EXECUTIVE SUMMARY A, INTRODUCTION The earliest reference to the town of Libmanan in Spanish records is the decree issued by Guido de Lavazaris to a certain Sargento on April 3, 1574 entrusting to the latter the administration of the natives of “Libmanan”. The decree paved the way for the creation of Libmanan as Spanish pueblo. The Sangguniang Bayan of Libmanan, on the basis of this decree issued Resolution No. 10-027 adopting April 3, 1574 as the foundation day of Libmanan, ‘The Municipality's vision is to be an Agro-Industrial Center and Tourism Destination in the Province. Its operation mandate as provided for in R.A. 7160 is to serve primarily as a general-purpose government for the coordination and delivery of basic, regular and direct services and effective governance of the inhabitants within its territorial jurisdiction. Its major development goal is to provide its people with good governance, programs and projects that will cater development and contribute to the local and national effort of eradicating poverty, Audit Methodology and Scope of Audit ‘The Financial, Compliance and Value for Money (VFM) audits conducted covered the accounts and operations of the Municipality of Libmanan, Camarines Sur for all Funds for the period January 1 to December 31, 2021 ‘The audit was done on a sampling basis and various techniques were used like verification/confirmation, observation, interview with concerned officials and employees, evaluation of control systems, and other auditing procedures and techniques considered necessary under the circumstances, ‘The audit was focused on the different audit thrusts/areas prescribed by the Local Government Sector of the Commission. B. FINANCIAL HIGHLIGHT B.1 Financial Position and Performance Comparative analysis of the Statement of Financial Position as graphically illustrated showed an increase in its Assets and Government Equity. On the other hand, the Statement of Financial Performance exhibited decrease in both income and expenses.Statement of Financial Position rs to eae soumnooonse in a oe som! aentnanisi oats | wahaeyemsa ‘Statement of Financial Performance foes so 0000.00 zompoo.on0e eer oo a= teammates | Cpariafubae mam! _wapasuos | sassaonn | _sseeaseso 2071 2020 B.2 Sources and Application of Funds The following graphs illustrate the increase of Allotments in General Fund and Special Education Fund for CY 2021. Also, there was a significant decrease in the amount obligated for the current year under both the General Fund and Special Fund. General Fund =2021 #2020Special Education Fund aeeeaen eee oe aes a. a ae eriiay ae Se nee Sor fase ised serera heer a =2021 = 2020 B. 3 Major Program/Projects/Activities undertaken in CY 2021 Some of the major projects implemented by LGU Libmanan during the year are shown in the table below: E ‘Major Activities Amount Improvement of MRF Building P 4,926,998.30 Streetlights Beguito-Mambulo Nuevo 6,411,583.59 Repair/Improvement of Mayor's Office 2,449,280.00 Improvement of MDRR Evacuation Center a 2,418,654.85 Libod I Road Re-blocking 2,053, 826.28 Streetlights Mambulo Nuevo-Beguito Nuevo 4,937,740.60 Improvement of Public Market 2,908,572. 76 Poblacion Drainage Canal 2,429,149.00 Tetatiae oa ~___[28,535,805.38 | ‘The Audit team was only able to inspect the above-listed completed projects as to its existence, condition and physical completeness. C. AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS, We rendered a qualified opinion on the faimess of presentation of the financial statements of the Municipality because the accuracy, existence and reliability of the Property, Plant and Equipment (PPE) account in the net amount of P621.59 million could not be ascertained due to a) variance of P2.11 million between the result of physical count of PPE and the general ledger balance; and b) three (3) parcels of land totaling P40.68 million owned by the LGU were not recognized in the Financial Statements. Also, the Property Office and Accounting Unit were unable to maintain Property Cards (PC) and complete PPE: Ledger Cards, respectively, for each PPE item.D. SUMMARY OF SIGNIFICANT. OBSERVATIONS AND RECOMMENDATIONS For the exceptions cited above, we recommended that Management (a) implement the procedures prescribed under COA Circular 2020-006 dated January 31, 2020 in the conduct of physical count of PPE, recognition of PPE items found at station and disposition for non-existing/missing PPE items for the one-time cleansing of PPE account balances of government agencies to produce a reliable report and PPE balances; (b) direct the Municipal Accountant to record all road networks and its components, based on the Registry of Public Infrastructures, or in its absence, based on the complete Local Road Inventory Report provided with complete description and cost segregation of the road components and provide proper disclosure of the road networks in the Notes fo Financial Statements; (c) direct the GSO to maintain an updated Local Road Inventory and Road Map and keep a complete Local Road Network Property Card of all roads within its area of jurisdiction; (d) require the Inventory Committee to conduct physical inventory of local roads, highways and bridges within its area of jurisdiction which were acquired thru purchase, construction or donations; and (¢) require coordination and reconciliation of records among the Offices of the Municipal Accountant, General Services and Municipal Assessor for the accurate recording of real properties owned by the LGU Libmanan. The Audit Team has communicated the observations and recommendations with the Auditee through the issuance of Audit Observation Memorandum (AOMSs) and discussed them with the agency officials during the exit conference conducted on March 11, 2022. Their comments and explanations were incorporated in the report, where appropriate. The following are the significant observations together with the corresponding recommendations: 1, The validity, existence, and accuracy of the recorded Inventory accounts totaling P1,319,992.80 as of December 31, 2021 cannot be established due to non- compliance with some rules and regulations in the conduct of the physical count of goods and errors in recording of inventory transactions. We recommended that Management require the: a. OIC-GSO to conduct semestral counts of Inventory items in the presence of all members of the Inventory Committee and based on the timing prescribed by the Commission, and to ensure proper and complete documentation of the results of the count to facilitate reliable reconciliation between GSO records and Accounting Office records, b, Municipal Accountant to prepare adjusting entries to properly classify the purchase of semi-expendable items in CY 2021 and to ensure correct recording in the succeeding procurement of semi-expendable properties; and¢. Municipal Accountant to ensure correct recording of issuances of inventories held for distribution in the succeeding periods. 2. Long outstanding liabilities amounting to P10.50 million remained in the books for over two years. We recommended that Management require the Municipal Accountant to: a. send confirmation letters to creditors to prove the existence of these liability accounts; and b, ensure that claims are substantiated with complete documentation, otherwise revert said balances to related account. 3. ‘The Municipality was not able to implement three projects budgeted at P19.34 million representing 20 per cent of the total number of priority development projects under the 20% Development Fund (DF) for CY 2021 We recommended that Management: a. fully implement all uncompleted projects as of December 31, 2021; and b. execute all projects within the time frame programmed for their completion to effectively and timely extend to the constituents the benefits of the agency’s development project. E, STATUS OF AUDIT SUSPENSIONS, DISALLOWANCES AND CHARGES Partitatart Balances as i CY 2021 Balances as of ss of 01/01/2021 Issued. Settled 12/31/2021 Notice P 0.00] P 0.00 P P00) Notice 29,660.79! 0.00) 29,660.79| Notice of Charge 00) 0.00) 0.00) Total | P_ 29,660.79] 0.00) F [29,660,791 F. STATUS OF IMPLEMENTATION BY THE MUNICIPALITY OF PRIOR YEARS’ AUDIT RECOMMENDATIONS, Of the 39 audit recommendations embodied in the previous years’ audit reports 13 were fully implemented, 20 were partially implemented and the remaining six were not implemented as of December 31, 2021