Republic of the Philippines
MUNICIPAL GOVERNMENT OF EL NIDO
Summary of Audit Observations and Recommendations
Audit Observations
1. AOM No. E2022-01
The statement of Comparison of Budget and Actual
Amounts (SCBAA), Statement of Appropriations,
allotments, Obligations and Balances (SAAOB) and
Notes to financial Statement for CY2021 were not
submitted within the prescribed period contrary to Item 3
of COA Circular No. 2016-004 dated September 30,2016
and Item 2 of COA Circular No. 2010-001 dated march
2, 2010 and item 14 of the International Public Sector
Accounting Standard (IPSAS)24.
2. AOM No. E2022-02
The Municipality failed to submit to the Audit Team the
Agency Action Plan and Status of Implementation
(AAAPSI) on the observations and recommendations for
CY2020 as prescribed by COA Memorandum No. 2014 -
002 dated March 18, 2014 and Section 91 of the
Republic Act No. 11518 or the General Appropriations
Act for FY 2021, thus the status and actions taken
relative to the implementation of prior year’s audit
recommendations could be evaluated.
3. AOM No. E2022-03
The financial statements, supporting schedules and
financial transaction documents for CY 2021 of the
eighteen (18) barangays of the Municipality of El Nido
were not yet submitted for audit contrary of the
provisions of Items 10 and 12.5 of the Manual on the
Financial Management of Barangays.
MANAGEMENT COMMENT
CY 2022
Audit Recommendations Management Comment
We recommend that:
1. The Municipal Accountant immediately submits the required
Notes to Financial Statement and SCBAA for CY 2021 pursuant to
Item 3 of COA Circular Municipal Budget Officer immediately
submit the SAAOB, copies of registries, supplemental budgets,
augmentations and other documents affecting changes in the annual
budget for the year 2021 pursuant to Item 2 of COA Circular No.
2010-001 and Item 4.2 of COA Circular No. 2016-004.
We recommend that:
1. The Municipal Mayor, as agency head, direct the Department 1. The Municipal Mayor immediately
Heads concerned to immediately prepare a consolidated report on all forwarded a Memorandum Order to
management actions taken relative to the audit recommendations the Department Heads concerned to
included in the Annual Audit Report for CY 2020 using the immediately prepare a consolidated
prescribed AAPSI form and henceforth, strictly adhere to the report on all management actions
prescribed period for the submission of the AAPSI as provided under taken relative to the audit
GAA. recommendations included in the
Annual Report for CY2020.
We recommend that the:
1. Municipal Accountant (i) strictly adhere to the provisions of the
Manual on the Financial Management of Barangays and immediately
submit the required financial statements. supporting schedules and
related transaction documents to the Audit Team; and
2. Punong Barangay require the (i) BT to immediately submit
complete liquidation reports, RCDs, RAAFs, and other required
Page 1 of 15

4. AOM No. E2022-04
Cash advances totaling P1,990,410.81 remained
unliquidated as of December 31,2021 contrary to
Sections 4.1 and 5.8 of COA Circular No. 97-002 dated
February 10,1997, thus the related expenses were not
recorded in the year these were incurred. Moreover, the
accuracy of cash advance balances at yearend totaling
P1,267,673.41 could not be ascertained due to non-
submission of subsidiary ledgers (SLs) contrary to Item 6
of COA Circular No. 2016-005 dated December 19,2016.
5. AOM No. E2022-05
The correctness of the year-end balances of Cash-Local
Treasury and Cash in Bank -Local Currency accounts of
P14,565,815.10 and P621,345,255.49, respectively,
could not be ascertained due to (a.) unrecorded
reconciling items aggregating P958,228.61 reflected in
the bank Reconciliation Statements (BRS); (b)
unadjusted stale checks totaling P311,752.61 contrary to
Section 83(b)(4) of the Local Treasury Operations
Manual (LTOM); and (c) discrepancies between
documents/reports, and (i) Chairman of the Committee on
Appropriations (CCA) to immediately submit the copies of Annual
and Supplemental Budgets, Registries of Appropriations and
Obligations and Status of Appropriations, Obligations and Balances
for CY 2021.
We recommend that the:
1.LCE, through the Municipal Accountant serve written notices to all 1. The LCE served a written notices
concerned accountable officers requiring immediate settlement of to all concerned accountable officers
their outstanding cash advances (CAs) and institute legal action to immediately settle their
against them, if warranted. outstanding cash advances,
2.Municipal Accountant:
a. Prepare the schedule of all receivables, unliquidated Cas,
and fund transfers pursuant to COA Circular No. 2016-005
dated December 19, 2016 and COA Memorandum No.2017-
010 dated May 15,2017;
b. Enforce strict monitoring of grant and liquidation of Cas to
ensure that no additional CA is granted unless the previous
one has been duly liquidated and accounted for; and
c. Immediately submit to the Audit Team the requested
documents relevant to the unliquidated CAs for filing of
appropriate case against erring AOs and the SLs for the cash
advances of officers and employees totaling 1,267,673.41 as
of December 31, 2021 and
3. LCE and the Municipal Accountant, in all instances, ensure that The LCE thru a written
each provisions of COA Circular No. 97-002 are strictly observed and communication noted that COA
that all CAs are fully liquidated at the end of the year. Consider circular No. 97-002 will be strictly
adopting the “no liquidation” policy to forestall accumulation of observed and all CAs will be fully
unliquidated balances. liquidated at the end of the year.
We recommend that the:
1. Municipal Treasurer and the Municipal Accountant immediately 1. The Municipal Treasurer
complete the reconciliation of their records as of December 31, 2021 commented that due to numerous
and submit a reconciliation statement thereon and take-up the task given to LRCO-1 who
necessary adjusting entries in their respective records; conducted reconciliation with the
2. Municipal Accountant (i) record the reconciling items that need Accounting Office, the office is still
adjustment of CIB and payables balances due to stale checks; and (ii) in its process of reconciling records
immediately submit the original bank statements and paid checks with the said office.(See Municipal
pertaining to the unrecorded check disbursement reported in BRS; Treasurer reply to AOM-E2022-05)
and
Page 2 of 15
 cashbooks and accounting records totaling P2,570,535.06 3. Municipal Treasurer (i) provide the Audit Team a proof that DVs,
and incomplete cashbooks contrary to Sections 63(D) ObRs and supporting documents of the unrecorded disbursements are
and 63(F) of the LTOM. already submitted to the Accounting Office, otherwise immediately
submit to the Municipal Accountant the original source documents of
the unrecorded check disbursement, after which, the unclaimed
checks which had been outstanding for over six months from date of
issue wherein the original DVs and supporting documents are still in
the custody of the treasury office and cancel these stale checks; (iii)
and strictly observe the provisions of Section 63 of the LTOM on the
maintenance of complete and updated cashbooks for all cash
accounts of all funds and reconciliation of cashbook balances with
subsidiary accounting records.
6. AOM No. E2022-06 We recommend that:

The Cash-Local Treasury account reflected significant 1. The Municipal Treasurer 1.

balance of I4,565,815.10 as of December 31, 2021 clue
to failure of the Municipal Treasurer to deposit promptly
and intact all collections with the authorized government
depository bank in violation of Section 69 of Presidential
decree No. 1445 and contrary to Section 2 of COA
Circular No.97-802 dated February 14J,1997 and Section
32 of the Manual on the NGAS for LGUs, Volume I,
thereby exposing cash to the risk of loss or misuse.
a. Deposit all collections promptly and intact with the AGDB
in compliance with Section 69 of P.D No. 1445, Section 2
of COA Circular No. 97-002 dated February 10. 1997 and
Section 32 of the MNGAS for LGUs, Volume I; and
b. Submit to the Audit Team a satisfactory written
explanation on the noted lapses in the cash management of
the Municipality
a. The Municipal treasurer provided
an explanation concerning the
collections deposit and according to
him this office will be implementing
the Deposit Pick-up Agreement with
DBP soon.(See Municipal Treasurer
reply to AOM E2022-06)
b. The Municipal Treasurer stated
that effort will be made to reconcile
to correct amount pertaining to that
Account.

7. AOM No. E2022-07 We recommend that the:

The Municipality failed to fully enforce the settlement of
audit disallowances with duly issued COA Orders of
Execution resulting to the accumulation of unsettled
balances to Pl,165,862.64 as of December 31" 2021
contrary to the provisions of Section 7.1 of COA Circular
No. 2009-006 dated September PI5, 2009. Moreover, the
accuracy of Receivables Disallowances/Charges balance
of P759.824.50 at year-end could not be ascertained due
to Iack of subsidiary ledgers while the Notice of
Settlement for settled audit disallowances totaling
P11,385.00 could not be issued due to non-submission of
proof of settlements such as Official Receipts (ORs) ant!
the corresponding Journal Entry Vouchers (JEVs].
1. Municipal Mayor (i) require the immediate settlement of audit 1. The Municipal Mayor set meeting
allowances; and (ii) enforce COEs by requiring the Municipal with the Department Heads requiring
Treasurer to withhold payment of salaries and any amount due to the immediate settlement of audit
persons liable; allowances and requiring the
2. Municipal Treasurer show proof of his compliance to the Municipal Treasurer to withhold
enforcement of COEs of the total and provide details of the total payment of salaries and any amount
amount already withheld from the liable persons; and due to persons liable.
3. Municipal Accountant (i) reconstruct and immediately submit to 2.The Municipal Treasurer explained
the Audit Team the SLs for audit disallowances totaling 759,824.50; that he had paid the amount he is
and (ii) transmit the proof of settlements of NDs to the Audit Team liable for and promised to furnish
for issuance of Notices of Settlement /Disallowance/Charge your office the details as soon as it is
(NSSDCs). complied by the Accounting Office.
(See Municipal Treasurer reply to

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8. AOM No. E2022-08
Amounts due to BIR, GSIS, Pag-IBIG and PhilHealth
were not remitted intact within the prescribed period
contrary to the provisions of Revenue Regulations No. 2-
98 dated April 17, 1998, as amended, BIR Revenue
Memorandum Circular No. 23-2007 dated March 20,
2007, Section 6 of R.A. No. 8291, Section E.4 of HDMF
Circular No. 275 dated January 22, 2010 and PhilHealth
Circular No. 000I, s. 2014. Moreover, year-end balances
included negative balances totaling P3,137,448.72 which
connotes over-remittances and/or erroneous recording of
transactions while balances totaling P136,740.09 (net)
were not supported with subsidiary schedules.
9. AOM No. E2022-09
The Municipality was not fully compliant with the
provisions of PCW-DBM-DILG-NEDA JMC No. 2013-
01 dated July 18, 2013, as amended by PCW-DBLI-
BILG-NEDA JMC No. 2016-01 dated January 12,2A16
as manifested by (a) failure to submit the GAD Plan and
Budget (GPB) for Cl'2021 to the Provincial Planning and
development Office (FPDO) and subsequently to the
Department of the Interior and Local Government
{DILG} Provincial Office for review and endorsement;
{b) failure to submit the GAD Accomplishment Report
(A-R) for CY ?021 to the DILG; (c) discrepancies
between the G,4D PPAs and amount of total GAD
budget presented in the GPE, GAD AR. and annual
budget; and (d) non-maintenance of a complete and
updated sex-disaggregated data or GAD database, thus
gender issues and concerts identified in the GPB may not
be fully addressed towards the attainment of gender
equality and women's empowerment.
10. AOM No. E2022-10
The accuracy of the year-end Real Property Tax (RPT)
and Special Education Tax (SET) Receivable balances as
well as their corresponding deferred income accounts
AOM E2022-07)
We recommend that the:
1.
1. Municipal Accountant immediately complete the reconciliation of
their records on Due to BIR, GSIS, Pag-IBIG and PhilHealth to >The Municipal Treasurer strongly
determine the cause/s of the negative /unremitted balances and stated that he is aware of the
provide subsidiary schedules for balances totaling 136,740.09 to deadlines of remittances to avoid the
facilitate remittance thereof to the concerned agencies and to incurrence of interests and penalties.
determine and record the necessary adjustments in the books; (See Municipal Treasurer reply to
2. Municipal Accountant and the Municipal Treasurer ensure that AOM E2022-02)
funds collected by the municipal government in behalf of other
government agencies are remitted to them fully and within the
prescribed due dates to avoid incurrence of interests and penalties.
We recommend that the:
1. GFPS to (i) strictly observe the prescribed timelines for GAD A. The GAD Focal Person furnished
Planning and Budgeting , as provided in PCW-DBM-DILG-NEDA a transmittal for AOM No. E2022-09
JMC No. 2013-01, as amended, to facilitate timely preparation and together with the attachment needed
submission of the GPB to the Provincial Planning and Development dated October 10,2022.
Office to ensure gender responsiveness of the GAD programs,
projects and activities; (ii) submit to the Audit Team the supporting
documents to the GAD AR and henceforth ensure that the same is
prepared and submitted within the prescribed period; and (III) provide
explanation for the differences noted between the amount of GAD
budget and GAD PPAs presented the GPB, GAD, AR and annual
budget, and
2. MPDC, with the assistance of the GFPS, establish a complete and 2. The MPDC established and
updated GAD database, and conduct gender analysis to serve as a provided an explanation on the noted
basis for addressing gender issues and concerns in GAD planning and observations stated in AOM No.
budgeting for the ensuing year. E2022-09.(See MPDC reply to AOM
E2022-09)
We recommend that the:
1. Municipal Treasurer transfer the remaining SET collections to the 1. All collections accruing to SEF
SEF depository account and henceforth, automatically deposit the have been transferred and deposited
proceeds of the additional 1% RPT accruing to the SEF depository to SEF Depository Account
Page 4 of 15
 amounting to P12,558,312.07 and P15,717,586.94,
respectively, was doubtful due to the (a) difference of
P2,935,335.69 between the RPT and SET collections
contrary to Section 223 of R.A. No. 7160, hence the
variance of P3, 159,274.87 as of year-end; and b) non-
submission of JEVs and supporting documents for
adjustments totaling P 184,863,415.26, thus precluded
the evaluation of its correctness. Moreover, the
Municipal Treasurer did not automatically release to the
Local School Board the proceeds of the additional one
percent (1%) real property tax according to The Special
Education Fund (SEF) contrary to Section 82 of the
Manual on the New Government Accounting System
(MNGAS) for LGUs, Volume I.
11. AOM No. E2022-11
Disparity of P8,072,756.60 and P6,059,171.77 in the
balances of reciprocal accounts Due from Other Funds as
of December 31, 2021 rendered these account balances
unreliable.
12. AOM No. E2022-12
The validity, legality and propriety including the
necessity of payment of salaries, allowances, bonuses
and other benefits of the Municipal Government
Assistant Department Head (MGADH) I under the Office
of the Municipal Administrator totaling P1rA28,717.95
are doubtful due to: (a) absence of legal basis on the
creation of the position; (b) reappointment of compulsory
retired employee; (c) duplication of duties and
responsibilities of the Municipal Administrator; and (d)
unavailability of funds for the said position due to
personal services (PS) limitations contrary to Section
325(a) of the Republic Act No. 7160.
13. AOM No. E2022-13
account, in compliance with Section 82 of the MNGAS for LGUs, according to the Municipal
Volume I Treasurer. (See Municipal Treasurer
2. Municipal Accountant (i) immediately submit to the Audit Team rely to AOM E2022-10)
to the Audit Team the JEVs and the supporting documents for the
adjustments made totaling 184,863,415.26 and (ii) review the related
reports to determine the causes of the variances between the RPT and
SET collections as well as of their year-end receivables balances and
adjust the affected accounts, as appropriate.
We recommend that:
1. The Municipal Accountant exert more efforts to immediately
reconcile the Due from Other Funds and Due to Other Funds accounts
in all funds, determine the cause/s of disparity in the balances and
record the necessary adjustments in the books to present the correct
balances in the financial statements.
We recommend that:
1. The Municipal Mayor and other concerned personnel render 1. The Municipal Mayor rendered a
justification on the noted observations on the appointment of the justification on the noted
Municipal Government Assistant Department Head I under the office observations on the said
of the Municipal Administrator. appointment.
2. The Municipal Mayor, thru the HRM Officer, immediately submit
authenticated copies of the following documents pertaining to the
reappointment of Mr. Manuel P. Rey:
a. Screening and Evaluation report of the HRMPSB, 2. The HRMO had submitted the
b. Updated Service Record, and authenticated documents for the
c. CSC- approved appointment as MGADDH 1 under reappointment of Mr. Rey to the
the Office of the Municipal Administrator. Office of Municipal Accountant with
its supporting documents. (See
HRMO reply to AOM E2022-12)
We recommend that the: 1.
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The budgeting process of the Municipality for CY 2021
was marred by; a) delayed submission and approval of
annual investment and development plans and budgets;
b) submission of the FY 202l Annual Budget to the
Sangguniang Panlalawigan after the budget execution
year contrary to Section 56 of the R-A. No. 7160; c)
appropriations presented in Iump sum amounts or no
detailed breakdown of PPAs; d) ordinance authorizing
supplemental budgets not in accordance, with the format
prescribed in the Budget Operations Manual for LGUs,
2016 edition and e) deficient funding source for the
portion of Supplemental Budget No. L, s-2021,
amounting to 31,693,640.59 contrary to Sections 32I and
326 of the Republic Act No. 7160
> The LCE ensure the timely
1. LCE, Sangguniang Bayan, MDDRRM and the local development submission and approval of the
council, ETDF Management Board and the Municipal Budget Officer proposed investment plans and
(MBO): (i) ensure timely submission and approval of the proposed budgets in accordance with R.A> No.
investment plans and budgets in accordance with the provisions of 7160.
R.A. No. 7160 and the guidelines of the Budget Operations Manual >October 12,2022 the Sangguniang
(BOM), 2016 Edition, on budget process as well as the forms Bayan submitted a letter containing
prescribed by the Manual; their remarks to the AOM No.
2. MBO and the Sanggunian provide explanation on the noted E2022-13 recommendation.
deficiency on funding source of 31,693,640.59 for the Supplemental >MDRRMO responded to AOM No.
Budget No. 1s-2021 E2022-13 dated Sept. 29.2022 and
3. LCE, Municipal Budget Officer and Municipal Planning and guaranteed the timely submission of
Development Coordinator indicate the object of expenditures or their investment plan in the future.
present the PPAs in detail per fund in the Annual Budget for proper 2.
utilization and monitoring of the funds; and > The MBO provided an explanation
4. Municipal Accountant and the Municipal Treasurer ensure that the on the noted deficiency. (See MBO
certification of savings and items of appropriations affected by the reply to AOM E2022-13)
changes. > The Sangguniang Bayan provided
an explanation on the noted
deficiency on funding source for the
Supplemental Budget. They
promised to seek the assistance of the
MBO to rectify the submitted
proposed Supplemental Budget No. 1
Series of 2017. (See SB reply to
AOM E2022-13)
3.
> The MBO cited the reasons on the
noted Audit recommendation. (See
MBO reply to AOM E2022- 13)
> MPDC Replied to AOM No.
E2022-13 dated Sept. 22,2022(See
MPDC reply to AOM E2022-13)
4.
> The Municipal Accountant and the
Municipal Treasurer affixed their
signature on the new form 48
prepared by the Municipal Budget
Officer for this noted
recommendation.
> The Municipal Treasurer stated
that Certification of Savings or Fund
Page 6 of 15

14. AOM No. E2022-14
The accuracy of the SCBAA for CY 2021 was doubtful
due to: (a) unsubmitted registries for Continuing
Appropriations from prior years; b) variances of Final
Budgets per audit and as reported in SCBAA; c)
unreconciled total obligations under the 5%, DRRMF
and ZAY" Development Fund (DF) per SCBAA and per
computation in audit; and d) absence of separate
registries for the infrastructure projects funded by the
20% DF contrary to Section 18 of the Manual on the
New Government Accounting System for LGUs, Volume
2.
15. AOM No. E2022-15
. The Management failed to submit (a) the quarterly and
semestral Report on the Unliquidated Cash Advances
(RUCA) and report on the Status of Unliquidated Cash
Advances (SUCA) including the subsidiary Ledgers
(SLs) for CY 2022 contrary to the provisions of COA
Circular No, 2016-005 dated December 19, 2016; and (b)
the documents pertaining to the unliquidated CAs of
accountable officers, thus hindered proper filing of
charges against them.
Sources of Realignment is prepared
and signed by the Municipal
Accountant before it was brought to
their office for the signature and he
believed that detailed breakdown of
savings and items of appropriations
affected by changes are stated
therein.
(See Municipal Treasurer AOM-
E2022-13)
We recommend that the:
1. Municipal Budget Officer (i) submit certified copies of registries
for Continuing Appropriations as of December 31,2021; (ii) strictly
comply with the requirements of Section 18 of MNGAS for LGUs,
Volume 2, and ensure that the preparation of registries, particularly
the names of projects or object of expenditures and amount of
appropriation ordinances and augmentations; and
2. Municipal Accountant and the Municipal Budget Officer (i)
review the noted variances and make necessary adjustments to correct
the total final budgets and actual amounts of the CY 2021 SCBAA;
and (ii) henceforth, strictly comply provisions of Section 10, Chapter
1 of the Manual on the New Government Accounting Systems for
LGUs, Volume 1, on the monthly reconciliation of their records on
allotment available for appropriation.
We recommend that the:
1. Municipal Accountant (i) enforce strict monitoring of grant and
liquidation of cash advances by preparing the schedules of all
receivables, unliquidated cash advances, and fund transfers pursuant
to COA Circular No. 2016-005 and COA Memorandum No. 2017-
010 (RUCA-quarterly and SUCA-semestral); (ii) immediately submit
to the Audit Team the RUCA for the 1st and 2nd quarter of CY 2022
and the SUCA including the SLs for the cash advances of officers as
of June 30, 2022; and (iii) return to the Audit Team the duly received
copies of the aforementioned demand letters; and
2. LCE, HRM Officer and the Municipal Accountant (i) submit 2.
immediately to the Audit Team the requested documents in > The HRMO resubmits all the
connection with the unliquidated CAs of AOs mentioned in Table 1.0 documents needed to the concerned
of this Memorandum; and (ii) serve written notices to all concerned offices.
accountable officers requiring immediate settlement of their
outstanding CAs and institute legal action against them, if warranted.
Page 7 of 15
16. AOM No. E2022-16
Several deficiencies were noted in the accounting and
utilization of Local Government Support Fund &GSF")
and other fund transfers from national governments such
as: (a) early termination of the programs/projects due to
LGU's non-compliance with the schedule of
implementation (b) unused balances trot yet
returned/refunded to the source agencies or Bureau of
Treasury; (c) unrecorded excessive transfer of LGU
Counterpart from GF to TF; (d) expenditure funded by
the project of Tourism Promotion Board erroneously paid
under the GF; and (e) funds received under the CY 2017
LGSF- Financial Assistance to LGUs not supported with
Disapproved list of proposed priority projects.
We recommend that the LCE:
1. thru the Municipal Engineer and the Municipal Planning and A.
Development Coordinator {MPDC), (i} ensure that future projects > The Municipal engineer will assign
funded by the NGAs are implemented within the agreed project staff Engineer intended only for all
schedule and strictly comply with the prescribed procedure and NGAs funded projects to strictly
guidelines related to implementation of the project; and (ii) apprise monitor and implement programs
the Audit Team of the action taken by the Management to the guidelines.
unfinished contract by the defaulting contractor. > The MPDC thru their letter dated
2. secure copies of MOA entered into and signed in behalf of MGEN Oct.11,2022 guaranteed that the
and all its annexes and supporting documents including confirmation future projects will be strictly
letters from source agencies indicating grant and purpose of the funds implemented within the agreed
transfer and furnish the department heads or officials in-charge schedule. (See MPDC reply to AOM
implementing the projects and the Municipal Accountant copies of E2022-16)
such documents prior to implementation to ensure that the trust funds
are utilized efficiently in accordance with the trust agreements and
implementing guidelines; and
3. thru the Municipal Accountant and the Municipal Engineer,
collect/recover from the contractor of the Local Access Road the
amount of P98,376.66 which was the portion of the advance payment
not yet recouped from the progress billings.
We also recommend that the
 Municipal Accountant carefully review the total utilization of the
trust receipts to avoid excessive refund to the source agency
and/or national treasury.
 LCE, i) thru the Municipal Accountant, review the Memoranda
of Agreement (MOA) pertaining to the unutilized balances of
completed projects/programs and communicate with the source
agencies for the immediate return thereof; and ii) direct the
MPDC and other implementing offices or focal person assigned
to the said on-going and unimplemented projects and programs
to act with dispatch on their immediate implementation to avoid
cancellation and possible refund of the funds received by the >The LCE reviewed the MOA
Municipality. pertaining to the unutilized balances
 Municipal Treasurer and the Municipal Accountant cause the of completed projects and
immediate refund of the amount of P695r289.83 from the GF to communicate with the source
TF. agencies and directed concerned
 Municipal Treasurer immediately return the amount of agencies for the immediate
P499,500.00 to the General Fund to avoid misapplication of the implementation to avoid possible
amount in the Trust Fund. problems.
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17. AOM No. E2022-17
Inventory account balances totaling P106,921,059.18 as
of December 31 202l are doubtful and unreliable due to
unrecorded consumption, utilization and distribution of
supplies and materials, which is not in keeping with
Paragraph 44 of IPSAS 12, possibly overstating all
Inventories accounts and understating the corresponding
Supplies and Materials Expense accounts at yearend.
Proof of receipt and distribution to intended beneficiaries
of the procured goods/items for COVID-19 operations in
CY2020 and 2021, totalingP77,542,543.25
 LCE immediately submit the list of proposed projects duly
approved by the DILG including the List of Due and
Demandable Accounts Payable-Advice to Debit Accounts
(LDDAP-ADA) and letter / notice of Credit from DILG as
supporting documents to the fund utilization report for the CY
2Ol7 LGSF-FA. >The Municipal Treasurer together
with the Municipal Accountant will
cause the immediate refund of the
said amount from the Trust Fund to
the General Fund.
We recommend that the:
1. Inventory Committee to conduct the physical count of all supplies 1.The Inventory Committee attached
and materials and prepare the report thereon, reconcile the results of Inventory count for the remaining
the count with available records in the Accounting and General items of the accountable Offices and
Services Offices (GSO) and submit the inventory report to the Audit promised to submit the rest before
Team. October 28,2022. (See Inventory
2. MDRRMO, MSWDO, GSO, MEEDO. MEO and other concerned Committee AOM attachment)
offices to (i) immediately submit the required 2.
distribution/consumption /Utilization/reports of inventories and proof > The MDRRMO rendered an
of receipts for the relief goods given to various beneficiaries as well explanation on the delayed report ing
as the inventory of undistributed/unissued goods/items; and (iii) of the result of distribution in
render satisfactory explanation on the delayed reporting of the result connection with the COVID-19
of distribution in connection with the COVID-19 operation of the operation. (See MDRRMO reply to
LGU and of the utilization of other supply and materials under AOM E2022-17)
various offices. > October 10,2022 the MSWDO
3. Municipal GSO (i) ensure that issuances of supplies and materials stated in their letter that they
are supported with duly signed RIS to establish accountability on the promptly submitted their justification
part of the end-users, particularly those department assigned for the on the mismanagement of the
distribution of relief goods; and (ii) submit to the Municipal program and they requested an ample
Accountant the monthly summary of supplies and materials issued time for them to re-tabulate and
duly supported by the RIS as basis for recording expenses and complete the lacking documents to
4. Municipal Accountant upon submission of the required summary be submitted. (See MSWD reply to
report and distribution list and the inventory report by the concerned AOM E2022-17)
offices make the necessary adjustments to reflect the correct balances > The GSO provided an explanation
of the inventory accounts. about the inventory of
undistributed/unissued goods/items
dated Oct. 6,2022 (See GSO reply to
AOM E2022-17)
> The MEEDO explained it thru their
letter dated October 12,2022. (See
Page 9 of 15

18 AOM No. E2022-18
The Municipality was not fully compliant with the
provisions of R.A. No. 10121 or the "The Philippine
DRRM Act of 2010" and COA Circular No.2012-002
dated September 12,20L2 as manifested by the (a) non-
transfer and non-recording of the unexpended balance of
CY 2021 QRF and DRRMF-MOOE amounting to
P3,680,755.78 to the Trust Liabilities-DRRMF account
under the Trust Fund books; (b) non-transfer of the
unexpended DRRMF for CYs 2013 to 2018 and CY
2021 totaling ?8,266,652.08 to the LDRRMF Special
Trust Fund (ST$ bank account (c) completed projects not
yet transferred to General Fund (GF) and
consumed/distributed welfare goods not yet adjusted in
the TF books overstating the Trust Liability-DRRMF
account (d) variances between the available, utilized and
unexpended balances of DRRMF presented in various
reports; and (e) medical supplies amounting to ?
897,830.00 funded by the CY 2A13-2014 STF was paid
under the GF instead of STF bank account
19 AOM No. E2022-19
Various deficiencies were noted in the utilization of the
GF Proper, DRRMF and 20o/o Development Fund for
COVID-l9 related PPAs in CY 2021 such as: (a) renting
isolation facilities from private establishments instead of
utilizing the existing government facilities, thus incurring
accommodation/rental expenses totaling P5,I46,957.00;
(b) payment of room accommodations amounting to
P753,000.00 without valid appropriations and contracts;
(c) procurement of COWD-li antigen testing kits more
than the price cap set by DOH Department Circular No.
2021-0323 and absence of technical specifications in the
Purchase Orders; (d) incomplete documentation of
purchases paid out of cash advances contrary to Section
4(6) of P.D. No. 1445; and (e) wages of Job Order
personnel amounting to P417J00.00 charged against the
MEEDO reply to AOM E2022-17)
3. The Municipal GSO submitted
their feedback dated October 6,2022
(See GSO Reply AOM E-2022-17)
We recommend that the:
1. Municipal Accountant and the Municipal Budget Officer
immediately reconcile their records on IIRRMF in coordination with
the MDRRM Officer;
2. Municipal Accountant and the Municipal Treasurer (i) cause the 2. The Municipal Treasurer will
immediate transfer of the unexpended DRRLF to the LDRRMF STF coordinate with the Municipal
bank account and (ii) return the amount of ?8971830.00 from the STF accountant to avoid misapplication of
to GF bank account to avoid misapplication of the amount in the Trust the amount in the Trust Fund. (See
Fund; Municipal Treasurer reply to AOM
3. MDRRM Officer immediately submit the proof of distribution E2022-18)
and/or consumption report of the welfare goods, which is necessary in
the adjustment of the Inventory and Trust Liability-DRRMF accounts 3. The MDRRMO Explained that
and they have submitted the consumption
4. Municipal Accountant make the necessary adjustments in the TF report which was an attachment to
books for the completed infrastructure projects and for the Vouchers to pay the suppliers as to
consumed/distributed welfare goods once the report is submitted by what is being stated on AOM E2022-
the MDRRM Officer. 18. (See MDRRMO reply to AOM
E2022-18)
We recommend that the: 1.
>The MDRRMO stated in their letter
1. Municipal Mayor, thru the MDRRMO and MHO, (i) submit dated Oct. 3,2022, the reasons why
written justification on why the LGU had restorted to contacting with the LGU had to use private hotels/inn
private hotels/inn instead of using government facilities; and (ii) in accommodating COVID patients
exercise prudence in the utilization of the available funds for COVID- instead of using government
19 response operation and consider utilizing the municipal evacuation facilities.
centers and other government-owned buildings as quarantine and (See MDRRMO reply to AOM
isolation facility for COVID-19 patients to avoid E2022-19)
Incurrence of unnecessary rental fees; >The MHO submitted a written
2. Bids and Awards Committee (BAC) (i) render justification, duly justification dated October 6,2022 for
supported with documentation, on the noted deficiences and the noted AOM Observations. (See
inconsistencies in the procurement of rental or room accommodations MHO reply to AOM E2022-19)
and COVID-19 testing kits; (ii) ensure that the bid offer or price
quotation of the supplier and Purchase Order contain detailed 2. The BAC submitted their
specification of items procured; (iii) observe due diligence in the explanations on the noted
determination of price estimates of goods and services prior to deficiencies and inconsistencies
Page 10 of 15
 20% Development Fund contrary to DBM-DOF-DILG
Joint Memorandum Circular No. I dated November
4,2020.
20 AOM No. E2022-20
Lapses were noted in the implementation of various
infrastructure projects such as: (a) non-submission of list
of all completed and on-going government projects and
those that are to be implemented during the year as
required under COA Circular No. 2013-004 dated
January3O 2013; (b) implementation of 40 projects
costing P5714281529.36 were still ongoing while 88
projects aggregating P59,658,929.19 remained
unimplemented as of December 31,2021; (c) failure of
the Municipal Engineer to take appropriate actions and
remedies against defaulting contractors contrary to
Annexes E and I of the Revised I.R.R of R.A. No. 9184;
and (d) deficient liquidated damages imposed to the
contractors.
commencing procurement; and (iv) exert all efforts to secure the most observed thru their letter dated
advantageous price for the LGU; Oct.12,2022.
3. Municipal Budget Officer (i) submit written explanation on the (See BAC reply to AOM E2022-19)
transactions paid even without valid appropriations before affixing
signature in the Obligation Request;
4. Municipal Accountant (i) thoroughly check the completeness and 3. A written explanation on the
propriety of the supporting documents of the disbursement as well as transactions paid was submitted by
the liquidations for cash advances granted; and (ii) immediately the MBO on Oct. 12,2022. (See
record in the books and submit the disbursement voucher and the MBO reply to AOM E2022-19)
supporting documents of the isolation facility rental paid amounting
to 399,400.00; and
5. Municipal Mayor, thru the Municipal Budget Officer and Local
development Council, strictly comply with the guidelines laid down
by the DBM-DOF-DILG JMC No. 1 dated November 4, 2020 on the
utilization of the 20% Development Fund. 5.
>The Municipal Budget Officer
pointed out the reasons for this
recommendation as stated in his
letter.
(See Municipal Budget officer reply
to AOM No. 19)
We recommend that the:
1. Local Chief Executive (LCE), through the Municipal Engineer, (i) The Municipal Engineer shall assign
issue termination of contract to erring contractors who, after contract project Engineer to consolidate all
time has expired, have negative slippage of ten percent (10%) or more necessary documents and
in the completion of the work pursuant to Section III-A(2) of the recommend the same for termination
Guidelines on Termination of Contracts; (ii) cause the forfeiture of of contract for all contractors that
their performance security pursuant to Section 8.5, Annex E of the have 10 % of slippage or more.
Revised IRR of RA. No. 9184; (iii) thru the BAC, consider issuing a 2. The Municipal Engineer will
Blacklisting Order in accordance with the Uniform Guidelines For submit an updated report of all
Blacklisting Of Manufacturers, Suppliers, Distributors, Contractors infrastructure project.
and Consultants provided in Appendix 17 of the said I.RR; and {iv)
provide the Audit Team s copy of the notice of termination, forfeiture 3.
of the performance security and blacklisting order duly received by
the defaulting contractor; >The MPDC thru a letter dated
2. Municipal Accountant and the Municipal Engineer submit the (i) October 10,2022 cited that a struggle
status report of all infrastructure projects of the municipality for the management and operations
supported with SWA to facilitate verification of the reported project of projects concerning infrastructure
accomplishments; and (ii) recompute the correct liquidated damages occurred due to their limited number
(LDs) and recover the uncollected LDs from concerned contractors; of personnel.( See MPDC reply to
3. Municipal Engineer and the Municipal Planning and Development AOM E2022- 20)
Page 11 of 15

21 AOM No. E2022-21
Deficiencies were noted in the procurement of the
infrastructure projects and the recording of the related
expenditures such as: (a) payment of pakyaw labor
totaling P5,046,350.$0 were paid without permit to
extract gravel and sand contrary to Section 43 of R.A.
No. 7942; (h) inclusion of construction tools and
equipment ir the material component of the project per
Program of Works {POW}; (c} procurement of fuel not
supported with POW, IAR and Fuel Consumption and
Equipment Utilization Reports; {d) projects lacked
technical documents; (e) unreconciled accounting records
and budget reports; and (ff completed projects totaling
F12,443,454.20 were not yet transferred/closed to
appropriate PPE accounts.
Coordinator (MPDC) (i) fast track the implementation of the
infrastructure projects and make sure that all projects are strictly
monitored and implemented in accordance with plans and schedules;
and (ii) for projects not implemented within the schedule, validate the
status sf the project and prepare inspection report and SWA as of the
target date of completion or contract expiry date; and
4. LCE, ME and MPDC strictly comply with the guidelines of COA
Circular No. 2013-004 regarding information and publicity of PPAs.
We recommend that the:
1. Municipal Mayor, thru the Municipal Engineer, stop the practice The Municipal Mayor thru
of allowing pakyaw Iabor for hauling of aggregates needed in the Memorandum Order instructed
project implementation; particularly the Engineering
2. Municipal Engineer {i} estimate a reasonable price for aggregates department to stop pakyaw labor in
based on the prevailing market rate; (ii) prepare the POW with the project implementation.
complete costing such that the quantity and cost of aggregates and
fuel requirement are included in the approved budget; (iii) The ME shall recommend to the local
immediately submit the fuel consumption and equipment utilization Finance Committee that all propose
reports and other lacking technical documents; {w} exclude the projects funded w/ different sources
construction tools and equipment in the project cost estimate in the should be consolidated as one to
POW and instead, request separate purchase for the tools and avoid phasing staggard
equipment needed in the implementation of projects, procurement of implementation.
which should be based on the current available tools of the MEO;
3. Municipal Accountant (i) ensure that the payment for the
procurement of fuel, oil and lubricants are supported with proof of
delivery; and (ii) immediately reclassify the completed projects to the
appropriate PPE accounts;
4. Municipal Accountant and the Municipal Budget Officer reconcile
their records to determine the correct total obligations and actual cost
incurred for each project; and
5.. Municipal Budget Officer explain the unreported obligation of
P999,343.80 in the CY 2020 SCBAA for the Construction of Fish
Port, Bgy. Corong-corong (funded by CY 2017 Continuing
Appropriations) and submit the authenticated copy of its registry.
5.The Municipal Budget Officer
explained the unreported obligation
for the Construction of Bgy. Corong-
Page 12 of 15

22 AOM No. E2022-22
". The existence, completeness and accuracy of Property,
Plant and Equipment (PPE) accounts with carrying
amount of P401,547,228.25 as of December3l, 202l
could not be ascertained due to (a) absence of physical
inventory reports duly reconciled with the property cards,
property ledger cards and Road Network Ledger Cards
contrary to Sections 114 and L24 of the Manual on the
New Government Accounting System (MNGAS) for
LGUs, Volume I and COA Circular No. 2015-008; (b)
discrepancies totaling ?13,1851199.23 between the total
additions of PPE in CY 2021 per PIE schedule and
increase of PPE account balances in the FS of CYs 2021
and 2020; (c) non-recognition of depreciation expense
totaling P4,120,891.30; and (d) unidentified PPE totaling
P8,212,421.07.
The Property Inventory Committee (PIC) failed to
complete the One-Time Cleansing of the Property, Plant
and Equipment (PPE) of the Municipality within the
three-month period as prescribed by ltem 5.2 of COA
CircularNo.2020-006,
23 AOM No. E2022-23
The operation of the economic enterprises was not
anchored 0n a s-year Business plan for each of the
existing LEEs of the Municipality; its revenue was
overestimated while obligations were incurred in excess
of the realized revenue; assets and expenses not recorded
in the LEE books amounting to P8,629,070.00 and
P10,000.00, respectively; and Job order Personnel were
assigned to collect fees.
corong Fish Port. (See Municipal
Budget reply to AOM E2022-21 )
We recommend that the:
1. Municipal Mayor (i) require the Inventory Committee to 1.
complete the undertaking of one-time cleansing of the PPE accounts The Municipal Mayor required the
of the LGU; and (ii) submit the Audit Team's requested documents in Inventory committee about the said
relation to the implementation of the one-time cleansing. recommendation,
The Inventory Committee explained
why the completion of the report did
not materialize and gave their
assurance that they will be working
together with the Municipal Assessor
and the Municipal Legal Officer to
solve the problem.
We recommend that the:
1. Municipal Mayor, thru the MEEDO, cause the preparation of the The Mayor instructed the MEEDO
5- year Business Plan for each LEE/PU in accordance with the about the said observation and
Manual on the Operations of LEEs; (ii) thru the Local Finance recommendation.
Committee And MEED Officer, project reasonable target revenue in
each LEE and implement corrective measures in case actual revenues
have negative deviations from the target/budget; and when the
LEEs/Pus income cannot fully fund their operating expenses, consider
the options provided in Item 3.4 on the DBM LBC No. 100 dated
October 1,2012;
2. Municipal Budget Officer and the Municipal Treasurer (i) ensure
that obligations are backed up by realized revenues and that cash is 2.
actually available for payment of expenditures; >The Municipal Budget Officer said
3. Municipal Accountant make necessary adjustments in the GF that Offices who has the record of the
proper and LEE books to reflect the correct financial position of each actual income should check on the
LEE/Pus; and availability of funds before payment
Page 13 of 15

AOM No. E2022-24
Contracts for the procurement of motor vehicles and
equipment totaling P17,079,460,00 were awarded to
suppliers with doubtful qualifications and eligibility,
hence there is no assurance that the Municipality has
availed the most advantageous price for the contract.
AOM No. E2022-25
The COA Technical Audit Specialist (TAS) noted
several deficiencies in the implementation of six
infrastructure projects resulting in total cost deficiencies
of P847,820.35.
4. Municipal Treasurer ensure that only properly bonded of any transaction of the Economic
regular/permanent employees are designated as collecting officers to Enterprise be made. (See reply to
safeguard the municipal government’s funds. AOM -E2022-23 of the Municipal
Budget)
>The Municipal Treasurer will be
aware of the Obligations issued are
backed up by cash that is actually
available for payment of
expenditures. (See Municipal
Treasurer reply to AOM E2022-23)
4. Municipal Treasurer ensured that
all Collecting Officers are all regular
employees and properly bonded.
(See Municipal Treasurer reply to
AOM E2022-23)
We recommend that:
1. The Municipal Mayor, thru the BAC, (i) render justification on 1.
the noted deficiencies, (ii) strictly comply with the requirements of The Mayor thru a written notice
R.A No. 9184 and other relevant laws, rules, and regulations on reminded the BAC to render
procurement; and regulations on procurement; and (iii) for all justification on the noted deficiencies
procurements, ensure that the LGU negotiate only with legally and The BAC rendered justification on
financially capable suppliers and exert all efforts to secure the most the noted deficiencies being
advantageous price for the LGU. enumerated. (See BAC reply to
AOM E2022-24)
We recommend that the:
1. Municipal Mayor, thru the Municipal Engineer, require all the 1. The Municipal Mayor informed
concerned contractors of the abovementioned projects to (i) repair the the Municipal Engineer to require all
defects and finish the unperformed works noted by the COA the concerned contractors of the
Technical Audit Specialists or deduct the amount of the cost projects mentioned.
deficiencies from any money claim or retention fee due to them or The Municipal Engineer already
other securities posted by them; and imposed liquidated damages and
2. Municipal Engineer (i) render a satisfactory written explanation some delayed projects and made
for the differences noted in the contract amount, ABC and COA cost some contractors to repair defects
estimated and (ii) submit the revised bar chart and S-curve reflecting projects that are covered by the
updated planned and actual physical accomplishment on a monthly retention.
Page 14 of 15
 basis (except for Road concreting of Bgy. Pasadena). Approved
Quality Control Program (QCP) including all Material Test Reports
of these projects for further review and evaluation of the COA TAS.

Submitted by:

EDNA GACOT-LIM
Municipal Mayor

Page 15 of 15