EXECUTIVE SUMMARY

A. INTRODUCTION

Tayug was first organized as a municipality in the Province of Nueva Ecija on February
4, 1817. In 1837, Tayug was ceded to the Province of Pangasinan. In 1851, it was once
again incorporated with the Province of Nueva Ecija. Not until 1864 was Tayug again
made a part of Pangasinan.

Tayug is a third-class municipality composed of twenty-one (21) barangays with a total

land area of 5,124 hectares. According to the 2015 census, it has a population of 43,149
people. Commercial crops, livestock and poultry are the major products where people
derived their income. It is presently under the leadership of Honorable Mayor Carlos Trece
R. Mapili and Honorable Vice Mayor Lorna Primicias-Tacdol.

The local government unit is manned by 218 officials and employees scattered in the
different offices, to wit:
Number
Permanent 90
Casual 21
Job Order/Contract of Service 107
Total 218

B. OPERATIONAL HIGHLIGHTS

In line with its mission of promoting the general welfare of its constituents, the
Municipality implemented programs/ projects and activities. The most significant of
which were as follows:

PROJECT
PROJECT TITLE STATUS
COST (₱)
1. Rehabilitation of Barangay Roads, Tayug,
10,000,000.00 Completed
Pangasinan
2. Construction of Multi-Purpose Building at
1,000,000.00 Completed
Barangay Zamora, Tayug, Pangasinan

C. FINANCIAL HIGHLIGHTS

The financial position, financial performance, sources and utilization of funds,

appropriations and obligations of the Municipality for the calendar year (CY) 2020 with
corresponding figures for CY 2019 as follows:

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 Restated 2019 Increase
2020 (₱) %
(₱) (Decrease) (₱)
Assets 257,157,643.30 214,949,393.51 42,208,249.79 19.64%
Liabilities 40,648,492.38 32,284,295.61 8,364,196.77 25.91%
Government 216,509,150.92 187,465,409.80 29,043,741.12 15.49%
Equity
Revenue 183,315,084.36 162,733,118.96 20,581,965.40 12.65%
Expenses 153,872,805.73 144,742,741.39 9,130,064.34 6.31%
Appropriations 189,433,635.00 171,706,279.93 17,727,355.07 10.32%
Obligations 156,449,195.11 161,139,611.16 (4,690,416.05) -2.91%
Disbursements 123,437,357.23 150,746,941.35 (27,309,584.12) -18.12%

D. SCOPE OF AUDIT

The audit covered the accounts and operations of the Municipality of Tayug for CY
2020. The audit was conducted to: a) ascertain the level of assurance that may be placed
on the Management assertion on the financial statements; b) determine the propriety of
transactions as well as extent of compliance on the applicable laws, rules and regulations;
c) recommend agency’s improvement opportunities; and d) determine the extent of
implementation of prior year’s audit recommendations. Moreover, the audit was conducted
in accordance with International Standards of Supreme Audit Institutions (ISSAIs).

The audit was focused on the 2020 audit thrusts issued by the Local Government Sector
of the Commission. Financial, compliance and value for money (VFM) audits were
conducted to achieve these audit objectives.

E. AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

The Auditor rendered a qualified opinion on the fairness of presentation of the financial
statements of the Municipality of Tayug for the reason that validity, completeness and
accuracy of the reported net book value of PPE accounts totaling ₱183,159,874.84 at year-
end could not be ascertained due to the failure of the Municipality to prepare and maintain
property cards and subsidiary ledgers for each category of PPE. The reconciliation between
the accounting and property units and the subsidiary ledger balances and its respective
control account were not made due to the absence of required property reports and records.

The inadequacy of records for the PPE accounts maintained by the Municipality and
the absence of documents did not allow the application of alternative audit procedures to
establish validity of affected balances.

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F. SIGNIFICANT AUDIT OBSERVATIONS AND RECOMMENDATIONS

Summarized below are the significant audit findings and the corresponding
recommendations which were discussed with Management during the exit conference
conducted on April 21, 2021. Management comments were incorporated in the report,
where appropriate.

1. The accuracy, reliability and existence of the carrying amount of the Road
Networks account amounting to ₱22,559,761.07 could not be ascertained due to
non-compliance of the required reporting and accounting guidelines under COA
Circular No. 2015-008.

We reiterated that the accounting and reporting guidelines on the Local Roads Asset
Management System prescribed in COA Circular No. 2015-008 dated November 23,
2015 be complied. Thus, we recommend Management to require the Municipal
Accountant to maintain subsidiary records for roads and road components for every
road network. Likewise, require the General Services Officer or in his absence, the
Municipal Treasurer in coordination with the Municipal Engineer to maintain a Local
Road Inventory and Road Map, and keep a complete Local Road Network Property
Card for all roads and its components.

2. The reported Cash in Bank – Local Currency, Current Account (LCCA) is doubtful
considering the net difference of ₱35,551,143.93 between the balances per book
and bank confirmation due to presence of various reconciling items in the books
contrary to COA Circular No. 96-001.

We recommended to Management that:

a. BRS be immediately prepared monthly for all accounts, so that identified errors
can be corrected immediately. The personnel assigned in the preparation of the
Bank Reconciliation Statement (BRS) immediately secure the documents
needed in the preparation of the said reports.

b. Exhaust all possible means in determining the nature of the reconciling items
in order to effect immediately the necessary adjustments in the books of
accounts to present the reliable balance of the Cash in Bank – LCCA account
in the financial statements.

The following is the suggested pro-forma adjusting entry:

For Check cancellation:
Cash in Bank-LCCA xx
Accounts Payable xx
For Replacement:
Accounts Payable xx
Cash in Bank-LCCA xx

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 3. The Municipality was not able to prepare Summary/ List of Donations Received,
Distributed and Balances and submit to the National Disaster Risk Reduction and
Management Council (NDRRMC), through the Office of the Civil Defense (OCD),
copy furnished the Office of the Auditor contrary to COA Circular No. 2020-009
dated April 21, 2020, thus, donations received during COVID-19 pandemic from
different entities and/ or individuals were not included in the annual report being
prepared by the Office of the Civil Defense, and any undistributed donations were
not recorded in the books or in registries of the Municipality, thus, resulted in
understatement of asset and equity.

We recommended the following to Management:

a. Require the concerned Municipal Office to prepare the Summary/ List of

Donations Received, Distributed and Balances, and be submitted to the
NDRRMC, through the OCD, copy furnished the Office of the Auditor; and

b. Require the Municipal Accountant to record any balances of donations received

be costed and recorded in the books or in the registries.

4. The Municipality’s disbursement for the distribution of medicines and vitamins

during COVID-19 pandemic totaling ₱ 1,999,750.00 was not supported with
Delivery Receipt, pictures showing proof of delivery to the Municipality and a
Summary List of Distribution List per Barangay thus, casting doubt on the
completeness of delivery and eventual distribution to intended users/ beneficiaries.

We recommended that Management require the Municipal Health Officer and/ or

Supply and Property Management Officer in coordination with the Municipal
Accountant to submit the Delivery Receipt, pictures showing proof of delivery to the
Municipality and a Summary List of Distribution List per Barangay of the procured
vitamins and medicines specifically the 3500 boxes of Sodium Ascorbate (Vitamin C
caps) 500mg caps and 1150 tabs of Azithromycin tabs in compliance with Section 4
(6) of PD No. 1445 to corroborate completeness of delivery of medicines and vitamins
and distribution of the same to the intended users/ beneficiaries.

G. STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT

RECOMMENDATIONS

Status of Implementation Quantity

Fully Implemented 8
Not Implemented 27

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H. STATUS OF TOTAL SUSPENSIONS, CHARGES, AND DISALLOWANCES

The balances of Audit Suspensions, Disallowances and Charges of the Municipality

of Tayug prior to the effectivity of 2009 Rules and Regulations on Settlement of
Accounts (RRSA) is ₱824, 356.92. The persons liable to said disallowances could not
be determined due to non-availability of records.

On the other hand, the status of Notice of Suspensions (NS), Notice of

Disallowance (ND), and Notice of Charge (NC) from 2009 to 2020 are as follows:

Particulars Balance as of Issued for Settled for Balance as of

December 31, CY 2020 CY 2020 December 31,
2019 (₱) (₱) (₱) 2020 (₱)
Suspensions 00.00 00.00 00.00 00.00
Charges 00.00 00.00 00.00 00.00
Disallowances 00.00 00.00 00.00 00.00