EXECUTIVE SUMMARY

Introduction

The Municipality of Guimbal is a fourth class municipality in the Province of Iloilo, a coastal
municipality, located approximately 29 kilometers in the southwest of Iloilo City. It has been
cited by the Philippine Chamber of Commerce and Industry as the most business-friendly
local government unit, 4th-6th class municipal category in Western Visayas which is politically
subdivided into 33 barangays, and cleanest and greenest town in Iloilo. With a nine
kilometers shoreline facing the blue waters of the Panay Gulf, it has attracted tourists from
different places because of its scenic beaches and inland resorts. Guimbal produces mango
in abundance as well as other seasonal fruits. Farming and fishing are among the main
sources of livelihood of its people.

Upon the effectivity of the Local Government Code of 1991 (R.A. 7160), the Municipality
was provided with more power, authority, responsibility and resources to enable it to
become more self-reliant and effective partner in attainment of national goals.

The Municipality’s vision and mission statements are as follows:

A beautiful, healthy, progressive, peaceful, self-reliant, ecological sustainable

and globally competitive Guimbal.

To deliver effective and efficient governmental and non-governmental services

through dynamic leadership for people empowerment and sustainable ecological
balance.

The Municipality is headed by Mayor Oscar G. Garin, Sr. who was re-elected for the position
in the year 2019.

The Sangguniang Bayan of the Municipality is ably led by Vice Mayor Jennifer Garin-Colada
as the Presiding Officer with eight regularly elected members and one ex-officio member
representing the barangays.

The personnel complement of the Municipality as of December 31, 2019 totaled 149,
composed of eleven 12 elective officials, 78 permanent employees, and
59 job hire/personnel.

Financial Highlights

For CY 2019, the Municipality generated a total income of ₱114.310 million which is
₱4.304 million or 3.91 percent higher compared to last year’s income of ₱110.006 million.
Comparative data are as follows:

Increase/ %Increase/
CY 2019 CY 2018
(Decrease) (Decrease)
Local Taxes 9,881,053.49 9,121,741.06 759,312.43 8.32%
Internal Revenue
95,732,546.00 87,934,506.00 7,798,040.00 8.87%
Allotment (IRA)
Service and
4,605,700.00 5,770,162.84 (1,164,462.84) (-20.18%)
Business Income
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 Increase/ %Increase/
CY 2019 CY 2018
(Decrease) (Decrease)
Shares, Grants
0.00 2,530,496.46 (2,530,496.46) -100%
and Donations
Other Income 4,091,018.49 4,649,463.07 (558,444.58) -12.01%
Total Income 114,310,317.98 110,006,369.43 4,303,948.55 3.91%

Total expenses for the year amounted to ₱85.587 million which showed an increase of
₱21.415 million or 33.37 percent from the previous year’s expenses of ₱64.172 million. For
the year, excess of income over expenses amounted to ₱19.422 million which is lesser by
₱23.584 million or 54.84 percent than the previous year’s excess of income over expenses
of ₱43.007 million. They are presented as follows:

Increase/ %Increase/
CY 2019 CY 2018
(Decrease) (Decrease)
Personal
43,702,473.33 36,595,745.95 7,106,727.38 19.42%
Services
MOOE 38,302,836.93 25,195,743.71 13,107,093.22 52.02%
Non-cash
3,565,952.08 2,380,497.33 1,185,454.75 49.80%
Expenses
Financial
6,300.00 0.00 6,300.00 100.00%
Expenses
Total Expenses 85,587,352.92 64,171,986.99 21,415,365.93 33.37%

For CY 2019, total assets of the Municipality amounted to ₱315.128 million, liabilities
amounted to ₱47.605 million, and government equity amounted to ₱267.522 million.
Comparison with CY 2018 figures showed the following:

Increase/ %Increase/
CY 2019 CY 2018
(Decrease) (Decrease)
Current Assets 186,344,153.36 197,188,214.50 (10,844,061.14) -5.50%
Non-Current
164,178,524.14 117,894,242.86 46,284,281.55 39.26%
Assets
Total Assets 350,522,677.77 315,082,457.36 35,440,220.41 11.25%

Current
47,183,399.44 68,826,178.67 (21,642,779.23) -31.45%
Liabilities
Non-Current
421,950.29 421,950.29 0.00 0.00%
Liabilities
Total Liabilities 47,605,349.73 69,248,128.96 (21,642,779.23) -31.25%
Government
302,917,328.04 245,834,328.40 57,082,999.64 23.22%
Equity
Total Liabilities
350,522,677.77 315,082,457.36 35,440,220.41 11.25%
and Equity

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For CY 2019, the Municipality has a total appropriation of ₱212.762 million. Obligation
charged against these appropriation amounted to ₱103.027 million, as follows:

Fund Appropriation Obligation

2019 2019
General Fund
Current 154,641,028.00 82,477,564.62
Continuing 53,121,148.27 15,753,102.72
Subtotal 207,762,176.27 98,230,667.34

Special Education Fund

Current 5,000,000.00 4,796,781.40
Continuing 0.00 0.00
Subtotal 5,000,000.00 4,796,781.40
Grand total 212,762,176.27 103,027,448.74

Scope of Audit

Our audit covered the accounts and operations of the Municipality of Guimbal, Iloilo for the
calendar year ended December 31, 2019. The audit was conducted to determine the
reliability of the LGU’s accounts in order to express an opinion on the fairness of
presentation of the financial statements as well as to determine whether or not the LGU’s
transactions were made in accordance with existing laws, rules and regulations in the
utilization of resources.

Auditor’s Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the financial
statements due to the Municipality’s failure to conduct a physical inventory of its Property,
Plant and Equipment with a carrying value of ₱164.179 million as of December 31, 2019
thus, completeness and accuracy of the account could not be properly established contrary
to Section 124 of the Manual on the New Government Accounting System (MNGAS) for
Local Government Units (LGUs), Volume I.

Significant Audit Observations and Recommendations

For the above exceptions, we reiterated our prior years’ recommendation that the Local
Chief Executive instruct the OIC-GSO to conduct physical count of PPE annually and
prepare and submit the Report of the Physical Count of Property, Plant and Equipment
(RPCPPE) to the audit team not later than January 31 of each year.

The other significant audit observations are presented below together with the
corresponding recommendations:

1. Reconciling items, some of which were dated way back CY 2005, remained
unadjusted and continuously appearing as floating items in the bank reconciliation
statements contrary to COA Circular No. 96-011 hence, the accuracy of the “Cash in
Bank- Local Currency, Current Account” account could not be ascertained.

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 We recommended that the OIC-Municipal Accountant prepare the Journal Entry
Vouchers to effect the adjustments of the reconciling items appearing in the BRS in
order to reflect the correct balance of the Cash in Bank account.

2. Programs, Projects and Activities (PPAs) funded by the 20% Development Fund
amounting to ₱4.239 million were not aligned with the projects and activities
enumerated under Department of the Interior and Local Government (DILG) and
Department of Budget and Management (DBM) Joint Memorandum Circular (JMC)
No. 2017-1 thereby, defeating the purpose for which the fund was established.

We recommended that the Local Chief Executive direct the MPDC to submit a
proposal to the Local Development Council on the realignment of above-mentioned
PPAs to other developmental projects chargeable to the 20% Development Fund to
ensure compliance with the DILG and DBM JMC No. 2017-01.

3. Utilization of the 20% Development Fund in the implementation of local development

projects by the Municipality did not improve in CY 2019 as against previous years
defeating the purpose of Section 287 of the Local Government Code of 1991.

We recommended that the Local Chief Executive and other officials concerned to set
up an effective monitoring and feedback system as well as accountability system.
The projects funded by 20% DF should include the necessary plan on how to
effectively and efficiently implement these projects and minimize describing projects
in generic terms.

4. Delinquent real property taxes from CY 2015 to CY 2019 totaling ₱4.760 million
remained uncollected contrary to Sections 247 and 444 b (3.iii) of
Republic Act No. 7160, thus the Municipality forfeits additional revenues which could
have been utilized for its development programs and projects.

We recommended that the Local Chief Executive instruct the Municipal Treasurer to
develop additional tax collection campaign programs to intensify collection of the
delinquent real property taxes.

We also recommended that the Local Chief Executive direct the Municipal Assessor
to conduct continuous ocular inspection of real properties in the Municipality for a
proper assessment of target for RPT and SEF Receivables.

5. Payments to various contractors and caterers were only subjected to 1% creditable

withholding tax contrary to Revenue Regulation No. 2-98 as amended, thus exposing
the responsible officials to penalties and other liabilities that may be imposed by the
Bureau of Internal Revenue.

We recommended that the OIC- Municipal Accountant withhold 2% from payments

made to contractors/caterers and other supplier of services and remit the same to
the Bureau of Internal Revenue.

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Summary of Suspensions, Disallowances and Charges

As of December 31, 2019, the total audit suspensions, disallowances and charges are as
follows:

Notice of Suspension ₱ 0.00

Notice of Disallowance 1,875,000.00
Notice of Charge 0.00
Total ₱ 1,875,000.00

However, the Municipality was able to collect ₱0.862 million out of the total disallowed
amount, leaving an uncollected balance of ₱1.013 million as of the said year-end.

Status of Implementation of Prior Years’ Audit Recommendations

Out of the 61 audit recommendations embodied in the previous years’ annual audit report, 11
were fully implemented, 31 were partially implemented and 19 were not implemented.