CLAVERIA WATER DISTRICT

Claveria, Cagayan

2014 ANNUAL REPORT

CLAVERIA (CAG) WATER DISTRICT No 69 Provincial Road, Centro 02, Claveria, Cagayan

Tel. No. (078) 395-01-83 =====================================================

1. Introduction

Claveria Water District was created on April 21, 1982, thru a public hearing under the Administration of the late Mayor Placido Leano. The Water District started its operation on September 1, 1982 with 100 concessionaires, where its operation is governed by PD 198, otherwise known as “Provincial Water Utilities Act of 1973”, as amended under Presidential Decree Nos. 768 and 1479. The decree authorized the formation of Local Water Districts and provided for their government and administration such powers are necessary to optimize public for their service utility operations and for other purpose. Currently, it is serving eleven barangays of the Municipality of Claveria, Cagayan with 1,430 concessionaires.

Since 1992, by virtue of the Supreme Court en banc decision, G.R. No. 95237 (Davao City Water District, et al. vs. CSC et al.), Water Districts were declared Government Owned and/or Controlled Corporations (GOCCs) with original charter and as such under the jurisdiction of the public respondents Civil Service Commission and Commission on Audit.

The District’s primary objective is to supply potable water, which will meet the domestic demand through the creation, operation, maintenance and expansion of reliable and economically viable and sound water supply within the Municipality of Claveria.

In 1992, the District is categorized as small water district, and re-categorized as average water district last April 2008. As of December 2013, the district is classified as Category D, with eight (8) permanent employees under the leadership of General Manager. The Water District is managed trough policies, formulated by its Board of Directors, in accordance with the regulations imposed by the Local Water Utilities Administration, national government and other regulatory bodies.

It is worth mentioning that the District has been a recipient of Most OutstandingWater District under small category for three (3) consecutive years, starting 2002 to 2004, and for the years 2006 and 2007. In 2010, the District has been a nominee for outstanding water district under average water district category.

2. Organizational Set-up, Names and Designations of Key Officials a. Guillerma I. Martin, MBA - General Manager b. Ms. Dessa May V. Viloria - Accounting Processor B c. Ms. Leticia V. Daquigan - Cust. Service Asst. D d. Mr. Dremio A. Cadang - Welder A e. Mr. Romeo R. Valdez - Driver Mechanic B f. Mr. Armando A. Mesa - Water Resources Fac. Operator

3. Financial Highlights The district’s assets, liabilities and equity are presented below:

2013

Assets 9,419,458.98

Liabilities 3,214,160.42

Equity 6,205,298.56

The district derives its revenues from water sales. Presented below is a summary of the result of its operations:

2013

Income 5,188,573.07

Expenses 4,460,922.42

Net Income 727,650.65

4. Operational Highlights

Indicator 2013

Total Services Con. 1233

Volume of Water Delivered in cu.m. 227,86

5. SOCIO – ECONOMIC PROFILE

Province: Cagayan Region: Region 02, Northern Luzon

Date Founded: June 05, 1965 Founder: Gov. Gen. Narciso Claveria

Official Flower: Rose

Income Classification: 3rd Class Municipality

STRATEGIC LOCATION

The Municipality of Claveria is situated at approximately 121`05’ north and 18`35’ east. It lies in

the north western part of the Province of Cagayan with an approximate distance of 216 km. from

Tuguegarao City, 165 kilometres from Laoag City and 613 kilometres away from Manila via Ilocos

Region. It is bounded on the North by the Babuyan Channel, on the east by the municipality of Sanchez

Mira, on the West by the Municipality of Sta. Praxedes and on the South by the Province of Apayao

(formerly Kalinga Apayao).

TOTAL LAND AREA: 19,400 HECTARES

NUMBER OF BARANGAYS: 41 (8-Urban; 33-Rural)

CLIMATE: Relatively dry from March to August and wet for the rest of the year

ACCESSIBILITY

- Accessible by any kind of land transportation even to all its 41 barangays - Concrete surfaced national road, and even most of the provincial and municipal roads - Every barangay with concrete roads and all weather barangay roads

RICH AND ABUNDANT NATURAL RESOURCES

- Vast and fertile agricultural lands suitable for growing palay, coconut, vegetables, root crops, fruits, bananas and other cash crops

- Lush green hills and mountains planted with commercial and indigenous forest and fruit trees, palma brava “labig” trees (only in Claveria)

The Claveria Water District has continued in the effective and efficient mobilization of its

services; its employees and officials, its source of funds. Its workforce has been capacitated through

trainings and seminars for better delivery of their representatives and functions. It has always the desire

to work with healthier, more productive and secured Claverianos and other clients. On the other hand,

the CWD has not stopped looking into improving development projects and better services to its

people.

Attached are annexes from A to N showing the entire status of the Claveria Water District.

ANNEXES:

A. & B FUNCTIONAL CHART and ORGANIZATIONAL CHART

BOARD OF DIRECTORS

LUZ M. DIZON RICHARD B. JAVIER GRACE MARIE R. MACKAY

Chairman Vice-Chairman Secretary Business Sector Professional Sector Women’s Sector

PILAR B. FONACIER MILY M. PLANTA

Member Member Civic Sector Education Sector

MANAGEMENT AND STAFF

GUILLERMA I. MARTIN, MBA General Manager D

LETICIA V. DAQUIGAN Utilities/Customer Service Assistant D

ARMANDO A. MESA

Water Resources Facilities Operator B

ROMEO R. VALDEZ Driver Mechanic B

DREMIO A. CADANG

Welder A

DESSA MAY V. VILORIA Accounting Processor B

ANNEX C: PLANTILLA OF PERSONNEL

ANNEX D: SUMMARY OF POLICIES

ANNEX E: LIST OF REPORTS PREPARED REGULARLY

1. Monthly Report on Accession 2. Monthly Report on Separation 3. Financial Statements 4. Report on Salaries and Allowances 5. Monitoring of Cash Advances

ANNEX F: FINANCIAL STATEMENTS

1. BALANCE SHEET – hard copy submitted to Mgt. Advisor Lida Tablo 2. INCOME STATEMENT -– hard copy submitted to Mgt. Advisor Lida Tablo 3. CASH FLOW STATEMENT - – hard copy submitted to Mgt. Advisor Lida Tablo 4. COMPOSITION OF CASH AND CASH IN BANK

2013

Cash-Collecting Officer

11,631.58

Working Fund

5,000.00

Cash in Bank-Savings&Time Deposit-CAMPCI

21,437.87

Cash in Bank-Current&Savings Deposit-LBP

3,740,444.85

Special Deposit-CRB 168,580.89

Special Deposit-CAMPCI

367,763.31

Special Deposit-LBP

0.00

Sinking Fund-CAMPCI

63,215.20

Sinking Fund-LBP

370,729.73

Provident Fund-CRB

833,603.91

Total

5,582,407.34

5. STATEMENT OF CHANGES IN EQUITY

CLAVERIA WATER DISTRICT

Condensed Statement of Changes in Equity

For the Year Ended December 31, 2013

(With Comparative Figures for CY 2012)

2013 2012

Government Equity, beginning of period

P 2,698,875.89

2,698,875.89

Additions (Deductions) - -

Government Equity, end of period 2,698,875.89 2,698,875.89

Donated Capital, beginning of period

-

-

Adfditions (Deductions) - -

Donated Capital, end of period - -

Retained Earnings, beginning of period

2,753,772.02

1,814,918.08

Additions (Deductions)

752,650.65

938,853.94

Retained Earnings, end of period 3,506,422.67 2,753,772.02

Total Equity P 6,205,298.56 5,452,647.91

6. TRIAL BALANCE

CLAVERIA WATER DISTRICT

Trial Balance

December 31, 2013

Particulars Acct. No. Debit Credit

Cash 102 11,631.58 Working Fund 103 5,000.00 Cash in Bank-CAMPCI # 4209 107 21,437.87 Cash in Bank - CAMPCI # 2541 107 63,215.20 Cash in Bank-LBP SF# 2261-0578-51 107 370,729.73 Cash in Bank-LBP # 2261-1001-81 107 2,257,072.44 Cash in Bank- LBP JSA # 2261-0056-06 107 1,483,372.41 Cash in Bank-CRB Cust. Dep. # 13457 107 168,580.89 Cash in Bank-CAMPC1 # 4210 107 367,763.31 Cash in Bank- CRB Prov. Fund # 12719 107 833,603.91 Accounts Receivable 111 181,947.75

Installment Sales Receivable 121 47,543.30

Meters 169 23,149.28 Service Connection Materials 169 130,069.58 Trans/Dis Pipes and Fittings 169 115,849.22 Other Deferred Charges 189 17,328.74 Land 201 17,500.00 Plant 203 6,409,682.28 Buildings and Other Structures 204 468,812.99 office Euipment 207 394,923.25 land Transport Equipment 214 75,503.00 Other Machinery and Equipment 225 1,520,844.34 Other Assets- Meters 279 12,870.00 Allowance for Doubtful Accounts 301

65,813.92

Accumulated Depreciation- Plant 303

3,423,229.86

Accu. Dep'n.- Buildings and Other Structures 304

433,663.76

Accu.Dep'n- Office Equipment 307

284,816.80

Accu. Dep'n – Land Transport Equipment 314

61,159.09

Accu.Dep'n- Other Machinery and Equipment 325

1,310,288.66

Due to BIR 412

0.24

Due to GSIS 412

3,418.65

Due to PHIC 412

81.25

Due to Officers and Employees 423

835,785.90

Loans Payable 433

1,183,931.12

Current Portion of Long-term Debt 434

655,381.51

Customers Deposit 451

535,561.75

Retained Earnings 481

5,477,647.91 Gen., Transmission and Distribution Inc. 576

4,789,876.00

Interest Income 612

19,577.60

Other Business and Service Income 618

207,014.92

Fines & Penalties 619

172,104.55

Salaries and Wages 701 1,511,986.54 Personnel Economic Relief Allowance (PERA) 707 35,000.00 ADCOM 708 105,409.08

Representation Allowance 710

48,000.00 Transportation Allowance 711 48,000.00 Clothing and Uniform Allowance 712 30,000.00 Honoraria (Directors' Fees and Renumerations, etc.) 713 53,760.00 Year-end Bonus 714 161,951.00 Other Bonuses and Allowances 719 112,272.70 Life and Retirement Insurance Contributions 721 179,924.79 PAG-IBIG Contributions 722 29,987.46 PHILHEALTH Contributions 723 23,021.55 ECC Contributions 724 7,100.00 Provident Fund Contributions 725 181,517.10 Retirement Benefits - Regular 734 580,116.16 Vacation and Sick Leave Benefits 737 18,406.82 Other Personnel Benefits (Overtime/Holiday Pay) 749 16,029.85 Office Supplies Expense 751 36,198.50 Fuel, Oil and Lubricants Expenses 757 68,756.00 Chemical &f iltering Materials 758 57,300.00 Travel Expenses 766 63,000.00 Training Expenses 767 17,500.00 Electricity-Office 769 22,009.46 Electricity-Pumping 769-A 398,055.77 Fuel 771 5,344.98 Postage and Deliveries 772 940.00 Telephone Expenses- Mobile 774 35,114.00 Internet Expenses 775 25,741.14 Advertising, Promotional and Marketing Expenses 778 1,000.00 Taxes, Duties and Licenses 779 12,609.90 Insurance Premiums 781 1,763.71 Representation Expenses 782 22,631.00 Freight & Handling 784 2,800.00 Extraordinary & Misc. Expenses 795 18,789.75 Membership Dues and Contribution 796 6,754.00 Repairs and Maintenance - Plant (UPIS) 803 3,818.00 Repairs and Maintenance - Land Transport 814 830.00 Donations 841 2,000.00 Auditing Services 843 38,317.63 Doubtful Accounts Expenses 901 8,877.90 Depreciation - Plant (UPIS) 903 193,318.33 Depreciation - Buildings and Other Structures 904 447.93 Depreciation - Office Equipment 907 24,483.37 Depreciation - Land Transport Equipment 914 6,895.57 Depreciation - Other Machinery and Equipment 925 15,266.91 Interest Expenses 996 227,875.52

TOTALS

19,459,353.49

19,459,353.49

7. COMPARATIVE BALANCE SHEET

CLAVERIA WATER DISTRICT

Condensed Balance Sheet December 31, 2013

(With Comparative Figures for 2012)

2013 2012

Assets

Current Assets P 6,032,481.29 P 6,284,200.39

Cash and Cash Equivalent (Note 5)

5,582,407.34

5,664,238.62

Receivables (Note 6)

163,677.13

182,135.58

Inventories (Note 7)

269,068.08

420,497.45

Prepayment and Deferred Charges (Note 8)

17,328.70

17,328.74

Non-Current Assets 3,386,977.69 3,471,066.24

Property, Plant and Equipment (Note 9)

3,374,107.69

3,471,066.24

Other Assets

12,870.00

-

Total Assets 9,419,458.98 9,755,266.63

Liabilities and Equity

Liabilities 3,214,160.42 4,302,618.72

Current Liabilities (Note 10)

2,030,229.30

2,463,306.09

Non-current Liabilities (Note 11)

1,183,931.12

1,839,312.63

Equity 6,205,298.56 5,452,647.91

Total Liabilities and Equity P 9,419,458.98 P 9,755,266.63

8. COMPARATIVE CASH FLOW STATEMENT

CLAVERIA WATER DISTRICT

Condensed Statement of Cash Flows

For the Year Ended December 31, 2013

(With Comparative Figures for 2012)

2013 2012

Cash flows from operating activities

Cash Inflows

P 5,285,370.19 P 4,880,762.41

Cash Outflows (4,505,647.82) (3,220,726.00)

Net cash provided by operating activities 779,722.37 1,660,036.41

Cash flows from investing activities

Cash Inflows

-

-

Cash Outflows - (105,227.33)

Net cash used in investing activities P - P 105,227.33

Cash flows from financing activities

Cash Inflows

-

Cash Outflows 861,264.00 (900,408.00)

Net cash used in financing activities 861,264.00 (900,408.00)

Net Increase (decrease) in cash and cash (81,541.63) 654,401.08

Cash, beginning of period 5,664,238.62 5,009,837.54

Cash, end of P 5,582,696.99 P 5,664,238.62

9. COMPARATIVE INCOME STATEMENT

CLAVERIA WATER DISTRICT

Condensed Statement of Income and Expenses For the Year Ended December 31, 2013

(With Comparative Figures for 2012)

2013 2012

Income P 5,188,573.07 P 4,815,917.17

Business and Services

5,188,573.07

4,815,917.17

Expenses 4,460,922.42 3,889,790.82

Personal Services

3,142,483.05

2,672,567.22

Maintenance & Other Operating Expenses

1,090,563.85

930,098.12

Financial Expenses

227,875.52

287,125.48

Net Income P 727,650.65 P 926,126.35

10. NOTES TO FINANCIAL STATEMENTS

1. General Agency Profile

Claveria Water District was created on April 21, 1982, thru a public hearing under the

Administration of the late Mayor Placido Leano. The Water District started its operation on

September 1, 1982 with 100 concessionaires, where its operation is governed by PD 198, otherwise

known as “Provincial Water Utilities Act of 1973”, as amended under Presidential Decree Nos. 768

and 1479. The decree authorized the formation of Local Water Districts and provided for their

government and administration such powers are necessary to optimize public for their service utility

operations and for other purpose. Currently, it is serving eleven barangays of the Municipality of

Claveria, Cagayan with 1,233 concessionaires.

Since 1992, by virtue of the Supreme Court en banc decision, G.R. No. 95237 (Davao City Water

District, et al. vs. CSC et al.), Water Districts were declared Government Owned and/or Controlled

Corporations (GOCCs) with original charter and as such under the jurisdiction of the public

respondents Civil Service Commission and Commission on Audit.

The District’s primary objective is to supply potable water, which will meet the domestic demand

through the creation, operation, maintenance and expansion of reliable and economically viable and

sound water supply within the Municipality of Claveria.

As of year-ended, the District is categorized as small water district, and re-categorized as average

water district last April 2008, with six (6) permanent employees under the leadership of Dr. Adrelina

N. Pulido, General Manager. By virtue of executive Order 65, the water District was categorized

under Category D on April 2012. The Water District is managed through policies, formulated by its

Board of Directors, in accordance with the regulations imposed by the Local Water Utilities

Administration, national government and other regulatory bodies.

It is worth mentioning that the District has been a recipient of Most Outstanding Water District under

small category for three (3) consecutive years, starting 2002 to 2004, and for the years 2006 and

2007. In 2010, the District received a nomination for the Outstanding Water District under average

water district .

2. Basis of Financial Statements Presentation

Claveria water District adopts the Commercial Practices System of Accounting for local water

district using accrual method of accounting.

3. Summary of Significant Accounting Principles

3.1 Allowance for doubtful Accounts is maintained at a level adequate to provide for potential non-collectability of receivables. A review of the receivables, designed to identify accounts to

be provided with allowance, is made on a regular basis.

3.2 Inventories are valued at cost using the first-in, first-out method (FIFO).

3.3 Property, Plant and Equipment are recorded at historical cost including installation, survey services, freight and other incidental expenses incurred in the acquisition less accumulated

depreciation. Depreciation is computed on a straight-line method over the estimated useful

life of the properties, which range from five (5) to fifty years.

3.4 Construction theory is applied for costing assets utilized in construction. Construction in progress is used for all expenses in the implementation of project and shall be closed to

proper account upon project completion.

3.5 Payable accounts are recognized and recorded in the books upon the delivery of the goods or services rendered.

4. Correction of Fundamental Errors

Errors of prior years are corrected by using the Prior Period Adjustment account and eventually

closed to Retained earnings at year end. Errors affecting current year operations are charged to the

current year’s account.

5. Cash and Cash Equivalent

5.1 This account is composed of:

2013 2012 Cash-Collecting Officer P 11,631.58 P 7,578.41

Working Fund 5,000.00 5,000.00

Cash in Bank-Savings & Time Deposit-CAMPCI 21,437.87 126,853.19

Cash in Bank-Current & Savings-LBP 3,740,444.85 3,419,202.45

Special Deposit-CAMPCI 367,763.31 333,628.99

Special Deposit-Claveria Rural Bank 168,580.89 105,668.60

Sinking Fund-CAMPCI 63,215.20 74,815.08

Sinking Fund-LBP 370,729.73 304,855.32

Provident Fund-CRB 833,603.91 1,286,636.58

Provident Fund-CAMPCI - -

Total P 5,582,407.34 P 5,664,238.62

5.2 The District deposits its daily collection at LBP-Sanchez Mira effective October 2001. Sinking Fund from Claveria Rural Bank was transferred at LBP with the recommendation of

COA auditors.

5.3 The working fund account represents revolving fund maintained under the imprest system.

5.4 The Provident Fund account includes amount withheld from employee’s salaries as well as the District’s share.

6. Receivables

6.1 The amount is composed of the following:

2013 2012 Accounts Receivable P 181,947.75 P 193,479.30

Less: Allowance for Doubtful Accounts (65,813.92) (56,936.02)

Accounts Receivable, net 116,133.83 136,543.28

Installment Sales Receivable 47,543.30 45,587.30

Advances to Officers and Employees - 5.00

Total P 163,677.13 P 182,135.58

6.2 The Allowance for Doubtful Accounts is provided in an amount based on the collectability of receivable balances and evaluation of such factors as aging of the accounts, collection

experiences of the agency, expected loss experiences and the identified doubtful accounts.

7. Inventories

This account consists of the office supplies including other materials inventory on hand as well as

acquisition of water meter.

8. Prepayment and Deferred Charges

This account consists of security deposits to Cagayan Electric Cooperative-II and Bureau of

Telecommunications.

9. Property, Plant and Equipment

This account consists of the following:

2013 2012 Land P 17,500.00 P 17,500.00

Plant (UPIS) 6,409,682.28 6,266,228.72

Building and Other Structure 468,812.99 468,812.99

Land Transportation Equipment 75,503.00 75,503.00

Other Machinery and Equipment 1,520,844.34 1,520,844.34

Office Equipment 394,923.25 394,923.25

Total Book Value 8,887,265.86 8,743,812.30

Less: Accumulated Depreciation (5,513,158.17) (5,272,746.06)

Net Book Value P 3,374,107.69 P 3,471,066.24

10. Current Liabilities

10.1 This includes the following:

2013 2012 Accounts Payable - P 28,001.71

Due to NGAs 3,500.14 5,408.84

Due to Officers and Employees 835,785.90 1,287,226.26

Current Portion of Long Term Debt 655,381.51 633,388.48

Customer’s Deposit 535,561.75 509,280.80

Total P 2,030,229.30 P 2,463,306.09

10.2 Accounts Payable includes unpaid electric bill pertaining to December 2013 which were already paid in January 2014.

10.3 Due to NGAs includes Due to PHIC and Due to GSIS remitted in January 2014.

10.4 Due to Officers and Employees includes amount withheld from employees’ salaries as the Water District’s share-Provident fund.

10.5 Customers Deposits represents guaranty deposits equivalent to two (2) months deposit of concessionaires and corresponding acquisition cost of meters for meter deposits. These

deposits were made by customers as security for subsequent water bills.

11. Non-Current Liabilities

11.1 This includes Loans Payable representing various loan availments from LWUA since 1991 with different terms of repayments as well as interest, presented as follows:

2013 2012 Loans payable, beginning balance P 1,839.312.63 P 2,472,701.11

Reclassified under current portion of

Long Term Debt (655,381.51) (633,388.48)

Loans payable, ending balance P 1,183,931.12 P 1,839,312.63

11.2 In January 1991, the Claveria Water District was granted a soft loan under LA No. 3-180R

for P.323M, with an interest rate of 10% per annum, payable in twenty (20) years. Arrears

under LA No. 4-1697 amounting to P2.379M was restructured in September 1995 for twenty

(20) years with an interest rate of 8.5% for P2M and 10.5% for the remaining balance.

Another loan was granted in September 1995 under LA No. 3-180R for P5.965M payable in

twenty-six (26) years.

ANNEX G: SUMMARY

ANNEX H: WATER RATES

Annex I: SUMMARY OF WATER PRODUCTION AND CONSUMPTION

MONTH PRODUCTION CONSUMPTION

JANUARY 18216 17417

FEBRUARY 18927 17366

MARCH 17469 16634

APRIL 21065 18160

MAY 21661 19001

JUNE 23858 20693

JULY 23361 20194

AUGUST 24630 21800

SEPTEMBER 21498 18275

OCTOBER 21351 18509

NOVEMBER 21495 19426

DECEMBER 19466 17211

ANNEX J: WATER SOURCES

1 PUMPING STATION (DEEPWELL)

ANNEX K: SERVICE CONNECTION GROWTH

MONTH NEW RECONNECTED DISCONNECTED GROWTH BAL

JAN 2 3 4 1 1

FEB 5 2 1 6 7

MAR 5 5 2 8 15

APR 7 5 2 10 25

MAY 9 3 6 6 31

JUN 4 3 5 2 33

JUL 11 5 3 13 46

AUG 1 2 3 0 46

SEPT 10 3 6 7 53

OCT 5 4 5 4 57

NOV 5 3 4 4 61

DEC 1 3 8 -4 57

ANNEX L: LIST OF MAJOR EQUIPMENTS

a. Chlorinator b. Electric Motor c. Genset d. Panel Control e. Pump f. Diesel Engine (4RAGD Drive)

ANNEX M & N: SUMMARY OF BACTERIOLOGICAL TEST AND MDS

- 2015 REPORTS ARE MONTHLY SUBMITTED TO MANAGEMENT ADVISOR MRS. LIDA TABLO.