Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. VIII

AUDIT REPORT

ON

BARANGAY CAULISIHAN
(Barangay)

INOPACAN
(Municipality)

LEYTE
(Province)

For the Years Ended December 31, 2020 to December 31, 2022
 REPUBLIC OF THE PHILIPPINES
COMMISSION ON AUDIT
REGIONAL OFFICE NO. VIII
LGAS C – Leyte II and Biliran Province
Provincial Satellite Auditing Office (PSAO)
Baybay City, Leyte

July 17, 2023

HON. ROBELIO A. SIMPRON

Punong Barangay
Barangay Caulisihan
Inopacan, Leyte

Dear Punong Barangay Austero:

We are pleased to transmit the report of our Auditor on the results of his audit on
the accounts and operations of Barangay Caulisihan, Inopacan, Leyte, for the years ended
December 31, 2020, 2021 and December 2022 pursuant to Section 2, Article IX-D of the
Constitution of the Philippines, and Section 43(2) of Presidential Decree (PD) No. 1445,
otherwise known as the Government Auditing Code of the Philippines.

The audit was conducted to ascertain the propriety of financial transactions and
compliance of the barangay to prescribed rules and regulations. It was also made to
ascertain the accuracy of the financial records and reports, as well as the fairness of the
presentation of the financial statements.

The Auditor render a qualified opinion on the fairness of the presentation of the
financial statements due to the audit exceptions noted as indicated in the Independent
Auditor’s Report.

We request that the recommendations contained in Part II and those which remain
unimplemented in Part III of the attached report be acted upon immediately. We will
appreciate being informed of the action(s) taken thereon by submitting the duly
accomplished Agency Action Plan and Status of Implementation report.
 We acknowledge the cooperation and support extended to the Audit Team during
the audit by the officials and staff of Barangay Caulisihan and the Municipal
Accountant’s Office of Inopacan, Leyte.

Very truly yours,

For the Commission On Audit

By:

SANTIAGO P. SEÑASE
State Auditor IV
OIC-Supervising Auditor

Copy furnished:

The Honorable Mayor, Inopacan, Leyte

The Sangguniang Bayan, Inopacan. Leyte
The Regional Director, COA, Region VIII, Candahug, Palo, Leyte
 Barangay Caulisihan
Municipality of Inopacan
Province of Leyte

AGENCY ACTION PLAN and STATUS OF IMPLEMENTATION

Audit Observations and Recommendations
For Calendar Year 2022 and Prior Years
As of ________________

Agency Action Plan Reason

Target for
Action
Implementation Status of Partial /
Audit Persons Taken /
Audit Date Imple Delay /
Ref Recommend- Action / Dept. Action
Observations ment- Non-
ations Plan Responsi To Be
ation Implem
-ble From To Taken
ent-
ation

Agency Signing Officer: Date __________________

________________________________
Punong Barangay

Note: Status of Implementation may either be (a) Fully Implemented, (b) On-going, (c) Not Implemented,
(d) Partially Implemented, or (e) Delayed
 EXECUTIVE SUMMARY

Introduction

Barangay Caulisihan is an upland barangay of Inopacan located 58 kilometers

from the town itself. It has inhabited by 348 people from 89 household. It has total land
area of 1,536 hectares with a population density of 15.3 hectares or 150/10 hectares. It
main source of livelihood is agricultural/farming.

An audit was conducted on the accounts and operations of Barangay Caulisihan,

Inopacan, Leyte, for CY 2020, CY 2021, and CY 2022 with particular emphasis on cash
and property, plant and equipment accounts, utilization of the 20% Development Fund,
Barangay DRRM Fund and fund transfers and compliance with laws and regulations.

The audit was conducted in accordance with laws and applicable generally
accepted auditing standards. The audit included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statements presentation. Verification, analysis of
accounts, and such other procedures considered necessary were conducted by the team
during the audit.

Financial Highlights

The barangay’s assets, liabilities and equity as of December 31, 2022 and income
and expenses, in comparison with that in CYs 2020 and 2021, are as follows:

Account 2022 2021 2020

Assets 4,513,016.48 3,770,790.71 2,912,061.22
Liabilities 166,557.34 166,917.18 204,434.43
Equity 4,346,459.14 3,603,873.53 2,707,626.79
Income 2,257,261.65 1,654,795.00 1,557,405.00
Expenses 1,058,946.57 832,181.26 993,891.80

Appropriations, obligations and the remaining balances for calendar year 2022 in
comparison with CYs 2021 and 2020 are tabulated hereunder:

Particulars 2022 2021 2020

Appropriations 2,257,261.65 1,654,795.00 1,557,405.00
Allotments 2,257,261.65 1,654,795.00 1,557,405.00
Obligations 991520.13 832,181.26 993,891.80
Balance 1,265,741.52 822,613.74 563,513.20
Funds Received from Other Agencies
NGAs
LGUs
Independent Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the accompanying financial

statements of the Barangay Caulisihan, Inopacan, Leyte as of December 31, 2022 due to
the exceptions as stated in the Independent Auditor’s Report and as discussed in Part II of
the report.

Summary of Significant Observations and Recommendations:

In addition to the exceptions cited above, the significant audit observations with
the corresponding recommendations were as follows:

1. The disclosure in the Notes to Financial Statements pertaining to the

LDRRMF lacks the necessary details and not in the prescribed format
provided in COA Circular No. 2012-002 dated September 12, 2012, thus
significant information of value to users of financial statements was not
provided.

We recommended that the Barangay Bookkeeper and Municipal Accountant

disclose in the succeeding Notes to Financial Statements balances of the
LDRRFM using the format provided in annex D of COA Circular 2012-002.

2. Prior year’s unexpended DRRMF were not transferred to the Special Trust
Fund nor was included in the LDRRMF Investment Plan for CYs 2020, 2021,
and 2022, contrary to Sections 4.4 and 5.1.2 of COA Circular 2012-002, thus,
the funds were left idle in the bank and the objectives of providing the fund
for its purpose may not have been attained.

We recommended that the Barangay Kagawad who is the Chairman of the

Committee on Appropriation (CCA), provide breakdown of the ₱448,250.53
BRRM Fund unexpended balance as of December 31, 2022 which should only
include the unexpended balances for the past 5 years.

We also recommended that the Municipal Accountant thru her Designated

Bookkeeper record the prior year’s unused BDRRM Fund as Trust Liabilities
under Special Trust Fund, based on the amount provided by the CCA.

Further, we recommended that the Punong Barangay, as Chairman of the

LDRRM Council, identify the project/s to be funded from the unexpended
BDRRM Fund of previous years, incorporate the same in the LDRRMF
Investment Plan and implement the project/s to fully equip the Barangay and its
residents in times of disasters.
3. Of the total accumulated BDRRMF Mitigation Fund of ₱188,851.60 for CY
2020, 2021 and 2022, only 10.59% or ₱20,001.00 were utilized due to non-
implementation of the identified projects in BDRMFIP, contrary to DILG
Memorandum Circular No. 2012-73, thereby limiting the readiness of the
Barangay to safeguard its constituents in times of calamity.

We recommend that the Punong Barangay and the Barangay Disaster Risk
Reduction Management Officer:

a. Monitor and evaluate the Programs/Projects/Activities incorporated in the

BDRRMFIP to avoid duplication of programs and make room to projects
that can address the current state of calamity or any calamity that may
possibly arise. Revise the Plan, if necessary, and still indicate specific
timeframes;

b. Utilize the current year’s 5% LDRRM Fund in accord with the approved
BDRRM Investment Plan to ensure that their utilizations are well-planned
and duly authorized by the BDRRM Council; and

c. Implement the projects, programs and activities (PPAs) identified in the

BDRRMF Investment Plan during the year to ensure full utilization of the
BDRRM Fund.

4. Only ₱15,200.00 or 1.26% of the ₱1,199,219.78 continuing and current

appropriations of the 20% Development Fund for CYs 2019 to 2021 was
utilized, hence, optimal utilization of the fund was not achieved and the
constituents were deprived from enjoying its benefits.

We recommended that the Punong Barangay implement all the projects

appropriated under 20% Development Fund so that funds are optimally utilized to
help achieve the desirable socio-economic development and environmental
outcomes of the Barangay.

5. Programs and activities to address the concerns of Senior Citizens and

Persons with Disabilities (PWDs) were not implemented, thus the Barangay
was not able to support the needs of the elderly and person with disabilities
in their locality.

We recommended that the Punong Barangay include in its annual programs,

activities that will benefit the well-being of Elderly Persons and PWDs in the
Barangay, the cost of which should be at least one percent (1%) of their respective
budget and ensure its implementation.
Summary of Total Suspensions, Disallowances and Charges

The Barangay has no unsettled suspension, disallowance and charges as of

December 31, 2022.

Status of Implementation of Prior Years’ Unimplemented Audit Recommendations

Of the 18 audit recommendations contained in the CY 2017-2019 and prior years’

Audit Report on Barangay, 14 were fully implemented while 11 remained not
implemented.
 TABLE OF CONTENTS

Page
No.
PART I - Audited Financial Statements

Independent Auditor’s Report 1

Statement of Management’s Responsibility for 3
Financial Statements
Statement of Financial Position 4
Statement of Changes in Net Assets/Equity 6
Statement of Financial Performance 7
Statement of Cash Flows 8
Statement of Comparison of Budget and Actual Amounts 11
Notes to Combined Financial Statements 16

PART II - Audit Observations and Recommendations 21

PART III - Status of Implementation of Prior Years’ Audit

Recommendations 36
 Republic of the Philippines
COMMISSION ON AUDIT
Regional Office No. VIII
Candahug, Palo, Leyte

INDEPENDENT AUDITOR’S REPORT

Hon. Rogelio A. Simpron

Punong Barangay
Barangay Caulisihan
Inopacan, Leyte

Qualified Opinion

We have audited the financial statements of Barangay Caulisihan, Inopacan, Leyte which
comprise the Statement of Financial Position as of December 31, 2020, December 31,
2021 and December 2022 and the Statements of Financial Performance, Statement of
Changes in Net Assets/Equity, Statement of Cash Flows and Statement of Comparison of
Budget and Actual Amounts for the years then ended, and notes to the financial
statements including a summary of significant accounting policies.

Basis for Qualified Opinion

The data in the Report on Inventory of Property and Equipment and Property and
Equipment Card were incomplete, thus reliability and accuracy of the Property, Plant and
Equipment account with carrying balance of ₱889,551.90 cannot be confirmed. And, the
distribution of various relief goods to the families/household affected by calamities
charged to the Local Disaster Risk Reduction Management Fund amounting to
₱44,267.98 were erroneously recorded as Food Supplies Expense instead of Welfare
Goods for Distribution upon initial recording and Welfare Goods Expense upon
distribution, thus, the propriety of the program could not be ascertained while the
accounts Welfare Goods Expense and Food Supplies Expense were misstated as at year
end.

We conducted our audit in accordance with the International Public Sector Standards of
Auditing (IPSSA). Our responsibility under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the agency in accordance with the ethical requirements that are
relevant to our audit of the financial statements, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.

1
Responsibilities of Management and those Charged with Governance for the Financial
Statements

Management is responsible for the preparation and fair presentation of these financial
statements in accordance with generally accepted accounting principles and for such
internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or
error.

Those charged with governance are responsible for overseeing the barangay’s financial
reporting process.

Auditor’s Responsibilities for the Audit of Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free of material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will
always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.

For the Commission On Audit

By:

MA. SHIELA T. ELMIDO

State Auditor II
OIC- Audit Team Leader

July 17, 2023

2
3
 Republic of the Philippines
Barangay Caulisihan
Inopacan, Leyte
Combined Statement of Financial Position
As at December 31, 2022
(With the Comparative Figures for CY 2020 & 2021)

2022 2021 2020

ASSETS
CURRENT ASSETS
Cash and Cash 3,613 2,243 1,408
Equivalents ,254.36 ,570.60 ,161.11
Investments
RECEIVABLES
10 7 10
Receivables
,210.22 ,751.22 ,210.22
Inventories
Prepayments and
Deferred Charges - - -
3,623 2,251 1,418
Total Current Assets
,464.58 ,321.82 ,371.33
NON-CURRENT ASSETS
Investments
Receivables
Investment Property
Property, Plant and 889 1,517 1,493
Equipment ,551.90 ,009.89 ,689.89
Biological Assets
Intangible Assets - - -
Total Non-Current 889 1,519 1,493
Assets ,551.90 ,468.89 ,689.89
4,513 3,770 2,912
TOTAL ASSETS
,016.48 ,790.71 ,061.22

LIABILITIES
CURRENT LIABILITIES
162 162 177
Financial Liabilities
,159.00 ,159.00 ,057.00
Inter-Agency Payables 4,398.34 4,758.18 27,377.43

4
 Intra-Agency Payables
Trust Liabilities
Deferred
Credits/Unearned Income
Total Current 166 166 204
Liabilities ,557.34 ,917.18 ,434.43
NON-CURRENT LIABILITIES
Financial Liabilities
Other Payables
Total Non-Current
Liabilities - - -
166 166 204
TOTAL LIABILITIES
,557.34 ,917.18 ,434.43
NET ASSETS/EQUITY
Total Net Assets/Equity 4,346,459.14 3,603,873.53 2,707,626.79
TOTAL LIABILITIES AND 4,513 3,770 2,912
EQUITY ,016.48 ,790.71 ,061.22

5
 Republic of the Philippines
Province of Leyte
Municipality of Inopacan
Barangay CAULISIHAN
Combined Statement of Changes in Net Asses/ Equity
For the Year Ended December 31, 2022
(With Comparative Figures for CY 2020 and 2021)

Accumulated Accumulated Accumulated

Surpluses/(Deficits) Surpluses/(Deficits) Surpluses/(Deficits)
2021 2020 2019
Balance at January 1, 2022 3,603,873.53 2,707,626.79 2,144,113.59
Add (Deduct)
Change in Accounting
Policy
Prior Period Errors
Restated Balance 3,603,873.53 2,707,626.79 2,144,113.59
Add (Deduct) Changes in net
assets/equity during the year
Adjustment of net revenue
recognized directly in net
assets/equity ( 397,023.32) 73,633.00
Surplus (Deficit) for the period 1,139,608.93 822,613.74 563,513.20
Total recognized revenue
and expenses for the period 742,585.61 896,246.74 563,513.20
Balance at December 31, 4,346,459.14
2022 3,603,873.53 2,707,626.79

6
 Republic of the Philippines
Province of Leyte
Municipality of Inopacan
Barangay CAULISIHAN
Combined Statement of Financial Performance
For the Year Ended December 31, 2022
(With Comparative Figures for CY 2020 and 2021)

REVENUE 2022 2021 2020

Tax Revenue 2,811.65 - -
Share from Internal Revenue 2, 1,652, 1,544,400.0
Collections (IRA) 235,580.00 185.00 0
Other Share from National
Taxes
Service and Business Income
Shares, Grants and Donations
Gains
Other Income 18,870.00 2,610.00 13,005.00
1,557,405.0
Total Revenue 2,257,261.65 1,654,795.00 0

Less: Current Operation

Expenses
756, 626,201.3
Personal Services 878,875.89 648.72 0
Maintenance and Other 75, 367,690.5
Operating Expenses 112,644.24 532.54 0
Financial Expenses
Total Direct Costs
Non- Cash Expenses 126,132.59 - -
Current Operating Expenses 1,117,652.72 832,181.26 993,891.80
Surplus(Deficit) from Current 1, 822, 563,513.2
Operation 139,608.93 613.74 0
Add (Deduct) :
Total Transfers, Assistance
and Subsidy from -
Total Transfers, Assistance
and Subsidy to - -
Surplus (Deficit) for the period 1,139,608.93 822,613.74 563,513.20

7
 Total Gains
Net Other Non- Operating
Income/(Losses) - - -
Surplus(Deficit) for the period 1,139,608.93 822,613.74 563,513.20

8
 Republic of the Philippines
Province of Leyte
Municipality of Inopacan
BARANGAY CAULISIHAN

STATEMENT OF CONDENSED CASH FLOWS

For the Period Ended December 31, 2022
(With the Comparative Figures for CY 2020&2021)

GENERAL FUND - 100

Note 2022 2021 2020

Cash Flows from Operating
Activities
Cash Inflows
Collection from taxpayers 2,811.65
Share from Internal Revenue 1,652,1 1,54
Allotment 2,235,580.00 85.00 4,400.00
Receipts from business/service 2,6 1
income 18,870.00 10.00 3,005.00
Interest Income
Dividend Income
Other Receipts 104,000.00 36,115.75 63,688.10
Total Cash Inflows 2,361,261.65 1,690,910.75 1,621,093.10
Cash Outflows
Payment of expenses
Payments to suppliers and 75,5 99
creditors 112,702.00 32.54 3,891.80
Payments to employees 878,875.89 756,648.72 626,201.30
Interest Expense
Other Expenses
Total Cash Outflows 991,577.89 832,181.26 1,620,093.10
Net Cash Flows from Operating 1,369,683.76 858,729.49 1,000.00
Activities
Cash Flows from Investing
Activities
Cash Inflows

9
 Proceeds from Sale of
Investment Property
Proceeds from Sale/Disposal
of Property, Plant and
Equipment
Proceeds from Sale of Non-
Current Investments
Collection of Principal on
loans to other entities
Total Cash Inflows - -
Cash Outflows
Purchase/Construction of
Investment Property
Purchase/Construction of 23,3
Property, Plant and Equipment 20.00
Investment
Purchase of Bearer Biological
Assets
Purchase of Intangible Assets
Grant of Loans
Total Cash Outflows - 23,320.00
Net Cash Flows from Investing (23,320.00
Activities - )
Cash Flows from Financing
Activities
Cash Inflows
Proceeds from Issuance of
Bonds
Proceeds from Loans
Total Cash Inflows -
Cash Outflows
Payment of Long-Term
Liabilities
Retirement/Redemption of debt
securities
Payment of loan amortization
Total Cash Outflows -
Net Cash Flows from Financing
Activities -
Total Cash Provided by
Operating, Investing and

10
 Financing Activities 1,369,683.76 835,409.49 1,000.00
Add: Cash at the Beginning of 2,243,570.60 1,408,161.11 1,407,161.11
the year
Cash Balance at the End of the 3,613,254.36 2,243,570.60 1,408,161.11
Year

11
 Republic of the Philippines
PROVINCE OF LEYTE
Municipality of Inopacan
Barangay Caulisihan

Statement of Comparison of Budget and Actual Amounts

For the Year Ended December 31, 2022
(In thousands of Pesos)

Difference
Original Actual Difference
Budgeted Amounts
No and Final Amounts Final Budget
Particulars
tes Budget and Actual

Original Final
Revenue
A
. Local Source
1
. Tax Revenue
a
. Tax Revenue-Property 1,000.00 1,000.00 - 2,811.65 1,811.65
b Tax Revenue-Goods and
. Services
c
. Other Local Taxes

Total Tax Revenue 1,000.00 1,000.00 - 2,811.65 1,811.65

2
. Non-Tax Revenue
a
. Service Income
b
. Business Income
c Other Income and 3
. Reciepts 7,000.00 37,000.00 - 18,870.00 (18,130.00)
3
Total Non-Tax Revenue 7,000.00 37,000.00 - 18,870.00 (18,130.00)
B
. External Sources
1 Share from the National 2,00 2, 2,2 2
. Internal Revenue 0,000.00 000,000.00 35,580.00 35,580.00
2
. Share from GOCCs
3 Other Shares from
. National Tax
a
. Share from Ecozone
b Share from EVAT

12
 Difference
Original Actual Difference
Budgeted Amounts
No and Final Amounts Final Budget
Particulars
tes Budget and Actual

Original Final
.
C Share from National
. Wealth
d Share from Tobacco
. Excise Tax
4
. Other Receipts
a
. Grants and Donations
b
. Other Subsidy Income
5
. Inter-Local Transfer
6 Capital/ Investment
. Receipts
a
. Sale of Capital Assets
b
. Sale of Capital Assets
c Proceeds from Collections
. Loans
C Receipts from
. Borrowings
Total Revenues and 2,03 2, 2,2 2
Receipts Expenditures 8,000.00 038,000.00 - 57,261.65 19,261.65
General Public Services
81 7
Personnel Services 8,260.00 818,260.00 - 53,375.89 64,884.11
Maintenance and Other 41 1 2
Operating Expenses 4,040.00 414,040.00 - 41,834.24 72,205.76

Capital Outlay - - - -
Education
Personnel Services
Maintenance and Other
Operating Expenses
Capital Outlay
Health, nutrition and
Population Control
Personnel Services
Maintenance and Other
Operating Expenses
Capital Outlay
Labor and Employment

13
 Difference
Original Actual Difference
Budgeted Amounts
No and Final Amounts Final Budget
Particulars
tes Budget and Actual

Original Final
Personnel Services
Maintenance and Other
Operating Expenses
Capital Outlay
Housing and Community
Development
Personnel Services
Maintenance and Other
Operating Expenses
Capital Outlay
Social Services and Social
Welfare
Personnel Services
Maintenance and Other
Operating Expenses
Capital Outlay
Economic Services
Personnel Services
Maintenance and Other
Operating Expenses
Capital Outlay
Other Purposes:
Debt Service
Financial Expenses
Amortization
10 1
LDRRMF 1,900.00 101,900.00 - 01,900.00
Maintenance and Other
Operating Expenses
Capital Outlay
40 4
20% Development Fund 0,000.00 400,000.00 - 00,000.00
Maintenance and Other
Operating Expenses
Capital Outlay
Share from National Wealth
Maintenance and Other
Operating Expenses
Capital Outlay
Allocation for Senior Citizens
and PWD
Maintenance and Other

14
 Difference
Original Actual Difference
Budgeted Amounts
No and Final Amounts Final Budget
Particulars
tes Budget and Actual

Original Final
Operating Expenses
Capital Outlay
Others
Personnel Services
Maintenance and Other
Operating Expenses
Capital Outlay
Continuing
Appropriations(Capital
Outlay)
General Public Services
Education
Health, Nutrition and
Population Control
Labor and Employment
Housing and Community
Development
Social Services and Social
Welfare
Economic Services
1,73 1, 8 8
Total 4,200.00 734,200.00 - 95,210.13 38,989.87
Surplus (Deficit) for the 1,73 1,3 (
period 4,200.00 303,800.00 - 62,051.52 619,728.22)

15
 Republic of the Philippines
Province of Leyte
MUNICIPALITY OF INOPACAN
Barangay Caulisihan
-o0o-

NOTES TO FINANCIAL STATEMENTS

I- General/Agency Profile
> Barangay Caulisihan is an upland barangay of Inopacan located 58
kilometers from the town itself. It has inhabited by 348 people from 89
household. It has total land area of 1,536 hectares with a population density of
15.3 hectares or 150/10 hectares. It main source of livelihood is
agricultural/farming.

Basis of Financial Statement

II -
Presentation
> The financial statements have been perpared in accordance with the
Generally Accepted State Accounting Principles and Standards.

III
Significant Accounting Policies
-
> The agency uses the accrual basis of Accounting. All expenses incurred
are reported in the Financial Statements in the period to which they relate.
Income is on accrual basis except for transaction where accrual basis is
impractical or when other methods are required.

> Payable account are recognized and recorded in the book of accounts
only upon acceptance of goods/inventory/other assets and rendition of services to
the agency.

> Accounts were reclassified to conform with the Revised Charts of

Accounts prescribed under the New Government Accounting System which was
implemented effective January 1, 2003 per COA Circular No. 2003-001 dated
June 17, 2003.

16
IV Correction of Fundamental
- Errors
> Fundamental errors of prior years are corrected using the prior Year's
adjustment account, errors affecting the current year's operations are corrected to
the current year's accounts.

V- CASH

> This account is broken

down as follows:

CASH 2022 2021 2020

Cash Local Treasury (2,815.00) (29,289.66)
Petty Cash Fund 1,000.00 1,000.00 1,000.00
Cash in Bank- Local Currency, 3,615 2,27 1,40
Current Account ,069.36 1,860.26 7,161.11
2,243,570.6 1,408,161.1
TOTAL 3,613,254.36
0 1

Receivables
CASH 2022 2021 2020
Real Property Tax Receivables 7,751.22 7,751.22 7,751.22
Due from Other Funds
Payroll Fund (30.00)
Advances for Officers and
2,489.00 2,459.00 2,459.00
Employees
TOTAL 10,210.22 10,210.22 10,210.22

VI PLANT, PROPERTY AND

- EQUIPMENT

PLANT, PROPERTY AND

2022 2021 2020
EQUIPMENT
Land 84,317.10 84,317.10 84,317.10
Power Supply Systems 5,600.00 5,600.00 5,600.00
Accumulated Depreciation-Power (1
Supply ,950.66)
Buildings 550,844.35 550,844.35 550,844.35
Accumulated Depreciation-
(251,185.02)
Buildings

17
 Other Structures
101 10 10
Office Equipment
,524.00 1,524.00 1,524.00
Accumulated Depreciation-Office (96
Equipment ,447.80)
IT Equipment 113,444.94 113,444.94 90,124.94
(60
Accumulated Depreciation-ICT
,602.05)
Sports Equipment 3,000.00 3,000.00 3,000.00
Accumulated Depreciation-Sports (2
Equipment ,850.00)
Machinery & Equipment 40,320.00 40,320.00 40,320.00
Accumulated Depreciation-
(38,304.00)
Machinery
Oher Property, Plant & Equipment 617,959.50 617,959.50 617,959.50
Accumulated Depreciation-Other
(176,118.46)
PPE
Roads, Highways and Bridges
Artesian Wells, Reservoirs,
Pumping Station and Conduits
Irrigation, Canals and Laterals
1,517,009.8 1,493,689.8
TOTAL 889,551.90
9 9

VII
CURRENT LIABILITIES
-

LIABILITIES 2022 2021 2020

Due to Officers and Employees
4 2
Due to BIR
,398.34 4,758.18 7,377.43
162 16 17
Due to LGUs
,159.00 2,159.00 7,057.00
Due to Other Funds
Other Payables
166 16 20
TOTAL
,557.34 6,917.18 4,434.43

VII
GOVERNMENT EQUITY
I-

18
 GOVERNMENT EQUITY 2022 2021 2020
a. Portion of Property, Plant and 889 1,51 1,49
Equipment ,551.90 7,009.89 3,689.89
b. Equity set aside to finance
capital projects with
appropriations provided in the
previous years-
(Continuing Appropriations)
c. Portion of reciprocal account of
inventories
d. Portion of reciprocal account of
10 1 1
Receivables- Disallowances and
,210.22 0,210.22 0,210.22
Charges
e. Equity allocated to settle 166 16 20
existing obligations ,557.34 6,917.18 4,434.43
3,677 1,82 43
f. Available for Operation
,163.00 8,513.24 5,779.05
- 8 56
g. Prior Years' Adjustments
397,023.32 1,223.00 3,513.20
4,346 3,60 2,70
TOTAL
,459.14 3,873.53 7,626.79

IX
INCOME
-

TAX REVENUE 2022 2021 2020

2
Real Property Tax-Basic
,811.65
2
TOTAL
,811.65

GENERAL INCOME 2022 2021 2020

1
Clearance and Certification Fees
,520.00 250.00 415.00
16
Waterworks System Fees
,350.00 1,010.00 7,330.00
1
Other Business Income
,000.00 1,350.00 5,260.00
18 1
TOTAL
,870.00 2,610.00 3,005.00

19
 OTHER GENERAL INCOME 2022 2021 2020
Miscellaneous Income
2,235 1,65 1,54
Internal Revenue Allotment
,580.00 2,185.00 4,400.00
Subsidy from LGU
2,235 1,65 1,54
TOTAL
,580.00 2,185.00 4,400.00

X- EXPENDITURES

PERSONAL SERVICES 2022 2021 2020

46 5
Productivity Incentive Allowance
,035.00 0,000.00
63 3
Other Bonuses and Allowances
,360.00 6,558.92
681 42 54
Honoraria
,156.35 2,286.30 3,775.22
55 5 5
Cash Gift
,000.00 0,000.00 3,500.00
33 19 2
Year End Bonus
,324.54 7,803.50 8,926.08
Philhealth Contributions
878 75 62
TOTAL
,875.89 6,648.72 6,201.30

MAINTENANCE AND OTHER

2022 2021 2020
OPERATING EXPENSES
48 4 19
Traveling Expenses
,510.00 4,540.00 7,780.00
15
Training Expenses
,000.00 2,000.00
15 3
Office Supplies Expenses
,000.00 0,000.00
2
Electricity Expenses
,850.24 2,611.56
Membership Dues and 4
Contribution to Organizations ,000.00 4,000.00 4,000.00
Accountable Forms Expenses
300.00 600.00
1
Auditing Services
,000.00 1,000.00 1,000.00

20
 2 2 2
Food Supplies Expenses
,328.00 2,780.98 1,487.00
Other Supplies and Materials 17 2
Expense ,056.00 0,000.00
General Services
Repair & Maintenance
Electrification, Power & Energy
Structures
R and M - Other Structure
Repair & Maintenance Artesian
1
wells, Reservoir & Pumping
5,200.00
Stations
Repair & Maintenance Office
Equiptment
Repair and Maintainance-
Irrigations, Canals & Laterals
Repair & Maintenance Road, 1
highways and Bridges 8,000.00
4
Fidelity Bond Premiums
0,354.50
Other Maintenance and Operating 6 1
Expenses ,600.00 7,869.00
112 7 36
TOTAL
,644.24 5,532.54 7,690.50

NON-FINANCIAL SERVICES 2022 2021 2020

Depreciation-Buildings and Other 41
Structure ,864.17
Depreciation-Machinery and 25
Equipment ,384.94
Depreciation-Furniture,Fixtures
and Books
Depreciation-Other Property Plant
and Equipment
Depreciation-Infrastructure
177.33

67
TOTAL
,426.44

FINANCIAL EXPENSES 2021 2021 2020

Bank Charges

21
 TOTAL

Notes to Local Disaster Risk Reduction

Management Fund (LDRRMF)

The LDRRMF represents the amount set aside by the Barangay Local
Government Unit to support it's disaster risk management activities pursuant to
R.A No.10121, otherwise known as the Philippine Disaster Risk Reduction and
Management Act of 2010.The amount available and utilized as December
31,2022 totaled P 246,688.60 and P137,025.00 utilization, respectively,broken
down as follows

Particulars Amount
2020 2021 2022
Beginning Balance 254,510.31 284,672.31 346,350.53
Current Appropriation 71,650.00 84,459.20 101,900.00
Actual Expenses 41,488.00 22,780.98
Balance as of year-end 284,672.31 346,350.53 448,250.53

List of Expenses
Expenses 2020 2021 2022
Purchase of BDRRM Equipment 20,001.00
QRF 21,487.00
QRF 22,780.98

TOTAL 41,488.00 22,780.98

22
 PART II

AUDIT OBSERVATIONS AND RECOMMENDATIONS

A.Financial Audit

Property, Plant and Equipment

6. The data in the Report on Inventory of Property and Equipment and

Property and Equipment Card were incomplete contrary to Section 111 of
PD 1445 and pertinent provisions of the Manual on the Financial
Management of Barangays, thus reliability and accuracy of the Property,
Plant and Equipment account with carrying balance of ₱889,551.90 cannot
be confirmed.

1.1. Section 111 of PD 1445 states that:

“(1) The accounts of an agency shall be kept in such detail as is necessary to

meet the needs of the agency and at the same time be adequate to furnish the
information needed by fiscal or control agencies of the government.

(2) The highest standards of honesty, objectivity and consistency shall be

observed in the keeping of accounts to safeguard against inaccurate or
misleading information.”

1.2. Pertinent provisions in Chapter VII of the Manual on the Barangay Financial
Management of Barangays provide:

7.1 Specific Policies

Property, Plant and Equipment/Infrastructure Assets

Xxx

7.1.6 Property/Equipment Card (PEC), see Annex 26.1, shall be maintained for
all property and equipment of the barangay by the BT.

7.1.7 Property/Equipment Ledger Card (PELC), see Annex 26.2, shall be

maintained by the C/M Accountant as subsidiary ledgers for all property
and equipment of the barangay.

7.1.18 The barangay shall conduct an annual physical inventory of all supplies,
property and equipment of the barangay.

23
 7.1.19 Report on the results of physical inventory of property/equipment shall
be reconciled with the accounting records.

Xxx

7.2.5 Inventory Taking and Reconciliation

The Inventory Committee headed by the PB or his authorized

representative and the BT as his member shall conduct a physical count
of all property and equipment of the barangay at least once a year.

The Inventory Committee, upon the completion of the physical count,

shall prepare, three copies of Report on Inventory of Property and
equipment (RIPE), as shown in Annex 30 and shall be approved by the
PB. The RIPE shall be distributed as follows:

Original- to COA Auditor through C/M Accountant

Duplicate copy- to the C/M Accountant
Triplicate copy- to the BT

The RIPE shall be the basis of the C/M Accountant for reconciling the results of
inventory with the PPE accounts.

The RIPE shall be the basis of the BT for reconciling the equipment covered by
PAR and the PECs on file and the ICS for the small items considered as
inventories.

1.3. As of December 31, 2022, the Barangay’s financial statements showed the total
PPE account of ₱889,551.90 representing 19 % of its total assets of
₱4,513,016.48. The details of the total PPE account are presented in Table 1.

Table 1.Property, Plant and Equipment

PPE Amount
Land 84,317.10
Power Supply Systems 5,600.00
Buildings 550,844.35
Office Equipment 101,524.00
IT Equipment 113,444.94
Sports Equipment 3,000.00
Machinery & Equipment 40,320.00
Other Property, Plant & 617,959.50

24
 PPE Amount
Equipment
Total 1,517,009.89
Less Accumulated Depreciation 627,457.99
Carrying Amount 889,551.90

1.4. The Barangay Book keeper submitted the Property/Equipment Ledger Cards
while the Barangay Treasurer submitted the RIPE of the above listed PPEs.

1.5. However, review of the submitted reports revealed that the following deficiencies:

Report of Inventory of Property and Equipment

* The properties were recorded in lump-sum or there was no detailed list of
properties
* The report lacks the following required necessary information:
- Article
-Description
-Property/ICS Number
- Unit of Measurement
-Unit Value
-Balance PEC(Quantity)
- On hand per count (Qty.)

Property/Equipment Card
* The properties were recorded in lump-sum or there was no detailed list of
properties
* The report lacks the following required necessary information:
- Date
- Reference
- Receipt (Qty, Unit Cost and Total Cost)
-Accumulated Depreciation
- Transfer/Adjustment
- Balance

1.6. Most of the lacking data in the RIPE can be taken from the Property Cards but the
Barangay Treasurer confided that she did not maintain such records, hence the
necessary data required in the RIPE could not be sufficiently supplied. On the
other hand, the Barangay Bookkeeper explained that the balances in the PPEs

25
 were from previous years but there was no detailed records maintained by the
previous Barangay Bookkeeper.

1.7. Due to the above noted deficiencies, the reliability of the PPE balance as
appearing in the financial statements cannot be ascertained.

1.8. We recommended that the Punong Barangay direct the Inventory Committee
to submit a revised RIPE in the prescribed format and indicate all the
required information pertaining to the properties being accounted, duly
signed by the Inventory Committee and approved by the Punong Barangay.

1.9. We recommended that the Municipal Accountant maintain and update the
required Property Equipment Cards with complete details.

1.10. We further recommended that the Barangay Treasurer maintain Property

Cards for each kind of PPE owned by the LGU and periodically reconcile
with the Accountant’s records.

1.11. Comment

Erroneous recording for Distribution of Relief/Welfare Goods

7. The distribution of various relief goods to the families/household affected by

calamities charged to the Local Disaster Risk Reduction Management Fund
amounting to ₱44,267.98 were erroneously recorded as Food Supplies
Expense instead of Welfare Goods for Distribution upon initial recording and
Welfare Goods Expense upon distribution, contrary to Sections 2 and 4 of
Presidential Decree (P.D.) No. 1445 and COA Circular No. 2015-009 dated
December 1, 2015, thus, the propriety of the program could not be
ascertained while the accounts Welfare Goods Expense and Food Supplies
Expense were misstated as at year end.

7.1. Section 2 of P.D. 1445 states that:

“It is the declared policy of the State that all resources of the government
shall be managed, expended or utilized in accordance with law and
regulations, and safeguard against loss or wastage through illegal or
improper disposition, with a view to ensuring efficiency, economy and
effectiveness in the operations of government. The responsibility to take

26
 care that such policy is faithfully adhered to rests directly with the chief or
head of the government agency concerned.”

7.2. While Section 4 of P.D. 1445 provides, that financial transactions and operations
of any government agency shall be governed by certain fundamental principles.
Paragraph 6, thereof, states that claims against government funds shall be
supported with complete documentation.

7.3. Moreover, COA Circular No. 2015-009 dated December 1, 2015 prescribed the
Revised Chart of Accounts for LGUs to conform with the adoption of the Phil.
Public Sector Accounting Standard (PPSAS). On recording of expenses, the
following accounts were prescribed to be used by LGUs:

Welfare Goods for Distribution

1-04-02-020
Debit

This account is used to record the cost of goods for distribution to people
affected by calamities/disasters/ground conflicts such as canned goods,
blankets, mats, kitchen utensils, flashlights and other similar items. Credit this
account for issuance to end-users, transfers or write-down.
Welfare Goods Expenses
5-02-03-060
Debit

This account is used to record the cost of goods issued/distributed to people

affected by calamities/disasters/ground conflicts such as canned goods,
blankets, mats, kitchen utensils, flashlights and other similar items. This also
includes the cost of food served to people affected by
calamities/disasters/ground conflicts.
Food Supplies Expense
5-02-03-050
Debit

This account is used to record the cost of food issued to hospital/rehabilitation

patients, jail inmates and the like.

7.4. Audit of disbursements in CYs 2020-2022 disclosed that the Barangay procured a
total of ₱44,267.98 goods for distribution paid from the BDRRMF. Details on the
purchase of various relief goods in response to calamities charged to the Local
Disaster Risk Reduction Management Fund are as follows:

27
 Table 2. Food Items and Other Relief Goods
Check
Date Relief Goods Amount
No.
508997 12/21/20 2 sacks rice ₱21,487.00
1 sack salt
3 sacks brown sugar
4 boxes noodles
2 galoons winrox
120pcs. soap
143 pcs nescafe
2 boxes sardines
546872 12/29/21 2 sacks brown sugar ₱22,780.98
2 boxes sardines
50 ties birtch tree
3 boxes corned beef
5 boxes noodles
2 boxes beef loaf
GRAND TOTAL ₱44,267.98

7.5. Perusal of the entries made by the bookkeeper on the issuances of the above
transaction revealed that they were erroneously recorded as Food Supplies
Expense instead of Welfare Goods for Distribution upon initial recording and
Welfare Goods Expense upon distribution.

7.6. The erroneous entry of expense resulted in an overstatement of Food Supplies

Expense by ₱44,267.98 and an understatement of the Welfare Goods Expense by
the same amount.

7.7. We recommended that the Bookkeeper record the issuances of relief goods
under the account Welfare Goods Expense rather than Food Supplies
Expense.

7.8. Comment

Low Utilization of Local Disaster Risk Reduction and Management Fund

8. Of the total accumulated BDRRMF Mitigation Fund of ₱188,851.60 for CY

2020, 2021 and 2022, only 10.59% or ₱20,001.00 were utilized due to non-
implementation of the identified projects in BDRMFIP, contrary to DILG
Memorandum Circular No. 2012-73, thereby limiting the readiness of the
Barangay to safeguard its constituents in times of calamity.

28
8.1. DILG Memorandum Circular No. 2013-73 enjoins all Local Chief Executives to
utilize their Local Disaster Risk Reduction and Management Fund to ensure that
basic “rescue and response equipment” are procured and to operationalized the
provisions of the National DRRM Plan and National Climate change Action Plan,
in accordance with the pertinent provisions of related laws and its implementing
rules and regulations.

8.2. Section A, thereof enumerates the kind of early warning systems, preparedness
and other equipage to be procured for flooding, earthquake, volcanic eruption and
landslide, utilizing the 70% of the 5% Barangay Disaster Risk Reduction and
Management Fund Investment Plan (BDRRMFIP).

8.3. In the CY 2020 to CY 2022 budgets of barangay Caulisihan, the following were
the appropriations for the BDRRM Fund:

Table 3. Appropriations for BDRRMF Brgy. Caulisihan

Particulars 2020 2021 2022 Total
QRF 30% ₱ 21,495.00 ₱ 25,337.76 ₱ 34,103.64 ₱ 80,936.40
Mitigation70% 50,155.00 59,121.44 79,575.16 188,851.60
Total ₱ 71,650.00 ₱ 84,459.20 ₱ 113,678.80 ₱ 269,788.00

8.4. The Programs/Projects/Activities in the Barangay Risk Reduction Management

Plan for the years 2020 to 2022 are shown in Table 4:

Table 4.PPAs in the BDRRMFIP

Year Program/Activity Amount
2020 Quick Respond Fund ₱ 21,495.00
2020 Evacuation Facilities 10,000.00
2020 Training and Seminars 20,000.00
2020 Purchase of BDRRM Equipment 20,155.00
Total Budget for CY 2020 ₱ 71,650.00
2021 Quick Respond Fund ₱ 25,337.76
2021 Training and Seminars 16,139.00
2021 Purchase of Handheld Radio 25,326.44
2021 Signage Installation 5,000.00
2021 Medical Tools and Supplies 12,656.00
Total Budget for CY 2021 ₱ 84,459.20
2022 Quick Respond Fund 34,103.64
2022 Evacuation Kitchenware and utensils 71,330.00
2022 BDRRM Supplies 8,245.16
Total Budget for CY 2022 ₱ 113,678.80

29
8.5. Verification of disbursements during years under audit disclosed that the total
amount of ₱44,267.98 as can be seen in table 1 of AOM No.1 was utilized from
the Quick Response Fund (QRF) in response to the incurrence of COVID-19.

8.6. However, from the (70%) Mitigation Fund of ₱188,851.60, only ₱20,000.00 was
utilized, or 10.59% of the total for the purchase of amenities for Barangay
Evacuation Center under check number 508997 dated December 21, 2020.

8.7. Thus, as of December 31, 2022, the unutilized mitigation fund of the LDRRMF
still amounted to ₱168,850.60. As stipulated for under the above-cited DILG
Memorandum Circular, the mitigation fund is intended for the procurement of
rescue and response equipment to avoid damage to properties or loss of lives in
times of calamities.

8.8. The inability of the barangay to fully utilize the LDRRMF resulted to inadequate
preparation in times of disasters which would endanger the lives and properties of
the constituents if stricken with serious calamities.

8.9. We recommend that the Punong Barangay and the Barangay Disaster Risk
Reduction Management Officer:

d. Monitor and evaluate the Programs/Projects/Activities incorporated

in the BDRRMFIP to avoid duplication of programs and make room
to projects that can address the current state of calamity or any
calamity that may possibly arise. Revise the Plan, if necessary, and
still indicate specific timeframes;

e. Utilize the current year’s 5% LDRRM Fund in accord with the

approved BDRRM Investment Plan to ensure that their utilizations
are well-planned and duly authorized by the BDRRM Council; and

f. Implement the projects, programs and activities (PPAs) identified in

the BDRRMF Investment Plan during the year to ensure full
utilization of the BDRRM Fund.

Disclosure of LDRRMF to the Notes to FS

9. The disclosure in the Notes to Financial Statements pertaining to the

LDRRMF lacks the necessary details and not in the prescribed format
provided in COA Circular No. 2012-002 dated September 12, 2012, thus
significant information of value to users of financial statements was not
provided.

30
9.1. COA Circular 2012-002 dated September 12, 2012 was issued to prescribe
accounting and reporting guidelines for the LDRRMF of LGUs (including
BLGUs) and NDRRMF given to LGUs and Receipts from other sources.

9.2. Whereas, Section 5.1.16 of the same Circular states “The amount and details of
the unexpended balance of LDRRMF shall be discussed in the Notes to
Financial Statements”. A sample of disclosure was attached as Annex D of the
same circular as shown below:

Annex D
Notes to the Financial Statements

Note____. Local Disaster Risk Reduction Management Fund (LDRRMF)

The LDRRMF represents the amount set aside by the LGU to support it's
disaster risk management activities pursuant to R.A No.10121, otherwise known
as the Philippine Disaster Risk Reduction and Management Act of 2010.The
amount available and utilized during the year totaled ₱_________ and
₱_________ , respectively, broken down as follows:

Amount
Particulars
Available Utilized Balance
Current Year Appropriation:
Quick Response Fund
₱ ₱ ₱
(QRF)
Mitigation Fund (MF)
MOOE
Capital Outlay
Total
Continuing Appropriation: ₱ ₱ ₱
Special Trust Fund
CY 20___ ₱ ₱ ₱
CY 20___
CY 20___
CY 20___
CY 20___
Total
Total ₱ ₱ ₱

9.3. Review on disclosure made on the Notes to Financial Statements of the

LDRRMF of the barangay disclosed that it was not in the prescribed format as

31
 provided in Annex D of COA Circular No. 2012-002 as it only shows in lump-
sum the available, utilized and balances from previous years unexpended and
current appropriations.

9.4. The Notes failed to discuss in detail the balances under current years
appropriations under 30%QRF and 70%Mitigation Fund and the detailed
breakdown of the unexpended prior years balances which should have given
additional value to the financial statements.

9.5. We recommend that the Barangay Bookkeeper and Municipal Accountant

disclose in the succeeding Notes to Financial Statements balances of the
LDRRFM using the format provided in annex D of COA Circular 2012-
002.

Incomplete LDRRMF Investment Plan

10. Prior year’s unexpended DRRMF were not transferred to the Special Trust
Fund nor was included in the LDRRMF Investment Plan for CYs 2020, 2021,
and 2022, contrary to Sections 4.4 and 5.1.2 of COA Circular 2012-002, thus,
the funds were left idle in the bank and the objectives of providing the fund
for its purpose may not have been attained.

10.1. Section 4.4 of COA Circular 2012-002 states “The unexpended LDRRMF shall
accrue to a special trust fund solely for the purpose of supporting disaster risk
reduction and management activities of the Local Disaster Risk Reduction
Management Council (LDRRMC) within the next five years. The LDRRMCs
shall decide on the use of the unexpended balance of LDRRMF which shall
be incorporated in the Local Disaster Risk Reduction Management Fund
Investment Plan.”

10.2. Whereas, Section 5.1.2 of the same circular states, “A LDRRMFIP for the DRRM
program shall be prepared annually. It shall present the 30% allocation for QRF
in lump sum and the allocation for disaster mitigation, prevention and
preparedness with details as to projects and activities to be funded. The
LDRRMFIP shall also include a separate caption, the list of projects and
activities charged to the unexpended LDRRMF of previous years.”

10.3. Upon examination of the LDRRMF Investment Plan attached to the Annual
Budget, it was observed that the LDRRMF Investment Plan only included the
items/activities intended to be undertaken/procured out of the current year’s
budget. Also, it was noted that in every Supplemental Budget, a separate
LDRRMF Investment Plan was prepared to identify how the additional funds will
be used, but none was made for the unexpended balances of prior years.

32
10.4. The Barangay Local Government had a balance of ₱254,510.31 out of its prior
year’s LDRRM as of December 31, 2019 but the Statement of Financial Position
of the barangay showed a Trust Liabilities balance of zero denoting that the
portion of ₱254,510.31 which represented the unused 70% Mitigation Fund-
MOOE and 30% QRF was not recorded under Trust Liability – DRRM and was
not transferred to the Special Trust Fund. The same observations were noted for
CYs 2020, 2021, and 2022. Consequently, the unexpended balances of prior
years’ cannot be used in the absence of the LDRRMFIP which should have
indicated the PPAs for which said prior years’ balances will be used for.

10.5. While it is true that the BDRRM Council will decide on the use of the
unexpended balance of LDRRMF, the same should be reflected in the
LDRRMFIP. Moreover, the continued non-utilization of the unexpended
LDRRMF from previous years left the funds idle in the bank instead of using the
fund to improve the LGU’s capability on disaster mitigation, prevention and
preparedness.

10.6. We recommended that the Barangay Kagawad who is the Chairman of the
Committee on Appropriation (CCA), provide breakdown of the ₱448,250.53
BRRM Fund unexpended balance as of December 31, 2022 which should
only include the unexpended balances for the past 5 years.

10.7. We also recommended that the Municipal Accountant thru her Designated
Bookkeeper record the prior year’s unused BDRRM Fund as Trust
Liabilities under Special Trust Fund, based on the amount provided by the
CCA.

10.8. Further, we recommended that the Punong Barangay, as Chairman of the

LDRRM Council, identify the project/s to be funded from the unexpended
BDRRM Fund of previous years, incorporate the same in the LDRRMF
Investment Plan and implement the project/s to fully equip the Barangay and
its residents in times of disasters.

Minimal 20% Development Fund Utilization

6. Only ₱15,200.00 or 1.26% of the ₱1,199,219.78 continuing and current

appropriations of the 20% Development Fund for CYs 2019 to 2021 was
utilized, contrary to Section 3.2.3 of DBM-DOF-DILG JMC No. 1 dated
November 24, 2020 hence, optimal utilization of the fund was not achieved
and the constituents were deprived from enjoying its benefits.

33
6.1. DBM-DOF-DILG Joint Memorandum Circular No. 1 dated November 24, 2020
provides the revised guidelines on the appropriation and utilization of the 20% of
the annual internal revenue allotment for development projects. The JMC was
issued to increase the responsiveness of the guidelines and promote greater
autonomy, transparency and accountability in the LGUs’ appropriation and
utilization of their respective 20% DF. Pertinent sections of the subject
Memorandum Circular are as follows:

a) Section 3.1 – In accordance with Section 287 of RA No. 7160, each LGU shall
appropriate in its annual budget no less than twenty percent
(20%) of its annual IRA for development projects.

b) Section 3.2 – The LGUs are enjoined to observe the following policies and
guidelines in the appropriation and utilization of the 20% DF:

3.2.1 The 20% DF shall be utilized to finance the LGUs'

priority development projects, as embodied in their
respective duly approved local development plans, and
medium-term and annual investment programs, which
should be harmonized with the Regional Development
Plan and the Philippine Development Plan.

3.2.2 The development projects that may be included under the

20% DF shall be those that are necessary, appropriate, or
incidental to efficient and effective local governance, and
those which are essential to the promotion of the general
welfare of the people.

3.2.3 The LGUs shall ensure that the development projects

to be funded out of the 20% DF are well-planned and
procurement-and-implementation-ready.

3.2.4 Technical assistance may be sought from National

Government Agencies (NGAs), such as, but not limited
to, the Department of Agriculture, DBM, Department of
Education, Department of Environment and Natural
Resources, DOF, Department of Health, DILG,
Department of Public Works and Highways, Department
of Social Welfare and Development, and National
Economic and Development Authority, for the
determination of the more relevant and responsive
development projects that may be included under the
20% DF and to ensure compliance with the standards
prescribed by the NGAs concerned.

34
 3.2.5 The following expenditure items shall not be allowed to
be charged against the 20% DF:

3.2.5.1 Personal Services expenditures, such as salaries,

wages, overtime pay, and other personnel
benefits.
3.2.5.2 Administrative expenses, such as supplies, meals,
representation, communication, water and
electricity, petroleum products, and the like;
3.2.5.3 Traveling expenses, whether domestic or foreign;
3.2.5.4 Registration fees and other expenses related to the
conduct of and participation to trainings,
seminars, conferences or conventions;
3.2.5.5 Purchase, maintenance or repair of administrative
office' furniture, fixtures, equipment or
appliances; and
3.2.5.6 Purchase, maintenance or repair of motor vehicles
used for administrative purposes.

6.2. During the CYs 2020, 2021 and 2022, the amount set aside by the Barangay as
20% Development Fund, based on the approved Annual Budgets totaled
₱1,057,552.01. This amount was appropriated based on the Internal Revenue
Allotment (IRA) of the Barangay. Moreover, the Barangay still has a balance of
₱141,667.70 as of December 31, 2019 as continuing appropriations. Thus, the
20% Development Fund of the Barangay totaled to ₱1,199,219.78. Table 5
presents the programs, projects and activities funded from 20% Development with
their corresponding appropriations based on the Annual Investment Plans
submitted.

Table 5. 20% BDF CY 2020 to 2022 PPAs

CY Project/Title Amount Status
Previous Years Unidentified Projects 141,667.70
Continuing
Subtotal prior years continuing 141,667.70
2020 Annual Rehabilitation of Water System 130,000.00 partially
Budget Implemented
Purchase of Single Pass 150,000.00 not implemented
RiceMill
Subtotal 2020 280,000.00
2021 Annual Purchase of Single Pass 100,000.00 not implemented
Budget RiceMill
Establishment of Barangay 100,000.00 not implemented
MRF/Concrete Fence
Completion of Evacuation 100,000.00 not implemented
Center

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 CY Project/Title Amount Status
2021 Supplemental Rehabilitation of Water System 30,436.88 not implemented
Budget No. 1
Subtotal 2021 330,436.88
2022 Annual Rehabilitation of Water System 400,000.00 not implemented
Budget mainline
2022 Supplemental Rehabilitation of Water System 47,115.20 not implemented
Budget No. 1 mainline
Subtotal 2022 447,115.20
Total 1,199,219.78

6.3. As can be seen in table 4, only 1 project was partially implemented for CY 2020-
2022 and prior years continuing appropriation of 20 % Development Fund with a
total amount disbursed of ₱15,200.00. List of disbursements is shown in Table 6.

Table 6. Disbursements paid out of 20% Development Fund

Check Gross
Particulars Check Date Payee
Number Amount
Materials for Rehab of Water System 546803 01/21/2020 Mariel’s Hardware ₱ 6,800.00
Labor-Rehab of Water System 508999 12/18/2020 Jennifer M. Pepito 8,400.00
Total ₱15,200.00

6.4. Since only one project was implemented, the fund was not optimally utilized
hence the constituents were deprived of the benefits from the noted projects.

6.5. We recommended that the Punong Barangay implement all the projects
appropriated under 20% Development Fund so that funds are optimally
utilized to help achieve the desirable socio-economic development and
environmental outcomes of the Barangay.

6.6. Comment

Non Utilization of 1% Senior Citizen and PWD Fund

7. Programs and activities to address the concerns of Senior Citizens and

Persons With Disabilities (PWDs) were not implemented, as required in
DBM-DSWD Joint Circular No. 2003-01, thus the Barangay was not able to
support the needs of the elderly and person with disabilities in their locality.

7.1. DBM-DSWD Joint Circular No. 2003-001 dated April 28, 2003 was issued to
prescribe guidelines for the implementation of Section 29 of the General
Appropriations Act of 2003 which states that the plans, programs and projects
intended to address the concerns of senior citizens and persons with disability
shall be integrated in the regular activities of the agencies. Sections 4.2 and 4.3
thereof directs all government agencies, departments, bureaus, offices,

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 commissions and state universities and colleges to allocate at least one percent
(1%) of their respective budget to be utilized in the implementation of
programs/projects/activities/services which will address the needs of older
persons and persons with disabilities (PWDs).

7.2. Our perusal of the Annual Budgets of the barangay disclosed that there was no
appropriation for Senior Citizens and PWDs for CY 2020 while a total of
₱35,000.00 were appropriated for programs and activities for CY 2021 & CY
2022 as shown in Table 7.

Table 7. Fund for Senior Citizens and PWDs Programs/Projects

Appropriation (should be
Year Estimated IRA
1% of IRA)
2020 1,433,000.00 -
2021 1,500,000.00 ₱ 15,000.00
2022 2,000,000.00 20,000.00
Total ₱ 35,000.00

7.3. However, review of the disbursements of the Barangay in CY 2020 to CY 2022

disclosed that no expenses were made for the implementation of the programs,
projects, activities and services intended for the elderly persons and PWDs.
Consequently, during these periods, the concerns of the total well-being of elderly
persons and PWDs were not provided.

7.4. We recommended that the Punong Barangay include in its annual programs,
activities that will benefit the well-being of Elderly Persons and PWDs in the
Barangay, the cost of which should be at least one percent (1%) of their
respective budget and ensure its implementation.

7.5. Comment

37

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ UNIMPLEMENTED
AUDIT RECOMMENDATIONS
Of the 10 prior years’ unimplemented audit recommendations, three were
implemented, none was partially implemented while seven remained unimplemented.
Ref. Audit Observations
CY 1. The accuracy of the assets
2016- under Property, Plant and
2019 Equipment (PPE) account
ARB amounting to ₱1,433,514.89
Part II as of December 31, 2019
No. 1 could not be ascertained
since the Report on
CY Inventory of Property and
2011- Equipment (RIPE) lacks the
2015 necessary details and were
ARB not reconciled with
Part II accounting records while
No.1 property records were not
maintained, contrary
CY pertinent provisions of the
2010 Manual on the Financial
ARB Management of Barangay,
No. 1 thus, the PPE account
balance remain unreliable.
PART III
Status of
Management Implementation
Recommendations Action and Reason for
Partial/Non-
Implementation
We recommended that the
Barangay Inventory Team
provide in the RIPE the
complete description of
each property owned by
the Barangay and other
necessary details required
in the Report on Inventory
of Property and Equipment
(RIPE).
We also recommended that
the Punong Barangay:
1.) Request the Barangay 1)Fully
Bookkeeper and the Implemented
Municipal Accountant, to
provide the Barangay
Inventory Team with the
detailed list of properties
recorded in the books so
that the latter can reconcile
the same with their RIPE.
Any variance that will
remain should be located,
otherwise, the barangay
officials shall be held liable
for any losses.
2.) Request the Designated 2)Fully
Barangay Property Implemented
Custodian to prepare and
maintain Property Cards
38
 Status of
Management Implementation
Ref. Audit Observations Recommendations Action and Reason for
Partial/Non-
Implementation
(PCs) of all PPEs to
include data on the
quantity, date of
acquisition, unit cost,
condition and Barangay
official accountable for the
item;
3)Not
3.) Request the Barangay Implemented
Bookkeeper and the
Municipal Accountant to
maintain the Property
Ledger Cards and reconcile
the same with the PCs of
the Designated Barangay
Property Custodian.
CY Depreciation of PPEs We recommended that the
2016- totaling ₱1,349,197.79 was Municipal Accountant (4) 4)Fully
2019 not computed and deducted compute the Accumulated Implemented
ARB from the cost of depreciable Depreciation for each
Part II assets, contrary to Philippine depreciable asset of the
No. 2 Public Sector Accounting Barangay from date of
Standard (PPSAS) 17 thus, acquisition to current year
CY the balance of PPE and the by preparing a lapsing
2011- total non-cash expenses in schedule and (5) prepare 5)Fully
2015 the financial statements of the necessary correcting Implemented
ARB the Barangay as of December entries.
Part II 31, 2019 were not accurately
No.2 presented.

CY 3. Remittances to the BIR We recommended that the

2016- were not tallied and verified Barangay Treasurer: (6) 6)Fully
2019 with the taxes withheld from remit the amount of Implemented
ARB creditors such that taxes ₱20,251.42 immediately
Part II withheld totaling ₱20,251.42 and present to the Audit
No. 3 was unremitted as of Team proof of such
December 31, 2019, contrary remittance; and (7) remit 7)Fully
CY to BIR Revenue succeeding taxes withheld Implemented
2010 Memorandum Circular No. strictly within the

39
 Status of
Management Implementation
Ref. Audit Observations Recommendations Action and Reason for
Partial/Non-
Implementation
ARB 23-2012 and Revenue prescribed due date and in
Part II Regulation No. 1093, thus exact amount to the Bureau
No.3 the Barangay officials may of Internal Revenue (BIR)
be liable for penalties. to avoid penalties.
CY The Local Disaster Risk We recommended that the
2016- Reduction Management Punong Barangay and the
2019 Fund (LDRRMF) Investment LDRRM Council:
ARB Plan prepared by the
Part II Barangay for CY 2016 and (8) identify specific 8)Fully
No. 4 2019 did not specify the programs and activities on Implemented
disaster equipment and disaster preparedness,
supplies to be procured and including equipment to be
none provided for the procured which can be
intended use of the useful during calamities,
unexpended LDRRMF from using the list in DILG
prior years. Also, only Memorandum Circular No.
₱28,434.60 were utilized out 2012-73 as guide;
of the ₱271,349.80
LDRRMF appropriations for (9) include in the annual 9)Fully
the said years, contrary to LDRRMF Investment Plan Implemented
COA Circular No. 2012-002 all programs, projects and
and Section 21 of RA No. procurement that will be
10211, thereby limiting the founded from the
capacity and readiness of the unexpended prior years
Barangay to respond and LDRRMF in addition to
assist the constituents during the current year 70%
disasters. Mitigation Fund; and

(10) implement during the 10)Fully

year the activities in the Implemented
LDRRMIP, in order to
equip the Barangay
Officials and its
constituents the skill and
knowledge to prepare and
manage disasters.
CY The Barangay’s local income (11) We recommended that 11)Fully
2016- barely increased in Calendar the Punong Barangay and Implemented
2019 Years 2016 to 2019 since the other Barangay Officials

40
 Status of
Management Implementation
Ref. Audit Observations Recommendations Action and Reason for
Partial/Non-
Implementation
ARB Barangay continued to enact ordinances that will
Part II depend mainly on its share increase income of
No. 5 from the Internal Revenue Barangay Caulisihan and
Allotment (IRA) received (12) monitor its 12)Fully
from the National implementation in order to Implemented
Government and the collect more funds for the
Barangay Officials did not Barangay.
enact ordinances to
maximize their revenue
raising power, thus, funds to
finance various
activities/programs for
development of the Barangay
and its operational needs
were not enhanced.
CY Construction materials (13) We recommended that 13)Fully
2016- totaling ₱472,732.40 the Punong Barangay Implemented
2019 purchased by the Barangay require the Barangay
ARB for its projects in Calendar official designated in
Part II Years 2016, 2017, 2018 and charge of the projects in
No. 6 2019 were not fully CY 2016 to CY 2019 to
accounted since its issuances submit proof of actual
were not supported with utilization of the
Requisition Issue Slips duly construction materials for
received by the Project In- the projects to avoid the
Charge, Utilization Reports issuance of Notice of
to where the materials were Suspension.
used and Certificates of 14)Fully
Completion of the projects, (14) We also recommended Implemented
contrary to COA Circular that in subsequent
No. 2015-009, thus, procurement, the Barangay
confirmation on the proper Treasurer issue an
use of the items and approved Requisition and
verification of the projects’ Issue Slip upon release of
status could not be the materials to the end-
conducted. user which should be
summarized monthly in the
Summary of Supplies and
Materials Issued (SSMI) to

41
 Status of
Management Implementation
Ref. Audit Observations Recommendations Action and Reason for
Partial/Non-
Implementation
be submitted to the
Barangay Bookkeeper.
CY The Barangay implemented We recommended that the
2016- infrastructure projects Punong Barangay (15) 15)Fully
2019 totaling ₱1,051,469.29 by implement projects by Implemented
ARB Administration even if it has administration only when
Part II no technical capability nor the Barangay has the
No. 7 the equipment required to capability to undertake
undertake the project, projects and have acquired
contrary to Section 3 of the necessary equipment in
GPPB Resolution No. 018- order to comply the
2006, thus, the reliability of conditions required in
the completed projects is GPPB Resolution No. 018-
doubtful whether it is in 2006.
accordance with prescribed
standards and specifications.
CY Collections of the Barangay (16) We recommended that 16)Fully
2011- Treasurer were not deposited the Punong Barangay of Implemented
2015 promptly and intact, contrary Brgy. Caulisihan instruct
ARB to Section 334 (a) of the Barangay Treasurer to
Part II Republic Act No. 7160, thus deposit her collections
No.3 cash were accumulated in her regularly and intact to the
possession which exposed Barangay’s Government
CY government funds to the risk Depository Bank.
2010 of possible loss or misuse.
ARB
No. 2

CY The Barangay Treasurer did (17) We recommended that 17)Fully

2011- not prepare the Monthly the Punong Barangay of Implemented
2015 Report of Accountability for Brgy. Caulisihan require
ARB Accountable Forms the Barangay Treasurer to
Part II (MRAAF) for official submit the monthly RAAF,
No.3 receipts and checks, contrary together with other
to Sec. 50 of the Manual on monthly reports, to the
NGAS for LGUs Volume II, Office of the Municipal

42
 Status of
Management Implementation
Ref. Audit Observations Recommendations Action and Reason for
Partial/Non-
Implementation
thus, monitoring of receipts Accountant of LGU
and issuances of the Inopacan, Leyte.
Accountable Forms could
not be readily determined.
CY No public biddings were We recommended that the
2010 conducted in the (18) procurement 18)Fully
ARB procurement of goods and transaction of management Implemented
Part II services of the barangay, shall be through
No.4 contrary to the provision of competitive public bidding
Section 356 of R.A. 7160, as required under Section
otherwise known as the 356 of RA 7160 and
“Local Government Code of Section 10, Rule IV of the
1991” and Section 10, Rule Revised IRR of RA 9184,
IV, of the revised IRR of RA otherwise known as the
9184. Government Procurement
Reform Act.

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