Observations and Recommendations
Audit Findings
The 15 audit observations in the COA Annual Audit Report for CY 2024: 6 financial audit findings and 9 other financial related issues, with the regulatory basis and recommendations for each.
Bases for Qualified Opinion
Why the opinion was qualified
The six exceptions in the Independent Auditor’s Report. In each, the auditor could not establish the existence, completeness, accuracy, valuation, presentation, or disclosure of the affected accounts
- 1Insufficient disclosures in the Notes to Financial Statements₱1,012,776,538.24Insufficient disclosures in the Notes to Financial Statements on the reported balances of the Receivables, Inventories, Property, Plant and Equipment (PPE) and Biological Asset accounts, and failure to disclose relevant Reconciliation Statements, limited the user's understanding of the financial statements.
- 2Failure to include data in the Continuing Appropriations section of the SCBAAFailure to include the data in the Continuing Appropriations section of the Statement of Comparison of Budget and Actual Amounts rendered the statement incomplete and unreliable.
- 3Accuracy of Cash in Bank, Local Currency Current Account cannot be ascertained₱111,348,807.21The accuracy of the Cash in Bank, Local Currency Current Account balance of ₱111,348,807.21 cannot be ascertained; 19 unreleased checks amounting to ₱2,294,313.33 and 3 cancelled checks amounting to ₱20,125.00 were not reverted back to Cash in Bank.
- 4Improper classification of asset account of Rice Processing Center₱2,712,092.67The Rice Processing I (Building) funded by the Department of Agriculture Regional Office No. VIII amounting to ₱2,712,092.67 was retained in the Construction in Progress account despite its completion, along with the purchased Multi-purpose Rice Mill totaling ₱1,105,500.00, due to an unpaid amount of ₱246,411.15 as of December 31, 2024.
- 5Due from NGO/PO recorded as Donations (20% Development Fund livelihood assistance)₱1,500,000.00The Municipality erroneously recorded as Donations the ₱1,500,000.00 livelihood assistance sourced from the 20% Development Fund, without submission of Liquidation Reports.
- 6Unliquidated fund transfers from Department of Tourism₱1,848,820.00Fund transfers from the Department of Tourism Regional Office No. VIII covering the period CY 2017–2019 totaling ₱1,848,820.00 were not yet liquidated despite the release of funds, thus overstating the Due to NGAs account by the same amount.
Total Audit Findings
15
6 financial audit · 9 other financial related issues
Largest Flagged Balance
₱1,012,776,538.24
Finding 1: insufficient note disclosures
Prior-Year Recommendations
29 of 62 implemented
33 not acted upon
NS / ND / NC Balance
₱14,726,562.97
Notices of Suspension, Disallowance, and Charge (NS/ND/NC) as of December 31, 2024
Findings and Recommendations
10 of the 15 observations repeat issues that COA first raised in earlier audit reports.
Amount: ₱1,012,776,538.24
| Account | Balance (2024) |
|---|---|
| Receivables | ₱111,505,379.05 |
| Inventories | ₱12,413,996.39 |
| Property, Plant and Equipment (PPE) | ₱885,440,099.30 |
| Biological Assets | ₱3,417,063.50 |
| Total — 89.84% of total assets | ₱1,012,776,538.24 |
Also raised in prior audit reports
- AAR CY 2021-4Not implemented
- AAR CY 2017-1Implemented
Status as reported in Part III of the CY 2024 audit report.
Regulatory basis
- IPSAS No. 1 Paragraph 127
- Section 80.2, Volume 1, NGAS Manual for LGUs
- COA Circular 2016-004
Recommendation
LCE to direct the Municipal Accountant to supply the required disclosures in the Notes to Financial Statements
Prior Years’ Audit Recommendations
| Reference | Audit Observation | Status | Reason for Partial / Non-Implementation |
|---|---|---|---|
| AAR CY 2023-1 | Accuracy of CIB-LCCA balance of ₱222,979,149.84 cannot be ascertained; understatement of ₱532,437.81 due to unadjusted cancelled checks and non-preparation of monthly Bank Reconciliation Statements. | Partially implemented | — |
| AAR CY 2023-2 | Deficiencies in accounting for PPE totaling ₱622,563,261.85 (variance of ₱620,948,128.99 between RPCPPE and accounting records; non-provision of depreciation for some PPE). | Partially implemented | Lack of man power. |
| AAR CY 2023-3 | Completed projects and equipment recorded as PPE in the Trust Fund totaling ₱58,796,474.24 not transferred to the General Fund and not depreciated. | Implemented | — |
| AAR CY 2023-4 | Eighteen (18) completed projects totaling ₱53,943,142.70 not reclassified from Construction in Progress to the appropriate asset accounts. | Implemented | — |
| AAR CY 2023-5 | Deficiencies in the implementation and utilization of the LGSF-SBDP of the NTF-ELCAC: privately-owned project sites, 20 projects not included in the AIP/LDIP, undisbursed fund of ₱11,618,096.44, and ₱36,623.79 paid as honoraria. | Partially implemented | On-going processing of transfer of ownership. |
| AAR CY 2023-6 | Deficiencies in the planning, budgeting, contract submission and implementation of PPAs charged to the 20% development fund (37 perfected contracts not timely submitted; unimplemented continuing and current appropriations of ₱18,318,250.34 and ₱7,800,000.00; over-utilization of ₱1,388,245.36; ineligible expenses of ₱446,777.95). | Partially implemented | Lack of man power. |
| AAR CY 2023-7 | ₱1,000,000.00 of the 20% Development Fund distributed as livelihood assistance to fifty (50) associations without complete documentation. | Not implemented | Inadequate compliance. |
| AAR CY 2023-8 | Purchase of lot intended for Public Cemetery at Brgy. Guirang amounting to ₱650,000.00 disbursed despite absence of complete supporting documents; title not yet transferred to the Municipality. | Partially implemented | Process of transfer of title is on-going. |
| AAR CY 2023-9 | Accounting and reporting guidelines on the receipt and utilization of CY 2023 LDRRMF totaling ₱31,956,847.19 inadequately met. | Implemented | — |
| AAR CY 2023-10 | Failure to remit intact the full amount withheld to GSIS, PhilHealth, Pag-IBIG and DBP; net over-remittance of ₱617,585.78 and unremitted balance of ₱3,655,373.56 as of year-end. | Partially implemented | On-going. |
| AAR CY 2023-11 | Unremitted withholding taxes to BIR totaling ₱24,114.76 for CY 2023 and ₱44,536.52 for prior years. | Implemented | — |
| AAR CY 2022-2 | CY 2022 cash advances amounting to ₱30,858,597.81 not supported with complete documentation. | Not implemented | Filing lapses; some supporting documents are attached in the Disbursement Vouchers while others are attached in the Liquidation Reports. |
| AAR CY 2022-3 | PPE balance of ₱495,919,128.20 unreliable: items of ₱2,923,450.14 below the capitalization threshold, over-depreciation of ₱2,007,370.96, and PPE Ledger Cards and Property Cards not maintained. | Not implemented | Adjustments and disclosures in the Notes to FS were not prioritized. |
| AAR CY 2022-4 | Year-end balance of Accounts Payable in the General Fund (₱18,649,407.81) could not be ascertained (insufficient documents, erroneous entries of ₱1,179,097.83, unreported payables over two years old). | Partially implemented | Lack of manpower. |
| AAR CY 2022-5 | Drugs and Medicines and Medical, Dental and Laboratory Supplies procured (amounting to ₱5,484,090.35) recorded as expense outright instead of recognizing the corresponding inventory account. | Not implemented | Recommendation was not given preferential attention; lack of manpower. |
| AAR CY 2022-7 | Vaccination ancillary supplies totaling ₱411,400.00 lacking supporting documents; purchases of ₱502,945.00 charged outright as expense instead of inventory. | Partially implemented | — |
| AAR CY 2022-10 | Failure to set-up receivables for Real Property Tax and Special Education Tax for CY 2022, understating RPT and SET receivables by ₱8,097,681.20. | Not implemented | Lack of manpower. |
| AAR CY 2022-11 | Payments to 967 job order personnel amounting to ₱44,445,381.66 not supported with certification and individual job order contracts. | Not implemented | Recommendation was not given preferential attention. |
| AAR CY 2022-12 | Deficiencies in the utilization and reporting of LDRRMF: prior years' unexpended balance of ₱15,448,793.83 excluded from the CY 2022 LDRRMFIP and ₱15,261,732.76 not transferred to the Special Trust Fund. | Implemented | — |
| 2021-2 | PPE balance of ₱505,269,491.23 unreliable: items of ₱1,468,078.50 recorded as PPE despite not meeting the ₱15,000.00 capitalization threshold; one-time cleansing of PPE accounts not availed. | Not implemented | Recommendation was not given preferential attention. |
| 2021-4 | Notes to Financial Statements for CY 2021 did not extensively disclose relevant information; reconciliation statements and supporting schedules not submitted. | Not implemented | Recommendation was not given preferential attention. |
| 2021-6 | Propriety of the bidding process could not be ascertained; non-submission of relevant documents and perfected contracts within five working days from execution. | Not implemented | Partial implementation. |
| 2021-8 | Propriety, regularity, legality, validity and accuracy of check disbursements totaling ₱9,440,598.86 could not be ascertained due to non-submission of supporting documents. | Not implemented | Partial implementation. |
| AAR CY 2020-1 / 2016-2 / 2014-2 | Inventory balances totaling ₱24,266,001.99 unreliable due to erroneous recording of procured goods and non-preparation of RIS and RSMIs. | Not implemented | — |
| AAR CY 2020-3 | Deficiencies in the utilization and recording of the Bayanihan Grant to Cities and Municipalities (BGCM). | Not implemented | — |
| AAR CY 2020-6 | Non-compliance with procedural, documentary and posting requirements for emergency procurement under the Bayanihan Act, resulting in incomplete documentation. | Not implemented | — |
| AAR CY 2019-1 | Validity and existence of the Road Networks balance of ₱215,107,469.27 could not be ascertained due to non-compliance with COA Circular No. 2015-008. | Not implemented | — |
| AAR CY 2019-2 | Validity and accuracy of the combined CIB-LCCA balance of ₱188,861,271.96 could not be ascertained due to non-preparation of Bank Reconciliation Statements for seven bank accounts. | Not implemented | — |
| AAR CY 2018-1 | Validity of the Due from Other Funds balance of ₱176,048,660.89 could not be ascertained: subsidiary ledgers not maintained and financial statements of InFRES I/II and ARCP II not submitted. | Not implemented | — |
| AAR CY 2017-1 | Validity and accuracy of assets and liabilities totaling ₱193,641,568.65 and ₱47,246,481.48, respectively, could not be ascertained due to absence of subsidiary ledgers, inadequate disclosures and improper recording of loan amortization. | Implemented | — |
Suspensions, Disallowances and Charges
| Particulars | Balance Jan 1, 2024 | Balance Dec 31, 2024 |
|---|---|---|
| Notice of Suspension | ₱14,420,531.08 | ₱14,420,531.08 |
| Notice of Disallowance | ₱306,031.89 | ₱306,031.89 |
| Notice of Charge | ₱0.00 | ₱0.00 |
| Total | ₱14,726,562.97 | ₱14,726,562.97 |
No notices were issued in CY 2024. Notices of Suspension and Disallowance pertain to previous administration/s; none for the current administration. Unsupported balances: ₱4,493,566.69 (Notice of Suspension) and ₱71,588.00 (Notice of Disallowance).
Remittance Schedules
| BIR Withholding Taxes | Amount |
|---|---|
| Beginning Balance | ₱68,651.28 |
| Total Deductions (Withheld) | ₱21,915,102.76 |
| Total Remittances | ₱21,907,765.70 |
| Under-Remittance | ₱7,337.06 |
| Ending Balance (Unremitted) | ₱75,988.34 |
| GSIS Premium — Monthly Remittances (Appendix F) | Deductions | Remittances | Under (Over) Remittance | Balance | |
|---|---|---|---|---|---|
| Beginning Balance | ₱2,016,907.37 | ||||
| January | ₱1,688,053.35 | ₱1,448,039.46 | ₱240,013.89 | ₱2,256,921.26 | |
| February | ₱1,634,835.40 | ₱1,445,580.30 | ₱189,255.10 | ₱2,446,176.36 | |
| March | ₱1,612,951.94 | ₱1,508,928.14 | ₱104,023.80 | ₱2,550,200.16 | |
| April | ₱1,629,891.16 | ₱1,556,078.96 | ₱73,812.20 | ₱2,624,012.36 | |
| May | ₱1,620,710.88 | ₱1,497,684.33 | ₱123,026.55 | ₱2,747,038.91 | |
| June | ₱1,564,753.65 | ₱1,496,588.95 | ₱68,164.70 | ₱2,815,203.61 | |
| July | ₱1,566,818.07 | ₱1,487,646.24 | ₱79,171.83 | ₱2,894,375.44 | |
| August | ₱1,650,889.65 | ₱655.56 | ₱1,650,234.09 | ₱4,544,609.53 | |
| September | ₱1,678,858.73 | ₱1,489,777.65 | ₱189,081.08 | ₱4,733,690.61 | |
| October | ₱1,661,710.58 | ₱1,476,555.62 | ₱185,154.96 | ₱4,918,845.57 | |
| November | ₱1,713,859.56 | ₱3,089,798.25 | -₱1,375,938.69 | ₱3,542,906.88 | |
| December | ₱1,747,441.44 | ₱1,721,114.73 | ₱26,326.71 | ₱3,569,233.59 | |
| Sub-total | ₱19,770,774.41 | ₱18,218,448.19 | ₱1,552,326.22 | ₱3,569,233.59 | |
| Pag-IBIG — Monthly Remittances (Appendix F) | Deductions | Remittances | Under (Over) Remittance | Balance | |
|---|---|---|---|---|---|
| Beginning Balance | ₱555,900.13 | ||||
| January | ₱173,848.73 | ₱159,749.73 | ₱14,099.00 | ₱569,999.13 | |
| February | ₱190,529.42 | ₱135,368.54 | ₱55,160.88 | ₱625,160.01 | |
| March | ₱190,385.60 | ₱278,247.12 | -₱87,861.52 | ₱537,298.49 | |
| April | ₱191,428.88 | ₱44,269.27 | ₱147,159.61 | ₱684,458.10 | |
| May | ₱185,333.79 | ₱360,823.72 | -₱175,489.93 | ₱508,968.17 | |
| June | ₱177,650.98 | ₱10,300.00 | ₱167,350.98 | ₱676,319.15 | |
| July | ₱177,703.96 | ₱171,950.98 | ₱5,752.98 | ₱682,072.13 | |
| August | ₱176,959.78 | ₱27,469.27 | ₱149,490.51 | ₱831,562.64 | |
| September | ₱166,010.11 | ₱83,659.78 | ₱82,350.33 | ₱913,912.97 | |
| October | ₱167,039.67 | ₱611,838.83 | -₱444,799.16 | ₱469,113.81 | |
| November | ₱165,139.67 | ₱153,439.67 | ₱11,700.00 | ₱480,813.81 | |
| December | ₱266,311.20 | ₱143,797.13 | ₱122,514.07 | ₱603,327.88 | |
| Sub-total | ₱2,228,341.79 | ₱2,180,914.04 | ₱182,508.21 | ₱603,327.88 | |