FAQ: Basey Water District biennial audit report

The Basey Water District was originally established in 1977 under the management of the local government. On October 31, 1977, the Sangguniang Bayan of Basey approved Resolution No. 97, officially creating the Basey Water District (BWD) pursuant to Presidential Decree (P.D.) No. 198 (the Provincial Water Utilities Act of 1973). Operations and management were formally transferred to the autonomous Water District in 1982. On September 6, 1982, the Local Water Utilities Administration (LWUA) awarded Conditional Certificate of Conformance (CCC) No. 215 to the District. Furthermore, on March 12, 1992, the Supreme Court declared with finality that all local water districts formed under P.D. No. 198 are Government-Owned or Controlled Corporations (GOCCs).

Pursuant to Commission on Audit (COA) Circular No. 2015-003 dated April 16, 2015 (Annex A), water districts are classified as Government Business Enterprises (GBEs). Consequently, BWD is required to prepare and present its financial statements in accordance with the Philippine Financial Reporting Standards (PFRS) and convert its accounts to the Revised Chart of Accounts prescribed under COA Circular No. 2016-006 / COA Circular No. 2020-002.

The policy-making body of BWD is its five-member Board of Directors, representing various community sectors:

The policy-making body is a five-member Board of Directors. Names, sectors, and terms are redacted for privacy. See the official COA report for the authoritative roster.

The day-to-day operations are headed by the General Manager (name redacted for privacy), appointed by the Board of Directors effective September 1, 2024.

Personnel Complement: A total of 17 personnel, consisting of:

• Seven (7) regular employees;
• One (1) co-terminous employee; and
• Nine (9) job order (JO) workers.

Operational Scale: BWD is categorized as a small water district operating 2,342 active service connections, serving an estimated total population of 11,710 individuals (computed as 2,342 × 5) across Basey, Samar.

The COA rendered a Qualified Opinion on the combined financial statements of the Basey Water District for the calendar years ended December 31, 2024, and December 31, 2023. This opinion signifies that, except for the effects of material misstatements, unadjusted reconciling entries, and unverified balances described in the Bases for Qualified Opinion section, the financial statements present fairly, in all material respects, the financial position, financial performance, cash flows, and changes in equity of the District in accordance with PFRS.

The Qualified Opinion was based on two broad categories of accounting deficiencies:

1. Doubtful Account Balances:

• Cash in Bank (₱13,178,704.36 in LCCA & ₱14,493.44 in LCSA): Unadjusted book reconciling items without supporting details (net ₱228.58), incomplete Bank Reconciliation Statements (BRS) for two accounts, and inclusion of a dormant deposit in a liquidated rural bank (₱14,493.44).
• Property, Plant, and Equipment (PPE) (Carrying Value: ₱10,046,496.09): Discrepancy of ₱15,478,215.98 between General Ledger (GL) and physical inventory report (RPCPPE); variance of ₱5,540,994.57 between GL Accumulated Depreciation and Lapsing Schedules; non-recognition of impairment losses; lack of PPELCs/property cards; inclusion of unserviceable assets; and non-reclassification of completed CIP projects.
• Loans Payable - Domestic (₱1,368,277.81): Unreconciled difference of ₱12,327.00 against the LWUA confirmation balance of ₱1,380,604.81.
• Inventories (₱1,074,394.04): Non-maintenance of semi-expendable registries; inclusion of dormant issued semi-expendables (₱522,583.68); unrecorded expired supplies; and a negative balance in Chemical and Filtering Supplies (₱2,192.00) vs. physical count of ₱65,132.72.
• Accounts Receivable (Net: ₱571,021.63): Discrepancy of ₱180,518.16 between the Aging Schedule (₱885,744.58) and Detailed SFPos (₱705,226.42), accompanied by an arbitrary allowance for impairment.
• Advances to Officers and Employees (₱291,798.37): Unliquidated advances aging up to 32 years, including ₱68,610.77 lacking any supporting documents.

2. Specific Misstatements and Recording Errors:

• Cash in Bank - LCCA: Net overstatement of ₱86,944.15 due to unrecorded bank debit memos, returned checks, and stale checks.
• PPE & Accumulated Depreciation: Overstated by ₱313,165.00 and ₱167,136.00, respectively, due to erroneous inclusion of items below the ₱50,000 threshold.
• Semi-Expendable Accounts: Overstated by ₱522,583.68 due to non-recognition of expenses upon issuance.
• Receivables - Disallowances/Charges: Overstated by ₱23,188.20 due to improper inclusion of disallowances lacking Notices of Finality of Decision (NFDs).
• Leave Benefits Payable: Understated by ₱142,418.38 due to non-inclusion of terminal leave credits for two former employees.
• Accounts Receivable & Revenue: Understated by ₱766,021.94 due to non-accrual of December 2024 water billings (₱733,168.05) and penalty charges (₱32,853.89).

• Supervising Auditor: State Auditor V (name redacted for privacy; signed Independent Auditor’s Report on March 14, 2025).
• Audit Team Leader: State Auditor IV / SA III (name redacted).
• Audit Team Member: State Auditor III / SA II (name redacted).
• Transmitting Official: Director IV, Regional Director, COA Regional Office No. VIII, Candahug, Palo, Leyte (name redacted; Transmittal letters dated April 10, 2025).

Names are redacted for privacy. See the official COA report for the authoritative audit team.

The financial position of the District is summarized below:

Note: In Table 2 of the Executive Summary, Liabilities and Equity for CY 2024 were listed as ₱2,892,360.26 and ₱23,430,471.22 respectively; however, the Audited Condensed Statement of Financial Position confirms Total Liabilities of ₱2,783,786.22 and Equity of ₱23,539,045.26.

Current assets totaled ₱16,276,335.39, broken down as follows:

• Cash and Cash Equivalents (₱13,245,820.48):

  • Cash Collecting Officer: ₱42,622.68
  • Petty Cash Fund: ₱10,000.00
  • Cash in Bank - PVB Current Account: ₱12,647,661.52
  • Cash in Bank - LBP Current Account: ₱510,042.84
  • Cash in Bank - Rural Bank of Basey Savings Account (Dormant): ₱14,493.44
• Receivables (Net: ₱1,541,026.82):

  • Accounts Receivable - Current (Gross): ₱705,226.42
  • Less: Allowance for Impairment: (₱134,204.79)
  • Accounts Receivable (Net Realizable Value): ₱571,021.63
  • Due from Officers and Employees: ₱58,597.82
  • Other Receivables: ₱5,527.53
  • Receivables - Disallowances/Charges: ₱637,470.26
• Inventories (₱1,074,394.04):

  • Office Supplies: ₱167,255.63
  • Accountable Forms, Plates & Stickers: ₱53,500.00
  • Chemical & Filtering Supplies (Abnormal Balance): (₱2,192.00)
  • Play/Bet Slips & Thermal Rolls: ₱13,915.00
  • Other Supplies & Materials: ₱319,331.73
  • Semi-Expendable Properties (Office, IT, Machinery, Furniture): ₱522,583.68
• Other Current Assets (₱415,094.05):

  • Prepaid Rent: ₱64,000.00
  • Withholding Tax at Source: ₱6,115.59
  • Advances for Payroll: ₱43,180.09
  • Advances to Special Disbursing Officers: ₱10,000.00
  • Advances to Officers & Employees: ₱291,798.37

Non-current assets totaled ₱10,046,496.09, consisting of:

1. Property, Plant, and Equipment (PPE):

• Gross Cost: ₱17,918,626.08

  • Office Equipment: ₱1,030,432.46
  • Information and Communication Technology (ICT) Equipment: ₱749,383.00 (listed as ₱812,963.00 in Note 10 Table 5)
  • Other Machinery and Equipment: ₱263,720.00
  • Other Structures: ₱151,910.00
  • Transportation Equipment (Motor Vehicles): ₱82,300.00
  • Other Property, Plant, and Equipment: ₱15,577,300.62
• Less: Accumulated Depreciation: (₱10,248,457.72)

  • Office Equipment: ₱337,010.98
  • ICT Equipment: ₱358,137.14
  • Other Machinery & Equipment: ₱833,465.93
  • Other Structures: ₱31,901.52
  • Transportation Equipment: ₱65,318.64
  • Other PPE: ₱8,618,066.15
• PPE Carrying Net Book Value: ₱7,670,168.36

2. Construction in Progress (CIP) - Infrastructure Assets:

• Total Carrying Cost: ₱2,376,327.69
• Rehabilitation and Expansion of Distribution Line 2"Ø: ₱26,550.00
• Rehabilitation of Panlalawagan Dam (2019 & 2020): ₱163,035.00
• Clustering of Different Barangays (CYs 2020-2023): ₱447,202.88
• 2011 LWUA Grant Converted to Loan (recorded 2020): ₱1,479,220.81
• Distribution Line 2"Ø at Sugpunon (CY 2022): ₱260,315.00
• TOTAL NON-CURRENT ASSETS (Net Book Value + CIP): ₱10,046,496.09

Total liabilities amounted to ₱2,783,786.22, broken down as follows:

1. Current Liabilities (₱1,637,394.41):

• Financial Liabilities:

  • Current Portion of Long-Term Debts (LWUA Loans): ₱221,886.00
  • Accounts Payable: ₱845,653.50
  • Interest Payable: ₱0.00
• Inter-Agency Payables (Net: ₱16,103.98):

  • Due to BIR: ₱9,332.98
  • Income Tax Payable: ₱45,103.50
  • Due to GSIS (Abnormal negative balance): (₱9,660.36)
  • Due to PAG-IBIG (Abnormal negative balance): (₱4,946.58)
  • Due to PhilHealth (Abnormal negative balance): (₱9,243.39)
  • Due to BSP/Other Banks (Abnormal negative balance): (₱14,482.17)
• Trust Liabilities (Customers’ Deposits): ₱16,305.42
• Provisions (Leave Benefits Payable): ₱616,757.75
• Other Payables (Abnormal negative balance): (₱79,312.24)

2. Non-Current Liabilities (₱1,146,391.81):

• Non-Current Financial Liabilities: Loans Payable - Domestic (LWUA Loan Account No. •-•••• NL; masked, see official COA report): ₱1,146,391.81 (Total domestic loan principal: ₱221,886.00 current + ₱1,146,391.81 non-current = ₱1,368,277.81).

Total revenue was ₱8,494,764.13 in CY 2024, reflecting a decrease of 6.74% from ₱9,109,176.73 in CY 2023. Revenue streams comprise:

Total operating expenses amounted to ₱7,843,921.87 in CY 2024 compared to ₱8,699,159.00 in CY 2023: CY 2024 Total Expenses: ₱7,843,921.87 - Personal Services (PS): ₱4,122,886.12 (52.56%); Maintenance & Other Operating Expenses (MOOE): ₱3,195,511.81 (40.74%); Non-Cash Expenses (Depreciation): ₱524,723.94 (6.69%); Financial Expenses: ₱800.00 (0.01%).

Detailed Breakdown:

• Personal Services (₱4,122,886.12 in 2024 vs. ₱4,817,079.37 in 2023):

  • Salaries and Wages (Regular): ₱2,607,127.26
  • Other Compensation (PERA, Bonuses, Allowances, Overtime): ₱1,232,767.93
  • Personnel Benefit Contributions (GSIS, PhilHealth, Pag-IBIG, ECC): ₱282,990.93
  • Terminal Leave Benefits: ₱0.00 (vs. ₱1,631,562.98 in 2023)
• MOOE (₱3,195,511.81 in 2024 vs. ₱2,958,183.43 in 2023):

  • Labor and Wages (Job Orders): ₱987,333.56 (or ₱988,089.86 per Note 17/App B.1)
  • Traveling Expenses: ₱385,794.68
  • Office & Accountable Supplies: ₱308,180.91
  • Chemicals & Filtering Supplies: ₱234,818.18
  • Electricity & Water Utilities: ₱192,300.44
  • Taxes, Duties, Licenses & Insurance: ₱224,367.65
  • Rent / Lease Expenses: ₱131,999.50
  • Major Events, Conventions & Training: ₱148,775.50
  • Directors’ and Committee Fees: ₱112,622.88
  • Generation, Transmission & Distribution Expenses: ₱57,957.07
  • Repairs and Maintenance: ₱64,829.00
  • Communication, Postage & Internet: ₱81,584.85
  • Other MOOE / Representation / Delivery: ₱179,339.40
• Financial Expenses (₱800.00 in 2024 vs. ₱437,852.92 in 2023):

  • Bank Charges: ₱800.00 (Interest expense and loan charges dropped to ₱0.00 in 2024).
• Non-Cash Expenses (₱524,723.94 in 2024 vs. ₱486,043.28 in 2023):

  • Depreciation - Other PPE: ₱355,321.56
  • Depreciation - Machinery & Equipment: ₱164,845.02
  • Depreciation - Buildings & Structures: ₱4,557.36

BWD posted a Comprehensive Net Income of:

• CY 2024: ₱650,842.26 (Net Income Before and After Tax)
• CY 2023: ₱410,017.73 (Net Income Before and After Tax)

In the Statement of Changes in Equity, BWD reported opening equity of ₱21,490,185.05 as of January 1, 2024, added prior period error adjustments of ₱1,398,017.95 (adjusted opening balance of ₱22,888,203.00), and added the CY 2024 net profit of ₱650,842.26, closing with Total Equity of ₱23,539,045.26 as of December 31, 2024.

In CY 2024, BWD operated with an approved Corporate Operating Budget of ₱20,016,808.02, but incurred actual expenditures of only ₱8,210,696.62, generating an overall favorable variance of ₱11,806,111.40 (budget execution rate of 41.02%):

In CY 2023, BWD operated with an approved budget of ₱21,566,246.07, while actual expenditures stood at ₱9,514,152.73, leaving a favorable variance of ₱12,052,093.34 (budget execution rate of 44.12%):

The primary driver of low budget execution was the massive underutilization of Capital Outlay (CO). In CY 2024, only ₱896,498.69 (12.08%) of the ₱7.42M CO budget was disbursed, leaving ₱6.53M unspent. Similarly, in CY 2023, only ₱1,301,037.01 (15.29%) of the ₱8.51M CO budget was disbursed, leaving ₱7.21M unspent. This massive lag in infrastructure investment directly hampered the District’s capacity to replace old pipelines and reduce water losses.

Based on BWD’s Monthly Data Sheets (MDS):

• CY 2024: Total water production was 736,180 cubic meters, while total billed/accounted water consumption was 343,564 cubic meters, leaving 392,616 cubic meters in unbilled water losses.
• CY 2023: Total water production was 811,288 cubic meters, while total billed/accounted water consumption was 368,195 cubic meters, leaving 443,093 cubic meters in unbilled water losses.

• CY 2024 NRW Rate: 53.33%
• CY 2023 NRW Rate: 54.62%
• Regulatory Standard: Under LWUA Memorandum Circular No. 004-10 and LWUA Board of Trustees Resolution No. 444 (s. 2009), the maximum allowable NRW ceiling for all water districts is 20.00%.

LWUA Maximum Acceptable Ceiling: 20.00%. BWD Actual NRW (CY 2023): 54.62% [+34.62% EXCESS]. BWD Actual NRW (CY 2024): 53.33% [+33.33% EXCESS].

Although BWD achieved a slight reduction of 1.29% in CY 2024, its water losses remained more than 2.6 times higher than the allowable regulatory limit.

Computed at BWD’s minimum basic water tariff rate of ₱20.25 per cubic meter, the estimated unrealized potential revenues totaled:

• CY 2024: 392,616 m³ × ₱20.25/m³ = ₱7,950,474.00
• CY 2023: 443,093 m³ × ₱20.25/m³ = ₱8,972,633.25
• Cumulative Biennial Revenue Loss: ₱16,923,107.25

BWD formulated an Action Plan for NRW Reduction (2023-2024) comprising: (a) recalibrating used water meters and flow meters; (b) purchasing/installing new water meters; (c) replacing linear meters of distribution lines; (d) implementing meter clustering in multiple barangays; and (e) conducting staff training on meter reading.

COA determined these measures were insufficient because:

1. 1.They failed to address the core physical infrastructure defect: old and dilapidated mainline pipes stretching approximately 16 kilometers.
2. 2.Management failed to allocate and execute adequate Program of Work (POW) capital funding for comprehensive pipeline replacement despite substantial available cash.

Audit verification of Cash in Bank - LCCA (₱13,178,704.36) and LCSA (₱14,493.44) revealed four major deficiencies:

• Unadjusted Reconciling Items Overstating LCCA: ₱86,944.15
• Unsubstantiated BRS Adjustments: ₱228.58 net
• Omission of Bank Reconciliation Statements (BRS) for two accounts (LBP Special Project Fund CA, masked; see official COA report: ₱10,000.00; LBP/LWUA Joint Savings Account, masked: ₱11,000.00)
• Dormant Deposit in Liquidated Bank: Rural Bank of Basey, Inc. (Closed under PDIC Liquidation): ₱14,493.44

The PPE accounts (carrying value ₱10,046,496.09) exhibited several major deficiencies:

1. 1.GL vs. RPCPPE Variance (₱15,478,215.98): The General Ledger recorded gross PPE of ₱17,918,626.08, while the physical count (RPCPPE) only reported ₱2,440,410.10 because water supply systems and utility plant in service were completely omitted from physical count reports.
2. 2.Accumulated Depreciation Variance (₱5,540,994.57): Accumulated depreciation in the GL (₱10,248,457.72) did not reconcile with the Lapsing Schedule of Depreciation (₱4,707,463.15).
3. 3.Semi-Expendable Properties Erroneously Capitalized (₱313,165.00): Tangible assets below the ₱50,000 threshold (prescribed by COA Circular No. 2022-004) were retained in PPE, overstating PPE by ₱313,165.00, accumulated depreciation by ₱167,136.00, and retained earnings by ₱146,029.00.
4. 4.PPE Misclassifications (₱3,379,201.03): Filtration projects (₱2,665,579.38) were misclassified under Other Structures/Other PPE instead of Water Supply Systems; flow meters, pumps, and line expansions (₱263,561.65) were recorded under Office Equipment/Other PPE instead of Plant-UPIS; and a leak detector (₱396,060.00) was booked as Office Equipment instead of Technical and Scientific Equipment.
5. 5.Non-Provision of Impairment Losses: No impairment losses were recognized on unserviceable, idle, and obsolete equipment listed in the IIRUP (Annex F: ₱383,437.56).
6. 6.Absence of Mandatory Property Records: Accounting and Property Units failed to maintain Subsidiary Ledgers (SLs), Property Cards (PCs), and Property, Plant and Equipment Ledger Cards (PPELCs).

The General Ledger reported CIP - Infrastructure Assets of ₱2,376,327.69 as of December 31, 2024. However, the Report on Government Programs/Projects/Activities (GPPA) showed on-going projects totaling only ₱646,283.34, resulting in an unverified discrepancy of ₱1,730,044.35. Completed projects remained in the CIP account because Certificates of Completion were not transmitted to the Accounting Unit for reclassification into active PPE.

As of December 31, 2024, BWD reported total outstanding loans payable to LWUA of ₱1,368,277.81 (Loan Account No. •-•••• NL; masked, see the official COA report for the full number). However, LWUA’s official confirmation letter dated January 30, 2025 (Annex G) confirmed an outstanding principal balance of ₱1,380,604.81, reflecting an unreconciled discrepancy of ₱12,327.00. Audit verification revealed that while BWD made a payment of ₱59,336.00 on April 8, 2024, LWUA applied it entirely to a different loan account rather than the account above.

Total inventories of ₱1,074,394.04 suffered from multiple accounting defects:

• Unrecorded Issuance of Semi-Expendables (₱522,583.68): Semi-expendable equipment purchased between 2017 and 2024 was issued to end-users on Inventory Custodian Slips (ICS) but never expensed in the books, overstating inventory and equity by ₱522,583.68.
• Misclassified Water Distribution Supplies (₱319,331.73): Water meters, pipes, and fittings were recorded under Other Supplies and Materials Inventory instead of Supplies and Materials for Water Systems Operations.
• Negative Inventory Balance (₱2,192.00): Chemical and Filtering Supplies showed an abnormal credit/negative balance of (₱2,192.00) in the Detailed SFPos, whereas the physical count report (RPCI) showed chlorine granules on hand valued at ₱65,132.72 (discrepancy of ₱62,940.72).
• Expired / Obsolete Supplies: Consumables such as thermal paper and polyaluminum chloride were expired or obsolete but remained listed as active inventory.

BWD reported Receivables - Disallowances/Charges of ₱637,470.26 in its Detailed SFPos, whereas the Audit Team’s Report on Enforcement and Monitoring of Final and Executory Decisions (REMFED) confirmed only ₱614,282.06 in final and executory disallowances (20 NDs). The net variance of ₱23,188.20 resulted from:

1. 1.Erroneously recognizing settlements of disallowances lacking NFDs (₱31,483.37) and unidentified NDs (₱15,470.00);
2. 2.A faulty adjusting entry per JEV 2024-07-0485 of ₱108,574.04;
3. 3.Overstatement of 2016 forwarded disallowance balances without NFDs (₱530,274.59); offset by
4. 4.Unrecorded final disallowances issued in CY 2017 (₱568,707.06).

COA recommended a compound adjusting journal entry debiting Retained Earnings (₱38,658.20) and crediting Receivables - Disallowances/Charges (₱23,188.20) and Trust Liabilities - Disallowances/Charges (₱15,470.00).

As of December 31, 2024, BWD reported Leave Benefits Payable of ₱616,757.75. Audit re-computation (Annex J) applying the standard civil service formula (TLB = S × D × 0.0481927) established the correct accrued liability at ₱759,176.13, revealing an understatement of ₱142,418.38. This error occurred because the Bookkeeper relied on an incomplete HR summary that omitted the earned, unclaimed leave credits of two former employees. Their names are redacted for privacy; the amounts are ₱81,225.05 and ₱61,196.36. See the official COA report.

1. 1.Aging Schedule vs. SFPos Discrepancy (₱180,518.16): The aging schedule generated by BWD’s billing system showed total concessionaire receivables of ₱885,744.58, whereas the Detailed SFPos reported ₱705,226.42.
2. 2.Unclear Impairment Basis (₱134,204.79): Allowance for impairment was copied mechanically from prior years without analyzing actual collectability or historical default rates.
3. 3.Unrecorded December 2024 Water Consumption (₱766,021.94): BWD violated the accrual method by failing to record December 2024 water billings (₱733,168.05) and penalty charges (₱32,853.89), waiting until collections/bill distribution in January 2025. This understated Accounts Receivable and Retained Earnings by ₱766,021.94 as of yearend.

Advances to Officers and Employees totaled ₱291,798.37, outstanding from one month up to 32 years:

The Detailed SFPos reported abnormal negative/credit balances in Inter-Agency Payables totaling (₱38,332.50) and in Other Payables totaling (₱79,312.24):

• Inter-Agency Accounts: Due to GSIS (₱9,660.36), Due to Pag-IBIG (₱4,946.58), Due to PhilHealth (₱9,243.39), and Other Inter-Agency Payables (₱14,482.17).
• Cause: Mandatory premium remittances were posted as credits to the liability accounts without prior recognition/accrual of payroll withholdings, an erroneous practice dating back to CY 2016.
• Other Payables (₱79,312.24): Stagnant without movement or supporting schedules since CY 2017.

No. Under Republic Act (RA) No. 656 (Property Insurance Law), all government entities are mandated to insure their insurable assets with the GSIS. Out of BWD’s total insurable PPE of ₱17,918,626.08, only ₱3,517,795.16 (19.63%) was covered by GSIS insurance:

• Fire Policy No. FI-GIG-GSISTAC-0001599: Sum insured of ₱2,993,119.16 (Leased office contents ₱883,089.16; Filtration house contents ₱1.79M; Chlorination house contents ₱103k; Filtration building ₱151,910.00; Chlorination building ₱65,120.00; Premium paid: ₱26,011.05).
• Floater Policy No. FL-SPF-GSISTAC-0000881: Sum insured of ₱524,676.00 (Office equipment ₱276,866.00; Seko chemical metering pump ₱247,810.00; Premium paid: ₱21,554.66).
• Uninsured Exposure: Over ₱14.40 million (80.37%) in district assets (including transmission mains, reservoir tanks, vehicles, generators, and IT infrastructure) remained completely uninsured against fire, earthquake, storm, or catastrophic loss.

No. BWD failed to comply with the Magna Carta of Women (RA No. 9710) and PCW-NEDA-DBM Joint Circular No. 2022-01:

1. 1.BWD failed to prepare and submit GAD Plans and Budgets (GPBs) and GAD Accomplishment Reports (ARs) for CY 2023 and CY 2024 to LWUA.
2. 2.BWD failed to allocate and utilize the statutory minimum of 5% of its Corporate Operating Budget (equivalent to ~₱1.00M in 2024 and ~₱1.08M in 2023) for GAD-related programs, activities, and projects (PAPs).
3. 3.The established GAD Focal Point System (GFPS) was non-functional due to a lack of technical training.

Pursuant to RA No. 10121 (Philippine Disaster Risk Reduction and Management Act of 2010), BWD is required to formulate and implement a comprehensive DRRM program covering: (a) preparedness; (b) response; (c) prevention and mitigation; and (d) rehabilitation and recovery. Although BWD drafted a general DRRM Plan, it had zero reported implemented activities and failed to submit DRRM accomplishment reports for CYs 2023-2024, leaving the district’s emergency response capabilities unverified.

Yes. BWD fully complied with statutory remittance deadlines for all taxes and employee contributions during CY 2023 and CY 2024:

• GSIS (Premiums & Loan Amortizations): ₱1,012,094.94 (CY 2023: ₱569,911.33; CY 2024: ₱442,183.61)
• BIR (Taxes Withheld on Salaries, Goods, VAT & Franchise): ₱627,564.28 (CY 2023: ₱307,918.06; CY 2024: ₱319,646.22)
• HDMF / Pag-IBIG (Premiums & Calamity/MP Loans): ₱85,393.73 (CY 2023: ₱36,505.10; CY 2024: ₱48,888.63)
• PhilHealth (Employee Healthcare Premiums): ₱132,756.78 (CY 2023: ₱60,288.68; CY 2024: ₱72,468.10)

As reflected in the Statement of Audit Suspensions, Disallowances and Charges (SASDC), total unsettled audit issuances stood at ₱1,404,739.91:

Note: Beginning balance was adjusted from actual disbursement vouchers to correct NS No. 2023-012 from ₱6,304.00 to ₱3,500.00. No part of the unsettled NS and ND balances pertained to the current administration. ₱7,500.00 of the unsettled NS and ₱2,000.00 of the unsettled ND lacked supporting documents due to absent historical turnover reports.

Out of 26 prior audit recommendations monitored:

Fully Implemented: 10 recommendations (38.46%)

• Submission of backlogged CY 2017-2022 financial statements;
• Assignment of designated bookkeeping personnel;
• Compliance with monthly RCI/RD disbursements submission;
• Creation of a Disposal Committee;
• Establishment of the GFPS;
• Compliance with PhilGEPS procurement posting rules;
• Utilization of prescribed accounting journals; and
• Strict documentation controls on disbursement vouchers.

Not Implemented: 16 recommendations (61.54%)

• Intensified collection of delinquent accounts receivables;
• Enforcement and write-off of aged unliquidated cash advances;
• Physical disposal and write-off of unserviceable assets;
• Execution of effective NRW reduction programs to meet the 20% limit;
• Preparation of Water Safety Plans (WSP);
• Execution of GAD programs and 5% budget allocation;
• Full implementation and funding of DRRM investment plans;
• Comprehensive GSIS insurance coverage on all property;
• Withholding of taxes on BOD per diems (BOD refused per Res. No. 15, s. 2020);
• Dropping of documents and property destroyed during Super Typhoon Yolanda; and
• Complete settlement of outstanding audit suspensions and disallowances.

Management cited several operational and historical constraints:

1. 1.Destruction Caused by Super Typhoon Yolanda (2013): Complete destruction of the BWD administrative building washed out physical assets, contracts, ledgers, and inventory cards, preventing post-disaster reconciliation without police blotters or formal COA relief from property accountability.
2. 2.Absence of Institutional Turnover: Successive resignations and lack of formal turnover of accounting journals, Check Disbursement Journals, and subsidiary ledgers prior to 2016 left huge unverified balances.
3. 3.Severe Staffing & Technical Limitations: The small 7-regular-employee structure forced staff to handle multiple concurrent designations (e.g., Bookkeeper-Designate, Property Custodian-Designate) without formal training in PFRS, GAD budgeting, or IT database reconciliation.
4. 4.BOD Resolution on Tax Withholdings: Non-withholding of taxes on Board honoraria resulted from the BOD’s formal refusal under BOD Resolution No. 15 (s. 2020).