EXECUTIVE SUMMARY

INTRODUCTION

The Municipality of Asingan is a second class municipality that was founded in 1689 by
the Spaniards. It is geographically located in the eastern part of the Province of
Pangasinan with 21 Barangays and a total population of 57,355 based on the latest
census of the Philippine Statistics Authority Office.

The executive branch of the Municipality is under the able leadership of ENGR.
CARLOS F. LOPEZ, JR as the Municipal Mayor and the legislative branch is headed by
Honorable HEIDEE L. GANIGAN-CHUA as Municipal Vice Mayor.

FINANCIAL HIGHLIGHTS

The Financial Position, the Results of Financial Performance, Sources of Funds,

Appropriations and Obligations of the Municipality of Asingan during the year 2019 are
presented in Annexes A to A.3. Its summary which is compared to 2018 is presented
below:

Increase
2018 2018 %
(Decrease)
Assets ₱362,490,715.77 ₱343,182,802.36 19,307,913.41 05.62%
Liabilities 66,240,603.73 87,941,795.89 (21,701,192.16) (24.67%)
Government Equity 296,250,112.05 255,241,006.47 41,009,105.58 16.06%
Income 165,870,764.77 151,470,138.02 14,400,626.75 09.50%
Expenses 140,888,954.36 126,943,999.65 13,944,954.71 10.98%

OPERATIONAL HIGHLIGHTS

The Municipality of Asingan is envisioned to be a self-reliant, ecologically- balanced

and orderly community through promotions of Agri-Industrial, trading and tourism
development, under a righteous, dedicated public servants and strong-willed leadership
and a mobilized civil society. Among its major accomplishments which had been
validated by the Audit Team are as follows:

No. Program/Project/Activity Amount Status

1 Construction of Two-Storey Multi-Purpose
Building (Women’s Center) Phase II 5,998,846.27 Completed
2 Improvement of Municipal Promenade 3,495,592.50 Completed
3 Upgrading of Local Access Road at
Barangays Carosucan Norte- Carosucan Sur, 4,597,512.74 Completed
Asingan, Pangasinan
 No. Program/Project/Activity Amount Status
4 Upgrading of Local Access Road at
Barangays Coldit- San Vicente West, 5,041,694.49 Completed
Asingan, Pangasinan
5 Construction of Footbridge at Barangay
Sanchez, Asingan, Pangasinan 1,998,774.69 Completed
6 Construction of Steel Bridge at Barangay
Coldit, Asingan, Pangasinan 1,103,808.00 Completed

For CY 2019, the Municipal Government was a recipient of various awards and
recognition for its endeavours, as follows:

 Seal of Good Local Governance

 Child Friendly Municipality

SCOPE OF AUDIT

The audit covered the operation of the Municipality of Asingan for calendar year 2019.
The types of audit employed consist of financial and compliance audit to ascertain the
fairness of presentation of the financial statements of the Municipality in adherence to
the Philippine Public Sector Accounting Standards and to check agency’s compliance
with existing laws, rules and regulations. Likewise, a Value for Money Audit was
conducted on selected areas to ascertain whether management had attained its goal and
objectives in an economical, efficient and effective manner.

The audit focus and audit thrust areas mentioned in the 2019 General Audit Instructions
by the Local Government Sector of Assistant Commissioner Joseph B. Anacay and
reiteration of the 2018 specific audit instructions of Regional Director, COA regional
Office No. I, were observed and looked into in addition to the thrust areas identified in
the audit team’s risk assessment.

OPINION OF THE AUDITOR ON THE FAIRNESS OF THE PRESENTATION

OF THE FINANCIAL STATEMENTS

The Auditor rendered qualified opinion on the financial statements because the accuracy
and reliability of the total Property, Plant and Equipment (PPE) accounts of the
Municipality of Asingan, amounting to ₱ 243,494,480.06 as of December 31, 2019
could not be readily ascertained due to non-conduct of annual physical count and non-
submission of Report on Physical Count of Property, Plant and Equipment (RPCPPE).
Also, the accuracy of the carrying amount of the Road Networks account totaling ₱
61,472,326.13 could not be ascertained and its existence could not be established due to
failure of the management to: (a) conduct physical count and submit the Report on the
Physical Count of the Road Network System; (b) maintain a Local Road Inventory and
Road Map; and (c) keep a complete Local Road Network Property Card.
SUMMARY OF SIGNIFICANT AUDIT OBSERVATIONS AND
RECOMMENDATIONS

We are pleased to observe favourable actions made by the Municipal Government, the
most notable of which are 1) Compliance with Tax Laws by consistently withholding
the taxes due to the government on any payment made 2) the Allocation of ₱
13,822,231.62 for Gender and Development Plan and Budget which is more than 5% of
the total Annual Budget 3) Unutilized balance of Quick Response Fund (QRF) and
DRRM Fund – MOOE at the end of the year were transferred to Trust Liability –
DRRM account in the Trust Fund Book 4)No Outstanding Long Term Debt, and 5)
Insurable properties such as buildings and motor vehicles are insured with the GSIS.

However, 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 March 13, 2020. Management comments were incorporated in
the report where appropriate. The most significant of which are as follows:

1. No annual physical count/inventory of all its property, plant and equipment has been
conducted, contrary to the provisions of Section 124 of COA Circular No. 2002-003,
thus rendered the assertions of management as to the accuracy and reliability of PPE
account doubtful contrary to IPSAS No. I requiring the faithful representation of
Financial Statements.

We recommended that the LGU strictly adhere to the provisions of the established
accounting and auditing standards as discussed in the foregoing paragraphs in order
that the PPE account could be accurately and reliably presented in the Financial
Statements. It is therefore paramount that the LGU address the deficiencies noted.

We recommended further the physical count of property, plant and equipment and
prepare and submit immediately the result of inventory conducted.

2. The accuracy of the carrying amount of the Road Networks account amounting ₱
61,472,326.13 could not be ascertained and its existence could not be established
due to failure of the management to: (a) conduct physical count and submit the
Report on the Physical Count of the Road Network System; (b) maintain a Local
Road Inventory and Road Map; and (c) keep a complete Local Road Network
Property Card contrary to the provision of Section VI of COA Circular 2015-008
dated November 5, 2015.

Based from the noted deficiencies, we recommended for the Municipal Treasurer/
General Services Officer to periodically render Report on Local Road Networks, and
furnish copies to the concerned offices. Also, Municipal Engineer’s Office should
provide the Municipal Accountant and the Municipal Treasurer/General Services
Officer with the complete description and cost segregation of road components for
road projects.
 We also recommended the Management to create an inventory committee to conduct
the physical count of public infrastructures, especially the local road networks and
ensure coordination among LGU Offices to properly implement the accounting and
reporting guidelines of COA Circular 2015-008 dated November 5, 2015.

3. Construction of New Slaughterhouse and installation of equipment at Satellite

Market, Barangay Toboy amounting ₱ 2,890,000.00 remained unfinished despite the
expiration of the contract, thus, depriving the Municipality of its intended benefits
and defeating the purpose of the fund where the project was appropriated.

We recommended that Management should impose liquidating damages to the

defaulting contractor, cause the forfeiture of the contractor’s performance security,
terminate the contract pursuant to Section III-A(2) of guidelines on termination of
contract under GPPB Resolution No. 018-2004, and ensure that all infrastructure
projects are strictly monitored in accordance with the plans and schedules of
implementation so that available remedies can be imposed against erring contractors.

Summary of Total Audit Suspensions, Disallowances and Charges (SASDC)

As of December 31, 2019, the Statement of Suspensions, Disallowances and Charges

showed the following balances:

Notice of Suspensions 0.00

Notice of Disallowances ₱1,741,150.23
Notice of Charges 0.00

STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT

RECOMMENDATIONS

Out of the fifteen (15) audit recommendations in the 2018 Annual Audit Report four
were fully implemented, 2 were partially implemented and nine were not implemented.