1. The balance of Property, Plant and Equipment (PPE) totaling P2,840,503,480.

36  as ofDecember 31,

2007, cannot be established due to the continued inability of management to complete the physical
inventory of PPE because of insufficiency of records, contrary to Sections 120 and 124 of the New
Government Accounting System (NGAS) Manual, Volume 1.
2. Inventory account balances for food and other supplies, raw materials, finished goods, drugs and
medicines and accountable forms amounting to P4,814,876.65 and the corresponding expense
accounts cannot be relied upon due to the failure of the agency to comply with existing rules on
requisition,  conduct physical inventory, prepare weekly  Summary of Supplies and Materials Issued
(SSMI), and maintain supplies ledger cards on such inventory items.
3. Cash Advances were granted, utilized and liquidated without following the provisions of COA Circular
No. 97-002 dated February 10, 1997 which resulted to unliquidated cash advance amounting to
P3,625,665.85 as of December 31, 2007.
4. Various infrastructure projects implemented since CY 2003 and totaling P106,043,596.31 or 65.26% of
the total Construction in Progress account of P162,482,099.96 remained unfinished as of year-end,
thus, violating the terms and conditions of the covering contracts and depriving the government and the
public of the essential benefits that could be derived there from.
5. Advances to Contractors (Account 181) totaling P32,339,514.51 were paid to       fifteen (15) different
contractors of projects implemented since CY 2004 but  remained unfinished as of year-end, thus,
violating the terms and conditions of the covering contracts and depriving the government and the
public of the essential benefits that could be derived therefrom. 
6. The Provincial Government paid in advance the amount of  P12,242,500.00 for the purchase of (1)unit
shipping vessel and (1) unit 50 footer catamaran passenger ferry contrary to Section 338 of RA 7160
and Section 88 of PD 1445.
7. Interest expense amounting to P2,030,000.00 was paid by the agency although not sufficiently provided
with appropriation in its Annual and Local Development Fund Budgets for Calendar Year 2007, contrary
to the provisions of Sec. 4(1) of Presidential Decree  (PD) No. 1445.
8. Trust Funds amounting to more than P10M and received from  national government agencies 
entrusted  to the Province of Camarines  Sur were used for payment of various expenses contrary to 
the purposes indicated in the respective Special Allotment Release Order (SARO) and contrary to
Section 4(3) of P.D. 1445.
9. Borrowings in the amount of P550 million contracted by the Local  Government Unit (LGU) from various
financial institutions were taken up in the Local Development Fund (LDF) special account books instead
of maintaining a separate special account in the General Fund for loans in conformity with Sec. 453 of
the Implementing Rules and Regulations (IRR) of  Republic Act (RA) 7160, thereby preventing the
agency from providing accurate and separate information on the status of the special account on loans.
10. The General Fund borrowed from Trust Fund the amount  of P80,164,702.80 to pay for its obligations,
likewise, Trust Fund amounting to P17,766,961.51 was paid to creditors of the General Fund, contrary
to Section 4(3) of P.D. 1445.
11. Collections were not deposited intact and within the prescribed period resulting to undeposited balance
amounting to P2,523,756.70 of Cash in Vault account at year-end, contrary to Section 32 Volume 1 of
the NGAS, thus exposing government funds to possible loss and/or misappropriation.
12. Accounts Payable of P16,866,637.17 and Due to Officers and Employees of  P3,915,955.21 set-up in
CY 2006 were arbitrarily reverted back to the General Fund at year-end casting doubt to the validity of
such accounts and the intention for booking up.
13. Numerous vouchers for check disbursements, liquidation of cash advances, and obligation of year-end
payables amounting P 20,761,685.41 were not submitted to the Office of the Auditor, thus prohibiting
review and examination thereof.
14. Deficiencies amounting to P562,535.45 were noted in some procurement/projects of the agency as
reported by COA’s Technical Audit Specialists, thus, depriving the government and the public of the
essential benefits that could be derived therefrom.
15. Claims for infrastructure projects were paid  even if not supported with complete documentation
contrary to the provisions of Section 4 (6) and (7) of Presidential Decree (PD) No. 1445.
16. The Province failed to provide a specific amount of appropriation for Gender and Development (GAD)
in its annual budget contrary to the mandate of Joint  Cir. No. 2004-1 of DBM, NEDA and National
Commission on the Role of Filipino Women (NCRFW).
17. Projects were not carefully planned. After being completed about six (6) months earlier, projects in
connection with the bike park costing P6,363,498.33 were subsequently “removed/demolished” to pave
way for the construction of another project.
18. Had the Province implemented the projects in accordance with what had been agreed upon in the Loan
Agreement, it could have derived the maximum benefits intended from borrowing funds to finance
diverse developmental projects.
19. The Province did not fully adhere to the provisions of DILG-DBM Joint Memorandum Circular No. 1, s.
2005, in the appropriation and utilization of its  20% of IRA. Consequently it spent for items which did
not partake of the nature of investment and capital expenditures, and did not take into consideration
cost recovery and entrepreneurship.
20. Had the Province maintained a special account for 20% development fund exclusively, it could have
effectively monitored the disbursements charged to the fund and could have maximized the
implementation of the various development programs/projects/activities funded by the 20%
development fund, thereby delivering optimum benefits to the constituents as intended by the Local
Development Council (LDC).
21. Had there been strict compliance with the rules on the granting of financial assistance to NGO’s/PO’s,
the amount of P862,935.00 could not have been released in full to  two(2) NGO’s and proper
monitoring and evaluation thereof could have been made by the province.

2008 SUMMARY OF SIGNIFICANT AUDIT FINDINGS

1. Collections received by collecting officers were neither remitted promptly to the Provincial Treasurer nor
was it deposited intact by the latter resulting to a cash-in-vault balance at year-end of P 2,199,052.36,
contrary to the provisions of Section 15 and 32 of the Manual of New Government Accounting Systems
(NGAS), thus exposing government funds to possible risk of misuse and misappropriation.
2. Huge cash advances were granted to nine (9) disbursing officers without attaching an activity budget
for the cash advance, or was there any indication that the amount of the cash advance was limited to
the disbursements for two months of a certain project contrary to Sec 4.4.2 of COA Cir. 97-002.
3. The cash advances granted to the designated Camsur Watersports Complex (CWC) Finance Officer
taken up in the books as petty cash fund (PCF), was not maintained under the imprest system and was
not utilized in accordance with pertinent rules, which resulted to the accumulation of cash advances
and to doubtful charges to the PCF.
4. Sound financial management system was not established and maintained by the provincial government
on the receipt and disbursement of loan proceeds for CY 2008 amounting to P569.77 million and
P561.69 million respectively, contrary to article IV, Section 4.01 of the Loan Agreement.
5. Claims of various creditors under the Special Account-Loans totaling to P82.74 million were paid due to
the failure of the Province to provide the required equity which is equivalent to 10% of the project cost
in accordance with the loan agreement.
6. Various expenses charged to account Other Maintenance and Operating Expenses (969) related to
Kaogma Festival and World Wakepark Championship were of doubtful legality, propriety and validity
because of failure of the agency to adhere to prescribed regulations and policies on procurement and
documentation.
7. Majority of the mandatory/created appointive provincial positions were occupied by officers-in-charge
and some were not even filled-up, which resulted to the difficulty of pinpointing accountability and
responsibility over the department’s transactions.
8. The Bids and Awards Committee (BAC) recommended direct contradicting as mode of procurement for
the acquisition of various goods and services amounting to more than P30 million pesos even if the
conditions laid down by Section 50 of the IRR of RA 9184 were not present, thereby raising doubts on
the integrity of the procurement process.
9. A number of vouchers for check disbursements, liquidation of cash advances, and other journal entry
vouchers amounting to P57,817,017.31 were not submitted to the Office of the Auditor, thus prohibiting
review and examination thereof.
10. Various deliveries accepted and inspected by the General Services Office (GSO) could no longer be
presented for inspection to the Commission on Audit on the same day these goods were accepted and
inspected.  Moreover, some goods could not be presented for inspection several days after delivery,
 thereby raising doubts on the completeness of these deliveries as well as their conformity with the
Purchase Orders (PO).
11. The province could have delivered optimum benefits to the constituents as intended by the Local
Development Council (LDC) had it maximized the implementation of the various development
programs/projects/activities funded by the 20% development fund.
12. The 20% Local Development Fund (LDF) of the Province was used to settle obligations of the Loans
Fund in the total amount of P 49,138,858.41, thereby rendering the agency unable to implement some
of the projects prioritized under the LDF.
13. The Camarines Sur Watersports Complex (CWC) has been operating as an economic enterprise for
more than a year now without adopting approved basic policies and procedures to serve as its manual,
thus, internal control system over important transactions were not installed and observed, resulting to
the understatement of receivables and income accounts.
14. The agency failed to enforce the terms and conditions in the Memorandum of Agreement governing the
use of the hotel and resort in Caramoan, Camarines Sur by Adventure Line Productions thus, only the
amount of  P14,009,075.75 were collected out of the P16,500,000.00 contract price.  The Province
likewise failed to record the receivable portion of the account in the amount of P2,490,924.25 thereby
understating both the receivable and income accounts by such amount.
15. Collections in the  Camarines Sur Water  Sports Complex (CWC) were not turned over to the
treasurer/cashier within the period stated under Sec. 29 of the Manual on New Government Accounting
System (NGAS) but instead used to defray operating expenses thereat which practice is also contrary
to the principles of imprest  system.
16. Payments to locally assisted teachers amounting to P7,511,280.66 was taken up in the Special
Education Fund (SEF) books as “Donations” (878) instead of taking it up in the General Fund Books,
thereby depriving the SEF of the use of such fund.
17. The balance of Other Supplies Inventory for SEF amounting to P4,800,000.00 cannot be relied upon
due to non-conduct of physical inventory, preparation of Summary of Supplies and Materials Issued
and maintenance of Supplies Ledger Card.

2009 SUMMARY OF SIGNIFICANT AUDIT FINDINGS

I.  Financial and Compliance Audit

A. Cash

1. Collections in the Sports Center (Camarines Sur Water Sports Complex- CWC) were not turned over to
the treasurer/cashier within the period stated under Sections 15 and 32 of the Manual on New
Government Accounting System (NGAS), Volume I, thus, exposing government funds to possible loss,
misuse or misappropriation.
2. The Province incurred a cash overdraft in the General Fund in the amount of one hundred sixty eight
million forty eight thousand two hundred sixty nine and 87/100 (P168,048,269.87) as of December 31,
2009, contrary to the provisions of Art. 454(c ) of the Implementing Rules and Regulations (IRR)  of RA
7160.
3. Cash Advances to officers and employees amounting to P23,959,182.38 remained unliquidated at  the
end of the year, contrary to the provisions of Sec. 5.8 of COA Circular 97-002,  thereby raising doubts
on whether the purpose of these cash advances have been served.

B. Property, Plant and Equipment

1. Unserviceable properties amounting to P69,340,822.09 as reported by the Provincial General Services

Office were not yet disposed of resulting to the overstatement of Assets in the financial statements.
2. Several notices of disallowance were issued for infrastructure projects implemented by the province
during the period 2007-2009 with deficiencies amounting to P5,543,668.04.

C. Expenses
 1. Various expenses charged to account Consultancy Services (793) related to 2009 World Wakepark
Championship in the amount of P11,522,497.69, to Site Development and Full Architectural Design for
Hunungan Resort in the amount of P1,080,000.00 and Proposed Commercial Development of Capitol
Complex amounting to P663,000.00  were of doubtful legality, propriety and validity because of failure
of the agency to adhere to prescribed regulations and policies on procurement and documentation.
2. The amount of P132,504,639.29 was spent by the Province for  Donations (account 878) for programs
and activities undertaken by the Provincial Social and Services Office (PSSO) without approved
program/activity designs and established criteria, hence making the disbursement of doubtful validity
and propriety.
3. The Province paid  P6,705,227.31 for security services without public bidding, contrary to the provisions
of Republic Act (RA) No. 9184, thereby raising doubts on the propriety and economy of this transaction.
4. Power and Water  Bills amounting to more than P14.4 million pesos were not paid on time which
resulted to arrears and incurrence of penalty  and surcharges , which is considered an unnecessary
expenditure expressly prohibited under Section 33 of the Government Auditing Code of the Philippines
(PD 1445) on prevention of irregular, unnecessary, excessive or extravagant expenditures of
government funds.

D. Accounts with Significant Change

1. Income and Receivable account increased significantly by P436,759,140.35  as of December 31, 2009
due to recording of uncollected revenues for franchise tax, amusement tax and tax on sand and gravel
thereby overstating Receivable and  Income accounts by the same amount contrary to Section 19 (c) 
of the New Government Accounting System-Local Vol. I- III.

E. Others

1. Transfer of Funds and several disbursements were made by the provincial government without
evidence of audit action by the auditor contrary to Sections 2.1, 3.1.3, 3.1.5 and 4.8.1 of COA Circular
2009-002, thereby raising doubts on the regularity of these transactions.
2. The Bids and Awards Committee failed to exercise the non-discretionary “pass / fail” criteria
contemplated in Sec. 30 of Republic Act (RA) 9184. thereby raising doubts on the eligibility of winning
contractors and suppliers.
3. A number of vouchers for check disbursements, liquidation of cash advances, and other journal entry
vouchers amounting P 44,012,398.45 were not submitted to the Office of the Auditor, thus prohibiting
review and examination thereof.
4. The  forty percent (40%) share of the municipalities  on  Real Property Tax (RPT) collected by the
Province  as mentioned in Section 271 of the Local Government Code of 1991 were not immediately
released to them, thereby depriving these municipalities of the use of such fund.
5. Salaries and wages were not  paid directly to the persons  named in the    payroll, contrary to the
provision of Sec 195 of the Government Accounting and Auditing Manual (GAAM), Vol. I, thereby
raising doubts on whether payment was made to the right person.

II. Value for Money Audit

A. 20% Economic Development Fund

   The Local Development Fund (LDF) was borrowed and used to defray expenses for salaries and wages,
educational assistance, and payment of loan amortization in the total amount of P 95.15M or 44% of the local
development fund realized for CY 2009, contrary to  Joint Memorandum Circular No. 1, s of 2005 of
Department of the Interior and Local Government (DILG) and Department of Budget and Management (DBM)
on the Utilization of the 20% Annual Internal Revenue Allotment (IRA) for development projects and contrary to
the Approved 20% Local Development Fund(LDF) of the province

B. 5% Calamity Fund

   Procurement of various goods amounting to P 11M  for  distribution to different municipalities and  barangays
were improperly taken from Calamity Fund contrary to Section 5b.1 of the  Implementing Rules and Regulation
(IRR) of  RA 8185   on the use and utilization of 5%  Calamity Fund.

C. Gender And Development

   The Province failed to prepare a Gender and Development (GAD) Plan as well as annual GAD
accomplishment report, contrary to the provisions of Executive Order (EO) No. 273 and to the guidelines set
under Joint Circular (JC) No. 2004-001 issued by the DBM, NEDA and NCFRW, resulting to non-monitoring
and performance evaluation of GAD related projects/programs and activities.

D. Economic Enterprise

   Expenses in the General Fund Special Account-Sports Center were not entirely taken up in its books but
were instead taken up in the books of the General Fund-Proper thereby failing to provide adequate information
as to the true results of operation and true financial condition of the special account, contrary to the objectives
of maintenance of special accounts, stated in Sec 106 of the New Government Accounting System (NGAS)
Manual.

E. Special Education Fund

   Payments to Locally Assisted Teachers amounting to P7,341,436.24 was taken up in the Special Education
Fund (SEF) books as “Donations” (878) account instead of taking it up in General Fund books, thereby
depriving the SEF of the use of such funds.

2010 SUMMARY OF SIGNIFICANT AUDIT FINDINGS

1. Collections amounting to P1,760,086.54 remained undeposited as of year-end, representing the

balance of collections of the former Liquidating Officer for the period May 2-22, 2010 amounting to
P4,908,802.19 which were not turned over to the Treasurer/Cashier, contrary to section 31 of the
manual on New Government Accounting System (NGAS), Volume I, but was instead used to defray the
operating expenses in the CWC thus, violating the common rules on internal control over cash receipts
and collection.
2. The function of collection of registration fees for the CamSur Marathon 2010 was entrusted to
CAMSUR EVENTS, INC., a private corporation, contrary to the provision of Sec. 130 (c) of the Local
Government Code of 1991. As a result, collections totaling to P1,975,590.00 for 5,147 registrants were
not remitted in full to the Provincial treasury of Camarines Sur as of December 31, 2010. Likewise, the
province failed to realize revenue amounting to P5,660,160.00 due to its failure to collect registration
fees from 12,671 registrants, contrary to the terms and conditions stated in the registration form.
3. The balance of Property, Plant and Equipment (PPE) totaling P4, 368,987,560.84 AS OF December 31,
2010, cannot be established due to the continued inability of management to complete the physical
inventory of PPE cause of insufficiency of records, contrary to Section 124 of the New Government
Accounting System (NGAS) Manual, Volume I.
4. Procurement of gasoline in the total amount of P20,005,016.91 FROM PETRON Fuel Express were
paid without pre-audit action by the auditor contrary to Sections 2.1, 4.5.3 and 11.2 of COA Circular
200-002 dated may 18, 2009 and without passing through the Bids and Awards Committee (BAC)
contrary to the provisions of RA 9184. Likewise, these were paid despite deficiency of supporting
documents.
5. Contrary to pertinent provisions of COA Circular No. 77-61, withdrawal and use of gasoline deposits
from Petron Fuel Express were not duly accounted for and supported with properly accomplished forms
mandated under the Circular, thus, casting doubts on the reasonableness and legality of gasoline
expenses totaling P20,005,016.91.
6. Fuel amounting to P4,938,410.00 was reportedly used for the consumption of MV LRAY I (Catamaran)
for the period June to October, 2010 to ferry passengers from Port Bongalon to various areas of
 Caramoan, Camarines Sur, however, the record book maintained in the vessel revealed that the same
was almost daily on “standby” status during the same period herein mentioned.
7. Three (3) heavy equipment, which were reported to have consumed a portion of the P20 million fuel
deposit, are not among those included in the Inventory Report for Property Plant and Equipment as of
June 30, 2010; one fo the vessels was found in the premises of ALDP Robertson Shopping Mall and
Mighty AJ construction, contrary to the provisions of the Manual; and only thirteen (13) of the sixteen
vehicles and heavy equipment were inspected on site.
8. The four(40 generator sets which were reported to have consumed a total of P7,181,018.40 from the
fuel deposit were not included in the Inventory Report of Property and Equipment as of June 30, 2010.
Likewise, two (2) of these generators could not be presented for inspection upon demand. Moreover,
the documents submitted for the gasoline consumption of these generators were highly doubtful
because of the frequency of its use.
9. Some projects were implemented ahead of their scheduled bidding, contrary to the provisions of RA
9184.
10. The Provincial Accountant failed to submit a number of vouchers for check disbursements, liquidation
of cash advances, and other journal entry vouchers amounting P62, 214,996.57 to the Office of the
Auditor, contrary to Paragraph 6.06 of COA Circular No. 95-006 and Sections 100 and 122 of PD 1445,
thus, validity, propriety and accuracy of the recorded transactions could not be ascertained.
11. Claims of various creditors amounting to more than P70 million which were contracted in the previous
years and recorded as Accounts Payable, were not paid either due to absence of appropriation at the
time these were contracted contrary to Sections 84 and 85 of PD 1445, or the loan released for these
projects were diverted to pay their obligations. Of this amount, P49 million was reverted as accounts
payable in CY 2010, thereby resulting in understatement of asset and payable accounts by the same
amount.
12. Seventy six percent (76%) of the projects/programs/activities implemented by the agency under the
Local Development Fund (LDF) were not within the approved local development plan (LDP), hence the
true intent of the local development council (LDC) in approving the plan was not served.
13. The accuracy and reliability of the recorded lodging and extra bed fees from various facilities in CamSur
Water Sports Complex (CWC) on December 31, 2010 in the amount of P52,811,141.82 could not be
verified and ascertained due to the inability by  management to submit occupancy and other related 
reports despite repeated demands.
14. The provincial government failed to submit a copy of the Memoranda of Agreement (MOA) for the use
of hotel, resort and other facilities in Gota Beach in Caramoan, Camarines Sur in CY 2010, contrary to
Section 3.1 of COA Circular No. 2009-001 thereby rendering the reported collection of more than P17
million as of December 31, 2010 doubtful and unreliable.
15. The recording of financial transactions in Special Account-Sports Center was not accurately done
resulting in overstatement of the reported net income in the amount of P8,032,423.02 and unreliable
balance of cash account of P18,940,587.20 as of December 31, 2010, thereby failing to provide
adequate information as to the true results of operation and true financial condition of the special
account, contrary to the objectives for its maintenance as stated in Sec. 106 of the New government
Accounting System (NGAS) Manual