STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT

RECOMMENDATIONS

Monitoring on the implementation of 14 partially and unimplemented audit

recommendations contained in CY 2014-2016 Annual Audit Reports revealed that as
of December 31, 2018, three were fully implemented, eight were partially
implemented and three were not implemented.

Status of
Implementa
Observations and Management’s Auditor’s
Reference tion
Recommendations Actions Validation
(Fully/Parti
ally/None)
AAR 2016 The Municipality had an The Office of Partially In the process of
unreconciled difference of the Municipal Implemented reconciling the
P171.55 million between Accountant will discrepancy
the books and the Report on put forth more between the
the physical count of effort in accounting
Property, Plant and cooperation records and the
Equipment thus, casting with the Report on the
doubt on the validity, Inventory Team Physical Count
existence and reliability of to reconcile the of PPE.
the reported Property Plant records of PPE.
and Equipment (PPE)
valued at P221.73 million.

We recommend that
management direct the
Municipal Accountant to
reconcile the discrepancy
between the accounting
records and the Report on
the Physical Count of PPE.
AAR 2016 Not No action taken
Fund transferred to Implemented by the
NGOs/POs by the Management
Municipality of Cantilan of
Surigao del Sur totaling P
940,000.00 remained
unliquidated as of
December 31, 2016,
contrary to the provisions of
COA Circular No. 2007-001
dated October 25, 2007.

We recommend the
Municipal Accountant to
send follow up demand
letters requiring the
submission of the Fund

42
 Utilization/Liquidation
Report from NGOs/POs
with outstanding balances to
ascertain that funds
granted were utilized in
accordance with
Memorandum of Agreement
(MOA). Moreover, direct
the Program coordinators
of the projects to monitor
the compliance per
memorandum of agreement
to guarantee that the fund
transfers were utilized for its
intended purpose.
AAR 2016 The collections of collectors Partially During cash
were not remitted intact to Implemented examination we
the Liquidating Officer noted that
contrary to Section 307 of collections were
the Local Government Code not remitted
and Section 29, Vol. I of intact to the
NGAS for LGUs. The delay liquidating
in remittance ranged from officer.
1 to 115 days thus, exposing
government funds to
possible misuse.

We recommended that
management instruct the
Municipal Treasurer to
closely monitor and strictly
require the revenue
collectors to regularly
remit intact their collections
to prevent the use of public
funds for their own
personal purposes.

AARDisbursDisbursement
2016 vouchers and Partially Submission of
financial reports for CY 2016 Implemented disbursement
were submitted to the Office vouchers and
of the Auditor beyond the other Financial
reglementary period reports were not
prescribed under Section submitted on
7.2.1a of COA Circular No. time.
2009-006, thus precluded the
Auditor from conducting
timely audit of the financial
transactions of the
Municipality and from

43
 promptly informing
management of deficiencies
noted, if any.

We recommended that
management direct the
Municipal Accountant to
strictly observe the
provisions of Section 7.2.1a
of the COA Circular No.
2009-006 by submitting
disbursement vouchers and
financial reports
within the timeframe.
AARThe
2016Accountant failed to prepare Not No BRS
monthly bank reconciliation Implemented submitted for
statement for the Calendar CY 2017
Year 2016 in violation of
Section 74 of Presidential
Decree 1445, thus the
account balance could not be
determined at any given
time.

We recommended that
management direct the
Municipal Accountant to
prepare and submit the
Monthly Bank Reconciliation
Statement to the Office of the
Auditor pursuant to Section
74 of PD 1445 and COA
Circular No. 96-011.

The Municipal accountant

should maintain subsidiary
ledger for each account for
easy preparation of the
monthly bank reconciliation
statement. At it should be
prepared per bank account
to established accurate
balances of all bank
accounts.
AAR 2016 Controlled dump operation Partially Compliance with
for the disposal of solid Implemented RA 9003 is on
waste of the municipality is going. Budget
not in accordance with the limitation
guidelines set in Section 39 constraints
and 41 of RA 9003.

44
 We recommend
management to strictly
comply with the minimum
standards and operating
requirements of a
controlled dumped in
accordance to Sections 39
and 41 of RA 9003.
AAR 2016 The management failed to Partially Establishment of
establish a Materials Implemented Materials
Recovery Facility in the Recovery
dumpsite contrary to Facility
Section 32 and 33 of RA construction is
9003. ongoing.

We recommend that
management ensure the
compliance on the
guidelines for establishment
of Materials Recovery
Facility (MRF) in
accordance to Sections 32
and 33 of RA 9003

Re: 20% ineligibles Fully

implemented
AAR 2016 Had the appropriations Partially Disbursement
amounting to P1,136,701.98 Implemented from 20% DF
from the twenty percent were
(20%) Development fund administrative in
been utilized strictly in nature like
accordance with the wages for
purposes for which these maintaining
were intended, the socio- cleanliness of the
economic and streets, parks and
environmental programs, etc.
projects and activities could
have been fully
attained to the benefit of all
the constituents of the
Municipality of Cantilan.

We recommended that
management observe
strictly DILG-DBM Joint
Memorandum Circular No.
2011-1, DILG
Memorandum Circular No.
2010-138 and DILG-DBM

45
 Joint Circular No. 1 as to
the proper utilization of
the 20% development fund
which shall not be used for
purposes other than what
was contemplated by said
law and regulations.
AAR 2016 25 planned projects for CY Partially Barangay
2016 funded under the 20% Implemented Captains were
Development Fund informed during
amounting to P5,996,000.00 the MDC and
were not implemented due Quarterly
to lack of coordination Meeting to
between MPDC and implement the
implementors of the propose projects
programs/projects/activities, and programs
thus depriving the
beneficiaries of the timely
benefits that may be derived
therefrom had all the
projects been completed as
planned.

We recommend to the
various implementing
divisions of the municipality
to properly plan, closely
monitor, and conduct
proper supervision by
adopting effective
strategies, procedures and
controls to ensure timely
accomplishments of
planned projects,
programs and activities.
Re: RAAF Fully
implemented
AAR 2015 Non-submission of the Partially Starting
Report and Consolidated Implemented November 2017
Report of Accountability for RAAF were
Accountable Forms. submitted to the
Auditors Office.
It is recommended that the
Municipal Treasurer
monitor strictly the
issuance of accountable
forms and instruct all
accountable officers to
render the Report of
Accountability for

46
 Accountable Forms (RAAF)
and subsequently prepare
the Consolidated Report of
Accountability for
Accountable Forms
(CRAAF) every end of the
month. Attach also in the
CRAAF breakdown of all
issuances made to
effectively monitor the
receipt, issuance, and
cancellation of all
accountable
forms in the position of
each accountable officers.
In addition, instruct her to
verify the reported unused
accountable forms through
the conduct of physical
inventory to validate its
actual existence.

AAR 2013 The Municipal Treasurer One personnel Not Stock cards and
failed to maintain Stock is assigned to Implemented Property Cards
Cards (SC) and Property update and were not
Cards (PC), which resulted maintain the maintained.
to the failure to prepare stock cards and
Reports on the Physical property card.
Counts of Inventories
(RPCI) and Reports on the
physical counts of PPE
(RPCPPE). Thus, the
Inventory Committee does
not have bases to conduct
the physical counts of
inventories and PPEs, as
required under Section 44
and 45 of the New
Government Accounting
Systems Manual for LGUs.

Direct the Municipal

Treasurer to maintain an
updated stock card (SC) for
each inventory items and
property card (PC) for each
PPE items, which shall be
the bases in preparing the
Reports on the physical
counts of inventories and

47
 Reports on the physical
counts of PPEs.

Likewise, direct the

inventory committee to
conduct immediate physical
stocktaking of inventories
and physical counts of
property, plant and
equipment (PPEs).

If no existing inventory
committee, create and
inventory committee
composed of a Chairman
and two (2) members
through the issuance of an
Office Order, and direct
said committee member to
conduct an immediate
physical counts of
inventories and PPEs.

AAR 2014 The Municipality paid a BAC was Partially Regulations

total amount of reorganized Implemented under RA 9184
P1,628,042.12 for the after two were not strictly
procurement of supplies and months of the followed
materials, drugs and new elected
medicines which were not officials take
conducted in accordance oath of office.
with the guidelines provided
under the Revised
Implementing Rules and
Regulations of Republic Act
(RA) 9184.

We recommend to follow
strictly the provisions and
standards set forth under
the Revised IRR of RA 9184
in matters of procurement.
Moreover, direct the
Municipal Budget Officer
not to approve the
Obligation Request for
procurement not included in
the APP and other
proposed payments without
available appropriation. On

48
 the other hand, direct also
the Municipal Accountant
not to process payment with
incomplete documentation.

AAR 2014 Meals and snacks Budget Partially

amounting to P304,009.69 preparation Implemented
incurred to accommodate must be strict
guests on official business,
meetings, conferences and
celebrations were charged to
expenses like Other MOOE,
Other Professional Services
and Other Supplies
Inventory, in the absence of
an appropriation for
Representation Expenses
contrary to Section 4 (par.
1) of PD No. 1445 and
Section 336 of RA 7160,
thereby exposing funds to
misuse.

We recommend that the

municipality refrain from
disbursing funds not
appropriated for food and/
or representation expenses
but rather provide for
representation expenses in
the future budgets. In
addition, refrain from or
exercise prudence in
incurring expenses for
meals and snacks served
during regular meetings,
sessions, hearings or
conferences to be
responsive to the needs of
the constituents and to
ensure that government
resources are used
equitably and wisely.
AAR 2014 The municipality failed to BAC is Not
submit the Procurement reorganized by Implemented
Monitoring Report (PMR)to the present
the GPPB as required under administration
Section 12.2 of the
Implementing Rules and

49
Regulations (IRR) of RA
9184 due to non-preparation
of the same by the Bids and
Awards Committee (BAC),
thus affecting the
municipality’s adherence to
the principle of
transparency, system of
accountability and public
monitoring in its
procurement process.

We recommend to require
the BAC to prepare
regularly the Procurement
Monitoring Report (see
attached PMR Form) for all
procurement activities of
the municipality for
submission to the GPBB
every semester as required
under Section 12.2 of the
IRR of RA 9184. A printed
copy of the report shall be
furnished to this Office to
allow the audit team to
verify the status of
procurement activities
specified in the Annual
Procurement Plan as basis
for auditor’s action, if any.

50
 Monitoring on the implementation of 14 audit observations contained in CY
2017 Annual Audit Reports revealed that as of December 31, 2018, two were fully
implemented, nine were partially implemented and three were not implemented.

Status of
Implementa
Observations and Management’s Auditor’s
Reference tion
Recommendations Actions Validation
(Fully/Parti
ally/None)
The correctness of the
agency’s property, plant
and equipment which
are stated in the
statement of financial
position at a
carrying amount of
P 233,754,316.44 as of
December 31, 2017
could not be validated
because of the failure of
the agency to prepare
and submit the
reconciliation of the
result of the inventory
Not No inventory
AAR 2017 count with that of the
Implemented report
property and accounting
submitted
records.

We recommended that
Management direct the
Inventory committee
together with the
property and
accounting units to
prepare the
reconciliation of the
result of the inventory
count with the Property
and Accounting
records.

51
 Bank reconciliation
statement for cash in
bank account was not
prepared, thus the
difference of
P12,844,039.72
between the book and
the bank balances as of
December 31, 2017 was
not accounted for.
Partially On-going Bank
AAR 2017
We recommended the Implemented Reconciliation
Management that
reconciliation of the
cash in bank should be
performed pursuant to
Section 3.2 of COA
Circular No. 96-011
dated October 2, 1996
to establish accurate
balances of all bank
accounts.

52
 The inability of the
Municipal Accountant
to reconcile the Due
from Other Funds and
Due to Other Funds
resulted to an
unreconciled difference
of P5,163,074.99
contrary to Section 111
(2) of Presidential
Decree No. 1445 and
COA Circular No.
2015-009.

We recommended
Partially On-going
AAR 2017 Management to direct
Implemented Reconciliation
the Municipal
Accountant to reconcile
the intra-agency
receivables and intra-
payables accounts and
effect adjustments to
reflect the correct
account balances thus
ensuring the
presentation of reliable
date on the financial
reports of the LGU as
of a given period of
time.

AAR 2017 Cash advances Partially There are still

amounting to Implemented unliquidated
P14,615,524.07 Cash Advances
remained unliquidated as per
as of December 31, monitoring in
2017 due to inadequate Third (3rd)
internal control on Quarter
granting, utilization and
liquidation contrary to
Sections 4.1.2, 5.7 and
5.8 of COA Circular
No. 97-002, thus,
exposing public funds
to possible loss and
misappropriation.

We recommended that
Management exert
extra effort to require

53
 employees to liquidate
their outstanding cash
advances and
strengthen the internal
control on granting,
utilization and
liquidation of cash
advances.
The Municipality of
Cantilan failed to
submit copies of
contracts and all
pertinent supporting
documents relative to
procurement of goods
There were no
and infrastructure
submission of
projects to COA for
Contracts for
auditorial review and
Audit Review,
technical evaluation
except for the
within five (5) working
Partially one (1) contract
AAR 2017 days from the execution
Implemented was submitted
of the contract contrary
by the
to paragraph 3.1.1 of
Accountant
COA Circular No.
himself in
2009-001.
December
2018
We recommended that
the Management to
submit immediately to
COA the original
contracts and all
pertinent supporting
documents.

54
 Fund transfers from
various National
Government Agencies
(NGAs) amounting to
P24,808,513.73 were
remained unutilized
and projects were
unimplemented as of
December 31, 2017,
thus affect the
efficiency and
economical utilization
of government funds.
Likewise project
objectives were not There were still
Partially
AAR 2017 attained and deprived unliquidated
Implemented
the beneficiaries of the Fund Transfers
benefits that could have
been derived from it.

We recommended that
Management
immediately implement
the projects/activities
for an efficient and
economical utilization
of government funds
and to attain the
desired objective of the
projects.

Non-prioritization of
GSIS loans as
deduction from the
salaries of employees,
contrary to Sections
14.2 and 14.3 of
Implementing Rules
and Regulations (IRR)
Fully
AAR 2017 of Republic Act No.
Implemented
8291.

We recommended that
the Management give
priority to the GSIS
loan in accordance
with sections 14.2 and
14.3 of IRR of RA 8291.

55
 The Municipality
continues to use a
Controlled Dump site
instead of a Sanitary
Landfill in contrary to
Section 37 of Republic
Act No. (R.A.) 9003 -
“An Act Providing for
an Ecological Solid
Waste Program,
Creating the Necessary
Institutional
The Focal
Mechanisms and
Person in
Incentives, Declaring
MENRO was
Certain Acts Prohibited
Partially not available to
AAR 2017 and Providing
Implemented meet with the
Penalties,
Auditors
Appropriating Funds
regarding this
therefor, and Other
matter
Purposes”, thereby
depriving the
constituents the benefits
of which this Act is
created.

We recommended strict
adherence to the
provisions of Section 37
of Republic Act No.
9003 on the use of
Sanitary Landfill.

56
 The Management failed
to allocate one percent
(1%) of the Internal
Revenue Allotment for
the strengthening and
implementation of the
programs, projects and
activities of the Local
Council for the
Protection of Children
contrary to Section 15
of Republic Act 9344.

We recommended that Only

the Management Attributions
appropriate one Not were provided
AAR 2017
percent of the Local Implemented for the years
Government Unit’s 2017, 2018 and
Internal Revenue 2019
Allotment as required
in Section 15 of
Republic Act 9344 and
to prepare the Local
Development Plan and
Local Investment Plan
for Children with
programs, projects and
activities that promote
and protect the rights
of the children and
disadvantaged sector of
society.
AAR 2017 The Fidelity bonds of Fully
some Accountable Implemented
Officers were not
sufficient to cover their
accountabilities on cash
advances granted to
them contrary to Item
5.1 of the Treasury
Circular No, 02-2009
dated August 6, 2009.

In view of the above

circumstance, we
recommend that the
Management increase
the amount of the
fidelity bond of the
Accountable Officers to

57
 cover the maximum
accountability that they
handle for a given
period, in accordance
with the Revised
Schedule of Bonds
provided by the Bureau
Of Treasury, so as to
protect the interest of
the LGU in case of
losses resulting to
unlawful use of
government funds and
losses attributable to
negligence in the
safekeeping of funds.
The actual results
indicated in the GAD
Accomplishment
Report were not
supported with the
documents required in
Section 4 C.8 5 of
PCW-DILG-DBM-
NEDA Joint
Memorandum Circular
No. 2013-01.

We recommend that
Management require
Partially
AAR 2017 the GAD Focal Person
Implemented
to include in the
submission of the GAD
AR the reports
/documents mentioned
in Section 4 C.8 (5) of
the PCW-DILG-DBM-
NEDA Joint
Memorandum Circular
No. 2013-01 to
facilitate the
monitoring, evaluation
and substantiation of
the reported
accomplishments.

58
 The GAD Focal Point
System did not
administer the
Harmonized Gender
and Development
Guidelines (HGDG) for
the
programs/projects/activi
ties attributed to the
GAD budget as
required in Section 4
C.4 of PCW-DILG-
DBM-NEDA Joint
Memorandum Circular
(JMC) No. 2013-01
resulted to the
preparation of an Partially
AAR 2017
inaccurate GAD Plan Implemented
and Budget (GPB) and
GAD Accomplishment
Report.

We recommended that
Management require
the GFPS to administer
HGDG for those LGU
programs and projects
attributed wholly or a
portion thereof during
the preparation of the
GAD plan and budget
and the
accomplishment report.

59
 The prior years’
unexpended balances of
Local Disaster Risk
Reduction and
Management Fund
(LDRRMF) were not
transferred to the
Special Trust Fund
under the account
“Trust Liability-
DRRM” in the Trust
Fund books. Further,
subsidiary ledgers were
not maintained for the
Municipality’s
unutilized DRRMF by
year of transfer contrary
to the provisions of
Sections 5.1.10 and
5.1.12 of COA Circular
No. 2012-002 dated
September 12, 2012. The assigned
personnel is on
We recommended to Partially the process of
AAR 2017
the Municipal Implemented providing
Accountant to details for the
determine the transfer
unexpended balances
of prior years’
LDRRMF and facilitate
transfer of these
amounts to the Special
Trust Fund in
compliance to Section
5.1.10 of COA Circular
No. 2012-002 dated
September 12, 2012.
Moreover, maintain
subsidiary ledgers for
the transferred
unutilized DRRMF to
the special trust fund
by year of transfer in
order to monitor its
status in compliance to
Sections 5.1.12 of the
same circular.

60
 The absence of
monitoring and
evaluation system on
the Municipality’s
programs, projects and
activities (PPAs)
precluded the
concerned Municipal
Officials from assessing
the efficiency and
effectiveness of the
implementation and
introducing corrective
measures leading to the
attainment of its goals
and objectives.

We recommended that
Management require
all implementing offices The submission
to submit Quarterly of GPPAs was
Reports on Government Not delayed and the
AAR 2017
Projects, Programs and Implemented MPDC was
Activities from all waiting for the
sources to the Office of budget
the Municipal Planning
and Development
Coordinator who will
then consolidate the
reports for submission
to Municipal Offices for
monitoring and
decision-making
purposes. And conduct
regular periodic
meetings with the heads
of departments/offices
to assess whether the
implementation of
PPAs is proceeding as
planned and to ensure
that implementation
constraints, if any, are
immediately resolved.

61