MUNICIPALITY OF PIODURAN
Pioduran, Albay
AGENCY ACTION PLAN and
STATUS of IMPLEMENTATION
Audit Observations and Recommendations
For the Calendar Year 2013
As of December 31, 2013
Ref
Audit Observations
Audit Recommendations
AAR
2013
page
17
Complete
bank
Reconciliation
Statements (BRS) on
the agency’s ten
current
bank
accounts were not
submitted to the
Auditor for verification
due to the failure of
the
Municipal
Accountant
to
prepare the same as
required in Sec. 74 of
PD
1445
and
Sections 3.2 and 3.4
of COA Circular No.
96-011 dated October
2, 1996, thus, the
correctness of the
reported Cash in
Bank balance as of
We recommend that the
Municipal
Accountant
coordinate
with
the
Depository Bank for the
prompt delivery of the
monthly bank statements
with
the
supporting
documents, but in cases
where the bank statements
are not yet available,
secure snapshot copy of
the bank transactions to
facilitate
the
timely
recognition of the agency’s
bank accounts; prepare
and submit to the Auditor,
for verification, al the
unsubmitted monthly Bank
Reconciliation Statements
for CY 2013 and effect
adjusting/correcting entries,
Action
Plan
Agency Action Plan
Target
Person/Dept. Implementation
Date
Responsible
From
To
Status of
Implementa
tion
Reason for
Partial/Delay/Non
-Implementation,
if applicable
Action
Taken/Action
to be Taken
December 31, 2013
amounting to P
17,216,409.33 could
not be immediately
verified.
AAR
2013
page
20
Cash advances for
travel totaling P
101,300.00
were
granted by the LGU
to 23 teachers who
are
non-LGU
employees
and
without the required
authority to travel
from the DepEd
Regional
Director,
Region V contrary to
Section 4(6) of PD
1445 and Section
3.1.1 of COA Circular
No. 96-004 dated
April 19, 1996, thus
casting doubts on the
validity
of
the
payments made.
if
any,
on
noted
discrepancies/errors
or
other reconciling items
requiring corrections in
order to reflect the correct
balance of the cash
account in the financial
statements; and strictly
comply with the timeline on
the submission of Bank
Reconciliation Statements
to the Auditor.
We
recommend
that
Management require the
concerned teachers to
secure authority to travel
from the DepEd Regional
Director, Region V for their
travels to Mt. Makiling, Los
Baños, Laguna on April 714, 2013 and to Baguio
City on April 9-12, 2013 as
well as certification from
the
DepEd
Division
Office/Regional
Office
Accountant that similar
claims for travel expenses
and registration fees had
not been paid by said
Office/s and submit the
same to the Municipal
Accountant
to
avoid
suspensions
and/or
disallowances in audit; and
stop the practice of
granting cash advances to
AAR
2013
page
21
The Real Property tax
and
Special
Education
Tax
Receivables set up at
the beginning of CY
2013 amounting to P
1,079,139.00 and P
1,079,139.00,
respectively
were
unrealistic since they
were based on mere
estimates and not on
actual
receivables
from said taxes due
to the failure of the
Municipal Treasurer
to
furnish
the
Municipal Accountant
with
a
certified
updated
list
or
summary
of
taxpayers and the
amount
of
real
property tax due and
collectible for the year
as
required
in
Sections 19(b) and
20 of the Manual on
the New Government
Accounting System
non-permanent/non-LGU
employees to protect
government funds against
risk of loss or wastage due
to
unauthorized
expenditures.
We recommended that the
Municipal Treasurer, in
coordination with the
Municipal
Assessor,
prepare and furnish the
Chief Accountant with a
duly certified list showing
the name of the taxpayers
and the amount of real
property tax due and
collectible for the year; and
the Chief Accountant take
up at the beginning of the
year, the Real Property
Tax/Special Education Tax
Receivables
and
the
corresponding
Deferred
Real Property Tax/Special
Education Tax Income
based on the list furnished
by the Municipal Treasurer
as required in Section 19
and 20 of the Manual on
NGAS for LGUs, Vol. I.
Henceforth, discontinue the
practice of setting up said
receivables based on
estimates.
AAR
2013
page
23
for Local Government
Units (LGUs), Volume
I, thus, evaluation of
the
collection
efficiency could not
be made.
The validity of the
reported balances of
the agency’s various
Property, Plant &
Equipment
(PPE)
accounts
as
of
December 31, 2013
totaling
P
60,765,938.30
or
69.33 percent of the
total assets of P
87,645,364.56 could
not be ascertained
due to the continuous
failure of the agency
to conduct physical
inventory
of
its
properties as required
in Section 124 of the
Manual on NGAS for
LGUs, Vol. I, thereby
casting doubts on the
validity
of
the
reported
year-end
account
balances.
Likewise, the agency
did not maintain
Property Cards as
required in Section
114 of the same
We recommended that
Management create an
inventory team, cause the
conduct
of
physical
inventory of the agency’s
properties and require the
inventory team to prepare
and submit the Report of
Physical Count of Property,
Plant and Equipment
(RPCPPE)
in
the
prescribed form as shown
in Annex 49 of the NGAS
Manual for LGUs, Volume
II, not later than January 31
of each year to the Auditor;
instruct the inventory team
to reconcile the RPCPPE
with other property and
accounting records and
any discrepancies between
the physical and book
inventories
must
be
investigated, cleared and
reconciled
immediately;
instruct the inventory team
to
identify/list
those
properties
which
are
obsolete/unserviceable,
submit the report/list to the
AAR
2013
page
26
Manual, thus casting
doubts
on
the
integrity of property
custodianship and the
reliability of balances
as reported in the
year-end
financial
statements.
Accounting Department for
the latter to reclassify them
to the Other Assets
account;
cause
the
disposal
of
obsolete/unserviceable
properties; instruct/require
the
Municipal
Treasurer/Property Officer
to maintain complete and
up-to-date Property Cards
for property, plant and
equipment in accordance
with the form prescribed in
Annex 37 of the NGAS
Manual for LGUs, Volume
II and/or designate a
Property Officer to account
for the receipt and
disposition of the same;
and instruct/require the
Municipal Accountant and
the
Municipal
Treasurer/designated
Property Officer to record
and keep track of all
movements in the PPE and
conduct
periodic
reconciliation
of
the
accounting and property
records.
The agency did not
have an approved
Annual Procurement
Plan (APP) for CY
We recommended that
Management cause the
streamlining
of
all
procurement
2013 due to the
failure
of
the
BAC/BAC Secretariat
to prepare and submit
the same for approval
of the Local Chief
Executive as required
in Sections 7.2 and
7.3.4 of the Revised
Implementing Rules
and Regulations of
RA No. 9184, thus,
verification as to
whether all completed
procurement projects
for CY 2013 were
within the approved
budget of the LGU
could not be made
immediately.
AAR
2013
page
28
Copy of contracts and
the
supporting
documents
on
procurement
of
infrastructure projects
that
were
implemented by LGUPioduran
from
processes/procedures by
lodging all procurement
activities with the Bids and
Awards Committee to
conform with RA No. 9184
and its Revised IRR-A;
require all end-user units to
prepare and submit their
respective PPMPs to the
Budget Officer and the
latter to evaluate the same
for possible inclusion in the
LGUs procurement budget
for the year; and require
the
BAC
Chairman,
through
the
BAC
Secretariat to prepare and
submit
the
Annual
Procurement Plan (APP) of
the agency based from the
submitted PPMPs and
thereafter to prepare and
submit the same every
year as required in Section
7.3.4.of
the
Revised
Implementing Rules and
Regulations, Part A (IRRA) of RA No. 9184.
We recommended that
Management strictly furnish
the Auditor with copy/ies of
all contracts and the
complete
supporting
documents on procurement
projects as required in
Section 3.1.1 and 3.1.2 of
AAR
2013
page
31
January to June 2013
valued
at
P7,378,044.91 were
not furnished the
Auditor as required in
COA Circular No.
2009-001
dated
February 12, 2009,
thus, the required
auditorial
and
technical review of
said contracts was
not undertaken.
Warranty
security
against
structural
defects/failures was
not
posted
by
concerned
contractors from final
acceptance by the
LGU of completed
infrastructure projects
for CY 2013 valued at
P8,666,370.94 due to
the
failure
of
concerned
LGU
officials to enforce
Sections 62.2.3 to
62.2.3.4
of
the
Revised
Implementing Rules
and
Regulations
(IRR), Part A of RA
No. 9184, thus, the
LGU
was
not
adequately protected
COA Circular No. 2009-001
dated Feb. 12, 2009 and
thereafter to strictly comply
with the timeline on the
submission
of
said
contracts to the Auditor.
We recommended that
Management require the
concerned contractors of
the
completed
infrastructure
projects
valued at P8,666,370.94 to
post warranty security as
required in Section 62.2.3
of the Revised IRR-A of RA
No. 9184 in the form and
amount prescribed under
Section 62.2.3.3 thereof;
and refrain from effecting
final payment on completed
and accepted infrastructure
projects that are not
supported with the required
warranty security to avoid
suspension
and/or
disallowance in audit.
AAR
2013
page
32
against the risk that
structural
defects/failures
occurring within the
warranty period shall
be corrected by the
contractor.
The
Reports
of
Checks
Issued/Reports
of
Disbursements
as
well as Reports of
Collections
and
Deposits
together
with
the
paid
disbursement
vouchers/liquidation
reports, receipts and
their
supporting
documents were not
submitted to the
Auditor as required in
Section 100 of PD
1445 and Section
7.2.1.a
of
COA
Circular No. 2009006 dated September
15, 2009 due to the
failure
of
the
Municipal Accountant
to
observe
the
timeline
on
the
submission of the
reports,
thus,
precluding the audit
team from conducting
We recommended that the
Municipal
Accountant
strictly observe and comply
with the prescribed timeline
on the submission of
accounts to the Auditor as
required in Section100 of
PD 1445 and Section
7.2.1.a of COA Circular No.
2009-006 dated September
15, 2009.
AAR
2013
page
33
AAR
2013
page
35
timely audit of the
same.
The agency’s monthly
trial balances and
quarterly
financial
statements
for
Calendar Year 2013
were not submitted to
the Auditor within the
timelines prescribed
in Sections 70 and 73
of the Manual on the
New
Government
Accounting System
(NGAS) for Local
Government Units,
Vol. I, thus precluding
the timely review and
verification of the
correctness
of
accounts’ balances
as of the given
financial statements’
date.
The
municipality
failed to submit the
Gender
and
Development (GAD)
Plan and Budget for
CY 2013 and the
accomplishment
report thereon as of
December 31, 2013,
contrary
to
DILG/DBM
Joint
Memorandum
We recommended that the
Municipal
Accountant
strictly comply with the
timeline on the submission
of the agency’s trial
balances and financial
statements as required in
Sections 70 and 73 of the
Manual on NGAS, for Local
Government Units, Vol. I.
We recommended that
management cause the
submission of the GAD
Plan and Budget for CY
2013 and the GAD
Accomplishment Report as
of December 31, 2013 and
thereafter, to strictly comply
with the preparation and
submission of said reports.
Circular No. 2001-1
and
DBM/NEDA/NCRFW
Joint Circular No.
2004-1,
thus,
evaluation of the
accomplishments
during the year vis-àvis the planned
programs, projects
and activities and the
allocated
budget
could not be made.
AAR
2013
page
36
The Monthly Reports
of Accountability for
Accountable Forms
(RAAF) for CY 2013
and the Consolidated
Report
of
Accountability
for
Accountable Forms
(CRAAF) for the
months of April to
December 31, 2013
were not submitted to
the Auditor by the
individual collecting
officers and Municipal
Treasurer,
respectively,
as
required in Sections
50 and 51 of the
Manual on NGAS for
LGUs, Vol. II, thus,
the correctness of
We recommended that the
Municipal Treasurer require
all
concerned
accountable/collecting
officers to prepare and
submit the Monthly Reports
of
Accountability
for
Accountable
Forms
(Appendix 42) for Calendar
Year 2013, and thereafter,
to regularly and promptly
submit said report as
required in Section 50 of
the Manual on NGAS for
LGUs, Vol. II, and the
Municipal
Treasurer
prepare and submit to the
Auditor the Consolidated
Monthly
Report
of
Accountability
for
Accountable
Forms
(CRAAF) based from the
AAR
2013
page
38
accountable
forms
handled, issued and
the ending balances,
if any, could not be
immediately verified.
Monthly RAAF submitted
by the Collecting Officers
and submit the same to the
Auditor as required in
Section 51 of the Manual
on NGAS for LGUs, Vol. II;
and thereafter, strictly
comply with the timeline on
the submission of the
subject reports.
The Monthly Reports
of Official Travels and
Fuel
Consumption
were
not
being
submitted to the
Auditor as required
under Section V (1) of
COA Circular No. 756 dated Nov. 7, 1975
and COA Circular No.
77-61 dated Sept. 26,
1977 due to the
failure
of
the
personnel-in-charge
to
cause
the
preparation
and
submission of said
reports, thus, the
validity of all travels
undertaken as well as
the reasonableness
of fuel consumption
for the year could not
be
readily
ascertained.
We recommended that
Management
should
require/instruct all Drivers
concerned to prepare and
submit the Monthly Report
of Official Travels and Fuel
Consumption at the end of
each month for each
vehicle and the former to
consolidate and submit the
same to the Auditor as
required under existing
regulations.
AAR
2013
page
49
AAR
2013
page
51
Separate registries
for monitoring the
appropriations,
allotment
and
obligations incurred
on the agency’s Local
Disaster
Risk
Reduction
and
Management Fund
(LDRRMF) for CY
2012
were
not
maintained by the
Budget
Unit
as
required in Section
5.1.4 of COA Circular
No. 2012-002 dated
Sept. 12, 2012, thus
the correctness of
reported balance of
the fund at any given
time could not be
made readily.
Purchase
Orders
(POs) issued were
not
properly
accomplished
as
required in COA
Circular No. 96-010
dated August 15,
1996 due to the
failure
of
the
personnel in-charge
of drawing POs to
indicate the required
basic
information
such as date and
We recommended that the
Budget Officer maintain
separate registries for
monitoring
the
appropriations, allotment
and obligations incurred on
the LDRRMF.
We recommended that the
personnel in-charge of
drawing
POs
strictly
comply with COA Cir. 90010 by indicating in all POs
issued all the required
data/information
as
enumerated
in
said
circular.
Likewise, the
authorized
canvasser/s
should
require
the
concerned suppliers or
their representative/s to
indicate their complete
AAR
2013
page
52
place of delivery as
well as delivery term,
hence,
liquidated
damages may not be
imposed in case of
late delivery to the
disadvantage of the
agency.
Similarly,
the complete name of
the supplier or his
authorized
representative and
the supplier’s date of
receipt of the PO was
not
invariably
indicated,
thus
verifiability of the
authenticity of the
signatures/initials
affixed thereto could
not be made readily.
Payments for the
procurement
of
medicines
totaling
P91,501.17 were not
supported
with
complete documents
as required in Section
11 of RA No. 3720,
Adm. Order No. 103,
series of 2002 and
DOH AO No. 43-A, s.
1999 due to the
failure
of
the
Accounting
Department to check
names in the PO and the
date of receipt of the PO to
facilitate verification and
ensure
the
validity/authenticity of the
signatures appearing in all
POs.
We recommended that the
Municipal
Accountant
closely coordinate with
and secure from the Bids
and Awards Committee the
required documents and
submit the same to the
Auditor to support the
payments made for the
procurement of drugs and
medicines
totaling
P91,501.17. Henceforth,
conduct a thorough review
on the completeness of
supporting documentation
AAR
2013
page
53
the completeness of
supporting
documentation
before
effecting
payments,
hence,
there
is
no
reasonable
assurance
that
medicines procured
were obtained from
authorized sources,
authentic, safe and
effective
for
consumption by the
concerned
constituents of the
municipality.
Index of Payments
(IP) to employees,
suppliers and other
agency
creditors
were not maintained
by the Accounting
Department due to its
failure to strictly
comply with the
requirements
contained in Sec. 36
of the Manual on
NGAS for Local
Government
Units
(LGUs),
Vol.
II,
thereby precluding
verification of the
complete
and
accurate payments
before
effecting
any
payments
on
valid
obligations of the local
government
unit
particularly
on
the
procurement of drugs and
medicines.
We recommended that the
Municipal
Accountant
maintain complete Index of
Payments and to record
therein all payments made
to each supplier and other
agency creditor/s based
from the paid disbursement
vouchers
to
facilitate
verification
of
the
completeness
and
accuracy of payments
made to individual payee/s.
made to each of the
payee/s.
AAR
2013
page
53
AAR
2013
page
The agency does not
have appropriate and
adequate records for
monitoring
the
appropriations,
allotments,
and
obligations incurred
due to the failure of
the Budget Unit to
maintain
the
Registries
of
Appropriations,
Allotments
and
Obligations
for
Capital
Outlay
(RAAOCO),
Maintenance
and
Other
Operating
Expenses (RAOMO),
Personal
Services
(RAAOPS)
and
Financial Expenses
(RAAOFE)
as
required in Section 18
of the Manual on
NGAS for LGUs, Vol.
II and Section 2.2 of
COA Circular No.
2005-002 dated Jan.
31, 2005.
Comprehensive
inventory
of
all
properties amounting
We recommended that the
Budget Officer maintain the
prescribed registries for
monitoring as required in
Section 18 of the Manual
on NGAS for LGUs, Vol. II
and Section 2.2 of COA
Circular No. 2005-002
dated Jan. 31, 2005 and to
record therein the agency’s
appropriations, allotment
and obligations.
We reiterated our previous
recommendation
that
Management,
in
54
to
P
25,128,603.11 was
still not conducted
during the year 2011,
thus preparation and
submission of a
complete
and
consolidated
inventory report was
also
not
made
possible as in the
past years.
coordination with all the
department heads, should
initiate the conduct of
thorough and complete
physical inventory of all
properties and prepare the
required inventory reports
pursuant
to
existing
regulations.
Properties
which may no longer be
serviceable
may
be
disposed by the agency in
accordance with existing
regulations and may drop
them from the books of
accounts.
For
those
missing
properties,
however,
management
should determine the
officials
responsible
therefor
and
initiate
measures to recover them.
Management was still
unable to create an
Inventory Committee
to
conduct
a
comprehensive
inventory
of
all
properties of the
municipality, thus no
physical counts were
conducted during the
year 2009 as in the
previous
years,
contrary to Section
We reiterated our previous
recommendation that the
management,
in
coordination with all the
heads of each department
should initiate the conduct
of a thorough and complete
physical inventory of all
existing properties and
prepare
the
required
inventory
reports
to
establish the validity of the
balances appearing in the
AAR
2013
page
56
156 of COA Circular
no.
92-386,
as
reiterated
under
section 124 of the
Manual on the New
Government
Accounting System.
financial statements and to
facilitate the reconciliation
with the General Ledger
balances pursuant to
existing regulations. This
would also serve as basis
for possible dropping of
inexistent properties in the
books of accounts.
Recorded receivables
amounting
to
P554,616.77
representing carried
over balances of prior
years have remained
outstanding and nonmoving in the books
of accounts for 3
years to over six
years, depriving the
agency of funds that
could have been
used to expand its
program with the
other
prospective
beneficiaries/constitu
ents.
We recommended that
Management review the
collectibility of the nonmoving receivables for
proper disposition. The
Municipal Accountant and
the Municipal Treasurer
should exert efforts to
collect these loans from the
recipients to enable the
LGU expand its program
and provide other basic
services
to
the
constituents.
Similarly, considering that
the nature of the accounts
do not fall under Accounts
Receivable, which should
be used to record the
amount
due
from
customers arising from
services
rendered,
trading/business
transactions or sale of
merchandise or property, it
AAR
2013
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57
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2013
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58
Out of the total
annual
estimated
revenue
of
P
700,000.00 from real
property
taxes
consisting
of
P300,000.00 for the
general fund and
P400,000.00 for the
special
education
fund, the Municipal
Treasurer’s
Office
was able to generate
P608,161.59
and
P621,612.70 during
the years 2009 and
2008, respectively,
showing shortfall in
the collection of taxes
during
the
said
period.
Prior years’ audit
disallowance
amounting to P
280,000.00 remained
unrecorded in the
municipality’s book of
should be reclassified to
Other Receivable, which
should be used to record
the amount due from other
debtors nor falling under
any of the specific
receivable accounts for
proper
account
classification.
We
respectfully
recommended that the
Office of the Municipal
Treasurer should devise a
system to encourage
taxpayers to pay their
obligations to the LGU.
Proper coordination with
barangay officials should
also be initiated to
generate more income in
the succeeding period of
the common benefit of the
municipality, province and
barangays.
We
respectfully
recommended that the
Municipal
Accountant
should record the subject
audit disallowance in the
books of the LGU and
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2013
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59
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2013
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59
accounts despite of
its
finality
and
settlement
thereof
had not yet been
made by the persons
liable therefor to the
disadvantage of the
government.
The requirements in
the payment of some
claims were not
strictly complied with
by the Municipal
Treasurer contrary to
the
pertinent
provision of PD 1445,
thereby resulting to
delayed submission
of
transaction
documents to the
Audit Team and
precluding the latter
to conduct timely
review of the LGUs
financial transactions
to
determine
compliance
with
existing government
rules and regulations.
Unserviceable
properties of the
municipality have not
been reclassified to
Other Assets and
requested
for
disposal as required
settlement thereof should
be enforced by the
Management to recover the
amount spent by the
government.
The Municipal Accountant
and
the
Municipal
Treasurer should see to it
that all the required
documents are complete
and approval of proper
officials are complied with
before payments of claims
are made pursuant to the
abovementioned
provisions.
It is recommended that
appropriate action should
be taken by management
with regard to these
unserviceable properties
considering that the same
could no longer be used in
under
pertinent the operation.
provisions of the
New
Government
Accounting System
(NGAS) Manual and
Government
Accounting
and
Auditing
(GAAM),
thus affected property
accountability
and
custodianship
and
further misstating the
Property, Plant and
Equipment account
as of the year end.
Agency sign-off:
_________________________________
Name and Position of Agency Officer
____________
Date
Note: Status of Implementation may either be (a) Fully Implemented, (b) Ongoing, (c) Not Implemented, (d) Partially Implemented, or (e) Delayed