EXECUTIVE SUMMARY

A. Introduction

The Municipality of San Juan was created by virtue of Commonwealth Act No. 1625
which was enacted on March 20, 1907. On June 17, 2007, the Municipality of San
Juan was converted into a highly urbanized city to be known as the City of San Juan
pursuant to Republic Act No. 9388. The City has a total land area of 5.94 square
kilometers and one of the smallest political subdivisions of the National Capital
Region (NCR) which accounts for less than one per cent of the total area of the
NCR.

The City’s mission is to provide quality and effective social services to the people,
pursue sustainable, inclusive and equitable economic growth, and promote
ecological balance through a responsive, transparent, efficient, and technologically
advanced governance in partnership with empowered people towards achieving
excellence.

The City of San Juan is under the leadership of Mayor Francisco Javier M. Zamora
and is supported by Vice Mayor Jose Warren P. Villa and the members of the
Sangguniang Panlungsod.

The City has a total of 1,909 personnel complement composed of the following:

Appointive 2
Temporary 12
Elective Officials 14
Permanent 939
Casuals 6
Contractual 256
Co-terminus 26
Job Order 647
Contract of Service 10
Total 1,909

B. Financial Highlights

The City’s assets, liabilities and equity for CY 2022 were P7.364 billion,
P2.226 billion and P5.138 billion, respectively. On the other hand, income collected
totaled P2.719 billion, while expenses incurred amounted to P2.329 billion, as
summarized in the next page with corresponding figures for CY 2021:

2022 2021 Increase/Decrease

Assets P 7,364,184,205.59 P 6,798,190,586.01 P 565,993,619.58
Liabilities 2,225,745,805.33 2,512,765,594.72 (287,019,789.39)
Government Equity 5,138,438,400.26 4,285,424,991.29 853,013,408.97
Revenue 2,718,629,196.08 2,844,581,553.38 (125,952,357.30)
Expenses 2,329,036,991.38 2,356,070,654.69 (27,033,663.31)

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 Of the total appropriations of P3.924 billion and P2.570 billion was obligated during
the year, details as follows:

Appropriations Obligations
Fund
CY 2022 CY 2021 CY 2022 CY 2021
Current Appropriation
General Fund (GF) P2,951,846,446.35 P2,788,268,833.85 P2,189,449,519.59 P2,020,332,171.52
Special Education
381,298,495.00 280,451,855.00 296,497,156.43 92,406,197.26
Fund (SEF)
Sub-total 3,333,144,941.35 3,068,720,688.85 2,485,946,676.02 2,112,738.78
Continuing Appropriation
GF 494,051,178.78 553,413,273.00 68,369,434.70 193,358,899.55
SEF 96,752,745.20 58,821,509.00 16,110,000.00 -
Sub-total 590,803,923.98 612,234,782.00 84,479,434.70 193,358,899.55
Total 3,923,948,865.33 P3,680,955,470.85 2,570,436,110.72 P2,306,685,268.33

The total revenue of P2.719 billion collected during the year was sourced from the
following:

Particulars GF SEF Total

Tax Revenue P1,972,914,104.04 P345,349,220.80 P2,318,263,324.84
Service and Business Income 333,234,066.03 9,466,138.70 342,680,204.73
Shares, Grants and Donations 51,139,494.75 - 51,139,494.75
Other Income 6,466,073.76 - 4,434,447.76
Total P2,363,753,708.58 P354,875,487.50 P2,718,629,196.08

C. Operational Highlights

Enumerated hereunder are the highlights of the reported accomplishments of

San Juan City for CY 2022.

Economic Development

• Conducted In-house Skills and Livelihood Training Programs;

• Offered employment opportunities through job fairs including in-house hiring and
mega job fair, Special Program for the Employment of Students (SPES),
Department of Labor and Employment (DOLE) Government Internship Program
(GIP); and

• Launched digital/online payment, in partnership with Starpay, the official online

payment platform of the City’s Business Permit and Licensing Office

Environment Development

• Launched the “Kuha sa Tingi” Project – A Zero Waste Campaign created to help
address the plastic pollution crisis by establishing refilling stations in sari-sari
stores instead of selling items in sachets; and

• Facilitated and conducted continuous capability building and development –

training, seminars, drills and continuing educational programs for climate change
adaptation and mitigation, emergency response and disaster preparedness

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Institutional Development

• Garnered 4th in NCR and 10th place in the Philippines in the Collection Efficiency
of Locally Sourced Revenues – Cities category with 120.8 per cent collection
efficiency for FY 2021; and 3rd in NCR and 8th place in the Philippines Year on
Year Growth in Localy Sourced Revenues for FYs 2020 to 2021 – Cities category
with 12.7 per cent growth rate awarded by the Bureau of Local Government
Finance;

• Launched the E-Learning Internet Subscription via Fiber Optic Connection for the
enrolled San Juan City residents public school learners, teachers and non-
teaching personnel;

• Installed 363 units of 55 inches smart television for the use of all public schools in
San Juan City; and

• Distributed school bags, supplies and materials, printed learning modules to

public school learners

Infrastructure Development

• Inauguration of 4-storey multi purpose building with wooden covered basketball

courts in Pinaglabanan Elementary School and Barangay West Crame;

• Groundbreaking of multi purpose building with wooden covered basketball courts

in Barangay Ermitaño and San Juan National High School; and

• Various repair and improvement of streetlights, drainages and roads in the City.

Social and Health Services

• Continuous provision of free medicines to all San Juanenos at the medicine

booth located in the Atrium of San Juan City Hall;

• Launched drive-thru and house to house booster shot, established satellite

COVID-19 vaccination sites in all barangay halls and 13 public schools in San
Juan City and ranked first among all the vaccination sites in the NCR on the first
day of launch of the 5 to 11 pediatric vaccination program on February 7, 2022;

• Provided annual cash benefits to registered senior citizens and indigent PWDs
and educational assistance to children of solo-parents of San Juan City; and

• Continuous distribution of food packs (19th and 20th wave) for all households of
San Juan City.

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D. Scope and Objectives of Audit

The audit covered the accounts and operations of the City of San Juan for the period
January to December 31, 2022. The objectives of the audit are to: (a) be able to lend
credence to Management’s assertions on the financial statements; (b) recommend
agency improvement opportunities; (c) determine compliance with existing laws,
rules and regulations; and (d) determine the extent of implementation of prior years’
audit recommendations.

E. Auditor’s Opinion on the Financial Statements

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

statements due to the deficiencies noted in audit that materially affected the
balances/totals of certain accounts, which are discussed in detail in Part II of the
report and summarized as follows:

1. The carrying amount of the Property, Plant and Equipment (PPE) accounts of
P2.762 billion as at year end, excluding Construction in Progress (CIP) accounts,
was unreliable due to unreconciled variance of P416.622 million between the City
Accounting Department (CAD) records and the City General Services
Department (CGSD) Report on the Physical Count of Property Plant and
Equipment (RPCPPE) due to: (a) PPE items described as “Beginning Balances”
and “Various” in the total amount of P284.715 million; (b) PPE items included in
the RPCPPE but not in the books worth P38.826 million; (c) PPE recorded in the
books but not in the RPCPPE amounting to P169.861 million; and (d)
discrepancies on the reported cost and quantities of PPE items totaling P1.240
million, contrary to Section 491, Volume I of the Government Accounting and
Auditing Manual (GAAM).

We reiterated our recommendation that Management consider the remedies

under COA Circular No. 2020-006 on one-time cleansing of PPE account to
resolve the noted deficiencies and to fairly present the balance of PPE account in
the financial statements.

We likewise recommended that Management require the CGSD and CAD to

facilitate the review, verification and reconciliation of the noted deficiencies in the
balance of the PPE accounts and effect the necessary adjustments pursuant to
COA Circular No. 2020-006.

2. The accuracy and validity of the year-end balance of inventory accounts

amounting to P57.397 million could not be relied upon due to: (a) inclusion of
issued inventory items worth P20.227 million; (b) semi-expendable items users
amounting to P3.097 million; (c) inventory items not covered by Requisition and
Issue Slip (RIS) totaling P24.912 million. Further, procured inventory items in the
amount of P3.616 million were not recognized in the books contrary to Section
491, Volume I of Government Accounting and Auditing Manual (GAAM), COA
Circular No. 2005-002, Sections 41, Volume II and 122 (f), (g) and (h), Volume I
of Manual on New Government Accounting System (MNGAS) for LGUs. Thus,

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 the existence of unreconciled net discrepancy of P4.165 million between the
accounting records and Report of the Physical Count of Inventories (RPCI).

We recommended that Management require:

a. The CGSD to:

• Ensure all issuances of inventories are duly supported by RIS and

reported in the Summary of Supplies Materials Issued and forwarded to
CAD for recording in the books;

• Facilitate the submission of the AIR and other supporting documents to

the CAD for the recording of delivered inventory items pursuant to
Section 122, Chapter 7, Volume I of MNGAS for LGUs;

b. The CAD to:

• Coordinate with the CGSD for the submission of pertinent documents of

year-end procured and delivered inventories for its immediate recording
in the books of accounts;

• Remove from the inventory accounts all semi-expendable items already

issued to the end-users and record the same to the appropriate expense
accounts pursuant to COA Circular No. 2005-002;

c. The CAD and CGSD to regularly conduct reconciliation of their records,

including year-end reports, pursuant to Section 491, Volume I of GAAM, and
effect necessary adjustments; and

d. The CGSD to include in the inventory count only inventory items not yet
issued and still found in their possession and custody.

F. Significant Audit Observations and Recommendations

1. The inability of San Juan Medical Center (SJMC) PhilHealth Division to promptly
file the 3,260 reimbursable claims amounting to P58.935 million as well as the
existence of 715 Denied Claims amounting to P12.055 million contrary to Section
46 of the Revised IRR of RA No. 7875, exposes the City Government to possible
loss of income totaling P70.990 million as of December 31, 2022.

We reiterated our recommendations that Management:

a. Assign adequate, properly trained and dedicated personnel to the SJMC

PhilHealth Division to help and assist in the processing and encoding of
reimbursement claims to ensure the timely submission/filing of the same to
PhilHealth; and

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 b. Require the SJMC PhilHealth Division to strictly file the claims within the
reglementary period as provided under Section 46 of the Revised IRR of
NHIA and Item V (G)(1) of PhilHealth Circular No. 2020-0007, whichever is
applicable.

2. The premium contributions and loan repayments of City employees amounting to

P11.784 million, P137,603.31 and P0.790 million (net of remittances for January
2023) were not remitted within the prescribed period to the Government Service
Insurance System (GSIS), Pag-IBIG Fund and PhilHealth which could result to
the imposition of interest and penalties, and affect the employees benefits and
privileges due them. Further, the noted discrepancies in the SL and sub-
accounts, existence of negative and dormant balances on the Due to GSIS, Due
to Pag-IBIG and Due to PhilHealth accounts rendered doubtful the accuracy of
the year-end balances of the subject accounts.

We recommended that Management require the CAD to:

a. Promptly remit in full the monthly premium contributions and loan repayments
withheld from employees to the GSIS, Pag-IBIG and PhilHealth as prescribed
by laws, rules and regulations; and

b. Conduct immediate analysis and reconciliation on the noted discrepancies

between the SLs and Sub-accounts as well as the negative and dormant
balances on the Due to GSIS, Due to Pag-IBIG and Due to PhilHealth
accounts and effect the necessary adjustments to correct the same.

3. The withholding of business taxes from the claims of contractors/suppliers with

no operating branch or sales outlet within the City amounting to P1.244 billion,
and the collection of annual City Supplier’s Regulatory Fee (CSRF) and Mayor’s
Permit Fee (MPF) of P2,500.00 from business enterprises dealing business with
the City were not enforced by the Management due to the absence of
Implementing Rules and Regulations (IRR) of Sangguniang Panlungsod of San
Juan City Ordinance No. 8, s. 2020.This resulted to foregone income of
undetermined amount of business taxes, as well as CSRF and MPF amounting
to P237,500.00 for CYs 2021 and 2022.

We recommended that Management require the concerned City officials to

facilitate the preparation/formulation of the IRR of City Ordinance No. 8, s. 2020,
and to submit the same to the Sangguniang Panlungsod for approval of
resolution adopting the same, to have basis in the proper and efficient
implementation of the subject Ordinance.

4. The City was not able to implement 29 essential Disaster Risk Reduction
Management (DRRM) PPAs with an appropriated amount of P89.022 million, and
registered only 20.01 per cent utilization rate on the 12 PPAs with a total budget of
P36.419 million contrary to RA No. 10121, hence, could affect the full attainment of
the City’s objective in mitigating the impacts of disaster.

We reiterated our recommendation that Management require the City Disaster

Risk Reduction and Management Office (CDRRMO) to timely implement and
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 closely monitor the efficient implementation of all its planned DRRM PPAs to
achieve maximum utilization of allocated funds towards the attainment of its
objectives of mitigating the impacts of disaster.

The aforementioned observations together with the corresponding recommendations

were discussed with Management officials concerned during the Exit Conference on
May 10, 2023. Management views and comments were incorporated in the report,
where appropriate.

G. Summary of Audit Suspensions, Disallowances and Charges

Suspensions and Disallowances totaling P21.812 million remained outstanding,

unsettled and under appeal as of December 31, 2022.

This Period
Beginning Ending Balance
01 January to 31 December
Particulars Balances As of 31
2021
December 2022
01 January 2022 NS/ND/NC NSSDC
Notice of Suspension P 16,783,566.89 - - P 16,783,566.89
Notice of
5,028,731.83 - - 5,028,731.83
Disallowance
Notice of Charge - - - -
Total P 21,812,298.72 - - P 21,812,298.72

H. Status of Implementation of Prior Years’ Audit Recommendations

Of the 74 audit recommendations contained in the previous years’ Annual Audit

Reports, 57 or 77.03 per cent were fully implemented, nine or 12.16 per cent were
partially implemented and eight or 10.81 per cent were not implemented during the
year.

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