EXECUTIVE SUMMARY

A. INTRODUCTION

Gabaldon, formerly a barrio of Laur, Nueva Ecija, was known as Bitulok. On

June 12, 1950, by virtue of Republic Act 496, Bitulok was separated from its mother
town to become an independent municipality, comprising of thirteen Barangays,
namely: Malinao, Bagting, Calabasa, Ligaya, Bagong Sikat, Bugnan, Tagumpay,
Pantoc, Macasandal, Bitulok, Bantug, Sawmill and Cuyapa.

In the year 1952, by virtue of Republic Act 949, the name Bitulok was changed to
Sabani. On June 15, 1955, the name Sabani was changed to Gabaldon by virtue of
Republic Act 1318, in honor of the former Governor of Nueva Ecija, Don Isauro
Gabaldon.

At present, the municipality is composed of sixteen barangays with a total population

of 32,246 as per census made in year 2010.

Pursuant to R.A. No. 7160, known as the Local Government Code of 1991, the
municipality, like other local government units, enjoys total independence in
managing, deciding and planning its own administrative, fiscal and development affairs
in conformity with the national government’s thrusts for sustainable social and
economic growth.

At present, the municipality is headed by Mayor Jobby P. Emata with the able
assistance of the Sangguniang Bayan and 13 departments/offices responsible to carry
out the designed plans and programs toward the attainment of its goals.

B. SCOPE OF AUDIT

Our audit was conducted in accordance with the International Standards of Supreme
Audit Institutions (ISSAIs) and we believe that it provides reasonable bases for the
results of audit.

The objectives of the audit were to (a) ascertain the level of assurance that may be
placed on Management’s assertions on the financial statements; (b) recommend
agency improvement opportunities; and (c) determine the extent of implementation of
prior year’s unimplemented audit recommendations.

In compliance with COA Unnumbered Memorandum dated September 14, 2022,

which identifies the CY 2022 audit foci, we audited the Cash and Cash Equivalents,
Property Plant and Equipment, Financial Liabilities, Covid-19 Vaccination Program,
Fund Transfers, Utilization of 20% Development Fund and DRRM Fund, Payment to
JOs, Contractuals and Consultants, audit of revenues, compliance to tax laws,
remittance of mandatory contributions (Government Service Insurance System,
Philippine Health Insurance Corporation, and Pag-IBIG), programs and projects
related to Gender and Development, and Status of Audit Suspensions, Disallowances
and Charges. Results of audit with significant observations were discussed in Part II
of this Report.

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C. FINANCIAL HIGHLIGHTS

The following comparative data show the financial position, results of operation and
application of funds of the Municipality of Gabaldon for the years 2022 and 2021.

Increase /
2022 2021
(Decrease)
Financial Status
Assets 560,563,004.78 498,661,609.09 61,901,395.69
Liabilities 198,692,893.17 203,723,253.27 (5,030,360.10)
Government Equity 361,870,111.61 294,938,355.82 66,931,766.79
Results of Operation
Income 269,876,967.13 192,148,206.92 77,728,760.21
Expenses 191,715,772.78 148,618,499.62 43,097,273.16
Excess of Income
Over Expenses 78,161,194.35 43,529,707.30 34,631,487.05
Sources and Application
of Funds
Appropriations 253,464,298.93 193,774,585.69 59,689,713.24
Obligations 216,305,797.12 175,577,906.66 40,727,890.46
Balance 37,158,501.81 18,196,679.03 18,961,822.78

D. INDEPENDENT AUDITOR’S REPORT

The Auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements of the Municipality for the following reasons: (a) PPE accounts
were unreliable due to: (i) missing properties amounting to ₱2,705,462.97; and (b)
RPT/ SET Receivable accounts were misstated due to: (i) incorrect basis of the
amount set-up for RPT/SET Receivable; and (ii) variance noted between the records
of Accounting and Treasurer’s Offices amounting to ₱6,811,377.90.

E. OTHER SIGNIFICANT FINDINGS AND RECOMMENDATIONS

We found the Municipality of Gabaldon to be compliant with laws, rules and

regulations on the withholding and remittance of (i) taxes to the Bureau of Internal
Revenue, and (ii) contributions and loan amortizations to the Government Service
Insurance System, Pag-IBIG and PhilHealth.

On the other hand, the observations which need Management action are briefly
summarized as follows:

1. Laxity in the monitoring of cash advances and failure of the LGU to enforce the
pertinent provisions set forth in Section 89 of P.D. No. 1445 and Section 4.1.3
of COA Circular No. 97-002 resulted in the accumulation of overdue cash
advances of ₱675,750.00 thus, exposing the same to risk of loss or misuse while

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 delaying the recognition in the books of the assets or expenses paid out of said
cash advances, if any. (Observation No. 1)
We recommended that the LCE require the Municipal Accountant to (a)
continue monitoring the liquidation of the overdue cash advances; (b) send
letters to the family of the deceased accountable officers requesting for the death
certificate of the said officers; (c) submit the copy of the letter from the COA
Central Office as proof that the Liquidation Report was submitted to them; and
(d) secure all documents needed for the request for write-off of dormant
accounts as prescribed in COA Circular No. 2016-005, and submit the same in
our office for review.

2. For CY 2022, the Municipality was able to satisfactory conduct vaccination

drives and have vaccinated 16,807 adults and 5,334 children as at year-end.
However, we noted that the receipt and issuances of COVID-19 vaccines since
CY 2021 were not accounted in the books as inventories, inconsistent with
Section 51 of the Manual on New Government Accounting System for LGUs,
and the International Public Sector Accounting Standard (IPSAS) 12-Inventories
thus, understating the inventories in amount equivalent to the value of unused
inventories numbering to 561 vaccine doses as at said year-end. Furthermore,
the RHU reported 405 doses of COVID-19 vaccines that were expired due to the
waning interest of the people in getting further doses, resulting in wastage of
government resources. (Observation No. 4)

We recommended that the LCE require the (a) Municipal Accountant to (i)
ensure that the unused vaccines as at December 31, 2022 are recognized as
inventories; and (ii) henceforth record in the books future receipts and issuances
of the said inventories; and (b) MHO to (i) continue the LGU’s vaccination roll
out to increase the number of vaccinated residents even after the local herd
immunity is attained; (ii) closely monitor the expiration dates of the vaccines;
and (iii) coordinate with the PHO for the immediate use of nearly-expiring
vaccines with the end view of preventing future incidences of expired vaccines.

3. The Municipality has substantially complied with the provisions set forth in the
DILG-DBM JMC No. 2017-01 and No. 2020-01 by appropriating at least 20%
of the Internal Revenue Allotment (IRA) for the development project amounting
to ₱44,983,223.84 and implementing 13 PPAs totaling ₱33,641,685.81 or
74.79%, thereby attaining the purpose for which the Development Fund was
created. (Observation No. 6)

We recommended that the LCE instruct the (a) BAC Members and the
Municipal Engineer to judiciously plan its PPAs as well as provide a reasonable
timetable for all procurements and implementation of future development
projects; and (b) Municipal Accountant to continue to require the submission of
the requisite documents before payments could be released.

4. The Municipality substantially complied with the preparation of the GAD plan
and budget (GPB) and reporting thereof pursuant to the prescribed guidelines of
PCW-DILG-DBM-NEDA Joint Memorandum Circular (JMC) No. 2013-01.
However, we noted that (a) two projects reported in the GAD Accomplishment
Report were not included in the GPB; and (b) the mechanism of gender

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 assessment and analysis was not instituted in formulating the GPB and reporting
of related information, resulting in inconsistent and inaccurate internal data.
(Observation No. 8)

We recommended that the LCE instruct the GFPS to (a) continue its efforts to
improve gender mainstreaming to achieve full compliance with the provisions of
relevant laws and regulations; (b) improve the reporting functions and ensure
that GAD internal data are consistent and corroborative in order to be useful to
the users; (c) inform the concerned DILG in writing of any update and changes
in the GPB; (d) direct all members of the GAD Focal Point System to conduct a
gender analysis of the Municipality’s program, project and activities through the
administration of HGDG for purposes of GAD budget attribution; and (e)
coordinate with Philippine Commission on Women for the holding of HGDG
Training for the GFPS and GAD TWG.

5. Of the ₱22,521,963.92 available funds for Local Disaster Risk Reduction and
Management (LDRRM) in CY 2021, the Municipality utilized ₱17,870,611.66
or 79.35% for COVID-19 pandemic responses and other disaster related
programs, projects and activities. However, deficiencies were noted in the
documentation and reporting of LDRRMF transactions and accomplishments
inconsistent with COA Circular No. 2012-001, COA Circular No. 2012-002,
and DBM Local Budget Circular No. 130 dated November 19, 2020, hence,
overall efficiency and effectiveness as well as regularity of fund utilization
could not be immediately assessed and verified. Moreover, the LDRRMF
Investment Plan (IP) was not updated to include implemented PPAs using the
unexpended balance from previous years inconsistent with Sections 5.1.2,
5.1.11, 5.1.13 and 5.1.15 of COA Circular No. 2012-002 dated September 12,
2012. (Observation No. 9)

We recommended that the LCE direct the (a) Municipal Treasury to submit the
sales invoice and official/acknowledgment receipt for the payment of the
purchase of rice; and (b) MDRRMO, in collaboration with MDRRMC, to (i)
identify and incorporate, under a separate caption, in the LDRRMFIP the
projects and activities to be charged out of the unexpended LDRRMF from
previous years to facilitate monitoring and evaluation of the activities of the
fund; and (ii) update or revise the LDRRMFIP as necessary to effect the
changes in the PPAs to be implemented.

6. The Municipality has substantially complied with the Ecological Solid Waste
Management (ESWM) Act of 2000. However, we noted that (a) the ordinance
for the revenue-generating project under SWM has yet to be passed by the
Municipality, which is not in accordance with Section 129 of RA 7160, thus
rendering unauthorized the collection of income from the said project;; (b)
inventories for sale of undetermined amount were not recognized in the books
contrary to COA Circular No. 2014-002 and the International Public Sector
Accounting Standard (IPSAS) 12-Inventories thus, understating assets and
equity by the said amount as at year-end; and (c) the residual containment area
was not properly managed thereby heightening the risk of exposure of the
residents to possible health and sanitation issues. (Observation No. 10)

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 We recommended that the LCE direct the: (a) Municipal Treasurer and
Municipal Planning and Development Office (MPDO) to: (i) propose for the
passing of an ordinance on the operation and revenue generation of the hollow
blocks production project; and (ii) seek the approval of the Sangguniang
Panlalawigan for the same; (b) MENRO to: (i) coordinate with the MPDO and
Municipal Budget Officer on the contracting of hauling services for wastes; (ii)
report to the accounting office data on daily production, sales and donations and
year-end inventories of hollow blocks; and (c) Municipal Accountant to record
in the the books financial transactions involving the operation of hollow block
production project.

F. SUMMARY OF TOTAL SUSPENSIONS, DISALLOWANCES AND

CHARGES AS OF YEAR END

As at December 31, 2022, the Municipality has no unsettled

suspensions/disallowances and charges.

G. STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT

UNIMPLEMENTED RECOMMENDATIONS

Monitoring and evaluation of the Management’s action on the 38 audit

recommendations contained in the CY 2021 Annual Audit Report revealed that 22
were fully implemented and the remaining 16 were partially acted upon.