EXECUTIVE SUMMARY

A. Introduction
The Municipality of Alcala claimed to be originally one of the bigger barangays of
Bayambang then referred to as “DANGLA”, was made a separate and official
municipality of Pangasinan by Royal Decree No. 682 issued by the Spanish authorities on
September 20, 1875. It was so named “Alcala” after the name of a town in Spain where
the then Governor of Pangasinan hailed from. The Municipality is located at the central
portion of the Province of Pangasinan. It is bounded on the north by the towns of Villasis
and Malasiqui, on the south by the Municipalities of Bautista and San Manuel, Tarlac, on
the east by the Municipality of Sto. Tomas and finally on the west by the Municipality of
Bayambang. It has a total land area of 5,583.7520 hectares.

Alcala is being classified as a third class municipality composed of 21 barangays and

inhabits a population of 41,077 consisting of 9,134 households. Management is under the
leadership of Municipal Mayor Jojo B. Callejo and Vice Mayor Rodolfo C. Rosquita. It
has a total number of 233 personnel categorized as follows:

Elective - 12
Permanent - 60
Casual - 47
Contractual - 45
Job Orders - 68
Co- Terminus - 1
Total 233

B. Operational Highlights
For the calendar year (CY) 2020, the Management had undertaken various programs,
projects and activities. Major accomplishments of the local government as validated by
the Audit Team were as follows:

Total Cost Status of

Project Location
(P) Completion
1. Local Access Road Brgy. Laoac 5,998,671.10 Completed
Brgy.
2. Local Access Road Canarvacanan 5,351,346.00 Completed
3. Construction of One (1) Unit
Classroom Brgy. Atainan 1,198,551.64 Completed
4. Construction of Agricultural Brgy.
Training Center Canarvacanan 1,497,763.31 Completed
Brgy.
5. Improvement of River Wall in Curareng and
Curareng-Caranglaan Caranglaan 19,994,256.80 Completed

i
 Total Cost Status of
Project Location
(P) Completion
Brgy.
6. Construction of Agricultural Pindangan
Center East 1,998,946.69 Completed
7. Concrete Paving of Macayo
Road Dike Brgy. Macayo 2,297,410.17 Completed
Brgy.
8. Repair of Multi-Purpose Poblacion
Evacuation Center West 1,998,444.00 Completed
9. Construction of
Slaughterhouse (Phase I- Brgy. San
Holding Pen) Pedro Ili 1,498,768.69 Completed
Agro Industrial
10. Improvement of Mechanical Bldg., Brgy.
Dryer (Concrete Pavement) Bersamin 678,459.34 Completed

C. Financial Highlights

Presented below are the financial position, financial performance, sources and utilization
of funds, appropriations and obligations of the local government unit during the CY 2020
with corresponding figures for CY 2019.

Increase
Particulars 2020 2019 (Decrease) %
Assets P 394,497,330.79 P 397,161,065.55 (2,663,734.76) 0.67%
Liabilities 33,246,414.89 42,954,441.62 (9,708,026.73) 22.60%
Government
Equity 361,250,915.90 354,206,623.93 7,044,291.97 1.99%
Income 155,628,575.32 161,991,107.53 6,362,532.21 3.93%
Expenses 148,588,173.37 142,025,137.10 6,563,036.27 4.62%
Appropriations 166,380,745.89 136,284,249.96 30,096,495.93 22.08%
Obligations 153,799,843.17 123,853,321.23 29,946,521.94 24.18%
Disbursements 145,958,200.47 137,903,608.61 8,054,591.86 5.84%

During the year, the Municipality of Alcala received National Anti-Drug Abuse Council
Special Award given by the Department of Interior and Local Government last December
18, 2020. It was also awarded as 1st Place-Top Performing LGU in Bayambang District
Hospital and 3rd Place- Top Performing LGU in Public Health Implementation for CY
2020.

ii
D. Scope of Audit
The audit covered the operation of the Municipality of Alcala, Pangasinan for the CY
2020. It was conducted to ascertain the fairness of presentation of the financial
statements, check compliance with existing laws, rules and regulations and determine
whether management in the implementation of its programs, projects and activities has
attained its goals and objectives in an economical, efficient and effective manner.

The audit included analysis of accounts, review of transactions, test of compliance with
existing laws, rules and regulations, review of operating procedures, inspection of
programs and projects, interview of officials and employees, and as such other
procedures considered necessary under the circumstances.

E. Auditor’s Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of the presentation of financial
statements due to non-conduct of annual physical of the PPE of the municipality during
the year with a net book value of P356,657,111.17 hence existence and conditions of
these properties cannot be determined thereby affecting the reliability of the account
balance as presented in the Statement of Financial Position of the Municipality. As
discussed in Part II of the report, non-submission of the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE) and not able to maintain property cards and
PPE ledger cards for each category of assets did not permit us to apply adequate
alternative procedures to ascertain the reliability of the said account.

F. Summary of Significant Observations and Recommendations

The following are some deficiencies affecting the operation of the agency and discussed
with management during exit conference.

1. Compliance with the eligibility requirements of supplier of various COVID19-related

procurements amounting to P13,198,679.00 as prescribed in Government
Procurement Policy Board (GPPB) Circular No. 01-2020 dated April 6, 2020 was not
strictly enforced hence maybe detrimental to the financial interest of the local
government unit

We have recommended the following:

a. Submit original copy of the Omnibus Sworn Statement of the various supplier for
every procurement made during the effectivity of GPPB Circular No. 01-2020
dated April 6, 2020; and

b. Ensure that the eligibility requirements of the suppliers particularly on the line of
business to which they are authorize to engage must be similar or within the
subject of the procurement.

iii
2. The municipality allotted P213,970.80 for the procurement of CCTV from the 20%
Local Development Fund which is not among the items allowed to be charged against
the fund thus contrary to the provisions of the Joint Memorandum Circular (JMC) No.
2017 – 1 dated February 22, 2017 of the Department of Interior and Local
Government (DILG) and Department of Budget and Management (DBM).

Also, projects with total allotment of P3,850,000.00 were described in generic terms
under the 20% Local Development fund and were implemented without the required
approval/authorization from the local Sanggunian concerned pursuant to existing
laws, rules and regulations thus appearing to be illegal in nature and may warrant the
issuance of Notice of Disallowance.

We have recommended that the local government unit implement the following:

a. Strictly adhere with the existing laws, rules and regulations covering the
appropriation and utilization of the 20% Local Development Fund to avoid
possible sanctions that may be imposed for non-compliance.

b. The Local Chief Executive ensure that the 20% Local Development Fund is
utilized within the purposes expressly prescribed by law to ensure that funds for
programs/projects/activities geared toward the welfare of its constituents would
not be sacrificed; and

c. The Municipal Development Council specifically identify the projects for

inclusion in the Annual Investment Plan and to secure approval/authorization
from local Sanggunian for the implementation of projects/programs/activities that
were described in generic terms.

3. Payment of salaries and wages for the calendar year 2020 amounting to
P29,077,359.03 were not supported with complete documentation which is contrary
to Section 4 (6) of Presidential Decree No. 1445 and Section 1 and 2, Rule XVII of
the Omnibus Rules Implementing Book XVII of Executive Order No. 292 hence may
result to suspension of the transactions in audit.

Further, the non-implementation of a biometric system that would accurately register

the actual attendance of the local government unit (LGU) personnel resulted to
weakness in the internal controls of the municipality thus susceptible to erroneous
computation/payment of salaries and wages which is detrimental to the financial
interest of the government.

We have recommended the following:

a. That the Municipal Accountant and Municipal Treasure ensure the submission of
necessary supporting documents such as the approved DTRs and application for
leaves before affixing their signatures in the disbursement vouchers and before

iv
 effecting payments pursuant to Section 4 (6) of Presidential Decree No. 1445 to
avoid suspension in audit.

b. That the HRMO verify the DTRs and application for leaves and should ensure
that before the DTRs are forwarded to the Local Chief Executive for approval, the
DTR should have been processed/ verified and initialed by the concerned
Department Head.

c. That management may consider the acquisition of a biometric machine for the
LGU personnel to register actual and prescribed office or work hours in order to
ensure correctness in the computation/payment of leave credits, salaries and
wages.

The above audit observations and recommendations contained in the report were
discussed with municipal officials and employees through the issuance of various Audit
Observation Memorandum and during the exit conference conducted on April 13, 2021.
Management comments are included in the report, where appropriate.

Other audit observations and its corresponding remedial measures are discussed in details
in Part II of this report.

G. Status of Implementation of Prior Year’s Audit Recommendations

Of the 33 audit recommendations embodied in the 2019 Annual Audit Report, 14 were
implemented by the municipality and 19 were not implemented and are reiterated in this
report.

H. Status of Settlement of Audit Suspensions, Disallowances and

Charges

For the calendar year 2020, there were no unsettled suspension, disallowances and
charges.