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.

    Organizational Structure

    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

    Permanent 545

    Temporary 64

  • Casual 67

    Contractual 12

    Elective Officials 13

    Coterminous 43

    Job Order 849 __________

    Total 1,593

    Financial Highlights

    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.

  • Audit Opinion

    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

    public services;

    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