EXECUTIVE SUMMARY
A. INTRODUCTION
The Town of Bugallon under its former name “Salasa” was founded in January
24, 1719 and was eventually renamed in 1921 by virtue of a congressional act sponsored
by Congressman Mauro Navarro to its present name. It is located North of Manila and
comprise approximately 189.64 square kilometers of land mostly devoted to agricultural,
residential, and some emerging industrial and housing communities. Bugallon is
subdivided into twenty-four (24) barangays. Based on 2010 Census made by National
Statistics Office, the estimated population of the town is 64,253. However, it is projected
that the present population is at 80,000.
The LGU is envisioned to be a model for academic excellence, public health and
safety, environmental preservation, good governance and providing equal opportunity for
all its constituents in a peaceful and friendly atmosphere through God-centered leadership
of the incumbent elected officials. The Vision Statement of the LGU is to make Bugallon
the best place to invest, to work, to live and raise a family. The LGU’s Mission Statement
is to develop a business friendly community where work and livelihood are available, a
clean and healthy environment and a peaceful and safe community.
B. OPERATIONAL HIGHLIGHTS
During the year, the Municipality implemented major infrastructure projects and
programs funded from its appropriation and from outside sources which boosted its
social, agricultural and economic growth and delivery of basic services.
Among the major projects of the Municipality that were implemented and
completed are the following:
No. Programs/Projects/Activity Location Total Cost
Name (₱)
1 Construction of Legislative Retirees Street,
Building(SB) Poblacion, Bugallon,
Pangasinan 9,914,629.76
2 Construction of Drainage Ignacio Canto Street
System w/ Cover to N. Espino
Upgrading of Barangay Extension,
Road (FMR) Poblacion, Bugallon,
9,925,368.62
3 Construction of 1 unit
Covered Stall Building "F" Public Market,
(Ambulant Section) Poblacion, 2,984,309.64
4 Construction of Line Canal Barangay Poblacion, 3,479,929.01
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No. Programs/Projects/Activity Location Total Cost
Name (₱)
withCover & Pathways Bugallon,Pangasinan
along N. Espino,Ignacio
Canto Street
5 Construction of 1 unit Public Market,
Covered StallBuilding "F" Poblacion, Bugallon,
(Ambulant Section) Pangasinan 2,984,309.64
6 Improvement/Concreting Infront of BIS going
of RoadShoulder infront of to PerfectoAbad
BIS going toPerfecto Abad Street, Poblacion,
Street Bugallon, 1,488,709.66
C. FINANCIAL HIGHLIGHTS
The financial position, financial performance, and sources and utilization of the
appropriations and obligations of the Local Government Unit (LGU) for the Calendar
Year (CY) 2021, with corresponding figures for CY 2020, are as follows:
Increase
2021 2020
(₱) (₱) % of
(Decrease)
change
Assets 403,457,241.89 355,965,818.58 47,491,423.31 13.34%
Liabilities 168,915,944.22 127,065,305.09 41,850,639.13 32.94%
Government 5,640,784.18 2.46%
Equity 234,541,297.67 228,900,513.49
Income 240,559,535.51 237,581,008.56 2,978,526.95 1.25%
Expenses 210,462,412.21 186,119,159.51 24,343,252.70 13.08%
Appropriations 255,446,139.14 300,254,807.51 (44,808,668.37) 14.92%
Obligations 226,004,684.51 204,622,376.71 (21,382,307.80) 10.45%
D. SCOPE OF AUDIT
The audit covered the operation of the Municipality for CY 2021. It was
conducted to ascertain the fairness of presentation of the financial statements, check the
compliance with existing laws, rules and regulations and determine whether Management
in the implementation of its projects/programs/activities has attained its goals and
objectives in an economical, efficient and effective manner.
The audit included analysis of accounts, review of transactions, test of compliance
with existing laws, rules and regulations, review of operating procedures, inspection of
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programs and projects, interview of officials and employees and such other procedures
considered necessary under circumstances.
E. AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS
The auditor rendered a qualified opinion on the fairness of presentation of the
financial statements due to uncorrected misstatements totaling to ₱ 16,504,019.38,
comprising of (a) understatement of Public Infrastructure Assets in the amount of
₱14,012,019.38 due to derecognition from the books, and (b) understatement of Motor
Vehicles amounting to ₱2,293,000.00 and Water Supply System amounting to
₱199,000.00 due to non-posting of these accounts in the general ledger,
F. SUMMARY OF SIGNIFICANT AUDIT OBSERVATIONS AND
RECOMMENDATIONS
Part II of the report contains audit observations and recommendations which were
discussed with the Management during the exit conference conducted on April 29, 2022.
Management’s comments were incorporated in the report, where appropriate. The most
significant of which are as follows:
1. Balance of Road Networks account with book value of ₱23,768,669.71 as of
December 31, 2021 could not be ascertained as to its accuracy, existence and
validity due to non-submission of the Report on Local Road Network duly supported
with road map and Inventory Report on Local Road Network and non-maintenance
of Local Road Networks Property Card and Local Road Networks Ledger Card
which is not in accordance with Items VI and VII of COA Circular No. 2018-008,
dated November 23, 2015. Likewise, the disclosure required in Item VI (2) was not
included in the Notes to the Financial Statements; thereby, affecting the reliability of
the Road Network account presented in the Financial Statements.
We recommended that Management require the Municipal Engineer, Municipal
Accountant and General Services Officer to prepare and submit the required reports.
2. The Land and Investment Property-Land accounts amounting to ₱51,989,617.45 as of
December 31, 2021 comprised of 65 parcels of land, of which 54 parcels were not
titled/registered under the Torrens Title System in the name of the LGU, was not in
conformity with Section 148 of COA Circular No. 92-386, thereby exposing
government property to risk of possible adverse claims.
We recommended that Management instruct the Municipal Assessor to exhaust all
possible means for speedy titling of land and acquire Certificate of Title in the name
of the LGU in order to protect the interest of the LGU for any adverse claims by third
parties.
3. Liquidation Report for Advances to Operating Expenses totaling ₱5,300,089.95 were
not submitted to the Audit Team despite full liquidation in the books of accounts as of
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December 31, 2021, which is not in accordance with COA Circular No. 2012-004,
thus, casting doubt on the validity, reliability and correctness of the liquidation and
fair presentation of Advances to Operating Expenses account amounting to zero as of
December 31, 2021.
We recommended that Management direct the Municipal Accountant to immediately
submit the liquidation reports stated above for the Audit Team to ascertain the
validity of the liquidations made and the consequent recording of liquidations in the
books to avoid delay in the audit of government accounts and transactions.
G. STATUS OF IMPLEMENTION OF PRIOR YEARS’ AUDIT
RECOMMENDATION
Of the 27 audit recommendations contained in the 2020 Annual Audit Report,
(AAR) 8 were implemented, and 19 were not implemented. In view of the significant
effects on the financial statements, the unimplemented recommendations were reiterated
in this report.
H. STATUS OF SETTLEMENT OF AUDIT SUSPENSIONS, DISALLOWANCES
AND CHARGES
As of December 31, 2021, the unsettled balances of Suspensions, Disallowances
and Charges are as follows:
Balance as This Period Balance as of
of January 1 – December December 31,
Particulars
December 31, 2021 (₱) 2021 (₱)
31, 2020 (₱) Issuances Settlements
Notice of 0.00 0.00 0.00 0.00
Suspensions
Notice of 1,378,054.01 1,351,558.82 0.00 2,729,612.83
Disallowances
Notice of Charges 0.00 0.00 0.00 0.00
Total 1,378,054.01 1,351,558.82 0.00 2,729,612.83
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