Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. VIII
Local Government Sector E – Samar Province
Provincial Satellite Auditing Office
Catbalogan City

December 16, 2020

The Regional Director

Commission on Audit
Regional Office No.VIII
Candahug Palo, Leyte

Thru: The Supervising Auditor

This Audit Group

Madam:

In compliance with Section 2, Article IX-D of the Philippine Constitution and Section
43(2) of P.D. No. 1445, we conducted a Financial and Compliance Audit on the accounts and
operations of Barangay Sto. Niño, Paranas, Samar, for the period January 1, 2017 to December
31, 2019.

Our audit was conducted to ascertain the propriety of financial transactions and
compliance of the Local Government Unit (LGU) to prescribed rules and regulations. It was also
made to ascertain the accuracy of financial records and reports, as well as the fairness of the
presentation of the financial statements.

The attached report consists of three (3) parts. Part I presents the Audited Financial
Statements, Part II details the significant Audit Observations and Recommendations, which were
communicated through various Audit Observation Memoranda to concerned management
officials and staff and through the issuance of Summary of Audit Observations and
Recommendations (SAOR) on December 10, 2020, Part III summarizes the Status of
Implementation of Prior Years’ Unimplemented Audit Recommendations, and Part IV contains
the Annexes.

There is a reasonable assurance that the financial statements taken as a whole are free
from material misstatements and were prepared in accordance with laws, rules and regulations
and in conformity with applicable financial reporting framework, except for the doubtful
Existence of the Property, Plant and Equipment (PPE) accounts totaling ₱975,075.61,
₱566,959.21 and ₱566,959.21 as of December 31, 2019, December 31, 2018 and December 31,
2017, respectively due to the failure of the barangay to conduct physical inventory and to
maintain Property/Equipment Card and Property/Equipment Ledger Card. Moreover, the non-
provision of allowance for depreciation on said PPE accounts resulted in the understatement of
accumulated depreciation accounts and the overstatement of accumulated surplus/deficit.

For Calendar Year ___, the financial statements and schedules and the corresponding State
Auditor’s Report on the Financial Statements are not embodied in this report because of the failure of the
Local Government Unit to submit the said financial statements.

Our audit was conducted in accordance with laws and applicable Philippine Public Sector
Standards on Auditing (PPSSA), and we believe that it provides reasonable bases for the results
of audit.

Very truly yours,

JORALD D. BANTILES
State Auditor III
OIC- Audit Team Leader