09-DILG2022 Part2-Observations and Recomm

PART II - OBSERVATIONS AND RECOMMENDATIONS
FINANCIAL AUDIT
Misstatements and existence of unreconciled balances in Cash in Bank - LCCA
1. The Cash in Bank-Local Currency, Current Account balance of ₱129.685 million

of DILG-National Capital Region and Regional Offices IV-A, VIII and XII is
inaccurate and unreliable due to the: a) unadjusted book reconciling items
totaling ₱2.604 million; b) unreconciled variance of ₱7.365 million between book
and bank balances; and c) dormant balance of ₱8.644 million.
1.1 Section 27 of International Public Sector Accounting Standards (IPSAS) No. 1

provides that Financial Statements (FS) shall present fairly the financial position,
financial performance, and cash flows of an entity. Fair presentation requires
faithful representation of the effects of transactions, other events, and conditions
in accordance with the definition and recognition criteria of assets, liabilities,
revenue and expenses set out in IPSAS.
1.2 Section 3, Chapter 21 of Volume I of the Government Accounting Manual for

National Government Agencies (GAM for NGAs) states that the Bank
Reconciliation Statement (BRS) shall be prepared in order to: a) check
correctness of both the bank and DILG’s records; b) serves as a deterrent to
fraud; and c) enable the DILG or bank to take up charges or credits recognized
by the bank or DILG but not yet known to the DILG or bank. In addition, Section
6 requires that the Chief Accountant/designated staff to prepare a Journal Entry
Voucher (JEV) to recognize all reconciling items that require
adjustments/corrections in the books of accounts.
1.3 The balance of ₱308,555,566.45 of the Cash in Bank-Local Currency, Current

Account (CIB-LCCA) account in the Statement of Financial Position of the
DILG as of December 31, 2022 includes the account balances of DILG-National
Capital Region (NCR) and Regional Offices (ROs) IV-A, VIII and XII
amounting to ₱129,685,741.79, broken down as follows:
Office Balance
NCR ₱9,774,628.54
RO IV-A 4,840,398.38
RO VIII 90,000,415.00
RO XII 25,070,299.87
Total ₱129,685,741.79
1.4 Review of the BRS of DILG-NCR and ROs IV-A, VIII and XII revealed that
adjustment of various book reconciling items from Calendar Years (CYs) 2015
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to 2022 totaling ₱2,603,764.30 were not taken up in the books, thereby resulting
in the understatement of the CIB-LCCA account balance by ₱472,261.46.
Details are as follows:
Effect
Office Particulars Amount
Under (Over)
NCR Double recording of ₱9,566.40 ₱9,566.40
disbursement
Double recording of deposit 4,442.04 (4,442.04)
Various accounting errors 112,087.50 (112,087.50)
Subtotal 126,095.94 (106,963.14)
IV-A Stale checks 258,021.86 258,021.86
Subtotal 258,021.86 258,021.86
VIII Stale checks 53,250.00 53,250.00
Unreleased checks not restored 102,486.01 102,486.01
Canceled checks 164,661.41 164,661.41
Unrecorded check 1,021,077.93 (1,021,077.93)
disbursements/ADA
Unrecorded receipt of funds 217,207.25 217,207.25
from Provincial/City Offices
Other Accounting errors 400,405.41 (400,405.41)
Subtotal 1,959,088.01 (883,878.67)
XII Stale checks 260,558.49 260,558.49
Subtotal 260,558.49 260,558.49
Grand total ₱2,603,764.30
Net Understatement ₱(472,261.46)
1.5 Moreover, comparison between the subsidiary ledgers (SLs) and bank balances
of DILG-NCR and ROs VIII and XII disclosed unreconciled variances totaling
₱7,364,753.69 due to non-preparation of BRS.
Office Unreconciled Variance

NCR ₱ 293,120.65
IV-A 58,272.77
VIII 5,779,876.09
XII 1,233,484.18
Total ₱7,364,753.69
1.6 It must be emphasized that the preparation of BRS can never be dispensed with
as this procedure provides Management with the opportunity to determine any
error and make necessary corrections correct on a timely basis; thus, ensuring
that the reported cash in bank balances reconcile with the balance/s as shown in
the DILG's depository banks.
1.7 Also, in RO XII - Sultan Kudarat Provincial Office reconciliation of cash

accounts showed that the bank balance of ₱8,643,530.12 has been dormant for
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years. Management could no longer trace the source and purpose of the fund and
they have expressed their willingness to revert the dormant fund to the Bureau
of Treasury (BTr).
1.8 The non-adjustment of various book reconciling items and the unreconciled
differences between book and bank balances negatively affected the reliability
and accuracy of the reported balance of CIB-LCCA account.
1.9 We recommended that Management require the concerned Accountants of

DILG NCR, ROs IV-A, VIII and XII to:
a) Draw JEVs to record the book reconciling items to correct the balance
of CIB–LCCA account;
b) Determine details of the unreconciled difference of ₱7,364,753.69, make

the necessary adjusting entries and regularly prepare BRS to check
agreement of both the DILG and bank records’ balances; and
c) Facilitate the remittance to the BTr of the ₱8,643,530.12 dormant bank

balance in RO XII.
1.10 Management submitted the following comments:
NCR - The reconciling items were adjusted as of February 28, 2023 under JEV
No. 23-02-0023 in the amount of ₱106,963.14. Management requested the bank
statements (BS) from the DILG’s Servicing Bank from the year 2001-2005 last
March 2, 2023 to reconcile remaining balance of ₱293,120.65. A follow-up e-
mail on the letter request was made last April 26, 2023.
RO IVA - Various stale checks amounting to ₱74,159.00 were canceled and

reverted to the BTr and recorded in the book under JEV Nos. 2023-02-024 and
2023-03-033A. The remaining stale checks amounting to ₱183,862.86 are still
in coordination with payees, the bank and POs (DILG Laguna and Quezon) to
cancel and re-issue or revert the fund, whichever is appropriate. Management
also requested BS for the period of November 2020 to January 2021 to reconcile
discrepancies.
RO VIII - Management issued a Memorandum to all concerned Sub-Regional

Offices (SROs) to comply with COA recommendations. Another Memorandum
was issued last April 2023 immediately after the COA Exit Conference,
instructing the RO Accounting Team to visit all SROs.
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Effective May 15, 2023, RO Accounting Team will visit SROs to provide
technical assistance in reconciling their respective CIB-LCCA balances.
RO XII - The total stale checks amounting to ₱260,558.49 were already

cancelled and adjusted in the books of accounts as of May 2023 with
₱257,458.49 adjusted under JEV No. 23-01-0103 dated January 31, 2023 and
₱3,100.00 adjusted under JEV No. 23-02-0275 dated February 28, 2023. The
book and bank balance of all CIB-LCCA accounts were already reconciled. BRS
were updated until March 2023 and were already submitted to the Audit Team.
Unreliable balance of Inter-Agency Receivable accounts
2. The Inter-Agency Receivables account balance of ₱1.073 billion as of December

31, 2022 in DILG-Central Office (CO) and RO IV-A is unreliable and inaccurate
due to the: a) unreconciled discrepancy of ₱76.249 million between accounting
records of DILG and Implementing Agencies (IAs); and b) unliquidated fund
transfers of DILG-CO, ROs VIII and XII to various IAs which accumulated to
₱1.212 including significant balances from Social Housing Finance Corporation
(SHFC) and National Housing Authority (NHA) amounting to ₱449.405 million.
2.1 The composition of Inter-Agency Receivables account of the DILG as of

December 31, 2022 is as follows:
Account Amount
Due from NGAs ₱31,080,260.88
Due from GOCCs 453,523,959.59
Due from LGUs 886,109,293.69
Total ₱1,370,713,514.16
2.2 Shown hereunder is the summary of fund transfers (FTs) per account of the
DILG-CO, ROs IV-A, VIII and XII:
Due from Due from Due from

Office Total
NGAs GOCCs LGUs
CO ₱18,680,527.06 ₱452,557,785.39
₱596,446,832.06 ₱1,067,685,144.51
IV-A 3,801,828.67 816,174.20 566,666.67 5,184,669.54
Subtotal 1,072,869,814.05
VIII 0.00 0.00 9,777,108.05 9,777,108.05
XII 1,824,477.44 0.00 132,825,438.07 134,649,915.51
Total ₱24,306,833.17 ₱453,373,959.59 ₱739,616,044.85 ₱1,217,296,837.61
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2.3 The following noted observations by the Audit Team affected the accuracy of
the reported balance of the Inter-Agency Receivables.
Discrepancy between balances per books and IAs records - ₱76.250 million
2.4 To check the correctness and existence of the transferred funds, confirmation
requests were sent to various IAs of DILG-CO and RO IV-A. Results of
confirmation disclosed a discrepancy of ₱76,249,914.11 between the DILG’s
books and that of IAs’ records. Details are as follows:
Per DILG Per Confirmation

Office Difference
Books of the IAs
Due from NGAs
CO ₱10,865,501.25 ₱ 4,962,900.74 ₱ 5,902,600.51
IV-A 829,952.80 23,048.15 806,904.65
Subtotal 11,695,454.05 4,985,948.89 6,709,505.16
Due from GOCCs
CO 144,482,413.20 140,460,518.07 4,021,895.13
Due from LGUs
CO 144,925,878.84 79,407,365.02 65,518,513.82
Grand Total ₱301,103,746.09 ₱224,853,831.98 ₱76,249,914.11
2.5 The observed difference is partly attributed to the following:
a. Unrecorded liquidation in DILG-CO and RO IV-A totaling

₱1,176,525.90. Management has already requested pertinent documents
from IAs for recording purposes.
b. Balance of prior year’s advances to PS-DBM totaling ₱5,552,979.26

remained unreconciled.
c. Due from LGU accounts which were not recorded in the books of IA
amounting to ₱60,661,465.14 pertain to long outstanding Equipment
Development Loans and financial assistance granted to LGUs relative to
the creation of Peace and Order Council. The management requested full
settlement from the IAs but instead received certificate of non-existence
of balances in the books of accounts and requests for condonation.
Long outstanding/dormant fund transfer balances - ₱1.190 billion
2.6 COA Circular No. 94-013 dated December 13, 1994 prescribes the rules and
regulations in the grant, utilization and liquidation of funds transferred to IAs. It
provides, among others, that within 10 days after the end of each month/end of
the agreed period for the project, the IA shall submit the RCI and the RD to
report the utilization of funds, after which the SA shall draw a JEV to take up
the reports. The Source DILG (SA) shall require the IA to submit reports and
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furnish the latter with a copy of journal voucher taking up the expenditures. The
IA shall return to the SA any unused balance upon completion of the project.
2.7 Further, Par. 6.1 of COA Circular 2016-005 requires that all government entities
shall conduct regular monitoring and analysis of receivable accounts to ensure
that these are collected when these become due and demandable and that cash
advances and FTs are liquidated within the prescribed period depending upon
their nature and purpose.
2.8 Section 3.11 of the Memorandum of Agreement (MOA) dated June 28, 2021
entered into by and between the DILG and the Ministry of the Interior and Local
Government of the Bangsamoro Autonomous Region in Muslim and Mindanao
(MILG-BARMM) states that the latter shall refund to the former any unused
funds or savings generated after completing the project on December 31, 2021.
2.9 Additionally, the 2021 Partnership Agreement for DILG Technical Assistance
Program for Local Resource Institutes (LRIs) requires the LRIs to submit Report
of Checks Issued (RCI)I and Report of Disbursements (ROD) within 30 days
after project completion. The IAs are also required to refund any unexpended
amount to DILG upon completion of the project/activity.
2.10 Article III of the MOA entered between DILG-RO XII and various LGUs states
that in case of suspension or termination of the MOA, the Implementing Partner
(LGU) shall be obliged to return the spent amount and the unexpended balance
of the released portion of funds related to the canceled component of the project.
2.11 Out of the ₱1,212,112,168.07 balance of Inter-Agency Receivables accounts as

of December 31, 2022 in DILG-CO and ROs VIII and XII, amount totaling
₱1,189,998,800.44, or 98.18 percent, are outstanding for one year to more than
10 years. An aging analysis presents the details thereof, as follows.
More than 10
Office 1-5 years 5-10 years Total
years
Due from LGUs
CO ₱22,501,140.20 ₱0.00 ₱573,945,691.86 ₱596,446,832.06
XII 7,017,129.56 17,782,828.80 108,025,479.71 132,825,438.07
VIII 0.00 9,777,108.05 0.00 9,777,108.05
Due from NGAs
CO 360,000.00 125,835.56 700,000.00 1,185,835.56
XII 358,477.44 0.00 0.00 358,477.44
Due from GOCCs
CO 0.00 449,405,109.26 0.00 449,405,109.26
Total ₱30,236,747.20 ₱477,090,881.67 ₱682,671,171.57 ₱1,189,998,800.44
2.12 Dormant Due from LGU accounts in DILG-CO consists of: a) FTs to various
LGUs described as “Infra Project” wherein there were no documents to support
the FT amounting to ₱35,354,433.48; b) financial assistance granted to various
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LGUs and transferred to the Office of the President amounting to
₱20,527,798.81; and c) loans to LGUs in the form of heavy equipment and civil
works under 2nd and 3rd Rural Roads Improvement Program amounting to
₱518,063,459.57. There was no settlement from the provincial governments
despite demand, instead a certificate of non-existence and requests for
condonation was received by DILG.
2.13 In RO VIII FTs to various LGUs in CYs 2012 to 2017, consisting of 36 projects
with an aggregate amount of ₱44,306,019.24 and reported completed as of CY
2018, still have an unliquidated balance amounting to ₱9,777,108.05 as at year-
end contrary to COA Circular No. 94-013 dated December 13, 1994 and DILG
Memorandum Circular Nos. 150 series of 2013 and 2016-50 dated December
27, 2013 and April 7, 2016.
2.14 Also, verification made in RO XII disclosed that FTs to LGUs for projects,
programs, and activities such as the Community-Based Monitoring System
(CBMS) and the Comprehensive Local Integration Program (CLIP) in the
amounts of ₱6,684,980.20 and ₱332,149.36, respectively, had already been
conducted/implemented but were not yet liquidated by LGUs concerned.
Furthermore, the amount of ₱125,808,308.51 pertains to FTs for PAMANA and
SALINTUBIG projects in CY 2012 to various LGUs including ARMM. In
December 2020, ARMM was turned over to BARMM yet FTs totaling
₱122,372,421.92 remained unliquidated.
Delayed/Non-Completion of Projects
2.15 Under Memorandum No. 57 dated August 2, 2013 issued by the then Executive
Secretary, Office of the President, the Secretary of the DILG was specifically
directed to spearhead the transfer of Informal Settler Families (ISFs) living in
danger and high-risk areas to decent housing site and paved the way for the
clearing of clogged waterways.
2.16 A MOA was executed between the DILG and SHFC on June 27, 2016, wherein
the former transferred ₱350,000,000.00 to the latter for the construction of the
micro-medium rise building (MMRBs) that will primarily benefit ISFs living
along esteros and waterways in Manila.
2.17 The Interim Shelter Fund is a financial assistance scheme devised to complement
socialized housing solutions provided by the government through the Oplan
Likas Program. The target beneficiaries are entitled to receive financial
assistance of ₱18,000.00 per family primarily to assist them in securing
temporary shelter pending construction of their permanent housing units. A
MOA was executed last June 23, 2016 between DILG and NHA whereby the
former transferred ₱278,000,000.00 to the latter for the disbursement of interim
shelter funds to 15,000 qualified ISFs until the completion or expiration of the
program.
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2.18 Analysis of accounting records of the above-mentioned fund transfers to SHFC
and NHA showed low percentage of utilization, and the related projects
remained uncompleted to date. Other details are as follows:
Unutilized
IA Fund Transfer Disbursement
Balance Percentage
SHFC ₱350,000,000.00 ₱ 45,077,303.94 ₱304,922,696.06 87.12
NHA 278,000,000.00 133,517,586.80 144,482,413.20 51.97
Total ₱628,000,000.00 ₱178,594,890.74 ₱449,405,109.26
2.19 Based on the letter of SHFC to the DILG Secretary dated October 12, 2022,
SHFC Management encountered challenges and considerable delay in the
construction of MMRBs due to issues regarding issuance of necessary permits
to complete the project.
2.20 On December 27, 2022, DILG requested guidance from the DBM on the
extension of the validity of funds transferred to the SHFC until 2023. In a letter
response dated February 8, 2023, the DBM requested submission of pertinent
documents/information which will establish the veracity of the claim. DILG is
still waiting for the resolution regarding extension of the validity of fund.
2.21 In connection with the distribution of ₱18,000.00 financial assistance, it was

informed that the NHA will endorse the proposed beneficiaries for validation
and the ISFs that will not be validated will be included in the NHA’s budget
proposal in subsequent years. The endorsed beneficiaries will be validated by
the DILG until November 2022; thereafter, NHA will process the liquidation of
the transferred fund. The NHA and DILG will still present the number of
validated and remaining ISFs and funds to be reverted to the Bureau of Treasury.
2.22 As noted in the CY 2021 Consolidated Annual Audit Report (CAAR), the lack
of specific timelines contributed to the non-completion of the above projects.
2.23 We recommended and Management agreed to require:
a) Accountants of DILG-CO and RO No. IV-A to reconcile with IAs to

ascertain cause/s of unreconciled balance; and adjust as necessary;
b) Accountants of DILG-CO and ROs VIII and XII to enforce liquidation

of all fund transfers and return of any unutilized amount; and impose
penalty/sanctions for non-compliance thereof, as necessary; and
c) Bureau of Local Government Development (BLGD) to coordinate with

SHFC and NHA to: i) fast-track completion of the construction of the
MMRBs and the immediate disbursement of the Interim Shelter Fund
financial assistance to identified beneficiaries, respectively; and ii)
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facilitate the return of unused funds based on guidance issued by the
DBM.
CO - Out of the ₱5,902,600.51 discrepancy under the Due from NGAs account,
₱2,817,227.14 has been taken up in books. For LRIs, demand letters were sent
to the operating unit that have direct supervision over the project
implementation. However, the project implementation was moved from August-
September 2022 to December 2022-February 2023; thereby, the submission of
liquidation reports will be made 30 days after the completion of the project. For
PS, there is an ongoing reconciliation being undertaken by DILG and PS-DBM.
Unutilized balances from prior years’ transactions amounting to ₱2,817,227.14
was remitted to the BTr per email dated March 10, 2023 from DBM-PS. For
PPSC, the discrepancy amounting to ₱10,000.00 was already adjusted under
JEV No. 2023-03-001356 dated March 15, 2023.
For Due from LGUs, the discrepancy of ₱39,110,060.60 was due to the absence
of supporting documents. These accounts are dormant for more than 30 years
and will be requested for write-off
For Due from GOCCs account, the discrepancy between the book of DILG and
NHA amounting to ₱4,021,895.13 was taken up in the books under JEV No.
2023-03-001188 dated March 14, 2023.
On delayed completion of the project under NHA, the balance of fund transfer
amounting to ₱144,482,413.20 as of December 31, 2022 was reduced by
₱115,883,726.22 through the submission of liquidation reports amounting to
₱4,021,895.13 and remittance to the BTr amounting to ₱111,861,831.09. In
connection to SHFC, the DBM sent a letter dated March 15, 2023 on the
Department’s request for extension of the implementation of the project, citing
that since the purpose of the trust fund has not yet been fulfilled evidenced by
the undisbursed balance of ₱304,922,696.06 as of December 31, 2022, the same
may still be utilized by SHFC for the intended purpose subject further to the
conditions stipulated in the MOA. Taking into consideration DBM’s reply, that
Management is working on new timelines for the construction of the MMRB in
coordination with SHFC.
On non-submission of liquidation report, the amount of ₱22,501,140.20 under

Due from LGUs account pertains to FT to MILG-BARMM to cover
administrative and operational cost and payment salary requirement of contact
tracers under RA No. 11494. This was fully liquidated on March 20, 2023 under
JEV No. 2023-03-001332. For Due from NGAs, the ₱360,000.00 remained
unliquidated as of reporting date because of the extension of the project
implementation from August - September 2022 to December 2022 - February
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2023, thus Liquidation Reports are expected to be submitted within 30 days after
the project implementation period/completion of the project.
RO IVA - They are continuously coordinating with concerned LRIs and sending
demand letters, the latest of which was dated February 14, 2023. The noted
discrepancy of ₱806,904.65 was reduced to ₱668,908.65.
RO VIII - From the unliquidated balance of ₱9,777,108.05, it was reduced to

₱8,058,185.99 as of March 31, 2023.
RO XII - They have continuously exerted efforts to oblige LGUs to settle their
unliquidated balances by regularly sending out Demand Letters. Despite efforts
of Management, the concerned LGUs still failed to submit the required
liquidation documents nor refund any unexpended amount to fully settle their
balances. After sending out the CY 2023 1st quarter Demand Letters, additional
liquidation of ₱20,205,277.44 was already recorded.
Inaccurate balances of Inventory Accounts
3. The balance of Inventory accounts in DILG-NCR and CAR totaling ₱1.997

million as of December 31, 2022 is misstated due to unrecorded issuances of semi-
expendable properties costing ₱800,189.97 and erroneous recording of receipt of
inventory of ₱32,000.00.
3.1 The Inventory accounts as of December 31, 2022 with a balance of

₱21,738,135.98 include the accounts of DILG-NCR and CAR of ₱730,975.38
and ₱1,266,213.27, respectively.
3.2 Audit disclosed that Semi-expendable properties issued to end-users during CY

2022 costing ₱579,810.04 and ₱220,379.93, by the DILG-NCR and CAR,
respectively, were not recorded in the books of accounts, resulting in the
overstatement of Inventory accounts by a total of ₱800,189.97.
3.3 Further, semi-expendable office equipment amounting to ₱32,000.00 in CAR

was erroneously recognized as expense upon receipt. No adjustment was made
during the year even if the same remained unissued as of December 31, 2022;
thus, the understatement of Semi-Expendable Office Equipment account by the
same amount.
3.4 We recommended and Management agreed to direct the Accountants of

DILG-NCR and CAR to prepare adjusting entries to correct reported
balances of the affected accounts.
3.5 Management commented that in DILG NCR, they reiterated to the Supply and
General Services Section (SGSS) the timely issuance of the required Inventory
Custodian Slip (ICS) to end-users for proper recognition in the books of
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accounts. Currently, the Accounting Section (AS) already identified the
required details for issuance of ICS by SGSS and corresponding recognition in
the books of accounts by the AS. Recognized and identified semi-expendable
equipment will be included in the Semi-expendable Property Ledger Card and
Registry of Semi-Expendable Property Issued as required in the COA Circular
2022-004.
3.6 In DILG CAR, JEV No. 2023-03-1697 dated March 07, 2023 was prepared
upon receipt of the Report of Semi-expendable Property Issued No. 2023-03-
002 dated March 07, 2023 from General Services Section (GSS). Furthermore,
JEV No. 2023-04-2289 dated April 01, 2023 was prepared to adjust the entry
for the unissued printers.
Unreliable Balance of Property, Plant and Equipment
4. The carrying value of Property, Plant and Equipment (PPE) accounts amounting
to ₱1.052 billion as of December 31, 2022 is unreliable due to: a) improper
classification of property accounts valued at ₱17.855 million; b) inaccurate
provision of depreciation totaling ₱1.269 million; and c) unreconciled discrepancy
of ₱72.840 million between accounting and property records. Moreover,
unserviceable properties amounting to ₱73.908 million were not disposed as at
year-end.
4.1 The PPE account disclosed an aggregate balance of ₱1,735,337,763.09 as at

year-end with total carrying amount of ₱1,051,850,328.28, broken down as
follows:
Accumulated
Office Cost Depreciation and Carrying Amount
Impairment Loss
CO ₱452,633,529.48 ₱186,037,002.77 ₱266,596,526.71
NCR 18,823,324.47 11,306,130.54 7,517,193.93
CAR 82,611,665.48 35,284,617.94 47,327,047.54
I 129,711,788.30 25,485,840.84 104,225,947.46
II 59,324,643.40 27,267,744.44 32,056,898.96
III 119,948,947.73 91,195,154.70 28,753,793.03
IV-A 31,360,930.04 17,085,173.12 14,275,756.92
IV-B 42,142,021.71 16,128,355.01 26,013,666.70
V 66,948,010.88 33,267,889.26 33,680,121.62
VI 105,379,652.02 19,254,891.08 86,124,760.94
VII 68,245,184.51 30,577,512.93 37,667,671.58
VIII 125,180,150.40 37,024,601.55 88,155,548.85
IX 74,519,918.01 18,817,866.12 55,702,051.89
X 74,023,532.22 38,833,866.13 35,189,666.09
XI 100,367,454.06 25,457,269.98 74,910,184.08
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Accumulated
Office Cost Depreciation and Carrying Amount
Impairment Loss
XII 112,299,505.46 50,556,351.75 61,743,153.71
XIII 71,817,504.92 19,907,166.65 51,910,338.27
Total ₱1,735,337,763.09 ₱683,487,434.81 ₱1,051,850,328.28
4.2 The following errors, omissions and deficiencies affected the fair presentation
of the reported balance of PPE accounts:
a) Improper classification of property accounts - ₱17.855 million
4.3 The Government Accounting Manual for National Government Agencies

(GAM for NGAs), Volume III defined Other Land Improvements account as
account debited to recognize the cost incurred in the purchase or fair value (FV),
if acquired through donation or transfers without cost, of land improvements
such as parking lots, landscape, walkways, driveways, covered walks, fences,
roads within the DILG’s premises and the like. Meanwhile, Construction in
Progress (CIP) account is used to recognize the accumulated cost or other
appropriate value of investment property-buildings which are still in the process
of construction or development.
4.4 Various land improvements with book value of ₱3,038,557.96 in RO II were

recorded as part of Building account instead of Land Improvements account.
Details are shown in the following table:
Accumulated
Description Cost Depreciation Book Value
Garage and Roofing ₱2,184,062.10 ₱ 391,917.81 ₱1,792,144.29
Nameplate and Landscape 152,756.48 27,008.19 125,748.29
Construction of Grotto with
Landscaping 446,568.84 73,857.79 372,711.05
Construction of Retaining Wall 906,134.93 158,180.60 747,954.33
Total ₱3,689,522.35 ₱650,964.39 ₱3,038,557.96
4.5 In RO VIII, completed improvement of the Peace and Resilience Center

amounting to ₱2,579,917.53 was still recorded under CIP account.
4.6 Moreover, evaluation of accounting records of RO I revealed that the CIP-

Buildings and Other Structures account includes unbilled balance of
₱4,035,339.44 and variation order in the amount of ₱551,429.57 for the
construction of Provincial Building (Ilocos Norte). The percentage of
completion per Statement of Work Accomplished as of December 16, 2022 was
28.35, or a total cost of ₱1,596,676.53.
4.7 The foregoing accounting misclassifications resulted in the over/under

statement of the following accounts:
85
Under/ (Over)
Account Statement
Building (1,109,604.82)
Accumulated Depreciation – Building (650,964.39)
Land Improvements 3,689,522.35
Accumulated Depreciation - Land Improvements 650,964.39
Construction in Progress (7,166,686.54)
Accounts Payable (4,586,769.01)
Total ₱17,854,511.50*
*in absolute amounts
b) Inaccurate provision of depreciation expense - ₱1.269 million
4.8 In RO II the Depreciation Expense and accumulated depreciation was

understated by ₱266,283.55 and ₱1,269,326.44, respectively due to the
following:
 Additional costs capitalized were erroneously depreciated over the useful

life for building of 30 years;
 Non-provision of depreciation for the month of acquisition for items

acquired on or before the 15th of the month; and
 Items acquired through finance lease by the Provincial Offices were only
depreciated starting March 2022 instead of the date of acceptance and
delivery.
c) Unreconciled discrepancy between Accounting and Property Records -

₱72.840 million
4.9 Section 58 of Presidential Decree (PD) No. 1445 provides that the examination
and audit of assets shall be performed with a view to ascertaining their
existence, ownership, valuation and encumbrances as well as the propriety of
items composing respective asset accounts.
4.10 Comparison of accounting and property records of the hereunder offices

disclosed a discrepancy of ₱72,839,520.08, details are as follows:
Office Per Books Per RPCPPE Difference

CO ₱319,983,865.83 ₱270,828,017.90 ₱49,155,847.93
II 44,525,259.52 43,662,416.75 862,842.77
IV-B 17,241,819.44 26,405,715.22 9,163,895.78
CAR 62,453,488.87 48,796,555.27 13,656,933.60
Total ₱444,204,433.66 ₱389,692,705.14 ₱72,839,520.08
*difference computed at absolute value
86
4.11 The noted variance is partially attributed to the following:
Office Affected PPE Account Amount

a) Items recorded in the books but not included in the RPCPPE
CO Information and Communication ₱14,665,803.93
Technology (ICT) Equipment 34,490,044.00
Land and Building
Sub-total 49,155,847.93
II Office Equipment and ICT Equipment 446,057.94
Other PPE 416,784.83
Sub-total 862,842.77
CAR Building 13,988,321.20
Office Equipment and ICT Equipment 133,150.00
Sub-total 14,121,471.20
Total 64,140,161.90
b) Derecognized unserviceable PPEs but not yet disposed
CAR Office Equipment and ICT Equipment ₱464,537.60
4.12 In DILG-CO, the Management was able to conduct procedures pertaining to

One-Time Cleansing of PPE accounts during CY 2022, however, discrepancies
were not fully resolved. The difference of ₱49,155,847.93, was due to the
exclusion of the following properties in the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE):
 ICT equipment costing ₱14,665,803.93 which includes 12 items

costing ₱13,834,647.28 tagged as Public Safety Information System
(PSIS) in the submitted Investigation Report prepared by Internal Audit
Service. Inquiry with the Chief Accountant revealed that there is a
possibility that these items are software in nature; and
 Untitled land and building occupied by League of Municipality of the

Philippines (LMP) recorded in the books of accounts costing
₱34,490,044.00. Based on submitted Position Paper dated June 2015,
the DILG categorically stated that the fund used to acquire the subject
land and building was only coursed through by the Congress to the
DILG for the benefit of then Municipal Mayor’s League of the
Philippines. The foregoing was bolstered by the execution of a
Memorandum of Agreement (MOA) on July 2, 2009 between the DILG
and LMP recognizing the latter as the beneficial owner of the land. As
of date, the LMP Management is still in the process of transferring the
title to its name.
4.13 In RO II missing/non-existing equipment and PPE reclassified from Other

Assets to Other PPE account costing ₱446,057.94 and ₱416,784.83,
respectively, are not included in the RPCPPE.
87
4.14 Also, in DILG-CAR, completed DILG POs in Apayao and Ifugao without
supporting documents costing ₱13,988,321.20 and various office and ICT
equipment totaling ₱133,150.00 were not included in the property records.
While unserviceable PPEs costing ₱464,537.60 not yet disposed were
derecognized in the books.
d) Non-disposal of unserviceable properties - ₱73.908 million
4.15 Unserviceable properties in ROs II, III and VI were not disposed of contrary to
Section 79 of PD No. 1445, which provides that when government property has
become unserviceable for any cause, or is no longer needed, it shall, upon
application of the officer accountable therefore, be inspected by the head of the
DILG or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsalable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest
bidder. Details are as follows:
Office Amount Remarks

II ₱78,282.85 This includes two motor vehicles with book value
of ₱55,301.40
III 70,791,749.34 Patrol 117 communication equipment which was
unserviceable since CY 2015 due to the
unavailability of spare parts and service center
VI 3,037,875.57 Disposal of unserviceable equipment in previous

years was not conducted due to COVID-19
pandemic
Total ₱73,907,907.76
4.16 The delay in the disposal of these properties will cause diminution of its value
due to prolonged exposure to natural elements and possibly pilferage; thereby,
depriving the DILG of the potential income therefrom. The timely disposal can
also free up storage costs and better use of office spaces where these
unserviceable properties are stored.
4.17 We recommended and Management agreed to instruct the:
a) Accountants of ROs I, II, VIII and CAR to adjust/correct the identified

accounting errors;
b) Accountants and Property Officers of DILG-CO, CAR and RO II and

IV-B to reconcile their records, identify cause/s of the variance, and
adjust books and/or reports, as necessary;
88
c) Chiefs, Legal and Legislative Liaison Service and Accounting Section
in DILG-CO to facilitate the transfer of lot to LMP and derecognition
of the same from DILG books; and
d) GSS in ROs II, III and VI to cause immediate disposal of unserviceable

properties and facilitate its derecognition in the books of accounts after
disposal.
CO - As of May 5, 2023, the Property Accounts Section, General Services

Division, Administrative Service and Accounting Division, Financial
Management Service was able to reconcile ₱14,240,274.28 out of the
₱49,155,847.93 discrepancy, leaving a balance of ₱34,915,573.65, which is
composed of the following:
 Land and Building amounting to ₱34,490,044.00 – In 2015, LMP had

already initiated the titling of properties but the titling process was
halted because the original duplicate copy of the Deed of Absolute Sale
(DOAS), which is a fundamental requirement for the transfer of title,
was missing. Recently, the missing DOAS was found at the LMP
National Secretariat Office. Thereafter, LMP issued a resolution
authorizing the current LMP President to represent the LMP in filing a
petition for the reconstitution of title and authorize the processing of the
transfer of titles. LMP is currently engaging the Registry of Deeds and
other government agencies to secure all documentary requirements
necessary in filing the petition.
 The Fuji Xerox Copier and Audio-Visual Equipment amounting to

₱275,529.65 and ₱150,000.00, respectively, have already been
requested for authority to derecognize pending approval of COA CO.
CAR - Management commented that the unreconciled discrepancy per books

as of December 31, 2022 and RPCPPE for CY 2022 was adjusted already as of
March 31, 2023 under JEV Nos. 2023-02-0609 (₱13,988,321.20) dated
February 14, 2023 & 2023-02-0933 (₱464,537.60) dated February 28, 2023,
while corrections were made on the RPCPPE to include items amounting to
₱133,150.00 which were initially not included in the report but were present
during the physical count. A revised RPCPPE was submitted to COA on March
24, 2023.
RO I - Management commented that the necessary adjusting entries were

already taken up in the accounting records per JEV No. JEV-GJ-2023-01-05
dated January 31, 2023
89
RO II - An Investigation Report was submitted to the Office of Resident
Auditor on March 28, 2023 with the request for the derecognition of the non-
existing/missing PPEs supported by pertinent documents. Awaiting the reply
of COA Audit Team.
The unserviceable Office and ICT Equipment were already reflected in the
Inventory and Inspection Report of Unserviceable Property (IIRUP) and are
for disposal this year. Also, the AS prepared and submitted JEV Nos. 01-2023-
02-047-00 to 01-2023-02-050-00 dated February 28, 2023 to take up
adjustments on the misstatements of the affected accounts.
For unserviceable properties, Management is awaiting for the appraised value

of the unserviceable equipment to be posted for public bidding for its disposal.
RO III - The Management committed to dispose of the unserviceable PPEs

within the 1st Semester of 2023 in accordance with the DILG National Quality
Management System Quality Procedures and other standards set by regulatory
entities.
RO IVB - As of May 5, 2023, Computer Software amounting to ₱392,048.21

was already reclassified as Intangible Asset. Other discrepancies were already
adjusted under JEV#22-12-09 to JEV#22-12-10 dated 12/3/2022. As of May
5, 2023, the property and accounting records are reconciled. In addition, a
virtual meeting was conducted by the Disposal and Appraisal Committee
(DAC) on April 2, 2023 for the disposal of unserviceable assets.
RO VI - Management commented that 16 units Laptops were already

transferred to Cali Elementary School last March 9, 2023 and a Request for
Inspection was already submitted to the Office of the COA Auditor regarding
the disposal of properties thru public auction.
Doubtful Balances of Accounts Payable and Inter-Agency Payable accounts
5. The balances of Accounts Payable and Inter-Agency Payables accounts totaling

₱126.376 million in DILG-CO and ROs NCR, CAR and II are inaccurate and
unreliable due to: a) accounting errors amounting to ₱4.935 million;
b) unsupported accounts payable amounting to ₱11.994 million; c) long
outstanding/dormant and undocumented balances of ₱4.735 million;
d) unreconciled difference of ₱12.840 million between balance per books and
source agencies records; and e) existence of abnormal/negative SL balances of
₱10,877.05.
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5.1 The composition of Inter-Agency Payable accounts including the Accounts
Payable of the DILG as of December 31, 2022 is presented in the table below:
Account Amount
Accounts Payable ₱ 163,124,895.75
Inter-Agency Payables
Due to BIR 23,280,784.70
Due to GSIS 6,108,356.20
Due to Pag-IBIG 896,508.95
Due to PhilHealth 1,839,655.02
Due to NGAs 81,984,689.39
Due to GOCCs 680,174.15
Due to LGUs 14,441,628.77
Total ₱ 292,356,692.93
5.2 The above balance includes the accounts of DILG-CO and ROs NCR, II and
CAR, amounting to ₱126,376,015.50, broken down below:
Account DILG-CO II NCR CAR Total

Accounts
₱44,867,540.66 ₱9,646,693.05 ₱3,680,367.82 ₱12,774,051.56 ₱70,968,653.09
Payable
Inter-Agency Payables
Due to BIR 11,762,041.89 108,315.87 65,504.59 2,360,753.73 14,296,616.08
Due to GSIS 537,918.63 24,147.11 199,274.30 1,283.50 762,623.54
Due to PAG-
20,920.84 31,603.26 26,796.50 200.00 79,520.60
IBIG
Due to
856,097.78 18,606.10 25,222.95 5,120.84 905,047.67
PHILHEALTH
Due to NGAs 22,832,836.29 1,938,913.58 2,777,190.33 2,194,309.15 29,743,249.35
Due to GOCCs 541,855.15 0.00 73,364.00 0.00 615,219.15
Due to LGUs 0.00 0.00 9,005,086.02 0.00 9,005,086.02
Total ₱81,419,211.24 ₱11,768,278.97 ₱15,852,806.51 ₱17,335,718.78 ₱126,376,015.50
a) Unadjusted accounting errors - ₱4.935 million
5.3 The Revised Chart of Accounts (RCA) under GAM for NGAs, Volume III,
defined Accounts Payable as account used to recognize receipt of goods or
services in the normal course of trade and business operation.
5.4 In RO II, review and analysis of the accounting records disclosed that various
transactions were misclassified; thereby, affecting fair presentation of accounts
involved. Details are as follows:
Account
Used Should be Nature Amount
Accounts Due to Payment of emoluments and ₱4,462,475.58
Payable Officers and other expenses payable to
Employees
91
Account
Used Should be Nature Amount
officers and employees of the
DILG.
Accounts Other Payment of monthly 461,014.79
Payable Payables deductions in payroll of
members of DILG-RO II
Employees Union and other
cooperatives.
Subsidies- Accounts Cancellation of stale check 12,000.00
Others Payable
Total ₱4,935,490.37
b) Undocumented Accounts Payable - ₱11.994 million
5.5 Validation of the ₱12,774,051.56 balance of Accounts Payable in CAR showed

that only ₱779,703.54 were valid claims, while ₱11,994,348.02, or 94 percent,
are not duly supported with required documents contrary to Section 4(6) of PD
No. 1445 which required that claims against government funds shall be
supported with complete documentation.
5.6 The unsupported Accounts Payable originated from the construction projects
for the DILG Provincial Offices in Apayao and Ifugao wherein the projects
were claimed to have been completed as of December 31, 2022, however,
related supporting documents such as sales invoice were not provided by the
DILG.
5.7 The absence of supporting documents cast doubts on the validity and
correctness of the ₱11,994,348.02 set-up accounts payable.
c) Long outstanding/dormant and undocumented balances - ₱4.735 million
5.8 COA Circular No. 94-013 dated December 13, 1994 states that within ten days
after the end of each month/end of agreed period for the Project, the IA shall
submit the Report of Checks Issued and the Report of Disbursement to report
utilization of funds to the Source DILG (SA). The IA shall return to the SA any
unused balance upon completion of the project.
5.9 Verification of accounts of the DILG-CO and NCR disclosed that year-end
balances of Due to NGA and Due to LGU accounts include long outstanding
and unaccounted/undocumented balances totaling ₱4,734,938.65.
Office Due to NGA Due to LGU Total

CO ₱ 446,021.00 ₱ 0.00 ₱ 446,021.00
NCR 1,579,094.25 2,709,823.40 4,288,917.65
Total ₱2,025,115.25 ₱2,709,823.40 ₱4,734,938.65
92
5.10 In DILG-CO, ₱446,021.00 have been outstanding in the books for more than
10 years. These consist of accounts transferred from old New Government
Accounting System (NGAS) to the new enhanced NGAS (eNGAS) which
remained dormant in the books of accounts. Analysis of subsidiary ledgers
(SLs) extracted from the eNGAS, revealed that there were no transactions since
the transfer to the new eNGAS, details of which are as follows:
DILG Amount Remarks

Due to NGAs - Trust Fund
Dangerous Drug Board ₱ 7,075.00
Department of Agriculture - Food Security 6,091.00
NCFW-CIDA-GAD 9,277.00 No reported
Presidential Management Staff (PMS) - 104,424.00 balance per
Clean and Green confirmation
PMS – Local Government Service 87,400.00
Equalization Fund
PMS – Lupong Tagapamayapa Incentives 3,050.00
Awards
PMS – SRA 228,704.00
Total ₱446,021.00
5.11 In DILG NCR the Accounting Section could not provide the breakdown or
details of ₱1,579,094.25 and ₱2,709,823.40 balance of the Due to NGAs and
LGUs due to inadequacy of SL.
5.12 The existence of dormant and non-moving unliquidated fund transfers could
have been avoided had the Management strictly monitored and complied with
the accounting and reportorial requirements of fund utilization as stated in COA
Circular No. 94-013.
d) Discrepancy between balance per books and SAs records - ₱12.840

million
5.13 To ascertain correctness of balances of funds received from various agencies

by DILG-CO, confirmation requests were sent to the concerned SAs. The
results of confirmation disclosed a discrepancy of ₱12,839,945.58 between the
DILG’s books and that of SAs’ records,
Per
DILG Per Books Confirmation Difference
Due to NGAs – Trust Fund
Local Government Academy ₱3,100.00 ₱ 0.00 ₱3,100.00
Office of the Presidential
5,836,009.42 10,000,000.00 4,163,990.58
Adviser on Peace,
93
Per
DILG Per Books Confirmation Difference
Reconciliation and Unity
(OPAPRU)
NCFW-CIDA-GAD 9,277.00 0.00 9,277.00
PMS - Clean and Green 104,424.00 0.00 104,424.00
PMS – LGSEF 87,400.00 0.00 87,400.00
PMS – LTIA 3,050.00 0.00 3,050.00
PMS – SRA 228,704.00 0.00 228,704.00
DPWH - Office of the
0.00 8,240,000.00 8,240,000.00
Secretary
Total Discrepancy ₱12,839,945.58
e) Existence of abnormal/negative balances - ₱10,877.05
5.14 Negative and abnormal balances in the SLs accounts in DILG-RO II amounting
to ₱10,877.05 were included in the reported balance of Due to Inter-Agency
Payables account, which could have been promptly detected and corrected had
offices concerned conducted regular reconciliation of their accounts. Details are
as follows:
Account Operating Unit Balance per SL

Due to GSIS PO- Cagayan ₱ (2,876.26)
Due to BIR PO- Quirino (2,224.42)
Due to PHIC Regional Office (0.01)
PO- Cagayan (5,337.68)
PO- Isabela (438.63)
PO- Quirino (0.05)
Total ₱(10,877.05)
5.15 The foregoing discrepancies affected the accuracy and reliability of the above-
mentioned payable accounts.
5.16 We recommended and Management agreed to instruct the:
a) Accountants of RO II to prepare adjusting entries to reflect the correct

balance of the Accounts Payables;
b) Accountant of CAR to: i) facilitate submission of required supporting

documents; otherwise, cause the reversion of the undocumented
payables; and ii) ensure that only goods and services
delivered/rendered with complete supporting documents are recorded
as Accounts Payable;
94
c) NCR Accountant to investigate and determine the breakdown or
details of Due to NGAs and LGUs accounts without SL balances and
adjust records, as necessary;
d) DILG-CO Accountant to reconcile their records with the SAs and

prepare adjusting entries, if necessary; and
e) RO II Accountant to investigate the cause of SL accounts with

abnormal/negative balances and adjust the subsidiary records, as
needed.
CO - The dormant account (long overdue outstanding unliquidated fund

transfer) amounting to ₱446,021.00 represent the balance as of December 31,
2022. This has been reduced to ₱151,821.00 as of March 16, 2023.
Management was able to secure liquidation reports of LGA, OPAPRU and
various Presidential Management Staff accounts which was appropriately
adjusted in the books of accounts.
In connection with the DPWH, Management already issued Certifications to

DPWH dated March 07, 2019 and October 27, 2022, stating that there was no
available record/document pertaining to the said fund transfer (FT). On July 08,
2022, the Management instructed the Accounting Section (AS) to coordinate
with DPWH Officials to inquire/gather any information/documents as evidence
of actual receipt of the said FT by the DILG, however, DPWH has no available
record/s.
RO II - The AS prepared and submitted the necessary adjustments under JEV

No. 01-2023-02-051-00 to 01-2023-02-053-00 dated February 28, 2023 to
correct the erroneous entries previously made and to revert the long outstanding
accounts payable and JEV Nos. 01-2023-02-056-00, 01-2023-02-058-00, 01-
2023-02-060-00 to 01-2023-02-062-00 dated February 28, 2023 to take up
necessary adjustments in the books to correct the accounts affected which was
submitted to the Office of the Resident Auditor on March 17, 2023.
Property Management
6. Various accounting and property records/forms/registries which are necessary in

monitoring receipt and issuance of semi - expendable properties and property,
plant and equipment were not maintained by NCR, CAR and RO X.
6.1 Section 4.7 of COA Circular 2022-004 dated May 31, 2022, enumerated the
forms, registry and reports which are required to be maintained in order to
strengthen controls over the semi-expendable property.
95
6.2 Section 21 of Chapter 10, GAM for NGAS, Volume I states that based on
approved RIS, the Supply and/or Property Custodian shall prepare the Property
Acknowledgement Receipt (PAR) (Appendix 71) to support the issue of
property to end-user. The PAR shall be renewed at least every three years or
every time there is a change in accountability or custodianship of the property.
6.3 The following forms/registries/reports were not prepared and maintained by the
NCR, CAR and RO X:
Region Records/ Forms Remarks

CAR Registry of Semi- General Services Section (GSS) did not
Expendable prepare the RegSPI for all issued semi-
Property Issued expendable properties as of December 31,
(RegSPI) 2022. Instead, the GSS reported issued semi-
expendable properties in the Report on the
Physical Count of Semi-Expendable
Property (RPCSP).
NCR RPCSP, Semi- Verification of records disclosed that there
Expendable was no RPCSP prepared and submitted to the
Property Ledger Audit Team as at year-end. At the same time,
Card (SPLC) and issuances of semi-expendable properties
RegSPI were not recorded in the SPLC and RegSPI.
X Property Audit team noted that 27 items were not duly
Acknowledgement supported with corresponding PAR. The said
Receipt (PAR) PPE items were issued between the period of
CYs 1991 to 2021 and it was found that prior
to CY 2022 the concerned office failed to
renew PAR every three years or every time
there was a change in accountability.
6.4 We recommended and Management agreed to instruct the

Property/Supply Officers of ROs NCR, CAR and X to maintain necessary
property records/forms/registries as prescribed to strengthen controls over
government assets.
NCR – GSS are currently using all required forms.
CAR - Management has already instructed the GSS to prepare the

RegSPI/RSPI and ensure maintenance of said forms. As of May 4, 2023,
preparation of RegSPI for the regional office is at 10 percent completed.
RO X - Management commented that they are in the process of renewing all of

the PARs issued and issuance of a new PAR to new accountable personnel. As
96
of date, all POs had already renewed and issued the PAR to all accountable
officers, while the regional office is still on its on-going PAR renewal and
issuance process. Due to the number of PAR to be renewed the RO is still at 36
percent completion. However, the in-charge personnel assured that the renewal
and issuance of PAR will be completed by May 15, 2023
Non-compliance with Republic Act No. 9184
7. Management was not able to fully comply with the provisions of Republic Act No.
9184 particularly on the inclusion of all procured items in the Annual
Procurement Plan, imposition of liquidation damages, issuance of Notice of
Award, preparation of abstract of quotation, and requirements on PhilGEPS
registration, among others.
7.1 Republic Act (RA) No. 9184, known as the Government Procurement Reform
Act (GPRA), laid out necessary guidelines for the modernization,
standardization and regulation of procurement activities of the government.
7.2 The following deficiencies were noted during the course of audit:
Office Observations Criteria

CO, Procurement of airline tickets of DILG-CO and Section 7 of
VIII venues for seminar/activities of DILG-RO VIII the Revised
amounting to ₱4,864,868.81 and ₱2,986,883.37, Implementing
respectively, were not included in the DILG’s Annual Rules and
Procurement Plan (APP). Regulations
(RIRR) of RA
No. 9184
IX Purchases totaling ₱1,137,900.95 were not imposed Item 3, Annex
with liquidated damages despite failure of the supplierD of the RIRR
to satisfactorily deliver the goods within the specified
of RA No.
delivery schedule with delays ranging from four to 84 9184
days.
VII The Notice of Award (NOA) was not issued to nine Paragraph L,
suppliers awarded for the procurement of lease of Annex “H” of
venue totaling ₱13,277,750.00. the 2016 RIRR
of the RA No.
9184
XIII The abstract of quotation for the procurement of Section 12.1 of
meals and catering services totaling ₱8,603,946.26 the RIRR of
through small value procurement was prepared by the RA No. 9184
Technical Working Group
XIII The procurement of Security Service totaling Section 54.6 of
₱888,000.00 of the DILG Regional Office was the RIRR of
RA No. 9184
97
Office Observations Criteria
provided by a Security DILG whose certificate of
PhilGEPS registration was expired since CY 2020.
VIII, Preference was given to the lease of privately-owned Annex
XI, property or venues for activities conducted by DILG- H.V.D.9.b(i)
XII ROs VIII, XI, and XII, costing ₱1,486,064.06, of the RIRR of
₱5,619,294.04, and ₱147,535.75, respectively, RA No. 9184
instead of the lease of publicly owned property or
venues from other government agencies.
7.3 We recommended and Management agreed to require:
a) The Bids and Awards Committee of DILG-CO and RO VIII to include

the purchase of airline tickets and venues for seminars/activities in the
APP, including its mode of procurement;
b) ROs VII and XIII to strictly adhere to the provisions of RA No. 9184
on issuance of NOAs, preparation of abstract of quotation, and
PhilGEPS registration;
c) ROs VIII, XI, XII to conduct trainings/ seminars/ provincial conference

for the development and productivity of DILG personnel in available
venue within the office premises or publicly-owned real property or
venue from other government agencies; and
d) RO IX to impose liquidated damages for failure of supplier to

satisfactorily deliver the goods within the specified delivery schedule
stated in the contract.
CO - The airline ticket requirements for FY 2023 were already included in the
Updated Annual Procurement Plan (UAPP) as of March 2023. As for the
implementation of Negotiated Procurement - Direct Retail Purchase of Airline
Tickets (Section 53.14) in CO, the negotiation with airline companies is
ongoing. Likewise, the Procurement Management Division, Administrative
Service (PMD, AS) has drafted a memorandum addressed to all operating units
to submit the names of official travel arrangers and drafted the internal
guidelines for its implementation.
RO VII - They inadvertently omitted to issue Notice of Awards (NOA) to nine

suppliers although it was never their intention to do away with the transparency
requirements considering that they have posted the BAC Resolutions and
Purchase Orders pertinent to the matters in question and that we have also
posted the Notice to Proceed in the PhilGeps portal. Nonetheless, in the
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succeeding procurement for lease of venue they committed to issue NOA to the
winning bidders/suppliers.
RO VIII - The Management agreed with COA that all Sub-Regional Offices
shall submit their respective PPMP for consolidation in the Regional Office.
RO IX - Management committed to immediately impose liquidated damages

to all payments with deliveries starting April 2023.
RO XI - Starting Feb 2023, RFQs they will be served thru Designated

Procurement Officers on procurement of lease of venue to government-owned
facilities available in their respective areas.
RO XII - Management commits to take the necessary steps to comply with

the recommendation and primarily consider utilization of the DILG's available
resources or publicly-owned venues to ensure economical spending of
government funds.
RO XIII - Management committed to only include the BAC members in the

preparation of the abstract of quotation effective March 27, 2023 and onwards,
to satisfy the provision of Section 12.1 of the Revised IRR of R.A 9184.
The Management already instructed the BAC and TWG to adhere to the
provisions of RA 9184 in the succeeding procurement of Security Service.
Non-remittance of unutilized operating funds
8. Unutilized operating funds transferred to various City/Provincial Offices totaling

₱46.872 million were retained and not remitted to the Bureau of Treasury as of
December 31, 2022, thus, depriving the national government of the much-needed
funds in the implementation of its various programs and activities.
8.1 DOF-DBM-COA Permanent Committee Resolution No. 2005-2 dated June

2005 equally authorized all government agencies involved in government
procurement to treat collections/fees from procurement-related activities as trust
receipts and to deposit said collections in an authorized government depository
bank as an exemption from Executive Order (EO) No. 338, s. 1996, subject to
the following limiting proviso:
a) Only the honoraria authorized in RA No. 9184 and its IRR and overtime
pay, subject to the rules and regulations issued by the DBM thereon, shall
be charged against such trust receipts, in accordance with the usual
budgetary, accounting and auditing rules and regulations; and
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b) Any excess in the amount collected in the conduct of government
procurement-related activities shall be remitted to the Bureau of
Treasury (BTr) as income of the General Fund.
8.2 The above-cited provisions were reiterated in the post-facto authority issued by
the BTr dated May 13, 2022 authorizing DILG to maintain LCCA accounts in
Provincial offices provided that the accounts will be used for the deposit of cash
advances (CAs) for regular operations and implementation of various programs,
projects and activities any balance in excess of the required maintaining balance
shall be directly reverted to the BTr by the banks at the end of the year.
8.3 Consistent with the policy of the state to implement a Treasury Single Account
system for government disbursements, the authority to open and maintain
LCCAs must be vested in the DILG by law or regulation as cash account
balances maintained by agencies without specific authority or legal basis are
unauthorized and should be closed, accordingly. Likewise, unexpended
balances from current accounts, except the required bank maintaining balances,
should be reverted to the general fund at such time determined by authorities.
8.4 Audit showed that the operating funds in various DILG-ROs totaling
₱46,871,935.40 were not remitted to the BTr as of year-end, contrary to the
authority granted by the BTr. Details are shown below:
Office Provincial Office Unexpended Balance

DILG Abra ₱882,887.40
DILG Apayao 448,103.63
DILG Baguio 38,485.68
CAR DILG Benguet 111,639.54
DILG Ifugao 120,653.24
DILG Kalinga 297,127.83
DILG Mt. Province 90,470.47
DILG Batanes 575,235.36
DILG Cagayan 1,799,416.81
II DILG Isabela 1,584,072.88
DILG Nueva Vizcaya 2,490,309.97
DILG Quirino 453,065.31
DILG Aurora 245,441.94
DILG Bataan 282,525.24
DILG Bulacan 145,447.84
DILG Nueva Ecija 142,630.43
III DILG Pampanga 432,784.90
DILG Tarlac 43,295.26
DILG Zambales 126,098.69
DILG Angeles City 219,119.86
DILG Olongapo City 672,279.50
V DILG Albay 2,809,449.95
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Office Provincial Office Unexpended Balance
DILG Catanduanes 528,221.72
DILG Camarines Norte 1,534,843.99
DILG Camarines Sur 3,914,876.57
DILG Masbate 1,973,498.88
DILG Sorsogon 4,628,418.31
DILG Zamboanga Sibugay 3,635,664.97
DILG Zamboanga Del Sur 3,202,120.17
IX DILG Zamboanga Del
2,757,808.54
Norte
DILG Zamboanga City 2,042,410.40
XII DILG Sultan Kudarat 8,643,530.12
Total ₱46,871,935.40
8.5 The non-remittance of unutilized funds to BTr as at year-end deprived the

national government of the much-needed funds in the implementation of its
various programs and activities.
8.6 We recommended and Management of DILG ROs II, III, V, IX, XII and
CAR agreed to remit all unutilized/excess cash balances pursuant to the
authority granted by the BTr.
CAR - From January to April 2023, the FOUs disbursed a total of ₱1,350,321.36
as payment to creditors and remittance to BIR of taxes withheld, and remitted to
the BTr unexpended fund amounting to ₱504,481.10. As of April 30, 2023, the
amount of Cash in Bank of City/ Provincial Offices has been reduced to
₱30,204.92 from the ₱1,885,007.38 balance as of December 31, 2022.
RO II - Management issued Regional Circular No. 2022-13 dated October 28,

2022 amending Regional Circular No. 2022-04 relative to the Policy Guidelines
on the Utilization and Liquidation of Funds Transferred to Provincial Offices of
which one of the policy content and guidelines is to refund all unexpended
balances of the funds transferred after its validity and/or upon completion of the
intended purpose to the Regional Office for remittance to the National Treasury.
Likewise, the main purpose of said issuance is to recognize the importance of
the efficient and effective utilization of the Fund Transfer (FT). The DILG
Provincial Offices (POs) had already remitted to the National Treasury the
amount of ₱812,040.94 for unexpended CY 2022 and prior years FT.
RO III - After paying the CY 2022 payables, the seven POs refunded the
unexpended balance of CY 2022 to DILG RO III and subsequently remitted to
BTr in the amount of ₱1,079,188.51
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RO V - As of May 5, 2023, a total amount of ₱6,669,100.32 unutilized
operating funds transferred to various POs were refunded and remitted to the
BTr. The remaining balance are still for review.
RO IX- Refunds for prior balances were noted for CY 2022 except for those
ongoing programs/activities still for implementation of the provinces.
RO XII - The RO has forwarded to the Field Offices (FOs) the Unnumbered
Memorandum from the DILG-CO dated May 22, 2022 regarding the refund of
unutilized funds for FY 2020 and earlier. As of this writing, the balance of the
unutilized operating funds which are due for refund is ₱4,852,828.81.
Fund Utilization of Locally-Funded Projects
9. Management was not able to obligate ₱362.992 million or 16.65 percent of its total
allotment of ₱2.180 billion due to non-implementation of two projects and partial
implementation of four projects with fund utilization rate ranging from zero to
74.37 percent.
9.1 Section 68 of R.A. No. 11639, or the General Appropriation Act (GAA) for FY
2022 and Section 3.3 of the National Budget Circular (NBC) No. 587 dated
January 3, 2022 states that, all appropriations authorized under the FY 2022
GAA, shall be available for release, obligation, and disbursement for the
purpose specified, and under the same General and Special Provisions of said
GAA applicable thereto.
9.2 For Fiscal Year (FY) 2022, DILG has CY appropriations of ₱7,996,761,461.00
and continuing appropriation of ₱1,753,858,255.04, or total available budget of
₱9,750,619,716.04.
9.3 Shown in the following table is the breakdown of the DILG appropriation,
allotment and expenditures:
Unobligated
Appropriations Allotments Obligations
Particulars Allotment
(PhP) (PhP) Incurred (PhP)
(PhP)
Current, GAA FY 2022, R.A. No. 11639
Regular Agency Budget
Agency Specific 7,267,071,000.00 7,267,071,000.00 6,802,812,816.46 464,258,183.54
Budget
Automatic
Appropriations 330,977,398.00 330,977,398.00 326,138,465.54 4,838,932.46
Special Purpose 396,294,201.00 396,294,201.00 395,495,396.81 798,804.19
Fund
Subtotal 7,994,342,599.00 7,994,342,599.00 7,524,446,678.81 469,895,920.19
Special Account - Foreign Assisted/Foreign Grants Fund
Automatic 2,418,862.00 2,418,862.00 2,418,861.36 0.64
Appropriations1
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Unobligated
Appropriations Allotments Obligations
Particulars Allotment
(PhP) (PhP) Incurred (PhP)
(PhP)
Subtotal, 7,996,761,461.00 7,996,761,461.00 7,526,865,540.17 469,895,920.83
Current
Continuing Appropriations, GAA CY 2021, R.A. 11518
Regular Agency Budget
Agency Specific 1,594,678,168.41 1,593,678,168.41 1,522,730,702.71 70,947,465.70
Budget
Special Purpose 159,180,086.63 159,180,086.63 143,575,096.00 15,604,990.63
Fund
Subtotal, 1,753,858,255.04 1,752,858,255.04 1,666,305,798.71 86,552,456.33
Continuing
Total 9,750,619,716.04 9,749,619,716.04 9,193,171,338.88 556,448,377.16
1
This pertains to fund released for the implementation of Disaster Risk Management and Institutional Strengthening.
Pursuant to Amendment No. 5 the deadline for drawdown of funds was until June 15, 2022.
9.4 Of the DILG’s total allotment the year under audit, the amount totaling
₱2,179,709,000.00 was allocated for the implementation of locally funded
projects listed below:
Project Allotment Obligation Unobligated Utilization

Allotment Rate
Support for Local ₱188,307,000.00 ₱166,617,954.84 ₱21,689,045.16 88.48
Governance Program
Civil Society 16,589,000.00 13,277,623.22 3,311,376.78 80.04
Organization
(CSO)/Peoples
Participation
Partnership Program
(PPPP)
Improve LGU 32,877,000.00 29,359,015.86 3,517,984.14 89.30
Competitiveness and
Ease of Doing
Business
911 Emergency 25,552,000.00 24,430,611.92 1,121,388.08 95.61
Services
LAN, WAN and IP 52,267,000.00 38,872,352.77 13,394,647.23 74.37
Telephony Expansion
Enhanced 110,440,000.00 107,184,940.29 3,255,059.71 97.05
Comprehensive Local
Integration Program
(E-CLIP)
Advocacy and 8,682,000.00 1,371,451.83 7,310,548.17 15.80
Capacity Building for
Local Institutions on
Women and Children
Barangay Tanod Skills 13,802,000.00 11,456,313.89 2,345,686.11 83.00
Enhancement
Philippine Anti-Illegal 100,000,000.00 72,369,244.84 27,630,755.16 72.37
Drugs Strategy
(PADS)
103
Allotment Rate
Communicating for 15,440,000.00 14,306,332.03 1,133,667.97 92.66
Perpetual End to
Extreme Violence and
forming Alliance
towards Positive
Change and Enriched
Communities
(C4PEACE)
Preventing and 15,000,000.00 13,384,432.74 1,615,567.26 89.23
Countering Violent
Extremism and
Insurgency (PCVEI)
LGU Information 35,007,000.00 30,479,883.10 4,527,116.90 87.07
Management Program
Decentralization and 30,000,000.00 14,469,675.36 15,530,324.64 48.23
Constitutional Reform
Advocacy Campaign
(CORE)
Support to COVID-19 250,000,000.00 205,895,134.00 44,104,866.00 82.36
Contact Tracing
Operations
Purchase and 200,000,000.00 0.00 200,000,000.00 0.00
Distribution of
Barangay Handbooks
Advocacy Campaign
Strengthened LGU 3,890,000.00 3,129,658.19 760,341.81 80.45
Database for
Evidence-Based
Planning: Support to
Community-Based
Monitoring System
Installation of 3,000,000.00 0.00 3,000,000.00 0.00
Barangay Management
Information System
(BMIS) in Barangay
Poblacion, Victoria,
Oriental Mindoro
Local Governance 1,000,000,000.00 995,293,625.54 4,706,374.46 99.53
Performance
Management Program
- Seal of Good Local
Governance Incentive
Fund (SGLG Fund)
Lupong 14,586,000.00 14,270,956.48 315,043.52 97.84
Tagapamayapa
Incentives Awards
Manila Bay Clean-Up 54,270,000.00 51,789,992.50 2,480,007.50 95.43
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Allotment Rate
Bantay Korapsyon 10,000,000.00 8,757,978.17 1,242,021.83 87.58
(BK)
Total ₱2,179,709,000.00 ₱1,816,717,177.57 ₱362,991,822.43 83.35
9.5 Based on the submitted Annual Operations Plan and Budget (OPB), these
allocated funds were intended for the payment of salaries of Contract of Service
(COS) personnel under the Project Management Offices (PMOs); travelling
expenses; purchase of supplies, communication expense; development of e-
Learning Materials; acquisition of IT equipment and software; training
expenses of Learning Resource Institutes (LRIs) and various project
beneficiaries; development and production of Information, Educational and
Communication (IEC) materials; and payment of incentive funds/grant to
LGUs, among others.
9.6 Audit disclosed that amount totaling ₱1,816,717,177.57, or 83.35 percent of the
total allotments ₱2,179,709,000.00, was obligated during the year, leaving a
balance of ₱362,991,822.43 or 16.65 percent. Furthermore, six out of the 21
projects have fund utilization rate ranging from zero to 74.37 percent.
9.7 Review of the Consolidated Accomplishment Reports and Quarterly Physical

Report of Operations as at year-end, submitted by the Planning Services
Division and the Office of the Assistant Secretary for Administration, Finance
and Comptrollership, disclosed that the low utilization rate were due to the non-
conduct of various activities such as orientations, workshops, trainings, conduct
of audit to various LGUs, data analysis and procurement of IEC materials, due
to top management’s decision to realign funds, delayed receipt of funds, on-
going consolidation of inputs from various stakeholders, and delayed
procurement, among others.
9.8 The PMOs concerned in the implementation of the projects were unable to
address the issues and concerns that hindered the implementation of projects;
thus, expected optimum results for the benefit of the intended beneficiaries were
not fully achieved. Likewise, the same caused the eventual reversion of
unexpended allotments to the Unappropriated Surplus of the National
Government.
9.9 We recommended and Management agreed to properly plan the programs,

projects and activities to be undertaken and to fast-track implementation
to ensure attainment of goals/ objectives of the DILG.
9.10 Management commented that they issued policy guidelines on the

operationalization of the DILG CY 2023 Plans and Priorities which served as
guide to all operating units in operationalization of their plans and programs.
Specifically included in the said circular are the monitoring and tracking system
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and processes that are strictly put in place to ensure effective and timely
implementation of programs and projects, to wit:
a) Creation of DILG-wide Monitoring and Evaluation Steering Committee

headed by Undersecretary for Plans, Public Affairs and Communications
and co-chaired by Undersecretaries for Local Government, Operations,
Peace and Order and Public Safety. The Committee shall regularly conduct
meetings, dialogues and consultations for performance review/assessment
and discussion of issues/concerns needing management decisions/actions;
b) Submission of Monthly Programs, Projects and Activities (PPA) Status

Report per OPB wherein operating units will report the physical and
financial accomplishments of their regular programs, including major
issues/concerns that they will be encountering in the implementation of their
respective PPAs;
c) Stronger partnership/collaboration between PS and FMS to ensure that key

deliverables are accomplished and corresponding programmed funds are
utilized within the set timelines; Likewise, the conduct of semestral/year-
end performance review/assessment is another mechanism practiced to
effectively track the physical and financial performance of priority
programs and projects based on the achievement of key deliverables/outputs
and annual targets and to recommend strategies/ mechanisms to improve
performance.
9.11 The Department is continuously exerting its efforts to utilize the approved
budget within the year, however, circumstances in CY 2022, like the change in
new administration priorities, the effect of the COVID-19 pandemic, and
compliance with the procurement law have affected the program and project
implementation. For CY 2023, Department Circular No. 2023-005 was issued
to establish new ways to monitor implementation of the programs and projects
targets/activities as well as reporting of operational issues and concerns
encountered in the implementation of a particular program/project.
9.12 The Planning Service assured that the establishment of the new monitoring and
tracking system will be strictly applied to programs and projects for CY 2023
as well as those activities chargeable against CY 2022 Continuing
Appropriation.
9.13 Likewise, Management also commented that when the operating units/PMOs
submit their Project Procurement Management Plan (PPMP) for consolidation
into an APP, the timeline for their proposed procurement are already indicated
therein. Further, the PMD is regularly issuing Memorandum every quarter
reminding operating units/PMOs to submit their requests on time. However,
most PMOs, fail to follow their proposed procurement timeline which is beyond
the control of the BAC/PMD. Be that as it may, PMD, AS will closely monitor
106
implementation of procurement activities based on the timeline as indicated in
their PPMP.
9.14 Management provided the following explanation/justification for low

utilization rate of the following projects:
Project Comments and Actions Taken/to be Taken

Advocacy and National Orientation and Roll-out Orientation on the
Capacity Enhanced Local Committees on Anti-Trafficking and
Building for Violence Against Women and their Children (LCAT-
Local VAWC) and Barangay Violence Against Women (VAW)
Institutions on Desk Functionality Indicators were held in abeyance for
Women and the reason that the IRR of Republic Act (R.A.) Nos. 11862
Children and 11930 were not yet issued. The IRR is needed to
provide procedures and guidelines for its implementation
to facilitate compliance and achieve its objectives, hence,
the activity was not conducted as scheduled.
The development of the training module required the

engagement of a consultant, however, the prospect
consultants could not meet the procurement requirements
for consultancy services. In lieu thereof, a resource person
was engaged and the fund allotted was paid for the
honorarium of the resource person.
LAN, WAN Funds allocated for the procurement of security update was
and IP not utilized because it was covered in the procurement of
Telephony Network Infrastructure Upgrade of LAN. Savings
Expansion generated from activities conducted at lesser cost as results
of lower bids for ICT Software and Internet Service
Providers (ISPs) in Central and Regional Offices.
Philippine Anti- The shift of priorities by the new administration and
Illegal Drugs transition of management realigned some major
Strategy deliverables of the project which resulted in the spillover
of activities to CY 2023. The Buhay Ingatan Droga’y
Ayawan (BIDA) Program implementation, procurement of
IEC materials and other related activities were already
conducted by ROs in CY 2023. Incentives allotted for
awardees in BARMM are yet to be downloaded pending
the approval of MOA.
Decentralization Writeshop series for the documentation of output on the
and thematic amendment of the LGC and Baseline Research
Constitutional was not conducted during CY 2022 due to the
Reform unavailability of resource persons. Line Advertisement for
Advocacy Decentralization and CORE was procured, however, only
Campaign four episodes were aired and the remaining episodes will
be aired in 2nd semester of CY 2023. Activities for
107
Project Comments and Actions Taken/to be Taken
Strengthening Institutional Linkages Building Partnerships
for Advocacy Campaigns were partially implemented
because there are no CSOs accredited by CSO/PPPP
Office, however, said activities will be conducted in CY
2023. lEC materials and collaterals for decentralization
and CORE in six regions will be procured in CY 2023.
Purchase and The implementation of this project was discontinued due
Distribution of to the change of the priority needs at the local level,
Barangay particularly the barangays; and, the DILG sees that the
Handbooks purchase and distribution of barangay handbooks is no
longer urgent/priority for CYs 2022/2023 taking into
consideration the available information/materials (online
and paper) that could still be utilized to enhance the
knowledge and skills of the barangay officials to provide
basic services to their constituents.
The funding allocation for the project was requested for

augmentation/realignment to fund expansion of the
targets/activities of implementation of the Barangay Tanod
Skills Enhancement (BTSE), subject to the provision of
Sections 74-77 of GAA FY 2022, and/or approval of the
Department of Budget and Management (DBM)/Office of
the President (OP).
Installation of The management already advised DILG-MIMAROPA to

Barangay coordinate with the concerned LGU/barangay and
Management proponent of the project and instructed to prepare the
Information necessary documents for the implementation of the BMIS
System in and signing of MOA between DILG and LGU. On March
Barangay 20, 2023, the Sangguniang Bayan of the Municipality of
Poblacion, Victoria, Oriental Mindoro has already issued a resolution
Victoria, authorizing Mayor Joselito C. Malabanan to enter and sign
Oriental into MOA with DILG MIMAROPA for the installation of
Mindoro BMIS in Barangay Poblacion, Victoria, Oriental Mindoro.
Implementation of Enhanced Comprehensive Local Integration Program
10. Guidelines on the implementation of Enhanced Comprehensive Local Integration

Program in RO I were not strictly implemented. Moreover, the cost valuation and
corresponding remuneration of the surrendered firearms amounting to
₱545,000.00 and ₱771,526.74, respectively, could not be validated due to lack of
price ceiling reference.
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10.1 DILG-DND Joint Memorandum Circular (JMC) No. 2018-01 dated July 5,
2018 prescribes the implementing guidelines for the provision of DILG-
administered package of assistance for Former Rebels (FRs) and Militia ng
Bayan (MB).
10.2 DILG-DND JMC No. 01 s. 2021 dated September 22, 2021 provides that the
amount of firearms remuneration shall be double the cost valuation of turned-
in firearms based on the latest issuance of the Philippine National Police (PNP)
and cost valuation of the turned-in firearms shall be based on the standard price
ceiling set for a particular kind, caliber, and make of firearms, and its condition
upon turn-in.
10.3 For CY 2022, the DILG-RO I paid a total of ₱2,145,526.74 of firearms

remuneration to qualified beneficiaries. However, based on independent
evaluation conducted, it was found that the payment of firearms remuneration
exceeded by ₱315,461.94.
10.4 The Cost Valuation of Inventoried Firearms (CVIF), as corroborated by the

Property Turn-In Slips (PTIS) and Technical Inspection Reports (TIR), showed
that the total valuation of turned-in firearms was ₱541,000.00.
10.5 Review of disbursement vouchers showed that the total remuneration released
to beneficiaries was ₱1,254,000.00, while based on independent computation
conducted by the Audit Team, the total firearm remuneration should be
₱938,538.06, which is equivalent to double the amount of cost valuation as
determined by the Valuation Committee, or a difference of ₱315,461.94 from
the prescribed amount.
10.6 The DILG Provincial and RO Focal Persons disclosed that the remunerations
granted were based on the Endorsement Letters which were processed by the
Local Social Welfare and Development Officer (LSWDO) through the E-CLIP
Information System (E-CLIP IS). They further explained that their access to the
E-CLIP IS limited to their functions as provided in the JMC, that is, to evaluate
documents submitted by concerned offices and cross-check names in their
database.
10.7 As per Management’s own inquiry with the LSWDO, the amount of firearms
remuneration appearing in the Endorsement Letters were system-generated
based on the details of turned-in firearms.
10.8 On the other hand, eight units of surrendered firearms were not included in the
list of firearms provided by the PNP-FEO as listed in DILG-DND JMC No. 01
s. 2021. Consequently, the cost valuation of the subject firearms amounting to
₱545,000.00 and the corresponding remuneration totaling ₱771,526.74 could
not be validated due to lack of price ceiling reference. Details are as follows:
109
Type of Firearm Firearms
Qty Cost Valuation
Surrendered Remuneration
M653 (Rifle, Colt) 1 ₱45,000.00 ₱120,000.00
M4 Carbine (Bushmaster) 1 75,000.00 150,000.00
M16A1 (Rifle, Elisco) 3 45,000.00 45,000.00
45,000.00 77,948.68
90,000.00 90,000.00
M16A1 (Rifle, Colt) 2 45,000.00 88,578.06
100,000.00 100,000.00
M16A1 Rifle, Caliber 1 100,000.00 100,000.00
5.56mm, Hydramatic
Total 8 ₱545,000.00 ₱771,526.74
10.9 Inquiry with the RO Focal Person disclosed that this was already referred to the
concerned office at the DILG-CO. An Advisory dated February 14, 2022 was
issued by the DILG-CO requesting ROs to advise all Provincial and Highly
Urbanized Cities ECLIP Committees in their area of responsibility to directly
endorse their concern to the local PNP for appropriate action.
10.10 We recommended that Management:
a) Strictly follow the guidelines in the payment of firearms remuneration

as provided in DILG-DND JMC No. 01 s. 2021; and
b) Direct the DILG Focal Person to request from the local PNP an
updated firearm remuneration list/database in order to validate the
cost valuation and the corresponding remuneration of the subject
firearms.
10.11 The Regional Management wrote a referral letter to DILG-CO/ECLIP-PMO

through NBOO Director dated January 19, 2023 about the matter. A reply-letter
was received on February 1, 2023 requesting for the pertinent documents
submitted to the COA which was transmitted to DILG-CO.
10.12 Also, Management issued an advisory dated January 19, 2023, directing DILG
Ilocos Sur and La Union to request an updated Firearms Remuneration (FAR)
Database to their respective local PNP. On January 24, 2023, DILG Ilocos Sur
wrote a letter request to Ilocos Sur PNP Office (ISPPO) to present an updated
PNP FAR Database, while on January 27, 2023, DILG La Union did the same
to their local PNP Office (LUPPO). A memorandum from ISPPO was received
re: PNP MC used in the valuation of Firearms of PNP-owned and loaned FAs
and FAR of FRs. A response letter was also received from LUPPO indicating
therein the updated firearm database.
10.13 The same matter was referred to NBOO thru a letter dated January 19, 2023 and
a letter reply was received on February 1, 2023, indicating that their office will
be requesting the PNP-FEO to provide NBOO with a quarterly or semi-annually
110
update on the list of firearms for subsequent updating in the ECLIP-IS to ensure
that all firearms surrendered by FRs are properly documented and to avoid
confusion at the field offices.
10.14 Furthermore, as a proactive stance of the Bureau, proposed recommendations

for the enhancement of the ECLIP-IS will be discussed with the ISTMS for a
more efficient and reliable operationalization of the ECLIP-IS.
Unreleased Death Benefit Claims
11. Death Benefit Claims in the aggregate amount of ₱1.156 million in RO I remained
unreleased to beneficiaries as of year-end due to insufficient supporting
documents with delays ranging from 10 to 296 days, thus, depriving the claimants
of the immediate assistance from the Government.
11.1 Section 2, RA No. 6942 entitled: “An Act Increasing the Insurance Benefits of
the Local Government Officials and Procuring Funds Thereof” stipulates that
in the event of death of an insured barangay official during his/her incumbency,
the beneficiaries of a Punong Barangay shall be entitled to ₱20,000.00 while
the beneficiaries of a member of Sangguniang Barangay, Barangay Secretary,
Barangay Treasurer, or Chairman of the Kabataang Barangay shall be entitled
to ₱10,000.00. In addition to the death benefits herein provided, a burial benefit
of ₱2,000.00 shall be paid to the beneficiaries.”
11.2 EO No. 115 authorizes the DILG to determine the amount and administer the
payment of death and burial benefit claims of barangay officials who died
during their term of office chargeable against the fund appropriated in the GAA
for the purpose.
11.3 Item V.E of the DILG MC No. 2018-17 provides that the check in payment for
the claims shall be turned over to the eligible beneficiaries not exceeding seven
working days upon receipt of the fund allocation.
11.4 The Status of Funds of the Provincial Offices in RO I as of December 31, 2022,
showed that out of ₱3,712,000.00 Death Benefit Claims received for CY 2022,
₱1,156,000.00, or 31.14 percent, remained unreleased to the beneficiaries as at
year-end. The unreleased death benefits claims already exceeded the prescribed
period of payment under DILG MC No. 2018-17 ranging from 10 to 296 days.
Details are as follows:
Unreleased Days
Provincial Funds Released to as of Delayed
Office Received Beneficiaries 12/31/2022
La Union ₱796,000.00 ₱682,000.00 ₱114,000.00 0
Pangasinan 1,578,000.00 792,000.00 786,000.00 11-296
111
Unreleased Days
Provincial Funds Released to as of Delayed
Office Received Beneficiaries 12/31/2022
Ilocos Sur 832,000.00 636,000.00 196,000.00 10-59
Ilocos Norte 506,000.00 446,000.00 60,000.00 0
TOTAL ₱3,712,000.00 ₱2,556,000.00 ₱1,156,000.00
11.5 Inquiry with the Disbursing Officers of the POs revealed that the primary reason
for the non-processing of the check payments for release to the beneficiaries
was the incomplete or non-submission of documentary requirements by the
DILG Municipal Office.
11.6 The delay in the release of death benefit claims deprived the beneficiaries of
immediate assistance from the government.
11.7 Out of the total unreleased death benefit claims of ₱1,156,000.00 as of

December 31, 2022, ₱640,000.00 were released to the beneficiaries in January
and February CY 2023 while ₱516,000.00 are yet to be released by the
Pangasinan Provincial Office.
11.8 We recommended that Management direct the DILG Regional Director to

undertake coordination with the concerned City/Municipal Local
Government Office Officers to facilitate prompt submission of the
required documents to enable immediate preparation of the checks for the
remaining unreleased death benefit claims. Henceforth, see to it that the
documents submitted are complete and proper to ensure timely processing
of the claims and release of the benefits to the beneficiaries within the
prescribed period.
11.9 The concerned Provincial Offices (POs) issued an advisory dated February 23
and March 13, 2023, directing the C/MLGOOs to submit to the PO the original
copies of the requirements for death benefit claims within five days after
uploading in the Barangay Information System. The total amount of
₱1,156,000.00 unreleased death benefit claims as of December 31, 2022 was
already released to the respective claimants as of April 30, 2023.
Incomplete Supporting Documents
12. The validity of disbursements totaling ₱11.230 million cannot be ascertained due
to incomplete documentation.
12.1 Section 4 of PD No. 1445 states that all claims against government funds shall
be supported with complete documentation.
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12.2 COA Circular No. 2012-001 also prescribes the guidelines and documentary
requirements for common government transactions.
12.3 Audit showed that the following transactions were not supported by
complete/required documentation:
Office Account Lacking Document Amount

II Fuel/  No Written Agreement between ₱136,300.00
Gasoline the Provincial Office and
Expenses Barangays
 No Legal basis or authority
 Improperly charge to Training
Expenses
 Driver’s Trip Ticker – Not
Properly Accomplished.
V Fuel/  Driver’s Trip Ticket 441,574.02
Gasoline  Monthly Report of Official
Expenses Travels
 Monthly Report of Fuel
Consumption
Office  Official Receipts/Sales Invoice/ 5,298,335.92
supplies, Collection Receipts
Training
Expenses,
etc.
VII Hazard  Contract of Services 5,205,800.00
and
Gratuity
Pay
VIII Training  Obligation Request Status 147,890.53
Expenses/  Purchase Orders
Office  Purchase Requests
Supplies  Canvass from at least three
Expense suppliers for purchases involving
₱1,000 and above, except for
purchases made while on official
Travel
 Summary/Abstract of Canvass
 Inspection and Acceptance
Report
 Activity Design
Total ₱11,229,900.47
12.4 In view of thereof, the validity of the transactions and accuracy of related
recording made were not ascertained.
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12.5 We recommended that Management require the personnel concerned in
DILG ROs II, V, VII and VIII to immediately submit to the audit team the
necessary documents to support the reported disbursements of funds.
Henceforth, ensure that documentary requirements for each transaction
are attached to the claim before effecting payment.
RO II - Management thru FAD Accounting Section had already submitted the

original copies of the certification from the concerned field officers of DILG-
PO Isabela on April 4, 2023 as one of the legal basis to support disbursements
made particularly on the reimbursement of gasoline expenses incurred by the
different barangays for the implementation of Retooled Community Support
Program (RCSP) activities for further evaluation of the audit team.
RO V - The GSS Chief has already convened with all concerned personnel to
comply with the audit recommendations. Subsequent claims with necessary
information are submitted for processing. On the submission of Official
Receipts/ Sales Invoice or Collection Receipts, the Management has already
submitted all of the required documents totaling ₱5,298,335.92 as of May 5,
2023.
RO VII - During mass hiring of contact tracers in CY 2021, the Regional

Office instructed its Sub-Regional Offices to immediately deploy contact
tracers whose contracts already bear their respective signatures and the
Regional Director, although, the said contracts were yet to be notarized. A
database of the privately executed contracts, which were pending notarization,
was duly created to register the names of the contact tracers concerned for
operational and disbursement purpose. Efforts to locate the missing documents
are still ongoing. In fact, we have sent a memorandum to the City/Provincial
directors concerned to submit their on-file contracts of service. As of date, we
have already submitted 80 percent of the missing contracts.
RO VIII - DILG Ormoc adhered to COA recommendation and now follows

the rules of procurement in all cases.
Delayed/Non-Submission of Financial Reports
13. Financial and mandatory reports and its supporting documents/schedules were
not submitted within the prescribed period, incurring delays ranging from one to
337 days; thus, the timely conduct of validation/verification of transactions and
substantive tests to ascertain the validity and accuracy of the balances of accounts
were not undertaken on a timely manner.
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13.1 Pursuant to Section 122 of PD No. 1445, whenever deemed necessary in the
exigencies of the service, the Commission may under regulations issued by it,
require the DILG heads and chief accountants to submit trial balances and such
other reports as may be necessary for the exercise of its functions.
13.2 COA promulgated the GAM for NGAs which requires submission of
documents and financial reports to COA within the prescribed timeline to
enable the timely conduct of post audit of transactions and periodic/annual
evaluation on the accuracy of balances reflected in the books.
13.3 Summarized below are the pertinent provisions of GAM regarding submission
of accounting reports and records:
Report/Document Reference Deadline

Contracts/POs COA Circular 2009- 5 days from
001 dated Feb 12, issuance
2009
Monthly Trial Balances (TB), Section 60(c),
Financial Statements (FS) and Chapter 19, GAM
Supporting Schedules (SS) for NGAs Vol. I
Quarterly TBs, FS and SS
Report of Collections and Section 59, Chapter
Deposits (RCD) with copies of 19 of GAM for
10th day after the
Official Receipts (ORs) NGAs Vol. I
end of the month
Reports of Checks Issued
Report of Advice to Debit
Account Issued
Report of Cash Disbursements
Disbursement Vouchers
(DVs)
Journal Entry Vouchers (JEV)
BRS and Bank Statements Section 7, Chapter Within 20 days after
(BS) 21 of GAM for receipt of the BS
NGAs Vol. I
13.4 Delayed/non-submission of the required reports and supporting schedules were

observed in the following offices:
Office Report Days Delayed

CO BRS 1-38
II Disbursement Vouchers 1-286
V BRS 3-337
Monthly Trial Balance 1-71
Quarterly Financial Statements 1-17
Disbursement Vouchers 1-344
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Office Report Days Delayed
VI Purchase Order 1-149
X BRS 1-120
13.5 The BRS for PO Puerto Princesa Palawan, Zamboanga Sibugay, Zamboanga
Del Sur, Zamboanga Del Norte and CO Zamboanga City in RO IV-B and IX,
were not prepared and submitted to the Audit Team.
13.6 In RO VI, in addition to the delayed submission of POs, there are 83 POs that
remained unsubmitted to the audit team as of December 31, 2022.
13.7 The inability of concerned DILG officials/personnel to submit required reports

on time hindered the Audit Team from conducting timely review and evaluation
of financial transactions and in communicating the noted deficiencies to
Management.
13.8 We recommended that the Management of DILG-CO, ROs II, IV-B, V, VI,
IX and X instruct the concerned accountants and other personnel to ensure
strict compliance with the reglementary period of submission of the
required reports, supporting documents and contracts.
CO - For this current year, with the remedies that have been made, the
preparation and submission of Monthly Bank Reconciliation Statement (BRS)
were ahead of the prescribed deadline.
RO II - Management had issued a memorandum to all Provincial Offices dated

March 6, 2023 to immediately submit all Disbursement Vouchers with
supporting documents and the original copies of cancelled checks for
disbursements in 2022 to the Office of the Resident Auditor. The Regional
Office, PO-Isabela and PO-Batanes have already completed the submission of
said DVs and cancelled checks. Out of the 975 unsubmitted DVs and cancelled
checks, a total of 951 were already submitted.
RO IVB - Being understaffed the management extended assistance in

preparing Bank Reconciliation in Palawan and PPC and will start to submit
Bank Recon for CY 2023 as agreed upon in COA exit conference held last
March 6, 2023. As of May 5, 2023, Palawan and PPC already submitted BRS
from January to April 2023.
RO V - Trial balances and Financial Statements for CY 2022 were submitted

to the Audit Team on February 7, 2023. The details of the submission of
December 2022 BRS and DVs are as follows:
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BRS DV
DILG Albay - March 7, 2023 DILG Albay - March 7, 2023
DILG Cam Norte -January 6, 2023 DILG Cam Norte -January 6, 2023
DILG Camarines Sur - February 16, 2023 DILG Camarines Sur - February 16, 2023
DILG Catanduanes - February 13, 2023 DILG Catanduanes - February 13, 2023
DILG Masbate - January 6, 2023
DILG Masbate - January 6, 2023
DILG Sorsogon - January 24, 2023
DILG Sorsogon - March 14, 2023
DILG R5 - March 24, 2023
RO VI - Several Memoranda were already issued by the Management to

remind offices to submit POs on the prescribed period. All POs have already
been submitted to the Office of the COA Auditor as of March 31, 2023. In
addition, Management plans to create an on-line monitoring system.
RO IX - Submitted BRS for the provinces of Zamboanga del Sur, Zamboanga

del Norte and Zamboanga Sibugay Province. On-going reconciliation for
DILG Zamboanga City.
RO X - Management requested bank snapshots from LBP five days after the
end of each month and currently we were able to submit to COA the BRS
within the month succeeding the report month. The concerned office
committed to continue the scheme consistently to avoid delay in the submission
of the BRS.
Status of Audit Suspensions and Disallowances
14. Audit suspensions and disallowances totaling ₱45.835 million and ₱101.740
million, respectively, remained outstanding as at year-end due to the inability of
Management to strictly enforce settlement thereof.
14.1 Section 7.1.1 of COA Circular No. 2009-006 dated September 15, 2009
provides that the Head of DILG who is primarily responsible for all
government funds and property pertaining to the DILG, shall ensure that the
settlement of disallowances and charges is made within the prescribed period
and the requirements of transactions suspended in audit are complied with.
14.2 Section 7.1.4 of the same circular also provides that he shall ensure that all
employees who are retiring or transferring to other agencies shall first settle
disallowances and charges for which they are liable.
14.3 Section 10.4 further provides that the disallowance shall be settled within six
months from receipt of the Notice of Disallowance by persons liable.
14.4 The total unsettled suspensions and disallowances as of December 31, 2022
amounted to ₱45,834,530.40 and ₱104,950,023.05, respectively. Details are
as follows:
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Office Suspensions Disallowances Remarks
CO ₱0.00 ₱1,842,833.84 The balance of ₱613,402.68 is under
Appeal to COA.
NCR 0.00 24,941.96
CAR 0.00 388,381.37 Includes disallowances for
unauthorized price increase in the
variation order, salaries of lawyer
hired on Job Order without COA
concurrence and excessive meals and
snacks. The disallowances are on
appeal with COA.
IV-A 0.00 2,208,000.00 Pertains to excessive and irregular
payment of relocation/dislocation
allowance. There is no decision yet
for the Memorandum of Appeal
issued to COA (received on June 21,
2016) pertaining to CY 2014 audit
disallowance.
IV-B 0.00 1,609,215.00 Pertains to the grant of excess
Collective Negotiation Agreement
benefits which is being settled on an
installment basis.
V 827,741.98 806,250.00 Settlements amounting to
₱4,455,966.36 were made during CY
2022.
VII 0.00 856,014.02
VIII 44,009,665.40 92,604,148.96
IX 0.00 315,807.28
X 0.00 2,024,643.32 Pertains to final and executory audit
disallowances related to various
employee benefit payments such as
hazard pay, medical allowance,
loyalty pay and rice allowance
XI 0.00 2,220,082.30
XII 0.00 49,705.00
XIII 997,123.02 0.00
Total ₱45,834,530.40 ₱104,950,023.05
14.5 It is emphasized that the requirements under the transactions suspended in

must be complied with within the prescribed period to prevent the same from
maturing into disallowances.
14.6 We recommended that Management enforce settlement/compliance by

the persons determined liable/responsible to the amounts disallowed1 and
suspended in audit.
1
Excluding disallowances with pending appeals.
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CO - The total amount of ₱1,842,833.84 was reduced by ₱1,229,431.16 which
was settled by the accountable officer (AO) on February 06, 2023 under
Official Receipt no. 1498506 dated February 06, 2023.
CAR - Disallowance for CY 2022 amounting to ₱940.00 was settled on

February 10, 2023 under OR# 0925104, consequently leaving a balance of
₱387,441.37 as of March 31, 2023.
RO IVA - Audit disallowances of ₱2,208,000.00 pertaining to CY 2014

Relocation/Dislocation Allowance-Per Diems and Transportation Expenses
remained unsettled.
RO IVB - As of May 5, 2023 the amount has been reduced to ₱1,585,215.00

due to collections amounting to ₱24,000.00 from January to April 2023. The
remaining balance includes disallowances from separated personnel with no
known last address and deceased employees.
RO V - As of May 5, 2023, in the Notice of Suspensions a settlement with a

total amount of ₱12,450,570.91 (96.52 percent) has been made leaving a
balance of ₱448,354.84. Concerned Provincial Offices are reminded to submit
the necessary documents. Notice of Disallowance amounting to ₱806,250.00
is under appeal by the concerned personnel.
RO VII - As of May 5, 2023, the balance of audit disallowances was reduced

to ₱806,014.02. The remaining balance pertains to disallowances from
employees who are already separated, deceased and retired from government
service prior to the issuance of the finality of decision of the Notice of
Disallowance.
RO VIII - The management received the decision from COA RO No. 8 and
Management is drafting an appeal as of this writing.
RO IX - The balance represents dormant accounts.
RO X - Dormant accounts belonging to retired, separated and deceased

personnel.
RO XI - Management exerted efforts to collect the said disallowances through

various means of communication, however, most of them are no longer
residents of the addresses on file.
RO XII - As of this writing, the following is the breakdown account

₱14,578.00 are accounts belonging to retired, separated, and deceased
personnel; ₱3,140.00 are already settled and for submission to the Audit Team
for issuance of NSSDC; and ₱31,047.00 are accounts belonging to active
employees and FOs and for sending out of demand letter.
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RO XIII - All required documents were already submitted to COA. Still
waiting for the issuance of a settlement by the COA Auditor.
Gender and Development (GAD)
15. The gender responsive programs, projects and activities of the DILG were
included and mainstreamed in the regular programs of the DILG.
15.1 Section 34 of FY 2022 GAA states that all agencies of the government shall
formulate a Gender and Development (GAD) Plan designed to address gender
issues within their concerned sectors or mandate and implement the applicable
provisions under RA No. 9710 or the Magna Carta of Women, Convention on
the Elimination of All Forms of Discrimination Against Women, the Beijing
Platform for Action, the Philippine Plan for Gender-Responsive Development
(1995-2025) and the Philippine Development Plan (2017-2022).
15.2 The GAD Plan shall be integrated in the regular activities of the agencies,
which shall be at least five percent of their budgets. For this purpose, activities
currently being undertaken by agencies which relate to GAD or those that
contribute to poverty alleviation, economic empowerment especially of
marginalized women, protection, promotion, and fulfilment of women’s
human rights, and practice of gender-responsive governance are considered
sufficient compliance with said requirement. Utilization of GAD budget shall
be evaluated based on the GAD performance indicators identified by said
agencies.
15.3 Compliance of offices under the DILG is presented as follows:
Office Status
CO In addition to the allocation of ₱4,640,285.50 for GAD-related
activities, wherein, ₱1,949,620.81 was utilized Bureau of Local
Government Supervision (BLGS) and BLGD attributed
₱1,000,000,000.00 from the conduct of Seal of Good Local
Governance program of the Department. Out of 26 GAD-related
activities, 15 were conducted, three were partially conducted and
eight activities were not performed during the year.
NCR Allocated ₱9,413,723.04 and utilized the amount of
₱9,598,579.04 for GAD related programs/activities
CAR Allocated ₱14,773,381.00 and utilized the amount of
₱11,081,597.74. Based on GAD Accomplishment Report (AR),
13 activities were not conducted during the year.
I Utilized ₱29,646,888.68 for GAD related activities, exceeding
the allocated amount of ₱25,884,476.00.
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Office Status
II Allocated the amount of ₱12,000,000.00 in its Annual GAD Plan
and Budget and utilized the amount of ₱12,916,176.00.
III Utilized ₱16,681,773.00 for GAD related activities, exceeding
the allocated and budgeted amount of ₱14,339,500.00.
IVA Allocated the amount of ₱31,581,497.00 for GAD related
activities. Of this amount, ₱31,178,347.00 was utilized.
IVB Allocated the amount of ₱10,441,087.99 for GAD related
activities and utilized ₱9,995,458.38.
V Allocated the amount of ₱28,660,000.00 for GAD related
VI Allocated the amount of ₱26,818,622.00 for GAD related
VII A total of ₱38,950,415.15 was spent on the implementation of
GAD related activities.
VIII Out of ₱2,326,200.00 allocated for GAD related activities, only
₱302,730.00 was utilized.
IX Allocated and utilized the amount of ₱3,319,000.00 or 5.32
percent of its total appropriations for CY 2022 for GAD related
programs and activities.
X The office was able to allocate and utilized ₱24,321,314.58 for
GAD related activities.
XI Allocated and utilized ₱16,777,640.00 for GAD related
programs and activities.
XII The amount of ₱9,875,000.00 or 6.40 percent of its total
appropriation was budgeted for the DILG’s GAD activities.
Actual expenditures exceeded the budgeted amount, totaling
₱15,212,146.09.
XIII Allocated the amount of ₱9,026,000.00 for GAD related
activities. Of this amount, ₱10,370,645.90 was utilized.
15.4 Based on the summary of responses/justifications on partially and non-

implemented GAD-related activities prepared by Planning Service, there are
at least 14 activities that were implemented/conducted.
15.5 Additional control mechanisms have been established to ensure effective and
timely implementation of key GAD programs and projects, to wit:
a) The DILG-wide Monitoring and Evaluation Steering Committee. This

committee is composed of Top Management officials and shall conduct
regular meetings/dialogues/ interfaces for performance review, assessment
and discussion of issues/concerns needing management decisions/actions.
b) Submission of Monthly PPA Status Report. Operating units shall submit

physical and financial accomplishments of regular programs and locally
funded projects including major issues encountered.
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c) Stronger coordination between the Financial and Management Service and
the Planning Service to ensure that key deliverables are accomplished and
the corresponding programmed funds are utilized within the set timelines.
15.6 The BLGD, implemented an online monitoring database on LGU compliance

on the localization of the Magna Carta for Women. Relative to this, the BLGD
issues annual advisories on the encoding and updating of the database.
15.7 However, the BLGD has not released any issuances/advisories on the conduct
of capacity-building activities related to the implementation of the said
database. Since DILG Region XI has identified one such activity with an
approved budget of ₱180,000.00, it was understood that the activity will be
initiated by DILG Region XI.
Programs and Projects Related to Senior Citizens and Differently-Abled Persons
16. DILG-CO and all ROs implemented plans, programs and projects for senior
citizens and differently-abled persons benefitting senior citizens and persons with
disabilities. However, seven ROs did not have an approved plans and programs
with corresponding budget for which their reported accomplishments can be
measured.
16.1 Section 35, General Provisions of GAA for 2022, RA No. 11465 requires that
all agencies of the government shall formulate plans, programs and projects
intended to address the concerns of senior citizens (SCs) and persons with
disability (PWDs), insofar as it relates to their mandated functions, and
integrate the same in their regular activities. Moreover, all government
infrastructures and facilities shall provide architectural or structural features,
designs or facilities that will reasonably enhance mobility, safety and welfare
of PWD pursuant to Batas Pambansa Blg. 344 and RA No. 7277, as amended.
16.2 Likewise, Section 4.2 of the Joint DBM and DSWD Circular No. 2003-01
dated April 28, 2003 provides that, all government agencies, departments,
bureaus, offices, commissions and state universities and colleges shall allocate
at least one percent of their respective budget for the implementation of plans,
programs, projects, activities and services for older persons and PWDs.
16.3 The extent of compliance by DILG Offices on the said provision follows:
Office Particulars
CO The DILG-CO allocated a budget of ₱1,180,347.70, of which
₱436,996.08 was disbursed for the implementation of PPAs
including webinar for Resiliency for DILG Vulnerable Persons
and webinar series on Mental Health and Well-Being.
122
Office Particulars
NCR The DILG-NCR has implemented programs with a total budget of
₱540,000.00 which includes the conduct of Nutrition Month
Webinar, GSIS Pre-Retirement Seminar and Annual Physical
Exam.
CAR Courtesy lanes devoted for elder clients were provided by the
DILG.
I For CY 2022, personnel were enjoined to attend and participate in
various trainings such as GSIS North Luzon Monthly Zoom
Webinars which includes new employees’ orientation and pre-
retirement seminars.
II DILG-RO II implemented the following:
a. PWD Ramps were included in the plans and designs of the on-
going construction of POs of Nueva Vizcaya and Quirino; and
b. Personnel who are 55 years old above and/or those who will
retire participated in the Webinar for Resiliency of DILG
Vulnerable.
III Out of the approved appropriation of ₱286,790,000.00, the amount
of ₱2,867,900.00 or one percent was allocated for the SCs and
PWDs related PPAs. Accomplishment Report (AR) showed that
the DILG utilized ₱2,886,500.00 or 100.65 percent of the allotted
budget.
IV-A The CY 2022 budget for PPAs for SCs amounted to ₱10,000.00,
of which ₱9,999.00 was utilized.
IV-B DILG-RO IV-B allocated ₱1,144,417.85 for activities/projects for
SCs. Review of the Plan and Budget report revealed that
₱981,262.92 was utilized, leaving an unutilized amount of
₱163,154.93.
V No PPA implemented related to SCs and PWDs.
VI The DILG distributed supplies and groceries to all SCs and PWDs
of the Department in December 2022.
VII Various programs and activities were implemented amounting to
₱8,850,236.95, which is 3.01 percent of the DILG’s total budget,
including procurement of materials for the maintenance and
improvement of comfort rooms for SCs and differently-abled
person (DAPs) and health and welfare support for employees
including SC and DAP conducted last December 2022.
VIII The DILG has provided and maintained ramps, signages and
comfort rooms for SCs and DAPs at the DILG RO.
IX The DILG regularly monitors LGUs’ implementation of RA No.
9994 also known as, the “Expanded Senior Citizen Act of 2010”
and RA No. 10754 otherwise known as, “An Act Expanding the
Benefits and Privileges of PWDs”. The DILG also provided a
public assistance desk for SCs and PWDs located at the first floor
of the RO for easy access and convenience.
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Office Particulars
X The DILG spent ₱1,592,000.00 for the programs and activities
such as monitoring of establishment of Office of Senior Citizen
Association and provision of special lanes, accessibility platform,
and grab bars for PWDs thru SGLG Program.
XI The DILG formulated plans and programs amounting to
₱300,000.00 for SCs and PWDs, however, only two programs
were implemented amounting to ₱68,100.00 as of December 31,
2022.
XII The DILG budgeted and disbursed a total of ₱2,551,130.00 for the
provision of medical supplies, conduct of testimonial programs for
retirees and provision of Capacity Development Interventions.
XIII The DILG budgeted ₱51,000.00, of which ₱49,980.00 was
disbursed for activities such as participation of DILG Personnel to
the National Disability Prevention and Rehabilitation Week
Celebration.
16.4 While noting that activities were undertaken benefitting SCs and PWDs during
CY 2022, the corresponding plans and programs, including the amount
allocated for the implementation of activities related to SCs and DAPs were
not formulated in ROs CAR, I, V, VI, VIII, IX and X. Thus, providing no basis
for the evaluation of their reported accomplishments vs. plans and budget.
16.5 We recommended that the concerned ROs formulate plans, programs and
projects for senior citizens and differently-abled persons, with
corresponding budget requirements, in compliance with Section 35 of the
General Provisions of GAA for CY 2022.
16.6 Management provided the following comments:
CAR - Courtesy Lanes devoted for elder clients are provided and the office
actively participated and supported the SC Officer for a Day (SCOFAD)
Activity of Baguio City in Celebration of the Elderly Filipino Week.
RO I - Programs and activities for SCs and DAPs were already incorporated
in the PRIME HR plan particularly on the Learning and Development. (pre-
retirement seminars). Recruitment, selection and placement applies equal
employment opportunity where applicants regardless of age, gender, disability
and religion are considered.
RO V - Activities for SCs and DAPs were already incorporated in the DILG
R5 CY 2022 Year-end Activity and PRIME-HR plan particularly on the
Learning and Development (Pre-retirement seminars). Recruitment, selection
and placement applies equal employment opportunity where applicants
regardless of age, gender, disability and religion are considered.
124
RO VI - Activities for SCs and DAPs were included in CY 2022 Operations,
Plans and Budget of DILG R6 under the HRD Plan. Further, assistance in the
form of food packs, vitamins and supplies were given during the year.
RO VIII - This is part of CY 2022 OPB and among others was conducted last
September 2, 2022.
RO IX - Activities for SCs and PWDs which were implemented by the DILG
are integrated in the Annual GAD Plan of the office.
RO X -The formulation of PPAs specified under Sec. 35 of GAA 2022 were

not accomplished. However, management was able to undertake programs,
projects and activities that benefited SCs and PWDs. In CY 2022, a total of
₱1.542M was spent in CY 2022 to comply with the requirement as reflected in
the AR submitted to COA on March 22, 2023. Accordingly, the office has
formulated PPAs for SCs and PWDs in line with the office AOPB for CY 2023
implementation.
Compliance with Property Insurance Laws
17. The DILG paid the amount of ₱10.245 million to the GSIS in CY 2022 for the
insurance of various PPEs of the DILG.
17.1 RA No. 656, otherwise known as the Property Insurance Law (PIL), as
amended by PD No. 245, requires every government (except a municipal
government below first class) to insure its properties against any insurable risk
and pay the premiums thereon with the PIF which was placed under the
administration of the Government Service Insurance System (GSIS).
17.2 As defined in RA No. 656, the property includes vessels and craft, motor
vehicles, machineries, permanent buildings, properties stored therein, or in
buildings rented by the Government, or properties in transit.
17.3 In CY 2022, the DILG paid the amount of ₱10,244,790.45 to the GSIS for the
insurance of PPE located in the following ROs:
Office Amount of Premium Paid

Insurable Asset
CO ₱158,849,692.46 ₱4,840,995.75
NCR 6,245,905.02 27,731.82
I 38,943,487.89 253,116.06
II 29,950,854.73 217,628.22
CAR 34,595,845.42 516,132.77
III 37,784,421.87 196,639.82
IV-A 17,170,120.91 174,551.76
IV-B 12,662,609.34 86,712.81
V 75,116,171.11 656,574.75
125
Office Amount of Premium Paid
Insurable Asset
VI 76,089,201.49 492,531.21
VII 59,106,265.51 396,986.56
VIII 45,705,205.00 326,183.16
IX 51,687,686.37 403,253.32
X 48,909,229.09 468,322.79
XI 66,528,005.56 427,064.77
XII 74,453,478.84 415,466.23
XIII 18,333,023.50 344,898.65
TOTAL ₱852,131,204.11 ₱10,244,790.45
Compliance with Tax Laws
18. The DILG withheld applicable taxes on income of personnel and payments to
contractors/suppliers/creditors, in compliance with Revenue Memorandum
Circular (RMC) No. 23-2012 dated February 14, 2012.
18.1 RMC No. 23-2012 dated February 14, 2012 reiterates responsibilities of
officials and employees of government offices for the withholding of
applicable taxes on certain income payments and imposition of penalties for
non-compliance thereof.
18.2 As at year-end, the Due to BIR account has a balance of ₱23,280,784.70,

details of which are shown below:
Ending
Office Withheld Remittance Adjustments Remarks
Balance
CO ₱18,684,833.39 ₱6,944,130.15 ₱21,338.65 ₱11,762,041.89 Balance remitted
on January 2023
NCR 22,114,637.00 22,049,132.41 0.00 65,504.59 Remitted on
January 13, 2023
CAR 24,284,692.15 21,923,938.42 0.00 2,360,753.73 Balance was
remitted on
January 10, 2023
I 28,477,075.36 28,352,011.70 0.00 125,063.66 Remitted on
January 9, 2023
II 27,442,033.15 27,333,717.28 0.00 108,315.87 Remitted on
January 10, 2023
III 40,242,474.92 40,242,474.92 0.00 0.00
IV-A 39,870,490.68 39,869,170.13 0.00 1,320.55 Balance was
remitted on
January 6, 2023
IV-B 21,559,481.36 21,559,481.36 0.00 0.00
V 34,789,288.08 33,968,475.90 (624,827.95) 195,984.23 Remitted on
VI 41,088,522.15 37,059,091.85 0.00 4,029,430.30 January 10, 2023
VII 35,934,519.41 35,689,661.53 0.00 244,857.88
VIII 40,735,942.64 35,100,812.45 (5,185,995.42) 449,134.77 Remitted in
January 2023
IX 18,540,196.81 18,494,250.85 0.00 45,945.96 Remitted on
January 10, 2023
126
Ending
Office Withheld Remittance Adjustments Remarks
Balance
X 29,429,296.78 29,013,822.97 (266,459.14) 149,014.67 Remitted on
January 10, 2023
XI 21,633,875.63 21,288,375.98 0.00 345,499.65 Remitted on
January 7, 2023
XII 22,631,631.43 19,233,714.48 0.00 3,397,916.95 Remitted on
January 6, 2023
XIII 20,024,730.88 20,024,730.88 0.00 0.00
Total ₱487,483,721.82 ₱458,146,993.26 ₱(6,055,943.86) ₱23,280,784.70
Compliance with Government Service Insurance System (GSIS), Pag-IBIG and

Philippine Health Insurance Corporation (PhilHealth) Rules and Regulations
19. DILG substantially complied with the withholding and remittance of mandatory
deductions pursuant to regulations issued by the GSIS, Pag-IBIG and PhilHealth.
19.1 Section 14.1 of the IRR of RA No. 8291 provides that each government DILG
shall remit directly to the GSIS the employees’ and government DILG’s
contributions within the first ten (10) days of the calendar month following the
month to which the contributions apply.
19.2 Section 18(b) of the IRR of RA No. 7875 provides that the monthly premium
contribution of employed members shall be remitted by the employer on or
before the date prescribed by the PhilHealth.
19.3 Section 3(a), Rule VII of the IRR of RA No. 9679 provides that all employers
shall remit to the Pag-IBIG Fund their contributions and the contributions of
their covered employees as well as the latter’s loan amortizations or payments
to the Fund within 15 days from the date the same were collected, unless
another period is previously agreed upon between the employer and the Fund,
or within such periods the Fund may prescribe otherwise.
19.4 Presented below is the compliance of the DILG with GSIS, Pag-IBIG and
PhilHealth laws for CY 2022.
GSIS
Office Withheld Remittance Balance Remarks
Balance remitted in
CO ₱59,186,179.92 ₱58,648,261.29 ₱537,918.63 February and March
2023
NCR 27,986,519.77 27,787,245.47 199,274.30 For reconciliation
Remitted on January 10,
CAR 47,793,510.62 47,792,227.12 1,283.50
2023
I 35,447,340.59 35,447,114.74 225.85
2023
II 34,455,040.66 34,430,893.55 24,147.11 Not yet remitted
III 37,920,624.57 37,920,624.57 0.00
127
GSIS
Not yet remitted;
IV-A 70,737,681.88 70,442,396.59 295,285.29 pertains to salary
differential
IV-B 10,847,771.39 10,847,771.39 0.00
Balance remitted on
V 48,621,978.52 48,587,685.16 34,293.36
January 6, 2023
VI 56,196,901.05 55,491,416.27 705,484.78
2023
VII 49,664,437.08 48,905,905.12 758,531.96
2023
Balance was remitted in
VIII 58,745,422.70 57,231,548.15 1,513,874.55
January 2023
Balance remitted on
IX 21,134,037.72 20,022,830.86 1,111,206.86
January 3, 2023
Remitted in January
X 37,048,401.62 36,914,132.10 134,269.52
2023
Balance was remitted in
XI 20,495,105.62 19,777,694.74 717,410.88
January 2023
XII 16,970,199.52 16,914,701.63 55,497.89
2023
Remitted on February
XIII 31,242,212.61 31,222,560.89 19,651.72
21, 2023
Total ₱664,493,365.84 ₱658,385,009.64 ₱6,108,356.20
PAG-IBIG
Balance remitted in
CO ₱6,283,354.06 ₱6,262,433.22 ₱20,920.84 January and February
2023
Balance remitted on
NCR 2,031,709.47 2,004,912.97 26,796.50
January 10, 2023
CAR 4,867,693.99 4,867,493.99 200.00 For reconciliation
I 6,124,887.22 6,124,887.22 0.00
Balance remitted on
II 4,617,486.31 4,585,883.05 31,603.26
February 9, 2023
III 2,510,926.76 2,510,926.76 0.00
Not yet remitted;
differential
IV-B 220,100.00 220,100.00 0.00
Balance remitted on
V 4,160,235.72 4,140,087.09 20,148.63
January 9, 2023
VI 6,217,476.64 6,000,209.92 217,266.72 Balance remitted on
VII 3,746,279.13 3,689,409.57 56,869.56 January 10, 2023
Balance remitted on
VIII 4,600,704.15 4,372,873.88 227,830.27
January and April 2023
Balance remitted on
IX 4,438,395.26 4,349,244.39 89,150.87
January 3, 2023
Balance remitted in
X 6,148,697.82 6,138,580.21 10,117.61
January 2023
Balance remitted on
XI 2,036,841.84 1,980,410.92 56,430.92
January 6 and 9, 2023
128
PAG-IBIG
Balance remitted on
XII 3,201,395.48 3,070,221.71 131,173.77
January 31, 2023
Balance remitted on
XIII 4,896,769.91 4,896,369.91 400.00
January 19, 2023
Total ₱67,937,853.76 ₱67,041,344.81 ₱896,508.95
PhilHealth
Balance remitted in
CO ₱12,585,070.71 ₱11,728,972.93 ₱856,097.78
January 2023
NCR 2,075,126.23 2,049,903.28 25,222.95
For reconciliation
CAR 5,010,271.38 5,005,150.54 5,120.84
I 3,384,963.28 3,384,963.28 0.00
Balance remitted on
II 4,164,749.35 4,146,143.25 18,606.10
January 3 and 9, 2023
Balance remitted on
III 3,804,795.51 3,704,413.28 100,382.23
January 9, 2023
Not yet remitted;
differential
Balance remitted on
IV-B 3,058,253.24 3,017,862.45 40,390.79
April 11, 2023
Balance remitted on
V 4,888,989.45 4,871,426.56 17,562.89
January 9, 2023
VI 4,285,980.35 4,213,199.40 72,780.95 Balance remitted on
VII 3,815,647.95 3,746,855.18 68,792.77 January 10, 2023
Balance remitted in
VIII 4,291,600.91 4,035,937.47 255,663.44
January 2023
Balance remitted on
IX 1,964,544.26 1,893,455.05 71,089.21
January 3, 2023
Balance remitted on
X 3,007,376.14 2,994,319.34 13,056.80
January 9, 2023
Balance remitted in
XI 1,670,726.67 1,550,032.97 120,693.70
January 2023
Balance remitted on
XII 2,470,344.15 2,434,293.49 36,050.66
January 16, 2023
XIII 2,911,213.36 2,911,213.36 0.00
Total ₱75,043,593.96 ₱73,203,938.94 ₱1,839,655.02
Utilization of COVID-19 Funds
20. Of the total allotment of ₱348.277 million intended for the hiring of at least 2,000
contact tracers, the DILG utilized ₱327.052 million or 93.91 percent. The
unobligated balance of ₱21.226 million or 6.09 percent was reverted to the
unappropriated surplus of the General Fund.
20.1 Allotments received for the year by the DILG are intended for Support to
COVID-19 Tracing Operations. As stated in an unnumbered memorandum
129
dated January 18, 2022 by then DILG Secretary Eduardo Año, the Department
will hire 2,000 contract tracers to augment the capacity of LGUs from March
to August 2022. These contract tracers will be strategically distributed to
regions at high risk, as follows:
Actual Contract
Region Quota
Tracers Hired
CAR 100 100
NCR 200 200
Region I 100 100
Region II 100 100
Region III 250 250
Region IVA 250 250
Region IVB 100 100
Region V 100 100
Region VI 100 100
Region VII 100 100
Region VIII 100 100
Region IX 100 100
Region X 100 100
Region XI 100 100
Region XII 100 100
Region XIII 100 100
Total 2,000 2,000
20.2 To implement the program, the DILG received total allotment of

₱348,277,433.61, out of which, amount totaling ₱327,051,629.66 or 93.91
percent was utilized during the year. The unobligated balance of
₱21,225,803.95 or 6.09 percent of the allotment was reverted to the
unappropriated surplus of the General Fund.
Obligations
Office Allotment Incurred Balance Percentage
CY Appropriations
ROs ₱208,121,787.00 ₱205,895,134.00 ₱2,226,653.00 98.93
Subtotal 208,121,787.00 205,895,134.00 2,226,653.00 98.93
Continuing Appropriations
DILG-CO 5,484,984.00 0.00 5,484,984.00 0.00
ROs 134,670,662.61 121,156,495.66 13,514,166.95 89.97
Subtotal 140,155,646.61 121,156,495.66 18,999,150.95 86.44
Summary
DILG-CO 5,484,984.00 0.00 5,484,984.00 0.00
ROs 342,792,449.61 327,051,629.66 15,740,819.95 95.41
Total ₱348,277,433.61 ₱327,051,629.66 ₱21,225,803.95 93.91
20.3 Presented in the table below are the details of fund utilization and
corresponding disbursement of various DILG ROs for CY 2022:
130
2022 GAA - Support to COVID - 19 Contact Tracing Operations
Utiliz
Allotment Obligations ation Disbursement
Region Received Incurred Balance Rate Disbursement Rate
NCR ₱ 25,072,434.00 ₱ 24,807,057.20 ₱265,376.80 98.94 ₱ 24,807,057.20 100.00
I 12,688,739.00 12,651,819.11 36,919.89 99.71 12,651,819.11 100.00
II 92,765.00 34,849.91 57,915.09 37.57 34,849.91 100.00
IV-A 32,447,914.00 31,988,805.11 459,108.89 98.59 31,988,805.11 100.00
IV-B 13,055,896.00 12,953,408.94 102,487.06 99.22 12,854,554.43 99.24
V 12,019,186.00 11,991,161.00 28,025.00 99.77 11,991,161.00 100.00
VI 12,693,917.00 12,668,530.89 25,386.11 99.80 12,668,530.89 100.00
VII 10,658,345.00 10,298,073.21 360,271.79 96.62 10,298,073.21 100.00
VIII 13,057,891.00 12,983,744.74 74,146.26 99.43 12,983,744.74 100.00
IX 12,384,981.00 12,384,980.47 0.53 100.00 12,384,980.47 100.00
X 13,031,568.00 12,554,301.74 477,266.26 96.34 12,554,301.74 100.00
XI 12,400,864.00 12,340,388.52 60,475.48 99.51 12,340,388.52 100.00
XII 12,966,090.00 12,807,796.10 158,293.90 98.78 12,807,796.10 100.00
CAR 12,593,294.00 12,502,415.86 90,878.14 99.28 12,502,415.86 100.00
CARAGA 12,957,903.00 12,927,801.20 30,101.80 99.77 12,927,801.20 100.00
Total ₱208,121,787.00 ₱205,895,134.00 ₱2,226,653.00 98.93 ₱205,796,279.49 99.95
Continuing Funds- Support to COVID - 19 Contact Tracing Operations

Utiliza
Allotment Obligations tion Disburse-
Region Received Incurred Balance Rate Disbursement ment Rate
CO ₱5,484,984.00 ₱ 0.00 ₱5,484,984.00 0.00 ₱ 0.00 0.00
NCR 24,605,767.75 21,920,723.23 2,685,044.52 89.09 21,920,723.23 100.00
I 2,137,846.13 1,490,607.54 647,238.59 69.72 1,490,607.54 100.00
II 14,848,042.31 14,847,025.31 1,017.00 99.99 14,847,025.31 100.00
III 34,144,925.98 34,144,897.53 28.45 100.00 34,144,897.53 100.00
IV-A 13,335,704.81 13,295,061.62 40,643.19 99.70 13,295,061.62 100.00
IV-B 1,771,746.59 1,677,941.41 93,805.18 94.71 1,649,979.58 98.33
V 2,213,683.36 2,205,172.36 8,511.00 99.62 2,205,061.36 99.99
VI 5,681,172.15 3,511,270.85 2,169,901.30 61.81 3,511,270.85 100.00
VII 6,636,440.16 4,232,111.14 2,404,329.02 63.77 4,231,311.14 99.98
VIII 1,143,187.65 1,135,987.00 7,200.65 99.37 1,135,987.00 100.00
IX 9,840,107.19 7,615,825.13 2,224,282.06 77.40 7,615,825.13 100.00
X 3,731,603.04 3,389,700.18 341,902.86 90.84 3,388,740.18 99.97
XI 5,166,841.95 3,552,821.00 1,614,020.95 68.76 3,552,821.00 100.00
XII 2,652,525.00 1,905,429.32 747,095.68 71.83 1,905,429.32 100.00
CAR 1,824,510.63 1,345,864.13 478,646.50 73.77 1,345,864.13 100.00
CARAGA 4,936,557.91 4,886,057.91 50,500.00 98.98 4,886,057.91 100.00
Total ₱140,155,646.61 ₱121,156,495.66 ₱18,999,150.95 86.44 ₱121,126,662.83 99.98
20.4 The over-all fund utilization rate for continuing and current year allotments
were 86.44 and 98.93 percent, respectively. Review of the AR and validation
of the Audit Team showed that the Department was able to accomplish its
target of hiring 2,000 contact tracers.
NTF-ELCAC Related Projects
21. DILG utilized ₱38.285 million, representing 89.04 percent of CY 2022 allotment
of ₱42.995 million, for the implementation of National Task Force to End Local
Communist Armed Conflict related projects.
131
21.1 The National Task Force to End Local Communist Armed Conflict (NTF-
ELCAC) was formed pursuant to EO No. 70 dated December 4, 2018 to ensure
efficient and effective implementation of the Whole-of-Nation Approach for
the attainment of inclusive and sustainable peace. The Whole-of-Nation
approach intends to address the root causes of insurgencies, internal
disturbances and tensions, and other armed conflicts and threats by prioritizing
and harmonizing the delivery of basic services and social development
packages by the government, facilitating societal inclusivity, and ensuring
active participation of all sectors of the society in the pursuit of the country’s
peace agenda.
21.2 The Task Force is composed of the President of the Republic of the Philippines
as Chair, the National Security Adviser as the Vice-Chair and 20 other members
from different agencies of the government and private sectors, wherein, the
DILG is one of the members.
21.3 To support the implementation and objectives of the NTF-ELCAC, the

following locally-funded projects were implemented by the DILG:
a. Communication for Perpetual End to Extreme Violence and Forming

Alliance Towards Positive Change and Enriched Communities
(C4PEACE);
b. Preventing and Countering Violent Extremism Program (PCVEI)
21.4 C4PEACE is primarily designed to support and enhance LGU capacities in

addressing governance and development gaps particularly in conflict-affected
and vulnerable communities.
21.5 The National Action Plan on PCVEI dated May 27, 2019 was crafted in
response to the growing radicalization in the country and as a contribution to
the global effort to preventing and countering violent extremism. The DILG
leads in whole-of-nation government efforts, mobilizes its offices, bureaus and
attached agencies, the LGUs, CSOs and the community in the fight against
violent extremism.
21.6 For CY 2022, the DILG received total allotments of ₱42,994,733.52 for the
implementation of NTF-ELCAC related projects, including continuing
appropriation of ₱12,554,733.52. Out of the allotment, amount totaling
₱38,284,505.54 or 89.04 percent was obligated, leaving an unobligated balance
of ₱4,710,527.98, to wit:
C4PEACE PCVEI
Particulars Current Continuing Current Continuing Total
(PhP) (PhP) (PhP) (PhP) (PhP)
Allotments 15,440,000.00 6,668,957.64 15,000,000.00 5,885,775.88 42,994,733.52
Obligations 14,306,332.03 6,142,671.14 13,384,432.74 4,450,769.63 38,284,205.54
132
C4PEACE PCVEI
Particulars Current Continuing Current Continuing Total
(PhP) (PhP) (PhP) (PhP) (PhP)
Unobligated
1,133,667.97 526,286.50 1,615,567.26 1,435,006.25 4,710,527.98
Allotments
Utilization
92.66 92.11 89.23 75.62 89.04
Rate
Disbursement 14,161,672.94 5,735,592.36 12,251,445.59 3,988,507.43 36,137,218.32
Disbursement
98.99 93.37 91.54 89.61 94.39
Rate
21.7 Analysis of the submitted Annual Operations, Plans, Budget and

Accomplishment Report submitted by Planning Section showed average
physical accomplishment rate of 87.86 percent. Out of the 24 planned activities
for the year, 21 were completed and three were partially completed.
Not Physical
No. of Partially
Project Completed Implemented Accomplishment
Activities Accomplished
/ Cancelled Rate
C4PEACE 10 9 1 0 90.00
PCVEI 14 12 2 0 85.71
Average Physical Accomplishment Rate 87.86
21.8 The following are the programmed activities of NTF-ELCAC related projects
which were either partially or not implemented during the year, and the cited
reasons therefor:
Physical Actual
Programmed Activities Remarks
Targets Accomplishment
Communicating for Perpetual end to Extreme violence and forming Alliance towards
positive Change and Enriched communities (C4PEACE)
Support to other initiatives relative to the Localization of EO 70
No. of other initiatives on the 16 10 Funds were sub-
localization of EO 70 allotted to Regional
supported Office.
I. Preventing and Countering Violent Extremism and Insurgency (PCVEI)
Community Based
Restoration and
Reconciliation (CBRR)
Guidebook cascading
activities
No. of CBRR cascading 3 2 The targeted one
activity conducted by cluster CBRR activity for
to intensify the capacity Mindanao Cluster was
development of after-care not conducted in order
program implementers to realign the funding
for 2nd semester to
augment the general
services of the CBCP,
however, activity is
scheduled on February
1, 2023 via virtual
platform
133
Physical Actual
Programmed Activities Remarks
Targets Accomplishment
No. of participants from the 105 70 The amount of
DILG Field Offices attended 299,018.00 was
the CBRR capacity utilized for the
development activity payment of food and
accommodation and
traveling expenses for
the Visayas Cluster.
Strategic Communication
Printing of (chemical, biological, radiological and nuclear) CBRN Information
Education and Communication Materials
No. of CBRN Materials 2 1 The amount of
developed and printed to ₱150,000.00 is for the
strengthen information printing of CBRN
awareness on the incident Manual which will be
management system and included in the spill-
simulation exercises over budget of the
PMO.
21.9 DILG management should continue to exert its best efforts to fully accomplish
the programmed activities in order to provide the desired benefits towards its
intended beneficiaries.
22. Disaster Risk Management and Institutional Strengthening (DRM-IS)
22.1 The DRM-IS Project is the concerted effort between Agence Francaise de
Developpement through a grant made available from European Union’s Asia
Investment Facility and DILG.
22.2 The goal of the project intends to enhance the scope and certification procedure
of the Disaster Preparedness Audit (DPA) developed by DILG which initially
focused on flood risks, taking into account other climate-related and natural
hazards, such as typhoons, storm surge, landslides and earthquakes. Moreover,
the project intends to reinforce DPA external review mechanisms to ensure
quality of data and enforcement of preparedness mechanism while maintaining
cost-effective verification solutions.
22.3 The project period implementation was from February 20, 2015 to December
31, 2021. Amendment No. 4 states that the technical completion date for the
project was December 31, 2021. Additionally, Amendment No. 5 states that the
Deadline for Drawdown was June 15, 2022, after which no further funds may
be drawn by the Beneficiary.
22.4 In implementing the DRM-IS, the following funds were made available for use
in CY 2022:
134
Reference No. Amount Obligations Balance
Special Account - Automatic Appropriations
MOOE - SARO-BMB-D-22-0003860 ₱2,418,862.00 ₱2,418,861.36 ₱0.64
dated 04-May-2022 (Revalidation of
SARO-BMB-D-21-0001053 and SARO-
BMB-D-21-0003495)
Regular DILG Fund - Current Year - General Management Supervision
RA No. 11639 - GMS 17,116,850.65 17,116,850.65 0.00
Total ₱19,535,712.65 ₱19,535,712.01 ₱0.64
22.5 The funds were used for the following expenses:
Expense Account Amount

Consultancy Services ₱594,000.00
Other Professional Services 1,824,861.36
Taxes, Duties and Licenses 17,116,850.65
Total ₱19,535,712.01
22.6 The Final Project Completion Report lists the following as the main
results/outcome of the program:
a) A Full Disaster Preparedness Audit mechanism has been designed, setup

and implemented during the project;
b) A total of 55 LGUs and about 79 DILG Offices from the Central, Regional
and Field Offices were engaged and trained; and
c) Adoption of DILG Memorandum Circular No. 2020-043 nationwide, which

institutionalizes local resilience readiness performance measures built on
Disaster Preparedness Audit methodology under the Seal of Good Local
Performance standard of the DILG.
23. MARAWI FUND
23.1 The DILG-CO did not receive MARAWI fund for fiscal year 2022.
24. YOLANDA FUND
24.1 The DILG-CO did not receive YOLANDA funds for fiscal year 2022.
However, the reported year-end balance of Due from LGUs account in DILG-
RO VIII includes prior years’ unliquidated fund transfers amounting to
₱5,385,461.45 for the implementation of Recovery Assistance for Yolanda
projects.
135

09-DILG2022 Part2-Observations and Recomm

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09-DILG2022 Part2-Observations and Recomm

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PART II - OBSERVATIONS AND RECOMMENDATIONS

Misstatements and existence of unreconciled balances in Cash in Bank - LCCA

1. The Cash in Bank-Local Currency, Current Account balance of ₱129.685 million

1.1 Section 27 of International Public Sector Accounting Standards (IPSAS) No. 1

1.2 Section 3, Chapter 21 of Volume I of the Government Accounting Manual for

1.3 The balance of ₱308,555,566.45 of the Cash in Bank-Local Currency, Current

Office Unreconciled Variance

1.7 Also, in RO XII - Sultan Kudarat Provincial Office reconciliation of cash

1.9 We recommended that Management require the concerned Accountants of

b) Determine details of the unreconciled difference of ₱7,364,753.69, make

c) Facilitate the remittance to the BTr of the ₱8,643,530.12 dormant bank

1.10 Management submitted the following comments:

RO IVA - Various stale checks amounting to ₱74,159.00 were canceled and

RO VIII - Management issued a Memorandum to all concerned Sub-Regional

RO XII - The total stale checks amounting to ₱260,558.49 were already

Unreliable balance of Inter-Agency Receivable accounts

2. The Inter-Agency Receivables account balance of ₱1.073 billion as of December

2.1 The composition of Inter-Agency Receivables account of the DILG as of

Due from Due from Due from

Per DILG Per Confirmation

2.5 The observed difference is partly attributed to the following:

a. Unrecorded liquidation in DILG-CO and RO IV-A totaling

b. Balance of prior year’s advances to PS-DBM totaling ₱5,552,979.26

Long outstanding/dormant fund transfer balances - ₱1.190 billion

2.11 Out of the ₱1,212,112,168.07 balance of Inter-Agency Receivables accounts as

2.21 In connection with the distribution of ₱18,000.00 financial assistance, it was

2.23 We recommended and Management agreed to require:

a) Accountants of DILG-CO and RO No. IV-A to reconcile with IAs to

b) Accountants of DILG-CO and ROs VIII and XII to enforce liquidation

c) Bureau of Local Government Development (BLGD) to coordinate with

2.24 Management submitted the following comments:

On non-submission of liquidation report, the amount of ₱22,501,140.20 under

RO VIII - From the unliquidated balance of ₱9,777,108.05, it was reduced to

Inaccurate balances of Inventory Accounts

3. The balance of Inventory accounts in DILG-NCR and CAR totaling ₱1.997

3.1 The Inventory accounts as of December 31, 2022 with a balance of

3.2 Audit disclosed that Semi-expendable properties issued to end-users during CY

3.3 Further, semi-expendable office equipment amounting to ₱32,000.00 in CAR

3.4 We recommended and Management agreed to direct the Accountants of

Unreliable Balance of Property, Plant and Equipment

4.1 The PPE account disclosed an aggregate balance of ₱1,735,337,763.09 as at

a) Improper classification of property accounts - ₱17.855 million

4.3 The Government Accounting Manual for National Government Agencies

4.4 Various land improvements with book value of ₱3,038,557.96 in RO II were

4.5 In RO VIII, completed improvement of the Peace and Resilience Center

4.6 Moreover, evaluation of accounting records of RO I revealed that the CIP-

4.7 The foregoing accounting misclassifications resulted in the over/under

b) Inaccurate provision of depreciation expense - ₱1.269 million

4.8 In RO II the Depreciation Expense and accumulated depreciation was

 Additional costs capitalized were erroneously depreciated over the useful

 Non-provision of depreciation for the month of acquisition for items

c) Unreconciled discrepancy between Accounting and Property Records -

4.10 Comparison of accounting and property records of the hereunder offices

Office Per Books Per RPCPPE Difference

Office Affected PPE Account Amount

4.12 In DILG-CO, the Management was able to conduct procedures pertaining to

 ICT equipment costing ₱14,665,803.93 which includes 12 items

 Untitled land and building occupied by League of Municipality of the

4.13 In RO II missing/non-existing equipment and PPE reclassified from Other

d) Non-disposal of unserviceable properties - ₱73.908 million

Office Amount Remarks

VI 3,037,875.57 Disposal of unserviceable equipment in previous

4.17 We recommended and Management agreed to instruct the:

a) Accountants of ROs I, II, VIII and CAR to adjust/correct the identified