The following is an excerpt from the COA Annual Audit Report for Basey for CY 2011:
"Scope of Audit
An audit was
conducted on the accounts and operations of the Municipality of Basey, Samar
for the calendar year 2011. The audit
was aimed to ascertain the propriety and validity of disbursements and receipts
as well as the reliability of the accounts as presented in the financial
statements. The audit consisted of
review of operating procedures, interview with concerned municipal officials
and employees, verification and analysis of accounts, and such other procedures
considered necessary under the circumstances.
State Auditor’s Report on the Financial Statements
The
Auditor rendered a qualified opinion on the
financial statements because: (a) the reliability of the value and existence of the accounts
Reforestation-Upland amounting to P5,963,548.41, Swampland amounting to P8,285,249.68, Work/Other Animals
amounting to P1,656,500.00, Breeding
Stocks amounting to P1,104,163.50, and the net realizable value of Loans Receivable – Others amounting
P6,634,631.83, are doubtful due to unrecorded losses of properties and
the remote possibility of collection of the receivables. (b) Information
Technology - Software with a net book value of P3,238,380.00 has become
valueless because it is no longer used in the operation of the Municipal
Treasurer and Assessment Offices. (c) Current assets such as Real
Property/Special Education Taxes Receivable amounting P33,232,397.26 are unrealizable and
Due from Other Funds representing funds exposure for completed projects
not yet turned-over to the municipality and almost complete Infres projects amounting
to P87,030,554.56, hence, cannot be considered as current.
Summary of Significant Findings and Recommendations
A.
Financial and Compliance Audit
1. The reliability of the value and existence of the accounts
Reforestation-Upland amounting to P5,963,548.41,
Swampland amounting to P8,285,249.68,
Work/Other Animals amounting to P1,656,500.00, Breeding Stocks amounting to P1,104,163.50, and the net realizable value of Loans Receivable – Others amounting P6,634,631.31, are
doubtful due to unrecorded losses of
properties and the remote possibility of collection of the receivables.
We recommend that management strictly observe Sections 111 and
112 of PD 1445 for a fair presentation of the accounts in the financial
statement.
2. The management appropriated a total of P19,200,000.00 or 19.28%
of the Internal Revenue Allotment (IRA) of the Municipality for the Development
Fund instead of P19,919,907.48 or 20% minimum threshold as mandated under
Section 287 of the Republic Act (RA) 7160 otherwise known as the Local
Government Code of 1991. Further, part
of the IRA appropriated for Development Fund was used to pay honoraria, debt
servicing and other obligations totaling
P9,098,174.44 contrary to the DILG-DBM Joint Memorandum Circular (MC) No. 1, s.
2005, thus, defeating the purpose for which the fund was established.
We recommend that management appropriate no less than 20% of the
Internal Revenue Allotment (IRA) for Economic Development Fund in consonance
with Section 287 of RA 7160 and utilize the fund within the limits and/or
purposes outlined in the DILG-DBM Joint Memorandum Circular No. 1, s. 2005.
3. Expenditures
for gasoline, oil and lubricants amounting P1,357,068.26 were not properly
supported with duly accomplished Driver’s Trip Tickets (DTT) and neither were
supported with reports of fuel consumption in violation of Sections 2 and 4 of
COA Circular 75-6 dated November 7, 1975, thus monitoring of fuel consumption
for the purpose of minimizing wasteful, excessive and unnecessary expenditures
of government vehicle was made difficult.
We recommend that
management strictly comply with the requirements of COA Circular No. 75-6,
dated November 7, 1975 and Section 4(2) of PD 1445 in order to control and
regulate the use government vehicles, and to ensure that the fuel consumed is
for government use. Likewise, require
the drivers concerned to submit duly approved and properly accomplished
Driver’s Trip Tickets with the Monthly Report of Official Travels, and Monthly
Report of Fuel Consumption. This
recommendation is without prejudice to the issuance of Notice of
Suspension/Disallowance as a result of post-audit.
4. 4.
Procurement of
common-use supplies and equipment amounting to P973,948.83 were not made thru
the Procurement Service (PS) Depot, but rather thru shopping from various
private stores/suppliers or reimbursements,
contrary to Administrative Order No. 17 dated July 28, 2011, thus, the
policy of the government in promoting economy and efficiency in procurement is
defeated.
We recommend that management procure common-use supplies and
equipment only at the DBM, PS Depot as mandated by AO No. 17 dated July 28,
2011 and DBM Circular Letter No. 2011-6 dated August 25, 2011. Common-use
supplies and equipment not available at the PS should be procured in accordance
with IRR of RA 9184.
5. 5. Cash advances totaling P 793,486.50 were not liquidated at
year-end, of which 47.42% or P 376,291.00 have been outstanding for over
one year, contrary to Accounting
Circular No. 2006-001 dated November 9, 2006 and COA Circular No. 97-002 dated
February 10, 1997, thus exposing government funds to the risk of misuse.
We recommend that
management require the concerned officials and employees to liquidate
immediately their outstanding cash advances in accordance with Accounting
Circular No. 2006-001 and COA Circular No. 97-002, otherwise, withhold payment
of any money due them in accordance with Section 5.9 of COA Circular No. 97-002
and Section 37 of PD 1445. This recommendation is without prejudice to the
issuance of Notice of Suspension/Disallowance as a result of post-audit.
6. 6. The municipality did not provide comprehensive fire
insurance coverage for the government
properties with a net value of P 54.1 M as of December 31, 2011 with the
Government Service Insurance System, thus exposing these properties to natural
and man-made calamities which is contrary to Republic Act 656 and
Presidential Decree 245.
We recommend that management insure all government properties
with GSIS against any insurable risks as required in Section 5 of RA 656.
7. 7. Disbursement
and journal entry vouchers, and other financial reports were
submitted late, contrary to
Section 347 of RA 7160, Section 100 of PD 1445, COA Circular 95-006, dated May
18, 1995, COA Circular No. 2009-001 dated February 12, 2009, and other
pertinent sections of NGAS Manual for LGUs,
thus, depriving management on the prompt communication of the audit
results.
We recommend that the
Municipal Mayor ensure that all executive officials and employees of the
municipality faithfully discharge their duties and functions as provided by
regulations pursuant to Section 444.b.1.x of RA 7160. Likewise, require the Municipal Treasurer and
Accountant to render their accounts, and all officials and employees concerned
to submit the other financial reports. This recommendation is without prejudice
to the issuance of Notice of Suspension/Disallowance as a result of post audit.
Compliance with Tax Laws
We are pleased to note that during the
year 2011, the municipality had complied with Revenue Regulation No. 2-98 dated
May 17, 1998 particularly on the withholding and remittance to BIR the taxes
withheld from compensation and goods and services procured from private
suppliers. It has collected during the year total withholding taxes amounting
to P 4,176,833.02. Withholding taxes pertaining to the period from January
to November 2011 amounting P 3,703,866.22 was remitted in 2011 , while
withholding taxes pertaining to December, 2011 amounting P 472,966.80 is due
to be remitted in January, 2012.
Statement of Audit Suspensions, Disallowances and Charges (SASDC)
The total
audit suspensions, disallowances and charges found in the audit of various
transactions of the Municipality as of December 31, 2011 is P 732,698.71 based
on the Notice of Suspension (NS), Notice of Disallowance (ND), and Notice of
Charge (NC) issued by this Commission.
Status of Implementation of Prior Years’ Audit Recommendations
Of the
twenty one (21) audit recommendations contained in the CY 2008-2010 Annual
Audit Reports, twelve (12) were partially implemented and nine (9) were not
acted upon by management."
Source: www.coa.gov.ph