EXECUTIVE SUMMARY

A. Introduction

Muntinlupa was a village now known as the “Poblacion”. As early as 1800, the
Catholic priest, Father Joaquin de Zuniga, chronicled it as La Poblacion que Sigue se
Llama Muntinlupa. In 1869, the project of forming a town out of the barrios of
Muntinlupa was approved by the Civil Government.

In 1901, Muntinlupa was one of the districts of Morong. On November 25, 1903, by
Act No. 1008 of the Philippine Commission, the Municipality of Muntinlupa was
included within the boundary of Laguna Province and placed under Biňan along with
San Pedro. Muntinlupa protested against this Act, through Marcelo Fresnedi, the head
of the Municipality.

A petition, presented to the Governor General for the return of Muntinlupa to Rizal
Province, was heard and granted through Act 1308 and duly approved on March 22,
1905. Muntinlupa was returned to Rizal and became, with Pateros, a part of Taguig
from which it was eventually separated because of its physical distance.

The residents later petitioned the government for an independent status of the
Municipality which was granted under Executive Order 108 dated December 19,
1917 with the approval of Governor General Francis Burton Harrison and took effect
on January 1, 1918.

With the creation of the Metropolitan Manila Commission, Muntinlupa was

proclaimed on November 7, 1975 as one of the 17 municipalities and cities
comprising the Metro Manila area.

With the ratification of the 1987 Constitution, Muntinlupa together with Las Pinas
formed one political district. Subsequently, Muntinlupa was divided into two districts.
District I included Barangays Tunasan, Poblacion, Putatan and Bayanan while Distric
II consisted of Barangays Alabang, Cupang, Buli, Sucat and Ayala Alabang.

On February 16, 1995, House Bill No. 14401 converting the Municipality of
Muntinlupa into a highly urbanized city was approved by the House of
Representatives. Muntinlupa formally became a highly urbanized city when President
Fidel Ramos signed Republic Act No. 7926 proclaiming Muntinlupa as a city.

In a span of years, Muntinlupa has jumped from a second class municipality to a first
class city, with some of the largest infrastructure built in its 46.7-square kilometer
territory, this southernmost city in the metropolis has become a major commercial,
residential and information technology (IT) hub of the National Capital Region.

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 A total of 5,984 are employed by the City as of December 31, 2018 composed of the
following:

Elected Officials 19
Permanent 505
Casual 3,437
Contractual 702
Job Orders 1,321
Total 5,984

B. Financial Highlights

The financial position and financial performance of the City for CY 2018 as
compared to CY 2017 are shown below:

Financial Position
2018 2017 Increase/
Decrease
Total Assets P 9,436,379,881 P 8,374,940,453 P 1,061,439,428
Total Liabilities 2,800,054,621 3,019,552,981 (219,498,360)
Total Equity 6,636,325,260 5,355,387,472 1,280,937,788

Financial Performance
Increase/
2018 2017 Decrease
Total Revenue P 5,243,506,068 P 4,749,005,352 P 494,500,716
Operating Expenses 3,649,226,999 3,217,813,036 431,413,963
Surplus from Current Assets P 1,594,279,069 P 1,531,192,316 P 63,086,753
Transfers, Assistance and
Subsidies from P 222,925,159 P 256,824,701 P (33,899,542)
Transfers, Assistance and
Subsidies to (456,549,214) (455,128,860) (1,420,354)
Surplus(Deficit) for the
period ending December 31,
2017 P 1,360,655,014 P 1,332,888,157 P 27,766,857

For CY 2018, the appropriations of the City for the General and Special Education
Funds totaled P7.151 billion. Obligations charged against these appropriations
amounted to P4.347 billion. Details are as follows:

Fund Appropriation Obligation

General Fund
Current Appropriation P 5,634,700,281 P 3,833,924,594
Continuing Appropriation 555,468,081 113,060,995
Sub-total P 6,190,168,362 P 3,946,985,589

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 Fund Appropriation Obligation

Special Education Fund

Current Appropriation P 757,928,757 P 388,096,125
Continuing Appropriation 203,361,667 11,855,856
Subtotal P 961,290,424 P 399,951,981
Total P 7,151,458,786 P 4,346,937,570

The operating income of P5.244 billion collected during the year was sourced from
the following:

Special
Particulars General Fund Education Fund Total
Tax Revenue P 2,697,868,546 P 412,085,341 P 3,109,953,887
Internal Revenue Allotment 978,908,883 - 978,908,883
Share from Economic Zones 217,060,323 217,060,323
Business & Service Income 918,405,981 1,269,890 919,675,871
Shares, Grants & Donations 8,981,328 8,981,328
Miscellaneous Income 8,916,424 9,351 8,925,775
Total Operating Income P 4,830,141,485 P 413,364,582 P 5,243,506,067

C. Operational Highlights

Muntinlupa is recognized as an excellently administered city with a comprehensive

and holistic eight-point program for its constitutents. The Eight-Point Program of
Governance comprises the people’s dream, hopes and vision for the growth of
Muntinlupa City and its residents. These programs, projects and development
directions are anchored on Education, Health, Livelihood and Employment, Peace
and Order, Socialized Housing, Economic Development, Good Local Governance
and Environmental Protection.

This centerpiece for governance, known as Eight Point Program, continues to

achieve progress for the City in different sectors of the society. In CY 2018,
numerous citations and awards were given to the City of Muntinlupa, as follows:

 2nd Most Proactive LGU in the Implementation of the Juvenile Justice and
Welfare Act (2018) DSWD

 Most Business Friendly LGU (2018)

44th Philippine Business Conference and Expo Philippine Chamber of Commerce
and Industry -NCCA National Committee on Library and Information Services

 RED Orchard Award – Muntinlupa, LGU

WHITE Orchard Award – OSMUN
Depratment of Healtth

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  Top Performing – LGU (2018)
2018 Manila Bay Clean-up Rehabilitation and Preservation Program
Annual Exit Conference Department of the Interior and Local Government

 RESILIENCE – 3rd Place (2018)

6th Regional Competitiveness Summit and Awards Ceremony
Department of Trade and Industry

 Regional Peace and Order Audit – Rank 2 (2018)

Department of the Interior and Local Government

 Green Banner Award, Outstanding LGU in Nutrition and Program Management

Most Innovative LGU 2018 NCC Regional Awarding Ceremony
National Nutrition Council

 Regional Assessment of LGU Compliance to the Manila Bay Clean–up,

Rehabiltation and Preservation Program (2nd Quarter 2018)
Department of the Interior and Local Government

 Recipient, MERALCO Luminaries Award

Local Government Category (2018)
Manila Eletric Company

 Medalya ng Pambansang Paglilingkod,

Degree of Lakan (2018)
Bureau of Fire Protection
Department of the Interior and Local Government

Also, some of the reported significant accomplishments under the Health, Economic
and Education, based on the submitted Accomplishment Reports for CY 2018 are
presented in the following table:

Target/Expected Actual
Program Remarks
Output Accomplishment
City Health Office
Women caravan and conduct of visual 3,000 reproduction 5,443 women were 181.43%
inspection using acetic acid/VIA, pap age screened for screened/examined accomplishment
smear, breast examination and treatment of reproductive cancers for reproductive
various diseases in women in far flung areas cancers
Procurement of family Planning 1,600 women 2,602 women were 62.62% over the
commodities provided with family provided with family targeted numbers
planning commodities planning
commodities
Expanded Immunization Services Projects
Provision of immunization supplies for the Targeted 10,400 Conducted 7.36% more than
immunization targets for 10,400 infants infants for immunization for the targeted
immunization 11,166 infants numbers to be
immunized

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 Target/Expected Actual
Program Remarks
Output Accomplishment
Provision for Pentahib vaccine 10,400 targeted Immunized 11,166 73.65% increase
infants over the targeted
numbers
Procurement of adult TB Medicines 2,000 adult TB Registered 1,718 TB 86%
patients Patients accomplishment
Procurement of TB Medicines for children Targeted 90 children 124 children were 38% over the
provided with TB targeted numbers
medicines of patients
Procurement of medicines for basic eye 500 persons with 1,582 patients were 216% increase
diseases basic eye diseases provided medicines from the targeted
for basic eye number of
diseases patients
Procurement of medicines for renal diseases 500 persons with 500 patients were 100%
renal diseases provided with accomplishment
medicines
Micro Finance Program
Micro Financing Program additional capital 150 new clients 485 new clients 223% increase in
loans served bringing a the targeted
total of 1,913 clients numbers of new
clients
Payment of loan through center meeting Targeted 85% Registered 96% An increase of
repayment rate repayment rate 11% from the
targeted rate
Compulsory Savings Project 100% weekly 100% weekly 100%
Collection of Compulsory Savings compulsory savings compulsory savings Accomplishment
Open Single Savings Account for Clients 200 clients open 205 clients open 2.5% increase in
savings account the target
Education
College Scholars (10MOST) awardees 300 college students 300 college students 100%
financially assisted financial assisted accomplishment
Scholars enrolled in UP Luzon Campus 50 scholars 49 scholars 98%
financially assisted financially assisted accomplishment
Honor Scholarship 50 honor scholars 50 honor scholars 100%
financially assisted accomplishment
Basic Scholarship 1,600 Grade 12 HS 1,600 HS graduates 100%
graduates in Public scholars financially accomplishment
High School in assisted
Muntinlupa
Assistance Program for PLMun Students 2,000 students with 2,000 students with 100%
exemplary academic exemplary academic accomplishment
standing standing financially
assisted
High School Students and Elementary 14,000 beneficiaries 14,000 beneficiaries 100%
Pupils Assistance Program (HELP) given financial accomplishment
assistance

D. Scope and Objectives of Audit

The audit covered the accounts and operations of the City for the period January to
December 31, 2018. The objectives of the audit are to (a) be able to lend credence to
Management’s assertions on the financial statements; (b) recommend agency

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 improvement opportunities; (c) determine compliance with existing laws rules and
regulations; and (d) determine the extent of implementation of the prior years’ audit
recommendations.

E. Independent Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements as of December 31, 2018 of the City due to the unreconciled net
discrepancy of P232.465 million between the Report on the Physical Count of
Property, Plant, and Equipment and book balance of Property, Plant, and Equipment
(PPE) account, which has material effect on the valuation and existence of the PPE
account.

We reiterated our prior years’ recommendation that the City Mayor require:

a. The MCCPPEID to -

 Reconcile their records with the Accounting Office to determine the causes of
discrepancies between their records;

 Prepare and submit to the Auditor the revised/corrected RPCPPE after due
reconciliations;

b. The Head, Accounting Office to -

 Prepare adjusting entries, if necessary, upon completion of the reconciliation

of their records with the inventory report;

 Reconcile records of Land Account with the records of the City Treasurer’s
Office and prepare adjusting entries, if necessary; and

c. The City Appraisal Committees to conduct an appraisal and determine the

valuation of the donated property for recording purposes and expedite the titling
of the same to prevent third party claims in the future.

F. Summary of Significant Observations and Recommendations

1. The Cash in Bank – Local Currency, Current Account (LCCA) balance of

P1.299 billion was understated by a net amount of P7.161 million due to the non-
recording of prior years and current year validated reconciling items in the books
caused by unrecorded disbursements, deposits, credit memoranda and debit
memoranda.

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 We recommended that the City Mayor require:

a. The City Treasurer to -

 Submit daily to the Accounting Office the Report of Checks Issued (RCI),
together with the paid Disbursement Vouchers (DVs) and supporting
documents;

 Request all depository banks to furnish the City with the copies of
CMs/DMs to support the recording in the books of reconciling items; and

b. The Head, Accounting Office to book up all reconciling items.

2. The (a) granting of cash advances (CA) of P68.744 million in excess of the
Special Disbursing Officers (SDOs) maximum cash accountabilities, (b) granting
of additional CAs in spite of the non-liquidation of previous CAs as well as the
grant of multiple cash advances to one SDO; and (c) the non-liquidation of CAs
of P4.798 million, are all in violation of the provisions of Section 89 of
Presidential Decree (PD) 1445 and various COA Circulars.

We recommended that the City Mayor require the Head, Accounting Office to:

a. Ensure that no CAs are granted in excess of the maximum cash accountability;

b. Undertake periodic monitoring of cash accountabilities of the

SDOs/(Disbursing Officers) DOs and increase the bonds, if necessary;

c. Instruct the staff assigned in monitoring the CAs to ensure that no CAs are
granted in case of existing unliquidated CAs;

d. Stop the practice of granting multiple CAs;

e. Determine the whereabouts of former employees and demand the liquidation

of their accountabilities;

f. Enforce strictly the liquidation of CAs within the prescribed period, and
ensure that all CAs are liquidated at the end of each year; and

g. Verify the collectability of unliquidated CAs of more than 10 years,

otherwise, request for authority to write-off dormant accounts guided by the
conditions and procedures prescribed under COA Circular
No. 2016-005.

3. The unexpended balances of the Quick Response Fund (QRF) and Mitigation
Fund-Maintenance and Other Operating Expenses (MF-MOOE) for CY 2018
totaling P88.845 million was transferred to the Special Trust Fund (STF) without

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 the actual transfer of cash, hence, the transfer was recorded by debiting Due from
Other Funds in the Trust Fund (TF) books and crediting Due to Other Funds in
the GF books.

We recommended that the City Mayor require the Head, Accounting Office and
the City Treasurer to effect the immediate actual cash transfer of P88.845 million
to the TF books and to stop the practice of simulated transfer of cash to ensure
that the unexpended QRF and MF balances are recorded using the appropriate
accounts to preclude misstatements of the affected accounts.

4. The City has not developed a structured mechanism on the monitoring and
evaluation of Disaster Risk Reduction and Management Fund (DRRMF) projects
as mentioned in the Muntinlupa City Disaster Risk Reduction and Management
Plan (MCDRRMP).

We recommended that the City Mayor require the City DRRM Office
(CDRRMO) to:

a. Develop a monitoring and evaluation in coordination with the City DRRM

Council (CDRRMC) for DRRMF projects, which defines the tools, reporting
requirements and its frequency, accountable department/office, among others;

b. Develop mechanisms for lessons learned to feed back into the LGU
organizational learning, decision-making, DRRM planning, implementation,
and monitoring and evaluation; and

c. Furnish the CAO the monitoring and evaluation reports after the same have
been approved.

5. The City has not accredited and mobilized the various volunteer groups it created
to assist in the disaster preparedness and response as required under Republic Act
No. 10121.

We recommended that the City Mayor require the Head of CDRRMO to:

a. Check from Office of Civil Defense (OCD) the available criteria/guidelines

for the accreditation of the volunteer groups; and

b. Undertake the accreditation process of the various volunteer groups, and

submit the lists of the volunteers to the OCD for inclusion in the database of
the community disaster volunteers.

6. The City has not maximized the utilization of its LDRRMF for the
implementation of PPAs intended for the reduction, mitigation preparedness,
response, rehabilitation and recovery programs, both in the GF - Proper and
Special Trust Fund (STF), of which only P91.492 million or 34.51 percent and

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 P0.200 million or 0.05 percent, respectively, were utilized out of the total
appropriation of P265.143 million, thus, may adversely affect the City’s
preparedness on adverse impact of disasters.

We recommended that the City Mayor require the Head, CDRRMO to coordinate
with the concerned City Officials for the immediate implementation of PPAs and
utilization of the LDRRMF to achieve its purpose of reducing and mitigating the
impact of calamities and disaster that may occur in the City.

7. The cash transferred from the General Funder (GF)-Proper for the 20%
Development Fund (DF) was based on the total Internal Revenue Allotment
(IRA) net of Metropolitan Manila Development Authority (MMDA) share, thus,
understating the funds available for the implementation of programs/projects and
activities (PPAs) by P193.304 million.

We recommended that the City Mayor require the City Treasurer to transfer the
amount of P193,303,695.51 to the DF bank account to ensure the availability of
cash for utilization on priority development projects.

8. Development projects amounting to P175.000 million were not implemented,

thus, the full attainment of the purposes for which the funds were appropriated
were not achieved.

We recommended that the City Mayor maximize the utilization of the 20%
Development Fund allocated for the implementation of various projects, programs
and activities that are envisioned to help in the attainment of social, economic and
environmental development.

9. Of the total appropriation of P265.143 million for Gender and Development

(GAD) programs/projects, only 68.38 percent or P181.304 million were utilized
leaving an unexpended balance of P83.839 million, hence, maximum benefits
from optimum utilization of GAD Fund were not attained.

We reiterated our previous year’s recommendation that the City Mayor cause the
strict implementation of all the programs and activities under the GPB to achieve
the overall objective of the GAD programs.

The aforementioned observations together with the corresponding recommendations

were discussed with Management officials concerned during the exit conference on
April 22, 2019. Management views and comments were incorporated in the report,
where appropriate.

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G. Summary of Total Suspensions, Disallowances and Charges

As of December 31, 2018, unsettled suspensions totaled P318.254 million and

disallowances totaled P585.614 million, as shown in the table below:

Notice of
Suspensions Disallowances Charges Total
Beg. bal., Jan. 1, 2018 P 318,254,155.06 P 585,792,266.25 - P 904,046,421.31
Add: Issuances
Sub-total 318,254,155.06 585,792,266.25 904,046,421.31

Less: Settlements
Second Quarter 168,360.33 168,360.33
Third Quarter 10,000.00 10,000.00
Sub-total - 178,360.33 - 178,360.33
Balance, Dec. 31, 2018 P 318,254,155.06 P 585,613,905.92 - P 903,868,060.98

Of the total suspensions, P23.291 million pertains to transactions with unsubmitted

documents covering CYs 2015 and 2016. Settled disallowances for the year totaling
P0.178 million pertains to refund of overpayment of BAC Honorarium.

H. Status of Implementation of Prior Years’ Audit Recommendations

Out of the 366 audit recommendations contained in the CYs 2013 to 2017 Annual
Audit Reports 172 or 46.99 percent were fully implemented, 130 or 35.52 percent
were partially implemented and 64 or 17.49 percent were not implemented.