EXECUTIVE SUMMARY

The Province of Biliran is currently classified as a 4th class province in Region

VIII comprising of eight municipalities and 132 barangays with the Municipality of
Naval as its capital town.

The Provincial Government of Biliran, under the administration of Honorable

Governor Rogelio J. Espina, MD, FPOA and the legislative body from the lone
congressional district composed of eight Board Members headed by Vice-Governor
Brigido C. Caneja III, continued to implement programs consistent with its mission of
providing social services and economic opportunities to the people of Biliran.

An audit was conducted on the accounts and operation of the Province of Biliran
for CY 2021 with particular emphasis on the audit thrusts provided under Unnumbered
Memorandum dated October 13, 2021 of the Assistant Commissioner, Local Government
Sector, such as: COVID-19 fund receipt, allocation and utilization, Cash and Cash
Equivalents, Property, Plant and Equipment (PPE), Fund Transfers, 20% Development
Fund, and Local Disaster Risk Reduction and Management Fund (LDRRMF), among
others. The audit was undertaken to ascertain the propriety of financial transactions, the
accuracy of financial records and reports as well as the LGUs compliance with prescribed
rules and regulations and to determine whether the programs, as envisioned, were
attained in economical, efficient and effective manner. The audit was conducted in
accordance with the International Public Sector Standards on Auditing.

The audit included examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, verification and analysis of financial accounts
as well as evaluating the overall financial statement presentation. It also involved
interview with concerned officials/employees and other audit procedures and techniques
considered necessary under the circumstances.

Financial Highlights

The assets, liabilities and equity of the Province of Biliran for the year ended
December 31, 2021, and its income and expenses in comparison with that in CY 2020 are
presented below:

Particulars CY 2021 CY 2020

Assets P2,266,669,092.53 P1,948,484,103.68
Liabilities 540,540,607.95 475,555,871.83
Government Equity 1,726,128,484.58 1,472,928,231.85
Income 827,749,862.92 791,565,316.54
Expenses 687,620,201.77 565,010,105.93
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 The appropriations, allotment and obligations of the Province of Biliran for CY
2021 as compared with CY 2020, including funds received from NGAs and other LGUs
as well as funds transferred to other LGUs, were as follows:

Particulars CY 2021 CY 2020

Appropriations, Allotments and Obligations

Appropriations P878,826,040.00 P792,837,598.09
Allotments 878,826,040.00 792,837,598.09
Obligations 716,299,943.62 679,597,940.28
Funds Received From Other Agencies
NGAs 52,583,956.86 206,210,621.84
LGUs 2,361,525.54 5,461,257.57
Funds Transferred To Other Agencies
LGUs 15,807,823.85 6,053,000.00

Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the combined financial statements of

the Province of Biliran for the year ended December 31, 2021 due to the exceptions as
stated in the Independent Auditor’s Report and as discussed in Part II of the report.

Summary of Significant Observations and Recommendations:

1. The reported Property, Plant, and Equipment (PPE) is unreliable as to its

existence, completeness, and accuracy due to: a.) capitalization of tangible
items below the P15,000.00 threshold totaling P452,192.50; b.) discrepancy
between the Report on the Physical Count of PPE (RPCPPE) and Subsidiary
Ledger (SL) balances amounting to P149,296,179.27; c.) non-preparation of
PPE Ledger Cards except for Road Networks account and non-preparation
of Property Cards for procurements prior to Calendar Year (CY)
2018; and d.) lack of relevant information in the RPCPPE such as
property number, date of acquisition, and condition of property.

We recommended that the:

a.) Provincial Accountant, reclassify the items which are below the P15,000.00
threshold and to prepare and maintain property Ledger Cards for all
properties;

b.) Property Officer, prepare and maintain Property Cards;

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 c.) Provincial Accountant and the General Services Officer, reconcile their
records;

d.) Inventory Committee, prepare a completely filled out RPCPPE.

2. Sea Ambulance amounting to P4,495,000.00 was not transferred from Trust

Fund to GF upon issuance to the end user and was not derecognized upon
donation to LGU Naval due to oversight.

We recommended that the Provincial Accountant prepare an adjusting entry to

record the transfer of PPE from Trust Fund to General Fund books, and
derecognize the sea ambulance donated to LGU-Naval.

3. Local Government Support Fund Financial Assistance (LGSF-FA) totaling

P18.6 million was not recorded in the books of the Province due to lack of
monitoring of its depository accounts.

We recommended that the Provincial Governor enroll all accounts of the Province
for LBP weAccess so that transactions affecting the Province’s accounts will be
accessible and monitored regularly, and be recorded on time.

4. The year-end balance of the Due to National Government Agencies account

in Trust Fund (TF) books amounting to P107,587,788.24 is unreliable due to
non-recognition of liquidation report totaling P3,815,148.40 and non-
submission of liquidation report even if the program costing P4,992,256.00
was already completed; while the unexpended/unutilized fund transfers
amounting to P75,164.55 was not returned to the Source Agencies (SA).

We recommended that the Provincial Accountant:

a) prepare the necessary adjusting entries to reflect the liquidation of the

programs, projects, and activities implemented and completed as of December
31, 2021;

b) coordinate with the source agencies for the proper disposition of the unutilized
portion in accordance with the provisions of the Memorandum of Agreement
(MOA) between and among the parties; and

c) return to source agency the unexpended/unutilized balance upon the

completion of the project in accordance with the provisions of the MOA
between and among the parties.

Henceforth, we recommended that the project coordinators submit the liquidation

report to the Provincial Accountant upon fulfillment of the purpose or completion
of the programs, projects, and activities on time for recording purposes.
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5. The validity and propriety on the use of the Special Education Fund (SEF)
could not be ascertained due to the recording of the funds transferred to
DepEd Division of Biliran as outright expense, amounting to P1.4 million.

We recommended that the Provincial Accountant use the appropriate accounting

entries to record the fund transfers and require from the Local School Board
Secretary the quarterly Report of SEF Utilization before subsequent funds are
released.

6. Stale checks amounting to P2,299,363.14 were still included as outstanding

checks as of December 31, 2021.

We recommended that the Provincial Accountant prepare JEV for the recording to
revert the amount equivalent to the stale checks to the Cash in Bank and Accounts
Payable

We also recommended that the Provincial Treasurer send written notice to the
payee at least one month before the check becomes stale.

We further recommended that the Provincial Accountant regularly prepare the

monthly Bank Reconciliation Statements and coordinate with the Provincial
Treasurer regarding checks outstanding for over six (6) months to avoid their
inclusion in the outstanding checks.

7. Loans Receivables amounting to P12,878,494.20 and Other Receivables

totaling P7,574,232.40 have been outstanding for more than ten years, due to
inadequate collection efforts of the Province and low chance of collectability.

We recommended that the Governor request authority to write off receivable

accounts, which are dormant for ten years and above, duly supported with
documents required in Item 8.3 of COA Circular No. 2016-005.

Summary of Audit Suspensions, Disallowances and Charges

The Province had the following balances of Notices of Suspensions (NS), Notices
of Disallowances (ND) and Notices of Charge (NC) as of December 31, 2021 as shown
in the next page.

Beginning This Period Ending Balance

Particulars Balance January – Dec. 31, 2021 December 31,
January 1, 2021 NS/ND/NC NSSDC 2021
Notice of P 54,026.33 P 0.00 P 0.00 P 54,026.33
Suspension
Notice of P 2,434,713.26 P 0.00 P 0.00 P 2,434,713.26

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Disallowance
Notice of Charge P 0.00 P 0.00 P 0.00 P 0.00

Status of Implementation of Prior Years’ Unimplemented Audit Recommendations

Out of the 19 recommendations enumerated in the CY 2020 and prior years’

Annual Audit Reports, fifteen (15) were fully implemented and four (4) were not acted
upon by management.