REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT
REGIONAL OFFICE NO. XII
PROVINCE OF SOUTH COTABATO
PROVINCIAL SATELLITE AUDITING OFFICE
Provincial Capitol Compound, Koronadal City

Office of the Auditor – LGS-C, Audit Team No. R12-02

AOM No. 2022-006(2019-2021)

Date: September 1, 2022

AUDIT OBSERVATION MEMORANDUM (AOM)

FOR : HON. FRANCIS G. BARRIENTOS JR

Sangguniang Kabataan Chairperson
Barangay Sta. Cruz
Koronadal City, South Cotabato

Attention : SK Treasurer

SK Kagawad/ BMO

Barangay Treasurer and Barangay Chairperson

We have verified the financial reports and documents of the Barangay Government of
Sta. Cruz, pertinent to the Sangguniang Kabataan (SK) Fund for the period CY 2019-2021, and
observed the following:

Sangguniang Kabataan accounting and budget records, financial

statements/reports, annual program accomplishment, and various
Disbursement Vouchers and supporting documents, were not completely
prepared and submitted to the Commission on Audit, contrary to pertinent
provisions of the Handbook of the Financial Transactions of the Sangguniang
Kabataan (HFTSK), thus, a manifestation of deficiency on carrying out fiscal
responsibilities by the concerned SK officials and likewise on the management
of SK Fund.

To ensure proper management of Sangguniang Kabataan (SK) funds and properties,

the HFTSK was issued to provide the accounting policies, guidelines, procedures, forms,

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registries, registers, records and reports. Item 3.21 of the HFTSK enumerates the required SK
accounting and budget records, as follows;

“3.21.1. Register of Cash Receipts, Deposits and Other Related Financial

Transactions (RCRD) to be maintained by the SK Treasurer;
3.21.2. Register of Cash in Bank and Other Related Financial Transactions (RCB)
to be maintained by the SK Treasurer;
3.21.3. Registry of Budget, Commitments, Payments and Balances (RBCPB) to be
maintained by the BMO; and
3.21.4. Registry of Specific Purpose Fund, Commitments, Payments and Balances
(RSPFCPB) to be maintained by the BMO.”

Also, section 10.1.1 of the same handbook provides the financial statements and other
reports that should be prepared and submitted to COA, as follows;

a. Monthly- Bank Reconciliation Statements

b. Quarterly- Statement of Receipts and Payments (QSRP), Report of Accountability
for Accountable Forms (RAAF), Summary of Budget, Commitments, Payments
and Balances and Summary of Specific Purpose Fund, Commitments, Payments
and Balances.
c. Semi Annually- Report on Inventory of Purchased Supplies and Materials and
Report on Inventory of Donated Supplies and Materials
d. Annually- Statement of Receipts and Payments (ASRP), Statement of Comparison
of Budget and Actual Amounts, Report on Inventory of Purchased Property and
Equipment, Report on Inventory of Donated Property and Equipment and Notes
to Financial Statements.

Likewise, section 10.1.5 of the same handbook states that the SK shall submit the
annual and end-of-term program accomplishments and financial reports to the SB and
present the same during the KK assembly; copy furnished the Local Government Operations
Officer, Local Youth Development Council, National Youth Commission (NYC) and the COA
Auditor concerned in accordance with the forms prescribed by the COA for financial reports
and by the DILG and NYC for the annual and end-of-term program accomplishments reports.

However, contrary to the above stated regulations, the SK officials were not able to
submit completely the required SK accounting and budget records, financial statements and
reports for CYs 2020 and 2021. Moreover, annual program accomplishment reports for CYs
2019 to 2021 were not submitted to the Commission. Also, SK DVs and its supporting
documents for month December 2021 were not submitted (see Annex A for the detailed list
of latest submission of reports). Audit showed that there were utilizations of the fund in the
audited years, as enumerated below;

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 Table 1 – Utilization of the Sangguniang Kabataan for CYs 2019, 2020 and 2021

Total Utilization (based on

Year Balance
Appropriation DVs vouched)
2019 1,146,000.00 1,113,468.75 32,531.25
2020 1,300,000.00 1,288,079.50 11,920.50
2021 1,435,800.00 1,411,742.00 24,058.00

Amounts of utilization were based on vouching by the audit team through

disbursement vouchers, thus utilization figures, even had the audit team really captured the
total disbursements, could not likewise be counterchecked due to absence of year-end
accomplishment reports. In CY 2021, utilization amounts were only up to month of
November due to the non-submission of DVs for the month of December, while the
appropriation amounts were based on the annual budget submitted by the Barangay.

Also, the audit was precluded from ascertaining propriety of disbursements, more so
in reference against the corresponding budget appropriation since the obligation requests
were not specific as to which appropriation the expenses referred to.

It was further learned that in the last quarter of 2019, the SK funds were already
transferred to the account of the Sangguniang Kabataan, thus the aforesaid reports should
have been prepared and submitted by the SK since that period when pertinent cash and
property accountabilities were already transferred to the SK.

In an interview with the SK Chairman, she was amenable of the noted deficiencies.
She mentioned that the accounting and budget records and the financial statements were
indeed not prepared by the SK since they were not yet fully knowledgeable of the preparation
thereof and they were preoccupied with the preparation of reports for other agencies. The SK
Chairman also said that the accomplishment reports were already prepared but it was only
submitted to the Local Government Operations Officer (LGOO). With regard to the
unsubmitted DVs and the supporting documents, the SK Chairperson averred that they were
already preparing the submission of DVs of December of 2021. It was mentioned that some
transactions of SK lack necessary supporting documents, thus resulted to delayed submission
of the report.

Attention is invited on section 10.1.6 under the HFTSK, to wit:

“Failure on the part of the SK officials concerned to submit the documents and
reports required in this Handbook shall automatically cause the suspension of
payment of their salaries until they shall have complied with the requirements.
(Paragraph 2, Section 122 of PD No. 1445)”

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 Absence of the Sangguniang Kabataan accounting and budget records, financial
statements and reports and annual program accomplishment reports, hinder the audit team in
timely and proper review, evaluation and verification of the SK budgets, financial reports,
and utilization of SK funds. Moreover, such manifest deficiency on carrying-out fiscal
responsibilities by the concerned SK officials and likewise on the management of SK Fund,
which entails doubt on the propriety of SK transactions and fund utilizations undertaken.

Consequently, the non-submission of the required reports will result to automatic

suspension of salaries of the SK Officials in accordance with the provision stated in the
HFTSK.

Therefore, we recommend that the SK Chairman together with the concerned

SK officials, who are responsible and whom expected to be knowledgeable of the fiscal
guidelines set forth in the HFTSK through several seminars thereon, to religiously
prepare and submit the accounting and budget records, financial statements and other
reports to the Commission on Audit for proper review and evaluation.

We also recommend that the annual program accomplishments report of the

Sangguniang Kabataan be submitted to the Sangguniang Barangay and present the
same during the KK assembly, copy furnished the LGOO, Local Youth Development
Council (LYDC), Commission on Audit (COA) and the National Youth Commission, in
accordance with relevant rules and regulations.

Moreover, we further recommend that the Barangay Officials concerned shall

consider application of section 10.1.6 of the HFTSK, with regard to the withholding of
the salary of the SK Chairperson and concerned officials until the SK have complied
and submitted the mandatory requirements.

May we have your comments on the foregoing audit observation within five (5)
calendar days from receipt hereof. If not replied within the prescribed period, we will
consider the observation to be duly accepted by management.

ANGEL DAN G. CABIDOG

State Auditor III
Audit Team Leader.

ANA MAY R. BELLA

State Auditor IV
OIC- Supervising Auditor
Proof of Receipt of AOM:

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