EXECUTIVE SUMMARY

A. INTRODUCTION

The Municipality of Asingan is a second-class municipality that was created

under a Spanish Royal Decree issued in 1782. Located in the eastern part of the Province
of Pangasinan with 21 Barangays, it has a total population of 57,811 based on the latest
census of the Philippine Statistics Authority. Based on these figures, the population
density is computed at 868 inhabitants per square kilometer.

The Municipality has a land area of 66.64 square kilometers which is bounded by
the Municipalities of Binalonan and San Manuel on the north, the City of Urdaneta on the
west, Municipalities of Santa Maria and Villasis on the south and the Municipality of
Tayug on the east. It is located 197.40 kilometers from Manila and 50.30 kilometers from
Lingayen.

The Municipal Government is committed to improving the living conditions of its

citizenry under a sustainable environment conducive to Agri-Industrial and other
development efforts, thereby creating a better place to live in for a healthy, educated,
empowered, God-Centered, and peace-loving constituents. It also envisions to be a self-
reliant, ecologically balanced and orderly community through the promotions of Agri-
Industrial, trading and tourism development, under a righteous, dedicated public servants
and strong-willed leadership and a mobilized civil society.

According to Gov.ph, the LGU-Asingan ranks 115th for CY 2022, 44 higher than
last year’s 159th among 508 1st to 2nd class municipalities with an overall score of 31.21.
Comparative data for CY 2022 and 2021 shows the following:

2022 2021
Rank Score Rank Score
Economic Dynamism 272nd 4.1903 200th 4.8405
Local Economy Size 253rd 0.0035 358th 0.0054
Local Economy Growth 19th 0.0000 137th 0.0031
Active Establishments in the Locality 244th 0.1840 79th 0.4586
Safety Compliant Business 3rd 0.0000 196th 0.1709
rd th
Employment Generation 203 0.0912 118 0.1790
Cost of Living 43rd 1.7981 27th 1.3750
Cost of Doing Business 120th 1.8810 12th 2.3706
Financial Deepening 269th 0.1611 342nd 0.1226
th th
Productivity 236 0.0446 304 0.0516
Presence of Business and Professional
Organization 84th 0.0268 142nd 0.1036

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 For CY 2022, the Municipality had 344 employees, consisting of 113 permanent
employees, 13 casual, four co-terminus and 202 employees with contracts of service and
twelve elected officials headed by the Municipal Mayor Carlos F. Lopez Jr., and Vice
Mayor Heidee L. Ganigan-Chua.

We conducted our audit in accordance with International Standards of Supreme

Audit Institutions (ISSAIs). The audit covered the operations of the Municipality for the
CY 2022. A financial and compliance audit was conducted to examine the propriety of
its transactions, and the reliability and accuracy of financial reports and books of
accounts. A performance audit was also included to determine whether agency objectives
were attained in an economical, efficient and effective manner.

B. OPERATIONAL HIGHLIGHTS

Major infrastructure projects completed by the Municipal Government of Asingan

for CY 2022 were as follows:

Status of
No. Project/Program/Activity Name Location Total Cost
Implementation
Domanpot
Bobonan
Widening/Construction/Continuation of
Dupac
1 Farm to Market Road in various 7,393,602.09 Completed
Carosucan Sur
barangays
Ariston East
Carosucan Norte
Construction/Continuation/Rehabilitation Poblacion West
2 of Multi-Purpose Hall in various Poblacion East 7,198,589.05 Completed
barangays Calepaan
Construction/Continuation of Local Coldit
3 3,499,394.63 Completed
Access Road in Varoius Barangays Calepaan
Rehabilitation/Improvement Communal
4 Coldit 2,985,000.00 Completed
Irrigation System
Rehabilitation/Repair/Construction of
5 Asingan 2,098,765.34 Completed
Municipal Buildings
Palaris
Construction of Roads in Various
6 Sobol 1,996,451.69 Completed
Barangays
Macalong
Construction of Washing and
7 Tooth Brushing Area of Child Asingan 1,499,571.85 Completed
Development Center

Among the awards received by the Municipality for the CY 2022 were the
following: a) Certified Most Sustainable and Livable Municipality Award during the
Nation Builders and Mosliv Awards 2022, b) Gawad Kalasag Seal of Excellence with
1.70 rating in Gawad Kalasag Seal For LDRRMCOs Category, c) 2022 Anti-Drug Abuse
Council Performance Audit Regional Award by PDEA Region I, and d) Seal of Good
Local Governance National Level from DILG.

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C. FINANCIAL HIGHLIGHTS

The financial position, financial performance and source and utilization of funds,
appropriations, obligations and disbursements of the Municipality of Asingan for
calendar year (CY) 2022, with comparative figures for CY 2021 are as follows:

Figures in (₱)
Accounts Increase % of
2022 2021 (As restated)
(Decrease) Change
Assets 562,642,138.23 470,964,402.14 91,677,736.09 19.47%
Liabilities 116,737,560.10 74,498,783.82 42,238,776.28 56.70%
Government Equity 445,904,578.13 396,465,618.32 49,438,959.81 12.47%
Income 198,465,228.69 53,747,358.50 27.08%
252,212,587.19
Expenses 210,353,293.77 165,218,207.64 45,135,086.13 27.32%
Appropriation 318,714,919.78 232,259,037.73 86,455,882.05 37.22%
Obligations 243,816,870.25 202,267,103.89 41,549,766.36 20.54%
Disbursements 252,252,977.55 254,181,869.54 (1,928,891.99) -0.76%

Detailed financial statements presented by fund are attached in Annexes A – A.4.

D. SCOPE OF AUDIT

The audit covered the operation of the Municipality of Asingan for CY 2022. It
was conducted to ascertain the fairness of presentation of the financial statements, check
compliance with existing rules and regulations and determine whether management in the
implementation of its programs, projects and activities has attained its goals and
objectives in an economical, efficient and effective manner.

The audit included analysis of accounts, review of transactions, test of compliance

with existing laws, rules and regulations, review of operating procedures, inspection of
programs and projects, interview of officials and employees and such other procedures
considered necessary under the circumstances.

E. AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

The Auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements of the Municipality of Asingan for CY 2022 with the net
understatement of Property, Plant and Equipment amounting to ₱4,566,886.78 due to the
following: a) non-recording of donated assets with fair value of ₱3,000,000.00, b)
capitalizable expenditures were charged against repairs and maintenance expense
amounting to ₱2,920,540.59, and c) understatement of accumulated depreciation
amounting to ₱1,349,488.24.

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F. SUMMARY OF SIGNIFICANT AUDIT OBSERVATIONS AND
RECOMMENDATIONS

Part II of the report contains audit observations and recommendations that need to
be addressed and were discussed with the management during the exit conference
conducted on May 26, 2023. Management comments were incorporated in the report
where appropriate. The most significant observations were as follows:

1. Absence of an internal policy on the acceptance and recording of assets

donated by other government agencies and from other sources resulted in the
non-communication of donations received amounting to ₱3,000,000.00 by
various departments of the Municipality to the Municipal Accountant,
preventing the latter from recording the said donations in the books of the
LGU.

We recommended that the Municipal Mayor adopts an internal policy on

donations received by the Municipality of Asingan through an executive order
for specific policies and procedures to be undertaken for the safeguarding and
recording of the said assets and for the concerned department heads to submit
the necessary documents to the Municipal Accountant for the recording of the
donated assets amounting to ₱3,000,000.00 in the books.

2. Provision for salvage/residual value is included in the computation for

depreciation of Road Networks totaling ₱153,846,562.86 which is not in
accordance with Item No. 15, Section IV of COA Circular No. 2015-008
thereby understating the related annual depreciation expense and total
accumulated depreciation by ₱562,272.41 and ₱1,349,488.24, respectively.

We recommended the Local Chief Executive direct the Municipal Accountant

to compute the depreciation of Road Networks in compliance with COA
Circular No. 2015-008 by not providing salvage/residual value to the
respective assets and to effect the necessary adjusting entry to restate the net
book value of the account.

3. Betterments and newly-constructed or installed assets totaling ₱2,920,540.59

and transactions not considered repairs or maintenance amounting to
₱28,782.06 were charged as Repairs and Maintenance Expenses contrary to
IPSAS 17 - PPE, consequently overstating the account and understating the
property, plant and equipment of the Municipality as well as the total
depreciation for the year.

We recommended that the Local Chief Executive require the Municipal

Accountant to observe the proper use of accounts in recording transactions, to
capitalize all major repairs and to effect the necessary adjusting entries to
reclassify these disbursements to proper Asset account

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 4. Absence of a prudent internal policy on the approval of request and
distribution of non-monetary donations to the component barangays and other
government agencies resulted in the lax process of donating properties and
inventory items totaling ₱2,733,200.60.

We recommended that the Local Chief Executive adopt an internal policy on

the approval, distribution, and monitoring of properties and inventory items
requested by other government agencies and component barangays through an
executive order to regulate the existing practice.

5. Significant information for disclosure in the Notes to Financial Statements

were not adequately provided as required under IPSAS 1 – Presentation of
Financial Statements, and as such, may potentially affect users of the
information from making effective decisions and informed judgments on the
Municipality Governments financial operations.

We recommended that the Local Chief Executive require the City Accountant
to provide the necessary information relative to the aforementioned accounts
in their corresponding Notes to Financial Statements to comply with the
disclosure requirements of IPSAS 1 for the ensuing year.

G. STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT

RECOMMENDATIONS

Of the 52 audit recommendations contained in the 2021 Annual Audit Report, 24

or 46.15% were implemented, and 28 or 53.85% were not implemented.

H. STATUS OF SETTLEMENT OF AUDIT SUSPENSIONS, DISALLOWANCES

AND CHARGES

As of December 31, 2022, the Statement of Suspensions, Disallowances and

Charges showed the following balances:

Notice of Suspensions -
Notice of Disallowances 1,708,768.63
Notice of Charges -

The balance of the Notice of Disallowances represents the disallowed fuel

expenditures for CY 2016-2018. Settlements of ₱37,034.90 were made during CY 2022.