EXECUTIVE SUMMARY
Introduction
The Silang Water District (SWD) was formed on March 3, 1980 through the
Sangguniang Bayan Resolution No. 060-79. It was subsequently issued its Conditional
Certificate of Conformance No. 115 by the Local Water Utilities Administration (LWUA)
on March 17, 1980. The SWD is a locally competitive water utility; a major provider of
adequate, safe, potable and affordable water in the Municipality of Silang. It holds office
at M. H. Del Pilar corner E. Montoya Street, Silang, Cavite.
As of December 31, 2020, the SWD has 44,830 total service connections, broken down
as follows:
Total Active
Total Inactive
Total Service Connections
43,590
_1,240
44,830
On December 19, 2018, the SWD has entered into a Joint Venture Agreement (JVA)for
the Financing, Development, Rehabilitation, Refurbishment, Expansion, Improvement,
Operation and Maintenance of the Water Supply System of the SWD with the
Primewater Infrastructure Corp. (PRIMEWATER) with a term of 25 years. The JVA
formally commenced on March 1, 2019.
As of December 31, 2020, the SWD- Control Monitoring Unit (CMU) comprises 18
permanent employees, headed by Mr. Bonifacio B. Dela Cruz, General Manager, and
governed by five members of the Board of Directors, namely:
Name
Michael P. Asuncion
Josefina M. Jimenez
Phoebe M. Virata
Dra. Merlinda S. Sualibios
Cynthia M. Ablan
Designation
Chairman
Secretary
Member
Member
Member
Sector
Business
Education
Civic
Professional
Women
Financial Highlights
The SWD’s financial condition and results of operations for calendar year (CY) 2020,
with comparative figures for CY 2019, are summarized below and shown in details in the
attached audited financial statements:
CY 2020
CY 2019
Financial Position:
Total Assets
P522,226,158.68
Total Liabilities
70,753,975.14
Equity
451,472,183.54
P512,976,593.51
81,503,865.64
431,472,727.87
i
Increase
(Decrease)
P9,249,565.17
(10,749,890.50)
19,999,455.67
Results of Operation:
Total Income
P 45,114,862.83
Total Expenses
21,117,122.74
Net Income
23,997,740.09
P 115,088,644.70
79,836,910.04
35,251,734.66
(P69,973,781.87)
(58,719,787.30)
(11,253,994.57)
Scope of Audit
Financial and compliance audits were conducted on the accounts and operations of the
SWD for CY 2020 to ascertain the propriety of its financial transactions and operations
and compliance with the prescribed government rules and regulations. The audit was
aimed to ascertain the fairness and reliability of the SWD’s financial statements.
The documents/information/justification to support the following: (a) the total Joint
Venture (JV) project cost to be accomplished amounting to P5,085,165,000.00, projects
turned over which were completed and paid by the PRIMEWATER and projects
implemented by the same amounting to P44,575,462.32 and P40,170,778.77,
respectively; (b) the annual JV Shares ranging from P22,000,000.00 to P26,000,000.00;
(c) annual usufruct payments of P12,000,000.00; (d) the SWD’s total equity contribution
of P47,058,834.67, which is the present value of its annual cash contribution amounting
to P6,000,000.00, using a discount rate of 12 percent for a period of 25 years; and (e)
payment of retirement pay or financial assistance to the retired SWD’s employees
amounting to P82,000,000.00; and (f) documents showing the SWD’s consultation with
the concessionaires/consumers in connection with the JVA entered into by the SWD and
the PRIMEWATER were not presented to the Audit Team for post-audit evaluation
despite the prior year’s audit recommendations and written request made by the latter.
Audit Opinion on the Financial Statements
The Auditor did not express an opinion on the accompanying financial statements of the
SWD for the year ended December 31, 2020, due to the result of the review of the status
of the implementation of JVA for the Financing, Development, Rehabilitation,
Refurbishment, Expansion, Improvement, Operation and Maintenance of the Water
Supply Systementered into by and between the SWD and the PRIMEWATER which
disclosed the following:
a. The SWD was still unable to comply with the prior year’s audit recommendations to
submit the required documents/information/justification to support: (a) the total JV
project cost to be accomplished amounting to P5,085,165,000.00, projects turned
over which were completed and paid by the PRIMEWATER and projects
implemented by the latter amounting to P44,575,462.32 and P40,170,778.77,
respectively; (b) the annual JV Shares ranging from P22,000,000.00 to
P26,000,000.00; (c) annual usufruct payments of P12,000,000.00; (d) the SWD’s
total equity contribution of P47,058,834.67, which is the present value, using a
discount rate of 12 percent of the SWD’s annual cash contribution amounting to
P6,000,000.00 for a period of 25 years; (e) payment of retirement pay or financial
assistance to the retired SWD’s employees amounting to P82,000,000.00; and (f)
documents showing the SWD’s consultation with the concessionaires/consumers in
connection with the JVA, in violation of Sections 122 and 127 of Presidential Decree
(PD) No. 1445;
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b. The validity, completeness and correctness of the SWD’s Investment in JV and
Government Equity accounts still could not be verified due to the following: (i) nondisclosure in the Notes to Financial Statements of the transactions and outstanding
balances acquired from the related party relationship as a result of the JVA entered
into by the SWD, and the PRIMEWATER with a total project cost of
P5,085,165,000.00 and the assumption of SWD’s outstanding loan balance to the
Development Bank of the Philippines (DBP) amounting to P77,930,905.94; (ii) nonrecording of the projects turned over which were completed and paid by the
PRIMEWATER and projects implemented by the same amounting to P44,575,462.32
and P40,170,778.77, respectively, and the 12 projects implemented by the
PRIMEWATER with undetermined value for CYs 2019 and 2020; and (iii) nonrecording of the advance payment of retirement gratuity or financial assistance of the
SWD’s retired employees totaling P82,000,000.00. It is not proper then to require
the SWD to pay for the unrecouped investment of the PRIMEWATER without
proper review, evaluation and monitoring of the PRIMEWATER’s investment.
c. The determination of the value of the SWD’s Property, Plant and Equipment (PPE)
with net book value of P254,728,515.44 was not subjected to a third party
independent valuation, contrary to Sections 6.2 and 2.9.1 of the 2013 Revised NEDA
Guidelines and Procedures for Entering into Joint Venture Agreement Between
Government and Private Entities (2013 Revised NEDA Guidelines);
Likewise, the Audit Team draws attention to the uncertainties related to the outcome of
the JVA entered by the SWD due to the significant deviations in the presentation of
accounts in the financial statements because of the aforementioned non-disclosure and
non-recognition of the JVA transactions.
For the afore-cited deficiencies which caused the issuance of a disclaimer of opinion, we
reiterated our prior year’s audit recommendations that Management:
a. submit the noted lacking documents within 15 working days upon receipt hereof, in
compliance with Section 122 of PD No. 1445, and to satisfactorily explain why they
should not be sanctioned under Section 127 of PD No. 1445 for failure to comply
with the aforementioned provisions, and avoid the issuance of Notice of Suspension
in accordance with the Revised Rules and Regulations in the Settlement of Accounts
(RRSA);
b. require the Department Manager - Finance to properly disclose in the Notes to
Financial Statements the related party relationship acquired from the JVA entered
into by the SWD and the PRIMEWATER with a total project cost of
P5,085,165,000.00; and properly recognize in the books the CIP projects turned over
which were completed and paid by the PRIMEWATER and projects implemented by
the same amounting to P44,575,462.32 and P40,170,778.77, respectively, including
those 12 projects with undetermined value for CYs 2019 and 2020, the assumption
of the SWD’s outstanding loan balance to the Development Bank of the Philippines
(DBP) amounting to P77,930,905.94, and of the advance payment of retirement
claims of the SWD’s retired employees totaling P82,000,000.00 as part of the
PRIMEWATER’s investment in the JV Project duly supported with the required
documents;
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c. apply for a dispute, as provided in Section 17 of the JVA in connection with the
improper valuation of the SWD’s assets, and subject the said assets to a third party
independent valuation, and make necessary adjustments on the SWD’s contribution
based on the proper valuation and correct computation of the PPE’s turned over; and
d. apply for a dispute, as provided in Section 17 of the JVA in connection with the
following deficiencies noted in the said contract:
1. No proper disclosure as to the basis and computation of the SWD’s annual cash
contribution of P6,000,000.00.
2. Payment of unrecovered amount of the Appropriate Project Return (APR) by the
SWD in the event that the PRIMEWATER has not fully recovered its investment
costs at the expiration date.
Summary of Other Significant Observations and Recommendations
Presented below is a summary of other significant audit observations and
recommendations which are discussed in detail in Part II of the Report.
1. Review of the status of the JVA entered into by and between the SWD and the
PRIMEWATER disclosed the following:
a. The fund to support the project for the whole duration of the JV was still not
established/deposited in a special bank account under dual control, contrary to
Section 4(h), Annex A of the 2013 Revised National Economic Development
Authority (NEDA) Guidelines and Procedures for Entering into JVA between
Government and Private Entities;
b. The JV Project does not involve a new concept or technology, contrary to Section
10.1 of the Revised Implementing Rules and Regulations (IRR) of Republic Act
(RA) No. 6957, “An Act Authorizing the Financing, Construction, Operation and
Maintenance of Infrastructure Projects by the Private Sector and for Other
Purposes, as amended by RA No. 7718. Thus, casting doubt on the eligibility of
the acceptance of the Unsolicited Proposal of the PRIMEWATER and the
necessity of entering into a JV on the part of the SWD; and
c. The agreed tariff rates increase of up to 110.20 percent from year 1 to year 16
were not provided with an evaluation or study made by the SWD in order to
protect the concessionaires and to determine that the increases are necessary
and reasonable.
We recommended that Management:
a) require the PRIMEWATER to comply with the provision that the fund to support
the project for the whole duration of the JV should be established/deposited in a
special bank account under dual control as required under Section 4(h), Annex A
of the 2013 Revised NEDA Guidelines and Procedures for Entering into JVA
between Government and Private Entities;
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b) cause the submission of a written explanation and justification by the members of
the SWD’s Board of Directors (BODs) and of the Joint Venture Selection
Committee (JVSC) for the acceptance of the JV proposal despite the absence of
new concept or technology, in accordance with Section 10.1 of the Revised IRR
of RA No. 6957 within 15 working days upon receipt hereof; and
c) apply for a dispute, as provided in Section 17 of the JVA in connection with the
proposed tariff increase of up to 110.20 percent without proper evaluation of the
necessity and reasonableness thereof.
2. Review of the status of implementation of the JVA entered into by and between the
SWD and the PRIMEWATER disclosed the following:
a. The monitoring of the implementation of the PRIMEWATER’s obligation in the
JVA was still not effectively carried out by the SWD due to lack of information, or
data on the manner and date the PRIMEWATER was able to accomplish the
proposed targets and programs for CY 2020 and the actual costs incurred for the
same, contrary to Section 2.7.2(vi) of the JVA.
b. The authority to inspect the SWD and the PRIMEWATER’s facilities was not
exercised by the SWD - CMU, in violation of Section 2.7.2(iii) of the JVA, thus the
present condition of the assets was not verified.
c. The Monthly Data Sheets (MDS) and Financial Statements (FS) for CYs 2019
and 2020 with complete information were not submitted by the PRIMEWATER to
the SWD, contrary to Sections 6.5.2 and 6.5.3 of the JVA, thus creating doubt on
the reported balances by the PRIMEWATER.
d. The SWD failed to submit an annual report on the status of implementation of
JVA, as required by the Department of Finance (DOF) and Government
Commission for Government-Owned and Controlled Corporations (GOCCs)
(GCG) within the deadline set, contrary to Section 8 of the 2013 Revised NEDA
Guidelines and Procedures for Entering into JVA, hence monitoring of the JVA
implementation by DOF and GCG was not carried out on time.
e. The Non-Revenue Water (NRW) equivalent to 33.55 percent was incurred for CY
2020, exceeding the prescribed rate of 20 percent under Local Water Utilities
Administration (LWUA) Resolution No. 444, s. of 2009 dated September 15,
2009, resulting in an estimated water loss amounting to P55,728,388.66 and
non-attainment of the JVA’s objective of reducing distribution losses.
f.
The renewed Performance Bond posted by the PRIMEWATER under Prudential
Guarantee and Assurance Inc. Policy No. BD-G13A-HOM-0000397 amounting to
P21,601,169.00 still does not correspond to the required 10 percent of the
PRIMEWATER’s contribution to the JV activity in the amount of P5.085 billion,
contrary to Sections 3 and 4, Paragraph VIII, Annex A of the Revised NEDA
Guidelines and Procedures for Entering into Joint Venture between Government
and Private Entities.
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We recommended that Management:
a) submit the necessary documents within 15 working days upon receipt hereof,
such as detailed plans and timeline supported with the name of the project, exact
location, actual cost incurred, design and technical specifications, prudent utility
practice, and a project milestone schedule showing the manner and date the
PRIMEWATER accomplished the targeted projects/programs for CYs 2019 and
2020, for further evaluation of the Audit Team;
b) regularly conduct inspection of all the SWD and the PRIMEWATER’s contributed
facilities to monitor the latter’s compliance with the imposed measures and Key
Performance Indicators (KPIs) of the SWD for the safekeeping of facilities;
c) require the PRIMEWATER to cause the submission of MDS and FS for CYs 2019
and 2020 with complete financial information, along with the supporting
documents, and comply within the deadline set, which is not later than the 15th of
May of the succeeding year;
d) submit the required JVA Annual Report with the DOF and GCG within the
deadline set;
e) coordinate with the PRIMEWATER to identify the cause/s on the incurrence of
NRW, and facilitate implementation of effective measures to continuously
minimize the NRW rate to acceptable international level; and
f)
require the PRIMEWATER to submit a performance bond which is equivalent to
ten percent of its contribution.
3. The accuracy and reliability of Accounts Receivable (AR) - Customers (Gross) with a
balance of P2,834,626.30 as of December 31, 2020, are doubtful due to the
following:
a. The unreconciled difference of P28,751.53, between the balances per General
Ledger (GL) and Subsidiary Ledger (SL) as against the AR Aging Schedule
amounting to P2,805,874.77, contrary to Sections 111 and 121 of PD No. 1445,
otherwise known as the Government Auditing Code of the Philippines.
b. The Allowance for Impairment Loss - AR was merely based on the total inactive
concessionaires as of March 31, 2019, amounting to P1,852,606.25 and not
based on the Aging Schedule of the total AR of P2,805,874.77 prepared by the
Commercial Department as of December 31, 2020, hence the recorded
Allowance for Impairment - AR and the corresponding expense account was
understated by P114,392.22.
We reiterated our prior year’s audit recommendation that the General Manager:
a) instruct the concerned personnel in-charge in maintaining AR - Customer GL and
AR Aging Schedule to reconcile the unaccounted variance of P28,751.53, and
thereafter, ensure that AR reported in the GL are duly reconciled with the reports
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of the Customer Accounts Division to avoid errors on the reported balances in
the SWD’s financial statements; and
b) instruct the Corporate Budget Analyst B to re-compute the Allowance for
Impairment based on the evaluation conducted on the AR - Customer based on
the Aging of AR as of December 31, 2020, and make the corresponding
adjusting entry.
4. The accuracy and reliability of Inventories account with a balance of P10,868,112.44
as of December 31, 2020, are doubtful due to the following:
a. The internal control measures over the Inventories of the SWD was not in place,
resulting in unreconciled variances amounting to P5,559,342.43 between the GL
balance presented in the financial statements and Inventory Report prepared by
the Property Officer, thus rendering the accuracy and reliability of the Inventory
account totaling P10,868,112.44 as of December 31, 2020, doubtful. This is
contrary to Sections 111(2), 123 and 124 of PD No. 1445.
b. The Inventories account reported in the financial statements totaling
P10,868,112.44 could not be ascertained due to non-maintenance of Supplies
Ledger Cards (SLCs) and non-updating of Stock Cards (SC), contrary to Section
17 of the Government Accounting Manual (GAM), Volume I, thus rendering the
account balance unreliable and affecting its fair presentation in the financial
statements.
c. The SWD’s Inventory Report did not conform with the prescribed format of the
Report on Physical Count of Inventories (RPCI) under Section 17(i) of GAM,
Volume, I and Appendix 66 of the same Manual, Volume II.
We recommended that the General Manager instruct the:
1. Finance Department Manager to instruct the Senior Accounting Processor to:
i. coordinate with the Property Officers to reconcile and trace the unreconciled
variances amounting to P5,385,466.20 for the Materials Inventory, and make
adjustments after thorough analysis of the account, if necessary;
ii. request from the Administrative and General Services Division (AGSD) the
list of Chemical and Filtering Supplies issued to the PRIMEWATER, and
make proper accounting thereof; and
iii. prepare SLC as basis for the recording of the Inventories of the SWD, and
regularly reconcile with the Property Officers’ SC to ensure accuracy and
reliability of reported inventory balance in the financial statements.
2. AGSD to instruct the Property Officers to:
i. maintain updated SCs for all inventories in stock and regularly reconcile with
the Accounting’s SLCs;
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ii. prepare the RPCI in the prescribed format under Appendix 66 of GAM,
Volume II; and
iii. conduct investigation for any shortages/overages noted in the RPCI, and
prepare a report on the result of the investigation.
5. The purchased goods and supplies totaling P272,509.25 were accounted as outright
expenses upon receipt instead of appropriately recording these as inventories, and
expenses only upon issuance to end-users, thus understating the assets and net
income in CY 2020. This is contrary to Section 112 of PD No. 1445 and Philippine
Accounting Standards (PAS) 1.
We reiterated our previous year’s audit recommendations that the Finance Services
Department Manager:
a) review accounting entries made for the purchase of goods in CY 2020 totaling
P272,509.25, and make adjustments on their records to recognize items such as
PPEs, Intangible Assets and Inventories/Semi-expendable items not yet issued
to end-users that were erroneously expensed in the year to the appropriate asset
account, and depreciate such PPEs accordingly; and
b) make sure that initial accounting entries made are thoroughly checked and
verified before recording in the books of accounts to ensure fair presentation of
accounts in the financial statements.
6. The parcels of land with total area of 16,221.80 square meters valued at
P45,591,950.00 or 85 percent of the total land account of the SWD amounting to
P53,553,963.10 as of December 31, 2020, were still not covered by Transfer
Certificates of Title (TCTs) under its name, contrary to Sections 39(2) and 63 of PD
No. 1445 and Item 74 of PAS 16, thus, posing risk of third-party claims and casting
doubt on the validity of ownership over the said parcels of land. Likewise, four
parcels of purchased and donated lands valued at P2,648,000.00 with TCTs in the
name of the SWD remained unrecorded in the books of accounts at year end,
thereby, understating the PPE account presented in the Statement of Financial
Position (SFPo).
We reiterated our previous year’s audit recommendation that Management instruct
the:
a) AGSD Manager to:
i. draw a timeline and set desirable target for completion of the processing of
land titles and record accomplishments thereon;
ii. exert extra effort to hasten the completion of the necessary documents to
facilitate the registration/transfer of titles of the land in favor of the SWD to
avoid third party claims; and
iii. make written request from the Provincial Appraisal Committee for the
recommended appraised value of the said properties at the time of donation
viii
or secure the zonal value of all the donated lots from the Bureau of Internal
Revenue (BIR), to be used as basis in the booking up in the books of the
SWD;
b) Corporate Budget Officer B to:
i. trace the acquisition of unrecorded lands amounting to P2,645,000.00,
especially those acquired through purchase/sale to determine entries made in
the books upon payment of said lands. Consequently, prepare Journal Entry
Vouchers (JEV) after thorough analysis of the transactions and make
adjustments thereof to record the lands in the books;
ii. immediately recognize in the books upon determining the appraised value at
the time of donation requested from the Provincial Appraisal Committee or
the zonal value from the BIR the donated lots to the SWD; and
iii. ensure that purchased and donated lands to the SWD are supported with
sufficient documents as proof of their ownership and that these are recorded
in the books of accounts to fairly present the Land account in the SFPo.
7. The accuracy, reliability and validity of the depreciable PPE with a net book value
amounting to P217,141,784.38 as of December 31, 2020, could not be fully
ascertained because almost all of the PPEs were not subjected to depreciation after
the commencement of the JVA with the PRIMEWATER, contrary to Section121(2) of
PD No. 1445 and Paragraphs 43 and 48 of PAS 16. Thereby, understating the
expense account and overstating the net asset and net income of the SWD at year
end.
We reiterated our previous year’s audit recommendations that Management instruct
the Finance Services Department Manager to:
a) compute the depreciation expenses of all depreciable PPE, including PPEs used
by the PRIMEWATER, which were not recognized after the commencement of
the JVA, and make adjustments in the books of accounts to recognize
depreciation expenses and fairly present the PPE account in the financial
statements; and
b) ensure that depreciations for all depreciable PPEs are recognized annually and
properly record as depreciation expenses on the year it was incurred, in
accordance with the mentioned rules and regulations.
8. Semi-expendable items totaling P9,006,564.97 were still recorded under the PPE
account as of December 31, 2020, contrary toCommission on Audit (COA) Circular
No. 2016-006 dated December 29, 2016, thus affecting the accuracy of PPE and
Expense/Retained Earnings accounts at year end.
We reiterated our prior year’s audit recommendation that the General Manager:
a) instruct the Finance Services Department Manager to prioritize the
reclassification of semi-expandable items recorded under the PPE account
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amounting to P9,006,564.97 into corresponding Semi-expendable expenses or
adjustment to retained earnings account to fairly present the PPE balance at year
end; and
b) direct the Property Officer to issue Inventory Custodian Slip (ICS) to the end-user
of Semi-expendable Property to establish accountability over them and for proper
control and monitoring of the agency’s assets, in compliance with Section 5.4.3
of COA Circular No. 2016-006.
9. The Construction in Progress (CIP) account amounting to P94,533,103.37 as of
December 31, 2020, includes completed projects totaling P52,698,372.94 that were
not reclassified to Buildings and Other Structures and Infrastructure Assets accounts
at year end, thus affecting the fair presentation of the accounts in the SFPo. This is
contrary to Paragraphs 15 of PAS No. 1 and Revised Chart of Accounts (RCA) for
Government Corporations (GCs) prescribed for use by COA Circular Nos. 2015-010
and 2020-002 dated December 1, 2015 and January 28, 2020, respectively.
We recommended that the General Manager instruct the:
a) Construction and Maintenance Division Manager to prepare and submit to the
Accounting Division the Certificate of Acceptance and Completion and other
necessary reports of all completed projects lodged in the CIP account;
b) Finance Services Department Manager to:
i. prepare journal vouchers to recognize all projects after submission of
Certificate of Completion and Acceptance and other necessary reports, under
the CIP account to the appropriate PPE account upon completion, and
recognize the corresponding accumulated depreciation and depreciation
expense; and
ii. coordinate with the Construction and Maintenance Division Manager to verify
ongoing projects of the SWD at year end to fairly present the CIP account in
the financial statements.
10. The SWD’s Water Supply System with carrying amount of P170,158,682.05 was not
insured with the Government Service Insurance System (GSIS), contrary to Section
1 of Administrative Order (AO) No. 33, thus depriving the SWD of adequate and
reliable protection against any damage to, or loss of its properties and may cause the
risk of non-recovery of asset values if man-made or fortuitous events occurred.
We recommended that the General Manager make sure that all insurable properties
of the SWD are insured with the GSIS, pursuant to Section 1 of AO No. 33.
11. Regular, recurring and non-petty expenses totaling P79,097.06 for CY 2020 were
charged to Petty Cash Fund (PCF), contrary to Paragraph 4.3.2 of COA Circular No.
97-002, thereby defeats the purpose for which the fund was created. Moreover,
disbursements out of such fund were not supported with complete documentation,
contrary to Section 4(6) of PD No. 1445 and COA Circular No. 2012-001 dated June
14, 2012, and thus validity of the claims cannot be ascertained.
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We recommended that Management:
a) submit the necessary documentary requirements to support the payments out of
the PCF such as Purchase Request, Certificate of Inspection and Acceptance
and canvass from at least three suppliers for further evaluation of the Audit Team
within 15 working days upon receipt hereof;
b) refrain from charging to the PCF the recurring and regular expenses, instead,
disbursement should be through cash advance or reimbursement to the
concerned payees;
c) instruct the Petty Cash Custodian to ensure that only payments in small amounts
be made through the PCF, in accordance with the provision of COA Circular No.
97-002 dated February 10, 1997; and
d) ensure that payments out of PCF are properly supported with complete
documentary requirements such as Purchase Request and Certificate of
Inspection and Acceptance.
12. The grant and utilization of cash advances (CAs) by the SWD is contrary to the
provisions of COA Circular Nos. 97-002 and 2012-001, and Sections4 and 89 of PD
No. 1445, due to the following:
a. CAs amounting to P145,500.00 granted to several officers and employees,
remained unliquidated as of December 31, 2020, contrary to the provisions of
COA Circular No. 97-002 dated February 10, 1997 and Section 89 of PD No.
1445, resulting in the understatement of expenses and overstatement of both
other receivables and income for the year ended.
b. Some employees were issued additional CAs even though their previous CAs
were not yet liquidated, in violation of the provisions of Section 89 of PD No.
1445 and Section 4.1.2 of COA Circular No. 97-002 dated February 10, 1997.
c. CAs for traveling expenses, monthly mobile bills and different activities
amounting to P269,150.00 were not supported with necessary documents,
contrary to Section 4(6) of PD No. 1445 and COA Circular No. 2012-001, thus
validity of the claim is not established, and exposing government funds to risk of
misuse.
We recommended that Management:
a) demand the immediate liquidation of outstanding CAs as soon as the purposes
for which these were granted have been served;
b) require the Accountant to ensure that CAs are fully liquidated at year end, in
compliance with Section 5.8 of COA Circular No. 97-002, to properly recognize
all expenses in the year these were incurred;
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c) instruct the Accountant to strictly monitor the issuance of CAs to employees to
facilitate the timely liquidation and to avoid grant of additional CAs to those with
unsettled CAs;
d) require certification from the Accountant that the employee requesting CA has no
unliquidated CA;
e) require the Accountant to make sure that all CAs are supported with complete
documents to support the claims; and
f)
direct the concerned personnel to submit the necessary documents to support
the CAs granted amounting to P269,150.00 such as Travel Orders, Itinerary of
Travel, Monthly Billing or Statement of Account, Budgetary Requirement,
Program of Activities, and Abstract of Canvass and Request for Quotation to
avoid the issuance of Notice of Suspension.
13. The SWD has not established or set up a Gender and Development (GAD) database
to serve as basis for gender-responsive planning, programming and policy
formulation as required under Section 37(D), Rule VI of the IRR of RA No. 9710 or
the Magna Carta of Women.
We recommended that Management require its GAD Focal Point System to:
a) institutionalize the GAD database with adequate and systematically gathered
sex-disaggregated data which will provide the bases for gender analysis,
planning, programming and policy formulation; and
b) undertake gender analysis to identify and confirm existing gender issues, and
ensure that the programs, projects and activities are responsive to the said
issues and are appropriate based on the parameters set under Section 37(D),
Rule VI of the IRR of RA No. 9710 or the Magna Carta of Women.
14. The SWD failed to provide in its corporate annual budget, funds of at least five
percent for GAD programs, projects and activities (PAPs), resulting in a deficit
amounting to P1,231,999.99 in CY 2020, contrary to Item 6.1 of Philippine
Commission on Women-National Economic and Development Authority-Department
of Budget and Management (PCW-NEDA-DBM)Joint Circular (JC) No. 2012-01.
We recommended that the General Manager instruct the designated Budget Officer
to allocate sufficient GAD budget based on the approved Corporate Operating
Budget(COB) during the GAD planning and budgeting phase, in accordance with
PCW-NEDA-DBM JC No. 2012-01, to pursue women’s empowerment and gender
equality.
15. The amount appropriated for GAD PAPs for CY 2020 was not fully utilized, leaving
an unexpended balance of P3,276,134.90 at year-end. This is contrary to PCWNEDA-DBM JC No. 2012-01, thus defeating the intent of the program to pursue
women empowerment and gender equality.
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We recommended that Management maximize the utilization of the GAD funds
through the implementation of GAD-related programs and projects as planned, in
order to attain the objective for which funds were provided.
16. The amount appropriated for GAD programs, projects and activities for CY 2020 of
the SWD was not fully utilized, leaving an unexpended balance of P124,822.50. This
is contrary to PCW-NEDA-DBMJC No. 2012-01. Thus, defeating the intent of the
program to pursue women’s empowerment and gender equality.
We recommended that Management maximize the utilization of the GAD funds
through the implementation of GAD-related programs and projects as planned, in
order to attain the objective for which funds were provided.
Unsettled Suspensions, Disallowances and Charges
The SWD has an outstanding disallowance totaling P44,903,085.57 as of December 31,
2020, as shown below:
Date
06/24/2015
Notice of
Disallowance
(ND)/Notice of
Suspension
(NS) No.
ND No. SWD
15-001 (13)
11/15/2012
12-001-000 (11)
11/15/2012
12-002-000 (11)
11/15/2012
12-003-000 (11)
09/10/2018
ND No. SWD
18-001 (15-17)
03/04/2019
ND No. SWD
2019-01 (18)
03/04/2019
ND No. SWD
2019-02 (18)
03/04/2019
ND No. SWD
2019-03 (18)
Total
Payee
Various SWD
Officials and
Employees
SWD Board
of Directors
SWD Board
of Directors
SWD Board
of Directors
Various SWD
Officials and
Employees
SWD BOD
and SWD
Officials
SWD BOD
and SWD
Officials
SWD BOD
and SWD
Officials
Amount
P 2,555,312.34
Settlement
-
P 2,555,312.34
80,000.00
-
80,000.00
80,000.00
-
80,000.00
40,000.00
-
40,000.00
42,000,293.23
-
42,000,293.23
51,490.00
-
51,490.00
45,990.00
-
45,990.00
-
50,000.00
P44,903,085.57
50,000.00
P44,903,085.57
P
Balance
P
Status of Implementation of Prior Year’s Audit Recommendations
Of the 48 audit recommendations embodied in the preceding Annual Audit Report
(AAR), 10 were fully implemented, 15 were partially implemented and 23 were not
implemented by the SWD.
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