PART II – OBSERVATIONS AND RECOMMENDATIONS

FINANCIAL AND COMPLIANCE AUDIT

COVID-19 Fund Receipt, Allocations and Utilizations

1. The Municipality appropriated the total amount of ₱43,826,637.76 in CY 2021

for the implementation of COVID-19 related programs, projects, and activities (PPAs),
of which a sum of ₱32,164,942.93 was utilized during the year, in compliance with
Local Budget Circular (LBC) No. 124 dated March 26, 2020. Moreover, the LGU has
substantially complied with the guidelines of DOH for the implementation of the
COVID-19 vaccination program, resulting in 19,717 fully vaccinated individuals or
39.41% of the target population as at December 31, 2021. However, the receipt and
distribution of donated and procured inventories were not recorded in the books
inconsistent with COA Circular No. 2014-002 dated April 15, 2014, Section 114 of the
Manual on NGAS for LGUs, and IPSAS 12, resulting in the understatement by
undetermined amount of the year-end inventories.

1.1. Based on records as at December 31, 2021, the Municipality pooled from various
sources a total of ₱43,826,637.36 and allocated it for COVID-19 responses in accordance
with the following legal and regulatory supports:

Fund Source Amount Legal Basis

Annual Budget (Special Purpose
Fund for COVID PPAs)
Annual Budget (SPF-Barangay
Health Program)
MOOE (RHU) 5-02-03-080
Supplemental Budget No. 01
Supplemental Budget No. 3
Supplemental Budget No. 6
Supplemental Budget No. 7
70% LDRRM Fund
Total
Appropriation Ordinance No. 661, series
₱1,000,000.00
of 2020, dated December 14, 2020 (An
ordinance authorizing the annual budget
2,376,150.00
of the LGU of Rizal, Nueva Ecija for
818,120.00 fiscal year 2021)
Appropriation Ordinance No. 665, series
10,000,000.00
of 2021, dated April 12, 2021
Appropriation Ordinance No. 671, series
10,000,000.00
of 2021, dated August 2, 2021
Appropriation Ordinance No. 678, series
13,680,000.00
of 2021, dated November 3, 2021
Appropriation Ordinance No. 683, series
1,000,000.00
of 2021, dated December 20, 2021
Resolution No. 036, series of 2020, dated
4,952,367.76
October 26, 2020
₱43,826,637.76

1.2. Of the said amount, the Municipality utilized ₱32,164,942.93 or 73.39% during
the year, as detailed below:

PPAs Appropriation Utilization Balance

1. Relief Goods & Food Supplies for COVID-19 ₱9,017,376.10 ₱5,710,560.40 ₱3,306,815.70
positive patients & closed contacts
2. Purchase of PPEs & Medical Supplies for 7,429,038.29 4,896,088.29 2,532,950.00

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 PPAs Appropriation Utilization Balance
COVID-19 Operation
3. Meals & Snacks for COVID-19 patients & 6,781,144.87 4,667,525.00 2,113,619.87
COVID-19 Action Team
4. Purchase of Medicines for COVID-19 Operation 534,000.00 90,159.65 443,840.35
5. Purchase of Disinfection Supplies 1,500,000.00 1,245,934.00 254,066.00
6. Purchase of COVID-19 Test Kits & RT-PCR 5,950,000.00 4,190,400.00 1,759,600.00
7. Purchase of Hygiene Kits 1,000,000.00 414,960.00 585,040.00
8. Financial Assistance 3,300,000.00 2,877,000.00 423,000.00
9. Vaccination Program 1,226,200.00 1,194,347.00 31,853.00
10. Training & Seminars 49,000.00 49,000.00 0.00
11. Wages of COVID-19 Action Team (Job Orders) 3,376,150.00 3,376,150.00 0.00
12. Overtime & Night Pay (Health Workers & 1,000,000.00 970,336.49 29,663.51
COVID Action Team)
13. Other COVID-related Operational Expenses 763,728.50 589,242.50 174,486.00
14. Construction of COVID Team Headquarters 400,000.00 398,929.60 1,070.40
15. Renovation of Evacuation Center/Isolation 1,500,000.00 1,494,310.00 5,690.00
Facility
Grand Total ₱43,826,637.76 ₱32,164,942.93 ₱11,661,694.83
Utilization Rate 73.39%

1.3. As can be gleaned from the table above, most of the funds were spent on the
procurement of relief goods and food supplies, PPEs and medical supplies, COVID-19
test kits, and other expenses in relation to the COVID-19 Vaccination Program.

1.4. Post-audit disclosed that the procurements were made through public bidding,
small value procurement or shopping generally in accordance with R.A. No. 9184 and its
RIRR

1.5. Likewise, the Municipality was able to construct a COVID team headquarters and
renovate an evacuation center/isolation facility during the year, as shown in the following
photos taken during the ocular inspection:

COVID Team Headquarters at Brgy. Renovation of Evacuation

Poblacion West - ₱398,929.60 40 Center/Isolation Facility - ₱1,494,310.00
1.6. In accordance with the DILG and DMB Joint Memorandum Circular No. 02 dated
March 30, 2020, the entirety of the COVID-19 related PPAs and expenses funded by the
Municipality were included in the Municipality's Annual Investment Program (AIP) and
Supplemental AIPs for CY 2021.

1.7. During the year, the Municipality also launched its vaccination campaign through
the Resbakuna Program. The Department of Health (DOH) established the Philippine
National Deployment and Vaccination Plan for COVID-19 Vaccinations, which provides
operational instructions for the implementation of the COVID-19 vaccine deployment
and vaccination program, to ensure the efficient and organized deployment of vaccines.

1.8. With the view of strengthening the implementation of the immunization program
and ensure the success of the national vaccine deployment program in delivering safe,
effective, and accessible vaccines, the Office of the Municipal Mayor issued Executive
Order No. 02, series of 2021 on February 19, 2021, constituting the Rizal, Nueva Ecija
COVID-19 Vaccine Task Force (RNE-COVAC) headed by the Municipal Mayor as
Chairman and the Municipal Health Officer as Co-Chairman together with the concerned
department heads. It is composed of the Local Vaccination Operation Center Team, the
Finance, Cold Chain and Logistics Management Team, the Coordination Team, the
Vaccine Safety, Surveillance and Response Team and the Communication and
Partnership Team.

1.9. The Municipality received COVID-19 vaccines from the Provincial Health Office
(PHO), supported with Property Transfer Receipts detailing the brand of vaccine and
number of vials received. In addition, the PHO also provided ancillary supplies such as
syringes and cotton pads.

1.10. As of December 31, 2021, the LGU received 14,467 first dose vials, 13,363
second dose vials, and 205 booster dose vials, for a total of 28,035 vials of COVID-19
vaccinations.

1.11. Based on the COVID-19 Vaccination Daily Report submitted by the RHU, the
Municipality of Rizal had administered 27,045 cumulative 1st doses, representing 54.06
percent of the target population, and 19,717 cumulative 2nd doses, representing 39.41
percent of the target population as at December 31, 2021. Following is the summary of
the aforementioned report:

Month 1st dose 2nd dose % Vaccinated % Fully

with At Least Vaccinated
One Dose
March 96.00 - 0.19% 0.00%
April 349.00 34.00 0.70% 0.07%
May 1,323.00 343.00 2.64% 0.69%
June 1,127.00 395.00 2.25% 0.79%
July 2,912.00 643.00 5.82% 1.29%

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 Month 1st dose 2nd dose % Vaccinated % Fully
with At Least Vaccinated
One Dose
August 1,669.00 802.00 3.34% 1.60%
September 1,764.00 1,487.00 3.53% 2.97%
October 5,606.00 3,727.00 11.21% 7.45%
November 7,475.00 5,283.00 14.94% 10.56%
December 4,724.00 7,003.00 9.44% 14.00%
Total 27,045.00 19,717.00 54.06% 39.41%
Target 70% Population: 50,030

1.12. The Municipality's initiatives to provide substantial vaccine information and

knowledge to the barangays lessen people's concerns over vaccine safety and efficacy,
vaccine brand hesitancy, and social media disinformation, which resulted in a steady
increase in the number of fully immunized residents of the Municipality every month as
presented in the graph below.

1.13. The Audit Team acknowledged Management's efforts to provide funding to

contain the spread of COVID-19 and to continue delivering essential services to its
affected constituents.

1.14. However, review of pertinent records disclosed the inability of the Municipality to
report in its financial statements the cost of the donated and procured inventories out of
the COVID-19 funds. The accounting and reporting guidelines in the receipt and
utilization of in-kind donations are provided under COA Circular No. 2014-002 dated
April 15, 2014.

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1.15. From show that from March to December 2021, the LGU received from PHO-
DOH its vaccine requirements for the COVID-19 vaccination program. Based on RHU
records, the vaccines received during the year as at December 31, 2021 are as follows:
COVID-19 Vaccine No. of vials received during the year
1st dose 2nd dose Booster dose Total
SinoVac 10,917.00 10,777.00 0.00 21,694.00
Astra-Zeneca 488.00 360.00 0.00 848.00
Pfizer (Adult) 1,894.00 1,589.00 205.00 3,688.00
Janssen 530.00 0.00 0.00 530.00
Sinopharm 375.00 375.00 0.00 750.00
Moderna 263.00 262.00 0.00 525.00
Total 14,467.00 13,363.00 205.00 28,035.00

1.16. Further tracing of these inventories to the records maintained by the Supply
Officer and the Municipal Accounting Office disclosed that the donated vaccines and
ancillary supplies were not recognized in the books, inconsistent with the above-
mentioned Circular. The lapse has understated the related inventory accounts in amount
equivalent to the cost of inventories still at hand as at year-end. Nonetheless, the
existence of such inventories was not readily determined due to the absence of physical
inventory count as at said time.

1.17. The RHU explained that they were maintaining stock cards for their vaccines and
supplies but was not aware of the need to inform the Municipal Accounting Office and
the Supply Officer of the receipt and issuance of the same.

1.18. The aforementioned conditions resulted in the misstatement of the affected

inventory accounts as at end of the reporting period.

1.19. Overall, although considerable efforts were exerted to enhance the public
acceptance of the COVID vaccines, the low vaccination rate reflects the need for further
actions and persuasive interventions for a more successful roll out of the vaccination
program
1.20. We recommended and the LCE agreed to instruct the (a) Municipal Health
Officer (MHO) to: (i) strengthen its campaign and widen the scope of its
information drive to generate more demand for the vaccine and continue its
vaccination roll out until the desired local herd immunity is attained; (ii) render a
monthly report to the Accounting Office on the receipt, issuance and balances of
vaccines and other inventories directly received from outside sources; and (b)
Municipal Accountant in coordination with the MHO to determine and recognize in
the books the full cost of the ending inventory of vaccines as at year end and to
henceforth record future receipts and issuances of the same.

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Misuse/misappropriation of tax collections - ₱732,262.95

2. Management was not able to strictly implement the internal controls on

collections and accountable forms as prescribed under the Local Treasury Operations
Manual (LTOM) dated October 1, 2007, which resulted in the misuse/misappropriation
of ₱732,262.95 tax collections covering the period from January 2, 2021 to February
22, 2021. Of the said amount, ₱349,096.35 was restituted leaving an unsettled balance
of ₱383,166.60 as at December 31, 2021.

2.1. On November 25, 2021, the Audit Team conducted a cash examination in the
Office of the Municipal Treasurer, particularly on the cash and accounts of the
Accountable Officer (AO) Ms. Emily E. Villanueva, Bookbinder I, where a cash shortage
of ₱533,166.60 was discovered. The said shortage was arrived at as follows:

Particulars Amount
Beginning balance of accountability as of January 1, 2021 per ₱ 0.00
cash book
Add: Debits to accountability from January 1, 2021 to November 7,974,625.45
25, 2021
Less: Credits to accountability from January 1, 2021 to (7,441,458.85)
November 25, 2021
Balance of accountability as of November 25, 2021 533,166.60
Less: Cash and valid cash items produced by the AO and counted 0.00
by the Audit Team
Shortage ₱533,166.60

2.2. A demand letter for the restitution of the said amount was served to the said AO
on February 9, 2022, which was received on February 11, 2022.

2.3. Further audit disclosed that the shortage was sustained due to lapse in monitoring
the enforcement of the following control procedures, among others, that are designed to
prevent the loss or misuse of collections and accountable forms:

a. Regulated issuance of official receipts to cash collecting officers;

b. Daily remittance of collections to the liquidating officer;

c. Preparation of Consolidated Report of Accountability for Accountable Forms

(CRAAF) and Reports of Accountability for Accountable Forms (RAAF) by
the Municipal Treasurer (MT) and AOs, respectively;

d. Maintenance of control logbook for accountable forms, which provides

complete and relevant information; and

e. Regular verification of collections and accountable forms at the Business

Permits and Licensing Office (BPLO) and with other regular collectors;

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2.4. The intervening circumstances from the day the said AO was designated as
Revenue Collector until the final remittance of collection was made following the Audit
Team’s conduct of cash examination are presented below.

Date Event
July 6, The Municipal Mayor issued Special Order No. 10, designating Ms. Emily E. Villanueva,
2020 Bookbinder I as a Revenue Collector in addition to her current work as Bookbinder I.
January 4, Management assigned the said AO to the Business Processing and Licensing Office
2021 (BPLO) to assist in the business tax collection.
February The Local Revenue Collection Officer (LRCO) discovered that the said AO had in her
19, 2021 possession three pads of Official Receipts (ORs) at that time, which is contrary to the
practice at the Treasury Office. The OR pads are composed of the following:

Accountable Stub Serial Number No. of Date Issued to AO

Form Number ORs
AF 51 2021-56 6862794-6862800 7 January 25, 2021
AF 51 2021-78 6863851-6863900 50 February 1, 2021
AF 51 2021-116 6907751-6907800 50 February 11, 2021
Total 107

Although an AO is allowed a maximum of two OR pads at a given time, he/she is required

to turn-in the full collections and the used ORs before a new pad is issued.

A verbal demand was reportedly made of the said collector for the remittance of
collections and the return of the OR pads.
February Having been informed of the failure of the said AO to heed the instruction of the LRCO,
22, 2021 the Municipal Treasurer (MT) made the same verbal demand and required the immediate
remittance of collections and return of the ORs in the AO’s possession.
February Ms. Villanueva no longer reported to work.
23, 2021
February The MT sent a demand letter dated February 24, 2021 to the said AO, which was received
24, 2021 on March 3, 2021.
March 2, Another demand letter was sent to Ms. Villanueva, requiring her to present the unremitted
2021 receipts and remit the corresponding collections until 12:00 noon on March 3, 2021. The
said demand letter was received by the said AO on March 3, 2021.
March 5, The third demand letter was sent, giving the AO until March 8, 2021 to present the
2021 unremitted receipts and collections. The said demand letter was received by the said AO
on March 8, 2021.
March 10, The fourth demand letter signed by the MT was sent to and received by the said AO on
2021 March 10, 2021.
Ms. Villanueva surrendered all accountable forms in her possession, composed of 94
duplicate and triplicate copies, 13 complete set of unused ORs, and four checks amounting
to ₱95,611.34. Said checks were part of the ₱732,262.95 collections covered by the 94
issued ORs.
March 11, The Municipal Mayor issued Office Memorandum No. 06 prohibiting the said AO from
2021 engaging in any collecting transaction of the Municipality.
March 18, The Municipal Treasurer sent another demand letter to the AO ordering the return of all
2021 unremitted collections by 12:00 noon of March 19, 2021.
March 19, The AO returned ₱100,000.00 and provided a letter explaining the
2021 circumstances surrounding the missing funds, admitting to misappropriating/misusing the
funds, and promising to pay her remaining unremitted collections by April 30, 2021.
May 31, The AO remitted ₱3,485.01 in partial settlement of her accountabilities.
2021

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 Date Event
November The Audit Team conducted an examination on the cash and accounts of Ms. Villanueva.
25, 2021
December The AO again made partial remittance, in the amount of ₱150,000.00
23, 2021
xxx

2.5. At a glance, the above timelines are depicted in the following figure:

2.6. The Audit Team noted that it was the practice at the BPLO to maintain
photocopies of original ORs issued in payment of application for business permit and
related fees.

2.7. In the further review of the returned ORs, the Audit Team discovered inconsistent
dates between the photo copies of the originals provided by the BPLO and the duplicates
as observed in the 74 ORs listed below:

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 OR Date OR Date Amount
Serial Number Quantity
(Original Copy) (Duplicate Copy) Collected
01/28/2021 to
4 02/15/2021 ₱48,724.00
6862794 6862797 01/29/2021

6862799 6862800 2 01/29/2021 02/15/2021 11,391.00

02/02/2021 to
12 02/15/2021 89,880.92
6863851 6863862 02/03/2021
02/03/2021 to
6 103,918.00
6863863 6863868 02/04/2021 No Date

6863870 6863873 4 02/05/2021 No Date 43,098.00

6863875 6863877 3 02/08/2021 No Date 63,950.00

02/08/2021 to
8 68,144.00
6863879 6863886 02/10/2021 No Date
02/10/2021 to
13 108,762.00
6863888 6863900 02/11/2021 No Date

6907751 6907752 2 02/11/2021 No Date 8,605.00

6907754 6907758 5 02/11/2021 No Date 37,742.00

6907760 6907763 4 02/11/2021 No Date 25,054.50

02/11/2021 to
3 12,075.00
6907766 6907768 02/16/2021 No Date
1 02/18/2021 1,000.00
6907774 6907774 No Date
1 02/18/2021 1,000.00
6907776 6907776 No Date
1 02/18/2021 1,000.00
6907778 6907778 No Date
1 02/18/2021 1,000.00
6907780 6907780 No Date
1 02/19/2021 21,476.25
6907783 6907783 No Date
02/19/2021 to
3 19,886.45
6907785 6907787 02/22/2021 No Date

Total 74 ₱666,707.12

2.8. The remaining unverified 20 ORs are for those transactions where the photocopy
of the original OR is not required by BPLO, although its validation is still in process as of
this writing.

2.9. The inconsistencies of dates noted in the foregoing ORs manifests an act that
violates Section 59(F) of the Local Treasury Operations Manual. Said regulation states
that in preparing official receipts, all copies of each receipt must be exact copies or
carbon reproductions of the original in all respects. It could also be interpreted as a
deliberate alteration of actual date of OR to a later date to allow diversion of collection to
other purposes and replacing the amount diverted by the collection from the next payees.

2.10. As earlier mentioned, the commission of the above act was made possible due to
the following lapses in internal control:

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a. Inability to regulate the issuance of ORs to collectors

• As required, collectors/tellers shall submit requests for accountable forms

to the MT through an Invoice and Receipt of Accountable Forms (GF
33A) and sign in the permanent logbook. Prior to issuance, the MT will
verify that the previously issued pad of OR has been returned and that all
associated collections have been remitted.

• In the absence of the MT, the MT designated one personnel that will
handle the issuance of AF who reportedly was duly informed of the
processes before a new pad of OR is issued to a collector.

• However, a breakdown of the above internal control procedures was noted

since new pad of ORs were found to have been issued to the subject AO
without requiring the return of previous ORs issued in her name.

b. Non-preparation of Consolidated Reports of Accountability for

Accountable Forms (CRAAF) and Reports of Accountability for Accountable
Forms.

• Section 59 (R) of the LTOM provides that treasurers/collectors/ tellers and

other accountable officers shall render the Report of Accountability for
Accountable Forms (RAAF) at the end of the month for consolidation by
the local treasurer. The consolidation thereof shall be prepared and
reported by the Local Treasurer in the Consolidated Report of
Accountability for Accountable Forms (CRAAF), which shall be
accompanied by the individual reports of revenue collectors and that of the
treasurer. These reports shall be submitted to the unit auditor concerned
for verification not later than the fifth day of the ensuing month.

• During the cash examination, we observed that the MT did not prepare a
CRAAF to report on the movement and status of accountable forms.
Similarly, the RAAF was not prepared by the respective accountable
officers. Instead, the monthly RAAFs were prepared by one collecting
officer for all ORs, including those under the accountability of another
collecting officer. This rendered difficulty in determining and monitoring
the movement, status of issuances, and accountability for the accountable
forms of individual collectors.

c. Permanent record book for accountable forms (AF) did not provide
critical and relevant information

• Section 59 (L) of the aforementioned Manual states that:

Local Treasurers accountable for receipts, stamps and other accountable

forms in their possession or in the hands of deputies should show, among

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 other things, the whereabouts of the accountable forms with which they
are charged, the name and title of the officer or employee to whom such
forms have been given, the evidence of the receipt and subsequent sale
and issuance of the same. The record books shall contain the following
column headings:

1. Booklet Number/Quantity (in case of official receipt without money

value);
2. Serial Number/Total Value;
3. Name (in print) of Accountable Officer to whom issued;
4. Signature of Accountable Officer;
5. Date received by Accountable Officer; and
6. Date reported totally used, sold and issued

These columns shall be utilized for recording consecutively all

accountable forms in the order they are received by the Accountable
Officer.

• Our review of the permanent record book for accountable forms revealed
the inconsistency of the format with the above-mentioned instructions. The
format they used has no column dedicated for the Date the AFs were
reported as totally used, sold, and issued thus, making it difficult to
monitor if the AF has already been issued and cleared. The non-inclusion
of this column prevented the person responsible from determining whether
the previous ORs were already totally used up before issuing a new AF.

d. Non-verification of collections and accountable forms

• Section 60(B) of the LTOM provides that: The Treasurer/Cashier shall

verify the report of collections and deposits as to initial balances on hand,
receipts, sales and issues, and the new balances on hand; make a physical
count of the accountable forms remaining in the custody of the
Collector/Teller, and check the same to the new balances on hand column.
He shall indicate his verification by affixing his signature at the back of
the triplicate copy of the last official receipt issued. He shall count the
money turned over to him and sign the certification and receipt portion of
all copies of the Report of Collections and Deposits.

• We observed that the LRCO as liquidating officer, did not verify the
collections with the BPLO, make a physical count of the AF remaining in
the custody of the Collector/Teller, and affix her signature at the back of
the triplicate copy of the last OR issued.

• Had Section 60(B) of the LTOM been followed by Management, the

fraudulent act of misappropriating collections could have been detected
earlier or discouraged outright.

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2.11. Relatedly, cases of loss of funds and property in the hands of accountable
officers are secured through the bonding of said AOs, among other control procedures.
This is prescribed under LTOM and Section 101 of the Presidential Decree No. 1445,
which provides that “every officer of any government agency whose duties permit or
require the possession or custody of government funds or property shall be accountable
therefor and for the safekeeping thereof in conformity with law; and every AO shall be
properly bonded in accordance with law”.

2.12. Be that as it may, the said safeguard procedure was rendered inadequate because
of the insufficiency of the fidelity bond coverage of the said AO.

2.13. Validation of pertinent documents and collection analysis reveals that the AO's
maximum fidelity bond coverage of ₱15,000.00 was insufficient to cover the highest and
daily average amounts of cash accountability for CY 2021, which were ₱1,453,147.80
and ₱90,284.86, respectively.

2.14. We recommended and the LCE agreed to direct the (a) Accountable Officer
to return immediately the remaining misappropriated funds in the amount of
₱383,166.60 without prejudice to the filing of appropriate charges against the said
person; (b) MT to (i) monitor the enforcement of internal control procedures on
collections as set forth in various regulations emanating from within the LGU itself
and oversight bodies; and (ii) review and revisit the LTOM and attend training and
seminars in relation to treasury operations.

Unreliable Property, Plant and Equipment (PPE) balances

3. The completeness, accuracy and existence of Property, Plant and Equipment

(PPE) with a net book value of ₱ 478,535,512.68 or 71.52% of the total assets of the
LGU as at December 31, 2021 cannot be ascertained due to the continued inability
of the Municipality to conduct physical count of PPE and non-maintenance of the
Property Cards and PPE Ledger Cards, contrary to Sections 119, 120 and 124,
Volume I, of the Manual on New Government Accounting System for Local
Government Units.

3.1. Section 119, Volume I of the Manual on the New Government Accounting
System for Local Government Units provides that the General Services Officer (GSO) or
the Local Treasurer, as the case maybe, shall number each type of supplies and maintain
Stock Cards per stock number. He shall likewise maintain Property Cards per category of
property, plant and equipment.

3.2. Also, Section 120 thereof prescribes that the Chief Accountant shall maintain
Supplies Ledger Cards per stock number; Property, Plant and Equipment Ledger Cards
for each category of assets; and Real Property Ledger Cards for land.

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3.3. Further, Section 124 paragraph 2 of the same Manual requires that the physical
count of the property, plant and equipment by type shall be made annually and reported
on the Report on Physical Count of Property, Plant and Equipment (RPCPPE). This shall
be submitted to the auditor concerned not later than January 31 of each year.

3.4. After the physical inventory taking, the Inventory Committee shall reconcile the
results of the count with the property and accounting records. The inventory listing of the
equipment shall be compared with the property cards maintained by the supply/property
officer as against the equipment ledger cards maintained by the accounting and the total
thereof shall be reconciled with the control accounts in the general ledger.

3.5. As at December 31, 2021, the PPE account of the Municipality was reported at
carrying amount of ₱478,535,512.68. It accounted for 71.52% of the Municipality’s
assets of ₱669,123,358.74.

3.6. Verification of records disclosed that the Municipality did not conduct the
physical count of PPE. This was admitted by Management and attributed the same to lack
of available staff to undertake the count despite the existence of the Municipality’s
Inventory Committee.

3.7. Likewise, the Treasury Office and the Accounting Office did not maintain
Property cards and PPE ledger cards due to voluminous transactions in said offices and
lack of manpower.

3.8. It could be recalled that the foregoing are reiterations of the prior years’ audit
observations, manifesting Management’s continued inability to conduct the physical
count of PPE, which could have supported their assertions on the valuation and existence
of the accounts as presented in their financial statements.

3.9. It needs re-emphasizing that the maintenance of an updated Property Cards and
Ledger cards for PPE accounts are essential for fiscal control and provision of an efficient
check and balance mechanism between the records of the Treasury Office and that of the
Accounting Office.

3.10. Without these records and the RPCPPE, the Audit Team is precluded from
applying alternative audit procedures that would have ascertained the accuracy of the
reported PPE accounts.

3.11. As such, the accuracy, validity and existence of the PPE accounts in the total
amount of ₱478,535,512.68 as at December 31, 2021 could not be ascertained

3.12. We recommended and the LCE agreed to direct (a) the Inventory Committee
to conduct annual physical count of all properties owned by the Municipality; and
(b) the Property Officer and the Municipal Accountant to prepare and maintain
Property Cards and PPE Ledgers Cards, respectively.

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20% Development Fund

4. The Municipality was able to fully implement 18 out of the 21 development

projects, which utilized ₱43,315,775.36 or 86.62% of its 20% Development Fund (DF)
as at December 31, 2021 thus, stayed on track towards the attainment of its
development goals and continuously promoted a responsive public service to its people.

4.1. Sections 2.2, and 5.0 of the DILG-DBM JMC No. 2017-1 dated February 22,
2017 states that:

2.1 In accordance with Section 287 of RA No. 7160, every LGU shall
appropriate in its annual budget no less than twenty percent (20%) of its annual
IRA [Internal Revenue Allotment] for development project.

2.2 The 20% DF shall be utilized to finance the LGU’s priority development
projects, as embodied in its duly approved local development plans and Annual
Investment Program (AIP), which should be directly supportive of the Philippine
Development Plan and Public Investment Program.

5.0 It is the responsibility of every local chief executive to ensure that the 20%
DF is optimally utilized to help achieve the desirable socio-economic
development and environmental outcomes of the LGU.

4.2. Consistent in its compliance with the aforementioned JMC, the Municipality
appropriated ₱38,023,685.00, or 20% of its IRA of ₱190,118,425.00 in CY 2021, in
addition to ₱11,981,224.21 continuing appropriations, for a total appropriation of
₱50,004,909.21. The said amount was utilized to finance the LGU’s priority development
projects.

4.3. Based on the Reports of Utilization submitted by the Municipal Accountant,

₱43,315,775.36 or 86.62 percent of the total appropriations were utilized during the year.
The breakdown of this amount is as follows:

PPAs Appropriations Utilization Balance Status

A. Current Appropriation
1. Loan Amortization ₱19,665,436.32 ₱16,334,178.33 ₱3,331,257.99 Fully Implemented -
to LBP unutilized amount due
to delayed in approval
of two loans contracted
on August 2021
2. Construction of 4,000,000.00 3,992,885.94 7,114.06 Fully Implemented
Potable Water
System - Brgy.
Casilagan
3. Construction of 4,000,000.00 3,131,252.95 868,747.05 Partially Implemented
Potable Water – waiting for
System - Brgy. San transformer and
Gregorio chlorinator

52
 PPAs Appropriations Utilization Balance Status
4. Construction of 4,000,000.00 3,118,917.95 881,082.05
Potable Water
System - Brgy. Villa
Labrador
5. Concreting of 548,607.78 546,721.91 1,885.87 Fully Implemented
Barangay Road -
Brgy. San Gregorio
(Purok 7)
6. Concreting of 889,761.14 885,369.67 4,391.47
Barangay Road -
Brgy. Aglipay
(Bagong Sikat)
7. Concreting of 1,099,925.86 1,096,475.41 3,450.45
Barangay Road -
Brgy. Bicos (Purok
4)
8. Concreting of 892,315.40 881,059.68 11,255.72
Barangay Road -
Brgy. Estrella
(Purok 5)
9. Reblocking of 1,143,470.50 1,139,437.33 4,033.17
Barangay Road -
Brgy. Poblacion
West (Lozano St.)
10. Reblocking of 1,784,168.00 1,780,107.27 4,060.73
Barangay Road -
Brgy. Poblacion
Norte
Sub-Total Current 38,023,685.00 32,906,406.44 5,117,278.56
Appropriation
B. Continuing Appropriation
11. Installation of Pipes 400,000.00 393,682.00 6,318.00 Fully Implemented
- Brgy. Sta Monica
12. Rehabilitation of 1,433,000.00 1,425,630.84 7,369.16
Drainage - Brgy.
Poblacion East
13. Reblocking of 1,487,000.00 1,481,600.75 5,399.25
Barangay Road -
Brgy. Poblacion
Centro
14. Construction of 358,866.40 322,101.00 36,765.40
Composting Facility
- Brgy. San Gregorio
15. Construction of 4,500,000.00 4,490,157.61 9,842.39
Potable Water
System - Brgy.
Poblacion West
16. Concreting of 172,686.45 171,874.27 812.18
Transfer Station -
Brgy. San Gregorio
17. Construction of 1,500,000.00 0.00 1,500,000.00 Not Implemented
Multi-Purpose Hall -
Brgy. Poblacion
West

53
 PPAs Appropriations Utilization Balance Status
18. Reblocking of 600,000.00 598,733.45 1,266.55 Fully Implemented
Barangay Road -
Lozano St.,
Poblacion West
(Phase II)
19. Reblocking of 400,000.00 398,930.21 1,069.79
Barangay Road -
Nague St., Poblacion
West (Phase II)
20. Reblocking of 500,000.00 498,461.59 1,538.41
Barangay Road -
Brgy. Villa Paraiso
21. Concreting of 629,671.36 628,197.20 1,474.16
Barangay Road -
Brgy. Maligaya
Sub-Total Continuing 11,981,224.21 10,409,368.92 1,571,855.29
Appropriation
Grand Total ₱50,004,909.21 ₱43,315,775.36 ₱6,689,133.85

4.4. As can be gleaned from the above table, out of the 21 PPAs, 18 were completed,
two were partially implemented, and one PPA with a total budgeted amount of
₱1,500,000.00 remained unimplemented, with completion expected in the ensuing year.

4.5. The implementation of the projects was ascertained to be compliant with the
prescribed procurement processes, their payments properly documented, and the
existence of the completed PPAs was more or less validated through an ocular inspection
conducted on February 24, 2022 by the Audit Team, the representative samples of which
are shown in the following photos:

Re blocking of Barangay Road – Lozano

Construction of Potable Water Supply System
St.,Poblacion West (L=125m) - ₱1,143,473.50
– Casilagan - ₱4,000,000.00

54
 Re blocking of Barangay Road – Poblacion Construction of Potable Water Supply System –
Centro - ₱1,487,000.00 Poblacion West - ₱4,500,000.00

4.6. As noted, the Municipality was able to fully implement 85.71% of the planned
development projects during the year, which was relatively higher than the registered
accomplishment last year of 70.00%. Regarding the usefulness of these projects, we
observed during our visual inspection that the constituents had already benefited from the
roads and potable water supply system.

4.7. As for the lone project costing ₱1,500,000.00 and funded from the continuing
appropriations that remained unimplemented as at December 31, 2021, the Municipal
Engineer and BAC Chairman provided the following explanation:

Name of the Project Remarks

Construction of Multi- Date of Bidding: December 20, 2021
Purpose Hall – Barangay Notice to Proceed: December 29, 2021
Poblacion West Reason for delayed implementation: A problem occured in the
project's planned location. Instead of dismantling the old
barangay hall, the Municipality opted to construct a new one at
a different location. The procurement process did not begin
until the location issue was resolved.

4.8. Overall, the Municipality exhibited commendable performance in the allotment

and utilization of its 20% DF, allowing it to stay on track in achieving its development
goals.

4.9. We recommended and the LCE agreed to (a) ensure that all PPAs included
in the 20% Development Fund are fully implemented in accordance with Section 5.0
of the DILG-DBM Joint Management Circular No. 2017-01; (b) Municipal Planning
and Development Officer and Municipal Engineer to regularly monitor the status of

55
project implementation so that necessary interventions may be introduced at the
earliest time.

Local Disaster Risk Reduction and Management Fund (LDRRMF)

5. In CY 2021, the Municipality significantly complied with the utilization and

accounting of the Local Disaster Risk Reduction Management Fund (LDRRMF),
which resulted in high utilization rate of 76.91%, thus the objectives of the fund were
substantially achieved in pursuance of R.A. No. 10121, although minor lapses in the
keeping of stand by funds were noted.

5.1. Section 2(e) of R.A. No. 10121 also known as the Philippine Disaster Risk
Reduction and Management Act of 2010 provides that it shall be the policy of the State to
develop, promote, and implement a comprehensive National Disaster Risk Reduction and
Management Plan (NDRRMP) that aims to strengthen the capacity of the national
government and the local government units (LGUs), together with partner stakeholders,
to build the disaster resilience of communities, and to institutionalize arrangements and
measures for reducing disaster risks, including projected climate risks, and enhancing
disaster preparedness and response capabilities at all levels.

5.2. Further, Section 21 of same act requires that the unexpended LDRRMF be
transferred to a special trust fund solely for the purpose of supporting disaster risk
reduction and management activities.

5.3. For the calendar year 2021, the Municipality appropriated ₱10,715,921.25 which
represented at least 5% of its estimated income from regular sources of ₱214,318,425.00,
to support various disaster risk activities under LDRRMF. Out of this fund, 30% or
₱3,214,776.38 was allotted to Quick Response Fund (QRF), while 70% or ₱7,501,144.87
was for the Mitigation Fund (MF), which is in compliance with R.A. No. 10121 on the
allocation of 5%. The details of the allocated funds are shown below:

Targeted PPAs Budget Amount

Quick Response Fund (30%) ₱3,214,776.38
Mitigation Fund (70%)
A. Disaster Mitigation and Prevention
1. COVID-19 Preventive/Mitigating/Programs & Projects 1,500,000.00
B. Disaster Preparedness
1. Conduct DRRM Trainings and Seminars, Drills, Orientation, 200,000.00
Competition/Olympics
2. Procurement of Medical Supplies 1,200,000.00
3. Information, Education and Communication Campaign Materials 100,000.00
for DRRM-CCA Awareness
4. Maintenance and Operation Expenses in Emergency Operation 300,000.00
Center
5. Procurement of Medicine 500,000.00
6. Procurement of Commodities for Stock Piling 440,000.00
7. Conduct of MDRRMC and Coregroup, Rescue Team and Other 50,000.00
Volunteers regular and emergency meeting

56
 Targeted PPAs Budget Amount
8. Provision of Meals and Snacks for Operation Center Staff, 1,601,144.87
Rescuers and Volunteers
9. Payment of Communication Expenses 100,000.00
10. Purchase of Personal Protective Equipment and Uniforms 200,000.00
11. Provision of Tents and other Emergency Shelter Assistance 300,000.00
12. Other Services/Expenses for Calamity Operation 200,000.00
13. Repair and Maintenance of Search & Rescue Equipment 150,000.00
14. IEC Equipment (Projector, Sound System/Speaker, Laptop) 100,000.00
15. Procurement of Medical Equipment 100,000.00
16. Procurement of Portalet with Septic Tank 460,000.00
Total MF 7,501,144.87
Total Available Disaster Fund ₱10,715,921.25

5.4. The Municipality registered a high utilization rate of 76.91% for the mitigation
fund in CY 2021. A review of pertinent reports showed that it utilized a total of
₱5,768,777.57 out of ₱7,501,144.87 total mitigation fund, leaving an unutilized balance
of ₱1,732,367.30, as computed below:

Available Unutilized
Particulars Utilization
Funds balance
Capital Outlay
COVID-19 Preventive/Mitigating/Programs &
₱1,500,000.00 ₱1,494,310.00 ₱5,690.00
Projects
IEC Equipment (Projector, Sound
100,000.00 0.00 100,000.00
System/Speaker, Laptop)
Procurement of Medical Equipment 100,000.00 0.00 100,000.00
Procurement of Portalet with Septic Tank 460,000.00 432,380.00 27,620.00
Sub Total 2,160,000.00 1,926,690.00 233,310.00
Maintenance and Other Operating Expenses
Conduct DRRM Trainings and Seminars, Drills,
200,000.00 49,000.00 151,000.00
Orientation, Competition/Olympics
Procurement of Medical Supplies 1,200,000.00 1,195,918.29 4,081.71
Information, Education and Communication
100,000.00 16,579.00 83,421.00
Campaign Materials for DRRM-CCA Awareness
Maintenance and Operation Expenses in
300,000.00 228,325.00 71,675.00
Emergency Operation Center
Procurement of Medicine 500,000.00 34,000.00 466,000.00
Procurement of Commodities for Stock Piling 440,000.00 417,376.10 22,623.90
Conduct of MDRRMC and Coregroup, Rescue
Team and Other Volunteers regular and 50,000.00 0.00 50,000.00
emergency meeting
Provision of Meals and Snacks for Operation
1,601,144.87 1,601,144.87 0.00
Center Staff, Rescuers and Volunteers
Payment of Communication Expenses 100,000.00 44,765.81 55,234.19
Purchase of Personal Protective Equipment and
200,000.00 62,700.00 137,300.00
Uniforms
Provision of Tents and other Emergency Shelter
300,000.00 0.00 300,000.00
Assistance

57
 Available Unutilized
Particulars Utilization
Funds balance
Other Services/Expenses for Calamity Operation 200,000.00 192,278.50 7,721.50
Repair and Maintenance of Search & Rescue
150,000.00 0.00 150,000.00
Equipment (Rescue Vehicle)
Sub Total 5,341,144.87 3,842,087.57 1,499,057.30
Grand Total ₱7,501,144.87 ₱5,768,777.57 ₱1,732,367.30

5.5. As shown, out of 17 PPAs included in the LDRRMFIP, nine were fully
implemented for a total cost of ₱1,606,441.57, five PPAs totaling ₱700,000.00 were not
implemented, while three PPAs with the remaining balance of ₱837,721.00 were partially
implemented during the year. The reasons for their partial and non-implementation are
presented below.

PPAs Status Amount Reason

1. IEC Equipment (Projector, Sound
System/Speaker, Laptop)
2. Conduct of MDRRMC and Coregroup,
Rescue Team and Other Volunteers
regular and emergency meeting
3. Conduct DRRM Trainings and Seminars,
Drills, Orientation, Competition/Olympics
4. Information, Education
Communication Campaign Materials for
DRRM-CCA Awareness
5. Procurement of Medical Equipment
6. Procurement of Medicine
7. Purchase of Personal Protective
Equipment and Uniforms
8. Provision of Tents and other Emergency
Shelter Assistance
9. Repair and Maintenance of Search &
Rescue Equipment (Rescue Vehicle)
Total
* U – Unimplemented; P- Partially Implemented
U ₱100,000.00
The equipment was
intended for training,
U 50,000.00
seminars, and other
associated activities, but
P 151,000.00 the MDRRMO hindered
conducting them owing to
and the COVID outbreak.
P 83,421.00
The funds were
U 100,000.00 designated as an
additional fund of the
COVID special-purpose
fund under the General
P 466,000.00 Fund, and management
opted to charge all
COVID-related costs to
the fund until it was
entirely consumed.
Nonetheless, the SPF-
COVID was adequate to
cover COVID-related
P 137,300.00 expenses throughout the
year. As a result, the
monies set aside for
COVID Response under
the LDRRMF were only
partially utilized.
U 300,000.00
The Municipality
appropriated these PPAs
on a yearly basis as
U 150,000.00 standby funds in the event
of a natural disaster.
₱1,537,721.00

58
5.6. Analysis of information vis-à-vis the purpose of the LDRRMF disclosed that the
standby funds for PPAs under the MF could have been maximized were it allocated as part
of the QRF, where it could have been readily applied in the light of the ongoing pandemic.

5.7. Ironically, QRF of ₱3,214,776.38 was also not utilized during the year as it was
treated also as a contingency fund for disaster response. Consequently, the unexpended
balance of ₱4,947,143.68 as at year-end was transferred to the special trust fund in
accordance with Section 21 of R.A. No. 10121.

5.8. The minor lapses notwithstanding, the Municipality in general performed

satisfactorily in its mandate to promote effective responses to disasters through efficient
utilization of the LDRRMF.

5.9. We recommended and the LCE agreed to continue the satisfactory compliance
with the existing regulation on the appropriation and utilization of the 5% LDRRMF
with adequate consideration of factors that would justify the keeping of standby
funds.

Republic Act (R.A.) 9184

6. For CY 2021, the Approved Budget for the Contract (ABC) for the Local Access
Road – Upgrading in Brgy. Poblacion Sur to Poblacion West project was prepared not
in accordance with Volume III of Generic Procurement Manuals or the Manual of
Procedures for the Procurement of Infrastructure Projects, which resulted in the
overstatement by ₱105,916.50 of the project costs which is against the best interest of
the Municipality.

6.1. The Government Procurement Manual was developed pursuant to Section 6 of

R.A. 9184, otherwise known as the Government Procurement Reform Act and its IRR-A.
The section provides for the development of generic procurement manuals and standard
bidding forms that all Procuring Entities must use, once issued.

6.2. This Manual aims to standardize the procurement process, in effect preventing
confusion, ensuring transparency, and enabling procuring entities to conform to the
principles that govern all government procurement activities.

6.3. Volume III of Generic Procurement Manuals or the Manual of Procedures for the
Procurement of Infrastructure Projects provides the following guidelines on the
computation for the ABC of an infrastructure project: According to this Manual:

a. The Contractor’s Profit Margin (CPM) shall be eight percent (8%) of the
Estimated Direct Cost (EDC) for projects with an EDC of more than
₱5Million and ten percent (10%) for projects with an EDC of ₱5Million and
below;

59
 b. The estimates for Overhead, Contingencies and Miscellaneous or OCM, as
percentages of the EDC, shall not exceed the following amounts for different
cost ranges:

Estimated Direct Cost (EDC) OCM, as % of EDC Profit, as % of EDC

Up to PhP5M 15 10
Above PhP5M to PhP50M 12 8
Above PhP50M to PhP150M 10 8
Above PhP150M 8 8

6.4. In CY 2021, the Municipality implemented the project of Local Access Road –
Upgrading in Brgy. Poblacion Sur to Poblacion West with ABC of ₱7,000,000.00. It was
procured through public bidding and awarded for a contract amount of ₱6,990,445.38.

6.5. A review of the ABC and bid forms for this concreting project disclosed non-
observance of the foregoing provisions of the Manual, resulting in an excess contract
price of ₱105,916.50, computed as follows:

Contractor’s Profit Margin (CPM)

Contractor’s
Allowed
Work Item EDC Bid Difference
10% 8%
Pre-Engineering Works ₱30,000.00 ₱3,000.00 ₱2,400.00 ₱600.00
Embankment 95,461.54 9,546.15 7,636.92 1,909.23
Sub Grade Preparation 65,540.88 6,554.09 5,243.27 1,310.82
Aggregate Sub Base Course 393,144.79 39,314.48 31,451.58 7,862.90
Aggregate Base Course 480,923.59 48,092.36 38,473.89 9,618.47
Reinforcing Steel Bars 15,275.38 1,527.54 1,222.03 305.51
Portland Cement Concrete
3,678,550.96 367,855.10 294,284.08 73,571.02
Pavement
Construction of Camp house &
80,000.00 8,000.00 6,400.00 1,600.00
Field Office
Construction Safety & Health 169,807.85 16,980.79 13,584.63 3,396.16
Project Billboard/Signboard 5,500.00 550.00 440.00 110.00
Traffic Management 131,619.92 13,161.99 10,529.59 2,632.40
Material Testing 150,000.00 15,000.00 12,000.00 3,000.00
Total ₱5,295,824.91 ₱529,582.49 ₱423,665.99 ₱105,916.50

6.6. Interview with the Municipal Engineer and the BAC Chair disclosed that they
have overlooked the application of incorrect percentages in the computation of CPM for
the project. They further explained that, as they seldom have a project costing more than
five million pesos, they took this project as one of those and applied the usual ten percent
rate of CPM.

6.7. Due to the above oversight, the Municipality unduly incurred cost in excess of the
allowable amount by ₱105,916.50.
60
6.8. We recommended and the LCE agreed to require the (a) Municipal Engineer
and BAC to strictly observe the guidelines provided in the Manual of Procedures for
the Procurement of Infrastructure Projects specifically in the preparation of ABC of
future projects, and (b) Municipal Engineer and BAC explain why they should not
refund the ₱105,916.50 overstatement of the project cost.

Gender and Development

7. The Municipality allocated ₱11,186,000.00, or 5.05 percent of its annual

budget, and complied with the requirements for the submission of GAD Plan and
Budget (GPB) and Accomplishment Report (AR) to the relevant agencies, consistent
with Section 36(a) of R.A. No. 9170 of the Magna Carta of Women. In addition, it
was successful in meeting the basic requirements of PCW-DILG-DBM-NEDA Joint
Memorandum Circular (JMC) No. 2013-01, as amended, on the institutionalization
of GAD mechanisms, particularly the strengthening of the GAD Focal Point System,
the enactment of the GAD Code, the reorganization of the GAD Monitoring and
Evaluation (M&E) team, and the establishment of the GAD database.

7.1. For CY 2021, the Municipality appropriated ₱11,186,000.00 or 5.05% of its

annual budget of ₱221,592,511.80 for the implementation of GAD-related PPAs. The
amount met the minimum funding requirement prescribed under Section 36(a) of R.A.
No. 9170 of the Magna Carta of Women.

7.2. The Audit Team also noted that the GPB and AR for CY 2021 was certified
reviewed and endorsed by the Department of Interior and Local Government on March
17, 2020 and February 21, 2022, respectively.

7.3. Review of the GAD AR as of December 31, 2021 showed that ₱8,884,753.82 or
79.43% of the total appropriations were utilized during the year, to wit:

PPAs Appropriations Utilization Balance Remarks

Client Focused
1. Assistance in Crisis ₱3,700,000.00 ₱3,696,979.97 ₱3,020.03 Fully Implemented –
Situation (AICS) indigent families from
26 barangays were
provided with
financial, medical, and
burial assistance.
2. Engagement of youth in 500,000.00 485,000.00 15,000.00 Fully Implemented –
sports development and funded the celebration
other social activities of 8th Palay festival
during the celebration
of Linggo ng
Kabataan
3. Organization of Out-of-
School-Youths (OSY)

61
 PPAs Appropriations Utilization Balance Remarks
sector of the society
3.1 Provide 1,250,000.00 1,223,142.40 26,857.60 Fully Implemented
Scholarship Fully Implemented –
Programs; Special youths were benefited
Program for from skills training
Employment of during the ceremonial
Students (SPES); kick-off for
Special Program Alternative Learning
for Alternative System
Learning System
(ALS)
3.2 Provide skills 30,000.00 30,000.00 0.00
training program
4. Organize Women's 6,000.00 6,000.00 0.00 Fully Implemented
organization (KALIPI)
5. Organized Pantawid 50,000.00 4,250.00 45,750.00 Partially Implemented
Family into group for
the skills training
6. Conduct Livelihood 300,000.00 2,000.00 298,000.00 Partially Implemented
Training & Implement
Livelihood Programs
7. Maintenance and 110,000.00 33,960.45 76,039.55 Partially Implemented
improvement of crisis – funds used to
room for the purchase office
convenience of the supplies, dual way
victims of VAWC cases intercom for the
and conduct VAWC improvement of crisis
seminars to barangay room, and computer
officials camera used during
online conference
with a judge.
8. House to House 30,000.00 30,000.00 0.00 Fully Implemented
distribution of IEC
materials, tarpaulin
printing and conduct of
meeting every barangay
9. Survey Issuance of 10,000.00 5,876.00 4,124.00 Fully Implemented
Identification card for
2019 at Canaan West &
four (4) remaining IP
Barangays
10. Conduct of Survey 10,000.00 6,260.80 3,739.20 Fully Implemented
Issuance of
Identification Card of
Solo Parent
11. House to House 2,500,000.00 2,497,989.20 2,010.80 Fully Implemented
distribution of IEC
materials, enrollment of
mothers after delivery
thru PhilHealth Point of
Care and Point of
Service (Provision of
free medical and dental
checkup and treatment)

62
 PPAs Appropriations Utilization Balance Remarks
12. Organization and 660,000.00 4,800.00 655,200.00 Partially Implemented
strengthen Youth in the
community and
Women's Organization
(Conduct of trainings,
seminars & livelihood
programs for two
groups)
Organization Focused
13. Conduct training on 400,000.00 0.00 400,000.00 Not Implemented –
GAD Due to COVID-19
14. Conduct of CODU and 50,000.00 0.00 50,000.00 pandemic health
grievance committee restrictions
quarterly meeting
15. Regular one (1) hour 50,000.00 49,000.00 1,000.00 Fully Implemented
exercise every week:
monitoring to achieve
healthy working
environment
16. Conduct DRRM 100,000.00 49,525.00 50,475.00 Partially Implemented
Trainings and Seminars,
Drills, Orientation,
Competition/Olympics
(First Aid Training,
Earthquake drill)
17. Conduct IEC 400,000.00 136,065.00 263,935.00 Partially Implemented
Campaigns in
Barangays (Distribution
of flyers)
18. Extension office for 26 200,000.00 200,000.00 0.00 Fully Implemented
barangays and conduct
medical, dental,
vitamins, assistive
devices, etc.
19. Provision of space use 50,000.00 47,995.00 2,005.00 Fully Implemented
for IP office and other
office equipment or
furniture
20. Distribution of Lactating 50,000.00 50,000.00 0.00 Fully Implemented
Kits to breastfeeding
employees
21. Establishment of 340,000.00 146,860.00 193,140.00 Partially
Database System and Implemented
Capacity Development
22. Orientation on pre- 50,000.00 0.00 50,000.00 Not Implemented –
retirement plans and No program
counselling of retirables conducted due to
23. Orientation on 30,000.00 0.00 30,000.00 COVID-19 limitations
organization targets and
building a collaborative
work environment
among newly hired
employees
24. Retirement program for 150,000.00 119,000.00 31,000.00 Fully Implemented

63
 PPAs Appropriations Utilization Balance Remarks
retiring/retired
employees
25. GAD Focal Point 160,000.00 60,050.00 99,950.00 Partially Implemented
System Conduct of
Quarterly Meeting and
Skills Enhancement
Total ₱11,186,000.00 ₱8,884,753.82 ₱2,301,246.18

7.4. The GAD focal person explained that some PPAs were not executed owing to
COVID 19 restrictions.

7.5. In addition to the implemented PPAs, the Municipality also performed

satisfactorily with meeting the basic requirements of GAD rules and regulations as
specified in PCW-DILG-DBM-NEDA JMC No. 2013-01, as evidenced by the following
accomplishments for the calendar year 2021:

a. Re-organization of Local Gender Focal Point System (GFPS) - The Municipal

Mayor signed Executive Order (EO) No. 03, series of 2021 dated February 19,
2021 to strengthen the composition of the GFPS. Corollary to the institutional
creation of the GFPS was the formation of the GFPS Technical Working Group and
GFPS Executive Committee which is composed of the Municipal Mayor as
chairman, Municipal Vice Mayor as vice-chairman, and department heads as
members with explicit definitions of their roles and responsibilities.

b. Creation of GAD Monitoring and Evaluation (M&E) Team - The Municipal Mayor
signed EO No. 04, series of 2021 on February 19, 2021, establishing the GAD
monitoring and evaluation team to further strengthen the monitoring and evaluation
system for gender-responsive PPAs. The M&E team was tasked with the following
responsibilities: (1) evaluating the outcomes of the LGU's GAD policies, programs,
and projects; and (2) submitting a GAD evaluation report to the DILG Regional
Office at the end of the LCE's three-year term.

c. Institutionalization of GAD Database – The municipality was able to provide a

consolidated GAD database encompassing gender statistics and GAD-related
information as of December 31, 2021. This information assists the municipality in
evaluating which of the highlighted gender issues and concerns are the most
pressing and require immediate attention and action.

7.6. Overall, GAD budget performance for CY 2021 was satisfactory and through
adoption of GAD mechanisms, the Municipality was able to ensure that gender issues
prevalent within the locality were identified and addressed effectively and efficiently.

7.7. We recommended and the LCE agreed to instruct the GAD Focal Person to
continue its compliance in its mandate of promoting and providing a gender-
responsive environment in the local government.

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Compliance with Tax Laws

8. The Municipality adhered with the Revenue Memorandum Circular No. 23-007
dated March 20, 2007 on the withholding and remittances of the taxes during
CY 2021 by deducting and fully remitting the amount of ₱9,565,637.86 as at December
31, 2021.

8.1. Revenue Memorandum Circular No. 23-2007 dated March 23, 2007 and BIR Tax
Revenue Regulation No. 10-2008 dated July 8, 2008 stipulate the deadline to remit
various taxes due to the government withheld from persons, employees, suppliers and
other establishments.

8.2. Review of accounting records showed that Management was able to perform its
mandated function of withholding the corresponding taxes from employee’s
compensation and from payment of goods and services in CY 2021 as well as its
remittance to the BIR in accordance with the aforementioned regulation, as shown below:

Month Due to BIR Taxes Total Taxes Due to BIR

(Beginning) Withheld Remitted (Ending)
January ₱ 0.00 ₱ 640,126.27 ₱ 640,126.27 ₱ 640,126.27 ₱ 0.00
February 0.00 1,120,329.26 1,120,329.26 1,120,329.26 0.00
March 0.00 765,408.99 765,408.99 744,491.32 20,917.67
April 20,917.67 594,603.43 615,521.10 594,603.43 20,917.67
May 20,917.67 681,679.89 702,597.56 681,679.89 20,917.67
June 20,917.67 642,969.35 663,887.02 642,969.35 20,917.67
July 20,917.67 835,525.96 856,443.63 835,525.96 20,917.67
August 20,917.67 601,937.15 622,854.82 601,937.15 20,917.67
September 20,917.67 1,087,090.47 1,108,008.14 1,087,090.47 20,917.67
October 20,917.67 716,026.43 736,944.10 716,719.62 20,224.48
November 20,224.48 1,062,206.92 1,082,431.40 1,061,409.32 21,022.08
December 21,022.08 817,733.74 838,755.82 838,755.82 0.00
Total ₱9,565,637.86 ₱9,565,637.86

8.3. We recommended the LCE agreed to continue its satisfactory observance of

BIR regulations on the withholding and remittance of taxes.

Compliance with R.A. No. 8291, the Government Service Insurance System Law

9. The Municipality was able to fully comply with mandatory withholding of

employee’s contribution and timely remittance of employees’ and employer’s
contributions with the Government Service Insurance System (GSIS) in accordance
with Section 5(c) of R.A. No. 8291, the GSIS Act of 1997 and has fully remitted the
total collections of ₱16,994,000.25 as at December 31, 2021.

9.1. In CY 2021, we noted a very satisfactory compliance by Management with

Section 5(c) of R.A. No. 8291, otherwise known as the GSIS Act of 1997.

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9.2. Verification of the Due to GSIS account showed that the actual compulsory
contributions and loan amortizations deducted from the employees as well as the share of
the Municipality to the premiums were remitted within the period prescribed. Details are
as follows:

Month Due to Premiums & Total Premiums & Due to

GSIS Loans Withheld Loans GSIS
(Beginning) Remitted (Ending)
January ₱ 0.00 ₱1,366,060.53 ₱1,366,060.53 ₱1,365,546.48 ₱ 514.05
February 514.05 1,349,934.33 1,350,448.38 1,349,681.87 766.51
March 766.51 1,360,225.05 1,360,991.56 1,340,838.18 20,153.38
April 20,153.38 1,347,631.13 1,367,784.51 1,355,041.41 12,743.10
May 12,743.10 1,415,759.63 1,428,502.73 1,416,316.62 12,186.11
June 12,186.11 1,417,237.30 1,429,423.41 1,383,232.41 46,191.00
July 46,191.00 1,414,974.23 1,461,165.23 1,381,908.99 79,256.24
August 79,256.24 1,452,077.29 1,531,333.53 1,488,277.10 43,056.43
September 43,056.43 1,461,901.79 1,504,958.22 1,446,807.67 58,150.55
October 58,150.55 1,451,362.39 1,509,512.94 1,437,514.15 71,998.79
November 71,998.79 1,473,066.20 1,545,064.99 1,463,353.44 81,711.55
December 81,711.55 1,483,770.38 1,565,481.93 1,565,481.93 0.00
Total ₱ 16,994,000.25 ₱ 16,994,000.25

9.3. We commended Management for its sustained satisfactory observance of the

GSIS Act of 1997, and we recommended and the LCE agreed to continue the
withholding and timely remittance of all premium contributions and loan
amortizations of its employee members as well as the government’s share to the
fund.

Compliance to R.A. No. 7875, the National Health Insurance Act of 1995, as amended by
R.A. No. 10606 dated June 2013

10. The Municipality complied with the provisions of R.A. No. 7875 or the National
Health Insurance Act of 1995 as the Municipality has fully remitted its employees’
compulsory Philhealth contributions CY 2021.

10.1 In CY 2021, the Municipality was able to sustain its satisfactory compliance with
the provisions of R.A. No. 7875 or the National Health Insurance Act of 1995 by
deducting and remitting the total contributions of ₱ 1,622,775.73 as at December 31,
2021 and leaving a zero balance as at same year-end. The details are shown in the
following table:

Month Due to Premiums Total Premiums Due to

PhilHealth Withheld Remitted PhilHealth
(Beginning) (Ending)
January ₱ 0.00 ₱98,045.42 ₱ 98,045.42 ₱ 98,046.45 ₱ (1.03)
February (1.03) 98,048.14 98,047.11 98,046.45 0.66

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March 0.66 97,791.40 97,792.06 97,792.44 (0.38)
April (0.38) 97,434.34 97,433.96 97,435.35 (1.39)
May (1.39) 148,444.12 148,442.73 100,367.71 48,075.02
June 48,075.02 147,506.22 195,581.24 194,906.64 674.60
July 674.60 100,005.00 100,679.60 99,000.30 1,679.30
August 1,679.30 209,749.77 211,429.07 203,268.51 8,160.56
September 8,160.56 156,235.00 164,395.56 103,301.73 61,093.83
October 61,093.83 155,224.22 216,318.05 99,900.00 116,418.05
November 116,418.05 156,892.66 273,310.71 150,424.71 122,886.00
December 122,886.00 157,399.44 280,285.44 280,285.44 0.00
Total ₱1,622,775.73 ₱1,622,775.73

10.2 We commended Management for its sustained satisfactory observance of the

National Health Insurance Act, and advised, for which the LCE concurred, to
continue the withholding and timely remittance of all PHIC contributions of its
employee members.

Compliance to R.A. No. 9679, the Home Development Mutual Fund Law of 2009

11. The Municipality satisfactorily complied with the provisions under Sections 6
and 7 of R.A. No. 9679 or the Home Development Mutual Fund Law of 2009 and was
able to deduct and remit the contributions and loan amortizations of Pag-IBIG
members in the amount of ₱ 1,405,858.82 as at December 31, 2021.

11.1 Shown below is the schedule of actual compulsory contributions and loan
amortizations deducted from the employees of the Municipality and remitted for CY
2021, reflective of the municipality’s consistent observance of R.A. No. 9679 or the
Home Development Mutual Fund Law of 2009.

Month Due To Premiums Total Premiums and Due To PAG-

PAG-IBIG and Loans Loans IBIG
(Beginning) Withheld Remitted (Ending)
January ₱ 0.00 ₱ 74,745.92 ₱ 74,745.92 ₱ 71,745.92 ₱ 3,000.00
February 3,000.00 154,671.14 157,671.14 157,271.14 400.00
March 400.00 114,606.48 115,006.48 114,606.48 400.00
April 400.00 119,572.94 119,972.94 119,572.94 400.00
May 400.00 118,288.01 118,688.01 116,981.18 1,706.83
June 1,706.83 119,515.30 121,222.13 118,848.52 2,373.61
July 2,373.61 72,375.25 74,748.86 71,975.25 2,773.61
August 2,773.61 166,615.99 169,389.60 166,115.99 3,273.61
September 3,273.61 114,422.33 117,695.94 114,322.33 3,373.61
October 3,373.61 113,510.38 116,883.99 113,510.38 3,373.61
November 3,373.61 119,406.71 122,780.32 117,854.23 4,926.09
December 4,926.09 118,128.37 123,054.46 123,054.46 0.00
Total ₱1,405,858.82 ₱1,405,858.82

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11.2 We recommended and the LCE agreed to continue adhering to the
requirement of R.A. No. 9679 or the Home Development Mutual Fund Law of 2009.
Status of Settlement of Audit Suspensions, Disallowances and Charges

12. In CY 2021, there were no transactions that were suspended, disallowed or

charged.

12.1 The status of audit suspensions, disallowance and charges as of December 31,
2021 is shown below:

Beginning This period January Ending

Balance (As of 1, 2021 to December Balance (As
Notices
December 31, 31, 2021 of December
2020) NS/ND/NC NSSDC 31, 2021)
Notice of Suspension ₱0.00 ₱0.00 ₱0.00 ₱0.00
Notice of
5,603.68 0.00 5,603.68 0.00
Disallowance
Notice of Charge 0.00 0.00 0.00 0.00
Total ₱5,603.68 ₱0.00 ₱0.00 ₱0.00

12.2 The Municipality has already settled the disallowed amount of ₱5,603.68 with
Official Receipt No. 4096058 dated October 17, 2018 supported by Notice of Settlement
of Suspension/Disallowance/Charge (NSSDC) No. 2021-014 to 2021-020 dated May 31,
2021.

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