EXECUTIVE SUMMARY Introduction ‘The Municipality of Tanay lies in the foothill of Sierra Madre Mountain, Before the coming of the Spaniards, the Indonesian and Malay voyagers have already settled in the locality. It became an independent town of Rizal by virtue of Republie Act No. 137, enacted on June 1901 by the Philippine Commission. It is now classified as a first class Municipality in the Province of Rizal with 19 barangays under its juridiction, For CY 2017, the Organizational Structure of the Munieiy is as follow: a, Key Officials Hon. Rex Manuel €, Tanjuaico = Municipal Mayor Hon, Jaime B. Vista ~ Municipal Vice Mayor Merlie C. Chua ~ Municipal Accountant Joyee B, Flores - Municipal Treasurer Members of the Sanggunian Allan ‘T. Sacramento Ricardo 8. Bernados Romel A, Magwill Ivan Allen B, Tongohan Santos P. Santos Luis C, Catolos Rafiel A. Reyes. Rading G. Juco Ruel P. Estrella (Liga ng Brgy, President) Virginia DS. Arbolado (IP Mandatory Representative) b. No. of Personnel Complement: Permanent 192 Elective Officials 12 Coterminous - M1 Contract of Service = 2 Job Order = 369Among the significant accomplishments of the Municipality for CY 2017 are the following: 1, Implemented various projects costing at least #854 million among which are the following: Particulars Amount ‘Three units of Dump trucks P7,500,000.00 Seven units of various Motor Vehicles (Ambulance / 5,706,000,00 Innova / Van / Motoreycle) Conereting of Tanay Ville Road at Barangay Tandang 993,895.49 Kutyo Improvement of sidewalk along market road and other 994,115.82 ronds along Tanay Construction of Irrigation Canal in Sitio Suyok at 4328.44 Barangay Kay-buto Improvement and repair of Grand Terminal at Tanay 470,859.98 Public Market Installation of closed circuit television (CCTV) at Tanay 148,240.00 Public Market Conereting of Samlay Road at Barangay San Andres 1,491,157.85 Concreting of Pathways at Maligaya St. cor. Porciuncula 1,042,196.27 St. Barangay Tandang Kutyo, Interior G. Trinidad St. at Barangay Wawa, Sitio Magata at Barangay Laiban, and Interior Marcos Highway Signal Tower at Purok IL at Harangay Sampaloc Improvement of Drainage Canal Compound Tanay Municipal 1,493,120.80 Installation of Roofing and Downspout at Building C-2 3,376,934.03 Tanay Public Market Construstion of 170 units Apartment Type Niche at 2,280,037,37 Himlayang Bayan ng Tanay )Completed portion of constructions in Tanay National 59,125,178.80 Government Complex which ineludes the Hospital Building, School Building and Site Development ‘Total “P85,416,074.55 Conducted /attended various training programs on various fields, ‘The Sanggunian Bayan have enacted 28 resolutions, 31 appropriations ordinances and 26 executive orders, Received awards and recognitions as follows: d Gold Award in Solid Waste Management (for the outstanding performance & highly commendable practice in Solid Waste Management in terms of adhering to the Supreme Court Mandamus to Clean and Rehabilitate Manila Bay and its watershed especially ‘on the principles of RA 9003 - Deparment of Interior and Local Government Region IV-A 2017 Seal of Good Local Governance » Department of Interior and Local Government 2017 Regional Gawad Kalasag Search for Excellence in Disaster Risk Reduction and Management and Humanitarian Assistance ~ 2nd Place Winner Best Municipal DRRMC Ist to 3rd Class ‘Municipality « Development Academy of the Philippines Outstanding LGU GAD Implementer for Cavite, Laguna, Batangas, Rizal and Quezon (CALABARZON) - 2nd Runner-Up ~ Regional Development Council Tourism Excellence Award (for LGU) - Department of Tourism CALABARZON Plaque of Recognition Ka-Toka para sa Manila Bay = Manila Water Company Ine Plaque of Appreciation for extraordinary and unwavering support extended to Philippine Drug Enforcement Agency Regional Office IV-A CALABARZON and commitment in the campaign against illegal drugs Plaque of Recognition for exemplary practice in the implementation of RA 9003 or Ecological Solid Waste Management Act of 2000 using Best Environmental Technology (BET) and Best AvailablePractice (BAP) - Department of Environment and Natural Resources = Environmental Management Bureau - CALABARZON i. Certificate of Recognition for Best Implementer of Three Project, Procurement Management Plan (PPMP )Components - Commission ‘on Population Region [V-A CALABARZON 4. Plaque of Recognition: Special Project Partner Award - Philippine Red Cross, k, Plaque of Appreciation for Establishing Local Migration Information System (LMIS) - Commission on Population Financial Highlights ‘The Municipality generated a total revenue of 372,182,671.43 in CY 2017 ‘Compared to last year’s total revenue of #333,656,3 18,42, this year's revenue posted an increase of 38,526,333,01 of 11.47% which attributed to the inerease in Tax Revenue, Share from Internal Revenue Collections, Service and Business Income and Shares, Grants {and Donations earned during the year, The comparative figures per funds are shown below Revenue 2017 2016 Increase! Percentage (Decrease) General Fund P341,323,601.37 P300,972,046.15 40,351,585.22 13.41% SEF 30,859,070.06 __32,684,272.27 __(1,825,202 58%. ‘Total F372,182,671.43 _1333,656,318.42_ _138,526,353,01 LL.55% For CY 2017, the expenditures for Personnel Services amounted to 85,274,166.37, while P106,391,900.46, 25,075,579.70, 3,362,003.69 and P7,661,813.51 were expended for Maintenance and Other Operating Expenses, Non-cash Expenses, Financial Expenses, and Financial Assistance/Subsidy, respectively, ‘Overall, the total expenditures for the year amount to P227,765,463.73 which is 1, 128,555.40 or 0.49% lower compared to prior year's expenditures of P228,894,019.13 ‘The total expenditures per fund are shown below; Expenditures 2017 2016 Increase/ Percentage (Decrease) General Fund 9207,121,999.21 P208,552,643.98 (1 421,644.74) (0.68% SEF 20,633,464.52 __20,340,375.18. 203,080.34 1.404 Total 7°227,765,463.73 _TF228,894,019.13 _P(1,128,555.40) (0.49) %In our verification of records, it was disclosed that the net income of the Municipality decreased on 2014 and increased from 2015 to 2017. Four year comparative data on the consolidated net income of the Municipality are presented below: _Increase/(Decrease) over precedin Income Year Net Income Amount Percentage 2014 P11,801,330,58 ——® (493,276.38) (4.11% 2015 97,804,867 81 86,303,537.26 750,38% 2016 104,762,299 29 6,957,431. 48 711% 2017 144,417,207.70 39,654,908 41 37.88% ‘To have a better comparative picture of Revenue, Expenditures and Net Income for four years from 2014-2017, presenied below is its yraphical presentation Comparative Financial Status CYs 2014-2017 25000 900.08 F39,000,000,00 | 100,000,000,00 a i all Revenue Fyponhtures 82014 2018 win The Municipality's consolidated assets, liabilities and equity, as of December 31, 2017 compared with the preceding year are as follows: Particular Cy 2017 CY 2016 % of Increase Assets 1, 793,208,854.29 1,513,938,427,60 18.45% Linbilities 797,428,859,54 664,703,117,81 19.97% Equity 995, 782,994.75 949,235,309.79 17.26% Scope of Audit Financial, Compliance and Value for Money Audits were conducted on the accounts and operations of the Municipality of Tanay, Rizal for CY 2017. The audit was conducted to ascertain the fairness and reliability of the Municipality's financial staremonts and its compliance with laws, rules and regulations,Audit Opinion ‘The Auditor rendered a qualified opinion on the fairness of the presentation of the financial statements of the Municipality of Tanay, Rizal due to the following, 2 Significant Recommend: ‘The reported balances of Property, Plant and Equipment (PPE) accounts with a total cost of ®799,698,501.21 and carrying amount of P665,481, 139.52 excluding total Construction in Progress of P123,831,712.25 at year-end remained unreliable due to: a) discrepancy between the accounting records and the submitted Report on the Physical Count of Property. Plant and Equipment (RPCPPE), and b) continuous inclusion of old demolished buildings, and unaccounted or missing equipment and motor vehicles in the Municipality's books of accounts ‘The ity and comeciness of the year-end balances of Cash in Bank accounts totaling 433,854,530,91 could not be ascertained due to: a) failure of the Municipal Accountant to prepare and submit regularly the monthly Bank Reconciliation Statements (BRS) for the two bank accounts being maintained by the Municipality; b) diseropaney of P2,662.606.68 between the general ledger and bank balances, ) various reconciling items including long outstanding items remained unadjusted in the books of accounts for lack of records or supporting documents to determine the details and nature of the same; and d) discrepancy of P62,115,581,00 between the ueneral ledyer and cashbook balances "The Municipal Accountant failed to maintain Subsidiary Ledgers to support the recorded balances of the Real Property Tax (RPT) and Special Education Tax (SET) Receivables, both amounting to F243,489,463,77, contrary to Section 64 of the Government Accounting and Auditing Manual (GAAM), Yolume 1, thus rendered the validity and correctness of the recorded year-end balances of the said Receivables doubtful For the observations cited above, the Audit Team recommended that the Local Chief Executive direct the: General Services Officer (GSO) and the Municipal Accountant to reconcile their property records and compare the same with the Inventory Report in order to ‘establish the correct balances of the Property, Plant and Equipment accounts, Any discrepancies noted between the inventory report and the accounting and property records should be investigated and make the necessary adjustments where the error was committed, and Property Officer/G$O prepare the Inventory and Inspection Report of Unserviceable Property (IRUP) to account all unserviceable and obsolete! demolished properties previously taken up in the books as assets so that they may be properly disposed of and dropped from the accounts. Moreover. the disposal of vi3 proce sell ‘be made in accordance with COA Circular No, 89-296 dated January it Municipal Accountant to prepare and submit the complete Monthly Banle Reconciliation Statements to the Auditor within the prescribed period. The bank statements, together with paid checks and debit/credit memos shall likewise be submitted to facilitate its verification. Morea verify and evaluate the correctness and accuracy of the reconciling items reflected in the BRS and prepare the adjusting entries in the ensuing month to avoid its inclusion in the subsequent BRS Municipal Accountant and Municipal Treasurer to &. conduct periodic reconciliation of their records to assure accuracy in recording, Also, necessary adjustments, if any, could be effected at once to avoid accumulation thereof and to present the correct balances of the Cash in Bank accounts in the financial statements, and b. exert effort to obtain the pertinent documents and records to establish the nature and details of the prior year's reconciling items and the abnormal balances of the three accounts with the PNB, Tanay Branch appearing in the Municipality's books which were already been closed so that adjusting/correcting entries could be effected, Municipal Accountant to maintain Subsidiary Ledger for each taxpayer/Real Property Unit (RPU) to support the recorded balances of said Receivables accounts, In addition, the following are the other significant audit observations and recommendations which were discussed with management officials: Despite previous recommendation, the Government Service Insurance System (GSIS) contributions/premiums/loans amortizations withheld fiom monthly employee's compensation were not again remitted in full by the Municipality which resulted in the accumulation of Due to GSIS account under the General Fund and Trust Fund totaling P2,735,971 56 as of December 31, 2017, conirary to Republic Act (RA) No, 8291 of the Government Service Insurance System (GSIS) Act of 1997, thus depriving the employees of the social security benefit and exposing the Municipality to risk of paying interest and penalty charges We recommended that the Local Chief Executive direct the: 8, Municipal Treasurer promptly remit the withheld GSIS contributions! premiums/loan amortizations ftom employees’ compensations in full ‘within the proscribed period; and b. Municipal Accountant to reconcile the Due to GSIS account records with the GSIS to determine any errors in recording thereof. vilVarious expenses totaling P829,213.62 were charged against the Special Education Fund (SEF), contrary (0 the provisions of Republic Act (RA) No. 7160 and Department of Education, Department of Budget and Management and Department of Interior and Local Government (DepEd, DBM and DILG) Joint Citeular No. 01 8. 2017 dated January 19, 2017, thus defeated the purpose for which the fund was ereated to the detriment of the intended beneficiaries We recommended that the Local Chief Executive direct the Municipal Budget Officer to appropriate fund in the General Fund to transfer and replace the amount of 829,213.62 charged to the Special Education Fund instead of General Fund, Thereafter, the Municipality should strictly observe the provisions of Section 272 of RA No. 7160 and DepED/DBM/DILG Joint Circular No. 1, 5, 2017 in the utilization of SEF. Similar in the previous year, cash advances were again granted to various accountable officers (AOs) in excess of the maximum cash accountability allowed by their fidelity bond, contrary to Section 101 (2) of PD 1448 and tiem 4.2 of ‘Treasury eiteular No, 02-2009 dated August 6, 2009, thus exposing the excess funds in their custody to possible loss in case of theft/robbery of force majeure and defalcation or shortages committed by the said accountable officers We recommended that the Local Chief Executive direct the Municipal Accountant to. 4 refiain ftom processing cash advances that would grant cash advance in excess of the maximum cash accountability allowed by the fidelity bond of the accountable officer; stop granting additional cash advances to accountable officers who have yet to liquidate their previous ones, and © seeto it that all cash advances are fully liquidated at the end of the year. ‘The Fequired report containing the list of all on-going programs/projects/ activities and those that are (o be implemented by the Municipality during the year, as well 48 the information that the appropriate project signboards and/or public notices ‘were already posted at the project site were once again not complied with, contrary 1 COA Circular No, 2013-004 dated January 30, 2013, thereby depriving its citizens und other stakeholders of complete information relative thereto and prevented the Audit Team from validating the same, ‘We strongly reiterated prior year's recommendation that the Local Chief Executive direct the concerned officials to prepare and submit all the information and reports required under the above-cited cirgular to promote transparency and accountability regarding the PPAs undertaken by the Municipality and facilitate the validation of the same by the Audit Team villProcurement Monitoring Reports for the Ist and 2nd semesters of CY 2017 were not prepared and submitted by the Bids and Awards Committee (BAC) to the Government Procurement Board (GPPB) as required under Section 12.2 of the Revised Implementing Rules and Regulations (IRR) of Republic Act No. 9184, thus the promotion on public monitoring of procurement process and implementation of awarded contracts was not undertaken We recommended that the Local Chief Executive require the BAC to submit the approved Procurement Monitoring Report to the GPPB in printed and electronic format within the prescribed period in accordance with the provision of the Revised IRR of R.A. No. 9184 ‘The Municipality was not compliant with the transition provision on the phased recognition of the Local Road Networks in the books of accounts which requires 50% compliance at the end of year 2017 as stated under Item LX of COA Circular No. 2015-008 due to the absence of Local Road Inventory and Road Map, ‘We recommended that the Local Chief Executive direct the: 4 Municipal GSO to coordinate with the Municipal Engineer to prepare the road map of the Municipality to facilitate the preparation of x proper inventory and reporting of the Municipality's road network system; b. Municipal Engineer to provide the Municipal Accountant and the Municipal GSO with the complete description and cost segregation of road components for road projects, and thereafter, © Municipal Accountant to record the amount of road networks equivalent 10 the required transition provision percentage every year starting 2016 up to 2019. ‘The Municipality failed to provide budgetary line item for the mandatory allocation of the one percent of Internal Revenue Allotment (IRA) for the strengthening and implementation of the PPAs of the Local Council for the Protection of Children (LCPC) of the Municipality, contrary Section 15 of Republic Act No 9344, known, as the Juvenile Justice and Welfare Act of 2006, and the provisions of DILG. Memorandum Circular No, 2012-120 dated July 4, 2012, to the disadvantage of the intended beneficiaries, We recommended that the Local Chief Executive direct the Municipal Budget Officer to provide budgetary line item in the annual budget at least one percent of the Municipality's Internal Revenue Allotment exclusively for the strengthening and implementation of programs, projects and activities of the Local Council for the Protection of Children, ix8, Despite repeated recommendations, the Municipality failed anew to optimize the utilization of its total appropriations for the 20% Development Fund, eontrary to Section 5 of Department of Interior and Local Government (DILG) and Department ‘of Budget and Management (DBM) Joint Memorandum Circular (JMC) No. 2011- |, thus continually deprived the constituents of the benefits that could be derived therefrom We strongly reiterated our prior year's recommendation that the Local Chief Executive direct the Municipal Planning and Development Coordinator (MPDC) and Municipal Engineer to implement all programed PPAs under 20% Development Fund to ensure that intended beneficiaries could avail of the maximum benefits that could be derived therefrom, 9. The Municipality fhiled to fully implement the six infrastructure projects totaling P15,309,000,00, funded under the Local Government Support FundsAssistance to Disadvantaged Municipalities (LGSF-ADM) Programs as of year-end, contrary to DILG-DBM Joint Memorandum Circular No, 2017-3 dated May 23, 2017 due to inadequate planning and monitoring of the proposed projects, thus deprived its constituents of the timely and optimal benefits that ean be derived therefrom, We recommended that the Local Chief Executive direct the Municipal Engineering, and Municipal Planning and Development Offices to properly plan all projects to ‘be implemented by the Municipality and to strictly monitor its implementation to avoid delay and/or termination of the same for the benefit of its constituents, 10. Gender ynps and/or differences within the Municipality could not be fully identified and analyzed due to non-establishment of Gender and Development (GAD) Database, contrary to Section 4.B of Philippine Commission on Women (PCW), Department of Interior and Local government (DILG), Department of Budget and Management (DBM) and National Economie and Development Authority (NEDA) Joint Memorandum Circular No, 2013-01, thus defeating the purpose of having a truly responsive GAD PPAs. ‘We recommended that the Local Chief Executive direct the Municipal Planning and Development Coordinator ‘along with the GAD Focal Person to establish GAD Database for storage of necessary information in sid of effective gender-responsive planning, programming and policy formulation 11. The Municipality failed to submit within the prescribed peried the 2017 Gender and Development (GAD) Plan and Budget (GPB) to the Department of Interior and Local Goverment (DILG) Provincial Office for review and endorsement, contrary to Section 4.0 of the Joint Memorandum Circular JMC) No, 2016-01 of the Philippine Commission on Women (PCW), Department of Interior and Local Government (DILG), Department of Budget and Management (DBM) and National Economic and Developrient Authority (NEDA), thus gend Programs, Projects and Activities (PPAs) in the GPE w:the GPB was not submitted to the Provincial Planning and Development Office for the alignment of the Municipality's GAD PPAs with the priorities of the Province We recommended that the Municipal Gender and Development Focal Point System (GFPS) prepare and submit to the PPDO the GAD Plan and Budget and submits the same within the prescribed period to DIL.G Provincial Office for review and endorsement. We also recommend that GFPS prepare and submit the GAD Accomplishment Report to the Audit Team in accordance with the regulations, 12, The Municipal Disaster Risk Reduction Management Council failed to include in its Local disaster Risk Reduction Management Investment Plan (LDRRMFIP) and implement the programs/projects chargeable 10 the previous year's unexpended balance of Local Disaster Risk Reduction Management Fund of P31,310,667,68, contrary to COA Circular No. 2012-002 dated September 12, 2012, thus the objectives of reducing disaster risks, and enhancing disaster preparedness and response capabilities of the Municipal Government were nt fully attained, We recommended that the Local Chief Executive direct the Municipal Disaster Risk Reduction Management Council to include in the LDRRMFIP the programs/ projectw/activities to be funded out of the previous year's unexpended balance of LDRRMF to fully utilized the fund in order to attain the Municipality's ultimate goals and objectives of protecting the lives and properties of its constituents during, calamities STATUS OF IMPLEMENTATION OF PRIOR YEAR'S AUDIT RECOMMENDATIONS: Of the 16 audit recommendations embodied in the CY 2016 Annual Audit Report, three were fully implemented, seven were partially implemented and six were not implemented by the Municipality xi