EXECUTIVE SUMMARY

Organizational Set Up

Asingan is a 2nd class municipality consisting of 21 barangays. The municipal

hierarchy is under the leadership of the Honorable Municipal Mayor, Heidee L. Ganigan-
Chua.

The local government unit is manned by 231 municipal officials and employees
distributed in different offices, to wit:

Number
Elective 11
Regular/Permanent 89
Co-Terminus 3
Casuals 6
Contractuals 2
Job-Order 120
Total 231

Highlights of Financial Information

The financial position, sources of funds, appropriations and obligations of the

Municipality of Asingan for calendar years 2015 and 2014 are presented below:

Increase/
2015 2014 %
Decrease
Assets 163,006,173.51 148,356,367.54 14,649,805.97 9.87%
Liabilities 49,502,339.01 29,238,975.47 20,263,363.54 69.30%
Government Equity 113,503,834.50 99,613,579.99 13,890,254.51 13.94%
Income 118,022,679.76 105,729,924.23 12,292,755.53 11.63%
Expenses 99,098,502.32 89,504,982.21 9,593,520.11 10.72%

Operational Highlights

The following programs, projects and activities are the significant

accomplishments of the municipality for the year 2015, some of which were validated, to
wit:
No. Program/Project/Activity Amount Status
1 Installation of box culvert of canal at soloria street 119,668.17 Completed
2 Installation of box culvert/ construction of canal along solonia street (phase II) 179,518.39 Completed
3 Concreting of local access road (nayaknak) 998,862.80 Completed
4 Continuation of the concreting of Pugong & Pao local access road 199,964.00 Completed
5 Concreting of local access road at sitio kawakan 199,685.92 Completed
6 Improvement of multi purpose hall 199,953.14 Completed
7 Continuation of the construction of multi purpose hall 199,370.53 Completed
8 Continuation of the constrcution of CHB lined Canal 199,651.20 Completed
9 Construction of streetlights at Brgy Coldit 199,421.57 Completed
10 Continuation of the concreting of of road shoulder 199,528.88 Completed
11 Construction of stone masonry along communal irrigation system 199,996.65 Completed
12 Concreting of road shoulder along G. Velasco street 199,528.88 Completed
13 Continuation pf rip rapping of main canal (Sobol ditch) 199,550.22 Completed
14 Concreting of local access road 199,494.28 Completed
15 Construction of local access road 199,207.62 Completed
16 Continuation of the construction of streetlights 199,303.56 Completed
17 Continuation of construction of CHB Lined canal at Zone 5 199,900.24 Completed
18 Continuation of the concreting of road shoulder 199,534.52 Completed
19 Continuation of the concreting of road shouder 199,534.52 Completed
20 Continuation of the construction of CHB lined canal system 199,310.97 Completed
21 Concreting of loacal access road at brgy san vicente east 199,534.52 Completed
22 Concreting of local access road at sitio Nangar Aroan 199,494.28 Completed
23 Construction of streetlights 199,308.94 Completed
24 Construction of kindergarden (Phase II) at Carosucan East Elem School 199,595.90 Completed
25 Rehabilitation of Home Economics Building (phase II) at Brgy Bobonan Elem School 399,316.59 Completed
26 Filling (Partial) of the Proposed trading post 184,607.67 Completed
27 Construction of Division Canal for the Proposed Trading Post 549,624.60 Completed
28 Construction of the expansion of day care center 306,551.00 Completed
29 Repair of day care center 246,525.00 Completed
30 Repair of day care center 140,440.36 Completed
31 Concreting of road shoulder along 199,395.00 Completed
32 Repair of footbridge 189,473.92 Completed
33 Construction of Eroded Portion (slope 299,358.68 Completed
TOTAL 8,004,212.52

Scope of Audit

The audit covered the operations of the Municipality of Asingan for the calendar
year 2015. The types of audit employed consists of financial and compliance audit aimed
to ascertain the fairness and reliability of the financial position and results of operation of
the municipality and to check agency’s adherence to auditing laws, rules and regulations.
Likewise, a Value for Money Audit was conducted on selected areas to ascertain whether
management had attained its goals and objectives in an economical, efficient and
effective manner.
Opinion on the State Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the financial statements as the

validity, accuracy, and existence of the Property, Plant and Equipment (PPE) account
valued at P87,417,082.32 (net of depreciation) as of December 31, 2015 could not be
ascertained due to failure of the management to conduct a physical inventory of these
assets, hence, affected the reliability of the account balance in the financial statements.
Existing records did not allow us to apply alternative audit procedures to ascertain the
account.

Other Significant Findings and Recommendation

The following are the significant findings and recommendations in the audit of the
Local Government of Asingan, Pangasinan for the year 2015:

1. No annual physical count/inventory of all its property, plant and equipment,

amounting to P87,417,082.32 has been conducted, contrary to the provisions of
Section 124 of COA Circular No. 2002-003, thus existence, condition and
valuation of these accounts could not be easily determined and reconciled with the
books of accounts maintained by its accounting unit.

We have reiterated our prior year audit recommendation that the Local
Chief Executive create an inventory team to complete the physical count of
property, plant and equipment and prepare and submit immediately the
result of inventory conducted. Also, require the facilitation of updating the
accounting and property records, if any, in order to come up with a
reconciled PPE account balances as of December 31, 2015.

2. Extant practices and procedures of the Municipality pertaining to receipts and

collections resulted in delayed remittances and deposits and delayed recording of
receipts and collections, thereby weakening accounting controls over the cash
transactions, contrary to the accounting policies set forth in the Manual on the
New Government Accounting System.

We have recommended that Management should implement measures to

ensure prompt reporting, remittances and deposit of collections in order to
properly reflect the correct cash balances in the financial statements:

a. Collecting officers should be required to prepare RCD’s at the close of

each business day and effect remittance of their collections daily,
particularly when collections exceed P5,000.00;
 b. The Municipality should consider the designation of additional
liquidating officers and merging their functions with the verification
unit, in order to facilitate the verification and remittance process.
Procedures for verification of receipts should be streamlined to ensure
prompt recording and remittance of collections;

c. The Municipal Accountant and the Municipal Treasurer should

conduct jointly a review of the accounting and reporting policies of
the Municipality with regard to collection, deposit and recording of
revenues, in order to ensure correctness and accuracy of cash
balances in Treasury reports and in the financial statements and to
preclude any duplication of procedures and functions.

3. Validity of ownership of three (3) lots recorded in the books of accounts

amounting to P2,573,460.00 cannot be ascertained due to the absence of Transfer
Certificate of Titles (TCTs) in the name of the Municipality of Asingan.).

We have recommended that Management prioritize the immediate transfer

of ownership of the acquired parcels of land amounting to P2,573,460.00 in
the name of the Municipality of Asingan. Likewise, we have recommended
the optimal coordination between the responsible municipal officials to
ensure proper and adequate legal documentation of the transfer of
ownership.

4. Deficiencies were noted in the policies and procedures in granting and liquidation
of cash advances.

A. The Municipality’s continuous efforts in effecting the liquidation of cash

advances resulted into a 100% liquidation of the current year balances.
However, rules and regulations pertaining to the granting, utilization and
liquidation of cash advances of officials and employees of the LGU were not
followed, which can hosts weaknesses in the internal control by increasing the
likelihood of misuse of government funds.

B. Cash advances for salaries and honoraria and local travel and seminars were
drawn in absence of complete supporting documents in contrary to Section 4.2
of COA Circular 97-002 dated February 10, 1997 and Section 1.1.4.1 of the
Revised Documentary Requirements for Common Government Transactions
of COA Circular 2012-001 dated June 14, 2012.

C. The Disbursing Officer was granted cash advances beyond her maximum
accountability of P18,000.00 contrary to pertinent provisions of COA Circular
No. 97-002 and Treasury Circular No. 02-2009, thereby putting government
funds at risk in case of loss, theft and/or embezzlement.
 Based on the noted deficiencies, we have recommended that Management:

1. Continue the follow-up and monitoring of cash advances to ensure full

liquidation at year-end. Exhaust all possible means to recover the
unliquidated cash advance from Mr. Mangosong.

2. Stop the practice of granting cash advances to any official, officers

and employees without liquidating first his/her prior and outstanding
cash advance.

3. Strictly comply with the provisions of COA Circular No. 97-002 dated
February 10, 1997 and COA Circular No. 2012-001 dated June 14,
2012 by requiring the timely liquidation of cash advances and the
attachments of a certification from the accountant that previous cash
advances have been liquidated and accounted for in the books. In
addition, stop processing payments of any cash advance in absence of
complete supporting documents.

4. Limit the grant of cash advances to the Disbursing Officer within the
allowable maximum cash accountability covered by her bond
pursuant to COA Circular No. 97-002 and Treasury Circular No. 02-
2009. When there is a need to increase her cash accountability,
additional bond should be applied for.

Status of Implementation of Prior Year’s Audit Recommendations

Out of ten(10) recommendations embodied in the 2014 Annual Audit Report, four
were fully implemented, another four were partially implemented while the remaining
two were not implemented.