Republic of the Philippines

COMMISSION ON AUDIT
Region VII
Office of the Supervising Auditor
Audit Group D
Tagbilaran City

May 24, 2013

HonorableLEON A. CALIPUSAN
Municipal Mayor
Municipality of Loboc, Bohol

Sir :

Pursuant to Section 2, Article IX-D of the Philippine Constitution, Section 43 (2) of Presidential
Decree No. 1445, otherwise known as the “Government Auditing Code of the Philippines,” and
in line with this Commission’s efforts towards informing Management on how fiscal
responsibility has been discharged, we are pleased to transmit the report of our auditor on the
results of her audit on the accounts and operations of the Municipality of Loboc, Bohol for the
year ended December 31, 2011.

The audit was conducted to ascertain the propriety of financial transactions and compliance of
the local government unit (LGU) with prescribed rules and regulations. It was also made to
ascertain the accuracy of financial records and reports, as well as the fairness of presentation of
the financial statements. The audit was also aimed to review managerial efficiency with the end
in view of eliminating waste and promoting efficient use of public funds and resources and the
ascertainment of the LGU’s effectiveness by determining whether desired results have been
achieved and the programs have accomplished their purposes and objective.

We request that the comments and observations contained in the attached report be appropriately
acted upon and would appreciate being informed through our auditor of the action(s) taken
thereon within one (1) month from receipt hereof.

We acknowledge the cooperation and support extended to our auditor and her staff during the
audit.

Sangguniang Bayan, Loboc, Bohol

 Republic of the Philippines
COMMISSION ON AUDIT
Region VII
Audit Team No. 4, Audit Group D
Tagbilaran City

May 24, 2013

JOSE R. DESAMPARADO
Supervising Auditor
Audit Group D
Tagbilaran City

Sir:

In compliance with Section 2, Article IX-D of the Philippine Constitution and Section 43(2) of
Presidential Decree No. 1445, an audit was conducted on the accounts and operations of the
Municipality of Loboc, Bohol for the year ended December 31, 2012.

The audit was conducted to ascertain the propriety of financial transactions and compliance of
the local government unit (LGU) with prescribed rules and regulations. It was also made to
ascertain the accuracy of financial records and reports, as well as the fairness of presentation of
the financial statements. The audit was also aimed to review managerial efficiency with the end
in view of eliminating waste and promoting efficient use of public funds and resources and the
ascertainment of the LGU’s effectiveness by determining whether desired results have been
achieved and the programs have accomplished their purposes and objective.

The attached report consists of four parts: Part I – Audited Consolidated Comparative Financial
Statements, Part II, Details the significant findings and recommendations which were discussed
with concerned management officialsduring the exit conference on April 3, 2012, Part III, Status
of Implementation of Prior Years’ Audit Recommendations and Part IV, Annexes.

As discussed in Part II and III of this report, validity and correctness of the recorded Property,
Plant and Equipment amounting to P101,547,751.99 is not certain due to the failure of the
officials concerned to undertake the proper conduct of inventory-taking, maintain stock cards
and property ledger cards while cash advances amounting to P 2,666,034.35 remained
outstanding/unliquidated in the books thus, accuracy of asset balance could not be ascertained.
Finally, Construction in Progress-Public Infrastructure of P 9,212,291.88 (264) was misclassified
to its appropriate asset account and were still carried in the books thus, the account were
misstated and not fairly presented in the financial statements for CY 2012.
In our opinion, except for the effects of any adjustments on the deficiencies pointed out in the
preceding paragraph, the financial statements present fairly, in conformity with generally
accepted accounting principles, the financial position of the Municipality of Loboc, Bohol as of
December 31, 2012, and the results of its operations and its cash flows for the year then ended.

Our audit was conducted in accordance with Generally Accepted Auditing Standards (GAAS)
and we believe that it provides reasonable bases for the results of the audit.

Very truly yours,

ROSENDA B. CABANG
State Auditor III
(Team Leader)