EXECUTIVE SUMMARY

Introduction

Tigbauan is a second-class municipality in the Province of Iloilo. It is composed of 52

barangays. The total land area of the Municipality is about 8,889 hectares, with a total
population of 62,353. Of the total 8,889 hectares, 93.78% is devoted to agriculture and allied
activities. Of this area, 1,077 hectares are planted with coconut while 4,554 hectares with rice
and 19 hectares are devoted to fishpond. Around 60 hectares are located in urban barangays,
classified as either residential, commercial, or institutional.

The Municipality has a flat terrain. The plain is approximately 57% of the total area, covering
about 6,667 hectares along the northwest site of the Sibalom River. Along the boundaries of
Guimbal, Leon, and Tubungan are rolling hills covering an area of about 1,518 hectares. The
Municipality has no forest cover.

As a local government unit, the Municipality operates under the mandate of Republic Act
No. 7160, otherwise known as the Local Government Code of 1991.

The personnel complement of the Municipality as of December 31, 2020, totaled to 212,
composed of 12 elective officials, 113 permanent employees, 5 coterminous, and 82 job
order/contract of service.

Vision Statement

A center of agri-fishery with progressive, competitive and God-loving people, in a historically-

rich, socially protective and ecologically-balanced environment with service-oriented,
transparent, and accountable public servants working towards a first-class municipality.

Mission Statement

• To boost agricultural and fishery development programs for a self-reliant community.

• To promote and support the preservation of all historical and tourism sites for all the future
generation to appreciate.
• To enhance spiritual and moral values upliftment and general welfare of all the sectors of
the community.
• To develop awareness on all environmental concern and create programs and policies to
address them.
• To have a participatory, service-oriented with transparency and accountability governance
and restore the trust and confidence of the whole community to their public servants.

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Highlights of Financial Operation

The Municipality’s assets, liabilities, and residual equity as of December 31, 2020, amounted
to ₱545.798 million, ₱141.724 million, and ₱404.074 million, respectively. Comparison with
the previous year’s totals is graphically presented below:

Statement of Financial Position

600,000,000.00

500,000,000.00

400,000,000.00
In Pesos

300,000,000.00

200,000,000.00

100,000,000.00

-
Assets Liabilities Equity
2020 545,797,768.42 141,724,151.30 404,073,617.12
2019 484,190,596.99 138,160,319.66 346,030,277.33

For CY 2020, the Municipality generated a total income of ₱203.139 million, which is
16.92 percent or ₱29.400 million higher compared to last year’s income of ₱173.738 million.
Total expenses incurred amounted to ₱138.272 million, including transfers, assistance, and
subsidy, generating an excess of income over expenses of ₱64.867 million at the end of the
year, which correspondingly increased by 36.17 percent or ₱17.230 million from last year’s
figure of ₱47.637 million.

Statement of Financial Performance

250,000,000.00

200,000,000.00
In Pesos

150,000,000.00

100,000,000.00

50,000,000.00

-
Total Revenue Total Expenses Surplus
2020 203,138,685.62 138,271,672.87 64,867,012.75
2019 173,738,435.70 126,100,958.18 47,637,477.52

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The following graph illustrates the increase of Appropriations, Allotments, and Obligations
during the year:

Allotments, Appropriations, and Obligations

350,000,000.00

300,000,000.00

250,000,000.00
In Pesos

200,000,000.00

150,000,000.00

100,000,000.00

50,000,000.00

-
Appropriations Allotments Obligations
2020 272,464,964.54 301,776,855.12 178,779,367.71
2019 209,356,764.15 231,069,890.32 166,398,927.06

Scope of Audit

The audit covered the accounts and operations of the Municipality of Tigbauan, Province of
Iloilo, for the year ended December 31, 2020. The audit was conducted to determine the
reliability of the accounts of the Local Government Unit (LGU) in order to express an opinion
on the fairness of presentation of the financial statements as well as to determine whether or
not the LGU transactions were made in accordance with existing laws, rules and regulations
in the utilization of resources.

Auditor’s Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the financial
statements as the accuracy and existence of Inventories, Property, Plant, and
Equipment (PPE), and Biological Assets accounts with total carrying amounts of
₱20.780 million, ₱241.827 million, and ₱310,335.00, respectively, as of December 31, 2020,
could not be verified, and the variance from last year of ₱37.147 million between the Report
on the Physical Count of Property, Plant, and Equipment (RPCPPE) and accounting records
remained unreconciled due to the non-conduct of annual inventory count and non-submission
of the reports on the result of the physical count.

For the above exception, we recommended that the Local Chief Executive direct the General
Services Office or the Inventory Committee to exhaust efforts and measures to conduct a
complete physical inventory of the Municipality’s assets and submit the RPCPPE, among
others, not later than January 31 of each year, in order for the accuracy and existence of PPE
accounts to be verified in a timely manner.

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We also recommended that the General Services and the Accounting Offices cause the
reconciliation of the results of actual physical count with the property and accounting records
pursuant to the pertinent provisions of COA Circular No. 2020-006. The discrepancies
between the inventory reports and the accounting records should be investigated, reconciled,
and adjusted.

Other Significant Audit Observations and Recommendations

1. Cash and in-kind donations from private individuals and organizations during the
quarantine period were not properly acknowledged, recorded, accounted for, and reported
by the Municipality as required in COA Circular Nos. 2014-002 and 2020-009, thereby
tainting not only the completeness and integrity of the receipt, utilization, and distribution
of the said donations, but also the overall efficiency and effectiveness of its COVID-19
response measures.

We recommended that the Local Chief Executive ensure that all future donations during
the implementation of community quarantine or state of calamity, whether in cash or in
kind, are properly received/acknowledged, recorded, accounted for, utilized, distributed,
and reported without necessarily disregarding basic controls and issuances governing
donations or aids during a disaster or pandemic.

2. Cash advances of ₱1.521 million remained unliquidated as of December 31, 2020,

contrary to pertinent provisions of Commission on Audit (COA) Circular No. 97-002, thus
exposing government funds to misuse or misapplication.

We recommended that the Local Chief Executive direct all the concerned officials and
employees to cause the immediate liquidation of their unliquidated cash advances.

We also recommended that the OIC – Municipal Accountant refrain from allowing the
granting of another cash advance to any official or employee with pending settlement or
liquidation.

We further recommended that demand letters be sent to the concerned employees

especially to those whose cash advances have been outstanding for more than two
months already.

3. Receivable accounts used to record some of the cash advances granted to officers and
employees were not in accordance with the Revised Chart of Accounts for Local
Government Units (RCALGU), thereby rendering the accuracy of the accounts’
presentation in the financial statements doubtful.

We recommended that the OIC – Municipal Accountant Local adhere to the prescribed
Chart of Accounts for the proper recording and classification of transactions and accounts.

We also recommended that the OIC – Municipal Accountant effect the proposed adjusting
journal entries to reclassify the receivable accounts.

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4. Repairs and maintenance of equipment and motor vehicles totaling ₱1.020 million were
not supported with documents indicating their history of repair, contrary to COA Circular
No. 81-131-A and Section 9.1.3.4 of COA Circular No. 2012-001; thus, the necessity and
extent of repairs of a particular motor vehicle or equipment could not be assessed or
identified.

We recommended that the General Services Office maintain a repair and maintenance
record/history of each equipment/vehicle owned and/or operated by the Municipality to
avoid unnecessary repair and maintenance expenses. We suggest that a repair history
form be devised, indicating the type of repair undertaken, the date when it was made, and
other pertinent data for the information and guidance of the COA, the agency, and others
concerned.

We further recommended that the repair and maintenance history/record be attached to

disbursement vouchers for repairs and maintenance expenses as supporting documents.

Summary of Suspensions, Disallowances and Charges

Total unsettled suspensions, disallowances, and charges as of December 31, 2020, are
summarized below:

Particulars Amount
Suspensions ₱1,790,967.01
Disallowances 9,153,886.20
Charges 0.00
Total ₱10,944,853.21

Status of Implementation of Prior Year’s Audit Recommendations

Of the 40 audit recommendations embodied in the previous years’ Annual Audit Reports,
17 were fully implemented, 15 were partially implemented, and 8 were not implemented.