EXECUTIVE SUMMARY

INTRODUCTION

The municipality of TALIBON, Bohol was originally created in 1850. It has a land
area of 22,400 hectares. It is politically divided into 25 barangays (17 mainland and 8
island) with approximately 61,373 population based on CY 2010 census.

The Local Government Unit (LGU) of Talibon derives its mandates from Republic
Act No. 7160, known as the Local Government Code of 1991. The code empowers LGUs
to exercise the powers expressly granted, those necessarily implied there from, as well as
powers necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare.

Within their respective territorial jurisdictions, local government units shall ensure
and support, among other things, the preservation and enrichment of culture, promote
health and safety, enhance the right of the people to a balanced ecology, encourage and
support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants.

FINANCIAL HIGHLIGHTS

Pursuant to Article 3(D) of the Rules and Regulations Implementing the Local
Government Code of 1992, every LGU shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate or incidental for
its efficient and effective governance, and those which are essential to the promotion of the
general welfare.

For the achievement of general, moral, social and economic development of the
municipality, the municipal officials had laid out their priority projects and programs of
activities for calendar year 2019.

Revenues of the municipality were derived from the Internal Revenue Allotment
from the national government, real property taxes, municipal business licenses, receipts
from public market, utilities, waterworks and other economic enterprises, permits, rentals
and other charges. Interest from bank deposits also formed part of the total income.

During the year, the LGU generated a total income of ₱241,074,873.24 which
decreased by 15.74% from the previous year’s ₱286,100,972.10. Although, the revenues
were mainly sourced out from the national government’s Internal Revenue Allotment
(IRA) amounting to ₱165,662,526.00 or an increase of 8.72% from previous year’s
P152,380,286.00, the reason for the decrease in income was mainly attributable to the
Transfers, Assistance and Subsidy to and from NGAs, LGUs and other funds which had a
net decrease of P16,694,663.32 in the current year compared to the net increase of

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P22,389,816.02 in the previous year. Graphical presentation of the comparative Statement
of Financial Performance for the calendar years 2018 and 2019 is shown below:

Statement of Financial Performance

(with Comparative Figures of CY 2018)
350,000,000.00
300,000,000.00
250,000,000.00
200,000,000.00
In Pesos

150,000,000.00
100,000,000.00
50,000,000.00
0.00
Total Income Total Expenses Net Income
2019 241,074,873.24 225,501,282.86 15,573,590.38
2018 286,100,972.10 233,311,570.16 52,789,401.94

Meanwhile, as of year-end the LGU showed that significant components of the total
assets amounting to a total of ₱582,457,861.39 encompasses the Property, Plant, and
Equipment (PPE) and cash and cash equivalent accounts which are 70.54% and 27.55%,
respectively. It had an increase of 5.94% compared to the previous year’s P549,804,976.86.
The total liabilities amounted to ₱124,085,964.24. It had an increase of 16.48% compared
to the previous year’s P106,531,733.23. The largest part of the total liabilities pertains to
Inter-Agency Payables amounting to ₱49,026,823.43 classified as current account which
covers 39.51% of the total liabilities. Overall, the resulting Government Equity increased
by 3.41% in the current year. Comparative analysis of the Statement of Financial Position
for the calendar years 2018 and 2019 is shown below:

Statement of Financial Position

(with Comparative Figures of CY 2018)
700,000,000.00
600,000,000.00
500,000,000.00
400,000,000.00
In Pesos

300,000,000.00
200,000,000.00
100,000,000.00
0.00
Assets Liabilities Equity
2019 582,457,861.39 124,085,964.24 458,371,897.15
2018 549,804,976.86 106,531,733.23 443,273,243.63

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SCOPE OF AUDIT

An audit was conducted on the accounts and operations of the Municipality of

Talibon, Bohol for calendar year ended December 31, 2019. The audit consisted of review
of operating procedures; interview with concerned government officials and employees;
verification, reconciliation and analysis of accounts, post audit, validation of projects, and
such other procedures considered necessary. It was aimed at ascertaining the propriety of
disbursements and reliability of financial report and determining whether the agency’s
operations had been conducted in accordance with laws, rules and regulations.

AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

We rendered an unmodified opinion on the fairness of presentation of the financial

statements of the Municipality of Talibon for the calendar year 2019.

SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS

The following are the significant findings and corresponding recommendations:

1. A total of 39 days of Absence Without Official Leave (AWOL) were observed in the
DTRs of Mr. Marino Timon from January-June 2019 in violation to the Civil Service
Commission Memorandum Circular No. 13, s. 2017 and no appropriate action was
taken to the disadvantage of the municipality.

We recommend the HRMO Head and Municipal Mayor to enforce appropriate action
on the issue in consonance with the above-mentioned Civil Service Rules and
Regulations. Further, appropriately deduct from his salary the unrecognized absences
he had incurred for January-June 2019.

2. The Agency did not procure their common-use supplies and materials for the 1st Quarter
of 2019 amounting to P382,242.00 from the Procurement Service of the Department of
Budget and Management (PS-DBM), contrary to the provisions of Section 53(e) of RA
9184, thus, hindered the procuring entity from availing the easiest and most economical
way of procurement process.

We recommend the management to comply with the requirements of Section 53(e) of

RA 9184 and Section 4 of the Administrative Code No. 17, series of 2011 as well as
paragraph 1.1 of DBM Circular Letter No. 2011-6 in the procurement of Common-Use
Supplies from PS-DBM. If the items to procured are not physically available or falls
under the conditions that it is inefficient, impractical and uneconomical, then the
Certificate of Non-Availability of Stocks (CNAS) must be attached.

3. Seven (7) Infrastructure Projects of the Municipality with Approved Budget of

Contracts totaling P53,501,167.96 were not completed according to its scheduled target
date resulting in delays from 98 to 334 days behind, thus, depriving the intended users
of the benefits and comforts that are expected to be derived from their completion.

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 We recommend the management to review the reasons behind the contractor’s failure
to accomplish the said projects within the scheduled time and submit justification letter.
Further, we recommend that management act on the appropriate measures in the non-
completion of the mentioned projects such as but not limited to forfeiture of
performance security, imposition of liquidated damages or termination of contract as
warranted.

SUMMARY OF NS, ND & NC ISSUED DURING THE YEAR

There were two (2) Notice of Disallowance (ND), no Notice of Suspension (NS)
and no Notice of Charge (NC) issued during the year. As of December 31, 2019, the total
unsettled audit disallowances had a book balance of ₱2,260,482.08 as shown below:

Beginning This Period Ending

Balance January 1 to December 31, Balance
(As of 2019 (As of
December 31, Issuance Settlement December 31,
2018) 2019)
Notice of Suspension ₱ - - - ₱ -
Notice of 1,517,186.38 743,295.70 - 2,260,482.08
Disallowance
Notice of Charge - - - -
Total ₱ 1,517,186.38 743,295.70 - ₱ 2,260,482.08

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT

RECOMMENDATIONS

Of the sixteen (16) audit recommendations embodied in the previous Annual Audit
Reports (14 – AAR 2018; 2 – AAR 2017), twelve (12) were fully implemented, three (3)
were partially implemented, and one (1) was not implemented by management during the
year.

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