2018 AFR Local Govt Volume II

CY 2018
Annual Financial Report
Local Government
Volume II
CY 2018
ANNUAL FINANCIAL REPORT
LOCAL GOVERNMENT
Volume II
TABLE OF CONTENTS
Page
PART I Consolidated Summary of Audit Opinions on the

Fairness of Presentation of the Financial Statements
 NCR – National Capital Region ................. 1

 CAR – Cordillera Administrative Region ....... 10
 I – Ilocos Region ..................................... 24
 II – Cagayan Valley .................................. 49
 III – Central Luzon .................................... 77
 IV-A – CALABARZON ................................ 104
 IV-B – MIMAROPA ..................................... 171
 V – Bicol Region ...................................... 193
 VI – Western Visayas ................................ 218
 VII – Central Visayas .................................. 247
 VIII – Eastern Visayas .................................. 279
 IX – Zamboanga Peninsula ........................ 326
 X – Northern Mindanao ............................ 354
 XI – Davao Region ..................................... 388
 XII – SOCCSKSARGEN ............................ 400
 XIII – Caraga Region .................................... 412
 XVI – Negros Island Region ......................... 437
 ARMM – Autonomous Region in Muslim
Mindanao ............................................ 451
PART II Audit Observations and Recommendations .................... 471
PART III Summary of Audit Observations and

Recommendations on Barangays ................................... 500
PART IV Status of Implementation of Prior Years’ Audit

Recommendations on Provinces, Cities, and
Municipalities ................................................................... 512
PART I
CONSOLIDATED
SUMMARY OF
AUDIT OPINIONS
Consolidated Summary of Audit Opinions
Rendered on the Fairness of Presentation of the Financial Statements
Calendar Year 2018
LGU AUDIT OPINION Reasons for Opinion other than Unqualified
National Capital Region (NCR)
Cities:
Caloocan Qualified  Cash in Bank - Local Currency, Current Account
(CIB-LCCA), Cash in Bank - Local Currency, Savings Account
(CIB-LCSA) and Cash in Bank - Local Currency, Time Deposit
(CIB-LCTD) amounting to P1.837 billion, P1.372 billion and P0.080
billion, respectively, or a total of P3.289 billion did not reconcile
with the cashbook and confirmed bank balances of P2.875 billion
and P3.306 billion, respectively, compromising the accuracy,
correctness and reliability of the cash balances appearing in the
financial statements;
 Property, Plant and Equipment (PPE) accounts totaling P15.956

billion in the books and P13.709 billion in the Report on the
Physical Count of Property, Plant and Equipment (RPCPPE)
showed a net variance of P2.247 billion due to (a)
unidentified/unspecified forwarded balances of P2.952 billion; (b)
misclassified accounts and erroneous/double entries of P706.491
million; and (c) inclusion of small tangible items amounting to
P29.642 million, thus, compromised the existence, validity and
reliability of the PPE balances appearing in the financial
statements; and,
 Due from Other Funds and Due to Other Funds under the GF, SEF
and TF at year end totaling P194.165 million and P210.577 million,
respectively, showed a total difference of P16.412 million, thereby,
casting doubt on the correctness and reliability of the balances.
Las Piñas Qualified  Property, Plant and Equipment (PPE) accounts with total
acquisition costs of P2.401 billion and P1,109 billion, under the
General Fund (GF) and Special Education Fund (SEF),
respectively, could not be ascertained due to (a) undetermined
details of PPE subsidiary ledger (SL) beginning balance of
P779.163 million; (b) non-conduct of actual physical inventory for
the current year; and (c) unreconciled discrepancy of P213.180
million between the balances per books and the General Services
Office (GSO) records; and,
 Non-dropping of disposed unserviceable properties from the books

in the amount of P31.050 million resulted to the overstatement of
the PPE balances reported in the financial statements. Moreover,
the recognition of Miscellaneous Income relative to the receipt from
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sale of unserviceable properties does not reflect the correct gain
or loss on the sale of unserviceable asset in the financial
statements.
Makati Unqualified
Malabon Qualified  Property, Plant and Equipment (PPE) accounts of P2.487 billion is
unreliable due to (a) unreconciled difference of P315.766 million
between the book balance and the Report on the Physical Count
of PPE (RPCPPE) of P2.171 billion;
(b) presence of items costing below P10,000 amounting to
P63.021 million which should have been reclassified to the semi-
expendable accounts; and (c) inclusion of unserviceable items
amounting to P5.152 million;
 Cash account balance of P702.969 million is unreliable due to the

(a) unrecorded disbursements and unidentified reconciling items
in the amount of P19.772 million and P5.894 million, respectively,
carried over from CYs 1999 to 2003 in the General Fund (GF)
books; and (b) discrepancies between the book and bank balances
of P4.684 million for the Special Education Fund (SEF), P1.438
million for Trust Fund (TF) and P.386 million for the City of Malabon
University (CMU), which cannot be adjusted/ascertained in the
absence of supporting documents and Bank Reconciliation
Statements (BRS); and,
 Failure to conduct physical inventory of supplies and materials and

maintain supplies ledger cards and other inventory records to
support the balances per books, thereby casting doubt on the
correctness of the inventory accounts balance of P27.890 million
at year-end.
Mandaluyong Qualified  Property, Plant and Equipment (PPE) year-end account balances
totaling P5.344 billion could not be ascertained due to (a)
unreconciled discrepancies totaling
P262.442 million between the balances appearing in the Report on
the Physical Count of PPE (RPCPPE) and records of the City
Accounting Department (CAD); (b) non-recognition of the 25
percent portion of completed public infrastructure projects for CYs
2016 to 2018 totaling P111.669 million; (c) non-derecognition of
the demolished properties in the PPE accounts amounting to
P52.172 million; and (e) unrecorded 435 donated/procured
property without cost;
 Cash - Local Treasury reported at P118.759 million is unreliable

due to discrepancy of P66.144 million between the General Ledger
balance and the Treasurer’s Cashbook balance partly caused by
unrecorded reconciling items of prior years with no supporting
documents;
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 Cash in Bank (CIB) accounts consisting of Local Currency, Current
Accounts, Local Currency, Time Deposits and Local Currency,
Savings Account in the amount of P1.737 billion, P522.430 million
and P1.150 million, respectively, could not be ascertained due to
(a) unrecorded/ unadjusted reconciling items pertaining to CY
2018 and prior years amounting to P316.209 million; (b) net
discrepancy of P224.550 million between the Subsidiary Ledger
(SL) balances and treasury records; (c) absence of Bank
Reconciliation Statements (BRS) on three bank accounts with a
balance of P3.822 million; (d) non-inclusion of two current
accounts in the CIB balance amounting to P3.516 million that was
confirmed by the bank; and (e) inclusion of closed account and
dormant time deposit account amounting to P9.000 million and
P1.011 million, respectively; and,
 Real Property Tax (RPT) and Special Education Tax (SET)

Receivable accounts amounting to P184.805 million and P167.027
million, respectively, are not reliable due to (a) setting-up of the
receivable accounts based on income estimates instead of the
Certified List of Taxpayers; and (b) discrepancy between the
balances of the RPT/SET Receivable and the List of Real Property
Tax Delinquencies as of December 31, 2018.
Manila Adverse  Cash in Bank (CIB) accounts totaling P11.772 billion cannot be
ascertained due to (a) net discrepancy of P391.051 million
between the book and bank balances due to
unrecorded/unadjusted reconciling items; (b) variance of P682.876
million between the General Ledger (GL) and Treasury records; (c)
difference between the bank and Treasury records of P291.825
million; and (d) absence of Subsidiary Ledgers (SLs) for the
General Fund (GF);
 Reconciling items in the BRSs for the current and prior years in the
net amount of P4.692 million and P13.470 million, respectively,
were not adjusted, thus, rendering the correctness of the balances
of the affected accounts unreliable;
 PPE account of P23.696 billion, net of Construction in Progress

(CIP), could not be ascertained due to the noted discrepancy of
P21.578 billion when compared against the Report on Physical
Count of Property, Plant and Equipment (RPCPPE) of P2.118
billion;
 Due to NGAs account of

P154.682 million at year-end was doubtful due to (a) existence of
negative balance of P3.353 million in the GF and disparity between
the GL and SLs for TF by P.068 million and (b) improper
maintenance of SLs and existence of dormant accounts amounting
to P33.302 million aged eight to 11 years, thus, the account was
not fairly presented in the financial statements (FSs); and,
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 Acounts Payable (AP) amounting to P4.745 billion was not
provided with complete SLs, thus, details could not be easily
verified and confirmed. Of the amount, P2.087 billion pertains to
the current year of which P1.196 billion was not supported with
sufficient documents, hence, validity and propriety of the claims
could not be established.
Marikina Qualified  Inventories - Construction Materials, Office Supplies and Drugs

and Medicine were misstated due to higher balances per books as
compared to the Report on Physical Count of Inventory (RPCI),
with variances amounting to P50.925 million, P9.388 million and
P3.384 million, respectively or a total of P63.696 million;
 Property, Plant and Equipment (PPE) account was doubtful due to

(a) unreconciled discrepancies between the Report of Physical
Count of PPE (RPCPPE) and accounting records, showing a net
variance of P39.633 million; and (b) absence of documents
showing the details of several PPE totaling P171.088 million which
resulted to the non-determination of the economic useful life of
these assets for the provision of depreciation. Also, various
improvements in CY 2018 totaling P3.743 million were classified as
PPE instead of Maintenance and Other Operating Expenses
(MOOE); and,
 Terminal Leave Benefits (TLB) amounting to P0.876 million was

derecognized in the books of account, misconstruing Section 38 of
CSC Memorandum Circular (MC) No. 41 series of 1998, thus, the
obligation of the City was extinguished without a valid basis.
Muntinlupa Qualified  Property, Plant and Equipment (PPE) accounts totaling P7.315
billion were unreliable due to unreconciled net discrepancy of
P232.465 million between the Report on the Physical Count of PPE
(RPCPPE) and PPE book balances.
Navotas Unqualified
Parañaque Qualified  Cash in Bank account balance totaling P3.142 billion as at

December 31, 2018 could not be substantiated due to the difficulty
in securing proper documentation as basis in ascertaining the
validity of reconciling items which accumulated since CY 1998 and
beyond amounting to P(118.362) million and effect the necessary
adjustments in the accounting records; and,
 PPE account balance of P11.144 billion could not be ascertained

due to (a) unreconciled discrepancies of P9.873 billion between the
various PPE account balances in the books and in the Report on
the Physical Count of Property, Plant and Equipment (RPCPPE);
(b) inclusion of the cost of the old Legislative Building which had
already been demolished in CY 2009; and (c) incomplete physical
count of inventory.
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Pasay Qualified  Cash – Local Treasury account balance of P0.988 million was not
fairly presented as its beginning balance included the amount of
P0.998 million, which was not backed-up with actual cash on hand
and has been carried in the books in the past five years. Moreover,
adjusting entries to the account made in CY 2018 amounting to
P100.00 and P10,862.80, are erroneous and not valid,
respectively;
 Contingent asset pertaining to the claim against the Metropolitan

Manila Development Authority (MMDA) amounting to P84.147
million as of December 31, 2018, which the City is pursuing through
legal processes albeit with uncertain outcome, was recognized
under the Due from National Government Agencies account rather
than merely disclosing its nature in the Notes to Financial
Statements, as provided in the relevant provisions of Paragraph 18,
IPSAS 19, thus, the Due from National Government Agencies and
the related accounts were overstated by P84.147 million;
 Non-adjustment of the Insurance Expenses account for the

unexpired portion, which is contrary to Paragraph 7 of the IPSAS
1, resulted to the understatement and overstatement of the Prepaid
Insurance and Insurance Expenses accounts, respectively, by
P7.240 million;
 PPE accounts totaling P7.583 billion were unreliable due to (a)

the recognition at P1.00 each of four parcels of land of the private
domain of the government reserved by the State for the City as
one-stop government center pursuant to Proclamation No. 1303,
with fair market value (FMV) per tax declaration of P6.540 million;
(b) the non-derecognition of the cost of replaced/removed materials
incident to the repairs, renovation and rehabilitation made on
buildings and structures totaling P4.938 billion; and (c) the non-
reclassification of completed projects valued at P64.065 million
from the Construction in Progress (CIP) accounts to the
appropriate PPE accounts;
 Accounts Payable and the Government Equity accounts were

overstated and understated by P14.026 million, respectively, due
to (a) double set-up of payables totaling P3.710 million; (b)
improper recording as expense of settlement/payment of payables
amounting to P1.803 million; (c) recording of outstanding payables
on utilities which were higher by P9.952 million than the billing
statements from the service providers; and (d) the non-set-up of
Accounts Payable upon incurrence of obligations, but the same
was debited upon payment amounting to P1.439 million. Further,
outstanding payables totaling P0.104 million were not supported
with complete documents to establish the validity of claims
contraryto Section 4 (6) of PD No. 1445; and the Due to Officers
and Employees account totaling P2.330 million was erroneously
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presented as Accounts Payable in the Statement of Financial
Position;
 Due to GOCCs account was understated by P66.369 million

caused by the non-recognition of liability of the City to the Philippine
Reclamation Authority RA(P) representing the cost of documentary
stamps and value added tax (VAT) to be shouldered by the City as
provided in the Compromise Agreement between the parties for the
transfer of land owned by the PRA to the City as settlement for
unpaid real property tax;
 Furniture and Fixtures, Accounts Payable, Government Equity and

Water Expense accounts were understated by P1.375 million,
P8.395 million, P5.837 million and P6.530 million, respectively,
while the Other Maintenance and Operating Expenses and Other
Supplies and Materials Expenses accounts were overstated by
P3.972 million and P1.375 million, respectively, due to (a)
erroneous recognition in CY 2018 of prior year’s expenses and the
non-recognition of unpaid water expenses incurred in 2018, which
is not in accordance with the accrual basis of accounting under
IPSAS 1; and (b) erroneous recognition of procured furniture and
fixtures as direct expense instead of asset, which is not in
conformity with the accounting standards under IPSAS 17; and,
 Status of accounting records and absence of documents did not

allow the application of alternative audit procedure to establish the
validity of the affected accounts.
Pasig Qualified  Land account balance of P1.024 billion does not reconcile with the
Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) amounting to P205.573 million, showing a discrepancy
of P818.159 million caused by some items that are without cost in
the RPCPPE. Real Property Ledger Cards (RPLC) are maintained
for 13 lots only totaling P33.692 million, while the description of 10
items totaling P15.012 million is more appropriately classified as
Road Networks;
 Property, Plant and Equipment (PPE) accounts, except Land, could

not be reliably established due to (a) the non-reconciliation of
property and accounting records with a total discrepancy of
P92.844 million; (b) misclassification of PPEs totaling P476.538
million; (c) non-provision of depreciation for properties totaling
P1.612 billion and lapses/errors noted in the recording and in
providing for depreciation, all contrary to the applicable provisions
of the New Government Accounting System (NGAS) Manual for
Local Government Units (LGUs), International Public Sector
Accounting Standards (IPSAS) and Government Accounting and
Auditing Manual (GAAM); and,
6
 Inventories aggregating P1.464 billion cannot be ascertained
because (a) the Report on the Physical Count of Inventories (RPCI)
reflected a total inventory balance of P26.550 million only; (b) the
non-reconciliation of the balances per stock cards and supplies
ledger cards due to the improperly maintained and incomplete
records of the Central Supply Office (CSO) and the City Accounting
Office (CAO), respectively; and (c) inconsistencies and delays in
the recording of acquisitions and issuances of supplies and
materials, all contrary to the applicable provisions of the NGAS
Manual for LGUs.
Pamantasan ng Unqualified
Lungsod ng Maynila
Quezon City Qualified  Various asset and liability accounts totaling P5.347 billion and
P145.981 million, respectively, initially recorded as “unreconciled
beginning balances” in the eNGAS subsidiary ledgers, are doubtful
in view of the non-reclassification of these balances to the
appropriate subsidiary ledger accounts in the absence of
supporting documents and/or details;
 151 stale checks amounting to P8.446 million were not cancelled,

contrary to Section 59 of the Manual on the New Government
Accounting System (NGAS) for Local Government Units (LGU’s)
Volume I, thus, understating the CIB-LCCA and the corresponding
liability account balances;
 Cash Advances for Payroll of P0.571 million, Advances to Special

Disbursing Officers of P160.419 million and Advances to Officers
and Employees of P57.414 million or a total of P218.405 million
remained unliquidated as of December 31, 2018 contrary to
Sections 5.1.1 and 5.1.3 of COA Circular No. 97-002 resulting in
the non-recognition of expenses in the period incurred. Moreover,
advances in the total amount of P35.843 million granted in CY 2011
and earlier years remained not liquidated despite issuance of
demand letters, contrary with the provisions of Section 9.0 of COA
Circular No. 2012-004 dated 28 November 2012. Thus, cash
advances remained outstanding and dormant and resulted to the
overstatement of Receivables and understatement of the
Expense/Equity accounts; and,
 Cost of Buildings and Other Structures amounting to P59.867

million was not derecognized in the books from the time it was
demolished in the CYs 2014-2018, contrary to Section 82 of IPSAS
17. As a result, the PPE, related Accumulated Depreciation and
Depreciation Expense accounts are overstated for CY 2018, while
the Government Equity account is understated as a result of non-
derecognition of the demolished buildings and other structures in
the previous years.
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Quezon City Qualified  Cash in Bank (CIB) - Local Currency, Current Account balances
General Hospital with an aggregate amount of P1.559 billion were unreliable due to
unadjusted/unrecorded reconciling items in the net amount of
P4.271 million, which resulted to a net understatement of the CIB
account by the same amount;
 Property, Plant and Equipment (PPE) accounts as of December 31,

2018 amounting to P1.007 billion remained unreliable due to
unreconciled net difference of P295.931 million between the
balances per books and the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE). Moreover, the
RPCPPE for fixed assets was not submitted to the Office of the
Auditor within the prescribed period; and,
 Inventory account in the amount of P114.313 million as of

December 31, 2018 could not be ascertained due to (a) non-
submission of the Report of Physical Count of Inventory (RCPI);
and (b) non-maintenance of Supplies Ledger Cards and stock
cards as required in Sections 114 and 124, Volume I of the NGAS
Manual for LGUs.
San Juan Qualified  Incomplete physical inventory taking by the Inventory Committee
and the non-reconciliation of the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) with the City Accounting
Department (CAD) records resulted in the significant positive and
negative variances of P1.494 billion and P254.979 million,
respectively, or a net variance of P1.239 billion, casting doubt on
the validity, existence, ownership and conditions of the PPE items
and the reliability of the recorded balance of the PPE account at
year-end;
 Cash - Local Treasury and Cash in Bank - Local Currency, Current

Account amounting to P147.335 million and P411.379 million,
respectively, is doubtful due to the unreconciled General Ledger
(GL) balances of the CAD and the Cashbooks of the City Treasury
Department (CTD), resulting in discrepancies totaling P11.521
million; and,
 Real Property Auction under the Trust Liabilities account

amounting to P10.124 million is unreliable due to the unreconciled
balances between the records of the CAD and the CTD.
Taguig Qualified  Unrecorded credit and debit memos and other reconciling items of
P75.907 million which include an unreconciled bank and book
beginning balance of P6.408 million, understated the Cash in Bank
- Local Currency, Current Account; and,
8
 Property, Plant and Equipment (PPE) account in the accounting

records with carrying value of P6.790 billion does not reconcile with
the Report on the Physical Count of PPE (RPCPPE) prepared by
the City General Services Office (CGSO) due to the absence of the
cost of certain inventory items totaling P4.761 billion. Further, the
Bids and Awards Committee (BAC) did not provide the CGSO with
copies of the Purchase Orders (POs) and Acceptance and
Inspection Reports (AIRs) as basis for the costing of inventory
items, thus, precluded the completion of the RPCPPE and its
reconciliation with the accounting and property records.
Valenzuela Qualified  Reconciling items under the Cash in Bank (CIB) accounts for all
funds with a net amount of P4.755 million as of December 31, 2018
remained unadjusted in the books of accounts, thus, the
correctness of the account balances appearing in the financial
statements could not be ascertained;
 Property, Plant and Equipment (PPE) accounts with an aggregate

balance of P8.804 billion could not be ascertained due to (a)
unreconciled difference of P141.945 million between the
accounting records and the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE); (b) non-maintenance of
complete Property, Plant and Equipment Ledger Cards (PPELC);
(c) undetermined details of PPE amounting to P1.329 million per
Subsidiary Ledger and Lapsing Schedule; and (d) misclassification
of PPE accounts amounting to P13.425 million; and,
 Land account amounting to P898.921 million was found overstated

by P97.769 million due to inclusion of (a) 15 percent of the market
value of land per Tax Declaration deposited in court relative to
expropriation cases filed since 2009 amounting to P48.608 million;
and (b) the difference in amount between the total assessed value
per Tax Declarationless 15 percent deposit in court for
expropriation cases amounting to P49.161 million resulting to
understatement of Other Prepayments account by P48.608 million
and overstatement of Other Provisions account by P49.161 million.
Moreover, about 661 parcels of donated land covered with original
titles and/or Deeds of Donation in the possession of the City were
still in the name of previous owners and the corresponding fair
market values were not recorded in the books of accounts.
Municipality
Pateros Unqualified
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Cordillera Administrative Region (CAR)

Abra Management Letter  Year- end financial statements, monthly accounts and financial
reports were submitted late with significant delays precluding the
conduct of timely audit of the accounts and operations of the
provincial government.
Municipalities
Bangued
Boliney Management Letter  Non-submission of the year-end financial statements and accounts
for CY 2018 as well as accomplishment reports, precluded the
Audit Team in ascertaining the current financial condition and
financial performance of the LGU.
Bucay Modified/  Non-submission of the Report of Physical Count of Local Road

Qualified Networks (RPCLRN) in its prescribed format, non-maintenance of
Local Road Network Ledger Card and Property Card as well as
non-preparation of the Local Road Map casted doubt as to the
existence, valuation, condition as well as propriety of the recorded
balance of Road Networks account amounting to P100.307 million
in the year-end financial statements;
 Construction in progress (CIP) accounts of various Infrastructure

Assets totaling P8.550million, and Buildings and Other Structures
amounting to P.447million remained uncompleted and dormant for
several years, rendering the accuracy of the recorded amounts and
existence of the assets doubtful;
 Journal entry for the set-up of Real Property Tax (RPT) Receivable
and Special Education Tax (SET) Receivable amounting to P1.100
million and P1.100 million was not supported with Journal Entry
Voucher and Certified List of Taxpayers, hence, the existence and
accuracy of the ending balances of RPT and SET Receivables
totaling P7.734 million and P7.479 million respectively, could not
be readily determined;
 Due to National Government Agencies and Due to LGUs account

totaling P7.483 million and P.075 million, respectively, were carried
over in the books and remained dormant for ten (10) years, the
purpose of which and corresponding cash funding could not be
determined if still intact, thus, casting doubt as to the validity of the
existence of such account in the Financial Statements;
 Mandatory trust liability accounts totaling P1.669 million were

carried over in the books despite the absence of pertinent
documents to support the validity of the recorded balances, casting
doubt on the fairness of presentation of the Financial Statements;
and,
 Management failed to initiate action with regards to the absence of

supporting documents for its dormant receivables totaling P1.386
million thereby, casting doubt as to the propriety and validity of the
recorded receivables.
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Bucloc Management Letter  Significant delays were noted in the submission to the Commission
on Audit of the Disbursement Vouchers (DV-all funds) and Official
Receipts. Moreover, the monthly/quarterly/year-end Financial
Statements for January to December 2018 remained un-submitted
as of to date contrary to pertinent laws and regulations, hence, the
current financial condition and financial performance of the LGU
could not be readily ascertained.
Daguioman Management Letter  Delayed submission of the disbursement vouchers and collections,
monthly trial balance, quarterly and year-end financial statements
and other reports which precluded timely review and evaluation
and the conduct of the necessary procedures.
Danglas
Dolores Management Letter  Non-submission of Pre-closing trial balances for July to December
2018, 3rd and 4th Quarterly Statements of Financial Position,
Statements of Financial Performance, Statements of Cash Flow,
Statement of Comparison of Budget and Actual Amounts, Notes to
Financial Statements and Year-end Financial Statement . There
was also delay in the submission of January to June 2018 vouchers
and non-submission on July to December 2018 vouchers.
La Paz Qualified  Property, Plant and Equipment (PPE) with a net book value of
P35.738 million representing 16.30% of total net assets of
P219.202 million and the related provisions for depreciation are
doubtful due to: (a) non-conduct/submission of the annual physical
count of PPE; (b) non-maintenance of PPE ledger and properly
cards; and (c) non-maintenance of updated Acknowledgment
Receipt for Equipment (ARE) or Property Acknowledgement
Receipt (PAR);
 Road Networks in the amount of P39.733 million representing

18.13% of total net assets of P219.202 million could not be
ascertained due to: (a) the Report on the Physical Count of Local
Road Networks lacked the required road components,
construction date and corresponding costs; (b) non-
maintenance/submission of Local Road Network Ledger Card,
Report on Local Road Network, Local Road Network Property
Cards and Road Map; and (c) no disclosure in the Notes to the
Financial Statements regarding Road Network System;
 Balance of Construction in Progress (CIP) - Infrastructure Assets

account amounting to P21.156 million is doubtful due to: (a) the
amount of P4.373 million pertaining to CIP-Roads, Highways and
Bridges per subsidiary ledger and disclosure in the Notes to the
Financial Statements did not tally with the on-going concreting of
roads totaling P7.521, million 473.49; and (b) the balance of CIP-
Irrigation, Canals and Laterals amounting to P10.572 million per
subsidiary ledger since CY 2015; thus, its being construction in
progress until now is questionable;
 Dormant Receivable accounts in the amount of P3.174 million, still

exist in the books of the agency rendering the account balance
doubtful;
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 Failure to set-up amount for Real Property Tax Receivable at the
beginning of the year for CYs 2017 to 2018 and there was no list
of taxpayers supporting previous year’s balances; thus, the validity
and propriety of the receivable balances of P.441 million and
P.102 million and entries for the collections totaling P.338 million
and P.339 million for CY 2017 and CY 2018, respectively, could
not be ascertained;
 Difference of P.137 million between balances of reciprocal

accounts Due from Other Funds of P.140 million,123.93 and Due
to Other Funds of P.278 million and non-disclosure of the nature
thereof in the Notes to Financial Statements rendered the
accounts doubtful; and,
 Significant delays in the submission to the Commission on Audit

of Financial Statements (FS) and Trial Balances (TB), Official
Receipts (OR) and Disbursement Vouchers (DV)/payrolls ranging
from 22 to 359 days, 35 to 391 days and 57 to 397 days,
respectively, precluded the timely examination of accounts, post-
audit of transactions and the conduct of other necessary audit
procedures. Also, eight (8) DVs amounting to P1.451 million,have
not been submitted for audit.
Lacub
Lagangilang
Lagayan Management Letter  Non-submission of journals, trial balances and financial statements
for the 4th Quarter on 2018; Year-end Financial statements and two
hundred thirty five (235) DVs/Payrolls amounting to P10.724 million
under General Fund, 4th Quarter accounts under 20%
Development Fund and Trust Fund.
Langiden Management Letter  Due to the non-submission of the following: 1) Journals, Trial
Balances and Financial Statements for the 4th Quarter; 2) Year-
end Financial Statements composed of Statement of Financial
Position, Statement of Financial Performance, Statement of
Changes in Net Assets/Equity, Statement of Cash Flows,
Statement of Comparison of Budget and Actual Amounts and
Notes to Financial Statements; and 3)Seven (7) DVs/payrolls
totaling P653,081.10 and December 2018 check DVs.
Licuan-Baay
Luba Modified/  Non-submission of Report of Physical Count of Local Road

Qualified Networks in its prescribed format, non-maintenance Local Road
Network Ledger Card and Property Card as well as non-
preparation of the Local Road Map casted doubt as to the
existence, valuation, condition as well as propriety of the recorded
balance of Road Networks account amounting to P114.873 million
in the year-end financial statements;
 Journal entry for the set-up of Real Property Tax (RPT) Receivable
and Special Education Tax (SET) Receivable amounting to P.445
million and P.423 million was not supported with Journal Entry
Voucher and Certified List of Taxpayers, hence, the existence and
accuracy of the ending balances totaling, P1,529 million could not
be readily determined;
12
 Due to National Government Agencies amounting to P1 million,
previously recorded as Loans Payable-Domestic, for the
implementation of the OTOP Project, remained dormant for 14
years, thus, validity of the said amount could not be determined.
 Trust Liability pertaining to unexpended / unobligated balance of

the LDRRMF from prior year and in current year amounting to
P.137 million and P.819 million respectively were not recognized
and transferred to a Special Trust Fund account at year-end.
 Due from NGOs/POs amounting to P.355 million aged more than

1 year remained unliquidated, hence the current asset is overstated
while the corresponding expense account is understated by the
same amount. Moreover, loan assistance to PO granted in CY
2018 amounting to P.050 million was posted in the ledger as Other
Receivables instead of Due from NGOs/POs.
Malibcong Management Letter  Non-submission of the disbursement vouchers, collections,

monthly trial balance, quarterly and year-end financial statements
and other reports which precluded timely review and evaluation
and the conduct of necessary procedures.
Manabo Qualified  Non-submission of Report on the Physical Count of Local Road

Networks as well as non-maintenance of Local Road Network
Ledger Card (LRNLC) and Local Road Network Property Card
(LRNPC) casted doubt as to the existence, valuation, condition,
and propriety of the recorded balance of the Road Networks
totaling P96.554 million as well as the Government Equity in the
year-end financial statements;
 Absence of a complete archival system had caused unreconciled

difference between the Report of Physical Count of Property, Plant
and Equipment (RPCPPE) and the costs presented in the trial
balances totaling P31.966 million which compromised the reliability
and propriety of the financial statements;
 Projects not yet completed with total costs incurred of P25.534

million were closed to their asset account at the end of the year,
thus, Construction in Progress – Infrastructure Assets were
understated while Road networks account was overstated both by
the same amount.
 Absence of Transfer Certificates of Titles (TCT) for Land properties

recorded amounting to P3.518 million as well as unreconciled
discrepancy of P1.214 million between the balances per Financial
Statement and Tax Declaration casted doubts as to the reliability
and propriety of the balance of the Land Account.
 Dormant Receivable and Payable accounts maintained in the

books totaling P.369 million and P.227 million, respectively, were
not supported with bills or relevant records, valid proofs to warrant
payment and subsidiary ledgers for each debtor/creditor containing
adequate information affecting the fair presentation of the financial
statements; and,
13
 Real Property Tax Receivable and Special Education Tax
Receivable were not established for CY 2018 in violation of Section
246 of the Republic Act 7160 resulting to understatement of
RPT/SET Receivables and Deferred RPT/SET Income.
Peñarrubia
Pidigan Management Letter  Non-submission of journals and financial statements/trial balances

for the 1st to 4th Quarter for all funds; Year-end financial statements
and Official Receipts and Check Disbursement Vouchers for
December 2018 and Cash Disbursement Vouchers and Cash
Disbursement and Payrolls for CY 2018.
Pilar Qualified  Land with a market value of P33.384 million identified by the
Provincial Assessor’s Office as owned by the Municipality of Pilar
was not recorded in the books, thus, understating the assets of the
Municipality.
 The Municipality did not fully comply with the transition provision on
the complete recognition of the local road network in the books of
accounts which requires 75% compliance at the end of 2018
pursuant to Item IX of COA Circular No. 2015-008, thus Road
Network account balance of P182.753 million could not be
ascertained;
 Trust Liability pertaining to unexpended / unobligated balance of

the LDRRMF from prior year and in current year amounting to
P.344 million were not recognized and transferred to a Special
Trust Fund account at year-end; and,
 Information pertaining to DRRM was not evident on the face of the

Financial Statements as this was not disclosed in the Notes to
Financial Statements.
Sallapadan Management Letter  Delayed and non-submission of the Municipality’s accounts,

monthly trial balance, quarterly financial statements and other
reports which precluded timely review and evaluation and the
conduct of the necessary procedures.
San Isidro Management Letter  Management was not able to submit as of to date the Municipality’s
2018 accounts, trial balance, financial statements and various
reports which precluded timely auditorial review and prompt
detection/correction of possible deficiencies.
San Juan
San Quintin
Tayum Qualified  Unaccounted difference between the accounting and treasury

records by P1.138 million as well as accounting and bank records
by P1.076 million for Cash in Bank accounts, thus, the accuracy of
the cash account balances remained in questioned;
14
 Receivables totaling P3.382 million remained dormant and

uncollected over the years which questioned the capability of the
management to enforce collection and / or liquidation of overdue
receivables. Likewise, receivables totaling P2.029 million lacks
relevant records containing adequate information to validly support
such claim, casting doubt as to the propriety and validity of the
recorded current assets account;
 Delinquent Real Property and Special Education Taxes totaling

P5.439 million remained uncollected depriving the Municipal
Government of substantial income that could have been used for
priority projects and programs that would benefit the community;
 Existence, valuation, condition and propriety of Road Networks

totaling P268.586 million could not be ascertained due to non-
submission of the Report on the Physical Count of Local Road
Networks, Local Road Network Ledger Card and Local Road
Network Property Card; and,
 Non-conduct of Physical Count of Property, Plant and Equipment

and non-maintenance of required records renders the validity,
existence and accuracy of the said accounts worth P41.163 million
uncertain and doubtful.
Tineg Management Letter  Non-submission of Pre-closing Trial Balances for July to December
2018, 3rd and 4th Quarterly Statements of Financial Positions,
Statements of Financial Performance, Statement of Cash Flows,
Statement of Comparison of Budget and Actual Amounts, Notes to
Financial Statements, and Year-end Financial Statements and
delayed submission of disbursement vouchers and financial
statements for January to June 2018.
Tubo Management Letter  Delays in the submission of disbursement vouchers and non-
submission of financial statements for CY 2018 precluded the
prompt audit of accounts and financial statements, early detection
and correction of errors/deficiencies and timely reporting of audit
results to the management.
Villaviciosa Qualified  Balance of loan per record of the Land Bank and the Municipality
remained unreconciled by P1.636 million Entries to record the loan
amortizations and interest payments were not supported with debit
memos, thus, the correctness of the entries could not be
ascertained;
 Budget Office did not maintain the Registries of Appropriations,

Allotment and Obligations as required under Section 18-22 of
Volume II of the New Government Accounting System (NGAS)
Manual which resulted in the failure to prepare and submit the
Status of Appropriations, Allotments, Obligations and Balances as
required under Section 711, Volume I of the same Manual and the
correctness and reliability of the financial statements specifically
the Statement of Comparison of Budget and Actual Amounts
(SCBAA) could not be established;
15
 Submitted Report on the Physical Count of PPE was not classified

to its category and was incomplete on some information. Property,
Plant and Equipment Ledger Card (PPELC) and Property Card
were not maintained by the accounting office and supply and
property office, casting doubt on the reliability of balances of PPE
accounts with carrying amount of P361.556 million;
 Subsidiary ledgers that enable the agency to control and analyze

its financial information were not maintained for the dormant and of
unknown nature account “Due from Officers and Employees”
totaling P.212 million casting doubt on the collectability or
settlement of the receivables and the reliability of the amount
presented in the Financial Statements;
 Failure to comply with the transition provision on the complete

recognition of the local road network in the books of accounts which
requires 75% compliance at the end of 2018 pursuant to Item IX of
COA Circular No. 2015-008, thus Road Network account balance
of P219.476 million could not be ascertained;
 School buildings costing P1.095 million remained in the books of

accounts although the Municipality do not have beneficial
ownership and control over said PPE items, thus overstating the
assets of the Municipality.
 Subsidiary ledgers that enable the agency to control and analyze

its financial information were not maintained for “Inter-Agency
Payables” accounts amounting to P25.508 million, thus, the
balances presented in the Financial Statements could not be
ascertained.
Apayao Unqualified
Municipalities
Calanasan Unqualified
Conner Qualified  Doubtful balance of the reported Inventory accounts totaling

P7.075 million because of (a) non-maintenance of inventory
records; (b) non-conduct of inventory count; and (c) non-
preparation/non-submission of Report on the Physical Count of
Inventory (RPCI) contrary to the Manual on the New Government
Accounting System (NGAS) for Local Government Units (LGUs),
Volume I and II; and,
 Erroneous and/or non-recording of various transactions contrary to

the Philippine Public Sector Accounting Standards Nos. 1, resulted
in the overstatement of both assets and liabilities in the amount of
P.389 million Moreover, erroneous and/or non-recording of various
transactions contrary to the Philippine Public Sector Accounting
Standards Nos. 1, resulted in the overstatement of both assets and
liabilities in the amount of P.202 million.
16
Flora Qualified  Due from NGAs and Due from Local Government Units accounts
amounting to million P2.215 million and P5.328 million,
respectively; and the payables – Accounts Payable, Due to NGAs,
Due to GOCC and Due to LGUs accounts amounting to P8.983
million, P38.957 million, P.236 million and P11.338 million,
respectively as of December 31, 2018 could not be ascertained
because these were not supported with schedules;
 Due from Other Funds and Due to Other Funds with a variance of
P.723 million could not be ascertained due to failure of the
Municipal Accountant to effect reconciliation; and,
 Delayed and non-submission of liquidation reports with its

supporting documents that are duly accounted per books created
doubts on the veracity of the cash advances account balance.
Kabugao Qualified  Failure of the Municipal Treasury to submit the Disbursement

Vouchers and supporting documents amounting to P8.780 million
to the Municipal Accountant, thus, remained unrecorded and
unaccounted resulting in the overstatement of the Cash in Bank
and Government Equity accounts, and rendering the transactions
irregular;
 Erroneous and/or non-recording of various transactions contrary to

the Philippine Public Sector Accounting Standards Nos. 1 resulted
in the understatement of Assets and Liabilities in the amounts of
P3.420 million and P3.421 million, respectively; and overstatement
of P500.00 in the Government Equity. Moreover, the Municipal
Accountant failed to update the monthly Bank Reconciliation
Statements contrary to COA Circular No. 96-011 dated October 2,
1996, thus, the correctness of the Cash in Bank balance amounting
to P20.007 million as of December 31, 2018 could not be fully
ascertained.
Luna Qualified  Road Network account amounting to P44.479 million includes road
networks outside the Municipality’s jurisdiction contrary to the
Republic Act (RA) 7160 and COA Circular 2015-008 dated
November 23, 2015.
Pudtol Qualified  Balance of Due to NGA’s was overstated in the amount of P44.574
million due to non- recording of liquidations submitted and duly
received by the source agency, which could mislead users of the
financial statements.
Santa Marcela Qualified  Loans Payable-Domestic General Fund Account with a balance of
P17.962 million because loan records was not properly maintained
and updated in violation of Section 313 of the Local Government
Code of 1991 and Section 107 of the NGAS Manual for
LGUs, Volume I. This also resulted in the accumulation of unpaid
loan amortization from calendar years 2012 to 2018 amounting
to P2.142 million which were not recorded in the books, and the
incurrence of penalties amounting to P.124 million.
Benguet Qualified  Local Road Networks (LRN) account totaling P1.025 billion
recognized as infrastructure assets in the books of accounts could
not be ascertained due to a) discrepancy of P403.211 million
between the accounting and property records; and b) non-provision
of depreciation for ten(10) LRN items amounting to P18.713 million.
17
City
Baguio City Qualified  Property, Plant and Equipment (PPE) account with a total book
value of P1.869 billion could not be ascertained due to (a)
unaccounted balance of the PPE marked as “for reconciliation”
amounting to P181.619 million; (b)property recorded in the General
Ledger but not in the Report of Count of Property, Plant and
Equipment (RCPPE) amounting to P181.158 million;
(c) unrecorded property amounting to P170.744 million included in
the report on physical count (RCPPE); and (d) inconsistent
acquisition cost of various property between the accounting and
property records amounting to P39.805 million, with a net
discrepancy of P152.227 billion.
Municipalities
Atok Qualified  Property, Plant and Equipment Account amounting to P77.887

million is unreliable due to: a) unreconciled discrepancy of P49.767
million between the accounting and property records; b) non-
conduct of physical inventory; and c) non-maintenance of the
property and ledger cards; and,
 Completed projects funded under the Local Government Support

Fund amounting to P3.161 million were not recognized in the books
of accounts.
Bakun Qualified  Local Road Networks (LRN) account in the amount of P39.979
million is unreliable due to: a) unreconciled description of LRN
asset between accounting record and inventory report; b) absence
of the reportorial requirements; and c) non-provision of
depreciation;
 Accumulated delinquent taxes due to: a) ineffective collection

policy; and/or b) un-updated Real Property Tax Account Register
caused the significant ending balances of the Real Property Taxes
Receivable and Special Education Taxes Receivable accounts
amounting to P4.382 million and P2.092 million, respectively;
 Trust Liabilities-Disaster Risk Reduction Management Fund

(DRRMF) totaling P3.503 million is inaccurate in view of: a)
incorrect accomplishment of the form prescribed; and b)
unreconciled difference between the balances presented in the
DRRMF report and the Statement of Financial Position, and (c)
failure to provide the required disclosure in the Notes to Financial
Statements, caused the transfer of an incorrect amount of
unutilized DRRMF to the Trust fund;
 Non-submission of the vouchers and its supporting documents

deprived the confirmation of the existence and validity of the
P3.084 million liabilities set-up at the end of the year; and,
 Failure to recognize liabilities for the on-going construction projects

at the end of the year caused the understatement of the Accounts
Payable and Construction in Progress accounts.
18
Bokod Qualified  Property, Plant and Equipment (PPE) account totaling P181.399
million is unreliable due to the following: a) different description
of recording by the accounting office and the property office;
discrepancy of P29.513 million between the accounting and
property records; non-provisions of depreciation; and non-
disclosure of the account in the Notes to Financial Statements of
the LRN account amounting to P30.052 million; b) Unreconciled
differences of some PPE items amounting to P20.438 million
between the accounting and property records; and
c) Unserviceable PPE items totaling P3.845 million remained in
the books of accounts and were not disposed of as of year-end;
and,
 Inventory account in the amount of P1.68 million is doubtful due to

non-conduct of periodic reconciliation between the accounting and
property records resulting in a discrepancy of P0.83 million
Buguias Qualified  Property, Plant and Equipment (PPE) account aggregating

P143.89 million is unreliable due to: unreconciled description of
road networks items between the accounting and property report;
absence of the reportorial requirements; and non-provisions of
depreciation for the LRN account totaling P36.583 million;
Inclusion/non-disposal of unserviceable properties amounting to
P14.458 million;
 Unreconciled balance of the reciprocal accounts Due to Other

Funds / Due from Other Funds amounting to almost P25 million;
and,
 Inaccuracy of the Accounts Payable in the amount of P3.952 million

in view of: (a) non-submission of the vouchers and its supporting
documents; and (b) presence of negative figures in the account’s
schedule.
Itogon Qualified  Local Road Network (LRN) account amounting to P33.053 million
is unreliable due to: a) significant discrepancy aggregating P90.544
million between the accounting and property records; b) different
description and acquisition costs in recording LRN items by the
accounting and property office; c) non-preparation of the Local
Road Inventory and Road Map, LRN Property Card and Report on
Physical Count of LRN; and d) non- disclosure in the Notes to
Financial Statements.
Kabayan Qualified  Property, Plant and Equipment (PPE) account with an aggregate
amount of P59.83 million is unreliable due to the following: a) Non-
conduct of physical inventory, absence of the reportorial
requirements and non-provision of depreciation for Local Road
Network account totaling P19.181 million; and, b) PPE items worth
P1.15 million remained unrecognized in the books of accounts,
unserviceable and donated property with a net book value of P.324
million and P.004 million, respectively, remained in the books of
accounts, and PPE items with a total cost of P.222 million were not
accounted during the inventory taking as of December 31, 2018;
and,
19
 Balances of the intra-agency accounts: (a) Due from Other
Funds/Due to Other Funds; and (b) Due from Special accounts
/Due to Special accounts had unreconciled differences amounting
to P.081 million and P.347 million, respectively, as a result of
inconsistencies in recording transactions between reciprocal
accounts.
Kapangan Qualified  Property, Plant and Equipment (PPE) account with an aggregate
amount of P144.127 million is unreliable due to the following:
a) Inclusion of projects that were not under the description of a
road, reportorial requirements were not prepared and/or followed,
depreciation were not provided for some roads, incorrect
computation of depreciation and non-disclosure in the Notes to
Financial Statements of the Local Road Network account totaling
P32.608 million; and, b) PPE items worth P9.565 million remained
unrecognized in the books of accounts, inclusion of a PPE item
amounting to P.091 million with an acquisition date of January 2019
in the Schedule of PPE and some PPE items in the RPCPPE had
different cost as compared to the Schedule of PPE.
Kibungan Qualified  Property, Plant and Equipment (PPE) account aggregating

P73.526 million is unreliable due to: a) the unreconciled difference
between the Report of Physical Count of Property, Plant and
Equipment and the PPE Ledger Cards maintained by the Treasury
Office and the Accounting Office, respectively, resulting in a net
variance of P3.963 million; and b) failure to completely conduct an
inventory of the roads networks, non-preparation of reportorial
requirements, non-disclosure in the Notes to the Financial
Statements of the Local Road Networks account totalling P11.806
million;
 Inventory account amounting P2.45 million is inaccurate due to the

non-conduct of complete physical count and non-maintenance of
complete inventory records; and,
 Stale checks totaling P1.429 million remained unadjusted in the

books of accounts.
La Trinidad Qualified  Property, Plant and Equipment account due to: (a) unserviceable
properties with a carrying value of P298,112.63 remained in the
books of accounts; (b) a motor vehicle with a total cost of
P48,913.05 was not accounted during the inventory taking as of
year-end; and (c) non-recognition of local road networks.
 Cash in Bank-Local Currency Current Account with a net amount

of P.625 million as reflected in the Monthly Bank Reconciliation
Statements is unreliable due to non-recording of the reconciling
items.
Mankayan Qualified  75 percent of the account Local Road Network embodied in the
Registry of Public Infrastructure was not recognized in the books of
accounts.
Sablan Qualified  Local Road Network (LRN) account amounting to

P23.596 million is unreliable due to: a) significant discrepancy
aggregating P.562 million between the accounting and property
records; b) non-provision of depreciation for five LRN items; and
c) non-preparation of the Local Road Inventory and Road Map,
LRN Property Card and Report on Physical Count of LRN.
20
Tuba Qualified  Property, Plant and Equipment (PPE) account is unreliable due to
non-compliance with the accounting and reporting guidelines on
the Local Road Networks account.
Tublay Unqualified
Ifugao Qualified  Unresolved, unadjusted and unreconciled net difference of P4.871

million in the Cash in Bank-Local Currency, Current Account and
the existence of “Government Equity” account amounting to P8.686
million in the Trust Fund Books.
Municipalities
Aguinaldo Qualified  Non-recording of completed projects totaling P14.750 million; and

non-transfer of unexpended/unobligated balances of the Quick
Response Fund (QRF) and the DRRMF-MOOE for CY 2018
totaling P2.527 million to the “Trust Liability-DRRM” account in the
Trust Fund books.
Alfonso Lista Qualified  Erroneous computation of the Accumulated Depreciation-Road

Networks totaling P6.439 million as it was computed based on a
standard of five (5) years estimated useful life and 5% residual
value; incorrect disclosure of the Road Networks account in the
Notes to Financial Statements; and the misclassification of fund
transfers from the Bureau of Treasury totaling P16.932, million, as
Subsidy Income from NGAs in the General Fund Books.
Asipulo Qualified  Erroneous recording as subsidy income of funds received from the
Bureau of Treasury totaling P10.131 million; non-recording as
asset of completed project costing P2.495 million; and unreliable
Road Networks account totaling P113.647 million.
Banaue Qualified  Non-recording of various items of PPE totaling P14.982 million;

unreconciled depreciation expense and accumulated depreciation
in the Statement of Financial Performance and Statement of
Financial Position with the lapsing schedule totaling P4.940 million
and P5.142 million, respectively; erroneous recording as interest
expense instead of capitalizing as part of the cost of the asset the
interest paid on the loan granted for the Construction and Trade
Center Building II totaling P1.197 million; and non-transfer to a
Special Trust Fund Trust Liabilities – DRRM account of the
unexpended LDRRMF QRF and MOOE totaling P1.424 million.
Hingyon Unqualified
Hungduan Unqualified
Kiangan Qualified  Non-recording of property, plant and equipment totaling P5.633

million; the understatement of the Due from LGUs account by
P.033 million; and the misclassification of payables to : employees,
barangay, municipality, and GSIS totaling P1.997 million, as
Accounts Payable instead of Due to Officers and Employees, Due
to LGUs and Due to GSIS.
21
Lagawe Qualified  Non-recording of at least 75% of road networks totaling P16.304
million, from the Registry of Public Infra; non-recording of final and
executory disallowances totaling P.951 million, and the non-
transfer to the Trust Fund books of the unexpended LDRRMF
totaling P.118 million, and the existence of negative and dormant
accounts respectively in the Due to NGAs and Due to LGUs
account totaling P.044 million and P1.964 million, respectively.
Lamut Qualified  Non-recording as assets of four completed core road access

projects totaling P2.982 million; the non-transfer of the
unexpended/unobligated balances of the Quick Response Fund
(QRF) and the DRRMF-MOOE for CY 2018 totaling P2.317 million
to the “Trust Liabilty-DRRM” account in the Trust Fund Books; the
transfer to the Accounts Payable in the General Fund of unspent
2017 DRRMF amounting to P2.320 million during the current year;
and the non-disclosure of Property, Plant and Equipment, including
Local Road Networks totaling million (net of depreciation).
Mayoyao Qualified  Non-recording as Property, Plant and Equipment of at least 75% of

public infrastructures totaling P37.339 million;
 Erroneous or non-recording of final and executory disallowances

amounting to P1.758 million; unexpended QRF & DRRMF MOOE
for CY 2018 totaling P3.284 million not transferred to the Special
Trust Fund; and,
 Capital outlay/continuing DRRM totaling P.995 million transferred

to STF; and non-recording in the STF receipts of DRRMF from
other LGUs & sources amounting to P1.625 million.
Tinoc Qualified  Inclusion in the Due to NGAs account the cost of completed
projects amounting to P7.8 million; and,
 Non-recording of at least 75% of road networks totaling P56.580

million.
Kalinga Qualified  Various accounting errors and deficiencies resulting in the

understatement of Assets and Equity by P101.228 million and
P232.508 million, respectively, and the overstatement of Liabilities
by P131.281 million.
City
Tabuk City Qualified  Various errors/omissions and deficiencies in the recording of
transactions resulted in the understatement of Assets and
Government Equity by P1.695 million and P3.417 million,
respectively, and overstatement of Liabilities by P1.722 million.
Municipalities
Balbalan Qualified  Various accounting errors and non-adherence to accounting
guidelines resulting to the overstatement of Assets and Equity by
P6.446 million and P6.542 million, respectively and the
understatement of liabilities by P.096 million.
22
Lubuagan Unqualified
Pasil Qualified  Due to lack of subsidiary and general ledgers rendering the
doubtful accuracy of account balances particularly Cash in Bank
(CIB), Accounts Payable and Due to National Government
Agencies amounting to P39.242 million, P6.986 million and
P17.093 million, respectively and the non-recording of unexpected
DRRMF as Trust Liability; and,
 Erroneous recording of various completed infrastructure projects

resulted in the understatement of both assets and Government
Equity in the amount of P5.270 million.
Rizal Unqualified
Pinukpuk Qualified  Property, Plant and Equipment (PPE) accounts amounting to

P61.191 million were not provided depreciation resulting in the
doubtful reliability of the account balance as of December 31, 2018;
 Recorded expenses on the issuance of various inventories held for

distribution and consumption in the total amount of P86.213 million
were not duly supported resulting in the doubtful accuracy of the
balance of Inventories amounting to P36.737 million at yearend;
 Recognition of at least 75% of the total road networks was not

complied as of December 31, 2018 due to the absence of Public
Infrastructure Registry for local road networks and Property Ledger
Cards, incomplete inventory and the non-determination of fair
market value of said items, resulting in the misstatement of
infrastructure assets particularly Road Networks.
Tanudan Qualified  Compliance with the required 75% recognition of Road Networks
could not be determined due to lacking Registry of Public
Infrastructure-Road network, thus the accuracy of Road Networks
amounting to P43.803 million could not be ascertained.
 Discrepancy of P1.241 million in the balance of Trust Liability-

LDRRM and the erroneous recording of various transactions,
respectively, resulted in the understatement of Liabilities and
corresponding overstatement of Government Equity in the amount
of P1.406 million.
Tinglayan Unqualified
Mountain Province Unqualified
Municipalities
Barlig Unqualified
Bauko Unqualified
23
Besao Unqualified
Bontoc Unqualified
Natonin Unqualified
Paracelis Unqualified
Sabangan Unqualified
Sadanga Unqualified
Sagada Unqualified
Tadian Unqualified
REGION I - Ilocos Region

Ilocos Norte Qualified  Recording to expense of drugs and medicines and medical, dental
and laboratory inventories, in the amounts P74.353 million and
P61.803 million respectively, upon issuance to the different
hospitals;
 Inclusion of condemned and/or unserviceable tangible properties

to the property, plant and equipment account in the total of P14.960
million; and,
 Misclassification of donated supplies, inventories and/or goods to

supplies and materials expense in the total amount of P27.094
million.
Cities
Batac City Qualified  Property, Plant and Equipment and Inventories in the amount of
P1.107 billion and P14.243 million respectively, could not be
ascertained due to non-conduct of physical count thereof and the
non-submission of the required Inventory Reports and failure to
comply with the transition provision for the recognition of 75%
Local Road and Road Network System as part of the City's
property, plant and equipment (PPE) account at the end of
calendar year 2018 contrary to COA Circular No. 2015-008 dated
November 23, 2015, thus affecting the fair presentation of the
infrastructure assets account in the financial statements;and,
24
 Accounts Payable for all funds at year-end amounting to P6.528
million were doubtful due to non-presentation of supporting
documents to vouch the claims which is not in line with pertinent
provisions of laws, rules and regulations, thus, overstating the
recorded accounts payable and corresponding expense accounts
and understating Government Equity by the same amount.
Laoag City Qualified  Property, Plant and Equipment (PPE) accounts as well as the
accuracy, reliability and correctness of their balances amounting
to P234.938 million as of December 31, 2018 could not be
reasonably ascertained due to various deficiencies uncovered in
audit;
 Recognition of Road Networks as Property, Plant and Equipment

was undertaken without adhering to the guidelines set forth in COA
Circular No. 2015-008 to assure fair presentation of the account
Road Networks in the financial statements, thus the said account
with carrying amount of P240.092 million is unreliable;
 Accounts Receivable and Other Receivables totaling to P18.948

million were not subjected to periodic verification, analysis and
validation as required under COA Circular No. 2016-005, hence
the validity and collectability of the receivables account reflected in
the financial statement is doubtful; and,
 Supporting documents for several items in the Accounts Payable

schedule amounting to P9.848 million, were not presented for
verification as to its existence, validity and compliance with Section
46 of PD 1177, thus the accuracy of the amount presented as valid
and demandable obligation is doubtful.
Municipalities
Adams Qualified  Property, Plant and Equipment (PPE) accounts as of December 31,
2018 totaling to P171.925 million does not reconcile with the
balance per inventory report in the amount of P102.149 million
which is not in accordance with Section 124 of the Manual on
NGAS for LGUs rendering the balance of the PPE accounts in the
financial statements unreliable; and,
 Forty (40) paid disbursement vouchers with a total amount of

P3.665 million remained unsubmitted, hence we could not
ascertain the validity and propriety of the recorded transactions that
might affect the fair presentation of the financial statements.
Bacarra Qualified  Reconciliation between the accounting and property records as

required under Sec. 124 of NGAS Manual for LGUs was not
undertaken for the balances of PPE accounts amounting to
P241.854 million which resulted in the net difference of
25
P.044 million between the balances of the books and the balances
appearing on the Report of Physical Count of Property, Plant and
Equipment (RPCPPE) rendering the financial statements
unreliable;
 Local Road Networks account amounting to P109.584 million was

not provided with any depreciation which is not in conformity with
Paragraph 59 of PPSAS 17, thus resulting to misstatement of PPE,
expense and Government Equity accounts.
Badoc Qualified  Property, Plant and Equipment amounting to P117.211 million

were unreliable due to the unreconciled difference of P7.476
million between the balances of the Inventory Report and
Accounting records and the inclusion of unserviceable properties
in the books of accounts amounting to P4.902 million; and
 Inventory account totaling to P4.304 million could not be

ascertained due to the non-conduct of physical count and non-
existing Inventory Held for Distribution in the amount of P23.301
million was still carried in the books, thereby resulting to
overstatement of the assets and understatement of the
corresponding expense account.
Bangui Qualified  PPE totaling to P218.102 million was unreliable due to the
unreconciled difference of P46.882 million between the balances
of the General Ledger and Report of Physical Count of Property,
Plant and Equipment; and non-recording of five parcels of land with
an appraised value of P1.760 million resulting for the
understatement of Land account by the same amount.
Banna Qualified  Inability to conduct/submit physical inventory of its Property, Plant

and Equipment totaling to P253.218 million (net book value) that
would vouch for the physical existence, validity and correctness of
the balances of the Property, Plant and Equipment;
 Correctness and reliability of the year-end balance of Cash in Bank-

Local Currency, Current Account amounting to P235.419 million;
 Non-disclosure of recognition of the account Local Road Network;

and,
 Inability of the Municipal Accountant to submit several

disbursement vouchers totaling to P8.804 million.
Burgos Qualified  Accuracy of the reported balance of movable properties of the

municipality amounting to P68.361 million in the year-end financial
statements could not be established due to the non-reconciliation
of the actual inventory of properties as contained in the Report of
Physical Count of Property, Plant and Equipment (RPCPPE) with
the accounting records.
26
Carasi Qualified  Failure to reconcile the balances of the Property, Plant and
Equipment account which resulted to disparity of P3.749 billion;
and,
 Failure to conduct the accounting and reporting procedures to

account the Road Networks affected the correctness and
existence of the reported balances.
Currimao Qualified  Unreconciled balances between the Accounting and Property

Records amounting to P138.702 million affecting the validity and
accuracy of the year-end balances of Property, Plant and
Equipment with a total book value of P249.318 million;
 Inclusion of unserviceable and obsolete properties in the books of

accounts amounting to P1.920 million; and,
 Non-conduct of complete physical count on the municipality's

Inventories amounting to P1.550 million.
Dingras Qualified  Inability to maintain Property, Plant and Equipment Ledger Cards,
Property Cards and the non-classification of the Inventory Report
for each type of the Property, Plant and Equipment;

Receivable accounts as of December 31, 2018 totaling to P7.700
million and P7.700 million, respectively;
 Non-recording and non-disclosure in the Notes to Financial

Statements the initial recognition of the account Local Road
Networks;
 Non-provision of depreciation on Infrastructure Assets, the non-

reconciliation of reciprocal accounts Due from Other Funds and
Due to Other Funds amounting to P6.226 million; and.
 Inability of the Municipal Accountant to submit several

disbursement vouchers totaling to P16.813 million of which the
amount of P4.649 million represents infrastructure projects.
Dumalneg Qualified  PPE totaling to P105.520 million was unreliable due to unrecorded
difference of P16.549 million between the balances of the
Accounting Records and the Report of the Physical Count of
Property, Plant and Equipment; and,
 Unserviceable properties amounting to P1.416 million were still

carried in the books of accounts and inventory report.
Marcos Qualified  Inability to conduct/submit physical inventory of its movable

properties totaling to P37.282 million (net book value) that would
vouch for the physical existence, validity and correctness of the
balances of the Property, Plant and Equipment;
27
 Inability to fully establish the RPT and SET totaling to P12.545
 Non-disclosure of recognition of the account Local Road Network

and the inability of the Municipal Accountant to submit several
disbursement vouchers totaling to P58.627 million of which the
amount of P53.107 million represents infrastructure projects.
Nueva Era Qualified  Incomplete conduct of physical count of the total road networks
costing P72.033 million;
 Non-preparation, non-submission of the Report on the Physical

Count of Local Road Network affecting the validity and accuracy
of the year-end balances of Property, Plant and Equipment with a
total book value of P509.287 million; and,
 Non-conduct of complete physical count on the municipality's

Inventories amounting to P.678 million.
Pagudpud Unqualified
Paoay Qualified  Property, Plant and Equipment account in the amount of P249,161
million as well as P.428million worth of Inventories as of December
31, 2018 could not be ascertained due to non-conduct of physical
count thereof and the non-submission of the required inventory
reports;
 Failure to comply with the transition provision for the recognition of

75% of Local Road and Road Network System as part of the
municipality's property, plant and equipment (PPE) account at the
end of the calendar year 2018;
 Cash in Bank account between the records of the Municipal

Accountant and the Municipal Treasurer showed a negative
variance of P5.328 million;
 Accounts Payable for all funds amounting to P.195 million were not
supported with complete documentations to prove their validity,
propriety and existence;
 Real Property Tax Receivable and Special Education Fund Tax

Receivable amounting to P29.714 million and P24.551 million
respectively, do not reconcile with the Certified List of All Property
Tax Delinquencies amounting to P3.336 million both for RPT and
SEFT, leaving an unreconciled balance of P47.593 million.
Pasuquin Adverse  Failure to adjust the Construction in Progress account amounting

to P62.663 million to its proper Asset account and adjust the
corresponding liability account to Government Equity by the same
amount;
28
 Failure to recognize depreciation on various Property, Plant and

Equipment with a book value of P217.700 million;
 Failure to provide complete subsidiary ledger for accounts Land,

Land Improvements, Buildings, Other Structures, and School
Buildings and Market with a recorded amount of P105.218 million;
and,
 The agency carried in its books of accounts Inventories amounting

to P2.680 million that were already consumed and distributed.
Piddig Adverse  The LGU's subsidiary schedule of trial balance accounts totalling
to P585 Million were not maintained and submitted thus the
accuracy of the account balances presented in the financial
statements were doubtful.
 Non-maintenance of stock cards, property, plant and equipment

ledger cards and real property ledger cards and RPCI and
RPCPPE was not conducted, resulted to unreliable balance of the
said accounts; and,
 Failure to recognize the assets from the implementation of projects

funded by NGAs.
Pinili Qualified  Property, Plant and Equipment could not be ascertained due to: a)
failure of the agency to conduct and submit a complete inventory
report; b) non-reconciliation between the balances in the Inventory
Report and Accounting Records; c) non-provision of depreciation
of some properties; and, d) inclusion of unserviceable properties in
the books of accounts and inventory report; and,
 Non-submission of disbursement vouchers and liquidation reports

totaling to P30.364 million affected the accuracy and completeness
of recorded transactions of the municipality.
San Nicolas Qualified  Reconciliation between the accounting and property records as
required in Sec. 114 of NGAS Manual for LGUs was not undertaken
which resulted to a difference of P29.532 million between the two
records rendering the affected Property, Plant and Equipment
items in the financial statements unreliable.
Sarrat Qualified  Road Networks account as of year-end amounting to P99.424

million is unreliable due to the failure of the municipality to follow
the proper accounting and reporting procedures provided in COA
Circular No. 2015-008;
 Failure to conduct a complete inventory and maintain a road map

of its local roads;
 No Report on the Physical Count of Local Road Networks

(RPCLRN) was prepared and submitted as of year-end;
29
 The subsidiary ledgers maintained by the municipal accountant

does not provide a complete description or information on the roads
and road components for every road network and proper disclosure
in the Notes to Financial Statements was not made on the total road
network system.
Solsona Qualified  Inventory and Property, Plant and Equipment account amounting
to P2.081 million and P273.437 million, respectively could not be
ascertained because of non-submission of Report of Physical
Count of Inventories and Property, Plant and Equipment;
 Misclassification of liabilities with different nature recorded as Due

to LGUs amounting to P39,562 million; and,
 Non-provision of depreciation to various public infrastructures with

a total cost of P117.944 million.
Vintar Qualified  Failure to conduct all the necessary Accounting and Reporting
Procedures of Road Networks amounting to P143.805 million as
of December 31, 2018 renders the reported balance doubtful.
Ilocos Sur Qualified  Discrepancy of P810.283 million on the total Property, Plant and
Equipment between the Financial Statements and Inventory
Report, thus the validity and accuracy of the account is doubtful;
 Loans Payable-Domestic and Interest Payable accounts were

understated by P108.424 million and P1.417 billion, respectively,
due to the non-recording of the restructured amount of loan of the
Province as per Statement of Account provided by PDIC;
 Due from LGUs in the total amount of P30.189 million representing

shares of the province from Real Property Tax and Special
Education Tax was not ascertained due to the discrepancy of
records between the province and the cities/municipalities; and,
 Incomplete recognition of the Local Roads Network account in the

amount of P686.879 million which is only 50% recognized instead
of 75% as of December 31, 2018.
 Drugs and medicines requisitioned from BPIS during the year and
prior years by the seven (7) District Hospitals, Provincial Hospital
and Governor’s Office totaling P37.734 million and P105.551
million, respectively, were not obligated which resulted in the
understatement of Expenses by P37.734 million during the year,
and understatement of Accounts Payable and overstatement of
Government Equity by the same amounts of P143.286 million.
30
Cities:
Candon City Qualified  Property, Plant and Equipment (PPE) accounts per books in the
amount of P1.354 billion could not be ascertained due to the failure
of the General Services Office to conduct complete inventory taking
and non-disposal of unserviceable properties amounting to
P49.029 million; and
 Failure of the City Accountant to transfer in the books at least

seventy-five percent (75%) of Public Infrastructure accounts
contrary to Section 3.7 of COA Circular No. 2016-004 thus, the
Property, Plant and Equipment and Government Equity accounts
were understated by P354.339 million.
Vigan City Qualified  Property, Plant and Equipment of the City totaling to P965.470
million in the financial statements as of December 31, 2018 could
not be ascertained due to the unreconciled balance of the PPE
account and the submitted Report on the Physical Count of PPE
amounting to P7.342 million; and.
 Real Property Tax/Special Education Tax Receivable and the

related Deferred Real Property Tax/Special Education Tax
accounts were overstated by P7.220 million and P2.905 million,
respectively.
Municipalities
Alilem Qualified  Monthly Bank Reconciliation Statements were not prepared and
submitted to the Auditor which is not in consonance to COA
Circular No. 96-011 dated October 2, 1996 thus casting doubts on
the reliability and accuracy of the cash in bank presented in the
 Submitted RPCPPE amounting to P23.429 million did not tally with

the PPE as appearing in the Financial Statements in the amount of
₱151.236 million or a discrepancy of P127.807 million, thus,
casting doubt on the accuracy and fair presentation of the financial
statements.
Banayoyo Qualified  Property, Plant and Equipment (PPE) recorded in the books of
accounts with total gross amount of P365.666 million did not tally
with the actual count of P82.245 million or a difference of P283.421
million;
 Failure to record in the books of accounts at least 75% of the Public

Infrastructures from the registries to their appropriate accounts of
the Property, Plant and Equipment (PPE) which is equivalent to
P155.694 million, resulted to understatement of both PPE and
Government Equity accounts by the same amount; and ,
31
 Long outstanding liabilities amounting to P.786 million were not
substantiated with any documents rendering doubts on the validity
and existence of these obligations.
Bantay Qualified  Property, Plant and Equipment amounting to P470.916 million were
not established due to inability of the Municipality’s Inventory
Committee to conduct complete physical inventory taking.
Burgos Qualified  Property, Plant and Equipment (PPE) of the municipality with total
gross amount of P384.434 million could not be ascertained due to
inability of management to conduct the physical count of properties.
Cabugao Qualified  Property, Plant and Equipment (PPE) account as appearing in the
financial statements showed a difference of P656.554 million as
against the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE).
Caoayan Qualified  Property, Plant and Equipment (PPE) as appearing in the Financial
Statements and Report of Physical Count of Property, Plant &
Equipment (RPCPPE) showed an unreconciled difference of
P5.292 million.
Cervantes Qualified  Local Road Network account amounting to P146.389 million as of

December 31, 2018 is doubtful due to non-conduct of inventory,
non-assessment of the cost component on the present condition of
the assets for proper recognition of impairment loss and non-
maintenance of appropriate records.
Galimuyod Qualified  Due to the unreconciled variance of P55.039 million between the
result of physical inventory count and balance per books.
Gregorio Del Pilar Qualified  Due to the unreconciled variance of P105.866 million between the
Lidlidda Qualified  Property, Plant and Equipment excluding Land and Construction in
Progress accounts with a total gross amount of P202.342 million;
 Depreciation Expenses and Accumulated Depreciation could not

be ascertained due to the inability of the municipality to conduct
physical inventory;

Government Equity accounts by the same amount;
 Murrah buffalos acquired in CY 2017 for the Livelihood Assistance

to Tobacco Farmers in the total amount of P6.344 million was not
yet booked up as Biological Assets resulting in the understatement
of both Asset and Government Equity Accounts by the same
amount, and
32
 Inventories distributed to recipients in the amount of P.638 million
were included in the Inventories Account thereby causing an
overstatement of Income, Assets and Government Equity and
understatement of Expenses by the same amount.
Magsingal Qualified  Property, Plant and Equipment in the amount of P809.921 million
in the financial statements as of December 31, 2018 could not be
ascertained due to unreconciled difference of P105.588 million in
the submitted Report on the Physical Count of PPE;
 Public Infrastructure projects were transferred and recognized only

on CYs 2016 and 2017 in the books of accounts as Property, Plant
and Equipment, thereby rendering uncertainty on the fair
presentation of the financial statements; and,
 Local Disaster Risk Management Fund balance of P.291 million at

the end of the year was not transferred to Trust Fund which resulted
in the understatement of the Cash in Bank Account and the Trust
Liability Account in the Trust Fund books.
Nagbukel Qualified  Property, Plant and Equipment account as appearing in the year-
end financial statements in the total amount of P237.094 million
was not ascertained because of the unreconciled difference of
P52.858 million with the inventory report of properties.
Narvacan Qualified  Property, Plant and Equipment (PPE) as appearing in the Financial
Statements and Report of Physical Count of Property, Plant &
Equipment (RPCPPE) showed an unreconciled difference of
P806.200 million, thus, casting doubt on the accuracy and fair
presentation of the PPE account;
 Cash in Bank of the municipality amounting to P45.376 million was

not reliable due to the non-preparation of Bank Reconciliation
Statements and confirmed balances from banks differ from the
reported amounts in the books of accounts; and,
 Misclassification of accounts totaling to P46.811 million.
Quirino Qualified  Local Road Network account amounting to P173.709 million as of

maintenance of appropriate records.
Salcedo Unqualified
San Emilio Qualified  Failure to record in the books of accounts at least 75% of the Public
Government Equity accounts by the same amount.
33
 Inventories appearing in the Statement of Financial Position as of
year-end in the amount of P1.114 million did not tally with the actual
count of P.395 million or an overstatement of P.719 million.
San Esteban Unqualified
San Ildefonso Qualified  No physical count of municipal properties conducted during the
year and no inventory report was submitted, thus, the existence of
the recorded properties in the books under the Property, Plant and
Equipment (PPE) accounts, and the reliability, accuracy and
correctness of their balances as reflected in the Financial
Statements amounting to P259.799 million as of December 31,
2018 could not be ascertained.
 Road network system amounting to P42.294 million was not

disclosed in the Notes to Financial Statement;
 Local Disaster Risk Management Fund (LDRRMF) balance of

P1.341 million at the end of the year was not transferred to Trust
Fund resulted to understatement of the Cash In Bank Account and
the Trust Liability Account in the Trust Fund books.
San Juan Qualified  Unreconciled items totaling to P11.187 million were included as
adjustments to book balances, thus, the reliability and accuracy of
the Cash in Bank account as presented in the financial statements
were not ascertained;
 Cash Local Treasury account amounting to P1.501 million in the

books of accounts were not ascertained due to non-reconciliation
of balances in the cashbooks and general ledgers;
 PPE accounts totaling P546.400 million as of December 31, 2018

could not be ascertained because no complete inventory taking
was conducted and no corresponding Report on the Physical
Count of PPE(RPCPPE) was submitted.
San Vicente Qualified  Property, Plant and Equipment (PPE) of the LGU with a gross value
of P 81.288 million in the books as of December 31, 2018 is
unreliable due to various deficiencies noted in audit.
 Public Infrastructure projects of the Municipality were not recorded

in the books of accounts due to incomplete Registry of Public
Infrastructures;
 Several accounts were misclassified during the recording of the

transactions;
 Unspent Local Disaster Risk Reduction Management Fund

(LDRRMF) pertaining to calendar year 2018 amounting to P.131
million was not transferred to Trust Fund which resulted to
34
understatement of the Cash In Bank Account and the Trust Liability

Account in the Trust Fund books.
Santa Qualified  Property, Plant and Equipment accounts amounting to P317.963

million as of December 31, 2018 could not be ascertained due to
failure to conduct an annual physical count of its properties and the
non-submission of the Report of Physical Count of Property, Plant
& Equipment (RPCPPE).
Santa Catalina Qualified  Property, Plant and Equipment accounts amounting to P101.035
failure to conduct an annual physical count of its properties and
the non-submission of the Report of Physical Count of Property,
Plant & Equipment (RPCPPE);
 Public Infrastructures previously transferred to registries were not

recorded in the books of accounts which resulted to
understatement of Property, Plant and Equipment and Government
Equity by the same amount of P86.709 million;
 Non-current portion of Loans Payable-Domestic was not

presented in the Statement of Financial Position as at December
31, 2018; and,
 Proper accounting for the Share from Tobacco Excise Tax was not
observed.
Santa Cruz Qualified  Local Road Network account amounting to P236.008 million as of
maintenance of appropriate records .
Santa Lucia Qualified  Local Road Network account amounting to P148.276 million as of
maintenance of appropriate records in accordance with the
accounting and reporting guidelines
Santa Maria Qualified  Property, Plant and equipment (PPE) account as appearing in the
year-end financial statements in the total amount of P857.634
million was not ascertained because of the total unreconciled
amount of P107.162 million with the inventory report of properties.
Santiago Qualified  Property, Plant and Equipment (PPE) of the municipality excluding
Land with total gross amount of P774.245 million in the books of
accounts as of December 31, 2018 and the related Depreciation
Expenses and Accumulated Depreciation are doubtful due to
various deficiencies uncovered in audit;
35
Government Equity accounts by the same amount; and,
 Registries of Public Infrastructures and other necessary records

were not maintained by the Accounting Section;
 Check disbursements aggregating P127.522 million were not

submitted for post audit despite the issuance of Audit Observation
Memorandum and Notices of Suspension requiring submission
thereby casting doubts on the validity, legality and propriety of the
transactions;
 Non/delayed submission of the 2018 accounts and quarterly trial

balances and monthly bank reconciliation statements precluded
timely auditorial review and prompt detection/correction of possible
deficiencies and caused delay in the preparation of the Annual
Audit Report.
Santo Domingo Qualified  Report of Physical Count of Property, Plant and Equipment
(RPCPPE) amounting to P285.8156 million did not tally with the
PPE as appearing in the Financial Statements in the amount of
P520.583 million or a discrepancy of P234.767 million;
 Dormant asset accounts include Loans Receivable – Others and

Due from NGOs/POs in the amount of P1.136 million and P2.161
million respectively.
Sigay Qualified  Due to the unreconciled variance of P274.675 million between the
Sinait Qualified  Unreconciled items totaling to P1.988 million were included as

adjustments to book balances thus, the reliability and accuracy of
the Cash in Bank account can not be ascertained;
 Cash Local Treasury account amounting to P.960 million in the

books of accounts were not ascertained due to non-reconciliation
of balances in the cashbooks and general; and,
 Physical inventory of LGU Properties was not conducted during the

year, thus the validity, existence and correctness of the Property,
Plant and Equipment (PPE) accounts amounting to P563.289
million could not be ascertained.
Sugpon Qualified  Property, Plant and Equipment (PPE) of the Municipality with a total
cost of P107.202 million in the books as of December 31, 2018 is
doubtful due to several deficiencies
 No provision for depreciation for all depreciable assets of the

Municipality;
36
 Construction-in-Progress account includes cost of completed

projects amounting to P3.469 million;
 No Monthly Bank Reconciliation Statements (BRS) were prepared

and submitted to the Auditor for verification/review, thus, casting
doubts on the reliability and accuracy of the Cash in Bank account
amounting to P192.746 million.
Suyo Unqualified
Tagudin Unqualified
La Union Qualified  Land account in the amount of P129.101 million cannot be

ascertained due to unreconciled records of the Provincial
Accountant and General Services Officer with that of the Provincial
Assessor.
La Union Medical Qualified  Accounts Payable account was overstated by P9.256 million due
Center to the improper setting-up and recording of payables; and,
 P2.763 million or 13% of the total Accounts Payable were

outstanding for more than two years, thus, rendered the existence
and validity doubtful.
City:
San Fernando City Qualified  Land account with reported balance of P78.560 million as of
December 31, 2018, could not be ascertained due to non-
reconciliation of records between the Accounting Office and
Assessor’s Office, showing a discrepancy of P39.624 million;
 Valuation of the majority of lots was recorded at assessed values

instead of acquisition cost and reclassification did not conform to
its actual use; and,
 Buildings and Other Structures totaling P2.257 million are carried

in the books of the City government despite the fact that these are
not held for use by the LGU, thereby overstating its assets.
Municipalities:
Agoo Qualified  Property, Plant and Equipment (PPE) and Inventory accounts
amounting to P790.221 million and P2.579 million, respectively,
could not be ascertained due to non-conduct of periodic physical
inventory and non-maintenance of complete property records.
37
Aringay Qualified  Property, Plant and Equipment (PPE) accounts amounting to
P266.669 million could not be ascertained due to the non-
submission of the agency’s annual Physical Inventory Report.
Bacnotan Qualified  Cash in Bank – Local Currency, Current Account and Time Deposit
accounts were understated by P7.317 million due to non-
preparation of adjusting and correcting entries to effect various
reconciling items as identified in the Bank Reconciliation
Statements; and,
 Property, Plant and Equipment accounts with gross amount of

P739 million as of December 31, 2018 is of doubtful reliability due
to various deficiencies.
Bagulin Qualified  Property, Plant and Equipment in the total net amount of P77,145
million were doubtful due to the non-maintenance of PPE Ledger
Cards and Property Cards, inability of the Municipality to conduct
inventory and non-submission of RPCPPE; and,
 Errors in recording and reporting of Local Disaster Risk Reduction

and Management Fund (LDRRMF) aggregating P4.242 million
resulted to understatement of the Trust Liabilities-DRRMF Account
by the same amount.
Balaoan Qualified  Property, Plant and Equipment (PPE) account in the net amount of
P230.54 million could not be ascertained due to: a) non-conduct of
physical count; b) non-reconciliation of Accounting and Property
Records; c) inclusion of non-serviceable properties; and d)
unrecorded PPE.
Bangar Qualified  Property, Plant and Equipment totaling P375.39 Million could not
be ascertained due to various deficiencies noted which include
partial conduct of physical count of PPE, unreconciled records of
the Accounting Office and the General Services Office, non-
maintenance of property cards and ledger cards, inclusion of
unserviceable properties in the PPE account and appropriate
disposal of such properties were not yet undertaken.
Bauang Qualified  Property, Plant and Equipment (PPE) account totaling P709.964
million could not be properly ascertained due to (a) the property
and accounting records differ by P474.952 million; (b) properties
included in the Report on the Physical Count of Property, Plant and
Equipment (RCPPE) were not inventoried; and (c) some
unserviceable properties cannot be located;
 Cash in Bank – Local Currency – Current Account and Time

Deposits accounts in the total amount of P277,941 million could not
be verified due to non-submission of Bank Reconciliation
Statements, copies of bank statements with returned checks, debit
and credit memoranda, and subsidiary ledgers;
38
 Subsidiary ledger and cashbook balances at year-end were not
reconciled;
 Various expenses of the LGU amounting to P2.513 million incurred

in CY 2017 were taken up as Prior Period Adjustment for CY 2018.
Burgos Qualified  Trust Liability-DRRMF account was overstated and the

corresponding cash accounts of the General Fund and Trust Fund
were understated and overstated, respectively by P4.508 million.
 Local Disaster Risk Reduction and Management Fund (LDRRMF)–

Trust transactions amounting to P4.508 million were recorded and
paid out of the General Fund instead of under the Trust Fund
books.
Caba Qualified  Property, Plant and Equipment accounts in the aggregate amount
of P236.147 million could not be ascertained because physical
inventory was not conducted for CY 2018; property cards and
Acknowledgement Receipts for Equipment were not maintained;
property tags were not posted; and disclosures were not complete.
Luna Qualified  Several lapses in the disbursement process of the Municipality

were noted which resulted to non-recording of disbursements
totalling P7.349, million and non-adjustment of stale checks
totalling P.086 million;
 Property, Plant and Equipment account with gross amount of

P139.354 million in the books as of December 31, 2018 could not
be ascertained due to: a) non-conduct of the annual physical count;
b) non-reconciliation of Accounting and Property Records; and c)
non-maintenance of subsidiary ledgers, property ledger cards, and
property cards.
Naguilian Qualified  Property, Plant and Equipment accounts with net book values
totaling P464.640 million as of December 31, 2018 were doubtful
due to the non-conduct of the yearly physical count and non-
submission of Report on the Physical Count of Property, Plant and
Equipment (RPCPPE).
Pugo Qualified  Appropriation and obligation pertaining to RA No. 7171 amounting

to P32.851 million and P.227million, respectively were not
presented in the Statement of Comparison of Budget and Actual
Amounts (SCBAA).
Rosario Qualified  Property, Plant and Equipment (PPE) accounts amounting to

P168.609 million (net of accumulated depreciation) could not be
ascertained due to non-submission of Agency’s Inventory Report
resulting from incomplete inventory-taking of properties and non-
maintenance of complete property records.
39
San Gabriel Unqualified
San Juan Qualified  Property, Plant and Equipment (PPE) accounts with a gross
amount of P592.393 million as of year-end could not be ascertained
due to unreconciled balance amounting to P10.249 million, non-
conduct of inventory-taking and the non-preparation of the Report
on the Physical Count of PPE.
Santo Tomas Qualified  Property, Plant and Equipment (PPE) accounts as presented in the
Financial Statements of the Municipality amounting to P378.812
million (net of accumulated depreciaiton), could not be ascertained
due to the non-conduct of physical inventory and non-maintenance
of complete property records.
Santol Qualified  Property, Plant and Equipment (PPE) accounts totaling P392.782
million were of doubtful reliability due to unreconciled balances
resulting from a) incomplete physical inventory; b) incomplete
subsidiary ledger and ledger cards; c) absence of property cards
and property tags on the PPEs; d) no file of Acknowledgement
Receipt of Equipment (ARE); e) non-issuance of Inventory
Custodian Slips (ICS); and f) non-recognition of at least 75% of
Public Infrastructures in the books of account and unrecorded
completed projects such as Road Network, Building and Water
System funded out of Bottom-Up Budgeting (BUB) and Assistance
to Municipalities (AM) amounting to P38.250 million.
Sudipen Qualified  Property, Plant and Equipment account with gross amount of
P69.007 million as of December 31, 2018 could not be determined
due to non-reconciliation of book balance and inventory report and
non-maintenance of property records.
Tubao Qualified  Property, Plant and Equipment (PPE) account with a total book
value of P95.885 million could not be readily ascertained due to
several deficiencies such as non-reconciliation of records
pertaining to Land, Buildings & Other Structures accounts; non-
maintenance and non-submission of property records and Report
on the Physical Count of PPE.
Pangasinan Qualified  Property, Plant and Equipment (PPE) account with a book value of
P9.381 billion could not be ascertained due to absence of complete
Report of the Physical Count of PPE and lack of complete and
updated Property/Subsidiary Ledger Cards and non-provision of
depreciation on PPE amounting to P2.154 billion;
 Non-reconciliation against cashbook balances of the Cash-in-

Bank-Local Currency, Current Account and Time Deposit account
totaling P1.079 billion, and existence of various long outstanding
and current reconciling items in the Bank Reconciliation
Statements in the amount of P250.462 million rendering the
balance unreliable;
40
 Inclusion of dormant accounts with doubtful existence due to
incomplete supporting documents amounting to P29.931 million;
 Office Supplies Inventory account amounting to P36.294 million

cannot be ascertained due to non-reconciliation of the accounting
records with the Report on the Physical Count of Inventories
resulting in a discrepancy of P29.031 million; and,
 Recording of expenses of P34.298 million whose obligation

pertained to prior year’s appropriations and no accounts payable
have been set up.
Cities
Alaminos City Qualified  Property, Plant and Equipment (PPE) accounts with book value of
P520.816 million as of year-end was unreliable due to (a)
discrepancy of P49.189 million between the accounting records
and the Report of Physical Count of Property, Plant and Equipment
(RCPPE) and (b) unserviceable properties worth P3.642 million still
included in the PPE account; and,
 Local Road Networks totaling P267.871 million as of December 31,

2018 has accounting error/omissions and deficiencies in the
reporting resulting to misstatements of P17.858 million.
Dagupan City Qualified  Property, Plant and Equipment (PPE) account with a gross amount
of P1.894 billion as of December 31, 2018 could not be
ascertained due to the failure of the Municipality to conduct the
physical count of PPE for the current year and that the basis of the
Report on Physical Count of PPE (RPCPPE) is the previous year’s
physical count.
 Non-compliance with the transition provision for the recognition of

the 75% of Local Road Network System for calendar year 2018.
San Carlos City Qualified  Property, Plant and Equipment (PPE) account could not be
ascertained due to the discrepancy of P10.551 million between the
Accounting records and Report on the Physical Count of Property,
Plant and Equipment (RCPPE);
 Depreciation cost was not provided for Property, Plant and

Equipment (PPE) valued at P3.404 million under Special Education
Fund (SEF).
Urdaneta City Qualified  Property, Plant and Equipment (PPE) balance of P1.289 billion, net
of accumulated depreciation, only P1.162 billion were not properly
validated and identified, due to the absence of complete report on
physical count of PPE, inventory tags and complete subsidiary
records;
 Land wherein the local roads were constructed with an assessed

value of P15.267 million was not recognized on the books,
41
 Construction-in-Progress (CIP) – Infrastructure Assets account
with a total balance of P8.362 million as of the year-end did not
reconcile with the Report of the Completed and On-going
Infrastructure Projects from the City Engineering Office showing
the on-going projects as of December 31, 2018 of P4.785 million,
thus posting difference of P3.577 million or 42.78%.
Municipalities
Agno Qualified  Property, Plant and Equipment (PPE) account with book value of
P249.374 million as of December 31, 2018 could not be
ascertained with the accounting records due to non-conduct of
complete physical inventory, non-submission of corresponding
report thereon, duly reconciled with the accounting records and
inability of the Municipality to maintain updated, complete and
accurate Property Plant Equipment Ledger Cards (PPELC) and
Property Cards.
Aguilar Qualified  Property, Plant and Equipment (PPE) of the Municipality with net
book value of P265.357 million in the books as of December 31,
2018 could not be ascertained due to the non-submission of
complete and updated Inventory Report on Property, Plant and
Equipment and lack of Property, Plant and Equipment Ledger
Cards, and subsidiary ledgers maintained by the Accounting Office.
Alcala Qualified  Properties of the municipality with a net book value of P271.384
millon cannot be ascertained due to non-conduct of annual physical
count during the year hence existence and conditions of these
properties cannot be determined thereby affecting the reliability
and accuracy of the Property, Plant and Equipment account
presented in the Financial Statements.
Anda Qualified  Property, Plant and Equipment with book value of P244,918 million
as of December 31, 2018 could not be ascertained due to failure to
conduct complete physical inventory of Property, Plant and
Equipment (PPE) and prepare the report thereon;
 Non-provision of depreciation costs of Office Equipment valued at

P.069 million and the non-transfer of the Office Building amounting
to P.678 million from Trust Fund to General Fund; and,
 Infrastructure projects totaling to P2 million recorded as

Construction in Progress account already completed in CY 2018
but were not transferred to the appropriate asset account.
Asingan Qualified  Property, Plant and Equipment (PPE) accounts amounting to

P207.025, million as of December 31, 2018 could not be readily
ascertained due to non-conduct of annual physical count and non-
preparation/non-maintenance of complete Report of Inventory of
PPE, as well as property records; and,
42
 Road Networks account with a carrying amount of P60.347million
could not be ascertained and its existence could not be established
due to failure of the management to: (a) conduct physical count and
submit the Report on the Physical Count of the Road Network
System; (b) maintain a Local Road Inventory and Road Map; and
(c) keep a complete Local Road Network Property Card.
Balungao Qualified  Property, Plant and Equipment (PPE) account with a gross amount
of P293.316 million as of December 31, 2018 could not be
ascertained due to the failure of the Municipality to conduct the
physical count of PPE for the current year and that the basis of the
Report on Physical Count of PPE (RPCPPE) is the previous year’s
physical count;
 Non-compliance with the transition provision for the recognition of

the 75% of Local Road Network System for calendar year 2018 as
part of the Municipality’s PPE.
Bani Qualified  Property, Plant and Equipment (PPE) account with book value of
P170.421 million could not be established due to non-maintenance
of complete and updated Property Ledger Cards and Property
Cards and absence of a Report on the Physical Count of PPE;
 Some PPE items totaling to P13.346 million were erroneously

recorded as Furniture and Fixtures and Disaster Response and
Rescue Equipment accounts in the books of accounts, thus,
understating the Communication Equipment and Buildings
accounts by P.121 million and P13.225 million, respectively;
 Accuracy and reliability of the Accumulated Depreciation accounts

amounting to P35.730 million could not be ascertained due to
Management’s failure to provide a complete and detailed schedule
of depreciation.
 Five percent (5%) residual value of fully depreciated assets could

not be verified due to the same reason.
Basista Qualified  Property, Plant and Equipment (PPE) with net book value of
P61.894 million could not be ascertained due to the failure of the
Municipality to conduct physical inventory of its Property, Plant and
Equipment and the General Services Officer- Designate and
Municipal Accountant did not maintain the prescribed Property
Cards and Property, Plant and Equipment Ledger Cards,
respectively.
Bautista Qualified  Properties of the municipality with a net book value of P138.610
million cannot be ascertained due to non-conduct of annual
physical count during the year.
43
Bayambang Qualified  Property, Plant and Equipment (PPE) account with book value of
P645.517 million could not be ascertained due to the discrepancy
of P215.428 million between the accounting records and Report on
the Physical Count of Property, Plant and Equipment (RCPPE).
Binalonan Qualified  Property, Plant and Equipment (PPE) with a net amount of
P395.272 million could not be ascertained due to the inability of the
municipality to conduct complete physical count of its properties.
Binmaley Qualified  Property, Plant and Equipment (PPE) account balance with a net
book value of P295,837million at year-end could not be ascertained
due to non-inventory taking of properties and non-maintenance of
complete property records and ledger cards for each PPE account;
 Unserviceable properties were still included in the PPE account

balance and were not yet disposed of, thereby depriving the LGU
of higher net realizable value upon immediate disposal thereof;

established due to failure of the personnel concerned to undertake
complete physical count and non-recognition of expenses for all
issued and consumed items;
 Accounts payable totaling to P2.835 million could not be

ascertained due to the absence of documents to establish the
claims and were not reverted to unappropriated surplus despite of
being outstanding for more than two years; and,
 Real Property Tax and Special Education Tax Receivable accounts

showed abnormal balances of (P.789 million) and (P.809 million),
respectively;
Bolinao Qualified  Property Plant and Equipment (PPE) account with book value of
P338,258 million could not be ascertained due to inability to
maintain updated, complete and accurate Property Plant
Equipment Ledger Cards (PPELC) and Property Cards, non-
conduct of complete physical inventory and non-submission of
corresponding report duly reconciled with the accounting records.
Bugallon Qualified  Real Property Tax Receivable account amounting to P4.468 million
as of December 31, 2018 was established based on estimates, and
SET Receivables account under Special Education Fund was not
set up at the beginning of the year.
Burgos Qualified  Road Networks account amounting to P72,301 million as of

December 31, 2018 could not be ascertained due to non-
preparation of Inventory of Local Roads and Road Map,
deficiencies in the preparation of Report on the Physical Count of
Local Road Network, non-disclosure and recording of valid and
existing road components constructed prior to year 2010 and non-
provision of depreciation on all road network components
44
Calasiao Qualified  PPE account of P543.317 million could not be ascertained due to
incomplete and unreconciled Report on the Physical Count of
Property, Plant and Equipment (PPE) and lack of complete and
updated PPE Property/Ledger Cards with book value; and,
 Non-depreciation of some PPE accounts valued at P7.012 million,

thus; and estimates were used in setting-up the Real Property Tax
(RPT).
Dasol Qualified  Property, Plant and Equipment (PPE) account with net book value
ascertained due to the 1) absence of a Report on the Physical
Count of PPE (RPCPPE) and non-maintenance of complete and
updated PPE Ledger Cards and Property Cards, 2) absence of
Transfer Certificates of Title (TCT) for the total Land recorded in
the books amounting to P12.064 million; and 3) misclassification of
PPE items with net carrying value of P2.453 million and erroneous
recording of mobilization fee amounting to P3.600 million under
Construction in Progress account.
Infanta Qualified  Property, Plant and Equipment (PPE) account with book value of
P281.132 million was not reconciled with the Report on the
Physical Count of PPE of the Municipality showing a discrepancy
of P222.584 million; and,
 Accounting office and the GSO did not maintain separate ledger
cards for every PPE and prescribed formant of property cards,
respectively.
Labrador Qualified  PPE account with book value of P247.734 million could not be
ascertained due to the non-submission of the Report on the
Physical Count of PPE, and the lack of complete and updated
Property/Equipment Ledger Cards.
Lingayen Qualified  Property, Plant and Equipment (PPE) account with a book value of
P453.325 million could not be established due to the absence of a
Report on the Physical Count of PPE and non-maintenance of
complete and updated Property, Plant and Equipment Ledger
Cards, Property Cards and other documents;

ascertained due to the non-conduct of physical count and non-
recognition of expenses for all issued items;
 Real Property Tax Receivable and Deferred Real Property Tax

Income were erroneously recorded and Special Education Tax
Receivable and Deferred Special Education Tax Income were not
set-up, thus, resulted in zero balances of said accounts; and,
45
 Dormant unliquidated fund transfers and Due to LGUs accounts
amounting to P2.194 million and P3.085 million, respectively, as of
December 31, 2018 remained in the books for more than 10 years
with no supporting documents or records.
Mabini Qualified  Property, Plant and Equipment with a book value of P177.088
million in the books as of December 31, 2018 could not be
ascertained due to the non-submission of the required Report on
Physical Count of Property, Plant and Equipment and lack of
Property, Plant and Equipment (RPCPPE) and absence of
complete and updated Property Cards and PPE Ledger Cards.
Malasiqui Qualified  PPE account with net book value of P 449.782 million could not be
ascertained due to absence of Report on the Physical Count of
Property, Plant and Equipment (PPE) and lack of complete and
updated Property/Subsidiary Ledger Cards;
 Non-provision of depreciation cost of some Property, Plant and

Equipment (PPE) account with total book value of P19.071 million
resulted in the understatement of expense accounts and
overstatement of government equity account; and

receivables had zero balances at the end of the year and no duly
updated Real Property Tax Account Register (RPTAR) was
submitted in setting up of the Receivables at the beginning of the
year;
Manaoag Qualified  Property, Plant and Equipment (PPE) accounts amounting to

P397,313 million as of December 31, 2018 could not be readily
ascertained due to non-conduct of annual physical count and
absence of records among which is the ledger cards; and,
 Road Networks account with a carrying amount P171.705 million

could not be ascertained and its existence could not be established
due to failure of the management to: (a) conduct physical count and
Mangaldan Qualified  Property, Plant and Equipment (PPE) accounts amounting to

P92.380 million as of December 31, 2018 could not be readily
absence of records among which is the ledger cards; and,
 Road Networks account totaling P37.437 million could not be

ascertained and its existence could not be established due to
failure of the management to: (a) conduct physical count and
46
Mangatarem Qualified  Property, Plant and Equipment (PPE) of the Municipality with book
value of P434.352 million could not be ascertained due to non-
conduct of physical inventory of Property, Plant and Equipment and
lack of PPE ledger cards and subsidiary ledgers.
Mapandan Qualified  Loans Payable – Domestic account in the financial statements was
understated by P.292 million due to the non-recognition of
expenses related to the acquisition of loan at the end of the year.
Natividad Qualified  Property, Plant and Equipment (PPE) account with a total net book
value of P190.238 million was not physically counted and the
Report of Physical Count of Property, Plant and Equipment
(RPCPPE) is not prepared/ maintained by the LGU to validate its
accuracy and reliability.
Pozzorubio Qualified  Property, Plant and Equipment (PPE) with a net amount of
municipality to conduct complete physical count of properties.
Rosales Qualified  Property, Plant and Equipment account with a total net book value
of P809.430 million could not be ascertained due to the huge
discrepancies amounting to P303.118 million between the
accounting records and the report on Physical Inventory of PPE.
San Fabian Qualified  Property, Plant and Equipment (PPE) with a gross amount of P
152,742 million as of December 31, 2018 could not be ascertained
due to the failure of the Management to conduct physical count for
the current year and the absence of the RPCPPE; and,
 Reconciling items appearing in the Bank Reconciliation Statement

(BRS) as of December 31, 2018 termed as “Un-accounted Bank
Credits” amounting to P 1.327 million remained un-adjusted in the
books of accounts that eventually lead to inaccurate balance of
Cash in Bank- Current Account as of year-end.
San Jacinto Qualified  Property, Plant and Equipment (PPE) accounts amounting to
P1.434 billion as of December 31, 2018 could not be readily
absence of records; and,

failure of the management to: (a) conduct physical count and
San Manuel Qualified  Property, Plant and Equipment (PPE) with a net amount of
P406.636 million could not be readily ascertained due to the
inability of the municipality to conduct complete physical count of
properties.
47
San Nicolas Qualified  Property, Plant and Equipment (PPE) accounts amounting to
P154.921 million was not physically counted and the Report on
Physical Count of Property, Plant and Equipment (RPCPPE) is not
prepared/maintained by the LGU to validate its accuracy and
reliability; and,
 Road Networks account amounting to P42.176 million could not be

established due to failure of the management to: (a) conduct
physical count and submit the Report on the Physical Count of the
Road Network System; (b) maintain a Local Road Inventory and
Road Map; and (c) keep a complete Local Road Network Property
Card.
San Quintin Qualified  Property, Plant, and Equipment acquired by the municipality from
calendar year 2017 backwards with a total gross value of P107.967
million as of year-end are doubtful due to non-completion of annual
physical inventory for calendar year 2018.
Santa Barbara Qualified  Property, Plant and Equipment (PPE) account could not be
ascertained due to incomplete and unreconciled Report on the
Physical Count of PPE and lack of complete and updated PPE
Property/Ledger Cards.
Santa Maria Qualified  Annual physical inventory-taking was not undertaken by the
Municipality, thereby casting doubt on the management assertion
on existence, completeness and accuracy of the reported gross
value of PPE accounts totaling P296.882 million at year-end.
Santo Tomas Unqualified
Sison Qualified  Property, Plant and Equipment (PPE) with a net amount of
municipality to conduct complete physical count of properties.
Sual Qualified  Property, Plant and Equipment (PPE) account with book value of
P1.081 billion could not be ascertained due to the absence of a
Report on the Physical Count of PPE and lack of complete and
updated PPE Ledger Cards and Property Cards;
 Various adjustments to Real Property Tax and Special Education

Tax Receivables were not effected by Management; hence,
rendering the ending balances of RPT/SET receivable accounts as
at year-end amounting to P801.960 million and P714,170 million,
respectively, unreliable;
 Long outstanding reconciling items presented in the Bank

Reconciliation Statements in the total amount of P8.586 million
remained unadjusted in the books of accounts as of December 31,
2018 contrary to the requirements of COA Circular No. 96-011;
48
 Fund transfers from National Agencies that were already disbursed
in the implementation of different projects remained in the book of
accounts due to non-submission of liquidation reports, thus,
resulting in the overstatement of Due to NGAs account by P56.691
million and understatement of the Government Equity account by
the same amount; and
 Obligations amounting to P10.014 million were taken up as

Accounts Payable in the Special Education Fund (SEF) books
despite the absence of sufficient evidence to support valid claims
and proper authority for its incurrence
 Accounts payable amounting to P5.520 million remained

outstanding and unsettled for two years or more, thus, casting
doubts on the validity and reliability of the Payable account.
Tayug Qualified  Annual physical inventory-taking was not undertaken by the

Municipality, thereby casting doubt on the management assertion
on existence, completeness and accuracy of the reported gross
value of PPE accounts totaling P277.857 million at year-end;
Umingan Qualified  Property, Plant and Equipment (PPE) accounts totaling P238.677
failure to conduct inventory of its Property, Plant and Equipment;
and,
 Purchases of medicines in bulk amounting to P3.196 million were

recorded in the books of accounts as an outright expense instead
of inventory account, thereby overstating the expense account
while understating the inventory account.
Urbiztondo Qualified  Property, Plant and Equipment-Road Networks with book value of
P51.144 million could not be ascertained due to the absence of
actual physical count on road network and non-preparation of the
Report on Physical Count of Local Road Network (RPCLRN) and
Report on Local Road Network.
Villasis Unqualified
REGION II - Cagayan Valley

Batanes Qualified  Reliability of long outstanding cash advances totaling P8.458
million as of year-end;
 Property, Plant and Equipment (PPE) valued at P257.259 million

could not be ascertained due to the non-submission of the Report
on the Physical Count of Property, Plant and Equipment
(RPCPPE);
49
 Infrastructure Assets in the Property, Plant and Equipment account
with carrying value of P50.993 million could not be ascertained due
to the non-preparation of the Report on Physical Count of Local
Road Network (RPCLRN) to support the recorded balance and
non-disclosure in the Notes to Financial Statements; and,
 Non-liquidation of fund transfers to Local Government Units

amounting to P.879 million as at year-end.
Municipalities
Basco Unqualified
Itbayat Qualified  Property, plant and equipment accounts amounting to P22.209

million are not reliable due to non-recording of Local Road
Networks and the absence of the required reports therein.
Ivana Qualified  Property, Plant and Equipment (PPE) account as of December 31,
2018 in the books of the Municipality is unreliable due to
unreconciled amount of P10.5 million between the accounting
records and the Report on the Physical Count of Property, Plant
and Equipment and incorrect accounting entries on the collection
of advance payments of Real Property Tax and Special Education
Tax that resulted to a negative balance in the financial statements
amounting to P.420 million and P.083 million, respectively.
Mahatao Unqualified
Sabtang Qualified  Property, Plant and Equipment (PPE) valued at P38,998,410.92

could not be ascertained due to the non-submission of the Report
(RPCPPE); and,
 Cash advances for local travel in the total amount of P.293 million
remained unliquidated as of year-end.
Uyugan Qualified  Existence and valuation of the properties could not be relied upon
due to the presence of unserviceable Property, Plant and
Equipment of P2.750 million and failure to conduct physical count.
Cagayan Qualified  Non-settlement of cash advances totaling P65.730 million as of

year-end affected the reliability of the assets, expenses and
government equity accounts;
 Non-liquidation and/or non-reconciliation of fund transfers to other

LGUs and various national government agencies in the amount
P2.521 million and P57.742 million, respectively, rendered the Due
from Other LGUs and Due from NGAs accounts unreliable;
 Non-collection of past due Other Receivables amounting to

P11.930 million affected the reliability and validity of said account;
and,
50
 Non-collection of long outstanding loans granted to other LGUs and
various individuals in the total amount of P1.922 million and
P36.398 million, respectively, rendered the balance of the Loans
Receivable-LGUs and Loans Receivable-Others unreliable.
City
Tuguegarao City Qualified  Cash in Bank-Local Currency Current Account balances of the
three funds totaling P479.663 million are not reliable due to the
unadjusted reconciling items and the delay in the preparation of the
monthly Bank Reconciliation Statements;
 Receivables-Disallowances/Charges account, with a balance of

P.761 million does not reflect the correct amount of disallowances
that are final and executory;
 Other Receivables account under the General Fund showed

negative balances totalling P.262 million and various reconciling
items amounting to P2.487 million;
 Road Networks account of P527.848 million could not be

ascertained due to failure to follow accounting and reporting
guidelines on local roads asset management embodied in COA
 School buildings and other structures equipment, furniture and

fixtures, with total net book value of P146.673 million, are carried
in the books of accounts of the City Government, instead of these
being transferred to the City Schools Division Office/Department of
Education; and
 Property, Plant and Equipment accounts, with gross value of

P2.376 billion could not be ascertained due to Management’s
failure to conduct complete physical inventory.
Municipalites
Abulug Qualified  Accounting and reporting guidelines on local roads asset
management embodied in COA Circular No. 2015-008 were not
strictly observed by concerned departments, thus the correctness
of the balance of Road Networks account of P99.672 million as of
December 31, 2018 could not be ascertained.
Alcala Qualified  Property, Plant and Equipment (PPE) account, with a carrying
amount of P97.714 million, could not be ascertained due to the
following:a) Non-conduct of physical count of majority of its PPE
accounts; b) Incomplete details of Report on Physical Count of
Property, Plant and Equipment (RPCPPE); c) Failure to maintain
PPE Ledger Cards and Property Cards; and, d) Unreconciled
balances on the inventoried PPE between the financial statements
and RCPPE by P1.133 million;
51
Allacapan Qualified  Road Networks account as part of LGU’s Property, Plant and
Equipment (PPE) valued at P110.724 million (net of depreciation)
as of December 31, 2018 could not be ascertained due to the
failure of the LGU officials concerned to strictly observed complete
and proper accounting and reporting guidelines on local road
network system.
Amulung Qualified  Property, Plant & Equipment with a net book value totaling
P199.266 million could not be relied upon due to the failure of the
Municipality to conduct physical inventory of all its properties and
the non-submission of Inventory Report;
 Unrecorded Real Property Tax (RPT) – Basic, Discount of Real

Property Tax-Basic, and Fines and Penalties – Property Taxes
amounting to P.120 million, P.077 million and P.245 million,
respectively, which resulted in the understatement of the Tax
Revenue account by P.288 milllion;
 Share of the Special Education Fund (SEF) totaling P2.339 milllion

in the collection of RPT for CY 2018 was recorded in the books of
the General Fund under the Real Property Tax Receivable account
instead of in the SEF books under the Special Education Tax
Receivable account, thus understating the RPT Receivable
account in the General Fund and overstating the Special Education
Tax Receivable account; and
 Discrepancy between the Real Property Tax Receivable and

Special Education Tax Receivable accounts amounting to P8.584
million.
Aparri Qualified  Compliance of the Municipality with the transition provision on the
phased recognition of the Local Road Networks in the books of
accounts which requires 75% compliance at the end of calendar
year 2018 cannot be ascertained because the Municipality was not
able to observe the proper accounting and reporting guidelines
prescribed under COA Circular No. 2015-008 dated November 23,
2015 thus, casts doubt on the fair presentation of the “Road
Network” account amounting P120.762 million as at December 31,
2018.
Baggao Qualified  Reliability and existence of Property, Plant and Equipment (PPE)
account, with a carrying amount of P227.972 million, could not be
ascertained due to the non-conduct of physical count of some PPE
accounts, incomplete Report on Physical Count of Property, Plant
and Equipment (RPCPPE) and failure to maintain PPE Ledger
Cards and Property Cards.
Ballesteros Qualified  Property, Plant and Equipment (PPE) stated at P98.787 million or
38.56% of the total assets as at December 31, 2018 could not be
ascertained due to non-inventory taking, inadequacies of
subsidiary records and accounting deficiencies.
52
Buguey Qualified  Correctness and validity of the Property, Plant and Equipment
account valued at P141.475 million (net of depreciation) could not
be ascertained due non- recognition of at least 75% of Local Road
and Road Network System and non-recording of procured Fire
Truck in books of the Municipality.
Calayan Qualified  Failure to comply with the transitory provision on the phased
recognition of the Local Road Networks in the books of accounts
which requires 75% compliance at the end of calendar year 2018
pursuant to Item IX of COA Circular No. 2015-008 dated November
23, 2015 thus, affecting the fair presentation of the “Road Network”
account amounting to P4.981 million as at December 31, 2018.
Camalaniugan Qualified  Discrepancy between the value of Property, Plant and Equipment
in the financial statements and the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) amounted to P51.317
million due to the continued non-reconciliation and non-
maintenance of Real Property Ledger Cards; and,
 Non-compliance with the transition provision on the phased

as mandated under Item IX of COA Circular No. 2015-008 dated
November 23, 2015 resulting in understated balance of the “Road
Network” account and the total assets of the Municipality.
Claveria Qualified  Property, Plant and Equipment account valued at P93.989 million
(net of depreciation) could not be ascertained due to the non-
recognition of at least 75% of Local Road and Road Network
System in the books of the Municipality.
Enrile Qualified  Property, Plant and Equipment, with carrying value of P171.982
million, could not be ascertained due to: (a) non-provision of
depreciation for some PPEs totaling P45.427 million; (b) the
carrying value of the PPE Account in the Statement of Financial
Position does not reconcile with the balances of the individual
accounts in the supporting Schedule of PPEs; (c) the presence of
discrepancies between the general ledger account balances and
the results of the physical inventory; and (d) non-maintenance of
PPE Ledger Cards by the Accounting Office;
 Balances of the following accounts could not be relied upon: a)

RPT/SET Receivables amounting to P2.664 million, due to the
failure of the Municipal Treasurer to furnish a duly certified list
showing the names of taxpayers, the amount due and collectible
for the year to the Municipal Accountant, and the non-maintenance
of subsidiary ledgers by the Municipal Accountant; b) Deferred
RPT/SET amounting to P2.664 million, due to the failure of the
Municipal Accountant to record an adjusting entry for the
realized/earned Tax Revenue – RPT/SET at year-end and the non-
maintenance of subsidiary ledgers; c) Other Payables Account
under the Trust Fund amounting to P1.385 million , due to the
inclusion of transactions which pertain to other accounts;
53
 Various accounts under the General Fund and Trust Fund totaling
P1.980 million were of doubtful validity since these accounts had
been dormant for 5 to 38 years.
 Balances of the following accounts could not be relied upon due to

absence of supporting schedules/subsidiary records to
substantiate the same: a) Other Payables under the General Fund
amounting to P.027 million; b) Due to NGAs under the General
Fund and Trust Fund amounting to P1.172 million and P10.629
million, respectively; c) Due to LGUs under the General Fund
amounting to P2.863 million; d) Receivables –
Disallowance/Charges under the Special Education Fund and
Trust Fund amounting to P732.01 and P.034 million, respectively;
e) Due from Other Funds totaling P1.278 million; f) Due to Other
Funds amounting to P1.278 million; and, g) Inventories amounting
to P2.044 million.
 Advances for Special Disbursing Officer totaling P.216 million

remained unliquidated at year-end;
 LDRRMF unexpended balance totaling P.126 million was not

transferred to the Special Trust Fund at year-end, rendering the
Account Trust Liabilities -DRRM understated;
 Due to GSIS, Due to PHIC and Due to Pag-Ibig accounts

amounting to P.125 million, P.032 million and P.198 million,
respectively, do not reflect the actual amount payable because
prior years’ understatements were not corrected; and,
 Accounting and reporting guidelines on local roads asset

management embodied in COA Circular No. 2015-008 were not
strictly observed by concerned departments, thus the correctness
of the balance of Road Networks account of P30.460 million could
not be ascertained.
Gattaran Qualified  Property, Plant and Equipment (PPE) account, with a carrying
amount of P280.714 million could not be ascertained due to the
unreconciled balances between the Statement of Financial Position
and the PPE Lapsing Schedule by P7.506 million; and
 Property, Plant and Equipment (PPE) account, with a carrying

amount of P223.516 million, could not be ascertained due to non-
conduct of physical count of some PPE accounts, incomplete
Report on Physical Count of Property, Plant and Equipment
(RCPPE) and failure to maintain PPE Ledger Cards and Property
Cards.
Gonzaga Qualified  Failure to comply with the transitory provision on the phased
23, 2015, thus, affecting the fair presentation of the “Road Network”
54
Iguig Qualified  Cash in Bank, Local Currency Current Account of P59.548 million
for all funds as of December 31, 2018 could not be relied upon due
to the non-preparation of Monthly Bank Reconciliation Statements
by the Municipal Accountant; and,
 Property, Plant and Equipment totaling P156.339 million could not

be relied upon due to the failure of the Municipality to conduct
physical inventory on all its properties and the non-submission of
(RPCPPE) thereon.
Lal-lo Qualified  Failure to comply with the transition provision on the phased
November 23, 2015 due to the absence of Local Road Inventory
and Road Map, thus, casts doubt on the fair presentation of the
“Road Network” account in the financial statements.
Lasam Qualified  Road Networks account as part of LGU’s Property, Plant and
Equipment (PPE) valued at P23.772 million (net of depreciation) as
of December 31, 2018 could not be ascertained due to the failure
of the LGU officials concerned to strictly observed complete and
proper accounting and reporting guidelines on local road network
system.
Pamplona Qualified  Property, Plant and Equipment, as well as the correctness and
validity of the account valued at P84.786 million (net of
depreciation) could not be ascertained due to the non-recognition
of at least 75% of Local Road and Road Network System in the
books of the Municipality.
Peñablanca Qualified  Cash in Bank - Local Currency Current account that pertains to the
two (2) bank accounts of the LGU amounting to P.760 million could
not be relied upon due to the non-preparation of Monthly Bank
Reconciliation Statements by the Municipal Accountant; while the
difference of P.355 million between the Bank Balance per BRS in
the General Fund Proper account and the bank confirmation reply
cannot be verified due to the non-submission of the supporting
documents; and,
 Property, Plant and Equipment account appearing in the Financial

Statement with the total amount of P250.362 million (net of Road
Networks) as of year – end cannot be relied upon due to (a) non-
maintenance of Property, Plant and Equipment ledger cards by the
Accounting Office; and (b) the failure of the Accounting and
General Services Office to correct, adjust and record the
unreconciled balances between the books and the physical
inventory reports.
Piat Qualified  Stale checks totaling P.554 million, which have been long
outstanding, remained unadjusted and continuously reported in the
Bank Reconciliation Statements;
 Property, Plant and Equipment (PPE), with a carrying value of

P30.447 million, could not be ascertained due to a discrepancy of
(P5.476 million) between the accounting records and inventory
reports;
55
 Reconciling items in the Bank Reconciliation Statement-General

Fund totaling P2.713 million remained unadjusted; and,
 Supplies and materials in the total amount of P6.230 million

procured in CY 2018 were treated as outright expense instead of
using the “Inventory” account.
Rizal Qualified  Cash advances totaling P4.891 million remained unliquidated at

year-end because Management did not strictly enforce the rules
and regulations on the grant, utilization, and liquidation of cash
advances under COA Circular No. 97-002 dated February 10,
1997;
 Receivable accounts for Real Property Tax and Special Education

Tax, totaling P12.066 million could not be ascertained due to
absence of a duly certified list showing the name of taxpayers and
the amount due and collectible for the year,
 Low collection efficiency of 6% owing to the lack of intensive tax

campaigns and no-enforcement of remedies against delinquent
taxpayers as provided under Section 254 (a) of R.A. No. 7160 or
the Local Government Code;
 No documents or records that support the details of the

transaction/s and the rightful names of government agencies
pertaining to “Due from National Government Agencies (NGAs)”,
“Due from Government Owned and/or Controlled Corporations
(GOCCs)” and “Due from Local Government Units (LGUs)”
accounts totaling to P.048 million, P2.163 million and P1.917
million, respectively;
 Property, Plant and Equipment (PPE)-General Fund, with a

carrying value of P67.004 million, could not be ascertained due to
a discrepancy between the accounting records and inventory
reports;
 Disclosure requirements in the Notes to Financial Statements

under the International Public Sector Accounting Standards
(IIPSAS) 1 were not fully observed; and,
 Disbursement vouchers amounting to P1.808 million were not

submitted to the Auditor concerned for audit contrary to Sections
39(1) and 39(3) of Presidential Decree No. 1445 and created
doubts on the regularity and propriety of the payments made.
Sanchez-Mira Qualified  Property, Plant and Equipment account valued at P131.880 million
(net of depreciation) could not ascertained due to the non-
System in the books of the Municipality.
56
Santa Ana Qualified  Failure to comply with the transitory provision on the phased
23, 2015 thus, affecting the fair presentation of the “Road Network”
Santa Praxedes Qualified  Property, Plant and Equipment account valued at P69.537 million
(net of depreciation) could not be ascertained due to the non-
System in the books of the Municipality. The audit team was not
able to apply other alternative audit procedures in determining the
correct amount of said accounts.
Santa Teresita Qualified  Failure to able to comply with the transition provision on the phased
November 23, 2015 due to lacking Registry for Public Infrastructure
and Local Road Inventory and Road Map, thus affecting the fair
presentation of the “Road Network” account amounting P.983
million as at December 31, 2018.
Santo Niño Qualified  Unreconciled balance of Cash in bank account by P15.804 million
between the general ledger and bank confirmation as a result of
the non-preparation of Bank Reconciliation Statements, hence, the
balance of the Cash in Bank Account appearing in the financial
statements as of December 31, 2018 of P95.700 million cannot be
ascertained.
 Inventories and Property, Plant and Equipment accounts

could not be ascertained due to the non-conduct of physical count
of Inventories and PPE and the non-submission of the Report of
Physical Count of Inventories and Report on the Physical Count of
Property, Plant and Equipment;
 Road Network account, with a total cost of P25.232 million, and

Water Supply System account, with a total cost of P2.164 million
were not provided with depreciation expense;
 Advances to Officer and Employees totaling P1.125 million

remained unliquidated as of year-end;
 Intra-Agency accounts, Due from Other Funds and Due to Other

Funds of P34.694 million and P.056 million, respectively, are
unreliable due to the disparity of P34.638 million.
Solana Unqualified
Tuao Qualified  Interest of the loan granted by the Development Bank of the
Philippines to the Municipality for the construction of public market
amounting to P1.467 million was treated as an expense;
 Disclosure requirements in the Notes to Financial Statements

under the International Public Sector Accounting Standards
(IPSAS) 1 were not fully observed;
57
 Road Network account, with a total cost of P9.819 million was not
provided with depreciation expense as required under Paragraph
66 of International Public Sector Accounting Standards (IPSAS) 17
and Item IV of COA Circular 2015-008 dated November 23, 2015.;
 Receivables and Deferred Income account balances of Real

Property Tax and Special Education Tax (RPT/SET) of P2.972
million and P1.774 million, respectively, were unreliable due to non
setting-up of RPT and SET receivables and inaccurate recording
of collections; and,
 The Municipality entered into related party transactions, which

were not disclosed in the Notes to Financial Statements.
Isabela Qualified  Cash balance of the Provincial Government of Isabela (PGI)

amounting to P3.382 billion as of December 31, 2018 could not be
ascertained due to unrecorded collection of hospital fees
amounting to Three Million Two Hundred Seventy Nine Thousand
Five Hundred Sixty Nine Pesos (P3.280 million);
 Advances to Officers and Employees account as of December 31,

2018 amounting to P21.542 million cannot be ascertained due to
the following deficiencies/errors, to wit:
a. Various cash advances for travel were not liquidated within

the prescribed period; were not duly supported with required
documents; and,
b. The granting of cash advances for travel is not compliant

with Executive Order No. 248, as amended by Executive
Order No. 298 and Section 3.1.1.1 of COA Circular No. 96-
004.
 Advances to Special Disbursing Officer account in the amount of

P411.267 million could not be ascertained due to cash advances
which were not liquidated within the periods prescribed in COA
 Advances granted for operating expenses and to special disbursing

officers were not supported with documents;
 Reconciliation of the current balance of account Due from Local

Government Units (LGUs) and Due from Non-Government
Organizations/ People’s Organizations (NGOs/POs) amounting to
P65.400 million and P.455 million, respectively, as of December
31, 2018 showed a total difference of P3.447 million based on
confirmations conducted;
 The granting of Bro Livelihood Assistance amounting to P.220

million as of October 31, 2018 was taken up as expense recorded
and debited to Other Maintenance and Operating Expenses
account instead of Loans Receivables-Others account; and,
 Real Property Tax-Basic account amounting to P58.094 million as

of December 31, 2018 could not be ascertained due to non-
recording of Real Property Tax-basic at the beginning of the year.
58
Cities
Cauayan City Qualified  Parcels of land with a total acquisition cost of P54.302 million were
not yet transferred in the name of the City Government; and,
 Donated lands to schools amounting to P.844 million are still in the

books of accounts of the city; and,
 Land owned by city with a market value amounting to P189.270

million were not recorded in the books of accounts.
Ilagan City Qualified  Other Receivables account amounting to P14.657 million was not
fairly presented at its net realizable value as of December 31, 2018;
and,
 Reported year-end net carrying value for Property, Plant and

Equipment account at P1.826 billion was not reliable because (a)
the different classes composing the PPE were not adequately
supported by subsidiary ledgers contrary to Section 13, Volume II
of the New Government Accounting System (NGAS); (b) the PPE
account balance does not reconcile with the balance per Report on
the Physical Count of Property, Plant, and Equipment (RPCPPE)
amounting to P844.379 million or a difference of P982.055 million;
and (c) the recorded Road Networks account amounting to
P814.282 million, net of accumulated depreciation in the books
cannot be fully ascertained whether this represents at least 75
percent of the entire road networks of the City Government .
Santiago City Qualified  Property, Plant and Equipment (PPE) stated at P4.011 billion, or
87% of total assets, as at December 31, 2018 could not be
ascertained due to incomplete inventory taking, unreconciled
discrepancy of P3.4 billion between accounting and property
records, inclusion of unserviceable properties totaling P218.967
million, inadequacies of subsidiary records and accounting
deficiencies, and non-recognition of Road Networks account from
its Registry of Public Infrastructure totaling P401.547 million;
 Cash-in-bank accounts totaling P1.167 billion as of December 31,

2018 cannot be ascertained due to (a) variance of P19.470 million
between the Accounting Records and Treasury Records, (b)
current and prior years’ book and bank reconciling items were not
immediately adjusted and/or remained unadjusted; and (c) failure
of the City Accountant’s Office to prepare and submit monthly Bank
Reconciliation Statements (BRS) together with the paid checks and
original copies of debit/credit memos;
 Inventory accounts amounting to P115.894 million at year-end is

unreliable and their existence and completeness could not be fully
established due to (a) non-conduct of physical count of Inventories;
(b) purchases of supplies and materials totaling P158.500 million
directly recorded as expenses; and (c) non-maintenance of stock
ledger cards and stock cards;
59
 Accounts Payable and Due to Officers and Employees accounts
amounting to P106.813 million and P9.236 million, respectively, are
unreliable due to (a) variance of P3.271 million and P3.808 million
from their respective subsidiary ledgers’ balances, and (b) inclusion
of long outstanding payable accounts unclaimed for more than two
(2) years;
 Unable to utilize P1.226 billion or 77% of the programs and projects

out of the P1.585 billion appropriations for 20 percent Development
Fund (DF) depriving the intended beneficiaries on the
consequential socio-economic and environmental benefits that
could have been derived therefrom;
 Efficiency and effectiveness of projects implemented from fund

transfers from National Government Agencies with a book balance
of P59.490 million were not fully evaluated due to absence of
subsidiary records and incomplete submission of Memoranda of
Agreement, Status Reports, Liquidation Reports and other
pertinent documents to facilitate audit contrary to Section 6 of COA
Circular No. 94-013 dated December 13, 1994; and
 Failure to maximize its revenue earning capacity due to non-

renewal of the expired lease contracts of five hundred seventy
(570) market stallholders or 86% of the total market stalls aging
from 5 months to more than 20 years of non-renewal.
Municipalities
Alicia Unqualified
Angadanan Qualified  Property, Plant and Equipment accounts with a net book value of
P394.752 million cannot be fully established;
 Accounting and reporting procedures on the recognition of Local

Roads Assets with a net book value of P283.863 million was not
yet fully complied;
 Non-current liability amounting to P1 million was not founded upon

any valid contractual agreement; and,
 Non-moving Biological Assets account balance of P.625 million as

of December 31, 2018 was not fairly presented and disclosed due
to the: (a) unrecorded biological assets, b) non-preparation of
ledger and property cards and (c) unrecognized changes in the
assets inconsistent with International Public Sector Accounting
Standards (IPSAS) No. 27, Section 4.5 of COA Circular No. 2016-
004 dated September 30, 2016, and Section 114, Volume I of the
New Government Accounting System Manual (NGAS) for Local
Government Units.
Aurora Unqualified
60
Benito Soliven Qualified  Real Property Tax (RPT) and Special Education Tax (SET)
Receivable amounting to P8.081 million and P8.080 million
respectively, cannot be ascertained;
 Disallowance which had become final and executory totaling P.431

million was not recorded in the books;
 Lack of records and inconsistencies of information in the subsidiary

ledger renders the account Due from Officers and Employees
totaling P1.178 million unreliable;
 Advances to Officers and Employees totaling P2.401 million;
 Updated inventory of local roads under the LGU’s jurisdiction is still

on going;
 Lot which was donated years back was not yet derecognized in the
books;
 Non-observance of capitalization threshold for Property, Plant and

Equipment resulted to an overstatement of PPE accounts by P.679
million and accumulated depreciation by P2.139 million;
 No depreciation was provided to Property, Plant and Equipment

amounting to P38.228 million as of December 31, 2018 thus
overstating the asset account and understating the expense
account;
 Property, Plant and Equipment (PPE) with a carrying amount of

P151.212 million could not be ascertained due to (a) non-
reconciliation of accounts and incomplete inventory taking and (b)
lapses identified on the detailed schedule of annual depreciation
due to erroneous computation, recognition of residual value for
road networks and non-specification of necessary details to
substantiate the computed annual depreciation;
 Loan cannot be established since the balance of P2.641 million

presented in the Statement of Financial Position, do not conform
with the balance of P2.601 million; and,
 Terminal Leave Benefits was recognized in the books of accounts

only upon actual payment/settlement regardless of the period when
it was incurred resulting to misstatement of the liability and equity
accounts amounting to P.358 million and P1.438 million.
Burgos Qualified  Recognition of various Municipal Roads under Road Network (1-
07-03-010) account totaling P62.024 million was not supported
with Registry of Public Infrastructures and Report on the Physical
Count of Local Road Network (RPCLRN) duly prepared by the
Inventory Committee and Local Road Network Map;
61
 Road Networks Account totaling P62.024 million was not provided

with any depreciation;
 Inaction on the audit observation relative to stale checks totaling

P.083 million reflected in the bank reconciliation statements as
outstanding checks rendered the cash in bank account balances
unreliable as of December 31, 2018;
 Request for write-off for the Due from National Government

Agencies Account – Trust Fund account amounting to P.297 million
was not facilitated and filed to the Commission on Audit; and,
 Financial assistance granted to various Non-Government

Organizations and Peoples Organizations (NGOs/POs) and
individuals totaling P.567 million;
 Other Receivables Account amounting to P.242 million were

likewise dormant since 2003.
Cabagan Qualified  Other Receivables amounting to P.067 million had been

outstanding for more than 10 years;
 Due to LGU amounting to P95.361 million as of December 31, 2018

was not supported with a subsidiary ledger (SL) or a listing of the
creditors. Without the SL or a listing of the creditor-LGUs; and,
 Other MOOE amounting to P17.719 million or 21.26% of the total

MOOE for the year ended December 31, 2018 was not supported
with a subsidiary ledger or a listing of the component transactions.
Cabatuan Qualified  Infrastructure Assets with carrying amount of P78.147 million could
not be ascertained due to absence of inventory report;
 Public Infrastructures undertaken during CY 2011 to CY 2014

totaling P15.383 million, only the amount of P3.226 million or 21%
thereof were restored to PPE accounts attributed by the inability of
the accounting office to maintain Registry of Public Infrastructure,
understating the PPE accounts; and,
 Unreconciled balance of P.820 million for the Due from Other

Funds and Due to Other Funds accounts affecting fair presentation
of the accounts in the financial statements.
Cordon Qualified  Property, Plant and Equipment (PPE) stated at P200.7 million as
of December 31, 2018 could not be ascertained due to incomplete
inventory taking, unreconciled discrepancy of P1.242 million
between accounting and property records, inclusion of
unserviceable properties totaling P12.599 million, inadequacies of
subsidiary records and accounting deficiencies, and non-
recognition of Road Networks account from its Registry of Public
Infrastructure;
62
 Cash-in-Bank accounts totalling P32.899 million as at December

31, 2018 could not be ascertained due to (a) variance of P12.188
million, between the Accounting Records and Treasury Records,
(b) current and prior years’ book and bank reconciling items were
not immediately adjusted and/or remained unadjusted; and (c)
failure of the Municipal Accountant’s Office to prepare and submit
monthly Bank Reconciliation Statements (BRS) together with the
paid checks and original copies of debit/credit memos within the
prescribed;
 Due to Special Education Fund (SEF) totalling P17.374 million

were not automatically transferred/deposited to the SEF account;
 Due to LGU totalling P4.350 million were still not remitted by the
Municipality of Cordon;
 Cash advances amounting to P1.323 million remained

unliquidated as at December 31, 2018;
 Unused balances from completed projects totalling P.313 million

out of fund transfers from different national government agencies
were not returned; and,
 Unable to utilize P6.995 million or 30.26% out of P23.120 million

appropriations for 20 percent Development Fund (DF.
Delfin Albano Qualified  Failure to update and balance daily all financial transactions in the
Cashbooks;
 Accountabilities of the Municipal Treasurer and the other

accountable officers could not be readily determined due to late
submission of complete reports in violation of Sections 7.1.1(a) and
7.2.1(a) of COA Circular No. 2009-006 dated September 15, 2009,
thus, causing delay in the preparation of our cash examination
report;
 Collections of Delfin Albano Community Hospital were used to pay

outright disbursements;
 Failure to establish Real Property Tax and Special Education Tax

Receivables at the beginning of the year; and,
 Account balances of Drugs and Medicines Inventory of P.422

million and Medical, Dental and Laboratory Supplies Inventory of
P.228 million were unreliable due to procedural lapses in the
reporting process.
63
Dinapigue Qualified  Bank reconciling items totaling P.236 million and stale checks
totaling P.929 million were not adjusted in the books thereby
understating the Cash in Bank account by a net amount of P.693
million;
 Absence of subsidiary ledgers, schedules and/or reports to

completely account the balances of receivables and liabilities
totaling P6.317 million million and P42.881 million, respectively,
rendered the accounts unreliable because the accuracy and
validity of the reported balance in the Statement of Financial
Position at year-end cannot be fully established. Furthermore, the
abnormal debit balance of Other Payable account of P311.550
million in the General Fund is not correct due to incomplete and
incorrect accounting thereof;
 Cash advances granted to various employees and individuals for

travel, special purposes/time-bound activities and other
undertakings totaling P7.317 million were not settled at year-end;
 Property, Plant and Equipment (PPE) account of P207.940 million

was not reliable because (a) subsidiary ledgers or records
supporting each item in the PPE account was not available; (b)
existence of assets recorded at P189.650 million was not
determined due to incomplete physical count; (c) depreciation
expense and accumulated depreciation for assets with acquisition
cost of P128.709 million was not provided; (d) the validity of
Construction in Progress account costing P50.634 million could not
be completely verified; (e) unserviceable properties costing P.886
million still included in the PPE account; and fair values of
serviceable properties found during physical count were not
recognized; and,
 Due to Other Funds account under the Trust Fund books of P.571
million did not have the corresponding reciprocal account Due from
Other Funds in the General Fund books of the Municipality thus
overstated the liability account at year-end.
Divilacan Qualified  Receivables/Cash Advances amounting to P.455 million which

remained long outstanding in the books were not acted upon to
facilitate the proper write- off/adjustment thereof which is not in
accord with COA Circular No. 2016-005 dated December 19, 2016,
affecting the fair presentation of accounts in the Financial
Statements due to inclusion of accounts of doubtful existence;
 Failure to collect Real Property Tax (RPT) Receivable amounting

to P2.36 million due to Management's leniency in the collection
thereof;
 Road networks ledger and property card for all roads and its
components were not prepared and maintained by the Accounting
Office;
 Fuel consumption amounting to P3.094 million for CY 2018 have

incomplete and deficient supporting documents;
64
 Utilization of the 20% Development Fund (DF) was not maximized
since only 41% or P36.045 million of the total appropriation of
P86.934 million was obligated for CY 2018;
 Out of the P.757 million total Special Education Fund (SEF)

appropriation for CY 2018, only P.152 million or 20% of its total
budget appropriation were utilized to implement the Municipality’s
programmed PPAs for the year; and,
 Failure to comply with the provisions of COA Circular No. 2013-004

dated January 30, 2013 concerning Information and Publicity on
Programs/Projects/Activities of Government Agencies.
Echague Qualified  Property, Plant and Equipment (PPE) accounts totaling P836.959
million is unreliable due to variances and discrepancies in the
books and Report of Physical Count of PPE and incomplete
records;
 Accrual basis of accounting was not consistently adopted in the

recognition of revenues amounting to P29.468 million in the books
and accounts of the Municipality of Echague, thereby fair
presentation of financial statements and compliance with
International Public Sector Accounting Standards are not achieved;
 Accounting and reporting procedures on the Local Roads Assets

with net book value of P79.279 million were not yet complied;
 Information and Technology (I.T.) Equipment and Security

surveillance equipment for a total cost of P16.513 million were not
recorded in the proper accounts;
 Inter-agency liabilities amounting to P7.064 million do not fairly

present the balances of mandatory contributions and other
deductions withheld from LGU officials and employees, suppliers
and other entities;
 Then-moving Biological Assets account balance of P.277 million

as of December 31, 2018 is doubtful and unreliable due to the: (a)
absence of Inventory of Breeding Stocks, Property Cards, Work,
Other Animals & Breeding Stocks Ledger Card (WOABSLC) and
(b) non-determination of prevailing market price and cost to sell for
each item as of reporting date; and.
 Prepayments and accrual of interests for two long-term loans

amounting to P.250 million and P.281 million, respectively were not
properly accounted for in the books inconsistent with Philippine
Public Sector Accounting Standards.
Gamu Unqualified
65
Jones Qualified  Inconsistency in the accounting policy used for the measurement
of Property, Plant and Equipment (PPE);
 Unreconciled discrepancy of PPE account amounting to P47.922

million between accounting and property records;
 Local Road Networks was not recognized in the Financial

Statements;
 Completed Projects are still recorded under CIP account, thus

overstating the CIP account and understating the specific PPE
account and the corresponding depreciation;
 Non-provision for depreciation of PPE accounts with an amount of

P1.563 million;
 Fund transfers from various Government Agencies were booked

up under “Other Payables” account amounting to P30.288 million;
 Unreconciled balances of fund transfers balances from Department

of Health and Department of Agriculture amounting to P.609 million
and P.882 million respectively;
 Due to GSIS, Due to Pag-IBIG and Due to PhilHealth showed a

debit balances amounting to P.027 million, P.283 million and P.063
 Due to LGUs showed debit amount of P2.139 million;
 Unreconciled balance of reciprocal account Due to /Due from Other

Funds by P1.266 million; and,
 Existence of Government Equity account in the Trust Fund

amounting to P.322 million.
Luna Qualified  Due to material misstatements of various accounts.
Maconacon Qualified  Property, Plant and Equipment per books was not reconciled with
the balance per Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) due to a discrepancy of P77.451 million
as of December 31, 2018;
 Some PPE accounts were not provided with their corresponding

depreciation expenses;
 Other Receivables amounting to P.392 million remained

outstanding in the books of LGU Maconacon, Isabela as of
December 31, 2018 for 17 years; and,
 Reciprocal accounts Due from Other Funds and Due to Other

Funds amounting to P.013 million and P.127 million, respectively,
were not reconciled.
66
Mallig Qualified  Property, Plant and Equipment (PPE) of the Municipality with a net
book value of P420.108 million as of December 31, 2018 could not
be ascertained due to lack of physical inventory report and property
ledger card maintained by the Management; and,
 Road Networks of P189.50 million recorded in the books and

reflected in its financial statements represents only the cost
incurred in the construction/rehabilitation of its municipal roads
from CY 2016 to CY2018.
Naguilian Qualified  Estimated income/revenue from the Basic Real Property Tax (RPT)
for the year 2018 was overly conservative due to non-setting up of
annual RPT Receivables based on the assessed values of taxable
RPTs as basis of the estimates and absence of accurate/certified
list of taxpayers which indicates the amount due and collectible
from them.;
 Inventory of local roads under the LGU’s jurisdiction is still on-

going, hence, recognition of the Local Road Network in the books
of accounts was not yet started except for those road projects
completed last 2015 to present which consequently understates
the asset account;
 Land with an area of 9,133 square meters located at Barangay

Magsaysay, Naguilian from which the new Municipal Hall was
constructed was not recorded in the books; and,
 Several Infrastructure Projects and Other Structures with an

accumulated cost of P6.815 million were sourced out of the
General Fund-Maintenance and Other Operating Expenses and
recorded as an outright expense thereby understating the
appropriate Property, Plant and Equipment account and
overstating the Repairs and Maintenance account.
Palanan Qualified  Unreliable year-end balances of receivable accounts totaling

P1.946 million due to the absence of subsidiary ledgers, schedules
and/or reports hence the accuracy and validity of recorded
balances cannot be reasonably determined;
 Unreliable year-end carrying amount of the Property, plant and

equipment (PPE) account of P174.236 million; and,
 Unreconciled amount of Due to NGA account against the balance

confirmed by the source agency of P1.748 million.
Quezon Qualified  Property, Plant and Equipment (PPE) of the Municipality with a net
book value of P107.948 million as of December 31, 2018 could not
be ascertained due to lack of physical inventory report and property
ledger card maintained by the Management; and,
 Road Networks amounting to P20.450 million recorded in the

books of the Municipality and reflected in its submitted year-end
financial statements represents only the cost incurred in the
construction/rehabilitation of its municipal roads in 2016 to 2018.
67
Quirino Unqualified
Ramon Qualified  Property, Plant and Equipment (PPE) stated at P308.944 million,
or 83% of total assets, as at December 31, 2018 could not be
ascertained due to incomplete inventory taking, unreconciled
discrepancy of P150.856 million between accounting and property
records, inclusion of unserviceable properties totaling P10.743
million, inadequacies of subsidiary records and accounting
deficiencies, and non-recognition of Road Networks account from
its Registry of Public Infrastructure totaling P23.780 million;
 Inventory accounts amounting to P1.497 million at year-end is

unreliable and their existence and completeness could not be fully
established due to (a) non-conduct of physical count of Inventories;
and (b) non-maintenance of stock ledger cards and stock cards;
 Due to LGU totaling P13.315 million were still not remitted by the
Municipality of Ramon;
 Unused balances from completed projects totalling P1.919 million

out of fund transfers from different national government agencies
were not returned;
 Failure to maintain special accounts in the general fund for

economic enterprises and development projects;
 Efficiency and effectiveness of projects implemented from fund

transfers from National Government Agencies with a book balance
of P5.264 million were not fully evaluated due to absence of
subsidiary records and incomplete submission of Memoranda of
Agreement, Status Reports, Liquidation Reports and other
pertinent documents; and,
 Special Education Fund (SEF) budget for CY 2018 was not fully
utilized resulting to an unobligated appropriation of P3.046 million
as of year-end which could have been reprogrammed for other
priority projects as prescribed under Section 272 of the Local
Government Code of 1991.
Reina Mercedes Qualified  Failure to install and maintain property control, records-keeping
and reconciliation procedures in all inventories and property, plant
and equipment casting doubt on the validity and accuracy of its
reported balances in aggregate amount of P114.679 million as of
December 31, 2018.
Roxas Qualified  Road Networks amounting to P15.940 million recorded in the

books of the Municipality and reflected in its submitted year-end
financial statements under the account represents only the cost
incurred in the construction/rehabilitation of municipal roads in
2018;
68
Roxas Qualified  Inventory accounts totaling P.955 million was doubtful due to (a)
non-preparation and submission of the Report on the Physical
Count of Inventory (RCPI) and (b) non-reconciliation of balances
between Accounting and General Services Office (GSO); and,
 Property, Plant and Equipment (PPE) account valued at P139.446

million remained doubtful due to failure of management to reconcile
the physical inventory balances with the subsidiary ledger
balances.
San Agustin Qualified  Reconciling items in bank reconciliation statement amounting to

P9.310 million were not adjusted in agency’s book of accounts;
 Unreconciled difference of Cash in Bank account amounting to

P43.004 million between the Cashbook and General Ledgers;
 Unreconciled difference of Advances .to Officers and Employees

account amounting to P2.474 million between the general ledger
and the total balances contained in subsidiary ledgers;
 Unreconciled difference of Property, Plant and Equipment (PPE)

accounts amounting to P58.713 million between the cost of PPE in
the Financial Statements and the cost in the Inventory of Physical
Count of Assets;
 Completed Projects in Trust Fund amounting to P19.450 million

were closed to Due to NGAs account, thus the specific PPE
accounts was understated and the corresponding depreciation was
understated;
 On-going projects in the general fund amounting to P7.720 million

was recorded in the specific PPE account and provision for
depreciation was already made;
 Completed project in general fund amounting to P.506 million still

recorded as CIP account, thus understating the PPE account and
depreciation;
 Local Road Networks was not recognized in the Financial

Statements;
 Non-provision for depreciation of PPE accounts with an amount of

P10.092 million;
 Biological assets amounting to P.566 million cannot be ascertained

as it did not include the amount attributed to biological
transformation;
69
 Fund transfers from various government offices amounting to
P5.866 million were booked-up under Due to NGAS account
instead of its proper “Due to” account, thus overstating the Due to
NGAS account and understating the Due to LGUs and Due to
GOCCs account;
 Cash in bank balance is overstated by P5.406 million due to error

in recording the transfer of unexpended mitigation fund –
Maintenance and Other Operating Expenses (MOOE) and Quick
Response Fund (QRF);
 Cash in bank balance is overstated by P3.669 million, Motor

Vehicle is understated by P2.744 million and Trust Liability – DRRM
is overstated by P.924 million;
 Unreconciled balance of Due from other Funds and Due to Other

Funds amounting to P3.438 million; and,
 Income and Government Equity accounts were understated by

P.094 million and P.056 million respectively while Trust Liability
account was overstated by P.150 million.
San Guillermo Qualified  Property, Plant and Equipment (PPE) accounts totalling P102.656
million cannot be fully established due to variances and
discrepancies in the books and inventory reports, incomplete
records and non-provision of depreciation charges and impairment
losses;
 Accounting and reporting procedures on the recognition of the

Local Roads Assets with a book value of P7.805 million was not
complied;
 Inter-agency liabilities amounting to P2.254 million do not fairly

present the balances of taxes, mandatory contributions and other
deductions withheld from LGU officials and employees, suppliers
and other entities;
 One loan account amounting to P1.700 million was outstanding for

more than 15 years; and,
 Biological Assets account balance of P.591 million as at December

31, 2018 was not fairly presented and disclosed due to: (a)
unrecorded biological assets, b) non-preparation of ledger cards
and (c) unrecognized changes in the assets.
San Isidro Qualified  Cash in treasury account as per Financial Statement does not
reconcile with Cashbook balance by P1.305 million;
 Completed Projects are still recorded under CIP account;
 Biological Assets amounting to P.470 million cannot be

ascertained due to the non-movement during the year and previous
years;
70
 Unreconciled balance of reciprocal account Due to /Due from Other
Funds by P10.056 million and Real Property Tax Receivable and
Deferred Real Property Tax by P.525 million;
 Prior year expenses for electricity amounting to P.307 million; and

Unutilized balance of LDRRMF amounting to P3.064 million was
not transferred to Trust Liability – DRRM.
San Manuel Qualified  Unreconciled balances by P.447 million of the Due to LGUs
Account (LGU San Manuel, Isabela Books) and the Due from LGUs
Account (Provincial Government Books); and,
 Real Property Tax Receivables totaling P25.760 million was not

reconciled with the Deferred Real Property Tax account totaling
P26.147 million as reported in the FS at year-end with a total
difference of P.388 million.
San Mariano Qualified  Operating Lease Receivable from lease of assets and Accounts
Receivables from the LGU’s water system amounting to P.080
million and P.011 million respectively were not recognized in the
books of accounts;
 Real Property Tax Receivable totaling P3.829 million cannot be

established; and,
 Credit to RPT Receivable in the amount of P11.482 million was

made for RPT collections which has no receivable counterpart;
 Lot which was donated years back was not yet derecognized in the
books;
 Inventory of local roads under the LGU’s jurisdiction is still on going,

hence, the recorded Local Road Network in the books cannot be
relied upon in the absence of inventory report;
 Biological Assets could not be ascertained due to non-

reconciliation between the general ledger balance of P.895 million
and the Biological Assets Property Cards of P1,429 million
showing a net difference of P.534 million;
 Property, Plant and Equipment (PPE) with a carrying amount of

P500.958 million could not be ascertained due to (a) non-
reconciliation of accounts and incomplete inventory taking; (b) non
- maintenance of property cards for check and balance (c)
existence of unserviceable properties totaling to P23.899 million;
and, (d) non-observance of the capitalization threshold in
recognizing individual assets as PPE;
 Loans Payable account from Land Bank of the Philippines (LBP)

for the acquisition of Heavy Equipment could not be ascertained
due to unreconciled balance in the books against the billing
statement issued by LBP;
71
 Loans Payable account from Land Bank of the Philippines (LBP)
for the construction of various projects could not be ascertained
due to unreconciled balance in the books against the billing
statements issued by LBP;
 Other Payables account pertaining to customers’ deposit from

public market totaling P.948 million could not be ascertained due
to absence of subsidiary ledgers;
 Amount of expense to recognize the issuance/consumption of fuel

was not accurate due to deficiencies observed in the preparation
of monthly fuel consumption, rendering the appropriate expense
and inventory account unreliable; and,
 Fuels procured under the 20% development fund were used for the
travels of different offices.
San Mateo Unqualified
San Pablo Qualified  Other Receivables amounting to P2.350 million remained

outstanding for more than 10 years and/or with no details in the
books of LGU San Pablo, Isabela as of December 31, 2018;
 Breeding Stocks costing P.100 million remained unchanged in the

books since 2015;
Due to NGAs amounting to P13.918 million as of December 31,

2018 was not supported with a subsidiary ledger or a complete
information on the dates of receipt, purpose/s, amount received
and amount utilized/liquidated; and,
 Other MOOE amounting to P10.493 million or 18.93% of the total

MOOE for the year ended December 31, 2018 was not supported
with a subsidiary ledger or a listing of the component transactions
Santa Maria Qualified  Other Receivables amounting to P.384 million remained

outstanding in the books of LGU Sta. Maria, Isabela for years and
with no supporting documents as of December 31, 2018; and
 Donations and Other MOOE amounting to P17.802 million and

P8.070 million or 31.15% and 14.26%, respectively, of the total
MOOE for the year ended December 31, 2018 were not supported
with subsidiary ledgers or a listing of the component transactions.
Santo Tomas Management Letter  No Financial Statements submitted
Tumauini Qualified  Cashbook balances are not being reconciled with that of the
Subsidiary Ledger's maintained by the Office of the Municipal
Accountant;
 Collection of Tumauini Community Hospital were used to pay

outright disbursement;
72
 Propriety and existence of the PPEs valued at P 530.842 million
could not be ascertained;
 Physical Inventory Report of PPEs disclosed various

damaged/unserviceable furniture & fixtures, office equipment,
watercrafts and ICT equipment of undetermined value were still
carried under PPE account in the Financial Statement; and,
 Validity and correctness of the balance of Infrastructure Assets

Road Networks account presented in the Financial Statements
amounting to P28.619 million could not be ascertain due to
unrecorded/unbooked completed prior year’s Municipal Road
Networks projects;
Nueva Vizcaya Qualified  Accumulated depreciation – motor vehicles account of the Province
is understated by P15.631 million;
 Cash in Bank-LCCA totaling P1.205 billion could not be relied upon

due to several unsupported and unadjusted reconciling items in the
Bank Reconciliation Statements (BRS);
 Due to BIR, Due to GSIS, Due to Pag-IBIG and Due to PhilHealth,

with a total balance of P16.818 million, included abnormal negative
balances totaling P5.036 million.
 Correctness and reliability of Motor Vehicles account could not be

ascertained due to unreconciled net difference of P10.688 million
between Accounting records and Report of Physical Count of PPE
(RPCPPE); and,
 Fund transfers to NGOs/POs amounting to P8.710 million was

taken up in the books as outright expense under Donations account
instead of recognizing as receivables or Due from NGOs/Pos.
Municipalities
Alfonso Castaneda Qualified  Property, Plant and Equipment (PPE) do not reconcile with the
report on physical count for a total of P7.356 million; and,
 Consolidated Inventory account from the Accounting Office does

not reconcile with the report on the physical count of inventories
prepared by the General Services Office (GSO) for a total net
amount of P2.591 million.
Ambaguio Qualified  Property, Plant and Equipment account amounting to P108.051

million, P788.54 could not be relied upon due to unreconciled
difference of P12.245 million between the accounting and property
records; and
 Cash in Bank - LCCA totaling P27.636 million could not be relied

upon due to unreconciled balances between the book and bank
balances of the municipality as at year – end.
73
Aritao Unqualified
Bagabag Qualified  Property, Plant and Equipment and Inventories totaling to

P118.615 million and P3.614 million, respectively, could not be
verified and ascertained because physical count was neither
conducted nor ledger cards/supporting schedules have been; and,
 Failure to set-up allowance for depreciation for some of the

depreciable properties of the Municipality amounting to P11.343
million.
Bambang Qualified  Inability of the Municipality to finish the conduct of annual physical
inventory renders unreliable and inaccurate the Property, Plant and
Equipment (PPE) account of the Municipality totaling P217.156
million;
 Accounts Receivable account was understated by at least P12.861

million as of November 30, 2018.
Bayombong Qualified  Property, Plant and Equipment account amounting to P90.613

million is doubtful due non – submission of Report on the Physical
Count of Property, Plant and Equipment (RPCPPE); and
 Cash in Bank – LCCA totaling P142.384 million could not be relied

upon due to non – submission of the monthly Bank Reconciliation
Statements (BRS) .
Diadi Qualified  Property, Plant and Equipment account, with a carrying amount of
P53.110 million could not be ascertained;
 Failure to set-up allowance for depreciation for some of the

depreciable properties of the municipality amounting to P2.691
million;
 Cash in Bank account totaling P15.451 million cannot be

ascertained;
 Infrastructure Assets were not recognized in the books of accounts;
 Incomplete set of Books of Accounts;
 Insufficient monitoring in the grant and liquidation of cash advances

resulted in the negative balances of individual accounts at year-
end; and
 Reciprocal accounts “Due from Other Funds” and “Due to Other

Funds” with balances of P18.553 million and P20.491 million,
respectively, as at December 31, 2018 are doubtful due to
discrepancy of (P1.938 million).
Dupax del Norte Qualified  Cash in Bank-LCCA totaling P108.314 million could not be relied
upon;
74
 Current and prior years’ collections on the hands of designated

collectors totaling P1.081 million were not remitted to the
Liquidating Officer; and,
 Balances of the LDRRMF-Trust Fund pertaining to years 2012 and

2013 were not reverted back to the unappropriated surplus of the
General Fund as at December 31, 2018.
Dupax del Sur Qualified  Property, Plant and Equipment (PPE) and Biological Assets
totaling P171.279 million and P1.295 million, respectively, cannot
be determined due to the absence of actual physical inventory
thereof;
 Infrastructure assets recognized in the General Fund books totaling

P91.201 million were not duly provided with depreciation; and,
 Twenty-one (21) stale checks totaling P.044 million were still

included in the list of outstanding checks as of December 31, 2018.
Kasibu Qualified  Cash in Bank – Local Currency Current Account as at December

31, 2018 amounting to P331.735 million was overstated by P2.293
million due to the unrecorded check disbursements;
 Property, Plant and Equipment account amounting to P176.608

million is unreliable due to the unreconciled difference of P119.866
million between the accounting and property records; and
 Accounts Payable amounting to P33.628 million includes

unsupported claims of P2.796 million.
Kayapa Qualified  Failure to conduct physical inventory of Property, Plant and

Equipment (PPE); and,
 Failure to recognize of prior years’ infrastructure assets previously

logged to the Registry of Public Infrastructure back to the books of
accounts of the Municipality.
Quezon Qualified  Property, Plant and Equipment account amounting to P89.772

million could not be relied upon.
Santa Fe Qualified  Total of subsidiary ledger accounts of the Trust Liability Due to
NGAs did not tally with the general ledger;
 Failure to prepare and submit the Report on the Physical Count of

Property, Plant and Equipment of municipal properties amounting
to P143.667 million; and,
 Total of subsidiary ledger accounts of the Trust Liability Due to

LGUs did not tally with the general ledger;
 Due from Other Funds and Due to Other Funds have a discrepancy
of P.156 million;
 Discrepancy on the RPT Receivable and SET Receivable and in

the Deferred RPT Tax and Deferred SET Tax; and,
75
 Cash-in-Bank was understated as at year-end due to the

inappropriate treatment of unreleased check to suppliers totaling
P2.567 million which were still at the custody of the Municipal
Treasurer and not yet presented to the bank for payment.
Solano Qualified  Property, Plant and Equipment account amounting to P627.492

millioncould not be relied upon due to a net unreconciled difference
of P242.556 million between the general ledger of the Accounting
Office and the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) of the General Services Office;
 Ending balance of P79.204 million Road Networks account as of

December 31, 2018 was unreliable due to the inability of concerned
officials/offices to perform their duties and responsibilities relative
to the accounting and reporting on Local Roads Asset
Management System enunciated under COA Circular No. 2015-
008;
 Receivable accounts totaling P4.986 million remained dormant

and outstanding for five (5) years; and,
 Accounts Payable totaling P11.601 million and Other Payables of

P21.581 million were doubtful due to the existence of long
outstanding payables that were not supported with valid claims and
documentations and misclassification in the recording of
transactions.
Villaverde Qualified  Property, Plant and Equipment could not be verified and
ascertained because Infrastructure Assets totaling P3.713 million
as at December 31, 2018 were unreliable due to the inability of
concerned officials/offices to perform their duties and
responsibilities relative to the accounting and reporting of
infrastructure assets.
Quirino Unqualified
Municipalities
Aglipay Qualified  Unreconciled Cash in Bank balance of P22.054 million; and,
 Property, Plant and Equipment amounting to P110.619 million

cannot be ascertained due to failure to conduct actual physical
count.
Cabarroguis Qualified  Property, Plant and Equipment (PPE) in the financial statements
amounting to P121.222 million cannot be ascertained due to the
failure of the municipality to conduct physical count of its properties
as well as the failure of the accounting office to maintain PPE
ledger cards.
76
Diffun Qualified  Amounts reflected for the following accounts in the financial
statements cannot be ascertained due to non-availability of
documents, incomplete records, absence of subsidiary ledgers and
no physical inventory conducted:
a) Property,Plant and Equipment costing P268,707 million;
b) Other Receivables and Payables account that remained in

the books for several years; and,
c) Supplies amounting to P3.504 million directly charged to

expense accounts upon purchase.
Maddela Qualified  Property, Plant and Equipment balance amounting to P293.957

million cannot be ascertained due to the failure of the municipality to
conduct annual physical count.
Nagtipunan Qualified  Property, Plant and Equipment (PPE) in the financial statements
failure of the municipality to conduct physical count of its properties
as well as the failure of the accounting office to maintain PPE ledger
cards.
Saguday Qualified  Property, Plant and Equipment (PPE) in the financial statements
failure of the accounting office to maintain PPE ledger cards and
reconcile with the inventory report submitted by the municipal
treasurer’s office.
REGION III - Central Luzon

Aurora Qualified  Cash-in-Bank (CIB) account balances amounting to P907.454
million as of December 31, 2018 remained unreliable due to (a)
non-reconciliation of the Cash-in-Bank ledger balances with
treasury and bank records which showed a total variance of
P39,119 million; (b) un-updated Bank Reconciliation Statements
(BRS) for seven bank accounts with total reported balances of
P734.163 million as at same year end; and (c) existence of
unadjusted reconciling items in net deductive amount of P2.994
million .
Municipalites
Baler Unqualified
Casiguran Qualified  Property, Plant and Equipment (PPE) accounts with a reported net
book balance of P217.857 million, which represents 58.44% of the
total assets of the municipality as of December 31, 2018 remained
unreliable due to (a) absence of complete accounting and property,
records, and documents evidencing ownership on lots with a
recorded value of ₱32,268,190.06; and (b) failure to conduct the
physical count of PPEs.
77
Dilasag Qualified  Cash-in-Bank - Local Currency, Current Account as of December
31, 2018 totaling P66.314 million cannot be ascertained due to (a)
non-recording of reconciling items reflected in the Bank
Reconciliation Statements of P.981 million and (b) failure to
recognize the closure of three bank accounts in the amount of
P8.354 million.
Dinalungan Qualified  Property, Plant and Equipment (PPE) accounts totaling P50.240
million were not provided with depreciation;
 Cash-in-Bank- Local Currency, Current Account accounts as of

December 31, 2018 totaling P34.788 million cannot be
ascertained due to (a) disparity of P19.207 million between the
balances of bank accounts per General Ledger (GL) and per
Municipal Treasurer’s Office records; and (b) non-adjustment of
the reconciling items of (P7.396 million ) between the general
ledger and balance per bank as a result of non-preparation/non
submission of bank reconciliation statement for all accounts; and,
 Loans Payable-Domestic, reported under non-current liabilities in

the Statement of Financial Position was overstated by P3.907
million due to a) non-classification of the current portion of the long-
term loan as current liabilities; and b) erroneous recording of
interest due for the whole term of the loan as payable.
Dingalan Unqualified
Dipaculao Unqualified
Maria Aurora Unqualified
San Luis Qualified  Cash-in-Bank- Local Currency, Current Account as of December

31, 2018 totaling P89.420 millioncannot be ascertained due to (a)
disparity of P17.130 million between the balances of bank
accounts per Subsidiary Ledger (SLs) and per Municipal
Treasurer’s Office records; and (b) non-adjustment of the
reconciling items of P2.546 million (net amount) reflected in the
Bank Reconciliation Statements (BRS) due to absence of
supporting documents.
Bataan Qualified  Significant deficiencies and misstatement in the audit of accounts

such as (a) erroneous recording of Property, Plant and equipment
(PPE) accounts amounting to P32.033 million; (b) understatement
of PPE accounts due to delayed recognition of cost of donated
cement of various infrastructure projects aggregating to P10.923
million; (c) inadequate provision of depreciation expense and
accumulated depreciation for assets amounting to P2.840 million;
(d) undisposed unserviceable properties totaling P9.643 million;
and (e) unreliable balances of PPE account due to the partial
conduct of the physical inventory.
78
 Erroneous recognition of (a) 100% completed and fully paid

Department of Energy (DOE)-funded projects and (b) interest
income accruing from the interest-bearing checking account
maintained for the said DOE fund transfers resulted in the
overstatement of Due to NGAs account by P1.507 million and
understatement of Due to NGAs account by P.005 million,
respectively.
City
Balanga City Qualified  Real Property Tax (RPT)/ Special Education Tax (SET)
Receivables amounting to P39.556 million and P40.129 million,
respectively, were unreliable due to the absence of details to
support the accuracy of the accounts’ beginning balances; and
 Absence of details to support the beginning balance of Land in the

amount of P20.697 million in the records maintained by the
Treasury, Accounting and General Services Department rendered
the accounts unreliable.
Municipalities
Abucay Qualified  RPT/SET Receivables amounting to Zero (P0.00) is unreliable

due to the failure to ascertain and substantiate the reported figures
with subsidiary records;
 Inclusion of the 56 unreleased checks as issued in the report and

the Municipal Accountant’s recording in the Check Disbursement
Journal as credit to cash in bank resulted in the understatement of
the cash account by P5.110 million; and (c) erroneous entry to
Other Payable account amounting to P33.000 million.
Bagac Qualified  RPT/SET Receivables amounting to P49.786 million and P49,786

million respectively, were unreliable due to the absence of certified
list of taxpayers from the Municipal Treasurer’s Office to support
the accuracy of the amount set up for 2018.
Dinalupihan Qualified  Loans Receivable-Others account with balance of P.135 million

and Other Receivables account of P.007 million is doubtful for the
failure to substantiate the accounts with necessary documents and
detailed information;
 Property, Plant and Equipment and Inventory accounts with a net

book value of P199.298 million and P2.183 million, respectively,
are unreliable due to partial completion of the actual physical
count, non-submission of required inventory reports, inclusion of
unserviceable/obsolete properties in the books and improbability to
reconcile the balance of Property, Plant and Equipment account
with the inventory report; and (c) the Trust Fund account balances
of Due to NGAs, Due to LGUs and Due to Officers and Employees
included dormant and long outstanding balances amounting to
P1.179 million and P.875 million, respectively, which were not yet
returned/transferred to the source agencies/persons.
79
Hermosa Qualified  Property, Plant and Equipment (PPE) account totaling to P338.146
million and Inventory balance of P1.530 million could not be
ascertained due to (a) partial completion of the actual physical
count; (b) non-submission of required inventory reports; (c)
inclusion of unserviceable/obsolete properties in the books and; (d)
improbability to reconcile the balance of Property, Plant and
Equipment account with the inventory report.
Limay Management  Due to non submission of reports

Letter
Mariveles Qualified  Property, Plant and Equipment (PPE) balances at year-end could
not be ascertained because of the continuous (a) non-
appraisal/revaluation of renovated/reconstructed market,
slaughterhouse, municipal building, donated lots and other
properties with no costs ; (b) non-conduct of physical inventory of
PPEs; (c) non-maintenance of PPE Ledger Cards (PPELC) and
property cards (PC); (d) non-reconciliation of property and
accounting records; and (e) inclusion of disposed unserviceable
properties of P3.496 million to PPE accounts;
 Long outstanding RPT and SET Receivables amounting to

P494.095 million and P494.095 million, respectively, for a total of
P988.190 million were not provided allowance for impairment; and
(c) various receivables amounting to P1.570 million remained past
due for more than 10 years.
Morong Qualified  Various receivable and payable accounts amounting to P.553

million and P.784 million, respectively, remained unsubstantiated
and had been long outstanding ; and,
 Property, Plant and Equipment (PPE) account totaling to P184.755

million and Inventory balance of P.828 million could not be
ascertained due to failure to conduct complete annual physical
count of PPE, non-submission of required PPE and inventory
reports, non-updating of ledger and property cards and inclusion of
unserviceable/obsolete properties in the books.
Orani Qualified  RPT/SET Receivables mounting to P14.166 million and P14.162

million respectively, or a total of P28.328 million at year end due
to the failure to ascertain and substantiate the reported figures with
subsidiary records;
 Long overdue Loans Receivables – Others, Due from NGAs and

Loans Receivables – GOCCs amounting to P.086 million, P.009
million and P.138 million, respectively which were not covered with
subsidiary ledgers or sufficient documentation;
 Land account is inaccurate due to various parcels of land such as

the old market site which is the current municipal hall site and plaza
amounting to P2.831, million have no transfer certificates of title
and overstatement of land account due to the parcels of land
donated by the municipality to the DPWH amounting to P5.975
million still lodged in this account.
80
Orion Qualified  Property, Plant and Equipment (PPE) balances at year-end could
not be ascertained because of the continuous (a) non-submission
of Report on the Physical Count of Property, Plant and Equipment
(RPCPPE); (b) non-maintenance of complete and updated PPE
Ledger Cards (PPELC) and property cards (PC); (c) non-
reconciliation of property and accounting records; (d) inclusion of
unserviceable/destroyed properties of P2.592 million to PPE
accounts; and (e) non-appraisal/revaluation of properties with no
costs; and,
 Long outstanding RPT and SET Receivables amounting to P6.049

million and P6.049 million, respectively, for a total of P12,098
million were not provided allowance for impairment.
Pilar Qualified  Failure to substantially address prior year’s issue on PPE such as
failure to (a) address the unreconciled balances between the
inventory report and financial statements amounting to P25.153
million; (b) establish the ownership of the recorded land and
building accounts totaling P11.121 million; and (c) dispose the
unserviceable properties totaling P1.310 million resulting to
unreliable balance of the PPE account.
 RPT Receivables and SET Receivables amounting to P4.546

million and P1.480 million, respectively, were found to be unreliable
because of absence of subsidiary ledgers that will substantiate the
balance reflected in the Statement of Financial Position.
Samal Qualified  RPT/SET Receivables amounting to P3.822 million, and P3.814

million, respectively, or a total of P7.636 million at year end is
unreliable due to the failure to ascertain and substantiate the
reported figures with subsidiary records; and,
 Building account is overstated due to the demolished Municipal

Building with net book value of P1.869 million still lodged in this
account.
Bulacan Qualified  Significant deficiencies and misstatement in the audit of accounts

such as (a) erroneous recording of Property, Plant and equipment
(PPE) accounts amounting to P32.033 million; (b) understatement
of PPE accounts due to delayed recognition of cost of donated
cement of various infrastructure projects aggregating to P10.923
million; (c) inadequate provision of depreciation expense and
accumulated depreciation for assets amounting to P2.840 million;
(d) undisposed unserviceable properties totaling P9.643 million;
and (e) unreliable balances of PPE account due to the partial
conduct of the physical inventory.
 Erroneous recognition of (a) 100% completed and fully paid

Department of Energy (DOE)-funded projects and (b) interest
income accruing from the interest-bearing checking account
maintained for the said DOE fund transfers resulted in the
overstatement of Due to NGAs account by P1.507 million and
understatement of Due to NGAs account by P.005 million,
respectively.
81
Cities
Malolos City Qualified  Cash in bank account totaling P165.262 million is unreliable due to
unadjusted stale checks, unupdated and undocumented bank
accounts, unrecorded deposits attributable to the Special
Education Fund (SEF), and unadjusted unclaimed checks in the
books;
 Unrecognized expenses relevant to long outstanding cash

advances aggregating to P4.106 million;
 Ununaccounted inventories on hand totaling P4.007 million;
 Unreliable Property, Plant and Equipment (PPE) accounts

balances aggregating to P857.456 million owing to unrecognized
parcels of land, understated road networks account, and erroneous
computation of depreciation expenses, among others;
 Unreliable loans payable account due to disagreement with the

bank-confirmed balance; and,
 Unreliable trust liability account for local disaster and risk reduction
management fund (LDRRMF) amounting to P187.503 million due
to the unreverted prior years’ unexpended balance to the General
Fund and misclassification of accounts affecting the transfer and
utilization of the LDRRMF.
Meycauayan City Qualified  Cash account representing receipt of donations for disaster victims
of P.739 million was erroneously classified and deposited in the
general fund instead of trust fund;
 Sinking Fund of P29.799 million was understated by P24.835

million which is the net effect of the error in recognition of the
remittance to Philippine National Bank Trust Banking Group set
aside to pay off long-term debt while the Trustee Fee recorded
under the said account was not reclassified to the appropriate
expense account at year-end;
 Other Receivable included the amount of P8.610 million

representing the account of the former official for alleged
anomalous transactions incurred in CY 2007 which was recorded
in CY 2013 without Notice of Finality of Decision;
 Unrecorded Merchandise Inventory For Sale consisting of 117 sets

of gold jewelries amounting to P.400 million recorded as Trust
Liabilities under One Town One Product (OTOP) Bottom Up
Budgeting (BUB) Project of the City’s Pasalubong Center;
 Other Supplies Inventory was understated by P2.248 million owing

to stocks still on hand at City Environment and Natural Resources
Office (CENRO) at the end of the year;
82
 Unrecognized Disaster Response and Rescue Equipment
consisting of rescue boats totaling P2.875 million;
 Disposed vehicles with Net Book Value of P.713 million were

continuously recognized as Property Plant and Equipment (PPE);
 Books under PPE recorded in Special Education Fund since CY

2006 amounting to P23.148 million still included the value of
issued books;
 Bonds Payable had a discrepancy of P1.659 million between the

bank and book balances; and,
 Environment and Sanitary Services were overstated by P2.248

million due to direct recording of inventory.
San Jose del Monte Qualified  Cash Advances included confidential funds of P16.400 million
City under the Advances to Special Disbursing Officers account which
remained in the books from four to five years; and P9.371 million
or 36.46% which were not liquidated at year end;
 Loans Receivable account of P6.520 million remained uncollected

from five to eight years owing to unavailability of supporting
records, absence of debtor’s information, and non-imposition of
effective collection strategy; and,
 Property, Plant and Equipment (PPE) account of P1.590 billion or

68.76% could not be reconciled owing to: absence of physical
inventory of buildings, infrastructures and other assets;
unrecorded donated properties of still undetermined amount; and
non-disposal of unserviceable property totaling P59.970 million.
Municipalities
Angat Qualified  Property, Plant and Equipment (PPE) amounting to P107.107

million or 34.62% of the total assets remain doubtful due to: (a)
absence of certificate of ownership for some assets; (b) continued
inclusion of obsolete, unserviceable and fully depreciated items in
the books amounting toP2.759 million; and, (c) unreconciled
beginning balances carried over in the books during the transition
from OGAS to NGAS.
Balagtas Qualified  Property, Plant and Equipment (PPE) with net book value of
P321.705 million was not established due to (a) absence of
physical inventory reports; (b) PPE accounts costing P1.746
million from Trust Fund consisting of forwarded balances from
previous years did not have adequate accounting records; and (c)
unascertained ownership of several parcels of lots and vehicles;
Receivables for CY 2018 with year-end balances of P56.085 million
and P54.929 million respectively, were set up based on collection
estimates on the taxable assessed values instead of using the
certified list of taxpayers.
83
Baliuag Qualified  Property, Plant and Equipment (PPE) amounting to P677.630

million or 68.85% is unreliable due to (a) non-recognition in the
books of 32 parcels of Land valued at P142.693 million due to
unavailability of evidences of ownership; (b) misclassification of a
portion of land being held for lease with a total carrying value of
P145.501 million as Land instead of Investment Property; (c)
continued inclusion in the books of unserviceable items due for
disposal amounting to P1.624 million, and unaccounted items
totaling P1.656 million; and (d) failure to complete the annual
physical inventory of PPE for CY 2018.
Bocaue Qualified  Property, Plant and Equipment (PPE) with net book value of
P199.092 million as of December 31, 2018 remained unreliable
due to (a) absence of complete and accurate property cards; (b) 12
lots recorded in the Land account with book value of P19.878
million were not supported by Transfer Certificate of Titles (TCTs);
and, (c) 23 properties in the Municipality of Bocaue with TCTs
under the custody of the Municipal Treasurer’s Office remained
unrecognized in the books.
Bulakan Qualified  Property, Plant and Equipment account with a year-end balance
totaling P216.404 million was unreliable due to: (a) the GSO did
not maintain the Property Cards for each item of equipment; and,
(b) The Municipality failed to request immediate disposal of
unserviceable assets to prevent their further deterioration.
Bustos Qualified  Due from Local Government Units and the corresponding Tax
Revenue accounts of the Municipality were understated by P.539
million, P818.19 representing the receivables from the Provincial
Government of Bulacan; and,
 Property, Plant and Equipment (PPE) amounting to P82.198

million, the amount of P18.159 million procured by the Municipality
during the year for its various programs and projects were validated
and included in the Report of Physical Inventory of Property, Plant
and Equipment (RCPPE) submitted by the Municipal Treasurer
(MT). However, the following deficiencies were noted (a) non-
provision for depreciation of the PPE under the Military, Police and
Security Equipment, Other Machinery and Equipment, and Other
Property, Plant and Equipment accounts; and (b) non-maintenance
of complete property records at the MTO and Accounting Offices.
Calumpit Qualified  Property, Plant and Equipment (PPE) account balances with total
net-carrying value of P234.247 million could not be relied upon due
to (a) failure to establish the propriety of the land account; (b) non-
submission of inventory report due to uncompleted inventory
taking; and (c) failure of the Municipal Accounting Office (MAO) and
the General Services Office (GSO) to maintain PPE Ledger Cards
(PPELC) Property Cards (PCs).
84
Doña Remedios Qualified  Cash in Bank – Local Currency, Current and Time Deposit account
Trinidad in the total amount of P155.361 million were doubtful due to (a)
errors in the year-end Bank Reconciliation Statements (BRS)
submitted by the Accounting Office; (b) deposits amounting to
P.138 million were not recorded in the books due to the loss of
validated deposit slips by the Treasury; (c) disbursement vouchers
totaling to P.153 million were not submitted by the Treasury to the
Accounting Office; and (d) a PNB account amounting to P.002
million which has long been terminated was continuously
recognized in the books of accounts;
 Liquidation Documents submitted to the COA Intelligence and

Confidential Fund Audit Unit on the cash advances aggregating
P1.650 million for the Confidential and Intelligence Fund were not
properly recognized in the books and remained in the receivable
account; and,
 Property, Plant and Equipment (PPE) accounts amounting to

P385.141 million was not established due to the failure of the (a)
General Services Officer to properly maintain Property Cards; and
(b) Inventory Committee to complete the physical inventory-taking.
Guiguinto Qualified  Property, Plant and Equipment (PPE) amounting to P41.185 million
procured by the Municipality during the year for its various
programs and projects were validated and included in the Report
of Inventory submitted by the General Services Officer. However,
several deficiencies were found in the audit of the PPE account: a)
Four parcels of Land were not supported with Transfer Certificates
of Titles; b) absence of property, plant and equipment ledger
cards, real property cards for land and property cards to
substantiate the details of the PPE account; c) non- disposal of
unserviceable assets which were still recognized in the property
and accounting records and; d) non recognition of various disaster
equipment purchased totaling P.310 million.
Hagonoy Qualified  Property, Plant and Equipment (PPE) accounts totaling P28.418
million were not established arising from (a) unreconciled
difference of P15.565 million between the accounting records and
the inventory reportdue to non-maintenance of records for the PPE
account such as Property Ledger Cards by the General Services
Office (GSO) and Property, Plant, and Equipment Ledger Cards
(PPELCs) by the Municipal Accounting Office (MAO); and (b)
Unserviceable Properties totaling P5.343 million were not
disposed during the year.
Marilao Qualified  Property, Plant and Equipment (PPE) amounting to P 838.193

million was unreliable due to (a) non-provision for depreciation of
the PPE under the Market and Agricultural and Forestry Equipment
accounts with reported balances of P12.865 million and P.038
million, respectively; (b) non-maintenance of complete property
85
records at the MTO and Accounting Office; and (c) erroneous
classification of procured properties totaling to P4.420 million; and,
 Due from Local Government Units and the corresponding Tax

Revenue accounts of the Municipality were understated by P2.528
million representing the receivables from the Provincial
Government of Bulacan.
Norzagaray Qualified  Unliquidated cash advances totaling P21.317 million composed of

P7.568 million unliquidated cash advances of prior years and
P16.068 million from the current year which remained unliquidated
at year-end; and,
 Lack of action on the disposal of unserviceable property totaling

P7.211 million and the non-disclosure thereof in the financial
statements mislead readers on the actual condition of the agency's
properties thereby affecting the accuracy and reliability of the
recorded PPE account totaling P983.862 million.
Obando Qualified  Cash donation of P.100 million from Land Bank of the Philippines
intended for disaster victims were recorded under the Due to LGU
account of the General Fund instead of Trust Liabilities-Disaster
Risk Reduction and Management Fund account;
 Unrecorded receivables from stallholders at the Obando Public

Market representing market stall fees which remained uncollected
for several years amounting to P3.320 million were not recognized
in the books;
 Various unserviceable vehicles, furniture and equipment with net

book value of P691 million disposed during the year were not
derecognized in the books;
 Purchase of slightly used Backhoe Crawler type amounting to

P2.390 million using the Disaster Risk Reduction and Management
Fund was erroneously recorded as Disaster Response and Rescue
Equipment instead of Construction and Heavy Equipment; and,
 Transferred motorized banca from the Department of Environment

and Natural Resources to the Municipality thru the Municipal
Environment and Natural Resources Office in CY 2018 costing
P300 million was not recognized in the books as asset.
Pandi Qualified  Property, Plant and Equipment (PPE) accounts with carrying value
of P282.803 million as of year-end could not be relied upon due to
the (a) Municipality’s continuous failure to prepare and submit a
complete Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) of all PPE; (b) non-reconciliation of property
records by the Municipal Accountant’s Office and the Property
Custodian; and (c) disparities of records among the Municipal
Assessor’s Office, Municipal Treasurer’s Office, and Municipal
Accounting Office on the results of actual audit on the titles and
ownership documents.
86
Paombong Qualified  Property, Plant, and Equipment (PPE) accounts is unreliable
owing to failure to transfer P3.195 million worth of Construction in
Progress to the specific PPE account consequently failing to
compute depreciation charge over the years, and understatement
of the land account, among others;
 Due to NGA's account amounting to P2.386 million is unreliable;
 Misclassified income aggregating to P250 million:
 Understatement of the loans payable account by P2.233 million;

and
 Unreliable trust liability account for local disaster and risk reduction
management fund due to the unreverted prior years’ unexpended
balance to the General Fund amounting to P2.060 million; non
transfer of the unexpended LDRRMF attributable to QRF and
MOOE for CY2018 totaling P1.448 million and misclassification of
accounts affecting the transfer and utilization of the LDRRMF.
Plaridel Qualified  Several deficiencies were found in the audit of the PPE account
such as (a) the Land account included the lot in Barangay
Poblacion, purchased to be used as Multi-Purpose Building was
not evidenced by a Transfer Certificate of Title (TCT) in the name
of the Municipality; (b) the GSO failed to request disposal of
unserviceable assets totaling to P16.504 million; and, (c) the GSO
did not maintain the Property Cards for each item of equipment
under the PPE account;
 Infractions were observed in the handling, monitoring and

recording of Inventories totaling P23.665 million such as (a) direct
recording of purchases as outright expenses instead of inventories;
and (b) insufficient records of supplies.
Pulilan Qualified  Property, Plant and Equipment recorded at P260.772 million

remained unreconciled in the books of the Municipality owing to (a)
non-submission of the physical inventory report; (b) non-
maintenance of records for the PPE account (c) disparity between
the records of the Municipal Accounting Office and the Municipal
Treasurer’s Office, and other deficiencies noted in the actual audit
of the Transfer Certificates of Titles (TCT) and ownership
documents affecting the Land account.
(San) Ildefonso Qualified  Property, Plant and Equipment (PPE) account totaling to P338.458
million was doubtful due to (a) absence of transfer certificate of
title/ownership of four lots recognized under the Land account; (b)
PPE was not supported with ledger cards, real property cards for
land, and subsidiary ledgers at the accounting and property offices;
and, (c) non-disposal of unserviceable assets which were still
recognized in the Accounting and GSO records.
87
San Miguel Qualified  Property, Plant and Equipment (PPE) account was doubtful due to
the failure to conduct physical inventory of all PPE with a carrying
value of P227.908 million and property records were not
maintained.
San Rafael Qualified  Cash in Bank accounts as at year-end were understated by a net
amount of P1.345 million; and,
 Property, Plant and Equipment (PPE) accounts amounting to

P492.440 million was not established due to the failure of the (a)
Supply/Property Officer to properly maintain Property Cards; (b)
Inventory Committee to complete the physical inventory-taking and
include in the RPCPPE the procured PPE in the current year
Santa Maria Qualified  Property, Plant and Equipment (PPE) of P1.012 billion per books is
unreliable due (a) lack of legal ownership document over the
purchased lot amounting to P7.821 million; (b) PPE were not
supported with property cards to record the same in the property
office; (c) the MT failed to request the immediate disposal of
unserviceable assets with book value of P.184 million to prevent
their further deterioration; and (d) erroneous classification of
procured properties in the amount of P2.898 million; and,
 Due from Local Government Units and the corresponding Tax

Revenue accounts of the Municipality were understated by P1.767
million representing the receivables from the Provincial
Government of Bulacan.
Nueva Ecija Qualified  Property, Plant and Equipment (PPE) account balances with
carrying value of P5.510 billion were not established owing to
incomplete physical count, un-updated PPE Ledger Cards and Real
Property Ledger Cards, non-maintenance of Property Card, and
non-disposal of unserviceable property and misstatement of P6.878
million in the PPE accounts due to (a) over-provision of depreciation
by P4.117 million; (b) non-depreciation of some PPEs by P10.995
million; and (c) over-provision of depreciation on one equipment that
resulted in a negative value of P.659 million;
 Inventory Accounts amounting to P348.981 million could not be

ascertained due to (a) discrepancy of P340.071 million when
compared with the Report of Physical Count of Inventories
amounting to P8.910 million; (b) the use of First-in-First-out instead
of moving average method in costing of inventory; (c) derecognition
in the books of the some issued inventory from the books; and (d)
non-preparation of the Summary of Supplies and Materials;
 Loans Receivable totaling P8.046 million remained outstanding for

more than fourteen years due to the failure of the concerned officials
to give appropriate action, thus rendering its collectability uncertain;
and,
88
 Biological Assets amounting to P.204 million representing 45
Ostriches were not existing but recorded in the books of the
Province, while 42 goats found in government premises were not
recorded.
Cities
Cabanatuan City Modified/ • Unreliable balance of receivables for Real Property Tax (RPT) and
Qualified Special Education Tax (SET) with an aggregate amount of
P732,432,339.03 as of December 31, 2018 due to the absence of
Certified List of Taxpayers as the basis in setting up of RPT/SET
Receivable at every beginning of the year;
• Non-transfer of completed projects totaling P64,304,828.95 from

Construction in Progress (CIP) account to appropriate asset
accounts, understated the affected appropriate PPE accounts by
the same amount; and
• Unrecorded land of undetermined amount with an area of 6,215

square meters and non-transfer of unrecorded donated lot in the
name of the City Government with an area of 1,032 square meters
renders the correctness of the Land account balance unreliable.
Gapan City Qualified • Real Property Tax (RPT) and Special Education Tax (SET)
receivables with an aggregate amount of P59.693 million as of
December 31, 2018 could not be ascertained .
Palayan City Qualified • Other Receivable accounts of P33.397 million or 99.67% of the
total reported account balance of P33.509 million as of December
31, 2018 could not be ascertained due to incomplete subsidiary
ledgers and supporting documents/schedules;
• Other Investment account balance of P17.339 million pertaining to

the Local Pabahay Project in CY 1996, was not supported with
records and documents,
• Property, Plant and Equipment (PPE) account is doubtful due to

failure to (a) maintain adequate property records/supporting
schedules for the total Property, Plant and Equipment (PPE)
account balance of P163.392 million; (b) recognize depreciation
expense of P4,378 million and accumulated depreciation of
P8,281 million; and (c) adjust the noted deficiencies in recording
of various PPEs and depreciation expense totaling P4.700 million;
and, (d) Public Infrastructures totaling P23.395 million previously
transferred to registries were not recorded to appropriate PPE.
San Jose City Unqualified
89
Science City of Unqualified
Muñoz
Municipalities
Aliaga Unqualified
Bongabon Qualified • Unreliable basis of recorded RPT and SET receivables totaling to
P181.268 million; and,
• Accounts payable for two to five years amounting to P2.242 million

remained dormant.
Cabiao Qualified • Unreliable PPE accounts totaling P221.844 million, of which

various items totaling P4.603 million erroneously recorded as part
of Disaster Response and Rescue Equipment and non-submission
of Report on the Physical Count of PPE (RPCPPE);
• Unliquidated Cash Advances totaling P2.484 million affecting the

expense account;
• Discrepancy of P.004 million between the year-end balances of

the reciprocal accounts, Due from Other Funds and Due to Other
Funds amounting to P4.487 million and P4.491 million,
respectively; and,
• Presence of abnormal balances of accounts Due to GSIS, Due to

Pag-IBIG and Due to PhilHealth totaling (P.037 million).
Carranglan Modified/ • Real Property Tax (RPT) Receivables and Special Education Tax
Qualified (SET) Receivables reported in the books at P5.243 million and
(P2.399 million), respectively, are not reliable due to improper
bases of setting up the said receivables.
• Non-classification of current portionof the Loans Payable-Domestic

and the variance of P3.109 million between the book balance of
P9.401 million and the amount of P12.510 million as confirmed by
the lending bank.
Cuyapo Modified/ • Unreliability of the (1) reported balances of Cash-in-Bank (CIB)

Qualified accounts as of December 31, 2018 totaling P25.394 million due to
(a) unaccounted net difference of P.512 million between adjusted
book and bank balances; and (b) uncancelled stale checks of
P.573 million; and,
• Property Plant and Equipment (PPE) totaling P324.842 million is

unreliable due to unreconciled difference of P210.713 million
between the Accounting records and the report in the physical
count of PPE.
90
Gabaldon Unqualified
General Mamerto Qualified • Receivables of the Municipality totaling P1.561 million as of

Natividad December 31, 2018 remained outstanding in the books for over ten
years without documents evidencing their existence;
• Inventory accounts totaling P.392 million were doubtful due to the

unrecorded issuances of inventory items.
• Failure to (a) maintain complete Property Ledgers Cards and

conduct of yearly physical inventory on all PPE casting doubt on
the accuracy and existence of Property, Plant and Equipment
(PPE) accounts valued at P211.386 million as at year end; (b)
prepare supporting computation of accumulated depreciations
amounting to P17.178 million; and (c) recognize depreciation for
public infrastructure accounts recorded back from registries.
General Tinio Qualified • Real Property Tax (RPT) and Special Education Tax (SET)
receivables with an aggregate amount of P53,389 million as of
December 31, 2018 could not be ascertained due to unreliable
basis in recording of receivables at the beginning of the year.
Guimba Qualified • Property, Plant and Equipment (PPE) with a recorded value of
P427.374 million as of December 31, 2018 is unreliable due to
deficient property accounting and management practices.
Jaen Qualified • Unreconciled difference of P22.407 million between the bank and
book balances of the cash in bank account due to non-preparation
of bank reconciliation statements;
• Unreliable balance of PPE accounts due to (a) non-conduct of the

complete physical inventory of PPE and non-reconciliation of its
report with the accounting records casting doubt on the correctness
of PPE with carrying value of P177.587 million; (b) non-recognition
of depreciation on depreciable assets amounting to P141.048
million; and, (c) non-recognition of at least 75% of the
Infrastructure Assets recorded in the Registry of Public
Infrastructure amounting to P86.386 million;
• Unaccounted and undocumented Other Receivable account

amounting to P.043 million which constitutes 27% of the total Other
Receivable account of P.158 million;
• Discrepancy amounting to P2.880 million of reciprocal accounts,

Due from Other Funds and Due to Other Funds, for all funds; and,
• Failure to transfer the unexpended/unutilized and unobligated

LDRRMF balances in the total amount of P5.072 million to a
Special Trust Fund.
91
Laur Qualified • Failure to recognize Allowance for Impairment of Receivables;
• Presence of dormant receivables which were non-moving for more

than 10 years; and,
• Failure to recognize infrastructure assets that were recorded in the

Registry of Public Infrastructures (RPI) as at end of CY 2018.
Licab Unqualified
Llanera Unqualified
Lupao Unqualified
Nampicuan Qualified • Real Property Tax (RPT) and Special Education Tax
(SET)receivables with an aggregate amount of P13.904 million as
of December 31, 2018 is unreliable due to incorrect basis in
recording receivable at the beginning of CY 2018 and the failure to
set up the said receivables for CY 2016.
Pantabangan Qualified • Unreliable reported balances of Property, Plant and Equipment

(PPE) accounts as of December 31, 2018 totaling P739.878
million;
• Non-recording of the balances of Receivables from Real Property

Tax (RPT) and Special Education Tax (SET) understated the
receivable accounts; and,
• Unclassified completed infrastructure projects amounting to

P56.344 million to its proper Property, Plant and Equipment
accounts.
Peñaranda Qualified • Unreliable Real Property Tax (RPT) and Special Education Tax
(SET) receivables amounting to P 75.900 million due to incorrect
basis in recording at the beginning of the year.
Quezon Qualified • Unreliable balances of Real Property Tax (RPT) and Special
Education Tax (SET) accounts amounting to P15.778 million;
• Failure to accrue to a special trust fund the unexpended balances

of Local Disaster Risk Reduction Management Fund (LDRRMF)
amounting to P10.941 million in CY 2018;
• Doubtful validity and correctness of the reported lability accounts

of the Municipality amounting to P23.252 million due to various
deficiencies noted in audit;
• Unreliable balance of Property, Plant and Equipment amounting to

P88.427 million due to discrepancy between general and
subsidiary ledgers balances, abnormal balance and other various
deficiencies noted in audit such as failure to conduct required
92
annual physical count, non-submission of Report on Physical
Count of PPE (RPCPPE) and non-maintenance of property cards
and records; and,
• Unsubmitted accounts such as official receipts, disbursement

vouchers and payroll of P36.357 million as of February 15, 2019.
Rizal Unqualified
San Antonio Qualified  Non-recognition of depreciation of all depreciable assets

amounting to P18.449 million affecting the carrying value of the
PPE accounts; non-recognition of at least 75% of the Infrastructure
Assets recorded in the Registry of Public Infrastructure to specific
asset accounts amounting to P31.027 million; (c) non conduct of
the complete physical inventory of PPE and non-reconciliation of
its report with the accounting records casting doubt on the
correctness of PPE with carrying value of P368.455 million; and,
 Failure to set up Real Property Tax (RPT) Receivable and Special

Education Tax (SET) Receivable for CY 2018, render the year end
balances of the accounts of P14.915 million unreliable.
San Isidro Qualified  Unreliable balance of tax account receivables for Real Property
Tax (RPT) and Special Education Tax (SET) with an aggregate
amount of P89.905 million due to incorrect basis in recording of
receivables at the beginning of the year.
 Assistance to Individuals in Crisis Situation (AICS) amounting to

P1.626 million was recognized in the books of accounts as Other
Maintenance and Operating Expenses instead of Donations
account.
San Leonardo Modified/  PPE and Government Equity accounts is understated due to
Qualified derecognition of completed projects amounting to P35.059 million;
non-recognition of at least 75% of the Infrastructure Assets
recorded in the Registry of Public Infrastructure to specific asset
accounts amounting to P111.562 million; non-recognition of the
depreciation for depreciable assets totaling P120,041 million; and,
non-conduct of the complete physical inventory of PPE by
Inventory Committee and non-reconciliation of the corresponding
report with the accounting record;
 Cash in Bank – Local Currency amounting to P18.380 million as

of December 31, 2018 is unreliable due to (a) non reconciliation
between the records of the Accounting and Treasurer’s Office; (b)
improper recording of checks issued in the cashbook; and (c) non-
submission of monthly bank reconciliation statements (BRS)
resulting in the unreconciled difference of P10.591 million; and,
 Real Property Tax/Special Education Tax Receivables balance

amounting to P51.869 million as of year-end is inaccurate due to
incorrect basis in recording of tax receivables.
93
Santa Rosa Qualified  Real Property Tax (RPT) and Special Education Tax (SET)
receivables with an aggregate amount of P66.771 million as of
December 31, 2018 could not be ascertained due to incorrect basis
in recording of receivables at the beginning of the year.
Santo Domingo Qualified  Real Property Tax (RPT) and Special Education Tax (SET)
receivable accounts amounting to P104.297 million is unreliable
because of the incorrect basis in setting up of the said receivables
at every beginning of the year;
 Cash advances amounting to P.906 million remained unliquidated

as of year-end; and,

million or 64% of the total assets of the Municipality as of December
31, 2018 could not be ascertained due to various deficiencies noted
in audit.
Talavera Qualified  Real Property Tax (RPT) and Special Education Tax (SET)
receivable accounts amounting to P365.833 million is doubtful
because the setting up of the said receivables at every beginning
of the year was based on the unupdated Real Property Tax
Account Register (RPTAR);
 Loans Receivable amounting to P5.253 million is unreliable due to

the non-moving/overdue accounts and failure to
compute/determine impairment losses;
 Property, Plant & Equipment (PPE) account amounting to

P729,843 million or 59.75% of the total assets of the Municipality
as of December 31, 2018 is doubtful due to incomplete conduct of
annual inventory taking of the Inventory Committee and non-
reconciliation of balances between the Report on Physical Count
of PPE (RPCPPE) and records of Accounting Unit and non-existing
PPEs amounting to P.331 million still recorded in the book of
accounts; and
 Inventory account is overstated due to unrecorded

distribution/issuance of Agricultural and Marine Supplies
Talugtug Unqualified
Zaragoza Unqualified
Pampanga Qualified  Inventories is overstated due to inclusion of non-existent

inventories costing P1.845 billion;
94
Pampanga Qualified  Property, Plant, and Equipment (PPE) is understated due to the
non-recognition of the cost of (a) local road networks totaling
P2.962 billion; (b) undetermined value of 80 titled lots and 523
untitled lots with value of at least P29.194 million; and (c) the
balance in the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) was not in consonance with that of the
accounting books amounting to P157.770 million ;
 Cash-in-Bank account balances totaling P4,317,325,427.18 is

doubtful due to discrepancy of P118.212 million in the confirmed
bank balances and delayed preparation of 51 bank reconciliation
statements; and,
 Accounts Payable is doubtful due to existence of dormant accounts

totaling P183.899 million.
Cities
Angeles City Qualified  Property, Plant and Equipment (PPE) accounts with carrying value
of P3.236 billion and the existence thereof were not established
due to (a) unaccounted property items (b) unreconciled/un-
updated property records of the General Service Office and
Accounting Office with discrepancy of P102.698 million; and (e)
unaccounted prior year’s Construction in Progress account
balances included in the year-end balance of P960.720 million;
and,
 Accounts Payable account of P329.427 million was doubtful

because of the (a) continued presence of payables aged to two to
ten years in the total amount of P47.256 million; and (b)
inadequacy of pertinent documents to substantiate the regularity
and existence of obligations.
San Fernando City Qualified  Long-term debt amounting to P26.580 million were not recorded
under current liabilities;
 Interest on the loan granted aggregating to P3.497 million which

requires the capitalization of borrowing costs of the qualifying asset
was treated as outright expense;
 Depreciation for assets with total acquisition cost of P405.713

million was not computed;
 Inventory account of P81.088 remained unreconciled with the

records of the City General Services Office (CGSO);
 Accounts Payable (AP) of P527.848 million were not established

for lack of complete documentations to substantiate the items; and
 Accounts payable amounting to P17.243 million is dormant for two

to five years.
Mabalacat City Management  No submitted Financial Statements

Letter
95
Municipalities
Apalit Qualified  Property, Plant and Equipment (PPE) accounts amounting to

P160.755 million were not established due to (a) absence of
complete records for PPE totaling to P160.755 million; (b)
unreconciled PPE balance of P24.950 million; (c) unreconciled
Land balance of P2.450 million; (d) non-maintenance of Subsidiary
Ledger Cards and Property, Plant and Equipment Ledger Cards;
and (e) Property custodianship and location were neither
established due to absence of property records and non-conduct
of the annual physical inventory.
Arayat Qualified  PPE Accounts of P77.320 million cannot be ascertained due to

failure of the Management to report the value of infrastructure
assets amounting to P51.446 million which should have been an
addition to the existing balance of the account as at year end.
Bacolor Qualified  Property, Plant and Equipment (PPE) amounting to P117.386

million were not established due to (a) absence of records for PPE
totaling to P94.947 million; (b) unreconciled difference of P11.288
million between the accounting records and the inventory report;
(c) undepreciated various PPE valued at P63.077 million; (d)
unrecorded donated properties without cost; and (e) non-
maintenance of Property Cards by the Municipal Treasurer’s
Office.
Candaba Qualified  Cash in bank amounting to P101.517 million remained unreliable

due to failure of the Management to prepare Bank Reconciliation
Statements.
Floridablanca Qualified  Property, Plant and Equipment (PPE) accounts with a reported net
book value of P135.992 million (net of Construction in Progress
amounting to P29.298 million) as of December 31, 2018 was
unreliable owing to the (a) failure of the Management to conduct a
complete physical inventory; (b) unreconciled amounts of the
physical inventory report with the accounting records; (c) various
parcels of land declared and owned by the Municipality not covered
with Transfer Certificates of Title; and (d) non-provision of
depreciation at an undetermined amount for Infrastructure Assets
and other PPE.
Guagua Modified/  Property, Plant and Equipment (PPE) with reported net book value
Qualified of P162.899 million (net of Construction in Progress accounts) as
of December 31, 2018 was not established owing to (a) various
parcels of land declared as owned and titled in the Municipality of
Guagua not recognized in the books; and not covered with
Transfer Certificates of Title (TCT)/Original Certificates of Title
(OCT); (b) incomplete physical inventory and property records; (c)
unreconciled amounts of the report of inventory with the accounting
records; and (d) non-provision of depreciation at an undetermined
amount for the infrastructure assets totaling P86.764 million.
96
Lubao Qualified  Property, Plant and Equipment (PPE) accounts with carrying value
of P296.676 million or 39.17% of the total assets was not
established owing to (a) continuous failure of the Management to
complete the conduct physical inventory of its property during the
year; (b) non-submission of the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE); (c) non-reconciliation of
property records by the Municipal Accountant’s Office and the
Property Custodian; (d) unrecognized parcels of land of
undetermined value owned by the Municipality; and (e)
unascertained ownership of several parcels of land without TCTs
with a total assessed value of P20.889 million.
Macabebe Qualified  Property, Plant and Equipment (PPE) accounts carried in the
statement of financial position at P97.343 million were not
established due to (a) non-submission of a comprehensive
inventory report; (b) continual omission on the maintenance of
Property Cards, Ledger Cards and Acknowledgement Receipts; (c)
inability to substantiate the details of land account; (d) unrecorded
Transportation Equipment; (e) understatement of recorded
depreciation expense; and (f) failure to monitor and report
Unserviceable PPEs.
Magalang Qualified  Accounts in the financial statements did not reflect the actual
balances when tallying all accounting journals and comparing it
with working trial balance resulting in huge variance of P36.938
million and P31.658 million, respectively; (b) over-provision of
depreciation expense equivalent to one-month or P.781 million; (c)
unaccounted recorded land valued at P7.472 million; and (d)
understatement of various Property, Plant and Equipment accounts
totaling P23.974 million acquired thru Trust Fund.
Masantol Qualified  Property, Plant and Equipment (PPE) accounts are carried in the
statement of financial position at P86.336 million were not
established due to (a) absence of records for PPE totaling to
P86.336 million; (b) unreconciled Land balance of P3.067 million;
(c) non-maintenance of Subsidiary Ledger Cards and Property,
Plant and Equipment Ledger Cards; and (d) Property custodianship
and location were neither established due to absence of property
records and non-conduct of the annual physical inventory.
Mexico Qualified  Understatement of the receivables and government equity owing

to the non-recording of the disallowances which became final and
executory as receivable of P19.693 million;
 Overstatement of inventories due to inclusion of non-existent

inventories totaling to P6.539 million; and,
 Overstatement of the Due to BIR accounts by P.515 million due to

errors in recording.
97
Minalin Modified/  Property, Plant and Equipment (PPE) accounts are carried in the
Qualified statement of financial position at P46.025 million were not
established due to (a) failure of the Inventory Committee to fully
complete the physical inventory taking of the property owned by the
agency; (b) failure to prepare and submit complete Report on the
Physical Count of Property, Plant and Equipment (RPCPPE) of all
PPE; (c) non-reconciliation of property records by the Municipal
Accountant’s Office and the Property Custodian; and (d)
unrecognized 34 parcels of land (including donated lots); and (e)
unascertained ownership of several parcels of land without TCT’s
with total market value of P3.120 million and assessed value of
P.573 million.
Porac Qualified  Land account booked at P12.185 million under the Property, Plant
and Equipment (PPE) accounts as of year-end was not established
due to the (a) unrecognized parcels of land of undetermined value
owned by the Municipality; and (b) unascertained ownership of
several parcels of land without TCTs as of year-end.
San Luis Qualified  Overstatement of inventories due to inclusion of non-existent

inventories totaling to P.160 million;
 Property, Plant and Equipment (PPE) accountis unreliable due to

the failure to account/recognized infrastructure assets and record
donated medical equipment with aggregate value of P1.827 million
and failure to de-recognize in the books of accounts the cost of
donated parcels of land.
San Simon Qualified  Property, Plant and Equipment accounts, net of depreciation,
amounting to P126.255 million was not substantiated due to non-
conduct of physical inventory/non-submission of the Report on the
Physical Count of PPE (RPCPPE), non-maintenance of property
records, and annual depreciation for CY 2017-2018 was not
recognized; and (b) roads and infrastructure assets costing P22.985
million were not recorded in their respective PPE account.
Santa Ana Qualified  Property, Plant and Equipment (PPE) account is unreliable due to
the failure to record donated medical equipment with aggregate
value of P1.167 million and absence of property records, non-
conduct of physical count and failure to submit the required report.
Santa Rita Qualified  Property, Plant and Equipment (PPE) accounts with a reported
carrying value of P180.110 million as of December 31, 2018 was
unreliable owing to the (a) failure of the Management to conduct
physical inventory; (b) non-provision of depreciation amounting
to P2.330 million of the PPE acquired in CY 2018 totaling P21,961
million; c) non-maintenance of complete property cards by the
Municipal Treasurer; and (e) parcels of land declared and owned
by the Municipality not covered with Transfer Certificates of Title.
98
Santo Tomas Qualified  Property, Plant and Equipment are carried in the statement of
financial position at P54.036 million were not established owing to
inability of the Accounting and General Services Offices to (a)
conduct a complete physical count and submit the corresponding
Report on the Physical Count of PPE (RPCPPE); (b) comply with
the initial recognition of local road networks costing P7 million as
part of the PPE of CY 2018 accounts; and (c) prepare Property
Cards (PCs) and Property, Plant and Equipment Ledgers Cards
(PPELC) for each category of assets.
Sasmuan Qualified  Real Property Tax and Special Education Tax Receivables as of
December 31, 2018 in the amount of P2.308 million and P.081
million, respectively, was not established due to the difference of
P2.226 million.
Tarlac Qualified  Doubtful balance of the cash in bank amounting to P2.229 billion;
 Unadjusted year-end balance of advances to officers and

employees owing to non-liquidation of non-moving cash advances
worth P12.144 million and current year’s cash advances of P1.688
million;
 Un-updated receivables from NGOs/POs and NGAs of P8 million

and P1.760 million, respectively;
 Unreliable negative balance of inventory accounts at P31.389

million;
 Inaccurate year-end net carrying value of Property, Plant and

Equipment (PPE) at P4.371 billion; and,
 Unreconciled balance of Due to BIR account amounting to P21.218

million.
City
Tarlac City Qualified  Cash in bank accounts as of December 31, 2018 remained
irreconcilable with those appearing in the bank documents, and the
Treasury and Accountant’s Office reported cash accounts balances
of P801.635 million and P876.160, million, respectively,
registering a disparity of P74.525 million;
 Receivables amounting to P31.962 million is doubrtful because

P6.414 million of which, aging from ten to 42 years lacked the
detailed information/supporting documents to substantiate the
recorded values; and
 Due from Other Funds and Due to Other Funds, for all funds in the
amount of P54.308 million and P85.446 million, respectively, are
doubtful due to a difference of P31.136 million.
99
Municipalities
Anao Unqualified
Bamban Qualified  Real Property Tax Receivables and Special Education Tax
Receivables totaling P2.020 million as at year-end are unreliable;
and ,
 Property, Plant and Equipment (PPE) accounts with a carrying

value of P346.720 million as of December 31, 2018 is unreliable.
Camiling Unqualified
Capas Qualified  Unreliability of RPT and SET receivables totaling to P22.597 million
as of December 31, 2018 are unreliable; and.
 PPE at P500.989 million at year end is inaccurate.
Concepcion Unqualified
Gerona Unqualified
La Paz Qualified  RPT and SET receivables totaling to P1.005 million as of

December 31, 2018 are unreliable; and.
 PPE amounting to P278.108 million is inaccurate.
Mayantoc Unqualified
Moncada Qualified  RPT and SET receivables totaling to P15.703 million as of

December 31, 2018 are unreliable; and.
 PPE amounting to P414.441 million is inaccurate.
Paniqui Modified/  Overstatement of the balance of the Guaranty Deposits Payable

Qualified account by P3.813 million;
 Unreliable balance of RPT and SET receivables totaling P61.722

million; and,
 Inaccurate year-end net carrying value of Property, Plant and

Equipment (PPE) at P407.396 million.
Pura Unqualified
Ramos Unqualified
San Clemente Unqualified
100
San Jose Unqualified
San Manuel Unqualified
Santa Ignacia Qualified  RPT and SET receivables totaling P38.436 million are unreliable;
and,
 Property, Plant and Equipment (PPE) at P215.440 million is

inaccurate.
Victoria Qualified  Real Property Tax Receivables and Special Education Tax
Receivables totaling P2.833 million as at year-end are unreliable;
and,
 Property, Plant and Equipment (PPE) accounts with a carrying

value of P235.337 million as of December 31, 2018 is inaccurate.
Zambales Qualified  The Property, Plant and Equipment accounts were overstated by a
net amount of P91.974 million;
 Shares from Real Property Taxes totaling to P15.431 million were

not recognized which prescribes the recognition of revenue from
Non-exchange Transactions;
 Discrepancy of P21.390 million between the reciprocal accounts

Due to and Due from Other Funds;
 Liability accounts were overstated by a net amount of P9.919

million for non-derecognition of settled loans amounting to P10.012
million; and,
 Non-recognition of accrued interest expense of P.093 million.
City
Olongapo City Qualified  Non-maintenance of Subsidiary Ledgers (SLs) to substantiate the
PPE General Controlling accounts totaling to P5.078 billion as at
year-end;
 Depreciation was either not provided or erroneously recorded

resulting to the net overstatement of various PPE accounts by
P160,274 million;
 Discrepancy of P50.519 million was noted between the reciprocal

accounts Due to Other Funds and Due from Other Funds.
Municipalities
Botolan Qualified  Failure to restore the recording of Public Infrastructures with a net
carrying value of P77.848 million to the Property, Plant and
Equipment accounts;
101
 Unrecorded unissued medicines and medical supplies totaling to
P.286 million;
 Erroneous recognition of fees amounting to P.099 million, imposed

for the processing of Certificate of Title on housing units and lots of
beneficiaries at New Taugtog Resettlement Area, as Other Service
Income instead of Trust Liability;
 Non-recognition of various equipment and tools worth P.236 million

as assets; and
 Shares of a Non-Governmental Organization (NGO) in the

entrance fees collected at Tukal-Tukal Falls amounting to P.019
million were erroneously treated as income of the Municipality
instead of Other Payables.
Cabangan Qualified  Understatement of accumulated depreciation of Road Networks

and Motor Vehicles by P1.264 million; and,
 Non-recognition of certain PPE items amounting to P6.120 million.
Candelaria Qualified  Collections made during the month of December 2018 amounting
to P.464 million were not recognized on the proper accounting
period;
 Construction Materials Inventory and Construction in Progress

accounts were understated by a total of P1.177 million:
 Inventory items such as personal protective equipment totaling to

P.096 million were inappropriately charged to Other Maintenance
and Operating Expenses account.
Castillejos Qualified  Property, Plant and Equipment (PPE) accounts were uncertain due
to recording of several property, plant and equipment based on the
tax assessed value instead of the cost or market value and non-
recognition of depreciation thereof resulting in a net
understatement of P8.553 million;
 Existence of dormant balances under the Due to NGAs/GOCCs

and Due from Other LGUs accounts casting doubt on the
collectability and reliability of the ledger balances of P10.483
million and P.553 million, respectively.
Iba Modified/  Property, Plant and Equipment (PPE) accounts with a net carrying
Qualified amount of P354.704 million as of December 31, 2018 were
uncertain due to the failure to adopt depreciation accounting for
various PPE accounts costing P126.893 million or 38.82% of the
total depreciable assets of the LGU; and improper accounting
treatment for completed project/PPEs acquired out of Trust Fund
resulting to the non-recognition of depreciation expenses of P.339
million;
102
 Interest Expenses incurred on loans from East West Banking
Corporation and Interest Payable accounts were both understated
by P1.020 million due to failure to recognize the accrual thereof in
the books of the Municipality; and,
 Receivables from market rental were not recognized.
Masinloc Qualified  Property, Plant and Equipment (PPE) accounts with a net carrying
amount of P897.502 million as of December 31, 2018 were
uncertain due to the (a) improper accounting treatment for (a)
ongoing and completed projects totaling to P47.218 million; and (b)
erroneous classification to PPE of assets acquired for distribution
and small tangible items with aggregate costs of P.7307 million;
and (b) misclassification of PPE accounts amounting to P.282
million.
Palauig Qualified  Property, Plant and Equipment (PPE) accounts with carrying
amount of P172.347 million or 74.48% were uncertain due to non-
provision of depreciation and P.137 million was committed in
recording the accumulated depreciation of irrigation canal to
Accumulated Depreciation – Flood Control System, instead of
Accumulated Depreciation – Water Supply System.
San Antonio Modified/  Property, Plant and Equipment valued at P269.184 million is
Qualified unreliable due to non-recognition of depreciation of P5.908 million
and improper accounting treatment for a completed project of
P3.947 million;
 Purchases of welfare goods for distribution amounting to P1.224

million were recognized as outright expenses.
San Felipe Modified/  Assets and liabilities were misstated by P9.737 million and P4.523
Qualified million, respectively, due to the improper recording of the receipt,
transfer and utilization of the loan from the Municipal Development
Fund Office (MDFO).
San Marcelino Modified/  Properties acquired such as furnitures, fixtures and office
Qualified equipment worth P1.050 million were erroneously recognized as
Repair and Maintenance Expenses and Construction in Progress,
thus, the corresponding cost of depreciation of P.227 million was
not taken-up;
 Shares from Real Property Taxes and Tax on Sand, Gravel and
Other Quarry Products totaling P1.214 million were not
recognized;
 Uncollected rentals from stall leases/occupants of government-

owned building and market amounting to P.384 million were not
accrued as at year-end;
 RPT/SET Receivables and Deferred Credit accounts was not

made upon receipt of the municipal share from RPT and SET of
P.452 million each;
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 Payables totaling to P.530 million which were already paid
remained unadjusted in the books.
San Narciso Modified/  Overstatement in the Property, Plant and Equipment (PPE)
Qualified accounts of P.142 million due to the non-provision of depreciation
of P.848 million;
 Improper recording/non-recording of assets with net

understatement of P.705 million; and,
 Unreconciled differences of P2.445 million between the amount of

the recorded RPT and SET receivables and the related Deferred
Credits accounts.
Santa Cruz Qualified  Understatement in the Assets account of P10.157 million due to
the non – capitalization of borrowing cost;
 Non–recognition of audit disallowances under Receivables –

Disallowances and Charges amounting to P3.772, million; and,
 Understatement of Net Assets/Equity for P2.389 million due to the

overstatement of Interest Expenses on loans.
Subic Disclaimer  Failure of the Municipality to submit 5,411 transaction documents

which is equivalent to 89.77% of the total transactions for CY 2018
Region IV-A - CALABARZON
Batangas Qualified  Other Receivables and Trust Liabilities accounts are overstated by
the amount of P581.315 million;
 Recorded transactions relating to the Renewal of Lease Agreement

dated September 25, 2017 with the Lyceum of the Philippines
University (LPU)- Batangas on the lease of the 27,270 square
meters lot and recognition of the said lot amounting to P245.430
million do not conform with the provisions of Philippine Public
Sector Accounting Standards (PPSAS) 1, “.
 Inventories of P251.015 million cannot be fully ascertained ;
 Receivables – Due from LGUs and Financial Liabilities, Current –

Due to LGUs, as of December 31, 2018 of P93.423 million and
P81.467 million, respectively, are doubtful, arising from non-
identification of reconciling items of P68.262 million and P80.018
million, respectively, on the reciprocal accounts of the concerned
Municipal Accountants.
 Financial Liabilities, Current - Accounts Payable and Due to

Officers and Employees of P32.908 million is also doubtful;
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 Loans Receivables-Others of P13.093 million include accounts
which had been outstanding for more than five years and not
reconciled with complementary records of the concerned provincial
offices.
 Biological Assets of P13.240 million are doubtful since it is not

supported by an updated Inventory Report and/or Status Report for
Livestock Dispersal Project;
 Motor Vehicles still includes units that were already auctioned and
disposed through negotiated sale in January 13, 2016;
 Other Property, Plant and Equipment (OPPE) also includes

lost/stolen vehicles with carrying value of P1.663 million;
 Surplus is understated by Income from Consignment Operations of

 Hospital Fees formed part of the P164.069 million Receivables

from PhilHealth and other sponsoring agencies, where such
accounts have been recognized as Trust Liabilities.
 Receivables and Surplus are overstated by the Utilities Expense

that should have been borne by entities that are not within the
Province’s operations but are doing business inside the Provincial
Capitol compound.
Cities:
Batangas City Qualified  Unreconciled Property, Plant and Equipment (PPE) accounts with
the Report of Physical Count of PPE (RPCPPE) maintained by the
General Services Office (GSO) still persisted as of year-end 2018
with a total deficiency of P447.440 million due to presence in the
books of properties already auctioned/sold/demolished,
unidentified beginning balances, and unreconciled items with the
inventory report;
 Receivables accounts totaling P56.552 million remains doubtful .
Lipa City Qualified  Real Property Tax (RPT) Receivables/Deferred Real Property Tax
Income of P15.024 million and Special Education Tax (SET)
Receivables/Deferred Special Education Tax Income of P3.956
million are unreliable;
 Land account balance of P196.463 million as of December 31,

2018 was misstated due to 37 unrecorded lots owned by the City
and one lot costing P6.569 million, recorded twice in the books
accounts due to non-reconciliation of inventory results and
accounting records.
Tanauan City Modified/  Property, Plant and Equipment (PPE) with an aggregate carrying
Qualified value of P2.539 billion net of Construction in Progess (CIP) could
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not be ascertained due to: a) non-creation of an Inventory
Committee to conduct physical count of PPE and prepare the
corresponding report in the prescribed form; b) non-disposal of
unserviceable property valued at P22.960 million; and c) non-
reconciliation of the discrepancy amounting to P633.220 million
between the Accounting and Property records;
 Road Networks Ledger and Property Cards for all roads and its
Office and the General Service Office (GSO), thus, casting doubts
on the validity, accuracy and existence of the recorded Road
Networks of P292.221 million, net of depreciation as of year-end;
 One Hundred Eleven (111) parcels of land acquired by the City

through purchase and donations amounting to P23.993 million and
were recorded in the City’s books of accounts, were not covered
with Transfer Certificate of Title (TCT), while 49 parcels with a
market value of P211.281 million were not booked-up, of which 31
parcles were also not covered with TCT.
 Land with an area of 13,638 square meters and assessed value of

P.859 million registered in the name of the Roman Catholic church
was recorded in the books and included in the Inventory of Land
submitted;
 Fund Transfers/Grants and other collections received from

Commission on Higher Education (CHED), Technical Education
and Skills Development Authority (TESDA) and other sources
amounting to P9.462, million as well as the disbursements in the
total amount of P.321 million were not recorded in the City’s books
of accounts;
 Cash Advances for confidential funds and specific purpose

amounting to P3.560 million and P.036 million, respectively, were
not liquidated at year-end and/or settled;
 Loans Receivable balance of P9.162 million as of December 31,

2018, only P1.236 million or 12.02 per cent were collected during
the year;
 Absence of proper monitoring and control on the maintenance of

subsidiary ledgers/records per debtor resulted in
abnormal/negative balances on the schedules of Loan Receivable
account in the Trust Fund amounting to P.017 million;
 Eight thousand two hundred sixteen (8,216) pieces of Accountable

Forms/Official Receipts issued by the City for the period January to
November 2018 with an aggregate value of P60.524 million were
not submitted to the Audit Team for post-audit;
106
 Unremitted GSIS premium contributions of P.008 million as of
December 31, 2018 and unreconciled in-default loan accounts and
unpaid premiums in the total amount of P2.909 million per GSIS
records.
Municipalities
Agoncillo Qualified  Property, Plant and Equipment (PPE) account amounting to

P140.048 million (gross) of the Municipality could not be
ascertained due to several noted deficiencies.
 Cash in Bank- Local Currency, Current Account (LCCA) could not

be established due to (a) unreconciled Cash in Bank balance as of
December 31, 2018 of P105.143 million with the Municipal
Treasurer’s cashbook of P105.160 million resulting to a difference
of (P.017 million); (b) non-maintenance of separate cashbook and
subsidiary ledger for each Cash in Bank account under Trust Fund;
and (c) the presence of stale checks amounting to P.555 million
and cancelled check in the amount of P.001 million.
 Real Property Tax (RPT) Receivables and Special Education Tax

(SET) Receivables as of December 31, 2018 totaling P3.372
million, net of discount, were doubtful as to its reliability due to (a)
untimely set up of the RPT/SET Receivable; (b) undue cancellation
of the beginning balance of the receivable account; and (c) failure
of the Municipal Treasurer to furnish the Summary of Tax
Delinquent as of year-end.
 Various supplies procured by the Municipality during the year which

amounted to P5.369 million were taken up in the books as direct
expenses instead of recording them through their proper Inventory
accounts following the perpetual inventory approach.
Alitagtag Qualified  Property, Plant and Equipment accounts totaling P148.855 million
352.72 net of depreciation, has a reported discrepancy of P161.350
million between the latest physical count and financial statement
balances
 Unaccounted and unserviceable properties amounted to P22.734

million and P4.610 million as well as barangay structures still form
part of the PPE:
 11 parcels of Land with a total assessed value of P2.639 million

have no Torrens Certificate of Title under the name of Municipality
hence not recorded in the books of accounts; and,
 Real Property (RPT) and Special Education Tax (SET)

Receivables totaling P5.306 million at year-end was doubtful due
to discrepancies of P2.448 million with the Municipal Treasurer’s
Report of Delinquent Accounts of P2.858 million.
107
Balayan Qualified  Property, Plant and Equipment (PPE) with a carrying amount of
P422.092 million remained unreliable due to: a) inclusion of
undetermined prior years’ balances totaling P104.605 million in the
reports submitted by the Municipal General Services Officer; b)
unreconciled PPE records between Accounting Office and General
Services Office; c) payments for various PPE under Trust Fund
directly debited to Trust Liability account instead to appropriate
asset account; and d) inclusion of unserviceable properties
amounting to P14.033 million in the inventory reports and in the
books;

Receivables of the Municipality amounting to P119.396 million and
P119.008 million respectively, are doubtful due to: a) unreconciled
balances; and b) absence of details of the accounts showing the
list of the taxpayers and the amounts collectible from them and
were not reconciled with the Summary of Delinquent Properties
submitted by the Municipal Treasurer’s Office as at December 31,
2018;
 P10 Million representing payment of business taxes was

erroneously taken up in the Trust Fund under account Due to LGUs
instead of Due to Other Funds and the amount of P.049 million as
receivables from Special Education Fund/General Fund (SEF/GF)
was presented as Other Receivables in the Trust Fund instead of
account Due from Other Funds;
 Due from Other Funds and Due to Other Funds, which are
reciprocal in nature, under the General Fund (GF) and Trust Fund
(TF) showed an unreconciled difference of P.070 million as of
year-end; and,
 Due to LGU under Trust Fund cannot be ascertained due to: (a)
non disclosure in the Notes to Financial Statements on the nature
of P16.007 million; (b) unreconciled balance with the reciprocal
accounts in the books of the Province; (c) inappropriate
classification of account; and (d) the amount of P.369 million was
not substantiated with documents and remained in the books for
several years that considered as dormant, thus rendered the
balance of this account doubtful.
Balete Qualified  Property, Plant and Equipment (PPE) accounts costing P107.310
million, with net book value of P75.990 million, as of December 31,
2018 remained doubtful due to: (a) unreconciled discrepancies of
P79.386 million between the Accounting and Treasurer’s Office
records; (b) maintaining unserviceable properties as stated in the
Treasurer’s Office inventory report with total cost of P1.365 million;
and (c) improper format of Report on Physical Count of Property,
Plant and Equipment (RPCPPE);
108
 Land account year-end balance of P14.829 million is unreliable due
to 16 unrecorded lots owned by the Municipal Government and
Land amounting to P1.764 million were reflected in the books of
accounts without proof of ownership.
Bauan Qualified  Property, Plant and Equipment (PPE) with acquisition cost of at
least P63.329 million was not established affecting the fair
presentation of the PPE accounts financial statements.
 Two hundred twenty-five (225) parcels of land owned by the

Municipality with market value of P1.439 billion were not recorded
in the books of account; and,
 Inventory account balances totaling P23.007 million is misstated

due to misclassification of land amounting to P19.035 million for a
housing project.
Calaca Qualified  A net difference of P2.271 million between the total reported
balance of Property, Plant and Equipment (PPE) accounts of
P1.214, billion in the accounting records and the corresponding
(RCPPE) of P1.212 billion;
 Direct debit to School Buildings account and Construction in

Progress Account instead of Advances to Contractors Account for
payment of 15% mobilization fee amounting to P11.296 million
affected the fair presentation of the Property, Plant and Equipment
accounts; and,

Receivables of the Municipality amounting to P15.812 million and
P12.597 million respectively are unreliable due to unreconciled
difference of P3.214 million and discrepancies with the Municipal
Treasurer’s Office’s reported balances of tax delinquencies as of
December 31, 2018.
Calatagan Qualified  Property, Plant and Equipment worth P448.929 million, gross of
accumulated depreciation, could not be ascertained due to: a)
partial physical count and incomplete Report of Physical Count of
Property, Plant and Equipment (RPCPPE) totaling P247.923
million; b) discrepancies between the RPCPPE submitted by the
Municipal Treasurer’s Office and the Subsidiary Ledgers (SL) of
the Accounting Department totaling to P146.735 million; c)
presence of beginning/unidentified balances of PPEs in the
Accounting’s SL totaling P64.300 million; d) non-recognition of
depreciation for PPEs with a total cost of P4.111 million; e) various
projects funded from the trust fund which were completed as of
December 31, 2018 included items and works totaling P6.213
million were not recorded as PPE and were not subject to
depreciation in the general fund; and f) PPE Ledger Card and
Property Card were not maintained while Acknowledgement
Receipts for Equipment were not updated.
109
Calatagan Qualified  Real Property Tax (RPT) Receivable and Special Education Tax
(SET) Receivable totaling P36.978 million could not be
ascertained due to its discrepancies with the Municipal Treasurer’s
Office reported balance of P17.992 million in their delinquent real
property and special education taxes as of December 31, 2018,
thereby incurring a total difference of P18.986 million;
 Report of RPT Delinquency as of December 31, 2017 showed an

ending balance of P17.992 million; and,
 Due from LGUs and Due to LGUs of the Municipality amounting to

P0.00 and P 6.106 million, respectively, could not be fully
ascertained due to: (a) non-reconciliation of the said receivables
and payables with the books of the Province of Batangas; (b)
presence of long outstanding unaccounted/unsupported balance of
Due to LGUs of P.106 million and; (c) inclusion of various items
amounting to P3.061 million, the nature of which does not primarily
fall under such account.
Cuenca Qualified  Real Property Tax Receivable (RPT) and Special Education Tax
(SET) Receivable totaling P2.683 million were not reconciled with
the Summary of Tax Delinquencies as of December 31, 2018 of
P3.151 million.
Ibaan Qualified  Property, Plant and Equipment (PPE) accounts totaling P114.006
million, net of depreciation, were doubtful due to a reported
discrepancy of P85.692 million with the Report on the Physical
Count of Property, Plant and Equipment (RPCPPE) and presence
of unidentified/unaccounted beginning balances of P22.123 million
and absence of reconciliation between accounting and property
records and failure to dispose unserviceable properties.
Laurel Qualified  Property, Plant and Equipment (PPE) of P313.570 million

representing 60 per cent of the total assets is unreliable due to (a)
inclusion of small value items; (b) presence of undisposed
properties and (c) unreconciled records;
 Unremitted GSIS contributions of P1.145 million, as of December

31, 2018 and unreconciled in-default loan accounts and unpaid
premiums in the total amount of P.155 million per GSIS records,
cast doubts on the reliability of the ‘Due to GSIS’ account and
detrimental to the GSIS members-employees of the LGU.
Lemery Modified/  Property, Plant and Equipment account amounting to P575.534

Qualified million (gross) could not be ascertained due to several deficiencies
noted.
Lian Modified/  Property, Plant and Equipment worth P274.179 million gross of
Qualified accumulated depreciation, could not be ascertained due to: a)
General Services Office (GSO) and the Subsidiary Ledgers (SL) of
110
the Accounting Department totaling to P11.464 million;

c) presence of beginning/unidentified balances of PPEs in the
Accounting’s SL totaling P2.219 million; d) non-recognition of
depreciation for PPEs with a total cost of P.631 million; and e) PPE
Ledger Card and Property Card were not maintained while
Acknowledgement Receipts for Equipment were not updated;
 Real Property Tax (RPT) Receivable and Special Education Tax

property and special education taxes as of December 31, 2018,
thereby incurring a total difference of P3.761 million;

ending balance of P20.695 million implying the Municipality’s
failure to enforce its collection;

P.028 million and P6.138 million, respectively, could not be fully
ascertained due to: (a) non reconciliation of the said receivables
and payables with the books of the Province of Batangas; (b)
presence of long outstanding unaccounted/unsupported balance of
Due to LGUs of P.034 million; and, (c) inclusion of various items
amounting to P4.658 million; and,
 The current portion of the Loans Payable - Domestic amounting to

P6.406 million was presented as Non-current liabilities.
Lobo Qualified  Property, Plant and Equipment totaling P147.862 million was not
reconciled with the Inventory Report balances of P157.610 million
or differed by P9.748 million and the absence of specific and
detailed description, physical attributes and location of reported
properties of P32.597 million in the Inventory Report rendered the
report unreliable;
 Disclosure for other receipts of P79.675 million and other payments

of P20.437 million were not provided in the Notes to the Financial
Statements as of December 31, 2018.
Mabini Qualified  Property, Plant and Equipment accounts totalling P386.752 million
net of depreciation, could not be ascertained due to: a) continuous
failure of the Municipality to conduct physical inventory of all its
assets and prepare the Report on Physical Count of Property, Plant
and Equipment (RPCPPE) b) non-identification of missing and
unserviceable properties and c) absence of reconciliation of
accounting and property records; and,

respectively at year end were doubtful due to booking up of
receivables based on estimates and not from the Treasurer’s
Certified List of Taxpayers.
111
Malvar Qualified  Property, Plant and Equipment (PPE) accounts with net book value
of P328.398 million was not substantiated by physical count;
 Real Property Tax (RPT) Receivables/Deferred Real Property Tax

Income of P26.825 million and Special Education Tax (SET)
Receivables/Deferred Special Education Tax Income of P23.919
million totaling P50.744 million are unreliable as they do not tally
with the total amount of delinquent taxes reported by the Municipal
Treasurer amounting to P11.949 million and set up of tax
collectible on taxable real properties at the beginning of the year
was based on RPT Target made by the former OIC - Municipal
Treasurer;
 Road Networks ledger and property cards for all roads and its
components were still not prepared and maintained by the
Accounting Office and the Treasurer’s Office, respectively, and the
Report on Local Road Network and Report on the Physical Count
of the Road Network System were not prepared, thus rendering the
recorded Road Networks of P2.166 million unreliable.
Mataas na Kahoy Qualified  Inventories and Property, Plant and Equipment (PPE) valued at
P.722 million and P113.988 million, respectively as of end of the
year could not be determined due to non-submission of the Report
on the Physical Count of Inventories and Report on the Physical
Count of Property, Plant and Equipment (RPCPPE);
 Real Property Tax and Special Education Tax Receivables of

P.616 million, and P.348 million, respectively do not reconcile with
the Municipal Treasurer’s report on Tax delinquency totaling
P4.306 million.
Nasugbu Qualified  Property, Plant and Equipment worth P1.112 billion, gross of
Property, Plant and Equipment (RPCPPE) totaling P1.016 billion;
b)discrepancies between the RPCPPE submitted by the General
Services Office (GSO) and the Subsidiary Ledgers (SL) of the
Accounting Department totaling to P44.687 million; c) presence of
beginning/unidentified balances of PPEs in the Accounting’s SL
totaling P243.664 million; and d) PPE Ledger Card and Property
Card were not maintained and Acknowledgement Receipts for
Equipment were not updated;

property and special education taxes as of for CY 2018, thereby
incurring a total difference of P1.351 million;

ending balance of P609.413 million implying the Municipality’s
failure to enforce its collection.
112
fully ascertained due to non-reconciliation of the said receivables
and payables with the books of the Province of Batangas;
 Due and Subsidy from Other Funds accounts balance of P17.258

millionat year end did not reconcile with its reciprocal account Due
and Subsidy to Other Funds accounts with total balance amounting
to P16.483 million, thus cast doubt on the reliability of the recorded
transactions.
Padre Garcia Qualified  Property, Plant and Equipment (PPE) accounts totaling P282.875
million net, were doubtful due to the failure of the General Services
Officer- Designate to prepare a complete Report on the Physical
Count of Property, Plant and Equipment (RPCPPE) and non-
reconciliation of records between the Accounting Office and
General Service Office;
 Land account in the amount of P32.178 million under the General

Fund is doubtful due to eleven (11) parcels of land acquired either
through purchase or donation which were without peso value in the
books of account, remained untitled and the amount disbursed for
the purchased of four (4) parcels of land amounting P9.011 million
had exceeded by P.346 million and disallowed in audit and are not
covered by Tax Declarations of Real Property/ Assessment of Real
Property and Transfer Certificate of Titles.
Rosario Modified/  Property, Plant and Equipment (PPE) accounts totaling P317.318
Qualified million net of depreciation, were doubtful due to the failure of the
General Services Officer to conduct, prepare and submit a
complete Report on Physical Count of Property, Plant and
Equipment (RPCPPE) and non-reconciliation of records between
the Accounting Office; and,
 Cash in Bank – Local Currency, Current Account balance of

P248.550 million could not be determined due to various stale
checks amounting to P.110 million and P.210 million in the General
Fund and Trust Fund, respectively; reconciling items of P8.057
million not taken up in the General Ledgers/Financial Statements;
and variance of P2.373 million between the cashbooks and the
general ledgers.
San Jose Unqualified
San Juan Qualified  Absence of inventory committee created for the conduct of physical
checking of municipal properties, the preparation of the appropriate
inventory reports and its reconciliation with the accounting records,
resulted to increase in the reported deficiency between the year-
end book balances of Property, Plant and Equipment (PPE)
accounts and the Report on Physical Count of Property, Plant and
113
Equipment (RPCPPE) at year-end in the total amount of P93.546
million from last year’s difference of P4.818 million; and,
 Cost of the two units, two-storey apartment building with

construction cost of P1.196 million and the proportionate
acquisition cost of the 2,044 square meters (sqm2) parcel of land,
both intended for sale to municipal employees or to any interested
buyer were recorded under the accounts, Investment Property-
Building, and Property Plant and Equipment-Land, respectively,
instead of Merchandise Inventory account.
San Luis Qualified  PPE accounts with a net book value of P112.717 million as of
December 31, 2018 remains doubtful; and,

(SET) Receivable totaling P3.134 million were not reconciled with
the delinquent taxes per Treasury records amounting to P10.456
million as of December 31, 2018, thereby incurring a total
difference of P7.332 million.
San Nicolas Qualified  Property, Plant and Equipment amounting to P84.734 million was
not validated, thereby rendering the balances of the said accounts
unreliable.

Receivables for CY 2018 were not set up.
 Failure to record Biological Assets that are still existing but were
acquired prior to 2017 and the receivables arising from the sale of
these assets;
 Non reconciliation of the CY 2018 surplus with the net cash flows
from operating activities, casting doubt in the reliability of the
amounts presented in the financial statements.
San Pascual Qualified  Property, Plant and Equipment totaling P739.445 million remained
not reconciled with the Inventory Report balances of P630.234
million or differed by P109.211 million;
 103 parcels of land owned by the Municipality with market value of

P47.427 million based on Tax Declaration were not recorded in its
books of accounts;
 141 parcels of land, consisting of 103 unrecorded and 38 recorded

in the books, were not yet covered by Certificate of Title; and,
 Infrastructure assets totaling P18.582 million 384.56 funded out of

Trust Funds/Receipts were not promptly recognized in the books.
 Property, Plant and Equipment (PPE) accounts as of year-end

amounting to P134.788 million gross with an accumulated
depreciation of P31.414 million remained unreliable due to
unlocated properties worth P1.601 million (gross) and due to
incomplete inventory taking of all the LGU’s owned properties;
114
Santa Teresita Qualified  Completed projects under 20% Development Fund totaling P2.666
million were booked as Donations instead of PPE;
 Budget and actual amounts of Maintainance and Other Operating

Expenses per Statement of Comparison of Budget and Actual
Amounts (SCBAA) as of December 31, 2018 does not reconcile
with the figures presented in the Statement of Financial
Performance for the same year.
Sto. Tomas Qualified  Property, Plant and Equipment (PPE) of P812.672 million
representing 47.21 per cent of the total assets is unreliable due to
(a) inclusion of small value items; (b) presence of undisposed
 Road Networks ledger and property cards for all roads and its
Office and the General Service Office (GSO), respectively, due to
the non-submission of the complete description and cost
segregation of road components for road projects by the
Engineering Office, thus casting doubts on the validity, accuracy
and existence of the recorded Road Networks of P33.331 million,
net of depreciation as of year-end.
Taal Qualified  Property, Plant and Equipment (PPE) totaling P280.405 million
(gross) could not be ascertained due to a) balances of PPE
accounts in the Lapsing Schedule did not tally with the balances
presented in the Financial Statements; b) Property Plant and
Equipment totaling P58.751 million were not provided with
depreciation resulting in overstatement of PPE accounts and
understatement of expenses in the financial statements for the
year; c) results of the physical count by the Inventory Committee
were not reconciled with the property and accounting records; and
d) Property, Plant and Equipment Ledger Cards and Property
Cards maintained by the Accounting Office and General Services
Office, respectively, were not updated and the Acknowledgement
Receipts of Equipment (ARE) of PPE from prior years’ acquisitions
were also not updated;
 Unexpended balance of the Local Disaster Risk Reduction and

Management Fund of P2.729 million was not transferred to the
Special Trust Fund under the account “Trust Liability – DRRM” in
the trust funds books; and,
 Loans Payable – Domestic amounting to P5.593 million was

classified under Current Liabilities.
Talisay Qualified  Property, Plant and Equipment (PPE) of P368.615 million

representing 68.38 per cent of the total assets is unreliable due to
(a) inclusion of small value items; (b) presence of undisposed
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 Prior year’s obligations for delivered good and services,

transportation expenses and utilities amounting to P1.927 million
were paid out of the current year appropriations even if these were
not recorded as Account Payable;
 Financial assistance to schools/school officials and barangays

totaling P1.111 million and P1.440 million, respectively, were not
based on a clear-cut guidelines on the implementation and
submission of liquidation report,
 Unremitted GSIS contributions of P.809 million as of December 31,

2018 and unreconciled in-default loan accounts and unpaid
premiums in the total amount of P3.336 million per GSIS records.
Taysan Qualified  Prior year’s obligations for delivered good and services,
transportation expenses and utilities amounting to P1.926 million
were paid out of the current year appropriations even if these were
not recorded as Account Payable.
Tingloy Qualified  Property, Plant and Equipment with a net book value of P45.357
million could not be ascertained due to unreliable Report on
Physical Count of Property, Plant and Equipment; and,
 Receivables for Real Property and Special Education Taxes

amounting to P.808 million and P.001 million, respectively does not
include taxes collectible for the year due to the absence of amount
receivable per taxpayer certified by the Municipal Treasurer.
Tuy Qualified  Property, Plant and Equipment worth P362.636 million, gross of
designated GSO and the Schedule of PPE from the Accounting
Department totaling to P4.570 million; c) presence of
beginning/unidentified balances of PPEs in the Accounting’s SL
totaling P181.901 million and d) PPE Ledger Card and Property
Card were not maintained and Acknowledgement Receipts for
Equipment were not updated;
 Inventory accounts balance totaling P1.839 million were doubtful

due to the failure to conduct the physical count and prepare the
Report of Physical Count of Inventories (RPCI) as of December 31,
2018; and,

(SET) Receivable totaling P30.035 million could not be ascertained
due to its discrepancies with the Municipal Treasurer’s Office
reported balance of P19.412 million in their delinquent real property
and special education taxes for CY 2018, thereby incurring a total
difference of P10.622 million.
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Cavite Modified/  Provincial Accountant and Provincial Treasurer to continue with
Qualified their verification of the discrepancies in the balances of the
reciprocal accounts Due to LGUs and Due from LGUs, noted
above, with the concerned cities and municipalities, after which
make the necessary adjustments. For those receivables and
payables found to be valid, enforce collection and settlement,
respectively;
 Provincial Accountant to regularly furnish the City and Municipal

Accountant of the concerned Local Government Units with the
Journal Entry Voucher (JEV) taking up their share in real property,
special education and amusement taxes collected by the Province
so that the concerned Accountants could accordingly record the
receivables from the Province in their respective books.
 Heads of Departments and Hospitals to keep records pertaining to

the inventory items for distribution transferred to their respective
Offices and to conduct semestral physical stock-taking of each
inventory item and prepare and submit the Report on the Physical
Count of Inventories to Provincial General Services Office for
consolidation after which a Consolidated Report be submitted to
the Office of the Auditor, copy furnished the Office of the Provincial
Accountant.
Cities
Bacoor City Qualified  Property, Plant and Equipment (PPE) accounts totaling P4.496
billion could not be established due to the continuous inability of the
City to reconcile the difference of P128.470 million between the
Accounting records and the Report on Physical Count of Property,
Plant and Equipment (RPCPPE); and,

Receivables totaling P349.696 million and the Certified List of
Delinquent Taxes submitted by the Treasurer’s Office amounting
to P708.416 million were both unreliable due to discrepancy of
P358.719 million and the inability of the City to cleanse real
property tax records thru tax mapping.
Cavite City Modified/  Property, Plant and Equipment (PPE) with net book value of
Qualified P527,689 million, excluding Land, Construction in Progress and
Items in Transit, as of December 31, 2018 could not be ascertained
due to the existence of a discrepancy of P20.039 million between
the physical count and the accounting records;
 Depreciable PPE owned by the City valued at P168.599 million

were not provided with depreciation;
 Unserviceable PPE awaiting disposal totaling P24.689 million were

derecognized and the loss from the anticipated sales thereof
amounting to P19.050 million were already recorded in the books,
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thereby understating the asset and overstating the expense
accounts and these unserviceable properties remained not
disposed of and exposed to further deterioration.
Dasmariñas City Modified/  Property, Plant and Equipment (PPE) accounts totaling P5.245
Qualified billion could not be established due to the continuous inability of the
City to reconcile the difference of P871.200 million between the
Accounting and Property records;

respectively, were not reliable as the receivables were set up based
on the lump-sum estimates from the Assessor’s Office;
 Discrepancies of P62.046 million between the RPT and SET

Receivables and the P249.697 million between the said accounts
and the List of Delinquent Taxes submitted by the Treasurer’s
Office.
Gen. Trias City Qualified  Property, Plant and Equipment (PPE) with total book value of
P1.614 billion, excluding Construction in Progress of P11.333
million remained doubtful due to the inability of the Inventory
Committee to conduct physical count of PPE, and the absence of
Property Cards (PCs) thereof and Property, Plant and Equipment
Ledger Cards (PPELCs) for property amounting to P489.525
million.
 Inventories and Supplies and Materials Expenses totaling P1.420

million and P337.772 million, respectively, are doubtful due to
adoption of Direct Expense Method of accounting for the receipt
and issuance of supplies and materials instead of the Perpetual
Inventory System; and,
 Expenses for the collection, hauling and disposal of solid waste of

the City amounting to P130.540 million was erroneously accounted
as Other Supplies and Materials Expenses instead of the account
Environment/Sanitary Services,
Imus City Qualified  Property, Plant and Equipment (PPE) accounts with carrying
amount of P1.890 billion (Construction in Progress of P64.987
million excluded) as of December 31, 2018 could not be
ascertained due to: (1) discrepancy of P102.745 million between
the accounting records and inventory reports; (2) beginning
balances in lump sum amount of P418.717 million and
unaccounted balances of P87.199 million in the inventory reports;
(3) PPE accounts with carrying amount of P27.802 million without
a corresponding inventory report; and (4) incomplete/unupdated
PPE Ledger Cards;
 Local roads network accounts in the Registry of Public

Infrastructure were not yet taken up in the books as Property, Plant
and Equipment (PPE) under the Road Networks account due to the
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inability of the Inventory Committee to conduct an inventory of the
local roads under the jurisdiction of the City;
 Due to GSIS of P11.039 million, Due to Pag-IBIG of P2.676 million

and Due to PhilHealth of P1.124 million could not be ascertained
due to: (a) material amount of unremitted/unaccounted balances in
prior years totaling P3.929 million; and (b) discrepancy of P2.341
million between the amount withheld totaling P80,687, million and
actual remittances of P78.345 million for premium contributions
and deductions for loan amortization for the applicable months from
January to November 2018.
Tagaytay City Qualified  Property, Plant and Equipment (PPE) accounts with total carrying
value of P3.559 billion, representing 58 per cent of the total assets
of P6.115 billion as of December 31, 2018 were unreliable due to
a discrepancy of P1.023 billion between the Accounting records
and the Report on the Physical Count of Property, Plant, and
Equipment (RPCPPE);
 Completed and accepted infrastructure projects in CYs 2015, 2016

and 2017 totaling P45.924 million were recognized in the financial
statement only upon payment in CY 2018; and,
 Five ongoing infrastructure projects totaling P12.103 million were

not recorded as Construction in Progress-Infrastructure Assets and
depreciation expenses of completed and accepted projects in
previous years were likewise not recognized in the books.
Trece Martires City Qualified  Land account was overstated by P31.195 million due to the
inclusion of Land property intended for sale and rental/lease with a
total cost of P13.015 million and P18.182 million, respectively,
while understating the Merchandise Inventory and Investment
Property, Land accounts by the respective amounts.
 Seventy five (75) percent of the Infrastructure Assets recorded in

the Registry of Public Infrastructures amounting to P76.033 million
were not yet recognized in the books of account as of December
31, 2018, thereby understating the Infrastructure Assets and
Government Equity accounts by an amount equivalent to the
carrying value of the subject infrastructure assets;
 Depreciation expense was not provided for the Infrastructure

Assets recorded in the books amounting to P59.705 million; and,
 Recording and reporting guidelines for the Local Roads Asset

Management System were not strictly adhered to by both the City
Accounting and General Services Offices.
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Municipalities
Alfonso Qualified  Property, Plant and Equipment (PPE) accounts with total carrying
value of P194.193, million, representing 54.15 per cent of the total
assets of P358.597 million as of December 31, 2018 were
unreliable due to a discrepancy of P20.306 million between the
Accounting records and the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE);
 Loans Payable having an account balance of P10.426 million as of

December 31, 2018 disclosed a variance of P.561 million when
compared with the amount reflected in the record of the Land Bank
of the Philippines (LBP).
Amadeo Qualified  Property, Plant and Equipment (PPE) accounts with total carrying
value of P194.193 million 54.15 per cent of the total assets of
P358.597 million as of December 31, 2018 were unreliable due to
a discrepancy of P20.306 million between the Accounting records
and the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE);
 Loans Payable having an account balance of P10.426 million as of

December 31, 2018 disclosed a variance of P.561 million when
compared with the amount reflected in the record of the Land Bank
of the Philippines (LBP).
Carmona Unqualified
General Mariano Qualified  Property, Plant and Equipment (PPE) accounts aggregating
Alvarez P531.960 million which partake 91 per cent of the Municipality’s
total assets of P582,424 million could not be ascertained due to
the following:
 Existing discrepancies between the accounting records

and the Report on the Physical Count of Property, Plant,
and Equipment (RPCPPE) of as much as P104.262
million with the former showing bigger amount than the
latter;
 Inclusion of disposed assets amounting to P1.463 million

in the Report on the Physical Count of Property, Plant,
and Equipment (RPCPPE); and,
 Non-maintenance of Property, Plant and Equipment

Ledger Cards (PPELC) and Real Property Ledger Cards
(RPLC) by the Accounting Office and incomplete
Property Cards by the GSO

respectively, were not reliable as they differed from each other by
P.491 million and its aggregate amount by P24.116 million from
the List of Delinquent Taxes submitted by the Treasurer’s Office.
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General Emilio Qualified  Real Property Tax and Special Education Tax (RPT/SET)
Aguinaldo Receivables amounting to P4.644 million were lesser by P3 million
compared with the amount obtained from the Certified List of Real
Property Tax Delinquencies as of December 31, 2017 prepared
and submitted by the Municipal Treasurer amounting to P7.644
million each casting doubt on the accuracy of the year-end balance
of each account of P4.287 million.
Indang Qualified  Penalties totaling P26.484 million for delinquent Real Property Tax
(RPT) and Special Education Tax (SET) were recorded as part of
the RPT and SET Receivables, contrary to Section 23 of the
Manual on the New Government Accounting System (MNGAS) for
Local Government Units (LGUs), Volume I, thus overstating the
RPT and SET Receivables and the corresponding reciprocal
accounts Deferred RPT and Deferred SET by P13.242 million
each;
 Lot procured by one barangay with subsidy from the Municipality

amounting to P.200 million was again recorded both in the Report
on the Physical Count of Property, Plant and Equipment and books
of accounts of the Municipality;
 Land titles of seven recorded lots were still not yet transferred in
the name of the Municipality;
 The reliability of Inventory Held for Consumption accounts totaling

P4.074 million as of December 31, 2018 could not be ascertained
due to the inability of the Municipal officials and/or employees in-
charge to conduct inventory taking and submit the Report on the
Physical Count of Inventories;
 Laxity in the administration of the Indang Public Market and non-

enforcement of relevant rules and regulations of the Municipality’s
Revised Revenue Code in its operation resulted in uncollected
market stall rental fees totaling P.485 million in Calendar Year
2018; and,
 Progress billing for the construction of Multi-Purpose Hall

amounting to P2.488 million were directly recorded to the specific
asset account instead of Construction-in-Progress account with
corresponding charges to accumulated depreciation of P.099
million commencing from the project’s partial completion.
Kawit Qualified  The correctness and reliability of the year-end balances of the
various Property, Plant and Equipment (PPE) accounts totaling
P487.921 million, could not be established ; and,

Receivables as of December 31, 2018 reflected a balance of
P2.996 million and P2.553 million, respectively, or a total of P5.549
million while the Certified List of RPT Delinquencies, prepared by
the Municipal Treasurer showed only a total of P21.671 million
inclusive of penalty of P9.905 million hence a total difference of
P16.122 million between the accounting and treasury records,
thereby casting doubt on the accuracy and reliability of the reported
balances of the RPT and SET Receivable accounts.
121
Magallanes Qualified  Ownership and rights of the Municipality of Magallanes over
recorded Property, Plant and Equipment – Land with a total value
at P12.904 million could not be fully ascertained due to absence
of land title; and,
 Depreciation expenses were not provided by the Municipality of

Magallanes on the recognized Property, Plant and Equipment
(PPE) - Local Road Networks and PPE – Other Public
Infrastructures totalling P22.563 million and P15.141 million,
respectively; and,
 Cash basis accounting was applied by the Municipality of

Magallanes in recognizing monthly water sales income to its
concessionaires/constituents from its Community Water System
(CWS).
Maragondon Qualified  The inability of the Municipality of Maragondon to conduct complete

physical inventory taking of its Property, Plant and Equipment
(PPE) and prepare the report on the Physical Count of Property,
Plant and Equipment (RPCPPE) cast doubts on the existence,
accuracy, reliability and validity of the recorded balances of the
PPE amounting to P129.583 million as of December 31, 2018;and,
 Collection efficiency on Real Property Tax (RPT) and Special

Education Tax (SET) for Calendar Year (CY) 2018 was relatively
low at only 21.19 percent and 23.40 percent, respectively;
 No records of Property, Plant and Equipment – Infrastructure

Assets in the books of the Municipality could be found and the cost
of several major repairs relating to Buildings and Other Structures
were charged to repairs and maintenance expenses; and,
 Ownership and rights of the Municipality of Maragondon over

recorded Property, Plant and Equipment – Land with a total value
at P48.720 million could not be fully ascertained due to absence of
land title.
Mendez Qualified  Unreconciled variances between the CY 2018 Report on the

Physical Count of Property, Plant and Equipment (RCPPE) and the
accounting records of Property,, Plant and Equipment (PPE)
accounts;
 The validity of the account balances of the Due from NGAs, Due
from LGUs, and Other Receivables amounting to P.662 million,
P.690 million and P1.48, million, respectively, were unreliable due
to the absence of documentary evidences and accounting records;
 Reconciling items in the Bank Reconciliation Statements with total

net amount of P.138 million comprising of seven stale checks, two
cancelled checks, unrecorded interest income, deposit,
disbursements, credit memo, debit memos and other necessary
correcting entries remained unadjusted/not taken up in the books
122
 No reconciliation of the balances of the Due from and Due to LGU
accounts of the Municipality with that of the Provincial Government
was undertaken;
 Laxity in the administration of the Mendez Public Market and non-

enforcement of relevant rules and regulations of the Mendez
Market Code and the Municipality’s Revenue Code in its operation
resulted in uncollected market stall rental fees, water consumption
charges and permit fees totalling P.443 million as of December 31,
2018.
Naic Modified/  Unreconciled variances between the Report on the Physical Count
Qualified of Property, Plant and Equipment (RCPPE) and the accounting
records of Property, Plant and Equipment (PPE) accounts;

Receivables and its reciprocal accounts Deferred RPT and SET
Income of P19.191 million and P19.698 million, respectively, at
year-end of CY 2018 remained doubtful as the amounts were
based on the real property assessments prepared by the Municipal
Assessor and not on the certified list of taxpayers with taxes due
and collectible prepared by the Municipal Treasurer as required
under Section 20 of the Manual on NGAS for LGUs, Volume I;
 Due from and Due to LGUs accounts of the Municipality as of year-

end in the amount of P3.936 million andP.241 million, respectively,
did not reconcile with their respective reciprocal accounts of P3.865
million, and P.254 million in the books of the Province;
 Business permit for CY 2019 was issued to a contractor, with

business address in the Municipality of Naic, despite non-payment
of business tax amounting to P.067 million for CY 2018 and
business tax due was not recorded in the books of accounts.
Noveleta Qualified  Property, Plant and Equipment (PPE) with carrying value of
P79.052 million as of December 31, 2018, could not be
ascertained due to inability of the Municipality to conduct a
complete physical count of all PPEs, submit a properly
accomplished Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) and maintain PPE Ledger Cards.
Rosario Qualified  Property, Plant and Equipment (PPE) with carrying value of P1.218
billion as of December 31, 2018, could not be ascertained due to
discrepancy of P117.538 million between the General Ledger
balance and the Report on the Physical Count of Property, Plant
and Equipment (RPCPPE), unserviceable, disposed/donated and
missing PPEs of P91.464 million and lumped PPE items totaling
P274.862 million which were not properly identified in the
RPCPPE.
Silang Qualified  Property, Plant and Equipment (PPE) accounts aggregating

P1.601 billion, which partake 84 percent of the Municipality’s total
assets of P1.900 billion could not be ascertained due to the
following:
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a) No physical count was conducted in Calendar Year 2018
and the corresponding Report on the Physical Count of
Property, Plant, and Equipment (RPCPPE) was not
prepared; and
b) Non-maintenance of Property, Plant and Equipment

Ledger Cards (PPELC) and Real Property Ledger Cards
(RPLC) by the Accounting Office and incomplete/un-
updated Property Cards by the General Services Office
(GSO); and,

Receivables amounting to P8.319 million and P.165 million,
respectively, were not reliable as the same differed from each other
by P8.154 million and P139.432 million from that of the List of
Delinquent Taxes submitted by the Treasurer’s Office.
Tanza Qualified  Property, Plant and Equipment (PPE) with total book value of
P600.624 million excluding Construction in Progress of P35.929
million remained doubtful due to the discrepancy of P411.060
million between the Accounting and General Services Office
records and inability of the Inventory Committee to conduct
physical count of PPE; and,
 Adoption of the Direct Expense Method of accounting for the

receipt and issuance of supplies and materials instead of the
Perpetual Inventory System, thus, putting in doubt the accuracy of
the `account balances of Inventories and Supplies and Materials
Expenses totaling P2.286 million and P12.679 million,
respectively, as of year-end.
Ternate Qualified  Collection efficiency on Real Property Tax (RPT) and Special
Education Tax (SET) for Calendar Year (CY) 2018 was relatively
low at only 26.46 per cent for both accounts,
 Failure to set-up the RPT and SET receivables in CY 2018 resulting

in the understatement of the RPT and SET receivables together
with the Deferred Income accounts by P56.818 million and
increased accumulated balance of uncollected RPT and SET
receivables by P2.550 million and P2.550 million, respectively at
the end of the year; and,
 Failure of the Municipality of Ternate to conduct physical inventory

taking of its Property, Plant and Equipment (PPE) and prepare the
report on the Physical Count of Property, Plant and Equipment
(RPCPPE); non-maintenance of Property Cards by the General
Services Office (GSO) and maintenance of incomplete and not
updated Property, Plant and Equipment Ledger Cards (PPELC) by
the Accounting Department cast doubts on the existence,
accuracy, reliability and validity of the recorded balances of the
PPE amounting to P93.374 million as of December 31, 2018; and,
 Withholding taxes amounting to P4.523 million as of December 31,

2018 remained unremitted to the Bureau of Internal Revenue (BIR).
124
Laguna Qualified  Cash in Bank account of P1.672 billion for Calendar Year (CY)
2018 was not fairly presented due to the presence of a stale check
amounting to P1.560 million and a difference of P.072 million
between the General Ledger (GL) and the Cashbook balances;
 Physical count of seven out of 15 inventory types amounting to

P188.406 million or 74 per cent of the total inventory valued at
P255.178 million was not conducted due to attendance to pressing
undertakings that requires immediate action by the Inventory
Committee;
 Long overdue loans and receivables totaling P140.762 million

which have been dormant for ten years or more are presented as
current assets in the financial statements; and,
 Accounts Payable as of December 31, 2018 totaling P527.842

million included claims amounting to P91.217 million which have
been outstanding for two years or more; and,
 Buildings owned by the Province valued at P26.664 million and

rented out to private entities and government agencies were
recorded as Buildings instead of Investment Property – Buildings,
resulting in the overstatement of the Buildings account balance
and understatement of the Investment Property- Buildings each by
P26.664 million;
 Due from Local Government Units (LGUs) account amounting to

P17.176 million is doubtful due to a net difference of P.649 million
between the account balances of the Due from LGUs maintained
by the Province and the account Due to LGUs recorded by the
eight LGUs in the Province of Laguna; and,
 Accounts Payable included amounts Due to National Government

Agencies, Due to Government Owned and/or Controlled
Corporations and Due to Local Government Units amounting to
P.032 million, P.124 million and P8.503 million, respectively, or
a total of P8.658 million, resulting in the misstatements of the
affected accounts’ balances.
Cities
Biñan City Qualified  Property, Plant and Equipment (PPE) account reported at a
carrying amount of P5.567 billion as of year-end could not be
ascertained due to the difference of PPE balances between the
Accounting and Property records of P493.905 million, in all funds;
 Small tangible assets totaling P15.927 million which were already

issued to end-users with serviceable lives of more than one year
and acquisition cost of less than P.010 million overstated both the
PPE and Government Equity accounts by the same amount;
 Sixty-six disbursement vouchers and their supporting documents

involving a total amount of P56.137 million, covering payments
made in Calendar Year 2018 remained not submitted to the Office
125
of the Auditor as of year-end due to continued disregard of the
accounting and reporting guidelines;
 Accounts Payable totaling P36.425 million remained outstanding

for more than two years;
 The City did not recognize in the books accrued interest on long-
term loans payable totaling P16.299 million, thus resulting in the
understatement of Interest Expense and Interest Payable accounts
by the same amount as of year-end;
 The accumulation of uncollected and unrecorded market stall rental

fees totaling P4.364 million as of December 31, 2018; and,
 Cash advances totaling P.540 million remained unliquidated at

year-end.
Cabuyao City Qualified  Property, Plant and Equipment (PPE) totaling P3.075 billion (gross),
could not be ascertained due to incomplete physical count resulting
in an unreconciled balance of P1.318 billion between the
accounting records and the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE); the unserviceable
Property, Plant and Equipment of P7.557 million remained
undisposed; inclusion of semi-expendable supplies of P.461 million
in the PPE accounts; and non-provision of depreciation of the City’s
Road Networks.
 Due from Other Funds and Due to Other Funds showed a

discrepancy of P41.372 million as of year-end;
 Reconciling items totaling P2.022 million were not corrected and

adjusted in the book of accounts, thus rendering the validity,
accuracy and reliability of the Cash in Bank account balance stated
at P1.549 billion as of December 31, 2018, doubtful;

 Granting and liquidation of cash advances were not strictly
monitored by the City, resulting in the accumulation of the
unliquidated balances in an aggregate amount of P25.253
millionas of December 31, 2018; and,
 Significant information to support the balances of some accounts

presented in the financial statements were not disclosed in the
Notes to financial statements, thus casting doubt on the said
balances and depriving the users of the financial statements of
additional information value.
Calamba City Qualified  Property, Plant and Equipment (PPE) totaling P8.516 billion
appearing in the Financial Statements and Accounting records
remained not reconciled with the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) resulting in a total
variance of P3.864 billion;
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 Inventory account totaling P131.190 million as of December 31,
2018 was doubtful due to inability of the City Accounting Office
(CAO) to reconcile balances of supplies ledger cards with the stock
cards maintained by the City General Services Office (CGSO), and
inability of the CGSO to furnish the CAO with copies of the
Requisition and Issue Slip (RIS), Summary of Supplies and
Materials Issued (SSMI), and Report of the Physical Count of
Inventories (RPCI);
 Due to Pag-IBIG and GSIS amounting to P.255 million and P1.209

million, respectively, pertaining to premium contributions and loan
amortizations were of doubtful validity;
 Financial Liabilities – Current was overstated and Loans Payable –

Domestic was understated both by P261.837 million since the non-
current portion of long-term loan amounting to P261.837 million
was not classified as non-current liabilities;
 Unexpended balance of the Local Risk Reduction and

Management Fund (LDRRMF) of P18.896 million was not
transferred to the Trust Fund books, and its details were not
properly disclosed in the Notes to Financial Statements; and
 Financial statements were not supported with complete subsidiary

ledgers and financial reports of the special accounts for economic
enterprises in the General Fund.
San Pedro City Qualified  Property, Plant and Equipment (PPE) balances differs between the
Accounting and Property records in the General Fund due to
inability of the City General Service Officer (GSO) to fully conduct
physical count of PPE, submit complete Report on the Physical
Count of Property, Plant and Equipment (RPCPPE) and non-
maintenance of Property, Plant and Equipment Ledger Card
(PPELC) and Property Cards (PCs);
 Titles to 793 parcels of acquired land totaling P996.293 million by

the City Government of San Pedro in CY 2018 and prior years were
not yet transferred in the name of the City due to incomplete
documentary requirements of the Registry of Deeds, thus the risk
of third party claims and non-establishment of the City’s ownership
over the parcel of lands;
 Thirty four (34) Unserviceable Motor Vehicles valued at P12.286

million were still not disposed of as required procedures and
documentation for property disposal have not been complied with,
thus resulting in the further deterioration and loss of economic
value and overstatement of the agency’s PPE account balance;
 Cash advances (CAs) totaling P7.634 million were not liquidated

at the end of the year as some City officials and employees did not
comply with the rules and regulations on CAs, thus understated the
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related expense accounts for the amount expended and exposed

the fund to risk of loss and misuse; and,
 Purchase of supplies totaling P34.360 million was directly

recorded in the books as expense instead of inventory following the
Perpetual Inventory Method, thus the cost of unused supplies
which were not consumed at year-end were not reflected in the
financial statements, affecting the fair presentation of the inventory
and expense accounts’ balances.
Santa Rosa City Qualified  Cash in Bank-Local Currency account presented in the statement
of financial position at P3.358 billion could not be ascertained due
to a net difference of P22.246 million between the Subsidiary
Ledger (SL) and the Cashbook;
 Reconciling items reflected in the Bank Reconciliation Statements

totaling P11.380 million were not booked up, thus affecting the
reliability of the Cash in Bank-Local Currency account;
 Property, Plant and Equipment (PPE) accounts recorded in the

books with net book value of P6.573 billion remained doubtful due
to: (a) the variance of P1.310 billion between the records of the
Office of City Accountant (OCA) and the Report on the Physical
Count of Property, Plant and Equipment (RPCPPE) submitted by
the City General Services Office (CGSO) and (b) unaccounted
properties amounting to approximately P2.274 million or .03% of
the total PPE at the time of physical inventory;
 The City Government did not comply with the reporting guidelines
on the Local Roads Asset Management System, thus desired
information on the City’s Local Road Network presented in the
financial statements at P224.684 million was not fully provided;
and,
 Payment of loan amortization amounting to P3.139 million was not

booked up, thereby overstating the Cash in Bank-Local Currency
account by P3.139 million and Loans Payable-Domestic account
by P3.097 million and understating the Interest Expense by P.042
million.
Municipalities
Alaminos Modified/  Property, Plant and Equipment (PPE) accounts with a total net
Qualified book value of P173.442 million excluding the Construction in
Progress account, were doubtful due to total discrepancy of P4.654
million that exists between the accounting records and the Report
on the Physical Count of Property, Plant and Equipment (RPCPPE)
submitted by the General Services Officer (GSO);
128
 PPE totaling P17.628 million funded out of the Trust Fund which
were already completed as of year-end were not recognized and
transferred to the General Fund, resulting in the understatement of
both the PPE and Government Equity accounts;
 Unserviceable property with a total net book value of P.056

millionwhich were already disposed were still included in the book
of accounts of the Municipality, thus overstating the PPE account
by the same amount;
 Breeding Stocks of P.820 million was measured at its acquisition

cost at the reporting date, instead of its fair value less cost to sell,
thus, casted doubt on the correctness, valuation and reliability of
the Biological Assets as of year-end, and,
 Stale checks amounting to P.110 million remained unadjusted in

the book of accounts, thus resulting in the understatement of the
balances of both the Cash in Bank and Accounts Payable
accounts.
Bay Qualified  Property, Plant and Equipment (PPE) account, reported at a

carrying amount of P179.328 million as of year-end could not be
Accounting and Property records of P.559 million in all funds;
 Small tangible assets totaling P2.738 million which were already

issued to end-users with serviceable lines of more than one year
and an acquisition cast of less than P.010 million over stated both
the PPE and Government Equity Accounts by the same amount;
and,
 Non-recognition of accrued interest on long-term loans payable

totaling P.861 million understated the Interest Payable accounts by
the same amount as of year-end.
Calauan Qualified  Discrepancy in reporting Cash in Bank – Local Currency, Current

Account between cashbooks and general ledgers by P3.517
million and between general ledgers and bank confirmation by
P14.148 million;
 Property, Plant and Equipment (PPE) account recorded at

P144.224 million as of December 31, 2019 was doubtful due to the
inclusion of unserviceable property amounting to P3.482 million;
and,
 One hundred ninety-two (192) Disbursement Vouchers (DVs) and

its supporting documents totaling P1.100 million or 0.85% of the
total expenses for Calendar Year 2018 of P129.680 million
remained unsubmitted to the Office of the Auditor as of December
31, 2018.
129
Cavinti Qualified  Property, Plant and Equipment (PPE) reported at P146.877 million
could not be ascertained due to existence of P54.878 million
variance between the records of the Accounting and the Report on
 Cash in Bank account balance shown in the Statement of Financial

Position at P11.358 million could not be determined due to a net
difference of P35.272 million between the General Ledger and the
Cashbook;
 Purchase of supplies totalling P5.933 million was directly recorded

in the books as expense instead of inventory following the
perpetual inventory method, thus cost of unused supplies which
were not consumed at year-end were not reflected in the financial
statements affecting the fair presentation of the affected accounts
in the financial statements;
 Due from and Due to Other Funds showed a difference of P3.418

million; and,
 Accounts Receivable account balance of P2.164 million is doubtful

due to lack of Subsidiary Ledger.
Famy Qualified  Cash in Bank (CIB) accounts totaling P91.314 million could not be
ascertained due to absence of Bank Reconciliation Statements
(BRS) and subsidiary ledgers of all depository accounts and the
unreconciled balances of accounting and treasury records;
 Property, Plant and Equipment (PPE) accounts with a total

acquisition cost of P34.160 million, excluding construction in
progress, were doubtful due to total discrepancy of P8.362 million
that exists between the accounting records and the Report on the
Physical Count of PPE (RPCPPE) submitted by the Municipal
Treasurer;
 Perpetual Inventory Method was not adopted in accounting for the

acquisition of supplies and materials in Calendar Year (CY) 2018
totaling P3.260 million, resulting in the overstatement of the
affected expense accounts and the understatement of the inventory
accounts by an amount equivalent to the supplies and materials
inventory still on hand as of year-end;
 Negative balances of the five payable accounts with amount

aggregating (P2.340 million) did not conform with the Local
Government Chart of Accounts;
 “Due From Other Funds” and “Due to Other Funds” showed a

discrepancy of P1.001 million as of year-end;
130
 Real Property Tax (RPT) Receivables and Special Education Tax
(SET) Receivables and its contra accounts Deferred Real Property
Tax and Deferred Special Education Tax were reported at different
amounts when both receivables were computed at one percent of
the assessed value of the real property units, thus the doubtful
validity of RPT/SET Receivables and Deferred RPT/SET Income
year-end balances reported both at P.172 million and P.568
million, respectively; and,
 Significant information to support the balances of some accounts

Notes to Financial Statements, thus casting doubt on the balances
of said accounts and depriving the users of the financial statements
of additional information value.
Kalayaan Qualified  Property, Plant and Equipment (PPE) totaling P116.046 million
(net) could not be ascertained due to: (a) unreconciled PPE
balances between the Accounting and Property Records; and (b)
unrecorded four donated PPE items in the books of account of the
Municipality.
 Thirty-Six parcels of land owned by the Municipality with a total fair

market value of P15.421 million were not recorded in the books of
accounts due to the inability of the Municipal Accountant to
consider the land owned by the Municipality as reported and per
records of the Municipal Assessor’s Office;
 Road network system was still not disclosed in the Notes to the
Financial Statements due to the inability of the Municipal Engineer
to provide the Municipal Accountant with the complete description
and cost segregation of road network assets, thus casting doubt on
the accuracy of the recorded Road Netwrks totalling P10.005
million;
 Debit or abnormal balances in Other Payables and Due to Pag-

IBIG accounts under the General Fund of the Municipality
amounting to P.091 million and P.006 million, representing the
over remittance of employees’ loan nad premium payments to
PAG-IBIG, respectively, or total of P.097 million was not adjusted
in the books of accounts as Other Receivables, thus claims of the
Municipality for the over payment were not presented as receivable
in the Financial Statements as of year-end;
 Stale check amounting to P.025 million remained unadjusted as of

December 31, 2018;
 Complete set of Special Accounts in the General Fund for the

Municipality’s economic enterprises and development projects
were still not prepared due to the inability of the Municipal
Accountant to maintain separate records from the special accounts,
131
thus depriving management and other users of the financial
statements of vital financial information on their operations.
 Disclosure requirement for Local Disaster Risk Reduction

Management Fund (LDRRMF) which showed a balance of P7.532
million as of the end of Calendar Year 2018 was still not provided
in the Notes to Financial Statements, thereby depriving the users
of the financial statements of the information on the amount set
aside for LDRRMF, the amount utilized during the year and the
unexpended balance.
Liliw Qualified  Property, Plant and Equipment (PPE) accounts amounting to

P115.751 million remained doubtful due to the inability of the
Municipality to complete the actual physical inventory of the assets,
prepare the Report of the Physical Count of Property, Plant, and
Equipment (RPCPPE) and reconcile the property and accounting
records for lack of manpower.
 “Due From Other Funds” and “Due to Other Funds” showed a

discrepancy of P8.160 million as of year-end, thus rendering the
balances of the accounts unreliable.
 Real Property Tax Receivable (RPTR) and Special Education Tax

Receivable (SETR) and its contra accounts Deferred Real Property
Tax Income (DRPTI) and Deferred Special Education Tax Income
(DSETI) were reported at different amounts when both receivables
were computed at one percent of the assessed value of real
property units, thus affected the reliability of the accounts’
RPT/SET Receivables and Deferred RPT/SET Income year-end
balances reported at P11.276 million/P3.021 million and P12.404
million/P3.021 million, respectively;
 Asset, liabilities and equity accounts in the amounts of P99.04,

P.748 million and P.317 million, respectively, were incorrectly
presented with negative balances due to the inability of the
Accounting Office to account pertinent financial transactions
properly, thus affected the reliability of the financial statements;
and,
 Significant information to support the balance of several accounts

Notes to Financial Statements, thus casting doubt on the balances
of accounts and depriving the users of the financial statements of
additional informative value.
Los Baños Qualified  Property, Plant and Equipment (PPE) account reported at a
carrying amount of P319.949 million as of year-end could not be
Accounting and Property records of P195.595 million in all funds
and inclusion of small tangible assets totaling P1.115 million which
132
were already issued to end-users with serviceable lives of more

than one year and an acquisition cost of less than P.010 million
overstated the PPE and Government Equity accounts by the same
amount.
 Stale checks totaling P1.306 million remained not adjusted as of

year-end, thus understating the Cash in Bank-Local Currency,
Current Account and Accounts Payable balances both by P1.306
million.
Luisiana Qualified  Property, Plant and Equipment (PPE) accounts totaling P152.486
million could not be determined due to the inability of the Municipal
General Service Office (MGSO) to submit properly accomplished
(RPCPPE) and maintain property records, thereby affecting the fair
presentation of the PPE accounts;
 Failure to comply with the reporting guidelines on the Local Roads

Asset Management System as prescribed under COA Circular No.
2015-008, thus the desired information on the Municipality’s Local
Road Network presented in the financial statements at P14.495
million was not fully provided.
 Inventory account balance of P.169 million could not be

ascertained due to: (a) non-maintenance of Stock Cards and (b)
non-submission of the Report on the Physical Count of Inventories
(RPCI), thus casting doubt on the existence and valuation of the
account.
Lumban Qualified  Difference of P43.089 million exists between the Statement of

Financial Position and the Subsidiary Ledgers of Property, Plant
and Equipment (PPE) accounts, valued in the books at P118.054
million and variance of P75.871 million exists between the
Statement of Financial Position and the Report on the Physical
Count of PPE (RPCPPE) on seven accounts due to inability to
reconcile the records of the Accounting and the General Services
Office, thus the accuracy and reliability of the accounts’ balances
remained doubtful;
 Perpetual Inventory Method was not adopted in accounting for

purchases of supplies and materials totaling P4.298 million, thus
resulted in the understatement of the affected inventory accounts
by an amount equivalent to the inventory still on hand as of year-
end and physical inventory for supplies was not conducted, hence,
the required Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) was not prepared and submitted to the
Office of the Audtor.
 Loan payments totaling P17.014 million which include interest

amounting to P2.871 million were directly deducted from the
133
outstanding balance of Loans Payable – Domestic account, thus,
resulted in the non-recognition of interest expense, understatement
of liability accounts and overstatement of Government Equity
account;
 Subsidiary Ledgers were not maintained for various accounts with

significant balances, thus, casted doubt on the reliability of the
affected accounts as of end of the Calendar Year (CY) 2018; and,
 Fourteen (14) Disbursement Vouchers (DVs) and their supporting

documents involving a total amount of P.270 million for payments
made in the Calendar Year (CY) 2018 remained unsubmitted to the
Office of the Auditor as of year-end, thus, the validity, legality and
propriety of the covered transactions could not be ascertained.
Mabitac Qualified  Property, Plant and Equipment (PPE) accounts recorded in the
books with net book value of P52.283 million remained doubtful due
to the variance of P.394 million between the records of the Office
of Municipal Accountant and the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) submitted by the
Municipal General Services Office;
 Perpetual Inventory Method was not adopted in accounting for the

purchases of supplies and materials totaling P2.033 million due to
non-preparation by the Supply Officer of the Reports on Supplies
and Materials Issued (RSMI) and Physical Count of Inventories
(RPCI), thus understating the inventory and overstating the
expense accounts both by an amount equivalent to the inventory
that could still be on hand as of December 31, 2018 and Supplies
Ledger Cards and Stock Cards were not maintained by the
Accounting Office and the Supply Section, respectively, thus
reconciliation of both records was not possible.
 Fourteen Disbursement Vouchers (DVs) and their supporting

documents involving a total amount of P.525 million covering
payments made in Calendar Year (CY) 2018 remained not
submitted to the Office of the Auditor as of December 31, 2018,
thus validity and propriety of the covered transactions could not be
ascertained; and,
 Cash Advances to Officers and Employees in the amount of P.245

million were not fully liquidated at the end of the year, resulting in
the overstatement of the Advances to Officers and Employees
account and understatement of the affected expense accounts by
an amount equivalent to the unreported disbursements.
Majayjay Qualified  Property, Plant and Equipment (PPE) with acquisition cost totaling
P103.360 million is unreliable due to the unreconciled balance
between the General Ledger (GL) and Property, Plant and
Equipment Ledger Card (PPELC) amounting to P11.855 million,
thus casting doubt on the fairness of presentation of the account in
the Financial Statements;
134
 Annual physical inventory of the Property, Plant and Equipment
(PPE) with a total net book value of P114.196 million was not
properly planned resulting in the non-completion of the physical
inventory, thus casting doubt on the existence and accuracy of PPE
accounts;
 Cash - Local Treasury and Cash in Bank - Local Currency, Current

Account with year-end balances of P.073 million and P63.526
million, respectively, remained doubtful due to non-reconciliation
between accounting and treasury records resulting in net
discrepancies of (P10 million) and P.053 million, respectively;
 Inventory amounting to P5.024 million as of December 31, 2018

could not be ascertained due to non-maintenance of Supplies
Ledger Cards and Stock Cards and non-submission of Report of
Physical Count of Inventories.
 Due from Officers and Employees totaling P1.162 million was not
supported with Subsidiary Ledgers due to absence of relevant
documents and records casting doubt on the collectability of the
receivables and the reliability of the amount presented in the
Financial Statements;
 Significant information to support the balance of some accounts

presented in the financial statements was not disclosed in the
Notes to Financial Statements, thus depriving the users of the
financial statements of additional relevant information on the
affected accounts; and,
 Due from Other Funds of P0.00 does not reconcile with its
reciprocal account Due to Other Funds of P.028 million, casting
doubt as to the accuracy of their balances reported in the Financial
Statements as of year-end.
Nagcarlan Qualified  Property, Plant and Equipment (PPE) account balance of P276.473
million as of December 31, 2018 was doubtful due to the inclusion
of unserviceable property in the amount of P5.360 million both in
the Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) and the PPE account; and,
 Thirty (30) parcels of land valued at P6.142 million were not

covered by Transfer Certificates of Title (TCT), thus ownership over
the said property has not been duly established, hence, casting
doubt on the reliability of the Land account as of December 31,
2018.
Paete Qualified  Property, Plant and Equipment with a reported net book value
P114.196 million is unreliable due to (a) non-disposal of
unserviceable properties amounting to P.311 million; (b) PPE
totalling P.659 million was not properly classified to
135
appropriate accounts; and (c) PPE amounting to P3.237 million

was not provided with depreciation expense.
 Public Infrastructure Assets of the Municipality were not all

recorded in the books due to the absence of Registry of Public
Infrastructure (RPI), thus resulting in the understatement of
Property, Plant and Equipment (PPE) and Government Equity
accounts equivalent to the unrecorded amount of the Public
Infrastructure Assets; and,

Notes to Financial Statements, thus depriving the users of financial
statements of additional information value.
Pagsanjan Qualified  Discrepancy in reporting the Property, Plant and Equipment (PPE)
between the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) and accounting records by P88.636 million,
thus, casting doubt on the proper valuation and existence of the
PPE account recorded at P.404 million as of December 31, 2018.
Pakil Qualified  Property, Plant and Equipment (PPE) with a net book value of
P93.373 million or 52.23 per cent of the total assets of the
Municipality was doubtful as to its existence, accuracy and validity
due to absence of Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) at year-end, Property Cards of the
GSO, Property Ledger Cards in the Accounting Office;
 Land Acquired in Calendar Year 2018 and prior years valued at

P17.920 million is doubtful since 52 parcels of land were not
covered with Transfer Certificate of Title in the name of the
Municipality; and,
 Purchases of various supplies and materials totaling P2.400 million

were directly charged to expense accounts due to inability of the
Chief Accountant and MGSO-Designate to maintain Supplies
Ledger Cards and Stock Cards, respectively, resulting in the
understatement of the Inventory account and overstatement of the
corresponding expense accounts by an amount equivalent to the
supplies and materials still on hand or not consumed as of year-
end.
Pangil Qualified  Property, Plant and Equipment accounts totaling P103.626 million
million net of Accumulated Depreciation of P32.478 million, were
doubtful due to the inability of the Inventory Committee to conduct
physical count of property of the Municipality, and prepare and
submit the Report on the Physical Count of Property, Plant and
Equipment due to manpower constraint;
136
 Balance of P2.451 million of Loans Payable – Domestic account

presented as current liability in the Statement of Financial Position
(SFP) includes the amount of long-term loan of P1.405 million,
thus, resulting in the overstatement of Loans Payable – Domestic
– current and understatement of Loans Payable – Domestic – non-
current, both by P1.405 million;
 Liquidated damages totaling P.275 million collected from the

contractors for the delay in the implementation of infrastructure
projects were misclassified in the books of account of the
Municipality as liability, thus overstating the Due to LGUs account
and understating the Miscellaneous Income account both by the
same amount;
 Local Road Network Property Cards were not maintained by the

Municipal Treasurer, while the total road network system was still
not disclosed in the Notes to the Financial Statements due to the
inability of the Municipal Engineer to provide the Municipal
Treasurer and Municipal Accountant with the complete description
and cost segregation of road network assets, thus casting doubt on
the accuracy of the recorded Road Networks totaling P15.090
million; and,

million as of the end of Calendar Year 2018 was still not provided
in the Notes to Financial Statements, thereby depriving the users
of the financial statement of the information on the amount set
aside for LDRRMF, the amount utilized during the year and the
details of the unexpended balance.
Pila Qualified  Property, Plant and Equipment (PPE) with a net book value of
Municipality was doubtful as to its existence, reliability and
correctness due to absence of Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) at year-end, non-
reconciliation of Property Cards maintained by the General Service
Officer (GSO) with the Property Ledger Cards of the Accounting
Office, and absence of Transfer Certificate of Title (TCT) in the
name of the Municipality for 21 parcels of lot;
 Loans Receivable – Others and Other Receivables totaling P4.393

million as of December 31, 2018 remained outstanding for more
than 18 years due to lack of documents are doubtful and unreliable;
and,
 Land acquired in Calendar Year 2018 in prior years valued at

P10.105 million in the General Fund and P.591 million in the
Special Education Fund or a total of P10.696 million consisting of
21 parcels of lot were not covered with Transfer Certificates of Title
in the name of the Municipality.
137
Rizal Qualified  Property, Plant and Equipment (PPE) accounts totaling P38.329
million net of Accumulated Depreciation of P1.286 million, were
doubtful due to the following: a) Inadequacy of the accounting and
property records, and inability to reconcile both records; b) Inability
of the Inventory Committee to conduct physical count of the
properties of the Municipality and prepare and submit the Report
on the Physical Count of Property, Plant and Equipment;
 Local Road Networks totaling P9.437 million were not recognized

in the Financial Statements for Calendar Year (CY) 2018 and
disclosed in the Notes to Financial Statements, due to the inability
of the Municipal Accountant to consider the cost and complete
description of road network assets provided by the Municipal
Engineer, thus understating both the Road Networks and
Government Equity accounts by the same amount and depriving
the stakeholders and the other users of the financial statements of
information and data on the local road network of the Municipality;
 Accounts payable totaling P7.000 million relative to the land

purchased on installment basis charged out of the 20 per cent
development fund was not recorded in the books of account of the
Municipality, thus resulted in the understatement of the accounts
Land and Accounts Payable both by P7.000 million;
 Bottom-up Budgeting projects and other projects funded by the

different National Government Agencies amounting to P53.281
million was not properly accounted for in the books of accounts,
thus understating both the PPE and Government Equity accounts
by same amount;
 Land owned by the Municipality with a total fair market value of

P.918 million was not recorded in the books of account, thus,
resulting in the understatement of the year-end balance of both
Land and Government Equity accounts by the same amount;
 Property, Plant and Equipment (PPE) totaling P13.099 million were

not provided with depreciation due to absence of relevant records
to determine its date or period of acquisition, thus overstating the
PPE and Government Equity as of December 31, 2018 by an
amount equivalent to the unrecorded depreciation expenses;and,

million as of the end of CY 2018 was still not provided in the Notes
to Financial Statements, thereby depriving the users of the financial
statements of the information on the amount set aside for
LDRRMF, the amount utilized during the year and the details of the
unexpended balance.
138
Santa Cruz Qualified  Failure to comply with the reporting guidelines on the Local Roads
Asset Management System, thus the desired information on the
Municipality’s Local Road Network presented in the financial
statements at P27.952 million was not fully provided;
 Real Property Tax Receivables and Special Education Tax

Receivables were understated by P18.528 million and P17.029
 Long outstanding receivables totaling P2.482 million which have

been dormant for more than 20 years were still reflected in the
books of accounts, thus raising doubts as to their collectability;
 Inventory account balance of P1.004 million could not be

ascertained due to (a) non-maintenance of Stock Cards and (b)
non-submission of the Report on the Physical Count of Inventories
(RPCI), thus casting doubt on the existence and valuation of the
account; and,
 Due from Local Government Units (LGUs) is doubtful due to a net

difference of P.506 million between the account Due from LGUs
maintained by the Municipality and the account Due to LGUs
recorded by Provincial Government of Laguna.
Santa Maria Qualified  Property, Plant and Equipment (PPE) with a net book value of
ascertained due to non-maintenance of Property, Plant and
Equipment Ledger Cards by the Accounting Office and Property
Cards by the Municipal General Services Office and discrepancy in
reporting PPE balances between the accounting records and the
(RPCPPE) by P133.805 million and were not provided with
depreciation expense, thus resulting in the overstatement of the
PPE and understatement of the Depreciation Expense and
Accumulated Depreciation by an amount equivalent to the
unrecorded depreciation expenses;
 Discrepancy of P5.820 million in reporting Cash-in-Bank - Local

Currency, Current Account (LCCA) balance between the book and
bank records, resulting from non-preparation of monthly Bank
Reconciliation Statements, thus affecting the reliability of the year-
end balance of the Cash in Bank – LCAA of P46.710 million;
 Cash-Local Treasury and Cash in Bank – Local Currency, Current

Account (LCCA) with a year-end balances of P.304 million and
P46.710 million, respectively, remained doubtful due to non-
reconciliation between accounting and treasury records, resulting
in net discrepancies of P.306 million and P9.509 million,
respectively; and,
139
Notes to Financial Statements, contrary to Paragraphs 127 (c) and
129 of Philippine Public Sector Accounting Standards (PPSAS) 1,
thus depriving the users of the financial statements of additional
relevant information on the affected accounts.
Siniloan Qualified  Cash Local Treasury and Cash in Bank-Local Currency, Current
Account with year-end balances of P1.427 million and P13.492
million, respectively, remained doubtful due to non-reconciliation
between accounting and treasury records, resulting in net
discrepancies of P1.109 million and P17.055 million, respectively;

million remained doubtful due to the following deficiencies: (a)
variance of P45.677 million between the records of the Office of the
Municipal Accountant and the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) which resulted from the
inability of the Inventory Team to conduct a complete physical
count of PPE and the non-maintenance of Property, Plant and
Equipment Ledger Cards (PPELCs) and Property Cards (PCs);
and (b) PPE with a total cost of P39.737 million were not provided
with depreciation expenses, thus resulted in the understatement of
expenses and overstatement of PPE by an amount equivalent to
the unrecorded depreciation expenses;
 Failure to comply with the reporting guidelines or required

disclosures on the Local Roads Asset Management System due to
inability of the Municipal Engineer to provide the Municipal
Accountant with the complete description and cost segregation of
road network assets, thus desired information on the Municipality’s
Local Road Network presented in the financial statements at
P25.000 million was not fully provided;
 Perpetual Inventory Method was not adopted in accounting for

receipts and issuances of supplies and materials totaling P7.352
million, thus understating the inventory and overstating the
expense accounts both by an amount equivalent to inventory still
on hand as of December 31, 2018. Moreover, the accuracy and
reliability of the amount presented as Inventory Held for
Consumption amounting P.692 million could not be ascertained
due to the absence of Supplies Ledger Cards (SLC) and Stock
Cards (SC);
 Discrepancy in reporting the Loans Payable-Domestic account and

the Interest Expense between the accounting records and
amortization schedule of the Land Bank of the Philippines (LBP) by
P.498 million and P2.395 million, respectively, which resulted in the
overstatement of the Loans Payable-Domestic account and
understatement of the Interest Expense account equivalent to the
amount of the noted variance, thus the doubtful reliability of the
140
accounts Loans Payable-Domestic and Interest Expense reported

at P40.798 millionand P0.00, respectively, as of year-end;

Notes to Financial Statements, thus depriving the users of financial
statements of additional information value;
 Discrepancy of P1.439 million between the reciprocal accounts

Due from Other Funds and Due to Other Funds, and the necessary
schedules and disclosures in the Notes to Financial Statements
were not provided, thus the doubtful reliability and accuracy of the
accounts; and,
 One hundred eighty seven (187) disbursement vouchers (DV) paid

in Calendar Year (CY) 2018 totaling P16.782 million were not yet
submitted to the Audit Team as of year-end, thus resulted in the
delayed review and verification on the propriety and validity of the
covered transactions.
Victoria Qualified  Property, Plant and Equipment (PPE) with a net book value of
Municipality was doubtful as to its existence, accuracy and validity
due to absence of Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) at year-end and non-reconciliation of
Property Cards maintained by the General Services Office with the
Property Ledger Cards of the Accounting Office;
 Inventory account totaling P1.133 million as of December 31, 2018

was doubtful as to the existence and accuracy due to non-
maintenance of Supplies Stock Cards and non-submission of
Report on Physical Count of Inventories (RPCI) from the General
Services Officer (GSO) – Designate; and,
 Collectability of the accounts Loans Receivable – Others, Due from

NGAs and Other Receivables totaling P.414 million as of
December 31, 2018 which remained outstanding for more than
three to 25 years are doubtful and unreliable.
Quezon Qualified  Cash in Bank – Local Currency, Current Account (CIB – LCCA) as
of December 31, 2018 totaling P1.968 billion was unreliable due to
the presence of (a) long outstanding reconciling items; (b) stale
checks totaling P.758 million; and (c) non-existent deposit account
with the Philippine National Bank (PNB) totaling P.324 million;
 Cash Advances totaling P8.116 million were not liquidated as of

December 31, 2018, P1.683 million or 21% of which pertains to
unliquidated cash advances which have been outstanding for one
to 22 years due to non-settlement by the Accountable Officers, who
were either retired, resigned or deceased;
141
 Due from Other Funds and Due to Other Funds under the General
Fund, Special Education Fund and Trust Fund, showed a
difference of P57.816 million due to erroneous recording of various
transactions;
 Agricultural and Marine Supplies for Distribution account balance

of P78.075 million as of December 31, 2018 includes inventories
totaling P12.202 million which have been outstanding in the books
for two to three years due to the failure of the accountable persons
to submit to the Provincial Accounting Office the List of Recipients
(LOR) including the duly signed Certificate of Acceptance;

billion per Accounting records was not reconciled with the
Cumulative Annual Report of Property, Plant and Equipment of the
General Services Office (GSO) amounting to P4.655 billion,
showing a difference of P2.139 billion due to non-completion of
physical count and non-reconciliation of records by the Accounting
and GSO, thus rendering the accounts’ balances unreliable and not
fairly presented;
 Breeding Stocks account balance amounting to P6.976 million is

doubtful and unreliable due to the presence of dormant balances
totaling P5.962 million which have been outstanding for six to 10
years and was not reconciled with the records of the General
Services Office amounting to P.480 million showing a difference of
P6.497 million;
 Construction in Progress (CIP) - Building and Other Structures

account as of December 31, 2018 totaling P127.084 million of the
General Fund could not be relied upon due to the presence of non-
moving balances totaling P16.247 million which have been
dormant for seven to 13 years;
 Due to Officers and Employees account as of December 31, 2018

under the General Fund amounting to P52.428 million is unreliable
and not fairly presented in the Financial Statements due to the
inclusion of negative balances totaling P.467 million; and,
 Due to GSIS account balance totaling P48.142 million as of

December 31, 2018 are doubtful due to significant amount of
unreconciled balances amounting to P18.428 million and improper
posting resulted in negative balances amounting to P1.539 million.
Cities
Lucena City Qualified  Other Receivables totaling P2.381 million remained in the books of
accounts for more than 15 years and were not requested for write-
off, thus, rendering the account balance unreliable and affecting its
fair presentation in the financial statements.
142
 Guaranty/Security Deposits Payable totaling P3.293 million which
have been outstanding for more than two years, were not reverted
to the Unappropriated Surplus of the General Fund (GF);
 Excess collections from the sale of bidding documents for CY 2018

amounting to P.151 million remained in the Trust Fund (TF) books,
thus, overstating the Trust Liabilities account and understating the
affected income account by the same amount;
 Payables totaling P2.653 million as of December 31, 2018, which

were not supported with complete documentation, were recognized
in the books of accounts of the City and had been outstanding for
more than two years; and,
 Stale checks totaling P.099 million remained outstanding in the

Bank Reconciliation Statements of the City at year-end, thus,
resulting in understatement of the Cash in Bank account and
overstatement of the respective expenses account by the same
amount.
Tayabas City Qualified  Property, Plant and Equipment (PPE) account balances with a
gross amount of P223.542 million as of December 31, 2018
(excluding Land, Land Improvements, Infrastructure Assets,
Buildings and Other Structures and Construction in Progress) could
not be ascertained due to the non-reconciliation of the Report on
the Physical Count of PPE (RPCPPE) and records of the
Accounting Office;
 Inventory account balance presented in the Financial Statements

totaling P10.592 million (excluding Accountable Forms, Plates and
Stickers) is not reliable as to existence and valuation due to non-
submission of the Report of the Physical Count of Inventories
(RPCI) since physical count was not conducted by the City General
Services Officer (CGSO), non-maintenance of supplies ledger
cards by the City Accountant;
 Real Property Tax/Special Education Tax (RPT/SET) Receivables

and Deferred RPT/SET Income reciprocal accounts reflect
unreconciled balances with a total discrepancy of P4.962 million,
due to recording to Deferred RPT/SET Income of collections made
in advance for Real Property and Special Education Taxes,
overstating Deferred RPT/SET Income and understating Other
Deferred Income by the same amount;
 Unserviceable properties with a total book value of P2.308 million

were not disposed; and,
 Only P.627 million of the P1.848 million balance of the Accounts

Payable in Calendar Year (CY) 2017 which have been outstanding
for more than two years were reverted to the Unappropriated
Surplus of the General Fund.
143
Municipalities
Agdangan Qualified  Five parcels of land recorded in the books at P1.180 million, one
titled in the name of a private person, were not supported with
Transfer Certificate of Title (TCT) in the name of the Municipality
due to lack of supporting documents to facilitate the titling, thus
rendering the valuation and ownership doubtful;
 Biological Assets of P.925 million is unreliable as to valuation and

existence because the adjustments were not made for the sale and
death of the dispersed animals due to lack of supporting
documents;
 Accounts Payable of P1.004 million includes prior years’

obligations of P.900 million without supporting documents while
payables of P.031 million which have been outstanding for several
years were not reverted to the Unappropriated Surplus of the
General Fund due to non-observance of the existing rules and
regulation; and,
 Dormant receivables totaling P.398 million are still recorded in the

books due to lack of documents to support the write-off of the
accounts, thus the balance of receivables in the financial
statements is overstated by the same amount.
Alabat Qualified  Property, Plant and Equipment account excluding Land and
Construction in Progress amounting to P44.852 million is unreliable
due to (a) submission of an incomplete Report on Physical Count
of Property, Plant and Equipment not presented per type; (b) non-
reconciliation of the property cards and ledger cards; (c) non-
recognition of depreciation for various infrastructure assets and
office equipment; and, (d) misclassification of a rescue vehicle;
and,
 Confidential fund amounting to P.025 million was not liquidated as

of year-end due to non-submission of the liquidation report to the
Intelligence and Confidential Fund Audit Unit of the Commission on
Audit within the prescribed period and was recorded under
Advances for Officers and Employees account instead of Advances
to Special Disbursing Officer account due to misclassification of the
said cash advance.
Atimonan Qualified  Property, Plant and Equipment (PPE) accounts per financial
statements and the Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) have a net discrepancy of P78.299
million due to submission of an incomplete RPCPPE and non-
reconciliation of the property cards and ledger cards;
 Land account of P16.092 million could not be ascertained due to:

(a) the inclusion of an amount worth P1.702 million without
details/breakdown in the General and Special Education Funds; (b)
unrecorded parcels of land owned and titled under the name of the
Municipality; (c) lots with tax declarations named under the
Municipality but were not supported with certificate of titles which
are subject to verification of ownership; and, (d) four lots owned by
the Municipality are still untitled under;
144
 Due from Other Funds and Due to Other Funds accounts are not
reconciled due to non-recording of the corollary entry in the Trust
Fund pertaining to the constructive transfer of unspent Disaster
Risk Reduction and Management Fund (DRRMF) of the
Municipality for the current year amounting to P4.880 million;
 Computer software for the Accounting Information System of the

Municipality costing P1.057 million was not provided with
amortization due to lack of information regarding the estimated
useful life of the said asset;
 Work/Zoo Animals and Breeding Stocks accounts amounting to

P.250 million and P.090 million, respectively, are unreliable due to
non-reconciliation of the ledger cards and property cards and non-
submission of status report of the said animals as of year-end; and,
 Bail bonds payable amounting to P.170 million were still not

supported with details/breakdown as the Municipal Accountant is
still in the process of retrieving its supporting documents, thus,
validity and accuracy of the account cannot be relied upon.
Buenavista Qualified  Property, Plant and Equipment (PPE) account in the Financial
Statements totaling P193.165 million is not reliable as to existence
and valuation due to non-reconciliation of the Report on the
Physical Count of Property, Plant and Equipment (RPCPPE) and
records of the Accounting Office;
 Receivables totaling P.526 million is doubtful due to the lapse of

time where no collection letters were sent to various debtors;
 Due from Officers and Employees totaling P.149 million

representing balances of cash advances granted to various
employees were not collected/refunded within the prescribed
period; .
 Guaranty/Security Deposits Payable as of December 31, 2018

included claims amounting to P1.348 million which have been
outstanding for more than two years or more due to failure of the
claimants to demand payment, and these were not reverted to the
Unappropriated Surplus of the General Fund.
Burdeos Management Letter  Due to non-submission of accounts and financial reports.
Calauag Unqualified
Candelaria Qualified  Road Networks account totaling P49.403 million could not be
ascertained due to non-compliance with the transition on the
phased recognition of the Local Road Network in the books of
accounts which requires 75% compliance at the end of CY 2018
contrary to Item IX of Commission on Audit (COA) Circular No.
2015-008, thus resulting in the understatement of road network
account 3ts by undetermined amount and affecting its fair
presentation in the financial statements;
145
 Due from Other Funds of P21.297 million and Due to Other Funds
of P31.145 million are doubtful due to unreconciled balances of
P9.848 million and were not provided with complete details;
 Real Property Tax and Special Education Tax (RPT/SET)

Receivable totaling P18.638 are doubtful due to unreconciled
discrepancies of P2.979 million against the Municipal Treasurer’s
uncollected amounts of P21.617 million;
 Payment of P16 million for the purchase of parcel of land from

QUEDANCOR was doubtful because it was not supported with
complete documentation as required under Section 4 (6) of PD No.
1445 and COA Circular No. 2012-001 and the land was not
supported with Certificate of Title in the name of the Municipality;
 Receivables account balances totaling P.524 million as of

December 31, 2018 are dormant and were not requested for write-
off; and,
 Trust Liabilities - Disaster Risk Reduction Management Fund

(DRRMF) account of P33.113 million is unreliable due to
unreconciled difference of P13.674 million between Local Disaster
Risk Reduction Management Fund (LDRRMF) Utilization Report
and the subsidiary ledgers showing the transfers of unutilized
LDRRMF to the special trust fund and details and amounts of the
unexpended balance were not disclosed in the Notes to Financial
Statements.
Catanauan Qualified  Thirteen lots titled in the name of the Municipality were not recorded
in the books;
 Property, Plant and Equipment (PPE) with a net book value of

P304.984 million could not be ascertained due to non-completion
of the physical inventory during the year as well as non-preparation
and non-maintenance of property cards and subsidiary ledgers for
each category of PPE; and,
 The valuation and existence of the inventory account balances as

of year-end totaling P1.717 million could not be ascertained due to
non-submission of the Report of the Physical Count of Inventories
(RPCI) since physical count was not conducted by the General
Services Officer (GSO) as well as non-maintenance of supplies
ledger cards by the Accounting Office.
Dolores Qualified  Property, Plant and Equipment (PPE) accounts totaling P78.842
million, net of depreciation, could not be ascertained due to (a)
non-conduct of physical count of PPE hence Report on Physical
Count of Property, Plant and Equipment (RPCPPE) was not
prepared and submitted; (b) unaccounted properties totaling
P11.684 million; and, (c) discrepancies in the amounts reflected in
the financial statements and the Schedule of Depreciation;
 Land account recorded in the books of accounts of the Municipality

amounting P3.056 million could not be ascertained and 17 of 29
parcels of land owned by the Municipality were still untitled;
146
 Failure to comply with the transitory provision on the phased

which requires 75% compliance at the end of the Calendar Year
(CY) 2018;
 Other Receivables and Due from Officers and Employees totaling

P.214 million and P.003 million, respectively, remained in the
books of accounts for more than four to 21 years and were not
requested for write-off;
 Liquidation reports of cash advances for Intelligence Fund from

CYs 2010-2015 of former Municipal Mayor totaling P.130 million
were not submitted to the Intelligence and Confidential Fund Audit
Unit (ICFAU) of the Commission on Audit;
 Payables totaling P.643 million which have been outstanding in the

books of accounts for more than two to 12 years were not reverted
to the Unappropriated Surplus of the General Fund (GF); and,
 Guaranty/Security Deposits Payable totaling P.037 million which

have been outstanding for more than two years were not reverted
to the Unappropriated Surplus of the General Fund (GF).
General Luna Qualified  Property, Plant and Equipment (PPE) accounts with a net book
value totaling P32.284 million could not be ascertained due to the
failure of the Inventory Committee to complete the physical
inventory during the year as well as to prepare and maintain
property cards and subsidiary ledgers for each category of PPE;
 Five parcels of land recorded in the books at P3.091 million were

not supported with Transfer Certificate of Title in the name of the
Municipality;
 Inventory account with zero balance as of year-end is doubtful due

to non-submission of the Report on the Physical Count of
Inventories (RPCI) and non-maintenance of supplies ledger cards
by the Accounting Office; and,
 Real Property Tax (RPT) delinquencies were accumulated at a

total amount of P8.243 million at year-end, due to lack of full
enforcement of statutory remedies for the collection of delinquent
accounts by the Municipal Treasurer’s Office.
General Nakar Qualified  Property, Plant and Equipment (PPE) accounts in the Financial
Statements totaling P267.875 million (excluding Land, Buildings,
Public Infrastructures and Construction in Progress) as of year-end
are doubtful due to non-completion of the reconciliation of the
(RPCPPE) and records of the Accounting Office, thus showing a
material variance of P52.986 million;
147
 Land account valued at P32.128 million is doubtful due to inclusion

of 11 parcels of land valued at P2.262 million that were not
supported with Transfer Certificate of Title duly issued by the
Registry of Deeds in the name of the Municipality;
 Inventory account balances as of year-end totaling P7.746 million

are doubtful due to non-reconciliation of the Report on the Physical
Count of Inventory (RPCI) and records of the Accounting Office,
thus showing a material variance of P7.694 million;
 Receivables of P5.259 million remain uncollected for more than 11

years of which the total amount of P1.550 million was not supported
with documentation and schedule of debtors;
of P4.177 million are doubtful;
 Due to GSIS, Pag-IBIG, and BIR accounts representing

contributions withheld from its officials/employees, suppliers and
contractors amounting to P.485 million, P.315 million, and P2.486
million, respectively, as of December 31, 2018 are doubtful due to
unreconciled/unremitted prior months contributions;
 Advances to Special Disbursing Officer and Advances to Officers

and Employees accounts amounting to P.154 million and P.109
million, respectively, remain unliquidated at year-end; and,
 Abnormal balances in the Cash Local Treasury, Due to GOCCs

and Due to PhilHealth accounts of negative P.109 million, P.001
million and P.002 million, or a total of P.112 million, were due to the
unrecorded collections, payroll in trust fund and over-remittance to
PhilHealth brought about by the difference between manual
computation during payroll and computation in PhilHealth
Electronic Premium Remittance System for every remittance,
respectively.
Guinayangan Qualified  Property, Plant and Equipment (PPE) accounts with total book
value of P169.691 million as of year-end are unreliable due to: a)
incomplete conduct of physical count; b) unaccounted/unidentified
PPE of General Fund and Special Education Fund (SEF) totaling
P12.092 million; c) unrecorded PPE of SEF and TF totaling P.262
million; and, d) non-maintenance of complete and updated
Property Card and Property Acknowledgement Receipt;
 Cash in Bank-Local Currency, Current Account account of

P144.664 million is unreliable due to various unadjusted reconciling
items shown in the Bank Reconciliation Statements as of
December 31, 2018 totaling P6.661 million;
148
Receivables totaling P55.987 million are unreliable because: a) no
set up for RPT and SET Receivables for CYs 2017 and 2018; b)
the List of Real Property Delinquent Taxpayers from the Municipal
Treasurer’s Office (MTO) shows a total amount of P42.176 million
and it includes the collectibles for CY 2001 and below; c) non-
maintenance of subsidiary ledger for each taxpayer by the
Accounting Office;
 Land account of P9.470 million is unreliable in the absence of

documents as basis for the valuation of the 15
purchased/donated/possessed/reclaimed parcels of land, and five
of which were still not titled to the Municipality.
 Drugs and Medicines for Distribution and Agricultural Produce for

Distribution of P.700 million and P.004 million, respectively, are
unreliable because they have no corresponding Report of the
Physical Count of Inventories;
 Breeding Stocks account amounting to P.605 million as of year-end

is unreliable due to lack of supporting documents;
 Payables for various expenses totaling P.334 million were

erroneously recorded in the Advances to Operating Expenses and
Advances to Payroll accounts, thereby resulted in the
overstatement of said accounts and understatement of relative
expenses.;
 Cash advances were not liquidated within the prescribed period,

thus resulted in unliquidated amount of P.510 million as of
December 31, 2018 and liquidation reports and supporting
documents for advances for payroll and operating expenses
totaling P1.641 million were not submitted to the Audit Team;
 Insurance and improvement expenses relative to economic

enterprises totaling P.452 million were charged to the GF;
 Construction in Progress – Infrastructure Assets, Due to NGAs,

Due to Other Funds and Guaranty/Security Deposits Payable in the
books of Philippine Rural Development Project (PRDP)-Intensified
Building-up of Infrastructure and Logistics for Development
(IBUILD) under the Trust Fund are understated by P1.644 million,
P0.01, P1.467 million and P.177 million, respectively, due to
erroneous recording of expenses for honorarium, travelling and
cost of checkbook as part of project cost; non-inclusion of interest
expenses and gross receipt taxes on loans as project cost; and
various erroneous adjustments; and,
 Fund transfers made by the Municipality to the Capuluan Central

Fishermen/Farmers Association for the implementation of the
149
project under PRDP-Investment in Rural Enterprises and
Agriculture and Fisheries Productivity (IREAP) totaling P.940
million were debited to the Due to NGAs and Due to Other Funds
accounts instead of Due from Non-Government
Organizations/People's Organizations account, and funds received
from the General Fund as LGU Equity amounting to P.030 million
was credited to the Due to NGAs account instead of Due to Other
Funds, hence resulted in the understatement of Due to NGAs, Due
to Other Funds and Due from Non-Government
Organizations/People's Organizations account by P.281 million,
P.108 million and P.389 million, respectively.
Gumaca Qualified  Property, Plant and Equipment (PPE) account totaling P307.002
million except Land is unreliable due to non-submission of a
complete Physical Count of Property, Plant and Equipment
(RPCPPE);
 Purchases of accountable forms, animal/zoological supplies, drugs

and medicines, medical and laboratory supplies, agricultural
supplies, and other supplies of P3.826 million were directly
recorded in the books as outright expense;
 Accounts Payable of P.357 million which have been outstanding

for two years or more, were still not reverted to the Unappropriated
Surplus of the General Fund; and,
 Guaranty/Security Deposits Payable cannot be relied upon due to

the total amount of P.475 million which have been outstanding for
two years or more were not reverted to the Unappropriated Surplus
of the General Fund.
Infanta Qualified  Property, Plant and Equipment (PPE) accounts in the Financial
(RPCPPE) and records of the Accounting Office, thus showing a
material variance of P34.874 million;
 Land account valued at P90.893 million is doubtful due to inclusion

of four parcels of land valued at P5.925 million that were not
supported with Transfer Certificate of Title duly issued by the
Registry of Deeds in the name of the Municipality;
of P4.602 million are doubtful due to unreconciled balance of
P3.272 million;
 Failure to setup the SET Receivable at the beginning of the year

due to non-submission of the certified list of taxpayers by the
Municipal Treasurer;
150
could not be ascertained due to non-completion of the Report of
Physical Count of Inventories (RPCI) and purchases of medicine,
medical, dental and laboratory supplies were recorded as an
outright expense;
 Advances for Payroll and Advances to Officers and Employees

accounts amounting to P.803 million and P.010 million,
respectively, remain unliquidated at year-end; and,
 Due to GSIS, PhilHealth, Pag-IBIG, and BIR accounts representing

contributions withheld from its employees, suppliers and
contractors amounting to P.979 million, P.065 million, P.293 million
811.22 and P1.160 million, respectively, as of December 31, 2018
are doubtful due to unreconciled/unremitted prior months
contributions.
Jomalig Management  Due to non-submission of accounts and financial reports.

Letter
Lopez Qualified  Property, Plant and Equipment (PPE) accounts with total book
value of P295.778 million as of year-end are unreliable due to: a)
incomplete conduct of physical count; b) unaccounted/unidentified
PPE of General Fund (GF) and Special Education Fund totaling
P5.452 million; and c) non-maintenance of complete and updated
Property Cards and Property Acknowledgement Receipt;

Receivables totaling P90.129 million are unreliable;
 Inventories totaling P4.823 million and corresponding expenses

accounts of P3.707 million are unreliable;
 Land account of P9.603 million as of December 31, 2018 is

unreliable due to the recording of 13 parcels of land at market
value instead of at their purchase cost or fair value for donation and
non-recording of one parcel of titled land; and,
 Improvements and insurance of Public Market totalling P3.123

million were charged to the GF due to the absence of
appropriations in Lopez Municipal Economic Enterprises Unit
(LMEEU), hence resulted in the understatement of operating loss
and operating income of LMEEU and GF, respectively, both
byP3.123 million.
Lucban Qualified  Land account recorded in the books of accounts at P6.312 million
includes 17 parcels of land totaling P2.191 million that were not
supported with Transfer Certificate of Title in the name of the
Municipality, due to incomplete documents necessary for the titling
and special patent issuance;
151
 Property, Plant and Equipment (PPE) account in the Financial
and valuation due to the non-completion of the reconciliation of the
(RPCPPE) and records of the Accounting Office; and,
 Fifteen (15) motor vehicles and four heavy equipment acquired

through purchase worth P4.265 million and there were those
received as donations which were not recorded in the books of
accounts as of year-end due to incomplete documents and
absence of fair values, resulting in the understatement of the Motor
Vehicles and Construction and Heavy Equipment accounts and 19
motor vehicles worth P8.428 million were not registered in the
name of the Municipality.
Macalelon Unqualified
Mauban Qualified  Property, Plant and Equipment (PPE) account in the Financial
and valuation due to: a) non-reconciliation of the Report on the
records of the Accounting Office with a discrepancy of P10.577
million representing items in the Construction and Heavy
Equipment account which were dropped from the books of
accounts because of disposal and b) inclusion of PPE of P1.278
million in both accounting and property records which were already
disposed;
 Land account recorded in the books of General Fund at P69.220

million has an unaccounted balance of P29.630 million;
 Land account in the books of accounts at P88.690 million includes

22 parcels of land valued at P14.156 million were without Transfer
Certificate of Title (TCT) in the name of the Munucipality;
 Cash Advances totaling P.942 million which include the balance of

P.090 million for intelligence fund remained unliquidated as at year-
end; and,
 Loans Receivables - Others from various debtors totaling P14.054

million remained uncollected for several years due to: a) lack of
efforts to enforce the repayment scheme and to monitor the
status/payment of the project; and, b) failure to adopt efficient and
aggressive collection strategies thereby exposing the livelihood
projects/programs to sustainability risk and may further result in the
loss of government funds.
Mulanay Unqualified
152
Padre Burgos Qualified  Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) was not submitted to the Audit Team and the Property
Cards for Property, Plant and Equipment (PPE) were not
maintained by the Municipal Treasurer’s Office (MTO), due to lack
of manpower and time constraint thus, the valuation and existence
of the properties could not be ascertained and rendered the PPE
account balance of P36.992 million in the financial statements
unreliable;
 Fully-depreciated and unserviceable properties with residual value

totaling P.318 million were not disposed;
 Fifteen (15) parcels of land recorded in the books at P2.916 million

are not supported with Transfer Certificate of Title, due to lack of
funds for titling and pending verification of land classification and
status with the other government agencies; and,
 Payable accounts totaling P.129 million which have been

outstanding for ten years were not reverted to the Unappropriated
Surplus of the General Fund because the supporting documents
were no longer available.
Pagbilao Qualified  Land account recorded in the books of accounts at P19.233 million
includes five parcels of land valued at P9.923 million that were not
supported with Transfer Certificate of Title in the name of the
Municipality, due to lack of documents to support the titling;
 Loans Receivables - Others from various debtors totaling P.341

million remained uncollected for more than 10 years;
 Other Receivables account balance of P.066 million in the Trust

Fund representing KKK Project remained outstanding for a period
ranging from 33 to 36 years and the collectability of the total amount
of P.044 million is nil because the borrowers/proponents are
already dead, thus resulting to loss of government funds contrary
to Section 2 of PD No. 1445.

have been outstanding for two years or more were still not reverted
to the Unappropriated Surplus of the General Fund; and,
 Failure to comply with the transitory provision on the phased

which requires 75% compliance at the end of CY 2018.
Panukulan Qualified  Property, Plant and Equipment (PPE) accounts in the Financial
are doubtful due to non-reconciliation of the Report on the Physical
Count of Property, Plant and Equipment (RPCPPE) and records of
the Accounting Office brought about by workload and lack of
153
personnel, thus showing a material variance of P26.767 million
which may include unserviceable properties;
 Land account valued at P6.403 million is doubtful due to lack of

Transfer Certificate of Title duly issued by the Registry of Deeds
brought about by the lack of coordination among those responsible
for the titling of the parcels of land, and only P.601 million was with
appropriate subsidiary ledger;
 Inventory account balances as of year-end totaling P.252 million

are doubtful due to non-recognition of donated drugs and
medicines from the Department of Health (DOH), thus resulting to
unrecorded inventory of P.018 million and cast doubt on the
reliability of accounts as of year-end;
 Unaccounted balance of 93% or P.496 million was included in the

Other Payable account because the Municipal Accounting
personnel was not able to locate records/files to support the claim,
hence affecting the reliability of balance of the account of P536
million as of December 31, 2018.
Patnanungan Disclaimer  Balance Sheet accounts of the Municipality as of December 31,

2018 remain unreliable because the Municipal Treasurer was
unable to submit accounts, reports and accounting records prior to
August 2004;
 Non-rendition of the records and accountabilities resulted in the

unreliability of Receivables (Due from Officers and Employees;
 Property, Plant and Equipment (PPE) presented in the Financial

Statements totaling P9.043 million (excluding Land, Infrastructure
Assets, MDRRMC Building, Senior Citizen Building, Construction
and Heavy Equipment and Construction in Progress) is not reliable
as to existence and valuation due to the non-submission of the
(RPCPPE) and non-maintenance of property cards and subsidiary
ledgers in the Accounting Office;
 Supplies and Material Expenses reported in the Financial

Statements totaling P3.234 million could not be ascertained due to
non-maintenance of Supplies Ledger Cards (SLC) and stock cards
and non-submission of Summary of Supplies and Materials Issued
(SSMI);
 Cash advances totaling P2.667 million remain unliquidated as of

December 31, 2018 which includes long outstanding cash
advances, in violation of COA Circular No. 97-002, due to granting
of additional cash advances even though previous cash advances
have not been liquidated;
 Unable to set up the Real Property Tax (RPT) Receivable and

Special Education Tax (SET) Receivable at the beginning of the
year, due to non-submission of the certified list of taxpayers by the
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relieved Municipal Treasurer, hence the RPT and SET
Receivables accounts totaling P14.057 million as of December 31,
2018 are unreliable.
 Unable to prepare the necessary adjusting entry on the difference

in the amount of P6.972 million between the Due from Other Funds
of P4.469 million and its reciprocal account Due to Other Funds of
P11.441 million as of year-end, due to the non-verification of the
cause/s in the unreconciled balances;
 Unaccounted balance of P.230 million recorded under Due to

NGAs account which have been outstanding for more than two
years were not reverted to the Unappropriated Surplus of the
General Funds; and,
 Receivables of P.147 million which were not supported with details

and documentation remain in the books of accounts as of
December 31, 2018 and were not requested for write-off.
Perez Qualified  Property, Plant and Equipment (PPE) account excluding Land and
Construction in Progress amounting to P89.538 million is unreliable
due to some PPE items without value in the Report on Physical
Count of Property, Plant and Equipment (RPCPPE) and the
submission of the said Report not presented per type, hence the
accuracy and valuation of the said assets could not be ascertained;
 Amounts due to the Bureau of Internal Revenue and Philippine

Health Insurance Corporation amounting to P.042 million and
P.005 million, respectively, remain unremitted as of December 31,
2018 due to the inability of the Municipal Accountant to provide its
details/breakdown.
Pitogo Qualified  Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) was not submitted, PPE accounts totaling P14.078
million were not provided with depreciation and the property ledger
cards/property cards are not maintained due to non-conduct of
physical inventory, lack of manpower and unavailability of relevant
records/documents, thus the year-end carrying balance of PPE
accounts totaling P49.302 million is unreliable as to valuation and
existence.
 Bank reconciliation statement for the closed Special Deposit

Account (SDA) with a book balance of P.896 million was not made
because the bank statement was not requested by the Municipal
Accountant when it was not furnished by the Ban;
 Dormant receivables totaling P.914 million was not written-off due

to non-compliance with the guidelines and procedures on the write-
off of dormant receivable account;
 Receivables from various beneficiaries/borrowers of the livelihood

project of the Municipality totaling P2.627 million remain
uncollected for a period of five to 10 years, due to lack of collection
155
strategies and the balance of the receivables per book and per
record of the Municipal Treasurer’s Office (MTO) disclosed a
discrepancy of P.345 million due to non-reconciliation of their
records regularly, thus the reported receivables in the financial
statements is unreliable;
 Fully-depreciated and serviceable properties with residual value

totaling P.481 million were not disposed; and,
 Cash advances granted for official travel totaling P.047 million

recorded under the Advances to Officers and Employees account
remain unliquidated at year-end due to lack of supporting
documents.
Plaridel Qualified  Property, Plant and Equipment (PPE) account totaling P84.654
million except Land is unreliable due to non-submission of a
complete Physical Count of Property, Plant and Equipment
(RPCPPE) due to partial validation of the existence of properties
and equipment; and,
 Unutilized Local Disaster Risk Reduction Management Fund

(LDRRMF) of Calendar Years (CYs) 2012 and 2013 remained in
the Trust Fund Books due to oversight, thus rendering the accuracy
of the Trust Liabilities - DRRMF account balance of P4.298 million
unreliable.
Polillo Qualified  Property, Plant and Equipment (PPE) accounts in the Financial
(RPCPPE) and records of the Accounting Office;
 Due to non-preparation of Inventory and Inspection Report of

Unserviceable Property (IIRUP) brought about by the absence of
necessary information thereon, the Municipality was unable to
dispose off unserviceable properties totaling P4.257 million
representing 9.51 percent of the total recorded properties; and,

could not be ascertained due to non-submission of the Report of
the Physical Count of Inventories (RPCI) since physical count was
not conducted by the Acting General Service Officer (GSO) and
non-maintenance of stock cards as well as non-maintenance of
supplies ledger cards by the Accounting Office.
Quezon Qualified  Property, Plant and Equipment (PPE) totaling P66.949 million
could not be ascertained due to the non-submission of the
Inventory Committee of the duly accomplished Report on the
non-preparation of property cards by the GSO for reconciliation
with the PPE ledger cards maintained by the Accounting Office;
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 Failure to set up Real Property Tax (RPT) and Special Education

Tax (SET) Receivables at the beginning of the year, thus, the RPT
and SET Receivables totaling P9.739 million as of December 31,
2018 were unreliable.
 Accounts Payable totalling P.217 million which have been

outstanding for two years or more were still not reverted to the
Unappropriated Surplus of the General Fund;
 Cash advance granted to the Municipal Treasurer amounting to

P.014 million was not liquidated as of year-end, resulting in the
overstatement of the receivables account and understatement of
the affected expense accounts by amount corresponding to the
unreported disbursements; and,
 Due to GSIS, Pag-IBIG and PhilHealth accounts are doubtful due

to the inability of the Accounting Office to establish the
details/breakdown of the unreconciled balances of P.015 million,
P.002 million and P.012 million, respectively.
Real Qualified  Property, Plant and Equipment (PPE) account in the Financial
Statements totaling P185.843 million as at year-end is doubtful due
to non-reconciliation of the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) and records of the
Accounting Office thus showing a material variance of P1.351
million;
 Records of the List of Tax Delinquent submitted by the Treasurer’s

Office is not reconciled with the records of the Accounting Office
thereby showing a difference of P9.029 million, thus, validity and
accuracy of the year-end balance of Real Property/Special
Education Tax Receivables totaling P35.058 million is unreliable;
 Unserviceable property, plant and equipment valued at P5.163

million, net of depreciation were still not disposed; and,
 Cash Advances totaling P1.366 million remained unliquidated as at

year end and cash advances were granted to not duly designated
disbursing and bonded officer for various programs totaling P.094
million.
Sampaloc Qualified  Land account recorded in the books at P2.579 million includes 14
parcels of land costing P2.429 million that were not supported with
Transfer Certificate of Title in the name of the Municipality and five
(5) parcels of land were registered in the name of a Municipal
official and private persons due to lack of documents vital to
support its ownership, thus, exposing the subject lots to possible
third party claims and overstating the Land account by P2.429
million;
 Three (3) motor vehicles received as donations were not recorded

in the books of accounts as of year-end due to the absence of fair
values; four other motor vehicles were not yet registered in the
157
name of the Municipality, and unserviceable motor vehicles were
not.
 Loans Receivable-Others from 21 debtors totaling P.335 million

remain uncollected for more than nine years; and,
 Cash advances granted to the Municipal Treasurer/Special

Disbursing Officer totaling P.167 million recorded under the
Advances to Special Disbursing Officer and Advances for Payroll
accounts have not been fully liquidated.
San Andres Qualified  Property, Plant and Equipment (PPE) totaling P59.512 million
could not be ascertained due to non-submission of the Municipality
of the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE), and non-maintenance of Property Cards for
each category of PPE;
 Land Improvements account balance of P.324 million is unreliable

because it is not supported with details/subsidiary ledger and was
not provided with depreciation rendering the account balance
doubtful;
 Cash advances to officers and employees totaling P1.068 million

remain unliquidated as at year-end due to non-submission of
various officers and employees of the Liquidation Reports and its
supporting document to the Office of the Municipal Accountant and
some employees are no longer connected to the Municipality;
 Due from NGAs account totaling P.392 million is of doubtful validity

and collectibility due to the inability of the Municipal Budget Officer
(MBO) to retrieve the records that would substantiate its validity;
 Cash corresponding to the total unexpended balance of

appropriation for CYs 2012 and 2013 Local Disaster Risk
Reduction and Management Fund (LDRRMF) of P3.844 million
was not reverted back to the Unappropriated Surplus of the GF to
the detriment of the other social services of the Municipality and the
unexpended balances of the appropriated funds for LDRRM for
CYs 2016, 2017, and 2018 totaling P9.488 million were not
transferred to Trust Liability-DRRMF resulting to deprivation of the
purpose of LDRRMF; and,
 Due to BIR account could not be ascertained due to unable to

adjust immediately the remittance of taxes paid by GF for Special
Education Fund (SEF) and Trust Fund (TF) totaling P1.122 million.
San Antonio Qualified  Property, Plant and Equipment (PPE) accounts totaling P149.232
million net of depreciation, representing 59.76 percent of the total
assets could not be ascertained due to a) inability of the Inventory
Committee to conduct a complete physical count of PPE; b) non-
reconciliation of the inventoried PPE against the Accounting
records; c) undervalued amount of the Municipal Building in
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connection with its renovation funded by the Department of Public
Works and Highways; and, d) disposal of unserviceable properties
has not yet been undertaken;
 Bank Reconciliation Statement cannot be ascertained due to the

existence of a) long outstanding deposit in transit totalling P.219
million probably caused by double postings in the Accounting
Office records; and b) 74 stale checks from July 2012 to June 2018
totalling P1.078 million;
 Cash Advances (CAs) totaling P1.479 million were not liquidated

at year-end; and,
 Land account of P10.492 million is unreliable due to a) 11 donated

lots not supported with Transfer Certificate of Title (TCT); and, b)
unidentified land recorded at P.061 million, thus, ownership over
the lots was not established and exposing the same to third party
claims and land disputes.
San Francisco Qualified  Property, Plant and Equipment (PPE) totaling P166.085 million
could not be ascertained due to failure of the Municipality to finish
the conduct of physical count of inventory, prepare and submit the
(RPCPPE);
 Ledger balances of Cash on Hand and Cash in Bank-Local

Currency were not tally with the cashbook, with discrepancies of
P.176 million and P25.755 million, respectively, which could not be
reconciled due to incomplete accounting records, rendering the
account balances unreliable;
 Cash Advances recorded in the books totaling P18.430 million

remain unliquidated as at year-end due to non-submission of
various Accountable Officers and employees of the Liquidation
Reports and its supporting document to the Office of the Municipal
Accountant, thus exposing the funds to possible loss or misuse;
 Due from Officers and Employees year-end balance is unreliable

due to failure of the Municipal Accountant to support it with
schedule;
 Due to National Government Agencies (NGAs) account of P3.451

million includes unaccounted beginning balance of P.746 million
which was dormant for eight years due to lack of available records
and supporting documents, thus rendering the account balance
doubtful and unreliable;
 Due from Other Funds and Due to Other Funds account of the
Municipality as of December 31, 2018 showed a difference of
P4.402 million which could not be reconciled due to incomplete
accounting records, thereby rendering their balances unreliable;
159
 Construction in Progress account balance of P15.851 million of
which P4.556 million was not transferred to the corresponding
asset account due to difficulty in retrieving the records, thus casting
doubts on the validity of the accounts; and,
 Unexpended balance of appropriation for Local Disaster Risk

Reduction Management Fund (LDRRMF) for CYs 2017 and 2018
was not transferred to the Special Trust Fund in the Trust Fund (TF)
books while the unexpended balance for CYs 2012 and 2013
totaling P3.266 million in the TF was not reverted back to the
General Fund (GF) and cash corresponding to the unexpended
balance of LDRRMF for CYs 2014, 2015, and 2016 totaling P5.835
million was not transferred to a special trust fund account, to the
detriment of the programs under the disaster risk reduction and
management of the Municipality.
San Narciso Qualified  Property, Plant and Equipment (PPE) totaling P272.990 million
could not be ascertained due to failure of the Municipality to
prepare and submit the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE), and non-maintenance of Property
Cards for each category of PPE;
 Cash Advances totaling P1.008 million remain unliquidated as at

year-end due to non-submission of various Accountable Officers
and employees of the Liquidation Reports and its supporting
document to the Office of the Municipal Accountant;
 Receivable accounts totaling P1.252 million are of doubtful validity

and collectibility due to the inability of the Municipal Treasurer and
Municipal Accountant to retrieve the records that would
substantiate its validity;
 Purchase of four carabaos in the amount of P.120 million for the

Carabao Dispersal Project of the Municipality were not recognized
and recorded in the books as Biological Assets – Breeding Stocks;
 Due to Other Funds account could not be ascertained due to

erroneous entries of transactions totaling P.296 million; and,
 Cash corresponding to the total unexpended balance of

appropriation for Calendar Years (CYs) 2012 and 2013 for Local
Disaster Risk Reduction and Management Fund (LDRRMF) of
P2.485 million was not reverted back to the Unappropriated
Surplus of the General Fund (GF).
Sariaya Qualified  Property, Plant and Equipment (PPE) accounts recorded in the
books of accounts at cost totaling P227.512 million as of year-end,
of which P52.630 million remained unaccounted, is unreliable due
to non-reconciliation between the records in the Accounting Office
and the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE), which resulted to a net discrepancy of
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P71.289 million between the schedule and RPCPPE and inclusion
of unserviceable properties;
 Parcels of land recorded in the books of accounts at market value

totaling P16.672 million were not supported with Transfer
Certificate of Title (TCT) in the name of the Municipality;
 Other Receivables totaling P.882 million remained in the books of

accounts for more than 11 years and were not requested for write-
off;

have been outstanding for 10 years was not reverted to the
Unappropriated Surplus of the General Fund (GF);
 Cash advance granted to the Municipal Mayor of P.033 million

recorded under the Advances to Officers and Employees was not
liquidated at the end of the year; and,
 Stale checks totaling P.012 million remained outstanding in the

Bank Reconciliation Statements of the Municipality at year-end.
Tagkawayan Qualified  Property, Plant and Equipment (PPE) accounts totaling P388.832
million as of year-end are unreliable due to: a) incomplete conduct
of physical count; b) unreconciled balances between the recorded
PPE and Report on the Physical Count of Property, Plant and
Equipment (RPCPPE); c) inclusion in the RPCPPE of
unidentified Other PPE, intangible assets, missing and stolen PPE
amounting to P2.937 million, P4.970 million, P.007 million and
P.009 million, respectively; and, d) non-submission of the
schedule of recorded PPE;

Receivables totaling P84.324 million are unreliable because: a) it
was not supported with a schedule of individual taxpayers from
whom the amount will be collected; b) the List of Real Property
Delinquent Taxpayers from the Municipal Treasurer’s Office shows
a total amount of P43.085 million only and it includes the
collectibles for Calendar Year (CY) 2001 and below; and c) the
amounts set up from CYs 2002 to 2010 were based on the
Assessment Rolls.
 Land account of P27.193 million as of December 31, 2018 is

unreliable due to: a) use of market value in recording the 57
donated parcels of land instead of at its fair value at the time of
acquisition; b) recording of one parcel of land with market value of
P1.225 million which is titled to the Municipality of Atimonan,
Quezon; and c) non-recording of purchased lot amounting to P.060
million;
 Forty-five stale checks totaling P.527 million remain not adjusted in

the books of accounts because the In-Charge-of-Office–Municipal
Treasurer did not return to the Accounting Office the ten
161
unclaimed/unreleased checks with its disbursement vouchers and
supporting documents; and the Municipal Accountant did not
prepare the Journal Entry Voucher to facilitate adjustment of the
35 released checks which have been long outstanding and without
request for replacement; and,
 Advances to Special Disbursing Officer is understated by P.025

million because the liquidation of cash advances for Confidential
Fund of P.125 million were recorded as P.150 million.
Tiaong Unqualified
Unisan Qualified  Property, Plant and Equipment (PPE) accounts totaling P163.570
million is unreliable as to valuation and existence due to non-
submission of the Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) and net discrepancies in cost and
accumulated depreciation of P18.665 million, and P.009 million,
respectively, between the ledger and the PPE schedule and of
P7.257 million between the ledger and the property cards of the
Municipal Treasurer’s Office (MTO);
 Fully-depreciated and unserviceable properties with residual value

totaling P.796 million were not disposed;

discrepancy of P3.210 million due to incorrect recording of receipts
of municipal counterpart or equity share in the Trust Fund books;
 Guaranty/Security Deposits Payable of P.364 million which have

been outstanding for five to 11 years were not reverted to the
Unappropriated Surplus of the General Fund, due to non-
monitoring, thus casting doubt on the reliability of the presented
account balance in the financial statements.
 Loans Receivable-Others amounting to P.280 million was not

written-off due to non-compliance with the guidelines and
procedures on the write-off of dormant receivable accounts; and,
 Biological Assets account with a book balance of P.050 million and

without supporting documents was still recorded in the books
because the authority for the derecognition was not secured, thus
the account balance was overstated by the same amount.
Rizal Qualified  Cash in Bank-Local Currency, Current Account amounting to

P3.032 billion as of year-end is unreliable as the periodic
reconciliation of Accounting and Treasury’s records was not
conducted, resulting in the net accumulated variance of P33.381
million between the two records and various reconciling items
between the Province’s books and bank records totaling P172.400
million (net) remained unadjusted as of year-end;
162
 Inventories and Property, Plant and Equipment (PPE) accounts

amounting to P216.332 million and P9.732 billion, excluding total
Construction in Progress of P307.944 million, respectively, at year-
end remained doubtful, and their existence and condition could not
be readily and fully established due to continued failure to conduct
physical count of Inventories; incomplete and unreliable report on
the physical count of fixed assets; lack and/or incomplete supply
and property records being maintained by the Accounting and
General Services Offices; non-recognition of the values of forfeited
real property; non-provision of depreciation for PPE costing P1.345
billion; incorrect account classification of various property costing
P291.475 million; transfer of local road accounts from the Registry
of Public Infrastructures to the books of accounts was valued at
replacement cost in the amount of P643.739 million instead at
depreciable replacement cost; and continuous inclusion in the
books of accounts of unserviceable and obsolete property subject
for disposal;
 Several accounts which have abnormal year-end balances in

Calendar Years 2015, 2016 and 2017 totaling P34.478 million
remained unadjusted as of December 31, 2018, and in CY 2018 in
the total amount of P4.736 million, thus, rendering those account
balances unreliable; and,
 Subsidiary Ledger (SL) balances of the Due from LGUs and Due
to LGUs accounts in all funds for 14 LGUs of the Province
aggregating P137.228 million and P24.626 million, respectively,
have discrepancies of P8.678 million and (P39.958 million) with
their reciprocal accounts in the respective books of the City and
Municipalities, thus rendering the recorded balances of Due from
LGUs and Due to LGUs accounts of the Province unreliable.
City
Antipolo City Qualified  Property, Plant and Equipment (PPE) accounts with a total book
value of P3.604 billion as of December 31, 2018 remained doubtful
and their existence and condition could not be readily and fully
established due to incomplete physical count of property, plant and
equipment and non-reconciliation of the results of the count of
property and accounting records, and deficiencies noted in the
previous years on property management were not yet corrected at
the end of the year, such as non-provision of depreciation for PPE
costing P166.273 million; continuous recognition in the books of
accounts the cost of property that were razed by the fire amounting
to P8.531 million; incomplete Property Cards (PC) being
maintained by the General Services Office and unreliable PPE
Ledger Cards (PPELC) maintained by the Accounting Office;
 Cash in Bank-Local Currency, Current Account (CIB - LCCA)

amounting to P4.258 billion was overstated by P8.698 million due
to reconciling items such as unrecorded disbursements, credit
memos and book error remained unadjusted in the City’s books of
accounts as of year-end; and,
163
 Accounts Payable totaling P460.760 million is unreliable due to

inclusion of claims without the required documents other than the
Obligation Request and various misclassified payables amounting
to P56.673 million and P47.856 million, respectively.
Municipalities
Angono Qualified  Property, Plant and Equipment (PPE) accounts with carrying
amount of P286.502 million or 44.22 percent of the total assets of
the Municipality excluding total Construction in Progress and
Intangible Assets of P24.897 million and P6.357 million,
respectively, at year-end could not be determined due to: (a)
incomplete and unreliable report; (b) incomplete
Acknowledgement Receipt for Equipment (ARE) being maintained
by the General Services Office; (c) non-preparation of the required
reports for Local Road Network; and (d) non-disclosure of total road
network system in the Notes to the Financial Statement;
 Cash in Bank account remained unreliable due to

unadjusted/unrecorded reconciling items, such as unrecorded
disbursements, debit memo and returned checks totaling P3.157
million and stale checks amounting to P.102 million; and,

Receivables as of December 31, 2018 amounting to P66.461
million and P66.461 million, respectively, are still unreliable due to
the continued failure of the Municipal Treasurer to furnish the
Municipal Accountant certified list of taxpayers as basis for the
setting-up of at the start of the year.
Baras Qualified  Property, Plant and Equipment (PPE) accounts with carrying
amount of P178.563 million remained unreliable as of year-end due
to: (a) the submitted Report on the Physical Count on Property,
Plant and Equipment (RPCPPE) was inaccurate and incomplete;
(b) P38.814 million worth of unsubstantiated PPE accounts were
not provided with depreciation and (c) Construction in Progress
balance amounting to P9.231 million under the Trust Fund (TF) has
been dormant in the books of accounts for more than four years;
 Cash in Bank balance amounting to P128.431 million could not be

ascertained due to: a) absence of periodic reconciliation between
the Accounting and Treasury Office resulting to a total difference of
P1.053 million; b) discrepancy between the balance appearing in
the accounting and bank records amounting to P.437 million; and
c) existence of various reconciling items consisting mostly of
unrecorded transactions, staled outstanding checks and
unidentified items; and,
 Due from Other Funds and Due to Other Funds remained

unreconciled with a total difference of P12.991 million at the end of
the year, despite prior years’ recommendation.
Binangonan Qualified  Property, Plant and Equipment (PPE) accounts costing P1.713
billion and with carrying value of P1.506 billion remained doubtful,
and their existence could not be readily established due to
164
(a) continued failure to conduct a complete physical inventory of
the Municipality’s property; (b) undocumented dropping of PPE
totaling P73.118 million; (c) lack and/or incomplete property
records maintained by the Municipal Accounting and the General
Services Offices; and, (d) absence of a lapsing schedule;
 Cash in Bank – Local Currency, Current Account of P480.796

million at year-end remained doubtful due to the discrepancies of
the balances of the bank accounts appearing in the Accounting,
Treasury and bank records; and unadjusted/unrecorded
reconciling items presented in the Bank Reconciliation Statements
(BRS) ;
 Road Networks account amounting to P95.944 million remained

unreliable due to (a) inability to conduct inventory of Local Road
Networks of the Municipality; (b) discrepancies noted between the
Municipal Accounting and General Services Office Records; and
(c) non-recognition of the 75 percent of prior year’s Public
Infrastructure-Roads;
 Receivables and Payables accounts totaling P8.142 million were

still carried in the Municipality’s books for more than ten years and
remained dormant due to lack of details and supporting documents
to substantiate the said balances; and,

respectively, for CY 2018 remained doubtful due to the failure of
the Municipal Treasury Office to provide duly certified list showing
the name of the taxpayers and the amount due and collectibles.
Cainta Qualified  Property, Plant and Equipment (PPE) accounts with carrying value
of P2.347 billion or 52.90 percent of the total assets of the
Municipality remained unreliable due to: (a) absence of the report
on the physical count of its fixed assets (b) continues inclusion of
the properties lost/damaged by fire in May 1992 with a net book
value of P2 billion; (c) incomplete property records to account
every item composing the PPE; and (d) non-provision for
depreciation for some of the municipal properties amounting to
P1,092 billion, which represents the unsubstantiated balances of
the PPE accounts;
 Cash in Bank account of P685.727 million was doubtful, due to: (a)
unreconciled balances in the records of the treasury and bank at
P87.493 million and P3.718 million, respectively; and (b) existence
of various unadjusted reconciling items of P8.393 million in the
books of the Municipality, thus provided inaccurate and misleading
information to the users of the financial statements;
165
 Real Property Tax and Special Education Tax Receivables of
P597.155 million and P598.227 million, respectively, are doubtful
due to a) absence of details of the accounts showing the list of the
taxpayers and the amounts collectible from them; and b) the
beginning balances of said accounts were not set up based on the
Real Property Tax Account Register for CY 2018; and,
 Accounts Payable account balance of P373.155 million includes

balances which were not supported with documents to prove valid
claims and remained unpaid for more than two years, and which
were not reverted to the Unappropriated Surplus, and the year-end
balance differs by the amount of (P149.760 million) from the
supporting schedule, thereby affecting the validity and reliability of
the said account as of December 31, 2018.
Cardona Qualified  Property, Plant and Equipment (PPE) accounts costing P186.210
million with carrying value of P146.811 million remained doubtful
and their existence could not be readily established due to (a)
continued failure to conduct a complete physical inventory of the
Municipality’s property; (b) lack and/or incomplete property records
maintained by the Municipal Accounting and Property Custodian;
and (d) absence of a lapsing schedule.
 Cash in Bank – Local Currency, Current Account of P72.236 million

at year-end remained doubtful due to the discrepancies of the
balances of the bank accounts appearing in the Accounting,
Treasury and bank records;
 Road Networks account amount to P20.250 million remained

unreliable due to (a) inability of the Municipal Engineer to provide
complete description and detailed cost segregation of road
components; (b) inability to conduct inventory of Local Road
Networks of the Municipality; and, (c) non-recognition of the 75
percent of prior year’s Public Infrastructure-Roads, contrary to the
provisions of COA Circular No. 2015-008 dated November 23,
2015; and,

Receivables for Calendar Year (CY) 2018 were not set up at the
beginning of the year due to the failure of the Municipal Treasury
Office to provide duly certified list of taxpayers and the amount due
and collectible, thus, the correctness of the recorded balance of the
RPT and SET Receivables of P11.584 million and P11.584 million,
respectively, remained doubtful.
Jalajala Qualified  Property, Plant and Equipment (PPE) accounts with carrying value
of P143.924 million at year-end remained unreliable due to: a) non-
maintenance of PPE Ledger Cards (PPELCs) and Property Cards
(PC) by the Municipal Accountant and General Services Officer
(GSO), respectively; and b) discrepancy of P21.819 million
166
between the reported balance of PPE per financial statements and
the submitted Report on the Physical Count of Property, Plant and
Equipment (RPCPPE; and,
 Cash in Bank accounts amounting to P86.963 million could not be

ascertained due to existence of various unidentified reconciling
items in different funds of the Municipality and the submitted Bank
Reconciliation Statements (BRSs) were not supported with bank
statements, debit/credit memoranda and paid checks.
Morong Qualified  Property, Plant and Equipment (PPE) accounts with carrying value
P224.283 million or 65.8 percent of the total assets of the
Municipality at year-end remained unreliable due to: (a) absence of
a report on the physical count of its PPE; (b) non-preparation of
the required reports for Local Road Network; (c) continues
inclusion of the property lost/damaged by fire in December 10,
2009 with a net book value of P3.606 million; (d) non-provision for
depreciation for some of the properties amounting to P24.210
million which represents the unsubstantiated balances of the PPE
accounts; (e) discrepancy of P.162 million between the audited
and recorded balances of Accumulated Depreciation - Road
Network due to the five percent residual value provided for the
depreciable components on the Road Network System account;
and, (f) non-disclosure of total road network system in the Notes to
the Financial Statement;
 Cash in Bank and Cash - Local Treasury accounts in the

accounting books of the Municipality amounting P89.721 million
and P4.680 million, respectively, was doubtful due to absence of
periodic reconciliation between the Accounting and Treasury
records resulting to a total difference of P31.310 million and (P.012
million), correspondingly;
 Disbursement and collection reports and their supporting

documents were not submitted to the Auditor within the prescribed
period and 267 Journal Entry Vouchers (JEV) and its supporting
documents amounting to P139.309 million were not submitted to
the Audit Team as of report date;
 CY 2017 Disbursement Vouchers (DVs) and Liquidation Reports

aggregating P4.563 million and P.166 million, respectively, were
still not submitted to the Audit Team; and,
 Unable to set up again the Real Property Tax (RPT) and Special
Education Tax (SET) Receivables at the beginning of the year with
both zero balances.
Pililla Qualified  Property, Plant and Equipment (PPE) accounts with carrying
amount of P159.865 million remained unreliable as of year-end due
to: (a) deficiencies in the submitted Report on the Physical Count
of Property, Plant and Equipment (RPCPPE) of the Municipality;
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(b) non-submission of a detailed PPE lapsing schedule which will
validate the correctness of the computed depreciation for the
year; and, (c) incomplete property records maintained by the
Municipal Accounting Office and the General Services Office;
 Disbursement Vouchers and their supporting documents

amounting to P78.738 million, P16.803 million, and P33.522
million for General Fund (GF), Special Education Fund (SEF) and
Trust Fund (TF), respectively, or 57.76 percent of all check
disbursements from all funds were not submitted to the Audit
Team and the submission of disbursement, collection and deposit
vouchers with their respective journals, and financial reports for
CY 2018 was not made within the reglementary period, thus
causing delay in the review and verification of the transactions of
the Municipality;

the Accounting and Treasury Offices resulting in a total difference
of P18.284 million; b) discrepancy between the balances
appearing in the accounting and bank records amounting to
P1.496 million; and, c) unaccounted prior years’ book reconciling
item in the Trust Fund amounting to P.188 million that was
improperly closed to Other Payables account without pertinent
documents to support the same was still not reverted back to
original account; and,

Receivables, both amounting to P24.279 million remained doubtful
due to inability of the Municipal Accounting Office to set-up the
amount collectible for both accounts at the beginning of the year
and to maintain a complete set of Subsidiary Ledger (SL) of
taxpayers per Real Property Unit (RPU).
Rodriguez Qualified  Property, Plant and Equipment (PPE) accounts of P841.376 million
or 51.06 percent of the total assets of the Municipality are doubtful
due to: (a) incomplete physical inventory of the Municipality’s
property; (b) non-recognition of two units second hand heavy
equipment totaling P2.800 million in the Municipality’s books; (c)
net under provision for depreciation by P1.025 million on property
amounting to at least P25.988 million; (d) difference of P6.217
million between the balances reflected in the lapsing schedule and
Report of Physical Count on Property, Plant and Equipment
(RPCPPE); (e) inclusion of various unserviceable and obsolete
property worth P2.751; and, (f) incomplete property records being
maintained by the Accounting and General Services Offices;
 Cash in Bank – Local Currency, Current Account and Cash - Local

Treasury accounts amounting to P678.950 million and P29.455
million, respectively could not be ascertained due to (a) absence of
168
periodic reconciliation between the accounting and treasury
records; and (b) inability of the Municipal Accounting Office to make
the necessary adjustments for all valid reconciling items in the
books of the Municipality;

Receivables and its reciprocal accounts at the beginning of the year
were again based on estimates instead of the certified list showing
the name of the taxpayers and the corresponding amount of taxes
due and collectible, thus, rendering a zero year-end balances of the
RPT/SET Receivables unreliable and the actual tax due and the
amount collectible from taxpayers were not established and the
Acting Municipal Treasurer may no longer pursue the collection of
actual tax due to the Municipality;
 Cash advances of P7.418 million were allowed to remained

unliquidated as of year-end; and,
 Accounts Payables for CYs 2006 to 2013 totaling P5.625 million

were still recorded in the books of accounts despite of the absence
of complete supporting documents.
San Mateo Qualified  Property, Plant and Equipment (PPE) accounts with a carrying
amount of P631.570 million of 41.96 percent of the total assets is
doubtful and their existence and condition could not be readily and
fully established due to: (a) insufficient property records and
inability of the Inventory Committee to conduct a complete physical
inventory of the Municipality’s property for the year; (b) non-
provision of depreciation or impairment for property costing
P158.447 million; (c) absence of complete and detailed lapsing
schedule; and, (d) inclusion of obsolete and unserviceable items
amounting to P.841 million;
 Cash in Bank and Cash Local Treasury accounts amounting to

ascertained due to absence of periodic reconciliation between the
accounting and treasury records as well as accounting and bank
records, and failure of the Municipal Accounting Office to make the
necessary adjustments for all valid reconciling items in the
Municipality’s book;

respectively, were doubtful as to their accuracy, validity and
reliability due to: (a) non-preparation of subsidiary ledgers (SLs) to
support the recorded balances; (b) setting up of the Receivable
accounts at the beginning of the year were based on estimates
provided by the Treasury Office instead of the certified list showing
the name of the taxpayers and the corresponding amount of taxes
169
due and collectible; and, (c) erroneous entries made on the setting
up of RPT and SET Receivables and their corresponding liability
accounts; and,
 Payment for the procurement of various medical, dental and

laboratory supplies and drugs and medicines totaling P3.720
million and P17.190 million, respectively, was recorded as outright
expense.
Tanay Qualified  Property, Plant and Equipment (PPE) accounts with carrying
amount of P760.136 million excluding Construction in Progress
(CIP) of P88.583 million at year-end remained unreliable due to: a)
discrepancy of P15.400 million between the accounting records
and the submitted Report on the Physical Count of Property, Plant
and Equipment (RPCPPE); b) inclusion of demolished buildings in
the Municipality’s books of accounts; c) completed Water Supply
Systems project in the Trust Fund (TF) was not transferred to
General Fund (GF) books; and, d) inclusion of abnormal negative
balance in Markets account; and,

the Accounting and Treasury Offices resulting in a total difference
of P124.006 million; b) discrepancy between the balance appearing
in the accounting and bank records amounting to (P4.412 million);
and c) various reconciling items consisting mostly of unrecorded
transactions, staled outstanding checks and unidentified items
remained unadjusted in the Municipality’s books.
Taytay Qualified  Property, Plant and Equipment (PPE) accounts with carrying
the Municipality excluding total Construction in Progress of
P129.635 million, at year-end could not be determined due to: (a)
incomplete and unreliable report; (b) incomplete PPE Ledger
Cards, Property Cards and Acknowledgement Receipt for
Equipment (ARE) being maintained by the Accounting and General
Services Office, respectively; c) inclusion of cost of public market
of P17.903 million destroyed by fire in the Municipality’s books of
accounts; (d) inaccurate report prepared by the General Service
Office for Local Road Network; and, (e) non-disclosure of total road
network system in the Notes to the Financial Statement.
 Cash in Bank account remained unreliable due to inability of the

OIC-Municipal Accountant to ascertain the validity of book
reconciling items identified in previous years and stale checks
amounting to P3.449 million; and P.130 million, respectively;

Receivables as of December 31, 2018 amounting to P.668 million
and P.668 million, respectively, are doubtful due to: a) continued
170
inability of the OIC-Municipal Accountant to maintain subsidiary
ledger of taxpayers per Real Property Unit (RPU); b) inclusion of
total delinquent RPT collectibles for Calendar Year 2018; and, c)
deduction of uncollectible real property tax for restricted properties;
and,
 Other Receivables account of P17.858 million at year-end is

unreliable due to the adjustments made on the reconciling items in
the Bank Reconciliation Statements (BRSs) for various unrecorded
disbursements incurred in the previous years without details
Teresa Qualified  Property, Plant and Equipment (PPE) accounts with carrying
the Municipality excluding total Construction in Progress of P1.166
million at year-end could not be determined due to: (a) incomplete
and unreliable Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) and non-reconciliation of the results of the
count of property and accounting records; (b) incomplete PPE
Ledger Cards (PPELCs), Property Cards (PCs) and
Acknowledgement Receipt for Equipment (ARE) being maintained
the Accounting and General Services Offices; (c) non-preparation
of required reports for Local Road Network; and, (d) non-disclosure
of total road network system in the Notes to Financial Statements,
contrary to Item VI of COA Circular No. 2015-008 dated November
25, 2015;
 Cash in Bank – Local Currency, Current Account of P174.224

million at year-end remained doubtful due to the discrepancies in
the bank accounts’ balances in the Accounting and Treasury
records; and continued inability of the Accounting Office to identify
the details of the reconciling items per book amounting to P.261
million.
REGION IV-B MIMAROPA
Marinduque Qualified  Inventory accounts as of year-end were unreliable attributed to (a)

inadequate records and failure to conduct actual physical count of
inventories to substantiate the balance of P1.200 million of
Agricultural and Marine Supplies for Distribution account which
resulted in a net variance of P27.788 million between the books of
accounts and the Report on the Physical Count of Inventories
(RPCI); and (b) incorrect classification and recording of inventories
for the Drugs and Medicines account and Medical, Dental and
Laboratory Supplies account amounting to P11.252 million and
P14.376 million, respectively, due to non-segregation of inventory
held for sale, held for distribution, held for manufacturing and held
for consumption; and (c) purchases of agricultural supplies totaling
to P2.890 million were directly recorded as Agricultural and Marine
Supplies Expenses instead of Agricultural and Marine Supplies
Inventory which understated the inventory accounts and overstated
the related expense accounts;
 Construction-in-Progress (CIP) account amounting to P467.796

million includes the cost of awarded contracts which were not yet
171
 started in CY 2018 totaling P189.614 million which were not
yetstarted as of December 31, 2018, and completed projects with
an aggregate amount of P133.825 million, hence, the CIP and
Other Provisions account were overstated by P323.438 million and
P189.614 million, respectively, and understated Building, Hospital
and Health Centers, Roads Networks and Water Supply Systems
accounts by P133.825 million as of year-end;
 The total cost of 14 air conditioning units and their installation of

P2.225 million at the DRRM Training and Convention Center was
recorded under Buildings and Structures account instead of Office
Equipment account; and,
 Due from Local Government Units (LGUs) account of the Provincial

Government with aggregate total of P5.290 million differ by P2.242
million with that of reciprocal Due to LGU account of five (5)
municipalities and 48 barangays with balances totaling P3.048
million as of year-end.
Boac Qualified  Failure to recognize allowance for impairment of receivables as

prescribed under paragraph 67 of Philippine Public Sector
Accounting Standards (PPSAS) 29 on impairment and
uncollectibility of financial assets despite the presence of dormant
receivables amounting to P6.442 million which were non-moving
for more than 10 years and where settlement could no longer be
ascertained;
 Property, Plant and Equipment accounts valued at P127.086

million exclusive of the Construction in Progress accounts as of
December 31, 2018 cannot be relied upon due to (a) unreconciled
difference of P68.228 million between the accounting records and
inventory report; and,
 Construction in Progress (CIP) Infrastructure Assets and Building

and Other Structures under the General Fund includes completed
projects amounting to P4.102 million thereby overstating the
balances of the CIP accounts, understating the balances of the
related asset accounts and the corresponding depreciation on said
assets were not provided.
Buenavista Qualified  Ten bank accounts with an aggregate amount of P73.222 million
could not be ascertained due to continuous failure of the Municipal
Accountant to prepare the required Bank Reconciliation
Statements (BRS); and,
 Property, Plant and Equipment (PPE) account registered a total

discrepancy of P8.193 million when compared to the Report on the
Physical Count of Property, Plant and Equipment (RPCPPE) due
to failure of the Municipal Accountant and Municipal General
Services Officer to reconcile their records and unserviceable and
non-existent properties amounting to P7.325 millionand P1.742
million, respectively, still form part of the PPE balance.
172
Gasan Qualified  Cash in Bank – Local Currency, Current Account amounting to
P113.039 million was overstated by P.030 million representing the
bank alance of the combo account previously maintained with the
Philippine National Bank – Boac Branch which was unfounded and
already closed as of July 30, 2018; and,
 Property, Plant and Equipment (PPE) account registered a total

discrepancy of P8.193 million when compared to the Report on the
to failure of the Municipal Accountant and Municipal General
Services Officer to reconcile their records and unserviceable and
non-existent properties amounting to P7.325 million and P1.742
million, respectively.
Mogpog Qualified  Unable to reconcile the significant difference of P116.353 million

between their records due to non-completion of the physical
inventory taking thus, affecting the fair presentation of the Property,
Plant and Equipment account balances in the financial statements
 Property, Plant and Equipment (PPE) under the General Fund,

Special Education Fund and Trust Fund with a carrying value of
P10.244 million were not provided with the prescribed depreciation;
and,
 Land account of P8.103 million as of December 31, 2018 was

unreliable due to inclusion of 45 parcels of land valued at P4.796
million which were still not covered by Torrens Title/Transfer of
Certificate of Title (TCT).
Santa Cruz Qualified  Cash in Bank account could not be ascertained due to non-
cancellation of stale checks totaling P.054 million which have been
outstanding for more than six months and not effecting in the books
the reconciling items of Cash in Bank – Local Currency Current
Account (LCCA) amounting to P.142 million;
 Property Plant and Equipment (PPE) at year-end amounting to

P237.561 million was not fully established due to (a) inclusion of
unserviceable PPEs with book value amounting to P23.965 million
and (b) non-submission of a complete Report on the Physical
Count of PPE resulting to a discrepancy of P20.948, million, as well
as non-recognition of depreciation for PPEs valued at P.589 million
under the Special Education Fund
 Construction in Progress (CIP) account amounting to P35.009

million cannot be ascertained due to inclusion of the total contract
cost of infrastructure projects unbilled and unfinished as of year-
end; and,
 Loans Payable account amounting to P.144 million remained

dormant for more than 10 years.
173
Torrijos Qualified  Real Property Tax (RPT) Receivables and Special Education Tax
(SET) Receivables amounting to P1.668 million and P2.323 million,
respectively, or a total of P3.991 million could not be ascertained
due to the unreconciled difference of P21.620 million between the
records of the Accounting and Treasurer’s Office;
 Procurement of various supplies and materials with carrying

amount of P6.463 million were directly charged to expense
accounts upon receipt from dealers instead of recording first as
inventory accounts prior to distribution to requesting officials; and,
 Property, Plant and Equipment (PPE) account year-end balances

in the Financial Statements and the Report on the Physical Count
of Property, Plant and Equipment (RPCPPE) showed a
discrepancy amounting to P1.034 million representing the carrying
amount of the unserviceable properties.
Occidental Qualified  Property and accounting records for Land Improvement accounts
Mindoro were not reconciled showing a net difference of P89.121 million
between the two records rendering the Land Improvements
account balance of P182.631 million (net of depreciation) doubtful;
and
 Cash advances totaling P48.812 million remained unliquidated as

of the year-end and additional cash advances were granted despite
non-settlement of previous cash advances.
Municipalities
Abra de Ilog Qualified  Inventories and Property, Plant and Equipment accounts
could not be ascertained due to failure of the Municipality to
conduct physical inventory and submit the reports thereon, and
reconciliation with the general ledger was not conducted.
Calintaan Qualified  Failure to recognize in the books of accounts at least 75% of public
infrastructures completed in previous years;
 Property, Plant and Equipment (PPE) account reflected in the

Statement of Financial Position was overstated by P1.105 million
considering that the stolen/carnapped vehicle was still recorded in
the books as of December 31, 2018;
 Procurement of supplies and inventories were directly charged to

the related expense accounts thus, there was no inventory
accounts recorded in the Statement of Financial Position,
consequently overstating the expense accounts as of
December 31, 2018; and
174
 Advances for Operating Expenses and Due from Officers and

Employees accounts were understated by P3.052 million and
P1.604 million, respectively, due to the following:
a) Cash totaling P3.052 million out of the cash advances of

the Municipal Treasurer refunded in January and
February 2019 were reflected in the books as liquidations
as of December 31, 2018 thereby, understating the
Advances for Operating Expenses account;
b) Rrequest for write-off for cash advances amounting to

P.365 million was already removed from the books of
accounts as of year-end even though said request was
granted only in January 4, 2019 per COA Regional Office
IV-B Decision No. 2019-02 hence, understating the Due
from Officers and Employees account; and,
c) One unit stolen/carnapped service vehicle with

acquisition cost of P1.238 million was not recorded in the
books of accounts under the accountability of the former
Municipal Mayor after the request for relief from property
accountability has been denied under COA Decision No.
2017-024 dated February 16, 2017 thereby, understating
the Due from Officers and Employees account at year-
end.service.
Looc Unqualified
Lubang Unqualified
Magsaysay Qualified  Balances of six (6) financial statement accounts (Cash-Local

Treasury, Cash in Bank, Accounts Payable, Loans Payable-
Domestic, Due to and Due from Other Funds) totaling P81.927
million were not properly and accurately presented in the
Statement of Financial Position as of December 31, 2018 due to
errors in recording, misclassification of account, unadjusted
reconciling items and unreconciled balances of reciprocal
accounts;
 Existence, valuation and rights over the Property, Plant and

Equipment (PPE) of the Municipality with carrying amount of
P141.638 million as of December 31, 2018 was uncertain due to
the following:
a) Land costing P.300 million were not covered with a

Certificate of Title under the name of the Municipality;
175
b) Land acquired at no cost was valued in the books at P1.494
million but reported at its current assessed value of P2.833
million in the Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) or a difference of P1.339 million;
c) Unserviceable PPEs totaling P23.142 million were still not

yet disposed or tested for impairment despite the evidence of
physical damage and the cessation of service provided by the
assets;
d) Two motor vehicles totaling P.970 million per RPCPPE

were not found during the ocular visit; and,
e) PPEs donated to various Barangays costing P.262 million

were still recognized in the books thereby, overstating the
PPE year-end balance in the books. and,
 Cash advances for operating expenses and travel purposes

totaling P2.546 million under the Due from Officers and Employees
account were not reclassified to a proper Receivable account.
Mamburao Qualified  PPE with a net book value of P116.503 million is unreliable due to
failure to complete the conduct of physical inventory of PPE;
 Cash in Bank - LCCA balance totaling P94.673 million was

overstated by P14.330 million;
 Inventory account balances totaling P2.216 million were unreliable

due to the failure to submit the required PRCI and non-existing
items were still carried in the books.
Paluan Qualified  Property, Plant and Equipment account balances totaling P266.870
million do not reconcile with the Report on the Physical Count of
Property, Plant and Equipment totaling P35.790 million, thereby
showing a difference of P231.080 million;
 Thirteen Statement of Financial Position accounts totaling P91.956

million were not fully disclosed in the Notes to Financial Statements
as these were not supported with complete Subsidiary Ledgers,
thus showed a difference of P70.538 million rendering the account
balances unreliable; and,
 Failure to reconcile records with the local creditors regularly thus,

Loans Payable - Domestic outstanding balance in the books as of
December 31, 2018 amounting to P21.960 million was understated
by P3.192 million.
Rizal Qualified  Inventories and Property, Plant and Equipment (PPE) accounts
amounting to P1.053 million and P149.695 million, at gross
amounts, excluding the Construction in Progress account,
respectively, could not be ascertained due to the: a) Failure of the
176
Inventory Committee to conduct complete physical inventory on all
supplies and PPE of the Municipality; b) PPE ledger balances that
did not reconcile with the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) showing a material discrepancy
of P76.400 million; c) Unserviceable vehicles totaling P18.396
million were not yet disposed and were not tested for impairment
despite the evidence of physical damage and the cessation of
service provided by the assets; and, d) The list/schedule of PPEs
submitted by the Municipal Accountant were also not reconciled
with the PPE ledger balances with discrepancies totaling P55.252
million.
Sablayan Qualified  Property, Plant and Equipment totaling P956.904 million (gross)
was not reconciled with the inventory report with a balance of
P895.214 million, showing a discrepancy of P61.690 million;
 Inventory accounts valued in the books at P40.994 million was also

not reconciled with the inventory report totaling P10.139 million,
showing a difference of P30.855 million; and,
 Cash in Bank-Local Currency, Current Account balance totaling

P101.146 million was understated by P7.892 million since valid
book reconciling items remained unadjusted in the books of
accounts.
San Jose Qualified  Property, Plant and Equipment with carrying value of P639.097
million, net of the Construction-in-Progress accounts, as of
December 31, 2018 could not be ascertained due to the: (a) failure
of the Inventory Committee to conduct complete physical count on
all PPEs of the Municipality; and (b) unreconciled balances
between the reported amounts in the Statement of Financial
Position and the Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) resulting in a material difference of
P424.350 million;
 Long outstanding cash advances totaling P19.012 million remained

unliquidated as of year-end; and,
 Trust Liabilities - Disaster Risk Reduction and Management

account balance was understated due to the failure of the Municipal
Accountant to transfer and record the unexpended balances of the
CY 2018 Local Disaster Risk Reduction and Management Fund
Santa Cruz Qualified  Inventory Committee failed to complete the conduct of the physical
inventory of Property, Plant and Equipment valued in the books of
account at P316.108 million as of December 31, 2018;
 Cash in Bank-Local Currency, Current Account balance totaling

P121.602 million as of December 31, 2018 was overstated by
177
P9.241 million because of erroneous recording of receipt of loan
and other valid book reconciling items remained unadjusted in the
books of accounts; and,
 Failure to reconcile records with the local creditors regularly thus,

Loans Payable - Domestic outstanding balance in the books of
accounts as of December 31, 2018 amounting to P170.649 million
was overstated by P7.740 million.
Oriental Mindoro Qualified The accuracy and reliability of the balances of the following
accounts could not be ascertained:
 Cash-in-Bank-Local Currency, Current Account (CIB-LCCA)

account totalling P1.050 billion includes (a) identified book
reconciling items amounting to P33.875 million in the Bank
Reconciliation Statements (BRS) which remained unadjusted in the
books of accounts as of year-end; and (b) book and bank
reconciling items of P1.425 million aged three to 16 years and
staled checks totalling P.319 million which remained unadjusted as
of year-end;
 Loans Receivables-Others account totalling P11.737 million (a) the

accuracy of which could not be fully determined due non-
reconciliation of the Accounting and the implementing offices’
records relative thereto; (b) was understated by P.942 million since
the collected monthly loan amortizations were recorded under
Other Payables account instead of Loans Receivables-Others
account; and (c) includes accounts with negative balances totalling
P.122 million as shown in the Statement of Loans Receivables as
of December 31, 2018;
 Due from Non-Governmental Organizations (NGOs) and/or

People’s Organizations (POs) account was understated by P1.500
million due to the recording of the grants by said amount under
Donations or Subsidy to Other Local Government Units (LGUS)
account instead of to the former account;
 Property, Plant and Equipment (PPE) accounts with a net carrying

value of P3.810 billion under the General, Special Education, and
Trust Funds (a) were not supported with complete physical
inventory and existence of discrepancy of P4.128 billion between
the accounting and property records; and (b) include negative
carrying value of Land Improvements account of P.525 million due
to erroneous recording of depreciation; and,
 Due to NGAs account balance of P773.834 million (a) includes

dormant accounts of P22.124 million aged four to ten years; and
(b) was understated by P8.183 million attributed to the inadvertent
recording of professional fees of doctors in the Due to NGAs
account instead of Other Payables account by same amount.
178
City
Calapan City Qualified The accuracy and reliability of the balances of the following
 Due from NGOs/POs account amounting to P.200 million was

understated due to recording of the grants by the said amount
under Donations account instead of to the former account;
 Property, Plant and Equipment (PPE) accounts with a net carrying

value of P676.680 million under the General and Special Education
Funds were unreliable due to substantial discrepancy of P299.450
million between the accounting records and inventory reports
attributed to (a) unaccounted beginning balance of P81.385 million;
(b) transfer of completed projects from Trust Fund (TF) to GF
totaling P24.133 million were not properly identified and recorded
in lump-sum amount; and (c) incomplete physical count of road
networks;
 Agricultural and Forestry Equipment and Donation accounts was

understated and overstated, respectively, both by P2.988 million
due to the improper recording of the acquisition of agricultural
machineries; and,
 Other Receivables and Other Income accounts were understated

both by P.239 million due to failure to set-up receivables to account
the annual payment to be rendered by Calapan Federation of
Farmers Association (CALFFA) for the required equity in
agricultural equipment for the Farm Mechanization Project.
Municipalities
Baco Qualified  The accuracy and correctness of the account balances of the
following accounts could not be ascertained:
 Property, Plant and Equipment (PPE) accounts with reported
net carrying value of P180.801 million as of December 31,
2018 due to (a) incomplete physical inventory and non-
reconciliation of the results thereof with the accounting and
property records in conflict with Section 124 of the Manual on
the NGAS for LGUs, Volume I and Section C.3, Chapter V of
the Manual on Property Custodianship; (b) non-maintenance
by the Municipal Treasurer of Property Cards (PCs) for
properties acquired in CY 2017 and prior years which was
inconsistent with Section 114 of the Manual on the NGAS for
LGUs, Volume I; (c) unreconciled PPE records and reports
with a variance of P5.101 million disregarding Section 491 of
the Government Accounting and Auditing Manual (GAAM); (d)
non-provision of depreciation to various properties totaling
P10.664 million in contrast to COA Circular No. 2003-007
179
dated December 11, 2003; and (e) undisposed unserviceable
properties totaling P1.617 million which was not in
accordance with COA Circular No. 92-386 dated October 20,
1992;
 Cash in Bank-Local Currency, Current Account (CIB-LCCA)

totaling P102.398 million due to (i) non-adjustment of book
reconciling items and stale checks totaling P.922 million and
P3,600.00, respectively; and (ii) bank reconciling item
amounting to P.073 million which remained reflected in the
BRS since 2017. Moreover, the monthly BRS and their
supporting documents were not submitted within the
prescribed period in violation of COA Circular No. 96-011
dated October 2, 1996; and
 The Municipality still failed to recognize accrued income from

delinquent stall and lot occupants for CY 2018 totaling P2.375
million thus, understating the accounts Operating Lease
Receivable (1-03-02-010), Receipts from Market Operations
(4-02-02-150) and Fines and Penalties-Business Income
(4-02-02-980) accounts for CY 2018.
Bansud Modified/ The balances of the following accounts as of December 31, 2018
Qualified were unreliable:
 Cash in Bank-Local Currency, Current Account of P137.720 million

due to (a) unreconciled balances totaling P.449 million between the
accounting and treasury records; (b) inclusion of non-existing
account; (c) net reconciling items totaling P.535 million which
remained unadjusted in the accounting records; and (d) stale
checks remained unadjusted at year-end;
 Property, Plant and Equipment accounts reported at a net carrying

value of P79.031 million due to (a) material difference of P81.748
million between the inventory reports and accounting records as a
result of incomplete inventory and documentation of properties,
and unidentified beginning balances of P70.915 million in property
records and P35.406 million in property ledgers; (b) failure to
establish and transfer the completed infrastructure projects from
Government Equity account to appropriate Infrastructure Assets
accounts due to non-consolidation of the Registry of Public
Infrastructure (RPI); and (c) non-preparation of a complete Report
on the Physical Count of Local Road Network; and,
 Loans Payable-Domestic account with outstanding balance of

P9.720 million was understated by P.105 million due to erroneous
recording of the cost of heavy equipment purchased out of the loan
instead of the approved loan from the bank.
180
Bongabong Qualified  Property, Plant and Equipment (PPE) account balance of P377.397
(a) unreconciled balance of P22.391million between accounting
records and Report of Physical Count of Property Plant and
Equipment (RPCPPE); (b) unserviceable properties amounting to
P6.399 million remained undisposed and exposed to further
deterioration; (c) inclusion of expendable and semi-expendable
supplies or property totaling P1.833 million; and (d) misclassified
recording of procured/constructed property out of local funds and
fund transfers; and,
 10 parcels of land remained untitled, thus exposing the properties

to risk of third-party claims which could be disadvantageous to the
government in terms of proceedings cost and risk of loss of
property due to repossession by the registered owners or their heirs
and possibility of squatting and unlawful occupants.
Bulalacao Qualified  The accuracy and reliability of the balances of the following
 Property, Plant and Equipment (PPE) account balance of P193.572

million as of December 31, 2018 due to (a) unreconciled balance
of P75.472 million between Municipal Accounting Office (MAO)
Equipment (RPCPPE) submitted by the ICO-Municipal Treasurer,
(b) failure of the Municipal Treasurer’s Office (MTO) to maintain the
required property records (c) inclusion of expendable and semi-
expendable supplies or property to PPE account, (d) misclassified
recording of transactions, (e) undisposed unserviceable properties
amounting to P1.972 million, and (f) non-preparation of Report on
the Physical count of Local Road Network (RPCLRN); and,
 Cash in Bank – Local Currency Current Account (LCCA) totaling

P55.420 million as of December 31, 2018 due to: (a) non-
reconciliation of the Cash in-Bank ledger balances with the bank
and treasury records, and (b) non-adjustment and exclusion of net
reconciling items in the submitted Bank Reconciliation Statements
totaling P.050 million; and,
 Nine (9) stale checks totaling P.094 million were still included in the
list of outstanding checks in the General Fund.
Gloria Unqualified
Mansalay Qualified The accuracy and reliability of the balances of the following

of P407.829 million between Municipal Accounting Office (MAO)
181
Equipment (RPCPPE) submitted by the Municipal Treasurer; (b)
failure of the Municipal Treasurer’s Office (MTO) to maintain the
required property records; (c) inclusion of expendable and semi-
expendable supplies or property to PPE account; (d) misclassified
recording of transactions; (e) unserviceable properties amounting
to P1.651 million remained undisposed and exposed to further
detoriation; and (f) non-preparation of Report on the Physical count
of Local Road Network (RPCLRN); and,
 Cash in Bank – Local Currency Current Account (LCCA) and Local

Currency, Saving Account (LCSA) accounts totaling P130.818
million as of December 31, 2018 due to (a) non-reconciliation of the
Cash in Bank per ledger balances, and bank and treasury records;
(b) non-adjustments of the net reconciling items as of December
31, 2018 totaling P.442 million in the cashbooks and accounting
records; (c) net reconciling items (exclusive of outstanding checks)
totaling P1.450 million that needs further analysis and
reconciliation with the depository bank; and (d) 10 stale checks
totaling P.066 million were still included in the list of outstanding
checks in the General and Trust Funds.
Naujan Qualified  Property, Plant and Equipment (PPE) account balance of P478.69
million could not be ascertained due to difference of P321.620
million between Inventory Reports and Accounting records as a
result of incomplete inventory and documentation of the properties
and non-preparation and maintenance of the complete Report on
the Physical Count of Local Road Network.
Pinamalayan Qualified  The validity and accuracy of the following accounts could not be
ascertained:

million as of December 31, 2018 due to discrepancy of P4.928
million between Accounting Office and General Services Office
(GSO) records caused by non-reconciliation of both Office of the
Report on the Physical Count of PPE (RPCPPE) for calendar year
(CY) 2018 after the conduct of physical inventory of property with
that of the accounting records due to failure of the said offices to
maintain the required property records; inclusion of expendable
and semi-expendable supplies or property totaling P1.420 million
in the PPE account; and non-recording to appropriate PPE account
the acquired/constructed property out of Trust Fund totaling
P20.980 million; unserviceable properties amounting to P1.703
million remained undisposed and exposed to further deterioration;
and non-preparation of Report on the Physical count of Local Road
Network (RPCLRN); and,
 Cash in Bank - Local Currency Current Account (LCCA) and Local

Currency, Saving Account (LCSA) totalling P293.122 million as of
December 31, 2018 due to non reconciliation of the cash in-bank
182
ledger balances with the bank and treasury records, non-
adjustments of the net reconciling items as of December 31, 2018
totalling P3.120 million in the cashbooks and accounting records,
and inclusion of 31 stale checks totalling P1.478 million.
Pola Qualified  Cash in Bank-Local Currency, Current Account of P146.114 million

could not be ascertained due to the continuous failure of the
Municipal Accounting Office to prepare Bank Reconciliation
Statements; and,
 Property, Plant and Equipment accounts of P134.262 million could

not be established due to the (a) non-undertaking of annual
physical count of properties and non-preparation of Report on the
Physical Count of Property, Plant and Equipment, (b) non-
maintenance of property/ledger cards, (c) inability to transfer prior
years’ completed infrastructure projects from Government Equity
account to their respective Property accounts due to non-
maintenance of Registry of Public Infrastructure, and (d) non-
preparation and maintenance of the complete Report on the
Physical Count of Local Road Network.
Puerto Galera Qualified The existence, completeness, accuracy and reliability of the
following accounts could not be ascertained:

million as of December 31, 2018 due to (a) failure to properly
accomplish the Report on Physical Count of Property, Plant and
Equipment (RPCPPE), (b) non-preparation of Property Cards, and
(c) non-preparation of Report on the Physical Count of Local Road
Network (RPCLRN) and other required reports for Road Network
for CYs 2016 and below; and,
 Cash in Bank (CIB)-Local Currency, Current Account of P141.252

million 0 as at December 31, 2018 due to non-adjustment of
reconciling items totaling P.219 million and stale checks totaling
P.241 million.
Roxas Qualified The accuracy and correctness of the balances of the following
 Cash in Bank – Local Currency Current Account (LCCA) and Local

Currency, Saving Account (LCSA) in the accounting books of the
Municipal Government of Roxas totaling P91.043 million as of
December 31, 2018 due to (a) non-submission of Bank
Reconciliation Statements (BRS); (b) non-reconciliation of the
Cash in-Bank ledger balances with the bank and treasury records;
(c) non-maintenance of Subsidiary Ledgers (SL) for each bank
accounts and cashbooks for two bank accounts; and (d) non-
recording of one bank account with balance of P.080 million in the
Cash in Bank account.
183

of P147.689 million between the records of the Municipal
Accounting Office and Report of Physical Count of Property Plant
and Equipment (RPCPPE) submitted by the General Service
Officer (GSO)–Designate; (b) failure of the GSO-Designate to
maintain the required property records; (c) inclusion of expendable
and semi-expendable supplies or property to PPE accounts; (d)
misclassified recording of transactions; (e) unserviceable
properties remained undisposed and exposed to further
deterioration; and (f) failure to prepare the Report on the Physical
count of Local Road Network (RPCLRN); and,
 Eleven (11) parcels of land remained untitled in the name of the

Municipality, thus exposing the properties to risk of third party
claims.
San Teodoro Qualified The accuracy and correctness of the balances of the following
 Cash in Bank-Local Currency Current Account (CIB-LCCA) totaling

P51.582 million due to the non-preparation or delayed submission
of the bank reconciliation statement (BRS) thus, prevented the
Audit Team to establish the nature and validity of the net reconciling
amount totaling P1.059 million;
 Property, Plant and Equipment (PPE) accounts with reported net

carrying value of P91.032 million as of December 31, 2018 due to
the (a) incomplete physical inventory and non-reconciliation of the
results thereof with the accounting and property records; (b) non-
maintenance of property cards for properties acquired in CY 2012
and prior years and of PPE Ledger Cards for properties acquired
and booked in CY 2017 and prior years by the Municipal Treasurer
and Municipal Accountant, respectively; (c) unreconciled PPE
records and reports amounting to P4.062 million; (d) non-
recognition of Public Infrastructure accounts in the books of
accounts totaling P.901 million; and, (e) negative (abnormal)
carrying value of Communication Equipment account in the
General Fund books of accounts amounting to P.292 million;
 Loans Payable-Domestic (2-01-02-040) account amounting to

P2.200 million due to the (a) failure of the Municipal Accountant to
(i) record in the books of accounts the loan releases for Subaan
River Protection and Solid Waste Management Facility with
Equipment totaling P11.084 million; and (ii) reverse the erroneous
adjustments made in the account totaling P3.715 million; (b)
recognition of loans payable in the books amounting to P2.200
million even without actual release and receipt of fund; and
184
(c) interest payments totaling P9.810 million were deducted from
the principal balance of the loan, erroneously debited the Due from
Other Funds (1-03-04-050) account to set-up loans payable for CY
2018 amounting to P4.746 million. and subsidiary ledger per loan
account to keep track of releases, principal and interest payments
was still not maintained; and,
 Due from/Due to Other Funds accounts in the CY 2018 General

and Trust Fund books with a discrepancy of P5.120 million due to
erroneous entries of the loans set-up, BEMONC collections, and
health employees payroll and unidentified transactions in the Trust
Fund-Proper, thus, compromising the validity and reliability of the
recorded transactions and adversely affecting the account
balances and other related accounts.
Socorro Unqualified
Victoria Qualified  Property, Plant and Equipment (PPE) account balance of P233.352
difference of P15.573 million between accounting and inventory
records, not properly accomplished Report on Physical Count of
Local Road Network (RPCLRN) amounting to P30.455 million and
non-preparation of the required reports for Road Network.
Palawan Qualified  Cash-in-Bank accounts as of December 31, 2018 totaling P4.633

billion could not be relied upon due to discrepancies between the
accounting, treasury and bank records attributable to
unrecorded/unadjusted transactions, unreconciled account
balances and non-cancellation of stale checks.
City
Puerto Princesa Qualified  Cash-in-Bank–Local Currency, Current Account (LCCA) and Local
City Currency, Time Deposit (LCTD) account balances of P3.538 billion
as of December 31, 2018 was doubtful due to (a) existence of
reconciling items in the Bank Reconciliation Statements (BRS)
totalling P10.164 million which remained unadjusted in the books
of accounts; (b) closed bank accounts with balances totalling
P14.486 million were still carried in the books; and (c)
discrepancies between cashbook balances and accounting records
accumulated to P26.377 million for failure of the accountable
officers to conduct monthly reconciliation of the cashbook with the
subsidiary ledgers; and,
 Property, Plant and Equipment (PPE) and Investment Property

valued at P4.235 billion as of December 31, 2018 could not be
ascertained due to (a) non-conduct of physical count of properties
and non-maintenance of property cards and PPE ledger cards by
185
the General Services Officer and the City Accountant, respectively;
(b) the account balances include unidentified fixed assets totaling
P226.834 million; and (c) depreciation was not provided for
depreciable assets under the SEF and TF books valued at P2.875
million and P2.002 million, respectively, as of CY 2018 and Motor
Vehicle account was overstated by P6.300 million due to the inclusion
of undelivered 21 units of electric powered vehicles.
Municipalities
Aborlan Qualified  Property, Plant and Equipment with net book value of P60.416
million carried in the Statement of Financial Position as at
December 31, 2018 could not be ascertained due to the failure of
the Municipality to complete the conduct physical inventory of its
Property, Plant and Equipment, thus rendering the existence,
completeness and valuation of the recorded property balances
doubtful.
Agutaya Management  Due to non-submission of financial documents for CY 2018

Letter
Araceli Qualified  Property, Plant and Equipment account with net book value of
P36.508 million as at December 31, 2018 could not be ascertained
because it was not supported by physical inventory report, property
cards, property ledger cards, complete lapsing schedules and
updated Acknowledgement Receipt for Equipment; and,
 Cash in Bank-Local Currency, Current Account totaling P97.628

millioncould not be ascertained due to a) non-submission of Bank
Reconciliation Statements of five depository accounts; b)
unidentified reconciling items between book and bank balances of
two depository accounts totaling P.689 million; c) variance between
the General Ledger balance and subsidiary records totaling P2.625
million; and d) non-reconciliation of cashbook with accounting
records.
Balabac Management  Due to non-submission of financial documents for CY 2018

Letter
Bataraza Qualified  Property, Plant and Equipment (PPE) accounts totaling P584.215
million, net of Construction-in-Progress, as of December 31, 2018
cannot be ascertained due to: (a) non-reconciliation between the
General Ledger (GL) balances and Report on Physical Count of
Property, Plant and Equipment (RPCPPE) as of year-end; (b)
RPCPPE was not presented by type of PPE, and unit cost or
equivalent fair value and assigned property number were also not
presented; and (c) other PPE amounting to P6.384 million, which
were identified as impaired by the agency, were derecognized from
the books instead of setting up an allowance for the impairment
and impairment of the assets was recognized at its carrying amount
resulting in net overstatement of recognized Impairment Loss
186
Brooke's Point Qualified  Cash and Cash Equivalents account as of December 31, 2018
amounting to P317.742 million could not be ascertained due to: (a)
failure of the Municipal Accountant and the Municipal Treasurer to
reconcile their respective records resulting in discrepancies totaling
P15.703 million for Cash – Local Treasury and Cash in Bank
accounts; and (b) various reconciling items reflected in the bank
reconciliation statements remained unadjusted in the accounting
books due to lack of documents to support the same
 Unable to conduct the yearly physical inventory count of Property,

Plant and Equipment (PPE), Investment Property and Biological
Assets as of December 31, 2018 with net book value of P340.989
million, excluding Construction-in-Progress totaling P233.388
million and the Municipal General Service Officer failed to maintain
property cards.
Busuanga Management  Due to non-submission of financial documents for CY 2018

Letter
Cagayancillo Management  Due to non-submission of financial documents for CY 2018

Letter
Coron Management  Due to non-submission of financial documents for CY 2018

Letter
Culion Management  Due to non-submission of financial documents for CY 2018

Letter
Cuyo Qualified  Cash and Cash Equivalents as of December 31, 2018 amounting
to P120.639 million could not be relied upon due to the following
deficiencies and errors in the records and procedures of the
Accounting and Treasury Office: (a) The General Ledger was not
maintained for CY; (b) Collections totaling P20.074 million were
accounted for without specific journal entries per individual Report
of Collections and Deposits (RCD); (3) Bank deposits totaling
P39.162 million were reported under Reports of Disbursements
(RDs) instead of Reports of Collections and Deposits (RCDs); (4)
The Municipal Treasurer and the Municipal Accountant failed to
reconcile the cashbook balances with the subsidiary accounting
records as of December 31, 2018; and, (5) Entries in the cashbooks
of the Municipal Treasurer were not consistently presented in
chronological order and did not reflect the true and accurate timing
of transactions, resulting in misleading information.
Dumaran Qualified  Property, Plant and Equipment account with net book value of
P36.508 million as at December 31, 2018 could not be ascertained
because it was not supported by physical inventory report, property
cards, property ledger cards, complete lapsing schedules and
updated Acknowledgement Receipt for Equipment; and,

million could not be ascertained due to a) non-submission of Bank
187
Reconciliation Statements of five depository accounts; b)
unidentified reconciling items between book and bank balances of
two depository accounts totaling P.689 million; c) variance between
the General Ledger balance and subsidiary records totaling P2.625
million; and d) non-reconciliation of cashbook with accounting
records.
El Nido Management  Due to non-submission of financial documents for CY 2018

Letter
Kalayaan Qualified  Property, Plant and Equipment (PPE) as of December 31, 2018
was unreliable due to (a) unreconciled variance of P5.443 million
between the GL balance and report on physical inventory (b)
unrecorded donated PPE amounting to P.899 million; (c) land with
acquisition cost of P.060 million was not yet covered by certificate
of title in the name of Municipality; and (d) deficiencies in the
maintenance of property records.
Linapacan Management  due to non-submission of financial documents for CY 2018

Letter
Magsaysay Disclaimer  Failure to maintain the General Ledger and Subsidiary Ledgers for
CY 2018 thus, the correctness of all assets, liability, equity, revenue
and expense accounts totaling P167.827 million, P77.245 million,
P90.582 million, P60.844 million and P42.291 million, respectively,
could not be ascertained; and,
 Failure to prepare the Consolidated Financial Statement for all

funds, Notes to Financial Statements, Statement of Comparison of
Budget and Actual Amounts for General and Special Education
Fund and Statement of Cash Flows for the Trust Fund thus, limiting
the scope of our audit.
Narra Qualified  Failure to conduct the physical inventory of property, plant and
equipment (PPE) totaling P227.373 million, excluding construction
in progress accounts, thus, the validity and existence of the PPE
reflected in the books as at December 31, 2018 could not be
ascertained.
Quezon Qualified  Failure to conduct the physical inventory count of the Property,
Plant and Equipment (PPE) totaling P163.136 million, excluding
Construction in Progress accounts, thus, the existence,
completeness and valuation of the PPE reflected in the books as
at December 31, 2018 could not be ascertained.
Rizal Adverse  Non-reconciliation of physical inventory count against the recorded

Property, Plant and Equipment (PPE) totaling P311.580 million,
excluding Construction in Progress accounts;
 Material misstatement of the financial statements due to: a)

unrecorded bank reconciling items totaling P57.167 million; b)
unrecorded unexpended portion of the Local Disaster Risk
188
Reduction and Management Fund (LDRRMF) for CYs 2015, 2017
and 2018 amounting to P3.873 million, P4.632 million and P6.364
million, respectively, or a total of P14.869 million; c) unrecorded
balance of the First Consolidated Bank (FCB) bank account
amounting to P.554 million; and d) failure to recognize the 75% of
the Local Road Network Systems;
 Weakness of internal control that resulted to: (a) material

differences between the Cashbooks and Subsidiary of the Cash-in-
Bank and Cash in Local Treasury accounts of P44.920 million and
P16.502 million, respectively; and (b) insufficient cash backup in
the adjusted General Fund Proper bank balance of P43.017 million
as against the amount to be transferred to the 20% Development
Fund and Special Trust Fund of the LDRRMF amounting to
P44.864 million and P14.869 million, respectively, or a cash
deficiency of P16.716 million; and,
 Non-submission of the Bank Reconciliation Statements for all bank

accounts from CYs 2003 to 2015.
Roxas Qualified  Property, Plant and Equipment account with net book value of
P369.323 million as at December 31, 2018 could not be
ascertained because it was not supported by physical inventory
report and complete and accurate property cards.
San Vicente Disclaimer  Asset account balances totalling P580.788 million or 76% of the
total assets and liabilities account balances totalling P68.912
million or 29% of the total liabilities were not supported with
adequate accounting records and subsidiary ledgers that did not
permit the application of alternative audit procedures.
Sofronio Española Qualified  Property, Plant and Equipment (PPE), excluding Land and Land
Improvements and Construction in Progress, valued in the books
with net amount of P67.482 million were doubtful due to the (a)
continued inability of the Municipality to complete physical
inventory and to maintain property cards contrary to the provisions
of the Manual on the New Government Accounting System (NGAS)
for LGUs, and (b) erroneous computation of depreciation
expenses.
Taytay Qualified  Real Property Tax (RPT) Receivable and Special Education Tax
(SET) Receivable as well as their corresponding deferred income
accounts amounting to P42.499 million and P46.001 million,
respectively, as of December 31, 2018 could not be ascertained
because the amount of RPT and SET Receivables established at
the beginning of the year were not based on the Real Property Tax
Account Register/Taxpayer’s Index Card showing the total amount
due and collectible from the taxpayers;
 Disparity of P4.423 million in the balances of reciprocal accounts

Due from Other Funds and Due to Other Funds valued at
189
P49.213 million and P44.790 million, respectively, as of December
31, 2018 rendered these account balances unreliable;
 Inventories totaling P4.510 million and Property, Plant and

Equipment accounts with net book value of P226.089 million as of
December 31, 2018 could not be ascertained because it was not
supported by physical inventory reports duly reconciled with
supplies and property ledger cards.
Romblon Qualified  Inventories and Property, Plant and Equipment (excluding

Construction in Progress accounts) with net book value of P4.302
million and P1.603 billion, respectively, as of December 31, 2018,
could not be ascertained due to the non-submission of the required
reports;
 Dormant/non-moving Inventory accounts totaling P22.046 million

were dropped in the books million.
Municipalities
Alcantara Qualified  Failure to submit the Report on the Physical Count of Inventories
(RPCI) and Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) to support the Inventories and Property,
Plant and Equipment valued at P.694 million and P103.475 million,
respectively, as of end of the year.
Banton Qualified  Inventories and Property, Plant and Equipment (excluding

Construction in Progress accounts) with net book value of P1.406
million and P79.886 million, respectively, as of December 31, 2018,
could not be ascertained due to the non-submission of the required
reports.
Cajidiocan Qualified  PPE and Inventory accounts with net book values of P133.997
million and P1.536 million, respectively, as of December 31, 2018
could not be ascertained due to non-conduct of physical count;
 Accounts Payable account of P3.298 million as of December 31,

2018 includes payables without valid supporting documents
totaling P3.136 million, thereby overstating the account by the
same amount; and,
 Cash and Cash Equivalents of P197.247 million as of December

31, 2018 is understated by P1.554 million due to unrecorded book
reconciling items.
Calatrava Qualified  Property, Plant and Equipment (PPE) account as of December 31,
2018 amounting to P77.724 million, could not be ascertained due
to failure of the Municipality to conduct an actual physical inventory
of the Municipality’s property and reconcile the same with
accounting record; and,
190
 Directly charged all regular purchases of supplies and materials in

the total amount of P.642 million to expense accounts, instead of
booking them up through inventory account.
Concepcion Qualified  Failure to reconcile the individual balances of bank accounts with
that of the General Ledger, which rendered the balance of Cash in
Bank-Local Currency, Current account as of December 31, 2018
totaling P75.944 million, unreliable;
 Inventory account as at December 31, 2018 could not be

ascertained because the Municipal Accountant directly charged all
regular purchases of supplies and materials in the total amount of
P1.236 million to expense accounts, instead of booking them up
through inventory account; and,
 Property, Plant and Equipment (PPE) account as at December 31,

2018 amounting to P53.653 million, could not be ascertained due
to failure of the Municipality to conduct an actual physical inventory
of the municipality’s property and reconcile the same with
accounting records.
Corcuera Unqualified
Ferrol Qualified  Inventory and Property, Plant and Equipment (PPE) accounts as of
December 31, 2018 amounting to P.844 million and P67.425
million (net of accumulated depreciation and excluding Land and
Construction in Progress), respectively, were not supported with
complete and accurate Report on the Physical Count of Inventories
(RPCI) and Report on the Physical Count of PPE (RPCPPE).
Looc Qualified  Failure to submit the Report on the Physical Count of Inventories
(RPCI) and Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) to support the Inventories and Property,
Plant and Equipment (PPE) valued at P8.320 million and P34.554
million, respectively, as of end of the year,;
 Lapses in the setting up of Real Property Tax Receivable and

Special Education Tax Receivable accounts at the beginning of the
year, rendering the balances of both accounts and the
corresponding contra accounts overstated as of end of the year;
and,
 Lapses in the preparation of monthly Bank Reconciliation

Statements (BRS), rendering the consolidated balance of Cash in
Bank – Local Currency as of December 31, 2018 amounting to
P84.140 million unreliable.
Magdiwang Unqualified
191
Odiongan Qualified  Property, Plant and Equipment (PPE) account as of December 31,
2018 amounting to P169.324 million could not be ascertained due
to: a) failure of the Municipality to conduct a complete physical
inventory of the municipality’s property and reconcile same with the
accounting record; b) erroneous recording of progress billings and
final payment for infrastructure projects to Due to NGAs account
instead of appropriate Construction in Progress account; c)
Transfer from Trust Fund to General Fund of Disaster Response
and Rescue equipment amounting to P4.990 million was not taken
up in the General Fund books; and, d) failure to support the
computation of depreciation with lapsing schedule.
Romblon Qualified  Property, Plant and Equipment (PPE) of P110.386 million

(exclusive of Construction in Progress) as of December 31, 2018
was unreliable as to their existence, completeness and valuation
due to the failure of the management to conduct physical count of
PPE; and,
 Due from/to Other Funds as of December 31, 2018 of P.333 million

and P3.515 million, respectively, remained unreconciled, thus,
rendered the account balances unreliable as of year-end.
San Agustin Qualified  Inventory and Property, Plant and Equipment (PPE) as of
December 31, 2018 amounting to P.889 million and P72.966
million (net of accumulated depreciation), respectively, cannot be
ascertained due to incomplete physical count of the properties of
the Municipality.
San Andres Adverse  Property, Plant and Equipment (PPE) account as of December 31,
2018 amounting to P147.219 million, which represents 62% of
LGUs total assets is unreliable due to: a) failure of the Municipality
to conduct physical inventory of the Municipality’s property and
reconcile the same with accounting record; b) transfer from Trust
Fund to General Fund of Motor Vehicles and Disaster Response
and Rescue Equipment amounting to P6.970 million and P.132
million, respectively, were not taken up in the General Fund books;
c) PPE accounts recorded in the Trust Fund books totaling P4.406
million were not transferred to the General Fund books; d)
completed projects recorded under Construction in Progress(CIP)
account in the SEF and Trust Fund books amounting to at least
P25.613 million were not transferred to appropriate asset account;
and e) allowance for depreciation was not provided for depreciable
assets.
San Fernando Qualified  PPE and Inventory accounts as compared with the balance per
report on the physical count have net discrepancy of P.260 million
and P.430 million, respectively, as of December 31, 2018 thereby
casting doubt on the accuracy and reliability of the presented
balances in the financial statements;
192
 Due to NGAs account of P.107 million as of December 31, 2018
was misstated due to the inclusion of items that do not share the
nature of a fund transfer from NGAs and the exclusion of legitimate
fund transfers from NGAs amounting to P12.645 million that were
improperly recorded under Other Payables account; and,
 Accounts Payable account of P3.726 million as of December 31,

2018 includes payables without valid supporting documents
totaling P.811 million thereby overstating the account by the same
amount.
San Jose Qualified  Failure to submit the financial reports pertaining to years 1994 to
2002, rendering the forwarding balances of all accounts unreliable;
b) Failure to identify and adjust the unreconciled difference
between the book and bank balances of Cash in Bank accounts,
rendering the consolidated balance as of December 31, 2018
amounting to P42.613 million unreliable; c) failure to strictly
observe the guidelines in the grant, utilization and liquidation of
cash advances , resulting to accumulation of unliquidated cash
advances as of December 31, 2018 in the amount of P20.232
million; and d) failure to provide allowance for depreciation on
Infrastructure Assets totaling to P14.326 million, thus, overstating
the Asset and Government Equity account balances and rendering
the accuracy of the financial statements doubtful and unreliable.
Santa Fe Qualified  Inventory and Property, Plant and Equipment (PPE) as of

December 31, 2018 amounting to P2.222 million and P130.380
million (net of accumulated depreciation), respectively, cannot be
ascertained due to the failure of the Municipality to conduct physical
count of the properties at year-end.
Santa Maria Qualified  Failure to identify and provide the details of Property, Plant and
Equipment (PPE) costing P5.679 million and prepare the Inventory
and Inspection Report of Unsercieable Property (IIRUP) for
unserviceable properties, thus, rendering the management’s
assertion on the validity, existence and correctness of the reported
balances of PPE accounts, unreliable and exposing those PPE to
further deterioration and loss of the value thereof.
REGION V – Bicol Region

Albay Unqualified
Cities
Legazpi City Unqualified
Ligao City Qualified  Property, Plant and Equipment (PPE) account cannot be
ascertained due to the variance of P117.190 million between the
recorded balance and the balance per Report on the Physical
Count of PPE; and,
193
 Cash-in-Bank-Local Currency, Current Account is overstated by
P0.740 million due to unrecorded long outstanding reconciling
items amounting to P0.540 million (debits) and P1.290 million
(credits).
Tabaco City Qualified  Property, Plant and Equipment (PPE) account as of December 31,
2018 cannot be relied upon due to the inability of the City
Government to: (a) reconcile PPE account balances between the
accounting records and the RPCPPE resulting in a discrepancy of
P76.290 million; and (b) secure title of ownership for the 124 lots
with a total market value of P168.820 million, exposing the said real
properties to risk of third party claim;
 Receivable account of P4.700 million as of December 31, 2018 is

unreliable as the Real Property Tax (RPT) and the Special
Education Tax (SET) Receivables were not established at the
beginning of each year due to the absence of Certified List from the
City Treasurer and non-recording of delinquent receivables from
market stall holders amounting to P3.0 million; and,
 Payable accounts totaling P27.680 million to surplus account could

not be substantiated due to the absence of documents to
validate/support the entries made.
Municipalities
Bacacay Qualified  Property, Plant and Equipment (PPE) accounts with a net book
balance of P262.630 million as of December 31, 2018, which
comprise 40.57 percent of its total assets of P647.290 million could
not be ascertained due to the repeated inability of the Municipality
to conduct a complete physical inventory of all its properties,
maintain PPE inventory records and prepare and/or submit the
complete Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) at year-end.
Camalig Qualified  Property, Plant and Equipment (PPE) accounts valued at P16.140
million could not be ascertained due to the unreconciled balance of
P15.700 million due to inability by both the Accounting and Property
Units to regularly reconcile their records; and parcels of land
totaling P9.440 million are not yet registered in the name of the
Municipality.
Daraga Qualified  Property, Plant and Equipment (PPE) accounts valued in the books
at P731.520 million could not be ascertained due to the
unreconciled balance of P174.580 million, which comprises 13.85
per cent of the total assets of P1.280 billion, because the Municipal
Accountant and Property Officer were not able to reconcile their
records; and,
194
 Due from and Due to Other Funds, were not reconciled, with a
variance of P14.300 million, due to errors in the recording of
transactions involving transfers of funds.
Guinobatan Qualified  Property, Plant and Equipment (PPE) accounts valued at P393.070
million could not be ascertained due to the unreconciled balance of
P15.700 million due to inability by both the Accounting and Property
Units to regularly reconcile their records; and parcels of land
purchased in CY 2018 totaling P17.090 million are not yet
registered in the name of the Municipality.
Jovellar Qualified  Property, Plant and Equipment (PPE) accounts valued in the books
at P101.700 million at year end, could not be ascertained due to
the inability of Management to complete the physical inventory,
reconcile Accounting and Property records and finally submit the
report thereon to the Audit Team, thus, rendered the PPE account
balances unreliable.
Libon Qualified  Property, Plant and Equipment (PPE) account cannot be

ascertained due to the variance of P120.860 million between the
recorded balance and the balance per Report on the Physical
Count of PPE; and,
 Cash-in-Bank-Local Currency, Current Account is overstated by

P2.770 million due to unrecorded long outstanding reconciling
items amounting to P2.810 million (debits) and P5.580 million
(credits).
Malilipot Qualified  Property, Plant and Equipment (PPE) account as of December 31,
2018 amounting to P180.130 million cannot be relied upon due to
the inability of the Municipal Government to: (a) reconcile PPE
accounts balances between the accounting records and the
RPCPPE resulting in a discrepancy of P18.820 million; (b) secure
title of ownership for the 16 lots with a total market value of P71.110
million or assessed value of P11.250 million exposing the said real
properties to risk of third party claim; and (c) provide depreciation
for its depreciable real properties with a reported book value of
P140.120 million, resulting in understatement of the expense and
overstatement of both the asset and equity accounts;
 Accounts Receivables of P4.730 million as of December 31, 2018

is unreliable due to the: (a) none establishment of Real Property
Tax (RPT) and the Special Education Tax (SET) Receivables of
P1.780 million at the beginning of the year; (b) unrecorded prior
years’ receivables from RPT/SET, Market Stall Rental and Water
System amounting to P26.880 million, P116,820 and P0.770
million, respectively; and (c) unrecorded collectibles from the
Commission on Higher Education (CHED) for the School Year
2018 totaling to P25.970 million; and,
195
 The correctness of Inventories amounting to P2.620 million cannot
be relied upon due to the unreconciled amount of P2.510 million
against the Report of Physical Count of Inventories (RPCI).
Malinao Qualified  Property, Plant and Equipment (PPE) account as of December 31,
2018 cannot be relied upon due to the inability of the Municipal
Government to: (a) to conduct physical count of its properties; (b)
secure title of ownership for the 32 lots with a total market value of
P177.640 million exposing the said real properties to risk of third
party claim; (c) reconcile PPE account balances between the
accounting records and the RPCPPE resulting in a discrepancy of
P21.360 million; and (d) provide depreciation on properties with
book value totaling P98.350 million, understating the expense and
overstating the asset and equity accounts;
 Cash in Bank - Local Currency-Current Account – Trust Fund

amounting to P12.360 million is unreliable due to unrecorded bank
reconciling items totaling P5.660 million; and,
 Real Property Tax (RPT) and the Special Education Tax (SET)
Receivables amounting to P.495 million is unreliable as the CY
2018 receivables totaling P2.620 million was not established at the
beginning of the year due to the absence of Certified List from the
Municipal Treasurer and non-recording of prior years’ delinquent
property tax receivables.
Manito Qualified  Property, Plant and Equipment (PPE) accounts valued in the books
at P230.960 million (except Construction in Progress accounts)
could not be ascertained due to the unreconciled balance of P1.740
million between the Accounting and Property records, which
comprises 0.44 per cent of the total assets.
Oas Qualified  Property, Plant and Equipment account cannot be ascertained due
to the variance between the recorded balance and the balance per
Report on the Physical Count PPE, of P37.870 million which
comprises 7.73 per cent of the total assets of P490 million; and,
 Failure to conduct physical inventory of its Supplies totaling P4.180

million as of December 31, 2018, which comprises 0.85 percent of
the total assets for the same period.
Pio Duran Qualified  Property, Plant and Equipment (PPE) accounts valued in the books
unreconciled balance of P3.420 million, which comprises 1.25 per
cent of the total PPE, for the inability of the Municipal Accountant
and Property Officer to reconcile the records of these accounts.
Polangui Qualified  Property, Plant and Equipment (PPE) account valued in the books
unreconciled balance of P35.930 million, which comprises 5.64 per
196
cent of the total PPE, for the inability of the Municipal Accountant
and Property Officer to reconcile the records of these accounts;
and,
 Unreconciled reciprocal accounts in Due to and Due from, showing

a variance of P4.420 million as of year end.
Rapu-Rapu Unqualified
Santo Domingo Qualified  Property, Plant and Equipment (PPE) accounts amounting to
P147.050 million which represents 62.73 per cent of the total
assets is unreliable due to the unreconciled difference of P33.410
million with the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE); and,
 Cash in Bank account as at December 31, 2018 amounting to

P41.14 million is doubtful because of the absence of monthly Bank
Reconciliation Statements of the current bank accounts of the LGU.
Tiwi Qualified  Property, Plant and Equipment (PPE) account as of December 31,
2018 amounting to P260.310 million cannot be relied upon due to
the inability of the Municipal Government to: (a) reconcile PPE
account balances between the accounting records and the
RPCPPE resulting in a discrepancy of P30.660 million; and (b)
secure title of ownership for the 66 lots with a total market value of
P156.990 million exposing the said real properties to risk of third
party claim; and,
 Real Property Tax (RPT) and the Special Education Tax (SET)
Receivables totaling to P1.040 million as of December 31, 2018 is
unreliable due to the none establishment of CY 2018 Real Property
Tax (RPT) and the Special Education Tax (SET) Receivables at the
beginning of the year and the unrecorded prior years’ RPT/SET
receivables amounting to P3.980 million.
Camarines Norte Qualified  Property Plant and Equipment (PPE) account of the Province has
a variance of P3.410 million between the accounting records and
the submitted Report on the Physical Count of Property, Plant and
Equipment (RPCPPE); and,
 Accounting Subsidiary Ledger balance of Cash account under

Local Currency Current Account (LCCA) has a variance totaling
P58.670 million when compared with balances per cashbook of the
Provincial Treasury Office (PTO).
Municipalities
Basud Qualified  Due to non-reconciliation of the Report of Physical Count of

Property, Plant and Equipment (RPCPPE) of the Municipality with
the recorded PPE accounts in the General Ledger (GL) as of
197
 December 31, 2018 having a variance of P12.250 million, thus, the
reliability and accuracy of PPE accounts in the Financial
Statements as of year-end could not be ascertained.
Capalonga Qualified  Out of the P196.140 million worth of Property, Plant, and
Equipment (PPE), P40.390 million (excluding depreciation) were
impaired as at December 31, 2018 due to inability of the
Management to reconcile physical PPEs and records and the
books; and unidentifiable old PPEs in the books from prior years
due to lack of records.
Daet Qualified  Due to the non-preparation of a prescribed complete and accurate
report on the physical count of all its inventories and PPE and their
non-reconciliation with the recorded Inventories and PPE accounts
(excluding Land, Land Improvements, Building and Other
Structures and Construction in Progress) as of December 31, 2018
having a variance of P1.050 million and P59.950 million,
respectively.
Jose Panganiban Qualified  Out of the P127.820 million worth of Property, Plant, and
books; and unidentifiable old PPEs in the books from Calendar
Year 2003 and below due to lack of records;
 Differences in the balances of Real Property Tax (RPT) and Special

Education Tax (SET) Receivables, and their Deferred Income
counterparts totalling P2.450 million and P2.140 million,
respectively, due to inadvertent erroneous accounting treatment,
non-setup of RPT and SET Receivables for various years, and non-
reconciliation of entries between process owners.
 Unverifiable Inventory Accounts and Breeding Stocks Account

totalling P1.790 million and P.287 million due to non-reconciliation
between physical inventory and book records and non-conformity
for the required procedures and accounting for the procurement
and utilization of supplies; and,
 Unverified and unrecorded expenditure totalling P.532 million due

to non-submission of Disbursement Vouchers by the Municipal
Treasurer to the Municipal Accountant.
Labo Qualified  Due to (a) unreconciled balance amounting to P11.120 million

between the Report on the Physical Count of PPE (RPCPPE) and
the recorded PPE in the books, excluding Land and Land
Improvements, Infrastructure Assets, Buildings and other
Structures and Construction in Progress accounts; and (b) variance
amounting to P.228 million and P100.740 million in the land
account balances taken up in the books as compared with the
records in the General Services Office and Office of the Municipal
Assessor, respectively.
198
Mercedes Qualified  PPE accounts (excluding Land, Land Improvements, Buildings and
Other Structures and Construction in Progress) in the books as of
December 31, 2018 totalling to P79.770 million could not be
ascertained due to non-reconciliation with submitted Report of
totalling P122.380 million, thus, resulted to a variance of P42.610
million; and,
 Inventory accounts in the books as of December 31, 2018 with total

book value totalling to P2.720 million could not be ascertained due
to non-preparation of a complete and accurate report of Report of
Physical Count of Inventories (RPCI).
Paracale Qualified  Unverifiable Property, Plant and Equipment (PPE) totaling P69.570
million (excluding depreciation) in the books as at December 31,
2018 due to unreconciled PPEs and non-computation of
depreciation expense;
 Abnormal balance of Government Equity Account in the Trust Fund

(TF) totaling P66.580 million;
 Non-classification of current and non-current Loans Payable

currently included in the Financial Liabilities under Current Asset
as at December 31, 2018;
 Irregular balance of Real Property Tax (RPT) and Special

Education Tax (SET) Receivables amounting to P1.610 million and
P14.620 million respectively as at December 31, 2018; and,
 Major repairs from Calendar Year (CY) 2017 totaling P8.280 million
were not yet capitalized as at December 31, 2018.
San Lorenzo Ruiz Qualified  Due to the non-preparation of a prescribed complete and accurate
report on the physical count of all PPE and its non-reconciliation
with the accounting records as of December 31, 2018 having a
variance of P3.440 million.
San Vicente Qualified  Due to the (a) inability of the management to properly observe the
regular conduct of physical inventory taking of PPE and conduct
reconciliation of records casting doubt on the existence, accuracy
and reliability of recorded PPE, P33.760 million excluding Land and
Land Improvements, Infrastructure Assets, Buildings and Other
Structures and Construction in Progress (CIP); and,
 Incomplete supporting documents of the recorded disbursements

for 20 infrastructures projects, P26.120 million.
Santa Elena Qualified  Out of the P221.990 million worth of Property, Plant, and
199
books; and unidentifiable old PPEs in the books from prior years
due to lack of records; and,
 Unverifiable Inventory Accounts totalling P11.340 million due to

non-reconciliation between physical inventory and book records;
non-conformity for the required procedures and accounting for the
procurement and utilization of supplies and insufficiency of records
to support the presented Inventory Accounts as at December 31,
2018.
Talisay Disclaimer  Failure to submit the transaction documents for the period from
January to December 31, 2018.
Vinzons Qualified  Due to the (a) inability to properly observe the regular conduct of
physical inventory taking of PPE and conduct reconciliation of
records casting doubt on the accuracy and correctness of recorded
PPE amounting P37.660 million excluding Land and Land
Improvements, Infrastructure Assets, Buildings and Other
Structures and Construction in Progress; and insufficient
documentation and inadequate disclosures in the financial
statements of long outstanding receivables classified as current
assets amounting to P7.590 million.
Camarines Sur Qualified  Inventory accounts totaling P261.330 million cannot be ascertained
due to the absence of the Report on the Physical Count of
Inventories (RPCI) while property and accounting records of
Property, Plant and Equipment (PPE) were not reconciled by
P36.130;
 Discrepancies with a net amount of P34.0150 million existed

between the balances per books and the balances per bank of the
Cash-in-Bank-LCCA and Cash-in-Bank-FCCA due to the non-
recording of fund transfers; and,
 Cash advances totaling P66.250 million remained outstanding as

of December 31, 2018, resulting to possible overstatement of
assets and government equity accounts.
Cities:
Iriga City Qualified  Cash in Bank - Local Currency, Current Account (LCCA) balances
with an aggregate amount of P164.948 million as of December 31,
2018 could not be relied upon due to unrecorded/unadjusted
reconciling items pertaining to CY 2018 and prior years in the total
amount of P2.979 million (additions) and P68.972 million
(deductions);
 Paid Disbursement Vouchers (DVs) and related supporting

documents in CY 2018 and prior years totaling P58.600 million
200
were not submitted, thus raising doubts as to validity, legality,
existence and correctness of the transactions; and,
 Accounts Payable and Other Payables accounts totaling P44.900

million were not adequately supported with complete
documentation, proper aging, and adequate disclosure in the
financial statements, thus, the correctness and validity of these
obligations cannot be ascertained.
Naga City Qualified  Understatement of cash in bank accounts totalling P1.180 billion by
P21.630 million when compared with the confirmed bank balances
of P1.206 billion as at year end;
 Overstatement by P35.720 million of the Inventory accounts; and,
 Discrepancy amounting to P3.230 billion between the accounting

and property records of Property, Plant and Equipment existed as
of December 31, 2018 due to incomplete actual physical.
Municipalities:
Baao Qualified  Projects not yet started amounting to P31.290 million were
recorded to Construction in Progress and Accounts Payable
accounts thereby overstating both asset and liability accounts by
the same amount.
Balatan Qualified  Cash in Bank–Local Currency, Current Account year-end balance

of P60.308 million for all funds was understated due to unrecorded
deposits amounting to P10.270 million; and,
 Property and accounting records had a variance of P70.333 million

valued at gross book value. The discrepancy could not be
reconciled due to the absence of updated PPE records and reports.
Bato Qualified  Receivable and equity accounts were overstated by P5.906 million
because cash advances granted more than 31 days to over three
years remained unliquidated despite completion of purpose thus
failing to recognize expenses in the period/s to which they relate;
and,

Bombon Qualified  No physical count of supplies and materials was conducted, thus
the validity and existence of recorded Inventory accounts totaling
P3.977 million cannot be relied upon.
Buhi Qualified  Past due cash advances in the amount of P9.836 million were not
liquidated despite completion of purpose failing to recognize
expenses on the period to which they relate, overstating assets and
equity accounts by the same amount;
201
 Unadjusted reconciling difference understated the Cash in Bank–
LCCA account by P4.823 million;

Receivables for CY 2018 were understated by approximately
P6.800 million;
 Variance of P61.590 million between the Report on the Physical

Count of Property, Plant and Equipment (RPCPPE) and accounting
records for the PPE accounts; and,
 Paid disbursement vouchers and the related support documents

totaling P12.277 million were not submitted for audit.
Bula Qualified  Property and accounting records had a variance of P30.210 million
reconciled due to the absence of updated PPE inventory reports
and ledger cards.
Cabusao Qualified  Receivables and equity accounts were overstated by P4.210

million as cash advances have remained unliquidated despite
completion of purpose for over 31 days to more than three years,
thus failing to recognize expenses in the period to where they
relate;
 Fuel, Oil and Lubricants Inventory reflected a balance of P0.950

million despite issuance or consumption thereof resulting to
overstatement of the inventory account; and,

Calabanga Qualified  Various entries totaling P2.262 million were improperly recorded as
deductions to the Cash-Local Treasury (1-01-01-010) account
understating this account by the same amount;
 Bank reconciling items totaling P1.394 million were continuously

not adjusted/recorded in the books, thereby overstating the Cash
in Bank-Local Currency, Current Account (1-01-02-010); and,
 Due from Other Funds (1-03-04-050) and Due to Other Funds (2-
03-01-010), in the amount of P14.293 million and (P13.787 million),
respectively, were not reconciled by P28.080 million and without
Subsidiary Ledgers (SL).
Camaligan Qualified  Disbursements totaling P4.503 million were not recorded

understating the related expense and/or asset accounts;
 Receivables and Equity accounts were overstated by P1.287

million because cash advances for travel have remained
unliquidated despite completion of purpose for over a year to more
than three years;
202
 General ledger and Subsidiary ledger balances of one asset and
two liability accounts were not reconciled by P5.836, thus casts
doubt on the accuracy and reliability of the recorded balances in
the financial statements; and,
 Property, Plant and Equipment (PPE) accounts cannot be

ascertained because movable properties in the amount of P25.748
million were not supported with property ledger cards, inventory
reports and other records.
Canaman Qualified  Cash Advances granted for over a year totaling P1.068 million
remained unliquidated despite completion of purpose or execution
of related activities, thus failing to recognize expenses in the
periods to which they relate and overstating receivables and equity
accounts;
 Property, Plant and Equipment (PPE) valued in the books at

P11.785 million as of December 31, 2018 cannot be ascertained
due to the absence of updated and/or complete PPE reports and
records; and,
 Accounts Payable totaling P4.978 million were set-up for services

not yet rendered, resulting to the overstatement of the Accounts
Payable, CIP-Infrastructure Assets and CIP-Building and Structure
accounts.
Caramoan Qualified  Cash advances totaling P2.498 million had long been spent yet
remain unliquidated as of December 31, 2018 overstating the
assets and equity by the same amount; and,
 Property, Plant and Equipment (PPE) in the amount of P34.459

million (excluding Construction in Progress) could not be
ascertained due to the absence of updated PPE inventory reports
and records.
Del Gallego Unqualified
Gainza Qualified  Various entries totaling P3.193 million were erroneously recorded
in the Cash-Local Treasury account, thereby overstating the said
account;
 Due from Other Funds and Due to Other Funds, in the amount of
P47.222 million and P19.957 million, respectively, were not
reconciled by P27.265 million; and,
 Fund transfer from DILG for the Salintubig Project amounting to
P10.000 million for CY 2018 was recorded twice in the books of the
LGU, thus, overstating the Due to NGAs account by the same
amount.
203
Garchitorena Qualified  Payables totaling P19.481 million could not be substantiated
hence, liability accounts were overstated; and,

and records.
Goa Qualified  Cash advances totaling P20.524 million had long been spent yet
assets and equity accounts;
 Payables totaling P34.800 million could not be substantiated

hence, liability accounts were overstated;
 Disbursement vouchers and corresponding supporting documents

totaling P83.961 million were not submitted for audit, thus, the
validity, accuracy and propriety of the transactions were not
validated; and,

and records.
Lagonoy Qualified  Cash advances totaling P20.524 million had long been spent yet
 Payables totaling P34.800 million could not be substantiated

hence, liability accounts were overstated;

validated; and,

and records.
Libmanan Qualified  Welfare Goods for Distribution totaling P.389 million was reported
as inventory as of December 31, 2018, despite issuance to end-
users, overstating the account and understating its corresponding
expense account; and,

204
Lupi Qualified  Land (1-07-01-010) and Government Equity (3-01-01-010)
accounts were understated by P4.094 million due to the non-
recording of nine (9) parcels of land with valid ownership
documents and recording of four (4) parcels of land at lower than
purchase cost/market value hence understating Assets and
Government Equity;

P79.578 million (excluding Construction in Progress account of
P2.049 million) could not be ascertained due to the absence of
updated PPE inventory reports and ledger cards.
Magarao Qualified  Receivables and equity accounts were overstated by P1.607

million because cash advances for travel have remained
unliquidated despite completion of purpose for over a year to more
than three years, thus failing to recognize expenses in the period/s
to which they relate; and,
 Property, Plant and Equipment (PPE) accounts cannot be

ascertained because movable properties in the amount of P10.829
million were not supported with property ledger cards, inventory
reports and other records.
Milaor Qualified  Cash Advances granted for over a year totaling P1.768 million
accounts; and,

records.
Minalabac Qualified  Cash Advances granted for over a year totaling P4.262 million
accounts; and,

records.
Nabua Qualified  Receivable and equity accounts were overstated by P8.373 million
because cash advances remained unliquidated despite completion
of purpose thus failing to recognize expenses in the period/s to
which they relate; and,
205
 Property and accounting records had a variance of P226 million

reconciled due to the absence of updated PPE reports and records.
Ocampo Qualified  Completed projects and procurement of tools/equipment

amounting to P12.977 million were not recognized in the books
resulting in the understatement of the related PPE and government
equity accounts; and,
 No physical inventory of supplies and inventory was conducted,

thus validity and existence of Inventory accounts amounting to
P9.721 million cannot be relied upon; and (c) property and
accounting records on movable properties were not reconciled by
P11.157 million.
Pamplona Qualified  Biological Assets and Other Structures costing P0.805 million were
not recognized in the books understating the accounts; and,

Pasacao Qualified  Cash advances totaling P5.960 million remained unliquidated as of

year-end despite completion of purpose or execution of related
activities thus failing to recognize expenses in the period/s to which
they relate and overstating the receivable and equity accounts by
the same amount;
 Expenditures totaling P0.425 million were not recorded in the

books overstating Cash in Bank-LCCA and understatement of
other related accounts; and,

P180.348 million (excluding Construction in Progress account of
P28.437 million) were not supported with inventory reports and
ledger cards.
Pili Qualified  Cash, receivable and equity accounts were overstated by P5.936
million because cash advances remained unliquidated despite
completion of purpose, thus failing to recognize expenses in the
period/s to which they relate;
 Eighty nine disbursement vouchers totaling P2.884 million were not

submitted nor recorded in the books overstating Cash in Bank-
LCCA and related accounts; (c) asset and equity accounts were
overstated by P5.197 million because expenses were not
recognized upon issuance of inventories; and,
206
 Movable Property, Plant, and Equipment (PPE) valued in the books
at P69.208 million cannot be ascertained due to the absence of
updated PPE ledger cards, property cards, and the year-end
physical inventory report.
Presentacion Qualified  Cash advances totaling P8.759 million had long been spent yet

validated; and,

and records.
Ragay Qualified  Land (1-07-01-010), Other Payables (2-99-99-990), and Equity (3-
01-01-010), accounts were understated by P32.810 million, P3.800
million, and P29.010 million, in order, due to non-recording of 26
parcels of land with market value/cost of P32.810 million.
Sagñay Qualified  Property, Plant and Equipment (PPE) with book value of P164.010
million was not reconciled with the year-end inventory report by
P10.555 million, and lands owned by the LGU totalling P1.468
million were not recorded in the books.
San Fernando Qualified  Completed infrastructure projects totaling P22.910 million sourced
from LGSF were not recognized in the books; and,

records.
San Jose Qualified  Cash, receivable and equity accounts were overstated by P1.957
completion of purpose for over one year or more than three years,
thus failing to recognize expenses in the period/s to which they
relate; and,
 Property, Plant, and Equipment (PPE) valued in the books at

P44.613 million cannot be ascertained due to the absence of
updated PPE ledger cards, property cards, and the year-end
physical inventory report.
Sipocot Qualified  Entries prepared and posted at the end of the year to adjust the
inventory accounts totaling P2.470 million resulted to
overstatement of payable and expense accounts;
207
 Fuel consumptions in the amount of P2.790 million were recorded
as outright expense overstating the related expense accounts;
 Property and accounting records had a variance of P184.011

million valued at gross book value. The discrepancy could not be
Siruma Qualified  Liquidation of cash advances for payment of wages of casual

employees amounting to P.306 million was not taken up in the
books of the municipality, thereby overstating the Advances for
Payroll (1-03-05-020) and understating the related expense
accounts; and,
 Recorded expense on salaries and wages in the amount of

P19.543 million could not be ascertained due to lack of proper basis
in the computation and payment thereof.
Tigaon Qualified  Cash, receivable and equity accounts were overstated by P8.045
completion of purpose, thus failing to recognize expenses in the
period/s to which they relate.
Tinambac Qualified  Stale checks totaling P1.692 million as of December 31, 2018 were
not cancelled, thereby understating the Cash in Bank-LCCA and
Accounts Payable;
 Erroneous entries amounting to P2.297 million were recorded in

the Due to BIR (2-02-01-010) account resulting to the
understatement of the account;
 Due from Other Funds (1-03-04-050) and Due to Other Funds (2-
03-01-010), in the amount of P9.160 million and P3.974 million,
respectively, were not reconciled by P5.187 million; and,
 Recorded expense on salaries and wages in the amount of

P36.500 million and P37.718 million for regular and job-order
employees, respectively, could not be ascertained due to lack of
proper basis in the computation and payment thereof.
Catanduanes Qualified  Unrecorded/unadjusted reconciling items amounting to P7.110

million (additions) and P14.150 million (deductions) resulted to a
net overstatement in the Cash-in- Bank, Local Currency, Current
Account as of December 31, 2018, by P7.040 million;
 Inventories totaling P67.880 million already issued but still carried

in the books of accounts, overstated the affected inventory
accounts and understated related expenditures by the same
amount; and,
208
 Unreconciled variance of P99.460 million between the balances
per books and physical inventory of the Property, Plant and
Equipment (PPE) rendered the PPE balances unreliable as of year-
end.
Municipalities:
Bagamanoc Qualified  Property, Plant and Equipment accounts totaling P29.900 million or
22.8 per cent of Total PPEs, representing the variance between the
total PPE per ledger and the PPE items actually counted and
verified, could not be ascertained because of inability of the LGU
to conduct complete physical count of PPE as of December 31,
2018.
Baras Adverse  Property, Plant and Equipment accounts totaling P69.740 million or
65.3 per cent of Total Assets, representing the difference between
the total PPE of P106.820 million and cost of verified PPEs
amounting to P37.080 million could not be ascertained because of
inability of the LGU to conduct the physical count and submit the
RPCPPE as of December 31, 2018.
Bato Qualified  Property, Plant and Equipment (PPE) amounting to P27.354 million
were not verified/substantiated because the agency was unable to
conduct physical count, submit inventory report and reconcile the
same with accounting records.
Caramoran Qualified  Property, Plant and Equipment (PPE) account balances of the
difference of P46.780 million between the inventory report and
ledger balances could not be ascertained due to inability of the
Accounting and General Services Units to completely reconcile
their books.
Gigmoto Qualified  Property, Plant and Equipment (PPE) amounting to P9.192 million
could not be ascertained because the agency was unable to
same with accounting records; and,
 Improper accounting of collections of Special Education Tax

Revenue by P0.517 million and abnormal negative balances of
Special Education Tax Receivables and Deferred Special
Education Tax accounts.
Pandan Qualified  Inability to conduct the physical inventory of its Property, Plant and
Equipment amounting to P144.560 million of which P23.820 million
was not validated by the Auditor; and,
 Difference in the balance of the Cash in Bank account between the

ledger and bank records of P10.300 million as of December 31,
2018 could not be validated due to non-preparation of bank
reconciliation statement.
209
Panganiban Unqualified
San Andres Unqualified
San Miguel Qualified  Thirteen bank accounts with a total balance of P6.665 million as of
December 31, 2018 as well as the deposits and disbursements
relative thereto were not recognized in the books of accounts; and,
 Property, Plant and Equipment (PPE) amounting to P6.721 million

were not verified/substantiated because the agency was unable to
same with accounting records.
Viga Unqualified
Virac Qualified  Property, Plant and Equipment (PPE) amounting to P60.191 million
could not be ascertained because the agency was unable to
conduct complete physical count, submit inventory report and
reconcile the same with accounting records; and,
 Unrecorded credit memo’s totaling P3.207 million resulting to

understatement of Cash in Bank and Government Equity accounts
Masbate Qualified  Failure to submit complete Report on the Physical Count of

Property, Plant and Equipment (PPE), thus, the validity, existence
and condition of the Provincial Government’s properties amounting
to P453.212 million or 79.54% of the PPE subject to inventory
aggregating P569.775 million, could not be ascertained;
 Non – submission of disbursement vouchers amounting to

P102.766 million or 4.48% of the disbursements totaling P2.295
billion, precluded the Auditor from determining the validity,
propriety and legality of the financial transactions;
 Unable to complete the physical inventory of its Property, Plant and

Equipment (PPE) and submit the reconciled inventory report, thus,
the correctness of PPE items worth P257.921 million, which
represents 23.55% of the total PPE, were unreliable;
 Construction in Progress-Buildings & Other Structures and

Government Equity accounts amounting to P9.549 million were
understated because of the agency’s inability to capitalize the
interest on the loan availed by the agency; and,
 Accounts Payable worth P15.370 million could not be ascertained

due to the absence of supporting documents/valid proofs.
210
City
Masbate City  Unable to complete the physical inventory of its Property, Plant and
Equipment (PPE) and submit the reconciled inventory report, thus,
the correctness of PPE items worth P257.921 million, which
represents 23.55% of the total PPE, were unreliable;
 Construction in Progress-Buildings & Other Structures and

Government Equity accounts amounting to P9.549 million were
understated because of the agency’s inability to capitalize the
interest on the loan availed by the agency;

due to the absence of supporting documents/valid proofs; and,
 Statement of Comparison of Budget and Actual Amounts (SCBAA)

in the financial statements showing a difference of P32.380 million
was unreliable due to non-reconciliation of records between the
budget and accounting pertaining to actual amounts and non-
provision of explanation in the notes to financial statements.
Municipalities
Aroroy Qualified  Failure to conduct physical count of its inventories and was still not
able to conduct a complete physical count of all its properties and
reconcile the Property and Accounting records, thus, the existence
and condition of inventories amounting to P2.722 million and
property, plant and equipment with gross value of P66.492 million,
or at least 8.03 percent of the total gross PPE of P828.427 million,
cannot be readily ascertained; and,
 Lump sum balances of various items under the assets and liabilities
respectively, were without subsidiary ledgers and schedules, thus,
the existence and correctness of the said amounts cannot be
determined.
Baleno Qualified  Cash in Bank account may not be relied upon due to continuous
non-preparation of bank reconciliation statements for all bank
accounts and the agency was still not able to conduct a complete
physical count of all its properties and reconcile the property and
accounting records.
Balud Qualified  Property, Plant and Equipment (PPE) accounts valued at

P155.226 million taken as a whole could not be established due to
the non-maintenance of Property Cards by the General Services
Office (GSO) and/or other documents pertaining thereto which
rendered the account balance of the Property, Plant and
Equipment Account inaccurate and/or unreliable.
211
Batuan Qualified  Doubtful accuracy and reliability of the consolidated balance of the
Cash in Bank (CIB) account due to the unreconciled amount of
P4.228 million as a result of non-preparation od Bank
Reconciliation Statements (BRS) for 10 bank accounts; and,
 Property, Plant and Equipment (PPE) accounts subject to physical

inventory could not e ascertained due to non-submission of the
(RPCPPE); and the PPE accounts are overstated due to non-
provision of depreciation.
Cataingan Qualified  Inventories and Property, Plant and Equipment (PPE) account of
the Municipality were not established due to unreconciled
difference between the accounting records and the Report of
Physical Count of Property, Plant and Equipment; and,
 Cash in Bank (CIB) account balances were of doubtful validity due

to the unreconciled difference between the book balance and the
bank statement balance which is caused by the non-preparation of
Bank Reconciliation Statement (BRS).
Cawayan Qualified  Doubtful accuracy and reliability of the consolidated balance of the
Cash in Bank (CIB) accounts due to the unreconciled amount of
P13.500 million as a result of non-preparation of Bank
Reconciliation Statements (BRS) for 17 bank accounts with a total
recorded balance of P74.100 million;
 Property, Plant and Equipment accounts subject to physical

inventory could not be ascertained due to non- submission of the
Report on the Physical Count of Property Plant and Equipment
(RPCPPE); and,
 Due from Other Funds and Due to Other Fund, for all funds showed
a total difference of P9.670 million due to unadjusted reconciling
items.
Claveria Qualified  Inability to conduct complete physical count of its properties had
unreconciled difference between the submitted report and
accounting records.
Dimasalang Qualified  Land account with a total book value of P4.310 million as of
December 31, 2018 remained unreliable due to unrecorded lands
owned by the Municipality with undetermined value; and,

million remained uncertain due to submission of incomplete
inventory of PPE.
Esperanza Qualified  Property, Plant and Equipment (PPE) accounts valued at

Office (GSO) and/or other documents pertaining thereto
212
Mandaon Qualified  Property, Plant and Equipment (PPE) accounts valued at
Office (GSO) and/or other documents pertaining thereto.
Milagros Qualified  Property, Plant and Equipment accounts with a total gross value
of P492.270 million, excluding construction in progress accounts,
could not be ascertained as the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) showed a total gross
value of P362.150 million, thereby showing a variance of P130.110
million, incomplete Property Cards and non-maintenance of Ledger
Cards by the GSO and Accounting Office.
Mobo Qualified  Unable to conduct a physical count of all its properties and
reconcile the Property and Accounting Records.
Monreal Qualified  Unaccounted balance of Property, Plant and Equipment due to

incomplete inventory taking of LGU assets and absence and non-
reconciliation of perpetual inventory records and P2.726 million of
PPE items comprising 1.40% of total assets are unaccounted; and,
 Cash in Bank account has an unreconciled balance totalling

P12.444 million. Hence, the correctness and reliability of the cash
in bank amounting to P35.790 million, representing 18% of total
assets is doubtful.
Palanas Qualified  Property, Plant and Equipment (PPE) account were not established
due to unreconciled difference of P20.700 million between the
accounting records and the Report of Physical Count of PPE; and,
 Cash in Bank (CIB) account balances were doubtful due to

unreconciled difference amounting to P2.800 million between the
book balance and the bank statement balance which is caused by
the non-preparation of Bank Reconciliation Statement (BRS).
Pio V. Corpuz Qualified  Property, Plant and Equipment (PPE) accounts valued at P144.564
million taken as a whole could not be established due to the non-
maintenance of Property Cards by the General Services Office
(GSO) and/or other documents pertaining thereto.
Placer Qualified  Land account as of December 31, 2018 remained unreliable due to
unrecorded lands owned by the Municipality; and,
 Property, Plant and Equipment, remained uncertain due to

submission of incomplete inventory of PPE and various errors in
recording transactions affecting the PPE accounts.
San Fernando Qualified  The PPE items amounting to P37.661 million were not subjected to
depreciation for CY 2018 and the unaccounted balance of PPE
account amounting to P11.948 million due to the agency’s inability
to conduct the physical inventory and absence of perpetual
inventory records.
213
San Jacinto Qualified  Due from Other Funds and Due to Other Funds, for all funds in the
amount of P3.934 million and P2.722 million, respectively, showed
a total difference of P1.212 million due to unadjusted reconciling
items.
 Property, Plant and Equipment (PPE) accounts subject to physical

inventory totaling P7.072 million could not be ascertained due to
non-submission of the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE); and the PPE accounts totaling
P56.201 million is overstated due to non-provision of depreciation.
San Pascual Qualified  Unable to set up the Real Property Tax and Special Education
Receivable accounts and Deferred Real Property Tax and Deferred
Special Education Tax Income at the beginning of the year for CY
2018 and previous years thus, understating the receivables and
deferred credits accounts in the financial statements;
 Annual physical inventory-taking was not undertaken by the

Municipality, thereby casting doubt on the existence, completeness
and accuracy of the balance of PPE accounts totaling P29.620
million (gross amount) at year-end;

due to the absence of supporting documents/valid proofs; and,
 Unable to submit the disbursement and collection accounts totaling

P228.804 million, thereby rendering the validity and the validity and
propriety of the accounts doubtful.
Uson Qualified  Unable to set up the Real Property Tax and Special Education Tax
Receivables accounts at the beginning of the year due to the
absence of the Real Property Tax Assessment Roll, thus
understating the receivables and deferred credits accounts in the
 Annual physical inventory taking was not undertaken and

inadequate maintenance of property records, thus, the reliability
and validity of the balance of PPE items worth P126.125 million
which represents 38.70 per cent of the total PPE could not be
ascertained;
 Unable to submit the Disbursement and collection accounts totaling

P186.583 million within the prescribed period, hence, the validity
of the affected financial transactions and the correctness of the
account balances of assets, liabilities and equity could not be
ascertained; and,
 Statement of Comparison and Budget and Actual Amounts (

SCBAA ) in the financial statements was unreliable due to the non-
reconciliation of the budget and accounting records pertaining to
the actual amounts and the non-provision of explanation in the
notes to financial statements
214
Sorsogon Qualified  Property, Plant and Equipment (PPE) accounts is doubtful due to
the discrepancy amounting to P342.220 million between the
accounting and property records and lack of information to
substantiate the balances;
 Direct recording of the on-going construction of infrastructure

projects amounting to P33.770 million to the respective PPE
accounts and not to the Construction in Progress (CIP) accounts
overstated the said PPE accounts and understated the CIP
accounts;
 Unreliability of the receivable accounts aggregating P31.620 million

due to the undocumented dormant accounts for more than 10
years; and,
 Overstatement of P2.640 million in the Cash in Bank – LCCA

accounts due to the continuous non-adjustment of reconciling
items because of the Provincial Accountant’s Office (PAccO)
inability to provide the necessary supporting documents.
City
Sorsogon City Qualified  Property, Plant and Equipment (PPE) account balance is unreliable
because (a) four parcels of land owned by the City are undervalued
by P13.190 million while three parcels valued at P68.890 million
remain unrecorded in the books; (b) unserviceable properties for
disposal costing P76.060 million have not been disposed and are
still recorded in the books; (c) 198 untitled real property units
(RPUs) with tax declarations in the name of the City Government
were not recognized as PPE in the books since ownership is still to
be verified; and, (d) PPE balances per books and per Report on the
Physical Count of PPE (RPCPPE) are unreconciled by P24 million;
 Cash in Bank reconciling items amounting to P.970 million (net)

remain unadjusted in the books of accounts;
 Due to National Government Agencies (NGAs) account between

the City’s books and the books of the source agencies’ (SAs) books
are unreconciled by P14.490 million.
Municipalities
Barcelona Qualified  Allowance for depreciation amounting to P8.630 million was not
recognized which resulted in overstatement of total asset and total
equity in the same amount; and,
 Unable to conduct a complete physical count of all its PPE and

prepare a report thereon, thus, the existence of Property, Plant and
Equipment (PPE) amounting to P32.860 million cannot be relied
upon.
215
Bulan Qualified  Unreconciled variance of P88.550 million between the General
Ledgers (GL) and the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE), rendered doubtful the accuracy
and reliability of the reported PPE accounts balance;
 Inability to maintain detailed information to support the accuracy,

existence and validity of the reported liability accounts of P218.540
million casted doubt on the fair presentation of related accounts in
the Financial Statements;
 Receivable accounts amounting to P158.120 million are not

supported with complete subsidiary ledger thus casted doubt on
the validity of the figures reported in the financial statements; and,
 Cash in Bank – Local Currency, Current Account balance of

P108.560 million is unreliable due to numerous deficiencies and
reconciling items that remain unadjusted.
Bulusan Qualified  PPE balances per book and per RPCPPE were unreconciled by
P15.70 million;
 Discrepancy of P2.080 million between SL and BS were unreliable

due to non-preparation of BRS and book reconciling items of P.206
million in the CIB-LCCA remained unadjusted; and,
 Trust Liability - DRRMF was understated by P2.120 million

because of erroneous recording.
Casiguran Qualified  PPE account balance is unreliable because (a) Construction in

Progress (CIP) account balance and the total cost of ongoing
projects at year-end are unreconciled by P62.020 million; and (b)
PPE balances per books and per RPCPPE are unreconciled by
P30 million; and,
 Unrecorded check disbursements and stale checks amounting to

P20.240 million and P1.850 million, respectively, remain
unadjusted in the books of accounts.
Castilla Unqualified
Donsol Qualified  Variance of P13.460 million in the PPE records between the books
and the RPCPPE casted doubt on the accuracy and reliability of
Municipality’s Property, Plant and Equipment (PPE); and,
 Cash accounts cannot be ascertained due to (a) unaccounted and

unreconciled difference of P.256 million between the ledger and
the cashbook of Cash – Local Treasury account balances; (b)
unaccounted and unreconciled difference of P4.220 million
between the ledger and the cashbook of Cash in Bank account
balances; and (c) non-preparation of the CY 2018 monthly Bank
Reconciliation Statements for Special Education Fund and Trust
Fund.
216
Gubat Unqualified
Irosin Unqualified
Juban Qualified  Unreconciled PPE balances between the General Ledger and the
Report on the Physical Count of Property, Plant and Equipment by
P4.360 million;
 Uncollected receivables amounting to P2.660 million raised doubts

on the accuracy and reliability of these records and fair
presentation of related accounts in the Financial Statements; and,
 Reconciling items which remained unadjusted for more than eight

years overstated the reported Cash in Bank, Local Currency –
Current Account (LCCA) balance by as much as P.990 million.
Magallanes Qualified  PPE account balance is unreliable because (a) PPE balances per
books and per RPCPPE are unreconciled by P40.570 million; and,
(b) 72 untitled real property units with tax declarations in the name
of the Municipal Government were not recognized as PPE in the
books since ownership is still to be verified; and,
 Cash in Bank reconciling items amounting to P8.980 million remain

unidentified and unadjusted in the books of accounts.
Matnog Qualified  PPE accounts balance are unreliable due to unverified amount of
P21.160 million and non-existent equipment amounting to P1.700
million was provided with depreciation which resulted in
understatement of total assets and total equity by P1.310 million.
Pilar Unqualified
Prieto Diaz Qualified  PPE balances are unreliable due to unverified amount of P24.500
million and PPE costing P81.950 million were not provided with
depreciation;
 Prior years transactions amounting to P23.900 million were

erroneously adjusted in CY 2018 and transactions in CY 2018
amounting to P7.130 million were erroneously recorded thus
resulted in overstatement of total assets by ₱6.83 million,
overstatement of total liabilities by P15.040 million and
understatement of government equity by P8.220 million; and,
 Trust Liability - Disaster Risk Reduction Management Fund

(DRRMF) balance of P6.500 million is unreliable because of
erroneous recording.
Santa Magdalena Qualified  PPE balances per book and per RPCPPE were unreconciled by
P23.800 million and PPE costing P12.710 million were not provided
with depreciation;
217
 CIB-LCCA balances is unreliable because (a) balances per
accounting records and treasury records were not reconciled by net
amount of P2.400 million; (b) book reconciling items amounting to
P.880 million remained unadjusted in the book of accounts; and
BRS were not submitted for ten bank accounts with total book
balance of P1.340 million.
REGION VI – Western Visayas

Aklan Qualified  Local Roads Asset Management System have not been fully
complied with which resulted to the non-recognition or non-
presentation of the Road Lot component of the Infrastructure
Assets, hence, Property, Plant and Equipment in the financial
statements is understated by P436.793 million;
 Unserviceable and lost government properties totaling P153.230

million forms part of the Report on the Physical Count of Property,
Plant and Equipment and are still included in the Books of
Accounts, thereby overstating the Property Plant and Equipment
accounts;
 Controls and policies on the grant, utilization and liquidation of fund

transfer to various Local Government Units (LGUs) were not
established and imposed which resulted to the
unusual/uncharacteristic accumulation to P98.516 million of the
fund transfer, hence, overstated the reported Due from LGUs
account and casted doubt on whether or not the funds were actually
used for its intended purpose;
 Report on the Physical Count of Property, Plant and Equipment

lacks vital information which renders it incomplete and unreliable
and the same was not duly reconciled with the balances per books
which resulted to a discrepancy of P49.922 Million between the two
records, hence, the validity, existence and accuracy of the PPE
accounts could not be ascertained;
 Cash advances to officers and employees amounting to P21.017

million remained unliquidated resulting to its accumulation as of
year-end, thereby overstating the receivable accounts and
understating the expense accounts; and,
 P933.123 million Cash-in-Bank – Local Currency, Current Account

balance in the financial statements are not assured due to the non-
adjustment in the books of the long outstanding reconciling items
in the Bank Reconciliation Statements amounting to P5.779 million.
Municipalities
Altavas Qualified  Complete actual physical count of the Property, Plant and
Equipment (PPE) amounting to P84.942 million was not conducted;
218
 Correctness of Land valued at P2.677 million is not ascertained due
to lack of RPCPPE, property records, subsidiary ledger and
Torrens Title;
 PPE amounting to P36.313 million were not provided with

depreciation;
 Accounts Payable amounting to P6.671 million which has been

outstanding in the books for more than two years were not reverted
to the General Fund;

difference of P1.270 million and (6) Stale checks amounting to
P.066 million remained unadjusted in the books of accounts.
Balete Qualified  Physical count of the Property, Plant and Equipment (PPE)
amounting to P225.261 million was not conducted;
 Land valued at P.910 million is not ascertained due to lack of

RPCPPE, property records, subsidiary ledger and Torrens Title;
and,
 Due from other Funds and Due to Other Funds showed a difference
of P.088 million; and,

the books of accounts.
Banga Qualified  Property, Plant and Equipment (PPE) accounts in the total amount
of P186.526 million could not be established nor a Report on the
Physical Count of Property, Plant and Equipment (RPCPPE) was
prepared or submitted due to the failure of the Inventory Committee
to conduct physical count of PPE, thus, rendering the accounts
doubtful and failure to issue Property Acknowledgment Receipt
(PAR) on properties issued to officials and employees, thus,
property accountability could not be easily established; and,

million remained unliquidated, resulting to its accumulation as of
year-end, thus, overstating the receivable accounts, understating
the expense accounts.
Batan Qualified  Failure of the agency to complete the physical count of its PPE
 PPE amounting to P35.964 million were not provided with

depreciation;

difference of P2.023 million;
 Land valued at P1.157 million is not ascertained due to lack of

RPCPPE, property records, subsidiary ledger and Torrens Title;

million remained unliquidated;
219
 Receivables amounting to P.423 remained outstanding and
dormant in the books for more than 8-10 years; and ,
 Stale checks amounting to P.022 remained unadjusted in the

books of accounts.
Buruanga Qualified  Property, Plant and Equipment (PPE) amounting to P103.699

million which is equivalent to 53% of the total assets of P196.218
million cannot be validated due to the non-completion of the
physical inventory.
Ibajay Qualified  Property, Plant and Equipment (PPE) with a net carrying value of
ascertained since the management was not able to complete the
inventory taking of its PPE and to submit the Report on the Physical
Count of Property, Plant and Equipment (RPCPPE); and,
 Turn-over of collections and control in the issuance of Accountable

Forms (AF) to Revenue Collections Officers (RCO) were not strictly
enforced by the Municipal Treasurer resulting to unremitted
collections amounting to P3.114 million and more, thus, resulting
to understatement of cash and cash equivalent.
Kalibo Qualified  Unable to conduct physical count of its Property, Plant and
Equipment (PPE) with a total cost of P715.836 million as of
December 31, 2018, hence, existence, condition, accuracy and
validity of the recorded PPE could not be ascertained;
 Accumulation of long outstanding reconciling items in the Bank

Reconciliation Statements which remained unadjusted casting
doubt on the reliability of the Cash in Bank-Local Currency, Current
Account balance of P122.439 million; and,
 Inter-Agency Receivable Accounts totaling P0.877 million reflected

in the Year-End Financial Statements were not supported with
subsidiary ledger balances casting doubts on the validity of its
existence.
Lezo Qualified  Property, Plant and Equipment (PPE) with a net carrying value of
P55.533 million as of December 31, 2018 could not be ascertained
due to the failure of the Municipality to complete the inventory
taking of its PPE and to submit the Report on the Physical Count
of Property, Plant and Equipment (RPCPPE);
 Some depreciable Property, Plant and Equipment (PPE)

amounting to P53.927 million were not provided with depreciation;
 Accounts Receivable, Other Receivables, Due from NGAs, Notes

Receivables and Due from LGUs amounting to P1.409 million
which remained dormant in the books for more than 10 years were
not acted upon to facilitate the proper write-off of these accounts;
and
 Cash advances to officers and employees amounting to

P.267million remained unliquidated as of December 31, 2018.
220
Libacao Qualified  Property, Plant and Equipment (PPE) accounts in the total amount
of P190.191 million could not be established nor a Report on the
Physical Count of Property, Plant and Equipment (RPCPPE) was
prepared or submitted due to the failure of the Inventory Committee
to conduct physical count of PPE and failure to issue Property
Acknowledgment Receipt (PAR) on properties issued to officials
and employees, thus, property accountability could not be easily
established;
 Due to Pag-ibig account has a debit/negative and unreconciled

balance amounting to P.009 million, thereby, causing misstatement
in the Financial Statement; and,

million remained unliquidated, resulting to its accumulation as of
year-end, thus, overstating the receivable accounts, understating
the expense accounts.
Madalag Qualified  Reconciliation of the Report on the Physical Count of Property,

Plant and Equipment (RPCPPE) and balances per books was not
made by the Municipal Supply/Property Unit and Accounting Office,
resulting to a discrepancy of P23.775 million, hence, validity,
existence and accuracy of the recorded PPE could not be
ascertained.
Makato Qualified  Inter-Agency Receivable Accounts totaling to P1.612 million were

not supported with complete subsidiary ledger information and
documents casting doubt on the validity of its existence; and,
 Absence of updated Property Cards and non-conduct of physical

count of P129.373 million Property, Plant and Equipment as of
year-end casting doubt on the existence and validity of the
recorded PPE balance in the books of the Municipality.
Malay Qualified  Property, Plant and Equipment (PPE) amounting to P465.305

million or 40.12% of the total assets of P1.160 million cannot be
validated due to the non-completion of the physical inventory.
Malinao Qualified  Some depreciable Property, Plant and Equipment (PPE)

amounting to P126.735 million were not provided with depreciation
resulting to overstatement of PPE accounts and changes in net
assets/equity as reflected in the Statement of Financial Position
and understatement of depreciation expenses as reflected in the
Statement of Financial Performance, thus, affected the fair
presentation of the accounts in the financial statements; and,
 Due from NGAs, Due from GOCCs, Due from LGUs, Loans
Receivable-Others and Other Receivables amounting to P2.844
million which remained dormant in the books for more than 10
years were not acted upon to facilitate the proper write-off of these
accounts, resulting in the overstatement of agency assets.
221
Nabas Qualified  Failure to submit complete financial reports such as Statement of
Comparison of Budget and Actual Amounts and any required
supporting schedules, thus not able to ascertain the correctness
and validity of the accounts and its balances and unable to maintain
adequate accounting records such as ledgers or books of final
entry.
New Washington Qualified  Non-preparation of bank reconciliation statements, hence, any

adjustments or reconciling items between the book balance and the
bank balance could not be ascertained casting doubt on the
correctness and accuracy of the P124.685 million Cash in Bank–
Local Currency, Current Account balance presented in the
agency’s Financial Statements; and,
 Receivable account balances totaling P11.657 million were not

supported with schedules of its subsidiary ledger balances
rendering the account of doubtful validity and existence; and
existence of negative balances in the agency’s Due to BIR and Due
to GSIS account under General Fund (Proper) causing
misstatement in the financial statements.
Numancia Qualified  Property, Plant and Equipment (PPE) amounting to P74.912 million
were not provided with depreciation resulting to overstatement of
PPE accounts and changes in net assets/equity as reflected in the
Statement of Financial Position and understatement of
depreciation expenses as reflected in the Statement of Financial
Performance, thus, affected the fair presentation of the financial
statements;
 Due from LGUs, Due from NGO’s/POs and Other Receivables

amounting to P.835 million which remained dormant in the books
for more than 10 years were not acted upon to facilitate the proper
write-off of these accounts, resulting in the overstatement of
agency assets; and,
 Cash advances to officers and employees amounting to P.343

million remained unliquidated as of December 31, 2018, resulting
to its accumulation and understated the total expenses and
overstated the government equity and total receivables, thus
affecting its fair presentation in the financial statements.
Tangalan Unqualified
Antique Qualified  539 claimed DVs amounting to P137.737 million were not yet
submitted for audit as of January 31, 2019 hindering timely audit
work; and,
 Difference of P60.356 million in the balances of Property, Plant and

Equipment (PPE) accounts per accounting records and per Report
of Physical Count of Property, Plant and Equipment (RPCPPE)
thus, the reliability and accuracy of the said accounts are doubtful.
222
Municipalities
Anini-y Qualified  Non-reconciliation of the accounting and property records on
Property, Plant, and Equipment (PPE) accounts amounting to
P48.118 million net of depreciation or 42.13 per cent of the total
assets of the Municipality which rendered the financial statements
doubtful as to the accuracy, existence and completeness of the
PPE balances.
Barbaza Qualified  Property Plant and Equipment (PPE) valued at P 74.137 million
could not be ascertained because the physical count of PPE was
not conducted regularly, variance of P 23.196 million also exists
between the Report of the Physical Count of Property, Plant and
Equipment (RPCPPE) and the combined statement of financial
position and unserviceable properties amounting P .446 million
were not disposed resulting to overstatement of assets and
government equity accounts in the financial statements; and,
 Real Property Tax (RPT) Receivables and Special Education Fund

(SEF) Tax Receivables totaling P3.412 million were doubtful since
the amounts recorded in the books by the Municipal Accountant did
not reconcile with the balance of receivables prepared by the
Municipal Assessor resulting to a difference of P1.053 million.
Belison Qualified  Property, Plant and Equipment (PPE) valued at P79.112 million
could not be ascertained because the physical count of PPE
conducted by the agency was incomplete and unserviceable
properties amounting P.256 million were not disposed resulting to
overstatement of assets and government equity accounts in the
financial statements; and,

not reconcile with the Certified List of All Real Property Tax
Delinquencies prepared by the Municipal Treasurer.
Bugasong Qualified  Failure to conduct physical inventory and to reconcile the records of
its Property, Plant and Equipment valued at P162.573 million as of
December 31, 2018; and,
 Non-reconciliation of ledger balances and cashbook balances of the

Cash – Local Treasury and Cash in Bank – Local Currency Current
Account which resulted to accumulated differences of P.892 million
and P61.495 million, respectively, also rendered the amounts
presented in the financial statements doubtful and unreliable.
Caluya Qualified  Incomplete inventory of Property, Plant and Equipment (PPE)

amounting to P20.569 million and unserviceable properties
amounting to P8.418 million are still carried in the books; and,
 Cash account because book reconciling items totaling P18.575

million remained unrecorded at year end.
223
Culasi Qualified  Property, Plant and Equipment (PPE) accounts totaling P150.472
million per books as of December 31, 2018 were not reconciled to
PPE records per count because the preparation of the Report on
the Physical Count of Property, Plant and Equipment (RPCPPE)
was accomplished only after the preparation of the year-end
financial statements and PPE ledger cards and property cards
were not maintained; and,
 Property, Plant and Equipment (PPE) constructed and/or procured

out of the Municipality’s Trust Fund from CY 2016 to CY 2018 with
acquisition costs totaling P27.736 million were not recorded and
recognized in the books.
Hamtic Qualified  Failure to conduct a physical inventory of Property, Plant and

Equipment (PPE) and reconcile accounting and property records
which resulted to the doubtful existence and accuracy of the PPE
account totaling P175.157 million or 57.51% of the total Assets of
P304.544 million.
Laua-an Qualified  Property, Plant, and Equipment (PPE) valued at P96.050 million
as of December 31, 2018 were doubtful due to failure of the
management to conduct the physical count of its Property, Plant,
and Equipment and non- submission of Report of Physical Count
of PPE to the Office of the Auditor; and,
 Construction in Progress Account is unreliable due to the effects

of non- transfer of completed projects of P10.509 million to
appropriate asset account, therefore, the corresponding
accumulated depreciation and depreciation expense were not
recongnized.
Libertad Disclaimer  Management had not submitted the transaction documents of the
Municipality of Libertad for the period from April to December 2018
for the General and Trust Fund.
Pandan Qualified  Property, Plant and Equipment (PPE) accounts are doubtful and
not reliable because Property, Plant and Equipment (PPE)
accounts totaling P111.713 million per books as of December 31,
2018 were not reconciled to PPE records per count because the
Municipality did not conduct physical inventory of PPE, submit the
(RPCPPE) and maintain the prescribed property cards and
property ledger cards.
Patnongon Qualified  Failue to conduct physical inventory and to reconcile the records
of its Property, Plant and Equipment valued at P122.934 million as
of December 31, 2018.
San Jose Qualified  Property, Plant and Equipment (PPE) valued at P229.36 million as
of December 31, 2018 were doubtful due to non-submission of
Report of Physical Count of PPE to the Office of the Auditor.
San Remigio Qualified  Property, Plant, and Equipment (PPE) valued at P148.326 million
as of December 31, 2018 were doubtful due to failure of the
management to conduct the physical count of its Property, Plant,
and Equipment and non- submission of Report of Physical Count
of PPE to the Office of the Auditor.
224
Sebaste Qualified  Property, Plant and Equipment (PPE) valued in the books at
P197.976 million; P465.305 million as of December 31, 2018
remained doubtful due to failure to conduct physical inventory and
prepare a report thereof, property cards and property ledger cards
were not maintained by the property custodian and accountant
respectively and depreciation expenses were not provided for the
properties of the Municipality.
Sibalom Adverse  Property Plant and Equipment (PPE) valued at P237.165 million
could not be ascertained since physical count was not conducted
and no report was submitted thereon;
 Cash in Bank appearing on the statement of financial position at

reconciliation of balances of the said account in the cashbooks of
the Municipal Treasurer, subsidiary ledgers maintained by the
Municipal Accountant and results of bank confirmation inquiries;

not reconcile with the balance of receivables prepared by the
Municipal Assessor resulting to a difference of P.846 million;
 Unserviceable properties amounting P1.725 million were not

disposed resulting to overstatement of assets and government
equity accounts in the financial statements;
 Receivable accounts totaling P0.952 million were written-off in the

books without proper authority/approval from the Commission on
Audit (COA) and write-off of said accounts were also debited to the
Prior Period Adjustment account, thus affecting the fair
presentation of the financial statements due to the understatement
of receivables and government equity account;
 Fund transfers to Non-Governmental Organizations (NGOs) or

People’s Organizations (POs) amounting P.772 million remained
unliquidated as of year-end causing the assets and government
equity accounts to be overstated;
 Cash advances for travel totaling P.409 million were not also
liquidated resulting to overstatement of receivables and
understatement of expenses;
 Stale checks with a total amount of P.327 million remained

outstanding in the bank reconciliation statements as well as long
outstanding accounts payables related to these checks were
unadjusted in the books, thus understated the cash in bank,
accounts payable and government equity accounts in the financial
statements; and,
 Due from Local Government Units account reflected in the

statement of financial position at P.195 million was not reliable
since fund transfers to NGOs/POs remained unliquidated as of
year-end causing the assets and government equity accounts to be
overstated.
225
Tibiao Qualified  Property, Plant and Equipment (PPE) accounts totaling P53.791
million per books as of December 31, 2018 were not reconciled
to PPE records per count because the preparation of the Report
(RPCPPE) was accomplished only after the preparation of the
year-end financial statements and PPE ledger cards and property
cards were not maintained; and,
 Property, Plant and Equipment (PPE) constructed and/or

procured out of the Municipality’s Trust Fund from CY 2016 to CY
2018 with acquisition costs totaling P35.538 million were not
recorded and recognized in the books.
Tobias Fornier Unqualified
Valderrama Qualified  Failure to reconcile the records and to submit the required report
on the physical inventory of its Property, Plant and Equipment
valued in the books at P132.554 million as at year end.
Capiz Qualified  Twenty seven parcels of land owned by the Capiz Provincial
Government with a total land area of 507,834 square meters
valued at P317.36 million were not recorded in the books of
accounts which resulted to understatement of Land and Equity
accounts.
City
Roxas City Qualified  Non-liquidation of cash advances totaling P6.611 million as of
 Annual physical inventory of Property, Plant and Eequipment

(PPE) totaling P1.262 billion as of December 31, 2018 was not
conducted as required by existing rules and regulations, thus,
validity, existence and condition of the PPE account remain
doubtful as validation could not be conducted.
Municipalities
Cuartero Unqualified
Dao Unqualified
Dumalag Qualified  Non-liquidation of cash advances totaling P3.245 million; and,
 Failure to conduct the annual Physical Inventory of Property Plant

and Equipment (PPE) as of December 31, 2018 with the Property
Ledger Cards and PPE General Ledger (GL) balances as of
December 31, 2018 totaling P242.316 million.
Dumarao Qualified  Non-moving receivable accounts of the Municipality totaling

P2.717 million, the possibility of collection of which is nil,
remained in the books of the Municipality, thereby affecting the
reliability and fair presentation of the receivable accounts in the
financial statements
226
 Eight (8) parcels of land claimed by the Municipality with a total
market value of P17.065 million were not registered under the
Torrens Title System and were not recorded in the agency books
thereby resulting to understatement of Land account as of
December 31, 2018.
Ivisan Qualified  Property, Plant and Equipment of P109.843 million cannot be

ascertained due to the following: (a) Failure of the Inventory
Committee to submit the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE); and,
 Failure of the Municipal Accountant and Supply Officer to

maintain and reconcile the Property, Plant and Equipment Ledger
Cards (PPELC) and Property Cards (PC), respectively.
Jamindan Qualified  Physical inventory of the Property Plant and Equipment (PPE)
amounting to P131.307 million was not conducted, thus, the
correctness, accuracy and existence of the reported PPE, as well
as property accountability may not be ascertained; and,
 Non-moving and dormant accounts totaling P1.934 million as of

December 31, 2018 remained in the books of the Municipality,
thus, casting doubt as to the reliability of the account balances
presented in the Financial Statements (FS).
Maayon Qualified  Non-conduct of physical inventory for property, plant and

equipment totaling P186.278 million, thus, the correctness,
accuracy and existence of the reported PPE, as well as property
accountability may not be ascertained; and,
 Non-liquidation of cash advances for travel amounting P.459

million as of December 31, 2018, resulted in the overstatement of
equity and understatement of expense accounts.
Mambusao Qualified  Physical inventory of the Property, Plant and Equipment (PPE)
amounting to P284.158 million was not conducted thus, the
as property accountability could not be ascertained; and,
 PPE with a total acquisition cost of P217.341 million were not

provided with depreciation, thus overstating the PPE accounts
and understating expense accounts.
Panay Qualified  Non-enforcement of tax collections from taxes of delinquent

taxpayers on real property including penalties totaling P 8.100
million; and,
 Non-registration of assets owned by the LGU under the Torrens

Title System deter absolute possession of the LGU, thereby
influence the accuracy of the assets and net worth of the agency.
227
Panitan Qualified  Property, Plant and Equipment carried in the statement of
financial position at December 31, 2018, includes
unserviceable/obsolete properties in the LGU’s records that
indicate an overstatement of the assets and net worth of the LGU
totaling P21.600 million; and,
 Non-provision of depreciation for road networks amounting to

P6.300 million affects the net value of the infrastructure assets at
a given period which also constitute a departure from IPSASs.
Pilar Unqualified
Pontevedra Qualified  PPE account of the Municipality was rendered doubtful, in view
non-recognition of lands owned by the LGU in the Land Accounts
with the year-end balance of P1.185 million which casted doubt
on the reliability and accuracy of the said account.
President Roxas Qualified  Cash advances totaling P.507 million remained

unliquidated/unsettled as of December 31, 2018, resulted in the
overstatement of equity and understatement of expense
accounts; and,
 Physical inventory of properties totaling P221.186 million as of

December 31, 2018 was not conducted and a report on the
physical count was not submitted to the Audit Team, thus, the
as property accountability may not be ascertained.
Sapian Qualified  Property, Plant and Equipment of P136.426 million cannot be

Committee to conduct Physical Inventory and submit the Report
(RPCPPE); and,
 Failure of the Municipal Accountant and Municipal Treasurer to

Sigma Qualified  Failure to recognize in its books of accounts the additional income
totalling P.622 million for CY 2018, which could have been
generated from the operations of Public Market had the
provisions contained in the Municipal Revenue Code were strictly
enforced and which could have been utilized to implement
meaningful programs of the LGU;
 Several non-moving and dormant accounts amounting to P3,132

million as of December 31, 2018 remained in the books of the
Municipality thus, casting doubt as to the reliability of the account
balances presented in the Financial Statements (FS); and,
228
 Due to Other Funds account in the amount of P3.609 million as

of December 31, 2018 in the Trust Fund book had no
corresponding Due from Other Funds account in other funds,
thus, rendering the correctness and accuracy of the recorded
transactions doubtful.
Tapaz Qualified  Inadequate monitoring of the Status of Unliquidated Cash

Advances for Advances to Officers and Employees amounting
to P.398 million as of December 31, 2018, resulted in the
overstatement of equity and understatement of expense
accounts; and,
 Property, Plant and Equipment of P189.461 million cannot be

Committee to conduct Physical Inventory and submit the Report
(RPCPPE); and,
 Failure of the Municipal Accountant and Municipal Treasurer to

Guimaras Qualified  Cash advances for travel and specific purpose totaling P4.178
million aged over 30 days to over 1 year remained unliquidated
as of year-end and additional cash advances were granted
despite non-liquidation of previous cash advances;
 Due from LGUs of the Province and Due to LGUs of the

Municipalities for the collections of Real Property Taxes (RPT)
and Special Education Taxes (SET) had a difference of P17.438
million due to non-reconciliation of accounts at year-end;
 Receivables totaling P3.842 million aged two years to over ten

(10) years remained uncollected, due to lack of information and
incomplete records;
 Reliability of the PPE accounts totaling P1.993 billion, cannot be

ascertained due to a difference of P1.311 billion between the
accounting records and the Report on Physical Count of Property,
Plant and Equipment (RPCPPE);
 Petty Cash Fund totaling P.018 million aged over five (5) years
remained unliquidated as of year-end;
 Accounts Payable and Other Payables amounting to P.604

million and P4.736 million, respectively, aged over 2 years and
not supported with valid claims were not reverted to the
unappropriated surplus;
229
 Fund Transfers in CY 2016-2017 to different municipalities and

barangays of Guimaras intended for specific purposes totaling
P28.638 million, remained unliquidated as of December 31, 2018,
due to lack of emphasis on the specific period of project
implementation. Liquidation totaling P2.386 million was also
recorded in the books despite the absence of documents;
 Expenditures amounting P.187 million for labor directly

associated with construction of water supply facilities were
recorded as expense instead of the appropriate asset account;
and,
 Expenditures amounting to P13.440 million were not recorded to

its appropriate expense accounts as prescribed under COA
Circular No. 2015-009 dated December 1, 2015, instead they
were recorded under Other MOOE (Account 5-02-99-990).
Municipalities
Buenavista Qualified  Unreconciled PPE accounts with a difference of P1.991 million;
 Unreconciled Due to LGUs account with a difference of P1.609

million; and,
 Unliquidated cash advances amounting to P.151 million.
Jordan Qualified  Property, Plant and Equipment balances totaling P103.933

million due to non-submission of the Report on Physical Count of
Property, Plant and Equipment (RPCPPE);
 Property, Plant and Equipment totaling P76.433 million were not

provided with depreciation expense; and,
 Variance amounting P3.267 million resulted from the non-

reconciliation of Due From/Due To accounts between the books
of the Municipality and the Province of Guimaras.
Nueva Valencia Qualified  Non-reconciliation of Property, Plant and Equipment (PPE)

balances in the books of account with the balances presented in
the Report on Physical Count of Property, Plant and Equipment
(RPCPPE) which resulted to a difference of P138.103 million;
 Completed projects recorded as Property, Plant and Equipment

(PPE) in the Trust Fund (TF) totaling P29.080 million were not
transferred to the General Fund (GF) and were not depreciated;
 Non-reconciliation of Due From/Due To accounts between the

Municipality and the Provincial Government resulted to a
difference of P10.895 million;
230
 Construction In Progress (CIP) account was overstated by

P5.605 million due to the failure to transfer the completed projects
to their appropriate Infrastructure Asset accounts;
 Depreciation expenses estimated at P4.537 million for properties

totaling P101.056 million were not provided ; and,
 Dormant accounts totaling P2.609 million remained in the books

for 10 years and were not written off.
San Lorenzo Qualified  Unreliable reported PPE with net book value totaling P80.053
million due to non-submission of RPCPPE;
 Unreconciled reciprocal accounts (Due From/To LGUs) between

the Municipal Government and the Provincial Government with a
 Non-transfer of Construction in Progress to its appropriate

Property, Plant and Equipment accounts totaling P9.900 million;
 Long outstanding Accounts Payable under the General Fund

totaling P.373 million;
 Unliquidated cash advances amounting to P.282 million; and,
 Non-provision of allowance for impairment on receivables from

Non-Government Organizations (NGOs) amounting to P.078
million.
Sibunag Qualified  Unreliable reported PPE with net book value totaling P75.458
million due to non-submission of RPCPPE;
 Non-reclassification of Construction-in-Progress to appropriate

PPE accounts for completed project totaling P2.998 million;
 Non-provision of depreciation estimated at P2.564 million for

properties totaling P57.133 million;
 Unreconciled Due to LGUs with the recorded receivables of the

Province resulting to a difference of P2.435 million;
 Non-transfer of completed projects recorded as PPE in the Trust

Fund to the General Fund totaling P2.312 million; and,
 Unliquidated cash advances granted in CY 2011 and earlier

amounting to P.225 million and in CY 2012 to 2018 in the amount
of P.287 million, or totaling P.512 million.
231
Iloilo Qualified  Land owned and controlled by the Iloilo Provincial Government
(IPG) were not monitored and duly accounted in the Report on
the Physical Count of Property Plant and Equipment; and neither
were deeds of usufruct, contracts of lease or similar documents,
authorizing other government or private entities to use the same,
appropriately kept and maintained, thereby understating the
account balance by P408.993 million;
 System of controls, policies and procedures were not established

and the work plan for Asset Management and monitoring was not
updated that resulted in the inefficiency of reconciliation,
redundancy and duplication of the work and functions performed
by the GSO personnel, hence increasing the unreconciled
balance of Property, Plant and Equipment between the RPCPPE
and the Accounting Ledger to P390.252 million.
 Several accounts in the Iloilo Provincial Government’s Financial

Statements as of December 31, 2018 contained dormant/non-
moving, unreconciled, unidentified and unsupported subsidiary
ledger balances totaling P212.178 million, thus, management
assertions on existence, occurrence, valuation, and rights and
obligations cannot be validated, and rendered the concerned
account balances unreliable;
 Failure to conduct annual physical count of the Inventory Held for

Consumption while the concerned Iloilo Provincial Government
Offices did not regularly prepare and submit Requisition and
Issue Slips for the periods such were issued or utilized and
matching principle of accounting, consequently expenses or
construction in progress accounts were understated while the
corresponding inventory accounts were overstated, increasing
the Inventory Held for Consumption Account balance to P395.095
million casting doubts on its accuracy, existence and reliability.
 Adjusting entries for Cash reconciling items totaling P65.119

million were not drawn due to the failure of the Provincial
Treasurer’s Office and Provincial Engineering Office to forward
the disbursement vouchers and letters of credit for the purchase
of various equipment, respectively, undocumented bank debit
and credit memoranda, long standing deposit in transit and
outstanding check, and delayed preparation of bank
reconciliation statements, rendering the accuracy and reliability of
Cash in Bank balances doubtful;
Provincial Livelihood Program Loans Receivable from various

Civil Society Organizations (CSOs) totaling P49.836 million were
not periodically verified and validated, inconsistent with Section
7.0 of COA Circular No. 2016-005, thus no reconciliations were
made with the records of the Provincial Cooperative Development
Office while receivables from non-operating and inexistent CSOs
232
were not requested write-off, casting doubts on its existence and
reliability of the account;
 Government Equity balance of P26.998 million in the Trust Fund

remained unadjusted, thereby affecting the fair presentation of
the financial statements;
 Differences of the actual amounts in the Statement of

Comparison of Budget and Actual Amounts with that of the
Statement of Financial Performance totaling P80.248 million and
P7.193 million in the General and Special Education Fund,
respectively, were not identified and reconciled, thereby limited
transparency and hindered the public from validating whether the
entity is discharging its accountability obligations;
 Appropriate accounting policies, adequate maintenance of

Subsidiary Ledgers, and periodic reconciliation and verification of
account balances were not carried out, resulting in idle and
unidentified receivables and payables in three IPG District
Hospitals totaling P14.978 million and unreliable balance of
inventory account amounting to P17.268 million, inconsistent with
the fair presentation of financial statements.
Cities
Iloilo City Qualified  Book reconciling items reflected in the Monthly Bank
Reconciliation Statements (BRS) totaling P59.431 million remain
unadjusted/unrecorded in the books of accounts, thus, rendered
the accuracy of the Cash in Bank account doubtful and monthly
BRS were not submitted within the reglementary period,
preventing the auditorial review and early detection of any errors
and/or irregularities;
 Due from Other Funds and Due to Other Funds intra-agency

receivable payable accounts for all funds do not reconcile by
P13.578 million as of December 31, 2018, resulting in the
unreliable balance of the said accounts in the financial
statements;
 Cash advance for travel and special purpose granted in CY 2012

to CY 2018 totaling P7.972 million remained
unsettled/unliquidated as of December 31, 2018, thus, may result
in the understatement of the related expense accounts and
exposed government funds to the risk of possible misuse and
loss;
 Advances to Officers and Employees and Other Receivables

account balances amounting to P.476 million granted in CY 2011
and earlier remained unliquidated, thereby affecting the fair
presentation of the affected accounts in the financial statements;
233
 Purchases of medicines, chemicals and medical, dental and
laboratory supplies amounting to P22.088 million were recorded
as outright expenses, , thus, resulted in the overstatement and
understatement of the expense and inventory accounts
respectively and possible inventory misuse or loss;

(RCPPE) was not submitted with the prescribed period, thus,
precluding auditorial review and casting doubt on the existence,
accuracy and completeness of the Property, Plant and Equipment
(PPE) account balances at year end amounting P3.569 billion;
 Property Plant and Equipment (PPE) SL balances amounting to

P798.712 million as of December 31, 2018 were not supported
with schedules or details, thus, may result to doubtful reliability of
the account balances in the financial statements;
 Construction in Progress (CIP) accounts totaling P90.560 million

remain unadjusted/transferred to its appropriate asset accounts,
of which P57.120 million had been completed/sold and P33.440
million have no details or schedules, rendering the correctness
and reliability of the asset and CIP accounts doubtful; and,
 Other Payables account amounting to P138.260 million as of

December 31, 2018 is doubtful due to the existence of the
following subsidiary ledger account balances: (a) unreconciled
and/or no detail/schedule and negative balances of P91.200
million and P10.250 million respectively, settlement of audit
disallowances of P3.660 million, stale checks of P.913 million,
various collections held in trust, and prior year’s unclaimed
accounts, thereby, affecting the fair presentation of the affected
accounts in the financial statements.
Passi City Qualified  Property, Plant and Equipment totaling P1.444 billion as per Report
on the Physical Count of Property, Plant and Equipment (RPCPPE)
for CY 2018 were not reconciled with the property, plant and
equipment account in the general ledger, hence, the existence and
correctness of the Property, Plant and Equipment accounts as of
December 31, 2018 were uncertain.
Municipalities
Ajuy Qualified  Property Plant and Equipment (PPE) accounts as of December
31, 2018 amounting to P79.379 million were doubtful because the
Municipal Officials/Personnel responsible did not conduct
physical inventory and prepare the Report on the Physical Count
of PPE and PPE Ledger Cards, hindering the reconciliation of
balances between the Accounting and General Services Office;
and the Municipal Officials were not able to dispose
unserviceable properties and insure and register various
vehicles, thus the accuracy, completeness, existence and legal
rights on the PPE cannot be ascertained;
234
 Cash–Local Treasury totaling P4.940 million remained

undeposited as of December 31, 2018, thus rendered the
correctness of the account doubtful and may expose government
funds to possible loss or misapplication;
 Cash advances totaling P.810 million remained unliquidated as of

year-end, thereby overstating the asset account and understating
the concerned expense accounts and exposing the funds to risk
of misapplication; and,
 Due from Other LGUs account of the Municipality amounting to

P.808 million was not ascertained due to lack of documents to
validate the beginning balance, non-recognition of refund by one
Barangay and non-liquidation by other recipient Barangays; and
the Memorandum of Agreement between the Municipality and
each beneficiary Barangay on the fund transfer, as local
counterpart in the KALAHI CIDSS-NCDDP, was not executed.
Alimodian Qualified  Cash in Bank-Local Currency, Current Account amounting to

P33.023 million is doubtful because of unreconciled balances of
cashbook-treasury and accounting records, non-submission of
monthly Bank Reconciliation Statements and unrecorded book
reconciling items thereon;
 Erroneous charging of cash advances amounting to P.080

million,000.00;
 Property Plant and Equipment account amounting to P185.440

million is also doubtful caused by the failure to conduct physical
inventory of all its property;
 Non-provision of allowance for depreciation for depreciable

assets totaling P17.579 million; and,
 Non-submission of disbursement vouchers amounting to P8.534

million.
Anilao Qualified  Property Plant and Equipment accounts amounting to P140.664

million could not be ascertained because the Municipality has not
conducted a complete physical inventory of its properties and
Equipment to the Auditor;
 Year-End balance of Cash Local Treasury account amounting to

P1.008 million as of December 31, 2018 remained doubtful due
to the discrepancies between the records of the Accounting and
Treasury Offices in the amount of P.654 million;
235
 Cash advances amounting to P.440 million remained outstanding
as of December 31, 2018, thereby overstated the asset account
and understated the concerned expense accounts and exposed
the funds to risk of misapplication;
 Bank Reconciliation Statements with the paid checks and original

copies of the Debit and Credit Memos were not submitted by the
Acting Municipal Accountant to the Auditor, thus correctness and
reliability of the Cash in Bank balances totaling P60.003 million
could not be ascertained.
Fund, Special Education Fund and Trust Fund, showed a total
difference of P10.504 million, thereby casting doubt on the
correctness of the balances of said accounts;
 Complete Subsidiary Schedules of General Ledger Accounts

were not submitted, hence correctness and reliability of the
submitted reports were not assured; and,
 Reconciliation between actual amounts on a comparable basis as

presented in Statement of Comparison of Budget and Actual
Amounts and in the Statement of Financial Performance and
Reconciliation of Net Cash Flows from Operating Activities to
Surplus/ (Deficit) for the year ended December 31, 2018 were not
presented for verification, casting doubt on the correctness of the
affected accounts in the financial statements.
Badiangan Qualified  Property, Plant and Equipment (PPE) accounts as at December

31, 2018 valued at P102.372 million may not be properly
presented in the statement of financial position caused by the
failure of the municipality to submit an inventory report and to
reconcile PPE accounts with accounting records contrary to
concerned regulations.
Balasan Qualified  Incomplete physical inventory on Property, Plant and Equipment

(PPE) and submitted the corresponding inventory report beyond
the prescribed deadline of submission, thus rendered the
accuracy and existence of the PPE accounts amounting to
P101.349 million doubtful;
 Land, with aggregate Market Value and Assessed Value of

P268.645 million and P23.464 million, respectively, under the
name of the Municipality were not recorded in the books of
accounts, thus resulted to the understatement of both Land and
Equity accounts; and,
 Failure to recognize the Local Road Network in the books of

accounts which understated both the asset and equity accounts,
thus affected the fair presentation of the financial statements.
236
Banate Qualified  Property Plant and Equipment (PPE) accounts as of December
31, 2018 amounting to P123.124 million were doubtful because
the Municipal Officials/Personnel responsible did not (a) conduct
of PPE, hindering the reconciliation of balances between the
Accounting and General Services Office; and (b) dispose
unserviceable properties, thus the accuracy, completeness and
existence of the PPE cannot be ascertained;

outstanding as of December 31, 2018, due to (a) non-liquidation
within the prescribed period; (b) granting of additional cash
advances to accountable officers although previous advances
were unsettled/unliquidated; and (c) non-observance of
guidelines on the write-off of dormant unliquidated cash
advances, thereby overstating the asset accounts and
understating the concerned expenses accounts and exposing the
funds to risk of misapplication and losses to the government;
 Cash – Local Treasury totaling P2.062 million remained

funds to possible loss or misapplication; and,

Funds were not reconciled resulting to a discrepancy of P9.608
million, thereby casting doubt on the accuracy and reliability of
the account balances.
Barotac Nuevo Management

Letter
Barotac Viejo Disclaimer  Recording of expenses totaling P1.563 million to inappropriate

accounts, rendered the Financial Reports of the Municipality
unreliable;
 Property Plant and Equipment (PPE) accounts as of December

31, 2018 amounting to P54.886 million were doubtful because the
Municipal Officials/Personnel responsible did not (a) conduct
of PPE, hindering the reconciliation of balances between the
Accounting and General Services Office; (b) record depreciation
on various PPEs; and (c) dispose unserviceable properties, thus
the accuracy, completeness and existence of the PPE cannot be
ascertained;
 Cash advances totaling P47.118 million remained unliquidated as

of December 31, 2018 due to the non-imposition of appropriate
measures against erring officials and employees who do not
submit liquidation documents within the prescribed period that
237
resulted to the overstatement of asset and understatement of
certain expenses;
 Cash – Local Treasury totaling P14.564 million remained

funds to possible loss or misapplication;

Funds were not reconciled resulting to a discrepancy of P.422,
thereby casted doubt on the accuracy and reliability of the
account balances;
 Disbursement Vouchers totaling P4.202 million were not

submitted to the COA Office; and transactions worth P4.257
million lacked the required supporting documents, thus validity
and propriety of the transactions covered by those unsubmitted
vouchers could not be ascertained and affected the reliability of
 Failure to submit the Statement of Comparison of Budget and

Actual Amounts and the Notes to the Financial Statements within
the prescribed period, thus resulting to the delay in the audit of
financial transactions and/or accounts, as well as affecting the
completeness and fairness of presentation of the financial
statements.
Batad Qualified  Property, Plant and Equipment account balances as of December

31, 2017 totaling P80.207 million are doubtful due to the non-
conduct of annual physical inventory count and non-submission
of the corresponding inventory report, hence, affecting the
reliability and integrity of the Financial Statements; and,
 Correctness and existence of the Cash Local Treasury amounting

to P2.149 million cannot be ascertained due to the non-deposit of
collections regularly and intact and unreconciled balances of the
Cashbooks and General Ledgers.
Bingawan Qualified  Property, Plant and Equipment totaling P181.898 million as per
(RPCPPE) for CY 2018 were not reconciled with the property,
plant and equipment account in the general ledger totaling
P138.965 million, hence, the existence and correctness of the
Property, Plant and Equipment accounts as of December 31,
2018 were uncertain.
Cabatuan Qualified  Property, Plant and Equipment (PPE) accounts as of December

31, 2018 totaling P228.820 million remained unreliable due to
existence of reconciling items with a total amount of P.415 million,
inclusion of missing items valued at P2.733 million and
unserviceable assets remains undisposed.
238
Calinog Qualified  Property, Plant and Equipment (PPE) account balances totaling
agency to conduct physical count of all its property which caused
the non-submission of Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) and non-maintenance of
property cards and ledger cards as well as the absence of
ownership documents for some assets; and,

the books of accounts, which resulted to the understatement of
the Cash in Bank – Local Currency, Current Account and Payable
Accounts by the same amount.
Carles Qualified  Property, Plant and Equipment account could not be ascertained
due to incomplete physical inventory of all its properties, and
inadequate submission of the required reports, hence created a
risk that these accounts totaling P230.591 million may not be
fairly presented in the Financial Statements;
 Failure to record in the books of accounts all the parcels of land

under the name of the Municipality with market value and
assessed value of P371.189 million and P28.678 million,
respectively, thus resulted to the understatement of the Land
Account;
 Reciprocal accounts cannot be ascertained due to non-

reconciliation of balances for more than two (2) years and with a
variance for the current year amounting to P4.297 million, thus,
rendered the fair presentation of the financial statements
doubtful;
 Prior years collections aggregating to P4.447 million remained

undeposited as of December 31, 2018, hence exposed
government funds to possible loss or misapplication and created
doubt on the existence and correctness of the Cash in Local
Treasury account;
 Items for adjustments in the Cash in Bank-LCCA totaling P.140

million are not promptly taken up in the books of accounts that
resulted to discrepancy in cash balance between the book and
bank records; and,
 Cash advances totaling P3.531 million were not fully liquidated at

the end of each year and within the period prescribed, thus
overstated the asset account and understated the concerned
expense accounts for cash advances which may have been
actually incurred but were not reported due to non-submission of
liquidation reports, and exposed the funds to risk of
misapplication.
239
Concepcion Qualified  Property, Plant and Equipment account totaling P104.923 million
as of December 31, 2018 was not ascertained due to incomplete
actual physical count of the inventory and non-reconciliation of
reports between the Municipal Accounting Office and General
Services Office;
 Cash Local Treasury amounting to P15.970 million remained

undeposited as of December 31, 2018 due to the non-deposit of
collections intact and regularly, failure of the previous Municipal
Treasurer to settle her accountability and non-reconciliation of
reports between the Treasury and Accounting Offices;
 Cash advances granted to officers and employees totaling

P3.191 million remained unliquidated as of December 31, 2018;
and,
 Motor vehicles donated to the Municipality of Concepcion by

private entities were not recorded in the books of accounts as of
December 31, 2018, resulting in the understatement of
transportation equipment account by an undetermined amount.
Dingle Qualified  Land valued at P13.013 million was not recorded as Inventory
Held for Sale as intended; and,
 Due to NGAs account amounting to P17.836 million as of year-

end could not be ascertained due to certain deficiencies noted in
the subsidiary ledgers.
Dueñas Qualified  Non-conduct of physical inventory of Property, Plant and

Equipment (PPE) accounts amounting to P121.282 million as of
December 31, 2018 and non-reconciliation of records thereof,
thus, PPE accounts may not be fairly presented in the financial
statements at year-end;
 Depreciation accounts were doubtful due to the non-recording of

adjusting entries for depreciation of some PPE accounts
amounting to P85.846 million as of December 31, 2018, thereby,
overstating the assets and government equity accounts.
 Bank reconciling items and stale checks totaling P1.004 million

and P.163 million, respectively, remained unadjusted as of
December 31, 2018, thereby the Cash in Bank-Local Currency
Current Account amounting to P106.753 million may not be fairly
presented in the financial statements at year-end; and,

Receivable with balances of P14.679 million and P4.073 million,
respectively, as of year-end were doubtful due to non-setting up
of the same at the beginning of the year and were not based on
duly updated Real Property Tax Account Register (RPTAR).
240
Dumangas Qualified  Property Plant and Equipment accounts amounting to P264.010
millioncould not be ascertained because the Municipality did not
conduct a complete physical inventory of its properties and submit
the Report on the Physical Count of Property, Plant and
Equipment to the Auditor;

undeposited as of December 31, 2018;

outstanding as of December 31, 2018, thereby overstating the
asset account and understating the concerned expense accounts
and exposing the funds to risk of misapplication;
 Bank Reconciliation Statements with the paid checks and original

copies of the Debit and Credit Memos were not submitted by the
Municipal Accountant to the Auditor, thus correctness and
reliability of the Cash in Bank balances could not be ascertained;
Fund, Special Education Fund and Trust Fund, showed a total
difference of P1.152 million as of December 31, 2018; and,
 Disbursement vouchers /payrolls, liquidations and supporting

documents covering the period March to December 2018 and
official receipts and deposit slips for Calendar Year 2018 were not
submitted for verification, casting doubt on the correctness of the
Estancia Qualified  Failure to conduct its annual physical inventory on Property, Plant
and Equipment (PPE) amounting to P67.123 million and submit
the corresponding inventory report;
 Land with a Market Value of P1.395 billion under the name of the
Municipality were not recorded in the books of accounts,;
 Items for adjustments as additions and deductions in the Cash in

Bank–LCCA amounting to P1.814 million and P.043 million,
respectively, were not taken up promptly in the books of accounts;
 Deficiencies were observed in the establishment and recording of

Real Property Tax (RPT)/Special Education Tax (SET)
Receivables in the books of accounts; and,
 Recorded materials and labor for the fabrication of the Materials

Recovery Facility and Municipal Aid for Barangay as outright
expenses in the books of accounts.
Guimbal Qualified  Failure to conduct physical inventory of its PPE’s and prepare a
report thereon, thus, the fairness of the presentation of the
account Property, Plant and Equipment totaling P117.894 million
as of December 31, 2018 could not be verified with reasonable
certainty.
241
Igbaras Qualified  Failure to conduct the annual physical inventory of Property,
Plant, and Equipment amounting to P160.943 million at year-end;
 Real Property Tax Receivables/Special Education Tax

Receivables and the corresponding Deferred RPT/SET Income
were not established at the beginning of the year contrary to
concerned regulations.
Janiuay Qualified  Failure of the municipality to submit a complete inventory report

and reconcile its PPE accounts contrary to concerned regulations
resulted in the risk that the Property, Plant and Equipment (PPE)
accounts valued at P370.305 million may not be properly
presented in the financial statements.
Lambunao Qualified  Failure of the municipality to complete the physical inventory

taking, submit a detailed Report on RPCPPE and reconcile its
fixed assets resulted in the risk that the Property, Plant and
Equipment accounts valued at P266.643 million may not be
properly presented in the financial statements.
Leganes Qualified  Cash advances for P4.102 million remained unliquidated as of

year-end, hence, expenses and corresponding asset/equity
accounts were not reliable as of December 31, 2018;
 Due from LGUs account amounting to P1.474 million as of year-

end could not be ascertained due to the absence of subsidiary
ledger consequently casting doubt as to the validity and accuracy
of the balances of the account as of year-end;
 Fund transfers to barangays amounting to P.300 million were

directly taken up as “Donations” in the books of accounts resulting
to non-establishment of reciprocal accounts between the
municipality and the barangays and overstatement of expenses
for the same amount; and,
 Failure to conduct a physical inventory of its Property, Plant and

Equipment with a carrying value of P115.648 million as of
December 31, 2018, thus, completeness and accuracy of the
account could not be properly established.
Lemery Qualified  Monthly Bank Reconciliation Statements with the original copies
of the Bank Statements, paid and cancelled checks, Bank Debit
and Credit Memos were not submitted within the prescribed
period to the Auditor, thus hindered the timely verification of the
correctness and reliability of the Cash in Bank balances
 Property, Plant and Equipment amounting to P92.258 million as

of December 31, 2018 could not be ascertained because the
Municipality had not conducted a complete physical inventory of
all its properties, nor prepared the annual inventory report;
242
 Trust Liabilities-DRRM account amounting to P24.462 million was
reported under the General Fund books as of December 31,
2018; and unutilized balance of the Local Disaster Risk Reduction
Management Fund for Calendar Years 2010 to 2013 amounting
to P4.943 million was not reverted to the unappropriated surplus
of the General Fund;

outstanding as of December 31, 2018, thereby overstating the
asset account and understating the concerned expense
accounts; and,
 Due from Other Funds and Due to Other Funds are not reconciled
resulting to a discrepancy of P.578 million, thereby casting doubt
on the accuracy and reliability of the account balances.
Leon Qualified  Inability of the Agency to create Inventory Committee to conduct

physical inventory of all its property and non-submission of report
for assets valued at P220.172 million as of December 31, 2018
and PPE Ledger Cards were not maintained by the Accounting
Office and depreciation was not taken up for properties
amounting P56.271 million.
Maasin Qualified  Property, Plant and Equipment (PPE) account balances totaling
agency to conduct physical count of all its property which caused
the non-submission of Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) and non-maintenance of
property cards and ledger cards as well as the absence of
ownership documents for some assets;
 Monthly Bank Reconciliation Statements (BRS) were not

prepared and submitted by the Municipal Accountant due to
failure to obtain from its depository banks copy of Bank
Statements on time, thus, the accuracy of Cash in Bank -Local
Currency, Current Account amounting to P144.701 million as of
year - end could not be ascertained.
Miag-ao Qualified  Failure to maintain Property, Plant and Equipment Ledger Cards
for each category of its assets and Real Property Ledger Cards
for its land, no physical inventory of its PPE’s and ledger cards,
Property, Plant and Equipment amounting to P 230.970 million as
of December 31, 2018 could not be verified.
Mina Qualified  Reconciliation of P70.466 million difference between the total

book value of P283.498 million and actual inventory of P353.965
million of Property, Plant and Equipment (PPE) accounts as of
December 31, 2018 could not be effected since inventory counts
per Report on the Physical Count of Property, Plant and
Equipment (RPCPPE) were not categorized per PPE account and
243
 Property Stock Cards were not maintained/updated by the
GSO/Inventory Personnel In-charge; and,
 Failure to recognize allowance for impairment of dormant

receivables amounting to P.629 million which were non-moving
and settlement could no longer be ascertained.
New Lucena Management

Letter
Oton Qualified  Incomplete physical inventory of all the Property, Plant, and
Equipment (PPE) totaling P356.416 million which resulted to an
unreconciled variance of P79.759 million between the Report on
and the accounting records.
Pavia Qualified  Failure to submit the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) and maintain the required
property ledger cards and reconcile the PPE accounts valued at
P211.015 million at year-end with its actual physical count.
Pototan Qualified  Iincomplete conduct and non-reporting of physical inventory of

Property, Plant and Equipment (PPE) accounts amounting to
P237,522 million as of December 31, 2018 and non-reconciliation
of records thereof, thus, PPE accounts may not be fairly
presented in the financial statements at year-end;
 Biological Assets in the form of dispersed breeding

stocks/animals costing P.883 million remained dormant in the
books since pertinent records were not properly kept and
existence were not properly monitored; and,
 Bank reconciling items and stale checks totaling P.121 million and
P.277 million, respectively, remained unadjusted as of December
31, 2018, thereby, the Cash in Bank-Local Currency, Current
Account amounting to P316.792 million may not be fairly
presented in the financial statements at year-end.
San Dionisio Qualified  Cash Local Treasury amounting to P16.829 million cannot be
ascertained due to the non-deposit of collections regularly and
intact, unreconciled balance of the Cashbook and General
Ledger and the failure of the absconded Municipal Treasurer to
account for her collections;
 Recurring reconciling item and outstanding stale checks in the

bank reconciliation statements amounting to P.692 million and
P.231 million, respectively, cast doubt on the accuracy, propriety
and reliability of the Cash in Bank account in the Financial
Statements;
 Cash advances granted to officers and employees totaling

P4.820 million, remained unliquidated as of December 31, 2018;
244
 Land Account with a total book value of P2.382 million as of
December 31, 2018 was not ascertained due to absence of
property records, subsidiary ledger and Torrens Title;
 Property, Plant and Equipment account as of December 31, 2018

totaling P143.994 million remained unreliable due to the non-
conduct of the Annual Physical Inventory Count and non-
submission of the corresponding inventory report; and,
 Depreciation for Property, Plant and Equipment with a total cost

of P9.871 million as of December 31, 2018 has not been
provided.
San Enrique Qualified  Property, Plant and Equipment totaling P48.630 million were not
reconciled with the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) for CY 2018,hence, the
existence and correctness of the Property, Plant and Equipment
accounts as of December 31, 2018 were uncertain.
San Joaquin Qualified  Failure to conduct the annual physical inventory of Property, Plant
and Equipment amounting to P139.484 million, thus, the reliability
of the reported balance and the existence of the assets are
doubtful.
San Miguel Qualified  Inability of the agency to conduct physical inventory of all its
property and non-submission of the report thereon as of year-end
for assets valued at P158.897 million and non-maintenance of the
required Property, Plant and Equipment Ledger Cards (PPELC)
and depreciation was not taken up for properties amounting
P33.981 million renders the PPE account unreliable;
 Non-submission of the Bank Reconciliation Statements to show

that monthly reconciliation between the balance per bank and
balance found in the books were made for Cash in Bank- LCCA;
 Non-submission of disbursement vouchers totaling P2.765

million.
San Rafael Qualified  Property, Plant and Equipment amounting to P135.382 million as
all its properties, nor prepared the annual inventory report;

 Loans Payable - Domestic account of P25.376 million in the

Statement of Financial Position as of December 31, 2018 did not
reconcile with the total confirmed balance of P25.483 million from
the authorized government depository bank/lending institution,
with a net variance of P.107 million;
245
unliquidated and the Municipal Treasurer and Municipal
Accountant-Designate did not reconcile their records regularly;
 Monthly Bank Reconciliation Statements with the original copies

and Credit Memos were not submitted by the Municipal
Accountant to the Auditor;
 Government Equity totaling P2.122 million as of December 31,

2018, with no complete details, records and supporting
schedules, was reported under the Municipality’s Trust Fund trial
balance and financial statements.
 Due from National Government Agencies and Due from Local

Government Units accounts amounting to P1.707 million and
P.331 million, respectively, were doubtful considering that these
have remained long outstanding in the books and the accuracy of
the balances were unreliable; and,
 Due from Other Funds and Due to Other Funds were not
reconciled that resulted to a discrepancy of P2.192 million.
Santa Barbara Qualified  Failure to submit the Report on the Physical Count of Property,
property ledger cards and reconcile the PPE accounts with actual
physical count and depreciation expense for some Property,
Plant and Equipment (PPE) accounts was not recorded for CY
2018 and prior years’, thus the correctness, existence and
reliability of Property, Plant and Equipment totaling P150.198
Sara Qualified  Property, Plant and Equipment amounting to P148.450 million as

all its properties, nor prepared the inventory report;
 Monthly Bank Reconciliation Statements with the original copies

and Credit Memos were not submitted within the prescribed
period to the Auditor, thus hindered the verification of the
correctness and reliability of the Cash in Bank – Local Currency,
Current Account balance reported in the Financial Statements
amounting to P24.167 million as of December 31, 2018;
 Government Equity totaling P15.716 million as of December 31,

2018, with no complete details, records and supporting
schedules, was reported under the Municipality’s Trust Fund trial
balance and financial statements.
246
 Loans Payable - Domestic account amounting to P55.741 million
in the Statement of Financial Position as of December 31, 2018
did not reconcile with the confirmed balance of P55.777 million
from the Municipality’s authorized government depository banks
in the amount of P.036 million and portion of the loans payable
amounting to P3.949 million was not presented as a current
financial liability in the Statement of Financial Position;
reconciled resulting to a discrepancy of P3.515 million;

 Cash advances amounting to P.902 million remained

unliquidated as of December 31, 2018; and,
 Disbursement vouchers and supporting documents amounting to

P1.071 million for Calendar Year 2018 were not submitted.
Tigbauan Qualified  Incomplete physical inventory on all of the municipality’s

properties totaling P183.475 million which resulted to an
unreconciled variance amounting to P57.623 million between the
(RPCPPE) and the accounting records; and,
 Land account was not supported with a subsidiary ledger; and’
 Unrecorded donated Ambulance unit from Philippine Charity

Sweepstakes Office (PCSO) amounting to P.858 million.
Tubungan Qualified  Inclusion of non-existing properties totaling P4.364 million in the

Property, Plant and Equipment (PPE) accounts; and,
 Donated Ambulance unit from Philippine Charity Sweepstakes

Office (PCSO) was not recorded in the books of the municipality
resulting in an understatement of Government Equity and PPE
accounts.
Zarraga Qualified  Failure to submit the Report on the Physical Count of Property,
property ledger cards and reconcile the PPE accounts with actual
physical count, thus, the correctness, existence and reliability of
Property, Plant and Equipment totaling P246.054 million could
not be ascertained.
Region VII – Central Visayas
Bohol Qualified  Reconciling items with absolute value of P2.883 million remained
unadjusted for 3 to 17 years rendering doubtful the Cash in Bank-
Current and Savings Account as of December 31, 2018;
247
 Inventory Accounts totaling P213.141 million are rendered

doubtful by the (a) continued inclusion for at least twelve (12)
years of unreconciled ‘For ID’ accounts amounting to P9.727
million net of abnormal/negative balance of P.958 million; and,
(b) absence of physical count of inventory to determine actual and
correct balances of inventories; and,
 Abnormal balances of P19.042 million and recorded credits of

P6.145 million for accumulated bank credits from Land Bank of
the Philippines (LBP) in the ‘Due to National Government
Agencies’ render the presentation of the account in the financial
statements unreliable.
City
Tagbilaran City Qualified  Property, Plant and Equipment (PPE) account balance is
uncertain due to differences between the accounting and property
records by P7.731 million, unserviceable properties amounting
to P7.683 million supported with approved Inventory and
Inspection Report for Unserviceable Property (IIRUP) were still
included in the Property Plant and Equipment (PPE) account in
the financial statements as of December 31, 2018, overstated the
PPE account by the same amount; and,
 Payables totaling P4.648 million are doubtful as to validity since

the composition thereof could not be established.
Municipalities
Alburquerque Qualified  Property, Plant and Equipment (PPE) as of December 31, 2018
are different from that of the Inventory Report with a difference of
P9.860 million and Depreciation Expense amounting to P3.215
million could not be validated.
Alicia Qualified  Property, Plant and Equipment with total cost of P189.018 million
cannot be ascertained due to absence of property records and
ledger cards and failure to conduct a complete physical inventory
and reconcile the results with the recorded balances;
 Unutilized Disaster Risk Reduction and Management Fund

(DRRMF) CY 2010-2011 amounting to P1.279 million was
erroneously recorded as Trust Liabilities – DRRMF in the General
Fund;
 Due to GSIS, Due to Pag-ibig and Due to Philhealth under the

Trust Fund has a total outstanding balance of P.171 million which
represented prior years’ amounts that were not remitted to the
concerned agency; and,
248
 Net Income/Surplus is understated by P1.825 million due to the
erroneous recording of the prior year’s unexpended Local
Disaster Risk Reduction and Management Fund (LDRRMF) as
Transfers of Unspent Current Year DRRM Funds to the Trust
Fund.
Anda Qualified  Non-moving Receivables Account aging 8 years and more

totaling P.444 million whose possibility of collection or settlement
is doubtful still remain in the books;
 Breeding stocks amounting to P.200 million which remained

dormant for several years is of doubtful validity due to non-
monitoring of the existence and condition of the dispersed
breeding stocks, non-maintenance of the required records and
non-preparation of inventory report thereon;
 Property, Plant and Equipment amounting to P105.852 million

(net of accumulated depreciation) were not supported with a
Report of Physical Count of Property, Plant and Equipment
(RPCPPE) and a copy of the said report was not submitted to
the Auditor because the inventory committee did not conduct a
physical count of its properties;
 Outstanding checks totaling to P4.319 million as of December 31,

2018 in the General Fund included stale checks amounting to
P.510 million which have been stale for more than 6 months, thus,
casting doubt on the accuracy, propriety and reliability of the Cash
in Bank account; and,
 Aid to Barangays from 20% Development Fund amounting to

P1.412 million were recorded as Subsidy to Local Government
Units instead of recording it as Due from Local Government Units.
Antequera Qualified  Property, Plant and Equipment accounts as of December 31,

2018 totaling P175.318 million which constitutes 74.51% of the
total assets were doubtful due to the failure of the management
to conduct physical inventory of its properties and equipment;
 Property, Plant and Equipment with an aggregate amount of

P7.252 million were erroneously classified;
 Trust receipts from Department of Social Welfare and

Development for social pensions totaling P9.704 million recorded
in the General Fund overstated the expenses by the same
amount resulting to the LGU operating at a loss of P8.614 million;
 Income totaling P1.095 million were booked up as trust

collections, thereby resulting in the overstatement of liability by
P1.095 million and understatement of income/government equity
by the same amount; and,
249
 Unexpended Local Disaster Risk Reduction Management Fund
(LDRRMF) – MOOE amounting to P.475 million were not
transferred to a special trust fund at year end.
Baclayon Qualified  Property, Plant and Equipment (PPE), net of accumulated

depreciation, amounting to P40.419 million in CY 2018 could not
be ascertained due to the non-completion of the annual physical
inventory of properties to determine unrecorded assets,
unserviceable and missing properties; and,
 Depreciation Expense amounting to P1.350 million could not be

validated as to accuracy and correctness due to non-submission
of documents/lapsing schedules detailing the depreciable
properties and the computation of depreciation expense for each
PPE.
Balilihan Qualified  Breeding Stocks account amounting to P.354 million has

remained dormant for years;
 Eight (8) stale checks totaling to P.168 millionstill existed in the

books;
 Real Property Tax and Special Education Receivables totaling

P7.613 million could not be ascertained as the amount was not
based on Certified List of Taxpayers and taxes due and
collectible;
 Various Accounts totaling P.357 million which remained dormant

in the books for unknown period were not acted upon, to which
the proper write-off thereof could not be facilitated;
 Failure to conduct the required physical inventory of its

Inventories, Property, Plant and Equipment and Other Assets,
thus, casting doubt on the validity and accuracy of its reported
balances in the aggregate amount of P159.026 million as of
 Thirty-one (31) parcel of lots owned by the municipality with a total

assessed value of P7.747 million are not covered with Certificate
of Titles in its name.
Batuan Qualified  Cash in Bank reconciling items, net of P1.306 million were not
recorded rendering the accuracy and reliability of the Cash in
Bank accounts doubtful;
 Unrecorded checks totaling P1.408 million remained reconciling

items in the Bank Reconciliation Statements;
 Other Receivables totaling P.664 million are of doubtful validity

and chances of collection are remote;
250
 P1.140 million Accounts Payable as of September 30, 2018 aged
2 years and above which are not paid;
 Due to Other National Government Agencies (NGAs) totaling

P39.208 million in the Trust Fund lacks subsidiary ledgers and
included projects/programs which were not yet implemented or
implemented but not yet liquidated and balances which were not
returned to the concerned source agencies;
 Bank interest totaling P1.057 million of Trust Fund deposits were

erroneously recorded under the Other Payables account instead
of income or payable account in the General Fund;
 Due to BIR totaling P.749 million is unreliable due to errors in the

remittances of these withholding taxes; and,
 Due from Other Funds and Due To Other Funds has

unsettled/unadjusted difference of P.753 million.
Bien Unido Adverse  Abnormal balances were found in the supporting schedules of
Due to NGAs, Due to LGUs and Other Payables totaling P4.180
million which continually remained unadjusted/corrected as of
December 31, 2018;
 1,519 pieces of Accountable Forms Without Money Value from

current and previous cash examinations were still found
unaccounted;
 Unserviceable assets totaling P13.221 million were not yet

dropped from the books of the municipality due to the failure of
the Property Officer/Disposal Committee to dispose the
unserviceable properties;
 Cash Advances and Other Receivables amounting to P.589

million were not liquidated for a period of one (1) year and above;
and,
 Due to and Due from Other Funds of the Municipality were not
reconciled resulting in unreliable balances of the Financial
Statements.
Bilar Qualified  Fund assistance to various barangays in the amount of P3.095

million remained unliquidated as of December 31, 2018 despite
completion of the intended purposes thereof;
 Physical Count of Inventories totaling P.428 million was not

conducted; and,
 Property, Plant and Equipment (PPE) account as of December

31, 2018 amounting to P113.699 million could not be ascertained
due to the failure of the Inventory Committee to conduct a
complete physical inventory and submit the corresponding Report
of the Physical Count.
251
Buenavista Qualified  Property, Plant and Equipment (PPE) account balances
remained doubtful due to incomplete physical inventory count.
Calape Qualified  Payment of various materials or bills for on-going projects totaling
P10.219 million were recorded to its specific Property, Plant and
Equipment (PPE) accounts even if the assets were not yet
completed and turned-over;
 Completed structures funded by the national government

agencies that are barangays properties amounting to P8.378
millionwere still recorded in the books;
 Withholding of mandatory deductions, contributions and loan

amortization of officials and employees resulted in under –
remittance totaling P.496 million and doubtful balances of the Due
to GSIS, BIR, Pag-ibig, PHIC; and,
 Due to Other National Government Agencies (NGAs) amounting

to P1.956 million remained in the books of the agency as of
December 31, 2018 due to the failure of the management to
transfer the balances to the National Treasury.
Candijay Qualified  Cash in Bank accounts reported at P35.736 millionin the financial
statements as of December 31, 2018 is unreliable;
 Outstanding checks in the Bank Reconciliation Statements

include stale checks amounting to P.515 million;
 Dormant Receivables amounting to P7.097 million which

remained uncollected beyond one (1) year and of doubtful chance
of collection;
 Abnormal balances of various Liability Accounts in the total

amount of (P10.293 million);and,
 Failure to set up Real Property Tax (RPT) Receivable and Special

Education Tax (SET) Receivable based on the certified list of
taxpayers showing the amount of tax due and collectible for the
year because of the failure of the Municipal Treasurer to make
the said list available hence the RPT and SET Receivables in the
amount of P.068 million and P.063 million, respectively, as of the
end of the year 2018 is unreliable.
Carmen Qualified  Property, Plant and Equipment and Biological Assets amounting
to P323.021 million (net of depreciation) are doubtful due to the
absence of Report of Physical Count of Property, Plant and
Equipment (RPCPPE) caused by the failure of the inventory
committee to conduct physical count of LGU properties; and,
252
 No reconciliations and adjustments were made for the P.170
million stale checks, P.220 million unrecorded checks, P.025 non-
moving current asset accounts, P1.234 million Due from LGUs,
P1.605 million other investments, and P1.032, million Other
Payables which balances remain dormant and questionable for a
long period.
Catigbian Qualified  Property, Plant and Equipment as of December 31, 2018

amounting to P227.854 million, could not be ascertained due to
the failure of the Inventory Committee to conduct a complete
physical inventory and submit the corresponding Report of the
Physical Count of PPE (RPCPPE);
 Unliquidated Cash Advances accumulated to P.138 million at

year end due to non-compliance of the officials and employees
on the timely liquidation of cash advances;
 Interest income recorded in the Trust Fund totaling P.283 million

resulted to the non-recognition of income thus rendering the
overstatement of the liabilities misstatement of the financial
statements;
 Withholding of the mandatory deductions, contributions, and loan

amortizations of officials and employees resulted in under-
remittance amounting to P.501 million and doubtful balances of
the Due to GSIS, BIR, PAG-IBIG, PHIC;
 Existence of unreconciled balances of Intra-agency accounts Due

from Other Funds and Due to Other Funds amounting to negative
P.092 million, Real Property Tax Receivable and deferred RPT
amounting to negative P371.04; and Special Education Tax and
deferred SET P652.63; and,
 Unexpended balances of trust receipts under Due to Other

National Government Agencies (NGAs) and Due to LGUs
amounting to P.916 million and P.007 million respectively,
remained in the books of the agency as of December 31, 2018.
Clarin Qualified  Property, Plant and Equipment (PPE) account balances

remained doubtful due to failure to conduct physical inventory
count.
Corella Qualified  Unliquidated cash advances at year-end had a total balance of

P2.149 million;
 Financial assistance to various government agencies amounting

P.060 million and P.250 million were erroneously recorded as
cash advance and expense respectively while financial
assistance to barangays totaling P.080 million were erroneously
classified and remained unliquidated as of December 31, 2018
253
despite completion of the intended purposes thereof, resulting in
misstatement of the related receivable accounts;
 Withholding taxes on compensation of the municipal officials and

employees were not in accordance with Republic Act No. 10963
resulting in the over-withholding of income taxes and unreliable
Due to BIR balances as of December 31, 2018;
 Absence of proper monitoring and reconciliation of accounts

resulted to abnormal subsidiary balances of the Due to NGAs and
Due to LGUs account, thus, fairness of the financial statements
cannot be relied upon;
 Non-disposal of the unserviceable properties totaling P5.660

million affected the fair presentation of the Property, Plant and
Equipment account in the Financial Statement and exposed them
to further deterioration and deprived the agency of any
benefit/income that may have been derived from the assets; and,
 Failure to conduct the required physical inventory of its

Inventories, Property, Plant and Equipment and Other Assets,
thus, casting doubt on the validity and accuracy of its reported
balances in the aggregate amount of P37.564 million as of
December 31, 2014.
Cortes Qualified  Undocumented prior years balances of dormant receivable

accounts (Due from Officers and Employees and Advances to
Officers and Employees) totaling P.501 million remained in the
books from seven to 14 years;
 Physical inventory taking of Property, Plant and Equipment

totaling P42.392 million was incomplete;
 Erroneous recording of disallowances which are on appeal and

failure to record disallowances which have become final and
executory totaling P3.480 million; and,
 Failure to record payment to the Bureau of Internal Revenue

(BIR) for the income taxes of the municipal officials and
employees and the corresponding interest/penalties totaling
P.385 million.
Dagohoy Qualified  Property, Plant and Equipment (PPE) accounts as of December

31, 2018 amounting to P113.105 million could not be ascertained
due to the failure of the Inventory Committee to conduct a
complete physical inventory and submit the corresponding Report
of the Physical Count; and,
 Reported balance of the Work/Zoo Animals account amounting to

P1.290 million has remained dormant for years, rendering the
account balance unreliable.
254
Danao Qualified  Property, Plant and Equipment (PPEs) and Inventories totaling
P30.934 million and P3.931 million, respectively, cannot be
established due to non-submission of Report on the Physical
Count of Property, Plant and Equipment (RPCPPE) and Report
of the Physical Count of Inventories (RPCI);
 Non-submission of Bank Reconciliation Statements (BRS) by the

Municipal Accountant hindered the timely verification of Cash in
Bank balances thus, casting doubt on the accuracy of its reported
balance in the financial statements totaling P108.795 million as of
December 31, 2018;
 Cash in Bank balances per cashbook and subsidiary ledgers are

not regularly reconciled, thus, casting doubts on the fairness of
presentation of the Cash in Bank account balance of P108.795
million in the financial statements as of December 31, 2018;
 Reported balance of the Agricultural Produce for Distribution

account amounting to P.848 million has remained dormant for
years, rendering the account balance unreliable due to the
absence of physical count of the said account;
eliminated in the consolidated financial statements due to a
difference of P2.385 million between the two accounts as at year-
end; and,
 Non-reversion of the unexpended balance of Local Disaster Risk

Reduction and Management Fund (LDRMMF) in CY 2018 in the
amount of P3.510 million, and non-reversion of unutilized CY
2013 DRRMF from TF to GF, rendered the accuracy of Trust
Liabilities – DRRMF account totaling P6.025 million as of year-
end, doubtful.
Dauis Qualified  Physical existence, condition, ownership and valuation of

properties were not ascertained due to failure of the LGU to
conduct actual physical inventory of its properties amounting to
P126.900 million, net of depreciation, thus balances of the PPE
accounts are unreliable;
 Reliability of the year-end balances of payable accounts

amounting to P3.750 million could not be ascertained due to the
absence of adequate subsidiary ledgers;
 Reconciling items totaling P1.200 million remained unadjusted as

of December 31, 2018, rendering the validity of these reconciling
items doubtful, thus accuracy of Cash in Bank- Local Currency,
Current Account balance of P171.022 million cannot be
ascertained; and,
255
 Reciprocal accounts Due From Other Funds and Due To Other
Funds has unsettled/unadjusted difference of P.719 million
casting doubt on the accuracy of the asset and liability accounts.
Dimiao Qualified  Real Property Tax/Special Education Tax Receivable balances at

year end amounting to P20.396 million and P20.157 million,
respectively, is doubtful due to inaccurate basis of setting-up of
the receivables.
Duero Qualified  Property, Plant and Equipment amounting to P113.690 million

(net of depreciation) are doubtful due to the absence of Report of
caused by the failure of the inventory committee to conduct
physical count of LGU properties;
 Stale checks amounting to P.094 million remained unadjusted

rendering the correctness and accuracy of the recorded Cash in
Bank, doubtful;
 Unserviceable properties amounting to P.700 million were not

reclassified to Other Assets;
 Undocumented Payable totaling P.696 million as of December

31, 2018 were still carried in the books casting doubt on the
validity and accuracy of the liability account; and,
 Interest earned on Trust Fund deposits amounting to P.095

million was not transferred to the General Fund understating the
income as well as the government equity account.
Garcia Hernandez Qualified  Physical count of Property, Plant and Equipment was not
conducted, thus validity, existence and correctness of the
recorded Property, Plant and Equipment amounting to P98.889
Getafe Qualified  Property, Plant and Equipment (PPE) account balances

remained doubtful due to incomplete physical inventory count.
Guindulman Qualified  Dormant Receivables amounting to P3.354 million which

remained uncollected beyond one (1) year and of doubtful chance
of collection are presented as current assets in the financial
statements;
 Other Machinery & Equipment Account includes a total amount of

P.851 million which is considered unreconciled affecting the
reliability of the financial statements;
 Completed projects in the total amount of P11.887 million still

formed part of Construction in Progress – Infrastructure Assets
and were not transferred to the appropriate asset accounts;
256
 Unserviceable properties were not disposed of or dropped from

the books resulting to the overstatement of Property, Plant and
Equipment (PPE) by P.031 million;

Funds were not reconciled resulting in the net discrepancy of
P.008 million; and,
 Absence of proper monitoring and control on the maintenance of

accounts resulted to abnormal negative balances of the Due to
BIR Account in the total amount of (P.310 million).
Inabanga Qualified  Property, Plant and Equipment (PPE) account balances

remained doubtful due to failure to conduct physical inventory
count.
Jagna Qualified  Report of Physical Count of Property, Plant and Equipment

(RPCPPE), Report of Physical Count of Inventories (RPCI) and
Biological Assets were not submitted to the Auditor, thus,
correctness of the recorded balances totaling P106.687 million
cannot be ascertained; and,
 “Due from NGA’s and Other Receivables” showed a year-end

balances of P.832 million and P.292 million, respectively, were
dormant receivables for over a period of 20 years and above
causing doubt as to its existence and collectibility.
Lila Qualified  Inventory and Property, Plant and Equipment balances

amounting to P.656 million and P95.246 million, respectively,
could not be ascertained due to the failure of the Municipality to
conduct a physical inventory; and,
 Gasoline, oil and lubricant expense amounting to P.579 million

was doubtful due to the absence of duly accomplished Driver’s
Trip Tickets, thus, exposing public funds to possible misuse or
wastage.
Loay Qualified  Property, Plant and Equipment amounting to P67.521 million is

doubtful due to the absence of Report of Physical Count of
Property, Plant and Equipment (RPCPPE) caused by the failure
of the inventory committee to conduct physical count of LGU
properties.
257
Loboc Qualified  Property, Plant and Equipment amounting to P108.141 million,
were not supported with a Report of Physical Count of Property,
Plant and Equipment (RPCPPE) thus, the validity, existence
and correctness of the account could not be ascertained;
 Stale checks amounting to P.833 million remained unadjusted

rendering the correctness and accuracy of the recorded Cash in
Bank doubtful;
 Prior year’s expenses amounting to P.593 million were paid out

of current year’s appropriation resulting in the overstatement of
expenses of the year under audit and understatement of its
current income by the same amount;
 Due From Other Funds (1-03-04-050) and Due To Other Funds

(2-03-01-010) has unsettled/unadjusted difference of P12.051
million casting doubt on the accuracy of the asset and liability
accounts; and,
 Real Property Tax and Special Education Tax Receivables,

amounting to P.351 million and P.091 million, respectively, could
not be ascertained because they were based on the Quarterly
Report of Real Property Assessment from the Municipal
Assessor.
Loon Qualified  Cash advances amounting to P3.654 million remain unliquidated

at year-end, thus, affecting the fairness of the presentation of the
year-end financial statements;
 Ongoing construction of trust fund funded projects amounting to

P31.357 million were immediately debited to Due to NGAs/ Due
to LGUs account in the Trust Fund Books and transferred and
recognized in the General Fund Books as Grants and Donations
in Kind, resulting to an overstatement of income and
understatement of liabilities;
 Payment for Comprehensive Land Use Plan (CLUP) Workshop

amounting to P.305 million was erroneously debited to
Construction in Progress account, resulting to overstatement of
assets and understatement of expenses;
 Cost of construction/ rehabilitation/ improvement of barangay

roads, barangay day care centers, barangay health stations,
barangay halls aggregating P40.234 million remained in the
books thereby overstating the assets of the municipality as of
December 31, 2018 by the same amount; and,
 Property, Plant and Equipment with an aggregate amount of

P4.762 million were erroneously classified resulting to inaccurate
account balances.
258
Mabini Qualified  Lack of proper control and close monitoring in the grant, utilization
and liquidation of cash advances resulted to the accumulation of
unliquidated cash advances to P1.835 million as of December 31,
2018, thus overstated the receivable and understated the related
expense accounts;
 Due from National Government Agencies (NGAS) and other

receivables totaling P.115 million were dormant for more than ten
years (10) years due to laxity in monitoring and enforcing
collections, thereby overstating the receivables; and,
 Property, Plant and Equipment amounting to P190.716 million as

of December 31, 2018 was not supported with a Report of
to the failure of the Municipality to conduct a complete physical
inventory-taking, thus rendering doubtful the correctness and
reliability of the recorded Property, Plant and Equipment.
Maribojoc Qualified  Property, Plant and Equipment (PPE) and Inventory accounts
amounting P172.855 million (net of depreciation) and P1.008
million respectively, could not be ascertained due to failure to
conduct actual physical count;
 Supplies and Materials Expense accounts amounting P3.761

million, could not be ascertained due to failure to prepare the
Summary of Supplies and Materials Issued (SSMI);
 Failure to transfer the unutilized Municipal Disaster Risk

Reduction and Management Funds (MDRRMF) of CY 2018
totaling P2.193 million to Trust Liabilities - DRRM account;
 Unutilized Municipal Disaster Risk Reduction and Management

Fund (MDRRMF) for more than five (5) years totaling P1.090
million was not reverted to the General Fund books; and,
 Registration Fees paid in attendance to various

trainings/conventions and seminars/workshops totaling P.252
million were incorrectly recorded as Traveling Expenses instead
of Training Expenses.
Panglao Qualified  Property, Plant and Equipment (PPE) account balances totaling
P259.700 million as of December 31, 2018 per accounting
records could not be assured due to the failure of the LGU to
conduct physical inventory of its properties;
 Due From Other Funds and Due To Other Funds has

unsettled/unadjusted difference of P26 million casting doubt on
the accuracy of the asset and liability accounts;
 Due from LGUs and Other Receivables accounts amounting to

P.506 million and P.442 million, respectively, could not be
ascertained due to unavailability of source documents;
259
 Absence of proper monitoring and control in the maintenance of

accounts resulted in abnormal negative balances of various Due
to BIR subsidiary accounts totaling P7.518 million, thus, fairness
of the financial statements cannot be relied upon.
Pilar Adverse  Unliquidated Cash Advances accumulated to P1.290 million at

year end due to non-compliance of the officials and employees
on the timely liquidation of cash advances;
 Financial assistance with total amount of P5.683 million granted

to other municipalities and barangays were directly recorded as
expense instead of a receivable under the Due from LGUs
account;
 Existence and completeness of the recording of Property, Plant

and Equipment with total cost of P193.379 million cannot be
ascertained due to a) absence of property records and ledger
cards; and, b) the failure to complete the physical inventory and
reconcile the results with the recorded balances;
 Due from National Government Agencies (NGAs) with total

balance of P1.540 million was dormant for ten (10) years and
lacks subsidiary ledgers to identify the agency-debtor;
 Cash in Bank balance of P90.810 million is misstated due to long

outstanding reconciling items with total amount of P8.172 million
that were not substantiated and recorded in the books,
unaccounted difference totaling P.069 million, and adjustments
with no basis amounting to P1.430 million;
 Miscellaneous Income account is overstated by P4.938 million

due to the erroneous recording of the surplus from the previous
year;
 Due to LGUs under the General Fund amounting to P13.610

million is doubtful due to debit balances, old accounts,
misclassification and weakness in monitoring the remittances of
the provincial and barangays’ share of taxes;
 Due to Other NGAs under the General Fund amounting to

P12.235 million is doubtful due to old and unclassified accounts,
thus, indicating weakness in the control and liquidation of fund
transfer; and,

(SET) Receivable balances of P6.685 million and P6.659 million,
respectively, are not correctly stated due to difference of P.026
million and absence of a duly certified list of taxpayers.
260
President Carlos P. Qualified  Non-reconciliation of the Report on Physical Count of Property,
Garcia Plant and Equipment and accounting records.
Sagbayan Qualified  Movable Property, Plant and Equipment account amounting to

P31.929 million as of December 31, 2018 remained doubtful due
to non-conduct of physical inventory count and lapses in the
implementation of physical monitoring procedures;
 Cashbook and general ledger balances of the Cash in Bank

account reflected a difference of P10,108 million as of December
31, 2018 due to the failure of the Municipal Treasurer and
Municipal Accountant to reconcile the cashbooks and general
ledgers at least quarterly, thus, rendering the accuracy of the
reported Cash in Bank balances doubtful.
 Accounts totaling P2.163 million recorded as “for ID” in the

different General Ledgers could not be established due to lack of
details and non-reclassification of these balances to their
appropriate Subsidiary Ledger accounts in the absence of
supporting details;
 Land account totaling P1.698 million is rendered doubtful due to

the absence of valid proofs of ownership caused by delay in
processing the transfer of titles for land donated and bought by
them, and for failure to record in the books lots already owned
by the Municipality amounting to P2.728 million, thereby,
rendering ownership thereto uncertain and exposing the
Municipal Government to risk of third party claims and illegal
dispositions, and understating the Land account;
 Improper charging of conducted trainings, conventions and

seminar/workshops, as well as minimal guest food
accommodation expenses, resulted in the overstated
Representation Expense account in the financial statement
amounting to P.884 million as of December 31, 2018; and,
 Variances on the monthly remittances against taxes withheld by

the LGU as much as P.378 million resulted in negative and
unreconciled monthly balances of the Due to BIR account.
San Isidro Adverse  Of the P1.354 million, Due from Officers and Employees
Account, a total of P.794 million or 58.67% aged over one to more
than ten years remained unliquidated at year-end;
 Cash advances totaling P.350 million for Intelligence Fund

remained unliquidated for more than 5 years;
 Propriety and validity in the recording of the municipality’s

Property, Plant and Equipment (PPE) account could not be
ascertained due to the failure of the management to conduct
261
actual physical inventory taking, non-preparation of inventory

reports and determination of unserviceable items.
 Due From Other Funds and Due To Other Funds have

unsettled/unadjusted difference of P.308 million;
 Cash in Bank – Local Currency, Current account (GF) totaling

P26.201 million could not be validated due to non-preparation and
non-submission of Bank Reconciliation Statement; and,
 Absence of proper monitoring and control on the

recording/maintenance of majority of the accounts resulted in
abnormal negative balances of different accounts in the total
amount of P4.820 million.
San Miguel Qualified  Movable Property, Plant and Equipment (PPEs) and Inventories
be fully established due to incomplete conduct of physical count;
 Cash advances for travel and special purposes totaling P.407

million as at year-end were not yet liquidated;
 Book reconciling items were not immediately recorded in the LGU

books as reflected in the Bank Reconciliation Statement (BRS)
as of December 31, 2018 thus, understating the Cash in Bank
and related income and expense accounts by a net amount of
P.396 million; and,
 Reported balance of the Agricultural Produce for Distribution

account amounting to P.121 million has remained dormant for
years, rendering the account balance unreliable due to the
absence of physical count of the said account.
Sevilla Qualified  Property, Plant and Equipment and Biological Assets amounting
to P217.314 million (net of depreciation) are doubtful due to the
absence of Report of Physical Count of Property, Plant and
Equipment (RPCPPE) caused by the failure of the inventory
committee to conduct physical count of LGU properties.
Sierra Bullones Qualified  Existence of unreconciled balances of Intra-agency Accounts

Due From Other Funds and Due to Other Funds amounting to
negative P.066 million casts doubt as to the accuracy of the
transactions recorded under these accounts;
 Government Equity account balance could not be ascertained

due to non-liquidation of past due cash advances amounting to
P.133 million; and,
 Year-end balance of the account Due to Other National

Government Agencies (NGAs) totaling P22.906 million included
projects/programs which were not yet implemented or
262
implemented but not yet liquidated and balances which were not
returned to the concerned source agencies.
Sikatuna Qualified  Property, Plant and Equipment with total amount of P106.408
million cannot be ascertained due to the failure to conduct a
complete physical inventory and reconcile the results with the
recorded balances; and,

December 31, 2018, resulting in the non-recognition of
expenditures.
Talibon Qualified  Due from Local Government Units (10303030) amounting to

P3.617 million remained unliquidated as of December 31, 2018,
thereby rendering understatement of expense and overstatement
of income and possibly exposing unused cash in the hands of the
concerned LGUs to misapplication;
 Unsettled/Unadjusted difference of P.084 million in the reciprocal

accounts Due to and from Other Funds were not reconciled
resulting in unreliable balances in the asset and liability accounts
of municipality.
 Due to BIR and GSIS accounts were found to have negative

balances in their subsidiary ledgers totaling P.117 million which
continually remained unadjusted/corrected as of December 31,
2018; and,
 Depreciable assets totaling P2.307 million were not depreciated

during the year, thus, Property Plant and Equipment (PPE) and
the related Government Equity account were overstated and
expenses understated.
Trinidad Qualified  Unserviceable assets totaling P2.061 million were not yet
disposed due to the failure of the Property Officer/Disposal
Committee to process application by disposal of unserviceable
properties on a timely basis;
 Demolished/destroyed Old Restaurant Building having a book

value of P.319 million was still carried in the books of accounts of
the municipality;
 Balance of the Building account (1-07-04-010) in the amount of

P14.388 million (net of depreciation) does not include the costs of
major repairs/rehabilitation and construction being implemented
by DPWH-Bohol 2nd District Engineering Office in Ubay, Bohol
thereby understating the asset accounts; and,
 Cash advances for official travels and other purposes totaling

P.144 million, were still not liquidated.
263
Tubigon Qualified  Property, Plant and Equipment accounts amounting to P419.015
million at year-end could not be ascertained due the failure to
reconcile the inventory report of the Municipal Treasurer and with
the records of the Municipal Accountant with a difference of
P216.856 million;
 LDDRMF amounting to P5.458 million per books is different from

the status report of fund utilization showing a balance of P5.801
million, showing a difference of P.343 million;
 Other Deferred Credits totaling P2.182 million showed recording

of earned income;
 Withholding of the mandatory deductions and loan amortizations

of officials and employees resulted to the doubtful balances of the
Due to GSIS, BIR, PAG-IBIG and under-remittance amounting to
 Fund that was not yet deposited amounting to P1.425 million was
recorded as part of the Cash in Bank and recognized as Deposit
in Transit (DIT) in the Bank Reconciliation Statement (BRS).
Ubay Qualified  Failure to conduct actual physical inventory taking and

incomplete preparation and submission of inventory report.
Valencia Qualified  Depreciable assets amounting to P112.426 million which

represented 63.3% of the total thereof were not provided with
depreciation. This resulted in the misstatement of assets,
expenses and government equity at year-end.
Cebu Qualified  Property, Plant and Equipment (PPE) account balance is

unreliable because it included unidentified items costing
P272.012 million and had an unreconciled difference of P251.049
million compared to the property records of the Provincial General
Services Office and included the book value of P2.111 billion of
several lots that were donated to the City Government of Cebu
on August 3, 2018;
 Cash in Bank-LCCA was understated by P88.421 million because

cash equivalent to unreleased checks and stale checks totaling
P87.880 million and P.541 million, respectively, were not restored
to the account at year end;
 Interest Expenses totaling P5.090 million on Loans Payable was

misclassified under the "Other Maintenance and Operating
Expenses" account and Interest Expenses and accrued Interest
Payable at year end amounting P.715 million was not recorded,
thereby misstating the account balances in the financial
statements; and,
264
 Due from NGOs/POs account was not fairly presented because
dormant accounts aging twelve years or more totaling P7.106
million, the settlement of which is uncertain, was not provided with
Allowance for Impairment Loss.
Cities
Bogo City Adverse  Property Plant and Equipment (PPE) account balance of
P845.733 million as of December 31, 2018 is doubtful due to the
following: (a) the required physical inventory count of PPE during
the year was not completed (b) the Property Cards were not
updated; and (c) property records were not reconciled with the
accounting records; and,
 Ownership on the City’s Real Properties numbering 72 parcels of

land, which were booked at a total cost of P111.942 million could
not be ascertained due to non-completion of land titling.
Cebu City Qualified  Unsubstantiated, unreconciled and dormant significant amount of

beginning balances of asset and liability accounts totaling P9.555
billion and P6.208 billion, respectively;
 Unreliable balances of Property, Plant and Equipment (PPE)

accounts totaling P10.495 billion due to unreconciled difference
of P612.030 million between accounting and property records;
 Unreliable balances of the Inventory accounts totaling P514.174

million due to the non-conduct of physical count of inventories and
the non-submission of reports on the physical count of P185.780
million on various inventories;
 Unliquidated financial assistance granted to the barangays of the

City totaling P315.127 million;
 Inaccurate balances of Construction in Progress accounts due to

the non-submission of the Certificate of Completion by the City
Engineer, thus, various completed infrastructure projects totaling
P117.271 million were not yet recorded to its proper PPE
accounts, including its corresponding depreciation charges;
 Understated Cash in Bank-Local Currency, Time Deposits under

SEF by P106.277 million when compared with the bank/passbook
balances;
 Unrecovered advance payments/mobilization fees granted to

various contractors totaling P23.490 million despite the
cancellation/termination of the projects;
 Unremitted taxes withheld due to BIR totaling P4.310 million;
265
 Receivable accounts totaling P3.605 million, outstanding for 10
years or more not applied authority for write-off;
 Unreliable balances of the Receivable accounts due to the

negative balances of subsidiary ledgers totaling P1.668 million;
and,
 Unrecovered cash shortages from under- remittance of

collections of taxes, revenues and receipts, and from receipt of
trust liabilities totaling P.933 million.
Carcar City Adverse  Cash in Bank – Local Currency, Current Account (1-01-02-010)
is not reliable due to the continued existence of unreconciled
differences already noted in previous years totaling P12.999
million and which include the amount of P24.148 million from a
closed PNB account;
 Thirty six (36) accounts – cash, receivables and payables, had

negative balances and some accounts had no subsidiary ledgers
and remained unadjusted and were not disclosed in the Notes to
Financial Statements and account balances reported in the trial
balance do not reconcile with the balances reported in the
subsidiary ledgers, thereby casting doubt on the accuracy in the
presentation of the financial statements;
 Real Property Tax Receivable/Special Education Tax Receivable

were not equal to its reciprocal accounts-the Deferred Tax
Income and real property tax was not a major source of fund in
the preparation of the budget as collections thereof in the
previous year was relatively low;
 Progress payments for the new Carcar City Hall and Public
Market were booked directly as Buildings (1-07-04-010) and
Other Infrastructure Asset (1-07-03-990) and Markets (1-07-04-
040), respectively, and were not booked as Construction in
Progress–Buildings and Other Structures (1-07-10-030); and,
 Abnormal balance of Advances to Contractors (1-05-01-010)

account under the Trust Fund amounting to P1.113 million due to
the transfer of the unutilized appropriation for the Riprapping of
Carcar River under the General Fund Books to Trust Fund books
under Trust Liabilities-DRRM Fund account.
Danao City Unqualified
Lapu-Lapu City Qualified  Property, Plant and Equipment (PPE) account balance as of
December 31, 2018 totaling to P3.113 billion and P499.623
million under the General Fund (GF) and Special Education Fund
(SEF), respectively, were not established due to the discrepancy
266
noted totaling P391.824 million between the inventory list of the
General Services Office (GSO) and the General Ledger (GL)
balance and unserviceable properties amounting to P29.195
million were still recorded as PPE; and,
 Due From Other Funds in the General Fund (GF) totaling P17.566
million Special Education Fund (SEF) amounting to P.017 million
and in the Trust Fund (TF) amounting to P34.107 million did not
reconcile with its respective reciprocal accounts Due To Other
Funds in the GF totaling P88.782 million, in the SEF amounting
to P.092 million and in the TF amounting to P32.282 million with
a difference of P69.485 million, thus, casting doubt on the
accuracy of the amounts presented in the financial statements.
Mandaue City Qualified  PPE items in the financial statements of P3.891 billion did not
reconcile with the actual physical count of P810.073 million
conducted by the General Services Office with a disparity
amounting to P3.081 billion which affect the fair presentation of
the account in the financial statements; and,
 Transferred Assets in the form of Drugs and Medicines received

from the Department of Health in the total amount of P1.087
million for the period 2016-2018 was not recorded in the books of
accounts.
Naga City Qualified  Property, Plant and Equipment accounts totaling P1.904 billion
(excluding Construction in Progress accounts), are not reliable
due to the unreconciled difference of P127.076 million between
accounting records and physical inventory report, and the
inclusion of unserviceable and other items which could no longer
be identified and not found;
 Supplies inventory accounts per accounting records totaling

P44.747 million and per inventory report of the GSO of P1.045
million showed a difference of P43.701 million due to: a) non-
submission of the inventory reports on some accounts; b) non-
conduct of reconciliation between the balances per books and
inventory reports; and c) non-issuance of Requisition and Issue
Slip, thereby affecting the reliability of the accounts in the financial
statements; and,
 Due to LGUs account totaling P45.216 million in the General

Fund and Trust Fund is not reliable due to erroneous
classification of accounts totaling P10.611 million of which P.168
million and P10.443 million should be booked to Due to NGAs
and Trust Liabilities, respectively.
Talisay City Qualified  Unreconciled difference of P4.524 million between the book and
bank balances of the Cash in Bank account;
267
 Unreliable balance of the Receivable accounts due to the non-
recording of the accounts receivables from stall rentals
 Misstatements of the inventory and expense accounts amounting

to P39.629 million due to the outright recording as expenses of
the procured materials and supplies for the year 2018;
 Unreliable balance of the Inventory accounts amounting to

P23.681 million due to the non-preparation of the Summary of
Supplies and Materials Issued (SSMI) and the Report of Physical
Count of Inventories (RPCI); and,
 Unreliable one hundred ninety (190) general ledger accounts

consisting of the balances of assets, liabilities, income and
expense accounts in the General, Special Education and Trust
Funds totaling P2.082 billion, P188.744 million and P66.736
million, respectively due to the non-reparation of the subsidiary
schedules.
Toledo City Qualified  Property, Plant and Equipment accounts amounting to P2.437
billion cannot be relied upon due to the variances noted per
accounting records and per inventory report of the General
Services Department (GSD);
 Cash-in-Bank – Local Currency Account balance of P2.493 billion

is doubtful due to unreconciled amount of P14.921 million
between the General Ledger balance and the bank balance per
confirmation replies from the concerned banks as no bank
reconciliation statements were prepared and submitted for the
period October to December 2018; and,
 Dormant receivable accounts totaling P1.088 million still carried

in financial statements are not supported by subsidiary ledgers
casting doubt on the reliability of the said amounts.
Municipalities:
Alcantara Qualified  Due to the failure of Management to prepare and submit the
updated inventory report of the Property, Plant and Equipment
totaling P101,830 million or 54% of the total asset and the none
maintenance of PPE ledger cards rendering the existence,
valuation and correctness of the total PPE balances doubtful.
Alcoy Adverse  Subsidiary Ledgers for Cash – Local Treasury (Account 1-01-01-
010) was not maintained by the Municipal Accountant while
cashbook maintained by the Municipal Treasurer was not
reconciled with the accounting records every month, thus the
accuracy, validity and reliability of account balance amounting to
P2.167 million is doubtful; and,
268
 Disbursements totaling P11.097 million and other reconciling

items noted in the bank reconciliation statements with a net
overstatement of P2.657 million have not been recorded and/or
adjusted in the books while Cash in a Savings Account amounting
to P4.305 million was not recorded and reported in the Financial
Statements (FS) which understated the Cash-in-Bank balance by
P4.282 million as of December 31, 2018.
Alegria Management Letter  Due to Non-Submission of Financial Statements for CY 2018.
Aloguinsan Qualified  Property, Plant and Equipment account balance as of December

31, 2018 stated as P66.603 million could not be ascertained by
reason of non-preparation or non-submission of physical
inventory report.
Argao Management Letter  Due to Non-Submission of Financial Statements for CY 2018.
Asturias Unqualified
Badian Qualified  Due from Other Funds and Due to Other Funds, for all funds in
the amount of P9.870 million and P11.604 million, respectively,
showed a total difference of (P1.734 million) due to unadjusted
reconciling items.
Balamban Qualified  Non-submission of the completed Report on the Physical Count

of Property, Plant and Equipment (RPCPPE) totaling to P728.131
million, thereby resulting to the audit team’s inability to ascertain
the existence, completeness, and valuation of the account as of
December 31, 2018;
 Road Networks and Flood Control Systems accounts totaling

P291.051 million were not provided with Allowance for
Depreciation for CY 2015 to 2018 or a month after the
construction was completed and turned-over, thus understating
the expenses and overstating the net income and PPE accounts
presented in the financial statement as of December 31, 2018;
 Road Network System was not also presented in the Notes to

Financial Statements and included in the Report on the Physical
Count of Local Road Networks as required
Bantayan Qualified  Non-preparation and submission of updated inventory reports

rendered the non-reliability of the Property, Plant and Equipment
account balances totaling P243.787 million; and,
 Loans Receivable-Others account recorded under the General

Fund of the Municipality totaling P11.902 million
as of December 31, 2017 have been outstanding for more than
269
eight (8) years and could not be ascertained due to non-
submission of schedules and pertinent records or documents
making the account doubtful as to its collectability, validity and
propriety.
Barili Qualified  Property, Plant and Equipment account balance as of December

31, 2018 stated as P225.003 million (net of depreciation) could
not be ascertained by reason of non-preparation and non-
submission of physical inventory report.
Boljoon Qualified  Cash In Bank amounting to P10 million was recorded under the
Savings, instead of Current account, and cash balance per books
has a net understatement of P.137 million due to unadjusted
reconciling items which misstated the Cash balance, respectively,
as of December 31, 2018.
Borbon Management Letter
Carmen Qualified  Property, Plant and Equipment (PPE) account balances totaling
P299.775 million which is 56.02% of its total assets are doubtful
due to the unreliable report of physical count of PPE which was
materially incomplete and lacking vital information on values and
description; and,
 Correctness of the ledger balances of PPE cannot be ascertained

because no complete and updated PPE ledger cards were
maintained by the accounting department.
Catmon Qualified  Property, Plant and Equipment (PPE) account balances totaling
P120.206 million are doubtful due to the unreliable report of
physical count of PPE which was materially incomplete and
lacking vital information on values and description and the
correctness of the ledger balances of PPE cannot be ascertained
because no complete and updated PPE ledger cards were
maintained by the accounting department.
Compostela Qualified  Property, Plant and Equipment (PPE) accounts with a total of
P198.885 million as of December 31, 2018 were noted with
deficiencies, to wit: a) Report on Physical Count of PPE was not
submitted; b) PPE Ledger Cards included CY 2018 acquisitions
only; and, c) PPE account balances and depreciation were not
supported with schedules; and,
 Financial assistance amounting to P.149 million given to the

barangays were not supported with documents required and were
outright recorded as expenses without the necessary liquidation.
Consolacion Management
Letter
270
Cordova Management
Letter
Daanbantayan Qualified  Property, Plant and Equipment (PPE) account balances of

P207.990 million cannot be completely validated because the
accounting and property records were incomplete & unreconciled
and a physical inventory was not conducted for the past several
years to check the existence and actual physical condition of the
assets and the identified PPEs were not provided with
depreciation charges;
 Failure to transfer the unexpended balances of the Local Disaster

Risk Reduction and Management Fund (LDRRMF) to the Trust
Liability-DRRM account in the Trust Fund books amounting to
P22.012 million, thereby rendering the balance of the account
amounting to P6.429 million as of December 31, 2018 inaccurate
and the LDRRMF utilization report of the Municipality were not
supported with separate Registries of Appropriations, Allotments
and Obligations (RAAO) as required; thus, the unutilized
balances cannot be verified;
 Cash advances on Supplemental Feeding Program (SFP)

totaling P4.617 million were already recorded as fully liquidated
in the Municipality’s books even though the liquidation reports
were either not submitted or the supporting documents were
insufficient to the amount granted thereby overstating the
expenses and understating the receivable & government equity;
thus, the propriety and validity of the recorded expenses cannot
be ascertained and disbursement voucher and its supporting
documents for the purchase of 812 sacks of rice amounting to
P1.624 million which was paid to Brynt Marketing on September
4, 2018 was not presented for audit;
 Various asset & liability accounts totaling P3.552 million and

P.131 million, respectively, were doubtful due to its dormancy
status and absence of Subsidiary Ledgers; and,
 Due from Other Funds account in the amount of P1.908 million

did not reconcile with the consolidated balance of the Due to
Other Funds amounting to P1.493 million, thereby rendering both
accounts unreliable.
Dalaguete Qualified  Funds received for specific purposes totaling P19.300 million
were recorded under the General (GF), instead of under the Trust
Fund (TF), while economic enterprises operated by the
Municipality of Dalaguete have no special accounts in the GF and
not all income-generating activities were reported in the financial
statements while reconciling items noted in the bank
reconciliation statements with a net overstatement of P2.691
million have not been adjusted in the books which misstated the
271
Cash-in-Bank balance as of December 31, 2018 and casts doubt

on the propriety of reported income.
Dumanjug Qualified  Due from Other Funds and Due to Other Funds were not
reconciled showing a discrepancy at year-end amounting to
P15.252 million;
 The General Fund year-end balances of statutory mandatory

deductions did not reconcile with the December withholding
amounts by P2.354 million;
 Entries in Statement of Changes in Net Assets/Equity totaling

P6.604 million were not in accordance with IPSAS 3; and,
 Property, Plant and Equipment (PPE) stated as P165.189 million,

(net of depreciation) as of December 31, 2018 could not be
ascertained due to the inability of the management to conduct and
submit a report on the physical inventory of the same.
Ginatilan Qualified  Receivable accounts totaling P7.710 million were unreliable due
to absence of subsidiary records and source documents, thus
schedules provided did not contain the required details precluding
complete review of items in the schedule;
 Property, Plant and Equipment accounts totaling P131.536

million are unreliable due to: (a) inclusion of unserviceable
properties, P2.369 million; (b) unaccounted properties, P.246
million; and (c) small items capitalized, P.110 million; and,
 Physical existence of Breeding Stocks and Agricultural Produce

for Distribution totaling to P.746 million is unascertained due to
the non-submission of list of beneficiaries and trust/memorandum
of agreement with the recipients, thus rendering the balances
unreliable.
Liloan Qualified  Deficiencies were noted on Property, Plant, and Equipment (PPE)
accounts with a total of P380.139 million as of December 31,
2018;
 Financial Assistance amounting to P3.993 million given by MLGU

Liloan to the barangays and the Liga ng mga Barangay were not
covered with documents and were outright recorded as expenses
without the necessary liquidation; and,
 Fund transfers to two hospitals amounting to P1.300 million were

outright recorded as Donations (5-02-99-080) and without the
required liquidation.
Madridejos Management  Due to Non-Submission of Financial Statements for CY 2018.

Letter
272
Malabuyoc Adverse  Seventy-four (74) account balances in the total amount P232.189
million are not supported with subsidiary schedules since 2001,
thus rendering such balances unreliable;
 Non-conduct of complete physical count of all its properties/ non-

submission of the report on Physical count of Property, Plant and
Equipment (RPCPPE) since 2009 or earlier and non-conduct of
reconciliation of property and accounting records of PPE
balances totaling P116.880 million (net), thus existence of assets
and accuracy of property records are unascertained;
 Loans Payable-Domestic amounting to P11.826 million is

unreliable due to: (a) erroneous recording of monthly
amortization; (b) non-presentation of its current portion under
Current Liabilities section in the financial statements; and, (c)
non-submission of complete loan documents; and,
 Disbursements totaling P2.662 million from January to October

2018 and all disbursement vouchers from November to
December 2018 could not be verified due to non-submission of
the disbursement vouchers and its supporting documents.
Medellin Qualified  Property, Plant & Equipment account balance of P193.521 million
(net of depreciation) cannot be determined due to inadequate and
unreconciled subsidiary and property records and no physical
inventory was conducted to identify and check the existence and
condition of the assets;
 Cash advances balance of P11.831 million remained unliquidated

even if the purposes for which these were given have already
been served;
 Sixteen (16) projects / programs / activities under the Trust Fund

totaling P1.060 million from Due to Other National Government
Agencies (NGAs) account were not yet implemented or
implemented but not yet liquidated thereby unexpended balances
were not returned to the concerned source agencies; and,
 Funds totaling P1.083 millionreceived in CY 2018 and prior years

as financial assistance for the implementation of certain
programs/projects booked under Due to LGUs account remained
idle due to failure of the Municipal Accountant to fully liquidate or
return the unused funds to the source agency.
Minglanilla Management
Letter
Moalboal Management
Letter
273
Oslob Qualified  Financial Statements (FS) and related accounting reports for CY
2018 were not submitted within the prescribed period, preventing
the timely audit of transactions and accounts; while procurements
of various spare parts for municipal vehicles and supplies
aggregating P1.456 million were not taken up as “Other Supplies
and Materials Inventory” but recorded directly as an expense
instead of upon actual issuance thereof which understated the
Inventory account as of a particular period.
Pilar Qualified  Physical Inventory of PPE not completed during the year and non
preparation of subsidiary ledgers/cards per item of PPE.
Pinamungajan Unqualified
Poro Qualified  Unreliable inventory accounts due to the non-maintenance and

non-preparation of perpetual inventory records at the Accounting
Division and stock cards and property cards at the General
Service Office; and,
 Several assets and liability accounts have negative balances, a

condition which may mislead the user of the financial statements
in their economic decisions and accuracy and validity of these
accounts were doubtful due to lack of data and subsidiary
ledgers; and,
 Due from Other Funds and Due to Other Funds accounts showed
unreconciled balances amounting to P1.146 remained
unliquidated, thereby casting doubts on the accuracy and
reliability of the balances presented in the financial statements.
Ronda Management
Letter
Samboan Qualified  Property, Plant and Equipment account balances including

Breeding Stocks totaling P259.634 million are unreliable due to
the inclusion of properties amounting to P37.491 million without
breakdown or details, with unascertained physical existence in
the amount of P72.452 million and P2.156 million unserviceable
properties, thus management’s assertions on existence,
classification and understandability are not achieved; and,
 Forty general ledger accounts were unreliable due to the absence

of subsidiary schedules supporting such accounts with balances
totaling P59.445 million, thus, the accuracy of the balances of
assets and liabilities in the General, Special Education and Trust
Funds could not be ascertained and relied on.
San Fernando Management  Due to non-submission of financial statements.

Letter
274
San Francisco Management  Due to non-submission of financial statements.
Letter
San Remigio Qualified  Cash advances of P1.666 million remained unliquidated even if
the purposes for which these were given have already been
served;
 Depreciable Property, Plant and Equipment (PPE) costing

P45.286 million, equivalent to 19.75% of total depreciable PPE of
P229.234 million were not provided with Accumulated
Depreciation, resulting in the understatement of Depreciation
Expenses and corresponding overstatement of Net PPE and
Government Equity;
 Inventory accounts totaling P.953 million could not be determined

due to inadequate records and failure to conduct physical count
on the reported balance and Summary of Supplies and Materials
Issued were not regularly prepared;
 Funds totaling P13,728 million and P1.265 million received in CY

2017 and prior years as financial assistance for the
implementation of certain programs/projects booked under Due
to NGAs & Due to LGUs account, respectively, were either
unutilized; and,
 Real Property Tax (RPT) / Special Education Tax (SET)

Receivables totaling P15.860 million remained uncollected as of
December 31, 2018 which if management collected could have
been used to augment the limited resources of the Municipality to
finance other undertakings.
Santa Fe Unqualified
Santander Qualified  Non-submission of subsidiary schedules to support one hundred

two (102) account balances in the trial balance totaling P294.525
million, thus, rendering balances of accounts in the financial
statements unreliable;
 Receivables in the amount of P19.212 million included P10.423

million representing the unrecovered amount of deposit in the
Rural Bank of Santander, Inc. (RSBI), which was held under
receivership by the Philippine Deposit Insurance Commission
(PDIC) in 1999; and,
 Marine Engines and Motorized Bancas acquired in 2010 and

2013 totaling P2.811 million were not recorded in the
municipality’s books of accounts.
275
Sibonga Qualified  Property, Plant and Equipment (PPE) totaling P232.284 million
could not be ascertained as physical inventory was not conducted
for more than five years and the unavailability of adequate
records made it difficult to apply other alternative audit
procedures;
 Land Account totaling P11.808 million was only supported with

Tax Declarations instead of the Transfer Certificate of Titles for
the 67 municipal lots;
 Dormant Breeding Stocks Account in the amount of P1.993

million was written-off from the books of accounts; and,
 Cash in bank – local currency totaling P188.295 million cannot be

ascertained as monthly bank reconciliation statements were not
prepared.
Sogod Qualified  Due to the unreconciled balance of the Property, Plant and
Equipment (PPE) in the amount of P17.221 million, thus the
accuracy of the recorded PPE was doubtful.
Tabogon Qualified  Fifteen (15) projects/programs/activities under the Trust Fund

totaling P31.323 million from Due to Other National Government
Agencies (NGAs) account were not yet implemented or
implemented but not yet liquidated thereby unexpended balances
were not returned to the concerned source agencies;
 Funds totaling P.985 million received in CY 2014 and prior years

as financial assistance for the implementation of certain
programs/projects booked under Due to LGUs account remained
idle due to failure of the Municipal Accountant to fully liquidate or
return the unused funds to the source agency;
 Land account totaling P12.220 million could not be ascertained

due to the absence of valid proofs of ownership;
 Reconciling items in the Bank Reconciliation Statement (BRS) of

all Funds which had accumulated to a net understatement of
P.412 million over the years remained unrecorded / unadjusted
due to the inability of management to secure proper
documentation to determine the nature of the transactions as
basis for adjustments in the books; and,
 Breeding Stocks of P3.310 million was unreliable due to

erroneous recognition, inaccurate measurement and non-
monitoring of the account.
276
Tabuelan Unqualified
Tuburan Adverse  Incomplete conduct of physical inventory of all its properties,

hence, the existence, completeness and valuation of the
Property, Plant and Equipment (PPE) account in the books
totaling P344.289 million (inclusive of depreciation) cannot be
relied upon as of year-end;
 Non-recognition in the books of the Public Infrastructure accounts

as of December 31, 2012 totaling P52.119 million understated the
PPE accounts by the same amount; and,
 Non-capitalization of the interest incurred in CY 2017 and 2018

for loans availed for the construction of Tuburan Two-Storey
Public Market totaling P1.191 million has overstated the
expenses and understated the net income realized as well as
understating the CIP-Building and Other Structures account by
the same amount in the financial statements as of December 31,
2018.
Tudela Qualified  Physical Inventory of PPE not completed during the year and non
preparation of subsidiary ledgers/cards per item of PPE;
 Failure of the municipality to set up the Real Property Tax

Receivables and Special Education Tax Receivables since 2012
have rendered the accuracy of the account balances
doubtful;and,
 Transactions from January 2009 up to June 2010 remained

unrecorded in the books due to non-submission of transaction
documents as basis for recording.
Siquijor Qualified  Land account of P47.996 million is not reliable because of the
unreconciled difference of P20.385 million as compared with the
report by the General Services Office (GSO) and the reported
balance includes values of parcels of land that are not covered by
Certificates of Title in the name of the Provincial Government as
compared with the accounting records;
 Movable Property, Plant and Equipment (PPE) accounts of

P233.857 million per accounting records remained unreconciled
with the Report of Physical Count of Property, Plant and
Equipment (RPCPPE) of the GSO as at year-end showing a
 Inventories of P25.590 million could not be ascertained due to the

non-conduct of physical count, while the Accounting Office and
the GSO did not maintain property ledger cards and stock cards;
277
 Due from Other Funds and Due to Other Funds showed an

unreconciled balance of P3.426 million; and,
 Contract costs of infrastructure projects were taken up as debit to

Construction in Progress and credit to Accounts Payable
accounts instead of recording to a separate registry to control the
appropriations, allotments and obligations.
Municipalities
Enrique Villanueva Qualified  Inventories costing P1.115 million and movable properties with
net book value of P6.741 million could not be ascertained due to
the non-conduct of physical count, while the Accounting and the
Municipal Treasurer’s Office did not maintain property ledger
cards and stock cards, respectively; and,
 Due from Other Funds and Due to Other Funds showed an

unreconciled balance of P.063 million, thus affecting the reliability
of the financial statements.
Larena Qualified  Movable Property, Plant and Equipment and Inventories

accounts totaling P12.110 million or 9.49% of the total PPE as of
December 31, 2018, could not be ascertained since these were
not supported by physical inventory report due to the non-conduct
of actual physical count and inventory taking.
Lazi Management
Letter
Maria Qualified  Property, Plant and Equipment and Inventories accounts totaling
P7.500 million or 45% of the total PPE as of December 31, 2018,
could not be ascertained since these were not supported by
physical inventory report due to the non-conduct of actual
physical count and inventory taking.
San Juan Qualified  Movable properties in the Property, Plant and Equipment (PPE)
accounts with a net book value of P11.120 million could not
ascertained since the Municipality did not establish its existence
and valuation due to the continuous non-conduct of physical
count and the non-maintenance of property ledger cards and
stock cards by the Municipal Accountant and Municipal
Treasurer; and,
 Breeding Stocks in the total amount of P.334 million remained

unadjusted despite the granting of relief of accountabilities and
the recommendations to write-off from the books the
corresponding costs of the deceased animals and the agency did
not prepare the inventory report of the breeding stocks and
reconcile the same with the accounting records which render the
account unreliable.
278
Siquijor Qualified  Property, Plant and Equipment and Inventories accounts totaling
P21.160 million or 14.48% of the total PPE, could not be
ascertained since these were not supported by physical inventory
report due to the non-conduct of actual physical count and
inventory taking.
Region VIII – Eastern Visayas

Biliran Qualified  Public infrastructure projects implemented prior to CY 2015
totaling P176 million or 75% of the total cost in the Registry of
Public Infrastructures, were not transferred in CY 2018 to the
Infrastructure Assets account in the Property, Plant and
Equipment.
Municipalities:
Almeria Qualified  Land and Infrastructure Asset accounts in the Property, Plant and
Equipment are unreliable due to the following: Land owned by the
LGU with assessed value of P2.800 million were not recorded,
road projects implemented prior to CY 2015 at P12 million were
not transferred from the Registry of Public Infrastructures, the
cost of repaired roads was not derecognized, impairment loss on
damaged property was not computed nor recorded and
computation of accumulated depreciation was in lump sum
instead of per individual account in the PPE.

totaling P3.800 million were not transferred to the Infrastructure
Asset account in the Property, Plant and Equipment (PPE) in CY
2018 from the Registry of Public Infrastructures.
Cabucgayan Qualified  Certain accounts were unreliable due to the following:

Infrastructure assets under Property, Plant and Equipment
totaling P30 million was not provided with depreciation; Inter-
agency payables has and unreconciled difference of P21.600
million between balance per books and per bank; and Cash in
Bank account was understated by P5.700 million due to
unrecorded disbursements.
Caibiran Qualified  Property, Plant and Equipment (PPE) account with a balance of
P99 million as of December 31, 2018 is inaccurate and unreliable
due to unrecorded lands owned by the LGU amounting of P.711
million, unrecorded donated assets of P.123 million and non-
provision of depreciation on properties costing P32 million.
Culaba Qualified  Property, Plant, and Equipment (PPE) totaling P98 million as of
December 31, 2018 were inaccurate and unreliable due to the
following: 1.) donated assets totaling P.377 million were not
recorded 2.) ownership of lands recorded at P2.300 million were
not transferred to the LGU; 3.) physical count of properties was
not conducted and the related Report on the Physical Count of
279
Property, Plant, and Equipment (RPCPPE) was not prepared and
reconciled with accounting records; 4.) Property Cards and PPE
Ledger Cards were not maintained, and; 5.) unserviceable
properties were not disposed.
Kawayan Qualified  Property, Plant and Equipment (PPE) with a balance of P120
million as of December 31, 2018 is unreliable due to the
following: lands owned by the LGU with appraised value of
P6.300 million and donated assets of P1.300 million were not
recorded; the carrying value of repaired infrastructure assets
were not derecognized; and depreciation of some properties were
not provided; and,
 Due to NGAs account amounting to P31.700 million is unreliable

as it includes the amount of P12 million which had been carried
in the books for nearly ten years even if it was already utilized.
Maripipi Qualified  Property, Plant and Equipment (PPE) with a balance of P33
million as of December 31, 2018 could not be ascertained caused
by the following: properties without any records on file were
valued at P1.00 or were not assigned any value at all instead of
determining its fair market value, depreciation was not provided
for CY 2018, various equipment were difficult to identify as these
were not labelled with Property Tags, Property Acknowledgement
Receipts (PAR) on issued equipment were not renewed every
three years and Property Cards were not maintained and conduct
of the annual physical count of its properties, prepare the related
Report on the Physical Count of PPEs and reconcile the same
with accounting and property records remained unimplemented
audit recommendations for the past years.
Naval Qualified  Public infrastructure projects implemented prior to CY 2015

totaling P3.300 million or 75% of the total cost in the Registry of
Public Infrastructures, were not recorded in CY 2018 to the
Equipment.
Eastern Samar Qualified  Road Networks account amounting to P487.909 million could not
be ascertained due to: a) no disclosure of total road network
system in the Notes to Financial Statements (FS); b) non-
preparation and non-submission of Report on Physical Count of
Local Road Network (RPCLRN) and ; c) non-segregation of costs
for each road component of local roads in the Report of Local
Road Network (RLRN);
 Accounts payable recorded at year-end amounting to P153.362

million could not be ascertained due to non-submission of
documents to support that all the transactions were founded on
valid claims and excess obligations amounting to P1.211 million
were not adjusted and absence of subsidiary ledgers weakened
accounting controls over monitoring of the Accounts Payable
account;
280
 Local Disaster Risk Reduction and Management Fund

(LDRRMF) for CY 2018 on Quick Response Fund (QRF) and
Maintenance and Other Operating Expenses (MOOE) in the
amount of P40.568 million instead of transferring actual cash of
the same amount and the utilization of the LDRRMF for the year
was not completely disclosed in the Notes to FS;
 Due from Other Funds and Due to Other Funds with reported
balances of P95.740 million and P100.277 million, respectively,
as of December 31, 2018 are of doubtful accuracy with a total
variance of P4.537 million due to erroneous recording of
transactions in the accounts;
 Stale checks in the accumulated amount of P3.690 million

remained as reconciling items in the Bank Reconciliation
Statements (BRS) as of December 31, 2018 and were not
reverted to cash; and,
 The submitted FS were not compliant with the provisions of

PPSAS No. 1 on Presentation of Financial Statements and
accounting errors/deficiencies were noted in various accounts
aggregating P.830 million.
City
Borongan City Modified/  Property, Plant and Equipment (PPE) account balances per
Qualified books with net book value of P848.457 million remained doubtful
due to the non-reconciliation between the records of the Office of
the City Accountant and those of City General Services Office
(CGSO) because of incomplete Property Ledger Cards (PLC) and
Property Cards (PC), respectively and Report of Physical Count
of Property, Plant and Equipment (RPCPPE) does not agree with
the total amount of PPE in the record of the Office of the City
Accountant for failure on the part of CGSO to include real
properties, complete disclosure of unit value and to account for
the 431 properties at the time of physical inventory in the
RPCPPE.
 Road Networks account with the balance of P139,418 million as

of December 31, 2018 could not be ascertained due to the non-
preparation and submission of Local Road Inventory and Road
Map;
 Due from Other Funds and Due to Other Funds, for all funds, do
not reconcile by P27.698 million as of December 31, 2018;
 Various liability accounts totaling P6.364 million aging two years

and more are doubtful;
 Provision of depreciation expense of all infrastructure projects

completed during CY 2017 worth P3.347 million was overlooked
and was not recognized and corrected in the books;
 Depreciation expense is overstated by P2.538 million due to

whole-year recognition of depreciation of PPE disregarding the
actual acquisition/completion date;
281
 No adequate disclosures in the Notes to the Financial statements

pertaining to the details of the Loans Payable-Domestic account
with an outstanding balance of P8.215 million as of December 31,
2018, thus resulting in the unaccounted loans payable in the
 Cash-Local Treasury account at year-end in the General Fund

books in the amount of P.282 million consisted of prior year’s
unreconciled balances, caused by the failure of the City Treasurer
and the City Accountant to render a complete and accurate
recording of the collections and deposits.
Municipalities
Arteche Qualified  Reconciliations between the book and bank balances of the cash
in bank accounts were not prepared regularly and correctly
resulting to the treatment of eight (8) checks totaling P.057 million
as outstanding checks even if the same were negotiated or paid
and other errors in the reconciliation, thereby affecting the
accuracy of the P13.689 million balance of Cash in Bank-LCCA.
Balangiga Adverse  Cash in Bank-Local Currency, Current Account (CIB-LCCA)

balance of P91.009 million is doubtful because of unreconciled
amounts totaling P6.161 million;
 Discrepancy of P.482 million was noted between receivables

reported in the FS and the Notes to FS;
 Doubtful presentation of total PPE balance of P178.135 million

due to discrepancy of P69.776 million between the Financial
Statement and the Notes to FS, difference by P.389 million
between the ending balance in 2017 and beginning balance in
2018 due to unreconciled costs of 6 PPE items presented in the
FS and RPCPPE, incomplete recording of completed projects
totaling to P32.602 million, and error in addition of total PPE in
the amount of P.158 million in the Notes to FS;
 Medical, Dental and Laboratory Supplies for Distribution in the

amount of P.095 million recorded as Inventory in the FS was not
disclosed in the Notes to FS;
 Inter-Agency Payables account has a discrepancy of P51.731

million between the FS and the Notes to FS, and discrepancy of
P4.058 million was noted between the GL and FS;
 Trust Liabilities account in the FS has a difference of P5.400

million from the Notes to FS and P.539 million discrepancy
between the GL and FS;
 Variance of P21.712 million between the FS and Notes to FS

were observed for the accounts Shares, Grants and Donations,
Maintenance and Other Expenses, Non-Cash Expenses,
Financial Assistance/Subsidy to LGUs, Collections from Taxes,
and Other Receipts;
282
 Unaccounted difference by P.010 million of reciprocal accounts,
Due from Other Funds and Due to Other Funds;
 Non-recognition of Property Tax Receivables and Deferred Real

Property Tax Income, collectibles from concerned constituents in
Calendar Year (CY) 2018; and,
 Revenues and Expenses reported in the Statement of

Comparison of Budget and Actual Amounts have total difference
of P3.198 million, as against the (SFPe) in the General Fund.
Balangkayan Qualified  PPE account balance of P111.059 million as of December 31,

2018 could not be ascertained due to the non-reconciliation
between the records of the office of the Accountant and those of
the General Services Office (GSO) because of incomplete
Property Ledger Cards (PLC) and Property Cards (PC);
 Road Networks of P 10.547 million for the year 2018 could not be
ascertained of its reliability due to the non-presentation and
submission of Local Road Inventory and Road Map and not
properly recorded and presented in the statement of financial
position according to the provisions of COA Circular No. 2015-
008;
 Loans Payable-Domestic amounting to P.654 million is

understated by P13.967 million because of erroneous accounting
entries made and no adequate disclosure in the Notes to the
Financial Statements pertaining to the details of the Loans
Payable; and,
 Cash, Local Treasury account at year-end in the General Fund

books in the amount of P1.186 million consisted of prior year’s
unreconciled balances and current years erroneous entries,
caused by the failure of the Municipal Treasurer and Municipal
Accountant to render a complete and accurate recording of the
collections and deposits.
Can-avid Qualified  Cash in Bank account balance for the General Fund is
understated by P7.311 million due to failure of the Municipal
Accountant to prepare bank reconciliation statements and identify
items that could have needed adjustments, thus may render the
Financial Statements unreliable if aggregated with other
misstatements and found material in amount; and,
 Building, Motor Vehicle, and Office Equipment accounts of the

agency were not properly recorded and their corresponding
depreciation were computed erroneously due to the laxity of the
Municipal Accountant in reviewing and correcting their records
and reports resulting in an overstated account balance of Motor
Vehicles and Office Equipment of P1.391 million and P.970
million, respectively, and understatement of P2.920 million for the
Building account and seven (7) Motor Vehicle, and two-hundred
four (204) Office Equipment items per Report on Physical Count
of Property, Plant and Equipment was not included in the PPE
per books of accounts, due to non-maintenance of the PPE
Ledger Cards (PPELC) by the municipal accountant and non-
reconciliation of his records with the RPCPPE of the General
Services Officer.
283
Dolores Qualified  Property, Plant and Equipment is doubtful because of the
discrepancies of balances per Books and per Report on Physical
Count of Property, Plant and Equipment with a net amount of
P22.907 million caused by non-reconciliation by the accounting
records and records of the General Services Officer.
General MacArthur Qualified  Various account balances totaling P14.736 million in the financial
statements (FS) were of doubtful accuracy and reliability, due to
deficiencies found in audit, and failure to provide a copy of
complete General Ledger and Subsidiary Ledgers to support the
balance presented in FS.
Giporlos Qualified  Loans payable with year-end outstanding balance of P6.615

million were not fully disclosed in the notes to the financial
statements; and,
 Use of inappropriate account to take-up the wages for the hired

job orders totalling P600,000.00 resulted to improper
classification and presentation of the financial statements.
Guiuan Qualified  Inventories are carried in the statement of financial position at

P2.470 million, of which it increase by P2.435 million from the
previous year. Management has not stated the inventories at the
lower of cost and net realizable value but has stated them solely
at cost.
Hernani Qualified  Property, Plant and Equipment (PPE) amounting to P120.342

million cannot be fully ascertained due to: 1) failure of the agency
to prove the existence of ICT Equipment amounting to P.920
million; 2) the agency did not conduct physical count of inventory
at year end; 3) discrepancy between the submitted Inventory List
of PPE and the balances reflected in the FS amounting to P9.904
million; and 4) non-preparation of PPE ledger cards and Property
Cards.
Jipapad Qualified  Cash in Bank-LCCA account with a balance of P 49.839 million

could not be ascertained due to non-preparation of bank
reconciliation statement resulting to unreconciled difference of
 Property, Plant and Equipment of P58.840 millionis unreliable

due to failure of the LGU to conduct physical inventory of its
properties and non-provision of depreciation during the year for
the Water System and Land Improvements costing P19.977
million.
Lawaan Adverse  Property, Plant and Equipment and Inventories amounting to

P117.967 million and P6.343 million respectively could not be
ascertained due to the absence of records and reports, and
Property, Plant and Equipment of P27.771 million disclosed
under Noncurrent Assets;
 Due from Other Funds and Due to Other Funds account

amounting to P5.675 million were presented in the noncurrent
section of the Assets and Liabilities respectively wherein these
should be presented as current;
284
 Loans Payable-Domestic is overstated by P1.846 million due to
erroneous recording of amortization;
 “Due to BIR”, “Due to GSIS” and “Due to PAG-IBIG” showed a

debit balance in the General Fund financial statements of P.196
million, P.212 million and P.056 million, respectively, said over
remittance could not be verified due to the absence of records;
 Payables account under Current Liabilities in the Statement of

Financial Position amounted to P11.651 million but amounts
disclosed in the Notes to Financial Statements totaled only to
P11.566 million having a difference of P.085 million;
 Supplies and Consumables Used account presented in the

Statement of Financial Performance amounted to P10.495
million, however, disclosure of the account in the Notes to
Financial Statements totaled only to P10.479 million having a
difference of P.016 million; and,
 Road Networks of P10.184 million for the year 2018 could not be
ascertained of its reliability due to the non-preparation and
submission of Local Road Inventory and Road Map.
Llorente Unqualified
Maslog Qualified  Cash in Bank account balances for the General Fund, Trust Fund
and Special Education Fund totalling P75.788 million is non-
reliable due to non-submission of Bank Reconciliation
Statements.
 Property, Plant and Equipment account balance of P89.800

million is doubtful due to absence of complete inventory reports;
and,
 Trust Liability-DRRM account amounting to P7.452 million is

understated by such amount due to failure of the Accountant to
transfer unexpended balances of DRRM Funds from prior years.
Maydolong Qualified  Road Networks of P17.648 million for the year 2018 could not be
ascertained of its reliability due to the non-preparation and
submission of Local Road Inventory and Road Map;
 Negative or abnormal balances were incurred under Asset and

Liability Accounts amounting to P.479 million and P.607 million,
respectively, due to erroneous recording of transactions;
 Loans Payable – Domestic recorded in Trust Fund (TF)

amounting to P13.245 million was overstated by P2.232 million
due to incorrect recording of loan repayments for year 2017 and
2018 and interest expense of P.350 million was not taken up in
the books and no adequate disclosure in the Notes to the
Financial Statements pertaining to the details of the Loans
Payable; and,
 Depreciation expenses were still not recognized in the books.
285
Mercedes Adverse  Cash in Bank has an unreconciled amount of P.733 million arrived
at comparing the amount recognized per books and the amount
per audit;
 Property, Plant and Equipment of P37.992 million is not properly

and fairly presented in the financial statements due to non-
computation and recording of accumulated depreciation of Water
Supply System, Office Buildings, School Building, Hospital and
Health Center, Market and Slaughterhouses, Other Structures,
Sports Equipment, Communication Equipment, Disaster
Response and Rescue Equipment, Technical and Scientific
Equipment, Other Machinery and Equipment, Motor Vehicles,
Watercrafts, Other Transportation Equipment, Other PPE and
Other Infrastructure Assets, thus affecting fair presentation of the
account, existence of items of PPE cannot be ascertained due to
partial submission of reports on physical count thereof and net
addition to the beginning balance of Government Equity
representing Prior Period Errors amounting to P.280 million
cannot be verified due to absence of schedules and journals to
ascertain propriety of the adjustment.
Oras Qualified  Cash in Bank, Local Currency Current Account balance of

P37.221 million is unreliable due to erroneous reconciliation
between the book and bank balances;
 Property, Plant and Equipment of P99.879 million is doubtful due

to the failure of the Municipal Inspection Team and the GSO to
conduct complete physical count of all their properties; and,
 Inadequate disclosure in the Notes to Financial Statement of the

credit financing amounting to P135.600 million entered into by the
LGU with Land Bank of the Philippines.
Quinapondan Unqualified
Salcedo Qualified  Receivable accounts totalling P15.820 million were not properly
valued, presented and disclosed in the financial statements and
could not be related to its subsidiary records that renders
inaccurate and misleading information;
 Loans payable with year-end outstanding balance of P6.101

statements, thus, understanding thereof was not enhanced; and,
 Uses an inappropriate account to take-up the wages for hired job

orders totalling P8.253 million resulted to improper classification
and presentation of the financial statements.
San Julian Qualified  Loans payable with year-end outstanding balance of P4.680
statements, thus, understanding thereof was not enhanced.
286
San Policarpo Qualified  Cash in Bank Local Currency Current Account balance of
P27.739 million is unreliable due to erroneous reconciliation
between the book and bank balances resulting to the treatment
of five (5) checks totaling P.718 million as outstanding checks
even if the same were cancelled or paid and other errors of
recording which were not corrected; and,
 Infrastructure Assets amounting to P5.246 million is unreliable

due to non-provision of depreciation and impairment losses and
inadequate disclosure as to the useful lives and depreciation
rates.
Sulat Qualified  Property, Plant and Equipment balance of P111.139 million could
not be ascertained due to : (a) absence of complete and properly
accomplished Report of the Physical Count of Property, Plant &
Equipment (RPCPPE) and Property Cards; and (b) non-
maintenance of complete and properly accomplished Property,
Plant and Equipment Ledger Cards and Real Property Ledger
Cards.
Taft Modified/  Advances to contractors totalling P3.117 million were not

provided with appropriate disclosure in the financial statement
rendering the report not fairly presented;
 Biological assets costing P.049 million acquired and distributed to

the intended beneficiaries but such amount remained in the
statement of financial position rendering the financial statement
not reliable; and,
 Inappropriate account used to take-up the wages for the hired job
orders totalling P.600 million resulted to improper classification
and presentation of the financial statements.
Leyte Qualified  Inventory accounts amounting to P266.580 million at year-end

could not be established and the accuracy of the balance could
not be ascertained because no physical inventory was
conducted, and supplies and materials purchased during the year
totaling P66.980 million were recorded as outright Expense
instead of recognizing them as Asset.
Cities
Baybay City Qualified  Property, Plant and Equipment (PPE) was understated by P264
million due to derecognition of PPEs without valid documents;
 Inventories amounting to P1.600 million were no longer reflected

in the books even if not yet consumed or distributed;
 Receivables totaling to at least P4.800 million from services

already rendered by Baybay City Medical Diagnostics and
Dialysis Center (BCMDDC) were unrecorded, and;
 Cash in Bank was understated by P.900 million due to

unrecorded reimbursements received from Philhealth for services
rendered by BCMDDC.
287
Ormoc City Qualified  Road Network in the Infrastructure Asset account with a balance
of P702.762 million or 10% of the total assets of the City as of
December 31, 2018, could not be confirmed since the City did not
conduct an inventory of its local roads, no Report on the Physical
Count of the Road Network System was prepared nor reconciled
with accounting records and disclosures in the Notes to the
Financial Statements were insufficient; and,
 Other properties in the Property, Plant and Equipment (PPE)

account valued at P3 billion at year-end remain unconfirmed due
to unimplemented audit recommendations for the past years to
conduct the annual physical count of its properties, prepare the
related Report on the Physical Count of PPEs and reconcile the
same with accounting and property records.
Tacloban City Qualified  Property, Plant and Equipment totaling P2.080 Billion, excluding
Land and Construction in Progress totaling P577.890 million,
could not be ascertained because of the (a) disparity of the
account balance at year-end as against the Report on the
Physical Count on Property, Land, and Equipment and the
lapsing schedule totaling P1.820 billion and P23.720 million,
respectively, for the same period; (b) misclassification of accounts
that overstated the Property, Plant, and Equipment by P2.600
million; and, (c) failure of the City to comply with the accounting
and reporting requirement for Road Networks with a balance at
year-end totaling P137.160 million;
 Accounts Payable totaling P260.910 million was overstated by

P28.930 million due to: (a) inclusion of obligations totaling
P21.320 million that were already paid; (b) misclassification of
accounts totaling P6.860 million; and (c) inclusion of payables
amounting to P.739 million aging two years or more which are not
covered by perfected contracts, representing balances of
completed projects, the corresponding funds of which are subject
for return to the source agency; and,
 Loans Receivable-Others account totaling P10.840 million had

remained outstanding and non-moving for the past three years,
and no allowance for impairment was provided for losses which
may arise from its non-collection.
Municipalities
Abuyog Qualified  Property, Plant and Equipment (PPE) accounts with a book value
ascertained due to the following: unaccounted difference of
P581.500 million between the physical inventory report and
accounting records caused by incomplete physical count;
Infrastructure assets totaling P186 million were not depreciated;
and Road Network account under Infrastructure Asset with a
balance of P132.600 million were not supported with Local Road
Inventory Report and subsidiary records to identify road
components of each road network.
288
Alangalang Qualified  Road Networks account totaling P22.239 million as at year-end
could not be ascertained due to failure to conduct physical count
of road network system, maintain complete records for roads and
road network components and prepare a lapsing schedule for
depreciation; and,
 Due to Other funds of P45.329 million and Due from Other Funds
totaling P7.563 million could not be ascertained due to a
difference of P37.766 million which remained unadjusted at year-
end.
Albuera Qualified  Property, Plant and Equipment (PPE) account with carrying value
of P240 million as of December 31, 2018 due to incomplete
Report on the Physical Count of PPE, unreconciled amount of
P74 million between accounting and property records and
unrecorded delivered motor vehicles worth P4.900 million;
 Cash in Bank account with year end balance of P269 million due
to unadjusted reconciling items amounting to P3.500 million and
untraced difference of P1.900 million between book balance and
Trial Balance;
 Inventories due to erroneous recording of certain transactions

under the Philippine Rural Development Project (PRDP) which
overstated the Agricultural and Marine Supplies Inventory by at
least P1.5 million and the inclusion of issued semi-expendable
properties amounting to P.813 million instead of recording an
expense; and,
 Payables due to erroneous entries which overstated the Due to

NGA account by P1.100 million.
Almeria Qualified  Property, Plant and Equipment are unreliable due to the following:
Land owned by the LGU with assessed value of P2.800 million
were not recorded, road projects implemented prior to CY 2015
at P12 million were not transferred from the Registry of Public
Infrastructures, the cost of repaired roads was not derecognized,
impairment loss on damaged property was not computed nor
recorded and computation of accumulated depreciation was in
lump sum instead of per individual account in the PPE.
Babatngon Qualified  Road Networks account totaling P1.702 million as at year-end

could not be ascertained due to the failure to conduct physical
count of road network system, maintain complete records for
roads and road network components and prepare a lapsing
schedule for depreciation.
Barugo Qualified  Road Networks account amounting P51.211 million as of

December 31, 2018 could not be ascertained due to failure of the
management to: (a) comply with the transitory provision for the
transfer of 75% of the local roads to the Road Networks account
by end of 2018; (b) compute the correct depreciation expense;
and, (c) render, prepare and maintain a Report on Local Road
Network, Report on the Physical Count of Local Road Network
and Local Road Network Property Card;
289
 Loans Payable account amounting P2.400 million as of

December 31, 2018 was not substantiated / supported with
documents thus, casting doubt on its existence, validity and
legality; and,
 Cash in Bank, Local Currency Current Account at year-end

totaling P107.511 million is unreliable because of the incomplete
submission of bank reconciliation statements for the six (6)
existing current and savings accounts resulting in the presence of
unidentified reconciling items amounting to P.192 million.
Bato Qualified  Property, Plant and Equipment (PPE) account at P214 million as
of December 31, 2018 is unreliable due to the recognition as PPE
construction materials procured by the LGU for projects
undertaken by administration even if some were not yet utilized
while Infrastructure Assets including road networks were not
correctly valued due to non-provision of depreciation on the said
assets.

totaling P3.800 million were not transferred to the Infrastructure
Asset account in the Property, Plant and Equipment (PPE) in CY
2018 from the Registry of Public Infrastructures.
Burauen Qualified  Road Networks account totaling P24.205 million could not be
ascertained and the existence of the account balance could not
be established due to failure of the management to : (a) conduct
physical count and submit the Report on the Physical Count of
the Road Network System; (b) prepare a lapsing schedule for the
computation of depreciation and disclose the road network
system in the Notes to Financial Statements; (c) maintain a Local
Road Inventory and Road Map; (d) keep a complete Local Road
Network Property Card; and, (e) prepare a Report on Local Road
Network;
 Cash in Local Treasury balance of P.507 million in CY 2016,

which was increased to P1.085 million in CY 2018 could not be
ascertained due to untraceable variances and various errors
noted between the books of accounts and actual cash on hand of
the Municipal Treasurer; and,
 Property, Plant and Equipment account amounting to P157.475

million in CY 2015, which was increased to P290.796 million in
CY 2018 could not be ascertained due to inadequacy of the
records maintained in the accounting and property units, and their
existence could not be established due to management’s
continued disregard to conduct physical inventory and submit
reports thereon.
Cabucgayan Qualified  Infrastructure assets under Property, Plant and Equipment

totaling P30 million was not provided with depreciation;
 Inter-agency payables has and unreconciled difference of

P21.600 million between balance per books and per bank; and,
 Cash in Bank account was understated by P5.700 million due to

unrecorded disbursements.
290
Caibiran Qualified  Property, Plant and Equipment (PPE) account with a balance of
P99 million as of December 31, 2018 is inaccurate and unreliable
due to unrecorded lands owned by the LGU amounting of P.711
million, unrecorded donated assets of P.123 million and non-
provision of depreciation on properties costing P32 million.
Calubian Qualified  Due to NGAs and Due to LGUs totaling P52 million and P61
million, respectively, are unreliable as liquidation reports on
completed projects totaling P56 million were not submitted to
reduce the liabilities of the LGU; accuracy and valuation of assets
in the Property, Plant and Equipment (PPE) were also unreliable
since completed projects totaling P73 million were retained in the
Construction in Progress account, the corresponding
depreciation were not computed and the balance of Road
Network account does not include completed road projects in CY
2016 and prior years.
Capoocan Qualified  Road Networks account amounting P15.858 million as of

management to (a) comply with the transitory provision for the
transfer of 75% of the local roads top the Road Networks account
by end of 2018; (b) compute the correct depreciation expense;
and (c) render, prepare and maintain a Report on Local Road
Network (RLRN), Report on the Physical Count of Local Road
Network (RPCLRN) and Local Road Network Property Card
(LRNPC);
 Receivables accounts totaling P1.561 million as of December 31,

20148 were doubtful due to existence of dormant or long
outstanding account balance amounting to P.876 million and
insufficient pertinent documents to substantiate the same; and,
 Cash in Bank-Local Currency, Current Account and Savings

Account at year-end totaling P201.152 million could not be
ascertained because: (a) the monthly bank reconciliation
statements (BRS) prepared and submitted by the Municipal
Accountant were not supported with the original copies of bank
statements, cancelled and paid checks, bank debit and credit
memos resulting in the presence of unverified reconciling items
amounting to P7.610 million; and (b) presence of cash balance
per record in the general fund amounting P2.381 million,
representing a time deposit and current account from Philippine
Postal Savings Bank, which were not supported by a certificate of
time deposit and BRS.
Carigara Qualified  Road Networks account amounting P31.554 million as at

management to:
(a) comply with the transitory provision for the transfer of 75% of
the local roads to the Road Networks account by end of 2018;
(b) recognize depreciation expense; and,
(c) render, prepare and maintain a Report on Local Road Network
(RLRN), Report on the Physical Count of the Road Network
System (RPCLRN), Local Road Network Property Card
(LRNPC), and Local Road Inventory and Road Map;
291
 Failure to recognize depreciation for Property, Plant and
Equipment (PPE) accounts totalling P17.090 million and a
residual value of ten percent (10%) was used in the computation
of depreciation expense of other PPE accounts, resulting in the
overstatement of the carrying amount of the PPE accounts and
understatement of depreciation expense account; and,
 Cash in Bank, Local Currency Current Account (LCCA) balance

at year-end totaling P221.415 million is unreliable because of the:
(a) non-preparation of bank reconciliation statements for the

nine (9) existing current and savings accounts resulting in
the presence of unidentified reconciling items amounting to
P.915 million;
(b) presence of cash balance per record in the general fund

amounting P3.941 million, representing a time deposit which
is not supported by a certificate of time deposit; and,
(c) disparity between the recorded time deposit per books and
the reported balance per servicing bank amounting to P.410
million.
Culaba Qualified  Property, Plant, and Equipment (PPE) totaling P98 million as of
December 31, 2018 were inaccurate and unreliable due to the
following: a) donated assets totaling P.377 million were not
recorded; b) ownership of lands recorded at P2.300 million were
not transferred to the LGU; c) physical count of properties was
not conducted and the related Report on the Physical Count of
Property, Plant, and Equipment (RPCPPE) was not prepared and
reconciled with accounting records; d) Property Cards and PPE
Ledger Cards were not maintained, and; e) unserviceable
properties were not disposed.
Dagami Qualified  Due to GOCC’s account under the General Fund showed a
negative balance amounting to P.070 million due to erroneous
recording, thus resulting to an unreliable balance; and,
 Unexpended balance of the LDRRM Fund amounting to P1.691

million was not transferred to a Special Trust Fund in the Trust
Fund books and its details were not disclosed in the Notes to the
year-end Financial Statements.
Dulag Qualified  Of the P10.434 million balance of Road Networks account as of

December 31, 2018, the carrying amount of P6.693 million could
not be ascertained as there is no breakdown as to its composition
and failure to compute its depreciation expense;
 Due to NGAs in Trust Fund are overstated by P1.130 million as

such amount was labelled “for reconciliation” in its subsidiary
schedule, thus, affecting its fair presentation in the financial
statements; and,
 Two (2) completed infrastructure projects funded from DILG RAY

and DA-BUB in the amounts of P3.490 million and P2.016 million,
respectively were not recognized as Property, Plant and
Equipment of the Municipality, thus, understating the account by
the same amount.
292
Hilongos Qualified  Road Network balance of P62 million in the Infrastructure Asset
account is unreliable as it included barangay roads which were
not turned-over to the respective barangays, municipal road lots
with an appraisal cost of P11 million were not included while road
lots totaling P3.700 million were erroneously recorded in the Land
account instead of Road Network account.
Hindang Qualified  Property, Plant and Equipment (PPE) account at P68 million as
of December 31, 2018 was unreliable due to the non-provision of
depreciation on the Infrastructure Assets including the road
networks of the Municipality while the Construction in Progress
account balance was doubtful since purchased construction
materials and supplies worth P1.644 million were not recorded as
inventories but as Construction in Progress without proper
accountability of its issuances while year-end inventory report
was not prepared.
Inopacan Qualified  Property, Plant and Equipment (PPE) accounts with a book value
ascertained due to the difference of P24.800 million between the
physical inventory report and accounting records arising from
incomplete physical count and the unrecorded donated office
equipment from the Department of Finance (DOF) without
assigned cost.
Isabel Qualified  Property, Plant and Equipment (PPE) with carrying value of P568
million cannot be ascertained due to incomplete physical count,
unrecorded equipment of P6 million and non-provision of
depreciation on Infrastructure Assets for CY 2016 to CY 2018;
 Liabilities were unreliable due to misclassification of long-term

loans payable amounting to P133 million as current liabilities in
the Statement of Financial Position;
 Unresolved discrepancy in the Due to NGAs account balance by

P28 million between the financial statements and subsidiary
ledgers; and,
 Cash in Bank was overstated by P11 million due to uncorrected

prior years’ errors and unadjusted stale checks while the
existence of Receivables totaling P6.7 million aged 91 days to
over ten years are doubtful.
Jaro Qualified  Failure to adjust for reciprocal changes affecting the accounts
Due from Other Funds and Due to Other Funds resulted to an
unreconciled balance amounting to P.194 million; and.
 Property, Plant and Equipment with a carrying amount of

P237.748 million could not be ascertained due to the continued
failure to conduct and submit a Report on the Physical Count of
Property, Plant and Equipment (RPCPPE).
Javier Qualified  Property, Plant and Equipment (PPE) with a book value of P493
million as of December 31, 2018 could not be ascertained due the
physical inventory report and accounting records caused by the
293
following: Unaccounted difference of P169 million between the
incomplete physical count; non-provision of depreciation on
Infrastructure Assets totaling P224 million; and Road Network
account under Infrastructure Asset with a balance of P164 million
was not supported with Local Road Inventory Report and
subsidiary records to identify road components of each road
network.
Julita Qualified  Property, Plant and Equipment (PPE) accounts totaling P164.266
million could not be ascertained due to the following: (a) material
disparity of (10) PPE items between the reported amounts in the
Detailed Statement of Financial Position and or General Ledger,
and the reported balance of the related subsidiary ledger
accounts or Property, Plant and Equipment Ledger Cards
(PPELC) amounting to P 10.747 million, and, (b) the latter does
not reconcile with the Report on the Physical Count of Property,
Plant and Equipment; and,
 Goods purchased totalling P2.684 million were not coursed

through the Inventory account, and the recorded expenses for
supplies and materials totaling P1.669 million were not supported
with the Summary of Supplies and Materials Issued (SSMI), thus,
rendering unreliable, the inventory account and expense account
balances at year-end.
Kananga Qualified  The Infrastructure Assets account in the Property, Plant and
Equipment (PPE) was understated due to road networks projects
and other public infrastructure assets costing P119.862 million
which were not transferred from the Registry of Public
Infrastructure to the appropriate accounts in LGU books and
existence of other properties in the PPE account valued at
P361.239 million as of year-end, including Road Network
account, remain unconfirmed due to unimplemented audit
recommendations for the past years to conduct the annual
physical count of its properties, prepare the related Report on the
Physical Count of PPEs and reconcile the same with accounting
and property records.
Kawayan Qualified  Property, Plant and Equipment (PPE) with a balance of P120
million as of December 31, 2018 is unreliable due to the
following: lands owned by the LGU with appraised value of
P6.300 million and donated assets of P1.300 million were not
recorded; the carrying value of repaired infrastructure assets
were not derecognized; and depreciation of some properties were
not provided; and,
 Due to NGAs account amounting to P31.700 million is unreliable

as it includes the amount of P12 million which had been carried
in the books for nearly ten years even if it was already utilized.
La Paz Qualified  Road Networks account amounting P4.822 million as of

management to prepare and maintain a Report on Local Road
(LRNPC).
294
Leyte Qualified  Property, Plant and Equipment was not correctly reported due to
non-provision of depreciation for Infrastructure Assets totaling
P31 million and misclassification of road projects costing P3.900
million as Land Improvements or Roads, Highways and Bridges
instead of Road Network; and,
 Fuel expenses totaling P1.900 million is unreliable due to

recording of requisitions as outright expense upon purchase even
without proof of proper and authorized utilization.
MacArthur Qualified  Despite the significant increase in the total amount of P60.328
million, the accuracy of the Property, Plant and Equipment (PPE)
accounts, with a total carrying amount of P121.212 million, as of
December 31, 2018, cannot be confirmed, as the Municipality still
failed to implement previous years’ recommendation of
conducting and preparing the Report on the Physical Count of
Property, Plant & Equipment (RPCPPE) for CY 2018;
 Due to NGAs account in Trust Fund is understated by P6.795

million as such amount was debited without supporting
documents, while various liquidations of fund transfers for
completed infrastructure projects/delivery of goods were not
recorded to its corresponding asset account totaling P9.177
million, thereby understating the said assets by the same amount;
 Current and prior years’ unexpended/unobligated balances of the

Quick Response Fund (QRF) and the DRRMF-MOOE for CY
2018 totaling P6.258 million was not transferred to Trust Fund,
thus, overstating the Government Equity and understating the
Trust Liabilities-Disaster Risk Reduction and Management Fund
accounts by the same amount.
Mahaplag Qualified  Property, Plant and Equipment (PPE) with a book value of P183
million as of December 31, 2018 could not be ascertained since
only 14% of the recorded PPE was included in the Report of
resulting from incomplete physical inventory while Infrastructure
Assets totaling P71 million were not depreciated.
Maripipi Qualified  Property, Plant and Equipment (PPE) with a balance of P33
million as of December 31, 2018 could not be ascertained caused
by the following: properties without any records on file were
valued at P1.00 or were not assigned any value at all instead of
determining its fair market value, depreciation was not provided
for CY 2018, various equipment were difficult to identify as these
were not labelled with Property Tags, Property Acknowledgement
Receipts (PAR) on issued equipment were not renewed every
three years and Property Cards were not maintained and the
conduct of the annual physical count of its properties, prepare the
related Report on the Physical Count of PPEs and reconcile the
same with accounting and property records remained
unimplemented audit recommendations for the past years.
Matag-ob Qualified  Property, Plant and Equipment account was not correctly
reported due to understated accumulated depreciation on
Infrastructure Assets by P3.400 million, incomplete list of projects
that supports the balance of the Road Network account,
295
erroneous recording of road projects costing P1.500 million as
Land and erroneous recording of major repair of municipal
facilities amounting to P.440 million as expenses.
Matalom Qualified  Inventory Account amounting to P.811 million, or 2% of the total

assets of the Municipality as of December 31, 2018, is doubtful
because the purchased construction materials and supplies
worth P2.578 million were not recorded as Construction Materials
Inventory but as Construction in Progress; and, drugs and
medicines worth P1.999 million were not recorded as Inventories
upon purchase but as outright expenses without proper
accountability of its issuances while year-end balance was not
supported with an inventory report.
Mayorga Qualified  Road Networks account amounting P52.653 million as of

management to prepare and maintain a Report on Local Road
(LRNPC);
 Release of retention money to contractor(s) amounting to P1.957

million was erroneously debited to Guaranty/Security Deposits
Payable account even without an existing liability thereby,
understating the said Trust Liability account and understating the
corresponding Asset account by the same amount; and,
 Unutilized balance of the Disaster Risk Reduction Management

Fund (DRRMF)-Quick Response Fund (QRF) and MOOE were
not transferred to the Special Trust.
Merida Qualified  Property, Plant and Equipment included completed projects

totaling P35.600 million erroneously classified as Construction In-
Progress;
 Inter-agency Payables was overstated by P4.700 million due to

erroneous recording of insurance proceeds from GSIS as
payables instead of income;
 Inventories amounting to P2.800 million was not supported with a

Physical Inventory Report and other records to adequately
support the existence of the assets; and,
 Trust Liabilities-DRRMF was understated by P13.100 million due

to erroneous recording of prior years unexpended LDRRMF as
Due From Other Fund.
Naval Qualified  Public infrastructure projects implemented prior to CY 2015

totaling P3.300 million or 75% of the total cost in the Registry of
Public Infrastructures, were not recorded in CY 2018 to the
Equipment.
296
Palo Qualified  Completed infrastructure projects in CY 2018 from various fund
of the LGU totaling P48.955 million were not recognized in the
books as Property, Plant and Equipment (PPE);
 Recorded check disbursements totaling P1.086 million in CY

2018, were without the covering disbursement vouchers, thus the
accuracy of the recorded amount could not be ascertained; and,
 Cashbook maintained by the Municipal Treasurer does not

reconcile with the Cash-Local Treasury account in the general
ledger, and the conduct of physical inventory and the submission
of Report on the Physical Count of PPE was only partially
implemented, thus the accuracy of the PPE account could not be
ascertained and its existence could not be established.
Palompon Qualified  Assets were not accurately and properly presented due to non-
recording in the Infrastructure Assets account of P74.800 million
or 75% of the cost of public infrastructure projects implemented
prior to CY 2015 previously reflected in the Registry of Public
Infrastructures, erroneous recording of road projects from CY
2015 up to the current year totaling P63 million as Other
Infrastructures instead of Road Network and inclusion in the
Inventories account supplies totaling P3.300 million which were
already issued and distributed as of December 31, 2018.
Pastrana Qualified  Property, Plant and Equipment account as of year-end is

unreconciled against the Report on the Physical Count of PPE.
San Isidro Qualified  Public Infrastructures of P12.352 million were not transferred to
the Infrastructure Asset account;
 Road Network account at P52 million was not supported with the
Report on Physical Count of Local Road Network;
 Procurement of projects costing P.994 million were not recorded

which understand the Property, Plant and Equipment, Cash in
Bank and other related accounts; and,
 Accounts Payable amounting to P.159 million have no valid

claimants.
San Miguel Qualified  Cash in Bank, Local Currency account could not be ascertained
due to a difference of P3.088 million with that of the bank balance
which remained unadjusted at year end due to non-preparation of
bank reconciliation statements; and,

ascertained due to the failure to conduct physical count of road
network system, maintain complete records for roads and road
network components and prepare a lapsing schedule for
depreciation.
297
Santa Fe Qualified  Road Networks account totaling P 46.826 million as at year-end
could not be ascertained due to the failure to conduct physical
count of road network system, maintain complete records for
roads and road network components and prepare a lapsing
schedule for depreciation.
Tabango Qualified  Infrastructure Asset account totaling P62 million does not reflect
all public infrastructures implemented by the LGU due to the
absence of its Registry and Report on Physical Count;
 Road Network account totaling P44 million was not supported

with the Local Road Network Inventory Report;
 Cash in Bank-LCCA account totaling P24 million in the Trust Fund

Books were not reconciled with the Bank Statements; and,
 Agricultural equipment and materials totaling P2 million out of

transferred funds were not recorded as assets but as direct
reduction to a liability account.
Tabontabon Qualified  Stale checks and undetermined book adjustments of previous

year’s amounting to P649.98 and P.059 million, respectively,
have remained as reconciling items in Trust Fund books and were
not adjusted and corrected; and,
 Retention moneys against completed infrastructure projects

totalling P.565 million were erroneously recorded as Bail Bonds
Payable instead of its proper account – Guarantee/Security
Deposits Payable.
Tanauan Qualified  Income earned from market operation but not received at year-
end were not recorded in the books, while advance payment
made by stallholders were inadvertently recorded as Receipts
from Market Operations, thereby causing an understatement in
the accounts, namely: Receipt from Market Operations; Permit
Fees; Customers Deposits; and Other Receivables by a net
amount of P.163 million; P.143 million; P1.308 million and P1.614
 Three (3) completed infrastructure projects in CY 2018 funded

from Yolanda Rehabilitation and Reconstruction Program
(YRRP) totaling P4.659 million were not recognized as Property,
Plant and Equipment of the LGU thus, understating the account
by the same amount; and,
 The disclosure requirements on Investment, Inventory and

Financial Liabilities were not fully observed, thus information
contained in the Notes to Combined Financial Statements do not
adequately assist users in understanding the affected accounts.
Tolosa Qualified  Property, Plant and Equipment (PPE) accounts totaling P149.471
million could not be ascertained due to the following: (a) material
disparity between the Report on Physical Count of PPE
(RPCPPE) and reported balance per books totaling P31.576
million; (b) unrecorded donated properties of undetermined
amounts; (c) inclusion of properties with no future economic
benefits or service potential expected from its use or disposal
totaling P3.010 million; and, (d) absence of a detailed PPE
lapsing schedule; and,
298
management’s failure to (a) account for the difference of P3.447
millionbetween the balance per books and the Inventory Report
on Road Network System; (b) prepare lapsing schedule for the
computation of depreciation and disclose the road network
system in the Notes to Financial Statements; and, (c) maintain a
Local Road Inventory and Road Map, keep a complete Local
Road Network Property Card, as well as prepare a Report on
Local Road Network.
Tunga Qualified  Road Networks account amounting P5.605 million as of

management to: (a) comply with the transitory provision for the
transfer of 75% of the local roads to the Road Networks account
by end of 2018; (b) recognize depreciation expense; and, (c)
render, prepare and maintain a Report on Local Road Network
(RLRN), Report on the Physical Count of Local Road Network
(RPCLRN), Local Road Network Property Card (LRNPC), and
Local Road Inventory and Road Map; and,
 Cash in Bank-Local Currency, Current Account could not be

ascertained and established because the Municipal Accountant
failed to prepare and submit monthly bank reconciliation
statements.
Villaba Qualified  Public Infrastructures of P60 million were not transferred from the
Registry to the Infrastructure Asset account;
 Difference of P31 million between the Cash in Bank-LCCA

account balance and per bank statements in the Trust Fund
books;
 Road Network account at P7.200 million was not supported with

the Report on Physical Count of Local Road Network; and,
 Outright recording as Other Maintenance & Operating Expenses

of funds transferred to farmer’s associations totaling P1 million
instead of recognizing a collectible from the recipients.
Northern Samar Qualified  Cash in Bank-Local Currency Current Account balance of P1.950
billion could not be ascertained due to the difference of P.788
million between the balance per Statement of Financial Position
and adjusted balance per bank statement and long outstanding
reconciling items totaling P2.531 million;
 Bank Reconciliation Statements and subsidiary ledgers were not

prepared for sixteen savings account maintained with DBP and
PVB, with balance totaling P60 million and P67.5 million
respectively;
 Unreconciled variance of P42.2 million of the reciprocal accounts

“Due from Other Funds and Due to Other Funds account in the
Combined Financial Statement of Financial Position;
299
 Construction in Progress accounts and Accounts payables
totaling P1.284 billion and P566.968 million respectively are
doubtful due to premature recognition of costs of construction and
development without the corresponding Statement of Work
Accomplished;
 Loans Payable-Domestic account with a balance of P701,156

million could not be verified due to absence of subsidiary ledgers,
non-classification of the current and non-current portion of the
obligation, and insufficient disclosure of the loan details in the
Notes to Financial Statements; and,
 Double recording of the transfer of unexpended/unobligated

balance of the Quick Response Fund and the Disaster Risk
Reduction and Management (DRRM) Fund-Maintenance and
Other Operating Expenses resulted in the overstatement of
Transfers of Unspent Current Year DRRM funds to the Trust Fund
and Due to Other Funds account by P22.150 million.
Municipalities
Allen Qualified
Biri Qualified  Property, Plant and Equipment (RPCPPE) on depreciable assets

prepared by the Property Officer, with a total value of P2.232
million was incomplete and did not reconcile with the accounting
records due to failure of the Inventory Committee to conduct
physical count of Property Plant and Equipment (PPE), thus, the
said assets under PPE account with a total value of P89.425
million as of December 31, 2018 which is 61.24% of total assets
is unreliable;
 Cash in Treasury account balance of P.145 million is doubtful due

to the continued failure of management to identify the person
accountable on the undeposited amount of P.141 million
collected in the previous years and failure to maintain subsidiary
record thereof;
 Thirty six (36) Disbursement Vouchers and its supporting

documents amounting to P.706 million were not submitted for
audit, thus, creating doubt on the propriety and regularity of the
disbursements; and,
 138 reported cancelled checks were not submitted for verification,

thereby affecting the reliability of the reports made by the LGU.
Bobon Qualified  Accounts Receivable outstanding account balances of P11.934

million was inaccurate due to unsubstantiated and undocumented
Accounts Receivable and Inter and Intra-Agency fund transfer in
the total amount of P.237 million; unliquidated Advances and
dormant Other Receivable accounts which are outstanding and
uncollected from more than one year to over five years in the total
amount of P2.887 million;
300
 Property, Plant and Equipment (PPE) account totaling P217.276
million or 66%% of the total assets was not fully established and
remained doubtful due to the continuous failure of the municipality
to constitute an Inventory Committee that will conduct physical
inventory, maintain complete property records and provide the
depreciation for some depreciable PPE and recognize
impairment losses on recorded assets due to deterioration; and,
 Unreliable CIP account amounting to P55.806 million due to lack

of subsidiary records, improper maintenance of Construction in
Progress Ledger Card (CIPLC) and uncoordinated monitoring
and reporting of completed projects.
Capul Qualified  Property, Plant and Equipment totaling P100.047 million has no
report on its physical inventory and no maintained property cards;
 Accounts payable in the sum of P.675 million was not supported

with complete documentation;
 Advances for Payroll and Advances for Officers and Employees

amounting to P.041 million and P.072 million, respectively, were
not liquidated at the end of the year; and,
 Payment of interest in the sum of P2.603 million was not recorded

in the books of accounts resulted the interest expense and the
loan payable account to be understated.
Catarman Qualified  Failure to record the thirty-eight (38) lots with a total fair market
value of P362.809 million all with Tax Declaration in the name of
LGU-Catarman which understated the reported balance of the
Property, Plant and Equipment as at year-end.
Catubig Qualified  Cash in Bank – Local Currency, Current Account in the amount
ascertained due to the continued failure of the accountant to
prepare and submit the monthly and year end Bank
Reconciliation Statements for each bank account;

P97.198 million as of December 31, 2018 (excluding Construction
in Progress) could not be relied upon due to inability of the
management to create an Inventory Committee to conduct an
annual physical count of all properties of the Municipality for CY
2018; and,
 “Due to NGAs” included PPAs in the total amount of P8.986

million which should have been reclassified to other accounts
including the amount of P3.750 million which has no details, thus,
the carrying amount of P82.143 million, shown in the financial
statement as of December 31, 2018 is doubtful.
Gamay Qualified  Property, Plant and Equipment (PPE) and Investment Property
accounts valued at P252.294 million and P24.522 million,
respectively, or a total amount of P276.817 million as of
301
December 31, 2018, which is 79.80% of the total assets is
unreliable due to non-presentation of the PPE accounts as to its
classification/type in the Report of PPE, the total value of
P28.461million, per RPCPPE did not reconcile with the
accounting records of P252.294, million, the 120 listed PPEs has
no value assigned in the report, and the physical count of
Infrastructure Assets with a total cost of P156.115 million was not
conducted.
Laoang Qualified  Cash-In-Bank account totaling P256.752 million as of December

31, 2018 cannot be relied upon due to non-submission of Bank
Reconciliation Statements from July to December, 2018 and non-
recording of reconciling items in the amount of P.304 million;
 Due to the Failure of the Municipal Treasurer to provide the

Municipal Accountant a copy of a duly certified list showing the
names of the taxpayers and the amount due and collectible, the
Real Property Tax (RPT) and Special Education Tax (SET)
Receivables and the corresponding Deferred RPT and SET
Income was not set up at the beginning of the year, thus, the
balances of RPT and SET Receivables, and Deferred RPT and
SET accounts of P.410 million and P1.058 million, respectively,
at year-end are understated;
 Procured inventories and equipment of P1.354 million and P.092

million respectively, or a total of P1.446 million were recorded as
an outright expense instead of the appropriate inventory and
equipment account that understated the inventory and equipment
account and overstated the affected expense account by the
 Completed Water Supply System project amounting to P9.778

million under Salintubig DOH Project in CY 2012 was not
transferred to the General Fund Books upon completion of the
project that understated the PPE and Government Equity account
by the same amount in the General Fund Books.
Lapinig Qualified  Cash-In-Treasury and Cash-In-Bank accounts totaling P48.707

million is questionable due to delayed and irregular deposit of
collections, existence of adjustments without sufficient basis and
invalid reconciling items, also, reconciliation of net cash flows
from operation to surplus was not appropriately disclosed in the
Notes to Financial Statements;
 Advances account balance of P.170 million is questionable due

to recording of liquidation and adjustment in the amount of P3.331
million without basis and discrepancies in the amounts appearing
in the ledger and other reports/schedules in the amount of P.274
million;
 Purchase of medicines amounting to P.770 million were directly

recorded as expense, while, medicines acquired thru donation in
the amount of P.028 million were not recorded thereby
understating the inventory account by P.032 million, and the
related expense account by P.766 million;
302
 PPE account with a net book value of P73.741 million is
unreliable;
 Work/Zoo Animals and Biological Assets totaling P1.317 million

were not determined due to non-conduct of physical count of
living animals and non-recording of plants and trees; and,
 Inter-Agency Payable and Trust Liabilities accounts totaling

P16.612 million is unreliable due to deficiencies and errors in
recording the liquidation/utilization of fund transfers received from
other agencies and discrepancies in the balances from the books
of the LGU and the source agency.
Las Navas Qualified  Cash-in-Treasury account balance of P1.175 million is

questionable due to unaccounted Accountable Forms and
identified unrecorded collection amounting to P.092 million;
 Cash in Bank-Local Currency, Current Account balance of

P108.352 million is unreliable due to failure to prepared the bank
reconciliation statements and lack of adequate disclosure in the
Notes to Financial statements;
 Purchases of medicines amounting to P.671 million were directly

recorded as expense, while, medicines acquired thru donation in
the amount of P.722 million were not recorded, thus, the inventory
account is understated by P.080 million and the related expense
account is understated by P.642 million;
 Validity and correctness of the advances accounts balance

totaling P48.995 million is doubtful due to absence of complete
disclosures in the Notes to Financial Statement and schedules
detailing the details of the advances and age of the cash advance;
 Receivables-Disallowances/Charges is understated by P.407

million due to recording of the settlement without the Notices of
Settlement of Suspension/Disallowance/Charge from the Audit
Team and other errors in recording;
 Correctness of the valuation of the Hospital building and Water

Supply system valued at P.603 million and P6.993 million,
respectively, was not ascertained due to absence of complete
records and documents;
 Valuation and ownership of Property, Plant and Equipment

amounting to P160.922 million, comprising 47.53% of the
municipality’s total assets was not ascertained due to failure of
the Inventory Committee to complete the conduct of physical
count and provide the amounts in the Report;
 Construction-in-progress in the amount of P55.966 million, while,

the status report rendered by the Municipal Engineer reflected an
amount of P23.069 million or a difference of P32.897 million; and
303
 Validity and correctness of the claims against the LGU amounting
to P21.820 million could not be established due to absence of list
of claimants and aging schedule supported with valid
claims/contracts.
Lavezares Qualified  Receivable account balances of P31.340 million was unreliable

due to uncollected past-due Accounts Receivable totaling P.365
million, which remained outstanding for more than seven (7) to
nine (9) years; unliquidated Inter and Intra-Agency fund transfer
which are outstanding ranging from over six (6) years to more
than eight (8) years totaling P10.974 million; unsubstantiated
Advances accounts ages three (3) to seven (7) years totaling
 Property, Plant and Equipment account totaling P175.138 million

or 66.23% of the total assets was not fully established and
remained doubtful due to continuous inaction of the LGU to
constitute an Inventory Committee that will conduct physical
inventory; non-maintenance of property records; failure to provide
the depreciation for some depreciable PPE and recognize
impairment losses on assets due to deterioration.
Lope de Vega Qualified  Collection from previous year (CY 2017) totaling P.042 million
was remitted/deposited and reported as income in CY 2018 which
overstated the income by the same amount;
 Inventory account totaling P1.130 million was not supported with

actual physical existence of inventories due to non-submission of
the Report of Physical Count of Inventory and non-maintenance
of supplies ledger cards and stock cards to reconcile the property
records of the Accounting and Supply Office while inventory
recognized as expense at the end of the year totaling P2.128
million were not supported with Requisition Issue Slip (RIS) and
Summary of Supplies and Materials Issued (SSMI), thus
reliability of the reported balance at year-end cannot be
ascertained;
 Reconciliation of the physical inventory report of Property, Plant

and Equipment (PPE) against the general ledger control accounts
to verify the agreement of PPE balances was not undertaken
because of the absence of
property card/PPE ledger cards and inventory report required,
thus, correctness of the reported balance at year-end totaling
P104.422 million is doubtful;
 10% retention money from progress payments to contractors

amounting to P2.090 million was erroneously recorded as
Accounts Payable instead of the prescribed account
Guaranty/Security Deposits Payable, resulting to
misrepresentations of the affected accounts in the financial
statements;
 CY 2018 unexpended/unobligated LDRRMF balance of P2.598

million was not transferred to Special Trust Fund while the CY
2012 unexpended balance of P.300 million was not reverted to
the General Fund that resulted in the net understatement of the
Trust Liabilities - Disaster Risk Reduction and Management Fund
304
(DRRMF) account by P2.298 million, thus, affecting the fair
presentation of the financial statements;
 Validity of Receivable and Payable Accounts amounting to

P2.241 million and P1.035 million, respectively, are doubtful due
to the absence of subsidiary ledger, creditors, valid claimants,
and documentary references to support the amount; and,
 The failure of the recipient barangays to submit liquidation report

on the financial assistance of P.333 million which may affect the
accuracy of the related expenses thereon.
Mapanas Unqualified
Mondragon Qualified  Share from real property tax for Special Education Fund
amounting to P.014 million for the month of February, 2018 was
recorded in the Special Education Fund books, thereby
overstating the Special Education Tax (SET) Receivable and
Deferred Special Education Fund Tax accounts by P.014 million;
 Various Supplies and Materials issued amounting to P2.801

million were still included in the total Inventory of P5.655 million
as of December 31, 2018 due to non-preparation and non-
submission of Summary of Supplies and Materials (SSMI) and
Report on the Physical Count of Inventories (RPCI), hence, the
inventory and government equity account were overstated by the
 Expenditure totaling P2.708 million were erroneously credited to

Accounts Payable account that overstated the said account and
the Cash in Bank account by the same account.
Palapag Qualified  Property, Plant and Equipment (PPE) with a net book value of
ascertained due to inability of the Inventory Committee to conduct
an annual physical count of all properties of the Municipality for
CY 2018;
 Unutilized amounts of the account Trust Liability-Local Disaster

Risk Reduction and Management Fund (LDRRMF) aging 5 years
and beyond (CYs 2011 to 2013), totaling P.939 million, were not
reverted back to the General Fund as required, thus, the maturing
and unspent funds were not made available for utilization for other
social services in the LGU while Trust Liability Account is
overstated and Equity Account is understated by P.939 million;
 Balances for local collections between the Cash Books and

Accounting records differ by P.677 million, thus, the accuracy of
Cash-Local Treasury is unreliable; and,
 Due to the difference of P.003 million between the carrying

amount of Land account and subsidiary ledger balance, and the
failure to take up in the books, five lots acquired by the LGU, the
Land account balance of P13.760 million is understated.
305
Pambujan Qualified  Due from Other Funds and Due to Other Funds in the Combined
Statement of Financial Position as of December 31, 2018 has a
 Remaining Useful Value (RUV) of the second-hand/reconditioned

firefighting equipment acquired for a total cost of P1.998 million
was not determined due to the absence of the acquisition cost
and number of years of actual service from its original purchase
and specification indicated in the Purchase Request differs from
the approved Purchased Order, hence, the price of the equipment
procured which is the most advantageous to the government was
not assured;
 Disbursements totaling P3.766 million were erroneously debited

to Other Maintenance and Operating Expenses (OMOE) account,
that overstated the OMOE and understated the affected real and
nominal accounts; and,
 Payment of P1.110 million to 24 casual employees hired by the

LGU in CY 2018 were improperly charged to Other General
Services and Other Maintenance and Operating Expenses
(OMOE) instead of the lump-sum funds for the purpose under
agency appropriations/budgets for Personal Services (PS), that
understated the PS and overstated the Other General Services
and OMOE by P1.110 million.
Rosario Qualified  Failure to submit the Journal Entry Vouchers (JEVs), the
General Ledgers, and the Subsidiary Ledgers of LGU-Rosario
for the period from January to December 31, 2018.
San Antonio Qualified  Unimplemented recommendations in calendar year 2017 Annual

Audit Report particularly on the absence of a bank reconciliation
which consequently affected the propriety of the balance of Cash
in Bank, Local Currency-Current Account of P45.898 million and
doubtful existence of the Property, Plant and Equipment
amounting to P51.063 million due to the absence of physical
inventory during the year.
San Isidro Qualified  Unreliable receivable account balances for all funds due to
unsubstantiated and undocumented Inter-Agency fund transfers,
Loan Receivable and Other Receivable accounts in the total
amount of P.424 million which are outstanding and dormant
ranging from more than thirteen (13) years to seventeen (17)
years;
 Of the P.237 million total unliquidated balance of accounts

Advances to Officers and Employees and Advances to Special
Disbursing Officer as of December 31, 2018, P.155 million or
65.30% remained unliquidated for more than five (5) years, that
could result to unreported expenses, unaccounted cash and
probable misappropriation of funds;
 Purchase of various inventory items amounting to P.455 million

were directly recorded as Office Supplies Expense instead of
recording to their appropriate inventory account, thus, resulted in
the understatement of inventory account and overstated the
related expense account; and,
306
 Unreliable balance of Property, Plant and Equipment (PPE)
account of P199.653 million due to inability to conduct inventory
and submit Report on Physical Count of Property, Plant and
Equipment (RCPPE).
San Jose Qualified  Property, Plant and Equipment with a net book value of P86.191
million as of December 31, 2018 is doubtful due to unreconciled
balance between the records of the Municipal Accountant of
P117.100 million and the costs in the Report of Physical Count of
PPE of P94.800 million submitted by the GSO/Municipal
Treasurer showing a difference of P22.300 million, thereby
rendering the reported balance at year end unreliable;
 Implementation of infrastructure projects funded thru financial

assistance received from various national government agencies
recorded as Construction in Progress account under Trust Fund
totaling to P15.690 million were debited to “Trust Liabilities” or
“Due to NGAs” account and these ongoing infrastructure projects
were transferred to the General Fund at the year end, thereby
understating the affected accounts under Trust Fund and
overstating the affected balances in the General Fund; and,
 Accounts Payable and Due to Officers and Employees accounts

amounting to P.357 million and P.813 million, respectively were
not supported with valid claims and contracts, thus the validity of
the account balances as of year-end could not be established.
San Roque Qualified  Failure of the Municipal Treasurer to provide the Municipal
Accountant a copy of a duly certified list showing the names of
the taxpayers and the amount due and collectible, the Real
Property Tax (RPT) and Special Education Tax (SET)
Receivables and the corresponding Deferred RPT and SET
Income was not set up at the beginning of the year, thus, the
balances of RPT and SET Receivables, and Deferred RPT and
SET accounts of P1.287 million and P.816 million, respectively,
at year-end are understated;
 Purchased supplies and materials of P3.007 million were

recorded as an outright expense instead of the appropriate
inventory account that understated the Inventory account and
overstated the affected expense account by the amount of P3.007
million;
 Livestock Ledger Cards were not maintained by the Accounting

Office nor were Property Cards kept by the General Services
Office on the LGU’s Biological Assets of P1.733 million, and
dispositions such as transfer or death were not reported, thus,
indicating lose control over these assets that resulted to
undetected losses and misstatement of the related account in the
 Disbursements totaling P.778 million were erroneously recorded

in the books as OMOE while P.015 million was misclassified as
Office Supplies Inventory, that overstated the OMOE account and
understated the affected real and nominal accounts.
307
San Vicente Qualified  Inventory account aggregating P.891 million was not
substantiated due to non-inventory taking while issuance thereof
to end user were not supported with Requisition Issue Slip (RIS)
and Summary of Supplies and Materials Issued (SSMI), thus
recognition of expense could not be effected while purchase of
inventory items during the year in the amount of P1.082 million
were outrightly expended;
 Abnormal balance of Due to BIR account of P1.969 million and

Other Payable account of P.256 million;
 Non-provision of the depreciation to the depreciable assets

totaling P17.953 million;
 CY 2017 expenses totaling P.442 million were recorded as

expense in CY 2018, thus overstating the current year expenses
by the same amount;
 Unimplemented prior year’s recommendation on the

unaccounted discrepancies in the amount of P.708 million
affecting the Cash in Bank – LCCA amounting to P54.133
million;
 Failure to substantiate the physical existence of PPE account of

P30.483 million due to the absence of property records and non-
conduct of physical inventory; and,
 Unliquidated cash advances amounting to P9.836 million.
Silvino Lubos Qualified  Cash In Bank – Local Currency Account is understated by P.050
million, due to non-cancellation of checks that are outstanding for
over six months from its issuance;
 Inventories account totalling P4.978 million is doubtful due to

failure to conduct physical count of inventories and render a
report thereon and purchase of inventory items were directly
recorded as expense and inventory held for distribution and
medical equipment acquired thru donation were not recorded and
its valuation cannot be ascertained due to absence of record;
 Physical count of Property, Plant and Equipment (PPE) in the

amount of P140.008 million was not completed and provisions for
depreciation of some PPE account amounting to P14.820 million
were not made;
 Disaster response and rescue equipment acquired thru donation

were not recorded in the books and its fair value cannot be
determined due to absence of record or information;
 Construction-In-Progress totalling P54.157 million was doubtful

due to the discrepancy of the amount reported in the List of
Infrastructure Projects rendered by the Municipal Engineer; and,
 Absence of schedule to support the validity and existence of the

liabilities account totaling P48.645 million.
308
Victoria Qualified  Receivable account balances of P70.313 million was unreliable
due to uncollected past-due Loans Receivable-Others account
amounting to P.010 million which continued to be outstanding and
dormant for over fifteen (15) years; unliquidated Inter and Intra-
Agency fund transfer and the dormant Other Receivable accounts
totaling to P70.303 million which have been outstanding for more
than eight (8) years to over fifteen (15) years; and,
 Property, Plant and Equipment (PPE) account totaling P180.055

million or 57.20% of the total assets was not fully established and
remained doubtful due to the continuous failure of the municipality
to constitute an Inventory Committee that will conduct physical
inventory; non-maintenance of property records; failure to provide
depreciation on depreciable PPE and recognize impairment
losses on assets due to deterioration.
Samar Qualified  Funds totaling P6.622 million granted as financial assistance to

various barangays for the implementation of projects were
recorded as “Donations” instead of “Due from Local Government
Units”;
 Due from Other Funds and Due to Other Funds; Real Property
Tax Receivable and Deferred Real Property Tax; and Special
Education Tax Receivable and Deferred Special Education Tax
have reported material differences of P2.586 million, P3.504
 Unadjusted reconciling items accumulating to P5.227 million of

the Cash in Bank-Local Currency Account.
Cities
Calbayog City Qualified  Reconciling items amounting to P41.871 million from various
bank accounts of the General Fund, Trust Fund and Special
Education Fund were unadjusted in the books of accounts;
 Various past due cash advances totaling P116.012 million have

remained outstanding in the books for more than 2 years thus
affecting the surplus account;

P1.836 billion is not reliable due to the discrepancy of the records
of the Accounting Office and General Services Office.
 Current liabilities-loans payable domestic is misstated due to the

inclusion of the long term portion of the liability amounting to
P149.496 million and the overstatement of the loans payable
principal balance by P30.106 million and the borrowing costs
incurred by the City amounting to P16.787 million and P10.300
million respectively, or a total of P27.088 million was treated as
an outright expenses affecting the costs of the qualifying assets;
 Non-recognition of the accrual approach in the income

recognition and erroneous income classifications in the Economic
Enterprise and Development Management (EEDM) operations
resulted in the misstatement of the Income account of P13.307
million and other financial statement related accounts for
Calendar Year 2018;
309
 Business Tax for Calendar Year 2018 totaling P60.563 million is

misstated due to erroneous classification of accounts;
 Other Maintenance and Operating Expenses (OMOOE) in the

total amount of P151.132 million includes expenditures that has
specific expense accounts, thus, affecting the propriety of the
accounting record and the fair presentation of the financial
statements;
 Other Deferred Credits totaling P14.250 million was used for all
amounts withheld as retention fee from various contractors on the
performance of the terms of the contract resulting to the
overstatement of this account and the corresponding
understatement of the Guaranty/Security Deposits Payable by
the said amount;
 Failure to adjust the unremitted taxes from SEF payments totaling

P.011 million which were taken up as payments in the books
resulted to the understatement of the liability and cash account;
 Check disbursements totaling P8.421 million could not be

ascertained due to the non-submission of 20 Disbursement
Vouchers, together with their supporting documents.
Catbalogan City Qualified  Cash in Bank-LCCA account amounting P511.701 million could
not be ascertained due to: (a) non-adjustment/cancellation of
stale checks totaling P.147 million; (b) unrecorded bank account
amounting P.001 million; (c) existence of dormant bank accounts
in the sum of P.403 million; and, (d) non-submission of the
General Ledger and Subsidiary Ledgers;
 Advances for Payroll, Advances to Special Disbursing Officer;

and the related expense accounts are misstated due to error in
recording cash advances for special purpose/time-bound
undertakings as Advances for Payroll; the balance of Advances
to Special Disbursing Officers account is overstated due to
unrecorded liquidation of cash advances for Confidential and
Intelligence Fund amounting to P30.904 million; and,
 Other Structures, Road Networks, Flood Control System and

Other Infrastructure Assets accounts are misstated due to
erroneous recording of infrastructure assets during construction
period and after their completion; and the accuracy of the
balances of Construction and Heavy Equipment and Road
Networks accounts could not be ascertained due to the failure of
management to present their updated balances.
Municipalities
Almagro Management  Due to non-submission of Financial Statements.

Letter
310
Basey Qualified  Due from Other Funds account amounting to P176.049 million in
the General Fund could not be ascertained because subsidiary
ledgers were not maintained for the account and the non-
submission of the financial statements for Infrastructures for
Rural Productivity Enhancement Sector (InFRES) I and II, and
DAR-ADB Second Agrarian Reform Communities Project II
(ARCP II) funds;
 Property, Plant and Equipment account valued at P221.880

million is overstated by P.437 million because of erroneous
recording of expenses to the PPE accounts; and,
 Inventory Held for Distribution is understated due to improper

recording of inventories to Donations account.
Calbiga Qualified  Cash in Bank Local Currency, Current Account balance of

P48.418 million is unreliable due to the discrepancy of P.489
million between the reported book balance and the adjusted bank
balance;
 Uncollected rentals on awarded market stalls accumulating to

P.304 million was not reflected in the books of accounts of the
municipality; and,
 Inventories procured amounting to P2.053 million were

recognized as expenses at year-end although not supported with
necessary documents to prove its issuance.
Gandara Qualified  Cash in Bank - Local Currency, Current Account balance

amounting to P18.088 million could not be ascertained due to a
net variance of P.413 million between the book and bank balance
and the non-preparation of Bank Reconciliation Statements for
the seven out of eleven bank depository accounts;
 Stale Checks totaling P.274 million which had been outstanding

for over six months or more were not cancelled, adjusted and
corrected in the books resulting in the understatement of the
account balances of the Cash in Bank - Local Currency, Current
Account and Accounts Payable;
 Funds transferred to People’s Organization totaling P.100 million

as assistance for various projects were recorded as Donations
instead of as receivables - Due from Non-Government
Organizations/People's Organizations;
 Property, Plant and Equipment (PPE) account with a total

acquisition cost of P312.838 million could not be ascertained due
to the (a) failure of the Municipality to create a Committee to
conduct the required annual physical count of all its properties
which resulted to the non-submission of the Report on the
Physical Count of Property, Plant and Equipment; (b) non-
maintenance by the General Services Office and Accounting
Office of property cards and perpetual inventory records,
respectively, for each class of PPE; and, (c) non-reconciliation of
the property and accounting records against the general ledger
balances;
311
 Operations of the Gandara Water System is still not maintained

as a special account in the General Fund (GF) and its income,
expenses and other financial transactions were recorded under
the Due to LGUs account in the books of the General Fund
resulting to the overstatement of the payable account as well as
the understatement of the income, expense and other affected
accounts; and,
 Due to National Government Agencies is overstated due to

unspent balance totaling P.946 million which was not yet returned
to the concerned Source Agencies or transferred to the General
Fund, and an abnormal balance totaling P.198 million.
Hinabangan Qualified  Cash in Bank – Local Currency Current Account amounting to

submission of the bank statements for all bank accounts for the
period September to December 2018, non-
adjustment/cancellation of the stale checks, and the discrepancy
of P5.249 million between the general ledger and balances per
Bank Reconciliation Statements;
 Property, Plant and Equipment account valued at P99.239 million

is misstated because 75% of the Public Infrastructures totaling
P12.125 million were not recognized in the books and no
depreciation was provided for CY 2015 to CY 2018 on PPEs with
carrying amount of P17.241 million;
 Advances for Payroll amounting to P12.200 million were

erroneously recorded as Advances to Special Disbursing Officer;
and,
 Advances to Special Disbursing Officers amounting to P.923

million were erroneously debited to the Accounts Payable
account.
Jiabong Qualified  Cash in Bank – Local Currency, Current Account totaling P16.322
million could not be ascertained due to non-maintenance of
subsidiary ledger for each bank account and non-preparation of
Bank Reconciliation Statements on the two bank accounts with
an aggregated balance of P.478 million per bank statements;
 Waterworks System Fees Account in the Statement of Financial

Performance totaling P.073 million could not be ascertained due
to absence of the prescribed rates for its collection in the
Municipal Revenue Code of the LGU;
 Payments for Office Supplies and Other Supplies Expenses from

the Special Education Fund amounting to P.070 million were
inadvertently posted to Due to Local Government Units, thereby
understating both the expense and liabilities accounts;
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 Recognition in the books of at least 75% of the Local Road
Network at the end of CY 2018 was not met due to the failure of
concerned personnel to keep, maintain and prepare the
records/reports thereby, understating the Property, Plant and
Equipment account; and,
 Fifty-seven (57) disbursement vouchers and its supporting

documents amounting to P13.803 million and twenty-seven (27)
checks reported as cancelled, both under the General Fund, were
not submitted for audit; and,
 Forty-five disbursement vouchers and its supporting documents

amounting to P5.628 million pertaining to CY 2017 transactions
were still not submitted as at CY 2018 year-end.
Marabut Qualified  Presence of entries in the General Journals (GJ) totaling P8.236
million without supporting documents, entries in the General
Ledgers (GL) accumulating to P12.515 million not found in the
GJ and unsubmitted Journal Entry Vouchers and supporting
documents affected the reliability of the accounts, while entries in
the GJ of the Trust Fund books totaling P.402 million not
transferred/posted to the GL of the General Fund understated the
accounts;
 Recorded cost at P115.841 million for the Municipal Building

donated by the Japan International Cooperation Agency (JICA)
is unreliable due to incomplete records/information as basis for
its determination and the noted discrepancy of P66.634 million
between the balance per books and the physical inventory report
has misstated the Property, Plant and Equipment account;
 Loans Payable account was understated by P.130 million due to:

a) various recording errors of the CY 2017 and 2018 transactions
with net overstatement effect of P.111 million and unidentified
prior years’ understatement of P 241 million; and,
 Due from LGUs and Other Receivables account amounting to

P.601 million and P.228 million, respectively, which remained
dormant in the books for more than ten (10) years overstated the
asset accounts.
Matuguinao Modified/  The balances of the Cash in Bank-Local Currency Current

Qualified Account (CIB-LCCA) amounting to P66,936,3578.52, and the
Property, Plant and Equipment account valued at
P52,097,839.55 could not be ascertained due to the non-
preparation and submission of the Bank Reconciliation
Statements, and the non-maintenance of the property cards and
property cards and property, plant and equipment ledger cards,
and failure to conduct physical inventory of properties,
respectively. Likewise, the propriety of the recorded check
disbursements totaling P413,655.70 could not be ascertained
313
due to the absence of the covering disbursement vouchers for
expenditures out of the 20% Development Fund and Local Risk
Reduction Management Fund (LDRRMF).
Motiong Qualified  Cash in Bank- Local Currency, Current Account in the amount of
P37.495 million is unreliable due to the failure of the Accountant
to prepare and submit the required Monthly Bank Reconciliation
Statements for all its bank accounts, and to record in the
Municipality’s books two bank accounts totaling P.542 million;
 Property, Plant and Equipment accounts totaling P105.715

million could not be ascertained due to: a) absence of updated
Property, Plant and Equipment Ledger Cards (PPELCs) and
Property Cards (PCs); b) failure to conduct physical count of
properties and to prepare Report on the Physical Count of
Property Plant and Equipment (RPCPPE); c) non-provision of
depreciation for Infrastructure Assets totaling P53.468 million; d)
erroneous recording of the accumulated cost of infrastructure
assets and non-reclassification of completed projects to the
proper Property, Plant and Equipment accounts; and, e) double
recording of purchased generator sets;
 Loans Payable account as of December 31, 2018 amounting to

P7.820 million is unreliable due to: a) unreconciled beginning
balances; and b) absence of Subsidiary Ledgers to support the
balance per General Ledger and lack of required disclosures in
the Notes to Financial Statement; and,
 Due to Special Account, Subsidy from Other Funds and Subsidy

to Other Funds accounts are unreliable due to erroneous
recording of financial transactions.
Pagsanghan Qualified  Advances to Special Disbursing Officer account is doubtful due

to failure of the Municipal Accountant to strictly monitor the grant
and liquidation of cash advances for Confidential and/or
Intelligence Funds, and to record a cash advance granted to one
Accountable Officer;
 Overstatement of the reported Surplus for the Period in the

Statement of Financial Performance for the year ended
December 31, 2018 due to error in recording the transfer of
Property, Plant and Equipment (PPE) from Trust Fund to the
General Fund; and,
 Property, Plant and Equipment accounts is unreliable due to

failure of the Municipal Accountant and Municipal
Treasurer/Property Custodian to reconcile the material disparity
between the balance per books and per inventory report, and to
maintain and update property cards and ledger cards, as
recommended in the CYs 2012, 2013, 2014 and 2015 Annual
Audit Reports (AAR).
314
Paranas Qualified  Local road networks costing P24.957 million was unrecorded;
completed project costing P10.280 million funded through the CY
2017 Assistance to Disadvantaged Municipalities Program was
unrecorded; water bills and market stall rentals amounting to
P.948 million and P.100 million, respectively, were unrecorded;

millioncould not be ascertained due to: (a) failure to record/adjust
in the books various reconciling items amounting to P.462 million,
(b) accumulation of doubtful items owing to scrutiny of its causes
amounting to P.310 million, and (c) failure to reconcile the
Accounting and Treasury books resulting to a variance of P.018
million;
 Due from LGUs account amounting to P.032 million which

remained dormant in the books for more than ten (10) years was
not acted upon to facilitate the proper write-off thereof; and the
inadvertent charging of wages of job order personnel totaling
P13.434 million to Salaries and Wages-Casual/Contractual
account title, instead of charging the same to the appropriate
Maintenance and Other Operating Expenses account titles; and,
 Equipment and in-kind donations were not recorded amounting

to P.171 millionand P1.293 million, respectively; and,
 Zero balance of inventory as of December 31, 2018 is unreliable

because a total of 116,420 pieces of accountable forms were not
yet used or issued.
Pinabacdao Qualified  Cash in Bank – Local Currency, Current Account with a balance
of P62.567 million is unreliable due to non-preparation of
complete bank reconciliation statements, which resulted to
unrecorded bank credits of P.597 million and existence of
unidentified balance of P1.596 million;
 Loans Receivable – Others account was understated by P.401

million due to various erroneous recording of loan transactions;
 Accounts Receivable was also understated by P.283 million, due

to non-recording of uncollected water bills from its waterworks
system consumers;
 Difference of P15.377 million between the year-end balances of

the reciprocal accounts Intra-Agency Receivables and Intra-
Agency Payables valued at P5.665 million and P21.042 million,
respectively; and,
 Property, Plant and Equipment (PPE) account with carrying

amount of P96.237 million in CY 2017 which increased to
P124.721 million in CY 2018 could not be ascertained due to non-
submission of the Report on the Physical Count of PPE as of
December 31, 2018 and non-provision of depreciation on some
of its depreciable assets .
San Jorge Qualified  Receivable accounts which remained dormant in the books for
more than ten (10) years were not acted upon to facilitate the
proper write-off thereof, resulting in the overstatement of agency
assets totaling P.722 million;
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 Recognition in the books of at least 75% of the Local Road
Network at the end of CY 2018, was not met due to the failure of
concerned personnel to keep, maintain and prepare the
records/reports thereby, understating the Property, Plant and
Equipment account;
 Errors in the classification of projects completed in CY 2016

remained unadjusted;
 Disclosures of the Loans Payable-Domestic Account with an

outstanding balance of P18.683 million were omitted in the Notes
to Financial Statement.
 Balances of some line items in the Statement of Cash Flows still

do not reconcile with the account details in the Notes to Financial
Statements and no cross-referencing was made for the line items
in the Statement of Comparison of Budget and Actual Amounts
to any related information in the Notes to Combined Financial
Statements; and,
 Property, Plant and Equipment accounts balance in CY 2017 with

carrying amount of P50.368 million which increased to P117.408
million in CY 2018 could still not be ascertained due to absence
of provision for depreciation on some accounts and
discrepancies between the actual physical count and balances
per book.
San Jose de Buan Adverse  Cash in Bank – Local Currency, Current Account totaling P78.304
million could not be ascertained due to non-maintenance of
subsidiary ledger for each bank account, non-preparation of Bank
Reconciliation Statements on the seven bank accounts and non-
submission of bank statements of the four bank accounts with
undetermined balances;
 Cash Local Treasury Account for GF and SEF with year end
balances of (P.011 million) and (P.008 million) respectively could
not be ascertained due to the failure to reconcile the Accounting
and Treasury books;
 Depreciable assets totaling P66.556 million were not provided

with an allowance for deprecation, thus understating the related
Expense and Accumulated Depreciation accounts, as well as
overstating the Property, Plant and Equipment and Government
Equity accounts;
 Loans Payable – Domestic account amounting to (P.537 million)

has decreased the total liability amount presented in the
Statement of Financial Position;
 LDRRMF unexpended balance of P3.168 million for CY 2018 and

those from previous years’ was not transferred to a special trust
fund; and,
 Forty-three (43) paid disbursement vouchers for CY 2018

amounting to P3.251 million under the General Fund were not
submitted for audit.
316
San Sebastian Modified/  Cash in Bank – Local Currency, Current Account amounting to
Qualified P55.410 million is unreliable due to non-preparation and non-
maintenance of bank reconciliation statements;
 Property, Plant and Equipment (PPE) account amounting to

P43.679 million, net of accumulated depreciation, is not reliable
because: (1) beginning balance of PPE was underdepreciated by
P.244 million and no depreciation was recognized on PPE
totaling P19.219 million which comprised 36% of the total PPE;
(2) the same was not supported with property, plant and
equipment ledger cards as well as property cards; and, (3)
physical inventory was not conducted on all PPE;
 Subsidiary ledgers/records were not maintained for 21 receivable

and liability accounts totaling P85.002 million while fifteen
accounts remained dormant for 2 to 4 years and the reasons for
their dormancy were not sufficiently disclosed in the Notes to
Financial Statements; and,
 Disbursements totaling P1.461 million and two checks reported

as cancelled is doubtful due to non-submission of the
disbursement vouchers and supporting documents.
Santa Margarita Qualified  Cash in Bank - Local Currency, Current Account amounting to
P33.984 million could not be ascertained because of a) various
reconciling items totaling P3.112 million remained unadjusted in
the books of the General Fund; (b) unreconciled difference in the
book and bank balances in prior years totaling P7.622 million; (c)
unidentified debit in the General Ledger under the Trust Fund
 Stale checks totaling P.035 million which had been outstanding

for over six months were not cancelled, adjusted and corrected
in the books resulting in the understatement of the account
balances of the Cash in Bank - Local Currency, Current Account
and Accounts Payable;
 Collections totaling to P.090 million were not recorded in the

books as of year-end, thus, the Cash - Local Treasury and
income accounts are understated by the same amount, and in
CY 2014, the Cash – Local Treasury account was unreasonably
reduced by recording deposits amounting to P.547 million which
were not supported with validated deposit slips, and this
remained unadjusted in the books to date;
 Property, Plant and Equipment account with a carrying amount of

P93.416 million (excluding Construction in Progress totaling
P44.314 million) could still not be ascertained due to absence of
property records, and their existence could not be established
due to the absence of a Report on the Physical Count of Property,
Plant and Equipment;
 Funds transferred to various barangays totaling P.137 million as

assistance for various projects were recorded as Donations
instead of Due from Local Government Units;
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 Failure to transfer the current year unexpended balance of the
LDRRMF Special Trust Fund amounting to P1.573 million as well
as the transfer of the prior year’s unexpended balance amounting
to P3.738 million which remained unrecorded as of year-end
thus, resulting to the understatement and overstatement of the
affected accounts in both the books of the Trust and General
Funds; and,
 Ownership of the lot purchased in CY 2016 totaling P2.723 million

was not established.
Santa Rita Qualified  Cash in Bank – Local Currency, Current Account totaling P96.764
million is unreliable due to (a) credit adjustment of P.579 million
without supporting documents; (b) unadjusted reconciling items
amounting to P5.297 million; (c) inclusion of stale checks as
outstanding checks totaling P2.792 million; and, (d) absence of
bank statement for one DBP loan account;
 Inventories procured amounting to P16.762 million were

recognized as expenses at year-end although not supported with
necessary documents to prove its issuance;
 Property, Plant and Equipment with total cost of P442.167 million

is unreliable due to erroneous use of accounts in recording assets
procured during the year totaling P2.404 million and the noted
discrepancy of P64.004 million between the balance per books
and the physical inventory report; and,
 Due from Other Funds and Due to Other Funds in the amount of
ascertained due to a material difference of P8.493 million.
Santo Niño Qualified  Cash in Bank - Local Currency, Current Account amounting to
P60.554 million could not be ascertained due to: (a) various
reconciling items totaling P.903 million which remained
unadjusted in the books; (b) unreconciled discrepancy in the book
and bank balances in prior years totaling a net amount of P.096
million; and (c) unrecorded bank account balances totaling P.577
million of which no Bank Reconciliation Statements (BRS) were
prepared and submitted; stale checks totaling P.138, million
which had been outstanding for over six months or more were not
cancelled, adjusted and corrected in the books, resulting in the
understatement of the account balances of the Cash in Bank -
Local Currency, Current Account and Accounts Payable;
 Property, Plant and Equipment account with a total acquisition

cost of P129.242 million excluding Construction in Progress
totaling P24.031 million, could not be ascertained and
established due to the failure of the Inventory Committee to
conduct the required annual physical count of all its properties
which resulted to the non-submission of the Report on the
Physical Count of Property, Plant and Equipment as well as the
disparity amounting to P4.293 million between the inventory
report prepared by the Municipal Accountant - Designate and the
reported book balance; and,
318
 Failure to transfer the unexpended/unobligated balance of the
LDRRMF to the Special Trust Fund for CYs 2017 and 2018
amounting to P3.568 million resulted to the understatement and
overstatement of the affected accounts in both the Trust and
General Fund books.
Tagapul-an Qualified  Material disparity between the balance per books and the
balance per bank, and the existence of unreconciled items
pertaining to prior years’ transactions in the Cash in Bank-Local
Currency, Current Account of P9.426 million; b) absence of a
bank certificate to validate the existence of the Cash in Bank-
Local Currency, Savings Account of P.309 million;
 Inability of the management to conduct an annual physical count

of all properties, maintain Property Cards, PPE Ledgers Cards,
and Real Property Ledger Cards of the Property, Plant and
Equipment (PPE) with a net book value of P33.217 million
renders the PPA account unreliable;
 Erroneous classification of various nominal and real account

balances totaling P2.935 million;
 Discrepancy of P.181 million between the reciprocal accounts

Due from Other Funds and Due to Other Funds for all funds, and,
 Non-submission of disbursement vouchers and supporting

documents totaling P11.355 million.
Talalora Qualified  Cash Local Treasury amounting to P1.838 million is doubtful due
to the continued failure of the Municipal Treasurer to deposit the
amount;
 Cash in Bank – Local Currency Current Account could not be

ascertained due to the unverified reconciling item in the General
Fund amounting to P33.696 million;
 Due to GSIS, Due to PhilHealth and Due to GOCCs with negative

balances of P.105 million, P.040 million and P.537 million,
respectively are unreliable due to the absence of the payrolls
which remained unsubmitted, to support the recorded amount
withheld from salaries of officials and employees; and.
 Disbursements totaling P12.631 million could not be ascertained

due to the absence of the covering disbursements vouchers for
expenditures out of the General Fund and the Local Disaster Risk
Reduction Management Fund.
Tarangnan Qualified  Due from Other Funds and Due to Other Funds accounts were
not reconciled due to the failure of the Municipal Accountant to
close the Due from Other Funds-KC-NCDDP account under the
General Fund amounting to P.150 million after completion of the
319
KC-NCDDP project and closure of the Due to Other Funds

account under the Trust Fund;

ascertained and its existence could not be established due to the
failure of management to maintain subsidiary records for roads
and road components for every road network, as well as a Local
Road Inventory and Road Map, to keep a complete Local Road
Network Property Card, to conduct physical count and prepare
the Report on the Physical Count of the Road Network System;
and,
 Land, Land Improvements, and Buildings accounts totaling

P19.242 million could not be ascertained because management
failed to reconcile the balances with the real property of the
Municipal Assessor, as recommended in the CY 2010 AAR.
Villareal Qualified  Cash in Bank-Local Currency, Current Account (CIB-LCCA)

amounting to P38.354 million was unreliable because bank
reconciliation statements included unsubstantiated book and
bank errors totaling P.742 million, while sixteen stale checks
totaling P.604 million were not restored to the CIB-LCCA;
 Cash-Local Treasury account’s general ledger were overstated

by P.023 million;

P122.961 million net of accumulated depreciation, was not
reliable because: (1) the beginning balance of PPE was
overstated by P2.560 million, depreciation expense for the year
is overstated by P.190 million and no depreciation was
recognized on PPE totaling P38.037 million which comprised
31% of the total PPE; (2) the same was not supported with
property, plant and equipment ledger cards as well as property
cards; and (3) physical inventory was not conducted on all PPE;
 Subsidiary ledgers/records were not maintained for 21 receivable

and liability accounts totaling P74.345 million while fifteen
accounts remained dormant for 2 to 5 years and the reasons for
their dormancy were not sufficiently disclosed in the Notes to
Financial Statements; and,
 Disbursements totaling P4.131 million is doubtful due to non-

submission of the disbursement vouchers and supporting
documents and 99 checks reported as cancelled.
Zumarraga Qualified  Bank reconciliation statements included unknown reconciling

item of P7.750 million; three outstanding stale checks totaling
P.011 million were not restored to Cash in Bank – Local
Currency, Current Account; and deposits and disbursements
posted to the account’s general ledger were overstated by P.291
320

P44.105 million net of accumulated depreciation, is not reliable
because: (1) beginning balance of PPE was underdepreciated by
P.781 million and no depreciation was recognized on PPE
totaling P21.879 million which comprised 35% of the total PPE;
(2) the same was not supported with property, plant and
equipment ledger cards as well as property cards; and (3)
physical inventory was not conducted on all PPE;
 Subsidiary ledgers/records were not maintained for eighteen

receivable and liability accounts totaling P47.892 million, while
twelve accounts remained dormant for 3 to 5 years and the
reasons for their dormancy were not sufficiently disclosed in the
Notes to Financial Statements; and,
 Disbursements totaling P5.943 million and 70 checks reported as

cancelled is doubtful due to non-submission of the disbursement
vouchers and supporting documents.
Southern Leyte Qualified  Property, Plant and Equipment (PPE) account amounting to
P1.189 billion (exclusive of the Construction in Progress) cannot
be ascertained due to the incomplete data in the Report of
caused by the unfinished physical count of PPE and unreconciled
balances between the accounting records and the General
Services Office records amounting to P439.056 million;
 Cash in Bank balance amounting to P1.122 billion as of

December 31, 2018 which cannot be ascertained due to the
absence of Bank Reconciliation Statements (BRS) as of
Statement of Financial Position date;
 Accounts Payable under the General Fund amounting to P10.502

million from CYs 2004-2016, representing 22% of its total balance
of P47.768 million remained dormant in the book of accounts as
of December 31, 2018 due to recorded payables without valid
City
Maasin City Qualified  Property, Plant and Equipment account amounting to P978.282
million could not be ascertained due to the absence of the Report
(RPCPPE) as of year-end;
 Cash in Bank – Local Currency, Time Deposit and Cash in Bank

- Local Currency, Checking Account are not reliable due to
unrecorded interests earned from time deposits from December
2015 to December 2018 in the amount of P1.772 million and
unrecorded bank deposit of P.064 million;
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 Loans Payable amounting to P26.925 million as reflected in the

book of accounts does not reconcile with the actual loan balance
per bank records;
 Inter-Agency Payables to BIR and GSIS included a negative

balance of P.176 million; and,
 Cash in Bank - LCCA of LDRRMF amounting to P24.823 million

as of December 31, 2018 is understated due to the non-
adjustment of the reported expense of P.200 million but was
unclaimed as of year-end.
Municipalities
Anahawan Qualified  PPE account amounting to P114.488 million as of December 31,

2018 cannot be ascertained due to the absence of the Report on
Bontoc Qualified  Property, Plant and Equipment (PPE) account amounting to P

158.660 million (net of Depreciation) as of December 31, 2018
cannot be ascertained due to the unreconciled balances between
the accounting records and the general services office records.
Hinunangan Qualified  Property, Plant and Equipment (PPE) account amounting to

P140.039 million cannot be ascertained due to: (a) the absence
of the Report of the Physical Count of Property, Plant and
Equipment (RPCPPE) caused by the incomplete physical count
of properties, and (b) non-reconciliation of records between the
Accounting office and the General Services Office; and,
 Cash in Bank balance amounting to P86.220 million is doubtful

due to unreconciled and unadjusted reconciling items pertaining
to CY 2018 and prior years in the total amount of P3.176 million
(deductions).
Hinundayan Qualified  Property, Plant and Equipment (PPE) account amounting to

P95.677 million cannot be ascertained due to the (a) absence of
the Report of Physical Count of Property, Plant and Equipment
(RPCPPE) caused by the incomplete physical count of properties;
(b) non-provision of depreciation of some properties; and, (c) non-
reconciliation of records between the accounting and the General
Service Office;
 Cash in Bank in the amount of P64.660 million is doubtful

because of the (a) presence of stale checks amounting to P.468
million (b) unaccounted difference between the book and the
bank balance of P387.52 (c) issued checks totaling P1.307 million
which remained outstanding for more than six months, thus, have
become stale, and were continually treated as reconciling items
in the books;
322
 Loans payable balance amounting to P17.605 million is doubtful

due to non-reconciliation of records between the Accounting and
the MDFO; and,
 The erroneous recording of interest expense of loans which

debited the Government Equity account in the amount of P5.230
million.
Libagon Qualified  Property, Plant and Equipment (PPE) account amounting to

due to the a) absence of the Report of Physical Count of Property,
Plant and Equipment (RPCPPE) caused by the incomplete
physical count of properties; b) inclusion of
unserviceable/demolished properties amounting to P9.399
million; and, c) unreconciled balances between the accounting
records and the general services office records; and,
 Cash in Bank account was doubtful because of the unreconciled

balance amounting to P1.438 million per book records and per
bank confirmation; errors in the books totaling P.005 million were
not corrected; and issued checks totaling P.006 million that
remained outstanding for more than six months, thus, have
become stale, were continually treated as reconciling items in the
book.
Liloan Qualified  PPE account as of yearend amounting to P192.425 million cannot

be ascertained due to the non-conduct of physical count of
properties caused by the lack of properly trained personnel to
conduct the inventory.
Limasawa Qualified  Property, Plant and Equipment (PPE) account amounting to

Property, Plant and Equipment (RPCPPE) and unreconciled
balances between the Accounting records and General Services
Office records amounting to P10.948 million.
Macrohon Qualified  Construction-in-Progress (CIP)-Buildings and Other Structures

amounting to P.798 million, under the Special Education Fund
(SEF) was overstated and Property, Plant and Equipment (PPE)
account was understated by the same amount due to the non-
reclassification of the CIP account to PPE account upon
completion of the project.
Malitbog Qualified  Property, Plant and Equipment (PPE) account balance

amounting to P164.253 million as of December 31, 2018 cannot
be ascertained due to: (a) unreconciled account balances
between the accounting records and the Report of Physical
Count of Property, Plant and Equipment (RPCPPE); (b)
unrecorded PPEs amounting to P10.157 million due to improper
recording of disbursements charged against the Bottom-up
Budgeting (BuB) Fund; and, unrecorded reconciling items in the
amount of P1.997 million;
323
 Discrepancy between the amount of Cash in Bank per bank
confirmation and Cash in Bank per Bank Statement as reflected
in the Bank Reconciliation Statements in the amount of P.953
million and unrecorded Cash in Bank amounting to P.922 million
cast doubt on the reliability of the Cash in Bank balance of
P48.845 million as at year-end;
 Iimproper recording of disbursements charged against the

Bottom-up-Budgeting (BuB) Fund resulted in the non-booking up
of PPEs acquired in the amount of P10.157 million in the book of
accounts, understating the said account of the same amount.
Padre Burgos Qualified  Property, Plant and Equipment (PPE) account amounting to
due to the (a) incomplete physical count of properties and non-
reconciliation of records between the accounting and the General
Service Office (GSO) and (b) the amount of P2.041 million
representing cost of demolished municipal building which is still
carried in the book of accounts resulting in the overstatement of
PPE and Government Equity accounts;
 Cash in Bank account was doubtful because of the (a)

unreconciled balance between the bank reconciliation statement
and bank confirmation in the amount of P.244 million; (b) errors
in the books totaling P1.395 million which were not corrected;
and, (c) issued checks totaling P.318 million that remained
outstanding for more than six months, thus, have become stale,
were continually treated as reconciling items in the books.
Pintuyan Qualified  PPE account amounting to P99.408 million as of December 31,

2018 cannot be ascertained due to the absence of the Report on
caused by the incomplete physical count of properties; and,
 Cash in Bank (CIB) balance amounting to P85.871 million is

doubtful due to its non-reconciliation with the balances provided
by the Land Bank of the Philippines (LBP), Sogod/Maasin
branches upon confirmation with a difference amounting to P.694
million, the bank balance being greater than the book balance.
Saint Bernard Qualified  Property, Plant and Equipment (PPE) amounting to P174.555
million cannot be ascertained due to the absence of the Report of
the Physical Count of Properties, Plant and Equipment
(RPCPPE) caused by the non-conduct of physical count of
properties and non-reconciliation of records between the
Accounting and the General Service Office (GSO).
San Francisco Qualified  PPE account totaling P125.668 million cannot be ascertained
due to the absence of the Report of the Physical Count of
Properties, Plant and Equipment (RPCPPE) caused by the non-
conduct of physical count of properties.
San Juan Qualified  Property, Plant and Equipment (PPE) account totaling P 58.840
million, net of depreciation, cannot be ascertained due to the
unreconciled difference of P1.300 million between the
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accounting records and the Report of Physical Count of Property,

Plant and Equipment (RPCPPE) and the unrecorded 1 unit
school building (Child Development Center) with a cost of P 2.064
million; and,
 Cash in Bank balance as at year-end amounting to P 103.204

million was not established due to the unrecorded Cash in Bank
amounting to P .053 million.
San Ricardo Qualified  Property, Plant and Equipment (PPE) account totaling P108.547
million as of December 31, 2018 cannot be ascertained due to
the absence of the Report of the Physical Count of Property,
Plant and Equipment (RCPPE) caused by the non-conduct of
physical count of properties; and,
 Cash in Bank balance totaling P82.329 million as of December

31, 2018 is doubtful since it did not reconcile with the balance per
Land Bank of the Philippines (LBP), Sogod branch confirmation
with a difference amounting to P5.303 million, the bank balance
being greater than the book balance.
Silago Qualified  Investment properties and Property, Plant and Equipment (PPE)
respectively, as of December 31, 2018 cannot be ascertained
due to the absence of the Report of Physical Count of Property,
Plant and Equipment (RPCPPE)caused by the incomplete some
properties and non-reconciliation of records between the
accounting and the General Service Office;
 Cash in Bank (CIB) balance with an aggregate amount of

P34.677 million as of December 31, 2018 is doubtful due to
unrecorded/unadjusted reconciling items pertaining to CY 2018
and prior years in the total amount of P.50 (additions) and P1.081
million (deductions);
 Cash in Local Treasury balance in the amount of P.648 million as

of December 31, 2018 is doubtful due to the negative balance in
the Special Education Fund amounting to P.088 million.
Sogod Qualified  Property, Plant and Equipment account amounting to P312.778

the absence of the Report of Physical Count of Property, Plant
and Equipment (RPCPPE) and unreconciled balances between
the Accounting and the Municipal Treasury Office;
 Issued checks amounting to P.284 million which remained

outstanding for six months to four years have been continually
treated as reconciling items in the books;
 Difference between the recorded balance of the loans payable

and the loans payable per bank confirmation amounting to P.010
million;
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 Property, Plant and Equipment-Land account is understated by
P.647 million because the disbursement on the right of way was
not capitalized;
 Work/Zoo Animals and Breeding Stock accounts in the amount

of P.140 million and P.128 million respectively, remained dormant
since 2008 due to the non-monitoring of the existence and
condition of the dispersed breeding stocks/animals as evidenced
by the absence of records and inventory report thereon.
Tomas Oppus Modified  Property, Plant and Equipment (PPE) account amounting to
Property, Plant and Equipment caused by the incomplete
physical count of properties and unreconciled balances between
the Accounting and General Services Office records; and,
 Cash in Bank account was doubtful because of the (a)

unreconciled balance of (P.692 million) per bank confirmation;
(b) errors in the books totaling P63,211.01 were not corrected;
and (c) issued checks totaling P.148 million that remained
outstanding for more than six months, thus, have become stale,
were continually treated as reconciling items in the books.
Region IX – Zamboanga Peninsula
Zamboanga del Unqualified

Norte
Cities
Dapitan City Qualified  Four accounts amounting to P12.100 million under the Inventory
Held for Consumption account with a total amount of P18.7 million
reflected more or less the same amount for the last five years
casting doubt on the correctness, existence, reliability and validity
of the account;
 Annual physical inventory of Property, Plant and Equipment

(PPE) was not performed in CY 2018, thus, the existence and
valuation of PPE with a total amount of P913.500 million, net of
depreciation, could not be ascertained; and,
 Land account totaling P19.200 million is understated by the cost

of six acquisitions of about P3.500 million, and also the value of
seven lots with structures of the City constructed thereon, which
have not been recorded in the books.
Dipolog City Qualified  Unreconciled difference of P179.903 million between the Report
of Physical Count of PPE (RPCPPE) amounts and those of the
accounting records casts doubt on the reliability of reported PPE
totaling P1.410 billion as of December 31, 2018;
 Inventory accounts totaling P91.004 million as of December 31,

2018 could not be ascertained due to the (a) unreconciled
difference of P80.917 million between the balances per books
and actual physical count, and (b) incomplete submission of
Report of Physical Count of Inventories (RPCI);
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 Cash in Bank (CIB) balance of P746.760 million could not be

established due to unadjusted reconciling items of P2.844 million
which have been unadjusted for more than five years, and
discrepancies amounting to P72.631 million between the
balances of the cashbook of the City Treasurer and those per
accounting ledgers;
 CIB balance totaling P2.062 million under the Trust Fund as of

December 31, 2018 could not be ascertained due to the absence
of bank reconciliation statements and cashbook; and,
 Advances to Special Disbursing Officers with a total amount of

P15.166 million (net of intelligence funds), as well as Advances
to Officers and Employees amounting to P.956 million out of
which, P6.080 million, or 40.09% and P.579 million, or 60.54%,
respectively, remained unliquidated for over a year as of
December 31, 2018, thereby affecting the timing and recognition
of expenses.
Municipalities
Baliguian Adverse  Failure to prepare and submit monthly the bank reconciliation
statement for all funds (GF, SEF and TF), totaling P69.097
million;
 Abnormal balances of specific accounts in Inter-Agency

Payables, resulting to a net credit balance of P1.369 million;
 Other Deferred Credit Account was overstated by P22.833

million, due to erroneous recording to the account of
Disallowances, upon receipt of the Notice of Finality of
Disallowance (NFD);
 No depreciation expenses for PPEs were charged for the year;

and,
 Ninety (90) Statement of Financial Position accounts of the

municipality’s CY 2018 financial statements with a total Debit and
Credit Balances of P450.220 million and P266.829 million,
respectively, were not supported with necessary schedules.
Godod Qualified  Bank Reconciliation Statements (BRS) were not prepared and
submitted regularly on time thus casting doubt as to the
correctness of the Cash in Bank account balance of P64.002
million, resulting to the non-adjustment of the corresponding
reconciling items; and staled checks totaling to P.095 million
remained outstanding as of year-end, resulting to the
understatement of both the Cash in Bank and Payable accounts;
327
 Property, Plant and Equipment (PPE) with a carrying value of
P137.650 million were doubtful because of (a) non-completion of
the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE); (b) non-maintenance of updated
Acknowledgement Receipts for Equipment (ARE); (c) non-
maintenance of subsidiary ledgers at the Accounting Office; and,
(d) unreconciled property and accounting records.
Gutalac Qualified  Various deficiencies were noted in the audit of cash such as: (1)
non preparation of bank reconciliation statements (BRSs)
rendering balances of cash amounting to P39.926 million
doubtful; and (2) inadequate internal control arising from (a) non
reconciliation between the cash book and accounting records
which resulted to a total variance of P.337 million; and, (b) non
preparation of cash book from various accountable officers
exposing government funds to possible misuse due to laxity of
control in handling cash accounts; and,
 Inventory and Property, Plant and Equipment (PPE) accounts

amounting to P.136 million and P162.725 million, respectively are
doubtful due to non-conduct of annual physical count;
 No provision for depreciation for PPE under General and Trust

Fund totaling P94.044 million;
 Road Network account in the amount of P52.444 million is

doubtful due to no Report of the Physical Count of Local Road
Network and no proper disclosure;
Jose Dalman Qualified  Infrastructure assets accounts of the Municipality totaling

P28.133 million, net of accumulated depreciation, as of
December 31, 2018 cannot be relied upon due to lack of reports
Kalawit Qualified  Property, Plant and Equipment accounts totaling P 120.541

million could not be ascertained due to a) inability of the
management to reconcile the physical inventory report with the
accounting records, and, b) non-preparation/maintenance of
Property Cards by the General Services Office; and,
 Road Networks amounting to P 29.714 million as of December

31, 2018 is doubtful due to the failure to reconcile its road
networks with the Physical Inventory Report and to maintain the
required records enumerated under COA Circular No. 2015-008.
Katipunan Qualified  Road Network account in the amount P27.341 million in the
General Fund could not be ascertained due to; (a) non –taking -
up of depreciation on the depreciable Road Network component;
(b) no Report on the Physical Count of Local Road Network;
(c) non - maintenance of subsidiary ledger for the road networks
account; and (d) no proper disclosure in the Notes to Financial
Statements;
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 Property Plant and Equipment (PPE) account in the amount of
P156.024 million was not established due to unreconciled
difference between the Report of Physical Count of PPE and the
Accounting Records amounting to P55.553 million, non-
recognition of depreciation expense for CY 2018 of its Property,
Plant and Equipment (PPE) with book value amounting to
P28.523 million and non-preparation of bank reconciliation
statement of fourteen (14) bank accounts maintained by the
Municipality.
La Libertad Qualified  Inventory and Property, Plant and Equipment (PPE) accounts
be ascertained; and,
 Property, Plant and Equipment under the General Fund totaling

P23.145 million, resulting to the misstatement of affected
accumulated depreciation, depreciation expenses and
government equity accounts.
Labason Qualified  Due from Non-Government Organization (NGO)/People’s

Organization (PO) amounting to P.313 million remained
unliquidated and/or unrefunded;
 Distributed drugs and medicine amounting to P4.496 million

remained in the books of accounts;
 Advances to Contractors amounting to P.249 million remained in

the books of accounts of the Municipality;
 Doubtful Inventory and Property, Plant and Equipment (PPE)

respectively, due to non-conduct of annual physical count;
 No provision for depreciation for PPE under Trust Fund totaling

P26.633 million and the inclusion of residual value in the
computation of Road Network account;
 Doubtful Road Network account in the amount of P87.944 million

due to no Report of the Physical Count of Local Road Network
and no proper disclosure; and,
 Erroneous classification in the recording of PPE in the books of

accounts.
Leon B. Postigo Qualified  Staled checks totaling to P.008 million remained outstanding as
of year-end resulting to the understatement of both the Cash-In
Bank and Payable accounts;
 Cash advances granted to municipal officials, employees and

other government personnel totaling P.682 million remained
unliquidated as of year-end resulting to timing differences of the
expenses accounts; and,
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 No provision of Depreciation on some of the Property, Plant and
Equipment; and Biological Assets accounts consisting of 1,713
Plants and Trees (10801020) in an area of 13.25 hectares were
not recognized in the books of accounts of the municipality.
Liloy Qualified  Doubtful Inventory and Property, Plant and Equipment (PPE)
accounts amounting to P.870 million and P164.629 million,
respectively due to non-conduct of annual physical count and to
support the recorded balance with property cards and PPE ledger
cards;
 No provision for depreciation for PPE totaling P40.028 million;
 Doubtful Road Network account in the amount of P30.829 million

due to no Report of the Physical Count of Local Road Network
and no proper disclosure; and,
 Continuous non-application of modified accrual as basis of

accounting its income.
Manukan Qualified  Road Network account in the amount P124.012 million in the
General Fund could not be ascertained due to; (a) non –
preparation of Report on the Physical Count of Local Road
Network; (b) non - maintenance of subsidiary ledger for the road
networks account; and, (c) the absence of proper disclosure in
the Notes to Financial Statements.
Mutia Qualified  Inventory and property, plant and equipment (PPE) accounts
be ascertained due to (a) non-reconciliation of the results of the
physical inventory-taking with accounting records; (b) non-
submission of various records, documents and reports related to
Fuel, Oil and Lubricants Inventory; (c) recognized Local Road
Networks in the books of accounts of the LGU are doubtful due
to incomplete documentation; (d) real estate owned by the
municipality lacked Transfer Certificates of Title (TCTs) to prove
ownership; and (e) no provision for depreciation was made for
certain PPEs totaling P89.107 million.
Piñan Qualified  Real Property Tax Receivables (RPT) and Special Education Tax
(SET) Receivables at the beginning of the year were based on
income estimates instead of the actual receivables from said
taxes; hence, resulted to the understatement of the accounts
RPT/SET Receivables and Deferred Real Property Taxes
Income/Deferred Special Education Tax Income;
 Road Networks totaling to P103.213 million as of December 31,

2018 could not be ascertained due to the failure to conduct
physical count of its road networks, maintain the required records
and provide depreciation for its Road Networks;
 No provision for depreciation was provided for its depreciable

assets totaling to P10.156 million; hence, resulted to the
misstatements of income, and assets and equity accounts at
year-end; and,
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 Due from Other Funds and Due to Other Funds had a net
difference of P11.619 million; hence, rendering the accuracy and
reliability of the affected accounts doubtful.
Polanco Qualified  Failure to conduct physical count and maintain Property Cards
casted doubt on the existence and completeness of the PPE
account balance totaling to P40.967 million;
 Road Networks could not be ascertained due to: (a) non-conduct

of annual physical inventory of its Road Networks totaling to
P11.587 million; (b) non-preparation/maintenance of Report of
the Local Road Network, Local Road Network Property Card and
Road Map; (c) non-maintenance of Local Road Network Ledger
Card on Road Networks totaling to P1.826 million; and, (c) non-
recognition of depreciation for its Road Networks;
 Seventy five percent (75%) of the Public Infrastructures Assets

transferred to the Registry of Public Infrastructures from CY 2015
and earlier years amounting to P1.615 million were not
recognized back in the books of accounts;
 Accounts Payable totaling to P24.220 million included goods

which are not yet received and accepted by the LGU and are not
supported with the required documents; hence, the existence and
validity of the accounts payable balance could not be ascertained;
 Due from Other Funds and Due to Other Funds had a net
difference of P.487 million; thus, rendering the accuracy and
reliability of the affected accounts doubtful; and,
 Cash advances totaling to P.341 million remained unliquidated at

year-end; thus, timely recognition of the affected accounts could
not be effected.
President Manuel A. Qualified  Road Network account in the amount of P 55.930 million could
Roxas not be ascertained due to; (a) unreconciled Local Road Network
inventory records in the amount of P9.524 million; (b) non -
maintenance of subsidiary ledger for the road networks account;
(c) lack of proper disclosure in the Notes to Financial Statements;
and, (d) non – recognition of depreciation/impairment.
Rizal Qualified  Inventory and PPE accounts totaling P1.104 million and
P106.640 million, respectively, cannot be ascertained due to (a)
failure to conduct physical count and reconciliation thereof of
inventories and PPEs; (b) incomplete documentation of
recognized Local Road Networks; and, (c) inadequate supporting
documents to prove ownership and not properly valued land
accounts; and,
 Representation and transportation allowance (RATA) totaling to

P2.750 million was charged against the funds for Maintenance
and Other Operating Expenses (MOOE) instead of Personal
Services (PS) to show that it is compliant to the budgetary
limitation provided in Section 325 (a) of R.A. 7160.
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Salug Qualified  Cash in Bank account balance could not be ascertained due to
(a) Consolidated Statement of Financial Position and Notes to FS
balance of Cash in Bank account for the General Fund does not
tally with its subsidiary ledger, thereby overstating it by P1.822
million; (b) Reconciling items were not adjusted to the Cash in
Bank account at year-end resulting to an overstatement totaling
to P501 million,446.48; (c) Trust Fund KALAHI PROJECT Bank
Reconciliation Statement (BRS) for December 2018 was not
prepared and submitted on time; and, (d) Staled checks totaling
to P.654 million remained outstanding as of year-end, resulting
to the understatement of both the Cash In Bank and Payable
accounts;
 Recording for the purchases of gasoline and diesel fuel as

Gasoline, Oil and Lubricants Inventory instead of Other
Prepayments is inappropriate since the items are not received by
the agency but instead kept at the supplier’s depot for
safekeeping subject to withdrawal. Thus, the said account is
overstated by P.463 million and Other Prepayments is
understated by the same amount;
 Other Supplies and Materials Inventory totaling to P.124 million

were booked as Other Property Plant and Equipment, thereby
overstating the Other Property Plant and Equipment (10799990)
by P.124 million and understating the Other Supplies and
Materials Inventory account (10404990) by the same amount;
 Depreciation on all Property, Plant and Equipment under the

General Fund were not provided; and,
 Biological Assets accounts totaling to P.750 million was not

recognized in the books of accounts of the municipality and
Breeding Stocks 10801010) and Other Bearer Biological Assets
(10801990) were not recorded in the books.
Sergio Osmeña Sr. Qualified  Reconciling items appearing in the Bank Reconciliation
Statements totaling to P4.385 million remained
unrecognized/uncorrected in the books f accounts which resulted
to the net understatement of Cash in bank by P1.844 million and
understatement/overstatement of various affected accounts;
 Issued accountable forms totaling to 9,424 pieces remained

unreported/unremitted for several years; hence, resulted to the
non-recognition of the corresponding collections in the books of
accounts;
 Non-liquidation of cash advances totaling to P2.720 million.
 Due to Other Funds and Due from Other Funds had a net
difference of P3.397 million; hence, rendering the accuracy and
reliability of the affected accounts doubtful;and,
332
 Real Property Tax Receivables (RPT) and Special Education Tax
(SET) Receivables at the beginning of the year were not
supported with a Certified List of Taxpayers with the
corresponding amount due and collectible in CY 2018; hence,
casted doubt on the accuracy and reliability of the accounts
RPT/SET Receivables and Deferred RPT/SET Income.
Siayan Qualified  Various deficiencies noted in handling, issuance, recording and

reporting of inventories, resulted to overstatement of Inventory
and Government Equity accounts amounting to P11.998 million
as of December 31, 2018 and understating expenses for the
period then ended.
 The year-end balances of the Real Property Tax (RPT) and

Special Education Tax (SET) Receivables totaling P12.201
million cannot be relied upon due to the failure of the Municipal
Treasurer to submit the certified list of taxpayers to the Municipal
Accountant as basis for the setting-up of receivables; and,
 Accounts Payable as of December 31, 2018 amounting to

P19.375 million is overstated by P8.039 million or 41.49% due to
the inclusion of claims that were not supported with complete
documentary evidence, thus, overstate the liabilities and the
asset/expense accounts and affects the fair presentation of the
Sibuco Qualified Property, Plant and Equipment account in the total amount of
P337.252 million is doubtful due to a) non–conduct of actual
physical count for CY 2018 by the inventory committee and b)
non–preparation of the Report of the Physical Count of Property,
Plant and Equipment (RPCPPE); and,
 Non-preparation of monthly bank reconciliation statements which

is necessary to determine the actual balance of agency
bank/treasury account and to detect errors committed by either
the bank or by the municipality and prepare adjustments and
update records.
Sibutad Qualified  Property, Plant and Equipment (PPE) accounts with a net
carrying book value of P90.711 million as of December 31, 2018
cannot be ascertained due to the (a) failure of inventory
committee to complete the annual physical count and reconcile
the result of the count with the property and accounting records;
(b) non-compliance with the PPSAS on the provision for
impairment; and, (c) incomplete documentation relative to the
Local Road Networks amounting to P27.730 million.
Sindangan Qualified  Failure to transfer the required 75% or P82.676 million of its
registered Public Infrastructure assets to the Property, Plant and
Equipment accounts;
 Various unserviceable Properties and Equipments amounting

P19.106 million were not derecognized and/or disposed, thus
exposed to possible loss and further deterioration;
333
 P10.324 million or 75% of the recorded Accounts Payable as of
December 31, 2018 cannot be relied upon due to the absence of
sufficient documentary evidence to support valid claims, thereby
affecting the fairness of presentation of financial statements; and,
 Completed and projects costing P54.090 million were not

appropriately reported thus affected the timely accounting and
recognition of Asset and Government Equity Accounts.
Siocon Qualified  Property, Plant and Equipment (PPE) account of the LGU
constitutes more than 75% of the total municipal assets or an
equivalent of P498 million out of the total P658 million cannot be
ascertained due to the presence of un-reconciled balances in its
supporting schedule amounting P57.885 million, the non-conduct
of complete physical count at year-end to ascertain completeness
thereof, and the non-provision of depreciation expenses to all
PPE items and/or class of PPE, overstating the book value of
PPE accounts presented per FS while understating the
depreciation expenses and accumulated depreciation expenses;
 Non-recognition of local roads except for those completed in CY

2016 is not in accordance with PPSAS;
 Provision of 5% residual value in the computation of Road

Networks resulted to the erroneous computation of depreciation
expenses which understates the depreciation expenses and the
accumulated depreciation expense as of year-end by P.356
Sirawai Qualified  Cash and cash items in the financial position at P47.218 million
which include cash in bank under Trust Fund in the amount of
P25.741 million was not reconciled with the bank balance as of
December 31, 2018;
 Receivable is overstated; and,
 Property, Plant, and Equipment account in the financial position

is understated due to the failure of management to consider the
total cost of the gymnasium which is under a build and transfer
swap with a local company in the total amount of P3.530 million
and incomplete recording of the local road network resulted to its
understatement which is part of the property, plant, and
equipment in the financial position; and the continuing effect of
undetermined amount of its property, plant and equipment in the
financial position due to management continued failure to
complete its conduct of physical inventory.
Tampilisan Qualified  Property, Plant and Equipment (PPE) in the amount of P144.338
million cannot be ascertained due to (a) incomplete and
unreconciled Property, Plant and Equipment Ledger Cards
(PPELC) and Property Cards maintained; (b) failure of the
334
Inventory Committee to complete the physical inventory-taking;
and, (c) default of the Disposal Committee to undertake
immediate action to dispose of unserviceable properties; and,
 Road Networks Account which continually reported a balance of

P5.987 million, inclusive of accumulated depreciation, did not
pertain to 75% of the assets to be restored since no inventory was
made.
Zamboanga del Qualified  Reimbursable Medical Assistance (MA) Program of the

Sur Department of Health (DOH), Department of Social Work and
Development (DSWD) and Philippine Charity Sweepstakes
Office (PCSO) with total amount of P19.731 million;
 Unpaid promissory notes (PN) totaling P1,824 million as of

December 31, 2018, were not reported and recorded as
receivable and revenues in the books due to lack of proper
monitoring by the Accounting Section in the ZDS Medical Center
(ZDSMC), resulting in the understatement of the receivable and
revenue accounts in the consolidated FS by P21.555 million;
 Indigency Fund balance of P3.818 million per Subsidiary Ledger

(SL) is not reconciled with ZDSMC control sheet records of
P2.442 million, resulting in a net difference of P1.376 million,
which may cause delay in the recognition of income after services
have been rendered and payment of financial assistance in
excess of the available balance of the requesting LGU;
 No retention money was deducted from the progress payments

to contractors totaling P37.732 million, understating Guaranty
Deposits Payable by the same amount, and exposing projects to
risks that discovered defects during construction period may not
be immediately corrected;
 Payments for Janitorial and Security Services in the amount of

P33.077 million and P23.315 million, respectively, were paid
regardless of the actual services rendered and were not properly
supported with documents, casting doubt on the validity of
payments made, and resulting in excessive expenditures of at
least P5.324 million;
 Cash Advances except for Confidential Fund (CF) totaling

P25.736 million remained unliquidated as at December 31, 2018
affecting the timing of recognition of expenses;
 Unreconciled differences of P410.672 million between the

General Ledger (GL)/SL balances of Property, Plant and
Equipment (PPE) against the Report on the Physical Count of
PPE balance affect the reliability of the PPE accounts as at
 Balances of Drugs and Medicines and Medical Supplies are not

reconciled with Report on Physical Count of Inventory (RPCI),
with a net difference of P3.268 million and balances of drugs and
medicines and medical supplies issued to Pharmacy per Report
of Materials and Supplies Issued (RMSI) and Pharmacy
Dispensing Report differed by P.298 million, affect the reliability
and accuracy of the affected accounts as of year-end.
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Cities
Pagadian City Disclaimer  Various accounts which have unidentified beginning balances for
years totaling P184.143 million could not be ascertained due to
lack of vital information in the subsidiary ledgers and schedules;
 Long outstanding receivables of P21.725 million remained

unsettled for years, and the collectability of which is uncertain,
affecting the timing recognition of expenses and other affected
accounts;
 Cash Advances, Due to Local Government Units and Other

Payables accounts totaling P6.287 million have negative
balances due to erroneous recording of transactions;
 Receivables from the Common Usage, Security and Ancillary

(CUSA) services of the City Commercial Center (C3) of P2.970
million were not set-up due to improper monitoring and recording
of C3 transactions, exposing funds to loss or wastage; and,
 Inadequate records and absence of proper monitoring resulted to

a net overstatement of the Loans Payable and the corresponding
net understatement of Interest Expense accounts of P392 million;
and unrecorded increase in interest expense, which were not
considered in the current year’s appropriation.
Zamboanga City Qualified  Road Networks and other Infrastructure Assets totaling P2.380
billion and P2.050 billion, respectively, completed in CY 2018 and
prior years were not taken up as Property, Plant and Equipment
(PPE), thereby understating PPE by the said amounts;
 Land account amounting to P472.370 million as of December 31,

2018 cannot be ascertained due to absence of vital details in the
Schedule of Lands maintained by the City Accountant’s Office
(CAO) and the non-reconciliation of data in the same schedule
with those of the records of the City General Services Office
(CGSO) and City Assessor’s Office (CAsO);
 Land account is understated due to non-inclusion of 2,363

parcels of donated land in the books of the City;
 Receipt of donated medical equipment from the Department of

Health (DOH) amounting to P1.560 million was not properly
documented and were not recognized in the books of accounts
as assets thus understating the PPE account;
 Items in Transit account in the amount of P5.100 million, which

was reclassified as Information and Communication Technology
Equipment (ICTE) upon the adoption of PPSAS, cannot be
ascertained;
 PPE amounting to P29.650 million have remained in the Trust

Fund (TF) books for several years and no depreciation was taken
up for these, thus overstating PPE with the depreciation on said
property;
336
 Stalls for rent at the Paseo del Mar, Plaza del Pilar and Paseo de
Jardin Pasonanca are recorded in the Infrastructure Assets -
Parks, Plazas and Monuments account instead of Investment
Property – Building account, overstating the former and
understating the latter with the value or cost of the stalls;
 P2.900 million, or 73% of the total Livestock under the Animal

Dispersal Program of the City per physical count conducted in the
three Veterinary Services Field Offices (VSFOs) were not
properly accounted and reconciled with accounting and inventory
records which creates doubts as to the reliability and accuracy of
the recorded Biological Asset accounts;
 P1.320 million, or 39% of the total Point-of-Sale (POS) Payment

System collections of P3.410 million for CY 2018 remained
unsettled or uncredited to the Bank account of the City resulting
to an overstatement in the reported balances of Cash in Bank –
LCCA and an understatement in the Other Receivables account
 Due to Bureau of Internal Revenue (BIR) and Cash in Bank –

Local Currency, Current Account (LCCA) balances are
understated by P3.830 million due to the non-recording of
unremitted Value Added Tax (VAT) and percentage taxes
withheld from Government Money Payments (GMP) for August
2018 mainly caused by an error in the processing of the payment
made through the Development Bank of the Philippines (DBP)
Electronic Payment System (EPS);
 Real Property Tax (RPT) Receivable amounting to P194.890

discrepancies between the records of the CAO and City
Treasurer’s Office (CTO);
 Cash advances for Confidential Funds (CF) granted in CYs 2017

to 2018 totalling P38.500 million remained outstanding despite
submission and receipt of liquidation documents, thereby
overstating Advances to Special Disbursing Officer (SDO)
account by the same amount;
 Due from National Government Agencies (NGAs) - Procurement

Service of the Department of Budget and Management (PS-DBM)
with a balance of P5.100 million as of December 31, 2018 is
overstated by P3.980 million due to unrecorded deliveries and
unreconciled difference of P1.11 million casts doubt on the
reliability of the account;
 Accounts Payable and Subsidy to Local Government Units

(LGUs) accounts are overstated and Trust Liability – Disaster
Risk Reduction and Management (DRRM) account is
understated by P86.280 million due to the erroneous recording of
the transfer of the unexpended portion of the 2018 Local DRRM
Fund of the City;
337
 Accounts Payable and Due to BIR are understated by P54.830
million and P3.100 million, respectively as of December 31, 2018
due to the non-recognition of liabilities despite acceptance of
some motor vehicles, medicines and properties by the City, and
correspondingly understating the related Motor Vehicles, Other
PPE and Drugs and Medicines accounts by P51.190 million,
P1.600 million and P5.130 million, respectively;
 Sub-accounts totalling P6.850 million under the Due to

Government Service Insurance System (GSIS) account remained
unremitted and non-moving for several years and several sub-
accounts totalling P1.15 million under the same account have
debit balances which raise doubt as to the validity and accuracy
of the reported balances in the FS of the City;
 Guaranty Deposits Payable account amounting to P13.720

million cannot be ascertained due to being dormant for more than
five years and inclusion of a negative balance of P.010 million;
and,
 Accounts Payable and Due to LGU accounts with balances of

P3.920 million and P4.320 million, respectively, as of December
31, 2018 remained outstanding for more than two years, casting
doubt on the validity of the accounts.
Municipalities
Aurora Qualified  Cash-LCCA and Cash-Savings Account amounting to P235.663
the non-submission of the monthly Bank Reconciliation
Statements;
 Cash in Bank – LCCA in the total amount of P235.663 million as

at December 31 could not relied upon due to non-reconciliation
between subsidiary ledger (book balance) and bank statement
(bank balance);

was not prepared and submitted, hence, validity, existence and
propriety of classification of fixed assets accounts in the amount
 Property, Plant and Equipment (PPE) Accounts in the total

amount of P147.789 million was not provided with depreciation
expense;
 Accounts payable totalling P31.962 million cannot be fully relied

upon due to unsubstantiated claims;
 Fuel, oil, and lubricants inventory and Other Supplies and

Materials Inventory in the amount of P1.970 million and P1.577
million, respectively, as reported in the books cannot be relied
upon as to its existence;
338
 Receivable Accounts in the total amount of P6.226 million remain
dormant where settlement or collectability could no longer be
ascertained; and,
 Unreconciled balance of the Trust Liabilities-LDRRMF Account in

the amount of P5.657 million resulting to the understatement of
the account.
Bayog Qualified  Three current bank accounts totaling P4.663 million which do not
have specific account number and not substantiated with actual
bank records may result to overstatement of Cash in Bank;
 Petty Cash and Due to Pag-Ibig accounts showed a negative

balances of P931.55 and P.065 million, respectively;
 Cash advances to Officers and Employees amounting to P1.260

million remained unliquidated as of December 31, 2018;
 Purchases of drugs and medicines totaling P.521 million were

recorded as outright expense contrary to the Perpetual Inventory
Method required in government accounting, thereby misstating
the balance of Inventory and Government Equity accounts;
 Plastic chairs totaling P.320 million accounted for as Furniture

and Fixtures does not fall within the policy prescribed in COA
Circular 2005-002 dated April 14, 2005, thus, resulting in
inappropriate use and overstatement of the account Furniture and
Fixtures;
Depreciation was not provided for some Property, Plant and

Equipment (PPE) booked under General Fund (GF) valued at
P57.071 million and Special Education Fund (SEF) valued at
P.235 million, and some PPE accounts totaling P.852 million were
accounted in an inappropriate accounts thereby affecting the fair
presentation of the accounts in the financial statements.
Dimataling Qualified  Failure to disclose in the Notes to the Financial Statements the
amount and details of the unexpended balance of LDRRMF, thus,
precluding the users of the Financial Statement in verifying and
accessing the additional information that is useful in making
sound judgment and economic decisions;
 Purchases of various supplies and materials totaling P 2.152

million were not coursed through the inventory accounts but
rather charged directly to expenses, inconsistent with the
applicable provisions of the Manual on New Government
Accounting System (NGAS) for Local Government Units (LGUs)
and failure to prepare or maintain a complete supplies and
materials inventory records, hence, the reported balances of
Inventory Accounts and Supplies and Materials Expense
Accounts may be held unreliable affecting the fair presentation of
the Agency’s Financial Statements for CY 2018;
339
 Various deficiencies were noted in the agency’s grant of travelling
allowance to its officials and/or employees totaling P.702 million,
rendering the transaction doubtful as to the fairness of travelling
allowances granted to its officials and employees and affecting
the reliability of travelling expenses reflected in the agency’s
financial statement; and,
 Property, Plant and Equipment (PPE) accounts in the agency’s

financial statements as of December 31, 2018 with an aggregate
book value amounting to P54.453 million cannot be fully relied
upon due to the absence of a complete physical count of PPE and
non-preparation and non-maintenance of complete property
records, hence, no Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) can be submitted and asset
reconciliation cannot be conducted.
Dinas Qualified  Continuous inaction of management to conduct physical

inventory, submit inventory report and maintain adequate
property records for all Property, Plant and Equipment totaling
P189.192 million, resulted to the non-reconciliation of the
accounting and property records thus existence, condition and
valuation of the properties could not be ascertained;
 Depreciation Expense on various depreciable properties with a

depreciable cost of P44.781 million was not set-up thereby
overstating the assets and understating the corresponding
expense accounts; and,
 Failure to initiate the liquidation of the Due from Officers and

Employees and Advances to Officers and Employees totaling to
P6.100 million, thus, the recognition of expenses on its
appropriate period cannot be made.
Dumalinao Qualified  Unreliable Property, Plant and Equipment (PPE) account

amounting to P 152.374 million; and,

unliquidated as of year-end.
Dumingag Qualified  Cash in Treasury Account amounting to P1.574 million are

doubtful due to the discrepancies of P1.022 million with the Cash
Book Balances;
 Cash advances totaling P8.412 million remained unliquidated at

the end of the year;
 Report on the Physical Count of Inventories (RPCI) was not

prepared and submitted, hence, existence and valuation of the
Inventory Accounts totaling P.651 million could not be
ascertained;
 Public market, market stalls and market blocks accounted for as

Markets held to earn rentals with book value of P55.926 million
were classified as Property, Plant and Equipment (PPE) rather
than Investment Properties;
340

(RPCPPE) was not prepared and submitted, hence, validity,
existence and propriety of classification of fixed assets accounts
in the amount of P211.983 million could not be ascertained;
 Due to Other Funds and Due from Other Funds are doubtful due
to discrepancies of P5.835 million;
 Non-current portion of the long-term loans payable totaling

P18.507 million, was not properly presented as non-current
liability in the Statement of Financial Position since the whole
outstanding balance was presented as current liability; and,
 Unutilized balances of the CY 2012 Local Disaster Risk

Reduction and Management Fund (LDRRMF) appropriation
amounting to P1,360 million previously transferred to the Trust
Fund Account was not reverted to the General Fund.
Guipos Qualified  Due to the Discrepancy between the balances of the reciprocal
accounts Due from Other Funds and Due to Other Funds
amounting to (P2.287 million) as of December 31, 2018, thus
casting doubt on the accuracy of their balances in the financial
statements, and runs counter to the ideals on keeping accurate
the accounts of the government.
Josefina Qualified  Cash in treasury amounting to P.257 million as reflected in the

financial statements for all funds remained undeposited as of
year-end;
 Cash advances totaling P3.326 million remained unliquidated at

the end of the year;
 Market blocks and market stalls and accounted for as Markets

held to earn rentals with book value of P26.497 million were
classified as Property, Plant and Equipment (PPE) rather than
Investment Properties;

(RPCPPE) was not prepared and submitted, hence, existence
and propriety of classification of fixed assets accounts in the
amount of P127.463 million could not be ascertained; and,
 Due to Other Funds and Due from Other Funds are doubtful due
to discrepancies of P51.046 million.
Kumalarang Qualified  Cash advances to Officers and Employees totaling P2.660 million
remained unliquidated as of December 31, 2018; and,
 Property, Plant and Equipment (PPE) of P322.720 million cannot

be ascertained since records of physical inventory were not
reconciled, reports were not properly made and the
corresponding adjustment for losses and other items necessary
to bring its value to the correct amount was not properly.
341
Labangan Qualified  Cash and cash equivalents amounting to P115.519 million as of
December 31, 2018 cannot be ascertained due to the non-
submission of the monthly Bank Reconciliation Statements;
 Advances to Officers and Employees account totaling P9.512

million, remain unliquidated and long outstanding;

was not prepared and submitted hence, validity, existence and
 Transfers of funds from one bank account to another or from one

fund to another in the total amount of P50.797 million 25 were
made without the authorization from the Legislative Body;
 Amount transferred to Special Trust Fund Account pertaining to

unutilized LDRRM Fund was insufficient by P1.758 million; and,
 Continuing appropriation in the total amount of P13.916 million as

reflected in the monthly utilization report could not be ascertained
due to absence of supporting schedules.
Lakewood Qualified  The LGU has not prepared the SCBAA and its required disclosure
for CY 2018;
 Unliquidated cash advances amounting to P10.515 million;
 No provision for depreciation was made for some Property, Plant

and Equipment (PPE) account totaling P35.008 million;
 Unutilized Local Disaster Risk Reduction and Management Fund

(LDRRMF) to the General Fund amounting to P1.547 million was
accounted as Trust Liability.
Lapuyan Qualified  Depreciation Expense was not provided for Property, Plant and
Equipment totaling P92.624 million which resulted to the
overstatement of the PPE accounts, and overstatement of the
surplus and government equity, thereby affecting the fair
presentation of the accounts in the financial statements; and,
 Trust Liabilities-DRRMF account per audit differs with the amount

in the Financial Statement by P.108 million and the amount in the
Subsidiary Ledger by P7.733 million.
Mahayag Qualified  Advances to Officers and Employees (1030540), Special

Disbursing Officers (SDO) (1030530) and Other Receivables
accounts (10306990) totaling P4.207 million remain unliquidated
and has been long outstanding;
 Report on the Physical Count of Inventories (RPCI) was not

prepared and submitted, hence, existence and valuation of the
Drugs and Medicines Inventory account totaling P2.449 million
could not be ascertained;
342
 Property, Plant and Equipment (PPE) accounts in the financial
statements (FS) as of year-end could not be ascertained due to
non-performance of the physical inventory count, presence of
unreconciled balances between of the Report on the Physical
Count of Property, Plant and Equipment (RPCPPE) and the
general ledger (GL) amounting to P.277 million and the absence
of complete records or detailed schedules on the components of
the assets classified under the PPE account;
 Public market, market stalls and market blocks accounted for as

Markets held to earn rentals with book value of P4.846 million
were classified as Property, Plant and Equipment (PPE) rather
than Investment Properties; and,
 Due to and from Other Funds and Due to and from Special
Accounts are doubtful due to discrepancies of P5.141 million and
P.018 million, respectively.
Margosatubig Qualified  Depreciation Expenses were not provided for various PPE
accounts totaling P26.300 million which resulted to the
overstatement of the PPE accounts, understatement of expenses
and overstatement of the surplus and government equity;
 Due to BIR, Pag-IBIG, PhilHealth and GOCCs accounts showed

a negative balance of P.133 million, P.328 million, P.114 million
(TF) and P.122 million (GF); respectively; and,
 Payment of prior year’s van rental totaling P.074 million was

charged to current year’s appropriation without attaching any
authority allowing such payment.
Midsalip Disclaimer  “Unreconciled Amount” in the Statements of Bank Reconciliation

of the Municipality amounting to P17.592 million affects the
correctness of Cash in Bank – Local Currency, Current Account
totaling to P184.119 million as of 31 December 2018 and thus the
latter could not be sufficiently relied upon.

million remained doubtful due to the incomplete conduct of
physical count thereof and the non-depreciation of certain class
of properties;
 Due from Other Funds and Due to Other Funds were not recorded
simultaneously rendering the account balances unreliable;
 Budget and Accounting Offices recognized different accounts in

the disbursement vouchers and ledger accounts for the same
consultancy services expenditures amounting to P1.334 million
affecting the fair presentation in the financial statements, on top
of not following pertinent provisions of RA 9184;
 Several checks were still reported as outstanding despite being

dated up to four years ago casting doubt as to the fair
presentation of the total balance in the Bank Reconciliation
Statements; and,
343
 Numerous DVs including their supporting documents which were
paid in checks for CY 2015 and CY 2016 remained not submitted
to the Office of the Auditor, on top of the delayed submission of
the CY 2018 accounts precluding review and examination
thereof.
Molave Qualified  Property, Plant and Equipment (PPE) accounts totalling

P463.533 million remained doubtful due to the incomplete
conduct of physical count thereof and the non-depreciation of
certain class of properties; and, ‘
 Due from Other Funds and Due to Other Funds was not recorded
simultaneously rendering the account balances unreliable.
Pitogo Qualified  Various mathematical errors and discrepancies were observed in

the Financial Statements resulting to failure of the management
to enhance the degree of confidence of intended users in the
Financial Statement (FS) and forfeit the main purpose of the FS
that is to provide the users with financial information useful in
making sound judgment and economic decisions; and,
 Property, Plant and Equipment (PPE) with a carrying value of

P12.826 million were doubtful because of (a) failure to conduct
the physical inventory; (b) failed to update the file of
Acknowledgement Receipts for Equipment (ARE) and subsidiary
ledgers at the accounting office; and, (d) unreconciled property
and accounting records.
Ramon Magsaysay Qualified  Incomplete conduct of physical count of the municipality’s

Property, Plant and Equipment valued at P195.405 million and
the non-depreciation of certain class of properties. This includes
the noncompliance with the accounting and reporting procedures
on the Local Roads Asset Management System; and,
simultaneously rendering the account balances unreliable.
San Miguel Qualified  Failure to trace the unreconciled amount of P22.200 million as
appearing in the Bank Reconciliation Statement (BRS); and,
 Improper recording of Prior Period Adjustment (PPA) of P3.600

million thereby understating the asset/expense account.
San Pablo Qualified  Cash in Bank of the General Fund includes reconciling items from
prior years with an aggregate amount of P2.302 million as of year-
end that were still not taken-up for corrections or adjustments in
the books of accounts;
 Cash advances granted to officers and employees amounting to

P2.637 million, remained unliquidated as of year-end;
 No provision for depreciation was made for PPE totaling P18.282

million;
344
 Construction in Progress- Infrastructure Assets amounting to
P88.279 million and Construction in Progress- Buildings and
Other Structures amounting to P4.634 million has not been
adjusted for completed projects in the Trust Fund books.
Sominot Qualified  Cash and cash equivalents account amounting to P56.713 million
as of December 31, 2018 cannot be ascertained due to the non-
submission of the monthly Bank Reconciliation Statements;
 Cash deficit of P5.433 million was incurred as of December 31,

2018;
 Misclassification of Advances Accounts in the total amount of

P.600 million
 Advances for special purpose/time bound activity in the amount

of P.436 million remain long outstanding;

was not prepared and submitted, hence, validity, existence and

expense; and,
 Trust Liabilitities – Disaster Risk Reduction and Management

Fund in the total amount of P7.233 million was not recorded in the
books.
Tabina Qualified • Various funds granted by the National Government Agencies

totaling P11.738 million were still in the Due to NGAs account
despite its full liquidation and failure to return to the source
agency the total unused balance of P.043 million upon completion
of the project;
 Infrastructure assets, buildings and other structures totaling

P45.346 million were still in the Construction in Progress account
and were not reclassified to appropriate agency asset account;
 Property, Plant and Equipment (PPE) accounts in the agency’s

financial statements as of December 31, 2018 with an aggregate
book value amounting to P31.863 million cannot be fully relied
upon due to the absence of a complete physical count of PPE and
non-preparation and non-maintenance of complete property
records; and,
 Failure to disclose in the Notes to the Financial Statements the

amount and details of the unexpended balance of LDRRMF, thus,
precluding the users of the Financial Statement in verifying and
accessing the additional information that is useful in making
sound judgment and economic decisions.
345
Tambulig Qualified  Lump sum reconciling items in the Statements of Bank
Reconciliation of the Municipality, including the incomplete
preparation for all accounts, makes the correctness of Cash in
Bank – Local Currency, Current Account totaling P102.928
million, as of 31 December 2018 doubtful;

million were not supported with property and ledger cards nor with
complete and accurate Inventory Reports hence the
reconciliation of both accounting and property records were not
possible and includes the noncompliance with the accounting and
reporting procedures on the Local Roads Asset Management
System;

Receivables were not set up at the beginning of the year putting
doubt on the reliability of the accounts as of year-end;
simultaneously rendering the account balances unreliable;
 An accounting entry made for the 2018 Liquidation Report for the
CY 2012, 2013 and 2014 Advances for Confidential Fund
amounting to P.733 million understated both the Due from
Officers and Employees (1-03-06-020) and Accounts Payable (2-
01-01-010) accounts; and,
 Special Education Fund transactions were not supported with

Obligation Requests, apart from the non-preparation of the
SCBAA for the fund.
Tigbao Qualified  Disbursements totaling P.088 million remained unrecorded in the

books resulting in overstatement of cash and government equity
accounts by the same amount;
 Cash advances to Officers and Employees amounting to P9.490

million remained unliquidated as of December 31, 2018;
 Property, Plant and Equipment of P226.800 million, cannot be

ascertained since physical inventory was not conducted, records
were not reconciled, reports were not properly made and the
corresponding adjustment for losses and other items necessary
to bring its value to the correct amount was not properly done as
required under existing laws, rules and regulations on supply and
property management; and,
 Purchases of drugs and medicines totaling P.383 million were

recorded as outright expense.
Tukuran Qualified  Cash and cash equivalents account amounting to P154.957

the non-submission of the monthly Bank Reconciliation
Statements;
 Advances to Officers and Employees account (1030540) totaling

P1.475 million remain unliquidated and long outstanding;
346
 Receivables totalling P8.529 million cannot be fully relied upon
due to unwarranted claims, failure to reflect the necessary
adjustments, erroneous recording and misclassification of
accounts;
 Fuel, oil, and lubricants inventory in the amount of P2.886 million

as reported in the books cannot be relied upon as to its existence;

expense; Report on the Physical Count of Property, Plant and
Equipment was not prepared and submitted hence, validity,
existence and propriety of classification of fixed assets accounts
in the amount of P296.758 million could not be ascertained;
 Other Receivables Account (1-03-06-990) in the total amount of

P.290 million remain dormant;
 Unsubstantiated Accounts Payable amounting to P8.071 million;
 Unsubstantiated adjustment in Other Payable amounting to

P3.072 million; and Due to GSIS in the total amount of P3.835
million remained long outstanding.
Vincenzo A. Sagun Qualified  Cash in Bank – LCCA is overstated by P.121 million due to the
unrecorded book reconciling items;
 Cash in Bank – LCCA is overstated by P.190 million due to

unrecorded reconciling items representing checks drawn which
were not supported with the required documents;
 Payables totaling P1.164 million remained outstanding for more

than two years and were not supported with documentation for
valid claims;
 Due to NGAS totaling P.039 million remained in the books for

several years;
 Disbursement of supplies for the 35th Araw ng Vincenzo Sagun

totaling P.227 million were recorded to Representation Expense
although the items purchased could be properly identified and
classified to prescribed specific accounts;
 Aid to DILG and PNP for the month of March 2018 totaling P.020
million were recorded to Auditing Services instead of Other
Professional Services; and,
 Municipal Hall worth about P2 million more or less was not

booked up resulting to the understatement of the total assets of
the Municipality.
347
Zamboanga Qualified  Receivables account amounting to P26.760 million remained in
Sibugay the books for more than ten years, affecting the timing of
recognition of expenses and other affected accounts;
 Inventory and Property, Plant and Equipment (PPE) accounts

totaling P63.804 million and P1.146 billion respectively, as of
December 31, 2018, could not be established because the
amounts are not reconciled with those in the Report on the
Physical Count of Inventories and Report on the Physical Count
of PPE (RPCPPE), with variances of P56.799 million and
P80.170 million, respectively, as of year end and, the RPCPPE
for eight PPE accounts with a net book value of P267.506 million
have not been submitted;
 Partial billings of various infrastructure projects under Trust Funds

were not recorded to Construction in Progress (CIP) account,
thus understating the CIP-Infrastructure Assets;
 Due to National Government Agencies and Trust Liabilities-

Disaster Risk Reduction Management Funds by P197.203
million, P195.627 million and
P1.576 million, respectively;
 Land where the Zamboanga Sibugay Provincial Hospital and

other improvements were constructed have not been recorded in
the books nor reflected in the RPCPPE;
 Procurement of livestock for distribution to beneficiaries totaling

P.241 million were erroneously recorded under the Breeding
Stock, instead of the Agricultural Produce for Distribution
account, overstating the former and understating the latter
account by the said amount; and,
 Dormant Guaranty/Security Deposits Payable of P1.099 million

was erroneously recorded/classified to the Bail Bond Payable
account, overstating the latter and understating
Guaranty/Security Deposits Payable account by the said amount
Municipalities
Alicia Qualified  Non-preparation of Bank Reconciliation Statement for the cash in

bank totalling P68.181 million;
 Non-liquidation of Advances to Officers and Employees of P3.856

million, thus, expenses were not recognized in the proper period;
 Failure to conduct physical inventory of PPE accounts amounting

to P302.724million and the non-reconciliation of records;
 Non-submission/maintenance of subsidiary schedules of

accounts totaling P205.618 million;
 Non-reconciliation of Due from Other Funds and Due to Other

Funds of P59.765 million and P71.954 million, respectively; and,
 Non-preparation of Statement of Financial Performance for the

Trust Fund.
348
Buug Qualified  Property, Plant and Equipment (PPE) amounting to P329.598
million remained doubtful due to the Municipality’s failure to
conduct physical inventory and to reconcile the same against the
property and accounting records;
 Depreciation expenses were not provided to various Property,

Plant and Equipment (PPE);
 Taxes withheld from suppliers in the Trust Fund (TF) were

transferred to the General Fund (GF) resulting to improper flow
and recording of transactions; and,
 Cash advances for the 2018 celebration of the Municipality’s Bog

Festival were improperly recorded.
Diplahan Qualified  No inventory taking of PPEs and non-reconciliation of inventory

records;
 Disclosures of information in the Notes to Financial Statements

were not adequately presented;
 The balances of reciprocal accounts Due from Other Funds and

Due to Other Funds were not reconciled;
 Purchase of transportation equipment amounting to P1.044

million was not recognized as assets in the General Fund;
 Non recognition of revenue for the amount billed to Philhealth

from the operations of Wilfredo C. Palma Memorial Hospital
(WCPMH); and,
 Purchase of inventory items and semi-expendable supplies and

materials was directly debited to expense.
Imelda Qualified  Non-moving or dormant “Due to NGA” account amounting to

P10.397 million as of December 31, 2018;
 Long overdue loans receivable account amounting to P.239

million remain outstanding in the books of the LGU; and,
 Incurrence of losses for two consecutive years of its CHIKEN ATI-

ATIHAN a Local Economic Enterprise (LEE).
Ipil Qualified  Receivables were not liquidated and monitored resulting to

outstanding past due receivables of P9.132 million, or 57% of the
balance of receivables accounts as of December 31, 2018,
affecting the timing recognition of expenses;
 Property, Plant and Equipment (PPE) accounts per General

Ledger showed a discrepancy amounting to P32.441 million as
against the Report of Physical Count of PPE; Unserviceable,
damaged and demolished properties were not disposed of and
still carried under the PPE accounts totalingm P32.596 million;
and,
349
 Uncollected rentals from delinquent stall occupants totaling
P4.834 million were not taken up in the books understating
receivable and income accounts.
Kabasalan Qualified  Advances for Payroll, Advances to Special Disbursing Officer and
Advances for Officers & Employees amounting to P.767 million,
P.017 million and P9.814 million, respectively, remained
unliquidated as of December 31, 2018 affecting the timing
recognition of expenses;
 Inventories and Property Plant & Equipment amounting to P2.134

million and P203.437 million, respectively, cannot be relied upon
due to the failure to prepare the Reports on the Physical Count of
Inventories, PPE and Road Network System for the physical
count conducted and to conduct the reconciliation of records;
 Due from NGAs, Due from LGUs, Due from Officers & Employees
and Other Receivables amounting to P.576 million,
P18.419million, P6.598 million and P.185 million, respectively
remained outstanding from one to 21 years affecting the
existence of the accounts; and,
 Abnormal balances in Advances for Officers & Employees,

Accounts Payable, Due to Other Funds, Guaranty Deposits
Payable, Due to NGAs and Due to LGUs with an aggregate
amount of P.622 million affected the accuracy of the accounts
Mabuhay Qualified  Failure to conduct a periodic physical inventory of supplies or

property and PPE amounting to P241.103 million as of December
31, 2018 and to reconcile the accounting and property records;
 Unreconciled reciprocal accounts Due from Other Fund and Due

to Other Funds of P1.716 million and P31.952 million,
respectively as of December 31, 2018 ;
 Unidentified balance in the asset and liability accounts totalling

P.249 million and P31.901 million, respectively as of December
31, 2018 ; and,
 Abnormal Balance in the Due to Officers and Employees and Due

to NGA accounts in the Trust Fund and WMSU-SHS books
amounting to P.233 million and P.068 million, respectively as of
December 31, 2018.
Malangas Qualified  No inventory taking of PPEs and non-reconciliation of inventory

records;
 Disclosures of information in the Notes to Financial Statements

were not adequately presented;
 Supplies were recorded as outright expense instead of Inventory

or Asset account;
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 Charging of SEF and TF transactions amounting to P4.633 million
against the GF; and,
reconciled.
Naga Qualfied  Unreliable balance of Cash in Bank – LCCA amounting to

P53.373 million due to continuous delay in the preparation of
Bank Reconciliation Statements (BRS), huge amounts of book
and bank reconciling items and failure to reconcile SL balances
with that of the controlling accounts;
 Failure to conduct physical inventory; prepare, update and

maintain property cards and ledger cards and non-reconciliation
of the accounting records with property custodian records;
provide depreciation expense to Other Land Improvements
account and non-preparation of comprehensive Lapsing
Schedule of Depreciation Expenses; dispose unserviceable and
obsolete PPE; and properly classify PPE items resulting to
doubtful existence and accuracy of recorded Property, Plant and
Equipment (PPE) of P173.536 million which represents 63.80%
of the agency’s total assets;
 Unreliability and invalidity of the balance of the Construction in

Progress account totaling P34.133 million in the General Fund
due to non-adjustment of completed projects to appropriate
assets accounts and non-maintenance of subsidiary ledgers,
particularly, Construction in Progress Ledger Card (CIPLC) on a
per project basis;
 Unliquidated cash advances and other receivables at year-end

amounting to P35.518 million for which P25.229 million or 71.03%
has been outstanding for more than three (3) years and
unrecoverable aged accounts amounting to P5.358 million from
persons responsible who were already terminated from
government service or no longer connected with the Municipality;
and,
 Existence of negative balances in various liability accounts

Olutanga Qualfied  Failure to conduct a periodic physical inventory of supplies or

property and PPE amounting to P111.740 million as of December
31, 2018 and to reconcile the accounting and property records;
 Stale Checks amounting to P.117 million were not cancelled;
 Unreconciled reciprocal accounts Due from Other Funds and Due

to Other Funds of P1.665 million and P1.695 million, respectively;
and,
 Existence of unidentified balances in the liability accounts

totalling P.476 million as of December 31, 2018.
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Payao Qualfied  Existence of accounts in negative balances amounting to P1.302
million;
 Non-liquidation of Advances to Officers and Employees of P9.020

million, including outstanding balance of over five (5) years
amounting to P2.184 million and non-moving cash advances for
officers and employees that were already dead, resigned, retired
and separated from the municipality;
 Non-reconciliation of Due from Other Funds and Due to Other

Funds of P8.282 million and P7.313 million, respectively or a
variance of P.969 million;
 Inclusion in the PPE accounts of items that were already

destroyed/unserviceable and not found in station during the
physical count amounting to P8.398 million and P.559 million,
respectively;
 Existence of the balance of the Cash in Local Treasury amounting

to P1.355 million,075.05; and,
 Long outstanding Accounts Payable of P1.355 million.
Roseller T. Lim Qualfied  Advances for Payroll and Advances for Officers & Employees
amounting to P.015 million and P8.170 million, respectively,
remained unliquidated as of December 31, 2018 affecting the
timing recognition of expenses;
 Inventories and Property Plant & Equipment amounting to P.216

million and P75.178 million, respectively cannot be relied upon
due to the failure to conduct physical count and reconciliation of
records;
 Accounts Receivable, Loans Receivable, Due from Officers &

Employees and Other Receivables amounting to P.002 million,
P2.669 million, P1.166 million and P.755 million, respectively
remained outstanding from one to 19 years affecting the
existence of the accounts;
 Abnormal balances in Due from Other Funds, Due from Officer &
Employees, Advances to Contractors, Other Receivables,
Accounts Payable, Due to Officers & Employees, Due to GSIS,
Due to NGAs, Due to GOCCs, Due to LGUs, Due to Other Funds
and Guaranty/Security Deposits Payable with an aggregate
amount of P9.464 million affected the accuracy of the accounts;
 Reconciling items in the Bank Reconciliation Statements and

stale checks amounting to P.930 million and P.101 million,
respectively, remained uncorrected or unadjusted in the books of
accounts, affecting the accuracy of the Cash in Bank; and,
 Due from Other Funds and Due to Other Funds accounts cannot
be relied upon due to a discrepancy amounting to P7.106 million.
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Siay Disclaimer  Expenditure items that were capitalized and recorded as PPE
account totaling P11.262 million;
 Inclusion of disposed/transferred assets in the PPE costing

P4.450 million;
 Misclassification of PPE totaling P29.285 million;
 Recognition of road networks totaling P12.700 million with no

specific reference point/location; and,
 Unrecorded due to NGAs amounting to P14.348 million.
Talusan Qualfied  Failure to conduct a periodic physical count of its Property Plant
and Equipment (PPE) amounting to P248.097 million as of
December 31, 2018 and to reconcile the accounting and property
records;
 Presence of dormant reconciling items amounting to P.054 million

and P.026 million in the General and Trust Fund books of
accounts for many years;
 Existence of Other Payables amounting to P.032 million which

has been outstanding in the books for more than two years; and,
 Unreconciled reciprocal accounts Due from Other Funds and Due

to Other Funds of P2.678 million and P.096 million, respectively.
Titay Qualfied  Past due Receivables balance of P33.373 million or 87.64% of

the total receivables, affecting the timing recognition of expenses;
 PPE accounts per GL also showed a discrepancy amounting to

P68.209 million as against the Report of Physical Count of PPE;
and,
 Discrepancies in the balances of accounts of Real Property Tax

(RPT) receivables and Special Education Tax (SET) receivables
amounting to P14.908 million and P13.597 million, respectively.
Tungawan Qualfied  Advances for Officers & Employees amounting to P3.865 million
remained unliquidated as of December 31, 2018 affecting the
timing recognition of expenses;
 Property Plant & Equipment (PPE) was not reconciled with the
Report of Physical Count of PPE (RPCPPE) resulting to a
variance of P.655 million affecting the accuracy, completeness
and existence of the PPE accounts;
 Accounts Receivable and Other Receivables amounting to P.404

million and P2,880.00, respectively remained outstanding from
one to five years affecting the existence of the accounts; and,
 Abnormal balances in Due to BIR, Due to NGAs, Due to LGUs,

Other Payables and Other Deferred Credits with an aggregate
amount of P.639 million affected the accuracy of the accounts.
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Region X – Northern Mindanao

Bukidnon Modified/  Funds transferred to LGUs totaling P672.324 million from
Qualfied calendar years 2012 to 2017 were not liquidated;
 Inventories of P309.604 million are still carried in the books

despite completely distributed;
 Non provision of previous and current years’ depreciation for

agency assets aggregating to P983.067 million; and,
 Completed projects totaling P193.198 million are still recorded in

the books as Construction in Progress (CIP) and not transferred
to the appropriate asset account.
Cities
Malaybalay City Qualified
Valencia City Qualified  “Due to LGUs” under the general fund of the agency in the
aggregate amount of P16.040 million as of November 2018
included some of the latter’ other operating and service income
thereby, understating the revenue account of the city and
exposed the fund for the payment of expenditures, obligations or
purposes not specifically allowed by law;
 Allotted amount for Pre-engineering and Project Monitoring of

the numerous infrastructure projects of the City of Valencia were
obligated without actual expenses incurred and the same were
recorded as payable account with an accumulated amount of
P10.110 million as of November 2018, thus, the accuracy of the
balances of some of the accounts in the General Ledger cannot
be established and may eventually affect the fair presentation of
 Partial compliance of last year’s audit findings on the numerous

book reconciling items, some of them were from prior years, still
were not adjusted in the Books of Accounts as of December 2018.
Municipalities
Baungon Qualified  Due to non-submission of the Property Inventory Report, the

failure to conduct actual physical count, and the non-
reconciliation of property and accounting records, evaluation on
the reliability of the PPE year-end account balance of P87.773
million (net of accumulated depreciation) could not be confirmed
in audit;
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 Construction in Progress Account was over by P8.082 million
compared with project status reports from the Office of the
Municipal Engineer on the on-going and completed projects due
to failure of the Municipal Accounting Office to reclassify those
completed projects to appropriate PPE accounts on the premise
that the former failed to furnish Certificate of Completion to the
latter, thereby casting doubt on the validity of the Construction in
Progress Account.
 Inherited variance aggregating to P1.031 million exists between

the Due to Other Funds and Due from Other Funds (Reciprocal
Accounts) accounts of the Consolidated Financial Statements of
LGU Baungon, thereby casting doubt on the reliability of the asset
and liability accounts.
 Land account of the Municipality of Baungon amounting to P2.380

million as of December 31, 2018 is understated by P4.193 million
due to various unbooked and undervalued land properties;
 Land Properties with book value of P1.050 million were neither

covered by Transfer Certificates of Title (TCT) nor Original
Certificates of Title (OCT) and/or tax declarations under the name
of the Municipality of Baungon, thereby casting doubt on the
validity of the claim of ownership and rights over said properties;
 Loans Receivable account of the Municipality of Baungon

totaling P3.080 million were not backed-up with loan agreements
to support recording of receivable account and right to enforce
collections thereby overstating the receivables account for lack
of right to collect.
 Reconciling items addition to book balance (Stale Checks,

Interests Income, Credit Memos and other reconciling items)
aggregating to P.809 million and reconciling items deduction to
book balance (Debit Memos, Unrecorded Disbursements, and
other reconciling deduction) aggregating to P.147 million
consistently appearing in their monthly Bank Reconciliation
Statements (BRSs) because the management failed to reflect
those reconciling items in their records resulting to net
understatement P.662 million, thereby understating the cash
account;
 Guaranty/Security Deposits Payable has a difference of P.337

million in the Subsidiary and General Ledger Balances, thereby
casting doubt on the accuracy and reliability of the liability
account.
 Due to NGAs amounting to P.096 million cannot be attributed to

any national government agencies and is marked ‘unidentified’ in
the subsidiary ledger of the accounting department, thereby
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casting doubt on the valuation and accuracy of the liability
account; and,
 Subsidiary ledger of the Due to LGU account in the Trust Fund

had an unreconciled balance of P.072 million as compared with
the financial statements and general ledger, thereby casting
doubt on the accuracy and correct valuation of the liability
account.
Cabanglasan Qualified  Property, plant and equipment (PPE) and inventory accounts as
of December 31, 2018 is doubtful due to (a) Ninety eight and
01/100 percent (98.01%) of recorded inventory and PPE
accounts were not included in the conduct of physical count; (b)
the difference between the physical count of PPE amounting to
P1.050 million against accounting records of P2.922 million
showing a difference of P1.864 million; (c) various supplies and
materials were not recorded in an inventory account; d) delayed
submission of the Report on the Physical Count of Property, plant
and equipment (RPCPPE); and, e) Non-maintenance of complete
Property, plant and equipment ledger card (PPELC)/Supplies
Ledger Card (SLC) and absence of property and stock cards;
 Construction in Progress” accounts includes the cost of projects

already completed but not transferred to the appropriate asset
accounts due to inadequate supporting schedules and absence
of a certified report of completion or any sufficient documents
evidencing project completion, thereby rendering the construction
in progress account balances unreliable; and,
 Existence of dormant “Other Receivable” account amounting to

P.208 million that were undocumented casts doubts on its
collectability and validity of the reported balance.
Damulog Qualified  Property, Plant and Equipment (PPE) account totaling P158.135
million cannot be ascertained due to inappropriate and
incomplete count of the subject assets and the failure of the
Municipal Accountant to reconcile the result of the count with the
accounting records, thereby affecting the fair presentation of the
Financial Statements for CY 2018.
Dangcagan Qualified  Completed projects with aggregate book value of P32.617 million
remained to be recorded as Construction in Progress as of
yearend thus corresponding depreciation therein were not
recognized thereby overstating government equity account;
 Four (4) completed core local access road projects costing P

13.217 million were not recognized as assets in the books thereby
resulting to understated PPE;
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Receivable were not recognized thereby understating the RPT
and SEF Receivable accounts amounting to P408.730 million
each, and the corresponding Deferred Income accounts; and,
 Expenditures for the construction of various projects undertaken

using the trust fund amounting to P6.330 million were directly
closed from the corresponding liability account and were not
recognized as Construction in Progress, thereby resulting to
understated assets and liability accounts.
Don Carlos Qualified  Lump sum appropriations were present in the municipality’s
budget under continuing appropriations for development projects
totalling P14.656 million;
 Unreconciled balance of Construction in Progress account

between the Municipality’s General Ledger and its supporting
schedules by a total of P26.091 million as a result of the presence
of lump sum appropriations in the budget of the LGU, hence, the
balance appearing in the financial reports as of December 31,
2018 as P40.671 million under the CIP- Infrastructure Assets
account cannot be ascertained;
 Disposal of its unserviceable properties amounting to P4.650

million were not initiated nor reclassified to “Other Assets”
account, which may not be beneficial to the government in terms
of higher appraisal value for the property, lesser storage cost and
better management of limited storage space, thus, creating doubt
on the year-end balance of its Property Plant and Equipment as
stated in the financial statements;
 Accrued Interest Payable of an agency’s loan was not recognized

at Year-End which resulted to understatement of the account by
a total of P.984 million, thereby casting doubts as to the reliability
and proper disclosure of their Interest Payable Account as of
 Unexpended Local Disaster Risk Reduction and Management

Fund from 2011 to 2013 totalling P2.412 million was not reverted
back to the General Fund.
Impasugong Qualified  PPE accounts as of December 31, 2018 is doubtful due to (a) the
material difference between the physical count of PPE amounting
to P103.320 million against accounting records of P132.622
million, showing a difference of P29.301 million and (b) Only fifty
six percent (56%) of the recorded PPE have been included in the
Physical Count conducted;
 Inventory accounts amounting to P4.112 million as of December

31, 2018 cannot be ascertained, due to the failure to conduct
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physical inventory of supplies that will enable the reconciliation of

the accounting records with the actual existence of the inventory
items;
 “Construction in Progress” accounts includes the cost of projects

amounting to P107.970 million already completed but not
transferred to the appropriate asset accounts due to absence of
a certified report of completion or any sufficient documents
in progress account balances unreliable;
 Completeness of the recorded Property, Plant and Equipment –

Land account were doubtful due to the discrepancies between the
records kept by the Municipal Accounting and the records of the
Municipal Assessor, thereby affecting the reliability of the land
account that was presented in the financial statements; and,
 Loans availed by the LGU from National Housing Authority (NHA)

with a total amount of P3.136 million and an outstanding balance
of P2.195 million were not recorded in the Loans Payable account
of LGU Impasugong, resulting in the understatement of Loans
Payable – Domestic account, Land, and Receivable accounts.
Kadingilan Unqualified
Kalilangan Qualified  The agency failed to submit its financial reports, accounts and
pertinent supporting documents within the prescribed period,
thereby causing undue delay in the examination and audit of
financial transactions;
 Receivable accounts at year end amounting to P5.884 million

cannot be determined because of unliquidated/unsettled special
cash advance for confidential expenses and cash advances for
travelling expenses, amounting to P0.900 million and P0.263
 Dormant or long outstanding and/or unidentified receivables

aging more than ten (10) years amounting to P4.721 million, thus
overstating the Receivable accounts and understating the
Government Equity account in the Statement of Financial
Position as at year end;
 Property, Plant and Equipment (PPE) accounts, net of

accumulated depreciation, aggregating to P262.968 million or
54.69% of the total assets as at December 31, 2018 cannot be
ascertained due to: a) failure to conduct a physical count of all
PPE assets owned by the Municipality and reconcile them in the
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accounting records; b) non–maintenance of complete Property
Acknowledgment Receipts and Property Cards per category of
PPE by the General Services Office; and, c) failure to adopt
uniform procedures, systematic and timely disposal of
unserviceable properties with undetermined value, so as to
generate greater benefits to the government in terms of higher
appraisal value for the property, lesser storage cost and better
management of limited storage space; and,
Accounts Payable and Other Payables amounting to P44.083

million and P6.179 million respectively, were doubtful due to non-
submission of aging of payables as support to annual financial
statement and the existence of long outstanding obligation for
over 2 years amounting to P13.054 million which no claim has
been filed as of December 31, 2018, were not reverted to the
unappropriated surplus.
Kibawe Qualified  Inventories, Property, Plant and Equipment (PPE), and Biological
Assets with a total net book value of P246.041 million could not
be verified due to the absence of the Report of the Physical Count
of Inventories (RPCI) and Report on the Physical Inventory Count
of Property, Plant and Equipment (RPCPPE) as required to be
submitted.
 Failure to establish the Real Property Tax and Special Education

Tax Receivable and Deferred Real Property Tax/Special
Education Tax Income every beginning of the year, thus,
understating the financial statements of the Municipality; and,
 Failure to disclose in the Notes to Financial Statements the

liquidation of the amount of P10.000 million to the Provincial
Government of Bukidnon, a deviation to the guidelines set forth
by the Philippine Public Sector Auditing Standards, thus, affecting
the fair presentation of its financial statement.
Kitaotao Qualified  Cash in Bank accounts recorded in the Subsidiary Ledger in the
total amount of P2.927 million as of December 31, 2017, could
not be validated because the concerned depository banks did not
provide copies of bank statements to the agency informing the
latter as to the agency account standing, which greatly affects
proper management of the municipality cash in bank accounts.;
 Lands in the total amount of P3.107 million could not be

ascertained due to the absence of supporting documents to prove
that such lands were really existing and were owned by the
Municipal Government of Kitaotao, Bukidnon;
 Disposal of its unserviceable properties amounting to P22.975

million were not initiated nor reclassified to “Other Assets”
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account, which may not be beneficial to the government in terms
of higher appraisal value for the property, lesser storage cost and
better management of limited storage space, thus, creating doubt
on the year-end balance of its Property Plant and Equipment as
stated in the financial statements; and,
 Loans Payable amounting to P3.249 million in the subsidiary

ledger is higher by P.649 million with the creditor’s records and
Accrued Interest Payable of an agency’s loan was not recognized
at Year-End which resulted to understatement of the account by
a total of P.128 million thereby casting doubts as to the reliability
and proper disclosure of their Loans and Interest Payable as of
December 31, 2018.
Lantapan Qualified  Property and Equipment accounts and Inventories totaling

established due to the failure of the LGU to conduct physical
inventory and update the required ledger and property cards;
 “Construction in Progress” account on December 31, 2018

includes the cost of projects amounting to P31.921 million already
completed during CY 2018 but not transferred to the appropriate
asset accounts due to lack of any sufficient documents
in progress account balances unreliable; and,
 A difference of P14.596 million exists between the reciprocal

accounts Due from and Due to Other Funds.
Libona Qualified  Long overdue/dormant receivable accounts as part of the LGUs

Current Assets, consisting of Loans Receivable and Due from
NGOs and POs amounting to P.892 million and P4.828 million,
respectively, is not in conformity with the standards thereby
affecting the fair presentation of the Statement of Financial
Position as of December 31, 2018;
 Subsidiary Ledgers for the Receivable accounts totaling P3.411

million were not maintained and updated, hence, verification and
validation on the existence of the receivables cannot be made,
thereby affecting the accuracy, reliability and validity of the
amounts reported in the financial statements as of December 31,
2018;
 Inventory accounts amounting to P6.931 million as of December

31, 2018 cannot be ascertained, due to the failure to conduct
physical inventory of supplies or property that will enable the
reconciliation of the accounting records with the actual existence
of the inventory items; and,
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 Property, Plant and Equipment (PPE) accounts with a total net
book value of P306.002 million could not be ascertained due to
the non- submission of the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) as of December 31,
2018 thereby failing to prove the existence and accuracy of the
reported balance in the Statement of Financial Position.
Malitbog Qualified  Cash in Bank accounts of the Trust Fund totaling P53.148 million
or 32.58% of the year-end balance of Cash and Cash Equivalents
account recorded in the consolidated Financial Statements
cannot be ascertained due to Management’s failure to conduct
Monthly Bank Reconciliation;
 The year-end Bank Reconciliation Statements for General Fund

(GF) and Local Development Fund (LDF) consistently showing
reconciling items consisted of Stale Checks aggregating to P.754
million and Deposits in Transit totalling P.086 million because
management overlooked to institute action appropriate thereof,
thus, casting doubt on the validity and reliability of the cash in
bank accounts;
 Subsidiary ledgers were not maintained by the Accounting

Department to substantiate Assets accounts totaling to P661.037
million and Liabilities accounts totaling to P290.147 million,
thereby casting doubt on the reliability and validity of financial
records;
 Depreciable Property, Plant and Equipment (PPE) totalling

P186.947 million were not subjected with periodic recognition of
depreciation, thereby overstating assets and net income
accounts;
 Cash advances aggregating to P.844 million remain outstanding

in the accounting records as of December 31, 2018, thereby not
only exposing government funds to risks and understating the
expense account.
 Book variance aggregating to P.418 million exists between the

Due to Other Funds and Due from Other Funds accounts (a
reciprocal accounts) in the Consolidated Financial Statements of
LGU Malitbog, thereby casting doubt on the reliability of the asset
and liability accounts. The Real Property Tax Receivable and the
Deferred Real Property Tax accounts were both overstated by
P.702 million due to erroneous accounting entries, thereby
casting doubt on the reliability and validity of the accounts
balances presented in Agency’s year-end financial statements;
 Failure to set up Special Education Tax Receivable at the

beginning of year (January 2018) thereby understating the
receivable asset account by P1.194 million;
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 Biological Assets - Breeding Stocks Account of P.325 million

defers with the total value of P.182 million recorded in the Report
on Physical Count of Breeding Stocks, thereby resulting in a
variance of P.143 million which casts doubt on the existence of
the biological assets and validity of the reported year-end account
balance;
 Land account is understated by P.942 million due to various

unbooked and undervalued land properties;
 Land with book value of P.400 million was erroneously recorded

as Investment Property thereby casting doubt on the proper
classification of property, plant and equipment;
 Land Properties costing P8.926 million were not covered by

Transfer Certificates of Title (TCT) or Original Certificates of Title
(OCT) nor any tax declarations for some land properties under
the name of the Municipality of Malitbog, thereby ownership of
those land properties were not established and,
 Two (2) completed Philippine Rural Development Projects

amounting to P81.577 million remained in the Construction in
Progress account as of year-end in spite of the certificate of
turnover of the Department of Agriculture.
Manolo Fortich Qualified  Failure to recognize in its appropriate Property, Plant and
Equipment (PPE) accounts the cost of the completed projects in
the Trust Fund aggregating to P35.605 million. Correspondingly,
the balances of these completed projects totaling P33.321 million
in the Due to NGA and Due to LGU accounts remained
unadjusted despite liquidations made to the Source Agencies;
 Loan Payable account balance as of December 31, 2018

amounting to P87.649 million was not fairly presented in the
Statement of Financial Position due to advance recording of the
unreleased portion of the loan from Landbank of the Philippines
amounting to P11.312 million; PRDP Subprojects amounting to
P17.180 million was erroneously recorded as Due from Other
Funds in the General Fund (GF) books and Due to Other Funds
in the Trust Fund (TF) books instead of “Transfers for Project
Equity Share/LGU Counterpart” and “Trust Liabilities” accounts in
the books of GF and TF respectively, thus, rendering the
accuracy and reliability of reported balances in the accounting
books doubtful; and,
 Various accounts appearing in the Statement of Financial

Position as of December 31, 2018 were not accurately presented
due to the failure to effect adjustments of the completed PRDP
Subproject for the Rehabilitation and Concreting of Aurora- Sto.
Nino FMR amounting to P30.875 million, thereby affecting the
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fairness of the presentation of the financial statements. Food

supplies intended for the 6th round of DSWD Supplemental
 Feeding Program already consumed and fed to day care pupils

remained as inventories in the general ledger under Food
Supplies for Distribution account as of December 31, 2018, thus
overstating the inventory account and government equity by
P3.027 million affecting the fair presentation of the financial
statements and proof of distribution to the end users (Day Care
Workers) were not made part of the supporting documents for the
reversal of the inventory account, rendering the reversal entry
inadequately supported.
Maramag Qualfied  Failure to record previous years Real Property Tax Receivable
and Deferred Real Property Tax Income, thus, understating the
financial statements of the Municipality by more or less P30.710
million;
 Failure to recorded P9.248 million in its Other Receivables

Account in connection to the Housing Project of LGU Maramag;
 Failure to properly present as Non-Current Liabilities – Financial

Liabilities, the non-current portion of its long-term debt secured
from lending banks/agencies amounting to P79.074 million.
Pangantucan Qualified  Receivable accounts at year end amounting to P50.148 Million

cannot be determined because of P0.8 Million
unliquidated/unsettled special cash advance, P16.304 Million
dormant or long outstanding fund transfers and other receivables
aging one (1) year to more than ten (10) years, and P33.044
Million intra-agency receivables not eliminated in full in the
consolidated financial statements, contrary to COA Circular Nos.
97-002 and 2016-005, Presidential Decree No. 1445 and PPSAS
Manual, thus overstating the Receivable accounts and
understating the Government Equity account in the Statement of
Financial Position as at year end; and,
Accounts Payable, Due to Officers and Employees, Due to LGUs

and Other Payables accounts amounting to P.112 million, P2.044
million, P22.339 million and P18.749 million, respectively, were
doubtful due to failure to present documents to prove the
existence of obligations.
Quezon Qualified  Cash in Bank account balances as of December 31, 2018 is

overstated by P25.632 million due to improper/erroneous
recording of reconciling items and improper use of cash account,
rendering the accuracy and presentation of the Cash in Bank
account balance as of December 31, 2018 amounting to
P165.848 million unreliable;
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 Collections in CY2018 amounting to P4.023 million were not
reported on the period they were actually collected, due to failure
to closely monitor the collections and remittances and failure to
enforce the submission of the collectors’ individual Report of
Accountability for Accountable Forms, thereby understating the
Cash, Revenue and Liability accounts presented in the financial
statements as of December 31, 2018;

ascertained due to: a) failure to reconcile the difference of
P230.682 million between Report of Physical Count of PPE
(RPCPPE) and accounting records; b) failure to dispose and drop
from records unserviceable properties totaling P15.464 million; c)
failure to establish good supply and property management
procedures resulting to accumulated missing properties of
P13.777 million; and d) failure to reclassify the subsidiary ledgers
(SL) initially recorded as “unreconciled beginning balances” to
appropriate SL accounts amounting to P120.812 million, thus
affecting the fair presentation of PPE, Government Equity and
Depreciation Expenses accounts reflected in the financial
statements as at year end;
 Liability accounts with an aggregate balance of P108.574 million

as of year-end could not be ascertained due to failure to present
documents to prove the existence of obligations and absence of
detailed schedule of individual subsidiary ledger and aging of
payables as support to annual financial statements;

cannot be determined because of P0.808 million
unliquidated/unsettled cash advances aging three (3) months to

more than 10 years, P4.967 million dormant or long outstanding
fund transfers and other receivables aging nine (9) months to
more than 10 years, P1.120 million unidentified and/or
unreconciled beginning balances occurring from prior years and
P0.120 million intra-agency receivables not eliminated in full in
the consolidated financial statements, thus overstating the
Receivable accounts and understating the Government Equity
account in the Statement of Financial Position.
San Fernando Qualified  Other Receivables as of December 31, 2018 remained to be

unaccounted, thus casting doubt on the validity and existence of
the reported balance;
 Accounts Payable representing the liabilities of LGU to various

suppliers and employees in the aggregate amount of P9.219
million could not be established due to the absence of sufficient
364
supporting documents to evidence the actual incurrence of
obligations;and,
 Failure to submit disbursements vouchers and payroll reports with

a total amount of P5.706 million, including various journal entry
vouchers, covering the period January to December 2018 .
Sumilao Qualfied  Cash in Bank account balances as of December 31, 2018 is

overstated by P25.632 million due to improper/erroneous
recording of reconciling items and improper use of cash account,
rendering the accuracy and presentation of the Cash in Bank
account balance as of December 31, 2018 amounting to
P165.848 million unreliable;
 Collections in CY2018 amounting to P4.023 million were not

reported on the period they were actually collected, due to failure
to closely monitor the collections and remittances and failure to
enforce the submission of the collectors’ individual Report of
Accountability for Accountable Forms, contrary to NGAS Manual
and Local Treasury Operations Manual, thereby understating the
Cash, Revenue and Liability accounts presented in the financial
statements as of December 31, 2018;

ascertained due to: a) failure to reconcile the difference of
P230.682 million between Report of Physical Count of PPE
(RPCPPE) and accounting records; b) failure to dispose and drop
from records unserviceable properties totaling P15.464 million; c)
failure to establish good supply and property management
procedures resulting to accumulated missing properties of
P13.777 million; and d) failure to reclassify the subsidiary ledgers
(SL) initially recorded as “unreconciled beginning balances” to
appropriate SL accounts amounting to P120.812 million, thus
affecting the fair presentation of PPE, Government Equity and
Depreciation Expenses accounts reflected in the financial
statements as at year end;
 Liability accounts with an aggregate balance of P108.574 million

as of year-end could not be ascertained due to failure to present
documents to prove the existence of obligations and absence of
detailed schedule of individual subsidiary ledger and aging of
payables as support to annual financial statements; and,

cannot be determined because of P0.808 million
unliquidated/unsettled cash advances aging three (3) months to
more than 10 years, P4.967 million dormant or long outstanding
fund transfers and other receivables aging nine (9) months to
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more than 10 years, P1.12 million unidentified and/or

unreconciled beginning balances occurring from prior years and
P0.12 million intra-agency receivables not eliminated in full in the
consolidated financial statements.
Talakag Qualified  Non-submission of the Property Inventory Report, the failure to

conduct actual physical count, and the non-reconciliation of
property and accounting records, evaluation on the reliability of
the PPE year-end account balance of P194.229 million (net of
accumulated depreciation) could not be confirmed in audit,
 Assumed ownership on various municipally initiated and finance

barangay facilities aggregating to P 6.624 million and recorded
the same as among the component cost of its Office Building
Account though custodial responsibility and control of economic
benefit of such facilities were with barangay units being the end-
user, thus potentially overstating its PPE account;
 Receivables totaling P1.125 million were from deceased

and/separated employees and job orders of the Municipality;
 Other Payables totaling P1.193 million lacks any contract or

agreement or any proof supporting the burden to pay and
recognize the liability on hand.;
 Variance of P.554 million between the Due to Other Funds and

Due from Other Funds (Reciprocal Accounts) since the adoption
Electronic -National government Accounting System (e-NGAS)
remained existing in the year-end (as of December 31, 2018)
financial statements of LGU Talakag, thereby casting doubt on
the reliability of asset and liability accounts.
 Erroneous recording in the books of accounts under account

“Work/Zoo Animals and Breeding Stocks Assets” the amount of
P.534 million as the cost of farm animals received from the
Department of Agriculture for dispersal thru the Municipal
Agriculture Office to qualified beneficiaries within municipal
jurisdiction, thereby casting doubt on the reliability of the recorded
asset account; and,
 SEA K receivables totaling P.989 million under the Due from

NGOs/POs account for livelihood projects granted as loan to
qualified individual were not supported with any contract or
agreement to establish validity of receivable and rights to
collection thereof.
366
Camiguin Qualified  Non-reconciliation of General Ledger (GL) with bank statements
and cashbook maintained by the Provincial Treasurer casts doubt
on the validity and reliability of the consolidated balance of Cash
in Bank (CIB) account of P213.522 million;
 Due from NGAs, Due from GOCCs, Due from LGUs, and Due
from NGOs/POs accounts under the GENERAL FUND totaling
P7.420 million as of December 31, 2018 remained uncollected,
long outstanding and non-moving;
 Road Network account as at year-end under the General Fund

totaling P218.604 million, could not be ascertained due to the
failure of the Provincial Government to keep and maintain a Local
Road Inventory and Road Map, and a Report on the Physical
Count of the Road Network System, and reconcile the same with
the Registry of Public Infrastructures;
 Due to NGAs account amounting to P125.829 million as of

December 31, 2018 included non-moving and long outstanding
accounts totaling P22.697 million; and,
 Bail Bonds Payable account, totaling P1.386 million as of August

31, 2018, was erroneously recorded and included under the
Guaranty Deposits Payable account during the conversion of
account balances in view of the implementation of the enhanced
eNGAS/eBudget Version 2.0.
Municipalities
Catarman Unqualified
Mambajao Qualified  Non-preparation of property cards and failure to conduct an

annual physical inventory count, rendered the year-end balance
of the Property, Plant and Equipment account totaling P178.611
million unreliable;
Cash in Bank accounts amounting to P75.902 million is doubtful

due to unreconciled amount of P6.047 million as a result of non-
reconciliation of the General Ledger maintained by the Municipal
Accountant with the Cashbook maintained by the Municipal
Treasurer;
 Advances for Operating Expenses, Advances for Payroll,

Advances to Special Disbursement Officers and Advances to
Officers and Employees accounts with an aggregate balance of
P.545 million is not supported by Subsidiary Ledger due to non-
preparation of the same, thus considered doubtful.
367
 Due from Other Funds and Due to Other Funds, for all funds in
the amount of P1.241 million and P1.421 million, respectively,
showed a total difference of P.180million due to unadjusted
reconciling items, thereby casting doubts on the correctness of
balances of said accounts.
Guinsiliban Qualified  Non-recognition of depreciation expense as observed in the

previous audit year on depreciable assets with an updated
accumulated amount of P20.685 million and the recognition of the
Land Asset Account totaling P1.049 million in books even when
such lands are bereft of TCTs and/or OCTs resulting to
unreliability of the Asset account and overstating the Net Income
and Government Equity.
Mahinog Unqualified
Sagay Qualified  Asset accounts totaling P112.087 million are doubtful due to
properties still recorded under Construction in Progress in the
amount of P29.996 million, thereby understating the proper
Property, Plant and Equipment Account, the corresponding
depreciation expense and overstatement of the Net Income; and,
 Unreconciled Road Network in the amount of P10.488 million and

unverified Work/Zoo Animals amounting to P.330 million renders
the asset balances unreliable.
Lanao del Norte Qualfied  Drugs and Medicines Inventory and Medical, Dental and
Laboratory Supplies Inventory accounts totaling P97.322 million
are unreliable;
 Deficiencies noted in Advances for Operating Expenses and

Advances to Officers and Employees accounts totaling P19.168
million resulted to misstatement of asset and expense accounts;
 Accounts Payable account to Prior Years Adjustment account

amounting to P169.767 million without supporting
documentations resulted to its unreliability; and,
 Non-recording of collections of receipts in the Sales Revenue

Account or Other Business Income Account understated the said
accounts by the aggregate amount of P1.456 million.
City
Iligan City Qualified  Due to the effects of the noted deficiencies on the unreconciled
balances of Property, Plant and Equipment with a difference
amounting to P324.351 million between the books and inventory
reports,
368
 Unliquidated cash advances and Due from NGOs/POs
 Uncollected outstanding loans receivables amounting to P7.051

million.
Municipalities
Bacolod Qualified  Due to unreliability of Property, Plant and Equipment account

amounting to P87.662 million attributable to failure to conduct
complete physical inventory and absence of Report on the
non-reconciliation of records.
Baloi Qualified  Financial Statements are not free of material misstatement/s and
were not prepared in accordance with applicable laws, rules and
regulations and not in conformity with generally accepted state
accounting principles because the agency failed to submit the
bank reconciliation statement on time, failed to conduct physical
inventory of government properties, and other deficiencies noted
in the audit.
Baroy Qualified  Cash in Bank in the books of accounts of P41.605 million are
unreliable due the non-submission of Bank Reconciliation
Statements for depository accounts together with its supporting
documents.
Kapatagan Qualified  Cash advances totaling P6.645 million remained unliquidated as

of December 31, 2018 due to the failure of the management to
strictly enforce the existing rules and regulations on the grant,
utilization, and liquidation of cash advances and negative
balances due to over-collection/deduction of refund of cash
advances amounting to P.027 million were reported as part of the
‘Advances to Officers and Employees’ account, thereby
understating the said asset account;
 Adjusting entries pertaining to book reconciling items amounting

to P.302 million of total debits and P2.734 million of total credits
were not recognized in the books, hence, affecting the accuracy
and reliability of the Cash in Bank balance due to reporting of
unadjusted book balances and misstatement of affected
accounts;
 Forty-five (45) checks amounting to P.294 million were already

over six (6) months from the date of issue, thus, already
considered stale checks as of December 31, 2018;
369

P405.021 million did not reconcile with the balance per Report of
Physical Count of PPE (RPCPPE) amounting to P11.039 million
or a difference of P390.104 million due to the failure of the
Accounting and Property (GSO) Units to regularly reconcile their
records, and the failure to include other PPE accounts in the
annual physical count.
Kauswagan Qualified  Property, Plant and Equipment account balance of P217.70

the unreconciled accounting records;
 Government properties worth P217.270 million are exposed to

risks due to non-compliance with “Property Insurance Law” or
Republic Act No. 6556 dated September 1, 1951 as amended by
PD No. 245 dated July 13, 1973;
 Delayed submission of the Bank Reconciliation Statements of the

Municipality on a monthly basis as required under item 3.2 of
COA Circular No. 96-011 dated October 2, 1996, thus creating
doubts as to the accuracy of the balances of the Cash in Bank
Accounts reported in the financial statements amounting to
P37M;
 Cash advances of P6.578 million were not liquidated within the

prescribed period, in violation of COA Circular No. 97-002 dated
February 10, 1997 and Section 89 of PD 1445 thus, overstated
the asset accounts and understated the expense account;
 Copies of contracts totaling to P19.313 million were delayed

submitted contrary to COA Circular No. 2009-001 dated February
12, 2009, causing undue delay in the post audit of transactions;
 Lot where the three PAMANA infrastructure projects were

constructed is a privately-owned property;
 Disbursements of P1.910 million from the DA-Fund were utilized

without supporting accomplishment reports; and,
 Payments under contract of services / job orders were without

proper documentation as to urgently needed in various programs
and projects resulting to incurring an additional cost of P15.764
million contrary to Section 4((f) of P.D. 1445.
Kolambugan Qualified  Accuracy and correctness of cash in bank account amounting to

P116 Million cannot be ascertained due to delay in the
submission of Bank Reconciliation Statements in violation of Sec.
74 0 of PD 1445 and COA Cir. No.92-125A dated March 4,
1992.
370

P177.113 million cannot be ascertained due to failure of agency
to conduct physical inventory in violation of Section 2 of P.D. 1445
thereby affecting the reliability of the account;
 Loan Receivable account amounting to P.303 million have been

outstanding for more than five years in the books contrary to
Section 111 of P.D. 1445 and COA Circular 2016-005, thus,
resulting to unreliable reporting of financial statements; and,
 Due to NGAS account amounting to P27.074 million representing

fund transfers from different National Government Agencies
(NGA’s) is misstated due to various lapses including an
erroneous entry amounting to P1.426 million which is contrary to
Section 111 of P.D. 1445,thereby, resulting to unreliable financial
statements.
Lala Qualified  Inventories and Investment Property and Property Plant and
Equipment account valued at P372.029 million remained
unverified due to absence of Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) and failure to conduct
complete physical inventory.
Linamon Qualified  Property, Plant and Equipment (PPE) account balances are
carried in the statement of financial position at P74.762 million is
unreliable due to failure to undertake reconciliation between
accounting and property records;
 Cash in bank balance in the total amount of P49.492 million as of

December 31, 2018 was unreliable since bank reconciliation
statements for its nine (9) bank accounts were not submitted to
the Audit Team within the prescribed period.
Magsaysay Qualified  Accuracy and correctness of cash in bank account amounting to

P10.824 million cannot be ascertained due to non-submission of
eleven out of fourteen Bank Reconciliation Statements ,hence, a
violation of Sec. 74 PD 1445 affecting the presentation of the
financial position of the agency;
 Unliquidated cash advances amounting to P1.246 million,

multiple cash advances and other deficiencies in granting and
liquidation of cash advances is contrary to COA Circular No. 97-
002, thus, there could be risk of possible misuse or
misappropriation of funds and misstatement of the affected
accounts in the financial statements; and,

P20.981 million is unreliable due to continued failure of agency to
conduct physical inventory, maintain property ledger cards and
property cards contrary to Section 2 of P.D. 1445 thereby
affecting the reliability and accuracy of the financial statements.
371
Maigo Qualified  Due to undeposited collections from Maigo Water Utilities of
P3.601 million and unreported collections of P.767million;
 Unliquidated cash advances of P5.226 million; and,
 Absence of Report on the Physical Count of Property, Plant and

Equipment (RPCPPE) valued at P99.236 million.
Matungao Qualified  Property, Plant and Equipment account balance of P58 million as
of December 31, 2018 cannot be ascertained due to the failure of
the auditee to conduct periodic physical inventory taking;
 Cash in bank account in the total amount of P25.441 million

cannot be ascertained due to non-preparation of Bank
Reconciliation Statement for all the funds;
 Failure to establish collectible Real Property Tax and Special

Education Fund for the CY 2016 - 2018 due to the failure of the
management to develop a comprehensive program to intensify
tax collection;
 Disbursement Vouchers and its supporting documents of all

general fund, trust fund and special education fund covering the
period January to December 2018 were not submitted within the
prescribed period,
 Copies of contracts totaling to P50.999 million were not

submitted; and,
 Shares from National Wealth in the amount of P.862 million was

disbursed without adhering to the guidelines prescribed under
Section 2.4 of DILG-DOE Circular No. 98-01.
Munai Qualified  Due to unreliability of the cash in bank accounts amounting to

P2.715 million due to non-submission of bank reconciliation
statements; and,
 Property, Plant and Equipment valued at P77.111 million is

unreliable due to absence of Report on the Physical Count of
Nunungan Qualified  Cash in Bank- Local Currency Account amounting to P62.773

million could not be validated due to failure to submit the Bank
Reconciliation Statements and its supporting documents; and,
 Property Plant and Equipment account in the amount of

P180.969 million which could not be ascertained due to failure to
conduct complete physical inventory, non-submission of the
RPCPPE and non-maintenance of property ledger cards.
372
Pantao Ragat Qualified  The municipality failed to submit bank reconciliation statements,
municipality expenditures’ were paid out of the cash advance,
failed to conduct physical inventory of government properties,
and deficiencies noted in the audit.
Pantar Qualified  Municipality’s expenditures amounting to P75.850 million were

paid out of the cash advance of the Disbursing Officer; and,
 Property, Plant and Equipment account balance of P2.522 million

as of December 31, 2018 cannot be ascertained due to the failure
of the auditee to conduct periodic physical inventory taking; and
 Due from Officers and Employees account amounting to P.738

million was the accountability of the former Municipal Treasurer
who died last January 1998 and had been written off without
proper authority, thus misrepresenting the cash, receivable and
operating expense accounts;
 Failure to deposit her collections intact or at least once a week or

as soon as the collections reach P10,000.00 due to risk to travel
to depository bank;

prescribed period;
 Bank Reconciliation Statement for trust funds were not prepared

because bank statements were sent thru post-office
arrangement, thus, the accuracy of the Cash in Bank balance for
the trust account amounting to P.055 million cannot be
ascertained;

tax collection and the vacancy of the position for Municipal
Assessor; and,
 Non-maintenance of Subsidiary Ledgers (SL) for inventory

accounts.
Poona Piagapo Qualified  Property, Plant and Equipment account balance of P186 million
as of December 31, 2018 cannot be ascertained due to the failure
of the auditee to conduct periodic physical inventory taking;
 Municipality’s expenditures amounting to P75.850 million were

paid out of the cash advance of the Disbursing Officer designate,
due to unstable political crisis in the Municipality, in violation to
provisions of COA Circular No. 97-002.
373
 Delay in the remittances of collections of the Municipal Treasurer
for almost ten (10) month;

prescribed period, contrary to Section 122 of P.D. 1445 and COA
Circular No. 95-006, thus, preventing the conduct of timely audit
and prejudices the interest of the Local Government Unit and
defeated the purpose of providing important financial information
to the users of the financial statements. The management failed
to receive the Land Bank of the Philippines (LBP) bank
statements due to post-office arrangement, thus,
 Cash in bank account for the trust fund accounts cannot be

ascertained due to non-preparation of Bank Reconciliation.

tax collection and the vacancy of the position for Municipal
Assessor; and,
 Non-maintenance of Subsidiary Ledgers (SL) for inventory

accounts.
Salvador Qualified  Inventories and Investment Property and Property Plant and
Sapad Qualified  Cash in Bank accounts amounting to P18.282 million as of

December 31, 2018 is unreliable as to the fairness of the
presentation of the financial statementsdue to unable to prepare
and submit monthly bank reconciliation; and,
 Inventories and Investment Property and Property Plant and

Sultan Naga Qualified  Cash in Bank-Local Currency in the amount of P42.028 million
Dimaporo 791 for CY 2018 cannot be verified and ascertained due to the
failure of the Municipal Accountant Designate to prepare and
submit the Bank Reconciliation Statements for CY 2018;
 Property, Plant and Equipment account balance in the amount

P66.596 million for CY 2018 cannot be ascertained due to the
374
failure of the General Servicer Officer to conduct periodic physical
inventory taking for CY 2018 and maintain updated records on
inventory and property; and,
 Cost of construction of several infrastructure projects in the total

amount of P49.104 million funded from National Government
Agencies were recorded as expenses.
Tagoloan Qualified  Cash in Bank cannot be ascertained and verified failure of the
Municipality to prepare and submit monthly Bank Reconciliation
Statements; and,
 Unable to submit the reports of their transactions such as

Disbursement Vouchers; Report of Collections and Deposits;
Report of Disbursements; Report of Checks Issued; Report of
Accountability of Accountable Forms; Report on Physical Count
of Property, Plant, and Equipment; Report on Physical Count on
Inventories; Monthly Trial Balances; and Quarterly Financial
Statements;
 Failure of the Municipality to submit Journal Entry Vouchers in the

disbursements, thus, reliability, accuracy, and completeness of
income and expense accounts could not be established; and,
 Non-maintenance of Subsidiary Ledgers (SL) for inventory and

property accounts, thus, the reliability, accuracy, and
completeness of such controlling accounts could not be
reconciled and verified.
Tangcal Qualified  Cash in bank account amounting to P8.979 million cannot be

ascertained due to non-submission of Bank Reconciliation
Statements;

P151.768 million cannot be ascertained due to failure of agency
to conduct physical inventory; and,
 Receivable and Payable accounts totaling P2.789 million

remained dormant.
Tubod Qualified  Property, Plant and Equipment account balance amounting to

P222.712 million could not be ascertained or relied upon since it
was not supported by physical inventory report,
 Other Maintenance and Operating Expenses amounting to

P1.518 million is unreliable since it pertains to expenses like
honoraria, traveling expenses, office supplies expenses,
representation expenses, and others; and,
 Fuel, Oil and Lubricants Expenses totaling P2.643 million cannot

be ascertained due to failure of the General Services Office to
prepare the Monthly Report of Fuel Consumption.
375
Misamis Modified/  Inventories amounting to P46.5 million remained dormant for two
Occidental Qualfied years to over fifteen years;
 Property, Plant and Equipment accounts amounting P3.5 billion

could still not be ascertained and relied upon due to the failure of
the accounting and General Services Office (GSO) to reconcile
their records after inventory taking; and,
 Receivables amounting P24.9 million which remained dormant

for ten years or over resulted in the overstatement of agency
assets and government equity due to inclusion of accounts with
doubtful existence and collectability.
Cities:
Oroquieta City Qualfied  Inventory Accounts with balance totaling P16.763 million most of
which had already been consumed are still carried in the books
due to the failure of the offices concerned to keep adequate
records of its issuance in violation of Section 375 (b) of the Local
Government Code of the Philippines and Sec 114. Vol. I of the
New Government Accounting System Manual; and,
 Physical count of Property, Plant and Equipment (PPE) accounts

totaling P1.225 billion was not conducted.
Ozamiz City Qualfied  Properties and equipment assigned and situated in the different
departments and offices of the Agency were not properly labelled
and identified, thus weakening internal control on property
accountability and making physical inventory taking difficult;
 Failure to exercise legal and civil remedies and developed other

feasible strategies to enhance collections of delinquent taxes
from taxpayers; and,
 Special Education Funds totalling P31.249 million were placed

under “Time Deposit” investments.
Tangub City Qualfied  Failure to employ and implement sound internal controls in the
management of its property, plant and equipment (PPE)
amounting to P839.425 million thus, existence, accuracy, proper
presentation and valuation, serviceability and good custodianship
of the PPE accounts could not be ascertained.
 Inventory accounts are unreliable for lack of actual conduct of

physical inventory and non-preparation of inventory reports which
will corroborate the reported balance of P78.741 million; and,
 Dormant receivable accounts/unliquidated cash advances

totaling P1.575 million whose possibility of collection is nil, remain
376
in the books of the city for more than ten (10) years, thereby
affecting the reliability and fair presentation of accounts in the
Municipalities:
Aloran Qualified  Property, Plant and Equipment account amounting P155.743

million could not be validated due to non-submission of the Report
and non-maintenance of Stock/Property Cards and
Supplies/Property and Equipment Ledger Cards.
Baliangao Qualified  Failure to conduct physical count and absence of Local Road
Inventory and Road Map for Road Networks, thus the existence,
validity and accuracy of the Property, Plant and Equipment (PPE)
and Biological Asset account with book value of P88.334 million
and P.106 million, respectively, could not be ascertained;
 Unreconciled Cash-in-Bank balances per Ledger and per

Cashbook with noted difference of P3.549 million, thereby casting
doubts on the veracity of the reported balance of Cash in Bank –
LCCA account; and,
 Unliquidated cash advances totaling P.622 million, thus,

understating recorded expenses in the year they were incurred.
Bonifacio Qualified  Failure to conduct physical count and absence of Local Road
account with book value of P390.664 million could not be
ascertained; and,

LCCA account; and the use of the cash basis method in
recognizing revenue from waterworks system and stall rentals,
thus resulted to unrecorded receivables of at least P.824 million.
Calamba Qualified  Property, Plant and Equipment account amounting P155.743

million could not be validated due to non-submission of the Report
and non-maintenance of Stock/Property Cards and
Supplies/Property and Equipment Ledger Cards and failure to
secure Transfer Certificate of Title (TCT) and effect revaluation
on its land properties contrary to the Asset Recognition Criteria
and Philippine Public Sector Accounting Standards (PPSAS) No.
17, thereby casting doubts as to its recognition as an asset and
possibly understating said account and government equity by
P14.345 million.
377
Clarin Qualified  Failure to conduct physical count and absence of Local Road
and Biological Asset account with book value of P88.334 million
and P.106 million, respectively, could not be ascertained;

LCCA account; and,
 Unliquidated cash advances totaling P.622 million, thus

understating recorded expenses in the year they were incurred.
Concepcion Qualified  Due to unreconciled and unliquidated fund transfers and

unreconciled reciprocal accounts
Don Victoriano Qualified  Due to delayed preparation of Bank Reconciliation Statements,

Chiongbian thereby casting doubts on the veracity of the Cash in Bank –
LCCA account totaling P149.654 million;
 Unliquidated cash advances totaling P6.864 million, thus

understating recorded expenses in the year they were incurred;
and,
 Erroneous entries committed that affected the accuracy of the

balances of Waterworks System Fees, Rent Income and Rent
Expenses accounts.
Jimenez Modified/  Property, Plant and Equipment (PPE) accounts with net book
Qualfied value of P279.044 million representing 72.87% of the LGU’s total
assets could not be relied upon due to (a) non-submission of the
Report of the Physical Count of PPE (RPCPPE) and (b) the failure
of the General Services Office to maintain property cards (PCs)
and the Accounting Office to maintain Property, Plant and
Equipment Ledger Cards (PPELC) for each class of PPE,
contrary to Sections 114 (Volume 1) and 45 (Volume II) of Manual
on NGAS for LGUs
Lopez Jaena Unqualified
Panaon Qualified Property, Plant and Equipment and Inventory Accounts in the
amount of P202.172 million and P.780 million, respectively, could
not be ascertained, due to non-conduct of actual physical count
by the duly designated Inventory Committee, non-reconciliation
of accounting and property records, in violation of pertinent
provisions of Section 2 of PD 1445, thereby creating doubt as to
the propriety, book balance of the Property, Plant and Equipment
and Inventories Accounts.
378
Plaridel Qualified  PPE accounts which totaled P228.708 million as of December 31,
2018 remained doubtful due to the failure of management to
submit the physical inventory reports and reconcile the records of
the Supply Office and the Accounting Office.
Sapang Dalaga Qualified  Cash in Bank – LCCA account amounting to P29.703 million as
of December 31, 2018 remained doubtful due to the non-
submission of Bank Reconciliation Statements (BRS) in violation
of COA Circular No. 96-011 dated October 2, 1996; and,
 PPE accounts which totaled P123.802 million as of December 31,

2018 remained doubtful due to the failure of management to
submit the physical inventory reports and reconcile the records of
the Supply Office and the Accounting Office.
Sinacaban Qualified  Due to the absence of Report on the Physical Count of Property,
Plant and Equipment, lack of complete and updated PPE ledger
cards, non-depreciation of some properties, absence of Local
Road Inventory and Road Map for Road Networks, non-
maintenance of subsidiary records for fund transfers from NGAs
and Other LGUs, non-adherence to accrual accounting in the
operation of the Municipality Water System thereby the accuracy,
reliability, validity, and existence of the municipality’s assets,
liabilities, and income cannot be ascertained.
Tudela Qualified  Due to absence of Local Road Inventory and Road Map for Road
Networks, untitled Land properties, dormant OFW loan
assistance, dormant Accounts Payable accounts, and unreliable
Rent Income account due to absence of Lease Contracts thereby
the accuracy, reliability, validity, and existence of municipality’s
assets, liabilities, and equity cannot be ascertained.
Misamis Oriental Qualified  Cash in Bank of P 1.248 billion could not be established due to
absence of Bank Reconciliation Statements for 43 bank accounts
and subsidiary leadger for each account;
 Road assets with aggregate costs of P658.616 million could not

be ascertained due to absence of physical count, Local Road
Network Ledger Card and Local Road Network Property Card.
The cost also included maintenance expenses of not lesser than
P109.847 million. There was also overlapping of projects listed in
the Report of Local Road Network;
 Accounts Receivable totaling P188.707 million of MisOrTel which

represents 99% of the total Accounts Receivable was not
provided impairment loss despite collectibles of P188.707 million
from disconnected accounts. The omission gave wrong
information regarding the status of the accounts; the same quality
of information could be gleaned because of unreconciled records
that showed a difference of P9.731 million;
379
 Purchases of supplies and materials were directly expensed

contrary to the Standard which required the agency to adopt the
perpetual inventory method. Also, the existence and accuracy of
the reported balances of the inventories totaling P15.378 million
could not be ascertained due to absence physical count, ledger
cards and stock cards from which the accuracy of the balances
could be verified. In addition, of the total P15.378 million
inventory, P12.235 million or 77-per cent of the total inventory
accounts was non-moving balance of prior year/s; and,
 Weighted average method of costing of inventory as prescribed

under Philippine Application Guidance (PAG) 2 of the Philippine
Public Sector Accounting Standard (PPSAS) 12 was not adopted
in the costing of Accountable Forms, Plates and Stickers
inventory.
Cities
Cagayan de Oro Qualified  Advances for Operating Expense and to Officers and Employees
in the total amount of P293.874 million aging 31 days to more
than one year remained unliquidated as of December 31, 2018,
thereby affecting the fair presentation of the corresponding
expense accounts in the financial statements;
 Failure to recognize an Allowance for Impairment Losses on the

Receivable accounts totaling P1.797 million while the book
balance of Accumulated Depreciation amounting to P427.844
million as at 31 December 2018 was not fairly presented due to
non-recognition of depreciation of some items in Combined book
balance of cash account as of November 30, 2018 amounting to
P1.495 billion did not reconcile with the combined cash book
balance of P1.405 billion having a variance of P90 billion, hence,
the accuracy of the book balance of cash account presented in
the financial statement could not be validated.
 Combined book balance of cash account as of November 30,

2018 amounting to P1.495 billion did not reconcile with the
combined cash book balance of P1.405 billion having a variance
of P90 billion, hence, the accuracy of the book balance of cash
account presented in the financial statement could not be
validated.
El Salvador City Qualified  Failure to set up and maintain subsidiary ledger for all
accountable officers thus reconciliation of accountability cannot
be made;
 Due from Accounts amounting to P.880 million as at year-end

remained unliquidated for one month to six months, thereby
rendering the validity of the account balance doubtful and resulted
380
to an overstatement of an asset account and understatement of
expenses; and,
 Guarantee Deposits or Cash Deposits of Waterworks

concessionaires of P.047 million for the year or total estimated at
P.622 million for 3,112 concessionaires were treated as Income
instead of Trust Liabilities
Gingoog City Qualified  Property, Plant, and Equipment (PPE) account could not be
ascertained due to lack of Report on Physical Count on Property,
Plant, and Equipment (RPCPPE) in some PPE items and
unreconciled balances between RPCPPE and trial balance
noncompliant with Section 124 of Chapter 7, Volume 1 on the
Manual on NGAS for LGUs, which may likely misstate the PPE
and related accounts in the financial statements;
 P30.423 million balance of inventories is unreliable due to the

presence of non–moving inventory items totalled P7.930 million
representing 20%, may cause misstatement of affected inventory
account in the financial statements which does not conform to
PPSAS 12;
 Due from LGU and Due from NGOs/POs City’s fund transfers to
barangays out of its 20% Development Fund amounting to
P3.367 million and P2.792 million, respectively, cannot be
ascertained due to non–liquidation for more than three years;
 Minimal settlement of P.019 million representing 0.05% of the

total dormant balance of P39.466 million of the Receivables –
Disallowances/ Charges contrary to the provisions of COA
Circular No. 2009-006 on the Rules and Regulations on the
Settlement of Accounts dated September 15, 2009; and,
 Unreliable balance of Accounts Payable amounting to P18.497

million that remained outstanding for over two (2) years are not
reverted to the unappropriated surplus, inconsistent with Section
98 of Presidential Decree No. 1445 and Paragraph 29 of PPSAS
29 which overstated the account.
Municipalities
Alubijid Qualified  Due from National Government Agencies, Due from GOCCs, Due
from Local Government Units, Due from Officers & Employees,
and Other Receivables has an outstanding balance amounting a
total of P4.372 million which were not supported with documents
evidencing its existence and Due to National Government
Agencies account under Trust Fund as of December 31, 2018
included negative balances amounting to a total of P47.479
million which rendered the account unreliable; and,
381
 Construction in progress account is understated by P20.753

million because disbursements of ongoing infrastructure projects
implemented by the LGU where directly debited to Due to NGA
account.
Balingasag Unqualified
Balingoan Qualified  Failure to conduct an inventory of the local roads under its
jurisdiction and the absence of the Registry of Public
Infrastructure casted doubt on the reliability of its recorded Road
Network amounting P.333 million in the financial statements.
Binuangan Qualified  Cash advances totaling P.119 million remained unliquidated as of

December 31, 2018 and additional cash advances were granted
to officers and employees of the Municipality with unsettled prior
cash advances which is inconsistent with Section 89 of
Presidential Decree No. 1445 and Sections 5.1 and 5.8 of COA
Circular No. 97-002 dated February 10, 1997, thereby
understating the related expenses and receivable account;
 Loans Payable- Domestic amounting to P7.274 million cannot be

ascertained due to the failure of the Accounting Office to maintain
subsidiary records which is inconsistent with Sections 111(1) and
114(2) of Presidential Decree No. 1445, thereby casting doubt on
the accuracy and correctness of its balances; and,
 Validity of ownership and rights of all land properties of the

Municipality as well as the reliability and accuracy of its recorded
balance totaling P1.628 million cannot be ascertained due to: (a)
failure to register its land properties under the Torrens Title
System; and (b) Non-maintenance of Property Cards (PC) by the
General Services Officer or the Local Treasurer and Property,
Plant and Equipment Ledger Card (PPELC) by the Municipal
Accountant contrary Section 39(2) of Presidential Decree 1445,
Section 148 of COA Circular 92-386 and Sections 114 and 119
Volume I of the Manual on NGAS for LGUs, respectively.
Claveria Qualified  Incurrence of cash shortage amounting to P3.372 million contrary

to Sections 101 and 105 of PD 1445 and malversation of public
funds which is penalized under Article 217 of the Revised Penal
Code, thereby resulting in the loss of government funds;
Cash Advances and Other Receivables remains unliquidated/

unpaid after a period of 9 to 11 years from the date it was granted/
released due to non-enforcement of collections contrary to COA
Circular 97-002 and the Memorandum of Agreement (MOA)
thereby depriving the agency on the use of the said funds for
other important projects and misstated the presentation of the
accounts in the financial statements; and,
382
 322 Disbursement Vouchers (DVs) totaling P51.856 million for

Calendar year 2018 remained unsubmitted more than a month
after the year ended contrary to PD 1445 and COA Circular 95-
006 causing delays in the prompt verification of said
disbursements rendering the accounts unreliable.
Gitagum Qualified  Property Plant and Equipment amounting to P80.948 million were
not observed contrary to the provisions of COA Circular No. 92-
386 and Section 124 of the NGAS Manual thus existence of the
assets, and reliability and accuracy of the account balances
presented in the Financial Statements could not be ascertained:
a. Management failed to conduct physical inventory, maintain
and update property stock and ledger cards, provide lapsing
schedule and reconcile records of the General Services Office
and the Accounting Unit. b. Internal controls to safeguard
procured supplies, inventories and properties and issuance to
end users were not in placed due to failure to label assets with
property tags/stickers, Inspection and Acceptance Reports were
signed prior to actual delivery, failure to issue Requisition and
Issue Slips, and necessary details such as brand names and
serial numbers were not reflected in the Acknowledgement
Receipt for Equipment thus the assets were not protected against
loss and identification thereof was cumbersome during inventory
taking.
Initao Qualified  Property, Plant and Equipmentamounting to P264.585 million

were not observed contrary to Section 124 of the NGASManual,
COA Circular No. 2015-008, PPSAS 17 and 21, hence, the
reliability and accuracyof the account balances presented in the
Financial Statements could not be ascertained:
a. The submitted Report on the Physical Count of Property
Plant and Equipment(RPCPPE) for CY 2018 was not reconciled
with Accounting’s property ledger cards;
b.The lapsing schedule was not prepared and submitted for
verification;
c. Adequate disclosures in the notes to financial
statements were not prepared inaccordance with PPSAS 17;
and
d. Impairment losses were not recorded for unserviceable
properties due to non-submission of inventory and inspection
reports contrary to paragraph 2 of PhilippinePublic Sector
Accounting Standards (PPSAS) No. 21, thus, overstating the
account balances of PPE as of reportng date
Jasaan Qualified  390 Disbursements Vouchers (DVs) with amount totaling

P49.828 million for the months of January to October 2018
remains unsubmitted more a month after the year ended contrary
to PD 1445 and COA Circular 95-006 causing delays in the
prompt verification of said disbursements rendering the accounts
unreliable.
383
Kinoguitan Qualified  Failure to conduct an inventory of the local roads under its
jurisdiction and the absence of the Registry of Public
Infrastructure casted doubt on the reliability of its recorded Road
Network amounting P19.417 million in the financial statements.
Lagonglong Unqualified
Laguindingan Qualified  Loans Receivables, Receivables – Disallowance/Charges,

Accounts Receivables, Due from National Government Agencies,
and Due from Officers & Employees account balances amounting
to a total of P4.861 million is unreliable; and,
 Unreliability of the Road Networks account with a book value of

P40.296 million since it was not supported with Report of the
Local Road Network, disclosure in Notes to the Financial
Statements, Report on the Physical Count of Local Road Network
and its corresponding Local Road Network Ledger Cards as
prescribed by COA Circular 2015-008 dated November 25, 2015
which affected the fair presentation of the Road network account
in the financial statements.
Libertad Qualified  Property Plant and Equipment amounting to P45.562 million were
not observed contrary to the provisions of COA Circular No. 92-
386, Sections 114 to 124 of the NGAS Manual, thus, existence
and physical condition of the assets were not validated, losses
from impaired assets were not recognized, and the reliability and
accuracy of the account balances presented in the Financial
Statements could not be ascertained.
a. Management failed to conduct physical inventory, maintain and
update property stock and ledger cards, provide lapsing schedule
and reconcile records of the General Services Office and the
Accounting Unit.
b. The Municipality failed to recognize impairment losses for its
unserviceable properties due to non-completion and non-
submission of inventory and inspection reports contrary to
paragraph 2 of Philippine Public Sector Accounting Standard
(PPSAS) No. 21, thus, overstating the account balances of PPE
as of reporting date.
c. Internal controls in the procurement of supplies, inventories and
properties and in the subsequent issuance to end users were not
in placed due to failure to label assets with property tags/stickers,
and necessary details such as brand names and serial numbers
were not reflected in the Acknowledgement Receipt for
Equipment, thus, assets were not safeguarded against loss and
identification thereof was cumbersome during inventory taking.
Lugait Qualified  Property, Plant and Equipment (PPE) amounting to P270.437

million could not be ascertained due to the absence of physical
inventory and non-maintenance of Property Cards and PPE
Ledger Cards;
384
 Construction in Progress Accounts were not closed to the

appropriate asset accounts for the completed projects costing
P8.313 million, thus, the related asset account and the
corresponding depreciation were not recorded;
 Cash in bank balances could not be ascertained due to non-

submission of Monthly Bank Reconciliation Statements (BRS)
from December 2017 to September 2018; and,
 Dormant Other Receivables amounting to P15.231 million were

not acted upon to facilitate the proper write-off, resulting in the
overstatement of agency assets due to the inclusion of accounts
with doubtful existence.
Magsaysay Qualified  Failure to record the completed Local Road Networks in the
books of account contrary to the provisions of COA Circular No.
2015-008 dated November 25, 2015, thus understating the
municipality’s asset and equity accounts in the financial
statements;
 Long outstanding Advances to Officers and Employees for travel,

special purpose and time-bounded undertakings including
confidential/intelligence funds amounting to P.973 million
remained unliquidated as at year-end, thus, resulted in the
overstatement of assets and understatement of expenses
reflected in the financial statements; and,
 Out of the P164.755 million recorded Property, Plant and

Equipment, only P71.746 million were reported in the Annual
Inventory Report, the variance of P93.009 million was due to non-
recording of the costs of Land Improvements, Public
Infrastructures, Buildings and Other Equipment in the Inventory
Report of the Municipal Treasurers Office; and the failure of the
Municipal Accounting Office and Municipal Treasurers Office to
reconcile their respective records, thereby, rendering the PPE
account balances unreliable.
Manticao Qualified  Property, Plant and Equipment (PPE) amounting to P126.884,

million could not be ascertained due to absence of physical
inventory and non-maintenance of PPE Ledger Cards. In
addition, the accuracy and validity of the cash accounts could not
be relied upon since the Accountant was unable to set-up
subsidiary ledgers for the collections of individual collectors by
fund.
Medina Qualified  Failure to record the completed Local Road Networks in the
statements; and,
385
 Depreciation for several PPE accounts was not provided in the
books of accounts in violation to the provisions of International
Public Sector Accounting Standards (IPSAS) No. 17, Property,
Plant and Equipment and COA Circular No. 2004-003 thus
affecting the accuracy and valuation of PPE, expense and equity
Naawan Qualified  Property, Plant and Equipment (PPE) amounting to P168.179

million could not be ascertained due to absence of physical
inventory and non-maintenance of Property Cards and PPE
Ledger Cards;
 Construction in Progress Accounts were not closed to the

appropriate asset accounts for the completed projects costing
P3.927 million, thus, the related asset account and the
corresponding depreciation were not recorded; and,
 Receivables amounting to P.631 million which remained inactive

for nine to ten years were not acted upon to facilitate the proper
write-off, resulting in the overstatement of agency assets due to
the inclusion of accounts with doubtful existence.
Opol Qualified  Debiting the Due to NGA account instead of the Construction in
Progress accounts, thus understating the Assets of the Local
Government Unit by P15.018 million;
 Road Networks with a book value of P20.662 million were not

supported with pertinent reports thus affecting the fair
presentation of the Road network account in the financial
statements; and,
 Construction in Progress accounts as of December 31, 2018

includes projects which were already completed, projects which
cannot be readily identified (unreconciled), and negative
balances amounting to P19.865 million, P70.374 million, and
P2.069 million, respectively, thus affecting the fair presentation of
the account in the financial statements.
Salay Unqualified
Sugbongcogon Qualified  Loans Payable- Domestic amounting to P22.645 million cannot

be ascertained due to the failure of the Accounting Office to
maintain subsidiary records which is inconsistent with Sections
111(1) and 114(2) of Presidential Decree No. 1445, thereby
casting doubt on the accuracy and correctness of its balances;
 Validity of ownership and rights of all land properties of the

Municipality as well as the reliability and accuracy of its recorded
balance totaling P1.164 million cannot be ascertained due to: (a)
failure to register its land properties under the Torrens Title
386
 System; and (b) Non-maintenance of Property Cards (PC) by the
General Services Officer or the Local Treasurer and Property,
Plant and Equipment Ledger Card (PPELC) by the Municipal
Accountant contrary Section 39(2) of Presidential Decree 1445,
Section 148 of COA Circular 92-386 and Sections 114 and 119
Volume I of the Manual on NGAS for LGUs, respectively.

Receivable account balances as of December 31, 2018 totaling
P.461 million and P.466 million,respectively, are understated due
to the failure of the Accountant to draw Journal Entry voucher
(JEV) at the beginning of the year to record these taxes which are
due and collectible for the year contrary to Section 20, Volume 1
of the NGAS Manual; and,
 Trust Fund’s Due from NGA’s and Due from LGU’s amounting to
P.100 million and P.202 million, respectively, were not supported
with Subsidiary Ledgers casting doubt on the reliability of the
balances of these accounts.
Tagoloan Qualified  Receivable and Payable accounts amounting to P7.927 million

and P.078 million, respectively, were not backed with Subsidiary
Ledgers preventing the thorough examination and verification of
said accounts, thus, the correctness of the accounts’ balances
shown in the Financial Statements could not be ascertained; and,
 Local Roads and Road Asset account was lodged in Construction

in Progress-Infrastructure account amounting to P60.881 million,
misstating both accounts and their related accumulated
depreciation and impairment losses for the current and prior
years;
 Property, Plant and Equipment account balances totaling

P232.457 million as of December 31, 2018, could not be
ascertained due to the perennial failure of management to
maintain Plant, Property and Equipment Ledger Card (PPELC)
and property cards for each category of Property, Plant and
Equipment (PPE) and non-submission of the Annual Report on
Physical Count of PPE; and,
 4,571 Disbursement Vouchers and related supporting documents

in an aggregate amount of P315.051 million were not submitted
within the reglementary period, thus, the legality and propriety of
the disbursements and transactions made could not be validated.
Talisayan Qualified  Physical inventory of the PPE was not conducted by the
Municipality contrary to section 156 of COA Circular No. 92-386
and paragraph 27 of International Public Sector Accounting
Standards (IPSAS) No. 1, casting doubt on the existence,
accuracy and completeness of the account;
387
 Depreciation for PPE accounts were not provided in the books of
accounts in violation of IPSAS No. 17, Property, Plant and
Equipment and COA Circular 2004-003 thus affecting the
accuracy and valuation of PPE, expense and equity accounts in
 Failure to record the completed Local Road Networks in the

statements.
Villanueva Qualified  Property, Plant and Equipment (PPE) amounting to P44.177

million was not reconciled with the balance of P361.141 million in
the books of accounts, with a variance of P316.964 million, thus,
not fairly presented in the financial statements as of December
31, 2018 and not conforming with Section 111, PD No. 1445; and,
 Road Networks prepared by the General Service Office of

P180.310 million, was not reconciled with the balance of P32.716
million in the books of accounts, contrary to COA Circular No.
2015-008, thus, not fairly presented in the financial statements
as of December 31, 2018.
Region XI – Davao Region

Compostela Valley Qualified  Due to accounting errors/omissions and deficiencies totaling
P998.942 million and P588.189 million, that affected the fair
presentation of the financial statement; and,
 Additions/acquisitions during the year were not presented in the

Inventory accounts. Expensed/issuances of inventory during the
year were not disclosed.
Municipalities
Compostela Qualified  Various accounting errors/omissions totaling P.588 million and
various deficiencies/discrepancies noted which affect the
reported total Assets, Liabilities and Government Equity
amounting to P663.236 million, P251.107 million and P 412.128
Laak Qualified  Various accounting errors/omissions totaling P33.286 million and

various deficiencies/discrepancies noted which affect the fair
presentation of the financial statements at year-end.
Mabini Qualified  Due to accounting errors/omissions totaling P47.447 million and

presentation of the reported total Assets, Liabilities and
Government Equity amounting to P246.641 million, P62.863
million and P183.778 million, respectively.
388
Maco Qualified  Due to accounting errors/omissions totaling P55.779 million, and
various errors/deficiencies noted.
Maragusan Qualified  Various accounting errors/omissions totaling P10.809 million and

million, and P273.904 million, respectively.
Mawab Qualified  Due to accounting errors/omissions totaling P15.003 million and

Monkayo Unqualified
 Due to accounting errors/omissions totaling P1.328 million and

Montevista Qualified various deficiencies/discrepancies noted which affect the fair
Nabunturan Qualified  Due to accounting errors/omissions totaling P12.542 million and

various deficiencies/discrepancies noted.
New Bataan Qualified  Various accounting errors/omissions totaling P99.434 million and
various deficiencies noted which affected the fair presentation of
the reported total Assets, Liabilities and Government Equity
amounting to P408.238 million, P177.276 million and P230.962
Pantukan Qualified  Due to accounting errors/omissions totaling P49.218 million and

various deficiencies/discrepancies noted.
Davao del Norte Qualified  Unrecorded three (3) parcels of Lands owned by the Province of
Davao del Norte with an estimated recognizable amount of
P1.193 million;
 Inaccurate and unreliabile ending balance of “Inventory” accounts

amounting to P30.934 million as at December 31, 2018 and,
additions to PPE accounts in CY 2018 amounting to P817.560
million due to unsubmitted RPCI RPCPE;
 Overstated Construction-in-Progress (CIP) accounts under Trust

Fund as at December 31, 2018 which pertain to 100% completed
projects amounting to P328.768 million not reclassified to
appropriate asset accounts;
 Nine (9) completed infrastructure projects under the DA and DILG

PAMANA Program were not closed upon liquidation/completion
recorded under “Due to NGAs” account amounting to P94.238
million;
389
 Understated Sales Revenue for consigned drugs and medicines
amounting to P63.392 million of DavNor Pharmacy Economic
Enterprise were recorded as “Other Payables” in the Trust Fund
instead of a special account in the General Fund, thus, the
income/profits derived therefrom amounting to P5.630 million for
CY 2018 were not recognized in the books;
 Stock Cards (SCs) and Subsidiary Ledgers (SLs) for the

construction materials were not properly maintained and updated
by the PGSO and PACCO, respectively affecting the validity,
reliability and accuracy of the account balance amounting to
P11.227 million as at December 31, 2018.
Cities
IGACOS Qualified  Unissued check and similar reconciling items on Loans Payable
– Domestic were not adjusted in the books contrary to existing
regulations resulting in the understatement of said account
 Cash in Bank, Local Currency - Current Account amounting to

P4.016 million in the year-end financial statements;
Panabo City Qualified  The accuracy and reliability of the consolidated balance of Cash
in Bank accounts amounting to P766.37 million is doubtful due to
unreconciled amount of P12.140 million as a result of delayed
preparation of bank reconciliation statements for twenty one (21)
bank accounts. The propriety of reported balance of Inter and
Intra-Agency payables totaling P141.82 million is unreliable due
to non-remittance of the 20 percent share of Department of Public
Works and Highways (DPWH) and Office of Building Office
(OBO) from building fees and other charges totaling P2.289
million.
 The presence of long overdue receivables totaling P1.389 million

booked under Other Receivables account failed to reflect the
correct valuation of the accounts in the financial statements;
Delay in the reconciliation of Trust Liabilities – LDRRMF account

balance with the subsidiary ledger resulted to overstatement of
the said account by P32.638 million. The Trust Liabilities –
LDDRMF account at yearend reflected a balance of P74.277
million while the LDRRMF utilization report that should support
said account reported a balance of P41.638 million.
 Validation of Construction and Office Supplies Inventory balances

with their corresponding inventory report reflected a variance of
P51.864 million. Such discrepancy was not disclosed in the notes
to Financial Statements. The same observation has already been
made in CY2016 Annual Audit Report as stated in Item 20 Part III
of this report.
390
Tagum City Qualified  PPE accounts presented in the Statement of Financial Position of
the City totaling P3.017 billion could not be ascertained due to the
absence of the Report on the Physical Count of Property, Plant
and Equipment (RPCPPE) as of December 31, 2018, thereby
casting doubts on the existence, accuracy and completeness of
recorded PPE which is discussed in detail in Part II of this report.
Municipalities:
Asuncion Qualified  Inability to conduct inventory of the Local Roads and record in the
books of accounts under Property, Plant and Equipment – Road
Networks the previously completed roads closed to the
Government Equity and recorded in the Registry of Public
Infrastructure totaling P41.87 million casts doubts on the
completeness, accuracy and reliability of the reported Road
Networks and resulting further to understatement of the
depreciation and its related contra-asset account.
Braulio E. Dujali Unqualified
Carmen Unqualified
Kapalong Qualified  Inability to conduct inventory of the Local Roads and record in the
books of accounts under Property, Plant and Equipment – Road
Networks the previously completed roads closed to the
Government Equity and recorded in the Registry of Public
Infrastructure totaling P43.89 million casts doubts on the
completeness, accuracy and reliability of the reported Road
Networks and resulting further to understatement of the
depreciation and its related contra-asset account.
New Corella Unqualified
San Isidro Qualified  Failure of the management to install adequate, effective controls
and monitoring system on the animal dispersal livelihood program
resulted to unreported losses of assets/property thus, affecting
the reliability of the amount appearing in the financial statements
as of December 31, 2018 totaling P2.492 million.
Santo Tomas Unqualified
Talaingod Qualified  Existence of the items composing the Property, Plant and
Equipment account, the proper valuation of its balance as at
December 31, 2018, and the computation of depreciation
expenses, as presented in the financial statement of the
Municipality are rendered doubtful due to the unreconciled
difference of P606.806 million of the RPCPPE (P929.204 million)
and the Accounting Records (P322.399 million) as at December
31, 2018.
391
Talaingod Qualified  Existence of the items composing the Property, Plant and
Equipment account, the proper valuation of its balance as at
December 31, 2018, and the computation of depreciation
expenses, as presented in the financial statement of the
Municipality are rendered doubtful due to the unreconciled
difference of P606.806 million of the RPCPPE (P929.204 million)
and the Accounting Records (P322.399 million) as at December
31, 2018.
Davao del Sur Qualified  Inadequate information on schedules and subsidiary ledgers of
Receivables and Payables in the amount of P47 million and
P442.7 million, and remained uncollected/unliquidated and/or
unpaid/unremitted, respectively; and,
 Non-reconciliation of Inventories and PPE accounts per book

balance as against the balance per Report of Physical Count of
PPE and Inventories.
Cities
Davao City Qualified  Property, Plant and Equipment accounts totaling P7.683 billion
could not be ascertained due to incomplete physical inventory
count; and,
 Cash in bank and income accounts have been understated by the

unrecorded collections/deposits totaling P24.680 million.
Digos City Qualified  Property, Plant and Equipment valued at P372.124 million or
19% of its total assets of P1.972 billion as of December 31, 2018
were not validated due to failure of the management to submit on
time the Report on the Physical Count of Property Plant and
Equipment (RPCPPE);
 Non-provision of related depreciation for projects already

completed but still recorded as Construction in Progress-
Infrastructure Assets and Construction in Progress-Building and
Other Structures amounting to P13.931 million and P1.973
million, respectively; and,

P38.081 million were not derecognized in its books as at year-
end even though control and benefits no longer accrue to it.
Municipalities
Bansalan Qualified  Uncertainty on the accuracy of reciprocal accounts - Due from/to
Other Funds, Due from/to Special Accounts, and Due from/to
Local Economic Enterprises due to the variances computed
amounting to P8.742 million, P8.801 million and P.226 million,
respectively;
 Doubts on the actual existence of inventory account balances

totaling P2.594 million which remained non-moving throughout
CY 2018; and,
392
 Unreliability of the subsidiary ledgers (SLs) maintained for three
(3) projects under the Due to NGAs account in the amount of
P.757 million arising from the discrepancies noted between the
general ledger and the supporting records in disregard of the
pertinent provisions in PD 1445.
Hagonoy Qualified  Purchases of supplies and materials totaling P9.010 million were
immediately recorded as expense, thus the corresponding
expense accounts may have been overstated due to non-
recognition of the inventory accounts for unused or unconsumed
supplies and materials, andaffecting the fair presentation of the
financial statementsas at December 31, 2018.
Kiblawan Qualified  PPE accounts balances totaling P244.645 million as at

December 31, 2018 were not supported with Report on the
Physical Count of PPE (RPCPPE), thus the accuracy and
reliability of accounts balances, as well as their existence and
completeness, cannot be ascertained.
Magsaysay Unqualified
Malalag Qualified  PPE accounts balances totaling P192.632 million as at

December 31, 2018 were not supported with duly reconciled
Report on the Physical Count of PPE (RPCPPE), thus the
accuracy and reliability of accounts balances, as well as their
existence and completeness, cannot be ascertained; and,
 Due from Other Funds and Due to Other Funds accounts with a
net difference of P9.423 million cannot be ascertained due to
improper classification of transactions.
Matanao Unqualified
Padada Qualified  Accuracy and completeness of the accounts balances relative to

the transfer of the unexpended Quick Response and Mitigation
Funds-MOOE of MDDRM Fund for CY 2018 could not be
ascertained due to erroneous accounting entry and/or
misclassification of accounts made in the General Fund and
non-recognition of receivable account in the Trust Fund
Santa Cruz Qualified  Monthly transactions that range from P250,000.00 to P14 million
were not recorded by the Municipality due to the method of
recognizing only paid disbursement vouchers with complete
supporting documents hence, the accuracy and fair presentation
of the balances of cash in bank-LCCA, related expenses
accounts, cash advances and trust liabilities accounts cannot be
ascertained; and,
393
 PPE and Inventory accounts balances totaling P356.891 million
and P16.516 million, respectively as at December 31, 2018 were
not supported with the Report on the Physical Count of PPE
(RPCPPE) and Report of the Physical Count of Inventories
(RPCI), thus, the accuracy and reliability of accounts as well as
their existence and completeness cannot be ascertained.
Sulop Qualified  Reconciling items amounting to P12 million remained unadjusted

casting doubt on the completeness, accuracy and correctness of
the Cash in Bank – LCCA balances with a total amount of
P42.489 million as at December 31, 2018.
Davao Occidental Unqualified
Municipalities
Don Marcelino Qualified  Property, Plant and Equipment accounts balances with carrying
value totaling P111.486 million is unreliable due to non-
reconciliation of property record with book balances;
 Cash-in-Bank – LCCA balances (all funds) totaling to P88.572

million could not be substantiated since the account is not
supported with Bank Reconciliation Statement at year-end; and,
 Materials and Inventory accounts balances totaling P1.682

million since no Stock Cards and Ledger Cards were maintained,
affect the fair presentation of financial statements as at December
31, 2018.
Jose Abad Santos Qualified  Property, Plant and Equipment balances reported as at year-end
amounting to P228.378 million is unreliable resulting from the
non-maintenance of property cards and property ledger cards by
the General Services Office and the Accounting Office,
respectively, contrary to Section 114 (4) of the Manual on New
Government Accounting System for LGUs;
 Cash in Bank – LCCA balance totaling P85.717 million is

uncertain due to the non-submission of Bank Reconciliation
Statements (BRS) showing agreement between bank and book
balances and subsequent adjustments of book reconciling items
as at year-end in violation of Section 74 of PD 1445; and,
 Supplies and materials purchased amounting to P2.176 million

were directly accounted as expense negating from the prescribed
perpetual inventory method of accounting, thereby causing the
understatement or non-recognition of appropriate inventory
account as at year-end.
Malita Qualified  Property, Plant and Equipment accounts with net book value
totaling P517.332 million due to failure to complete the physical
count and non-reconciliation of property record with book
balances, affect the fair presentation of financial statements as at
December 31, 2018.
394
Santa Maria Qualified  Purchases made on Barangay’s supplies and materials for
calendar year 2017 and 2018 amounting to P.316 million and
P.145 million, respectively, were directly charged to expense
account negating from the prescribed perpetual inventory method
of accounting thereby, causing the understatement or no
recognition of appropriate inventory account at year-end;
 No reports on the Barangay properties submitted by the BRK to

the Municipal Accountant for reconciliation purposes in violation
to item 3(d), Vol. I on System and Procedures Manual on the
Management of Barangay Funds and Property, thereby, casting
doubts on the propriety, certainty, and verifiability of reported
balances totaling to P3.734 million and P3.755 million,
respectively;
 Cash in Bank – LCCA balances amounting to P2.103 million and

P1.880 million for calendar 2017 and 2018, respectively, were
uncertain due to the unavailability of Bank Reconciliation
Statements (BRS) showing agreement between bank and book
balances at year-end in violation of Section 74 of PD 1445,
rendering the correctness and existence of the book balances
doubtful;
 Barangay’s rightful claim of ownerships on projects implemented

to various locations amounting to P2.643 million could not be
ascertain considering no action has been made to secure
evidence proving government’s full control over the lands where
the projects are situated, thereby, causing a possibility of
depriving the constituents to benefits derived from these projects
and resulting to misused/disused of government funds.
Sarangani Qualified  Property, Plant and Equipment accounts with net book value
totaling P120.361 million due to failure to complete the physical
count and non-reconciliation of property record with book
balances, affect the fair presentation of financial statements as at
December 31, 2018.
Davao Oriental Qualified  Cash in bank amounting to P43.597 million, remained

unreconciled due to the inability of the Provincial Accountant to
update the preparation and submission of the required Bank
Reconciliation Statements and effect timely adjustments for
reconciling items in the books, thus casting doubts on the
reliability of the balance thereof;
 Receivables account may be overstated due to the inability of the

Province to recognize Allowance for Impairment as prescribed
under Philippine Public Sector Accounting Standards (PPSAS)
29 paragraph 67 on impairment and uncollectability of financial
assets despite the presence of dormant receivables amounting to
P12.212 million, thereby affecting the fairness in the presentation
of the said account in the financial statements;
 Capital expenditures charged against the funds received from

National Government Agencies for the implementation of
programs, projects and activities totaling P66.470 million were
395
not properly recorded in the books of the Province caused by
improper accounting on the disbursement thereof, thus
understating the Property, Plant and Equipment account as of
year-end;
 Outstanding balance of loans payable with the MDFO that

matured during the year amounting to P20.766 million as at
December 31, 2018 differs by P3.748 million against the
recorded amount of P17.018 million in the books of the Province,
due to the inability to monitor and appropriate sufficient fund for
its settlement, thereby rendering the unreliability of the account
balance in the financial statements as at year-end and exposing
the agency to risk of additional payment for penalties;
 Funds received from National Government Agencies totaling

P28.692 million for the implementation of programs, projects and
activities could not be readily determined due to the absence of
periodic reports on its utilization and inappropriate maintenance
of accounting records, rendering the uncertainty of the said
balance of the Due to NGAs account as of year-end; and,
 Hospital Fees are overstated by at least P27.817 million as

collection of prior years’ claims from the PhilHealth were recorded
as income during the year, thus affecting the fairness of the
balance of the said account as presented at year-end.
City
Mati City Qualified  Reconciling items in the Bank Reconciliation Statement totaling
P4.141 million that were either additions or deductions to book
and bank balances as at December 31, 2018 remained
unadjusted in the books; hence, the accuracy of the balance of
Cash in Bank is doubtful;
 Non-adherence by the City to the rules and regulations in the

granting and liquidation of cash advances resulted to the
accumulation of unliquidated cash advances totaling P19.842
million as at December 31, 2018; thus, exposing government
funds to risk of loss and misuse.
 Fund transfers to LGUs amounting to P1.093 million remain

unliquidated, despite the lapse of more than one year from the
time the funds were released, due to the failure of the City to
enforce liquidation; thus, casting doubts whether funds had been
used for the intended purpose.
 Accounts payable totaling P69.424 million as presented in the

financial statements inadvertently included eight (8) infrastructure
projects amounting to P17.092 million that were either not yet
started nor completed as at year end contrary to COA Circular
No. 2015-009 dated December 1, 2015; thus affecting the fair
presentation of the financial statement.
396
 Borrowing cost incurred totaling P4.774 million in relation to the
loan availed of by the LGU from Municipal Development Fund
Office (MDFO) amounting to P 65 million for the construction of
the City Hall Annex New Building and the Renovation of the Old
Municipal Hall was inadvertently not capitalized as prescribed by
Philippine Public Sector Accounting Standards; thus, affecting the
fair presentation of the financial statements.
Municipalities
Baganga Qualified  Non-submission of related documents for several adjustments to
the Cash in Bank- Local Currency, Current Account amounting to
P.103 million;
 Accumulation of unliquidated cash advances amounting to

P3.548 million as at December 31, 2018;
 Non-reconciliation of records between the Accounting Office and

General Service Office and erroneous classification of its
Property, Plant and Equipment totaling P336.370 million;
 Improper recording of Due to NGAs in the amount of P.828

million; and,
 Improper recording of Other Payables with outstanding balances

of P.921 million and P7.825 million under General Fund and Trust
Fund books.
Banaybanay Qualified  Unable to conduct a complete physical inventory count for all its
Property, Plant and Equipment with net book value of P113.425
million as at December 31, 2018, thus rendering the existence of
the properties and accuracy of the reported balance to be
doubtful; and,
 Interest expenses amounting to P2.665 million which were

incurred in connection with loan repayments for the procurement
of various Property, Plant and Equipment were overstated thus
affecting its fair presentation in the financial statements.
Boston Qualified  Non-preparation of the monthly Bank Reconciliation Statements

(BRS) resulted to a variance of P13.572 million between ledger
balance and confirmed balance by the bank that included ledger
balance of closed accounts, thus, the reliability and correctness
of Cash in Bank-Local Currency Account balances amounting to
P59.527 million could not be ascertained;
 Accumulation of unliquidated cash advances amounting to

P15.097 million as at year-end;
 Property, Plant and Equipment (PPE) totaling P97.595 million

cannot be ascertained due to failure of the management to
conduct physical count as at year-end and erroneous
classification of accounts; and,
 Improper recording of Due to NGAs in the amount of P1.074

million and P.117 million.
397
Caraga Qualified  Cash-in-Bank balance of P151.152 million as at December 31,
2018 could not ascertained due to the existence of unreconciled
amount of P7.611 million and failure to timely submit the monthly
Bank Reconciliation Statements contrary to Circular No. 96-011
dated October 2, 1996, thereby affecting the fair presentation of
the account in the financial statements;
 Cash advances and other receivables from officers and

employees in total amount of P67.404 million as at year-end, 63%
of which or P42.408 million remained outstanding for more than
10 years, due to the failure to conduct regular monitoring and
analysis of the accounts and strictly enforce settlements thereof,
overstated total assets and government equity, thereby not fairly
presenting the actual financial position and operations of the
municipality;
 PPE of P172.972 million is doubtful due to the unreconciled

balance of P171.384 million between the Report of Physical
Count of PPE submitted by the General Services Officer and the
records of the Accounting Office, thereby casting doubt on the
accuracy and reliability of the reported balances in the financial
statements;
 Complete and timely submission of disbursement vouchers,

various reports and other pertinent documents were not strictly
complied with, despite previous audit recommendation, which
resulted to bulk submission of vouchers and official receipts on
February 2019. As at February 28, 2019, a total P14.440 million
vouchers and official receipts from October to December 2018
remained unsubmitted, thus hindering the application of
substantive audit procedures and posing risk to non-detection of
errors and/or irregularities.
Cateel Qualified  Cash in Bank-Local Currency, Current Account was understated

by P1.395 million and the Cash in Bank-Local Currency, Savings
Account was overstated by P1.798 million due to unrecorded
reconciling items;
 Inclusion of unliquidated but expended cash advances amounting

to P7.484 million;
 Failure to conduct annual physical count of its Property, Plant and

Equipment (PPE) amounting to P168.930 million that casted
doubt on the accuracy and reliability of the reported balance;
 Inclusion of long overdue receivables from NGOs/POs amounting

 Misclassification of various liability accounts amounting to P1.233

million.
Governor Generoso Qualified  Unable to conduct a complete physical inventory count for all its
doubtful.
398
Lupon Qualified  Unable to conduct a completel physical inventory count for all its
million,834.97 as at December 31, 2018, thus rendering the
existence of the properties and accuracy of the reported balance
to be doubtful; and,
 Completed projects amounting to P12.637 million funded by the

Department of the Interior and Local Government (DILG) were
not recorded as assets thereby understating the affected
Manay Qualified  Cash-in-Bank balance of P27.688 million as at December 31,

2018 could not be ascertained due to failure of the Municipal
Accountant to timely submit the monthly Bank Reconciliation
Statements, thereby affecting the fair presentation of the account
 Accumulation of unliquidated cash advances and other

receivables from officers and employees in total amount of
P8.586 million as at year-end, due to the failure to conduct regular
monitoring and analysis of the accounts and strictly enforce
settlements thereof, overstated total assets and government
equity, thereby not fairly presenting the actual financial position
and operations of the municipality;
 Fuel, Oil and Lubricants Inventory of P3.421 million as at

December 31, 2018 could not be ascertained due to the failure to
conduct physical count, and maintain appropriate ledger and
stock cards, thereby casting doubt on of the reported balances in
the financial statements.
 PPE with net book values of P170.787 million could not be

ascertained due to the failure to reconcile the variance of P28.688
million in the beginning balances, submit the Report on the
Physical Count of PPE as at December 31, 2018, and maintain
appropriate ledger and stock cards, thereby affecting the fair
presentation of the accounts in the financial statements;
 Spare parts of heavy equipment charged to development fund in

the total amount P2.856 million were erroneously recorded as
Construction in Progress-Infrastructure Assets (1-07-10-020);

various reports and other pertinent documents were not strictly
complied with, which resulted to bulk submission of vouchers and
official receipts on January and February 2019. As at February
28, 2019, total amount of unsubmitted vouchers is P13.009
million, thus hindering the application of substantive audit
procedures and posing risk to non-detection of errors and/or
irregularities.
San Isidro Qualified  Unable to conduct a complete physical inventory count for all its
doubtful.
399
Tarragona Qualified  Accumulation of unliquidated cash advances and other
receivables from officers and employees in total amount of
P3.592 million as at year-end, due to the failure to conduct regular
monitoring and analysis of the accounts and strictly enforce
settlements thereof, had overstated total assets and understated
government equity, thereby not fairly presenting the actual
financial position and operations of the municipality.
 Property, Plant and Equipment with net book values of P275.993

million could not be ascertained due to failure to submit Report
on the Physical Count of Property, Plant and Equipment, thereby
casting doubt on the accuracy and reliability of the reported
balances in the financial statements; and,

official receipts and other pertinent documents were not strictly
complied with, despite previous audit recommendation, hence a
total of fifty-eight (58) disbursement vouchers with an aggregate
value of P15.342 million were not submitted as at February 28,
2019, which further hindered the application of substantive audit
procedures and posing risk to non-detection of errors and/or
irregularities.
Region XII - SOCCSKSARGEN

Cotabato City Qualified  Plant and Equipment accounts with a net book value of P1.310
billion could not be ascertained due to (a) Non-conduct of physical
inventory, (b) Property records not prepared and maintained, (c)
Incomplete documentation of Road Network account in the
amount of P18.051 million, and (d) Inaccurate computation of
depreciation amounting to P63.929 million; and,
 Cash in Bank-Local Currency Current Account under General

Fund totaling P26.554 million cannot be ascertained due to
unadjusted/unidentified/unsupported discrepancies between
bank and book balances and non-reconciliation of Accounting
and Treasury records.
North Cotabato Qualified  Lapses in the internal control of the Property, Plant and
Equipment account cast doubt as to the reliability and accuracy
of the reported net balance amounting to P4.824 billion; and,
 Funds transferred to other Local Government Units (LGUs) in the

amount of P56.689 million remain in the books of accounts due
to lack of proper monitoring and lenience in the terms prescribed
in the Memoranda of Agreement.
City
Kidapawan City Qualified  Non-recording of the prior year's RPT deliquencies involving
P24.663 million had understated the Real Property Tax (RPT)
and Special Education Tax (SET) Receivables thereby rendering
its ending balance inaccurate and unreliable; and,
400
 Procedural gaps in the recording and accounting of Accounts
Payable and Other Payables had rendered its year balances
inaccurate and unreliable.
Municipalities
Alamada Qualified  Total balances of Property, Plant and Equipment per Report of
amounting to P157.777 million did not reconcile with the balance
per ledger of P236.039 million resulting to unaccounted
difference of P78.262 million, thus management assertion on the
accuracy and completeness of the balances of the accounts could
not be relied upon, affecting their fair presentation in the financial
statements;
 Real Property Tax and Special Education Tax Receivables in the

balance sheet totaling P3.875 million did not reconcile with the
delinquent taxes amounting to P76.603 million reflecting the
substantial difference of P72.728 million thus, casting doubt on
the reliability of the said accounts and that the deferred Real
Property Tax and Special Education Tax Income.
Aleosan Qualified  Due to unserviceable properties valued at P14.958 million were

still carried in the Financial Statement and Inventory Report.
Antipas Qualified  Property, Plant and Equipment (PPE) account with net book value
of P114.522 million as of year-end could not be ascertained due
to failure of the agency to conduct complete physical count of
PPE thereby exposing said properties to possible loss while
unaccounted; and,
 Property, Plant and Equipment totaling P8.067 million were not

provided with periodic depreciation in violation of PAG3 to IPSAS
17 hence the total carrying amount of the subject accounts is
misstated.
Arakan Qualified  Property, Plant and Equipment (PPE) account with net book value
of P 153,132 million as of year-end could not be ascertained due
to failure of the agency to conduct complete physical count of
PPE thereby exposing said properties to possible loss while
unaccounted; and,
 Parcel of land with a book value of P1.080 million for CY 2018

remained untitled in the name of the Municipal Government of
Arakan, contrary to Section 449 of GAAM, Volume I, thereby
rendering the ownership doubtful and consequently exposing the
Municipality to third party claim.
401
Banisilan Qualified  Unreconciled difference in the Due from Other Funds and Due to
Other Funds accounts by P22.564 million and the accuracy of
Cash in Bank account balance of P5.737 million could not be
ascertained because of non-preparation of the Monthly Bank
Reconciliation Statements.
Carmen Qualified  Existence of long reconcillinf items on the Cash in Bnak- Local
Currency Accounts and for lack of supporting documtnes for land
account acmounting to P8.626 million which casted doubt in the
reliability and accuracy of the accounts.
Kabacan Qualified  Existence of the long outstanding reconciling items on the Cash
in Bank – Local Currency Accounts;
 Loans Payable account amounting P50.190 million was doubtful

due to a discrepancy of P15.214 million between the books and
the creditors’ record; and,
 Land account amounting to P10.061 million was doubtful for lack

of supporting ownership documents.
Libungan Qualified  Non-reconciliation of balances of Property, Plant and Equipment

accounts as per Report of Physical Count of PPEs and balances
per ledger resulting to a variance of P159.814 million;
 Non-preparation and submission of the Inventory and Inspection

Report of Unserviceable Properties (IIRUP) evidencing existence
of unserviceable and obsolete PPEs that were not dropped in the
books amounting to P22.002 million;
 Absence of Certificate of Title evidencing the ownership of

parcels of land amounting to P4.873 million;
 Non-dropping of balances of inventories and biological assets in

the books amounting to P4.180 million; and,
 Inappropriate charging of interest under 20% EDF to Loans

Payable – Domestic Account amounting to P2.332 million.
M'lang Qualified  Due to (a) various bank reconciling items remain unadjusted in
the books which resulted to the overstatement of Cash in Bank
by P.632 million;
 Unliquidated cash advances amounting to P4.004 million;
 Various deficiencies in the accounting and reporting of Road

Network System;
 Non-transfer of completed projects from the CIP account;
 Non-reconciliation of reciprocal accounts; and,
402
 Non-classification of Non-current Loans Payable account thereby
affecting the fair presentation of the accounts in the financial
statements.
Magpet Qualified  Property, Plant and Equipment could not be ascertained due to
unreconciled discrepancy of P181.960 million between the
Report on Physical Count of PPE (RPCPE) and accounting
records;
 Land Improvements account costing P7.302 million was not

provided with periodic depreciation in violation of PAG3 to IPSAS
17 hence the total carrying amount of the subject accounts is
misstated;
 Parcel of land with a book value of P5.406 million for CY 2018

Magpet, contrary to Section 449 of GAAM, Volume I, thereby
rendering the ownership doubtful and consequently exposing the
Municipality to third party claims; and,
 Real Property Tax(RPT) and Special Education Tax (SET)

Receivables and their Deferred Income counterparts as of
December 31, 2018 are doubtful due to unreconciled difference
of the aforementioned accounts and their corresponding
reciprocal accounts, contrary to Section 20, Volume I of the
Manual on New Government Accounting System (MNGAS).
Makilala Qualified  Discrepancies of setting-up receivables resulted in unreliable

balances of the recorded Real Property Tax (RPT) and Special
Education Tax (SET) Receivables amounting to P26.478 million
and P27.203 million, respectively.
Matalam Qualified  Due to various reconciling items which remain unadjusted

resulted to the understatement of cash in bank account by P2.616
million; and,
 Deficiencies in the accounting and reporting of road networks

account with value stated at P221.940 million, thereby affecting
the fair presentation of the accounts in the financial statements.
Midsayap Qualified  Due to unreconciled balance between the General Ledger of

Property, Plant & Equipment and Report on Physical Count of
Property, Plant & Equipment amounting to P174.697 million and
failure to provide Depreciation Expense account on the specified
Property Plant and Equipment totaling P21.220 million of the
Municipality for the Calendar Year 2018.
Pigcawayan Qualified  Failure to conduct physical count of the properties and non-
reconciliation of the properties with the accounting records
403
 Failure to transfer to the Road Networks accounts the local roads
of the LGU amounting to P47.329 million;
 Non-recognition of allowance for depreciation of some PPEs

 Inappropriate recording of acquisition of various inventories

amounting to P10.242 million to expense accounts; and,
 Non-reconciliation of reciprocal accounts with a net difference of

P2.088 million.
Pikit Qualified  Due to unreconciled balance between the General Ledger of

Property, Plant & Equipment and Report on Physical Count of
Property, Plant & Equipment amounting to P237.760 million and
failure to provide Depreciation Expense account on the specified
Property Plant and Equipment totaling P152.160 million of the
Municipality for the Calendar Year 2018.
President Roxas Qualified  Property, Plant and Equipment could not be ascertained due to
unreconciled discrepancy of P119.593 million between the
Report on Physical Count of PPE (RPCPE) and accounting
records;
 Parcel of land with a book value of P.729 million for CY 2018

President Roxas, contrary to Section 449 of GAAM, Volume I,
thereby rendering the ownership doubtful and consequently
exposing the Municipality to third party claims.
 Discrepancies between the reciprocal accounts Due from and

Due to Other Funds amounting to P.611 million indicated errors
in recording of
Tulunan Qualified  Due to various reconciling items remain unadjusted which

resulted to the understatement of cash in bank account by P1.073
million;
 Fund transfer from PRDP totaling P3.740 million remained

outstanding despite of project termination, thereby affecting the
reliability and accuracy of the reported Due to NGAs and other
related accounts; and,
 Various deficiencies in the accounting and reporting of road

networks account with value stated at P26.061 million, thereby
statements.
404
Sarangani Qualified  Unsettled reconciling items between the book and the bank
records as well as the variance between the cash balances in the
financial statements and the treasurer’s cash book amounting to
P2.5 million affect reliability of the cash balance at year end;
 Non-recording of issuances and consumption of various supplies

and materials affects the accuracy of inventories account
amounting to P123 million;
 Cash advances of P10.870 million and fund transfers to other

LGUs of P20.460 million which remained outstanding for more
than one year as well as grants to NGOs/POs of P22.470 million
for more than 10 years understate expenses in the applicable
period at the same amounts; and,
 Credit variance amounting to P5.5 million between reciprocal

accounts Due from and Due to Other Funds renders such
accounts unreliable.
Municipalities
Alabel Qualified  Cash in bank – LCCA accounts could not be ascertained due to
reconciling items which remains unadjusted in the books
amounting to P.544 million; and,
 Property, Plant and Equipment (PPE) stated at P161.2 million, or

49.48% of total assets, as at December 31, 2018 could not be
ascertained due to unreconciled discrepancy of P75.04 million
between the accounting and property records.
Glan Qualified  Property, Plant and Equipment (PPE) stated at P417.91 million,
between the accounting and property records;
 Cash in Bank balance amounting to P321.03 million is unreliable

due to unreconciled balance between the book and bank in the
net credit amount of P9.01 million; and,
 Inaccuracy of receivable and expenses due to delayed liquidation

of fund transfers to component barangays amounting to P6.270
million.
Kiamba Qualified  Cash advances amounting to P32.503 million remained

unliquidated at year-end resulting in the non-recognition of
expenses in the period incurred;
 Receivables and Due to NGAs accounts amounting P.880 million

and P.781 million, respectively, cannot be ascertained since
these have already been dormant for more than ten years;
405
 Property, Plant and Equipment account as of year-end amounting
to P72.183 million is doubtful due to non-reconciliation with the
property schedules amounting to P34.150 million and the
absence of Report on the Physical Count of Property, Plant and
Equipment;
 Transactions pertaining to Assistance to Disadvantaged

Municipalities amounting to P9.530 million were inappropriately
recorded to Due to Other Funds; and,
 Capital expenditures under 20% Local Development Fund

amounting to P8.510 million were not booked as assets
Maasim Qualified  Property, Plant and Equipment (PPE) stated at P168.380 million
(net), or 37.09% of total assets, as at December 31, 2018 could
not be ascertained due to unreconciled discrepancy of P65.030
million between the accounting and property records;
 Non-recognition of expenses due to non-liquidation of cash

advances at year end amounting to P.523 million (excluding CIF);
and,
 Unreliable presentation of fund transfers accounts amounting to

P.462 million due to dormant balances for more than four years.
Maitum Qualified  Presence of “unreconciled amounts” in the assets and liabilities

accounts totaling P51 million and P5 million, respectively,
rendered the financial statements unreliable; and,
 Dormant Other Receivables account amounting to P1.054 million

still exists in the books despite prior years’ audit recommendation
to seek approval for its write-off.
Malapatan Qualified  Property, Plant and Equipment (PPE) stated at P339.800 million,
between the accounting and property records and non-
recognition of depreciation expenses;
 Cash in Bank balance amounting to P87.380 million is unreliable

due to unrecorded cash in bank balances, inclusion of balances
from closed bank accounts, existence of unsubstantiated
reconciling items, and non-adjustment of valid reconciling items;
 Inaccuracy of receivable and expenses due to non-liquidation of

cash advances amounting to P57.870 million.
Malungon Qualified  Property, Plant and Equipment (PPE) stated at P201.070 million,
between the accounting and property records and non-
recognition of depreciation expenses for several properties;
406
 Cash in Bank balance amounting to P66.86 million is doubtful due

to unreconciled balance between the book and bank in the net
debit amount of P0.87 million; and,
 Doubtful validity of Due to LGUs account totaling P33.600 million

due to absence of General and Subsidiary Ledgers.
South Cotabato Qualified  Inventories and its related expenses are unreliable due to
significant delays in the submission of the required reports
relating to its issuances and distribution and late and incomplete
of the Report on the Physical Count of Inventories with reported
balance of P314.240 million at year end;
 Inaccuracy of receivables relating to unreconciled and unadjusted

advances to contractors account in the amount of P3.090 million;
and,
 Non-reconciliation of some subsidiary ledger and cashbook

entries and inclusion of unrecovered deposits in a defunct
depository bank in an aggregate of P2.130 million which affected
the valuation of cash in bank accounts at year-end.
Cities
General Santos City Qualified  Cash on hand and in banks amounting P3.792 billion could not
be ascertained as there were no bank reconciliation statements,
continuous unreconciled balances and maintenance of dormant
bank accounts;
 P.699 million Petty Cash Fund was unliquidated;
 P84.291 million cash advances was unliquidated;
 P2.990 billion Property, Plant and Equipment (PPE)is unreliable

due to no physical count and reconciliation with controlling
accounts were not complete and
 P11.232 million Construction-In-Progress (CIP) were dormant for

five years and were not reported as completed and closed to
proper asset account; and,
 Non–recognition of P154.577 million receivable from Philippine

Health and Insurance Corporation (PHIC) cast doubts to the
reliability and fairness of presentation of the financial statements.
Koronadal City Qualified  Cash in Bank account is unreliable due to non-preparation of the
bank reconciliation statements and non-preparation of cashbooks
and reconciliation of records.
407
Municipalities
Banga Qualified  Property, Plant and Equipment account totaling P442 million, net
of accumulated depreciation, is doubtful due to the inexistence of
property cards and non-conduct of physical count; and,
 Trust Liability-DRRM account is understated by P4.880 million

due to the non-transfer of unutilized / unexpended balance of the
Quick Response Fund and the LDRRM-MOE of the current year
to the Special Trust Fund.
Lake Sebu Qualified  Due to the existence of unliquidated cash advances;
 Unreconciled PPE accounts; and,
 Unrecorded book reconciling items, totaling P144 million as of

December 31, 2018, which casts doubts on the reliability of the
affected reported assets, liabilities and expenses accounts.
Norala Qualified  Misstatements of the reported Property, Plant and Equipment and
Government Equity accounts on the financial statements for the
CY 2018.
Polomolok Qualified  Cash in Bank balance was doubtful due to the lack of review on
the validity of reconciling items in the Bank Reconciliation
Statements which remain outstanding for a long period of time
with a net amount of P11.400 million;
 Outstanding receivable accounts amounting to P22.400 million

were uncertain due to the insufficient conduct of regular and
periodic verification, analysis and validation of the existence of
the receivable accounts;
 P1.1 billion Property, Plant and Equipment (PPE), net of

accumulated depreciation, is doubtful due to the net difference
between the accounting records and the submitted Report on
Physical Count on Property, Plant and Equipment (RPCPPE) and
the capitalization of small tangible and semi-expendable items
totaling P1.300 million, net of depreciation;
 Unsettled P1.700 million dormant payables overstated the

liabilities and understated the government equity accounts;
 Erroneous transfer of P2.300 million savings from the capital

outlay projects under the current and continuing appropriations to
Special Trust Fund and unrecorded P4.600 million equipment of
LDRRMF under Disaster Response and Rescue Equipment
account misstated the balances of the accounts affected at the
year-end; and,
 Failure to set-up the Real Property Tax (RPT)/ Special Education

Tax (SET) Receivables at the beginning of the applicable year
misstated the asset and liability accounts of the Municipality as of
year-end.
408
Santo Niño Qualified  Due to the non-reconciliations of Cash in Bank accounts and
records, unreconciled balances of PPE, and non-liquidation of
cash advances, amounting to P18.900 million, P28.500 million
and P11.500 million, respectively, as of year-end which affect the
reliability of the reported assets, expenses and net income as of
December 31, 2018.
Surallah Qualified  Unreconciled difference of the reported cash balances between

the book and bank records amounting to P.080 million; and,
 Incomplete Report on the Physical Count of Property, Plant and

Equipment and its non-reconciliation with the book records in an
aggregate of P283.310 million.
T'boli Qualified  Due to the effects of the improper capitalization of Fuel, Repair
and Maintenance, and Subsidy Expenses, totaling P 18 million,
to Road Networks Account under PPE, thereby affecting the
reliability of the reported assets, expenses and equity as of year-
end.reliability of the reported assets, expenses and equity as of
year-end.
Tampakan Qualified  Cash in Bank cannot be ascertained due to the incomplete

maintenance of bank reconciliation report and the non-settlement
of long outstanding reconciling items;
 Loans Receivable-Others, Other Receivables and payable

accounts existed in the books for a long period of time thus casts
doubt on its legitimacy as bonafide receivable/obligation of the
Municipality;
 Property, Plant and Equipment (PPE), net of accumulated

depreciation, is doubtful due to the net difference of depreciation,
inclusion of fully depreciated assets which cannot be ascertained
due to non-preparation and submission of the Report on Physical
Count on Property, Plant and Equipment (RPCPPE) & Inventory
and Inspection Report of Unserviceable Property (IIRUP) and the
capitalization of small tangible and semi-expandable items;
 Intra-agency accounts amounting to P.511 million were doubtful

due to the unrecorded transactions; and,

Tax (SET) Receivables at the beginning of the year misstates the
asset and liability accounts of the Municipality as of year-end.
Tantangan Qualified  Cash in Bank – Local Currency, Current account amounting to

P53.500 million is uncertain due to the overstatement of P5.200
million and non-reconciliation of cash balances as well as the
preparation and maintenance of bank reconciliation statement
and cash books; and,
409
 Property, Plant and Equipment account totaling P254.800 million,
net of accumulated depreciation, is doubtful due to the existence
of variance of P24.200 million between the balance per books and
the inventory reports, non-recognition of depreciation, and non-
compliance to the transition provision for the recognition of local
road networks.
Tupi Qualified  Outstanding receivable accounts amounting to P11 million were

doubtful due to the insufficient conduct of regular and periodic
verification, analysis and validation of the existence of the
receivable accounts;
 Property, Plant and Equipment (PPE), net of accumulated

depreciation, is doubtful due to the net difference between the
accounting records and the submitted Report on Physical Count
on Property, Plant and Equipment (RPCPPE);
 Unexpended balance of the Quick Response Fund (QRF) and

Mitigation Fund-MOOE for CY 2018 were not transferred to the
Special Trust Fund at year-end, thereby, understating the Trust
Liability- DRRM and Transfers from General Fund of Unspent
DRRM Funds to the Trust Funds accounts;
 Unrecorded P.015 million equipment understated the Disaster

Response and Rescue Equipment account in the General Fund
books;
 Intra-agency accounts were doubtful due to the net difference of

P.407 million; and,

Tax (SET) Receivables at the beginning of the applicable year
misstated the asset and liability accounts of the Municipality as of
year-end.
Sultan Kudarat Unqualified
City
Tacurong City Qualified  Unrecorded Cash in Bank adjustments aggregating to P1.180

million which may have caused the understatement of the related
asset, income and expense accounts.
Municipalities
Bagumbayan Qualified  Property, Plant and Equipment (PPE) account balances of

P255.265 million could not be established due to various
deficiencies in property records/managemenbt and non-conduct
of physical count; and,
410
 Trust Liability DRRM balance of P.175 million is doubtful due to
understatement in the same account by P8.084 million.
Columbio Qualified  Assets and liabilities totaling P5.648 million and P.056 million,
respectively, are of doubtful existence, accuracy and validity due
to inadequacy of records;

respectively, could not be ascertained due to errors in recording
and inadequacy of records; and,
 Due from Other Funds and Due to Other Funds accounts showed
unreconciled net discrepancy balance of P4.720 million.
Esperanza Qualified  Property, Plant, and Equipment (PPE) account balances of

P235.108 million comprising 51.76% of the total assets could not
be established due to various deficiencies in property
records/management and non-conduct of physical count; and,
 Unreliable balance of Trust Liability-DRMM of P15.141 million

due to non-reconciliation of reports and non-disclosure in the
Notes to Financial Statements despite that this was already
observed in the previous year.
Isulan Qualified  Failure to set up receivables on Real Property Tax (RPT) and
Special Education Tax (SET) resulting in the understatement of
both RPT and SET Receivables and corresponding Deferred RPT
and SET Income by P47.693 million; and,
 Supplies and materials purchased totalling P7.960 million were

not recorded as inventory but directly charged to expenses
resulting in the misstatement of the inventory and expense
accounts.
Kalamansig Qualified  Overstatement of Cash in Bank-Local Currency Account and

Understatement of Cash-Local Treasury.
Lambayong Qualified  Due to understatement in the Cash-in-Bank Adjustments

aggregating to P10.110 million;
 Unreconciled book and balances of the DRRM fund totalling to

P2.698 million which resulted to either overstatement or
understatement of the cash balance presented; and,
 Gaps in the classification of account totalling P4.013 million which

have caused the understatement/overstatement of the identified
expense accounts.
411
Lebak Qualified  Construction and heavy equipment Account and related payable
and interest expense were misstated due to erroneous
recognition of assets as well as the non-recording of current
payable and interest expense.
Lutayan Qualified  Assets and liabilities accounts totaling P161.044 million and
P75.388 million, respectively, are of doubtful accuracy and
validity due to absence of Subsidiary Ledgers/Schedules and
failure to conduct a complete physical inventory of Property, Plant
and Equipment.
Palimbang Qualified  Collections amounting to P.345 million were not remitted to the
Liquidatng Officer on time exposing the funds to risks of loss or
misuse; and,
 Non-submission for audit evaluation of bid documents and

financial documents/reports for expenditures totaling P55.728
million grossly obstructs COA's legally mandated attestation on
management's assertions on the finanacial statements and
deprives management of timely improvement opportunities
resulting from efficiency, economy and effectiveness evaluation
of the LGU's operations.
President Quirino Qualified  Financial reports for CY 2018 were not submitted within the
prescribed period to the Audit Team, thus, preventing the timely
audit of accounts and financial transactions of the Municipality.
Senator Ninoy Qualified  PPE account balances of P87.841 million could not be
Aquino established due to various deficiencies in property
records/management and non-conduct of physical count.
Region XIII – CARAGA

Agusan del Norte Qualified  Cash in bank account balance totaling P1.301 billion as of
December 31, 2018 is doubtful due to non–submission of bank
reconciliation statements (BRS) and the pertinent bank
statements; net unreconciled balances amounting to P104.847
million between bank confirmations and books of accounts; and
net unreconciled balances amounting to P6.215 million between
the books of accounts and cashbooks, consequently affects the
fair presentation of the financial statements; and,
 Property, Plant and Equipment Accounts amounting to P2.087

billion in the Statement of Financial Position for the Calendar Year
2018 could not be verified and ascertained due to the failure of
the Provincial Accounting Office (PACCO) to maintain Property
Plant and Equipment (PPE) Ledger Card and Registries of Public
Infrastructures and the non-submission of the Report on the
Physical Count of the Property, Plant and Equipment (RPCPPE)
by the Provincial General Services Office (PGSO).
412
Cities
Butuan City Qualified  Cash-in-Bank and the Accounts Payable accounts are
understated by an aggregate amount of P.488 million due to the
failure of the Accountant to effect the required adjustments in the
books the total stale checks issued outstanding as of December
31, 2018;
 Accounts Receivable from stallholders delinquency aggregating

P1.306 million as of December 31, 2018 was not recorded in the
books of accounts due to the failure of the Office of the City
Economic Enterprise (OCEE) to submit to the Office of the
Accountant the Journal of Bills Rendered, thus not only
understated the Income and Total Asset Account, but also
exposed government funds to the risk of loss from unaccounted
collection; and,
 Net realizable value or recoverable amount of Receivable

Accounts cannot be ascertained due to the failure of the
Accountant to set up Allowance for Impairment-Other Receivable
Account (1-03-05-991), thus the Net Book Value of Due from
NGO/PO Account carried in the Statement of Financial Position
at P6.074 million is misstated.
 Financial and livelihood assistance granted by the previous

administration to Non-Government Organization/Peoples
Organization (NGO/PO) with an outstanding unliquidated balance
of P17.512 million as of December 31, 2018 was erroneously
charged to the Due from NGO/PO Account instead of the
Donation Account thus resulted in overstatement of the Total
Asset and understatement of the Equity accounts in the
Statement of Financial Position.
Cabadbaran Qualified  Cash in Bank between the Accounting and Treasury Books with
recorded amount of P888.033 million and P887.430 million,
respectively, was not reconciled resulting in a variance of P.602
million, thus, affecting the reliability of the Cash in Bank account
 Property, Plant and Equipment (PPE) and Inventory accounts

could not be verified and ascertained due to incomplete
information in the Report on the Physical Count of the Property,
Plant & Equipment (RPCPPE) and the non-submission of the
Report on the Physical Count of Inventories (RPCI);
 Unble to inform the City General Services Office or furnish the

documents covering transfer of property and equipment from the
Department of Health, Regional Office No. 13 to the City
Government amounting P3.233 million, thus, said property and
413
equipment were not recorded in the City’s books and
accountability thereof was not established and exposed the
property to the risk of loss or theft; and,
 Accounts Payable which remained outstanding for two to three

years amounting to P.758 million were not reverted to the
unappropriated surplus of the general fund, thus, deprived the
City from appropriating the amount to more beneficial programs
and projects and affected the fair presentation of the affected
Municipalities
Buenavista Qualified  Property, Plant and Equipment (PPE) Accounts in the Statement
of Financial Position for the Calendar Year 2018 could not be
validated due to the unreconciled net variance amounting to
P81.132 million against the incomplete Report on the Physical
Count of the Property, Plant & Equipment (RPCPPE) and non-
provision of depreciation charges of some assets.
 Inventory Accounts in the Statement of Financial Position for the

Calendar Year 2018 totaling P36.674 million, could not be relied
upon due to the failure to maintain the Supplies Ledger Cards by
the Accounting Office and non-submission of Report on the
Physical Count of Inventories (RPCI); and,
 Advances and Other Receivables accounts as of December 31,

2018 are doubtful due to discrepancies noted in the schedule of
advances amounting to P10.658 million, thus, affects the fair
presentation of the financial statements.
Carmen Qualified  Property, Plant and Equipment Accounts in the Statement of

Financial Position for the Calendar Year 2018 in the total amount
of P166.897 million could not be validated due to non-submission
of Report on the Physical Count of the Property, Plant &
Equipment (RPCPPE).
Jabonga Qualified  Property, Plant and Equipment and Inventories amounting to

P145.157 million and P.180 million, respectively, could not be
ascertained due to failure to conduct the required physical
inventory and non-preparation and submission of inventory
report;
 Depreciable properties and equipment amounting to P122.820

million were not provided with depreciation due to absence of
updated PPE records, thus, the recorded balance of depreciable
PPE were not properly stated in their carrying amounts; and,
414
 Understatement of the accounts Subsidy to Other Funds and
Trust Liabilities – DRMM by P2.448 million due to failure to
transfer unexpended Local Disaster Risk and Management Fund
to the Special Trust Fund in the Special Trust Fund books.
Kitcharao Qualified  Unreliable balances of the Property, Plant and Equipment (PPE)
and Inventory accounts amounting to P331.302 million and P.525
million, respectively, due to incomplete information in the Report
on the Physical Count of the Property, Plant & Equipment
(RPCPPE) and the non-submission of the Report on the Physical
Count of Inventories (RPCI).
Las Nieves Qualified  Property, Plant and Equipment (PPE) and Inventories presented
in the Statement of Financial Position at a carrying amount
totaling P261.393 million and P3.458 million, respectively, could
not be relied upon due to non-submission of Report on the
Physical Count of Property Plant and Equipment (RPCPPE) and
Report on the Physical Count of Inventories (RPCI).
Consequently, we were unable to determine whether any
adjustment to the reported amount was necessary.
Magallanes Qualified  Property, Plant and Equipment (PPE) and Inventory accounts
amounting to P176.046 million and P.372 million, respectively,
could not be verified and ascertained due to incomplete
information in the Report on the Physical Count of the Property,
Plant & Equipment (RPCPPE) and the non-submission of the
Report on the Physical Count of Inventories (RPCI).
Nasipit Qualified  Property, Plant and Equipment Accounts amounting to P156.864

million in the Statement of Financial Position for the Calendar
Year 2018 could not be verified and ascertained due to
incomplete information in the Report on the Physical Count of the
Property, Plant & Equipment (RPCPPE).
Remedios T. Qualified  Property, Plant and Equipment accounts amounting to P129.166

Romualdez million in the Statement of Financial Position for the Calendar
Year 2018 could not be verified and ascertained due to
incomplete information in the Report on the Physical Count of the
Property, Plant & Equipment (RPCPPE).
Santiago Qualified  Physical inventory of Property, Plant and Equipment (PPE) and
Inventories carried in the books totaling P212.612 million and
P8.387 million, respectively, was not conducted contrary to
Section 124 of the New Government Accounting Systems Manual
Volume I, thus, rendering the accounts Property, Plant and
Equipment (PPE) and Inventories in the Statement of Financial
Position unreliable;
415
million were not provided with depreciation in CY 2018, thereby,
rendering the Asset and Expense accounts overstated and
understated, respectively, by the amount of the depreciation that
should have been provided; and,
 Unexpended Local Disaster Risk Reduction and Management

Fund (LDRRMF) for CY 2018 and 2017 amounting P4.239 million
was not transferred to the Special Trust Fund Account “Trust
Liability – DRRMF” in the Trust Fund books, understating the
accounts “Subsidy to Other Funds and Trust Liabilities –DRRMF.
Tubay Qualified  Property, Plant and Equipment (PPE) and Inventories carried in
the books totaling P62.714 million and P.428 million, respectively,
could not be relied upon due to inability to conduct physical count.
Thus, rendering the balances reported in the Statement of
Financial Position unreliable. Consequently, we were unable to
determine whether any adjustment to the reported amount was
necessary.
Agusan del Sur Qualified  Cash in Bank – Local Currency, Current Account (LCCA) and
Cash in Bank - Local Currency, Savings Account (LCSA) in the
total amount of P2.748 billion could not be ascertained due to
existence of a variance with a net amount of P1.364 million
between the records of the accounting unit and the treasury,
thereby affecting the fairness of the presentation of the Financial
Statements;
 Property, Plant and Equipment account recorded in the books at

P4.396 billion cannot be ascertained due to the unreconciled
records between the accounting unit and the General Services
Office and Inventory Committee; and,
 Fund transfers to Local Government Units (LGUs) amounting to

P94.067 million for the implementation of various projects
remained unliquidated at year-end, casting doubts on the
propriety of the reported balance as shown in the Statement of
Financial Position.
City
Bayugan City Qualified  Property, Plant and Equipment as of December 31, 2018
amounting to P2.026 billion could not be ascertained due to
failure of the Management to conduct actual physical count of
properties and submit report thereof, thus affecting the reliability
of PPE accounts in the financial statements; and,
 Balances of various assets and liabilities accounts totaling to

P88.738 million and P1.486 million, respectively, was not
supported with sufficient details inconsistent with Section 111 of
P.D. 1445, thus rendering the accuracy and reliability of the
related account balances doubtful.
416
Municipalities
Bunawan Qualified  Property, Plant and Equipment (PPE) accounts as at December
31, 2018 amounting to P190.093 million (except Construction in
progress and Infrastructure accounts) remained unreliable due to
absence of Report on the Physical Count of Property, Plant and
Equipment (RPCPPE), unrecorded cost of heavy equipment and
non-provision of depreciation on some PPE.
Esperanza Qualified  PPE account as of year-end totalling P583.514 million was

unreliable due to (a) unreconciled balance between the book
balances and Report on Physical Count of Property, Plant and
Equipment (RPCPPE) of P152.029 million; (b) failure to maintain
PPE Ledger Cards in the Accounting Office; and (c) non-provision
of depreciation for some PPE, thereby affecting the fair
La Paz Qualified  Property, Plant and Equipment (PPE) and Inventory accounts
amounting to P342.805 million and P.534 million, respectively, in
the Statement of Financial Position is doubtful due to 1) conduct
of physical inventory was not undertaken for all PPE and non-
conduct of physical count for Inventory accounts; non-
reconciliation between Accounting Office and Inventory
Committee with a difference of P44.630 million; and, 3)
incomplete information for some items of the PPE, thus rendering
the PPE and Inventory Accounts unreliable.
Loreto Qualified  Non submission of Reports of Physical Count of Inventory (RPCI)

for Inventory account totaling P11.008 million; and,
 Property, Plant and Equipment (PPE) account balance of

P300.315 million does not reconcile with the balance per Report
of Physical Count of the said accounts due to non-reconciliation
of the records maintained by the Accounting and Property Units,
thus existence, accuracy and reliability of these accounts in the
financial statements cannot be ascertained.
Prosperidad Qualified  Property Plant and Equipment amounting to P347.407 million is

doubtful due to the failure to conduct comprehensive physical
inventory as at December 31, 2018.
Rosario Qualified  Construction-In-Progress accounts amounting to P210.695

million could not be ascertained due to non-reclassification of
completed projects to its appropriate PPE account, thus,
overstating/understating the affected accounts in the financial
statements.
San Francisco Qualified  Land under PPE and Investment Property account amounting to
P558.582 million is doubtful of validity due to the absence of
transfer certificates of title (TCTs), thus, rendering the ownership
thereto uncertain and exposing the Municipality to risk of third-
party claims and illegal dispositions;
417
 Cash advances excluding Confidential Fund totaling P5.201
million remained outstanding as at year end due to non-
submission of liquidation documents by the Accountable Officers
of their cash advances within the prescribed period and the
Management did not enforce strictly the prescribed rules and
regulations in granting, utilization and liquidation of cash
advances, hence, no proper accounting can be made thereof;
 Funds downloaded to the Barangays amounting to P3.673 million

remained unliquidated as of December 31, 2018, thus providing
no basis for its proper accounting. Of the total amount, P.918
million remained outstanding for more than two years, thus,
casting doubt on the proper utilization of the said fund.
San Luis Qualified  Property, Plant and Equipment (PPE) accounts of the
Municipality appearing in the Statement of Financial Position with
net amount of P274.231 million could not be determined due to
the non-conduct of comprehensive physical inventory, moreover,
reconciliation with the accounting records could not be attained.
Santa Josefa Qualified  Property, Plant and Equipment (PPE) accounts as of December
31, 2018 could not be established due to unreconciled balance
between the RPCPEE of P157.696 million, incomplete conduct of
physical count of PPE and non or erroneous computation of
depreciation, thus affecting the fair presentation of the PPE
Sibagat Qualified  Inventory and Property, Plant and Equipment (PPE) account
balances of P2.145 million and P220.994 million, respectively,
does not reconcile with the balance per Report of Physical Count
of the said accounts due to the non-reconciliation of the records
maintained by the Accounting and Property Units thus, existence,
accuracy and reliability of these accounts in the financial
statements cannot be ascertained.
Talacogon Qualified  Failure of the Inventory Committee to conduct comprehensive

physical inventory taking, failure of the Municipal Accounting
Office (MAO) and Municipal General Services Office (MGSO) to
maintain Property, Plant and Equipment Ledger Cards and
Property Cards, respectively, and the non-reconciliation of the
property and accounting records renders the year-end balance of
Property, Plant and Equipment accounts totalling P366.135
million unreliable.
Trento Qualified  Cash and Cash Equivalents account balance in the Statement of
Financial Position totaling to P254.015 million could not be
ascertained due to: (a) failure to record/adjust in the books
various reconciling items; (b) accumulation of doubtful items
owing to scrutiny of its causes; and (c) failure to reconcile the
Accounting and Treasury books, thereby rendering the cash in
bank account unreliable;
418
 Inventory accounts amounting to P9.994 million and the Property,
Plant and Equipment (PPE) amounting to P525.676 million were
doubtful due to the: misclassification of inventories, non-
submission of Report of Physical Count for Inventories, inclusion
of damaged, disposed, non-functional properties and presenting
incomplete information for some items of the PPE;
 Negative balances, unrecorded loan repayments, unverified, and

unreconciled accounts totaling P12.691 million, P10.739 million,
P.882 million and P59.592 million, respectively, were disclosed in
the financial statements rendering the reliability, existence and
accuracy of the affected accounts presented thereat.
Veruela Qualified  The Inventory and Property, Plant and Equipment (PPE) account
balances of P.198 million and P171.173 million, respectively, do
not reconcile with the balance per Report of Physical Count of the
said accounts due to the non-reconciliation of the records
maintained by the Accounting and Property Units thus, existence,
accuracy and reliability of these accounts in the financial
statements cannot be ascertained.
Surigao del Norte Qualified  Despite prior year’s audit finding and recommendation, the LGU’s
year-end physical inventory of all Property, Plant and Equipment
(PPE) was still not conducted and PPE ledgers card and
Acknowledgment Receipts of Equipment were not maintained,
thus, the correctness and validity of the PPE balance totaling
P5.584 billion could not be ascertained and their existence could
not be established.
City
Surigao City Qualified  Property, Plant and Equipment with a net book value of P934
million was not ascertained due to non-conduct of annual physical
count, and non-maintenance of Property Cards, and updated
Property Acknowledgment Receipt; and,
 Various Assets and Liabilities accounts recorded as “for recon” in

the e-PPSAS Subsidiary Ledger of the City Government of
Surigao with an aggregate amount of P65.700 million and
P91.700 million, respectively, could not be established due to the
absence of schedules and supporting documents, adversely
statements.
Municipalities
Alegria Qualified  Non-reconciliation between the cash and cash equivalents

account ledgers and cashbooks with a variance of P.014 million
as of December 31, 2018 affecting the fair presentation of the
account balance.
419
 Cash in Bank – LCCA account balance at P6.331 million as of
December 31, 2018 is doubtful due to non-preparation of the
Bank Reconciliation Statements (BRSs);
 Non-reconciliation of the RPCI and RPCPPE with the ledgers and

failure of the agency to keep records of the inventory, property,
plant and equipment (PPE) and biological asset accounts in the
amount of P.100 million, P117.791 million and P.084 million,
respectively, rendering the amounts reflected in the financial
statements as of December 31, 2018 doubtful as to validity,
accuracy and existence;
 Failure of the agency to capitalize and disclose the borrowing

costs for CY 2018 totaling P2.136 million affecting the fair
presentation of the financial statements; and,
 Non-recognition of the unexpended portion of the CY 2018

LDRRMF in the books therefore misstating the equity and liability
accounts in the amount of P.490 million.
Bacuag Qualified  Property, Plant and Equipment (PPE) totaling P72.564 million is
unreliable due to no annual physical count of PPE was conducted
and no Property Cards and Ledger Cards on PPE were
maintained by the General Service Officer/Municipal Treasurer
and Municipal Accountant’s Office, respectively and no
depreciation is recognized on depreciable PPE accounts;
 Due from Other Funds and Due to Other Funds as reciprocal

accounts with balances of P4.892 million and P2.227 million,
respectively, are doubtful due to non-reconciliation of their
balances and resulted to a variance of P2.665 million; and,
 Due from LGUs accounts amounting to P.190 million cannot be

ascertained due to non-demand by LGU Bacuag from concerned
LGUs on the liquidation and/or refund on the funds transferred
and non-moving for more than six (6) years.
Burgos Qualified  Cash in Bank accounts as at year-end in the amount of P22.269

million was understated by P.152 million due to inadvertent
exclusion of the Philhealth Trust Fund account and the bank
account of General Fund-LDRRMF was reported with an
overstatement of P.811 million due to the inclusion of Special
Trust Fund of LDRRMF account thereby, casting doubts as to the
accuracy and fair presentation of the Cash in Bank accounts and
may mislead the users of the financial statements;
 Collections which averaged P.007 million were not remitted daily

to the Liquidating Officer thus incurred delays in remittances that
ranged from 1-165 working days, then the delays as well in the
deposit of collections resulted in the highest accumulated balance
of P.465 million during the year and incurred delays that ranged
from 3-69 working days;
420
 Cash-Local Treasury is understated by P.347 million for failure to

account unremitted collections as at year-end thereby exposing
the funds to possible loss, theft or misappropriation and affecting
the timely recognition of income and cash accounts in the
 Cash Advances for official travel amounting to P.654 million were

recorded as outright expense and disregarded the submission of
required liquidation, thereby, resulting in the absence of
accountability to concerned accountable officers and a departure
of the matching principle which may lead to the risk of loss and
misappropriation and may affect the fair presentation of the
 Property, Plant and Equipment and Biological Assets accounts

totaling P82.46 million and P0.45 million, respectively, as at year-
end were unreliable due to the absence of Property and Ledger
Cards, and the non-creation of an inventory committee resulted
to the continued wanting of periodic physical inventory report to
ascertain the validity, existence and accuracy of the said
accounts thereby, exposing these government properties to the
possibility of loss and/or misuse due to absence of monitoring;
 Fund transfer received from Department of Science and

Technology (DOST) – RO XIII totaling P.500 million remained
outstanding for more than 3 years as of December 31, 2018 due
to wanting of liquidation reports from the Municipality, thus,
casting doubt on the proper utilization of the fund and affected the
fair presentation of balances in the financial statements;
 Prescribed policies and procedures for an effective inventory

management of supplies and materials such as perpetual
inventory system, maintenance of supplies and materials stock
cards and ledger cards, preparation of supplies and materials
issued and actual physical count of inventories were still not
observed and performed due to misapplication of accounting
principles, inadequate planning with the concerned personnel
and lack of coordination mechanism which indicates inaccurate
inventory records and weakness of internal control over supplies
and materials that may affect the fair presentation of the financial
statements.
 Loan Proceeds in the total amount of P23.998 million were still

recorded as Due to NGAs account instead of the proper Loans
Payable account and the proposed adjusting journal entries in last
year’s audit were not booked yet due to the Agency’s lack of
information as to what specific fund should the loans be charged.
Hence, subsequent entries related to the amortization of the said
loan were not also properly charged to its proper accounts. In
effect, the financial statements to be presented at year-end shall
421
be materially misstated and the unreliable assessment of the
liquidity and solvency may affect the quality of public service of
the Municipality to its constituents; and,
Special Trust Fund account established for the unexpended

balance of the LDRRMF in the amount of P.811 million was
erroneously recorded in the General Fund-LDRRMF books
instead of the Trust Fund books, thereby, not establishing a Trust
Liability-DRRM account in the Trust Fund books which affected
the fair presentation of affected accounts in the financial
statements.
Claver Qualified  Cash in Bank – Local Currency Current Account balance of

P636.040 million is doubtful due to unrecorded prior year’s
reconciling items totaling P.269 million of the Bank Reconciliation
Statements (BRS) in the books of the agency and no BRS were
prepared by the Municipal Accountant on two (2) depository bank
accounts;
 Property, Plant and Equipment (PPE) and Depreciation

Expense accounts amounting to P972.257 million and P19.393
million, respectively, were unascertained due to no annual
physical count of PPE was conducted and no Property Cards
and Ledger Cards on PPE were maintained by the General
Service Officer and Municipal Accountant’s Office, respectively;
and ongoing construction of infrastructure projects funded by the
20% Development Fund totaling P6.770 million were not
recorded as Construction in Progress (CIP);
 Accounts Payable-Current account balance of P80.659 million is

doubtful due to inclusion of P25.133 million or 31.16% which have
been outstanding and/or not settled for more than 12 months and
recording of some obligations with no valid claimants and not
supported with sufficient evidence prior to calendar year 2018;
 Due from NGOs/POs account totaling P3.535 million is unreliable

due to no identified valid recipients of the transferred fund
amounting to P2.535 million or 71.82% and non-liquidation by
CLACOFARMCO of P1 million which was granted prior to year
2018 and no assurance that it was utilized to its intended purpose;
 Balances of all accounts in the General Fund is doubtful due to

non-preparation and non-maintenance of subsidiary ledgers, trial
balance and financial statements by LGU Claver for all special
accounts, thus difficulty in the validation of management’s
assertions on the financial statements as these were reported in
a lump-sum amount in the General Fund and evaluation whether
the income generated by the economic enterprises are sufficient
to meet their respective operating costs; and,
422
 Uncollected rent income on the lease of space in the market
premises of LGU Claver and penalties thereon by delinquent
Stallholders were not accounted and recorded in the books of the
LGU.
Dapa Qualified  Property, Plant and Equipment (PPE) accounts with a total
amount of P172.285 million as of December 31, 2018 are still of
doubtful validity, accuracy and existence due to the continued
failure by the Municipality to update records and conduct periodic
physical inventory of its property;
 Failure to record in the books of accounts the unused portion of

the employees earned leave credits totalling P6.317 million as of
December 31, 2018 and no fund was ever set-up for the same
thereby may affect the timely and expeditious release of the
retirement pay and other benefits of all retiring employees of the
Municipality; and,
 Unutilized LDRRMF for CYs 2016 to 2018 with an aggregate

amount of P5.581 million was not transferred to Special Trust
Fund Account and disbursements thereof for CY 2018 totaling
P.372 million were made without adhering to existing rules and
regulations in the allocation and utilization of the fund as defined
in Item 6 of the NDRRMC-DILG-DBM Joint Memorandum Circular
No. 2013-1 dated March 25, 2013 and COA Circular No. 2012-
003 dated October 29, 2012.
Del Carmen Qualified  Dormant unliquidated cash advances aged 10 years and above
totaling P5.065 million were not acted upon by the Municipal
Mayor and Accountant to facilitate their write-off resulting to
overstatement of the agency’s assets in the same amount;
 Investment Property and Property, Plant and Equipment (PPE)

accounts as of December 31, 2018 totaling P363.479 million are
still of doubtful existence, accuracy and validity due to continued
non-maintenance of PPE Cards, non-issuance of Property
Acknowledgment Receipt (PAR) and failure of the Municipality to
submit to COA not later than January 31, 2019 the Report on
Physical Count on PPE due to laxity of the Inventory Committee
to facilitate its preparation and non-religious conduct of the
required annual physical count on Investment Property and
Property, Plant and Equipment;
 Unreconciled difference of P 82.520 million between the

accounting ledgers and the cashbooks on the reported ending
balances of Cash accounts due to the absence of periodic
reconciliation of the Accounting and Treasury Offices which
exemplified a breakdown of the internal control of the Agency,
thereby affecting the fairness of the presentation of the Financial
Statements;
423
 Balances of Intra-Agency reciprocal accounts of Due from Other
Funds and Due to Other Funds as at December 31, 2018 did not
reconcile which showed a net difference of P.073 million, thus,
casted doubts on the accuracy and reliability of the said accounts
in the financial statements; and,

management of supplies and materials such as: maintenance of
supplies and materials stock cards and ledger cards, preparation
of summary of supplies and materials issued and the conduct of
actual physical count of inventories, were still not observed and
complied as provided for in Section 119,120,121 and 124 of
Volume I of the New Government Accounting System (NGAS)
Manual due to lack of knowledge and inadequate planning and
coordination mechanism which indicates inaccurate inventory
records and weakness of internal control over supplies and
materials that may affect the fair presentation of the accounts in
the financial statements.
General Luna Qualified  Property, Plant and Equipment (PPE) accounts amounting to
P59.727 million as of December 31, 2018 are still of doubtful
validity, accuracy and existence due to the continued failure of
the Municipality to keep records and conduct periodic physical
inventory of its properties;

the employees earned leave credits totaling P9.275 million as of
Municipality;
 Information and Communication Technology Equipment procured

by the Municipality with a total cost of P1.255 million were not
properly recognized and recorded and effective controls on
government properties were not observed, thus, casted doubt as
to accuracy, validity and existence of the reported balance in the
 Unutilized LDRRMF for CYs 2016 to 2018 with an aggregate

amount of P10.566 million was not transferred to Special Trust
Fund Account, thus, exposing the fund to a higher risk of possible
misuse and financial statements were not fairly presented.
Gigaquit Qualified  Property, Plant and Equipment (PPE) and Depreciation Expense
accounts of P99.883 million and P12.563 million, respectively,
are unreliable due to no report on the physical count of PPE was
submitted and no Property Cards on PPE were maintained by
the General Service Officer and non-recognition of depreciation
on some depreciable PPE accounts.
424
 Due from LGUs and Due from NGOs/POs as reciprocal accounts
with balances of P-0- and P.006 million, respectively, are doubtful
due to non-reconciliation their balances and resulted to a variance
of P.006 million.
 Breeding Stocks account of P.239 million is unreliable due to non-

maintenance of Property Card and Ledger Card on Work, Other
Animals and Breeding Stocks by the Property Office and
Municipal Accountant’s Office whose balance existed since
calendar year 2012;
 Construction in Progress, Advances for Payroll, Advances to

Contractors, Due to NGAs, Guaranty/Security Deposits Payable,
and Other Maintenance and Operating Expenses accounts are
doubtful due to debiting the Due to National Government
Agencies (NGAs) account in recording the issuance of check in
the utilization of fund transfers totaling P15.988 million; and,
 Donations account and Due from Local Government Units

account was overstated and understated, respectively, due to
recording the cash assistance of P.788 million by LGU Gigaquit
to eleven (11) Barangays for the implementation of projects/
programs/ activities (PPAs) and purchase of goods as a direct
expense instead of receivables.
Mainit Qualified  Year-end physical inventory of Property, Plant and Equipment

(PPE) was not conducted, PPE Property Cards were not
maintained and PPE Ledger Cards were not updated, thus, the
correctness, completeness and reliability of the PPE account
balance of P179.913 million could not be ascertained and their
existence could not be established; and,
 Cash in Bank – Local Currency, Current Account balance in the

Trust Fund could not be ascertained due to the unadjusted
reconciling items of stale checks amounting to P.368 million,
thereby affecting the fair presentation of the cash account in the
financial statements as of year-end.
Malimono Qualified  Non-reconciliation of the cash balances between the cashbooks

and ledgers posting a variance of P.526 million, rendering the
Cash and Cash Equivalents account which is stated in the
statement of financial position at P38.634 million as of December
31, 2018, doubtful as to accuracy and reliability;
 Receivable and Payable Accounts amounting to P33.816 million

and P91.944 million, respectively, or a total of P125.761 million
are of doubtful existence, accuracy and reliability due to the
absence of supporting schedules and other specific information;
 Failure of the Municipality to keep records and conduct physical

count of its Inventories, Property, Plant and Equipment (PPE) and
Biological Assets in CY 2018 in the amount of P.852 million,
425
P163.338 million and P.051 million, respectively, rendering the
amounts reflected in the financial statements as of December 31,
2018 doubtful as to validity, accuracy and existence;
 Non-reclassification and failure to present in the financial

statements the current portion of the Loans Payable – Domestic
Account as current liabilities in the amount of P1.084 million and
failure to capitalize and disclose the borrowing costs directly
attributable to the construction of a qualifying asset totalling
P7.542 million, thus, the financial statements were not fairly
presented.
Pilar Qualified  The Property, Plant and Equipment (PPE) Accounts with a total
amount of P113.707 million as of December 31, 2018 are of
doubtful validity and accuracy due to the absence of records and
the Municipality’s continued failure to conduct physical inventory
of its property; and,

Municipality.
San Benito Adverse  Property, Plant and Equipment (PPE) and Depreciation Expense
are unreliable due to no annual physical count of PPE was
conducted and no Property Cards and Ledger Cards on PPE
were maintained by the General Service Officer/Municipal
Treasurer and Municipal Accountant’s Office, respectively;
 Due from LGUs and Due from NGOs/POs accounts amounting to

P.632 million and P.060 million, respectively, cannot be
ascertained due to non-demand by LGU Placer from the
NGOs/POs and barangays on the liquidation and/or refund on the
funds transferred totaling P.692 million granted in calendar years
2016 and below;
 Due to LGUs account was overstated due to non-submission of

liquidation reports by LGU Placer to LGU Bacuag and
Development Bank of the Philippines on the financial assistance
received for specific activities totaling P.030 million despite the
full utilization of the funds and incorrect use of accounts in receipt
and utilization thereof; and,
 Guaranty/Security Deposits Payable account was understated

due to recording of retention money totaling P.402 million on the
Construction of Material Recovery Facility Phase 1 and
Construction of Placer Integrated Land Transportation and Food
Terminal Phase II as Other Payables instead of
Guaranty/Security Deposits Payable.
426
San Benito Adverse  Cash Local Treasury accounts in the total amount of P2.786
million could not be established due to the absence of details
and/or failure of the Accounting Office to maintain Subsidiary
Ledger for each accountability of the Municipal Treasurer and
other Accountable Officers;
 Cash in bank account balances in the Cashbook totaling P28.156

million did not reconcile with the balances in the General Ledger
of P31.543 million resulting in a variance of P3.387 million,
thereby casting doubts on the validity and existence of the
reported balance in the financial statements;
 Cash in bank account balances in the Cashbook totaling P28.156

million did not reconcile with the balances in the General Ledger
of P31.543 million resulting in a variance of P3.387 million,
thereby casting doubts on the validity and existence of the
reported balance in the financial statements;
 Bank Reconciliation Statements (BRS) of the Municipality were

not prepared and submitted to the Office of the Auditor all its bank
accounts on each fund which have a total cash balance of
P31.543 million as of December 31, 2018. Hence, casting doubts
as to the existence, accuracy and correctness of the recorded
Cash in Bank –Local Currency, Current Account balance;

management of supplies and materials such as: perpetual
inventory system, maintenance of supplies and materials stock
cards and ledger cards, preparation of supplies and materials
issued and actual physical count of inventories were still not
observed and complied;
 Property, Plant and Equipment (PPE) accounts as of December

31, 2018 totaling P110.195 million are still of doubtful existence,
accuracy and validity due to continued non-maintenance of PPE
Cards, non-issuance of Acknowledgement Receipt for Equipment
(ARE) and failure of the Municipality to submit to COA not later
than January 31, 2019 the Report on Physical Count on PPE
(RPCPPE) due to laxity of the Inventory Committee to facilitate its
preparation and non-religious conduct of the required annual
physical count on Investment Property and Property, Plant and
Equipment;

Funds and Due to Other Funds as of December 31, 2018 did not
reconcile which showed a net difference of P1.111 million, thus,
casted doubt on the reliability of the balances of the said accounts
427
 Special trust account established for the unexpended balance of
the LDRRMF in the amount of P.703 million was erroneously
recorded in the GF books instead of the Trust Fund books,
thereby not establishing a Trust Liability-DRRM account in the
Trust Fund books which affected the fair presentation of affected
accounts in the financial statements;
 Four (4) Inter-Agency Payable accounts showed

abnormal/negative balances in the financial statements in the
total amount of P8.886 million in contrary to sound accounting
practice and principles dictating liabilities accounts to have a
normal credit balances, thus, reliability and accuracy of the
accounts cannot be ascertained which may affect the fairness of
presentation in the Financial Statements;
 Balance of Prior Period Errors account under the Equity section

of the Consolidated Financial Position as of December 31, 2018
in the amount of P8.248 million was not supported with subsidiary
ledgers and detailed schedule, thus, casting doubts as to the
validity and reliability of the account balance and may affect the
fairness of presentation in the financial statements; and,
 Dormant unliquidated cash advances amounting to P1.166

million that are long outstanding in the books for more than 10
years were not acted upon to facilitate in write-off thus resulting
in overstatement of the agency’s assets in the same amount.
San Francisco Qualified  Failure of the Municipality to keep records and submit a report on
the physical count of its Inventory and Property, Plant and
Equipment (PPE) in CY 2018 in the amount of P.053 million and
P42.762 million, respectively, rendering the amounts reflected in
the financial statements as of December 31, 2018 doubtful as to
validity, accuracy and existence; and,
 Recording of the Level III Water System as part of the Property,

Plant and Equipment (PPE) having a book value of P8.660 million
as of December 31, 2018 despite the transfer of ownership to
SMWD, render the account not fairly stated.
San Isidro Qualified  Dormant receivables and unliquidated cash advances amounting
to P.257 million and P3.385 million, respectively, that are long
outstanding in the books were not acted upon to facilitate in write-
off resulting in overstatement of the agency’s assets in the same
amount;
 Prescribed policies and procedures for an effective control of

government properties such as maintenance of supplies and
materials stock cards and ledger cards, issuance of requisition
and issue slip, preparation of supplies and materials issued and
conduct of semi-annual physical count. Such condition likewise
indicates weakness of internal control over properties of the
Municipality which may affect the fair presentation of its financial
statements.
428
 Receivables arising from disallowances/charges totaling P1.476

million which have not become final and executory was
erroneously recognized in the books of accounts, resulting in a
materially misstated financial statement affecting its fair
presentation;

Funds and Due to Other Funds as of December 31, 2018 did not
reconciled which showed a net difference of P2.344 million, thus,
casted doubt on the reliability of the balances of the said accounts

P143.074 million as of December 31, 2018 is still of doubtful
accuracy and validity due to continued non-maintenance of PPE
Cards and PPE Ledger Cards, non-issuance of Acknowledgment
Receipt for Equipment and the continued failure of the
Municipality to conduct the required annual physical inventory
count due to lack of planning and coordination with the Inventory
Committee;
 Non-presentation of the current portion of the LGU’s Loans

Payable affected the assessment of its liquidity and solvency for
the settlement of its liabilities and distinguishing the net assets
that are continuously circulating as working capital from those
used in the entity’s long-term operations;
 Bank balance of General Fund account as at year-end was

overstated by P.025 million due to unrecorded disbursement and
the reported bank balances of General Fund-LDRRMF and 20%
Local Development Fund as at year end were both understated
due to undeposited fund transfers of P.434 million and P.873
million, respectively, thereby affecting the reliability, accuracy,
and fair presentation which may mislead the users of the financial
statements;
 Collections received by the Revenue Collection Clerks were still

not remitted daily to the Municipal Treasurer resulting in
accumulated unremitted cash in the maximum amount of P.497
million during the year, and delayed remittance and deposit
ranged from one to 36 days and one to 38 days, respectively and
Cash-Local Treasury is understated by P.278 million for failure to
account unremitted collections as of year-end thereby exposing
the funds to possible loss, theft or misappropriation and affecting
the timely recognition of income and cash accounts in the
financial statements;and,
 Stale checks totaling P.034 million remained unadjusted in the

books of accounts, thereby affecting the fair presentation of the
cash account in the financial statements as of year-end.
429
Santa Monica Qualified Unreconciled difference of P1.140 million between the cash book
and ledger balances due to absence of periodic reconciliation
between the Accounting and Treasury Offices and the non-
preparation of subsidiary ledgers for each account and various
disbursements were not charged against its proper fund account
which caused the balances of General Fund-IRA and Special
Trust Fund to be understated by P.084 million and P.692 million,
respectively, while the LDRRMF-Regular Fund to be overstated
by P.776 million. Hence, accuracy and reliability of these account
balances in the financial statements cannot be ascertained;
 Collections which averaged P.004 million were not remitted daily

to the Liquidating Officer thus incurred delays in remittances that
ranged from 1-149 working days, then the delays as well in the
deposit of collections resulted in the highest accumulated balance
of P.641 million during the year and incurred delays that ranged
from 1-41 working days and Cash-Local Treasury account is
understated by P.571 million for failure to account unremitted
collections as at year-end thereby exposing the funds to possible
loss, theft or misappropriation and affecting the timely recognition
of income and cash accounts in the financial statements;
 Stale checks totaling P1.555 million remained unadjusted in the

books of accounts in contravention to Section 59 of the New
Government Accounting System (NGAS) Manual for LGUs,
Volume I resulting in the understatement of the Cash in Bank –
Local Currency, Current Account (LCCA) by the same amount,
and other appropriate liability and equity accounts;
 Reported balances of P.985 million and P.191 million for Intra-

Agency reciprocal accounts of Due from Other Funds and Due to
Other Funds, respectively as of December 31, 2018 did not
reconcile which showed a net difference of P.794 million, thus
casted doubts on the accuracy and reliability of the said accounts
in the financial statements; and,
 Special trust account established for the unexpended balance of

the LDRRMF in the amount of P2.786 million was erroneously
recorded in the General Fund books instead of the Trust Fund
books, thereby not establishing a Trust Liability-DRRM account
in the Trust Fund books which affected the fair presentation of
Sison Qualified  Non-reconciliation of the balances of the cashbooks and ledgers

and non-submission of bank reconciliation statements casting
doubt to the reliability of the cash and cash equivalents account
balance of P37.610 million as of December 31, 2018;
 Failure by the Municipality to keep records and conduct physical

count of its Inventory, Investment Property, Property, Plant and
430
 Equipment and Biological Assets Accounts in CY 2017 in the
amount of P2.889 million, P3 million, P159.195 million and
P1.016 million, respectively, rendering the amounts reflected in
the financial statements as of December 31, 2018 doubtful as to
validity, accuracy and existence; and,
 Non-recognition of Subsidy to Other Funds and Trust Liability for

the unexpended CY 2018 LDRRMF misstating the equity and
liability accounts in the amount of P1.243 million.
Socorro Qualified  Inventories and Property, Plant and Equipment (PPE) accounts
amounting to P.696 million and P115.243 million or a total of
P115.939 million, as of December 31, 2018 are of doubtful
validity, accuracy and existence due to the continued failure by
the Municipality to keep records and conduct physical inventory
of its supplies and properties; and,

Municipality.
Tagana-an Qualified  Bank and book reconciling items totaling P.968 million and P.142
million, respectively, which reflected in the Bank Reconciliation
statements remained unadjusted for a long period of time due to
lack of supporting details and non-reconciliation of balances to
controlling account regularly or at year-end, thus affecting the
accuracy and completeness of Cash in Bank account; and,
 Reconciliation of accounting and property records was not done

to support the accuracy and validity of the Property, Plant and
Equipment (PPE) accounts of P250 million as of December 31,
2018, thus, balances reflected in the financial statement was not
ascertained.
Tubod Qualified  Property, Plant and Equipment (PPE) and Depreciation Expense
are unreliable due to no report on the physical count of PPE was
submitted and no Property Cards on PPE were maintained by the
General Service Officer; and non-recognition of depreciation on
some depreciable PPE accounts; and,
 Due from Other Funds and Due to Other Funds, and Subsidy from
Other Funds and Subsidy to Other Funds as reciprocal accounts
are doubtful due to non-reconciliation of their balances and
resulted to a variance of P2.459 million and P3.036 million,
respectively, or a total variance of P5.495 million.
431
Surigao del Sur Qualified  Collections from fees for services rendered by Eight (8) different
Community Hospitals of the Province totaling P251.702 million
were considered as Trust Fund, thus resulted to (a) non-inclusion
of cash collection in the GF cash account; (b) procured Property
Plant and Equipment (PPE) out of the cash collection were not
recorded in the General Fund (GF) account thus no depreciation
was provided on the PPE; and (c) resources were not adequately
safeguarded from abuse, mismanagement, fraud, error and
irregularities;
 Property Plant and Equipment (PPE) totaling P190.660 million

procured out of collections from different community hospitals
were not recorded in the books under General Fund, thus resulted
to understatement of PPE and understatement of Government
Equity accounts by the same amount; and,
 Due to BIR of P4.672 million is erroneously presented due to non-

recording in the books of accounts the payment to BIR for
remittance of taxes withheld from the contractor during the year,
thus, resulted to an overstatement of Due to BIR and Cash in
Bank accounts by P3.422 million.
Cities
Bislig City Qualified  Receivable accounts totaling P9.144 million have been
outstanding in the books for over ten years due to the absence of
documents to prove their validity and information as to the details
of the account balances; and,
 Land account under the General Fund and Special Education

Fund totaling P34.370 million could not be ascertained due to the
absence of evidence to establish ownership and the noted
discrepancy amounting to P2.750 million between the balance in
the General Ledger and the Report on the Physical Count of
Property, Plant and Equipment.
Tandag City Qualified  Setting-up of Real Property Tax (RPT) and Special Education Tax
(SET) Receivables were based on estimates submitted by the
Treasurer’s Office instead of the Certified List of the Taxpayers
(CLT). As a result, delinquent RPT and SET Receivables,
inclusive of interests per CLT does not reconcile with the
balances of RPT and SET Receivables as presented in the
Financial Statements as of December 31, 2018 with a
discrepancy amounting to P98.955 million; and,
 Acquisition of supplies and materials in the amount of P36.044

million was indirectly treated as outright expense, thus weaken
the City’s internal control and affected the fair presentation of
appropriate inventory accounts and its related expenses.
432
Municipalities
Barobo Qualified  Failure of the management to conduct the annual physical

inventory of PPE, non-preparation and submission of the report
(RPCPPE), and absence of pertinent information on the items
comprising the PPE accounts reported at P106.542 million as of
 Failure to submit the 581 Liquidation Reports (LRs) amounting to

P60.554 million together with the supporting documents, which
precluded the Audit Team to conduct timely audit.
Bayabas Qualified  Not setting up Real Property Tax (RPT) and Special Education
Tax (SET) at the beginning of the year, thus understated both the
asset (receivables account) and liabilities (deferred accounts).
Cagwait Qualified  Non-reconciliation of accounting records with the submitted

Report of Physical Count of PPE (RPCPPE) casted doubt as to
the reasonableness of the P228.005 million PPE account balance
reported in the Statement of Financial Position.
Cantilan Qualified  Non-reconciliation of accounting records with the submitted

Report of Physical Count of PPE (RPCPPE) casted doubt as to
the reasonableness of the P213.700 million PPE account balance
reported in the Statement of Financial Position.
Carmen Qualified  Due to the failure of the agency to prepare and submit the
reconciliation of the result of the inventory count with that of the
property and accounting records casting doubt on the correctness
of the Property, Plant and Equipment Account amounting to
P49.456 million as of December 31, 2018.
Carrascal Unqualified
Cortes Qualified  Failure to submit the required Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) due to the non-
maintenance of property cards, thus precluded the Audit Team
from verifying the existence, validity and reliability of the reported
Property, Plant and Equipment (PPE) valued at P107,009 million.
Hinatuan Qualified  Due to inability of the management to submit the Report on the
totalling P177.721 million, thus, the accuracy and existence the
reported property, plant and equipment cannot be ascertained.
Lanuza Qualified  Non-reconciliation of accounting records with the submitted

Report of Physical Count of PPE (RPCPPE) which casted doubt
as to the reasonableness of the P136.630 million PPE account
balance reported in the Statement of Financial Position.
433
Lianga Qualified  Real Property Tax (RPT) and special education tax (SET)
receivables amounting to P.892 million and P.944 million
respectively, as of December 31, 2018 could not be ascertained
due to the absence of the certified list of the taxpayers; and,
 Property, Plant and Equipment has an unreconciled balance of

P26.307 million with its schedule casting doubt on the accuracy,
validity and reliability of the amounts presented.
Lingig Qualified  Due to inability of the management to submit the Report on the
totalling P141.786 million, thus the accuracy, validity and
existence of these properties cannot be ascertained.
Madrid Qualified  Due to the inability of the management to provide a complete and
adequate records/reports and the absence of inventory taking,
hence, the existence, reliability and completeness of Property,
Plant and Equipment in the amount of P114.816 million as of
year-end could not be ascertained.
Marihatag Qualified  Property, Plant and Equipment which are stated in the Statement
of Financial Position at a carrying amount of P163.696 million as
of December 31, 2018 could not be validated because of the
failure of the agency to conduct a physical count and submit the
required Report on the Physical Count of Property, Plant and
Equipment (RPCPPE), thus precluded the Audit Team from
verifying the existence, validity and reliability of the reported
Property, Plant and Equipment (PPE).
San Agustin Qualified  Inability of the Municipality to reconcile the Report on Physical
Count of PPE with the accounting records casted doubt on the
correctness, existence and reliability of Property, Plant and
Equipment (PPE) account balances totaling to P156.701 million
at December 31, 2018.
San Miguel Qualified  Property, Plant and Equipment valued at P231.714 million as of
December 31, 2018 cannot be ascertained as to its existence,
reliability and completeness due to the inadequacy of
records/reports and absence of physical inventory-taking;
 Recorded Real Property Taxes and Special Education Tax

receivables amounting to P14.939 million and P16.845 million,
respectively, as of December 31, 2018 were unreliable due to the
absence of the certified list of taxpayers with the amount due and
collectibles for the period.
Tagbina Qualified  Failure to conduct physical inventory count on all of its supplies
and inventories on hand due to the non-establishment of the
Inventory Committee, and the non-submission of SSMI before
recording expenses which resulted to doubtful balances of
Supplies and Inventory accounts totaling P2.685 million;and,
434
 RPT and SET Receivables for the year were established without
supporting the certified list of real property tax receivable from the
MTO which could affect the correctness and/or accuracy of
reporting of these receivables account in the financial statements
Tago Qualified  Inability of the management to conduct the reconciliation of the

result of the inventory count of PPE with that of the property and
accounting records; and,

receivables as of December 31, 2018, were unreliable due to the
absence of the certified list of taxpayers with the amount due and
collectibles for the period.
Dinagat Islands Qualified  Property, Plant and Equipment (PPE) account balance of
ascertained due to non-reconciliation of the property and the
accounting records and the non-reconciliation of accounting and
property records, rendered the existence and valuation of the
Inventories account totaling P60.296 million doubtful.
Municipalities
Basilisa (Rizal) Qualified  Due to the failure of the municipal accountant to submit Bank
Reconciliation Statements, Cash in Bank-LCCA totaling P85.577
million could not be verified, thereby rendering unreliable cash
account and precluding the auditor in obtaining sufficient
appropriate audit evidence on the existence and accuracy of the
cash in bank accounts; and,
 Due from Other Funds and Due to Other Funds accounts, which
are reciprocal in nature, showed a net difference of (P.900
million), resulted to unreliable and misleading information on the
financial position of the municipality.
Cagdianao Qualified  Non-recyclable materials and special wastes of the three (3)
barangays of were not collected by the Municipality, thus
protection of public health and the environment could not be
assured;
 Collections of solid wastes practiced by the Municipality is not

compliant to the standards set forth under Section 23(a) of R.A.
9003 since garbage collectors were not provided with protective
equipment and supplies thereby exposing them to various health
hazards;
 PhilHealth program amounting to P1.200 million which is

considered not gender-responsive and gender-sensitive was
erroneously charged to GAD Fund, thereby defeating the purpose
for which the fund was intended.
435
Dinagat Qualified  Property, Plant and Equipment (PPE) accounts of P155.723
million as of December 31, 2018 could not be ascertained as to
existence and valuation due to non-conduct of complete physical
count and the non-reconciliation of property and accounting
records due to the absence of property and ledger cards and
other property records;
 Failure to compute and provide for the depreciation of depreciable

Property, Plant and Equipment (PPE) totaling P40.669 million for
CY 2018 thereby resulting to the understatement of the
depreciation expense and its Accumulated Depreciation accounts
and correspondingly overstatement of its Asset and Government
Equity accounts; and,
 Various receivables totaling P2.618 million remained outstanding

in the books for more than five (5) years due to the failure of the
management to exert efforts to enforce collection.
Libjo (Albor) Qualified  Property, Plant and Equipment (PPE) accounts of P17.472 million
could not be ascertained as to existence and valuation due to
incomplete conduct of physical count and the non-reconciliation
of property and accounting records due to the absence of
property and ledger cards and other property records, rendering
the Property, Plant and Equipment account presented in the
Statement of Financial Position to be unreliable.
Loreto Qualified  Due to the failure of the Municipal Accountant - Designate to

submit Bank Reconciliation Statements, Cash in Bank-LCCA
totaling P124.641 million could not be verified, thereby rendering
unreliable cash account and precluding the auditor in obtaining
sufficient appropriate audit evidence on the existence and
accuracy of the cash in bank accounts, and any deficiency that
may be found in the verification thereof could not be immediately
communicated to Management for appropriate action; and,
are reciprocal in nature, showed a net difference of (P59.967
million).
San Jose Qualified  Fund transfers to various Non-Governmental Organizations

(NGOs)/Peoples Organizations (POs) amounting to P2.773
million remained unliquidated as of December 31, 2018 due to
non-compliance of the Municipality with the provisions of COA
Circular No. 2007-001 and COA Circular 96-003 dated October
25, 2007 and February 27, 1996, respectively; thus, the balance
of the account Due from NGOs/POs appearing in the statement
of financial position is unreliable; and,
are reciprocal in nature, showed a net difference of
(P2.415million), resulted to unreliable and misleading information
on the financial position of the municipality.
436
Tubajon Qualified  The reliability of the net book value of Property, Plant and
Equipment (PPE) accounts of P101.354 million as of December
31, 2018 which could not be ascertained as to existence and
valuation due to non-conduct of complete physical count and the
non-reconciliation of property and accounting records due to the
absence of property and ledger cards and other property records
Sub-Region XVI - Negros Island Region
Negros Occidental Qualifie  Failure to conduct physical inventory its Property, Plant and
Equipment (PPE) in the amount of P6.991 billion, Investment
Property of P32,439 million and Biological Assets of P114.553
million.
Municipalities
Bacolod City Qualified  Failure to update by the General Services Officer its records in
Property, Plant and Equipment (PPE) cards, hence there was no
reconciliation of account balances shown in the Report on
Physical Count of PPE (RPCPPE) at P753.732 million and in the
financial statements and subsidiary ledgers maintained in the
Office of City Accountant amounting to P869.762 million 515.14,
thus, rendering the correctness of PPE accounts balances as of
December 31, 2018 doubtful;
 Construction in Progress (CIP) balance of P377.741 million per

records of the City Accounting Office (CAO) differs from the
amount of CIP projects reported by the City Engineer’s Office
(CEO) of P88.655 million due to absence of regular reconciliation
between the records of the two concerned offices;
 Advances to Officers and Employees and Special Disbursing

Officers have accumulated to P41.657 million as of December
31, 2018 due to continued failure of the City officials and
employees to liquidate the amount granted;
 Financial assistance totaling P16.098 million granted to 45

NGOs/POs remained unliquidated as of December 31, 2018;
 Financial assistance totaling P5.695 million granted to five

leagues/federations in prior years 2007 to 2017 still remained
outstanding as of December 31, 2018;
 Fund transfers/financial assistance to barangays totaling P5,880

million for CY 2018 and prior years’ fund transfers of P5.416
million remained unliquidated as of December 31, 2018; and,
 Management has still not implemented our CY 2012

recommendation to reconcile the Inventories totaling P149.592
million as of December 31, 2018 making the inventory figures
doubtful.
437
Bago City Qualified  Property, Plant and Equipment accounts totaling P989.615
million could not be ascertained due to the absence of complete
physical inventory report and not updated property, plant and
equipment ledger cards and property cards;
 Cash-in-Bank, Local Currency, Current Account balance of all

funds as of December 31, 2018 totaling P278.186 million cannot
be ascertained due to non-submission of the monthly bank
reconciliation statements for the month of December, 2018 of
some bank account; and,
 Records submitted by the Acting City Treasurer and the City

Accountant on the Real Property Tax Receivable account
showed a difference of P31.505 million, thereby casting doubt on
the correctness of the balance shown in the financial statements.
Cadiz City Qualified  Failure to conduct physical inventory of its Property, Plant and
Equipment (PPE) totaling P2.088 billion. The absence of property
cards on their huge properties aggravated the difficulty of the
Audit Team to conduct alternative audit procedures to ascertain
the validity of the PPE accounts balances.
Escalante City Qualified  Failure of the City to reconcile the Inventory Report of Property,
Plant and Equipment (PPE) with the general ledger of the
Accounting Office which resulted to a difference of P41.481
billion.
Himamaylan City Qualified  Unreconciled difference of P46.352 million between the Property,
Plant and Equipment (PPE) account balance per books and the
Report on the Physical Count of PPE for CY 2018 due to the
failure of the Accounting and the General Services Office to
complete the reconciliation of their records; and,
 Advances to Officers and Employees for travel and other

purposes totaling P3.132 million remained unliquidated as of
December 31, 2018.
Kabankalan City Qualified  Failure of the agency to conduct a complete physical inventory of
its Property, Plant and Equipment, Investment Property and
Biological Assets;
 Non-settlements of unliquidated cash advances; and,
 Non-disposal of its unserviceable properties.
La Carlota City Qualified  Physical count Property, Plant and Equipment (PPE) with a total
value of P775.142 million as of December 31, 2018 were not
conducted and absence of updated and regularly reconciled
PPE Ledger and Property Cards.
438
Sagay City Qualified  Failure to conduct a complete physical inventory of its Property,
Plant and Equipment (PPE) amounting to P1.517 billion as of
December 31, 2018, inadequacy of accounting records and the
unreconciled PPE ledger and property cards, which affected the
fair presentation of the financial statements.
San Carlos City Qualified  No adjustments were taken up by the City to close Special
Education Tax (SET) Receivable and the corresponding Deferred
SET Income after actual SET Income of P64,530 million were
recorded in the books.
Silay City Qualified  Variance of P441.139 million between the Accounting and the
General Service records due to non-reconciliation of records on
the Property, Plant and Equipment. The accuracy and the validity
of the reported PPE balances in the financial statements could
not be ascertained.
Sipalay City Qualified  Difference of P16.758 million between the reciprocal accounts
Due from Other Funds and Due to Other Funds; and,
 Discrepancies between the physical count reports and the

carrying balance as of December 31, 2018 which substantially
understated the Property, Plant and Equipment account by
P124.686 million.
Talisay City Qualified  Possible effect of any adjustments which might have been made
had the agency conducted complete physical inventory of its
properties valued at P844.025 million and had reconciliation
been undertaken by the General Services Office (GSO) and the
Accounting Office and resolved the discrepancy of P8.427 million
between the general and property cards on Transportation
Equipment valued at P100.195 million as against the Inventory
Report of the General Services Office (GSO) amounting to
P91.768 million.
Victorias City Qualified  Variance of P177.477 million between the Accounting and
General Services Office records due to non-reconciliation and
incomplete physical inventory of property, plant and equipment;
and,
 Unliquidated cash advances to officers and employees totaling

P25.322 million consisting of P23.700 million unliquidated cash
advance from Confidential Fund and P1.622 million to officers
and employees rendered the related accounts unreliable.
439
Municipalities
Binalbagan Qualified  Failure to conduct physical inventory of all its properties and to
Equipment valued in the books at P413.888 million for CY; and,

December 31, 2018.
Calatrava Qualified  Non-recognition of Real Property Tax/Special Education Tax

(RPT/SET) Receivable and Deferred RPT/SET Income totalling
P98.151 million.
Candoni Qualified  Failure of the agency to conduct a complete physical inventory of

its Property, Plant and Equipment and Inventories; and,
 Non-settlements of unliquidated the cash advances.
Cauayan Qualified  Unreconciled balances of Cash in Local Treasury account by

P26.161 million when compared with balances per cash book;
and,
 Non submission of annual physical inventory report which

rendered Property, Plant and Equipment (PPE) account with
carrying value of P327.165 million doubtful.
Don Salvador Management Letter  Failure to submit the year end Financial Statements of the
Benedicto General Fund.
Enrique B. Qualified  Absence of physical inventory count of its PPE totaling P211.094
Magalona million and failure to submit the RPCPPE;
 Unliquidated Advances to Officers and Employees totaling

P6.943 million, consisting of P 5.352 million cash advances
charged to Confidential Fund and P1.591 million pertains to
advances to officers and employees; and,
 Non-preparation of the monthly bank reconciliation statement for

all funds rendered the related acccounts unreliable.
Hinigaran Qualified  Unreconciled Property, Plant and Equipment (PPE) account

balance per books of P215.570 million for CY 2018 due to the
failure of the Accounting and the General Services Office to
complete the reconciliation of their records; and,

December 31, 2018.
440
Hinoba-an Qualified  “Due from Other Funds” and “Due to Other Funds” accounts
amounting to P3.789 million and P7.523 million were doubtful due
to a variance of P3.733 million which indicated errors in the
recording of the transactions; and
 Property, Plant and Equipment (PPE) accounts could not be fully

ascertained due to the failure of the Municipality to reconcile the
difference of P278.7 million between the accounting and property
records.
Ilog Qualified  Failure of the agency to conduct physical count of inventories of

its Property, Plant and Equipment; and,
 Non-settlements of unliquidated cash advances.
Isabela Qualified  Non submission of the Report of the Physical Count of Property,
Plant and Equipment (RPCPPE) for CYs 2017 and 2018 because
of the failure to conduct the required physical inventory count of
its property, plant and equipment amounting to P P223.180
million.
La Castellana Qualified  Non submission of the Report of the Physical Count of Property,
its property, plant and equipment amounting to P39.626 million;
and,
 Failure to record Public Infrastructure from completed projects

from grants.
Manapla Qualified  Failure of the Municipality to conduct physical count of its

property, plant and equipment valued at P131.384 million
rendering the accounts reflected in the financial statements
unreliable.
Moises Padilla Qualified  Non submission of the Report of the Physical Count of Property,
its property, plant and equipment amounting to P247.724 million.
Murcia Qualified  Failure of the Municipality to conduct complete physical count of

its property, plant and equipment (PPE) with a net book value of
 Unliquidated Advances to Officers and Employees totaling

P11.821 million, consisting of P5.737 million unliquidated cash
advance from Confidential Fund and P6.084 million to officers
and employees.
Pontevedra Qualified  Physical count of the Property, Plant and Equipment (PPE)
valued at P215.022 million as of December 31, 2018 were not
conducted and absence of updated and regularly reconciled PPE
Ledger and Property Cards.
441
Pulupandan Qualified  Property, Plant and Equipment account amounting to P44.215
the failure of the municipality to conduct complete physical
inventory;
 Depreciation for Land Improvements, Water Supply System,

Buildings and Other Structures, Machinery and Equipment,
Transportation Equipment, and Furniture, Fixtures and Books
with a total cost of P39.364 million were not recorded in the
books; and,
 Cash in Bank, Local Currency totaling P69.582 million as of

December 31, 2018 cannot be established due to the failure of
the OIC-Municipal Accountant to submit the Month Bank
Reconciliation Statements for CY 2018.
San Enrique Qualified  Physical count Property, Plant and Equipment (PPE) with a total
value of P84.196 million as of December 31, 2018 were not
conducted and absence of updated and regularly reconciled PPE
Ledger and Property Cards.
Toboso Qualified  Failure to conduct the annual physical count of property, plant and
equipment (PPE) totaling P302.060 million, thus the reported
gross carrying value of PPE was unreliable.
Valladolid Qualified  Property, Plant and Equipment account amounting to P104.947

the failure of the municipality to conduct complete physical
inventory;
 Cash in Treasury and Cash in Bank per Treasury/Cashier’s

Cashbook for the three funds do not reconcile with the balances
per General Ledger for the year ended December 31, 2018, with
a difference of P.266 million and P46.538 million, respectively;
and,
 RPT and SET Receivables were still not booked up in CY 2018,

thus, rendering the accuracy of the accounts doubtful at year end
at P10.767 million and P.232 million, respectively.
Negros Oriental Qualified  Cash in Bank-Local Currency-Current account balance

amounting to P3.794 billion was not fairly presented due to the
unreconciled difference of P49,014 million between the books
and the bank;
 Receivables account amounting to P186.467 millionwas

overstated because P13.458 million of which had been non-
moving or dormant for 10 to more than 20 years without provision
for the allowance for impairment;
 Due from Local Government Units account balance of P32.572

million showed a discrepancy of P10.384 million upon
confirmation from cities and municipalities;
442
 Results of the physical count of properties in CYs 2014 to 2017
were not yet reconciled with the accounting records while no
physical count was conducted in CY 2018 of the inventory and
movable property, plant and equipment accounts valued at
P260.342 millionand P951.049 million 950.02, respectively;
 Reported balance of the Breeding Stocks account amounting to

P13.617 million could not be ascertained due to the absence of
supporting schedules; and,
 Materials amounting to P6.160 million which were distributed to

various beneficiaries in CY 2010 were still recorded in the
Construction in Progress account and motor vehicles costing
P27.328 million which were donated to other local government
units were not yet dropped from the books.
Cities
Bais City Qualified  Cash advances amounting to P35.658 million remained

unliquidated for at least 31 days to almost eight years, thereby
overstating the assets and equity;
 Road Networks and CIP-Infrastructure Assets accounts were

overstated by P7.014 million since declogging of canals were
erroneously capitalized instead of recording these as outright
expenses;
 Movable PPE and Inventories remained unreliable due to

discrepancies between the physical count and the book balances
amounting to P13.949 million and P57.353 million, respectively;
and,
 Current liabilities and equity are overstated by payables

amounting to P8.609 million which have been outstanding for two
years to over 10 years and have not been reverted to the surplus
account.
Bayawan City Qualified  Property, Plant and Equipment (PPE) accounts valued at P1.743
billion could not be ascertained because the conduct of the
physical count of movable properties was not completed and the
property cards maintained by the City General Services Office
(CGSO) did not reconcile with the equipment ledger cards kept
by the City Accountant’s Office (CAO);
 Land account was questionable because real properties

amounting to P16.194 million were not covered with Transfer
Certificates of Title;
 Interests on borrowings for the purchase of heavy equipment and

implementation of infrastructure projects which were already
completed amounting to P3.638 million and P1.892 million,
respectively, were capitalized which resulted in the overstatement
of asset and equity accounts; and,
443
 The year-end balances of Loans Receivables and Other Payable

accounts were misstated by P1.140 million because
Management recorded the transactions even if the contracts for
the granting of loans to Non-Government Organizations/People’s
Organizations (NGOs/POs) were not yet perfected.
Canlaon City Qualified  Variance of P48.814 million between the physical count of
movable assets and the accounting records, rendering the book
balance of movable assets of P146.472 million unreliable;
 Neglect to provide depreciation on depreciable assets amounting

 Failure of officers and employees to liquidate cash advances

amounting to P11.707 million understated expenses and
overstated assets and equity by an undetermined amount.
Dumaguete City Qualified  Property, Plant and Equipment (PPE) valued at P11.537 million
were recorded in the books using incorrect accounts;
 Nine parcels of land of undetermined value donated by private

individuals and/or group of individuals to the City were not taken
up in the books, thereby, understating both the asset and equity
accounts as of December 31, 2018;
 PPE accounts amounting to P1.453 billion remained doubtful

because the PPE accounts amounting to P41.388 million were
yet identified, accounting records did not agree with the General
Service Office (GSO) records, and the conduct of physical count
of PPE was not completed;
 Land account amounting to P59.431 million could not be

ascertained while its absolute ownership over these lots could not
be established due to lack of supporting documents; and,
 Due from Non-Governmental Organizations/People’s

Organizations (NGOs/POs) and Due to Other National
Government Agencies (NGAs) accounts amounting to P50.548
million and P61.249 million, respectively, were unreliable due to
lack of sufficient details and supporting records.
Guihulngan City Qualified  Movable properties amounting to P129.638 million or 15.35% of

total Properties, Plant and Equipment could not be confirmed due
to the failure of the City to complete the physical inventory.
Tanjay City Qualified  Discrepancies between the physical count and book balances of
Property, Plant and Equipment amounting to P37.447 million
which remained unreconciled;
 Construction and heavy equipment and agricultural and forestry

equipment accounts were understated by P16.534 million and
P2.597 million, respectively, as a result of double recording,
erroneous classification and non-recognition of existing
444
equipment, notwithstanding the questionable existence of

equipment with a total cost of P3.845 million which were not
located during the ocular inspection;
 Medicines and medical supplies totaling P11.511 million were

directly recorded as expenses despite the existence of
unconsumed inventories, thereby overstating expenses and
understating inventories;
 Various asset accounts are understated while the Construction in

Progress (CIP) is overstated by P300.470 million due to the
neglect to transfer completed projects from CIP to the asset
accounts;
 Other Public Infrastructures are overstated by P30.161 million for

payments made by the LGU to the Local Water Utilities
Administration for the acquisition of Tanjay Water District (TWD)
which did not materialize as the LGU has not secured its
ownership thereof nor taken over its operation; and,
 Unserviceable properties amounting to P15.730 million are still

recorded in the books, thus overstating the balance of movable
properties.
Municipalities
Amlan Qualified  Cash Local Treasury account per books and per cashbooks of
the Municipal Treasurer reflected a substantial difference of
P4.550 million, thereby, rendering the account balance at year
end unreliable; and,
 Movable Property, Plant and Equipment (PPE) with a net book

value of P30.205 million as of December 31, 2018 remained
unreliable due to the inability of the Inventory Committee to
complete and reconcile the results of the physical count with the
accounting records resulting in discrepancies amounting to
P12.948 million.
Ayungon Qualified  Real Property/Special Education Tax Receivables were

recognized using the Assessment Roll instead of the Certified List
of Taxpayers and Amounts Due and Collectible resulted in the
understatement of the said receivables by P19.906 million; and,
 Failure to complete the conduct of physical inventory of the items

booked under property, plant and equipment accounts, thus the
existence and accuracy of its movable properties valued at
P39.271 million, which comprises 9% of total assets as at year-
end, could not be ascertained.
445
Bacong Modified/  Unreconciled balance of Real Property Tax (RPT) Receivable
Qualified and Special Education Tax (SET) Receivable as of December 31,
2018 between the records of the Municipal Accountant’s Office
and Municipal Treasurer’s Office of P18.359 million;
 Expenses related to post-planting maintenance totaling P372

million were erroneously capitalized to account Plants and Trees
instead of Maintenance and Other Operating Expenses (MOOE);
 Failure to record in the books of accounts nine parcels of land

amounting to P19.737 million, thus, understating the asset and
equity accounts;
 Ownership of land valued at P2,944 million remained unreliable

because these were not covered by Transfer Certificate of
Title/Original Certificates of Title (TCT/OCT) in the name of the
Municipality;
 Adjustment amounting to P10.363 million crediting the Land

account was taken up in the books without submitting the Journal
Entry Vouchers (JEVs) together with the complete supporting
documents to the Auditor for verification despite several requests;
and,

 Movable Property, Plant and Equipment (PPE) valued at P28.349
million (net of accumulated depreciation), which comprises
21.94% of its total PPE and 8.40% of its total assets as at
December 31, 2018, remained unreliable.
Basay Qualified  Property, Plant and Equipment (PPE) valued at P124.366 million
as of December 31, 2018 could not be relied upon because no
Inventory Committee was created to conduct a physical count of
movable properties amounting to P24.196 million, thus, the
required reconciliation between the results of the actual count and
the related accounting and property records could not be done;
and,
 Cash advances amounting to P4.607 million still remained

unsettled as of December 31, 2018.
Bindoy Qualified  Failure to complete the conduct of physical inventory of the items
booked under the property, plant and equipment accounts, thus
the existence and accuracy of movable properties valued at
P21.298 million which comprises 6% of total assets as at year-
end, could not be ascertained; and,
 Real Property Tax Receivables and Special Education Tax

Receivables were not recognized base on Certified List of
Taxpayers and Amounts Due and Collectible, thus, resulted in the
understatement of the said receivables by P68.160 million as of
December 31, 2018.
446
Dauin Qualified  Real Property Tax (RPT) Receivable and Special Education Tax
(SET) Receivable as of December 31, 2018, with a difference of
P5.327 million between the records of the Municipal Accounting
Office (MAO) and Municipal Treasurer’s Office (MTO),could not
be reconciled because the MAO and MTO did not maintain
subsidiary ledgers and RPT Account Registers/Taxpayer’s index
cards, respectively;
 Inter-agency and Other Receivables account balances totaling

P.848 million had been dormant for over 10 years, yet no
allowance for impairment of receivables was recognized; and,
 Movable Property, Plant and Equipment account balances as of

December 31, 2018 valued at P23.529 million which comprised
23.03% of its total PPE and 8.21% of its total assets could not be
ascertained because the Inventory Committee did not conduct
physical count and the Municipal Treasurer did not maintain
property cards.
Jimalalud Qualified  Breeding Stocks and Road Networks are understated by P.966
million and P6.665 million, respectively, due to the neglect of the
accountant to recognize assets purchased out of trust funds; and,
 Movable PPE accounts valued at P17.889 million comprising

10.72% of total assets could not be ascertained because a
physical count and reconciliation with book balances was not
done.
La Libertad Qualified  Thirty-three parcels of land owned by the municipality were not
recorded in the books nor in the annual inventory report of PPE,
thereby understating the municipality’s assets by at least P3.173
million;
 Failure to account for disbursements totaling P10.834 million,

which were not supported with duly approved disbursement
vouchers and supporting documents and which were unduly
recorded as Accounts Receivable, thereby resulting in the
overstatement of the said account and impairing the accuracy of
the Cash in Bank balances presented in the financial statements;
and,
 Movable PPE accounts valued at P39.421 million which

comprises 5.77% of total assets as of December 31, 2018, cannot
be ascertained since the inventory committee was not able to
conduct the physical count and prepare the corresponding report.
Mabinay Qualified  Real Property/Special Education Tax Receivables were

of Taxpayers and Amounts Due and Collectible, resulted in the
understatement of the said receivables by P35.654 million; and,
447

P44.845 million, which comprises 7% of total assets as at year-
Manjuyod Qualified  Real Property/Special Education Tax Receivables were

of Taxpayers and Amounts Due and Collectible resulted in the
understatement of the said receivables by P1.075 million;

P43.507 million which comprises 9% of total assets as at year-
Pamplona Modified/  Inventory of Breeding Stocks and the prevailing market price for
Qualified each item as of reporting date was not submitted by the Local
Agriculturist to the Municipal Accountant, hence, the existence
and condition of the Biological Assets with an acquisition cost of
P2.394 million could not be ascertained and was not fairly
presented in the financial statement;
 Inter-agency and Other Receivables account balances

amounting to P1.151 million had been dormant for over 10 years,
yet no allowance for impairment of receivables was recognized;
and,
 Movable Property, Plant and Equipment (PPE) totaling P20.177

million as at December 31, 2018 could not be relied upon
because the Inventory Committee did not complete the physical
count.
San Jose Qualified  Movable Property, Plant and Equipment (PPE) totaling P22.417
million as at December 31, 2018 still could not be fully relied upon
because the existence and condition of the movable PPE could
not be ascertained since the important data, such as the balance
per card and on hand per count were not indicated in the Report
(RPCPPE).
 Unserviceable properties with acquisition costs and net book

values totaling at least P1.571 million and P.448 million,
respectively, were not yet disposed;
 Inventory of breeding stocks and the prevailing market price for

each item as of reporting date was not submitted by the Local
Agriculturist to the Municipal Accountant, hence, the biological
assets account balance of P.318 million is not;
448
 Receivables pertaining to real property and special education
taxes totaling P2.943 million and the related deferred credit
accounts is unreliable because the setting up of these accounts
was not based on a certified list of tax payers resulting in a
difference of P1.636 million against the certified list of delinquent
real property taxes; and,
 Unexpended/unobligated balance of the Quick Relief Fund (QRF)

and the Local Disaster Risk Reduction and Management Fund
(LDRRMF) Maintenance and Other Operating Expenses (MOOE)
amounting to P1.591 million was not transferred to the Special
Trust Fund (STF) under the account “Trust Liability-DRRMF”
pending reconciliation of balances with the records of the
Municipal Budget Officer, thereby, understating the expenses in
the General Fund and the liabilities in the Trust Fund as of
reporting date.
Santa Catalina Qualified  Property, Plant and Equipment (PPE) account valued at
P304.162 million as of December 31, 2018 could not be relied
upon because the Inventory Committee did not conduct a
physical inventory count of the movable properties amounting to
P75.708 million, thus, the required reconciliation between the
results of the actual count and the related accounting and
property records could not be done;
 Interests on borrowings for the on-going construction of two

infrastructure projects located in Barangay Buenavista amounting
to P.516 million were not capitalized which resulted in the
understatement of asset and equity accounts;
 Twenty-five stale checks totaling P.094 million aged seven to 50

months were still reported as outstanding checks in the bank
reconciliation statements (BRS), thereby, understating the Cash
in Bank and Accounts Payable accounts;
 Nine general ledger accounts totaling P6.007 million temporarily

lodged in the “For ID” accounts during the initial roll out of the
Electronic New Government Accounting System (e-NGAS) in
July 2006 remained unidentified as of December 31, 2018; and
 Assets costing P33.308 million acquired prior to calendar year

2002 and carried in the books beyond their estimated useful lives
were not fully depreciated, thus, overstating the asset and equity
accounts.
Siaton Qualified  Property, Plant and Equipment (PPE) valued at P231,664

millionas of December 31, 2018 could not be relied upon because
no Inventory Committee was created to conduct a physical count
of movable properties amounting to P88.139 million;
 Ownership of parcels of land costing P8.599 million could not be

fully validated because these lots were not covered by Transfer
Certificates of Title; and,
 Cash advances amounting to P.709 million included past due

accounts of P.136 million which still remained unsettled as of
December 31, 2019.
449
Sibulan Qualified  Basic and Special Education Tax (SET) Receivables established
at the beginning of the year were based on estimates resulting in
zero balances in the RPT Receivables and Deferred RPT Income
accounts at year end, thus, understating these accounts by
approximately P34.508 million; and,
 Movable Property, Plant and Equipment (PPE) totaling P49.380

million as at December 31, 2018 could not be fully relied upon
because the Inventory Committee had not completed the physical
count, thus, the existence and condition of the movable PPE
could not be ascertained.
Tayasan Qualified  Difference of P10.344 million exists between the balance per
bank statements and book balance for Cash in Bank as of
December 31, 2018 which remains unreconciled as a result of the
failure to prepare bank reconciliation statements;
 Movable PPE accounts valued at P43.776 million which

comprises 11.39% of total assets as of December 31, 2018 could
not be ascertained because a physical count and reconciliation
with book balances were not done; and,
 Receivables are understated by an undetermined amount

because no receivables from Real Property Tax/Special
Education Tax were recognized in the books due to the neglect
of the Municipal Assessor to prepare the Assessment Roll.
Valencia Qualified  Movable Property, Plant and Equipment (PPE) accounts valued
at P47.844 million which comprises 11.34% of its PPE or 4.846%
of its total assets could not be ascertained because the physical
inventory count did not reconcile with the accounting records, and
property cards were not maintained;
 Inter-agency and Other Receivables account balances totaling

P2.212 million had been dormant for over 10 years, yet no
allowance for impairment of receivables was recognized;

December 31, 2018;
 Breeding Stocks and other Biological Assets valued at P.610

million could not be ascertained because the Municipal
Agriculturist did not submit to the Municipal Accountant the
inventory report including the prevailing market price of each
stock; and,
 Land account amounting to P68.567 million or 6.95% of its total

assets could not be established due to lack of supporting
documents.
450
Vallehermoso Qualified  Movable PPE accounts valued P36.799 million, which comprises
13.69% of total assets as of December 31, 2018, cannot be
ascertained since the inventory committee was not able to
complete the physical count and prepare the corresponding
report; and,
 Several parcels of land with a total market value of P34.020

million remained unrecorded in the books of accounts, thereby
understating the assets presented in the financial statements.
Zamboanguita Qualified  Real Property Tax (RPT) Receivable and Special Education Tax
(SET) Receivable as of December 31, 2018 showed a difference
of P4.263 million per records of the Municipal Accountant’s Office
and Municipal Treasurer’s Office, which could not be reconciled
because the Municipal Accountant did not maintain subsidiary
ledgers;
 Breeding Stocks and other Biological Assets valued at P3.614

million could not be ascertained because the Municipal
Agriculturist did not submit to the Municipal Accountant the
inventory report including the prevailing market price of each
stock; and,
 Movable property, plant and equipment account balances as of

December 31, 2018 valued at P20.013 million (net of
accumulated depreciation) which comprised 12.69% of its total
PPE and 7.68% of its total assets could not be ascertained
because the Inventory Committee did not conduct physical count
and the Municipal Treasurer did not maintain property cards.
Autonomous Region in Muslim Mindanao (ARMM)
Basilan Unqualified
Cities
Isabela City Qualified  Non-preparation of monthly bank reconciliation statements (BRS)
by the City Accountant thereby casting a doubt on the accuracy
of the Cash in Bank Accounts as of December 31, 2018
 Unreconciled Cash in Bank – Local Currency, Current account

between the Accounting and the Treasury resulting to the net
variance of (P3.548 million) between the accounting and the
treasury records;
 Cash advances remained unliquidated at year-end totaling

P83.312 million despite the purpose for which it was granted has
already been served and the amount presented in the financial
statements submitted by the agency does not coincide with the
amount per schedule of the unliquidated cash advance of General
Fund as of December 31, 2018;
451
 Property, Plant and Equipment (PPE) stated at P726.639 million

or 63.98% of total assets, as at December 31, 2018 remained
unreliable and could not be ascertained due to (1) incomplete
physical inventory count; (2) inadequacies of property ledger
cards; and, (3) wrong valuation of PPE accounts which are not
in conformity with the existing rules and regulations;
 Lands with book value of P2.593 million and with purchase price
of P21.146 million were not supported by land titles;
 Urban Ambulance and Mobile Dental Vehicle with undetermined

value, donated by the Department of Health to the City
Government was not recorded in the books of accounts;
 Investment Property amounting to P30.113, million presented in

the financial statements submitted by the agency does not
coincide with the amount per schedule submitted;
 Inventory accounts amounting to P.774 million at year-end is

unreliable, and their existence and completeness could not be
fully determined due to (1) incomplete physical count of
inventories; and, (2) non-preparation of the stock ledger card and
stock cards; and,
 Proper disclosure and presentation of the status and utilization of

DRRMF was not made in the Notes to Financial Statements.
Lamitan City Qualified  Property Plant and Equipment (PPE) account amounting to
P554.969 million could not be ascertained due to the failure to
reconcile the ledger cards of the Accounting office and the annual
inventory report of the City General Service Office amounting to
P75.482 million.
Municipalities
Akbar Qualified  Non-submission of a complete, updated and extensive subsidiary
ledger for prior period error account amounting to P 44.945
million.
Al-Barka Disclaimer  Non submission of the disbursement vouchers with its supporting
documents for CY 2018, required financial reports and other
monthly reports, bank reconciliation statements and other
transaction documents.
Hadji Mohammad Qualified  Failure of the Municipal Accountant to prepare and submit
Ajul monthly Bank Reconciliation Statements (BRS) together with the
paid checks and original copies of debit/credit memos within the
prescribed period and Bank Reconciliation Statement submitted
by the Municipal Government was not prepared for all bank
accounts.
452
Hadji Muhtamad Disclaimer  Non submission of the transaction documents for the period from
January to December 31, 2018.
Lantawan Qualified  Property, Plant and Equipment account balance of P127.385

million or 55.88% of the total assets is unreliable due to: (a) non-
conduct of inventory count for CY 2018; (b) inadequacies of
subsidiary records and property ledger cards; and, (c) wrong
valuation of PPE accounts which are not in conformity with the
existing rules and regulations.
Maluso Qualified  Property, Plant and Equipment amounting to P 115.943, million

or 74.48% of the total assets could not be ascertained due to: (a)
non-conduct of inventory count for CY 2018; and, (b)
inadequacies of subsidiary records and property ledger cards.
Sumisip Disclaimer  Non submission of the transaction documents of the for the period
of January to December 31, 2018.
Tabuan-Lasa Qualified  Property, Plant and Equipment amounting to P45.384 million or

94.64% of the total assets could not be ascertained due to: (a)
non-conduct of inventory count for CY 2018; and, (b)
inadequacies of subsidiary records and property ledger cards.
Tipo-Tipo Qualified  Property, Plant and Equipment account balance of P 57.424

million or 19% of the total assets is unreliable due to: (a) non-
Tuburan Qualified  Property, Plant and Equipment account balance of P99.198

million or 76% of the total assets is unreliable due to: (a) non-
Ungkaya Pukan Qualified  Property, Plant and Equipment amounting to P 200.265 million or
87.78% of the total assets could not be ascertained due to non-
conduct and non-submission of the Report on Physical Count of
Property, Plant and Equipment
Lanao del Sur Unqualified
453
City:
Marawi City Qualified  Property Plant and Equipment presented in the Statement
of Financial Position as at December 31, 2018 totaling
P1.809 billion could not be verified and ascertained due to
inadequacy of subsidiary records, property records and
incomplete report on the annual physical count of
properties.
Municipalities
Amai Manabilang Qualified  Property, Plant and Equipment with a total consolidated booked
(Bumbaran) value of P51.446 million presented in the financial statements of
the LGU's three (3) funds could not be validated for two (2)straight
years due to the absence of a complete Report on Physical Count
of Property, Plant and Equipment (RPCPPE) and the non-
reconciliation of property plant and equipment ledger cards
(PPELC) and property cards of the accounting and general
services offices.
Bacolod-Kalawi Qualified  Property, Plant and Equipment (PPE) with net book value
amounting to P225.550 million as of December 31, 2018 could
not be ascertained due to incomplete inventory taking,
unreconciled discrepancy per accounting and property records,
and inadequacy of subsidiary records.
Balabagan Qualified  Failure of the LGU to conduct and submit report of inventory of
PPE coupled with the inappropriate classification of accounts and
the non- maintenance of equipment records and property cards
resulting to non-reliability of the year- end balance of P129.275
million.
Balindong Qualified  Property Plant and Equipment account in the amount of P80.221
million could not be ascertained due to failure to conduct
complete physical inventory, non-submission of the RPCPPE,
and non-maintenance of property ledger cards.
Bayang Qualified  Cash in Bank in the books of accounts of P2.410 million was
unreliable due to the non-submission of Bank Reconciliation
documents within the prescribed period.
Binidayan Qualified  Property, Plant and Equipment (PPE) with a Balance of P58.629
million is doubtdul due to failure to conduct physical inventory and
PPE Ledger Cards and Acknowledgement Receipt for Equipment
were not maintained; and,
 Dormant accounts amounting to P.930 million remained

outstanding in the books of accounts for more than five years and
were not acted upon to facilitate the proper write-off thereof,
454
resulting in the overstatement of assets, liabilities and
government equity accounts affecting fair presentation of
Buadi Puso-Buntong Qualified  Failure to submit the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) amount to P18.571 million, thus,
correctness, valuation and existence of the Property, Plant and
Equipment in the financial Statement as at year end is doubtful.
Bubong Qualified  Property, Plant and Equipment with a total consolidated booked
value of P81.907 million presented in the financial statements of
the LOU's three (3) funds could not be validated due to the
absence of a complete Report on Physical Count of Property,
Plant and Equipment (RPCPPE) and the non-reconciliation of
PPE ledger cards and property cards of the accounting and
general services offices.
Butig Qualified  Property, Plant and Equipment accounts totaling to

P72,486,181.50 cannot be account due to unavailability of
subsidiary records, report of inventory and other reports and due
to non-conduct of physical count thereof;
 Cash in Bank-Local Currency Current Account amounting to

P2.169 million cannot be ascertained due to non-preparation and
non-submission of the required monthly bank reconciliations;
 Loans Payable-Domestic amounting to P24.689 million was not

reclassified as current liabilities.
Calanogas Qualified  Failure to conduct a physical count of its property, plant and
equipment (PPE) at a book value of P63.951 million as of
December 31, 2018, casting doubt on the existence and valuation
of the PPE accounts;
 “Due to GSIS” account in the amount of P.360 million could not

be ascertained as it did not tally with the records of the GSIS
which reflected a balance of P16.646 million collectible against
the Municipality way back as of December 31, 2014 consisting of
P5.634 million principal amount and P11.012 million accumulated
interests.
Ditsaan-Ramain Qualified  Property Plant and Equipment account in the amount of P105.052
million could not be ascertained due to failure to conduct
complete physical inventory, non-submission of the RPCPPE and
non-maintenance of property ledger cards
Ganassi Qualified  Failure of the LGU to conduct and submit report of inventory of
PPE coupled with the inappropriate classification of accounts and
the non maintenance of equipment records and property cards
resulting to non-reliability of the year end balance of P131.625
million which affect the fairness of the presentation of the PPE
Account in the financial statement.
455
Kapai Qualified  Non-preparation and non-submission of Bank Reconciliation
Statement (BRS) for cash in bank accounts render unreliable
balances of account Cash in Bank – Local Currency Current
Account of P1.942 million.
Kapatagan Qualified  Property, Plant and Equipment with a total consolidated booked
value of Pl95.536 million presented in the financial statements of
the LGU 's three (3) funds could not be validated due to the
Plant and Equipment (RPCPPE) and the non-reconciliation of
ledger cards and stock cards of the accounting and general
services offices.
Lumba-Bayabao Qualified  Failure to conduct physical inventory of its Property, Plant and
Equipment (PPE) totaling P46.672 million and to submit report
thereon; and.
 Failure to submit Report on the utilization of the Local Disaster

Risk Reduction Management Fund (LDRRMF), renders the
disbursement of P6.194 million doubtful.
Lumbaca-Unayan Qualified  Property, Plant and Equipment accounts totaling to P8,000

million is doubrful due unavailability of subsidiary records, report
of inventory and other reports and due non-conduct of physical
count thereof.; and,
 Cash in Bank-Local Currency Current Account amounting to

P.875 million cannot be ascertained due to non-preparation and
non-submission of the required monthly Bank Reconciliation
Statements.
Lumbatan Qualified  Property, Plant and Equipment totaling to P88,705 million is

doubtful because the LGU failed to conduct physical count during
the year and, Property, Plant and Equipment Ledger Cards of the
accounting section as well as the Property Cards are not
complete, thus no reconciliation was made; and,
 Loans Payable-Domestic of P43.092 million was not reclassified

as current liabilities.
Lumbayanague Modified/  Cash in Bank in the books of accounts of P2.358 million was
Qualified unreliable due to the non-submission of Bank Reconciliation
documents within the prescribed period; and,
 Property, Plant and Equipment amounting P111.715 million is

unreliable.
Madalum Qualified  Property, Plant and Equipment (PPE) with net book value
amounting to P108.258 million as of December 31, 2018 could
not be ascertained due to incomplete inventory taking,
unreconciled discrepancy per accounting and property records,
and inadequacies of subsidiary records.
456
Madamba Qualified  Property, Plant and Equipment (PPE) with net book value
amounting to P15.891 million as of December 31, 2018 could not
be ascertained due to incomplete inventory taking, unreconciled
discrepancy per accounting and property records, and
inadequacies of subsidiary records.
Maguing Qualified  Report on the utilization of the Local Disaster Risk Reduction
Management Fund (LDRRMF) , has yet to be submitted which
renders the disbursement amounting to P7.913 million doubtful.
Malabang Qualified  Cash in Bank – Local Currency Current Account of P1.549 million
is doubtful due to non-preparation and non-submission of Bank
Reconciliation Statement (BRS) for cash in bank accounts;
 Property, Plant and Equipment (PPE) accounts totaling to

P79.710 million cannot be established due to partial inventory
report on physical count of PPE and net understatement of same
accounts by P.728, million due to incorrect usage of
salvage/residual value in the computation of annual depreciation.
 Non-recognition of account “Road Network” totaling to P2.531

million.
Marantao Qualified  Due to the effect of the incomplete physical inventory of the
property, plant and equipment as noted in prior year audit which
remained unimplemented in the current audit.
Marogong Qualified  Dormant accounts amounting to P.654 million remained

outstanding in the books of accounts for more than five years and
were not acted upon to facilitate the proper write-off thereof,
resulting in the overstatement of assets, liabilities and
government equity accounts affecting fair presentation of
 Year-end physical inventory was not conducted for the account of

Property, Plant and Equipment (PPE) with a Balance of P116.729
million and PPE Ledger Cards and Acknowledgement Receipt for
Equipment were not maintained.
Masiu Qualified  Failure to set up Real Property Tax (RPT) Receivables/Special

Education Tax (SET) Receivables for the CY 2018, due to non-
submission by the Municipal Treasurer’s Office (MTO) of certified
list of taxpayers, indicating the amounts due and collectible for
the year.
Mulondo Qualified  Due to the effect of the incomplete physical inventory of the
Pagayawan Qualified  Failure to conduct a physical count of its property, plant and
equipment (PPE) at a book value of P78.687 million as at
December 31, 2018, casting doubt on the existence and valuation
of the PPE accounts.
457
 Failure to disclose the nature and other necessary details of the

‘Prior Period Errors’ in the amount of (P10.676 million), thereby
casting doubt on the validity of the ‘Government Equity’ account.
Piagapo Qualified  Property, Plant and Equipment with book value of Pl34.426
million presented in the financial statements could not be
validated due to the absence of Report on Physical Count of
Property, Plant and Equipment (RPCPPE) and reconciliation of
ledgers cards and stock cards of the accounting and general
services office;
 Cash in Bank, Local Currency, Current Accounts under the

General Funds, Special Education Funds and Trust Funds as of
December 31, 2018 in the amounts of P3.003 million, P.019
million and P7.636 million respectively, could not be ascertained
due to the failure of the agency to prepare and submit periodic
Bank Reconciliation Statements; and,
 Receivables, inventory and deferred credits remained dormant

for more than five years in the amount of P1.235 million, P.115
Picong Qualified  Cash in Bank – Local Currency Current Account of P2.358 million
is unreliable due to non-preparation and non-submission of Bank
Reconciliation Statement (BRS) for cash in bank;
 Property, Plant and Equipment (PPE) accounts totaling to P91.95

Million cannot be established due to partial inventory report on
physical count of PPE and net overstatement of same accounts
by P.592 million due to incorrect usage of salvage/residual value
in the computation of annual depreciation.
 Non recognition of account “Road Network” totaling to P1.782

million in the LGU books of accounts for calendar years 2016 –
2018.
Poona Bayabao Qualified  Failure to set up Real Property Tax (RPT) Receivables/Special
Education Tax (SET) Receivables for the CY 2018 due to non-
the year,.
Pualas Qualified  Failre to conduct a physical count of its property, plant and
equipment (PPE) at a book value of P77.846 million as of
December 31, 2018, casting doubt on the existence and proper
valuation of the PPE accounts;
458
 “Due to GSIS” account in the amount of P.117 million could not
be ascertained as it did not tally with the GSIS records which
reflected a balance of P31.683 million as of December 31, 2014
consisting of P9.383, million principal balance and P22.300
million accumulated interests.
Saguiaran Qualified  Due to the effect of the incomplete physical inventory of the
Sultan Qualified  Cash in Bank in the books of accounts of P.722 million was
Dumalondong unreliable due to the non-submission of Bank Reconciliation
documents.
 Property, Plant and Equipment were not insured with the General
Insurance fund of the GSIS.
Tagoloan Qualified  Property, Plant and Equipment with a total consolidated booked
value of P16.701 million presented in the financial statements of
the LGU 's three (3) funds could not be validated due to the
Plant and Equipment (RCPPE) and the non-reconciliation of PPE
ledger cards and property cards of the accounting and general
services offices.
Tamparan Qualified  Failure to set up Real Property Tax (RPT) Receivables/Special

Education Tax (SET) Receivables for the CY 2018, due to non-
the year.
Taraka Qualified  Report on the utilization of the Local Disaster Risk Reduction
Management Fund (LDRRMF), as required under Sub-paragraph
c (24) Section 12 of Republic Act No. 10121, has yet to be
submitted to the Office of the Auditor which renders doubtful the
amount of P5.429 million disbursed out of the fund.
Tubaran Qualified  Unexpended portion of LDRRMF amounting to P2.561 million

was not deposited to Special Trust Fund at the end of the year;
and,
 Year-end physical inventory was not conducted for the account of

Property, Plant and Equipment (PPE) with a balance of P55.079
million and PPE Ledger Cards and Acknowledgement Receipt for
Equipment were not maintained, thus, the correctness and
validity of the PPE account could not be ascertained and their
existence could not be established.
459
Tugaya Qualified  Cash in Bank – Local Currency Current Account of P.930 million
is unreliable due to non-preparation and non-submission of Bank
Reconciliation Statement (BRS) for cash in bank account.
 Property, Plant and Equipment (PPE) accounts totaling to

P25.530 Million cannot be established due to partial inventory
report on physical count of PPE and net understatement of same
accounts by P1.612 million due to incorrect usage of
salvage/residual value in the computation of annual depreciation.
 Non-recognition of account “Road Network” totaling to P.861

million in the LGU books of accounts for calendar years 2016 –
2018.
Wao Qualified  Only the Inventory of the service vehicles, motorcycles and heavy
equipment were prepared by the Supply Officer in the total
amount of P53.859 million and was submitted for audit.; and,
 Property , Plant and Equipment in the amount of P302.084 million

out of the total consolidated booked value of P355.943 million
presented in the financial statements of the LGU's three (3) funds
could not be validated due to the absence of a complete Report
on Physical Count of Property, Plant and Equipment (RPCPPE)
and the non- reconciliation of ledger cards and stock cards of the
accounting and general services offices.
Maguindanao Qualified
Municipalities
Ampatuan Qualified  Propriety and reliability of the Property, Plant and Equipment in
the books of accounts in the amount of P91.611 million could not
be ascertained due to the failure of the municipality to submit
annual physical inventory report; and,
 Cash and Cash Equivalents amounting to P6.819 million were

doubtful for failure of the management to prepare and submit
Bank Reconciliation Statements (BRS).
Barira Qualified  Property, Plant and Equipment Account of P399.159 million as of

December 31, 2018 under the Trust Fund account, could not be
relied upon because the management failed to provide
depreciation on the Office Equipment of P.810 million; Road
Networks with a cost of P380.164 million; Office Building of
P6.948 million and Other Public Infrastructure in the amount of
P3.488 million. It also failed to submit the Report of Physical
Count on the Property, Plant and Equipment (RPCPPE).
460
Buldon Qualified  Real Property Tax Receivable Account was overstated by P4.240
million; and,
 Report of the Physical Count of the Property, Plant and

Equipment (RPCPPE) was not submitted by the management
which had affected the Property, Plant and Equipment Account of
P42.314 million on its ascertainty and reliability as of December
31, 2018.
Buluan Qualified  Land Improvement Account of P .384 million as of December 31,

2018 in the Consolidated Statement of Financial Position for CY
2018 was overstated because the management failed to
depreciate said account affecting the Property, Plant and
Equipment Account of P73.771 million; and,
 Office Equipment Account of P1.390 million in the Consolidated

Statement of Financial Position for CY 2018 was fully depreciated
by the management which resulted to the understatement of the
Property, Plant and Equipment Account of P 73.771 million.
Datu Abdullah Qualified  Property, Plant and Equipment (PPE) account totaling P59.246
Sangki million is incorrect due to inability of the Management to prepare
and reflect Depreciation for the prior and current year;
 Failure to recognize its Local Road Networks in the books of

accounts; and,
 Various supplies and materials totaling P1.562 million purchases

were immediately recorded as expense accounts without passing
through the inventory account.
Datu Anggal Qualified  Property, Plant and Equipment valued at P19.880 million which is
Midtimbang 99.67% of the total assets could not be ascertained due to the (a)
continuing failure of the management to conduct physical count
of its Property Plant and Equipment, (b) and non-maintenance of
complete and properly accomplished Property, Plant and
Equipment Ledger Cards and Real Property Ledger.
Datu Blah T. Qualified  Non preparation of Bank Reconciliation Statement that makes the
Sinsuat Cash in Bank account; and,
 Due to the failure of the agency to conduct physical inventory

count on all of the agency’s PPE.
461
Datu Hoffer Qualified  Various Property, Plant and Equipment under the TRUST FUND
Ampatuan with a total cost of P13 million were not provided with
depreciation;
 P.125 million was collected, however no Report of Collections

and Deposit for 2018 prepared and submitted to the auditor
concerned and no indication that this was included in the Cash
Balance as of December 31, 2018. The cash balance as of year-
end is remained doubtful; and,
 Share of the other LGUs for the collection of RPT/SET which is

held for the former was not recognized as liability, thus liability
was understated.
Datu Montawal Qualified  Failure to conduct physical inventory of its Property, Plant, and
Equipment which rendered the accuracy, validity and existence
of the amount presented in the Financial Statements unrealiable
Datu Odin Sinsuat Qualified  Property Plant and Equipment in the total amount of P63.747
million cannot be relied upon due to the failure of the agency to
conduct physical inventory count on all of the agency’s PPE.
Datu Paglas Qualified  Failure to conduct physical inventory of its Property, Plant and
Equipment which rendered the accuracy, validity and
reasonableness of the amount presented in the Financial
Statements unreliable amounting to P120.997 million.
Datu Piang Qualified  Failure to conduct physical count of its existing Property, Plant
and Equipment, and no Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) was submitted thereby the
accuracy of the Property, Plant and Equipment balance totaling
P34.731 million (Combined) is uncertain.
Datu Salibo Qualified  Due to incomplete accounting records and failure to prepare bank
reconciliation statements, the financial statements as a whole for
CY 2018 is doubtful.
Datu Saudi- Qualified  Cash in Bank balance for the Trust Fund – P9.340 million could
Ampatuan not be ascertained due to the failure of the management to submit
Bank Reconciliation Statements and/or bank certifications for the
CY 2018.
Datu Unsay Qualified  Cash balances of all funds totaling P2.489 million could not be
verified because of the absence of Bank Reconciliation
Statement and the Bank Statements; and,

million could not be ascertained due to absence of supporting
documents.
462
General Salipada K. Qualified  Terminal Leave Benefit Account of P3.226 million was overstated
Pendatun by P.254 million.
Guindulungan Qualified  Property, Plant and Equipment balance of P119.552 million which
is 97% of the total assets could not be ascertained, due to the
continuing failure of the management to conduct physical count.
Kabuntalan Qualified  Real Property Tax (RPT) Receivable amounting to P2.630 million
could not be ascertained due to failure of the Municipal Treasurer
to submit certified list showing the name of taxpayers and the
amounts due and collectible for the year; and,
 Due to GSIS in the Statement of Financial Position of the General

Fund as of December 31, 2018 amounting to P26.771 million
cannot be ascertained due to absence of supporting documents.
Mamasapano Qualified  Cash and Cash Equivalent amounting to P.665 million cannot be
ascertained because an amount of P.637 million collection that
has been omitted in the Financial Statement of Cash Flows thus
reflecting an understatement of the cash balance in the Statement
of Financial Position and no submissions of bank reconciliation
statement and snapshots for the months of July to December
2018.
Mangudadatu Qualified  Property, Plant and Equipment (PPE) Account of P 29.969 million
in the Consolidated Statement of Financial Position for CY 2018
could not be relied because the management incurred delays in
the submission of the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE).
Matanog Qualified  Property, Plant and Equipment Account of P169.242 million was
overstated because the management failed to depreciate the
Disaster Response and Rescue Equipment Account, Military
Police and Security Equipment Account, Other Machineries
Equipment Account and Watercrafts Account with an aggregated
acquisition cost of P14.278 million.
Northern Qualified  Cash balances of all funds totaling P.062 million could not be
Kabuntalan verified because of the absence of Bank Reconciliation
Statement and the Bank Statements; and,

documents, and non-recognition of depreciation.
Pagalungan Qualified  Failure to conduct physical inventory of its Property, Plant, and
Equipment rendered the accuracy, validity and reasonableness
463
Paglat Qualified  Failure to conduct physical inventory of its Property, Plant, and
Equipment rendered the accuracy, validity and reasonableness
 Failure to prepare and submit Bank Reconciliation Statements

casting doubt to the accuracy and validity of its Cash in Bank
balance amounting to P1.066 million.
Pandag Qualified  Property, Plant and Equipment Account of P2.354, million in the
Consolidated Statement of Financial Position for CY 2018 could
not be relied because the management failed to depreciate the
Office Equipment Account of P.625 million and Motor Vehicle
amounting to P.216 million was over depreciated.
Parang Qualified  Impairment Losses of P6.097 million decreased the value of

the Land from P28.103 million to P22.006 million, resulting to
the understatement of the Land Account as of Dec. 31, 2018;
 Road Networks Account of P.024 million were understated

because the management failed to consider on the other
roads of the Municipality; and,
 Depreciations were not taken up in the above account as

well as the several equipment under the General Fund and
Trust Fund totaling to P13.148 million which overstated the
Property, Plant and Equipment Account totaling to P105.983
million.
Rajah Buayan Qualified  Property, Plant and Equipment Accounts with the total amount of
P32.199 million cannot be ascertained due to failure to finish the
physical inventory of the existing Property, Plant and Equipment,
and no Report on the Physical Count of PPE (RPCPPE) was
submitted during the year.
Shariff Aguak Qualified  Failure to capitalize P.422 million for the Salintubig Project and
this was charged to the current operating expenses of the TRUST
FUND account thus, overstating the expenses and understating
the PPE for the same amount;
 P.442 million received from DTI-ARMM (P.150 million) and

DOLE-Region 12 (P.292 million.) for implementation of various
program for the year 2018 was charged to expenses without
corresponding income recognized for the TRUST FUND; and,
 Failure to recognized fund transfer amounted to more than

P9.800 million as trust liability.
464
Shariff Saydona Qualified  Property, Plant and Equipment Accounts with the total amount of
Mustapha P15.301 million cannot be ascertained due to failure to finish the
physical inventory of the existing Property, Plant and Equipment,
and no Report on the Physical Count of PPE (RPCPPE) was
submitted during the year.
South Upi Qualified  Property, Plant and Equipment in the total amount of P27.041
million cannot be relied upon due to the failure of the agency to
conduct physical Accounting System and absence of Property
Ledger Card.
Sultan Kudarat Qualified  Cash balances of all funds totaling P26.188 million could not be
verified and validated because of the absence of Bank
Reconciliation Statement and the Bank Statements; and,
 Property, Plant and Equipment (PPE) accounts balance of

P249.524 million could not be ascertained due to non-
performance of actual physical inventory by the Inventory
Committee.
Sultan Mastura Qualified  The validity and accuracy of the reported Cash in Bank - Local
Currency Current Account amounting to P17,033 million could not
be readily established due to non-preparation and non
submission of Bank Reconciliation and bank statements; and,

documents, and non-recognition of depreciation; and,
 Failure to transfer the Quick Response Fund and the DRRM-

MOOE amounting to P14.183 million to the Trust Fund account.
Sultan sa Barongis Qualified  Property, Plant & Equipment with the total amount of P20.428
million cannot be ascertained due to unable to finish the physical
inventory of the existing Property, Plant and Equipment, and no
Report on the Physical Count of PPE (RPCPPE) was submitted
during the year.
Sultan Sumagka
Talayan Qualified  Property, Plant and Equipment valued at P165.875 million which
is 98.5% of the total assets could not be ascertained due to the
(a) continuing failure of the management to conduct physical
count of its Property, Plant and Equipment (b) and non-
maintenance of complete and properly accomplished Property,
Plant and Equipment Ledger Cards and Real Property Ledger.
465
Talitay Qualified  Property, Plant and Equipment valued at P16.167 million which is
92% of the total assets could not be ascertained; and,
 Failure to prepare and submit the Bank Reconciliation

Statements of all funds and recording of the reconciling items and
weak internal control system of Cash Account resulted to
unreconciled cash in bank balance amounting to P.058 million.
Upi Qualified  Account Construction in Progress – Infrastructure Asset in the

total amount of P16. 059 million cannot be verified due to the
absence of subsidiary ledgers, records and information to
validate its existence.
Sulu
Municipalities
Banguingui
Hadji Panglima
Tahil
Indanan
Jolo
Kalingalan Caluang
Lugus
Luuk
Maimbung
Panamao
Omar
Pandami
Panglima Estino
466
Pangutaran
Parang
Pata
Patikul
Siasi
Talipao
Tapul
TAWI-TAWI Qualified  Property, Plant and Equipment accounts with net book value
totaling P1.655 billion could not be ascertained due to the failure
of the LGU to update the physical inventory and to validate the
existence of reported various Construction and Heavy Equipment
with net book value of P49.872 million;
 Copies of Purchase Orders (POs)/ Contracts and Acceptance

and Inspection Reports (AIR) covering the procurement of
supplies, materials and equipment were not submitted to the
Auditor’s Office on time for the conduct of evaluation and
inspection of items purchased; and,
 Financial reports and paid Disbursement Vouchers (DVs) with

the corresponding supporting documents were not submitted on
time.
Municipalities
Bongao Qualified  Failure to conduct a physical inventory of its property, plant and
equipment as of year-end valued in the books at P 85.748 million.
The inadequacy of its records did not permit us to apply adequate
alternative procedures to determine the validity and correctness
of these accounts.
Languyan Qualified  Property, Plant and Equipment accounts with net books value
totalling P143.008 million could not be ascertained due to the
failure of the LGU to prepare and update physical inventory;
 Prior years payables due to the GSIS has unreconciled balances

and remained unremitted as of December 31, 2018 in the amount
of P2.411 million;
467
 Copies of Purchase Orders (POs)/Contracts and Acceptance and
Inspection Reports (AIR) covering the procurement of supplies,
materials and equipment were not submitted to the Auditor’s
Office on time for the conduct of evaluation and inspection of
items purchased; and,
 Financial reports and Disbursement Vouchers with the

corresponding supporting documents were not submitted on time.
Mapun Qualified  Failure to conduct a physical inventory of its property, plant and
equipment as of year-end valued in the books at P5.252 million;
and,
 Payable to GSIS amounting to P1.059 million did not reconcile

with the accounting records.
Panglima Sugala Qualified  Property, Plant and Equipment accounts with net book value
totaling P347.338 million could not be ascertained due to the
failure of the LGU to update physical inventory;

items purchased; and,
 Financial reports and Disbursement Vouchers (DVs) with the

Sapa-Sapa Qualified  Property, Plant and Equipment accounts with net book value
 Copies of Purchase Orders (POs)/Contracts and Acceptance

and Inspection Reports (AIR) covering the procurement
of supplies, materials and equipment were not submitted
to the Auditor’s Office on time for the conduct of evaluation and
inspection of items purchase;

of P1.227 million; and,
 Financial reports and paid Disbursement Vouchers (DVs) with the

Sibutu Qualified  Property, Plant and Equipment accounts with net book value
468
items purchased,;

of P.481 million; and,

Simunul Qualified  Failure to conduct a physical inventory of its property, plant and
equipment as of year-end valued in the books at P 90.288 million;
and,
 Payable to GSIS amounting to P 3.281 million did not reconcile

Sitangkai Qualified  Property, Plant and Equipment accounts with net book value
totaling P211.268 million could not be ascertained due to
the failure of the LGU to prepare and update physical
inventory ;

Inspection Reports (AIR) covering the procurement of
supplies, materials and equipment were not submitted
to the Auditor’s Office on time for the conduct of
evaluation and inspection of items purchased; and,
 Financial reports and paid Disbursement Vouchers

(DVs) with the corresponding supporting documents were
not submitted on time
South Ubian Qualified  Payable to GSIS amounting to P2.704 million did not reconcile
Tandubas Qualified  Property, Plant and Equipment Accounts with net book value
totaling P285.001 million could not be ascertained due to the
failure of the LGU to update physical inventory;
 Copies of Purchase Orders (POs)/Contracts and Acceptance

and Inspection Reports (AIR) covering the procurement of
supplies, materials and equipment were not submitted to
the Auditor’s Office on time for the conduct of evaluation and
inspection of items purchased; and,

469
Turtle Islands Qualified  Failure to conduct a physical inventory of its property, plant and
equipment as of year-end valued in the books at P 31.220 million;
and,
 Payable to GSIS amounting to P2.514 million did not reconcile

470
PART II
AUDIT
OBSERVATIONS
AND
RECOMMENDATIONS
AUDIT OBSERVATIONS AND RECOMMENDATIONS
One of the constitutional mandates of this Commission is to recommend measures

necessary to improve the effectiveness and efficiency of the operations of the government. To
comply with this constitutional duty, presented herein is the consolidated significant and common
audit observations among local government units (LGUs) and the recommendations intended to
address them.
The compendium consists of significant and common audit observations and

recommendations culled from the CY 2018 Annual Audit Reports (AARs) on LGUs, which is
presented according to the identified audit foci/areas for CY 2018.
A. 20% Development Fund
The Local Government Code (LGC) of 1991 provides that LGUs shall have a share in the
national internal revenue taxes equivalent to 40% of the total internal revenue collections of the
third fiscal year preceding the current fiscal year. The share is commonly known as the Internal
Revenue Allotment (IRA), which is allocated to LGUs in the following manner: Provinces (23%),
Cities (23%), Municipalities (34%) and Barangays (20%). The Department of Budget and
Management (DBM) computes the IRA for each LGU and the Bureau of the Treasury (BTr)
releases the funds. Further, Section 287 of the LGC requires each LGU to appropriate in its annual
budget no less than 20% of its annual IRA for development projects called as the 20%
Development Fund (DF). For calendar year (CY) 2018, the IRA of the LGUs totalled P419,082.5
million1, of which at least P83,816.5 million is appropriated for development projects.
DILG-DBM Joint Memorandum Circular (JMC) No. 2017-1 dated February 22, 2017
provides the updated guidelines on the appropriation and utilization of the 20% DF. The JMC aims
to enhance transparency and accountability in the LGUs' utilization of the 20% DF. The guidelines
provide that the LGUs may utilize the fund to finance their priority development projects and
programs, as embodied in the duly approved local development plan that directly support the
Philippine Development Plan, the Medium-Term Public Investment Program and the Annual
Investment Program (AIP). Further, the guidelines require that the projects considered for funding
shall contribute to the attainment of desirable socio-economic development and environmental
management outcomes and shall partake the nature of investments or capital expenditures. The
guidelines also enumerates those social, economic and environmental development projects that
are eligible for financing from the 20% DF, as well as those expenditure items that are not allowed
to be charged against the fund.
Budgetary requirements discourage the presentation of the LGUs budget for the 20% DF in
lump sum. Also, the AIP requires the presentation of the specific projects. However, in case of
appropriations for the fund presented in generic terms or in lump sum, its utilization needs prior
authorization from the local sanggunian.
Accounting policies require the maintenance of the 20% DF in a special account in the
general fund.
1 Net of the IRA for Metro Manila Development Authority amounting to P411.302 million (Source: www.dbm.gov.ph)
471
The CY 2018 AARs on LGUs reported the following observations on the 20% DF:
 On the appropriation of the fund:
a) Nine LGUs failed to re-appropriate the total amount of P115.158 million representing
savings from previous years’ implementation of various development projects under the
20% DF.
b) Twenty-Eight (28) LGUs presented their appropriation aggregating P982.399 million in

lump sum or generic terms, of which, 16 LGUs spent the lump sum appropriations totaling
P150.787 million without the prior authorization from the local sanggunian.
 On the implementation of the appropriation:
a) Eighty-Nine (89) LGUs utilized the 20% DF totaling P1,356.313 million for programs and
projects classified as not among the priority development projects and do not partake the
nature of investments or capital expenditures, while 101 LGUs used allocations amounting
to P456.583 million for expenditures not related to the implementation of development
programs and projects. The expenditures included salaries and wages, fuel expense, rent
expense, repairs and maintenance, and other operating and administrative expenses.
b) Current and continuing appropriations for the 20% DF aggregating P16,035.910 million of
499 LGUs remained unutilized as of the end of year due to non-implementation and/or
delayed implementation of the development projects attributed to poor planning, lack of
coordination with concerned offices, and non-monitoring of the implementation of the
development projects. On the other hand, two LGUs implemented/completed the projects
totaling P2.996 million funded under the 20% DF but the projects remained unutilized,
thus, defeating the objectives of the projects and the desired benefit for the intended users.
c) Disbursements from the 20% DF totaling P817.625 million of 35 LGUs were not supported
with complete documentary requirements.
 On the maintenance of records for the fund:
a) A special account to record separately the specific transactions of the 20% DF of 15 LGUs
was not maintained in the General Fund.
Recommendations:
 Ensure that savings from the implemented development projects are re-appropriated
for priority projects for funding under the 20% DF to optimize the utilization of the
fund and help augment the attainment of desirable socio-economic development
and environmental management outcome as envisioned in the comprehensive
development of the LGUs.
 The DILG and the DBM should strictly require the preparation of the AIP containing
the detailed information of the specific programs, projects and activities funded
from the 20% DF.
472
 Require the Local Chief Executives (LCEs) to strictly adhere to the guidelines
provided under DILG-DBM Joint Memorandum Circular No. 2017-1 dated February
22, 2017 on the appropriation and utilization of the 20% DF. Also, require the regular
monitoring and evaluation in the implementation of the development projects to
ensure optimum utilization of the 20% DF and to achieve the main purpose of the
fund.
 Stop the disbursement of government funds without complete documentations.
 Maintain a special account in the General Fund for the 20% DF to record and monitor
the disbursements from the fund.
B. Fund Transfers from National Government Agencies (NGAs) to Local Government Units
(LGUs) – Direct Releases to LGUs
B.1 Bottom-Up Budgeting (BuB); Assistance to Disadvantaged Municipalities (ADM);

Assistance to Municipalities; Assistance to Cities; and Financial Assistance to
LGUs
The Bottom-up Budgeting (BuB) program seeks to increase the citizens’ access to local
service delivery through a demand-driven budget planning process and to strengthen government
accountability in local public service provision (DBM-DILG-DSWD-NAPC Joint Memorandum
Circular No. 7 dated November 3, 2015). The BuB oversight and participating agencies are tasked
to ensure the implementation of priority poverty reduction projects as identified at the city/municipal
level through the BuB participatory planning and budgeting process. Under the Special Provisions
of the FY 2018 General Appropriations Act, allocations to the Local Government Units (LGUs) were
as follows:
Financial Assistance to LGUs P 7.030 billion

Assistance to Municipalities 11.714
Assistance to Cities 2.590_____
Total P21.334 billion
The CY 2018 AARs on LGUs disclosed delays/partial implementation of projects

amounting to P1,252.560 million in 78 LGUs. On the other hand, 17 LGUs with funds aggregating
to P258.662 million projects were not implemented. The unutilized funds/excess funds from
completed projects amounting to P243.336 million of 26 LGUs were not returned to the Source
Agency or the Bureau of Treasury (BTr).
In the disbursements of funds totaling P1,975.130 million, 74 LGUs failed to submit

supporting documents, rendering the regularity and propriety of the transactions doubtful.
Deficiencies were noted in the implemented projects of 30 LGUs costing P418.598 million as they
failed to meet the standards of their partner agencies and to comply with the guidelines on the
procurement, budgeting, accounting and auditing rules and regulations casting doubt on the validity
of the transactions.
473
As regards the recording of transactions related to program, the auditors noted deficiencies
in 18 LGUs with funds totaling P237.613 million in the recognition of the transactions and the non-
recording of the completed projects, thus, affecting the fair presentation of financial statements.
Recommendations:
Require the partner/monitoring agencies to:
 Conduct regular monitoring and evaluation on the status of implementation of the

different programs, projects and activities, and initiate measures to assist the
implementing agencies compliance with the implementation and/or liquidation
requirements.
 Encourage implementing agencies to coordinate with the source agency for

possible re-alignment of the unutilized funds to related projects or return the funds
to the source agency.
Require the Local Chief Executives to:
 Ensure timely implementation of projects and address the deficiencies noted in the
implemented projects in order to operationalize them;
 Coordinate with the source agencies for the possible realignment of unutilized funds
to related projects or the return of the funds to the source agency or the BTr;
 Strictly comply with the requirements in the recognition, utilization and recording of
the transferred funds; and
 Strengthen internal control systems in the different financial processes.
B.2 Conditional Matching Grant to Provinces (CMGP) Program/Konkreto at Ayos na

Lansangan at Daan sa Pangkalahatang Kaunlaran (KALSADA) Program
The National Government allocated under the Special Provisions of the FY 2018 General
Appropriations Act, funds amounting to P8.224 billion for CMGP for road and bridge repair,
rehabilitation and improvement. It is a partnership program between the Department of the Interior
and Local Government (DILG) and Department of Budget and Management (DBM) for Provincial
Local Government Units in response to the needed infrastructure support, as well as reforms in
local roads management (LRM) and public financial management (PFM). DILG and DBM Joint
Memorandum Circular No. 2017-2 dated April 26, 2017 prescribes the guidelines for the
implementation of the CMGP for FY 2017 and thereafter.
The CY 2018 AARs on LGUs disclosed delays in the implementation of projects amounting
to P718.915 million in 10 LGUs due to the following factors:
a) Failure to monitor the project implementation resulting to non-imposition of liquidated

damages on defaulting contractor or termination of contracts for negative slippages of more
than 15%; and
474
b) Conditions such as unworkable weather, site problems and heavy traffic that caused lag
days ranging from 146 to 268 days.
On the other hand, implemented projects of eight LGUs with funds aggregating P177.771
million showed deficiencies upon inspection and contract review such as follows:
a) Deficiencies in noted upon technical inspection of the project.
b) Final payment to contractors lacked supporting documents.
c) Project costs were found to be excessive as the contract cost exceeded the COA cost.
In one province, Quarterly Reports on Utilization and Accomplishments for the KALSADA
and CMGP Programs were not uploaded to the Open Roads Portal and the Provincial
Government’s Website, inconsistent with the provisions of the DBM Local Budget Circular No. 117
dated February 5, 2018, and Section 90 of the General Appropriation Act for Fiscal Year 2018,
thereby limiting transparency in the fund utilization and efficiency of implementation, that hindered
the general public and other stakeholders from participating in the monitoring and evaluation
thereof.
Recommendations:
 Ensure timely implementation of projects and closely monitor all projects. Evaluate
the contractor’s capacity to enter into contracts and the status of the projects, then,
take immediate action on problems encountered and impose sanctions to erring
contractors.
 Exercise due care and diligence in monitoring the project implementation. Ensure
completion of projects on target date and in accordance with the terms of the
contract.
 Direct the contractor to initiate repair on observed deficiencies in the project and
demand payment of cost from the contractor responsible for the deficiencies.
 Review and check the completeness and propriety of supporting documents before
claims are processed for payment.
 Demand refund from the contractor of the amount or specific performance, if

feasible.
 Regularly upload quarterly reports on fund utilization and accomplishments to the

Open Roads Portal and the LGU’s Website, respectively; and in case of
unavailability of the portal, certification from the Portal Manager and alternative
procedures shall be secured.
475
B.3 PAyapa at MAsaganang PamayaNAn (PAMANA) Program
PAyapa at MAsaganang PamayaNAn or PAMANA is the national government’s

convergence program that extends development interventions to isolated, hard-to-reach and
conflict-affected communities, ensuring that they are not left behind. The program aims to bring
back government to PAMANA areas, thereby ensuring that the communities benefit from the
improved delivery of basic services and are served by responsive, transparent and accountable
government units as aimed by the Local Government Code.
The FY 2018 General Appropriations Act allocated funds under the Office of the
Presidential Adviser on the Peace Process (OPAPP) for the implementation of PAMANA Program,
the amount of P5.207 billion to be used for the construction of roads and bridges in conflict-affected
areas already identified by the OPAPP.
The CY 2018 AARs on LGUs disclosed the following observations in the implementation of
the PAMANA Program:
a) Out of the six projects under the PAMANA program of an LGU, only two projects were
completed, two were delayed and the rest were terminated.
b) PAMANA projects with funds already transferred to the LGUs and some with completed
projects have not been utilized yet, thus, defeating the purpose of the downloaded funds.
On the other hand, implemented projects of five LGUs with funds aggregating to P123.243
million had deficiencies as follows:
a) Project Proposals of an LGU were not responsive to the objectives of the program and
were not compliant to the documentary requirements enumerated under Annex E of the
Joint Memorandum Circular of the Department of the Interior and Local Government
(DILG) and OPAPP.
b) Noted violations of PAMANA beneficiaries to the terms and conditions of the Memorandum
of Agreement (MOA).
c) Transactions involving procurement were not compliant to the requirements set forth under
the Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 or
the Government Procurement Reform Act.
d) Completed projects were not closed upon liquidation/completion, thus affecting the fair
presentation of the account in the financial statements. Also, unexpended funds of
completed projects were not returned to the DILG. Liquidation Reports and pertinent
documents were not submitted for audit.
Recommendations:
 Ensure timely implementation of projects and closely monitor all projects. Evaluate
the contractor’s capacity to enter into contract and impose appropriate sanctions to
476
erring contractors to ensure project completion. Strictly enforce the provisions of
Annex I of the 2016 Revised IRR of RA No. 9184 relative to termination of contracts
for default.
 Fast track implementation of project and prioritize utilization of allocated funds.

Otherwise, the fund should be returned to the National Government.
 Review and evaluate the project proposal and ensure that these projects respond to
the peace and development issue(s) identified to be existing in the conflict-affected
area/population, supportive of the objectives of the PAMANA Program and in
accordance with the implementing guidelines.
 Comply strictly with the requirements as detailed in the MOA. Capacitate the
beneficiaries by providing them with the written policy, their duties and
responsibilities, among others.
 Ensure compliance with the documentary requirements and strictly observe

provisions on transferred funds under COA Circular No. 94-013 dated December 13,
1994 and Sections 97, 100 and 101(b) of the New Government Accounting System
Manual for LGUs, Volume I.
B.4 Provision of Potable Water Supply – Sagana at Ligtas na Tubig sa Lahat

(SALINTUBIG) Program
The SALINTUBIG program aims to provide potable water supply systems to waterless
municipalities, barangay, health centers, and resettlement sites to lessen the spread of diseases
and improve sanitation services.
The FY 2018 General Appropriations Act allocated funds under the Local Government
Support Fund (LGSF) in the amount of P1.386 billion to be used exclusively for SALINTUBIG
projects.
The Department of the Interior and Local Government (DILG) Memorandum Circular No.
2018-104 dated July 5, 2018 provides policy guidelines in monitoring, among other programs under
the LGSF, the FY 2018 SALINTUBIG program, and thereafter.
The CY 2018 AARs on LGUs disclosed the following observations in the implementation of
SALINTUBIG Program:
a) Delayed/partial implementation of projects totaling P76.483 million by 13 LGUs, thus,

depriving the constituents of the benefits expected from completed projects.
b) Poor maintenance on completed projects deprived the beneficiaries of enjoying the

benefits of the program and realizing revenue targets.
c) Uncompleted/Non-operational projects deprived the constituents of the timely delivery of

services and intended benefits.
477
d) Non-compliance to DILG Memorandum/Memorandum of Agreement (MOA) on the
operation, monitoring and maintenance of completed projects; and also as regards
preparation and submission of documentary requirements.
e) Accomplishments and implementation did not conform to the Program of Work, Revised
Implementing Rules and Regulations of Republic Act (RA) No. 9184 and Section 86 of
Presidential Decree No. 1445.
f) Disbursements and reports of 18 LGUs amounting to P594.786 million lacked sufficient

g) Projects totaling P47.346 million remained unliquidated in the books of two LGUs resulting
in the failure to close “Due to NGAs” account and to recognize depreciation expense in the
financial statement.
Recommendations:
 Fast track implementation of projects and closely monitor all projects, otherwise,
impose applicable sanctions and penalties if warranted.
 Enhance monitoring of the facilities to determine the necessary course of actions

which shall be undertaken to address the current issues and concerns involving the
SALINTUBIG Project. Strengthen the operations of the waterworks. Appropriate
funds for the maintenance of the projects.
 Conduct an assessment and technical evaluation of the water system project to find
out the reasons for the non-operation and to undertake the necessary remedial
measures so that expected benefits due to intended recipients be timely delivered
and to ensure that the amount spent in the construction of the water system would
not have been wasted.
 Strictly comply with the relevant provisions of the DILG Memorandum Circulars, as
well as all applicable laws, circulars and issuances relative to the implementation of
SALINTUBIG program. Compliance with the requirements as detailed in the MOA
should also be observed.
 Abide with the standards set forth in the existing procurement regulations to protect
the interest of the Government and to avoid suspension or disallowance. Avail
remedies for the needed rectification over the constructed structures as prescribed
in the rules and regulations under RA No. 9184.
 Ensure compliance with the documentary requirements and strictly observe

provisions on transferred funds under COA Circular No. 94-013 dated December 13,
1994 and Sections 97, 100 and 101(b) of the New Government Accounting System
Manual for LGUs, Volume I.
478
 Require the contractors to submit immediately the billing documents. Upon
submission, concerned offices should process the documents for immediate
preparation of disbursement vouchers and issuance of checks, then make the
necessary adjustments to the account “Due to Other NGAs” to reflect the
completion of projects and liquidation of the transferred fund.
B.5 Recovery Assistance for Yolanda (RAY)
The Government formulated the Recovery Assistance on Yolanda (RAY) as a strategic

plan to guide the recovery and reconstruction initiatives in the areas affected by Typhoon Yolanda.
The fund was sourced from the Department of Budget and Management (DBM) for the repair and
reconstruction of damaged infrastructures in the municipal and barangay level with a total funding
support of P5.221 billion. The DBM released funds to the Department of the Interior and Local
Government for the implementation of Local Government Unit (LGU) Programs/Projects in the
Yolanda-affected areas.
For CY 2018 audit, three (3) LGUs disclosed the following:
a) Expenditures in some programs for the Yolanda Rehabilitation and Reconstruction

Program (YRRP) for CY 2016 and CY 2017 exceeded the allocated amounts, in violation of
the Work and Financial Plan and the Memorandum of Agreement.
b) Balances from completed projects totaling P1.331 billion were not returned to the Source
Agencies, contrary to Section 4.9 of COA Circular No. 94-013, thus, were used for other
on-going projects and the full liquidation of the funds were not made.
c) Distribution of agricultural goods and facilities totaling P11.410 million to various Farmers’
Associations out of 2016 and 2017 YRRP-Department of Agriculture (DA) funds were
made without executing a Memorandum of Agreement between the LGU and the
respective association, contrary to Section 102 of Presidential Decree No. 1445 and
pertinent provisions of COA Circular No. 2012-001, thus, accountabilities were not
established.
d) Monitoring and inspection of the project implementation is not being done, to the
disadvantage of the government and the intended beneficiaries.
Recommendations:
 Require the City Accountant to:

a. Obtain the complete set of Memorandum of Agreement (MOA) on all programs
including the Work and Financial Plans as guide in the disbursements;
b. Certify expenditures within the approved allocation in the MOA; and
c. Return unused funds on completed projects based on the Fund Utilization
Report (FUR).
 Amend the MOA to include the provisions defining the accountabilities and
responsibilities of both parties as regards the distributed equipment, livestock, other
479
agricultural supplies and interventions to ensure that the objectives of the program
will be achieved for the benefit of the associations and its members.
 Ensure compliance with the provisions of the MOA and, secure an authority from the
DA to utilize the savings to offset against the excess expenditures. Otherwise, the
excess amount may be disallowed in audit.
B.6 Bohol Earthquake Assistance (BEA)
The Bohol Earthquake Assistance (BEA) funded thru the Department of the Interior and
Local Government (DILG) was formulated to facilitate the recovery and return to normalcy of
government operations, services and accelerate economic activities in the areas affected by the
Bohol Earthquake. The initial fund for BEA was P2.4 billion. There were 44 LGUs in Bohol that
were considered in the program.
In the CY 2018 audit, it was noted that:
a) Fund transfers amounting to P0.323 million to other LGUs remained unliquidated contrary
to the Memorandum of Agreement entered into with the Municipality of Dauis, Bohol, thus,
propriety of fund utilization cannot be determined.
b) Reconstruction/rehabilitation of various projects totaling P166.750 million were not covered

by insurance as required in Section 5.1 of the Tripartite Memorandum of Agreement (MOA)
for the BEA-DILG Fund, hence, exposing the LGU in Sagbayan, Bohol to risk of loss of
funds and further depletion of limited financial resources.
Recommendations:
 The Municipality of Dauis, Bohol send Demand Letters to the recipient agencies with
unliquidated fund transfers. Ensure that liquidations are made for any previous
financial aid/assistance before the release of additional funds to ensure their proper
utilization; and
 The Local Chief Executive of Sagbayan, Bohol should take out coverage with
responsible insurers for completed projects to cover risk of fire, flood and other
damages in accordance with the Tripartite Memorandum of Agreement for the DILG-
BEA Fund to minimize risk of loss of funds and depletion of financial resources.
C. Fund Transfers Received from NGAs, Non-Government Organizations/People’s

Organizations (NGOs/POs), and Other LGUs
Sec. 25 (b) of RA 7160, otherwise known as the Local Government Code, specifically
provides that “National agencies and offices with project implementation functions shall coordinate
with one another and with the local government units concerned in the discharge of these functions.
They shall ensure the participation of local government units both in the planning and
implementation of said national projects.”
480
Also, Section 34 thereof institutionalizes the partnership of the non-governmental,
community-based or sectoral organizations with the LGUs. Section 36 further states that an LGU
may, through its Local Chief Executive and with the concurrence of the Sanggunian concerned,
provide assistance, financial or otherwise, to such people’s and non-governmental organizations for
economic, socially-oriented, environmental, or cultural projects to be implemented within its
territorial jurisdiction.
Commission on Audit Circular No. 2012-001 dated June 14, 2012 enumerates the
documentary requirements for the release and liquidation of funds transferred to NGOs/POs and
Implementing Agencies. In addition, COA Circular No. 2007-001 dated October 25, 2007 provides
the guidelines in the grant, utilization and liquidation of funds transferred to implementing agencies
and funds released to NGOs/POs.
In the CY 2018 audit on the LGUs, the AARs disclosed the following observations:
 On the implementation of Programs, Projects and Activities (PPAs) funded by the NGAs:
a) There were delayed and partial implementation of PPAs amounting to P3.247 billion in 62
LGUs, partly due to incomplete download of funds from Source Agencies. Other projects
were initiated at a much later date and not completed within the desired project duration as
specified in the contract. On the other hand, eight LGUs with project funds amounting to
P499.490 million were unable to implement the projects funded by NGAs, thus, defeating
the purpose of the downloaded funds.
b) Inspection of projects implemented in 12 LGUs amounting to P255.298 million disclosed

that these were still on-going or have not yet been completed.
c) Funds of P3.955 billion received from NGAs for implementation of PPAs by 81 LGUs were
not utilized and remained idle, thereby, depriving their constituents of the intended benefits
expected therefrom.
d) Twelve LGUs completed PPAs amounting to P68.971 million but the projects have not
been utilized or not yet operational/functional and remained idle, resulting in opportunity
losses and unrealized objectives/purpose for the fund transfer.
e) Utilization of funds amounting to P123.783 million received by 15 LGUs could not be

evaluated due to the absence of Memorandum of Agreement (MOA)/Trust Agreement
(TA)/Memorandum of Understanding (MOU) between the Source Agencies (SA) and the
LGUs. Requirements for project implementation, reporting and responsibilities of both
parties were not clearly defined and made official contrary to Section 4.1 of COA Circular
94-013 dated December 13, 1994, thus, accountabilities could not be established. The
monitoring and inspection of the implemented projects could not be done in the absence of
guidelines as basis for the objective/proper evaluation of projects.
f) There were deviations in the implementation of projects by 11 LGUs as terms and

conditions in the MOA were not strictly observed by the implementing parties.
481
 The review of the transaction documents and reports revealed the following deficiencies:
a) Fund transfers to 26 LGUs amounting to P1.122 billion and fund transfers made by 17
LGUs to NGOs/POs amounting to P96.264 million remained in the books of accounts due
to unsubmitted or delayed submissions of Liquidation Reports/Fund Utilization Reports.
Balances in the books include unliquidated fund transfers or unrecorded liquidations. Also,
deficiencies on the release of funds and the monitoring of project implementation were
noted on funds amounting to P32.637 million transferred by 12 LGUs to NGOs/POs.
b) Fund transfers to 29 LGUs amounting to P310.689 million were booked up as subsidy

income instead of liability, thus, financial statements were not fairly presented.
c) Utilization of funds amounting to P1.620 billion by 70 LGUs were without complete

supporting documents. Records such as schedules and/or subsidiary ledgers or other
relevant documents were not readily available and documentary requirements for COA’s
review were submitted late by nine LGUs.
d) There were no separate Subsidiary Ledgers (SLs) for each project funded by NGAs. Costs
of assets amounting to P142.871 million acquired upon utilization of fund were not taken
up in the books.
e) There were noted variances between the balances of the General Ledger and SLs of the
Due To/Due From accounts. Some Trust Fund accounts reflect negative balances which
affected their fair presentation in the financial statements.
 Other observations:
a) Excess funds amounting to P672.729 million from completed projects of 88 LGUs were not
returned to the Source Agencies or the Bureau of Treasury (BTr). Twenty-two LGUs had
excess funds amounting to P335.471 million that remained outstanding in the books and
have been dormant for more than 10 years.
b) Unutilized balances of the Priority Development Assistance Funds (PDAF) amounting to

P11.396 million of 13 LGUs were not returned to BTr despite the Supreme Court’s
Decision declaring PDAF as unconstitutional in G.R. Nos. 208566, 208493 and 209251, all
dated November 19, 2013.
c) Funds downloaded by NGAs to 28 LGUs remained dormant, while 37 LGUs had

unliquidated funds amounting to P540.857 million. On the other hand, nine LGUs have
P85.336 million funds downloaded to NGOs/POs which have been long outstanding and
unliquidated.
d) SLs were not maintained for each project funded from transfers. Likewise, assets
acquired/constructed from the transfers were not recognized in the books of accounts of
the LGUs.
482
Recommendations:
 Ensure prompt and efficient implementation of projects/programs funded from

transfers of other entities.
 Formulate work plans/actions to immediately address risks of any delays or non-

implementation of projects. Regularly conduct monitoring and evaluation on the
project implementation and use of completed projects.
 Execute MOA/TA/MOU for every project funded from other Government Agencies to
ensure that PPAs are implemented according to the purpose and reported compliant
with the standard/guidelines set in the agreement.
 Enjoin the local fiscal officers to:

a. Cause the return of the unutilized balances of fund transfers and PDAF to the
SA or the BTr.
b. Submit reports of utilization to the SA to effect liquidation in their books of
accounts.
c. Maintain Subsidiary Ledgers for each project funded by the NGAs and those
funds downloaded to other LGUs and NGOs/POs. Take up unbooked
transactions.
D. Local Disaster Risk Reduction Management Fund (LDRRMF)
Republic Act No. 10121, also known as the “Philippine Disaster Risk Reduction and
Management Act of 2010”, strengthen the Philippine Disaster Risk Reduction and Management
System, provide for the National Disaster Risk Reduction and Management Framework and
institutionalize the National Disaster Risk Reduction and Management Plan, appropriate funds
therefore and for other purposes.
Sec. 21 of the Act requires that no less than 5% of the estimated revenue from regular
sources shall be set aside as the Local Disaster Risk Reduction Management Fund (LDRRMF) to
support disaster risk management activities. Of the amount appropriated for LDRRMF, thirty
percent (30%) shall be allocated as Quick Response Fund (QRF) or stand-by fund for relief and
recovery programs in order that situation and living conditions of people in communities or areas
stricken by disasters, calamities, epidemics, or complex emergencies, may be normalized as
quickly as possible. Unexpended LDRRMF shall accrue to a special trust fund solely for the
purpose of supporting disaster risk reduction and management activities of the Local Disaster Risk
Reduction Management Council (LDRRMC) within the next five (5) years.
NDRRMC-DBM-DILG Joint Memorandum Circular (JMC) No. 2013-1 dated March 25,
2013 provides for the allocation and utilization of Local Disaster Risk Reduction and Management
Fund (LDRRMF), which guide the LGUs in the allocation and use of the LDRRMF and to enhance
transparency and accountability in using the fund. The issuance provides that the Local Disaster
Risk Reduction and Management Plan (LDRRMP) shall be the basis for the allocation of the
LDRRMF. The LGUs have to “formulate and implement a comprehensive and integrated LDRRMP
in accordance with the national, regional and provincial framework, and policies on disaster risk
483
reduction in close coordination with the local development councils” (Section 12 (6) of RA 10121). It
should encompass the four (4) thematic areas of disaster risk reduction and management such as
disaster prevention and mitigation, disaster preparedness, disaster response, and disaster
rehabilitation and recovery.
Also, Item 6.7 of the JMC provides that the procurement of supplies and equipment
chargeable against the LDRRMF shall be subject to RA 9184 (An Act Providing for the
Modernization, Standardization, and Regulation of the Procurement Activities of the Government
and For Other Purposes) and its Implementing Rules and Regulations.
COA Circular No. 2012-002 dated September 12, 2012, provides the Accounting and
Reporting Guidelines for the Local Disaster Risk Reduction and Management Fund of Local
Government Units, National Disaster Risk Reduction and Management (NDRRM) Fund, given to
LGUs and Receipts from Other Sources.
Item 4.4 of the Circular provides that 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 years. The LDRRMCs shall decide on the use of the unexpended
balance of the LDRRMF which shall be incorporated in the Local Disaster Risk Reduction
Management Fund Investment Plan (LDRRMFIP).
Also, Item 5.1.10 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 Liability-
DRRM” (Code 438) in the Trust Fund books.
Review of the LGUs’ CY 2018 transactions and operations on the LDRRMF showed
deficiencies, as hereunder presented in three groups, namely: planning, utilization and reporting.
 Planning – the auditors reported the following observations on the (i) preparation of the
LDRRMP, (ii) LDRRMFIP, (iii) Allocation for the LDRRMF, and (iv) creation of the Local
Disaster Risk Reduction Management Office (LDRRMO):
a) The prior years’ unexpended balance of the LDRRMF totaling P2.737 billion of 80
LGUs were not incorporated in the LDRRMFIP.
b) Thirty (30) LGUs failed to prepare or submit the LDRRMP.
c) One Hundred Fourteen (114) LGUs failed to prepare or submit the LDRRMFIP
compliant with the prescribed format listing the programs, projects and activities to be
implemented and funded from the LDRRMF.
d) The required creation of the LDRRMO in every province, city or municipality to oversee
the implementation and monitoring of the disaster activities remained unimplemented
in 35 LGUs. Although the office was created in some LGUs, the hiring of the
mandatory position for the Office has not been effected.
 Utilization of the LDRRMF – the reported observations under the category, to wit:
a) The expenditures and disbursements totaling P233.802 million charged against the
allocated LDRRMF in 141 LGUs were not related to disaster preparedness, prevention,
484
mitigation and rehabilitation activities, or the corresponding program, project and
activities were not included in the LDRRMFIP. Also, various transactions of 53 LGUs
were not properly recorded and supported with complete documentation.
b) The utilization of the LDRRMF totaling P3.408 billion in 203 LGUs was not maximized.
Low utilization rate was reported in 15 LGUs. The condition goes against the declared
policy which is to strengthen the capacity of the LGUs to build a disaster resilient
community.
c) Some LGUs failed to observe the provisions on procurement or RA 9184.
 Recording and Reporting the LDRRMF – reported the following findings and observations
under the group:
a) The unexpended/unutilized LDRRMF totalling P864.561 million in 137 LGUs which

accrues to the special trust fund in the Trust Fund books still remained in the General
Fund books, thereby, exposing the funds to possible misuse.
b) The unexpended/unutilized LDRRMF after the period of five years totaling P296.135
million in 46 LGUs were not reverted back to the General Fund and made available for
use in other social services identified by the local sanggunian.
c) One Hundred Eighty-Eight (188) LGUs failed to prepare and submit the Monthly Report
on the Sources and Utilization of the DRRMF.
d) Twenty-Six (26) LGUs failed to comply with the accounting and reporting requirements
provided under COA Circular Nos. 2012-002 dated September 12, 2012 and 2014-002
dated April 15, 2014, respectively.
e) Thirty-Seven (37) LGUs failed to disclose the details of unexpended balance of the
LDRRMF in the Notes to Financial Statement contrary to item 5.1.16 of COA Circular
No. 2012-002 dated September 12, 2012.
 Other observations:
a) Forty-Eight (48) LGUs fall short in observing the disaster preparedness minimum
standards, thus, creating doubts on their capability to respond to emergency and
critical incidents to prevent or mitigate the impact of the hazards, risks and
vulnerabilities.
b) Three LGUs failed to comply with the minimum equipment requirement under the
standards for disaster preparedness.
Recommendations:
 Require each LGU to establish the LDRRMO and fill up the positions provided for the
Office in order to have a dedicated office responsible for setting the direction,
development, implementation and coordination of the disaster risk reduction and
management programs and activities.
485
 Enjoin the LDRRMCs to monitor and evaluate the implementation of the LDRRMPs.
 Require the inclusion of the unspent prior years’ LDRRMF in the preparation of the
LDRRMFIP.
 Utilize the LDRRMF in accordance with PPAs detailed in the LDRRMFIP and require
the complete documentation of all expenditures incurred.
 Require the submission of the Monthly Report on Sources and Utilization of the
DRRMF, transfer the unexpended LDRRMF to the special trust fund in the Trust Fund
books, and revert back to the General Fund the unutilized LDRRMF after five years.
 Observe the disaster preparedness minimum standards set by the DILG to

effectively prevent and mitigate the risks and impacts of the hazards of calamities.
 Comply on the provisions of RA 9184, in the procurement process and in the

implementation of procurement contracts.
E. Solid Waste Management
The Local Government Code mandates the LGUs to discharge functions and
responsibilities necessary for the efficient and effective provision of the basic services and facilities
which include solid waste disposal system and services or facilities related to general hygiene and
sanitation, beautification, and solid waste collection as provided for under Section 17 of this Code.
Further, Republic Act No. 9003 otherwise known as an “Ecological Solid Waste
Management Act of 2000”, declared the policy of the State to adopt a systematic, comprehensive
and ecological solid waste management program that ensures the protection of public health and
the environment and the proper segregation, collection, transport, storage, treatment and disposal
of solid waste through the formulation and adoption of best environmental practices.
The law provides the comprehensive solid waste management and the following
institutional mechanism affecting the LGUs:
 Every LGU has to establish a Solid Waste Management Board (SWMB) and has to prepare
a Solid Waste Management Plan (SWMP) to be approved by the National Solid Waste
Management Commission (NSWMC).
 Each LGU must adopt and properly implement the components of the SWMP.
The Ecological Solid Waste Management Act of 2000 also provides the financing for the
solid waste management known as the “Solid Waste Management Fund.” The LGUs are authorized
to collect solid waste management fees, fines and penalties.
However, the CY 2018 audit showed that in 26 LGUs, the collection of solid waste/garbage
fees, fines and penalties was not imposed due to unclear guidelines imposing such fees and
violation of solid waste regulation.
486
Hereunder is the summary of the reported common audit observations in the CY 2018
AARs on LGUs:
No. of LGUs with the reported deficiency

Nature of Deficiency Total
Provinces Cities Municipalities
a) Failure to appropriate funds for 1 0 6 7
the SWM program and activities
b) Non-creation/establishment of 1 4 30 35
the SWMB
c) Failure to update or formulate the 11 6 146 163

SWMP
d) Absence of Multi-Purpose 0 1 1 2
Environment Cooperatives or
Association
e) Failure to implement effective 2 8 66 76

and efficient waste disposal
facility; still operating open
dumpsite
f) Delay or failure to establish and 2 8 67 77

maintain a sanitary landfill due to
non- compliance of requirements
g) Failure to establish or maintain 2 16 82 100

Materials Recovery Facility
h) Poor enforcement or 2 17 147 166

implementation of the policies
and rules of mandatory
segregation of waste at source
and the proper collection, transfer
and storage of solid wastes
i) Non-observance of the 1 7 19 27
requirements for collection of
solid waste, like wearing
protective equipment and
relevant trainings to ensure
proper handling of waste
j) Failure to conduct information 2 5 79 86

and education campaign leading
to non-awareness on the rules
and regulations on solid waste
management
487
No. of LGUs with the reported deficiency
Nature of Deficiency Total
Provinces Cities Municipalities
k) Non-enforcement of rules and 1 0 15 16
regulations and provide
Incentives to encourage LGUs to
participate and develop SWM
l) Failure to comply with the 2 0 31 33

requirements of RA 9003 for the
full attainment of an environment-
friendly and healthy community.
m) Delay or failure to entirely 3 1 18 22

implement the activities in the
SWMP
n) Non-utilization of fund transfer, 0 1 3 4

financial assistance and
appropriation for the
implementation of SWMP
o) Non-compliance of RA 9003 3 0 9 12
p) Failure to submit or provide 0 5 2 7

documentary requirements on
disbursements for solid waste
management.
Recommendations:
 Provide clear guidelines on the collection of garbage or solid waste management

fees.
 Comply strictly to all provisions of the RA No. 9003, in the formulation of solid waste
management plans, adoption of best environmental practices and implementation of
the plans, in order to achieve the intended purpose of the law and to ensure
protection of public health and environment.
 Utilize funds appropriated for environmental programs and activities in order to

attain the objective of ensuring protection of public health and the environment.
 Conform to the prescribed guidelines for the efficient and effective discharge of its
Solid Waste Management function.
488
F. Financial Liabilities – Loans Payable
Section 296 of Republic Act No. 7160 otherwise known as the Local Government Code of
1991 empowers the Local Government Units (LGUs) to create indebtedness, avail of credit facilities
to finance local infrastructure and other-socio-economic projects in accordance with the approved
Local Development Plan and Public Investment Program from government or private banks and
other lending institutions. Further, Section to 297 of the said law also allows the LGUs to contract
loans, credits, and other forms of indebtedness with any government or domestic private bank and
other lending institutions to finance the construction, installation, improvement, expansion,
operation, or maintenance of public facilities, infrastructure facilities, housing projects, and
acquisition of real property. The Department of Finance, as one of the oversight agencies, may
render technical assistance to LGUs who wants to avail loans.
The CY 2018 AARs on LGUs disclosed that balances of Loans Payable accounts and
Interest Payables accounts are of doubtful reliability due to the following reasons:
a) Loans and Interest were not capitalized nor recorded in the books of accounts;
b) Inadequate documents support the Loans and Interests Payable balances;
c) There were unreconciled/discrepancies of balances between bank records and accounting

records;
d) Loans amortizations and interests have not been paid for several years;
e) Penalties were incurred due to non –payment of loan amortizations and interest charges;
f) Information on Loans was not discussed in the Financial Statements; and,
g) Loans will still contracted despite the existence of available cash balances.
Recommendations:
Require the local chief executives to:
 Direct the local accountant to review the Loans Payable account to:
a. verify the correctness of the transactions included in the account and their
proper classification and presentation in the financial statement;
b. confirm from the grantor/lending agencies to determine the existence of the

loans receivable accounts in their books of accounts; and,
c. prepare the necessary Journal Vouchers (JVs) to adjust the correct accounting
entries in recording loans and interests.
 With the concurrence of the Sanggunian, set–up the appropriation for payment of
monthly amortization and interest of loans. Thereafter, cause the regular payment of
loan to avoid penalties.
489
G. Audit of Revenue-Generating Programs
Section 129 of the 1991 Local Government Code gives full fiscal autonomy to all Local
Government Units (LGUs) the power to create its own sources of revenue and to levy taxes, fees
and charges subject to the provisions of the Local Government Code, which income derived
therefrom accrue exclusively to LGUs concerned. The Sangguniang Panglalawigan, Panglungsod
or Bayan will passed a Resolution or Ordinance authorizing the Provincial/City or Municipal
Treasurers to collect taxes, fees and charges.
The CY 2018 AARs on LGUs disclosed the following observations:
a) One Hundred Thirty-Nine (139) LGUs were unable to maximize their revenue earning
capabilities resulting in possible losses of P4.485 billion;
b) Revenue Codes of 51 LGUs were not updated, causing the loss of additional income
estimated at P17.946 million; and,
c) Thirty-Four (34) LGUs failed to execute or renew their Contract of Lease. In addition, some
contracts were disadvantageous to the government.
Recommendations:
 Maximize the operations of stall in the market by leasing vacant stalls to interested
constituents.
 Update/Revise the LGUs’ Revenue Code to generate more income.
 Require the Provincial/City/Municipal Treasurers to issue demand letters for

delinquent taxpayers and institute/file appropriate action against the delinquent
taxpayers.
 Enjoin the Local Treasurers to revisit the lease contract agreements executed by the
local government unit to update the terms and conditions in order to become
advantageous to the government.
H. Payment to Casuals, Job Orders, Contractuals and Consultants
Title III, Section 77 of Republic Act No. 7160 - Responsibility for Human Resources and
Development, provides that the chief executive of every LGU shall be responsible for human
resources and development in his unit and shall take all personnel actions in accordance with the
Constitutional provisions on civil service, pertinent laws, rules and regulations thereon, including
such policies, guidelines and standards as the Civil Service Commission may establish. However,
the local chief executive may employ emergency or casual employees or laborers paid on a daily
wage or piecework basis and hired through job orders for local projects authorized by the
Sanggunian concerned, without need of approval or attestation by the Civil Service Commission
provided that the period of employment of emergency or casual laborers does not exceed six
months.
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Payments to casuals, job orders (JOs), contractuals, consultants, private lawyers, and legal
researchers follow the regular process of financial transactions in the LGUs.
In the review of the CY 2018 transactions pertaining to payments to casuals, JOs,

contractuals, consultants, private lawyers, and legal researchers, the Auditors reported the
following observations.
 Hiring:
a) Eighty-three (83) LGUs continuously hired casuals, JOs, contractuals, and consultants to
augment their regular workforce. The casuals, JOs and contractuals were assigned to
perform regular/recurring and administrative functions, which were not related to the
implementation of specific local projects; while consultants were hired for the jobs that were
not considered highly technical in nature and were within the capacity of agency personnel
to perform, thus, resulting in excessive workforce, duplication of work and eventual
wastage of government funds.
b) The necessity and reasonableness of hiring JOs and contractual workers of 31 LGUs could
not be validated and ascertained due to absence of well-defined system to justify the
exigency of their services. There were no written policies or guidelines on the hiring of job
order and contract of service personnel, thereby, casting doubt on the validity of
expenditures incurred therefor.
c) Four legal consultants were hired by two LGUs without the required written conformity of
the Solicitor General and the concurrence of the Commission on Audit (COA) contrary to
COA Circular No. 98-002 dated June 9, 1998, thereby, incurring irregular expenditures
totaling P595,000.00.
d) The hiring of 74 consultants in nine LGUs was not made in accordance with R.A. No. 9184,
or “The Government Procurement Reform Act”, and its Implementing Rules and
Regulations, thus, casting doubt on the propriety and regularity of the consultancy
expenses totaling P11.232 million.
 Contracts:
a) JO personnel of 20 LGUs were hired without job order contracts or Memorandum of

Agreement, contrary to Civil Service Commission (CSC) Resolution No. 06-2256 dated
December 20, 2006 as embodied in CSC Memorandum Circular No. 1 s. 2007 and COA
Circular No. 2012-001 dated June 14, 2012.
b) Contracts of employment with the JOs did not contain statements of duties and
responsibilities or specific nature/scope of works to be performed contrary to the governing
rules of the CSC and the COA, thus, the incurrence of consultancy services totaling
P95.359 million was not justified.
 Payment of Wages and Allowances:
a) Payment of wages to consultants, contractuals and JO personnel by 46 LGUs totaling

P239.233 million were not supported with complete and proper documentation in violation
to Section 4(6) of Presidential Decree (PD) 1445 (Claims against government funds shall
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be supported with complete documentation) and COA Circular No. 2012-001 dated June
14, 2012 (Prescribing the Revised Guidelines and Documentary Requirements for
Common Government Transactions).
b) Additional benefits/allowances totaling P1.321 million were paid to contractuals and JO

personnel of 11 LGUs even if they were not entitled to it. These benefits/allowances
include clothing allowance, per diems, travelling/transportation expenses, overtime pay,
personnel economic relief allowance (PERA), and mid-year and year-end bonuses.
Likewise, financial assistance in the form of Calamity Relief and Economic Assistance
(CREA) was granted to the Contract of Service workers and volunteer workers of the
barangays by two LGUs without any legal basis authorizing the receipt thereof.
c) Payment of wages to JO personnel totaling P40.189 million of two LGUs were

inappropriately charged to Salaries and Wages –Casual/Contractual account under
Personnel Services (PS), instead of Maintenance and Other Operating Expenses (MOOE),
thereby, misstating the affected accounts in the financial statements at year-end.
d) JO personnel of four LGUs were paid below the prevailing minimum wage rates for the
services they have rendered, as approved by the Regional Tripartite Wages and
Productivity Board of the Department of Labor and Employment (DOLE), thus, depriving
the JO personnel of compensation due them.
 Documentation of services:
a) There were no biometric entries in the morning OUT and in the afternoon IN of the daily
time records (DTRs) of the contractuals and JO personnel of one LGU. Likewise, entries in
their DTRs do not match to the entries in the accomplishment reports, thus, casting doubt
as to the propriety of their claims.
b) The services rendered 22 technical assistants of one LGU could not be verified due to the
absence of appropriate entries and specific information in their DTRs and accomplishment
reports as proof that the required number of hours of service have been rendered and the
expected output have been delivered, thus, the propriety and regularity for the payments of
their compensation could not be ascertained.
c) Some casuals, contractuals, and JO personnel of two LGUs did not present themselves
during the physical validation, thereby, castingt doubt on the existence and identity of the
casuals, contractuals, JOs and holders of contracts of service.
Recommendations:
 Prepare a thorough study and evaluation of the LGUs’ needs for additional
personnel to avoid excessive hiring of JOs and contractuals. Fill up vacant
plantilla positions to minimize the hiring of job orders and contract of service
workers especially those performing clerical, administrative and regular functions.
Also, ensure that the hiring of JOs and contractual personnel is based on the actual
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need of the LGUs to perform a piece of work or intermittent job of short duration in
accordance with Civil Service laws;
 Enjoin the Human Resource Management Officer to clearly define the works or
activities to be accomplished through hiring of consultants, contractuals and JO
personnel. Include the duties and responsibilities, expected outputs/deliverables,
terms of reference and time frames in the contracts to be used as bases in justifying
the need for the contracts of services;
 Formulate clear policy guidelines in hiring of JOs and contractual personnel

providing the conditions when services may be contracted, period within which the
workers will render their services, qualification standards, required documents to be
submitted by applicants and screening process;
 Require the JOs and contractual personnel to submit personal records and undergo
interview to establish their identities and qualifications;
 Stop the hiring of legal consultants without the required conformity and
concurrence of the Solicitor General and the COA, respectively, and other
consultants as additional personnel when there are regular employees capable of
rendering the same services to be required of said consultants;
 Strictly adhere to the provisions of R.A. No. 9184 on the procurement of consulting
services;
 Ensure that payments of wages and/or consulting services to

contractual/JOs/consultants are based on actual and complete services rendered
and supported with complete and proper documentation, as prescribed, to prove the
validity and propriety of the claims. Direct the hired contractuals, JOs, and
consultants to submit the duly certified DTRs and accomplishment reports to
support the claim for wages;
 Stop the practice of granting ineligible benefits/allowances to contracted personnel.

Further, secure a legal basis to warrant the giving of the CREA to aid in the
determination of the propriety and validity of the disbursements; and
 Monitor the activities and accomplishments of contracted personnel. Enforce the

fulfilment of responsibilities as provided for in their respective contracts.
I. Enforcement of COA Disallowances and Charges
Article IX-D of the 1987 Philippine Constitution grants the Commission on Audit (COA) the
power, authority, and duty to examine, audit, and settle all accounts pertaining to the
revenue/receipts and expenditures/uses of government2 funds and properties. Further, the
2 Or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a
post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b)
autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-
governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting
institution to submit to such audit as a condition of subsidy or equity.
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Constitution states that the COA has the exclusive authority to define the scope of its audit and
examination, establish the techniques and methods required therefor, and promulgate accounting
and auditing rules and regulations, including those for the prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government
funds and properties.
Pursuant to the above-mentioned provisions, the Commission issued COA Circular No.
2009-006 dated September 15, 2009 to prescribe the COA Revised Rules and Regulations on
Settlement of Accounts.
In the audit of the transaction documents and accounts, the auditor issues an audit
decision which may be in the form of a Notice of Suspension (NS), Notice of Disallowance (ND), or
Notice of Charge (NC). Unsettled NSs within the prescribed period mature into a disallowance or
charge. The auditor issues the ND or NC, as the case may be, which needs to be settled within the
prescribed period. Unsettled NDs or NCs within the prescribed period become final and executory
and the auditor issues a Notice of Finality of Decision (NFD) to inform the agency head that such
decision has become final and executory. The NFD then becomes the basis for the recognition of
the disallowance/charge in the agency’s books of accounts.
The agency head ensures the settlement of the suspensions, disallowances, and charges
within the prescribed period, while the auditor monitors the enforcement of the settlement thereof.
The auditor issues a COA Order of Execution (COE) to enforce the settlement of audit
disallowance/charge, whenever the persons liable refuse or fail to settle the same after the decision
has become final and executory.
The table below shows the LGUs’ unsettled suspensions, disallowances, and charges as at
the end of CY 2018.
# of Suspensions Disallowances Charges Total

Region
LGUs (in millions of pesos) (in millions of pesos) (in millions of pesos) (in millions of pesos)
NCR 19 1,361.595 3,201.870 44.936 4,608.401
CAR 61 178.613 550.728 8.903 738.244
BARMM 23 2.939 90.732 - 93.671
Region I 22 1,861.407 53.524 - 1,914.931
Region II 31 10.032 150.418 - 160.450
Region III 80 1,729.772 1,085.626 0.525 2,815.923
Region IV-A 2 - 68.528 7.650 76.178
Region IV-B 18 10.162 67.336 - 77.499
Region V 1 0.690 28.397 - 29.086
Region VI 1 - 23.151 - 23.151
Region VII 3 0.691 5.424 - 6.115
Region VIII 14 - 49.186 - 49.186
Region IX 4 3.668 8.662 1.369 13.699
Region XI 6 10.900 11.601 - 22.501
TOTAL 285 5,170.469 5,395.183 63.383 10,629.035
The recovery of disallowances and charges that have become final and executory
registered a low percentage despite the issuance of COA Order of Execution due to management’s
inability to enforce settlement through withholding of salaries from persons liable or deduction from
the claims/terminal leave pay of retiring employees. Also, the difficulty in locating those persons
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liable who were already separated from the service, contributes to the accumulation of the
disallowances and charges.
Audit disallowances that have become final and executory totaling P11.795 million were
not recorded in the books of accounts of seven LGUs, thus, understating the Receivables –
Disallowances/Charges account balance.
Recommendations:
 Enforce the settlement of all audit suspensions, disallowances and charges in

compliance with COA Circular No. 2009-006 dated September 15, 2009; and
 Require the recognition of the disallowances and charges that have become final
and executory in the books of accounts.
J. Compliance with Tax Laws
Section 80(A) of Republic Act (R.A.) No. 8424, or the National Internal Revenue Code
(NIRC) of 1997, provides that the employer shall be liable for the withholding and remittance of the
correct amount of tax required to be deducted and withheld from the compensation of the
employees. It is further provided therein that, if the employer fails to withhold and remit the correct
amount of tax, such tax shall be collected from the employer together with the penalties or additions
to the tax otherwise applicable in respect to such failure to withhold and remit. Section 2.81 of the
Bureau of Internal Revenue (BIR) Revenue Regulations No. 2-98 dated April 17, 1998, as
amended, requires that the taxes withheld on compensation shall be remitted on or before the 10th
day of the month following the month in which the withholding was made, to any authorized agent
bank within the Revenue District Office (RDO), or in places where there are no agent banks, to the
Revenue District Officer of the City or Municipality where the withholding agents’/employers’ legal
residence or place of business or office is located.
Likewise, the creditable and final withholding taxes deducted and withheld by the
withholding agents are required to be remitted to the authorized agent banks within the jurisdiction
of the RDO not later than the last day of the month following the close of the calendar quarter
during which the withholding was made, pursuant to R.A. No. 10963 otherwise known as the Tax
Reform for Acceleration and Inclusion (TRAIN) Act dated December 19, 2019 and BIR Revenue
Regulations No. 11-2018 dated January 31, 2018.
For CY 2018, the Auditors reported the following observations as to compliance with tax
laws and regulations by the LGUs:
a) Taxes withheld on salaries/compensation and payment to suppliers/creditors totaling

P208.759 million of 81 LGUs were not remitted to the BIR within the prescribed period. On
the other hand, one LGU incurred over-remittance to the BIR for taxes withheld on
employees’ compensation and payment to creditors amounting to P183,366.61.
b) Taxes on (i) payment for the procurement of goods; (ii) fees to consultants and
professionals; (iii) wages to job order and contractual personnel; (iv) overtime pay to
employees; (v) bonuses/allowances to officials and employees; and (vi) honoraria of the
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Bids and Awards Committee (BAC) Members, Technical Working Group and Secretariat
totaling P13.573 million were not withheld by 20 LGUs. Further, five LGUs improperly
withheld taxes on compensation of officials and employees, payment to suppliers of goods
and services, and payment for infrastructure contracts aggregating P2.312 million.
However, the Representation Allowance and Transportation Allowance (RATA) granted to
the officials of one LGU were subjected to withholding tax.
c) The accuracy and propriety of the balance of Due to BIR account totaling P20.444 million
of nine LGUs could not be ascertained due to the following reasons:
o The balance has been outstanding or dormant for more than a year as the origin
and details of the amount could not be determined;
o There were variances on the monthly remittances as against the taxes withheld;
o Documents were not submitted to show proof of remittances to the BIR and
adjusting entries were not prepared on stale checks issued to BIR; and
o The Accounting Office did not maintain subsidiary ledger to monitor and reconcile
the remittances against the taxes withheld.
Recommendations:
Require the Local Chief Executives to compel the LGU fiscal officers to:
 Strictly comply with the regulations set by the BIR as regards the withholding of
taxes and prompt remittances thereof to avoid incurrence of fines and penalties; and
 Maintain subsidiary ledgers for each supplier/creditor/employee to monitor the taxes

withheld from them and their remittance to the BIR.
K. Remittance of Mandatory GSIS, PhilHealth and Pag-IBIG Contributions and Loan

Amortizations
Section 6(a) of R.A. No. 8291 or “The Government Service Insurance System (GSIS) Act
of 1997” provides that all employers shall deduct each month from the monthly salary or
compensation of each employee the contribution payable by the employee in accordance with the
schedule prescribed therein. Further, Section 6(b) thereof provides that the employees’ and
employers’ contributions shall be directly remitted to the GSIS within the first ten days of the
calendar month following the month to which the contributions apply, and that the remittance of the
contributions to the GSIS shall take priority over and above the payment of any obligations, except
salaries and wages of the employees.
Section 17, Rule III of the IRR of R.A. No. 7875 or the “National Health Insurance Act of
2013” provides that all government agencies are required to include the payment of premium
contributions in their respective annual appropriations. Further, Section 18 thereof provides that the
premium contributions shall be divided equally between the employer and the employee. The
members’ monthly contributions shall be deducted and withheld automatically from their salary,
wage or earning, and that the employer’s counterpart shall not be charged to the employees. The
premium contributions shall be remitted to the Philippine Health Insurance Corporation (PHIC) by
the employer on or before the date prescribed by the PHIC.
496
Section 2, Rule VII of the Implementing Rules and Regulations of R.A. No. 9679, otherwise
known as the “Home Development Mutual Fund (HDMF) Law of 2009” or Pag-IBIG provides that
the monthly contributions of the members shall be collected through payroll deductions by their
respective employers. Section 3(a) thereof further provides that the contributions of the employer
and its employees, and the loan amortizations or payments, shall be remitted within 15 days from
the date the contributions/loan amortizations were collected unless another period is previously
agreed upon between the employer and the HDMF, or within such periods as the HDMF may
prescribe otherwise.
Review of the CY 2018 LGUs’ compliance with the withholding and remittance of the
mandatory GSIS, PhilHealth and Pag-IBIG contributions and loan amortizations disclosed the
following observations as reported in the AARs:
a) Premium contributions and loan amortizations withheld from the salaries of employees
totaling P146.130 million of 90 LGUs were not remitted or partially remitted to the GSIS,
PHIC and HDMF, while 23 LGUs incurred delays in the remittance of mandatory
contributions and loan amortizations totaling P42.839 million to the concerned government
financial institutions.
b) Four LGUs did not withhold from the salaries and wages of the employees the mandatory
contributions and loan amortizations totaling P1.285 million for the GSIS, PhilHealth and
Pag-IBIG resulting in the non-remittance of premiums, contributions and loan amortizations
to the GSIS, PHIC and HDMF. On the other hand, two LGUs incorrectly computed and
withheld the contributions totaling P205,776.89, resulting in the remittance of inaccurate
contributions to the concerned government financial institutions.
c) The LGUs’ share on the Pag-IBIG premium contributions totaling P4.658 million of 17
LGUs exceeded the allowable maximum share per employee resulting in the over-
remittance thereof to the HDMF.
d) The amount withheld for premium contributions and loan payments in seven LGUs were
different from the amount actually remitted to the concerned government financial
institutions resulting in a total discrepancy of P2.491 million.
e) Twenty-Two (22) LGUs failed to reconcile their records with that of the GSIS, PhilHealth
and Pag-IBIG resulting in an unreconciled amount of P7.833 million.
f) Eleven (11) LGUs reported negative balances totaling P22.504 million in their Due to
GSIS, Due to Pag-IBIG and Due to PhilHealth accounts as of December 31, 2018.
Recommendations:
Require the Local Chief Executives to enjoin the fiscal officers to:
 Remit all withheld funds due to the GSIS, PhilHealth and Pag-IBIG within the
prescribed period to avoid incurrence of interest, penalties and surcharges;
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 Observe their duty/responsibility to withhold the mandatory contributions and loan
amortizations from the salaries of the employees and remit the same to the GSIS,
PhilHealth and Pag-IBIG;
 Apply the mandatory rate for the LGUs’ share to avoid excessive payment of
monthly contributions; and
 Regularly reconcile the amounts withheld and remitted with the records of the GSIS,
PhilHealth, and Pag-IBIG in order to ascertain the accuracy and reliability of the
balances of Due to GSIS, Due to PhilHealth, and Due to Pag-IBIG accounts in the
L. Gender and Development
Republic Act (RA) No. 9710, otherwise known as the “Magna Carta of Women (MCW)” was
enacted on August 14, 2009 to eliminate discrimination against women by recognizing, respecting,
protecting, fulfilling and promoting the rights of Filipino women, especially those in the marginalized
sectors.
The MCW provides that the cost of implementing GAD programs shall be the agency’s or
the LGU’s GAD budget which shall be at least five percent (5%) of the agency’s or the LGU’s total
budget appropriation.
Pursuant to the MCW, the Philippine Commission on Women (PCW), the Department of
the Interior and Local Government (DILG), the Department of Budget and Management (DBM), and
the National Economic and Development Authority (NEDA) issued Joint Memorandum Circular
(JMC) No. 2013-01 to prescribe the policies and procedures in mainstreaming gender perspectives
in: (a) local planning, programming, and budgeting; (b) local legislation; and (c) project
development, implementation, monitoring and evaluation. The JMC aims to align efforts of LGUs
and National Government on Gender and Development with its commitments to international
pronouncements.
On January 12, 2016, PCW-DILG-DBM-NEDA JMC No. 2016-01 amended some parts of
JMC No. 2013-01 particularly Sections 4.1.C (Gender and Development Planning and Budgeting)
and 5.0 (Monitoring and Evaluating the Implementation of the Magna Carta of Women). The
issuance clarifies the process of costing, allocation and attribution of the GAD budget, and the
review, endorsement and monitoring of the GAD Plans and Budget (GPBs) and GAD
Accomplishment Reports (GAD ARs) of the LGUs.
The CY 2018 AARs showed the following audit observations on the review of the LGUs’
compliance with the GAD policies on the institutionalization, planning and budgeting:
a) Seventeen (17) LGUs allocated less than the 5% of its total budget appropriation for the
implementation of GAD related programs, projects and activities.
b) Twenty-Eight (28) LGUs failed to create and/or strengthen the GAD Focal Point System;
c) Twelve (12) LGUs did not formulate GAD Code;
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d) A total of 124 LGUs did not establish/maintain the required GAD Database;
e) Twenty-One (21) LGUs did not institutionalize a GAD Monitoring and Evaluation (M&E)
System, while five LGUs needed to improve their GAD M&E System;
f) Fifty-Three (53) LGUs did not administer the Harmonized Gender and Development
Guidelines (HGDG) tool in the design, management, implementation, evaluation and
monitoring of their GAD programs and projects, while the HGDG analysis of one LGU was
administered using inappropriate checklist and without means of verification;
g) Fifty-One (51) LGUs failed to prepare and/or submit their GPBs to the DILG for review and
endorsement while 82 LGUs failed to submit their GAD ARs. Further, the GPBs and/or
GAD ARs of 68 LGUs were not submitted to the Auditor for evaluation. Also, the DILG
overlooked to review and endorse the GPBs of five LGUs due to delayed submission
thereof.
On the other hand, audit of the implementation of the GAD plan and budget disclosed the
following observations:
a) Sixty-Six (66) LGUs allotted/utilized its GAD fund totaling P350.924 million on
projects/activities that do not clearly address gender-related issues.
b) GAD fund totaling P1,177.311 million of 121 LGUs was not utilized due to non-
implementation or partial implementation of its programs, projects and activities, thus, the
identified gender issues were not fully addressed. Inadequate planning, lack of monitoring
in the implementation, and lack of manpower to implement the GAD activities caused the
partial/non-implementation thereof.
Recommendations:
 Strictly comply with PCW-DILG-DBM-NEDA JMC Nos. 2013-01 and 2016-01.
 Ensure that the programs, projects and activities are aligned with GAD-related
undertakings so that the intended beneficiaries are assured of the services,
protection, and other assistance that the GAD provision seeks to provide.
 Fully implement the GAD programs, projects and activities identified in the GPBs in
order to recognize the fundamental equality of women and men and ensure
responsive governance.
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PART III
SUMMARY OF AUDIT
OBSERVATIONS AND
RECOMMENDATIONS
ON BARANGAYS
Summary of Audit Observations and Recommendations on Barangays
The following is the summary of audit observations and recommendations culled from the
submitted CY 2018 Annual Audit Reports on barangays:
Observations Recommendations
A. Submission of Accounts
1. Barangays numbering 1,054 were unable Enjoin the Barangay Treasurers to adhere strictly
to submit or were delayed in the to the provisions of COA Resolution No. 2008-
submission of Disbursement Vouchers, 011 dated October 10, 2008, re: Custody of all
Supporting Documents and other required financial records of the barangays and the
Reports. rendition of accounts by the barangay treasurer
and Section 3.1 of COA Circular No. 2012-005
dated December 7, 2012, regarding the timely
submission of Disbursement Vouchers and their
supporting documents, to ensure the validity and
propriety of the transactions of the Barangays.
2. Cash and Check disbursements of 301 Ensure that all disbursements are supported by
barangays were unsupported by approved disbursement vouchers.
Disbursement Vouchers (DVs) and
3. A total of 384 barangays processed The Punong Barangay should ensure the legality,
disbursements without supporting propriety and validity of transactions by complete
documents/ incomplete documentation. supporting documentation in conformity with the
provisions of Sec. 4(6) of PD 1445 which
provides that “claims against government funds
shall be supported with complete documentation.”
4. Unrecorded disbursements amounting to Require timely submission of disbursement

P87,233.37 of 36 barangays affected the vouchers with complete supporting documents
fair presentation of cash, liability and and prepare the Summary of Checks Issued
expense accounts in the financial whenever a check is issued for the barangay
statements resulting in the overstatement bookkeeper to record the disbursements and
of assets and understatement of purchases. Strict adherence to the provisions of
expenses/liabilities. Sections 114 and 121 of the Manual on New
Government Accounting System (NGAS) is
hereby enjoined.
5. Barangays totalling 651 failed to prepare Prepare the RAC and SACB in accordance with
and submit the Registry of Appropriations the prescribed policies and guidelines and submit
and Commitments (RAC) and the Status same for review and consolidation by the
of Appropriations, Commitments and Municipal Budget Officer. Require the Barangay
Balances (SACB) to the Municipal Budget Treasurer to submit the PBC and TL within ten
Officer for consolidation as of December (10) calendar days after the end of the month, in
31, 2016. The practice was contrary to compliance with Section 3.1 of COA Circular No.
the Policies and Guidelines for 2012-005 dated December 7, 2012.
Appropriations and Commitments,
Systems and Procedures Manual on the
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Management of Barangay Funds and
Property, Volumes I, II and III and Section
4 (1) of Presidential Decree No. 1445,
resulting in possible disbursements in
excess of their appropriations.
In addition, The Punong Barangay’s
Certification (PBC) and Transmittal Letter
(TL) were not submitted within ten (10)
days after the end of the month, contrary
to Commission on Audit (COA) Circular
No. 2012-005 dated December 7, 2012,
thereby increasing the risk that the
efficiency, economy and effectiveness of
barangay operations/transactions may not
be monitored properly.
6. General and Subsidiary Ledgers for the Require the City/Municipal Accountant to
accounts of 512 barangays of four regions maintain/reconcile general and subsidiary ledgers
were not maintained/not reconciled by the for all accounts of the barangay in accordance
Municipal Accountant contrary to the with the prescribed rules and regulations.
Duties and Responsibilities of the
City/Municipal Accountant in the
Accounting System Manual for Barangay,
Volume IV. Thus, the correctness of the
balances of the accounts cannot be
properly determined.
B. Cash
1. Barangay collections of 1,142 barangays Direct the Barangay Treasurers to strictly comply
amounting to P9,065,396.00 in seven with the policies and procedures provided in the
regions were not deposited promptly and Systems and Procedures Manual on the
intact with the authorized depository Management of Barangay Funds and Property on
banks. the deposit of barangay collections.
2. Cash receptacle or safe/vault was not Include in the ensuing budget, the provision for a
maintained by 132 barangays in four (4) cash safe or vault for the safekeeping of
regions for the safekeeping of collections, government funds, accountable forms; (b) require
unused accountable forms and other the Barangay Treasurer to keep all collections of
important documents thus, exposing the barangays in a cash safe or vault, properly
Barangay funds to risk of loss or theft. secured and maintained in the Barangay Hall.
3. A number of Official Receipts were not Require the barangay treasurer to issue the
issued in numerical sequence in 28 official receipt in numerical sequences to
barangays in three regions contrary to acknowledge every receipt of payment for proper
existing regulations. This created difficulty accounting of collections and recording in the
in the accounting of collections and books of accounts.
exposed the barangay collections to
misappropriation and the official receipts
to misuse and/or loss.
501
4. Cash shortages totaling ₱3,782,751.07 Require the concerned accountable officers to
were discovered in six barangays of CAR, restitute the full amount misappropriated and
Regions II, VIIII and XI during the conduct relieve them from their post.
of cash examination due to lapses in
handling cash advances, cash
receipts/collections and disbursements of
public funds.
5. The Imprest System in handling cash was Cause the adoption of imprest system in handling
not adopted in 172 barangays which was cash as provided in Section 2 of COA Circular No.
not in line with the general principles 97-002 to ensure that payments are made directly
stated in COA Circular No. 97-002 dated to the suppliers or creditors. The Punong
February 10, 1997. Also, frequent Barangay should ensure that (a) disbursements be
reimbursements and immoderate use of made directly to suppliers in the form of check to
the Petty Cash Fund revealed of weak ensure the withholding of the applicable taxes due
internal control system in handling cash the government; (b) only payments in small
which may result in possible loss or amount should be paid out of the petty cash fund to
misuse of government funds. minimize and regulate the replenishment of the
fund; (c) Petty Cash Voucher (PCV) is prepared
and duly supported with documents evidencing the
transactions for approval; and (d) the
procurement activities are properly planned in an
effective and efficient manner.
6. Bank Reconciliation Statements of 946 Punong Barangays and Accountants should

barangays in five regions were not made ensure that Bank Reconciliation Statements are
available at the time of audit in prepared to ensure timely detection of errors
accordance with the provision on requiring adjustments.
Accounting Policies on Receipts and
Deposits, Vol. IV of Systems and
Procedures Manual on Management of
Barangay Funds, Section 3.2 of COA
Circular No. 96-011 and Section 74 of
P.D. 1445.
7. Unbooked items for adjustments were Direct the Accountant to effect the necessary
noted in the Bank Reconciliation adjustments in the books of accounts to present
Statements of 343 barangays in 10 fairly the balances of the cash accounts in the
regions resulting in unreliable balance of financial statements.
the Cash in Banks accounts contrary to
Section 74 of PD 1445 and Section 3 of
COA Circular No. 96-011.
8. The monthly Report of Accountability for Require the Barangay Treasurers to regularly
Accountable Forms (RAAF) of 288 prepare and submit RAAF and update their
barangays were not prepared and Cashbooks/Cash Registries regularly in
submitted as required in Volumes I and accordance with the provisions on the Reporting
III of the Systems and Procedures Manual Procedures in the Systems and Procedures
on the Management of Barangay Funds Manual on the Management of Barangay Funds
502
and Property; thus, actual accountability and Property, Volume III. The Punong Barangay
could not be immediately ascertained as should demand for the settlement of
of a given period. Lack of updated accountabilities by the former barangay officials
barangay Cashbooks/Cash Registries and an invoice receipt covering a detailed listing
was likewise observed. Proper turnover of of their accountabilities as of the date of the
money and property accountabilities was transfer in addition to the Property
not made by the outgoing to the incoming Acknowledgement Receipt and the RAAF.
barangay officials contrary to the basic
policy in the management of barangay The outgoing barangay officials should likewise
funds and properties. seek clearances from money and property
accountabilities using the prescribed form
Transfer of Money and Property Accountability
(TMPA). In addition, the incumbent barangay
officials shall not effect the payment on the last
claim for honoraria in the absence of the TMPA
as supporting documents thereto.
9. Long outstanding Dormant Accounts Exert all efforts to locate the records/documents
noted in 36 barangays in two regions. supporting the dormant accounts for
analysis/review of accounts
10. Paid vouchers, payrolls and supporting Ensure that all paid vouchers and their supporting
documents of 381 barangays from two documents are stamped/marked “PAID” after
regions were not stamped "PAID" as payment or upon release of the check to avoid
prescribed under Item 2-Q of the COA risk of double payment of the same transaction.
Circular No. 92-389 dated November 3,
1992.
C. Cash Advances
1. Cash Advances amounting to Punong Barangays should direct the immediate
P35,684,764.74 for 666 barangays in nine and full settlement of existing cash advances.
regions remained unliquidated as of year- Concerned barangay officials should strictly
end. Additional cash advances were observe the guidelines on the granting and
granted to officers and employees despite liquidation of cash advances as provided for
non-settlement of previous cash under COA Circular No. 97-002 dated
advances, in violation of Sections 4.1.2 February 10, 1997. The immediate liquidation
and 5.1 of COA Circular No. 97-002 dated and settlement of all cash advances as of
February 10, 1997. December 31, 2011 should be demanded
pursuant to COA Circular No.2012-004 dated
November 28. 2012.
2. Accountable officers of 501 barangays Secure all barangay accountable officers with
from twelve regions were not covered or adequate fidelity bond equivalent to the maximum
have inadequate fidelity bond coverage. accountability in order to safeguard the
barangay’s assets in case of loss through theft,
misappropriation and other loss due to fortuitous
events. Appropriate funds to cover the payment
of premiums on the renewal of the fidelity bonds.
503
D. Receivables
1. Prior years’ audit disallowances of 48 Direct the Barangay Bookkeeper to record in the
barangays from four regions remained books the total disallowed amount. Enforce
unsettled and unrecorded in the books of settlement of the audit disallowances of payees
accounts. or persons identified to be liable who are still in
service with the barangay.
E. Procurement
1. Procurements were made by 213 Prepare and comply with the Annual Procurement
barangays insix regions without the Plan for the effective management of its
approved Annual Procurement Plan procurement requirement to avoid unnecessary
(APP) contrary to Article 431, Rule XXXV purchases and wastage of government funds.
of the Implementing Rules and
Regulations (IRR) of Republic Act (RA)
7160 and Section 7 of RA 9184.
2. Supplies requirements of 367 barangays The Punong Barangay should enforce DBM
inseven regions were not purchased from Circular and Administrative Order on the
the Procurement Service (PS), procurement of commonly used supplies and
Department of Budget and Management equipment from the PS-DBM.
(DBM), contrary to Section 53.5 of the
IRR of RA 9184 and Administrative Order
No. 17 dated July 28, 2011.
3. There were 389 barangays infive regions Punong Barangays should create the BAC
without Bids and Awards Committee pursuant to Republic Act 9184 and its
(BAC) responsible for the procurement Implementing Rules and Regulations and GPPB
activities of the Barangays. Sixty-one Circular No. 03-2013 dated April 26, 2013 to be
barangays with BAC were found deficient responsible of all procurement activities in the
on their duties and functions as regard barangay.
procurement deficiencies on eligibility
requirements/technical documents in
violation of the Revised IRR of RA 9184.
4. Procurement of goods/services of 331 Adhere strictly to the provisions of R.A. 9184 in

barangays in 5 regions were made thru the procurement of goods and services. Procure
selective/shopping/canvass instead of supplies in bulk through competitive public
public bidding in violation of Section 10, bidding. Procurement through alternative
Rule IV of the IRR of Republic Act (R.A.) methods of procurement may be resorted to only
9184. There were purchases paid thru upon compliance with the required conditions set
reimbursements while some under Sections 48-54 of the Revised
procurements were made through small Implementing Rules and Regulations (R-IRR) of
value procurement/split in disregard of the R.A. 9184.
principles of transparency,
competitiveness and efficiency espoused
by R.A. 9184. As such, there was no
assurance that the items were procured at
prices most advantageous to the
government in violation of Section 54.1 of
504
the R-IRR of R. A. 9184. Likewise, some
procurement of supplies and equipment
indicated the brand name of the item in
violation to Section 18 of R.A. 9184.
F. Inventories, and Property, Plant and

Equipment
1. Two thousand six hundred thirty-eight Conduct physical count of all barangay property
barangays in seven regions were unable to establish their existence and condition and
to conduct physical count of Inventories, facilitate proper financial statement classification
and Property, Plant and Equipment (PPE) in compliance with the provisions of the Systems
at year-end and no Report on the and Procedures Manual on the Management of
Physical Count of Property, Plant and Barangay Fund and Property, Volume III.
Equipment (RPCPPE) were submitted.
2. The PPE accounts in 1,480 barangays in Ensure that Barangay Bookkeepers maintain
five regions were not reconciled against subsidiary ledgers and reconcile property, plant
the Report on the Physical Count of and equipment balance with the physical
Property, Plant and Equipment inventory reports. Identify the causes of the
(RPCPPE). discrepancies so that the necessary adjustments
in the books could be made.
3. Depreciation Expenses and Allowance for Require the Accountants to provide depreciation
Depreciation for PPE accounts were not expenses and allowance for depreciation for all
provided by 341 barangays from six the PPE accounts of the barangays for the proper
regions. recognition of the depreciation expense and a fair
presentation of the book values of PPEs in
compliance with prescribed policies and
guidelines under the Accounting System Manual
for Barangay, Volume IV.
4. Property Acknowledgement Receipt Require the Property Officers to issue PAR to all
(PAR) and PPE Registers were not officers and employees who were issued
prepared by 46 barangays in two regions, government properties for control purposes. PPE
while those with PAR and PPE Registers, Registers should be maintained for control and
records were not updated. monitoring purposes. These registers should be
reconciled regularly with the recorded PPE in the
books of accounts so that any difference can be
promptly resolved.
5. Costs of land/lots in 14 barangays were Management should exhaust all possible means
not recorded or taken up in the books of to document the ownership of the land/lots
accounts in view of the lack of documents through Transfer Certificate of Title in the name of
supporting ownership thereof. the Barangay in coordination with the Municipal
Assessor. In recording, land/lots acquired thru
purchase or donation should be recorded at cost
including incidental expenses in order to present
it fairly in the financial statements.
505
6. Various properties with insurable risk of Insure all the Barangay insurable properties
114 barangays in four regions were not pursuant to the provisions of R.A. 656 and on the
insured with the Property Insurance Fund basic policies and procedures of the System &
of the GSIS which is not in line with the Procedures Manual on the Management of
provisions of R.A. 656 otherwise known Barangay Funds and Property.
as the “Property Insurance Law” and Item
No. 6.
7. Obsolete and unserviceable properties of Instruct the Accountant to reclassify the cost of
105 barangays inthree regions have not unserviceable asset to the Other Asset account in
been disposed of and still included in the accordance with NGAS. Consider the immediate
Physical Inventory report. disposal of unserviceable properties.
8. Barangays in numbering to 101 in three Adopt the perpetual inventory system in the
regions did not adopt the perpetual inventory valuation and effect the necessary
inventory method in the inventory adjustments in order to present fairly and
valuation of Other Supplies Inventory. accurately the Other Supplies Inventory account
in the financial statements.
G. Payables
1. Long outstanding payables of seven Effect the adjustments of the accounts pursuant
barangays have not yet been reverted to to the guidelines on the handling of accounts
Unappropriated Surplus account. payable and require the Accountant to revert
certain accounts payable with no actual claim
filed, administrative or judicial and which are not
covered by perfected contracts on record.
H. Remittance to other Government Entities

1. Three Hundred Sixty-Five barangays Direct the Barangay Treasurers to remit, in full,
were unable to remit the taxes withheld to taxes withheld within the prescribed period to BIR
the BIR. Likewise, three hundred fifty- to avoid incurrence of penalty charges.
seven barangays were delayed in the
remittance of the same to the BIR. There
were instances of failure to withhold VAT
in violation of BIR Regulation
Memorandum Circular No. 23-2007 dated
March 20, 2007.
I. Fund Transfers
1. Due from Other LGUs account of 168 Make representations to the Municipal Mayor and
barangays in seven regions remained Municipal Treasurer for the early release of the
unremitted to the barangay, thus RPT shares and municipal aid to the barangay, to
depriving the barangay of the additional provide additional resources to finance its
resources needed for its operation. operation.
2. Funds of 65 barangays which were Exert effort in locating the documents and look for
transferred from other local government the details of the aforesaid balance. Verify the
units and recorded as receivables in the real status of the projects/activities funded by
account Due from/Due to Other LGUs these funds. Prepare Statement of Liquidations
506
were carried over in the book of accounts for proper reporting and accounting of the funds
of the Barangay despite being inactive or utilized and return any unutilized amount
non-moving for more than three to ten pursuant to COA Circular No. 94-013.
years contrary to COA Circular No. 2016-
005 dated December 19, 2016. No
actions have been taken by concerned
barangay officials to monitor the status of
implementation of programs and projects
funded.
J. Development Funds
1. The 20% Development Fund of Utilize fully the 20% Development Fund in
1,643barangays fin nine regions were not accordance with the purpose as mandated by the
fully utilized in accordance with Section DILG-DBM Joint Memorandum Circular No.
287 of the Local Government Code (RA 2011-1 dated April 13, 2011.
7160) and DILG-DBM Joint Memorandum
Circular No. 2011-1, dated April 13, 2011.
K. Gender and Development (GAD)

1. Failure of 822 barangays in nine regions Formulate the GAD Plan which contain projects
to appropriate funds or to appropriate and activities on gender issues that may be
funds equivalent to the minimum five embedded in regular projects of the LGUs in
percent (5%) of their local annual accordance with PCW-DILG-NEDA-DBM Joint
appropriations and to create a GAD Focal Circular No. 2013-01.
Point resulted to non-implementation of
programs designed to address the gender
issues for women empowerment and
gender equality. Gender and
Development (GAD) Plan, Program and
Budget (GPB) and Accomplishment
Report (AR) were not prepared and
submitted to DILG contrary to JMC No.
2013-01 of the PCW-DILG-DBM-NEDA
thus, depriving the targeted beneficiaries
of the opportunity to avail of the benefits
derived therefrom.
2. There were 590 barangays in nine Utilize completely the 5% budget allocation for
regions which failed to implement GAD.
projects/did not fully utilize the 5%
allocation for GAD resulting in the non-
attainment of the GAD objectives as
provided under Executive Order 273 and
Republic Act 7192, thus, depriving the
men and women of the Barangay of the
benefits that maybe derived from the
projects.
507
L. LDRRMF Investment Plan
1. There were 333 barangays in eight Comply with COA Circular No. 2012-002 dated
regions which did not prepare the annual September 12, 2012 and prepare the annual
Local Disaster Risk Reduction LDRRMF Investment Plan, submit quarterly
Management Fund (LDRRMF) Investment report on the utilization of LDRRMF.
Plan for CY 2016. There were also Furthermore, follow the accounting and reporting
instances of low utilization of the fund. guidelines particularly in the creation of a
Non-accrual to a special trust fund separate special trust fund bank account for the
depository account for the unexpended unexpended balance in the preceding years as
amount of LDRRMF of the Barangay may well as the retention of the back-up fund for
endanger or jeopardize the purpose for LDRRMF allocation in the General Fund.
which the fund was appropriated.
2. There were 682 barangays infour regions Comply with the regulations in accordance with
that utilized the 2016 appropriation for Section 21, Par. 1, of Republic Act 10121 and
calamity fund for MOOE expenses not follow the guidelines in the Joint Memorandum
related to disaster risk management Circular No. 2013-1 of NDRRMC-DBM-DILG.
activities which is in violation to Section
21 of R.A. 10121; Sections 6.3, 6.4 and
6.5 of Joint Memorandum Circular No.
2013-1 of NDRRMC-DBM-DILG, thus, no
stand-by fund available for relief and
recovery programs in case of calamity.
3. The amount and details of unexpended Fully disclose in the Notes to Financial
LDRRMF required under COA Circular Statements for proper information. Strictly follow
2012-002 dated September 12, 2012 was the provisions of Sections 5.1.1 to 5.1.5 of COA
not disclosed in the Notes to Financial Circular No. 2012-002 dated September 12,
Statements of 385 barangays in four 2012 for the preparation/submission of required
regions. Said barangays also failed to report on LDRRMFIP and Report on Sources and
submit the Monthly Report on Sources Utilization of DRRMF to enhance proper
and Utilization of the Fund. accounting and reporting of calamity fund for
transparency and accountability.
M. Fund for Senior Citizens and Differently-

Abled
1. Six barangays failed to appropriate 1% of Comply with the existing laws, rules and
their budget for programs and projects regulations on affairs of senior citizens and
related to Senior Citizens and Differently- differently-abled persons to ensure that the plans,
Abled. Furthermore, they did not prepare programs, projects and activities are aligned to
a work and financial plan that will be used address their intended purpose.
as guide in the utilization of the fund.
N. Local Council for the Protection of

Children
1. The 704 barangays in seven regions did Establish a Barangay Council for the Protection of
not allocate one percent (1%) of their Children (BCPC) effective CY 2016, endeavor to
Internal Revenue Allotment for juvenile learn the proper usage of the fund and implement
justice and welfare contrary to Section 15 the appropriate programs, projects and activities
508
of Republic Act No. 9344.Appropriations. which may be funded thereby.
If there were allocations, these fell below
the required amount allocated for
programs and projects of the Local
Council for the Protection of Children.
Funds were utilized for programs &
projects not related thereto or were left
unutilized, thus, depriving the children and
the youth of the benefits which can be
derived from the programs allowed in the
same Act.
O. Environmental Compliance
1. No funds or no budget were appropriated Develop programs and provide the required funds
and no Materials Recovery Facility was to address environmental protection and waste
established by the 359 barangays from management and establish a Materials Recovery
six regions for Ecological Solid Waste Facility as required under Section 32 of R.A. No.
Management Program which is not in 9003.
accordance with Section 32 of Republic
Act No. 9003, thus, no projects were
implemented addressing environmental
protection and waste management.
2. The National Greening Program was not Punong Barangay should (a) spearhead the
implemented by 110 barangays in five implementation of the NGP program where all
regions as no accomplishment was personnel, including Barangay Officials will plant
reported contrary to Executive Order at least ten seedlings annually over the remaining
No.26 dated February 24, 2011 and the years of the six-year period which started in CY
National Greening Program (NGP). 2011; (b) comply with the provisions of E.O. No.
26 by formulating guidelines regarding the
implementation of the NGP for dissemination to
all departments concerned and furnish the NGP
Oversight Committee with a copy thereof as
required under Section 6 of the said E.O.; and (c)
institutionalize the NGP by converging into the
Local Greening Program the setting of
quantifiable plans and target vis-à-vis the budget
in the implementation of mandated
responsibilities of the LGU pursuant to Section
5.6 of EO No. 26.
P. Revenues
1. Revenue powers as provided under the Barangay officials should exercise their revenue
Local Government Code of 1991 to raising powers as provided for under the Local
generate additional income was not fully Government Code of 1991 to generate additional
exercised by 744 barangays six regions. income and augment their share of Internal
Revenue Allotment and Real Property Tax to fast
track the delivery of basic services to its
constituents.
509
Q. Expenditures
1. Failure to monitor expenditures against Monitor strictly the incurrence of expenditures to
appropriations by 792 barangays from five the Registry of Appropriations and Commitments
regions led to incurrence of excess (RAC) should be maintained by Fund (General,
expenditures over appropriations cash 20% Development, Calamity, SK, where
overdrafts contrary to Section 305.a of applicable and GAD), by class (PS, MOOE, FE
R.A. 7160 and pertinent policies and and CO) with breakdown as to account
procedures of Barangay Accounting classification for monitoring of the approved
Manual. appropriations and the corresponding utilization.
2. There were 371 barangays in 12 regions Direct the persons responsible to restitute,
that did not adhere to the guidelines on restore and settle immediately the excess amount
the grant of Productivity Enhancement granted as PEI.
Incentive (PEI) resulting to excessive
disbursement of funds.
3. The appropriation and actual expenses The Barangays should observe the general
for personal services of 94 barangays limitations on personal services cited under
exceeded the 55% limitation as set in Section 331(b) of RA 7160 and Local Budget
Section 331 (b) of Republic Act 7160 and Circular No. 98 to ensure that adequate funds are
Local Budget Circular No. 98 dated allocated for the delivery of basic services and
October 14, 2011. development projects.
4. Unauthorized/illegal expenditures were Punong barangays should enforce the Notices of

incurred by 245 barangays in four Disallowance issued and exercise prudence in
regions. the disbursement of funds.
5. Honoraria were paid to officials of 174 Support payments of honoraria with duly
barangays even in the absence of approved budget/appropriation together with the
supporting documents such as the minutes of meetings of the Sangguniang
minutes of meetings of the Sanggunian Barangay approving the budget.
Barangay (SB) duly approved by the
members of the SB and Barangay Honoraria should be paid only after rendition of
Secretary. Cash advances for honoraria actual service.
of barangay officials were granted and
disbursed prior to the rendition of actual
services or without proof of actual service
rendered, contrary to Section 88 of PD
1445 and Section 338 of RA 7160.
6. Barangay fiesta related expenses and Direct the concerned official to prepare and submit
barangay contributions for municipal the consolidated report of expenses during 2016
fiesta of 54 barangays were made on fiesta celebrations based on the 2015 expenses
reimbursement basis in the name of and limit payment for reimbursement only for
various barangay/municipal officials. As emergency cases. Strictly adhere to the guidelines
such the corresponding value added prescribed by the above cited laws and
taxes (VAT) or other percentage taxes regulations.
were not withheld and remitted as
prescribed under Revenue Memorandum
510
Circular No. 2-98 dated April 17, 1998 as
amended by Revenue Memorandum
Circular No. 5-2006 dated November 5,
2005 issued by the Bureau of Internal
Revenue. Payments for various expenses
intended for barangay fiesta celebration
for CY 2016 were contrary to the
provisions of Section 335 of Republic Act
No. 7160, Section 33 of Presidential
Decree No. 1445 and Section 3.0 and 4.0
of COA Circular No. 2012-003 dated
October 29, 2012, thus depriving the
constituents of social services derived
from the funds received.
7. Prior years’ expenditures of 192 Ensure that expenditures in a given year are
barangays were charged against current obligated and funded in that particular year.
year’s appropriation contrary to Sections Ensure that cash is available before obligations
305 and 350 of the Local Government are incurred so as to comply with the modified
Code of 1991 thus, overstating the current accrual basis of accounting for complete reporting
year expenditures and depleting the of all financial transactions. Obligate all valid
current year MOOE funds. claims not paid during the year for fair
511
PART IV
STATUS OF
IMPLEMENTATION
OF PRIOR YEARS’ AUDIT
RECOMMENDATIONS
ON PROVINCES, CITIES
AND MUNICIPALITIES
Status of Implementation of Prior Years’ Audit Recommendations
on Provinces, Cities and Municipalities
Calendar Year 2018
No. of Audit Fully Partially Not

Province/City/Municipality
Recommendations Implemented Implemented Implemented
National Capital Region

Cities:
1 Caloocan 52 29 20 3
2 Las Piñas 47 28 16 3
3 Makati 23 16 4 3
4 Malabon 77 24 39 14
5 Mandaluyong 134 26 87 21
6 Manila 104 29 37 38
7 Marikina 56 23 23 10
8 Muntinlupa 366 172 130 64
9 Navotas 50 36 8 6
10 Parañaque 33 20 10 3
11 Pasay 195 47 95 53
12 Pasig 77 29 34 14
13 Quezon 242 162 49 31
14 San Juan 74 34 12 28
15 Taguig 81 60 20 1
16 Valenzuela 52 26 23 3
Sub-total 1,663 761 607 295
Municipality:
1 Pateros 48 33 11 4
Component Units:
1 Pamantasan ng Lungsod ng Maynila 20 14 6 0
2 Quezon General Hospital 28 14 13 1
Sub-total 48 28 19 1
Total National Capital Region 1,759 822 637 300
Cordillera Administrative Region
Provinces:
1 Abra
2 Apayao 26 13 4 9
3 Benguet 79 34 33 12
4 Ifugao 83 19 49 15
5 Kalinga 49 19 18 12
6 Mountain Province 34 18 12 4
Sub-total 271 103 116 52
Cities:
1 Baguio 72 28 32 12
2 Tabuk 23 9 6 8
Sub-total 95 37 38 20
Municipalities:
1 Municipalities of Abra 305 85 114 106
2 Municipalities of Apayao 196 70 85 41
3 Municipalities of Benguet 500 209 155 136
4 Municipalities of Ifugao 413 144 103 166
5 Municipalities of Kalinga 183 78 65 40
6 Municipalities of Mountain Province 143 78 33 32
Sub-total 1,740 664 555 521
Total Cordillera Administrative Region 2,106 804 709 593
512
Calendar Year 2018

Region I
Provinces:
1 Ilocos Norte 37 24 10 3
2 Ilocos Sur 33 5 14 14
3 La Union 9 3 6 0
4 La Union Medical Center 4 2 2 0
5 Pangasinan 10 3 4 3
Sub-total 93 37 36 20
Cities:
1 Alaminos 22 8 2 12
2 Batac 58 23 3 32
3 Candon 28 9 18 1
4 Dagupan 19 9 6 4
5 Laoag 44 10 23 11
6 San Carlos 12 4 8 0
7 San Fernando 11 5 1 5
8 Vigan 20 14 4 2
9 Urdaneta 18 7 6 5
Sub-total 232 89 71 72
Municipalities:
1 Municipalities of Ilocos Norte 588 242 195 151
2 Municipalities of Ilocos Sur 458 130 138 190
3 Municipalities of La Union 323 115 123 85
4 Municipalities of Pangasinan 757 304 189 264
Sub-total 2,126 791 645 690
Total Region I 2,451 917 752 782
Region II
Provinces:
1 Batanes 17 4 5 8
2 Cagayan 33 8 17 8
3 Isabela 22 16 6 0
4 Nueva Vizcaya 54 27 22 5
5 Quirino 9 5 4 0
Sub-total 135 60 54 21
Cities:
1 Tuguegarao 32 16 11 5
2 Ilagan 14 11 3 0
3 Cauayan 9 5 2 2
4 Santiago 13 2 2 9
Sub-total 68 34 18 16
Municipalities:
1 Municipalities of Batanes 94 35 36 23
2 Municipalities of Cagayan 466 194 138 134
3 Municipalities of Isabela 633 252 240 141
4 Municipalities of Nueva Vizcaya 359 143 111 105
5 Municipalities of Quirino 122 46 45 31
Sub-total 1,674 670 570 434
Total Region II 1,877 764 642 471
513
Calendar Year 2018

Region III
Provinces:
1 Aurora 32 8 10 14
2 Bataan 51 15 16 20
3 Bulacan 62 35 12 15
4 Nueva Ecija 40 15 22 3
5 Pampanga 74 24 35 15
6 Tarlac 177 133 35 9
7 Zambales 65 15 14 36
Sub-total 501 245 144 112
Cities:
1 Angeles 89 48 30 11
2 Balanga 17 7 8 2
3 Cabanatuan 73 35 19 19
4 Gapan 26 4 4 18
5 Mabalacat 71 18 13 40
6 Malolos 68 44 3 21
7 Meycauayan 63 31 8 24
8 Olongapo 92 21 25 46
9 Palayan 54 18 19 17
10 San Fernando 57 35 6 16
11 San Jose 32 16 15 1
12 San Jose del Monte 27 22 1 4
13 Science of Muñoz 43 30 12 1
14 Tarlac 94 69 10 15
Sub-total 806 398 173 235
Municipalities:
1 Municipalities of Aurora 229 97 67 65
2 Municipalities of Bataan 413 117 148 148
3 Municipalities of Bulacan 571 296 136 139
4 Municipalities of Nueva Ecija 802 342 226 234
5 Municipalities of Pampanga 999 489 237 273
6 Municipalities of Tarlac 450 168 152 130
7 Municipalities of Zambales 569 144 185 240
Sub-total 4,033 1,653 1,151 1,229
Total Region III 5,340 2,296 1,468 1,576
Region IV-A
Provinces:
1 Batangas 45 26 12 7
2 Cavite 15 6 6 3
3 Laguna 39 21 17 1
4 Rizal 41 19 13 9
5 Quezon 17 7 8 2
Sub-total 157 79 56 22
Cities:
1 Antipolo 38 12 19 7
2 Bacoor 27 15 5 7
3 Batangas 31 15 11 5
4 Biñan 43 14 15 14
514
Calendar Year 2018

5 Cabuyao 40 14 22 4
6 Calamba 22 14 8 0
7 Cavite 25 18 2 5
8 Dasmariñas 36 22 9 5
9 Gen. Trias 25 9 7 9
10 Imus 24 9 12 3
11 Lipa 60 35 13 12
12 Lucena 18 12 4 2
13 San Pablo 33 20 7 6
14 San Pedro 39 16 19 4
15 Santa Rosa 56 26 17 13
16 Tagaytay 14 11 2 1
17 Tanauan 25 18 3 4
18 Tayabas 17 2 3 12
19 Trece Martires 24 11 9 4
Sub-total 597 293 187 117
Municipalities:
1 Municipalities of Batangas 1,333 535 410 388
2 Municipalities of Cavite 312 162 74 76
3 Municipalities of Laguna 538 231 162 145
4 Municipalities of Quezon 737 268 230 239
5 Municipalities of Rizal 395 119 158 118
Sub-total 3,315 1,315 1,034 966
Total Region IV-A 4,069 1,687 1,277 1,105
Region IV-B
Provinces:
1 Marinduque 55 29 18 8
2 Occidental Mindoro 11 4 7 0
3 Oriental Mindoro 46 11 30 5
4 Palawan 18 7 9 2
5 Romblon 18 3 11 4
Sub-total 148 54 75 19
Cities:
1 Calapan 34 13 12 9
2 Puerto Princesa 31 9 7 15
Sub-total 65 22 19 24
Municipalities:
1 Municipalities of Romblon 318 53 148 117
2 Municipalities of Marinduque 250 102 65 83
3 Municipalities of Oriental Mindoro 592 147 307 138
4 Municipalities of Palawan 435 58 112 265
5 Municipalities of Occidental Mindoro 154 33 100 21
Sub-total 1,749 393 732 624
Total Region IV-B 1,962 469 826 667
Region V
Provinces:
1 Albay 153 120 32 1
2 Camarines Norte 77 58 14 5
515
Calendar Year 2018

3 Camarines Sur 58 3 49 6
4 Catanduanes 55 18 33 4
5 Masbate 36 20 14 2
6 Sorsogon 82 38 40 4
Sub-total 461 257 182 22
Cities:
1 Iriga 47 16 23 8
2 Legazpi 50 46 4 0
3 Ligao 70 24 35 11
4 Masbate 41 9 32 0
5 Naga 46 20 25 1
6 Sorsogon 49 15 21 13
7 Tabaco 92 33 50 9
Sub-total 395 163 190 42
Municipalities:
1 Municipalities of Albay 845 323 313 209
2 Municipalities of Camarines Norte 789 193 228 368
3 Municipalities of Camarines Sur 637 171 237 229
4 Municipalities of Catanduanes 374 135 118 121
5 Municipalities of Masbate 442 102 226 114
6 Municipalities of Sorsogon 674 246 284 144
Sub-total 3,761 1,170 1,406 1,185
Total Region V 4,617 1,590 1,778 1,249
Region VI
Provinces:
1 Aklan 63 24 33 6
2 Antique 98 44 50 4
3 Capiz 18 11 4 3
4 Guimaras 36 12 16 8
5 Iloilo 186 34 60 92
Sub-total 401 125 163 113
Cities:
1 Roxas 48 16 21 11
2 Iloilo 76 27 33 16
3 Passi 171 53 49 69
Sub-total 295 96 103 96
Municipalities:
1 Municipalities of Aklan 375 110 131 134
2 Municipalities of Antique 516 159 215 142
3 Municipalities of Capiz 362 192 93 77
4 Municipalities of Guimaras 138 61 57 20
5 Municipalities of Iloilo 2,430 530 1,006 894
Sub-total 3,821 1,052 1,502 1,267
Total Region VI 4,517 1,273 1,768 1,476
Region VII
Provinces:
1 Cebu 52 17 26 9
2 Bohol 39 11 11 17
Sub-total 91 28 37 26
516
Calendar Year 2018

Cities:
1 Bogo 32 16 8 8
2 Carcar 60 19 23 18
3 Cebu 58 35 15 8
4 Danao 19 9 7 3
5 Lapu-Lapu 55 45 5 5
6 Mandaue 67 47 5 15
7 Naga 30 21 8 1
8 Tagbilaran 85 37 38 10
9 Talisay 63 38 6 19
10 Toledo 69 14 40 15
Sub-total 538 281 155 102
Municipalities:
1 Municipalities of Cebu 1,152 368 289 495
2 Municipalities of Bohol 1,093 392 408 293
Sub-total 2,245 760 697 788
Total Region VII 2,874 1,069 889 916
Region VIII
Provinces:
1 Biliran 27 17 10 0
2 Eastern Samar 69 39 14 16
3 Leyte 50 11 31 8
4 Northern Samar 28 8 19 1
5 Samar 55 29 17 9
6 Southern Leyte 54 14 38 2
Sub-total 283 118 129 36
Cities:
1 Borongan 58 30 25 3
2 Catbalogan 19 8 11 0
3 Calbayog 48 17 30 1
4 Tacloban 30 8 8 14
5 Ormoc 72 31 16 25
6 Baybay 36 25 8 3
7 Maasin 19 11 8 0
Sub-total 282 130 106 46
Municipalities:
1 Municipalities of Eastern Samar 345 152 133 60
2 Municipalities of Leyte 1,676 616 566 494
3 Municipalities of Biliran 314 159 101 54
4 Municipalities of Northern Samar 655 210 297 148
5 Municipalities of Samar 924 309 317 298
6 Municipalities of Southern Leyte 446 173 184 89
Sub-total 4,360 1,619 1,598 1,143
Total Region VIII 4,925 1,867 1,833 1,225
Region IX
Provinces:
1 Zamboang del Norte 27 19 8 0
2 Zamboanga del Sur 68 19 42 7
3 Zamboanga Sibugay 20 8 12 0
Sub-total 115 46 62 7
517
Calendar Year 2018

Cities:
1 Dapitan 28 14 13 1
2 Dipolog 69 23 32 14
3 Pagadian 30 15 13 2
4 Zamboanga 143 47 73 23
Sub-total 270 99 131 40
Municipalities:
1 Municipalities of Zamboanga del Norte 590 263 224 103
2 Municipalities of Zamboanga del Sur 718 289 228 201
3 Municipalities of Zamboanga Sibugay 512 191 165 156
Sub-total 1,820 743 617 460
Total Region IX 2,205 888 810 507
Region X
Provinces:
1 Bukidnon 13 9 4
2 Camiguin 27 4 17 6
3 Lanao del Norte 17 8 5 4
4 Misamis Occidental 40 24 8 8
5 Misamis Oriental 47 6 14 27
Sub-total 144 51 48 45
Cities:
1 Cagayan de Oro 30 12 18
2 El Salvador 8 4 4
3 Gingoog 15 3 5 7
4 Malaybalay 16 3 8 5
5 Valencia 26 16 9 1
6 Iligan 69 21 28 20
7 Oroquieta 13 3 8 2
8 Ozamiz 29 19 9 1
9 Tangub 49 31 14 4
Sub-total 255 112 103 40
Municipalities:
1 Municipalities of Bukidnon 321 143 123 55
2 Municipalities of Camiguin 65 30 15 20
3 Municipalities of Lanao del Norte 364 98 141 125
4 Municipalities of Misamis Occidental 171 53 82 36
5 Municipalities of Misamis Oriental 471 206 183 82
Sub-total 1,392 530 544 318
Total Region X 1,791 693 695 403
Region XI
Provinces:
1 Compostela Valley 40 33 3 4
2 Davao del Norte 37 15 22 0
3 Davao del Sur 123 71 46 6
4 Davao Oriental 99 43 23 33
5 Davao Occidental 20 18 2 0
Sub-total 319 180 96 43
518
Calendar Year 2018

Cities:
1 Tagum 96 32 39 25
2 Panabo 112 85 20 7
3 Island Garden of Samal 110 75 23 12
4 Digos 119 67 21 31
5 Mati 80 26 37 17
6 Davao 42 28 12 2
Sub-total 559 313 152 94
Municipalities:
1 Municipalities of Compostela Valley 363 192 129 42
2 Municipalities of Davao del Norte 409 185 82 142
3 Municipalities of Davao del Sur 333 229 67 37
4 Municipalities of Davao Oriental 922 315 246 361
5 Municipalities of Davao Occidental 385 166 106 113
Sub-total 2,412 1,087 630 695
Total Region XI 3,290 1,580 878 832
Region XII
Provinces:
1 North Cotabato 8 2 6
2 Sarangani 127 29 56 42
3 South Cotabato 31 11 20 0
4 Sultan Kudarat 42 17 25 0
Sub-total 208 59 107 42
Cities:
1 Kidapawan 6 5 1 0
2 Cotabato 35 16 17 2
3 Tacurong 26 26 0 0
4 Koronadal 40 6 30 4
5 General Santos 135 44 73 18
Sub-total 242 97 121 24
Municipalities:
1 Municipalities of North Cotabato 175 43 106 26
2 Municipalities of Sultan Kudarat 237 83 101 53
3 Municipalities of South Cotabato 423 171 196 56
4 Municipalities of Sarangani 232 83 83 66
Sub-total 1,067 380 486 201
Total Region XII 1,517 536 714 267
Region XIII
Provinces:
1 Agusan Del Norte 23 14 7 2
2 Agusan Del Sur 22 7 15 0
3 Dinagat Islands 19 13 6 0
4 Surigao Del Norte 35 8 19 8
5 Surigao Del Sur 28 14 9 5
Sub-total 127 56 56 15
Cities:
1 Bayugan 15 5 7 3
2 Bislig 33 9 21 3
3 Butuan 57 32 21 4
519
Calendar Year 2018

4 Cabadbaran 24 6 18 0
5 Surigao 60 8 43 9
6 Tandag 19 16 2 1
Sub-total 208 76 112 20
Municipalities:
1 Municipalities of Agusan del Norte 134 45 60 29
2 Municipalities of Agusan del Sur 243 81 104 58
3 Municipalities of Dinagat Islands 131 45 52 34
4 Municipalities of Surigao del Norte 823 267 383 173
5 Municipalities of Surigao del Sur 363 152 135 76
Sub-total 1,694 590 734 370
Total Region XIII 2,029 722 902 405
Sub-Region XVI
Provinces:
1 Negros Occidental 35 7 10 18
2 Negros Oriental 40 4 18 18
3 Siquijor 34 9 22 3
Sub-total 109 20 50 39
Cities:
1 City of San Carlos 32 18 13 1
2 City of Silay 59 27 26 6
3 City of Talisay 20 4 12 4
4 City of Escalante 53 15 15 23
5 City of Cadiz 37 15 8 14
6 City of Sagay 29 11 8 10
7 City of Victorias 46 15 25 6
8 Bacolod City 63 10 49 4
9 Bago City 12 3 8 1
10 La Carlota City 32 2 12 18
11 Himamaylan City 31 3 19 9
12 Kabankalan City 17 5 10 2
13 Sipalay City 14 6 6 2
14 Bais City 33 9 16 8
15 Bayawan City 18 9 6 3
16 Canlaon City 46 15 15 16
17 Dumaguete City 42 9 30 3
18 Guihulngan City 43 9 30 4
19 Tanjay City 37 7 16 14
Sub-total 664 192 324 148
Municipalities:
1 Municipalities of Negros Occidental 481 124 197 160
2 Municipalities of Negros Oriental 504 115 237 152
3 Municipalities Siquijor 156 50 71 35
Sub-total 1,141 289 505 347
Total Sub-Region XVI 1,914 501 879 534
Autonomous Region in Muslim Mindanao
Provinces:
1 Lanao Del Sur 10 7 3 0
2 Basilan 11 4 7
520
Calendar Year 2018

3 Tawi Tawi 5 1 3 1
4 Sulu
5 Maguindanao 11 2 5 4
Sub-total 37 14 18 5
Cities:
1 Isabela 20 5 8 7
2 Lamitan 10 8 2
3 Marawi 13 8 2 3
Sub-total 43 21 12 10
Municipalities:
1 Municipalities of Lanao del Sur 335 84 116 135
2 Municipalities of Basilan 125 36 31 58
3 Municipalities of Tawi-Tawi 94 14 31 49
4 Municipalities of Sulu
5 Municipalities of Maguindanao 258 127 41 90
Sub-total 812 261 219 332
Total Autonomous Region in Muslim 892 296 249 347
GRAND TOTAL 50,135 18,774 17,706 13,655
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2018 AFR Local Govt Volume II

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2018 AFR Local Govt Volume II

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CY 2018

Annual Financial Report

PART I Consolidated Summary of Audit Opinions on the

 NCR – National Capital Region ................. 1

PART II Audit Observations and Recommendations .................... 471

PART III Summary of Audit Observations and

PART IV Status of Implementation of Prior Years’ Audit

LGU AUDIT OPINION Reasons for Opinion other than Unqualified

National Capital Region (NCR)

 Property, Plant and Equipment (PPE) accounts totaling P15.956

 Non-dropping of disposed unserviceable properties from the books

 Cash account balance of P702.969 million is unreliable due to the

 Failure to conduct physical inventory of supplies and materials and

 Cash - Local Treasury reported at P118.759 million is unreliable

 Real Property Tax (RPT) and Special Education Tax (SET)

 PPE account of P23.696 billion, net of Construction in Progress

 Due to NGAs account of

Marikina Qualified  Inventories - Construction Materials, Office Supplies and Drugs

 Property, Plant and Equipment (PPE) account was doubtful due to

 Terminal Leave Benefits (TLB) amounting to P0.876 million was

Parañaque Qualified  Cash in Bank account balance totaling P3.142 billion as at

 PPE account balance of P11.144 billion could not be ascertained

 Contingent asset pertaining to the claim against the Metropolitan

 Non-adjustment of the Insurance Expenses account for the

 PPE accounts totaling P7.583 billion were unreliable due to (a)

 Accounts Payable and the Government Equity accounts were

 Due to GOCCs account was understated by P66.369 million

 Furniture and Fixtures, Accounts Payable, Government Equity and

 Status of accounting records and absence of documents did not

 Property, Plant and Equipment (PPE) accounts, except Land, could

 151 stale checks amounting to P8.446 million were not cancelled,

 Cash Advances for Payroll of P0.571 million, Advances to Special

 Cost of Buildings and Other Structures amounting to P59.867

 Property, Plant and Equipment (PPE) accounts as of December 31,

 Inventory account in the amount of P114.313 million as of

 Cash - Local Treasury and Cash in Bank - Local Currency, Current

 Real Property Auction under the Trust Liabilities account

 Property, Plant and Equipment (PPE) account in the accounting

 Property, Plant and Equipment (PPE) accounts with an aggregate

 Land account amounting to P898.921 million was found overstated

Cordillera Administrative Region (CAR)

Bucay Modified/  Non-submission of the Report of Physical Count of Local Road

 Construction in progress (CIP) accounts of various Infrastructure

 Due to National Government Agencies and Due to LGUs account

 Mandatory trust liability accounts totaling P1.669 million were

 Management failed to initiate action with regards to the absence of

 Road Networks in the amount of P39.733 million representing

 Balance of Construction in Progress (CIP) - Infrastructure Assets

 Dormant Receivable accounts in the amount of P3.174 million, still

 Difference of P.137 million between balances of reciprocal

 Significant delays in the submission to the Commission on Audit

Luba Modified/  Non-submission of Report of Physical Count of Local Road

 Trust Liability pertaining to unexpended / unobligated balance of

 Due from NGOs/POs amounting to P.355 million aged more than

Malibcong Management Letter  Non-submission of the disbursement vouchers, collections,

Manabo Qualified  Non-submission of Report on the Physical Count of Local Road

 Absence of a complete archival system had caused unreconciled

 Projects not yet completed with total costs incurred of P25.534

 Absence of Transfer Certificates of Titles (TCT) for Land properties

 Dormant Receivable and Payable accounts maintained in the

Pidigan Management Letter  Non-submission of journals and financial statements/trial balances

 Trust Liability pertaining to unexpended / unobligated balance of

 Information pertaining to DRRM was not evident on the face of the