Summary of Audit Observations and Recommendations (SAOR)

Agency: Municipality of Estancia

Period Covered: January 1 to December 31, 2022

No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment

Date
1 AOM No. The Agency Action Plan and Status of We recommended the following: Accounting Office:
2023-001 Implementation (AAPSI) was not
(2022) submitted within 60 days from receipt of 1. The Local Chief Executive assign The Municipal Mayor has AAPSI for CY 2021 AAR
the Annual Audit Report (AAR), contrary personnel(s) who will consolidate the designated Mr. Audie Arroyo, was submitted to COA
January 30, to Section 91 of the General Provisions detailed action plans of each Municipal Administrator assigned Office last March 14,
2023 of Republic Act (RA) No. 11518 or the department and at the same time will to consolidate the detailed action 2023 which is more than
General Appropriations Act (GAA) for prepare and submit the AAPSI to plans and prepare the AAPSI. 60 days from receipt of
FY 2021, thus limited the Auditor from COA Office; AAR.
properly monitoring and evaluating the 2. The Local Chief Executive direct all The Management will follow the
actions taken by the Municipality on the the Department Heads/employees recommendation to strictly AAPSI was not
audit recommendations and status of its concerned to submit their detailed observe the submission of the completely filled out.
implementation. action plans on the CY 2021 AAR AAPSI for the succeeding years Some Audit Observations
findings and recommendations which is within 60 days from and Recommendation
including that of prior years to the receipt of the Annual Audit have no management
person assigned to consolidate the Report. commitments and
same; and persons responsible
3. Henceforth, the Municipal indicated.
Government, within sixty (60) days
from its receipt of the Annual Audit
Report, submit to the Audit Team,
either in printed form or by way of
electronic document, a status report
on the actions taken on the audit
findings and recommendations
therein.
2 AOM No. The Municipality’s expenditures for Fuel We recommended the following: Accounting Office:
2023-002 Consumption totaling ₱3.213 million
(2022) were not effectively controlled and a) Official/employee assigned to control The Management will firmly follow
monitored due to the following: (a) and approve the DTTs to see to it that the recommendations in the
February 10, Driver’s Trip Tickets were not properly all data needed be accomplished, such processing of disbursements for
2023 accomplished; (b) Monthly Report of as the fuel balances and consumption, fuel expenses and make sure that
Fuel Consumption and Monthly Report distance travelled, purpose of travel for CY 2023 and onwards the
No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
of Official Travels were not submitted to and vehicle plate number; Driver’s Trip Tickets are properly
COA Office; and (c) fuel consumed by b) Designated drivers to request their accomplished and no fuel, oil and
vehicles which do not bear government passenger(s) to affix their signatures in lubricants is issued to private
issued plates were charged to the the approved DTTs after the trip; vehicles or those which do not
government funds contrary to the c) Duly accomplished Monthly Report of bear government plates.
Manual on Audit for Fuel Consumption Official Travels and Monthly Report of
of Government Motor Vehicles Fuel Consumption be submitted to
prescribed in COA Circular No. 77-61, COA Office; and
hence the reasonableness and validity d) The management to stop the practice
of fuel consumed were not ascertained. of providing fuel, oil and lubricants to
private vehicles or those which do not
bear government plates.
3 AOM No. Payment for traveling expenses claims We recommended that the said Municipal Accounting Office: We reiterate our
2023-003 amounting to ₱26,000.00 of a Municipal Official discontinue charging the amount recommendation
(2022) Official includes the amount equivalent equivalent to hiring the entire PUV in his The Management will ensure that embodied in the issued
to the hiring of an entire Public Utility traveling expenses claims instead of the the travelling expenses processed AOM to discontinue
February 14, Van in going back and forth to his prevailing rate for the customary mode of and paid are those only allowed charging the amount
2023 official station while on official travel transportation for each passenger. under EO No. 77. Moreover, the equivalent to hiring the
contrary to Section 7 of the Executive claim for transportation expenses entire PUV in claiming
Order No. 77 dated March 15, 2019, We also recommended that the in excess of the prevailing rate for travel expenses and limit
thus the said expenditure is considered Management ensure that only those customary mode is discontinued the same only to the
irregular. traveling expenses that are allowed under for CY 2023 and onwards. prevailing rate for the
EO No. 77 are processed and paid. customary mode of
Mun. Vice Mayor: transportation for each
passenger.
The VM would like to inform your
good office that hiring of Public The AOM does not
Utility Van during official travel is preclude any public
of great importance for the safety official or employee from
of the undersigned being the utilizing their private
current Municipal Vice Mayor. vehicles or hiring Public
Commuting on a public utility with Utility Vans for their
unidentified companies (person) official travel. The official
may pose danger to life and or employee concerned,
property of the undersigned. however, as pointed out
Hence, it is my fervent request to in the AOM, is entitled
please allow the undersigned to only to claim the
No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
hire Pubic Utility Van during equivalent cost of the
official travel or in any customary mode of
circumstance that the transportation. This
performance of duty as Municipal limitation was provided
Vice Mayor is in need. under Section 7 of
Executive Order No. 77
dated March 15, 2019,
hence any excess shall
be personally shouldered
by the official or
employee concerned.
4 AOM No. The accuracy, existence, and We reiterated our prior year’s audit Accounting Office:
2023-004 completeness of the Property, Plant, recommendations that the Local Chief
(2022) and Equipment (PPE) as of December Executive (LCE) direct the following: The office is currently in the
31, 2022 amounting to ₱171.137 million process of tracing back the
February 14, could not be ascertained due to (a) non- 1. Inventory Committee to conduct a balances of all property, plant and
2023 conduct of physical count of the thorough physical count of all its equipment (PPE) based on the
properties at the end of the year; (b) properties and prepare and submit the earliest available data. As of date,
non-submission of Report on the RCPPE for all types of PPE; we have already obtained the list
Physical Count of Property, Plant, and 2. The Municipal Accountant and the of PPE acquired from CY 2010 up
Equipment (RPCPPE); (c) non- GSO reconcile their respective PPE to present. We will be reconciling
maintenance of PPE Ledger Cards and records; this list with the balance of the
Property Cards; and (d) non- 3. The Municipal Accountant and the PPE accounts as of December
reconciliation of accounting and GSO maintain the required PPE 31, 2022. Further, we are also
property records, thus making the PPE Ledger Cards and Property Cards preparing the ledger cards that
account balance unreliable and respectively; and will be maintained by our office for
doubtful. 4. The Municipality avail of the one-time all acquired PPE of the
cleansing of PPE accounts as provided municipality.
under Commission on Audit (COA)
Circular No. 2020-006 to finally General Services Office:
establish PPE balances that are
verifiable as to existence, condition, 1. The LCE passed an Executive
and accountability. Order No. 006. An order
creating and reconstituting the
Municipal Inventory Committee
and Technical Working Group
of the LGU of Estancia. On the
No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
first week of May 2023 the
Mun. Inventory Committee will
conduct a thorough physical
count of all properties and
submit RCPPE.
2. Journals in the prior years
were being retrieved and
schedule of PPE previously
procured will be prepared
based on the journals.
3. The Municipal Accountant and
the GSO will continue to
maintain PPELC.
4. The Mun. of Estancia will avail
of the one-time cleansing of
PPE accounts as provided
under the COA Circular No.
2020-006 to finally establish
PPE balances that are
verifiable as to existence,
condition and accountability.
An Executive Order creating
appraisal and disposal
committee of unserviceable
properties has been passed.
5 AOM No. The Municipality does not fully comply We recommended that the Local Chief
2023-005 with the rules and regulations provided Executive together with other responsible
(2022) in Section 37 of the Republic Act (RA) officials and employees to address the
No. 9003 also known as the Ecological issue of the open dumpsite with priority
March 1, 2023 Solid Waste Management Act of 2000 by fast-tracking the processing of the
by still maintaining and operating an requirements needed for the sanitary
open dumpsite, thus exposing the landfill.
nearby community to risk of increased
health issues. We also recommended that the
management consider for the meantime
other options to properly manage or
control the area to mitigate its negative
No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
impact on the environment and
community.
6 AOM No. The Municipality does not impose fees, We recommended that the management:
2023-005 fines and penalties to persons or
(2022) establishments caught doing the acts a) Re-visit the Municipal Ordinance No.
prohibited in Section 48 of RA No. 9003, 16 Series of 2005 and update the rules
March 1, 2023 hence bags of waste are thrown and regulations as well as the fines
anywhere along the streets and other imposed for each violation to suit the
public places causing them to be current situation, if necessary;
scattered by animals and scavengers. b) Have a dialogue with the barangay and
educate the barangay officials and
employees on their responsibilities in
ensuring that their constituents abide
by the rules and regulations provided
in RA No. 9003;
c) Conduct effective Information and
Education Campaign in the entire
municipality most especially in the
barangays where garbage and wastes
are not well managed, of the prohibited
acts and the corresponding fines and
penalties of those who will be caught
violating said rules; and
d) Strictly impose fines and penalties on
individuals or establishments who will
continue to leave or throw waste in
public places.
7 AOM No. The Municipality does not substantially We recommended that the Local Chief Accounting Office:
2023-005 carry out the implementation of the Executive together with the responsible
(2022) Ecological Solid Waste Management officials and employees do the following: In relation to the MRFs distributed
Program due to its non-compliance to to the Barangays last CY 2018,
March 1, 2023 the significant provisions of RA No. a) Update or Create the new Municipal we will ask the barangays for the
9003, thus the total protection of the Solid Waste Management Board based status of the said MRFs in order
environment and the general welfare of on Section 12 of the RA No. 9003; for us to determine the proper
the constituents may not be attained. b) Establish Material Recovery Facilities action to be applied.
in the barangays and require the
Barangay Officials and Employees to
No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
be responsible in the maintenance and
operation of the MRF;
c) Provide a set of properly marked
containers as “compostable”, “non-
recyclable”, “recyclable” or “special
waste” for on-site collection to avoid or
minimize littering of waste in public
places; and
d) Strictly impose the No Segregation No
Collection Policy in the municipality.
8 AOM No. Appropriation for the Barangay We recommended that the Local Chief Accounting Office:
2023-006 Development Project totaling Executive together with the members of
(2022) ₱12,265,000.00 was not fully utilized as the Municipal Development Council do The office will facilitate the
of year-end leaving a balance of the following: preparation of the internal policy
March 7, 2023 ₱12,060,000.00, thus the municipality’s in the granting of financial
constituents were prevented from fully 1. Create a written internal policy in the assistance to Barangays. Further,
enjoying the services that they could granting of financial assistance to we will inform again the
have enjoyed had these projects been Barangays to ensure its timely and barangays to liquidate the
implemented and completed timely. efficient utilization; previously transferred funds and
to prepare their project proposals
2. Conduct a survey or inventory of and other supporting documents
proposed development projects for all for those with unutilized funds. As
barangays for consideration in of date, there are three barangays
planning the succeeding years’ budget who have already started
preparation; and processing their disbursement
vouchers for their respective
3. Call the attention of the barangay barangay development projects.
officials, with unutilized funds from However, it was deferred because
prior years to submit their revised the MBO has not yet issued the
project proposals, and give a timeline Allotment Release Order for the
for the implementation of such 20% Development Fund due to
projects, otherwise, unutilized funds the status of our CY 2023 Annual
shall be appropriated to other Budget, we will send a copy of the
development projects that are well- internal policy once approved.
planned and procurement-and-
implementation-ready.
MPDC:
No. AOM No. and Observation
Date
9 AOM No. Acquisition and issuance of inventories
2023-007 were not properly accounted and the
(2022) Report on Physical Count of Inventories
for the period was not prepared and
March 10, submitted contrary to COA Circular No.
2023 2015-009 and the New Government
Accounting System (NGAS) Manual for
Local Government Units (LGUs), thus
reported utilization of inventories in the
total amount of P14.920 million is
unreliable.
Recommendations
We recommended that the Local Chief
Executive (LCE) direct the following:
1. OIC-Municipal Accountant to record
the purchases and issuance/utilization
of goods and supplies in its appropriate
accounts in order to reflect the correct
balances at year-end; and
2. Inventory Committee to properly
maintain inventory records for
monitoring and record-keeping
purposes, conduct the semestral
Management’s Comment Rejoinder/Comment
We are constantly reminding the
Barangay Captains about it. We
even advised them to come to
MEO and MPDO to seek
Technical Assistance for the
preparation of Program of Work
(POW) if they do not have the
capacity to do so.
We will call the attention of the
Barangay Officials of all those
Barangays concern and rest
assured that I together with other
responsible officials and
personnel of the municipality will
follow the recommendation given
by the audit team on the said
AOM to enable the Municipal
Government to implement the
said programs, projects and
activities to better address the
constantly evolving development
needs of its constituents.
Accounting Office:
We will follow your
recommendation in the recording
of goods and supplies,
maintenance of ledger cards and
submission of reports for the
inventories of the Municipality.
No. AOM No. and Observation
Date
10 AOM No. The validity and propriety of the
2023-008 expenditures during the conduct of
(2022) Seminar Workshop on Children and
GAD Code last December 22-23, 2023
March 13, could not be ascertained due to the
2023 following: (a) disbursements amounting
to ₱707,843.75 were not supported with
complete documentation contrary to
Section 4(6) of Presidential Decree (PD)
No. 1445; and (b) pertinent provisions of
the 2016 Revised Implementing Rules
and Regulations of the Republic Act No.
9184 were not followed in the
procurement of meals and
accommodation for the said seminar
amounting to ₱640,968.75.
11 AOM No. The completeness and accuracy of the
2023-009 accounting and documentation of the
(2022) distribution and utilization of the COVID-
19 vaccines could not be ascertained
March 20, due to non-submission of the various
2023 reports pertaining to the COVID-19
Vaccination Program such as the List of
Procured/Received Vaccines, Utilized
Vaccines and the List of Sex-
Recommendations Management’s Comment Rejoinder/Comment
physical count on inventories, and
submit the same to the Office of the
Auditor within the period prescribed.
We recommended that the Local Chief Accounting Office:
Executive, MSWDO, OIC-Municipal
Accountant and the members of the Bids We will follow your
and Awards Committee (BAC) do the recommendation regarding the
following: documentary requirements to be
a. Submit the lacking documents attached in the processing of
mentioned above and in the attached disbursement voucher for
Appendix A within 15 calendar days to payment. Further, the lacking
COA Office; documents are currently being
b. Submit a justification as soon as complied by the responsible
possible as to why the Purchase persons.
Orders were not submitted to COA
Office within five days from BAC Chairman:
issuance/execution for
review/verification; Submitted to COA Office last April
c. MSWDO to submit justification as soon 3, 2023 the lacking documents
as possible as to the necessity to hire stated in the AOM which pertains
a Secretariat, Documenter and Team to the meals and accommodation
Building Facilitators for the said at Solina Beach and Nature
Seminar-Workshop; and Resort amounting to
d. OIC-Municipal Accountant to take note ₱640,968.75.
of the documentary requirements for
common government transactions as
provided in COA Circular No. 2012-
001.
We recommended that the Municipal Accounting Office:
Health Officer to submit to COA Office
within five days the various reports The office continued to follow up
pertaining to COVID-19 Vaccination the in-charge to submit the
Program such as the List of Procured reports pertaining to COVID-19
Vaccines, Received Vaccines, Utilized Vaccination Program.
Vaccines, List of Vaccine-Recipient, and
Procured Ancillary Supplies and Services
for the storage, transport, deployment
No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
Disaggregated Vaccine-Recipients. and administration of COVID-19
vaccines.
12 AOM No. Only six or 4.30% in the total amount of We recommended that the MDRRMO MPDC:
2023-010 ₱892,464.30 were implemented in CY together with the MPDC and Municipal
(2022) 2022 out of the 43 projects set for Engineer see to it that all programs, We will abide by your
implementation under the 70% projects and activities to be funded under recommendation that programs,
March 21, Mitigation Fund of the LDRRMF with a the 70% Mitigation Fund are well-planned projects and activities to be
2023 total appropriation of ₱20,738,989.98, and procurement-and-implementation- funded under the 70% Mitigation
thus desired goals and objectives of ready. Fund are well-planned and
reducing disaster risks and enhancing procurement-and-implementation-
disaster preparedness and response We also recommended that the ready. We will also check the
capabilities in the community was not MDRRMO re-visit the previous years’ programs and projects that
achieved. LDRRM Annual Investment Plan, and remained unimplemented as of
determine if the programs and projects CY 2023 if it is still doable and
that remained unimplemented as of CY necessary or needs to be re-
2021 are still doable and necessary or if it appropriated.
needs to be re-allocated to more
responsive programs and projects.
13 AOM No. Disbursements totaling ₱2,215,531.77 We recommended that the Local Chief
2023-010 were not supported with complete Executive, OIC-MDRRMO and OIC-
(2022) documentation contrary to Section 4(6) Municipal Accountant to submit to the
of Presidential Decree No. 1445 thus, Audit Team the lacking documents
March 21, propriety and validity of claims against enumerated in the attached Appendix A
2023 government fund could not be within 15 calendar days.
ascertained.
14 AOM No. The Municipality paid cash incentives to We recommended that the Local Chief
2023-011 CY 2021 volunteers for ₱500.00 each Executive and the concerned Municipal
(2022) totaling ₱73,000.00 without legal basis Officials and Employees to stop the
which is contrary to Section 4(1) of practice of granting incentives without
April 3, 2023 Presidential Decree No. 1445, thus legal basis pursuant to Section 4(1) of PD
disbursements are deemed improper No. 1445.
and constitute an irregular expenditure.
We also recommended the Management
submit a Justification and copy of the
policy on the granting of cash incentives
to the volunteers to the COA Office within
five days from receipt hereof, otherwise
No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
Notice of Suspension or Disallowance will
be issued.
15 AOM No. Purchases of various food and non-food We recommended that the Local Chief
2023-012 supplies for the operation of Crisis and Executive and all other concerned
(2022) Children in Conflict with the Law (CICL) Municipal Officials and Employees to
Center were done through direct refrain from purchasing goods and
April 4, 2023 purchases using cash advance contrary services through direct purchase in
to Section 10 of the 2016 Revised compliance with the pertinent provisions
Implementing Rules and Regulations of RA No. 9184.
(IRR) of Republic Act (RA) No. 9184,
thus creating doubt as to the propriety We also recommended that the OIC-
of the procurements and depriving the Municipal Accountant and MSWDO to
national government of the withholding attach a copy of the Case Study of each
taxes that may be collected and/or due children/individual who will be staying in
thereon. the Center to the succeeding
disbursements.
16 AOM No. Job Order contracts/Contract of We recommended that the Local Chief
2023-013 Services were entered into by the Executive direct the following:
(2022) Municipality (a) without an existing 1. HRMO, together with all other
internal policy, (b) non-requiring the Department Heads, to spearhead the
April 5, 2023 submission of Accomplishment Reports, drafting of the internal policy regarding
and (c) with payment on a monthly the hiring of the job order personnel.
basis contrary to Section 77 of RA No. The policy must include basis of rates
7160, pertinent provisions of CSC on a daily wage or piecework basis
Resolution No. 020790, and Section pursuant to Sec. 77 of RA 7160 and
4(6) of PD No. 1445, thus the propriety CSC Resolution No. 020790, and
and validity of the disbursements cannot monitoring of the services rendered by
be ascertained and may be considered the JO personnel among others.
irregular. 2. HRMO, with the aid of all other
Department Heads, to maintain a
database of all JO personnel hired for
monitoring purposes.
3. HRMO and OIC-Municipal Accountant
to require the persons hired through a
JOs and COs to submit
Accomplishment Reports and attach it
to the corresponding Liquidation
 No. AOM No. and Observation Recommendations Management’s Comment Rejoinder/Comment
Date
Reports.
4. Comply with the requirements set in
hiring of JOs and COS provided in
Section 77 of the RA No. 7160 and
CSC in its Resolution No. 020790.
17 AOM No. Obligated amounts do not correspond to We recommend that the Management
2023-014 the total project cost or total amount fully obligate the total contract cost of
(2022) committed to be paid by the Municipality projects as provided in Section 9 of the
contrary to Section 9 of the Manual on Manual on the NGAS for LGU, Volume I.
April 12, 2023 the New Government Accounting
System (NGAS) for Local Government We also recommend that the Municipal
Unit, Volume I, thus may result in Budget Office properly accomplish the
difficulty in completely fulfilling their Obligation Request Form and abide by
obligations for the fund may be used for the provisions of COA Circular No. 2006-
other purposes. 002
Other Matters:
1. For Issuance of Notice of Suspension or Disallowance: Hiring of Van (P16,500.00) and Pump Boats (P7,500) used by COMELEC Personnel
during the National and Local Elections held last CY 2022 were made through Direct Contracting (Contract of Service/Lease) instead of
undergoing the proper procurement process, contrary to RA No. 9184 and its 2016 IRR.
2. Result of Compliance Audit on 20% Development Fund.

Prepared by: Reviewed by:

JEZEBEL L. PANDAN DARLENE JOY P. MOLOMOLO

State Auditor II/ATM State Auditor II/OIC-ATL