executive summary introduction - coa.gov.ph nbsp;· vice-mayor – hon. walfredo r. dimaguila, jr....
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The City of Bian in the Province of Laguna was once a portion of Sta. Rosa. It became
an independent town sometime in the year 1771 and became a City on February 2, 2010 under
Republic Act No. 9740. The City is located 35 kilometers south of Manila with a land area of
4,350 hectares divided into 24 barangays.
The City maintains three funds namely: General Fund, Special Education Fund and Trust
The City maintains special account in the General Fund for 20% Local Development
Fund, Hospital, Market, and Cemetery.
The Organizational Structure of the City is as follows:
a. Key Officials
City Mayor Hon. Marlyn B. Alonte-Naguiat
Vice-Mayor Hon. Walfredo R. Dimaguila, Jr.
Members of the Sanggunian:
1. Hon. Angelo B. Alonte 2. Hon. Cookie Yatco 3. Hon. Vicente Tan Gana 4. Hon. Marielle Therese Micor 5. Hon. Liza Cardeo 6. Hon. JM Carait 7. Hon. Gener Romantigue 8. Hon. Jaime Salandanan 9. Hon. Echit Desuasido 10. Hon. Wilfredo Bejasa 11. Hon. Jay Sauza
City Treasurer Severina A. Alonalon
City Accountant Virgilio M. Dimaranan
b. No. of Personnel Complement
Elective Officials 13
Job Order 849 __________
For the Calendar Year (CY) 2015, the City generated a total income of P1,606,208,543
from local taxes, permits and licenses, service and business income and internal revenue
allotment and subsidy from other funds which is slightly higher by 2.75% over last years total of
The Citys total assets, liabilities, government equity, income and expenses for CY 2015
are as follows:
Total Assets P4,311,867,946
Total Liabilities 1,225,098,745
Total Equity 3,086,769,201
Total Income 1,606,208,543
Total Expenses 1,105,171,491
The Citys total appropriations, allotments, obligations and unexpended balances for CY
2015 are as follows:
Total Appropriations P2,123,171,809
Total Allotments 2,196,442,421
Total Obligations 1,792,172,316
Total Unexpended Balance 404,270,105
Scope of Audit
Financial and compliance audit, as well as value for money audit were conducted on the
accounts and operations of the City Government of Bian for the CY 2015. The audit consisted
of interviews with the concerned local officials and employees, tracing account balances with the
general ledger, verification of disbursements with underlying documents, inspection, analysis
and reconciliation of accounts and such other procedures considered necessary.
The audit was conducted to ascertain the propriety of the financial transactions,
compliance with prescribed rules and regulations and the economical, efficient and effective
utilization of resources. It was also made to ascertain the accuracy of financial records and
reports, as well as the fairness of the presentation of the financial statements.
The Auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements of the City of Bian due to the effects of the unreconciled discrepancy of
P90,144,916.97 between accounting records and inventory report of Land account under the
General Fund (GF) and Special Education Fund (SEF) totaling P355,971,398.64 and
P129,698,600.21, respectively. Likewise a discrepancy of P82,373,260.78 of the Property, Plant
and Equipment account for both the General and Special Education Funds and Infrastructure
Assets and Equipment purchased during the year totaling P30,289,239.89 were not recorded to
their appropriate Property, Plant and Equipment (PPE) accounts, resulting in the understatement
of the PPE and equity accounts.
Significant Observations and Recommendations
For the exceptions cited above, we recommended that the City Mayor direct the City
Accountant and the GSO to reconcile the inventory list of acquired real properties with the
balance of the Land account in the General Fund and Special Education Fund to account for the
discrepancy totaling P90,144,916.97. We also recommended that the City Mayor immediately
direct the City Accountant and the City General Services Officer to thoroughly check, clear and
reconcile the noted discrepancy amounting to P82,373,260.78 between the physical inventory
report and book balances of PPE accounts for both General and Special Education Funds to
ascertain the correctness of PPE account balances in the General Ledger and to establish the
existence and propriety of the valuation of the property. Likewise, we recommended that City
Mayor direct the City Accountant to draw Journal Entry Vouchers (JEVs) to transfer the costs of
completed infrastructure assets and equipment from the books of the Trust Fund to the books of
the General Fund.
The following are the other significant observations and recommendations in the audit of
the City Government of Bian, Laguna for the CY 2015:
1. Cash Local Treasury and Income accounts at year-end were understated by P1,060,248.91 due to non-inclusion of collections from December 29 to 31, 2015 in
violation of Sections 29 and 30 of the Manual on the New Government Accounting
System (MNGAS) for LGUs, Volume I and Section 51 of MNGAS, Volume II, thus,
exposing the funds to possible risk of loss or misuse.
We recommended that the City Mayor direct the ICO-City Treasurer to ensure that all
collections are turned over by the collectors at the end of business day and recorded as
Cash-Local Treasury at the end of the year.
2. The City officials failed to fully implement the rules and regulations on the granting, utilization and liquidation of cash advances of government officials and employees as
provided under COA Circular No. 97-002, resulting in unliquidated cash advances
totalling P738,497.60 as of December 31, 2015, thus showing ineffective control by
management over cash advances.
We recommended that the City Mayor direct:
a) the concerned City officials to expedite the immediate processing in the grant of cash advances on a replenishment basis so as not to hamper delivery of
b) all concerned officers and employees to liquidate their cash advances within the prescribed period or immediately after the purposes have been served;
c) the City Accountant to monitor and strictly enforce the liquidation of cash advances and/or refund of the excess amount granted within the prescribed
period and see to it that no additional cash advance shall be allowed unless
the previous ones are settled to prevent the accumulation thereof;
d) the City Accountant to enforce withholding of salaries of accountable officers who failed to promptly liquidate their cash advances. Otherwise, institute the
appropriate administrative and/or criminal action against accountable officers
concerned for their failure to settle their accounts, if warranted.
3. The Land account under the General Fund and Special Education Fund totaling P355,971,398.64 and P129,698,600.21, respectively, were not all covered by titles in the
name of the City, contrary to Section 39(2) of PD No. 1445 and Section 449, Volume 1
of the Government Accounting and Auditing Manual (GAAM), hence, ownership and
existence could not be ascertained, thus, posing risk to third party claims and illegal
We reiterated our recommendation that the City Mayor direct the City Accountant and
the GSO to establish and reconcile their reports against the titles on hand and to facilitate
and expedite the immediate transfer of ownership of those lots without titles to protect the
interest of the government.
4. The warranty security from the contract awardee was not required in the procurement of goods, contrary to Section 62.1 of the Implementing Rules and Regulations (IRR) of
Republic Act (RA) No. 9184, thus, corrections of manufacturing defects could not be
assured. Also, retention monies deducted from some procurement were claimed even
before the lapse of the warranty period.
We recommended that the City Mayor direct the City Accountant to deduct the retention
monies from all claims of suppliers of goods and to release them after the lapse of
warranty period. In case of claims for retention monies, only the special bank guaranty
should be required from the supplier.
5. Accountable Forms (AFs) totaling P837,625.00 were procured from private printer, Ready Forms Incorporated, contrary to Section 33 of COA Circular No. 2012-003 dated
October 29, 2012 and Department of the Interior and Local Government (DILG)
Memorandum Circular No. 2012-32 dated February 15, 2012, resulting in irregular
expenditures. This may also result in the lack of control over the assignment of series of
numbers which could lead to possible duplication of serial numbers of AFs printed with
recognized government printers.
We recommended that the City Mayor direct the concerned City Officials and Ready
Forms Inc. to refund the cost of accountable forms purchased from RFI totaling
P837,625.00. Also, ensure that