Republic of the Philippines COMMISSION ON AUDIT COA Regional Office No.

III City of San Fernando, Pampanga STATE AUDITORS REPORT ON THE FINANCIAL STATEMENTS The Municipal Mayor Municipality of Casiguran Province of Aurora We have audited the accompanying Balance Sheet of the Municipality of Casiguran, Province of Aurora as of December 31, 2009, and the related Statement of Income and Expenses and Statement of Cash Flows for the year then ended. These financial statements are the responsibility of the Management. Our responsibility is to express an opinion on these financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with laws, COA and INTOSAI standards and applicable generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatements. Our audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. It also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the over-all financial statements presentation. We believe that our audit provides reasonable basis for our opinion. Validity and valuation of Property, Plant and Equipment costing P81.92 million could not be established due to the failure of the agency to conduct complete physical inventory of property and Cash in Bank account of P32.71 million could not be ascertained due to non preparation of monthly bank reconciliation statements rendering the accounts of doubtful validity. Due to the nature of the Municipalitys records, we were unable to satisfy ourselves as to the correctness of the amounts by means of other audit procedures. In our opinion except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to examine evidences regarding the matters discussed in the preceding paragraph, the financial statements referred to above, present fairly, in all material respects, the financial position of the Municipality of Casiguran, Aurora as of December 31, 2009, and the results of operations and its cash flows for the year then ended, in accordance with applicable laws, rules and regulations and in conformity with generally accepted accounting principles. COMMISSION ON AUDIT By:

February 17, 2010