San Jorge Executive Summary 2020

Republic of the Philippines
COMMISSION ON AUDIT
REGIONAL OFFICE NO. VIII
Candahug, Palo, Leyte
ANNUAL AUDIT REPORT
ON THE
MUNICIPALITY OF SAN JORGE

PROVINCE OF SAMAR
FOR THE YEAR ENDED DECEMBER 31, 2020

General Fund and Trust Fund at year-end totaling ₱16,220,000.00 and ₱1,601,442.36,
respectively, resulted in unreconciled difference of ₱14,618,557.64; the receivable accounts
remained dormant in the books for more than ten (10) years and have not been acted upon to
facilitate the proper write-off thereof, resulting in the overstatement of agency assets totaling
₱722,037.00; and some of the required disclosures of the Loans Payable-Domestic Account
with an outstanding balance of ₱11,990,524.60 were omitted in the Notes to Financial
Statement.
In addition to the above exceptions, the Auditor enumerated in his report the following
significant findings and observations:
1. The issuance of the goods to end-users were not controlled due to non-preparation of
Reports of Supplies and Materials Issued (RSMIs) and Requisition and Issue Slips
(RIS).
2. The LGU did not impose the 10% retention money from progress payments to
contractors.
3. Various deficiencies were noted on the grant of COVID-19 Hazard Pay such as: a)
additional Hazard Pay amounting to P141,260.00 was released despite the absence of
appropriation ordinace for augmentations and authorizing its payment; b) payment of
Hazard Pay was not supported with necessary supporting documentary requirements;
and c) payment of Hazard Pay for the period March 17-31, 2020 despite the absence
of Enhanced Community Quarantine (ECQ) from IATF.
4. Various deficiencies were noted in the LGU’s compliance with the documentary and
reporting requirements of the pay-outs of SAP funds, thus casting doubt on the
propriety and validity of the distribution of a portion of the funds.
5. Various deviations were observed in the utilization of the Bayanihan Grant to Cities
and Municipalities (BGCM) in Calendar Year (CY) 2020, such as: (a) non-creation of
Special Account in the General Fund through an appropriation ordinance or through
inclusion in the appropriation ordinance authorizing supplemental budget; (b)
deficiencies on the disbursements; (c) non-preparation of Monthly Fund Utilization
Report and Status of Implementation of Programs, Projects and Activities (PPAs) and
non-posting of the same in LGU premises, thus, the propriety of some disbursements
are doubtful, and d) the adopted mode of procurement and status of implementation
were not properly monitored.
6. The LGU did not comply with the posting requirement of documents/information
related to Emergency Procurement under Bayanihan Act in the Government
Procurement Policy Board (GPPB) Online Portal, thus, full transparency and
accountability on procurement transactions were not observed.
7. The LGU charged expenses amounting to ₱81,200.00 to the Quick Response Fund
(QRF) of the Local Disaster Risk Reduction and Management Fund (LDRRMF), which
were not related to relief and recovery operations.
Also, as discussed in Part III of this report, the Municipality did not provide
allowance for depreciation for depreciable assets totaling ₱139,587,999.78 during
Calendar Year (CY) 2020, thus understating the related Expense and Accumulated
Depreciation accounts, as well as overstating the Property, Plant and Equipment and
Government Equity accounts; the non-compliance with accounting and reporting
requirements rendered the balance of Local Road Networks account at year-end totaling
₱24,401,985.60 doubtful; the balances of reciprocal accounts, Due from Other Funds and
Due to Other Funds under the General Fund and Trust Fund at year-end totaling
₱16,220,000.00 and ₱1,601,442.36, respectively, resulted in unreconciled difference of
₱14,618,557.64; the receivable accounts remained dormant in the books for more than ten
(10) years and have not been acted upon to facilitate the proper write-off thereof, resulting
in the overstatement of agency assets totaling ₱722,037.00; and some of the required
disclosures of the Loans Payable-Domestic Account with an outstanding balance of
₱11,990,524.60 were omitted in the Notes to Financial Statement.
In addition to the above exceptions, the Auditor enumerated in his report the
following significant observations, viz:
1. The issuance of the goods to end-users were not controlled due to non-preparation
of Reports of Supplies and Materials Issued (RSMIs) and Requisition and Issue
Slips (RIS).
contractors.
additional Hazard Pay amounting to P141,260.00 was released despite the absence
of appropriation ordinace for augmentations and authorizing its payment; b)
payment of Hazard Pay was not supported with necessary supporting documentary
requirements; and c) payment of Hazard Pay for the period March 17-31, 2020
despite the absence of Enhanced Community Quarantine (ECQ) from IATF.
4. Various deficiencies were noted in the LGU’s compliance with the documentary
and reporting requirements of the pay-outs of SAP funds, thus casting doubt on the
and Municipalities (BGCM) in Calendar Year (CY) 2020, such as: (a) non-creation
of Special Account in the General Fund through an appropriation ordinance or
through inclusion in the appropriation ordinance authorizing supplemental budget;
(b) deficiencies on the disbursements; (c) non-preparation of Monthly Fund
Utilization Report and Status of Implementation of Programs, Projects and
Activities (PPAs) and non-posting of the same in LGU premises, thus, the propriety
of some disbursements are doubtful, and d) the adopted mode of procurement and
status of implementation were not properly monitored.
(QRF) of the Local Disaster Risk Reduction and Management Fund (LDRRMF),
which were not related to relief and recovery operations.
8. The LGU charged expenses totaling ₱1,473,644.84 to the lump-sum appropriation

under 20% Development Fund (DF) described in a generic term as “Other COVID-
19 related response” despite the absence of authorization from the Sangguniang
Bayan (SB). Likewise, expenditures amounting to ₱85,000.00 were not among the
allowable expenditures to be charged against the 20% DF;
9. The OIC-Municipal Treasurers did not prepare and submit the monthly
Consolidated Report of Accountability for Accountable Forms (CRAAF).
Likewise, the Revenue Collection Clerks (RCCs) were not required to prepare and
submit the individual monthly Report of Accountability for Accountable Forms
(RAAF); thus, resulted in difficulty in the complete and proper monitoring and
accounting of accountable forms.
10. The LGU granted one employee to monetize almost all his vacation leave, five
employees to monetize more than the maximum 30 days, and five employees to
monetize less than the minimum of ten days in a given year.
The details of the foregoing audit observations are discussed in Part II of the
attached report.
In our transmittal of even date, we requested the LCE to act on the

recommendations contained in the report and to inform this Commission through our
Auditor of the action(s) thereon within sixty days from receipt hereof.
EXECUTIVE SUMMARY
Introduction
The Municipality of San Jorge (LGU) is a 4th class municipality in the 1st district of
the Province of Samar with forty-one (41) barangays.
An audit was conducted on the accounts of the LGU, covering the period January 1
to December 31, 2020. The audit was made to ascertain the propriety of financial
transactions, the accuracy of financial records and reports, as well as compliance of the
agency with prescribed rules and regulations. Likewise, the audit was conducted in
accordance with the International Standards of Supreme Audit Institutions (ISSAIs).
The audit included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, verification of financial accounts as well as
evaluating the overall financial statement presentation. It also involves an interview with
concerned officials/employees and other audit procedures and techniques considered
necessary under the circumstances.
Financial Highlights
The municipality’s total assets, liabilities, equity, income, and expenses for the
current and previous year are as follows:
Increase/(Decrease)
Particulars CY 2020 CY 2019 Amount Percent
Assets ₱ 245,758,955.56 ₱ 205,989,719.16 ₱ 39,769,236.40 19.31%
Liabilities 76,426,207.16 45,362,761.53 31,063,445.63 68.48%
Equity 169,332,748.40 160,626,957.63 8,705,790.77 5.42%
Income 137,374,853.39 104,509,843.67 32,865,009.72 31.45%
Expenses 131,103,771.26 86,761,099.99 44,342,671.27 51.11%
Its appropriation, allotment, and obligation for the Calendar Year 2020 as compared
with CY 2019, including the funds received from the national government agencies and
other LGUs were as follows:
Increase/(Decrease)
Particulars CY 2020 CY 2019
Amount Percent
Appropriations, Allotments, Obligation
Appropriations ₱ 148,327,399.86 ₱ 123,473,525.78 ₱ 24,853,874.08 20.13%
Allotments 148,327,399.86 123,473,525.78 24,853,874.08 20.13%
Obligations ₱ 131,165,573.82 ₱ 97,267,527.99 ₱ 33,898,045.83 34.85%
Increase/(Decrease)
Particulars CY 2020 CY 2019
Amount Percent
Funds Received from Other Agencies
NGAs ₱ 38,183,250.00 ₱ 9,799,000.00 ₱22,350,000.00 231.75%
LGUs 1,016,230.19 1,191,753.42 175,523.23 14.73%
Funds Transferred to Other Agencies
NGAs 0.00 0.00 0.00 0.00%
LGUs ₱ 0.00 ₱ 0.00 ₱ 0.00 0.00%
Expenditure
Expenditures incurred out of current appropriation amounted to ₱147,631,459.95

while those of last year amounted to ₱101,409,473.95, showing an increase of
₱101,409,473.95 or 45.48% as follows:
Increase (Decrease)
Allotment Class CY 2020 CY 2019
Amount Percent
Personnel Services ₱52,909,114.22 ₱50,661,804.92 ₱ 2,247,309.30 4.44%
Maintenance &
Other Operating 61,457,732.08 33,811,452.54 27,646,279.54 81.77%
Expenses
Capital Outlay 32,412,381.39 15,881,711.59 16,530,669.80 104.08%
Financial Expenses 852,232.26 1,054,504.90 (202,272.64) -19.18%
TOTAL ₱147,631,459.95 ₱101,409,473.95 ₱46,221,986.00 45.48%
Independent Auditor’s Report on the Financial Statements
The Auditor rendered a qualified opinion on the fairness of presentation of the

LGU’s financial statements for Calendar Year (CY) 2020 because of the following: (1)
procured goods for distribution in the General Fund and in the Trust Fund amounting to
₱17,089,967.50 and ₱3,451,955.00, respectively, were recorded as outright expenses under
Food Supplies Expense account, instead of Welfare Goods for Distribution; (2)
overstatement of Advances to Contractors account and understatement of Construction in
Progress – Infrastructure Assets account by ₱2,777,215.40 due to non-recording of
recouped advances to contractors for on-going infrastructure projects; and (3) erroneous
recording of COVID-19 Hazard Pay for CY 2020 amounting to ₱954,030.00 as Other
MOOE instead of Hazard Pay under Personnel Services (PS), thus, affecting the fair
presentation of the financial statements.
Also, as discussed in Part III of this report, the Municipality did not provide
allowance for depreciation for depreciable assets totaling ₱139,587,999.78 during
Calendar Year (CY) 2020, thus understating the related Expense and Accumulated
Depreciation accounts, as well as overstating the Property, Plant and Equipment and
Government Equity accounts; the non-compliance with accounting and reporting
requirements rendered the balance of Local Road Networks account at year-end totaling
₱24,401,985.60 doubtful; the balances of reciprocal accounts, Due from Other Funds and
Due to Other Funds under the General Fund and Trust Fund at year-end totaling
₱16,220,000.00 and ₱1,601,442.36, respectively, resulted in unreconciled difference of
₱14,618,557.64; the receivable accounts remained dormant in the books for more than ten
(10) years and have not been acted upon to facilitate the proper write-off thereof, resulting
in the overstatement of agency assets totaling ₱722,037.00; and some of the required
disclosures of the Loans Payable-Domestic Account with an outstanding balance of
₱11,990,524.60 were omitted in the Notes to Financial Statement.
Summary of Significant Observations and Recommendations –
In addition to the exceptions cited, the significant observations and corresponding

recommendations were as follows:
1. The issuance of the goods to end-users were not controlled due to non-preparation
of Reports of Supplies and Materials Issued (RSMIs) and Requisition and Issue
Slips (RIS).
We recommended that the Local Chief Executive (LCE) require:
a. the Municipal Budget Officer/Property and Supply Custodian-Designate

to (a) oblige the requesting personnel to prepare the RIS for every
withdrawal of goods procured in bulk, and (b) prepare and submit the
required RSMI to the MA-Designate together with the RIS, for recording
purposes.
contractors.
We recommended that the LCE direct the:
a. Municipal Accountant (MA)-Designate to impose 10% Retention Money

for every progress payment of work accomplished by the contractors up
to 50%, and for projects not satisfactorily done and not on schedule after
fifty percent (50%) completion.
b. Municipal Engineer to evaluate the ongoing projects totaling

₱30,535,050.75 if the work was not satisfactorily done and not on
schedule and submit a report to MA for possible imposition of the ten
percent (10%) retention.
additional Hazard Pay amounting to P141,260.00 was released despite the absence
of appropriation ordinace for augmentations and authorizing its payment; b)
payment of Hazard Pay was not supported with necessary supporting documentary
requirements; and c) payment of Hazard Pay for the period March 17-31, 2020
despite the absence of Enhanced Community Quarantine (ECQ) from IATF.
We recommended that the LGU:
a. submit the Appropriation Ordinance with the Supplemental Budget and

the supporting documents for the payment of Hazard Pay under
Personnel Services amounting to ₱954,030.00 and for the additional
COVID-19 hazard pay amounting to ₱141,260.00;
b. require the MA-Designate to submit the lacking supporting documents

for the payment of COVID-19 Hazard Pay amounting to ₱1,591,260.00;
and
c. require the concerned regular, plantilla casual and job order employees
to refund the amount claimed for the period March 17 to 31, 2020.
This observation is without prejudice to the issuance of Notices of

Suspension/Disallowance, if warranted.
4. Various deficiencies were noted in the LGU’s compliance with the documentary
and reporting requirements of the pay-outs of SAP funds, thus casting doubt on the
We recommended that the LCE direct the MSWDO to require the submission
of the enumerated lacking documentary requirements, and ensure that the list
of beneficiaries is posted in conspicuous places as stated in the DSWD
Memorandum Circular No. 14, series of 2020.
and Municipalities (BGCM) in Calendar Year (CY) 2020, such as: (a) non-creation
of Special Account in the General Fund through an appropriation ordinance or
through inclusion in the appropriation ordinance authorizing supplemental budget;
(b) deficiencies on the disbursements; (c) non-preparation of Monthly Fund
Utilization Report and Status of Implementation of Programs, Projects and
Activities (PPAs) and non-posting of the same in LGU premises, thus, the propriety
of some disbursements are doubtful, and d) the adopted mode of procurement and
status of implementation were not properly monitored.
We recommended that the LCE:
a. monitor compliance of the LGU of all of the guidelines issued by the

National Government pertaining to the grant and utilization of funds
received by the LGU.
b. require the Municipal Accountant – Designate to submit immediately the

certification for 2 farmer suppliers that they are bonafide farmers and
are in the Registry System for Basic Sectors in Agriculture (RSBSA); and
submit valid justification as to why tax was not withheld for the
procurement of 500 kilograms of dried fish amounting to P51,800.00, the
Official receipt attached to the payment of medical supplies amounting
to ₱215,450.00 were not properly accomplished, and procurement of
drinking water for consumption in the COVID facilities were made
through reimbursements instead of direct payment to suppliers and were
not supported with Requisition Issue Slip.
c. require immediately the posting of Status of Implementation of

Programs, Projects and Activities implemented using the Bayanihan
Grant in LGU premises as provided in Local Budget Circular No. 125.
We recommended that the LCE require the BAC Secretariat to post all the
procurement transactions in CY 2020 totaling ₱30,923,940.54 undertaken
through Emergency Procurement in the GPPB Online Portal as required
under GPPB Circular No. 01-2020 dated April 6, 2020.
(QRF) of the Local Disaster Risk Reduction and Management Fund (LDRRMF),
which were not related to relief and recovery operations.
We recommended that LCE ensure that the utilization of the 30% QRF is
limited to expenses related to the relief and recovery efforts of the LGU during
times of disaster and calamities pursuant to COA Circular 2012-002 dated
September 12, 2012, and NDRRMC, DBM, and DILG JMC No. 2013-001
dated March 25, 2013.
8. The LGU charged expenses totaling ₱1,473,644.84 to the lump-sum appropriation

under 20% Development Fund (DF) described in a generic term as “Other COVID-
19 related response” despite the absence of authorization from the Sangguniang
Bayan (SB). Likewise, expenditures amounting to ₱85,000.00 were not among the
allowable expenditures to be charged against the 20% DF;
We recommended that the LGU submit immediately the required authority

from the SB for the expenditures totaling ₱1,473,644.84 charged to “Other
COVID-19 related expenses” under the 20% DF.
We recommended that the SB ensure that prior to the adoption of

supplemental budget involving the 20% DF, updated/supplemental AIPs
should contain the specific PPAs and not lumped, to set a clear disbursement
limit and to avoid delay in the implementation and possible questions on the
sufficiency of authorization of the Sanggunian to use the supplemental
appropriation for unspecified PPAs.
We also recommended that Management refrain from charging expenditures

not in accordance with the issued policy guidelines under the 20% DF and
ensure that the fund be optimally utilized for the welfare and benefit of the
constituents.
9. The OIC-Municipal Treasurers did not prepare and submit the monthly
Consolidated Report of Accountability for Accountable Forms (CRAAF).
Likewise, the Revenue Collection Clerks (RCCs) were not required to prepare and
submit the individual monthly Report of Accountability for Accountable Forms
(RAAF); thus, resulted in difficulty in the complete and proper monitoring and
accounting of accountable forms.
We recommended that the LCE require:
a. The OIC-MT to prepare and submit Consolidated Report of

Accountability for Accountable Forms (CRAAF) for accountable forms
with money value and without money value, regularly and on time; and
the RCCs to prepare and submit to OIC-MT their individual monthly
RAAF.
b. The MA-Designate to closely monitor the submission by the OIC-MT of

the report of collection and deposits with the CRAAF to facilitate the
required monthly reconciliation of accounting records with the treasury
records.
10. The LGU granted one employee to monetize almost all his vacation leave, five
employees to monetize more than the maximum 30 days, and five employees to
monetize less than the minimum of ten days in a given year.
We recommended that the Management should strictly adhere to Section 22,

Rule XVI of the Omnibus Rules Implementing Book V of Executive Order No.
292, also known as the Omnibus Rules on Leave on the grant of monetization
of leave credits.
Summary of Audit Suspensions, Disallowances and Charges (SASDC)
The total audit suspensions, disallowances and charges found in the audit of various
transactions of the Municipality as of December 31,2020 was ₱4,158,928.63 based on the
Notice of Suspension (NS), Notice of Disallowance (ND), and Notice of Charge (NC)
issued by this Commission.
Status of Implementation of Prior Years’ Unimplemented Audit Recommendations
Of the fifty-six (56) audit recommendations contained in the 2019 Annual Audit
Report, fifteen (15) were implemented and forty-one (41) were not implemented.
TABLE OF CONTENTS
Page No.
Part I - Financial Statements
Independent Auditor’s Report 1
Statement of Management Responsibility for the Financial 3
Statements
Combined Statement of Financial Position 4
Combined Statement of Changes in Net Asset/Equity 5
Combined Statement of Financial Performance 6
Combined Statement of Cash Flows 7
Statement of Comparison of Budget and Actual Amounts 8
Notes to Combined Financial Statements 11
Part II - Detailed Audit Observations and Recommendations 28
Part III - Status of Implementation of Prior Years’ Unimplemented Audit 71

Recommendations
Part IV - Appendices 86
PART I
AUDITED FINANCIAL STATEMENTS

Republic of the Philippines
COMMISSION ON AUDIT
Regional Office No. VIII
LGS E - Samar Province
OFFICE OF THE AUDIT TEAM LEADER
Provincial Satellite Auditing Office
Catbalogan City, Samar
INDEPENDENT AUDITOR’S REPORT
Honorable LEONCIO U. DE GUIA

Mayor
Municipality of San Jorge
Province of Samar
Qualified Opinion
We have audited the financial statements of the Municipality of San Jorge, Province of Samar
which comprise the Statement of Financial Position as at December 31, 2020 and the Statement
of Financial Performance, Statement of Changes in Net Assets/Equity, Statement of Comparison
of Budget and Actual Amounts and Statement of Cash Flows for the year then ended, and a
summary of significant accounting policies.
In our opinion, except for the effects of the matter described in the Bases for Qualified Opinion
section of our report, the accompanying financial statements presents fairly, in all material
respects, the financial position of the Municipality of San Jorge, Province of Samar as of
December 31, 2020 and its financial performance and its cash flows and its comparison of
budget and actual amounts for the year then ended in accordance with International Public Sector
Accounting Standards (IPSASs).
Bases for Qualified Opinion
As discussed in Part II (Audit Observations and Recommendations) of this report, (1) procured
goods for distribution in the General Fund and in the Trust Fund amounting to ₱17,089,967.50
and ₱3,451,955.00, respectively, were recorded as outright expenses under Food Supplies
Expense account, instead of Welfare Goods for Distribution; (2) overstatement of Advances to
Contractors account and understatement of Construction in Progress – Infrastructure Assets
account by ₱2,777,215.40 due to non-recording of recouped advances to contractors for on-
going infrastructure projects; and (3) erroneous recording of COVID-19 Hazard Pay for CY
2020 amounting to ₱954,030.00 as Other MOOE instead of Hazard Pay under Personnel
Services (PS), thus, affecting the fair presentation of the financial statements.
Also, as discussed in Part III of this report, the Municipality did not provide allowance for
depreciation for depreciable assets totaling ₱139,587,999.78 during Calendar Year (CY) 2020,
thus understating the related Expense and Accumulated Depreciation accounts, as well as
overstating the Property, Plant and Equipment and Government Equity accounts; the non-
compliance with accounting and reporting requirements rendered the balance of Local Road
Networks account at year-end totaling ₱24,401,985.60 doubtful; the balances of reciprocal
accounts, Due from Other Funds and Due to Other Funds under the General Fund and Trust
Fund at year-end totaling ₱16,220,000.00 and ₱1,601,442.36, respectively, resulted in
1
2
3
Combined Statement of Financial Position
As at December 31, 2020
(With Comparative Figures for CY 2019)
Note 2020 2019

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 4 38,590,512.74 45,319,662.98
Receivables 5 34,709,847.80 26,560,604.32
Prepayment & Deffered Charges 6 3,606,077.98 -
Inventories 7 2,597,155.00 224,990.00
Total Current Assets 79,503,593.52 72,105,257.30
Non-Current Assets
Receivables 5 213,738.65 213,738.65
Property, Plant & Equipment 8 166,041,623.39 133,670,723.21
Total Non-Current Assets 166,255,362.04 133,884,461.86
TOTAL ASSETS 245,758,955.56 205,989,719.16
LIABILITIES
CURRENT LIABILITIES
Financial Liabilities 9 2,702.06 1,476,120.59
Inter-Agency Payables 9 45,464,699.35 15,922,023.09
Intra-Agency Payables 9 1,704,847.82 1,704,711.90
Trust Liabilities 9 3,007,863.03 3,055,273.99
Deferred Credits/Unearned Income 9 14,209,240.49 7,818,869.75
Other Payable 10 46,329.81 49,044.81
Total Current Liabilities 64,435,682.56 30,026,044.13
Non-Current Liabilities
Loans Payable-Domestic 11 11,990,524.60 15,336,717.40
Total Non-Current Liabilities 11,990,524.60 15,336,717.40
TOTAL LIABILITIES 76,426,207.16 45,362,761.53
NET ASSETS/EQUITY
Government Equity 169,332,748.40 160,626,957.63
Total Liabilities and Net Assets/Equity 245,758,955.56 205,989,719.16
4
Combined Statement of Changes in Net Assets/Equity
2020 2019
Balance at January 1, 2020 160,626,957.63 115,402,136.64
Add (Deduct)
Change in Accounting Policy
Prior Period Errors (665,265.67) (451,992.30)
Restated Balance 159,961,691.96 114,950,144.34
Add (Deduct) Changes in net assets/equity
during the year
Adjustment of net revenue recognized directly in net
assets/equity
Surplus (Deficit) for the period 6,271,082.13 17,748,743.68
Transfer of Property, Plant & Equipment from Trust
Fund 3,099,974.31 27,928,069.61
Total recognized revenue and expenses for the
period 9,371,056.44 45,676,813.29
Balance at December 31, 2020 169,332,748.40 160,626,957.63
5
Combined Statement of Financial Performance
Account Note 2020 2019

REVENUE
Tax Revenue 12 957,941.14 1,105,766.41
Share from Internal Revenue Collection 13 122,666,452.00 100,719,936.00
Service & Business Income Income 14 606,164.67 676,341.96
Share, Grants and Donation 16 40,619.63 124,929.29
Total Revenue 124,271,177.44 102,626,973.66
Less: Current Operating Expenses
Personnel Services 17 52,909,114.22 50,661,804.92
Maintenance & Operating Expenses 18 61,457,732.08 30,025,874.19
Non-cash Expenses 19 11,109,513.54 1,233,337.63
Financial Expenses 20 852,232.26 1,054,089.15
Current Opearting Expenses 126,328,592.10 82,975,105.89
Surplus (Deficit) from Current Operation - 2,057,414.66 19,651,867.77
Add (Deduct)
Transfer, Assistance and Subsidy From 21 13,014,265.95 1,755,720.01
Transfer, Assistance and Subsidy To 22 - 4,775,179.16 - 3,785,994.10
Miscellaneous Income 15 89,410.00 127,150.00
Surplus (Deficit) for the Period 6,271,082.13 17,748,743.68
(See Accompanying Notes to Combined Financial Statement)
6
Combined Statement of Cash Flows
Note 2020 2019

Cash Flow from Oper. Activities
Cash Inflows
Collection from Taxpayers 12 957,941.14 1,105,766.41
Share from Internal Revenue Allotment 13 122,666,452.00 100,719,936.00
Receipts from business/service income 14 606,164.67 676,341.96
Other Receipts - 79,301,918.86 20,376,497.57
Total Cash Inflows 203,532,476.67 122,878,541.94
Cash Outflows
Payments to Suppliers and Creditors 18 61,457,732.08 30,025,784.19
Payments to Employees 17 52,909,114.22 50,661,804.92
Other Expenses - 76,165,145.00 20,514,395.13
Total Cash Outflows 190,531,991.30 101,201,984.24
Net Cash Flows from Operating Activities 13,000,485.37 21,676,557.70
Cash Flows from Investing Activities
Cash Inflows
Proceeds from Sale/Disposal of Prop., Plant and Equip. - -
Total Cash Inflows - -
Cash Outflows
Purchase/Construction of Property, Plant & Equip. 16,383,442.81 11,997,722.01
Total Cash Outflows 16,383,442.81 11,997,722.01
Net Cash Flows from Investing Activities - 16,383,442.81 - 11,997,722.01
Cash Flows from Financing Activities
Cash Inflows
Proceeds from Issuance of Bonds - -
Proceeds from Loans - -
Total Cash Inflows - -
Cash Outflows
Payment of Long-Term Liabilities - -
Payment of Loan Amortization 3,346,192.80 -
Total Cash Outflows 3,346,192.80 -
Net Cash Flows from Financing Activities - 3,346,192.80 -
Total Cash Provided by Operating, Investing - -
and Financing Activities - 6,729,150.24 9,678,835.69
Add: Cash at the Biggining of the Year 45,319,662.98 35,640,827.29
Cash Balance at the End of the Period 38,590,512.74 45,319,662.98
(See Accompanying Notes to Combined Financial Statement)
7
Municipality of San Jorge, Samar
Statement of Comparison of Budget and Actual Amounts
For the Year Ended December 31, 2020
Budgeted Amounts Difference Original Difference Final
Particulars Notes Actual Amounts
Original Final and Final Budget Budget and Actual
Revenue
A. Local Sources
1. Tax Revenue
a. Tax Revenue- Property 312,785.00 149,961.58 (162,823.42) 149,961.58 -
b. Tax Revenue- Individual 199,650.00 161,398.55 (38,251.45) 161,398.55 -
c. Tax Revenue – Goods and Services 425,920.00 459,129.00 33,209.00 459,129.00 -
d. Other Local Taxes - 72,240.00 72,240.00 72,240.00 -
Total Tax Revenue 938,355.00 842,729.13 - 95,625.87 842,729.13 -
2. Non-Tax Revenue
a. Service Income 370,175.00 368,255.60 (1,919.40) 368,255.60 -
b. Business Income 141,086.00 162,506.86 21,420.86 162,506.86 -
c. M iscellaneous Income 266,200.00 89,410.00 (176,790.00) 89,410.00 -
c. Other Income and Receipts 40,619.63 40,619.63 40,619.63 -
Total Non-Tax Revenue 777,461.00 660,792.09 - 116,668.91 660,792.09 -
B.External Sources
1. Share from the National Internal Revenue Taxes (IRA) 113,565,541.00 122,666,452.00 9,100,911.00 122,666,452.00 -
2. Share from GOCCs
3. Other Shares from National Tax Collections
a. Share from Ecozone
b. Share from EVAT
c. Share from National Wealth
d. Share from Tobacco Excise Tax
4. Other Receipts
a. Grants and Donations
b. Other Subsidy Income
5. Inter-local T ransfer
6. Capital /Investment Receipts
a. Sale of Capital Assets
b. Sale of Investments
c. Proceeds from Collections of Loans Receivable
C. Receipts from Borrowings
Total Re ve nue s and Re ce ipts 115,281,357.00 124,169,973.22 8,888,616.22 124,169,973.22 -
8
Expe nditure s
Ge ne ral Public Se rvice s
Personnel Services 39,652,559.92 41,474,426.96 (1,821,867.04) 41,396,323.37 78,103.59
Maintenance and Other Operating Expenses 9,234,700.00 8,544,416.96 690,283.04 8,299,140.72 245,276.24
Capital Outlay 1,290,000.00 1,380,000.00 (90,000.00) 1,151,543.90 228,456.10
Education
Personnel Services
Maintenance and Other Operating Expenses
Capital Outlay
He alth, Nutrition and Population C ontrol
Personnel Services 4,101,489.08 3,138,674.64 962,814.44 3,124,268.73 14,405.91
Maintenance and Other Operating Expenses 440,000.00 507,875.00 (67,875.00) 488,248.41 19,626.59
Capital Outlay 50,000.00 115,000.00 (65,000.00) 18,071.00 96,929.00
Labor and Employme nt
Personnel Services
Capital Outlay
Housing and C ommunity De ve lopme nt
Personnel Services
Capital Outlay
Social Se rvice s and Social W e lfare
Personnel Services 1,589,733.56 1,766,838.36 (177,104.80) 1,756,975.23 9,863.13
Maintenance and Other Operating Expenses 195,000.00 154,977.00 40,023.00 152,277.00 2,700.00
Capital Outlay 50,000.00 50,000.00 - 30,895.00 19,105.00
Economic Se rvice s -
Personnel Services 4,278,217.20 4,226,558.31 51,658.89 4,221,301.07 5,257.24
Capital Outlay 100,000.00 220,000.00 (120,000.00) 75,176.15 144,823.85
O the r Purpose s:
Debt Service
Financial Expense
Amortization
LDRRMF
Maintenance and Other Operating Expenses 5,764,067.86 5,414,067.84 350,000.02 3,324,979.00 2,089,088.84
Capital Outlay 350,000.00 (350,000.00) 350,000.00 -
20% Development Fund
Maintenance and Other Operating Expenses 4,230,326.69 (4,230,326.69) 4,230,326.69 -
Capital Outlay 22,713,108.20 10,111,343.02 12,601,765.18 8,603,031.64 1,508,311.38
Share from National Wealth
Capital Outlay
9
Allocation for Senior Citizens and PWD
Capital Outlay 30,000.00 30,000.00 - 30,000.00
Others
Personnel Services 1,856,000.00 (1,856,000.00) 1,855,227.82 772.18
Maintenance and Other Operating Expenses 24,543,481.18 40,168,753.23 (15,625,272.05) 38,425,238.93 1,743,514.30
Capital Outlay 150,000.00 358,980.00 (208,980.00) 134,715.00 224,265.00
Continuing Appropriations (Capital Outlay) -
General Public Services 333,433.10 333,433.10 - 275,058.60 58,374.50
Education - -
Health, Nutrition and Population Control 11,148.00 11,148.00 - 11,148.00 -
Social Services 100,411.00 100,411.00 - - 100,411.00
Economic Services 23,042,534.76 23,042,534.76 12,616,098.31 10,426,436.45
LDRRMF - -
Others 122,635.00 122,635.00 - 16,490.00 106,145.00
Social Services and Social Welfare
Total 138,891,518.86 148,327,399.86 - 9,435,881.00 131,165,573.82 17,161,826.04
Surplus (De ficit) for the pe riod (23,610,161.86) (24,157,426.64) 547,264.78 (6,995,600.60) (26,205,997.79)
10
NOTES TO COMBINED FINANCIAL STATEMENTS
As of December 31, 2020
Note 1 – Profile
The Municipality of San Jorge, Province of Samar was formally inaugurated

as a new municipality on October 10, 1979 together with its set of municipal officials.
Its legal basis was Batas Pambansa Blg. 11, an act creating the Municipality of San
Jorge in the Province of Samar, which was approved on December 6, 1978. It is
composed of forty one (41) barangays and presently classified as a 4th class
municipality.
The LGU is envisioned to be an Agro-Tourism destination of Samar with

progressive and God-loving populace living in a peaceful and healthy environment
government governed by transparent, gender-responsive and dynamic leaders.
Note 2 – Basis of Financial Statement Presentation
The combined financial statements of the LGU have been prepared in

accordance with and comply with the International Public Sector Accounting
Standards (IPSAS). The combined financial statements are presented in pesos, which
is the functional and reporting currency of the LGU and all values are rounded to the
nearest thousand (P000). The accounting policies have been applied starting the year
2015.
Note 3 - Summary of significant accounting policies
3.1 Basis of accounting
The combined financial statements are prepared on an accrual basis in

accordance with the International Public Sector Accounting Standards (IPSAS).
3.2 Revenue recognition
Revenue from non-exchange transactions
Taxes, fees and fines
The LGU recognizes revenues from taxes and fines when the event occurs
and the asset recognition criteria are met. To the extent that there is a related condition
attached that would give rise to a liability to repay the amount, liability is recognized
11
instead of revenue. Other non-exchange revenues are recognized when it is
improbable that the future economic benefit or service potential associated with the
asset will flow to the entity and the fair value of the asset can be measured reliably.
Transfers from other government entities
Revenues from non-exchange transactions with other government entities are

measured at fair value and recognized on obtaining control of the asset (cash, goods,
services and property) if the transfer is free from conditions and it is probable that the
economic benefits or service potential related to the asset will flow to the LGU and
can be measured reliably.
The LGU availed of the 5 – year transitional provision for the recognition of
Tax Revenue - Real Property and Special Education Tax. For the first year, there will
be no change in policy for the recognition of the aforementioned tax revenue.
Revenue from exchange transactions
Rendering of services
The LGU recognizes revenue from rendering of services by reference to the

stage of completion when the outcome of the transaction can be estimated reliably.
The stage of completion is measured by reference to labor hours incurred to date as
a percentage of total estimated labor hours. Where the contract outcome cannot be
measured reliably, revenue is recognized only to the extent that the expenses incurred.
Rental income
Rental income arising from operating leases on investment properties is

accounted for on a straight-line basis over the lease terms and included in revenue.
3.3 Property, Plant and Equipment
All property, plant and equipment are stated at cost less accumulated
depreciation. Cost includes expenditure that is directly attributable to the acquisition
of the items. When significant parts of property, plant and equipment are required to
be replaced at intervals, the LGU recognizes such parts as individual assets with
specific useful lives and depreciates them accordingly. Likewise, when a major
inspection is performed, its cost is recognized in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are satisfied. All other repair
and maintenance costs are recognized in surplus or deficit as incurred. Where an asset
is acquired in a non-exchange transaction for nil or nominal consideration the asset
is initially measured at its fair value.
12
Depreciation on assets is charged on a straight-line basis over the useful life
of the asset.
Depreciation is charged at rates calculated to allocate cost or valuation of the

asset less any estimated residual value over its remaining useful life (refer to COA
issuances on the prescribed useful life of assets).
Public Infrastructures were not previously recognized in the books. The LGU
availed of the 5-year transitional provision for the recognition of the Public
Infrastructure. For the first year of implementation of the IPSAS, the LGU will not
recognize the Public Infrastructure in the books of accounts.
3.4 Financial Instruments
Financial Liabilities
Initial recognition and measurement
Financial liabilities within the scope of IPSAS 29 are classified as financial

liabilities at fair value through surplus or deficit or loans and borrowings, as
appropriate. The LGU determines the classification of its financial liabilities at initial
recognition.
All financial liabilities are recognized initially at fair value and, in the case of
loans and borrowings.
The LGU Group’s financial liabilities include trade and other payables, bank
overdrafts, loans and borrowings.
Subsequent measurement
The measurement of financial liabilities depends on their classification.
Financial liabilities at fair value through surplus or deficit
Financial liabilities at fair value through surplus or deficit include financial

liabilities held for trading and financial liabilities designated upon initial recognition
as at fair value through surplus or deficit.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are

subsequently measured at amortized cost using the effective interest method. Gains
and losses are recognized in surplus or deficit when the liabilities are derecognized
as well as through the effective interest method amortization process.
13
Amortized cost is calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part of the effective interest rate.
Derecognition
A financial liability is derecognized when the obligation under the liability is

discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same

lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a derecognition
of the original liability and the recognition of a new liability.
3.5 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and cash at bank, deposits
on call and highly liquid investments with an original maturity of three months or
less, which are readily convertible to known amounts of cash and are subject to
insignificant risk of changes in value. For the purpose of the combined statement of
cash flows, cash and cash equivalents consist of cash and short-term deposits as
defined above, net of outstanding bank overdrafts.
3.6 Inventories
Inventory is measured at cost upon initial recognition. To the extent that

inventory was received through non-exchange transactions (for no cost or for a
nominal cost), the cost of the inventory is its fair value at the date of acquisition.
Inventories are recognized as an expense when deployed for utilization or

consumption in the ordinary course of operations of the LGU.
3.7 Changes in accounting policies and estimates
The LGU recognizes the effects of changes in accounting policy

retrospectively. The effects of changes in accounting policy are applied prospectively
if retrospective application is impractical.
The LGU recognizes the effects of changes in accounting estimates

prospectively by including in surplus or deficit.
3.8 Related Party Disclosures
The LGU regards a related party as a person or an entity with the ability to
exert control individually or jointly, or to exercise significant influence over the LGU,
14
or vice versa. Members of key management are regarded as related parties and
comprise the Governor, Mayors, Vice-Governors and Vice-Mayors, Sanggunian
Members, Committee Officials and Members, Accountants, Treasurers, Budget
Officers, General Services and all Chiefs of Departments/Divisions.
3.9 Budget Information
The annual budget is prepared on the modified cash basis, that is, all planned
costs and income are presented in a single statement to determine the needs of the
LGU. As a result of the adoption of the modified cash basis for budgeting purposes,
there are basis, timing or entity differences that would require reconciliation between
the actual comparable amounts and the amounts presented as a separate additional
financial statement in the statement of comparison of budget and actual amounts.
Explanatory comments are provided in the notes to the annual financial statements;
first, the reasons for overall growth or decline in the budget are stated, followed by
details of overspending or under-spending on line items.
3.10 Significant judgments and sources of estimation uncertainty
Judgments
In the process of applying the LGU’s accounting policies, management has

made judgments, which have the most significant effect on the amounts recognized
in the combined financial statements.
Operating lease commitments – LGU as lessor
The LGU has entered into property leases of certain of its properties. The
LGU has determined, based on an evaluation of the terms and conditions of the
arrangements, (such as the lease term not constituting a substantial portion of the
economic life of the commercial property) that it retains all the significant risks and
rewards of ownership of the properties and accounts for the contracts as operating
leases.
Estimates and assumptions
The key assumptions concerning the future and other key sources of
estimation uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below.
The LGU based its assumptions and estimates on parameters available when
the combined financial statements were prepared. However, existing circumstances
and assumptions about future developments may change due to market changes or
15
circumstances arising beyond the control of the LGU. Such changes are reflected in
the assumptions when they occur.
Useful lives and residual values
The useful lives and residual values of assets are assessed using the following
indicators to inform potential future use and value from disposal:
a. The condition of the asset based on the assessment of experts employed
by the LGU;
b. The nature of the asset, its susceptibility and adaptability to changes in
technology and processes;
c. The nature of the processes in which the asset is deployed; and
d. Changes in the market in relation to the asset
Note 4 - Cash and Cash Equivalents
General Fund 2020 2019

Cash In Bank-LCCA-DBP ₱ 28,550,125.62 ₱ 31,625,383.78
Sub Total ₱ 31,625.383.78 ₱ 31,625.383.78
Special Education Fund
Cash-Local Treasury ₱ - ₱ -
Cash In Bank-LCCA-DBP 800,708.79 726,001.45
Sub-Total ₱ 726,001.45 ₱ 726,001.45
Trust Fund
Cash In Bank-LCCA-DBP (Trust Proper) ₱ 5,712,565.63 ₱ 6,525,339.08
Cash In Bank-LCCA-DBP (Special Trust Fund) 2,165,102.94 2,311,089.91
Cash In Bank-LCCA-DBP (NGP) 31,665.00 31,665.00
Cash In Bank-LCCA-DBP (ARCP 2) 508,450.20 508,450.20
Cash In Bank-LCCA-DBP (ARCP2 Loan
- 2,339.14
Proceeds)
Cash In Bank-LCCA-DBP (ARCP2 PBGS) 351,552.00 351,552.00
Cash In Bank-LCCA-LBP (GPBP) 297,652.50 3,298,252.50
Cash In Bank-LCCA-LBP (KALAHI) 153,070.48 153,070.48
Cash In Bank-LCCA-LBP (BUB-DA
LIVELIHOOD PROJECT) 9,483.33 76,519.44
Cash In Bank-LCCA-LBP (PhilHealth) 10,000.00 10,000.00
Sub-Total ₱ 9,239,678.33 ₱ 13,268,277.75
TOTAL ₱ 38,590,512.74 ₱ 45,319,662.98
Note 5 - Receivables
The compositions of Current Receivables are as follows:
16
Real Property Tax Receivable ₱ 7,110,386.60 ₱ 3,915,201.23
Due from NGAS 87,636.43 87,636.43
Due from Other Funds 16,220,000.00 16,220,000.00
Advances for Officers and Employees 1,819,223.70 835,641.45
Advances for Payroll 34,740.49 200.00
Advances to Special Disbursing Officer 1,750,000.00 1,500,000.00
Sub –Total ₱ 27,021,987.22 ₱ 20,560,362.28
Special Education Tax Receivable ₱ 7,098,853.89 ₱ 3,903,668.52
Due from LGU 3,990.22 3,990.22
Sub –Total ₱ 7,102,844.11 ₱ 3,907,658.74
Trust Fund
Advances for Payroll ₱ 580,750.00 ₱ 90,000.00
Advances to Special Disbursing Officer 4,266.47 4,266.47
Sub-Total ₱ 585,016.47 ₱ 94,266.47
TOTAL ₱ 34,709,847.80 ₱ 26,560,604.32
The compositions of Non-Current Receivables are as follows:

Other Receivables ₱ 121,738.65 ₱ 121,738.65
Trust Fund
Other Receivables 92,000.00 92,000.00
TOTAL ₱ 213,738.65 ₱ 213,738.65
Note 6- Prepayment & Deferred Charges

Advances to Contractors ₱ 3,606,077.98 ₱ 0.00
TOTAL ₱ 3,606,077.98 ₱ 0.00
Note 7- Inventory

Drugs & Medicines Inventory ₱ 2,597,155.00 ₱ 224,990.00
TOTAL ₱ 2,597,155.00 ₱ 224,990.00
Note 8- Property, Plant and Equipment
The composition of Property, Plant & Equipment are as follows:

17
Land ₱ 2,383,928.80 ₱ 2,383,928.80
Other Land Improvements 313,232.85 313,232.85
Less: Accumulated Depreciation-Other land
(37,217.60) (37,217.60)
Improvements
Net Book Value 276,015.25 276,015.25
Road Networks 24,401,985.60 22,892,907.39
Flood Control Systems 498,752.70 498,752.70
Water Supply Systems 25,333,497.79 20,737,104.70
Power Supply Systems 15,563,100.00 5,751,900.00
Other Infrastructure Assets 1,416,090.87 1,416,090.87
Buildings 31,333,975.81 28,840,019.56
Less: Accumulated Depreciation-Buildings (320,000.00) (320,000.00)
Net Book Value 31,013,975.81 28,520,019.56
School Buildings 1,250,000.00 1,250,000.00
Less: Accumulated Depreciation ¤(1,250,000.00) (1,250,000.00)
Net Book Value - -
Other Structures 7,891,286.05 5,894,733.38
Less: Accumulated Depreciation (1,625,083.85) (1,625,083.85)
Net Book Value 6,266,202.20 4,269,649.53
Machinery 250,000.00 250,000.00
Office Equipment 4,259,843.17 3,662,763.67
Net Book Value 2,117,498.79 1,867,540.57
Agricultural & Forestry Equipment 1,764,450.00 1,716,450.00
Communication Equipment 2,677,002.75 2,307,904.75
Net Book Value 883,418.75 614,922.25
Disaster Response & Rescue Equipment 862,194.50 512,194.50
Furniture & Fixtures 2,700,808.79 2,117,915.59
Less: Accumulated Depreciation ¤ (334,946.06) (303,733.02)
Net Book Value 2,365,862.53 1,814,182.57
ICT Equipment 5,145,159.46 4,853,371.76
Net Book Value 2,213,713.52 2,147,308.87
Construction & Heavy Equipment 23,423,350.00 23,423,350.00
Less: Accumulated Depreciation 9,806,046.53 0.00
Net Book Value 13,617,303.47 23,423,350.00
Other Machineries & Equipment 5,643,921.11 5,643,921.11
Less: Accumulated Depreciation (422,448.11) (422,448.11)
Net Book Value 5,211,473.00 5,211,473.00
Motor Vehicle 4,268,716.28 4,268,716.28
18
Net Book Value - 599,148.14
Books 38,000.00 38,000.00
Less: Accumulated Depreciation (38,000.00) (38,000.00)
Net Book Value - -
Other Property, Plant & Equipment 651,388.00 651,388.00
Const. In Progress-Infrastructure Assets 781,541.62 140,212.82
Const. In Progress-Bldg. & Other Structures 2,259,928.26 1,401,274.08
TOTAL ₱ 140,142,321.46 ₱ 127,105,813.60
School Buildings ₱ 144,074.50 ₱ 144,074.50
Other Structures 49,000.00 49,000.00
Furnitures and Fixtures 9,800.00 9,800.00
Other Property Plant & Equipment 37,900.00 37,900.00
Sub-Total ₱ 240,774.50 ₱ 240,774.50
Trust Fund
Const. In Progress- Infrastructure Assets 23,555,869.40 4,221,477.08
Const. In Progress- Bldg. & Other Structures 2,102,658.03 2,102,658.03
Sub-Total ₱ 25,658,527.43 ₱ 6,324,135.11
TOTAL ₱ 166,041,623.39 ₱ 133,670,723.21
Property, Plant and Equipment were presented in the Statement of Financial

Position, net of Accumulated Depreciation.
Note 9 – Liabilities
Financial Liabilities
Accounts Payable ₱ - ₱ 1,473,418.53
Due to Officers and Employees 2,702.06 2,702.06
TOTAL ₱ 2,702.06 ₱ 1,476,120.59
Inter-Agency Payable
Due to BIR ₱ 33,184.32 ₱ 17,554.94
Due to GSIS 22,313.84 2,893.37
Due to PagIBIG 1,600.10 1,300.00
Due to PhilHealth 929.92 459.50
Due to NGAS 10,224,213.64 224,213.64
Due to LGUs 660,313.25 635,441.29
Sub-Total ₱ 10,942,555.07 ₱ 881,862.74
19
Due to BIR ₱ 19,722.56 ₱ 19,722.56
Due to LGUs 53,268.07 21,180.06
Sub-Total ₱ 72,990.63 ₱ 40,902.62
Trust Fund 2020 2019
Due to BIR ₱ 185,554.57 ₱ 112,004.19
Due to Other NGAS 33,955,496.26 14,700,023.53
Due to LGUs 308,102.82 187,230.01
Sub-Total ₱ 34,449,153.65 ₱ 14,999,257.73
TOTAL ₱ 45,464,699.35 ₱ 15.922.023.09
Intra-Agency Payable
Due to Other Funds ₱ 1,601,442.36 ₱ 1,601,442.36
Due to Other Funds- KALAHI 103,269.54 103,269.54
Total ₱ 1,704,711.90 ₱ 1,704,711.90
Trust Liabilities
Trust Liability- Others ₱ 745,239.84 ₱ 745,239.84
Trust Liability- DRMM 2,162,771.19 2,310,034.15
Guaranty/Security/Deposits Payable 99,852.00 0.00
Total ₱ 3,007,863.03 ₱ 3,055,273.99
Deferred Credits/Unearned Income

Deferred Real Property Tax ₱ 7,110,386.60 ₱ 3,915,201.23
Special Fund
Deferred Special Education Tax 7,098,853.89 3,903,668.52
Total ₱ 14,209,240.494 ₱ 7,818,869.75
Note 10 - Other Payables

Other Payables ₱ 24,318.70 ₱ 27,033.70
Other Payables 2,575.40 2,575.40
Trust Fund
Other Payables 19,435.71 19,435.71
Total ₱ 46,329.81 ₱ 49,044.81
Note 11 - Loans Payable-Domestic
20
The compositions of Non-Current Liabilities are as follows:
Loans Payable-Domestic ₱ 23,423,350.00 ₱ 23,423,350.00
Less: Amortization
Principal 2017 1,394,247.00 1,394,247.00
Principal 2018 3,346,192.80 3,346,192.80
Principal 2019 3,346,192.80 3,346,192.80
Principal 2019 3,346,192.80 -
Total 11,990,524.60 15,336,717.40
Note 12 - Tax Revenue

Tax Revenue - National Taxes ₱ - ₱ -
Professional Tax - -
Tax Revenue - Individual and Corporation
Community Tax 161,398.55 201,111.94
Tax Revenue – Property
Real Property Tax- Basic 149,961.58 190,313.31
Tax Revenue - Goods and Services
Business Tax 459,129.00 476,449.50
Tax Revenue – Others
Occupation Fees - -
Other Taxes - -
Sub-Total ₱ 770,489.13 ₱ 867,874.75
Tax Revenue – Property
Special Education Tax ₱ 187,452.01 ₱ 237,891.66
TOTAL ₱ 957,941.14 ₱ 1,105,766.41
Note 13 - Share from Internal Revenue Allotment

Share from Internal Revenue Allotment ₱ 122,666,452.00 ₱ 100,719,936.00
Note 14 - Service and Business Income

Service Income
Permit Fees ₱ 36,636.00 ₱ 30,750.00
Tricycle Operators Permit Fees 109,409.00 79,450.00
21
Other Permits & Licenses 72,240.00 -
Civil Registration Fees 15,325.00 48,479.00
Cattle/Animal Registration Fees 3,970.00 2,730.00
Police Clearance 25,650.00 60,020.00
Secretary's Fees - -
Health Certificate 47,685.00 30,780.00
Other Clearance & Certification 36,425.00 30,750.00
Inspection Fees 21,442.00 18,410.00
Fines & Penalties-Service Income 30,244.60 145,993.20
Other Service Income 41,469.00 21,494.75
Business Income
Garbage Fees 15,750.00 20,140.00
Parking Fees 40,550.00 44,190.00
Receipt from Market Operation 73,500.00 102,310.00
Receipts from Slaughterhouse Operation 3,330.00 2,300.00
Receipts from Cemetery Operation 320.00 1,105.00
Interest Income 29,056.86 33,312.22
Sub-Total ₱ 603,002.46 ₱ 672,004.17
Service Income
Interest Income 675.77 578.79
Sub-Total 675.77 578.79
Trust Fund
Service Income
Interest Income 2,486.44 3,759.00
Sub-Total 2,486.44 3,759.00
TOTAL 606,164.67 676,341.96
Note 15 - Other Non-Operating Income/Loss

Miscellaneous Income ₱ 89,410.00 ₱ 127,150.00
TOTAL ₱ 89,410.00 ₱ 127,150.00
Note 16 - Shares, Grants and Donations

Share from PAGCOR ₱ 40,619.63 ₱ 124,929.29
Note 17 - Personnel Services

22
Salaries & Wages
Salaries & Wages- Regular ₱ 24,944,563.97 ₱ 22,952,952.86
Salaries & Wages- Casual/Contractual 4,776,551.22 4,246,176.90
Other Compensation
Personnel Economic Relief Allowance (PERA) 2,771,419.35 2,663,733.33
Representation Allowance (RA) 1,551,750.00 1,586,250.00
Transportation Allowance (TA) 1,468,874.99 1,473,375.00
Clothing/Uniform Allowance 696,000.00 684,000.00
Subsistence Allowance 90,000.00 90,000.00
Laundry Allowance 10,800.00 10,800.00
Honoraria 36,000.00 305,000.00
Hazard Pay 571,560.80 323,509.08
Overtime & Night Pay 142,991.18 -
Year End Bonus 4,996,110.20 4,518,083.65
Cash Gift 576,250.00 535,500.00
Other Bonuses and Allowances 2,150,000.00 500,000.00
Personnel Benefit Compensation
Retirement & Life Insurance Contributions 3,566,533.93 3,263,935.39
PagIBIG Contributions 139,000.00 133,700.00
PhilHealth Contributions 440,197.66 322,565.37
Employees Compensation Insurance Premiums 127,615.44 121,028.17
Other Personnel Benefits
Terminal Leave Benefits 1,855,227.82 4,194,005.17
Other Personnel Benefits 1,442,649.66 1,599,500.00
Sub-Total ₱ 52,354,096.22 ₱ 49,524,114.92
Trust Fund
Salaries & Wages
Salaries & Wages- Regular ₱ 555,018.00 ₱ 1,137,690.00
Other Compensation
Clothing/Uniform Allowance ₱ - ₱ -
Honoraria - -
Year End Bonus - -
Cash Gift - -
Other Bonuses and Allowances - -
Other Personnel Benefits
Other Personnel Benefits - -
Sub-Total ₱ 555,018.00 ₱ 1,137,690.00
TOTAL ₱ 52,909,114.22 ₱ 50,661,804.92
Note 18 - Maintenance and Other Operating Expenses
23
Traveling Expenses
Traveling Expenses-Local ₱ 1,528,823.12 ₱ 3,228,346.15
Training & Scholarship Expenses
Training Expenses 82,500.00 2,112,661.88
Scholarship Grants/Expenses - 1,500.00
Supplies & Materials Expenses
Office Supplies Expenses 1,178,991.90 595,695.79
Accountable Forms Expenses 49,820.00 44,520.00
Drugs & Medicines Expenses 1,863,038.15 2,561,373.04
Medical, Dental and Laboratory Supplies
172,500.00
Expense
Fuel, Oil & Lubricants Expenses 1,621,720.04 1,115,595.67
Textbooks & Instructional Materials Expenses - 2,970,475.00
Food Supplies Expenses 17,358,526.50 1,446,136.20
Other Supplies and Materials Expenses 191,898.00 -
Utility Expenses
Electricity Expenses 1,150,532.13 1,354,561.95
Communication Expenses
Postage & Courier Service 727.00 1,335.00
Telephone Expenses 857,686.86 904,076.91
Internet Subscription Expenses 133,802.61 65,997.07
Confidential, Intelligence & Extraordinary
Expenses
Confidential Expenses 2,000,000.00 1,500,000.00
Professional Expenses
Other Professional Services 1,856,554.90 1,753,727.38
Other General Services
Other General Services 5,115,393.00 -
Repairs & Maintenance
Repairs & Maintenance-Infrastructure Assets - -
Repairs & Maintenance-Building & Other
458,392.00 3,941,597.68
Structures
Repairs & Maintenance-Machinery &
37,700.00 49,000.00
Equipment
Repairs & Maintenance-Transportation
526,683.12 489,821.51
Equipment
Taxes, Insurance Premiums & Other Fees
Taxes, Duties & Licenses 48,113.01 37,296.15
Fidelity Bond Premiums 130,650.00 153,600.00
Insurance Expense 221,785.59 226,443.70
Other Maintenance & Operating Expenses
Membership Dues & Contri. To Organizations - -
Rent Expenses 94,500.00 56,000.00
24
Printing & Publication Expenses 70,000.00 -
Subscription Expenses - -
Survey Expenses - -
Donations 1,208,650.00 905,808.00
Other Maintenance & Operating Expenses 10,891,501.31 3,739,600.35
Sub-Total ₱ 48,850,489.24 ₱ 29,255,169.43
Special Trust Fund
Other Professional Services 145,000.00 -
Taxes, Duties & Licences 508.45 415.75
Other Maintenance & Operating Expenses ₱ - ₱ 148,500.00
Sub-Total ₱ 145,508.45 ₱ 148,500.00
Trust Fund
Travelling Expenses
Travelling Expenses-Local ₱ - ₱ -
Training & Scholarship Expenses
Training Expenses ₱ - ₱ -
Supplies & Materials Expenses
Office Supplies Expenses 74,882.00 140,637.00
Food Supplies Expenses 3,837,888.99 -
Medical Dental and Laboratory Supplies
405,817.40 194,552.00
Expenses
Agricultural & Marine Supplies Expense - 98,000.00
Other Supplies and Materials Expenses - -
Utility Expenses
Electricity Expenses - -
Communication Expenses
Telephone Expenses - -
Professional Expenses
Other Professional Services - 12,000.00
Repairs and Maintenance
Repairs & Maintenance-Machinery &
- -
Equipment
Taxes, Insurance Premiums & Other Fees
Taxes, Duties & Licenses 6,153.20 5,600.01
Other Maintenance & Operating Expense
Rent Expenses - -
Donation 7,933,500.00 -
Other Maintenance & Operating Expenses 203,492.80 171,000.00
Sub-Total ₱ 12,461,734.39 ₱ 621,789.01
TOTAL ₱ 61,457,732.08 ₱ 33,811,452.54
Note 19 - Non-Cash Expenses

25
Depreciation- Machinery & Equipment ₱ 10,479,152.36 ₱ 537,411.65
Depreciation- Transportation Equipment 599,148.14 675,452.49
Depreciation- Furniture, Fixtures & Books 31,213.04 20,473.49
TOTAL ₱ 11,109,513.54 ₱ 1,233,337.63
Note 20 - Financial Expenses

Interest Expense ₱ 842,032.26 ₱ 1,043,129.15
Other Financial Charges 10,200.00 10,960.00
TOTAL ₱ 852,232.26 ₱ 1,054,504.90
Note 21 - Transfers, Assistance & Subsidy From

Subsidy from National Government ₱ 7,951,859.75 ₱ 531,494.11
Subsidy from Other Funds 5,062,406.20 1,224,225.90
TOTAL ₱ 13,014,265.95 ₱ 1,755,720.01
Note 22 - Transfers, Assistance & Subsidy To

Financial Assistance/Subsidy
Subsidy to LGU - 289,955.00
Subsidies-Other 527,600.00 500,500.00
Transfers
Transfer of Unspent Current Year DRRM Funds 4,247,579.16 1,212,339.10
Transfer for Project Equity Share/LGU
₱ - ₱ 1,783,200.00
Counterpart
TOTAL ₱ 4,775,179,.16 ₱ 3,785,994.10
Note 23 - Reconciliation of Net Cash Flows from Operating Activities to

Surplus/(Deficit)
2020 2019
Surplus/(Deficit) ₱ 6,271,082.13 ₱ 17,748,743.68
Non-cash transactions
Depreciation 11,109,513.54 1,233,337.63
Amortization of Intangible Assets - -
Impairment Loss 899,010.52 388,422.27
26
2020 2019
Increase in payables 1,473,418.53 857,408.53
Decrease in payables - -
(Gains) Losses on Sale of PPE - -
(Gains) Losses on Sale of Investments - -
Increase in current assets (7,398,336.22) (5,432,046.71)
Decrease in current assets - -
Increase in investments due to revaluation - -
Increase in Receivables - -
Decrease in Receivables - -
Prior Years Adjustment 645,796.87 6,880,692.30
Net Cash from Operating Activities ₱ 13,000,485.37 ₱ 21,676,557.70
Note 24 - Local Disaster Risk Reduction and Management Fund (LDRRMF)
The LDRRMF represents the amount set aside by the LGU equivalent to five
percent (5%) of the total appropriations to support its disaster risk management
activities pursuant to Republic Act No. 10121, otherwise known as the "Philippine
Disaster Risk Reduction Management Act of 2010". The amount available and
utilized during the year totalled ₱5,764,067.86 and ₱3,674,979.00, respectively,
broken down as follows:
Particulars Available Amount Utilized Balance

Current Year's Appropriation
Quick Response Fund ₱ 1,729,220.36 ₱ 1,677,939.00 ₱ 51,281.36
Mitigation Fund 4,034,847.50 1,997,040.00 2,037,807.50
Total ₱ 5,764,067.86 ₱ 3,674,979.00 ₱ 2,089,088.86
Continuing Appropriations:
Special Trust Fund
CY 2015 ₱ 566,694.14 ₱ 566,694.14 ₱ -
CY 2016 42,106.92 42,106.92 -
CY 2017 490,605.39 490,605.39 -
CY 2018 1,211,683.46 1,211,683.46 -
CY 2019 2,158,490.30 2,082,033.29 76,457.01
Total ₱ 2,311,089.91 ₱ 4,393,123.20 ₱ 76,457.01
27
PART II
AUDIT OBSERVATIONS AND RECOMMENDATIONS
Financial and Compliance Audit
Erroneous Accounting Entry for the Procurement and Distribution of Relief Goods
1. Procured goods for distribution in the General Fund and in the Trust
Fund amounting to ₱17,089,967.50 and ₱3,451,955.00, respectively, were
recorded as outright expenses under Food Supplies Expense account,
instead of Welfare Goods for Distribution following the perpetual
inventory method, while the issuance of the goods to end-users were not
controlled due to non-preparation of Reports of Supplies and Materials
Issued (RSMIs) and Requisition and Issue Slips (RIS), contrary to
pertinent provisions of Government Accounting Manual (GAM) for
LGUs.
1.1 The GAM for LGUs, Volume III prescribes the description of accounts,
among which:
a. Welfare Goods for Distribution – this account is used to record the cost
of goods for distribution to people affected by
calamities/disasters/ground conflicts such as canned goods, blankets,
mats, kitchen utensils, flashlights and other similar items.
b. Food Supplies Expense - This account is used to record the cost of food
issued to hospital/rehabilitation patients, jail inmates and the like.
c. Welfare Goods Expense - this account is used to record the cost of goods
issued/distributed to people affected by calamities/disasters/ground
conflicts such as canned goods, blankets, mats, kitchen utensils,
flashlights and other similar items. This also includes the cost of food
served to people affected by calamities/disasters/ground conflicts.
1.2 Chapter 6, Volume I of the same Manual provides the guidelines and
accounting treatment of Inventories, viz:
Section 182. Perpetual Inventory Method. Inventory records shall be

maintained using the perpetual inventory system. Under the system, an
agency continually updates its inventory records to account for additions to
and subtractions from inventory. The local accountant shall maintain the
Supplies Ledger Card (SLC) for each inventory item as the perpetual
inventory record.
28
Section 189. Issuances of inventory. Issuances shall be supported with
Requisition and Issue Slip (RIS) which the general services officer shall
summarize monthly in the Report of Supplies and Materials Issued (RSMI).
The RSMI together with the supporting RIS shall be submitted to the local
accountant within five days after the end of the month, and the RSMI shall be
the basis in drawing a JV to record the issuances.
1.3 Our verification and audit of Calendar year (CY) 2020 financial transactions
of the LGU showed that procured goods for distribution amounting to
₱17,089,967.50 under the General Fund and ₱3,451,955.00 under the Trust
Fund, totaling ₱20,541,922.50 were recorded outright as an expense and
without following the perpetual inventory method, that is, Food Supplies
Expense instead of Welfare Goods for Distribution. The details of the
procured goods are shown below:
Table 1. Procured goods for distribution during CY 2020

Check
Date Particulars Gross Amount
No.
GENERAL FUND
20% Economic Development Fund
5/11/2020 66828817 Payment of 1,000 sacks of Commercial rice ₱2,000,000.00
5/19/2020 66828858 Payment of 2,000 sacks of Commercial rice 4,000,000.00
payment of Egg used during COVID-19
5/21/2020 66828859 Response-Relief (645 trays) 122,550.00
Sub-total ₱ 6,122,550.00
Bayanihan Grant to Cities and Municipalities
4/30/2020 66828779 Purchase of 4,840 tray eggs ₱ 919,600.00
5/4/2020 66828781 Rice and Vegetables for relief distribution 2,965,987.50
5/4/2020 66828782 Purchase of 1,380 sacks Commercial Rice 2,691,000.00
Purchase of various commodities for
5/4/2020 66828783 distribution for COVID-19 2,543,200.00
Payment of 500 kgs. Dried Fish for relief due to
5/4/2020 66828785 COVID-19 pandemic 51,800.00
Sub-total ₱ 9,171,587.50
Other MOOE-COVID-19 Response
Payment of various commodities used during
₱ 80,350.00
5/5/2020 66827793 COVID-19 Response
Payment of various commodities used during
5/5/2020 66827794 COVID-19 Response 250,040.00
5/6/2020 66828802 Payment of various commodities 996,900.00
Payment of various expenses used during
6/1/2020 66828881 COVID-19 Response 468,540.00
Payment of various expenses use for relief due
6/4/2020 72293623 to COVID-19 44,280.00
Sub-total ₱ 1,795,830.00
Total under General Fund ₱17,089,967.50
29
Check
Date Particulars Gross Amount
No.
TRUST FUND
Special Trust Fund
3/23/2020 58940008 Purchase of 1,100 sacks of NFA Rice ₱1,375,000.00
4/1/2020 58940013 Purchase of various commodities for COVID 19 998,150.00
4/7/2020 58940020 Purchase of vegetables 10,795.00
Total under Trust Fund ₱ 3,451,955.00
Grand Total ₱20,541,922.50
1.4 The Municipal Accountant-Designate (MA-Designate) explained that the

procured goods were immediately distributed to the beneficiaries; thus, she
immediately recorded it as an outright expense, with the distribution list being
her basis on the issuance of goods.
1.5 We have verified the submitted distribution list for the distribution of relief
goods and noted that the format of the submitted copies was informative;
however, it was not properly accomplished. The data for the following were
not supplied:
a. No. of family
b. No. of Individuals
c. Categories (under 6 y/o, Senior Citizen, PWD, Pregnant Post-Partum)
d. Age
e. Goods Received/Items received
f. Date of receipt
1.6 It is worth emphasizing that the rules on recording procurement of supplies

using perpetual inventory method has not been waived during this pandemic;
thus, purchases, even if immediately issued to the distribution center, need to
be recorded first as inventory then recorded at the appropriate expense
account upon distribution and restored to inventory account if there are
remaining inventory items not issued at the distribution area. Consequently,
the procurement should have been recorded in the Supply Ledger Cards, and
the issuances to end-users should have been supported with RSMIs and RISs.
1.7 The practice of immediately recording supplies and materials purchased as

expenses manifests a lack of control over the inventory items and results in
an overstatement of expenses and understatement of inventory if there are
undistributed relief goods on hand at year-end.
30
1.8 Also, the absence of RSMI, RIS, and a properly accomplished distribution list
hindered the Audit Team from conducting thorough validation of the relief
goods distribution.
1.9 Moreover, the erroneous entries made in recording procured relief goods
resulted in overstatement of the reported Food Supplies Expenses as of year-
end by ₱20,541,922.50 and understatement of Welfare Goods Expenses by
the same amount. Further absence of appropriate control and documentation
for the distribution of relief goods cast doubts as to the correctness of the
reported expenses for the year ended.
1.10 We recommended that the Local Chief Executive (LCE) require:
a. the MA-Designate to reclassify the issued relief goods totaling

₱20,541,922.50 from Food Supplies Expenses to Welfare Goods
Expenses in the CY 2020 Statement of Financial Performance.
Henceforth, record relief goods procured as Welfare Goods for
Distribution and follow the perpetual inventory method of recording
inventories and maintain SLCs.
b. the Municipal Budget Officer/Property and Supply Custodian-

Designate to (a) oblige the requesting personnel to prepare the RIS
for every withdrawal of goods procured in bulk, and (b) prepare and
submit the required RSMI to the MA-Designate together with the
RIS, for recording purposes.
1.11 The MA-Designate commented that she would reclassify the issued relief
goods from Food Supplies Expenses to Welfare Goods Expenses in CY 2020
Financial Statements and follow the perpetual inventory method. Likewise,
the Property and Supply Custodian-designate will oblige the requesting
personnel to the Requisition Slip for every withdrawal of goods procured and
prepare the necessary reports to submit to the Municipal Accountant for
recording purposes.
1.12 The revised financial statements for CY 2020 were not submitted as of the
report date; hence, the noted deficiencies were still included as part of the
audit qualification for the current year’s audit report.
Non-recording of the recouped Advances to Contractors for on-going infrastructure

projects – P2,777,215.40
31
2. The MA-Designate did not record the recouped advances to contractors
totaling ₱2,777,215.40, resulting in an overstatement of Advances to
Contractor and understatement of Construction in Progress –
Infrastructure Assets account by the same amount contrary to the
relevant provisions of Presidential Decree (PD.) No. 144; thus, affecting
the Financial Statements (FS) fair presentation as of December 31, 2020.
Likewise, the LGU did not impose the 10% retention money from
progress payments to contractors, contrary to Annex E of the Republic
Act (RA.) No. 9184.
2.1 Relevant provisions of PD. No. 1445 are as follows:
Section 111. Keeping of accounts.
xxx
The highest standards of honesty, objectivity and consistency shall

be observed in the keeping of accounts to safeguard against
inaccurate or misleading information.
Section 112. Recording of financial transactions. Each government

agency shall record its financial transactions and operations
conformably with generally accepted accounting principles and in
accordance with pertinent laws and regulations.
2.2 The GAM for LGUs provides, among others, the following:
1ASSETS
07 Property, Plant and Equipment
03 Infrastructure Assets
Account Title Construction in Progress – Infrastructure Assets
Account Number 1-07-10-020
Normal Balance Debit
Description This account is used to record the accumulated

cost or other appropriate value of infrastructure
assets which are still in the process of
construction or acquisition. Credit this account for
reclassification to the appropriate Infrastructure
Asset account upon completion.
1ASSETS
05 Prepayments
01 Prepayments
32
Account Title Advances to Contractors
Description This account is used to record amount advanced to

contractors as authorized by law. Credit this
account for recoupment of advances.
2.3 Item 4 and 5, Annex E of Republic Act No. 9184 provides the following
implementation guidelines for the procurement of Infrastructure Projects, wit:
4. ADVANCE PAYMENT
4.1 The procuring entity shall, upon a written request of the contractor
which shall be submitted as a contract document, make an advance
payment to the contractor in an amount not exceeding fifteen
percent (15%) of the total contract price, to be made in lump sum
or, at the most, two installments according to a schedule specified
in the Instructions to Bidders and other relevant Tender Documents.
4.2 Xxx…
4.3 The advance payment shall be repaid by the contractor by

deducting fifteen percent (15%) from his periodic progress
payments a percentage equal to the percentage of the total contract
price used for the advance payment.
4.4 The contractor may reduce his standby letter of credit or guarantee
instrument by the amounts refunded by the Monthly Certificates in
the advance payment.
5. PROGRESS PAYMENT
5.1 Once a month, the contractor may submit a statement of work

accomplished (SWA) or progress billing and corresponding
request for progress payment for work accomplished. The SWA
should show the amounts which the contractor considers itself to
be entitled to up to the end of the month, to cover (a) the
cumulative value of the works it executed to date, based on the
items in the Bill of Quantities, and (b) adjustments made for
approved variation orders executed.
5.2 Xxx
33
5.3 The procuring entity shall deduct the following from the certified
gross amounts to be paid to the contractor as progress payment:
a) Cumulative value of the work previously certified and paid for.

b) Portion of the advance payment to be recouped for the month.
c) Retention money in accordance with the condition of
contract.
d) Amount to cover third party liabilities.
e) Amount to cover uncorrected discovered defects in the works.
6. RETENTION MONEY
6.1 Progress payments are subject to retention of ten percent (10%)

referred to as the "retention money." Such retention shall be based
on the total amount due to the contractor prior to any deduction
and shall be retained from every progress payment until fifty
percent (50%) of the value of works, as determined by the
procuring entity, are completed. If, after fifty percent (50%)
completion, the work is satisfactorily done and on schedule, no
additional retention shall be made; otherwise, the ten percent
(10%) retention shall be imposed.
6.2 Xxx…
2.4 During the year, the LGU implemented 21 infrastructure projects funded
under the 20% Economic Development Fund (EDF) and Local Government
Support Fund-Assistance to Municipalities (LGSF-AM) and completed only
eight infrastructure projects. The other 13 projects were ongoing as of year-
end.
2.5 Our audit of the transactions relevant to these projects disclosed the
following:
a. Overstatement of Advances to Contractor and Understatement of

Construction in Progress – Infrastructure Asset account
The LGU granted an advance payment to contractors totaling

₱6,293,061.58 and recouped ₱5,464,199.00. However, we noted that the
MA-Designate recorded only the recoupment of advances to contractors
for completed projects totaling ₱2,686,983.60 during the year, leaving
the recouped amount for ongoing projects of ₱2,777,215.40 (See
Appendix E) unrecorded.
The failure of the MA-Designate to record the recouped amount for

ongoing projects was due to the erroneous accounting procedures adopted
34
in recording progress payments with recoupment for work accomplished
by the contractors. She records the transactions by debiting Construction
in Progress-Infrastructure Asset net of recoupment of advances to
contractors. And at the end of the year, she prepares an adjusting journal
entry to record the recouped amount only for the completed projects
during the year, leaving the recouped amount for ongoing projects
unrecorded.
The erroneous accounting procedures adopted by the MA-Designate to

record progress payment to contractors with recoupment resulted in
overstatement of Advances to Contractors account by ₱2,777,215.40 and
understatement of Construction in Progress – Infrastructure Assets
account by the same amount.
b. Retention Money of 10% in every progress payment was not imposed on

the contactor
The LGU did not impose Retention Money of 10% from every progress
payment for work accomplished by the contractor; instead, a Retention
Money Bond equivalent to 10% of the contract price was required upon
final billing.
Retention Money is necessary to warrant claims against the contractor for

the unsatisfactory work, liquidated damages in case of delay, uncorrected
discovered defects, and other third-party liabilities. Thus, the LGU
should correct these procedural lapses to satisfy the purpose of the
Retention Money.
2.6 We recommended that the LCE direct the:
a. MA-Designate:
1. to immediately record the recouped advances to the contractors

for ongoing projects totaling ₱2,777,215.40 by debiting
Construction in Progress – Infrastructure Assets and crediting
Advances to Contractors account. Henceforth, immediately
record the recouped advances upon payment of work
accomplished to contractors.
2. to impose 10% Retention Money for every progress payment of

work accomplished by the contractor up to 50%, and for
projects not satisfactorily done and not on schedule after fifty
percent (50%) completion.
35
b. Municipal Engineer to evaluate the ongoing projects totaling
₱30,535,050.75 if the work was not satisfactorily done and not on
schedule and submit a report to MA for possible imposition of the
ten percent (10%) retention.
2.7 The MA-Designate commented that she will prepare the necessary entries to
record the recouped advances upon contractor payment for work completed
in CY 2021. Similarly, the Municipal Engineer assured the Audit Team that
he will regularly supervise, monitor, and evaluate the status of all
LGU infrastructure projects, ensuring that all works are completed
satisfactorily in accordance with the approved program of works, plans, and
specifications. In addition, in the event of delays caused by weather
disruptions, natural disasters, or calamity affecting the project's construction
and transportation, the contractor notifies the LCE via a reasonable request
letter for Time Suspension.
Deficiencies on the grant of COVID-19 Hazard Pay
3. Various deficiencies were noted on the grant of COVID-19 Hazard Pay

for CY 2020, such as (a) the hazard pay granted to regular and casual
employees amounting to ₱954,030.00 were inappropriately charged to
Maintenance and Operating Expenses (MOOE) instead of Personnel
Services (PS) and were recorded in the books of accounts as Other
MOOE instead of Hazard Pay; (b) additional Hazard Pay amounting to
₱141,260.00 was released despite the absence of appropriation ordinance
for augmentation and authorizing its payment; (c) payment of Hazard
Pay was not supported with necessary documentary requirements; and
(d) payment of hazard for the period March 17 to 31, 2020 despite the
absence of Enhance Community Quarantine (ECQ) declaration from
IATF, contrary to pertinent laws, rules and regulations, casting doubt on
the legality, validity, and accuracy of the payment.
3.1 Relevant provisions of existing laws, rules and regulations are as follows:
3.2 Budget Circular No. 2020-1 dated March 24, 2020, prescribes the Guidelines
on the Grant of COVID-19 Hazard Pay, viz;
Item 4.0 Guidelines and Conditions on the Grant of COVID-19 Hazard Pay
Xxx
4.3 The personnel/workers have been authorized to physically

report for work at their respective offices or work stations on
the prescribed official working hours by the head of
36
agency/office during the period of implementation of
Enhanced Community Quarantine measures in the area of
such office or work station. (emphasis supplied)
4.4 The total rate of the COVID-19 Hazard Pay shall be based on
the number of days an employee/worker physically reports for
work during the Enhanced Community Quarantine period
using the formula under Item 4.1 hereof.
Item 7.0 Grant of Hazard Pay in LGU’s
The grant of the COVID-19 Hazard Pay to employees/workers in LGUs,

including those in the barangays, who physically report for work during
the quarantine period, and have adopted similar work arrangements as
provided in Section 2(b) of AO No. 26, shall be determined by their
respective Sanggunian depending on the LGUs financial capability, at
rates not exceeding ₱500/day per person, subject to: (i) the PS limitation
in LGU budgets under Republic Act (RA) No. 7160 in the case of
regular personnel, and available MOOE allotment in the case of
COS/JO workers, and (ii) the conditions set in Item 4.0 hereof,
chargeable against the FY 2020 local government funds. Should an LGU
have insufficient funds to fully cover the COVID-19 Hazard Pay at the
rate of ₱500/day per person, a lower but uniform rate may be granted for
all qualified personnel. (emphasis supplied)
3.3 Administrative Order No. 26 dated March 23, 2020 issued by the President of
the Philippines authorized the grant of hazard pay to government personnel
and workers engaged through Contract of Service (COS) and Job Order (JO)
basis who physically report for work during the implementation of Enhanced
Community Quarantine (ECQ) in their respective workstations in the
amount not exceeding ₱500.00 per day.
3.4 The GAM fo LGUs, Volume III prescribes the description of accounts,
among which :
a. Hazard Pay – this account is used to record the payment to government

officials/employees assigned in difficult/ dangerous/strife-torn/embattled
areas as certified by appropriate government body and to those whose
lives are directly exposed to work conditions which may cause
injury/sickness/death/harmful change in the human being.
b. Other Maintenance and Operating Expenses – this account is used to

record expenses not falling under any of the specific maintenance and
other operating expense accounts
3.5 Section 305 of Republic Act (RA) No. 7160 provides:

37
Section 305. Fundamental Principles. - The financial affairs,
transactions, and operations of local government units shall be
governed by the following fundamental principles:
(a) No money shall be paid out of the local treasury

except in pursuance of an appropriations ordinance or
law;
Xxx
3.6 Section 4(6) of Presidential Decree (PD) No. 1445 povides:
Section 4. Fundamental principles. Financial transactions

and operations of any government agency shall be governed by
the fundamental principles set forth hereunder, to wit:
Xxx
(6) Claims against government funds shall be

supported with complete documentation.
Xxx
3.7 In CY 2020, in order to implement stricter preventive measures to help stop

the transmission and spread or totally eradicate the COVID-19 from the
community, the Provincial Governor of Samar issued Executive Order (EO)
No. 20, series of 2020, placing the entire Province of Samar under Pre-
emptive ECQ from April 1 to15, 2020. On April 13, 2020, the declaration of
ECQ under EO No.20, series of 2020, was extended until April 30, 2020.
3.8 In view of these, the LGU issued Resolution No. 47, Series 2020 on May 7,
2020, authorizing augmentation of funds amounting to ₱1,450,000.00 to
cover incentives and stipend of front liners and skeleton workforce for
COVID-19 or the grant of COVID-19 Hazard Pay. Based on the issued
resolution, the LGU augmented funds from the Maintenance and Other
Operating Expenses (MOOE) of various offices to Other MOOE-Incentives
for the grant of COVID-19 Hazard Pay totaling ₱1,450,000.00. Details are
shown in Table 2:
Table 2. Details of augmentation per Resolution No. 47, Series 2020 dated May 7,
2020
Object of Amount
Office Augmented To
Expenditures Augmented
Senior citizen Other MOOE ₱ 250,000.00 Other MOOE- Incentives
38
Object of Amount
Office Augmented To
Expenditures Augmented
BAC Travelling Expenses 200,000.00 Other MOOE- Incentives
DRRMO Training Expenses 40,000.00 Other MOOE- Incentives
MHO Training Expenses 50,000.00 Other MOOE- Incentives
MPDC Training Expenses 40,000.00 Other MOOE- Incentives
MSWDO Training Expenses ₱ 40,000.00 Other MOOE- Incentives
AGRICULTURE Training Expenses ₱ 40,000.00 Other MOOE- Incentives
ENGINEERING Training Expenses 40,000.00 Other MOOE- Incentives
MCR Training Expenses 40,000.00 Other MOOE- Incentives
MBO Training Expenses 40,000.00 Other MOOE- Incentives
ASSESSOR Training Expenses 40,000.00 Other MOOE- Incentives
ACCOUNTANT Training Expenses 40,000.00 Other MOOE- Incentives
MTO Training Expenses 50,000.00 Other MOOE- Incentives
SB SEC Training Expenses 40,000.00 Other MOOE- Incentives
SB Office Training Expenses 80,000.00 Other MOOE- Incentives
VM OFFICE Training Expenses 50,000.00 Other MOOE- Incentives
MAYORS
OFFICE Training Expenses 120,000.00 Other MOOE- Incentives
GSO Rep & Main Motor 250,000.00 Other MOOE- Incentives
Total ₱1,450,000.00
3.9 Our audit and verification on the grant of hazard pay for CY 2020 by the LGU
disclosed the following:
a. Hazard pay granted to Regular and Casual employees amounting to

P954,030.00 were inappropriately charged to MOOE instead of PS and
were recorded in the books of accounts as Other MOOE instead of
Hazard Pay
Our post-audit of the submitted payrolls for the liquidation of cash

advances charged to the appropriated amount in Table 1 disclosed that
₱954,030.00 pertained to the payment of the COVID-19 hazard pay of
Regular and Casual Employees that should have been charged to
Personnel Services. Our inquiry with the management disclosed that they
only appropriated funds for COVID-19 hazard pay in the MOOE; hence,
all claims for hazard pay were charged to the said fund.
Also, we noted that since it was inappropriately charged to MOOE, the

hazard pays for the Regular and Casual Employees of ₱954,030.00 were
also erroneously recorded as Other Maintenance and Operating Expenses
instead of Hazard Pay. Details of the disbursements are shown in Table
3.
39
Table 3. Detailed Grant of COVID 19- Hazard Pay
Job Order/DOH
Payroll Regular/Casual Total
Period Nurses
No.
No. Amount No. Amount No. Amount
March 17 -
1 13 ₱171,600.00 2 ₱ 26,400.00 15 ₱198,000.00
April 30, 2020
March 17 -
2 14 ₱184,800.00 14 ₱184,800.00
April 30, 2020
March 17 -
3 7 92,400.00 7 92,400.00 14 184,800.00
April 30, 2020
March 17 -
4 3 39,600.00 5 66,000.00 8 105,600.00
April 30, 2020
March 17 -
5 6 79,200.00 6 79,200.00 12 158,400.00
April 30, 2020
March 17 -
6 14 84,800.00 1 13,200.00 15 198,000.00
April 30, 2020
March 17 -
7 13 P171,600.00 3 39,600.00 16 211,200.00
April 30, 2020
March 17 -
8 3 P39,600.00 5 66,000.00 8 105,600.00
April 30, 2020
April 9-30,
9 3 21,780.00 - 3 21,780.00
2020
March 17 -
10 5 21,450.00 7 30,030.00 12 51,480.00
April 30, 2020
March 17 -
11 2 26,400.00 1 13,200.00 3 39,600.00
April 30, 2020
Total 69 848,430.00 51 610,830.00 120 1,459,260.00
1 March 17 - 8 2
05,600.00 26,400.00 10 132,000.00
April 30, 2020
Total Utilization 77 ₱954,030.00 53 ₱637,230.00 130 1,591,260.00
Total Appropriation 1,450,000.00
Excess ₱ 141, 260.00
The hazard pays intended for regular and plantilla casual employees of
the LGU should have been presented under Personnel Services expense
classification during the preparation and approval of the Supplemental
Budget for hazard pay.
b. Additional Hazard Pay amounting to ₱141,260.00 was released despite

the absence of an appropriation ordinance for augmentation and
authorizing its payment
Our review and audit of the utilization of the appropriated amount in

Table 1 disclosed that the LGU paid ₱141,260.00 in excess of the
40
appropriated amount of ₱1,450,000.00 for COVID-19 hazard pay (see
Table 2 for details).
The Municipal Budget officer asserted that the deficiency was caused by
the inability of the Human Resource Management Office to accurately
identify personnel who are in the skeletal workforce, and the additional
fund released was sourced from the Other COVID-19 response fund with
no approved resolution by the Sanggunian authorizing its release for the
specific purpose.
3.10 The LGU did not submit revised financial statements for CY 2020 as of the
report date, despite the prior issuance of an Audit Observation Memorandum
on the matter at hand; hence, the noted deficiency still formed part of this
report.
c. Payments of Hazard Pay were not supported with necessary documentary

requirements
Disbursements totaling ₱1,591,260.00 for COVID-19 Hazard Pay were

merely supported with Payroll. The management should take note that
aside from payroll, the disbursements should be supported with the
following:
1. Authority from the head of agency/office that the personnel have

been authorized to physically report for work at their respective
offices or work stations despite the implementation of the ECQ;
2. Proof that the personnel/workers have physically reported for work

at their respective offices or work stations such as but not limited to:
 Approved Daily Time Record (DTRs)/Certificate of

Service/Certificate of attendance during ECQ period
 Accomplishment Reports
The aforementioned documentary requirements are necessary for

determining each personnel's eligibility for COVID-19 hazard pay and
for determining the accuracy of claims based on their actual attendance.
d. Payment of hazard pay for the period March 17 to March 31, 2020,
despite the absence of ECQ declaration
During our audit of the payrolls submitted for the liquidation of cash
advances for payment of hazard pay, we noted that the claims included
hazard pays for the period March 17 to 31, 2020. However, the Province
of Samar was placed under ECQ through the issuance of EO No. 20 and
41
22, series of 2020, only for April 1 to 30, 2020; hence, the claims for
hazard pay for the period March 17 to 30, 2020 were not valid and
disallowable in the audit.
3.11 We recommended that the LGU:
d. submit the Appropriation Ordinance with the Supplemental Budget

and the supporting documents for the payment of Hazard Pay under
Personnel Services amounting to ₱954,030.00 and for the additional
COVID-19 hazard pay amounting to ₱141,260.00;
e. require the MA-Designate to submit the lacking supporting

documents for the payment of COVID-19 Hazard Pay amounting to
₱1,591,260.00, and to ensure that expenditures are properly
classified into PS, MOOE and CO; and
f. require the concerned regular, plantilla casual and job order

employees to refund the amount claimed for the period March 17 to
31, 2020.
This observation is without prejudice to the issuance of Notices of

Suspension/Disallowance, if warranted.
3.12 The MA-Designate promised to submit the required documents for the
payment of Hazard Pay, and to prepare a journal entry for the reclassification
of payment of hazard pay from MOOE to Hazard Pay account in the CY 2020.
3.13 Also, the management will deduct the excess of Hazard pay gradually from
their salary/wage because of the current situation, which is the COVID-19
pandemic.
Non-compliance with the reporting and recording requirement for SAP distribution
4. Various deficiencies were noted in the LGU’s compliance with the

documentary and reporting requirements, and recording of the pay-outs
of Social Amelioration Program (SAP) funds, in non-adherence with
International Public Standards Accounting Sector (IPSAS) 1, GAM for
LGUs and pertinent Department of Social Welfare and Development
(DSWD) issuances, thus affecting the fair presentation of the financial
statements and casting doubt on the propriety and validity of the
distribution of a portion of the funds.
4.1 The DSWD provided special guidelines on the provisions of social

amelioration measures to the most affected resident of the areas under the
42
community quarantine. Items VII and IX of the DSWD Memorandum
Circular No. 4 Series 2020 states that:
VII. EMERGENCY SUBSIDY PROGRAM THROUGH

DSWD SOCIAL AMELIORATION PRORAMS
1. Documentary Requirements
The beneficiaries shall bring and submit to the

Barangay the original or certified true copies of the
applicable documentary requirements, except for
valid identification cards (IDs), which may be in
photocopy with specimen signature of the
beneficiary. The authenticity of the submitted
requirements shall be certified by the
City/Municipal Social Welfare and Development
Office (C/MSWDO) along with the list of identified
beneficiaries.
For all beneficiaries, a valid ID shall be required.

The beneficiaries may be required to submit a
certificate (Attached as Annex “A”) from the
Barangay that they are in need of assistance, in lieu
of any certification specified in the enumeration.
IX. IMPLEMENTING GUIDELINES ON THE

DISTRIBUTION OF SOCIAL AMELIORATION
MEASURES
xxx
c. Payout by LGUs and Liquidation of Transferred

Funds
All distributions made by the LGUs relative to these

guidelines must be completed within seven (7) days,
and ten (10) days for Geographically Isolated and
Disadvantaged Areas (GIDAs), from the receipt of
funds. During payouts, the LGUs shall ensure the
following:
1. List of Paid Beneficiaries or Payroll signed by

the beneficiaries.
2. Photocopy of the identification card with
specimen signatures of the beneficiaries;
43
3. Photo of the beneficiary during actual receipt of
the assistance/stipend, x x x.
4. Certificate of Payment duly signed by the
authorized official of the LGU concerned.
The SAC shall be updated by the Barangay staff

every time an assistance under government’s social
amelioration program is received by the
beneficiaries.
xxx
4.2 With regard to transparency, the DSWD Memorandum Circular No. 14,
Series of 2020 dated June 1, 2020 provides the following:
XI (D) Local Government Units
xxx
5. Post in the LGU official website, social media

accounts, and at conspicuous places the list of
beneficiaries who already received the emergency
subsidy limited to the following information: (a)
given last names of the registered head of the family;
and (b) barangay and district;
4.3 IPSAS 1 on presentation of Financial Statements provides:
Faithful Representation
To be useful in financial reporting, information must be faithful

representation of the economic and other phenomena that it
purports to represent. Faithful representation is attained when
the depiction of the phenomena is complete, neutral, and free
from material error. Information that faithfully represents an
economic or other phenomenon depicts the substance of the
underlying transactions, other event, activity or circumstance
which is not necessarily always the same as its legal form.
4.4 Further, GAM for LGUs, Volume III prescribes the Chart of Accounts,
among which:
Section 5. Description of Accounts
1 Assets
44
03 Receivable
05 Advances
Account Title Advances for Payroll
Description This account is used to record the amount

granted to regular disbursing officer for payment
of salaries, wages, honoraria, allowances and
other personnel benefits. Credit this account
upon liquidation.
Account Title Advances to Special Disbursing Officer

Description This account is used to record the amount

granted to agency’s accountable officers and
employees for special purpose/time-bound
undertakings to be liquidated within a specified
period. This includes labor payroll for projects
undertaken by administration. Credit this
account upon liquidation.
4.5 In CY 2020, the Municipality of San Jorge was granted Social Amelioration
Assistance amounting to ₱7,745,000.00. Review of the submitted documents
and reports disclosed the following:
a. Lacking SAP liquidation documents
Per verification of the LGU’s bank statement, the SAP was initially
downloaded to their Trust Fund-BUB bank account under LBP Account
No. 0602-1185-92 on April 21, 2020, and immediately transferred to the
Trust Fund proper account under DBP Account No. 0730-0253-56. The
receipt of the fund was recorded in the books as debit Cash in Bank -
Local Currency, Checking Account, and credit Due to National
Government Agency.
The distribution of the said assistance to beneficiaries started on April 24

and was completed on May 2, 2020. It took the LGU nine calendar days
45
to complete the distribution within the allowable time frame, which is
within seven calendar days and ten days for Geographically Isolated and
Disadvantaged Areas (GIDAs), from the receipt of funds.
However, a review of the submitted liquidation documents disclosed that

only the accomplished liquidation payroll, master list of beneficiaries,
and few photos of the actual receipt of the grant were submitted to the
Audit Team.
The following documents have not yet been submitted for verification
and validation:
1. Photocopy of the identification card with specimen signatures of

the beneficiaries;
2. Photo of all beneficiaries during actual receipt of the assistance
(only few were attached)
3. Certificate of Payment duly signed by the authorized official of the
LGU concerned.
Non-submission of the above-mentioned documents hindered the Audit

Team’s verification of the regularity in the identification of beneficiaries,
the qualification of the beneficiaries, and the process of distribution
conducted by the LGU.
b. Cash Advance for SAP distribution was inadvertently recorded to

“Advances for Payroll” instead of “Advances for Special Disbursing
Officer”
A review of the entry made in the LGU books on the release of the fund
to SAP beneficiaries showed that the cash advance drawn by the
Municipal Treasurer under Check No. 58936487 dated April 23, 2020,
amounting to ₱7,745,000.00 was inadvertently recorded as “Advances
for Payroll” instead of “Advances for Special Disbursing Officer”. The
entry made and should be entry were as follows:
Table 4. Entry made and should be entry on the release of SAP

Entry Made Should be entry
Transaction Account Amount Amount
Account Title
Title Debit Credit Debit Credit
Advances for Advances to Special

Payroll ₱7,745M Disbursing Officer ₱7,745M
Cash Advance (1-03-05-020) (1-03-050-030)
for SAP
Cash in Bank
Cash in Bank – LCCA
– LCCA ₱7,745M ₱7,745M
(1-01-02-010)
(1-01-02-010)
46
Donations Donations (5-02-
7,745M 7,745M
(5-02-99-080) 99-080)
Release to
Beneficiaries/
Advances for Advances to Special
Liquidation of Payroll 7,745M Disbursing Officer 7,745M
CA (1-03-05-020) (1-03-050-030)
Based on the account description provided under Volume III of the GAM
for LGUs, the account title “Advances for Payroll” shall only be used to
record the amount granted to the regular disbursing officer for payment
of salaries, wages, honoraria, allowances, and other personnel benefits.
The appropriate account that should have been used for the transactions
that partakes of the nature of a special purpose/time-bound undertaking
that needs to be liquidated within a specified period is the “Advances to
Special Disbursing Officer”.
While the foregoing has no overall effect on the balance of the affected
accounts since the SAP was fully liquidated during the year hence,
corrected the error, the practice of the Municipality in debiting the
account “Advances for Payroll” for cash advances with special-
purpose/time-bound undertakings upon issuance of a check instead of
“Advances to Disbursing Officer” is still erroneous and needs to be
corrected, hence this observation.
4.6 Moreover, there was no information provided on the posting of the list of
beneficiaries on the LGU official website, social media accounts, and at
conspicuous places for transparency purposes.
4.7 The various deficiencies noted in the distribution, reporting, and documentary
requirements of the SAP, to some degree, manifested weakness in controls
and cast doubt on the propriety and validity of the distribution of a portion of
the funds.
4.8 We recommended that the LCE direct the:
1. MSWDO to require the submission of the enumerated lacking

documentary requirements, and ensure that the list of beneficiaries
is posted in conspicuous places as stated in the DSWD Memorandum
Circular No. 14, series of 2020;
2. MA-Designate to properly record the transactions and avoid short-

cutting of procedures to preserve full transparency and completeness
in the recording of transactions.
47
4.9 According to Management, based on verification from the retired MSWDO,
all documents, including a photocopy of the identification cards, were
submitted to the DSWD Regional Accounting Office. The MSWD's office
was unable to keep a copy of its file. However, they will retrieve the
documents as soon as possible.
4.10 They also stated that they had already submitted complete photos of SAP
beneficiaries per barangay in accordance with the LGU-Accounting Office's
instructions. These photos were taken during the SAP assistance distribution
only that they were not attached to the liquidation documents submitted to
COA. The MA-Designate had no intention of rushing through the procedures
but assured the Audit Team that the audit recommendations were taken into
consideration.
Non-compliance with the reporting and recording requirements on the utilization of

the Bayanihan Grant to Cities and Municipalities
5. Various deviations were observed in the utilization of the Bayanihan

Grant to Cities and Municipalities (BGCM) in CY 2020, such as (a) non-
creation of Special Account in the General Fund through an
appropriation ordinance or through inclusion in the appropriation
ordinance authorizing supplemental budget; (b) deficiencies on the
disbursements; (c) non-preparation of Monthly Fund Utilization Report
and Status of Implementation of PPAs and non-posting of the same in
LGU premises as provided in Local Budget Circular No. 125 dated April
7, 2020. Thus, the propriety of some disbursements are doubtful, and the
adopted mode of procurement and status of implementation were not
properly monitored.
5.1 Department of Budget and Management (DBM) Local Budget Circular (LBC)
No. 125 dated April 7, 2020 sets out the GUIDELINES ON THE RELEASE
AND UTILIZATION OF THE BAYANIHAN GRANT TO CITIES AND
MUNICIPALITIES. The relevant provisions thereof are as follows:
3.0 GUIDELINES
Xxx
3.7 The utilization of the BGCM shall be subject to

the usual local budgeting process pursuant to
the pertinent provisions of the Local
Government Code of 1991 (RA No. 7160).
48
For easy monitoring/tracking of the utilization of the
allocation of each city and municipality, a
special account in the general fund (SAGF) for
the BGCM shall be created through an
ordinance by the local sanggunian pursuant to
Section 313 of PA No. 7160. The creation of an
SAGF for the BGCM may also be done by the
local sanggunian through inclusion in the
pertinent appropriation ordinance authorizing a
supplemental budget covering the BGCM.
It is understood that the provisional guidelines on the

preparation and approval of the
annual/supplemental investment programs
prescribed under Department of the Interior and
Local Government-DBM Joint Memorandum
Circular No. 02 dated March 30, 20202 shall
also apply to the BGCM.
4.0 POSTING AND REPORTING REQUIREMENTS
The beneficiary cities and municipalities shall:
4.2 Comply with the posting requirements prescribed

under RA No. 9184 and its 2016 Revised IRR, and all
relevant policies issued by the GPPB;
4.3 Prepare monthly report on fund utilization and status

of implementation of PPAS using the prescribed
format (Annex C);
4.4 Post the accumulated reports on the LGU’s website

and in at least three (3) conspicuous public places in
the locality at the end of every month; and
4.5 The local chief executive (LCE) of the implementing

city/municipality shall send written notice when said
reports have been posted on its website to the DBM.
House of Representatives, Senate of the Philippines,
House Committee on Appropriations, Senate
Committee on Finance, and other offices where the
submission of reports is requires under existing laws,
rules and regulations.
49
5.2 The Report on Fund Utilization and Status of PPA Implementation per Annex
of LBC No. 125 was revised by the DBM per Annex A of Circular Letter No.
2020-10 dated July 10, 2020.
5.3 Volume III of the GAM for LGUs provides:
2LIABILITIES
04 Trust Liabilities
01 Trust Liabilities
Account Title Trust Liabilities
Normal Balance Credit
Description This account is used to record the receipt of

amount held in trust for specific purpose. Debit
this account for payment or settlement of the
liability or compliance of condition.
4INCOME
01 Tax Revenue
06 Share from National Taxes
Account Title Share from Internal Revenue Collections (IRA)
Normal Balance Credit
Description This account is used to record the share of local

government units from the national internal
revenue taxes collected.
5.4 Further, Pararaphs 44 and 45 of IPSAS 23 – Revenue from non-exchange

transactions (taxes and transfers) states:
44. An inflow of resources from a non-exchange transaction
recognized as an asset shall be recognized as revenue, except
to the extent that a liability is also recognized in respect of the
same inflow.
45. As an entity satisfies a present obligation recognized as a

liability in respect of an inflow of resources from a non-
exchange transaction recognized as an asset, it shall reduce the
carrying amount of the liability recognized and recognize an
amount of revenue equal to that reduction.
50
a. Non-creation of Special Account under the General Fund and erroneous
recording of the received grant
5.5 During CY 2020, the LGU received BGCM equivalent to one-month Internal
Revenue Allotment (IRA) amounting to P9,435,881.00 through NCA No.
LGRCB-20-0004896 dated April 7, 2020 in order to immediately address and
respond to the COVID-19 emergency. Under LBC No. 125, the fund shall
exclusively be utilized in the implementation of COVID-19 related programs,
projects, and activities (PPAs) within the duration of the State of Calamity as
declared by the President by virtue of Proclamation No. 929 dated March 16,
2020.
5.6 The LGU then made a Supplemental Budget through the enactment of
Appropriation Ordinance No. 02-2020 on April 20, 2020 together with the re-
appropriation of some projects under the 20% Development Fund. However,
the creation of a Special Account under the general fund was not included in
the said ordinance, and no separate ordinance was approved by the Local
Sanggunian for the purpose.
5.7 Moreover, receipt of the BGCM Fund of ₱9,435,881.00 was recorded as

Share from Internal Revenue Allotment (IRA) instead of Trust Liabilities.
The management should note that the fund transferred to the LGU has certain
conditions, hence, it should be appropriately recorded as Trust Liabilities.
This is consistent with paragraphs 44 and 45 of IPSAS 23, which deals with
revenue from non-exchange transactions, like the BGCM. Thus, the
erroneous recording resulted in the overstatement of the reported Share from
IRA in the CY 2020 financial statement by the amount of grant received.
Also, the utilization of the grant could not be easily tracked and monitored.
b. Deficiencies in the disbursements
5.8 The BGCM Fund was utilized mainly for the procurement of Welfare Goods
distributed to various households, and Medical Supplies and Equipment used
in COVID-19 Facilities, made through Negotiated Procurement (Emergency
Cases), direct negotiation with local farmers, and reimbursements. As of
December 31, 2020, the LGU was able to utilize in full the BGCM fund with
a total disbursement of ₱9,435,881.00. Deatails are shown in Table 5.
Table 5. Procurement under BGCM
51
Check Gross
Date Payee Particulars
No. Amount
4/30/2020 66828779 Maymees General Payment of 4,840 tray eggs ₱ 919,600.00

Merchandise
5/4/2020 66828781 Ofelia C. Adesas Cash Advance to defray Rice
& Veg for relief due to
COVID 19 Pandemic
P6,118,912.50
Liquidations:
Jaime B. Arias (21 Sacks of 358,700.00
White Rice & 170 sacks Red
Rice)
Ferdinand Mabansag (10 Sacks 376,100.00
of White Rice & 189 sacks
Red Rice)
Ronan De Guia (30 Sacks of 60,500.00
White Rice & 5 sacks Red
Rice)
Rey Cailo (87 Sacks of Red 165,300.00
Rice)
Ma. Victoria Garcia (3 Sacks 21,250.00
of White Rice & 8.5 sacks Red
Rice)
Nilo Melanez (12 Sacks of 20,400.00
White Rice)
Cosme Bacurio (4sacks red 9,300.00
rice and 1 Sack of White Rice)
Jocelyn Pajanonot (36 sacks 102,400.00
red rice and 20 Sacks of White
Rice)
Micheal Banar (71 sacks red 134,900.00
rice)
Wilmar Sale (500 sacks red 950,000.00
rice)
Edgardo Solas (43 sacks red 83,400.00
rice and 1 Sack of White Rice)
Bartolome Pallones (24 sacks 47,300.00
red rice and 1 Sack of White
Rice)
Erwin Jacosol (39 sacks red 74,100.00
rice)
Joshua Velasco (236 sacks red 472,200.00
rice and 14 Sack of White
Rice)
Dionisio A. Opina (Vegetable ₱ 10,675.00
for relief operation- 180 kgs
ampalaya, 65 kg partially
damaged ampalaya & 15 kg
upo)
52
Check Gross
Date Payee Particulars
No. Amount
Francisco Bollido (Vegetable ₱ 16,142.50

for relief operation- 22 kgs
sitaw, 72 kg patola, 2kg
tarong, 821.5kgs carabasa &
20 kg ampalaya)
Rumulo Sanico ( 1000 kgs 15,000.00
carabasa)
Anacito Arisga ( 166kls 8,990.00
ampalaya, 28kls ampalaya
reject & 12kls tarong)
Ponciano Dacles ( 65kls 15,390.00
tarong, 228kls sitaw, 127kls
ampalaya, 30kls ampalaya
reject)
Patrick Arisga ( 495kls
ampalaya) 22,275.00
Edgar Berdaje ( 30kls okra,
6kls upo) 720.00
Marcelo Cupido (21kls
ampalaya) 945.00
Total 2,965,987.50
5/4/2020 66828782 New Leyte Asia Payment of 1,380 sacks 2,691,000.00
Trading Commercial Rice
Corporation
5/4/2020 66828783 Tacloban, Sam's Payment of various 2,543,200.00
Trading commodities for distribution
for COVID 19
5/4/2020 66828785 Patoy Catbalogan Payment of 500 kls. Dried Fish 51,800.00
Fish Drying for relief due to COVID 19
pandemic
6/1/2020 66828900 Boss Nik To payment of medical 215,450.00
Enterprises supplies use for RHU due to
COVID 19
Mario Rey B. Reimbursement of 64 boxes of 14,080.00
7/3/2020 72293801 Donadillo drinking water
Reimbursement of water 19,540.00
Mario Rey B. expenses used in the isolation
12/9/2020 72294841 Donadillo and COVID Center
Reimbursement of water 15,223.50
Mario Rey B. expenses used in the isolation
12/21/2020 72294992 Donadillo and COVID Center
Total ₱9,435,881.00
5.9 Although majority of disbursements were supported with the necessary

documentary requirements, some deficiencies were observed as follows:
53
1. Official Receipt attached to the payment of medical supplies under
Check No. 66828900 dated June 1, 2020, amounting to ₱215,450.00,
was not properly accomplished as no details of payment were written
therein.
2. Purchases of drinking water for consumption in the COVID-19 facilities

were made through reimbursements instead of direct payment to
suppliers, and issuances to recipients were not supported with
Requisition Issue Slip.
3. Two (2) farmer suppliers were not able to submit certification that they
are bonafide farmers and are in the Registry System for Basic Sectors
in Agriculture (RSBSA).
c. Non-preparation of Monthly Fund Utilization Report and Status of

Implementation of Program, Project and Activities (PPAs) and non-
posting of the same in LGU premises
5.10 The LGU did not prepare and submit the Monthly Fund Utilization Report
and Status of Implementation of PPAs using the prescribed format in Annex
C of the LBC 125 as amended per Annex A of the DBM Circular Letter No.
2020-10 dated July 10, 2020 to monitor the implementation of PPAs charged
to the said fund. The reports shall likewise be posted in at least three
conspicuous places every end of the month.
5.11 The LGU provided the said report only after several requests by the audit team
for submission after year end, which by then funds were already fully utilized.
5.12 We recommended that the LCE:
a. monitor compliance of the LGU of all of the guidelines issued by the

National Government pertaining to the grant and utilization of funds
received by the LGU.
b. require the Municipal Accountant – Designate to reclassify

immediately the Bayanihan Grant received amounting to
₱9,435,881.00 from Share from Internal Revenue Allotment to
Transfers from National Government since the fund was already fully
utilized as of year-end.
c. require the Municipal Accountant – Designate to submit immediately

the certification for 2 farmer suppliers that they are bonafide farmers
and are in the Registry System for Basic Sectors in Agriculture
(RSBSA); and submit valid justification as to why tax was not
withheld for the procurement of 500 kilograms of dried fish
54
amounting to P51,800.00, the Official receipt attached to the payment
of medical supplies amounting to ₱215,450.00 were not properly
accomplished, and procurement of drinking water for consumption
in the COVID facilities were made through reimbursements instead
of direct payment to suppliers and were not supported with
Requisition Issue Slip.
d. require immediately the posting of Status of Implementation of

Programs, Projects and Activities implemented using the Bayanihan
Grant in LGU premises as provided in Local Budget Circular No.
125.
5.13 The Management agreed to comply with the noted deficiencies. However,
the MA-Designate did not submit the revised financial statements for CY
2020 showing the reclassified amount of ₱9,435,881.00 from Share from
Internal Revenue Allotment to Transfers from National Government; hence,
the noted deficiency was still included as part of the audit qualification for the
current year audit report.
Non-posting of documents/information under Emergency Procurement at the GPPB

Portal
6. The LGU did not comply with the posting requirement, of

documents/information related to Emergency Procurement under the
Bayanihan Act in the Government Procurement Policy Board (GPPB)
Online Portal as required under GPPB Circular No. 01-2020 dated April
6, 2020, thus, full transparency and accountability on procurement
transactions were not observed.
6.1 Section 9 of Government Procurement Policy Board (GPPB) Circular 01-

2020 dated April 6, 2020 on Guidelines for Emergency Procurement under
Republic Act No. 11469 of the Bayanihan to Heal as One Act states:
9. GPPB ONLINE PORTAL FOR EMERGENCY

PROCUREMENT UNDER THE BAYANIHAN
ACT
An online GPPB portal shall be established to promote

accountability and transparency in the conduct of
Emergency Procurement under the Bayanihan Act.
The PEs shall post in the GPPB online portal for

information purposes the updated APP, NOA, and
other information relative to the Procurement Projects
55
undertaken pursuant to this Circular. This online portal
shall be the source of data or information which shall
be used by the GPPB and its Technical Support Office
to comply with the reportorial requirements under the
Bayanihan Act.
6.2 In order to immediately respond with the urgent need to mitigate, if not
contain the transmission of Corona Virus Disease 2019 (COVID-19), the
LGU adopted Emergency Procurement as mandated in Republic Act No.
11469 or the Bayanihan to Heal as One Act in order to expedite procurement
procedures of necessities and provide assistance to families affected by the
community quarantine to prevent overburdening of the healthcare system.
6.3 During the year, the LGU disbursed funds totaling ₱30,923,940.54 through
Emergency Procurement (Negotiated Procurement) sourced from Local
Funds and the BGCM coming from the National Government, as shown in
Appendix F, and summarized in Table 6.
Table 6. Summary of disbursements made through Emergency

Procurement
Amount disbursed
Fund Source through Emergency
Procurement
Bayanihan Grant to Cities and Municipalities ₱9,387,037.50
20% Development Fund 9,694,581.84
Special Trust Fund 3,951,285.20
30% DRRMF 1,186,000.00
70% DRRMF 1,997,040.00
Others 4,707,996.00
Total ₱30,923,940.54
*See Appendix F for details
6.4 Our evaluation on the procurement procedures undertaken through

Emergency Procurement showed that the LGU was not able to comply with
the posting requirement in the GPPB Online Portal of the following
information relative to implementation of procurement:
1. Updated Annual Procurement Plan;

2. Project Name;
3. Approved Budget of the Contract;
4. Contract period;
5. Name of winning supplier, Distributor, Manufacturer, Contractor
or Consultant;
6. Amount of Contract as Awarded;
7. Notice of Award date of award and acceptance; and
56
8. Contract or Purchase Order.
6.5 The online portal is established to promote accountability and transparency in

the conduct of Emergency Procurement under the Bayanihan Act, which is
also a source of data or information to be used by GPPB and its Technical
Support Office to comply with the reportorial requirements under the
Bayanihan Act. In view of the LGU’s failure to post the above enumerated
documents/information, transparency and accountability of procurement
transactions were not fully observed.
6.6 We recommended that the LCE require the BAC Secretariat to post all
the procurement transactions in CY 2020 totaling ₱30,923,940.54
undertaken through Emergency Procurement in the GPPB Online Portal
as required under GPPB Circular No. 01-2020 dated April 6, 2020.
6.7 The BAC Secretariat agreed and will post all the procurement transactions in
CY 2020 made through Emergency Procurement in the GPPB Online Portal
as required.
Charging of expenses not related to relief and recovery operations to 5% Quick

Response Fund of the Local Disaster Risk Reduction Fund
7. The LGU charged expenses amounting to ₱81,200.00 to the Quick

Response Fund (QRF) of the Local Disaster Risk Reduction and
Management Fund (LDRRMF), which were not related to relief and
recovery operations contrary to Section 4.3 of Commission On Audit
(COA) Circular No. 2012-002 dated September 12, 2012 and National
Disaster Risk Reduction Council (NDRRMC), Department of Budget
and Management (DBM) and Department of the Interior and Local
Government (DILG) Joint Memorandum Circular (JMC) No. 2013-001
dated March 25, 2013.
7.1 Section 4.3 of COA Circular 2012-002 dated September 12, 2012 provides:
4.0 Sources and Allocation of LDRRMF
Xxx
4.3 Thirty percent (30%) of the amount

appropriated shall be allocated to the quick
Response Fun (QRF) of stand-by fund for
relief and recovery projects and activities.
Xxx
57
7.2 National Disaster Risk Reduction and Management Council
(NDRRMC)/Department of Budget and Management (DBM)/Department of
the Interior and Local government (DILG) Joint Memorandum Circular
(JMC) No. 2013-001 dated March 25, 2013 enumerates the Programs,
Projects and Activities (PPAs) chargeable to Local Disaster Risk Reduction
and Management Fund.
7.3 The Annual Budget for Calendar Year 2020 of the LGU shows that
₱5,764,067.86 was appropriated for the LDRRMF. Thirty percent of the
LDRRMF or ₱1,729,220.36 was allocated to QRF as a stand-by fund for relief
and recovery PPAs of the LGU.
7.4 Our post-audit of the transactions charged to current year’s QRF disclosed
that the LGU disbursed fund totaling ₱1,677,939.00 for the implementation
of PPAs as a response to the emerging threat of COVID-19 and the
President’s declaration of the state of calamity throughout the Philippines
under Proclamation No. 929 dated March 16, 2020. The details of
expenditures charged to the current year’s 30% QRF are shown in Table 7.
Table 7. Expenditures charged to current year’s 30% QRF

Item
Particulars Amount
No.
1 Folding Beds ₱350,000.00
2 PPE and other Medical Supplies 280,350.00
3 Food Supplies for LSI 488,191.00
4 Drinking Water 110,078.00
5 Rental of Quarantine Facility/Tent 113,100.00
6 Various Expenses for LSI 200,340.00
7 Trapal 6,700.00
8 Tarpaulin Printing ₱ 6,580.00
9 Labor for the Improvement of deep well pump ₱ 1,400.00
Sub-Total 1,596,739.00
Non-COVID related relief and recovery expenditures
10 MIATF Consultative Meeting – Catering 57,400.00
11 Polo Shirt for MIATF Members 3,800.00
Sub-Total 81,200.00
Total ₱1,677,939.00
7.5 As shown in the above Table 7, the LGU disbursed ₱81,200.00 of the current
year’s QRF for catering services for the MIATF consultative meetings and
procurement of polo shirts for MIATF Members. These expenses are not
COVID-19 related relief and recovery expenses, and are considered
58
administrative expenses; hence, these should have been charged to the regular
operations of the LGU.
7.6 Management should take note that the 30% QRF is a stand-by fund set aside
by the LGU to quickly respond to the emerging needs of the constituents in
times of disasters, calamities, and epidemics; thus, expenses not related to the
relief and recovery activities of the LGU should not be charged thereto.
7.7 We recommended that LCE ensure that the utilization of the 30% QRF
is limited to expenses related to the relief and recovery efforts of the LGU
during times of disaster and calamities pursuant to COA Circular 2012-
002 dated September 12, 2012, and NDRRMC, DBM, and DILG JMC
No. 2013-001 dated March 25, 2013.
7.8 The management agreed to limit the utilization of 30% QRF to expenses
related to relief and recovery.
Charging of expenses to the lump-sum appropriation of 20% Development Fund
8. The Local Government Unit charged expenses totaling ₱1,473,644.84 to

the lump-sum appropriation under 20% Development Fund (DF)
described in a generic term as “Other COVID-19 related response”
despite the absence of authorization from the Sangguniang Bayan (SB),
contrary to Section 22 of R.A. 7160 and COA Circular 2012-003.
Likewise, expenditures amounting to ₱85,000.00 were not among the
allowable expenditures charged against the 20% DF contrary to DILG
and Department of Budget and Management (DBM) Joint Memorandum
Circular (JMC) No. 01 dated March 27, 2020.
8.1 Section 22 (c) of RA 7160 states that no contract may be entered into by the
local chief executive in behalf of the Local Government Unit without prior
authorization by the sanggunian concerned, unless otherwise provided in the
Code.
8.2 Also, COA Circular 2012-003 prescribes the “Updated Guidelines for the
Prevention and Disallowance of Irregular, Unnecessary, Excessive,
Extravagant and Unconscionable Expenditures” and considers the payment
for contracts without prior approval or authorization of the local Sanggunian
for projects described in appropriation ordinances in generic terms as illegal.
8.3 Supreme Court ruling in the case Hon. Gabriel Luis Quisumbing, et al., vs.
Hon. Gwendolyn F. Garcia, et al., G.R. No. 175527 dated December 8, 2008,
categorically provided that when an appropriation ordinance describe the
projects in generic terms such as “infrastructure projects, inter-municipal
waterworks, drainage and sewerage, flood control and irrigation projects,
59
reclamation projects or roads and bridges, there is an obvious need for a
covering contract for every specific projects that in turn requires approval by
the sanggunian. Specific sanggunian approval may also be required for the
purchase of goods and services which are neither specified in the
appropriation ordinance nor encompassed within the regular personal services
and maintenance operating expenses.
8.4 Items 2.1 and 2.2 of DILG and DBM JMC No. 01 dated March 27, 2020
enumerates the expenditures that are allowable and shall not be allowed to be
charged against the 20% DF, as follows:
2.1 In addition to the allowable development projects under Item

3.0 of the DILG-DBM JMC No. 2017-1, the 20% DF shall
likewise be allowed to be used for the following COVID-19
related expenses:
2.1.1 Procurement of personal protective equipment;

2.1.2 Procurement of equipment, reagents, and kits for
COVID-19 testing;
2.1.3 Procurement of medicines and vitamins;
2.1.4 Procurement of hospital equipment and supplies;
2.1.5 Procurement of disinfectants, sprayers, disinfection
tents and other disinfecting supplies and misting
equipment;
2.1.6 Food, transportation (including fuel), and
accommodation expenses of medical personnel and
other LGU personnel directly involved in the
implementation of COVID-19-related programs,
projects, activities (PPAs);
2.1.7 Food assistance and other relief goods for affected
households;
2.1.8 Expenses for the construction/repair/lease/rental of
additional space/building to accommodate COVID-19
patients and persons under monitoring/investigation;
2.1.9 Expenses for the operation of stand-alone/mobile
testing laboratory;
2.1.10 Expenses for the purchase/rental of tents for temporary
shelters of the homeless;
2.1.11 Expenses for training of personnel in the conduct of
COVID-9 testing and other related trainings; and
2.1.12 Other necessary COVID-19-related PPAs and
expenses.
2.2 Except for the allowable expenses enumerated in item 2.1

above, the following items, as enumerated under 4.0 of DILG-
60
DBM JMC No. 2017-1, shall not be allowed to be charged
against the 20% DF:
2.2.1 Personal Services expenditures, such as salaries,

wages, overtime pay, and other personnel benefits;
2.2.2 Administrative expenses, such as supplies, meeting,
communication, water and electricity, petroleum
products, other general services, and the like;
2.2.3 Travelling expenses, whether domestic or foreign;
2.2.4 Registration or participation fees in training, seminars,
conferences or conventions;
2.2.5 Purchase of administrative office furniture, fixtures,
equipment or appliances; and
2.2.6 Purchase, maintenance or repair of motor vehicles or
motor cycles, other than those specified in item 3.0 of
DILG-DBM JMC No. 2017-1.
8.5 Due to the urgent need to effectively respond, curtail and eliminate the threat
of COVID-19 in the locality, the LGU enacted an ordinance authorizing the
supplemental budget under Appropriation Ordinance No. 02-2020 dated April
20, 2020, re-aligning funds under the 20% Development Fund (DF)
amounting to ₱10,564,119.00 together with the Bayanihan Grant to Cities and
Municipalities of ₱9,435,881.00.
8.6 Our review and audit of the LGU’s utilization of the realigned funds under
20% DF for the implementation of COVID-19 PPAs, disclosed the following:
a. expenditures totaling ₱1,473,644.84 were charged to “Other COVID-19

related response” despite the absence of authorization from the
Sangguniang Bayan
8.7 Of the total re-aligned 20% DF for COVID-19 PPAs during the year,
₱2,100,000.00 was appropriated to item described in generic term “Other
COVID-19 related response”. Our audit of the charges to the said
appropriation disclosed that the LGU charged expenditures totaling
₱1,473,644.84 despite absence of authorization from the Sangguniang Bayan
to utilize the fund for the implementation of specific PPA. The details of the
expenditures are as follows:
Table 8. Expenditures charged to 20% DF for COVID-19 PPAs

Item No Particulars Amount
1 Regents and Kits for COVID 19 testing ₱ 520,500.00
2 Disinfectants 40,500.00
Rental of additional space/building to
33,000.00
3 accommodate COVID19 patients
61
Item No Particulars Amount
4 Other necessary COVID 19 expenses 879,644.84
Total ₱ 1,473,644.84
8.8 Also, the updated AIP for CY 2020 submitted by the LGU did not itemize the
PPAs chargeable to the said appropriated fund and was still presented in lump
amount under the “Other COVID related response” line item.
8.9 The Management should take note that the appropriation in the 20%
Development Fund described as “Other COVID-19 related response” was in
generic term and lack specifications, and therefore requires authorization
from the SB through an appropriation ordinance or resolution. Also, the non-
identification of specific projects under cited lump-sum appropriation may
result in the delayed utilization of the corresponding funds or in issues on the
sufficiency of authorization to use the lump-sum appropriation for
unspecified PPAs to the detriment of the prospective beneficiaries. Having
well-defined local plans harmonized with national development goals could
help in achieving efficiency and effectiveness in the allocation of recourses
of the municipality.
b. Not allowable charges to 20% DF
8.10 It was noted that expenditures totaling ₱85,000.00 were spent for the catering
services during the MIATF meetings which are not among the allowable
expenditures cited under DILG and DBM JMC No. 01 dated March 27, 2020,
details are as follows:
Table 9. Not allowable charges to 20% DF

Check
Date Payee Particulars Amount
No.
Payment of catering services on July 3,
7/9/2020 72293855 Ellas Food Services 2020 used during MIATF Meeting ₱5,000.00
Payment of catering services on July 3,
7/23/2020 72293939 Ellas Food Services 2020 used during MIATF Meeting 5,000.00
Payment of catering services on
October 23, 2020 used during MIATF
11/12/2020 72294717 Ellas Food Services Meeting 5,000.00
September 25, 2020 used during
11/16/2020 72294764 Ellas Food Services MIATF Meeting 5,000.00
62
Check
Date Payee Particulars Amount
No.
11/17/2020 72294774 Ellas Food Services MIATF Meeting ₱ 5,000.00
November 6, 2020 used during MIATF
Payment of catering services on Nov.
20, 2020 used during MIATF 7
12/21/2020 72294970 Ellas Food Services Barangay Captain Meeting 14,000.00
November 13, 2020, used during
November 27, 2020, used during
Payment of catering services during
Meeting of Contract Tracers on Nov.
12/29/2020 72295216 Ellas Food Services 9, 2020 6,000.00
Total ₱85,000.00
8.11 The expenses for MIATF meetings for catering services should have been
paid out of the regular appropriations of the LGU. The utilization of the 20%
for catering services for the MIATF meeting contravenes the provisions of
DILG and DBM JMC No. 01 dated March 27, 2020.
8.12 We recommended that the LGU submit immediately the required

authority from the SB for the expenditures totaling ₱1,473,644.84
charged to “Other COVID-19 related expenses” under the 20% DF.
8.13 We recommended that the SB ensure that prior to the adoption of

supplemental budget involving the 20% DF, updated/supplemental AIPs
should contain the specific PPAs and not lumped, to set a clear
disbursement limit and to avoid delay in the implementation and possible
questions on the sufficiency of authorization of the Sanggunian to use the
supplemental appropriation for unspecified PPAs.
63
8.14 We also recommended that Management refrain from charging
expenditures not in accordance with the issued policy guidelines under
the 20% DF and ensure that the fund be optimally utilized for the welfare
and benefit of the constituents.
8.15 The Management said that they will coordinate with the Sangguniang Bayan
(SB) to submit the required authority for the expenditures charged to “Other
COVID-19 related expenses” under the 20% DF, and will ensure that before
the adoption of supplemental budget involving the 20% DF,
updated/supplemental AIPs will contain specific PPAs and will not be in
lumped amount.
8.16 The management will also refrain from charging the expenditures not in
accordance with the issued policy guidelines under the 20% DF.
Non-preparation of monthly Consolidated Report of Accountability for Accountable

Forms (CRAAF)
9. The Officer In Charge – Municipal Treasurers (OIC-MT) did not

prepare and submit the monthly Consolidated Report of Accountability
for Accountable Forms (CRAAF) contrary to Section 104 of PD No. 1445
and Sections 58 and 64 of the Local Treasury Operations Manual.
Likewise, the Revenue Collection Clerks (RCCs) were not required to
prepare and submit the individual monthly Report of Accountability for
Accountable Forms (RAAF); thus, resulted in difficulty in the complete
and proper monitoring and accounting of accountable forms.
9.1 Section 104 of Presidential Decree (PD) No. 1445 provides:
Section 104. Records and reports required by primarily

responsible officers. The head of any agency or
instrumentality of the national government or any
government-owned or controlled corporation and any other
self-governing board or commission of the government shall
exercise the diligence of a good father of a family in
supervising accountable officers under his control to prevent
the incurrence of loss of government funds or property,
otherwise he shall be jointly and solidarily liable with the
person primarily accountable therefor. The treasurer of the
local government unit shall likewise exercise the same degree
of supervision over accountable officers under his supervision,
otherwise he shall be jointly and solidarily liable with them for
the loss of government funds or property under their control.
64
9.2 Section 58 of Local Treasury Operations Manual provides:
Section 58. Handling of Dishonored Checks Received in Payment of

Taxes and Other Indebtedness to the Government.
A-F. xxx
G. Accountability for Official Receipts. - An official receipt is an

accountable form held in trust by the Local Treasurer or other
person duly authorized to possess or have custody thereof. He
shall be responsible for its safekeeping, the proper and
authorized use or application thereof and the reporting of its use
and condition, and shall be liable for loss, damage or
deterioration occasioned by negligence in the keeping or use
thereof.
H-Q. xxx
R. The Local Treasurer’s Report of Accountability for

Accountable Forms. – Collectors/Tellers and other accountable
officers shall render their report of accountability for
accountable forms in the Report of Accountability for
Accountable Forms at least once a month. Such report shall also
be prepared in the case of transfer of office or accountability by
the accountable officer. The Local Treasurer shall
summarize/consolidate these reports in the Consolidated Report
of Accountability for Accountable Forms, and submit the
consolidated report accompanied by the individual reports to the
Unit Auditor concerned not later than the fifth day of the ensuing
month.
9.3 Section 64. Forms and Reports Used by Local Treasury Officials:
A. xxx
B. Report of Accountability for Accountable Forms. – The Report

of Accountability for Accountable forms shall be used to report
the quantity of accountable forms received, issued or cancelled by
the Accountable Officer as of the end of the month.
Collectors/Tellers and other Accountable Officers shall render this

Report of Accountability for Accountable Forms at the end of the
month for consolidation by the Local Treasurer. Such report shall
also be prepared in case of transfer of officer or accountability by
the Accountable Officer.
65
C. Consolidated Report of Accountability for Accountable
Forms- The Consolidated Report of Accountability for
Accountable Forms shall be prepared by the Local Treasurer to
consolidate the Report of Accountability for Accountable Forms
of Accountable Officers. The consolidated report accompanied by
the individual reports shall be submitted to the Unit Auditor
concerned not later than fifth (5th) day of ensuing month for
verification.
9.4 Our examination of the submitted reports and documents concerning the
LGU’s collection and deposit transactions for Calendar Year 2020 disclosed
that the OIC-MT did not prepare and submit the monthly CRAAF - without
and with monetary value. Likewise, the RCCs were not required to prepare
and submit the individual monthly RAAF. The LGU relies only on the Report
of Collections and Deposit prepared by the Accountable Officers and
Issuance Logbook to monitor requisition, issuance, and balances on hand of
accountable forms.
9.5 The absence of proper and sound practice in monitoring the accountability for
accountable forms of the RCCs and MTO deprived the Municipal Accountant
(MA)-Designate of any basis in monitoring their collections, remittances, and
deposits; thus, rendering it difficult to establish the accountability of AOs for
cash collections and accountable forms. This deficiency could also lead to
possible misuse of government funds.
9.6 We recommended that the LCE require:
c. The OIC-MT to prepare and submit Consolidated Report of

Accountability for Accountable Forms (CRAAF) for accountable
forms with money value and without money value, regularly and on
time; and the RCCs to prepare and submit to OIC-MT their
individual monthly RAAF.
d. The MA-Designate to closely monitor the submission by the OIC-MT

of the report of collection and deposits with the CRAAF to facilitate
the required monthly reconciliation of accounting records with the
treasury records.
9.7 The OIC-MT commented that she will require the RCCs to submit their
monthly RAAF, and she will prepare and submit the monthly Consolidated
Report of Accountability for Accountable Forms (CRAAF). Likewise, the
66
MA-Designate will start monitoring the submission of the MT report of
collection and deposits with the CRAAF.
Non-adherence with the Omnibus Rule on Leave in the grant of monetization of leave
credits
10. The Local Government Unit (LGU) granted one employee to monetize
almost all his vacation leave, five employees to monetize more than the
maximum 30 days, and five employees to monetize less than the minimum
of ten days in a given year, contrary to Section 22, Rule XVI of the
Omnibus Rules on Leave.
10.1 Section 22, Rule XVI of the Omnibus Rules Implementing Book V of
Executive Order No. 292, also known as the Omnibus Rules on Leave states,
“Officials and employee in the career and non-career service whether
permanent, temporary, casual or coterminous, who have accumulated fifteen
(15) days of vacation leave credits shall be allowed to monetize a minimum
of ten (10) days: Provided that at least five (5) days is retained after
monetization and provided further that a maximum of thirty (30) days may be
monetized in a given year.” (Underscoring supplied)
10.2 At the end of the year, the LGU declared savings under the Personal Services
and issued a supplemental budget that included payment for the monetization
of leave credits of officials and employees of the LGU through Appropriation
Ordinance No. 04-2020 enacted on December 21, 2020.
10.3 The LGU disbursed ₱1,442,649.66 for the monetization of leave credits
through the cash advance of the OIC-Municipal Treasurer under Check
Number 72295124 dated December 29, 2020. Our post-audit of the related
cash disbursements showed one employee was allowed to monetized almost
all his vacation leave, five were allowed to monetize more than the maximum
30 days and five were allowed to monetized less than the minimum of 10 days
in a given year. The summary of the noted deficiencies is shown in the Table
10.
Table 10. Deficiencies noted in the monetization of leave credits
67
Beginning
Balance after
Balance of Leave
Monetization
Officials & Credits No. of days
Remarks
Employees Vacation Sick Monetized Vacation Sick
Leave Leave Leave Leave
(VL) (SL) (VL) (SL)
Employee Monetized more than
124 173.45 40 VL 84 173.45
1 (FT) the allowable 30 days
Employee in a given year.
122 177 56 VL 66 177
2 (AB)
Employee
156.95 184 62 VL 94.95 184
3 (JR)
Employee
48.55 85.78 36 VL 12.55 85.78
4 (SM)
Employee 152.477 84.25 46 VL 106.477 84.25
5 (ET)
No balance retained
after monetization.
Employee Monetized VL should
15.524 19.524 15 VL 0.524 19.524
6 (JR) be 10 days only and a
balance of 5 days
shall be retained.
Employee Monetized below the
22.5 22.5 9 VL 13.5 22.5
7 (JB) minimum allowable
Employee monetization of 10
22.5 22.5 7VL 15.5 22.5
8 (LDG) days in a given year
Employee
267.2 438.1 9 VL 258.2 438.1
9 (RD)
Employee
223.232 139.84 9 VL 214.232 139.84
10 (HB)
Employee
207.8 175.05 9.5 VL 198.3 175.05
11 (AP)
10.4 The non-adherence to the Omnibus Rules on Leave in the grant of

monetization of leave credits may result in disallowances in audit.
10.5 We recommended that the Management should strictly adhere to Section

22, Rule XVI of the Omnibus Rules Implementing Book V of Executive
Order No. 292, also known as the Omnibus Rules on Leave on the grant
of monetization of leave credits.
10.6 Management admitted to deviating from what the law requires. They
deliberated such an error, but their ultimate goal is to establish equality and
impartiality among their personnel, particularly in financial matters. Given
68
the current situation, in which COVID-19 appeared to be an endemic disease
that threatens the entire world, and with feelings and affection for some of
their rank-and-file personnel who belong to the marginal line, the local
government decided on an equal availment of monetization. They assured and
agreed, however, that regardless of the circumstances, the laws, rules, and
regulations of the land must be followed.
Compliance with Tax Laws

In compliance with BIR Regulations and the government’s drive toward strong
revenue generation, the Municipality had consistently been withholding taxes from
compensation, expanded withholding taxes and value-added percentage taxes, and
remitted the same to BIR on or before the deadline.
Compliance with RA No. 8291 on Proper Deductions and Remittances of GSIS

Premiums
The Municipality had been consistently deducting all mandatory deductions
to the Government Service Insurance System (GSIS) in accordance with the issued
billing statements from the salaries of officers and employees and remitted the same
on or before the deadline pursuant to RA No. 8291.
Summary of Audit Suspensions, Disallowances, and Charges

The total audit suspensions, disallowances, and charges found in the audit of
various transactions of the Municipality as of December 31, 2020, was ₱4,158,928.63
based on the Notice of Suspension (NS), Notice of Disallowance (ND), and Notice
of Charge (NC) issued by this Commission, summarized as follows:
Issued This Settled This
Ending
Beg. Balance Period Period
Balance
Particulars (As of January (NS/ND/NC) (NSSDC) from
(As of Dec.
1, 2020) from Jan. 1 to Jan 1 to Dec.
31, 2020)
Dec. 31, 2020 31, 2020
69
Notice of Suspension ₱4,474,944.63 ₱250,000.00 ₱566,046.00 ₱4,158,928.63
Notice of Disallowance ₱ 0.00 ₱ 0.00 ₱ 0.00 ₱ 0.00
Notice of Charge ₱ 0.00 ₱ .00 ₱ 0.00 ₱ 0.00
The notices of suspensions and/or disallowance arising from the post-audit of

CY 2020 transactions are still for issuance. Such will be reflected in the SASDC of
the ensuing year.
70
PART III
STATUS OF IMPLEMENTATION OF PRIOR YEARS’

UNIMPLEMENTED AUDIT RECOMMENDATIONS
Of the 56 audit recommendations relative to the prior years’ audit, 15 were implemented,
41 were not implemented.
Reason for
Ref Status of
Audit Observation Audit Recommendation Partial/Non-
Implementation
Implementation
AAR 2019 Stale checks amounting to We recommended that
Finding ₱51,971.62 which have been the Municipal
No. 1 outstanding for more than two Accountant (1) prepare 1. Implemented
years from date of its issuance the necessary adjusting
were not cancelled and were entries on the stale checks
reported as outstanding checks to correct the Cash in
in the Bank Reconciliation Bank - Local Currency,
Statement for CY 2019 Current Account and
contrary to Section 97 and 111 Government Equity
of Presidential Decree No. balances.
1445, thus understating the
Cash in Bank - Local
Currency, Current Account
and Government Equity
balances in the Financial
Statements.
AAR 2019 Depreciable assets totaling We recommended that

Finding ₱118,782,819.56 were not the Municipal 2. Not The Municipal
No. 2 provided with allowance for Accountant-Designate be Implemented Accountant-
depreciation during CY 2019, (2) required to provide an Designate is still
AAR 2016 contrary to IPSAS 17, thus allowance for waiting for the
Finding understating the related depreciation on the complete list of
No. 2 Expense and Accumulated LGU’s depreciable assets inventory from the
Depreciation accounts, as well for fair presentation of inventory
as overstating the Property, accounts in the financial committee to
Plant and Equipment and statements. effect proper
Government Equity accounts. adjustment
AAR 2019 The Municipality failed to We recommended that Still, the LGU
Finding comply with the accounting the LCE (3) direct all 3. Not failed comply
No. 3 and reporting requirements for personnel concerned to Implemented with the
the Local Road Networks, in immediately comply with accounting and
AAR 2018 contrary to COA Circular No. the preparation of reporting
Finding 2015-008 dated November 23, records/reports required requirements for
No. 2 2015, thus balance at year-end of them, specifically the Local Road
totaling ₱22,892,907.39 could stated in Items VI and VII Networks in CY
not be relied upon. of COA Circular No. 2020
2015-008. Also, (4) 4. Not
initiate close Implemented
coordination for the
71
Reason for
Ref Status of
Implementation
Implementation
immediate reconciliation
of documents to ensure
accuracy of all records
and reports.
AAR 2019 The balances of reciprocal We recommended and `

Finding accounts, Due from Other the management agreed
No. 4 Funds and Due to Other Funds to direct the Municipal
under the General Fund and Accountant to (5) 5. Not Lack of data and
Trust Fund at year-end totaling reconcile the balances of Implemented other information
₱16,220,000.00 and reciprocal accounts by made in prior year
₱1,601,442.36, respectively, tracing and analyzing transactions
showed an unreconciled transactions made in prior
difference of ₱14,618,557.64 years’ and immediately
due to leniency in recording prepare necessary
and subsequent monitoring of adjustments. Further, the
these accounts contrary to Municipal Accountant
Section 111 of Presidential (6) should closely 6. Not
Decree No. 1445 and COA monitor transactions Implemented
Circular No. 2015-009 dated affecting reciprocal
December 15, 2015, casting accounts and ensure that
doubt on the correctness and these are recorded in both
reliability of the balances. funds simultaneously to
avoid any error of
omission.
AAR 2019 The OIC-Municipal Treasurer We recommended that

Finding did not update her cash book the Municipal Mayor
No. 5 daily and failed to maintain the oblige the OIC-
required cashbook for each Municipal Treasurer (7) 7. Implemented
fund and depository account, to update her cashbook on
contrary to Section 3 of COA a daily basis and conduct
Circular No. 92-382 dated July daily reconciliation of the
3, 1992 and Section 63 (A) and balances per cashbook as
(D) of the BLGF-DOF Local against the actual cash on
Treasury Operations Manual hand. Also, (8) to 8. Implemented
dated October 1, 2017, thereby maintain separate
cash accountability cannot be cashbook for Cash in
immediately determined and Bank and Cash Advances
verified against the actual cash under Special Education
on hand and accounting Fund and various Trust
records. Accounts and cashbook
for Cash in Treasury
under the Trust Fund and
other Trust Accounts.
AAR 2019 The current year appropriation We recommended that

Finding for 20% Development Fund the Local Chief
No. 6 amounting to ₱20,212,639.40 Executive (LCE) require
was barely utilized registering the Local Development
AAR 2018 only at 39.19% utilization rate Council, Municipal
72
Reason for
Ref Status of
Implementation
Implementation
Finding or in the total amount of Planning and
No. 8 ₱7,922,266.05 due to inclusion Development Officer and
of projects not ready for Municipal Engineer to:
AAR 2017 implementation during the
Finding budget year, resulting in a. implement the 9. Implemented
No. 3 unexpended balance of projects, programs
₱12,290,373.35 contrary to and activities in the
AAR 2016 DILG-DBM Joint Annual Investment
Finding Memorandum Circular No. Plan during the
No. 3 2017-1 dated February 22, budget year.
2017, thus the desired socio-
economic and environmental b. conduct intensive 10. Implemented
benefits from the utilization of review of the
the fund were not attained and unimplemented PPAs
defeating the purpose for under 20%
which it was intended. Development Fund in
order to determine if
they are still part of
the vital needs of the
Municipality
otherwise reprogram
them to new Priority
Development PPAs
in accordance with
DILG-DBM Joint
Memorandum
Circular No. 2017-1
dated February 22,
2017.
AAR 2019 The LGU utilized only 41.38% We recommended that

Finding or ₱1,486,220.20 of the current the LCE require the
No. 7 year’s allocation of MDRRMO-Designate
₱3,591,805.05 for prevention and other concerned
AAR 2018 and mitigation, preparedness, officials to:
Finding response, rehabilitation and
No. 10 recovery under the LDRRM 1. maximize the 11. Not During CY 2020,
Fund due to leniency in the utilization of Implemented 70% allocation for
implementation of projects, appropriated fund by disaster
resulting to unutilized balance implementing the preparedness and
of ₱2,972,660.20, thus its various programs, response PPAs
constituents were deprived of a projects and activities was not
more resilient community from in order to enhance implemented.
disaster’s impacts. Likewise, LGU’s disaster
the prior years’ LDRRM Fund preparedness and
balance for unexpended QRF response capabilities.
and MOOE totaling
₱2,311,089.91 were still 2. include in a separate 12. Not Still, it was not
unutilized as of December 31, caption in the Implemented included in the
2019. preparation of AIP.
LDRRMF
73
Reason for
Ref Status of
Implementation
Implementation
Investment Plan, the
PPAs charged to
prior years’
unutilized LDRRM
Fund in accordance
with Section 5.1.2 of
COA Circular No.
2012-002 dated
September 12, 2012.
AAR 2019 The Municipal Accountant We recommended that

Finding failed to prepare the monthly the Municipal Mayor
No. 8 Report on Sources and require the Municipal
Utilization of DRRMF, thus Accountant-Designate
the Local Disaster Risk (13) to prepare the Report 13. Implemented
Reduction and Management on Sources and
Officer also failed to submit Utilization of DRRMF on
said report on or before the 15th a monthly basis and the
day after the end of each month LDRRMO to submit the
through the LDRRMC and said report to the Audit
Local Development Council, Team on the required
to the Audit Team as required date, pursuant to Section
under Section 5.1.5 of COA 5.1.5 of COA Circular
Circular 2012-002. 2012-002.
AAR 2019 Deficiencies in documentary We recommended that

Finding requirements were observed in the Municipal Mayor
No. 9 the implementation of various require the (14) 14. Implemented
projects under the Yolanda Municipal Accountant-
Rehabilitation and Designate, Municipal
Reconstruction Program Agriculturist, Municipal
totaling ₱4,274,925.00 in non- Engineer and Technical
adherence to Article II of the Staff of the projects to
undated Memorandum of immediately submit
Agreement with the lacking documents and
Department of Agriculture comply with the
Regional Field Office 8, thus, deficiencies observed in
benefits due to the farmer the implementation of the
beneficiaries may not be projects. Also,
effectively and efficiently immediately refund the
delivered. unutilized fund of
₱39,780.84 to DA-RFO
8.
AAR 2019 Due to the failure of LGU to We recommended that `

Finding update the GAD database and the LCE require the
No. 10 to strengthen the GAD Focal members of the GAD
Point System, only 9 out of 32 Focal Point System to:
GAD related Projects,
Programs and Activities were
74
Reason for
Ref Status of
Implementation
Implementation
implemented during the year 1. Prepare GAD Plan 15. Not
wherein some expenditures and Budget in Implemented
presented in the GAD accordance with
Accomplishment Report did PCW-DILG-DBM-
not directly address the NEDA Joint
identified gender issues in the Memorandum
GAD Plan and Budget for CY Circular (JMC) No.
2019, contrary to pertinent 2016-01 dated June
sections of PCW-DILG-DBM- 12, 2016.
NEDA Joint Memorandum GAD database not
Circular No. 2013-01 and COA 2. Update the GAD 16. Not yet updated
Circular No. 2014-001 dated Database and provide Implemented
March 18, 2014, hence gender- gender related
responsive governance, pursue information with
women’s empowerment and minimum GAD
gender equality were not indicators that is
achieved. matched to the
biophysical,
socioeconomic, and
built environment
components of the
LGU Ecological
Profile.
3. Fully implement only 17. Implemented

GAD PPAs under the
DILG-approved
GAD Plan and
Budget.
4. Require the GAD 18. Not

Focal Person to Implemented
coordinate with the
Municipal Budget
Officer in the
inclusion of only
DILG approved
GAD PB in the
Annual Budget and
coordinate with the
Municipal
Accountant in
accomplishing the
GAD
Accomplishment
Report with respect
to the amounts to be
presented in the said
report.
75
Reason for
Ref Status of
Implementation
Implementation
AAR 2019 For CY 2019 the Municipality We reiterated our 19. Not On-going review
Finding still use the Municipal previous audit Implemented and revision of the
No. 11 Revenue Code of 2000 due to recommendation and the Municipal
non-prioritization by the management agreed that Revenue Code
AAR 2018 Sanggunian to enact its the Sangguniang Bayan
Finding revision, contrary to Section immediately revise the
No. 12 191 of RA 7160, thus, rates Municipal Revenue Code
imposed to taxpayers were not of 2000 as provided under
realistic and opportunities to Section 191 of RA 7160
generate additional revenues to impose a more realistic
were missed. rate that could give
additional income and
maximize revenue
sources.
AAR 2019 Taxes withheld from suppliers We recommended that

Finding and contractors under the Trust the LCE oblige:
No. 12 Fund from prior years and
period covering January to 1. The Municipal
June 2019 totaling Treasurer to:
₱504,528.53 were not remitted
on time causing accumulation a. remit 20. Not There were
of unremitted taxes and immediately the Implemented unremitted
unjustifiable delay, whereas, unremitted withholding taxes
total unremitted taxes as of withholding taxes at year-end
December 2019 amounted to as of December totaling
₱112,004.19, due to 31, 2019 totaling P238,461.45
inadequate monitoring and ₱112,004.19;
preparation of remittances,
contrary to BIR Revenue b. strictly comply 21. Not
Memorandum Circular No. 23- with the deadline Implemented
2007 dated March 20, 2007, on the monthly
thereby exposing the withheld remittance of
funds to risk of loss or misuse. creditable
withholding taxes
on or before the
10th day of the
following month
the withholding
was made; and
2. The Municipal 22. Not

Accountant to Implemented
prepare and maintain
subsidiary ledgers
and closely monitor
the remittances of
taxes withheld.
76
Reason for
Ref Status of
Implementation
Implementation
AAR 2019 Paid disbursement vouchers We recommended that 23. Not Submission of
Finding with supporting documents, the Municipal Treasurer Implemented accounts was still
No. 13 Report of Checks Issued, and Accountant be delayed
payrolls/liquidation reports, required to strictly
AAR 2014 and Report of Collections and observe the timely
Finding Deposits for all funds were submission of the same in
No. 8 submitted beyond the accordance with Section
reglementary period ranging 347 of Republic Act
from 62 to 153 days, contrary 7160, Section 7.2.1(a) of
to Section 347 of RA 7160, COA Circular No. 2009-
Section 7.2.1(a) of COA 006 dated September 15,
Circular No. 2009-006 dated 2009 and Section 39 of
September 15, 2009 and PD 1445. This
Section 39 of PD No. 1445, recommendation is
thus precluding the timely without prejudice to the
audit of the accounts and result of post audit of the
issuance of the corresponding transactions.
notices of suspension and
disallowance, if any.
AAR 2018 Receivable accounts We recommend that the 24. Not Remained
Finding specifically, the Due from LCE (24) oblige the Implemented outstanding as of
No. 1 NGAs account amounting to Municipal Accountant to December 31,
₱87,636.43 under the General file a request for write-off 2020
AAR 2015 Fund, Due from LGUs of the receivable account
Finding account amounting to balances which are
No. 4 ₱3,990.22 under Trust Fund considered dormant and
and unliquidated cash could no longer be
AAR 2012 advances from officers and collected in accordance to
Finding employees amounting to COA Circular No. 2016-
No. 3 ₱718,047.65 which remained 005 dated December 19,
dormant in the books for more 2016.
AAR 2011 than ten (10) years were not
Finding acted upon to facilitate the
No. 3 proper write-off thereof,
resulting in the overstatement
of agency assets totaling
₱722,037.87 contrary to COA
Circular No. 2016-005 dated
December 19, 2016.
Moreover, unavailability of
records made the possibility of
collection even more remote.
AAR 2018 Required disclosures of the We recommend that the 25. Not Some required
Finding Loans Payable-Domestic Municipal Mayor (25) Implemented disclosures were
No. 3 Account with an outstanding require the Accountant- not yet provided in
balance of P18,682,910.20 Designate to disclose in the Notes to FS.
AAR 2017 such as purpose of the loan, the notes to financial
Finding amount of loan released, statement necessary
No. 2 interest rate, loan term, information in relation to
77
Reason for
Ref Status of
Implementation
Implementation
collateral/guaranty/security the loan such as purpose
and others were omitted in the of the loan, amount of
Notes to Financial Statement loan released, interest
contrary to Section 111 and rate, repayment term,
112 of PD 1445. collateral/guaranty/securi
ty and others to enhance
the understandability of
amount presented.
AAR 2018 Errors made by the bank as We recommend that the

Finding early as February, 2018, in Municipal Mayor to (26) 26. Not Submission of
No. 4 posting the total amount of require the Accountant to Implemented BRSs were still
P501,979.42 to the correct prepare monthly Bank delayed, and
LGU’s General Fund and/or Reconciliation Statement errors made by the
Special Education Fund (BRS), furnish the Bank bank were not yet
depository account, and bank with BRS in case of bank corrected together
debit totaling P104,584.80 in errors/reconciling items with addition of
the General Fund, without and to request immediate two checks that
sufficient details or action. were erroneously
information were detected very debited to other
late and remained uncorrected account.
as at year-end due to delayed
preparation of the monthly Likewise, the (27) 27. Not Still, there are
bank reconciliation statement Accountant should make Implemented some book
required in Section 74 of P.D. the adjustments for book reconciling items
No. 1445. reconciling items. which were not
adjusted by the
Municipal
Accountant-
Designate.
AAR 2018 Remittance of collections We recommend that the

Finding made by the Revenue Municipal Mayor (28) 28. Not Remittances of the
No. 5 Collection Clerks to the require all Revenue Implemented RCC to the MT
Municipal Treasurer ranging Collection Clerks to remit were still delayed
AAR 2014 P7,351.00 to P95,527.54 were to the Municipal
Finding delayed by 2 to 150 calendar Treasurer the full amount
No. 6 days and the Municipal of their collections daily,
Treasurer likewise failed to regardless of the nature of
AAR 2013 deposit intact all her collection collections made.
Finding as well as those collections
No. 9 received from the collectors We also recommend that
incurring delay of 3 to 24 the (29) Municipal 29. Not The MT could not
calendars days in the General Treasurer deposit intact Implemented always deposit
Fund and 2 to 111 in the Trust all her collection as well collections on the
Fund, contrary to Section 69(1) as collections turned over next banking day
of PD 1445 and Section 28 of to her by the collectors due to location
COA Circular No. 92-282, daily or on the next constraint
thereby exposing the banking day, particularly
government funds to possible when the collections
misuse/loss, understating the reach P10,000.00,
78
Reason for
Ref Status of
Implementation
Implementation
reported income for a certain pursuant to Section 69(1)
period and deprived the use of of PD 1445 and Section
funds for the operation of the 28 of COA Circular No.
municipality. 92-382. Also, (30) verify 30. Not
the remaining ORs in the Implemented
hands of the collectors to
assure all collections
were remitted.
AAR 2018 Work suspensions of on-going We recommend that the 31. Not Reiterated in
Finding infrastructure projects funded Municipal Mayor require Implemented Finding No. 2 of
No. 9 by the LGU and various NGAs the Municipal Engineer this report.
were not supported with (31) to impose the 10%
suspension orders to justify the retention money on every
delays incurred ranging from progress billings and
31 to 606 calendar days to strictly comply with the
validate imposition of provisions of Annex E of
Liquidated Damages against the RIRR of RA 9184.
the erring contractor, while the
Retention Money of 10% for
every progress billings were
likewise not imposed contrary
to Section 6, Section 8, and
Section 9, Annex E of the
Revised IRR of R.A. 9184,
thus, recovery from the
contractor for the discovered
uncorrected defects,
unjustifiable delays and third
party liabilities may not be
feasible.
AAR 2018 The LGU’s Solid Waste We recommend that the 32. Not MSWMP were
Finding Management Plan for 2009 to Municipal Mayor (32) Implemented still not approved.
No. 11 2018 did not bear approval of require the members of The NSWMC
the National Solid Waste MSWMB to review and called for a
Management update the Municipal meeting during
Commission(NSWMC) Solid Waste Management the 1st quarter of
contrary to provisions of R.A. Plan with timeline for 2020 introducing
9003 or the Ecological Solid implementation to checklist of
Waste Management Act of determine the PPA’s to be requirements in
2000 dated January 26, 2001, prioritized during the the preparation of
thus programs implemented budget year, likewise, to 10-year Solid
may not be in accordance with (33) intensify efforts to 33. Not Waste
the National Solid Waste have the Solid Waste implemented Management Plan
Management Framework. Management Plan (SWMP) for
Moreover, the LGUs inability approved by the LGUs who were
to implement proposed NSWMC as required still not able to
programs, projects and under Section 16 of RA have their 10 year
activities embodied in the Ten- 9003. SWMP be
Year plan due to absence of
79
Reason for
Ref Status of
Implementation
Implementation
timetable and funding program approved by
prioritization hindered the SWMC.
overall realization of the goal
towards public health and Further, (34) enforce the 34. Not Some barangays
environmental protection. remaining barangays to Implemented already complied
create a BSWM
committee and prepare
BSWMP as required.
Furthermore, (35) require 35. Not Land title were not

the personnel concerned Implemented yet transferred
to process the transfer of while the ORCR
land title in the name of was already
the municipality and received by the
enforce the supplier of the Municipality
heavy equipment the
issuance of the OR/CR
for its immediate
utilization.
AAR 2018 Payments of honoraria totaling We recommend that the 36. Not Taxes were still
Finding ₱352,903.50 were not (36) Municipal Implemented not withheld for
No. 14 subjected to withholding tax in Accountant-Designate the payment of
contrary to Section 2.79 of strictly withhold the honoraria
Revenue Regulation (RR) 2-98 correct amount of taxes
as amended by Section 3 of RR from all honoraria
No. 10-2008 resulting to under payments in accordance
collection/remittance to BIR of with Section 2.79 of
the supposed taxes. Revenue Regulation
(RR) No. 2-98 as
amended by Section 3 of
RR 10-2008.
AAR 2018 Various projects, programs and We recommend that the

Finding activities listed in the approved Municipal Mayor (37) 37. Implemented
No. 15 GAD plan and budget for CY direct the GAD Focal
2018 with an allocation Person to comply with the
AAR 2015 aggregating P4,470,325.89 required schedule on the
Finding were not undertaken and preparation and
No. 4 partially implemented while submission of the GAD
disbursements totaling PB to the DILG to assure
AAR 2012 P1,933,730.00 were not related inclusion in the Annual
Finding to the gender issues identified Budget of the
No. 3 in the GAD plan. Further, municipality on the
PPAs in the GAD plan and preceding year. Further,
AAR 2011 budget did not reconcile with (38) require the 38. Not
Finding the GAD PPAs in the Annual consistent inclusion of Implemented
No. 3 Budget due to late submission PPAs in all reports and
to the DILG for review and ensure that all PPAs with
endorsement. Furthermore, the relevant gender issues be
GAD Accomplishment Report implemented.
80
Reason for
Ref Status of
Implementation
Implementation
was not in the prescribed
format contrary to pertinent (39) Furthermore, to 39. Not No GAD AR
provisions of PCW-DBM- submit the GAD Implemented submitted for CY
DILG-NEDA Joint Circular Accomplishment Report 2020.
No. 2013-01, thus, evaluation in the prescribed format
of the actual results of LGUs under Annex E or E-1 of
sensitivity to GAD issues the PCW-DILG-DBM-
could hardly be determined. NEDA JMC 2013-001.
AAR 2017 Liquidated damages were not We recommended that

Finding imposed to the contractors on the Municipal engineer,
No. 4 its failure to satisfactorily through the Municipal
complete the infrastructure Mayor as head of the
projects on time as specified in procuring entity to:
the contract ranging from 29 to
987 days delay and no action to (40) Rescind the 40. Implemented No significant
take-over was done by the contracts and forfeit the number of delays
management in contrary to contractor’s performance were observed in
Section 8, Annex E of the 2016 security of those who the
Revised IRR of R.A. 9184, incurred unjustifiable implementation of
thus the obligation of the delay and award the same projects for CY
contractor to the government to qualified contractors 2020.
and other appropriate sanctions through negotiated
were not carried out aside from contract.
depriving the intended
beneficiaries from the timely (41) Strictly comply with 41. Implemented
use of the projects. the provisions of Annex E
of the Revised IRR of RA
9184 on the contract
implementation for the
procurement of
infrastructure projects.
AAR 2017 Activities included in GAD We recommended that 42. Not GAD PPAs under
Finding plan and budget for CY 2017 the (42) Municipal Mayor Implemented Plan and Budget is
No. 5 amounting to P5,720,350.00 thru the GAD Focal Point already compliant
were focused only on poverty System to conduct a with the Magna
alleviation, and did not directly thorough assessment in Carta for Women.
address issues on gender identifying gender issues However, actual
sensitivity contrary to Section and corresponding activities
3.4 and Annex A-Colum7 of activities that directly implemented still
PCW-NEDA-DBM Joint promote gender equality focused only on
Circular No. 2012-01. and women poverty elevation.
Moreover, total disbursements empowerment and to
for the period was below the strictly adhere with the
mandated budget requirement provisions of PCW-
under General Appropriations NEDA-DBM Joint
Act of 2017, thus the LGU’s Circular No. 2012-01.
mandate of strengthening and
institutionalizing GAD in its
81
Reason for
Ref Status of
Implementation
Implementation
programs was not fully
achieved.
AAR 2017 Resolution appropriating We recommended that 43. Not No projects

Finding P256,502.00 for the CY 2017 the (43) Local School Implemented implemented
No. 6 Special Education Fund was Board strictly follow the during CY 2020.
approved by the Local School time table for the
Board during the 4th Quarter of planning and budgeting
AAR 2016 CY 2017 giving minimal time of SEF and give top most
Finding for the implementation of priority for the
No. 7 proposed improvement of
projects/programs/activities educational facilities and
which also found to be other priority
focusing on sports projects/programs/activit
development amounting to ies enumerated in
P155,972.00 or 61% of the DEPED-DBM-DILG
total budget compromising joint Circular No. 1, s.
other priority areas enumerated 2017. Moreover, (44) 44. Not
in Republic Act No. 7160 and ensure that all Implemented
DEPED-DBM-DILG joint procurement of goods
Circular No. 1, s. 2017, thus and services are in
support to other priority areas accordance with RA
of education was noted to be 9184.
deficient.
AAR 2017 Reimbursements for repairs We recommended that 45. Implemented

Finding and maintenance of motor (45) management strictly
No. 8 vehicles amounting to comply with Section
P1,763,829.33 were made 9.1.3.4 of COA Circular
without proper documentation No. 2012-001 dated June
in contrary to Section 4(6) of 14, 2012 which
PD 1445, COA Circular 97- prescribed the guidelines
002 dated February 10, 1997 and documentary
and Section 9.1.3.4 of COA requirements for repairs
Circular No. 2012-001 dated and maintenance of
June 14, 2012 thus, the validity motor vehicles. 46. Not There were still
of said transactions including Moreover, (46) it is Implemented reimbursement for
the reasonableness of pertinent recommended that the maintenance
repair costs could not be regardless of urgency of of motor vehicles
ascertained. need, management during CY 2020.
should strictly adhere to
the required payment by
checks directly to payees
except for small value
items which could be paid
out of petty cash fund. On
the other hand, practice of
reimbursement is
discouraged.
82
Reason for
Ref Status of
Implementation
Implementation
AAR 2017 Claims of actual travelling We recommended that 47. Implemented
Finding expense amounting to the (47) Municipal Mayor
No. 9 P1,272,323.21 were not and all officials and
supported with certification of employees to be frugal
the agency head as to the and strictly follow the
absolute necessity of the existing guidelines on the
expenses in the conduct of claim of travelling
assignment and other expense to avoid
supporting documents in excessive and
contrary to Section 4(6) of PD extravagant claims
1445, Section 1.1.4.1 and against the government.
Section 1.2.4 of COA Circular
No. 2012-001 dated June 14,
2012. Further, various
gasoline/fuel reimbursements
not supported with driver’s trip
ticket and certification on the
use of Government Vehicle in
violation of Section 3.1.1.8 of
COA Circular No. 96-004
April 19, 1996, casted doubt on
the regularity of the
transaction.
AAR 2016 The balances of some line We recommend that the 48. Not Some items in the
Finding items in the Statement of Cash (48) Municipal Implemented statement of cash
No. 1 Flows and Statement of Accountant be required to flow and SCBAA
Financial Performance do not analyze the transactions do not reconcile
AAR 2015 reconcile with the account covering the line items in with the
Finding details in the Notes to Financial the Financial Statements information in the
No. 1 Statements and no cross- and reconcile the same Notes to Financial
referencing was made for the with the account details in Statement
line items in the Statement of the Notes to the Financial
Cash Flows and Statement of Statements. Likewise,
Comparison of Budget and the (49) Municipal 49. Not
Actual Amounts to any related Accountant should see to Implemented
information in the Notes to it that each line item on
Financial Statements, contrary the face of the Statement
to Philippine Public Sector of Cash Flow and
Accounting Standards Statement of Comparison
(PPSAS) no. 1. of Budget and Actual
Amounts should be cross-
referenced to any related
information in the Notes
to Financial Statements.
AAR 2016 The Municipality’s Personnel We recommend that the 50. Implemented
Finding Services (PS) expenditures for (50) Municipal Budget
No. 9 calendar year 2016 exceeded Officer be required to
the PS limitation by strictly observe the 55%
₱6,807,630.02 in violation of Personnel Services
83
Reason for
Ref Status of
Implementation
Implementation
AAR 2014 Section 325 (a) of Republic limitation in the
Finding Act 7160, thus depriving the preparation of the annual
No. 7 municipality of substantial budget as required in
funds for more development Section 325 (a) of RA 51. Implemented
projects and other services to 7160. The (51) Municipal
its constituents. Mayor being the Local
Chief Executive should
always be guided by the
conditions of the
agency’s annual and
supplemental budgets to
ensure that the budgeting
requirements were
completely complied
with.
AAR 2015 The accuracy of the carrying We recommend that the

Finding amount of the Property, Plant (52) Municipal 52. Not No physical count
No. 2 and Equipment (PPE) at year- Treasurer/Property Implemented of inventory
end totaling ₱15,253,965.44 Custodian and conducted
AAR 2013 could not be ascertained Accountant be required to
Finding because of the discrepancies investigate, clear and
No. 1 between physical and book reconcile the disparity
inventories amounting to between physical and
AAR 2012 ₱9,459,964.29. book inventories in order
Finding to bring the PPE accounts
No. 4 to its desired balance.
AAR 2015 The expenses incurred for the We recommend that (53) 53. Not Claim of mobile
Finding use of mobile phones management limit the Implemented expenses still
No. 5 amounting to P653,276.84 incurrence of made thru
have exceeded the budgeted expenditures for the use reimbursement
amount by P27,126.84, of mobile phones to what
contrary to Section 346 of the is authorized per Annual
Republic Act 7160. On the Budget Appropriation.
other hand, the absence of Likewise, (54) formulate 54. Not
guidelines for the entitlement guidelines for the Implemented
to reimbursement of mobile entitlement of
phone expenses may result in reimbursements for
uncontrolled and/or excessive mobile expenses to avoid
claims for mobile phone excessive expenditures
expenses, contrary to Section 2 on the use of mobile
and 4(2) of PD 1445. phone.
AAR 2014 The propriety and legality of We recommend that the 55. Not Partial compliance
Finding the payments for progress (55) BAC submit the Implemented of the Notice of
No. 3 billings on farm-to-market lacking documents suspension, some
roads projects (FMR) totaling relative to the documents still
P7,222,436.88 could not be procurement of farm-to- lacking.
ascertained because some market road projects to
84
Reason for
Ref Status of
Implementation
Implementation
relevant procurement ascertain the propriety
documents were absent, and legality of the
contrary to COA Circular No. payments for progress
2009-001 dated February 12, billings. Likewise, (56) 56. Not
2009 and COA Circular 2012- require the BAC to Implemented
001 dated June 14, 2012. judiciously undertake the
Likewise, one contractor was evaluation of bids and
rated passed by the BAC post-qualification process
during the evaluation of bids, in accordance with
even if the contractor failed to Sections 12, 23 and the
disclose in their statement of Revised IRR of RA 9184
all on-going and completed to ensure that contracts
government contracts, the on- are awarded only to
going projects previously bidders who passed the
awarded to them by the criteria for eligibility
Municipality, contrary to check post-qualification
Sections 12 and 34 of IIR of and thus be considered as
RA 9184. the bidder with the lowest
calculated and responsive
bid.
85
PART IV
APPENDICES
A. Detailed Statement of Financial Position

A.1 General Fund
A.2 Special Education Fund
A.3 Trust Fund
B. Detailed Statement of Changes in Net Assets/Equity

B.1 General Fund
B.2 Special Education Fund
C. Detailed Statement of Financial Performance

C.1 General Fund
C.2 Special Education Fund
C.3 Trust Fund
D. Detailed Statement of Cash Flows

D.1 General Fund
D.2 Special Education Fund
D.3 Trust Fund
E Summary of Unrecorded Recouped Advances to Contractors

F. Detailed Disbursements made thru Emergency Procurement
.
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
Appendix E
Summary of Unrecorded Recouped Advances to Contractors

Status of Total Recoupment

Contract Advances to Unrecorded
No. Contract Name Fund Source Implement recoupment recorded per
Amount Contractor Recoupment
ation made per DV Book
Completed Projects
Improvement of
Reservoir and Spring GF
1,597,417.78 100.00% 239,612.67 239,612.67 239,612.67 -
Source - Brgy. (20% EDF)
1 Tomogbong
Construction of Local
GF
Access Road - Brgy. 1,509,078.21 100.00% 226,361.73 226,361.73 226,361.73 -
(20% EDF)
2 Rosalim
GF
Improvement of 998,473.69 100.00% 149,771.05 149,771.05 149,771.05 -
(20% EDF)
3 Municipal Stage
Rehabilitation of GF
998,078.98 100.00% 149,711.85 149,711.85 149,711.85 -
4 Covered Court (20% EDF)
Provision of Stock GF
2,000,000.00 100.00% - - - -
5 Room (20% EDF)
Construction of Multi-
GF
purpose Hall (Waiting 493,956.25 100.00% - - - -
(20% EDF)
6 Shed)
Purchase and
GF
Installation of Solar 9,811,200.00 100.00% 1,471,680.00 1,471,680.00 1,471,680.00 -
(20% EDF)
7 Street Lights
Repair/Improvement
of Village Water
Supply (Combination
TF (GPBP) 2,998,975.31 100.00% 449,846.30 449,846.30 449,846.30 -
of Level II and III)
Brgy. Tomogbong,
8 San Jorge
Sub-total 20,407,180.22 2,686,983.60 2,686,983.60 2,686,983.60 -

Ongoing Projects
Improvement of GF
Legislative Hall (20% EDF)
1 (Roofing Assembly) 2,497,068.68 60.07% - -
Construction of Local TF
2 Access Road (LGSF-AM) 6,039,858.64 89.62% 905,978.80 811,957.61 - 811,957.61
Proposed Level II
Water System
(Submersible Pump) - TF (LGSF
3 Brgy. Mobo-ob FY 2019) 1,998,618.89 70.00% 299,792.83 209,861.16 - 209,861.16
Proposed Level II
Water System
(Submersible Pump) - TF (LGSF
4 Brgy. Poblacion II FY 2020) 1,599,800.86 70.00% 239,970.13 167,982.93 - 167,982.93
Proposed Level II
Water System
(Submersible Pump) - TF (FY 2020
5 Brgy. Poblacion I - LGSF AM) 1,599,883.60 65.00% 239,982.54 155,989.63 - 155,989.63
103
104
Appendix F
Detailed Disbursements made thru Emergency Procurement

For Calendar Year 2020
Check
Date Particulars Amount
No.
Bayanihan Grant to Cities and Municipalities
4/30/2020 66828779 Payment of 4,840 tray eggs 919,600.00
5/4/2020 66828781 Cash Advance to defray Rice & Veg for relief 2,965,987.50
due to COVID 19 Pandemic (amount of CA
P6,118,912.50, refund P3,152,925.00)
5/4/2020 66828782 Payment of 1,380 sacks Commercial Rice 2,691,000.00
5/4/2020 66828783 Payment of various expenses use for COVID-19 2,543,200.00
5/4/2020 66828785 Payment of 500 kls. Dried Fish for relief due to 51,800.00
COVID 19 pandemic
6/1/2020 66828900 To payment of medical supplies use for RHU due 215,450.00
to COVID 19
Sub-total 9,387,037.50
20% Development Fund
5/4/2020 66828792 Payment of Equipment and other materials for 856,450.00
COVID-19 response
5/21/2020 66828859 payment of Egg used during COVID-19 122,550.00
Response-Relief (645 trays)
5/27/2020 66828866 Payment of Testing Kits used in Municipality of 172,500.00
San Jorge during COVID-19
6/1/2020 66828880 Payment of medicines & medical Supplies use for 1,252,410.00
RHU due to COVID-19
6/8/2020 72293631 Payment of rental of premises use for COVID-19 15,000.00
patient's Isolation Area March 15-May 31, 2020
6/23/2020 72293744 Payment of Testing Kits used during COVID-19 348,000.00
105
Check
No.
7/9/2020 72293855 Payment of catering services on July 3, 2020 used 5,000.00
during MIATF Meeting
7/23/2020 72293939 Payment of catering services on July 3, 2020 used 5,000.00
during MIATF Meeting
10/6/2020 72294537 Reimbursement of food supply for LSIS/ROF 27,140.00
May 15-20, 2020
June 16-21, 2020
10/29/2020 72294612 Reimbursement of catering services on August 15,200.00
31, 2020 used for LSIS/ROFW & Frontliner
27-28, 2020 used for LSIS/ROFW & Frontliner
May 27-29, 2020
May 31-June 3, 2020
11/12/2020 72294717 Payment of catering services on October 23, 2020 5,000.00
used during MIATF Meeting
11/12/2020 72294718 Reimbursement of catering services on 17,600.00
September 1-3, 2020 used for LSIS/ROFW &
Frontliner
11/12/2020 72294711 Payment of assorted Goods use for snacks of LSI 19,850.00
& Frontliners for the month of August, 2020
11/16/2020 72294764 Payment of catering services on September 25, 5,000.00
2020 used during MIATF Meeting
106
Check
No.
11/16/2020 72294762 Payment of catering services on August 18-31, 18,400.00
2020 used for LSIS/ROFW & Frontliner
11/16/2020 72294763 Payment Of catering services on August 26-28, 19,600.00

2020 used for LSIS/ROFW & Frontliner
01/12/2020 72294812 Payment of catering services on November 6, 5,000.00
12/9/2020 72294820 Payment of Electric bill for the Municipal 2,848.84
Isolation Facility for COVID- 19
12/21/2020 72294970 Payment of catering services on Nov. 20, 2020 14,000.00
used during MIATF 7 Barangay Captain Meeting
12/21/2020 72294966 Payment of rental Isolation facility use for 18,000.00
COVID-19 patient's from October to Dec. 2020
12/21/2020 72294988 Payment of catering services for LSI & Frontliner 28,000.00
on October 15-17, 2020
12/22/2020 72295021 Payment of Laundry Services 10,000.00
12/22/2020 72295022 Payment of Laundry Services 10,000.00
12/22/2020 72295019 Payment of various disinfectants and sanitizer 40,500.00
on September 18, 2020
12/23/2020 72295096 Payment of various commodities for Frontliners 33,878.00
on Oct. 21-22, 2020
107
Check
No.
12/29/2020 72295216 Payment of catering services during Meeting of 6,000.00

Contract Tracers on Nov. 9, 2020
12/29/2020 72295150 Payment of catering services for Quarantine 12,000.00
Facility Personnel August -5, 2020
on November 19-20, 2020
on Nov. 4-5, 2020
on Nov. 15-16, 2020
on Sep. 29-30, 2020
on November 28-30, 2020
on Nov. 10-11, 2020
on oct. 18-19, 2020
on Sep. 21-22, 2020
Sub-total 9,694,581.84
30% Quick Response Fund
6/23/2020 72293743 Payment of 100 pcs folding bed for LSI due to 350,000.00
COVID-19
6/23/2020 72293742 payment of 1 Roll trapal used for LSI due to 6,700.00
COVID 19
108
Check
No.
6/24/2020 72293760 Payment of various material use for LSI due to 141,360.00
COVID-19
7/20/2020 72293906 Payment of rental 3 units tent @300 per unit 36,000.00
(May 1-june 9, 2020)
7/27/2020 72293963 Payment of catering services 7/14/2020 12,000.00
7/27/2020 72293971 Payment of tarp printing for COVID-19 Facility 6,580.00
7/29/2020 72293981 Payment of Polo Shirt for MIATF Members 23,800.00
7/29/2020 72293982 Payment of water supply material use for LSI due 27,593.00
to COVID 19
7/29/2020 72293983 Payment of water supply material use for LSI due 22,945.00
to COVID 19
8/3/2020 72294013 Payment of various commodities for COVID-19 145,450.00
response
8/5/2020 72294046 Payment of rental for premises use for COVID- 12,000.00
19 Patient's Isolation Area (June-July, 2020)
Municipal Inter Agency Task Force Meeting
Municipal Inter Agency Task Force Meeting
8/5/2020 72294050 Reimbursement of various expenses use for LSI 15,460.00
due to COVID-19
8/7/2020 72294064 Payment of 20 boxes of globes use for RHU 24,550.00
8/7/2020 72294065 Reimbursement of various expenses use for LSI 21,000.00
due to COVID 19
8/18/2020 72294119 payment of various expenses use for relief due to 19,850.00
COVID
8/24/2020 72294168 payment of 11 unit thermal scanner & 11 Unit 127,600.00
alcohol dispenser foot operated
8/26/2020 72294184 Payment of catering services on August 21, 2020 5,000.00
MIATF Meeting.
8/27/2020 72294189 payment of coco lumber use for LSI due to 2,120.00
COVID-19
8/27/2020 72294190 payment of various materials Used for LSI due to 20,400.00
COVID-19
109
Check
No.
8/28/2020 72294212 payment of various exp. Used for combatting 56,200.00
COVID-19
9/4/2020 72294242 payment of tent rental used in the municipality 53,100.00
during COVID-19 (59 days) June 10 to Aug. 7,
2020
9/8/2020 72294249 Payment for rental of premises for health workers 12,000.00
frontliners from April to July, 2020
MIATF Emergency Meeting.
MIATF Emergency Meeting.
2020 MIATF Emergency Meeting.
2020 MIATF Regular Meeting.
9/14/2020 72294308 Payment of foods served to LSI/ROF used 3,892.00
Sub-total 1,186,000.00
70% Mitigation Fund
12/23/2020 72295033 Payment of Drugs and Medicines 1,997,040.00
Trust Liabilities – DRRMF
3/23/2020 58940008 Payment of Rice 1,375,000.00
3/23/2020 58940012 Payment of medical supplies for RHU Office 38,435.40
4/1/2020 58940013 Payment of various commodities for COVID 19 998,150.00
4/1/2020 58940014 Payment of various commodities for COVID 19 998,000.00
4/1/2020 58940015 Payment of 70 meters Tapita 14,000.00

4/2/2020 58940019 Payment of various Commodities for COVID 19 50,000.00
4/7/2020 58940020 Payment of vegetables 10,795.00

4/17/2020 58940023 Payment of medicines & medical supplies for 367,382.00
COVID 19
4/22/2020 58940028 Reimbursement of various expenses (trapal) 4,950.00
110
Check
No.
4/28/2020 58940033 Reimbursement of Hand sanitizer (Alcohol) 28,612.80
Expenses
4/29/2020 58940035 Payment of Tent Rentals 3/22-4/26/2020 32,400.00
5/11/2020 58940048 Payment of labor for Installation of barricade due 2,000.00
to COVID-19
5/18/2020 58940053 Payment of 60 pcs. Coco lumber use in 6,600.00
quarantine point due to COVID-19
5/18/2020 58940054 payment of various expenses for COVID-19 4,950.00
(trapal,styro,balde,styro)
Sub-total 3,951,285.20
Other sources from General fund
5/4/2020 66828788 Payment of services rendered for sewing of 27 13,500.00
pcs Tapita for Frontliner
5/5/2020 66827793 Payment of various commodities used during 80,350.00
COVID-19 Response
5/5/2020 66827794 Payment of various commodities used during 250,040.00
COVID-19 Response
5/6/2020 66828802 Payment of various commodities 996,900.00
5/19/2020 66828857 Reimbursement of various exp. Use for Balik 191,555.00
Provincia program due to COVID-19
6/1/2020 66828881 Payment of various expenses used during 468,540.00
COVID-19 Response
6/3/2020 72293614 Payment of Coco Lumber use for Tent for 8,210.00
checkpoint for COVID-19 pandemic
6/3/2020 72293615 Payment of various material use for Tent for 7,425.00
checkpoint for COVID-19 pandemic
6/4/2020 72293623 Payment of various expenses use for Relief due 44,280.00
to COVID-19
6/16/2020 72293692 Payment of various materials use for LSI & ROF 236,170.00
due to COVID-19
6/19/2020 72293715 Payment of various materials use for LSI & ROF 28,625.00
due to COVID-19
6/24/2020 72293761 Payment of 13 pcs. Coco Lumber use for LSI due 1,950.00
to COVID-19
6/24/2020 72293763 Payment of electrical Material use for LSI due to 20,999.00
COVID-19
111
Check
No.
7/7/2020 72293832 Payment of Logistical supplies related to 269,600.00
COVID-19 to be used in the Legislative Office
9/8/2020 72294314 Payment of Expenses distributed to the front liner 64,950.00
9/25/2020 72294347 Payment of Logistical Supplies related to 303,275.00

Covid19 to be used in the Legislative Office 7
front liners
9/28/2020 72294369 Reimbursement of various material use for 14,040.00
improvement of temporary Shelter/Office for
Medical Personnel
9/28/2020 72294370 Reimbursement of various material use for 23,322.00
improvement of temporary Shelter/Office for
Medical Personnel
10/1/2020 72294372 Payment of Rental for the Isolation Facility from 12,000.00
August-September, 2020
10/1/2020 72294373 Payment of various materials use for repair of 97,910.00
WESADEF building (stockroom)
10/1/2020 72294375 Payment of various materials use for repair of 7,595.00
roofing
10/1/2020 72294376 Payment of various material for Cabinet & Tables 13,830.00
for Evacuation Center Personnel
10/7/2020 72294423 Payment of Logistical supply related to COVID- 799,850.00
19
11/12/2020 72294724 Payment of materials for Temporary doors & 2,630.00
barricade used for quarantine facility for front
liners in SJNHS
12/11/2020 72294872 payment of Logistical supply related to COVID- 249,850.00
19 for barangay distribution
12/22/2020 72294999 Payment of rental for premises for rural Health 15,000.00
Workers & Front liners
12/23/2020 72295034 Reimbursement of various supplies & Materials 15,740.00
used for sanitation of municipal building &
covered court
12/23/2020 72295100 Payment of various materials for quarantine 72,745.00
facility for LSI Poblacion I
12/29/2020 72295195 Payment of various supplies for LSI & Front 26,000.00
liners due to COVID-19
112
113

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Republic of the Philippines

ANNUAL AUDIT REPORT

MUNICIPALITY OF SAN JORGE

FOR THE YEAR ENDED DECEMBER 31, 2020

8. The LGU charged expenses totaling ₱1,473,644.84 to the lump-sum appropriation

In our transmittal of even date, we requested the LCE to act on the

Expenditures incurred out of current appropriation amounted to ₱147,631,459.95

Independent Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the

Summary of Significant Observations and Recommendations –

In addition to the exceptions cited, the significant observations and corresponding

We recommended that the Local Chief Executive (LCE) require:

a. the Municipal Budget Officer/Property and Supply Custodian-Designate

We recommended that the LCE direct the:

a. Municipal Accountant (MA)-Designate to impose 10% Retention Money

b. Municipal Engineer to evaluate the ongoing projects totaling

We recommended that the LGU:

a. submit the Appropriation Ordinance with the Supplemental Budget and

b. require the MA-Designate to submit the lacking supporting documents

This observation is without prejudice to the issuance of Notices of

We recommended that the LCE:

a. monitor compliance of the LGU of all of the guidelines issued by the

b. require the Municipal Accountant – Designate to submit immediately the

c. require immediately the posting of Status of Implementation of

8. The LGU charged expenses totaling ₱1,473,644.84 to the lump-sum appropriation

We recommended that the LGU submit immediately the required authority

We recommended that the SB ensure that prior to the adoption of

We also recommended that Management refrain from charging expenditures

a. The OIC-MT to prepare and submit Consolidated Report of

b. The MA-Designate to closely monitor the submission by the OIC-MT of

We recommended that the Management should strictly adhere to Section 22,

Summary of Audit Suspensions, Disallowances and Charges (SASDC)

Status of Implementation of Prior Years’ Unimplemented Audit Recommendations

Part II - Detailed Audit Observations and Recommendations 28

Part III - Status of Implementation of Prior Years’ Unimplemented Audit 71

AUDITED FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

Honorable LEONCIO U. DE GUIA

Bases for Qualified Opinion

Note 2020 2019

Account Note 2020 2019

Note 2020 2019

The Municipality of San Jorge, Province of Samar was formally inaugurated

The LGU is envisioned to be an Agro-Tourism destination of Samar with

Note 2 – Basis of Financial Statement Presentation

The combined financial statements of the LGU have been prepared in

Note 3 - Summary of significant accounting policies

3.1 Basis of accounting

The combined financial statements are prepared on an accrual basis in

3.2 Revenue recognition

Revenue from non-exchange transactions

Taxes, fees and fines

Transfers from other government entities

Revenues from non-exchange transactions with other government entities are

Revenue from exchange transactions

The LGU recognizes revenue from rendering of services by reference to the

Rental income arising from operating leases on investment properties is

3.3 Property, Plant and Equipment

Depreciation is charged at rates calculated to allocate cost or valuation of the