EXECUTIVE SUMMARY

Introduction

On April 27, 1871, Rodriguez, Rizal became an independent town after originally being a
portion of Municipality of San Mateo, Rizal. Located at the foot of Sierra Madre Mountains,
Rodriguez is the northernmost municipality of the Province of Rizal. It is bounded on the north
by the town of Norzagaray (Bulacan), on the east by General Nakar (Quezon), on the south
by Antipolo City (Rizal) and the town of San Mateo (Rizal), and on the west by Quezon City.
On the globe, Rodriguez lies at latitudes 14” 41’ to 14” 54’ North and longitudes 121” 07’ to
121” 22’ East.

Rodriguez, Rizal has a land area of 312.70 square kilometers. It has a population of 443,954
as of 2020 census. Currently, the town of Rodriguez is classified as a first-class urban
Municipality which is politically subdivided into 11 barangays namely: Balite; Burgos;
Geronimo; Macabud; Manggahan; Mascap; Puray; Rosario; San Isidro; San Jose and San
Rafael.

For Calendar Year (CY) 2022, the organizational structure of the Municipality is as follows:

a. Key Officials

Mayor : Hon. Ronnie S. Evangelista

Vice-Mayor
Members of the Sanggunian
Liga ng Barangay President
Sangguniang Kabataan President
: Hon. Edgardo Z. Sison
: Hon. Ralp Ivan A. Rodriguez
Hon. Judith G. Cruz
Hon. Mark Anthony C. Marcelo
Hon. Mario Roderick C. Lazarte
Hon. Maria Carmela V. Javier
Hon. Mark David C. Acob
Hon. Arnel M. De Vera
Hon. Rolando R. Umali
Hon. Mark Ronil C. Hernandez
Hon. Athena Jon A. Olaez

Municipal Accountant : Leoncio I. Orga

Municipal Treasurer : Gemma C. Cruz

b. No. of Personnel Complement

Permanent 323
Elective 12
Co-Terminus 20
Casual 108
Job Order 2,234
Total 2,697

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Financial Highlights

For CY 2022, the Municipality generated total revenue of P1,504,570,294.67 from local taxes,
permits and licenses, services, business and other income and internal revenue allotment
excluding fund transfer received amounting to P388,987,434.30. Total revenue excluding fund
transfers received is P430,083,563.59 or 40.03 percent higher than last year’s revenue of
P1,074,486,731.08. On the other hand, expenses reached the amount of P1,658,194,540.31
excluding subsidies to NGAs, LGUs and interfund transfers totaling P13,125,437.68, a
decrease of P67,880,563.46 or 3.93 percent from last year’s level of P1,726,075,103.77.

Total appropriations under the General Fund (GF) and Special Education Fund (SEF)
amounted to P1,528,276,279.24, of which P1,226,441,559.49, were obligated during the year.

The following is the Municipality’s total assets, liabilities and equity, and total revenue and
expenses for CYs 2022 and 2021:

Increase
2022 2021
(Decrease)
Assets 2,855,436,684.65 2,915,436,912.27 (60,000,227.62)
Liabilities 941,867,253.10 1,564,514,275.21 (622,647,022.11)
Equity 1,913,569,431.55 1,350,922,637.06 562,646,794.49
Revenue 1,893,557,728.97 1,712,912,278.67 180,645,450.30
Expenses 1,671,319,977.99 1,743,578,495.41 (72,258,517.42)

Scope and Objectives of the Audit

The audit covered the accounts and operations of the Municipality of Rodriguez, Rizal for the
period January 1 to December 31, 2022. The objectives of the audit are to: (a) determine the
level of assurance that may be placed on Management’s assertions on the financial
statements; (b) verify the propriety of financial transactions and on a limited extent, determine
compliance with existing laws, rules and regulations; (c) recommend agency improvement
opportunities; and (d) determine the extent of implementation of prior years’ audit
recommendations.

Auditor’s Opinion on the Financials Statements

The Auditor rendered a qualified opinion on the fairness of the presentation of the financial
statements of the Municipality of Rodriguez, Rizal due to the eight projects totaling
P13,404,391.32, which were erroneously recorded as expense instead of their appropriate
Property, Plant and Equipment account, contrary to Paragraphs 13, 14 and 23 of the
International Public Sector Accounting Standard (IPSAS) 17, thereby overstating the Repairs
and Maintenance Expense account and understating the related PPE accounts by the same
amount.

For the exception cited above we recommended that the Municipal Mayor direct the Municipal
Accountant to make necessary correcting journal entries on the noted erroneous recording of
transactions and to exercise caution in classifying and recording transactions in order to avoid
such errors.

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Other Significant Audit Observations and Recommendations

The following are the other significant observations and recommendations which were all
discussed with the concerned Municipal Officials:

1. A substantial difference of P167,651,860.75 between the balances of Cash in Bank

account of the treasury and accounting records has remained unaccounted/unadjusted as
at year-end, contrary to Section 63(F) of the Local Treasury Operations Manual and COA
Circular No. 96-011 dated October 2, 1996. Thus, rendering the accuracy and reliability
of the balance of Cash in Bank - Local Currency Account totaling P793,839,735.93
doubtful.

We recommended that the Municipal Mayor direct the Municipal Accountant and the
Municipal Treasurer to:

a. submit a written explanation on the difference noted between their records despite
prior years audit observation on the said deficiency; and

b. henceforth, strictly comply with the provisions of Section 63(F) of the Local Treasury
Operations Manual and COA Circular No. 96-011 dated October 2, 1996.

We also reiterated our previous recommendations that the Municipal Mayor thoroughly
investigate the cause of the difference of P167,651,860.75 between their respective
records and subsequently prepare the necessary adjustments to present the correct
balance of the Cash in Bank - Local Currency Account in the Accounting and Treasury
Officers’ records.

2. Due from Special Accounts and Due from Other Funds with year-end balances of
P11,268,145.40 and P28,274,086.51, respectively, did not reconcile with their reciprocal
accounts of Due to Special Accounts and Due to Other Funds of P10,973,088.92 and
P28,198,943.40, with a difference of P295,056.48 and P75,143.11, respectively, contrary
to Sections 111 and 112 of Presidential Decree (PD) No. 1445, thereby casting doubt on
the correctness of the balances of the said accounts and affecting their fair presentation
in the financial statements.

We recommended that the Municipal Mayor direct the Municipal Accountant to:

a. make necessary correcting journal entries on the noted erroneous recording of

transaction based on the result of the investigation; and

b. exercise caution in classifying and recording transactions in order to avoid such

deficiency.

3. The balances of Due from LGUs and Due to LGUs accounts recorded in the Municipality’s
books have net discrepancies of P3,931,751.93 and P1,210,795.56, respectively, with
their reciprocal accounts in the books of the Province, contrary to Items 1 and 2, Section
111 of the Presidential Decree (PD) No. 1445, thus casting doubt on the accuracy,
reliability and correctness of the said accounts in the financial statements.

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 We recommended that the Municipal Mayor direct the Municipal Accountant to coordinate
with the Provincial Accountant to determine the details of the discrepancies between the
balances of the Due from/Due to LGUs accounts recorded in the Municipality and
Province’s records so that appropriate adjustments can be made for fair presentation of
the affected accounts in the Municipality’s financial statements; and henceforth, to conduct
periodic reconciliation of Municipality’s accounts with the Provincial Accounting records to
avoid the accumulation of discrepancies between the two records.

4. The rules on the granting and liquidation of cash advances were not strictly observed by
the Municipality, contrary to Sections 4 and 5 of COA Circular No. 97-002 dated February
10, 1997, thus the unliquidated cash advances accumulated to P31,510,519.00 as of
December 31, 2022, which may expose the government funds to possible loss through
misuse or misappropriation.

We recommended that the Municipal Mayor direct the Municipal Accountant to issue a
demand letter to all concerned accountable officers requiring the immediate liquidation of
their respective cash advances.

We also reiterated our previous recommendations that the Municipal Mayor direct the
Municipal Accountant to refrain from granting additional cash advances unless the
previous ones had been already settled/liquidated; and henceforth, strictly observe the
guidelines on the granting and liquidation of cash advances pursuant to COA Circular No.
97-002.

5. The Municipality has resorted to the hiring of 2,234 Job Order (JO) workers which
comprises 82.83 percent of their total workforce due to the absence of written policy
guidelines in the recruitment and engagement of JO workers, contrary to Sections 76 and
77 of Republic Act (RA) No. 7160, thereby exposing the JO hiring of the Municipality to
possible abuse if left unchecked.

We recommended that the Municipal Mayor direct the OIC-Human Resource

Management Officer to:

a. assess the existing organization structure and staffing pattern of the Municipality so
that the ideal number of plantilla items/positions could be established and develop a
written policy guideline on the hiring of individuals under JO, clearly defining the
conditions whereby employment of such JO personnel may be availed of; and

b. consider those qualified JO personnel for appointment to casual or vacant regular

plantilla positions in the Municipality.

6. The Municipal Accountant failed to set up the Real Property Tax (RPT) and Special
Education Tax (SET) Receivables at the beginning of the year, contrary to Section 248 of
the Republic Act (RA) No. 7160 and Section 20 of the Manual on the New Government
Accounting System (MNGAS) for Local Government Units (LGUs), Volume I, thus, the
correctness of the year-end balances of the RPT/SET Receivables and their
corresponding Deferred RPT/SET accounts are doubtful.

We reiterated our previous recommendation that the Municipal Mayor direct the Municipal
Treasurer, in coordination with the Municipal Assessor, to prepare and submit the required
certified list of taxpayers and the tax collectible due from them, at the beginning of the year

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 to the Municipal Accountant as a basis of recording the RPT/SET Receivable in the
Municipality’s books of accounts.

7. The Municipality failed to intensify the tax collection campaign and post notices of
delinquency in prescribed places, contrary to Section 254 of Republic Act (RA) No. 7160,
thus resulting in the significant increase of delinquent receivables and hampering the
implementation of viable projects that could have been derived out of it.

We recommended that the Municipal Mayor direct the Municipal Treasurer to:

a. conduct tax campaign initiatives to boost the collection of Real Property Tax and other
taxes imposed by the Municipality; and

b. post notice of delinquency in places prescribed by Section 254 of RA No. 7160.

8. The Municipality failed to maintain a complete subsidiary record for each fund received
from the National Government Agencies (NGAs) or to return any unutilized balance of the
fund amounting to P4,161,933.20, contrary to COA Circular No. 94-013 dated December
13, 1994, thus, deprived the other government agencies of the use of the said funds.

We recommended that the Municipal Mayor direct the Municipal Accountant and the
Municipal Treasurer to:

a. exert efforts to locate and retrieve the relevant documents pertaining to the fund with
no subsidiary ledger; and

b. closely coordinate with the concerned National Government Agency in order to

immediately return the unexpended balances of fund transfers to its source agencies
as required under COA Circular No. 94-013 dated December 13, 1994.

9. The construction of three infrastructure projects of the Municipality was suspended for lack
of proper planning, contrary to Section 7.1 of the 2016 Revised Implementing Rules and
Regulation (RIRR) of Republic Act (RA) No. 9184, thus the purpose of the projects of
improving community services was not attained to the disadvantage of its constituents.

We recommended that the Municipal Mayor direct the Municipal Planning and
Development Coordinator and OIC-Municipal Engineer to immediately comply with the
relevant requirements or resolve existing issues should these projects be continued; and
henceforth, meticulously and judiciously plan all procurement activities, comply to all
necessary requirements and coordinate with stakeholders to resolve any issues, if any,
prior to the start of the procurement activities.

10. The Municipality was unable to fully comply with the accounting and reporting guidelines
for the Local Disaster Risk Reduction and Management Fund (LDRRMF) pertaining to the
preparation and submission of comprehensive Local Disaster Risk Reduction and
Management Fund Investment Plan (LDRRMFIP) and Report on the Sources and
Utilization of the LDRRMF within the prescribed period, contrary to Section 5.0 of COA
Circular No. 2012-002 dated September 12, 2012, thus resulting in the difficulty in timely
evaluation of the utilization of the LDRRMF and delays in the communication of the results
thereof.

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 We reiterated our previous recommendations that the Municipal Mayor direct the:

a. Municipal Disaster Risk Reduction and Management Officer (MDRRMO) to prepare a

comprehensive and integrated LDRRMFIP in accordance with the national, regional,
provincial framework, and policies in Disaster Risk Reduction in close coordination
with the Municipal Disaster Risk Reduction and Management Council and Municipal
Development Council, which will be reviewed and updated annually in compliance with
the above-mentioned regulation; and

b. Municipal Accountant in coordination with the MDRRMO to regularly prepare the

monthly Report on Sources and Utilization of DRRMF and submit the same on or
before the 15th day after the end of each month through the Local Disaster Risk
Reduction and Management Council and Local Development Council to the Audit
Team.

11. The implementation of the Gender and Development Programs, Projects and Activities
(GAD PPAs) was not strictly based on the GAD Plan and Budget (GPB) of the Municipality
contrary to Section 4.1.C.1 of Philippine Commission on Women (PCW) – Department of
the Interior and Local Government (DILG) – Department of Budget and Management
(DBM) – National Economic and Development Authority (NEDA) Joint Memorandum
Circular (JMC) No. 2013-01 dated July 28, 2013, as amended by PCW-DILG-DBM-NEDA
JMC No. 2016-01, thus the purpose of the GAD fund to pursue women’s empowerment,
promote gender equality, fulfill women’s rights and eliminate gender discrimination in the
government system by mainstreaming GAD perspectives to LGUs PPAs were not fully
achieved as planned.

We reiterated our previous recommendation that the Municipal Mayor direct the GAD
Focal Person to strictly monitor and ensure the efficient implementation of the planned
GAD program, projects and activities to ensure that GAD Objectives are fully attained and
the actual expenditures will equate the amount of the approved budget per PPA.

Summary on the Status of Audit Suspensions, Disallowances and Charges

Audit suspensions and disallowances amounting to P1,582,595.00 and P6,702,551.55,

respectively, remained unsettled as of year-end, the details are as follows:

Amount Status/
Remarks
Nature
Beginning Ending
Issuance Settlement
Balance Balance
Notice of Suspension P1,582,595.00 P 0.00 P 0.00 P1,582,595.00
Notice of Disallowance 6,783,551.55 0.00 81,000.00 6,702,551.55

Status of Implementation of Prior Year’s Audit Recommendations

Of the 24 audit recommendations embodied in the CY 2021 Annual Audit Report, eight were
fully implemented, three were partially implemented, and the remaining 13 were not
implemented by the Municipality of Rodriguez.

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