Kawit2018 Audit Report

Republic of the Philippines
COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City
ANNUAL AUDIT REPORT
on the
Municipality of Kawit
Province of Cavite
For the Year Ended December 31, 2018

EXECUTIVE SUMMARY
Introduction
The Municipality of Kawit is located within the province of Cavite, Region IV-A
(CALABARZON) west of the island of Luzon. It is particularly situated in the northern part of
the province and is bounded by Cavite City and Bacoor Bay in the north, the City of Bacoor
in the east, City of Imus in the southeast, the Municipality of General Trias in the south and
the Municipality of Noveleta in the west.
The Municipality covers a total area of about 1,667.24 hectares based on the cadastral
survey which constitutes 1.2948 percent of the total area of the Province of Cavite. It
consists of 23 barangays and is classified as an urban 1 st class municipality. It has a total
population of 83,466 and total households of 21,018.
The Municipality is geared towards providing the best quality service to clientele, particularly
the constituents of Kawit. That the people may be able to exercise their rights and provide
the basic needs, and initiate economic developmental programs and projects by means of
true public service under a clean and safe environment.
Financial and compliance were conducted on the accounts and operations of the
Municipality for Calendar Year (CY) 2018. The audit was conducted to ascertain the
fairness of the presentation of the financial statements and compliance of the Municipality
with laws, rules and regulations, as well as the economical, efficient and effective utilization
of resources.
Financial Highlights
The Comparative Financial Position and Results of Operations of the Municipality for CY
2018 are summarized as follows:
2018 2017 Increase/Decrease
Total Assets P 556,414,533.09 P 516,801,522.60 P 39,613,010.49

Total Liabilities 185,571,640.69 169,811,148.32 15,760,492.37
Total Equity 370,842,892.40 346,990,374.28 23,852,518.12
Total Revenue 261,046,771.31 221,393,262.81 39,653,508.50
Total Expenses 233,883,258.28 207,777,288.04 26,105,970.24
Personnel Services 66,004,414.11 62,891,892.22 3,112,521.89
MOOE 133,765,570.42 129,352,562.33 4,413,008.09
Non-Cash Expenses 14,917,106.26 14,152,437.48 764,668.78
Transfer, Assistance & Subsidy 19,196,167.49 1,380,396.01 17,815,771.48
Surplus (Deficit) 27,163,513.03 13,615,974.77 13,547,538.26
Independent Auditor’s Report on the Financial Statements
We rendered a qualified opinion on the fairness of the presentation of the financial

statements as the correctness and reliability of the year-end balances of the various
Property, Plant and Equipment (PPE) accounts totaling P487,921,290.36 could not be
established due to the continued inability of both the Accounting and the General Services
i
Office to reconcile their records, which posted a difference in balances of P53,166,748.87 as
of December 31, 2018, contrary to Section 114 of the Manual on the New Government
Accounting System (MNGAS) for Local Governments Units (LGUs), Volume l. Moreover, Re-
al Property Tax (RPT) and Special Education Tax (SET) Receivables as of December 31,
2018 reflected a balance of P2,996,388.99 and P2,553,051.90, respectively, or a total of
P5,549,440.89 while the Certified List of RPT Delinquencies, prepared by the Municipal
Treasurer showed a total of P21,671,332.47 inclusive of penalty of P9,904,850.83 hence, a
difference of P16,121,891.58 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.
Significant Observations and Recommendations
The other observations that need immediate attention and action are as follows:
1. The cash position of the Municipality having a total current balance of

P75,402,458.34 (Cash and Cash Equivalents) for the General Fund (GF) was not
enough to cover for the total current liabilities of P106,623,452.70 and the
unexpended balance of the 20% Development Fund of P30,265,362.01 as at
end of the year resulting in cash deficit of P61,486,356.37, contrary to Section
337 of Republic Act (RA) No. 7160 and Section 4(3) of Presidential Decree (PD)
No. 1445, and adversely affecting the payments of current liabilities, remittances
of inter-agency payables and failing to provide cash back-up for other trust li-
abilities.
We recommended that the Municipal Mayor instruct the Municipal Treasurer to

prepare the Daily Cash Position Report to serve as guide in certifying that funds
are available to ensure that all disbursements have cash back-up; and to adopt
strategies to increase revenues/collections;
We also recommended that the Municipal Mayor instruct the Municipal Budget
Officer, Municipal Accountant, and Municipal Treasurer to exercise diligence,
prudence, and proper control in the disposition of the Municipality’s funds and
limit expenditures within the total income realized and collected during the year to
avoid incurrence of cash overdraft.
2. Under-collections totaling P250,488.13 were incurred due to various deficiencies

/ discrepancies noted in the computation of penalties, discounts and tax due on
Real Property Tax payments for the period January to March 2018, contrary to
Sections 233(b), 251 and 255 of Republic Act (RA) 7160 and the Revised
Revenue Code of the Municipality of Kawit dated January 2017.
We recommended that the Municipal Mayor direct the Municipal Treasurer to

issue a notice to concerned taxpayers requesting for additional payments to
settle the unpaid/errors in computation of interests on delinquent real property
taxes or refund the excess discounts given, to prevent the issuance by the Audit
Team of Notice of Charge against concerned Collecting Officers in the amount of
P250,488.14.
We also recommended that the Municipal Treasurer revisit the tax collections in
2018 and review the computation made starting on the top taxpayers in order to
ii
collect from those with under-assessed or erroneously computed taxes.
Otherwise, Notices of Charge will be issued for any under-collection found in
audit.
Henceforth, we recommended that the Municipal Mayor direct the Municipal

Treasurer to install effective controls to ensure correct imposition or computation
of penalties or discounts in the payment of taxes.
3. Taxes withheld by the Municipality under the General Fund amounting to

P3,329,627.97 remained unremitted to the Bureau of Internal Revenue (BIR) as
of December 31, 2018, contrary to BIR Regulation No. 2-98, thus, exposing the
Municipality to payment of penalties and surcharges on late remittances.
We recommended that the Municipal Mayor direct both the Municipal Treasurer
and the Accountant to effect the immediate remittance of the taxes due to the
BIR. Henceforth, withheld taxes due the BIR be remitted on or before the 10th day
of the month following the month in which withholding was made as required
under BIR Regulation No. 2-98 to prevent incurrence of surcharges and penalties
for late remittances.
4. Only P12,145,831.15 or 59.6 per cent of the total appropriations for Local Risk
Reduction Management Fund for the year including the previous years’
continuing appropriation of P20,378,426.29 was utilized as of December 31,
2018, and the Monthly Report on Sources and Utilization of the Disaster Risk
Reduction and Management Fund was not prepared and submitted to the COA
Auditor contrary to the requirements provided for under the provisions of COA
Circular No. 2012-002 thus not delivery of related services to target beneficiaries
were not optimized.
We recommended that the Municipal Mayor effect the optimum utilization of the
MDRRMF in order to strengthen the Municipality’s disaster preparedness and
direct the MDRRMO to submit the Monthly Report on Sources and Utilization of
Disaster Risk Reduction and Management Fund to facilitate proper monitoring
and evaluation of the utilization of the MDRRMF.
5. Copies of the approved contracts of the nine implemented projects involving a

total amount of P18,748,584.44 together with the required supporting documents
thereto were not submitted to the Office of the Auditor within 5 working days from
the execution thereof, contrary to COA Circular No. 2009-001, thus affecting the
timely review, inspection and evaluation of the transactions and communication
of deficiencies, if any.
We recommended that the Municipal Mayor direct the Municipal Engineering

Office and the BAC Secretariat to furnish the Audit Team with copies of approved
contracts and all the documents forming part thereof within five days from their
execution as prescribed under COA Circular No. 2009-001 dated February 12,
2009, to facilitate prompt review and evaluation of the contracts and early
communication to management of the deficiencies, if any.
6. The Notice of Award, Notice to Proceed and Contracts for the projects under the
20% Development Fund were not posted in the Philippine Government
iii
Electronics Procurement System (PhilGEPS) contrary to Section 37.1.6 and
37.4.2 of the Revised Implementing Rules and Regulations (RIRR) of Republic
Act (RA) No. 9184, thus, transparency in the procurement process and prompt
implementation of procurement contracts were not attained.
We recommended that the Municipal Mayor direct the BAC Secretariat to comply
with the required postings of the Notice of Award, Notice to Proceed and
Contract in the PhilGEPS and in the website of the Municipality, if any, within
three and 15 calendar days, respectively, from their issuance.
7. The Municipality did not prepare the Project Procurement Management Plan
(PPMP) and Annual Procurement Plan (APP) for Infrastructure Projects for CY
2018 as required under Sections 7.1 and 7.3.2 of the Implementing Rules and
Regulations (IRR)-A of the Republic Act No. 9184 and Section 4 of the Local
Government Units Procurement Manual, thus, proper planning and monitoring of
the Programs, Activities and Projects (PAPs) of the Municipality were not
assured.
We recommended that the Municipal Budget Officer and the BAC Chairman
ensure that the required PPMP and APP for Infrastructure Projects are prepared
and approved before any procurement of goods, services and civil works is
undertaken to properly plan and monitor the priority projects of the Municipality
for a particular budget year.
8. The fidelity bond of P225,000.00 of the Cashier, designated as Acting Disbursing

Officer of the Municipality was insufficient to cover her average cash
accountability of P5,110,479.17 under the Revised Schedule of Premium Rates
embodied in Section 5.3 of Treasury Circular No. 02-2009, thus, exposing
government funds to the risk of not being indemnified in case of loss through
theft, defalcations, shortages and other similar cases.
We recommended that the amount of fidelity bond of Ms. Ocava be increased to

P3,500,000.00 as provided for under the Revised Schedule of Premium Rates of
the above-mentioned Treasury Circular to ensure that the government is duly
indemnified in case of losses of funds.
The above observations and recommendations were discussed with the concerned
Municipality officials and staff in an exit conference held on June 20, 2019. Management’s
views and comments were incorporated in the report, where appropriate.
Summary of Total Suspensions, Disallowances and Charges
There were no audit suspensions, disallowances and charges as of December 31, 2018.
Status of Implementation of Prior Year’s Audit Recommendations
Of the 22 audit recommendations contained in the 2017 Annual Audit Report (AAR),
10 were fully implemented, seven were partially implemented, while the remaining five were
not implemented.
iv
TABLE OF CONTENTS
Page
Part Subject No.
I Audited Financial Statements

 Independent Auditor’s Report 1
 Statement of Management’s Responsibility for Financial Statements 3
 Statement of Financial Position 4
 Statement of Financial Performance 5
 Statement of Changes in Net Assets/Equity 6
 Statement of Cash Flows 7
 Statement of Comparative Budget and Actual Amounts (SCBAA) 8
 Notes to Financial Statements 10
II Audit Observations and Recommendations 26
III Status of Implementation of Prior Year’s Audit Recommendations 43
IV Appendices
1 - Statement of Financial Position (By Fund) 55
2 - Statement of Financial Performance (By Fund) 56
3 - Statement of Changes in Net Assets/Equity (By Fund) 57
4 - Statement of Cash Flows (By Fund) 58
5 - List of Implemented Projects 59
MUNICIPALITY OF KAWIT
STATEMENT OF FINANCIAL POSITION
As at December 31, 2018
(With Comparative Figures for CY 2017)
Note 2018 2017

ASSETS
Current Assets
Cash and Cash Equivalents 4 P 147,579,596.01 P 106,778,435.19
Receivables 5 15,982,014.22 45,576,542.36
Inventories 6 138,419.46 454,626.37
Prepayments and Deferred Charges 7,190,328.85 5,616,687.04
Total Current Assets 170,890,358.54 158,426,290.96
Non-Current Assets
Investments 7 1,030,713.70 1,030,713.70
Property, Plant and Equipment, Net 8 384,493,460.85 357,344,517.94
Total Non-Current Assets 385,524,174.55 358,375,231.64
Total Assets 556,414,533.09 P 516,801,522.60
LIABILITIES
Current Liabilities
Financial Liabilities 9 P 67,872,432.29 P 31,744,872.23
Inter-Agency Payables 10 44,866,699.35 41,356,310.10
Intra-Agency Payables 11 5,470,026.16 21,956,429.07
Trust Liabilities 12 11,769,509.81 11,814,662.21
Deferred Credits/Unearned Income 13 48,978,501.83 56,324,403.46
Total Current Liabilities 178,957,169.44 163,196,677.07
Non-Current Liabilities
Other Payables 14 6,614,471.25 6,614,471.25
Total Non-Current Liabilities 6,614,471.25 6,614,471.25
Total Liabilities 185,571,640.69 169,811,148.32
NET ASSETS/EQUITY
Government Equity 15 370,842,892.40 346,990,374.28
Total Liabilities and Net Assets/Equity P 556,414,533.09 P 516,801,522.60
(See Accompanying Notes to Financial Statements)
4
STATEMENT OF FINANCIAL PERFORMANCE
Note 2018 2017

Revenue
Tax Revenue 16 P 64,981,913.46 P 44,123,884.93
Share from Internal Revenue Collections 17 157,741,411.00 146,993,494.00
Service and Business Income 18 37,200,251.62 27,847,476.31
Shares, Grants and Donations 19 868,253.88 824,023.15
Other Income 254,941.35 262,535.42
Total Revenue 261,046,771.31 220,051,413.81
Less: Current Operating Expenses

Personnel Services 20 66,004,414.11 62,891,892.22
Maintenance and Other Operating Expenses 21 133,765,570.42 129,352,562.33
Non-Cash Expenses 22 14,917,106.26 14,152,437.48
Financial Expenses
Current Operating Expenses 214,687,090.79 206,396,892.03
Surplus (Deficit) from Current Operation 46,359,680.52 13,654,521.78

Add (Deduct):
Transfers, Assistance and Subsidy
Subsidy to National Government Agencies (13,224,704.00) 1,341,849.00
Subsidy to Other Local Government Units (3,756,551.70) 0.00
Subsidy to Other Funds (693,500.00) 0.00
Transfer of Unspent Current \year DRRM Funds (1,521,411.79) (1,380,396.01)
Surplus (Deficit) for the period P 27,163,513.03 P 13,615,974.77
5
STATEMENT OF CHANGES IN NET ASSETS/EQUITY
Note 2018 2017
Balance at January 1, 2018 P 346,990,374.28 P 316,185,649.14

Add (Deduct):
Prior Period Errors 23 (3,310,994.91) 17,188,750.37
Restated Balance 343,679,379.37 333,374,399.51
Add (Deduct)Changes in net assets/
equity during the year
Surplus(Deficit) for the Period 27,163,513.03 13,615,974.77
Total recognized revenue
and expenses for the period 27,163,513.03 13,615,974.77
Balance at December 31, 2018 P 370,842,892.40 P 346,990,374.28
6
STATEMENT OF CASH FLOWS
Note 2018 2017

Cash Flows from Operating Activities
Cash Inflows:
Collection from taxpayers P 83,586,141.60 P 57,519,295.11
Share from Internal Revenue Collections 157,741,411.00 146,993,494.00
Receipts from Business/Service Income 15,173,350.92 13,530,237.08
Other Receipts 77,336,240.99 58,414,432.32
Total Cash Inflows 333,837,144.51 276,457,458.51
Cash Outflows:
Payments of Expenses 53,838,717.09 32,927,237.23
Payments to suppliers and creditors 18,778,684.33 23,512,804.90
Payments to employees 82,047,168.84 79,175,971.68
Other Expenses 123,291,835.26 81,902,377.22
Total Cash Outflows 277,956,405.52 217,518,391.03
Net Cash Operating Activities 24 55,880,738.99 58,939,067.48
Cash Flows from Investing Activities 0.00 0.00

Cash Outflow
Purchase/Construction of Property,
Plant and Equipment 15,079,578.17 35,255,741.58
Total Cash Outflow 15,079,578.17 35,255,741.58
Net Cash Flows from Investing Activities (15,079,578.17) (35,255,741.58)
Total Cash Provided by Operating, Investing 40,801,160.82 23,683,325.90

and Financing Activities
Add:Cash at the beginning of the year 106,778,435.19 83,095,109.29
Cash at the End of the Year P 147,579,596.01 P 106,778,435.19
7
Municipality of Kawit
STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
Particulars Note Budgeted Amounts Difference

Difference Final
Original and Actual Amounts
Budget and Actual
25 Original Final Final Budget
Revenue
A. Local Sources
1. Tax Revenue
a.Tax Revenue - Property 48,814,226.70 48,814,226.70 0.00 22,812,287.05 26,001,939.65
b. Tax Revenue - Goods and Services 94,537,431.13 94,537,431.13 0.00 42,067,721.41 52,469,709.72
c. Other Local Taxes 7,303,300.52 7,303,300.52 0.00 101,905.00 7,201,395.52
Total Tax Revenue 150,654,958.35 150,654,958.35 0.00 64,981,913.46 85,673,044.89
2. Non-Tax Revenue
a. Service Income 78,654,636.41 78,654,636.41 0.00 19,035,777.70 59,618,858.71
b. Business Income 0.00 0.00 0.00 11,963,195.00 (11,963,195.00)
c.Other Income and Receipts 482,324.85 482,324.85 0.00 6,201,278.92 (5,718,954.07)
Total Non-Tax Revenue 79,136,961.26 79,136,961.26 0.00 37,200,251.62 41,936,709.64
B. External Sources
Share from National Internal Revenue Taxes (IRA) 157,741,411.00 157,741,411.00 0.00 157,741,411.00 0.00
Share from PCSO 1,000,000.00 1,000,000.00 0.00 868,253.88 131,746.12
Share from GOCCs 0.00 0.00 0.00 0.00 0.00
Grants and Donations 0.00 0.00 0.00 0.00 0.00
Total Revenues and Receipts 388,533,330.61 388,533,330.61 0.00 260,791,829.96 127,741,500.65
Expenditures
General Public Services
Personnel Services 49,059,025.96 49,059,025.96 0.00 37,340,071.84 11,718,954.12
Maintenance and Other Operating Expenses 118,338,858.68 118,338,858.68 0.00 84,861,708.38 33,477,150.30
Capital Outlay 11,718,500.00 11,718,500.00 0.00 2,590,828.83 9,127,671.17
Education
Personnel Services 2,600,000.00 2,600,000.00 0.00 0.00 2,600,000.00
Capital Outlay 3,689,734.43 3,689,734.43 0.00 613,900.00 3,075,834.43
Health, Nutrition and Population Control
Capital Outlay 700,000.00 700,000.00 0.00 450,000.00 250,000.00
Social Services and Social Welfare
Maintenance and Other Operating Expenses 5,507,414.11 5,507,414.11 0.00 829,722.61 4,677,691.50
Capital Outlay 218,000.00 218,000.00 0.00 132,500.00 85,500.00
8
Revenue
A. Local Sources
Economic Services
Capital Outlay 920,100.00 920,100.00 0.00 346,655.30 573,444.70
Other Purposes:
Debt Service
Financial Expenses
Amortization
LDRRMF
Capital Outlay 4,655,000.00 4,655,000.00 0.00 1,871,000.00 2,784,000.00
20% Development Fund
Maintenance and Other Operating Expenses 0.00 0.00 0.00 0.00 0.00
Capital Outlay 31,548,282.20 31,548,282.20 0.00 17,256,437.47 14,291,844.73
Allocation for Senior Citizens and PWD
Others
Personnel Services
Capital Outlay 5,560,000.00 5,560,000.00 0.00 5,464,441.00 95,559.00
Total Appropriations 401,217,144.72 401,217,144.72 0.00 256,123,710.53 145,093,434.19
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Profile
The Municipality of Kawit is located within the province of Cavite, Region IV-A
(CALABARZON) west of the Island of Luzon. It is particularly situated in the
northern part of the province and is bounded by Cavite City and Bacoor Bay
in the north, the City of Bacoor in the east, City of Imus in the southeast,
Municipality of General Trias in the south and the Municipality of Noveleta in
the west. It covers a total area of about 1,667.24 hectares based on the
cadastral survey which constitutes 1.2948 percent of the total area of the
Province of Cavite. It consists of 23 barangays and is classified as an urban
1st class municipality.
The local government unit is geared towards providing the best quality
service to clientele, particularly the constituents of Kawit. That the people
may be able to exercise their rights and provide the basic needs and initiate
economic developmental programs and projects by means of true public
service under a clean and safe environment.
The construction of the Cavite Expressway (Cavitex) makes the municipality

a few minutes away from Manila. It is expected that in a few years’ time,
Kawit shall be the next industrial zone in the province.
The key officials of the Municipality and the number of its personnel
complement are as follows:
a. Key Officials
City Mayor : Hon. Angelo Emilio G. Aguinaldo

City Vice-Mayor : Engr. Armando V. Bernal
Members of the Sanggunian:

1. Hon. Juan Ysmael R. Gandia
2. Hon. Medel E. Caimol
3. Hon. Gerardo B. Jarin
4. Hon. Edward Jr. R. Samala
5. Hon. Eman R. Tuazon
6. Hon. Jessica R. Peñaloza
7. Hon. Divinia R. Pulido
8. Hon. Simon Peter D. Victa
Municipal Administrator : Mr. Rey Victor S. Santos

Municipal Budget Officer : Ms. Desiree B. Encarnacion
Municipal Accountant : Ms. Ma. Theresa Lilibeth V. Chua
Municipal Treasurer : Ms. Agustina V. Laviña
Municipal General Service
Officer : Mr. Joseph Angelo A. Ipapo
Municipal Assessor : Mr. Florencio C. Avilla
10
b. No. of Personnel Complement
Permanent : 143
Temporary/Casual/Contractual/Job Order : 318
Elective Officials : 12
Coterminous : 10
Total 483
Note 2 - The consolidated financial statements of the Municipality of Kawit have been
prepared in accordance with and comply with the Philippine Public Sector
Accounting Standards (PPSAS). The consolidated financial statements are
presented in pesos, which is the functional and reporting currency of the
Municipality. The accounting policies have been applied starting the year
2015.
Note 3 - Summary of Significant Accounting Policies
3.1 Basis of Accounting
The consolidated financial statements are prepared on an accrual basis in

accordance with the Philippine Public Sector Accounting Standards (PPSAS).
3.2 Revenue Recognition
Revenue from Non-Exchange Transactions
Taxes, Fees and Fines
The Municipality recognizes revenues from taxes and fines when the event
occurs and the asset recognition criteria are met. To the extent that there is a
related condition attached that would give rise to a liability to repay the
amount, liability is recognized instead of revenue. Other non-exchange
revenues are recognized when it is improbable that the future economic
benefit or service potential associated with the asset will flow to the entity and
the fair value of the asset can be measured reliably.
Transfers from Other Government Entities
Revenues from non-exchange transactions with other government entities

are measured at fair value and recognized on obtaining control of the asset
(cash, goods, services and property) if the transfer is free from conditions and
it is probable that the economic benefits or service potential related to the
asset will flow to the Municipality and can be measured reliably.
The Municipality availed of the 5 – year transitional provision for the

recognition of Tax Revenue- Real Property and Special Education Tax. For
the first year, there will be no change in policy for the recognition of the
aforementioned tax revenue.
11
Revenue from Exchange Transactions
Rendering of services
The Municipality recognizes revenue from rendering of services by reference

to the stage of completion when the outcome of the transaction can be
estimated reliably. The stage of completion is measured by reference to labor
hours incurred to date as a percentage of total estimated labor hours.
Where the contract outcome cannot be measured reliably, revenue is

recognized only to the extent that the expenses incurred.
3.3 Property, Plant and Equipment
All property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses. Cost includes expenditure that is directly
attributable to the acquisition of the items. When significant parts of property,
plant and equipment are required to be replaced at intervals, the Municipality
recognizes such parts as individual assets with specific useful lives and
depreciates them accordingly. Likewise, when a major inspection is
performed, its cost is recognized in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognized in surplus or deficit as incurred.
Where an asset is acquired in a non-exchange transaction for nil or nominal
consideration the asset is initially measured at its fair value.
Depreciation on assets is charged on a straight-line basis over the useful life

of the asset.
Depreciation is charged at rates calculated to allocate cost or valuation of the

asset less any estimated residual value over its remaining useful life:
Public Infrastructures were not previously recognized in the books. The

Municipality availed of the 5-year transitional provision for the recognition of
the Public Infrastructure.
3.4 Financial Instruments
Financial Assets
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. After initial
measurement, such financial assets are subsequently measured at amortized
cost using the effective interest method, less impairment. Amortized cost is
calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the effective interest rate. Losses
arising from impairment are recognized in the surplus or deficit.
12
Financial Liabilities
Initial recognition and measurement
Financial liabilities within the scope of IPSAS 29 are classified as financial

liabilities at fair value through surplus or deficit or loans and borrowings, as
appropriate. The LGU determines the classification of its financial liabilities at
initial recognition.
All financial liabilities are recognized initially at fair value and, in the case of
loans and borrowings.
The Municipality’s Group’s financial liabilities include trade and other

payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification.
3.5 Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and cash at bank-
deposits on call and highly liquid investments with an original maturity of
three months or less, which are readily convertible to known amounts of cash
and are subject to insignificant risk of changes in value. For the purpose of
the consolidated statement of cash flows, cash and cash equivalents consist
of cash and short-term deposits as defined above, net of outstanding bank
overdrafts.
3.6 Inventories
Inventory is measured at cost upon initial recognition. To the extent that

inventory was received through non-exchange transactions (for no cost or for
a nominal cost), the cost of the inventory is its fair value at the date of
acquisition.
After initial recognition, inventory is measured at the lower of cost and net
realizable value. However, to the extent that a class of inventory is distributed
or deployed at no charge or for a nominal charge, that class of inventory is
measured at the lower of cost and current replacement cost.
Net realizable value is the estimated selling price in the ordinary course of
operations, less the estimated costs of completion and the estimated costs
necessary to make the sale, exchange, or distribution. Inventories are
recognized as an expense when deployed for utilization or consumption in
the ordinary course of operations of the Municipality.
3.7 Budget Information
The annual budget is prepared on the modified cash basis, that is, all planned
costs and income are presented in a single statement to determine the needs
13
of the LGU. As a result of the adoption of the Modified cash basis for
budgeting purposes, there are basis, timing or entity differences that would
require reconciliation between the actual comparable amounts and the
amounts presented as a separate additional financial statement in the
statement of comparison of budget and actual amounts. Explanatory
comments are provided in the notes to the annual financial statements; first,
the reasons for overall growth or decline in the budget are stated, followed by
details of overspending or underspending on line items.
3.8 Significant Judgements and Sources of Estimation Uncertainty
Useful lives and residual values
The useful lives and residual values of assets are assessed using the
following indicators to inform potential future use and value from disposal:
a) The condition of the asset based on the assessment of experts employed

by the LGU;
b) The nature of the asset, its susceptibility and adaptability to changes in

technology and processes;
c) The nature of the processes in which the asset is deployed; and
d) Changes in the market in relation to the asset
3.9 Financial Instruments – Financial Risk Management
Receivables
Receivables are amounts owed by consumers, and are presented net of

impairment losses. The LGU has a credit risk policy in place, and the
exposure to credit risk is monitored on an ongoing basis. The LGU is
compelled, by its constitutional mandate, to provide all of its residents with
basic minimum services, without recourse to an assessment of
creditworthiness. There were no material changes in the exposure to credit
risk and its objectives, policies and processes for managing and measuring
the risk during the year under review.
The LGU establishes an allowance for impairment that represents its

estimate of anticipated losses in respect of receivables.
Cash and cash equivalents
The LGU limits its exposure to credit risk by investing cash and cash
equivalents with only reputable financial institutions that have a sound credit
rating, and within specific guidelines set in accordance with the Sanggunian’s
approved investment policy. Consequently, the Municipality does not
consider there to be any significant exposure to credit risk.
14
Note 4 - Cash and Cash Equivalents
This account includes the following:
2018 2017
Cash on Hand
Cash Local Treasury P 3,346,748.73 P 1,478,129.98
Cash in Bank-Local Currency
Cash in Bank-Local Currnecy, Current Account 144,232,847.28 105,300,305.21
Total Cash and Cash Equivalent P 147,579,596.01 P 106,778,435.19
The Cash-Local Treasury amounting to P3,346,748.73 represents collection

during the last working day of the year which was deposited on January 02,
2018.
The Municipality’s bank balances totaling P147,579,596.01 include an amount of

P49,989,228.05 under the 20% Municipal Development Fund which must be
used on projects indicated at the Annual Investment Plan (AIP).
The Bank Reconciliation Statements for various bank accounts of the

Municipality of Kawit had been prepared to determine the correctness of Cash in
Bank account as of December 31, 2018. The reconciled balances are as
follows:
Fund LBP Account No. 2018 2017

General Fund 0312-1094-41 P 73,738,002.08 P 59,035,957.08
Special Education Fund 0312-1100-83 28,163,738.75 19,488,123.82
Trust Fund 0312-1003-84 41,084,126.81 25,553,714.38
TF-Special Account 0312-1098-69 1,097,379.64 1,222,509.93
Hospital Charges 0312-1104-74 91,700.00 0.00
Professional Fees 0312-1104-66 57,900.00 0.00
Total P 144,232,847.28 P 105,300,305.21
Note 5 – Receivables
This account consists of the following:
Account Title 2018 2017

Accounts Receivables P P
Real Property Tax Receivable 2,996,388.99 9,984,338.07
Special Education Tax Receivable 2,553,051.90 9,228,740.59
Due from LGUs 34,649.86 21,757.32
Due from Other Funds 5,320,426.16 21,956,429.07
Advances to Officers and Employees 2,864,100.00 2,171,980.00
Due from Officers and Employees 100.00 0.00
Receivables-Disallowances and Charges 15,529.82 15,529.82
Other Receivables 2,197,767.49 2,197,767.49
Total P 15,982,014.22 P 45,576,542.36
15
Due from Local Government Units under the General Fund in the amount of
P34,649.86 refers to expenses paid by the Municipality of Kawit in favor of the 23
barangays of Kawit. This consists of Rental Fee for the use of ECPAC Systems
Software and Office Supplies used in the preparation of Financial Reports of the
Barangay.
Due from Other Funds under the General Fund amounting to P216,900.01
pertains to the erroneous transfer of Landtax due to SEF. This was returned to
the General Fund in March 2019.
Due from Other Funds under the Special Education Fund amounting to
P16,542.19 pertains to SEF collection but was deposited under the General
Fund. This was corrected in March 2019.
Due from Other Funds under the Trust Fund amounting to P5,086,983.96
represents the General Fund operating expenses paid in previous years
amounting to P3,327,283.06, unexpended balance on 2018 MDRRM Fund which
was transferred to Trust Fund in January 2019 amounting to P1,732,600.90 and
the cost of check booklets amounting to P27,100.00.
The Advances to Officers and Employees account under the General Fund
and Trust Fund amounted to P2,864,100.00. The amount of P2,662,500.00
pertains to the Confidential Fund for the 4 th Quarter of 2018 which was liquidated
in January 2019. The amount of P32,400.00 refers to the balance under the Trust
Fund. Breakdown as follows:
Creditor 2018 2017

Atty. Quintin Magsinco P 7,000.00 P 7,000.00
Edwin Lagda 16,400.00 16,400.00
Angelo Emilio G. Aguinaldo 2,662,500.00 2,136,580.00
Antonio Napalan, Jr. 50,000.00 0.00
Flor Avila 13,480.00 12,000.00
Yolanda V. Labo 25,920.00 0.00
Virgilio Medina,Jr. 56,400.00 0.00
Adelina Rusit 32,400.00 0.00
Total P 2,864,100.00 P 2,171,980.00
The Other Receivables amounting to P2,197,767.49 as of December 31, 2018

pertains to various receivables accounts of the Municipality which have been
dormant for more than five years. The passage of SB Resolution No. 04-2016
series of 2016 dated August 2016 requesting authority from the Commission on
Audit to write off the non-moving receivables has been initiated for proper
approval prior to the preparation of adjusting journal entries.
16
Note 6 - Inventories
As of December 31, 2018, the total Inventory for Consumption has been
recognized in the corresponding expense account amounting to P 138,419.46
which pertains to the unused inventory balances. Breakdown as follows:
Account Title 2018 2017

Office Supplies Inventory 34,273.63 30,981.00
Accountable Forms, Plates and Stickers 4,215.00 99,836.54
Non-Accountable Forms Inventory 0.00 1,100.00
Drugs and Medicines Inventory 76,918.50 152,357.83
Medical, Dental and Laboratory Supplies 23,012.33 170,351.00
Total 138,419.46 454,626.37
Note 7- Investments
Guaranty Deposits of P1,030,713.70 pertains to MERALCO bill deposit.
Note 8 - Property, Plant and Equipment (net of Depreciation)
This consists of the following:
2018 2017
General Fund 376,160,734.50 351,114,810.43
Special Education Fund 8,332,726.35 6,229,707.51
Trust Fund 0.00 0.00
Total 384,493,460.85 357,344,517.94
General
Account Title 2017 Additions 2018

Land P 136,205,886.67 P 0.00 P 136,205,886.67
Land Improvements, Aquaculture Structures 52,057,914.62 1,285,611.71 53,343,526.33
Road Networks 11,210,942.95 0.00 11,210,942.95
Flood Control Systems 13,194,377.12 990,887.52 14,185,264.64
Parks, Plazas and Monuments 4,133,857.68 468,665.27 4,602,522.95
Other Infrastructure Assets 34,355,709.90 36,247,426.91 70,603,136.81
Buildings 61,633,173.51 0.00 61,633,173.51
School Buildings 636,203.06 0.00 636,203.06
Hospitals and Health Centers 1,022,721.00 0.00 1,022,721.00
Markets 2,111,275.39 0.00 2,111,275.39
Other Structures 22,805,145.38 810,640.00 23,615,785.38
Machinery 166,683.00 0.00 166,683.00
Office Equipment 2,026,557.74 1,238,201.00 3,264,758.74
Information and Communication Tech. Equip. 16,484,340.88 655,330.75 17,139,671.63
Communication Equipment 550,259.75 -21,800.00 528,459.75
Disaster response anc Rescue Equipment 1,956,678.00 573,000.00 2,529,678.00
Military,Police and Security Equipment 0.00 2,216,290.00 2,216,290.00
Medical Equipment 762,334.00 0.00 762,334.00
17
Sports Equipment 565,726.00 184,112.00 749,838.00
Other Machinery and Equipment 14,495,909.00 61,800.00 14,557,709.00
Motor Vehicles 16,993,452.71 2,874,600.00 19,868,052.71
Watercrafts 80,000.00 0.00 80,000.00
Other Transportation Equipment 2,200.00 0.00 2,200.00
Furniture and Fixtures 20,754,292.57 1,543,171.33 22,297,463.90
Books 9,225.00 0.00 9,225.00
Construction in Progress-Infrastructure Assets 17,757,905.28 (10,123,199.00) 7,634,706.28
Other Property, Plant and Equipment 177,783.25 0.00 177,783.25
Total Property, Plant and Equipment 432,150,554.46 39,004,737.49 471,155,291.95
Less: Accumulated Depreciation (81,035,744.03) (13,958,813.42) (94,994,557.45)
Net Cost P 351,114,810.43 P 25,045,924.07 P 376,160,734.50
Special Education Fund
Account Title 2017 Additions 2018

Land Improvements, Aquaculture Structures P 16,510.00 P 0.00 P 16,510.00
Water Supply Systems 79,885.00 0.00 79,885.00
School Buildings 5,267,954.49 2,115,415.02 7,383,369.51
Other Structures 57,999.50 0.00 57,999.50
Office Equipment 2,931,147.92 613,900.00 3,545,047.92
Information and Communication Tech. Equipment 1,922,231.00 0.00 1,922,231.00
Sports Equipment 58,525.00 0.00 58,525.00
Technical and Scientific Equipment 101,250.00 0.00 101,250.00
Furniture and Fixtures 3,497,379.48 0.00 3,497,379.48
Books 103,801.00 0.00 103,801.00
Total Property, Plant and Equipment 14,036,683.39 2,729,315.02 16,765,998.41
Less: Accumulated Depreciation (7,806,975.88) (626,296.18) (8,433,272.06)
Net Cost P 6,229,707.51 P 2,103,018.84 P 8,332,726.35
Note 9 - Financial Liabilities
These include the following:
2018 2017
Accounts Payable P 65,259,104.30 P 29,435,027.04
Due to Officers and Employees 2,613,327.99 2,309,845.19
Total P 67,872,432.29 P 31,744,872.23
Accounts Payable pertains to the amount due to suppliers and other creditors. A
reclassification of account was made to correct the account which was
erroneously recorded as Accounts Payable but should be Due to Officers and
Employees during the previous year.
18
Note 10 - Inter-Agency Payables
This is composed of the following:

2018 2017
Due to BIR P 3,618,467.50 P 2,959,394.52
Due to GSIS 1,234,647.59 892,506.40
Due to Pag-IBIG 167,988.28 136,641.83
Due to PhilHealth 86,497.41 64,087.20
Due to NGAs 32,304,397.07 34,442,841.57
Due to GOCCs 3,950.00 979,329.68
Due to LGUs 7,450,751.50 1,881,508.90
Total P 44,866,699.35 P 41,356,310.10
Due to BIR account under the General Fund amounting to P365,703.47

represents the amount deducted from the salaries of officials and employees
remitted in January 2019 while the amount of P2,963,924.50 represents the
unremitted BIR deductions from suppliers.
Ageing of Due to BIR are as follows:

2018 2017
60 DAYS PAST DUE 1,662,843.86 1,303,375.85
120 DAYS PAST DUE 0.00 0.00
240 DAYS PAST DUE 0.00 0.00
OVER 240 DAYS 1,666,784.11 1,656,018.67
TOTAL 3,329,627.97 2,959,394.52
Due to BIR account under the Special Education Fund (SEF) and Trust Fund
(TF) amounting to P225,637.39 and P 63,202.14, respectively, represents the
unremitted BIR deductions from suppliers as of December 31, 2018. Only the
amount under the SEF was remitted on January 10, 2019.
Due to GSIS, Pag-ibig and Philhealth under the General Fund amounting to
P1,489,133.28 represents the amounts deducted from the salaries of officers and
employees which was also remitted in January 2019.
Due to NGAs account under the General Fund amounting to P1,419,186.61

consists of the 5% share for the Bureau of Treasury on Building Permit
Collections and to unexpended balances on grants from various national
government agencies. The amount of P 30,885,210.46 under the Trust Fund
pertains to unexpended balances on various projects like the BUB programs from
2014 to 2017, DILG- Local Government Support Fund and PCF, Assistance to
Disadvantaged Municipalities (ADM) for CY 2017, Assistance to Municipalities for
CY 2018, DOH, DA and DSWD – Supplemental Feeding Program.
Due to LGUs account under the General Fund and SEF includes the Provincial
and Barangay Shares on Real Property Taxes which was remitted in February
2019.
19
Note 11– Intra Agency Payables
2018 2017
General Fund P 5,103,526.15 P 21,956,429.07
Special Education Fund 173,300.01 0.00
Trust Fund 193,200.00 0.00
Total P 5,470,026.16 P 21,956,429.07
Note 12 - Trust Liabilities
This is comprised of the following:
2018 2017
Trust Liabilities-DRRMF P 6,711,183.34 P 6,711,183.34
Bail Bonds Payable 88,336.33 127,321.83
Guaranty/Security Deposits Payable 4,969,990.14 4,976,157.04
Total P 11,769,509.81 P 11,814,662.21
The Municipal Disaster Risk Reduction Management Fund (MDRRM Fund)

under the General Fund amounting to P 549,865.68 represents the unexpended
balance on the continuing appropriations in 2012 and 2015 which was not
transferred to the Trust Fund.
The amount of P6,161,317.66 under the Trust Fund is the MDRRM Fund
maintained and shall be utilized according to the Continuing Appropriations Plan
prepared by the MDRRMC and duly approved by the Local Chief Executive.
Bail Bonds Payable in the amount of P88,336.33 represents the amounts

received for payment of bid documents and Cash Bond by prospective bidders
while Performance payments by winning bidders.
Guaranty/Security Deposits Payable amounting to P4,969,990.14 represents

payments for retention fee on various completed projects.
Note 13 – Deferred Credits/Unearned Income
Deferred RPT and Special Education Tax represent the remaining balance on
RPT/SET receivable set-up in the beginning of the year.
Note 14 – Other Payables

Other Payables amounting to P6,614,471.25 pertains to payables due to various
suppliers and creditors from previous years’ transactions.
20
Note 15 – Government Equity
2018 2017
Beginning Balance P 346,990,374.28 P 316,185,649.14
Add (Deduct)
Prior Period Errors (3,310,994.91) 17,188,750.37
Restated Balance 343,679,379.37 333,374,399.51
Add (Deduct) Changes in Net Assets/
Equity during the year
Surplus(Deficit) for the period 27,163,513.03 13,615,974.77
Ending Balance P 370,842,892.40 P 346,990,374.28
Note 16 - Tax Revenue
This consist of the revenues generated from Individuals and Corporations,

Property, Goods and Services and Fines and Penalties. Breakdown as follows:
2018 2017
Tax Revenue
Community Tax P 1,181,817.05 P 1,301,378.69
Property
Real Pproperty Tax-Basic 10,252,940.95 6,920,212.36
Less: Discount on Real Property Tax-Basic (694,537.07) (495,042.27)
Special Education Tax 11,487,448.56 7,841,132.49
Less: Discount on Special Education Tax (126,308.96) (618,771.63)
Goods and Services
Business Tax 40,480,331.86 26,779,974.38
Franchise Tax 405,572.50 407,650.00
Other Local Taxes 72,430.00 69,860.00
Fines and Penalties
Tax Revenue-Fines and Penalties-Property Taxes 1,892,743.57 1,917,490.91
Tax Revenue-Fines and Penalties-Other Taxes 29,475.00 0.00
Total Tax Revenues P 64,981,913.46 P 44,123,884.93
Note 17 – Share from Internal Revenue Collections
The Municipality of Kawit received a total amount of P157,741,411.00 from share

of the Internal Revenue Collections of the National Government.
Note 18 – Business and Service Income
The Business and Service Income consists of the following:
21
2018 2017
Service Income
Permit Fees P 12,599,004.23 P 9,136,943.92
Registration Fees 1,227,095.00 990,780.75
Clearance and Certification Fees 2,360,184.55 2,111,472.00
Inspection Fees 349,040.00 302,715.00
Fees for Sealing and Licensing of Weights
and Measures 55,080.00 59,100.00
Fines and Penalties-Service Income 419,224.12 395,308.58
Other Service Income 2,026,149.80 2,102,836.50
Business Income
Rent Income 1,500,000.00 0.00
Parking Fees 344,560.00 188,950.00
Receipts from Market Operation 10,005,335.00 9,993,489.90
Receipts from Cemetery Operation 113,300.00 73,900.00
Net Sales Revenue 0.00 4,577.66
Garbage Fees 5,091,936.92 1,522,750.00
Hospital Fees 1,025,093.00 871,886.00
Fines and Penalties-Business Income 84,249.00 92,766.00
Total Service and Business Income 37,200,251.62 27,847,476.31
Note 19 – Shares, Grants and Donations

2018 2017
Share from PCSO P 868,253.88 P 724,023.15
Grants and Donations in Cash 0.00 100,000.00
Total P 868,253.88 P 824,023.15
Note 20 – Personal Services
2018 2017
Personnel Services
Salaries and Wages-Regular P 38,429,962.85 P 35,289,736.60
Salaries and Wages-Casual/Contractual 0.00 1,033,476.19
Other Compensation
Personnel Economic Relief Allowance (PERA) 3,902,000.00 3,892,000.00
Representation Allowance (RA) 2,116,497.50 2,050,915.00
Transportation Allowance (TA) 2,028,988.95 2,050,915.00
Clothing/Uniform Allowance 830,000.00 835,000.00
Productivity Incentive Allowance 810,000.00 806,000.00
Honoraria 0.00 0.00
Hazard Pay 199,500.00 218,500.00
Longevity Pay 70,000.00 180,000.00
Overtime and Night Pay 1,590,501.15 1,055,188.19
Year End Bonus 3,298,993.40 4,343,380.05
Cash Gift 810,000.00 813,500.00
Other Bonuses and Allowances 3,168,192.50 0.00
Personnel Benefits Contributions
Life and Retirement Insurance Contributions 4,568,648.96 4,230,586.53
Pag-IBIG Contributions 764,653.38 699,509.57
PhilHealth Contributions 487,541.03 392,575.00
Employees Compensation Insurance Premiums 184,617.98 186,763.27
Other Personnel Benefits
Terminal Leave Benefits 2,324,973.41 4,291,449.98
Other Personnel Benefits 419,343.00 522,396.84
Total P 66,004,414.11 P 62,891,892.22
22
Note 21 – Maintenance and Operating Expenses
This is composed of the following:
2018 2017
Regular Maintenance and Operating Expenses
Travelling Expenses
Travelling Expenses-Local P 1,281,305.83 P 1,264,105.48
Travelling Expenses-Foreign 0.00 0.00
Training and Scholarship Expenses
Training Expenses 7,630,138.98 3,924,111.24
Supplies and Materials Expenses
Office Supplies Expenses 7,294,957.77 4,090,388.84
Accountable Forms Expenses 322,085.54 152,169.55
Non-Accountable Forms Expenses 33,319.00 15,580.00
Drugs and Medicines Expenses 759,364.70 574,253.31
Medical, Dental and Laboratory Supplies Expenses 678,809.10 135,077.97
Fuel, Oil and Lubricants Expenses 2,320,300.43 3,044,803.25
Textbooks and Instructional Materials Expenses 0.00 0.00
Other Supplies Expenses 7,230,121.60 1,628,015.00
Utility Expenses
Water Expenses 384,758.94 334,092.42
Electricity Expenses 6,572,355.05 6,111,249.48
Communication Expenses
Telephone Expenses 1,578,866.33 1,611,294.59
Internet Subscription Expenses 7,085.25 6,723.90
Survey, Research, Exploration and Development Expenses
Survey Expenses 52,000.00 0.00
Confidential, Intelligence, Extraordinary and Miscellaneous Expenses
Confidential Expenses 7,987,500.00 6,620,000.00
Extraordinary Miscellaneous Expenses 0.00 1,632.00
Contracted Services
Auditing Services 0.00 0.00
Consultancy Services 991,500.00 5,800,000.00
Environment/Sanitary Services 28,469,792.75 27,826,667.79
Other Professional Services 3,536,008.00 0.00
Janitorial Services 2,280,983.65 1,931,626.96
Security Services 7,247,556.34 1,802,842.36
Other General Services 13,167,681.65 10,382,811.11
Repairs and Maintenance
Repairs and Maintenance-Infrastructure Assets 270,262.53 110,166.57
Repairs and Maintenance-Buildings and Other Structures 1,237,512.02 7,069,011.02
Repairs and Maintenance-Machineries and Equipment 375,466.75 329,163.50
Repairs and Maintenance-Transportation Equipment 1,654,073.80 1,567,233.08
Repairs and Maintenance-Other Property, Plant and Equipment 0.00 135,265.50
23
Taxes, Insurance Premiums and Other Fees
Taxes, Duties and Licenses 18,167.62 35,638.95
Fidelity Bond Premiums 139,096.50 85,746.00
Insurance Expenses 1,001,420.36 820,663.93
Other Maintenance and Operating Expenses
Advertising Expenses 264,614.00 357,440.00
Printing and Publication Expenses 0.00 0.00
Representation Expenses 6,834,344.00 9,379,724.56
Rent Expenses 1,612,227.37 287,600.00
Membership Dues and Contributions to Organizations 289,790.00 76,800.00
Donations 20,158,615.97 31,831,937.75
Other Maintenance and Operating Expenses 83,488.59 8,726.22
Total P 133,765,570.42 P 129,352,562.33
Note 22 – Non-Cash Expenses
2018 2017
Depreciation and Amortization
Depreciation-Land Improvements 495.30 495.30
Depreciation-Infrastructure Assets 3,891,838.18 3,691,432.62
Depreciation-Buildings and Structures 4,317,647.21 4,196,647.79
Depreciation-Machinery and Equipment 4,616,026.33 4,625,792.10
Depreciation-Transportation Equipment 1,510,769.94 1,081,597.02
Depreciation-Furniture, Fixtures and Books 564,328.81 540,472.16
Depreciation-Other PPE 16,000.49 16,000.49
Total 14,917,106.26 14,152,437.48
Note 23 – Prior Period Errors
This includes the following:
Unrecorded Auction Sale on PPE 1,522,825.75

Other adjustments on prior year transactions (4,833,820.66)
Total P (3,310,994.91)
24
Note 24 - Reconciliation of Net Cash Flows from Operating Activities to Surplus
General Fund SEF Trust Fund Total

Surplus/(Deficit) P 20,645,341.03 P 6,518,172.00 0.00 27,163,513.03
Non-cash transactions
Depreciation 13,958,813.42 958,292.84 0.00 14,917,106.26
Income/Expense charged
0.00 19,440.00 0.00 19,440.00
other than Operating
(Increase)/Decrease in
5,706,238.49 5,793,809.64 16,837,395.11 28,337,443.24
Current Assets
(24,294,599.32) (3,061,311.68) 0.00 (27,355,911.00)
Non-Current Assets
18,247,447.65 (854,792.31) (1,282,512.97) 16,110,142.37
Liabilities
Adjustments in Equity (3,642,994.57) 331,999.66 0.00 (3,310,994.91)
Net Cash from Operating
Activities P 30,620,246.70 P 9,705,610.15 P 15,554,882.14 55,880,738.99
Note 25 - Reconciliation between the actual amounts on a comparative basis as

presented in the Statement of Comparison of Budget and Actual Amounts and
Statement of Financial Performance for the Year Ended December 31, 2018
Personnel
Income Services MOOE Capital Outlay
General Fund
Statement of Comparison of
Budget and Actual Amounts P 260,791,829.96 P 64,437,930.84 P 162,960,017.09 P 28,725,762.60
Basis Differences:
Income not considered budgetary items (19,196,167.49) 0.00 0.00 0.00
Receipts not considered as income 254,941.35 0.00 0.00 0.00
Budgetary items not considered
as expenses 0.00 0.00 0.00 0.00
Non-cash expenses 0.00 0.00 14,917,106.26 0.00
Capital Expenditures 0.00 0.00 0.00 (28,725,762.60)
Timing Differences:
Unconsumed Inventories
charged to current
appropriations 0.00 0.00 (138,419.46) 0.00
Commitments (Obligated
but not billed) 0.00 1,566,483.27 (29,056,027.21) 0.00
Per Statement of Financial
Performance P 241,850,603.82 P 66,004,414.11 P 148,682,676.68 P (0.00)
25
PART II – AUDIT OBSERVATIONS AND
RECOMMENDATIONS
AUDIT OBSERVATIONS AND RECOMMENDATIONS
1. The correctness and reliability of the year-end balances of the various Property,
Plant and Equipment (PPE) accounts totaling P487,921,290.36 could not be
established due to the continued inability of both the Accounting and the General
Services Office to reconcile their records, which posted a difference in balances
of P53,166,748.87 as of December 31, 2018, contrary to Section 114 of the Manual
on the New Government Accounting System (MNGAS) for Local Governments
Units (LGUs), Volume l.
Section C.3, Chapter V of the Manual on Property Custodianship provides that after the
physical inventory taking, the Inventory Committee shall reconcile the results of the
count with the records of the Property Office and the Accounting Office. The inventory
listing of the equipment shall be checked with property cards maintained by the
Accounting Office, and the totals thereof shall be checked with property cards
maintained by the Accounting Office, and the totals thereof shall be compared with those
in the general ledger.
Paragraph 4 of Section 114 of the MNGAS for LGUs, Volume l likewise provides that the
property balances between the accounting and property records should always be
reconciled. Further, Section 491 of the Government Accounting and Auditing Manual
(GAAM), Volume l states that all discrepancies between the physical and book must be
cleared and investigated.
In the monitoring of the Municipality’s compliance with previous years’ audit

recommendations, we determined that there was still a net discrepancy of
P53,166,748.87 between the RPCPPE and the General Ledger balances of several PPE
accounts, thus we could still not fully establish the reliability of the reported balances of
the PPE accounts in the Statement of Financial Condition of the Municipality as of
December 31, 2018. The details of this observation are presented below.
Per
PPE Account Per Books GSO/RPCPPE Variance
(At Cost)
Land and Land Improvements
Land 136,205,886.67 136,205,886.67 0.00
Land Improvements
Land Improvement and Agricultural Structures 52,074,424.62 0.00 52,074,424.62
Other Land Improvements 1,285,611.71 1,285,611.71 0.00
Infrastructure Assets
Road Networks 11,210,942.95 11,210,942.95 0.00
Flood Control System 14,185,264.64 14,185,264.64 0.00
Water Supply System 79,885.00 0.00 79,885.00
Parks, Plazas and Monuments 4,602,522.95 4,602,522.95 0.00
Other Infrastructure Assets 70,603,136.81 70,602,256.81 880.00
26
Building and Other Structures
Buildings 61,633,173.51 61,633,173.51 0.00
School Buildings 8,019,572.57 7,257,929.07 761,643.50
Hospitals and health Centers 1,022,721.00 1,022,721.00 0.00
Markets 2,111,275.39 2,111,275.39 0.00
Other structures 23,673,784.88 23,615,785.38 57,999.50
Machinery and Equipment
Machinery 166,683.00 166,683.00 0.00
Office Equipment 6,809,806.66 6,809,806.66 0.00
Information Communication Technology Equipment 19,061,902.63 19,061,902.63 0.00
Communication Equipment 528,459.75 528,459.75 0.00
Disaster Response and Rescue Equipment 2,529,678.00 2,529,678.00 0.00
Military Police and Security Equipment 2,216,290.00 2,216,290.00 0.00
Medical Equipment 762,334.00 762,334.00 0.00
Sports Equipment 808,363.00 749,838.00 58,525.00
Technical and Scientific Equipment 101,250.00 0.00 101,250.00
Othr Machinery and Equipment 14,557,709.00 14,557,709.00 0.00
Motor Vehicles 19,868,052.71 19,868,052.71 0.00
Watercrafts 80,000.00 80,000.00 0.00
Other Transportation Equipment 2,200.00 2,200.00 0.00
Furniture and Fixtures 25,794,843.38 25,866,503.13 (71,659.75)
Books 113,026.00 9,225.00 103,801.00
Construction in Progress
Construction in Progress-Infrastructure Assets 7,634,706.28 7,634,706.28 0.00
Other Property Plant and Equipment
Other Property Plant and Equipment 177,783.25 177,783.25 0.00
Total Property Plant and Equipment 487,921,290.36 434,754,541.49 53,166,748.87
We reiterated our previous year’s recommendation that the Municipal Mayor direct
the Municipal Accountant and the Municipal General Service Officer to exert
efforts to analyze and reconcile the discrepancy of P53,166,748.87 between the
accounting records and the RCPPE and make the adjustments where necessary.
Management’s Comment:
The GSO Officer and the Municipal Accountant assured that they will continue the
process of reconciling their records. Piecemeal submission of RPCPPE will also be
avoided.
2. Real Property Tax (RPT) and Special Education Tax (SET) Receivables as of
December 31, 2018 reflected a balance of P2,996,388.99 and P2,553,051.90,
respectively, or a total of P5,549,440.89 while the Certified List of RPT
Delinquencies, prepared by the Municipal Treasurer showed a total of
P21,671,332.47 inclusive of penalty of P9,904,850.83 hence, a difference of
P16,121,891.58 between the accounting and treasury records, thereby casting
27
doubt on the accuracy and reliability of the reported balances of the RPT and SET
Receivable accounts.
Section 20 of the Manual on the New Government Accounting System (NGAS) for Local
Government Units (LGUs), Volume I provides that RPT and SET Receivables shall be
established at the beginning of the year based on Real Property Tax Account
Register/Taxpayer’s index card. At the beginning of the year, the Treasurer shall furnish
the Chief Accountant of a duly certified list showing the name of taxpayers and the
amount due and collectible during the year. Based on the list, the Chief Accountant shall
draw a Journal Entry Voucher to record the debit to RPT/SET Receivable and credit to
Deferred RPT/SET Income.
Section 255 of Republic Act No. 7160 or the Local Government Code of 1991, on the
other hand, states that in case of failure to pay the basic real property tax or any other
tax levied under the Code upon the expiration of the periods provided, or when due, as
the case may be, shall subject the taxpayer to the payment of interest at the rate of two
percent (2%) per month on the unpaid amount or fraction thereof, until the delinquent tax
shall have been fully paid. Provided, however, that in no case shall the total interest on
the unpaid tax or portion thereof exceed thirty-six (36) months.
Comparison of the year-end balances of accounts RPT and SET Receivables with the
Certified List of RPT Delinquencies as of December 31, 2018 showed a difference of
P16,121,891.58 presented as follows:
Per Treasury Record: RPT SET Total

Basic Tax P 5,883,240.82 P 5,883,240.82 P 11,766,481.64
Penalty 4,952,425.41 4,952,425.42 9,904,850.83
Total P 10,835,666.23 P 10,835,666.24 P 21,671,332.47
Per Accounting Record:
Basic Tax 2,996,388.99 2,553,051.90 5,549,440.89
Difference P (7,839,277.24) P (8,282,614.34) P (16,121,891.58)
The unreconciled difference of RPT/SET Receivables between the accounting records

and the Certified List of Delinquencies of the Municipal Treasurer’s Office cast doubt on
the correctness and validity of the balances of the RPT and SET Receivable accounts at
year-end.
Further, it was also noted that the RPT and SET Receivable Accounts amounting to
P2,996,388.99 and P2,553,051.90, respectively, were not reconciled and have a
difference of P443,337.09. Consequently, the Deferred RPT and SET Income accounts
were also not reconciled with its corresponding RPT and SET Receivable accounts.
We recommended that the Municipal Mayor direct the Municipal Accountant to

reconcile the accounting records with that of the Treasury and make the
necessary adjustment to reflect the correct balance of the RPT and SET
Receivables and Deferred RPT and SET Income based on the certified list of
taxpayers submitted by the Municipal Treasurer.
28
Concerned officials assured the continuous reconciliation between the records of the
Accounting with that of the Treasury.
3. The cash position of the Municipality having a total current balance of

P75,402,458.34 (Cash and Cash Equivalents) for the General Fund (GF) was not
enough to cover for the total current liabilities of P106,623,452.70 and the
unexpended balance of the 20% Development Fund of P30,265,362.01 as at end of
the year resulting in cash deficit of P61,486,356.37, contrary to Section 337 of
Republic Act (RA) No. 7160 and Section 4(3) of Presidential Decree (PD) No. 1445,
and adversely affecting the payments of current liabilities, remittances of inter-
agency payables and failing to provide cash back-up for other trust liabilities.
Section 337 of RA No. 7160 provides:
“Disbursements in accordance with appropriations in the approved annual

budget may be made from any local fund in the custody of the treasurer, but
the total disbursements from any local fund shall in no case exceed fifty
percent (50%) of the uncollected estimated revenue accruing to such local
fund in addition to the actual collections. Provided, however, that no cash
overdraft in any local fund shall be incurred at the end of the fiscal year.
xxx…
Any overdraft which may be incurred at the end of the year in any local fund
shall be covered with the first collections of the immediate succeeding fiscal
year accruing to such local fund.”
An overdraft exist when there is withdrawal in excess of the funds available and/or when
funds intended for specific purposes have been used or diverted to purpose other than
those which they are intended.
Section 4(3) of Presidential Decree (PD) No. 1445 provides that trust funds shall be
available and may be spent only for the specific purpose for which the trust was created
or the funds received.
As of December 31, 2018, accounts in the Statement of Financial Position of the

General Fund had the following balances:
Account Title General Fund

Cash and Cash Equivalents
Cash - Local Treasury P 1,664,456.26
Cash in Bank - LCCA 73,738,002.08
Total Cash and Cash Equivalents 75,402,458.34
Current Liabilities
Inter-Agency Payables
Due to BIR 3,329,627.97
29
Due to GSIS 1,234,647.59
Due to Pag-IBIG 167,988.28
Due to PhilHealth 86,497.41
Due to NGAs 1,419,186.61
Due to LGUs 4,197,207.95
Intra-Agency Payables
Due to Other Funds 5,103,526.15
Trust Liabilities
Guaranty Deposits Payable 4,249,538.93
Unexpended Balance of DRRMF:
CYs 2012 and 2018 2,071,277.47
Bail Bond Payable 40,224.19
Financial Liabilities
Accounts Payable 62,479,875.78
Due to Officers and Employees 2,611,782.55
Other Deferred Credits 19,632,071.82
Total Current Liabilities 106,623,452.70
Unexpended Balance of 20% Dev't. Fund
for CY's 2016-2018 30,265,362.01
Cash Overdraft / Deficit P (61,486,356.37)
Analysis of the above table revealed that the total cash and cash equivalents balance of
P75,402,458.34 were not enough to cover the total current liabilities of P106,623,452.70
and the unexpended balance of the 20% Development Fund of P30,265,362.01,
resulting in cash deficit of P61,486,356.37 at year-end.
The incurrence of cash deficits, which is not in line with sound financial management, is
contrary to Section 4(3) of PD No. 1445. It can be gleaned from the above table that the
Municipality even used those funds withheld and due to other government agencies as
well as other trust funds by the presence of balances of relevant payables. In effect the
Municipality may not be able to pay its current liabilities, remit inter-agency payables and
provide adequate cash back-up for its other trust liabilities.
Further analysis revealed that among the reasons for the incurrence of cash deficit is
that the Municipality did not meet their target collections for the last three years, to wit:
Target Collection
Year
per Budget Actual Collection Collection Deficit
2018 P 364,126,217.26 P 248,380,983.27 P 115,745,233.99

2017 283,213,977.29 211,763,768.64 71,450,208.65
2016 207,176,667.51 181,883,818.90 25,292,848.61
Total P 854,516,862.06 P 642,028,570.81 P 212,488,291.25
30
As shown above, the total collection deficit for the last three years amounted to
P212,488,291.25 as only P642,028,570.81 was collected from its estimated target of
P854,516,862.06, which resulted in cash deficit.
We recommended that the Municipal Mayor instruct the:
a. Municipal Treasurer to prepare the Daily Cash Position Report to serve as

guide in certifying that funds are available to ensure that all
disbursements have cash back-up; and to adopt strategies to increase
revenues/collections;
b. Municipal Budget Officer, Municipal Accountant, and Municipal Treasurer

to exercise diligence, prudence, and proper control in the disposition of
the Municipality’s funds and limit expenditures within the total income
realized and collected during the year to avoid incurrence of cash
overdraft.
The Municipal Accountant told the Audit Team that the balance of Accounts Payable
which was carried forward from the previous administration was bloated. The Audit
Team and Management agreed to write-off payable balances which are not considered
valid claims.
4. Under-collections totaling P250,488.13 were incurred due to various deficiencies /

discrepancies noted in the computation of penalties, discounts and tax due on
Real Property Tax payments for the period January to March 2018, contrary to
Sections 233(b), 251 and 255 of Republic Act (RA) 7160 and the Revised Revenue
Code of the Municipality of Kawit dated January 2017.
Section 233(b) of RA 7160-On the rates of levy of RPT tax provides that:
(b) In case of a city or a municipality-at the rate not exceeding two per cent (2%) of
the assessed value of the real property.
Section 251. Tax Discount for Advanced Prompt Payment- If the basic real
property tax and the additional tax accruing to the Special Education Fund
(SEF) are paid in advance in accordance with the prescribed schedule of
payment as provided under Section 250, the Sanggunian concerned may grant
a discount not exceeding twenty percent (20%) of the annual tax due.
Section 255. Interest on Unpaid Real Property Tax.- In case of failure to pay the
basic real property tax or any other tax levied under this Title upon the expiration
of the periods as provided in Section 250, or when due, as the case may be, shall
subject the taxpayer to the payment of interest at the rate of two percent (2%) per
month on the unpaid amount or a fraction thereof, until the delinquent tax shall
have been fully paid: Provided, however, that in no case shall the total interest on
the unpaid tax or portion thereof exceed thirty-six (36) months.
31
Also, the Revised Revenue Code of the Municipality states the same provisions as
above. With regards to discounts for advance and prompt payments, the Municipality
provided the following table:
Percentage Term Period

20 % discount Full if paid up to January 20
10 % discount Full if paid up to March 31
10 % discount Installment (1st) if paid on or before January 20 (1st qtr.)
10 % discount Installment (2nd) if paid on or before April 20 (2nd qtr.)
10 % discount Installment (3rd) if paid on or before July 20 (3rd qtr.)
10 % discount Installment (4th) if paid on or before October 20 (4th qtr.)
Audit of sample official receipts (ORs) on RPT disclosed inconsistencies or lapses on

the part of the Municipality’s Collecting Officers in the application of the provisions of RA
7160 and their Revenue Code. Using the January to March, 2018 ORs as samples, we
determined that the Municipality did not impose interests on at least 4 taxpayers despite
significant delay in the settlement of their accounts. Further, there were also instances
where the penalties imposed were lower while discounts given were higher than what
should be. Errors in the computation of taxes due were also noted. These deficiencies
were summarized below:
Period Amount of
No. of O.R.'s Total Amount Covered Undercollection Remarks
4 172,277.40 2015-2017 14,510.09 Penalty not imposed.
8 30,177.72 2018 886.69 Discount applied is 20 per cent instead of 10 per cent.
4 443.50 2018 561.79 Errors in computation of tax due.
62 1,702,168.98 2000-2017 234,529.57 Errors in computation of penalties.
250,488.14
We recommended that the Municipal Mayor direct the Municipal Treasurer to issue
a notice to concerned taxpayers requesting for additional payments to settle the
unpaid/errors in computation of interests on delinquent real property taxes or
refund the excess discounts given, to prevent the issuance by the Audit Team of
Notice of Charge against concerned Collecting Officers in the amount of
P250,488.14.
We also recommended that the Municipal Treasurer revisit the tax collections in
2018 and review the computation made starting on the top taxpayers in order to
collect from those with under-assessed or erroneously computed taxes.
Otherwise, Notices of Charge will be issued for any under-collection found in
audit.
Henceforth, we recommended that the Municipal Mayor direct the Municipal

Treasurer to install effective controls to ensure correct imposition or computation
of penalties or discounts in the payment of taxes.
32
The Municipal Treasurer stated that this involved system errors. They agreed to issue
notices on the taxpayers with under-assessed properties and under collected taxes.
5. Taxes withheld by the Municipality under the General Fund amounting to

P3,329,627.97 remained unremitted to the Bureau of Internal Revenue (BIR) as of
December 31, 2018, contrary to BIR Regulation No. 2-98, thus, exposing the
Municipality to payment of penalties and surcharges on late remittances.
BIR Regulation No. 2-98 dated April 17,1998 mandates that taxes withheld shall be paid
on or before the tenth (10 th) of the month following the month in which withholding was
made except for taxes withheld for December which shall be filed/paid on or before
January 15 of the succeeding year.
General Ledger of the Due to BIR account as of December 31, 2018 showed that the
taxes to be remitted to the BIR is P3,329,627.97, as follows:
Beginning Tax withheld Tax remitted to
Balance during the year the BIR Ending Balance
General Fund P 2,826,849.95 P 7,165,288.02 P 6,662,510.00 P 3,329,627.97
Analysis disclosed that the total unremitted taxes of P3,329,627.97 pertains to the
unpaid claims since 2006 and taxes withheld during CY 2018 which were partially
remitted to the BIR. Further verification revealed that on January 7, 2019 the Municipality
remitted the amount of P1,608,115.48, thus, reducing the unremitted taxes to
P1,721,512.49 as of that month.
Contrary to the afore-cited BIR Regulation, the Municipality was not able to remit all the
taxes withheld in prior years within 10 days following the end of the month the
withholding was made, thus exposed the Municipality to payment of penalties and
surcharge for late remittance.
We recommended that the Municipal Mayor direct both the Municipal Treasurer
and the Accountant to effect the immediate remittance of the taxes due to the BIR.
Henceforth, withheld taxes due the BIR be remitted on or before the tenth (10 th)
day of the month following the month in which withholding was made as required
under BIR Regulation No. 2-98 to prevent incurrence of surcharges and penalties
for late remittances.
The Municipal Accountant explained that the unremitted amount pertains to the amount
carried forward from previous years. They agreed to evaluate the amounts and remit the
same to BIR if identified as valid claims and to prepare a journal entry for reversal for
those that are not valid claims.
6. Only P12,145,831.15 or 59.6 per cent of the total appropriations for Local Risk
Reduction Management Fund for the year including the previous years’ continuing
33
appropriation of P20,378,426.29 was utilized as of December 31, 2018, and the
Monthly Report on Sources and Utilization of the Disaster Risk Reduction and
Management Fund was not prepared and submitted to the COA Auditor contrary
to the requirements provided for under the provisions of COA Circular No. 2012-
002 thus not delivery of related services to target beneficiaries were not
optimized.
Commission on Audit Circular No. 2012-002 dated September 12, 2012 provides the
accounting and reporting guidelines for the Local Disaster Risk Reduction and
Management Fund (LDRRMF) of Local Government Units, National Disaster Risk
Reduction and Management Fund (NDRRMF) given to LGUs and receipts from other
sources. It provides, among others, the following:
4.4 The 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 Council (LDRRMC) within the next five (5)
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
Fund Investment Plan (LDRRMFIP).
5.1.2 A LDRRMFIP for the DRRM program shall be prepared annually. It shall
present the 30% allocation for QRF in lump-sum and the allocation for disaster
mitigation, prevention and preparedness with details as to projects and
activities to be funded. The LDRRMFIP shall also include under a separate
caption, the list of projects and activities charged to the unexpended LDRRMF
of previous years.
5.1.5 A Report on Sources and Utilization of DRRMF using the format in Annex B
shall be prepared and certified correct by the Local Accountant. The Local
Disaster Risk Reduction and Management Officer (LDRRMO) shall submit the
report on or before the 15 th day after the end of each month through the
LDRRMC and Local Development Council (LDC) to the COA auditor of the
LGU.
Review of the submitted LDRRMFIP for the CY 2018 revealed that it only include the
current year’s appropriation of P12,384,223.16. The projects and activities charged to
the unexpended LDRRMF of previous years were not identified and incorporated therein
contrary to Sections 4.4 and 5.1.2 of COA Circular No. 2012-002.
We also noted that the Municipal Disaster Risk Reduction Management Office
(MDRRMO) failed to submit the Monthly Report on Sources and Utilization of Disaster
Risk Reduction and Management Fund, thereby causing difficulty in monitoring the
efficiency of fund utilization.
On the other hand, review of the records disclosed that the Municipality did not fully
maximize the use of the current year and previous years’ available appropriations for
LDRRMF totaling P20,378,426.29 as only P12,145,831.15 or 59.6 per cent was utilized
as of December 31, 2018. Details of the Municipality’s available appropriation, utilization
and balances for LDRRMF are presented as follows:
34
Percentage
Particulars Available Amount Utilized Balance of Utilization
Current Year Appropriation:
Quick Response Fund (QRF) P 3,715,266.95 2,350,000.00 P 1,365,266.95 63%
Mitigation Fund (MF)
MOOE 5,452,996.21 5,296,851.36 156,144.85 97%
Capital Outlay 3,215,960.00 3,215,960.00 0.00 100%
Total 12,384,223.16 10,862,811.36 1,521,411.80 88%
Continuing Appropriation:
2012 1,832,885.47 1,283,019.79 549,865.68 70%
Special Trust Fund
CY 2013 3,252.77 0.00 3,252.77 0.00
CY 2014 567,269.20 0.00 567,269.20 0.00
CY 2015 2,569,749.60 0.00 2,569,749.60 0.00
CY 2016 1,640,650.08 0.00 1,640,650.08 0.00
CY 2017 1,380,396.01 0.00 1,380,396.01 0.00
Total 6,161,317.66 0.00 6,161,317.66 0.00%
Total as of December 31, 2018 P 20,378,426.29 12,145,831.15 P 8,232,595.14 59.60%
The inability of the Municipal Government to fully maximize the implementation of

programs, projects and activities allocated for disaster preparedness and mitigation has
deprived them the opportunity to upgrade the Municipality’s disaster resiliency level and
to further strengthen its capacity for disaster risk reduction management.
We recommended that the Municipal Mayor effect the optimum utilization of the
MDRRMF in order to strengthen the Municipality’s disaster preparedness and
direct the MDRRMO to submit the Monthly Report on Sources and Utilization of
Disaster Risk Reduction and Management Fund to facilitate proper monitoring and
evaluation of the utilization of the MDRRMF.
Concerned officials agreed to comply with the Audit Team’s recommendations.
7. Copies of the approved contracts of the nine implemented projects involving a

total amount of P18,748,584.44 together with the required supporting documents
thereto were not submitted to the Office of the Auditor within five working days
from the execution thereof, contrary to COA Circular No. 2009-001, thus affecting
the timely review, inspection and evaluation of the transactions and
communication of deficiencies, if any.
Section 3.1.1 of COA Circular No. 2009-001 dated February 12, 2009 requires that,
within five (5) working days from the execution of a contract by the government entity or
any of its subdivisions, agencies or instrumentalities, including government-owned and
controlled corporations and their subsidiaries, a copy of said contract and all the
documents forming part thereof by reference or incorporation shall be furnished to the
Auditor of the agency concerned.
35
Section 3.1.2 of the same Circular enumerated the copies of documents required to be
submitted as follows:
a. Invitation to Apply for Eligibility and to Bid

b. Letter of Intent
c. Eligibility Documents and Eligibility Data Sheet
d. Eligibility Requirements
e. Results of Eligibility Check/Screening
f. Bidding Documents (Section 17.1 of the Revised IRR of RA 9184)
g. Minutes of Pre-bid Conference, if applicable
h. Agenda and/or Supplemental Bid Bulletins, if any
i. Bidders Technical and Financial Proposals
j. Minutes of Bid Opening
k. Abstract of Bids
l. Post Qualification Report of Technical Working Group
m. BAC Resolution declaring winning bidder
n. Notice of Post Qualification
o. BAC Resolution recommending approval
p. Notice of Award
q. Contract Agreement
r. Performance Security
s. Program of Work and Detailed Estimates
t. Certificate of Availability of Funds, Obligation Request
u. Notice to Proceed
Moreover, Item 4.1 of the same COA Circular provides, “Any unjustified failure of the
officials and employees concerned to comply with the requirements herein imposed shall
be subject to the administrative disciplinary action provided in (a) Section 127 of
Presidential Decree No. 1445; (b) Section 55, Title I-B, Book V of the Revised
Administrative Code of 1987; and (c) Section 11 of Republic Act No. 6713”.
Verification of records revealed that in 2018, the Municipality had implemented 9

projects totaling P18,748,584.44 (Appendix 5). However, copies of contracts and
supporting documents for these implemented projects were not submitted to the Office
of the Auditor within five days after execution of contract. It is only during post audit of
disbursement vouchers that the Audit Team got hold of the documents.
The non-submission of advance copies of contracts and its supporting documents

affected the prompt review, evaluation and determination of the reasonableness of the
contract price. Generating timely audit results is necessary in order to reduce exposure
to possible losses of government funds in the event that deficiencies and/or defects are
noted in the contracts. Early discovery of such flaws would allow corrective measures to
be immediately undertaken.
We recommended that the Municipal Mayor direct the Municipal Engineering

Office and the BAC Secretariat to furnish the Audit Team with copies of approved
36
contracts and all the documents forming part thereof within five days from their
execution as prescribed under COA Circular No. 2009-001 dated February 12,
2009, to facilitate prompt review and evaluation of the contracts and early
communication to management of the deficiencies, if any.
Management Comment’s:
8. The Notice of Award, Notice to Proceed and Contracts for the projects under the
20% Development Fund were not posted in the Philippine Government Electronics
Procurement System (PhilGEPS) contrary to Section 37.1.6 and 37.4.2 of the
Revised Implementing Rules and Regulations (RIRR) of Republic Act (RA)
No. 9184, thus, transparency in the procurement process and prompt
implementation of procurement contracts were not attained.
Section 37.1.6 of the RIRR provides that “The BAC, through the Secretariat, shall post,
within three (3) calendar days from its issuance, the Notice of Award in the PhilGEPS,
the website of the Procuring Entity, if any, and any conspicuous place in the premises of
the Procuring Entity”.
Section 37.4.1 also provides that, “The Concerned Procuring Entity shall issue the
Notice to Proceed together with a copy or copies of the approved contract to successful
bidder within seven (7) calendar days from the date of approval of the contract by the
appropriate government approving authority. All notices called for by the terms of the
contract shall be effective only at the time of receipt thereof by the successful bidder.”
Whereas, Section 37.4.2 states that, “The Procuring Entity, through the BAC Secretariat,
shall post a copy of the Notice to Proceed and the approved contract in the PhilGEPS
and the website of the Procuring Entity, if any, within fifteen (15) calendar days from the
issuance of the Notice to Proceed.”
Verification and post audit of disbursement vouchers under the 20% Development Fund
showed no proof of posting of the Notice of Award (NOA), Notice to Proceed (NTP) and
Contract in the PhilGEPS and any conspicuous place in the premises of the following
projects:
37
Date of Date of Date of Date of
Check No. Check Name of Project Award Contract NTP
804606 12/10/2018 Improvement of Parking Area 08/10/2018 08/13/2018 08/15/2018
Improvement of Court Surface
804615 1/28/2019 (Tennis Court) 06/01/2018 06/06/2018 06/08/2018
804612 12/19/2018 Procurement of Floodlights 07/20/2018 07/25/2018 07/25/2018
804597 10/08/2018 Fabrication & Installation of Streetlights 07/27/2018 08/03/2018 08/03/2018
804605 11/23/2018 Construction of Covered Canal(Venus) 06/04/2018 06/08/2018 06/13/2018
804614 1/25/2019 Construction of Covered Canal 08/17/2018 08/20/2018 08/22/2018
804617 1/28/2019 Upgrading of Footbridge 08/17/2018 08/20/2018 08/22/2018
On going Upgrading of Covered Canal 09/17/2018 09/20/2018 09/20/2018
804607 12/19/2018 Rehabilitation of Liwasang Aguinaldo 08/30/2018 09/03/2018 09/10/2018
Improvement of Waterways (Fencing of
On going Riverbank) 12/17/2018 12/20/2018 12/20/2018
Fabrication of Municipal Segregation
804619 3/18/2019 Bin 10/09/2018 10/12/2018 10/10/2018
Fabrication of Municipal Trash
804618 3/8/2019 Container 10/09/2018 10/12/2018 10/10/2018
Thus, the BAC and its Secretariat failed to comply with the above provisions of the RIRR
for transparency purposes.
We recommended that the Municipal Mayor direct the BAC Secretariat to comply
with the required postings of the Notice of Award, Notice to Proceed and Contract
in the PhilGEPS and in the website of the Municipality, if any, within three and 15
calendar days, respectively, from their issuance.
9. The Municipality did not prepare the Project Procurement Management Plan
(PPMP) and Annual Procurement Plan (APP) for Infrastructure Projects for CY
2018 as required under Sections 7.1 and 7.3.2 of the Implementing Rules and
Regulations (IRR)-A of the Republic Act No. 9184 and Section 4 of the Local
Government Units Procurement Manual, thus, proper planning and monitoring of
the Programs, Activities and Projects (PAPs) of the Municipality were not assured.
Section 7.1 of the IRR-A provides, among others, that “No government procurement
shall be undertaken unless it is in accordance with an approved Annual Procurement
Plan.”
Section 7.3.2 of the same IRR-A also provides that: “Each procuring entity shall
judiciously prepare, maintain and update an APP for all its procurement that shall include
for each individual project, a Project Procurement Management Plan (PPMP).”
Moreover, Section 4 of the Local Government Units Procurement Manual provides that
procurement planning ensures that the overall goal of a particular project will be
38
achieved effectively and efficiently. Through plans, an LGU is able to effectively manage
and track procurement all the way to contract performance. Procurement planning
should be done within the budgetary context, reflecting the LGUs priorities and
objectives for the period.
A Project Procurement Management Plan (PPMP) serves as a guide document in the

procurement and contract implementation process, as well as a vital reference in
procurement monitoring.
The end-user units of the procuring entity shall prepare their respective PPMP for their
different programs, activities, and projects (PAPs). The PPMP shall contain the following
information:
a. Information on whether PAPs will be contracted out;

b. Name of the project/procurement;
c. General description of the project/procurement;
d. Extent/size of contract scopes/packages (This refers to the general description of
the lot to be included in a particular contract, i.e. the goods, infrastructure
projects or services, or a combination of any two or three of these types of
procurement, including quantities where applicable.);
e. Procurement methods to be adopted;
f. The time schedule for each procurement activity and for the contract
implementation; and
g. Estimated budget for general components of the contract.
As soon as the appropriation ordinance becomes final, the end-user units shall revise
and adjust the PPMP to reflect the budgetary allocation for their respective PAPs. The
revised PPMPs shall be submitted to the BAC, through its Secretariat, for the finalization
of the modes of procurement under the proposed APP.
For calendar year 2018, the Municipality had advertised in Philippine Government
Electronic Procurement System (PhilGEPS) a total procurement of P55,391,605.02,
Approved Budget for the Contract (ABC) for the following infrastructure projects, to wit:
Name of Project Amount (ABC) Date Published

1. Upgrading of Toclong Road 13,600,000.00 March 13, 2018
2. Construction of Covered Canal 500,050.00 May 22, 2018
3. Fabrication and Installation of Streetlights 3,000,000.00 May 22, 2018
4. Proposed Improvement/ Court Surface Upgrading with
Drainage System 764,324.10 May 22, 2018
5. Fabrication and Installation of Streetlights 3,000,000.00 June 29, 2018
6. Improvement of Parking Area Located at Barangay
Batong Dalig 1,184,078.08 July 31, 2018
7. Repair of School Buildings 1,935,146.90 July 31, 2018
8. Construction of Covered Canal Located at Barangay
Pulvorista 414,262.53 August 3, 2018
39
Wakas II 1,666,947.66 August 3, 2018
10. Upgrading of Footbridge Located at Barangay Congbalay- 1,811,900.00 August 3, 2018
Legaspi
11. Upgrading of Footbridge Located at Barangay Samala-
Marquez 1,606,832.69 August 3, 2018
12. Repair of Footbridge Located at Barangay Batong Dalig 157,870.85 August 3, 2018
13. Rehabilitation and Improvement of Liwasang Aguinaldo 7,715,390.72 August 3, 2018
14. Repair of School Buildings 1,935,146.90 September 11, 2018
Wakas II 1,666,947.66 September 4, 2018
16. Construction of Drainage Canal Located at Barangay
Manggahan-Lawin 1,000,000.00 September 4, 2018
17. Asphalting of Road Located at Barangay Manggahan-
Lawin 1,000,000.00 September 4, 2018
18. Construction of Evacuation Facility Located at Barangay
Congbalay-Legaspi 3,620,963.90 September 13, 2018
19. Improvement of Drainage Canal Located at Putol-Magdalo 1,000,000.00 October 10, 2018
20. Construction of Utility Cottage 471,284.34 October 10, 2018
21. Renovation of Day Care Centers and Municipal Social
Welfare and Development Office 1,324,440.96 November 27, 2018
22. Improvement of Waterways (Fencing of Riverbank) 399,509.78 November 30, 2018
23. Upgrading of Multipurpose Facility (Into Motorpool) 934,176.87 November 30, 2018
24. Concreting of Philippine National Police and Health Center 712,795.95 November 30, 2018
Ground
25. Construction of Fence, Drainage and Parking Area 1,838,017.92 November 30, 2018
26. Proposed Extension of New Municipal Police Station 807,076.25 November 30, 2018
27. Renovation of Day Care Centers & MSWD Office 1,324,440.96 December 14, 2018
Total 55,391,605.02
However, it was observed that the Municipality did not prepare the PPMP and APP for
the aforementioned infrastructure projects, thus, there was no guide document in the
procurement and contract implementation process, as well reference in procurement
monitoring of the above-listed infrastructure projects.
We recommended that the Municipal Budget Officer and the BAC Chairman
ensure that the required PPMP and APP for Infrastructure Projects are prepared
and approved before any procurement of goods, services and civil works is
undertaken to properly plan and monitor the priority projects of the Municipality
for a particular budget year.
10. The fidelity bond of P225,000.00 of the Cashier, designated as Acting Disbursing
Officer of the Municipality was insufficient to cover her average cash
accountability of P5,110,479.17 under the Revised Schedule of Premium Rates
embodied in Section 5.3 of Treasury Circular No. 02-2009, thus, exposing
40
government funds to the risk of not being indemnified in case of loss through
theft, defalcations, shortages and other similar cases.
Section 4.2 of Treasury Circular No. 02-2009 (Revised Omnibus Regulations Governing
the Fidelity Bonding of Accountable Public Officers Pursuant to the Public Bonding Law)
dated August 6, 2009 states that, every officer, agent, and employee of an LGU whose
duties permit or require possession, custody or control of local government funds and
properties, including but not limited to provincial governors, city and municipal mayors,
provincial, city, municipal and barangay treasurers, and punong barangays shall be
accountable and responsible for said funds and properties for the safekeeping thereof in
conformity with law and shall be properly bonded. (Section 305(f) R.A.7160, DILG
M.C.No. 99-186, 11 Oct. 1999).
Treasury Circular No. 02-2009 provides that for cash accountability ranging from
P5,000,001.00 to P25,000,000.00, the fidelity bond should be P3,500,000.00.
Audit of the accounts of Ms. Olivia A. Ocava, Cashier II, and currently designated as
Acting Disbursing Officer, disclosed that her fidelity bond was only P225,000.00 which is
inadequate to cover for her average cash accountability of P5,110,479.17, thus, the risk
that government funds may not be recovered in case of loss through theft, defalcations,
shortages and unrelieved losses.
Her average cash advance is computed as follows:
Amount of Cash
Month Advance
January P 4,476,878.53
February 4,369,743.69
March 5,429,474.39
April 3,084,678.89
May 8,142,149.16
June 4,655,322.20
July 4,830,573.17
August 4,684,329.15
September 4,418,630.43
October 5,703,075.57
November 7,374,759.43
December 4,156,135.39
Total P 61,325,750.00
Average Cash Advance* P 5,110,479.17
*Average cash advance = Total cash advances for the year / 12 months
We recommended that the amount of fidelity bond of Ms. Ocava be increased to

P3,500,000.00 as provided for under the Revised Schedule of Premium Rates of
the above-mentioned Treasury Circular to ensure that the government is duly
indemnified in case of losses of funds.
The Municipal Treasurer stated that they had already increased the amount of bond and
they will furnish the Audit Team copy of the documents.
41
Official Development Assistance (ODA) Funded Projects
The Municipality had no ODA-funded projects during the year.
Withholding and Remittances of Contributions to the Government Service

Insurance System (GSIS) and Pag-IBIG
The Due to GSIS and Pag-IBIG contributions of the Municipality and employees and/or
payments of loans to said agencies were withheld and remitted in compliance with
relevant rules and regulations.
20% Development Fund
Pursuant to the Department of Budget and Management and Department of the Interior
and Local Government (DBM-DILG) Joint Memorandum Circular No. 2017-1 dated
February 1, 2017, the Municipality appropriated the amount of P34,415,741.09 for
development projects. The amount was equivalent to 22 per cent of its Internal Revenue
Allotment (IRA) for the year 2018 of P157,741,411.00. Of the 20 per cent Development
Fund, P17,390,792.67 or 50.53 per cent was disbursed or obligated during the year.
Status of Suspensions, Disallowances and Charges
There were no unsettled suspensions, disallowances and charges during the year 2018.
42
PART III – STATUS OF IMPLEMENTATION OF PRIOR
YEAR’S AUDIT RECOMMENDATIONS
Status of Implementation of Prior Year’s Audit Recommendations
As of December 31, 2018
Of the 22 audit recommendations contained in the 2017 Annual Audit Report (AAR), 10 were fully implemented, seven were
partially implemented, while the remaining five were not implemented.
Reason for
Status of Partial/ Non-
Refe- Management’s
Audit Observation Recommendation Implemen- implemen-
rence Action
tation tation
Part II, The reliability and accuracy of We recommended that

Finding the recorded Property, Plant and the Municipal Mayor direct
No. 1, Equipment (PPE) with a book the Municipal Accountant
page 27, value of P357,344,517.94 (net of and the Acting
2017 depreciation) as of December Property/Supply Officer to
AAR 31, 2017 could not be continue their efforts to
ascertained due to a reconcile and determine
discrepancy of P81,268,117.15 the nature of
between the accounting records discrepancies noted in the
and inventory reports, contrary PPE account and make
to Sections 114 and 124 of the the necessary
Manual on the New Accounting adjustments/corrections,
System (MNGAS) for Local whenever applicable. We
Government Units, Volume I. also recommended
Moreover, unserviceable motor considering all possible
vehicles amounting to remedies to address the
P2,167,500.00 were not yet negative observations and
disposed of as required under problems encountered in
Section 79 of Presidential the conduct of physical
Decree (PD) No. 1445. inventory. Specifically,
the Acting Property
Officer should ensure
that:
43
a. Acknowledgement Acting Property Officer Fully
Receipt for Equipment ensures that the ARE Implemented
(ARE) and/or Property and/or PAR are issued
Acknowledgement for all PPE items.
Receipt (PAR) are
issued for all PPE
items issued to actual
recipients and/or end-
users and renewed
every three years;
b. issued PPE items are The acting Property Fully

returned to the Officer prepares the Implemented
Property Office before ARE/PAR to transfer
the issuance of Agency the items accountable
Clearance for those to any retiring
officials and employees employee prior to
who will apply for issuance of clearance.
retirement and/or
transfer of office;
c. demolished The acting Property Not Concerned

constructed buildings, Officer assures that if Implemented officials did not
road networks and there will be any provide expla-
other infrastructure demolished infra asset, nation on their
assets are inventoried it shall be reported to partial imple-
and requested to be the Municipal mentation of the
dropped from the Accountant's Office for audit recom-
books; proper dropping from mendation.
the books of account.
d. unserviceable After payment of the Not Incomplete

equipment which are bidded unserviceable Implemented documentations.
44
already disposed are equipment, it is
dropped from the dropped from the
books of account; books of account
e. proper turnover of PPE This is religiously Fully

items from outgoing to observed prior to Implemented
incoming officials are issuance of clearance
observed/made; to outgoing officials
f. donated properties are Some items have been Partially Lack of

properly documented issued the necessary Implemented documents.
and covered by Deeds Deed of Donations
of Donation and
Acceptance of
Donations;
g. extra efforts are Ms. Joyce Cavas has Fully

exerted to trace been transferred to the Implemented
records of all PPE General Services
facilitate the Office to help in the
reconciliation of PPE reconciliation of PPE
accounts. accounts. She has also
been designated as the
Secretrary to the
Inventory Committee.
We further recommended The Inventory Not The Inventory

that the Municipal Mayor Committee convened Implemented Committee still
direct the Acting Property several times to cannot come up
Officer to facilitate the evaluate and come up with the
disposal of unserviceable with the appraised appraised value
motor vehicles and other value of unserviceable of unserviceable
properties found motor vehicles. After motor vehicles.
unserviceable and see to which the necessary
it that proper procedures
45
were followed and procedures for public
necessary supporting auction will be
documents are available conducted.
for audit before any
disposal of unserviceable
property is undertaken.
Part II, Transfer Certificates of Title We recommended that

Finding (TCT) of the six parcels of land the Municipal Mayor
No. 2, acquired by the Municipal direct:
page 31, Government involving a total
2017 amount of P11,358,070.00 a. the concerned The Municipal Partially The Budget
AAR remained not transferred in the Municipal official to Assessor conducted a Implemented Officer is
name of the Municipality, thus work out and see to it thorough investigation waiting for the
the risk of third party claim and that Titles of the and analysis of the projected
possible future court litigation. purchased and donated Land claimed to be amount to be
Moreover, the 7,805 square parcels of land are owned by the incurred in the
meters land purchased by the transferred in the name Municipality of Kawit. It titling of land
Municipal Government, where of the Municipal was discovered that owned by the
the Municipal Hall was situated, Government of Kawit to the land used by Tirona Municipality of
involving a total value of establish the High School has been Kawit.
P8,413,790.00 (fair market Municipality’s absolute titled under the name
value) was not yet recorded in ownership thereof. of DepEd. After which,
the books of the Municipality, Coordination by the the Inventory and
thus understating the Land Municipal Accountant, Appraisal Committee
account by the same amount. the Municipal convened so that the
Assessor, Property Municipal Assessor
Officer and Municipal may disseminate his
Treasurer is necessary investigation. As such,
to ensure the correct this will not be
recording of the parcels recorded in the books
of land in the books of of account.
accounts, property
records and related
46
reports;
b. the Budget Officer to The Budget Officer Partially The Municipal

include in the coordinated with the Implemented Assessor
preparation of budget Municipal Assessor to coordinated with
the allocation for titling have a list of land the Mayor's
of land owned by the owned by the Office regarding
Municipality; and the Municipality of Kawit. those lands that
Municipal Accountant was donated for
to book up the parcels proper issuance
of land which were of Deed of Sale
already transferred to under said
the Municipality by way Office.
of donation or deed of
sale.
Part II, Improper basis in recording the We recommended that

Finding issuances of inventories and the Municipal Mayor
No. 3, failure to conduct complete require:
page 33, physical inventory thereof,
2017 contrary to Sections 114, 121 a. the Acting Supply Partial consolidation of Partially The Acting
AAR and 124 of the Manual on the Officer to consolidate RIS on a monthly basis Implemented Supply Officer
New Government Accounting weekly the RIS using has been
System (MNGAS), Volume I, the SSMI and submit to instructed to
rendered the year-end balance the Accounting Office consolidate the
of Inventories account of for recording of issued RIS on a weekly
P454,626.37 doubtful. supplies and materials; basis instead of
the monthly
basis.
b. the Municipal The corresponding Partially JEV preparation

Accountant to compute Journal Entry Voucher Implemented is still ongoing.
the cost of supplies has been made to
47
issued and ending record the
inventory based on the expenditures account
SSMI and to prepare a based on the report on
journal entry voucher ending inventory
(JEV) to record submitted by the
expenditures using different
appropriate departments/offices.
expenditures accounts;
and
c. the Acting Supply Ongoing reconciliation Partially The Acting

Officer to conduct a of the records per GSO Implemented Supply Officer
complete physical and Accounting Office conducted the
count of all inventory complete
items regularly at the physical count of
end of every semester all inventory
and render a report items after which
thereon within the a copy has been
prescribed deadline submitted to the
and reconcile the Accounting
records of the Supply Office. The
Office with the Accounting
Accounting records on Office on the
a per category basis. other hand,
prepares a
report on newly
purchased/acqui
red PPEs for
proper
reconciliation
with GSO.
Part II, The aggregate balance of We recommended that The Trust Fund is Not Reiterated in
Finding P106,778,435.19 of the Cash the Municipal Mayor always utilized only for Implemented finding No.3 of
48
No. 4, and Cash Equivalents account require the Municipal which purpose it was AAR 2018.
page 35, for the General Fund (GF), Accountant and the intended for. The (Cash deficit still
2017 Special Education Fund (SEF) Municipal Treasurer to Municipal Treasurer exists in the
AAR and Trust fund (TF) was not closely monitor the cash has been instructed to Gen. Fund.)
enough to cover for the total balance of each fund and monitor the availability
current liabilities of enjoin the Municipal of funds. A certificate is
P143,983,598.41(excluding Treasurer from certifying first issued prior to
unutilized 20% Development funds availability when no conduct of bidding
Fund of P15,154,553.96) as at cash is available to avoid procedures.
end of the year, thereby cash deficits. Otherwise,
resulting in cash deficit of appropriate sanctions
P52,359,717.18 which is maybe imposed against
contrary to Section 337 of responsible officials for
Republic Act (RA) No. 7160. existence of cash deficits.
We also recommended
that trust fund be utilized
only for the specific
purpose for which it was
intended as required
under Section 4(3) of PD
No. 1445.
Part II, The collections made by the We recommended that The Municipal Not Reiterated in
Finding Provincial Government from the Municipal Accountant Accountant has Implemented finding No.2 of
No. 5, Real Property Taxes (RPT) due look into the difference in conducted the AAR 2018.
page 37, to the Municipality were not balances of the Real thorough analysis of
2017 recorded in full in the books Property Tax Receivables RPT Receivables and
AAR resulting in the overstatement of and Special Education set Receivables. The
RPT Receivables and Special Tax Receivables accounts proper Journal Entries
Education Tax (SET) and make the necessary has also been made.
Receivables as well as the adjustments thereon at
unequal balances of these two their correct balances. We
accounts at year-end of also recommended that
P9,984,338.07 and henceforth, the
49
P9,228,740.50, respectively. Accountant shall ensure
that both accounts carry
the same balances from
the beginning of the year
until year end.
Part II, The Municipality has expended We recommended the The functions of Fully
Finding a total of P5,685,000.00 for Honorable Mayor to direct consultants have been Implemented
No. 6, Consultancy Services for twenty- the HRMO and other scrutinized and
page 40, two (22) consultants whose work concerned officials to checked whether it only
2017 descriptions did not require immediately review the duplicates the duties of
AAR highly specialized or technical job description of each some permanent
expertise that could not be permanent employee and employees. The
provided by its existing regular assess if there is really a number of hired
staff, contrary to the provisions need to hire the services consultants have been
of Revised Implementing Rules of consultants. The reduced since July
and Regulations (IRR) of Municipality should 2018. The municipality
Republic Act No. 9184 and maximize the worth of its lacks the needed
Section 1(a) of CSC Resolution in-house employees manpower that would
No. 021480 as circularized before resorting to hiring require highly technical
under Memorandum Circular No. of consultants. and professional
24 s 2002 for Consultancy Consultants should only expertise. There are
Services. be hired for special not enough permanent
projects requiring highly employees to do so.
technical and professional Creation of additional
expertise as provided by position would be
IRR of Republic Act No. impossible.
9184 and Section 1(a) of
CSC Resolution No.
021480 as circularized
under Memorandum
Circular No. 24 s 2002 for
Consultancy Services.
50
Part II, The year-end balance of We recommended that The donations account Fully
Finding Donations Account amounting to the Municipal Mayor has been thoroughly Implemented
No. 7, P31,831,937.75 included instruct the Municipal analyzed and it was
page 43, expenses which did not partake Accountant to properly observed that the
2017 the nature of aids/assistance to record and classify problem lies on the
AAR other levels of government, financial transactions in classification of
individuals or institutions by as accordance with COA accounts. For CY
much as P13,367,287.16 or Circular No. 2015-009 to 2018, proper
41.88% thereof contrary to COA ensure that financial classification of
Circular No. 2015-009 resulting statements present fairly accounts has been
in overstatement of Donations the financial position of made. If the expense
account and understatement of the Municipality and that benefited other entities
other expense accounts. the effects of transactions or individual not directly
are faithfully represented. connected to the
municipality, then that
would be classified
under donations. If the
expense was incurred
to support operations
of the municipality,
then it was classified
under corresponding
expense account.
Part II, Bottom-up Budgeting (BUB) We recommended that

Finding projects were not properly the Municipal Mayor direct
No. 8, screened for likely-to-occur the:
page 46, implementation problems prior to
2017 its inclusion in the priority list of a. Project Implementer Fully
AAR BUB programs resulting in the as well as the Implemented
non-implementation of four Municipal Planning
Programs/Projects/Activities and Development
51
(PPAs) amounting to Officer to properly
P3,185,434.70 thus, depriving plan/screen The MPDO has been
the constituents of the optimum programs anddesignated as the focal
benefits that could have been projects before its person for all BUB
derived had those PPAs been inclusion in the
projects, as well as
implemented. priority list of PPAsprojects under the
to be undertaken by Trust Fund. She has
the Municipality to religiously monitored
avoid return of fundsthe status of each
due to due to the project by discussing it
non-implementation with the corresponding
of the planned PPA. implementing
department/office. She
is also responsible in
the monthly submission
of statement of receipts
and disbursement
prepared by the
Municipal Accountant.
Through this, both
b. BUB Focal Person department heads are Fully
to closely monitor able to update and Implemented
the implementation reconcile their records.
of the BUB projects
so that the optimum
goal of inclusive
growth and poverty
reduction could be
fully attained.
52
Part II, The 20% Development Fund We recommended that
Finding was not optimally utilized by the the Municipal Mayor direct
No. 9, Municipal Government, contrary the:
page 48, to Department of Interior and
2017 Local Government (DILG) and  Municipal Engineer to The MPDO and Fully
AAR Department of Budget and ensure the full utilization Municipal Engineer has Implemented
Management (DBM) Joint of the 20% DF for its a close coordination to
Memorandum Circular No. 2011- intended projects and ensure that the PPA's
1 dated April 13, 2011thus, the be guided always by the are still implemented
intent and purpose for which the afore-cited Joint feasible. For CY 2017,
Fund was established was not Memorandum Circular. the PPA's have been
fully achieved. utilized 100% as of
December 2018.
 Municipal Planning and

Development Officer Fully
(MPDO) to closely Implemented
monitor the
implementation of the
development projects
programmed under the
20% DF to ensure the
optimum utilization of
the fund and desirable
socio-economic and
development outcomes.
Part II, The Municipality failed to a. We recommended The Sangguniang Partially The Municipal
Finding substantially implement the that the Sangguniang Bayan has enacted Implemented Council already
53
No. 10, requirements of Republic Act Bayan in coordination ordinances requiring submitted the
page 51, (RA) No. 9003 or Ecological with the Solid Waste waste segregation, the Municipal
2017 Solid Waste management Act of Management Board "No Segregation No Ordinance to the
AAR 2000 as manifested by poor enact ordinances to Garbage Collection Province but it
segregation of waste at source, carry out the Policy". Penalties was not yet
lack of and/or non-functional requirements of R.A. implemented has also approved.
Material Recovery Facility No. 9003, specifically been imposed. Such
(MRF), inactive SWM Board and the imposition of fines ordinances has been
absence of an ordinance and penalties to printed on tarpaulins to
imposing fines and penalties for violators to inform the public.
prohibited acts under RA 9003 strengthen the
hence, the protection of public implementation of
health and environment was not solid waste
fully achieved. management plan
throughout the
Municipality. We
likewise
recommended that
the Municipal Mayor
require strict
monitoring of
compliance with the
requirements of R.A.
No. 9003 especially
at the barangay level.
54

Kawit2018 Audit Report

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kawit2018 Audit Report

Uploaded by

Copyright:

Available Formats

Republic of the Philippines

ANNUAL AUDIT REPORT

For the Year Ended December 31, 2018

2018 2017 Increase/Decrease

Total Assets P 556,414,533.09 P 516,801,522.60 P 39,613,010.49

Independent Auditor’s Report on the Financial Statements

We rendered a qualified opinion on the fairness of the presentation of the financial

Significant Observations and Recommendations

1. The cash position of the Municipality having a total current balance of

We recommended that the Municipal Mayor instruct the Municipal Treasurer to

2. Under-collections totaling P250,488.13 were incurred due to various deficiencies

We recommended that the Municipal Mayor direct the Municipal Treasurer to

Henceforth, we recommended that the Municipal Mayor direct the Municipal

3. Taxes withheld by the Municipality under the General Fund amounting to

5. Copies of the approved contracts of the nine implemented projects involving a

We recommended that the Municipal Mayor direct the Municipal Engineering

8. The fidelity bond of P225,000.00 of the Cashier, designated as Acting Disbursing

We recommended that the amount of fidelity bond of Ms. Ocava be increased to

Summary of Total Suspensions, Disallowances and Charges

Status of Implementation of Prior Year’s Audit Recommendations

I Audited Financial Statements

II Audit Observations and Recommendations 26

III Status of Implementation of Prior Year’s Audit Recommendations 43

Note 2018 2017

Total Assets 556,414,533.09 P 516,801,522.60

Total Liabilities 185,571,640.69 169,811,148.32

Total Liabilities and Net Assets/Equity P 556,414,533.09 P 516,801,522.60

(See Accompanying Notes to Financial Statements)

Note 2018 2017

Less: Current Operating Expenses

Surplus (Deficit) from Current Operation 46,359,680.52 13,654,521.78

(See Accompanying Notes to Financial Statements)

Note 2018 2017

Balance at January 1, 2018 P 346,990,374.28 P 316,185,649.14

(See Accompanying Notes to Financial Statements)

Note 2018 2017

Cash Flows from Investing Activities 0.00 0.00

Total Cash Provided by Operating, Investing 40,801,160.82 23,683,325.90

(See Accompanying Notes to Financial Statements)

Particulars Note Budgeted Amounts Difference

The construction of the Cavite Expressway (Cavitex) makes the municipality

City Mayor : Hon. Angelo Emilio G. Aguinaldo

Members of the Sanggunian:

Municipal Administrator : Mr. Rey Victor S. Santos

Note 3 - Summary of Significant Accounting Policies

3.1 Basis of Accounting

The consolidated financial statements are prepared on an accrual basis in

3.2 Revenue Recognition

Revenue from Non-Exchange Transactions

Taxes, Fees and Fines

Transfers from Other Government Entities

Revenues from non-exchange transactions with other government entities

The Municipality availed of the 5 – year transitional provision for the

The Municipality recognizes revenue from rendering of services by reference

Where the contract outcome cannot be measured reliably, revenue is

3.3 Property, Plant and Equipment

Depreciation on assets is charged on a straight-line basis over the useful life

Depreciation is charged at rates calculated to allocate cost or valuation of the

Public Infrastructures were not previously recognized in the books. The

3.4 Financial Instruments

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or

Initial recognition and measurement