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Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. X
Cagayan de Oro City

ANNUAL AUDIT REPORT

on the

MUNICIPALITY OF BALINGOAN
Province of Misamis Oriental

For the Year Ended December 31, 2014


EXECUTIVE SUMMARY

INTRODUCTION

Balingoan is a 5th class municipality in the province of Misamis Oriental, Philippines


and politically subdivided into nine (9) barangays. Formerly part of Talisayan, a
neighboring municipality, it gained independence on March 1, 1952 per Executive Order
No. 490.

FINANCIAL HIGHLIGHTS

The Municipality derived its income from the share of Internal Revenue Allotment,
Real Property Tax, Business Licenses and Permits and other miscellaneous income. Its
appropriation for the year amounted to ₱36,486,591.00.

The financial condition and results of operation of the Municipality are:

Increase %
CY 2014 CY 2013
(Decrease)
1. Financial Condition
Assets ₱28,557,591.38 ₱23,463,902.82 5,093,688.56 22%
Liabilities 12,550,235.39 12,162,739.18 387,496.21 3.2%
Government 16,007,355.99 11,301,163.64 4,706,192.35 42%
Equity
2. Results of Operations
Income ₱41,436,679.41 ₱38,244,709.22 3,191,970.19 8.3%
Expenses 35,999,060.86 37,758,004.26 (1,758,934.40) -4.6%
Net Income 5,437,618.55 486,704.96 4,950,913.59 1017%

OPERATIONAL HIGHLIGHTS

During the year, the Municipality had collected the total amount of ₱41,436,679.41
from its income, which exceeded the estimated receipts for the year in the total amount of
₱38,362,493.00.

SCOPE OF AUDIT

A financial and compliance audit was conducted on the accounts and operations of
the Municipality of Balingoan, Misamis Oriental for Calendar Year 2014. The audit was
conducted to ascertain the propriety of financial transactions and compliance of the agency
to prescribed rules and regulations, the accuracy of financial reports, as well as the fairness
of the presentation of the financial statements. A value for money audit was also conducted
to ascertain whether resources of the agency were managed, expended or utilized
economically, efficiently, and effectively.
INDEPENDENT AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

The Auditor rendered an adverse opinion on the fairness of the presentation of the
financial statements due to management’s failure to book up their properties with assessed
value of ₱14,756,120, non-conduct of property inventory and non-recognition of
depreciation of all its depreciable assets amounting to ₱27,513,641.68.

SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS

The Municipality of Balingoan, Misamis Oriental thru the able leadership of


Honorable Pedro Q. Panulaya, had successfully increase gross income from CY 2013 of
₱38,244,709.22 to 41,436,679.41 for CY2014.

The Municipality further provides general, economic and social services to its
constituents through the implementation of the 20% Development Fund and aids from other
National Agencies.

The Municipality maintained the stability of peace and order condition of the place
having constituents of nine barangays.

The following were the significant findings and recommendation which were
discussed with concerned officials/employees of the Municipality:

1. The accuracy and validity of the Cash in Bank accounts totaling ₱6,659,939.32
could not be ascertained due to delayed submission of Bank Reconciliation
Statements for CY 2014 and inability of the Municipal Accounting Office, to
prepare and submit the correct 2012 and 2013 Bank Reconciliation Statements
contrary to provisions of COA Circular No. 96-011.

We recommended to fast tract the submission of the 2012, 2013 and September to
December 2014 Bank Reconciliation Statements (BRS) of all depository accounts to
the Office of the Auditor. Also, require the Municipal Accountant to submit for
verification the monthly BRS within ten (10) days after the end of each month
together with the paid checks and original copies of the debit/credit memos.

We recommended to direct the Accountant to constantly supervise the clerk in-charge


of preparing the BRS. Train another accounting staff on how to prepare the BRS to
enable the submission of the same in the absence of the clerk.

2. The Agency failed to booked the Municipality’s assets with total assessed value of
P14,580,777.34, in violation to Section 63 of PD 1445 thereby causing the Financial
Statements to be materially misstated.

We recommended that the Municipal Mayor shall create an Appraisal Committee to


appraise the unrecorded properties based on the available Assessor’s documents.
Likewise, after the appraisal, the Municipal Accountant –Designate shall book up
the unrecorded properties in the books of accounts.
Also, require the General Services Officer to register or secure Transfer Certificate
of Titles for all lands acquired by the Municipality at the Office of the Registry of
Deeds, Region 10, Cagayan de Oro City

3. Municipal Accountant-Designate failed to recognize depreciation expense in the


books of all its depreciable assets amounting to ₱17,950,030.40 contrary to the
provisions of the New Government Accounting System or NGAS for LGU, resulting
to misstated Financial Statements.

We recommended that the Municipal Accountant-Designate be required to compute


the depreciation expense to properly reflect the income for the period. Moreover,
depreciation schedule should be made to monitor the same. All previous depreciation
expenses not recognized should also be computed and adjusting entry should be
made with a debit to Prior Year adjustment and credit to Accumulated Depreciation.

4. The continued failure of the Agency to conduct physical inventory of its booked and
previously identified unbooked Property, Plant and Equipment totaling
P27,513,641.68 as of December 31, 2014 contrary to Section 124 and 114 paragraph
2 and 3 of the Manual on the New Government Accounting System (MNGAS) for
Local Government Units (LGUs), Volume I, thus, existence and correctness of
property accounts appearing in the Financial statements could not be ascertained.

We reiterated our recommendation that the Local Chief Executive shall require the
inventory committee to conduct complete physical inventory of property to ascertain
the validity and correctness of the account balance in the financial statements and
submit a report thereon to the Auditor concerned, in accordance with Section 124 of
the Manual on NGAS, Volume I.

5. Failure of the agency to conduct competitive public bidding in the purchased of


materials for the implementation of its three (3) projects charged against 20%
Development Fund in the total amount of ₱568,651.86, in violation to R.A. 9184,
thus, most advantageous prices in favor of the government could not be obtained.

We recommended to stop the practice of implementing projects on a piecemeal


basis. Also, the rules and regulations on procurement should strictly be observed.
Priorities in project implementations should be set to avoid overlapping of
expenditures that may result to cash shortage and materials could be purchased in
bulk so as not to circumvent the law.

6. Request for relief of accountability for damaged property caused by fire with an
assessed value of ₱5,846,030 still could not be filed contrary to Section 487 of
GAAM, Volume I, in consonance with Section 375 and 376 of R.A. 7160 and
Sections 54 and 55, Manual on New Government Accounting System, Volume I,
thus, a loss of government property.
We recommended the Management to send a follow up letter to the Land Bank.
Also, we reiterates our recommendation that the Municipal Accountant shall book
up the value of the building razed by fire and the same shall be included in the
Report of Inventory of Property. Management shall prepare justification citing
among others the reason for the failure to book up and the delay in filing the request
for a relief from property accountability.

7. Improper charging of electrical wirings and payroll expenses to Rehabilitation of


Bus Terminal Building project in the total amount of ₱228,824.00 contrary to the
provisions stipulated in the DILG and DBM Joint Circular No. 2011-1 dated April
13, 2011 thereby depriving the constituents of the Municipality of the immediate
benefit that could be obtained from the mandated developmental programs and
projects.

We recommended management to justify the disbursements made and to stop the


practice of charging to 20% Development Fund programs, projects and activities that
are not in accordance with the policies and guidelines set on the utilization of fund
in order to maximize the benefits that can be derived from the fund.

Also, we recommended the Local Chief Executive to ensure strict utilization of the
fund in accordance with the guidelines to avoid subsequent disallowances in audit.

8. Due to absence of proper monitoring of its obligations, the Agency incurred


unnecessary surcharges in relation to its payment of electricity for the entire
municipality amounting to ₱21,043.21, thus, denied its constituents from the basic
services that could be funded from such amount.

We recommended to instruct the Municipal Accountant to properly monitor its


monthly obligations to avoid unnecessary expenses such as penalties and surcharges.

Further, we also recommended to charge against the person responsible of the delay
the above surcharges, being personal in nature.

STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT


RECOMMENDATIONS

Out of twenty three (23) audit recommendations stated in the CY 2013 Annual Audit
Report five (5) were fully implemented, four (4) were partially implemented while the other
fourteen (14) remained unimplemented.
TABLE OF CONTENTS
Page

Part I - AUDITED FINANCIAL STATEMENTS

Independent Auditor’s Report on the Financial Statements 1


Statement of Management Responsibility for Financial Statements 3
Financial Statements 4
Notes to Financial Statements 11

Part II - AUDIT OBSERVATIONS AND RECOMMENDATIONS 18

Part III - STATUS OF IMPLEMENTATION OF PRIOR YEAR’S 53


AUDIT RECOMMENDATIONS

Part IV - ANNEXES 60

Financial Statements by Fund


Status of Appropriation, Allotments and Obligations
Schedule of Collections and Deposits (Annex A)
Real Property Tax Data (Annex B)
List of Projects that were implemented through Shopping (Annex C)
ISS
ION ON
A
Republic of the Philippines
M
COMMISSION ON AUDIT

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Regional Office No. X

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Cagayan de Oro City
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Team 3, Audit Group A - Provinces of Misamis Oriental and Camiguin

INDEPENDENT AUDITOR’S REPORT

HONORABLE PEDRO Q. PANULAYA


Municipal Mayor
Balingoan, Misamis Oriental

We have audited the following financial statements of the Municipality of Balingoan,


Misamis Oriental which comprise the Consolidated Detailed Balance Sheet as of
December 31, 2014, and the related Consolidated Detailed Statement of Income and
Expenses and Consolidated Detailed Statement of Cash Flows for the year then ended,
and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial
statements in accordance with state accounting principles, and for such internal control
as management determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our


audit. We conducted our audit in accordance with Philippine Public Sector Standards on
Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that

1
are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to
provide basis for our audit opinion.

Basis for Adverse Opinion

The accuracy and reliability of the financial statements could not be ascertained due to
materiality in the amount of unbooked properties of ₱14,756,120.00; non recognition of
depreciation expense on all their depreciable assets of ₱17,950,030.40; and due to the
management’s failure to conduct physical count of its property, plant and equipment
(PPE) account in the total amount of ₱27,513,641.68, respectively.

Adverse Opinion

In our opinion, because of the effects of the matters discussed in the Basis for Adverse
Opinion paragraph, the financial statements referred to above do not present fairly, in all
material respects the financial position of the Municipality of Balingoan, Misamis
Oriental as of December 31, 2014 and its financial performance and its cash flows for the
year then ended in accordance with state accounting principles.

COMMISSION ON AUDIT

By:

ANNABELLE G. MANDIN
State Auditor III
OIC-Audit Team Leader

February 24, 2015

2
December 31, 2014

3
Municipality of Balingoan
CONSOLIDATED DETAILED BALANCE SHEET
As of December 31, 2014
(With Comparative Figures for CY 2013)

2014 2013
ASSETS
Current Assets
CASH (Note 5)
Cash in Vault 126,021.34
Payroll Fund 18,627.62
Cash in Bank Local Currency
Cash in Bank - Local Currency, Current Account 6,533,917.98 2,648,263.38
Total Cash 6,659,939.32 2,666,891.00
RECEIVABLES (Note 6)
Receivable Accounts
Due from offcers and Employee 64,692.00 64,692.00
Real Property Tax Receivable 1,773,758.65 2,182,920.72
Special Education Tax Receivabe 1,780,450.60 2,183,151.86
Inter-agency Receivables
Due from NGA's 1,091,183.89 1,091,183.89
Due from LGU's 873,183.50 873,183.50
Due from NGO's/PO's 5,418.23 5,418.23
Intra-agency Receivables
Due from Other Funds 1,220,412.33 1,220,412.33
Other Receivables
Receivables - Disallowances/Charges 242,549.36 242,549.36
Advances to Officers and Employees 1,376,350.00 751,930.00
Other Receivables 129,477.06 129,477.06
Total Receivables 8,557,475.62 8,744,918.95

INVENTORIES (Note 7 )
Supplies
Accountable Forms Inventory 190,469.61 190,469.61
Medical, Dental & Laboratory Supplies Inventory 15,000.00 15,000.00
Other Supplies Inventory 48,217.34 48,217.34
Gasoline, Oil & Lubricants Inventory
Spare Parts Inventory 91,184.16 91,184.16
Construction Materials Inventory
Total Inventories 344,871.11 344,871.11
Total Current Assets 15,562,286.05 11,756,681.06
Property, Plant & Equipment,net (Note 8)
LAND and LAND IMPROVEMENTS
Land 120,000.00 120,000.00
Land Improvements
Total Land and Land Improvements 120,000.00 120,000.00

See accompanying Notes to Financial Statements

4
BUILDINGS
School Buildings 62,800.99 62,800.99
Other Structures 55,342.66 55,342.66
Markets & Slaughterhouse
Total Buildings 118,143.65 118,143.65
OFFICE EQUIPMENT, FURNITURE & FIXTURES
Office Equipment 352,775.57 58,953.90
Furniture and Fixtures 92,344.68 88,384.68
I.T. Equipment & Software 90,493.00 69,218.60
Library Books
Total Office Equipment, Furniture & Fixtures 535,613.25 216,557.18
MACHINERIES AND EQUIPMENT
Machineries
Agricultural, Fishery & Forestry Equipment 3,013,612.00 3,013,612.00
Military and Police Equipment 30,590.00 30,590.00
Other Machineries & Equipment 298,500.00
Total Machineries and Equipment 3,342,702.00 3,044,202.00
TRANSPORTATION EQUIPMENT
Motor Vehicles 308,659.00 308,659.00
Other Transportation Equipment 808,809.65 808,809.65
Total Transportation Equipment 1,117,468.65 1,117,468.65
OTHER PROPERTY, PLANT & EQUIPMENT
Other Property, Plant & Equipment 19,826.50 6,150.00
Total Other Property, Plant & Equipment 19,826.50 6,150.00
PUBLIC INFRASTRUCTURE
Roads, Highways and Bridges
Parks, Plazas and Monuments
Artesian wells, Reservoir, Pumping Stations
Waterways, Seawalls, Riverwalls
CONSTRUCTION IN PROGRESS
Roads, Highways and Bridges 7,330,950.28 7,084,700.28
Artesian Well, Reservoir, Pumping Station 410,601.00
Waterways, Seawalls, Riverwalls
Total Construction in Progress 7,741,551.28 7,084,700.28
Total Property, Plant and Equipment P 12,995,305.33 P 11,707,221.76
Other Assets
OTHER ASSETTS
Work/Other Animals - -
Total Other Assets - -
TOTAL ASSETS P 28,557,591.38 P 23,463,902.82

LIABILITIES AND EQUITY


Current Liabilities (Note 9)
Payable Accounts
Accounts Payable 39,852.00 39,852.00
Inter-Agency Payables
Due to BIR 363,276.20 152,724.37
Due to GSIS 148,016.52 276,619.69
Due to PAG-IBIG 47,689.02 97,689.00
Due to PhilHealth 8,362.32 28,362.32
Due to Other NGA's 3,072,791.53 1,843,061.61
Due to GOCC's 820,930.57 791,403.87
Due to LGU's 529,234.33 1,001,435.00
Intra-Agency Payables
Due to Other Funds 3,965,873.65 3,764,819.28
Other Liability Accounts
Guarranty Deposits Payable
Current Liabilities
Other Payables (199,307.54)
Total Current Liabilities 8,996,026.14 7,796,659.60

See accompanying Notes to Financial Statements


5
Long-Term Liabilities
Mortgage/Bonds/Loans Payable
Loans Payable - Domestic
Total Long Term Liabilities - -
Deferred Credits (Note 10)
Deferred Real Property Tax Income 1,773,758.65 2,182,920.72
Deferred Special Education Tax Income 1,780,450.60 2,183,151.86
Other Deferred Credits - -
TOTAL DEFERRED CREDITS 3,554,209.25 4,366,072.58
TOTAL LIABILITIES P 12,550,235.39 P 12,162,739.18
EQUITY (Note 11)
Government Equity Beg. 11,301,163.64 10,357,543.67
Add/Deduct
Retained Operating Surplus
Current Operations 5,437,618.55 486,704.96
Prior Years Adjustment 456,915.01
Less: Transfers to Registry
Prior Years Adjustment 731,426.20
TOTAL GOVERNMENT EQUITY December 31, 2014 & 2013 16,007,355.99 11,301,163.64
TOTAL LIABILITIES AND EQUITY 28,557,591.38 P 23,463,902.82

(See accompanying Notes to Financial Statements)

6
Municipality of Balingoan
CONSOLIDATED DETAILED STATEMENT OF INCOME AND EXPENSES
For the Year Ended December 31, 2014
(With Comparative Figure for CY 2013)

2014 2013
Income (Note 13)
Local Taxes
Business Taxes 686,141.90 1,104,579.80
Community Taxes 64,111.98 82,354.00
Real Property Taxes 273,819.34 427,117.69
Special Education Tax 243,973.93 188,738.46
Total Local Taxes 1,268,047.15 1,802,789.95
GENERAL INCOME ACCOUNT
Internal Revenue Allotment 36,486,591.00 32,294,472.00
Permits and Licenses
Fees on Weights and Measures 13,800.00 12,900.00
Permit Fees 146,299.00 57,249.00
Registration Fees -
Other Permits and Licenses 15,138.75 290,407.00
Fines and Penalties - Permits and Licenses 17,568.50 17,413.40
Total Permits and Licenses 192,806.25 377,969.40
Service Income
Inspection Fees 110,477.00 73,900.00
Garbage Fees 60,240.00 99,600.00
Clearance and Certification Fees 90,410.00 64,650.00
Total Service Income 261,127.00 P 238,150.00
Business Income
Income from Markets 231,206.00 1,003,098.12 #
Income from Waterworks Systems 428,946.68 548,393.10
Landing and Parking Fees -
Other Business Income 97,295.82
Rent Income 560,638.50 757,971.75
Gross Profit
Sales Revenue
Total Business Income 1,318,087.00 P 2,309,462.97
Other Income
Income from Grants and Donations -
Interest from Tolls and Services 1,210,859.00 P -
Interest Income -
Share from PAGCOR/PCSO 31,663.80 34,218.22
Prior Year Adjustment 5,430.75
Subsidy from National Government Agency -
Miscellaneous Income 662,067.46 1,187,646.68
Total Other Income 1,910,021.01 P 1,221,864.90
Total Operating Income P 41,436,679.41 P 38,244,709.22

See accompanying Notes to Financial Statements


7
Less: Expenses (Note 14)
Personal Services
Salaries and Wages - Regular 10,646,610.21 11,264,424.15
Salaries and Wages - Casuals 1,859,410.75 1,840,254.57
Salaries and Wages - Contractual -
Other Compensation
Personnel Economic Relief Allowance (PERA) 1,852,000.00 1,879,000.00
Additional Compensation (ADCOM) -
Representation Allowance (RA) 871,485.00 952,055.00
Transportation Allowance (TA) 871,485.00 952,055.00
Clothing/Uniform Allowance 425,000.00 344,000.00
Subsistence, Laundry and Quarter Allowance 70,950.00 59,400.00
Productivity Incentive Allowance 92,000.00 150,000.00
Hazard Pay -
Honoraria 6,800.00
Cash Gift 726,124.73 1,717,783.00
Overtime and Night Pay 26,234.70 -
Other Bonuses and Allowances -
Personnel Benefits Contributions
Life & Retirement Insurance Contributions 1,405,244.78 1,426,717.51
PAG-IBIG Contributions 232,881.98 240,916.40
PHILHEALTH Contributions 154,150.00 158,787.16
ECC Contributions 72,659.34 105,017.54
Other Personnel Benefits
Health Worker Benefits 622,250.00 264,900.00
Terminal Leave Benefits 1,518,265.11 2,199,080.13
Year-end Bonuses 725,671.35 -
Other Personnel Benefits 2,225,000.00 221,950.00
Total Personal Services 24,404,222.95 P 23,776,340.46
Maintenance and Other Operating Expenses
Traveling Expenses
Traveling Expenses - Local 1,066,260.44 1,208,339.00
Training & Scholarship Expenses
Training Expenses 351,123.00 360,924.00
Supplies and Materials Expenses
Office Supplies Expenses 332,034.05 465,040.22
Accountable Forms Expenses 68,700.00
Food Supplies Expense 266,319.42 359,210.00
Drugs and Medicines Expenses 231,739.50 190,061.10
Gasoline, Oil & Lubricants Expense 701,273.24 465,383.58
Animal/Zoological Supplies Expense 30,000.00 -
Medical, Dental and Labaratory Supplies Exp. 38,761.00 -
Agricultural Expenses 9,423.00 -
Other SuppliesExpense 4,350.00 62,247.87
Utility Expenses
Water Expenses 32,350.00 68,789.00
Electricity Expenses 1,737,158.61 912,151.70
Communication Expenses
Telephone Expenses - Mobile 2,000.00 11,887.00
Postage and Deliveries 3,800.00 2,327.00
Telephone Expenses - Landline - 2,740.00
Internet Expenses 90,373.74 43,744.37
Subscription Expense 1,200.00 -
Rent Expenses 25,000.00 -
Memmbership Dues & Contribution to Organization 3,900.00

See accompanying Notes to Financial Statements

8
Professional Services
Auditing Expenses 162,079.17 98,000.00
Legal Expenses 5,200.00 13,306.00
Environment/Sanitary Services
Survey Expenses 26,548.00 # -
Repairs & Maintenance - Electrification 47,287.00 371,474.00
Buildings
Repairs & Maintenance - Office Buildings 4,500.00 10,030.00
Repairs & Maintenance-Market & Slaughterhouse - 12,498.24
Repairs & Maintenance - Other Structures 76,450.00 125,196.00
Office Equipment, Furniture and Fixtures
Repair and Maintenance - Office Equipment 59,940.00 53,524.26
Repair and Maintenance - IT Equipment and Software 20,140.70 6,595.00
Machineries and Equipments
Repairs & Maintenance-Machineries 14,362.00
Repair and Maintenance - Agriculture, Fishery 2,450.00 8,330.96
Accessories
Repairs & Maintenance-Sports Equipment 82,600.00 71,623.00
Transportation Equipment
Repair and Maintenance - Motor Vehicles - 805,696.97
Repair and Maintenance - Watercrafts - 3,000.00
Repair and Maintenance - Firefighting Equip. & accessories 805.00
Repair and Maintenance - Other Transportation Eq. 249,941.76
Public Infrastructures
Repairs & Maintenanca - Roads, Highways and Bridges 49,968.50 11,350.00
Repairs & Maintenanca - Other Public Infra 3,778,235.79 1,974,063.32
Repair & Maintenance - Artesian Wells, Reservoirs, Pumping Stns Conduits 136,652.00 432,390.00
Repair & Maintenance - Waterways, Aqueducts,Seawalls,Riverways & Others 513,115.00 -
Confidentials, Intelligence, Extraordinary and Miscellaneous Expenses
Miscellaneous Expenses 39,651.16
Tax, Insurance Premiums & Other Fees
Insurance Expenses 21,401.91
Fidelity Bond Premiums 16,430.50 35,874.75
Taxes, Duties and Licenses -
Other Maintenance and Operating Expenses
Maintenance and Operating Expenses 1,305,675.42 5,781,504.46
Total Maintenance and Other Operating Expenses 11,594,837.91 P 13,981,663.80
INCOME FROM OPERATIONS 5,437,618.55 P 486,704.96
Less: Financial Expenses
Interest Expenses - P -
Income Before Subsidies, Donations & Extraordinary Items P 5,437,618.55 P 486,704.96
Less: Subsidy to Local Government Units
Subsidy from National Government Agency -
Donations - -
Subsidy to Local Government Units -
Total - P -
Income Before Extraordinary Items P 5,437,618.55 P 486,704.96
Add: Extraordinary Items
Gain/Loss on Sale of Disposed Assets - P -
NET INCOME P 5,437,618.55 P 486,704.96

See accompanying Notes to Financial Statements


9
Municipality of Balingoan
CONSOLIDATED DETAILED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2014
(With Compararative Figures for CY 2013)

2014 2013
Cash Flows from Operating Activities:
Cash Inflows:
Share from Internal Revenue Allotments 36,486,591.00 32,294,472.00
Collection from Local Tax 750,253.88 1,104,579.80
Collection from Real Property Tax 273,819.34 427,117.69
Collection of Special Education Tax 243,973.93 188,738.46
Collection from Permit and Licenses 192,806.25 365,069.40
Collection from Service Income 261,127.00 238,150.00
Collection from Business Income 1,318,087.00 2,309,462.97
Collection from Subsidy income 1,929,806.61 5,054,312.86
Other Receipts 1,933,110.59 1,328,108.39
Total Cash Inflow 43,389,575.60 43,310,011.57
Cash Outflows:
Payment to :
Suppliers/Creditors 2,286,271.62 15,290,539.43
Employees 25,790,370.39 23,845,381.46
Interest Expenses
Other Disbursements 10,392,318.35 3,203,122.20
Total Cash Outflow 38,468,960.36 P 42,339,043.09
Net Cash from Operating Activities 4,920,615.24 P 970,968.48
Cash Flows from Investing Activities:
Cash Outflows:
Purchase of Property, Plant and Equipment 927,566.92 600,000.00
Transfer of funds for Implementation of P -
Infrastructure Projects -
Total Cash Outflow 927,566.92 P 600,000.00
Net Cash from Investing Activities: (927,566.92) P (600,000.00)
Cash Flows from Financing Activities:
Cash Outflows:
Payment of Loans Payable - P -
Payment for Financial Expenses - -
Payment of Loan Amortization - -
Total Cash Outflow - P -
Net Cash from Financing Activities - P -
Net Increase in Cash 3,993,048.32 P 370,968.48
Cash and Cash Equivalents, December 31 2,666,891.00 2,295,922.52
Cash at the End of the Period 6,659,939.32 P 2,666,891.00

(See Accompanying Notes to Financial Statements)

10
NOTES TO FINANCIAL STATEMENTS

1. General/Agency Profile

The Municipality of Balingoan, Misamis Oriental was created on July 7, 1948 by


virtue of Executive Order No. 128.

2. Basis of Financial Statement Presentation

The financial statements of the LGU of Balingoan have been prepared in


accordance with the generally accepted state accounting principles and standards. In
compliance with COA Circular No. 2003-001 dated January 17, 2003, the Revised Chart
of Accounts was implemented and conversion of accounts was effected this year.

3. Summary of Significant Accounting Policies

The consolidation financial statements include the accounts of the general fund,
special education fund and trust fund wholly by the government unit.

Some accounts in the previous years’ financial statements were reclassified to


conform to the new chart of accounts used in the current period.

The straight line method of depreciation is followed. No depreciation is charged


to public infrastructure. For equipment, vehicles and other assets currently acquired by
the agency, depreciation is computed on the month following the purchase date.

4. Correction of Fundamental Errors

Fundamental errors of prior years are corrected using the Prior Year’s Adjustment
account while errors affecting the current year’s operation are affected to the current year
accounts.

5. Cash

Account Title 2014 2013


Cash in Vault P 126,021.34 P 0
Payroll Fund - 18,627.62
Cash in Bank, Local Currency
2,648,263.38
–CA 6,533,917.98
P 6,659,939.32 P P 2,666,891.00

The cash balance represents the actual cash in the bank deposits at the Land Bank
of the Philippines, Capistrano Branch and Philippine Postal Bank all in Cagayan de Oro
City.

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6. Receivables

2014 2013
Receivable Accounts
Due from offcers and Employee P 64,692.00 P 64,692.00
Real Property Tax Receivable 1,773,758.65 2,182,920.72
Special Education Tax Receivabe 1,780,450.60 2,183,151.86
Inter-agency Receivables
Due from NGA's 1,091,183.89 1,091,183.89
Due from LGU's 873,183.50 873,183.50
Due from NGO's/PO's 5,418.23 5,418.23
Intra-agency Receivables
Due from Other Funds 1,220,412.33 1,220,412.33
Other Receivables
Receivables - Disallowances/Charges 242,549.36 242,549.36
Advances to Officers and Employees 1,376,350.00 751,930.00
Other Receivables 129,477.06 129,477.06
Total Receivables P 8,557,475.62 P 8,744,918.95

7. Inventories

2014 2013
Accountable Forms Inventory P 190,469.61 P 190,469.61
Medical, Dental & Laboratory Supplies Inventory 15,000.00 15,000.00
Other Supplies Inventory 48,217.34 48,217.34
Gasoline, Oil & Lubricants Inventory
Spare Parts Inventory 91,184.16 91,184.16
Construction Materials Inventory
Total Inventories P 344,871.11 P 344,871.11

8. Property, Plant and Equipment

Dec. 31, 2013 (Reduction) Dec. 31, 2014


Land P 120,000.00 - P 120,000.00
Buildings 62,800.99 - 62,800.99
Office Equipment 58,953.90 293,821.67 352,775.57
Furniture and Fixtures 88,384.68 3,960.00 92,344.68
IT Equipment and Software 69,218.60 21,274.40 90,493.00
Agricultural, Fishery and
3,013,612.00 -
Forestry Equipment 3,013,612.00
Military Police Equipment 30,590.00 - 30,590.00

Other Machineries & Equipment 0.00 298,500.00


298,500.00
Motor Vehicles 308,659.00 - 308,659.00

Other Transportation Equipment 808,809.65 -


808,809.65
Other Property, Plant & Equipt. 6,150.00 13,676.50 19,826.50
Other Structures 55,342.66 - 55,342.66
Construction in Progress-
7,084,700.28 656,851.00
Roads,Highways and Bridges 7,741,551.28
Total 11,707,221.76 1,288,083.57 12,995,305.33

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9. Current
Liabilities

Accounts Payable P 39,852.00 P 39,852.00


Due to BIR 363,276.20 152,724.37
Due to GSIS 148,016.52 276,619.69
Due to PAG-IBIG 47,689.02 97,689.00
Due to PhilHealth 8,362.32 28,362.32
Due to Other NGA's 3,072,791.53 1,843,068.61
Due to GOCC's 820,930.57 791,403.87
Due to LGU's 529,234.33 1,001,435.00
Due to Other Funds 3,965,873.65 3,764,819.28
Other Payables (199,307.54)
P 8,996,026.14 P 7,796,666.60

Local Disaster Risk Reduction and Management Fund (LDRRMF)

During the year, the agency had appropriated an amount of ₱1,824,329.40 for the
5% Local Disaster Risk Reduction and Management Fund (LDRRMF) as mandated
under Section 21, Republic Act 10121. Of the said amount, ₱575,437.40 was for the 30%
Quick Response Fund (QRF) and ₱1,248,892 was for the Mitigation Fund (MF). Shown
below is the LDRRMF by the LGU to support its disaster risk management activities
pursuant to R.A. No. 10121 otherwise known as the “Philippine Disaster Risk Reduction
and Management Act of 2010.” The amount available and utilized during the year totaled
₱2,498,329.40 and ₱939,462.70, respectively, broken down as follows:

Particulars Amount
Current Year Appropriations: Available Utilized Balance
30% Quick Response Fund (QRF) 575,437.40 213,000.80 362,436.60
70% Mitigation Fund 1,248,892.00 726,461.90 522,430.10
Continuing Appropriation:
CY 2013 144,000.00 144,000.00
CY 2012 530,000.00 530,000.00
Grand Total 2,498,329.40 939,462.70 1,558,866.70

10. Deferred Credits

The balance represents unrealized or uncollected real property and special


education tax income. Deferred Real Property Tax Income/Special Education Tax

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Income was credited at the beginning of the year when Real Property Tax
Receivables/Special Education Tax Receivables was established. Upon collection of Real
Property Taxes from taxpayers, the account was debited while the Real Property Tax
Income due to the municipality was recognized/credited.

2014 2013
General Fund P 1,773,758.65 P 2,182,920.72
Trust Fund - -
Special Education Fund 1,780,450.60 2,183,151.86
Total P 3,554,209.25 P 4,366,072.58

11. Government Equity

2014 2013
Property, Plant and Equipment P 12,995,305.33 P 10,814,458.68

Equity set aside to finance CO projects with


appropriations continuing appropriations 2,404,854.60 486,704.96

Obligated allotments of which no liability has


been recognized (portion pertaining to
inventories)

Equity allocated to settle existing obligations 607,196.06

TOTAL GOVERNMENT EQUITY December 31 P 16,007,355.99 P 11,301,163.64

The component of the government equity include the amount carried from the
previous year’s financial statement, residual equity – containing appropriation, invested
capital, contingent capital and the credit balance of the retained operating surplus of the
year.

12. Prior Year Adjustments

These are adjustments in the General and Special Education Fund and Trust Fund
accounts made during the year involving erroneously recorded prior year transactions.

13. Income Accounts

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Business Taxes 686,141.90 1,104,579.80
Community Taxes 64,111.98 82,354.00
Real Property Taxes 273,819.34 427,117.69
Special Education Tax 243,973.93 188,738.46
Internal Revenue Allotment 36,486,591.00 32,294,472.00
Fees on Weights and Measures 13,800.00 12,900.00
Permit Fees 146,299.00 57,249.00
Other Permits and Licenses 15,138.75 290,407.00
Fines and Penalties - Permits and Licenses 17,568.50 17,413.40
Inspection Fees 110,477.00 73,900.00
Garbage Fees 60,240.00 99,600.00
Clearance and Certification Fees 90,410.00 64,650.00
Income from Markets 231,206.00 1,003,098.12
Income from Waterworks Systems 428,946.68 548,393.10
Other Business Income 97,295.82
Rent Income 560,638.50 757,971.75
Interest from Tolls and Services 1,210,859.00 P -
Share from PAGCOR/PCSO 31,663.80 34,218.22
Prior Year Adjustment 5,430.75
Subsidy from National Government Agency -
Miscellaneous Income 662,067.46 1,187,646.68
Total Operating Income P 41,436,679.41 P 38,244,709.22

Accrual method of accounting is used for IRA and modified accrual method is
used for Real Property Tax. All other taxes, fees, charges and other revenues are
accounted using the cash method of accounting.

14. Expenditure Accounts

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Personal Services 2014 2013
Salaries and Wages - Regular 10,646,610.21 11,264,424.15
Salaries and Wages - Casuals 1,859,410.75 1,840,254.57
Personnel Economic Relief Allowance (PERA) 1,852,000.00 1,879,000.00
Representation Allowance (RA) 871,485.00 952,055.00
Transportation Allowance (TA) 871,485.00 952,055.00
Clothing/Uniform Allowance 425,000.00 344,000.00
Subsistence, Laundry and Quarter Allowance 70,950.00 59,400.00
Productivity Incentive Allowance 92,000.00 150,000.00
Honoraria 6,800.00
Cash Gift 726,124.73 1,717,783.00
Overtime and Night Pay 26,234.70 -
Other Bonuses and Allowances -
Life & Retirement Insurance Contributions 1,405,244.78 1,426,717.51
PAG-IBIG Contributions 232,881.98 240,916.40
PHILHEALTH Contributions 154,150.00 158,787.16
ECC Contributions 72,659.34 105,017.54
Health Worker Benefits 622,250.00 264,900.00
Terminal Leave Benefits 1,518,265.11 2,199,080.13
Year-end Bonuses 725,671.35 -
Other Personnel Benefits 2,225,000.00 221,950.00
Total Personal Services 24,404,222.95 P 23,776,340.46

Maintenance and Other Operating Expenses


Traveling Expenses - Local 1,066,260.44 1,208,339.00
Training Expenses 351,123.00 360,924.00
Office Supplies Expenses 332,034.05 465,040.22
Accountable Forms Expenses 68,700.00
Food Supplies Expense 266,319.42 359,210.00
Drugs and Medicines Expenses 231,739.50 190,061.10
Gasoline, Oil & Lubricants Expense 701,273.24 465,383.58
Animal/Zoological Supplies Expense 30,000.00 -
Medical, Dental and Labaratory Supplies Exp. 38,761.00 -
Agricultural Expenses 9,423.00 -
Other SuppliesExpense 4,350.00 62,247.87
Water Expenses 32,350.00 68,789.00
Electricity Expenses 1,737,158.61 912,151.70

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Telephone Expenses - Mobile 2,000.00 11,887.00
Postage and Deliveries 3,800.00 2,327.00
Telephone Expenses - Landline - 2,740.00
Internet Expenses 90,373.74 43,744.37
Subscription Expense 1,200.00 -
Rent Expenses 25,000.00 -
Memmbership Dues & Contribution to Organization 3,900.00
Auditing Expenses 162,079.17 98,000.00
Legal Expenses 5,200.00 13,306.00
Survey Expenses 26,548.00 -
Repairs & Maintenance - Electrification 47,287.00 371,474.00
Repairs & Maintenance - Office Buildings 4,500.00 10,030.00
Repairs & Maintenance-Market & Slaughterhouse - 12,498.24
Repairs & Maintenance - Other Structures 76,450.00 125,196.00
Repair and Maintenance - Office Equipment 59,940.00 53,524.26
Repair and Maintenance - IT Equipment and Software 20,140.70 6,595.00
Repairs & Maintenance-Machineries 14,362.00
Repair and Maintenance - Agriculture, Fishery 2,450.00 8,330.96
Repairs & Maintenance-Sports Equipment 82,600.00 71,623.00
Repair and Maintenance - Motor Vehicles - 805,696.97
Repair and Maintenance - Watercrafts - 3,000.00
Repair and Maintenance - Firefighting Equip. & accessories 805.00
Repair and Maintenance - Other Transportation Eq. 249,941.76
Repairs & Maintenanca - Roads, Highways and Bridges 49,968.50 11,350.00
Repairs & Maintenanca - Other Public Infra 3,778,235.79 1,974,063.32
Repair & Maintenance - Artesian Wells, Reservoirs, Pumping Stns Conduits 136,652.00 432,390.00
Repair & Maintenance - Waterways, Aqueducts,Seawalls,Riverways & Others 513,115.00 -
Miscellaneous Expenses 39,651.16
Insurance Expenses 21,401.91
Fidelity Bond Premiums 16,430.50 35,874.75
Taxes, Duties and Licenses -
Other Maintenance and Operating Expenses 1,305,675.42 5,781,504.46
Total Maintenance and Other Operating
Expenses 11,594,837.91 P 13,981,663.80

Total Operating Expenses 35,999,060.86 37,758,004.26

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15. Statement of Appropriations, Allotments, Obligations and Balances
(SAAOB) Summary

The total Agency’s appropriations for the calendar year 2014 amounted to
₱38,362,493.00, of this amount, ₱22,378,120.91 were allotted from January to July 2014
(last submitted) on which ₱14,166,003.31 were obligated leaving a balance of
8,212,117.60. Details are as follows:

Function/Program Balances
/Project Appropriations Allotments Obligations Appropriations Allotments
General Public Services 25,158,413.54 25,158,413.53 17,448,430.68 0.01 7,709,982.85
Health Services 2,068,230.51 2,068,230.51 1,680,598.15 - 387,632.36
Social Welfare Services 853,861.44 853,861.44 690,572.69 - 163,288.75
Economic Services 2,998,488.91 2,998,488.91 2,474,743.09 - 523,745.82
Other Purposes 7,283,498.60 7,283,498.60 1,426,011.08 - 5,857,487.52
Total 38,362,493.00 38,362,492.99 23,720,355.69 0.01 14,642,137.30

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PART II – AUDIT OBSERVATIONS AND RECOMMENDATIONS

FINANCIAL AND COMPLIANCE AUDIT

Cash and Cash Accounts

1. Due to unsound fiscal administration and laxity in monitoring the agency


funds, the cash balance of the Municipality’s General Fund, Trust Fund and
Special Education Fund as of December 31, 2014 of P P6,659,939.32 was not
sufficient to back up the total current payables and funds entrusted for
specific purpose totaling ₱9,670,026.14 violation to Section 4(3) and Section
84(2) of PD 1445 and Section 337 of R.A. 7160 resulted in a cash deficiency
of ₱3,010,086.82 thus, implementation of projects could not be undertaken
and payment of current obligations is deferred.

Section 4(3) and Section 84(2) of PD 1445 states that:

“Trust funds shall be available and spent only for the specific purpose for which
the trust was created or the funds received”.

“Trust Funds shall not be paid out of any public treasury or depository except in
fulfillment of the purpose for which the trust was created or funds received, and
upon authorization of the legislative body, or head of any other agency of the
government having control thereof, and subject to pertinent budget law, rules and
regulations.”

Further, the fundamental principles governing the conduct and management of


financial affairs, transactions, and operations of provinces, cities, municipalities, and
barangays is that, Section 337 of RA 7160 (Local Government Code) clearly states that:

“Disbursements in accordance with appropriations in the approved annual


budget may be made from any local fund in the custody of the treasurer, but the
total disbursements from any local fund shall in no case exceed fifty percent
(50%) of the uncollected estimated revenue accruing to such local fund in
addition to the actual collections: Provided, however, that no cash overdraft in
any local fund shall be incurred at the end of the fiscal year.”

An evaluation was made on the financial performance of the Municipality of


Balingoan as regard its financial viability to meet short-term obligations.

A review of the Municipality’s financial statements as of December 31, 2014


revealed that the cash balance of the General Fund (GF), Trust Fund (TF) and Special
Education Fund (SEF) were insufficient to back up their current payables and other
obligations. The total cash balance for General Fund, Trust Fund and SEF amounted to

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only ₱6,659,939.32 while total current payables/obligations amounted to ₱9,670,026.14
or a cash deficiency of ₱3,010,086.82. This implies that the Municipality would not be
able to fund and pay on time its creditors, i.e. government and private institutions, various
suppliers/contractors, other LGUs and would be at risk to sustain future cash
requirements.

Accounts
General Fund Trust Fund SEF Total

Cash in Vault 106,606.35 -0- 19,414.99 126,021.34


Payroll Fund 0.00 -0- 0.00 -0-
Cash in Bank 5,999,487.46 525,064.77 9,365.75 6,533,917.98
Total Cash Available 6,106,093.81 525,064.77 28,780.74 6,659,939.32

Less: Payables -
Accounts Payable 39,852.00 0.00 0.00
Due to National Treasury - 0.00 0.00
Due to BIR 308,873.14 40,328.57 14,074.49
Due to GSIS 148,016.52 0.00 0.00
Due to PagIbig 47,689.02 0.00 0.00
Due to PhilHealth 8,362.32 0.00 0.00
Due to Other NGAs 1,126,306.42 1,946,485.11 4,803.15
Due to GOCCs 734,905.44 83,139.58 2,885.55
Due to DRRM 674,000 0.00
Due to LGUs 387,568.05 141,666.28
Due to Other Funds 2,384,419.62 1,581,454.03 0.00
Other Payables -0- 0.00
Guaranty Deposits payable -0- 0.00
Total Payables 5,859,992.53 3,651,407.29 158,626.32 9,670,026.14
Net Balance -
246,101.28 (3,126,342.52) (129,845.58) (3,010,086.82)
Funded/(Unfunded)

The negative financial condition above is not in conformity with sound fiscal
administration and placed the Municipality at risk of not being able to sustain the cash
requirement for its operation.

Sound financial administration dictates that an organization shall have sufficient


cash that is free from encumbrances to cover the cash requirement for its operation.

The data above showed that most of the current payables/obligations are funds
from salary deductions of municipal employees merely entrusted to the LGU for
remittance of premiums and loan repayments to financial institutions and the
implementation of the 20% development and the calamity funds. These funds are not
supposed to be utilized/disbursed for other purposes.

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Government needs to ensure both efficient implementation of their budgets and
good management of their financial resources. Cash management aims to control
spending and implementing the budget efficiently, among others. This is an aspect which
the Municipality of Balingoan failed to achieve way back in the previous years. Thus, this
is a reiteration of last four year’s audit finding.

Management comment:

This observation was discussed during our exit conference conducted on February
20, 2015. The management agreed and accepted this observation and promised to
implement the recommendations.

Recommendation:

We recommended that the Municipality shall establish a good monitoring


system to prevent the incurrence of cash deficiency/overdraft. For effective and
transparent management, closely coordinate with the budget officer, the accountant,
the treasurer, and the heads of divisions thru regular meetings, consultations or
dialogue.

We also recommended to regularly monitor cash in bank balances to ensure


that there is sufficient cash to cover all trust liabilities before any disbursement
could be made.

Further, we recommended that management adopt economy and austerity


measures in its operations and refrain from any unwarranted disbursements.

2. The accuracy and validity of the Cash in Bank accounts totaling


₱6,659,939.32 could not be ascertained due to delayed submission of Bank
Reconciliation Statements for CY 2014 and inability of the Municipal
Accounting Office, to prepare and submit the correct 2012 and 2013 Bank
Reconciliation Statements contrary to provisions of COA Circular No. 96-
011.

Provisions of COA Circular No. 96-011 dated October 2, 1996 states as follows:

“Section 3.2 – The Local Accountants shall within ten (10) days from
receipt of the Bank Statements (BS) reconcile the same with the General Ledger
(GL) and prepare the Bank Reconciliation Statements (BRS) in five copies,
distributed as follows: xxx Duplicate –Provincial/City/Municipal Auditor xxx”

For CY 2014, only January to August 2014 Bank Reconciliation


Statements were submitted on January 21, 2015.

For the entire year of 2012 and 2013, management has not prepared and submitted
the correct Bank Reconciliation Statements of its four (4) depository accounts.

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Bank Fund
LBP, Cagayan de Oro City General Fund ( 101)
Postal Bank, Gingoog City General Fund (101)
Postal Bank, Gingoog City Special Education Fund (221)
Postal Bank, Gingoog City Trust Fund (401)

The Cash in Bank-Local Currency, Current Account as of year-end showed the


following ledger balances not reconciled with the bank:

Fund Amount

General Fund P 6,106,093.81


Special Education Fund 238,780.74
Trust Fund 525,064.77
Total P 6,659,939.32

For the CY 2012 BRS, the previous accounting clerk assigned to prepare the Bank
Reconciliation Statements (BRS) reasoned out that she lost the Universal Serial Bus
(USB) containing the soft copy of the BRS and could not also retrieve the file from the
computer, hence, she had difficulty in reconstructing/preparing again the statements.

While for the CY 2013 BRS, the new Accountant Designate submitted only the
May to September 2013 but these were returned due to inconsistency of data reflected
under unadjusted balance per book in the Bank Reconciliation Statement against the cash
in bank account in the general ledger.

While for CY 2014 BRS, the Accountant-designate submitted the January to


August 2014 Bank Reconciliation Statements only on January 21, 2015.

As a result, the accuracy and validity of the balance of the Cash in Bank totaling
₱6,659,939.32 could not be ascertained due to the inability of the personnel of the
Municipal Accounting Office to prepare and submit complete bank reconciliation
statements to the Office of the Auditor, in violation of Section 3.2 of COA Circular No.
96-011 dated October 2, 1996.

Management Comment:

During the exit conference, the Municipal Accountant promised to comply with
the stated recommendations.

Recommendations:

We recommended to fast tract the submission of the 2012, 2013 and


September to December 2014 Bank Reconciliation Statements (BRS) of all
depository accounts to the Office of the Auditor. Also, require the Municipal

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Accountant to submit for verification the monthly BRS within ten (10) days after
the end of each month together with the paid checks and original copies of the
debit/credit memos.

We recommended to direct the Accountant to constantly supervise the clerk


in-charge of preparing the BRS. Train another accounting staff on how to prepare
the BRS to enable the submission of the same in the absence of the clerk.

Property, Plant and Equipment

3. The Agency failed to booked the Municipality’s assets with total assessed
value of P14,580,777.34, in violation to Section 63 of PD 1445 thereby
causing the Financial Statements to be materially misstated.

Section 63 of Presidential Decree No. 1445 states, “Accounting for moneys and
property received by public officials.- Except as may otherwise be specifically provided
by law or competent authority all moneys and property officially received by a public
officer in any capacity or upon any occasion must be accounted for as government funds
and government property. Government property shall be taken up in the books of the
agency concerned at acquisition cost or an appraised value.”

As shown in Annex E, 23 parcels of land acquired thru donation and 12 buildings


were not recorded in the agency’s books. Verification of the Land (201), Office
Buildings (211), Market and Slaughter house (214), and Other Structure (215) accounts
shows the following:

Trial Balance Real Property Tax


as of Declaration Data
Unbooked
December (Issued by the
Properties
31, 2014 Municipal Assessor)
Assessed Value
Land (201) 120,000.00 1,822,060.00 1,702,060.00
Office Building (212) 0.00 1,283,090.00 1,283,090.00
School building (213) 62,800.90 0.00 0.00
Market & Slaughter 0.00 256,410.00 256,410.00
House (214)
Other Structures (215) 55,342.66 11,394,560.00 11,339,217.34
P238,143.56 P 14,756,120.00 P14,580,777.34

Proper identification of the above properties could not be made due to absence of
subsidiary ledger.

Further, audit disclosed that the value of the Terminal Building in the amount of
₱5,864,030.00 was part of the ₱11,394,560 Other Structures that was still not booked in

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the Agency’s books of accounts. The said building was acquired thru loan with LBP. To
date, no request for relief from property accountability has been filed with COA.

In view of the above, the materiality of the amount of unbooked properties of the
Agency which is 40% of its total assets, renders its Financial Statements unreliable.

Management comment:

During the exit conference conducted on February 20, 2015, Management asserted
that they had already coordinated with the Office of the Assessor for proper booking of
the value of the said assets. Moreover, a letter was sent to the Land Bank requesting a
copy of the loan, but none was given as of this writing.

The Management agreed and accepted this observation and promised to comply
with the recommendations.

Recommendations:

We recommended that the Municipal Mayor shall create an Appraisal


Committee to appraise the unrecorded properties based on the available Assessor’s
documents. Likewise, after the appraisal, the Municipal Accountant –Designate
shall book up the unrecorded properties in the books of accounts.

Also require the General Services Officer to register or secure Transfer


Certificate of Titles for all lands acquired by the Municipality at the Office of the
Registry of Deeds, Region 10, Cagayan de Oro City

4. The Municipal Accountant-Designate failed to recognize depreciation


expense in the books on all their depreciable assets in the total amount of
₱17,950,030.40 contrary to the provisions of the New Government
Accounting System or NGAS for LGU, resulting to material overstatement of
Net PPE and Government Equity.

Item O, Chapter 2, Volume 1 of the New Government Accounting System,


provides that depreciation expense should be recognized using the straight line method. A
residual value equivalent to ten percent (10%) of the cost shall be set-up and depreciation
shall start on the second month after purchase/completion of the property, plant and
equipment. Public infrastructures shall not be charged any depreciation.

For CY 2014, the Municipal Accountant-designate still did not provide


depreciation for all its depreciable assets amounting to ₱17,950,030.40, hence, this
reiteration of previous year audit finding. Per inquiry, this was due to absence of proper
recording of assets as bases for computation of depreciation.

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Depreciation expense and accumulated depreciation should be recognized in the
books to properly value the property as of the end of a certain period considering the
wear and tear over the years the property was used. Non-recognition of the above
expense would result to overstatement of the PPE account, understatement of expense
account and inaccurate presentation of the Agency’s Financial Statement.

Management comment:

During the exit conference, the Management promised to exert efforts to prepare a
list of their depreciable assets and start computing the respective depreciation and prepare
the necessary adjustments.

Recommendation:

We recommended that the Municipal Accountant-Designate be required to


compute the depreciation expense to properly reflect the income for the period.
Moreover, depreciation schedule should be made to monitor the same. All previous
depreciation expenses not recognized should also be computed and adjusting entry
should be made with a debit to Prior Year adjustment and credit to Accumulated
Depreciation.

5. Due to the continued failure of the Agency to conduct physical inventory to


validate the existence, location and actual physical condition of its booked
and unbooked properties costing P27,513,641.68 in violation of Section 124
and 114 Volume I , Manual of New Government Accounting System
(MNGAS) for Local Government Units (LGUs), reliability of Property, Plant
and Equipment accounts as of December 31, 2014 could not be ascertained.

Section 124 of the Manual on NGAS, Volume I, requires the physical count of
property inventory of property, plant and equipment by type, which shall be made
annually and reported on the Physical Count of Property, Plant and Equipment
(RPCPPE). This shall be submitted to the Auditor concerned not later than January 31 of
each year.”

Section 114, paragraph 2 of the Manual on NGAS , Volume I states that:

“The Chief Accountant shall maintain the perpetual inventory records of


Property, Plant and Equipment Ledger Card (PPLEC) for each category of property,
plant and equipment. Such ledger cards shall contain the details of the property, plant
and equipment account in the inventory control account in the general ledger”.

While paragraph 3 of the same Section provides that the Municipal Treasurer
shall likewise maintain property cards for property, plant and equipment in their custody
to account for the receipt and disposition of the same. The balance of property cards
should always reconcile with the ledger cards of the accounting unit. They should also

25
reconcile with other property records like Acknowledgement Receipt for Equipment
(ARE).

Below are the lists of booked and previously identified unbooked properties in
which the agency failed to conduct the physical inventory to validate the existence of the
said properties:
Per Municipal Total PPE (booked &
Per Books Assessor's Record unbooked)
Land 120,000.00 1,822,060.00 1,822,060.00
Office Building 62,800.99 1,283,090.00 1,283,090.00
Market/Slaughterhouse 256,410.00 256,410.00
Other Structures 55,342.66 11,394,560.00 11,394,560.00
Office Equipment 352,775.57 352,775.57
Furnitures and Fixtures 92,344.68 92,344.68
I.T. Equipment and Software 90,493.00 90,493.00
Agricultural Fishery & Forestry Equipment 3,013,612.00 3,013,612.00
Military/Police Sports Equipment 30,950.00 30,950.00
Other Machineries& Equipment 298,500.00 298,500.00
Motor Vehicles 308,659.00 308,659.00
Other Transportaion Equipment 808,809.65 808,809.65
Other PPE 19,826.50 19,826.50
Construction in Progress 7,741,551.28 7,741,551.28
Total 12,995,665.33 14,756,120.00 27,513,641.68

The failure of Management to conduct the physical inventory precluded the audit
team from verifying the reliability of the year-end balances of PPE accounts. Further, the
whereabouts, and existence of the equipment is doubtful considering that the properties
could not be monitored/located.

Management comment:

During the exit conference, the Management accepted the observation and
commented that they really find it difficult to conduct the inventory since some of the
data are no longer available and nowhere to be found. Despite of this, they promised to
comply with the recommendations and will exert more effort to conduct the inventory for
CY 2015.

Recommendations:

We reiterated our recommendation that the Local Chief Executive shall


require the inventory committee to conduct complete physical inventory of property
to ascertain the validity and correctness of the account balance in the financial
statements and submit a report thereon to the Auditor concerned, in accordance
with Section 124 of the Manual on NGAS, Volume I.

We also recommended that the Local Chief Executive shall require the
Municipal Treasurer and Accountant to maintain and update their property cards
and equipment ledger cards, respectively, to facilitate the inventory taking and
reconciliation between the property and accounting records. Likewise,
Acknowledgement Receipt for Equipment (ARE) should be issued to officials and
employees to pinpoint accountability and responsibility.

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6. Due to absence of Loan Agreement between the Municipality and Land Bank
of the Philippines (LBP), request for relief of accountability for loss caused by
fire of Bus Terminal Building with an assessed value of ₱5,846,030 still could
not be filed contrary to Section 487, Volume I of GAAM, Section 375 and 376
of R.A. 7160 and Sections 54 and 55, Volume I of Manual on New Government
Accounting System, thus, the property could not be recorded and
subsequently dropped from the books.

Custodianship of government property is governed by Section 487 of the GAAM,


Volume I, in consonance with Sections 375 and 376 of R.A. 7160 which states that for
Local Government Units:

“a. Each head of department or office of a province, city, municipality or


barangay shall be primarily accountable for all government property
assigned to his department of office. The person or persons entrusted with
possession or custody of government property under the accountability of any
head of department or office shall be immediately accountable to such officer.

b. Each head of a department or office primarily accountable for government


property may require any person in possession of the property or having
custody and control thereof under him to keep such records and make reports
as may be necessary for his own information and protection.

c. Buildings and other physical structures shall be under the accountability and
responsibility of the provincial or city general services officer of the
municipal mayor or punong barangay, as the case may be.

d. Every officer primarily accountable for government property shall keep a


complete record of all properties under his charge and render his accounts
therefore semiannually to the provincial or city general services officer or the
municipal mayor or punong barangay, as the case may be.”

Moreover, the following provisions on the Manual on NGAS for LGUs, Vol. I
apply:

“Sec. 54 Loss of Cash and Property.- Loss of cash and property may be due to
malversation, theft, robbery or other causes.

xxx.

In case of loss of property due to other causes (theft, force majeure, fire, etc.), a
report thereon shall be prepared by the accountable officer concerned for purposes of
requesting relief from accountability. No accounting entry shall be made but the loss
shall be disclosed in the notes to financial statements pending result of request for relief
from accountability. (emphasis ours)

27
In case the request for relief from accountability for loss of property caused by
fire, theft, force majeure or other causes is granted, a copy of the decision shall likewise
be forwarded to the Chief Accountant for the preparation of the JEV. The loss shall be
debited to the Loss of Assets account and credited to the appropriate asset account. If
request for relief from accountability is denied, the loss shall be taken up as a receivable
from the accountable officer/persons liable and shall be credited to the appropriate asset
account.”

Last June 24, 2013, the bus terminal building owned by the Municipal
Government of Balingoan with an assessed value of ₱5,846,030.00 was razed by fire.
The building was loaned with the Land Bank of the Philippines in 1998 and was fully
paid in 2008.

This is a reiteration of the previous year audit finding in which the Management
failed to file request for the relief of accountability over the damaged property. To date,
no request has been filed due to non-availability of records.

As a result, accountability of the present administration on the damaged property


could not be lifted.

Management comment:

During the exit conference, the management commented that they have already
sent a letter to the Land Bank requesting a copy of the loan agreement between the LGU
and the Land Bank for the said financing of the construction of the Bus Terminal. As of
this writing, the Management is still waiting for the reply.

Recommendations:

We recommended the Management to send a follow up letter to the Land


Bank.
Also, we reiterates our recommendation that the Municipal Accountant shall
book up the value of the building razed by fire and the same shall be included in the
Report of Inventory of Property. Management shall prepare justification citing
among others the reason for the failure to book up and the delay in filing the
request for a relief from property accountability.

Further, we recommended that together with the justification, the


requirements set forth in Chapter 4, COA Handbook on Property and Supply
Management System shall strictly be followed and attached to the request, such as:

 Affidavit executed by the accountable officer stating the following facts:


 Property lost and its valuation
 Actual date in which the absence was first noted
 Manner of disappearance
 Efforts put forth to save the property thru fire

28
 Provisions made to safeguard the property; and
 Date when fire was reported to auditor and the police authorities

 Joint affidavit of two (2) disinterested persons cognizant of the facts and
circumstances about the fire.

 Final police report showing the steps taken by the police authorities to
safeguard the property from the fire and the present status of the case;

 Comments and/or recommendation of the agency head

Procurement

7. Due to the failure of the agency to conduct competitive bidding, purchase


requisitions for the procurement of materials for the three (3) projects totaling
₱568,651.86 charged to 20% Development Fund were split, in violation to
COA Circular No. 76-41 dated June 30, 1076 and Section 54 of R.A. 9184, thus
avoiding public bidding to the prejudice of the interest of the government.

Section 10 of Republic Act No. 9184 provides that all procurement shall be done
through competitive public bidding.

Section 22 of the same Act further provides that shopping maybe resorted to
under any of the following instances:

1. When there is an unforeseen contingency requiring immediate purchase,


provided however, that the amount shall not exceed fifty thousand pesos
(P50,000.00); or
2. Procurement of ordinary or regular office supplies and equipment not
available in the Procurement Service involving an amount not exceeding
two hundred fifty thousand pesos (P250,000.00), provided however, that
the procurement does not result in splitting of contracts.

Review of the Agency’s 20% development fund revealed that three projects
namely Rehabilitation of Barangay Waterworks, Rehabilitation of Sports Center and
Rehabilitation of Multi-purpose building with total appropriations for CY 2014 of
₱1,100,000.00; ₱1,006,000; and ₱450,000.00, respectively, were implemented on a
piecemeal basis circumventing the bidding process. Details are as follows:

29
Purchase of materials for the rehabilitation of the following projects:

Rehabilitation of Barangay Water System Rehabilitation of Sports Center Rehabilitation of multi-purpose building
Date Payee Amount Payee Amount Payee Amount
4/10/2014 centennial Hardware 48,555.00
4/22/2014 E & R Construction supply 13,045.00
5/2/2014 centennial Hardware 47,096.00
5/19/2014 centennial Hardware 47,740.76
5/16/2014 Centennial Hardware 48,665.00
6/13/2014 Hallowcore Hardware 35,597.50
7/22/2014 Centennial Hardware 47,150.00
8/4/2014 E&R Construction Supply 48,330.00
8/27/2014 Centennial Hardware 26,940.00
8/27/2014 Centennial Hardware 7,338.00
11/17/2014 E&R Construction Supply 49,659.00
11/17/2014 Hallowcore Hardware 49,362.00
12/22/2014 E&R Construction Supply 49,200.00
12/22/2014 E&R Construction Supply 49,973.60
TOTAL 82,943.00 203,586.76 282,122.10
***all amounts were gross from withholding tax 568,651.86
Based on the above, piecemeal implementation of projects resulted to splitting of
procurement. It is not only connotes avoiding the bidding process but more so of
disadvantage to the government.

This is a reiteration from the previous year’s audit observation.

Management comment:

The Management promised to abide with the rules and regulations of R.A. 9184
and COA Circular 76-41 and apply the recommendations beginning CY 2015
transactions.

Recommendation:

We recommended to stop the practice of implementing projects on a


piecemeal basis. Also, the rules and regulations on procurement should strictly be
observed. Priorities in project implementations should be set to avoid overlapping of
expenditures that may result to cash shortage and materials could be purchased in
bulk so as not to circumvent the law.

8. The Agency failed to maintain special account and its related subsidiary
ledgers under 20% Development Fund in contrary to Section 105, Volume I
of New Government Accounting System (NGAS) for LGUs thus, adequate

30
information for the utilization and operation of the fund could not be
obtained.

“Sec. 105. Special Accounts in the General Fund. – Local government units
shall maintain special accounts in the General Fund for public utilities and other
economic enterprises, loans, interests, bond issues, and other contributions for specific
purposes; and development projects funded from the share of the local government
concerned from the internal revenue collections and development of national wealth and
such other special accounts which may be created by law or ordinance.

Sec. 106. Objectives for the Maintenance of Special Accounts. – Accounting


procedures for the operation of the special accounts are adopted in order to:

a. Determine whether the income generated by the public utilities or


economic enterprises are sufficient to meet their respective operating
costs.

b. Provide adequate information as to the assets, liabilities and equity of


each special account.

Sec. 107. Special Accounts Subsidiary Ledger. – Special accounts shall be


maintained through the use of complete subsidiary ledger. In case the local government
unit maintains a number of the same economic enterprise, each shall have its own set of
subsidiary ledger (e.g. 8 markets - 8 subsidiary ledgers for the market).

Sec. 108. Sub-codes for the Special Accounts. – The following shall be the sub-
codes for the special accounts:

SPECIAL ACCOUNT SUB-CODE


General Fund Proper 01
Market Operation 02
Slaughterhouse Operation 03
Waterworks System 04
Electric, Light and Power System 05
Telephone System 06
Toll Roads, Bridges and Ferries 07
Transportation System 08
Hospital 09
School 10
Sports Center 11
Recreational Center 12
Housing Projects 13
Convention/Conference Center 14

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SPECIAL ACCOUNT SUB-CODE
Parking Space 15
Ice Plant 16
Cemetery 17
20% Development Fund 18
80% Share from Energy Sources 19
Share from Development of National Wealth 20
Loans 21
Interests 22
Bond Issues 23

Sec. 109. Profit from Operation. – Profits or income derived from the operation
of public utilities and other economic enterprises, after deduction of the cost of
improvement, repair and other related expenses of the public utility or economic
enterprises concerned, shall first be applied for the return of the advances or loans made
therefor, any excess shall form part of the general fund of the local government unit
concerned.

Sec. 110. Reporting. – At the end of the year, post-closing trial balance shall be
prepared for each special account. Also, the following financial statements shall be
prepared:

a. Balance Sheet
b. Statement of Income and Expenses
c. Statement of Cash Flows

These reports shall form part of the schedules of the General Fund trial balance.”

In the submission of reports, we have noted that the agency did not maintain and
submit to the Office of the auditor financial reports for the special accounts of 20%
Development Fund and its related subsidiaries.

Special accounts are created to obtain adequate information as to the operations of


the above enumerated accounts, hence, this was defeated.

Management comment:

During the exit conference, the Management promised to comply with the
recommendations and the accounting office committed to review the Manual of New
Government accounting System for the implementation and creation of the special
accounts in their books.

32
Recommendation:

We recommended the management to maintain and submit to the Office of


the auditor the 20% Development Fund financial reports and its subsidiaries. Also,
monitor properly the utilization and allocation of the fund to achieve the optimum
benefit that could be derived from such fund.

Local Disaster Risk Reduction Management (LDRRM)

9. The Agency failed to transfer the unexpended/unobligated balance of 30%


Quick Response Fund (QRF) of the 5% Calamity Fund and Mitigation Fund
amounting to ₱1,558,866.70_to Special Trust Fund under the account “Trust
Liability-DRRM” in the Trust Fund books contrary to the rules and
regulations set forth in the COA Circular No. 2012-002 dated September 12,
2012 and Section 21 of R.A. 10121, thus funds intended for disaster risk
reduction and management activities of the Local Disaster Risk Reduction and
Management Council (LDRRMC) within the next five years were not retained.

Section 21 of RA No. 10121 provides that the LDRRMF amounting to not less
than five percent (5%) of the estimated revenue from regular sources shall be set aside to
support disaster risk management activities such as, but not limited to the preparedness
programs including training, purchase of disaster response and rescue equipment,
supplies and medicines, for post-disaster activities, and payment of premiums on
calamity insurance.

Item 5.1.10 of COA Circular No. 2012-002 provides that “All


unexpended/unobligated balance of the QRF and the DRRMF-MOOE shall be
transferred to the Special Trust Fund under the account “Trust Liabilty-DRRM”(Code
438) in the Trust Fund Books”.

Further, 5.1.12 states that “the account Trust Liability-DRRM in the Trust Fund
books shall be used to record transfers of the agency’s unutilized QRF and the
NDRRMF-MOOE of the previous years, receipts of NDRRMF, DRRMF from other LGUs
and other sources. Subsidiary ledgers shall be maintained for transfers of agency’s
unutilized DRRMF to the special trust fund by year of transfer, receipts of NDRRMF by
transferring agency, DRRMF from other LGUs by LGU and other sources by donor.

5.1.13 The unutilized balance of the LDRRMF shall be available for use in the
disaster risk reduction and management activities as provided in the LDRRMFIP within
the next five years. Any unutilized amount after five years shall be reverted back to the
unappropriated surplus of the General Fund and shall be made available for other social
services after subsequent enactment by the local sanggunian.

33
5.1.14 Equipment purchased out of the Trust-Liability-DRRM funds shall be
recorded in the Trust Fund books and shall be transferred to the General Fund upon
issuance of the equipment to the end user.

5.1.15 The LDRRMFIP shall be reviewed and updated annually to include the
activities to be funded from the unexpended QRF and DRRMF-MOOE of the previous
years which were transferred to the Special Trust Fund.

Finally, 5.1.16 states that “the amount and details of the unexpended balance of
LDRRMF shall be discussed in the Notes to Financial Statements.

These guidelines were also stressed under Joint Circular No. 2013-1 dated March
25, 2013 of NDRRMC, DBM and DILG as indicated below:

6.4 The unexpended LDRRMF shall accrue to a special trust fund solely for the
purpose of supporting disaster risk reduction and management activities of the LDRRMC
within the next five (5) years.

6.5 The unexpended balances of the LDRRMF may be released and utilized for
new expenditure items upon submission of a revised AIP as approved by the local
sanggunian and Local Chief Executive (LCE) upon recommendation of the LDRRMC in
accordance with the approved LDRRMP.

Unaware of the regulation, the Agency failed to maintain and transfer its
unexpended/unobligated 30% Quick Response Fund (QRF) and Mitigation Fund (MF) to
Trust Fund Books under the account Trust Liability-DRRM. Interview with the
Municipal Treasurer revealed that just recently they were able to apply for a bank account
so that the balance of the unexpended 5% Calamity fund will be transferred and deposited
to another bank account under Trust Fund Books.

Failure of the agency to maintain and transfer the above fund to Trust Fund Books
under the account Trust Liability-DRRM will pose a threat for the fund to be used other
than its intended purpose.

Management comment:

The management accepted the observation and promised to comply with the
recommendation.

Auditor’s rejoinder:

Upon submission of the CY 2014 Financial Statements on February 23, 2015 , it


was found out that the previous years’ balance of the LDRRMF was not reflected neither
under the General Fund nor Trust Fund Books.

34
Recommendation:

We recommended for the transfer of the unexpended/unobligated balance of


the QRF and MF to its proper account under Special Trust Fund account.

We also recommended to record the above fund under the Trust Fund
Books.

Submission of Accounts/Reports

10. Due to the continued failure of the management to submit to the Office of the
Auditor the Monthly Trial Balances, Paid vouchers, Receipts, Liquidations,
Bank Reconciliations, Financial Statements and other pertinent reports within
the reglementary period in contrary to Section 70, Volume I of the New
government Accounting System (NGAS), COA Circular No. 96-011 and
Section 122 of P.D. 1445, timely review and verification could not be obtained.

Pertinent provisions of the NGAS Manual, Volume I, states as follows:

Sec. 70. Pre-Closing Trial Balance. – The pre-closing trial balance is the trial
balance prepared from the general ledger accounts after the adjusting journal entries have
been journalized and posted. This is also termed as adjusted trial balance.
Monthly pre-closing trial balance for each fund shall be submitted not later than
the twentieth day after the end of the month. It shall be supported by the Status of
Appropriations, Allotments and Obligations, for both the current and continuing
appropriations.

These reports shall be submitted to the following:

COA Unit Auditor – Original copy


Local Sanggunian – 1 copy
Local Treasurer – 1 copy
Local Accountant – 1 copy

The trial balance at the end of the quarter shall also be supported by a schedule of
subsidiary ledger balances of the controlling accounts in the General Ledger and an
additional copy shall be submitted to the COA Regional Office thru the Unit Auditor.

Provisions of COA Circular No. 96-011 dated October 2, 1996 states as follows:

“Section 3.2 – The Local Accountants shall within ten (10) days from receipt of
the Bank Statements (BS) reconcile the same with the General Ledger (GL) and prepare
the Bank Reconciliation Statements (BRS) in five copies, distributed as follows: xxx
Duplicate –Provincial/City/Municipal Auditor xxx”

35
While Section 122 of the State Audit Code of the Philippines, P.D. 1445 states
that:

“Whenever deemed necessary in the exigencies of the service, the Commission


may under regulations issued by it require the agency heads, chief accountants, budget
officers, cashiers, disbursing officers, administrative or personnel officers, and other
responsible officials of the various agencies to submit trial balances, physical inventory
reports, current plantilla of personnel, and such other reports as may be necessary for
the exercise of its functions. (2) Failure on the part of the officials concerned to submit
the documents and reports mentioned herein shall automatically cause the suspension of
payment of their salaries until they shall have complied with the requirements of the
Commission. (3) No appropriation authorized in the General Appropriations Act shall be
available to pay the salary or any official or employee who violates the provisions of this
section, without prejudice to any disciplinary action that may be instituted against such
official or employee.”

Review of the Agency’s submission of paid vouchers and Trial Balances revealed
that late submission to the Office of the Auditor ranges from 3 to 5 months. Moreover,
January to August 2014 bank reconciliation statements were submitted only last January
21, 2015, while 2012 and 2013 bank reconciliation statements were not submitted as of
this writing, hence this reiteration.

In view of the above, delayed submission of the above reports accordingly affects
the timely review and verification of transactions that could also affect the decision
making of the management.

Management comment:

Management accepted this observation and promised to try their best to submit
the 2013 BRS and succeeding trial balance and related reports within the reglementary
period.

Recommendation:

We recommended the management to strictly observe the reglementary


period of submission so that timely review and verification could be obtained and
relevant decision making will be achieved.

11. The Bids and Award Committee (BAC) still failed to submit the Procurement
Monitoring Report to the GPPB in violation to the provision of Section 12.2 of
the Implementing Rules and Regulations (IRR) of RA 9184, thus review,
evaluation and monitoring of procurement activities of the agency could not be
undertaken hence, defeating the purpose of the law.

36
Section 12.2 of the Revised Implementing Rules and Regulations of R.A.
9184 provides that:

“The BAC shall be responsible for ensuring that the procuring entity abides by
the standards set forth by the Act and this IRR, and it shall prepare a procurement
monitoring report in the form prescribed by the GPPB. The procurement
monitoring report shall cover all procurement activities specified in the APP,
whether ongoing and completed, from the holding of the pre-procurement
conference to the issuance of notice of award and the approval of the contract,
including the standard and actual time for each major procurement activity. The
procurement monitoring report shall be approved and submitted by the Head of
the Procuring Entity to the GPPB in printed and electronic format within fourteen
(14) calendar days after the end of each semester.”

Inquiry of the status of implementation regarding the previous year’s audit


recommendation revealed that the management still not able to prepare and submit to
GPPB the Procurement Monitoring Report after the end of each semester, hence, the
purpose for which the policy created was defeated.

Management comment:

We have discussed this finding during the exit conference, and the management
commented that they failed to comply with the recommendation for this previous year’s
observation due to lack of knowledge in the preparation of the same, hence this
reiteration.

Recommendation:

We recommended that the BAC will attend seminars conducted with the
GPPB so that they can gain more knowledge and know how to prepare the
Procurement Monthly Report.

12. Due to absence of proper control and monitoring of fuel consumption, various
deficiencies/error were committed that are contrary to the rules and
regulations under COA Circular No. 77-61 dated September 26, 1977, thus,
reasonableness of fuel consumption amounting to ₱701,273.24 could not be
determined.

Specific rules and regulations of COA Circular No. 77-61 provides that:

1. All government motor vehicles shall be used exclusively and strictly for
official business.
- The use of government motor vehicles for private social
functions such as receptions, balls, theatres, and for other
personal purposes is absolutely prohibited. Likewise, use

37
thereof by the spouses, children, relatives, friends, etc. of the
officials entitled thereto, even if they are in the company of
said officials, is strictly prohibited.
- Government motor vehicles shall not be used for fetching
officials or employees from home to office or vice-versa,
unless specifically authorized from the Office of the President.
- Use of government vehicles by local government officials is
governed by Executive order no. 31, series of 1954.
Specifically, they are entitled to government transportation
from residence to office and vice-versa and in connection with
civic and semi-official activities beneficial to the public interest
such as the conduct of drives for voluntary contributions for
charitable purposes, attendance at public function, and others
of similar nature, in view of their duties and responsibilities
and their official and social standing in their communities.
2. Use of government vehicles shall be properly controlled and regulated.
- The use of government motor vehicles should be controlled
through properly accomplished and duly approved Driver’s
Trip Tickets (Appendix A) which should be serially numbered,
a summary of which shall be made at the end of the month in a
Monthly Report of Official Travels (Appendix F), for audit
purposes.
3. Fuel Consumption of government motor transportation shall be properly
controlled and accounted for through approved Requisition and Issue
Voucher or equivalent.
4. Monthly Report of Fuel Consumption of government motor transportation
shall be submitted to the Auditor for verification purposes to determine the
reasonableness of fuel consumed during the period.
- In the determination of the quantity of gasoline required for
each motor vehicle for each trip, all personnel concerned shall
be guided by the average minimum and maximum gasoline and
oil consumption of the different types of motor vehicles. An
allowance of 10% may be tolerated.
5. No official who has been granted transportation allowance by any
government office shall be allowed to use government motor
transportation.
6. All expenses regarding any unauthorized use or misuse of government
motor transportation shall be disallowed in audit. Accordingly, the
officials and employees, including drivers responsible thereof, shall be
held personally liable for the expenditures arising therefrom, in addition to
administrative, criminal or civil prosecutions as may be warranted by the
circumstances, including the withdrawal of the privilege to use
government transportation.
7. In addition, no disbursement voucher for fuel consumption (gasoline and
oil) of government vehicles shall be allowed in audit unless duly
supported by properly accomplished and approved serially numbered

38
driver’s trip tickets, and that the government vehicles involved are plainly
marked “For Official Used Only” and bear government plates only with
the exception of security vehicles exempt from using government plates.
8. Significant findings on excessive fuel consumption of government motor
transportation as well as misuse thereof should be reported immediately to
the COA thru the Regional Director/ Manager by the Auditor concerned.
Said findings should also be included in the annual audit report.

While item f of the specific audit procedures states that “see that under no
circumstances should fuel be issued to privately owned motor vehicles.”

Meanwhile, under D. Forms, Records and Reports, item 6 and 7 provides that:

6. At the end of the month, a Monthly Report of Official Travels (Appendix


F) shall be prepared by the driver concerned summarizing in chronological
order his trips for the month. For each vehicle, one report shall be
prepared monthly. The report shall be certified by the driver and approved
by the Administrative Officer.

It shall be prepared in three copies to be distributed as follows:

Original Auditor (thru Chief Accountant)


Duplicate Administrative Officer or equivalent
Triplicate File

7. Monthly, a Report of Fuel Consumption (Appendix G) shall be prepared


and submitted by the Agency personnel concerned to the Auditor for
verification purposes. The report shall show among others, the different
types of motor vehicles utilized by the agency during the month, total
distance traveled, total fuel used and the normal fuel consumption for each
vehicle. The report to be prepared in three copies by the Agency personnel
concerned shall be verified by the Auditor. Copies shall be distributed as
follows:

Original COA Regional Director


Duplicate Audit for audit purposes
Triplicate Agency file

Further, Section 361 of the Government Accounting and Auditing Manual


(GAAM) Volume I, monthly report of Fuel Consumption of government motor
transportation shall be submitted to the auditor within the first ten (10) days of the
succeeding month by the Chief, General Services Division or equivalent.

Audit of municipal transactions for CY 2014 in relation to fuel consumption


revealed the following deficiencies/error due to absence of proper control and
monitoring.

39
a. Gasoline reimbursement was processed and paid despite used by privately
owned vehicle.

b. Driver’s Trip Ticket were not serially numbered and properly


accomplished.

c. Non-preparation and submission of monthly Report of Official Travels.

Further, below are the partial lists of payments made for reimbursements to
payees despite using their privately owned vehicle.

Date Check No. Payee Amount Purpose

1/13/2014 2435590 Hon. Theodore I. Baja 600.00 attend kuyamis festival jan. 8-10, 2014 (no date of receipt)
2/13/2014 2435785 Agosto Mercado 1,500.00 conference w/ gov. emano dtd 2/14/14
2/25/2014 2435880 Hon. Richard P. Gepte 1,000.00 official business at Provincial capitol
3/24/2014 2436067 Hon. Richard P. Gepte 1,000.00 official business at SP office 3/13/14
4/3/2014 2436123 Hon. Richard P. Gepte 1,500.00 official business at SP office 3/19/14
Transact official business at SP Office dated May 8 & 16,
6/3/2014 2436471 Hon. Theodore I. Baja 2,000.00 2014
6/6/2014 2436494 Hon. Theodore I. Baja 1,500.00 Attend PCL Provincial Federation Officers dtd 5/28/14

6/10/2014 2436516 Hon. Theodore I. Baja 1,500.00 Transact official business with Atty. Banaag June 7, 2014

6/10/2014 2436528 Hon. Richard P. Gepte 1,200.00 To follow-up resolutions at SP office & PDEA (no receipt)
11,800.00

This is a reiteration of the previous year audit observation for non-preparation and
submission of Monthly Report of Fuel Consumption and Official Travels

Based on the foregoing, validity, propriety and reasonableness of fuel


consumption could not be determined.

Management comment:

The management commented that they were unaware of the regulation. They
accepted the observation and promise to comply with the recommendations for CY 2015.

Recommendation:

We recommended to instruct the Supply Officer and designated Driver to


prepare diligently the required Monthly Report of Fuel Consumption and Monthly
Report of Official Travels, respectively, as required under the existing rules and
regulation. No issuance of fuel or reimbursement of the same shall be made without
accomplishing the driver’s trip tickets properly.

40
Value-for-Money Audit

13. Improper charging of electrical wirings and payroll expenses to Rehabilitation


of Bus Terminal Building project in the total amount of ₱228,824.00 contrary
to the provisions stipulated in the DILG and DBM Joint Circular No. 2011-1
dated April 13, 2011 deprived the constituents of the Municipality of the
immediate benefit that could be obtained from the mandated developmental
programs and projects.

Section 287 of RA 7160 requires that each local government unit shall
appropriate in its annual budget no less than 20% of its annual internal revenue
allotment for development projects.

DILG and DBM Joint Memorandum Circular No. 2011-1 provides the Guidelines
on the Appropriation and Utilization of the 20% of the Annual IRA for Development
Projects. It stresses the objectives of the 20% Development Fund which is to enhance
transparency and accountability of LGUs in undertaking the social and economic
development projects as well as the environmental management projects which address
and respond to natural and man-made disasters and calamities as embodied in the duly
approved local development plan directly supporting the Medium-Term Philippine
Development Plan and Medium-Term Public Investment Program

Under Item 3.0 of the above circular, the 20% of the IRA intended for
development projects may be utilized for the following priority programs and projects:

3.1 Social Development

3.1.1 Construction or rehabilitation of health centers, rural health


units or hospitals, and purchase of medical equipment;

3.1.2 Construction or rehabilitation of local government-owned


potable water supply system;

3.1.3 Establishment or rehabilitation of Manpower Development


Centers;

3.1.4 Construction or rehabilitation of Evacuation Centers;

3.1.5 Purchase or repair of area-wide calamity related alarm or


warning system;

3.1.6 Rehabilitation of cultural/historical sites;

41
3.1.7 Purchase or repair of appropriate calamity-related rescue
operations equipment such as inflatable boats, breathing
apparatus, extraction tools, safe line rescue ropes, fire
extinguishers, chainsaws, two(2) way handheld radios and
the like;

3.1.8 Purchase and development of land for the relocation of


informal settlers and relocation of victims of calamities;

3.1.9 Construction or rehabilitation of facilities such as multi-


purpose hall intended to cater out-of-school youths,
women, senior citizens , minors displaced families,
indigenous people and differently-abled persons; and

3.1.10 Installation and maintenance of street lighting system except


payment of electric bills.

3.2 Economic Development

3.2.1 Construction or rehabilitation of communal irrigation or


water impounding system and purchase of post harvest
facilities such as farm or hand tractor with trailer, thresher
and mechanical driers;

3.2.2 Construction or rehabilitation of local roads or bridges and


purchase of appropriate engineering equipment such as
dump trucks, graders and pay loaders;

3.2.3 Capital expenditures related to the implementation of


livelihood or entrepreneurship/local economic development
projects; and

3.2.4 Amortization of loans used to finance development projects


cited in this Joint Circular, subject to the 20% debt service
cap.

3.3 Environmental Management

3.3.1 Reforestation and urban greening;

3.3.2 Construction or rehabilitation of sanitary landfills, material


recovery facilities and purchase of garbage trucks and
related equipment;

42
3.2.3 Implementation of flood and erosion control projects such as
rehabilitation and construction of drainage system, de-silting
of rivers, de-clogging of canals; and

3.2.4 Other environmental management projects that promote air


and water quality as well as productivity of the coastal or
freshwater habitat, agricultural land and forest land.

While Item 4.0 provides the expenditure items not covered. The following
expenses are not related to and/or not connected with the implementation of development
projects, programs and activities that shall not be paid out of the 20% development fund:

3.1 Administrative expenses such as cash gifts, bonuses, food


allowance, medical assistance, uniforms, supplies, meetings,
communication, water and light, petroleum products and the like;
4.2 Salaries, wages or overtime pay;
4.3 Travelling expenses, whether domestic or foreign;
4.4 Registration or participation fees in training, seminars, conferences
or conventions;
4.5 Construction, repair or refinishing of
administrative offices;
4.6 Purchase of administrative office furniture, fixtures, equipment or
appliances; and
4.7 Purchase, maintenance or repair of motor vehicles or motor cycles.

Moreover, Item 5 of the same Joint Circular sternly reminded the local chief
executives of their responsibilities:

“ Responsibility of the Local Chief Executive. It is the responsibility of every


Provincial Governor, City and Municipal Mayor and Punong Barangay to ensure
that the 20% of the IRA is optimally utilized to help achieve desirable socio-
economic development and environmental outcomes. The appropriations for
development projects shall not include items for personal services and those
mentioned in the immediately preceding Item No. 4 hereof. Further, all concerned
LCE are hereby reminded that utilizing such fund, whether wilfully or through
negligence, for any purpose beyond those expressly prescribed by law or public
policy shall be subject to the sanctions provided under the Local Government
Code and under such other applicable laws.”

Review of the projects implemented by the Agency revealed that ₱3,500,000.00


was appropriated out of 20% Development Fund for the Rehabilitation of Balingoan Bus
Terminal which was implemented by contract with CDY Builders & General
Merchandise in the amount of ₱3,203,904.11.

Upon verification, aside from the payments made to the contractor, disbursements
totaling ₱228,224 were charged against the appropriations of the said project. Per inquiry,

43
these expenses were salaries of their job-order employees and purchases of electrical
materials for generator set charged against the ‘savings’ derived from the difference
between the appropriated amount and the contract price. Details are as follows:

Rehabilitation of Bus Terminal Building


Date Payee Amount Nature of Payment
9/15/2014 Rambo Clam, et. Al 14,500.00 9/1-15/14 payroll
9/29/2014 Dario Sabanto et. Al 18,000.00 9/16-30/14 payroll
10/15/2014 Teoducio Gasque, Jr. et. Al 16,000.00 payroll
10/15/2014 Vergilio Mamba 8,400.00 payroll
10/27/2014 Teoducio Gasque,Jr. et. Al. 15,000.00 payroll
11/11/2014 Dario Sabanto et. Al 18,000.00 11/1-15/14 payroll
11/11/2014 Edgardo Cabresos et. Al 5,750.00 11/1-15/14 payroll
11/11/2014 Israel Dura, et al. 6,500.00 11/1-15/14 payroll
11/26/2014 Dario Sabanto et. Al 18,000.00 11/16-30/14 payroll
12/2/2014 Rolly Dahung et.al 6,000.00 11/16-30/14 payroll
12/8/2014 Vergilio Mamba 3,000.00 11/16-30/14 payroll
12/16/2014 Edgardo Cabresos et. Al 11,500.00 12/1-31/14 payroll
12/16/2014 Rambo Clam, et. Al 18,250.00 12/1-31/14 payroll
12/22/2014 Rolly Dahung et.al 12,750.00 12/1-31/14 payroll
Total payroll 171,650.00

11/8/2014 BS Electrical 8,408.00 electrical materials for generator set


12/17/2014 Hollowcore Hardware 48,766.00 electrical materials for generator set
Total materials 57,174.00

GRAND TOTAL 228,824.00


While it is true that there is ‘savings’ derived between the amount appropriated
and the amount of contract, there was no approved resolution by the sanggunian of
realigning the saving under the 20% Development Fund project.

Had this fund been optimally utilized to finance priority development


projects/activities, the constituents of the Municipality could have benefited from it.

Management comment:

The management accepted the observations and will comply with the
recommendations.

Recommendation:

We recommended management to justify the disbursements made and to


stop the practice of charging to 20% Development Fund programs, projects and

44
activities that are not in accordance with the policies and guidelines set on the
utilization of fund in order to maximize the benefits that can be derived from the
fund.

Also, we recommended the Local Chief Executive to ensure strict utilization


of the fund in accordance with the guidelines to avoid subsequent disallowances in
audit.

14. Due to the absence of proper monitoring of its obligations, the Agency incurred
unnecessary surcharges in relation to its payment of electricity for the entire
municipality amounting to ₱21,043.21, thus, denied its constituents from the
basic services that could be funded from such amount.

COA Circular No. 2012-003 dated October 29, 2012 provides the Updated
Guidelines for the prevention and disallowance of Irregular, Unnecessary, Excessive,
Extravagant and Unconscionable expenditures.

Under the definition of Unnecessary expenditures of the above circular, the term
pertains to the expenditures which could not pass the test of prudence or the diligence of
a good father of a family, thereby, denoting non-responsiveness to the exigencies of the
service. Unnecessary expenditures are those not supportive of the implementation of the
objectives and mission of the agency relative to the nature of its operation. This would
also include incurrence of expenditures not dictated by the demands of good government,
and those the utility of which cannot be ascertained at a specific time. An expenditure
that is not essential or that which can be dispensed with without loss or damage to
property is considered unnecessary. The mission and thrust of the agency incurring the
expenditures must be considered in determining whether or not an expenditure is
necessary.

Item 12 of Section 474 of Local Government Code of 1991 provides that one of
the duties of the accountant is to “prepare journals and the analysis of obligations and
maintain and keep all records and reports related thereto”

Moreover, according to the dictionary, surcharge means to make somebody repay


from personal funds any losses stemming from negligence or intentional mismanagement
of a fiduciary responsibility.

We have audited the Municipality’s transaction from January to October 2014


(last submission as of this writing), and noted that the Agency incurred additional
expenses for surcharges amounting to ₱21, 043.21 because of late payments of its
monthly obligation with Moresco II in relation to its electricity under the Municipality’s
jurisdiction.(Annex F)

In view of the above, the said surcharges is considered unnecessary and could
have been avoided should proper monitoring was observed, thus, denied the

45
municipality’s constituents with the basic services that could be funded from such
amount.

Management comment:

The Management commented that delayed payments were due to delayed


distribution of the billing statements by the Moresco II.

Recommendation:

We recommended to instruct the Municipal Accountant to properly monitor


its monthly obligations to avoid unnecessary expenses such as penalties and
surcharges and make representations with MORESCO regarding their delayed
distribution of bills which cause the delayed payments.

Further, we also recommended to charge against the person responsible of


the delay the above surcharges, being personal in nature.

15. Due to inaction by the Municipal Accountant Designate, subsidiary ledgers


for most of the accounts for CY 2014 are still not maintained contrary to the
provision of Section 10 of MNGAS Volume II, thus the accuracy, and
correctness of the recorded balances in the books of accounts could not be
ascertained.

Section 10 of Manual on MNGAS, Volume II states that “the Subsidiary Ledger


is a book of final entry containing the details or breakdown of the balances of the
controlling account appearing in the General Ledger. Posting to the subsidiary ledger
generally come from the source documents. The total subsidiary ledger balances shall be
reconciled to their respective control account at the end every month.”

Verification disclosed that the Municipal Accountant still did not maintain
subsidiary ledgers for most of its accounts of all funds.

Despite the commitment made in the previous recommendation, the Municipal


Accountant-designate still did not maintained the subsidiary ledgers contrary to the above
provisions.

Thus, the accuracy, validity and correctness of the amounts appearing in the
Financial Statements could not be determined.

Management comment:

In the exit conference conducted on February 20, 2015, the Management agreed
and accepted our observation and promised to comply with the recommendation.

46
Recommendation:

We reiterated that the Municipal Accountant Designate should maintain


subsidiary ledgers to ensure accuracy and correctness of bookkeeping/recording
and posting therein should be updated and reconciled with the general ledgers
regularly/monthly. Whenever there is shifting of positions or resignation and
personnel movements in the Agency, there should be proper and complete turnover
of accountabilities and records.

Gender and Development (GAD) ;

During the year, the Municipality of Balingoan appropriated the amount of


₱30,000.00 for Gender and Development (GAD) related activities.

The amount specifically allocated for GAD was not in accordance with the
required amount as provided for under Section 2.5 of DBM and NEDA Joint Circular No.
2001-1 dated August 15, 2001, however, information gathered revealed that several
GAD-related programs and projects were provided yet these were not shown specifically
under the GAD Program but reflected in various departments particularly on health and
social services, as well as in the Non-Office Lump-sum appropriation.

The focal person for GAD is the Municipal Social Welfare and Development
Officer who is in-charge of the proper implementation of GAD-related activities of the
municipality.

Status of Suspensions, Disallowances and Charges

16. Due to inaction by Management, Receivables for Disallowances/Charges


account reflected in the CY 2014 Financial Statements totaling P242,549.36
remained unsettled in violation to Section 37 and 112 of PD 1445, thus
collectability and propriety of this account is doubtful.

Sections 37 and 112 of Presidential Decree 1445, provides that:

“Section 37. Retention of money in satisfaction of the indebtedness to the


government-when any person is indebted to any government agency, the Commission
may direct the proper officials to withhold the payment of any money due such person or
his estate to be applied in satisfaction of his indebtedness.

Section 112. Each government agency shall record its financial transactions and
operations conformably with generally accepted accounting principles in accordance
with pertinent laws and regulations.”

47
Likewise, Section 64, Volume I of Government Accounting and Auditing
Manual, provides:

“Each accounting unit with accounts receivables shall keep one or more
subsidiary ledgers showing, for customers or other types of debtors the amounts due and
received from them and the balances of their accounts. These subsidiary records shall
support the general ledger control account.

Quarterly, each agency accounting unit shall prepare a statement scheduling


overdue accounts receivable. The agency head, or his authorized representative, shall
review and sign this statement as an indication that he has instituted, or will institute,
action for their collection.”

Review of the comparative CY 2014 Financial Statements, disclosed that the


balance of the Receivables for Disallowances/Charges remained the same despite the
commitment of the management to comply with the recommendation of the previous
audit observation.

These long overdue Receivables-Disallowances/Charges have occurred due to


the failure of the Municipal officials concerned to demand payment from identified
debtors at the earliest time from its occurrence.

The existence of this receivable account in the books for several years distorted
the presentation of the financial statement as it formed part of the asset of the
Municipality, yet, the propriety and collectability of this accounts are uncertain. If these
receivables were collected, it could either be used for more programs/projects/activities
geared toward public welfare, or for payment of long-term liabilities.

While the audit suspensions, disallowances and charges found in the examination
of various transactions for all funds and the corresponding settlements made by
management for CY 2014 are as follows:

Balance, CY 2014 Balance,


CY 2013 Settlement
12/31/2013 Issuances 12/31/2014

Prior to December 31, 2010 (COA Memo 2009-084)


With Final Order of Adjudication and/or COA Order of Execution (COE)

n/a
Disallowances 0.00 n/a n/a

48
Those without Final Order of Adjudication and/or COA Order of Execution (COE)

Suspensions P198,893.92 521,558.00 0.00 P720,451.92

Disallowances P469,484.24 162,443.88 0.00 P631,928.12

Charges 0.00 0.00 0.00 0.00

Upon affectivity of COA Circular No. 2009-006 (RRSA – Rules and Regulations on
Settlement of Accounts)

Suspensions 0.00 0.00 0.00 0.00

Disallowances 0.00 0.00 0.00 0.00

Charges 0.00 0.00 0.00 0.00

Management comment:

The Management agreed and accepted this observation but could not locate the
documents pertaining to the above disallowances/charges. Further, absence of subsidiary
ledger made it more difficult to deduct the same to the persons liable.

Recommendation:

We reiterated our recommendation that the Local Chief Executive to act


assertively on the disallowances issued and enforce the immediate refund of the said
disallowances considering the loss of government funds was already incurred.
Tolerating delayed refunds would further contribute to additional loss of
government funds. In addition, Municipal Accountant shall prepare Subsidiary
Ledger for this account for future transactions to facilitate sending of demand
letters to individual concerned pursuant to Section 64, Volume I of Government
Accounting and Auditing Manual.

49
STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT
RECOMMENDATIONS

Out of thirty one (31) audit recommendations stated in the CY 2013 Annual Audit Report
five (5) were fully implemented, nine (9) were partially implemented while the other
seventeen (17) remained unimplemented.

Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
1. Due to unsound fiscal We recommended that the The Not
administration and laxity in Municipality shall establish a accounting Imple-
monitoring the agency good monitoring system to office will mented
funds, the cash balance of prevent the incurrence of cash comply with
No BRS for
the Municipality’s General deficiency/overdraft. For the
CY 2012 &
Fund, Trust Fund and effective and transparent recommenda
2013 were
Special Education Fund as management, closely tion.
submitted
of December 31, 2013 of P coordinate with the budget
P2,666,891.00 was not officer, the accountant, the Reiterate
sufficient to back up the treasurer, and the heads of d in this
total current payables and divisions thru regular Report
funds entrusted for specific meetings, consultations or
purpose totaling dialogue.
P10,246,831.36 in violation
to Section 4(3) and Section We also recommended to
84(2) of PD 1445 and regularly monitor cash in bank
Section 337 of R.A. 7160 balances to ensure that there is
resulted in a cash sufficient cash to cover all trust
deficiency of liabilities before any
P7,579,940.36 thus, disbursement could be made.
implementation of projects
could not be undertaken Further, we recommended that Not
and payment of current management adopt economy imple-
obligations is deferred. and austerity measures in its mented
operations and refrain from
any unwarranted
disbursements.

50
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion

2. The accuracy and validity We recommended to fast tract The agency


of the Cash in Bank the submission of the 2012 and will comply
accounts totaling 2013 Bank Reconciliation with the
P2,648,263.38 could not be Statements (BRS) of all recommenda
ascertained due to the depository accounts to the tion.
inability of the Municipal Office of the Auditor pursuant
Accounting Department, to to COA Circular No. 96-011 The
prepare and submit the dated October 2, 1996. Require accountant
correct 2012 and 2013 the Municipal Accountant to was able to
Partially
Bank Reconciliation submit for verification the submit the
impleme
Statements contrary to monthly BRS within ten (10) January to
nted
provisions of COA Circular days after the end of each August
No. 96-011. month together with the paid 2014 BRS
checks and original copies of on January
the debit/credit memos. 21, 2015

We recommended to direct the


Accountant to constantly
supervise the clerk in-charge of
preparing the BRS. Train
another accounting staff on how
to prepare the BRS to enable
the submission of the same in
the absence of the clerk.

3. Due to laxity in We recommended that the Deposits Partially Full


implementing the collectors shall be directed to were made impleme implementat
regulation, collections were remit their collections on a weekly nted ion is still
not remitted intact daily or regularly and daily as required basis subject for
not later than the next under existing regulations to verification
working day ranging from 2 avoid possible losses/misuse of due to
to 230 days, contrary to the funds. delayed
provision of Section 15, 29 submission
and 30 of the NGAS of receipts
Manual, hence, exposing and related
the collections to the risk of reports.
loss/misuse of government
funds.

51
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion

4. Due to the non filling up of We recommended that the Property Appraisal


Partially
the Municipal Accountant Municipal Mayor shall create records committee
impleme
item and the changes in an Appraisal Committee to could not be was created
nted.
personnel, proper recording appraise the unrecorded located. but still not
of Assets such as Donated properties based on the Coordinatio functioning.
Lands and constructed available Assessor’s n with the
Buildings in the total documents. Likewise, after the Municipal
assessed value of appraisal, the Municipal Assessor is
P14,756,120.00 were not Accountant –Designate shall on-going
booked up in the books of book up the unrecorded
accounts, in violation to properties in the books of
Section 63 of PD 1445 accounts.
thus, resulting to the
understatement of Land We also recommended the Position for
Unimple
(201), Office Buildings hiring and filling up of the Municipal
mented
(211), Market and Municipal Accountant in order Accountant
Slaughter house (214), to facilitate proper accounting still
Other Structures (215) and records and reports. unfilled.
of Government Equity
(501) accounts and the Also require the General
financial statement is not Services Officer to register or
fairly presented. secure Transfer Certificate of
Titles for all lands acquired by
Unimple
the Municipality at the Office
mented
of the Registry of Deeds,
Region 10, Cagayan de Oro
City

5. Unaware of the accounting We recommended that the Reiterated Not Inaction by


policy, the Municipal Municipal Accountant- in this impleme managemen
Accountant-Designate Designate be required to report nted t
failed to recognize compute the depreciation
depreciation expense in the expense to properly reflect the
books contrary to the income for the period.
provisions of the New Moreover, depreciation
Government Accounting schedule should be made to
System or NGAS for LGU, monitor the same. All previous
resulting to understatement depreciation expenses not
of the expense and recognized should also be

52
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
accumulated depreciation computed and adjusting entry
account with corresponding should be made with a debit to
overstatement of the Prior Year adjustment and
balance sheet and statement credit to Accumulated
of income, thus, rendering Depreciation.
an unreliable financial
statements.

6. Physical Inventory of We reiterated our Reiterated in


Property, Plant and recommendation that the Local this report
Equipment totaling Chief Executive shall require
P11,707,221.76 as of the inventory committee to
December 31, 2013 was conduct complete physical
not conducted; no inventory of property to Inaction by
reconciliation was made; ascertain the validity and not
managemen
and Property/ Equipment correctness of the account impleme
t
Ledger Cards (PLEC) and balance in the financial nted
Property/ Equipment Cards statements and submit a report
(PC) are still not being thereon to the Auditor
maintained contrary to concerned, in accordance with
Section 124 and 114 Section 124 of the Manual on
paragraph 2 and 3 of the NGAS, Volume I.
Manual on the New
Government Accounting We also recommended that
System (MNGAS) for the Local Chief Executive
Local Government Units shall require the Municipal
(LGUs), Volume I; thus, Treasurer and Accountant to
the validity, propriety, maintain and update their Inaction by
existence and whereabouts property cards and equipment not
managemen
could not be ascertained ledger cards, respectively, to impleme
t
and correctness of the facilitate the inventory taking nted
account is doubtful. and reconciliation between the
property and accounting
records. Likewise,
Acknowledgement Receipt for
Equipment (ARE) should be
issued to officials and
employees to pinpoint
accountability and
responsibility.

53
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion

7. Due to unavailability of We recommended that the Reiterated in


accounting and property Municipal Accountant shall this report
records, request for relief book up the value of the
from property building razed by fire and the
accountability on the same shall be included in the
damaged terminal building Report of Inventory of
caused by fire with an Property. Management shall
assessed value of P prepare justification citing
5,846,030 could not be among others the reason for
filed and sought contrary the failure to book up and the
to Section 487 of GAAM, delay in filing the request for a
Volume I, in consonance relief from property
with Section 375 and 376 accountability.
of R.A. 7160 and Sections
54 and 55, Manual on New Further, we
Government Accounting recommended that together
System, Volume I, thus, a with the justification, the
loss of government requirements set forth in
property. Chapter 4, COA Handbook on Not
Absence of
Property and Supply impleme
records
Management System shall nted
strictly be followed and
attached to the request, such
as:

 Affidavit executed by the


accountable officer stating
the following facts:
 Property lost and its
valuation
 Actual date in which
the absence was first
noted
 Manner of
disappearance
 Efforts put forth to
save the property thru
fire
 Provisions made to

54
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
safeguard the property;
and
 Date when fire was
reported to auditor and
the police authorities

 Joint affidavit of two (2)


disinterested persons
cognizant of the facts and
circumstances about the
fire.

 Final police report


showing the steps taken by
the police authorities to
safeguard the property
from the fire and the
present status of the case;

 Comments and/or
recommendation of the
agency head

8. Due to piecemeal We recommended that Management


implementation of projects, shall identify their priority project for Not
construction materials in implementation on a quarterly basis imple- Projects
the total amount of or as soon as the fund is sufficient to mented were still
P1,172,915.12 for use of finance a certain project so that
implemente
construction materials shall be
various infrastructure . d on a
purchased in bulk and through
projects were procured piecemeal
competitive public bidding. Stop the
through shopping instead practice of implementing project on a
basis
of competitive public piecemeal basis.
bidding in violation to
Republic Act 9184 thus,
prices most advantageous
to the government could
not be obtained.

9. Failure of the agency to We recommended that Submitted Fully Late


submit complete supporting Management shall strictly already as of impleme submission
documents on the payments comply on the proper this writing nted

55
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
of the contract on the documentation on the
Concreting of Kauswagan- procurement of various
Mapua Road ; the infrastructure projects and all
purchased Mini Dump other disbursements to support
Truck in the amount of the propriety of these
P2,462,500.00 and transactions. Also, adherence
P600,000.00, and other with the provisions of RA
disbursements paid in 9184 relative to the
violation to RA 9184 and procurement of infrastructure
COA Circular No. 2012- projects is strictly enjoined.
001 not only rendered the
transactions questionable We recommended to require Partially Some of the
but more so prevented the the Municipal Accountant not impleme DV’s were
timely audit of the same to process or to refrain from nted processed
which is prejudicial to the signing the disbursement without
best interest of the voucher/s with incomplete supporting
Municipality. supporting documents in order documents.
to avoid the liability for
certifying and allowing
payment of the transaction/s
without complete
documentation.

Direct the Accountant or the Partially Some of the


Bookkeeper to ensure that the impleme DV’s were
transactions, nted processed
vouchers/payrolls submitted without
to the COA Office are supporting
supported with all required documents
documents which are intact
and properly accomplished in
order to avoid audit
suspensions/disallowances.

10. The continued failure of the We reiterated our Not Inaction by


Municipality to submit recommendation that impleme managemen
copies of purchase order, Management submits to the nted t
job order, contracts and Auditor, for review and
management inspection and evaluation, copies of approved
acceptance report on contract/purchase/letter orders
deliveries together with and all the supporting

56
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
their supporting documents documents forming part
to the Office of the Auditor thereof within the prescribed
within the prescribed period in order to facilitate
period for legal and timely inspection of deliveries
technical review in and any defects/deficiencies
violation to COA Circular manifested therein could be
Nos. 95-006 and 2009-001 immediately corrected.
dated May 18, 1995 and
February 12, 2009,
respectively, hinders the
timely review and
evaluation of the same.
Thus, if there are
deficiencies noted, it could
not be communicated at
once for corrective action
by management.

11. Unaware of the regulation, We recommended that a Not Inaction by


the Bids and Award printed copy of the impleme managemen
Committee (BAC) failed to Procurement Monitoring nted t
submit the Procurement Report be furnished to the
Monitoring Report to the Government Procurement
GPPB in violation to the Policy Board for them to verify
provision of Section 12.2 the status of procurement
of the Implementing Rules activities of the LGU.
and Regulations (IRR) of
RA 9184, thus review,
evaluation and monitoring
of procurement activities of
the agency could not be
undertaken hence,
defeating the purpose of the
law.
12. Due to inaction by We recommended to require Reiterated in Not
management, the monthly the Municipal Accountant to this report impleme Still
and quarterly trial balances submit promptly and regularly nted submitted
and supporting schedules as required by the regulation beyond the
were not regularly the financial statements and reglementar
submitted contrary to supporting schedules to the y period
Section 70 of the Manual Audit Team for review and

57
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
On New Government verification in order to serve its
Accounting System purpose to provide timely
(NGAS), Volume I, thus information.
delaying the review and
audit of same and the
purpose of the financial
statement to provide
management timely
information is defeated.

13. The Office of the We recommended to require Some were Partially Partial
Municipal Accountant the former Municipal submitted impleme submission
failed to submit to the Accountant Designate to nted
Office of the Audit Team submit the 109 disbursement
Leader the 109 vouchers in the total amount of
disbursement vouchers in P2,910,417.28 to the Office of
the total amount of the Audit Team Leader for
P2,910,417.28 for CY 2012 post audit and for rendering the
and 2013, contrary to the necessary audit decisions on
provisions of Section 107 these transactions.
of PD 1445 and the
pertinent provisions of
COA Circular Nos. 95-006
and 2009-006 and Section
40, 42 and 44, Volume I of
the NGAS Manual,
resulting to the delay in the
review and verification on
the propriety and validity
of the transactions recorded
in the books and in
rendering the necessary
audit decisions on these
transactions.

14. Some Liquidation Reports The Municipal Accountant Submitted Partially Subject for
in settlement of cash should see to it that all already impleme verification
advances were not liquidation documents relative nted due to
submitted to the Audit to the settlement of cash delayed
Team concerned for advances be submitted to the submission
required audit purposes as Auditor as prescribed.

58
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
prescribed in COA Circular
No. 97-002 dated February
1997, thus notices of
suspension were issued for
the non submission of the
said reports.
15. Due to non-preparation of We recommended to instruct Reiterated in Not Inaction by
Monthly Report of the Supply Officer to prepare this report impleme managemen
Fuel Consumption, diligently the required Monthly nted t
proper control and Report of Fuel Consumption as
monitoring the usage of required under the existing
gasoline & fuel could regulation for control and
not immediately be monitoring purposes in order
determined contrary to the to ascertain the validity and
provision of COA propriety on the expenses
Circular No. 77-61 thus, incurred on fuel, oil and
propriety and validity on gasoline.
the expenses incurred could
not also be ascertained.

16. Due to inaction by the We recommended that the Not Inaction by


Municipal Accountant Municipal Accountant impleme the
Designate, subsidiary Designate should maintain nted Municipal
ledgers for most of the subsidiary ledgers to ensure Accountant-
accounts still are not accuracy and correctness of designate
maintained contrary to the bookkeeping/recording and
provision of Section 10 of posting therein should be
MNGAS Volume II, thus updated and reconciled with
the accuracy, and the general ledgers
correctness of the recorded regularly/monthly. Whenever
balances in the books of there is shifting of positions or
accounts could not be resignation and personnel
ascertained hence the movements in the Agency,
financial statement is there should be proper and
unreliable. complete turnover of
accountabilities and records.

17. Due to laxity in We recommended that the Fully


implementing the Municipal officials and impleme
regulation, payment of employees shall be required to nted
monetization of leave follow the guidelines set on the

59
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
credits of two elective payment of the monetization of
officials of the municipality 50% or more of the
was made which is not in accumulated of leave credits
accordance with the Rules and payment for the terminal
and Regulations of leave, specifically Sections 22
Sections 22 and 23 of Rule and 23 of Rule XVI of the
XVI of the Omnibus Rules Omnibus Rules and
and Regulations of the Regulations of the Civil
Civil Service Commission Service Commission and
and Section 5 of IRR of Section 5 of the IRR of R.A.
R.A. No. 10154 of the CSC No. 10154 of CSC Memo
Memorandum Circular 07, Circular 07, series 2013.
series of 2013, resulting to Payment made shall not be
improper disbursement of taken as precedence.
government funds.

18. There were deductions We recommended that the No renewal Partially Gradual
made on the payrolls of the Head of the Agency shall of loans impleme implementat
municipal officials and ensure strict compliance with nted ion due to
employees for payment of Section 262 of GAAM, humanitaria
loans acquired from private Section 4 (2) of PD 1445, n reason
banks contrary to Section Section 335 of RA 7160 and
262 of GAAM, Section 4 Section 43 of General
(2) of PD 1445, Section Appropriation Act (GAA) FY
335 of RA 7160 and 2013. Further, the Municipal
Section 43 of General Accountant should stop the
Appropriation Act (GAA) practice of deducting from
FY 2013, thus resulted to employees’ payroll the
additional workload of the payment of loans to private
Accounting Office and banks pursuant to the above-
additional expenses for the cited rules and regulations.
supplies and checks. Should the payroll deduction
scheme cannot be avoided for
any reason, the Municipality
should require reasonable fee
from the different banks
concerned for the collection
services rendered to them by
the Municipality at the expense
of the government. Such

60
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
service fee should be
accounted for by the
Municipality as income.

19. The Municipal Treasurer We recommended that the Posted Fully


did not post the Notice of Municipal Mayor require the already impleme
Delinquency in the Municipal Treasurer to post nted
payment of Real Property the Notice of Delinquency in
Taxes in the total amount the payment of Real Property
of P2,000,123.34 at the Taxes at the main entrance of
main entrance of the the Municipal Hall and in
Municipal Hall and in publicly accessible and
publicly conspicuous places in the
accessible/conspicuous barangays of the Municipality
places in contrary to of Balingoan in compliance
Section Nos. 254 and 256 with Section 254 of R.A. 7160
of the Local Government and to avail of the remedies in
Code of 1991 thereby the collection of real property
preventing the tax from different taxpayers as
Municipality from stated in Section 256 of the
availing of the remedies in Local Government Code of
the collection of real 1991.
property taxes from
delinquent taxpayers.

20. Receivables- We recommended that the Hon. Not Inaction by


Disallowances/Charges Municipal Mayor to act impleme managemen
account in the General assertively on the disallowances nted t
Fund totaling to issued and enforce the immediate
P240,204.86 remained refund of the said disallowances
considering the loss of
unsettled in the books
government funds was already
beyond one (1) year or incurred. Tolerating delayed
more in violation to Section refunds would further contribute
37 and 112 of PD 1445, to additional loss of government
thus collectability and funds. In addition, Municipal
propriety of this account is Accountant shall prepare
doubtful. Subsidiary Ledger for this
account for future transactions to
facilitate sending of demand
letters to individual concerned

61
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
pursuant to Section 64, Volume I
of Government Accounting and
Auditing Manual.

It is our recommendation to
21. Payment of transportation
immediately stop the practice,
expenses to officials and
let the driver and escort
employees despite used of
claimed the per diem
government vehicle and
according to the provisions of
reimbursement of gasoline
the travel law and direct the
expenses, contrary to COA
officials and employees
Circular Nos. 96-004, thus,
concerned to refund to the
considered improper and
Agency the improper payment
excessive.
of transportation allowances.

22. Taxes withheld from the We recommended to direct the Remitted Fully
Agency’s purchases of Municipal Accountant to remit already impleme
goods and services the taxes withheld immediately nted
amounting to ₱152,724.37 and adhere strictly to the
were not remitted to the Revenue Regulations of the
BIR in violation of R.A NIRC.
8424, The National Internal
Revenue Code, as
amended, thus, deprived
the National Government
of the income that could be
derived from the remittance
of the same and exposes its
officers to financial burden
due to accumulated
interests and penalties that
could be charged against
them.

23. Due to inaction of the We recommended to direct the Fully


Accounting department, the Municipal Accountant to impleme
Agency failed to withhold adhere strictly to the rules and nted
and remit tax on regulations of the National
government money Internal Revenue Code and no
payments in violation of government income payments
Revenue Regulation 2-98, shall be made without

62
Reason for
Manageme Partial/
R
nt Impleme Non-
Audit Observation Recommendation e
Action ntation Implement
f
a-tion
Implementing R.A.8424, withholding the same and
Amendment of National remit to the Bureau within the
Internal Revenue Code prescribe period.
relative to the withholding
on income subject to
Expanded withholding tax
and Final Withholding tax,
Withholding of Income tax
on Compensation,
Withholding of Creditable
Value-added Tax and Other
Percentage Taxes, thus
deprived the National
Government of the income
that could have been
collected.

63
PART IV – ANNEXES

1. Financial Statements by Fund

A - Balance Sheet – General Fund


A1 - Balance Sheet – Special Education Fund
A2 - Balance Sheet – Trust Fund
B - Statement of Income & Expenses – General Fund
B1 - Statement of Income & Expenses – Special Education Fund
C - Statement of Cash Flows – General Fund
C1 - Statement of Cash Flows – Special Education Fund
C2 - Statement of Cash Flows – Trust Fund

2. Status of Appropriations, Allotments and Obligations

D - General Fund

3. Tables

E -Real Property Tax Data


F -Surcharges

64
ANNEX A
Municipality of Balingoan
DETAILED BALANCE SHEET
General Fund
As of December 31, 2014
(With Comparative Figures for CY 2013)

2014 2013
ASSETS
Current Assets
CASH
Cash in Vault P 106,606.35 P -
Payroll Fund P 18,627.62
Cash in Bank Local Currency
Cash in Bank - Local Currency, Current Account 5,999,487.46 1,582,964.01
Total Cash P 6,106,093.81 P 1,601,591.63
RECEIVABLES
Receivable Accounts
Due from offcers and Employee 64,692.00 64,692.00
Real Property Tax Receivable 1,773,758.65 2,182,920.72
Inter-agency Receivables
Due from NGA's 18,395.81 18,395.81
Due from LGU's 629,604.49 629,604.49
Due from NGO's/PO's 5,418.23 5,418.23
Intra-agency Receivables
Due from Other Funds
Other Receivables
Receivables - Disallowances/Charges 240,204.86 240,204.86
Advances to Officers and Employees 382,000.00 280,190.00
Other Receivables 1,359.06 1,359.06
Total Receivables 3,115,433.10 3,422,785.17

INVENTORIES
Supplies
Accountable Forms Inventory 111,355.41 111,355.41
Medical, Dental & Laboratory Supplies Inventory 15,000.00 15,000.00
Other Supplies Inventory 48,217.34 48,217.34
Spare Parts Inventory 91,184.16 91,184.16
Total Inventories 265,756.91 265,756.91
Total Current Assets 9,487,283.82 5,290,133.71
Property, Plant & Equipment (net of Depreciation)
LAND
Land and Land Improvements 120,000.00 P 120,000.00
Total Land and Land Improvements 120,000.00 P 120,000.00
BUILDINGS
School Buildings 62,800.99 62,800.99
Other Structures 55,342.66 55,342.66
Markets & Slaughterhouse -
Total Buildings 118,143.65 P 118,143.65

65
OFFICE EQUIPMENT, FURNITURE & FIXTURES
Office Equipment 279,775.57 54,353.90
Furniture and Fixtures 92,344.68 88,384.68
I.T. Equipment & Software 90,493.00 69,218.60
Libarary Books
Total Office Equipment, Furniture & Fixtures 462,613.25 211,957.18
MACHINERIES AND EQUIPMENT
Machineries -
Agricultural, Fishery & Forestry Equipment 3,013,612.00 3,013,612.00
Military and Police Equipment 30,590.00 30,590.00
Other Machineries & Equipment 298,500.00 -
Total Machineries and Equipment 3,342,702.00 P 3,044,202.00
TRANSPORTATION EQUIPMENT
Motor Vehicles 308,659.00 P 308,659.00
Other Transportation Equipment 808,809.65 P 208,809.65
Total Transportation Equipment 1,117,468.65 P 517,468.65
OTHER PROPERTY, PLANT & EQUIPMENT
Other Property, Plant & Equipment 19,826.50 P -
Total Other Property, Plant & Equipment 19,826.50 P -
CONSTRUCTION IN PROGRESS
Roads, Highways and Bridges 5,022,356.53 5,022,356.53
Artesian Well, Reservoir, Pumping Station 410,601.00 -
Waterways, Seawalls, Riverwalls - -
Total Construction in Progress 5,432,957.53 5,022,356.53
Total Property, Plant and Equipment 10,613,711.58 P 9,017,598.01
Other Assets -
OTHER ASSETTS
Work/Other Animals - -
Total Other Assets - -
TOTAL ASSETS P 20,100,955.40 P 13,078,829.38

LIABILITIES AND EQUITY


Current Liabilities
Payable Accounts
Accounts Payable 39,852.00 P 39,852.00
Inter-Agency Payables
Due to BIR 308,873.14 118,228.24
Due to GSIS 148,016.52 276,619.69
Due to PAG-IBIG 47,689.02 97,689.00
Due to PhilHealth 8,362.32 28,362.32
Due to Other NGA's 1,126,306.42 726,306.42
Due to GOCC's 734,905.44 734,905.44
Due to LGU's 387,568.05 330,229.96
Intra-Agency Payables
Due to Other Funds 2,384,419.62 2,384,419.62
Other Liability Accounts
Guaranty Deposits Payable
66
Other Payables - (199,307.54)
Total Current Liabilities 5,185,992.53 P 4,537,305.15

Long-Term Liabilities
Mortgage/Bonds/Loans Payable
Loans Payable - Domestic - -
Total Long Term Liabilities - P -
Deferred Credits
Deferred Real Property Tax Income 1,773,758.65 2,182,920.72
Deferred Special Education Tax Income - -
Other Deferred Credits - -
TOTAL DEFERRED CREDITS 1,773,758.65 P 2,182,920.72
TOTAL LIABILITIES 6,959,751.18 P 6,720,225.87
EQUITY
Government Equity Beg. 8,204,035.85 7,727,190.40
Add/Deduct
Retained Operating Surplus
Current Operations 5,432,069.10 483,112.45
Prior Years Adjustment
Less: Transfers to Registry
Prior Years Adjustment 494,860.73 6,267.00
TOTAL GOVERNMENT EQUITY 13,141,244.22 8,204,035.85
TOTAL LIABILITIES AND EQUITY 20,100,995.40 14,924,261.72

(See Accompanying Notes to Financial Statements)

67
ANNEX A1
Municipality of Balingoan
DETAILED BALANCE SHEET
Special Education Fund
As of December 31, 2014
(With Comparative Figures for CY 2013)

2014 2013
ASSETS
Current Assets
CASH
Cash in Vault 19,414.99
Payroll Fund
Cash in Bank Local Currency
Cash in Bank - Local Currency, Current Account 9,365.75 23,231.29
Total Cash 28,780.74 23,231.29
RECEIVABLES
Receivable Accounts
Due from offcers and Employee
Special Education Tax Receivable 1,780,450.60 2,183,151.86
Inter-agency Receivables
Due from NGA's - -
Due from LGU's 208,067.02 208,067.02
Due from NGO's/PO's - -
Intra-agency Receivables
Due from Other Funds 606,922.08 606,922.08
Other Receivables
Receivables - Disallowances/Charges 2,344.50 2,344.50
Advances to Officers and Employees
Other Receivables
Total Receivables 2,597,784.20 3,000,485.46

INVENTORIES
Supplies
Accountable Forms Inventory 79,114.20 P 79,114.20
Medical, Dental & Laboratory Supplies Inventory -
Other Supplies Inventory -
Spare Parts Inventory -
Total Inventories 79,114.20 P 79,114.20
Total Current Assets 2,705,679.14 P 3,102,830.95
Property, Plant & Equipment (net of Depreciation)
LAND
Land and Land Improvements - P -
Total Land and Land Improvements - P -
BUILDINGS
School Buildings - -
Other Structures - -
Markets & Slaughterhouse - -
Total Buildings - P -

68
OFFICE EQUIPMENT, FURNITURE & FIXTURES
Office Equipment 64,800.00 -
Furniture and Fixtures - -
I.T. Equipment & Software - -
Libarary Books - -
Total Office Equipment, Furniture & Fixtures 64,800.00 P -
MACHINERIES AND EQUIPMENT
Machineries - -
Agricultural, Fishery & Forestry Equipment - -
Military and Police Equipment - -
Other Machineries & Equipment - -
Total Machineries and Equipment - P -
TRANSPORTATION EQUIPMENT
Motor Vehicles - P -
Other Transportation Equipment - P -
Total Transportation Equipment - P -
OTHER PROPERTY, PLANT & EQUIPMENT
Other Property, Plant & Equipment - P 6,150.00
Total Other Property, Plant & Equipment - P 6,150.00
CONSTRUCTION IN PROGRESS
Roads, Highways and Bridges - -
Artesian Well, Reservoir, Pumping Station - -
Waterways, Seawalls, Riverwalls - -
Total Construction in Progress - -
Total Property, Plant and Equipment 64,800.00 P 6,150.00
OTHER ASSETTS
Work/Other Animals - -
Total Other Assets - -
TOTAL ASSETS P 2,774,079.14 P 3,108,980.95

LIABILITIES AND EQUITY


Current Liabilities
Payable Accounts
Accounts Payable P -
Inter-Agency Payables
Due to BIR 14,074.49 5,248.88
Due to GSIS - -
Due to PAG-IBIG - -
Due to PhilHealth - -
Due to Other NGA's - -
Due to GOCC's 2,885.55 2,885.55
Due to LGU's 141,666.28 83,149.38
Intra-Agency Payables
Due to Other Funds - -
Other Liability Accounts
Guarranty Deposits Payable - -
Other Payables - -
Total Current Liabilities 158,626.32 P 91,283.81

69
Long-Term Liabilities
Mortgage/Bonds/Loans Payable
Loans Payable - Domestic - -
Total Long Term Liabilities - P -
Deferred Credits
Deferred Real Property Tax Income P -
Deferred Special Education Tax Income 1,780,450.60 2,183,151.86
Other Deferred Credits - -
TOTAL DEFERRED CREDITS 1,780,450.60 2,183,151.86
TOTAL LIABILITIES 1,939,076.92 P 2,274,435.67
EQUITY
Government Equity Beg. 834,545.28 830,952.77
Add/Deduct
Retained Operating Surplus
Current Operations 5,549.45 3,592.51
Prior Years Adjustment
Less: Transfers to Registry
Prior Years Adjustment 5,092.51
TOTAL GOVERNMENT EQUITY December 31, 2013 835,002.22 P 834,545.28
TOTAL LIABILITIES AND EQUITY 2,774,079.14 P 3,108,980.95

(See Accompanying Notes to Financial Statements)

70
ANNEX A2
Municipality of Balingoan
DETAILED BALANCE SHEET
Trust Fund
As of December 31, 2014
(With Comparative Figures for CY 2013)

2014 2013
ASSETS
Current Assets
CASH
Cash in Vault P - P -
Payroll Fund
Cash in Bank Local Currency
Cash in Bank - Local Currency, Current Account P 525,064.77 P 1,042,068.08
Total Cash P 525,064.77 P 1,042,068.08
RECEIVABLES
Receivable Accounts
Due from offcers and Employee - -
Special Education Tax Receivable - -
Inter-agency Receivables
Due from NGA's 1,072,788.08 1,072,788.08
Due from LGU's 35,511.99 35,511.99
Due from NGO's/PO's - -
Intra-agency Receivables
Due from Other Funds 613,490.25 613,490.25
Other Receivables
Receivables - Disallowances/Charges - -
Advances to Officers and Employees 994,350.00 471,740.00
Other Receivables 128,118.00 128,118.00
Total Receivables P 2,844,258.32 P 2,321,648.32

INVENTORIES
Supplies
Accountable Forms Inventory P - P -
Medical, Dental & Laboratory Supplies Inventory - -
Other Supplies Inventory -
Spare Parts Inventory -
Total Inventories P - P -
Total Current Assets P 3,369,323.09 P 3,363,716.40
Property, Plant & Equipment (net of Depreciation)
LAND -
Land and Land Improvements P - P -
Total Land and Land Improvements P - P -
BUILDINGS
School Buildings - -
Other Structures - -
Markets & Slaughterhouse - -
Total Buildings P - P -

71
OFFICE EQUIPMENT, FURNITURE & FIXTURES
Office Equipment - -
Furniture and Fixtures 4,600.00 4,600.00
I.T. Equipment & Software - -
Libarary Books - -
Total Office Equipment, Furniture & Fixtures P 4,600.00 P 4,600.00
MACHINERIES AND EQUIPMENT
Machineries -
Agricultural, Fishery & Forestry Equipment - -
Military and Police Equipment - -
Other Machineries & Equipment - -
Total Machineries and Equipment P - P -
TRANSPORTATION EQUIPMENT
Motor Vehicles P - P -
Other Transportation Equipment P -
Total Transportation Equipment P - P -
OTHER PROPERTY, PLANT & EQUIPMENT
Other Property, Plant & Equipment P - P -
Total Other Property, Plant & Equipment P - P -
CONSTRUCTION IN PROGRESS
Roads, Highways and Bridges 2,308,593.75 2,062,343.75
Artesian Well, Reservoir, Pumping Station
Waterways, Seawalls, Riverwalls
Total Construction in Progress 2,308,593.75 2,062,343.75
Total Property, Plant and Equipment P 2,313,193.75 P 2,066,943.75
OTHER ASSETTS
Work/Other Animals -
Total Other Assets -
TOTAL ASSETS P 5,682,516.84 P 5,430,660.15

LIABILITIES AND EQUITY


Current Liabilities
Payable Accounts
Accounts Payable P - P -
Inter-Agency Payables
Due to BIR 40,328.57 24,461.79
Due to GSIS - -
Due to PAG-IBIG -
Due to PhilHealth -
Due to Other NGA's 1,946,485.11 1,116,762.19
Due to GOCC's 83,139.58 53,612.88
Due to LGU's - 592,841.12
Intra-Agency Payables
Due to Other Funds 1,581,454.03 1,380,399.66

72
Other Liability Accounts
Guaranty Deposits Payable - -
Other Payables - -
Total Current Liabilities P 3,651,407.29 P 3,168,077.64

Long-Term Liabilities
Mortgage/Bonds/Loans Payable
Loans Payable - Domestic - -
Total Long Term Liabilities P - P -
Deferred Credits
Deferred Real Property Tax Income P - P -
Deferred Special Education Tax Income - -
Other Deferred Credits - -
TOTAL DEFERRED CREDITS P - P -
TOTAL LIABILITIES P 3,651,407.29 P 3,168,077.64
EQUITY
Government Equity Beg. P 2,262,582.51 P 1,799,400.50
Add/Deduct
Retained Operating Surplus
Current Operations
Prior Years Adjustment 463,182.01
Less: Transfers to Registry
Prior Years Adjustment 231,472.96
TOTAL GOVERNMENT EQUITY December 31, 2013 P 2,031,109.55 P 2,262,582.51
TOTAL LIABILITIES AND EQUITY P 5,682,516.84 P 5,430,660.15

(See Accompanying Notes to Financial Statements)

73
ANNEX B
Municipality of Balingoan
DETAILED STATEMENT OF INCOME AND EXPENSES
General Fund
For the Year Ended December 31, 2014
(With Comparative Figure for CY 2013)

2014 2013
Income
Local Taxes
Business Taxes 686,141.90 1,104,579.80
Community Taxes 64,111.98 82,354.00
Real Property Taxes 273,819.34 427,117.69
Special Education Tax
Total Local Taxes 1,024,073.22 1,614,051.49
GENERAL INCOME ACCOUNT
Internal Revenue Allotment 36,486,591.00 32,294,472.00
Permits and Licenses
Fees on Weights and Measures 13,800.00 12,900.00
Permit Fees 146,299.00 57,249.00
Other Permits and Licenses 15,138.75 290,407.00
Fines and Penalties - Permits and Licenses 17,568.50 17,413.40
Total Permits and Licenses 192,806.25 P 377,969.40
Service Income
Inspection Fees 110,477.00 73,900.00
Garbage Fees 60,240.00 99,600.00
Clearance and Certification Fees 90,410.00 64,650.00
Total Service Income 261,127.00 238,150.00
Business Income
Income from Markets 231,206.00 1,003,098.12
Income from Waterworks Systems 428,946.68 548,393.10
Other Business Income 97,295.82 -
Rent Income 560,638.50 757,971.75
Sales Revenue - -
Total Business Income 1,318,087.00 2,309,462.97
Other Income
Income from Grants and Donations - -
Income from Toll and Service Income 1,210,859.00 -
Interest Income 5,430.75 -
Share from PAGCOR/PCSO 31,663.80 34,218.22
Miscellaneous Income 658,474.75 996,601.72
Total Other Income 1,906,428.30 1,030,819.94
Total Operating Income 41,189,112.77 37,864,925.80

73
Less: Expenses
Personal Services
Salaries and Wages - Regular 10,646,610.21 11,264,424.15
Salaries and Wages - Casuals 1,859,410.75 1,840,254.57
Salaries and Wages - Contractual - -
Other Compensation
Personnel Economic Relief Allowance (PERA) 1,852,000.00 1,879,000.00
Additional Compensation (ADCOM) - -
Representation Allowance (RA) 871,485.00 952,055.00
Transportation Allowance (TA) 871,485.00 952,055.00
Clothing/Uniform Allowance 425,000.00 344,000.00
Subsistence, Laundry and Quarter Allowance 70,950.00 59,400.00
Productivity Incentive Allowance 92,000.00 150,000.00
Honoraria 6,800.00 -
Hazard Pay - -
Cash Gift 726,124.73 1,717,783.00
Other Bonuses and Allowances(midyear) 725,671.35 -
Overtime and Night Pay 26,234.70
Personnel Benefits Contributions
Life & Retirement Insurance Contributions 1,405,244.78 1,426,717.51
PAG-IBIG Contributions 232,881.98 240,916.40
PHILHEALTH Contributions 154,150.00 158,787.16
ECC Contributions 72,659.34 105,017.54
Other Personnel Benefits
Health Worker Benefits 622,250.00 264,900.00
Terminal Leave Benefits 1,518,265.11 2,199,080.13
Other Personnel Benefits 2,225,000.00 221,950.00
Total Personal Services 24,404,222.95 23,776,340.46
Maintenance and Other Operating Expenses
Traveling Expenses
Traveling Expenses - Local 1,035,024.44 1,170,394.00
Training & Scholarship Expenses
Training Expenses 351,123.00 360,924.00
Supplies and Materials Expenses
Office Supplies Expenses 321,169.05 460,568.52
Accountable Forms Expenses 62,700.00 -
Food Supplies Expense 266,319.42 339,230.00
Drugs and Medicines Expenses 231,739.50 190,061.10
Gasoline, Oil & Lubricants Expense 701,273.24 465,383.58
Rent Expense 25,000.00
Subscription Expense 1,200.00
Animal/Zoological Supplies Expense 30,000.00
Medical, Dental and Laboratory Supplies 38,761.00
Other Office Expense - 56,247.87
Utility Expenses
Water Expenses 32,350.00 62,789.00
Electricity Expenses 1,737,158.61 908,910.50
Communication Expenses
Telephone Expenses - Mobile 2,000.00 11,887.00
Postage and Deliveries 3,800.00 2,327.00
Telephone Expenses - Landline - 2,740.00
Internet Expenses 43,744.37 43,744.37

75
Memmbership Dues & Contribution to Organization 3,900.00 -
Professional Services
Legal Services 5,200.00 13,306.00
Survey Expenses 26,548.00 -
Auditing Expenses 162,079.17 98,000.00
Repair and Maintenance
Land Improvements
Repairs & Maintenance - Electrification 47,287.00 371,474.00
Buildings - -
Repairs & Maintenance - Office Buildings 4,500.00 10,030.00
Repairs & Maintenance - Market and Slaughterhouse - 12,498.24
Repairs & Maintenance - Other Structures 76,450.00 125,196.00
Office Equipment, Furniture and Fixtures
Repair and Maintenance - Office Equipment 59,940.00 53,524.26
Repair and Maintenance - Furniture & Fixtures - -
Repair and Maintenance - IT Equipment and Software 20,140.70 6,595.00
Machineries and Equipments
Repairs and Maintenance-Machineries(tractor) - 14,362.00
Repairs and Maintenance-Agricultural,Fisheries & Forestry 2,450.00 8,330.96
Police Equipment
Repair and Maintenance - Sports Equipment 82,600.00 71,623.00
Transportation Equipment
Repairs and Maintenance-Firefighting 805.00
Repair and Maintenance - Motor Vehicles - 805,696.97
Repair and Maintenance - Watercrafts - 3,000.00
Public Infrastructures
Repairs & Maintenance - Sports Center 3,778,235.79
Repairs & Maintenance - Other Public Infra - 1,974,063.32
Repairs & Maintenance - Roads, Highways 49,968.50 11,350.00
Repair & Maintenance - Artesian Wells, Reservoirs, Pumping Stns Conduits 136,652.00 432,390.00
Repair & Maintenance - Waterways, Aqeuducts, Seawalls, Riverways & Others 513,115.00
Tax, Insurance Premiums & Other Fees
Insurance Expenses 21,401.91 -
Fidelity Bond Premiums 16,430.50 35,874.75
Taxes, Duties and Licenses 5,707.12
Other Maintenance and Operating Expenses
Maintenance and Operating Expenses 1,155,760.59 5,482,951.45
Total Maintenance and Other Operating Expenses 11,352,820.92 P 13,605,472.89
INCOME FROM OPERATIONS 5,432,069.10 P 483,112.45
Less: Financial Expenses
Interest Expenses - P -
Income Before Subsidies, Donations & Extraordinary Items P 483,112.45
Add: Subsidy to Local Government Units
Subsidy from National Government Agency -
Donations -
Total - P -
Income Before Extraordinary Items 5,432,069.10 P 483,112.45
Add: Extraordinary Items
Gain/Loss on Sale of Disposed Assets - P -
NET INCOME 5,432,069.10 P 483,112.45

(See Accompanying Notes to Financial Statements)

76
ANNEX B1
Municipality of Balingoan
DETAILED STATEMENT OF INCOME AND EXPENSES
Special Education Fund
For the Year Ended December 31, 2014
(With Comparative Figure for CY 2013)

2014 2013
Income
Local Taxes
Business Taxes P -
Community Taxes -
Real Property Taxes -
Special Education Tax 243,973.93 188,738.46
Total Local Taxes 243,973.93 188,738.46
GENERAL INCOME ACCOUNT
Internal Revenue Allotment P -
Permits and Licenses
Fees on Weights and Measures P -
Permit Fees -
Other Permits and Licenses -
Fines and Penalties - Permits and Licenses -
Total Permits and Licenses - P -
Service Income
Inspection Fees P -
Garbage Fees -
Clearance and Certification Fees -
Total Service Income - P -
Business Income
Income from Markets -
Income from Waterworks Systems -
Other Business Income -
Rent Income -
Sales Revenue -
Total Business Income - P -
Other Income
Income from Grants and Donations P -
Share from PAGCOR/PCSO -
Prior Year Adjustment -
Subsidy from National Government Agency -
Miscellaneous Income 3,592.51 191,044.96
Total Other Income 3,592.51 191,044.96
Total Operating Income 247,566.44 P 379,783.42

77
Less: Expenses
Personal Services
Salaries and Wages - Regular - P -
Salaries and Wages - Casuals - -
Salaries and Wages - Contractual - -
Other Compensation -
Personnel Economic Relief Allowance (PERA) - -
Additional Compensation (ADCOM) - -
Representation Allowance (RA) - -
Transportation Allowance (TA) - -
Clothing/Uniform Allowance - -
Subsistence, Laundry and Quarter Allowance - -
Productivity Incentive Allowance - -
Hazard Pay - -
Cash Gift - -
Other Bonuses and Allowances - -
Personnel Benefits Contributions -
Life & Retirement Insurance Contributions - -
PAG-IBIG Contributions - -
PHILHEALTH Contributions - -
ECC Contributions - -
Other Personnel Benefits -
Health Worker Benefits - P -
Terminal Leave Benefits - -
Other Personnel Benefits - -
Total Personal Services - P -
Maintenance and Other Operating Expenses
Traveling Expenses
Traveling Expenses - Local 31,236.00 37,945.00
Training & Scholarship Expenses
Training Expenses
Supplies and Materials Expenses
Office Supplies Expenses 10,865.00 4,471.70
Accountable Forms Expenses 6,000.00 -
Food Supplies Expense - 19,980.00
Drugs and Medicines Expenses
Gasoline, Oil & Lubricants Expense
Other Office Supplies Expense 4,350.00 6,000.00
Utility Expenses
Water Expenses - 6,000.00
Electricity Expenses - 3,241.20
Communication Expenses

78
Telephone Expenses - Landline -
Interest Expenses -
Memmbership Dues & Contribution to Organization -
Professional Services
Auditing Expenses -
Repair and Maintenance
Land Improvements
Repairs & Maintenance - Electrification -
Buildings
Repairs & Maintenance - Office Buildings -
Repairs & Maintenance - Other Structures -
Office Equipment, Furniture and Fixtures
Repair and Maintenance - Office Equipment -
Transportation Equipment
Repair and Maintenance - Motor Vehicles -
Public Infrastructures
Repairs & Maintenance - Other Public Infra -
Repairs & Maintenance - Roads, Highways -
Repair & Maintenance - Artesian Wells, Reservoirs, Pumping Stns Conduits -
Tax, Insurance Premiums & Other Fees
Insurance Expenses -
Fidelity Bond Premiums -
Taxes, Duties and Licenses -
Other Maintenance and Operating Expenses
Maintenance and Operating Expenses 189,565.99 298,553.01
Total Maintenance and Other Operating Expenses 242,016.99 376,190.91
INCOME FROM OPERATIONS 5,549.45 3,592.51
Less: Financial Expenses
Interest Expenses - P -
Income Before Subsidies, Donations & Extraordinary Items - P 3,592.51
Add: Subsidy to Local Government Units
Subsidy from National Government Agency - -
Total - P -
Income Before Extraordinary Items 5,549.51 P 3,592.51
Gain/Loss on Sale of Disposed Assets - P -
NET INCOME 5,549.51 P 3,592.51

(See Accompanying Notes to Financial Statements)

79
ANNEX C
Municipality of Balingoan
DETAILED STATEMENT OF CASH FLOWS
General Fund
For the Year Ended December 31, 2014
(With Compararative Figures for CY 2013)

Cash Flows from Operating Activities: 2014 2013


Cash Inflows:
Share from Internal Revenue Allotments 36,486,591.00 32,294,472.00
Collection from Local Tax 750,253.88 1,104,579.80
Collection from Real Property Tax 273,819.34 427,117.69
Collection of Special Education Tax - -
Collection from Permit and Licenses 192,806.25 365,069.40
Collection from Service Income 261,127.00 238,150.00
Collection from Business Income 1,318,087.00 2,309,462.97
Other Receipts 1,906,428.50 1,126,073.94
Collection from Subsidy Income -
Collection from Grant & Donations - -
Total Cash Inflow 41,189,112.97 P 37,864,925.80
Cash Outflows:
Payments -
To suppliers/creditors 2,286,271.62 10,080,027.63
To employees 25,790,370.39 23,776,340.46
Other Expenses 7,680,401.86 2,925,445.26
Total Cash Outflow 35,757,043.87 36,781,813.35
Net Cash from Operating Activities 5,432,069.10 1,083,112.45
Cash Flows from Investing Activities:
Cash Outflows:
To Purchase Property, Plant & Equipment 927,566.92 P 600,000.00
Total Cash Outflow 927,566.92 P 600,000.00
Net Cash from Investing Activities: 927,566.92 P (600,000.00)
Cash Flows from Financing Activities:
Cash Outflows:
Payment of Loans Payable - P -
Payment for Financial Expenses - -
Total Cash Outflow - P -
Net Cash from Financing Activities - P -
Net Increase in Cash 4,504,502.18 P 483,112.45
Cash and Cash Equivalents, January 1 1,601,591.63 1,118,479.18
Cash at the End of the Period 6,106,093.81 P 1,601,591.63

(See Accompanying Notes to Financial Statements)

80
Municipality of Balingoan ANNEX C1
DETAILED STATEMENT OF CASH FLOWS
Special Education Fund
For the Year Ended December 31, 2014
(With Compararative Figures for CY 2013)

Cash Flows from Operating Activities: 2014 2013


Cash Inflows:
Share from Internal Revenue Allotments
Collection from Local Tax
Collection from Real Property Tax
Collection of Special Education Tax 243,973.93 188,738.46
Collection from Permit and Licenses
Collection from Service Income
Collection from Business Income
Other Receipts 3,592.51 191,044.96
Collection from Subsidy Income
Collection from Grant & Donations
Total Cash Inflow 247,566.44 379,783.42
Cash Outflows:
Payments -
To suppliers/creditors 298,553.01
To employees 43,945.00
Other Expenses 242,016.99 33,692.90
Total Cash Outflow 242,016.99 376,190.91
Net Cash from Operating Activities 5,549.45 P 3,592.51
Cash Flows from Investing Activities:
Cash Outflows:
To Purchase Property, Plant & Equipment - P -
Total Cash Outflow - P -
Net Cash from Investing Activities: - P -
Cash Flows from Financing Activities:
Cash Outflows:
Payment of Loans Payable - P -
Payment for Financial Expenses - -
Total Cash Outflow - P -
Net Cash from Financing Activities - P -
Net Increase in Cash 5,549.45 3,592.51
Cash and Cash Equivalents, January 1, 2013 23,231.29 19,638.78
Cash at the End of the Period 28,780.74 P 23,231.29

(See Accompanying Notes to Financial Statements)

81
Municipality of Balingoan ANNEX C2
DETAILED STATEMENT OF CASH FLOWS
Trust Fund
For the Year Ended December 31, 2014
(With Compararative Figures for CY 2013)

2014 2013
Cash Flows from Operating Activities:
Cash Inflows:
Share from Internal Revenue Allotments
Collection from Local Tax
Collection from Real Property Tax
Collection of Special Education Tax
Collection from Permit and Licenses
Collection from Service Income
Collection from Business Income
Other Receipts 23,089.58 10,989.49
Collection from Subsidy Income 1,929,806.61 5,054,312.86
Collection from Grant & Donations - -
Total Cash Inflow 1,952,896.19 P 5,065,302.35
Cash Outflows:
Payments -
To suppliers/creditors 4,911,958.79
To employees 25,096.00
Other Expenses 2,469,899.50 243,984.04
Total Cash Outflow 2,469,899.50 5,181,038.83
Net Cash from Operating Activities (517,003.31) P (115,736.48)
Cash Flows from Investing Activities:
Cash Outflows:
To Purchase Property, Plant & Equipment - P -
Total Cash Outflow - P -
Net Cash from Investing Activities: - P -
Cash Flows from Financing Activities:
Cash Outflows:
Payment of Loans Payable - P -
Payment for Financial Expenses - -
Total Cash Outflow - P -
Net Cash from Financing Activities - P -
Net Increase (Decrease)in Cash (517,003.31) P (115,736.48)
Cash and Cash Equivalents, January 1, 2013 1,042,068.08 1,157,804.56
Cash at the End of the Period 525,064.77 P 1,042,068.08

(See Accompanying Notes to Financial Statements)

82
ANNEX D
MUNICIPALITY OF BALINGOAN
STATEMENT OF APPROPRIATIONS, ALLOTMENTS, OBLIGATIONS AND BALANCES
Current Legislative Appropriations
GENERAL FUND
As of December 31, 2014

Balances
Code Function/Program/ Project Appropriations Allotments Obligations Appropriations Allotments

GRAND TOTAL 38,362,493.00 38,362,492.99 23,720,355.69 0.01 14,642,137.30


I CURRENT YEAR APPROPRIATIONS 38,362,493.00 38,362,492.99 23,720,355.69 0.01 14,642,137.30
Personal Services 20,116,297.00 20,116,296.99 16,803,410.11 0.01 3,312,886.88
MOOE 17,691,136.00 17,691,136.00 6,914,724.04 - 10,776,411.96
Capital Outlay 555,060.00 555,060.00 2,221.54 - 552,838.46
-
1000 GENERAL PUBLIC SERVICES 25,158,413.54 25,158,413.54 17,448,430.68 - 7,709,982.86
Personal Services 15,367,883.36 15,367,883.36 12,917,906.10 - 2,449,977.26
MOOE 9,262,530.18 9,262,530.18 4,530,524.58 - 4,732,005.60
Capital Outlay 528,000.00 528,000.00 - - 528,000.00
4000 HEALTH SERVICES 2,068,230.51 2,068,230.51 1,680,598.15 - 387,632.36
Personal Services 1,619,170.51 1,619,170.51 1,356,865.23 - 262,305.28
MOOE 449,060.00 449,060.00 323,732.92 - 125,327.08
Capital Outlay - - -
7000 SOCIAL WELFARE SERVICES 853,861.44 853,861.44 690,572.69 - 163,288.75
Personal Services 642,801.44 642,801.44 513,957.61 - 128,843.83
MOOE 199,000.00 199,000.00 174,393.54 - 24,606.46
Capital Outlay 12,060.00 12,060.00 2,221.54 - 9,838.46
8000 ECONOMIC SERVICES 2,998,488.91 2,998,488.91 2,474,743.09 - 523,745.82
Personal Services 2,486,441.69 2,486,441.69 2,014,681.17 - 471,760.52
MOOE 497,047.22 497,047.22 460,061.92 - 36,985.30
Capital Outlay 15,000.00 15,000.00 - - 15,000.00
9000 OTHER PURPOSES 7,283,498.60 7,283,498.60 1,426,011.08 - 5,857,487.52
Personal Services - -
MOOE 7,283,498.60 7,283,498.60 1,426,011.08 - 5,857,487.52
Capital Outlay - - -

83
Annex E

AAR CY 2014
Finding No. 3
Page 22-23

Real properties of Municipality of Balingoan, Misamis Oriental

Land P 1,822,060.00
Office Buildings 1,283,090.00
Market/Slaugtherhouse 256,410.00
Other Structures 11,394,560.00
Grand Total 14,756,120.00

84
85
86
87
Annex F

AAR CY2014
Finding No. 14
Page 44-45
5% VAT
Date Check No. Amount Paid withheld Surcharge Amount Due
2/10/2014 2435757 45,447.70 748.21 44,699.49
2435770 26,023.20 429.49 25,593.71
2435771 7,920.17 130.63 7,789.54
3/10/2014 314809 25,992.99 432.12 25,560.87
314810 1,180.46 19.56 1,160.90
314811 8,173.48 135.78 8,037.70
314812 67,843.01 1,126.69 66,716.32
3/17/2014 314813 39,838.50 659.72 39,178.78
3/17/2014 314817 11,467.86 189.75 11,278.11
3/17/2014 314818 13,445.20 222.51 13,222.69
3/17/2014 314819 8,496.45 140.55 8,355.90
3/17/2014 314820 5,527.19 91.36 5,435.83
3/17/2014 314826 10,717.60 177.31 10,540.29
4/1/2014 314837 9,585.31 151.73 9,433.58
4/1/2014 314838 1,130.64 18.63 1,112.01
4/1/2014 314839 29,287.68 484.07 28,803.61
4/1/2014 314840 32,001.10 529.69 31,471.41
4/22/2014 2436208 69,606.80 - 69,606.80
5/14/2014 2436325 10,360.38 170.44 10,189.94
5/14/2014 2436326 2,357.50 38.75 2,318.75
5/14/2014 2436327 33,071.61 544.33 32,527.28
5/14/2014 2436328 90,005.85 1,480.45 88,525.40
5/14/2014 2436329 35,412.68 582.62 34,830.06
6/17/2014 2436572 78,018.02 1,298.84 76,719.18
6/17/2014 2436573 28,901.56 482.01 28,419.55
6/17/2014 2436574 32,376.65 539.67 31,836.98
6/17/2014 2436575 12,498.31 208.36 12,289.95
6/17/2014 2436576 2,727.12 45.42 2,681.70
7/17/2014 2436819 12,515.07 206.02 12,309.05
7/17/2014 2436821 30,494.52 510.07 29,984.45
7/17/2014 2436822 71,798.98 1,204.50 70,594.48
7/17/2014 2436823 3,315.90 55.43 3,260.47
7/17/2014 2436848 32,048.92 536.42 31,512.50
9/5/2014 2558704 168,971.87 7,895.88 2,965.93 173,901.82
9/5/2014 2558705 52,123.94 2,519.90 906.62 53,737.22
9/5/2014 2558706 18,135.18 847.44 315.04 18,667.58
9/5/2014 2558707 5,638.66 263.49 97.86 5,804.29
9/5/2014 2558708 46,397.95 2,168.13 806.68 47,759.40
10/16/2014 2558964 5,217.94 243.82 90.61 5,371.15
10/16/2014 2558966 22,458.70 1,049.47 390.79 23,117.38
10/16/2014 2558968 27,499.16 1,285.00 477.56 28,306.60
10/20/2014 2558982 7,242.77 338.44 125.91 7,455.30
10/30/2014 2559069 76,040.30 3,459.83 1,275.08 78,225.05
1,319,314.88 20,071.40 21,043.21 1,318,343.07

88