Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. IV-A
Local Government Sector – C, Province of Laguna
Office of the Supervising Auditor
Provincial Capitol Compound, Sta. Cruz, Laguna

October 8, 2018

Hon. Rodelio H. Reyes

Punong Barangay
Barangay Del Carmen
Alaminos, Laguna

Dear Punong Barangay Reyes:

We are pleased to transmit the report on the results of the audit on the accounts and
operations of Barangay Del Carmen, Alaminos for the Calendar Years 2015 and 2016,
pursuant to Section 43 of Presidential Decree No. 1445, otherwise known as the
Government Auditing Code of the Philippines, and in line with the Commission’s effort
towards informing management on how fiscal responsibility has been discharged.

Our audit was conducted in accordance with generally accepted state auditing standards,
and we believe that it provided reasonable bases, for the results of audit.

The audit report, which was prepared by Ms. Aida A. Advento, Audit Team Leader and
Mr. Jerome R. Mangundayao, Audit Team Member, consists of the Independent
Auditor’s Report, the Audited Financial Statements, the Observations and
Recommendations, the Status of Implementation of Prior Years’ Audit
Recommendations, and the Annexes.

We expressed a qualified opinion on the fairness of the presentation of the financial

statements of Barangay Del Carmen, Alaminos in view of the exceptions noted in audit
as stated in the Independent Auditor’s Report in Part I of this report.

The significant observations and recommendations that need immediate action among
others, are as follows:

1. The accuracy, reliability and existence of the reported balances of the Property, Plant
and Equipment (PPE) account of P799,047.67 and P849,947.67 for Calendar Years
(CYs) 2015 and 2016, respectively, remained doubtful due to the continuous failure
of the barangay to conduct annual physical inventory and submit the required Report
on the Physical Count of Property, Plant and Equipment (RPCPPE) and inadequacy
of property records.

We recommended that the Punong Barangay:

 create an inventory committee to conduct actual physical count of the Barangay’s

PPE and to render the corresponding RPCPPE not later than the 31st of January of
 the following year, for approval. The COA Audit Team shall be furnished of
copies of the approved RPCPPE; and

 direct the Barangay Record Keeper to maintain PPE Register and complete
subsidiary records for the Barangay’s PPE and see to it that the accounting
records are reconciled with the approved RPCPPE and property records of the
Barangay Treasurer.

2. Depreciation was not provided for depreciable PPE contrary to Section 4 of Manual
on New Government Accounting System (MNGAS) for Local Government Units
(LGUs), Volume I, and Sections 1 and 2 of COA Circular No. 2003-007, thus
rendering the reported balances inaccurate.

We recommended that the Municipal Accountant provide depreciation on all

depreciable PPE to come up with the accurate and reliable valuation of the reported
assets.

The other audit findings/observations together with the recommended courses of action
which were discussed by the Audit Team with the concerned Barangay officials and staff
during the exit conference conducted on November 13, 2017 are discussed in details in
Part II of this report.

We respectfully request that the recommendations contained in Part II of the report be

implemented and that this Commission be informed of the action taken thereon by
accomplishing the Agency Action Plan and Status of Implementation Form (copy
attached) and returning the same within 60 days from the date of receipt hereof.

We acknowledge the support and cooperation that you and your staff extended to the
Audit Team, thus facilitating the submission of this report.

Very truly yours,

COMMISSION ON AUDIT

By:

VILMA M. MARTIN
OIC-Supervising Auditor

Copy furnished:

- The Municipal Mayor

Alaminos, Laguna

- Sangguniang Bayan
Alaminos, Laguna