EXECUTIVE SUMMARY

INTRODUCTION

The Municipality of Pila, Laguna formerly known as “PAGALANGAN” was

originally established in 1571 by Don Jose de Salvador. The original site of the town was
northeast part of the town of Victoria, Laguna. The town got its name “Pila” from the
Franciscan Missionaries who named it after they saw the queen of anthills. Pila is better
known in the province as “Bayang Pinagpala” because it was the only town in Laguna
which was not damaged during the World War II.

In May 17, 2000, Pila was declared “National Historical Landmark” by the
National Historical Institute. The old houses built as early as 1890 were taken cared in an
effort to preserve some of the remaining symbols of the town’s cultures and history.

The Municipality of Pila, Laguna, which belongs to fourth class municipalities of

the Province of Laguna, comprises of 17 barangays and is now under the leadership of
Honorable Wilfredo M. Quiat. Like any other local government units, it enjoys total
independence in planning, managing and deciding its own administrative, fiscal, and
development affairs in conformity with the national government’s thrust for sustainable
social and economic growth pursuant to Republic Act No. 7160, otherwise known as the
Local Government Code of 1991.

FINANCIAL HIGHLIGHTS

For Calendar Year 2013, the Municipality of Pila, Laguna generated a total
operating income of P86,743,397 from local taxes, permits and licenses, service and
business income and internal revenue allotment. This registered an increase of 20.95%
from last year’s figure of P71,720,986 and increase of 6.47% from its targeted collections
of P79,879,455.

The total funds utilized for the year amounted to P77,346,432 out of the total
current appropriations of P88,689,494.85. Likewise, out of P6,807,446 continuing
appropriations, P4,885,640 was obligated and expended, thus leaving the balance of
P1,921,806 continuing appropriations.

The total assets, liabilities, government equity, income and expenses for the CY
2013 compared with that of the preceding year are as follows:
Increase/
CY 2013 CY 2012 (Decrease)

Total Assets P118,132,399 P104,198,610 P 13,933,789

Total Liabilities 53,863,183 47,893,832 5,969,351
Total Equity 64,269,216 56,304,778 7,964,438
Total Income 94,708,671 72,631,063 22,077,608
Total Expenses 79,153,442 66,412,414 12,741,028

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 SCOPE OF AUDIT

Financial and compliance audits were conducted on the accounts and operations
of the Municipality of Pila, Laguna for Calendar Year 2013.

The audit was conducted to ascertain the propriety of financial transactions,

compliance with prescribed rules and regulations and the economical, efficient and
effective utilization of resources. It was also made to ascertain the accuracy of financial
records and reports, as well as the fairness of the presentation of financial transactions.

AUDIT OPINION ON THE FINANCIAL STATEMENTS

The Audit Team Leader rendered a qualified opinion on the fairness of the
presentation of the financial statements of the Municipality as the account Property, Plant
and Equipment (PPE) with a balance of P71,016,731.18 could not be ascertained due to
discrepancies of P17,059,665.55 between the total amounts of PPE per records of
Accounting and Inventory Report submitted, contrary to Section 114 of the Manual on
NGAS Volume I for LGUs. Due to the absence of complete property records, we could
not provide other alternative procedures to determine and ascertain the valuation,
accuracy, and existence of the PPE.

SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS

In view of the above exception, we recommended that the Municipal Mayor

instruct both the Municipal Accountant and designated Municipal General Services
Officer to maintain property card and Acknowledgement Receipt for Equipment for each
PPE, reconcile immediately their records and thereafter to make the necessary
adjustments/corrections thereon.

Other significant observations and recommendations are the following:

1. Of the P4,980,789.33 outstanding loans and other receivables uncollected for several
years now, only P132,985.00 or 2.67% was collected during the year, due to the
continuous failure of the Management to formulate an effective plan to monitor and
enforce collection from the delinquent borrowers as required under Section 64, Volume I
of the Government Accounting and Auditing Manual.

We recommended that the Municipal Mayor instruct the Municipal Treasurer to

send demand letters to the defaulting borrowers at their latest known addresses. Exhaust
all legal remedies to collect/recover the receivables.

We also reiterated our recommendation that the Municipal Mayor instruct the
Municipal Accountant to gather all related documents showing efforts made in causing

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 the collection of the loans from various borrowers to support request for write-off of the
receivables.

2. The continuous absence of well-defined development plans and programs for the
appropriated 20% Development Fund amounting to P12,791,301.60 had prevented the
Municipality of Pila to fully utilized the funds resulting in the non-attainment of its
objectives as provided under DILG/DBM Joint Cir. No. 2011-1 dated April 13, 2011
thus, depriving the constituents of the benefits that maybe derived from the socio-
economic development and environmental management projects.

We recommended that the Municipal Mayor instruct the Head of the MPDC to
formulate a development plan that adhere to the general policies and guidelines on the
appropriation and utilization of the 20% of the Annual Internal Revenue Allotment (IRA)
for development projects, particularly for those projects that partake the nature of
investment and capital expenditure as enumerated under the Joint DILG-DBM
Memorandum Circular No. 1, s. 2005 dated September 20, 2005. Likewise, see to it that
the plan is aligned to the development needs of the constituents, and ensure that the plan
is carried out to maximize the utilization of the 20% development fund.

3. Disbursements on gasoline, oil and lubricants totaling P2,554,167.46 were not supported
with duly accomplished and serially numbered Driver’s Trip Tickets (DTTs) and monthly
Reports of Official Travels and of Fuel Consumption, contrary to Sec. 4(6) of
Presidential Decree 1445 and COA Circular 77-61, hence, the regularity and propriety of
the expenditures could not be determined.

We recommended that the Municipal Mayor instruct:

a. all officers and personnel concerned to see to it that Driver’s Trip Tickets for all
official travels are duly accomplished;
b. the Municipal General Services Officer to submit Reports of Official Travels and of
Fuel Consumption of each motor vehicles; and
c. the Municipal Accountant to stop processing vouchers on payments of gasoline, oil
and lubricants which are not supported with duly accomplished DTTs and Reports of
Official Travels and of Fuel Consumption.

4. Purchase Orders (POs) for procurement of goods and contracts and supporting documents
for various projects were not furnished by the BAC Chairman to the Auditor within five
working days from execution thereof, contrary to COA Circular No. 2009-001, dated
February 12, 2009, hence timely review and evaluation of the same could not be
undertaken.

We reiterated our recommendation that the Municipal Mayor direct the BAC
Chairman to monitor and comply strictly with the prescribed period on the submission of
copies of purchase orders and perfected contracts pursuant to COA Circular No. 2009-
001 dated February 12, 2009.

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5. PDAF released by Former Congressman Edgar San Luis for the purchase of patrol
vehicles was utilized to purchase Mini Dump Truck in the amount of P1,099,000.00
contrary to the authorized purpose and in violation to National Budget Circular (NBC)
No. 529 dated February 21, 2011 and Section 84(2) of PD 1445.

We recommended that the Municipal Mayor:

a. instruct the Municipal Accountant to submit copies of approved request for

realignment of the project and concurrence of former Congressman Edgar San Luis;
b. require the Municipal General Services Officer to secure copies of Deed of Transfer
together with all supporting documents to effect the transfer of ownership of the
property to the respective Barangays; and
c. instruct the Municipal General Services Officer to immediately transfer the Mini
Dump Truck to Barangay Pinagbayanan since the motor vehicle is intended for
Barangay Pinagbayanan.

6. Failure of the Municipality to allocate/spend at least five percent (5%) of its 2013 total
budget appropriations equivalent to P4.13M for Gender and Development (GAD)
activities resulting to inadequate promotion of gender-responsive governance to address
gender issues and concerns of their constituents as required under DBM, NEDA and
NCRFW Joint Circular No. 2004-1.

We reiterated our recommendation that the Municipal Mayor require the

Municipal Budget Officer to allocate at least five percent (5%) of the total appropriations
for Gender and Development (GAD) activities to best serve the ultimate goal of the GAD
programs, such as gender equality and women empowerment. Likewise, observe the
prescribe guidelines and procedures for the formulation and submission of agency annual
GAD plan and budget and GAD accomplishment report as mandated by the above cited
joint circular.

Status Of Implementation of Prior Year’s Audit Recommendations

Out of the seven prior year’s audit recommendations contained in the 2012
Annual Audit Report, one was fully implemented, four were partially implemented, and
two were not implemented by the Municipality.

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