Republic of the Philippines

COMMISSION ON AUDIT
Office of the Supervising Auditor
LGS – Surigao del Sur
Tandag City

April 22, 2020

ATTY. FELIX M. BASALLAJE, JR.

Director III
OIC-Regional Director
Commission on Audit
Regional Office No. XIII
Butuan City

Sir:

In compliance with Section 2, Article IX-D of the Philippine Constitution and

pertinent Sections of Presidential Decree No. 1445, we conducted a financial and
compliance and value for money audit on the accounts and operations of the Municipality
of Cantilan for the year ended December 31, 2019.

The audit was conducted to ascertain the fairness of presentation of the financial
statements, the propriety of financial transactions and the degree of management’s
compliance with rules and regulations. It was also made to determine the extent of
implementation of prior year’s audit recommendations.

Our report consists of four (4) parts, namely, Part I – Audited Financial
Statements, Part II – Observations and Recommendations, Part III – Status of
Implementation of Prior Year’s Audit Recommendations, and Part IV – Annexes. The
observations and recommendations were communicated to the management through
Audit Observation Memorandum (AOM) and discussed with concerned management
officials and staff in an exit conference conducted on March 13, 2020. Their comments
are included in the report, where appropriate.

Except of the effects of any adjustments that may be made on the Property, Plant
and Equipment accounts of the LGU as discussed in Part II of this report, there is
reasonable assurance that the financial statements are free from material misstatements
and are prepared in conformity with the Philippine Public Sector Accounting Standards.

Our audit was conducted in accordance with the Philippine Public Sector
Standards on Auditing (PPSSA) and we believe that the audit evidence we have obtained
provide a reasonable bases for our opinion.
 The audit performed by the Audit Team on the following audit areas are
incorporated in the Report and discussed in the corresponding part, as indicated
hereunder:
Audit Area Discussed in
1. Construction in Progress Finding No. 1, Page 30
2. Annual Budget Finding No. 2, Page 32
3. Business Tax Finding No. 3, Page 34
4. Procurement Finding No. 4, Page 37
5. Contracts Finding No. 5, Page 40
6. LDRRMF Finding No. 6, Page 42
7. Fund Transfers Finding No. 7, Page 45
8. BIR Remittance Finding No. 8, Page 47
9. Lacking DVs and Journals Finding No. 9, Page 50
10. One Cantilan Finding No. 10, Page 52
11. 20% EDF Finding No. 11, Page 60
12. Family Day Finding No. 12, Page 62

The report and working papers were received by this office from the Audit Team
Leader on February 28, 2020.

Very truly yours,

GLEN B. CAMBRAY
State Auditor V
Supervising Auditor
 Republic of the Philippines
COMMISSION ON AUDIT
LGS – Province of Surigao del Sur
Audit Team R13-04
Cagwait, Surigao del Sur

February 27, 2020

ATTY. FELIX M. BASALLAJE, JR.

Regional Director
Commission on Audit
Regional Office No. XIII
Butuan City

Thru: GLEN B. CAMBRAY

OIC-Supervising Auditor
Province of Surigao del Sur

Sir:

In compliance with Section 2, Article IX-D of the Philippine Constitution and

pertinent Sections of Presidential Decree No. 1445, we conducted a financial and
compliance and value for money audit on the accounts and operations of the Municipality
of Cantilan, Province of Surigao del Sur for the year ended December 31, 2019.

The audit was conducted to ascertain the propriety of financial transactions and
compliance of the agency 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. Further, our audit was conducted in accordance
with Philippine Public Sector Standards on Auditing and we believe that it provides
reasonable basis for the results of the audit.

Our report consists of four (4) parts: Part I contains the Audited Financial
Statements, Part II Observations and Recommendations, which were communicated to the
Management through Audit Observation Memorandum. Part III – contains the Status of
Implementation of Prior Year’s Audit Recommendations, and Part IV – Annexes.

We express a qualified opinion on the fairness of the presentation of the financial

statements of the Municipality of Cantilan.

Very truly yours,

CHERYL C. DIME
State Auditor IV
Audit Team Leader