PART III - STATUS OF IMPLEMENTATION

OF PRIOR YEARS’ AUDIT RECOMMENDATIONS

PART III – STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT
RECOMMENDATIONS

Out of the thirteen (13) audit recommendations in the CY 2016 Annual Audit Report
including prior years, six (6) were fully implemented, five (5) were partially implemented
and two (2) were not implemented, presented as follows:

Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
1. Cash advances totaling CY 2016 The Management Partially
₱2,868,219.57 remained AAR, requested for Implemented
unliquidated as of Observation copies of
December 31, 2016 contrary No. 1, pages transmittal letters Cash Advances
to existing rules and 38-39 of the liquidation amounting
regulations, thus, affecting reports to COA- ₱2,400,000.00
the reliability of the pertaining to
Central Office as
Government Equity and the Confidential
proof of
related asset and expense funds for previous
accounts. submission years were not yet
credited due to
We recommended that the the absence of
accountable officials credit notices
concerned be required to from Central
liquidate their outstanding Office.
cash advances to settle their
respective accountabilities As of March 28,
2018, the COA
and to reflect the fair
Central Office
balances of the Government
issued four (4)
Equity and the related asset AOMs dated Feb.
and expense accounts. 19, 2018 relative
to the submission
of additional
documents for
their review and
audit.

For monitoring of
the audit team.

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 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
2. Due from NGOs/POs CY 2016 The Management Implemented
amounting to ₱100,000.00 AAR, requested for
has been long outstanding Observation write-off for the
in the books of accounts of No. 2 pages said amount and
LGU Gamu, Isabela, thus, 39-40 was granted in the
affecting the fair level of
presentation of accounts in
Supervising
the Financial Statements.
Auditor and the
We recommended that the Audit Team
Municipal Accountant exert Leader.
effort to determine the real
age or, if not possible, the
approximate age of the
receivable account-Due from
NGOs/POs amounting to
₱100,000.00. Should it be ten
years already, the Municipal
Mayor may request for
authority to write-off the
receivable account from the
Commission on Audit
following the specific
guidelines and procedures as
prescribed under COA
Circular No. 2016-005, thus,
fairly present the affected
accounts in the financial
statements.

3. The account Property, CY2016 The Inventory Partially

Plant and Equipment AAR, Committee implemented
costing ₱87,308,109.94 was Observation conducted a
not reconciled with the No. 3, pages physical count and Inventory report
balance as appearing in the 40-41 submitted the and records of the
Report on the Physical RPCPPE on Municipal
Count of Property, Plant Accounting office
January 31, 2018
and Equipment (RPCPPE) were not
as of December 31, 2016 by reconciled as of

97
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
₱4,469,127.76 which was year-end thus,
not in conformance with
Section 114 of the Manual Reiterated in the
on NGAS for LGUs. Part II of this
report.
We recommended that the
Local Chief Executive direct
the inventory committee to
complete the physical count
of the properties of the LGU
and to submit the revised
inventory report to the Office
of the Auditor for
verification. Also, we
recommended that the
inventory committee
reconcile its inventory report
with the records of the
Municipal Accounting
Office.

4. The account balances of the CY 2016 Partially

reciprocal accounts-Due AAR, implemented
from LGU and Due to LGU Observation
as appearing in the books of No. 4, pages Reiterated in the
the Provincial Government 41-42 Part II of this
of Isabela and the report.
Municipality of Gamu,
Isabela disclosed a
discrepancy amounting to
₱45,713,774.24.

We recommended that the

Municipal Accountant
reconcile the LGU’s records
with that of the Provincial
Government of Isabela to
establish the correct balances

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 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
of the reciprocal accounts.

5. The account Other CY 2016 Reclassification of Implemented

Payables with balance of AAR, accounts was
₱4,772,382.79 as of Observation made on the
December 31, 2016 could No. 5, pages negative balance
not be relied upon due to 42-45 and the amount of
the inclusion of the ₱104,720.00. The
following:
latter was
transferred to
 an unascertained Trust Fund.
amount of ₱21,722.85;
 an account with
negative balance of
₱9,726.00; and
 funds received for a
specified purpose
amounting to
₱104,720.00 which was
charged under the
General Fund instead
of under the Trust
Fund.
We recommended that the
Municipal Accountant
determine the details of the
₱21,722.85 and the negative
balance of ₱9,726.00 as basis
for the necessary
reclassification or
adjustments, if any, as well
transfer the amount of
₱104,720.00 from the
General Fund to the Trust
Fund to fairly present the
balance of the account Other
Payables in the books of the

99
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
LGU.

6. Procurement of goods and CY 2016 Partially

services totaling AAR, Implemented
₱400,031.61 were made on Observation
reimbursement basis which No. 6, pages
is not in accord with Section 44-45
93 of Presidential Decree
No. 1445, thereby denying
the government of the taxes
which could have been
withheld and remitted had
these been procured
directly from suppliers.

We recommended that
management stop the practice
of disbursements on a
reimbursement basis
particularly on the
procurement of goods and
services. Accordingly, we
recommended that
management ensure that all
purchases of goods and
services are paid directly to
the suppliers to comply with
Section 93 of PD 1445 and to
ensure collection of taxes
from the suppliers concerned.

7. Purchases of sheep and CY 2016 The Management Partially

goats for dispersal AAR, directed the Implemented
amounting to ₱519,500.00 Observation Municipal
were not supported with No. 7, pages Agriculturist to Reiterated in the
complete documentation as 45-48 submit the Part II of this
prescribed under existing required list of report
rules and regulations, thus,
beneficiaries.
the validity, legality, and

100
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation

We recommended that
management ensure that all
disbursements of the
municipality are supported
with complete
documentation. It is
emphasized that the
completeness of
documentation includes not
only the submission of the
documents but also the
consistency and correctness
of the details thereof.
In this regard, the lacking
documents for the purchases
of sheep and goats be
submitted to prove the
validity, legality and
propriety thereof, as follows:
 the lacking documents as
required under COA
Circular No. 2012-001;
and
 the list of the
beneficiaries of the
dispersal which will be
the basis for the conduct
of confirmation;
 an explanation of the
difference between the
name of the payee-
supplier in the check,
disbursement voucher
and Sales Invoice; and in
the Purchase Order and

101
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
Acknowledgement
Receipt including the
corrective document, if
any.
Should the required
documents be not submitted
or should the results of the
confirmation be negative, the
disbursements may be
disallowed in audit.

102
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
8. Disbursement amounting to CY 2016 Implemented
₱128,479.58 for gasoline AAR,
issued to various vehicles in Observation
July 2016 was not No. 7, pages
supported with complete 48-49
documentation contrary to
Section 4(6) of Presidential
Decree No. 1445, thus, the
validity and propriety of
the transaction could not be
relied upon.

We recommended that
management ensure that
payment of gasoline expenses
of the municipality be
supported with complete
documentation as prescribed.
It is emphasized that
complete documentation does
not only mean the submission
of documents but also the
completeness of the details
thereof.
Accordingly, the lacking
documents be submitted to
ascertain the validity and
propriety of the payment of
gasoline amounting to
₱129,479.58, otherwise, the
disbursement may be
suspended or disallowed in
audit.
9. The accounts of the LGU CY 2016 Implemented
for the year 2016 were not AAR,
submitted to the Office of Observation
the Auditor within the No. 9, pages
period prescribed under 49-51
existing rules and
regulations, hence the delay

103
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
in the post-audit of the
transactions.

We recommended that the

Municipal Accountant
maintain the timely
submission of accounts
monthly to facilitate the audit
of the transactions.

10. The Monthly Report on the CY 2016 Submission was Implemented

Sources and Utilization of AAR, made within the
the Local Disaster Risk Observation prescribed period.
Reduction and No. 10,
Management Fund pages 51-52
(LDRRMF) of the
Municipality was not
submitted to the Office of
the Auditor within the
period prescribed under
COA Circular No. 2012-002
dated September 9, 2012.

We recommended that the

Local Chief Executive direct
the Municipal Accountant
and Local Disaster Risk
Reduction and Management
Officer to prepare and
submit, respectively, the
Monthly Report on Sources
and Utilization of the
LDRRMF within the period
prescribed under COA
Circular No. 2012-002.

11. The Municipality has not CY 2016 The Management Not Implemented
yet established a sanitary AAR, has an on-going
landfill which is not Observation negotiation with Reiterated in the

104
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
compliant with the No. 11, the PGI for the Part II of this
pertinent provisions of pages 52-53 establishment of report
Republic Act No. 9003 clustered sanitary
dated January 26, 2001, landfill.
otherwise known as the
Ecological Solid Waste
Management Act of 2000.

We recommended that
management prioritize the
provision of a sanitary
landfill for the LGU in
compliance with the pertinent
provisions of the Solid Waste
Management Act.
12. Information and publicity CY 2016 Signboards of Implemented
on the on-going AAR, projects were
infrastructure projects of Observation posted within the
the LGU were not done due No. 12, project site.
to the non-posting of pages 53-55
signboards at the project
locations in violation of the
pertinent provisions of
COA Circular No. 2013-004
dated January 30, 2013,
thus, defeating the purpose
of promoting transparency.

We recommended that the

Municipal Engineer’s Office
post or display a tarpaulin or
signboard for all its projects
at the project location
pursuant to COA Circular
No. 2013-004, thus, promote
transparency. Also, we
recommended that the Local
Chief Executive inform the
SA and ATL concerned
within 10 days after the
appropriate signboard and/or

105
 Status of
Audit Implementation/
Management
Observations/Recommendations Reference Reason for
Action
Partial/Non-
Implementation
public notices are already
posted as basis for validation.

13. The funds received CY 2016 A written Partially

amounting to ₱104,720.00 AAR, representation Implemented
from Jollibee Foods Inc. for Observation dated April 21,
the implementation of the No. 13, page 2017 was made to Reiterated in the
“Busog, Lusog, Talino 55 Jollibee Part II of this
(BLT)” program remained Foundation for report.
unutilized as of December
their approval of
31, 2016, thereby depriving
the request
the intended beneficiaries of
the benefits they could have pending utilization
received out of the said of the fund.
fund.

We recommended that the

Municipal Mayor utilize the
funds received from Jollibee
Foods Inc. amounting to
₱104,720.00 for the purpose
it was intended. Thereafter,
the amount should be
liquidated, otherwise, it
should be returned to the
source entity to
reduce/eliminate the liability
of the LGU.

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