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    Republic of the Philippines

    COMMISSION ON AUDIT

    Commonwealth Avenue, Quezon City

    ANNUAL AUDIT REPORT

    ON THE

    MUNICIPALITY OF SAN ILDEFONSO

    Province of Ilocos Sur

    For the Year Ended December 31, 2011

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    Republic of the Philippines

    COMMISSION ON AUDIT

    Office of the Supervising AuditorAudit Group G- Ilocos Sur Province

    Provincial Capitol, Vigan City

    March 30, 2012

    HONORABLE MARK ANTHONY A. PURISIMA

    Municipal MayorMunicipality of San Ildefonso, Ilocos Sur

    Sir:

    We transmit herewith the report on the comprehensive audit of the accounts and

    operations of the Municipality of San Ildefonso, Ilocos Sur for the year ended December31, 2011, in compliance with Section 2 Article IX - D of the Philippine Constitution and

    pertinent section of Presidential Decree No. 1445. The report was prepared by Ramon B.Festejo, Audit Team Leader, Team IX.

    The audit was conducted to ascertain the propriety of financial transactions and

    compliance with prescribed rules and regulations. It was also made to ascertain theaccuracy of financial records and reports, as well as the fairness of the presentation of the

    financial statements. The audit also aimed to assess or determine whether the resources of

    the municipality were disbursed economically, effectively and efficiently.

    The report consists of four parts: Part I - Audited Financial Statements, Part II

    Detailed Findings and Recommendations, Part III Status of Implementation of Prior

    Years Audit Recommendations and Part IV - Annexes. The Detailed Findings and

    Recommendations were discussed with the concerned management officials and staff inan exit conference held on February 21, 2012. Managements comments were included in

    the report, where appropriate.

    We request that the findings and recommendations contained in the said report be

    fully addressed and we would appreciate being informed of the action taken in this regard

    within sixty (60) days from receipt hereof, pursuant to Section 94 of the GeneralProvisions of Republic Act No. 10147, otherwise known as the General Appropriations

    Act of 2011.

    We acknowledge the cooperation extended to the audit team by the officials andstaff of that agency.

    Thank you.

    Very truly yours,

    ELVIRA M. JIMENEZSupervising Auditor

    cc: The Director, DILG, Regional Office No. I, San Fernando City, La Union

    The Director, BLGF, Regional Office No. I, San Fernando City, La UnionThe Director, DBM, Regional Office No. I, San Fernando City, La Union

    The Presiding Officer, Sangguniang Bayan, San Ildefonso, Ilocos Sur

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    The Assistant Commissioner, LGS, COA, Quezon City

    Republic of the Philippines

    COMMISSION ON AUDIT

    Audit Group G- Ilocos Sur ProvinceTeam IX

    Municipal Hall, Bantay, Ilocos Sur

    February 29, 2012

    ELVIRA M. JIMENEZ

    Supervising AuditorCommission on Audit

    Audit Group G- Ilocos Sur Province

    Provincial Capitol, Vigan City

    Madam:

    In compliance with Section 2, Article IX-D of the Philippine Constitution and

    pertinent sections of Presidential Decree No. 1445, we conducted a comprehensive auditon the accounts and operations of the Municipality of San Ildefonso, Ilocos Sur for the

    year ended December 31, 2011.

    The audit was conducted to ascertain the propriety of financial transactions and

    compliance of the agency to prescribed rules and regulations. It was also made toascertain the accuracy of financial records and reports as well as the fairness of the

    presentation of the financial statements. The audit also aimed to assess or determine

    whether the resources of the municipality were disbursed economically, effectively andefficiently.

    The results of our audit are embodied in our attached report consisting of fourparts: Part I - Audited Financial Statements, Part II Detailed Findings andRecommendations, Part III Status of Implementation of Prior Years Audit

    Recommendations and Part IV - Annexes. The Detailed Findings and Recommendations

    were discussed with concerned Management Officials and staff during an exit conferenceheld on February 21, 2012.

    An unqualified opinion was rendered as to the fairness of the presentation of the

    financial statements of the Municipality of San Ildefonso, Ilocos Sur as of December 31,2011 because these were free of material misstatements.

    Our audit was conducted in accordance with generally accepted state auditing

    standards and we believe that it provides reasonable bases for the results of the audit.

    We acknowledge the cooperation extended to the Audit Team by the officials andstaff of the agency.

    Very truly yours,

    RAMON B. FESTEJO

    State Auditor III

    Audit Team Leader

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    EXECUTIVE SUMMARY

    A. Highlights of Financial Operation

    The municipalitys assets, liabilities and government equity as of December 31,

    2011 registered at P100,297,508.93, P17,195,373.95 and P83,102,134.98 respectively.

    This years income totaled P45,701,683.81 compared to that of last years income

    of P38,338,766.03 registering an increase of 19.20%.

    Total appropriations for the year amounted to P47,773,680.05 broken down into

    Current Appropriations and Continuing Appropriations of P47,729,180.08 and P44,500.00

    respectively.

    Total expenditures during the year amounted to P23,082,862.26 broken down into

    Personal Services, Maintenance and Other Operating Expenses, Financial Expenses andSubsidies and Donations in the total amounts of P17,084,349.04, P5,752,513.22, P100.00

    and P245,900.00 respectively.

    B. Operational Highlights

    Below are the major plans and targets vis--vis accomplishments of the

    Municipality for the year 2011:

    Programs/Projects/Activities Targets AccomplishmentsPercentage of

    Accomplishments

    Repayment of Loan to World Bank P 636,004.00 P 636,003.48 100%

    Solid Waste Management 448,626.64 400,997.84 89.38%

    Outreach Program 364,851.76 363,051.00 99.51%

    Day Care Services 303,600.00 303,600.00 100%

    Kinder Education 180,000.00 180,000.00 100%

    Aid in Financial Crisis Situation 161,000.00 161,000.00 100%

    CBMS Formulation 125,000.00 125,000.00 100%

    Support to Agriculture Program 100,000.00 72,564.40 72.56%

    Textbooks 75,000.00 74,902.50 99.87%

    Supplemental Feeding 75,000.00 75,000.00 100%

    Improvement of BNHS 70,000.00 70,000.00 100%

    Sports Development Program 58,500.00 53,000.00 90.60%TOTAL P 2,597,582.40 P 2,515,119.22 96.83%

    C. Scope of Audit

    A comprehensive audit was conducted on the accounts and operations of theMunicipality of San Ildefonso, Ilocos Sur. The audit consisted of review of operating

    procedures, inspection of the municipalitys programs and projects, interview of concerned

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    government officials and employees, verification, reconciliation and analysis of accounts

    and such other procedures considered necessary.

    D. Auditors Opinion on the Financial Statements

    The auditor rendered an unqualified opinion on the fairness of presentation of the

    financial statements of the Municipality of San Ildefonso, Ilocos Sur as of December 31,

    2011 because these were free of material misstatements.

    E. Significant Findings and Recommendations

    The following are the significant findings and their corresponding

    recommendations which were discussed with management during the exit conference.Management comments are included in the report, where appropriate.

    1. The Other Receivables account balance of P3,084,000.00 representing claims

    against various debtors was still carried in the books although the account has

    remained dormant for more than ten (10) years and whose collectability has beenrendered improbable due to the lack of source documents to support the account.

    We recommend that the Municipal Mayor should instruct the Municipal

    Accountant to request in writing to the Commission Proper thru the Audit Team Leader

    for the writing-off of the dormant and uncollectible accounts amounting toP3,084,000.00.

    2. The observers were not invited by the Bids and Awards Committee (BAC) in all

    stages in the procurement of goods and infrastructure projects through public

    bidding valued at P1,176,781.50 and P10,035,550.71, respectively, as required

    under pertinent provisions of the Implementing Rules and Regulations (IRR) ofR.A. No. 9184 thereby defeating the principle of transparency in the procurement

    process because the observers were unable to assess the extent of the BACs

    compliance with the provisions of the IRR and areas of improvement in the BACs

    proceedings.

    We recommend that the Bids and Awards Committee should invite in writing

    the required observers in all stages in the procurement of goods and infrastructureprojects through public bidding as required under pertinent provisions of the

    Implementing Rules and Regulations of R.A. No. 9184 to enhance transparency in the

    procurement process and to enable the observers to assess the extent of the BACs

    compliance with the provisions of the IRR and areas of improvement in the BACsproceedings.

    3. The Bids and Awards Committee did not adopt the required conditions and

    procedures in the conduct of post-qualification on the bi