Solsona Executive Summary 2017

EXECUTIVE SUMMARY
A. INTRODUCTION
Solsona, a third class municipality is located in the eastern part of Ilocos Norte
about 18 kilometers east of the Provincial Capitol with 22 barangays and 22,990
populace as of May 1, 2010.
The municipal government is headed by the very energetic and dedicated

Municipal Mayor Honorable Alexander A. Calucag supported by the equally
responsible Honorable Vice Mayor Joseph E. de Lara, Ten Sangguniang Bayan
Members, and 147 employees broken down as follows: permanent – 56; co-terminus
- 3; plantilla casuals - 5; and job orders – 83.
Furthermore, through the initiative of the Chief Executive and his officials, the
municipality was a recipient of trust funded projects from other National Agencies
namely: Burley project and Assistance to Disadvantaged Municipalities for the
improvement of farm to market roads of various barangays amounting to P 876,258.00
and P 15,252,000.00 respectively, Buttom –Up Budgeting (BUB) Projects for the
construction of irrigation Canal Linings of Barangay Nalasin and continuation of
RHU building of the Municipality and Integrated Community Food Production
totalling P 5,520,700 and Department of Agriculture - Rehabilitation of Aguitap
Diversion Dam amounting to P 8,865,000.00. Also, the LGU received from the DSWD
RF01 the amount of P 5,868,00 for the payment of Social Pension to Indigent Senior
Citizen of various barangays of Solsona, Ilocos Norte.
B. FINANCIAL HIGHLIGHTS
The municipality’s assets, liabilities and residual equity as of December 31, 2017
are presented as follows:
Name of Increase/
2017 2016 Percentage
Account (Decrease)
Assets 326,920,158.81 330,650,672.13 (3,730,513.32) 1.00%
Liabilities 66,823,313.10 90,809,923.13 (23,986,610.03) 26.00 %
Equity 259,586,744.51 239,840,749.00 19,745,995.51 8.00%
There was significant decrease in the liabilities account due to the erroneous
recording of utilized 20% DF and LDRRMF which was recorded as debit to due to
LGU in the financial statements for calendar year 2017.
Increase/
Name of Account 2017 2016
(Decrease)
Income 104,924,217.24 Php92,600,772.52 12,323,444.72
Appropriations 173,074,221.23 118,430,654.91 54,643,566.32
Expenses 80,604,589.17 65,200,884.42 15,403,704.75
It was noted that the total income realized this year of Php104,924,217.24
is higher by Php12,323,444.72, or 13 % as compared last year. This is attributed to the
increase of Share from Internal Revenue Collections of the municipality.
Total appropriations for the year which amounted to Php 173,074,221.23

showed an increase of Php 54,643,566.32 or 46.00 % higher than the previous year’s
appropriations of Php 118,430,654.91 while total expenditures during the current
year’s operations of Php 80,094,487.97 resulted an increase of Php 14,893,603.55 or
23% as compared to the previous year’s total expenditures of Php 65,200,884.42.
As of December 31, 2017, Unexpended Allotment for the Continuing

Appropriations in the General Fund amounted to Php 22,995,663.90.
C. OPERATIONAL HIGHLIGHTS
To accelerate the social and economic development of the municipality for

calendar year 2017, the major accomplishments of the municipality are as follows:
P/P/A Sources of Funds Amount Accomplishments

Improvement of
Farm-to-Market
Roads at Sitio Burley Project
1 845,622.28 100 %
Cabillittan, Brgy.
Nalasin, Solsona,
Ilocos Norte
Improvement of
Assistance to
Farm-to-Market
Disadvantaged 14,678,318.70
2 Roads at Various 100 %
Municipalities
Barangays of the
Municipality
Irrigation Canal
Linings at Sitio
3 Cabillittan, Brgy. 4,351,625.42 100 %
Nalasin, Solsona,
Ilocos Norte
Continuation of the LGSF Projects 2,025,228.56
4 100 %
RHU Building
Concreting of Farm-
to-Market Roads
RA 7171
5 Brgy. Manalpac, 3,877,471.75 100 %
Solsona, Ilocos
Norte
Extension of
6 covered tricycle General Fund 480,149.80 100 %
shed at Brgy. Juan,
Solsona, Ilocos
Norte
Concreting of Farm
to Market MRoads
at Barangay
7 General Fund 975,591.09 100 %
Darasdas and
Talugtog, Solsona,
Ilocos
Concreting of
3,877,471.75
8 various barangay RA 7171 100 %
roads
Improvement of
CCA-DRR Resilient RA Nos. 10147
9 2,295,916.00 100 %
Farm-to-Market & 10155
Roads
Rehabilitaion of DA-Trust Fund/
10 10,502,022.67 100 %
Diversion Dam GF
D. SCOPE OF AUDIT
A financial and compliance audit was conducted on the accounts and operations
of the Municipal Government of Solsona for calendar year 2017 based on our audit
thrusts for the year which are: complete submission of Accounts, Cash and Cash
accounts, Unliquidated Cash Advances, Property Audit, Utilization of IRA, 20 %
Development funds, Fund Transfers, Buttom-Up Budgeting, Core Local Road Funds
(From DILG), Gender and Development, Local Disaster Risk Reduction and
Management Fund (LDRRMF), RA 7171 and Solid Waste
Management/Environmental compliance. The audit was conducted to ascertain the
propriety of financial transactions and the accuracy of financial records and reports
and compliance of the agency with prescribed rules and regulations. It was also made
to ascertain whether the programs as envisioned were attained in economical, efficient
and effective manner.
E. STATE AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS
The auditor rendered a qualified opinion on the fairness of presentation of the

financial statements of the municipality due to the following:
1. Land account amounting to P 3,371,170.45 was not covered by Certificate of Title

and not supported with documents thus the existence, accuracy and validity of the
land ownership could not be ascertained.
2. The accuracy and validity of the PPE account balances totaling P 187,577,205.88
could not be assured due to difference of P 124,268,928.11 between the Inventory
Report of the GSO and the Accounting records and the existence of unaccounted
balances of PPE accounts in the books as well as in the inventory report.
3. Cost of completed projects charged under the 20 % development fund totaling
P7,719,102.26 were inappropriately charged to expense, under the Other
Maintenance and Other Expenses account, thus the expense account was
overstated by P7,719,102.26 and the assets account was understated by the same
amount.
F. SUMMARY OF SIGNIFICANT OBSERVATIONS AND

RECOMMENDATIONS
Favorable Observations:
1. The municipal government religiously complied and adhered to tax laws. For
salaries and wages and from suppliers for the purchased of goods and services the
agency withheld the amount of Php 10,078,535.94 and Php 8,615,077.50
respectively and remitted the amount of Php 17,230,155.00 to BIR, leaving a
balance of Php 1,463,458.44 as of December 31, 2017.
2. Management has complied with the provisions of Joint Memorandum Circular

No. 2016-01 particularly on the procedures to be followed in the formulation,
development, submission, implementation, monitoring and evaluation including
accounting of results of the agency annual GAD Plans and Budgets and GAD
accomplishments Reports to mainstream gender perspectives in their policies,
programs and projects.
Likewise, the management was able to coordinate with the DILG as the lead
agency in the review, endorsement and monitoring of submission of GAD Plans
and Budget and GAD Accomplishment reports of local government units to
ensure that the difference concerns of women and men are addressed equally and
equitably in their PAPs.
Similarly, the programs and projects/activities under GAD plan and Senior
Citizen have been favorably accomplished and the objectives have been well
attained by the intended beneficiaries.
However, some transactions which need to be corrected or improved are

enumerated in the herein audit observations with its recommendations as follows:
1. Land account amounting to P 3,371,170.45 was not covered by Certificate of Title

and not supported with documents thus the existence, accuracy and validity of the
land ownership could not be ascertained.
We recommended the management to appropriate funds for the payment of

corresponding taxes and other fees so that issuance of titles would be facilitated.
2. The accuracy and validity of the PPE account balances totaling P 187,577,205.88
could not be assured due to difference of P 124,268,928.11 between the Inventory
Report of the GSO and the Accounting records and the existence of unaccounted
balances of PPE accounts in the books as well as in the inventory report.
We recommended that the management should conduct complete physical count on

the properties of the municipality and reconcile any discrepancies between the
property and accounting records.
Assign additional personnel in the GSO division in order to satisfactorily do their

duties and responsibilities as property/supply custodian of the municipality.
3. Cost of completed projects charged under the 20 % development fund totaling P

7,719,102.26 were inappropriately charged to expense, under the Other
Maintenance and Other Expenses account Contrary to COA Circular 2015-009,
thereby making the financial statements of the municipality unreliable.
We recommended the municipal accountant to make the necessary adjustments on

the erroneous recording of cost of projects and equipment charged under the 20 %
development fund, grants received from NGAS and the share from Tobacco Excise
Tax in order to present fairly the financial statements of the LGU. Adhere to the
provisions of COA Circular 2015-009 in the proper/correct use of accounts.
G. SUMMARY OF TOTAL SUSPENSIONS, DISALLOWANCES AND CHARGES

AS OF DECEMBER 31, 2017.
In compliance with COA Circular No. 2009-006 dated September 15, 2009
which prescribes the Rules and Regulations on Settlement of Accounts, there were no
audit suspensions and charges issued during the year.
The SASDC of the municipality has an ending balance of P 2,192,740.53 as of

December 31, 2017, this pertains to disallowed Productivity Enhancement Incentive
(PEI) of P 1,870,240.53 for Calendar Year 2014 which is on appeal at the Commission
on Audit Proper and disallowed RATA of the elective officers amounting to P
408,000.00. No disallowances was issued during the year.
H. STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT

RECOMMENDATIONS
Out of the 22 audit recommendations embodied in the 2016, 2015 and 2014
Annual Audit Reports, nine were implemented, seven were partially implemented and
six were not implemented.

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EXECUTIVE SUMMARY

The municipal government is headed by the very energetic and dedicated

Total appropriations for the year which amounted to Php 173,074,221.23

As of December 31, 2017, Unexpended Allotment for the Continuing

To accelerate the social and economic development of the municipality for

P/P/A Sources of Funds Amount Accomplishments

E. STATE AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

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

1. Land account amounting to P 3,371,170.45 was not covered by Certificate of Title

F. SUMMARY OF SIGNIFICANT OBSERVATIONS AND

2. Management has complied with the provisions of Joint Memorandum Circular

However, some transactions which need to be corrected or improved are

1. Land account amounting to P 3,371,170.45 was not covered by Certificate of Title

We recommended the management to appropriate funds for the payment of

We recommended that the management should conduct complete physical count on

Assign additional personnel in the GSO division in order to satisfactorily do their

3. Cost of completed projects charged under the 20 % development fund totaling P

We recommended the municipal accountant to make the necessary adjustments on

G. SUMMARY OF TOTAL SUSPENSIONS, DISALLOWANCES AND CHARGES

The SASDC of the municipality has an ending balance of P 2,192,740.53 as of

H. STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT

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