09-GuimarasProv2021 Part2-Observations and Recomm

PART II - AUDIT OBSERVATIONS AND RECOMMENDATIONS
FINANCIAL AND COMPLIANCE AUDIT
1. The existence and accuracy of the Property, Plant and Equipment (PPE)
accounts in the total amount of P2.197 billion could not be ascertained due to:
a) non-reconciliation between the accounting records and the Report on the
Physical Count of Property, Plant and Equipment (RPCPPE) of 16 PPE
accounts, reflecting a difference of P163.260 million; and b) non-conduct of
physical count of 18 PPE accounts with a total cost of P1.653 billion, contrary
to Section 124 of the Manual on the New Government Accounting System
(MNGAS) for Local Government Units (LGUs), Volume I, thus, rendered the PPE
account balances in the financial statements at year end doubtful.
Section 124 of the MNGAS for LGUs states:
“Physical count of property, plant, and equipment by type shall be

made annually and reported on the Report on the Physical Count of
Property, Plant and Equipment (RPCPPE). This shall be submitted to
the Auditor concerned not later than January 31 of each year.”
Further, Sections 13 and 45, Volume II of the same Manual describe Property, Plant
and Equipment Ledger Card (PPELC) and the Property Card (PC), as follows:
“Sec. 13. Property, Plant and Equipment Ledger Card (PPELC). – The
Property, Plant and Equipment Ledger Card (Annex 9) is a subsidiary
ledger to be kept for each class of property, plant and equipment
which shall record the acquisition, description, custody, estimated life,
rate of depreciation, disposal and other information about the
property, plant and equipment, based on the source documents of the
transactions.
Sec. 45. Property Card (PC). – The Property Card (Annex 37) shall
be used by the Supply and Property Unit to record the acquisition,
description, custody, disposal and other information about the
property, plant and equipment. It shall be kept for each class of
property, plant and equipment.”
In addition, to assist government agencies in coming up with reliable PPE balances

that are verifiable as to existence, condition, and accountability, COA Circular No.
2020-006 dated January 31, 2020, prescribes the Guidelines and Procedures in the
Conduct of Physical Count of Property, Plant and Equipment (PPE), Recognition of
PPE Items Found at Station, and Disposition for Non-existing/Missing PPE Items, for
the One-Time Cleansing of PPE Account Balances of Government Agencies.
Review of the Financial Statements for CY 2021 showed 34 PPE accounts totaling
P2.197 billion, whereas the RPCPPE accounted only 16 PPE accounts. Comparison
of the total cost per books of the said 16 PPE accounts amounting to P543.298 million
and the balance per RPCPPE of P380.038 million, showed a discrepancy of
P163.260 million, as shown on the next page:
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Table 1 - Variance of recorded PPEs between FS and RPCPPE
Difference/
Cost per Financial Cost per Balance without
PPE Account Variannce Per FS
Statements (FS) RPCPPE RPCPPE
and RPCPPE
a. List of PPE Accounts subjected to physical count
1 Office Equipment 55,002,471.82 16,939,276.86 38,063,194.96
2 Information and Communication Technology Equipment 51,625,143.83 22,817,548.60 28,807,595.23
3 Agricultural and Forestry Equipment 25,207,963.20 19,938,519.52 5,269,443.68
4 Communication Equipment 4,709,179.45 2,083,245.00 2,625,934.45
5 Construction and Heavy Equipment 180,121,532.97 189,893,977.20 (9,772,444.23)
6 Medical Equipment 72,700,557.64 32,048,755.12 40,651,802.52
7 Technical and Scientific Equipment 21,590.85 10,929,435.82 (10,907,844.97)
8 Other Machinery and Equipment 33,420,369.97 25,945,633.38 7,474,736.59
9 Motor Vehicles 83,858,245.55 42,128,838.29 41,729,407.26
10 Watercrafts 2,421,313.50 3,797,600.00 (1,376,286.50)
11 Furniture and Fixtures 6,329,540.38 4,395,038.52 1,934,501.86
12 Military Police and Security Equipment 1,877,534.50 2,560,635.00 (683,100.50)
13 Marine and Fishery Equipment 2,768,605.00 772,578.96 1,996,026.04
14 Disaster Response and Rescue Equipment 17,450,059.25 2,428,791.00 15,021,268.25
15 Sports Equipment 3,984,821.17 3,344,746.85 640,074.32
16 Books 1,799,415.00 13,336.75 1,786,078.25
Sub-total 543,298,344.08 380,037,956.87 163,260,387.21
b. List of PPE accounts not physically counted

1 Land 742,522,155.56 742,522,155.56
2 Other Land Improvements 18,630,848.39 18,630,848.39
3 Land Improvements, Aquaculture Structure 3,728,519.74 3,728,519.74
4 Road Networks 475,297,879.32 475,297,879.32
5 Water Supply Systems 24,450,854.09 24,450,854.09
6 Power Supply Systems 13,817,023.42 13,817,023.42
7 Seaport Systems 2,085,119.30 2,085,119.30
8 Park, Plazas and Monuments 17,444,840.47 17,444,840.47
9 Other Infrastructure Assets 89,036,186.96 89,036,186.96
10 Buildings 143,557,175.85 143,557,175.85
11 School Buildings 10,191,728.82 10,191,728.82
12 Hospital Health Centers 71,270,194.86 71,270,194.86
13 Markets 3,455,352.74 3,455,352.74
14 Other Structures 28,573,633.09 28,573,633.09
15 Machinery 1,439,917.21 1,439,917.21
16 Work/Zoo Animals 28,200.00 28,200.00
17 Other Property, Plant and Equipment 4,712,420.04 4,712,420.04
18 Other Transportation Equipment 3,202,380.00 3,202,380.00
Sub-total 1,653,444,429.86 1,653,444,429.86
Total 2,196,742,773.94 380,037,956.87 163,260,387.21 1,653,444,429.86
Inquiry with the Provincial Accountant’s Office (PAO) revealed that PPELCs were not
maintained for the 18 PPE accounts. Earliest available records are hard copies of
subsidiary ledgers in CY 2013 before the migration from the manual-based to
electronic accounting system. The available subsidiary ledgers also lacked
breakdown and details of the recorded PPEs.
Moreover, perusal of the Provincial General Services Office’s (PGSO) records

revealed that PPEs not physically counted have no Property Cards (PCs). Inquiry with
the new Supply Officer who assumed in 2021 disclosed that the inventory-taking
procedures for CY 2021 were patterned from the previous years’ practice by the then
Inventory Committee, hence, the 18 PPE accounts were not also considered in the
physical count. It was also their presumption that the task for the inventory taking for
PPEs such as land, land improvements, infrastructure assets and buildings were
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charged to other offices such as the Provincial Assessor’s Office and Provincial
Engineer’s Office who kept records of the real properties owned by the Province.
On the other hand, verification revealed that the PPELCs of the 16 PPE accounts
maintained by PAO were not updated and incomplete and that reconciliation with the
Property Cards (PCs) maintained by PGSO is still ongoing.
In addition, comparison of CY 2021 RPCPPE with the previous year showed

decrease on the balances of some PPEs. Inquiry with the PGSO and examination of
sample Property Return Slips disclosed that PPEs returned to PGSO were not
included in the RPCPPE, thus, understated the latter’s balance and further increased
the unreconciled difference between the RPCPPE and the reported balances in the
financial statements (Annex A).
Further, procedures for the one-time cleansing of PPE account balances in

compliance with COA Circular No. 2020-006 were not yet fully undertaken due to the
extensive work to be considered in its implementation. During the exit conference, the
Provincial Accountant commented that they are closely coordinating with the PGSO
for the reconciliation of their respective PPE records especially those pertaining to
prior years. Currently, they are preparing for the disposal of various unserviceable
properties. Thereafter, they will coordinate with COA for the one-time cleansing of
PPE account balances in compliance with the guidelines.
The material difference between the cost of 16 PPEs and the RPCPPE, non-conduct
of physical count of 18 PPE accounts, and non-maintenance of updated PPELCs and
PCs, rendered doubtful the accuracy and existence of the PPE accounts amounting
to P2.197 billion in the financial statements as of December 31, 2021.
This is a reiteration of prior years’ audit observation which has not been fully
addressed by Management.
We recommended and the Management agreed to the following:
a. The Inventory Committee to cause the conduct of physical count of all PPE
and reconciliation of PPE records, in accordance with the guidelines and
procedures in the one-time cleansing of PPE account balances provided in
COA Circular No. 2020-006; and
b. The Provincial Accountant and the Provincial General Services Officer to

ensure that all PPEs included in the RPCPPE and accounting records are
duly recorded in the Property Cards and PPE Ledger Cards.
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2. The validity and reliability of the Payable accounts amounting to P66.485
million is doubtful due to: a) unreverted accounts payables and other payables
balances aged over two years amounting to P61,803.48 and P8.501 million,
respectively; b) improperly booked payables totaling P9.779 million; c)
unidentified/with no details Subsidiary Ledger (SL) balances of P1.249 million;
and d) existence of negative SL balances amounting to P0.948 million; contrary
to Section 98 of Presidential Decree No. 1445 and the provisions of COA
Circular No. 2015-009 dated December 1, 2015, thus, affecting the correctness
of the Liabilities account balances in the financial statements.
Section 98 of the Presidential Decree (PD) No. 1445 provides that unliquidated
balance of accounts payable in the books which has been outstanding for two years
or more and against which no actual claim, administrative or judicial, has been filed or
which is not covered by perfected contracts on record, may be reverted to the
unappropriated surplus of the general fund. This provision is applicable not only to
national government agencies but also to local government units by virtue of the 5th
Indorsement dated September 2, 1998 of Celso D. Gangan, former Chairman of the
Commission on Audit, which reads in part:
“Every statute should be construed in connection with those already

existing in relation to the same subject matter and should be made to
harmonize and stand tighter if they can be done by fair and
reasonable interpretation (City of Naga vs Agna, 71 SCRA 176) X x x
x x.”
Further, COA Circular No. 2015-009 which prescribes the Revised Chart of Accounts
for LGUs, provides the description of “Accounts Payable”, Due to National
Government Agencies (NGAs)”, “Due to GOCCs”, “Due to LGUs”, “Due to Other
Funds” and “Other Payables”.
Review of financial statements and subsidiary ledgers under the General Fund
showed that the Accounts Payable and Other Payables account balances as of
December 31, 2021 of P45.980 million and P20.505 million, respectively, included
balances of P8.563 million outstanding for over two years which were not reverted to
the unappropriated surplus, improperly booked or misclassified account balances
totaling P9.779 million, unidentified/with no details and negative SL balances
amounting to P1.249 million and P0.948 million, respectively, as presented in the
following Table:
Table 5: Schedule of Accounts Payable and Other Payables (General Fund)

Accounts Other
Particulars Total Remarks
Payables Payables
A. Aged over 2 P61,803.48 P8,501,136.02 P8,562,939.50 Accounts Payable:
years or Pertains to unclaimed
dormant financial assistance,
payables not honorarium, wages,
reverted to transportation allowance,
unappropriated etc.
surplus
Other Payables: Stale
checks, Manggahan
Festival, BAC payables,
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Accounts Other
Particulars Total Remarks
Payables Payables
prior years’ balances
without supporting
documents, etc.
B. Unidentified/ No P1,068,956.40 P180,433.68 P1,249,390.08 The claimants/ creditors to
Details Payables whom the amounts due,
and the nature of the
payables, were not
indicated.
C. Improperly P1,364,801.70 P8,414,398.44 P9,779,200.14
booked/
misclassified SL
balances
Due to Officers P27,531.70 Terminal leave pay,
& Employees incentive
Due to NGAs P8,145,413.08 DOH-SRA, Typhoon fund,
etc.
Due to GOCCs P168,985.36 Payables to PCSO, NHA,
SSS
Due to LGUs P106,500.00 Financial assistance to
barangays; Other payables
to barangays without
details/nature
Due to Other P100,000.00 Payables to SEF
Funds – SEF
Other Payables P1,230,770.00 Financial/medical/
educational assistance,
meal allowance,
incentives, etc.
D. Negative SL P1,000.00 P946,655.83 P947,655.83 Overpayments to lending
balances institutions, erroneous
entries made in the books,
etc.
Details in Annexes F & G
In the AAPSI of CY 2020 Audit Recommendations, Management commented that

adjusting entries shall be made by year-end. However, upon verification of balances
as of December 31, 2021, it was noted that payables aged over two years totaling
P8.563 million remained outstanding in the books and misclassified accounts totaling
P9.779 million were still not re-classified to their proper accounts. Further, accounts
totaling P1.249 million have no details in their SLs. Also, negative balances totaling
P0.947 million still exist in the books.
The Provincial Accountant’s Office (PAO) informed that for payables aged more than
two years which remained outstanding as of year-end, they have not yet confirmed
the validity of the claim of the said balances especially those who lacked details and
without supporting documents because they focused more on their receivable
accounts and gave priority to the preparation and issuance of demand letters to
various debtors. He further said that they will exert more effort to verify their records.
Moreover, for the misclassified accounts, they have overlooked the supposed
adjustments to be made at year-end due to their voluminous workload. In a letter
reply to the Audit Observation Memorandum (AOM), the PAO said that they will make
the necessary adjustments to reclassify the accounts erroneously booked in the
Accounts Payable and Other Payables accounts.
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For balances with incomplete or lacking details in the SLs, the Provincial Accountant
said that they will trace the balances to the source documents to provide complete
information in the SLs. He further assured that succeeding records will include
complete details/information.
For the existence of negative balances, inquiry was made on the huge balance under
the Newborn Screening of the Buenavista Emergency Hospital (BEH) and Nueva
Valencia District Hospital (NVDH) accounts. Per inquiry with the PAO, it was found
that the purchase of newborn kits for consumption of the patients were not recorded
as inventory but were debited to Other Payables account. When payment is made by
the Philippine Health Insurance Corporation (PHIC), the said payables account is then
credited. But since purchases and issuances of the kits are continuous, while
payments from PHIC are delayed, the erroneous debit entry to the Other Payables
account resulted to the negative balance. The Assistant Provincial Accountant said
that this has been the recording made by the previous personnel in-charge of the
account which they continued. The purchase of newborn kits should have been
debited to the appropriate inventory account and credited upon issuance to patients.
Additional entry to set-up the receivable amounts from PHIC shall then be debited
and income accounts shall be credited. The erroneous entries resulted in
understatement of both receivable and income accounts. For negative balances
under the PHIC refund and Professional fee accounts of NVDH, the Assistant
Provincial Accountant said that there were charges/claims which were inadvertently
recorded to these accounts but should have been recorded to other accounts. She
further said that adjusting entries will be made to correct the erroneous entries. For
other negative balances, analysis will be done, and necessary adjusting entries will be
subsequently made.
The balances of Accounts Payable and Other Payables aged more than two years
with incomplete details/information and with lacking supporting documents, improperly
booked accounts, as well as existence of negative balances, cast doubts on the
validity of the claims and the accuracy of the recorded balances, thus, affected the
correctness of the accounts presented in the financial statements.
We recommended and the Provincial Accountant agreed to:
a. Validate the recorded payables aged two years and more and send
confirmation letters for balances with identified claimants or creditors, if
warranted. Valid claims shall be paid. Otherwise, cause the reversion of the
payables to the unappropriated surplus of the General Fund;
b. Draw necessary adjusting entries to: 1) reclassify the accounts erroneously

booked in the Accounts Payable and Other Payables accounts to ensure
that accounts are accurately presented in the financial statements; and 2)
correct the negative balances of accounts and ensure that transactions are
analyzed and properly classified before recording them in the books; and
c. For payables with incomplete information/details in the SLs, exert efforts to
retrieve the source documents to properly identify the nature of the
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recorded balances and ensure that subsequent records contain complete
information about the balances.
3. Due from Local Government Units (LGUs) account with amount of P27.188
million representing fund transfers to five municipalities and various barangays
of Guimaras in Calendar Years (CYs) 2016-2020 remained outstanding in the
books as of December 31, 2021 due to non-submission/delayed submission of
liquidation reports and supporting documents from the Implementing Agencies
(IA), contrary to COA Circular No. 94-013 dated December 13, 1994, thus, cast
doubts as to whether the funds transferred were fully utilized for the intended
purpose or not.
Item 4.6 of COA Circular No. 94-013 dated December 13, 1994 re: Rules and
Regulations in the Grant, Utilization and Liquidation of Fund Transferred to
Implementing Agencies, provides:
“Within ten (10) days after the end of each month/end of the agreed
period for the Project, the IA shall submit the Report of Checks Issued
(RCI) and the Report of Disbursement (RD) to report the utilization of
the funds. Only actual project expenses shall be reported. The
reports shall be approved by the Head of the IA.”
Likewise, item 5.4 of the same Circular provides that one of the duties and
responsibilities of the Source Agency (SA) is to require the Implementing Agency (IA)
to submit reports and furnish the IA with a copy of the journal voucher taking up the
expenditures.
Verification of Due from LGUs account of the Province for all funds showed that of the
total balance of P70.677 million, P27.188 million representing fund transfers in CYs
2016 to 2020 to five municipalities and various barangays of the Province remained
outstanding in the books as of December 31, 2021, as summarized below:
Table 2: Status of CY 2016-2020 Fund Transfers to Other LGUs
Unliquidated Balance as Unliquidated Balance as

Additional FT in Liquidation/
LGU of Dec. 31, 2020 of FT Adjustments of Dec. 31, 2021 of FT
CY 2020 Refund
Granted in CY 2016-2019 Granted in CY 2016-2020
Municipalities 40,360,911.48 7,900,000.00 28,024,114.00 20,236,797.48

Barangays 8,331,812.82 3,100,000.00 199,965.00 4,680,497.00 6,951,280.82
Total 48,692,724.30 11,000,000.00 199,965.00 32,704,611.00 27,188,078.30
Note: See Annex B for details of fund transfers
Records disclosed that of the P27.188 million, P2.875 million or 10.57 percent
pertains to fund transfers for activities/programs which have long taken place or have
been completed. On the other hand, P21.346 million or 78.51 percent pertains to
infrastructure projects, of which P16.540 million was aged two years to five years, and
P4.806 million was aged one year. Further, P2.328 million or 8.56 percent pertains to
the purchase of office supplies, office equipment, furniture and fixtures, and motor
vehicles, while P0.639 million or 2.35 percent pertains to financial assistance to
associations and athletes.
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Of the total liquidation of P32.705 million, the amount of P28.278 million or 86.47
percent pertains to CY 2016-2019 fund transfers, while P4.427 million or 13.53
percent pertains to CY 2020 fund transfers.
In the Agency Action Plan and Status of Implementation (AAPSI) for CY 2020, the
Province stated that demand letters were sent to the IAs to submit their liquidation
reports with complete supporting documents.
In response to the confirmation letters sent by the Audit Team, the IAs indicated that
almost all fund transfers were utilized for the purpose they were granted. However,
they remarked that liquidation reports for some completed projects were not yet
submitted and/or unexpended balances were not yet refunded to the Province.
Further, for IAs specifically the barangays, who were having difficulties in retrieving
their liquidation documents, it was previously recommended that coordination be
made with proper agencies such as other LGUs or COA to request copies of the
related documents. However, per verification with the Audit Team in charge of the
audit of barangay accounts, no requests for such documents were received from the
concerned barangays. In a letter reply to the Audit Observation Memorandum (AOM)
issued, the Provincial Accountant said that to ease the retrieval of the IAs of their
liquidation documents, they will re-issue demand letters with specific details such as
the nature of the project/program to be implemented, date granted, etc.
Delayed/non-submission by the IAs of liquidation reports with complete supporting

documents cast doubts that the funds transferred were fully utilized for the intended
purpose.

a. Monitor the IAs’ utilization of fund transfers to ensure the timely
implementation of the approved projects and immediate submission of
liquidation reports with complete supporting documents upon project
completion; and
b. Inform the IAs with difficulty retrieving their documents for liquidation to
coordinate with and request copies of documents from concerned agencies
such as other LGUs and COA, to comply with the submission of the
required liquidation documents.
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4. Cash advances for local travel and specific purpose aged over 31 days to over
10 years amounting to P2.096 million, remained outstanding in the books as of
year-end due to lapses in the monitoring of submission of
liquidation/settlement as required in Section 89 of Presidential Decree (PD) No.
1445 and COA Circular No. 97-002 dated February 10, 1997, thus cast doubts as
to whether the cash advances were utilized for the intended purpose or not.
Section 89 of PD No. 1445 states that no cash advance shall be given unless for a
legally authorized specific purpose. A cash advance shall be reported on and
liquidated as soon as the purpose for which it was given has been served.
Item 5 of COA Circular No. 97-002 dated February 10, 1997 provides that the
Accountable Officer (AO) shall liquidate his cash advance within five days after each
15 day/end of the month pay period for salaries and wages, within 20 days after the
end of the year for Petty Operating Expenses and Field Operating Expenses, and
within 30 days after return to his permanent official station for local travel.
In the event that the cash advances were not duly liquidated, Item 3.3.2 of COA
Circular No. 96-004 dated April 19, 1996 provides, among others, that the accountant
shall:
a. Send within 10 days before the expiration of the 30 or 60 days period

specified under Section 16 of EO 248, a written reminder under signature of
the head of the agency or his duly authorized representative, enjoining the
official or employee concerned to liquidate his travel cash advance. This is to
preclude complaints arising from suspension of salaries due to non-
liquidation of travel advances.
b. Delete the name of the official or employee from the subsequent payrolls until
such time that the travel cash advance has been fully liquidated, if the official
or employee concerned fails to liquidate the cash advance within the
prescribed period.
For outstanding cash advances as of December 31, 2011, Item 9 of COA Circular No.
2012-004 provides the consequences of failure to liquidate:
“9.1 Failure of an Accountable Officer to liquidate his outstanding cash

advance on or before January 31, 2013 shall constitute cause for
the filing of malversation charge xxx.
9.2 The suspension of salaries of erring accountable officers shall be

ordered by the auditor concerned to the proper agency official
through the head of the Agency.
9.3 Appropriate administrative proceedings shall likewise be instituted.”
Review of the Advances to Officers and Employees and Advances to Special

Disbursing Officers accounts balances as of December 31, 2021 showed that total
unliquidated cash advances per audit (excluding Confidential Funds) amounted to
P2.332 million, of which P2.096 million were already past due. Data are summarized
on the next page:
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Table 3: Schedule of Unliquidated Cash Advances as of December 31, 2021
Cash Advances
Balance as of Liquidation in CY Balance as of Past Due as of
Period Granted Granted in CY
12/31/2020 2021 12/31/2021 12/31/2021
2021
2011 and earlier 569,863.26 28,190.00 541,673.26 541,673.26
2012-2020 4,077,211.52 3,006,378.55 1,070,832.97 1,070,832.97
2021 4,590,260.00 3,870,429.28 719,830.72 483,923.00
Total 4,647,074.78 4,590,260.00 6,904,997.83 2,332,336.95 2,096,429.23
See Annexes C and D for details
As shown in the Table, settlement made for cash advances granted in Calendar Year
(CY) 2011 and earlier was P28,190.00 or 4.95 percent (Annex C). On the other hand,
P3.006 million or 73.74 percent was settled for cash advances granted in CY 2012-
2020, and P3.870 million or 84.32 percent was settled for cash advances granted in
CY 2021. (Annex D)
The Provincial Accountant informed that they consistently sent demand letters to all
Accountable Officers (AOs) with unliquidated cash advances and are still connected
with the Province. Salary deductions were imposed on those who have not submitted
their liquidation documents despite various demands. For some AOs who were not
yet imposed with salary deductions, the management granted their request for ample
time to locate their liquidation documents. Further, sanctions like suspension of
salaries were not yet imposed by management for humanitarian reasons. For AOs
who are no longer connected with the Province or no longer in government service,
their names were submitted to the Provincial Legal Office for the preparation and
issuance of demand letters.
However, for the seven AOs of the Dr. Catalino Gallego Nava Provincial Hospital
(DCGNPH) with unliquidated balance totaling P52,365.00, the Provincial Accountant
informed that no demand letters were sent because their names were not submitted
by the personnel in-charge.
During the exit conference, the Provincial Accountant commented that they will
ensure that all AOs with unliquidated cash advances be issued with demand letters
including those who are no longer connected with the Province.
Further, it was also noted that for the current year, additional cash advances were
granted to personnel with existing unliquidated amount. Per inquiry with the Provincial
Accountant, he informed that he monitors and ensures that no additional cash
advances are granted to personnel with unliquidated balance, however, it was
overlooked that some AOs still have pending unliquidated cash advances which were
later refunded/liquidated in the succeeding year. As per verification of records, those
granted additional cash advances have only partially liquidated their previous cash
advances, thus the reason for the outstanding balances.
Non-settlement of unliquidated cash advances cast doubts that the cash advances
were utilized for the intended purpose.
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a. The Provincial Accountant issue demand letters to the AOs of the DCGNPH
with unliquidated cash advances who were not included in the previous
demand letters issued;
b. Delete the name of the official or employee from the subsequent payrolls
until such time that the travel cash advance has been fully liquidated; cause
the suspension of salaries of erring accountable officers; and appropriate
administrative proceedings be instituted in compliance with COA Circular
No. 96-004 and COA Circular No. 2012-004, if no settlement has been made
by the accountable officers despite continuous demands;
c. The Provincial Accountant cause and facilitate the request for write off in
accordance with COA Circular No. 2016-005, for unliquidated cash advances
which remained non-moving for 10 years or more and where settlement
could no longer be made; and
d. Henceforth, strictly monitor and ensure that all cash advances granted are
liquidated within the prescribed period and subsequently recorded in the
books, and no additional cash advances shall be granted to those with
unliquidated balances.
5. Receivables totaling P4.582 million aged two years to over 10 years were not
provided with allowance for impairment and remained uncollected due to lack
of subsidiary ledgers/schedules and incomplete information/records, contrary
to the provisions of International Public Sector Accounting Standards (IPSAS)
and COA Circular No. 2016-005 dated December 19, 2016, thus, adversely
affecting the validity and collectibility of the claims and rendered the receivable
balances in the financial statements unreliable.
COA Circular No. 2015-009 dated December 1, 2015 or the Revised Chart of
Accounts for Local Government Units (LGUs) describes the Allowance for Impairment
accounts for various receivables. Further, IPSAS 29 provides the guidelines on the
Recognition and Measurement of Financial Instruments. Paragraph Nos. 67 to 71 of
the said Standard discussed the assessment of the financial assets, its uncollectibility,
and determination and recognition of impairment losses.
Section 111(1) of PD No. 1445 states that the accounts of an agency shall be kept in
such detail as is necessary to meet the needs of the agency and at the same time be
adequate to furnish the information needed by fiscal or control agencies of the
government.
Section 10 of the Manual on the New Government Accounting System (MNGAS) for
Local Government Units (LGUs) provides that the Subsidiary Ledger (SL) is a book of
final entry containing the details or breakdown of the balances of the controlling
account appearing in the General Ledger (GL). The totals of the SL balances shall be
reconciled to their respective control account at the end of every month.
Further, COA Circular No. 2016-005 prescribes the guidelines and procedures in
reconciling and cleaning the books of accounts of National Government Agencies
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(NGAs), Local Government Units (LGUs), and Government-Owned and Controlled
Corporations (GOCCs) of dormant receivable accounts, unliquidated cash advances,
and fund transfers for fair presentation of accounts in the financial statements.
Verification of general ledger account balances as of December 31, 2021 of the

General Fund, Trust Fund and DCGNPH showed uncollected receivables from eight
accounts totaling P4.582 million, comprised of P3.461 million aged over 10 years, and
P1.121 million aged two to 10 years, as summarized below:
Table 4: Schedule of Receivables Aging from Two Years to 10 Years

Age of Receivables
Account Name Amount 2 years to 10 Over 10
years years
Accounts Receivable 294,461.71 294,461.71
Due from LGUs 338,827.80 89,081.36 249,746.44
Due from Officers and 19,936.08 13,165.18 6,770.90
Employees
Loans Receivable-Others 1,785,343.05 1,785,343.05
Interest Receivable 68,433.95 68,433.95
Due from NGAs 1,568,889.30 150,000.00 1,418,889.30
Due from GOCCs 300,000.00 300,000.00
Other Receivables 183,490.46 206,140.69
Total 4,582,032.58 1,121,282.89 3,460,749.69
See Annex E for details
As shown in Annex E, of the total receivable balance of the eight accounts, P4.582
million, P1.406 million or 30.69 percent have no subsidiary ledgers/schedules or
details of the agencies/entities or persons/debtors from whom the amounts are due or
collectible. On the other hand, P3.176 million or 69.31 percent have identified debtors,
of which, only P468,650.23 have complete details and supporting documents, while
P2.707 million have either incomplete supporting documents or lacked information
such as the nature/purpose of the receivable and/or actual date the receivable was
granted/incurred.
The Provincial Accounting Office (PAO) has sent demand letters to balances with
identified debtors under Loans Receivable-Others and Due from Officers and
Employees accounts. Based on the data submitted, of the 37 identified debtors under
the Loans Receivable-Others account, 27 demand letters were sent, 10 of which was
marked Return to Sender (RTS) because the addressee was either ‘Unknown’, ‘No
longer exist’ or there’s no one to receive. Demand letters were not sent to the
remaining 10 because there were no identified addresses of the debtors. On the other
hand, for Due from Officers and Employees account, demand letters were already
sent to the debtors, however, only two were able to settle their accounts as of
December 31, 2021.
For receivables under Due from GOCCs, and Due from NGAs, the PAO informed that
they will prepare the demand letters and send the same to the debtors.
39
For other receivable accounts with identified debtors, the PAO was not able to send
demand letters due to unavailability of information and records such as SLs. They
also informed that no Allowance for Impairment was provided yet for the said
receivables. Further, for receivables aged more than 10 years, the PAO is still on the
process of complying with the required documentary requirements for the request for
write-off under COA Circular No. 2016-005 dated December 19, 2016. In addition,
during the exit conference, the Provincial Accountant commented that they will
coordinate with COA for the request for write-off of balances with no identified
debtors, no supporting documents, and for debtors who can no longer be located.
The absence of records such as SLs and schedules identifying the debtors, and the
lack of complete data/information and supporting documents prevented the collection
of the said accounts, as well as, of the confirmation on the existence and correctness
of the receivables, thus, affected the validity of the claims and rendered the reliability
of the said accounts in the financial statements doubtful.
We recommended and the Provincial Accountant agreed to the following:
a. Exert effort to locate or determine the addresses, and together with those
previously identified debtors, prepare and send demand letters thereto;
b. In coordination with the Provincial Legal Officer, enforce legal action to

collect the receivables from identified debtors with complete supporting
documents who still do not settle their accounts despite demands;
c. Assess the collectibility of the receivables and set up Allowance for

Impairment in compliance with IPSAS 29;
d. Facilitate the preparation and the filing of request for write-off for receivable
accounts without identified debtors or nature, and those proven to be non-
existent and non-moving for 10 years or more, in accordance with COA
Circular No. 2016-005 dated December 31, 2016; and
e. Ensure that prospective receivables are well-documented, have subsidiary

ledgers and properly recorded in the books.
6. Two bank accounts under the Cash in Bank – Local Currency, Current Account
(LCCA) account in the Trust Fund totaling P0.717 million became dormant due
to non-refund to Source Agencies (SA) of the fund balance after
project/program completion, contrary to COA Circular No. 94-013 dated
December 13, 1994, thus, resulted in non-optimal use of government funds.
Item 4.9 of COA Circular No. 94-013 dated December 13, 1994 on the Rules and
Regulations in the Grant, Utilization and Liquidation of Funds Transferred to
Implementing Agencies, provides that the Implementing Agency (IA) shall return to
the Source Agency (SA) any unused balance upon completion of the project.
Section 3.2 of Commission on Audit, Department of Finance, and Department of

Budget and Management (COA-DOF-DBM) Joint Circular No. 4-2012 dated
40
September 11, 2012 states that Dormant Accounts refer to collections authorized by
law to be deposited with an Authorized Government Depository Bank (AGDB) but
have remained inactive for more than five years.
Further, Section 3.4 of the same Circular provides that unnecessary special and trust
funds refer to authorized special and trust funds maintained by government agencies
with AGDBs but which are no longer necessary for the attainment of the purposes for
which said funds were established i.e., specific projects/programs, the implementation
of which have been completed or abandoned.
Review of the Cash in Bank - Local Currency, Current Account (LCCA) of the
Province as of December 31, 2021 disclosed that two bank accounts under the Trust
Fund with total balance of P0.717 million were inactive for more than five years, thus,
became dormant. Details are as follows:
Table 6: Schedule of Dormant Bank Accounts

Bank Account CASH IN BANK BALANCE
Fund Remarks
Number 2015 2016 2017 2018 2019 2020 2021
TF
1922-1011-63 movement due to
255,359.06 255,878.68 256,272.37 256,480.30 256,688.40 256,858.72 256,962.91
(WATSAN) interest income
TF 1922-1022-32
(SME) 456,671.67 457,600.95 458,305.03 458,676.88 459,049.04 459,353.61 459,539.94 -do-
Total 714,045.73 713,479.63 714,577.40 715,157.18 715,737.44 716,212.33 716,502.85
It was noted that the said accounts were funds transferred by National Agencies to
the Province as IA of specific programs/projects. In an inquiry with the Provincial
Treasurer as to the details and available documents such as the Memorandum of
Agreement (MOA) with the SA of the above-mentioned bank accounts, she said that
these accounts became dormant since the programs/projects for which these
accounts were maintained have already long been completed. However, they were
also not able to refund the fund balances since they are still trying to retrieve the MOA
to identify the SA and the details of the agreement of the fund transfers.
Further, the Province has requested the Land Bank of the Philippines (LBP), the latest
of which was in CY 2021, to reactivate these accounts to accommodate any bank
transactions of the Provincial government in the future. The slight movement in the
balances were due to the net interest income earned from the deposits.
In a letter reply to the AOM issued, the Management commented that the PAO will
coordinate with the Provincial Treasurer’s Office (PTO) to request the LBP for the
transfer of the balances to the Trust Fund-Proper account.
Due to the dormancy of these two bank accounts, government funds became idle and
were not optimally utilized for the delivery of basic services to the public.
a. Exert efforts in retrieving the copies of MOA relative to projects under the
two dormant accounts in order to identify the SA and details of the
agreement as to the unused balances after project completion;
41
b. Close the two dormant bank accounts and transfer the balances to the Trust
Fund-Proper to avoid being dormant; and
c. Request authority from the SA to revert the unused balances to the General
Fund to appropriate and utilize the same for other projects. If authority is
not granted, refund the unused balance to the SA.
7. Copies of Acceptance and Inspection Reports (AIRs) were not submitted to the
Office of the Auditor within the prescribed period due to non-observance of
procedures on the receipt, inspection and acceptance of items delivered as
required in COA Circular No. 92-386 dated October 20, 1992 and Section 6.09 of
COA Circular No. 95-006 dated May 18, 1995, thus, precluded the Audit Team
from timely evaluation and inspection of deliveries.
Section 114 of COA Circular No. 92-386 states, “Inspection and verification of
purchases shall be done according to these rules:
a. Purchases made by the local government units must be inspected and

verified by their authorized inspector for conformity with specifications in
the order. x x x
xxx
d. Report of inspection of all consumables shall be submitted to the provincial

or city auditor, as the case may be, within 24 hours.”
Further, Item 6.09 of COA Circular No. 95-006 dated May 18, 1995 provides that a
copy of the report of inspection or its equivalent shall be submitted to the Head of the
Auditing Unit within 24 hours from acceptance of the items delivered.
Monitoring of the agency’s CY 2021 submission of Acceptance and Inspection

Reports (AIRs) showed significant delays, as summarized below:
Table 7: Monitoring of AIR Submission as of December 31, 2021

CY 2021 AIR Submission Quantity % of Submission
Within the prescribed period 201 16%
Delayed
Delay in days 1 - 2 days 155 12%
3 - 5 days 183 14%
6 - 10 days 163 13%
11 - 30 days 299 23%
31 - 60 days 173 13%
61 - 180 days 100 8%
181 - 275 days 17 1%
1,090 84%
Total 1,291 100%
42
As shown in the above Table, out of 1,291 AIRs submitted to the Office of the Auditor
in CY 2021, 1,090 or 84 percent were submitted late or not within the prescribed
period. The delays ranged from one day to 275 days resulting in an average delay of
26 days.
In reply to Audit Query No. 2022-003 dated February 02, 2022 issued as to the
reason/s for the recurring delays and action taken on prior years’ audit
recommendation, the Provincial General Services Office (PGSO) responded that the
matter had been discussed with the Provincial Administrator. The latter agreed that a
meeting with the Department Heads/End-users will be called to reiterate
Memorandum Order No. 17 Series of 2021 directing all end-users to inform the PGSO
of the delivered items and facilitate the processing of pertinent documents.
The Audit Team conducted an interview with the PGS Officer to verify the procedural
flow of the receipt, inspection and acceptance of deliveries. The following procedures
were presented for items directly delivered to end-users:
1. End-user informs the PGSO after receipt of deliveries for inspection by the
Inspectorate Team.
2. Inspectorate Team/Inspector obtains copies of Delivery Receipt (DR) and

Purchase Order (PO) from end-user and inspects and verifies the deliveries.
3. After inspection, the end-user submits the DR/Supplier’s Invoice and PO to

PGSO for AIR preparation.
4. The PGSO prepares the AIR and forwards the same to the end-user for
signature in the “Acceptance” and “Inspection” column. The end-user signs
and indicates the date based on the date of the DR. Afterwards, the AIR is
forwarded back to the PGSO.
5. The AIR is then forwarded by the PGSO to the Inspectorate Team for
signature in the “Inspection” column. The Inspectorate Team signs then
forwards the AIR back to the PGSO.
6. The PGS Officer then signs the “Acceptance” portion and indicates date of
acceptance based on the date of the DR. The Supply Officer then assigns
control number for the AIR and submits the document to COA.
The procedural flow for bulk purchases directly delivered to the PGSO warehouse is
the same except that the PGSO represents the end-user.
According to PGS Officer, the cause of delays mostly pertains to items directly
delivered to the offices of the end-users. The DR/Supplier’s Invoice and Purchase
Order (PO) were not timely forwarded by the end-users to PGSO for AIR preparation.
Also, affixing of signature on the acceptance portion of the AIR by the end-users was
not promptly done.
It was observed that the procedures adopted by the PGSO as presented above were
not in line with the provisions of COA Circular No. 92-386 and the Handbook on
Property & Supply Management System. Appendix 1.0 of the said handbook provides
43
that after the Property/Supply Officer receives the deliveries and signs the DR, the
AIR is then prepared and forwarded to the Inspector together with a copy of DR and
PO for the inspection of deliveries. After inspection, the Inspector signs the
“Inspection” column then forwards the AIR to the Property/Supply Officer who then
signs in the “Acceptance” column, acknowledging receipt of the items delivered. The
Property/Supply Officer checks the appropriate box whether the delivery is complete
or partial and indicates the date of receipt.
Based on comparison made between the prescribed procedures and the actual
practice being adopted by the PGSO, the following deviations were noted:
a. AIRs were only prepared after inspection of deliveries by the Inspectorate

Team and not upon the receipt of deliveries either by the end-user or the
PGSO. The dates of inspection and acceptance are earlier than the date of
the AIR.
b. In the AIR format of the PGSO, the end-user is also required to sign in the
“Acceptance” column which is not included in the prescribed format under the
Manual on the New Government Accounting System (MNGAS) for Local
Government Units (LGUs). Thus, the process is prolonged since the
document is passed on between the signatories several times.
The signing of the “Acceptance” column of the PGS Officer and end-user in the AIR,
acknowledging the receipt of the items delivered should not be construed as the same
as the receipting/signing on the delivery receipt upon arrival of the goods/articles to
the agency’s premises. The handbook provides that after the receipt of the
goods/articles and temporary recording of the deliveries upon arrival of the
goods/articles to the agency’s premises, the deliveries are still subject to inspection
for conformity with the specifications and afterwards acceptance of the delivered
items.
During the exit conference, the PGS Officer and the Supply Officer agreed to follow
the procedures in the acceptance and inspection of deliveries as required by the
guidelines.
The late submission of AIRs precluded the timely evaluation and inspection of
deliveries by the Audit Team.
a. Direct the PGSO, Inspectorate Team, and all end-users to observe the
prescribed procedures on the receipt, inspection and acceptance of
deliveries in compliance with the Property & Supply Management System;
and
b. The PGSO to timely submit the AIRs to the Office of the Auditor in
accordance with rules and regulations.
44
8. Submission of Trial Balances, Bank Reconciliation Statements, and Financial
reports and its supporting documents were not on time due to limited
workforce, contrary to Sections 70 and 72 of the Manual on the New
Government Accounting System (MNGAS) for Local Government Units (LGUs)
and Sections 3.2 and 3.4 of COA Circular No. 96-011 dated October 2, 1996,
thus, precluded the Audit Team from the timely
verification/examination/analysis of the agency’s transactions and financial
reports.
Section 70, of MNGAS for LGUs, Volume I, provides:
“Pre-Closing Trial Balance. – The pre-closing trial balance is the trial

balance prepared from the general ledger accounts after the adjusting
journal entries have been journalized and posted. This is also termed as
adjusted trial balance.
Monthly pre-closing trial balance for each fund shall be submitted not
later than the twentieth day after the end of the month. It shall be
supported by the Status of Appropriations, Allotments and Obligation, for
both the current and continuing appropriations.
These reports shall be submitted to the following:
COA Unit Auditor – Original copy

Local Sanggunian – 1copy
Local Treasurer – 1 copy
Local Accountant – 1 copy”
Section 72 of the same Manual states:
“Post-closing Trial Balance. – Post-closing trial balance is the trial

balance prepared at the end of the year after the closing entries are
journalized and posted in the general ledgers. In the Post-closing Trial
Balance, all the nominal accounts (revenue, expense and intermediate)
are closed and the real accounts (assets, liability and equity) are shown
with balances. It shall be submitted not later than the fourteenth day of
February after the end of the calendar year with the following supporting
schedules:
a. Status of Appropriations, Allotments and Obligations; and
b. Subsidiary Schedule of General Ledger account balances;
Sections 3.2 and 3.4 of COA Circular No. 96-011 dated October 2, 1996 provides that
the Local Accountants shall within 10 days from receipt of the Bank Statements (BS),
reconcile the same BS with the General Ledgers and prepare the BRS in five copies.
The duplicate and quadruplicate copies of the BRS including the paid checks, original
copies of debit/credit memos, shall be submitted to the Auditor concerned for
verification within 10 days from receipt after the end of each month.
45
Moreover, Section 7.2.1 of the 2009 Rules and Regulations on the Settlement of
Accounts as prescribed for use under COA Circular No. 2009-006 dated September
15, 2009 provides that the Chief Accountant, Bookkeeper or other authorized official
performing accounting and/or bookkeeping functions of the audited agency shall
ensure that the reports and supporting documents submitted by the accountable
officers are immediately recorded in the books of accounts and submitted to the
Auditor within the first 10 days of the ensuing month.
As shown in Annex H, Bank Reconciliation Statements (BRS), Monthly Trial Balances

and corresponding vouchers, receipts and payrolls for all funds were not submitted on
time. Delays incurred for the submission of accounts for all funds are summarized as
follows:
Table 8: Schedule of Submission of Accounts as of December 31, 2021

Reports/Documents No. of days
Fund
required delayed
General Fund (GF) Bank Reconciliation Statement 18-40 days
Trial Balance 22-58 days
Vouchers, Receipts and 35-88 days
Payrolls
Special Education Fund Bank Reconciliation Statement 1-20 days
(SEF)
Payrolls
Trust Fund (TF) Bank Reconciliation Statement 1-20 days
Payrolls
Dr. Catalino Gallego Nava Bank Reconciliation Statement 1-54 days
Provincial Hospital
(DCGNPH)
Payrolls
It was noted that the submission of vouchers, receipts and payrolls of DCGNPH, SEF
and TF incurred the biggest delay of up to 172 days.
In an inquiry made with the Provincial Accountant, the following reasons were cited
for the cause of delay:
a. The submission of the financial reports and supporting documents under the
DCGNPH, SEF and TF, was given less priority over those of the General
Fund, due to limited number of personnel in the Accounting Office;
b. Reshuffling of accounting personnel in-charge of the DCGNPH accounts to

correct various errors in the accounting records and reports; and
46
c. Various accounting personnel tested positive for COVID-19 and underwent
quarantine, thus greatly affected the preparation and submission of the
financial reports and supporting documents.
During the exit conference, the Provincial Accountant commented that they will
ensure to give priority to the prompt submission of the financial reports and supporting
documents of all funds.
The delayed submission of financial reports and supporting documents precluded the
Audit Team from the timely verification/examination/analysis of said reports to prove
the propriety and completeness of transactions, as well as the accuracy and integrity
of the financial reports at year-end.
a. Provide additional personnel to assist in the preparation and submission of

the financial reports and supporting documents, particularly those of the
DCGNPH, SEF, and TF to avoid significant delays in the submission of
financial reports to COA; and
b. Timely monitor the preparation and submission of the financial reports and
its supporting documents in compliance with laws, rules and regulations.
AUDIT OF HOSPITALS
9. The Drugs and Medicines Inventory account of the Buenavista Emergency

Hospital has a negative balance of P2.738 million as of December 31, 2021 due
to non-use of the moving average method of costing for inventories as required
in the Manual on the New Government Accounting System for Local
Government Units and COA Circular No. 2015-009 dated December 1, 2015,
thus, rendered the accuracy and reliability of the said account in the financial
statements doubtful.
COA Circular No. 2015-009 dated December 1, 2015 prescribed the Revised Chart of
Accounts for Local Government Units. The Circular provides the account titles to be
used in the recording of financial transactions and its corresponding account number,
normal balance, and description. Annex B of the said Circular provides that the Drugs
and Medicines Inventory account (1-04-04-060) has a normal balance of “Debit”.
Section 115 of Manual on the New Government Accounting System (MNGAS) for
Local Government Units (LGUs), Volume 1 requires:
“The moving average method of costing shall be used for costing

inventories. This is a method of calculating cost of inventory on the
basis of weighted average on the date of issue. The Chief Accountant
shall compute the inventory cost monthly using the method.”
47
As of December 31, 2021, the Drugs and Medicines Inventory account under the
General Fund (GF) showed a negative balance amounting to P224,928.57.
Examination of subsidiary ledgers (SLs) disclosed that the negative balance pertained
to the Buenavista Emergency Hospital (BEH), shown as follows:
Table 9: Schedule of Drugs and Medicines Inventory Account of BEH and NVDH
Subsidiary Ledgers of Drugs and Medicines Amount

Inventory account 2021 2020
Buenavista Emergency Hospital (BEH) (2,738,040.65) (2,392,411.77)
Nueva Valencia District Hospital (NVDH) 2,513,112.08 21,881.39
Total (224,928.57) (2,370,530.38
)
The negative balance in the Drugs and Medicines Inventory account of the BEH has
increased by P345,628.88 or 14.45 percent compared to Calendar Year (CY) 2020
balance amounting P2.392 million.
According to the personnel in-charge at the PAO, the existence of the negative
balance was due to inaccurate determination of the cost of inventories. Instead of
using the moving average method of costing, they compute the inventory cost using
the sales/collection figure and work back the cost of sales based on a mark-up of 25
percent as set by the BEH.
Relative to this, an analysis was made by the Audit Team on the computation of cost
based on the 25 percent mark-up. Out of 173 daily sales reports, 16 of them were
examined and it was found that the actual mark-up of drugs and medicines reported
sold was not consistent to 25 percent only but actually exceeded the said mark-up,
thus, resulted in an overstatement in recording the cost of inventory, arriving at a
negative balance of the inventory account. (See Annex I)
In order to address the issue, the PAO required the BEH to submit their Daily Sales
Reports which contains the details of their daily sales including the breakdown of the
unit cost of the inventories sold. In response, the BEH started submitting their Daily
Sales Report from July 2021 onwards. However, the computation of the cost of
inventory using the said report started only in the months of November 2021 onwards.
Further, the PAO conducted a physical inventory of all drugs and medicines of the
BEH last December 29, 2021, however, the report was not used as basis for adjusting
the negative inventory account. The PAO explained that the inventory conducted was
part of their overall evaluation and audit of the BEH. The results of their evaluation
were incorporated in their Action Plan which included the proposed computerized
inventory system that would resolve the problem in their costing of inventories.
During the exit conference, the Provincial Accountant further explained that they were
not able to establish the correct balance of the drugs and medicines inventory despite
conducting a physical count because the BEH was not able to submit the unit cost of
the said inventories. He also said that in May 2022, they will have a dry run of the
computerized inventory system designed by the Information Technology personnel in
order to address the issue in the costing of inventories.
48
On the other hand, under the Revised Chart of Accounts for LGUs, the Drugs and
Medicines Inventory (1-04-04-060) account should only be used to record the cost of
drugs and medicines held for consumption. For drugs and medicines held for sale, the
proper account to be used is Merchandise Inventory (1-04-01-010). The Provincial
Accountant, upon verification, agreed to make the necessary adjustments to the
account classification.
The negative balance of the Drugs and Medicines Inventory due to non-use of moving
average method of costing for inventories rendered the correctness and reliability of
the affected accounts in the financial statements doubtful.
a. Cause the conduct of complete physical count of drugs and medicines held
for sale to establish the correct inventory balance to be used as beginning
balance in the proposed computerized inventory system;
b. Based on the correct inventory balance established, prepare the necessary

adjusting entries including reclassification of the Drugs and Medicines
Inventory account to Merchandise Inventory in compliance with the Revised
Chart of Accounts for LGUs; and
c. Henceforth, use the moving average method in costing inventories as

prescribed by the MNGAS for LGUs.
10. Receivables from patients of the DCGNPH have an outstanding balance of

P23.134 million as of December 31, 2021 and were not provided with Allowance
for Impairment due to lack of periodic analysis and assessment of its
collectibility, contrary to the provisions of International Public Sector
Accounting Standards (IPSAS), thus, overstated the receivables and exposed
the same to higher risk of non-collection.
Moreover, receivables of the BEH and NVDH arising from PHIC Claims, Medical
Assistance, and patients/clients’ promissory notes were not recorded in the
books due to non-submission of Monthly Report/Summary of Bills Rendered,
contrary to the provisions of IPSAS, thus, understated the receivables and
revenues accounts in the financial statements.
COA Circular No. 2015-009, prescribing the Revised Chart of Accounts for Local
Government Units provides that Account No. 1-03-01-010 - Accounts Receivable is
used to record the amount due from clients/customers arising from regular trade and
business transactions. Credit this account for collection of receivables or transfers.
Moreover, the same Circular described the Allowance for Impairment-Accounts

Receivable (1-03-01-011) account as the account credited when there is objective
evidence that the accounts receivable is impaired.
49
In addition, Paragraph No. 27 of the IPSAS 1 requires that Financial Statements shall
present fairly the financial position, financial performance and cash flows of an entity.
Fair presentation requires the faithful presentation of the effects of transactions, other
events and conditions in accordance with the definitions and recognition criteria for
asset, liabilities, revenue and expenses set out in the IPSASs. Paragraph No. 7 of the
same Standard further defines accrual basis of accounting as a basis of accounting
under which transactions and other events are recognized when they occur (and not
only when cash or its equivalent is received or paid). Therefore, the transactions and
events are recorded in the accounting records and recognized in the financial
statements of the periods to which they relate. The elements recognized under
accrual accounting are assets, liabilities, net assets/equity, revenue, and expenses.
Further, IPSAS 29 provides the guidelines on the Recognition and Measurement of

Financial Instruments. Paragraph Nos. 67 to 71 of the said Standard discussed the
assessment of the financial assets, its uncollectibility, and determination and
recognition of impairment losses.
Verification of the Accounts Receivable account of the DCGNPH disclosed that it

includes a huge amount of receivable from patients who either have signed
promissory notes for their hospital bills that were not covered by PHIC or have
remaining balance after deductions of PHIC and other medical assistance. In CY
2021, the receivable from patients has a beginning balance of P17.647 million with
additional receivables during the year amounting to P5.929 million, totaling to
P23.576 million. Out of this total, only P441,978.00 or 1.875 percent were collected
from patients, leaving a balance of P23.134 million.
Inquiry with the accounting personnel in-charge of the receivables account disclosed
that the preparation of the aging report is still on-going, thus, details of how long the
said receivables have been outstanding cannot be determined. Further, assessment
of collectibility was not made due to lack of periodic analysis of the receivables, thus,
Allowance for Impairment based on collectibility of receivable balances and evaluation
of such factors as aging of accounts, collection experiences of the agency, and
identified doubtful accounts, was not provided. The accounting personnel informed
that periodic analysis of the receivables was not made due to lack of personnel who
will specifically focus on handling the receivable accounts. Further, collection/demand
letters were sent to patients with outstanding balances but only a few settled their
balances. For CY 2021, however, they were not able to send the demand letters due
to the pandemic which limited the movement of personnel who personally deliver the
demand letters to the patients.
The lack of periodic analysis of the receivables and non-provision of Allowance for
Impairment, overstated the receivables and exposed the same to higher risk of non-
collection.
On the other hand, verification showed that BEH and the NVDH did not prepare the
Monthly Report/Summary of Bills Rendered and submit the same together with the
copies of the Statement of Accounts (SoAs) to the Provincial Accounting Office
(PAO), thus, receivables were not recognized in the books. According to the BEH and
NVDH personnel, they were not required to submit the said reports. Verification of the
available records of the BEH and NVDH disclosed the following receivables balances
as of December 31, 2021 is shown on the next page:
50
Table 10: Schedule of Collectibles/Receivables of BEH and NVDH
Collectibles/Receivables
Agency Remarks
PHIC Promissory Notes PCSO
BEH 1,757,580.00 724,672.30 10,000.00 Data as of
NVDH 448,400.00 20,885.00 0.00 Nov. 30, 2021
Total 2,205,980.00 745,557.30 10,000.00
The NVDH personnel informed that they only maintain a logbook for the receivables
arising from promissory notes from patients and maintain the safekeeping of the
latter. For PHIC claims, a database system is being maintained by a separate clerk,
while for other claims such as from Philippine Charity Sweepstakes Office (PCSO),
and other medical assistance, the Social Welfare Officer maintains the said records.
The BEH has also the same set-up except that they maintain a computerized record
for the receivables from promissory notes compared to the NVDH who manually
encodes in a logbook. They further said that collection/demand letters are prepared
and sent to those with patients with promissory notes; however, for CY 2021, the BEH
was not able to send the same. The BEH personnel explained that they have already
sent out collection letters in CY 2020, while in 2021 they follow-up through text
messaging and give them time to settle within the year.
Inquiry with the PAO disclosed that only the Report of Collections and Deposits
(RCDs) were submitted to their office, thus, revenues were recognized on a cash
basis because no receivables were recorded in the books. The PAO further said that
they required the hospitals to submit the Monthly Report/Summary of Bills Rendered
contrary to the statement of the BEH personnel. The report should have been the
basis of PAO in recording both receivables and accrued revenues.
In a letter reply to the Audit Observation Memorandum (AOM) issued, the

management informed that the BEH has submitted to the PAO the list of patients with
promissory notes for calendar years 2010 to 2021 and will closely coordinate with the
latter in compliance with the required submission of the said documents.
The non-submission of the Report/Summary of Bills Rendered resulted to non-

recognition of receivables and accrued revenues earned from patients/clients, PHIC
and other sources of medical assistance.
a. The DCGNPH prepare the aging of the receivables from patients, conduct
periodic analysis of the same and assess its collectibility, and regularly
send collection/demand letters to patients/debtors. Subsequently, set-up
Allowance for Impairment, in compliance with IPSAS 29; and
51
b. The Provincial Accountant require the BEH and NVDH to submit regularly
and on time the Monthly Report/Summary of Bills Rendered and use as
basis in recording in the books of account the receivables arising from PHIC
Claims, Medical Assistance, and patients/clients’ promissory notes and the
corresponding revenues.
COVID-19 AUDIT
11. Cash Donations for COVID-19 fund totaling P0.700 million from four private
donors were recorded in the books as Other Payables instead of Trust
Liabilities-LDRRMF and Subsidiary Ledgers were not maintained per donor, as
required in COA Circular No. 2014-002 dated April 15, 2014; thus, the affected
accounts were not properly presented in the financial records and statements.
Moreover, the cash donations have remained unutilized as of December 31,

2021 due to oversight by concerned offices in the monitoring of its receipt,
recording and utilization, thus, deprived the constituents from the availment of
assistance/programs to mitigate the effects of the COVID-19 pandemic.
Section IV(B) of COA Circular No. 2014-002 requires that, the cash donations shall be
(a) acknowledged through the issuance of Official Receipt; (b) deposited with an
authorized government depository bank (AGDB) under separate bank account for
DRRM Funds (DRRMF); and (c) entered in the Cash Receipts Record by the
designated Collecting Officer. Separate Report of Collections and Deposits (RCD) for
DRRM shall be prepared daily by the designated Collecting Officer and submitted to
the Accounting Unit for recording in the Cash Receipts Journal (CRJ) as "Trust
Liabilities DRRMF". It further states that the Accounting Unit shall prepare and
maintain separate Subsidiary Ledger (SL) for "Trust Liabilities-DRRMF" for cash
donations received amounting to P100,000.00 and above per donor per purpose
while those below P100,000.00 shall be grouped and posted in one SL labeled as
"Various Donors" per purpose.
Verification of cash donations to the Province of Guimaras as of December 31, 2021

disclosed that the amount of P0.700 million were received from four private donors in
CY 2020 intended for COVID-19 programs of the Province.
Verification of financial records disclosed that the cash donations were recorded
under the Other Payables account instead of Trust Liabilities-DRRMF account in
accordance with COA Circular No. 2014-002. Also, per confirmation with the
Provincial Accountant’s Office (PAO), no separate Subsidiary Ledgers (SLs) were
being maintained per donor for cash donations amounting P100,000.00 and above.
Instead, they were lumped under the Other Payables account, thus, monitoring per
donor may be difficult. Also, the affected accounts were not properly presented in the
financial records and statements.
In a letter reply to the AOM issued, the Provincial Accountant said that they will apply
the reclassification of the cash donations from Other Payables account to Trust
Liabilities-DRRMF account and maintain separate SL per donor in compliance with
the guidelines.
52
Moreover, it was noted that the total cash donations remained unutilized as of year-
end. Query with the Provincial Disaster Risk Reduction and Management (PDRRM)
Officer disclosed that they have no information regarding the receipt of the said
donations, thus, no program or proposal was made for the utilization of such funds.
On the other hand, the Provincial Treasurer informed that after the receipt of the said
donations, they immediately furnished the Governor’s Office with the copy of records.
Per inquiry with the Governor’s Office, the personnel in-charge admitted that they had
overlooked the availability of funds from the donations. She further stated that they
will immediately program the said funds for utilization this CY 2022.
The non-utilization of the cash donations for COVID-19 has deprived the constituents
from the availment of assistance/programs to mitigate the effects of the pandemic.
Further, the misclassification of accounts affected the proper presentation of accounts
in the financial records and statements.
a. The Provincial Accountant to reclassify the cash donations from Other

Payables account to Trust Liabilities-DRRMF account and maintain separate
SL per donor, in compliance with COA Circular No. 2014-002;
b. Ensure that there is proper coordination between the Provincial Disaster

Risk Reduction and Management Office (PDRRMO) and other offices for the
monitoring of the receipt, recording and utilization of all cash donations;
and
c. Immediately prepare a project proposal to be used as basis in the utilization

of cash donations to mitigate the effects of COVID-19 to the people of
Guimaras.
12. Nineteen sacks or equivalent to 955 kilos of rice, considered as welfare goods
for distribution to beneficiaries, were not properly managed and stored due to
lack of storage area, exposing them to rodents, pests and other elements, thus,
resulted in spoilage/wastage, contrary to Section 2 of Presidential Decree (PD)
No. 1445.
Section 2 of PD No. 1445, otherwise known as the State Audit Code of the
Philippines, provides that all resources of the government shall be managed,
expended, or utilized in accordance with law and regulations, and safeguarded
against loss or wastage through illegal or improper disposition, with a view to ensuring
efficiency, economy and effectiveness in the operations of government. The
responsibility to take care that such policy is faithfully adhered to rests directly with
the chief or head of the government agency concerned.
Further, Item VI.1 of COA Circular No. 2014-002 provides that the head of the agency
shall be primarily responsible for the safeguarding of all procured and donated
supplies, materials, equipment and relief goods against loss and wastage through
illegal or improper disposition, in accordance with Section 2 of Presidential Decree
No. 1445.
53
The COVID-19 pandemic has adversely affected the people of Guimaras including
business activities and regular jobs due to the restrictions imposed to contain or
prevent the spread of the virus in the whole Province. In order to address the effects
of the community quarantines which restricted the movement of the people and
affected their livelihood specifically those on a no work no pay basis, the Provincial
Government of Guimaras has distributed welfare goods to its constituents since the
start of pandemic in 2020.
On January 20, 2022, the Audit Team conducted an ocular inspection of the 19 sacks
or equivalent to 955 kilos of spoiled rice for disposal after receiving a copy of the
Waste Materials Report (WMR) from the Provincial General Services Office (PGSO).
Upon inspection, it was observed that the storage area where the sacks of spoiled
rice are located was not fit for the proper safekeeping of the welfare goods.
Pests/rodents were visible in the area; in fact, some of the sacks were already
damaged/torn due to the presence of rodents. Also, the welfare goods were exposed
to rain and other elements which further deteriorated their condition. Due to limited
capacity of the storage area, other sacks of spoiled rice were temporarily stored in the
vicinity of the Provincial General Services Office.
In reply to Audit Query No. 2022-011 dated February 21, 2022 regarding the spoiled
rice, the PGS Officer and PSWD Officer informed the following:
a. The rice purchased by the Provincial Government were immediately

distributed to the family beneficiaries and Quarantine Facilities;
b. The spoiled sacks of rice were donations from various private persons;
c. The spoiled sacks of rice were spillage during the repacking of relief goods;
d. Due to volume of donations, the Provincial Engineer’s Office (PEO) storage

area cannot accommodate all the relief goods, hence, some sacks of rice
were stored at the Red Cross building across the PEO storage area;
e. Due to the urgency of the situation the Province cannot provide a suitable
warehouse for the relief goods since all available spaces of the Province were
occupied by the different offices because of the demolition and construction
of the new capitol building; and
f. The spoiled rice is not fit for human consumption; hence it was transferred
without cost to Guimaras Seed Growers Multi-Purpose Cooperative to be
used as fertilizer and feeds to animals.
On the claim that the said sacks of spoiled rice were the result of spillage during the
repacking of relief goods, the Audit Team considered the 955 kilos of rice to be way
too much for a spillage and that it could have been avoided with proper handling.
Further, since the Province has limited storage areas for relief goods and could not
provide a suitable storage for the remaining sacks of rice, the PSWDO, PGSO and
54
other offices in-charge of the receipt and distribution of relief goods could have
prioritized the immediate distribution to beneficiaries, thus avoided the spoilage.
Also, out of the 19 sacks of spoiled rice, only nine were disposed through transfer
without cost to the Guimaras Seed Growers Multi-Purpose Cooperative. The
remaining sacks of spoiled rice were still stored in PEO storage area.
Lack of proper storage areas for the 19 sacks of rice which could have been
distributed to more beneficiaries resulted in spoilage/wastage.
In a letter reply to the Audit Observation Memorandum (AOM) issued, the

management informed that they will assign a person to specifically manage the
storage area/warehouse, provide available storage area, exert best efforts to prevent
spoliation of rice, and if it becomes unavoidable, to cause the immediate disposal of
the same in order to give way to incoming rice to be stored.
a. Assign a person to specifically manage the storage area/warehouse for the

relief goods to ensure that all procured and donated goods are properly
stored and preserved against deterioration;
b. If available storage area could not further accommodate relief goods such
as donations from private persons or organizations, the offices or
departments assigned in the receipt and distribution of the relief goods
ensure that these goods especially those which are prone to deterioration
be promptly distributed to identified beneficiaries; and
b. Cause the immediate disposal of the remaining spoiled rice to give space for
storage of new stocks or goods in the future, subject to existing guidelines
and procedures.
20% DEVELOPMENT FUND (DF)
13. The 20% Development Fund (DF) was not optimally utilized due to delayed and
non-implementation of various projects amounting to P23.136 million and
P22.085 million, respectively, as provided under the DBM-DOF-DILG JMC No. 1
dated November 4, 2020, thus, the socio-economic benefits derived from
development projects were not fully delivered to constituents.
The Department of Budget and Management, Department of Finance, and

Department of Interior and Local Government (DBM-DOF-DILG) Joint Memorandum
Circular (JMC) No. 1 dated November 4, 2020 provides the following guidelines in the
utilization of the 20% Development Fund:
“Section 3.0 General Policies
3.1 x xx
55
3.2 The LGUs are enjoined to observe the following policies and guidelines in the
appropriation and utilization of the 20% DF:
3.2.1 The 20% DF shall be utilized to finance the LGUs' priority

development projects, as embodied in their respective duly
approved local development plans, and medium-term and
annual investment programs, which should be harmonized
with the Regional Development Plan and the Philippine
Development Plan.
3.2.2 The development projects that may be included under the 20%
DF shall be those that are necessary, appropriate, or
incidental to efficient and effective local governance, and
those which are essential to the promotion of the general
welfare of the people.
3.2.3 The LGUs shall ensure that the development projects to be

funded out of the 20% DF are well-planned and procurement-
and-implementation-ready.
Section 4.0 also states the responsibility of the LCE, as follows:
“The responsibility and accountability in ensuring that the development

projects funded under the 20% DF comply with the guidelines under this
JMC and optimally contribute to the attainment of desirable socio-
economic targets and outcomes of the LGU shall rest upon the local chief
executive and other officials concerned.”
Review of the 20% DF showed that out of the total appropriated amount for Calendar
Year (CY) totaling P148.013 million, five projects with a total appropriation of P22.085
million were not implemented during the year, as presented in the Table below:
Table 11: Schedule of Unimplemented 20% Development Fund Projects
Appropriation per Utilization/ Balance/ Unutilized

Programs /Projects/ Activities (PPAs)
Annual/ Obligation Appropriation
No. per SAAOB
Supplemental Budget (per SAAOB) (b-c)
(a) (b) (c) (d)
Current Appropriation
1 Construction/Completion of Community 5,000,000.00 0.00 5,000,000.00
Fish Landing Center (CFLC)
2 Improvement/Concreting of Mclain - 10,000,000.00 0.00 10,000,000.00
Nazaret Road (RnR from Mclain to
Airport with Riprapping and Drainage)
3 Construction of Philippine Red Cross 3,000,000.00 0.00 3,000,000.00
(PRC) Building with Blood Bank Facility
4 Improvement/Concreting of Salvacion - 1,300,000.00 0.00 1,300,000.00

Old Poblacion (Core) Road (Second
segment)
5 Health Emergency Response Program 2,785,000.00 0.00 2,785,000.00
(Provision of medical supplies and
equipment, oxygen cylinders for the
DCGNPH) 56
Total 22,085,000.00 0.00 22,085,000.00
See Annex J for details.
Further, delays were also noted in the implementation of seven projects with a total
appropriation of P23.136 million. It includes four projects amounting to P17.365
million under the current appropriation, and another three totaling P5.771 million in
the continuing appropriation, as shown on the next page:
Table 12: Schedule of Delayed Projects under 20% Development Fund
Appropriation per Utilization/ Balance/ Unutilized

Programs/Projects/ Activities (PPAs)
Annual/ Supplemental Obligation Appropriation Target Date of Percentage of
No. per SAAOB Date Started
Budget (per SAAOB) (b-c) Completion Completion
(a) (b) (c) (d)

Delayed Implemented Projects
Current Appropriations
1 Support to Establishement of SWM 4,275,000.00 3,021,319.23 1,253,680.77 04/22/2021 09/18/2021 73.11%
Facilities (Construction of SWM Center)
2 Improvement/Concreting of Mclain 3,000,000.00 1,778,169.64 1,221,830.36 06/21/2021 Original: 09/08/2021 70%

Access Road Revised: 01/21/2022
3 Improvement of Balay Silangan 4,100,000.00 1,754,921.62 2,345,078.38 10/15/2021 04/12/2022 45%

4 Health Emergency Response Program 5,990,000.00 3,600,000.00 2,390,000.00
(Procurement of additional COVID 19
Test kits)
Total Current Appropriations 17,365,000.00 10,154,410.49 7,210,589.51
Continuing Appropriations
5 Improvement of Buenavista Emergency 1,250,000.00 1,141,196.80 108,803.20 12/12/2019 02/18/2020 46.16%
hospital (construction of Morgue and
Perimeter Fence)
6 Construction of tourism Multi-Purpose 4,000,000.00 198,504.55 3,801,495.45 01/24/2021 Original: 06/22/2021 30%
Hall with Viewing Deck at Municipal Site Revised: 08/12/2021
(Phase III)
7 Regular Coastal Water Quality 521,133.06 108,236.00 412,897.06 62.50%

Monitoring
Total Continuing Appropriations 5,771,133.06 1,447,937.35 4,323,195.71
Total Delayed Implemented Projects
23,136,133.06 11,602,347.84 11,533,785.22
(Current and Continuing)
57
See Annex K for details.
Based on the Status Report on the implementation of the projects and Report on
Publicized Projects, the delay and non-implementation of the projects were attributed
among others, to the following:
a. Delay in the preparation of the revised documents due to the effect of the
pandemic;
b. Delay in the finalization of project documents;
c. Procurement process started only in December 2021;
d. Purchase Request not yet submitted by the end-user;
e. Projects are under time suspension due to on-going preparation of plan for
variation order, lack of building permit and road right of way issue.
f. Suspension of project due to Request for information (RFI) of the contractor

which was not immediately responded because of strict protocols and
travelling restriction relative to COVID-19 pandemic.
Item 3.2.3 of the above-mentioned JMC states that the LGUs shall ensure that the
development projects to be funded out of the 20% DF are well-planned and
procurement-and-implementation-ready, hence, processing of documents for
application of building permits should have been done prior to the implementation of
the projects and Road Right-of-Way issues should have been considered in the
planning stage to ensure that the project is feasible. These are recurring issues in the
project implementation which were still not fully addressed. While delays should be
given consideration because of the pandemic, it should be noted that effective and
efficient planning for the projects to be undertaken should be observed to avoid
further delays or non-implementation of the projects during the year.
In a letter reply to the AOM issued, the Provincial Engineer informed that the
implementing unit will proactively continue to encourage the direct beneficiaries to
facilitate the approval of deed of donation and all other required documents needed
for the future projects to avoid any delays in the procurement and in the physical
implementation.
The non-optimal utilization of the 20% DF due to delayed/non-implementation of

projects affected the timely delivery to constituents of the socio-economic benefits
derived from development projects.
a. Address the recurring problems on Right-of-Way and lack of building permit
58
and ensure that necessary documents required prior to the implementation
of the projects are already accomplished before its commencement to avoid
delays;
b. Hasten the implementation of delayed/non-implemented 20% DF projects to

expedite the delivery of essential services to the constituents; and
c. Extensively plan the projects that should be included in the Annual

Investment Program and ensure that the same are feasible for
implementation within the year.
5% PROVINCIAL DISASTER RISK REDUCTION AND MANAGEMENT FUND
14. The Monthly Reports on Utilization of Disaster Risk Reduction and Management
Fund (DRRMF) were not submitted within the prescribed period due to lack of
timely coordination between the Provincial Disaster Risk Reduction and
Management Office (PDRRMO) and the Provincial Accountant’s Office for the
reconciliation of their financial records, contrary to the provisions of COA
Circular No. 2012-002 dated September 12, 2012 and the Implementing Rules
and Regulations (IRR) of Republic Act No. 10121, thus, precluded the Audit
Team from timely verification/review of the utilization of the DRRM funds, and
further resulted to delayed posting of such information to the public in
compliance with full disclosure policy.
Item 5.1.5 of COA Circular No. 2012-002 provides that the Report on Sources and
Utilization of DRRMF shall be prepared and certified correct by the Local Accountant.
The Local Disaster Risk Reduction and Management Officer (LDRRMO) shall submit
the report on or before the 15th day after the end of each month through the Local
Disaster Risk Reduction and Management Council (LDDRMC) and Local
Development Council (LDC) to the COA auditor of the LGU.
Further, Section 5, Rule 18 of the IRR of Republic Act No. 10121 also known as the
“Philippine Disaster Risk Reduction and Management Act of 2010” states that the
LDRRMCs shall make public its reports on the utilization of the LDRRMF by
publication and posting thereof in a conspicuous place, including websites, if any, of
the LGU/LDRRMO. The reports of the LDRRMCs on the utilization of the LDRRMF
shall be available to the public.
Verification of the agency’s compliance with the prescribed guidelines showed that
monthly Reports on Sources and Utilization of DRRM Fund for CY 2021 were not
submitted within the prescribed period. Submissions of the reports to the office of the
auditor as of February 23, 2022 are summarized as follows:
Table 13: Schedule of Submission of Monthly Reports on Sources and Utilization of

DRRM Fund
Period No. of Days
Deadline Date Submitted
Covered Delayed
January 02/15/2021 05/19/2021 93
February 03/15/2021 05/19/2021 65
59
Period No. of Days
Deadline Date Submitted
Covered Delayed
March 04/15/2021 05/19/2021 34
April 05/15/2021 12/22/2021 221
May 06/15/2021 12/22/2021 190
June 07/15/2021 12/22/2021 160
July 08/15/2021 02/21/2022 190
August 09/15/2021 02/21/2022 159
September 10/15/2021 02/21/2022 129
October 11/15/2021 03/01/2022 100
November 12/15/2021 03/01/2022 70
December 01/15/2022 03/01/2022 39
In reply to Audit Query No. 2022-07 dated February 15, 2022 issued as to the
reason/s for delays and non-submission of the reports, the LDRRM Officer
commented the following:
a. The personnel in-charge of the financial report was on Work-From-Home

(WFH) status and at times their office was locked down due to COVID-19
pandemic;
b. Delay in the release of financial report from the Provincial Accountant’s Office
(PAO) due to some validations.
On the other hand, the Provincial Accountant commented that the utilization reports
are being checked with the accounting records and delays were incurred in the
finalization of their monthly financial reports. However, the significant delays in the
submission of the utilization reports of the PDRRMO could not be mainly attributed
only to their delays.
Comparative analysis of the submission of Monthly Trial Balance and its supporting
documents from the Provincial Accountant’s Office with the submission of Monthly
Reports on Sources and Utilization of DRRM Fund from the PDRRMO disclosed the
following:
Table 14: Schedule of Submission of Monthly Trial Balance
Date of Submission of Date of Submission of

Period Covered
Trial Balance Utilization Report
January 04/13/2021 05/19/2021
February 04/27/2021 05/19/2021
March 06/07/2021 05/19/2021
April 06/18/2021 12/22/2021
May 08/04/2021 12/22/2021
June 09/16/2021 12/22/2021
July 10/07/2021 02/21/2022
August 11/11/2021 02/21/2022
60
Date of Submission of Date of Submission of
Period Covered
Trial Balance Utilization Report
September 11/24/2021 02/21/2022
October 01/05/2022 03/01/2022
November 01/11/2022 03/01/2022
December 02/14/2022 03/01/2022
Based on the data above, the significant delays in the submission of the DRRMF
utilization reports could not be directly attributed to the delayed submission of
financial reports from the PAO. In fact, the PAO has already submitted all their 2021
financial reports as of February 14, 2022 while the October to December 2021
DRRMF utilization reports were only submitted on March 1, 2022.
On their reason that the personnel in-charge in the preparation of the utilization
reports was on WFH status, it is to be emphasized that validation of financial records
with the accounting office would still be possible through online communications
already available since the pandemic occurred, when Alternative Work Arrangements
are allowed.
Also, verification of the agency’s compliance on the full disclosure of the said reports
to the public, upon checking on their official website, reports posted were as of the
month of June 2021 only.
During the exit conference, the PDRRMO personnel and the Audit Team discussed
the problems encountered in the preparation and submission of the required reports
and came up with solutions to address the concerns in order for them to comply with
the submission of the said reports within the prescribed period and posting of the
same in the LGU’s website.
The delayed submission of the Monthly Report on Sources and Utilization of DRRMF
precluded the Audit Team from the timely verification/review of the utilization of the
DRRM Fund and further affected the agency’s compliance in the full disclosure of the
said reports to the public.
a. The PDRRMO ensure timely coordination with the Provincial Accountant’s

Office for the reconciliation of their financial records in order to prepare and
submit DRRMF utilization reports within the prescribed period; and
b. Management ensure compliance with the full disclosure policy by posting

the monthly DRRMF utilization reports in a conspicuous place and on the
agency’s website.
15. Utilizations of unexpended Local Disaster Risk Reduction and Management

Fund (LDRRMF) of previous years amounting to P13.469 million were not
61
reported in the Monthly Report on Utilization of the Disaster Risk Reduction and
Management Fund (DRRMF) due to lack of monitoring of the proper preparation
of reports to comply with the prescribed format and details, contrary to COA
Circular 2012-002, thus, precluded transparency of information and
accountability for utilizations of the said fund.
COA Circular No. 2012-02 was issued to cover the accounting and reporting
requirements of the LDRRMF, NDRRMF transferred to LGUs, funds received from
other LGUs and other sources starting with the unspent balance of the funds for
disaster risk reduction and management (DRRM) for CY 2011 and years thereafter.
Item 5.1.5 of the Circular provides that a Report on Sources and Utilization of DRRMF
using the format provided by the Circular shall be prepared and certified correct by
the Local Accountant. The Local Disaster Risk Reduction and Management Officer
(LDRRMO) shall submit the report on or before the 15th day after the end of each
month through the Local Disaster Risk Reduction and Management Council
(LDDRMC) and Local Development Council (LDC) to the COA auditor of the LGU.
Review of the Report on Sources and Utilization of DRRMF submitted showed that
disbursements charged against the unexpended LDRRMF of previous years’
appropriations transferred to the Special Trust Fund were not reported. Details of the
said disbursements are shown in the Table below:
Table 15: Schedule of Disbursements against unexpended LDRRMF of previous

years not reported in the Report on Sources and Utilization of DRRMF
Programs, Projects and Activities Amount
a. Procurement of Equipment/Airborne Disinfection ₱7,549,962.00
Machines (7 units) under the Health Emergency
Response Program
b. Payment for CCTV-Cameras and Radio (Handset, Base 3,580,485.00
and Antenna with installation and communication) for
Human-Induced Hazards.
c. Procurement of Patient Transport Vehicles for EREID (1 1,900,000.00
Unit ambulance & 1-unit pick-up)
d. Operationalization of PRC Blood Letting and Insurance 230,250.00
of Volunteers and Blood Donors.
e. Payment for Hotel/Isolation Facility of Returning 160,000.00
Residents/ROFs in Need of Assistance and other COVD-
19 related equipment/supplies including fuel, lubricants &
repair of disaster rescue emergency vehicles.
f. Payment for 21 sacks of rice. 48,300.00
Total ₱13,468,997.00
The Local Disaster Risk Reduction and Management Officer (LDRRMO) said that the
preparation and submission of the utilization reports was delegated to her staff and
she entirely relied that the latter would be able to properly accomplish and timely
submit the required reports. In order to address the deficiency, she assured that
monitoring of their compliance with the guidelines in the preparation of the required
reports will be done.
62
The Audit Team has also reminded the said staff to comply and include in the report
the disbursements charged against the unexpended LDRRMF of previous years’
appropriations in order to correct their succeeding reports which were not yet
published on their website. However, the latter still did not reflect the required details
in their succeeding submissions.
During the exit conference, the PDRRM Officer agreed to comply with the audit
recommendations.
The non-inclusion of information and utilizations charged against the previous years’
appropriations transferred to the Special Trust Fund in the Report on Sources and
Utilization of DRRMF affected the transparency of information and accountability for
utilization of the said fund.
We recommended and the LDRRM Officer agreed to closely monitor the proper
preparation of the Monthly Report on Utilization of the DRRMF and ensure the
inclusion of information and utilizations pertaining to previous years’
appropriations transferred to the Special Trust Fund.
PHILIPPINE RURAL DEVELOPMENT PROJECT (PRDP)

16. Construction in Progress (CIP) accounts under the Philippine Rural
Development Project (PRDP) were overstated by P165.535 million due to: a.)
non-reclassification to the appropriate Property, Plant and Equipment (PPE)
account of completed projects totaling P160.856 million; and b.) erroneous
recording to CIP of liquidation for fund transfers to Proponent Groups (PGs)
amounting to P4.678 million, contrary to Section 50 of the Manual on the New
Government Accounting System (MNGAS) for Local Government Units (LGUs),
Volume I, and the provisions of International Public Accounting Sector
Standards (IPSAS), thereby affecting the fair presentation of the PPE and other
related accounts in the financial statements.
Section 50 of the Manual on the New Government Accounting System (MNGAS) for
Local Government Units (LGUs), Volume 1 provides:
“Property, plant and equipment to be constructed may be classified as
agency assets and public infrastructures. Agency assets are those to be
used by the LGU concerned, like buildings, while public infrastructures
are those to be used by the general public. The construction period
theory shall be used in recording both types of assets.
During the Construction period, agency assets and public infrastructures

shall be taken up in the books as - ‘Construction in Progress’ with the
appropriate asset classification. As soon as the project is completed, the
Construction in Progress for Agency asset is closed to the appropriate
asset account. xxx”
Moreover, the International Public Accounting Sector Standards (IPSAS) chart of
accounts defines the following Construction in Progress (CIP) accounts:
Account Title Construction in Progress – Infrastructure Assets
Account Number 1-07-10-020
63
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.
Account Title Construction in Progress – Buildings and Other

Structures
Account Number
1-07-10-030
Normal Balance
Debit
Description
This account is used to record the accumulated cost or
other appropriate value of buildings and other
structures which are still in the process of construction
or development. Credit this account for reclassification
to the appropriate Buildings and Other Structures
account upon completion.
Review of the CIP accounts under the PRDP disclosed that there were five
construction projects totaling P168.724 million. It was noted that the Status Report of
Projects of the Provincial Engineer reported four completed projects as of year-end
with a total cost of P160.856 million but the same were not transferred to the
appropriate PPE accounts, as shown on the next page:
Table 16: Schedule of CIP accounts under PRDP
64
Balance per
Date Percentage of Physical
Name of Project books as of Date Started
Completed Accomplishment
Dec. 31, 2021
A. COMPLETED PROJECTS NOT YET TRANSFERRED TO APPROPRIATE PPE ACCOUNT
1 Construction of 10 units Seaweed Dryer 10,742,877.44 07/03/2017 05/18/2018 100%
cum storage
2 Rehabilitation/Concreting of Bugnay-Sapal- 140,695,552.62 10/05/2017 11/07/2020 100%
Maabay FMR
3 Construction of Concrete Guard House 1,224,773.40 11/10/2019 11/10/2020 100%
4 Construction of Guimaras Mango 8,192,990.36 02/21/2019 02/02/2021 100%
Production Consolidation and Marketing
Enterprise (GMPCME) Packing House
Sub-total 160,856,193.82
B. ON-GOING PROJECTS
5 Construction of Native Chicken Production 7,867,568.61 03/15/2021 80.423%
Facilities of the "Isla de Guimaras Native
Chicken Production and Marketing
Enterprise
Sub-total 7,867,568.61
GRAND TOTAL 168,723,762.43
The Provincial Accountant informed that the CIP accounts were not adjusted to their
appropriate PPE accounts because the Provincial Engineer’s Office was not able to
submit the necessary documents such as the Certificate of Project Completion, Status
Reports related to the completion of the projects and other related documents that
should have been used as bases in the reclassification of the said CIP accounts to
their appropriate PPE accounts.
In addition, it was also noted that the CIP-Infrastructure Assets (1-07-10-020) was
erroneously used to record in the books Projects 1, 3, 4 and 5 instead of the CIP-
Buildings and Other Structures (Account Code 1-07-10-030). Verification disclosed
that the aforementioned Projects pertain to the construction of buildings and other
structures. Buildings account as defined in the IPSAS chart of accounts includes
office buildings, research/convention/training centers, agricultural laboratories,
warehouses, cold storage and the like, for use in government operations. On the
other hand, Other Structures account includes other structures for use in government
operations or for income-generating purposes.
The accounting personnel in-charge of recording the PRDP transactions informed that
they overlooked the account classification and will subsequently adjust the same.
Analysis of the CIP account further disclosed that liquidations totaling P4.678 million
for fund transfers to PGs were erroneously debited to CIP-Infrastructure assets
account, instead of the Due to National Government Agencies (NGAs) account, as
shown on the next page:
Table 17: Schedule of Liquidation of Fund Transfers to PGs erroneously debited to

CIP accounts
65
Particulars JEV No. Amount CIP account debited Should be
1 Liquidation of fund transfers to 300-2112-0190 1,541,920.00 CIP-Infrastructure Due to NGAs-GEF
Panonbolon Unified Fisherfolk's asset-GEF
Association (PUFA)
2 Liquidation of fund transfers to 300-2112-0190 385,480.00 CIP-Infrastructure Due to NGAs-GEF PLGU
Panonbolon Unified Fisherfolk's asset-GEF PLGU
Association (PUFA)
3 Liquidation of fund transfers to 300-2112-0191 1,650,606.00 CIP-Infrastructure Due to NGAs-I-REAP LP
Guimaras Mango Growers and asset- I-REAP LP
Producers Dev't. Cooperative
(GMGPDC)
4 Liquidation of fund transfers to 300-2112-0191 550,202.00 CIP-Infrastructure Due to NGAs-I-REAP GOP
Guimaras Mango Growers and asset- I-REAP GOP
(GMGPDC)
5 Liquidation of fund transfers to 300-2112-0191 550,202.00 CIP-Infrastructure Due to NGAs-I-REAP PLGU
Guimaras Mango Growers and asset- I-REAP PLGU
(GMGPDC)
Total 4,678,410.00
The accounting personnel in-charge of the PRDP records commented that CIP-
Infrastructure assets account was debited since under Trust Fund, no expense is
recognized. However, this CIP account is only debited for the accumulated cost or
other appropriate value of infrastructure assets that are still in the process of
construction or acquisition, as defined in IPSAS chart of accounts. Verification of
records showed that the Due to NGAs account was set-up in the initial recording of
funds received from the national agency. Hence, based on the foregoing, the proper
account to be debited for the recording of the liquidations is the Due to NGAs. The
accounting personnel agreed and adjusting entries will be made to correct the
erroneous entries.
Overstatement and misclassification of CIP accounts affected the fair presentation of

the PPE and other related accounts in the financial statements as of December 31,
2021.
a. Coordinate with the Provincial Engineer in order to secure copies of the

related supporting documents such as Project Status Reports, Certificate of
Project Completion and other related documents, to be used as bases in the
reclassification of completed construction projects under the CIP to the
appropriate PPE account; and
66
b. Prepare the necessary adjusting entries in the books to correct the
misclassified CIP accounts and the erroneous recording to CIP accounts of
liquidation for fund transfers to PGs.
17. Fund transfers to five Proponent Groups (PG) totaling P5.507 million for the
implementation of various sub-projects remained outstanding in the books at
year-end due to: a.) unrecorded liquidation amounting to P1.250 million; and b.)
delayed implementation by the PG of sub-projects totaling P4.257 million,
contrary to Item 5.4.2 of the I-REAP Operations Manual of the Philippine Rural
Development Project (PRDP) and the provisions of the Enterprise Investment
Agreement (EA), thus, resulted in the overstatement of the receivable accounts
in the financial statements at year end.
Item 5.4.2 of the I-REAP Operations Manual of PRDP enumerates the required
documents for liquidation of fund transfers as follows:
1. Fund utilization report indicating the summary of expenses and the status
report of accomplishments, certified by the Accountant, approved by the
President/Chairman of the PG and verified by the internal auditor or
equivalent official of the Provincial Local Government Unit (PLGU);
2. Geo-tagged pictures of implemented enterprise;
3. Inspection report and certificate of project completion issued by the PLGU

authorized representative;
4. Proof of verification by the PLGU official on the validity of the documents

submitted by the PG;
5. Official Receipt (OR) issued by the granting PLGU acknowledging return by

the PG of any unutilized/excess amount of cash advance;
6. List of equipment/vehicles procured by the PG out of enterprise funds

indicating its brief description, date acquired, acquisition cost and final
disposition; and
7. Monthly Statement of Receipts and Expenditures (SRE) as liquidation report.
Further, the Enterprise Investment Agreement (EA) between the Province (PLGU)
and the five Proponent Groups (PG) namely, Sabang Seaweed Growers Association
(SSGA), Panobolon Unified Fisherfolks Association (PUFA), Asosasyon Sang Mga
Magamay Nga Mangingisda Sang Suclaran, Brgy. Lawi Fisherfolks Association, Inc.,
and Guimaras Mango Growers and Producers Development Cooperative (GMGPDC)
provides among others, the following responsibilities of the PG:
1. Submit required physical and financial reports to the PLGU (Section 5.02,
letter h); and
67
2. Status Reports such as SRE, and/or Monthly Progress Report on the
Subproject shall be forwarded by the PG to the PLGU on or before the 5th
day of the ensuing month in such details and frequency as may reasonably
be requested subject to validation by the PLGU and RPCO (Section 7.04).
Review of the CY 2021 financial reports of PRDP showed receivable balances from
the above-mentioned Proponent Groups (PGs) totaling P5.507 million. Details of the
said balance are shown as follows:
Table 18: Schedule of Fund Transfers to Proponent Groups

Liquidation
Ending
Balance, Jan. 1, recorded
Proponent Group Balance,
2021 during the
Dec. 31, 2021
year
A. Fund Transfers with Unrecorded Liquidation
1 Sabang Seaweed Growers Association 1,250,117.85 0.00 1,250,117.85
Sub-total 1,250,117.85 0.00 1,250,117.85
B. Fund Transfers Without Liquidation from PG
2 Panobolon Unified Fisherfolks Association 2,008,000.00 1,927,400.00 80,600.00
3 Asosasyon Sang Mga Magamay Nga Mangigisda 1,038,000.00 0.00 1,038,000.00

Sang Suclaran
4 Brgy. Lawi Fisherfolks Association, Inc. 1,038,000.00 0.00 1,038,000.00
5 Guimaras Mango Growers and Producers 4,214,031.00 2,113,699.31 2,100,331.69
Development Cooperative
Sub-total 8,298,031.00 4,041,099.31 4,256,931.69
Grand Total 9,548,148.85 4,041,099.31 5,507,049.54
See Annex L for details
The balances pertain to fund transfers from 2017 to 2019 to five PG as shown in
Annex L. For fund transfers to Sabang Seaweed Growers Association (SSGA) with a
balance of P1.250 million, the Provincial Project Management Implementing Unit
(PPMIU) in their reply to Audit Query No. 2022-08 dated February 16, 2022, informed
that Liquidation Reports (LRs) were already submitted to the Provincial Accountant’s
Office (PAO) last October 28, 2020 with proof of receipt of the latter. The accounting
68
office was not able to retrieve the said documents. This Office has also provided to
the PAO copies of the LRs furnished by the PPMIU for fund transfers to SSGA,
Panobolon Unified Fisherfolks Association (PUFA), and Guimaras Mango Growers
and Producers Development Cooperative (GMGPDC) last January 4, 2022 to be used
as basis in recording the liquidation in the books. However, the accounting personnel
in-charge of the PRDP explained that liquidations recorded were only for PUFA
amounting to P1.927 million, and GMGPDC amounting P2.114 million because these
were the ones endorsed to her, thus, liquidation for SSGA was still not taken up in the
books and remained outstanding at year-end.
As gleaned in the above Table, the fund transfers to PUFA, Asosasyon Sang Mga
Magamay Nga Mangigisda Sang Suclaran (ASMMNMSS), Barangay Lawi Fisherfolks
Association, Inc. (BLFAI), and GMGPDC totaling P4.257 million were not yet
liquidated by the PG.
Inquiry with the PPMIU revealed that despite transfer of funds to the PG in CYs 2017
and 2019, the implementation of four sub-projects were still on-going in CY 2021. For
PUFA Seaweed Production and Marketing Enterprise sub-project, the unliquidated
amount of P80,600.00 represents the remaining balance for the procurement of
packages under the 1st Tranche as verified in the Status Report of PRDP projects
submitted by the PPMIU. The 2nd Tranche funds were downloaded to the Province
last February 2021. However, the amount, together with the PLGU counterpart was
not yet transferred to PUFA for the procurement of items under the 2nd Tranche.
For the Lawi Fisherfolk Association Seaweed Production and Marketing Enterprise
sub-project, out of the total amount of P1.038 million, the BLFAI has successfully
procured three items amounting to P356,000.00. The PPMIU stated that farm area
identification is needed before planting of seaweed seedlings and this will identify
suitable or proper culture areas and ensure healthy growth of seaweed seedlings.
They further said that they are in coordination with the BLFAI for the conduct of the
activity.
Moreover, for the San Lorenzo Seaweed Production and Marketing Enterprise sub-
project, procurement process has started last CY 2020, and production cycle was
supposedly to start in 2021. However, due to the unavailability of the seaweed
seedlings, the PG Asosasyon Sang Mga Magamay nga Mangigisda Sang Suclaran
was not able to continue the implementation.
For the Guimaras Mango Production, Consolidation and Marketing Enterprise sub-
project, the procurement process by PG with the assistance of PPMIU was still on-
going.
The PAO informed that demand letters were already sent to the concerned PG for the
unliquidated balances, however, no liquidation report was received at the end of the
year.
In their letter reply to the Audit Observation Memorandum (AOM) issued, the PAO
informed that have already coordinated with the PPMIU regarding the liquidation
documents already submitted by the PG and will subsequently record the same in the
books upon checking its completeness. The PPMIU, on the other hand informed that
69
they will closely monitor the implementation of the subprojects by the PGs to ensure
that all fund transfers from the Province will be subsequently liquidated.
Non-recording of the PG’s submitted liquidation reports and non-submission of

liquidation documents to the Province due to delayed implementation of sub-projects
by the PG resulted in the overstatement of the receivable accounts in the financial
statements at year-end.
a. Require the Provincial Accountant to coordinate with the PPMIU Head to

retrieve the submitted liquidation documents of the Sabang Seaweed
Growers Association and use the same as basis in recording its liquidation
in the books; and
b. Require the PPMIU to closely monitor and assist the PG in its

implementation of the sub-projects to ensure that funds transferred are
immediately utilized/disbursed and liquidation reports are timely submitted
by the PG to the Province.
COVID-19 VACCINATION PROGRAM
Remaining
Target Individuals with
Local Government Unit Projected Number of
Population at least One
(LGU) Population Vaccinees to
(80%) Dose
be reached
Municipality of Buenavista 54,520 43,616 33,271 10,345
Municipality of Jordan 39,019 31,215 32,491 (1,276)
Municipality of Nueva Valencia 43,031 34,425 27,392 7,033
Municipality of San Lorenzo 28,227 22,582 16,960 5,622
Municipality of Sibunag 23,950 19,160 14,665 4,495
Total 188,747 150,998 124,779 26,219
GENDER AND DEVELOPMENT (GAD) PROGRAM
For CY 2021, the Province of Guimaras has a total GAD budget of P124,615,867.94 or
16.15 percent of the total annual budget of P771,684,084.00. Of the total GAD budget, the
Province has utilized a total amount P101,261,866.92 or 81.26 percent for calendar year
2021.
STATUS OF SUSPENSIONS, DISALLOWANCES AND CHARGES
70
The balances of the Suspensions, Disallowances and Charges as of December 31, 2021 as
reported in the Statement of Audit Suspensions, Disallowances and Charges (SASDC) are
shown below:
Beginning Suspensions Disallowances Charges Settlements Ending

Balance, during the during the during the during the Balance,
01/01/2021 year year year year 12/31/2021
Suspensions 15,411,268.64 0.00 0.00 0.00 0.00 15,411,268.64
Disallowances 604,000.23 0.00 144,527.75 0.00 0.00 748,527.98
Charges 0.00 0.00 0.00 0.00 0.00 0.00
Total 16,015,268.87 0.00 144,527.75 0.00 0.00 16,159,796.62
Disallowances during the year amounting to P144,527.75 pertained to Notice of

Disallowance (ND) issued for excess payment of Bids and Awards Committee (BAC)
Honoraria.
71

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PART II - AUDIT OBSERVATIONS AND RECOMMENDATIONS

FINANCIAL AND COMPLIANCE AUDIT

Section 124 of the MNGAS for LGUs states:

“Physical count of property, plant, and equipment by type shall be

In addition, to assist government agencies in coming up with reliable PPE balances

b. List of PPE accounts not physically counted

Moreover, perusal of the Provincial General Services Office’s (PGSO) records

In addition, comparison of CY 2021 RPCPPE with the previous year showed

Further, procedures for the one-time cleansing of PPE account balances in

We recommended and the Management agreed to the following:

b. The Provincial Accountant and the Provincial General Services Officer to

“Every statute should be construed in connection with those already

Table 5: Schedule of Accounts Payable and Other Payables (General Fund)

In the AAPSI of CY 2020 Audit Recommendations, Management commented that

We recommended and the Provincial Accountant agreed to:

b. Draw necessary adjusting entries to: 1) reclassify the accounts erroneously

Table 2: Status of CY 2016-2020 Fund Transfers to Other LGUs

Unliquidated Balance as Unliquidated Balance as

Municipalities 40,360,911.48 7,900,000.00 28,024,114.00 20,236,797.48

Delayed/non-submission by the IAs of liquidation reports with complete supporting

We recommended and the Management agreed to the following:

a. Send within 10 days before the expiration of the 30 or 60 days period

“9.1 Failure of an Accountable Officer to liquidate his outstanding cash

9.2 The suspension of salaries of erring accountable officers shall be

9.3 Appropriate administrative proceedings shall likewise be instituted.”

Review of the Advances to Officers and Employees and Advances to Special

Verification of general ledger account balances as of December 31, 2021 of the

Table 4: Schedule of Receivables Aging from Two Years to 10 Years

We recommended and the Provincial Accountant agreed to the following:

b. In coordination with the Provincial Legal Officer, enforce legal action to

c. Assess the collectibility of the receivables and set up Allowance for

e. Ensure that prospective receivables are well-documented, have subsidiary

Section 3.2 of Commission on Audit, Department of Finance, and Department of

Table 6: Schedule of Dormant Bank Accounts

We recommended and the Management agreed to the following:

a. Purchases made by the local government units must be inspected and

d. Report of inspection of all consumables shall be submitted to the provincial

Monitoring of the agency’s CY 2021 submission of Acceptance and Inspection

Table 7: Monitoring of AIR Submission as of December 31, 2021

2. Inspectorate Team/Inspector obtains copies of Delivery Receipt (DR) and

3. After inspection, the end-user submits the DR/Supplier’s Invoice and PO to

a. AIRs were only prepared after inspection of deliveries by the Inspectorate

We recommended and the Management agreed to the following:

Section 70, of MNGAS for LGUs, Volume I, provides:

“Pre-Closing Trial Balance. – The pre-closing trial balance is the trial

These reports shall be submitted to the following:

COA Unit Auditor – Original copy

Section 72 of the same Manual states:

“Post-closing Trial Balance. – Post-closing trial balance is the trial

a. Status of Appropriations, Allotments and Obligations; and

b. Subsidiary Schedule of General Ledger account balances;

As shown in Annex H, Bank Reconciliation Statements (BRS), Monthly Trial Balances

Table 8: Schedule of Submission of Accounts as of December 31, 2021

b. Reshuffling of accounting personnel in-charge of the DCGNPH accounts to

We recommended and the Provincial Accountant agreed to:

a. Provide additional personnel to assist in the preparation and submission of

9. The Drugs and Medicines Inventory account of the Buenavista Emergency

“The moving average method of costing shall be used for costing

Subsidiary Ledgers of Drugs and Medicines Amount