C.3, Chapter V of the Manual on Property Custodianship.

Moreover, the RPCPPE

and RPCLRN were not properly accomplished pursuant to the Manual on the
NGAS for LGUs, Volume II and COA Circular No. 2015-008 dated November
23, 2015, respectively. (Observation No. 1)

We recommended that the (a) Inventory Committee and the City Accountant
reconcile the balances of the PPE accounts per books with the inventory reports
and prepare adjustments thereon, if warranted; (b) City Accountant identify the
specific PPE items presented in lump-sum as Unaccounted beginning balance and
Transfer from TF to GF; and (c) Inventory Committee prepare and accomplish the
RPCPPE and RPCLRN in accordance with Annex 49 of the Manual on the NGAS
for LGUs, Volume II and Annex C of COA Circular No. 2015-008.

2. Since CY 1997, the City was not able to implement the general revision of real
property assessments, which must be made every three years pursuant to Section
219 of RA No. 7160 and the Department of Finance (DOF) and Department of
Interior and Local Government (DILG) Joint Memorandum Circular (JMC) No.
2010-01 dated October 10, 2010 thus, depriving the City of the opportunity to raise
its revenues which could be used to improve the delivery of basic services to its
constituents. (Observation No. 2)

We recommended that the City Mayor make representation with the Sangguniang
Panlungsod on the necessity of the approval of the ordinance on the general
revision of real property assessments pursuant to Section 219 of RA No. 7160 and
DOF and DILG JMC No. 2010-01.

3. Lapses were noted in the bidding process for the procurement of infrastructure
projects, goods and consulting services totaling ₱44,260,433.90 which were not in
accordance with the provisions of the 2016 Revised Implementing Rules and
Regulations (IRR) of RA No. 9184, Government Procurement Policy Board
(GPPB) Resolution No. 23-2017 dated May 30, 2017 and Department of Labor
and Employment (DOLE) Department Order (DO) No. 13, series of 1998, thus,
casting doubt on the propriety of the procurement process. Further, payments
pertaining thereto lacked the necessary supporting documents contrary to Section
4(6) of Presidential Decree (PD) No. 1445 hence, the propriety and validity of
claims were not fully established. (Observation No. 3)

We recommended that the (a) Bids and Awards Committee (BAC) strictly adhere
to the provisions of the Revised IRR of RA No. 9184 particularly the (i) inclusion
CSHP duly approved by the DOLE and other contract documents in the Bidding
Documents as required under Section 37.2.3 of the law; (ii) posting of Notice of
Award (NOA) in the PhilGEPS within three calendar days from its issuance, and
NTP and approved contract within 15 calendar days from issuance of the Notice
to Proceed (NTP); (iii) approval of the Head of Procuring Entity (HOPE) on the
BAC recommendation within a period not exceeding 15 calendar days from the
determination by the BAC of the winning bidder; (iv) enforcement of the
warranty security to be posted by the contractor/supplier pursuant to Section 62.1
 in the case of Goods, and from final acceptance of the project up to the period
prescribed in Section 62.2.3.2 of said law; (v) procurement of consultancy
services consistent with the provisions of Sections 2, 48.1 and 37.1.1 of the cited
Act; and (vi) use of the 5th Edition of the Philippine Bidding Documents for the
procurement of infrastructure projects, goods and consulting services; (b) City
Accountant, BAC Chairman and City Engineer submit the lacking necessary
supporting documents required under Item 9.0 of COA Circular No. 2012-001 to
support the propriety and validity of disbursements made; and (c) City
Accountant, BAC Chairman and CDRRMO submit the certification/
documentation pertaining to the reconditioned equipment and documents showing
that the purchased equipment met the requirements provided under Item 4.0 of
National Budget Circular (NBC) No. 446-A dated January 30, 1998.

4. Deficiencies were noted in the preparation of plans and budget, utilization and
reporting of the Local Disaster Risk Reduction and Management Fund
(LDRRMF) for CY 2019 such as (a) non-preparation of the LDRRMF Investment
Plan (LDRRMFIP) required under Item 5.1.2 of COA Circular No. 2012-002
dated September 12, 2012; (b) programs, projects and activities (PPAs) indicated
in the plan for LDRRMF were not supported with recommendation by the City
DRRM Council (CDRRMC) which was inconsistent with Section 4, Rule 5 of the
IRR of RA No. 10121 or the Philippine Disaster Risk Reduction and Management
(DRRM) Act of 2010; and (c) discrepancy of the reported amounts on
appropriations under Maintenance and Other Operating Expenses (MOOE) and
Capital Outlay (CO) amounting to ₱403,000.00 between the budget records and
Statement of Comparison of Budgeted and Actual Amounts (SCBAA), and in the
classification of the PPAs as to Maintenance and Other Operating Expenses
(MOOE) and Capital Outlay (CO) for LDRRMF. (Observation No. 4)

We recommended that the (a) City Disaster Risk Reduction and Management
Officer (CDRRMO) (i) prepare and submit the LDRRMFIP in accordance with
the format provided in Annex A of COA Circular No. 2012-002; and (ii) submit
to the Audit Team the copy of CDRRMC Resolution recommending the use of
unexpended balance of LDRRMF for CY 2018; (b) Acting City Planning and
Development Coordinator (i) ensure that the plans and programs under the
LDRRMF are duly recommended by the CDRRMC prior to integrating the same
to the AIP/Supplemental AIP; and (ii) submit to the Audit Team the Supplemental
AIP supporting the use of unexpended balance of LDRRMF for CY 2018; (c) City
Budget Officer and Acting City Planning and Development Coordinator ensure
that the account classification in the AB is consistent with those indicated in the
AIP and vice versa; (d) City Budget Officer adopt measures to properly monitor
the appropriations to facilitate and ensure an accurate basis in certifying
availability of appropriations and allotments for obligations and expenditures on a
per PPA basis; and (e) City Accountant submit the breakdown of the presented
final budgeted amounts and the list of continuing appropriation to substantiate the
reported unexpended balance of Capital Outlay in the Statement of Comparison of
Budgeted and Actual Amounts (SCBAA).
5. In CY 2019, lapses were noted in the accounting and reporting on the receipt of
in-kind aids or donations totaling ₱405,400.00 and utilization of Local Disaster
Risk Reduction and Management Fund (LDRRMF) amounting to ₱12,180.958.00
such as (a) failure to (i) prepare and maintain inventory list of all procured and
donated relief goods and/or PPE; (ii) maintain stock card (SCs) for relief goods;
(iii) support with Requisition Issue Slip (RIS) the issuance of relief goods to
beneficiaries totaling ₱2,078,558.00; and (iv) include in the Report on the
Physical Count of Property, Plant and Equipment (RPCPPE) or record in the
books donated PPE totaling ₱405,400.00; (b) outright recording of relief goods as
expenses instead to their appropriate Inventory account; and (c) inadequate
disclosure in the Notes to Financial Statements on information pertaining to
inventories procured out of LDRRMF and cash donations, contrary to COA
Circular No. 2014-002 dated April 15, 2014 thus, limiting the information for
transparency and accountability in the use of disaster relief and/or donations, to
donors, other stakeholders and the public. (Observation No. 5)

We recommended that the (a) General Services Officer comply with the
provisions under COA Circular No. 2014-002 in the (i) preparation and
maintenance of inventory list of procured items based on the updated SCs and
PCs; (ii) issuance of relief goods to be supported with the RIS; (iii) in case there
are Donations in-kind, prepare and maintain Registry of Donated Relief Goods for
each of kind of relief goods using the prescribed format in the circular; and (iv)
prepare the monthly reports on the receipt and distribution/utilization of in-kind
donations, to be submitted to the OCD, copy furnished the Audit Team, on or
before the 10th day of the ensuing month until all donations are fully
consumed/utilized pursuant to the same circular; (b) Chairman of Inventory
Committee include the In-Kind Donations received by the City in the physical
count of inventory of PPE; (c) CDRRMO submit the Acknowledgment Receipt
for Donations in-kind for DRRM to the City Accountant as reference in the
recording of each in-kind donation received in the books; and (d) City Accountant
(i) record as debit the donated PPE in the appropriate Asset account and as credit
to the Government Equity account; (ii) comply with the COA Circular No. 2014-
002 on the recording of the purchases and issuance of relief goods; and (iii)
include the required disclosures in the Notes to FS of information pertaining to
inventories.

6. Non-priority expenses totaling ₱1,534,366.56 were charged to Special Education

Fund (SEF) which was not in accordance with Sections 100 and 272 of RA No.
7160, Department of Education (DepEd), Department of Budget and Management
(DBM) and DILG Joint Circular (JC) No. 1, s. 2017, hence, defeating the purpose
for which the fund was created. Moreover, payment for wages of teachers for
Evening Opportunity Class in the Oriental Mindoro National High School
(OMNHS) amounting to ₱268,340.63 were not supported with necessary
documents as provided in COA Circular No. 2012-001 dated June 14, 2012 and
Section 4(6) of PD No. 1445 thus, casting doubt on the propriety of the claims.
(Observation No. 6)
 We recommended that the (a) City School Board (CSB) ensure that the SEF is
appropriated and disbursed only for the priority/allowable expenses chargeable
against the SEF specifically laid down in DepEd-DBM-DILG JC No. 1, s. 2017;
and (b) City Accountant submit to the Audit Team the lacking documents to
establish the propriety of payment for wages and prove the receipt of procured
supplies by the beneficiaries.

7. The necessity of hiring 980 job orders (JOs) and six contract of services (COS)
personnel of the City for CY 2019 with payments related thereto totaling
₱108,079,704.11 cannot be established in the absence of (a) a well-defined written
policy as basis of the hiring; and (b) detailed duties and responsibilities of the
hired JOs indicated in the issued appointments, which were not in consonant to
pertinent provisions under PD No. 1445. (Observation No. 7)

We recommended that the (a) City Mayor create a Committee specifically tasked
to formulate a well-defined written policy and guidelines on the hiring of JO and
COS personnel; and (b) City Human Resource Management Officer (CHRMO)
ensure that the functions and duties of each JO and COS personnel are clearly
stated in the appointment.

8. The payment for the reconditioned mini fire truck amounting to ₱1,788,750.00, of
which ₱609,153.06 was charged against the appropriation under the City
Veterinary and Services Department (CVSD) was deemed irregular pursuant to
COA Circular No. 2012-003 dated October 29, 2012 for not complying with the
pertinent provisions of PD No. 1445, otherwise known as the Government
Auditing Code of the Philippines and Republic Act (RA) No. 7160 or the Local
Government Code of the Philippines. Further, payment pertaining thereto lacked
the necessary supporting documents casting doubt on the propriety of the claims.
(Observation No. 8)

We recommended that the (a) City Mayor, City Budget Officer and City
Accountant provide the legal basis for the disbursement of ₱609,153.06 for the
purchased reconditioned mini fire truck using the appropriation of the CVSD; (b)
City Budget Officer, City Accountant and City Veterinarian henceforth, strictly
observe the provisions on the use of appropriated funds for specific purpose/s; and
(c) BAC Chairman and City Accountant submit the lacking documents to the
Audit Team for audit purposes.

9. As of December 31, 2019, the City has unsettled audit suspensions of

₱6,531,564.89, disallowances of ₱97,459.20 and charges of ₱742,672.44.

We recommended that the City Mayor, Accountant and other concerned City
officials (a) submit the remaining 81 DVs totaling ₱842,472.89 which were part of
 CITY GOVERNMENT OF CALAPAN
AGENCY ACTION PLAN and STATUS of IMPLEMENTATION
Audit Observations and Recommendations
for the Calendar Year 2019
As of ______, 2020

Agency Action Plan

Reason for Action
Target
Audit Audit Status of Partial/Delay/Non Taken/
Ref.
Observations Recommendations Action Person/Dept. Implementation Implementation -Implementation, Action to
Plan Responsible Date
if applicable be Taken
From To
                   
                   
                   

                   

Agency sign-off:

HON. ARNAN C. PANALIGAN Date

City Mayor

Note: Status of Implementation may either be (a) Fully Implemented, (b) Ongoing, (c) Not Implemented, (d) Partially Implemented, or
(e) Delayed