confirmed by the lending bank as at same reporting date; and difference of P1,363,971.72 as at same year end between the book balance and the amount of outstanding loans reported to Department of Interior and Local Government (DILG).

Cuyapo Qualified/ Modified

Inaccuracy of the Cash in Bank balances as of December 31, 2017 totaling P25,394,201.49 due to

a) unaccounted net difference of P575,454.31 between adjusted book and bank balances;

b) non-recognition/adjustments of the reconciling items of P1,798,063.51 (net amount) for lack of supporting documents; and

c) uncancelled stale checks of P295,724.36; and (2) unreliability of the recorded Property, Plant and Equipment (PPE) totaling P248,600,770.01 due to the unreconciled difference of P215,475,021.21 between the accounting records and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) as result of incomplete physical inventory.

Gabaldon Qualified/ Modified

The accuracy and reliability of Cash in Bank Accounts amounting to P49,426,022.11 as of December 31, 2017 cannot be ascertained due to delayed/non-submission of Monthly Bank Reconciliation Statements (BRS) by the Municipal Accountant;

The accuracy and reliability of the recorded Real Property Tax (RPT) and Special Education Tax (SET) Receivables totaling to P98,692,578.39 as of year-end could not be ascertained due to unreliable basis in recording of receivable at the beginning of the year; and,

The existence, propriety and validity of land account as recorded in the books of accounts of the Municipality with a total amount of P1,947,350.00 as of December 31, 2017 could not be ascertained due to:

a) absence of Transfer Certificates of Title (TCT) or its equivalent in the name of the Municipality of Gabaldon for five out of seven land accounts claimed to be owned by the Municipality; and,

b) non reconciliation of the Accounting, Treasury and Assessors records pertaining to land account.

General Mamerto Natividad Qualified/ Modified

Undetermined long outstanding receivables amounting to P1,562,390.77;

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Unrecorded issuances of inventory items amounting P542,253.01; and,

Doubtful existence and accuracy of PPE amounting to P93,985,439.90 due to non-maintenance of complete property ledger cards and non-conduct of physical inventory.

General Tinio

Qualified/ Modified

The correctness and existence of Property, Plant and Equipment (PPE) accounts with a reported net book balance of P 269,136,614.50, which represents 57.24% of the total assets of the agency as of December 31, 2017 could not be ascertained due to

a) the absence of vital supporting documents of the Accounting and the Property Office and their failure to conduct the physical inventory, thus the non-reconciliation of records between the two Offices;

b) doubtful correctness of the corresponding depreciation which have parallel adverse effect on the reliability of the affected expense accounts; and,

c) issuance of PPE items without an Acknowledgement Receipt for Equipment (ARE).

The accumulated balance of receivables for Real Property Tax (RPT) and Special Education Tax (SET) with an aggregate amount of P 107,316,284.94 as of December 31, 2017 is doubtful due to unreliable basis in recording of receivables at the beginning of the year.

Guimba Qualified/ Modified

Unreliability of accumulated balance of receivables for Real Property Tax (RPT) and Special Education Tax (SET) with an aggregate amount of P44,290,042.77 as of December 31, 2017 due to incorrect basis in recording receivable at the beginning of CY 2017 and the failure to set up the said receivables for CY 2015 and 2016, thus affecting the correctness of the receivable account; and,

Unreliability of Property, Plant and Equipment (PPE) with a recorded value of P370,505,260.70 as of December 31, 2017 attributed to Municipality’s inaction to adopt sound property management practices for accounting and accountability purposes.

Jaen Qualified/ Modified

Inaccuracy of receivable accounts, Real Property Tax and Special Education Tax, totaling to P60,136,286.12 due to unreliable basis in recording receivable at the beginning of the year.

Laur Qualified/ Modified

Inaccuracy of receivable accounts, Real Property Tax and Special Education Tax, totaling to P60,136,286.12 due to unreliable basis in recording receivable at the beginning of the year;

Unreliability of Property, Plant and Equipment (PPE) accounts with a recorded value of P163,220,339.93 as of year-end due to:

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b) non-maintenance of property cards and property, plant and equipment ledger cards; and,

c) inclusion of missing items valued at P497,699 to the PPE accounts.

Licab Qualified/ Modified

Unreliability of Property, Plant and Equipment (PPE) accounts with a recorded value of P163,220,339.93 as of year-end due to


b) non-maintenance of property cards and property, plant and equipment ledger cards; and,

c) inclusion of missing items valued at P497,699 to the PPE accounts.

Llanera Qualified/ Modified

Unreliability of the PPE accounts totaling to P130,547,819.26 due to (a) failure to conduct a complete physical inventory of the assets of the Municipality and maintain property records; and,

Unreliability of the Real Property Tax and Special Education Tax receivable accounts totaling P66,588,609.48 and P 71,438,512.28, respectively, due to erroneous basis in the setting up of the said receivable accounts.

Lupao Qualified/ Modified

Property, Plant and Equipment (PPE) accounts totaling P91,179,041.71 net of accumulated depreciation of P40,465,138.14 as at December 31, 2017 remained doubtful as a result of the continuous failure of the Municipality to maintain complete property records.

Nampicuan Qualified/ Modified

Unreliability of accumulated balance of receivables for Real Property Tax (RPT) and Special Education Tax (SET) with an aggregate amount of P8,583,477.36 as of December 31, 2017 due to incorrect basis in recording receivable at the beginning of CY 2017 and the failure to set up the said receivables for CY 2016, thus affecting the correctness of the receivable account; and,

Unreliability of Property, Plant and Equipment (PPE) with a recorded value of P132,805,741.50 as of December 31, 2017 due to unreconciled difference of P1,448,319.82 between PPE ledger accounts and the submitted Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Pantabangan

Qualified/ Modified

Unreliability of the PPE accounts totaling to P646,905,053.06, due to failure to conduct the actual physical inventory of the assets of the Municipality and maintain property records; and,

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Unreliability of the receivable accounts due to non-recording of Real Property Tax and Special Education Tax Receivables since CY 2007.

Peñaranda

Qualified/ Modified

Doubtful existence and correctness of Property, Plant and Equipment (PPE) valued at P104,870,335.54 due to

a) non-conduct of complete physical inventory;

b) non-submission of corresponding report; and

c) non-maintenance of property records in the Property and Accounting Offices;

Unreliable Cash-in-Bank Local Currency Current Account amounting to P32,756,252.77 due to unreconciled difference of P828,809.26 between the records of the Treasury Department and Accounting Office at year-end;

Discrepancy of P68,414.41 between the year-end balances of the reciprocal accounts, Due from Other Funds and Due to Other Funds amounting to P1,161,794.48 and P1,230,208.89, respectively; and,

Unreliable Real Property Tax (RPT) and Special Education Tax (SEF) receivables amounting of P64,200,540.23 due to incorrect basis in recording at the beginning of the year.

Quezon

Qualified/ Modified

Ddoubtful existence, propriety and correctness of the accounts Property, Plant and Equipment (PPE) amounting to P104,649,203.58 or 69.82% of the total assets of the Municipality;

Failure to accrue to a special trust fund the unexpended balances of Local Disaster Risk Reduction Management Fund (LDRRMF) amounting to P6,717,039.26 thus understating the liability and overstating the government equity accounts of the Municipality by the same amount;

Doubtful validity and correctness of the reported lability accounts of the Municipality amounting to P23,252,418.18; and,

Unsubmitted accounts amounting to P61,619,378.33 as of January 31, 2018, thus the validity and regularity of the transactions and the correctness of the affected revenue, expense, cash advance and other related accounts could not be determined.

Rizal

Qualified/ Modified

Unreliability of the PPE accounts totaling to P113,003,224.14, due to failure to conduct the actual physical inventory of the assets of the Municipality and maintain property records; and,

Unreliability of the Real Property Tax and Special Education Tax receivable accounts totaling P1,634,321.92 each due to erroneous basis in the setting up of the said receivable accounts.

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San Antonio

Qualified/ Modified

Accuracy and reliability of the Real Property Tax/Special Education Tax Receivables totaling to P42,449,351.31 could not be ascertained due to incorrect basis in recording of tax receivables, thus affecting the fair presentation of the accounts;

Physical existence and correctness of Property, Plant and Equipment (PPE) valued at P326,394,559.93 which represent 68.14% of the total assets of the municipality was unreliable due to the failure of the inventory committee to conduct the complete physical inventory, to render corresponding report thereon and reconcile with the accounting record; and,

Transaction documents under General Fund for the month of December 2017 were not submitted to the Office of the Auditor as of this writing, thus review as to regularity and validity of transactions and the correctness of the affected revenue, expenses, cash advance and other related accounts could not be determined.

San Isidro

Qualified/ Modified

Unreliable physical existence and balances of Property, Plant and Equipment accounts valued at P362,271,979.13 due to the failure of the inventory committee to conduct complete physical inventory, to render corresponding report thereon and non-maintenance of Property Cards and PPE Ledger Cards;

Unliquidated cash advances totalling P744,319.49 as of year-end, thereby overstating the assets and understating the recorded expenses; and,

Unsubmitted transaction documents/Disbursement Vouchers from October to December 2017 with an aggregate amount of P17,358,146.54 as of year-end.

San Leonardo

Qualified/ Modified

Physical existence and correctness of Property, Plant and Equipment (PPE) valued at P217,146,076.15 which represent 64.66% of the total assets of the municipality as of December 31, 2017 was unreliable due to the failure of the inventory committee to conduct the complete physical inventory, to render corresponding report thereon and reconcile with the accounting record;

The accuracy and reliability of the Real Property Tax/Special Education Tax Receivables totaling to P 70,601,750.93 as of December 31, 2017 could not also be ascertained due to incorrect basis in recording of tax receivables, thus affecting the fair presentation of the accounts and accumulation of uncollected RPT/SET receivable accounts; and,

Cash advances of P1,622,140.42 for various expenses granted to employees and officials of the municipality during the period from CY 2001 to 2017 remained unliquidated as of December 31, 2017, thereby resulting in overstatement of receivable accounts and understatement of expenses.

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Santa Rosa

Qualified/ Modified

The correctness and existence of Property, Plant and Equipment (PPE) accounts with a reported net book balance of P159,065,607.12, representing 63.87% of the total assets of the agency as of December 31, 2017 remained unreliable due to

a) non maintenance of PPE Ledger Cards and Property Cards by the Accounting and the Property Office;

b) non-conduct of complete physical inventory;

c) non-reconciliation of records between the Accounting and Property Offices; and,

d) non issuance and/or renewal of Acknowledgement Receipt for Equipment (ARE) on some issued PPE: and (e) inaccurate basis in the computation of depreciation.

The Real Property Tax (RPT) and Special Education Tax (SET) receivables with an aggregate amount of P65,706,879.67 as of December 31, 2017 is doubtful due to unreliable basis in its recording at the beginning of the year.

Santo Domingo Qualified/

Modified Cash advances amounting to P502,002.65 remained

unliquidated as of year-end thus resulted in the overstatement of asset and government equity accounts in the financial statements by the said amount; and,

The existence, propriety and correctness of the accounts Property, Plant and Equipment (PPE) amounting to P240,837,118.01 or 53.83% of the total assets of the Municipality as of December 31, 2017 could not be ascertained due to various deficiencies noted in audit .

Talavera

Qualified/ Modified

Doubtful validity of the reported balances of Loans Receivables account amounted to P4,531,357.16 due to the doubtful collectability of the said receivables;

Unreliable balance of Due from National Government Agencies (NGAs) and Due from Local Government Units (LGUs) amounting to P84,748.92, due to the absence of documents supporting the claim with concerned government agencies; and

Unexpended balances of completed projects amounting to P58,293.52 out of funds transferred by NGAs to the Municipality for the implementation of various programs/projects/activities were not returned to source agency or remitted to Bureau of Treasury thus overstating the Due to NGAs account by the same amount.

Talugtug Qualified/

Modified The reliability of the Property, Plant and Equipment (PPE)

accounts totaling P287,378,130.43 at year-end remained doubtful due to failure of the Municipality to

a) maintain complete property records; and,

b) conduct a physical inventory.

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Zaragoza

Qualified/ Modified

Cash advances which comprise of Advances for Operating Expenses and Advances to Officers and Employees with a total amount of P351,122.79 were still unliquidated at year-end, thereby, overstating the assets and understating the expense accounts; and,

Land account of P40,328,610.00 is unreliable due to the failure of the Management to assert ownership on the remaining untitled lots and to faithfully represent the correct carrying value of the land account.

Pampanga

Qualified/ Modified

Significant errors were noted in the audit of accounts such as overstatement of inventories due to inclusion of non-existent inventories totaling P871,244,083.47; and understatement of the Property, Plant, and Equipment (PPE) due to the

a) non-recognition in the books of the local road network totaling P2,962,640,035.58;

b) inclusion of properties amounting to P816,425,539.38 constructed/repaired and purchased by the Province whose benefits accrue to the recipient national government agencies, local government units and schools; and,

c) non-recognition of undetermined value of titled lots and 523 untitled lots owned by the Province as of year-end.

Cities:

Angeles City

Qualified/ Modified

The existence of the Property, Plant and Equipment (PPE) and the accuracy of the year-end account balances thereof with carrying value of P2,669,227,857.92 were not established due to

a) unaccounted property items since CY 2011 inventory count costing at least P36,549,107.28;

b) non-conduct of actual physical count of PPE and submission of an unreliable, inadequately prepared RPCPPE;

c) exclusion from the report on the annual physical count of PPE of City-owned land, land improvements, buildings and structures, and work animals amounting to P831,711,620.55;

d) un-updated property records of the General Service Office and Accounting Office; and,

e) unaccounted prior year’s Construction in Progress account balances included in the year-end balance of P939,993,081.56.

San Fernando City

Qualified/ Modified

The accuracy of the balances of the accounts under Property, Plant and Equipment (PPE) amounting to P1,489,318,005.05 was not established due to:

a) unrecorded 32 motor vehicles due to lack of pertinent information;

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b) land valued at P149,280,000.00 not yet registered in the name of the City;

c) variance amounting to P32,998,460.36 between records of the City General Services Office and the City Accounting Office; and,

d) delayed recognition of fixed assets in the books of account amounting to P696,509.94.

Mabalacat City

Qualified/ Modified

The existence and the accuracy of the Property, Plant and Equipment (PPE) accounts with carrying value of P660,253,221.52 as of December 31, 2017 were not established due to

a) non-submission of report of physical inventory;

b) inability to account for the existence of most vehicles with carrying value of P77,056,180.13 during the physical count made by the Audit Team; and,

c) inadequately maintained subsidiary records and non-reconciliation thereof between the Accounting and the General Service Office.

Municipalities:

Apalit Qualified/ Modified

Management was not able to

a) resolve the discrepancy of P253,781.21 between the accounting and the inventory report in the Property, Plant and Equipment (PPE) account with carrying value of P25.386 million (General Fund);

b) conduct inventory of the PPE in the Special Education Fund amounting to P5.110 million; and,

c) determine the true status, ownership and valuation of 22 parcels of land with assessed value of P2.535 million. The absence of subsidiary records did not permit us to apply alternative audit procedures.

Arayat Qualified/ Modified

Management was not able to ascertain the accuracy and existence of the Property, Plant and Equipment (PPE) accounts with a reported net book value of P63,142,640.47 which represents 53.11% of the total assets of the Municipality because of the failure to conduct physical count and submit an inventory report and to maintain Property Cards and PPE ledger cards by the Property Officer and Municipal Accountant, respectively. Due to inadequacy of records, we were not able to apply alternative procedures to determine the existence and correctness of the accounts.

Bacolor Qualified/ Modified

The accuracy of the reported balances of the accounts under Property, Plant and Equipment (PPE) amounting to P79,046,264.09 could not be ascertained due to the non-conduct of regular physical inventory, non-maintenance of property records, non-disposal of unserviceable assets and non-recording of donated properties.

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Candaba Qualified/ Modified

Management was unable to ascertain the correctness of the PPE accounts in the amount of P122,017,654.55 representing 51.83% of the total assets due to non-recognition in the books of infrastructure assets of undetermined value; non-maintenance of property records; and non-reconciliation of the same with the accounting records.

Floridablanca

Qualified/ Modified

The accuracy of the carrying value of the Property, Plant and Equipment (PPE) amounting to P82,100,860.29 (net of Construction in Progress of P13,694,199.34) as of December 31, 2017 as reported in the financial statements was not established owing to

a) non-reconciliation of the total amount of P51,753,203.22 reported in the inventory report with that of the financial statements of P76,933,598.18 as of July 31, 2017;

b) non-conduct of inventory of the PPE items recorded under Special Education Fund and Infrastructure Assets of the General Fund;

c) untitled and non-declaration of ownership by the Municipality for the reported parcels of land totalling P3,436,016.00;

d) some other deficiencies noted in the RCPPE; and,

e) recognition of acquired PPE items costing P1,913,188.81 as expense instead of assets.

Guagua

Qualified/ Modified

The accuracy of the carrying value of the Property, Plant and Equipment (PPE) amounting to P111,513,169.08 as of December 31, 2017 was not established owing to

a) non-reconciliation of the total amount of P34,458,908.91 reported in the inventory report against the financial statements of P65,980,441.53;

b) non-conduct of physical inventory of the PPE items recorded under Infrastructure Assets; Buildings and Other Structures; and Other Property, Plant and Equipment; and,

c) Absence of Transfer Certificates of Title (TCT) and non-recognition in the books of various parcels of land declared and owned by the Municipality.

Lubao

Qualified/ Modified

The accuracy of the reported balances of the Municipality’s various Property, Plant and Equipment (PPE) accounts with carrying value of P211,334,188.29 or 33.90% of the total assets was not established owing to

a) continuous failure of the Management to 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);

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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 P20,889,090.00.

Macabebe

Qualified/ Modified

Management continued to show lapses on

a) the non-submission of inventory count results ;

b) non preparation of Property Cards and Ledger Cards;

c) inability to substantiate details of land account and accumulated depreciation; and

d) omission to recognize donated vehicles and register them in the name of the Municipality thereby resulting in unresolved prior year’s issues that rendered the existence and reliability of the reported carrying value of PPE account balances aggregating to P84,748,036.43, doubtful.

The absence of adequate PPE subsidiary records did not permit us to apply alternative audit procedures.

Magalang Qualified/ Modified

The accuracy of the Cash account balances totaling P81,479,039.00 was not established due to absence of Bank Reconciliation Statements;

The existence and the correctness of the Property, Plant and Equipment with carrying amount of P103,088,030.15 as of December 31, 2017 were not ascertained by management due to absence of reliable Report on the Physical Count of Property, Plant and Equipment duly reconciled with accounting records; and,

The correctness of the Real Property Tax/Special Education Tax Receivables account totaling P12,637,161.02 could not be ascertained due to non-maintenance of subsidiary ledgers for real property taxpayers and the account balances thereof were not duly reconciled with the Treasury’s records.

Masantol Qualified/ Modified

Management was not able to ascertain the accuracy, correctness and existence of the Property, Plant and Equipment (PPE) accounts with net amount of P72,762,696.97 representing 53% of the total assets owing to its inability to:

a) conduct physical inventory of PPE and submit the report thereon; and,

b) maintain Property Cards and subsidiary records to support the balances of the PPE accounts. The absence of reliable subsidiary records did not permit us to apply alternative audit procedures.

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Mexico

Qualified/ Modified

Significant errors were noted in the audit of accounts such as overstatement of inventories due to inclusion of non-existent inventories totaling P4,106,241.20 and overstatement of the Property, Plant, and Equipment (PPE) due to the

a) failure to close completed projects amounting to P25,946,880.77 to the appropriate asset account,

b) non-recognition in the books of the parcels of land owned by the Municipality and donated hospital equipment and motor vehicle.

Understatement of inter-agency payables by P32,123.40 owing to accounting errors such as incorrect use of accounts and posting errors.

Minalin

Qualified/ Modified

The accuracy of the Property, Plant and Equipment (PPE) accounts with carrying value of P34,186,678.91 as of year-end could not be relied upon owing to the

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;

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 P3,119,641.60 and assessed value of P573,250.00.

Porac

Qualified/ Modified

The accuracy of the Land account booked at P12,185,394.91 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/ Modified

Significant errors were noted in the audit of accounts such as understatement of the inventories account corresponding to the value of the stocks on hand not recognized at year-end and understatement of the Property, Plant and Equipment (PPE) account due to

a) non-recognition of public infrastructures in the books of accounts;

b) accounting errors in the recording of PPE account transactions; and,

Overstatement of the PPE account due to failure to de-recognize in the books the cost of donated properties;

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Failure to establish the year-end balance of the PPE accounts due to absence of property records, non-conduct of inventory count and failure to submit inventory report. .

San Simon

Qualified/ Modified

Management was not able to ascertain the accuracy and existence of the Property, Plant and Equipment (PPE) accounts with carrying amount of P74,183,464.87 which represents 31.67% of the total assets of the Municipality owing to the inability of concerned officials to:

a) conduct physical count and submit the corresponding Report on the Physical Count of PPE (RPCPPE);

b) maintain property records; and,

c) comply with the initial recognition of local road network as part of the PPE accounts.

Due to inadequacy of subsidiary records, we were not able to apply alternative procedures to determine the existence and correctness of the accounts.

Santa Ana

Qualified/ Modified

Significant errors were noted in the audit of accounts such as:

a) overstatement of inventory account due to inclusion of non-existent inventories costing P2,286,023.33;

b) overstatement of the Property, Plant and Equipment (PPE) account due to non-recognition of depreciation on the new municipal building aggregating to P1,121,060.25; and,

c) failure to establish the year-end balance of the PPE accounts due to absence of property records, non-conduct of inventory count and failure to submit inventory report.

Santa Rita Qualified/

Modified The accuracy of the carrying value of the PPE amounting to

P118,568,016.61 (net of Construction in Progress of P22,722,766.94) as of December 31, 2017 was not established owing to:

a) failure to submit a properly accomplished inventory report duly reconciled with the financial statements;

b) non-conduct of physical inventory of the Land, Infrastructure Assets, Buildings and Other Structures, other accounts of Machinery and Equipment, Other Transportation Equipment, Books, and Other Property, Plant and Equipment of the General Fund and PPE items recorded under the Special Education Fund; and,

c) absence of Transfer Certificates of Title (TCT) of various parcels of land declared and owned by the Municipality.

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Santo Tomas Qualified/ Modified

Management was not able to ascertain the accuracy and existence of the Property, Plant and Equipment (PPE) accounts with a reported net book value of P 50,914,068.84 which represents 49% of the total assets of the Municipality for failure to conduct physical count and submit the inventory report thereon; and failure to maintain Property Cards and PPE ledger cards by the Property Officer and Municipal Accountant, respectively.

Sasmuan

Qualified/ Modified

The accuracy of the balances of the Property, Plant and Equipment (PPE) accounts with total carrying value of P22,467,956.70 as of year-end was not established owing to

a) failure of the Management to 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 GSO; and,

d) non-recognition of parcels of land owned by the Municipality.

Tarlac

Qualified/ Modified

Doubtful balance of the cash in bank amounting to P2,010,464,430.45;

Unreliable negative balance of inventory accounts at P190,945,155.27

inaccurate year-end net carrying value of Property, Plant and Equipment (PPE) at P3,644,740,940.43;

Unreconciled balance of Due to BIR account totaling P288,488.17 as at December 31, 2017; and,

Incorrect year-end balance of Due to GSIS account worth P293,655.25; and (f) imprecise balance of Due to PAG-IBIG account of P36,047.88.

City:

Tarlac City

Qualified/ Modified

Inaccuracy of the Property, Plant and Equipment account amounting to P2,996,365,823.92;

Unreliability Construction in Progress account amounting to P160,045,231.14;

Overstatement of Inventory Held for Distribution amounting to P7,330,700.00; and,

Unreliability of year-end cash balance of P710,128,043,25 as at December 31, 2017.

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Municipalities:

Anao Qualified/ Modified

The reported account balance of Property, Plant and Equipment as of December 31, 2017 in the amount of P67,627,793.43 or 58.732% of its total assets of P115,157,868.24 could not be ascertained and remained doubtful. This was due to the continuous failure of the Municipality to conduct a complete physical inventory and non-reconciliation of property and accounting records.

Bamban

Qualified/ Modified

The reported account balance of Property, Plant and Equipment (net of accumulated depreciation) as of December 31, 2017 in the amount of P318,649,149.28 or 71.94% of the total assets is unreliable due to the

a) non-maintenance of complete property records by the Municipality;

b) failure to conduct inventory taking of all PPE; and,

c) non-provision of allowance for depreciation for infrastructure assets.

The validity and accuracy of the total ending balance of P1,102,979.79 of the Real Property Tax Receivables and Special Education Tax Receivables were unreliable because the establishment of the receivables for CY 2017, both in the amount of P6,039,474.50, were based on the Statement of Real Property Tax Collectibles/Targets for the year 2017 contrary to Section 20, Volume I of the Manual on the New Government Accounting System for Local Government Units.

Camiling

Qualified/ Modified

Unreliability of Property, Plant and Equipment account with a carrying value of P664,560,124.01; as of December 31, 2017; and,

Erroneous recognition of Accounts Payable without valid claims and supporting documents in the books of the Municipality in the amount of P6,779,999.60.

Capas

Qualified/ Modified

The Auditor rendered a qualified opinion on the validity, accuracy and existence of the Property, Plant and Equipment (PPE) with a net carrying value of P398,091,963.10 as of December 31, 2017 could not be ascertained due to:

a) non-conduct of physical count of the agency’s property; and,

b) non-maintenance of property records by the Accounting Office and the Municipal Treasurer/designated Property Officer contrary to the provisions of New Government Accounting System (NGAS) Manual for Local Government Units. Furthermore, unserviceable properties remained undisposed, thus the assets were exposed to further deterioration or devaluation.

Unserviceable properties remained undisposed, thus the assets were exposed to further deterioration or devaluation.

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Concepcion Qualified/ Modified

Validity, accuracy and existence of Property, Plant and Equipment (PPE) with a net carrying value of P303,542,711.95 as of December 31, 2017 could not be ascertained due to


b) non-maintenance of property records by the Accounting Office and the Municipal Treasurer/designated Property Officer contrary to the provisions of New Government Accounting System (NGAS) Manual for Local Government Units.


Gerona Unqualified/ Unmodified

La Paz

Qualified/ Modified

Validity, accuracy and existence of the Property, Plant and Equipment (PPE) with net carrying value of P131,036,635.50 as of December 31, 2017 could not be ascertained due to;


b) non-maintenance of property records by the Accounting Office and the Municipal Treasurer/designated Property Officer contrary to the provisions of New Government Accounting System (NGAS) Manual for Local Government Units.


Mayantoc

Qualified/ Modified

Due to the unreliability of Property, Plant and Equipment account with a carrying value of P138,235,070.05 as of December 31, 2017; and,

The land account with a book value of P2,185,553.20 was not supported with any document evidencing ownership.

Moncada Qualified/ Modified

Balance of Property, Plant and Equipment (net of accumulated depreciation) as of December 31, 2017 in the amount of P379,929,261.00 or 83.15% of the total assets was unreliable due to the

a) non-maintenance of property records and subsidiary ledgers for PPE accounts;

b) non-inventory taking of Property; and,

c) non-provision for depreciation for depreciable assets.

Paniqui Qualified/ Modified

Balance of Property, Plant and Equipment (net of accumulated depreciation) as of December 31, 2017 in the amount of P287,003,940.63 or 48.86% of the total assets is unreliable due to the:

a) non-maintenance of property records and subsidiary ledgers for PPE accounts;

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b) non-inventory taking of property; and,

c) non-provision for depreciation for depreciable assets.

Pura Qualified/ Modified

The reported account balance of Property, Plant and Equipment as of December 31, 2017 in the amount of P71,926,947.22 or 57% of its total assets of P126,178,317.58 could not be relied upon and remained doubtful due to Municipality’s continuous failure to conduct a complete physical count of all its properties and non-reconciliation of property and accounting records.

Ramos Qualified/ Modified

The reported account balance of Property, Plant and Equipment (PPE) as of December 31, 2017 in the amount of P170,428,091.83 or 71.54% of the total assets of P238,232,530.85 24 could not be ascertained and remained doubtful due to Municipality’s continuous failure to conduct a complete physical count of all its properties and non-reconciliation of property and accounting records.

San Clemente

Qualified/ Modified

Non-conduct of annual physical inventory count of Property, Plant and Equipment (PPE);

Incomplete property records of the Accounting and Supply and Property offices; and,

The lack of ownership records for the land account, affecting the fairness of presentation of the financial statements, thus the accuracy of the balances of Property, Plant and Equipment accounts totaling P101,933,101.29, net of depreciation, could not be established.

San Jose

Qualified/ Modified

Significant accounting errors and deficiencies were noted in the audit such as

a) inaccuracy and doubtful existence of the Property, Plant and Equipment due to the continuous disregard by the Municipality to maintain reliable property records and reports and conduct a complete physical count of all its properties with a total carrying value of P230,940,559.66 as at December 31, 2017; and,

b) unreliable balances of the Real Property Tax Receivables and Special Education Tax Receivables balance amounting to P4,768,133.05 as at year end owing to invalid basis of calculating and setting up collection target.

San Manuel The accuracy and existence of the Property, Plant and Equipment (PPE) was not established and remained doubtful due to the Municipality’s continuous failure to conduct a complete physical count of all its properties amounting to P 215,818,351.58 or 72.64% of its total assets of P297,120,253.43 could not be ascertained and remained doubtful due to Municipality’s continuous failure to conduct a complete physical count of all its properties and non-reconciliation of property and accounting records.

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Santa Ignacia Qualified/ Modified

Due to deficiencies that misstated the affected account balances.

Victoria

Qualified/ Modified

The reported account balance of Property, Plant and Equipment (net of accumulated depreciation) as of December 31, 2017 in the amount of P162,452,292.89 or 42.23% of the total assets is unreliable due to the

a) non-maintenance of complete property records by the Municipality;

b) the continuous failure of the Inventory Committee to conduct a complete physical count of agency’s properties; and

c) deficient recognition and reporting of the PPE items committed by the Accounting Office.

The validity and accuracy of the accounts’ ending balance of P6,675,832.16 of the Real Property Tax Receivables and Special Education Tax Receivables were unreliable because the setting-up of Real Property Tax Receivables and Special Education Tax Receivables, both in the amount of P6,270,800.45, for CY 2017, was not recorded based on the list duly certified by the Municipal Treasurer.

Zambales Qualified/ Modified

Due to significant unreconciled variance of P6,837,958,557.36 or 80.12% of the net carrying value of the PPE caused by incomplete inventory-taking and erroneous entry made to record the receipt and utilization of PRDP funds understating the Liabilities account by P11,026,513.00

City:

Olongapo City

Qualified/ Modified

The reliability of the recorded Property, Plant and Equipment with a net carrying value of P4,230,024,553.72 remained doubtful due to unreconciled difference of P167,688,167.23 between the ledger balances and the physical inventory report; non-maintenance of subsidiary records, such as Property, Plant and Equipment Ledger Cards (PPELCs) and the inadequacy of provision for accumulated depreciation on all depreciable assets;

The accuracy, existence, and collectability of the Intra-Agency accounts, Inter-Agency Receivables and various Receivable accounts of the City’s four economic enterprises were uncertain due to

a) unreconciled difference of P49,826,777.43 between the Due from Other Funds and Due to Other Funds;

b) dormant, long outstanding and unsubstantiated amounts under the Due from GOCCs, NGAs, LGUs, and NGOs/POs accounts amounting to P64,281,661.87; and,

c) doubtful receivables of the Gordon College, James L. Gordon Memorial Hospital, James L. Gordon Market and Mall and Olongapo City Public Market aggregating to P167,095,074.31 as of year-end.

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Municipalities:

Botolan

Qualified/ Modified

The accuracy and existence of Property, Plant and Equipment (PPE) accounts with a net carrying value of P378,154,499.35 as of year-end were uncertain due to the

a) substantial difference of P369,967,057.68 between the results of physical inventory and the recorded balances; and,

b) inclusion in the Report on Physical Count of Property, Plant and Equipment (RPCPPE) of unserviceable properties subject to disposal, missing and transferred properties, and lost properties already paid/indemnified bloating the PPE by P10,973,644.07.

The collectability and reliability of Receivables amounting to P4,617,004.68 were doubtful due to:

a) existence of dormant and long outstanding livelihood loans with ages ranging from one to 10 years;

b) non-maintenance of subsidiary ledgers (SLs) and absence of documents to substantiate the loans per individual debtor/borrower;

c) overpayment of supplies to DBM; and,

d) unwarranted set-up of receivables for the unreleased funds intended for Farm to Market Road (FMR).

Cabangan

Qualified/ Modified

Failure of the Accounting and General Services Office (GSO) to substantiate the reconciliation report on the PPE variance of P5,726,330.94 between the inventory report and accounting records;

Overstatement of Construction in Progress accounts/Other Infrastructure Assets by P899,006.18 due to non-adjustment of items already distributed to end-users;

Completed projects of P165,176.50 still lodged under the CIP accounts;

Non-transfer of ownership of lot amounting to P272,500.00 affecting the reliability of the Land account balance;

Lost/missing and unserviceable properties totaling to P3,241,975.30 remained in the books of accounts bloating the recorded PPE; and,

Understatement of various assets/expenses and liabilities accounts by P7,279,012.91 due to erroneous recording of assets acquired and expenses incurred out of the Bottom-up Budgeting (BUB) Fund.

Candelaria

Qualified/ Modified

The accuracy and existence of Property, Plant and Equipment (PPE) accounts with a net book value of P135,424,242.22 as of year-end were uncertain due to :

a) non-conduct of physical inventory taking and non-preparation of the Report on Physical Count of Property, Plant and Equipment (RPCPPE);

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b) non-maintenance of complete subsidiary records, such as PPELCs and Property Cards; and,

c) non-recognition of donated assets amounting to P594,940.67 understating the ledger balance of the recorded PPEs.

Castillejos Qualified/

Modified The accuracy and existence of the Municipality’s Property,

Plant and Equipment (PPE) accounts, Inter-Agency Receivables and Liabilities and Long-term Liabilities were uncertain due to

a) unreconciled variance of P755,669.68 between the book balances and physical inventory report on Property, Plant and Equipment;

b) existence of dormant balances under the Due from Other LGUs and Due to NGAs/GOCCs accounts amounting to P553,099.06 and P102,353.15, respectively;

c) fund transfers of P630,000.00 without duly approved MOA as basis for the recognition of receivable from other LGUs;

d) omission to present the current portion of Loans Payable of P161,944.60 among the Current Liabilities; and,

e) non-recognition of interest expenses/accrued interest payable on loans amounting to P30,709.29 as at year-end.

Iba

Qualified/ Modified

The accuracy and existence of the recorded Property, Plant and Equipment (PPE) accounts with a net carrying value of P247,364,791.23 were uncertain due to

a) lack of complete physical inventory report;

b) inability of the Accounting and General Services Office (GSO) to reconcile the huge variance of P161,007,032.11 between the available inventory reports and accounting records; and,

c) non-provision for impairment losses on PPE.

Inventoriable items, such as food supplies and uniforms totaling to P554,220.00 were recorded as outright expenses instead of the appropriate Inventories accounts while receivables from market rental were not recognized understating Receivables and Equity accounts by P4,592,592.00.

Masinloc

Qualified/ Modified

The existence and accuracy of the Property, Plant and Equipment (PPE) accounts totaling to P736,190,775.49 were unreliable owing to the unreconciled variance of P484,882,278.24 between the property records and Accounting ledgers.

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Textbooks, educational materials, uniforms and other supplies totaling to P15,163,794.40 were recorded outright as expenses instead of the appropriate Inventories accounts while receivables from market rental were not recognized totaling to P841,523.67.

Palauig Qualified/ Modified

The accuracy and existence of the Property, Plant and Equipment (PPE) accounts with a net carrying amount of P187,029,138.38 representing 64.10% of total assets, remained doubtful due to the

a) failure to conduct actual inventory-taking of all property, plant and equipment; and

b) omission to provide depreciation for depreciable assets totaling to P155,279,403.55.

San Antonio Qualified/ Modified

The accuracy, existence and reliability of the recorded Property, Plant and Equipment valued at P224,748,843.93 could not be ascertained due to absence of reconciled property and subsidiary records and complete report on the results of physical inventory at year-end.

San Felipe

Qualified/ Modified

Misstatements on the Assets and Equity accounts resulting from the

a) erroneous recording of the Disaster and Response Equipment, acquired out of the LDRRMF for P2,825,000.00, to the Trust Liabilities – DRRM account instead of debiting the Property, Plant and Equipment account;

b) non – recognition of depreciation expenses of P21,187.50 for the above equipment;

c) outright debit to Other Maintenance and Operating Expenses account of the recognition of goods worth P240,800.00 intended for stockpile and relief distribution, in violation of the Perpetual Inventory System; and,

d) absence of subsidiary records with respect to its Property, Plant and Equipment accounts totaling to P118,529,223.49.

San Marcelino

Qualified/ Modified

Unreliability of the recorded PPE owing to absence of a complete physical inventory report and subsidiary records to substantiate the year-end balance of P228,300,084.21;

Recording of land amounting to P16,252,390.00 without evidence of ownership;

Non-set up of liabilities totaling to P6,055,636.56 for complete infrastructure projects;

Erroneous accounting treatment for three completed infrastructure projects amounting to P2,526,502.09 recognized under Repairs and Maintenance Expenses instead of PPE; and,

Failure to substantiate premium contributions of P249,403.62, rendering the ledger balance of the Due to GSIS account doubtful of validity and accuracy.

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San Narciso

Qualified/ Modified

The correctness and existence of Property, Plant and Equipment (PPE) with a net carrying amount of P87,829,862.94 were uncertain due to absence of proof of reconciliation between the balance per books and physical inventory report and failure to dispose unserviceable properties which bloated the PPE account; and,

Continual omission of the Agency to substantiate recorded Inter-Agency Payables (Due to NGAs; GOCCs and Other LGUs) in which about 3.65% are in the state of dormancy casting doubt on the reliability of the year-end balance of P23,193,909.39.

Santa Cruz Qualified/ Modified

The correctness and existence of property, plant and equipment with a net carrying amount of P330,460,227.45 remained unreliable due to the

a) failure to conduct actual inventory-taking of all property, plant and equipment;

b) non-provision of depreciation;

c) non-maintenance of property cards by the Municipal Treasurer; and,

d) failure to dispose unserviceable properties amounting to P4,377,019.95.

Subic

Qualified/ Modified

The existence, completeness, and accuracy of the Property, Plant and Equipment (PPE) accounts, with a net carrying value of P345,782,369.01 as of year-end, were not established due to the

a) inability of the Accounting and General Services Offices to reconcile and adjust the difference between the accounting records and physical inventory report totaling to P40,236,708.69;

b) failure to determine the details and existence of forwarded balances from previous years amounting to P115,346,533.93; and

c) omission to maintain Property, Plant and Equipment Ledger Cards (PPELCs) and Real Property Ledger Cards (RPLCs) for each category of assets;

The year-end balances of the Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable amounting to P41,750,967.34 and P43,191,994.60, respectively, were unreliable due to

a) non-set up of RPT and SET Receivables at the beginning of CY 2017;

b) non-preparation of subsidiary ledgers (SLs) to support the recorded balances; and,

c) non-reconciliation of the receivable accounts with its corresponding deferred accounts showing a difference of P11,159,085.43 as at year-end.

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Region IV-A – CALABARZON

Batangas

Qualified/ Modified

The accuracy and existence of the Property, Plant and Equipment (PPE) account with a net book value of P12,084,273,393.30 were not completely ascertained due to noted discrepancy of P4,814,932.38 between the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and Accounting Records in various equipment accounts, contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I.

Six units of Rescue Ambulance assigned to the different Municipalities thru a Memorandum of Assignment (MOA) was not properly disclosed in the Notes to Financial Statements.

The validity and accuracy of the balance of Land account totalling P5,922,339,782.68 could not be ascertained due to:

a) non-reconciliation of records between the Accounting and General Services Office (GSO), contrary to Sections 114 and 124 of the MNGAS, Volume I;

b) non-disclosure in the financial statements of the down payment made to the Board of Liquidators amounting to P14,535,350.00 for the sale of land that did not materialize, contrary to Paragraph No. 127 (c) of Philippine Public Sector Accounting Standards (PPSAS) 1; and,

c) forfeited lands amounting to P784,711,643.05 were recorded as Other Property, Plant and Equipment, contrary to COA Circular No. 2015-009 dated December 15, 2009, thereby affecting the fair presentation of the Land account in the Financial Statements at year-end.

The balances of the Due from LGUs and Due to LGUs accounts were still unreconciled with the reciprocal accounts of the Cities and Municipalities in the Province of Batangas, thus the validity of the year-end balances amounting to P38,297,816.36 and P62,084,269.47, respectively, cannot be fully ascertained.

Cities:

Batangas City Qualified/ Modified

The total discrepancy of P348,592,451.56 existed between the City’s recorded Property, Plant and Equipment (PPE) accounts and the Report on Physical Count for PPE (RPCPPE) maintained by the General Services Office, thus affecting the fair presentation of the reported year-end balance of PPE accounts totaling P3,231,955,643.35 (net book value), excluding the Construction in Progress accounts of P254,931,309.67.

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The validity, reliability and accuracy of receivables totaling P75,914,694.90 remains doubtful due to absence of complete documents supporting the accounts, and the continued non-collection of these amounts, as the same has been outstanding for more than five years and more, could result in uncertainty of its collection, thus affecting the financial resources of the City, where said amount could have financed the City’s other priority programs and projects that are beneficial to the public;

Stale checks totaling P785,384.40 remained unadjusted in the City’s books of accounts, thus understating/overstating the Cash in Bank and Accounts Payable accounts, respectively, contrary to the Manual on the New Government Accounting System (MNGAS) and Presidential Decree (PD) No. 1445.

The accounting treatment adopted by the City Government of Batangas for the borrowing costs on loans intended for infrastructure assets and its non-disclosure in the Notes to Financial Statements were not consistent with the Philippine Public Sector Accounting Standards 5 on Borrowing Costs, resulting in the misstatements of the Property, Plant and Equipment (PPE) and appropriate Expense accounts.

Lipa City

Qualified/ Modified

Unreliability and doubtful existence of the recorded balances of Property Plant and Equipment (PPE) amounting to P3,090,039,104.97 as of year-end due to

a) misclassification of different PPE accounts amounting to P4,908,307.06;

b) unreconciled discrepancies of P636,228,959.47 between the Accounting and General Services Office;

c) inclusion in the City’s books of accounts the unserviceable properties valued at P974,285.25;

d) unaccounted balances/no supporting schedules of unserviceable properties stated in the summary report of RPCPPE amounting to P57,520,394.43 ; and

e) adjustments/reclassifications made on PPE of P341,965,966.42 for CY 2017 which were not supported by Journal Entry Vouchers (JEVs) and other documentary requirements.

Unreliable year-end balances of the Inventory Accounts of the City in the amount of P50,764,527.77 due to lack of documents and records to support the cost presented in the financial statements, contrary to Section 111 of Presidential Decree (PD) No. 1445 and Sections 114, 115, 119, 120, 121 and 124 of NGAS Manual for LGUs, Volume I, thus affecting the fair presentation and reliability of the City’s financial statements.

Refunds of cash advances of P20,367,643.06 were more than the need for payments or higher by 56 to 100 percent than their liquidations/payments/disbursements of

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P9,911,496.94 due to excessive cash advances granted to the Disbursing Officer (DO) resulting in excessive amount of cash in the custody of the DO averaging to P4,493,406.82 per month, thus may exposed government funds to possible loss or misuse if not properly monitored.

Tanauan City

Qualified/ Modified

The accuracy and physical existence of the net balance of Property, Plant and Equipment of P2,452,102,853.74 representing 69.47% of the total assets is unreliable due to:

a) inclusion of small value items and misclassified accounts totaling to P18,302,307.11 and P12,452,937.26, respectively;

b) presence of disposed and undisposed unserviceable equipment of P1,580,598.50 and P12,710,324.11, respectively;

c) incomplete physical inventory taking, unreconciled records and inventory report not in accordance with the prescribed form, thus contravene COA Circular Nos. 2005-002 and 2015-009, Section 79 of Presidential Decree (PD) No. 1445, Section Nos. 73(a) and 124 of the Manual on New Government Accounting System (MNGAS), Volume 1.

Payments for the progress billing on the Construction of Public Park and Other Related Structures of the New City Hall Building totaling to P60,959,054.25 were erroneously classified to Construction in Progress (CIP)-Building and Other Structures and CIP-Infrastructure Assets accounts instead of CIP-Land Improvements account and Subsidiary Ledger (SL) for each ongoing government projects was not maintained, thus rendered the accuracy and validity of the said accounts doubtful, contrary to Section 111(2) of Presidential Decree (PD) No. 1445 and COA Circular No. 2015-009.

The account balances of Accountable Forms Inventory of P458,178.42 and Office Supplies Inventory of P791,558.75 did not reconcile with the record of the City Treasury and General Services Office (GSO), respectively, whereas Drugs and Medicines Inventory and Animal/Zoological Supplies Inventory have both zero balances, contrary to the Inventory Reports submitted by the City Health and City Veterinary Offices, accordingly with balances of P5,587,465.78 and P1,338,340.00, respectively, as of December 31, 2017, thus the inventory accounts balances are not fairly presented in the Financial Statements and contradicts Section 124 of the MNGAS Volume 1.

Municipalities:

Agoncillo

Qualified/ Modified

The reliability, accuracy and existence of the Property, Plant and Equipment (PPE) account amounting to P91,634,176.34 for General Fund and P510,631.78 for Special Education Fund could not be ascertained due to:

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a) absence of complete and updated inventory

report;

b) inadequate and unreconciled records of the Accounting and the General Services Office (GSO); and

c) failure to maintain subsidiary records of properties; Thus, affecting the fair presentation of the PPE accounts in the financial statements.

The disbursement vouchers and its supporting documents of Accounts Payable totaling P6,673,269.88 for CY 2017 were not presented to the Audit Team for verification thus created doubts as to validity of obligations and its fair presentation in the financial statement.

The reliability of the balances of Real Property Tax of P1,878,654.00 and Special Education Tax Receivables of P1,047,741.33 remained doubtful due to continuous failure of the Municipal Treasurer to provide the Municipal Accountant with certified list of taxpayers and the amount due and collectible during the year and comply with the Modified Accrual Method of accounting Real Property Tax resulting to understatement of receivable and liability accounts in the financial statements.

The balance of the Cash in Bank account of P96,151,356.36 remained unreconciled with the figures of P96,159,846.75 shown in the Bank Reconciliation Statement and with the Municipal Treasurer’s Cash book of P92,390,030.36 resulting to discrepancies of P(8,490.39) and P3,761,356.00, respectively, thus, casted doubts on the accuracy and reliability of the account balance at year-end.

Alitagtag

Qualified/ Modified

The Municipality was unable to substantially address prior year’s issues on PPE such as prioritization of a complete physical count of Municipal properties, inaccurate PPE account balances, and inclusion of barangay structures in the PPE account balances. Hence, the existence, accuracy and reliability of the reported balances of the Property, Plant and Equipment (PPE) accounts with a net book value of P128,392,286.61 as of December 31, 2017 remained doubtful contrary to Sections 114 and 124 of the NGAS Manual for Local Government Units, and Section 79 of P.D. 1445.

The accuracy and reliability of Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable totaling P4,509,889.48 could not be ascertained due to discrepancies with the Municipal Treasurer’s Office’s reported delinquencies of P2,308,788.83 of December 31, 2017, or a total difference of P2,201,100.65 thus, affecting the fair presentation of the financial statements.

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The failure to reconcile the budget and actual amounts of revenue and expenses per Statement of Comparison of Budget and Actual amounts as at December 31, 2017 to the total revenues and expenses per Statement of Financial Performance for the same year and the CY 2017 surplus with the net cash flows from operating activities which casted doubts in the reliability and correctness of the amounts presented in the financial statements.

Balayan

Qualified/ Modified

The accuracy, completeness and existence of the Property, Plant and Equipment accounts amounting to P373,873,585.43 (net of depreciation) or book value of P425,248,637.30 as shown in the Municipality’s financial statements were doubtful due to the discrepancy with the physical count totaling P101,030,217.25;

Properties not subject to depreciation amounting to P32,926,284.25;

Material discrepancy between the total reported property, plant and equipment acquired in Calendar Year 2017 in the cash flow statement of P54,033,430.33 against determined property, plant and equipment increases in the same year of P57,993,970.46 amounting to P3,960,540.13; and,

Non-compliance to COA Circular No. 2015-008 dated November 23, 2015 which requires infrastructure assets particularly road networks to be included in the municipality’s property, plant and equipment and contrary to Philippine Public Sector Accounting Standard (PPSAS) 17.

Balete

Qualified/ Modified

The correctness, reliability and validity of the recorded balances of the Property, Plant and Equipment (PPE) accounts costing P92,109,174.13, with a net book value of P67,260,873.80, as of December 31, 2017 remained doubtful due to:

a) unreconciled discrepancies of P64,480,927.26 between the Accounting and Treasurer’s Office;

b) maintaining unserviceable properties as stated in the Treasurer’s Office inventory report with estimated amount of P1,421,654.75; and

c) improper format of Report on Physical Count of Property, Plant and Equipment (RPCPPE), contrary to various rules and regulations.

The continuous failure of the Municipality to establish the details of various accounts with an aggregate amount of P10,529,244.43, for lack of records and/or which have been dormant for years, has rendered the validity of the recorded balances doubtful.

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The prescribed road networks ledger and property card for all roads and its components were not prepared and maintained by the Accounting Office and the Treasurer’s Office, respectively, due to the non submission of the complete description and cost segregation of road components for road projects by the Engineering Office to their office;

No Report on Local Road Network was rendered by the Treasury’s Office at year-end; Report on the Physical Count of the Road Network System was not also submitted by the Inventory Committee to the Audit Team; and

The Road Networks account was not properly disclosed in the Notes to the Financial Statements, thus, casting doubts on the validity, accuracy and existence of the recorded Road Networks of P9,056,265.92, as of December 31, 2017, aside from contravening the various provisions of COA Circular No. 2015-008 dated November 23, 2015.

Bauan

Qualified/ Modified

Valuation and existence of Property, Plant and Equipment (PPE) with a reported gross value of P821,150,937.01 and an accumulated depreciation of P303,309,276.99 could not be ascertained due to:

a) existence of P197,157,474.41 variance between the records of the Accounting and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

b) incomplete maintenance of Property Cards, Property Ledger Cards of PPE accounts and Real Property Ledger Cards;

c) non-disposal of unserviceable properties; and d) missing properties at unaccounted value thereby affecting the fair presentation of the PPE accounts in the financial statements.

Receivables totaling P99,806,616.35 from various debtors remained outstanding for several years due to the failure of the Municipality to adopt efficient and aggressive collection strategies contrary to Sections 35 and 37 of Presidential Decree (PD) No. 1445 thus, casting doubts on the collectability of the accounts and reliability of the balances presented in financial statements, and may further result in the loss of government funds.

Unexpended balances in Due to Other NGAs and Other Payables account under the General and Trust Fund books amounting to P4,090,925.59 and P8,547,427.60, respectively, remained outstanding for several years contrary to Executive Order No. 431, Section 122, paragraph 3 of the Government Accounting and Auditing Manual (GAAM), Volume I, and Section 4.9 and 6.7 of COA Circular No. 94-013 thus, depriving the national government of the opportunity for the immediate use of funds for other priority programs had it been returned by the Municipality to the National Treasury or Source Agencies

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The accuracy of the reflected balances of assets and expenses of the Municipality is doubtful due to outright charging of supplies expense accounts for purchase of various supplies totaling P17,503,747.09 procured in CY 2017 for distribution and use of different offices of the Municipality, and for sale at Bauan General Hospital contrary to Sections 114 and 121 of the New Government Accounting System (NGAS) Manual for Local Government Units (LGUs), Volume I;

Non-reconciliation of RPT Receivable and SET Receivable account balances between Municipal Treasurer and Municipal Accountant’s records resulting to a total difference of P2,203,944.28, thus, affecting the fair presentation of the financial statements; and,

Increase in the reported RPT Delinquency by P2,943,240.40 or 17.61% for CY 2017, thereby showing weakness on the internal control of the Municipality in enforcing its collections.

Calaca

Qualified/ Modified

The accuracy, completeness and existence of Property, Plant and Equipment accounts balances shown in the municipality’s financial statements were doubtful due to the discrepancy with the physical count totaling P23,978,226.02. Moreover, the municipality has yet to comply with the accounting and reporting guidelines on the local roads asset management system provided in Commission on Audit Circular No. 2015-008, thus violated existing accounting standards applied to the local government units affecting fair presentation of the financial statements.

Plant and Equipment totaling P92,558,825.46 were not provided with depreciation, thus understated expenses and overstated revenues and contrary to the provisions of Philippine Public Sector Accounting Standards (PPSAS) 17, its Philippine Application Guidance and COA Circular No. 2015-008. Likewise, analysis of PPE accounts showed that P121,904,977.59 was spent for the procurement of municipality’s properties in Calendar Year 2017 but computation of their increases during year revealed the lesser amount of P121,101,311.10, hence a difference of significant amount of P803,633.49 and cast doubts on the reported property, plant and equipment as of December 31, 2017.

Calatagan Qualified/ Modified

The reliability, existence and accuracy of the Property, Plant and Equipment accounts totalling P198,073,468.16 net of depreciation and Construction in Progress, could not be ascertained due to:

a) continuous failure of the Municipality to conduct a complete physical inventory which resulted in a reported discrepancy of P191,829,399.90 between the latest RPCPPE and financial statements balances;

b) non-identification of missing and unserviceable properties;

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c) absence of reconciliation of accounting and property records;

d) lump sum and unlocated properties amounting to P48,836,734.02 of the PPE balances which remained unaccounted in the books; and,

e) donated eighteen (18) parcels of land which were not reflected in the books or in the Notes to Financial Statement, thereby affecting the fair presentation of PPE accounts in the financial statements.

Cuenca

Qualified/ Modified

Depreciation was not provided for infrastructure assets constructed for barangays totaling P4,331,134.73 resulting in overstatement of PPE accounts and understatement of expenses in the financial statements for the year. Likewise, unserviceable properties of P677,434.64 were still presented as PPE and not yet disposed of contrary to Sections 162 and 163 of COA Circular No. 92-386 dated October 20, 1992 thus overstating the PPE and exposing these assets to further deterioration.

The accuracy and reliability of Real Property Tax (RPT)

Receivable and Special Education Tax (SET) Receivable totaling P3,078,231.34 could not be ascertained due to discrepancies with the Municipal Treasurer’s Office’s reported balance of P3,577,062.90 in their report of deliquent real property and special education taxes of December 31, 2017, thereby incurring a total difference of P498,831.56, thus, affecting the fair presentation of the financial statements.

Cash Flows in the Statement of Cash Flows were not

properly classified thereby affecting cash balances for operatiing and investing activities. Also, the disclosure requirements in the Notes to Financial Statements under the Philippine Public Sector Accounting Standards (PPSASs) and the required pro-forma Notes to Financial Statements prescribed in Section No. 3.4 of COA Circular No. 2016-004 dated September 30, 2016 were not fully observed, thus, affecting the fair presentation of the financial statements and full disclosure on the financial position and performance of the Municipality.

Ibaan

Qualified/ Modified

The reliability and accuracy of the balances of Property, Plant and Equipment (PPE) with a net book value of P102,561,697.70, as of December 31, 2017, could not be determined due to the failure to submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) to the Audit Team. This practice also hindered the reconciliation between the Accounting and Property records thereby affecting the fair presentation of the financial statements; and,

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The Real Property Tax and Special Education Tax Receivables of P18,398,380.68 was not reflective of the Municipal Treasurer’s report on Tax delinquency of P13,581,006.97. Also, the set-up RPT and SET Receivables is not in consonance with the provision of Section 20 of the Manual on New Government Accounting System for Local Government Units (LGUs), Volume I, thus understated the tax receivable and Deferred RPT Income at the end of the year.

Laurel Qualified/ Modified

The accuracy and physical existence of the net balance of Property, Plant and Equipment of P236,034,501.28 representing 51.10% of the total assets is unreliable due to:

a) misclassified accounts totaling P22,541,259.27;

b) non-reconciliation of the accounting and property records with the variance amounting to P197,395,592.01; and,

c) incomplete physical count of PPE and inventory report not in accordance with the prescribed form, thus contravene COA Circular No. 2015-009, Section 79 of Presidential Decree (PD) No. 1445, Section Nos. 73 (a) and 124 of the Manual on New Government Accounting System (NGAS), Volume I.

Accounts Payable with total amount of P30,317.27 which had been outstanding for more than two years and determined to be undocumented remained in the books of the Municipality, contrary to Section 98 of Presidential Decree (PD) No. 1445, thereby overstating the account as of December 31, 2017.

Lemery Qualified/ Modified

The Real Property Tax and Special Education Tax Receivables of P37,418,176.82 were not reflective of the Municipal Treasurer’s report on Tax Delinquency of P58,200,700.42 due to non-submission by the Municipal Treasurer of certified list of taxpayers with the assessed value of the property at the beginning of the year and the absence of supporting subsidiary ledgers pursuant to Section 20 of the NGAS Manual Volume I and Section 114 (2) of PD No. 1445;

Failure of the Municipal Accountant to reconcile the balances of Due from and Due to LGUs with the respective reciprocal accounts in the books of the province as of year-end in the amount of P(2,202,731.79) and P4,360,040.88 with the respective reciprocal accounts in the books of the Province, rendered the balances of the accounts doubtful;

Due from Officers and Employees was used in recording the receivables from the employees who were already separated from service, in the total amount of P7,352,318.57 instead of account “Other Receivable”, resulting to erroneous balance of the two receivable accounts;

a) absence of complete and updated inventory report;

b) inadequate and unreconciled records of the Accounting and the General Services Office; and,

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c) failure to maintain subsidiary records of properties, thus, affecting the fair presentation of the PPE accounts in the financial statements.

There were outstanding accounts payable for more than two years amounting to P7,879,637.14, which remained unreverted to the unappropriated surplus of the General Fund, contrary to Section 98 of PD No. 1445 and prescribed rules in Republic Act (RA) No. 3526 as implemented by Executive Order (EO) No. 109, s.1993, thus casting doubt on their validity and accuracy.

Trust receipts and unexpended balances of aid and financial assistance from different national government agencies totaling P1,433,252.78 were not remitted to the National Treasury and/or reverted to the unappropriated Surplus of the General Fund, contrary to Section 122 of the Government Accounting and Auditing Manual (GAAM) and Sections 4.9 and 6.7 of COA Circular No. 94-013 dated December 31, 1994.

Interest Income in the amount of P51,254.49 from the Trust Fund books was treated as Due to Other Funds in the same fund with contra account Due from Other Funds in the General Fund books and was not transferred at the end of the year, contrary to Section 112 of Presidential Decree (PD) No. 1445 and as prescribed by COA Circular No. 2004-008 dated September 20, 2004, thus resulting in the understatement of the Income account in the General Fund.

Special Accounts in the General Fund were still not maintained for the economic enterprises and utilization of the 20% Development Fund by the Municipality, contrary to Section 313 of Republic Act (RA) No. 7160 and Chapter 6 of the Manual on New Government Accounting System (NGAS), Volume I, thus, operating performance and viability could not be ascertained and monitored.

Lian Qualified/

Modified The reliability, existence and accuracy of the Property, Plant

and Equipment accounts totalling P233,732,700.06, gross, could not be ascertained due to:

a) failure of the Municipality to conduct a complete physical inventory which resulted in a reported discrepancy of P222,804,927.60 between the latest RPCPPE and financial statements balances;

b) absence of reconciliation of accounting and property records; and ,

c) incomplete property cards maintained by the General Services Officer (GSO) and non-updating of property ledger cards by the Municipal Accountant, and d) non-inclusion of the donated vehicle in the books, thereby affecting the fair presentation of PPE accounts in the financial statements.

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Lobo

Qualified/ Modifd

The accuracy , existence and reliability of Property, Plant and Equipment (PPE) with a reported gross value of P138,417,008.40 and accumulated depreciation of P43,101,693.99 remained doubtful due to:

a) inclusion of unverified beginning balances totaling

P13,038,403.46 in the reports submitted by the Municipal General Services Officer and Municipal Accountant signifying that there were no proper records maintained by both offices;

b) continuous existence of various items that should not be capitalized as part of PPE accounts;

c) recurrent failure of the Municipal Accountant to

recognize assets sourced out of Trust Fund; and

d) inclusion of unserviceable properties amounting to

P8,725,382.47 in the inventory reports and in the books, contrary to the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I and Presidential Decree (P.D.) No. 1445, otherwise known as the Government Auditing Code of the Philippines, thus, affecting the fair presentation of PPE accounts in the financial statements.

The accuracy and reliability of the reported year-end

balances of Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable as of December 31, 2017 as well as the Municipality’s collection efficiency on Real Property Taxes could not be ascertained due to:

a) unreconciled difference of P530,555.12 between the

balances of Real Property Tax (RPT) Receivable of P587,491.44 and Special Education Tax (SET) Receivable of P56,936.32 and non-reconciliation of RPT Receivable and SET Receivable account balances between the Municipal Treasurer and Municipal Accountant’s records of P2,353,612.28 and P644,427.76, respectively, resulting to a total difference of P1,709,184.52 as of December 31, 2017, thus, affecting the fair presentation of the financial statements; and

b) an increase in the reported RPT Delinquency by

P370,626.06 or 18.69% for CY 2017 contrary to

Sections 258 and 269 of Republic Act (RA) No. 7160,

thereby showing weakness on the internal control of

the Municipality in enforcing its collections.

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Mabini

Qualified/ Modified

The existence and reliability of Property, Plant and Equipment worth P292,072,985.92, net of depreciation, were doubtful due to failure of Management to support it with a complete and accurate Report on Physical Count of Property, Plant and Equipment affecting the fair presentation of the financial statements;

The reliability and accuracy of Real Property Tax Receivable and Special Education Tax Receivable amounting P6,195,026.50 and P8,654,932.57, respectively, could not be ascertained due to non-reconciliation with the Municipal Treasurer’s Office total delinquent real property and special education taxes as of December 31, 2017, thus affects the fair presentation of the financial statements;

The balances of Due From and Due to LGUs accounts of the Municipality as of year-end showed discrepancies with their respective reciprocal account in the books of the Province amounting to P1,910,722.99 and P1,410,042.42, respectively, thus, rendering the balances of the accounts doubtful and affects the fair presentation in the financial statements; and,

Budget and actual amounts of revenue and expenses per Statement of Comparison of Budget and Actual Amounts (SCBAA) as of December 31, 2017 does not reconcile with the figures presented in the Statement of Financial Performance for the same year while CY 2017 surplus does not reconcile with the net cash flows from operating activities thereby casting doubts in the reliability and correctness of the amounts presented in the financial statements.

Malvar Qualified/ Modified

The correctness, reliability and validity of the recorded balances of the Property, Plant and Equipment (PPE) accounts with a net book value of P355,058,383.01 as of December 31, 2017 remained doubtful due to

a) unreconciled discrepancies of P295,079,007.92 between the Accounting and Treasurer’s Office;

b) inclusion in the Municipality’s books of accounts of unaccounted/unclassified properties valued at P54,373,083.56;

c) maintaining unserviceable properties as stated in the Treasurer’s Office inventory report with estimated amount of P1,856,117.83;

d) improper format of Report on Physical Count of Property, Plant and Equipment (RPCPPE); and

e) adjustments/reclassifications made on PPE of P36,301,790.68 for CY 2017 which were not supported by Journal Entry Vouchers (JEVs) and other documentary requirements, contrary to various rules and regulations.

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The prescribed road networks ledger and property card for all roads and its components were not prepared and maintained by the Accounting Office and the Treasurer’s Office, respectively, due to the non submission of the complete description and cost segregation of road components for road projects by the Engineering Office to their office; no Report on Local Road Network was rendered by the Treasury’s Office at year end; Report on the Physical Count of the Road Network System was not also submitted by the Inventory Committee to the Audit Team; and the Road Networks account was not properly disclosed in the Notes to the Financial Statements, thus, casting doubts on the validity, accuracy and existence of the recorded Road Networks of P1,371,718.90, as of December 31, 2017, aside from contravening the various provisions of COA Circular No. 2015-008 dated November 23, 2015;

The Municipality still failed to reconcile the recorded balance

of the Due to LGU (Province) amounting to P179,377.35 with the balance of its reciprocal receivable accounts in the books of the Provincial Government amounting to P1,562,604.12. Moreover, the payable accounts of the Provincial Government amounting to P1,460,963.09 has no corresponding receivable account in the records of the Municipality placing doubt on the accuracy and fairness of the recorded balances of the said accounts in the financial statements;

Cash Advances granted in CY 2017 and previous years to officials and employees totaling P194,990.00 and P15,000.00 in the General and Special Education Funds, respectively, remained unliquidated as of year end, due to the failure of the municipal officials to impose strict policies on timely submission/liquidation of their cash advances, thus understating the expense account and overstating the Due from Officers and Employees account and exposing government funds to possible loss or misuse;

Cash Advances granted to Officers and Employees during

the year for seminars and trainings amounting to P1,202,505.58 were recorded as Due from Officers and Employees contrary to COA Circular No. 2015-009 dated December 1, 2015, thus, the account Advances to Officers and Employees was understated and the account Due from Officers and Employees was overstated and liquidation and monitoring of the cash advance were not properly undertaken; and,

The Municipality erroneously recorded the warranty deposits

posted by various suppliers and contractors in the form of cash retention money amounting to P5,537,287.89 to Other Payables account, contrary to COA Circular No. 2015-009 thereby affecting the reliability and fair presentation of the financial statements.

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Mataas na Kahoy

Qualified/ Modified

The existence, accuracy and reliability of the reported balances of the Property, Plant and Equipment (PPE) accounts with a net book value of P84,492,263.10 as of December 31, 2017 remained doubtful due to the Municipality’s failure to substantially address prior year’s issues on PPE such as prioritization of a complete physical count of Municipal properties, inaccurate PPE account balances and non-disposal of unserviceable assets contrary to Sections 114 and 124-125 of the NGAS Manual for Local Government Units, and Section 79 of PD 1445.

The Municipality’s financial statement balance of Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable totaling P1,075,999.60 were not reconciled with the delinquent taxes per treasury records amounting to P1,619,932.16 as of December 31, 2017, thus raising doubts on its accuracy, reliability and fair presentation in the financial statements.

The disclosure requirements in the Notes to Financial Statements under the Philippine Public Sector Accounting Standards (PPSASs) and the required pro-forma Notes to Financial Statements prescribed in Section No. 3.4 of COA Circular No. 2016-004 dated September 30, 2016 were not fully observed, thus, affecting the fair presentation of the financial statements and depriving users of relevant information on the financial position and performance of the Municipality.

Nasugbu Qualified/ Modified

The Property, Plant and Equipment accounts totalling P670,289,474.30, net of depreciation, has a reported discrepancy of P95,476,474.05 between the latest physical count and financial statement balances due to the continuous failure of the Municipality to conduct a complete inventory of all its properties and absence of reconciliation between accounting and property records;

Net book value of unserviceable properties which were already disposed were still recorded and included, thereby affecting the fair presentation of PPE accounts in the financial statements;

Collections of Real Property Tax (RPT) and Special Education Tax (SET) Receivables have increased by P6,504,543.26 compared to previous year; however the reported year-end balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P382,650,164.78 have also increased by 9.7%, or P33,880,360.50 from last year’s balance of P348,769,804.28. Likewise, the balances remained doubtful due to booking up of receivables based on estimates and non-reconciliation of receivable accounts between Accounting and Treasury departments.

Padre Garcia Qualified/ Modified

The existence and reliability of the Property, Plant and Equipment with a net book value of P239,216,233.21 cannot be ascertained due to:

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a) incomplete information on the status of property and equipment enumerated in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

b) non inclusion of the prior years’ Public Infrastructures to PPE; and,

c) non submission of updated Acknowledgement Receipt for Equipment, thus affecting the fair presentation of this account in the financial statements.


The reliability and accuracy of the balances of Property, Plant and Equipment (PPE) accounts with a carrying amount of P271,683,901.84 as of December 31, 2017 could not be ascertained due to:

a) non-reconciliation of records between the Office of the Accounting and General Services;

b) supporting schedules not tally with the balances presented in the financial statements;

c) non-recognition of the Construction-in-Progress during progress billing; and,

d) non inclusion of prior years' Public Infrastructures-Road Networks to PPE, thus affecting the fair presentation of these accounts in the financial statements.

The accuracy and correctness of the Cash in Bank balance totaling P196,706,203.01 as of December 31, 2017 cannot be ascertained due to:

a) variance of P558,441.52 between the cash book and general ledger; and,

b) current and prior year’s book and bank reconciling items were not immediately adjusted and/or remained unadjusted items, thereby affecting the fair presentation of this account in the financial statements.

The tax receivables set up were based on the total assessed value of real property in the Assessment Roll due to the absence of the Certified List of Taxpayers.

The Real Property Tax (RPT) Receivables and Special Education Tax (SET) Receivables amounting to P20,024,667.47 and P20,364,457.97, respectively, were not reconciled with the Deferred Real Property Tax Income and Deferred Special Education Tax Income amounting to P20,024,466.47 and P20,592,355.42, respectively, or a total difference of P210.00 in the General Fund and P227,897.45 Special Education, thus the validity, accuracy and reliability of the asset and liability accounts in the financial statements could not be ascertained, contrary Section 20 of the Manual on New Government Accounting System for Local Government Units (LGUs), Volume.

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The balances of Due from and Due to LGUs accounts as of year-end in the amount of P1,004,245.29 and zero, respectively, were not reconciled with the respective reciprocal accounts in the books of the Province, thus rendered the balances of the accounts doubtful.

San Jose Unqualified/

Unmodified

San Juan

Qualified/ Modified

The difference of ₽4,817,573.32 between the total reported balance of Property, Plant and Equipment Report (PPE) accounts of ₽658,248,316.51 and the corresponding Report on the Physical Count of Property, Plant and Equipment (RPCPPE) of ₽663,065,889.83, and a direct debit to Road Networks account of progress payment to a road project instead of to Construction in Progress (CIP) account affected the fair presentation of the Property, Plant and Equipment accounts, contrary to Sections 50 and 124 of the Manual on National Government Accounting System (MNGAS) and the Municipality’s accounting policy; and,

The existence, validity and valuation of the total outstanding receivables of P37,144,623.39 were doubtful due to unreconciled difference of P15,913,040.48 on the reported account balances of Real Property Tax (RPT)/Special Education Tax (SET) Receivables of the Accounting and Municipal Treasury Offices, and non-existence of documents supporting the receivables of P213,285.84, thus affecting the fair presentation of receivable accounts on the Municipality’s financial statements at year end;

San Luis Qualified/

Modified The accuracy, completeness and existence of the Property,

Plant and Equipment accounts amounting to P82,901,787.23 (net of depreciation) or book value of P99,205,850.34 as shown in the Municipality’s financial statements were doubtful due to the discrepancy with the physical count totaling P10,745,475.07; properties not subject to depreciation amounting to P32,806,578.04; material discrepancy between the total reported property, plant and equipment acquired in Calendar Year 2017 in the cash flow statement of P29,407,641.67 against determined property, plant and equipment increases in the same year of P46,382,334.67 amounting to P16,974,693.00; and non-compliance to COA Circular No. 2015-008 dated November 23, 2015 which requires infrastructure assets particularly road networks to be included in the municipality’s property, plant and equipment and contrary to Philippine Public Sector Accounting Standard (PPSAS) 17.

San Nicolas Qualified/

Modified The correctness and existence of the Property, Plant and

Equipment accounts amounting to P66,959,166.87 could not be ascertained due to the failure of the OIC-General Service Officer to submit the Report on the Physical Count of Property, Plant and Equipment (RCPPE) to the auditor within the prescribed period, contrary to Section 122, paragraphs 1 and 2 of PD 1445 and Section 124, Volume I of

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the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), thus, preventing the auditor to perform thorough audit to ascertain the correctness of PPE account in the financial statements as of the year-end; and,

Due to continuous disregard of the Municipal Accountant to set-up Real Property Tax (RPT) and Special Education Tax (SET) receivables, contrary to Section 20 Volume 1 of the New Government Accounting System (NGAS) manual for Local Government Units (LGUs) resulted to understatement of receivable and deferred income accounts and affecting the fair presentation of financial statements.

San Pascual

Qualified/ Modified

The propriety and reliability of the balances of Property, Plant and Equipment (PPE) accounts as of year-end amounting to P628,754,257.22 gross with an accumulated depreciation of P243,232,683.71 remained unreliable due to unreconciled differences between accounting and GSO records and recorded items amounting to P171,303,008.00 found in both reports not specific as to detail/description, physical attributes and location of the PPE hence doubtful as to existence;

Unreconciled balances of the reciprocal accounts for Due from/Due to LGUs (Province) and Due from/Due to Other Funds maintained in the books of the municipality disclosed net discrepancies of P95,130.18 and P(90,500.00) for Due from/Due to LGUs (Province) and P416,748.15 for the latter, thus results to the unreliable balances of the affected accounts in the financial statements;

The Municipality’s financial statement balances of Real Property Tax Receivable (RPT) and Special Education Tax (SET) Receivable totaling P9,124,540.16 were not reconciled with the Summary of Tax Delinquencies as of December 31, 2017 of P13,631,081.28, thus raising doubt as to its accuracy and reliability affecting the fair presentation of these accounts in the financial statements;

The Municipality’s unexpended balance of the Quick Response Fund (QRF) and the DRRMF-MOOE of the Local Disaster Risk Reduction Management Fund (LDRRMF) at year-end totaling P1,780,786.64 was not transferred to the Special Trust Fund in the Trust Fund books exposing such for possible utilization for purposes that are not disaster related and resulting to understatement of expense and liability accounts as of year-end. Moreover, subsidiary ledger for Trust Liability - DRRM account balance is not maintained by year of transfer, hence, no means to determine the amount due for reversion to general fund if unutilized after five years contrary to COA Circular No. 2012-002; and,

Other Receivables in the Special Education Fund amounting to P5,189,799.72 arising from the implementation of “Study Now, Pay Later Program” booked under Special Education Fund remained long outstanding or dormant in the books for several years.

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Santa Teresita

Qualified/ Modified

The existence of Property, Plant and Equipment totaling P8,697,766.40 were not established due to lack of reconciliation efforts for the P7,770,862.33 difference between results of physical count and accounting records and missing properties totaling P926,904.07, thereby affecting the fair presentation of the accounts in the financial statements. Also, unserviceable properties totaling P3,298,185.45 were still presented as PPE and not yet disposed, thus, exposing these assets to further deterioration;

Seven parcels of land owned by the Municipality with fair value of P9,037,586.20 were not recognized in the books resulting in an understatement of the land account presented in the financial statements as of December 31, 2017. Moreover, twenty four parcels of land recorded as asset of the Municipality were not yet covered by Certificate of Title in violation Article 47(c) of Administrative Order No. 270, Section 148 of COA Circular No. 92-386, exposing these properties to possible third party claims and unlawful occupants;

The reliability of Real Property Tax Receivable and Special Education Tax Receivable totaling P8,064,756.20 could not be ascertained due to discrepancies by P2,914,573.38 with the Municipal Treasurer’s Office total reported delinquent real property and special education taxes as of December 31, 2017 of P10,979,329.58, thus affects the fair presentation of the financial statements;

Funds held in trust by the Municipality incurred a cash deficit of P2,054,256.10 as of December 31, 2017 implying a deviation on proper monitoring of the expenses incurred out of the fund which should have been utilized only for specific purposes as provided by Section 309(b) of RA 7160;

Budget and actual amounts of expenses per Statement of Comparison of Budget and Actual Amounts (SCBAA) as of December 31, 2017 does not reconcile with the figures presented in the Statement of Financial Performance for the same year while CY 2017 surplus does not reconcile with the net cash flows from operating activities thereby casting doubts in the reliability and correctness of the amounts presented in the financial statements; and,

Cash outflows of P21,100,700.69 for acquisition of property, plant and equipment were not properly presented as investing activities in the Statement of Cash Flows for the year ending December 31, 2017 while the disclosure requirements in the Notes to Financial Statements under the Philippine Public Sector Accounting Standards (PPSASs) and the required pro-forma Notes to Financial Statements prescribed in Section No. 3.4 of COA Circular No. 2016-004 dated September 30, 2016 were not fully observed, thus affecting the fair presentation of the financial statements and depriving users of relevant information on the financial position and performance of the Municipality.

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Sto. Tomas Qualified/ Modified

The Real Property Tax (RPT)/Special Education Tax (SET) Receivables account balances amounting to P113,024,437.60 and P108,267,185.52, respectively, represent real property tax collectibles for CY 2018, were not in accordance with Sections 19 and 20 of the New Government Accounting System (NGAS) Manual, Volume I, thus overstated the financial statements as of December 31, 2017;

Collection of real property taxes totaling to P9,840,303.53 was inadvertently taken up as credit to Other Deferred Credits account instead of Deferred Real Property Tax Income/Deferred Special Education Tax Income, of which the amount of P3,854,413.55 remained unadjusted for almost three (3) years, while the amount of P5,985.889.98 were payment in advance, thus affected the fair presentation of the financial statements;

The accuracy of Inventory Accounts totaling to P24,361,336.36 were overstated by P13,520,755.62 and understated the Government equity/expense account by P12,191,605.62 due to the inability of the Officer-In-Charge, General Service Office/Municipal Treasurer to prepare and submit the Summary of Supplies and Materials Issued (SSMI) together with the Requisition Issue Slip to the Municipal Accountant for recording issuances in the books of the agency. Likewise, the inventory account included musical equipment totaling P1,329,150.00, thus understated the Property, Plant and Equipment, Accumulated Depreciation and Government Equity/expense accounts;

The account balance of Property, Plant and Equipment (PPE) amounting to P1,564,712,765.54 remained doubtful of validity and accuracy, contrary to Section 156 of the Manual on the New Government Accounting System (NGAS) for LGUs and Manual on Property Custodianship, due to repeated failure to create Inventory Committee who will conduct physical inventory, prepare the Report on Physical Count on Property, Plant and Equipment (RPCPPE) and reconcile the variance amounting to (P93,929,002.85) with the Accounting and Property Records. Further, the development cost of the operating system taken up in CY 2015 totaling P3,461,110.80 remained in the Construction in Progress – Infrastructure Assets account as of December 31, 2017, overstated the PPE account and understated the Intangible Asset - Computer Software account both by the same amount; and,

Accounts Payable balance of P25,795,590.16 as of December 31, 2017 was overstated by P1,035,614.97 due to continuous recognition of obligation without valid claims and documents to warrant payment of claims for more than two years defying Section 98 of Presidential Decree (PD) No. 1445.

Taal Qualified/ Modified

The accuracy, existence and reliability of Property, Plant and Equipment worth P258,538,177.52, gross, could not be ascertained due to:

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a) partial conduct of physical count and incomplete preparation of Report of Physical Count of Property, Plant and Equipment (RPCPPE) of various accounts totaling P119,036,900.30;

b) discrepancies between the RPCPPE submitted by the General Services Office (GSO) and the Subsidiary Ledgers (SL) of the Accounting Department amounting to P106,564,797.98;

c) presence of beginning/unidentified balances of PPEs in the Accounting’s SL totaling P35,673.978.76;

d) existence of negative balances in various PPE accounts with a net amount of P643,311.52;

e) non-recognition of depreciation for PPEs with a total cost of P28,866,843.26;

f) existence in the lapsing schedule of PPE of various unserviceable properties amounting to P668,289.35;

g) various PPEs amounting to P20,725,543.00 which were recorded under the motor vehicles account consists of various machineries and equipment which could be classified to other PPE accounts; and,

h) PPE Ledger Card and Property Card were not maintained while Acknowledgement Receipt of Equipment was not updated, thereby affecting the fair presentation of the PPE accounts in the financial statements.

The accuracy and reliability of Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable totaling P12,594,896.28 could not be ascertained due to their discrepancies with the Municipal Treasurer’s Office reported balance of P14,039,545.04 in their delinquent real property and special education taxes as of December 31, 2017, thereby incurring a total difference of P1,444,648.76, thus, affecting the fair presentation of the financial statements.

Report of RPT Delinquency as of December 31, 2017 showed an ending balance of P22,355,891.74, contrary to Sections 258 and 269 of Republic Act No. (RA) 7160, thereby showing weakness on the internal control of the Municipality in enforcing its collections.

The reliability, validity and correctness of the year-end balances of accounts Due from LGUs and Due to LGUs of the Municipality amounting to P0.00 and P1,299,919.69,

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; and,

b) presence of long outstanding unaccounted/unsupported balance of Due to LGUs of

P118,607.81, thus affecting the fair presentation of the

financial statements.

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The accuracy, existence and reliability of Office Supplies Inventory, Accountable Forms, Plates and Stickers Inventory and Drugs and Medicines Inventory totaling P5,244,591.74,

could not be ascertained due to:

a) failure to conduct physical count and prepare the Report of Physical Count of Inventories (RPCI) as of December 31, 2017;

b) procurement of various supplies and materials P1,674,531.82 were charged as an outright expense

and was not coursed through proper inventory account; and,

c) Stock Cards and Supplies Ledger Cards were not maintained by the GSO and Accounting Office, respectively, thereby affecting the fair presentation of the inventory accounts in the financial statements.

Various disbursements amounting to P1,435,535.71 that are obligated as of year-end and recorded under Accounts Payable and Due to Officers and Employees account were not submitted to COA for review and verification of supporting documents, contrary to Section 39 of Presidential Decree (PD) No. 1445, thereby casting doubt on the legality of the claims and the propriety of the obligations recorded; and,

Accounts Payable accounts amounting to P346,526.55 and Due to Officers and Employees account totaling P1,001.03 had been outstanding for more than two years and were not reverted to the unappropriated surplus of the Municipality, contrary to Section 98 of P.D. No. 1445, thus overstating the affected liabilities account and depriving the constituents of additional funds which could have been used to fund government projects and programs.

Talisay Qualified/ Modified

The accuracy and physical existence of the net balance of Property, Plant and Equipment of P313,019,477.31 representing 73.58% of the total assets of the Municipal Government of Talisay is unreliable due to:

a) presence of undisposed unserviceable equipment of P8,589,515.11;

b) non-reconciliation of the Accounting and Property records of the variance amounting to P239,550,763.76; and,

c) non-preparation of Report on Physical Count on Property, Plant and Equipment (RPCPPE).

Non-enforcement of appropriate sanctions to all Accountable Officers (AOs) who continuously disregard or failed to settle their outstanding cash advances despite demand as provided under COA Circular No. 97-002, resulted in the misstatements of the financial statements and possible loss/misuse of government funds due to unliquidated cash advances of P1,813,863.81 net of negative balances as of December 31, 2017

.

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Taysan Qualified/ Modified

Probability and measurability criterion of measuring assets were not met for unidentified, un-inventoried, missing, donated, demolished, stolen PPE’s and those transferred to Barangays resulting in overstatement of Property, Plant and Equipment amounting to P76,168,601.70, contrary to PPSAS 17 rendering the PPE account balance inaccurate; and,

Inter-agency payable account in the Municipality’s financial statements were unreliable and inaccurate due to discrepancies in the amount P4,767,899.81 of Due to LGUs account with their reciprocal accounts in the Province, thereby affecting the fair presentation of the financial statements.

Tingloy

Qualified The submitted Report on Physical Count of Property, Plant and Equipment (RPCPPE) of the municipality is incomplete of significant data relative to the count of PPE items like property number and quantity of the counted items casting doubts whether actual physical count was conducted;

Some PPEs of the municipality were not issued with corresponding Acknowledgment Receipt for Equipment (ARE) contrary to Sec. 123 of NGAS Manual for LGUs Volume I;

Various IT Equipment acquired in CY 2014 to 2016 costing P610,036.00 with consumed useful life ranging from 1 to 3 years per accounting’s schedule were reported unserviceable hence, not compensating the utilized funds to acquire these assets with the benefits expected for an estimated useful life of at least 5 years;

The propriety and reliability of the balances of Property, Plant and Equipment (PPE) accounts as of year-end amounting to P41,372,811.71 gross with an accumulated depreciation of P20,603,793.87 remained unreliable due to non-recording of assets totaling P218,105.00 sourced out of Trust Fund;

The cash position of the Municipality under Special Education Fund books having a current balance of P37,446.17 was not sufficient to cover current commitments at year-end amounting to P66,726.73 resulting in cash deficit by P29,280.56 implying inappropriate cash management;

Cash deficit of P152,728.76 was also incurred under Trust Fund implying deviation on proper monitoring of the expenses incurred out of the fund which should have been utilized only for specific purpose as provided by Section 309(b) of RA No. 7160;

The municipality was unable to substantially address prior year’s issues on failure to set up Real Property Tax (RPT) and Special Education Tax (SET) Receivables at the beginning of the year and failure to adopt the Modified Accrual method in accounting for real property taxes which is in contrary to Section 19 of NGAS Manual, Volume I, hence, rendering the accuracy of the affected account balances presented in the financial statements unreliable;

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Disbursement Vouchers (DVs) totaling P494,807.81 were not submitted to this Office for audit in violation of COA Circular Nos. 2009-006 and 95-006, respectively, and Section 100 of Presidential Decree (PD) No. 1445, hence accuracy, validity and reliability of transactions could not be determined;

Liquidation Reports for cash advances totaling P114,600.00 were not submitted to this Office for audit in violation of COA Circular Nos. 97-002 and 95-006, hence prevented the audit team to determine the accuracy and validity of the settlements made by the accountable officers; and,

Audit of the Local Disaster Risk Reduction Fund of the Municipality of Tingloy disclosed lapses and inconsistencies particularly on:

a) having erroneous balance of Trust Liability-DRRM as of year-end affecting the accuracy and reliability of the said account as presented in the financial statements;

b) unimplemented projects amounting to P600,000.00 depriving the constituents of the benefits that could have been derived therefrom;

c) incomplete supporting documentation; and

d) unsubmitted Disbursement Vouchers casting doubt on the validity, propriety and reliability of claims, likewise, showing weakness on the internal control adopted by the Municipality.

Tuy Qualified/ Modified

The financial statement balances of Property, Plant and Equipment (PPE) accounts totaling to P295,855,448.39 (gross) in the financial statement has a discrepancy of P133,376,233.93 as against the latest physical count due to incomplete inventory taking and absence of reconciliation of accounting with property records, thereby affecting the fair presentation of PPE accounts in the financial statements;

Unserviceable properties with gross amount of P2,576,752.55 remained undisposed at year-end, thereby causing further deterioration or wear and tear, contrary to Section 379 of RA 7160;

The accuracy and reliability of the Municipal Accountant’s recorded Real Property Tax (RPT) Receivable of P12,809,056.55 and Special Education Tax (SET) Receivable of P12,824,380.76 totaling P25,633,437.31 could not be ascertained due to its discrepancies with the Municipal Treasurer’s Office reported balance of P33,499,331.29 in their delinquent real property and Special Education taxes as of December 31, 2017, thereby incurring a total difference of P7,865,893.98, thus, affecting the fair presentation of the financial statements.; and,

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Report of RPT Delinquency showed an ending balance of P33,499,331.29 or an increase of P9,890,324.81 from its previous balance of P23,609,006.48, contrary to Section 269 of Republic Act No. (RA) 7160, thereby showing weakness on the internal control of the Municipality in enforcing its collections.

Cavite Qualified/ Modified

The Due from and Due to Local Government Units (LGUs) account balances pertaining to the collection of Real Property and Special Education Taxes of P97,231,020.85 and P8,640,295.73, respectively, differed from their reciprocal accounts in certain cities and municipalities by P12,092,633.33 and P5,541,734.96, respectively, as revealed by the results of the confirmation conducted, thereby casting doubt on the validity and correctness of the said balances of these two accounts;

Of the P160,500,850.95 balance of Construction in Progress (CIP) account as of December 31, 2017, P105,450,771.73 or 65.70 percent were not supported with Subsidiary Ledgers/Schedules and related information, contrary to Section 111 of Presidential Decree (PD) No. 1445, thus casting doubt on the correctness of the same; and,

Projects amounting to P31,390,752.81 were classified as CIP–Infrastructure Asset instead of CIP–Building and Other Structures, thereby overstating the CIP–Infrastructure Assets account and understating the CIP–Buildings and Other Structures account by the same amount.

Cities:

Bacoor City

Qualified/ Modified

The reliability and accuracy of the balances of Property, Plant and Equipment (PPE) accounts with a total book value of P3,363,110,931.35 (Construction in Progress excluded) as of December 31, 2017 could not be ascertained due to the inability of the Inventory Committee to reconcile the discrepancy of P1,169,739,308.71 between the report on the physical count and the accounting records, contrary to Section C.3, Chapter 5 of the Manual on Property Custodianship;

Inaccurate recording of Property, Plant and Equipment (PPE) owing to late recognition of completed projects to appropriate PPE account, contrary to the pertinent provisions of the Philippine Public Sector Accounting Standards (PPSAS) resulted in the uncertainty of the correctness of the reported carrying value of the City’s Buildings account amounting to P1,464,782,743.70 as at year-end; and,

Improper basis in recording the issuances of inventories and failure to conduct complete physical inventory thereof, contrary to Sections 114, 121 and 124 of the Manual on the New Government Accounting System (MNGAS), Volume I, rendered the year-end balance of Inventories account of P24,271,094.06 doubtful.

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Cavite City

Qualified/ Modified

The reliability and accuracy of the Property, Plant and Equipment (PPE) with net book value of P434,986,822.17, excluding Land, Construction in Progress and Items in Transit, as of December 31, 2017 could not be ascertained due to the existence of a discrepancy of P62,001,823.21 between the physical count and the accounting records;

The non-recording in the books of the parcels of land identified by the City Assessor as property of the City and the inability of the City Accounting Office to prepare and maintain Real Property Ledger Card (RPLC) rendered the correctness and reliability of Land account balance of P17,118,348.18 as of December 31, 2017 doubtful;

The inability of the City Accounting Office to take up in the books the distribution of the welfare goods amounting to P1,957,300.00 resulted in the overstatement of the Welfare Goods for Distribution account by the same amount as at year-end. Moreover, the reliability and correctness of the Office Supplies Inventory and Accountable Forms Inventory accounts of P2,234,075.64 and P517,241.40, respectively, could not be ascertained due to the existence of variances between the Inventory Reports and the Accounting records; and,

The inability of the City Accounting Office to take up in the books the transfer of ownership of the Zoo Animals to Albay Parks and Wildlife resulted in the overstatement of the Other Property, Plant and Equipment-Work/Zoo Animals account by P512,400.00 as at year-end. Moreover, the recording of the financial assistance in Due to LGU account overstated the liability account by P551,900.00 as of December 31, 2017.

Dasmariñas City Qualified/

Modified The reported balances of Property, Plant and Equipment

(PPE) accounts with total net amount of P3,128,158,019.48, representing 49 percent of the total assets of P6,431,667,725.02 as of year-end, were unreliable due to the aggregate discrepancy of P138,202,518.39 between the Accounting records and the Report on the Physical Count of Property, Plant, and Equipment (RPCPPE), contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS), Volume I;

The Real Property Tax (RPT) and Special Education Tax (SET) Receivables of P287,104,245.31 each or a total of P574,208,490.62 set at the beginning of the year were still based on estimates pending completion of the newly installed Real Property Tax Administration System (RPTAS), contrary to Section 20 of the Manual on the New Government Accounting System (MNGAS), Volume I, thus affecting the reliability of the year-end balances of the RPT and SET Receivables and Deferred Real Property Tax and Special Education Fund Tax;

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Bank Reconciliation Statements (BRS) were either significantly delayed or not prepared for the 22 bank accounts of the City, contrary to COA Circular No. 96-011 dated October 2, 1996, thus casting doubts on the validity or correctness of the Cash in Bank account balance of P2,898,213,309.41 as at December 31, 2017;

Accumulated rental and other market fees totalling P22,292,917.32 and P8,578,809.25 for the period 1994 to 2016 and 2017, respectively, remained uncollected and unrecorded as of December 31, 2017 due to leniency in the implementation of Tax Ordinance No. 01-s-97, thus understating the receivables and depriving the City of additional funds that can be used in its operations;

The reported balances of Drugs and Medicines Inventory and Medical, Dental and Laboratory Supplies Inventory in the books of accounts totalling P48,311,344.46 and the inventories generated by BIZBOX amounting to P21,421,372.82 and P11,134,286.17 or a total of P32,555,658.99, had a difference of P15,755,685.47, thus rendering the account balances unreliable. Moreover, the other inventory accounts totalling P18,701,699.85, had no Report of Physical Count of Inventories (RPCI) submitted to validate its existence and correctness; and,

The correctness of the Accounts Payable in the financial statements at year-end amounting to P254,203,640.17 could not be relied upon due to the following:

a) the amount of P8,353,110.19 had no supporting documents, contrary to Section 4(6) of Presidential Decree (PD) No. 1445 and Section 4(s), Volume I of the Manual on the New Government Accounting System (MNGAS);

b) the amount of P348,888.76 had been outstanding for more than two years, contrary to Section 98 of the same Decree; and

c) the amount of P21,708,773.40 paid transactions were inadvertently included in the said balance of accounts payable at year-end as shown in the schedule.

Gen. Trias City Qualified/ Modified

The reliability, accuracy and existence of the Property, Plant and Equipment (PPE) with a net book value of P938,960,774.67 (excluding Construction in Progress) remain doubtful due to non-submission of a complete physical inventory report, inadequate and unreconciled records of the Accounting and the General Services Office (GSO), thus affecting the fair presentation of the PPE accounts in the financial statements. The inadequacy of records did not permit the Audit Team to adopt alternative audit procedure to determine the accuracy of the balances of the PPE accounts.

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Imus City

Qualified/ Modified

The correctness and reliability of the recorded Property, Plant and Equipment (PPE) of P1,902,396,436.38 as of December 31, 2017 are doubtful due to the noted discrepancy between the accounting records and the Report on Physical Count of Property, Plant and Equipment (RPCPPE) submitted by the Inventory Team. Moreover, unserviceable properties due for disposal amounting to P22,933,828.87 remained not disposed, contrary to Section 79 of Presidential Decree (PD) No. 1445, thereby exposing them to further deterioration, which could diminish their salvage value.

The ending balance of P74,984,247.46 Road Networks account as of December 31, 2017 was unreliable due to the failure 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. Further, road lots donated/turned over by donors remained unrecorded in the books under the same account.

The balances of RPT and SET Receivables and their corresponding Deferred Real Property Tax Income were unreliable due to recording that was based on target receivables instead of the Certified List of Taxpayers (CLT) and the noted discrepancy of P7,785,759.03 with the records of the City Treasurer’s Office.

Accounts Payable include accounts aged two years and above aggregating P6,053,409.90 for General Fund and P1,747,919.47 for Special Education Fund with no claim vouchers/bills rendering their existence and validity doubtful. Further, accruals of utility accounts were overstated by P49,164.86 due to estimated value of expenses for the period indicated.

The 2017 Year End balance of the Due to Local Government Units (LGUs) account totalling P11,322,378.04 was unreliable due to erroneous charging of various accounts aggregating P4,927,783.11, dormant accounts of P1,238,294.49, and negative balance of P83,664.41 in the subsidiary account, inconsistent with the Revised Chart of Accounts for Local Government Units. Further, balances of accounts in the name of Provincial Treasurer of Cavite and 97 barangays of Imus City totaling P5,239,964.85 remained unremitted as of December 31, 2017 to concerned LGUs, contrary to Sections 271 and 272 of Republic Act (RA) No. 7160.

Tagaytay City Qualified/ Modified

The City did not conduct physical count of various Property, Plant and Equipment (PPE) amounting to P4,202,045,084.46 or 97 percent of its total PPE of P4,324,320,923.57 while PPE amounting to P587,365,828.67 did not have PPE Ledger Cards, contrary to Sections 120 and 124 of the Manual on the New Government Accounting System for Local Government Units, thus putting in doubt the existence and correctness of the PPE accounts in the City’s financial statements as of December 31, 2017.

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Trece Martires City Qualified/ Modified

Projects which have not yet commenced as of December 31, 2017 amounting to P32,360,000.00, completed projects totaling P6,248,908.09, and unbilled balance of unfinished project amounting to P2,886,953.18 or a total of P41,495,861.27 were included in the outstanding balance of the Construction in Progress (CIP) accounts of P202,975,385.77, contrary to COA Circular No. 2015-009, thus resulting in overstatement of CIP and Accounts Payable accounts by P41,495,861.27 and P35,246,953.18, respectively, and understatement of Infrastructure Assets and Other Structures by P4,750,000.00 and P1,498,908.09, also respectively, at year-end.

Accounts Payable were recognized in the books for various claims amounting to P48,278,243.82 despite lack of proper and sufficient evidence proving the validity of such claims, contrary to the provision of Section 46 of Presidential Decree 1177. Furthermore, P235,108.04 of this amount has been outstanding for two years, contrary to Section 98 of Presidential Decree (PD) No. 1445, thus casting doubt on the validity of the Accounts Payable balance as of year-end.

Municipalities:

Alfonso Qualified/ Modified

The Municipal Inventory Committee did not conduct physical count in 2017 on the various Property, Plant and Equipment (PPE) of the Municipality amounting to P253,002,106.69, contrary to Article 439(d) of the Implementing Rules and Regulations (IRR) of the Local Government Code of 1991 and Section 124 of the Manual on the New Government Accounting System for Local Government Units, thus putting in doubt the existence and correctness of the PPE accounts as of December 31, 2017.

Amadeo Qualified/ Modified

The accuracy and reliability of the year-end balances of the recorded Property, Plant and Equipment (PPE) accounts valued at P139,581,041.27 (excluding Construction in Progress) were doubtful due to

a) unreconciled variance of P115,524,731.39;

b) due to incomplete physical inventory;

c) inadequate and unreconciled records of the Accounting and the General Services Office (GSO).

The inadequacy of records did not permit the Audit Team to adopt alternative audit procedure to determine the accuracy of the balances of the PPE accounts; and,

Cash advances totalling P9,574,835.62 still remained unliquidated although the purpose of these have long been served, contrary to Section 89 of Presidential Decree (PD) No. 1445 and COA Circular No. 97-002, thus resulting in overstatement and understatement of the related expense accounts, respectively.

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Carmona

Qualified/ Modified

The reliability and correctness of the reported year-end balances of Property, Plant and Equipment (PPE) accounts aggregating P1,021,663,353.32, which partake 61.59% of the Municipality’s total assets of P1,658,740,879.50, could not be ascertained due to a discrepancy of P2,357,081.68 between the accounting records and the Report on the Physical Count of Property, Plant, and Equipment (RPCPPE), contrary to Sections 114 and 120 of the Manual on the New Government Accounting System (MNGAS), Volume I; and,

Dormant Receivables totalling P1,576,500.00 comprised of loans extended to farmers under the Gintong Ani Program of the Department of Agriculture (DA) and loans to KKK still remained uncollected for more than ten (10) years, thus casting doubt on the collectability of the receivables and thereby affecting the reliability and validity of the accounts.

General Mariano Alvarez

Qualified/ Modified

The reliability and correctness of the reported year-end balances of Property, Plant and Equipment (PPE) accounts aggregating P446,180,084.15, which partake 87 percent of the Municipality’s total assets of P514,873,936.42, could not be ascertained due to:

a) existing discrepancies between the accounting records and the Report on the Physical Count of Property, Plant, and Equipment (RPCPPE) of as much as P3,390,972.13 with either the former showing bigger amount and the latter, smaller, or vice versa;

b) inclusion of disposed dump trucks and motor cycles amounting to P1,463,000.00 in the Construction and Heavy Equipment and Motor Vehicles accounts;

c) non-maintenance of Property, Plant and Equipment Ledger Cards (PPELC) and Real Property Ledger Cards (RPLC) by the Accounting Office and Property Cards by the GSO; and,

(d) PPE were not tagged with stickers to facilitate inventory-taking for proper identification of property.

There was no approved Local Disaster Risk Reduction and Management Fund Investment Plan (LDRRMFIP) for Calendar Year (CY) 2017 and Expenses charged against the LDRRMF totaling P568,230.94 was spent for programs, projects and activities which are not disaster risk management activities in violation of COA Circular No. 2012-002 and NDRRMC-DBM-DILG Joint Memorandum Circular No. 2013-1, thus the intention and purpose for which the said fund was created was not realized;

The Municipality had unliquidated cash advances of P444,427.50 as of year-end, of which P404,467.50 or 91 percent pertained to the unidentified beginning balance already existing in the previous years, therefore casting doubt on the reliability and validity of the Advances to Officers and Employees account;

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Cash advances for various expenditures other than travelling expenses totalling P122,500.00 were granted to two personnel of the Municipality who were not bonded;

Reported gross receipts or sales of 17 business establishments with business addresses in General Mariano Alvarez, Cavite and doing business in the Municipality showed under declaration of receipts/sales by P14,366,545.69 resulting in the underpayment of business taxes by at least P147,720.31; and,

Telephone Expenses - Mobile incurred by 14 personnel and officials of the Municipality were not in accordance with Municipal Memorandum Circular No. 05, s. 2017, which sets the maximum mobile phone allowance to P25,000.00 per year, thereby incurring a total excess payment of P143,707.28.

General Emilio Aguinaldo Unqualified/ Unmodified

Indang

Qualified/ Modified

Lots procured by three barangays with subsidy from municipal fund totaling P450,000.00 were recorded both in the RPCPPE and books of accounts of the Municipality, resulting in the overstatement of the land account by the same amount.

The Disaster Response and Rescue Equipment (1-01-05-090) account was overstated by P5,678,241.97 due to inclusion of one dump truck and two vehicles, contrary to Section 5.1.7 of COA Circular No. 2012-002.

Kawit

Qualified/ Modified

The reliability and accuracy of the recorded Property, Plant and Equipment (PPE) with a book value of P357,344,517.94 (net of depreciation) as of December 31, 2017 could not be ascertained due to a discrepancy of P81,268,117.15 between the accounting records and inventory reports, contrary to Sections 114 and 124 of the Manual on the New Accounting System (MNGAS) for Local Government Units, Volume I.

Unserviceable motor vehicles amounting to P2,167,500.00 were not yet disposed of as required under Section 79 of Presidential Decree (PD) No. 1445.

Transfer Certificates of Title (TCT) of the six parcels of land acquired by the Municipal Government involving a total amount of P11,358,070.00 remained not transferred in the name of the Municipality, thus the risk of third party claim and possible future court litigation. Moreover, the 7,805 square meters land purchased by the Municipal Government, where the Municipal Hall was situated, involving a total value of P8,413,790.00 (fair market value) was not yet recorded in the books of the Municipality, thus understating the Land account by the same amount.

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LGU AUDIT


Improper basis in recording the issuances of inventories and failure to conduct complete physical inventory thereof, contrary to Sections 114, 121 and 124 of the Manual on the New Government Accounting System (MNGAS), Volume I, rendered the year-end balance of Inventories account of P454,626.37 doubtful.

Magallanes Qualified/ Modified

Unreconciled balance of P2,025,885.48 of RPT and SET Receivables between Accounting and Treasury records affecting the accuracy and reliability of the subject accounts.

Maragondon Unqualified/ Unmodified

Mendez Qualified/ Modified

There were unreconciled variances between the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and the accounting records on Property, Plant and Equipment (PPE) in varying amounts that cast doubt on the validity and correctness of the year-end balances of PPE totalling P76,238,423.25, net of depreciation, which comprises 43.55% of the Municipality’s total assets as of December 31, 2017;

The valuation of 85 parcels of land and 166 road lots owned by the Municipality per RPCPPE was based on the assessed value, contrary to PPSAS 17, thus understating the Land and Infrastructure Assets-Road Networks accounts by P47,223,580.52 and P62,926,732.24, respectively, as of year-end of CY 2017 per inventory report.

The recorded Land and Road Network accounts per books of accounts pertain only to those acquired by the Municipality through purchase, thus understating both accounts in the financial statements;

Depreciable assets with a total book value of P5,363,834.93 were still not provided with depreciation expense, contrary to Section 4(o) of the Manual on NGAS for LGUs, Volume I and PPSAS 17, thus overstating the PPE and the Government Equity accounts by an amount equivalent to the unrecorded depreciation;

The correctness and reliability of the balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables and the corresponding reciprocal account Deferred RPT and SET totalling P32,469,112.85 as of December 31, 2017, remained doubtful due to a difference of P12,877,781.78 between the Accounting and the Municipal Treasurer’s Office records; and,

The balances of Due from and Due to LGUs–Province accounts of the Municipality as of year-end did not reconcile with their respective reciprocal accounts in the books of the Province, thus rendering the balances of the accounts unreliable.

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Naic The valuation of 85 parcels of land and 166 road lots owned by the Municipality per RPCPPE was based on the assessed value, contrary to PPSAS 17, thus understating the Land and Infrastructure Assets-Road Networks accounts by P47,223,580.52 and P62,926,732.24, respectively, as of year-end of CY 2017 per inventory report. Meanwhile, the recorded Land and Road Network accounts per books of accounts pertain only to those acquired by the Municipality through purchase, thus understating both accounts in the financial statements.

Noveleta Qualified/ Modified

Due to the inability of the Municipality to conduct inventory taking of Property, Plant and Equipment (PPE) with a net book value of P39,722,492.25 and to maintain PPE Cards, Ledger Cards and other records.


The correctness and existence of the Property Plant and Equipment’s (PPE) carrying value of P1,170,362,703.99 as at December 31, 2017, could not be fully ascertained due to:

a) discrepancy of P19,353,010.47 noted between the General Ledger balance and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

b) unserviceable, disposed/donated and missing PPEs of P34,459,751.79 that were still being carried in the books; and c) entries with no available details totalling P425,176,360.59.

Silang Qualified/ Modified

The reliability and correctness of the reported year-end balances of Property, Plant and Equipment (PPE) accounts aggregating P1,372,751,044.59, which partake 86 percent of the Municipality’s total assets of P1,598,407,606.32, could not be ascertained due to the following:

a) Incomplete physical count resulted in discrepancies between the accounting records and the Report on the Physical Count of Property, Plant, and Equipment (RPCPPE) of as much as P200,099,403.70; and

b) Non-maintenance of Property, Plant and Equipment Ledger Cards (PPELC) and Real Property Ledger Cards (RPLC) by the Accounting Office and Property Cards by the GSO.

Discrepancies were noted in the Receivables account as of year-end due to the inclusion of:

a) dormant receivables totaling P4,900,000.00 comprised of loans extended to farmers under the Gintong Ani Program of the Department of Agriculture (DA) which remained uncollected for more than ten (10) years;

b) non-moving loans receivables with a period ranging from two to nine years totaling P183,800.00 granted to different cooperatives; and

c) Receivables–Disallowances/Charges totaling P2,059,698.22 existing since 2006, representing the amount of shortages of the former treasurer of the Municipality, who is now deceased, thus casting doubt on the collectability of the receivables and the reliability and validity of the accounts

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The Municipality had recorded unliquidated cash advances of P6,339,719.48 as of year-end of which P497,230.00 pertained to advances granted in CY 2012 and prior, where the persons liable were either terminated or deceased, therefore casting doubt on the reliability and validity of the Advances to Officers and Employees account;

There were 219 Disbursement Vouchers (DVs) with a total amount of P54,540,784.67 that were unrecorded as of December 31, 2017, contrary to Section 111 (2) of Presidential Decree (PD) No. 1445 resulting in the overstatement of the Cash in Bank–Local Currency, Current Account and overstatement and/or understatement of other related accounts in the financial statements;

Stale checks totaling P469,814.05 were not cancelled and the amount was not reverted to Cash in Bank–Local Currency, Current Account thereby resulting in its understatement at year-end; and,

Receivables totaling P16,722,815.83 for unpaid market stall rentals and other payments as of December 31, 2017 were not booked up in the book of accounts.

Tanza The accuracy and reliability of the year-end balances of the recorded Property, Plant and Equipment (PPE) accounts valued at P445,640,296.88 (excluding Construction in Progress) were doubtful due to unreconciled variance of P288,907,683.85 due to incomplete physical inventory, inadequate and unreconciled records of the Accounting and the General Services Office (GSO). The inadequacy of records did not permit the Audit Team to adopt alternative audit procedure to determine the accuracy of the balances of the PPE accounts.

Ternate Failure of the LGU to conduct physical inventory on PPE account amounting to P54,182,791.65, provide depreciation on property totaling P80,009.00 and maintain and update PPE Ledger Card and Property Card.

Laguna Qualified/ Modified

The balances of Due from and Due to LGUs–Province accounts of the Municipality as of year-end did not reconcile with their respective reciprocal accounts in the books of the Province, thus rendering the balances of the accounts unreliable.

Cities:

Biñan City

Qualified/ Modified

There was a difference in Property, Plant and Equipment (PPE) balances between the Accounting and Property records of P1,350,984,074.84, thus affecting the completeness, existence, condition and valuation of the PPE account reported at a carrying amount of P4,639,382,428.27;

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LGU AUDIT


The total Cash in Bank-Local Currency balances of P796,420,451.82 per General ledger maintained with local bank in the locality as of December 31, 2017 did not reconcile with the balance per Cashbook of P795,363,442.49 or a difference of P1,057,009.33, thus affecting the accuracy and correctness of the amount reflected in the financial statements as of year-end;

Advances to Officers and Employees account amounting to P5,404,001.74 remained unliquidated as of December 31, 2017, thus understating the expense accounts and overstating the Advances to Officers and Employees account by an amount corresponding to the actual expenses incurred;

Transfer of prior years’ unexpended balances of the Local

Disaster Risk Reduction and Management of Fund (LDRRMF) covering Calendar Years 2014-2016 totaling P10,980,813.53 from General to Trust Funds were erroneously charged to Transfers of Unspent Current Year DRRM Funds to the Trust Funds account instead of Prior Period Adjustment, thus resulting in the overstatement of expenses and understatement of net income in the General Fund for the year ended December 31, 2017 both by P10,980,813.53;

Cabuyao City

Qualified/ Modified

The existence, condition, completeness and valuation of Property, Plant and Equipment (PPE) totaling P2,684,837,487.76 could not be ascertained due to the inability of the City to:

a) conduct a complete physical count of PPE;

b) reconcile the inventory report with the accounting records; and

c) submit a complete Inventory Reports, contrary to Sections 124 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, Section 156 of COA Circular No. 92-386, Section C.3, Chapter V of the Manual on Property Custodianship and Section 491 of the Government Accounting and Auditing Manual (GAAM), Volume I.

The 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 P5,014,235.62 as of December 31, 2017, contrary to the provisions of Section 89 of PD No. 1445, Sections 5.1.1, 5.8, 5.9 and 8 of COA Circular No. 97-002 dated February 10, 1997 and Section 179(c) of the GAAM, thus understating the related expense accounts and overstating the reported income accounts and also exposing the government funds to possible risk of loss or misuse;

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LGU AUDIT


Reconciling items were not corrected and adjusted in the book of accounts, contrary to Section 3.3 of COA Circular No. 96-011, thus rendering the validity, accuracy and reliability of the Cash in Bank account balance stated at P1,425,809,974.70 as of December 31, 2017 doubtful;

The reciprocal accounts Due from Other Funds and Due to Other Funds showed a discrepancy of P2,882,484.54 as of year-end, contrary to the Revised Chart of Accounts prescribed under COA Circular No. 2015-009 dated December 1, 2015, thus rendering the balances of the accounts unreliable;

Details of the unexpended balance of P276,419,825.98 of the Local Disaster Risk Reduction and Management Fund (LDRRMF) were not presented in the Notes to Financial Statements, contrary to COA Circular No. 2012-002, thus depriving the users of the financial statements with more valuable information regarding the fund that can be useful for future decision making;

Only P6,040,651.45 out of P23,937,200.00 or 25% of fund transfers received from previous years had been used to finance priority programs and projects, hence defeated the purposes of the funds and deprived the City and its constituents of the expected benefits from the timely implementation of the projects;

The unexpended balances totaling P122,597.87 of fund transfers from various national government agencies (NGAs) were not returned to the source agencies after the completion of the intended projects;

Perpetual Inventory Method was not adopted in accounting for the acquisition of supplies and materials in Calendar Year (CY) 2017 totaling P61,371,327.29, contrary to Section 114 of the MNGAS for LGUs, Volume I, 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; and

Taxes, fees and other revenues totaling P348,988.13 were not recognized as income upon receipt in December 2016, but were recognized in January 2017, contrary to Section 19 of the MNGAS for LGUs, Volume I, resulting in the understatement of the reported income in CY 2016 and overstatement in CY 2017 both by P348,988.18.

Calamba City

Qualified/ Modified

The valuation and existence of Inventories including Property, Plant and Equipment (PPE) could not be ascertained due to incomplete supplies/property records and physical inventory reports as of December 31, 2017, thus the Inventory and PPE accounts balances appearing in the financial statements totaling P86,882,487.24 and P4,377,633,408.93 (gross amount), respectively are unreliable;

152

LGU AUDIT


The accuracy of the cash balance as of December 31, 2017 in the total amount of P4,870,981,826.65 is doubtful since the legality and propriety of disbursements with a total amount of P74,719,242.90 cannot be determined due to non-submission of the corresponding Disbursement Vouchers (DVs) and their supporting documents; and,

Cash on Hand (Cash in Vault) account appearing in the financial statements in the amount of P23,455,206.44 did not reconcile with the City Treasurer’s cashbooks balances totaling P33,149,794.20 or a total discrepancy of P9,694,587.76 as of December 31, 2017, thus affecting the fairness of the presentation of the account in the financial statements.

San Pablo City

Qualified/ Modified

There was a difference in the Property, Plant and Equipment balances between the Accounting and Property records by P46,179,958.73 and P64,101,277.70 for the General Fund and Special Education Fund, respectively, or a total amount of P110,281,236.43, contrary to the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, thus completeness, existence and valuation of the PPE account, reported at net book value of P1,909,991,447.93 as of year-end, could not be ascertained;

The City general Services Officer (CGSO) did not maintain complete Local Road Network Property Cards and the City Accountant did not follow the format required for the disclosure of the total road network system in the Notes to Financial Statements, contrary to COA Circular No. 2015-008 dated November 25, 2015, thus casting a doubt as to the validity, accuracy and existence of the recorded Road Networks totaling P378,086,732.07;

The reliability and validity of the liability accounts under the General Fund as of December 31, 2017 were doubtful due to:

a) discrepancy of P5,714,430.50 between the payable of the City of San Pablo and the receivables of District Hospital from the City of San Pablo, contrary to the Philippine Public Sector Accounting Standards (PPSAS) 1 and Section 111 of Presidential Decree (PD) No. 1445; and

b) inclusion of claims amounting to P350,043.18, which have been outstanding in the books for two years or more, contrary to Section 98 of PD No. 1445.

Perpetual Inventory Method was not adopted in accounting for the acquisition and issuance of supplies and materials in CY 2017 totaling P37,897,014.49, contrary to the provisions of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, thus 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.

153

LGU AUDIT


San Pedro City Qualified/ Modified

The valuation and existence of Property, Plant and Equipment (PPE) with a reported net book value of P1,857,545,501.83 representing 59.11% of the total assets of the City of San Pedro could not be ascertained due to the inability of the City General Services Office (CGSO) and the Accounting Office to conduct a complete physical count of PPE and to reconcile the variance of P289,135,973.20 between the Accounting records and the submitted partial Report on the Physical Count of Property, Plant and Equipment, contrary to Sections 114, 119, 120 and 124 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, Section 491 of the Government Accounting and Auditing Manual (GAAM), Volume I and Sections 155 and 156 of COA Circular No. 92-386.

Santa Rosa City

Qualified/ Modified

The correctness and accuracy of Cash in Bank-Local Currency account balance presented in the Statement of Financial Position at P1,882,437,645.79 could not be ascertained due to a net difference of P38,049,110.74 between the Subsidiary Ledger and the Cashbook and was not reconciled at year end, thus have an impact on the fair presentation of the account in the financial statements;

Five accounts were not reconciled with the bank per confirmation conducted showing a net difference of P87,957,522.54 and three accounts showed a net difference of P5,330,699.55 between the Bank Reconciliation Statement and the Statement of Financial Position;

The validity, existence and completeness of Property, Plant and Equipment (PPE) accounts recorded in the books with net book value of P5,722,428,771.32 remained doubtful due to:

a) the variance of P1,619,258,026.55 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 P2,273,828.56 or .04% of the total PPE at the time of physical inventory.

Twenty-three (23) units of Motor Vehicles (MVs) involving the total amount of P26,427,897.00 were not covered with Acknowledgement Receipt for Equipment (ARE), thus property accountability and responsibility were not properly established; 36 units totaling P29,667,622.00 have lapsed registrations while 11 units totaling P56,369,500.00 were not registered with the Land Transportation Office (LTO), thus the risk of payment of penalty for late registration and impounding for non-registration or non-indemnification in case of accident or loss;

Titles to six units totaling P5,020,168.00 were not transferred in the name of the City Government, thus ownership and control over the MVs could not be established;

154

LGU AUDIT


Thirty eight (38) stale checks totaling P2,016,352.63 were not replaced and adjusted in the books, thus understating both the Cash in Bank and Accounts Payable accounts by the same amount. Moreover, five stale checks of P92,464.16 were recorded as Prior Period Adjustments instead of Accounts Payable, thus understating the Government Equity and Accounts Payable accounts balances both by P92,464.16;

Advances to Officers and Employees in the amount of P855,544.40 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;

P33,750.00 remained unliquidated for more than ten years;

Additional cash advance of P10,589.40 was granted to an official despite unliquidated balances; and,

Long overdue/dormant receivables totaling P23,168,590.31 recorded in the books as Other Receivables remained uncollected for more than ten years, thus rendering the account’s validity and collectability doubtful.

Alaminos

Qualified/ Modified

Unserviceable properties with a total net book value of P160,080.74which were already disposed were still included in the book of accounts of the Municipality contrary to Sections 194 and 195 of the Rules and Regulations on Supply and Property Management in the Local Governments as prescribed by COA Circular No. 92-386 and Paragraph 82 of Philippine Public Sector Accounting Standard (PPSAS) 17, thus overstating the Property, Plant and Equipment account by the said amount. Consequently, loss on sale of P118,070.74 was not recognized in the Statement of Financial Performance contrary to Paragraph 83 of PPSAS 17, thereby understating the reported expenses and overstating the reported Surplus;

The Municipality was not able to conduct an inventory of the local roads and to maintain reports necessary for reconciliation, contrary to COA Circular No. 2015-008, thus the accuracy, reliability and completeness of the reported balance of the Road Networks account of P908,569.23 was doubtful;

The Municipality was not able to fully comply with the transitional provision of COA Circular No. 2016-004 which requires the 50% recognition of Public Infrastructures in the books of accounts at the end of Calendar Year (CY) 2017 due to non-maintenance of Registry of Public Infrastructures in CYs 2009 to 2015, thus understating the Property, Plant and Equipment account by P13,745,093.79; and

155

LGU AUDIT


Property, Plant and Equipment (PPE) totaling P4,686,698.55 funded out of the Trust Fund which were already completed as of year-end were not recognized and transferred to the General Fund hence ownership of these properties was not recognized by the Municipality and in effect understated both the PPE and Government Equity accounts.

Bay Qualified/

Modified There was a discrepancy in reporting property balances

between the accounting and property records by P15,699,994.76, contrary to Section 53, of the Government Accounting and Auditing Manual (GAAM), Volume III, thus, completeness, existence, condition and valuation of the PPE account reported at P169,625,848.73 as of year-end, could not be ascertained; and

Twenty-two parcels of land valued at P43,322,960.00 were not titled in the name of the Municipality of Bay, contrary to COA Circular No. 92-386 and Section 449 of the GAAM, Volume I, hence, ownership over the parcels of land could not be ascertained, thus, affecting the reliability of the land account.

Calauan

Qualified/ Modified

There was discrepancy of P11,474,975.60 in reporting Cash in Bank – Local Currency, Current Account between the cashbooks, general ledger and bank confirmation contrary to Sections 74 of Presidential Decree (PD) 1445, Section 3.4 of COA Circular No. 96-011 and item 6.3 of COA Circular No. 97-002, thus, affecting the reliability of the account Cash in Bank recorded at P355,661,189.29 as of December 31, 2017;

Unserviceable properties amounting to P3,356,012.46, motor vehicles amounting to P600,000.00 transferred to barangays and carnapped vehicle costing P260,000.00 were still included in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE), thus, affecting the reliability of the PPE recorded at P123,972,850.72 as of December 31, 2017; and,

There was discrepancy of P4,486,788.49 between the accounts Real Property Tax Receivables and Special Education Tax Receivables, contrary to Sections 233 and 235 of the Local Government Code of 1991, thus, posing doubt on the reliability of the accounts reported at P17,453,632.41 and P21,940,420.90, respectively, as of December 31, 2017.

Cavinti

Qualified/ Modified

There was discrepancy in reporting Property, Plant and Equipment (PPE) balances between the accounting records and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) by P54,916,611.88, thus affecting the fair presentation of the PPE accounts reported at P104,659,348.45 as of year-end.

156

LGU AUDIT


The accuracy of Cash and Cash Equivalents balance shown in the Statement of Financial Position at P78,196,804.44 could not be determined due to a net difference of P5,038,530.33 noted between the general ledger and the cashbook, thus affecting the fair presentation of the financial statements.

One hundred forty-two (142) Disbursement Vouchers (DVs) and their supporting documents involving a total amount of P8,260,592.23 covering payments made in Calendar Year (CY) 2017 remained not submitted to the Office of the Auditor as of year-end, contrary to Sections 100 and 122 of Presidential Decree (PD) No. 1445 and Commission on Audit (COA) Circular Nos. 2009-006 and 95-006 dated September 15, 2009 and May 18, 1995, respectively, thus validity and propriety of the covered transactions could not be ascertained.

Famy Qualified/ Modified

The reciprocal accounts Due from Other Funds and Due to Other Funds showed a discrepancy of P152,271.15 as of year-end, contrary to the Revised Chart of Accounts prescribed under COA Circular No. 2015-009 dated December 1, 2015, thus rendering the balances of the accounts unreliable;

The reliability and accuracy of the balances in Cash in Bank (CIB) accounts totaling P70,055,522.60 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, contrary to the General/Policy Guideline No. 3.4 of COA Circular No. 96-011, Section 114 of Presidential (PD) No. 1445 and Item 6.3 of COA Circular No. 97-002;

The negative balances of the five payable accounts with amount aggregating P721,054.98 did not conform with the Local Government Chart of Accounts prescribed in COA Circular No. 2015-009 dated December 1, 2015, thus rendering the balance of the accounts unrealible;

Perpetual Inventory Method was not adopted in accounting for the acquisition of supplies and materials in Calendar Year (CY) 2017 totaling P1,769,260.22, contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, 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; and,

The existence, condition, completeness and valuation of Property, Plant and Equipment (PPE) totaling P26,930,969.79 could not be ascertained due to the inability of the Municipality to conduct a complete physical inventory of PPE and the lack of property ledger cards, contrary to Sections 124 and 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I.

157

LGU AUDIT


Kalayaan

Qualified/ Modified

11 parcels of land donated to the Municipality with a total fair market value of P15,262,160.00 were not recorded in the books of account, contrary to Philippine Public-Sector Accounting Standards (PPSAS) 17, thus, resulting in the understatement of the year-end balance of both Land and Government Equity accounts by same amount;

The over remittance of employees loan amortization to UCPB in the total amount of P139,369.58 was taken up in the books of account under Other Payables instead of Other Receivables, contrary to Philippine Public Sector Accounting Standards 1 (PPSAS 1) and COA Circular No. 2015-009, thus resulting in the understatement of the receivable account and abnormal or negative balance of other payable account by the same amount;

A discrepancy between the reciprocal accounts Due from Other Funds and Due to Other Funds involving an amount of P91,717.79 existed, contrary to Sections 28 and 152 of the Manual on New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume III and the necessary schedules and disclosures in the Notes to Financial Statements were not provided, thus the validity, reliability and accuracy of both accounts could not be validated;

Perpetual Inventory Method was not adopted in accounting for the acquisition of supplies and materials in Calendar Year (CY) 2016 totaling P7,657,871.84, contrary to Section 114 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I, resulting in the overstatement of the affected expense account and the understatement of the inventory accounts by an amount equivalent to the supplies and materials inventory still on hand as of year-end.

Cost of infrastructure project in the amount of P987,064.20 charged against the Trust Fund was not properly accounted for in the books of accounts, contrary to Section 104 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), thus understating both the Building and Government Equity accounts by same amount.

Liliw

Qualified/ Modified

The validity, accuracy, and existence of the Property, Plant, and Equipment (PPE) account balance is doubtful due non-submission of the inventory report which could be construed that the actual physical count of the assets was not conducted, thus existence and valuation of the PPE with recorded acquisition cost of P100,826,039.31 could not be determined;

Charges to reciprocal accounts Due From Other Funds and Due to Other Funds varied in amounts resulting in a net deficiency of P7,114,123.82, thus rendering the accounts unreliable;

158

LGU AUDIT


Cash in Bank and Accounts Payable accounts were both understated by P382,242.72 due to the inability of the Municipal Treasurer to cancel stale checks, contrary to the provisions of Section 59 of the Manual of New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I;

Certain asset, liability and equity accounts were presented with negative balances aggregating P211,611.16, P2,177,851.25 and P531,277.47, respectively, thus affecting the reliability of the financial reports;

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 financial statements for additional information value;

The Real Property Tax (RPT) Receivables and the Special Education Tax (SET) Receivables were presented with a difference of P3,393,856.97. Similarly, the reported Deferred Real Property Tax Income (DRPTI) differs from Deferred Special Education Tax (DSET) by P3,393,856.97, thus cast doubt as to whether the estimation and recognition principles provided for in Sections 233 and 235 of Republic Act (RA) No. 7160 and in Section 20 of the Manual on New Government Accounting System (MNGAS), Volume I, respectively, were appropriately applied by the Municipality and have affected the reliability of the aforementioned accounts’ presented balances.

Los Baños

Qualified/ Modified

Due to the discrepancy of P73,281,055.93 in reporting the Property, Plant and Equipment (PPE) account balances between the accounting records and result of the physical inventory which is equivalent to 40.33% of the total assets, thus affecting the reliability of the PPE reported at P302,992,231.07 as of December 31, 2017.

Stale checks amounting to P73,745.43 remained unadjusted as of year-end, thus understating the account Cash in Bank-Local Currency Current Account and overstating the Accounts Payable both by a total amount of P73,745.43.

The inability of the Municipality to submit ninety-four (94) Disbursement Vouchers (DVs) and their supporting documents involving a total amount of P3,829,151.99 covering payments made in Calendar Year (2017) has prevented the Audit Team from verifying the validity and propriety of the covered transactions.

Luisiana Qualified/ Modified

The existence, validity and accuracy of the reported year-end balances of the Municipality’s Property, Plant and Equipment (PPE) accounts totalingP132,033,777.15, could not be determined due to the inability of the Municipal GSO to submit properly accomplished Report on Physical Count of Property, Plant and Equipment (RPCPPE) and maintain property records; and,

159

LGU AUDIT


The recorded Land account with book balance of P7,366,699.46 was unreliable due to:

a) the records maintained for the Land account by the Municipal Accounting, Assessor and Treasurer/GSO Office were not reconciled; and

b) the absence of Certificates of Title in the name of the Municipality of the 25 parcels of land valued at P108,085,143.00.

Lumban

Qualified/ Modified

The validity, accuracy and reliability of Property, Plant and Equipment (PPE) accounts valued in the books at P11,480,015.74 remained doubtful due to a net difference of P1,665,424.23 between the Financial Statement and the Subsidiary Ledger on four Property, Plant and Equipment (PPE) accounts’ balance; a variance of P23,320,859.66 exists between the Financial Statement and the Report on the Physical Count of PPE (RPCPPE) on seven accounts; and titles to approximately 43,659.45 sq. m. lot involving the total amount of P18,156,848.55 were not yet transferred in the name of the Municipality of Lumban, thus ownership by the Municipality over the parcels of land has not been established yet, and poses the risk of third party claims;

The total Cash in Bank-Local Currency Current Account (CIB-LCCA) balances of P40,876,125.00 per Statement of Financial Position did not reconcile with the balance per Cashbook of P40,831,178.27 or a difference of P44,946.73 due to the absence of periodic reconciliation between the Accounting and the Treasury records, thus affecting the accuracy and correctness of the amount reflected in the financial statements as of year-end;

The propriety of expenditures amounting to P11,597,435.21 charged against the 20% Local Development Fund was doubtful due to: (a) non-recognition in the books of road networks and flood control systems, among others, under the Property, Plant and Equipment; and (b) recording related PPE expenditures under account Repairs and Maintenance or Other Maintenance and Operating Expenses (OMOOE), thus affects the fair presentation of the accounts in the financial statements;

Perpetual Inventory Method was still not adopted in accounting for purchases of supplies and materials totaling P3,687,174.49, thus understating the inventory and overstating the expense accounts both by an amount equivalent to inventory still on hand as of December 31, 2017;

Cash advances amounting P139,637.94 remained unliquidated at year-end, thus overstating the Advances to Officers and Employees account and understating the affected expense accounts by an amount equivalent to the unreported disbursements, and exposing government funds to possible misuse/loss;

160

LGU AUDIT


There was a discrepancy of P352,497.07 between the reciprocal accounts Due from Other Funds and Due to Other Funds and appropriate disclosures were not provided in the Notes to Financial Statements, thus the reliability and accuracy of both accounts could not be validated; and,

Long overdue receivables totaling P593,502.18 as of year-end remained uncollected from three to more than ten years, thus of doubtful validity and collectability.

Mabitac Qualified/ Modified

The reliability, accuracy and existence of Property, Plant and Equipment (PPE) accounts recorded in the books at net book value of P47,357,363.79 remained doubtful due to:

a) variance of P37,050.00 between the Accounting records and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

b) inability of the Inventory Committee to conduct complete physical count of the Municipality’s PPE;

c) non-renewal nor updating of Property Accountability Receipts (PAR) every three years; and

d) inclusion of unserviceable motor vehicles in the amount of P2,214,150.00 in the RPCPPE and in the books.

There was a discrepancy of P1,947,700.49 in reporting the amount of unutilized balance of Local Disaster Risk Reduction and Management Fund (LDRRMF) per Report on the LDRRMF Utilization, the Statement of Financial Position and the Notes to Financial Statement, thus casting doubt on the accuracy of the amount as reflected in the financial statements;

Perpetual Inventory Method was still not adopted in accounting for the purchases of supplies and materials totaling P2,799,075.53 due to non-preparation by the Supply Officer of the Reports on Supplies and Materials Issued (RSMI) and Report on Physical Count of Inventories (RPCI), thus understating the inventory and overstating the expense accounts both by an amount equivalent to the inventory still on hand as of December 31, 2017;

Titles to 12 parcels of land totaling 9,603 sq. m. in the amount of P1,964,524.80 were still not yet transferred in the name of the Municipal Government of Mabitac, contrary to Section 47 (c) of the Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 7160 or the Local Government Code of 1991 and Section 148 of the Rules and Regulations on Supply and Property Management (RRSPM), thus ownership by the Municipality over the parcels of land has not been established, and exposing the property from unlawful occupants and the risks of third party claims;

The accuracy of Cash in Bank account balance shown in the Financial Statements at P45,581,847.89 could not be determined due to a net difference of P27,668.95 between the Notes to Financial Statements and the Cash Book;

161

LGU AUDIT


Cash advances amounting P102,800.00 remained unliquidated at year-end, contrary to Sections 5.8 and 6 of COA Circular Nos. 97-002 and 2012-004, respectively, thus overstating the Advances to Officers and Employees account and understating the affected expense accounts by an amount equivalent to the unreported disbursements, and exposing government funds to possible misuse/loss; and,

The Other Receivables account balance of P44,238.68 remained unliquidated at year-end, contrary to Sections 5.8 and 6 of COA Circular Nos. 97-002 and 2012-004, respectively, thus overstating the Other Receivables account and understating the affected expense accounts by an amount equivalent to the unreported disbursements.

Magdalena Qualified/ Modified

The reliability of the recorded balances of the Property, Plant and Equipment (PPE) with carrying amount of P93,988,577.15 as of year-end could not be ascertained due to non-preparation of a reliable Report on the Physical Count of Property, Plant and Equipment (RPCPPE), inclusion of unserviceable properties amounting to P335,500.64 and inclusion of small tangible assets totalling P2,308,115.26; and,

Existing infrastructure assets of the Municipality totalling P28,412,808.04 were not provided with depreciation expenses, thus resulting in the overstatement of the PPE and Government Equity accounts and understatement of Depreciation and Accumulated Depreciation accounts, each by an amount equivalent to the unrecorded depreciation expenses of P2,699,216.78.

Majayjay Qualified/ Modified

The Municipal Accountant did not maintain property, plant and equipment ledger cards (PPELC), contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume 1, hence reconciliation of PPE balances between the books and the report on the physical inventory of PPE could not be made, thus the doubtful accuracy of the PPE balance reported at P52,931,148.89 as of year-end;

The reliability and existence of recorded Inventory amounting to P5,024,300.00 as of December 31, 2017 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, contrary to Sections 114 and 124 of the MNGAS for LGUs, Volume I;

The year-end balance of the Intra-Agency Receivables of P1,099.00 does not reconcile with its reciprocal account Intra-Agency Payables of P3,223,950.13 or a net difference of P3,222,851.13, contrary to COA Circular No. 2015-009, casting doubt to the accuracy of the recorded transactions, thus affecting the fair presentation of the accounts in the financial statements;

162

LGU AUDIT


There was net discrepancy of P467,687.26 between the balances of Cash in Bank in the General Ledger amounting to P84,269,183.78 and in the Statement of Financial Position amounting to P83,801,496.52, thus resulted in inaccurate and unreliable Cash in Bank balance reported as of year-end;

The accuracy and reliability of Cash Local Treasury and Cash in Bank – Local Currency, Current Account (LCCA) with an ending balances of P16,652.88 and P83,801,496.52, respectively, remained doubtful due to non-reconciliation between accounting and treasury records resulting in net discrepancies of P3,492.24 and P162,306.65, respectively, contrary to Section 181 (c) of the Government Accounting and Auditing Manual (GAAM), Volume I;

The honoraria given to government personnel involved in Government Procurement amounting to P601,247.75 was erroneously recorded as Other Professional Services and Other Maintenance and Operating Expenses instead of Honoraria, contrary to COA Circular 2015-009, thus resulting in the misstatements of affected accounts in the Financial Statements; and,

Significant information to support the balance of some accounts presented in the financial statements was not disclosed in the Notes to Financial Statements, contrary to Paragraphs 127 (c) and 129 of Philippine Public Sector Accounting Standards (PPSAS) 1, thus depriving the users of financial statements for additional information value.

Nagcarlan Qualified/ Modified

The acquired lands of the Municipality were not covered by Certificates of Titles, in violation of Section 47 (c) of the Implementing Rules and Regulations of the Local Government Code of 1991 and Section 148 of COA Circular No. 92-386, thus, ownership over said property has not been duly established, hence, affecting the reliability of the Land account valued at P6,142,118.79 as of December 31, 2017; and,

Unserviceable properties amounting to P5,289,428.80 were still included in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE), contrary to Section 114 of the Manual on the New Government Accounting System (NGAS), for Local Government Units (LGUs) Volume I, thus affecting the reliability of the PPE recorded at P145,758,454.60 as of December 31, 2017.

Paete Qualified/ Modified

The Property, Plant and Equipment totaling P84,716,330.62 as of year-end is unreliable due to:

a) unreconciled balances amounting to P2,348,934.66 between the Accounting records and Municipal General Services Office records;

b) PPE totaling P647,063.81 not properly classified to appropriate accounts; and

c) fully depreciated PPE carried at acquisition cost.

163

LGU AUDIT


A discrepancy between the reciprocal accounts Due from Other Funds and Due to Other Funds involving the amount of P250,500.00 existed, contrary to COA Circular No. 2015-009, thus the validity, reliability and accuracy of both accounts could not be validated;

Due to NGAs totaling P15,301,346.00 as of December 31, 2017, received from Department of Interior and Local Government for the implementation of specific projects of the Municipality, was recorded and maintained in the General Fund instead in the Trust Fund, contrary to Sections 94 and 95 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume 1, thus, making the fund susceptible to misuse or misappropriations;

There was discrepancy of P337,772.11 in reporting the balance of Loans Payable – Domestic between the Accounting records in the amount of P6,580,001.79 and the Municipal Development Fund Office (MDFO) of the Department of Finance (DOF) in the amount of P6,242,229.68, thus, the doubtful accuracy of the account Loans Payable – Domestic reported at year-end; and,

Significant information to support the balance of some accounts presented in the financial statements was not disclosed in the Notes to Financial Statements, contrary to Paragraphs 127 (c) and 129 of Philippine Public Sector Accounting Standards (PPSAS) 1, thus depriving the users of financial statements of additional information value.

Pagsanjan

Qualified/ Modified

There was 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 P103,239,528.86, contrary to Section 114 of the New Government Accounting System (NGAS), Volume I, thus, affecting the reliability of the PPE recorded at P125,038,962.59 as of December 31, 2017.

Pakil

Qualified/ Modified

The existence and correctness of the balance of Property, Plant and Equipment (PPE) with a net book value of P69,626,881.12 could not be ascertained due to the failure of the Municipal General Services Officer (MGSO)-Designate to conduct complete physical count of PPE during the year resulting in the non-submission of Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and to maintain property cards, as well as the failure of the OIC Municipal Accountant to maintain Property, Plant and Equipment Ledger Card, contrary to Sections 120 and 124, of the Manual on New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I.

164

LGU AUDIT


Pangil

Qualified/ Modified

Valuation and existence of Property, Plant and Equipment (PPE) with year-end balance of P91,608,033.43 representing 55% of the total assets of the Municipality of Pangil could not be ascertained due to the inability of the Inventory Team to: (a) conduct a complete physical inventory of PPE; (b) prepare and submit updated Inventory Reports; (c) reconcile the inventory with the books of accounts, contrary to Section 124 of the Manual on New Government Accounting System (MNGAS) for Local Government Unit (LGUs), Volume I, Section 156 of COA Circular No. 92-386, and Section C.3, Chapter V of the Manual on Property Custodianship and Section 491 of the Government Accounting and Auditing Manual (GAAM), Volume I;

Bottom-up Budgeting (BUB) and other National Government Agency’s projects implemented during the year 2017 by the Municipal Government of Pangil were not properly accounted for in the books of accounts, contrary to Section 104 of the MNGAS for LGUs, thus understating the PPE accounts and Government Equity by P4,124,102.42;

Perpetual Inventory Method was not again adopted in accounting for the acquisition of supplies and materials in Calendar Year 2017 totaling P3,152,693.87, contrary to Section 114 of the MNGAS for LGUs, Volume I, resulting in the overstatement of the affected expense account and the understatement of the inventory accounts by an amount equivalent to the supplies and materials inventory still on hand as of year-end; and,

Complete Local Road Network Property Cards were still not maintained by the Municipal Treasurer while the total road network system was still not disclosed in the Notes to the Financial Statements, contrary to COA Circular No. 2015-008, thus casting doubt on the accuracy of the recorded Road Networks totaling P14,522,550.87.

Pila Qualified/

Modified The valuation and existence of Property, Plant and

Equipment (PPE) account totaling P114,411,807.34 (gross amount) in the General Fund could not be ascertained due to the discrepancy of P585,328.51 between the Accounting records and Report on the Physical Count of Property, Plant and Equipment (RPCPPE) as of December 31, 2017 and absence of complete stock cards, property cards, and PPE ledger cards, contrary to Sections 114, 119, 120 and 124 of the Manual on New Government Accounting System (MNGAS) for Local Government Units(LGUs), Volume I.

Rizal Qualified/

Modified The reliability, valuation, existence and completeness of the

Property, Plant and Equipment (PPE) accounts totaling P29,143,134.74, net of Accumulated Depreciation of P751,991.51, were doubtful due to the:

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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 (RPCPPE);

c) non-recognition of the costs of parcels of land owned by the Municipality and

d) inability to charge depreciation expenses for several properties and equipment.

The Municipal Treasurer did not maintain complete Local Road Network Property Cards and the Municipal Accountant did not record the beginning balance of the local road network in the general ledger, its component in the Local Road Network Ledger Card and required disclosures for Local Road Network System was not provided in the Notes to the Financial Statements, thus, the doubtful validity and reliability of the account Local Road Network System and depriving the stakeholders and the other users of the financial statements of information and data on the local road network of the Municipality;

A discrepancy between the reciprocal accounts Due from Other Funds and Due to Other Funds involving an amount of P10,000,000.00 existed and the necessary schedules and disclosures in the Notes to Financial Statements were not provided, thus, the validity, reliability and accuracy of both accounts could not be validated;.

Perpetual Inventory Method was not adopted in accounting for the acquisition of supplies and materials totaling P929,525.84 in Calendar Year (CY) 2017, resulting in the overstatement of the affected expense accounts and the understatement of the inventory accounts by an amount equivalent to the unused supplies and materials which still on hand as of year-end;

Due from NGAs totaling P43,713.90 that were previously written-off in the books of accounts of the Municipality without the authority of the Commission on Audit, as prescribed by Section 4, Rule VI of the 2009 Revised Rules of Procedure of the Commission on Audit and were recently updated by COA Resolution No. 2012-001 and COA Circular No. 2016-005, remained unrestored to the said account; thus, understating the Due from NGAs and Government Equity accounts by P43,713.90; and,

Complete set of Special Accounts in the General Fund for the Municipality’s economic enterprises, loans and development projects were still not prepared by the Municipal Accountant, thus, depriving management and other users of the financial statements of vital financial information on their operations.

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The valuation and existence of Property, Plant and Equipment (PPE) of the Municipality with a reported book value of P260,896,928.16 could not be ascertained due to non-disposal of unserviceable properties amounting to P3,093,839.25 in the books;

Purchase of supplies totaling P15,289,381.95 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, thus affecting the fair presentation of the affected accounts in the financial statements;

The ownership, propriety and validity of Land recorded in the books amounting to P6,913,589.39 are doubtful due to the lack of Torrens Title conveying ownership of the land to the Municipality, thus exposing them to third party claims and land disputes;

Establishment of Real Property Tax Receivables and Special Education Tax Receivables were understated, thus, rendering the financial statements unreliable; and,

Some of the significant financial information was inadequately disclosed in the Notes to Financial Statements, contrary to Paragraphs 127(c) and 129 of Philippine Public Sector Accounting Standards (PPSAS) No. 1, thus depriving the users of financial statement for additional information value.


The reliability and existence of the Property, Plant and Equipment with a net book value of P62,167,230.64 as of December 31, 2017 could not be ascertained due to non-maintenance of property ledger by the Accounting and property cards by the Municipal General Services Officer and non-reconciliation between the Accounting and GSO records;

The Municipality’s Property, Plant and Equipment (PPE) account amounting to P62,167,230.64 which comprises 59.99% of the total assets of P103,622,082.41 was 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 expense;

The accuracy and reliability of Cash Local Treasury and Cash in Bank – Local Currency, Current Account with an ending balances of P227,733.39 and P33,372,214.71, respectively, remained doubtful due to non-reconciliation between accounting and treasury records resulting in net discrepancies of P227,733.39 and P3,928,503.05, respectively, contrary to Section 181 (c) of the Government Accounting and Auditing Manual, Volume I; and,

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 financial statements of additional information value.

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Siniloan Qualified/ Modified

The existence, accuracy and reliability of the PPE accounts at year-end balance of P126,655,306.75 could not be ascertained due to the inability of the Inventory Team to:

a) conduct a complete physical count of PPE and submit a report thereon; and ,

b) reconcile the inventory report with the accounting records

The correctness and accuracy of cash account balance presented in the Statement of Financial Position (SFP) at P35,458,159.46 could not be ascertained due to:

a) P25,792,335.79 difference between the balance in the SFP and in the Subsidiary Ledger (SL),

b) a net difference of P1,899,052.56 between the SL and the Cashbook; and

c) a discrepancy of P9,265,990.21 between the books and the bank, thus have an impact on the fair presentation of the account in the financial statement.

Out of P458,780.00 Advances to Officers and Employees account, P346,280.00 remained outstanding as of year-end resulting to the overstatement of the Advances to Officers and Employees account and understatement of the affected expense accounts by an amount equivalent to the unaccounted disbursements; and,

The Statement of Comparison of Budget and Actual Amounts (SCBAA) for Calendar Year 2017 remained un-submitted to the Office of the Auditor, thus affected the timely review of pertinent financial information as well as the evaluation of the implementation of the budget.

Victoria Qualified/ Modified

The discrepancy of P24,490,983.88 between the total PPE appearing in the books of accounts amounting to P116,439,529.99 as compared with the Report on the Physical Count of Property, Plant and Equipment (RPCPPE)cannot be determined due to lack of property cards, and unserviceable properties totaling P1,386,393.71 are still included in the RPCPPE, contrary to Sections 114 and 124, of the Manual on New Government Accounting System(MGAS) for Local Government Units (LGUs),Volume I and Section 490 of the Government Accounting and Auditing Manual (GAAM), thus the validity, accuracy and existence of Property, Plant and Equipment (PPE) of the Municipality is doubtful.


The balance of Cash in Bank – Local Currency Current Account (CIB – LCCA) amounting to P2,220,053,603.49 as of December 31, 2017 was unreliable due to the presence of long outstanding reconciling items, hence not fairly presented, contrary to Paragraph 27, Fair Presentation and Compliance with Philippine Public Sector Accounting Standards (PPSAS) 1. Further, CIB – LCCA includes dormant accounts that have been inactive for more than five years, thus depriving its constituents of the services they could have received if the funds were used;

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Cash Advances (CAs) totaling P33,994,129.30 were not liquidated as of December 31, 2017 resulting in the overstatement of respective asset accounts and understatement of the related expense accounts by the same amount, contrary to Section 5.8 of the COA Circular No. 97-002 dated February 10, 1997;

Agricultural and Marine Supplies for Distribution account balance of P71,444,575.85 as of December 31, 2017 includes inventories totaling P47,699,922.75 that has been outstanding in the books for one to two years due to the failure of the accountable persons to submit the List of Recipients (LOR) including the duly signed Certificate of Acceptance to the Provincial Accounting Office, thus, affecting the fairness and reliability of the accounts, contrary to Paragraph 44 of PPSAS 12 and Paragraph 27 of PPSAS 1;

The Construction in Progress (CIP) – Buildings and Other Structures account as of December 31, 2017 totaling P113,594,525.95 of the General Fund was overstated by P16,246,724.48 due to non-reclassification of the completed projects to its appropriate Buildings and Other Structures accounts which remained in the books for five years or more, thus, affecting the fairness and reliability of the accounts, contrary to Paragraph 27 of PPSAS 1; and,

Due to GSIS account of P38,204,977.54 includes significant amount of unreconciled balance of P18,428,505.26 and negative balance of P592,872.44 which was existing since CY 2006, thus, making the account unreliable and the Financial Statement not fairly presented, contrary to Paragraph 27 of PPSAS 1.

Cities: Lucena City Qualified/

Modified The valuation and existence of Property, Plant and

Equipment (PPE) with a reported net book value of P1,268,815,791.69 representing 69% of the total assets could not be ascertained due to incomplete details on the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and inclusion of unserviceable properties costing P12,132,668.23 despite its disposal;

Other Receivables totaling P2,646,436.38 out of the balance of P2,705,542.55 as of December 31, 2017 are dormant, thus unreliable and affecting its fair presentation in the financial statements;

Guaranty/Security Deposits Payable of P2,855,111.27 which have been outstanding for more than two years were not reverted to the Unappropriated Surplus of the General Fund, thus casting doubt on the validity and reliability of the account balance presented in the financial statements; and,

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Excess collections from the sale of bidding documents amounting to P583,712.75 remained in the Trust Fund books, thus overstating the Trust Liabilities account and understating the affected income account by the same amount.

Tayabas City Qualified/

Modified The Property, Plant and Equipment presented in the

Financial Statements with a gross amount of P444,362,447.23 (excluding Infrastructure Assets and Construction in Progress) 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, in violation of Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I;

The valuation and existence of the inventory account balances as of year-end totaling P3,788,551.79 (excluding Accountable Forms, Plates and Stickers) could not be ascertained due to the failure of the City General Services Office to conduct its physical count and to submit the Report of the Physical Count of Inventories (RPCI) as well as to prepare and maintain supplies ledger cards and stock cards, contrary to Sections 114 and 124 of the MNGAS for LGUs, Volume I; and,

Accounts Payable totaling P1,847,973.14 which have been outstanding for more than two years were not reverted to the Unappropriated Surplus of the General Fund, contrary to Section 98 of Presidential Decree (PD) No. 1445, thus these may no longer represent valid claims and the validity, existence and correctness of the balance of the account cannot be relied upon.

Municipalities:

Agdangan Qualified/ Modified

Property, Plant and Equipment (PPE) of P208,835.14 in the Financial Statements is not reliable as to existence and valuation due to non-reconciliation between the records in the Accounting Office and the Reports on the Physical Count of Property, Plant and Equipment (RPCPPE); and,

Monitoring of the dispersal of large cattle and carabaos accounted under the Biological Assets – Work/Zoo Animals account was not made regularly, thus the objective of the dispersal program was not fully achieved to the detriment of other potential beneficiaries. Moreover, existence of the Biological Assets – Work/Zoo Animals account balance of P925,000.00 is doubtful due to the sale and death of cattle without supporting documents amounting to P558,000.00.

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Alabat

Qualified/ Modified

The existence, completeness and reliability of the Property, Plant and Equipment totaling P36,744,975.38 could not be ascertained due to the failure of the General Services Officer (GSO) – Designate to submit to the Audit Team the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and to reconcile the same with the PPE Ledger Cards (PPELC);

The Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable set-up at the beginning of the year were still based on the assessed value of taxable properties provided by the Municipal Assessor and not on Real Property Tax Account Register/Taxpayer Index Card due to the non-submission of the certified list of taxpayers by the Municipal Treasurer to the Municipal Accountant, hence the RPT and SET Receivables totaling P5,411,275.78 as of December 31, 2017 were still unreliable;

Purchased of one-unit rescue vehicle costing P997,000.00 funded from the Bottom-Up-Budgeting of Department of the Local and Interior Government was not recorded in the General Fund, thereby understating the Disaster Response and Rescue Equipment and Government Equity accounts by the said amount; and,

The accuracy and reliability of the Due to BIR and Due to Pag-IBIG accounts as of December 31, 2017 is doubtful due to failure of the Accounting Office to conduct periodic reconciliation of the amounts withheld to remittances made resulting to unremitted/unreconciled balances of P427,613.59 and P1,550.78, respectively.

Atimonan

Qualified/ Modified

The existence, completeness and reliability of the Property, Plant and Equipment (PPE) totaling P229,498,322.31 could not be ascertained due to the failure of the Officer-in-Charge-General Services Officer (GSO) to submit to the Audit Team the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and to reconcile the same with the PPE Ledger Cards (PPELC);

The accuracy and reliability of the recorded Land account of P13,092,275.75 could not be ascertained due to:

a) the inclusion of an amount worth P1,702,275.75 without details/breakdown in the General and Special Education Funds;

b) unrecorded parcels of land owned and titled under the name of the Municipality; and

c) lots with tax declarations named under the Municipality but were not supported with certificate of titles which are subject to verification of ownership.

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Livelihood project amounting to P1,000,000.00 granted to the Atimonan Tricycle Association, Inc., otherwise known as the Livelihood Program of Atimonan Tricycle Association, was recorded directly as an expense instead in the Due from Non-Government Organizations (NGOs)/People’s Organizations (POs), thus understating the Due from NGOs/POs and Government Equity accounts by the said amount;

Bail Bonds Payable totaling P220,414.01 were still not supported with details/breakdown, thus validity and accuracy of the account cannot be relied upon; and,

The accuracy and reliability of the Due to BIR account amounting to P1,289,575.53 were doubtful due to unremitted/unreconciled balance amounting to P95,591.32 while the Due to Pag-IBIG account is overstated by P17,788.35 due to unadjusted government shares for separated employees recorded in the said account.

Buenavista Qualified/ Modified

The Property, Plant and Equipment (PPE) account in the Financial Statements totaling P154,013,916.85 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;

Cash Advances totaling P192,380.00 remain unliquidated as at year-end, thus exposing the funds to possible loss or misuse and resulting in overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements; and,

The balance of Inventory Held for Sale and for Consumption totaling P1,438,427.68 are unreliable due to the absence of supporting schedules, non-submission of the Report on the Physical Count of Inventories (RPCI) and non-maintenance by the Municipal Accountant and General Services Officer (GSO)-Designate of Supplies Ledger Cards (SLC) and stock cards, respectively, for each commodity/stock

Burdeos No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Calauag Unqualified/ Unmodified

Candelaria Qualified/ Modified

The Property, Plant and Equipment (PPE) account balance of P300,761,216.40 is unreliable due to

a) non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) caused by incomplete conduct of physical count;

b) undetermined amount of discrepancies between the account balances presented in the financial statements and the Schedule of PPE and Depreciation;

c) non-recording of properties purchased out of Trust Fund and misclassification of PPE totaling P6,906,464.78 and P7,131,795.93, respectively; and,

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d) non-compliance with the transition on the phased recognition of the Local Road Network in the books of accounts which requires 50% compliance at the end of CY 2017, contrary to Sections 114 and 124, Volume I and Section 57, Volume II of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Section C.3, Chapter V of the Manual on the Property Custodianship, Section 104 of PD No. 1445, COA Circular 2015-008 and Paragraphs 27 and 29 of Philippine Public Sector Accounting Standards (PPSAS) 1.

Transactions recorded under Due from Other Funds and Due to Other Funds totaling P13,547,444.65 and P23,299,667.53, respectively, with a net discrepancy of P9,752,222.88, were not immediately corrected and not provided with details, contrary to Sections 111 and 112 of PD No. 1445 and Section 48 of Government Accounting and Auditing Manual (GAAM), Volume l, hence affecting the reliability of the account balances;

The balance of Trust Liabilities – Disaster Risk Reduction Management Fund account of P17,422,803.86 is unreliable due to unreconciled difference of P12,247,363.02 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, contrary to Sections 111 and 112 of PD No. 1445 and COA Circular No. 2012-002;

Payment of P16 million for the purchase of parcel of land from QUEDANCOR was not supported with complete documentation as required under Section 4 (6) of PD No. 1445 and COA Circular No. 2012-001, casting doubt on the validity of transaction. Moreover, the land was not supported with Certificate of Title in the name of the Municipality, contrary to Section 148 of COA Circular No. 92-386, thus ownership over the property is weak;

The Real Property Tax/Special Education Tax (RPT/SET) Receivable set up at the beginning of the year for P15,414,073.80 was not based on the updated Real Property Tax Account Register/Taxpayer’s index card, contrary to Section 20 of the MNGAS for LGUs, Volume I. Meanwhile, the Income account was understated by undetermined amount due to: a) the inclusion of uncollected taxes from 2001 and below and penalties amounting to P3,495,575.05; and b) crediting the collection of taxes from 2001 and below and current year’s fines and penalties to the receivable account instead of its corresponding income account, contrary to Sections 21 and 23 of the MNGAS for LGUs, Volume I, and Paragraphs 27 and 29 of PPSAS 1;

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Validity of the Accounts Payable totaling P2,637,935.12 is doubtful due to non-submission of supporting documents and transaction details to establish the incurrence of obligations, contrary to Section 4 (6) of PD No. 1445 while dormant trust funds/receipts totaling P313,835.48 have not been reverted to the Unappropriated Surplus of the General Fund and to the National Treasury, contrary to Section 98 of the same PD and Executive Order No. 431, hence funds were kept idle; and,

The Receivables account balances totaling P523,244.85 as of December 31, 2017 are dormant, thus unreliable and affecting its fair presentation in the financial statements, contrary to Paragraphs 27 and 29 of PPSAS 1 and COA Circular No. 2016-005.

Catanauan Qualified/ Modified

Due from Officers and Employees totaling P35,358.05 representing balances of cash advances granted to various employees and excess in the cellphone load usage of two personnel were not collected/refunded within the prescribed period;

Cash advances recorded under the Advances to Officers and Employees account totaling P336,860.00 remain unliquidated at year-end, resulted in overstatement of the respective asset accounts and understatement of related expenses equivalent to the amount of unreported disbursements; and,

Other Receivables account balance of P77,345.00 lacks supporting documents and remain dormant in the books for more than 30 years, hence of doubtful validity, and was not requested for write – off.

Dolores Qualified/ Modified

The Property, Plant and Equipment account balance of P66,105,365.04 is unreliable due to:

a) non-conduct of physical count of PPE;

b) unaccounted properties totaling P11,684,334.09, thus not provided with depreciation;

c) non-recording of properties purchased out of Trust Fund totaling P89,264.99 and vehicles received as donation; and,

d) discrepancies in the amounts reflected in the financial statements and the Schedule of Depreciation, contrary to Sections 4 (o), 114 and 124, Volume I and Section 57, Volume II of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs) and Sections 111 and 112 of Presidential Decree (PD) No. 1445;

The valuation of Land at P3,055,508.36 cannot be ascertained due to the failure of the Municipal Accountant to provide its details/schedule, contrary to Section 111 of PD No. 1445. Moreover, out of the 29 parcels of land owned by the Municipality, 17 are still untitled, contrary to Section 148 of Commission on Audit (COA) Circular No. 92-386, thus exposing the same to third party claims and land disputes.

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The valuation of Land at P3,055,508.36 cannot be ascertained due to the failure of the Municipal Accountant to provide its details/schedule, contrary to Section 111 of PD No. 1445. Moreover, out of the 29 parcels of land owned by the Municipality, 17 are still untitled, contrary to Section 148 of Commission on Audit (COA) Circular No. 92-386, thus exposing the same to third party claims and land disputes;

The Municipality was not able to comply with the transitory

provision on the phased recognition of the Local Road Networks in the books of accounts which requires 50% compliance at the end of the CY 2017, contrary to Item IX of COA Circular No. 2015-008, thus Local Road Network account was understated by undetermined amount of unrecorded road networks as at year-end;

The accuracy and reliability of Real Property Tax/Special

Education Tax (RPT/SET) Receivable account balances totaling P7,212,992.12 could not be ascertained due to the failure of the Municipal Treasurer to furnish the Municipal Accountant with the list of uncollected RPT/SET as of December 31, 2017, contrary to Sections 111 and 112 of PD No. 1445;

Liquidation reports of cash advances for Intelligence Fund

from CYs 2010-2015 totaling P130,750.00 were not submitted to the Intelligence and Confidential Fund Audit Unit (ICFAU) of the Commission on Audit, contrary to COA Circular Nos. 97-002 and 2003-002 and Commission on Audit (COA) – Department of Budget and Management (DBM) – Department of the Interior and Labor Government (DILG) Governance Commission for Government Owned Controlled Corporation – (GCG) – Department of National Defense (DND) Joint Memorandum Circular (JMC) No. 2015-01 resulting in the overstatement of receivables and government equity accounts;

Receivables totaling P284,573.68 remained dormant for two

(2) to more than 20 years, while prepayments amounting to P3,000.00 is unaccounted, contrary to Section 111 of PD No. 1445 rendering the validity, existence and correctness of the account balances unreliable;

The Municipality failed to enforce the settlement of audit

disallowances despite the issuance of a Notice of Finality of Decision (NFD) and COA Order of Execution (COE), which resulted in unsettled disallowances totaling P53,685.00, contrary to Section 7.1 of COA Circular No. 2009-006;

Disallowance amounting P34,120.00 was not recorded

thereby understating the Accounts Receivable-Disallowances and Charges account by the same amount, contrary to Sections 7.2.1 (d) and 22.6 of the same COA Circular;

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The Breeding Stocks account balance of P179,000.00 is unreliable due to the non-submission of Inventory of Breeding Stocks and the prevailing market price for each item as of reporting date, contrary to Section 4.5 of COA Circular No. 2016-004 and Philippine Public Sector Accounting Standards (PPSAS) No. 27, thereby casting doubts on the existence and valuation of the account presented in the financial statements;

Payables totaling P583,565.61 which have been outstanding in the books for more than two years and against which no actual claim, administrative and judicial has been filed or which is not covered by perfected contracts on record were not reverted to the Unappropriated Surplus of the General Fund, contrary to Section 98 of PD No. 1445, resulting in the overstatement of liabilities; and,

Guaranty/Security Deposits Payable of P37,463.08, which have been outstanding for more than two years were not reverted to the Unappropriated Surplus of the General Fund, contrary to Section 98 of PD No. 1445, thus casting doubt on the validity and reliability of the account balance presented in the financial statements.

General Luna Qualified/ Modified

The existence and valuation of the Property, Plant and Equipment (PPE) accounts with a net book value totaling P30,556,626.13 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;

Cash advances granted to Municipal Officers and Employees totaling P94,439.98 recorded under the Advances to Officers and Employees account of P37,940.00 and Advances to Payroll account of P56,499.98 remain unliquidated at year-end, resulted in overstatement of the respective asset accounts and understatement of related expenses equivalent to the amount of unreported disbursements; and,

The non-recording in the books of the Municipality of the donated ambulance from the Philippine Charity Sweepstakes Office (PCSO) resulted in understatement of the Property, Plant and Equipment (PPE) account at year-end. Moreover, the donated ambulance was not provided with depreciation, resulting in the understatement of the related expense account and overstatement of the equity and asset accounts.

General Nakar

Qualified/ Modified

The abnormal balances in the accounts Cash in Bank – Local Currency, Current Account - P61,140.10, Due to Other Funds - P1,651.51 and various Depreciation accounts - P32,020,324.85 or totaling - P32,083,116.46 adversely affected the fairness of the presentation of these accounts in the financial statements;

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The Property, Plant and Equipment (PPE) accounts in the Financial Statements totaling P249,747,778.52 (excluding Land, Buildings, Public Infrastructures and Construction in Progress) as of year-end 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, thus showing a variance of P26,087,691.59, contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I;

Land account recorded in the books at P15,448,485.45 includes 18 parcels of land valued at P4,015,383.05 that were not supported with Transfer Certificate of Title in the name of the Municipality, contrary to Section 39(2) of Presidential Decree (PD) No. 1445 and Section 148 of Commission on Audit (COA) Circular No. 92-386, thus ownership over these lots was not established thereby rendering the account balance doubtful and exposing to possible third party claims;

The valuation and existence of the inventory account balances as of year-end totaling P6,397,328.68 could not be ascertained due to failure of the Municipality to conduct its physical count and to submit the Report of Physical Count of Inventories (RPCI) as well as to prepare and maintain supplies ledger cards and stock cards, contrary to Sections 124 and 114 of the MNGAS for LGUs, Volume I;

The balance of Trust Liabilities – Disaster Risk Reduction and Management Fund (DDRMF) account of P3,345,290.35 as of December 31, 2017 is understated by P5,429,244.02 due to the failure of the Municipality to transfer the unexpended balance of LDRRMF to the special trust fund, contrary to COA Circular No. 2012-002;

Receivables of P5,292,532.49 remained uncollected for more than ten years of which the total amount of P1,550,007.50 was not supported with documentation and list of debtors, contrary to Section 111 of PD No. 1445, Section 47 of the Government Accounting and Auditing Manual (GAAM), Volume I and COA Circular No. 2016-005, and rendering the accounts of doubtful validity;

Accounts Payable amounting to P921,055.73 were not supported with documents to establish their existence. Moreover, said amount have remained outstanding for more than two years and were not reverted to unappropriated surplus of the General Fund, contrary to Section 4(s) of MNGAS for LGUs, Volume I and Section 98 of PD No. 1445, thus affecting the reliability of balance of the account of P10,197,138.47 as of December 31, 2017;

Advances to Special Disbursing Officer and Advances for Officers and Employees accounts amounting to P1,271,800.00 and P188,956.36, respectively, remained unliquidated at year-end, in violation of Item 5.8 of COA Circular No. 97-002, due to non-monitoring of cash.

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advances granted to Special Disbursing Officer and Officers and Employees of the Municipality, resulting in the overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements; and,

The accuracy and reliability of the Due to GSIS, Pag-IBIG, and BIR accounts representing contributions withheld from its employees, suppliers and contractors amounting to P453,581.95, P52,271.61, and P2,506,985.98, respectively, as of December 31, 2017 are doubtful due to unreconciled/unremitted prior months contributions and deprived the member beneficiaries from the availment of the privileges and benefits due them.

Guinayangan Qualified/ Modified

The Property, Plant and Equipment (PPE) accounts with a total net book value of P100,941,346.97 are unreliable due to:

a) incomplete conduct of physical count;

b) non-submission of schedule of recorded PPE;

c) incomplete schedule of depreciation;

d) unrecorded PPE purchased under Trust Fund (TF);

e) incomplete and not updated Property Cards (PCs) and Property Acknowledgement Receipts (PARs); and (f) non-maintenance of PPE Ledger Cards (PPELCs).

The year-end balances of Due from Other Funds and Due to Other Funds accounts of P28,325,062.64 and P32,818,618.62, respectively, showed a difference of P4,493,555.98 and its supporting schedules did not tally, hence unreliable;

The balance of Land account of P9,470,309.16 in the Statement of Financial Position as of December 31, 2017 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 in the name of the Municipality;

The balances of inventories and its corresponding expenses accounts totaling P1,129,219.56 and P3,389,267.42 are unreliable because the Report of the Physical Count of Inventories showed a total amount of P472,207.51 only or with a difference of P657,012.05 and for failure to follow the procedures on proper accounting and reporting of inventories;

The balance of Real Property Tax (RPT) and Special Education Tax (SET) Receivables totaling P65,427,620.58 could not be relied upon because:

a) no set up for RPT and SET Receivables for the year was made;

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b) it did not tally with the List of Real Property Delinquent Taxpayers from the Municipal Treasurer’s Office with a total amount of P45,047,801.66;

c) penalties collected totaling P2,584,405.94 were

deducted from these accounts; and

d) the former Municipal Accountant failed to maintain subsidiary ledger for each taxpayer

The Cash in Bank-Local Currency, Current Account (CIB-

LCCA) balance of P110,988,124.59 is unreliable due to erroneous recording of the amount of P11,711,462.64 in the Cash in Bank-Local Currency, Savings Account (CIB-LCSA), unadjusted cancelled/stale checks totaling P107,777.80, unrecorded disbursement of P2,000.00 and unsupported debits/charges by the bank totaling P149,164.72;.

The balance of Breeding Stocks account amounting to P148,000.00 as of year-end is unreliable due to lack of supporting documents for the adjustment of the account amounting to P457,171.63; and,

Causes or reasons for changes between the original and final budget and for material differences between the final budget and actual amounts, and the reconciliation of actual amounts on comparable basis to the budget and actual amounts in the FS were not disclosed neither on the face of the Statement of Comparison of Budget and Actual Amounts (SCBAA) nor in the Notes to FS, thereby denying the users of the FS of the chance to identify these variances and to determine whether the Municipality had operated within its approved budgets for which it is held publicly accountable.

Advances for payroll totaling P4,842,066.30 were recorded as liquidated in the books of accounts despite non-submission of Liquidation Reports by the ICO-Municipal Treasurer, thus resulted in the understatement of Advances for Payroll account with corresponding overstatement of related expenses account;

The regularity, legality and validity of 1,090 paid claims in the total amount of P74,429,421.27 could not be ascertained in the absence of transaction documents due to the failure of the Accounting Office to submit the same to the Audit Team;

The balance of the Accounts Payable account in the TF – Microfinance amounting to P823,106.63 is unreliable due to erroneous classification of the Livelihood Program Fund given by the Provincial Government; and,

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Expenses related to the operations of Municipal Economic Enterprises totaling P1,521,583.73 were charged to the GF, hence resulted in the overstatement of the reported consolidated net operating income of the economic enterprises while correspondingly caused the understatement of net income of GF.

Gumaca Qualified/ Modified

The balance of Property, Plant and Equipment account of P247,796,907.01 was unreliable due to the absence of the Report on the Physical Count of Property, Plant and Equipment and non-maintenance of subsidiary records by the Accounting Unit and property cards by the designated General Services Officer (GSO);

The reliability and accuracy of the balance of Other Receivables account of P841,882.77 is doubtful due to erroneous recording of payments made on the loan under the Sustainable Livelihood Program of the Municipality; and,

Accounts Payable of P1,027,082.77 which have been outstanding for two years or more, were still not reverted to the Unappropriated Surplus of the General Fund (GF), thus existence and correctness of the balance of the account cannot be relied upon.

Infanta Qualified/ Modified

The Property, Plant and Equipment (PPE) accounts in the Financial Statements totaling P85,729,442.24 (excluding Land, Buildings, Public Infrastructures and Construction in Progress) as of year-end 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, thus showing a variance of P26,320,134.81, contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I;

The valuation of Land account of P32,825,060.76 is doubtful due to non-recognition of lots owned by the Municipality in the absence of valuation as required under Paragraphs 14(a) and 14(b) of the Philippine Public Sector Accounting Standards (PPSAS) 17;

The year-end balance of the Due from Other Funds of P15,371,182.70 does not reconcile with its reciprocal account Due to Other Funds with a negative balance of P4,736,942.45 or a difference of P20,108,125.15, thereby casting doubt on the accuracy of the recorded transactions, contrary to Section 112 of PD No. 1445;

The abnormal balances in the accounts Advances for Operating Expenses - P221,500.00, Due to Other Funds - P5,327,959.29 and Trust Liabilities - P40,767.27 or totaling – P5,590,226.56 under the General Fund adversely affected the fairness of the presentation of these accounts in the financial statements, contrary to Section 111(2) of PD No. 1445 and Commission of Audit (COA) Circular No. 2015-009;

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The accuracy and reliability of the Due to GSIS, Pag-IBIG, PhilHealth and BIR accounts representing contributions withheld from its employees, suppliers and contractors amounting to P879,408.75, P483,121.55, P152,531.00 and P1,943,814.20, respectively, as of December 31, 2017 are doubtful due to unreconciled/unremitted prior months contributions and deprived the member beneficiaries from the availment of the privileges and benefits due them;

Purchase of office supplies, drugs and medicines, medical, dental and laboratory supplies, agricultural and marine supplies and other supplies and materials were recorded as an outright expense, contrary to paragraphs 9, 11 and 44 of PPSAS 12, thus understating various inventory account by P2,021,086.65 and overstating various expenses accounts by the same amount;

Advances for Officers and Employees account amounting to P122,060.00 remained unliquidated at year-end, in violation of Item 5.8 of COA Circular No. 97-002, due to non-monitoring of cash advances granted to Officers and Employees of the Municipality, resulting in the overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements; and,

The recognition of the Local Road Network in the books of accounts has not been commenced/started contrary to COA Circular No. 2015-008 which provides for the year period to complete the recognition of the account Local Road Network in the books of accounts, thus Infrastructure Assets account was understated by undetermined amount of unrecorded road networks.

Jomalig No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Lopez Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) accounts with a total net book value of P156,471,322.10 as of year-end are unreliable due to failure to:

a) complete the conduct of physical count;

b) maintain complete and updated Property Cards (PCs);

c) submit the complete schedule of recorded PPE; and

d) provide depreciation for Other Land Improvements account of the General Fund (GF).


a) the amount set up for these receivables from 2002 to 2017 were only based on Assessment Rolls of the Municipal Assessor’s Office;

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b) it was not supported with a schedule of individual taxpayers from whom the amount will be collected; and

c) non maintenance of subsidiary ledger for each taxpayer.

The balances of inventories and its corresponding expenses accounts totaling P9,039,514.83 and P8,362,428.70 are unreliable due to failure to: a) conduct the physical count and submit the Report of the Physical Count of Inventories (RPCI); and b) follow the procedures on proper accounting of inventories;

The balance of Land account of P8,602,930.00 in the Statement of Financial Position as of December 31, 2017 could not be relied upon due to the recording of 13 parcels of land at market value instead of at their purchase cost or fair value for donation; and,

Operating loss of Lopez Municipal Economic Enterprises Unit (LMEEU) is understated by the cost of repairs made to the Slaughterhouse amounting to P43,994.00 which was reported as expense of GF.

Lucban No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Macalelon Unqualified/ Unmodified

Mauban Qualified/ Modified

The Property, Plant and Equipment (PPE) account in the Financial Statements totaling P728,230,091.71 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, contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I;

Land account recorded in the books of General Fund at P68,676,114.43 has an unaccounted balance of P29,629,786.28, contrary to Section 111 of Presidential Decree (PD) No. 1445, thus casts doubt on the accuracy and reliability of the amount presented in the Statement of Financial Position as of December 31, 2017;

Land account recorded in the books at P88,146,258.14 includes nineteen (19) parcels of land valued at P13,368,381.00 that were not supported with Transfer Certificate of Title in the name of the Municipality, contrary to Section 39(2) of PD No. 1445 and Section 148 of COA Circular No. 92-386, thus exposing the subject lots to possible third party claims;

Cash Advances totaling P842,836.69 remained unliquidated as at year-end which include balances of P90,000.00 for intelligence and P400,000.00 for confidential expenses, in violation of the Commission on Audit (COA)-Department of Budget and Management (DBM)-Department of the Interior

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and Local Government (DILG)-Governance Commission for GOCCs (GCG)-Department of National Defense (DND) Joint Memorandum Circular No. 2015-01, Item 5.8 of COA Circular No. 97-002 and Section 89 of PD No. 1445 due to non-submissiont of documents needed for liquidation, thus exposing the funds to possible loss or misuse and resulted to overstatemen of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements;

Purchase of office supplies, medical, dental and laboratory supplies, agricultural and marine supplies, other supplies and materials, and equipment were recorded as an outright expense, contrary to paragraphs 9, 11 and 44 of Philippine Public Sector Accounting Standards (PPSAS) 12 and paragraph 30 of PPSAS 17, thus understating various inventory and equipment accounts by P2,571,340.25 and overstating various expenses accounts by the same amount;

Loans Receivables - Others from various debtors totaling P13,992,304.10 remained uncollected for several years, due to lack of efforts to enforce the repayment scheme, and to monitor the status/payment of the project, contrary to Sections 2 and 111 of PD No. 1445 and Section 63 of the Government Accounting and Auditing Manual (GAAM), Volume I, thereby exposing the livelihood projects/programs to sustainability risk and may further result in the loss of government funds.

Mulanay Unqualified/ Unmodified

Padre Burgos Qualified/ Modified

Property, Plant and Equipment (PPE) of P29,242,654.72 in the Financial Statements is not reliable due to non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE). Moreover, Property Cards for PPE were not maintained by the Treasurer’s Office and reconciliation of the same was not made with the Accounting Office.

Twenty parcels of land recorded in the books at P4,801,270.00 were not supported with Transfer Certificate of Titles, thus exposing the subject lots to third party claims. Moreover, two donated parcels of land without valuation was not recorded in the books of the Municipality, hence understating the Property, Plant and Equipment account.

Pagbilao Qualified/ Modified

Various lots were not supported with Transfer Certificate of Title in the name of the Municipality and some lots in the name of the Municipality were not recorded in the books and only the CYs 2016 and 2017 projects pertaining to concreting and improvement of drainage system and line canal amounting to P7,994,480.19 were recorded in the books, contrary to Section 39 (2) of Presidential Decree (PD) No. 1445 and Section 148 of Commission on Audit (COA) Circular No. 92-386 and COA Circular No. 2015-008, thus exposing the subject lots to possible third party claims and understating the Land and Local Road Network Account by undetermined amount.

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Loans Receivables - Others from various debtors totaling P346,588.10 remain uncollected for more than ten (10) years since CYs 2003 and 2004, the years when these were granted due to failure of the Municipal Social Welfare and Development Officer and the Municipal Agriculturist to adopt efficient and aggressive collection strategies, contrary to Section 2 of PD No. 1445, thus exposing the livelihood projects/programs to sustainability risk and may further result in the loss of government funds; and,

Other Receivables account balance of P69,132.25 in the Trust Fund representing KKK Project remained outstanding for a period ranging from 33 to 35 years and the collectibility of the total amount of P40,204.60 is nil because the borrowers/proponents are already dead, thus resulting to loss of government funds contrary to Section 2 of PD No. 1445.

Panukulan Qualified/ Modified

The Property, Plant and Equipment (PPE) accounts in the Financial Statements totaling P41,255,001.96 (excluding Land, Buildings, Public Infrastructures and Construction in Progress) as of year-end 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, thus showing a material variance of P11,096,332.00;

The existence, valuation and ownership of Land account valued at P6,402,741.81 is doubtful due to lack of Transfer Certificate of Title duly issued by the Registry of Deeds and only P601,100.00 was with appropriate subsidiary ledger, thereby exposing the same to third party claims and may result in the overstatement of the assets of the government;

The valuation and existence of the inventory account balances as of year-end totaling P251,371.41 could not be ascertained due to the failure of the Municipality to conduct its physical count and to submit the Report of the Physical Count of Inventories (RPCI) as well as to prepare and maintain supplies ledger cards and stock cards; and,

Unaccounted balance of 95% or P497,582.38 was included in the Other Payable account, hence affecting the reliability of balance of the account of P522,670.18 as of December 31, 2017.

Patnanungan Non-rendition of the records and accountabilities resulted in the unreliability of Receivables (Due from Officers and Employees), Municipal Treasurer and the former Assistant Municipal Treasurer, amounting to P13,231,122.39 and P262,886.69, respectively;

Non-rendition of the records and accountabilities resulted in the unreliability of Receivables (Due from Officers and Employees), Municipal Treasurer and the former Assistant Municipal Treasurer, amounting to P13,231,122.39 and P262,886.69, respectively;

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The Property, Plant and Equipment presented in the Financial Statements totaling P9,217,935.00 is not reliable as to existence and valuation due to failure of the Municipality to conduct physical inventory per type of property and use of lapsing schedule instead of maintaining Subsidiary Ledgers in the Accounting Office, in violation of Sections 119, 120 and 124 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I;

Cash advances totaling P353,568.15 remained unliquidated as of December 31, 2017, which includes unexpended balances of P65,959.60, in violation of Commission on Audit (COA) Circular No. 97-002, thus exposing the fund to possible loss or misuse and understating the expenses accounts and overstating the advances account by an amount equivalent to the unreported disbursements;

The Municipal Accountant failed to set up Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable due to non-submission of the certified list of taxpayers by the Municipal Treasurer, in violation of Section 20 of the MNGAS for LGUs, Volume I, hence the RPT and SET Receivables totaling P15,073,645.43 as of December 31, 2017 was unreliable;

Supplies and Materials expenses for Calendar Year 2017 totaling P3,712,481.99 could not be ascertained due to non-maintenance of supplies ledger cards and stock cards and non-submission of Summary of Supplies and Materials Issued (SSMI), contrary to Sections 114, 119 to 121 of the MNGAS for LGUs, Volume I;

Receivables of P146,569.74 were not supported with details and documentation due to absence of records, contrary to Section 111(1) of PD No. 1445, casting doubt on the validity of the account balances as well as its collectibility; and,

Unaccounted balance of P230,240.42 recorded under Due to NGAs account which have been outstanding for more than two years were not reverted to the Unappropriated Surplus of the National Treasury, contrary to Section 98 of PD No. 1445, thus these may no longer represent valid claims and the validity, existence and correctness of the balance of the account cannot be relied upon.

Perez Qualified/ Modified

Guaranty/Security Deposits Payable recorded in the Trust Fund (TF) totaling P1,044,092.91 were not supported with details/breakdown, thus validity and accuracy of the account cannot be relied upon;

Checks totaling P99,630.11 remain outstanding as of December 31, 2017 due to the failure of the Municipal Treasurer to send written notices to payees of checks one month before these issued checks become stale, thus these checks were already over six months from the date of issue and considered as stale and will be dishonored if presented in the depository bank for encashment. Moreover, the

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Municipal Accountant failed to prepare the necessary adjusting entries on the accounts affected, thus understating the cash balance and payable/liability accounts;

Accounts Payable of P64,212.00 which have been outstanding for two years or more, was still not reverted to the Unappropriated Surplus of the General Fund (GF), thus these may no longer represent valid claims and the validity, existence and correctness of the balance of the account cannot be relied upon;

Due to Bureau of Internal Revenue and Philippine Health Insurance Corporation amounting to P42,324.29 and P5,434.14, respectively, remain unremitted as of December 31, 2017 due to the inability of the Municipal Accountant to provide its details/breakdown, thus depriving the government of the immediate use of the funds and the member beneficiaries from the availment of the privileges and benefits due them and casting doubt on the accuracy and reliability of the accounts; and,

Due from LGUs amounting P14,357.22 remain dormant since 2010 due to possible error in recording of collection and transfer of Special Education Tax (SET) from the GF to the Special Education Fund, thus misstating the affected accounts in the financial statements.

Pitogo Qualified/ Modified

Property, Plant and Equipment (PPE) of P28,560,189.69 in the Financial Statements (FS) is not reliable due to non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE). Moreover, Property Cards for PPE and Work Animals were not maintained by the Treasurer’s Office and reconciliation of the same was not made with the Accounting Office; and,

School Buildings under the Special Education Fund (SEF) of P1,042,567.57 was not provided with depreciation due to the absence of records and supporting documents, resulting in the understatement of the related expense account and overstatement of the equity and asset accounts.


The Municipality still failed to submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and Report on the Physical Count of Inventories (RPCI), contrary to Section 124 of the Manual on the New Government Accounting System (MNGAS), for LGUs, Volume I, hence the recorded balance of the Property, Plant and Equipment, except Land totalling P68,299,294.44 and inventories valued at 396,360.76 could not be determined;

The Municipal Accountant failed to set up Real Property Tax (RPT) and Special Education Tax (SET) Receivables due to non-submission of the certified list of taxpayers by the Municipal Treasurer in violation of Section 20 of the MNGAS for Local Government Units (LGUs) Volume I, hence RPT and SET Receivables totalling P2,905,167.18 as of December 31, 2017 were unreliable; and,

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Advances to Officers and Employees in the amount of P240,649.00 remain unliquidated at year end, although the purpose for which it was granted has been served, in violation of Section 5.8 of Commission on Audit (COA) Circular No. 97-002, thus overstating the asset account and understating the respective expense account in the amount which corresponds to the disbursements.

Polillo Qualified/ Modified

The Property, Plant and Equipment (PPE) accounts in the Financial Statements totaling P53,591,223.14 (excluding Land, Buildings, Public Infrastructures and Construction in Progress) as of year-end 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, thus showing a variance of P1,328,617.79, contrary to Section 114 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I.


The existence, completeness and reliability of the Property, Plant and Equipment (PPE) totaling P61,042,407.28 could not be ascertained due to the failure of the General Services Officer (GSO) – Designate to submit to the Audit Team the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and to reconcile the same with the PPE ledger cards;

The Municipal Accountant failed to set up Real Property Tax (RPT) and Special Education Tax (SET) Receivables due to non-submission of the certified list of taxpayers by the Municipal Treasurer, hence the RPT and SET Receivables totaling P11,372,943.54 as of December 31, 2017 was unreliable;

The accuracy and reliability of the Due to BIR, GSIS, Pag-IBIG and PhilHealth accounts are doubtful due to failure of the Accounting Office to conduct periodic reconciliation of the amounts withheld to remittances made resulting to unremitted/unreconciled balances of P696,768.82, P135,575.16, P2,288.22 and P11,925.00, respectively;

Accounts Payable of P742,542.31 and Due to Officers and Employees of P748.16, which have been outstanding for two years or more, were still not reverted to the Unappropriated Surplus of the General Fund, thus these may no longer represent valid claims and the validity, existence and correctness of the balance of the account cannot be relied upon; and,

The accuracy and reliability of the Cash-Local Treasury, Cash in Bank-Local Currency, Current Account, and Due to GOCCs accounts in the Trust Fund were doubtful due to double recording of collection from the Philippine Health Insurance Corporation (PhilHealth) amounting P46,750.00 and unrecorded deposit of collections from Philippine Charity Sweepstakes Office (PCSO) amounting P44,239.08, thus resulting in misstatements of the said accounts as of year-end.

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Real Qualified/ Modified

The Property, Plant and Equipment (PPE) account in the Financial Statements totaling P163,191,357.01 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, contrary to Section 114 of the MNGAS for LGUs, Volume I. for Local Government Units (LGUs), Volume I;

The Real Property/Special Education Tax Receivables set up at the beginning of the year were based on the Assessment Roll and not on the certified list of actual taxpayer’s payables, contrary to Section 20, of the MNGAS for LGUs, Volume I. Also, 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 P7,428,317.20, thus validity and accuracy of the year-end balance of Real Property/Special Education Tax Receivables totaling P33,086,376.40 is unreliable;

Unserviceable property, plant and equipment valued at P5,290,743.54, net of depreciation were still not disposed of, contrary to Section 79 of Presidential Decree (PD) No. 1445 and Section 125 of the MNGAS for LGUs, Volume I, resulting in their further deterioration, reduction of economic value, and loss of additional income that could have been realized from sale thereof. The Inventory and Inspection Report of Unserviceable Property (IIRUP) included heavy equipment amounting to P1,975,000.00 ownership over which is not established and not in the Accounting records thus understating the PPE accounts by the same amount; and,

Cash Advances totaling P21,663.66 remained unliquidated as at year end, in violation of Item 5.8 of COA Circular 97-002 and Section 89 of PD No. 1445 due to non-submission of documents needed for the liquidation, thus exposing the funds to possible loss or misuse and resulted to overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements.

Sampaloc Qualified/ Modified

Land account recorded in the books at P2,579,050.00 includes 14 parcels of land 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 in violation of Section 39(2) of Presidential Decree (PD) No. 1445 and Section 148 of COA Circular No. 92-386, thus exposing the subject lots to possible third party claims; and,

Eight (8) motor vehicles received as donations were not recorded in the books as of year-end due to the absence of fair values, contrary to Philippine Public Sector Accounting Standards (PPSAS) 17 resulting in the understatement of the Motor Vehicles account. Moreover, several motor vehicles were not yet registered in the name of the Municipality, contrary to Section 7 of Republic Act (RA) No. 4136. Furthermore, unserviceable motor vehicles were not dispose off contrary to Section 79 of PD No. 1445.

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San Andres

Qualified/ Modified

The valuation and existence of the recorded Property, Plant and Equipment (PPE) totaling P58,814,105.03 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);

Land Improvements account of P324,493.65 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 P1,081,640.00 remain unliquidated as at year-end, thus exposing the funds to possible loss or misuse and resulting in overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements;

Due from NGAs account totaling P391,808.89 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; and,

Special accounts for the operation of public utilities and economic enterprises were not maintained in the General Fund (GF), thus depriving the Municipality and the users of the financial statements of the vital information on their operations and utilization of funds.

San Antonio

Qualified/ Modified

The Property, Plant and Equipment account balance of P54,488,245.33 is unreliable due to

a) non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) caused by incomplete conduct of physical count;

b) non-recording of properties purchased out of Trust Fund totaling P357,800.00 and vehicles received as donation;

c) construction in Progress accounts were not used for on-going infrastructure projects at year-end; and

d) various PPE totaling P2,490,024.42 were recorded as outright expense, contrary to Sections 114 and 124, Volume I and Section 57, Volume II of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Section C.3, Chapter V of the Manual on the Property Custodianship, COA Circular No. 2015-009, Paragraphs 27 and 29 of Philippine Public Sector Accounting Standards (PPSAS) 1 and Paragraph 30 of PPSAS 17;

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Land account of P10,211,806.95 is unreliable due to recording of 12 donated lots totaling P1,862,190.00 which were based on their market values instead of appraised values, 11 lots not supported with Transfer Certificate of Title (TCT) due to lack of necessary documents, five of which were recorded at acquisition cost of P3,090,440.00 and the other six not recorded due to absence of costs, unidentified land recorded at P61,000.00, and unadjusted prior years’ erroneous additions of P165,000.00, contrary to Section 72 of the MNGAS for LGUs, Volume III, Sections 111 and 112 of PD No. 1445 Section 148 of COA Circular No. 92-386, thus ownership over the lots was not established and exposing the same to third party claims and land disputes;

The Real Property Tax/Special Education Tax (RPT/SET) Receivable set up at the beginning of the year for P3,600,000.00 was not based on the Real Property Tax Account Register/Taxpayer’s index card, contrary to Section 20 of the MNGAS for LGUs, Volume I, thus, it was short of P4,045,026.73 based on the complete certified list of taxpayers and rendered the total year-end balance of P181,402.95 understated by P4,045,026.73;

Reconciling items amounting to P938,606.58 were not immediately adjusted contrary to COA Circular No. 96-011 and Section 111 of PD No. 1445, rendering the Cash in Bank, Local Currency, Current Account balance of P73,028,656.56 unreliable. The reconciling items include outstanding checks totaling P839,587.56 which become stale due to the failure of the Municipal Treasurer to send written notices to payees of checks one month before these checks become stale, contrary to Sections 59 and 61 (6) of the MNGAS for LGUs, Volume I;

The Receivables account balances totaling P348,271.67 as of December 31, 2017 are dormant, thus unreliable and affecting its fair presentation in the financial statements, contrary to Paragraphs 27 and 29 of PPSAS 1 and COA Circular No. 2016-005; and,

Cash advances (CAs) of P200,000.00 remained outstanding at year-end due to the failure of the accountable officer to liquidate CAs within the reglementary period and the Municipal Accountant to grant additional CAs despite non-liquidation of the previous CAs, contrary to COA Circular No. 97-002, hence expense is understated by the same amount. Meanwhile, the Advances for Payroll account was understated by P3,989.56 due to erroneous recording of liquidation reports, contrary to Paragraphs 27 and 29 of PPSAS 1.

San Francisco Qualified/ Modified


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Ledger balances of Cash on Hand and Cash in Bank-Local Currency were not tally with the cashbook, with discrepancies of P183,558.08 and P2,169,215.38, respectively, which could not be reconciled due to incomplete accounting records, rendering the account balances unreliable;

The Due to National Government Agencies (NGAs) account of P3,451,109.13 includes unaccounted beginning balance of P746,410.23 which was dormant for seven years, 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, 2017 showed a difference of P4,408,311.47 which could not be reconciled due to incomplete accounting records;

Construction in Progress account balance of P15,850,825.75 of which P4,556,325.45 was not transferred to the corresponding asset account, thus casting doubts on the validity of the accounts; and,

The unexpended balance of appropriation for Local Disaster Risk Reduction Management (LDRRM) Fund for CY 2017 was not transferred to the Special Trust Fund in the Trust Fund books. Moreover, the cash corresponding to the unexpended balance of appropriation for the fund in the amount of P9,100,423.30 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/ Modified


Cash Advances totaling P75,791,123.00 remain unliquidated as at year-end, thus exposing the funds to possible loss or misuse and resulting to overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements; and,

Receivable accounts totaling P1,252,106.94 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.

Sariaya Qualified/ Modified

The reported year-end carrying balances of the Property, Plant and Equipment (PPE) accounts totaling P156,296,212.49 is unreliable as to valuation and existence due to incomplete Report on the Physical Count of Property, Plant and Equipment (RPCPPE) due to incomplete inventory taking; incomplete details of properties amounting to P16,334,954.69 due to lack of property records; net discrepancy of P439,406.47 between the RPCPPE and schedule; and inclusion of unserviceable properties; contrary to Sections 114, 124 and 125 of the Manual on the New Government Accounting System (MNGAS) for Local

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Government Units (LGUs), Volume I, Section C.3, Chapter V of the Manual on the Property Custodianship and Sections 79 and 111 of Presidential Decree (PD) No. 1445;

Penalties and discounts on real property and special education tax collections totaling P5,516,876.44 and P2,293,194.88, respectively, were not recorded in the books while the Real Property Tax (RPT)/Special Education Tax (SET) receivables and income were recorded net of discount, inclusive of penalties and prior to 2002 collections, contrary to Section 21, 22 and 23 of the MNGAS for LGUs, Volume I, Commission on Audit (COA) Circular No. 2015-009 and Section 112 of PD No. 1445, thus the affected property tax revenue and receivable accounts were not fairly presented in the financial statements;

Receivables totaling P881,526.00 are still outstanding for a period ranging from ten to 18 years, thus unreliable and affecting its fair presentation in the financial statements, contrary to Paragraph 27 of the Philippine Public Sector Accounting Standards (PPSAS) 1; and,

Guaranty/Security Deposits Payable of P32,826.85 which have been outstanding for more than two years were not reverted to the Unappropriated Surplus of the General Fund, contrary to Section 98 of PD No. 1445, thus casting doubt on the validity and reliability of the account balance presented in the financial statements.

Tagkawayan Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) accounts totaling P145,180,011.38 as of year-end are unreliable due to failure to:

a) conduct the physical count;

b) maintain complete and updated property cards (PCs);

c) reclassify the fully depreciated PPE totaling P1,283,880.50 from Other PPE to its proper account;

d) facilitate the proper dropping from the books of those destroyed by fire totaling P1,241,778.82; and

e) identify those unaccounted in Other PPE account totaling P2,936,839.88.


a) the amount set up for these receivables from 2002 to 2010 were only based on Assessment Rolls of the Municipal Assessor’s Office;

b) it was not supported with a schedule of taxpayers from whom the said balance will be collected;

c) it did not tally with the List of Real Property Delinquent Taxpayers from the Municipal Treasure’s Office with a total amount of P43,726,748.68; and,

d) non maintenance of subsidiary ledger for each taxpayer.

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The balance of Land account of P26,320,795.17 could not be relied upon due to non-recording of the three parcels of titled land and inclusion of five titled land but the Municipality has no copy of titles with respective total market values of P872,200.00 and P3,156,097.00;

Ownership over the 21 parcels of land was not safeguarded because of the failure to secure owner’s copy of title for the five parcels from the Registry of Deeds and failure to facilitate the titling of the 16 parcels;

All Cash Advances (CAs) for Confidential Fund (CF) of the incumbent Municipal Mayor were recorded under the Due from Officers and Employees account instead of Advances to Special Disbursing Officers account, thus resulted in the overstatement of the former and understatement of the latter by the unliquidated amount of P230,000.00 at year-end;

Causes or reasons for material differences between the final budget and actual amounts were not disclosed in the Notes to Financial Statements (NFS), thereby denying the users of the FS of the chance to identify these variances and to determine whether the Municipality had operated within its approved budgets for which it is held publicly accountable;

Forty one checks totaling P568,893.35 which are outstanding for more than six (6) months, hence considered stale and non-negotiable, were still not adjusted in the books of accounts, thereby affecting the reliability of cash and other involved accounts; and,

The project “Declogging of Metro Poblacion Canal” with appropriation of P400,000.00 was erroneously incorporated in the appropriation for Capital Outlay, thus the unexpended amount at year end of P302,000.00 was not transferred to the TF and was instead included in the Continuing Appropriation of the General Fund (GF), thereby resulted in the understatement of expenses of GF and of Trust Liabilities - Disaster Risk Reduction and Management Fund (DRMMF) account of Trust Fund (TF).

Tiaong Unqulified/ Unmodified

Unisan Qualified/ Modified

The balances of the Property, Plant and Equipment (PPE) accounts per accounting records totaling P22,650,755.65 and per Report on the Physical Count of Property, Plant and Equipment (RPCPPE) of P21,835,488.98 showed a difference of P815,286.67 which could not be reconciled due to the failure of the Municipal Treasurer (MT) to maintain property cards and lack of property and accounting records in the Accounting Office resulting in an unreconciled amount of P815,286.67;

Biological Assets account of P50,000.00 was not supported with details and documentation due to absence of records, thus casting doubt on the validity of the account balance as well as its collectibility; and,

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Cash advances granted to Municipal officers and employees totaling P6,981.64 recorded under the Advances for Officers and Employees of P6,000.00 and Due from Officers and Employees account of P981.64 remain unliquidated at year-end, resulted to overstatement of the respective asset accounts and understatement of related expenses equivalent to the amount of unreported disbursements.

Rizal Qualified/ Modified

The reliability and accuracy of the year-end balance of the Cash-Local Treasury and Cash in Bank accounts of P89,903,897.83 and P5,566,215,635.47, respectively, remained doubtful due to:

a) discrepancies in the balances of Cash-Local Treasury accounts in the accounting and the treasury books;

b) discrepancies of the bank accounts balances in the accounting, treasury and bank records;

c) failure of the OIC-Provincial Accountant to prepare and submit Bank Reconciliation Statements (BRS) for the three bank accounts;

d) unrecorded/unadjusted reconciling items; and

e) negative bank accounts balances of two special accounts in the General Fund.

The existence and correctness of the reported balances of Inventories and Property, Plant and Equipment accounts amounting to P109,649,183.32 and P7,675,161,980.84, excluding total Construction in Progress of P196,318,623.84, respectively, at year-end could not be ascertained due to: continued failure to conduct the physical count of Inventories; incomplete inventory and unreliable report on the physical count of PPE; lack and/or incomplete supply and property records; and non-recognition of the values of forfeited real properties;

Unbooked donations in kind received from the Department of Health (DOH) under Health Facility Enhancement Program (HFEP) totaling P8,330,049.95 resulted in the understatement of the affected asset accounts by the same amount;

Several accounts which were noted to have abnormal year-end balances in Calendar Years (CYs) 2015 and 2016 totaling P26,018,645.39 remained unadjusted as of December 31, 2017, and more accounts were also noted to have abnormal balances in CY 2017 in the total amount of P21,008,206.33, rendering those accounts’ balances unreliable;

The Due from LGUs and Due to LGUs accounts amounting to P115,460,406.92 and P39,131,276.22, respectively, have discrepancies of P21,401,042.97 and P(1,381,636.90) with their reciprocal accounts in the respective books of the City/Municipalities rendering the said accounts of the Province unreliable; and,

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Prepayments amounting to P5,071,787.17 for insurance of various properties of the Province, which were directly charged to expense account, resulted in the understatement of asset, income and expense accounts by P2,290,878.07 each.

City:

Antipolo City Qualified/ Modified

The balance of Property, Plant and Equipment accounts with a total book value of P3,224,727,278.32 as of December 31, 2017 remained doubtful, and their existence and condition could not be readily and fully established due to unreliable and incomplete report on the physical count of fixed assets, contrary to Section 124 of the Manual on the New Government Accounting System (MNGAS), Volume I;

Most of the 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 P3,739,523,592.25; continuous recognition in the books of accounts the cost of properties that were razed by the fire amounting to P8,530,950.74, incomplete Property Cards being maintained by the General Services Office and non-maintenance of PPE Ledger Cards by the Accounting Office ;

The year-end balance of Cash in Bank - Local Currency Current Account (CIB-LCCA) amounting to P3,145,322,843.89 was overstated by P9,556,310.96 due to unrecorded/unadjusted reconciling items pertaining to CY 2017 and prior years, and delayed submission of the Monthly Bank Reconciliation Statements (BRS) pertaining to the City’s 20 depository accounts, contrary to Sections 3.2 and 3.3 of COA Circular No. 96-001 dated October 2, 1996

Accounts Payable totaling P17,239,783.87 remained outstanding for more than two years, contrary to Section 98 of Presidential Decree (PD) No. 1445, and its validity could not be ascertained due to lack of complete documents to support the claims; and,

Claims of officers and employees amounting to P37,517,351.15 were recorded as Accounts Payable instead of Due to Officers and Employees, affecting the correct presentation of the accounts’ balances in the financial statements.

Municipalities:

Angono Qualified/ Modified

The reliability of the recorded balances of the Property, Plant and Equipment (PPE) accounts costing P370,757,373.46 with a carrying amount of P260,983,246.58, at year-end could not be determined due to:

a) continued inability of the Inventory Committee to conduct a complete physical inventory;

b) incomplete PPE Ledger Cards, Property Cards and Acknowledgement Receipt for Equipment; and

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c) inclusion of unserviceable properties in the books of accounts totaling P24,871,159.81.

Various reconciling items such as unrecorded disbursements and returned checks amounting to P2,193,385.79 remained unadjusted in the books as of year-end, thus affecting the correctness of the Cash in ank account balance of reported in the Financial Statements; and,

The year-end balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P12,624,932.36 and P12,624,932.36, respectively, are doubtful due to the amounts set-up at the beginning of the year were still based on the Summary of Real Property Tax Collectibles for CY 2017, contrary to Section 20 of the Manual on New Government Accounting System, Volume I.

Baras Qualified/

Modified The year-end balances of Property, Plant and Equipment

(PPE) accounts of P131,598,491.96 remained unreliable due to:

a) failure to prepare and submit the complete Report on the Physical Count of Property, Plant and Equipment;

b) incomplete PPE Ledger Cards and Property Cards maintained by the Municipal Accountant and the General Services Officer; and

c) non-reconciliation of the PPE records maintained by the Municipal Accountant and General Services Officer with the required PPE Inventory Report, contrary to the provisions of the Manual on New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I.

The accuracy and reliability of the balance of the Cash in Bank-Local Currency, Current Account (CIB-LCCA) of P93,827,794.45 as of year-end is doubtful due to:

a) the discrepancy of P564,806.24 between the balances of the bank accounts appearing in the accounting and treasury records;

b) discrepancy of P(4,694,527.47) between the balances of the bank accounts appearing in the accounting records and the bank confirmation; and

c) non-submission of Bank Reconciliation Statement for the month of December of the Municipality to the Audit Team. Further, properties worth P48,011,965.34 were not provided with depreciation, contrary to Paragraph 59 of the Philippine Public Sector Accounting Standards 17 – Property, Plant and Equipment (PPSAS 17), thus overstating the value of the Property, Plant and Equipment accounts and understating the Depreciation Expense for the period.

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The reciprocal accounts Due from and Due to Other Funds account with year-end balances of P4,218,584.28 and P17,285,342.64, respectively, still did not reconcile with each other, thus casting doubt as to the accuracy of the recorded transactions and affecting the fair presentation of the said accounts in the financial statements.

Binangonan Qualified/ Modified

The accuracy and validity of the recorded balances of Property, Plant and Equipment (PPE) accounts as well as the existence of the items thereof, costing P1,499,541,450.12 and with a net book value of P1,320,508,219.17 remained unreliable, due to:

a) continuous failure of the Municipality to conduct a complete actual physical inventory of its properties;

b) inadequate/incomplete PPE Ledger Cards and Property Cards (PC);

c) unreconciled balances of General Ledger (GL) and PPE Ledger Cards; and

d) absence of a lapsing schedule.

The correctness of the recorded balance of the Cash in Bank-Local Currency Current Account of P420,151,921.31 is doubtful due to the discrepancies with the balances appearing in the cashbook and the bank confirmation amounting to P(16,524,335.06) and P(5,443,362.64), respectively, contrary to Section 111 of Presidential Decree No. 1445, thus provided inaccurate and misleading information to the users of the financial statements;

Non-recognition of the 50% of prior year’s Public Infrastructure-Roads as part of the Property, Plant and Equipment-Road Networks account due to (a) failure to conduct inventory of Local Road Network; and (b) non-provision of complete description and detailed cost segregation of road components of road projects was contrary to the provisions of COA Circular No. 2015-008 dated November 23, 2015, thus rendering the Road Networks account unreliable; and,

Estimates were again used in setting-up the Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P200,237,716.49 each for Calendar Years (CYs) 2012 to 2017, contrary to Section 20 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, thus rendered the validity and correctness of the recorded balances of said accounts amounting to P157,080,127.37 and P155,642,245.93, respectively, doubtful.

Cainta Qualified/

Modified The reliability of the recorded year-end balances of Property,

Plant and Equipment (PPE) accounts with carrying value P2,230,355,177.07 or 56% of the total assets of the Municipality could not be ascertained due to:

a) absence of a complete report on the physical count of its fixed assets;

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b) continues inclusion of the properties lost/damaged by fire in May 1992 with a net book value of P1,999,978,528.14;

c) no record to completely account every item composing the PPE; and

d) non-provision for depreciation for some of the Municipal properties amounting to P1,091,588,274.95, which mostly represents the unsubstantiated balances of the PPE accounts.

The accuracy of the Municipality’s reported year-end balance of Cash in Bank account of P678,895,518.95 was doubtful, due to the:

a) unreconciled balances in the records of the treasury and bank at P154,310,429.52 and P2,208,405.66, respectively;

b) unrecorded Cash in Bank balance of P130,301.22 maintained with the Land Bank of the Philippines; and

c) existence of various unadjusted reconciling items of P11,707,042.69 in the books of the Municipality, thus provided inaccurate and misleading information to the users of the financial statements.

The accuracy and validity of the year-end balances of Real Property Tax and Special Education Tax Receivables of P442,765,872.57 and P442,704,439.53, 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 2017.

Cardona Qualified/ Modified

The accuracy, validity and existence of the recorded balances of Property, Plant and Equipment (PPE) accounts, costing P160,877,404.81 and with a net book value of P127,710,607.71 remained unreliable, due to:

a) continuous failure of the Municipality to conduct a complete actual physical inventory of its properties;

b) inadequate/incomplete PPE Ledger Cards and Property Cards (PC);

c) unreconciled balances of General Ledger (GL) and PPE Ledger Cards; and

d) absence of a lapsing schedule

The correctness of the recorded balance of the Cash in Bank-Local Currency Current Account of P62,296,717.51 is doubtful due to the discrepancies with the balances appearing in the cashbook and the bank confirmation amounting to P5,420,039.25 and P(929,314.40), respectively, contrary to Section 111 of Presidential Decree No. 1445;

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Non-recognition of the 50% of prior year’s Public Infrastructure-Roads as part of the Property, Plant and Equipment-Road Networks account due to: (a) failure to conduct inventory of Local Road Networks; and (b) non-provision of complete description and detailed cost segregation of road components of road projects was contrary to the provisions of COA Circular No. 2015-008 dated November 23, 2015, thus rendering the Road Networks account unreliable; and,

The accuracy and validity of the year-end balances of Real Property Tax and Special Education Tax Receivables of P11,876,205.37 each are again 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 again not set-up based on the Schedule of Estimated Real Property Tax Receivables for CY 2017, contrary to Section 20 of the Manual on New Government Accounting System, Volume I.

Jalajala Qualified/ Modified

The reliability of the recorded balances of the Property, Plant and Equipment (PPE) accounts with a net book value of P94,981,277.08 as of December 31, 2017 could not be determined, due to:

a) discrepancies between the reported balance of PPE per financial statements (FS) and the balance in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE); and

b) non-submission of a detailed PPE Lapsing Schedule which will validate the correctness of the computed depreciation for the year.

Cash in Bank-Local Currency, Current Account (CIB-LCCA) amounting to P84,374,866.59 is still doubtful due to the failure of the Municipal Accountant to present supporting documents for the unaccounted reconciling item amounting to P148,780.29, P20,412.04 and P6,648.60 under General Fund, Special Education Fund and Trust Fund, respectively, which were adjusted to the Government Equity account, contrary to Sections 4(6) and 112 Presidential Decree (PD) No. 1445, otherwise known as the Government Auditing Code of the Philippines;.

The year-end balance of Cash in Local Treasury account amounting to P402,084.45 is still unreliable, due to the discrepancies with the balance appearing in the records of Accounting and Treasury Offices amounting to P57,753.33 and P10,472.14 in the General Fund and Special Education Fund, respectively; and,

The year-end balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P26,823,815.65 and P26,823,815.65, respectively, are doubtful due to the amounts set-up at the beginning of the year were still based on the estimated collection of the RPT/SEF for CY 2017, contrary Section 20 of the Manual on New Government Accounting System, Volume I

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Morong Qualified/ Modified

The reliability of the recorded balances of the Property, Plant and Equipment (PPE) accounts costing P227,040,650.82 and with a net book value of P186,118,104.83 as of December 31, 2017 could not be ascertained due to:

a) continues inclusion of the costs of properties lost/damaged by fire at the old Municipal building on December 10, 2009;

b) unreliable and incomplete report on the physical count of its fixed assets; and

c) non-provision for depreciation for some of the properties amounting to P24,209,694.75 which represents the unsubstantiated balances of the PPE accounts.

The reliability and correctness of the year-end balances of the Cash in Bank and Cash-Local Treasury accounts with aggregate amounts of P76,661,202.27 and P5,684,730.92, respectively, could not be ascertained due to the absence of periodic reconciliation between the Accounting and Treasury’s records resulting to a total difference of P12,492,211.42, and P12,624.29, correspondingly, not only contrary to Section 181 (c) of the Government Accounting and Auditing Manual (GAAM), Volume I, but likewise exposes the resources of the Municipality to possible misuse and undetected errors or irregularities in the future;

Disbursement Vouchers (DVs) and Liquidation Reports aggregating P4,857,832.36 and P287,990.00, respectively, were not submitted to the Audit Team, thus, the validity and propriety of the disbursements made could not be determined; and,

The Municipality failed to set up the Real Property Tax (RPT) and Special Education Tax (SET) Receivables at the beginning of the year, contrary to Section 20 of the Manual on the New Government Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, due to the continued omission of the Municipal Treasurer to prepare and submit to the Municipal Accountant at the start of the year a certified list of taxpayers and the amount of tax due and collectible as a basis thereof, thus affecting the fair presentation of the Receivable account in the financial statements.

Pililla Qualified/ Modified

The accuracy and existence of the recorded Property, Plant and Equipment (PPE) accounts with a net book value of P155,117,596.87, could not be readily ascertained due to the failure of both the Municipal Accountant and the Property Officer to maintain adequate accounting and property records, respectively, and for the Inventory Committee to conduct complete physical inventory of all its properties and/or submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

Depreciable Property, Plant and Equipment (PPE) in the amount of P77,678,931.46 were not provided with depreciation;

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The correctness of the balance of the Cash in Bank account totaling P132,607,335.72 as at year-end remained doubtful due to the following:

a) unaccounted prior year’s book reconciling items of Cash in Bank-LCCA in the amounts of P73,518,409.13, P24,429,242.36 and P34,659,684.23 under the General Fund, Special Education Fund and Trust Fund, respectively, were closed against the Government Equity and Other Payables accounts without the proper documents to support the propriety and nature of the transaction covering the said amounts, thereby rendering doubtful not only the Cash in Bank account but also the Government Equity and Accounts Payable accounts;

b) discrepancy of P3,652,935.49 between the balances of the bank accounts appearing in the accounting and treasury records. Finally, disbursements vouchers under the General Fund, Special Education Fund and Trust Fund amounting to P4,796,706.77, P1,560,091.09 and P2,157,799.28, respectively, covering the periods January 2016 to December 2016 remained unsubmitted.

The Municipality failed anew to submit the collection reports, their supporting documents and other financial reports to the Office of the Auditor, hence deficiencies relative thereto were not known and communicated to concerned agency officials for appropriate action.

Rodriguez Qualified/ Modified

The reliability of the recorded Property, Plant and Equipment (PPE) accounts with a net book value of P702,586,680.46 or 47.24% 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 failure of the Municipality to render a complete physical inventory of its properties for the year;

b) non-provision of depreciation for equipment costing P637,268.00;

c) difference of P4,786,043.78 between the carrying amount per Trial Balance and per Lapsing Schedule; and

d) Inclusion of obsolete and unserviceable items for disposal totaling P1,997,147.00.

The reliability and correctness of the year-end balances of Cash in Bank and Cash-Local Treasury accounts amounting to P601,498,500.88 and P42,411,383.68, 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 necessary adjustments for all valid reconciling items in the books of the Municipality; and,

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Cash advances amounting to P12,469,384.49 remained unliquidated as of year-end, thus exposing the funds in the custody of the accountable officers to possible risks of misuse and/or misapplications, and resulted in the overstatement of receivables and understatement of expense accounts in the financial statements of the Municipality.

San Mateo Qualified/ Modified

The continued failure of the Municipality to:

a) render a complete physical inventory of its properties;

b) maintain a sufficien t property records of Accounting and General Services Offices; and

c) provide complete and detailed PPE lapsing schedule rendered the recorded net book value of PPE accounts of P513,944,090.39 or 40.99% of a total assets unreliable and its existence could not be fully determined.

The reliability and correctness of the year-end balances of Cash in Bank, Local Currency, Current Account amounting to P496,709,249.44 could not be ascertained due to the absence of periodic reconciliation between the Accounting and Treasury records; and,

Uncollected tuition fees and other dues from students of San Mateo Municipal College (SMMC) amounting to P10,379,197.76 were not recorded in the books of accounts, thus resulted in the understatement of Account Receivables and Income accounts both by the same amount in the Financial Statements of the Municipality.

Tanay Qualified/

Modified The year-end PPE accounts balances of P789,312,851.80

remained unreliable due to:

a) continuous failure of the Municipal Government to submit completely the physical inventory report of its properties;

b) discrepancy between the accounting records and the submitted Report on the Physical Count of Property, Plant and Equipment on some of the PPE accounts that has been counted as of December 31, 2017; and

c) inclusion of missing equipment and motor vehicles in the book of accounts. Fund, respectively, that have no proper documents to support the propriety and nature of the transaction covering the said amounts, thereby rendering doubtful not only the Cash in Bank account but also the Government Equity and Accounts Payable accounts.

The year-end balance of the Cash and Cash Equivalents account totaling P440,128,621.30 for CY 2017 is doubtful due to adjustments made to reconcile the Cash in Bank – LCCA account in the amounts of P2,243,180.06, P11,685.44 and P5,382.87 in the General Fund, Special Education Fund and Trust Fund: and,

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Discrepancies between the Accounting and Treasury records were still noted despite prior period findings.

Taytay Qualified/ Modified

The reliability of the recorded balances of the Property, Plant and Equipment (PPE) accounts costing P1,225,770,987.27 with a carrying amount of P790,345,920.24, at year-end could not be determined due to:

a) continued inability of the Inventory Committee to conduct a complete physical inventory;

b) incomplete PPE Ledger Cards, Property Cards and Acknowledgement Receipt for Equipment; and

c) inclusion of cost of public market of P17,902,908.91 destroyed by fire in the Municipality’s books of accounts.

The recorded balances of the Cash in Bank accounts at year-end amounting to P467,204,301.01 are unreliable due to the inability of the Municipal Accountant to:

a) ascertain the validity of book reconciling items identified in previous years aggregating to at least P6,375,008.07; and

b) maintain accurate subsidiary ledger per bank account.

The year-end balances of Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P15,166,894.08 and P15,166,894.08, respectively, are unreliable due to:

a) failure of the OIC-Municipal Accountant to maintain subsidiary ledger of taxpayers per Real Property Unit (RPU);

b) inclusion of total delinquent RPT collectibles as of December 31, 2016; and

c) deduction of uncollectible real property tax for restricted properties.

The Other Receivables account’s balance of P22,499,117.98 as of year-end is unreliable due to the inclusion of various unrecorded disbursements incurred in previous years totaling P17,692,134.96.

Teresa Qualified/ Modified

The existence and accuracy of the recorded balances of the Property, Plant and Equipment (PPE) accounts with a net book value of P116,960,242.04 as of December 31, 2017 remained doubtful due to:

a) he failure of the Municipality to conduct physical count of its properties and to submit the report thereon to the Office of the Auditor;

b) non-provision of depreciation for PPE costing P10,137,601.49;

c) inadequate property records maintained by the General Services Office and Accounting Office; and,

d) non-recording of donated motor vehicles in the books of the Municipality.

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The recorded balances of the Cash in Bank – Local Currency, Current Account of P186,163,853.85 at year-end remained doubtful due to the discrepancies in the bank accounts’ balances in the Accounting and Treasury records; and,

Tthe continuous failure of the Accounting Office to identify the details of the reconciling items per book amounting to P260,653.37.

Region IV-B MIMAROPA

Marinduque Qualified/ Modified

Stale checks totaling P119,104.54 which have been outstanding for over six months as of year-end were not yet canceled which understated the balances of Cash-in-Bank - Local Currency, Current Account (LCCA) and the related Payable account balances by that amount as of year-end;

Accuracy, propriety, completeness and existence of (i) Property, Plant and Equipment (PPE) accounts with reported net carrying value of P850,465,032.24; (ii) Receivables - Disallowance and Charges account amounting to P3,556,815.30; and (iii) Payables totaling P261,644,121.53 at year-end could not be ascertained due to failure of Accounting Office and PGSO to fully reconcile their records and absence of supporting documents; and,

Reported balance of account Receivable-Disallowances/Charges amounting to P12,587,507.55 as of December 31, 2017 was deficient by P4,761,217.76 thereby understating the balance of the account and that of Equity as of year-end.

Municipalities:

Boac Qualified/ Modified

The existence and accuracy of the balances of the Property Plant and Equipment (PPE) at year-end amounting to P106,633,377.64 was not fully established due to

a) continuous inclusion of unserviceable and missing PPEs despite prior year’s observation; and,

b) non-submission of a complete Report on the Physical Count of Property, Plant and Equipment (RPCPPE) in contrast with Section 124 and 125, Volume 1 of the Manual on New Government Accounting System for Local Government Units.


The existence, accuracy and reliability of Property Plant and Equipment (PPE) accounts with total net book value of P88,834,654.36 as of December 31, 2017 could not be ascertained due to

a) continued failure of the Municipality to conduct a complete physical inventory taking of all the properties and submit the corresponding Report on the Physical Count of PPE (RPCPPE);

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d) non-provision of depreciation for some PPE accounts; and,

c) non-disposal of unserviceable properties bloating the Municipality’s assets in undetermined amount.

Gasan Qualified/

Modified Stale checks totalling P50,953.24 which have been

outstanding for over six months as of year-end are still reflected as reconciling items on the Bank Reconciliation Statements (BRS) as of December 31, 2017 instead of cancelling them contrary to Section 59 of the New Government Accounting System (NGAS) Manual for LGUs, Volume I thus, misstating the balances of Cash-in-Bank and the related Payable account balances as of year-end;

The Property, Plant and Equipment (PPE) account year-end balances in the books and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) showed a discrepancy of P37,181,934.96 due to failure of the Municipal Accounting Office (MAO ) and General Services Office (GSO) to reconcile their records; and,

Various unserviceable and non-existent properties amounting to P3,482,734.76 and P1,485,423.96, respectively still form part of the reported balance thereby rendering the PPE account of P151,452,580.89 in the Statement of Financial Position doubtful.

Mogpog Qualified/

Modified The Property, Plant and Equipment (PPE) account year-end

balances in the books and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) showed a discrepancy in the total amount of P82,630,852.93 due to failure of the Municipal Accounting Office (MAO) and General Services Office (GSO)/Municipal Treasurer’s Office (MTO) to reconcile their records in violation of Section 114 of the Manual on New Government Accounting System (MNGAS); and,

Non-provision of depreciation to PPEs under the General

Fund, Special Education Fund and Trust Fund amounting to P7,384,795.38, P1,540,790.64 and P7,483,074.99, respectively due to inadequacy of records affected the carrying value of the PPE in the financial statements.

Santa Cruz Qualified/

Modified The reported balance of Property, Plant and Equipment

(PPE) accounts totaling P297,409,415.53 or 57.14% of the total assets could not be thoroughly verified and relied upon due to the failure of the Municipal Accounting Office and the General Services Office to reconcile their records; and various unserviceable equipment amounting to P5,475,848.85 are still included in the PPE account and not yet derecognized in the books.

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Torrijos Qualified/ Modified

Discrepancy between the Property, Plant, and Equipment (PPE) account and Report on Physical Count of Property Plant and Equipment (RPCPPE) by P966,846.06 and the inclusion of unserviceable properties with net unrealizable value of P108,668.45 in the books rendering the validity of year-end balance of the PPE Account doubtful.

Occidental Mindoro Qualified/ Modified

Non-reconciliation of property cards and accounting ledger cards showing a net difference of P95,651,900.62 between the two records rendered the Land Improvements account balance of P179,363,693.17 (net of depreciation) as of year-end doubtful.

Municipalities:

Abra de Ilog Qualified/ Modified

The existence, valuation and completeness of the yearend balances of Inventories and Property, Plant and Equipment accounts amounting to P4,432,746.09 and P133,091,667.43, respectively, could not be ascertained due to failure of the Municipality to conduct physical inventory and submit the reports thereon and reconcile balances with the general ledger.

Calintaan Qualified/ Modified

Failure to recognize in the books of accounts at least 50% of public infrastructures completed in previous years contrary to the Philippine Public Sector Accounting Standards (PPSAS) No. 17 and paragraph 3.7 of COA Circular No. 2016-04 dated September 30, 2016 due to lack of Registry of Public Infrastructures as basis for recording thereof resulted in understatement of the Property, Plant and Equipment account balance of December 31, 2017.

Looc Unqualified/ Unmodified

Lubang Unqualified/ Unmodified

Magsaysay Qualified/ Modified

Land account was reported at its current assessed value in the inventory report and the acquisition cost was not indicated casting doubts on the reliability of its valuation rendering the yearend PPE account balance doubtful; and,

The validity of Accounts Payable balanve of P4,961,226.69 as of December 31, 2017 is doubtful due to the presence of dormant, long outstanding payables and the inadequacy of pertinent documents to substantiate the regularity and existence of the obligation.

Mamburao Qualified/ Modified

The Municipality failed to complete the conduct of physical inventory and failed to reconcile the ledger balance of Property, Plant and Equipment totaling P163,900,299.36 (gross) with the inventory report totaling P1,935,442.70, showing a material discrepancy of P161,964,856.66;

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The Cash in Bank account was overstated by P14,330,978.63 for failure to record 14 check disbursements totaling P14,330,578.63, among others; and,

The balances of three inventory accounts are overstated by P3,008,829.06 since non-existing items were still carried in the books.

Paluan Qualified/ Modified

The existence, completeness and valuation of the Property, Plant and Equipment having a net book value of P216,935,349.22 as of December 31, 2017 could not be ascertained because of the failure of the Municipality to conduct physical inventory; and,

The Loans Payable – Domestic outstanding balance in the books as of December 31, 2017 amounting to P30,616,572.90 was overstated by P4,088,583.65 because of the failure of the Acting Municipal Accountant to reconcile records with the local creditors regularly.


The correctness and existence of the Property, Plant and Equipment account balance of P80,858,320.35 (net of depreciation) could not be ascertained due to failure of the Municipality to maintain complete inventory records and to conduct complete physical count of all its properties.

Sablayan Qualified/ Modified

The ledger balance of Property, Plant and Equipment totaling P809,684,626.73 (gross) is not reconciled with the inventory report totaling P746,550,855.88, showing a discrepancy of P63,133,770.85; and,

The Inventory accounts valued in the books at P22,247,536.73 are also not reconciled with the inventory report totaling P9,792,928.40, showing a difference of P12,454,608.33

San Jose Qualified/ Modified

.

The existence, completeness and valuation of the Property, Plant and Equipment with carrying value of P384,939,487.33 as of December 31, 2017 could not be ascertained due to the failure of the Inventory Committee to conduct complete physical count of all the Municipality’s PPE including the Local Road Networks and the continued failure of the Municipal Accountant and the General Service Officer to maintain the PPE ledger cards and the property cards, respectively;

25 parcels of lots with total market and assessed value of P223,311,940.00 and P36,751,239.00, respectively, under the name of the Municipality were not recognized in the books of accounts rendering the completeness and valuation of Land account balance of P9,850,000.00 as of yearend doubtful;

The existence and accuracy of Inventories amounting to P16,240,962.35 as of year-end could not be ascertained due to the:

a) failure of the Inventory committee to conduct physical count of Inventories;

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b) non-maintenance of supplies ledger cards and the stock cards by the Municipal Accountant and the OIC-GSO, respectively;

c) issuance of inventories totalling P15,237,424.75 were not covered with Requisition and Issue Slip and were still carried in the books for failure of the OIC-GSO to submit the Summary of Supplies and Materials Issued to the Municipal Accountant to enable recognition of expenses;

d) medicines received from the Department of Health in CY 2017 totaling P333,963.80 were not accounted in the books of accounts; and,

e) Float Buoy Markers amounting to P89,475.00 were recorded as Inventories instead of PPE.

The accuracy, validity and completeness of receivables, accounts payable and deferred income account balances reflected in the Statement of Financial Position as of December 31, 2017 were doubtful due to

a) discrepancies between balances per confirmation with records of Municipal Treasurer’s Office and the Municipal Accounting Office;

b) overstatement of Other Deferred Credits account balance by P20,635,871.20;

c) absence of records confirming the legality and validity of claims against the debtors for Loans Receivable Others account balance of P13,048,824.04; and

e) the failure to account obligations for unpaid electric bills.

The Trust Liabilities – Disaster Risk Reduction and Management account balance was understated for the failure to transfer and record the unexpended balance of CY 2017 Local Disaster Risk Reduction Management Fund amounting to P14,317,460.00.


The existence, completeness and valuation of Property, Plant and Equipment valued in the books of accounts at P151,294,598.83 could not be ascertained for failure of the Inventory Committee to conduct physical inventory.

Oriental Mindoro Qualified/ Modified

The accuracy of the balance of the account Cash-Local Treasury of P40,394,359.86 as of year-end was unreliable due the unreconciled difference of P30,158,878.93 between the accounting and treasury records (cashbooks) on account of the erroneous recording of time deposit for P30 million and unverified net difference of P158,878.93;

The balance of account Cash-in-Bank-Local Currency, Time Deposits totaling P720,000,000.00 was unreliable due to the net discrepancy of P7,500,000.00 attributed to:

a) unrecorded time deposits of P30,000,000.00; and,

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b) unreconciled difference of P22,500,000.00 between the books of accounts and results of bank confirmation;

The accuracy and validity of Cash-in-Bank-Local Currency, Current Account (LCCA) balance totaling P1,035,225,347.23 as of CY 2017 could not be relied upon due to

a) non-adjustments of reconciling items totaling P8,089,072.10;

b) existence of book and bank reconciling items amounting P2,070,444.16 which require further analysis and adjustments, and/or corrective action/s; and,

c) stale checks totaling P167,090.00 remained unadjusted as at year-end;

Property, Plant and Equipment (PPE) account balances totaling P2,389,351,572.59 as of December 31, 2017, excluding Infrastructure Assets and Construction-In-Progress accounts, under the General Fund (GF) and Special Education Fund (SEF) could not be ascertained due to

a) incomplete conduct of physical inventory of property;

b) discrepancy of P1,962,942,993.21 between accounting and property records;

c) non-maintenance by the Provincial General Services Office (PGSO) of Property Cards for property acquired in CY 2014 and previous years;

d) inclusion in the inventory report of lost property

worth P276,338.00; and,

e) dropping from the books of account the property totalling P8,551,486.50;

Non-recognition of the income to be received from the claims to PhilHealth and various sponsoring agencies totaling P7,809,231.46 and the failure of the Provincial Hospital and other satellite hospitals to account and report the outstanding hospital bills with promissory notes in CY 2017 totaling P8,677,480.43 which understated the Hospital Fees account by the same amount as of December 31, 2017; and,

The appropriate Inventory and Payable accounts for the procurement of drugs, medicines, and hospital supplies at Botika ng Lalawigan ng Oriental Mindoro (BLOM) totaling P228,655,914.66 and the Sales Revenue and other affected accounts arising from the sale were not recorded, accounted and/or recognized in the books of accounts thus, understating the Inventory, Payable and Equity accounts as of year-end by their respective amount.

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Citiy:

Calapan City Qualified/ Modified

Stale checks totaling P163,647.56 remained unadjusted as of December 31, 2017 which understated the balance of Cash-in-Bank and Accounts Payable accounts at year-end by that amount;

The existence, accuracy and reliability of the Property, Plant and Equipment (PPE) account balances as of year-end of P814,048,571.24 could not be relied upon due to

a) discrepancy of P25,468,374.31 between the accounting records and Inventory Report;

b) non-maintenance and inadequate data in the Property Card and Property/Equipment Ledger Cards and inventory reports; and,

c) misclassification of three PPE accounts totaling P31,233,668.46; and unrecorded premiums withheld from salary differential of City Health Office (CHO) of P185,411.81 which understated the balance of the account Due to Government Service Insurance System (GSIS).

Municipalities:

Baco Qualified/ Modified

Cash in Bank-Local Currency, Current Account (CIB-LCCA) totaling P98,089,053.81 as of December 31, 2017 could not be ascertained due to:

a) book and bank reconciling items totaling P2,522,271.05 which requires further analysis and adjustments; and,

b) stale checks totaling P15,895.71 which remained unadjusted as at year-end.

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;

Property, Plant and Equipment (PPE) account balances at year-end totaling P119,702,901.49 excluding Infrastructure Assets and Construction In Progress accounts could not be ascertained due to the

a) failure of the Municipality to conduct and submit complete physical inventory of PPE contrary to the Manual on New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I;

b) non-maintenance by the Municipal Treasurer of property cards for property acquired in CY 2017 and prior years contrary to Section 114 of the Manual on the NGAS for LGUs, Volume I; and,

c) undisposed unserviceable property totaling P1,617,290.00;

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Due to NGAs account balance of P67,871,378.92 at year-end could not be ascertained due to

a) fund transfer from Department of Agrarian Reform (DAR) which was expended/utilized but still reflected in the Due to NGAs account as of year-end in the amount of P12,431,034.15;

b) failure to return/liquidate the unutilized balance of fund transfers from various agencies totalling P312,550.59; and,

c) non-preparation of separate Subsidiary Ledger/schedules for fund transfers from same agency intended for different purposes/projects/programs; and

Other Payables account balance of P2,529,480.16 at year-end for failure of the Municipal Accountant to strictly observe and use the appropriate account titles as prescribed in COA Circular 2015-009 dated December 1, 2015; and,

The non-recognition of accrued income from delinquent stall and lot occupants, understated the accounts Receipts from Market Operations (4-02-02-140) by P365,040.20 and Fines and Penalties-Business Income (4-02-02-980) by P91,260.05.

Bansud Qualified/ Modified

The validity, accuracy and existence of the reported Property, Plant and Equipment (PPE) account balance of P147.891 million could not be ascertained due to material difference of P81.981 million between Inventory Reports and Accounting records as a result of incomplete inventory and documentation of the properties and non-preparation and maintenance of property cards and complete Report on the Physical Count of Local Road Network;

Cash balance of P105,419,749.64 remained unreliable due to

a) non-adjustments of the reconciling items amounting to P9,464,600.02 in the accounting records; and,

b) non-adjustment of stale checks totaling P254,366.52 as of year-end.

Due to the incompleteness of the Municipality’s records on PPE and Cash, we were unable to satisfy ourselves as to the carrying value of the property by means of other auditing procedures.

Bongabong Qualified/ Modified

The accuracy and reliability of reported Property, Plant and Equipment (PPE) account balance totalling P367.85 million could not be ascertained due to

a) discrepancies of P58.96 million between the Inventory Reports and accounting records;

b) unserviceable properties amounting to P7.40 million remained undisposed and exposed to further deterioration;

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c) non-preparation of Report on the Physical count of Local Road Network (RPCLRN); and,

d) misclassified accounts totalling P8.76 million.

Bulalacao Qualified/ Modified

The accuracy and reliability of reported Property, Plant and Equipment (PPE) account balance totalling P141.84 million could not be ascertained due to discrepancies of P19.65 million between the Inventory Reports and accounting records, non-recognition of Infrastructure Assets totaling P15.94 million in the book of accounts; and,

Unserviceable properties amounting to P1.97 million remained undisposed and exposed to further deterioration, and non-preparation of Report on the Physical count of Local Road Network (RPCLRN).

Gloria Unqualified/ Unmodified

Mansalay Qualified/ Modified

The accuracy and reliability of the following accounts could not be ascertained:

a) Property, Plant and Equipment (PPE) account balance of P247.23 million due to discrepancies of P231.73 million between the Inventory Reports and accounting records, unserviceable properties amounting to P1.61 million remained undisposed and exposed to further deterioration, and non-preparation of Report on the Physical count of Local Road Network (RPCLRN); and,

b) Cash in Bank of P81.10 million due to unreconciled difference of P3.97 million between the accounting and treasury records of three accounts under the CIB-LCCA, non-adjustment of identified net reconciling items totalling P2.61 million in the accounting books of the Municipality, net reconciling items (exclusive of outstanding checks) totaling P1.13 million that needs further analysis and reconciliation with the depository bank, and inclusion 14 stale checks totalling P0.13 million in the General Fund, which remained unadjusted.

Naujan Qualified/ Modified

The validity, accuracy and existence of the reported Property, Plant and Equipment (PPE) account balance of P391.089 million could not be ascertained due to difference of P220.93 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. Due to the incompleteness of the Municipality’s records on PPE, we were unable to satisfy ourselves as to the carrying value of the property by means of other auditing procedures.

Pinamalayan Qualified/ Modified

The validity and accuracy of the following accounts could not be ascertained:

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a) Property, Plant and Equipment (PPE) totalling P243.30 million due to non-maintenance of property cards of the Municipal General Service Office and complete property ledger cards of the Municipal Accounting Office that resulted to difficulty in reconciling the results of inventory of Property, Plant and Equipment, thus Report on Physical Count of Property, Plant and Equipment for calendar year 2017 was not submitted; and,

b) Cash in Bank of P260,549,441.62 as of December 31, 2017 due to non-adjustment of identified net reconciling items totalling P17,176,223.39 in the accounting books of the Municipality, non-preparation of Bank Reconciliation Statements for various months for the bank accounts of the Municipality and inclusion of 86 stale checks totalling P988,183.74 in the General Fund, which remained unadjusted.

Pola Qualified/ Modified

The validity, accuracy and existence of the reported Property, Plant and Equipment (PPE) account balance of P151.678 million as of year-end could not be ascertained due to difference of P94.184 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. Due to the incompleteness of the Municipality’s records on PPE, we were unable to satisfy ourselves as to the carrying value of the property by means of other auditing procedures.

Puerto Galera Qualified/ Modified

Property, Plant and Equipment (PPE) account balance of P241,081,332.40 as of December 31, 2017 could not be ascertained due to failure to:

a) conduct complete inventory-taking of PPE; and,

b) maintain and accomplish the ledger cards and reports;

Cash in Bank (CIB)-Local Currency, Current Account of P134,126,299.44 as at December 31, 2017 could not be ascertained due to

a) failure to prepare the Bank Reconciliation Statement (BRS) on trust fund accounts;

b) failure to reflect all reconciling items; and

c) unadjusted stale checks totaling P126,790.82.

Roxas Qualified/ Modified

The accuracy and reliability of reported Property, Plant and Equipment (PPE) account balance totalling P138.86 million could not be ascertained due to failure to conduct physical inventory of all properties of the Municipality, non-preparation and non-submission of

a) Report on the Physical Count of Property, Plant and Equipment (RPCPPE), property cards and PPE ledger cards;

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b) Inventory and Inspection of Unserviceable Property (IIRUP) for the disposal of unserviceable PPE as per Section 79 of Presidential Decree (PD) No. 1445; and,

c) Report on Physical Count of the Local Road Network System (RPCLRN), and capitalizing various disbursements totaling P1.48 million to Power Supply System instead to Repair and Maintenance- Infrastructure Assets, thus overstating the PPE account balance and understating the equity account balance by the same amount as of December 31, 2017.

San Teodoro Qualified/ Modified

Cash in Bank-Local Currency Current Account (CIB-LCCA) totaling P65,586,178.78 as of December 31, 2017 could not be ascertained due to the non-preparation or delayed submission of the bank reconciliation statement (BRS) within the prescribed period contrary to COA Circular No. 96-011 dated October 2, 1996;

Property, Plant and Equipment (PPE) account balance at year-end totaling P103,952,170.35 could not be ascertained due to the

a) failure of the Municipality to conduct annual physical inventory of PPE, submit Report on the Physical Count of Property, Plant and Equipment (RPCPPE) for CY 2017, and reconcile the same with the Accounting records contrary to 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 for properties acquired in CY 2012 and prior years contrary to Section 114 of the Manual on the NGAS for LGUs, Volume I;

c) erroneous recording of infrastructure projects progress billings and final payment to Due to NGA (2-02-01-050) account instead of appropriate Construction in Progress account totaling P5,951,886.05;

d) non-recognition of Public Infrastructure accounts in the books of accounts totaling P4,658,181.30 contrary to COA Circular No. 2016-004 dated September 30, 2016; and,

e) negative (abnormal) carrying value of Furniture and Fixtures account in the Special Education Fund books of accounts amounting to P575.40 contrary to accounting rules and regulations;

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Due to NGAs account balance of P24,229,412.23 at year-end couldm not be ascertained due to

a) recording of disbursements/utilization of fund transfers as direct debit to Due to NGAs account contrary to COA Circular No.94-013 dated December 13, 1994; and,

b) non-preparation of separate Subsidiary Ledger/schedules for fund transfers from same agency intended for different purposes/projects/programs.

Loans Payable No balance as of December 31, 2017 could not be ascertained for failure to:

a) record the loan releases for Subaan River Protection and Solid Waste Management Facility with Equipment totaling P11,083,539.74; and,

b) effect the erroneous adjustments totaling P3,714,762.96, set-up of loans totaling P1,296,161.29, and recording of interest expense as deduction to the loan principal amount totaling P8,824,673.00, rendering the zero balance of Loans Payable-Domestic account in the financial statement at year-end questionable.

Socorro Qualified/ Modified

The correctness, existence, and accuracy of the Property, Plant and Equipment (PPE) account balance of P238,099,732.42 could not be ascertained in view of

a) substantial discrepancy amounting to P6,050,903.46 between the accounting records and Inventory Report;

b) failure to recognize 50% of the Public Infrastructures closed to Government Equity from CY 2016 and below in the books of accounts; and,

c) failure to prepare the required reports for Road Network.


The correctness, existence, and accuracy of the Property, Plant and Equipment (PPE) account balance of P189,104,008.38 could not be ascertained in view of

a) substantial discrepancy amounting to P94,497,416.53 between the accounting records and Inventory Report; and,

b) failure to prepare the required reports for Road Network.

Palawan Qualified/ Modified

The balances of Cash-in-Bank accounts as of December 31, 2017 totaling P4,464,622,159.66 could not be relied upon due to discrepancies between the accounting, treasury and bank records attributable to unrecorded transactions, unreconciled account balances and non-cancellation of stale checks.

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City:

Puerto Princesa City Qualified/ Modified

Unreconciled cashbook balances of three cash accounts with the accounting records accumulated to P33,024,188.08;

Cash-in-Bank- Local Currency, Current Account (LCCA) and Local Currency, Time Deposit (LCTD) book balances and the adjusted bank balances showed a total difference of P14,286,401.56 due to uncorrected book errors and non-recording/non-adjustment of reconciling items in the Bank Reconciliation Statements (BRSs) as of December 31, 2017;

Food and non-food supplies amounting to P5,994,924.00 charged to the 5% Local Disaster Risk Reduction and Management Fund (LDRRMF) were recorded as expenses instead of inventories;

Absence of physical inventory report to support the Property, Plant and Equipment (PPE) accounts with net book value of P4,021,004,253.54 as of year-end; incomplete property cards and PPE ledgers; material variances noted between the reported year-end Investment Property and PPE account balances in the financial statements and in the lapsing schedules and real property ledger cards totaling P898,326,631.55; unidentified PPE of P943,364,494.93; understated accumulated depreciation by P800,528,379.03; overstated depreciation expenses by P40,089,814.09; unrecorded road networks amounting to P28,403,502.75; overstated motor vehicle account by P5,100,200.00 due to undelivered vehicles; non-presentation of Transfers of Certificate of Title (TCT) for land properties; various unbooked donated land with undetermined costs; and deficiencies in the recording of the cost of infrastructure projects and maintenance of property records; and,

Unreliable and inaccurate Statement of Comparison of Budget Versus Actual Amount (SCBAA) due to

a) overstated Final Budget totaling P116,313,949.51;

b) unreconciled total Actual Amounts per accounting records and total Obligated Amount per Budget Office report aggregating P184,389,841.56; and

c) doubtful savings declared in the Supplemental Budget No. 1 totaling P111,148,895.03 which was not supported with list of source projects that have valid remaining unobligated balances.

Municipalities:

Aborlan Qualified/ Modified

The existence, valuation and accuracy of the Property, Plant and Equipment with net book value of Pl88,367,092.83 (net of PPE with actual physical count) as of December 31. 2017 could not be ascertained due to the failure of the Municipality to conduct inventory in violation of Section 124 of the New Government Accounting System (NGAS) Manual for LGUs, Volume I;

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Agutaya Qualified/ Modified

The Inventory Committee was not able to complete te conduct of the yearly physical inventory count of Property, Plant and Equipment as of December 31, 2017 with net book values totaling 61,092,790.60, contrary to Section 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I; and,

The Municipal Treasurer and the Municipal Accountant failed to maintain the required reports under Section 119 and 120 of the same Manual, thereby casting a doubt on the existence, validity and accuracy of the PPE accounts at year-end.

Araceli Qualified/

Modified The existence and accuracy of Property, Plant and

Equipment (PPE) account with net book value of P36,449,488.01 as of December 31, 2017 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 contrary to Sections 119, 120, 123 and 124, Chapter 7 of the New Government Accounting System (NGAS) Manual for LGUs, Volume I; and,

The validity and accuracy of the balance of the Cash in Bank - Local Currency, Current Account (LCCA) totaling P77,803,995.09 could not be relied upon due to unidentified reconciling items between book and bank balances and variance between general ledger (GL) balance and subsidiary records, contrary to Section 74 of the Presidential Decree (PD) No. 1445, otherwise known as the State Audit Code of the Philippines, and Section 3 of COA Circular No. 96-011 dated October 2, 1996. The inadequacy of reliable records did not permit us to apply alternative procedures to determine accuracy, existence and completeness of these accounts.

Balabac Adverse The accuracy, reliability and validity of cash in bank account’s

balance of P57,768,840.22 under the General Fund cannot be ascertained due to the failure to reconcile/adjust the balance with the bank reconciliation resulting to a difference of P604,016.38. Furthermore, the bank reconciliation statements were not submitted on a monthly basis required under COA Circular No. 96-011;

Unidentified properties with net book values totaling P36,982,865.69 or 79.70% of the total Property, Plant and Equipment (PPE) has rendered unreliable the total PPE account balances as of December 31, 2017;

The required 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 net book values of PPE accounts totaling P46,403,148.51 at year-end. Property custodianship and location were neither established due to absence of property records and non-conduct of the annual physical inventory;

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Registries of appropriations/allotments and obligations for each fund were not maintained by the OIC - Municipal Budget Officer and OIC - Municipal Accountant, contrary to Item No. 2 of COA Circular No. 2005-001 dated Feb. 28, 2005 and Section 4, paragraph (h) Volume I of COA Circular No. 2002-003 dated June 20, 2002 thus figures for Appropriation, Allotments, and Obligation cannot be validated;

The validity and correctness of the balances of the accounts reported in the financial statements could not be established as of reporting date due to non-maintenance of general and subsidiary ledgers for the financial transactions covering the period January to December 2017 contrary to Section 111 and 114 of Presidential Decree No. 1445 and Section 70 of the Manual on the New Government Accounting System (NGAS), Volume I, thus the correctness of the account balances of assets, liabilities and equity accounts for General Fund, Trust Fund and Special Education Fund amounting to P352,480,094.20, P7,380,427.52 and 147,998,691.70, respectively, could not be relied upon;

Various expenditure were charged to Other Maintenance and Operating Expenses (OMOE) account (5-02-99-990) totaling 17,187,377.97 despite that these items have already a corresponding accounts in the Revised Chart of Accounts for LGUs contrary to Sections 111 and 112 of Presidential Decree No. 1445 otherwise known as the State Audit Code of the Philippines and Section 5.2 of COA Circular No. 2015-009 dated December 01, 2015 thus, the validity and propriety of the recorded transactions is doubtful; and,

The Municipal Accountant failed to set up the Real Property Tax and Special Education Tax Receivable accounts and Deferred Real Property Tax and Deferred Special Education Tax Income at the beginning of the year contrary to Sec. 20 of the New Government Accounting System (NGAS) Manual, Volume I, thus understating receivables and deferred credits accounts in the financial statements.

Bataraza Qualified/

Modified The Municipality failed to complete the annual physical

inventory count of PPE totaling P637,089,213.29 as of year-end due to incomplete property cards and necessary documents that could prove the correctness, condition, ownership and existence, thus, casting doubts on the reliability of the of the account balances.

Brooke's Point

Qualified/ Modified

The Municipality failed to complete the annual physical inventory count and reconciliation of PPE totaling P428,684,695.01 as of year-end due to incomplete property cards and necessary documents that could prove the correctness, condition, ownership and existence, thus casting doubts on the reliability of the account balances.

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Busuanga Qualified/ Modified

The validity, correctness and existence of the PPE account with carrying value of P177,300,l16.35 could not be ascertained due to the failure of the municipality to conduct the physical count of municipality’s property.

Cagayancillo Qualified/ Modified

The existence, validity and accuracy of the balances of various Property, Plant and Equipment (PPE) with net book values totaling 23,509,750.78 which represents 29.59% of the agency's total assets could not be ascertained due to non-conduct of annual physical inventory count, in effect, non-preparation of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and failure to maintain PPE ledger cards.

Coron Qualified/ Modified

The validity, correctness and existence of the property; b) non-maintenance of property ledger card by accounting office; and c) non-maintenance of property records by the General Services Office (GSO) contrary to the provisions of New Government Accounting System (NGAS) Manual for Local Government Units.

Culion Qualified/ Modified

The validity, correctness and existence of the Property, Plant and Equipment (PPE) account with a carrying value of P181,070,355.89 (excluding Land) could not be ascertained due to; a) incomplete physical count of the municipality’s property; b) non-maintenance of property ledger card by accounting office; and c) non-maintenance of property records by the General Services Office (GSO) contrary to the provisions of New Government Accounting System (NGAS) Manual for Local Government Units.

Cuyo Qualified/ Modified

The existence, validity and accuracy of the balances of various Property, Plant and Equipment (PPE) with net book values totaling 35,967,337.89 as of December 31, 2017 which represents 21.32% of the agency's total assets, was doubtful due to absence of physical inventory taking.

Dumaran Qualified/ Modified

The existence and accuracy of Property, Plant and Equipment (PPE) account with net book value of P76,683,158.23 as of December 31, 2017 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, contrary to Sections 119, 120, 123 and 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I. The inadequacy of reliable records did not permit us to apply alternative procedures to determine accuracy, existence and completeness of this account.

El Nido Qualified/ Modified

The accuracy of Inventories totaling P1,386,649.93 and Property, Plant and Equipment account with net book value of P140,056,220.10 as of December 31, 2017 could not be ascertained because it was not supported by physical inventory report and supplies and property cards and ledgers.

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LGU AUDIT


Kalayaan Qualified/ Modified

The Municipality’s counterpart for the implementation of Trust Fund projects amounting to P7,788,420.67 were erroneously recorded as Subsidy to Other Funds in the General Fund (GF) books and Due to LGUs account in the Trust Fund (TF) books instead of “Transfers for Project Equity Share/LGU Counterpart” and “Transfers from General Fund of LGU Counterpart/Equity Share” accounts in the books of GF and TF respectively thus affecting the fair presentation of the financial statements.

Linapacan No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Magsaysay Disclaimer Asset account balances totaling 120,092,670.93 or 94.50% of the total assets and liabilities account balances totaling 46,086,740.95 or 95.21% of the total liabilities were not supported with adequate accounting records and subsidiary ledgers.

Narra Qualified/ Modified

The Management failed to conduct the physical inventory of PPE amounting to P426,396,001.54 contrary to Section 124 of the New Government Accounting System (NGAS) Manual, Volume I, thus the validity and existence of the PPE reflected in the books as at December 31, 2017 could not be ascertained.


The Management failed to conduct the physical inventory count of the Property, Plant and Equipment (PPE) totaling to P123,827,114.86 as at December 31, 2017, contrary to Section 124 of the New Government Accounting System (NGAS) Manual, Volume I, thus the condition, ownership and existence of those properties could not be ascertained.

Rizal Adverse Non-reconciliation of physical inventory count against the recorded Property, Plant and Equipment (PPE) totaling P286,825,049.61;

Material misstatement of the financial statements due to:

a) non-maintenance of Subsidiary Ledgers of the beginning balance of the Cash in Local Treasury amounting to P15,048,222.12;

b) unaccounted reconciling items pertaining to the unadjusted beginning balances of the bank accounts amounting to P20,408,059.73; and

c) unsupported and undocumented postings to the General Ledger accounts amounting to P24,225,813.76 in CY 2016;

Weakness of internal control that resulted to unrecorded disbursements and liquidations for CYs 2015-2016 amounting to P70,143,003.15 and P83,298,045.35, respectively; unrecorded balance of the three (3) bank accounts totaling to P629,880.97; and,

Non-submission of the Bank Reconciliation Statements for all bank accounts from CYs 2003 to 2015.

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LGU AUDIT


Roxas Qualified/ Modified

The existence and accuracy of Property, Plant and Equipment (PPE) account with net book value of P304,809,407.17 as of December 31, 2017 could not be ascertained because it was not supported by physical inventory report and complete and accurate property cards, contrary to Sections 114, 119 and 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I. The inadequacy of reliable records did not permit us to apply alternative procedures to determine accuracy, existence and completeness of this account.

San Vicente No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Sofronio Española Qualified/ Modified

The existence, valuation and accuracy of the Property, Plant and Equipment with net book value of P186,135,329.27 as of December 31, 2017 could not be ascertained due to the failure of the Municipality to conduct physical inventory in violation of Section 124 of the New Government Accounting System (NGAS) Manual for LGUs, Volume I.

Taytay Qualified/ Modified

The existence and accuracy of Property, Plant and Equipment account with net book value of P235,853,160.09 as of December 31, 2017 could not be ascertained because it was not supported by physical inventory report and supplies and property cards and ledgers.

Romblon Qualified/ Modified

Inventories and Property, Plant and Equipment (PPE) accounts (Construction-in-Progress accounts) with net book value as at December 31, 2017 of P23,199,511.74 and P1,464,082,757.17, respectively, could not be ascertained as to existence and valuation

a) due to the failure of the Provincial Government to conduct complete physical count of inventories and property, plant and equipment; and,

b) unserviceable equipment amounting to P11,889,718.90 were not yet disposed as required under Section 79 of Presidential Decree (P.D.) No. 1445 and remained in the books of the agency as of December 31, 2017.

Municipalities:

Alcantara Qualified/ Modified

The Municipality failed to submit the Report on the Physical Count of Inventories (RPCI) and Report on the Physical Count of Property, Plant & Equipment (RCPPE) to support inventories and Property, Plant & Equipment valued at P616,944.70 and P77,656,838.34, respectively as of year-end in violation of Section 124 Volume I of Manual on New Government Accounting System for Local Government Units, thus the validity, correctness and existence of the inventories and PPE could not be ascertained.

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Banton Qualified/ Modified

The validity, correctness, and existence of the Property, Plant and Equipment (PPE) with net book values as at December 31, 2017 of P72, 058,490.91 (Construction-in-Progress accounts excluded) could not be established and the required reconciliation with accounting records could not be undertaken due to the failure of the Municipality to conduct a complete physical inventory and to submit the corresponding Report on Physical Count of Property, Plant and Equipment (RPCPPE).

Cajidiocan Qualified/ Modified

The Property, Plant and Equipment (PPE) and Inventory accounts as of December 31, 2017 amounting to P97,093,297.92 (net of Land and Construction in Progress) and P2,164,462.44, respectively, could not be ascertained as to existence, completeness and valuation due to the failure of the Municipal Government to conduct complete physical count and submit the corresponding Report on the Physical Count of PPE (RPCPPE) and Report on the Physical Count of Inventories (RPCI).

Calatrava Qualified/ Modified

The Municipality failed to support the Property, Plant and Equipment (PPE) valued at P72,330,648.68 (net of accumulated depreciation) as of December 31, 2017, with the Report on the Physical Count of PPE (RPCPPE), contrary to Section 124, Volume 1 of the NGAS Manual for LGUs, rendering the balances unreliable.

Concepcion Disclaimer / Modified

The Municipality failed to support the Property, Plant and Equipment (PPE) valued at P602,433.84 and P46,111,540.27 (net of accumulated depreciation) as of December 31, 2017, with the Report on the Physical Count of PPE (RPCPPE), contrary to Section 124, Volume 1 of the NGAS Manual for LGUs, rendering the balances unreliable;

Significant information was inadequately disclosed in the Notes to Financial Statements contrary to paragraph 127(c) and 129 of PPSAS No. 1, thus, depriving the users of financial statements of additional informative value;

The Municipal Accountant failed to submit the General Ledger and maintain subsidiary ledgers of any real or nominal accounts for SEF and Trust funds contrary to Sections 9 & 10 of the Manual on the New Government Accounting System (MNGAS) Volume II thus, the correctness and accuracy of the accounts presented in the financial statements could not be relied; and,

Receivable accounts amounting to P2,913,700.23 which remained long-outstanding or dormant in the books for more than 10 years were not acted upon to facilitate the proper write-off thereof, contrary to COA Circular 2016-005, rendering the validity, existence and correctness of the account balances unreliable.

Corcuera Unqualified/ Unmodified

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Ferrol Qualified/ Modified

The recorded Inventory and Property, Plant and Equipment (PPE) accounts as of December 31, 2017 amounting to P955,603.80 and P45,104,218.04 (net of accumulated depreciation and excluding Land and Construction in Progress), respectively, were not supported with a complete and accurate Report on the Physical Count of Inventories (RPCI) and Report on the Physical Count of PPE (RPCPPE) contrary to the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I, hence, the reliability of the amounts reflected in the Financial Statements could not be ascertained; and,

The Municipality failed anew to recognize depreciation for

Property, Plant and Equipment accounts totaling P6,348,856.42 which is not in accord with Paragraph 4 of the Philippine Public Sector Accounting Standards (PPSAS) 17, Volume II, thus overstating the asset and equity accounts and understating the expense account.

Looc The Municipality failed to support the Inventories and

Property, Plant and Equipment (PPE) valued at P8,320,349.62 and P36,831,976.18, respectively, as of end of the year, with the Report on the Physical Count of Inventories (RPCI) and Report on the Physical Count of PPE (RPCPPE), contrary to Section 124, Volume 1 of the NGAS Manual for LGUs, rendering the balances, unreliable; and,

The Municipality incurred lapses in the preparation of monthly Bank Reconciliation Statements (BRS), rendering the consolidated balance of Cash in Bank – Local Currency, Current Account as of December 31, 2017 amounting to P88,822,630.35 unreliable, contrary to Section 74 of P.D. No. 1445 and COA Circular No. 96-011 dated October 2, 1996.

Magdiwang Unqualified/

Unmodified

Odiongan Qualified The Municipality failed to reconcile the result of the physical count of inventory of Property, Plant & Equipment with the accounting record contrary to the Handbook on Property Supply and Management System, rendering the balances of Property, Plant & Equipment as of December 31, 2017 amounting to P151,122,515.59, which represents 54% of the Municipality’s total assets unreliable; and

Receivables and Deferred Income account balances of Real

Property Tax and Special Education Tax (PRT/SET) as of December 31, 2017 amounting to (P1,699,122.90) and (P4,791,697.66), respectively, were unreliable due to erroneous set up of RPT and SET receivables and inaccurate recording of collections in violation of Section 20 of NGAS Manual, Vol. I.

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Romblon Qualified/ Modified

The Property, Plant and Equipment (PPE) and Inventory accounts as of December 31, 2017 amounting to P56,311,263.28 (net of Land and Construction in Progress) and P774,527.00, respectively, could not be ascertained as to existence, completeness and valuation due to the failure of the Municipal Government to conduct complete physical count and submit the corresponding Report on the Physical Count of PPE (RPCPPE) and Report on the Physical Count of Inventories (RPCI).

San Agustin Qualified/ Modified

The reliability of the recorded inventory and Property, Plant and Equipment (PPE) as of December 31, 2017 amounting to P1,789,563.85 and P50,423,057.81 (net of accumulated depreciation) respectively, cannot be ascertained due to incomplete physical count of the properties of the Municipality contrary to Manual on New Government Accounting System (NGAS) for Local Government Units (LGUs), Vol. 1

San Andres

Qualified/ Modified

The Municipality failed to submit CY 2017 financial reports to the Office of the Auditor as well as supporting schedules thereto on or before the deadline set under Section 70 of NGAS Manual for LGUs Vol. I, COA Circular No. 2010-001 and Paragraph 2 of Section 41 of PD 1445, thus, review thereof was not conducted; and,

Paid disbursement vouchers/payrolls/liquidation

reports/official receipts for CY 2017 were not also submitted on or before the deadline provided under COA Circular No. 2009-006 dated September 15, 2009, COA Circular No. 95-006 dated May 18, 1995 and other pertinent provisions thus, audit of accounts and financial transactions of the municipality and reporting of audit result to the management was not made.

San Fernando Qualified/

Modified The balance per books of the Property, Plant and Equipment

and Inventory accounts as compared with the balance per report on the physical count have net discrepancy of P5,039,987.00 and P199,862.91, respectively, as of December 31, 2017 thereby casting doubt on the accuracy and reliability of the presented balances in the financial statements; and,

Asset and liability accounts of P2,946,359.13 and P373,549.24, respectively, as of December 31, 2017 have abnormal balances as reflected in the financial statements thereby casting doubt on the accuracy and reliability of the identified real accounts.

San Jose Qualified/

Modified The Municipality continuously failed to submit the financial

reports pertaining to years 1994 to 2002, rendering the forwarding balances of all accounts unreliable, contrary to the provisions of Presidential Decree (PD) No. 1445;

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The Municipal Accountant and Treasurer failed 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, 2017 amounting to P48,272,123.48 unreliable, contrary to Section 74 of P.D. No. 1445 and COA Circular No. 96-011 dated October 2, 1996; and,

The Municipality failed 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, 2017 in the amount of P20,404,409.31, contrary to the guidelines set in COA Circular No. 97-002 dated February 10, 1997, thereby affecting the reliability of the financial statement as expenses drawn out from these cash advances were not recorded during the year of incurrence.

Santa Fe Qualified/ Modified

The reliability of the recorded Inventory and Property, Plant and Equipment (PPE) as of December 31, 2017 amounting to P1,996,319.20 and P105,934,270.81 (net of accumulated depreciation), respectively, cannot be ascertained due to non-submission of the Report on the Physical Count of Inventories (RPCI) and the Report on the Physical Count of PPE (RPCPPE) which is contrary to the provisions of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I.


The Municipality failed to identify and provide the details of Other Supplies Inventory and PPE costing P595,134.56 and P12,231,046.75 in the RPCI and RPCPPE, respectively rendering the management’s assertions on thre validity, existence and correctness of the reported balances of Inventory and PPE accounts, unreliable;

The Municipality failed to report the unserviceable properties amounting to P1,377,175.50 in the IIRUP and still carry said properties in the books of the agency contrary to Section 79 of PD 1445, exposing them to further deterioration and loss of the value thereof; and,

The Municipality failed to provide allowance for depreciation on Infrastructure assets totaling P32,483,202.21, thus overstating the Asset and Government Equity account balances and rendering the accuracy of the financial statements doubtful and unreliable.

Region V – Bicol

Albay Unqualified/ Unmodified

Cities:

Legazpi City Unqualified/ Unmodified

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LGU AUDIT


Ligao City Qualified/ Modified

The balance of Due to GOCCs account totaling P4.67 million as of Dec 31, 2017 is inaccurate due to the unrecorded value of seeds received by the City from PhilRice as payment for the amount it advanced as disturbance compensation to farmers affected by the establishment of PhilRice-Bicol worth P1.14 million;

Receivable Accounts is inaccurate due to inclusion of Dormant Receivables and Unliquidated Cash Advances amounting to P2.93 million;

The balance of Disaster Response & Rescue Equipment amounting to P3.97 million as of December 31, 2017 is inaccurate due to the unrecorded one (1) unit of used firetruck donated by the Republic of South Korea to the City valued at P253,850; and,

The accuracy of Property, Plant and Equipment (PPE) account cannot be ascertained due to the variance of P119.92 million between the recorded balance and the balance per Report of the Physical Count of PPE.

Tabaco City Qualified/ Modified

The accuracy of the Property, Plant and Equipment (PPE) with net book value of P99.08 million cannot be relied upon due to the inability of the City to prepare and submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

The correctness and validity of the long outstanding/past due/dormant receivable and payable accounts aggregating to P2.30 million and P30.75 million, respectively, could not be substantiated due to the absence of documents to validate/support the claim/obligation; and

The unrecorded delinquent receivables from market stall holders understated the account, Other Receivables, by P6.79 million.

Bacacay Disclaimer/ Modified

The validity, accuracy and existence of the Property, Plant and Equipment (PPE) accounts with a net book balance of P231.90 million as of December 31, 2017 which comprise 40.22 per cent ot its total assets of P576.57 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 Report on the Physical Count of Property, Plant and Equipment (RPCPPE) at year-end, for several years.

Camalig Qualified/ Modified

The existence and validity of the Municipality’s Property, Plant and Equipment (PPE) accounts valued in the books at P23.31 million or 10 per cent of the total PPE of P237.99 million or six per cent of the total assets of P405.97 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.

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LGU AUDIT


Daraga

Qualified/ Modified

The existence and validity of Municipality’s Property, Plant and Equipment (PPE) accounts valued in the books amounting to P779.91 million at year-end, could not be ascertained because Management was not able to complete the physical inventory of PPE amounting to P95.84 million or 13 per cent of the total PPE, and was not able to reconcile Accounting and Property records at year-end, thereby resulting in an unreconciled difference of P23.43 million. The inadequacy of Accounting and Property records hindered the Audit Team to apply alternative audit procedures to ascertain the correctness of the year-end balances of these accounts.

Guinobatan Qualified/

Modified The existence and validity of the Municipality’s Inventories

and Property, Plant and Equipment (PPE) accounts valued in the books at P23.43 million or nine per cent of the total Inventories and PPE of P257.32 million or five per cent of total assets of P505.70 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 Inventories and PPE accounts balances unreliable.

Jovellar Qualified/

Modified The existence and validity of the Municipality’s Property,

Plant and Equipment (PPE) accounts valued in the books at P8.04 million or 12 percent of the total PPE of P68.29 million or nine per cent of the total Assets of P92.60 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/ Modified

The balance of Property, Plant and Equipment (PPE) account cannot be ascertained due to the variance of P87.52 million between the recorded and the balance per Report of the Physical Count of PPE, which comprises 14.24 per cent of the total assets of P614.40 million as of December 31, 2017;

The Cash-in-Bank-Local Currency Current Account was

overstated by 3.02 million as of December 31, 2017, which comprises 0.49 per cent of the total assets due to unrecorded long outstanding reconciling items in the Bank Reconciliation Statements; and,

The Municipality did not conduct physical inventory of its

Supplies totaling P4.85 million as of December 31, 2017, which comprises 0.74 per cent of the total assets for the same period, hence, the correctness of the balance and the existence of the Inventories cannot be established.

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LGU AUDIT


Malilipot

Qualified/ Modified

he accuracy and existence of the reported book value of the Property, Plant and Equipment (PPE) amounting to P125.22 million or 43 per cent of the total assets could not be ascertained due to the: (a) incomplete inventory taking and unreconciled PPE account balances between the Accounting records and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) of P12.71 million; (b) absence of title of ownership of 13 lots with total market value of P28.46 million (c) incomplete stock/property cards and ledgers cards by both the General Services Office (GSO) and the Accounting Office; and (d) non-provision of depreciation on PPE with book value amounting to P61.13 million.

Malinao Qualified/

Modified The accuracy and existence of the reported book value of the

Property, Plant and Equipment (PPE) amounting to P99.11 million or 67.44 per cent of the total assets could not be ascertained due to the following:

a) Unaccounted inventory of real properties in the

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

b) Absence of title of ownership of 29 lots with total

market value of P84.61 million;

c) Maintenance of incomplete stock/property cards and

ledgers cards by both the General Services Office and the Accounting Office;

d) Unreconciled PPE accounts balances between the

Accounting records and the RPCPPE of P19.24 million; and,

e) Absence of depreciation of PPE with book value

amounting to P75.35 million.

Manito

Qualified/ Modified

The existence and validity of the Municipality’s Property, Plant and Equipment (PPE) accounts valued in the books at P22.58 million or 11 per cent of the total PPE of P206.69 million, at year-end, could not be ascertained due to the non-submission of complete Report on the Physical Count of PPE (RPCPPE), as a result of not completing the conduct of physical inventory of its PPE and failure to reconcile the accounting and property records at year-end, thus, rendered the PPE account balances unreliable.

The inadequacy of Accounting and Property records hindered

the Audit Team to apply alternative audit procedures to verify the validity of the accounts.

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LGU AUDIT


Oas Qualified/ Modified

The balance of Property, Plant and Equipment (PPE) account cannot be ascertained due to the variance of P66.23 million between the recorded and the balance per Report of the Physical Count of PPE, which comprises 15.96 per cent of the total assets of P415.35 million as of December 31, 2017. The Municipality did not conduct physical inventory of its Supplies, totaling P4.25 million as of December 31, 2017, which comprises 1.02 percent of the total assets for the same period, hence, the correctness of the balance and the existence of the Inventories cannot be established.

Pio Duran Qualified/ Modified

The existence and validity of Municipality’s Inventories, Property, Plant and Equipment (PPE) accounts valued in the books totaling to P188.15 millionat year-end, could not be ascertained due to the inability of the Municipal Accountant and Property Officerto to maintain and/or update and regularly reconcile their records resulted in a significant unreconciled balances of P1.62 million for Inventories and (P15.18 million) for Property, Plant and Equipment (PPE), or total unreconciled amount of (P13.56 million), thus, the total balance of P188.15 million for these accounts as presented in the Financial Statements at year end are not fairly presented; and,

The inadequacy of Accounting and Property records hindered the Audit Team to apply alternative audit procedures to ascertain the correctness of the year-end balances of these accounts.

Polangui The existence and validity of the Municipality’s Inventories and Property, Plant and Equipment (PPE) accounts valued in the books at P72.89 million or 13% of the total Inventory and PPE of P542.69 million at year end at year-end, could not be ascertained because Management was not able to complete the physical inventory, reconcile the Accounting and Property records and finally submit the report thereon to the Audit Team, thus, rendered the Inventories and PPE account balances unreliable.

The inadequacy of Accounting and Property records hindered the Audit Team to apply alternative procedures to verify the validity of the accounts.

Rapu-Rapu Unqualified/ Unmodified

Santo Domingo Qualified/ Modified

Doubtful existence, validity and accuracy of the reported balance of Cash in Bank account as at December 31, 2017 amounting to P43.31 million because of the absence of monthly Bank Reconciliation Statements of the current bank accounts of the LGU; and,

Unserviceable properties totaling P2.47 million within the agency premises were not yet disposed and derecognized from the books of the LGU, thereby overstating the Property, Plant and Equipment account at year-end.

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LGU AUDIT


Tiwi Qualified The accuracy and existence of the reported book value of the Property, Plant and Equipment (PPE) amounting to P225.75 million could not be ascertained due to:

a) the unreconciled balance amounting to P27.17 million between the Accounting records and the Report of Physical Count of Property, Plant and Equipment (RPCPPE) of PPE with book value aggregating to P45.98 million or 20 per cent of the total PPE and

b) the absence of title of ownership for the 65 lots with total market value of P156.98 million, exposing these real properties to risk of being claimed by other interested parties.

Camarines Norte Qualified/ Modified

Unserviceable properties with acquisition cost totalling P28.73 million, with the corresponding accumulated depreciation, was dropped from the books even if the Inventory and Inspection Report for Unserviceable Property (IIRUP) was not yet prepared and disposal of the said properties was not undertaken yet by the agency, thus, resulted in the understatement of the Assets and Government Equity accounts as at year end.

Municipalities:

Basud Qualified/ Modified

Unreconciled balances between the PPE accounts in the FS and the Report on Physical Count of Property, Plant and Equipment (RPCPPE) amounting to P3.15 million. The status of the record maintained did not allow the application of alternative procedures to establish the accuracy and reliability of the recorded amounts.

Capalonga Qualified/ Modified

The Municipality’s Inventory Committee did not conduct physical inventory of the agency’s Property, Plant and Equipment (PPE) valued in the books as of December 31, 2017 at P102.66 million, net of depreciation (excluding Construction in Progress). Verification revealed that only P62.91million were identified, thus, disclosed an unreconciled difference of P39.75 million; and,

The agency did not maintain PPE Ledger Card (PPELC) for each category of assets and Real Property Ledger Card (RPLC) for Land, thus, the reliability and accuracy of the recorded PPE in the books as of December 31, 2017 cannot be ascertained.

Daet Qualified/ Modified

Due to the unreconciled amount of P58,173,805.46 between the PPE accounts (excluding Land, Land Improvements, Buildings, Other Structures and Construction in Progress) recorded in the books and the physical inventory report totalling P101,445,453.03 and P43,271,647.57, respectively. Absence of property numbers, acquisition dates, values/costs and other important data on various PPEs listed in the Report on the Physical Count of PPE (RPCPPE) as of December 31,

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2017 hindered the reconciliation of the said report with the Accounting Office records. The inadequacy of the records did not permit us to apply alternative procedures to determine the validity of these accounts.

Jose Panganiban Unqualified/ Unmodified

Labo Qualified/ Modified

Unsubmitted 1,049 Disbursement Vouchers (DVs) totaling P75.77 million;

Unreconciled balances 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 amounting to P16.78 million; and,

PPE Ledger Cards, Real Property Ledger Cards and Property Cards were not completely maintained and updated by concerned Offices which is an important tool that would allow the monitoring and testing of the operation and controls and helps detect shortages, losses and identify errors in recording.

Mercedes Inability of Municipal Government to prepare and submit a complete and accurate report on the physical count of Property, Plant and Equipment excluding Land, Land Improvements, Buildings and Other Structures and Construction in Progress for CY 2017, thus, the assertions on the existence, accuracy, completeness and reliability of the recorded assets in the total amount of P42.86 million were not ascertained. The inadequacy of its records did not permit us to apply alternative procedures to determine the validity and reliability of these accounts.

Paracale Qualified/ Modified

The Municipality did not conduct physical count of its Property, Plant, and Equipment (PPE) for CY 2017 valued in the books at P132.34 million, net of depreciation (excluding Construction in Progress account totaling P66.13 million), thus, Report on the Physical Count of PPE (RPCPPE) was not prepared.;

The Municipal Accountant did not maintain Supplies Ledger Card (SLC) per stock number and PPE Ledger Card (PPELC) for each category of assets and Real Property Ledger Card (RPLC);

The General Service Office (GSO) did not maintain stock cards for PPE which could have been the basis and reference for our validation as to the existence of the recorded assets, thus, of the total PPE, P65.014 million of which cannot be identified which is 22.41 per cent of the total Assets of the LGU;

Non-classification of current and non-current Loans Payable amounting to P7,046,442.92 and P45,801,879.11, respectively;

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Irregular balance of Real Property Tax (RPT) and Special Education Tax (SET) Receivables amounting to P44,276.45 and P8,372,448.00, respectively;

Major repairs totalling P8,284,983.65 were not capitalized;

Abnormal balance of Government Equity Account in the Trust Fund (TF) totalling P66,580,137.48.

San Lorenzo Ruiz Qualified/ Modified

Unaccounted difference of P9.56 million between the bank statements (BS) balance of Cash in Bank – Local Currency, Current Account as of December 31, 2017 and the General Ledger (GL), thus the reliability of the account is doubtful; and,

The Municipality was not able to comply with the preparation of a prescribed complete and accurate report on the physical count of all its PPE and the maintenance of complete property and accounting records, thus, the reliability and accuracy of the recorded PPE accounts (excluding Land, Land Improvements, Buildings and Other Structures and Construction in Progress) as of December 31, 2017 with a total book value of P18.08 million could not be ascertained. The inadequacy of records did not permit us to apply alternative procedures to determine the validity of these accounts.

San Vicente Qualified Unsubmitted 174 Disbursement Vouchers (DVs), P10.295 million;

Unreconciled difference of Due from Other Funds and Due to Other Funds accounts, P6.537 million; and,

Unreconciled balances between the PPE accounts and Report on the Physical Count of PPE (RPCPPE), excluding Land and Land Improvements, Buildings, Public Infrastructures and Construction in Progress, P6.4 million.

Santa Elena The Municipality was unable to conduct physical inventory of its Property, Plant and Equipment (PPE) valued in the books as of December 31, 2017 at P146.53 million, net of depreciation (excluding Construction in Progress). Verification revealed that only P43.25 million were identified, thus, disclosed an unreconciled difference of P103.28 million;

The agency did not maintain PPE Ledger Card (PPELC) for each category of assets and Real Property Ledger Card (RPLC) for Land, thus, the reliability and accuracy of the recorded PPE in the books as of December 31, 2017 cannot be ascertained; and,

Due to the presentation of abnormal balances for the subsidiary accounts of Cash, Receivable and Payables Accounts amounting to P125,635.96, P8,170.00 and P0.61 million, respectively, as of December 31, 2017.

Talisay Qualified/ Modified

Unreconciled balances between the (a) PPE accounts and Report on the Physical Count of PPE (RPCPPE), excluding Land and Land Improvements, Buildings, Public Infrastructures and Construction in Progress, P604,830.50;

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Cash in Bank account and bank statements balances, P1,887,977.76; and,

Real Property Tax (RPT) and Special Education Tax (SET) receivables and year-end certified list of all RPT delinquencies, P54.216 million. The inadequacy of documents did not permit the Audit Team to apply alternative audit procedures to ascertain the accuracy of the balances of these accounts.

Vinzons Qualified/ Modified

Unreconciled balances between the PPE accounts and Report on the Physical Count of PPE (RPCPPE), excluding Land and Land Improvements, Infrastructures Assets, Buildings, Other Structures and Construction in Progress valued at P33.05 million; and,

Inability of the Management to present valid supporting documents for obligations taken up as Accounts Payable at year-end, P11.79 million. The inadequacy of documents did not permit the Audit Team to apply alternative audit procedures to ascertain the accuracy of the balances of these accounts.

Camarines Sur Qualified/ Modified

The accuracy and correctness of the Property, Plant and Equipment (PPE) accounts cannot be ascertained because property and accounting records did not reconcile by P126.30 million due to, among others, the non-recording of the corresponding PPEs accepted and inspected by the General Service Office at year-end, as well as the recording by the Accountant’s Office of equipment as functional and unserviceable at the same time;

The Gain on Sale of Disposed Assets amounting P168.80

million was improperly recognized and Land account was erroneously credited by P21.5 million in the books of accounts despite the absence of Deed of Conveyance and transfer of ownership;

The accuracy and correctness of the inventory accounts cannot be ascertained due to the absence of the Report on the conduct of physical count of Inventory accounts totalling P101.82 million; and,

The overdue unliquidated fund transfers to LGUs totalling P43.32 million understated the expenses while overstating the equity accounts.

Cities:

Iriga City Qualified/ Modified

Non-disclosure of prior and current years’ contingent obligations to CASURECO III approximately totaling P94.52 million. The existence of a present obligation frompast due accounts or arrears, which cannot be reliably estimated pending recomputation, reconciliation, and/or negotiation of the contested balance, requires a separate disclosure in the Notes to Financial Statements;

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Non-recognition of receivables from unpaid franchise and realty taxes subject of a final judgment under G.R. No. 192945 and estimated at P18 million. Since the award or judgment money was already final, certain, and reasonably estimated, recognition of receivables is henceforth required; and,

Non-liquidation of special cash advances totaling P27.89

million. Since it is certain that expenses were already incurred after completion of purpose or execution of related programs and activities, recognition of expenses in the period to which they relate is also required.

Naga City Qualified/ Modified

Discrepancy of Property, Plant and Equipment (PPE) amounting to P445.187 million between the accounting and property records existed, thus the accuracy, condition, existence and validity of the recorded PPE totalling P3.277 billion as of December 31, 2017 cannot be ascertained;

Overstatement by P6.20 million and incomplete actual

count of the yearend balance of inventory accounts totalling P65.859 million as of December 31, 2017; and,

The variance of P14 million of the cash in bank accounts per books totalling P1.139 with confirmed bank balances of P1.153 billion as of December 31, 2017.

Municipalities:

Baao Qualified/ Modified

Property, Plant and Equipment (PPE) in the amount of P29.573 million were not supported with updated reports, records, and PPE totaling P48.994 million were not recorded in the books of accounts.

Balatan The accuracy and validity of the recorded Property, Plant and Equipment (PPE) per Consolidated Statement of Financial Position was not reconciled by P12.026 million with the submitted Report of Physical Count of Property, Plant and Equipment (RPCPPE) due to the absence of updated PPE reports and records.

Bato Qualified/ Modified

The accuracy and validity of the Property, Plant and

Equipment (PPE) valued in the books at P17.829 million

could not be ascertained due to the absence of updated

PPE reports and records;

The Cash in Bank-LCCA and loans payable accounts were

overstated by P2.99 million due to unrecorded loan

amortization payments

Stale checks totaling P0.879 million remained unadjusted in

the books, thus resulted to understatement of the Cash in Bank-LCCA and Payable account balances by the same amount.

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Bombon Qualified/

Modified Real Property Tax (RPT)/Special Education Tax (SET)

Receivables for the audit year were not set-up in the books of accounts resulting to negative accounts balance totaling P1.198 million at the end of the year; and,

Property Plant and Equipment (PPE) valued in the books at P15.13 million could not be ascertained due to the absence of updated Report on Physical Count of Property Plant and Equipment (RPCPPE) and property ledger cards.

Buhi Qualified/

Modified concealment of cash accountabilities that resulted in

unreported collections totaling P387,541.60; and,

non-liquidation of current and ancient cash advances totaling P4.872 million, which overstated the receivable and equity accounts by the same amount because expenses were not duly recognized in the period/s to which they relate.

Bula Qualified/

Modified The accuracy and validity of Property, Plant and Equipment

(PPE) valued in the books at P16.894 million could not be ascertained due to the absence of updated PPE inventory reports and records.

Cabusao Qualified/

Modified Property and accounting records had a variance of P10.3

million, net of accumulated depreciation. The discrepancy could not be reconciled due to the absence of updated PPE records and reports.

Calabanga Qualified/

Modified Disbursements totaling P11.090 million were unrecorded

overstating Cash in Bank-LCCA and equity accounts by the same amount;

The inventory and equity accounts were overstated by P5.874 million as of December 31, 2017 because inventories were found to be non-existent ; and,

Cash advances granted over 60 days totaling P0.689

million remained unliquidated at 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 receivables and equity accounts by the same amount.

Camaligan Qualified/

Modified The Cash-in-Bank, Local Currency Account (LCCA) and

confirmed bank balances had a variance of P1.5 million

while accounting and cashbook records were not reconciled by P4.7 million; and,

The accuracy and correctness of Property, Plant and Equipment (PPE) accounts cannot be ascertained because the general lecger and supporting schedules did not tally by P12.5 million.

Canaman

Qualified/

Modified Completed infrastructure projects totaling P12.496 million

were not recognized in the books of the LGU resulting to the understatement of Road Networks and Government Equity accounts by the same amount; and,

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The accuracy and validity of Property, Plant and Equipment (PPE) valued in the books at P12.298 million as of December 31, 2017 cannot be ascertained due to the absence of updated and/or complete PPE reports and records.

Caramoan Qualified/

Modified Cash advances totaling P2.233 million had long been spent

yet remain unliquidated as of December 31, 2017; and,

The accuracy and validity of the selected Property, Plant and Equipment (PPE) in the amount of P144.097 million cannot be ascertained due to the absence of updated PPE reports and records.

Del Gallego Unqualified/

Unmodified

Gainza Qualified/

Modified Cash received in the amount of P14.343 million was not

recorded and stale checks in the amount of P40,097.60 was not reverted to the Cash in Bank-Local Currency, Current Account, understating the yearend balance by at least P14.383 million; and,

The reliability of movable Property, Plant and Equipment (PPE) worth P11.048 million cannot be ascertained due to lack of physical inventory reports, property ledger cards and other records.

Garchitorena Qualified/

Modified The accuracy, existence, and condition of the movable

properties valued in the books at P29.532 million could not be relied upon due to the absence of updated PPE records and reports; and,

Of the P1.948 million outstanding cash advances, P1.025

million or 53 per cent was aged 61 to over 365 days and had remained unliquidated as of December 31, 2017 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 receivables and equity accounts by the same amount.

Goa Qualified/ Modified

Stale checks were not cancelled/reverted which resulted to the understatement of the Cash in Bank-Local Currency, Current Account (LCCA) by P2.565 million; and,

The accuracy and validity of the selected Property, Plant and Equipment (PPE) in the amount of P14.118 million cannot be ascertained due to the absence of updated PPE reports and records.

Lagonoy Qualified/ Modified

Cash advances granted for over 91 days to three years totaling P1.334 million have remained unliquidated as of December 31, 2017 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; and,

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The accuracy and correctness of the Property, Plant and Equipment (PPE) worth P76.59 million could not be ascertained due to the absence of Report on Physical Count of Property, Plant and Equipment and other records.

Libmanan Qualified/ Modified

Real Property Tax (RPT) and Special Education Tax (SET) Receivable accounts having balances of P13.220 million and P13.446 million, respectively as of December 31, 2017, could not be relied upon due to the following reasons:

a) the amount set up during the year as RPT and SET Receivable accounts were understated by approximately P7.633 million;

b) absence of subsidiary ledgers for RPT and SET Receivable; and,

c) Understatement of RPT and SET Receivable accounts due to erroneous recording of fines and penalties on property taxes totaling P0.963 million.

Lupi Qualified/ Modified

Transactions amounting to P0.757 million were obligated

and recorded as liabilities without complete supporting documents to prove their validity, hence overstated liabilities by the same amount; and,

Property, Plant and Equipment (PPE) valued in the books at P50.441 million (excluding Construction in Progress account of P14.628 million) could not be ascertained due to the absence of updated PPE inventory reports and ledger cards. The inadequacy and unavailability of records pertaining to PPE precluded the auditors from performing audit alternative procedures necessary to establish the correctness and accuracy of the year end balances of said accounts.

Magarao Qualified/ Modified/

Receivables and equity accounts were overstated by P1.737 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;

Fund transfers received by the LGU from other national government agencies were already liquidated to the source agencies but the corresponding liability was not derecognized, thus, overstated the Due to NGAs account by P3.660 million;

Constructed waterline extension projects and day care center costing P6.062 million were not booked up, thus, understated assets and equity accounts; and,

The accuracy and correctness of Property, Plant and Equipment (PPE) accounts cannot be ascertained because movable properties in the amount of P12.544 million were not

supported with property ledger cards, inventory reports and other records

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Milaor Qualified/ Modified

Cash Advances granted for over a year totaling P1.753

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 by the same amount; and,

The accuracy and validity of movable Property, Plant and Equipment (PPE) valued in the books at P26.813 million as of December 31, 2017 cannot be ascertained due to the absence of updated and/or complete PPE reports and records.

Minalabac Qualified/ Modified

Cash Advances granted for over a year totaling P4.061

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 by the same amount; and,

The accuracy and validity of movable Property, Plant and Equipment (PPE) valued in the books at P13.329 million as of December 31, 2017 cannot be ascertained due to the absence of updated and/or complete PPE reports and records.

Nabua Qualified/ Modified

The Property Plant and Equipment (PPE) totaling P34.2

million were not recognized in the books while property reports and records were deficient by P60.264 million as

against the reported amounts. The inadequacy and unavailability of records pertaining to PPE accounts precluded the auditors from performing alternative audit procedures necessary to establish the correctness and accuracy of the year-end balances of said accounts.

Ocampo Qualified/ Modified

The Cash-in-Bank, Local Currency Account (LCCA) account balance for all funds totaling P64.856 million did not reconcile by P8.549 million with confirmed bank balances and differed by P1.745 million with cashbook balances; and,

Unrecorded receipts and disbursements of funds resulted in the understatement of Cash-in-Bank-LCCA, Due to NGAs, Trust Liabilities -DRRMF, and Due from LGUs accounts by P9.054 million, P11.329 million, P0.725 million, and P3.000 million, in order; and,

Seven constructed and completed projects costing P11.514 million were not recorded to appropriate PPE accounts, resulting to the understatement of the related PPE and Equity accounts by P11.329 million;

On-going or 42.83 percent project amounting to P1.701

million was not recorded as a debit to Construction in Progress (CIP) but rather to the Due to NGAs account, thus understating the CIP and Due to NGAs accounts by P1.701;

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LGU AUDIT


Procurement of Inventory amounting to P0.604 million

was booked up as Property, Plant and Equipment, resulting in the overtatement and understatement of PPE and Inventory accounts by the same amount; and,

The 60 percent or P0.515 million PCSO counterpart to the donated ambulance was not booked up to Other Transportation account, resulting in the understatement of the related PPE and Equity accounts by the same amount.


Property and accounting records had a variance of P 10.3 million net of accumulated depreciation, thus, the accuracy, existence, condition and validity of PPE balances could not be ascertained.

Pasacao Qualified/ Modified

Forty disbursement vouchers totaling P0.505 million were not recorded due to failure by the Municipal Treasurer to transmit them to the Municipal Accountant resulting in the overstatement of the Cash in Bank-LCCA and understatement of other related accounts;

Cash Advances totaling P5.476 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; and,

Of the total Property, Plant and Equipment (PPE) valued in the books at P167.414 million, P34.915 million was not validated due to the absence of records and reports, thus the correctness and existence/condition thereof could not be ascertained.

Pili Qualified/

Modified Asset and equity accounts were overstated by P5.061

million due to deficiencies in the application of accounting standards and method of recording supplies and materials and recognition of expenses; and,

Movable Property, Plant, and Equipment (PPE) valued in the books at P54.307 million cannot be ascertained due to the absence of updated PPE Ledger cards, Property cards, and the year-end physical inventory report.

Presentacion Qualified/

Modified Cash advances totaling P10.523 million have remained

unliquidated as of December 31, 2017 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; and,

The accuracy and correctness of Property, Plant and Equipment (PPE) in the amount of P13.741 million cannot be ascertained due to the absence of updated property reports and records.

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LGU AUDIT


Ragay Qualified/

Modified Thirty-one disbursement vouchers, totaling P365,803.37,

were not recorded due to failure by the Municipal Treasurer to transmit them to the Municipal Accountant resulting in the overstatement of the Cash in Bank-LCCA and understatement of other related accounts; and,

Of the total Property, Plant and Equipment (PPE) valued in the books at P140.122 million, P38.846 million was not validated due to the absence of records and reports, thus the correctness and existence/condition thereof could not be ascertained.

Sagñay Unqualified/

Unmodified


Modified Rescue Vehicles costing P3.08 million were not recorded in

the LGU’s books of accounts understating the Motor Vehicle and Government Equity accounts;

Accounts Payable totaling P1.128 million were set up at the end of the year for services not yet rendered, overstating payables and related accounts; and,

The accuracy and validity of Property, Plant and Equipment (PPE) valued in the books at P20.163 million as of December 31, 2017 cannot be ascertained due to the absence of updated and/or complete PPE records and reports.

San Jose Qualified/

Modified cash, receivable and equity accounts were overstated by

P1.540 million because cash advances remained unliquidated despite completion of purpose for over two years to more than three years, thus failing to recognize expenses in the period/s to which they relate;

Special Education Tax Receivables account with a negative balance of P1,021,077.76 was not reciprocally reconciled with the account Deferred Special Education Tax Income with a balance of P1,126,693.98;

asset and equity accounts were overstated by P8.175 million due to deficiencies in the application of accounting standards and method of recording supplies and materials and recognition of expenses; and,

Property, plant and equipment worth P27.667 million were not supported with complete report on the physical count of property, plant, and equipment (RCPPE) and property cards.

Sipocot Qualified/

Modified Payables totaling P45.85 million could not be ascertained

because these were recorded without supporting documents;

Property, Plant and Equipment (PPE) valued in the books at of P2.6 million could not be relied upon due to the absence of reports and records; and,

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The recorded Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable for CY 2017 were understated by approximately P1.6 million due to its erroneous basis.

Siruma Qualified/

Modified The movable properties with book value of P15.213 million

has no proper accounting and property records and the cited records had a variance of P11.634 million as of December 31, 2017, thus the accuracy and reliability of the recorded movable properties could not be ascertained; and,

Cash Advances totaling P1.299 million remained unliquidated at 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 receivables and equity accounts by the same amount.

Tigaon Qualified/

Modified Cash, receivable and equity accounts were overstated by

P3.134 million because cash advances 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;

The Property, Plant and Equipment (PPE) account was understated by P18.327 million due to unrecognized land, buildings and other structures; and,

The inventory and equity accounts were overstated by Ᵽ2.100 million due to non recording of issuances as of

December 31, 2017.

Tinambac Qualified/ Modified

improper journal entries resulted to the understatement of the Loans Payable-Domestic and overstatement of equity accounts by P6.102 million;

Cash Advances totaling P2.633 million remained

unliquidated at 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 receivables and equity accounts by the same amount; and,

the accuracy and validity of the recorded movable Property, Plant and Equipment (PPE) valued in the books at P18.728 million as of December 31, 2017 cannot be ascertained due to absence of updated PPE reports and records while property and accounting records were not reconciled by P20.161 million.

Catanduanes Qualified/ Modified

Uunreconciled variance of P97.58 million between the balances per books of accounts and physical inventory of the Property, Plant and Equipment amounting to P527.74 million affected the reliability of the account balance;

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The accuracy, validity and correctness of the reported Inventories amounting to P124.46 million cannot be ascertained due to unrecorded issuances & non-existing inventories worth P94.65 million;

Undocumented and unclaimed payables of P192.97 million remained outstanding for over two years, hence the accuracy of the reported balance of the account cannot be ascertained; and,

Dormant Accounts Receivable totalling P12.83 million which have remained in the books for ten years or more overstated the asset and affected the fair presentation of the account in the financial statements.

Municipalities:

Bagamanoc Qualified/ Modified

The reliability and correctness of the variance of the Property, Plant and Equipment account amounting to P84,904,328 between the RPCPPE for CY 2016 of P20,332,459 and financial statements as of December 31, 2017 of P105,226,787 could not be ascertained due to non- submission of the required RPCPPE.

Baras Qualified/ Modified

The validity, accuracy and existence of the increase in Property, Plant and Equipment accounts for CY 2017, amounting to P26,251,045 or 24% of the total assets could not be ascertained due to non- submission of the required complete inventory report and the failure to submit accounts on time.

Bato Qualified/

Modified The agency failed to conduct physical count, submit

inventory report and reconcile the same with accounting records, for its Property, Plant and Equipment (PPE) with net book value of P48.56 million as of December 31, 2017.

Caramoran Qualified/

Modified The existence and accuracy of the eleven Property, Plant

and Equipment accounts with a total amount of P 36.5 million could not be ascertained due to the failure to complete the physical inventory and submit the RCPPE, and to reconcile inventory report with accounting records.

Gigmoto Qualified/

Modified The LGU failed to complete the physical count of its Property,

Plant and Equipment (PPE) with a book value of P48.57 million, as of the year end.

Pandan Qualified/

Modified The existence and accuracy of the Property, Plant and

Equipment accounts with a total amount of P59.97 million which represents the difference between the total PPE of P117.58 million and cost of PPE verified by us amounting to P57.61 million could not be ascertained due to the failure of the LGU to complete the physical count and submit the RPCPPE to reconcile inventory report with accounting records; and,

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The difference in the balance of the Cash in Bank account between the ledger and bank records of P2.44 million as of December 31, 2017 could not be validated due to the failure of the accounting office to prepare bank reconciliation statement.

Panganiban Qualified/

Modified The accuracy of the Cash in Bank amounting to P23,702,540

could not be validated due to the failure of the Municipal Accountant to submit to COA the bank reconciliation statements;

Misclassification of the current portion of the loans payable amounting to P1,999,906 affected the fair presentation of the liability accounts in the financial statements; and,

Unreconciled variance of P2,198,791.72 between the RPCPPE and the accounting records for Property, Plant and Equipment, rendered the PPE accounts as shown in the financial statements as of December 31, 2017, unreliable.

San Andres Qualified/

Modified The accuracy, existence, validity and reliability of the

Property, Plant and Equipment (PPE) account balances as of December 31, 2017 could not be ascertained due to the unreconciled variance of P22.08 million representing the difference between the total PPE per General Ledgers of P118.93 million and per Report on Physical Count of Plant and Equipment (RPCPPE) of P141.01 million due to the failure of the Accounting and General Services units to complete the reconciliation of their records.


Modified Thirteen bank accounts of the Local Government Unit of San

Miguel with a total bank balance of P11.006 million were not recorded in the books of accounts. This resulted to the understatements of the following accounts under the General Fund: Cash in Bank by P11.006 million; Due to Other NGAS by P8.610 million, Due to Other Funds by P0.070 million and Trust Liability-DRRMF by P2.327 million. The unrecorded P11.006 million transactions for cash in bank account is equivalent to 14.30% 0f the total assets of the agency costing P76.953 million;

Transactions of the Local Government Unit pertaining to the transfer of P1.498 million unexpended balance of 5% Calamity Fund-CY 2016, and the P2.044 million disbursements thereof were not recorded in the Trust Fund books. This resulted to the overstatement by P.546 million of Trust Liability-DRRMF account;

Trust receipts with total balances of P.529 million and P1.299 million for expenditures were not recorded in the Trust Fund books. This resulted to the overstatement by P.770 million of Due to other NGAs account and understatement of expenditures accounts; and,

Of the total PPE with book value of P27.308 million, the Audit Team was able to validate the existence of some non-current assets totaling P13.277 million, resulting to

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unverified/ unsubstantiated PPE balance of P14.031 million which is equivalent to 18% of the total assets of the LGU costing P76.952 million. of balances of the PPE costing P14.031 million.

Viga Unqualified/

Unmodified

Virac Qualified/

Modified The LGU failed to complete the conduct physical count of its

Property, Plant and Equipment (PPE) with a book value of P540,402,319.81 million, as of the year end.

Masbate Qualified/ Modified

Due to the non-submission of the complete Report on the Physical Count of Property, Plant and Equipment (PPE) to the Auditor for verification, thus, the existence and conditions of the Provincial Government’s properties amounting to P280,703,148.13 which still includes the cost of unserviceable, destroyed and disposed PPEs of P163,643,641.97, could not be ascertained and relied upon.

City:

Masbate City Qualified/ Modified

Inability of the agency to complete the conduct of physical count and submit the required physical inventory report of its Property, Plant and Equipment (PPE) worth P175,606,323.45; and incorrect set up of Real Property Tax/Special Education Tax Receivables at the beginning of the year which resulted in the understatement of the receivables account by P11,496,881.90. The inadequacy of records did not permit the audit team to apply alternative audit procedures to determine the validity, accuracy and correctness of these accounts.

Municipalities:

Aroroy Qualified/ Modified

The reported balance of the Cash on Bank account of P213,621.130.10 may not be relied upon due to non-preparation of bank reconciliation statements for all bank accounts and existence of total unreconciled amount of P3,330,715.49; and,

The LGU 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 property, plant and equipment with gross value of P295,684,395.92, or at least 38.82 percent of the total PPE of P761,626,415.37, cannot be readily ascertained. The inadequacy of the agency’s records and supporting documents, time constraints and the bulk of LGU properties and transactions did not permit the audit team to immediately apply adequate alternative procedures to verify and determine the validity, accuracy and correctness of the aforesaid unreconciled amounts. In addition, lacking Disbursement Vouchers for CY 2016 to CY 2017 totaling to P23,603,540.53 remained unsubmitted as of this date.

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LGU AUDIT


Baleno Qualified/ Modified

The LGU was still not able to conduct a physical count of all its properties and reconcile the Property and Accounting records, however, only the amount of P55,220,795.25, representing the difference between the total PPE of P195,659,521.02 and accounted properties valuing P140,438,725.77, or about 28.22% of the total PPE as of year-end could not be ascertained.

Collection and Disbursement accounts CY 2017 totaling to P47,491,680.82 and P19,245,260.57 remained not submitted as of this date.

Balud Qualified/ Modified

Due to the agency’s inability to record some properties funded and turned-over by other government agencies as well as the inability of the Municipal Accountant to account for the livestock distributed under the agency’s Dispersal program amounting to P 1.2 million which rendered the account balance of the Property, Plant and Equipment Account inaccurate and/or unreliable. The inadequacy of its records did not permit the Audit Team to apply alternative procedures to determine the validity and propriety of these accounts.

Batuan Qualified/ Modified

The amount of P3,060,678.41 or 6.93% of the reported balance of the Cash in Bank account of P44,163,714.29 is not reconciled with the bank records and the bank reconciliation for all accounts were not prepared.

The existence, accuracy and validity of the recorded balances of Property, Plant and Equipment accounts amounting to P7,367,414.66 subject to physical count as of December 31, 2017, which constitutes 12.84% of the total assets, could not be ascertained due to

a) non-maintenance of the required Ledger Cards, Property Cards, Acknowledgment Receipt for Equipment and other pertinent records;

b) inability to conduct physical inventory; and,

c) non-provision of depreciation. The inadequacy of records and supporting documents did not permit use to apply adequate alternative procedures to determine the validity and accuracy of these accounts.

Cataingan Qualified/ Modified

The recorded Inventories amounting to P1.80 million or 0.5 per cent of the total assets and Property, Plant and Equipment (PPE) amounting to P33.34 million or 8.42 per cent of the total assets were not physically counted and the pertinent reports were not submitted as of December 31, 2017;

The monthly Bank Reconciliation Statements of its Cash in Bank account with an aggregate amount of P65.05 million were not prepared and submitted as of year-end; and,

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Loans Payable-Domestic Account was understated by P4.77 million due to erroneous posting of interest and other charges. The inadequacy of its records and supporting documents did not permit the audit team to apply adequate alternative procedures to determine the validity and accuracy of these accounts.

Cawayan Qualified/ Modified

Due to the agency’s delay in the submission of various Disbursement Vouchers for CY 2017. These documents are needed in the timely review and post audit of the transactions. There was a recorded one hundred sixteen (116) average number of days delayed in each month for CY 2017. Furthermore, there was no submitted Report on Physical Count of its Property, Plant, and Equipment with total book value of P40,564,760.59 or 9.58% of the LGU’s total assets as of December 31, 2017.

Claveria Qualified/ Modified

The LGU was not able to conduct a physical count of all its properties and reconcile the property and accounting records, however, only the amount of P21,531,311.42, representing the difference between the total PPE of P102,313,861.42 and accounted properties valued at P80,782,550.00 or about 21% of the total PPE as of year-end, could not be ascertained.

Dimasalang Qualified/ Modified

The reliability and accuracy of the recorded Property, Plant and Equipment (PPE) account worth P79.79 million which represents 39.79 per cent of the total assets as of December 31, 2017 cannot be ascertained due to the unreconciled difference between the accounting and property records as of year-end. Also, the acquisition through fund transfers of various PPE totalling P13.41 million or 6.69 per cent of the total assets was not recorded in the books of accounts of the Municipality.

Esperanza Qualified/ Modified

Due to the agency’s inability to record some properties funded and turned-over by other government agencies which rendered the account balance of the Property, Plant and Equipment Account inaccurate and/or unreliable. The inadequacy of its records did not permit us to apply alternative procedures to determine the validity and propriety of these accounts.

Mandaon Qualified/ Modified

Due to the agency’s inability to record some properties funded and turned-over by other government agencies which rendered the account balance of the Property, Plant and Equipment Account inaccurate and/or unreliable. The inadequacy of its records did not permit the audit team to apply alternative procedures to determine the validity and propriety of these accounts.

Milagros Qualified/ Modified

The reported balance of the Cash in Bank account of P105,792,416.99 may not be relied upon due to non-preparation of bank reconciliation statements for all bank accounts and existence of total unreconciled amount of P25,778,627.89;

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LGU AUDIT


The LGU 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 property, plant and equipment with gross value of P80,876,922.56, or at least 17.15 percent of the total PPE of P471,459,145.65, cannot be readily ascertained;

The inadequacy of the Agency’s records and supporting documents, time constraints and the bulk of LGU properties and transactions did not permit us to immediately apply adequate alternative procedures to verify and determine the validity, accuracy and correctness of the aforesaid unreconciled amounts; and,

Unrecorded depreciation expense of an undetermined amount existed due to non-transfer of completed infrastructure projects amounting to P154,960,377.45 from Construction in Progress accounts to appropriate asset accounts.

Mobo Qualified/ Modified

The LGU was still not able to conduct a physical count of all its properties and reconcile the Property and Accounting records, however, only the amount of P22,022,882.45, representing the difference between the total PPE of P103,573,626.21 and accounted properties valuing P81,550,743.76, or about 21.26% of the total PPE as of year-end could not be ascertained. The inadequacy of the Agency’s records and supporting documents did not permit us to apply adequate alternative procedures to verify and determine the validity, accuracy and correctness of the aforesaid unreconciled amount.

Monreal Qualified/ Modified

Due to the agency’s inability to conduct the annual inventory taking of its Property, Plant and Equipment and submit the physical inventory report, thus, the correctness of the balance of some PPE accounts amounting to P9,284,915.60 comprising 5.14% of the total assets at year end could not be ascertained. Moreover, assets amounting to P4,233,967.71 representing 2.34% of the total assets were not subjected to depreciation for several years now, accordingly the corresponding balance pertaining to this PPE cannot be relied upon.

Palanas Qualified/ Modified

The recorded Property, Plant and Equipment (PPE) account of the Municipality of Palanas includes items amounting to P14.34 million or seven per cent of the total assets, with no details and with doubtful existence; and,

The reliability and accuracy of the recorded PPE account worth P19.47 million which represents 15.52 per cent of the total PPE counted cannot be ascertained due to the unreconciled difference between the accounting and property records as of year-end; and,

The acquisition thru fund transfers of various PPE totalling P8.89 million or four per cent of the total assets was not recorded in the books of accounts of the Municipality.

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LGU AUDIT


Pio V. Corpuz Qualified/ Modified

The municipality was unable to record some properties funded and turned-over by other government agencies as well as the inability of the Municipal Accountant to account for the livestock distributed under the agency’s Dispersal program amounting to P 1.437 million which rendered the account balance of the Property, Plant and Equipment Account inaccurate and/or unreliable.

Placer Unqualified/ Unmodified

San Fernando Qualified/ Modified

Due to the agency’s inability to conduct the annual inventory taking of its Property, Plant and Equipment and submit the physical inventory report. Alternative procedures were taken by examining relevant schedules of properties as well as ocular inspection of the same. Though the Audit Team applied alternative procedures to compensate for the deficiency, the correctness of the balance of PPE account amounting to P9,284,915.60 comprising 5.14% of the total assets at year end still could not be ascertained resulting to the modification of the opinion.

San Jacinto Qualified/ Modified

The existence, accuracy and validity of the recorded balances of Property, Plant and Equipment accounts amounting to P12,744,160.01, subject to physical count as of December 31, 2017, which constitutes 4.81 per cent of the total assets, could not be ascertained due to a) non-maintenance of the required Ledger Cards, Property Cards, Acknowledgment Receipt for Equipment and other pertinent records b) inability to conduct physical inventory and c) non-provision of depreciation. The inadequacy of records and supporting documents did not permit the audit team to apply adequate alternative procedures to determine the validity and accuracy of these accounts.

San Pascual

Qualified/ Modified

The existence, accuracy and validity of the recorded balances of Property, Plant and Equipment accounts amounting to P12,744,160.01, subject to physical count as of December 31, 2017, which constitutes 4.81 per cent of the total assets, could not be ascertained due to

a) non-maintenance of the required Ledger Cards, Property Cards, Acknowledgment Receipt for Equipment and other pertinent records;

b) inability to conduct physical inventory; and,

c) non-provision of depreciation.

Uson Qualified/ Modified

Inability of the agency to conduct physical count and submit the required physical inventory reports of its Property, Plant and Equipment (PPE) worth P34,572,979.38 which is 15.64 percent of the total PPE hence, the correctness of the balance could not be ascertained. The inadequacy of records did not permit the audit team to apply alternative audit procedures to determine the validity, accuracy and correctness of these accounts.

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LGU AUDIT


Sorsogon Qualified/ Modified

Property, Plant and Equipment Ledger Cards (PPELC) and Property Cards (PC) for various land, land improvements and buildings totaling P656,046,709.90 were not maintained and lack of information to substantiate the balances precluded detailed audit hence the completeness, accuracy and reliability of account balances could not be ascertained; and,

Book reconciling items that were not supported with evidences were not recorded resulting in net understatement of Cash in Bank – LCCA totaling P1,376,253.18 defeating the purpose of Bank Reconciliation Statements.

City:

Sorsogon City Qualified/ Modified

The accuracy and correctness of the Cash accounts cannot be ascertained due to the unaccounted and unreconciled difference of P4.28 million between the ledger and the cashbook balances and the unadjusted book reconciling items amounting to P1.02 million of the Cash in Bank accounts;

Cash advances totalling P8.17 million including P0.80 million which had been outstanding for one to more than six years remain unliquidated at yearend; and,

The accuracy of the Property, Plant and Equipment accounts was doubtful due to a discrepancy amounting to P20.56 million between the accounting records and physical count. Because of the limited and insufficient records, we were not able to satisfy ourselves as to the accuracy of the amount by means of adequate alternative procedures

Municipalities:

Barcelona Qualified/ Modified

The reported Property, Plant and Equipment balances in the financial statements did not tally with its supporting schedules by a difference of P9.03 million; and,

SL balances of Cash in Bank accounts were not reconciled with the Cashbooks by P0.83 million.

Bulan Adverse The Property, Plant and Equipment (PPE) valued at P112.92

million could not be relied upon due to various lapses;

The reliability of the reported balance of the Cash in Bank –

Local Currency, Current Account (LCCA) totaling P123.72

million could not be ascertained due to the existence of

various unidentified reconciling items and discrepancies in

the book, bank and cashbook balances;

Cash advances totaling P54.75 million could not be relied

upon due to numerous accounting and recording lapses and

this amount remained unliquidated at year-end which

compromised the reliability of asset and expense accounts;

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LGU AUDIT


The balances of the Accounts Payable and Due to National

Government Agencies (NGAs) accounts totalling P49.04

million and P48.03 million, respectively, are unreliable due to

inadequacy of records and various accounting errors or

lapses.

The Municipality did not submit 1,136 disbursement vouchers (DVs) and payrolls with an aggregate amount of P88.58 million.

Bulusan Qualified/ Modified

The balances of the Cash in Bank accounts between its Subsidiary Ledgers and the Cashbooks were not reconciled by P5.45 million;

Net book reconciling items of P1.7 million were not adjusted in the books; and,

General Ledger balances of Property, Plant and Equipment (PPE) account do not reconcile with the result of physical count of PPE by P3.24 million.

Casiguran Qualified/ Modified

The reliability and accuracy of the cash accounts, expenses and other related accounts cannot be ascertained due to

a) unaccounted and unreconciled differences between the ledger and the cashbook, between the ledger and the bank balances of the Cash in Bank accounts amounting to P6.48 million and P5.15 million, respectively;

b) unadjusted valid reconciling items in the books of accounts which resulted to a net overstatement of P7.19 million; and

c) adjustments made of the book reconciling items for CYs 2013-2017 without supporting schedules and documents with a net effect of an overstatement to the cash accounts by P2.19 million;

Non-liquidation of cash advances totaling P1.16 million, including P1.07 million which had been long outstanding for one to more than six years overstated the advances accounts and understated the related expenses accounts; and,

Overstatement of the Property, Plant and Equipment (PPE) accounts totaling P0.66 million because of the demolished building by same amount which were still recorded in the books of accounts due to lack of supporting documents. Because of the limited and insufficient records, we were not able to satisfy ourselves as to the accuracy of the amount by means of adequate alternative procedure

Castilla Unqualified/ Unmodified

Donsol Unqualified/ Unmodified

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LGU AUDIT


Gubat Unqualified/ Unmodified

Irosin Unqualified/ Unmodified

Juban Unqualified/ Unmodified


The accuracy and correctness of the cash accounts cannot

be ascertained due to the unaccounted and unreconciled

difference of P12.14 million between the ledger and the

cashbook balances of the Cash in Bank accounts; and,

The existence and valuation of the Property, Plant and Equipment (PPE) amounting to P9.63 million could not be ascertained due to the unreconciled balance between the accounting and property records amounting to P99.96 million and P90.33 million, respectively, as of December 31, 2017. Because of the limited and insufficient records, we were not able to satisfy ourselves as to the accuracy of the amount by means of adequate alternative procedures.

Matnog Qualified/

Modified The accuracy and reliability of the recorded balances of the

Property, Plant and Equipment (PPE) accounts totaling P22.91 million could not be ascertained due to incomplete records; and,

The accuracy and correctness of the Cash in Bank accounts cannot be ascertained due to unreconciled balances of P2.67 million between the Subsidiary Ledgers and Cashbooks.

Pilar Unqualified/ Unmodified

Prieto Diaz Qualified/ Modified

Errors were made in the recording of transactions which resulted to the understatement of the affected asset and liability accounts by P18.5 million; and,

The accuracy and completeness of the reported Property, Plant and Equipment (PPE) balances of P7.04 million could not be ascertained due to non-conduct of physical count which could have overstated the total amount of PPE presented in the financial statements.

Santa Magdalena Qualified/ Modified

The accuracy and completeness of the reported Property, Plant and Equipment (PPE) accounts totaling P20.25 million could not be ascertained due to incomplete records of the agency.

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LGU AUDIT


Region VI – Western Visayas

Aklan Qualified/ Modified

The management was not able to submit the duly reconciled Report on the Physical Count of Property, Plant and Equipment (RPCPPE) with the books of account, thereby casting doubt on the correctness of the net balance of the account amounting to P2,600,373,679.16, contrary to Sec. 57 of the Manual on New Government Accounting System (NGAS) for Local Government Units (LGUs) Vol. II;

The RPCPPE lacks vital information which renders it

incomplete and unreliable;

The Advances to Special Disbursing Officer, Due from

Officers and Employees and Other Receivables accounts includes dormant unliquidated cash advances amounting to P6,888,884.57, thereby, affecting the fair presentation of these accounts in the Financial Statements contrary to the provisions of COA Circular No. 2016-005;

Due from Officers and Employees and Other Receivables

accounts includes dormant unliquidated cash advances amounting to P6,888,884.57, thereby, affecting the fair presentation of these accounts in the Financial Statements contrary to the provisions of COA Circular No. 2016-005;

Due to Philhealth account has a debit/negative and

unreconciled balance amounting to P2,224,343.36, thereby, causing misstatement in the Financial Statement contrary to the provisions of COA Circular No. 2015-009 Revised Chart of Accounts for Local Government Units;

Control lapses on the review and recording of the

transactions to ensure observance to the prescribed policies and procedures resulted to an unreconciled difference of P1,959,792.47, thus, casted doubt on the accuracy and reliability of the balances of reciprocal accounts Due from Other Funds and Due to Other Funds under all funds of the Provincial Government of Aklan;

Small tangible items with serviceable life of more than one (1) year were reported as Property Plant and Equipment (PPE) in the Report on the Physical Count of PPE (RPCPPE) and remained unadjusted in the books of accounts, thereby overstating the PPE accounts and understating this year’s appropriate Expense accounts or overstatement of beginning Government Equity, as the case may be, contrary to the provisions of COA Circular No. 2005-002 dated April 14, 2005; and,

Acknowledgement Receipt for Equipment (ARE) were issued

for the custody, instead of Inventory Custodian Slip (ICS);

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LGU AUDIT


Municipalities:

Altavas Qualified/ Modified

The agency failed to complete the physical count of its PPE amounting to P33.142 million and to submit a Report on the Physical Count of PPE which should be reconciled with the accounting records, reconcile the reciprocal accounts, Due From/To Other Funds with a net difference of P.223 million and Payable Accounts amounting to P12.121 million.

Balete Qualified/ Modified

The agency failed to complete the physical count of its PPE amounting to P0.198 million and to submit a Report on the Physical Count of PPE which should be reconciled with the accounting records, attach aging schedules, records or documents on Due From LGUs, Discount on Advance Payments, Other Prepayments and Work/Zoo Animal Accounts, aggregating P1.199 million and reconcile reciprocal accounts, Due From/To Other Funds with a net difference of P.021 million.

Banga Qualified/ Modified

The agency failed to come up with the Report on the Physical Count of Property Plant and Equipment (PPE) and reconcile the same with the accounting records.

Batan Qualified/ Modified

The agency failed to complete the physical count of its PPE amounting to P44.760 million or 27.86 percent of the total assets and to submit a Report on the Physical Count of PPE which should be reconciled with the accounting records, liquidate cash advances to officers and employees amounting to P0.529 million, reconcile Reciprocal accounts, Due from Other Funds and Due to Other Funds with a net difference of P2.664 million after consolidation of all funds and Payable account Due to GSIS with a negative balance of P0.258 million, set- up the Real Property Tax (RPT) and Special Education Tax (SET) Receivables with the corresponding Deferred RPT and SET amounting to 2.047 million, respectively, attach accurate and detailed aging schedule and sufficient supporting documents and subsidiary ledgers of some Payable accounts amounting to P21.368 million and Dormant Receivable Accounts with an aggregate amount of P0.261 million.

Buruanga Qualified/ Modified

The Municipality was not able to complete the physical inventory of Property, Plant and Equipment thus, resulted to difficulty in determining the accuracy, existence, and ownership of the Property, Plant and Equipment (PPE) account amounting to P68,219,356.01, contrary to Section 124 of the Manual on the New Government Accounting System for LGUs, Volume I.

Ibajay Qualified/ Modified

Management failed to submit a complete and adequately accomplished Report on Physical Count of Property, Plant and Equipment (RPCPPE) which should be reconciled with the accounting records.

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LGU AUDIT


Kalibo Qualified/ Modified

Unreconciled PPE ledger balances against the submitted Report on Physical Count of Property, Plant and Equipment. Due to time constraints, the Auditor was not able to perform alternative procedures to determine the correctness of the amount presented in the financial statements.

Lezo Unqualified/ Unmodified

Libacao Qualified/ Modified

The agency failed come up with the Report on the Physical Count of Property Plant and Equipment (PPE) and reconcile the same with the accounting records.

Madalag Qualified/ Modified

The agency failed to come up with the Report on the Physical Count of Property Plant and Equipment (PPE) with the balances in the books of accounts.

Makato Qualified/ Modified

Failure of the management to prepare and reconcile the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) for CY 2017. Due to time constraints, the Auditor was not able to perform alternative procedures to determine the correctness of the amount presented in the financial statements.

Malay Qualified/ Modified

The Municipality was not able to complete the physical inventory of Property, Plant and Equipment thus, resulted to difficulty in determining the accuracy, existence, and ownership of the Property, Plant and Equipment (PPE) account amounting to P370,552,853.23, contrary to Section 124 of the Manual on the New Government Accounting System for LGUs, Volume I.

Malinao Unqualified/ Unmodified

Nabas

Qualified/ Modified

Failure of the management to conduct physical inventory of the Property, Plant and Equipment (PPE) with total amount of P67.394 million which is 26.44 percent of the total assets of P256.835 million;

Depreciation was not provided for the Municipality’s depreciable PPE totaling P30,162 million;

Neon-reconciliation of reciprocal accounts “Due form Other Fund and “Due to Other Fund” by P21.775 million; and

Unadjusted/unrecorded reconciling items in Bank Reconciliation Statements that resulted to overstatement of P2.426 million in cash in bank balance in General Fund.

New Washington Qualified/ Modified

Failure of the management to prepare and reconcile the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) for CY 2017. Due to time constraints, the Auditor was not able to perform alternative procedures to determine the correctness of the amount presented in the financial statements.

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LGU AUDIT


Numancia Unqualified/ Modified

Tangalan Unqualified/ Unmodified

Antique Qualified/ Modified

Total variance of P224.391 million was determined between the balances of inventory accounts per accounting records and per Report on the Physical Count of Inventories (RPCI) prepared by the Provincial General Services Office (PGSO) and a total of 4,194 claimed DVs amounting to P309.277 million or 21.85% of the total claimed checks were not yet submitted for audit thus, thus, the account may not be fairly presented in the financial statements.

Municipalities:

Anini-y Qualified/ Modified

Effects of the non-reconciliation of the accounting and property records on Property, Plant, and Equipment (PPE) accounts amounting to P49.664 million net of depreciation or 46.77 per cent of the total assets of the Municipality which rendered the financial statements doubtful as to the reliability of the PPE balances.

Barbaza Qualified/

Modified The correctness and existence of the recorded Property Plant

and Equipment (PPE) valued at P49.382 million could not be ascertained since physical count was not conducted and reconciliation with accounting records was not performed. The existing records did not also allow application of alternative audit procedures, thus rendered unreliable the accuracy of the balances and the existence of the PPE.

Belison Qualified/

Modified The accuracy and existence of the recorded Property, Plant

and Equipment (PPE) valued at P49.331 million could not be ascertained because the agency was not able to conduct physical count and submit a report thereon; and,

The balance of the Real Property Tax (RPT) Receivables of

P0.689 million and Special Education Fund (SEF) Tax Receivables of P0.875 million were doubtful because the agency was not able to support the receivables with a certified list of taxpayers indicating the corresponding amounts due and collectible.

Bugasong

Qualified/ Modified

The Municipality failed 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 P151.217 million as at year end. The inadequacy of its records did not permit us to apply adequate alternative procedures to determine the accuracy of the balances and the existence of the assets; and,

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LGU AUDIT


The non-reconciliation of the book balances and cashbook balances of the Cash – Local Treasury and Cash in Bank – Local Currency Current Account which resulted to difference of P1.180 million and P6.175, respectively, also rendered the amounts presented in the financial statements doubtful and unreliable.

Caluya Qualified/ Modified

The reported balances of these accounts are not reliable due to the following:

a) Property, Plant and Equipment (PPE) amounting to P705.042 million due to failure of the Municipality to conduct complete physical inventory and non-reconciliation of the report with property and accounting records, and unserviceable properties amounting to P8.785 million are still carried in the books; and,

b) Cash account because book reconciling items totaling P20.894 million remained unrecorded at year end.

Culasi Qualified/ Modified

The reported balances of the following accounts are doubtful and not reliable due to the following reasons:

a) Property, Plant and Equipment (PPE) accounts amounting to P127.476 million because the Municipality did not prepare the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and maintain property cards;

b) Depreciable PPE totaling P64.795 million due to non-provision of depreciation

c) Land account amounting to P2.936 million in the books because it was unreconciled with property records; and

d) Cash in Bank accounts pertaining to SEF and TF - Proper totaling P7.559 million because bank reconciliation statements for the two accounts were not prepared; thus, unreconciled difference of P17.992 million between balances per books and per bank statements.

Hamtic Qualified/ Modified

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 P99.594 million or 42.04% of the total Assets of P236.920 million.

Laua-an Qualified/ Modified

The recorded Property, Plant and Equipment valued at P74,965,577.57 was not reliable because the agency failed to conduct an inventory of the Property, Plant and Equipment as of December 31, 2017 and the existing records did not allow the application of alternative audit procedures.

Libertad Qualified/ Modified

Existence and completeness of Property, Plant and Equipment (PPE) amounting to P31,058,350.50 net of accumulated depreciation cannot be verified due to non-submission of Report of Physical Count of Property, Plant and Equipment (RPCPPE); and,

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LGU AUDIT


Due from NGAs and Other Receivables amounting to P37,625.36 and P253,110.01 respectively remained long outstanding or dormant in the books for more than the (10) years casting doubt on its collectability. This resulted in the overstatement of agency’s assets due to inclusion of accounts with doubtful existence.

Pandan Qualified/ Modified

Reported balances of Property, Plant and Equipment (PPE) accounts amounting to P82.375 million are doubtful and not reliable due to the failure of the Municipality to conduct physical count 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/ Modified

The Property, Plant and Equipment with book value of P18.392 million were not transferred to recipient schools or local government units, thus, overstating the total assets account of the same amount.


Reliability and accuracy of Property, Plant and Equipment (PPE) valued at P200.95 million as of December 31, 2017 were doubtful due to non-submission of Report of Physical Count of PPE to the Office of the Auditor.

San Remigio Qualified/ Modified

The recorded Property, Plant and Equipment valued at P144.642 million was not reliable because the agency failed to conduct an inventory of the Property, Plant and Equipment as of December 31, 2017 and the existing records did not allow the application of alternative audit procedures; and,

The completed public infrastructure projects of P52.026 million in the General Fund were transferred to the Registry of Public Infrastructures and P12.001 million in the Trust Fund were debited to Due to NGA’s account and credited to Construction in Progress understating the Municipality’s assets by P64.027 million.

Sebaste Qualified/ Modified

Correctness, existence and accuracy of Property, Plant and Equipment (PPE) valued in the books at P135.154 million as of December 31, 2017 remain 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 reconciliation with the accounting records was not made; and,

Depreciation expenses were not provided for the properties of the Municipality, thus the net book value of the assets cannot be established affecting the fair presentation in the financial statements.

Sibalom Qualified/ Modified

The correctness and existence of the recorded Property Plant and Equipment (PPE) valued at P198.741 million could not be ascertained since physical count was not conducted and no report was submitted thereon; and,

257

LGU AUDIT


The balance of the Real Property Tax (RPT) Receivables of P13.260 million did not reconcile with the amount shown in the RPT Delinquencies Report totaling P17.271 million resulting to understatement of P4.011 million in the RPT Receivables and Deferred Revenue.

Tibiao Qualified/ Modified

Reported balances of the Property, Plant and Equipment (PPE) accounts amounting to P54.615 million are doubtful and unreliable due to the failure of the Municipality to conduct an actual physical count of PPE, absence of an updated RPCPPE and non-maintenance of property cards and property ledger cards by the property custodian and accountant, respectively

Tobias Fornier Unqualified/ Unmodified

Valderrama Qualified/ Modified

The Municipality failed 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 P96.905 million as at year end. The inadequacy of its records did not permit us to apply adequate alternative procedures to determine the accuracy of the balances and the existence of the assets.

Capiz Unqualified/ Unmodified

City:

Roxas City Qualified/ Modified

Non-liquidation of cash advances totaling P5.058 million as of December 31, 2017; and,

Physical inventory of property, plant and equipment (PPE) totaling P931.321 million was not conducted as required by existing rules and regulations, thus the validity, existence and correctness of the PPE accounts could not be ascertained.

Municipalities:

Cuartero Qualified/ Modified

Net unreconciled difference of P71,570,206.04 in the Property, Plant and Equipment (PPE) accounts presented in the Financial Statements and the Report on Physical Count of Property, Plant and Equipment (RPCPPE); and

Eight out of nine parcels of land owned by the Municipality with total market value amounting to P25,786,077.80 were not recorded in the agency books.

Dao Unqualified/ Unmodified

Dumalag Qualified/ Modified

Non-liquidation of cash advances totaling P1.667 million; and

Non-reconciliation of the Report on the Physical Count of PPE (RPCPPE) as of December 31, 2017 with the Property Ledger Cards and PPE General Ledger (GL) balances as of December 31, 2017 totaling P176.008 million.

258

LGU AUDIT


Dumarao Qualified/ Modified

Non-moving receivable accounts totaling P2.817 million whose possibility of collection is nil, remained in the books of the Municipality; and

Eight out of twelve parcel of land owned by the Municipality with total market value amounting to P38.208 million were not registered under the Torrens Title System and were not recorded in the agency books.

Ivisan Qualified/ Modified

The validity, physical existence and accuracy of the year-end balance of Property, Plant and Equipment of P95.356 million cannot be ascertained due to the 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, required under Sections 119 and 120 of the same Manual.

Jamindan Qualified/ Modified

Physical inventory of the Property Plant and Equipment (PPE) amounting to P115.385 million was not conducted thus, the correctness, accuracy and existence of the reported PPE, as well as property accountability may not be ascertained;

The “Due to Other Funds” account amounting to P4.844 million under the Trust Fund (TF) had no corresponding amount in the “Due from Other Funds” account thus, renders the correctness and accuracy of the recorded transactions doubtful; and,

The unexpended balance of Local Disaster Risk Reduction and Management Fund (LDRRMF) in prior years and the current year totalling P9,386,994.98 were not transferred to Special Trust Fund under the account “Trust Liability-DRRM” in the Trust Fund books thus, hindering its utilization due to the non-determination of the amount available for use.

Maayon Qualified/ Modified

Non-conduct of physical inventory for property, plant and equipment totaling P 94.997 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 P433,133.10, contrary to Section 89 of Presidential Decree (PD) 1445 and Sections 5.1.3, 5.7 and 5.8 of COA Circular No. 97-002 dated February 10, 1997, resulted in the overstatement of equity and understatement of expense accounts.

Mambusao Qualified/ Modified

Physical inventory of the Property, Plant and Equipment (PPE) amounting to P144.050 million was not conducted thus, the correctness, accuracy and existence of the reported PPE, as well as property accountability could not be ascertained; and

The PPE with a total acquisition cost of P78.850 million were not provided with depreciation, thus overstating the PPE accounts and understating expense accounts.

259

LGU AUDIT


Panay Qualified/ Modified

Non-provision of depreciation for Public Infrastructure Assets-Road Network amounting to P18.6 million, resulting to the overstatement of LGU’s Assets, contrary to COA Circular No 2015-008 dated November 23, 2015 adopting the PPSAS for Local Road Network System and non-recognition in the books of lands owned by the Municipality.

Panitan Qualified/

Modified Existence of unserviceable/obsolete properties totaling

P21.6 million that still remain in the book of accounts where appropriate disposal has not yet been undertaken contrary to COA Circular No. 89-296 dated January 27, 1989, Section 79 of Presidential Decree (PD) 1445 and Article 435 of the Implementing Rules and Regulations (IRR) of the Local Government Code of 1991.

Pilar Unqualified/

Unmodified

Pontevedra Qualified/ Modified

Non-recognition of the 50% Local Road and Road Network System as part of the LGU’s Property, Plant and Equipment (PPE) Account amounting to P161,424,445.45 and non-inclusion of lands owned by LGU in the Land Account with book value of P1,185,084.32;

President Roxas Qualified/

Modified Cash advances totaling P0.566 million remained

unliquidated/unsettled as of December 31, 2017 contrary to Section 89 of Presidential Decree (PD) 1445 and Sections 5.1.3, 5.7 and 5.8 of COA Circular No. 97-002 dated February 10, 1997, resulted in the overstatement of equity and understatement of expense accounts; and,

Physical inventory of properties totaling P190.117 million as of December 31, 2017 was not conducted and a report on the physical count was not submitted to the Audit Team, thus, the correctness, accuracy and existence of the reported PPE, as well as property accountability may not be ascertained.

Sapian Qualified/

Modified Inadequate monitoring of the Status of Unliquidated Cash

Advances to Officers and Employees amounting to P 476,475.07 as of December 31, 2017 contrary to Section 89 of Presidential Decree (PD) 1445 and Sections 5.1.3, 5.7 and 5.8 of COA Circular No. 97-002 dated February 10, 1997, resulted in the overstatement of equity and understatement of expense accounts;

The validity, physical existence and accuracy of the year-end balance of Property, Plant and Equipment of P99,177,126.08 cannot be ascertained due to the following:

a) Failure of the Inventory Committee to conduct Physical Inventory and submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) required under Section 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I; and

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b) Failure of the Municipal Accountant and Municipal Treasurer to maintain and reconcile the Property, Plant and Equipment Ledger Cards (PPELC) and Property Cards (PC), respectively, required under Sections 119 and 120 of the same Manual.

Sigma Qualified/

Modified Non-conduct of reconciliation of the Report of Physical Count

of Property, Plant and Equipment (RPCPPE) as against the accounting records, contrary to Section 114 of Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume I hence, the correctness, accuracy and existence of the reported PPE, as well as property accountability may not be ascertained; and,

Transfer of the unexpended balances of Local Disaster Risk Reduction and Management Fund (LDRRMF) in prior years and the current year totaling P9,441,200.96 to the Special Trust Fund under the account “Trust Liability-DRRM” in the Trust Fund books thus hindering its utilization due to the non-determination of the amount available for use.

Tapaz Qualified/

Modified Inadequate monitoring of the Status of Unliquidated Cash

Advances for Advances to Officers and Employees amounting to P306,562.01 as of December 31, 2017 contrary to Section 89 of Presidential Decree (PD) 1445 and Sections 5.1.3, 5.7 and 5.8 of COA Circular No. 97-002 dated February 10, 1997, resulted in the overstatement of equity and understatement of expense accounts.

The validity, physical existence and accuracy of the year-end balance of Property, Plant and Equipment of P132.450 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) required under Section 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume Iand,

b) 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, required under Sections 119 and 120 of the same Manual.

Guimaras Qualified/ Modified

Adjustments as additions and deductions to Cash in Bank - LCCA amounting to P8.007 million and P2.153 million, respectively, including stale checks amounting to P0.178 million were not taken up in the books of accounts;

Cash Advances granted to employees under the accounts “Advances for Officers and Employees” totaling P12.073 million and “Petty Cash Fund” amounting P23,500.00 have been outstanding for an average of 2 years;

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The balance between the account Due from LGUs of the Province for the uncollected provincial share in basic Real Property Tax (RPT) and Special Education Tax (SET) and the reported amounts by the component municipalities still do not reconcile by P7.758 million;

Fund Transfers in CY 2016 to municipalities and barangays of Guimaras intended for a specific purpose amounting P14.794 million were not yet liquidated;

Non-inclusion in the RPCPPE of those items under 18 accounts valued in the books at P350.807 million and unreconciled discrepancy of P570,092,114.32 between the accounting and property records; and,

Financial Expenditures amounting to P3.818 million were not recorded to the appropriate accounts.

Municipalities:


Unreconciled PPE accounts with a difference of P2,692,112.04, unliquidated cash advances amounting to P1,166,449.20, and unreconciled reciprocal accounts with a difference of P861,932.77.

Jordan Qualified/ Modified

Unreconciled PPE accounts between the financial statements and the Report on Physical Count of PPE with a difference of P46,114,327.67;

Non-provision of depreciation expenses estimated at P3,290,938.20 for properties totaling P48,965,152.93;

Non-disposal of unserviceable Property, Plant and Equipment with total cost of P993,322.20; and,

unreconciled reciprocal accounts (Due From/To LGUs) between the Municipal Government and Provincial Government with a variance of P1,867,019.36.

Nueva Valencia Qualified/ Modified

Uunreconciled PPE accounts between the financial statements and the Report on Physical Count of PPE with a difference of P59,352,481.23;

Non-provision of depreciation expenses estimated at P4,537,384.32 to properties amounting to P70,550,879.76;

Construction-In-Progress (CIP) account balances totaling P43,708,828.97 which were not transferred to their appropriate Asset and Infrastructure Asset (IA) accounts;

Unreconciled reciprocal accounts (Due From/To LGUs) between the Municipal Government and Provincial Government with a variance of P1,192.369.14;

Dormant accounts totaling P2,499,133.45; and,

Unliquidated cash advances totaling P1,819,404.31.

San Lorenzo Qualified/ Modified

Unreliable reported PPE balances totaling P65,870,912.42 due to non-submission of RPCPPE;

Understated Construction in Progress – Infrastructure Asset account amounting to P5,565,698.80;

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Non-provision of depreciation expense estimated at P99,112.46 for properties totaling P3,079,865.00;

Unreconciled reciprocal accounts (Due From/To LGUs) between the Municipal Government and the Provincial Government with a variance of P1,413,059.83; and,

Unliquidated cash advances amounting to P1,199,416.78.

Sibunag Qualified/ Modified

Unreconciled PPE accounts between the financial statements and the Report on Physical Count of PPE with a difference of P9,990,772.66;

Non-provision of depreciation estimated at P752,873.59 for properties totaling P19,758,716.08;

Unreconciled Due to LGUs with the recorded receivables of the Province resulting to a difference of P 5,680,156.10; and,

Unliquidated cash advances granted in CY 2011 and earlier amounting to P218,149.45 and in CY 2012 to 2017 in the amount of P315,129.24, or totaling P533,278.69.

Iloilo Qualified/ Modified

Program error and non-updating by the personnel in-charge of corrections in the property records, resulted in continuous discrepancies totaling P104,279,985.19 between the Report on the Physical Count of Property, Plant and Equipment and Accounting Ledger, casting doubt on the reliability, validity and existence of Property, Plant and Equipment balances;

Subsidiary Ledger (SL) balances of various accounts as of December 31, 2017 totaling P211,230,014.23 remain unreconciled, unidentified, and non-moving/dormant casting doubts over management assertions on existence/occurrence, valuation and rights and obligations, rendering the concerned accounts and the overall Financial Reports of the Iloilo Provincial Government unreliable;

Drugs and Medicines and Medical, Dental and Laboratory Supplies totaling P99,301,318.26 and P51,264,217.56, respectively were not credited upon actual issuances/releases made by the Provincial Hospital Management Office to the 12 District Hospitals of the Province of Iloilo contrary to the matching principle of accounting, overstating the balances of these accounts and the net income and understating expenses, thereby contradicting the management assertion on existence;

The Provincial Engineering Office has not submitted Monthly Fuel Consumption Reports and supporting Requisition and Issue Vouchers (RIVs) or its equivalent on the withdrawn and utilized fuels for project implementation and other operations thereby inflating the balance of Fuel, Oil and Lubricants to P98,240,217.78, consequently overstating the Fuel, Oil and Lubricant Accounts and understating the Work in Progress and Expense Accounts;

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Agricultural and Marine Supplies issued and used by the Provincial Agriculture Office were not timely recognized, rendering the balance of this account of P24,266,559.55 overstated and understating the corresponding expense account;

The General Service Office did not account and furnish copies of the RIS for all issuances of office supplies and other supplies and materials, thus expenses were not duly recognized thereby overstating the balances of Office Supplies Inventory of P33,121,828.72 and Other Supplies and Materials Inventory of P45,422,746.88;

The General Service Office did not account and furnish copies of the RIS for all issuances of office supplies and other supplies and materials, thus expenses were not duly recognized thereby overstating the balances of Office Supplies Inventory of P33,121,828.72 and Other Supplies and Materials Inventory of P45,422,746.88;

Loans extended to various cooperatives with receivables ending balance of P43,537,934.22 as of December 31, 2017 remain unreconciled, casting doubts on the reliability of the account balance; while interest income earned therein were not properly accounted due to the failure of the Provincial Treasurer’s Office-Bayad Center to breakdown the payments for Principal, Interest and Penalties/Surcharges, thus interest income, penalties/surcharges and loans receivable are understated;

Reconciling items from year 1982 to 2016 totaling P6,694,888.34, reflected in the Monthly Bank Reconciliation Statements (BRS), remain unadjusted while that in year 2017 totaling P15,652,652.48 are not timely adjusted due to the delayed preparation of the BRS, rendering the accuracy and reliability of Cash in Bank balances doubtful; and,

Cash in Bank-Local Currency Savings Account with a ledger balance of P370,701.10 does not exist, rendering the balance of Cash in Bank overstated.

Cities:

Iloilo City Qualified/ Modified

Unidentified Property, Plant and Equipment accounts in the amount of P803,672,251.60;

Dormant Construction in Progress accounts since CY 2006 amounting to P80,486,843.65;

Unbooked reconciling items in the Cash in Bank account amounting to P59,792,108.97;

Unreconciled intra-agency receivables and payables amounting to P13,783,846.82;

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Unliquidated cash advances totaling P8,784,142.57 composed of cash advances from CY 2012 to CY 2017 of P8,309,534.77 and CY 2011 and prior years of P474,607.80;

Unpresented PPE with a total value of P4,090,378.00; and,

Abnormal balances in several subsidiary ledgers supporting the Due to BIR account totaling P1,747,530.77.

Passi City Qualified/ Modified

Doubtful existence of property, plant and equipment totaling P1,172,712,796.21, thus resulted to unreconciled and unaccounted PPEs as of December 31, 2017; and,

The agency failed to establish the property tax receivables for the years 1999 to 2017 contrary to concerned regulations.

Municipalities:

Ajuy Qualified/ Modified

The reported net balances of Property Plant and Equipment (PPE) accounts as of December 31, 2017 amounting to P67,200,405.11 are doubtful because the Municipal Officials/Personnel responsible did not

a) conduct physical inventory and prepare the Report on the Physical Count of PPE and Property, Plant and Equipment Ledger Cards, hindering the reconciliation of balances between the Accounting and General Services Office;

b) record depreciation on PPEs; advances which might have been actually incurred but were not reported due to non-submission of liquidation reports, and exposing the funds to risk of misapplication.

c) dispose unserviceable properties; and,

d) insure and register various vehicles, thus the accuracy, completeness, existence and legal rights on the PPE cannot be ascertained;

Cash Local Treasury amounting to P3,875,615.49 remained undeposited as of December 31, 2017, thus exposed government funds to possible loss or misapplication and rendered the existence and correctness of the account doubtful;

Cash advances totaling P280,685.39 representing Advances to Officers and Employees remained unliquidated as of year-end, thereby overstating the asset account and understating the concerned expense accounts for cash.

Alimodian Qualified/ Modified

Doubtful balance of Cash in Bank- Local Currency, Current Accounts totaling P24,679,226.22 owing to non-submission of Bank Reconciliation Statements;

Effects of the failure to conduct physical inventory of all its property and non-submission of the Report thereon for assets valued at P176,072,413.15 as of year-end; and,

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Effects due to non-submission of disbursement vouchers amounting to P33,843,718.27.

Anilao Qualified/

Modified Correctness and existence of the reported balance of the

Property Plant and Equipment accounts amounting to P117,499,384.27 could not be ascertained for the Municipality has not conducted a complete physical inventory of its properties and submit the Report on the Physical Count of Property, Plant and Equipment to the Auditor;

Cash Local Treasury amounting to P2,875,668.53 remained undeposited as of December 31, 2017, thus exposing government funds to possible loss or misapplication and rendered the existence and correctness of the account doubtful;

Balances of reciprocal accounts, Due from Other Funds and Due to Other Funds under the General Fund, Special Education Fund and Trust Fund, showed a total difference of P8,413,137.80, thereby casting doubt on the correctness of the balances of said accounts;

Bank Reconciliation Statements with the paid checks and original copies of the Debit and Credit Memos are not submitted by the OIC-Municipal Accountant to the Auditor, thus correctness and reliability of the Cash in Bank balances could not be ascertained;

The Municipality has not submitted the Subsidiary Schedule of General Ledger Accounts, hence completeness and reliability of the submitted reports are not assured; Disbursement vouchers/payrolls, liquidations and supporting documents covering the period May to December 2017 and official receipts and deposit slips for November and December 2017 are not submitted for verification, casting doubt on the correctness of the affected accounts in the financial statements.

Badiangan Qualified/

Modified

The municipality failed to conduct physical inventory of PPE.

Balasan Qualified/ Modified

The Municipality submitted an incomplete inventory of the Property, Plant and Equipment (PPE) and did not recognize the Local Road Networks in the books of accounts, hence existence of the PPE cannot be immediately ascertained and may create doubt on the correctness of its balance totaling P78,218,295.99;

Forty-one (41) parcels of land, under the name of the Municipality, with market value of P87,696,420.00 and assessed value of P15,923,770.00 were not recorded in the books of accounts, hence resulted to the understatement of the Land Account; and,

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The OIC-Municipal Accountant recorded various equipment amounting to P60,500.00 as outright expense in the books of accounts, hence understating the PPE and overstating the expense accounts by the same amount.

Banate Qualified/ Modified


a) conduct physical inventory and prepare the Report on the Physical Count 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;

Cash advances amounting to P4,701,132.53 remain outstanding as of December 31, 2017, thereby overstating the asset accounts and understating the concerned expenses accounts for cash advances which might have been actually incurred but were not reported due to non-submission of liquidation reports, and exposing the funds to risk of misapplication; and,

Cash Local Treasury totaling P2,198,535.64 remained undeposited as of December 31, 2017, thus rendered the existence and correctness of the account doubtful and may expose government funds to possible loss or misapplication.

Barotac Nuevo No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Barotac Viejo Qualified/ Modified


a) conduct physical inventory and prepare the Report on the Physical Count 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;

Cash advances amounting to P40,211,014.72 remained unliquidated/ unsettled as of year-end, thus may overstate the asset and government equity accounts and understate the concerned expense accounts for cash advances which might have been actually incurred but were not reported due to non-submission of liquidation reports;

Cash Local Treasury amounting to P10,251,553.97 remained undeposited as of December 31, 2017, thus rendered the existence and correctness of the account doubtful and may expose government funds to possible loss or misapplication;

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The Municipality was not able to submit the Disbursement Vouchers and its supporting documents amounting to P34,083,485.70 and the Monthly Bank Reconciliation Statements to the Office of the Auditor within the prescribed period, hence propriety and validity of transactions could not be ascertained.

Batad Qualified/ Modified

Property, Plant and Equipment account balances as of December 31, 2017 totaling P58,488,296.85 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 of Land valued at P7,056,687.91 is not ascertained due to lack of property records, subsidiary ledger and Torrens Title, thus making these assets susceptible to possible claim of third parties and may affect the reliability and propriety of the Land Account balance.

Bingawan Qualified/ Modified

There is a risk that the balance of Property, Plant and Equipment accounts valued in the books at P115,939,051.74 are not fairly presented in the financial statements as of December 31, 2017 since the account was not reconciled with general services records and the Report on Physical Count of Property, Plant and Equipment (RPCPPE) for the year was not submitted for verification thus created doubt on the correctness of PPE accounts and the existence of these assets.

Cabatuan Qualified/ Modified

Failure to properly identify all the properties reported in the Report on Physical Count of Property, Plant and Equipment, non-transfer of Construction in Progress account balance to the corresponding asset account and non-preparation of adjusting entry for stale checks that remained outstanding.

Calinog Qualified/ Modified

Due to the effects of the failure of the agency to conduct physical count of its Property, Plant and Equipment valued at P229,046,488.38 which caused the non-submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE), non-maintenance of property cards and ledger cards and non-reconciliation of its fixed assets accounts with that of the accounting records contrary to concerned regulations.

Carles Qualified/ Modified

The Municipality has not submitted to the Office of the Auditor the Report on the physical inventory of Property, Plant and Equipment (PPE) as of December 31, 2017 and has not established/maintained PPE Ledger Cards and Property Cards, thus may render the accuracy and existence of the PPE accounts totaling P211,054,611.28 doubtful;

The OIC-Municipal Accountant recorded materials and labor for the installation/construction of assets amounting to P542,027.00 as outright expenses in the books of accounts, hence understating the PPE and overstating the expense accounts by the same amount; Items for adjustments as additions in the Cash in Bank–LCCA amounting to

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P150,872.15 were not taken up promptly in the books of accounts, resulting in the discrepancy of cash balances between the books of accounts and the bank;

Cash in Local Treasury amounting to P4,571,738.06 remained undeposited as of December 31, 2017, hence exposing government funds to possible loss or misapplication and rendered the existence and correctness of the account doubtful; and,

Cash advances totaling P1,904,844.48 were not fully liquidated at the end of each year and within the period prescribed, thus overstating the asset account and understating 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 exposing the funds to risk of misapplication.

Concepcion Qualified/ Modified

Complete actual physical count and reconciliation of Inventory Report of Property, Plant and Equipment were not complied by the Municipality, thus validity, correctness and existence of the reported balance amounting to P86,545,372.37 in the Financial Statements remain doubtful;

Correctness and existence of Cash Local Treasury amounting to P5,081,887.44 as of December 31, 2017 is doubtful due to the non-deposit of collections regularly and intact, and failure of the previous Municipal Treasurer to settle her accountability;

Cash advances amounting to P2,064,398.35 remained outstanding as of December 31, 2017, thereby overstating the asset account and understating the concerned expense accounts for cash advances which might have been actually incurred but were not reported due to non-submission of liquidation reports, and exposing the funds to risk of misapplication; and,

Correctness of Land valued at P966,963.74 is not ascertained due to lack of property records, subsidiary ledger and Torrens Title, thus making these assets susceptible to possible claim of third parties and may affect the reliability and propriety of the Land Account balance; and a difference of P4,086,776.26 between the books of the agency and the records in the Assessor’s Office affects the accuracy and validity of the Land Account in the Financial Statement.

Dingle Qualified/ Modified

Reconciliation of newly-acquired Property, Plant and Equipment (PPE) accounts amounting to P58,649,885.73 for CY 2017 could not be effected due to the delayed updating and submission of the Property, Plant and Equipment Ledger Card (PPELC) for the current year and the non-conduct of physical count of these new assets, contrary to Sections 4, 114 and 124 of the Manual on the New Government Accounting System (NGAS) for LGUs, Volume I, thus, posing a risk that the said amount of PPE may not be fairly presented in the financial statements at year-end; and,

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Accuracy of the Due to NGAs account amounting to P40,223,910.52 as of year-end, could not be ascertained due to non-transfer of the completed projects/assets to the general fund amounting to P9,744,280.80, contrary to Section 104, Chapter 5 of the NGAS for LGUs, Volume I, thus impairing the fair presentation of the account in the financial statements at year-end.

Dueñas Qualified/

Modified The absence of clear policies to reinforce, supervise and

monitor the previously created Inventory Committee or the non-creation of a new one resulted in the non-conduct of physical inventory of Property, Plant and Equipment (PPE) accounts amounting to P107,929,825.37 as of December 31, 2017 and non-reconciliation thereof, contrary to Sections 4, 114 and 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume 1, thus, there is a risk that the PPE accounts may not be fairly presented in the financial statements at year-end;

The correctness of the depreciation accounts were doubtful

due to the non-recording of adjusting entries for depreciation of some PPE accounts amounting to P73,504,892.68 as of December 31, 2017, contrary to Section 4 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume 1, COA Circular No. 2004-005 dated August 9, 2004 and COA Circular No. 2003-007 dated December 11, 2003 thereby, overstating the assets and government equity accounts;

The Cash in Bank-Local Currency Current Account

amounting to P99,483,938.96 as of December 31, 2017 could not be ascertained due to delayed submission of bank reconciliation statements and the existence of uncorrected/unadjusted reconciling items amounting to P1,143,113.47 which includes unverified credit and debit memos, thus impairing the fair presentation of the account in the financial statements; and,

Accuracy of the Due to NGAs and Due to LGUs accounts

amounting to P17,624,092.35 and P14,793,758.99 as of year-end, respectively, could not be ascertained due to certain deficiencies noted in the subsidiary ledgers thus affecting the fair presentation of these accounts in the financial statements.

Dumangas Qualified/

Modified Correctness and existence of the reported balance of the

Property Plant and Equipment accounts amounting to P247,077,467.81 could not be ascertained for 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;

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The Cash Local Treasury amounting to P3,039,264.43 remained undeposited as of December 31, 2017, thus exposing government funds to possible loss or misapplication and rendered the existence and correctness of the account doubtful;

Cash advances amounting to P4,459,868.84 remained outstanding as of December 31, 2017 thereby overstating the asset account and understating the concerned expense accounts for cash advances which might have been actually incurred but were not reported due to non-submission of liquidation reports, and exposing the funds to risk of misapplication;

Bank Reconciliation Statements with the paid checks and original copies of the Debit and Credit Memos are not submitted by the Municipal Accountant to the Auditor, thus correctness and reliability of the Cash in Bank balances could not be ascertained;

Balances of reciprocal accounts, Due from Other Funds and Due to Other Funds under the General Fund, Special Education Fund and Trust Fund, showed a total difference of P713,853.53, thereby casting doubt on the correctness of the balances of said accounts; and,

Disbursement vouchers/payrolls, liquidations and supporting documents covering the period October to December 2017 and official receipts and deposit slips for Calendar Year 2017 are not submitted for verification, casting doubt on the correctness of the affected accounts in the financial statements.

Estancia Qualified/ Modified

The Municipality submitted an incomplete inventory of the Property, Plant and Equipment (PPE) and Property Cards have not been prepared and maintained by the General Services Office, hence existence of the PPE amounting to P57,383,724.20 cannot be immediately ascertained;

Donated motor vehicle and disposed unserviceable properties were not recorded as addition/deductions to the books of accounts, hence may affect the correctness of the recorded PPE accounts;

The Municipality has not established Real Property Tax/Special Education Tax Receivables and the corresponding Deferred RPT/SET Income for the last three years, hence creates doubts on the accuracy of the booked RPT/SET and Deferred RPT/SET Income and may result to misstatements of such accounts;

The OIC-Municipal Accountant recorded materials and labor for the construction/ improvement of assets totaling P276,936.00 and municipal aid amounting to P1,080,000.00 as outright expenses in the books of accounts, hence understating the PPE and Due from LGUs accounts and overstating the expense accounts by the same amount; and,

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Items for adjustments as additions and deductions in the Cash in Bank–LCCA amounting to P2,975,155.66 and P3,268.09, respectively, were not taken up promptly in the books of accounts resulting in the discrepancy of cash balances between the books of accounts and the bank.

Guimbal Qualified/ Modified

The balance of the account Cash in Bank – Local Currency Current Account as of year-end was not adjusted to reflect all valid reconciling items that require adjustment and correction noted in the Bank Reconciliation Statement (BRS) contrary to Section 74 of Presidential Decree No. 1445 and COA Circular No. 96-011, dated October 2, 1996.

Igbaras Qualified/ Modified

Non-submission of the Report on the Physical Count of Property, Plant, and Equipment (RPCPPE) and to reconcile the same with the accounting records; and,

Real Property/ Special Education Tax Receivable and the corresponding Deferred RPT/SET receivables were not set up at the beginning of the year.

Janiuay Qualified/ Modified

Non-reconciliation of RPCPPE and PPELC

Lambunao Qualified/ Modified

No RPCPPE submitted and reconciliation of acctg and property records

Leganes Qualified/ Modified

The submitted Report of Physical Count of Property, Plant and Equipment (RPCPPE) was not in accordance with the prescribed format and did not include all the necessary information, hence it could not be assured that PPE has been completely and properly accounted for. As a consequence, the fairness of presentation of the account Property, Plant and Equipment amounting to P 104,784,633.46 as of December 31, 2017 could not be verified;

The municipality submitted Monthly Bank Reconciliation Statements for only four bank accounts out of the eight accounts it is maintaining. Reconciling items in the Bank Reconciliation Statement are also not being adjusted/accounted. Thus, there is a risk that the account Cash and Cash Equivalent amounting to P 82,952,220 as of December 31, 2017 may not be fairly presented; and,

Fishpond for rental, otherwise known as “Punong Banwa”, of the municipality was not taken up as Investment Property in the books of account, thus resulting to the understatement of the municipality’s total assets in as much as the value of the property as of December 31, 2017.

Lemery Qualified/ Modified

The correctness and existence of the Property, Plant and Equipment amounting to P66,367,785.16 as of December 31, 2017 could not be ascertained because the Municipality did not conduct a complete physical inventory of all its properties, nor prepared the inventory report;

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Cash advances amounting to P3,234,258.80 remained outstanding as of December 31, 2017, thereby overstating the asset account and understating the concerned expense accounts and exposing the funds to risk of misapplication;

Disbursement vouchers and supporting documents

amounting to P463,787.01 for CY 2017 were not submitted, hence propriety and validity of transactions could not be ascertained; and,

Monthly Bank Reconciliation Statements with the original

copies of the Bank Statements, cancelled and paid checks, Bank Debit and Credit memos were not submitted within the reglementary period by the Municipal Accountant to the Auditor, thus correctness and reliability of the Cash in Bank balances amounting to P132,822,674.21 as of December 31, 2017 could not be ascertained.

Leon Qualified/

Modified Effects of the continued inability of the agency to create

inventory committee to conduct of physical inventory of all its PPE and non-submission of the reports for assets valued at P195,332,950.93 as of year-end.

Maasin Qualified/

Modified Due to the difficulty in ascertaining the correctness of the

Property, Plant and Equipment (PPE) account balances totaling P74,887,324.37 caused by the failure of the agency to submit complete physical inventory report, non-reconciliation of the actual physical count with Accounting and Property records.

Miag-ao Qualified/

Modified The municipality was not able to conduct physical inventory

of its Property, Plant and Equipment (PPE), and prepare and submit a report thereon;

It also does not maintain the required ledger cards for its

PPEs, as a consequence, the fairness of presentation of the account Property, Plant and Equipment amounting to P 192,436,386.62 as of December 31, 2017 could not be verified;

The account Cash in Bank, Local Currency Current Account

amounting to P 199,162,398.84 as of December 31, 2017 were not completely supported by Bank Reconciliation Statements hence, there is a risk the account may not be fairly presented in the financial statements; and,

The treasury and accounting books do not reconcile as of

December 31, 2017 thus, fairness of presentation of the account Cash in Local Treasury amounting to P 5,107,862.78 could not be ascertained;

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LGU AUDIT


Mina Qualified/ Modified

The absence of clear policies to reinforce, supervise and monitor the office in-charge of physical inventory taking of Property, Plant and Equipment (PPE) or the non-creation of an Inventory Committee resulted in the non-conduct of physical count of PPE with accounts valued in the books at P226,289,053.87 as of December 31, 2017 and non-reconciliation thereof, contrary to Sections 4, 114 and 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume 1, thus, there is a risk that the PPE accounts may not be fairly presented in the financial statements at year-end;

Partial and delayed submission of Bank Reconciliation Statements (BRS) were made contrary to Section 74 of PD No. 1445 and Sections 3.2 and 3.4 of COA Circular No. 96-011, thus, precluded the Auditor to ascertain the Cash in Bank-Local Currency, Current Account with a consolidated book balance of P83,196,375.94 at year-end and may not be fairly presented in the financial statements; and,

Accuracy of the Due to NGAs and Due to LGUs accounts amounting to P50,752,395.33 and P20,456,227.18 as of year-end, respectively, could not be ascertained due to certain deficiencies noted in the subsidiary ledgers thus affecting the fair presentation of the accounts in the financial statements.

New Lucena Qualified/ Modified

No RPCPPE submitted and reconciliation of acctg and property records.

Oton Qualified/ Modified

Incomplete physical inventory on all of the municipality’s properties, thus accuracy, existence and ownership of the Property, Plant and Equipment (PPE) account balances totaling P271,556,226.02 could not be ascertained;

Cost of donated three motor vehicles remained unrecorded in the books due to lacking supporting documents resulting in an understatement of Government Equity and PPE accounts, thus creating risk that these accounts may not be fairly presented in the financial statements; and,

Reconciling items reflected in the Monthly Bank Reconciliation Statements (BRS) amounting to P112,122.87 remained unadjusted/uncorrected hence, causing doubt on the reliability and accuracy of the said account.

Pavia Qualified/ Modified

Due to the effects of the failure of the LGU 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 P164,939,930.18 at year-end with its actual physical count, contrary to Section 124 of the Manual on the New Government Accounting System (MNGAS) for LGUs, Volume I. and,

Real Property/Special Education Tax Receivables were not set up at the beginning of the year contrary to Section 20 of the Manual on New Government Accounting System (NGAS) Volume 1.

274

LGU AUDIT


Pototan Qualified/ Modified

Due to the effects of the partial conduct actual count/inventory of the agency’s Property, Plant and Equipment as of December 31, 2017 and non-reconciliation thereof, contrary to Sections 4, 114 and 124 of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs), Volume 1, thus, there is a risk that the PPE accounts totaling P186,781,789.44 may not be fairly presented in the financial statements at year-end.

San Dionisio Qualified/ Modified

Correctness and existence of Cash Local Treasury amounting to P22,959,177.71 as of December 31, 2017 are doubtful due to:

a) non-deposit of collections regularly and intact;

b) unreconciled balance of the Cashbook and General Ledger,

c) non-submission of Reports of Accountability for Accountable Forms; and,

d) failure of the absconded Municipal Treasurer to account for her collections;

Dormant receivables and mandatory trust liabilities in the amount of P850,085.96 and P456,908.39, respectively, were carried over in the books despite the absence of pertinent documents to support the validity of the recorded balances, thus casting doubt as to the fairness of presentation of the Financial Statement;

Property, Plant and Equipment account balances as of December 31, 2017 totaling P108,936,160.30 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;

Depreciation was not provided on some Property, Plant and Equipment accounts of the Municipality with a carrying value of P8,987,653.81, thus resulted to the overstatement of assets and understatement of expenses in the Financial Statements;

Correctness of Land valued at P2,382,182.15 is not ascertained due to lack of property records, subsidiary ledger and Torrens Title, thus making these assets susceptible to possible claim of third parties and may affect the reliability and propriety of the Land Account balance; and a difference of P42,732,517.85 between the books of the agency and the records in the Assessor’s Office affects the accuracy and validity of the Land Account in the Financial Statement; and,

Cash advances amounting to P4,453,385.11 remained outstanding as of December 31, 2017, thereby overstating the asset account and understating the concerned expense accounts for cash advances which might have been actually incurred but were not reported due to non-submission of liquidation reports, and exposing the funds to risk of misapplication.

275

LGU AUDIT


San Enrique Qualified/ Modified

The existence of property, plant and equipment totaling P23,431,315.50 was doubtful, thus resulted to unreconciled and unaccounted PPEs as of December 31, 2017, contrary to Sections 123 and 124 of Presidential Decree No. 1445.

San Joaquin Qualified/ Modified

Incomplete submission of bank reconciliation statements contrary to COA Circular No. 96-011 dated October 2, 1996 hence, Cash in Bank – Local Currency, Current Account balance of P322,972,111.48 as of year-end cannot be established.

San Miguel Qualified/ Modified

Due to the effects of the continued inability of the agency to create inventory committee to conduct of physical inventory of all its PPE and non-submission of the reports for assets valued at P123,727,842.65 as of year-end; and,

Non-submission of the Bank Reconciliation Statements to show monthly reconciliation between the balance per bank and balance fund in the books were made in the total amount of P140,439,218.99.

San Rafael Qualified/ Modified

The correctness and existence of the Property, Plant and Equipment amounting to P87,366,005.55 as of December 31, 2017 could not be ascertained because the Municipality did not conduct physical inventory of all its properties, nor prepared the inventory report;

Cash Local Treasury amounting to P23,081,750.41 remained undeposited as of December 31, 2017, thus exposing government funds to possible loss or misapplication;

The balance of Loans Payable – Domestic account of P11,799,932.00 as of December 31, 2017 under the liabilities section in the Statement of Financial Position did not reconcile with the total confirmed balance of P14,425,802.00, resulting to a net variance of P2,625,870.00, thus affecting the reliability and fairness of the amount of liabilities and expenses presented in the financial statements;

Cash advances amounting to P13,499,810.75 remained unliquidated as of December 31, 2017, thereby overstating the asset account and understating the concerned expense accounts and exposing the funds to risk of misapplication;

Monthly Bank Reconciliation Statements with the original copies of the Bank Statements, cancelled and paid checks, Bank Debit and Credit memos were not submitted within the reglementary period by the Municipal Accountant-Designate to the Auditor, thus correctness and reliability of the Cash in Bank balance amounting to P77,181,347.23 could not be ascertained; and,

The Disbursement Vouchers and supporting documents amounting to P4,735,559.93 for CY 2017 were not submitted, hence propriety and validity of transactions could not be ascertained.

276

LGU AUDIT


Santa Barbara Qualified/ Modified

No RPCPPE submitted and reconciliation of acctg and property records.

Sara Qualified/ Modified

The correctness and existence of the Property, Plant and Equipment amounting to P148,242,582.83 as of December 31, 2017 could not be ascertained because the Municipality did not conduct a complete physical inventory of all its properties, nor prepared the inventory report.

Tigbauan Qualified/ Modified

Incomplete physical inventory on all of the municipality’s properties, thus accuracy, existence and ownership of the Property, Plant and Equipment (PPE) account balances totaling P155,705,637.15 could not be ascertained;

Depreciation expenses were not taken up for the properties of the municipality totaling P143,550,940.92, thus the net book value of the assets cannot be established and there is a risk that the affected accounts are not fairly presented in the financial statements;

Donated Ambulance unit from Philippine Charity Sweepstakes Office (PCSO) amounting to P858,000.00 was not recorded in the books of the municipality resulting in an understatement of Government Equity and PPE accounts and there is a risk that these accounts are not fairly presented in the financial statements;

Reconciling items reflected in the Monthly Bank Reconciliation Statements (BRS) amounting to P128,006.08 remained unadjusted/uncorrected hence, overstating the Cash in Bank account and causing doubt on the reliability and accuracy of the said account; and,

Fund transfer to Tigbauan National High School amounting to P501,500.00 was not supported with Memorandum of Agreement (MOA) and not recognized as Due from NGAs hence, understating the receivable accounts.

Tubungan Qualified/ Modified

Inclusion of unserviceable and non-existing properties totaling P2,611,673.35 and P2,371,391.39, respectively, hence there is a risk that these accounts may not be fairly presented in the financial statements and resulted to overstatement of PPE accounts;

Donated Ambulance unit from Philippine Charity Sweepstakes Office (PCSO) remained unrecorded in the books since the municipality did not secure the donation papers thereof resulting in an understatement of Government Equity and PPE accounts and there is a risk that these accounts may not be fairly presented in the financial statements;

Financial loans extended to market vendors in the municipality under the Micro-Finance Program amounting to P73,493.84 were taken up as Due to LGUs in the Trust Fund instead of Loans Receivable–Others hence, understating the receivable accounts and there is a risk that these accounts may not be fairly presented in the financial statements;

277

LGU AUDIT


The acquisition cost and the amount collected from selling NFA rice were recorded as Due to Local Government Units instead of Trust Liabilities – Disaster Risk Reduction and Management Fund, thus there is a risk that these accounts may not be fairly presented in the financial statements; and,

Fund transfer to other Local Government Units (LGU)

amounting to P300,000.00 was not supported with Memorandum of Agreement (MOA) and not recognized as Due from LGUs hence, understating the receivable accounts.

Zarraga Qualified/

Modified No RPCPPE submitted and reconciliation of acctounting and

property records.

Region VII-Central Visayas

Bohol Qualified/ Modified

Cash-Local Treasury account (10101010) with a balance of P239,799.86 as of December 31, 2017 disclosed abnormal negative balances in its Subsidiary Ledgers (SLs) totaling (P839,154.84), contrary to Section 111 of Presidential Decree No. 1445 thus, presenting misleading figures affecting the accuracy of the year-end financial statements;

Additional investment of P3,385,783.62 to Bohol Coopreneurs Credit Surety Fund (BCCSF) and dividend income earned totaling P219,377.76 were not taken up in the books contrary to Section 112 of P.D. 1445 resulted in the understatement of Assets and Income accounts, thus, affecting the accuracy of the year-end Financial Statements;

The validity of accounts payable booked-up at year-end of P182,068,988.76 cannot be ascertained and verified due to the failure of the Provincial Accounting Office to submit the pertinent Journal Entry Vouchers and its supporting documents, contrary to Section 6 of COA Circular No. 95-006 thus, unreliable;

The account Prior Period Adjustment of P130,536,469.24 is doubtful due to improper/erroneous charges of prior years’ unobligated expenditures in violation of Section 111(2) of PD 1445, thus resulted in the misstatement of financial statement for the reporting period;

Failure to drop from the books six (6) closed depository accounts with balances totaling P58,447.05, including service charges of P19,761.47, rendered the Cash in Bank balance inaccurate; and,

Payments of P4,449,337.27 for prior years' obligations without prior entry Payable account resulted in abnormal subsidiary ledger balances totaling (P1,986,041.81), rendered the Accounts Payable balances doubtful thus, distorting the presentation of financial statements

278

LGU AUDIT


City:

Tagbilaran City A total of 601 parcels of land with a total area of 568,128.16, more or less, registered under the name of the City Government of Tagbilaran, are not recorded in the books, thus, Section 72 of the New Government Accounting System (NGAS) Manual for LGUs was not complied and materially understating the land account as of December 31, 2017;

Of the 192 parcels of land listed in the Inventory of Plant Assets as of December 31, 2017, at least 27 are not registered under the Torrens Title System, while 54 have no owner's duplicate of OCT/TCT, in violation of COA Circular No. 92-386, doubting its ownership and the correctness of the reported year-end balance of Land account;

Comparison of the Property, Plant and Equipment (PPE) accounts per Trial Balance with the Inventory Reports as of December 31, 2017 showed a variance of P108,516,024.97 rendering doubtful the correctness of the amount of reported PPE as of the year end;

Accrued interest income on special/high yield savings/time deposits accounts as of December 31, 2017 amounting to P672,056.19 was not recognized and remained unrecorded, thereby understating both the Receivable and Income accounts thus, not in accordance with the matching principle of the Philippine Public Sector Accounting Standards (PPSAS); and,

The City had outstanding receivables amounting to P25,756,604.24 which had been dormant for years casting doubt on its validity and collectability which may result to inaccurate financial reports.

Municipalities:

Alburquerque Qualified/ Modified

The balances of Property, Plant and Equipment (PPE) as of December 31, 2017 are different from that of the Inventory Report with a difference of P9,859,888.35, thus, casting doubt on the accuracy in the presentation of the accounts; and,

The Depreciation Expense amounting to P2,256,505.26 could not be validated as to accuracy and correctness due to partial submission of Report of Physical Count of Property, Plant and Equipment (RCPPE).

Alicia Qualified/ Modified

Existence and completeness of the Property, Plant and Equipment with total cost of P158,903,965.93 can not be ascertained due to a) absence of property records and ledger cards and b) the failure to conduct a complete physical inventory and reconcile the results with the recorded balances;

279

LGU AUDIT


Infrastructure Projects totaling P9,070,195.39 funded by the Bohol Earthquake Assistance (BEA) fund remained in the Trust Fund despite submission of liquidation reports, thereby overstating the Due to LGUs account and understating the Government Equity;

Despite submission of full liquidation to the source agencies, the Due to NGAs account amounting to P5,663,897.77 were not closed against the cost of the completed projects in the Trust Fund, thereby overstating the liability and understating the government equity of the municipality; and,

The accounts Due to GSIS, Due to Pag-ibig and Due to Philhealth under the Trust Fund has a total outstanding balance of P171,096.52 which represented prior years’ amounts that were not remitted to the concerned agency, thus casting doubt on the existence of the accounts.

Anda Qualified/ Modified

The amounts reflected in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) do not match those reported in the financial statements of the municipality for CY 2016 casting doubt as to the existence, validity and correctness of the Property, Plant and Equipment account balances amounting to P69,930,856.54 at the end of the year 2017; and,

Outstanding checks in the Bank Reconciliation Statements include stale checks amounting to P195,465.09 resulting in an unreliable presentation of the Cash in Bank-Local Currency, Current Account in the financial statements at the end of the year 2017.

Antequera Qualified/ Modified

Property, Plant and Equipment with an aggregate amount of P6,971,980.73 were erroneously classified contrary to COA Circular No. 2015-009 dated December 1, 2015;

Memorandum of Agreement entered into between the Municipal and Barangay Government was not required for the transfer of fund for developmental projects amounting to P3,197,959.00 contrary to COA Circular No. 94-013, thus the assistance remained unliquidated at year-end overstating the receivable of the municipality;

Undocumented obligations in the General Fund and Special Education Fund amounting to P2,853,580.82 and P47,354.00, respectively, may not represent valid claims against the municipality as of December 31, 2017 resulting to misstatement of the liability in the financial statement;

Retention money totaling P1,810,709.58 was not recorded in the books resulting to understatement of both asset and liability accounts;

Failure to conduct the annual physical inventory of Property, Plant and Equipment (PPE) totaling P161,086,054.46, in violation of Section 124 of the Manual of New Government Accounting System for LGUs, resulted in the doubtful existence, validity and correctness of the recorded account balances; and

280

LGU AUDIT


Two (2) units of ambulance donated by the PCSO were not yet recorded in the books of accounts of the municipality thereby understating the Motor Vehicles and Depreciation accounts.

Baclayon Qualified/

Modified Property, Plant and Equipment (PPE), net of accumulated

depreciation, amounting to P32,078,054.24 in CY 2017 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,

The Depreciation Expense amounting to P2,850,088.56 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/

Modified The demolished municipal building net book value included in

the Total Buildings account of P8,206,730.62 is still carried in the books of accounts because the procedures in the proper disposal of the demolished building prescribed under COA Circular No. 92-386 dated October 20, 1992 has not been undertaken yet by management resulting in the overstatement of the Property, Plant and Equipment and Government Equity Account;

Unexpended/Unobligated balances of Local Disaster Risk

Reduction and Management Fund (LDRRMF) totaling P3,086,813.07 was not transferred to the Special Trust Fund books as stated in Section 5.1.10 of COA Circular No. 2012-002;

Reciprocal Accounts Due from Other Funds and Due to

Other Funds have unsettled/unadjusted difference of P1,158,171.68, casting doubt on the accuracy of the asset and liability accounts;

Various Accounts totaling P357,340.10 which remained

dormant in the books for unknown period were not acted upon, to which the proper write-off thereof could not be facilitated, resulting in the overstatement of agency assets and liabilities; and,

Real Property Tax and Special Education Tax Receivables

for the CY 2017 both amounting to P2,224,911.20 which were based on the Municipal Assessor’s records instead of the duly certified list of taxpayers from the Municipal Treasurer were set up at the end of the year instead of at the beginning of the year as required under Section 20, Volume I, of the New Government Accounting System (NGAS) for LGUs. (Finding No. 3, Part II CY 2017 AAR).

281

LGU AUDIT


Batuan Qualified/ Modified

The accuracy of the Government Equity account balance could not be ascertained due to non-liquidation of past due cash advances amounting to P764,210.47 that includes cash advances for travel and other purposes;

Reciprocal accounts Due From Other Funds and Due To Other Funds has unsettled/unadjusted difference of P16,317.68 casting doubt on the accuracy of the asset and liability accounts;

Cash in Bank reconciling items, additions and deductions to book balances amounting to P7,047,162.15 and P1,438,561.59 respectively, were not recorded rendering the accuracy and reliability of the Cash in Bank accounts doubtful;

The balance of the account Due to BIR totaling P635,856.12 is unreliable due to errors in the remittances of these withholding taxes, thus affecting the fairness of the presentation of the account in the financial statements; and,

Total Accounts Payable amounting to P4,302,265.07 represents invalid claims, P438,091.35 of which are long outstanding and P127,850.00 are to be reclassified to Due to LGUs contrary to Sections 4.s, 141 of the New Government Accounting System Manual, Volume I and Section 47 of the Government Accounting and Auditing Manual, Volume III resulting to the overstatement of the liability accounts.

Bien Unido Qualified/ Modified

A total of 314 pieces of Accountable Forms Without Money Value were found unaccounted, thus, accuracy of the balances of Cash on Hand and in Bank of the municipality as of year-end could not be ascertained;

Unserviceable assets totaling P13,221,445.12 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, thus overstating the Property, Plant & Equipment (PPE) as of December 31, 2017; and,

The Municipal Accountant failed to record in their books of accounts COA disallowances totaling P876,048.84 despite the receipt of its corresponding Notice of Finality of Decisions (NFDs) contrary to Section 7.2.1 (d) and Section 22.6 of COA Circular 2009-006, dated September 15, 2009, thereby understating the Receivables-Disallowances/Charges (1-03-06-010) account by the same amount.

Bilar Qualified/ Modified

Existence and correctness of the balances of the Property, Plant and Equipment (PPE) account as of December 31, 2017 amounting to P 91,527,208.77 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, in violation of Section 124 of the NGAS Manual, Volume I.

282

LGU AUDIT



In view of the Municipality’s failure to conduct a complete physical count of its Property, Plant and Equipment of P166,656,507.56, to prepare the results of the physical inventory in the prescribed format of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and to reconcile thebalances of property ledger cardswith the accounting records, rendered the correctness and existence of the recorded assets doubtful.

Calape Qualified/

Modified Accounts Payable aggregating P11,335,094.65 was

overstated by P3,573,650.15 due to erroneous classification and recording of obligations contrary to the New Chart of Accounts under Philippine Public Sector Accounting Standards (PPSAS);

Receivables from Philhealth for the Calape Mother and Child Hospital representing the reimbursement of hospital and professional fees amounting to P4,435,050.00 was not booked up in accordance to Philhealth Circular 2017-0020 that resulted to the understatement of the receivables and income accounts;

Existence of unreconciled balances of Intra-agency accounts Due From Other Funds and Due to Other Funds amounting to negative P1,440,000.00 resulted to doubtful accuracy of recorded transactions under these accounts; and,

Undocumented accounts payable amounting to P900,147.99 remained in the books of account for more than two (2) years contrary to Section 159 of the Government Accounting and Auditing Manual Volume 1, thus, resulted to the overstatement of the liabilities account.

Candijay Qualified/

Modified Cost of completed Public Markets were still recorded under

Construction in Progress overstating this account while understating the appropriate asset account Markets (1 07 04 040) by P29,964,808.50;

Management did not make the necessary adjustments and reconciliation of the book and bank reconciling items amounting to (P 998,263.91) and (P4,894,709.43) respectively causing inaccurate and unreliable Cash in Bank balances recorded at P38,854,622.03 as of December 31, 2017;

Outstanding checks in the Bank Reconciliation Statements include stale checks amounting to P521,734.19 resulting in an unreliable presentation of the Cash in Bank-Local Currency, Current Account (1 01 02 010) in the financial statements at the end of the year 2017; and,

Unserviceable, disposed, damaged and missing/lost

Property, Plant and Equipment (PPE) amounting to P1,697,519.69 were still carried in the books thus, accuracy of the balances in the PPE accounts were doubtful or unreliable.

283

LGU AUDIT


Carmen Qualified/ Modified

No adjusting entries were prepared for the Stale Checks amounting P169,796.61; thereby, misstating the balances of Cash in Bank - Local Currency, Current Account (1-01-02-010) and Accounts Payable (2-01-01-010);

Unliquidated obligations aged 2 years and above under the accounts payable in the General Fund and Special Education Fund totaled P3,577,232.96 may have misstated the liability account if warrants to be reverted back to the unappropriated surplus;

P25M or 11% of the total current assets of the municipality are non-moving accounts which could turn out to be dormant accounts as described in COA Circular 97-001, thus, raising concerns on the reliability of the financial statements;

The negative Cash in Vault balances of a former Municipal Treasurer totaling P1,032,370.44 were reclassified as Other Payables as of December 31, 2017;

Paid disbursement vouchers and its supporting documents of eighteen (18) unrecorded checks in both General and Trust funds books of accounts amounting to P219,908.86 remain missing evident by the failure of the Municipal Treasurer to submit the same to the Accountant resulted to overstatement of the Cash in Bank and the Government Equity accounts;

Cash advances granted to employees totaling P74,090.00 remain outstanding for up to 19 days beyond the period required for cash advance to be liquidated. Moreover, the management failed to collect unliquidated cash advances totaling P668,771.79 from former employees;

Lack of internal control over the maintenance, recording, issuance and disposal of Property, Plant and Equipment resulted in non-reconciliation of records, therefore, the validity, existence and correctness of the recorded Property, Plant and Equipment valued at P256,597,551.68 is doubtful; and,

Other Investments (1-02-05-990) account totaling P1,605,496.22 from previous years remained outstanding in the books as of December 31, 2017.

Catigbian Qualified/ Modified

The correctness, validity and condition of the Property, Plant and Equipment amounting to P 219,737,318.31 were not established due to the failure of the Municipality to conduct physical inventory and reconcile with the accounting records rendered the existence, correctness and propriety of the recorded fixed assets, doubtful;

Non-liquidation of cash advances as soon as the purpose has been served resulted to the accumulation of substantial amount of unliquidated cash advances totaling P278,196.79 contrary to COA Circular No. 97-002 thus, exposing funds to the risk of loss and/or misappropriation;

284

LGU AUDIT


Fund and materials transfers for barangay projects totaling P3,458,025.74 were directly recorded to the related asset account instead of recording as Due from Other LGUs contrary to COA Circular 94-013, and overstated the Construction in Progress and Property, Plant And Equipment (PPE) accounts;

Depreciation in excess of the book value of assets totaling P5,785,425.77 resulted to the understatement of the asset and misstated the expense amounting to negative (P480,008.87) account thus affecting the fair presentation of the financial statements;

Improper recording of interest income in the Trust Fund totaling P883,720.80 resulted to the non-recognition of revenue thus rendering the overstatement of the liabilities misstatement of the financial statements, contrary to the Philippine Public Sector Accounting Standards New Chart of Accounts and Sections 4 (a) of the Manual on New Government Accounting System for Local Government Units; and,

Undocumented accounts payable amounting to P164,924.68 remained in the books of account for more than two (2) years contrary to Section 159 of the Government Accounting and Auditing Manual Volume 1, thus, resulted to the overstatement of the liabilities account.

Clarin Qualified/ Modified

The book balances of the Property, Plant and Equipment account did not tally with the balances appearing in the physical inventory reports submitted resulting in a discrepancy amounting to at least P95,923,560.56.

Corella Qualified/ Modified

The Municipal Accountant failed to prepare and submit the bank reconciliation statements, hence, accuracy and reliability of the Cash in Bank – Local Currency Current Account balance cannot be verified;

Financial Assistance granted to leagues amounting P81,000.00 was directly booked up as Donations contrary to Section 4(2) of Presidential Decree No. 1445 and COA Circular No. 94-013 understating the receivable and overstating the expenses of the municipality which provided the possibility/opportunity for the use of funds other than its intended/specific purpose or private use;

The non-disposal of the unserviceable properties totaling P5,660,536.60 affected the fair presentation of the Property, Plant and Equipment account in the Financial Statement; and,

Management failed to conduct the required physical inventory of its Inventories, Property, Plant and Equipment as prescribed under Section 124 of the Manual on New Government Accounting System (NGAS), Volume I, thus casting doubt on the validity and accuracy of its reported balances in the aggregate amount of P75,931,553.79 as of December 31, 2017.

285

LGU AUDIT


Cortes

Qualified/ Modified

Confirmation of bank balances as of December 31, 2017 and comparison with book balances revealed substantial variances amounting to P1,036,207.84, (P138,005.90) and (P385,729.29) in the General Fund, SEF and TF respectively, casting doubt on the accuracy and existence of the reported consolidated Cash in Bank balances of P94,097,821.27, contrary to Section 3 of PD 1445;

The Municipal Accountant erroneously recorded disallowances which are on appeal and failed to record disallowances which have become final and executory totaling P3,480,000.00 and P216,645.36 respectively contrary to Section 22 of COA Circular 2009-006, thereby a net overstatement of P3,263,354.64 in the Receivable Account and Government Equity Accounts;

Unexpended/Unobligated balances of Local Disaster Risk Reduction and Management Fund (LDRRMF) totaling P2,673,032.44 was not transferred to the Special Trust Fund books as required in Section 5.1.10 of COA Circular No. 2012-002 hence, resulted in the understatement of the Transfer of Unspent LDRRM and Trust Liability - LDRRM of the General Fund and Special Trust Fund, respectively;

Reciprocal Accounts Due From Otfher Funds and Due To Other Funds have unsettled/unadjusted difference of (P203,979.25), casting doubt on the accuracy of the asset and liability accounts;

The non-disposal of the unserviceable properties 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;

Physical inventory taking of Property, Plant and Equipment totaling P 38,221,327.94 was incomplete, thus, requirement of Section 124 of the New Government Accounting System (NGAS) Manual was not complied and casted doubt on the accuracy of balances of these accounts presented in the Statement of Financial Position as of December 30, 2017; and,

Validity of the Land (201) account totaling P4,943,850.00 could not be ascertained due to the absence of valid proofs of ownership contrary to Section 148 of COA Circular No. 92-386.

Dagohoy Qualified/ Modified

Existence and correctness of the balance of the Property, Plant and Equipment (PPE) accounts as of December 31, 2017 amounting to P90,226,141.79 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, in violation of Section 124 of the NGAS Manual, Volume I; and

286

LGU AUDIT


Absence of Transfer Certificates of Title (TCT) in the name of the LGU rendered its ownership over the six (6) parcels of land with a sum of P2,196,600.07 as of December 31, 2017, doubtful.

Danao Qualified Accuracy of the recorded movable Property, Plant and Equipment (PPEs) and Inventories totalling P17,260,916.15 and P190,064.20, respectively, cannot be fully established due to incomplete conduct of physical count;

Construction in Progress - Infrastructure Assets amounting to P2,758,339.12 recorded in the Trust Fund books remained unidentified as to its nature and actual physical accomplishment thus, casting doubts on the existence, validity and propriety of the recorded asset account;

The Cash - Local Treasury account incurred a negative balance of P31,930.00 at year-end hence, accuracy and reliability of the recorded account balance is rendered doubtful; and,

Reciprocal accounts Due from other Funds and Due to Other Funds were not eliminated in the consolidated financial statements due to unreconciled difference of P3,440,391.53 at year-end thus, affecting the reliability of the account balances.

Dauis Qualified/ Modified

The physical existence, condition, ownership and valuation of properties were not ascertained due to failure of the LGU to verify the unserviceable assets, thus balances of the PPE accounts totaling P99M are unreliable;

The existence and validity of the Due to Other NGAs account totaling P785,343.72 could not be ascertained due to the lack of Subsidiary Ledger as required under Section 10, Volume II of the NGAS Manual; and,

Understatement of Cash in Bank and Due to BIR accounts amounting to P492,967.80 due to the advance recording of the tax remittances in the books.

Dimiao Qualified/ Modified

Collectibility of the total Real Property Tax/Special Education Tax Receivable balances at year end amounting to P18,277,937.92 and P18,039,146.60, respectively is doubtful due to inaccurate basis of setting-up of the receivables, contrary to Section 20 of the New Government Accounting System (NGAS) Manual Volume I, thus overstating the asset accounts as of year end; and,

Unserviceable properties amounting to P1,176,755.29 were not transferred to Other Assets account and demolished Public Market building with a net book value of P57,789.00 was not dropped from the books, contrary to Chapter I of the New Government Accounting System Manual for Local Government Units, Volume I, thus overstating the Property, Plant and Equipment Account during the year.

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LGU AUDIT


Duero

Qualified

Property, Plant and Equipment amounting to P69,972,483.85 (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 conduct of physical count of its properties was not completed contrary to Section 124 of the Manual on the New Government Accounting System for Local Government Units (NGAS), thus the validity, existence and correctness of the recorded Property, Plant and Equipment could not be ascertained;

Dormant/ Non-moving Receivables Account aging 10 years and more totaling P766,193.32 whose possibility of collection or settlement is doubtful still remain in the books, thus, affecting the fair presentation of accounts in the financial statement; and,

Land recorded in the books amounting to P2,999,763.48 were not registered under the Torrens Title System in contrary to Section 148 of COA Circular No. 92-386., thus, affecting the legitimacy of its legal ownership over such properties.

Garcia Hernandez Qualified/ Modified

Non conduct of physical count of properties as well as the non submission of the Report of Physical Count of Property, Plant and Equipment amounting to P 55,586,225.31 as of December 31, 2017 thus the validity, existence and correctness of the recorded Property, Plant and Equipment could not be ascertained; and,

The accuracy of the recorded Real Property Tax (RPT) and Special Education Tax (SET) Receivable balance of P 2,227,102.47 each as of the year end could not be ascertained due to error in computation of the amount used as basis in setting up the receivables.

Getafe Qualified/ Modified

The correctness of the balance of Property, Plant and Equipment accounts totaling P104,474,046.35 (net of depreciation) could not be established due to management’s failure to complete the conduct of physical inventory on all properties owned by the Municipal Government .

Guindulman Qualified/ Modified

The report on the physical count of property, plant and equipment was not submitted to the auditor contrary to Section 124 of the Manual on the New Government Accounting System for Local Government Units (NGAS), thus the validity, existence and correctness of the recorded Property, Plant and Equipment valued at P239,862,535.09 as of December 31, 2017 could not be ascertained; and,

Long overdue cash advances for travel and other special purpose amounting to P454,516.01 remained unliquidated contrary to COA Circular 97-002 due to the failure of management to monitor and enforce their settlement which resulted in the overstatement of assets and the government equity thus, financial statements as of year-end not fairly presented

288

LGU AUDIT


Inabanga Qualified/ Modified

The existence and accuracy in recording of the Property, Plant and Equipment account amounting to P289,538,601.50 could not be ascertained because of the Municipality’s failure to conduct annual physical inventory and maintain necessary accounting and property records;

Procurement of supplies amounting to P1,413,473.20 were directly recorded as expense despite absence of any proof of issuance to end-users contrary to Section 114 and 116 (c) of the Manual on the New Government Accounting System (NGAS) for Local Government Units (LGUs) Volume I thus misstating affected accounts per agency’s books and financial statements;

Net take home pay below the statury net pay of P4,000.00 per month were allowed to regular employees, which is not in accordance with Section 47 of the General Provisions Act 10924 Fiscal year 2017, thus defeating the general intent of the law to boost employees’ morale and self-esteem in order to promote efficiency and effectiveness in government service;

The consolidated Annual Procurement Plan (APP) and Procurement Monitoring Report (PMR) were not prepared for CY 2017 contrary to Section 7.2 and 12.2 of the Revised Implementing Rules and Regulations (RIRR) of RA 9184 thus, procured items may not be in accordance to the operational needs of the municipality and casting doubt the propriety and validity of the procurement;

Generic appropriations totaling to P 24,310,526.49 was allocated in the CY 2017 Current and Continuing Appropriations of 20% Development Fund in violation of Section 320 and Section 413 (e) (3) of the IRR of RA 7160, and Joint Memorandum Circular No.1, Series of 2007 dated March 8, 2007 of the DILG, NEDA, DBM and DOF; and,

Projects to be funded from the LDRRM totaling P4,660,566.47 were not implemented despite the available funds thus, the capability of the LGU to respond in times of disasters was not enhanced and awareness of the residents on hazardous areas was not increased.

Jagna Qualified/ Modified

Accuracy in the recording of Property, Plant and Equipment, Inventories and Biological Assets totaling P122,043,042.79 as of December 31, 2017 could not be ascertained due to non-submission of the Reports of the Physical Count of Inventories and Physical Count of Property, Plant and Equipment (RPCPPE) contrary to Section 124 of the Manual of the New Government Accounting System, Volume 1.

Lila Qualified/ Modified

The recorded Land account amounting to P73,702.27 is not supported with complete description and proofs of ownership by the municipality and does not reconcile with the assessed value of the LGU owned lots of P434,140.00 contrary to NGAS Volume 2, casting doubt on the valuation, validity and propriety of the account as of December 31, 2017; and,

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LGU AUDIT


Non-reconciliation of the cashbook and general ledger balances of the Cash Local Treasury account in the amount of (P224,280.68), contrary to Section 181 (c) of GAAM Manual, Volume 1, rendered the balances of the cash account inaccurate and unreliable thus, affecting the fair presentation of the financial statements.

Loay Qualified/

Modified Validity of the reported balance of Property, Plant and

Equipment amounting to P65,134,870.88 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; and,

The accuracy of the recorded Real Property Tax Receivables, amounting to P10,442.60, could not be ascertained because the Municipal Accountant did not set up the Real Property Tax Receivable and Special Education Tax Receivable at the beginning of the year due to the non submission by the Municipal Treasurer of the certified list of taxpayers and the amount due and collectible for the year based on the Real Property Account Register (RPTAR) as required under Section 19 and 20 of the New Government Accounting System (NGAS) Manual, Vol. I.

Loboc Qualified/

Modified Property, Plant and Equipment amounting to P96,681,619.97

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 complete the conduct of physical count of its properties), thus the validity, existence and correctness of the account could not be ascertained;

Stale checks amounting to P832,882.23 remained unadjusted contrary to Section 112 of Presidential Decree No. 1445 and 59 of the New Government Accounting and Auditing Manual rendering the correctness and accuracy of the recorded Cash in Bank doubtful; and,

Travelling expenses amounting to P185,525.56 incurred in 2016 were paid out of the current year’s appropriation contrary to the provisions Sections 110 and 119 of Presidential Decree No. 1445 and Section 4(a), Volume I of the NGAS Manual resulting in the overstatement of expenses of the year under audit and understatement of its current income by the same amount.

Loon Qualified/

Modified Failure to submit an annual physical inventory of Property,

Plant and Equipment (PPE) account amounting to P228,207,193.53 in violation of Section 124 of the Manual of New Government Accounting System for Local Government Units, resulted in doubtful existence, validity and correctness of the recorded account balances; and,

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LGU AUDIT


The accounts Due to GSIS, Due to Pag-ibig, Due to Philhealth and Due to BIR has a balance of P1,685,686.73 which represented amounts that were not remitted to the concerned agency on time, in violation of Section 6(b) of Republic Act No. 8921, Section 20(b) of the Revised Implementing Rules and Regulations of the RA 7875, Rule VII of Republic Act No. 9679 and BIR Revenue Regulation No. 2-98.

Mabini Qualified/

Modified Management failed to enforce strictly rules and regulations

on the granting, utilization and liquidation of cash advances, thus resulted to the accumulation of outstanding cash advances totaling P1,595,647.36 as of December 31, 2017;

The validity, accuracy and reliability of the Due from Non-Government Organizations/People Organizations account totaling P92,700.00 as of December 31, 2017 is doubtful due to the absence of subsidiary ledgers to identify the debtor-organizations;

The Other Receivables Account totaling P57,265.66 was dormant due to laxity in monitoring receivables and absence of subsidiary ledgers, thus collectability of the amount is remote and thereby overstating the receivable account of the local government unit;

The Property, Plant and Equipment (PPE) account year-end balances do not reconcile with the balances as per Inventory Report, reflecting a P14,173,363.34 variance due to the failure of the agency to conduct regular reconciliation of their property records, thus rendering the accuracy and reliability of the PPE account balances doubtful; and,

Unserviceable properties and equipment costing P5,799,804.19 as per Inventory Report are being accumulated without definite disposal programs, thus depriving the local government unit of substantial income that could have been generated from the sale thereof.

Maribojoc Qualified/ Modified

Costs of construction in progress of infrastructures, buildings and other structures in the General Fund totalling P4,961,587.57 were debited directly to the PPE - Infrastructure Assets and Buildings accounts resulting to misstatement of PPE accounts as of December 31, 2017;

Cost of construction/rehabilitation/improvement of barangay structures totaling P1,251,953.11 remained in the books as Property, Plant and Equipment thereby overstating both the assets and government equity of the municipality as of December 31, 2017; and,

Unused and unexpended balances of trust receipts from national and local government agencies amounting to P1,668,835.40 remained outstanding for more than 3 years contrary to Section 4.9 of COA Circular No. 94-013.

291

LGU AUDIT


Panglao Qualified/ Modified

The accuracy and validity of the Property, Plant and Equipment (PPE) account balances totaling P244M as of December 31, 2017 per accounting records could not be assured due to the failure of the LGU to conduct physical inventory of its properties; and,

Reciprocal accounts Due From Other Funds and Due to other Funds has unsettled/unadjusted difference of P5M casting doubt on the accuracy of the asset and liability accounts. (Finding No. 1, Part II, CY 2017 AAR).

Pilar

Adverse The Cash in Bank balance of P77,006,645.20 is misstated due to long outstanding reconciling items with total amount of P11,717,674.59 that were not substantiated and recorded in the books, and unaccounted difference totaling P68,617.56;

The Unliquidated Cash Advances accumulated to P1,076,961.46 at year end due to non-compliance of the officials and employees on the timely liquidation of cash advances, thereby overstating the receivable accounts and understating the related expense accounts or government equity;

The Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable balances of P4,500,840.91 and P762,274.83, respectively, is not correctly stated due to

a) substantial difference of P3,738,566.08;

b) absence of a duly certified list of taxpayers; and,

c) the failure to establish receivable at the beginning of the year;

Due from National Government Agencies (NGAs) with total balance of P1,539,824.04 was dormant for nine (9) years and lacks subsidiary ledgers to identify the agency-debtor, thus the value of the receivable is impaired and overstated as the collectability of the amount is remote;

The balance of the Inventories amounting to P325,029.20 is not correctly stated because the amount was dormant since CY 2013 due to the failure to observe Perpetual Inventory Method of recording purchases and the failure to conduct physical inventory.

Existence and completeness of the Property, Plant and Equipment with total cost of P174,266,945.47 can not 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;

The existence and reliability of the Due to LGUs under the General Fund amounting to P13,224,390.36 is doubtful due to debit balances, old accounts, misclassification and weakness in monitoring the provincial and barangays’ share of taxes; and,

292

LGU AUDIT


The Other Payables account is overstated by P14,510,000.00 due to the erroneous advance recording of the transfers for local government’s counterpart on projects funded by national government agencies.

President Carlos P. Garcia Qualified/ Modified

The accuracy in the recording of the Property, Plant and Equipment (PPE) totaling P75,504,111.77 per accounting records could not be assured due to the failure of the LGU to conduct actual physical inventory taking, the non-preparation of inventory report and determination of unserviceable items; and,.

Collectibility of the total Real Property Tax/Special Education Tax Receivable balances at year end amounting to P3,242,371.38 is doubtful due to the absence of certified list of taxpayers with their amounts due and collectible contrary to Section 20 of the New Government Accounting System (NGAS) Manual Volume I, thus rendering the overstatement of the assets account.

Sagbayan Qualified/ Modified

Accuracy of the recorded movable Property, Plant and Equipment (PPEs) totalling P16,178,049.82 cannot be fully established due to the absence of physical count; and,

Cash advnces granted to municipal officials and employees amounting to P729,540.16 remained unliquidated as of December 31, 2017 contrary to COA Circular No. 97-002 dated February 10, 1997 resulted to overstatement of receivables and understatement of related expense accounts.


Accuracy of the recorded balances of Report of Inventories and Property, Plant and Equipment (PPE) amounting to P1,303,632.72 and P105,133,556.01 respectively could not be determined due to failure of the agency to conduct actual physical inventory taking of its inventories and properties and submit physical inventory PPE reports pursuant to Section 124 of the NGAS Manual Vol. 1; and,

Accounts Payable totaling P4,124,950.79 under the General Fund (GF) remained dormant in the books for more than two (2) years casting doubt on the validity of claim of the debtors.


Accuracy of the recorded movable Property, Plant and Equipment (PPEs) and Inventories totalling and P929,517.46, respectively, cannot be fully established due to incomplete conduct of physical count; and,

Prior years' undocumented payables in the General Fund were not reverted to the Surplus Account thus, rendering the reported Accounts Payable totaling P2,965,997.20 as of year-end of doubtful validity .

Sevilla Qualified/ Modified

The accuracy, correctness and existence of the reported balances of Property, Plant and Equipment and Biological Assets amounting to P 183,753,511.33 (net of depreciation) are doubtful due to the absence of Report of Physical Count

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LGU AUDIT


of Property, Plant and Equipment (RPCPPE) caused by the failure of the inventory committee to conduct physical count of LGU properties.

Sierra Bullones Qualified/

Modified The accuracy of the Government Equity account balance

could not be ascertained due to non-liquidation of past due cash advances amounting to P133,301.55. Moreover, year-end balance of the account Due to Other National Government Agencies (NGAs) totaling P22,905,897.79 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 thus, resulting in the overstatement of the liability accounts and non-recognition of expenses incurred.

Sikatuna Qualified/

Modified Bank Balances between the Accounting and Treasury

records were not reconciled, therefore, accuracy of the Cash in Bank account balances as of December 31, 2017 totaling P64,094,892.77 cannot be ascertained;

Receivables amounting to P312,793.84 which remained long outstanding or dormant in the books for more than five (5) years were not acted upon to facilitate the proper write-off thereof, resulting in the overstatement of agency assets due to the inclusion of accounts with doubtful existence;

Erroneous entries made on erroneous deposits resulted in inaccurate bank reconciling items and unreliable Cash in Bank balances of each funds; and,

The non-disposal of the unserviceable properties 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.

Talibon Qualified/

Modified Prepayment for official travels totaling P48,688.00 were still

not liquidated, thereby overstating the receivable account and understating the expense account by the same amount;

Abnormal balances were found in the subsidiary ledgers of the Due to Pag-ibig, GSIS and Philhealth accounts totaling P15,053.40 which continually remained unadjusted/corrected as of December 31, 2017, contrary to Section 111(2) of PD 1445, thus, affecting the fair presentation of the financial position of the agency; and,

Due to Other NGAs and Due to LGUs amounting to P41,189,935.03 and P326,580.86 respectively, were either not yet implemented or the unused balances remained unremitted, despite its either fund receipt for more than 91 days or completion/implementation of specific programs, projects and purposes of the financial assistance/grants contrary to COA Circular Nos. 2004-008 and 94-013, thereby rendering the balance of the liability accounts unreliable.

294

LGU AUDIT


Trinidad Qualified/ Modified

Accuracy of presentation of the total PPE net balance amounting to P147,617,687.41 could not be ascertained because reconciliation between the Accounting and General Services Office (GSO) records of Property, Plant and Equipment (PPE) was not made;

Cash advances for official travels and other purposes totaling P144,290.19 were still not liquidated thereby overstating the receivable account and understating the expense account by the same amount;

Abnormal balances were found in the subsidiary ledgers of the Due to Pag-IBIG, GSIS and PhilHealth totaling P84,269.36 which continually remained unadjusted/corrected as of December 31, 2017, thus, affecting the fair presentation of the financial position of the agency; and,

Seven (7) stale checks totaling to P47,648.00 still existed in the books, thus, understating the recorded Cash in Bank and Payable accounts by the same amount.

Tubigon Qualified/

Modified Outstanding receivables which had been dormant for years

and of doubtful collectability amounting to P1,369,721.91 casting doubt on their validity and collectability which may result to inaccurate/distorted financial reports;

The inadequacy of property records did not permit us to apply alternative audit procedures;

Prior year’s expenses totaling P352,174.68 that was reported as current expenses resulted to the misstatement of the net income; and

Existence, validity and correctness of the recorded Property, Plant and Equipment totaling P363,380,169.17 or 72.53% of the total assets could not be ascertained due to the failure of management to submit an inventory report of its PPE.

Ubay Qualified/

Modified Propriety and validity in the recording of the municipality’s

Property, Plant and Equipment (PPE) account totaling P159,281,843.61 (net) for the year could not be ascertained due to the failure of the LGU to conduct actual physical inventory taking, non-determination of unserviceable items and non-preparation and submission of inventory report; and,

The Municipality failed to set-up Real Property Tax (RPT) and Special Education Tax (SET) Receivables at the beginning of the year contrary to Section 20 of NGAS Manual Volume I, hence accuracy of the recorded balances of the RPT and SET Receivable accounts were not ascertained.

Valencia Qualified/

Modified The total P170,580,059.09 depreciable assets, the amount

of P104,244,961.51 or 61% thereof were not provided with depreciation, contrary to Paragraph 59 of the International Public Sector Accounting Standard No. 17. This resulted in the misstatement of assets, expenses and government equity at year-end.

295

LGU AUDIT


Cebu Qualified The balances of the Property, Plant and Equipment (PPE) accounts per accounting records and per Report of Physical Count of Property, Plant and Equipment (RPCPPE) of the General Services Office remained unreconciled as at year-end with a variance of P60,042,811.46, rendering the accuracy of the PPE account balances doubtful; and,

Various asset and liability sub-accounts had negative balances totaling P112,803,255.09 while unidentified accounts totaled P284,524,628.80 rendering the affected accounts unreliable.

Cities:

Bogo City Adverse Non-reliability of fixed assets with book value amounting to P721,241,939.99 or 59.23% of total assets, due to the;

a) Non-conduct of physical inventory and absence of perpetual inventory records at the Accounting Division.

b) Non-disposal of unserviceable properties totaling P10,060,701.02;

c) Non-existence of Property, Plant and Equipment totaling P6,212,134.34; and

d) Parcels of Land totaling P111,941,898.38 were not yet transferred in the name of the City.

e) Properties lost due to Typhoon Yolanda are still carried in the books of accounts.

Non-reliability of 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. Moreover, Inventory accounts totaling P5,240,828.54 were all charged to expenses at year-end, although Accountable Forms amounting P602,656.00 were still on hand as of December 31, 2017.

Cebu City Qualified/ Modified

Inaccurate balances of the Inventory accounts totaling P421,571,508.57 due to: a) unreconciled difference between the balance of the GL and the physical inventory report; b) non-submission of reports on the physical count of other inventories, and; c) various inventories directly charged to expense;

Accumulated depreciation totaling P23,908,735.85 are understated by a month’s depreciation since initial recognition of depreciation is first recorded after the second month only;

Unreliable balances of Property, Plant and Equipment (PPE) accounts totaling P10,357,729,495.13 due to: a) Unreconciled difference of P840,268,196.84 between accounting and property records; b) Unaccounted properties included in the RPCPPE; c) Motor vehicles not included in the RPCPPE and not recorded in accounting; and d) Duplicate items in the RPCCPE;

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LGU AUDIT


Doubtful validity of the Land account of P753,300.00 due to absence of transfer certificate of title (TCT), thus rendering ownership thereto uncertain and exposing the City Government to risk of third party claims and illegal dispositions;

Uncertainty in the validity of the account balance under the temporary SL of some special account balances as of December 31, 2016 totaling P21,697,701.50 due to the absence of details and reference documents;

Non-settlement of a substantial balance of P42,336,034.73 under Due from Officers and Employees account, of which 98% pertains to shortages consisting of P41,447,335.01, the subject of criminal cases that had already been decided by proper courts, and P888,699.72 representing receivable from employees due to overpayment of compensation, lost items and under-remittance of collection of taxes, thus its collectilibility is not certainn;

Unreliable balance of P42,336,034.73 under Due from Officers and Employees account due to negative balances noted in its SL;

Unreliable balance of Accounts Receivable totaling P2.7 million due to lack of details and non-reclassification of these balances to their appropriate SL accounts in the absence of supporting details, and;

P3.1 million worth of cash advances granted to various AOs in the SEF and Trust Fund were still unliquidated thus, resulting in the non-recognition of these expenses in the period it was incurred and exposure of the funds to possible loss and/or misappropriation in the hands of the AO.

Carcar City Adverse The accuracy of the Property, Plant and Equipment (PPE) totaling P1,113,493,569.35, net of depreciation, or 51% of the City's total assets, could not be determined due to the non-conduct of physical inventory, and the non-submission of the report thereon;

The Cash in Bank - Local Currency, Current Account (1-01-02-010) is unreliable due to the unlocated difference from previous years totaling P27,762,137.50 and inclusion of the closed PNB account of P24,147,523.37;

Lack of proper monitoring and review in the recording of transactions resulted in the abnormal balances, thus, accuracy and fairness in the recording could not be ascertained;

Several asset and liability accounts of prior years' balances, some with dormant balances, were not supported with subsidiary ledgers and/or supporting documents, thus, the correctness and validity of the balances cannot be determined;

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LGU AUDIT


The monthly Bank Reconciliation Statements (BRS) on the City's bank accounts for General and Special Education Funds were not prepared; and,

The City did not submit the paid disbursement vouchers and its supporting documens as well as the year-end financial reports and schedules within the deadlines, thus the accounts were not presented timely to the stakeholders. Consequently, the delayed or non-submission precluded the prompt audit and verificataion on the propriety and validity of the transactions recorded in the books, early detection and correction of errors/deficiencies and timely reporting of the audit results to Management.

Danao City Unqualified/

Unmodified

Lapu-Lapu City Qualified/ Modified

Reliability of PPE Account balance of P2,727,365,914.72 (net of depreciation) or 38% of the Total Assets cannot be determined due to inadequate and unreconciled subsidiary and property records, which showed a difference of P808,626,393.20; lack of physical inventory to identify and check the existence and condition of the assets; non-provision of impairment loss for identified unserviceable properties with total net book value of P23,905,253.93 and properties acquired prior to CY 2003 which were not provided with allowance for depreciation;

The ‘Books’ account balance of P117,286,670.91 under the Special Education Fund includes the unidentified dormant balance of P26,537,109.65 previously recorded as ‘Other Assets’; and more than 90% of the remaining balance of P90,749,561.26 were misclassified as these were composed of textbooks/workbooks and instructional materials acquired from 1981 to 2007, thus already obsolete; moreover the DepEd property custodian informed that these were already destroyed and finally disposed hence without any value;

Accounts Payable totalling P27,942,918.80 remained unpaid for more than one year and were not supported with valid claims/documents on record; and,

Several asset and liability accounts, some with dormant balances were not supported with subsidiary ledgers and/or supporting schedules, thus the correctness and validity of the balances cannot be determined.

Mandaue City Adverse The carrying amount of various Property, Plant and

Equipment (PPE) accounts with aggregate balance of P3,404,017,826.00 was of doubtful validity and accuracy due to the incomplete physical inventory taking; discrepancy between the records of the Accounting and DGS; and the inclusion of unserviceable assets valued at P3,716,240.74 as of December 31, 2017 instead of to Other Asset account;

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LGU AUDIT


The validity, existence, and correctness of the reported balance of the Accounts Payable (401) account totaling P414,340,370.59 was found doubtful due to:

a) accrual of undocumented expenses/claims;

b) P33,325,256.20 or 8% have remained outstanding for two (2) to over five (5) years and were not reverted to the Unappropriated Surplus;

c) inclusion of accounts with abnormal or negative balances totaling P1,410,349.55 under the General Fund (GF); and,

d) dormant items amounting to P58,568.59 (TF) are still carried in the books for five (5) to thirty-five (35) years.

The Real Property Tax and Special Education Tax Receivables set up during the year amounting to P223,510,648.53 and P171,931,268.10, respectively, were still not based on the Certified List of Taxpayers prepared by the Treasurer, thus casting doubt on the reliability and accuracy of the balances; and,

Cash Advances for travels, special purpose, intelligence and confidential funds amounting P10,236,960.20 remained unliquidated even after the purpose has been served/ completed at year-end.

Naga City Qualified/

Modified Balance of the Property, Plant and Equipment (PPE)

accounts cannot be relied on due to the difference of P257,056,882.87 between the accouting records and physical inventory report, and the inclusion of unserviceable items and other items which could no longer be identified and not found.

Talisay City Qualified/

Modified Unreconciled difference of P249,496,874.64 between the

totals of the Property, Plant and Equipment (PPE) account balances and the physical inventory reports;

Unreliable balance of Due from Local Government Units, Due from Non-Government Organizations/People's Organizations and Other Receivables in the amount of P5,171,394.00, P906,200.00, and P3,763,760.31 respectively, due to: (a) non-classification of fund transfers to their proper accounts; (b) non-provision of allowance for impairment for doubtful accounts and (c) inclusion of receivables which should be written-off contrary to COA Circular 2016-005 and to the Chart of Accounts for Local Government Units; and,

Non-transfer of the unutilized balance of P1,724,826.91 as proceeds from sale of bidding documents from the Trust Fund books resulting to the overstatement of Trust Liabilities and understatement of Government Equity.

299

LGU AUDIT


Toledo City Qualified/ Modified

Accuracy and reliability of the Cash-in-Bank balance is doubtful due to the various reconciling items in the Bank Reconciliation Statements which were not supported by documents to substantiate the validity of the amounts;

Dormant accounts totalling P2,825,783.22 were carried in various asset accounts, a condition which may mislead the users of the financial statements in their economic decisions. Likewise, the validity of these accounts were doubtful due to lack of data and subsidiary records;

Inaccurate balances of Supplies Inventory accounts amounting to P8,507,833.06 due to the discrepancies noted per accounting records and per inventory report of the General Services Department (GSD); and,

Balances of reciprocal accounts, Due from Other Funds and Due to Other Funds showed unreconciled balances amounting to P471,686.27, thereby casting doubt on the correctness and reliability of the balances presented in the financial statements.

Municipalities:

Alcantara Qualified/ Modified

Due to the non-preparation and submission of updated inventory reports which rendered the Property, Plant and Equipment account balances totaling P77,018,571.88 unreliable. Inadequacy of property Drecords did not allow application of alternative audit procedures.

Alcoy Qualified/ Modified

Capital Expenditures aggregating P410,729.45 were charged to Expense instead of taking up as Assets, thereby understating the balances of Property, Plant and Equipment (PPE) and Inventory account as of a particular period.

Alegria Qualified/ Modified

Non-reconciliation of the cashbook and general ledger balances of Cash Local Treasury account with a total unreconciled difference of P277,115.51 rendered the balances of cash and income accounts unreliable affecting the fair presentation of the financial statements;

Cash in Bank balance totaling P55,482,565.79 is unreliable due to failure of management to submit Bank Reconciliation Statements (BRS) for the period from January to December 2017 in violation of COA Circular No. 96-011 titled Modification of Provincial Circular No. 19 dated June 15, 1970;

Property, Plant and Equipment totaling P130,684,850.46 included unserviceable properties amounting to P2,666,804.62, thereby overstating affected PPE accounts; and,

Eighty-nine (89) general ledger accounts were not supported with subsidiary schedules, thus the correctness of the balances of assets and liabilities in the General, Special Education and Trust Funds totaling P180,908,307.60 could not be ascertained and relied on.

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LGU AUDIT


Aloguinsan Qualified/ Modified

Failure to conduct and submit a report on the physical inventory of all properties hindered our efforts in verifying the existence and physical condition of Property, Plant and Equipment. Consequently, we were unable to ascertain the validity and reliability of the account balance stated at P55,564,384.74 net of depreciation.

Argao No FS submitted (with ML)

Asturias Qualified/ Modified

The variance of P50,791,798.12 between the total reported balance of the Report of Physical count of Property, Plant and Equipment (RPCPPE) and of Inventories (RPCI) of P215,543,690.34 and that in the books of accounts of P266,335,488.46 (before depreciation) rendering the municipality’s assertions of existence, completeness and valuation of its supplies and properties in the financial statements doubtful ; and,

Balances of the Real Property Tax Receivable/Special Education Tax Receivable at P12,846,042.38 and P12,914,335.17, respectively, as of December 31, 2017 were not supported with a list of taxpayers and the amount overdue, thereby casting doubt to the correctness of the balances of the accounts in the financial statements.

Badian Qualified/ Modified

Due to the non-conduct and non-submission of the Report on Physical Count of Property, Plant and Equipment rendering the PPE account balance totalling P108,150,754.72 or 30.66% of the total assets unreliable.

Balamban Qualified/ Modified

The variance of P62,249,701.78 between the reported balance of the Report of Physical count of Property, Plant and Equipment (RPCPPE) and of Inventories (RPCI) of P759,301,716.16 and that in the books of accounts of P821,551,417.94 (before depreciation) rendering the municipality’s assertions of existence, completeness and valuation of its supplies and properties in the financial statements doubtful; and,

The balances of the Real Property Tax Receivable/Special Education Tax Receivable at P24,744,756.68 and P25,571,899.99, respectively, as of December 31, 2017 were not supported with a List of Delinquencies/Taxpayers with taxes overdue, thereby casting doubt to the correctness of the balances of the accounts in the financial statements.

Bantayan Qualified/

Modified The correctness and validity of Property, Plant and

Equipment accounts amounting to P163,143,183.11 could not be ascertained due to the non-preparation and submission of updated inventory reports and the non-reconciliation of inventory reports with the accounting records. Inadequacy of the records did not permit us to apply adequate alternative audit procedures; and,

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Substantial amount of Loans Receivable-Others account recorded under the General Fund of the Municipality totaling P11,902,598.02 as of December 31, 2017 have been outstanding for more than 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 contrary to Sections 2 and 111(2) of PD 1445.

Barili Qualified/ Modified

Failure to conduct and submit a report on the physical inventory of all properties hindered our efforts in verifying the existence and physical condition of Property, Plant and Equipment. Consequently, we were unable to ascertain the validity and reliability of the account balance stated at P209,496,684.51 net of depreciation.

Boljoon Qualified/ Modified

Collections amounting to P30,046.91 were not recorded in the books;

Cash Advance of P2,740.00 was automatically written off despite the lack of request for write-off and approval from COA; and,

Depreciation expenses were not provided for Property, Plant and Equipments (PPEs) totaling P4,232,154.21 while Interest Income amounting to P66,182.55 as well as minor deficiencies noted were not recorded/adjusted in the books, thereby misstating the affected accounts and its presentation in the Financial Statements as of year-end.

Borbon Qualified/ Modified

Due to the unreconciled 2016 balance of the Property, Plant and Equipment in the amount of P79,020,136.44 which was used as the beginning balance in the 2017 Trial Balance and the non-submission of the 2017 inventory report, thus the accuracy of the recorded PPE was doubtful.


The existence, valuation, completeness and validity of the municipality’s Property, Plant and Equipment account balances totaling P264,668,071.02 which is 55.50% of its assets are doubtful due to failure of the Property Officer to conduct physical count of its property, plant and equipment, and the non-reconciliation of the accounting records with the treasury records due to the failure of these units to maintain complete and updated property and PPE ledger cards. The inadequacy of the records did not permit us to apply adequate alternative procedures.

Catmon Qualified/ Modified

The existence, valuation, completeness and validity of the municipality’s Property, Plant and Equipment account balances totaling P67,359,838.79 which is 22.51% of its assets are doubtful due to failure of the Property Officer to conduct physical count of its property, plant and equipment, and the non-reconciliation of the accounting records with the treasury records due to the failure of these units to maintain complete and updated property and PPE ledger cards. The inadequacy of the records did not permit us to apply adequate alternative procedures.

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LGU AUDIT


Compostela Qualified/ Modified

The correctness of the balances of the Property, Plant and Equipment (PPE) accounts totaling P176,892,255.28 which was 54% of the total assets of the LGU as of December 31, 2017 could not be ascertained due to the failure of the Inventory Committee to complete the periodic physical count of the PPE accounts. Moreover, the Municipal Accountant and Municipal Treasurer did not maintain the PPE Ledger Cards (PPELC) and PPE Property Cards, respectively; and,

Unreliable and inaccurate Cash in Bank account due to non-reconciliation between the bank and accounting records which differed by P1,942,370.38.

Consolacion Qualified/

Modified Cash advances totaling P1,510,440.00 were not properly

recorded/classified in its appropriate account titles in the books, thus misstating the affected account balances in the financial statements; and,

The correctness of the balances of the Property, Plant and Equipment (PPE) accounts totaling P176,892,255.28 which was 54% of the total assets of the LGU as of December 31, 2017 could not be ascertained due to the failure of the Inventory Committee to complete the periodic physical count of the PPE accounts and submit a report thereof.

Cordova Qualified/

Modified The correctness of the balances of the Property, Plant and

Equipment (PPE) accounts totaling P209,216,804.43 which was 63% of the total assets of the LGU as of December 31, 2017 could not be ascertained due to the failure of the Inventory Committee to finish the conduct of the periodic physical count of the PPE;

Cash in Bank account per bank and accounting records differed by P7,179,968.72, hence affecting the reliability and accuracy of the account balance in the financial statements at year-end;

Thirty one (31) parcels of land were recorded at their market value instead of the acquisition cost or appraised value resulting in the overstatement of the land account in the financial statements;

Cash advances of the Disbursing Officer other than for payrolls totaling P996,415.00 were recorded as Advances for Payroll instead of Advances to Special Disbursing Officer, hence misstating the affected account balances in the financial statements; and,

Six (6) subsidiary accounts with balances totaling Two Million Two Hundred thirty Two Thousand One Hundred Seventy Nine Pesos & 75/100 (P2,232,179.75) were not supported with valid documents and have been outstanding since CY 2002, thus the validity thereof was doubtful.

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LGU AUDIT


Daanbantayan Qualified/ Modified

The validity, existence and correctness of Property, Plant & Equipment accounts amounting to P178,918,623.11 could not be ascertained due to the non-reconciliation of records between the General Services Office and the Accounting Office and the non-submission of a report on the physical inventory of the agency’s assets. Inadequacy of the records did not permit us to apply adequate alternative audit procedures.

Dalaguete Adverse Property, Plant and Equipments (PPEs) and the various completed Infrastructure Projects under the Trust Fund aggregating P23,733,359.09 were closed to the General Fund as Grants and Donations in Kind which overstated the recorded Income during the year;

Interest expenses incurred in connection with loan repayments for the procurement of various Property, Plant and Equipments (PPE) totaling P39,373,853.14 were not capitalized and was not supported with a Loan Repayment Schedule, understating the PPE accounts by the same amount and which are vital to prove that the transactions actually transpired and were valid, legal and proper; and,

Collections in CYs 2011 and 2012 amounting to P31,260.00 have remained unrecorded in the books, thereby understating income of the Municipality by the same amount.

Dumanjug Qualified/ Modified

Discrepancy between accounting and property records amounting to P 47,453,883.39 rendered difficulties in verifying/validating the existence and physical condition of PPE totaling P149,667,039.73 net of depreciation. Consequently, the validity and reliability of the account balance as stated could not be ascertained.

Ginatilan Qualified/

Modified Checks issued totaling P23,042.97 which became stale and

remained outstanding for more than six (6) months to two (2) years from date of issuance were not cancelled contrary to Section 59 of the New Government Accounting System for Local Government Units, Volume 1, thus, understating the Cash in Bank accounts by the same amount;

Property, Plant and Equipment totaling P132,478,824.18 included unserviceable properties amounting to P1,590,032.17, thereby overstating affected PPE accounts; and,

The year-end balances of Due to National Government Agencies (NGAs) and Due to Local Government Units (LGUs) amounting to P27,699,151.17 and P3,078,069.91 were unreliable due to

a) absence of necessary details of items in the schedules;

b) inclusion of subsidiary items with negative balances;

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c) unreverted balance of Priority Development Assistance Fund (PDAF); and,

d) unliquidated fund transfers from other government agencies.

Liloan Unqualified/ Unmodified

Madridejos Qualified/ Modified

The correctness and validity of Property, Plant and Equipment accounts amounting to P166,014,371.53 could not be ascertained due to the non-conduct of actual physical count, and non-preparation and submission of updated inventory reports and the non-reconciliation of inventory reports with the accounting records. Inadequacy of the records did not permit us to apply adequate alternative audit. Procedures.

Malabuyoc Adverse Cash in Bank balance totaling P82,287,651.08 is unreliable due to failure of management to submit Bank Reconciliation Statements (BRS) for the period from January to December 2017 in violation of COA Circular No. 96-011 titled Modification of Provincial Circular No. 19 dated June 15, 1970;

Cash in Bank–Local Currency, Current Account was understated due to non-cancellation of stale checks totaling P415,911.67, contrary to Section 59 of the Manual on the New Government Accounting System (NGAS), Volume I for Local Government Units;

Fifty-five (55) general ledger accounts were not supported with subsidiary schedules, thus the correctness of the balances of assets and liabilities in the General, Special Education and Trust Funds totaling P176,324,432.79 could not be ascertained and relied on.; and,

The accuracy and existence of the Property, Plant and Equipment (PPE) was not established and remained doubtful due to the Municipality’s continued failure to conduct a complete physical count of all its properties amounting to P101,064,751.00 including Breeding Stocks and non-reconciliation of property and accounting records, contrary to the provisions of the Manual on the New Government Accounting System (NGAS), thus affecting the fair presentation of the financial statements.

Medellin Qualified/ Modified

The existence, completeness and correctness of valuation of the Property, Plant and Equipment as asserted by Management, totaling P140,589,321.40 could not be ascertained/substantiated due to the non-reconciliation of records between the General Services Office and the Accounting Office and the non-submission of a report on the physical inventory of the agency’s assets. Inadequacy of the records did not permit us to apply adequate alternative audit procedures.

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Minglanilla Qualified/ Modified

Land account amounting to P41,811,653.54 was not covered by Certificate of Title or other documents that would prove ownership; and,

The validity and existence of the Property, Plant and Equipment (PPE) amounting to P364,058,463.56 (including CIP of P155,834.08 and breeding stocks amounting to P1,226,200.00) could not be ascertained as physical inventory was still not conducted during the year and the unavailability of adequate records made it difficult to apply other alternative audit procedures.

Moalboal Qualified/

Modified Due to the non-preparation and submission of updated

inventory reports of Property, Plant and Equipment (PPE) totaling P179,182,080.62 or 65.45% of the total asset, rendering the existence and condition doubtful. The inadequacy of property records did not allow application of alternative audit procedures.

Oslob Qualified/

Modified Due to the fact that the FSs under the Trust Fund was not

prepared in accordance with COA Circular No. 2015-009 dated December 1, 2015 as the Property, Plant and Equipments (PPEs), the corresponding Accumulated Depreciation and Depreciation Expenses accounts were recorded under the General Fund while Subsidiary Ledgers were not submitted for verification which casts doubt on the accuracy of account balances presented therein.

Pilar Qualified/

Modified The physical inventory of the Property, Plant and Equipment

during the year was not completed (as discussed in Part III). Based on available records and schedules, other alternative audit procedures were applied to ascertain the existence of the PPE in the total amount of P79,631,363.40, but for lack of material time, the Audit Team was unable to validate the existence of PPE and the agency failed to maintain the subsidiary ledgers / cards per item of the PPE.

Pinamungajan Unqualified/

Unmodified

Poro Qualified/ Modified

The physical inventory of the Property, Plant and Equipment (PPE) during the year was not completed . Based on available records, other alternative audit procedures were applied to ascertain the existence of the PPE in the total amount of P130,853,441.38 as of December 31, 2017, but for lack of material time, the Audit Team was unable to validate the existence of the PPE; and. . Also, the agency failed to maintain the subsidiary ledgers/ cards per item of the PPE.

Ronda Qualified/

Modified Property, Plant and Equipment totaling P79,398,580.80 or

44.38% of the total assets were still not supported with an inventory report thus making its valuation and existence doubtful.

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LGU AUDIT


Samboan Qualified/ Modified

Reconciling items in the bank reconciliation statements amounting to P6,837,282.54 were not promptly recorded which resulted in the under/overstatement of Cash in Bank accounts;

Non-reconciliation of the cashbook and general ledger

balances of Cash-Local Treasury and Cash in Bank-Local Currency, Current Account accounts with a total unreconciled difference of P847,690.22 rendered the balances of cash and income accounts unreliable affecting the fair presentation of accounts in the financial statements;

The Municipality did not conduct physical count of Property,

Plant and Equipment (PPE) with a book value of P160,328,785.62, including Breeding Stocks totaling P160,570,785.62. Thus, the accuracy and reliability of the recorded PPE including its provision for depreciation and Breeding Stocks in the financial statements could not be ascertained; and,

Sixty-three (63) general ledger accounts were not supported

with subsidiary schedules, thus the correctness of the balances of assets and liabilities in the General, Special Education and Trust Funds totaling P248,572,065.85 could not be ascertained and relied on.


Modified Land account amounting to P8,227,563.53 was not covered

by Certificate of Title or other documents that would prove ownership; and,

Validity and existence of the Property, Plant and Equipment

(PPE) totaling P284,677,845.04 could not be ascertained as physical inventory was still not conducted during the year and the unavailability of adequate records made it difficult to apply other alternative audit procedures.

San Francisco Qualified/

Modified The balance of the Property, Plant and Equipment (PPE)

account totaling P132,729,152.48 as of December 31, 2017 did not reconcile with the amount per physical inventory of P24,522,293.32 producing a difference of P108,206,859.16 and the agency failed to maintain the subsidiary ledger/cards and the depreciation per item of the PPE.

San Remigio

Qualified/ Modified

Validity, existence and correctness of Property, Plant & Equipment totaling P176,895,614.60 could not be ascertained due to the non-reconciliation of records between the General Services Office and the Accounting Office and the non-submission of a report on the physical inventory of the agency’s assets. Inadequacy of the records did not permit us to apply adequate alternative audit procedures.

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LGU AUDIT


Santa Fe Qualified/ Modified

The correctness and validity of Property, Plant and Equipment accounts amounting to P104,986,623.14 could not be ascertained due to the non-preparation and submission of updated inventory reports which should be reconciled with the accounting records. Inadequacy of the property records did not permit us to apply adequate alternative audit procedures.

Santander Qualified/ Modified

Cash in Bank–Local Currency, Current Account was understated due to non-cancellation of stale checks totaling P64,356.74, contrary to Section 59 of the Manual on the New Government Accounting System (NGAS) for Local Government Units, Volume I;

Seventy-four (74) general ledger accounts were not supported with subsidiary schedules, thus the correctness of the balances of assets and liabilities in the General, Special Education and Trust Funds totaling P233,899,639.84 could not be ascertained and relied on;

Balances of inventory accounts totaling P2,489,311.00 were not reliable due to non-recording in the books of accounts the issuances of supplies and materials; and,

Property, Plant and Equipment totaling P139,155,396.02 included unserviceable properties amounting to P4,456,442.02 and deposits in the amount of P10,023,032.75 held under receivership by the Philippine Deposit Insurance Corporation (PDIC), thereby overstating affected PPE accounts.

Sibonga Qualified/ Modified

Validity and existence of the Property, Plant and Equipment (PPE) totaling P207,963,816.46 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; and,

Land Account totaling P11,807,593.20 was only supported with Tax Declarations instead of the Transfer Certificate of Titles for the sixty seven (67) municipal lots. Moreover, breeding stocks amounting to P1,993,000.00 was written off from the books of accounts without the required supporting documents.

Sogod Qualified/ Modified

Due to the existence, valuation, completeness and validity of the municipality’s Property, Plant and Equipment account balances totaling P85,714,683.93 which is 40.13% of its assets are doubtful due to the non-reconciliation of the accounting records with the treasury records because of the failure of these units to maintain complete and updated property and PPE ledger cards.

Tabogon Unqualified/ Unmodified

Tabuelan Unqualified/ Unmodified

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Tuburan

Qualified/ Modified

Non-submission of the Report on the Physical Count of Property, Plant and Equipment for CY 2017, thus the existence, completeness and valuation of the Property, Plant and Equipment account totaling P173,625,039.56 could not be relied upon as of year-end.

Tudela Qualified/

Modified The physical inventory of the Property, Plant and Equipment

during the year was not completed . Based on available records and schedules, other alternative audit procedures were applied to ascertain the existence of the PPE in the total amount of P65,773,549.71, but for lack of material time, the Audit Team was unable to validate the existence of PPE and the agency failed to maintain the subsidiary ledgers / cards per item of the PPE; and,

Transactions from January 2009 to June 2010 remained unrecorded due to the non submission of transaction documents as basis for recording in the books.

Siquijor Qualified/

Modified Cash advances totalling P5,236,213.90 granted to officials

and employees remained unliquidated thus expenses were not recorded in the period that these were incurred;

The balance of movable Property, Plant and Equipment

(PPE) accounts of P195,187,494.79 per accounting records remained unreconciled with the Report of Physical Count of Property, Plant and Equipment (RPCPPE) of the General Services Office (GSO) as at year-end showing a variance of P41,609,952.64;

The existence, accuracy and reliability of Inventories costing P23,814,065.03 could not be ascertained due to the non-conduct of physical count, while the Accounting Office and the General Services Office did not maintain property ledger cards and stock cards;

Reconciling items consisting of outstanding checks for more

than six (6) months and unrecorded interest on bank deposits in the aggregate amount of P983,295.34 were not adjusted as at year-end, thus affecting the accuracy of the Cash in Bank account;

Provision for Depreciation on various PPE accounts were not

set up for CY 2017, resulting in incorrect valuation of PPE account; and,

The Land account balance of P34,215,484.48 is not reliable

since the total value per report by the GSO showed a difference of P1,051,028.52 as compared with the accounting records. Further, parcels of land already recorded in the books, were not covered by Certificate of Title in the name of the Provincial Government.

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Municipalities:

Enrique Villanueva Qualified/ Modified

The existence, accuracy and reliability of Inventories costing P1,115,356.95and movable properties with net book value of P6,604,567.37could not be ascertained due to the non-conduct of physical count, while the Accounting Office and the Municipal Treasurer’s Office did not maintain property ledger cards and stock cards, respectively.

Larena Qualified/ Modified

Movable items in the Property, Plant and Equipment (PPE) account balances totaling P10.31 million remained unreliable due to the continued non-conduct of the annual physical count of its property, plant and equipment.

Lazi Qualified/

Modified Movable items in the Property, Plant and Equipment (PPE)

account balances totaling P16.062 million remained unreliable due to the inability of the municipal officials to conduct annually the actual physical counts of its property, plant and equipment.

Maria Qualified/

Modified The correctness of the balance of movable Property, Plant

and Equipment (PPE) accounts amounting to P5.73 million as at December 31, 2017 remained unreliable since its existence cannot be established due to the continued inability of the municipal officials to conduct annually the actual physical counts of its property, plant and equipment.

San Juan Qualified/

Modified Movable items in the Property, Plant and Equipmet (PPE)

accounts of P22,430,217.46 and Biological Assets of P494,910.00, are not reliable since Management did not establish its existence and valuation due to the continued non-conduct of physical count of its movable properties.

Siquijor Qualified The physical inventory report of movable Property, Plant and

Equipment (PPE) did not reconcile, identify and properly classify balances of movable property, plant and equipment totaling P20,166,281.12 (net of accumulated depreciation) thereby adversely affecting the validity of the recorded assets in the books of accounts as at year-end. Further, PARs were not updated and incomplete hence the difficulty in pinpointing persons/s responsible for the PPE.

Region VIII – Eastern Visayas

Biliran Qualified/ Modified

Unreliable existence and accuracy of the Property, Plant and Equipment (PPE) account year-end balance of P1.1 billion caused by the conduct of physical inventory on 26% only of its properties with unreconciled difference of P90 million between accounting records and the Report on the Physical Count of Property, Plant and Equipment (RCPPE)and,

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The accuracy of the Trust Liabilities - LDRRM account balance is unreliable due to unreconciled variances between the Sources and Utilization Report and accounting records by P8.05 million and between the Notes to FS and per subsidiary ledger by P5.4 million.

Municipalities:

Almeria Qualified/ Modified

No Report of Physical Count of PPE for CY2017 was submitted, the related property and accounting records were not properly maintained and depreciation were not fully provided in all properties, hence, reliability and accuracy of the Property, Plant and Equipment account carrying balance of PP33 million cannot be confirmed.



a) Property Plant and Equipment (PPE) account with carrying balance of P66 million due to lacking vital and valuable data in the Report on the Physical Count of PPE which hindered its reconciliation with accounting records while PPE Ledger Cards and Property Cards to support the balance were not maintained;

b) Intra-agency Payables has an unknown variance of P17 million instead of zero; and,

c) Receivables account excludes Real Property Tax collectibles for several years due to non-accrual of the same which resulted to a negative balance of P188,766.66 as of December 31, 2017.

Cabucgayan Adverse The assets of the Municipality was understated by a net amount of P11.6 million or 11.3% of the year-end total due to

a) unrecorded donated Municipal Civic Center amounting to P14 million;

b) unrecorded receivables from water service fees of P2.2 million, and,

c) unrecorded long outstanding stale checks of P193,521.89 and the uncorrected book adjustments to reduce the Cash in Bank balance by P4.8 million.

The misstatements still exclude the unrecorded 116 checks which amount cannot be established due to unsubmitted vouchers, reports and paid checks.

Liabilities were understated by P6.6 million or 14% of the year-end total due to unrecorded fund transfers from National Government Agencies totaling to P4.3 million and the corresponding deferred revenues from water services fees totaling to P2.2 million.

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The existence and reliability of the Property, Plant and Equipment (PPE) account at P16 million as of December 31, 2017 were not confirmed since the physical inventory was conducted on only 3% of the total PPE and the accounting and property records were not available to support the reported balance. No alternative procedures could be undertaken to ascertain the composition of the account.

Caibiran Qualified/ Modified

The accuracy of the Property, Plant and Equipment account with carrying value of P 66 million as of December 31, 2017 cannot be confirmed because the Report on Physical Count of Property Plant and Equipment (RCPPE) was not submitted, the related property and accounting records were not maintained and depreciation was not provided in all properties. Also, Cash in Bank account balance of P60 million is inaccurate due to unadjusted stale checks totaling P888,079.35 and errors/omissions totaling P24,387.23.

Culaba Qualified/ Modified

The accuracy of the Property, Plant and Equipment account with carrying value of P65,000,444.60 as of December 31, 2017 cannot be confirmed because the prescribed Report on the Physical Count of Property, Plant and Equipment (RPCPPE) for CY 2017 was not submitted, the related property and accounting records were not maintained, some PPE accounts were inaccurately presented in the Financial Statements and depreciation was not provided in some properties.

Kawayan Qualified/ Modified

The reliability and accuracy of the Property, Plant and Equipment account with a carrying value of P92 million as of December 31, 2017 cannot be confirmed because the data in the Report on Physical Count of Property Plant and Equipment (RCPPE) were incomplete, the related property and accounting records were not maintained and depreciation was not provided in all properties; and,

Cash in Bank – Local Currency Current Account (LCCA) account balance of P39,364,514.19 is inaccurate due to unrecorded items for adjustment aggregating P912,253.28 and stale checks totaling P70,915.00.

Maripipi No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Naval Qualified/

Modified The Property, Plant and Equipment (PPE) account was

overstated by P4,491,064.00 due to the eleven (11) Infrastructure Projects which were not derecognized in the LGU books despite its having been transferred to the recipient Barangays; and,

Infrastructure Assets in the Property, Plant and Equipment account remained unreliable due to unimplemented CY 2016 recommendations to prepare the Report on the Physical Count of Local Road Network (RPCLRN) and provide depreciation on said properties.

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Eastern Samar

Qualified/ Modified

The accuracy and existence of the year-end balances of Cash in Bank, Local Currency Current Account totaling P1,286,876,952.42 for all funds, cannot be ascertained due to unrecorded bank and book balances aggregating P46,468,316.59;

Unreconciled variance between balances presented in the Notes to the Financial Statements and Subsidiary Ledger pertaining to Land Bank of the Philippines, General Fund account totaling P62,636,013.00 and non-submission of the required monthly bank reconciliations; and,

The doubtful completeness and accuracy of the Property, Plant and Equipment account balances amounting to P961,955,415.87 which could not be ascertained due to non-derecognition of obsolete/unserviceable property amounting to P12,150,433.87, non-recording of donated properties and the absence of PPE Ledger Cards, Real Property Ledger Cards, Stock Cards, Property Cards, and other related records/documents at the General Service Office which do not reconcile with the book balances at the Accounting Unit.

City:

Borongan City

Qualified/ Modified

The accuracy of the Cash in Bank-Local Currency, Current Account amounting to P552,684,723.32 as of December 31, 2017 could not be ascertained because journal entries were not prepared to record reconciling items in the books; and the P2,646,222.67 difference between the balance per books and the balance per bank statement of the General Fund account remained unreconciled;

Advances for Officers and Employees amounting to P2,984,020.49 of which P2,031,746.52 or 68% under the General Fund are aged one year or over, remained unliquidated;

Aging schedule submitted for General Fund has a discrepancy of P193,993.19 while no such aging was submitted for the Special Education Fund balance of P61,960.72 and Trust Fund balance of P168,297.24, thus, rendering the accuracy of the recorded balance doubtful; and,

The Construction in Progress account recorded in the books at P240,189,390.38 is doubtful due to failure of the City Accountant to maintain Subsidiary Ledger for each project, thus, completed projects may not have been reclassified to its proper PPE account contrary to Section 50 of NGAS Manual for Local Government Units, thereby overstating the same and understating the appropriate asset account.

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Municipalities:

Arteche Qualified/ Modified

The accuracy and correctness of the Property, Plant and Equipment (PPE) account valued at P113,485,187.80 could not be ascertained due to absence of PPE ledger cards and property cards and the non-reconciliation of the records between the General Service Office and the Accounting Office; and,

The financial statements did not disclose the depreciation methods used, the useful lives or the depreciation rates used, the gross carrying amount and the accumulated depreciation at the beginning and end of the period, and a conciliation of the carrying amount at the beginning and end of the period showing additional, disposals, impairment losses, depreciation and other changes.

Balangiga Qualified/ Modified

The reliability of PPE account valued at a net amount of P134,550,070.40 could not be ascertained due to the absence of records that can validate the reported account balance.

Balangkayan The accuracy and reliability of the year-end balance of the Cash-in-Bank-Local Currency, Current Account in the amount of P 24,028,542.76 could not be ascertained due to the incomplete preparation and submission of the monthly bank reconciliation statements for all funds maintained in contradiction to Section 58 and 74 of PD No. 1445;

The existence, completeness and accuracy of the PPE account balance of P159,071,668.55 could not be ascertained due to partial submission of physical inventory report totaling P 104,733,382.25 only; and non-maintenance of PPE Ledger Cards, Real Property Cards and other related records/documents contrary to Section 124, Volume 1 and Section 13 and 15, Volume II of the NGAS Manual for LGUs/ Furthermore, the affected asset account is not fairly presented and will affect the reliability and accuracy of the financial statements contrary to paragraphs 27 and 29 (b) of PPSAS 1; and,

Depreciation expenses were not recognized in the books contrary to PAG2 to PAG6 of PPSAS 17, thus, overstating the balances of the PPE and Government Equity Accounts.

Can-avid Qualified/ Modified

Some account balances are erroneous due to improper accounting treatment of some transactions, in non-adherence to Section 121 of PD 1445 resulting in the over/understatement of its related financial statement accounts in an aggregate amount of P12,726,080.06;

The existence, completeness and accuracy of the PPE balance of P131,330,195.48 could not be ascertained due to: (a) absence of complete and properly accomplished Report of the Physical Count of PPE (RPCPPE) and Property Cards; and (b) non-maintenance of complete and properly

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accomplished PPE Ledger Cards and Real Property Ledger Cards which is in contrary to Sections 119, 120 and 123 of COA Circular NO. 2002-003;

92 Disbursement Vouchers totaling P743,287.60 and five cancelled checks were not submitted as of to date in non-adherence to Section 39 (1) (3) of PD No. 1445, causing doubt on the validity of the transactions, and over/understatement of some accounts; and,

Various disbursements for Calendar Year 2017 showed that there were payment made under the General Fund with deficient or lacking documents totaling P23,319,955.48, in non-adherence to COA Circular No. 2012-001 and Section 4(6) of PD No. 1445, thus, causing doubt on the legality/regularity of the transactions.

Dolores Qualified/ Modified

Various disbursements for CY 2017 showed that there were payments made under the General Fund, Special Education Fund and Trust Fund with deficient or lacking documents totaling P 49,226,046.16, in non-adherence to COA Circular No. 2012-001 and Section 4(6) of PD 1445, thus, causing doubt on the legality/regularity of the transactions;

Failure to regularly prepare the bank reconciliation statements and weak internal control system of Cash Account resulted in the Cash in Bank account’s unreconciled balance of P 17,467,003.59, in non-adherence to Section 74 PD 1445 and COA Circular No. 96-011;

Cash Advances granted for travels of officers and employees totaling P 806,480.10, ranging from 31 days to more than 3 years have remained unliquidated, in non-adherence to COA Circular No. 97-002 dated February 10, 1997 and Section 100 of PD No. 1445, resulting in the failure to validate/verify the propriety of transactions; and,

The existence, completeness and accuracy of the PPE balance of P 320,345,257.43 could not be ascertained due to: (a) absence of complete and properly accomplished Report of the Physical Count of PPE (RPCPPE); and (b) non-maintenance of complete and properly accomplished PPE Ledger Cards and Real Property Ledger Cards which are contrary to Sections 119, 120 and 124 of COA Circular No. 2002-003.

General MacArthur Qualified/ Modified

The validity, regularity and propriety of some transactions could not be ascertained and their impact on the presentation of affected accounts on the financial statements could not be determined due to the partial, delayed and non-remittance of cash collection by accountable officers including the non-submission of the Report of Accountability for Accountable Forms (RAAF) and Consolidated RAAF (CRAAF) which resulted in the non-reporting and non-presentation of accountable forms and the understatement of Cash and Revenue balances by P 744,101.08;

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LGU AUDIT


The prior year payments of expenditures, amounting to P 336,660.12, without the proper set-up of the Accounts Payable account by the end of 2016 bloating the expenditures by the same amount; and,

Failure to update and properly present the correct balance of the LDRRM Fund in the financial statements and likewise failed to disclose its breakdown in the Notes leaving the LDRRMF balance unsuitable for decision-making.

Giporlos Qualified/ Modified

Items of PPE account totaling P 25,009,218.26 were not properly valued and measured as the required depreciation and impairment had been continuously omitted thereby affecting the accuracy and presentation of the account in the financial statements; and,

The inadvertent omission to book-up the unexpended/unobligated balance of the LDRRMF totaling P 2,906,990.00, as Special Trust Fund using “Trust Liability-DRRMF” account in the Trust Fund that affects the presentation and disclosures assertions.

Guiuan Qualified/ Modified

The existence, accuracy and propriety of the reported balance of PPE account of P 438,205,890.72 were not validated since the municipality is currently in the process of assessment and inventory of its PPE, thus, the audit team was unable to adopt alternative procedures to validate the balances;

The balance of the Liability Account under the Trust Fund of P83,725,515.69 were not properly verified due to non-submission by the agency of records and reports on the fund transfers;

Balance of the account Other Receivables P48,670.79, Due to Other NGAs P7,301.05 and Other Payables of P25,339.10 were unverified due to unavailability of records, since the accountant is still in the process of adjustment of the accounts; and,

Findings in the AAR that can affect the reliability of the amounts presented in the financial position and performance of the LGU.

Hernani Qualified/ Modified

The Officer-in-Charge-Municipal Treasurer did not submit duly accomplished payrolls, liquidation reports and report of disbursements totaling P 4,826,263.79 to the Audit Team, thus, financial statement balances for Advances for Payrolls of P P221,505.34 and Advances to Special Disbursing Officer of P 191,885.75 are unreliable.

Jipapad Qualified/ Modified

The accuracy and reliability of the Cash-in-Bank-Local Currency, Current Account in the total amount of P 71,350,254.27 could not be ascertained due to the presence of unreconciled items amounting to P 244,861.04 in the Bank Reconciliation Statements, contrary to Section 74 of PD No. 1445 and COA Circular No. 96-11.

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LGU AUDIT


The balance of the account Advances to Officers and Employees is unreliable due to:

a) inclusion in the account of the dormant amount of P 421,843.74 where settlement/collectability is uncertain; and,

b) liquidation of cash advances in the total amount of P 196,500.00 were not supported with liquidation reports, contrary to COA Circular No. 2016-005 and COA Circular No. 97-002 .

The accuracy, correctness and existence of the account PPE valued at P 31,431,382.52 could not be ascertained due to

a) incomplete report on the Physical Count of PPE;

b) absence of ledger cards and property cards, and non-reconciliation of the records between the property office and accounting office, contrary to COA Circular No. 2002-003.

The depreciation method used and the useful lives or depreciation rates used were not disclosed in the financial statements contrary to Paragraph 88 of PPSAS 17.

Lawaan The submitted Financial Statements for CY 2017 was

incomplete due to non-inclusion of Statement of Comparison of Budget and Actual Amounts;

The Consolidated Cash and Cash Equivalent of P45,124,630.43 as of December 31, 2017 is not accurate and reliable due to improper recording and reconciliation, a related observation was noted in the 2016 AAR which the municipality failed to implement the audit recommendation cited;

The Financial Liabilities, Loans Payable – Domestic, amounting to P 18,463,599.28 was taken up or recorded in CY 2016 Financial Statements under Current Liabilities. In CY 2017, it was recorded as Non-Current Liabilities, thus, there was no consistency in the recording of Loans Payable-Domestic;

Pre-payment and Deferred Charges of P308,700.00 is uncertain due to the absence of records to support the account and there was no movement from prior years;

Guaranty/Security Deposits Payable of P499,504.30 was taken up as non-current liabilities of which, this should be taken up as a Trust Liabilities in the Statement of Financial Position;

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LGU AUDIT


The Local Disaster Risk and Reduction Management Fund (LDRRMF) amounting to P2,195,812.50 was recorded as Subsidy to Other Funds. This cannot be considered as subsidy to other funds because this is a mandatory 5% allocation in the budget;

Deferred Credits/Unearned Income of P1,209,046.64 is unreliable because this cannot ne validated due to the absence of records; and,

The existence, accuracy and propriety of the PPE and Inventories of P80,315,854.43 and P7,172,314.83, respectively, could not be ascertained due the absence of records and reports of the Municipal Accountant and Treasurer’s Office. Also, audit recommendation of the same observation from the years 2010, 2013, 2014 and 2015 were not implemented by the municipality, thus, a recurring deficiency was noted in CY 2017.

Llorente Unqualified/ Unmodified

Maslog Qualified/ Modified

The existence, completeness and accuracy of the PPE balance of P74,967,230.73 could not be ascertained due to:

a) absence of Report of the Physical Count of PPE (RPCPPE) and Property Cards; and,

b) non-maintenance of PPE Ledger Cards and Real Property Ledger Cards which is in contrary to Sections 119, 120 and 124 of COA Circular totalling P6,592,958.09;

Nine (9) cancelled checks were not submitted as of to date in non-adherence to Section 39 (1) (3) of PD No. 1445, causing doubt on the validity of the transactions; and,

Various disbursement for CY 2017 showed that there were payments made under the General Fund with deficient of lacking documents totalling P7,125,042.86 in non-adherence to COA Circular No. 2012-001 and Section 4(6) of PD No. 1445, thus, causing doubt on the legality/regularity of the transactions.

Maydolong Qualified/ Modified

The existence, completeness and accuracy of the Property, Plant and Equipment (PPE) account balance of P93, 935,033.67 as of December 31, 2017 could not be ascertained due to

a) partial submission of physical inventory report totaling P44,262,268.28 only; and,

b) non-maintenance of Property, Plant and Equipment Ledger Cards, Real Property Cards and other related records/documents contrary to section 124, Volume 1 and Section 13 & 15, Volume 11 of the NGAS Manual for LGU’s.

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LGU AUDIT


Unsupported/undocumented and erroneous recording of loan receivable totaling P11, 381,480.32 cast doubt on the accuracy of the total reported Receivables of P12, 801,015.42 as of year-end, which represents 7.64% of total assets contrary to section 111 of PD 1445 and Paragraphs 27 and 29 (b) of PPSAS 1, hence affecting the fair presentation of the said accounts in the financial statements;

The recorded Cash in Bank-LCCA account amounting to P60,476,672.43 per notes to FS is overstated by a net amount of P3,071,890 due to unreconciled items from prior years that requires adjustment and corrections in the General Ledger, Contrary to Section 74 of P.D 1445 and section 3.3 of COA Circular No. 96-011 dated October 2, 1996, thus the accuracy and reliability of the book balances for Cash-in-bank-LCCA accounts could not be ascertained; and,

Depreciation expenses were not recognized in the books contrary to PAG2 to PAG6 of PPSAS 17, thus, overstating the balances of the Property, Plant & Equipment (PPE) and Government Equity Accounts.

Mercedes Adverse The year-end balance of the Cash in Bank-Local Currency,

Current Account (GF) amounting to P33,442,360.01 could not be ascertained due to absence of subsidiary ledger and Bank Reconciliation Statements;

The existence, occurrence and propriety of the PPE and Inventories of P21,002,780.79 could not be ascertained due to the absence of records and reports. The audit observation is recurring recurring for six years and there was no implementation of the audit recommendation by the municipality;

The existence and occurrence of the balances as of year-end of the Financial Liabilities-Current amounting to P3,018,587.51, Financial Liabilities-Non Current (Loans Payable) of P631,321.38, and Other Payable of P2,656,232.70 cast doubt on the reliability of the amount due to the absence of accounting records;

The LGU incurred an amount of P3,111,411.58 in 2016 for Animal/Zoological Supplies for which there is no corresponding Working Animal/Biological Asset account declared in the Statement of Financial Position, and in CY 2017, there was no expenditures recorded on the account casting doubt on the transaction of prior years; and,

The Statement of Financial Performance is overstated by P64,000.00 due to double posting of Subsidy from Local Government Units.

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Oras Qualified/ Modified

The Cash in Bank, Local Currency, Current Account balance of P22,807,585.11 is unreliable due to the reconciliations between the book and bank balances of the cash in bank accounts were not prepared regularly and correctly resulting in the treatment of four checks totaling P182,982.98 as outstanding checks even if the same were cancelled; and other bank error not treated as reconciling items, thereby affecting the accuracy of the account.

Quinapondan Unqualified/ Unmodified

Salcedo Qualified/ Modified

The inadvertent omission to book-up the unexpended/unobligated balance of the LDRRMF totaling P5,190,954.58 as separate special trust fund in the books of Trust Fund accounts that affect the presentation and disclosure assertion in the financial statements; and,

The doubtful existence, completeness and accuracy of the PPE balances totaling P77,160,732.44, due to non-maintenance of appropriate property ledger cards, stock cards, and other documents at the General Services Office/Municipal Treasurer to be reconciled with the book balances of the Accounting Section.

San Julian Qualified/ Modified

Items of PPE account totalling P11,151,230.87 were not properly valued and measures as the required depreciation and impairment had been continuously omitted thereby affecting the accuracy and presentation of the account in the financial statements.

San Policarpo Qualified/ Modified

The accuracy and reliability of the Cash-in-Bank-Local Currency, Current Account, in the amount of 70,734,925.26 could not be ascertained due to the non-preparation of Month Bank Reconciliation Statement, contrary to Section 74 of PD No. 1445 and COA Circular No. 96-11, thus casting doubt as to the existence and completeness of the balance reported;

The accuracy and existence of the PPE account valued at P55,104,758.86 could not be ascertained due to:

a) incomplete report on the Physical Count of PPE, non-reconciliation of the records between the General Services Office and Accounting Office;

b) the absence of ledger cards and property cards, contrary to COA Circular No 2002-003.

The depreciation method used and the useful lives or depreciation rates used were not disclosed in the financial statements contrary to Paragraph 88 of PPSAS 17.

Sulat Qualified/ Modified

The existence, completeness and accuracy of the PPE balance of P87,706,733.41 could not be ascertained due to:

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a) absence of complete and properly accomplished Report of the Physical Count of PPE (RPCPPE) and Property Cards; and,

b) non-maintenance of complete and properly accomplished PPE Ledger Cards and Real Property Ledger Cards which is contrary to Sections 119, 120 and 124 of COA Circular No. 2002-03.

Taft Qualified/ Modified

The erroneous recording of the collection and remittance for the special education fund resulted in understatement of the Special Education Tax Revenue by P14,248.68 that affects its proper valuation and fair presentation;

The inadvertent omission to book-up the unexpended/unobligated balance of the LDRRMF totaling P4,099,956.88, as Special Trust Fund using “Trust Liability-DRRMF” account in the Trust Fund, thereby, affecting the presentation and disclosure assertions; and,

The doubtful existence, completeness and accuracy of the PPE account balances totaling P61,227,379.75, due to non-maintenance of appropriate property ledger card, stock cards and other documents at the General Services Office/Municipal Treasurer to be reconciled with the book balances at the Accounting Section.

Leyte Qualified/ Modified

The bank reconciliation statements for eleven bank accounts with a carrying amount of P3.51Million were not prepared and reconciliation of 31 other bank accounts were not updated, resulting in the inability to account for the disparity totaling P73.53Million between the balance reported in the combined Statement of Financial Position and the balance confirmed by servicing banks as at December 31, 2017. Other deficiencies in the accounting and reporting of the Cash in Bank account were likewise noted which affected the accuracy and reliability of the account; and,

The completeness of the accounts Inventories and the Property, Plant and Equipment with year-end balances of P266.13Million and P4.15Billion, respectively, and the validity and reliability of 52 subsidiary ledger accounts with material balances which were "For Recon" status could not be ascertained due to the Province's non-implementation of our prior years' audit recommendations as cited in Part III of this report.

Cities:

Baybay City Qualified/ Modified

Total assets was understated by P40 million or 2% due to uncorrected errors in the Cash in Bank account and unrecorded infrastructure assets; total liabilities was understated by P3 million or .77% due to erroneous recording of Payables and absence of valid claimants, and; total expenses was overstated by P37 million or 8% due to provision of depreciation on undelivered equipment and misclassified infrastructure assets.

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Ormoc City Qualified/ Modified

Properties valued at P306 million, or 8% of the Property, Plant and Equipment (PPE) account balance as of December 31, 2017 remain unconfirmed due to unimplemented audit recommendations for the past years to prepare the annual Report on the Physical Count of PPEs and reconcile the same with accounting and property records. No other documents were available to ascertain what properties comprise the amount.

Tacloban City Qualified/ Modified

The Due from Other Funds, Due from Special Account, and Subsidy From General Fund Proper/Other Special Accounts do not reconcile with its reciprocal accounts, namely: Due To Other Funds, Due to Special Account, and Subsidy To General Fund Proper/Other Special Accounts, showing a variance of P24,670,020.40, P33,579,116.14, and P122,200.00, respectively, thus rendering the intra-agency account balances at year-end unreliable;

Disbursement Vouchers (DVs) and supporting documents for the period August to December 2017 were not submitted to COA for audit, hence accuracy, validity and reliability of recorded disbursements totalling P797.08 Million could not be ascertained. Moreover, Special Accounts in the General Fund were still not maintained for the economic enterprises managed by the city government, thus, operating performance and viability of the enterprise could not be ascertained;

Special Accounts in the General Fund were still not maintained for the economic enterprises managed by the city government, thus, operating performance and viability of the enterprise could not be ascertained; and,

The accuracy of the Property, Plant and Equipment account balance at year-end could not be ascertained due to:

a) unadjusted prior years variance between the property ledger cards of the Accounting Office and property cards of the General Services Office amounting to P272.79 Million; and,

b) unsubstantiated derecognition of property and equipment totaling P146.59 Million, representing the cost of destruction/loss to properties brought by Super typhoon Yolanda.

Municipalities:

Abuyog Qualified/ Modified

The existence and accuracy of Property, Plant and Equipment (PPE) accounts with carrying value of P422,043,728.76 as of December 31, 2017 could not be ascertained due to the unreconciled difference of P521,721,129.30 between accounting records and the submitted Report on the Physical Count of Property, Plant and Equipment (RPCPPE) by the GSO and Inventory Committee. The PPEs comprise 61.70% of the total assets of the LGU.

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LGU AUDIT


Alangalang Qualified/ Modified

The completeness and accuracy of the Property, Plant and Equipment account balance of P 93,063,001.65 (net of Construction in Progress) could not be ascertained due to the non-preparation of a lapsing schedule for the computation of the depreciation for each depreciable assets and absence of physical inventory report. The non-conduct of physical inventory was a finding in CY 2009, which up to the present management was not able to submit a Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Albuera Qualified/

Modified Understatement of the Property, Plant and Equipment

account and the Government Equity account by P10.8 million and P20.1 million, respectively, since disbursements in the Trust Fund of the LGU were not correctly recorded and the Statement of Financial Performance for the year ended December 31, 2017 for Trust Fund was not prepared.

The Government Equity account balance was not fairly presented since inventories worth P6,317,527.55 procured during the year were recorded as outright expenses without proper accountability of its issuances while the Inventories account balance of P809,714.10 is misclassified since the amount pertain to office supplies and equipment already issued in prior years.

Almeria Qualified/

Modified No Report of Physical Count of PPE for CY2017 was

submitted, the related property and accounting records were not properly maintained and depreciation were not fully provided in all properties, hence, reliability and accuracy of the Property, Plant and Equipment account carrying balance of P33 million cannot be confirmed.

Babatngon Qualified/

Modified The completeness and accuracy of the Property, Plant and

Equipment account balance of P60,578,188.12 (net of Construction in Progress) could not be ascertained due to the absence of Property/Equipment Card for each class of Property, Plant and Equipment and the non-preparation of a lapsing schedule for the computation of the depreciation for each depreciable assets.

Barugo Qualified/

Modified The existence of the Property, Plant and Equipment account

amounting to P91,353,641.46 at year-end could not be established due to failure of management to conduct physical inventory, and their accuracy could not be ascertained due to absence of ledger cards and property cards;

Expenditures for the major repairs/rehabilitation and

construction of infrastructure assets amounting to P4,270,907.89 were not capitalized or recorded as Property, Plant and Equipment (PPE) account but erroneously charged to Repairs and Maintenance account, thereby understating the PPE account and overstating the Repairs and Maintenance account by the same amount;

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Bato Qualified/ Modified

The accuracy of the carrying balance of the Property, Plant and Equipment (PPE) at P183 million cannot be confirmed since variances between the book balances and the latest Report on the Physical Count of Property, Plant and Equipment (RPCPPE) were not resolved, property and accounting records remain unreconciled and inventory items totaling P1.1 million were recorded as PPE; and,

Receivables from rentals and real property taxes totaling P6,085,543.36 were not recorded in the books which understated the assets of the Municipality.



a) Property Plant and Equipment (PPE) account with carrying balance of P66 million due to lacking vital and valuable data in the Report on the Physical Count of PPE which hindered its reconciliation with accounting records while PPE Ledger Cards and Property Cards to support the balance were not maintained;

b) Intra-agency Payables has an unknown variance of P17 million instead of zero, and;

c) Receivables account excludes Real Property Tax collectibles for several years due to non-accrual of the same which resulted to a negative balance of P188,766.66 as of December 31, 2017.

Burauen Qualified/ Modified

The Property, Plant and Equipment account totaling P231,942,618.93 is overstated by an undetermined amount due to failure to provide an allowance for depreciation on all of the Municipality’s depreciable assets totaling P46,509,251.36;

Fund transfer to Burauen Comprehensive National High School totaling P900,000.00 was inadvertently debited to Subsidy to National Government Agencies account and Other Maintenance and Operating Expenses account instead of Due from NGAs account;

The accuracy of the Cash in Local Treasury balance of P506,822.20 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;

The accuracy of the Property, Plant and Equipment account amounting to P157,474,606.03 in CY 2015, which was increased to P231,942,618.93 in CY 2017 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; and,

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Inventories and breeding stocks purchased in CY 2016 amounting to P2,145,400.00 were inadvertently recorded under the expense account, instead of the appropriate inventory account, and no adjustment was made in the books of accounts to date.

Cabucgayan

Adverse The assets of the Municipality was understated by a net amount of P11.6 million or 11.3% of the year-end total due to

a) due to unrecorded donated Municipal Civic Center amounting to P14 million,

b) unrecorded receivables from water service fees of P2.2 million,

c) unrecorded long outstanding stale checks of P193,521.89 and the uncorrected book adjustments to reduce the Cash in Bank balance by P4.8 million.

d) the misstatements exclude the unrecorded 116 checks which amount cannot be established due to unsubmitted vouchers, reports and paid checks.

Liabilities were understated by P6.6 million or 14% of the year-end total due to unrecorded fund transfers from National Government Agencies totaling to P4.3 million and the corresponding deferred revenues from water services fees totaling to P2.2 million.

The existence and reliability of the Property, Plant and Equipment (PPE) account at P16 million as of December 31, 2017 were not confirmed since the physical inventory was conducted on only 3% of the total PPE and the accounting and property records were not available to support the reported balance. No alternative procedures could be undertaken to ascertain the composition of the account.

Caibiran

Qualified/ Modified

The accuracy of the Property, Plant and Equipment account with carrying value of P 66 million as of December 31, 2017 cannot be confirmed because

a) the Report on Physical Count of Property Plant and Equipment (RCPPE) was not submitted; and,

b) the related property and accounting records were not maintained and depreciation was not provided in all properties.

Cash in Bank account balance of P60 million is inaccurate due to unadjusted stale checks totaling P888,079.35 and errors/omissions totaling P24,387.23.

Calubian Qualified/ Modified

Erroneous recording of procured materials costing P238,000.00 for a project funded by DA-BFAR RO8 causing understatement of the Construction-in-Progress-Other Structures account by the same amount; and,

The Municipality still failed to reconcile its accounting and property records on assets procured in CY 2015 and prior years with book value of P70,985,294.48 thus, reliability of 39% of the Property, Plant and Equipment account balance as of December 31, 2017 cannot be confirmed.

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Capoocan Qualified/ Modified

Fund transfer to other Government/Implementing Agencies, Cash Advances and Other Receivables totaling P1,111.17, P199,911.41 and P173,281.76, respectively remained outstanding and dormant for over ten (10) years, either due to absence of records and schedules or deceased accountable officer but with no request for authority to write-off submitted to COA;

The existence of the Property, Plant and Equipment account amounting to P90,268,784.07 at year-end could not be established due to failure of management to conduct physical inventory, and their accuracy could not be ascertained due to absence of ledger cards and property cards; and,

The accuracy of the balances of Supplies and Materials Expenses and Inventories accounts amounting to P4,380,628.75 and zero (0), respectively, could not be ascertained due to the recording as direct expense of purchased inventories and failure to conduct a year-end physical count of inventories on hand, thus rendering doubtful the validity of the account balance.

Carigara Qualified/ Modified

Road Networks amounting P15,121,464.26 that were recorded in the Registry of Public Infrastructure were not yet transferred/recorded in the books of accounts, and completed road infrastructure projects totaling P7,793,602.46 were inadvertently closed to Government Equity account, thereby understating the Property, Plant and Equipment account balance at year-end by a total amount of P22,915,066.72.

The existence of Cash in Bank – Local Currency, Current Accounts with a combined balance of P179,712,473.07 as of December 31, 2017 could not be established, due to the non-preparation of bank reconciliation statements.

The Due from Other Funds account does not reconcile with the balance of Due to Other Funds with a difference of P1,299,981.08 on the reciprocal accounts.

Culaba Qualified/ Modified

The accuracy of the Property, Plant and Equipment account with carrying value of P65,000,444.60 as of December 31, 2017 cannot be confirmed because the prescribed Report on the Physical Count of Property, Plant and Equipment (RPCPPE) for CY 2017 was not submitted, the related property and accounting records were not maintained, some PPE accounts were inaccurately presented in the Financial Statements and depreciation was not provided in some properties.

Dagami Qualified/ Modified

The accuracy and reliability of the reported Property, Plant and Equipment (PPE) with a carrying amount of Php128,547,435.16 could not be ascertained due to the continued failure of concerned personnel to reconcile the variances between the Report on the Physical Count of Property, Plant & Equipment and all accounting records.

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Disbursements for the rehabilitation of bridge embankment with a total project cost amounting to P239,110.00 was not considered as a capital expenditure properly increasing the recorded amounts of the PPE in the books of accounts and were treated as outright expenses.

The review of the financial statements and its accompanying Notes disclosed a variance in the amount appearing for Service and Business Income between the Combined Statement of Financial Performance and Note 15.

Dulag Qualified/ Modified

The accuracy of the Cash in Bank account cannot be ascertained as there are book reconciling items totaling P17,718,981.39 that were not yet recorded, and out of such amount, P4,280,591.30 needs to be confirmed as there are no available documents to support it;

The year-end balances of Receivables from Real Property Tax (RPT) and Special Education Tax (SET) were understated by P16,653,254.22 and P18,303,253.34, respectively, as compared to the year-end certified report on Real Property Owners’ Tax Delinquency Listing;

The year-end balances of Due to NGAs and Other Payables accounts are overstated by P1,536,101.76 and P3,036,971.71, respectively, as such amounts were labeled “for reconciliation” and are without supporting documents; and,

Ownership on 11 parcels of land measuring 53,559.49 square meters (sq.m.) with a total cost of P3,557,006.03 are still in doubt as such lands are without Certificates of Title, and were only supported by Tax Declaration.

Hilongos Qualified/

Modified The existence and accuracy of Inventories totaling

P3,713,293.90 cannot be fully relied upon due to unreported issuances, failure to conduct physical count, absence of perpetual inventory records and incorrect accounting treatment of items costing below P15,000.00; and,

Properties valued at P303 million in the Property, Plant and Equipment (PPE) account remain unconfirmed due to the unimplemented audit recommendations in CY 2016 contained in Part III of this report, to prepare a complete annual Report on the Physical Count of PPEs and reconcile the same with accounting and property records.

Hindang Qualified The existence, accuracy and reliability of the Property, Plant

and Equipment (PPE) account with a total acquisition cost of P161,086,474.40 cannot be ascertained due to non-submission of inventory report of infrastructure assets, inclusion of assets that should have not been accounted as PPE and incomplete disposal of unserviceable properties leaving an unreconciled difference of P63,659,476.13.

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LGU AUDIT


Inopacan Qualified/ Modified

The accuracy of Property, Plant and Equipment (PPE) accounts with a book value of P96 million as of December 31, 2017 could not be ascertained due to the difference of P60.7 million between the physical inventory report and accounting records arising from incomplete physical count and the unrecorded donated office equipment and furniture and fixtures from the Department of Finance; and,

The Receivable account was overstated by P 6 million due to erroneous recording of prior years’ unexpended Local Disaster Risk Reduction Management Fund (LDRRMF).

Isabel Adverse There were pervasive and material misstatements that affected the yearend balances of assets and liabilities by 6.5% and 16% respectively and the understatement of both expenses and revenues by 17% and 4.3% respectively; and,

The unreconciled balances and incomplete physical count of properties in which the audit recommendations has not been implemented since CY 2011 continued to adversely affect the accuracy of Property, Plant and Equipment account that comprise 81% of the total assets.

Jaro Qualified The accuracy and reliability of the reported PPE with a carrying amount of P237,412.86 could not be ascertained due to the failure to submit a report on the physical count thereof;

Disbursements for major repairs and maintenance of projects under Trust Fund RAY II amounting to P543,450.00 were not considered as capital expenditures properly increasing the recorded amounts of the PPE in the books of accounts and were treated as outright expenses; and,

The financial statements and its accompanying Notes have discrepancies totaling P7,731,555.69 in the balances of Receivables and MOOE (Notes 5 & 17, respectively). There were also no explanatory notes and additional information provided on the significant balances for the asset accounts Prepayment and Deferred Charges, and Investments, as well as for the liability account Intra-Agency Payables.

Javier Qualified/ Modified

The existence and accuracy of Property, Plant and Equipment (PPE) accounts with carrying value of P338 million as of December 31, 2017 could not be ascertained due to the unreconciled difference of P94,678,851.48 between accounting records and the submitted Report on the Physical Count of Property, Plant and Equipment (RPCPPE) by the GSO and Inventory Committee. The PPEs comprise 57.02% of the total assets of the LGU.

Julita Qualified/ Modified

The accuracy of the carrying amount of the Road Networks account totaling P 42,452,932.97 could not be ascertained and the existence could not be established due to failure of management to:

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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;

c) keep a Local Road Network Property Card;

d) render a Report on Local Road Network; and

e) non-provision of depreciation and impairment loss.

The accuracy and existence of Property, Plant and Equipment (PPE) accounts amounting to P60,796,713.54 in CY 2015, which was increased to P 157,955,896.40 in CY 2017 could not be ascertained due to the non-conduct of physical inventory and non-submission of reports.

Kananga Qualified/ Modified

The Due to Other NGAs account is overstated by P11.6 million or 2.26% of the total liabilities as of December 31, 2017 due to non-recording of the utilization of funds received for the implementation of the ARCP II project of the Municipality;

Properties valued at P206 million, or 19% of the total assets as of December 31, 2017, remained unconfirmed due to the unimplemented audit recommendations for the past years to prepare a complete annual Report on the Physical Count of PPEs and reconcile the same with accounting and property records; and,

Depreciation were not provided on various infrastructure assets totaling P53 million from the time that the assets were recorded.

Kawayan

Qualified/ Modified

The reliability and accuracy of the Property, Plant and Equipment account with a carrying value of P92 million as of December 31, 2017 cannot be confirmed because

a) the data in the Report on Physical Count of Property Plant and Equipment (RCPPE) were incomplete;

b) the related property and accounting records were not maintained; and,

c) depreciation was not provided in all properties.

Cash in Bank – Local Currency Current Account (LCCA) account balance of P39,364,514.19 is inaccurate due to unrecorded items for adjustment aggregating P912,253.28 and stale checks totaling P70,915.00.

La Paz Qualified/ Modified

The accuracy of the Property, Plant and Equipment accounts with a carrying amount of P181,392,506.49 cannot be ascertained and its existence could not be established due to failure of management to conduct and prepare Report on the Physical Count of Property, Plant and Equipment (RPCPPE), and properties totaling P575,132.21 were not depreciated;

329

LGU AUDIT


Ownership on 23 parcels of land measuring 121,697 square meters (sq.m.) with a total appraised value of P24,838,385.09 are still in doubt as such lands are without Certificate of Title, and were only supported by tax declaration;

The Land account balance at year-end is understated by P10,501,216.69 which is the equivalent amount of the 12 parcels of land measuring 56,723 square meters (sq.m.) that were not yet recorded in the books of accounts; and

Unliquidated cash advances, and other receivables totaling P113,105.40 and P60,000.00, respectively, remained outstanding and dormant for over ten (10) years and no request to write-off was filed, thus, affecting the fair presentation of the accounts.

Leyte Qualified/

Modified The Property, Plant and Equipment account was not properly

presented since completed projects totaling P29 million remained as Construction in Progress and were not reclassified to the appropriate Property, Plant and Equipment accounts;

Cash in Bank is inaccurate and unreliable due to unrecorded disbursements, unadjusted reconciling items and unaccounted discrepancies between book and bank balances; and,

The Due from Other Funds account totalling P14 million is unsubstantiated and has no corresponding amount in the reciprocal Due to Other Funds accounts.

MacArthur Qualified/

Modified The accuracy of the Inventories, as well as Property, Plant

and Equipment accounts with a carrying amounts at year-end of P658,240.73 and P78,239,116.29, respectively, cannot be ascertained and their existence could not be established due to failure of management to conduct and prepare Report on Physical Count of Inventories (RPCI) as well as Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

Fund transfer received from DILG totaling P12,946,000.00

was inadvertently accounted for as Share from Internal Revenue Collections, instead of Due to NGAs account, thus overstating the revenue account and understating the trust liability account – Due to NGAs;

Fund transfer to other Government/Implementing Agencies,

unliquidated cash advances, and other receivables totaling P1,284,759.48, P577,791.22, and P10,750.00, respectively, remained outstanding and dormant for over ten (10) years and no request to write-off was filed, thus, affecting the fair presentation of the accounts; and

330

LGU AUDIT


Ownership on six parcels of land measuring 52,793 square meters (sq.m.) with a total book value of P3,269,067.69 are still in doubt as such lands are without Certificate of Title, and were only supported by tax declaration.

Mahaplag Qualified/ Modified

The accuracy and reliability of Property, Plant and Equipment (PPE) accounts with a carrying value of P178,660,026.53 as of December 31, 2017 could not be ascertained due to unreconciled difference of P118,438,260.62 between the accounting and property records while the Receivable and Equity accounts are both understated due to the non-setting up and non-recognition of Real Property Tax Receivable, Special Education Tax Receivable and the corresponding Deferred Income account for Calendar Years 2014 to 2017.

Maripipi No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Matag-ob Qualified/ Modified

The Property, Plant and Equipment account balance totalling P69 million which comprise 44.53% of the total assets of the LGU was not reconciled with the submitted Report on Physical Count of PPE; and,

The yearend balance of the Cash in Bank account was overstated by P1.4 million due to unrecorded check disbursements in current and prior years which correspondingly misstated the related asset, expense and liabilities accounts

Matalom Qualified/

Modified The existence, accuracy and reliability of the Property, Plant

and Equipment (PPE) account with a total carrying value of P150,314,009.11 cannot be ascertained because the variances between the book balances and the latest Report on the Physical Count of Property, Plant and Equipment (RPCPPE) were not resolved, property and accounting records remain unreconciled while inventory and unserviceable items were included as PPE.

Mayorga Qualified/

Modified The accuracy of the Property, Plant and Equipment accounts

with a carrying amount of P108,908,735.97 cannot be ascertained and its existence could not be established due to failure of management to conduct and prepare Report on the Physical Count of Property, Plant and Equipment (RPCPPE), and properties totaling P35,447,375.80 were not depreciated;

Ownership on eight parcels of land measuring 59,426 square meters (sq.m.) with a total book value of P2,986,870.05 are still in doubt as such lands are without Certificate of Title, and were only supported by tax declaration; and

The balance of Due to Other Funds account in the amount of P95,559.81 is overstated by P82,809.25 as such should have been credited to the Due to NGA account which is also understated by the same amount.

331

LGU AUDIT


Merida Qualified/ Modified

The accuracy of the Cash in Bank - Local Currency Current Account balance of P116,492,559.02 could not be ascertained due to conflicting balances per books, bank and cashbook with unidentified variances; and,

Properties totaling P12,634,791.12 representing 14% of the total Property, Plant and Equipment account balance were not accounted during the physical count while subsidiary and property records were not maintained.

Naval Qualified/ Modified

The Property, Plant and Equipment (PPE) account was overstated by P4,491,064.00 due to the eleven (11) Infrastructure Projects which were not derecognized in the LGU books despite its having been transferred to the recipient Barangays, and,

Infrastructure Assets in the Property, Plant and Equipment account remained unreliable due to unimplemented CY 2016 recommendations to prepare the Report on the Physical Count of Local Road Network (RPCLRN) and provide depreciation on said properties.

Palo Qualified/ Modified

The cashbooks maintained by the Municipal Treasurer with a combined balance at year-end for all funds totaling P562,054.90 do not reconcile with the combined balance per general ledger of the Cash-Local Treasury account totaling P1,063,487.27 for the same period;

Funds released in CY2017 to barangays totaling P1,300,000.00 for the implementation of various development projects were erroneously recorded as Donations, rather than receivables under Due from LGU account, thereby affecting the fair presentation of the related asset and liability accounts in the financial statements; and,

The accuracy and propriety of the recorded check disbursements aggregating P243,523.22 could not be ascertained due to the absence of the covering Disbursement Vouchers (DVs) with its supporting documents.

Palompon Qualified/ Modified

Overstatement of Cash in Bank account by P1,110,239.56 with a corresponding understatement of the related expenses resulting from unrecorded paid checks disbursements.

The Property, Plant and Equipment account was overstated by P2,507,737.36 since properties disposed through sale were not derecognized in the books of the LGU.

Pastrana Disclaimer The accuracy and propriety of the recorded check disbursements totalling P501,944.39 count not be ascertained due to the absence of the covering Disbursement Vouchers, together with its supporting documents.

332

LGU AUDIT


Property, Plant and Equipment (PPE) account has unreconciled balance of P30,012,700.87 versus Report of Physical Count of Property, Plant and Equipment.

Cash in bank account and the total liabilities as of the reporting date in understated P2,460,794.20 due to the erroneous recording of the unreleased checks as outstanding checks as of December 31, 2017.


The accuracy of the Property, Plant and Equipment (PPE) account totaling P199,907,462.67 could not be confirmed since the Report on the Physical Count of Property, Plant & Equipment (RPCPPE) were not reconciled with accounting records and property records were not maintained.

Receivables were understated by P910,000.00 due to erroneous recording of funds released to barangays as liabilities instead of assets.



Equipment account balance of P 69,437,967.79 (net of Construction in Progress) could not be ascertained due to the absence of physical inventory report. The non-conduct of physical inventory was a finding in CY 2014, which up to the present management was not able to submit a Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Santa Fe Qualified/


Equipment account balance of P 70,440,118.23 (net of Construction in Progress) could not be ascertained due to the non-preparation of a lapsing schedule for the computation of the depreciation for each depreciable assets and absence of physical inventory report. The non-conduct of physical inventory was a finding in CY 2009, which up to the present management was not able to submit a Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Tabango Qualified/ Modified

Errors and omissions in recording transactions which understated some assets and overstated expense accounts; and,

The non-implementation of prior year’s audit recommendations on conduct of thorough physical count of Property, Plant & Equipment, thus, the existence and physical condition of the properties with a total amount of P107,949,356.25 as of December 31,2015 cannot be ascertained.

Tabontabon Qualified/

Modified The continued failure to properly reconcile and account for

discrepancies between the report on the physical count of Property Plant and Equipment and the balances recorded in the books of accounts which had a combined net value of Php29,037,800.97 as at December 31, 2017 had not yet been resolved or rectified.

333

LGU AUDIT


Tanauan Qualified/ Modified

Cashbooks maintained by the Municipal Treasurer with a combined balance a year-end for all fund totalling P340,46.09 do not reconcile with the combined balance per general ledger of the Cash Treasury Account totalling P1,478,813.78 for the same period and the two hundred fifteen (215) equipment donated by local and foreign donors were not taken up in the books of account and the same were not disclosed in the Notes to Combined Financial Statements; and,

Unutilized balances of QRF and DRRMF-MOOE for Pre-Disaster Activities amounting to P1,906,838.05 and P708,926.83, respectively of a total of P2,615,764.88 were not transferred to a Special Trust Fund in the Trust Fund books resulted in the understatement of account “Subsidy to Other Funds” and overstating account “government Equity, in the books of General Fund while understating the account “Trust Liabilities – DRRMF” in the Trust Fund books by the same amount.

Tolosa Disclaimer Subsidiary ledgers for all accounts were not maintained which precluded the audit team from conducting review and analysis of the details composing the control accounts in the general ledger;

Disbursements in CY 2016 totaling P2,697,144.98 were still not recorded in the books;

The accuracy of the Cash-Local Treasury account as at December 31, 2016 totaling P233,781.13 which increased to P281,194.55 in CY 2017 cannot be ascertained due to various variances and various errors noted between the books of accounts and cashbook which remained uncorrected to date;

The accuracy and completeness of the inventories in CY 2016 totaling P1,208,442.55 which increased to P3,748,936.65 in CY 2017 cannot be ascertained due to management's continued failure to maintain inventory records and reports; and

The accuracy and existence of the Proprty, Plant and Equipment (PPE) totaling P57,835,867.64 which increased to P129,056,077.55 in CY 2017 cannot be ascertained due to management's continued failure to conduct physical inventory of their properties and to maintain PPE Ledger Cards and Property Cards. The amount represents 72.78% of the total assets in CY 2017 amounting to P177,312,534.76.

Tunga Qualified/ Modified

The existence of the Property, Plant and Equipment (PPE) account amounting to P54,029,035.69 at year-end could not be established due to failure of management to conduct physical inventory, and their accuracy could not be ascertained due to absence of ledger cards and property cards; and,

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LGU AUDIT


The Due to BIR, Due to GSIS, Due to Pag-IBIG, and Due to Philhealth Inter-agency Payable accounts under the General Fund have abnormal or negative balances totaling P690,883.87 as of December 31, 2017. Their accuracy could not be validated due to absence of subsidiary ledgers and other relevant records, thereby casting doubt on the reliability and propriety of the accounts as presented in the financial statements.

Villaba Qualified/ Modified

Unrecorded donated equipment and medical, dental and laboratory supplies totaling P559,443.13 which understated the balances of the related asset and income accounts; and,

The prior year’s audit recommendation to reconcile accounting and property records remain unimplemented thus, the accuracy of the Property, Plant & Equipment account balance of P105 million as of December 31, 2017 cannot be ascertained.

Northern Samar Qualified/ Modified

The correctness of the Cash in Bank Account-LCCA balance of P1,602,651,131.63 is doubtful due to the failure of recording the reconciling items in the amount of P12,434,072.49 and non-restoration to cash of stale checks in the amount of P46,796.00;

Trust Liabilities-Disaster Risk Reduction and Management Fund account is overstated by P84,957,540.06 due to erroneous recognition of capital outlay of the General Fund, double recording of CY 2016 unexpended balance and non-reversion of CY 2012 unexpended balance; and,

The effect on the financial statement of the cash advances amounting to P8,210,814.89 remained unliquidated during the year.

Purchases of drugs and medicines/medical, dental and laboratory supplies in the amount of P910,596.00 and P7,250,951.00, respectively, were outrightly expended instead of recognizing an inventory account.

Municipalities:

Allen Disclaimer The accuracy, reliability and correctness of Cash in Bank-LCCA balance of P6,545,545.77 could not be fully ascertained due to non-preparation and submission of bank reconciliation statements for the thirteen (13) bank accounts maintained by the LGU which resulted to overdraft of (P312,391.78) and unreconciled book and bank balances with a total difference of P2,328,595.38;

Unreliable consolidated receivable balance totalling P81,999,920.99 due to (a) non-collection of long past due Real Property Tax and Special Education Tax Receivable accounts in the total amount of P73,362,546.51which remained outstanding and uncollected for more than twenty (20) years;

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LGU AUDIT


Long outstanding and unliquidated expended Cash Advances to Officers and Employees aged over one year to more than ten years amounting to P834,889.55;

Unsubstantiated and dormant Due from NGAs and Other

Receivable accounts amounting to P152,285.60 remained uncollected for more than seven (7) years;

Existence and Accuracy of the balances of the Inventory Account as of year-end in the total amount of P1,587,555.00 is unreliable due to absence of accounting records to verify the authenticity of the amounts and the failure of the Property Custodian to prepare and submit the Summary of Supplies and Materials Issued (SSMI) to the accountant;

Various deficiencies noted on the accounting and reportorial requirements of the recorded Local Road Networks Construction and Maintenance System amounting to P22,551,522.77 of the LGU;

Unreliable/doubtful on the existence and accuracy of the balances of the Property, Plant and Equipment accounts amounting to P154,698,589.68, as of December 31, 2017, due to the continued failure of LGUs to conduct the physical inventory and prepare/submit the Report on the Physical Count of Property, Plant & Equipment (RPCPPE);

Unsubstantiated and unreconciled beginning balance of the General Ledger of several Property, Plant & Equipment (PPE) amounting to P24,664,778.18 in the books of account due to the absence of the details comprising the account and non-transfer or registration of the ownership of the five (5) lots amounting to P1,313,076.71 in the name of the municipality;

The personal services (PS) and Maintenance and Other Operating Expenses (MOOE) of the LGU for CY 2017 exceeded the appropriation by P1,248,064.60, and P21,170,324.98 thus, funds of the government were misused; and,

Unsubstantiated donations and Other Expenses account amounting to P28,854,803.37 and P34,513,970.77, respectively due to the absence of General and Subsidiary Ledger.

Biri Qualified/

Modified The balance per Bank Statement recorded by the Accountant

in the BRS for two accounts with LBP differ from the bank balance confirmed by the bank by a net amount of P1,192,147.27 thus, the accuracy of Cash in Bank account presented in the statement of Financial Position as of December 31, 2017 in the total amount of P44,000,012.51 is doubtful;

336

LGU AUDIT


The Municipal Treasurer and Accountant did not reconcile their book balances for cash collections in local treasury at least on a quarterly basis, resulting in unreconciled balance of P148,369.82 between the Cash in Books and Accounting Records, thus, the accuracy of the balance of Cash Local Treasury account in the financial statements in the total amount of P161,850.89 is unreliable; and,

Due to failure of the Inventory Committee to conduct physical count of Property, Plant & Equipment (PPE), the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) on depreciable assets prepared by the Property Officer, with a total value of P2,231,570.00 was incomplete and did not reconcile with the accounting records, thus, the said assets under PPE account with a total value of P85,300,979.82 as of December 31, 2017 is unreliable.

Bobon Qualified/

Modified The Cash in Bank – LCCA balances Account amounting to

P41,825,465.06 is doubtful due to:

a) non-existing dormant bank account with reported balance of P36,287.65;

b) non-adjustment/cancellation of staled checks totaling P132,569.93;

c) delayed preparation and submission of Bank Reconciliation Statements; and

d) discrepancy of P453,606.00 between the reported book balance and per bank confirmation.

The consolidated balance of the receivable account totaling P90,367,330.55 was inaccurate due to:

a) unsubstantiated/undocumented account receivable and outstanding and dormant Inter and Intra Agency fund transfer aged from four (4) years to over fifteen (15) years totaling P33,020,825.07; and,

b) Unliquidated Advances and dormant Other Receivable accounts which are outstanding and uncollected ranging from two (2) months to over five (5) years in the total amount of P54,674,762.15.

The existence and accuracy of the balance of the Inventory accounts amounting to P5,353,4292.50 as of year-end, is unrealiable due to:

a) issued/consumed and dispensed inventories still carried in the books of accounts totaling P4,353,792.00; and,

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LGU AUDIT


b) adjustments of P2,781,386.85 on inventory accounts without the corresponding Summary of Supplies and Materials Issued (SSMI) and the existence and accuracy of the balance of the Property, Plant and Equipment accounts amounting to P128,837,846.97, as of December 31, 2017, is unreliable due to the continued failure of the LGU to conduct the physical inventory and prepare/submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Capul Qualified/ Modified

The accuracy and reliability of the Property, Plant & Equipment totaling P86,016,621.54 was not established due to the failure to conduct physical inventory and to maintain property cards.

Property, Plant and Equipment amounting to P22,948,902.71 were not properly depreciated.

Advances for Payroll and Advances for Officers and Employees amounting to P103,558,69 and P121,393.52 respectively, were not liquidated at the end of the year.

Accounts Payable amounting to P5,121,967.86 were recorded although no services rendered yet by the contractor which resulted to overstatement of the account as well as the corresponding expense account.

Catarman Qualified/ Modified

The continued failure of the municipal accountant to prepare and submit the bank reconciliation statements with the paid checks and original copies of the debit and credit memos of all depository accounts of the LGU within the prescribed period thus, the accuracy of the Cash in Bank balance totaling P60,365,395.16 was not ascertained; and,

Failure of the Accounting Office to record the thirty eight lots (38) with a fair market value of P362,808,947.42 all with Tax Declaration in the name of LGU-Catarman while the seven (7) lots that were booked up in the amount of P3,930,567.28 are not registered in the name of the Municipality which both conditions has effect of understating the reported balance at year-end.

Catubig Qualified/

Modified Cash in Bank – LCCA in the amount of P161,179,640.72 as

of December 31, 2017 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;

The reliability, accuracy and existence of the Property, Plant & Equipment (PPE) with a net book value of P65,459,038.30 as of December 31, 2017 could not be relied upon due to inability of management to create the Inventory Committee to conduct an annual physical count of all properties of the Municipality for Cy 2017;

338

LGU AUDIT


The carrying amount of Due to NGAs of P128,342,705.47 under the Intra-Agency Liabilities does not reconcile with the total amount shown in the subsidiary records totaling P147,009,407.09 thus, the difference of P18,666,701.62;

completed projects funded by different National Government Agencies in the total amount of P5,789,176.00 for infrastructure component and P1,750,000.00 for Biological Asset were still carried in the books as Due to NGAs in the Trust Fund instead of transferring to the General Fund and recognizing the asset and equity account, thus overstating the liability and understating the equity account by a total of P7,539,176.00.

Gamay Qualified/ Modified

Depreciable assets under PPE and Investment Property accounts valued at P71,061,569.75 and P25,699,978.42 respectively as of December 31,2017, is unreliable because the total value of P24,000,781.73 per Report on the Physical Count of Property, Plant & Equipment (RPCPPE) does not reconcile with the accounting records of P96,761,548.17.

162 listed PPEs has no value assigned in the report, and no physical count was conducted on the Buildings and Structures, and Investment Property;

Savings account deposited with DBP with a balance of P384,254.73 as of December 31, 2017 was not taken up in the books and financial statements under Cash in Bank – LCCA. While the total LCCA deposits recorded in the books is lesser by P10,000.00 than the total amount provided by the bank, thus, the accuracy of Cash in Bank account is doubtful.

Laoang Qualified/ Modified

The reliability, accuracy and existence of the Property, Plant & Equipment with a net book value of P184,464,901.65 remained doubtful due to the continued failure to conduct physical inventory and absence of property records;

The Municipality’s Intra-Agency accounts, Due from Other Funds and Die to Other Funds of P13,219,329.37 and P14,943,861.5 respectively in the PPSAS Combined Statement of Financial Position as of December 31, 2017, has unreconciled difference of P1,724,532.28 which could not be traced, thus affecting the reliability of the accounts;

Validity and Correctness of the claims against the Municipality amounting to P3,404,871,.74 could not be established due to the absence of aging schedule and details of claims and absence of valid claims/contracts; and,

The LGUs Other Payables account balance of P74,602,309.98 as of December 31, 2017 under non-current liabilities is overstated by P72,358,802.14 due to inclusion of Fund Transfers received from National Government Agencies and other receipts, instead of recording the transactions under Trust Liability and other appropriate accounts.

339

LGU AUDIT


Lapinig Qualified/ Modified

The Cash in Bank -Local Currency, Current Account balance of P53,830,463.76 is unreliable due to failure to prepare the bank reconciliation statements for the four (4) bank accounts maintained by the LGU, lack of adequate disclosure on the Notes to Financial Statements, non-cancellation of checks amounting to P18,666.30 that are outstanding for over 6 months from its issuance and existence of unidentified reconciling items in the amount of P18,773.99;

Purchases of medicines and medical supplies amounting to P1,054,022.50 were directly recorded as expense instead of the inventory account, while, medicines acquired thru donation were not recorded, thus, the inventory account is understated by the amount of the medicines found in the stock;

Existence and Valuation of Property, Plant and Equipment (PPE) account amounting to P60,686,50.95, comprising 50.33% of the municipality’s total assets was not ascertained due to failure to reconcile the discrepancies between the List of PPE and the books of accounts amounting to P5,143,227.87, render the status report on the CIP account totaling P18,714,342.91 and to provide adequate disclosures in the Notes to Financial Statements on the increase of the account balance in the amount of P7,768,425.32;

Validity and correctness of the claims against the LGU amounting to P1,368,030.54 could not be established due to absence of aging schedule, details of claims and absence of valid claims/contracts;

Correctness of the inter-agency payables totaling P21,339,207.40 cannot be verified due to absence of reports and records on the receipt and disbursement of fund transfers and The reconciliation Statement of Comparison of Budget and Actual Amounts was not disclosed in the Notes to Financial Statements; and,

Statement for CY 2017 Comparison of Budget and Actual Amounts and Statement of Appropriations, Allotments, Obligations and Balances for CY 2017 were not submitted.

Las Navas Qualified/ Modified

The Cash in Bank- Local Currency, Currency Account balance of P92,239,585.04 is unreliable due to failure to prepare bank reconciliation statements for the five funds. Bank Accounts maintained by the LGU lacked adequate disclosure on the Notes to Financial Statements and existence of invalid reconciling items.

Improper reclassification of unused/unutilized advances to “Due from Officers and Employees” totaling P109,528.11, recording of liquidation in the amount of P837,148.00 without sufficient bases, absence of complete disclosure in the Notes to Financial Statements, subsidiary ledgers and schedules, discrepancies in the amounts appearing in the ledger and other reports raised doubts on the validity and correctness of the advances accounts totaling P86,145,923.51

340

LGU AUDIT


No report on the Physical Count of Inventories to establish the existence of the recorded amount of P1,574,488.00.

Existence, valuation and ownership of Property, Plant and Equipment amounting to P136,154,422.71, comprising 41.86% of the municipality’s total assets was not ascertained due to failure of Inventory Committee to conduct annual physical count, provide adequate disclosures in the Notes to Financial Statements, provide depreciation for prior years’ acquisition, render status report on the construction in progress totaling P90,487,567.06 and failure to record the four (4) donated lots.

Validity and correctness of the claims against the LGU amounting to P20,823,572.82 could not be established due to absence of aging schedule and details of claims on the balances from prior years amounting to P5,182,531.81, the loans payable in the amount of P2,193,473.85 was not sufficiently disclosed, and the amount of P13,477,567.16 is not supported with valid claims and contracts and the various errors committed in recording the financial liability accounts and year-end balances of the Trust Liability-DRRM of P7,852,546.23 is doubtful due to discrepancies of the reported balance in the accounting reports and deficiencies in the reporting requirements.

Lavezares Qualified/ Modified

Existence and correctness of the cash account balances totaling P64,539,586.15 is inaccurate due to

a) negative/over deposit of various collections amounting to P171,917.03;

b) dormant and undocumented depleted Petty Cash Fund still carried in the books amounting to P85,000.00; and,

c) non-observance on the proper cash management and control;

The total reported receivable account balances for all funds of the LGU totaling P24,666,458.69 was inaccurate due to

a) uncollected and unreconciled past-due account receivable and due from officers and employees accounts totaling P2,338,460.57 which remained outstanding for more than six (6) to eight (8) years,

b) unliquidated inter and intra agency fund transfer and other receivable accounts which are outstanding ranging from five (5) years to more than seven (7) years totaling P6,130,075.19; and,

c) unsubstantiated and unreconciled advances accounts ages two (2) to six (6) years amounting to P7,628,642.66;

The existence and accuracy of the balances of the Inventory Accounts amounting to P1,920,175.70, as of year-end, is unreliable due to

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LGU AUDIT


a) non-existing inventories still carried in the books of accounts totaling P1,694,021.50

b) adjustments of P2,126,888.60 on inventory accounts without the corresponding Summary of Supplies and Materials Issued (SSMI); and,

c) non- observance of proper management and control on inventories;

The existence and accuracy of the balances of the Property, Plant and Equipment accounts amounting to P144,553,539.08, as of December 31, 2017, is unreliable due to

a) continued failure of the LGU to conduct the physical inventory and prepare/submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

b) non-transfer or registration of the ownership of Land on the name of the municipality;

c) non-observance of the accounting and reporting guidelines of the Road Network account; and,

d) non-adjustment of Construction in Progress account.

Lope de Vega Qualified/ Modified

Management failed to report accurately the account balance of the Cash in Bank-LCCA due to non-inclusion of the KALAHI CIDDS balance of P377,765.99;

Partial implementation of audit recommendation particularly on the validity of Receivable and Payable Accounts amounting to P2,241,448.61and P1,035,116.64 respectively which are doubtful due to the absence of subsidiary ledger, creditors, valid claimants, and documentary references to support the amount; and,

Failure of the Inventory Committee to prepare a Report on Physical Count of PPE’s amounting to P64,869,298.19 which casted doubt on the accuracy and reliability of the amount; failure of the recipient barangays to submit liquidation report on the financial assistance of P333,111.64 which may affect the accuracy of the related expenses thereon.

Mapanas Unqualified/ Unmodified

Mondragon Qualified/ Modified

The accuracy of Cash in Bank – Local Currency, Current Account balance of P180,963,646.36 as of December 31, 2017 cannot be relied upon due to reconciling items from prior years totaling P2,865,736.88 remained unrecorded to date; and,

342

LGU AUDIT


The LGU’s Intra-Agency Accounts, Due From Other Funds and Due to Other Funds of P862,324.57 and P2,531,674.00 respectively in the PPSAS Combined Statement of Financial Position as of December 31, 2017, has unreconciled difference of P1,669,349.43 which could not be traced, thus, affecting the reliability of the account.

Palapag Qualified/ Modified

Completed Projects funded by Department of Agriculture (DA) in the amount of P3,945,454.55 was still carried in the books as Due to NGA’s in the Trust Fund instead of transferring to the General Fund and recognizing the asset and equity account, thus overstating the liability and understating the equity account by the same amount;

Completely damaged Palapag Sports Center was still carried in the books due to failure to initiate the write-off/derecognition, thus Property, Plant and Equipment account is overstated by P4,339,724.19;

Balances for local collections between Cash Books and Accounting records differ by P676,745.13, thus accuracy of Cash-Local Treasury Account is unreliable;

Part of the balance of Cash in Bank – LCCA in the general ledger and financial tatement amounting to P201,822.81 was not supported with subsidiary records, and reconciling items in the bank reconciliation statement with a net amount of P188,936.24 was not duly taken up in the books, thus Cash in Bank- LCCA totaling P140,767,759.22 is unreliable; and,

The difference of P2,508.50 between the carrying amount of Land account and subsidiary ledger balance, and failure to take up in the books, five lots acquired by the LGU with total current fair market value of P3,079,580.00, Land account balance of P2,791,142.19 is unreliable.

Pambujan Qualified/ Modified

The accuracy and correctness of Cash in Bank, Local Currency Account Current account totalling P87,315,351.75 as of December 31, 2017 cannot be relied upon due to non-submission of Bank Reconciliation Statements under the General Fund and Trust Fund, and the unreconciled difference of the balances per bank and per books of P1,231,647.64. The balance of the Cash in Bank account represents 96% of the total current assets as of year-end.


Reconciliation between the bank and book balances of all depository accounts were not made that resulted to unreconciled difference of P6,509,646.44 between the bank balance of P33,422,363.25 and per books of P26,912,716.81 as of the year;

Property, Plant & Equipment totaling P5,333,454.88 were not depreciated, creating doubt on the accuracy and reliability of the account;

Procured Inventories amounting to P943,252.84 were directly recorded as expense instead of the appropriate inventory account, overstating the expense account and understating the asset account at the same time exposing the inventories to loss or misuse while property accounted for; and

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Advances for Officers and Employees totaling P1,505,690.17 granted in Cy 2015 and years thereafter remained unliquidated as end of CY 2017 that resulted to non-recording in the expense accounts affected.

San Antonio Qualified/ Modified

Balance per Bank confirmation of P54,462,053.46 is not reconciled with the balance per books of P49,014,198.33 and no bank and no bank reconciliation was prepared by the Municipal Accountant over the past years;

The propriety of the cash advances granted for salaries, wages, allowances and for travelling allowance totaling P16,940,193.22 and P1,421,714.00 were not adequately supported and balances of P404,637.31 and P540,108.64 respectively, remained unliquidated at the end of the year;

The accuracy of the PPE amounting to P29,865,038.15 was doubtful due to the failure to conduct physical inventory and maintain Ledger Cards and Property Cards, and the accounts Investment in Property-Land, P1,436,703.18; and

Other Assets, P5,115.00 and Other Income, P70,331.92 were erroneously presented in the financial statements.


Cash in Bank account amounting to P88,647,148.63 is doubtful due to non-adjustment/cancellation of stale checks totaling P474,398.44 and discrepancy of P3,690,428.51 between the reported book balance and per bank confirmation;

The unreliability of the Receivable account amounting to P5,429,764.54 due to uncollected and unreconciled dormant Loans Receivable- LGU Accounts which remained outstanding for more than twelve (12) years amounting to P76,664.58;

The unsubstantiated and undocumented Inter-Agency Fund Transfer and other accounts which are outstanding and dormant ranging from more than fourteen (14) years to over twenty (20) years in the amount of P347,472.54;

Misstatement of Inventory Account due to unrecorded issuances of indeterminable amount of drugs and medicines;

The unreliability of Property, Plant and Equipment Account of P19,990,068.04 between the General Ledger and Inventory Report of PPE and doubtful Land ownership of P1,083,182.52 due to inability of the LGU to obtain legal documents of ownership; and,

The inaccurate Road Network Account of P20,598,475.66 due to non-inclusion of prior years completed public infrastructure projects.

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Reconciliation of the bank and book balances of all depository accounts were not made that resulted to unreconciled difference of P2,707,0300.34 between the bank balance of P71,030,420.93 and per books of P68,323,390.59 as of the end of the year;

Payment of withdrawals for cash advances to the Municipal Treasurer amounting to P32,063,198.99 were outrightly recorded as Expenses instead of Advances for payroll;

Procured inventories were directly recorded as expense instead of appropriate inventory account thus, balances reported in the financial statement for said asset is unreliable.

The failure to reconcile the GSO/Municipal Treasurer records and the Accounting records of the Property, Plant and Equipment amounting to P48,615,836.21, as recommended in the prior years’ report, affected the reliability of the account.

San Roque Qualified/ Modified

Stale Checks amounting to P228,573.39 were not adjusted at year-end, resulting to understatement of Cash in Bank and Accounts Payable;

The Real Property Tax (RPT) and Special Education Tax (SET) Receivables and the corresponding Deferred RPT and SET Income was not established at the beginning of the year due to the absence of Real Property Tax Account Register/Taxpayer’s Index Card, thus, balances of RPT and SET Receivables, and Deferred RPT and SET accounts in the amount of P2,073,612.99 and P1,602,450.38 respectively as of December 31, 2017 are understated;

Procured Inventories amounting to P588,062.69 were directly recorded as expense instead of the appropriate inventory account, thus the balances reported in the financial statement for said asset is unreliable at the same time exposing them to loss or misuse while not properly accounted for; and,

The reliability, accuracy and existence of the Property, Plant & Equipment with a net book value of P77,132,636.38 (excluding Construction in Progress) remained doubtful due to the absence of property records and continued failure to conduct physical inventory.

San Vicente Qualified/ Modified

The correctness of the Cash in Bank- LCCA balance of P42,010,786.11 cannot be relied due to :

a) the failure to reconcile the discrepancies in the amount of P707,768.12;

b) the failure to record the reconciling items in the amount of P4,040.32;

c) the failure to submit the reported fifteen (15) cancelled checks thus; their actual status were not validated; and

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d) non-restoration of P47,000.00 to cash, being reported as outstanding check, however per our verification it was cancelled

The inability of the local government unit to conduct physical inventory and prepare the Report on the Physical Count of PPE and the absence of property records to support the recorded balance of PPE in the amount of P18,945,534.43; and,

The failure to provide depreciation of P15,036,530.09 on the reported assets and the effect on the Expenses and The Receivables Accounts with an Outstanding Cash Advances amounting to P10,650,475.41 that remained unliquidated during the year.

Silvino Lubos Qualified/ Modified

The Cash in Bank- Local Currency, Current Account is understated by P44,229.30 due to non-cancellation of checks amounting to P60,566.08 that are outstanding for over 6 months from its issuance and erroneous recording of undeposited collection in the amount of P16,336.78;

The reliability of the related expense account on the utilization of supplies amounting to P837,387.08 and year-end balance of inventory accounts totaling P1,703,608.25 cannot be ascertained due to absence of Monthly Summary of Supplies and Materials Issued (SSMI) supported with the Requisition and Issue Slip (RIS) and non-conduct of inventory at year-end;

Existence, valuation and ownership of Property, Plant and Equipment (PPE) account amounting to P135,021,350.35, comprising 57.36% of the Municipality’s total assets was not ascertained due to failure to conduct inventory taking, provide full provisions for depreciation and absence of schedule/list of the Construction-in-Progress;

Validity and correctness of the Accounts Payable amounting to P458,906.00 could not be established due to absence of Disbursement Voucher and supporting documents;

Due to Other Funds is overstated by P1,856,040.56 because it did not reconcile with the reciprocal account “Due from Other Funds”, hence, not eliminated in the combined Financial Position;

The recorded balance of Trust Liabilities – Disaster Risk Reduction and Management Fund amounting to P2,425,674.89 is unreliable due to failure to submit the utilization report and inadequate disclosure in the Notes to Financial Statements of the LDRRM and

The Reconciliation Statement of Comparison of Budget and Actual Amounts was not disclosed in the Notes to Financial Statements; and,

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Statement of Appropriations, Allotments, Obligations and Balances for CY 2017 was not submitted.


The consolidated balance of the receivable account totaling P74,376,467.40 was inaccurate due to

a) uncollected and past-due Loans Receivable-Others and Real Property Tax and

b) Special Education Tax Receivable accounts totaling P3,545,146.73 which remained outstanding for fourteen (14) years;

Unliquidated but already expended/completed Inter-Intra-Agency fund transfer and Other Receivable accounts which are outstanding for ten (10) years to fifteen (15) years in the total amount of P70,130,075.19;

The existence and accuracy of the balance of the Inventory accounts amounting to P205,863.01, as of year-end, is unreliable due to

a) issued/consumed and dispensed inventories still carried in the books of accounts totaling P113,615.00;

b) adjustments of P1,610,986.66 on inventory accounts without the corresponding Summary of Supplies and Materials Issued (SSMI); and

c) non-observance of proper management and control on inventories, which were not all in consonance with the provisions of Manual on the NGAs, Volumes I and II;

The existence and accuracy of the balance of Property, Plant and Equipment accounts amounting to P142,703,267.28, as of December 31,2017, is unreliable due to the continued failure of the LGU to conduct the physical inventory and prepare/submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Samar Qualified/ Modified

Reconciling items for several years accumulating to P5,226,680.00 were still shown in some bank reconciliation statements thus creating doubt as to the accuracy of the balance of cash in bank account with a consolidated amount of P1,251,104,169.80 at year-end;

The Province failed to reclassify completed projects from Construction in Progress (CIP) to the appropriate asset accounts and errors in recording have overstated and understated the affected CIP accounts by P227,704.33 and P3,335,718.33, respectively;

The combined balance of the account Drugs and Medicines for Distribution totaling P116M as of December 31, 2017 could not be relied upon due to non-preparation of the required Report on Physical Count of Inventories (RPCI),

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The general and subsidiary ledgers were not maintained in the trust fund and net overstatement of the account by P18,827,503.70 due to errors in the classification of inventory accounts and non-preparation of Summary of Supplies and Materials Issued (SSMI), thus issuances during the year amounting to P36,531,023.00 were not booked-up;

Disbursements in the total amount of P47,251.30 relating to expenses in connection with titling of acquired land for use under the Local Disaster Risk Reduction and Management Fund (LDRRMF) were not capitalized in accordance with the Philippine Public Sector Accounting Standards (PPSAS) No. 17, thereby understating the asset;

The remaining undistributed purchased relief goods with undetermined amount were not recorded as part of inventory at year-end, thereby understating the Inventory account;

The Notes to Financial Statements did not disclose the basic information regarding the financial status of the LDRRMF; and,

Under the Special Education Fund (SEF) inappropriate account was used to record the fund transfer amounting to P1,400,000.00 and Cash advances totaling P99,000.00.

Cities:

Calbayog City Qualified/ Modified

The Advances for Payroll account is overstated due to erroneous recording of cash advances for special purpose/time-bound undertakings and other expenses under this account;

The Advances to Contractors, Construction in Progress (CIP)-Buildings and Other Structures and CIP-Infrastructure Assets accounts are misstated due to incorrect recording of transactions and failure to reclassify completed projects to the appropriate infrastructure assets account;

The accuracy and propriety of the recorded check disbursements totaling P94,609,335.83 could not be ascertained because of the failure to submit 150 lacking disbursement vouchers and their supporting documents, as recommended in Calendar Year (CY) 2016; and,

Ownership of the land purchased in CY 2010 totaling P13,340,045.00 and several parcels of land affected by road-right-of-way which were fully paid in prior years totaling P14,931,558.75 was not properly conveyed as the title thereof was not yet transferred in the name of the City.

Catbalogan City Qualified/ Modified

The Property, Plant and Equipment account balances as presented in the Statement of Financial Position as at December 31, 2017 totaling P758,487,809.35 do not reconcile by P69,182,057.13 with the physical inventory report submitted by the General Services Office which is reported at P689,305,752.22; and,

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Various inventories reported at P8,158,070.71 do not reconcile by P15,011,588.58 with those reported in the Financial Statements at P23,167,659.29.

Municipalities:

Almagro No Opinion No Financial Statement submitted, hence, the Auditor prepared a Management Letter

Basey Qualified/ Modified

The validity of some asset and liability accounts totaling P193,641,568.65 and P47,246,481.48, respectively, could not be ascertained due to the absence of subsidiary ledgers and inadequate disclosures in the financial statements;

Improper recording of the current year amortization of the loans payable and the amount due to DBP for the loan payment of employees to the Other Payables account;

Depreciation charges were not provided for the Parks, Plazas and Monuments and the Work/Zoo Animals accounts valued at P19,032,462.82 and P1,656,500.00, respectively, thus overstating the balance of the PPE accounts; and,

The propriety of the recorded check disbursements totaling P1,581,380.97 could not be ascertained due to the absence of the covering disbursement vouchers for expenditures out of the fund transfers from various national government agencies.

Calbiga Qualified/ Modified

The existence and accuracy of Property, Plant and Equipment with total cost of P296 million and carrying amount of P230 million is doubtful since the physical count was not completely undertaken, with only P230 million or 77.59% of the total cost was actually found in station and included in the Report on the Physical Count of Property, Plant and Equipment as of December 31, 2017;

The reliability and accuracy of the balance of Real Property Tax and Special Education Tax Receivable with year-end balances of P8,913,997.16 and P223,068.94, respectively, is doubtful due to a difference of P8,698,754.40;

The results of operation and the financial condition of the Municipality’s economic enterprises could not be determined because a Special Account in the General Fund was not maintained; and, seventeen disbursement vouchers and its supporting documents amounting to P2,676,623.92, seventy-nine checks reported as cancelled and two checks with undetermined status were not submitted for audit; and,

Seventeen disbursement vouchers and its supporting documents amounting to P2,676,623.92, seventy-nine checks reported as cancelled and two checks with undetermined status were not submitted for audit; and

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Daram Qualified/ Modified

Cash in Bank-Local Currency Current Account totaling P87,363,501.17 is understated by P2,349,756.54 in view of the non-recognition of the amount as part of the Cash-in-Bank and non-preparation of the Bank Reconciliation Statements for two (2) bank accounts;

The accuracy and reliability of the Loans Payable-Domestic amounting to P8,356,759.93 could not be established due to unreconciled difference of P3,782,953.74, and information on each loan profile were not sufficiently disclosed in the Notes to Financial Statements;

The account Construction in Progress-Infrastructure amounting to P66,599,985.75 was not reclassified to Infrastructure Assets-Road Networks even if the infrastructure projects were completed at year end; and,

The Notes to Combined Financial Statements did not contain the required disclosure on the

a) reconciliation between actual amounts on comparable basis as presented in the Comparison Statement of Budget and Actual Amounts and Statement of Financial Performance; and,

b) Reconciliation of Net Cash Flows from Operating

Activities to Surplus/Deficit.

Gandara Qualified/ Modified

The LGU-operated water supply system is not maintained in a special account in the General Fund, adequate information on its financial operation was not readily available for decision making and monitoring, and all financial transactions related to said public utility were recorded as Due to LGUs in the books of the General Fund, which resulted to the overstatement of the payable account as well as the understatement of the income, expense and other affected accounts, thereby, casting doubt on the reliability of the presented balances of said accounts;

The reliability of the reciprocal accounts Due from Other Funds and Due to Other Funds cannot be ascertained due to an unreconciled prior year variance of P792,601.84; and,

The accuracy of the combined balance of the Property, Plant and Equipment accounts totaling P199,876,518.34 could not be ascertained due to non-preparation of a complete and reliable Report on the Physical Count of Property, Plant and Equipment.

Hinabangan Qualified/ Modified

The validity and accuracy of the Cash in Bank-Local Currency account under the Trust Fund amounting to P10,020,796.92 could not be ascertained due to non-preparation and non-submission of complete bank reconciliation statements;

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Liquidations of cash advances totaling P1,390,476.76 were not submitted for audit;

Asset and liability accounts totaling P127,665,010.79 have no subsidiary ledgers, while dormant accounts totaling P20,067,147.10 were not sufficiently disclosed in the Notes to Combined Financial Statements; and,

The balance of the Property, Plant and Equipment (PPE) totaling P68,369,843.12 is not reliable because depreciation was not recognized for all PPE accounts during CY 2015 to 2017, and the required physical inventory was not conducted.

Jiabong Qualified/ Modified

The Statement of Financial Performance for the Trust Fund and Statement of Comparison of Budget and Actual Amounts were still not prepared and submitted;

Validity and legality of the recorded expenses were not determined as 88 disbursement vouchers and supporting documents amounting to P15,851,080.74 and 128 checks reported as cancelled were not submitted for audit; and,

The reliability of the Property, Plant and Equipment account amounting to P32,641,330.94 could not be ascertained due to lack of property and ledger cards and the absence of the Report on the Physical Count of Property, Plant and Equipment for the past six years.

Marabut Qualified/

Modified The balances of Real Property Tax and Special Education

Tax Receivables of P6,193,528.68 and P5,413,298.89, respectively as at December 31, 2017 were unreliable due to the booking up a constant amount of P781,483.00 at the beginning of each year from CY 2012 to 2016 on RPT and SET Receivable; and,

The Cash in Bank balance of P37,309,245.81 as at December 31, 2016 which increased to P50,687,211.28 as at December 31, 2017 could not be ascertained because of the existence of unidentified reconciling items amounting to P1,745,406.41.

Matuguinao Qualified/

Modified The accuracy and reliability of the Cash-in-Bank Local

Currency Current Account amounting to P33,794,520.22 could not be ascertained due to the failure to record the receipt of fund transfer amounting to P8,865,000.00, the non-preparation and non-submission of bank reconciliation statements, and non-maintenance of subsidiary ledgers; and,

The accuracy of the Property, Plant and Equipment accounts totaling P53,648,701.78 could not be ascertained because PPE ledger cards and property cards were still not maintained, and physical inventory was not conducted, thus their existence could not be established; the Due to NGAs in the Trust Fund is understated by P8,865,000.00 due to the

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non-recognition of the receipt of fund transfer; and disbursement vouchers amounting to P710,733.70 were not submitted for audit.

Motiong Qualified/ Modified

The reliability of the reported income in the Statement of Financial Performance could not be ascertained due to errors in the classification of accounts Subsidy from Other Funds and Subsidy to Other Funds amounting to P20,360,683.07 and P14,814,746.06, respectively;

Due from Other Funds was overstated by P500,000.00 due to an error in recording the transfer of LGU counterpart for the KALAHI-CIDSS program;

The expenses for the year were also overstated because the fund transfer to the barangays totaling P700,000.00 were erroneously debited to various expenses instead of Due from Local Government Units;

The reliability of the accounting and recording of the Local Disaster Risk Reduction Management Fund (LDRRMF) could not be ascertained because the unexpended portion of the LDRRMF for CY 2017 and prior years totaling P2,517,412.96 was not transferred to the Special Trust Fund, registries and subsidiary records were not maintained and relevant information pertaining to LDRRMF were not disclosed in the Notes to Financial Statements; the adjusting entries made for the fund transfer to the barangays in CY 2016 amounting to P795,000.00 were erroneous because the adjustments were made in the Trust Fund instead of in the General Fund;

The balances of the Cash in Bank, LCCA and Trust Liabilities accounts for CY 2017 amounting to P35,836,594.23 and P9,675,571.83, respectively, could not be relied upon due to errors in adjusting entries made; and,

The accuracy of the carrying amount of Property, Plant and Equipment accounts which increased to P92,658,916.80 in CY 2017 could not be ascertained due to the absence of updated property cards and ledger cards.

Pagsanghan Qualified/ Modified

The unreconciled balance of reciprocal accounts Due to Other Funds and Due from Other funds amounting to P501,381.72;

The cost for the major repair of the LGU’s fire truck amounting to P120,000.00 was recorded as an outright expense thereby understating the book value of the Disaster Response and Rescue Equipment; and,

The carrying amount of the Property, Plant and Equipment as at December 31, 2016 which increased to P101, 558,557.46 in CY 2017 is still unreliable due to material disparity amounting to P14,042,428.21 between the book balances and the physical count and the failure by the Municipal Treasurer and Accountant to maintain and update property cards, PPE ledger cards and Real Property Ledger Cards.

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Paranas Qualified/ Modified

Ten disbursement vouchers and its supporting documents amounting to P2,147,784.53 were not submitted;

Stale checks amounting to P51,971.62 which have been outstanding for more than two years from its issuance were not cancelled and were reported as outstanding in the bank reconciliation statement;

The prior year’s unimplemented audit recommendations, viz: (1) the carrying amount of Road Networks amounting to P41,563,132.24 in CY 2016 which decreased to P19,940,691.45 in CY 2017 could not be ascertained and its existence could not be established due to failure of management to

a) conduct physical count and submit the Report on the Physical Count of Road Network System,

b) submit a lapsing schedule for the computation of depreciation,

c) maintain a Local Road Inventory and Road Map,

d) keep a complete Local Road Network Property Card, and (e) render a Report on Local Road Network;

Equipment and in-kind donations were not recorded amounting to P171,101.05 and P1,292,830.03, respectively; and

The zero balance of inventory is unreliable because a total of 221,325 pieces of accountable forms and other supplies were not yet used or issued as of December 31, 2017.

Pinabacdao Qualified/ Modified

The reliability and accuracy of the Cash in Bank account with a balance of P44,947,518.89 is doubtful due to the existence of an unidentified balance of P2,670,626.19, and non-preparation of updated Bank Reconciliation Statements for nine (9) bank accounts with a total book balance of P38,995,073.63;

The reciprocal accounts Due from Other Funds and Due to Other Funds valued at P5,700,440.86 and P21,202,706.03, respectively, were not reconciled due to existence of unidentified balances of P5,661,620.86 and P20,681,230.05, respectively, thus rendered the account balances unreliable; and,

The carrying amount of the Property, Plant and Equipment amounting to P96,237,409.83 remained overstated by an undetermined amount due to non-provision of depreciation for some depreciable assets.

San Jorge Qualified/ Modified

The year-end balance of Cash in Bank-LCCA account amounting to P75,339,487.29 is overstated in the net amount of P23,310,439.27 due to non-recording of various book reconciling items;

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loan repayments totaling P1,983,245.73 were all debited to Loans Payable Domestic Account failing to recognize Interest Expense and Gross Receipt Tax which resulted to the understatement of expenses and liability accounts amounting to P588,948.73;

The balances of some line items in the Statement of Cash Flows still do not reconcile with the account details in the Notes to Combined Financial Statements and cross-referencing was not 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 account balance totaling P50,367,605.71 could still not be ascertained due to the absence of provision for depreciation on some accounts and discrepancies, between the actual physical count and balances per book.

San Jose de Buan Adverse The Statement of Comparison of Budget and Actual Amount was not prepared and the required Reconciliation of the Net Cash Flows from Operating Activities to Surplus/Deficit and Reconciliation of Budget and Actual Amounts were not disclosed in the Financial Statements;

The Cash in Bank-LCCA in the amount of P68,385,259.87 is unreliable for failure to conduct and submit the Bank Reconciliation Statements;

The accuracy and existence of the Property, Plant and Equipment could not be ascertained due to the continued failure to conduct the physical inventory, the absence of subsidiary ledger cards, the non-consideration of the salvage value of the assets in the computation of depreciation expense, and all depreciable assets acquired in CY 2017 were provided with full depreciation;

The unexpended LDRRMF totaling P3,887,495.35 was not transferred to the Special Trust Fund;

The liquidation reports and supporting documents for the credits to the cash advances totaling P7,947,588.11 and P13,850,785.00 under the General Fund and Trust Fund, respectively, were not submitted for audit; and,

59 paid disbursement vouchers and supporting documents amounting to P9,083,271.59 and 238 checks reported as cancelled under the General Fund and Trust fund, and disbursements totaling P2,939,782.52 under the 20% Development Fund were not submitted for audit.

San Sebastian Qualified/ Modified

The accuracy and the reliability of the Cash in Bank-Local Currency amounting to P37,057,507.90 could not be established due to the unreconciled difference of P3,217,898.88 and the non-preparation of the Bank Reconciliation Statement; .

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Fund transfer as Assistance to Disadvantaged Municipalities amounting to P14,154,000.00 was erroneously recorded in the General Fund instead of the Trust Fund Books;

The non-transfer of the unexpended balance of the Local Disaster Risk Reduction Management Fund (LDRRMF) to Special Trust Fund and non-disclosure in the Notes to Combined Financial Statements of the details and amount available and utilized during the year and the unexpended balances;

The failure to record the disallowance representing bank charges for checks drawn against insufficient fund totaling P642,850.31 which is covered by a Notice of Finality of Decision dated January 11, 2013;

The submitted Notes to Combined Financial Statements did not contain the required disclosure on the

a) reconciliation between actual amounts in the Comparison Statement of Budget and Actual Amounts, and Statement of Financial Performance: and,

b) reconciliation of Net Cash Flows from Operating Activities to Surplus/Deficit;

The CY 2012 disbursement vouchers (DV) and supporting documents (SD) covering 312 checks issued totaling P6,703,474.88 and 89 checks encashed/negotiated totaling P3,680,969.40 which were not recorded in the Report of Checks Issued and Cash Disbursements Journal were not submitted for audit;

A total of 151 DV and SD for CY 2011 amounting to P7,405,722.43 under the General Fund remained unsubmitted; and,

The Property, Plant and Equipment Account balance of P30,563,212.39 is unreliable due to the absence of subsidiary/property records for each PPE classification and continued failure to conduct physical count

Santa Margarita Qualified/ Modified

The Municipal Accountant’s continued failure to prepare and submit bank reconciliation statements to reconcile the book and bank balances created doubt on the reliability of the Cash in Bank-Local Currency Account Balance of P30,173,593.09;

The failure to transfer the current year unexpended balance of the LDRRMF to the Special Trust Fund amounting to P1,573,109.83 as well as the transfer of the prior year’s unexpended balance amounting to P3,737,889.84 which remained unrecorded as of year-end thus, resulting to the understatement and overstatement of the affected accounts in both the General and Trust Fund books;

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LGU AUDIT


Lot purchased in CY 2016 totaling P2,722,850.00 was made despite absence of proper documents, thus absolute ownership over the property was not established;

Cash- Local Treasury account is unreliable for it was unreasonably reduced in CY 2014 as a result of recording deposits amounting to P546,962.94 which was not supported with validated deposit slips, and this remained unadjusted in the books to date; and,

The accuracy of the Property, Plant and Equipment account 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.

Santa Rita Qualified/ Modified

The existence and accuracy of Property, Plant and Equipment with total cost of P385 million and carrying amount of P335 million is doubtful since the physical count was not completely undertaken, with only P304 million or 79% of the total cost was actually found in station and included in the Report on the Physical Count of Property, Plant and Equipment as of December 31, 2017;

The accuracy of the year-end balances of the reciprocal accounts, Due from Other Funds and Due to Other Funds in the amount of P10,770,134.25 and P2,276,944.48, respectively, could not be ascertained due to a material difference of P8,493,189.77;

Twenty seven disbursement vouchers and its supporting documents amounting to P1,782,753.98 including eleven checks reported as cancelled were not submitted for audit; and,

The reliability and accuracy of the Cash in Bank account with a balance of P92,763,055.89 is doubtful because the bank reconciliation statements contained unidentified book reconciling items amounting to P5,849,766.16.

Santo Niño Qualified/ Modified

The funds transferred to four barangays totaling P200,000.00 as assistance for various projects erroneously recorded as outright expense instead of as a receivable has overstated the expenses and understated the Due from Local Government Units account;

The aggregate amount of P131,492.50 which was erroneously recorded as payables and debited to an expense account in the books of the Special Education Fund cast doubt on the reliability of the presented balances;

The failure to transfer the current year’s unexpended/unobligated balance of the LDRRMF amounting to P2,142,162.26 to the special trust fund under the Trust Liabilities-DRRMF account resulted to the overstatement and understatement of the affected accounts in the General and Trust Fund books;

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The cash shortages of the former municipal treasurers totaling P2,186,138.03 was still not reclassified as Due from Officers and Employees; and,

The existence of the Property, Plant and Equipment account totaling P99,134,659.16 could not be established due to the failure of the municipality to conduct physical inventory of its properties and its accuracy could not be ascertained because of the disparity between prior years’ inventory report and the book balance.

Tagapul-an Qualified/ Modified

The balance of Cash in Bank – Local Currency, Current Account at year-end is unreliable due to:

a) material disparity between the balance per books and the balance per bank amounting to P3,530,534.86, and

b) existence of “unreconciled items” pertaining to prior years’ transactions totaling P2,026,622.12;

The overstatement of the Advances to Officers and Employees account due to erroneous recording of cash advances for special purpose/time-bound undertakings amounting to P3,285,300.00 under the said account instead of Advances to Special Disbursing Officer account;

The unreliable balance of the Inventory accounts totaling P1,181,450.00 because of non-maintenance of stock cards and supplies ledger cards, the presence of credit entries in the general ledger without the supporting documents, totaling P1,154,115.05 and non-submission of the Report on the Physical Count of Inventories;

The erroneous recording of the accumulated cost of four infrastructure assets directly under specific Property, Plant and Equipment accounts, thereby resulting in overstatement of Other Structures account in the amount of P1,735,881.81 and the corresponding understatement of Road Networks and Other Infrastructure Assets accounts by P736,825.51 and P999,056.30, respectively;

The doubtful validity and legality of the recorded disbursements in CY 2017 totaling P10,704,487.04, because the disbursement vouchers and supporting documents of which, were not submitted for audit, and the partially submitted disbursements vouchers of prior years as presented in Part III of this report.

Talalora Qualified/

Modified The validity of the Cash in Bank-LCCA account totaling

P44,795,372.34 could not be ascertained due to the unverified reconciling item in the General Fund and the non-preparation of the Bank Reconciliation Statements for the SEF and Trust Fund;

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LGU AUDIT


The validity and reliability of the balances of the Property, Plant and Equipment accounts with an aggregate net value of P44,555,879.76 could not be ascertained due to the absence of subsidiary/property records and the Report on the Physical Count of Property, Plant and Equipment, and depreciation charges from CY 2013 to 2017 were not provided for the PPE accounts with a total net value of P5,530,244.66; and,

The propriety of the recorded check disbursements totaling P9,663,469.18 for CY 2017, P5,144,426.82 for CY 2016, and P1,662,293.71 for CY 2014, could not be ascertained because the covering disbursement vouchers remained unsubmitted.

Tarangnan

Qualified/ Modified

The Cash Advances for Confidential and Intelligence Expenses for CY 2010-2014 amounting to P6,000,000.00 were still carried in the books despite proof of liquidation received from the ICFAU;

The accuracy of the carrying amount of Road Networks account totaling P39,269,385.65 could not be ascertained and its existence could not be established due to failure of the management to:

a) maintain subsidiary records for roads and road components for every road network;

b) maintain a Local Road Inventory and Road Map;

c) keep a complete Local Road Network Property Card; and,

d) conduct physical count and prepare the the Property, Plant and Equipment account totaling P120,840,528.59 could not be ascertained due to the absence of updated property cards, PPE ledger cards and Real Property ledger cards, and their existence could not be established due to management’s continued failure to conduct physical inventory of its properties; and,

The accuracy of the recorded valuation of the Land and Land Improvements and Building valued at P7,644,401.13 could not be ascertained because the amount remained unreconciled with the real property records of the Municipal Assessor.

Villareal Qualified/ Modified

Cash in Bank Account amounting to P299,944.82 and P24,870,249.58 under the Special Education fund and Trust Fund, respectively, were unreliable due to non-reconciliation between bank and book records;

The year-end balances of cash, income and related accounts were understated by P433,574.08 due to unsound practices on reporting, remittance and deposit of collections;

The unexpended balance of the LDRRMF was not transferred to a special trust fund account under Trust Liability-DRRM;

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LGU AUDIT


Due from LGUs account amounting to P291,161.34 which remained dormant in the books for more than ten years were not acted upon to facilitate the proper write-off thereof, resulting in the overstatement of the agency assets;

Erroneous recording of LGSF-ADM amounting to P10,085,000.00 as Due to Other Funds in the General Fund instead as Due to National Government Agency in the Trust Fund; and,

The submitted Notes to Combined Financial Statements did not contain the required disclosure on the reconciliation between actual amounts on comparable basis as presented in the Comparison Statement of Budget and Actual Amounts and Statement of Financial Performance.

Zumarraga Qualified/ Modified

The accuracy and reliability of the Cash in Bank-Local Currency amounting to P23,947,592.27 could not be established due to the unreconciled difference of P3,232,735.11 and non-preparation of the bank reconciliation statement;

The existence of the Property, Plant and Equipment account totaling P29,421,333.94 could not be ascertained due to the continued failure to conduct the physical inventory;

The non-transfer of the unexpended balance of the LDRRMF to a Special Trust Fund; and,

The non-disclosure in the Notes to Combined Financial Statements of the details and amount available and utilized during the year and the unexpended balances of the LDRRMF.

Southern Leyte Qualified/ Modified

The existence, validity, and accuracy of balances of Inventory accounts as well as PPE accounts amounting to P152,538,424.94 and P1,549,543,521.04, respectively, could not be ascertained due to the non-conduct of physical count of all inventories and PPE accounts and there were no other satisfactory audit procedures that could be adopted to satisfy the auditors that the recorded PPE and inventories were free from misstatements; and,

There was no disclosure in the Notes to the FS of the details of the Long-term liabilities recorded under account Loan Payable and the unexpended balance of LDRRMF amounting to P504,317,602.02 and P48,905,242.87.

City:

Maasin City Qualified/ Modified

The reported Accounts Payable was overstated due to the recognition of financial liability for the payment of additional benefits to its employees in the amount of P6,546,000.00 without sufficient legal basis, and the procured diesel and gasoline were automatically taken up as an expense in the amount of P1,992,932.36, thus causing an understatement of inventories account and an overstatement of the expense account by the same amount.

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Municipalities:

Anahawan Qualified/ Modified

The accuracy and validity of the Accounts Receivables and Trust Liability accounts amounting to P5,901,581.14 and P7,999,114.42, respectively, is understated by P 788,004.02, due to the erroneous computation of the 5% LDRRM Fund and the non-inclusion of the unspent 30% QRF provision for transfer to DRRM Fund Special account respectively, and,

The existence, validity and accuracy of the accounts Inventories as well as Property, Plant and Equipment (PPE) accounts amounting to P 601,900.00 and P 82,050,916.19, respectively, could not be ascertained due to the non-conduct of physical count.

Bontoc Qualified/ Modified

Unreliable balance of the Cash in Bank account amounting to P 52,904,596.73 due to the absence of bank reconciliation statements of seven depository accounts; and,

Unreliable balance of the Property, Plant and Equipment account totaling P142,578,191.13 (net) per the financial statement as of December 31, 2017 caused by the non-reconciliation between the Report of Physical Count of Property, Plant and Equipment and accounting records.

Hinunangan Qualified/ Modified

There is a reasonable assurance that the financial statements are free of material misstatements and were prepared in accordance with applicable laws, rules and regulations as well as in conformity with Philippine Public Sector Accounting Standards, except for the existence and accuracy of the account Property, Plant and Equipment amounting to P 136,205,602.70 remained doubtful due to the incomplete conduct of physical count of properties.

Hinundayan Qualified/

Modified The existence, accuracy and reliability of the account

Property, Plant and Equipment totaling P80,147,779.41 remained doubtful due to the non-reconciliation of the results of the physical count against the accounting records.

Libagon Qualified/ Modified

The non-reconciliation of the Report on the Physical Count of PPE against the balance in the General Ledger casts doubt on the reliability of the recorded balance of PPE accounts as of December 31, 2017 amounting to P128,818,166.85.

Liloan Qualified/ Modified

The existence, validity and accuracy of the Property, Plant and Equipment balance totaling P146,067,842.54 could not be established due to the non-conduct of physical count.

Limasawa Qualified/ Modified

The account Due from Officers and Employees in the amount of P 753,013.24 which is not reliable due to the accumulation of unliquidated cash advances which were granted more than 10 years ago with incomplete documentations; and,

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The account Due from NGO/PO is not reliable due to the absence of utilization reports on the fund transfer granted to Limasawa Salt making group more than 10 years ago in the amount of P 100,000.00.

Macrohon Qualified/ Modified

The absolute ownership of Land amounting to P55,700,420.00 could not be established due to the absence of documents to prove ownership thereof.

Malitbog Qualified/ Modified

The existence, validity and accuracy of the account Property, Plant and Equipment (PPE) is doubtful due to the non-reconciliation between the physical count of PPE amounting to P 177,548,467.76 against accounting records of Php180,951,517.45 showing a net difference of Php 3,403,049.69.

Padre Burgos Qualified/ Modified

The existence, validity and accuracy of the recorded Property, Plant and Equipment (PPE) accounts is doubtful due to the material difference in the amount of P42,605,088.69 between physical count of PPE amounting to P25,913,077.55 against accounting records of P68,518,166.24.

Pintuyan Qualified/ Modified

The accuracy of the Cash in Bank balance amounting to Ᵽ35,587,046.82 per the financial statement of the LGU could not be ascertained due to the absence of Bank Reconciliation Statements; and,

The existence, validity and accuracy of Property, Plant and Equipment account per the financial statements as of December 31, 2017 amounting to Ᵽ79,543,531.21 could not be established due to the non-conduct of physical count of properties.

Saint Bernard Qualified/ Modified

The existence, reliability and accuracy of the account Property, Plant and Equipment amounting to P151,101,697.12 could not be ascertained due to the non-reconciliation between the physical count reports and accounting records, and there were no satisfactory audit procedures that we could adopt to satisfy ourselves that the recorded PPE was free from misstatements.

San Francisco Qualified/ Modified

The existence, validity and accuracy of the account Property, Plant and Equipment amounting to P107,242,119.61 remained unreliable due to the incomplete conduct of physical count of properties, thus, rendering a piecemeal physical inventory report;

The accuracy of the balance of the Cash in Bank account was doubtful due to the absence of Bank Reconciliation Statements for three (3) special accounts in the General Fund, one (1) Special Education Fund account, and five (5) Trust Fund accounts totaling P32,519,759.44 and the General Fund had an unreconciled balance of P1,312,365.01 with the bank per reconciliation statement as of December 31, 2017; and,

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LGU AUDIT


The Real Property Tax (RPT) and Special Education Tax (SET) amounting to P2,408,965.04 due and collectible for the year was not recognized at the beginning of the year, thus, causing misstatement of the receivables and deferred income of the municipality.


The existence, validity and accuracy of the account Property, Plant, and Equipment (PPE) is doubtful due to the material difference between the Physical Count of Property, Plant and Equipment (RPCPPE) of P 34,465,704.04 against accounting records of P50,248,906.08 (gross) showing a difference of P 20,037,730.64; and,

The accuracy of the Cash in Bank amounting to P99,807,386.71 is unreliable due to some adjustments which were not effected and there were no other satisfactory audit procedures that we could adopt to satisfy ourselves that the recorded accounts were free from misstatements.

San Ricardo Qualified/ Modified

The accuracy of the Cash in Bank balance amounting to P65,697,891.40 per the financial statement of the LGU could not be ascertained due to absence of Bank Reconciliation Statements; and,

The existence, validity and accuracy of Property, Plant and Equipment account per the financial statements as of December 31, 2017 amounting to P84,799,635.55 could not be established due to the non-conduct of physical count of properties.

Silago Qualified/ Modified

There is a reasonable assurance that the financial statements are free of material misstatements and were prepared in accordance with applicable laws, rules and regulations as well as in conformity with Philippine Public Sector Accounting Standards, except for the existence and accuracy of the account Property, Plant and Equipment amounting to P 136,205,602.70 remained doubtful due to the incomplete conduct of physical count of properties.

Sogod Qualified/ Modified

The existence, validity and accuracy of the balances of Property, Plant and Equipment (PPE) accounts totaling to P284,975,391.68 per the financial statements as of December 31, 2017 could not be established due to non- conduct of complete physical count and there were no other satisfactory audit procedures that we could adopt to satisfy ourselves that the recorded PPE was free from misstatements; and,

Booking up of medical equipments amounting to P244,975.57 understates the assets in the financial statements of the same amount.

Tomas Oppus Qualified/ Modified

The existence, validity and accuracy of the account Property, Plant and Equipment (PPE) totaling P62,100,542.21 net of accumulated depreciation per the agency’s financial statements as of year-end could not be established due to the absence of the physical inventory report caused by the

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incomplete conduct of physical count of all properties of the Municipality and there was no other satisfactory audit procedures that we could adopt to satisfy ourselves that the recorded PPE was free from misstatements.

Region IX – Zamboanga Peninsula

Zamboanga del Norte Qualified/ Modified

Non-reconciliation of Inventories as reflected in the financial statements and in the Report on the Physical Count of Inventories, resulted to a difference of P51,731,353.56, between the two records, which casts doubt on the reliability and correctness of the Inventory accounts.

Cities:

Dapitan City Qualified/ Modified

The Inventory accounts reflected more or less the same amounts for the last five years casting doubt on the correctness, existence and reliability of the accounts;

Real Property Tax and Special Education Tax Receivables (RPTR/SETR) were not established for CY 2017 due to the non-preparation of an assessment roll that should contain the list of all persons whose real property been newly assessed or reassessed, and the values of such property, which resulted in unreliable balances of the RPTR and SEPTR accounts;

Of the recorded amount of the Land account in the books of P19,151,450.48, ten real properties reflected in the subsidiary ledgers, with a total amount of P1,781,167.55 were not yet transferred in the name of the City, and there was no record of real estate totaling P17,370,282.93 casting doubt on the validity and reliability of the account; and,

Reconciliation of the physical inventory of Property, Plant and Equipment (PPE) accounts with the accounting records were not completed, thus, the existence and valuation of PPE with a total amount of P962,426,955.00 as of December 31, 2017, net of depreciation could not be ascertained.

Dipolog City Qualified/ Modified

The accuracy and existence of the Property, Plant and Equipment (PPE) accounts of the City at year-end totaling P1,152,012,094.84 could not be relied upon due to

a) non-inclusion of Land, Buildings and Infrastructure Assets amounting to P791,925,322.08 in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

b) unreconciled differences of P190,576,010.08 between the book balances of Machinery and Equipment and RPCPPE; and,

c) the non-maintenance by the General Services and Accounting Offices of property/ledger cards for each type/class of PPE.

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LGU AUDIT


The Report on the Physical Count of Inventories (RPCI) as of December 31, 2017 with a total amount of P25,783,089.06 did not reconcile with the year-end book balance of P45,256,502.11, or a difference of P19,473,413.05, with the RPCI not reflecting information on the year-end actual physical balance for Fuel, Oil and Lubricants which has a year-end balance of P33,627,64.92, and with the Inventory accounts reflecting dormant accounts totalling P5,390,174.91 which affect the reliability of Inventory account balances as of year-end; and,

Of the accounts Advances to Special Disbursing Officers and Advances to Officers and Employees with total amount of P13,024,762.42 (net of intelligence funds) and P4,337,643.09, the amounts of P3,666,440.53 or 28.15% and P926,221.97 or 21.35%, respectively, aged one year and above, remained unliquidated as of December 31, 2017, resulting in the possible overstatement of assets, and understatement of expenses, and retained surplus in case refunds are called for.

Municipalities:

Baliguian Qualified/ Modified

Due to the failure of management to prepare and submit monthly bank reconciliation statements for all funds, the non-establishment of Real Property Tax and Special Education Tax Receivable accounts at the beginning of the year resulting to understatement of said accounts, and the current liabilities under the trust fund books were not fully covered by the combined cash and construction in progress accounts.

Godod Qualified/ Modified

The accuracy, correctness and existence assertions on the Property, Plant and Equipment (PPE) with a carrying value of P108,820,561.92 were doubtful due to the

(a) non-completion of physical inventory;

(b) non-maintenance of updated Acknowledgement Receipts for Equipment (ARE); and,

(c) unreconciled property and accounting records.

Gutalac Qualified/ Modified

The Municipality did not conduct physical count of its inventory and property, plant and equipment accounts in the amount of 135,904.56 and 115,293,674.67, respectively. The inability to obtain sufficient evidence of the assertion of the Municipality with regard to the existence, valuation and presentation and disclosures of the inventory and property, plant and equipment accounts could affect the over-all assertion of management that the inventory and property, plant and equipment accounts are fairly presented.

Jose Dalman Qualified/ Modified

Completed and accepted Bottom-Up Budgeting (BUB) projects amounting to P9,521,477.28 were not transferred and recognized to the appropriate asset accounts, not in conformity with the requirements of PPSAS, NGAS Manual, thereby understating the Infrastructure Asset and Government Equity accounts of the Municipality.

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LGU AUDIT


Kalawit Qualified/ Modified

Due to various reconciling items were not yet taken up in the books of accounts which created doubt to the reliability and accuracy of the Cash in Bank – Local Currency, Current Account in the financial statements, contrary to the provision of Section 74 of the State Audit Code of the Philippines.

Katipunan Qualified/ Modified

The balances of the Property, Plant and Equipment accounts totaling P119,905,163.71 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, Plant and Equipment (PPE) Ledger Card by the Accounting Section and Property Cards by the General Services Office.

The year-end balances of the Cash Local Treasury and Cash in Bank accounts reported in the financial statements showed a difference of P661,630.95 and P7,648,065.59, respectively, with those per cashbook of the Treasurer due to: (a) failure of the accountant and treasurer due to reconcile the balances of the Treasurer’s Cash Book vis-à-vis the accounting records at least on a quarterly basis and (b) non-preparation of monthly Bank Reconciliation Statements (BRS) which resulted in unreliable and doubtful balances of the cash accounts.

La Libertad Qualified/ Modified

Unliquidated Cash Advances to Officers and Employees as of December 31, 2016 amounted to P3, 460,248.83 due to management’s weak monitoring resulting to the overstatement of the asset accounts and understating the expense accounts;

Purchases of drugs and medicines were expensed outright amounting to P217,219.00 upon payment contrary to Sections 114 and 121 of the Manual of NGAS for LGU, thus affecting the presentation of the inventory and expense accounts in the financial statements for CY 2016; and,

Various unserviceable non-current assets at an estimated cost of P9,218,833.75 were not yet dropped from the book of accounts due to the failure of the Property

Labason Unqualified Opinion with Emphasis of

Matter

The Municipality conducted an actual physical count which results to total value of Inventory and Property, Plant and Equipment (PPE) account of P79,118,193.61 based on the Report on the Physical Count of Property Plant and Equipment (RPCPPE) submitted in CY 2017. The net book value of inventory and PPE account in the Statement of Financial Condition is P216,918,659.18; and,

Analysis of the Status of Financial Position and the RPCPPE disclosed that there were items or sub-accounts in the PPE account which were not included in the actual RPCPPE. Further verification revealed that there were assets which actually exist but were not included in the RPCPPE.

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LGU AUDIT


Leon B. Postigo Qualified/ Modified

The accuracy, correctness and existence assertions on the Property, Plant and Equipment (PPE) with a carrying value of P49,632,495.90 were doubtful due to the (a) non-maintenance of updated Acknowledgement Receipts for Equipment (ARE); (b) non-maintenance of subsidiary ledgers at the Accounting Office; (c) unreconciled property and accounting records.

Liloy Unqualified Opinion with Emphasis of

Matter

The Municipality made an actual physical count of its Property, Plant and Equipment Account. Analysis of the Status of Financial Position and the Report on the Physical Count of Property Plant and Equipment (RPCPPE) disclosed that there were items or sub-accounts in the PPE account which were not included in the actual RPCPPE. We recognized the effort of the Municipality in coming up the required actual physical count of PPE and the required reports despite the absence of the necessary data because of substantial length of time since the assets were acquired, but we emphasized that all assets classified as PPE should be included in the RPCPPE of the Municipality and to complete the reconciliation of fixed asset records.

Manukan Qualified/ Modified

The reliability of the balances of the Property, Plant and Equipment accounts totaling P218,225,000.86 could not be ascertained due to


b) non-preparation / maintenance of Property, Plant and Equipment (PPE) Ledger Card by the Accounting Section and Property Cards by the General Services Office.

Mutia Qualified/ Modified

The existence, accuracy and valuation of the Property Plant and Equipment accounts with the total reported book balance of P134,075,045.23 at Balance Sheet Date are doubtful due to failure of Inventory Committee to complete the annual physical count and reconcile the result of the count with the property and accounting records of the Property Custodian and Accounting Unit, respectively; and,

The accuracy of Cash in Bank–Local Currency, Current Account in the total amount of P61,925,623.27 as of December 31, 2017 cannot be relied upon due to incomplete submission of bank reconciliation statements contrary to Section 74 of PD 1445 and COA Circular No. 96-011 dated October 2, 1996.

Piñan Qualified/ Modified

Unrecorded/erroneous transactions totaling to P175,638.30 were not recognized in the books of accounts at year end; hence, resulted to the understatement/overstatement of various affected accounts;

Cash advances totaling to P159,244.30 remained unliquidated at year-end; thus, timely recognition of the affected accounts could not be effected;

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LGU AUDIT


The non-conduct of physical inventory on all inventory items and properties, and the incomplete maintenance of Stock Cards and Property Cards rendered the existence and correctness of the Inventory and Property, Plant and Equipment (PPE) accounts balances totaling to 1,937,202.94 and P22,526,532.13, respectively, doubtful; and,

The existence and correctness of the balance of account Road Networks amounting to P84,615,274.70 as of December 31, 2017 are doubtful due to the failure to conduct physical count of its road networks and maintain the required records enumerated under COA Circular No. 2015-008.

Polanco Qualified/ Modified

Unrecorded/erroneous transactions totaling to P10,014,645.12 were not recognized in the books of accounts at year end; hence, resulted to the understatement/overstatement of various affected accounts;

Cash advances totaling to P535,869.01 remained unliquidated at year-end; thus, timely recognition of the affected accounts could not be effected; and,

The continuous failure to conduct physical count, maintain Property Cards, and reconcile the same with PAR, casted doubt on the existence and completeness of the PPE account balance totaling to P29,405,548.73.

President Manuel A. Roxas Qualified/ Modified

The reliability of the balances of the Property, Plant and Equipment accounts totaling P214,585,958.74 could not be ascertained due to


b) non-preparation/maintenance of Property, Plant and Equipment (PPE) Ledger Card by the Accounting Section and Property Cards by the General Services Office.

The existence and correctness of the balance of account Road Networks amounting to P55,906,386.79 as of December 31, 2017 is doubtful due to the failure to conduct physical count of its road networks and to maintain the required records enumerated under COA Circular No. 2015-008.


The existence, accuracy and valuation of the Property Plant and Equipment accounts with the total reported book balance of P90,021,875.91 at Balance Sheet Date are doubtful due to failure of Inventory Committee to complete the annual physical count and reconcile the result of the count with the property and accounting records of the Property Custodian and Accounting Unit, respectively; and,

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LGU AUDIT


The accuracy, existence and completeness of Public Infrastructures totaling P27,102,246.46 in the corresponding Property, Plant and Equipment (PPE) accounts which were 100 percent recognized in the books by the end of CY 2017 cannot be relied upon.

Salug Qualified/ Modified

The accuracy, correctness and existence assertions on the Property, Plant and Equipment (PPE) with a carrying value of P110,320,291.76 were doubtful due to the

a) non-maintenance of updated Acknowledgement Receipts for Equipment (ARE);

b) non-maintenance of subsidiary ledgers at the Accounting Office; and,

c) unreconciled property and accounting records.

Sergio Osmeña Sr. Qualified/ Modified

Accountable forms issued to collectors have remained unreported/unremitted for several years; hence, corresponding collections were not recorded in the books of accounts;

Unreported disbursements amounting to P1,895,317.82 remained in the books of accounts as reconciling items for several years; hence, resulted to the overstatement of both Cash in Bank and Government Equity accounts;

The non-establishment of Real Property Tax/Special Education Tax (RPT/SET) Receivables at the beginning of the year resulted to the understatement of RPT/SET Receivables and Deferred RPT/SET Income by P5,533,983.80; and,

Timely recognition of the affected accounts could not be effected due to the non-liquidation of cash advances totaling to P2,708,738.17.

Siayan Qualified/ Modified

The existence and valuation of the infrastructure assets transferred from the Registry of Public Infrastructures to the books of accounts of the Municipality totaling P95,950,503.01 as of December 31, 2017 cannot be relied upon due to:

a) recognition of public infrastructures that have been determined inexistent and of no remaining service potential; and,

b) the erroneous recording of depreciation of these assets.

Sibuco Qualified/ Modified

The failure to prepare the bank reconciliation statements that created doubt on the accuracy of the reported cash in bank balances;

The failure to record Road Networks that understated the Municipality’s assets and government equity accounts;

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LGU AUDIT


The failure to set-up the Real Property Tax and Special Education Tax Receivables; and,

The continuous failure to set-up trust Liability and transfer of the unspent portion of the LDRRMF to Trust Fund.

Sibutad Qualified The existence and valuation of the Property, Plant and Equipment accounts with the total reported book balance of P59,599,604.19 at balance sheet date are doubtful due to the failure of management to complete the physical count and reconcile the records of the Property Custodian and Accounting Unit; and,

The accuracy, existence and completeness of Public Infrastructures totaling P18,949,438.60 in the corresponding Property, Plant and Equipment (PPE) accounts which were 100% recognized in the books by the end of CY 2017 cannot be relied upon.

Sindangan Qualified/ Modified

The Municipality failed to transfer the required 50% or P55,117,538.19 of its Infrastructure Assets to the Property, Plant and Equipment accounts, as provided in COA Circular No. 2016-004 dated September 30, 2016 and COA Circular No. 2015-008 dated November 23, 2015.

Siocon Qualified/ Modified

Due to the non-application of accrual basis of accounting for rent income from the operations of the municipality’s public market resulted to an understatement of income and asset accounts at year end; and,

the costing of the Construction of Tibangao-Balagonan Road and Construction of Tulay ng Pangulo along New Lituban-Makian Road were found to be above COA cost estimate based on the results of technical review.

Sirawai Qualified/ Modified

Due to the failure of management to prepare and submit monthly the bank reconciliation statements for all funds, the non-establishment of Real Property Tax and Special Education Tax Receivable accounts at the beginning of the year; and,

The unavailability of documents to support the validity and reliability of Loans Receivable-Local Government Units, Interest Receivable and Loans Receivable-Others accounts at year-end.

Tampilisan Qualified/ Modified

Failure to identify the reconciling items and proper accounting thereof continually created doubt as to the reliability and accuracy of the reported Cash in Bank – Local Currency, Current Account in the financial statements, contrary to the provision of Sec. 74 of PD 1445 otherwise known as the State Audit Code of the Philippines;

The Municipal Accountant inadvertently overlooked recording some of the adjusting entries required to correct errors noted in one of our CY 2016 audit findings which continuously overstated and/or understated several accounts presented under the General Fund and Trust Funds books;

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The accuracy, completeness and existence of the Merchandise Inventory account with carrying amount of P1,788,082.20 were not established due to the: (1) failure of management to conduct periodic physical inventory of materials; (2) failure of the Municipal Accountant and General Services Officer – Designate to properly maintain Supplies Ledger Cards (SLC) and Stock Cards, respectively; and (3) unsecured warehouse facility wherein access were granted to any other person; and,

Road Networks Account totaling P5,987,110.41, inclusive of accumulated depreciation did not pertain to 50% of the assets to be restored since no inventory was made contrary to the requirements of COA Circular No. 2015-008 dated November 25, 2015, thus understating the financial statements as of December 31, 2017.

Zamboanga del Sur Qualified/ Modified

The book balance of Loans Receivable-Others account totalling P16,152,584.54 is not reconciled with the balances in the Subsidiary Ledgers (SL) totaling P13,078,606.84 resulting in the difference of P3,073,977.70, and the account has not been duly substantiated with a Report on Ageing of Loans Receivable, thus affecting the accuracy of the reported Loans Receivable-Others account balance;

Collectibles from Philippine Health Insurance Corporation (PHIC) of claims from sale of Drugs and Medicines and Hospital services as at year-end were not recognized as Receivable (Due fromGOCC-PHIC) and Revenue, understating the Due from Government Owned andControlled Corporations (GOCC)-PHIC account, Sales Revenue, Hospital Fees, and Government Equity accountstotaling P11,282,288.00, due to absence of tracking, monitoring, and reporting system of PHIC claims;

Incomplete capture of data, erroneous recording of transactions, and non- recognition of Sales Revenue at gross and Cost of Sales caused the un-reconciled inventory balances of P2,197,272.32 and P1,040,043.39 per SL and Report on the Physical Count of Inventories (RPCI) and Pharmacy Dispensing Report and Report of Materials and Supplies Issued(RMSI), respectively, affecting the accuracy of the Inventory accounts and understating the Sales Revenue and Cost of Sales by P25,521,779.30;

Impairment losstotaling P17,852.50 was not recognized for obsolete Accountable Forms; and unreconciled differences in the balances per ledger and inventory report with a net amount of P116,919.45 was erroneously recorded as direct adjustment in the Government Equity without resorting to reconciling the inventory report;

The carrying amount of the Road Network account totaling P2,579,575,387.70 is uncertain due to incomplete capture of material information in the Report on the Physical Count of Local Road Network (RPCLRN) affecting the completeness and valuation of the Road Network account as at year-end;

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Cash Advances exclusive of Confidential Fund (CF) totalling P24,628,198.52 remained unliquidated as at December 31, 2017 affecting the timing of recognition of expenses; and,

Unreconciled General Ledger (GL)/SL balances of Property, Plant and Equipment (PPE) against Report on the Physical Count of PPE balance amounting to P1,596,145,559.46, affecting the completeness and existence of the PPE accounts as at December 31, 2017.

Cities:

Pagadian City Disclaimer The improper accounting of transactions from the sale and lease agreements of the City Commercial Center (C3) resulted in non-recognition of receivables from leased and rent-to-own stalls of P59,093,413.43, cost of sold stalls of about P130,521,372.00 and the value-added tax component of the sale, and derecognition of Property, Plant and Equipment (PPE) of P35,028,848.68 without basis, rendering the accuracy, propriety and valuation of affected accounts doubtful;

Cash in Bank (CIB) accounts under Trust Fund (TF) amounting to P10,997,950.94 remained idle or unadjusted for more than five years depriving the City of the benefits of completed projects for which these funds had been originally intended and casting doubt on the propriety and accuracy of the CIB-TF balances;

The existence, ownership and valuation of PPE of P755,052,763.08, cannot be ascertained since physical inventory was not conducted, records were not reconciled, reports were not properly made and the corresponding adjustment for depreciation, losses and other items necessary to bring its values to the correct amount was not properly done;

The ownership and rights over Land amounting to P74,032,817.14 cannot be ascertained in the absence of land titles and non-reconciliation between accounting and property records, which could result in suits contesting the City’s ownership over said properties; and,

The legality, validity and propriety of the Fuel, Oil and Lubricants expenses with a total of P19,050,825.00 cannot be ascertained since control, rcording and reporting were not properly made and were not supported with complete documents.

Zamboanga City Qualified/ Modified

The accuracy of the balances of the affected accounts in the financial statements cannot be relied upon due to the following:

a) Reconciling items amounting to P1,493,036.91 of various bank accounts of the General, Trust and Special Education Funds were still not recorded in the books of accounts;

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b) Various accounts totaling P4,242,428.94 have long been outstanding/remained past due in the books for more than ten (10) years as of December 31, 2017, hence considered dormant, were not acted upon to facilitate the proper write-off thereof;

c) The reciprocal accounts Due from Other Funds and Due to Other Funds for all funds do not reconcile by P2,378,941.30 as of December 31, 2017;

d) Physical inventory taking of inventory items was not conducted. Also, inventory account balances totaling P31,885,109.66 as of December 31, 2017 are traceable to balances of CY 2006, and have been non-moving for eleven (11) years;

e) Various Property, Plant and Equipment (PPE) amounting to P43,477,683.62 which were deemed transferred without cost or donated to various National Government Agencies (NGAs) were dropped from the books of the City Government of Zamboanga despite non-compliance with the formalities and requisites of donations and transfers of property;

f) One hundred fifteen (115) physically completed infrastructure projects worth P383,600,794.01 undertaken by construction firms were not yet recorded or reclassified into their appropriate asset accounts but remained lodged under Construction in Progress;

g) Various expenses totaling P72,529,908.91 which could be recorded in more appropriate accounts were classified as Other Maintenance and Operating Expenses account;

h) The unexpended balances of LDRRMF presented in the Report on Utilization of LDRRMF do not reconcile with the Trust Liability – DRRM account due to non-recording of reconciling items and revision of LDRRMF Investment Plan (LDRRMFIP) thereby understating the Trust Liability – DRRM account by P53,203,204.42; and,

i) Balances of the accounts Income from Market and Operating Lease Receivable cannot be ascertained due to the unreliability of reports on market stalls and income is recorded on a cash basis instead of accrual basis.

Municipalities:

Aurora Qualified/ Modified

The validity and existence of the municipality’s Property, Plant and Equipment valued at P339,410,919.93 remained doubtful due to the incomplete conduct of physical count thereof and the non-depreciation of certain class of properties contrary to the provisions set forth under Section 119 and 124 of the NGAS Manual Volume 1

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LGU AUDIT


Bayog Qualified/ Modified

The accuracy and validity of the Machineries, Office Equipment, Information and Communication Technology Equipment and other accounts under Property, Plant and Equipment totaling P131.7M is unreliable due to the discrepancy noted between their book balances and the results of the physical inventory.

Dimataling Qualified/ Modified

Municipal Accountant failed to correct/adjust negative balances of Cash - Local Treasury Account reflected in the financial statements of P(106,522.47) contrary to Section 111 (2) and 112 of Presidential Decree No. 1445, Section 12 of LGU MNGAS and sound accounting practice dictating for its adjustment in the books of the agency currently and prospectively;

Property, Plant and Equipment (PPE) with a carrying value of P29,045,209.96 were doubtful because of

a) failure to conduct the physical inventory;

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. The inadequacy of its records did not permit us to apply alternative procedures to determine the accuracy of these accounts; and

The Municipality failed to disclose in the Notes to the Financial Statements the amount and details of the unexpended balance of LDRRMF in contrary to COA Circular 2012-002 dated September 12, 2012 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.

Dinas Qualified/ Modified

The management failed to make adjustments in the books of accounts for the reconciling items as reflected in the Bank Reconciliation Statements thereby understating the Cash in Bank account by P437,183.01;

Failed to conduct actual physical inventory taking of supplies and properties amounting to P121,456,819.36; and to prepare and submit Inventory Report, thus validity and correctness of the assets could not be ascertained; and,

Failed to initiate the liquidation of the Due from Officers and Employees and Advances to Officers and Employees totaling to P7.5M thus the recognition of expenses on its appropriate period cannot be made.

Dumalinao Qualified/ Modified

Unreliable property, plant and equipment account amounting to P146,302,015.84; and,

Cash advances amounting to P11,152,751.44 remained unliquidated as of year-end.

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LGU AUDIT


Dumingag Qualified/ Modified

The correctness and validity of the consolidated cash and cash equivalents account amounting to P119,160.058.87 as of December 31, 2017 cannot be ascertained due to the non-submission on the Municipal Accountant of the monthly BRS;

The balance of the Advances to Officers and Employees account (1030540), SDO (1030530) and Other Receivables (10306990) totaling P4,195,907.77 remain unliquidated and long outstanding; classification of fixed assets accounts in the amount of P197,313,432.16 could not be ascertained.

A total of P180,733.33 representing prior years obligations were charged to the current year’s expenses without appropriation resulting to the overstatement of the expenses for the year; and,

Report on the Physical Count of PPE was not prepared and submitted hence, validity, existence and propriety of classification of fixed assets accounts in the amount of P197,313,432.16 could not be ascertained.

Guipos Qualified/

Modified No physical inventory was conducted for PPE amounting to

P139.8M and Office Supplies Inventory, Drugs and Medicines Inventory and Medical, Dental and Laboratory Supplies Inventory amounting to P93,288.69, P299,436.50 and P187,535.50, respectively contrary to Section 124 of NGAS for LGUs, thus their existence and accuracy were not ascertained and the incurrence of the expenses were not recorded; and,

Misclassification of Inventory held for sale amounting to P2.1M and Investment Property of P.9M from Land account.

Josefina Qualified/

Modified The correctness and validity of the consolidated cash and

cash equivalents account amounting to P74,963,458.05 as of December 31, 2017 cannot be ascertained due to the non-submission of the monthly BRS;

The balance of the Advances to Officers and Employees account (1030540), SDO (1030530) and Other Receivables (10306990) totaling P1,754,492.94 remain unliquidated and long outstanding; and,

Report on the Physical Count of PPE was not prepared and submitted, hence, validity, existence and propriety of classification of fixed assets accounts in the amount of P111,308,879.12 could not be ascertained.

Kumalarang Qualified/ Modified

Inclusion in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and non-reclassification to Other Assets account of unserviceable properties amounting to P5,648,196.00, contrary to Sections 79 of Presidential Decree (PD) No. 1445 and Section 140 of the Manual on the New Government Accounting System (MNGAS) for LGU, Volume III; and

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LGU AUDIT


The accuracy, existence and validity of the Property, Plant and Equipment (PPE) account totaling P125.21M as of December 31, 2015 cannot be ascertained due to the failure to reconcile the figures in the Financial Statements and the Report on the Physical Count of PPE.

Labangan Qualified/ Modified

The validity and existence of the Municipality’s Property, Plant and Equipment valued at P151,421,084.92 remained doubtful;

The non-reconciliation of the Municipal Treasurer’s Cashbook balances with that of the Subsidiary Ledger maintained by the Office of the Municipal Accountant render the validity of the cash balances doubtful;

The balance of Due to NGAs account in the Statement of Financial Position amounting to P51,030,222.58 was not supported with subsidiary ledgers/details;

Completed Sagana at Ligtas Na Tubig sa Lahat (SalinTubig) Project Level I and II implemented by DILG was not transferred and recognized to the appropriate asset accounts of the Municipality; and,

The Accounting Office failed to record simultaneously the corresponding reciprocal accounts of Due from Other Funds and Due to Other Funds rendering the account balances unreliable. The inadequacy of records did not permit us to apply the alternative procedures to determine the validity of these accounts.

Lakewood Qualified/ Modified

Unreliable inventory account amounting to P434,690.21;

Unreliable property, plant and equipment account amounting to P99,136,281.48;

Depreciation for Military, Police and Security Equipment amounting to P60,922.35 was credited to account instead of the Accumulated Depreciation account;

Unliquidated cash advances amounting to P9,524,581.02;

Erroneous entries made for the reversion of the LDRRMF for CYs 2011-2012 amounting to P1,546,955.33;

Erroneous entries made for the recording of disbursements charged to reverted funds amounting to P198,710.60;

Erroneous reversion of the LDRRMF for CYs 2013-2015 amounting to P2,824,618.66; and,

Stale checks amounting to P68,198.77.

Lapuyan Qualified/ Modified

Cash Advances granted to SDO and Officers and Employees amounting to P3,575,000.00 and P389,114.24, respectively remained unliquidated as of December 31, 2017 in violation of Section 89 of Presidential Decree (PD) 1445 and Section 5.8 of COA Circular No. 97-002; and,

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LGU AUDIT


Depreciation Expense was not provided for Water Supply System account totaling P7,209,082.93 as required in Paragraphs 59 to 78 of IPSAS 17 Volume II of PPSAS which resulted to the overstatement of the PPE accounts, and overstatement of the surplus and government equity.

Mahayag Qualified/

Modified The correctness and validity of the consolidated cash and

cash equivalents account amounting to P138,042,919.61 as of December 31, 2017 cannot be ascertained due to the non-submission of the monthly BRS;

The balance of the Advances to Officers and Employees account (1030540), SDO (1030530) and Other Receivables (10306990) totaling P3,258,267.00 remain unliquidated and long outstanding; and,

Report on the Physical Count of PPE was not prepared and submitted hence, validity, existence and propriety of classification of fixed assets accounts in the amount of P116,728,826.27 could not be ascertained;

Margosatubig Qualified/

Modified Cash in Bank – LCCA is understated by P9,378,919.22 and

increased to P18,356,628.60 in CY 2017 due to unreconciled Bank Statement and ledgers of various bank accounts.

Advances granted to SDO and Officers and Employees amounting to P9,392,753.69 and P3,519,517.34, respectively remained unliquidated as of December 31, 2017 in violation of Section 89 of P.D. 1445 and Section 5.8 of COA Circular No. 97-002.

PPE totaling P7,625,726.63 was dropped from the books of accounts without the application of procedures prescribed in the Guidelines on Disposal and the submission of the required documents resulting to the reduction of the asset account by the same amount.

Disbursements for livelihood projects were included in the PPE account overstating the said account by P902,642.10.

Accounts Payable and Other Payable accounts totaling P6,242,790.45 and P6,001,287.52, respectively, cannot be relied due to absence of supporting schedules.

Inventory and other goods for distribution not falling under any specific inventory account totaling P204,000.00 were accounted as outright expenses upon payment instead of accounting as inventory.

Due to Pag-IBIG and Due to PHILHEALTH accounts showed a negative balance of P28,408.69 and P26,889.09, respectively, which is contrary to the generally accepted accounting principles and the PPSAS - Chart of Accounts as Liability Accounts should normally have a credit balance.

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LGU AUDIT


Depreciation Expenses for various PPE accounts totaling P26,303,363.74 were not provided which resulted to the overstatement of the PPE accounts, understatement of expenses and overstatement of the surplus and government equity.

Midsalip Disclaimer Correctness and accuracy of the Cash in Bank account of P126,221,995.91 cannot be ascertained because documents supporting the bank reconciliation statements were not submitted for verification;

The existence, valuation and condition of the Property, Plant and Equipment accounts of P162,573,444.12 cannot be ascertained because physical inventory was not conducted; and,

Legality, validity and propriety of transactions cannot be immediately ascertained since transaction documents and financial reports for CY 2015 to 2017 were not completely submitted as at year end.

Molave Qualified/ Modified

Cash advances of P684,535.26 remained unliquidated as of December 31, 2017;

Various purchases of supplies and materials amounting to P11,143,612.57 were not recorded as an Inventory account;

The existence, valuation and accuracy of the Property, Plant and Equipment (PPE) accounts of P436,033,000.00 cannot be ascertained since annual physical inventory was not conducted; and,

Legality, validity and propriety of transactions cannot be immediately ascertained since transaction documents and financial reports for CY 2017 were not completely submitted as at year end.

Pitogo Qualified/ Modified

Cash advances totaling P1,520,000.00 were granted to elective officials for expenses in connection with activities undertaken during Araw ng Zamboanga del Sur and Araw ng Pitogo 2017 in violation to Section 339 of Republic Act No. 7160 and Section 4.1.4 of COA Circular No. 97-002 dated February 10, 1997 and remained unliquidated as of December 31, 2017 and were recorded as an outright expense resulting to material misstatement in the financial statement in violation to Section 111 (2) of PD 1445;

Property, Plant and Equipment (PPE) with a carrying value of P19,815,841.46 were doubtful because of

a) failure to conduct the physical inventory;

b) non-maintenance of updated Acknowledgement Receipts for Equipment (ARE);

c) non-maintenance of subsidiary ledgers at the

Accounting Office; and

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d) unreconciled property and accounting records. The inadequacy of its records did not permit us to apply alternative procedures to determine the accuracy of these accounts; and

The Municipality failed to disclose in the Notes to the Financial Statements the amount and details of the unexpended balance of LDRRMF in contrary to COA Circular 2012-002 dated September 12, 2012 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.

Ramon Magsaysay Qualified/ Modified

The existence, valuation and accuracy of the balance of the Property, Plant and Equipment (PPE) with a net book value amounting to P143,993,000.00 could not be ascertained since the annual physical inventory was not conducted.


The Cash in Bank (CIB), Advances to Officers and Employees and Property, Plant and Equipment (PPE) cannot be relied upon due to unsettled issues embodied in the prior years’ audit recommendations:

The accuracy and fair presentation of the Cash-in-Bank (CIB) accounts were affected by failure to trace the unreconciled amount of more or less P22.1M as appearing in the Bank Reconciliation Statement (BRS);

Unrecorded disbursement for CY 2017 amounting to P 3,108,523.54 resulted to the overstatement of Cash in Bank account by P2,961,177.80, understatement of PPE account by P1,730,507.55, understatement of Due to BIR account by P147,345.74 and understatement of Expense account by P1,378,015.99 of the LGU; and

The concerned officials of the Municipality failed to require periodic physical inventory of supplies and property and failed to conduct actual physical inventory taking of all its assets amounting to P126.4M thus, the existence and accuracy of the PPE account cannot be ascertained. The inadequacy of its records did not permit us to apply alternative procedures to determine the accuracy of these accounts.

San Pablo Qualified/ Modified

Management did not conduct the annual physical inventory of its PPE amounting to P173,489,036.18 and failure to support the recorded balance with complete and accurate cards;

Management did not prepare the SCBAA for the year ended December 31, 2017 and made the required disclosure in the Notes to Financial Statements;

Cash advances granted to officers and employees amounting to P2,360,489.94 remained unliquidated as of year-end;

No provision for depreciation was made for PPE totaling P53,678,409.92;

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Erroneous recording of 20% DF disbursement transactions amounting to P898,525.00; and

Management did not trace and correct the negative balance of the Machinery account amounting to P94,756.48.

Sominot Qualified/ Modified

The validity and existence of the Municipality’s Property, Plant and Equipment valued at P101,243,802.42 remained doubtful due to the non-maintenance of Property Records and the continued incomplete conduct of physical count;

The reliability of the reported Cash in Bank–Local Currency (LC), account balances totalling P8,442,369.50 cannot be ascertained because of none preparation/submission of bank reconciliation statements (BRS) contrary to COA Circular No. 96-011 dated October 2, 1996;

The non-reconciliation of the Municipal Treasurer’s Cashbook balances with that of the Subsidiary Ledger maintained by the Office of the Municipal Accountant render the accuracy of the cash balances doubtful in violation of Section 181 of the Government Accounting and Auditing Manual (GAAM); and,

The Accounting Office failed to record simultaneously the corresponding reciprocal accounts Due from Other Funds and Due to Other Funds rendering the account balances unreliable.

Tabina Qualified/ Modified

Cash in Bank- Local Currency, Current Account balance totaling P62,912,104.46 for all funds as of December 31, 2017 is not fairly presented in the financial statements due to the failure of the Municipal Accountant to record valid reconciling items that require adjustment/correction in the in the General Ledger (GL).

Tambulig Qualified/ Modified

Bank Reconciliation Statements contain reconciling items such as deposits, check disbursements/encashment, identified reconciling items, and those for further verification which were not verified, adjusted and taken up in the books of the municipality, thus, resulting to unreliable balances of the cash in bank accounts; and,

The existence, valuation and condition of the Property, Plant and Equipment (PPE) accounts of P94,865,000.00 cannot be ascertained due to the continued failure of the Municipality to conduct physical inventory of all its properties.

Tigbao Qualified/ Modified

The accuracy and validity of the Road Networks, Water Supply System and Construction in Progress – Infrastructure Assets accounts under Property, Plant and Equipment totaling P36,793,105.46 is unreliable due to the discrepancy noted between their book balances and the results of the physical inventory

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LGU AUDIT


Tukuran Qualified/ Modified

The validity and existence of the Municipality’s Property, Plant and Equipment valued at P 279,187,856.40 remained doubtful due to the continued incomplete conduct of physical count as well as the non-depreciation of specific classes of PPEs;

Failure to record simultaneously the corresponding reciprocal accounts of Due from Other Funds and Due to Other Funds rendering the account balances unreliable; and,

Failure to completely submit the vouchers and ORs prior to the conclusion of the audit thus precluding the Auditor from timely verification of the transactions involved.

Vincenzo A. Sagun Qualified/

Modified Cash in Bank – Local Currency Current Account (LCCA) is

overstated by P120,691.98 due to the unrecorded book reconciling items;

Cash in Bank – LCCA is overstated by P 189,725.80 due to unrecorded reconciling items representing checks drawn which were not supported with the required documents;

Advances to SDO and Officers and Employees amounting to P3,048,960.00 and P163,111.56, respectively remained unliquidated as of December 31, 2017 in violation of Section 89 of P.D. 1445 and Section 5.8 of COA Circular No. 97-002;

Depreciation Expense was not provided for Water Supply System account totaling P4,232,048.11 as required in Paragraphs 59 to 78 of IPSAS 17 Volume II of PPSAS which resulted to the overstatement of the PPE accounts, and overstatement of the surplus and government equity; and,

Municipal Hall worth about P2 Million more or less was not booked up resulting to the understatement of the total assets and equity of the Municipality.

Zamboanga Sibugay Qualified/

Modified Reconciling items amounting to P1,493,036.91 of various

bank accounts of the General, Trust and Special Education Funds were still not recorded in the books of accounts, contrary to Commission on Audit (COA) Circular No. 96-011 dated October 2, 1996;

Various accounts totaling P4,242,428.94 have long been outstanding/remained past due in the books for more than ten (10) years as of December 31, 2017, hence considered dormant, were not acted upon to facilitate the proper write-off thereof pursuant to COA Circular 2016-005 dated December 19, 2016;

The reciprocal accounts Due from Other Funds and Due to Other Funds for all funds do not reconcile by P2,378,941.30 as of December 31, 2017;

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LGU AUDIT


Physical inventory taking of inventory items was not conducted in violation of Section 124 of the New Government Accounting System (NGAS) Manual. Also, inventory account balances totaling P31,885,109.66 as of December 31, 2017 are traceable to balances of CY 2006, and have been non-moving for eleven (11) years casting doubt on the existence and accuracy of the accounts;

Various Property, Plant and Equipment (PPE) amounting to P43,477,683.62 which were deemed transferred without cost or donated to various National Government Agencies (NGAs) were dropped from the books of the City Government of Zamboanga despite non-compliance with the formalities and requisites of donations and transfers of property;

One hundred fifteen (115) physically completed infrastructure projects worth P383,600,794.01 undertaken by construction firms were not yet recorded or reclassified into their appropriate asset accounts but remained lodged under Construction in Progress;

Various expenses which could be recorded in more appropriate accounts were classified as Other Maintenance and Operating Expenses account thereby overstating said expense account by P72,529,908.91 and understating other expense accounts in the financial statements;

The unexpended balances of LDRRMF presented in the Report on Utilization of LDRRMF do not reconcile with the Trust Liability – DRRM account due to non-recording of reconciling items and revision of LDRRMF Investment Plan (LDRRMFIP) which resulted to the understatement of the Trust Liability – DRRM account by P53,203,204.42; and,

Balances of the accounts Income from Market and Operating Lease Receivable cannot be ascertained due to the unreliability of reports on market stalls and income is recorded on a cash basis instead of accrual basis.

Municipalities:

Alicia Qualified/ Modified

The accuracy of the Cash and Cash equivalent, Receivable accounts, Property, Plant and Equipment (PPE) accounts, Construction in Progress, Biological Assets, Due from Other Funds, Due to Other Funds, Accounts Payable, Due to NGAs, Due to LGUs, Budget and Actual Amounts and the Cash Flow Statement cannot be ascertained due to the following:

a) Non-preparation of Bank Reconciliation Statement for the cash in bank totalling P P60,836,107.14;

b) Unreconciled difference of Cash in Local Treasury amounting to P5,154,417.97 between the cashbooks and the accounting records;

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c) Non-liquidation of Advances to Officers and Employees of P3,985,470.86 thus, expenses were not recognized in the proper period;

d) The failure to conduct physical inventory of PPE accounts amounting to P188,689,871.67 and the non-reconciliation of records;

e) The failure to conduct physical inventory of Biological Assets amounting to P486,000.00;

f) Non-submission/maintenance of subsidiary schedules of accounts totalling P193,725,572.98;

g) Non-reconciliation of Due from Other Funds and Due to Other Funds of P24,264,678.60 and P37,943,482.82, respectively;

h) Misclassification of Accounts Payable amounting to P652,560.00;

i) Non-reconciliation between actual amounts on a comparable basis as presented in SCBAA and in the Statement of Financial Performance;

j) Non-reconciliation of Net Cash Flow from Operating Activities to Surplus; and,

k) Non-preparation of Statement of Financial Performance for the Trust Fund.

Buug Qualified/ Modified

Various Property Plant and Equipment (PPE) amounting to P342,633,820.84 remained doubtful due to the Municipality’s failure to conduct physical inventory and to reconcile the same against the property and accounting records;

The balances of reciprocal accounts, Due from Other Funds and Due to Other Funds of P2,199,706.77 and P1,010,988.90, respectively were not reconciled;

Various Property, Plant and Equipment (PPE) totaling P155,707,179.71 were not depreciated; and,

Disclosures of information in the Notes to Financial Statements were not adequately presented.

Diplahan Qualified/ Modified

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; and,

Purchase of drugs, medicines, and medical, dental and laboratory supplies for the use of the Rural Health Unit (RHU) were directly debited to expenses.

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LGU AUDIT


Imelda Qualified/ Modified

Failure to conduct a periodic physical inventory of supplies or property and PPE amounting to P182,529,782.94 as of December 31, 2017;

Management failed to prepare the financial statements for each Local Economic Enterprise (LEE) operated by the municipality namely, WMSU-ESU and Chicken Ati-Atihan;

Real Property Tax (RPT) Receivable and Special Education Tax (SET) Receivable as of December 31, 2017 showed a negative balance of (P39,405.47) and (P39,405.47) respectively as of December 31, 2017; and,

Presence of non-moving or dormant “Agricultural Produce for Distribution” account without proper documentation amounting to P48,000.00 as of December 31, 2017.

Ipil Qualified/

Modified Cash advances of P13,196,574.77 remained unliquidated as

of December 31, 2017 out of which P 2,404,892.72 or 18% were granted to 100 officers/employees and have been outstanding for five years already in violation of Sec. 89 of PD No. 1445 and COA Cir. No. 97-002;

The existence and validity of Property, Plant and Equipment (PPE) amounting to P591,243,065.72 could not be ascertained due to a) failure to conduct physical inventory, update ledger cards and establish internal control over PPE which resulted to unreconciled difference of records and b) absence of adequate storage and warehouse facilities, contrary to pertinent provision of Volume 1, NGAS Manual for LGU and COA Cir. No. 92-386 thereby affecting the fair presentation of assets in the financial statements; and,

Unrecorded asset amounting to P 3,600,000.00.

Kabasalan Qualified/

Modified Non-liquidation of Cash Advances of P 4,758,439.60, net of

confidential and intelligence fund at year end;

Failure to conduct physical inventory and non-reconciliation of property and accounting records of Inventories and Property, Plant and Equipment (PPE) amounting to P 2,062,426.55 and P 260,155,185.82, respectively;

Non-reconciliation of year-end balances of Real Property Tax and Special Education Tax Receivables amounting to P 5,592,072.27 and P 2,215,037.32, respectively;

Failure to adjust in the books Stale Checks totaling P 215,880.27;

Existence of abnormal balance on Subsidiary ledgers for some accounts with an aggregate amount of P 395, 808.69;

Absence of valid proofs of ownership of sixteen (16) out of twenty-four (24) parcels of land amounting to P 3,325,207.58;

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LGU AUDIT


Incomplete and delayed submission of year-end financial report of the agency for 15 calendar days; non-submission of monthly trial balance for April to November 2017; and Disbursement Vouchers for September to December 2017; and,

Failure to prepare Statement of Financial Performance for Trust Fund for the year ended December 31, 2017.

Mabuhay Qualified/ Modified

Failure to conduct a periodic physical inventory of supplies or property and PPE amounting to P149,814,985.66 as of December 31, 2017 resulting to non-reconciliation of PPE account to its Report on the Physical Count of Property, Plant and Equipment (RPCPPE); and,

Some municipal officials and employees failed to fully liquidate the cash advances for travels which had become past due amounting to P197,730.81 as of December 31, 2017.

Malangas Qualified/ Modified

No inventory taking of PPEs and non-reconciliation of inventory records;

Disclosures of information in the Notes to Financial Statements were not adequately presented;

Various Property, Plant and Equipment (PPE) were not depreciated;

Supplies were recorded as outright expense instead of Inventory or Asset account;

Procurement of assets were recorded as outright expense instead of recording it to the appropriate asset account;

The balances of reciprocal accounts, Due from Other Funds and Due to Other Funds were not reconciled;

Statement of Comparison of Budget and Actual Amounts (SCBAA) was not prepared; and,

Disclosures of information in the Notes to Financial Statements were not adequately presented.

Naga Qualified/ Modified

Cash advances of P 37,753,675.91 remained unliquidated as of December 31, 2017 out of which P 12,929,587.54 or 34.25% were granted to 23 officers/employees and have been outstanding for five years as of December 31, 2017;

Continuous failure to update ledger cards; non-provision of depreciation; non-dropping and disposal of unserviceable properties; establish an internal control over property and supply management; and no adequate storage and warehouse facilities of PPE;

Unreconciled difference of Cash in Bank in the Bank Reconciliation Statement of P2,901,107.88; and,

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Existence of accounts in negative balance in the Financial Statements amounting to P 1,301,775.98 as of December 31, 2017 runs counter to sound accounting practices and principles.

Olutanga Qualified/ Modified

Failure to conduct a periodic physical inventory of supplies or property and PPE amounting to P97,759,862.68 as of December 31, 2017 resulting to non-reconciliation of PPE account to its Report on the Physical Count of Property, Plant and Equipment (RPCPPE);

Real Property Tax Receivables/Special Education Tax Receivables and the related contra accounts were not established at the beginning of the year and do not have the same balances; and,

Long overdue Other Receivables account amounting to P3,283,684.09 remained outstanding.

Payao Qualified/ Modified

The accuracy of the Cash and Cash equivalent, Receivable accounts, Investment, Property, Plant and Equipment (PPE) accounts, Due from Other Funds, Due to Other Funds, Loans Payable, Accounts Payable, Budget and Actual Amounts and the Cash Flow Statement cannot be ascertained due to the following:

a) Unrecorded net reconciling items of Cash in Bank and affected accounts amounting to P6,591,012.31;

b) Non-collection of past due receivable accounts totaling P5,096,594.70 and the Non-liquidation of Advances to Officers and Employees of P8,942,805.40;

c) Non-reconciliation of Due from Other Funds and Due to Other Funds of P12,334,109.06 and 7,734,195.95, respectively;

d) Inclusion in the PPE accounts of items that were already destroyed and not found in station during the physical count amounting to P240,094.95 and P580,566.95, respectively;

e) Non-disclosure of unserviceable PPE in the Notes to Financial Statements;

f) Long outstanding Accounts Payable of P2,200,910.29;

g) Unrecorded Loans Payable amounting to P20,000,000.00;

h) Livelihood assistance recorded as other investment amounting to 1,499,500;

i) Non-reconciliation between actual amounts on a comparable basis as presented in SCBAA and in the Statement of Financial Performance; and,

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j) Non-reconciliation of Net Cash Flow from Operating

Activities to Surplus.

Roseller T. Lim Qualified/ Modified

Loan Receivables and Other Receivables under the General Fund amounting to P 2,320,028.46 and P748,991.69, respectively as of December 31, 2017 remain uncollected and/or dormant for ten (10) years or over;

Cash advance of P 6,119,487.38 net of confidential fund, under the account Advance to Officers and Employees remained unliquidated at year end;

Stale check totaling to P 60,088.30 remained unadjusted in the books.

Cash In Bank as of December 31, 2017 for 20% Local Development Fund is insufficient by about P 2,301,075.22 to cover the mandatory and other obligations;

Accounts Payable (GF), Due to Officers and Employees (GF), Other Payables (GF) and Other Payables (SEF) accounts as of December 31, 2017 amounting to P 622,045.14, P 84,758.76, P 7,864.12 and P 39,640.70 respectively remains to be unpaid/outstanding for two (2) years and over;

Year-end balances of Real Property Tax and Special Education Tax Receivables of P 1,345,848.59 and P 738,397.87, respectively are doubtful due to unreconciled balances of the above accounts and their corresponding contra accounts;

Subsidiary ledgers for some accounts with an aggregate amount P 9,373,595.28 showed abnormal balances; and,

Balances of reciprocal accounts Due from Other Funds and Due to Other Funds of P 819,005.14 and P 10,891,892.98 respectively were not reconciled.

Siay Disclaimer The accuracy of the account balances was not ascertained due to the delayed submission of the Financial Statements, the inadequate disclosures of information in the Notes to the Financial Statements and the non-submission of subsidiary schedules of General Ledger Accounts totaling P131,301,617.36;

The accuracy of the cash in bank account, other Property, Plant, and Equipment could not be ascertained due to the following:

a) Non-preparation and submission of Bank Reconciliation Statement for General Fund;

b) Non-recognition of Prior Years’ Public Infrastructures of 20,603,091.51 as Infrastructure Assets in the Books;

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c) Non-reconciliation of budget and actual amounts and Statement of Financial Performance

d) Non-reconciliation of net cash flows from operating activities to surplus; and

e) Non-preparation of Statement of Financial Performance for Trust Fund.

The accuracy, validity, completeness and existence of transactions cannot be ascertained due to the non-submission of the Disbursement Vouchers (DVs) for checks issuance amounting to P34,105,193.30.

The ability of the LGU to meet its current obligations is doubtful due to the incurrence of cash overdraft/deficits amounting to P32,135,747.37.

Talusan Qualified/ Modified

Failure to conduct a periodic physical count of its Property Plant and Equipment (PPE) amounting to P168,784,143,41 as of December 31, 2017; and,

Inappropriate use of amount and absence of records for Due from National Government Agency account amounting to P81,272.57 as of December 31, 2017.

Titay

Qualified/ Modified

Cash advances of P 6,713,029.94 remained unliquidated and receivables account (1-03-06-010) amounting to P 109,353.04 remained long outstanding as of December 31, 2017;

Continuous failure to condict physical inventory of its PPE and to establish an internal control over property and supply management and absence of adequate storage and warehouse facilities; and,

Variance in the balance of reciprocal accounts of Real Property Taxes (RPT) Receivables and Special Education Tax (SET) Receivables amounting to P 16,250,255.55.

Tungawan Qualified/ Modified

Non-liquidation of Cash Advances of P 4,758,439.60, net of confidential and intelligence fund at year end;

Subsidiary ledgers for some accounts with an aggregate amount P 3,170,032.90 showed abnormal balances;

Accounts Payable (GF), Due to Officers and Employees (GF), Other Payables (GF) and Other Payables (TF) accounts as of December 31, 2017 amounting to P528,434.24, P82,664.67, P 10,848.83 and P7,078,876.73 respectively remains to be unpaid/outstanding for two (2) years and over;

Failure to transfer the unexpended balance of LDRRMF for CY 2017 amounting to P 780,287.15 to a Special Trust to a Special Trust Fund book; and,

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Various expenses and asset accounts were inappropriately charged to other MOE totaling P 9,329,260.10.

Regioon X – Northern Mindanao

Bukidnon Qualified/ Modified

The reported inventory of P185,629,219.41 cannot be ascertained due to non-submission of Report on the Physical Count of Inventories, and non-reconciliation between the Accounting and General Service Offices; delivered medicines and medical supplies amounting P36,476,199.39 were not recorded, thus understating the accounts Inventories, Accounts Payable and Expense accounts.

Cities:

Malaybalay City Qualified/ Modified

The Auditor rendered a qualified opinion on the financial statements of the City Government of Malaybalay for the period ended December 31, 2017 due to due to the effects of the noted deficiencies on the balances of some accounts.

Valencia City

Qualified/ Modified

Verification of the Bank Reconciliation Statements of the bank accounts of the LGU of Valencia City showed numerous book reconciling items, some of them were from prior years, which were not adjusted in the Books of Accounts in violation of Section 3.3 of COA Circular No. 96-011, thus, the amount of the account “Cash In Bank” presented in the Monthly Statement of Financial Position in all funds of the agency were inaccurate; and,

The income of the LGU-Valencia City from the share of the national wealth from CY 2016 backwards was not recognized as income in the year it was received. This has an aggregate amount of P34,928,824.56 which was only recorded as income in CY 2017. This is not in consonance with Section 19, Volume I of the Manual on the New Government Accounting System for local government units, thus, the total income for the CY 2017 is overstated by the said aggregate amount.

Municipalities:

Baungon Qualified/ Modified

Cash advances granted to employees and officers amounting to P3,880,484.56 were not liquidated within prescribed period which is not in keeping with provisions of COA Circular No. 97-002 dated February 10, 1997; and,

The existence, accuracy and validity of the fixed assets account amounting P68,721,413.30 cannot be validated, since property cards were not maintained and Acknowledgement Receipts for Equipment (ARE) are not renewed. While, the failure of the Agency to conduct physical inventory of all Property, Plant and Equipment of the Municipality resulted to non-submission of RPCPPE.

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Cabanglasan Qualified/ Modified

Cash Advances totaling P10,422,602.23 remained unliquidated at year-end, in violation of item 5.8 of COA Circular No. 97-002, due to lack of monitoring which resulted in the overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements; and,

The reliability and accuracy of Property, Plant and Equipment (PPE) accounts totaling P168,768,060.45 cannot be ascertained due to: a) failure of the management to conduct physical inventory; and b) non-maintenance of Property Cards (PC) and PPE Ledger Cards (PPELC) by the Accounting Office, hence, contrary to pertinent provisions of accounting and auditing rules and regulations on property management.

Damulog Qualified/ Modified

The Property, Plant and Equipment (PPE) accounts with total carrying value of P105,332,630.36 as at year-end of 2017 could not be relied upon owing to the failure of the management to conduct proper and complete physical inventory taking of the PPE owned by the agency and to reconcile the results of the count with the property and the ledger cards.

Dangcagan Qualified/ Modified

The existence, reliability and accuracy of the Property, Plant and Equipment account totaling P134,272,789.75 cannot be ascertained due to the following:

a) Failure of the Municipal Treasurer/GSO designate to conduct proper physical inventory;

b) Non-maintenance of Property Cards (PC) by the Municipal Treasurer/General Services Officer (GSO) designate and Property, Plant and Equipment Ledger Cards (PPELC) by the Municipal Accounting Office,

c) Non-provision of depreciation to Property, Plant and Equipment due to inadequacy of property and accounting records, contrary to pertinent provisions of accounting and auditing rules and regulations on property management, thereby affecting the fair presentation of the Financial Statements for CY 2017.

Unliquidated balances of Advances to Officers and Employees account as of December 31, 2017 in the aggregate amount of P3,444,593.26 which resulted to overstatement of receivables and government equity accounts; and,

Various purchases amounting to P3,699,339.66 were directly recorded as expense without passing through the inventory account contrary to Sections 112, 114, 121, and 124, Volume II, of the NGAS Manual for LGUs; thus, resulting in the understatement of various inventory accounts and overstatement of the related expense accounts.

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Don Carlos Qualified/ Modified

The Construction-in-Progress - Buildings and Other Structures account under the Special Education Fund of the municipality includes repairs of classrooms, gutter and installation of grills of a classroom building of Don Carlos Central Elementary School totaling P80,000.00 contrary to the DepEd-DBM-DILG Joint Circular Nos. 01 dated January 19, 2017 and Philippine Public Sector Accounting Standards (PPSAS), thereby overstating the Asset account with the corresponding understatement in the Expenditure account of the municipality; and,

Financial subsidy granted to Don Carlos Polytechnic College (DCPC) worth P 2,000,000.00 was not recognized and recorded as Accounts Payable in the books of accounts by the Municipal Accountant which has already been obligated by the Municipal Budget Officer contrary to Section 10 of NGAS Manual, hence, understating the Accounts Payable account by P 2,000,000.00 which created doubt as to the propriety, reliability and validity of the Total Current Liability account shown in the Statement of Financial Position.

Impasugong Qualified/ Modified

The Municipal Accountant and Municipal Treasurer/Acting General Services Officer failed to reconcile their records of Property, Plant and Equipment (PPE) and biological assets, inconsistent with the provisions of Section 114, Vol. 1, of the Manual on the New Government Accounting System thus rendering the balance as of December 31, 2017 of PPE account valued at P113,314,897.79 in the Statement of Financial Position doubtful; and,

Cash Advances totaling P2,401,819.42 remained unliquidated at year-end, in violation of item 5.8 of COA Circular No. 97-002, due to lack of monitoring which resulted in the overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements.

Kadingilan Qualified/ Modified

Submission of the disbursement vouchers together with all its supporting documents to the Office of the Auditor for post-audit was beyond the prescribed period . As of the date of the exit conference conducted with the Municipal Officials on March 26, 2018, the disbursement vouchers together with all the supporting documents from September to December 2017 were not submitted to COA. This is not in consonance with COA Circulars No. 94-001, No. 2009-006, and No. 95-006, thus, it contributes to the delay of the post audit activities of the Audit Team as embodied in the Audit Program and may affect the fair presentation of the financial statements for the year ended December 2017.

Kalilangan Qualified/ Modified

The agency failed to submit its financial reports, accounts and pertinent supporting documents within the prescribed period, in violation of COA Circulars No. 2009-006 and No. 94-001, thereby causing undue delay in the examination and audit of financial transactions and, ultimately, prevented the auditor from ascertaining the fairness of the presentation of the financial statements. As of December 31, 2017, financial reports and accounts submitted were until October 30, 2017

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only. Total Check Disbursements and Total Income/Receipts from November to December 2017 amounted to P55,897,865.72 and P6,964,915.03, respectively;

Inconsistency with the policy on recording and accounting of collections and deposits, amounting to P2,209,630.50 and P3,698,358.29 respectively, resulted to the overstatement of cash in bank, understatement of the cash in treasury balances in December 31, 2017 ultimately affecting the fairness of cash accounts in the financial statements contrary to the accounting policies set forth in the Manual on the New Government Accounting System and the GAAM; and,

The existence, valuation and correctness of the Property, Plant and Equipment accounts with an aggregate balance of P117,916,617.94 could not be ascertained due to failure of the LGU to conduct physical inventory, and failure of the General Services Office to maintain property cards contrary to specific provisions of the NGAs Manual.

Kibawe Qualified/ Modified

A total amount of P3,370,412.00 allocated for fuel, oil and lubricants based on the CY 2017 Annual Budget were not incorporated in the CY 2017 Annual Procurement Plan (APP), which subsequently resulted to the irregularity of the disbursements for fuel expenses amounting to P2,834,122.00, in contravention to Section 7.2 of the 2016 Revised IRR of R.A. 9184;

Some payments for the previous year’s fuel consumption in

the total amount of P369,476.26 were charged in the current year appropriations, a violation of Section 119 of Presidential Decree (P.D.) 1445, which casts doubt as to the legality of the disbursements;

The LGU’s government share of the monthly HDMF premium is in excess of the mandatory contribution as required in Section 7 of Republic Act No. 9679 dated July 21, 2009, known as the Home Development Mutual Fund Law of 2009, resulting to an over-remittance to Pag-ibig Fund;

An amount totaling to P1,173,711.34 representing the unutilized balances of fund transfers for the implementation of various trust fund projects were realigned to support Municipal projects in contravention to Section 305(e) of Republic Act No. 7160, resulting to the irregularity of the related disbursements;

The LGU did not recognize depreciation on some of its PPE Accounts pursuant to PAG 3 of PPSAS 17 resulting to an overstatement of the related asset account and an understatement of the depreciation expense;

The Medical Equipment Account has a negative net carrying amount of P64,427.49 which is not in adherence to PAG 6 of PPSAS 17 requiring a residual value of five percent (5%) of the cost of the PPE. This casts doubt as to the fairness of presentation of the carrying amount of the medical equipment in the Statement of Financial Position as of December 31, 2017;

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The change in the balance of the PPE amounting to P14,278,647.36 was not adequately disclosed in the Notes to Financial Statements as required in Par. 88 (e) of PPSAS 17. This affects the transparency of the transactions of the LGU in the procurement and disposal of its PPE; and,

Breakdown and other detailed information pertaining to accounts with material ending balances, adjustments and other changes were not adequately disclosed in the Notes to Financial Statements. This is not in faithful compliance to Paragraph 127 ( c) of PPSAS 1 and of Paragraphs 94 of IPSAS 1 as adopted under PPSAS 1, which consequently affects the LGU’s fair presentation of its financial transactions, other events and conditions.

Kitaotao Qualified/ Modified

The existence of (2) two Cash in Bank accounts recorded in the Subsidiary Ledger in the total amount of Php2,926,829.37 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 pursuant to Section 74 of P.D. 1445, which greatly affects proper management of the municipality cash in bank accounts; and

Ownership and existence of the Lands in the total amount of Php3,107,495.49 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.

Lantapan Qualified/ Modified

Advances to Officers and Employees totaling P1,209,278.72 remained unliquidated at year-end, in violation of item 5.8 of COA Circular No. 97-002, due to lack of monitoring which resulted in the overstatement of the asset account and the understatement of related expenses equivalent to the amount of unreported disbursements;

The failure of the Municipal Accountant to religiously make adjustments on the reconciling items of the Cash in Bank accounts under the General Fund, Special Education Fund (SEF) and Trust Fund including the inclusion of stale checks as Outstanding Checks in the Bank Reconciliation Statements (BRS) renders the recorded account balance doubtful; and,

The accuracy and completeness of the reported movable Property and Equipment accounts and Inventories totaling P103,412,609.48 as of December 31, 2017 could not be established due to the failure of the LGU to conduct physical inventory and update the required ledger and property cards, contrary to Section 111 (1) of P.D. 1445.

Libona Qualified/ Modified

The Cash In Bank balances in the Treasurer’s Cashbook and the subsidiary ledger (SL) remained unreconciled with a variance of P 3,320,784.93 which is contrary to Section 181 of GAAM Vol.1 and Book 2 Section 63-F of the Local Treasury Operations Manual, which greatly affects proper

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management of the municipality’s cash in bank accounts. Also, reconciling items amounting to P 1,330,331.51 as of December 31, 2017 remained unadjusted in the books of accounts and the non- reconciliation of the cashbook and cash in bank resulted to a variance of P 3,011,006.84 as of December 31, 2017;

A difference of P 15,367,188.07 was found between the end of month balances of the Cash in Treasury cashbook and the subsidiary ledger which clearly indicated the failure to perform reconciliation of treasury and accounting records, thereby creating doubt as to the correctness of the balances in the cashbook and in the financial statements at any given period of time; and,

Payments on partially completed major infrastructure projects of LGU Libona aggregating to P 3,124,823.06 were directly capitalized to their corresponding asset accounts and have not been initially recorded as Construction-in-Progress (CIP) which is inconsistent to what Section 14 of Philippine Public Sector Accounting Standards (PPSAS) Manual, Volume I – 17, Property, Plant and Equipment and Annex B of COA Circular 2016 – 004 dated September 30, 2016, thereby compromising the fairness of the presentation of these specific PPE accounts in the Statement of Financial Position and possibly projecting an unfitting perception to the end-users.

Malitbog Qualified/ Modified

The validity of year-end balance of Receivable account under Current Asset Account amounting to P 1,092,907.91 was doubtful because of the continuous presence of prior years’ unsettled/unliquidated accounts that have been outstanding in the book of accounts for considerable long period of time, contrary to generally accepted accounting principles and standards; and,

The reported balances of Property, Plant and Equipment (PPE) account totalling P234,602,772.44 are unreliable due to the incomplete actual physical count of properties and the non-submission of Agency’s report on the Physical Count of Property, Plant & Equipment (RPCPPE) contrary to Paragraph 2 of Section 124 of NGAS.

Manolo Fortich Qualified / Modified

The cash collections made in December, 2017 but deposited in January 2018 totaling P15,314,544.73, were recorded in the books as Cash in Bank account for December 31, 2017, thereby resulting in the understatement of the Cash Local Treasury account and overstatement of the Cash in Bank account by the same amount, hence, affecting the fairness of the presentation of the Statement of Financial Position as of December 31, 2017;

Cash Advances granted to Officers and Employees of the municipality totaling P457,665.03 remained unliquidated as of December 31, 2017 contrary to the provisions of Section 89 of P.D. 1445 and COA Circular No. 97-002, thereby

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exposing risk of possible misapplication of funds and misstatement of the asset and equity accounts since related expenses were not recognized in the year they were incurred;

Receivables totaling P12,256,681.55 remained uncollected/ outstanding for a substantial period, thereby depriving the LGU from generating additional source to fund its projects, programs and activities in the case of General Fund and the return or liquidation of funds transferred to NGOs/POs, depending on the provisions in the Memorandum of Agreement (MOA), to ascertain whether funds were utilized for its specified purpose; and,

The Inventory Committee and the General Services Division (GSD) missed to prepare the prescribed Local Road Networks reports as required in COA Circular No. 2015 – 008 or the Accounting and Reporting Guidelines on the Local Roads Asset Management System dated November 23, 2015, thus, precluding the auditor from verifying the propriety, reliability and completeness of the Road Networks account amounting to P 61,636,236.19 presented in the Statements of Financial Position as of December 31, 2017.

Maramag Qualified/ Modified

The accuracy and completeness of the reported movable Property and Equipment accounts, Inventories and Other PPE account of the LGU with total carrying value of P90,514,128.50 and P2,825,989.34 respectively, could not be ascertained due to the failure of the LGU to complete the conduct physical inventory taking, submit the required report of inventory, and to reconcile the results of the count with the property and the ledger cards, contrary to specific provision of the NGAs Manual;

The change in the carrying amount of the PPE amounting to P25,555,849.98 was not adequately disclosed in the Notes to Financial Statements as required in Par. 88 (e) of PPSAS 17. This affects the transparency of the transactions of the LGU in the procurement and disposal of its PPE;

Disbursements out of the fund transfers were directly debited to the liability account thereby, compromising the fairness of the presentation of the specific accounts in the Statement of Financial Position; and,

There is a discrepancy in the recorded Construction in Progress account and the reported uncompleted infrastructure projects of the municipality in the amount of P30,197,036.38, due to non-recognition of such account upon disbursement, a contravention to the instructions under COA Circular 2016-004.

Pangantucan Qualified/ Modified

The agency failed to submit its financial reports, accounts and pertinent supporting documents within the prescribed period, in violation of COA Circulars No. 2009-No. 94-001, thereby causing undue delay in the examination and audit of

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financial transactions and, ultimately, prevented the auditor from ascertaining the fairness of the presentation of the financial as of December 31, 2017, financial reports and accounts submitted were until June 30, 2017 only. Total Check Disbursements and Total Income/Receipts from July to December 2017 amounted to P127,466,430.36 and P19,536,368.15, respectively;

The existence, valuation and correctness of the Property, Plant and Equipment accounts with an aggregate balance of P284,623,987.69 could not be ascertained due to failure of the LGU to conduct physical inventory, and failure of the General Services Office to maintain property cards contrary to specific provisions of the NGAs Manual and IPSAS No. 17;

The agency failed to conduct physical count of local road network for all roads and its components, create an Inventory Committee, and recognize depreciation expense, contrary to COA Circular 2015-008 dated November 25, 2015, thereby, casting doubt as to the fairness of balance reported in Road Networks account amounting to P57,827,778.25; and

The accuracy and validity of the Land account recorded in the book of the Municipality as of December 31, 2017 in the aggregate amount of P2,510,000.00 could not be fully ascertained due to the absence of proof of ownership contrary to Section 47 (C) of the Implementing Rules and Regulations of the Local Government Code of 1991 and Section 148 of COA Circular No. 92-386 dated October 20, 1992.

Quezon

Qualified/ Modified

The existence, valuation and correctness of the Property, Plant and Equipment accounts with an aggregate balance of P319,285,087.19 could not be ascertained due to failure of the LGU to conduct physical inventory, and failure of the General Services Office to maintain property cards contrary to specific provisions of the NGAs Manual and IPSAS No. 17;

The accuracy and validity of the Land account recorded in the books of the Municipality as of December 31, 2017 in the aggregate amount of P53,413,735.50 could not be fully ascertained due to the absence of proof of ownership, and unsubstantiated figures reported on some property, failure of the general services office to keep a complete record of all real properties contrary to Section 47 (C) of the Implementing Rules and Regulations of the Local Government Code of 1991 and Section 148 of COA Circular No. 92-386 dated October 20, 1992, Article 122 and 440 of the IRR of RA 7160; and,

Cash advances totalling P1,351,720.59 remained outstanding at year-end due to:

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a) non-submission of liquidation reports by the accountable officers for accounts at year-end contrary to the provisions of Section 89 of Presidential Decree (PD) No. 1445 and COA Circular No. 97-002; and,

b) controls on the granting, utilization and recording of cash advances for travelling and other expenses were inadequate and inconsistent with COA Circular No. 97-002 dated February 10, 1997 and Manual on NGAS for LGUs; thus, exposing said funds to possible misuse and misappropriation and casting doubt as to the reliability and propriety of Cash Advances accounts.


Modified Cash advances aged between ninety-one days to three years

and beyond in the total amount of P2,900,178.57 remained unliquidated as of December 31, 2017 in violation to the provisions of Section 89 of P.D. 1445 and COA Circular No. 97-002, resulting to overstatement of asset and government equity accounts;

The existence, ownership, reliability and accuracy of the

Land account totaling P15,326,772.28 cannot be ascertained due to the following:

a) non-maintenance of Property Cards (PC) by the

General Services Officer (GSO) and Property, Plant and Equipment Ledger Cards (PPELC) by the Accounting Office;

b) Failure to register its land properties under the Torrens Title System, and,

c) Payment of a parcel of land was not supported with complete documentation, hence, contrary to pertinent provisions of accounting and auditing rules and regulations on property management.

The existence and completeness of the reported movable

Property and Equipment and Inventory accounts of the LGU with net book values amounting to P114,266,348.44 and P4,215,754.58, respectively, could not be ascertained due to the failure of management to conduct physical inventory count, submit the required report and to reconcile the results of the count with the property and ledger cards, contrary to the specific provisions of the NGAs Manual for LGU and the Handbook on Property & Supply Management System; and,

The accounting office failed to submit disbursements

vouchers, payroll reports, collection reports with a total amount of P16,778,097.55, including various journal entry vouchers, covering the period January to December 2017 in violation of Section 347 of RA No. 7160 and Section 7.2.1 of COA Circular No. 2009-006 dated September 15, 2009, thus the propriety and legality of the transactions could not be ascertained.

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LGU AUDIT


Sumilao Qualified/ Modified

Book reconciling items totaling P6,115,359.84 (net of additions and deductions) in the Bank Reconciliation Statements (BRS) of the six bank accounts as of October 31, 2017 remains doubtful because of the failure to effect adjustments for those identified and verified reconciling items which is contrary to Section 3.3 of COA Circular 96-11 dated October 2, 1996 hence, casting doubt as to the reliability and correctness of the Cash in Bank Account;

Long outstanding Cash Advances granted to Officers and Employees of the municipality totaling P499,674.51 remained unliquidated as of December 31, 2017, of which P388,076.68 has been unliquidated for four years or more even if the purpose for which these were granted has already been served, contrary to the provisions of Section 89 of P.D. 1445 and COA Circular No. 97-002, resulting to overstatement of asset and understatement of expense accounts;

The existence and accuracy of the Property, Plant and Equipment (PPE) accounts totaling P83,217,981.24 could not be ascertained due to:

a) the continuous failure of the LGU to submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) to the Office of the Auditor contrary to Section 124 of the New Government Accounting System (NGAS);

b) non-maintenance of complete property/ledger cards; and,

c) inadequacy of the accounting and property records from CY 2013 and prior years.

Payments for various infrastructure projects for CY 2017 out of the funds transferred from other agencies/LGUs aggregating to P 8,098,239.78 were directly recorded as a debit to the liability account and no corresponding asset account was recognized, thereby compromising the fairness of the presentation of the specific PPE accounts in the Statement of Financial Position and may also cause the understatement of the asset accounts of the government in general since these assets were not taken up in both the books of the source and the implementing agencies.

Talakag Qualified/ Modified

The validity of year-end balance of Receivable account under Current Asset Account amounting to P17,678,216.40 was doubtful because of continues presence of prior years’ unsettled/unliquidated accounts that have been outstanding in the books of accounts for considerable long period of time, contrary to generally accepted accounting principles and standards; and,

The non-submission of Agency’s report on the Physical Count of Property, Plant & Equipment (RPCPPE). Consequently, the existence, accuracy and validity of year-end balance of PPE account amounting P171,785,325.20 cannot be validated, which is not in keeping with Sec. 114, Paragraph 4 of NGAS.

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Camiguin Qualified/ Modified

The effect of the deviations from the prescribed procedures materially affected the account balances.

Municipalities:

Catarman Unqualified/ Unmodified

Mambajao Qualified/ Modified

Land properties with a market value of P7,370,027.73 lacked an Original Certificate of Title (OCT) or Transfer Certificate of Title (TCT) in favor of the government contrary to Section 39, Item 2 of PD No. 1445 and Paragraph 14 of PPSAS 17, thereby casting doubt on the validity of the claim for ownership and rights thereon.

Guinsiliban Qualified/ Modified

The Agency failed to secure the Original Certificates of Title (OCT) or Transfer Certificates of Title (TCT) in its land properties with market value of P1,040,755.00 contrary to Section 39, Item (2), of PD 1445, thereby casting doubt on the validity of the claim of ownership and rights; and,

The Municipal Accountant failed to recognize depreciation expense in the books on all their depreciable assets in the total amount of P9,624,225.91 contrary to the Paragraph 42 of the Philippine Public Sector Accounting Standards 17 for LGU, resulting to material overstatement of Net PPE and Government Equity.

Mahinog Unqualified/ Unmodified

Sagay Unqualifie / Unmodified

Lanao del Norte Qualified/ Modified

Due to the failure of management to conduct physical count of inventories; treating purchase as outright expenses instead of inventories, failure to set-up real property tax receivables, and book up donations would cast doubt as to the accuracy and reliability in the fair presentation of the financial statements for the year then ended.

City: Iligan City Qualified/

Modified Due to the effects of the noted deficiencies on the balances

of some accounts.

Municipalities:

Bacolod Qualified/ Modified

Due to unreliability of Property, Plant and Equipment account amounting to P62,948,156 attributable to failure to conduct complete physical inventory and absence of Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

398

LGU AUDIT


Baloi Qualified/ Modified

There is reason to believe that the 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 statements, conduct conduct physical inventory of government properties, and deficiencies noted in the audit.

Baroy Qualified/

Modified Due to the recorded Cash in Bank of P40,507,647 in the

books of accounts are unreliable due to long outstanding unadjusted book and bank reconciling items and the delayed submission of Bank Reconciliation Statements for depository accounts as prescribed by COA Circular No. 96-011 dated October 2, 1996.

Kapatagan

Qualified/ Modified

The Municipality’s Cash in Bank balance per book of accounts in the amount of P117,810,030.57 is unreliable due to the failure of the Municipal Accountant to include Bank Statements, paid checks, original copies of debit/credit memos, subsidiary ledgers together with the submission of Bank Reconciliation Statements of all depository accounts; and,

The Property, Plant and Equipment (PPE) account amounting to P221,456,526.75 does not reconcile with the balance per Report of Physical of PPE amounting to P18,291,612.38, due to the failure of the Accounting and Property (GSO) Units to regularly reconcile their records, and the failure to include other property accounts in the annual inventory. Thus, accuracy, existence, and reliability of PPE accounts in the Financial Statements could not be ascertained.

Kauswagan Adverse Cash shortage incurred by the former Municipal Treasurer

reached P3,603,508.45 representing long overdue cash advances not liquidated in violation of Article 217 of the Revised Penal Code of the Philippines and Section 103 of PD 1445;

Cash in vault Accounts for all funds do not tally or reconcile

between the cashbooks of the Municipal Treasurer as against the subsidiary ledgers of the Accounting Office resulting to accumulated difference of P1,093,809.34 contrary to paragraph 6.3 of the Revised Cash Examination Manual and in effect, rendering the reported cash balances unreliable;

The Municipal Accountant failed to update and submit 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 amounting to P46M;

399

LGU AUDIT


Unliquidated cash advances rose to P11,420,712.36 as of December 31, 2017, as new cash advances were paid and added to old ones’ contrary to COA Circular No. 97-002 and Section 89 of Presidential Decree 1445, thus, bloated the asset accounts and understated the expense account;

Claims totaling P5,027,712.81 were paid without complete

supporting documents in violation of Section 4(f) of PD 1445, thereby exposing government funds to possible misuse, loss or wastage and warrants the issuance of notice of suspensions;

Bogota Prize was disbursed in the amount P1,000,931.86

without proper ordinance;

Rice subsidy amounting to P1,073,040.00 were received by the rank and file employees of the Municipality of Kauswagan during the year under the CNA agreement in violation of Section 8, Article IX(b) of the 1987 Constitution and COA Circular No. 2012-003, thus tantamount to double compensation and occurrence of irregular expenditure;

Mobile expenses and charges were not fixed as to the

amount allowed to be shouldered by the Municipality resulting to high monthly charges;

Representation by a private law practitioner in the LGU is not

allowed pursuant to Section 3 of the Local Autonomy Act RA No. 2264, therefore, the hiring of legal consultant is considered as irregular transactions;

The reliability and validity of the Property, Plant and

Equipment account balance of P142,741,000.00 as of December 31, 2017 cannot be ascertained due to the failure of the General Service Office to conduct periodic physical inventory taking in violation of Section 157 of COA Circular No. 92-386 and Section 124 and 490 of the New Government Accounting System Manual; and,

Fund Transfer amounting to P600,000.00 is doubtful due to its absence of supporting documents to warrant the transfer from one fund DBP Bank Account No. 820-016250-030 to another Account No. 632578-030, hence, the propriety and reasonableness of the fund utilization cannot be ascertained.

Kolambugan Qualified/ Modified

There is a reason to believe that the 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 of the following exceptions as discussed in Part II of this report: 1. Accuracy and correctness of cash in bank account amounting to P111,314,434.17 cannot be ascertained due to delay in the submission of Bank Reconciliation Statements in violation of Sec. 74 of PD 1445 and COA Circular No.92-125A dated March 4, 1992;

400

LGU AUDIT


Presence of recurring reconciling items in the various bank reconciliation statements with aggregate amount of P709,494.87 is contrary to Sec. 74 of PD 1445 affecting the correctness of cash in bank account balance; and,

Cash advances granted to the Municipal Treasurer in the amount of P4,059,622.84 and the LGU Cashier remained unliquidated as of December 31, 2017 in violation of Section 89 of PD 1445 and COA Circular No. 97-002, thus, casting doubts in the propriety and regularity of the expenditures.

Lala Qualified/ Modified

Due to failure to record the accrued liability for the earned leave benefits of the employees totaling P 39,324,211.87 as of December 31,2017 of the agency resulted to overstatement of the net income, understatement of liabilities and overstatement of the government equity accounts of the Auditee.

Linamon

Disclaimer

The municipality failed to submit disbursement vouchers and its supporting documents for CY 2017, required financial reports and other monthly reports, and deficiencies noted in the audit.

Magsaysay Qualified/

Modified The Auditor rendered a qualified opinion on the fairness

presentation of the financial statements for Calendar Year 2017. There is a reason to believe that the 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 of the following exceptions as discussed in Part II of this report: 1. Cash in Bank accounts totaling P21,172,963.28 could not be ascertained due to incomplete submission of bank reconciliation statements for all LGU’s bank accounts;

Cash advances amounting to P1,735,456.71 as of December

31, 2017 consisting of Due from Officers and Employees of P720,792.27 and Advances for Special Disbursing Officer of P1,014,664.44 remained unliquidated; and,

Accuracy, existence and validity of Property, Plant and Equipment (PPE) account with net book value of P21,273,247.59 as of December 31, 2017 could not be ascertained due to failure of the management to maintain complete inventory records and documents and conduct physical inventory of its Property, Plant and Equipment (PPE).

Maigo Qualified/ Modified

Due to undeposited collections of P1,290,148; cash overdraft of P333,038; unreported collections of P842,644; unliquidated cash advances of P4,019,323; and absence of Report on the Physical Count of Property, Plant and Equipment (RPCPPE) valued at P95,725,501.

401

LGU AUDIT


Matungao

Qualified/ Modified

Cash in bank account amounting to P9.7M cannot be ascertained due to non-preparation of Bank Reconciliation Statement for all the funds which is contrary to Sec. 74 of PD 1445 thereby affecting the accuracy of cash in bank account balance in the financial position of the agency;

The Local Government Unit failed to establish collectible Real Property Tax and Special Education Fund share for the CY 2016 and CY 2017 due to the failure of the management to develop a comprehensive program to intensify tax collection in violation of Section 345 of R.A. 7160;

The reliability and validity of the Property, Plant and Equipment account balance P28M as of December 31, 2017 cannot be ascertained due to the failure of the auditee to conduct periodic physical inventory taking, in violation of COA Circulars and New Government Accounting System, Volume I;

No Motor Vehicles was recorded in the books of account,

due to absence of deed of donation / MOA from the Provincial Government of Lanao del Norte, thus, the Motor vehicles maintenance was doubtful contrary to Section 362 of GAAM, Vol. I; and,

Additional per diem claims incurred due to misapplication of the proposed P1,200.00 travel rates bill without awaiting to become a law in violation of the Executive Order No. 298, resulting to overstatement of their claims.

Munai Qualified/

Modified Due to unreliability of the cash in bank accounts amounting

to P308,642 due to non-submission of bank reconciliation statements and unverified Property, Plant and Equipment valued at P81,878,404 due to absence of Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and failure to conduct complete physical inventory.

Nunungan Qualified/

Modified The validity and existence of Property, Plant and Equipment

account balance amounting to P138,843,742 could not be ascertained or relied upon since these were not supported by physical inventory report; and,

The recorded Cash in Bank in the books of accounts are unreliable due to non-preparation of Bank Reconciliation Statements for depository accounts as prescribed by COA Circular No. 96-011 dated October 2, 1996.

Pantao Ragat Disclaimer The municipality failed to submit disbursement vouchers and

its supporting documents for CY 2017, required financial reports and other monthly reports, bank reconciliation statements, copies of perfected contracts and/or purchase orders with all the supporting documents, and deficiencies noted in the audit.

402

LGU AUDIT


Pantar Qualified/ Modified

Cash in bank account amounting to P6,889,015.00 as of December 31, 2017 cannot be ascertained due to non-preparation and non-submission of Bank Reconciliation Statement for all the funds which is contrary to Sec. 74 of PD 1445 thereby affecting the accuracy of cash in bank account balance in the financial position of the agency.

Municipality’s expenditures amounting to P48,778,445.21 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.

Due from Officers and Employees account amounting to P738,056.76 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.

The Local Government Unit failed to establish collectible Real Property Tax and Special Education Fund for the CY 2016 - 2017 due to the failure of the management to develop a comprehensive program to intensify tax collection and the vacancy of the position for Municipal Assessor

The reliability and validity of the Property, Plant and Equipment account balance of P2,848,554.00 as of December 31, 2017 cannot be ascertained due to the failure of the auditee to conduct periodic physical inventory taking, in violation of COA Circulars and New Government Accounting System, Volume I.

Poona Piagapo Qualified/ Modified

Cash in bank account cannot be ascertained due to non-preparation of Bank Reconciliation Statement for all the funds which is contrary to Sec. 74 of PD 1445 thereby affecting the accuracy of cash in bank account balance in the financial position of the agency;

Cash advances of P1,526,424.00 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;

The Local Government Unit failed to establish collectible Real Property Tax and Special Education Fund for the CY 2017 due to the failure of the management to develop a comprehensive program to intensify tax collection; and,

Accuracy and validity of the property, plant and equipment totaling P106M was tainted due to the continuous failure of the agency to conduct physical inventory count tied with incomplete accounting records contrary to Section 114 of NGAS. This resulted to unreliability of the reported account balances at year-end.

Salvador Qualified/ Modified

Due to failure to record the accrued liability for the earned leave benefits of the employees totaling P14,646,804 as of December 31,2017 of the agency resulted to overstatement of the net income, understatement of liabilities and overstatement of the government equity accounts of the Auditee.

403

LGU AUDIT


Sapad Qualified/ Modified

Due to failure to record the accrued liability for the earned leave benefits of the employees totaling P 10,505,681.77 as of December 31,2017 of the agency resulted to overstatement of the net income, understatement of liabilities and overstatement of the government equity accounts of the Auditee.

Sultan Naga Dimaporo Qualified/ Modified

The correctness and reliability of the Cash in Bank, Local Currency in the amount of P46,005,632.00 cannot be verified and ascertained due to the failure of the agency to prepare and submit monthly bank reconciliation statements of other funds for CY 2016, contrary to Section74 of PD 1445 and COA Circular No. 96-11;

The reliability and validity of the Property, Plant and Equipment account balance in the amount of P45,786,109.00 as of December 31, 2017 cannot be ascertained due to the failure of the auditee to conduct periodic physical inventory taking, in violation of COA Circular No. 92-386 dated October 20, 1992 and New Government Accounting System, Volume I;

The Obligation Request attached to the Disbursement Vouchers failed to provide necessary and important details such as the function/program/project (F.P.P.) and Account Code, contrary to the instructions mandated in COA Circular No. 2006-002 dated January 31, 2006, thus the determination of where the obligation were be charged could not be made; and,

The Municipality was not able to submit the reports of their transactions and financial statements on the required periods prescribed under existing laws, contrary to various COA rules and regulations.

Tagoloan Qualified/ Modified

Failure to prepare and submit bank reconciliation statements which renders the cash account unreliable;

Failure to conduct physical inventory of property, plant, and equipment account and maintain subsidiary ledgers thereof which renders PPE account unreliable;

Failure to submit journal entry vouchers in the disbursement of public funds which renders the income and expense account unreliable; and

Failure to maintain registries and unfilled obligation request which renders the SAOB unreliable.

Tangcal Qualified/ Modified

Accuracy and correctness of cash in bank account amounting to P14,775,854.10 cannot be ascertained due to non-submission of Bank Reconciliation Statements for Trust Fund accounts for CY 2017 and inclusion of stale checks amounting to P42,421.00 repetitively as reconciling items, hence, a violation of Sec. 74 PD 1445 affecting the accuracy of account in the financial position of the agency; and,

404

LGU AUDIT


Incomplete conduct of periodic physical count is contrary to Section 124 of NGAS Manual for LGU Volume I rendering the reliability, existence and accuracy of the PPE accounts valued at P153, 440,585.53 in the financial statements doubtful.

Tubod Qualified/ Modified

There were deficiencies noted in the advertising and posting of Invitations to Bid as well as the Notices of Award and the Notices to Proceed in the PhilGEPS on awarded projects for CY 2017 totaling P62,852,455;

Certificates of Acceptance were issued outrightly by the Municipality after the execution of Certificates of Project Completion and Turn-Over by the contractors for the completed projects totaling P8,794,11;

An advances to accountable officer for payment of salaries were recorded as Due From Officers and Employees account instead of Advances for Payroll account in the amount of P2,788,777 and which remained dormant for twenty-four years; and,

Checks drawn for all expenditures appropriated for the operation of the Sangguniang Bayan were not signed by the Municipal Vice-Mayor in contravention to the provision of RA 7160 thereby affecting the independence from the executive and legislative.

Misamis Occidental Qualified/ Modified

Due to effect of the deviations from the prescribed procedures materially affected the account balances.

Cities:

Oroquieta City Qualified/ Modified

Due to unreconciled (i) Cash In Bank-LCAA balance of P88.7 million and (ii) Property, Plant and Equipment (PPE) variance of P318 million that materially affected the reliability of the account balances.

Ozamiz City Qualified/

Modified

Due to the effects of the noted deficiencies on the balances of some accounts.

Tangub City Qualified/

Modified

Due to the effects of the noted deficiencies on the balances of some accounts.

Municipalities:

Aloran Qualified/ Modified

The agency failed to submit the Report on the Physical Count of Property, Plant and Equipment amounting to P150,126,200 and non-maintenance of Stock/Property Cards and Supplies/Property and Equipment Ledger Cards inconsistent with Chapter 3, Paragraph 3.2, 3.21 and 3.26 of The Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities and Paragraph 27 and 29 of the Philippine Public Sector Accounting Standards (PPSAS) 1. Thus, affecting the comparability, verifiability,

405

LGU AUDIT


accuracy and fairness of presentation of the Financial Statements, as well as, the existence and serviceability of some items of PPEs.

Baliangao Qualified/

Modified The validity and accuracy of the reported Cash in Bank

Account amounting to Php15,440,687 as of December 31, 2017 could not be ascertained since the LGU improperly prepared Bank Reconciliation Statement (BRS), thus not in accordance with COA Circular No. 96-011 dated October 2, 1996;

No subsidiary ledgers were maintained by the LGU for cash advances in consequence, not all debtors can be easily determined. As a result the amount of Php7,425,704.05 remained unliquidated in the books of the General Fund and Special Education Fund as of June 30, 2017 which is not in accordance with Sections 111 and 112 of PD 1445 thus, rendering the account misleading; and,

The management failed to employ and implement a sound internal control in the management of their property, plant and equipment (PPE) amounting to P14,583,215 in violation of the pertinent provisions of P.D. No. 1445, COA Circular No. 80-124 dated January 18, 1980 and NGAs Manual for LGUs. Thus, existence, accuracy, proper presentation and valuation, serviceability and good custodianship of the PPE accounts could not be ascertained.

Bonifacio Qualified/ Modified

Due to non-compliance to agreements and pertinent laws, unexpended balances totaling P12,292,761 transferred from various national and local government agencies for completed, and not implemented projects still remained in the books of the municipality in violation of the agreements, COA Circular No. 94-013, and COA Circular No. 2012-001, thereby value of money were not utilized to its greatest extent possible.

Calamba Qualified/

Modified Unvalidated PPE worth P110,108,436,Doubtful recognition of

Land Properties worth P14,345,495.

Clarin Qualified/

Modified Due to failure in adjusting reconciling items amounting to P

7,346,769 in bank reconciliation statements; and non-reconciliation of trust liability subsidiary accounts on funds received from other government agencies totaling P37,787,359, thereby the accuracy, reliability, validity, and existence of the municipality’s assets and liabilities cannot be ascertained.

Concepcion Qualified/

Modified Unreconciled year end cash in bank balance P44,807,985;

Unpaid obligations recorded as payable remained outstanding for at least 2 yrs amounting to P 2,192,677; Unreconciled reciprocal accounts Due to/Due from P6,889,425; Recorded Government Equity in the Trust Fund P 529,341.

406

LGU AUDIT


Don Victoriano Chiongbian Qualified/ Modified

Due to non-compliance to agreements and pertinent laws, unexpended balances totaling P36,783,163 transferred from various national and local government agencies for completed, and unimplemented projects still remained in the books of the municipality in violation of the agreements, COA Circular No. 94-013, and COA Circular No. 2012-001, thereby value of money were not utilized to its greatest extent possible; and,

Inadequate feasibility study on the P3.3 million Construction

of Potable Water System- Level III under 2013 Bottom-up-Budgeting (SALINTUBIG Program) caused delay in the project implementation contrary to the provisions in the Memorandum of Agreement entered by the municipality and the DILG, thereby depriving the constituents of the benefits due from the project.

Jimenez Qualified/

Modified Property, Plant and Equipment (PPE) accounts with a net

book value of P223,900,411.70 could not be relied upon due to

a) non-submission of the Report of the Physical Count of PPE (RPCPPE), and,

b) failure of the General Services Office to maintain property cards Pos) and the Accounting Office to maintain Property, Plant and Equipment Ledger Cards (PPELC) for each class of PPE, contrary to Sections 114 (Volume I) and 45 (Volume II) of manual on Ngas for LGUs;

The unserviceable properties with undetermined value were not disposed of as required under sections 167, 169 and 170 of COA Circular No. 92-386 dated October 20, 1992 and were not properly secured exposing said properties to elements that may lead to possible loss, further deterioration, wear and tear and reduction in values; and,

Five Jimenez Municipal”s economic enterprises revenue-generating programs or Multiple special Accounts were not combined in just one single economic enterprise account, thus net income was not reflected in each special account.

Lopez Jaena Unqualified/ Unmodified

Panaon Qualified/ Modified

The. validity, existence, ownership and valuation of the Agency’s Property, Plant and Equipment and Inventory Accounts in the amount of P191,433,232.21 and P427,657.40 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.

407

LGU AUDIT



The accuracy, existence and validity of the PPE accounts which totaled P 150,134,606.45 as of December 31, 2017 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/ Modified

The validity and reliability of the Cash in Bank – LCCA account amounting to P44,396,208 as of December 31, 2017 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,

The accuracy, existence and validity of the PPE accounts which totaled P120,587,048 as of December 31, 2017 remained doubtful due to the failure of management to submit the physical inventory reports and maintain subsidiary records.

Sinacaban Qualified/ Modified

The Infrastructure Assets not appropriately recognized as assets in the books.

Tudela Unqualified/

Unmodified

Misamis Oriental Qualified/ Modified

The reliability of the book balance of investment in stocks amounting to P113,132,543 as of December 31, 2017 could not be ascertained as the said account has been non-moving for more than ten years already and considering that MisOrTel has been incurring losses and was declared available for sale to private entity, the feasibility of the stock investment to be sold is very remote;

The stock investment has no provision for impairment losses;

The accounts receivables-telephone fund amounting to P188.707 million as at December 31, 2017 remained unreconciled with the aging schedule having a variance of P21.785 million;

The receivables account has no provision for the allowance for doubtful accounts, thus, affecting the reliability on the fair presentation of the accounts receivables in the financial statements;

MISORTEL incurred deficit/losses from its operations amounting to P14,717,574 as at December 31, 2017. However, as presented in the Statement of Financial Performance, the telephone fund has a reported surplus in the amount of P384,603 and as such had increased the government equity, when the said amount of surplus was computed after recording the amount of subsidy to MISORTEL totaling P15,102,178 for CY 2017 in which a large amount from the said subsidy was intended for the payment of loan amortization from the Development Bank of the Philippines;

408

LGU AUDIT


Understatement of operating expenses due to non-liquidation of advances to special disbursing officers amounting to P132,262,889 and advances to officers and employees in the amount of P20,481,927 as at December 31, 2017 of which a total of P118,651,543 has been non-moving for more than ten years already while there were also negative account balances in the total amount of P1,825, thus, the accuracy and reliability of the said account could not be ascertained;

The accuracy and reliability of the book balance cash in bank - current accounts totalling P1,264,357,755 could not be ascertained as the required bank reconciliation statements (BRS) of all accounts as of December 31, 2017 of all other cash accounts were not submitted which is not in compliance with COA Circular No. 96-011 dated October 2, 1996; and,

The provincial government manifested defiance to existing

government laws, rules and regulations on procurement, travel, grant and liquidation of cash advances as there were several disbursement transactions which were noted to have deficiencies as to documentary requirements as well as the legitimacy and validity of several expenses.

Cities:

Cagayan de Oro Unqualified/ Unmodified

El Salvador City Qualified/ Modified

Due to certain deficiencies as discussed in detail in Part II of the report. We were unable to obtain sufficient appropriate audit evidence and apply alternative audit procedures on these deficiencies owing to the status of the agency's records. Consequently, we were unable to determine the adjustments necessary in the circumstances.

Gingoog City Qualified/

Modified The Cash in bank – Local Currency, Current Account and

Saving Account totalling P1.117 billion is misstated due to difference between the book and bank balance amounting to P32.221 million caused by unadjusted items for the current and prior years; and,

The existence, validity and correctness of the Property, Plant

and Equipment (PPE) accounts with an aggregate balance of P1.471 billion could not be ascertained due to unreconciled difference of P305.541 million between the accounting records and the Report on the Physical Count of PPE (RPCPPE).

Municipalities:

Alubijid Qualified/ Modified

Due to the (1) the unreconciled difference between the cash balance per book and the cash balance per bank in the amount of P7,422,823; and (2) the unreliability of the Construction-in-Progress account totaling P47,900,787.

409

LGU AUDIT


Balingasag

Qualified/ Modified

The accuracy and correctness of Cash-in-Bank, Local Currency, Current Account amounting to P30,604,750 deposited as Trust Fund pertaining to the downloaded funds from National Agencies could not be easily ascertained due to unreconciled cash balances between the Accounting and Treasurer’s records caused by the failure of the Treasurer to maintain cash book and other essential records contrary to Memorandum of Agreements (MOA) and Section 310 of RA 7160; and,

The Municipality failed to reconcile cash balances of Accountable Officers (AOs) totalling P237,289 due to the failure to maintain Subsidiary Ledger thereby weakening internal controls which renders doubtful the reliability of cash balances recorded in the books of accounts.

Balingoan Qualified/

Modified Prior and current year cash advances amounting to

P739,197.86 remained unliquidated/unsettled as of December 31, 2017;

RPT/SET Receivable were not established at the beginning of the year;

Local Road Networks were not recognized in the books of the agency; and,

Completed projects recorded in the Construction in Progress accounts were not reclassified or adjusted to its appropriate asset account, thereby affecting the reliability and fairness of the financial statements.

Binuangan Qualified/ Modified

The Cash in Bank–Local Currency, Current Account (CIB–LCCA) with a reported amount of P53,819,312 is misstated and unreliable due to

a) presence of unrecorded, unadjusted, and unidentified book reconciling items of P419,959;

b) unadjusted prior year bank reconciling items of P7,070; and

c) presence of stale checks amounting to P6,500 that are still included in the outstanding checks;

The recorded balance of Property, Plant, and Equipment (PPE) account amounting to P56,102,687 is unreliable due to

a) non–provision of depreciation expense for the period; and,

b) recognition of accumulated impairment losses on some PPE accounts as contra assets even though such were not recognized in the prior years.

410

LGU AUDIT


Cash advances totaling P80,747 remained unliquidated as of December 31, 2017 and additional cash advances were granted to officers and employees of the Municipality with unsettled prior cash advances that does not comply with Section 89 of Presidential Decree No. 1445 and Items 5.1 and 5.8 of COA Circular No. 97–002 dated February 10, 1997.

Claveria Qualified/

Modified The existence and validity the Property, Plant and Equipment

account balances totaling to P295,965,808 could not be ascertained due to the non- recording of the costs of the land and land improvements, buildings and structures and other PPE accounts in the Inventory report of the Municipal General Services Office (MGSO) and the failure of the Municipal Accounting Office and the MGSO to reconcile their respective records thus, rendering the PPE account balances unreliable.

Gitagum Qualified/

Modified Reliability, validity and existence of Property Plant and

Equipment account amounting to P63.895 million could not be ascertained since the Municipality failed to observe proper management and accounting thereof and reconcile account balances against the submitted annual physical inventory report contrary to the provisions of COA Circular No. 92-386 and Section 124 of the NGAS Manual; and,

The proper recognition and measurement of Public Infrastructure Assets recorded in the Registry of Public Infrastructures and infra assets completed in CY 2016 onwards was not observed contrary to COA Circular 2015-008 thereby understating the infrastructure asset accounts and depreciation expense.

Initao Qualified/ Modified

The reliability, validity and existence of Property Plant and Equipment (PPE) accounts amounting to P267.603 million could not be ascertained because of the LGU’s failure to submit the CY 2017 Report on the Physical Count of Property Plant and Equipment (RPCPPE) reconciled with accounting and property records, non-recording of 50% of public infrastructure assets from the Registry of Public Infrastructures, and not providing for the correct depreciation and adequate disclosures in the notes to financial statements, contrary to Section 124 of the NGAS Manual, COA Cir. No. 2015-008 and PPSAS 17, respectively; and

The reliability and accuracy of Property, Plant and Equipment (PPE) accounts totaling P168,768,060.45 cannot be ascertained due to: a) failure of the management to conduct physical inventory; and b) non-maintenance of Property Cards (PC) and PPE Ledger Cards (PPELC) by the Accounting Office, hence, contrary to pertinent provisions of accounting and auditing rules and regulations on property management.

411

LGU AUDIT


Jasaan Qualified/ Modified

The Real Property Tax Receivable and Special Education Tax Receivable as of December 31, 2015 totaling P3,775,536 and P5,775,873, respectively, were closed against the Government Equity thereby understating its Government Equity Account;

Completed projects funded by National Government Agencies amounting to P23,579,329 were not recorded as Assets in the books of the Municipal Government contrary to IPSAS 17 as prescribed under COA Resolution No. 2014-003 dated January 24, 2014, thereby understating the assets and equity accounts of the Municipal Government; and,

The existence and validity the Property, Plant and Equipment account balances totaling to P177,904,568 could not be ascertained due to the non- recording of the costs of the land and land improvements, buildings and structures and other PPE accounts in the Inventory report of the Municipal General Services Office (MGSO) and the failure of the Municipal Accounting Office and the MGSO to reconcile their respective records thus, rendering the PPE account balances unreliable.

Kinoguitan Qualified/ Modified

PPE accounts amounting to P110,863,488.53 are unreliable due to non-conduct of actual physical inventory and completed public infrastructure projects amounting to P13,808,276.12 were not included as PPE, thereby casting doubts on the fairness of its presentation.

Lagonglong Unqualified/

Unmodified

Laguindingan Disclaimer The Municipality was not able to submit financial reports together with the paid disbursement vouchers, payrolls, liquidation reports, report of collections and deposits, and bank reconciliation statements within the period prescribed in Section 7.2.1 (a) of COA Circular No. 2009-006 and Section 3.2 of COA Circular No. 96-011 thus, hinders the prompt and timely audit of the LGU’s transactions and reports.

Libertad Qualified/ Modified

The proper recognition and measurement of Public Infrastructure Assets amounting to P15.882 million were not observed, excluding those recorded in the Registry of Public Infrastructures and did not provide depreciation for those infrastructure assets completed in CY 2016 onwards, contrary to COA Circular 2015-008, thereby the assets were not fairly presented in the financial statements.

Lugait Qualified/ Modified

The validity and accuracy of the balances could not be verified and ascertained due to non-preparation of updated general and subsidiary ledgers; and,

The non-recognition of depreciation expense for depreciable assets amounting to P84,110,687 rendered unreliable the Property, Plant, and Equipment accounts.

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LGU AUDIT


Magsaysay Qualified/ Modified

Long outstanding Advances to Officers and Employees for travel, special purpose and time-bounded undertakings including confidential/intelligence funds amounting to 1,180,450 remained unliquidated as at year-end, resulting in the overstatement of assets and understatement of expenses reflected in the financial statements;

Other Receivables totaling 131,989 which are long outstanding and remained uncollected and non-moving since 1982 affects the fair presentation of the financial statements; and,

Further, the Construction in Progress Accounts as at year-end were not adjusted and closed to the appropriate asset accounts for the completed projects costing 5,775,089, contrary to COA Circular No. 2015-009 and Paragraph 27 of PPSAS No. 1.

Manticao Qualified/ Modified

Fund Transfers from NGA amounting to a total of P12,168,992 was not recorded in its proper asset account, thus understating the assets of the LGU by the same amount; and,

The non-recognition of depreciation expense for various depreciable PPE with a total cost of P57,518,565 rendered the PPE balance as of December 31, 2017 unreliable.

Medina Qualified/ Modified

Bank Reconciliation Statements and its supporting schedules were not submitted to the Office of the Auditor within the reglementary period thus, the existence, accuracy and correctness of the recorded Cash in Bank balance could not be verified;

Advances to Officers and Employees for travel, special purpose and time-bounded undertakings amounting to P1.22 million remained unliquidated as of December 31, 2017, resulting in understatement of recorded expenses as at year-end, thereby affecting the fair presentation of the financial statements;

The Construction in Progress Accounts as at year-end were not adjusted and closed to the appropriate asset accounts for the completed projects costing P40.91 million, thus, affecting the fair presentation of the accounts in the financial statements;

Prior year’s audit observation and recommendation on the conduct and submission of the Physical inventory of Property, Plant and Equipment amounting to P122.53 million as at year-end casting doubt on their validity, existence and propriety; and,

The non-preparation of Inventory and Inspection Report of Unserviceable Property (IIRUP) were still not implemented, hence, unserviceable motor vehicles, IT equipment, and properties of undetermined value were still carried under PPE account in the financial statements.

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LGU AUDIT


Naawan Qualified/ Modified

Due to Management’s failure to implement our prior year’s audit observation and recommendation regarding the conduct of physical count and the preparation/submission of Report on Physical Count of PPE (RCPPE) and Inventory and Inspection Report of Unserviceable Property (IIRUP) of Property and Plant and Equipment amounting to 92,713,763.00 which affected the fair presentation of Property, Plant and Equipment accounts.

Opol Adverse The existence, validity and reliability of the year-end balance of the Property, Plant and Equipment (PPE) accounts totaling to P213,498,003 cannot be ascertained due to

a) absence of Property, Plant and Equipment Ledger Cards;

b) various Construction-in-Progress accounts were not closed to appropriate asset accounts; and,

c) unreconciled balances between accounting records and Report on Physical Count of Property, Plant and Equipment (RPCPPE);

No depreciation expense was recorded for Property, Plant and Equipment (PPE) under Special Education Fund (SEF) and Trust Fund (TF) valued at P5,938,991;

The delay in the preparation of Bank Reconciliation Statements (BRS) casted doubts on the veracity of the reported balance of Cash in Bank – Local Currency account of P93,852,931 due to noted difference between the balance per book and the balance per bank in the amount of P10,078,883;

Failure of the Municipality to reconcile, identify, and properly classify balances of asset and liability accounts totaling P8,593,613 and P18,709,533, respectively, due to non-maintenance of subsidiary ledgers, thus rendering the balances unreliable;

Failure of the Municipality to recognize the prior years’ unexpended balances of LDRRMF totaling to P12,769,860 as Trust Liability in the Trust Fund books thus, affecting the fair presentation of the financial statements; and,

The Municipality uses the cash basis in recognizing revenue from rental fees on market stalls contrary to Philippine Public Sector Accounting Standards (PPSAS) No. 1 that requires the use of accrual basis of accounting, thus resulted to unrecorded receivables of P528,949 as of December 31, 2017.

Salay Unqualified/ Unmodified

Sugbongcogon Qualified/ Modified

The reported balance of the inventories account with a total of P1,188,598.51 is unreliable due to:

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a) non–moving individual inventory items that caused its misstatement;

b) nconsistent application of the perpetual method in accounting by treating inventoriable costs as outright expense;

c) non preparation of Supplies Ledger Cards (SLC) and Summary of Supplies and Materials Issued (SSMI); and,

d) failure to conduct regular physical count of inventories;

The reported balance of Property, Plant, and Equipment (PPE) account amounting to P139,501,565.00 as of December 31, 2017 is unreliable due to

a) late submission of Report on Physical Count on Property, Plant, and Equipment (RPCPPE);

b) lack of RPCPPE in other PPE items and non–reconciliation of amounts per RPCPPE and per financial statements; and,

c) non-provision of depreciation on PPE items amounting to P95.7M.

Tagoloan Qualified/ Unmodified

There is reason to believe that the 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 for the following reasons:

a) failure to prepare and submit bank reconciliation statements which renders the cash account unreliable;

b) failure to conduct physical inventory of property, plant, and equipment account and maintain subsidiary ledgers thereof which renders PPE account unreliable;

c) failure to submit journal entry vouchers in the disbursement of public funds which renders the income and expense account unreliable; and,

d) failure to maintain registries and unfilled obligation request which renders the SAOB unreliable.

Talisayan Qualified/ Modified

Bank Reconciliation Statements and its supporting schedules were not submitted to the Office of the Auditor within the reglementary period, thus, the existence, accuracy and correctness of the recorded Cash in Bank balance could not be verified;

The Construction in Progress Account as at year-end was not adjusted and closed to the appropriate asset accounts for the completed projects costing P1.92 million, contrary to COA Circular No. 2015-009 and Paragraph 27 of PPSAS No. 1, thus, affecting the fair presentation of the financial statements.

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LGU AUDIT


Villanueva Qualified/ Modified

The Municipality failed to maintain the subsidiary ledgers to support the individual general ledger accounts under the General Fund, Special education Fund and Trust Fund, thus, the validity of the balances reported could not be determined.

Region XI – Davao Region

Compostela Valley Qualified/ Modified

Accounting errors/omission and deficiencies in recording Assest Account (Solidarity Ring) that affected the fair presentation of the financial statement;

Overstatement of liability account due to errors and omission in recording transactions;

Unreconciled differences between the per audit, accounting and property records;

Non-conduct of physical count of inventories and non-maintenance of stock cards and supplies ledger cards for inventory accounts;.

Non-presentation on a comparative basis of each item in the consolidated financial;

Additions/acquisitions during the year were not presented in the Inventory accounts. Expensed/issuances of inventory during the year were not disclosed;

Road Network System shall be disclosed with the following information on total number of kilometers, roads addition and major repairs, derecognition and impairment during the year, as required in COA Circular 2015-008 dated November 23, 20015 and the basis of cost recorded in the recognition of the assets taken from the registry of public infrastructure was not disclosed; and,

The indicated additions/acquisitions amounting to P 463,200,366.01 (Note 9) is inconsistent with the cash outflows (investing activities ) for the purchase of PPE amounting to P 60,241,265.00.

Municipalities:

Compostela Qualified/ Modified

The reported account balances on the Financial Statements has accounting deficiencies, casting doubt on the fairness and reliability of the presentation thereof.

Laak Qualified/

Modified The reported account balances on the Financial Statements

has accounting errors/omissions and deficiencies, casting doubt on the fairness and reliability of the presentation thereof.

Mabini Qualified/

Modified Accounting deficiency amounting to P18,931,401.46 and the

following other deficiencies:

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a) Road Network System amounting to P9,405,684.93 shall be disclosed with the following information on total number of kilometers, roads addition and major repairs, derecognition and impairment during the year, as required in COA Circular 2015-008 dated November 23, 20015; and,

b) The indicated additions/acquisitions amounting to

P39,355,954.78 (Note 8) is inconsistent with the cash outflows (investing activities ) for the purchase of PPE amounting to P 25,099,921.44 as shown in the Cash Flows Statement.

Maco Qualified/ Modified

Accounting deficiencies totaling P52,944,593.81;

Additions/acquisitions during the year were not presented in the Inventory accounts. Expensed/issuances of inventory during the year were not disclosed;

Road Network System amounting to P19,388,730.83 shall be disclosed with the following information on total number of kilometers, roads addition and major repairs, derecognition and impairment during the year, as required in COA Circular 2015-008 dated November 23, 20015;

The indicated additions/ acquisitions amounting to P112,061,108.86 (Note 8) is inconsistent with the cash outflows (investing activities ) for the purchase of PPE amounting to P72,791,170.22 as shown in the Cash Flows Statement; and,

Nature and extend of prior period adjustment were not disclosure despite prior period adjustment amounting to P1,235,864.84 and P2,293,913.06 for CY 2017 and 2016, respectively.

Maragusan Qualified/ Modified


Mawab Qualified/ Modified


Monkayo Qualified/ Modified


Montevista Qualified/ Modified


Nabunturan Qualified/ Modified

The reported account balances on the Financial Statements has accounting errors/omissions and deficiencies, casting doubt on the fairness and reliability of the presentation thereof.

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New Bataan Qualified/ Modified

The reported account balances on the Financial Statements has accounting errors/omissions and deficiencies, casting doubt on the fairness and reliability of the presentation thereof.

Pantukan Qualified/ Modified

Accounting deficiency amounting to P9,818,141.35;

Road Network System amounting to P47,305,694.75 shall be disclosed with the following information on total number of kilometers, roads addition and major repairs, derecognition and impairment during the year, as required in COA Circular 2015-008 dated November 23, 20015; and,

The indicated additions/ acquisitions amounting to P 86,748,054.16 (Note 8) is inconsistent with the cash outflows (investing activities ) for the purchase of PPE amounting to P 47,589,331.99 as shown in the Cash Flows Statement.

Davao del Norte Qualified/ Modified

Cash in bank is understated by P61,443,323.68 for reconciling item not adjusted/recorded in the books, due to delayed preparation of bank reconciliations statements, and lack of information on some deposits;

Construction in Progress (CIP) account under general fund (GF) and special education fund (SEF) pertaining to completed projects are overstated by P17,475,473.15 and P 12,502,050.11, respectively, and correspondingly understated the specific public infrastructure and government asset account of same amount; and,

Due to BIR account is understated by P1,567,708.71 due income taxes on year-end bonus of government officials and employee were not deducted/withheld.

Cities:

IGACOS Qualified/ Modified

Property, Plant and Equipment (PPE) with net book value of P808,159,993.59 or 51.63% of the City’s total assets amounting to P1,565,193,636.49 as at December 31, 2017 was not supported with the physical count of the properties duly reconciled with the balances per books as required under existing regulations, thus, casting doubts on the existence, accuracy and reliability of the reported PPE of the City;

Completed infrastructure projects costing P5,921,004.53 under the Bottom-Up Budgeting (BuB) Program were not transferred to their appropriate Property, Plant and Equipment accounts thereby precluding the provision of corresponding depreciation and not fairly presenting said accounts in the year-end financial statements;

Depreciation was not provided on depreciable Property, Plant and Equipment costing P21,764,539.23, thus, overstating the asset and the government equity accounts in the year-end financial statements; and

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Loans amounting to P10,020,320.03 arising from a joint venture entered into by the City with the National Housing Authority (NHA) for a joint resettlement project was recorded under the Other Payables account instead of Loans Payable – Domestic contrary to provisions of COA Circular No. 2015-009, thus, affecting the fair presentation of the accounts in the financial statements as at December 31, 2017.

Panabo City Qualified/ Modified

Accuracy of account Due to National Agencies amounting to P30,516,362.23 as at December 31, 2017 is uncertain owing to the non-adjustment of liquidation or fund utilization received from various national agencies; erroneous classification of account; and long outstanding and non-moving funds, thus affecting reliability of providing useful information for decision making and faithful representation of the agency’s Statement of Financial Position, Performance and/or Changes in net assets/equity;

Cost of sales on lawn lots and family estates are not recognized when sold resulted to a net effect of overstating the reported surplus in the operation of Cemetery as at December 31, 2017 inconsistent to public sector accounting standards on inventories held for sale; and,

Property losses whether in transit or due to casualty or force majeure totaling P2,182,004.00 overstates the reported Property, Plant and Equipment as at December 31, 2017 owing to the failure of the concerned official to render report on such loss.

Tagum City Qualified/ Modified

Due to inadequate and unreconciled records of inventory accounts totaling P112,447,970.00 of which a difference of P77,260,164.52 or 68.71% thereof is noted, as compared to the report submitted by the General Services Office, resulting in the overstatement of the asset and income accounts, understatement of expenses, and casting doubt on the existence, accuracy and completeness of the inventory balances.

Municipalities:

Asuncion Disclaimer The Municipality incurred significant delay in the submission of bank reconciliation statements and failed to submit the supporting documents of the bank reconciliation statements for the months of April to December 2017 pertaining to its Cash in Bank – Local Currency, Current Account for All Funds with a balance of P75,182,113.21 as of December 31, 2017 which precluded the timely inquiry, post-audit/verification, analysis and evaluation of transactions of said account;

The Municipality failed to submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) due to untimely conduct of the physical count of the Municipality’s inventories and properties in February to March 2017 which

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precluded the timely inquiry, post-audit/verification, analysis and evaluation of the reliability and accuracy of the balances of the Property, Plant and Equipment account amounting to P 178,786,363.37 as at December 31, 2017 presented in the financial statements; and,

The Municipality failed to submit the Disbursement Vouchers and its supporting documents, Report of Collection and Deposits including the official receipts and validated deposit slips, and liquidations reports for the months of September to December 2017, which precluded the timely inquiry, post-audit/verification, analysis and evaluation of transactions and operations of the Municipality.

Braulio E. Dujali Unqualified/ Unmodified

Carmen Unqualified/ Unmodified

Kapalong Qualified/ Modified

The total property, plant and equipment costing P463,430,860.79 per Report on the Physical Count of Property, Plant and Equipment does not tally with the amount presented in the financial statements at a cost of P461,490,853.71 as at December 31, 2017 resulting to a net variance of P1,940,007.08 of which differences for each property, plant and equipment item ranges from P2,790.00 to P36,913,264.44, thus, casting doubts on the accuracy and reliability of the net balance of the Property, Plant and Equipment account in the amount of P293,669,320.76 presented in the year-end financial statements as at December 31, 2017.

New Corella Unqualified/ Unmodified


The total property, plant and equipment costing P77,064,739.89 per Report on the Physical Count of Property, Plant and Equipment does not tally with the amount presented in the financial statements at a cost of P178,534,550.65 as of December 31, 2017 resulting in a variance of P101,469,810.76, thus, casting doubt on the accuracy and reliability of the reported properties of the Municipality in its year-end financial statements; and,

The reciprocal accounts Subsidy from and Subsidy to Other Funds were not reconciled thereby showing a difference of P1,975,480.00 and P18,520.00 respectively contrary to the generally accepted accounting principle of reciprocity, thus casting doubt as to the fairness of presentation of the said accounts in the year-end financial statements.

Santo Tomas Unqualified/

Unmodified

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Talaingod Qualified/ Modified

The physical inventory count conducted by the Municipality in CY 2017 was not done through an inventory committee and does not include all of the plant, property, and equipment owned by the Municipality. As a consequence, the total Property, Plant and Equipment costing P290,658,127.47 per Report on the Physical Count of Property, Plant and Equipment does not tally with the amount presented in the financial statements at a book value of P248,208,875.08 as at December 31, 2017 which, at net depreciation, represents 59.96% of the total assets of the Municipality resulting in a variance of P42,449,252.39, thus, the existence of the items composing the Property, Plant and Equipment account, the proper valuation of its balance as at December 31, 2017, and the computation of depreciation expenses, as presented in the financial statement of the Municipality are rendered doubtful.

Davao del Sur Qualified/ Modified

Non-reconciliation of book balance of Inventories and Property, Plant and Equipment(PPE) accounts with the balance per Report of Physical Count of PPE; Substantial amount of Due from Non-Governmental Organizations/People’s Organization remained unliquidated; Unreconciled remittances to BIR, Phillhealth, GSIS and PAG-ibig as well as the non-remittance/liquidation of funds transferred by various NGAs to the Province of Davao del Sur.

Cities:

Davao City Qualified/ Modified

Non-recognition in the books of accounts infrastructure assets worth P869 Million to meet the 50% recognition as of 31 December 2017 as required under prescribed accounting guidelines;

P129.7 Million worth of inventory items out of the 486 Million year-end balances of inventory accounts are no longer existing but still carried in the books;

P64.6 Million worth of projects out of the 20% development fund showed zero utilization, and,

The prior years’ LDRRMF registered only 23.7% utilization resulting in idle funds worth P553.6 Million.

Digos City Qualified/ Modified

The existence and condition of agency’s Property, Plant and Equipment valued at P291,940,316.16 or 17.6% of its total assets of P1,651,991,803.10 as at December 31, 2017 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), thereby casting doubt on the existence and accuracy of the balances thereof;

The Real Property Tax Receivable was understated by P4,684,452.60 due to erroneous accounting entry made during the year, thus, affect the fair presentation of the City’s financial statements for the year ended 2017; and

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Projects already completed but still recorded as Construction in Progress -Infrastructure Assets and Construction in Progress - Building and Other Structures amounting to P19,162,035.34 and P3,182,247.70 affect the fair presentation of financial statements due to the non-provision of the related depreciation of the said assets.

Municipalities:

Bansalan Unqualified/ Unmodified

Hagonoy Qualified/ Modified

Absence of records required under accounting rules and regulations in the New Government Accounting System, thus, affecting the fair presentation of the financial statements affects the reliability and accuracy of the amount presented as PPE.

Kiblawan Qualified/ Modified

Absence of records required under accounting rules and regulations in the New Government Accounting System, thus, affecting the fair presentation of the financial statements affects the reliability and accuracy of the amount presented as PPE.

Magsaysay Unqualified/ Unmodified

Malalag Qualified/ Modified

The Property, Plant and Equipment (PPE) with the net book value of P161,950,743.97 as of December 31, 2017 was not supported with the physical count of the properties duly reconciled with the balances per books as required under existing regulations; and,

The accuracy, validity and correctness of the Cash in Bank accounts and the related income and expense accounts cannot be ascertained due to the existence for over five (5) years of bank and book reconciling items which have accumulated to P1,557,777.29 as at December 31, 2017, in violation of Section 3 of COA Circular No. 96-011 and Section 59 of the Manual on NGAs (for Local Government Units)

Matanao Unqualified/ Unmodified

Padada Qualified/ Modified

Non-conduct of complete annual physical count of PPE and non-submission of RPCPPE for CY 2016


12% of the total PPEs were still unidentified and have no corresponding PPE ledger Cards (PPELC), contrary to the requirements of the Manual on the New Government Accounting System for LGUs; b). PPE and Inventory accounts are not supported with the physical count of the properties (RPCPPE) and inventories (RPCI) duly reconciled with the balances per books as required under existing

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regulations; and c). The accuracy, validity and correctness of the Cash in Bank accounts and the related income and expense accounts cannot be ascertained due to the existence for over six (6) years of bank and book reconciling items which have accumulated to P5,625,742.61 as of December 31, 2017.

Sulop Qualified/ Modified

The unreconciled amount of P475,719.52 between the Cash Flow Statement (under Investing Activities – Cash Outflow – Purchase or Construction of PPE totaling P25,581,615.09) and the Notes to Financial Statements (under Property, Plant and Equipment – Addition amounting to P25,105,895.57) as at December 31, 2017; b). 2. Non-inclusion in the conduct of Physical Count of the Property, Plant and Equipment the recorded PPE under SEF and Trust Fund amounting to P428,739.23 and P377,463.96 respectively.

Davao Occidental Qualified/ Modified

Owing to the construction of buildings with a net booked value of P 10,433,823.85 on lands not owned by the province nor with existing valid conveyances, thus, full ownership belongs to the respective owner of the lands where the buildings were constructed by virtue of the right of accession, consequently, the Asset Account - Property, Plant and Equipment is overstated by P 10,433,823.85.

Municipalities:

Don Marcelino Qualified/ Modified

The carrying value of LGU’s Property, Plant and Equipment account amounting to P106,269,502.43 is unreliable considering the disparity noted between the Accounting Records and General Services Records totaling to P46,600,120.15 in violation to Section 114, Paragraph 4 of Manual on New Government Accounting System for LGUs.

The purchases made on Municipality’s supplies and materials amounting to P1,526,539.01 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;

The Cash in Bank – LCCA balance totaling to P 82,419,468.25 is unreliable due to absence of complete Bank Reconciliation Statements (BRS) supporting the verifiability of reported amount in violation to Section 74 of PD 1445 and Section 3.2 to 3.4 of COA Circular No. 96-011 dated October 2, 1996, thereby casting doubts on the propriety of bank accounts; and

The failure of the Municipality Collectors to remit the collections made to the Liquidating Officer/Municipal Treasurer on the prescribed date causing understatement of the Cash Local Treasury and revenue accounts amounting to P16,453.58 in violation to Section 29, Volume I of New Government Accounting System for LGUs, thereby exposing the government money to theft or misuse/disuse.

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LGU AUDIT


Jose Abad Santos Qualified/ Modified

The carrying value of LGU’s Property, Plant and Equipment account amounting to P206,821,304.77 is unreliable considering the disparity noted between the Accounting Records and General Services Records totaling to P11,441,075.38 in violation to Section 114, Paragraph 4 of Manual on New Government Accounting System for LGUs;

The recognition of supplies and materials purchased amounting to P1,034,858.76 was directly accounted as an 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; and,

The Cash in Bank – LCCA balance totaling to P51,936,913.56 is unreliable due to absence of complete Bank Reconciliation Statements (BRS) supporting the verifiability of reported amount in violation to Section 74 of PD 1445 and Section 3.2 to 3.4 of COA Circular No. 96-011 dated October 2, 1996, thereby casting doubts on the propriety of bank accounts.

Malita Qualified/ Modified

The unreliable balances of Property, Plant and Equipment accounts with net book value totaling P431,584,878.33 due to failure to complete the physical count and non-reconciliation of property record with book balances, affect the fair presentation of financial statements of the Municipality of Malita, Davao Occidental as at year-end.

Santa Maria Qualified/

Modified The carrying value of LGU’s Property, Plant and Equipment

account amounting to P194,701,371.31 is unreliable due to the disparity noted between the Accounting Records and General Services Records totaling to P11,532,223.30 in violation to Section 114, Paragraph 4 of Manual on New Government Accounting System for LGUs;

The purchases made on Municipality’s supplies and materials amounting to P2,231,710.42 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.

Sarangani Qualified/ Modified

The local government unit’s property, plant and equipment amounting to P123,867,380.11 were not reconcile to its property, plant and equipment ledger cards and not maintaining property cards thus may cause material misstatements in assets and related expense accounts to the financial statement, affected the fair presentation of financial statements of the Municipality of Sarangani, Davao Occidental as at year-end.

Davao Oriental Qualified/ Modified

Due to the non-submission of Bank Reconciliation Statements on four (4) bank accounts with an aggregate amount of P88,181,330.63;

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The Receivables account may be overstated due to the inability of the Province to recognize Allowance for Impairment despite the presence of dormant receivables amounting to P12,213,094.65; and,

Inconsistency on the balance of the Loans Payable between

the books and the records of the Municipal Development Fund Office (MDFO) amounting of P25,854,220.59 brought about by the improper accounting thereof; and the absence of reports on the status of funds received for the implementation of the PAMANA, SALINTUBIG and various BUB projects in the total amount of P23,009,771.64 along with the inconsistencies on several book balances as against the records of the Source Agency caused by poor maintenance of accounting records and improper accounting on the disbursement of the said funds thus precluding the review and audit of the transactions.

City:

Mati City Qualified/ Modified

Reconciling items in the Bank Reconciliation Statement totaling P20,585,472.76 that were either additions or deductions to book and bank balances as at December 31, 2017 remained unadjusted in the books; hence, the accuracy of the balance of Cash in Bank is doubtful;

A difference of P26,829,580.96 in the Cash in Bank balances

per ledger and per cashbook as at December 31, 2017 remained unadjusted due to the failure of the Accounting and Treasury office to conduct periodic reconciliation; thus, casting doubts on the accuracy and reliability of the Cash in Bank contrary to Section 111 of P.D. No. 1445;

Fund transfers to NGOs and POs totalling to P7,500,000.00

under the Trust Fund remain unliquidated, despite the lapse of more than two (2) years from the time the funds were release, due to the failure of the City to enforce liquidation; thus, casting doubts whether funds had been used for the intended purpose;

Non-adherence by the City to the rules and regulations in the

granting and liquidation of cash advances resulted to the accumulation of unliquidated balance totaling P13,137,525.21; thus, exposing government funds to risk of loss and misuse; and,

The Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) of the City reported a net variance of P57,546,622.61 against the balance reported in the books due to poor maintenance of records by the offices concerned resulting to the uncertainty of the balance of the PPE presented in the financial statements as at year-end.

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Municipalities:

Baganga Qualified/ Modified

Understated Cash – Local Treasury in the amount of ₽7,305,257.95 due to improper recording of transactions;

Improper recording of the Advances for Payroll account that resulted to understatement in the amount of ₽15,546,520.63;

Capital expenditures costing ₽21,447,349.82 for projects funded by various National Government Agencies were not recognized as assets;

The inclusion of unliquidated but expended cash advances totaling ₽4,146,273.65;

The non-reconciliation of records between the Accounting Office and General Service Office of its Property, Plant and Equipment totaling ₽192,435,498.20; and,

Non-provision of depreciation expenses for the depreciable Property, Plant and Equipment totaling ₽96,051,988.35.

Banaybanay Qualified/ Modified

The propriety and validity of Cash in Bank – Local Currency, Current Account (LCCA) totaling P41,177,240.43 for all funds could not be ascertained since bank reconciliation statements for a reporting period were not yet submitted, thereby rendering doubt on the accuracy of its reported balances;

Despite prior year’s observation, Real Property Tax (RPT) and Special Education Tax (SET) receivables were not established at the beginning of the year owing to lack of awareness and coordination between the Accounting and the Treasury offices thereby, understating the assets and other related accounts;

Despite prior year’s observation, the Municipality still failed to enforce the liquidation of long outstanding cash advances amounting to P32,691,428.97 due to lack of serious effort exerted for the recovery of unsettled/unliquidated balances thereby exposing government funds to possible loss or misuse; and,

The existence of the recorded Property, Plant and Equipment (PPE) totaling P112,848,092.39 could not be validated due to failure to conduct physical count of all its properties and to prepare and submit the corresponding report thereof thus casting doubt on the accuracy and reliability of the balance as at December 31, 2017.

Boston Qualified/ Modified

The Cash in Bank – Local Currency, Current Account (LCCA) totaling P68,605,639.27 could not be ascertained since bank reconciliation statements for a reporting period were not yet prepared and submitted, thereby rendering doubt on the accuracy of its reported balances;

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LGU AUDIT


Completed projects totaling P8,140,558.35 for projects funded by various national government agencies were not recognized as assets since the same were directly debited to Due to Other National Government Agencies (NGAs) thus affecting fair presentation of the accounts in the financial statements;

Non-liquidation of cash advances amounting to P15,588,590.97 which resulted to overstatement of total assets and understatement of the related expenses; and

The propriety of Property, Plant and Equipment (PPE) totaling P56,597,229.78 cannot be ascertained due to failure of the management to conduct physical count as of December 31, 2017.

Caraga Qualified/ Modified

Non-reconciliation of bank and book balances rendered doubt on the reliability and existence of the Cash in Bank balance of P117,698,360.22;

Failure to enforce settlements of total receivables from officers and employees of P79,021,894.24 resulted in overstatement of the assets and understatement of related expense accounts;

Non-recognition of receivables per issued Notices of Finality of Decision in total amount of P34,055,870.53 understated the receivables of the agency;

The transfers and subsidies to/from the General and Trust Fund books of the agency in the amount of P5,913,029.15 and P15,616,689.89, respectively, and the erroneous recognition of income in the Trust Fund books due to misclassification of P10,975,958.85 for unspent DRRM funds of CY 2014 to 2016, also rendered doubt on the accuracy of the reported balances; and,

Failure to conduct physical count of Property, Plant and Equipment with a net book value of P78,287,769.94 casted doubt on the accuracy of the reported balance at year-end.

Cateel Qualified/ Modified

The inclusion of unliquidated but expended cash advances amounting to P6,627,907.89;

Failure of the municipality to conduct annual physical count of its Property, Plant and Equipment (PPE) amounting to P161,302,898.66 that casted doubt on the accuracy and reliability of the reported balance

Non-provision of depreciation expense for PPE costing P37,036,587.41;

Understatement of the Cash-Local Treasury account by P563,499.91 due to improper keeping of accounts;

Unrecorded reconciling items resulting to understatement of the Cash in Bank account by P1,148,472.80; and,

427

LGU AUDIT


Completed projects amounting to P8,092,077.95 were not recognized as assets and improper recording of assets in the amount ofP12,821,060.10.

Governor Generoso Qualified/ Modified

The Municipality failed to conduct a physical inventory of its Property, Plant and Equipment (PPE) with a carrying value of P87,620,335.28 as of year-end, thus, the existence, condition and correctness of the said assets cannot be ascertained;

Despite prior year’s observation, the Municipality still failed to enforce the liquidation of cash advances amounting to P4,981,539.23 which remained outstanding for longer periods due to lack of serious effort exerted for the recovery of unsettled/unliquidated balances thereby exposing government funds to possible loss or misuse;

Balances of reciprocal accounts comprising Due from Other Funds and Due to Other Funds under General, Special Education and Trust Funds showed a net difference of P3,966,761.60 due to management’s failure to conduct a reconciliation of the two accounts, thereby casting doubt on the validity, reliability and accuracy of the balances;

The propriety and validity of Cash in Bank – Local Currency, Current Account (LCCA) totaling P1,606,818.74 in the General Fund could not be ascertained since bank reconciliation statement for a reporting period were not yet submitted, thereby rendering the accuracy and validity of reported balances of said account doubtful; and,

Funds transferred to component barangays totaling P1,527,500.00 were made without complete supporting documents and directly recorded as outright expense, despite similar observation issued in the prior years, thus casting doubt on the propriety of the transactions and exposing fund to risk of misuse or wastage in its utilization.

Lupon Qualified/ Modified

The existence of the recorded Property, Plant and Equipment (PPE) totaling P277,600,608.83 could not be validated due to failure to conduct physical count of all its properties and submit the corresponding report thereof thus casting doubt on the accuracy and reliability of the balance as at December 31, 2017;

Depreciation expenses on its depreciable Property, Plant and Equipment account with net book value of P94,936,543.44 as at December 31, 2017 were not provided because the Municipal Accountant failed to compute the same, thus overstating both the net income and book value of the depreciable assets;

The propriety and validity of Cash in Bank – Local Currency, Current Account (LCCA) totaling P48,645,607.47 could not be ascertained since bank reconciliation statements for a reporting period were not yet submitted, thereby rendering doubt on the accuracy of its reported balances;

428

LGU AUDIT


Despite prior year’s observation, the Municipality still failed to enforce the liquidation of long outstanding cash advances amounting to 12,809,920.23 due to lack of serious effort exerted for the recovery of unsettled/unliquidated balances thereby exposing government funds to possible loss or misuse;

Due from Officers and Employees with a reported balance of P2,065,829.95 includes large amount of unremitted collections and vague description of accounts due to management’s laxity in the monitoring of such balance which may result in wastage of fund and casting doubt in the validity of the account;

Balance of Due from National Government Organizations/People’s Organizations (NGOs/POs) account of P1,800,402.48 remained dormant and unliquidated for 3 to more than 9 years as at year-end, owing to laxity in the monitoring and evaluation of the fund transferred, thereby casting doubt on the fair presentation of the account; and,

Accounts Payable under the General Fund totaling P472,301.31 remained outstanding for seven (7) to fourteen (14) years due to management’s lack of monitoring of the said account, thus casting doubt on the reliability and accuracy of the balances.

Manay Qualified/

Modified Receivables from officers and employees were overstated by

P11,995,814.23 as at year end due to the failure to strictly enforce settlements thereof, thereby affecting the fair presentation of related accounts in the financial statements;

The recording of incurred expenses for repair and maintenance of various equipment in the Road Networks account in the total amount of P4,041,802.72 overstated the total reported assets;

The unrecorded equipment in the amount of P2,000,000.00 which was purchased using the 2016 Local Disaster Risk Reduction and Management Fund understated the total assets and the corresponding depreciation expense;

The failure to submit the report on the physical count within the prescribed deadline and maintain appropriate ledger and stock cards of the Property, Plant and Equipment with a net book value of P138,993,916.55 rendered doubt on the accuracy of the reported balances in the financial statements;

The inability to obtain sufficient appropriate evidence on the current year transactions in the total amount of P39,505,080.24 or 18% of total disbursements posed risk on the non-detection of errors and/or irregularities and prevented the application of substantive audit procedures.

429

LGU AUDIT



The propriety and validity of Cash in Bank – Local Currency, Current Account (LCCA) totaling P62,972,374.83 could not be ascertained since bank reconciliation statements for a reporting period were not yet submitted, thereby rendering doubt on the accuracy of its reported balances;

The existence of the recorded Property, Plant and Equipment (PPE) totaling P149,387,407.47 could not be validated due to failure to conduct physical count of all its properties and to prepare and submit the corresponding report thereof thus casting doubt on the accuracy and reliability of the balance as at December 31, 2017;

Cash advances amounting to P2,480,782.48 remained unliquidated as at year-end resulting to understatement of expenses and overstatement of asset and income accounts; and,

The validity, reliability and accuracy of the reciprocal accounts Due from/Due to Other Funds for the three funds could not be established due to unreconciled net balance of P3,190,271.00.

Tarragona Disclaimer Non-submission of 555 disbursement vouchers with an aggregate value of P63,628,364.33 for CY 2017 transactions clearly poses risk on the non-detection of errors and/or irregularities and prevented the application of substantive audit procedures to validate management's assertions and evaluate the accompanying disclosures.

Region XII - SOCCSKSARGEN

Cotabato City Qualified/ Modified

The Property, Plant and Equipment (PPE) accounts balances totaling P1,930,539,830.07 comprising 65% of the total assets remained unreliable due to inefficiencies in keeping property accounts and poor property management;

Verification of difference totaling P6,213,808.85 in Cash in Bank account balances between the books and banks were unduly stalled, as the submission of Monthly Bank Reconciliation Statements (BRS) on four accounts were either delayed or irregular; and

The Statement of Comparison of Budget and Actual Amounts was also not prepared, thus, the utilization of funds cannot be relied upon due to non-disclosure of the approved budget and actual disbursements.

North Cotabato Qualified/ Modified

Due to the absence of the complete inventory-taking of the Property, Plant and Equipment (PPE); and,

Lapse in review/validation of Other Receivables, Loans Receivable - LGU and Loans Receivable - Others accounts amounting to P2,789,666,497.00 and P42,913,465.11,

respectively, casting doubt on the reported balances.

430

LGU AUDIT


City:

Kidapawan City Qualified/ Modified

Various road maintenance projects of the City Government in Calendar Years 2016 and 2017 were recorded in the Road Networks account contarry to Item IV.7 of COA Circular No. 2015-008 and COA Circular No. 2015-009, thereby overstating the income and equity accounts at year-end by P7,848,875 and P13,143,901, respectively;

The non-provision of depreciation charges for ther

Infrastructure Assets account contrary to PPSAS 17-Property, Plant and Equipment (PPE) resulted to the overstatement of income and equity accounts by P2,975,734 and P 3,548,509, respectively; and,

Reconciling items totaling P1,136,739 that require

adjustments in the books of accounts had remained unadjusted contrary to Item 3.3 of COA Circular No. 96-011 resulting to the net overstatement of Cash in Bank-Local Currency accounts.

Municipalities:

Alamada Qualified/ Modified

Total balances of Property, Plant & Equipment per Report on the Physical Count of Property, Plant, & Equipment (RPCPPE) amounting to P152,911,917.17 did not reconcile with the balance per general ledger of P221,684,103.16, resulting to unaccounted difference of P68,772,185.99 thus management’s 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;

Unserviceable Properties with total net book value of

P10,405,979.66 were still included in the Property, Plant, and Equipment (PPE) account in the financial statements as of December 31, 2017 which is not in accordance with the Philippine Public Sector Accounting Standards (PPSAS) 17;

Depreciation charges of the Infrastructure Assets account for

Calendar Year 2017 were not provided by LGU Alamada contrary to PPSAS 17 – Property, Plant and Equipment, thus, resulting to overstatement of net income, equity and Property, Plant and Equipment accounts; and,

The year-end balances of Real Property Tax and Special

Education Tax Receivables in the Balance Sheet totaling P8,229,531.08 did not reconcile with the delinquent taxes amounting to P11,237,436.80 reported by the Municipal Treasurer’s Office reflecting a total difference of P3,007,905.72, thus casting doubt on the reliability of said accounts and the Deferred Real Property Tax and Special Education Tax Income.

431

LGU AUDIT


Aleosan Qualified/ Modified

Due to unreconciled general ledger balances of Property, Plant and Equipment (PPE) accounts with the Report on the Physical Count of Property, Plant and Equipment (RCPPE) by P237,141,112.04; and,

Non-provision of Depreciation on Properties, Plant and Equipment (PPE) of the Municipality totaling to P31,588,287.36 were not provided for Calendar Year 2017 and previous years.

Antipas Qualified/ Modified

Property, Plant and Equipment totalling ₽30,943,879.79 were

not provided with periodic depreciation in violation of PAG3 to IPSAS 17 hence the total carrying amount of the subject accounts is misstated; and,

The validity and accuracy of Property, Plant and Equipment could not be ascertained due to unreconciled discrepancy of P76,565,647.50 between the Report on Physical Count of PPE (RPCPE) and accounting records.

Arakan Qualified/ Modified

The validity and accuracy of Property, Plant and Equipment could not be ascertained due to unreconciled discrepancy of P 118,459,031.05 between the Report on Physical Count of PPE (RPCPPE) and accounting records; and,

Funds received from National Government Agencies amounting to P58,387,458.91 were recorded as Income (Subsidy from NGAs/LGUs/GOCCS) contrary to Annex B of COA Circular No. 2015-009 dated December 1, 2015 resulting to overstatement of income and understatement of liability account.

Banisilan Qualified/ Modified

The existence, completeness and accuracy of the Property, Plant, and Equipment (PPE) account balances of P194,714,909.18 cannot be validated due to non-conduct of physical inventory and reconciliation of the inventory report against the accounting records and no provision for depreciation of fixed assets; and,

The unliquidated cash advances granted to officers and employees totaling P7,488,884.31 had caused the understatement of the expenses and overstatement of the receivable and equity accounts.

Carmen Qualified/

Modified Inclusion of unserviceable Proprty, Plant and Equipment

totaling P4,971,380.51 under the PPE accounts which may mislead readers on the actual condition of the agency's properties;and,

The validity of long dormant Loans Receivable-Others

account amounting to P945,250.00 were doubtful of

collection.

Kabacan Qualified/

Modified Unresolved difference of P217,975,435.58 between the

balances per books and the inventory reports of the Property,

Plant and equipment, thus affecting the reliability of the said

account.

432

LGU AUDIT


Libungan Qualified/

Modified The accuracy, reliability and existence of the Property, Plant

and Equipment account amounting to P246,113,802.87 cannot be ascertained due to the inadequacy of property records and failure of the LGU to conduct the annual physical count, thus reconciliation with the accounting records cannot be validated.

M'lang Qualified/

Modified The existence, valuation and reliability of the Property, Plant

and Equipment (PPE) with a net book value of

P183,803,870.42 cannot be ascertained; and,

Real Property Tax and Special Education Tax Receivables

accounts in the amount of P22,203,850.57 and

P22,147,330.51, respectively, and their corresponding

Deferred Credits accounts, cannot be ascertained due to

various deficiencies/inaccuracies in recording the

transactions, thereby affecting the fair presentation of the

accounts in the financial statements.

Magpet Qualified/

Modified The validity and accuracy of Property, Plant and Equipment

could not be ascertained due to unreconciled discrepancy of

P238,685,878.49 between the Report on Physical Count of

PPE (RPCPPE) and accounting records;

Land Improvements and Infrastructure Assets accounts

costing P7,301,992.69 and P151,934,533.12, respectively, or

a total of P159,236,525.81 were not provided with periodic

depreciation in violation of PAG3 to IPSAS 17 hence the total

carrying amount of the subject accounts is misstated; and,

Net reconciling items totaling P140,496.78 remained unadjusted in the books of accounts at year-end due to absence of pertinent documents thus affecting the accuracy of the reported balance of the Cash in Bank account contrary to COA Circular No. 96-011 dated October 2, 1996.

Makilala Qualified/

Modified The correctness, validity and accuracy of Property, Plant and

Equipment account balance could not be ascertained due to unreconciled variance of P114,228,836.85 between the Report on Physical Count of PPE (RCPPE) and accounting records.

Matalam Qualified/

Modified The existence, valuation and accuracy of the Property, Plant

and Equipment (PPE) accounts with a net carrying value of P426,138,649.33 cannot be ascertained due to deficiencies/inaccuracies in reporting the transactions, thereby affecting the fair presentation of the accounts in the financial statements; and,

Various supplies and materials totaling P1,719,874.51 were directly charged to expense accounts without observing the perpetual inventory method, thus understating the inventory accounts.

433

LGU AUDIT


Midsayap Qualified/

Modified Unreconciled Property, Plant and Equipment of

P93,512,710.27 per Report on the Physical Count of

Property, Plant and Equipment and accounting records and

the inclusion of unserviceable properties in the book of

accounts valued at P7,424,784.28 resulted to misstatements

of affected accounts in the financial statements as of

December 31, 2017.

Pigcawayan Qualified/

Modified Due to non-reconciliation of the balance of Property Plan and

Equipment account presented in Report of Physical Count of

Property, Plant and Equipment (RPCPPE) and balance

reported in the financial statements, thus resulting to

unaccounted difference of P65,598,792.11; and,

Erroneous recording of Local Disaster Risk Reduction and

Management rescue equipment and fire fighting accessories

under MOOE account amounting to P293,410.00.

Pikit Qualified/

Modified Based on the unreconciled general ledger balances of

Property, Plant and Equipment (PPE) accounts with the Report on the Physical Count of Property, Plant and Equipment (RCPPE) by P83,796,607.95;

Non-provision of Depreciation on Properties, Plant and Equipment (PPE) of the Municipality totaling to P25,157,611.93 for Calendar Year 2017 and previous years; and,

Erroneous charging to MOOE of disbursements to 20% of Public Infrastructure Projects amounting to 12, 494,321.60.

President Roxas Qualified/

Modified The validity and accuracy of Property, Plant and Equipment

could not be ascertained due to unreconciled discrepancy of

P78,571,801.85 between the Report on Physical Count of

PPE (RPCPPE) and accounting records and, Property, Plant

and Equipment totalling ₽36,010,224.28 were not provided

with periodic depreciation in violation of PAG3 to IPSAS 17

hence the total carrying amount of the subject accounts is

misstated.

Tulunan Qualified/

Modified The valuation and reliability of Real Property Tax (RPT) and

Special Education Tax (SET) Receivables with a balance of

P8,496,578.75 and P8,488,693.27 and their corresponding

Deferred Credits accounts cannot be ascertained due to

deficiency in recording the accounts, hence affecting the fair

presentation of the accounts.

Advances to Contractor account amounting to P3,739,976.47

remain unliquidated as of December 31, 2017 despite the

termination of the contract for the Rehabilitation of Paraiso-

Daig Farm to Market Road on September 4, 2015, thereby

overstating the said account; and,

434

LGU AUDIT


Various supplies and materials totaling P2,244,108.52 were

directly charged to expense accounts without observing the

perpetual inventory method, thus understating the said

inventory account.

Sarangani Qualified/ Modified

PPE amounting to P 1.13 billion not reliable due to incomplete Report on Physical Count of PPE; Non settlement of cash advances and fund transfer amounting to 52.80 affects accuracy of receivables and expenses;non recording of issuances of supplies and materials affects Inventory amounting to P62.32 million.

Municipalities: Alabel Qualified/

Modified The accuracy of the Property, Plant and Equipment accounts

amounting to P227,598,776.29 was doubtful due to

incomplete physical inventory on all local government unit’s

properties; and,

Tthe accuracy and validity of the Cash and Cash Equivalent

account amounting to P142,015,669.57 could not be

ascertained due to incomplete preparation of the bank

reconciliation statements (BRS), existence of stale checks

and unadjusted reconciling items in BRS.

Glan Qualified/

Modified Due to unreliability of Property, Plant and Equipment account

amounting to P363,059,199.79, net of accumulated depreciation, as of December 31, 2017.

Kiamba Qualified/

Modified The capital expenditures from the Trust Liability-DRRM Fund

amounting to P12,858,439.92 were not recorded in the books

as assets;

The current portion of Loans Payable-Domestic amounting to

P8,201,333.27 was not recognized under current liabilities;

The accuracy of the Property, Plant and Equipment account

as of year-end amounting to P109,123,692.22, net of

Construction in Progress is doubtful due to non-completion of

the physical inventory; and,

Reconciling items remained unadjusted and repeatedly

presented in the bank reconciliation statements amounting to

P1,963,297.59.

Maasim Qualified/ Modified

The accuracy of the account Property, Plant and Equipment (PPE) amounting to P166,531,723.14 is doubtful due to non-reconciliation of the General Services Office (GSO) and the Municipal Accounting Office (MAO) records and non-recognition of depreciation expense for some items.

435

LGU AUDIT


Maitum Qualified/ Modified

The accuracy of the Property, Plant and Equipment account amounting to P193.56M, net of Construction in Progress is doubtful due to non-reconciliation of General Service Office and Accounting Office records and dormant Construction in Progress accounts for more than three (3) years; and,

The accuracy and validity of the Cash in Bank accounts amounting to P136.9M could not be ascertained due to incomplete preparation of the bank reconciliation statements (BRS), unreconciled records, unadjusted stale checks, unadjusted reconciling items in BRS and unrecorded deposit accounts. Lastly, the account Other Receivables in the General Fund amounting to P1.2M is doubtful due to its dormancy for over 10 years.

Malapatan Qualified/


amounting to P300,266,620.66, net of accumulated depreciation, due to the absence of Report on Physical Count of Property, Plant and Equipment and non-reconciliation of the GSO with accounting records;

The inaccuracy of receivable and expenses is doubtful due to non-settlement of cash advances amounting to P52,091,924.92 and absence of substantiated liquidation report for Advances to Officers and Employees amounting to P7,155,616.08; and,

The accuracy of cash in bank balance amounting to P38,242,991.76 is doubtful due to unrecorded cash balances.

Malungon Qualified/


amounting to P179,625,823.08, net of accumulated depreciation, caused by non-reconciliation of the GSO with accounting records and non-recognition of depreciation expenses; and,

The doubtful accuracy of cash in bank balance amounting to P41,713,508.11 due to non-adjustment of long outstanding reconciling items.

South Cotabato Qualified/

Modified The reliability of various account balances at year end were

affected due to

a) the unreconciled and unadjusted cash in bank balances amounting to P18.2M;

b) the unreconciled and unadjusted balances of various inventory accounts in an aggregate of P204.1M due to incomplete physical count and delayed submission of distribution and/or consumption documents; and,

c) unrecognized real property tax receivables and unadjusted dormant receivables amounting to P5.4M and P0.83M, respectively.

436

LGU AUDIT


Cities:

General Santos City Qualified/ Modified

The accuracy and validity of cash on hand and in banks amounting P3,359,304,753.90 could not be ascertained as there were no bank reconciliation statements and and maintenance of dormant bank accounts;

Petty Cash Fund was unliquidated

Cash advances was unliquidated;

Property, Plant and Equipment (PPE) physical count and reconciliation with controlling accounts were not complete;

Construction-In-Progress (CIP) were dormant for five years and were not reported as completed and closed to proper asset account.

Existence of unused fund transfers from various National Government Agencies of P206,053,450.02 and unremiitted balance of Priority Development Assistant Fund (PDAF) to the National Treasury and presence of dormant accounts; and,

Unreliable trust liabilities accounts – GSIS, HDMF, PHIC and BIR because of irregular and inconsistent remittances of premium contributions and/or loan repayment.

Koronadal City Qualified/

Modified The reliability of the Property, Plant and Equipment account

amounting to P1.4B, net of accumulated depreciation, is doubtful due to an existing variance of P324M between the balances per books and the inventory reports; and,

The non-preparation of the bank reconciliation statements on various accounts under the Cash in Bank, Local Currency, Current Account resulted to a material discrepancy of P27M between the subsidiary ledger and the bank records and the understatement of the same amounting to P2.1M, rendering the inaccuracy of the account;

Municipalities:

Banga Qualified/ Modified

The reliability of the Property, Plant and Equipment account totaling P315.3M, net of accumulated depreciation, is doubtful due to the inexistence of property cards and non-conduct of physical count.

The accuracy of the Cash in Bank – Local Currency, Current account amounting to P74.9M is uncertain due to the variance of P5.9M between the subsidiary ledger and the balance per bank. Finally, Trust Liability-DRRM account is understated by P5.3M 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.

437

LGU AUDIT


Lake Sebu Qualified/ Modified

The reliability of the reported cash in bank and expenses accounts as of December 31, 2017 could not be ascertained due to the existence of unliquidated cash advances amounting to P 6.1M as of year-end.

Norala Qualified/ Modified

The reliability of the Property, Plant and Equipment account could not be ascertained due to the existence of unidentified items totaling P32.1M.

Polomolok Qualified/ Modified

The reliability of P333.6M of Property, Plant and Equipment, net of accumulated depreciation, is doubtful due to the net overstatement of depreciation expense, unreconciled balances due to insufficient details, non-conduct of physical count of fully depreciated PPE and non-preparation of Report on Physical Count on the Property, Plant and Equipment (RPCPPE) and Inventory and Inspection Report of Unserviceable Property (IIRUP);

Accuracy of the Construction-in-Progress (CIP) account is uncertain due to the inclusion of Construction Materials and completed projects as well as the unreconciled balances against the actual on-going projects which overstates the account by P300.5M;

Collections of advance payments from real property taxpayers amounting to P36.3M, net of discounts, were inappropriately recognized as income thereby overstating the revenue account;

Non-moving payables for more than two (2) years amounting to P7,5M casts doubt on its legitimacy as bonafide obligation of the Municipality; and,

The recording of either consumed or distributed inventories amounting to P2.4M overstates the balances of the Inventory accounts.

Santo Niño Qualified/

Modified The existence of unliquidated cash advances amounting to

P6.97M resulted to the non-recognition of related expenses; hence overstating assets and income.

Surallah Improper classification of cash items amounting to P6.97M and unreconciled cash deficiencies which totaled to P26.86M,

Non-reconciliation of the intra-agency accounts with a verified difference of P18.06M;

Incomplete Report on the Physical Count of Property, Plant and Equipment and its non-reconciliation with those recorded in the books in an aggregate of P271.16M; and,

Delayed disposition and/or remittance fund transfers from various source agencies amounting to P2.33M in which P0.64M relates to Priority Development Assistance Fund (PDAF).

438

LGU AUDIT


T'boli The reliability of the Property, Plant and Equipment, particularly the Road Networks and Construction and Heavy Equipment accounts is doubtful due to the misclassification of fuel expenses and non-reconciliation of records resulting to misstatements totaling P15M; and,

The agency’s advanced recognition of loans and unreconciled loan balances resulted to the misstatement of Loans Payable – Domestic account amounting to P4.7M thus affecting its accuracy.

Tampakan The reliability of P44.3M of Property, Plant and Equipment (PPE), net of accumulated depreciation, is doubtful due to the net overstatement of depreciation expense, inconsistencies of balances between fund reports and non-preparation of Report on Physical Count on the Property, Plant and Equipment & Inventory and Inspection Report of Unserviceable Property;

Non-moving payables for more than two (2) years amounting to P3.9M casts doubt on its legitimacy as bonafide obligation of the Municipality; and,

Intra-Agency Payables amounting to P.1M and Biological Assets amounting to P.3M are unreliable, therefore, doubtful due to differences in reconciliation and lack of details & inclusion of unrelated assets, respectively.

Tantangan Qualified/ Modified

The reliability of the Property, Plant and Equipment account totaling P137.9 M, net of accumulated depreciation, is doubtful due to the existence of variance of P22.6M between the balance per books and the inventory reports;

The accuracy of the Cash in Bank – Local Currency, Current account amounting to P47.3M is uncertain due to the variance of P6.7M between the subsidiary ledger and the balance per bank; and,

Trust Liability-DRRM account is understated by P2.7M 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.

Tupi Qualified/ Modified

The reliability of P44.3M of Property, Plant and Equipment (PPE), net of accumulated depreciation, is doubtful due to the net overstatement of depreciation expense, inconsistencies of balances between fund reports and non-preparation of Report on Physical Count on the Property, Plant and Equipment & Inventory and Inspection Report of Unserviceable Property; and,

Non-moving payables for more than two (2) years amounting to P3.9M casts doubt on its legitimacy as bonafide obligation of the Municipality. Finally, Intra-Agency Payables amounting to P.1M and Biological Assets amounting to P.3M are unreliable, therefore, doubtful due to differences in reconciliation and lack of details & inclusion of unrelated assets, respectively.

439

LGU AUDIT


Sultan Kudarat Unmodified / Unmodified

City:

Tacurong City Qualified/ Modified

Due to unreconciled balances of reciprocal accounts comprising the Due from Other Funds and Due to Other Funds accounts, amounting to P4,962,721.64 which could possibly result to either understatement or overstatement of the related assets, liability and income accounts; and,

Due to unaccounted and unsupported SEF funded assets amounting to P514,829.41 which may have caused the overstatement of the particular asset account and corresponding overstatement of the provision for depreciation.

Municipalities:

Bagumbayan Qualified/ Modified

Due to the Property, Plant and Equipment (PPE) account balances of P229,989,996.25 could not be established due to various deficiencies in property records/management and non-conduct of physical count;

Unliquidated advances to Officers and employees amounting to P6,046,553.60 which led to overstatement of assets and expenses by the same amount; and,

Unreliable Trust Liability-DRRM balance of P7,679,414.82 due to unaccounted discrepancy of P5,441,152.05 between the LDRRM Report and the subsidiary ledger.

Columbio Qualified/ Modified

Validity of Property, Plant and Equipment (PPE) account in CY 2017 amounting to P162,897,392.82 is doubtful due to absence of PPE Ledger Cards and no complete physical inventory and non- reconciliation of record between the Accounting and General Services Office.

Esperanza Qualified/ Modified

Property, Plant and Equipment (PPE) account balances totaling P182,608,709.96 comprising 47.35% of the total assets remained unreliable due to inefficiencies in keeping property accounts and poor property management; and,

Recorded balances of the Cash-in-Bank LCCA amounting to P193,929,445.66 does not reconcile with the bank’s record of P197,208,390.99 making the ending balance doubtful accuracy. 3. Due to Trust Liability-DRRM amounting to P15,630,980.40 was unreliable due to unaccounted discrepancy of P1,633,758.26.

Isulan Qualified/ Modified

Reliability and correctness of the Property, Plant and Equipment (PPE) worth P228,633,569.00 could not be ascertained due to incomplete inventory-taking and inadequacy of records.

440

LGU AUDIT


Kalamansig Qualified/ Modified

Due to the Property, Plant and Equipment (PPE) accounts

balances totaling to P140,471,394.06 comprising 30.58% of

the total assets remained unreliable due to inefficiencies in

keeping property accounts and poor property management;

and,

Various receivable accounts totaling to P6,772,043.05 of

which P1,776,782.10 is remote of collectability, are doubtful

and remained dormant and outstanding for more than ten to

twenty-three years.

Lambayong Qualified/

Modified Misclassification of SEF accounts totaling P960,391.68,

which resulted to overstatement of the Other MOOE and Repair and Maintenance accounts, with a corresponding understatement of Training Expense and Land Improvement accounts;

Cash advances totaling P10,183,352.66 remained unliquidated as of December 31, 2017, contrary to COA Circular No. 97-002, which resulted to possible understatement of Expenses and overstatement of Assets and Government Equity accounts; and,

Existence/condition, accuracy, and validity of the recorded Property, Plant, and Equipment (PPE) account balance of P303,837,971.60 as of December 31, 2017 cannot be ascertained due to failure of the agency to conduct annual physical inventory of PPE.

Lebak Qualified/

Modified Due to inefficient and poor property management, the

Property, Plant and Equipment (PPE) accounts balances amounting to P138,646,354.17 remained unreliable; and,

Various receivable accounts totalling to P2,323,544.76 of

which P2,129,424.27 is remote of collectabilty are doubtful and remained dormant and outstanding for more than ten to twenty-three years.

Lutayan Qualified/

Modified Due to doubtful existence, accuracy and validity of the assets

and liabilities totalling to P162,240,800.91and P90,927,805.63, respectively due to inadequacy of records.

Palimbang Qualified/

Modified Due to inefficiencies in keeping property accounts and poor

property management, the Property, Plant and Equipment (PPE) account balances totaling to P194,983,340.29 comprising 67.18% of the total assets remained unreliable.

President Quirino Qualified/

Modified Due to the reliability and correctness of the Property, Plant

and Equipment worth P25,261,519.43 could not be ascertained, due to inefficiencies in keeping property accounts and poor property management and doubtful accuracy and reliability of Cash in Bank account.

441

LGU AUDIT


Senator Ninoy Aquino Qualified/ Modified

Accuracy, completeness and existence of the total Property, Plant and Equipment (PPE) account balances of P72,070,976.38 could not be established due to various deficiencies in property records/management and non-conduct of physical coun; and,

Unreliable Trust Liabilty-DRRM balances of P1,926,999.85 due to unaccounted discrepancy of P318,980.85 between the LDRRM Report and the subsidiary ledger.

Region XIII – CARAGA

Agusan del Norte Qualified Cash in bank account balance totaling P1,314,678,661.83 as of December 31, 2017 is doubtful due to non–submission of bank reconciliation statements and the pertinent bank statements; net unreconciled balances amounting to P4,173,067.66 between bank confirmations and books of accounts; and net unreconciled balances amounting to P1,317,512.31 between the books of accounts and cashbooks, consequently, affecting the fair presentation of the financial statements; and,

The failure of the Provincial Accounting Office (PACCO) to maintain Property Plant and Equipment (PPE) Ledger Card and Registries of Public Infrastructures, the Provincial General Services Office’s (PGSO’s) non-conduct of physical count of PPEs, and the non-reconciliation of records of the PACCO and PGSO resulted in an unreconciled PPE balance of P166,333,614.06, thus, rendering the P979,888,445.69 PPE balance as of December 31, 2017 unreliable.

Cities: Butuan City Qualified/

Modified Cash in Bank as of December 31, 2017 was overstated by

Php2,931,013.18 based on bank records, due to the failure to timely effect the required adjustments on the accounts affected, thus casted doubt on the accuracy and valuation of the cash account appearing in the CY 2017 Statement of Financial Position;

Due from LGU account appearing in the CGB books amounting to Php2,047,747.18 is not reconciled with the books of the Barangay due to the failure of the Accountant & Internal Audit Officer to institute sound internal control measures thus casted doubt on the balance presented in the CY 2017 Statement of Financial Position;

Due to the failure of the Accounting Office to record in the

book of accounts various hospital supplies, materials and equipment aggregating Php6,590,230.47 as of December 31, 2017, assets in custody of and utilized by the Butuan City Government are not accounted for as government property thus understating both total assets and total revenue accounts in the CY 2017 statement of financial position;

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LGU AUDIT


Due to the failure of the Accounting Department to properly monitor and reconcile the audit suspensions, disallowances and charges including their settlements with the Statement of Audit Suspensions, Disallowances & Charges (SASDC) issued by the auditor casted doubt the accuracy and reliability of the Receivables-Disallowances/Charges account amounting to Php56,471,767.01 as of December 31, 2017; and,

Due to the failure of the Accounting Office to effect the timely adjustments for book to bank reconciling items resulted to the net understatement of the Cash in Bank Account in the amount of Php929,132.63 as of December 31, 2017, thus the total Cash Account in the CY 2017 Statement of Financial Position is materially misstated.

Cabadbaran Qualified/

Modified Inventory account balances of supplies and materials

amounting to P25,926,270.24 as of December 31, 2017 were unrealiable due to the failure of the different divisions/offices to conduct physical inventory and to submit utilization reports pursuant to Section 121 and 124 of the NGAs Manual, Volume I; and,

Property, Plant and Equipment (PPE) balances were doubtful due to non-reconciliation of Accounting and General Services Office records and non-maintenance of complete Property Cards (PCs) and Property, Plant and Equipment Ledger Cards (PPELC) with the net difference P72,167,375.42; and,

Out of the P34,269,122.53 balance of the Due from Other LGUs account as of December 31, 2017, P27,662,082.53 or 80.72 percent pertained to funds transferred to different barangays in previous years which remained unliquidated at year-end, thus, overstating the Due from Other LGU account and understating the corresponding asset or expense account in the Statement of Financial Position.

Municipalities:


The validity and reliability of the book balance of the Property, Plant and Equipment (PPE) in the CY 2017 Statement of Financial Position totalling to P187,972,884.31 could not be verified and ascertained due to incomplete data in the Report on the Physical Count of the Property, Plant & Equipment (RPCPPE), non-computation of depreciation expense and absence of the schedule of Construction in Progress account;

The reliability and validity of the balances of the Advances for Payrolls, Advances to Officers and Employees, and Other Receivables as of December 31, 2017 were doubtful due to discrepancies noted in the review of the schedules of advances amounting to P1,605,070.79, thus, affected the fair presentation of the financial statements as prescribed under Paragraph 27, Philippine Public Sector Accounting Standards (PPSAS); and,

443

LGU AUDIT


The Prior Period Adjustment account balance as of December 31, 2017 is doubtful due to various reconciling items that could not be verified in the total amount of P3,049,705.33, thus, affects the fair presentation of the financial statements as prescribed under Paragraph 27, Philippine Public Sector Accounting Standards (PPSAS).


The validity and reliability of the book balance of the Property, Plant and Equipment (PPE) in the CY 2017 Statement of Financial Position totaling P134,486,485.13 could not be verified and ascertained due to incomplete Report on the Physical Count of the Property, Plant & Equipment (RPCPPE).

Jabonga Qualified/ Modified

The validity, existence and accuracy of Property, Plant and Equipment and Inventories amounting to P145,156,724.65 and P179,760.75, respectively, could not be ascertained due to failure to conduct the required physical inventory and non-preparation and submission of inventory report;

The depreciable properties and equipment amounting to P72,346,747.58 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,

Understatement of the accounts Subsidy to Other Funds and Trust Liabilities – DRMM by P773,551.84 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/ Modified

Property, Plant and Equipment (PPE) balances were doubtful due to non-maintenance of complete Property Cards (PCs) and Property, Plant and Equipment Ledger Cards (PPELC) with the net difference of P 81,947,997.44;

Inventory account balances of supplies and materials amounting to P 140,358.89 as of December 31, 2017 was unreliable due to the outright recording of purchases to expense accounts and for failure of the different offices to conduct physical inventory pursuant to Sections 114 and 124 of the NGAS Manual, Volume I.

The unspent balance of the Municipal Disaster Risk Reduction and Management Fund (MDRRMF) amounting to P 1,773,805.62 was not fully transferred to the Trust Fund books and said amount remained as receivable as of December 31, 2017 contrary to the Joint Memorandum Circular No. 2013-1 and COA Circular No. 2012-001, thus affected accounts were misstated.

Las Nieves Qualified/ Modified

The Property, Plant and Equipment and Inventories presented in the Statement of Financial Position at a carrying amount of P170.59 million and P4.23 million, respectively, as of December 31, 2017, could not be ascertained due to incomplete conduct of physical inventory & non-preparation of PPE ledger cards, stock cards & property cards.

444

LGU AUDIT



Property, Plant and Equipment (PPE) balances were doubtful due to non-reconciliation of Accounting and General Services Office records and non-maintenance of complete Property Cards(PCs) and Property, Plant and Equipment Ledger Cards (PPELC) with the net difference of P38,579,217.65;

Construction in Progress – Building and Other Structure account amounting P2,123,029.97 was not closed to its appropriate asset account upon completion of the project, thus the Building and Other Structure account was understated;

Various assets and expenditures totaling P6,748,728.97 were erroneously classified and recorded as Other Maintenance and Operating Expenses (Other MOE) account thus, presentation of accounts in the financial statements were misstated; and,

Financial Statements for the public utilities operated by the Special Revenue Unit (SRU) of the Municipality were not prepared separately, thus, the financial condition, the results of its operation and its cash flows cannot be determined

Nasipit Qualified/ Modified

The validity and reliability of the book balance of the Property, Plant and Equipment (PPE) in the CY 2017 Statement of Financial Position amounting to P122,387,558.97 cannot be fully ascertained due to incomplete data in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Remedios T. Romualdez Qualified/ Modified

The validity and reliability of the book balance of the Property, Plant and Equipment (PPE) in the CY 2017 Statement of Financial Position amounting to P97,303,087.05 cannot be fully ascertained due to incomplete data in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

Santiago Qualified/ Modified

The validity, existence and accuracy of Property, Plant and Equipment and Inventories amounting to P181,592,235.80 and P8,355,692.89, respectively, could not be ascertained due to failure to conduct the required physical inventory and non-preparation and submission of inventory report ; and,

The depreciable properties and equipment amounting to P40,948,321.76 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.

Tubay Qualified/ Modified

The validity, existence, and accuracy of Property, Plant and Equipment (PPE) and Inventories account presented in the Statement of Financial Position at a carrying amount of P43,047,720.67 and P427,530.85 respectively, as of December 31, 2017 could not be ascertained due to failure of Management to conduct the required physical inventory and non-preparation and submission of inventory reports.

445

LGU AUDIT


Agusan del Sur Qualified/ Modified

The accuracy of the Cash in Bank – Local Currency, Current Account (LCCA) and Cash in Bank - Local Currency, Savings Account (LCSA) aggregating Php1,994,511,315.40 could not be ascertained due to the unreconciled items amounting to Php19,949,557.69 between the general ledger and the cashbooks; the validity and accuracy of the Inventory and Property, Plant and Equipment accounts amounting to Php3,904,092,698.60 could not be ascertained and relied upon due to non-reconciliation of records between the Accounting Office and General Service Office and non-submission of complete inventory and PPE reports.

City: Bayugan City Qualified/

Modified Reliability of inventory and property, plant and equipment

accounts amounting to Php7,913,270.17 and Php1,641,036,771.22, respectively, are doubtful due to non-reconciliation of records between the Accounting Office and General Services Office.

Municipalities:

Bunawan Qualified/ Modified

Property, Plant and Equipment (PPE) accounts as of December 31, 2017 amounting to Php588,397,318.68 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/

Modified The balances Property, Plant and Equipment (PPE) accounts

as of December 31, 2017 amounting to Php408,349,847.00 remained unreliable due to incomplete inventory taking of all the LGU’s owned properties, existence of various unserviceable properties of Php10,537,800.00, missing properties of Php4,967,605.86, non-provision of depreciation of some PPE and non-dropping from the books of the cost of transferred PPE, thereby affecting the fair presentation of the PPE accounts in the financial statements;

The year-end balance of intra-agency accounts, Due from Other Funds and Due to Other Funds, has a discrepancy of Php3,561,009.27, thereby affecting the fairness of presentation of the Statement of Financial Position; and,

The accuracy of the balance of inventory account totaling Php2,235,489.10 could not be ascertained due to (a) absence of Report of the Physical Count of Inventories, (b) effecting adjustments by crediting inventory accounts and recognizing expense amounting to Php14,119,188.76 without supporting documents, and (c) erroneous recording of goods procured under trust fund totaling Php6,194,174.71, thereby affecting the fair presentation of inventory in the financial statements.

446

LGU AUDIT


La Paz Qualified/ Modified

The reliability, accuracy, completeness and existence of PPE and Inventory accounts amounting Php86,913.00 and Php262,956,318.29, respectively, in the books of LGU-La Paz cannot be established due to the absence of complete actual physical count ; and the account – Other Maintenance and Operating Expense was found overstated due to erroneous recording of certain disbursements.

Loreto Qualified/

Modified The reliability on the validity and accuracy of the balance of

the Property, Plant, and Equipment (PPE) account amounting to Php263,718,791.67could not be determined due to non completion of physical inventory and non-maintenance of property cards at the General Service Office and absence of information on the location and description of some assets; and the existence and validity of the inventory account balance of Php3,658,526.69 could not be ascertained due to non conduct of complete physical count and non-maintenance of supplies ledger cards and supplies stock cards.

Prosperidad Qualified/

Modified Doubtful and validity and existence of the Property, Plant and

Equipment amounting to Php313,140,407.90 due to failure to conduct comprehensive physical inventory.

Rosario Qualified/

Modified Transfers of the twenty percent (20%) of the Internal

Revenue Allotment (IRA) for development projects totaling Php30,820,452.50 were iappropriately recorded both in the General Fund Proper and 20% Development Fund books causing inaccurate information.


Modified The reliability and accuracy of the 2016 Financial Statements

could not be ascertained because of the failure of the Accountant to prepare fairly presented Financial Statements despite the Auditor’s suggested proposed corrections;

The reliability, accuracy, completeness and existence of PPE and Inventory accounts amounting to Php271,598,675.36 and Php574,801.23, respectively, in the Statement of Financial Position could not be ascertained because the Municipality was not able to conduct complete actual physical count of all its PPE; and,

Unliquidated cash advances totaling to Php6,906,498.02 remained unliquidated.

San Luis Qualified/ Modified

Doubtful validity, existence and accuracy of Property, Plant and Equipment amounting to Php146,873,974.57 due to the failure to complete the conduct of physical inventory.

Santa Josefa Qualified/ Modified

The accuracy, existence and ownership assertions on the reported year-end balance of the Property, Plant and Equipment (PPE) amounting to Php141,005,963.26 are doubtful due to non-completion of the physical inventory; non-maintenance of subsidiary ledgers at the General Service Office and Accounting Office; unavailability of the certificates of ownership for assets; and absence of information on the location and description of some assets;

447

LGU AUDIT


Erroneous classification of cash advances for travel amounting to Php776,225.96 were recorded as Due from Officers and Employees instead of Advances to Officers and Employees while cash advances for purposes other than travel amounting to Php13,670,311.90 and Php93,148.51, were recorded as Advances to Officers and Employees and Due from Officers and Employees, respectively, instead of Advances to Special Disbursing Officers;

The financial position reflected year-end balance of intra-agency account - Due to Special Accounts (Payable) amounting to Php3,991,071.28 but its counterpart account - Due from Special Account (Receivable) was not recognized in the books, thereby affecting the fair presentation of the accounts in the financial statements and,

Office Supplies, Drugs and Medicines, and Medical, Dental and Laboratory Supplies totaling Php2,767,748.47 for use in different offices of the LGU and for distribution were treated as outright expense instead of inventory, contrary to Sections 114 and 121 of the NGAS Manual for LGUs, thus casting doubt on the correctness and validity of the related expense accounts;

Sibagat Qualified/ Modified

The reliability of the inventory account balance of Php263,206,580.45 is doubtful due to non-reconciliation of records between the Accounting Office and General Service Office and non-submission inventory reports.

Talacogon Qualified/ Modified

The accuracy and validity of the year-end balance of Property, Plant and Equipment accounts totaling Php276,067,482.19 could not be ascertained due to the non-conduct of complete physical inventory taking and failure to reconcile the property and accounting records.

Trento Qualified/ Modified

The accuracy and validity of the Cash and Cash Equivalents account balance in the Statement of Financial Position totalling to Php217,415,112.91 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, contrary to the provision of Section 74 of PD 1445 and Section 3.0 of COA Circular No.96-011, thereby rendering the cash in bank account unreliable.

The existence, validity and accuracy of the Inventory and Property, Plant and Equipment (PPE) accounts amounting to Php18,316,923.36 and Php362,185,312.51, respectively, in the Statement of Financial Position could not be ascertained due to the non submission of the physical count of inventories held for distribution and consumption thus reconciliation with accounting records could not be attained;

448

LGU AUDIT


The PPE account balance in the financial position of Php390,613,574.58 does not reconcile with the balance per RPCPPE amounting Php390,576,639.58 or a difference of Php36,935.00. Further, there are material amount in the report on the physical count of property, plant and equipment that were not properly itemized in the RPCPPE totaling Php44,090,677.25; and,

The reliability, existence, validity and accuracy of some accounts in the financial statements were found doubtful due to the inclusion of book errors unresolved in the previous years which are not also properly itemized in the supporting schedules and the inclusion of outstanding receivables/payables which cannot be traced to any particular transaction.

Veruela Qualified/ Modified

The validity, existence and accuracy of the balance of Property, Plant and Equipment (PPE) account totaling Php158,919,708.28 could not be ascertained due to non-reconciliation of records between the Accounting Office and General Service Office and non-submission of complete inventory reports.

Surigao del Norte Qualified/ Modified

The veracity of the Cash-Local Treasury balance of P6,791,219.00 is doubtful because it does not reconcile with the cashbook balance of P6,693,045.63 or a difference of P98,173.37 contrary to Section 63.F of the Local Treasury Operations Manual;

The non-reconciliation of the Cash in Bank-Local Currency Current Account balances between the general ledger and the cashbooks and the long-standing unrecorded book reconciling items per BRS with a net amount of P5,211,933.95 contrary to Section 63.F of the Local Treasury Operations Manual requires all accountable officers to maintain a cashbook and reconcile his cashbook balance every end of the month or as need arises with the subsidiary accounting records and COA Circular No. 96-011 (paragraphs 3.2-3.3) and cast doubt on the accuracy of the Cash in Bank-Local Currency Current Account balance of P1,239,792,142.83 as of December 31, 2017 adversely affecting the fairness of the presentation of the financial statements;

Year-end physical inventory of Property, Plant and Equipment (PPE) was not conducted and PPE ledger card and Acknowledgment Receipt of Equipment were not maintained contrary to Section 124 and 114 of NGAS Manual for LGU, Volume I, thus, the correctness and validity of the PPE balance totaling P2,017,378,840.75 could not be ascertained and their existence could not be established; and,

The balance of Loans Payable to Development Bank of the Philippines amounting to P143,866,841.17 as of December 31, 2017 is unreliable because of the unreconciled difference of P55,258,470.07 between the balances of the General

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LGU AUDIT


Ledgers and Bank Confirmation due to failure of the concerned Accounting Office to perform regular reconciliation of their books with bank records contrary to Section 112 and 121 (2) of Presidential Decree No. 1445, thereby adversely affecting the fair presentation of the accounts in the financial statements.

City:

Surigao City Qualified/ Modified

The existence, ownership and valuation of the recorded Property, Plant, and Equipment (PPE) accounts totaling P729,110,289.28 (net of accumulated depreciation), were not yet fully established due to the existence of ‘For Recon’ balances totaling P100,314,390.53, adversely affecting the fair presentation of the financial statements. Further, the existence of ‘For recon’ balances under various Asset and Liability accounts amounting P71,808,223.50 and P198,098,215.71, respectively, which have no sufficient details, rendered the accuracy and reliability of the related accounts balances doubtful.

Municipalities:

Alegria Qualified/ Modified

Cash – Local Treasury in the amount of P7,724,876.49 included cash shortages totaling P5,912,559.88 affecting fair presentation of the accounts in the financial statements;

Non-reconciliation between the cash account balances and cashbooks with a variance of P6,015,187.66 as of December 31, 2017 affecting the fair presentation of the account balance;

Accuracy and reliability of the Cash in Bank – LCCA account balance at P7,143,848.11 as of December 31, 2017 is doubtful due to non-preparation of the Bank Reconciliation Statements (BRSs);

Doubtful existence, accuracy and reliability of Receivable and Liability accounts with balances at P42,610,148.60 and P100,717,273.30, respectively, due to non-submission of subsidiary ledgers and detailed schedules; and,

Inventories, property, plant and equipment (PPE) and biological assets accounts which are stated in the statement of financial position at a carrying amount of P100,537.49, P83,217,052.74 and P84,500.00 or a total of P83,402,090.23 as of December 31, 2017, are of doubtful validity, accuracy and existence due to the continued failure by the Municipality to keep records and conduct periodic physical inventory.

Bacuag Qualified/ Modified

Balance of Due from Local Government Units account is doubtful due to non-moving of fund transfers granted by LGU Bacuag to other LGUs for implementation of projects totaling P189,750.71 for more than five (5) years and non-maintenance of separate subsidiary ledger for every project affected the fair presentation of accounts in the financial statements;

450

LGU AUDIT


Due to NGAs account balance of P41,013,256.57 as of December 31, 2017 is unreliable due to non-reconciliation between the subsidiary ledgers and general ledger of the Due to National Government Agencies account resulted to a variance of P900,000.00 and inappropriate use of Due to NGAs in recording the expenses incurred for every check disbursement;

Due to LGUs account balance of P2,696,332.35 is doubtful and affected the fair presentation of accounts in the financial statements due to existence of negative beginning balances totaling P71,154.00 and non-moving of provincial and barangay shares on real property tax and/ or community tax for more than 30 days to 365 days totaling P1,161,360.05; and,

Trust Liabilities-Disaster Risk Reduction and Management Fund account balance of P272,499.75 is doubtful due to booking-up of current year’s Disaster Risk Reduction Management Fund (DRRMF) of LGU Bacuag and unutilized Quick Response Fund (QRF) and the DRRMF-MOOE of the previous years under the account “Trust Liabilities-Disaster Risk Reduction Management Fund (DRRMF)” in the General Fund Books and non-disclosure of the amount and details of the unexpended balance of DRRMF in the Notes to the Financial Statements.


The special trust account established for the unexpended balance of the LDRRMF in the amount of P608,871.97 was erroneously recorded in the GF books instead of the Trust Fund books contrary to Section 2 of COA Circular No. 92-382 dated July 3, 1992 and Section 5.1.10 of COA Circular No. 2012-002 dated September 12, 2012 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;

The use of direct expense method in recording supplies and materials purchased that resulted to non-recognition of unused or unconsumed inventory items at year-end; and,

The accuracy, validity and existence of the property, plant and equipment account amounting to P24,868,213.55 at year-end could not be ascertained due to the continued failure of the Inventory Committee to conduct physical count of PPE and non-maintenance of the Property Cards and PPE Ledger Cards by the Treasury Office and the Accounting Office, respectively, contrary to Section 124 of COA Circular No. 2002-003 dated June 20, 2002 and Sections 119 and 120, Volume I, of the Manual on New Government Accounting System for Local Government Units.

Claver Qualified/ Modified

Balance of Cash-Local Treasury account of P5,273,368.42 is unreliable and doubtful due to non-reconciliation of the Treasurer’s and accounting records, non-submission of some subsidiary ledgers, non-preparation and submission of Journal Entry Vouchers (JEVs) by the Municipal Accountant’s Office on receipts and deposits;

451

LGU AUDIT


Cash in Bank-Local Currency, Current Account balance of P549,671,668.99 is unreliable due to non-recording of book reconciling items/discrepancies in the general ledger (GL) of P64,190,154.57 and non-cancellation of stale checks of P38,743.00, non-submission of subsidiary ledgers (SLs) on four (4) bank accounts and non-preparation of correct BRS on all accounts; and no separate SL on the receipt of Assistance to Disadvantage Municipalities (ADM) Fund amounting P9,904,000.00 from DILG-DBM;

Loans Payable-Domestic account of P35,877,075.00 could not be ascertained due to non-submission of loan payments documents and its corresponding Journal Entries Vouchers (JEVs) totaling P3,003,971.80 for CY 2017 on loan availed by LGU Claver from Land Bank of the Philippines (LBP) to finance one (1) unit two (2) storey Dry Public Market Building under the National Wealth;

Balance of Due from LGUs account of P3,624,506.46 is doubtful due to non-reconciliation of subsidiary ledgers on fund transfers by LGU Claver to various barangays and municipalities as of December 31, 2017 totaling P3,657,506.46 with a variance of P33,000.00 and previous years balance of P467,376.46 had no details of recipients on fund transfers; and Due from NGOs/POs account of P3,534,877.88 is doubtful due to no details of recipients on fund transfers of P2,500,000.00 in previous years;

Due to NGAs, GOCCs and LGUs accounts totaling to P46,551,481.70 are unreliable due to existence of negative beginning balances totaling P17,833,812.76, variance between the general ledger and subsidiary ledger (SL) amounting P7,275,398.21 on Due to NGAs and LGUs in the General Fund and non-submission of other funds SL; and,

Due to NGAs, GOCCs and LGUs accounts totaling to P46,551,481.70 are unreliable due to existence of negative beginning balances totaling P17,833,812.76, variance between the general ledger and subsidiary ledger (SL) amounting P7,275,398.21 on Due to NGAs and LGUs in the General Fund and non-submission of other funds SL.

Dapa Qualified/ Modified

Cash advances granted to officers and employees and even to employees from national government agencies in the total amount of P658,616.92 remained unliquidated at year-end due to the failure of the Management to enforce liquidation and collection and still granted additional cash advances to even if they still have outstanding unliquidated cash advances in violation of Section 89 of Presidential Decree (P.D.) No. 1445 and COA Circular Nos. 96-004 and 97-002, thus, affecting the fair presentation of the financial statements of the Municipality;

The Property, Plant and Equipment (PPE) accounts with a total amount of P148,964,337.76 as of December 31, 2017 are still of doubtful validity, accuracy and existence due to the continued failure of the Municipality to keep records and

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LGU AUDIT


conduct periodic physical inventory of its property in violation of Sections 119, 120 and 124 of the New Government Accounting System (NGAS) Manual for LGU, Volume I;

Confidential expenses in the amount of P1,500,000.00 as of December 31, 2017 were taken up and recorded as a direct expense instead of recording it as a receivable contrary to the specific provisions under COA, DBM, DILG, GCG and DND Joint Circular No. 2015-01 resulting to misstatement of balances of the financial statements;

The financial assistance granted to the public schools through the barangay in the total amount of P872,000.00 was recognized and recorded as Subsidy to Other LGUs contrary to Section 4(8) and 122 of P.D. 1445, COA Circular Nos.94-013 and 2016-005, discounted the maintenance of accountability and affected the fair presentation of the accounts in the financial statements which may resulted to the loss of government resources;

Funds transferred to various barangays were recorded and treated as outright expense in contravention to Section 112 of PD 1445, Section 94, Chapter 5, Volume 1 of NGAS Manual for LGUs and Provision No. 6 of the Memorandum of Agreement (MOA) ; and,

Erroneous entry in recording the Disaster Response and Rescue Equipment in the amount of P85,096.05 and non-maintenance of subsidiary ledger for the account contrary to Section 4(8) of Presidential Decree (P.D.) no. 1445 and COA Circular No. 2012-002 dated September 12, 2012.

Del Carmen Qualified/ Modified

The year-end Cash in Bank balance of the LDRRMF per financial statements in the amount of P1,491,367.36 did not reconcile with the balance per cash book of P1,097,829.93 or a variance of P393,537.43 due to failure of the Treasury Office and the Accounting Office to reconcile their records on a regular basis as required in Sections 26-28 of the Manual on New Government Accounting System for LGUs, Volume II. Hence, correctness and accuracy of said account cannot be ascertained;

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;

The Management failed to observe and comply prescribed policies and procedures for an effective control of government properties such as: perpetual inventory system, maintenance of supplies and materials stock cards and ledger cards and preparation of supplies and materials issued as provided for in Section 114, 119, 120 and 121 of Volume One of the New Government Accounting System. Such condition likewise indicates weakness of internal control over properties of the Municipality; and,

453

LGU AUDIT


The accuracy, validity and existence of the property, plant and equipment account amounting to P41,052,712.76 at year-end could not be ascertained due to the continued failure of the Inventory Committee to conduct physical count of PPE and non-maintenance of the Property Cards and PPE Ledger Cards by the Treasury Office and the Accounting Office, respectively, contrary to Section 124 of COA Circular No. 2002-003 dated June 20, 2002 and Sections 119 and 120, Volume I, of the Manual on New Government Accounting System for Local Government Units

General Luna Qualified/

Modified The Cash in Bank – Local Currency, Current Account (CIB-

LCCA) was misstated by P60,041.17 due to various unrecorded reconciling items in the cashbook and the general ledger; hence, affecting the fair presentation of the financial statements of the Municipality;

Cash advances granted to officers and employees including an employee from national government agency in the total amount of P1,298,913.53 remained unliquidated at year-end due to the failure of the Management to enforce liquidation and collection, and granting of additional cash advance despite having outstanding unliquidated cash advances in violation of Section 89 of Presidential Decree (P.D.) No. 1445 and COA Circular Nos. 96-004 and 97-002. Moreover, the amount of P2,759,211.78 remained doubtful due to the absence of documents supporting the details of said amount as still unliquidated as of December 31, 2017, thus, affecting the fair presentation of the financial statements of the Municipality;

Interests credited by the bank as of December 31, 2017 in the total amount of P16,499.63 representing interests earned, net of tax, on DBP accounts maintained by the Municipality for its Trust Fund accounts were still not recorded in the books in violation to Section 65 of Presidential Decree (P.D.) No. 1445 and Section 19 of the Manual on the New Government Accounting System (NGAS) for Local Government Units, Volume I resulting to understatement of interest income earned for the period as shown in the financial statements.;

The Property, Plant and Equipment (PPE) accounts amounting to P54,704,375.63 as of December 31, 2017 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 in

violation of Sections 119, 120 and 124 of the New Government Accounting System (NGAS) Manual for LGU, Volume I;

The Receivables and Liabilities accounts reflected in the CY

2017 Statement of Financial Position of the Municipality amounting to P13,444,459.54 and P9,696,859.10, respectively, or a total of P23,141,318.64 still are of doubtful

454

LGU AUDIT


propriety, accuracy and existence due to the absence of schedules and supporting documents in violation of Sections 4.8, 111.1, 112 and 114 of Presidential Decree (P.D.) No. 1445; and,

The Municipality disbursed funds in the total amount of P744,062.94 even without complete supporting documents and recorded said disbursements as an outright expense in the total amount of P733,812.94 contrary to Sections 4(6), 4(8), 7, and 122 of the Presidential Decree (P.D.) No. 1445 and as provided in COA Circular No. 2012-001 dated June 14, 2012, and COA Circular Nos. 94-013 and 2016-005, resulting to risk of loss of government resources and errors in the presentation of the balances in the financial statements.

Gigaquit Qualified/ Modified

Balance of Loans Payable-Domestic account, Current Portion amounting P71,617,770.67 is doubtful due to non-presentation of the current and non-current portion of the Loans Payable-Domestic account and non-disclosure in the Notes to the Financial Statements; and non-submission of loan documents and subsidiary ledgers;

Due from National Government Agencies account balance of P15,565.83 is unreliable because fund transfers to National Government Agencies of P15,565.83 have been dormant for more than ten (10) years;

Accuracy of the Due from Local Government Units account is doubtful because fund transfers granted by LGU Gigaquit to other LGUs for implementation of projects totaling P114,998.52 remained in the books non-moving for more than nine (9) years; and non-maintenance of separate subsidiary ledger for every project;

Accuracy of the Due to National Government Agencies and Due to LGUs accounts amounting P26,807,640.63 and P41,658.74, respectively balances are unreliable because these were not supported with subsidiary ledgers;

Accuracy of the Trust Liabilities-Disaster Risk Reduction and Management Fund account is doubtful due to recording of the unexpended balance of the Local Disaster Risk Reduction Management Fund (LDRRMF) of years 2016 and below in the General Fund book amounting P4,910,153.85; non-maintenance of separate subsidiary ledgers of Trust Liabilities- DRRMF and Cash in Bank, LCCA, Special Trust Fund accounts for transfers of unutilized DRRMF by year of transfer; and non-disclosure of amount and details of the unexpended balance of LDRRMF in the Notes to the Financial Statements; and,

Accuracy of the assets, liabilities, income and expenses accounts are unreliable due to recording of cash receipt of performance bond as income and expenditures for construction of assets as repairs and maintenance; and non-recording of guaranty deposit.

455

LGU AUDIT


Mainit Qualified/ Modified

Year-end physical count of Property, Plant and Equipment (PPE) was not conducted and PPE ledger card and Acknowledgment Receipt of Equipment were not maintained contrary to Section 124 and 114 of NGAS Manual for LGU, Volume I. Thus, the correctness and validity of the PPE accounts totaling P158,642,653.92 could not be ascertained and their existence could not be established;

The veracity of the year-end balance of the Cash-Local Treasury account in the amount of P11,887.15 cannot be ascertained due to the unreconciled difference between the General Ledger and the Report on Collections and Deposits (RCD) contrary to Sec. 34 of NGAS Manual Volume 1 and Sec. 181 of GAAM Volume 1 (par. C), thereby affecting the fairness of the presentation of the financial statements; and,

The non-reconciliation of the Cash in Bank – Local Currency Current Account balances between the general ledger and the cashbooks contradicts Section 181 of GAAM Volume 1 (paragraph C) and COA Circular No. 96-011 (paragraphs 3.2-3.3) and cast doubt on the accuracy of the Cash in Bank-Local Currency Current Account balance of P90,264,183.36 as of December 31, 2017 affecting the fairness of the presentation of the financial statements;

Malimono Qualified/ Modified

Unreliable balance of cash accounts totaling P41,232,080.22 due to the unreconciled variance between the cashbooks and ledgers amounting to P1,541,672.05;

Absence of schedules of the beginning balances of the general/subsidiary ledgers supporting the receivable and payables accounts in the CY 2017 Financial Statements at P4,165,066.45 and P84,617,406.70, respectively, or a total of P88,782,473.15 rendering the existence, accuracy and reliability of the account balances doubtful;

Failure of the Municipality to keep records and conduct physical count of its Inventories, Property, Plant and Equipment (PPE) and Biological Assets in CY 2017 in the amount of P448,802.07, P124,357,973.59 and P51,100.00, respectively, rendering the amounts reflected in the financial statements as of December 31, 2017 doubtful as to validity, accuracy and existence; and,

Doubtful existence, accuracy and reliability of the Prior Period Errors and Other Capital Adjustments Accounts with the subject amount of P(2,787,928.70) and P155,000.00, respectively, for the year ended December 31, 2017 renders the account balances due to non-submission of the Journal Entry Vouchers (JEV) and supporting documents to every financial entry in the general/subsidiary ledgers.


The non-liquidation of fund transferred from Local Water Utilities Administration (LWUA) for the implementation of Establishment of Level III Potable Water System project in the amount of P9,800,000.00 which has long been completed and the non-remittance of the unutilized balance of

456

LGU AUDIT


P171,798.19 overstated the account Due to Other National Government Agencies (NGAs). This was also reported as current liabilities notwithstanding its being outstanding for more than eight (8) years thus, affected the fair presentation of balances in the financial statements as of December 31, 2017 and deprived the source agency to utilize the unspent amount for other productive programs and projects that may benefit the constituents of the Municipality and/or the general public;

Erroneous deposit and recording of the refund of compulsory premiums from GSIS in the total amount of P202,622.50 to Trust Fund account contrary to the provisions of the New Government Accounting System (NGAS) Manual for Local Government Units (LGUs) and Presidential Decree (P.D.) No. 1445 resulted to misstatements of the financial statements;

The causes of the discrepancy of P753,640.43 between the reciprocal accounts Due from Other Funds and Due to Other Funds in the General Fund and Trust Fund could not be determined in the absence of reconciliation in the records and Subsidiary Ledgers (SLs) of the reciprocal accounts which was not in conformity with the generally accepted accounting principles that reciprocal accounts must agree with each other;

The Property, Plant and Equipment (PPE) Accounts with a total amount of P74,404,978.18 as of December 31, 2017 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, in violation of relevant provisions of the New Government Accounting System (NGAS) Manual for LGU, Volume I; and,

Funds transferred to various barangays were recorded and treated as an outright expense in contravention to Section 112 of PD No. 1445 and Item 3.1 of COA Circular No. 2012-001.

Placer Qualified/ Modified

Balance of Cash-Local Treasury account of P224,819.67 is unreliable and doubtful due to non-reconciliation of the Treasurer’s and accounting records, and non-submission of some subsidiary ledgers;

Loans Payable-Domestic account of P508,288.30 could not be ascertained due to non-submission of loan payment documents P932,849.42 for CY 2017 on loan availed by LGU Placer from Municipal Development Fund Office (MDFO) to finance Community-Based Resource Management Project (CBRMP)-Support Fund Facility Project loan charged against the 20% Development Fund;

Balances of Due from NGAs, GOCCs and LGUs accounts are doubtful because the amount of P120,540.78 have been dormant for more than ten years;

457

LGU AUDIT


Balances of Due to NGAs account is unreliable due to a difference of P1,371,022.48 between the subsidiary ledger and general ledger of Due to NGAs account in the General Fund; and Due to LGUs account is doubtful due to inappropriate use of this account; AND,

Due to LGUs account on Real Property Tax share is unreliable because despite existence of negative beginning (debit) balances on some subsidiary ledgers and without booked-up payables at the beginning of the year still LGU Placer remitted P384,642.41 to various local government units in calendar year 2017.

San Benito Qualified/

Modified The existence and validity of the year-end balance of the

Cash Local Treasury accounts in the total amount of P1,407,560.19 cannot 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;

The year-end cash in bank account balances in the Cashbook totaling P35,171,216.01 did not reconcile with the balances in the General Ledger of P33,929,829.16 resulting in a variance of P1,241,386.85 contrary to Section 111.2 of Presidential Decree (P.D.) No. 1445 and Section 181 (c) of the Government Accounting and Auditing Manual (GAAM), Volume 1, thereby casting doubt on the validity and existence of the reported balance in the financial statements;

Progress payments made to contractors were erroneously recorded in the Trust Fund books of accounts such that the Construction in Progress – Infrastructure Assets account was understated by P1,667,747.20 and the Guaranty Deposits Payable for retention money of same amount was not recognized contrary to Section 111 (2) and 112 of Presidential Decree (PD) No. 1445 hence, there is no assurance that all financial transactions of the Municipality during the year are completely reported in the financial statements;

The existence, accuracy and validity of the year-end balance of P59,897,750.52 for the account Trust Liabilities under Trust Fund books cannot be established or substantiated due to the absence of details;

The Due to LGUs account showed abnormal/negative balance in the amount of P557,807.77 due to unmatched recording of collections and remittances of the Real Property Tax (RPT) Share thus, reliability and accuracy of the account cannot be ascertained;


458

LGU AUDIT




Modified Non-reconciliation of the Real Property Tax (RPT)

Receivable and Deferred RPT at P430,228.34 each with the Special Education Tax (SET) Receivable and Deferred SET at P350,354.01 each or variance of P79,874.33 rendering the account balances doubtful and unreliable;

Failure of the Municipality to keep records and conduct physical count of its Inventory and Property, Plant and Equipment (PPE) in CY 2017 in the amount of P52,732.55 and P31,811,278.79, respectively, rendering the amounts reflected in the financial statements as of December 31, 2017 doubtful as to validity, accuracy and existence;

Recording of the Level III Water System as part of Property, Plant and Equipment – Infrastructure Assets with book value of P8,973,519.89 despite its transfer of ownership to SMWD render the account not fairly stated;

Misstatement of the income and payable account balances due to recording of financial assistance received from various agencies totaling P1,020,000.00 as revenue instead of liability account; and ,

Non-submission of subsidiary ledger and detailed schedule of the Adjustments account reported at P6,683,131.63 rendering the amount doubtful as to validity and reliability.

San Isidro Qualified/

Modified Collections received by the Revenue Collection Clerks were

not remitted daily to the Municipal Treasurer due to their existing practice of not establishing a proper cut-off in the reporting of collections resulting in accumulated unremitted cash in the maximum amount of P217,889.54 during the year, and delayed remittance from one to 78 days thereby exposing the funds to possible loss, theft or misappropriation and affecting the timely recognition of income and cash accounts in the financial statements;

The year-end balance of P 18,117,149.97 for Trust Liabilities account under Trust Fund books does not reflect the actual nature of the account as said amount is a transferred balance from Government Equity in CY 2016 thereby casting doubt on the validity and accuracy of the liability accounts in the financial statements;

459

LGU AUDIT


The transfer of unexpended balance from prior year for Quick Response and Mitigation Funds –MOOE to the Special Trust Account in the amount of P875,543.68 was erroneously recorded in the Trust Fund Books contrary to pertinent provisions of COA Circular 2012-002 dated September 12, 2012 thereby affecting the fair presentation of the affected accounts in the financial statements;

Of the year-end balance of P1,252,404.91 for the account Due from Officers and Employees, P868,299.03 of said amount were related to Advances to Officers and Employees contrary to Section 4.1 and Annex B of COA Circular No. 2015-009 dated December 1, 2015 thus, reliability and accuracy of the affected accounts cannot be ascertained; and,


Santa Monica

Qualified/ Modified

The year-end balance of the Cash in Local Treasury account per Cash Book of P456,847.25 did not reconcile with the balance per General Ledger of P1,518,699.85 resulting in a difference of P1,061,852.60 while the year-end balance of the Cash in Bank account per Cash Book of P35,292,743.46 differed with the General Ledger balance of P34,021,913.45 or a variance of P1,270,830.01, due to the failure of the Accounting and Treasury Offices to perform reconciliation of their records and the non-preparation of subsidiary ledger for each account. Hence, accuracy and reliability of the said account balances in the financial statements cannot be ascertained;

Stale checks totaling P2,163,074.02 remained unadjusted in the books of accounts in violation of Section 59 of the New Government Accounting System (NGAS) Manual for LGUs, Volume I resulting to understatement of the Cash in Bank – Local Currency, Current Account (LCCA) and other appropriate liability and equity accounts;

The Accounting Office failed to update the preparation and submission of Bank Reconciliation Statements (BRS) under the General Fund – Collections and Trust Fund – DBP accounts which have a total cash balance of P20,628,906.18 as of December 31, 2017 contrary to Section 74 of Presidential Decree (P.D.) No. 1445 and Sections 3.1 to 3.4 of COA Circular No. 96-011 dated October 2, 1996, hence, the existence, accuracy and correctness of the recorded Cash in Bank –LCCA balance could not be verified;

460

LGU AUDIT


Income from the waterworks system operation is recognized using cash basis accounting which practice is not in conformity with the provision of the Philippine Public Sector Standards (PPSAS) 1 requiring the adoption of accrual basis of accounting. Hence, unpaid/uncollected accounts for water bills as of December 31, 2017 in the total amount of P318,614.75 were not recognized in the books resulting in understatement of the income and non-recognition of receivable accounts of same amount;

Non-presentation of the current and non-current portion of the LGU’s Loans Payable affected the fair presentation of the Financial Statements and 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;



Sison Qualified/

Modified Unadjusted variance of the reciprocal accounts Real Property

Tax (RPT) Receivable and Deferred RPT at P5,431.51 and non-establishment of the RPT Receivable, Deferred RPT, Special Education Tax (SET) Receivable and Deferred SET affecting the reliability of the balances in the financial statements;

Receivables and payables accounts totaling P264,507.64 and P53,190,942.24, respectively were not supported with schedules and pertinent documents casting doubt to their existence, accuracy and reliability; and,

Failure by the Municipality to keep records and conduct physical count of its Inventory, Investment Property, Property, Plant and Equipment and Biological Assets Accounts in CY 2017 in the amount of P1,539,533.67, P3,000,000.00, P111,364,617.47 and P1,015,715.00, respectively, rendering the amounts reflected in the financial statements as of December 31, 2017 doubtful as to validity, accuracy and existence.

461

LGU AUDIT


Socorro Qualified/ Modified

The Management failed to fully transfer to its Special Trust Fund the unexpended balance of the LDRRMF for CY 2017 in the amount of P1,771,165.86. The financial statements were not fairly presented because the expense account under the General Fund was overstated and the liability account under Trust Fund was understated by the same amount;

The Management did not properly recognize and record equipment and medicines procured for disaster risk reduction and management activities with a total cost of P455,859.43. Hence, balances reflected in the financial statements as of December 31, 2017 are not fairly presented; and,

Doubtful validity, accuracy and existence of inventories and property plant and equipment amounting to P1,508,736.28 and P105,570,524.85 or a total of P107,079,261.13 due to the continued failure by the Municipality to keep records and conduct physical inventory of its supplies and properties for CY 2017.

Tagana-an Qualified/

Modified Unreliable balance of Property, Plant and Equipment (PPE)

accounts of P205,300,426.29;

Unreliable balance of Inventory account of P1,529,199.15;

Unreliable bslsnce of Work/zoo Animal and Breeding Stocks accounts of P1,850,000.00;

Dormany Recievable accounts amounted to P961,553.62, and,

Unadjusted Cash in Bank reconciling items totalled P99,495.64

Tubod Qualified/

Modified Balance of Due to National Government Agencies account of

P20,018,657.98 is doubtful due non-liquidation and non-remittance of the unexpended balance of P1,650,810.56 upon completion of the project on fund transfers received by LGU Tubod from various national government agencies; and,

Trust Liabilities-Disaster Risk Reduction and Management Fund account balance of P6,551,603.75 is unreliable due to non-maintenance of separate subsidiary ledgers of Trust Liabilities-Disaster Risk Reduction Management Fund (DRRMF) and Cash in Bank, LCCA, Special Trust Fund accounts for transfers of LGU Tubod’s unutilized DRRMF to the special trust fund by year of transfer and non-transfer of unutilized DRRMF of years 2010 and 2011 from Trust Fund Books to General Fund Books. Balance of Cash-Local Treasury account of P224,819.67 is unreliable and doubtful due to non-reconciliation of the Treasurer’s and accounting records, and non-submission of some subsidiary ledgers.

462

LGU AUDIT


Surigao del Sur Qualified/ Modified

Collections from fees for services rendered by eight (8) different Community Hospitals of the Province totaling P146,922,532.26 for CY 2017 were considered as Trust Fund which is contrary to Section 313 of RA 7160, thus resulted to (a) understatement of General Fund Cash account and Government Equity of the same amount by P146,922,532.26; and (b) resources were not adequately d, safeguarded from abuse, mismanagement, fraud, error and irregularities; and,

Property Plant and Equipment (PPE) totaling P177,859,749.72 procured out of collections from different community hospitals which was treated as Trust Fund (TF) were not recorded in the books thus resulted to understatement of PPE and understatement of Government Equity accounts by the same amount of P177,859,749.72.

Cities:

Bislig City Qualified/ Modified

Completed infrastructure projects totaling P36,012,149.08 were not recognized to its appropriate asset account and not closed to government Equity, thus misstating the year-end balances of the asset and equity accounts;

Absence of some Property, Plant and Equipment in the amount of P3,908,332.55 casted doubt on the reliability of the recognized PPE; and

Unrecorded amount of P130,645.35 representing the uncollected rentals of the property owned or administered by the City.

Tandag City Qualified/

Modified Incomplete physical count of properties and supplies and

materials inventory which resulted in the non-submission of the required Report on the Physical Count of Property, Plant and Equipment (RPCPPE), thus precluded the Auditor’s determination of the validity, existence and reliability of the reported Property Plant and Equipment (PPE) and Supplies and Materials Inventory valued at P688,678,318.32 and P-0-, respectively; and,

The indirect treatment in the acquisition of supplies and materials as outright expense which amounted to P49,140,091.75 during CY2017 instead of maintaining an inventory account, thus affected the fair presentation of appropriate inventory accounts and its related expenses.

Municipalities:

Barobo Qualified/ Modified

Due to the non-recording of completed infrastructure projects amounting to P 8,303,474.03 and P 4,095,000.44 under the Salintubig and LGSF programs, respectively, to the appropriate asset account in the General Fund books of the Municipality which resulted to the understatement of its PPE and Government Equity accounts.

463

LGU AUDIT


Bayabas

Qualified/ Modified

Due to the inability of the management to submit the RPCPPE and the reconciliation of the physical inventory of PPE against the property and accounting record.

Cagwait Qualified/

Modified Property, Plant and Equipment account balances totaling P

176,703,098.31 could not be ascertained due to the failure to maintain complete and adequate property records, thereby affecting the fairness of the presentation of the accounts in the financial statement.

Cantilan Qualified/

Modified Failure to prepare and submit the reconciliation of the result

of the inventory count with that of the property and accounting records, thus, the Auditor was precluded from verifying the validity, existence and reliability of the reported Property Plant and Equipment (PPE) valued at P233,754,316.44.


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 P32,667,830.01 as of December 31, 2017.

Carrascal Qualified/

Modified The validity existence, accuracy and valuation of the

Property, Plant and Equipment totaling P 349,269,264.16 as of December 31, 2017 could not be ascertained due to the inadequacy of records and the failure to submit the Physical Inventory Count of all Property Plant and Equipment of the Municipality.

Cortes Qualified/

Modified The Municipal General Services Office failed to submit the

required Report on the Physical Count of Property, Plant and Equipment (RPCPPE) due to the non-maintenance of property cards required in Chapter 7, paragraph 4 of Section 114 of the NGAS Manual for LGUs, Vol. 1 thus precluded the audit team from verifying the existence, validity and reliability of the reported Property, Plant and Equipment (PPE) valued at P 103,717,653.61

Hinatuan Qualified/

Modified Construction in progress accounts included infrastructure

projects which are completed amounting to P 270,000.00 and P 11,372,290.19 under its General Fund and Trust Fund books, respectively, which resulted to inaccurate reporting of its Property, Plant and Equipment in the financial statements; and,

Failure to maintain sufficient documents for some items of the Property, Plant and Equipment costing P 17,296,723.72 is in contrary to Section 111 (1) Chapter 2 of Presidential Decree No. 1445 which resulted to the non-computation of depreciation;

464

LGU AUDIT


Loans Receivable totaling to P 490,000.00 remained dormant for at least ten (10) years and the probability of collection is remote, thus misrepresenting the Receivable account in the Financial Position of the Municipality;

Failure of management to install adequate, effective controls and monitoring system on the animal dispersal livelihood program may result to unaccounted losses of assets/property and the possibility of failure of the Animal Livelihood Program, contrary to Sections 2 and 105 of P.D. 1445;

Non-submission and non-recording of the Summary of Supplies and Materials Issued resulted to the overstatement of the inventory by P 2,461,095.25 and understatement of expenses, contrary to Section 121 Volume 1 of the NGAS Manual; and,

Failure to present the current and non-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.

Lanuza Qualified/ Modified

Failure of the Municipality to submit the required report on the Physical Count of Property, Plant and Equipment (RPCPPE) in violation of the Section 124 of the NGAS Manual Volume I, thus, the Auditor was precluded from verifying the validity, existence and reliability of the reported Property Plant and Equipment (PPE) valued at P104,728,469.74 .

Lianga Qualified/ Modified

Property, Plant, and Equipment in the amount of P4,138,747.20 were unaccounted in the annual physical count of the Municipality which accountability thereof was not established in accordance with Section 101 of Presidential Decree No. 1445 and Section 54 of Manual of NGAs for LGUs; and,

Land owned by the Municipality amounting to P1,352,057.89 were not registered under the Torrens Title System contrary to Section 148 of COA Circular No. 92-386, thus, resulting to inadequacy of documents to prove ownership of the assets.

Lingig Qualified/ Modified

Due to inability of the management to submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) totalling P134,510,653.39 thus the accuracy, validity and existence of these properties cannot be determined.

Madrid Qualified/ Modified

The accuracy of the Municipality’s Property, Plant and Equipment reported in the Statement of Financial Position at P59.34 million cannot be established because of the inadequacy of accounting records.

465

LGU AUDIT


Marihatag Qualified/ Modified

The correctness of the agency’s property, plant and equipment which are stated in the statement of financial position at a carrying amount of P151,234,757.06 as of December 31, 2017 could not be validated because of 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; and,

Failure to present the current and non-current portion of the LGU’s Loans Payable amounting to P27,970,777.35 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.

San Agustin Qualified/ Modified

The Municipality failed to submit the required Report on the Physical Count of Property, Plant and Equipment (RPCPPE) due to incomplete physical count of its properties and inadequacy of records in the Treasury and Accounting Offices thus, the auditor was precluded from ascertaining the validity, existence and reliability of the reported Property Plant and Equipment (PPE) valued at P 131,777,197.35.


The balance of Property, Plant and Equipment valued at P149,599,169.18 as of December 31, 2017 cannot be ascertain as to its existence and completeness due to the non-submission of the Report on Physical Count of PPE. Moreover, PPE under the Trust Fund accounts were not booked-up and were not transferred to the General Fund account, thus understated the PPE accounts and resulted to misstatement of the Financial Statement in general;

Implementation of infrastructure projects funded from various National Government Agencies (NGAs) in CY 2016 and 2017 with the total amount of P18,254,946.93 were recorded as debited to Due to Other NGAs, construction in progress (CIP) and/or appropriate asset accounts were not recognized, thus misstating the affected accounts in the financial statements; and,

Expenditures amounting to P2,264,255.910 were directly debited to Trust Liabilities-DRRM, appropriate asset and expense accounts were not recognized in recording the transactions charged to the previous years’ unexpected Quick Response and Mitigation Funds in the Trust Fund Book, thus misstating the affected accounts in the financial statements.

Tagbina Qualified/ Modified

Acquisition of supplies and materials in the amount of P16,579,511.22 was directly treated as outright expense contrary to the provision of Philippine Public Sector Accounting Standard (PPSAS) 12, thus affected the fair presentation of appropriate inventory accounts and its related expenses; and

466

LGU AUDIT


Unreconciled difference of P105,979,589.68 between the accounting and property records due to the absence of equipment ledger cards on PPE and incomplete physical inventory taking contravened the provisions of Section 53 and 114 of Manual of New Government Accounting System for LGUs.

Tago Qualified/ Modified

Due to the continued 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.

Dinagat Islands Qualified/ Modified

Fuel, Oil and Lubricants inventory account amounting to Php4,788,230.74 could not be ascertained due to the failure of concerned offices to promptly submit liquidations for fuel consumption of government vehicles, which resulted in the overstatement of Inventory account and the corresponding understatement of Expense account, thereby, affecting the fair presentation of financial statements.

Municipalities:

Basilisa (Rizal) Qualified/ Modified

The failure of the Municipal Treasurer to prepare and submit the Certified List of Real Property Tax Delinquencies to the Municipal Accountant which caused the latter not to set up Real Property Tax and Special Education Tax Receivables at the beginning of the year, which caused doubts as to the accuracy and reliability of the accounts.

Cagdianao Qualified/ Modified

The balances as of December 31, 2017 of the Real Property Tax and Special Education Tax Receivables amounting to Php1,976,345.09 and Php1,544,473.52 respectively, vary from the balances reported in the Certified List of Real Property Tax Delinquencies maintained by the Municipal Treasurer’s Office which caused doubt as to the accuracy and reliability of the accounts.

Dinagat Qualified/ Modified

The reliability of the net book value of Property, Plant and Equipment (PPE) accounts of Php141,768,775.53 as of December 31, 2017 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, in violation of Sections 119, 120 and 124 of the Manual on the New Government Accounting System, Volume 1 for LGUs, thus, affecting the fair presentation of the account balances in the financial statements.

Libjo (Albor) Qualified/ Modified

The agency’s net book value of Property, Plant, and Equipment (PPE) aggregating Php Php 50,881,484.19.00 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 resulting to unreliable Property, Plant, and Equipment (PPE) account in the Statement of Financial Position; and

467

LGU AUDIT


Grants and Donations in the Trust Fund totaling Php 25,169,771.35 were recognized as Revenue for CY 2017, thus, the requirement of the revised Chart of Account, which is Philippine Public Sector Accounting Standards compliant, not to have a Revenue account in the Trust Fund was not complied to.

Loreto Qualified/ Modified

Due to the failure of the Municipal Treasurer to prepare and submit the Certified List of Real Property Tax Delinquencies to the Municipal Accountant which caused the latter not to set up Real Property Tax and Special Education Tax Receivables at the beginning of the year, which caused doubts as to the accuracy and reliability of the accounts;

The Municipal Treasurer failed to prepare and submit the

Certified List of Real Property Tax Delinquencies to the Municipal Accountant which caused the latter not to set up Real Property Tax and Special Education Tax Receivables at the beginning of the year, which caused doubts as to the accuracy and reliability of the accounts; and,

The existence, validity and accuracy of Property, Plant and

Equipment (PPE) accounts totaling Php 146,117,659.31 could not be ascertained due to the absence of the Report of Physical Count of PPE as of year-end contrary to Section 57 of the MNGAS, Vol. II, and Item 4.3 of COA Circular No. 97-005, thus, rendering the balances of the PPE accounts unreliable.

San Jose Qualified/

Modified Due to failure of theMunicipal Treasurer to prepare and

submit the Certified List of Real Property Tax Delinquencies to the Municipal Accountant which caused the latter not to set up Real Property Tax and Special Education Tax Receivables.

Tubajon Qualified/

Modified The agency’s property, plant and equipment (PPE) which are

stated in the statement of financial position at a carrying amount of Php 82,916,862.17 as of December 31, 2017 could not be validated because of the absence of updated inventory reports, lapsing schedule and other pertinent information on the items comprising the PPE accounts. We were unable to obtain sufficient appropriate audit evidence about the carrying amount of the properties by other alternative procedures because of the inadequacy of the accounting records. Consequently, we were unable to determine whether any adjustment to the reported amount was necessary.

468

LGU AUDIT


Negros Island Region

Negros Occidental Qualified/ Modified

Due to the failure to conduct physical inventory its Property, Plant and Equipment (PPE) in the amount of P6,045,954,954.44, Investment Property of P32,439,080.00 and Biological Assets of P41,961,335.00, thereby rendering the accounts doubtful.

Cities:

Bacolod City Qualified/ Modified

The General Service Officer failed to update entries in Property, Plant and Equipment cards, hence there was no reconciliation of account balances shown in the Annual Physical Inventory Report (APIR) at P669,023,577.70 and in the financial statements and subsidiary ledgers maintained in the City Accountant's Office amounting to P730,429,634.60, thus rendering the correctness of PPE account balances as of December 31, 2017, doubtful;

The Construction in Progress balance of P408,092,825.21 per records of the City Accounting differs from the amount of CIP projects reported by the City Engineer's Office of P17,648,074.79 due to delay of the City Engineering Office in rendering report on completed projects and the absence of regular reconciliation between the records of the two concerned offices;

Financial assistance totaling P 5,195,000.00 granted to six leagues/federations in prior years remained outstanding for over 1 year as of December 31, 2017, contrary to the terms in the Memorandum of Agreement hence, the implementation on the intended purpose could not be ascertained and exposed the fund to possible loss. Non-liquidation of utilized financial assistanceresulted to overstatement of Other Receivables account hence, affecting fair presentation of financial statements;

Fund transfers/financial assistance to barangays totatling P2,600,000.00 for CY 2017 and prior years' fund transfers of P6,794,757.28 remained unliquidated as of December 31, 2017, although the purposes or activities had already been implemented/completed;

Financial assistance totaling P27,824,576.59 granted to 45 NGOs/POs remained unliquidated as of December 31, 2017. December 31, 2017, remained unliquidated;

Advances to Officers and Employees and Special Disbursing Officers which have accumulated to P32,227,227.62 as of December 31, 2017, remained unliquidated;

469

LGU AUDIT


Management has still not implemented our CY 2012 recommendation to reconcile the Inventories totaling P144,481,567.04 as of December 31, 2017 making the inventory figures doubtful; and,

The Investment in Stocks and Other Investments totaling P2,768,143.96 still have no documents to support the veracity of the amount.

Bago City Qualified/ Modified

Accuracy of Property, Plant and Equipment accounts totaling P1,257,201,430.03 could not be ascertained due to the absence of complete physical inventory report, as well as ledger cards and property cards are not updated;

Various unserviceable properties with net book value of P1,391,012.82 remained undisposed for more than five years;

RPT and SET Receivables were booked up in February, 2017 based on the Real Property Tax target for 2017 less the total RPT Reduction thus, rendering the accuracy of the accounts valued at year end at P217,092,453.14 and P88,432,219.09, respectively, doubtful ; and,

Depreciation expense was not provided for Construction and Heavy Equipment with total acquisition cost of P23,619,139.25.

Cadiz City Qualified/ Modified

Due to the failure of the Inventory Committee to conduct physical inventory of the City's Property, Plant and Equipment (PPE) totaling P1,896,509,572.75,which has affected the fair presentation of the accounts in the financial statements.

Escalante City Qualified/ Modified

Failure to conduct complete physical inventory of its Property, Plant and Equipment (PPE) amounting to P991,160,441.49 which resulted in the non-determination of the physical existence, condition and valuation of theses assets in the financial statements.

Himamaylan City Qualified/

Modified The City failed to complete the reconciliation of its Property,

Plant and Equipment between the PPE ledger cards of its PPE totaling P855,454,860.95 and the Report of the Physical Count of PPE of P711,262,538.18 with a difference of P144,192,322.77 as of December 31, 2017;

The Cash in Bank – LCCA and LC- Time Deposits balances per book and per bank differed by P22,213,842.60 and was not reconciled, monthly bank reconciliation statements for 11 depository accounts were not prepared and submitted; and,

Year-end balance of Loans Payable account amounting to P229,217,028.79 do not reconciled with the balance per confirmation letter from creditors.

470

LGU AUDIT


Kabankalan City Qualified/ Modified

Cash advances amounting P12,237,966.57 remained unliquidated as of December 31, 2017; and,

The City failed to conduct the physical inventory of its properties and submit the Reports on the Physical Count of Inventories (RPCI) and Property, Plant and Equipment (RPCPPE) as of December 31, 2017.

La Carlota City Qualified/ Modified

The City did not conduct actual physical count of its property, plant and equipment valued at P638,480,548.15, thus, the amount reflected in the financial statements is doubtful.

Sagay City Qualified/

Modified Due to the failure to conduct a complete physical inventory of

its Property, Plant and Equipment (PPE) amounting to P1,339,297,265.48 and failure to reconcile the account between the Accounting and the General Services records, rendered the accuracy and existence of the PPE account balance doubtful.

The unreconciled Cash In Bank balance between the Accounting records and the cash book of the City Treasurer's Office with a total variance of P51,859,929.36 casts doubt on the accuracy and reliability of the account as presented in the financial statement.

San Carlos City Qualified/ Modified

Discrepancy of P23,421,041.61 between the General Service Office (GSO) report and accounting records of the Motor Vehicles and Construction/Heavy Equipment accounts.

Silay City Qualified/ Modified

Due to the failure to reconcile the accounting and the physical inventory report of the Property, Plant and Equipment (PPE), resulting in a difference of P121,710,332.04, thus the accuracy and validity of the reported PPEs in the financial statements could not be ascertained.

Sipalay City Qualified/ Modified

The noted discrepancies between the physical count reports and the book balances which remained unreconciled as of December 31, 2017 and substantially overstated the Property, Plant and Equipment account by P549,682,849.96.

Talisay City Qualified/ Modified

Failure to submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) valued at P673,408,708.29 excluding Construction-in Progress of P34,824,263.03 as well as non-reconciliation of PPE per books as against GSO records, thus the accuracy and validity of the reported PPEs in the financial statements could not be ascertained.

Victorias City Qualified/ Modified

Unreconciled variance in its property, plant and equipment (PPE) accounts in the amount of P295,641,136.58 with property records and has not conducted complete physical inventory of government properties; and,

471

LGU AUDIT


Significant amount of unliquidated cash advances to officiers and employees totaling P27,853,700.00.

Municipalities:

Binalbagan Qualified/

Modified Failure to conduct physical inventory of its properties and

submitted the Report on the Physical Count of Property, Plant and Equipment valued in the books at P383,393,565.52; and,

To liquidate its cash advances granted to Officers and Employees amounting to P8,124,556.59

Calatrava Qualified/

Modified Due to the failure to provide depreciation for the Property,

Plant and Equipment (PPE) totaling P150,303,057.57, thus the reliability of the reported PPEs in the financial statements was doubtful.

Candoni Qualified/

Modified Due to the failure of the Municipal Accountant & Treasurer to

conduct reconciliation of the physical count of its properties and non-settlement of cash advances.

Cauayan Qualified/

Modified Due to the continued inability of the LGU to conduct physical

inventory of its Property, Plant and Equipment accounts totaling P57,505,204.73.

Enrique B. Magalona Qualified/

Modified Due to the failure of the Municipality to conduct physical

count of its property, plant and equipment (PPE) valued at P194,202,419.08 and submit the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and the significant amount of unliquidated Advances to Officers and Employees totaling P7,116,980.08 .

Hinigaran Qualified/

Modified The Municipality failed to conduct physical inventory of its

properties and submit the Report on the Physical Count of Property, Plant and Equipment valued in the books at P190,490,328.64; and,

To liquidat the cash advances granted to Officers and Employees of the Municipality of Hinigaran for the past years amounting P4,963,463.13 as of December 31, 2017.

Hinoba-an Qualified/

Modified The Municipality has not rendered and submitted a complete

report on the physical count of its property, plant and equipment as of December 31, 2017 thus, the existence of PPE with carrying value of P195,210,699.00 is not confirmed.

Ilog Qualified/

Modified Due to the failure of the Municipal Accountant & Treasurer to

conduct reconciliation of the physical count of its properties and non-settlement of cash advances.

472

LGU AUDIT


Isabela Qualified/ Modified

The Municipality failed to submit the Report of the Physical Count of Property, Plant and Equipment (RPCPPE) for CY 2017 because of the failure to conduct the required physical inventory count of its property, plant and equipment amounting to P 125,133,907.51 which represent 53.00% of total PPE.

La Castellana Qualified/ Modified

The Municipality failed to conduct the required physical inventory count of its property, plant and equipment amounting to P 42,373,277.75 as of year-end of CY 2017 which hindered to ascertain the accuracy of this balance and to prepare and submit Monthly Bank Reconciliation Statements (BRS) for all depository accounts for CY 2017 which amounted to P30,542,595.53.

Manapla Qualified/ Modified

The Municipality did not conduct actual physical count of its property, plant and equipment valued at P36,848,074.40, thus, the amount reflected on the financial statements is doubtful.

Moises Padilla Qualified/ Modified

The Municipality failed to conduct the required physical inventory count of its property, plant and equipment amounting to P 143,453,539.96.

Murcia Qualified/ Modified

The Municipality did not conduct complete physical count of its property, plant and equipment (PPE) with a net book value of P218,059,219.75 and submitted the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) and significant amount of unliquidated Advances to Officers and Employees totaling P7,630,294.67.

Pontevedra Qualified/ Modified

The Municipality did not conduct actual physical count of its property, plant and equipment valued at P113,692,910.21, thus, the amount reflected in the financial statements is doubtful.

Pulupandan Qualified/ Modified

Failure of the Municipality to conduct actual physical count of its Property, Plant and Equipment totaling P40,924,632.08 as of December 31, 2017;

Recorded properties aggregating P36,073,361.49 were not provided with depreciation expenses;

Cash-in-Bank, Local Currency balance of all funds totaling P55,504,069.50, cannot be ascertained due to non-submission of the monthly bank reconciliation statements; and,

RPT/SET Receivables were not booked up based on the RPTAR, and cash advances amounting to P3,694,191.29 not liquidated within the prescribed period.

San Enrique Qualified/ Modified

The Municipality did not conduct actual physical count of its property, plant and equipment valued at P36,848,074.40, thus, the amount reflected on the financial statements is doubtful

473

LGU AUDIT


Toboso Qualified/ Modified

Due to the failure to conduct the annual physical count of property, plant and equipment (PPE) and inventories totaling P192,037,752.28, thus the physical existence of PPEs and Inventory items and the reliability of the balances of said accounts could not be ascertained.

Valladolid Qualified/

Modified Validity and existence of Property, Plant and Equipment

account amounting to P64,757,522.53 as of December 31, 2017 could not be ascertained due to the failure of the municipality to conduct complete physical inventory;

Depreciation was not recorded in the books for government properties of the Municipality with a total cost of P48,146,344.83; and,

The submission of financial reports was not timely. 4. Monthly Bank Reconciliation Statements for CY 2017 for Special Education Fund and Trust Fund were not prepared/submitted by the Municipal Accountant.

Negros Oriental Qualified Results of the physical count on properties for CY 2014 to

CY 2016 were not yet reconciled with the accounting records while no physical count was conducted in CY 2017 on inventory and movable property, plant and equipment accounts valued in the books at P280,784,725.27 and P849,036,162.14, respectively;

Funds transferred to various National Government Agencies, Government-Owned and/or Controlled Corporations, Local Government Units and Non-Governmental Organizations/People’ Organizations amounting to P69,699,569.70 have been outstanding for more than one to five years;

The related asset and equity accounts were overstated and understated by P5,224,567.75, respectively, due to the erroneous recording of receivable accounts; and,

Materials amounting to P6,160,116.61 which were distributed to various beneficiaries in CY 2010 were still recorded in the Construction in Progress account and the value of Motor Vehicles costing P27,327,531.90 which were donated to other local government units were not yet dropped from the books.

Cities:

Bais City Qualified/ Modified

Balance of movable PPE totaling P98.137 million as at December 31, 2017 remained unreliable due to the inability of the Inventory Committee to reconcile the results of the physical count with the accounting records.

474

LGU AUDIT


The Trust Liability-DRRMF account and the related asset/expense accounts were overstated by P59.498 million while the Continuing Appropriations were understated by P8.984 million due to the erroneous transfer of the unutilized balance of the CY 2017 LDRRMF-MF-Capital Outlay to the Special Trust Fund and failure to take-up closing entries for the actual utilization of the fund at year-end, hence affecting the fairness of the balances presented in the financial statements.

The failure to recognize depreciation for the City’s depreciable assets totaling P17.65 million understated expenses and overstated the carrying value of assets by an undetermined amount.

Bayawan City Qualified/

Modified The correctness of the recorded assets could not be

ascertained because the Inventory Committee was not able to conduct physical count of the inventories and movable properties amounting to P42,525,632.91 and P306,634,813.92, respectively;

The City Accounting Office did not maintain subsidiary records neither the City General Services Office adhere to rules and regulations on supply and property management, hence, properties with acquisition costs totaling P1,234,965.05 remained unidentified;

Assets with acquisition cost/net book value of P107,918,900.61 were recorded in the books using incorrect accounts, thus, affecting the fairness of the presentation of the related asset accounts in the financial statements;

Assets costing P39,511,105.15 as of December 31, 2017 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 of the City; and,

The residual value used in computing depreciation for calendar year 2017 was ten percent of the acquisition cost instead of five percent, thus, resulting in the understatement of depreciation expenses and overstatement of the related asset and equity accounts.

Canlaon City Qualified/

Modified / RPT and SET receivables were understated by P8.04 million

and P6.52 million, respectively, due to the erroneous practice of setting up said receivables based on estimated amounts collectible; properties amounting to at least P11.50 million are still recorded in the books, thus overstating the assets;

Account Loans Receivable-Others, having a balance of P11.49 million could not be verified due to the absence of a subsidiary ledger;

475

LGU AUDIT


Movable assets totaling P77.10 million could not be ascertained because the physical count thereof was not reported by type of PPE but by office, thus could not be compared and reconciled;

Public Infrastructures is understated by P7.26 million representing 50% of public infrastructure balances previously transferred to the registries which are now required to be recorded back to the books of account at 25% per year pursuant to COA Circular No. 2016-004;

The failure to provide depreciation on depreciable assets amounting to P563.66 million and failure to liquidate cash advances to officers and employees amounting to P11.08 million understated the total expenses and overstated the assets, Government Equity and the related Net Income of the LGU as at year-end; and,

Unserviceable properties amounting to at least P11.50 million are still recorded in the books, thus overstating the assets.

Guihulngan City Qualified/ Modified

The city still failed to conduct a physical count of movable assets and inventories valued at P130.41 million, thus rendering the accuracy of the balances doubtful as the agency’s records did not permit the application of alternative procedures;

The failure to recognize receivables for loans granted under the Swine Feeds Loan Program understated receivables by P10.31 million;

The incorrect accounting of RPT and SET overstated receivables by P9.8 million;

Assets are overstated by the amount of unrecorded depreciation on depreciable assets amounting to P53.06 million which have not been transferred from the Trust Fund to the General Fund despite completion thereof; and,

Liabilities are overstated by an undetermined amount due to failure to charge completed projects to the trust fund.

Dumaguete City Qualified/

Modified The reliability of the balance of the Property, Plant and

Equipment (PPE) accounts amounting to P1.29 billion remained doubtful because PPE accounts amounting to P41.39 million are still for identification, accounting records do not agree with the General Service Office (GSO) records, and the conduct of physical count of PPE was not completed. Moreover, the correct valuation of the Land account amounting to P155.65 million could not be ascertained while absolute ownership over these properties totaling P59.43 million could not be established due to lack of supporting documents;

476

LGU AUDIT


The balance of the Cash in Bank amounting to P361.12 million is misstated in the financial statements because stale checks amounting to P0.22 million aged nine to 111 months were still included as outstanding checks at year-end and reconciling items of P0.95 million still remained unadjusted in the books;

The balance of the Accounts Payable amounting to P74.76 million is unreliable due to errors in recording liabilities, inclusion of accounts totaling P2.33 million aged more than five years, existence of negative subsidiary ledger balances totaling P3.64 million and inclusion of accounts without specific claimants;

The accuracy of the Due from Non-Governmental Organizations/People’s Organizations (NGOs/POs) and Due to Other National Government Agencies (NGAs) accounts amounting to P50.55 million and P65.77 million, respectively, is unreliable due to lack of sufficient details and supporting records;

Cash advances totaling P23.16 million aged more than five to ten years remained unliquidated as of December 31, 2017, thus, possibly misstating the cash and equity accounts; and

The balance of Loans Receivable – Others account of P4.52 million is rendered doubtful as not all loan payments were taken up in the books because the Sectoral Desk Office instead of the City Treasurer’s Office received payments for loan amortization from various people’s organizations without the issuance of official receipts.

Tanjay City Qualified/ Modified

Discrepancies amounting to P72.33 million between the physical count of movable PPE and the book balances, thus rendering the book balances unreliable;

Trust liabilities may be overstated and Government Equity understated by P19.48 million representing LDRRM balances transferred to the Trust Fund over five years ago which were not reverted back to the General Fund;

The transfer of unexpended QRF and MOOE balances of DRRMF from the GF to the TF was not taken up in the TF thus understating the trust liabilities in the TF by P11.9 million;

The non-recognition in the books of a dump truck purchased, the cost of which was directly debited from the bank account, overstated Cash in Bank and understated Construction and Heavy Equipment by P9.2 million;

Various asset accounts are also understated while the Construction in Progress (CIP) is overstated by P300 million due to the neglect to transfer completed projects from CIP to the asset accounts;

477

LGU AUDIT


Other Public Infrastructures could also be overstated by P30.16 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, thus TWD continues to operate as an independent government corporation;

Understatement in receivables by an undetermined amount likewise exists due to the omission of the accounting office to recognize Special Education Tax Receivable for several years; and,

Unserviceable properties amounting to P15.73 million are still recorded in the books, thus overstating the balance of movable properties.

Municipalities:

Amlan Qualified/ Modified

Movable assets under the Property, Plant and Equipment (PPE) account valued at P22,345,688.74 or 13.60% of its total assets remained unreliable due to management’s inability to complete the physical count of its properties despite repeated recommendations in the previous years.

Ayungon

Qualified/ Modified

The propriety and accuracy of the movable assets under the Property, Plant and Equipment account valued at P34,060,461.07 which comprises 9.3% of the total assets remained unreliable due to the municipality’s inability to conduct the annual physical count of its properties.

A qualified opinion was rendered on the fairness of the presentation of the financial statements of the Municipality of Bacong in view of the following exceptions noted that need immediate action:

Bacong Qualified/ Modified

The Municipality did not record in the books of accounts 17 parcels of land amounting to P19.78 million and did not conduct a physical count of its land account, thus understating the land and government equity account balances;

The ownership of Land valued at P13.98 million remained unreliable because these were not covered by Transfer Certificates of Title/Original Certificates of Title (TCT/OCT) in the name of the Municipality; and

The movable assets under the Property, Plant and Equipment (PPE) account valued at P10.56 million (net of accumulated depreciation), which comprises 8.59% of its total PPE and 3.60% of its total assets as at December 31, 2017 remained unreliable because the Municipality did not conduct physical count and maintain property records.

478

LGU AUDIT


Basay Qualified/ Modified

The correctness of the recorded assets could not be ascertained because the Inventory Committee was not able to conduct physical count of the inventories and movable properties amounting to P143,175.74 and P22,846,916.97 respectively;

Cash advances totaling P3,709,653.56 remained unliquidated as of December 31, 2017, thus, possibly overstating the asset and equity accounts;

Construction in Progress account totaling P22,549,073.42 in the General Fund remained in the books of accounts for years even if the projects might have been completed already;

Assets costing P14,958,157.03 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; and,


Bindoy Qualified/

Modified The book balance of movable assets as of December 31,

2017 of P42.26 million could not be ascertained since a physical count of movable PPE as of said date was not conducted. In addition, cash advances granted to officers and employees amounting to P7.55 million, of which P2,552,591.65 is the accountability of the former Disbursing Officer, remained unliquidated, possibly overstating assets and understating expenses.

Dauin Qualified/

Modified The existence and reliability of the movable property, plant

and equipment account balances as of December 31, 2017 which amounted to P17,871,476.96 (net of accumulated depreciation) or 21.64% of the total property, plant and equipment account and 7.63% of the total assets could not be ascertained due to non-conduct of physical count and the non-maintenance of property cards.

Jimalalud Qualified/

Modified Assets amounting to P14,409,716.02 acquired out of trust

funds remained recorded in said funds despite completion of the projects or delivery of the equipment, hence misstating the asset accounts of the General and Trust Funds of the municipality;

No bank reconciliation statements were prepared for two General Fund bank accounts, thus the fairness of presentation of the cash accounts could not be ascertained; and

479

LGU AUDIT


The existence and accuracy of the movable PPE valued at P17.13 million, which comprises 7.83% of total assets as of December 31, 2017, cannot be ascertained because the physical count done by department heads was not consolidated and reconciled with the book balances.

La Libertad Qualified/ Modified

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 P3,173,490.00, the assessed value of the properties as stated in the tax declaration;

The Municipal Treasurer failed to account for disbursements totaling P12.7 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,

The existence and accuracy of the movable PPE accounts valued at P33,219,142.34 which comprises 7.85% of total assets as at 31 December 2017, cannot be ascertained since the inventory committee was not able to conduct the physical count and prepare the corresponding report.

Mabinay Qualified/ Modified

Several parcels of land valued at P58.97 million were not recorded in the books of the Municipality, thereby understating the assets and equity. In addition, the Municipality, as in previous years, did not complete the actual physical inventory of the items booked under the property, plant and equipment, thus the existence, accuracy and condition of its movable properties amounting to P47.99 million could not be ascertained.

Manjuyod Qualified/ Modified

The book balance of movable assets as of December 31, 2017 of P46.43 million could not be ascertained since a physical count of movable Property, Plant and Equipment as of said date was not conducted;

Projects amounting to P62.08 million recorded prior to CY 2010 were not closed to assets upon completion but remained in the Construction in Progress account, thus overstating this account and understating the appropriate asset accounts;

Cash advances granted to officers and employees amounting to P4.10 million remained unliquidated, possibly overstating assets and understating expenses.


Movable assets under the Property, Plant and Equipment (PPE) account valued at P18,328,825.32, representing 19.27% of its total PPE and 7.96% of its total assets remained unreliable due to management’s inability to conduct the physical count of its properties despite repeated recommendations in the previous years.

480

LGU AUDIT



Movable assets valued at P12,871,273.50, representing 8.54% of the total assets remained unreliable due to management’s inability to conduct a physical count of its properties despite repeated recommendations in previous years. Likewise, the accuracy of the receivables pertaining to real property and special education taxes totaling P1,419,834.45 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.

Santa Catalina Qualified The correctness of the recorded assets could not be

ascertained because the Inventory Committee was not able to conduct physical count of the inventories and movable properties amounting to P529,192.95 and P89,334,694.76, respectively;

Nine general ledger accounts totaling P6,007,493.77 temporarily lodged in “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, 2017 or for more than ten years already, thus, the accuracy of the balances of these accounts remained doubtful and unreliable.

Assets costing P33,307,844.21 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; and,


Siaton Qualified/

Modified The accuracy and existence of inventories and movable

properties amounting to P26.77 million and P130.75 million, respectively, could not be ascertained because the Municipality did not conduct physical count;

The ownership of parcels of land costing P8.60 million could not be fully validated because these lots were not covered by Transfer Certificates of Title;

Funds transferred to a national agency and a local government unit amounting to P1,200,000.00 and P183,750.00, respectively, were recorded as expenses instead of receivables, thus, understating both the asset and equity accounts; and

The receipt of the delivery of one unit brand new ambulance costing P1.15 million was not recorded in the books of accounts, thus, understating the asset and liability accounts.

481

LGU AUDIT


Sibulan Qualified/ Modified

Assets with net book value of P11,728,265.86 were recorded in the books using incorrect accounts;

Validity of the receivables amounting to P1,327,983.62 could not be ascertained due to the lack of subsidiary records; and

Movable assets valued at P42,016,798.19 or 11.29% of the total assets remained unreliable due to management’s inability to complete the physical count of its properties despite repeated recommendations in the previous years.

Tayasan Qualified/ Modified

A difference of P8,071,595.21 exists between the balance per bank statements and book balance for Cash in Bank as of Deceember 31, 2017 which remains unreconciled as a result of the failure to prepare bank reconciliation statements;

The erroneous inclusion of unreleased checks in the Report of Checks Issued overstated disbursements by P6,226,375.46, consequently understating Cash In Bank and the related liability accounts by the same amount; and,

The existence and accuracy of the movable PPE accounts valued at P33.86million, which comprises 11.67% of total assets as of December 31, 2017 could not be ascertained due to the failure of the inventory committee to complete the physical count.

Valencia Qualified/ Modified

The existence and reliability of the balance of movable Property, Plant and Equipment (PPE) accounts amounting to P43.57 million of its total PPE or 11.49% of its total assets could not be ascertained due to incomplete conduct of physical count and the non-maintenance of property cards. Moreover, its absolute ownership over the land account amounting to P68.57 million, or 14.23% of its total assets could not be established due to lack of supporting documents.

Vallehermoso Qualified/ Modified

The existence and accuracy of the movable PPE accounts valued P36,342,768.70, which comprises 14.36% of total assets as at 31 December 2017, 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 P34,019,860.00 were not recorded in the books of accounts, thereby understating the assets presented in the financial statements.

Zamboanguita Qualified/ Modified

The existence and reliability of the movable property, plant and equipment account balances as of December 31, 2017 which amounted to P19,255,597.64 (net of depreciation) or 14.87% of the total property, plant and equipment account and 8.09% of the total assets could not be ascertained due to failure of management to conduct physical count and the non-maintenance of property cards.

482

LGU AUDIT


Autonomous Region in Muslim Mindanao (ARMM)

Basilan Unqualified/ Unmodified

Cities:

Isabela City Qualified/ Modified

Unreliable year-end Property, Plant and Equipment account balances - P698,804,620.76 or 65.26% of the total assets due to: (a) non-conduct of inventory count for CY 2017 (b) inadequacies of subsidiary records and property ledger cards (c) wrong valuation of PPE accounts which are not in conformity with the existing rules and regulations.

Investment Property amounting to P30,113,387.00 presented in the financial statements submitted by the agency does not coincide with the amount per schedule submitted as of December 31, 2017 contrary to Section 111 (2) of PD 1445

Lamitan City Qualified/ Modified

The validity, correctness and existence of the reported balance of the Property Plant and Equipment (PPE) account amounting to P455,837,534.33 (historical cost) 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 P92,718,478.82.

Municipalities:

Akbar Qualified/ Modified

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.

Al-Barka Qualified/ Modified

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. Likewise, the Annual (CY 2017) Bank Reconciliation Statement submitted by the Municipal Government was not prepared for all bank accounts; and,

Disbursements and/or liquidations of the Municipality of Al-Barka, on fund transfers of National Government Agencies were not supported with the copies of Memorandum of Agreement or Trust Agreement in violation of Item 3.2.1 of COA Circular No. 2012-001 dated June 14, 2012.

Hadji Mohammad Ajul 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. Likewise, the Annual (CY 2017) Bank Reconciliation Statement submitted by the Municipal Government was not prepared for all bank accounts; and,

483

LGU AUDIT


Disbursements and/or liquidations of the Municipality of Hadji Mohammad Ajul, on fund transfers of National Government Agencies were not supported with the copies of Memorandum of Agreement or Trust Agreement in violation of Item 3.2.1 of COA Circular No. 2012-001 dated June 14, 2012.

Hadji Muhtamad Qualified/

Modified 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.

Lantawan Qualified/

Modified Unreliable year-end Property, Plant and Equipment account

balances – P141,090,241.58 or 57.55% of the total assets due to: (a) non-conduct of inventory count for CY 2017 (b) inadequacies of subsidiary records and property ledger cards (c) wrong valuation of PPE accounts which are not in conformity with the existing rules and regulations.

Maluso Qualified/

Modified The existence, valuation, and accuracy of the balances of the

Property, Plant and Equipment amounting to P80,981,316.27 could not be properly ascertained due to the following:

a) the conduct of inventory count was not well

performed by the Municipality; and,

b) inadequacies of subsidiary records and property

ledger cards and (c) no depreciation charges were provided for some items of PPE amounting to P21,542,470.35.

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.

Disbursements and/or liquidations of the Municipality of

Maluso, on fund transfers of National Government Agencies were not supported with the copies of Memorandum of Agreement or Trust Agreement in violation of Item 3.2.1 of COA Circular No. 2012-001 dated June 14, 2012.

Sumisip Qualified/

Modified Unreliable year-end Property, Plant and Equipment account

balances – P438,280,025.13 or 99.48% of the total assets due to: (a) non-conduct of inventory count for CY 2017 (b) inadequacies of subsidiary records and property ledger cards (c) wrong valuation of PPE accounts which are not in conformity with the existing rules and regulations.

Tabuan-Lasa Qualified/

Modified The existence, valuation, and accuracy of the balance of the

Property, Plant and Equipment amounting to P40,998,753.52 or 96.53% of the total assets could not be ascertained due to:

484

LGU AUDIT


a) non-conduct of inventory count for CY 2017; and,

b) inadequacies of subsidiary records and property ledger cards.

The recorded balances of Inventory accounts amounting to P223,295.25 at year-end is unreliable, and their existence and completeness could not be fully determined due to (a) non conduct of physical count of inventories; and (b) stock ledger card and stock cards were not maintained in violation of Section 124, Volume I of the Manual on the New Government Accounting System (MNGAS) and Sections 119 and 120 of the same manual;

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. Likewise, the Annual (CY 2017) Bank Reconciliation Statement submitted by the Municipal Government was not prepared for all bank accounts;

Disbursements and/or liquidations of the Municipality of Tabuan Lasa, on fund transfers of National Government Agencies were not supported with the copies of Memorandum of Agreement or Trust Agreement in violation of Item 3.2.1 of COA Circular No. 2012-001 dated June 14, 2012;

Despite the disclosure of the utilization and unexpended balances of the LGU’s DRRM fund in the Notes to Financial Statements, no trust liability was recognized in the face of the financial statements of the Municipal Government. Such inconsistency is violative of Section 111 (2) of PD 1445 and may often result to misleading information disclosed in the financial statements. Likewise, the Municipal Government failed to maintain its ledger for its Trust-Liability account; and,

The Municipal Government failed to comply with the following requirements set forth in Presidential Decree No. 477 dated June 3, 1974 as well as RA 7160 otherwise known as the Local Government Code:

1) to maintain a separate fund for its Special Education Fund; and,

2) no Municipal School Board was established in the Municipality of Tabuan Lasa.

Tipo-Tipo Qualified/ Modified

Unreliable year-end Property, Plant and Equipment account balances – P 46,355,783.65 or 24.05% of the total assets due to: (a) non-conduct of inventory count for CY 2017 (b) inadequacies of subsidiary records and property ledger cards (c) wrong valuation of PPE accounts which are not in conformity with the existing rules and regulations.

485

LGU AUDIT


Tuburan Qualified/ Modified

Unreliable year-end Property, Plant and Equipment account balances – P69,114,995.71 or 35.96% of the total assets due to: (a) non-conduct of inventory count for CY 2017 (b) inadequacies of subsidiary records and property ledger cards (c) wrong valuation of PPE accounts which are not in conformity with the existing rules and regulations.

Ungkaya Pukan Qualified/ Modified

The existence, valuation, and accuracy of the balance of the Property, Plant and Equipment amounting to P148,635,854.18 could not be ascertained due to:

a) non-conduct of inventory count for CY 2017;

b) inadequacies of subsidiary records and property ledger cards; and,

c) no depreciation was provided for Land Improvement, Aquaculture Structures amounting to P10,464,149.21.

The recorded balances of Inventory accounts amounting to P222,963.00 at year-end is unreliable, and their existence and completeness could not be fully determined due to

a) non conduct of physical count of inventories; and,

b) stock ledger card and stock cards were not maintained in violation of Section 124, Volume I of the Manual on the New Government Accounting System (MNGAS) and Sections 119 and 120 of the same manual.

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. Likewise, the Annual (CY 2017) Bank Reconciliation Statement submitted by the Municipal Government was not prepared for all bank accounts;

Disbursements and/or liquidations of the Municipality of Ungkaya Pukan, on fund transfers of National Government Agencies were not supported with the copies of Memorandum of Agreement or Trust Agreement in violation of Item 3.2.1 of COA Circular No. 2012-001 dated June 14, 2012;

Despite the disclosure of the utilization and unexpended balances of the LGU's DRRM fund in the Notes to Financial Statements, no trust liability was recognized in the face of the financial statements of the Municipal Government. Such inconsistency is violative of Section 111 (2) of PD 1445 and may often result to misleading information disclosed in the financial statements. Likewise, the Municipal Government failed to maintain its ledger for its Trust-Liability account; and,

The Municipal Government failed to comply with the following requirements set forth in Presidential Decree No. 477 dated June 3, 1974 as well as RA 7160 otherwise known as the Local Government Code: (1) to maintain a separate fund for its Special Education Fund; and (2) no Municipal School Board was established in the Municipality of Ungkaya Pukan.

486

LGU AUDIT


Lanao del Sur Unqualified/ Unmodified

City:

Marawi City Qualified/ Modified

The reliability of the book balance of the Property, Plant and Equipment in the consolidated Statement of Financial Position as of December 31, 2017 totaling P1,192,751,146.53 could not be verified and ascertained due to the absence of Report on the Physical Count of the Property, Plant and Equipment (RCPPE) and lack of property records/ledgers.

Municipalities:

Bacolod-Kalawi Qualified/ Modified

The un-reconciled Property, Plant and Equipment (PPE) with net book value of P 70, 587,442.82; the unsubstantiated earned income on other tax revenue amounting to P 1,411,368.45; delayed rendering of accounts and absences of subsidiary ledgers on all accounts thus, affect the financial statements as a whole.

Balabagan Qualified/ Modified

The Municipality was unable to address the issue on the Property, Plant and Equipment (PPE) account owing to the non conduct of Periodic Physical Inventory in contrary to the pertinent provisions of the New Government Accounting Systems (NGAS) Manual for Local Government Sector. Hence, the accuracy and existence of the PPE account amounting to P54,862,252.88 could not be ascertained.

Balindong Qualified/ Modified

Report of Collection and Deposits (RCD) for funds received/collected by the Municipality during the year under audit, totaling P 1,013,020.58 were not submitted to the Audit Team.

Year end physical inventory was not conducted for the account of Property , Plant and Equipment (PPE) with a balance of P 81,946,061.61 and PPE Ledger Cards and acknowledgment Receipt for Equipment were not maintained contrary to Section 124 and 114 of NGAS Manual for LGUs, Volume 1 and Section 2 of Presidential Decree No. 1445. Thus, the correctness and validity of the PPE account could not be ascertained and their existence could not be established.

Bayang Qualified/ Modified

The balance of Cash in Bank amounting to P1,090,054.81 as of December 31, 2017 was unreliable as a result of the failure of the agency to established complete records of preparation and submission of bank reconciliation; and,

The existence, completeness and the valuation of the Property, Plant and Equipment amounting to P37,762,005.18 including the depreciation expenses could not be relied upon due to the failure of the management to conduct physical count of its property, plant and equipment which may affect the fair presentation of the financial statements at the end of the period.

487

LGU AUDIT


Binidayan Qualified/ Modified

The Municipal Accountant did not submit the Bank Reconciliation Statements with the paid checks and original copies of the Debit and Credit Memos to the Auditor within the prescribed period contrary to the provisions of Section 74 of PD 1445 and COA Circular No. 96-011, thus correctness and reliability of the Cash in Bank balances could not be immediately ascertained;

The unexpended portion of LDRRMF amounting to P303,035.95 was not deposited to Special Trust Fund at the end of the year contrary to COA Circular 2012-002 dated September 12, 2012; and,

Year-end physical count was not conducted for the account of Property, Plant and Equipment (PPE) with a balance of P35,166,686.43 and PPE Ledger Cards and Acknowledgement Receipt for Equipment were not maintained contrary to Section 124 and 114 of NGAS Manual for LGUs, Volume I and Section 2 of Presidential Decree No. 1445. Thus, the correctness and validity of the PPE accounts could not be ascertained and their existence could not be established.

Buadiposo-Buntong Qualified/

Modified Failure of management to submit the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) to the Audit Team contrary to Section 124, Volume 1 of the Manual on the New Government Accounting System (NGAS) for Local Government Units, thus, correctness of the Property, Plant and Equipment in the Financial Statements as at year end is doubtful in the amount of P 14,569,471.45

Bubong Qualified/

Modified The existence, condition and accuracy of Property, Plant and

Equipment with a booked value of 61,177,207.92 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 ledger cards and stock cards of the accounting and general services offices in violation of section 124 of the NGAS and item 4.3 of COA Circular 2016-004 dated September 30,2016.

Bumbaran

Butig Qualified/ Modified

Property, Plant and Equipment totaling P58,652,259.00 is unreliable due to no available subsidiary records, report of inventory and other reports and no physical inventory conducted;

The loans from Philippine Veterans Bank, Cagayan de Oro Branch with principal amount of P49,378,644..00 could not yet be determined pending evaluation by the Technical Audit Office of the COA-ARMM; and,

Funds received by the agency in the amount of P525,188.00.00 were not submitted for audit.

488

LGU AUDIT


Calanogas Qualified/ Modified

The LGU failed to conduct a physical count of its Property, Plant and Equipment (PPE) in the sum of P56,314,484.42 as of December 31, 2017; and,

Due to GSIS account in the amount of P1,056,480.00 did not tally with the GSIS records of P16,645,787.94 way back as of December 31, 31, 2014 which remained unresolved to date.

Ditsaan-Ramain Qualified/ Modified

The Municipal Accountant failed to submit the Bank Reconciliation Statements together original copies of the Debit and Credit Memos to the Auditor within the prescribed period contrary to the provisions of Section 74 of P.D. 1445 and COA Circular No. 96-011, thus correctness and reliability of the Cash in Bank -LCCA of P 788,339.44 as of December 31, 2017 could not be ascertained.

Year-end physical inventory was not conducted for the account of Property, Plant and Equipment (PPE) with a Balance of P 32,852,722.87 and PPE Ledger Cards and Acknowledgement Receipt for Equipment were not maintained contrary to Section 2 of Presidential Decree 124 and 114 of NGAS Manual for LGU’s, Volume I and Section 2 of Presidential Decree No. 1445. The correctness and validity of the PPE account could not be ascertained and their existence could not be established.

Report of Collections and Deposits (RCD) for funds received/collected by the Municipality during the year under audit, totaling P 360,511.54 were not submitted to the Audit Team.

Ganassi Qualified/ Modified

The Municipality was unable to address the issue on the Property, Plant and Equipment (PPE) account owing to the non conduct of Periodic Physical Inventory in contrary to the pertinent provisions of the New Government Accounting System (NGAS) Manual for Local Government Sector, hence, the accuracy and existence of the PPE account amounting to P123,858,639.08 could not be ascertained.

Kapai Qualified/

Modified The Municipal Accountant failed to submit the Bank

Reconciliation Statements together with the original copies of the Debit and Credit Memos to the Auditor within the prescribed period contrary to the provisions of Section 74 of PD 14445 and COA Circular No. 96-011, thus correctness and reliability of the Cash in Bank-LCCA of P 1,378,654.11 as of December 31, 2017 could not be immediately ascertained.

Year-end physical inventory was not conducted for the account of Property, Plant And Equipment (PPE) with a Balance of P 73,302,009.05 and PPE Ledger Cards and Acknowledgement Receipt for Equipment were not maintained contrary to Section 124 and 114 of NGAS Manual for LGUs, Volume I and Section 2 of Presidential Decree No. 1445. Thus, the correctness and validity of the could not be ascertained and their existence could not be established.

489

LGU AUDIT


Repor of Collections and Deposits (RCD) for funds received/collected by the Municipality durng the year under audit, totaling P 411,445.00 were not submitted to the Audit Team.

Kapatagan Qualified/ Modified

The validity and correctness of the Property, Plant and Equipment amounting to P116,311,680.16 as of December 31, 2017 could not be fully ascertained because the management failed to submit a complete year end physical inventory report of their properties and to maintain updated property ledgers/records.

Lumba-Bayabao Qualified/ Modified

Non submission of Bank Reconciliation Statements (BRS) and Bank Statements for the year ended December 31,2017 renders doubtful the validy and reliability of the Municipality's Cash transactions amounting to P164,037,104.71 in violation of COA Circular No. 96-011 dated October 2, 1996.

Lumbaca-Unayan Qualified/ Modified

Property, Plant and Equipment totaling P5,377,040.30 is unreliable due to no available subsidiary records, report of inventory and other reports and no physical inventory conducted; and,

Funds received by the agency in the amount of P131,955.00 were not submitted for audit.

Lumbatan Qualified/ Modified

Property, Plant and Equipment totaling P73,682,769.48 is unreliable due to no available subsidiary records, report of inventory and other reports and no physical inventory conducted;

The loans from Land Bank of the Philippines, Iligan City Branch with principal amount of P44,792,000.00 could not yet be determined pending evaluation by the Technical Audit Office of the COA-ARMM; and,

Funds received by the agency in the amount of P520,420.00 were not submitted for audit.

Lumbayanague Qualified/ Modified

The balance of Cash in Bank amounting to P839,888.29 as of December 31, 2017 was unreliable due to the failure of the agency to established complete records of preparation and submission of bank reconciliation ; and,

The existence, completeness and the valuation of the Property, Plant and Equipment amounting to P110,342,320.54 including the depreciation expense could not be relied, due to the failure of the management to conduct physical count of its property, plant and equipment.

Madalum Qualified/ Modified

The un-reconciled Property, Plant and Equipment (PPE) with net book value of P 92,146,163.93; the unsubstantiated earned income on other tax revenue amounting to P 1,005,055.00; delayed rendering of accounts and absences of subsidiary ledgers on all accounts thus, affect the financial statements as a whole.

490

LGU AUDIT


Madamba Qualified/ Modified

The un-reconciled Property, Plant and Equipment (PPE) with net book value of P 12,686,793.62; the unsubstantiated earned income on other tax revenue amounting to P 322,040.00; delayed rendering of accounts and absences of subsidiary ledgers on all accounts thus, affect the financial statements as a whole.

Maguing Unqualified/ Unmodified

Malabang Qualified/ Modified

The unreliable balances of the account Cash in Bank-Local Currency Current Account of P 915, 849.43 as to the correctness due to non-preparation and non-submission of Bank Reconciliation Statement (BRS) and the understatement of Property, Plant and Equipment (PPE) and Government Equity Accounts due to non-recognition of the account "Road Network" and the management's existence of eleven (11) dormant accounts amounting to P 1,808,381.46, which could not be ascertained due to no basic reference or available supporting documents/ records/subsidiary ledger thereof.

Marantao Qualified/ Modified

Unreliable balance of Financial expenses amounting to P2,246,809.65 due to the failure of the agency to established complete records on financial expenses and the non-preparation of RAAOFE;

The existence, completeness and the valuation of the Property, Plant and Equipment amounting to P58,700,718.09 including the depreciation expenses could not be relied due to the failure of the management to conduct physical count of its property, plant and equipment.

Marogong Qualified/

Modified Year-end physical count was not conducted for the account

of Property, Plant and Equipment (PPE) with a Balance of P97,679,120.58 and PPE Ledger Cards and Acknowledgement Receipt for Equipment were not maintained contrary to Section 124 and 114 of NGAS Manual for LGUs, Volume I and Section 2 of Presidential Decree No. 1445. Thus, the correctness and validity of the PPE account could not be ascertained and their existence could not be established;

The Municipal Accountant did not submit the Bank Reconciliation Statements with the paid checks and original copies of the Debit and Credit Memos to the Auditor within the prescribed period contrary to the provisions of Section 74 of PD 1445 and COA Circular No. 96-011, thus correctness and reliability of the Cash in Bank balances could not be immediately ascertained;

The unexpended portion of LDRRMF amounting to P658,772.65 was not deposited to Special Trust Fund at the end of the year contrary to COA Circular 2012-002 dated September 12, 2012.

491

LGU AUDIT


Masiu Qualified/ Modified

The management failed to adopt sound internal control over their property, plant and equipment amounting to P50,282,319.23, contrary to PD 1445 and NGAS Manual, thus existence and valuation could not be ascertained.

Mulondo Qualified/ Modified

Cash in Bank-LCCA account was overstated due to the unrecorded issued check in the agency’s books of accounts for the month of December 2017; and,

The existence, completeness, and the valuation of the property, Plant and Equipment amounting to P25,229,932.88 including the depreciation expenses could not be relied upon due to the failure of the management to conduct physical count.

Pagayawan Qualified/ Modified

The LGU failed to conduct a physical count of its property, plant and equipment (PPE) in the sum of P77,400,082.48 as of December 31, 2017; and,

Due to GSIS accunt in the amount of P27,522.00 did not tally with the GSIS records of P14,696,190.00.

Piagapo Unqualified/ Unmodified

Picong Qualified/ Modified

The unreliable balances of the account Cash in Bank-Local Currency Current Account of P 3,113,826.68 as to the correctness due to non-preparation and non-submission of Bank Reconciliation Statement (BRS) and the understatement of Property, Plant and Equipment (PPE) and Government Equity Accounts due to non-recognition of the account "Road Network" and the management's existence of six (6) dormant accounts amounting to P 1,022,818.09, which could not be ascertained due to no basic reference or available supporting documents/ records/subsidiary ledger thereof.

Poona Bayabao Qualified/

Modified The management failed to adopt sound internal control over

their Property, Plant and Equipment amounting to P21,530,357.72, contrary to PD 1445 and NGAS Manual, thus existence and valuation could not be ascertained.

Pualas Qualified/

Modified The LGU failed to take up in the books its newly procured

equipment including the loan used to fund such procurement; and,

The Due to GSIS account in the amount of P117,455.00 did not tally with the GSIS records of P31,682,866.03 way back as of December 31, 2014 which remained unresolved to date.

Saguiaran Qualified/

Modified Overstatement of Cash in Bank-LCCA balance due to the

unrecorded check issued amounting to P175,844.88;

Unrecorded check deposit amounting to P1,092,518.89; and,

492

LGU AUDIT


The accuracy, existence and completeness of the Property, Plant and Equipment amounting to P32,892,016.68 including the depreciation expenses could not be relied due to the failure of the management to conduct physical count of its inventory.

Sultan Dumalondong Qualified/

Modified The balance of Cash in Bank amounting to P117,148.86 as

of December 31, 2017 was unreliable due to failure of the agency to established complete records of preparation and submission of bank reconciliation; and,

The existence, completeness and the valuation of the Property, Plant and Equipment amounting to P29,937,149.93 including the depreciation expenses could not be relied due to the failure of the management to conduct physical count of its inventory.

Tagoloan II Qualified/ Modified

The existence, condition and accuracy of Property, Plant and Equipment with a booked value of P 12,787,142.92 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 ledger cards and stock cards of the accounting and general services offices in violation of section 124 of the NGAS and item 4.3 of COA Circular 2016-004 dated September 30, 2016.

Tamparan Qualified/ Modified

The management failed to adopt sound internal over their Property, Plant and Equipment amounting to P43,713,144.16, contrary to PD 1445 and NGAS Manual, thus, existence and valuation could not be ascertained.

Taraka Unqualified/ Unmodified

Tubaran Qualified/ Modified

The Municipal Accountant did not submit the Bank Reconciliation Statements with the paid checks and original copies of the Debit and Credit Memos to the Auditor within the prescribed period contrary to the provisions of Section 74 of PD 1445 and COA Circular No. 96-011, thus correctness and reliability of the Cash in Bank Balances could not be immediately ascertained.

Year-end physical count was not conducted for the account of Property, Plant and Equipment (PPE) with a Balance of P45,965,466.59 and PPE Ledger Cards and Acknowledgement Receipt for Equipment were not maintained contrary to Section 124 and 114 of NGAS Manual for LGUs, Volume I and Section 2 of Presidential Decree No. 1445. Thus, the correctness and validity of the PPE account could not be ascertained and their existence could not be established.

The unexpended portion of LDRRMF amounting to P815,751.00 was not deposited to Special Trust Fund at the end of the year contrary to COA Circular 2012-002 dated September 12, 2012.

493

LGU AUDIT


Tugaya Qualified/ Modified

Unreliable balances of account Cash in Bank – Local Currency Current Account of P452,521.26 due to non-preparation and non-submission of Bank Reconciliation Statement (BRS);

Understaement of Property, Plant and Equipment (PPE) and Government Equity accounts due to non—recognition of account “Road network” totaling to P665,896.80; and,

Existence of two dormant accounts amounting to P5,875.00 which could not be ascertained due to no available documents to support.

Wao Qualified/

Modified The existence, condition and accuracy of Property, Plant and

Equipment with a booked value of P 194,175,691.79 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 ledger cards and stock cards of the accounting and general services offices in violation of section 124 of the NGAS and item 4.3 of COA Circular 2016-004 dated September 30, 2016.

Maguindanao Qualified/

Modified Some of the PPE accounts totaling P817,469,752.780 were

unrealible due to non-compliance on provisions requiring condemnation and disposal of unserviceable properties and non-conduct of reconciliation of Cash-in-Bank account totaling P445,684,793.36 pursuant to Section 79 and Section 74 of PD 1445, respectively.

Municipalities:

Ampatuan

Barira

Buldon Qualified/ Modified

Inventory Account of P9,827.85 in the Consolidated Statement of Financial Position CY 2017 could not be relied when the management failed to submit the Report on the Physical Count of Inventories (RCPI), in violation to Section 124 of the Manual on the New Government Accounting System For Local Government Units, Volume I.

The Real Property Tax Receivable Account of P4,580,155.71 as of December 31, 2017 in the Consolidated Statement of Financial Position CY 2017 were not collected, contrary to Section 57 of the Presidential Decree (PD) No. 464, otherwise known as the Real Property Tax Code.

Buluan

494

LGU AUDIT


Datu Abdullah Sangki Qualified/ Modified

No setting-up of receivable for its Real Property Tax for the year 2017 that shall accrue to the LGU;

There was an understatement of income amounted to P47,624.01 on General Fund and P3,902.18 on Special Education Fund arising from the unrecorded of collections;

There was an an understatement of Due to LGUs account by P5,838.81 (GF) and P3,902.24 (SEF); and,

Non submission of Accomplishment Reports, Contract or Memorandum of Agreement and other supporting documents on a two projects under Trust Fund.

Datu Anggal Midtimbang Qualified/

Modified The existence, completeness and accuracy of the Property,

Plant and Equipment balance of P2,979,067.00 could not be ascertained due to:

a) absence of complete and properly accomplished Report of Physical Count of Property Plant and Equipment (RPCPPE),; and,

b) and non-maintenance of complete and properly accomplished Property, Plant and Equipment Ledger Cards and Real Property Ledger Card which is in contrary to Section 119, 120 and 124 COA Circular 2002-003.

Datu Blah T. Sinsuat Qualified/

Modified Due to the 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 pursuant to Section 57, Volume II of the Local Government Accounting.

Datu Hoffer Ampatuan Qualified/

Modified The LGU failed to recognize the RPT/SET Receivable and

Liability (Due to LGUs) for the share of other LGUs in the collection of RPT. This made the liability account understated and overstated the Income Account.

Datu Montawal

Datu Odin Sinsuat Qualified/ Modified

Due to the account property plant and equipment in the total amount of P61,116,121.04 cannot be relied upon due to the failure of the agency to conduct physical inventory count on all of the agency’s PPE pursuant to Section 66 of New Government Accounting System and absence of Property Ledger Card.

Datu Paglas Qualified/

Modified The agency have not completed the conduct of the physical

count of its existing Property, Plant and Equipment and no Report on the Physical Count of PPE (RPCPPE) was submitted thereby the accuracy of the PPE balance totaling P95,303,738.23 is uncertain.

495

LGU AUDIT


Datu Piang Qualified/ Modified

The agency management have not completed (partial) the conduct of the physical count of its existing Property, Plant and Equipment, and no Report on the Physical Count of PPE (RPCPPE) was submitted thereby the accuracy of the PPE balance totaling P32,701,775.29 (Combined) is uncertain.

Datu Salibo Qualified/ Modified

There will be material misstatements of its financial statements due to retention after its distribution as asset of a sewing machines worth Two Million Pesos (P 2,000,000.00) purchased for distribution to intended beneficiaries. See Part II of this report for more details. As well the continued failure to conduct physical inventory of its Property, Plant and Equipment (PPE) for CY 2017 thus, making it unreliable, as required under Section 105, Presidential Decree (PD) 1445 and in line with the Philippine Public Sector Accounting Standards (PPSAS).

Datu Saudi-Ampatuan Qualified/ Modified

This is one of our findings last year that until now remained as a deficiencies in the Property, Plant, and Equipment.

The agency until now failed to locate and determined the date of acquisition of the following IT and Office Equipment and Furniture and Fixture, combined cost of P652,951, in their physical inventory of the existing Property, Plant and Equipment , thus PPE balance could not be ascertained. The inadequacy of records did not permit us to apply alternative procedure to determine the effect of these deficiencies in the said account.

Datu Unsay Qualified/ Modified

The Municipal Accountant failed to prepare and/or submit the monthly Bank Reconciliation Statements (BRS) contrary to Section 3.2 of COA Circular No. 96-011 dated October 2, 1996, thereby the correctness of the Cash in Bank – Local Currency Current Account as of December 31, 2017 amounting to P 2,833,624.83 cannot be ascertained.

General Salipada K. Pendatun

Guindulungan Qualified/ Modified

The validity, existence and correctness of the property, plant and equipment valued at P95,684,657 could not be ascertained due to the continuing failure of the management to conduct physical count of its PPE; and,

The failure to prepare and submit monthly Bank Reconciliation Statement (BRS) of all funds it maintained in the bank and recording of the reconciling items rendered the cash balances amounting to P949,768.66 of doubtful validity.

Kabuntalan

Mangudadatu

Matanog

496

LGU AUDIT


Northern Kabuntalan Qualified/ Modified

Cash balances of all funds totaling P150,473.38 could not be verified and validated due to the absence of Bank Reconciliation Statement and the Bank Statements; and,

The carrying value of the Property, Plant and Equipment

(PPE) amounting to P46,131,867.18 could not be ascertained due to the absence of supporting documents and non-recognition of depreciation.

Pagalungan Qualified/

Modified Due to the 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..

Paglat Qualified/

Modified The effect of Management’s failure to prepare and submit

Bank Reconciliation Statement which rendered the accuracy, validity and existence of the Cash and Cash Equivalents amount presented on the Financial Statements unreliable amounting to P47,230,902.65, in contrary to Section 74 of PD 1445.

Pandag

Parang

Rajah Buayan Qualified/ Modified

The correctness and reliability of Property, Plant and Equipment Accounts with the total amount of P39,438,977.11 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. Existing record and reports do not allow application of other alternative measures to determine the accuracy and reliability of these accounts.

Shariff Aguak Qualified/

Modified There was variance of P331,805.19 of the Loans Payable on

the domestic loans of the LGU with DBP Cotabato Branch. The book has balance of P40,118,859.36 while the bank is P40,450,664.55;

There was an understatement of P298,831.67 of the expenses (i.e. Taxes and Duties of P240,498.34 and Extension Fee of P58,333.33) for failure of the management to record it;

Overstatement of the interest expense amounted to P2,187.59 due to the erroneous recording of the interest payment made by LGU; and,

Overstatement by P8,845.39 of the Cash-Local Treasury due to the erroneous recording of the collections made by LGU.

497

LGU AUDIT


Shariff Saydona Mustapha Qualified/ Modified

The existence and accuracy of Cash and Cash Equivalents Accounts with the total amount of P162,253.90 cannot be ascertained due to the fact that they have not submitted the Bank Statements and monthly bank reconciliation statements during the year.

South Upi Qualified/

Modified Due to the non preparation of Bank Reconciliation Statement

that makes the Cash in Bank account unreliable.

Sultan Kudarat Qualified/

Modified The Municipal Accountant failed to prepare and/or submit the

monthly Bank Reconciliation Statements (BRS) contrary to Section 3.2 of COA Circular No. 96-011 dated October 2, 1996, thereby the correctness of the Cash in Bank – Local Currency Current Account as of December 31, 2017 amounting to P 44,355,742.95 cannot be ascertained.

The accuracy, validity and existence of the Property, Plant and Equipment (PPE) accounts balance of P332,370,686.21 could not be ascertained due to non-preparation and non-submission of Year-end Inventory Report by management, in violation to Section 4.3 of COA Circular No. 97-005 dated July 10, 1997; and,

Sultan Mastura Qualified/

Modified The validity and accuracy of the reported Cash in Bank-Local

Currency Current Account amounting to P17,032,780.78 could not be established due to non-preparation and non-submission of bank reconciliation and Bank Statements;

The carrying amount of the Property, Plant and Equipment

(PPE) amounting to P19,700,192,21 could not be ascertained due to absence of supporting documents and non-recognition of depreciation; and,

Failure to transfer the Qick Response Fund and the DRRM-

MOOE amounting to P4,182,825.46 to the Trust Fund account.

Sultan sa Barongis Qualified/

Modified The correctness and reliability of Property, Plant &

Equipment with the total amount of P 28,735,447.20 cannot be ascertained due to the fact that they were not able 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/ Modified

The existence, completeness and accuracy of the Property, Plant and Equipment balance of P45,678,234.34 could not be ascertained due to:

a) absence of complete and properly accomplished

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

498

LGU AUDIT


b) non-maintenance of complete and properly accomplished Property, Plant and Equipment Ledger Cards and Real Property Ledger, and the failure to regularly prepare and submit the Bank Reconciliation Statement (BRS) of all funds it maintained in the bank and recording of the reconciling items rendered the cash balances amounting to P717,982.93 of doubtful validity.

Talitay Qualified/ Modified

The existence, completeness and accuracy of the Property, Plant and Equipment balance of P34,654,746.96 could not be ascertained due to:

a) absence of complete and properly accomplished Report of Physical Count of Property Plant and Equipment (RPCPPE); and,

b) non-maintenance of complete and properly

accomplished Property, Plant and Equipment Ledger Cards and Real Property Ledger, and the failure to regularly prepare and submit the Bank Reconciliation Statement (BRS) of all funds it maintained in the bank and recording of the reconciling items rendered the total cash balances amounting to P178,580.89 of doubtful validity.

Upi Qualified/ Modified

Due to the account property plant and equipment in the total amount of P 182,719,662.13 cannot be relied upon due to the failure of the agency to conduct physical inventory count on all of the agency’s PPE pursuant to Section 66 of New Government Accounting System and absence of Property Ledger Card.

Sulu

Municipalities:

Banguingui Qualified/ Modified

No -settlement of suspensions worth P17,259,178.51; and,

Non-verification and inspection of projects/programs implemented out of the 20% Development Fund.

Hadji Panglima Tahil Qualified/ Modified

Report of Inventory of Property, Plant and Equipment (PPE) with net book value of P15,497,757.02 is still incomplete leaving the balance of PPE account of doubtful validity.

Indanan Qualified/ Modified

The correctness and validity of Cash in Bank is doubtful due to non reconciliation of records between the Office the Municipal Treasurer and the Municipal Accountant; and

The existence, completeness and accuracy of the Property, Plant and Equipment in unreliable due to to failure to submit updated Report of Physicsl Count of Inventory and reconciliation of records between Accounting Officer and the property officer.

499

LGU AUDIT


Jolo Qualified/

Modified The existence, completeness and accuracy of the Property,

Plant and Equipment balance of P162,704,571.51 may be unreliable due to failure to submit updated Report of Physical Count of Inventory by the Municipal Services Officer and non reconciliation of the records of PPEs by the accounting officer and the property officer.

Kalingalan Caluang Qualified/

Modified No -settlement of suspensions worth P51,625,271.86; and,

Non-validation and inspection of Projects, Programs and Activities implemented under 20% Development Fund.

Lugus Qualified/

Modified Report of Inventory of Property, Plant and Equipment (PPE)

with net amount of P33,581,469,.36 is still incomplete leaving the balance of PPE account of doubtful validity.

Luuk Qualified/


with net amount of P53,884,618.65 is still incomplete leaving the balance of PPE account of doubtful validity.

Maimbung Qualified/


Non-validation and inspection of projects implemented under

20% Development Fund.

Panamao Qualified/



Omar Qualified/




Pandami Qualified/



Panglima Estino Qualified/

Modified Accumulated collections as of December 31, 2017 amounting

to P501,013.06 were not depositedth the authorized depository bank; and,

Property, Plant and Equipment totaling P16,252,700.64 is

unreliable due to non–submission of Report of Inventory.

Pangutaran Qualified/



500

LGU AUDIT


Parang Qualified/


Non-validation and inspection of projects implemented out of

the 20% Development Fund.

Pata Disclaimer No -settlement of suspensions worth P30,019,244.54; and,

Non-validation and inspection of projects implemented out of

the 20% Development Fund.

Patikul Qualified/


with net amount of P75,950,336.49 is unreliable due to unfinished/incomplete inventory-taking.

Siasi Qualified/


with net amount of P209,193,020.57 is still incomplete leaving the balance of PPE account of doubtful validity; and,

Cash Local Treasury in the amount of P314,084.37 remained

undeposited as of December 31, 2017.

Talipao Qualified/




Tapul Qualified/


with net book value of P28,179,443.91 is still incomplete leaving the balance of PPE account of doubtful validity.

TAWI-TAWI Qualified/

Modified The reliability and validity, existence and correctness of the

Property, Plant and Equipment accounts with net book value totaling P1,409,914.95 could not be ascertained due to the failure of the LGU to update the physical count and to validate the existence of reported various Construction and Heavy Equipment with net book value of P70,189,744.08;

Municipalities:

Bongao Qualified/

Modified The LGU failed to conduct a physical inventory of its

Property, Palnt and Equipment valued at P83,776,491.13.

Languyan Qualified/


and Equipment accouts with net books value totalling P121,416,250.04 could not be ascertained due to the failure of the LGU to conduct physical inventory; and,

Prior years payables due to the GSIS has unreconciled

balances and remain unremitted in the amount of P2,411,108.65.

501

LGU AUDIT


Mapun Qualified/ Modified

The LGU failed to conduct a physical inventory of its Property, Plant and Equipment valued in the books at P5,618,971.29; and,

Payables to GSIS in the amount of P1,046,102.79 did not

reconcile with the record of the agency.

Panglima Sugala Qualified/


and Equipment accouts with net books value totalling P208,803,002.19 could not be ascertained due to the failure of the LGU to update physical inventory.

Sapa-Sapa Qualified/


and Equipment accouts with net books value totalling P103,800,237.20 could not be ascertained due to the failure of the LGU to update physical inventory; and,


balances and remain unremitted in the amount of P1,821,193.49.

Sibutu Qualified/


and Equipment accouts with net books value totalling P123,276,768.66 could not be ascertained due to the failure of the LGU to update physical inventory; and,


balances and remain unremitted in the amount of P472,191.29.

Simunul Qualified/

Modified The LGU failed to conduct a physical inventory of its

Property, Plant and Equipment valued in the books at P109,935,431.42; and,



Sitangkai Qualified/


and Equipment accouts with net books value totalling P178,039,,094.79 could not be ascertained due to the failure of the LGU to update physical inventory.

South Ubian Qualified/

Modified The LGU did not reconcile with GSIS its payables of

P2,704,209.53.

Tandubas Qualified/


and Equipment accouts with net books value totalling P160,083,507.52 could not be ascertained due to the failure of the LGU to update physical inventory.

502

LGU AUDIT


Turtle Islands Qualified/ Modified

The LGU failed to conduct a physical inventory of its Property, Plant and Equipment valued in the books at P5924,226.52; and,



PART II

AUDIT

OBSERVATIONS

AND

RECOMMENDATIONS

503

AUDIT OBSERVATIONS AND RECOMMENDATIONS

To comply with this Commission’s constitutional duty to recommend measures necessary to improve the effectiveness and efficiency of the operations of the government, herein presented is the consolidated significant and common audit observations among LGUs and the recommendations intended to address them. The compendium consists of significant and common audit observations and recommendations culled from 1,712 Annual Audit Reports (AARs) on LGUs, comprising 80 provinces, 145 cities, 1,484 municipalities and three component units. It is herein presented according to the identified audit foci/areas for CY 2017. A. 20% Development Fund

Section 287 of the Local Government Code of 1991 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) 2017, the IRA of the LGUs totaled P390,803.284 million1, of which at least P78,160.657 million is 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 guidelines aim 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 its 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. Furthermore, 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 investment or capital expenditure.

Budgetary requirements discouraged the presentation of the LGUs budget for the 20% DF in lump sum. Also, the Annual Investment Program requires the presentation of the specific projects. However, appropriations for the fund presented in generic terms or in lump sum, its utilization needs prior authorization from the sanggunian.

Accounting policies require the maintenance of the 20% DF in a special account in the general fund.

The results of audit as shown in the Annual Audit Reports (AARs), reported one LGU that failed to appropriate 20% of the total IRA for development projects and 21 LGUs presented their appropriation aggregating P894.228 million in lump sum. Further, four LGUs with lump sum appropriation of P108.762 million spent the allocation without prior authorization from the local sanggunian.

1 Includes IRA for Metro Manila Development Authority amounting to P382.730 million (Sorce: www.dbm.gov.ph)

http://www.dbm.gov.ph/

504

In the audit of the fund utilization, the CY 2017 AARs reported the following observations:

a) One hundred twenty-six LGUs utilized the 20% DF totaling P986.047 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 175 LGUs used allocations amounting to P612.080 million for expenditures not related to the implementation of development programs and projects. The expenditures included salaries, honoraria, travel expenses, repairs and maintenance, and other operating and administrative expenses.

b) Current and continuing appropriations for the 20% DF of 516 LGUs accumulating to

P12,680.467 million remained unutilized as of the end of year due to non-implementation and/or delayed implementation of the development projects. Poor planning, lack of coordination with concerned offices and non-monitoring of the implementation of the development projects brought about the condition.

c) Disbursements of 26 LGUs totaling P270.997 million were not supported with complete

documentary requirements.

d) A special account to record separately the specific transactions of the 20% DF of nine LGUs was not maintained in the General Fund.

Recommendations:

The DILG and the DBM to strictly require the preparation of the Annual Investment Program (AIP) containing the detailed information of the specific program, project and activities funded from the 20% DF. Require the prior approval or authorization from the local Sanggunian before utilization of all lump-sum appropriations from the DF.

Require 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.

Discourage the disbursement of government funds without complete documentations.

B. Fund Transfers Received from National Government Agencies/Given To Other Local Government Units (LGUs)/Non-Governmental Organizations (NGOs)/People’s Organizations (POs)

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.”

505

Also, Section 34 thereof institutionalized the partnership of the non-governmental, community-based or sectoral organizations and the local government units (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.

The Commission on Audit Circular No. 2012-001 dated June 14, 2012 enumerated 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 Non-Governmental Organizations/People’s Organization (NGOs/POs).

The CY 2017 Annual Audit Reports on LGUs disclosed that National Government Agency

(NGAs) funds amounting to P950.573 million transferred to 52 LGUs remained unutilized and the funded projects unimplemented, while the project implementation of 64 LGUs with total project cost of P633.960 million encountered delays. On the other hand, funding agencies of 21 LGUs disapproved the project proposals submitted by contractors due to deviations from the contract/agreement not included in the Approved Budget. Projects of 11 LGUs funded at P106.735 million although completed, remained not operational, and a total of P34.866 million unutilized balance of 43 LGUs had not been returned to the source agencies even after the lapse of their Memorandum of Agreement (MOA).

The lack of specific guidelines on the grant of Assistance for Individuals in Crisis Situation

(AICS) and other projects funded by NGAs resulted in inconsistencies in the grants and donations of financial assistance implemented by eight LGUs amounting to P3.699 million, thus, casting doubt on the effective utilization of funds .

The accounting records showed outstanding transfers from the NGAs of 69 LGUs with a

total balance of P1,551.430 million which remained unliquidated and the balances of 39 LGUs totalling P713.778 million have become dormant for ten years or more as at year-end.

On the LGU’s transfers to NGOs/POs, twelve LGUs transferred funds totaling P1,085.68

million to NGOs/POs and other LGUs for implementation of various projects. However, the said transfers remained unliquidated, due to laxity on the enforcement of the submission of liquidation/utilization reports, thereby, casting doubt on the utilization of the funds for the intended purpose and risk of loss or misappropriation and non-implementation of projects.

As regards the recording of the fund transfers to the LGUs and its utilization, 15 LGUs

disclosed discrepancies of P222.355 million between the accounting records as against the confirmation replies/liquidation reports/utilization reports. Fund transfers of P195.984 million to 19 LGUs were erroneously booked in the General Fund instead of recording it in the trust fund books, thus, exposing the fund to risk of misappropriation. Completed Projects funded from NGAs implemented by four LGUs were not transferred and recognized to the appropriate asset accounts, not in conformity with the requirements of Section 50 of NGAS Manual, thereby, understating the Infrastructure Asset and Government Equity Accounts of the LGU.

Inter-agency fund transfers were not supported with schedules and/or subsidiary ledgers or

other relevant documents or records. Due to GOCCs/other NGAs account of six LGUs had a negative balance of P1.589 million as at December 31, 2017 which is considered abnormal for a

506

liability account, thereby casting doubt in the accuracy and reliability of the said account in the financial statements. Lastly, deficiencies were noted in the maintenance of records, recording and documentation of fund transfers, absence of MOA in 56 LGUs, casting doubt and irregularity in the use of government funds estimated at P455.453 million.

Recommendations:

Require the following:

The oversight agency for the implementation of the AICS and other Social Welfare programs to formulate/establish well-defined policies and specific guidelines in the grant of financial assistance.

The source agency of the transferred funds to: a. conduct regular monitoring of the implementation of the projects

implemented; b. verify the status of compliance to the regular submission of utilization and

liquidation reports; c. initiate interventions in case of difficulties to settle problems to fast track the

implementation of projects; d. enforce the immediate return of any unutilized funds; and, e. conduct evaluation on the effectiveness of the projects towards the

attainment of the program objectives.

The implementing agencies to: a. comply with the requirements as detailed in the Memorandum of Agreement; b. ensure prompt and efficient implementation of projects/programs for all

funds received; c. monitor the compliance with the proper recording and the reporting

requirements; d. require the review of the accounting records to ensure correctness of

records and reports and, e. cause the return of the unused funds.

C. Bottom-Up Budgeting (BuB) and Assistance to Disadvantaged Municipalities (ADM) 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.

The FY 2017 General Appropriations Act replaced the BuB with the Assistance to

Disadvantaged Municipalities (ADM) Program and provided P19,430.560 million allocation.

507

The 2017 Annual Audit Reports for LGUs disclosed that 48 LGUs failed to implement the projects with an allocation of P461.879 million due to inefficient and ineffective planning, while the projects of 42 LGUs with a total cost of P559.417 million were not fully implemented. On the other hand, the completion of BuB projects of 40 LGUs costing P302.030 million were delayed and in 13 LGUs, the implemented projects costing P30.241 million showed deficiencies which affected the quality and workmanship of the projects that led to their non-operationalization. Excess/unutilized funds in the implementation of the projects of 21 LGUs totalling P38.214 million remained unreturned to the source agencies.

In the disbursements of 49 LGUs totalling P440.232 million, the auditors noted incomplete

supporting documents, rendering the regularity and propriety of the transactions doubtful, and the implemented projects of 16 LGUs costing P79.246 million failed to meet the standards of their partner agencies leading to the cancellation of some projects funded from CY 2014 to 2017 allocation. Ten LGUs with projects totaling P68.415 million, did not comply with the guidelines on the procurement, budgeting, accounting and auditing rules and regulations casting doubt on the validity of the transactions.

As regards the recording of transactions related to program, the auditors noted

discrepancies 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: a. 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; and,

b. 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: a. Address the deficiencies noted in the implemented projects in order to

operationalize them;

b. 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;

c. Strictly comply with the requirements in the recognition, utilization and

recording of the transferred funds; and, d. Strengthen internal control systems in the different financial processes.

508

D. Conditional Matching Grant to Provinces (previously the KALSADA Program)

The National Government (NG) allocates funds in the General Appropriations Act (GAA) under the Local Government Support Fund (LGSF) for the Road Repair, Rehabilitation and Improvement of Provinces. The FY 2016 GAA labelled the program as “Konkreto at Ayos na Lansangan ang Daan Tungo sa Pangkalahatang Kaunlaran” or the KALSADA, and the FY 2017 GAA referred the same as the “Conditional Matching Grant to Provinces” or CMGP. The Bureau of Treasury directly releases the funds to the LGUs through the authorized government servicing banks.

The following criteria determine the qualification of the provinces to the program:

Compliance with DILG’s Seal of Good Financial Housekeeping;

Focus geographical areas under National Budget Memorandum Nos. 125 and 126 dated January 15, 2016 and April 4, 2016, respectively;

Special Local Road Fund completion rate;

Percentage share of unpaved roads; and,

Percentage share of fair-to-good roads.

DILG and DBM Joint Memorandum Circular (JMC) No. 2017-2 dated April 26, 2017 prescribes the guidelines in the release of funds and implementation of projects under the CMGP program.

The FY 2017 GAA allocated P18.03 billion for the Program. The total amount of P17.65 billion was released to provinces covering 316 projects.

In the audit of the implementation of the Program, the Auditors noted the following observations: a) Projects implemented by three provinces costing P222.156 million showed work deficiencies

such as appearance of transverse cracks, longitudinal cracks, minor and major scaling, chipped off edges, honeycomb, and pot holes. These work deficiencies may be attributed to improper construction methods, non-compliance with specifications of the plans and programs of work, and lack of supervision during the construction of the projects.

b) Six provinces with projects totaling P881.103 million incurred delays in the implementation due to the following reasons:

non-approval of the budget representing the counterpart of the province on the projects;

failure to issue warning letters and final warning letters to contractors that incurred negative slippages of more than 5% and 10%, respectively, and non-enforcement of the submission of catch-up plans; and,

failure to consider the appropriate timing/phasing of related project activities of the program such as engineering design and acquisition of right-of-way site.

c) Disbursements for infrastructure projects totaling P237.798 million in three provinces were not

supported with complete documentary requirements.

509

d) Funds amounting to P288.411 million received by a province was not recorded in the Trust Fund books.

e) One province implemented projects totaling P147.885 million through a combination scheme of by administration and by contract.

f) One province released the retention money amounting to P3.349 million to the contractor despite delayed and unsatisfactory implementation of the projects. On the other hand, another province failed to deduct the retention money amounting to P936,611.21 on the progress payment for the project resulting in overpayment to contractors.

Recommendations:

Direct the local chief executives to:

Require the full-time supervision of the resident provincial engineer during the construction of the projects to ensure compliance with specifications;

Closely monitor the implementation of projects to ensure efficient and effective completion thereof within the target dates and achieve utmost benefits for the public;

Conduct thorough planning of the programs, projects and activities to be implemented taking into consideration the appropriate timing and phasing of the related project activities;

Refrain from disbursing government funds without complete documentations;

Maintain a separate depositary account in the authorized government banks intended solely for the funds transferred for the CMGP program to ensure proper accounting and monitoring of the fund;

Implement the projects either by administration or by straight contract pursuant to Section 3.4, Appendix 1 of the Revised Implementing Rules and Regulations of R.A. No. 9184;

Avoid the release of retention money until the satisfactory completion and acceptance of the project; and,

Deduct the retention money from the progress billing of the succeeding payments to contractors.

E. PAyapa at MAsaganang PamayaNAn (PAMANA) Program

The PAMANA program was launched in 2011 as a priority program of the government that aims to: (a) improve socio-economic conditions in areas affected by and vulnerable to armed conflict; (b) strengthen institutional capacities of national government agencies and local

510

government units to pursue peace and development plans and programs in affected areas; and (c) enhance capacities of communities to address conflict issues and engage in peace building.

For FY 2017, GAA appropriated the amount of P7.074 billion for the implementation of the identified projects under the program.

Department of the Interior and Local Government (DILG) and Office of the Presidential Adviser on the Peace Process (OPAPP) Joint Memorandum Circular No, 03 Series of 2016 dated June 30, 2016, provides the guidelines in the management of the PAMANA-DILG Fund for Infrastructure Component, among others, to wit:

E. Project Implementation E.1 For the Implementing Partners

1. The Implementing Partner shall officially designate a full-time Project Engineer/Inspector or create a Project Supervision Team, whichever is necessary, to supervise the construction/implementation of the project.

F. Fund Administration

F.1 Fund Utilization d. Unexpended balance of the PAMANA-DILG Fund shall be returned to

the DILG-RO for remittance to the National Treasury.

In the audit of fund utilization and project implementation for CY 2017, the Auditors reported the following observations: a) Six LGUs in three regions incurred delays in the implementation/completion of various

PAMANA projects totaling P362.577 million due to deviations from the standard procedures of procurement and certain conditions in the Memorandum of Agreement; peace and order condition in the locality; unfavorable weather condition; non-availability of equipment and manpower for the project; and lack of monitoring and supervision in the construction of the projects.

b) A city reported low utilization rate of 2.2%, or P119,626.40 of the P5.44 million transferred fund indicating lack of vigilance in the implementation of programs, projects, and activities. The utilized amount pertained to transactions that are not among the major components of the projects.

c) The completed PAMANA Farm-to-Market Road (FRM) project amounting to P1.994 million of

one LGU was not utilized due to absence of bridge or road that will connect the FMR to the other LGUs, thus, rendering the project not usable.

d) The unauthorized focal person/representative identified the beneficiaries of the PAMANA

program, resulting in the inequitable distribution of cattle/goats totaling P7.5 million. Moreover, the supplier failed to comply with the proper procedures in the transport of live animals and the LGU did not enforce compliance to certification and other requirements in the Purchase Order contributing to the loss of the cattle and goats totaling P1.172 million.

e) The unexpended PAMANA fund amounting to P72,538.42 of one LGU was not returned to

DILG.

511

f) The Approved Budget for the Contract (ABC) and the Contract Cost (CC) for the 12 PAMANA projects amounting to P167.96 million and P167.61 million, respectively, exceeded the COA Evaluated Cost of P155.09 million.

Recommendations:

Require the local chief executives to:

Assign a full time engineer or a project supervision team to monitor the implementation of projects and to ensure timely delivery of services to the intended beneficiaries;

Revisit the Memorandum of Agreement to properly observe timelines in the implementation of the projects under the PAMANA program;

Ensure that detailed engineering activities which include surveys and pre-inspection be carried out conscientiously and that the usability of the project be primarily considered during the planning phase;

Comply with the provisions of the PAMANA Manual of Operations 2017, and the Implementing Guidelines of the PAMANA program for FY 2016;

Return the unexpended balance to DILG in accordance with DILG-OPAPP JMC No, 03 Series of 2016 dated June 30, 2016; and,

Comply with the Department of Public Works and Highways Department Order No. 22, dated February 15, 2015 in the preparation of the ABC Cost of all infrastructure projects.

F. Provision of Potable Water Supply – Sagana at Ligtas na Tubig sa Lahat (SALINTUBIG)

Program

The SALINTUBIG program aims to contribute to the attainment of the goal of providing potable water to the target LGUs, particularly to the poor and waterless communities, defined in the Philippine Development Plan 2011-2016, Millennium Development Goals, and the Philippine Water Supply Sector Roadmap and Philippine Sustainable Sanitation Roadmap.

DILG Memorandum Circular No. 2017-73 dated June 7, 2017 provides the policy guidelines for the implementation of the provision of potable water supply SALINTUBIG program for FY 2017. The policy content and guidelines include the duties and responsibilities of the implementing partner, the DILG-ROs, Provincial/City Directors or MLGOOs, and the Project Development Management Unit (PDMU), and fund administration among others, to wit:

Subproject implementation o For implementing partners

Designate a Project Engineer/Supervisor to supervise the construction/implementation on a day-to-day basis.

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Cause the contractor to observe the following: - Construction materials are available on site in accordance with the

approved plans and specifications. Officially turnover the completed subproject to the LGU who will operate

and maintain the subproject.

In the FY 2017 GAA, the National Government appropriated P1.573 billion for the implementation of the SALINTUBIG program. The Program covers 86 waterless municipalities, 209 waterless barangays, and 7 resettlement sites without access to potable water2.

For CY 2017, the Auditors reported the following observations in the audit of the implementation of the Program: a) Eleven LGUs with projects totaling P102.328 million incurred delays in the implementation due

to the following reasons:

lack of monitoring in the implementation of the project;

delay in the procurement process;

unpredictable deficiencies encountered in the construction;

difficulty in the transport and delivery of materials as the project site was located in the far-flung area; and,

contractor’s default in the performance of their respective contractual obligation. b) Projects funded under the SALINTUBIG program amounting to P26.248 million of six LGUs

remained unimplemented due to incomplete technical documents and non-viability/insufficiency of water source in the project location.

c) Completed projects totaling P30.665 million of nine LGUs were not operational due to absence strategies or procedures in the operation of the projects, non-availment of the necessary water permits, bursting of pipe lines brought about by high pressure of water, and unavailability/high maintenance of power connection. Moreover, completed projects totaling P4.25 million of two LGUs remained unrecorded in the books of accounts of the LGUs.

d) Infrastructure projects amounting to P13.781 million funded under the SALINTUBIG program of one LGU failed to meet its objective of providing adequate supply of potable water due to the following:

only the households near the main source benefited from the project;

the main source was located within the lot premises of a private individual;

the private individual closed the main source because the barangay stopped the payment of monthly fee for its maintenance; and,

the project was not able to provide adequate water supply to the elevated tank for storage purposes due to inability of the water pressure to pump enough water from the source.

2 DILG Memorandum Circular No. 2017-73 dated June 7, 2017

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e) Funds amounting to P2.4 million received by one LGU was not recorded in the Trust Fund books.

Recommendations: Require the Local Chief Executives to:

Closely monitor the implementation of projects to ensure efficient and effective completion thereof within the target dates and achieve utmost benefits for the public;

Conduct thorough planning, study and assessment of the programs, projects and activities to be implemented taking into consideration the quality and quantity of the water source, and fast track the documentation process and the search for possible water source;

Formulate strategies to continue the operation of existing water system and secure the necessary water permit and water test analysis;

Record the funds transferred for the SALINTUBIG program in the Trust Fund books to ensure proper accounting and monitoring of the fund;

Return the unexpended balance to DILG; and,

Refrain from disbursing the SALINTUBIG fund for operating and administrative expenses.

G. Local Disaster Risk Reduction Management Fund (LDRRMF)

Republic Act No. 10121, also known as the “Philippine Disaster Risk Reduction and Management Act of 2010”, was enacted to strengthen the Philippine Disaster Risk Reduction and Management System. The Act requires the establishment of Local Disaster Risk Reduction and Management Office in every province, city and municipality which shall formulate and implement a comprehensive and integrated Local Disaster Risk and Reduction Management Plan (LDRRMP) in accordance with the national, regional and provincial framework.

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 (LDRRMCs) within the next five (5) years. Any such amount still not fully utilized after five years shall revert back to the general fund.

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NDRRMC-DBM-DILG Joint Memorandum Circular No. 2013-1 dated March 25, 2013 provides for the allocation and utilization of Local Disaster Risk Reduction and Management Fund (LDRRMF) in the four thematic areas, namely: a) disaster prevention and mitigation, b) disaster preparedness, c) disaster response, and d) disaster rehabilitation and recovery, and also for the procurement/acquisition of disaster equipment for disaster response and rescue activities.

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. Also, the Circular requires the preparation of the Local Disaster Risk Reduction Management Fund Investment Plan (LDRRMFIP) to keep tract of the all projects funded out of the LDRRMF regardless of the funding source.

Republic Act No. 9184 dated January 10, 20013 - An act providing for the modernization,

standardization and regulation of the procurement activities of the government and for other purposes. It promotes the transparency of procurement process and in the implementation of procurement contracts.

The Auditors as incorporated in the CY 2017 AAR reported the following observations:

a) In the LGUs compliance of the establishment of the office, preparation of the plans and

allocation of funds -

The required establishment of the Local Disaster Risk Reduction Management Office (LDRRMO) in every province, city or municipality remained unimplemented in 55 LGUs. The non-establishment of the office significantly affects the efficient planning and implementation of DRRM activities.

Twenty one LGUs failed to prepare the LDRRMP.

Eighty-four LGUs did not prepare and submit the Local Disaster Risk Reduction Management Fund Investment Plan (LDRRMFIP) which lists the programs, projects and activities to be implemented and funded from the LDRRMF.

Nine LGUs failed to provide in full the 5% required allocation for the LDRRMF.

b) In the utilization of the LDRRMF-

The expenditures and disbursements in 90 LGUs totaling P197.686 million charged against the allocated LDRRMF were not related to disaster preparedness, prevention, mitigation and rehabilitation activities or the corresponding program, project and activities were not included in the Annual Investment Program (AIP).

Six LGUs failed to allocate or utilize the 30% Quick Response Fund despite declaration of a state of calamity, defeated the purpose of the fund.

The utilization of the LDRRMF of the fund was not maximized leaving an unutilized total balance of P4,668.449 million in 218 LGUs.

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LDRRM transactions of P255.043 million in 68 LGUs were not properly recorded and supported with complete documentation.

Six LGUs failed to strictly comply with the provisions of RA 9184.

c) In the recording and reporting of the LDRRMF -

Two hundred thirty-eight LGUs failed to prepare and submit the Monthly Report on the Sources and Utilization of the Disaster Risk Reduction and Management Fund (DRRMF) and/or comply with the accounting and reporting requirements.

The unexpended LDRRMF totalling P1,504.787 million in 165 LGUs remained in the General Fund books, thus, exposing the funds to risks of misappropriation.

The unexpended LDRRMF which exceeded the five-year validity period totaling P442.416 million in 30 LGUs were not reverted to the unappropriated surplus of the General Fund, which shall be used for other social services.

d) In the compliance with the minimum standard requirements for disaster preparedness -

Non-compliance of 92 LGUs with the requirements on disaster preparedness, thus, creating doubts on their capability to respond to emergency and critical incidents to minimize or avoid loss during calamities.

Recommendations:


Establish the LDRRMO that will prepare the LDRRMP complete with the required objective for each thematic area, the performance indicators and measures, and oversee its implementation;

Direct the LDRRM officer to prepare the LDRRMFIP detailing the programs, projects and activities (PPAs) of the plan and included in the AIP of the LGU to guide the implementation of the LDRRM activities;

Utilize the LDRRMF in accordance with PPAs detailed in the LDRRMFIP and require the complete documentation of all expenditures incurred;

Instruct the LDRRM officer and the local accountant to submit the Monthly Report on Sources and Utilization of the DRRMF and transfer the unexpended LDRRMF to the special trust fund in the Trust Fund books;

Enjoin the implementing officers to comply with the provisions of RA 9184, in the conduct of the procurement process; and,

Observe compliance with the minimum standards for disaster preparedness to minimize the effect of calamities.

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H. Solid Waste Management/Environmental Compliance The Local Government Code mandates the Local Government Units (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. In addition thereto, 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 to promote public health and ensure protection of its environment. The law provides the comprehensive solid waste management and the following institutional mechanism affecting the LGUs.

Every province, city and municipality has to establish a Solid Waste Management Board (SWMB).

Each SWMB has to prepare a Solid Waste Management Plan (SWMP) and it has 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.” LGUs are authorized to collect solid waste management fees.

The CY 2017 audit reports of three LGUs disclosed that the collection of solid waste/garbage fees and fines and penalties was not implemented due to the non-enforcement of the municipal ordinances imposing the fees.

The following table summarizes the reported common audit observations in the CY 2017 AARs, to wit:

Nature of Deficiency No. of LGUs with the reported

deficiency Total Provinces Cities Municipalities

1. Failure to establish or convene the SWMB

1 3 27 31

2. Failure to update or formulate the SWMP

9 12 125 146

3. Non-compliance with RA 9003 in the formulation and implementation of the SWMP

2 5 38 45

4. Failed to implement effective and efficient waste disposal facility; still maintain open dumpsite

- 8 94 102

5. Non establishment or failure to maintain a sanitary landfill due to non compliance of requirements

- 12 65 77

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Nature of Deficiency No. of LGUs with the reported

deficiency Total Provinces Cities Municipalities

6. No established or maintained Materials Recovery Facility

- 14 88 102

7. Poor enforcement or implementation of the policies and rules on segregation, collection, transfer and storage of solid waste

2 17 95 114

8. Information campaign failure leading to lack of awareness on the rules and regulations on solid waste management

- - 6 6

9. Incomplete implementation of the activities in the SWMP

3 10 13

Recommendations:

Comply strictly with all provisions of the RA No. 9003, in the formulation and implementation of the plans, in order to achieve the intended purpose of the law and to ensure protection of public health and environment.

Conduct capacity development on comprehensive solid waste management for the implementers of the program.

I. Local Council for Protection of Children Republic Act No. 9344, otherwise known as “Juvenile Justice and Welfare Act of 2006."

approved on April 28, 2006, aims to:

promote and protect physical, moral, spiritual, intellectual and social well-being of children;

inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs; and,

cover the different stages involving children at risk and children in conflict with the law, which provides child appropriate proceedings, including programs and services for prevention, diversion, rehabilitation, reintegration and aftercare to ensure their normal growth and development.

DILG Memorandum Circular No. 2012-120 dated July 4, 2012 provides for the allocation of

one percent Internal Revenue Allotment (IRA) for the strengthening and implementation of the programs, projects and activities of the Local Councils for the Protection of Children (LCPC) per Section 15 of RA 9344 – which state that the LCPC shall be established in all levels of local government and private agencies concerned for the welfare of the children. The said

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memorandum enumerates the Programs, Projects and Activities (PPA) that can be funded from the said allocation.

Audit Reports on LGUs disclosed the following audit observations:

a) Sixty-three LGUs failed to establish an LCPC as well as appropriate one percent of its Internal Revenue Allotment (IRA) for the programs, projects and activities of the LCPC, while eighty LGUs failed to prepare the Annual Work and Financial Plan, Local Development Plan for Children and the Local Investment Plan for Children.

b) Two Hundred Forty-Five LGUs failed to appropriate or allocate one percent amounting to P134.370 million of its IRA for the LCPC in its Annual Budget for CY 2017, while 59 LGUs provided deficient or insufficient allocation amounting to P24.323 million for the program, thus, limiting the implementation of the LCPC programs, projects and activities.

c) Forty-eight LGUs failed to maximize or not fully utilize the one percent allocation amounting to P58.633 million for the planned, program, projects and activities intended for the protection and upliftment of the children’s rights and lives, while seven LGUs failed to implement and utilize the LCPC allocation amounting to P2.038 million.

d) The expenditures and disbursements totaling P15.343 million in 11 LGUs were not in line with the pertinent provisions of RA 9344 and DILG Memorandum Circular No. 2012-120 dated July 4, 2012, thereby, depriving the children from the benefit accorded to them by law.

Recommendations: Require the local chief executives to:

Establish the LCPC and allocate one percent of its Internal Revenue Allotment (IRA) for the implementation of the LCPC program and prepare the Annual Work and Financial Plan, Local Development Plan and Local Investment Plan for Children; and,

Fully implement the planned LCPC programs, projects and activities to attain the objectives of the program for the promotion and protection of interest and welfare of the children.

J. Special Education Fund Section 272 of Republic Act (RA) No. 7160 expressly provides the source of Special Education Fund (SEF), to wit:

“The proceeds from the additional one per cent (1%) tax on real property accruing to the Special Education Fund (SEF) shall be automatically released to the local schools boards. X x x . Provided, however, that the proceeds shall be allocated for the operation and maintenance of public schools, construction and repairs of school buildings, facilities and equipment, educational research, purchase of books and periodicals, and sports development as determined and approved by the Local School Board.” (underscoring supplied)

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The Department of Education, Culture and Sports (DECS), Department of Budget and Management (DBM) and Department of the Interior and Local Government (DILG) issued Joint Circular (JC) No. 1, s. 2017 dated January 19, 2017 to provide the revised guidelines on the use of the SEF The issuance provide the planning and budgeting process for the SEF and enumerated the following allowable expenses chargeable against the SEF which shall be net of the budgetary provision for the same or related item(s) in the budget for the DepEd and the ECCD Council:

1. Operation and maintenance of public schools 2. Construction and repair of school buildings 3. Facilities and equipment 4. Educational research 5. Purchase of books and periodicals 6. Sports development 7. Funding for the ECCD Program

Audit of the CY 2017 accounts of LGUs, disclosed the following observations in the Annual Audit Reports (AAR):

a) Significant delays in the release of the additional 1% Real Property Tax collection for the SEF

in 17 LGUs.

b) Failure of 100 LGUs to prepare or comply with the instructions in the preparation of the budget, thus, resulting in the inclusion of activities not compliant with the JMC.

c) Poor planning and implementation of the Program/Project/ Activity under SEF in 54 LGUs.

d) Ineligible expenses charged to the SEF of 233 LGUs, composed of 13 provinces, 38 cities and

182 municipalities. From the 233 LGUs, 33 did not specify the amount of ineligible expenses charged, while 200 LGUs charged a total amount of P563.191 million.

e) Incomplete documentation of disbursements reported in 63 LGUs with a total disbursement of

P183.051 million. Recommendations:

Require local chief executives to:

Direct the local treasurers and accountants to release collections from the additional 1% real property tax to the SEF in accordance with the rules and regulations;

Request the Local School Board (LSB) to plan and budget the allocation of the SEF in conformity with the requirements of the JMC;

Monitor implementation of plans, programs and projects funded from the SEF;

Enjoin the LSB to refrain from charging ineligible expenses to the SEF and strictly observed the approved SEF budget and the JMC; and,

Instruct the LSB to observe the documentary requirements for disbursements.

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K. Cash and Cash Equivalents The CY 2017 Annual Audit Reports (AARs) for LGUs revealed the following observations

on the Cash in Bank accounts:

a) Doubtful reliability, accuracy and existence of the Cash in Bank account of 305 LGUs, consisting of 22 provinces, 32 cities and 251 municipalities with a aggregate balance of P24.571 billion due to:

Non-preparation of the required Bank Reconciliation Statements;

Failure to record the reconciling items amounting to P612.150 million; and,

Discrepancy between balances of the cashbook and the general/subsidiary ledgers due the LGUs failure to conduct periodic reconciliation.

b) Maintenance of deposits with private banks of 16 LGUs with a total balance of P220.377

million.

c) Non-remittance/deposit of collections totalling P162.834 million of collecting/liquidating officers and local treasurers, thus, exposing the funds to possible loss/misuse.

d) Incurrence of cash overdraft or deficit of five LGUs amounting to P111.631 million.

e) Placement in time deposits of funds totalling P817.288 million of eight LGUs without authority from the respective Sanggunian or the absence of a financial document to authenticate the existence of the funds.

f) Discovery of an aggregate cash shortage of P217.883 million in the cash and accounts of the

accountable officers of 16 LGUs.

Recommendations:


Direct the local accountants to regularly prepare the bank reconciliation statements and to reconcile the general/subsidiary ledger balance with the cashbook of the local treasurers and other accountable officers. Effect adjustments to recognize the reconciling and correcting entries identified and evaluated in the reconciliation statements;

Order the LGU fiscal officers to maintain depository accounts only on authorized government financial institutions; and,

Order the collecting/liquidating officers to remit intact and daily their collections and the local treasurer to deposit daily their collections with the authorized government depository bank.

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Enjoin the local treasurer to:

a. Be vigilant in its responsibility to take custody and exercise proper management of the funds of the LGU to avoid the incurrence of cash overdrafts; and,

b. Observe the requirements in the placement of time deposits

Initiate the filing of appropriate charges against the erring accountable officers.

L. Financial Liabilities

Local Government Units (LGUs) are empowered 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.

Review of the Loans Payable accounts of LGUs revealed the following observations as embodied in the CY 2017 AAR: a) Doubtful reliability, accuracy and existence of the Loans and Interest Payable due to:

Discrepancies in the recording of the principal and interest payable;

Inadequate documents to support the Loans Payable account of five LGUs casting doubt on validity, legality and accuracy of the account; and,

Erroneous classification/posting of loans payable and interest charges in 12 LGUs.

b) Non-attainment of the purpose of securing loan due to the failure of the agency to complete the two projects to be funded from the proceeds thereof.

c) Long outstanding loans of seven LGUs amounting to P135.912 million, and six of the LGUs

obtained loans from other government agencies.

Recommendations:


Direct the local accountant to review the Loans Payable account to:

a. verify the correctness of the transactions included in the account and its proper classification and presentation in the financial statement; and,

b. confirm from the grantor agencies to determine the existence of the loans

receivable accounts in their books of accounts

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Instruct the implementing office of the project to review the implementation and determine the causes for the failure to complete the project.

M. Audit of Revenue-Generating Programs

Local Government Units (LGUs) exercise its power to create its own sources of revenue and to levy taxes, fees and charges subject to the provisions of the Local Government Code , and consistent with the basic policy of local autonomy.

The CY 2017 results of audit disclosed the following observations:

a) Failure to maximize the revenue earning capacity of 58 LGUs of which 21 lost an estimated revenue of P344.769 million.

b) Leniency in the collection of unpaid taxes, fees and charges, resulting in the accumulation of

receivable accounts.

c) Loose internal control systems in the assessment and collection of revenues casting doubt on the correctness of the assessments and collections received.

d) Mismanagement in the operation of public economic enterprises and utilities resulting to losses

in their operations.

Recommendations:


Enjoin the local fiscal officers to update the LGUs Revenue Code to maximize its revenue earning capacity;

Direct the local treasurer to strengthen collection measurers and avail of the remedies in the collection of delinquent taxes, fees and charges;

Install strong internal controls in the revenue processes to ensure the operational effectiveness and efficiency, reliable reporting and compliance with regulations and policies of the revenue systems; and,

Closely supervise the operation of the public economic enterprises and utilities to ultimately attain the purpose of its creation to provide additional revenue for the LGUs.

N. Payment to Casuals, Job Orders, Contractuals and Consultants Payment of casuals, contractual, job orders (JO), consultants, private lawyers, and legal

researchers follow the regular process of financial transactions in the Local Government Units (LGUs).

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The CY 2017 review of transactions pertaining to payments to casuals, contractual, job orders (JO), consultants, private lawyers, and legal researchers disclosed the following observations.

1. Hiring:

a) The auditors noted the hiring of 5,425 JO workers in 46 LGUs which may unnecessarily

deplete the LGU’s funds. The absence of a study as to the actual workload and the required number of manpower necessary in the respective offices in an LGU hinders the establishment as to the necessity and propriety of contracting the services of JO employees in addition to the permanent/casual personnel.

b) The LGU’s programs, projects and activities excludes the services rendered by the JO

personnel, thus, the necessity of hiring JOs could not likewise be established. Vacant and newly created positions were not filled up and instead hired JOs/casual employees equivalent to more than 100% of the regular plantilla positions casting doubt on the necessity of their services.

c) Twenty-eight LGUs hired 2,162 consultants and JO employees despite existence of regular employees who can discharge the same work and whose functions are redundant to the functions of existing officials. The necessity of hiring JO employees and incurrence of expenses for consultants who cannot be considered highly technical in nature and not in accordance with the Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 (The Government Procurement Reform Act), as their duties and responsibilities performed do not require a level of expertise and could be performed by the incumbent LGU officials and employees.

d) There were also JO personnel who were hired for a duration of more than six months, while others were hired without contracts. Even those who have reached the compulsory retirement age or those whose appointments were disapproved by the Civil Service Commission (CSC) under CSC Memorandum Circular No. 17-02 s. 2002, were still hired.

2. Contracts:

a) Contracts of employment with the JOs did not contain statements of duties and

responsibilities or equivalent terms contrary to the governing rules of the CSC and the Commission on Audit (COA), thus, for lack of written information as to the nature of their role in the agency, services rendered could not be ascertained as to effectiveness, efficiency and necessity.

3. Documentation of services:

a) The actual times of entry and exit of some JO and contractual employees were not

indicated in their Daily Time Records (DTRs), thereby causing uncertainty in the propriety and validity of the disbursements made for payment of their wages.

4. Payment of Wages and Allowances:

a) Payment of wages to 2,369 consultants/JO personnel by 38 LGUs estimated at P53.566

million were not supported with complete documentation in violation to Section 4(6) of

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Presidential Decree (PD) 1445 (Claims against government funds shall 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) JO/Contract of Service (COS) worker/Consultants were granted privileges to attend

seminar/convention and other benefits such as per diems & travel & incidental expenses, Collective Negotiation Agreement bonuses, clothing allowance, among others. Cash advances/Financial Assistance/Overtime pay were also granted to consultants and JOs.

c) Violations were also noted on the payment of wages of JO employees which were not based on a daily rate basis and actual number of days/attendance approved in the DTRs, rendering the propriety of expenditures doubtful. Different rates were paid to some COS personnel despite having designated with similar positions without establishing basis of the substantial classification, hence, payments made cannot be substantiated contrary to Sections 4(5) and 61 of PD No. 1445. While other JO employees were not paid or even if paid, were below the prevailing minimum rates for the services they have rendered, as approved by the Regional Tripartite Wages and Productivity Board contrary to Article 99 of PD 442, depriving the personnel of compensation due them and contrary to the contract agreement between the JO employees and the agency. Some payments made were not even deducted with percentage tax mandated under Revenue Memorandum Circular No. 2016 – 130 dated December 08, 2016, hence depriving the coffer of the government of additional revenues.

5. Others: a) Some JO personnel performed collecting functions although they were not properly bonded

and not officially designated as collecting officers in violation of Section 4.2 Treasury Circular No. 02-2009 dated August 6, 2009 and the Public Bonding Law, Section 101 (Accountable officers; bond requirement) of PD 1445, Section 305 (f) of the Local Government Code of 1991 and Volume I, Section 65 of GAAM, thus, collections were exposed to risk of loss and misuse.

Recommendations:


Prepare a thorough study and evaluation of the LGU’s needs for additional personnel to avoid excessive hiring of JOs and contractuals. Also, ensure that the hiring of JO personnel are made an integral part of its procurement and budget planning, taking into consideration the need of each department/office, the estimated number of JOs to be hired, and their wages and qualifications to minimize the risk of hiring unqualified and/or unnecessary JO personnel. Reduce the number of contractual workers especially those performing clerical, administrative, janitorial and redundant services like the Executive Assistant. Hire workers on as the need arises and deploy only to the offices where their services are needed most;

Formulate clear policy guidelines in hiring of contractual workers providing the conditions when services may be contracted, period within which the workers will

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render their services, qualification standards, required documents to be submitted by applicants and screening process. Moreover, maximize the services of permanent employees so as not to exceed the Personal Services Limitation provided in Sec. 325 of the Local Government Code and to minimize the hiring of casual employees as to necessity;

Strengthen controls in the hiring of JOs and COS and conduct review of the policies and procedures;

Require JO personnel to submit personal records and undergo interview to establish their identities and qualifications. Adopt a Contract of Service for each worker in order to include the basic and vital data required in any contract agreement;

Stop hiring additional employees such as consultants when there are regular employees capable of rendering the same services to be required of said consultants. Justify the necessity of hiring additional personnel;

Enforce the fulfilment of the responsibilities of consultants as provided for in their respective contracts;

Enjoin the Human Resource Management Officer to clearly define the works or activities to be accomplished through hiring of consultants, include the duties and responsibilities in the contracts and make them as the bases in justifying the need for consultancy services. Hire consultants on the basis of their proven expertise, experience and capacity as required under the Revised IRR of RA No. 9184 and beyond the optimum in-house capability of the LGU;

Direct the hired COS to submit complete documentation, such as the duly certified DTRs and accomplishment reports, for claims for wages;

Monitor the activities and accomplishments of contracted personnel and ensure complete documentation upon payment of claims for wages;

Avoid assignment of non-permanent employees to functions requiring accountability; and,

Discontinue sending JO/COS workers to seminars or conventions intended for regular employees.

O. Enforcement of COA Disallowances and Charges In the course of audit, whenever there are differences arising from the settlement of

accounts the auditor issues audit decision which may be in the form of a Notices of Disallowance (ND), Notice of Charge (NC), and Notice of Suspension (NS). The Agency head ensures the settlement of disallowances, charges and suspensions within the prescribed period. The concerned auditors monitor the enforcement of the settlement and issue the COA Order of Execution (COE) in case of NDs and NCs that have become final and executory and ND and NC in case of NS.

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COA Circular No. 2009-006 dated September 15, 2009 prescribes the COA Revised Rules and Regulations on Settlement of Accounts.

The following table shows unsettled disallowances, suspensions and charges as at the end

of CY 2017.

Region Disallowances (in millions)

Suspensions (in millions)

Charges (in millions)

Total (in millions)

NCR 2,807.767 2,163.637 52.534 5,023.938

CAR 746.610 372.783 5.543 1,124.936

ARMM 78.527 420.950 0.581 500.058

Region 1 460.622 1,156.458 0.753 1,617.833

Region 2 401.888 455.308 1.775 858.971

Region 3 1,513.430 2,221.550 9.171 3,744.151

Region 4-A 1,288.971 791.716 23.821 2,104.508

Region 4-B 1,334.067 639.307 405.188 2,378.562

Region 5 472.072 1,419.766 5.835 1,897.673

Region 6 926.343 487.302 1.399 1,415.044

Region 7 1,537.005 1,850.849 12.002 3,399.856

Region 8 316.214 2,866.284 0.024 3,182.522

Region 9 310.000 679.116 1.426 990.542

Region 10 584.887 1,293.708 0.001 1,878.596

Region 11 256.981 210.344 0.044 467.369

Region 12 154.185 231.444 1.219 386.848

Region 13 319.041 462.039 0.473 781.553

Region 16 854.362 1,206.527 0.084 2,060.973

TOTAL 14,362.972 18,929.088 521.873 33,813.933

The recovery of disallowances that have become final and executory registered low

percentage despite the issuance of COA Order of Execution due to management’s failure 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 persons liable, already separated from service contributes to the accumulation of the disallowances and charges.

The following common deficiencies cause the issuance of the NDs, NCs and NS:

a) Violation of COA Circular No. 2012-003 dated October 29, 2012 Updated Guidelines for the Prevention and Disallowance of Irregular, Unnecessary, Excessive, Extravagant and Unconscionable Expenditures.

b) Incomplete supporting documents for disbursements and procurements not done in accordance with RA 9184 were also suspended in audit.

Recommendations:

Exercise vigilance in the observance and implementation of the procurement, accounting and auditing rules and regulations in execution of programs and

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projects and in the processing of claims to avoid possible audit suspensions, disallowances and charges.

Enforce the settlement of all audit suspensions and disallowances. Exhaust all available remedies in enforcing settlement of the audit disallowances and charges in compliance with Sections 5.4 and 7.1.1, Chapter II of COA Circular No. 2009-006 dated September 15, 2009.

Require the recognition of the disallowances and charges which have become final and executory and enforce immediate settlement thereof.

P. Compliance with Tax Laws

Pursuant to Section 244 of the National Internal Revenue Code or the Tax Reform Act of 1997, the Bureau of Internal Revenue (BIR) issued various Revenue Regulations (RRs), Revenue Memorandum Circulars (RMCs) and Revenue Memorandum Orders (RMOs) to provide the rules and regulations on the imposition, collection, and remittance of the creditable withholding taxes. The Auditors reported the following observations on the LGUs compliance with tax laws and regulations in the CY 2017 Annual Audit Report, to wit: a) Taxes withheld on salaries/compensation, suppliers, service providers, utility companies, and

professional fees totaling P497.721 million of 74 LGUs were not remitted to the BIR within the prescribed period. On the other hand, four LGUs incurred over remittance to the BIR for taxes withheld on compensation amounting to P36.621 million.

b) Taxes on (a) honoraria paid to the Bids and Awards Committee (BAC) members, secretariat and technical working group; (b) payment to consultants and professionals; (c) payment of overtime to employees; (d) payment of allowances to officials and employees; (e) payment of wages to job order and contractual personnel; and (f) various disbursements through Petty Cash and reimbursement totaling P42.749 million were not withheld by 21 LGUs. Likewise, three LGUs improperly withheld taxes on payment of salary to officials and employees, and payment of procured diesel fuel totaling P382,670.69.

c) The Value Added Tax (VAT) on infrastructure contracts of one LGU exceeded the VAT rate

provided in the Department of Public Works and Highways (DPWH) Departmental Order (DO) No. 197 dated October 7, 2016, thus, providing additional indirect cost amounting to P1.593 million.

d) Tax arrears paid by one LGU to the BIR amounting to P465,112.91 pertaining to the CY 2013

Economic Relief Assistance remained uncollected from the officials and employees as of December 31, 2017.

528

Recommendations:

Require the local chief executives to compel the LGU fiscal officers to:

Strictly comply with the regulations set by the BIR regarding the withholding of taxes and prompt remittances thereof to avoid payment of fines and penalties;

Immediately institute appropriate action before the BIR for the refund of the over remitted amount;

Use the 5% rate in the computation of the VAT in preparing the Approved Budget for the Contract in accordance with DPWH DO No. 197 dated October 7, 2016; and,

Cause the withholding of the corresponding tax arrears from the salaries and wages of concerned officials and employees to enable the local government to use the funds to other priority projects.

Q. Remittance of Mandatory GSIS, PhilHealth and Pag-IBIG Contributions and Remittance of 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. Section 6(b) thereof further 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.

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.

529

In the CY 2017 Annual Audit Reports, the Auditors reported the following observations as regards the compliance to the withholding and remittance of the mandatory GSIS, PhilHealth and Pag-IBIG contributions, and loan amortizations: a) Premium contributions and loan amortizations withheld from the salaries of employees totaling

P408.698 million of 65 LGUs were not remitted or partially remitted to the GSIS, PHIC and HDMF. On the other hand, 33 LGUs incurred delays in the remittances of mandatory contributions totaling P26.956 million to the concerned government financial institutions.

b) Nine LGUs did not withhold from the salaries and wages of the employees, the mandatory contributions and loan amortizations totaling P3.509 million for the GSIS and PhilHealth resulting in the non-remittance of the same to the GSIS and PHIC.

c) There were over-remittances of mandatory contributions for GSIS, PhilHealth and Pag-IBIG

totaling P6.117 million in 28 LGUs due to the following:

The LGUs’ and employees’ monthly premium contributions exceeded the prescribed maximum rate;

Incorrect computation of the LGUs’ share in the contributions; and

Payment of LGU’s share on premium contributions to Pag-IBIG for its selected job order workers despite the fact that they were not entitled to such benefit.

d) Twelve LGUs failed to reconcile its records with that of the GSIS, PhilHealth and Pag-IBIG resulting in a discrepancy totaling P16.16 million. Also, one LGU reported a negative balance of P272,624.90 in its Due to GSIS account as of December 31, 2017.

e) The PhilHealth denied 57 out of the 15,751 claims submitted by a devolved hospital of a

Province due to non-compliance with the provisions of the National Health Insurance Act of 2013 and PhilHealth Circular No. 0035 s. 2013 resulting in loss of revenue amounting to P343,135.20. Further, 763 out of the 15,751 claims amounting to P3.17 million was returned due to various deficiencies which caused the delay in the collection of the claim. Furthermore, 4,434 out of the 6,447 patients qualified for the “No Balance Billing (NBB)” policy of PhilHealth incurred hospital bills in excess of the predetermined case rates. The excess hospital bills were uncollectible and unrecoverable from the patients and the PhilHealth, thus, resulting in loss of revenue amounting to P8.69 million.

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 payment of interest, penalties and surcharges;

Withhold the mandatory contributions and loan amortizations from the salaries of the employees and promptly 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;

530

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;

Ensure that PhilHealth claims are thoroughly reviewed prior to submission in order to prevent deficiencies such as improperly accomplished claim form and incomplete supporting documents, among others; and,

Create a cross-functional team within the hospital that would analyze the reasons why the hospital bill of an NBB qualified patient exceeds the case rate.

R. 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.

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 2017 Annual Audit Reports showed the following audit observations in the review of the LGUs compliance to the GAD policies on the institutionalization, planning and budgeting: a) Eight LGUs failed to create and/or strengthen the GAD Focal Point System and another 11

LGUs did not formulate GAD Code.

b) A total of 127 LGUs did not establish/maintain the required GAD Database and six LGUs did not institutionalize a GAD Monitoring and Evaluation System.

c) Eighteen LGUs did not administer the Harmonized Gender and Development Guidelines.

d) Twenty-five LGUs failed to prepare and/or submit their GPBs to the DILG, while 39 LGUs failed

to submit their GAD ARs. On the other hand, the DILG overlooked to review and endorse the GPBs of 31 LGUs.

531

The audit reports disclosed the following observations in the audit of the implementation of the GAD plan and budget:

a) Sixty-seven LGUs allotted/utilized its GAD fund totaling P195.263 million on projects/activities

that do not clearly address gender-related issues.

b) GAD fund totaling P1,267.792 million of 100 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

532

Summary of Audit Observations and Recommendations on Barangays

The following table shows the summary of audit findings and recommendations culled from the audit reports on the barangays rendered in CY 2017:

Findings Recommendations

A. Submission of Accounts

1. Failure or delayed submission of disbursement vouchers in 1,153 barangays.

Enjoin the punong barangays and barangay treasurers to submit the disbursement vouchers of the barangay within ten days after the end of the month.

2. Undocumented disbursements of 515 barangays.

Direct the barangay treasurers to effect payment only on duly approved disbursement vouchers.

3. Lack of supporting documents/ incomplete documentation of processed disbursements in 474 barangays.

Require the barangay treasurers to check the completeness of supporting documents before certifying the disbursement vouchers.

4. Unrecorded disbursements in 90 barangays.

Require the timely submission of disbursement vouchers with complete supporting documents to the city/municipal accountant.

5. Failure 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 of 367 barangays.

Direct the Chairman, Committee on Appropriations to maintain the RAC, prepare and submit the SACB to the Municipal Budget Officer for review and consolidation.

6. Non-maintenance of General and Subsidiary Ledgers for the accounts of 246 barangays.

Require the city/municipal accountant to maintain the general and subsidiary ledgers for the accounts of the barangay.

B. Cash

1. Failure to deposit intact and promptly of barangay collections with the authorized depository banks of 2,389 barangays.

Direct the barangay treasurers to observe the policies on the deposit of barangay collections.

2. Incurrence of cash shortages in 28 barangays.

Require the concerned accountable officers to restitute the full amount misappropriated and relieve them from their post.

3. Non-observance of the imprest system in the maintenance of the Petty Cash Fund.

Adopt the imprest system of maintaining cash advances

533


4. Unavailable Bank Reconciliation Statements of 1,288 barangays at the time of audit

Direct the local accountants to prepare the Bank Reconciliation Statements to ensure timely detection of errors.

5. Unbooked reconciling items of 343

barangays.

Direct the local accountant to effect the necessary reconciling items in the books of accounts to present fairly the balances of the cash accounts in the financial statements.

6. Non-preparation and submission of the

monthly Report of Accountability for Accountable Forms (RAAF) in 46 barangays.

Require the barangay treasurers to regularly prepare and submit RAAF.

7. Long outstanding dormant accounts in 64 barangays.

Exert efforts to locate the records/documents of the long outstanding dormant accounts, to determine appropriate action.

C. Cash Advances

1. Unliquidated cash advances of 1,178 barangays.

Instruct the punong barangays to require the full settlement of existing cash advances of concerned barangay officials.

2. Inadequate/lack of fidelity bond coverage

of accountable officers in 51 barangays.

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 a yearly budget to cover the payment of premiums on the renewal of the fidelity bonds.

D. Receivables

1. Lack of subsidiary records for receivables in 37 barangays.

Require the accounting personnel in charge of the barangays to reconstruct the accounting records as basis for maintaining subsidiary ledgers that reconcile with the receivables control account.

2. Unsettled and unrecorded prior years’

audit disallowances of 17 barangays.

Direct the barangay bookkeeper to determine the disallowances that had become final and executory and record in the books of accounts. Enforce settlement of the audit disallowances of persons identified to be liable.

534


E. Inventories, and Property, Plant and Equipment

1. Failure to conduct physical count of Inventories, and Property, Plant and Equipment (PPE) at year-end, and submission of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) in 1,127 barangays.

Require the punong barangays to constitute the inventory committee and conduct physical count of all barangay property to establish their existence and condition and prepare the Report on the Physical Count of Property, Plant and Equipment (RPCPPE).

2. Non-reconciliation of the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) with the PPE accounts in 169 barangays.

Instruct barangay bookkeepers to maintain subsidiary ledgers and reconcile property, plant and equipment balance with the physical inventory reports submitted.

3. Failure to prepare Property

Acknowledgement Receipt (PAR) and PPE Registers by 116 barangays and unupdated records of those barangays with PAR and PPE Registers.

Require the barangay treasurers to issue PAR to all officers and employees issued with government properties to pinpoint accountability.

4. Untitled and unrecorded Land owned by 412 barangays.

Cause the titling of the land and its recognition in the books of accounts of the barangay.

F. Payables

1. Existence of long outstanding payables in 61 barangays.

Require the barangay bookkeepers to conduct confirmation of the accounts with creditors to establish existence of the liability. Recommend the reversion of those accounts with no existing creditors.

G. Procurement

1. Procurements without the approved Annual Procurement Plan by 372 barangays.

Enjoin the punong barangays to prepare the Annual Procurement Plan for the effective management of its procurement activities.

2. Non-registration of 347 barangays in the

Philippine Government Electronic Procurement System (PhilGEPS) resulting in the non-posting of invitations for all their procurement activities.

Require the registration with the PhilGEPS to ensure access to an on-line network to facilitate the open, speedy and efficient on-line transmission, conveyance and use of electronic bid evaluations and guarantee the transparency and competitiveness in the procurement process.

535


3. Absence of the Bids and Awards Committee (BAC) in 53 barangays.

Require punong barangays to constitute the BAC that will be responsible for the procurement activities in the barangay.

4. Procurement of goods/services made thru selective/shopping/canvass instead of public bidding in 405 barangays.

Adhere strictly to the provisions of R.A. 9184 in the procurement of goods and services.

H. Remittance to other Government Entities

1. Failure/delayed remittance of taxes withheld to the Bureau of Internal Revenue (BIR) and failure to withhold VAT of 1,031 barangays.

Enjoin barangay treasurers to remit to BIR in full, the taxes withheld within the prescribed period to avoid incurrence of penalty charges.

2. Remittances to PHILHEALTH and HDMF made beyond due date by 130 barangays.

Strictly comply with the regulation with regard the remittance of PHILHEALTH and HDMF contribution within due date to avoid penalties and sanctions due the officer or employee.

I. Fund Transfers

1. Absence of Memorandum of Agreement and other required documents for funds of transferred to other government agencies by 96 barangays.

Observe strictly the provisions of COA Circular No. 2012-001, in the documentation of disbursements.

2. Non-moving inter-agency receivable or payable accounts remained in the books of 336 barangays for more than 3 to 10 years.

Require the bookkeepers to review the accounts and secure documents pertaining thereto to determine appropriate action.

J. Development Funds

1. Not fully utilized 20% Development Fund of 796 barangays.

Maximize the utilization of the 20% Development Fund to benefit from the projects funded thereof.

K. Gender and Development (GAD)

1. Failure of 1,037 barangays to appropriate or provide appropriation in full.

Require the punong barangays to formulate the GAD Plan for inclusion in the annual budget.

L. LDRRMF Investment Plan

1. Two hundred nine-eight barangays did not prepare the annual Local Disaster

Direct the punong barangays to prepare the Local Disaster Risk Reduction Management

536


Risk Reduction Management Fund (LDRRMF) Investment Plan.

Fund (LDRRMF) Investment Plan to support the utilization of the LDRRM funds.

2. Failure to submit the Monthly Report on

Sources and Utilization of the LDRRMF of 1,052 barangays.

Require the submission of the Monthly Report on Sources and Utilization of the LDRRMF.

3. Eighty (80) barangays failed to establish its Barangay Disaster Risk Reduction Management Council (BDRRMC).

Require all barangays to establish the BDRRMC.

M. Fund for Senior Citizens and Differently-Abled

1. One hundred seventy-three (173) barangays failed to appropriate 1% of its budget for programs and projects related to Senior Citizens and Differently-Abled, and 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 on the appropriation and preparation of the work and financial plan.

N. Local Council for the Protection of Children

1. Five hundred (500) barangays did not allocate one percent (1%) of its Internal Revenue Allotment for juvenile justice and welfare.

Allocate the required appropriation for the juvenile justice and welfare.

O. Environmental Compliance

1. No/inadequate funds appropriated and non-establishment of a Materials Recovery Facility by 45 barangays.

Appropriate funds and establish a Materials Recovery Facility as required under Section 32 of R.A. No. 9003.

2. Non-implementation of the National

Greening Program (NGP) by 40 barangays.

Require the punong barangay to spearhead the implementation of the NGP program.

P. Revenues

1. Failure to fully exercise the revenue powers to generate additional income by 25 barangays.

Enjoin barangays to exercise their revenue raising powers to generate additional income.

537


Q. Expenditures

1. The inefficient and ineffective management of funds by 882 barangays and failure to monitor expenditures against appropriations led to excess expenditures over appropriations and incurred cash overdrafts.

Require the concerned barangay officials to collaborate for efficient management of the barangay funds.

2. Non-adherence to the guidelines on the grant of Productivity Enhancement Incentive (PEI) resulting to excessive disbursement of funds in 46 barangays.

Direct the persons responsible to return the excess amount granted as PEI and observe guidelines in the grant of the incentive.

3. Personal services of 564 barangays exceeded the 55% limitation as set in Section 331 (b) of Republic Act 7160.

Require the fiscal officers of the barangay to observe the general limitations on personal services.

4. Payment of honoraria in 107 barangays to barangay officials even in the absence of supporting documents.

Require barangay treasurers to ensure that payments for honoraria shall be paid only after rendition of actual service and complete with supporting documents.

5. Current year’s appropriation used to pay prior years’ expenditures in 167 barangays.

All lawful expenditures incurred during the fiscal year shall be taken up in the accounts of that year.

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

1 Caloocan 44 15 24 5

2 Las Piñas 66 30 22 14

3 Makati 72 63 7 2

4 Malabon 64 16 32 16

5 Mandaluyong 121 39 64 18

6 Manila 91 32 34 25

7 Marikina 66 21 25 20

8 Muntinlupa 431 132 171 128

9 Navotas 43 35 1 7

10 Parañaque 52 15 29 8

11 Pasay 197 61 84 52

12 Pasig 98 51 37 10

13 Quezon 227 72 111 44

14 San Juan 126 53 35 38

15 Taguig 106 26 44 36

16 Valenzuela 63 30 33 0

Sub-total 1,867 691 753 423

Municipality:

1 Pateros 41 12 13 16

Component Units:

1 Pamantasan ng Lungsod ng Maynila 20 5 14 1

2 Quezon General Hospital 28 10 12 6

Sub-total 48 15 26 7

1,956 718 792 446

1 Abra 113 16 45 52

2 Apayao 15 5 6 4

3 Benguet 56 19 27 10

4 Ifugao 78 22 45 11

5 Kalinga 33 10 8 15

6 Mountain Province 33 20 9 4

Sub-total 328 92 140 96

1 Baguio 96 31 48 17

2 Tabuk 24 8 5 11

Sub-total 120 39 53 28

1 Municipalities of Abra 430 60 141 229

2 Municipalities of Apayao 209 102 58 49

3 Municipalities of Benguet 585 304 134 147

4 Municipalities of Ifugao 518 219 133 166

Status of Implementation of Prior Years’ Audit Recommendations

on Provinces, Cities and Municipalities

Calendar Year 2017

National Capital Region

Cities:

Total National Capital Region

Cordillera Administrative Region

Provinces:

Cities:

Municipalities:

Province/City/Municipality

538

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


5 Municipalities of Kalinga 197 82 68 47

6 Municipalities of Mountain Province 156 94 27 35

Sub-total 2,095 861 561 673

2,543 992 754 797

1 Ilocos Norte 20 8 11 1

2 Ilocos Sur 34 8 7 19

3 La Union 9 4 5 0

4 Pangasinan 14 4 7 3

5 La Union Medical Center 4 2 2 0

Sub-total 81 26 32 23

Cities:

1 Alaminos 22 11 7 4

2 Batac 40 11 14 15

3 Candon 23 8 12 3

4 Dagupan 25 15 8 2

5 Laoag 39 5 23 11

6 San Carlos 12 4 5 3

7 San Fernando 12 6 6 0

8 Vigan 24 2 11 11

9 Urdaneta 9 2 4 3

Sub-total 206 64 90 52

Municipalities:

1 Municipalities of Ilocos Norte 577 177 226 174

2 Municipalities of Ilocos Sur 405 109 157 139

3 Municipalities of La Union 309 118 118 73

4 Municipalities of Pangasinan 787 270 250 267

Sub-total 2,078 674 751 653

2,365 764 873 728

1 Batanes 12 4 6 2

2 Cagayan 29 6 12 11

3 Isabela 17 7 10 0

4 Nueva Vizcaya 42 17 21 4

5 Quirino 11 4 7 0

Sub-total 111 38 56 17

1 Tuguegarao 17 7 5 5

2 Ilagan 17 7 6 4

3 Cauayan 9 8 0 1

4 Santiago 14 3 10 1

Sub-total 57 25 21 11

Region II

Total Cordillera Administrative Region

Region I

Provinces:

Total Region I

Provinces:

Cities:

539

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


1 Municipalities of Batanes 70 13 28 29

2 Municipalities of Cagayan 361 129 123 109

3 Municipalities of Isabela 446 139 215 92

4 Municipalities of Nueva Vizcaya 342 145 102 95

5 Municipalities of Quirino 140 32 51 57

Sub-total 1,359 458 519 382

1,527 521 596 410

1 Aurora 41 12 8 21

2 Bataan 48 25 21 2

3 Bulacan 77 49 23 5

4 Nueva Ecija 82 46 34 2

5 Pampanga 108 68 36 4

6 Tarlac 108 52 36 20

7 Zambales 123 35 39 49

Sub-total 587 287 197 103

1 Balanga 8 5 1 2

2 Olongapo 109 50 37 22

3 Malolos 26 12 2 12

4 Meycauayan 52 30 3 19

5 San Jose del Monte 34 19 12 3

6 Angeles 57 24 31 2

7 Mabalacat 49 15 3 31

8 San Fernando 96 69 12 15

9 San Jose 31 16 10 5

10 Science of Muñoz 42 20 20 2

11 Cabanatuan 51 11 31 9

12 Gapan 48 5 7 36

13 Palayan 42 7 10 25

14 Tarlac 106 51 24 31

Sub-total 751 334 203 214

1 Municipalities of Aurora 185 65 61 59

2 Municipalities of Bataan 409 112 186 111

3 Municipalities of Bulacan 613 350 147 116

4 Municipalities of Nueva Ecija 833 328 217 288

5 Municipalities of Pampanga 930 446 225 259

6 Municipalities of Tarlac 471 153 162 156

7 Municipalities of Zambales 664 233 185 246

Sub-total 4,105 1,687 1,183 1,235

5,443 2,308 1,583 1,552

Municipalities:

Total Region II

Region III

Provinces:

Cities:

Municipalities:

Total Region III

540

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


1 Batangas 61 35 20 6

2 Cavite 20 8 8 4

3 Laguna 38 13 25 0

4 Rizal 32 12 11 9

5 Quezon 65 47 15 3

Sub-total 216 115 79 22

1 Antipolo 32 10 15 7

2 Bacoor 35 17 11 7

3 Batangas 65 20 36 9

4 Biñan 29 11 16 2

5 Cabuyao 37 13 20 4

6 Calamba 23 20 3 0

7 Cavite 30 18 5 7

8 Dasmariñas 29 17 2 10

9 Gen. Trias 32 12 7 13

10 Imus 65 50 13 2

11 Lipa 51 16 8 27

12 Lucena 27 17 3 7

13 San Pablo 58 34 11 13

14 San Pedro 40 13 11 16

15 Santa Rosa 69 32 23 14

16 Tagaytay 21 15 4 2

17 Tanauan 48 25 8 15

18 Tayabas 24 14 1 9

19 Trece Martires 25 10 8 7

Sub-total 740 364 205 171

1 Municipalities of Batangas 1,150 431 363 356

2 Municipalities of Cavite 418 208 98 112

3 Municipalities of Laguna 563 221 180 162

4 Municipalities of Quezon* 853 326 212 284

5 Municipalities of Rizal 382 103 137 142

Sub-total 3,366 1,289 990 1,056

4,322 1,768 1,274 1,249

* The status of implementation of 31 prior years' audit recommendations were not validated due to non-submission of Financial Statements.

1 Romblon 16 4 9 3

2 Marinduque 61 37 17 7

3 Oriental Mindoro 48 12 29 7

4 Palawan 19 8 5 6

Cities:

Region IV-A

Provinces:

Municipalities:

Total Region IV-A

Region IV-B

Provinces:

541

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


5 Occidental Mindoro 15 5 8 2

Sub-total 159 66 68 25

1 Calapan 54 26 22 6

2 Puerto Princesa 44 3 18 23

Sub-total 98 29 40 29

1 Municipalities of Romblon 291 53 133 105

2 Municipalities of Marinduque 201 51 77 73

3 Municipalities of Oriental Mindoro 625 148 291 186

4 Municipalities of Palawan 316 67 103 146

5 Municipalities of Occidental Mindoro 162 32 104 26

Sub-total 1,595 351 708 536

1,852 446 816 590

Provinces:

1 Albay 107 86 19 2

2 Camarines Norte 76 49 9 18

3 Camarines Sur 59 15 39 5

4 Catanduanes 30 13 13 4

5 Masbate 52 24 21 7

6 Sorsogon 94 55 31 8

Sub-total 418 242 132 44

Cities:

1 Iriga 70 10 40 20

2 Legazpi 16 14 2

3 Ligao 72 40 27 5

4 Masbate 52 9 41 2

5 Naga 40 1 35 4

6 Sorsogon 47 16 28 3

7 Tabaco 95 31 47 17

Sub-total 392 121 220 51

1 Municipalities of Albay 1,027 384 476 167

2 Municipalities of Camarines Norte 718 162 226 330

3 Municipalities of Camarines Sur 630 173 271 186

4 Municipalities of Catanduanes 222 81 82 59

5 Municipalities of Masbate 398 95 169 134

6 Municipalities of Sorsogon 799 318 320 161

Sub-total 3,794 1,213 1,544 1,037

4,604 1,576 1,896 1,132

1 Aklan 45 23 18 4

2 Antique 46 15 30 1

Provinces:

Cities:

Municipalities:

Total Region IV-B

Region V

Municipalities:

Total Region V

Region VI

542

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


3 Capiz 15 10 3 2

4 Guimaras 41 15 11 15

5 Iloilo 195 71 45 79

Sub-total 342 134 107 101

1 Roxas 66 27 24 15

2 Iloilo 36 9 23 4

3 Passi 149 18 46 85

Sub-total 251 54 93 104

1 Municipalities of Aklan 403 211 105 87

2 Municipalities of Antique 441 133 201 107

3 Municipalities of Capiz 519 330 92 97

4 Municipalities of Guimaras 76 35 22 19

5 Municipalities of Iloilo 2,018 455 845 718

Sub-total 3,457 1,164 1,265 1,028

4,050 1,352 1,465 1,233

Provinces:

1 Cebu 58 10 30 18

2 Bohol 56 23 17 16

3 Siquijor 27 9 16 2

Sub-total 141 42 63 36

1 Cebu 121 90 19 12

2 Talisay 43 26 10 7

3 Carcar 31 22 6 3

4 Naga 55 8 14 33

5 Lapu-Lapu 56 10 31 15

6 Bogo 31 11 8 12

7 Danao 17 5 11 1

8 Mandaue 96 44 11 41

9 Toledo 61 5 43 13

10 Tagbilaran 81 30 30 21

Sub-total 592 251 183 158

Municipalities:

1 Municipalities of Cebu 1,050 297 313 440

2 Municipalities of Bohol 1,130 396 401 333

3 Municipalities of Siquijor 118 36 57 25

Sub-total 2,298 729 771 798

3,031 1,022 1,017 992

1 Eastern Samar 67 35 9 23

Cities:

Municipalities:

Total Region VI

Region VII

Cities:

Total Region VII

Region VIII

Provinces:

543

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


2 Samar 34 20 13 1

3 Northern Samar 28 7 19 2

4 Leyte 76 39 30 7

5 Biliran 23 11 12 0

6 Southern Leyte 32 5 23 4

Sub-total 260 117 106 37

1 Borongan 48 15 24 9

2 Catbalogan 11 2 4 5

3 Calbayog 44 5 36 3

4 Tacloban 31 13 11 7

5 Ormoc 49 9 26 14

6 Baybay 19 13 4 2

7 Maasin 34 24 8 2

Sub-total 236 81 113 42

1 Municipalities of Eastern Samar 359 136 144 79

2 Municipalities of Leyte 1,254 450 470 334

3 Municipalities of Biliran 124 48 59 17

4 Municipalities of Northern Samar 557 114 244 199

5 Municipalities of Samar 585 139 269 177

6 Municipalities of Southern Leyte 316 116 142 58

Sub-total 3,195 1,003 1,328 864

Total Region VIII 3,691 1,201 1,547 943

1 Zamboang del Norte 27 18 9 0

2 Zamboanga del Sur 30 9 19 2

3 Zamboanga Sibugay 37 16 21 0


1 Dapitan 18 7 6 5

2 Dipolog 50 4 40 6

3 Pagadian 70 51 19 0

4 Zamboanga 121 51 60 10

Sub-total 259 113 125 21

1 Municipalities of Zamboanga del Norte 452 187 176 89

2 Municipalities of Zamboanga del Sur 905 356 321 228

3 Municipalities of Zamboanga Sibugay 432 162 144 126

Sub-total 1,789 705 641 443

2,142 861 815 466

1 Bukidnon 5 2 3

Provinces:

Cities:

Municipalities:

Region IX

Cities:

Municipalities:

Total Region IX

Region X

Provinces:

544

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


2 Camiguin 8 1 4 3

3 Lanao del Norte 13 5 4 4

4 Misamis Occidental 9 3 4 2

5 Misamis Oriental 52 19 21 12

Sub-total 87 30 36 21

1 Cagayan de Oro 15 5 10 0

2 El Salvador 6 6 0 0

3 Gingoog 21 6 11 4

4 Malaybalay 21 5 15 1

5 Valencia 15 5 6 4

6 Iligan 43 5 34 4

7 Oroquieta 18 15 3

8 Ozamiz 47 7 7 33

9 Tangub 41 12 21 8

Sub-total 227 66 107 54

1 Municipalities of Bukidnon 263 111 117 35

2 Municipalities of Camiguin 54 24 20 10

3 Municipalities of Lanao del Norte 279 61 104 114

4 Municipalities of Misamis Occidental 94 33 49 12

5 Municipalities of Misamis Oriental 343 161 104 78

Sub-total 1,033 390 394 249

1,347 486 537 324

1 Compostela Valley 41 31 8 2

2 Davao del Norte 22 18 2 2

3 Davao del Sur 52 27 20 5

4 Davao Oriental 51 4 24 23

5 Davao Occidental 15 13 1 1

Sub-total 181 93 55 33

1 Tagum 39 19 15 5

2 Panabo 81 25 32 24

3 Island Garden of Samal 30 6 24 0

4 Digos 39 11 18 10

5 Mati 58 36 18 4

6 Davao 37 19 17 1

Sub-total 284 116 124 44

1 Municipalities of Compostela Valley 188 127 49 12

2 Municipalities of Davao del Norte 205 75 67 63

3 Municipalities of Davao del Sur 204 97 70 37

4 Municipalities of Davao Oriental 396 41 215 140

Municipalities:

Cities:

Municipalities:

Total Region X

Region XI

Provinces:

Cities:

545

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


5 Municipalities of Davao Occidental 207 111 58 38

Sub-total 1,200 451 459 290

1,665 660 638 367

Provinces:

1 North Cotabato 5 1 4

2 Sultan Kudarat 7 5 2

3 South Cotabato 22 13 9

4 Sarangani 116 8 56 52

Sub-total 150 27 71 52

Cities:

1 Kidapawan 7 5 2

2 Cotabato 18 4 12 2

3 Tacurong 9 5 3 1

4 Koronadal 39 17 17 5

5 General Santos 84 15 53 16

Sub-total 157 46 87 24

1 Municipalities of North Cotabato 304 96 122 86

2 Municipalities of Sultan Kudarat 185 65 73 47

3 Municipalities of South Cotabato 280 86 139 55

4 Municipalities of Sarangani 167 52 77 38

Sub-total 936 299 411 226

1,243 372 569 302

1 Agusan Del Norte 23 7 13 3

2 Agusan Del Sur 40 14 26 0

3 Dinagat Islands 8 5 3

4 Surigao Del Norte 49 23 17 9

5 Surigao Del Sur 23 8 11 4Sub-total 143 57 70 16

1 Bayugan 23 8 14 1

2 Bislig 26 14 11 1

3 Butuan 53 30 19 4

4 Cabadbaran 23 0 19 4

5 Surigao 66 25 38 3

6 Tandag 24 16 4 4

Sub-total 215 93 105 17

1 Municipalities of Agusan del Norte 147 44 66 37

2 Municipalities of Agusan del Sur 243 65 119 59

3 Municipalities of Dinagat Islands 141 85 43 13

Region XII

Municipalities:

Total Region XII

Region XIII

Provinces:

Cities:

Municipalities:

Total Region XI

546

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


4 Municipalities of Surigao del Norte 614 174 312 128

5 Municipalities of Surigao del Sur 294 151 103 40

Sub-total 1,439 519 643 277

1,797 669 818 310

1 Negros Occidental 43 18 10 15

2 Negros Oriental 36 6 13 17

Sub-total 79 24 23 32

1 San Carlos 15 3 10 2

2 Silay 15 3 8 4

3 Talisay 14 6 6 2

4 Escalante 33 7 14 12

5 Cadiz 23 0 14 9

6 Sagay 22 5 10 7

7 Victorias 45 6 32 7

8 Bacolod 55 2 46 7

9 Bago 11 7 4 0

10 La Carlota 32 6 20 6

11 Himamaylan 35 12 21 2

12 Kabankalan 12 5 6 1

13 Sipalay 15 5 9 1

14 Bais 30 7 17 6

15 Bayawan 19 7 9 3

16 Canlaon 37 3 14 20

17 Dumaguete 42 12 26 4

18 Guihulngan 38 5 26 7

19 Tanjay 35 6 14 15

Sub-total 528 107 306 115

1 Municipalities of Negros Occidental 436 100 191 145

2 Municipalities of Negros Oriental 483 85 236 162

Sub-total 919 185 427 307

1,526 316 756 454

1 Lanao del Sur 5 4 0 1

2 Basilan 21 8 8 5

3 Tawi Tawi 9 4 4 1

4 Sulu 5 5 0 0

5 Maguindanao 6 2 2 2


Municipalities:

Total Region XVI

Autonomous Region in Muslim Mindanao

Provinces:

Total Region XIII

Region XVI

Provinces:

Cities:

547

No. of Audit

Recommendations

Fully

Implemented

Partially

Implemented

Not

Implemented



Calendar Year 2017


1 Marawi 10 0 1 9

2 Isabela 6 1 5 0

3 Lamitan 12 11 1 0

Sub-total 28 12 7 9

1 Municipalities of Lanao del Sur 280 58 84 138

2 Municipalities of Basilan 147 88 31 28

3 Municipalities of Tawi-Tawi 120 35 31 54

4 Municipalities of Sulu 247 70 110 67

5 Municipalities of Maguindanao 167 84 26 57

Sub-total 961 335 282 344

1,035 370 303 362

46,139 16,402 17,049 12,657

Total Autonomous Region in Muslim

Mindanao

GRAND TOTAL

Cities:

Municipalities:

548

2017 Annual Financial Report for the Local Government ... · a result of the non-reconciliation of...

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