Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. X
Cagayan de Oro City

OFFICE OF THE AUDIT TEAM LEADER

NGAS Cluster 7, Team 02

MEMORANDUM

FOR : JOSIE J. RODRIGUEZ

State Auditor V
Regional Supervising Auditor
This Sector
Commission on Audit – Region 10
Cagayan de Oro City

FROM : SHEILA MAY E. TONIDO

State Auditor III
This Office

SUBJECT : Audit Opinion on the Financial Statements of DPWH Cagayan de Oro City
1st District Engineering Office for Calendar Year 2022

DATE : March 1, 2023

In compliance with Section 2, Article IX-D of the Philippine Constitution and Section
43 of Presidential Decree No. 1445, we have audited the accounts and operations of Fund
Clusters 01 and 07 of the Department of Public Works and Highways, Cagayan de Oro City –
1st District Engineering Office (DPWH CDOC 1 st DEO), Bulua, Cagayan de Oro City for the
year ended December 31, 2022.

The audit was conducted in accordance with International Standards of Supreme

Audit Institutions (ISSAIs), on a test basis, to ascertain the propriety of financial transactions
and compliance by the Agency to prescribed laws, rules and regulations. It was also made to
ascertain the accuracy of financial records and reports and the fairness of the presentation of
the financial statements. Further, it was also aimed to determine whether plans and programs
and activities were economically, efficiently, and effectively accomplished.

The attached letter consists of Introduction, Summary of Significant Observations and

Recommendations, Detailed Observations and Recommendations, Status of Implementation
of Prior Years’ Audit Recommendations, and the Audited Financial Statements.

In our opinion, the accompanying financial statements present fairly, in all material
respects, the statement of financial position of the DPWH CDOC 1 st DEO as of December 31,
2022, and its statement of financial performance, statement of cash flows, statement of
changes in net assets/equity, statement of comparison of budget and actual amounts for the
year then ended, and notes to financial statements, including a summary of significant
accounting policies in accordance with International Public Sector Accounting Standards
(IPSAS).

Our audit was conducted in accordance with International Standards of Supreme

Audit Institutions (ISSAI). We are independent of the Agency in accordance with the Revised
Code of Conduct and Ethical Standards for Commission on Audit Officials and Employees
(Code of Ethics) together 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 and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our unqualified opinion.

We acknowledge the cooperation extended to us by Management officials and staff of

DPWH CDOC 1st DEO for Calendar Year 2022.
 Republic of the Philippines
COMMISSION ON AUDIT
Regional Office No. X
Cagayan de Oro City

OFFICE OF THE REGIONAL SUPERVISING AUDITOR

National Government Audit Sector – Cluster 7

MEMORANDUM

FOR : ATTY. REYNALDO C. DARANG

Supervising Auditor
This Sector
Department of Public Works and Highways – Central Office
Bonifacio Drive, Port Area, Metro Manila

FROM : JOSIE J. RODRIGUEZ

State Auditor V
This Office

SUBJECT : Audit Opinion on the Financial Statements of DPWH Cagayan de Oro City
1st District Engineering Office for Calendar Year 2022

DATE : March 1, 2023

We are pleased to transmit the Management Letter of Department of Public Works

and Highways, Cagayan de Oro City – 1st District Engineering Office (DPWH CDOC 1 st
DEO), Bulua, Cagayan de Oro City for Calendar Year 2022 in compliance with Section 2,
Article IX-D of the Philippine Constitution and Section 43 of Presidential Decree No. 1445,
otherwise known as Government Auditing Code of the Philippines.

The audit was made to: (a) ascertain the degree of reliance that may be placed on
management’s assertions on the financial statements; (b) determine the propriety of
transactions as well as the extent of compliance with applicable laws, rules and regulations;
(c) recommend agency improvement opportunities; and (d) determine the extent of
implementation of prior years’ audit recommendations.

Deficiencies noted in the course of the audit were earlier communicated through
Audit Observation Memoranda (AOMs). Their comments were incorporated in the attached
letter, where appropriate.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our

audit. We conducted our audit in accordance with International Standards of Supreme Audit
Institutions (ISSAIs). Those standards require that we comply with the ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatements.
 We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our unqualified opinion.

In our opinion, the accompanying financial statements present fairly, in all material
respects, the statement of financial position of the DPWH CDOC 1 st DEO as of December 31,
2022, and its statement of financial performance, statement of cash flows, statement of
changes in net assets/equity, statement of comparison of budget and actual amounts for the
year then ended, and notes to financial statements, including a summary of significant
accounting policies in accordance with International Public Sector Accounting Standards
(IPSAS).

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial
statements in accordance with IPSAS, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from
materials misstatements, whether due to fraud or error.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objective is to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatements, 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 material misstatements when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial
statements.

As part of an audit in accordance with ISSAIs, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:

 Obtain an understanding of internal control relevant to the audit in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of DPWH CDOC 1 st DEO’s internal
control.

 Identify and assess the risks of material misstatements of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.

 Apply the concept of materiality both in planning and performing the audit, and in
evaluating the effect of identified misstatements on the audit and of uncorrected
misstatements, if any, on the financial statements.
 Obtain sufficient appropriate audit evidence regarding the financial information of the
entity or its business activities to express an opinion on the financial statements.
 Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.

 Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.

 We are responsible for the direction, supervision and performance of the audit. We
remain sole responsible for our audit opinion.

 We also have communication and reporting responsibilities to users, management,

those charged with governance, or parties outside the agency, in relation to matters
arising from the audit.