EXECUTIVE SUMMARY

INTRODUCTION

Pursuant to RA 7160, known as the Local Government Code of 1991, the

Municipality of Sierra Bullones, like other government units, enjoy total independence in
managing, deciding and planning its own administrative, fiscal and development affairs in
conformity with national government thrust for sustainable social economic growth.

The Municipality, like any other local government units, is provided with policies
that seek to institutionalize democracy at the local level to complete the initial process of
empowering the people through direct participation in the affair of the government by
allowing them the widest possible space to decide, initiate and innovate in order to grow
in the direction it has determined for itself and in accordance with its own capabilities.

FINANCIAL HIGHLIGHTS

Comparative analysis of the Statement of Financial Position for calendar years 2021
and 2022, as graphically illustrated, showed an increase in Assets, Liabilities and Equity.
On the other hand, comparative analysis of the Statement of Financial Performance for the
same calendar years showed an increase in Total Income and Total Expenses but with a
slight decrease in Net income.

Statement of Financial Position

600,000,000.00

500,000,000.00
In Philippine Pesos

400,000,000.00

300,000,000.00

200,000,000.00

100,000,000.00

-
Assets Liabilities Equity
2022 538,997,424.58 77,721,622.84 461,275,801.74
2021 482,845,076.51 70,194,761.95 412,650,314.56

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 Statement of Financial Performance
200,000,000.00

150,000,000.00
In Philippine Pesos

100,000,000.00

50,000,000.00

-
Total Revenue Total Expenses Surplus/Deficit
2022 191,493,287.85 146,958,271.10 44,535,016.75
2021 159,372,205.03 128,307,414.81 31,064,790.22

The following graph illustrates the comparison of budget versus actual amounts of
revenues, expenditures and surplus for calendar year 2022.

Budget vs Actual

250,000,000.00
In Philippine Pesos

200,000,000.00

150,000,000.00

100,000,000.00

50,000,000.00

0.00

-50,000,000.00
Budget Actual
Revenues 208,638,150.32 205,077,357.07
Expenditures 248,247,004.17 155,040,812.55
Income/(Loss) -39,608,853.85 50,036,544.52

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SCOPE OF AUDIT

The audit was conducted on the accounts and operations of the Municipality of
Sierra Bullones, Bohol for the calendar year ended December 31, 2022. The audit consisted
of review of operating procedures; interview with concerned government officials and
employees; verification, reconciliation and analysis of accounts; post audit and such other
procedures considered necessary. It was aimed at ascertaining the propriety of
disbursements and reliability of financial reports and determining whether the agency’s
operations had been conducted in accordance with laws, rules and regulations and the
programs and objectives achieved efficiently and effectively.

AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

The auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements of the Municipality of Sierra Bullones, Bohol for the Calendar Year
2022 because of the following:

1. Liquidation of cash advances of the Disbursing Officer totaling ₱11,639,786.59

were not recorded in the Journal of Cash Disbursements contrary to Section 46 of
the NGAS Manual for LGUs, Volume 1, thus, propriety and correctness of the
accounts used to record these transactions cannot be ascertained. (Finding No. 1,
Part II of CY 2022 AAR)

2. The accuracy and reliability of the balances under the Inventory accounts totaling
₱2,779,794.25 cannot be established due to non-application of the Moving Average
Method of inventory costing, non-preparation of Requisition Issue Slips (RIS) for
issuance of inventories to end-users and failure to maintain Stock Cards and
Supplies Ledger Cards contrary to the provisions of NGAS Manual for LGUs,
Volume I. (Finding No. 2, Part II of CY 2022 AAR)

3. Insurance payments to properties and equipment of the municipality totaling

₱655,380.77 were recorded as outright expense, thereby overstating Insurance
Expenses and understating Prepaid Insurance and Government Equity accounts.
(Finding No. 3, Part II of CY 2022 AAR)

SIGNIFICANT FINDINGS AND RECOMMENDATIONS

Details of the significant findings and recommendations are enumerated as follows:

1. Payments made for various projects totaling ₱25,254,997.74 were not supported
with complete documentation contrary to Section 4(6) of Presidential Decree (P.
D.) No. 1445 and Section 9.1 of the Revised Documentary Requirements for
Common Government Transactions as prescribed under COA Circular No. 2012-

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 001 which casts doubt as to the validity, legality and propriety of these transactions.
(Finding No. 4, Part II of CY 2022 AAR)

We recommended that management immediately submit the lacking supporting

documents listed above to the assigned COA auditor and ensure subsequent payments to
projects be supported with complete documentation in accordance with Section 4(6) of P.
D. No. 1445 and Section 9.1 of COA Circular 2012-001 to ensure transparency, validity
and propriety in all transactions.

2. Ineffective planning and implementation of the road rehabilitation project funded

by INREMP totaling ₱21,713,954.09 led to the forfeiture of ₱868,559.06 or the
remaining 4% cost of unfinished portion due to the non-completion of the project
on the stipulated date. (Finding No. 5, Part II of CY 2022 AAR)

We recommended that management provide written justifications in relation to the

issuance of suspension orders due to unfavorable weather conditions on days without
recorded rainfall data and to the issuance of suspension order due to surge of COVID-19
cases. Furthermore, we also recommended that management exercise prudence in the
issuance of suspension orders in order to avoid unnecessary delays in the implementation
of projects. Finally, ensure that effective and efficient planning and implementation of
projects is observed in order to avoid any unnecessary loss or wastage of government
resources.

3. Procurement of relief goods totaling ₱11,431,730.00 for distribution to the families

affected by Super Typhoon Odette were not supported with the identified
beneficiaries and the duly signed, complete list of recipients contrary to Section 4
(6) of P. D. 1445, thus, actual delivery of the relief goods to its intended
beneficiaries cannot be established. (Finding No. 6, Part II of CY 2022 AAR)

We recommended that management submit the signed list of recipients, complete

with the detailed list of items received, to support the distribution of the relief goods.
Furthermore, in the preparation of the identified list of beneficiaries, please include in the
number of households, the name of the head of each family to be used as basis in the
procurement of the relief goods. Henceforth, management is required to support all
payments made with complete documentation pursuant to Section 4 (6) of P. D. 1445 in its
procurement.

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SUMMARY OF NOTICE OF SUSPENSIONS, NOTICE OF DISALLOWANCES,
NOTICE OF CHARGES ISSUED DURING THE YEAR

This Period
Beg. Balance Ending Balance
Jan. 1 - Dec. 31, 2022
31-Dec-21 31-Dec-22
NS/ND/NC NSSDC
Notice of Suspension P 98,266.60 P - P - P 98,266.60
Notice of Disallowance 2,061,018.00 *600.00 - 2,061,618.00
Notice of Charge - - - -
Total P 2,159,284.60 P 600.00 P - P 2,159,884.60
*Adjustment to the beginning balance

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT

RECOMMENDATION

Of the thirteen (13) audit recommendations embodied in CY 2021 AAR, five (5)
were fully implemented, four (4) were partially implemented and the remaining four (4)
were not implemented. As for CY 2020 and prior years audit recommendations, of the
fifteen (15) audit recommendations, five (5) were fully implemented, six (6) were partially
implemented and the remaining four (4) were not implemented.