EXECUTIVE SUMMARY

Introduction

The Municipality of Pastrana, Leyte was named after the hometown of Fr. Eusebio
Ybañez, a Spanish priest in the year 1888, and later in 1893 it was reverted to the status of a
barrio under the municipality of Dagami. In 1912, it was restored to its original status as a
town through the efforts of Agaton Villablanca who was appointed and later elected as
Municipal President. The Municipality of Pastrana is approximately twenty-seven (27)
kilometers away from Tacloban City and a 5th class municipality with twenty-nine (29)
registered barangays. Presently, it is under the leadership of Mayor Alvin T. Opiniano, Sr.

It has a total personnel complement of one hundred twenty-nine (129) employees

which is composed of twelve (12) elected officials, sixty-two (62) permanent, one (1) co-
terminus and fifty-four (54) Jos.

A financial and compliance audit was conducted on the Municipality’s accounts and
operations for the calendar year 2018. The audit was aimed to ascertain the propriety and
validity of the disbursements and receipts, and to obtain reasonable assurance about whether
the financial statements are free from material misstatements. The audit likewise, included a
review of operating procedures, vouching of transactions such as disbursement vouchers,
payrolls and receipts, interview with concerned management officials and employees,
reconciliation and analysis of accounts, ocular inspection of infrastructure projects
undertaken, and such other audit techniques considered necessary under the circumstances.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.

Financial Highlights

The Municipality’s total assets, liabilities, equity, income and expenses for CY 2018
and the immediately preceding year are as follows:

Accounts CY 2018 CY 2017

Assets P 221,514,756.80 P 163,006,146.25
Liabilities 105,242,211.46 73,780,890.84
Equity 116,272,545.34 89,225,255.41
Income 74,147,505.61 69,069,883.56
Expenses P 52,638,274.26 P 66,146,273.61

Its appropriation/allotment/obligation for current year, including funds received from

and transferred to other agencies and non-government and people’s organizations are as
follows:
 Particulars CY 2018 CY 2017
Allotment/Appropriations P 99,347,886.78 P 76,770,519.93
Obligations 59,628,710.12 50,397,650.38
Funds received from
P - P
NGAs 7,434,025.00

Independent Auditor’s Report

The Auditor rendered a qualified opinion on the Municipality’s combined financial

statements for CY 2018 because of the partially implemented prior year’s audit finding on
the reconciliation of the balance of Property, Plant and Equipment account per financial
statement against the Report on the Physical Count of PPE, discussed in Part III of this
report. As of year-end, the unreconciled balance amounted to P27,730,233.63.

Summary of Significant Observations and Recommendations

1. The Local Revenue Code of Municipality was not updated and adjusted for sixteen (16)
years, hence, was unable to offset the effect of inflation on its capability to implement
Projects, Programs and Activities or to render mandated basic services.

We recommended that management thru Sangguniang Bayan should update

regularly its Local Revenue Code pursuant to Section 191 of RA 7160 in order to
increase the financial capability of the LGU in rendering basic mandated services.

2. The municipality did not submit at the beginning of the year a list of on-going and to be
implemented projects/programs/activities (PPAs) for Calendar Year 2018 and failed to
inform COA about the posted appropriate signboards and/or public notices, thus, the
Audit Team cannot monitor, confirm and validate neither the LGU’s notification to the
public of the programs, projects and activities implemented nor the project
accomplishments for the year.

We recommended that management submit at the beginning of the year a list of on-
going and to be implemented projects/programs/activities (PPAs) for the current
year, and inform COA within ten (10) days after the award of the infrastructure
project or before the start of the program/activity that the appropriate project
signboards and/or public notices are already posted as required in COA Circular
No. 2013-004 dated January 30, 2013.

3. The LGU did not open a separate bank account for the fund received from Department of
Agriculture Regional Field Office 8 for the implementation of Yolanda Rehabilitation
and Reconstruction Program (YRRP).

We recommended that the LGU maintain a separate bank account for funds
received from DA RFO 8 in compliance with Section B, Article II of the signed
Memorandum of Agreement and for effective monitoring and recording of
transactions.
4. Programs, projects and activities totaling P13,300,000.00 under the 20% Development
Fund (DF) were not implemented, thus the desired socio-economic and environmental
benefits of these projects were not attained, aside from defeating the purpose for which
the fund was intended.

We reiterate our previous year’s audit recommendation that management ensure

implementation and optimal utilization of the 20% DF to help achieve the desirable
socio-economic development and environmental outcomes of the LGU pursuant to
DILG-DBM Joint Memorandum Circular (JMC) No. 2017-1 dated February 22,
2017.

5. The LGU utilized only 24% or P609,781.85 of the current year’s allocation of
P2,541,259.87 for prevention and mitigation, preparedness, response, rehabilitation and
recovery under the LDRRM Fund, resulting to unutilized balance of P1,931,478, thus its
constituents were deprived of a more resilient community from disasters’ impacts.
Likewise, the prior years’ LDRRM Fund balance for capital outlay and unexpended QRF
and MOOE totaling P2,156,638.69 and P8,537,981.08, respectively, were still unutilized
as of December 31, 2018.

We recommend that the municipality should:

a. maximize the utilization of appropriated funds in implementing the various

programs for risk reduction and management in order to enhance disaster
preparedness and response capabilities.

b. categorize the identified PPAs into four (4) thematic areas of disaster risk
reduction and management to ensure compliance to item 3.0 of NEDA-DBM and
DILG Joint Memorandum Circular NO. 2013-001.

c. include prior years’ unutilized LDRRM Fund in the preparation of LDRRMF

Investment Plan as required in Section 5.1.2 of COA Circular No. 2012-002
dated September 12, 2012.

6. The LGU failed to established GAD Database, prepare GAD Plan and Budget, and its
created GAD Focal Point System did not function as such. Likewise, some of the
Programs, Activities and Projects presented in the GAD Accomplishment Report do not
clearly address gender related issues and concerns, thus defeating the purpose of
addressing gender issues towards gender equality and women’s empowerment.

We recommended that management should:

a. Strengthen GAD Focal Point System and establish GAD Database;

b. Prepare the GAD Plan and Budget and Accomplishment Report as prescribed
under PCW-DILG-DBM-NEDA Joint Memorandum Circular No. 2016-001;
and
 c. Include only specific gender issues (with reference to women or girl children)/
GAD mandates to be address and gender responsive programs, projects and
activities in the GAD Plan and Budget;

7. Honoraria totalling P341,500.00 were not subjected with the corresponding applicable
withholding taxes.

We recommended that the Municipal Accountant and Municipal Treasurer ensure

that payment for Honoraria are subjected with the corresponding withholding taxes
using the Revised Withholding Tax Table under Revenue Regulation No. 11-2018
and remit the same to the BIR within the prescribed period.

Summary of Audit Suspensions, Disallowances and Charges (SASDC)

The total audit suspensions, disallowances and charges found in the audit of the
various transactions of the LGU as of December 31, 2018 was P 14,982,962.10 based on the
Notice of Suspension (NS), Notice of Disallowances (ND), and Notice of Charges (NC)
issued by this Commission.

The Notices of Suspensions and/or Disallowances resulting from post-audit of

calendar year 2018 transactions are still for issuance.

Status of Implementation of Prior Years’ Unimplemented Audit Recommendations

Of the fifty-one (51) audit recommendations embodied in CY 2016 and Prior Years’
Annual Audit Reports, thirteen (13) were implemented, nineteen (19) were partially
implemented and nineteen (19) were not acted upon by management.