EXECUTIVE SUMMARY

Introduction

Imus was formerly part of Cavite El Viejo (now Kawit). On October 7, 1795, it became an
independent municipality under the initiative of Recollect Father Pedro de San
Buenaventura. The town occupies a total land area of 9,701 hectares.

By virtue of Presidential Decree (PD) No. 1163 issued on June 11, 1977, the
Municipality of Imus was proclaimed as the capital town of the Province of Cavite. In
1986, it was classified as First Class Municipality. It became a component city with the
passage of Republic Act (RA) No. 10161 ratified through a plebiscite on June 30, 2012.
At present, the City is composed of 97 barangays. It is a lone congressional district of
the Province of Cavite.

For Calendar Year (CY) 2020, the City of Imus has envisioned the following goals and
objectives:

1. Provide excellent health and education services and facilities for everyone;

2. Promote a comprehensive educational program on waste management and

establish an ecological site for composting and marketing of all non-
biodegradable materials;

3. Provide opportunities for decent jobs, and/or development of skills, establishment

of livelihood programs, citizen’s participation in food production and creation of
green areas;

4. Preserve peace and order, provide patrol vehicles, intensify police visibility with
full support and cooperation from Bantay Bayan volunteers and members of the
Civil Security Unit;

5. Improve traffic flow in all major and alternate routes with provision of committed
and able traffic enforcers;

6. Proper maintenance of roads, bridges, canals and drainage for sufficient flow of
water effluence for sanitation purposes, construction of protection walls for
creeks and rivers to prevent soil erosion;

7. Continuous development of model communities with cooperation, volunteerism,

cleanliness and sense of pride among its constituents;

8. Provide housing units to indigents thru the Gawad Kalinga Program and
Community Mortgage Program;

9. Implement programs in line with the national government’s poverty reduction

program; and

10. Provide measures for eradication of the problems of illegal drugs.

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The Organizational Structure of the City is as follows:
a. Key Officials

City Mayor: Hon. Emmanuel L. Maliksi

Vice Mayor: Hon. Arnel M. Cantimbuhan
Members of the Sanggunian:
1. Hon. Adrian Jay C. Advincula
2. Hon. Argel Joseph E. Reyes
3. Hon. Lloyd Emman D. Jaro
4. Hon. Edgardo T. Saquilayan
5. Hon. Darlon Jay S. Sarayot
6. Hon. Leonardo Antonio O. Deocadis
7. Hon. Raymond S. Arguelles
8. Hon. Vincent Paul L. Amposta
9. Hon. Exequiel B. Ropeta
10. Hon. Hertito V. Monzon
11. Hon. Larry Boy S. Nato
12. Hon. Emilio S. Aguinaldo V
13. Hon. David G. Sapitan, Jr. – ABC President
14. Hon. Joshua Sherlhanbert Y. Guinto – SK Federation President
Chief Accountant: Ms. Roselie A. Pangilinan
City Treasurer: Mr. Manuel Reynold W. dela Fuente
b. No. of Personnel Complement
Permanent 938
Temporary 13
Casual 141
Job Order 2,861
Co-terminus 32
Total 3,985
Reported significant accomplishments, among others, during the year were as follows:
a. Excellence Award (Imus City Library) – by National Library of the Philippines;

b. Most Sedulous Award - Imus City Public Library Staff (Imus City Library) –
August 25, 2020 by National Library of the Philippines;

c. 1st Place, Best in Promotional Poster Award (Imus City Library) – August 25,
2020 by National Library of the Philippines

d. 3rd Place, Best in Promotional Poster Award (Imus City Library) – August 25,
2020 by National Library of the Philippines;

e. 2019 Monthly Completer (Imus City Library) – August 25, 2020 by National
Library of the Philippines;

f. First Place 2019 Manila BAYani Awards and Incentives (MBAI) City Category –
October 7, 2020 by Department of the Interior and Local Government (DILG);

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 g. Top Performing Police Station on Campaign against Most Wanted Person (Imus
CPS) – November 21, 2020 by Cavite Police Provincial Office;

h. Top Performing City Police Station on Most Number of Arrested Illegal Drug
Personalities (Imus CPS) – November 21, 2020 by Cavite Police Provincial
Office; and

i. Best Farmers’ Information and Technology Services (FITS) Social Media

Account (City Agriculture Services Office – FITS Imus) – December 3, 2020 by
Agricultural Training Institute (ATI) CALABARZON

Scope of Audit

The audit covered the accounts and operations of the City for the period January 1 to
December 31, 2020. The objectives of the audit are to: (a) determine the level of
assurance that may be placed on Management’s assertions on the financial statements;
(b) verify the propriety of financial transactions and on a limited extent, determine the
level of compliance with applicable laws, rules and regulations; (c) recommend agency
improvement opportunities; and (d) determine the extent of implementation of prior
year’s audit recommendations.

Financial Highlights

For CY 2020, the City of Imus, Cavite generated a total income of P2,390,198,854.47
from local taxes, permits and licenses, service and business income and internal
revenue allotment. The total funds utilized for the year amounted to P2,658,297,723.04
out of the total appropriation of P3,534,663,389.76.

The total assets, liabilities, equity and expenses for CY 2020 are as follows:

Increase
2020 2019
(Decrease)
Financial Position
Assets P 5,015,783,326.51 P 4,446,216,050.11 P 569,567,276.40
Liabilities 1,925,819,429.33 1,461,441,422.12 464,378,007.21
Equity 3,089,963,897.18 2,984,774,627.99 105,189,269.19
Results of Operations
Income (including Subsidy) 2,390,198,854.47 2,124,564,466.77 265,634,387.70
Expenses:
Personnel Services 622,468,167.06 562,691,619.93 59,776,547.13
Maintenance and Other
Operating Expenses 1,499,128,211.49 1,265,504,040.34 233,624,171.15
Non-Cash Expenses 151,572,452.52 130,291,264.03 21,281,188.49
Financial Expenses 34,546,817.24 13,637,402.17 20,909,415.07
Transfers, Assistance and
Subsidy to 39,937,608.63 41,382,869.29 (1,445,260.66)
Surplus (Deficit) 42,545,597.53 111,057,271.01 (68,511,673.48)

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Audit Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the financial
statements of Imus City for the year ended December 31, 2020, for the following
reasons:

1. The accuracy, existence and completeness of the Property, Plant and Equipment
(PPE) accounts, with aggregated cost of P3,460,750,581.91, excluding Construction
in Progress accounts, as of December 31, 2020 could not be ascertained due to the
difference of P338,659,065.24 between the Accounting Records and Inventory
Report, contrary to Section 53 of Government Accounting and Auditing Manual
(GAAM), Volume III and Section C.3, Chapter V of Manual on Property
Custodianship.

2. The Perpetual Inventory Method was not adopted in recording the purchase of
supplies and materials costing P280,889,008.62 in CY 2020, while issuances thereof
to the end-users were not supported by Requisition and Issue Slips (RIS), contrary to
the policies and procedures for supplies prescribed by the Manual on the New
Government Accounting System (MNGAS) for Local Government Units (LGUs),
Volume I, thus affecting the correctness and reliability of the balances of inventory
and the related expense accounts during the year.

Moreover, various Coronavirus Disease 2019 (COVID-19) and other disaster related
supplies and materials worth P31,457,515.00 acquired in CY 2020 were recorded
under the Other Maintenance and Operating Expenses account, thus understating
the balances of the appropriate inventory accounts and related expense accounts
corresponding to the cost of items in stock and inventories already issued,
respectively.

3. The inability of the City to record under the Trust Liabilities–Disaster Risk Reduction
and Management Fund (DRRMF) account the receipt of the unexpended Local
Disaster Risk Reduction and Management Fund (LDRRMF) for CY 2020 amounting
to P39,937,608.63 from the General Fund (GF) and the financial assistance from
several National Government Agencies (NGAs) for disaster response projects
totaling P10,966,881.00, and to correct the charging and recording of the
procurement of one unit portable x-ray machine costing P500,000.00 had resulted in
the understatement of the year-end balance of the Trust Liability–DRRMF account in
the amount of P51,404,489.63 and overstatement/understatement of the year-end
balances of other affected accounts, both in the GF and Trust Fund (TF) books.

For the above cited deficiencies, we recommended that the City Mayor require the:

1. City Accountant and the General Services Officer to reconcile their respective
records, especially to give priority to PPE accounts which registered significant
variances from CYs 2018 to 2020.

2. a. City Accountant to adopt the Perpetual Inventory Method in all procurement of

supplies and materials by recording the transactions initially as an asset using the
appropriate inventory accounts prescribed in the Revised Chart of Accounts for
LGUs.

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 b. General Services Officer to prepare the Weekly Summary of Supplies and
Materials Issued (SSMI) duly supported by RIS for submission to the Accounting
Office for proper recording of issuances of inventories.

3. a. City Accountant to draw the necessary Journal Entry Vouchers (JEVs) to correct
the deficiencies noted in audit which affected the balances of the Trust Liabilities–
DRRM and other accounts.

b. City Treasurer to immediately issue official receipt to recognize the transfer of

unexpended DRRM funds from GF to TF and ensure its recording in the Cash
Receipts Journal in the proper period to facilitate timely recognition of the transfer
in the City’s books of account.

Other Significant Audit Observations and Recommendations

Hereunder are the other significant observations and corresponding recommendations

contained in the report:

1. The acquisition of six units Airdecon Pure Decontamination and Purification System,
13 units Stihl Mist Blower and 20 units Fuji Mist Blower costing P2,280,000.00,
P568,685.00 and P479,814.00, respectively, which were all charged against the
LDRRMF to address the COVID-19 health crisis, were not recorded under the
“Disaster Response and Rescue Equipment” account in the GF, contrary to
Commission on Audit (COA) Circular No. 2012-002 dated September 12, 2012,
resulting in the understatement of the said account and overstatement of affected
expense accounts in the financial statements.

We recommended that the City Mayor direct the City Accountant to draw the
necessary JEV to record as “Disaster Response and Rescue Equipment” in the GF
books the cost and corresponding depreciation of the six units Airdecon Pure
Decontamination and Purification System, 13 units Stihl Mist Blower and 20 units Fuji
Mist Blower.

We also recommended that he instructs the General Services Officer to prepare and
issue the necessary Property Acknowledgement Receipt (PAR) to concerned City
Officials who are in possession and accountable for the said equipment in
accordance with Section 259 of Government Accounting Manual (GAM) for LGUs,
Volume I.

2. The amount granted to 56 borrowers as loan assistance under the “Imus Credit
Window Facility” (ICWF) program and all their loan repayments as of
December 31, 2020 totaling P1,080,000.00 and P243,334.49, respectively, were
both recorded in the TF books using the Trust Liabilities account instead of Loans
Receivable–Others account, thereby understating the year-end balances of these
accounts by P836,665.51 as of December 31, 2020. Further, the pre-deducted
service fees from the proceed of loans was debited to Other Payables instead of
Trust Liabilities, thus overstating and understating said accounts, respectively, by the
same amount of P32,400.00 as of year-end.

We recommended that the City Accountant draw the necessary JEV to record under
the Loans Receivable – Others account the remaining balances of the financial

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 obligations to the City of the 56 borrowers and to correct the balance of the affected
accounts. Henceforth, all subsequent grants of loan assistances and receipts of loan
repayments should be recorded in the books of accounts using the appropriate
accounts for fair presentation of the transactions in the financial statements of the
City pursuant to Revised Chart of Accounts for LGUs.

3. Procurement of food supplies for relief distribution, personal protective equipment,

vitamins, test kits, medical supplies and equipment, and other COVID-19 related
supplies and materials totaling P116,416,537.48 were paid through the grant of cash
advances of as much as P4,382,434.20 to a City Official, instead of issuing checks
directly to the suppliers. This is contrary to Section 93 of PD No. 1445, thereby
resulting in the non-withholding of taxes amounting to P4,112,309.21 and exposing
government funds to higher risk of loss or misuse.

We recommended that the City Mayor limit the grant of cash advances to City
officials and employees only to circumstances allowed under COA Circular
No. 97-002 or when payment thru checks will not be practicable to ensure that
government funds are safeguarded from risk of loss or misappropriation and
applicable taxes due from government money payments to suppliers/creditors are
withheld pursuant to Revenue Memorandum Circular (RMC) No. 23-2014.

4. Corona Virus Disease 2019 (COVID-19) related disbursements charged against the
Disaster Mitigation and Preparedness Fund and Special Trust Fund-LDRRMF
amounting to P16,459,199.83 and P50,843,511.75, respectively, were not supported
with Sanggunian-approved Supplemental Investment Program, contrary to Items 2.1
and 2.2 of the Department of the Interior and Local Government (DILG) and
Department of Budget and Management (DBM) Joint Memorandum Circular (JMC)
No. 02 dated March 30, 2020, thus casting doubt on the regularity and propriety of
the transactions.

We recommended that the City Mayor direct the concerned focal official of the Local
Development Council (LDC) and Local Disaster Risk Reduction and Management
Committee (LDRRMC) to submit to the COA Audit Team for evaluation the copy of
the Supplemental Investment Program approved by the Sangguniang Panlungsod
Resolution covering the expenditures incurred in the implementation of the
COVID-19-related Programs/Projects/Activities (PPAs) amounting to P16,459,199.83
and P50,843,511.75 charged against the Disaster Mitigation and Preparedness Fund
and Special Trust Funds for the Unexpended LDRRMF in Previous Years,
respectively.

5. Procurements of various medical and personal protective equipment, welfare goods

and other COVID-19-related items totaling P52,731,151.40 were not supported by
necessary documentation, contrary to Section 4(6) of PD No. 1445, thus the validity
and propriety of the disbursements could not be ascertained.

We recommended that the City Mayor require the City Accountant to facilitate the
immediate submission to the COA Audit Team of the lacking documentary
requirements on COVID-19 expenses totaling P52,731,151.40 such as the approved
Purchase Requests (PRs), Purchase Orders (POs), Sales Invoices (SIs),
Acceptance and Inspection Reports, and Pictures taken during the receipt and

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 inspection of the goods, to prevent the issuance of a Notice of Suspension for the
said transactions.

6. Emergency procurement of goods totalling P20,675,196.00 authorized under

Republic Act (RA) No. 11469 or the Bayanihan to Heal as One Act were not
supported with suppliers’ Mayor’s Permits, Omnibus Sworn Statements (OSS) and
Income/Business Tax Returns required under Item Nos. 4.1 and 4.3 of Government
Procurement Policy Board (GPPB) Circular No. 01-2020, thus the regularity and
propriety of the transactions could not be fully established.

We recommended that the City Mayor instruct the Bids and Awards Committee
(BAC) to submit within 10 days from receipt hereof to the COA Audit Team the
Mayor’s/Business Permit, OSS, and Income/Business Tax Return of Grab-It-All
General Merchandise, Eight Star General Merchandise, and Redvaron Trading
necessary to establish the validity of the expenses incurred by the City amounting to
P20,675,196.00, otherwise a Notice of Suspension will be issued for the said
transactions.

Summary of Total Suspensions, Disallowances and Charges as of

December 31, 2020

The ending balance of disallowance amounting to P1,497,600.00 as of December 31,

2020 represents the disallowed payment of transportation, hotel accommodation, full
board meals for three-day Leadership Training, Values Formation and Team Building
activity on May 9 to 11, 2015 in Cebu City. Appeal Memorandum was filed on April 4,
2017 with the Office of the Regional Director. The required Answer to Appeal
Memorandum prepared by the Audit Team Leader and reviewed by the Supervising
Auditor was submitted to the Regional Director.

Status of Implementation of Prior Year’s Audit Recommendations

Of the 10 audit recommendations contained in the 2019 Annual Audit Report, six were
fully implemented, three were partially implemented and one was not implemented by
the City.

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