DETAILED OBSERVATIONS AND RECOMMENDATIONS

A. Financial and Compliance Audit

1. Unascertained validity and accuracy of Property, Plant and Equipment (PPE) –

P908.604 million, depreciation expense – P11.667 million, and accumulated
depreciation – P96.580 million

As observed in prior years, the following deficiencies still subsist in CY 2013:

1.1 Unreconciled variance of P690.949 million between the Report on Physical

Count of PPE (RPCPPE) and accounting records for the PPE account.

By virtue of Office Order No. 345-12A dated November 5, 2012, the City
Inventory Team conducted a periodic inventory of supplies, property and
equipment on various dates in CY 2013. The result of the physical count, which
was reported in the RPCPPE as of December 31, 2013, showed a PPE balance of
P3,128,861,304.76. Comparison of this amount with the PPE recorded in City’s
books of accounts of P3,819,810,473.24 disclosed a net variance of
P690,949,168.48. This variance remarkably increased by P654,234,994.32 from
the 2012 figure of P36,714,174.16. The substantial variance was mainly due to the
decrease in the value of Land as of December 31, 2013 by P592,758,534.15 per
RPCPPE.

In lieu of the property cards to be maintained by the City General Services Office
(CGSO), the said Office developed the Property Management System to facilitate
the centralized recording of all properties acquired by the City. The data in the
System are the basis in their periodic inventory of PPE. Any discrepancy that
arises between the data and result of physical count is timely reconciled by the City
Inventory Team.

As of date, the City Inventory Team and the City Accounting Office (CAO) are still
undertaking reconciliation of their records, particularly on Land and Building
accounts, which partook the biggest chunk of variance amounting to
P266,670,564.79 and P223,025,645.02, respectively.

The importance of reconciliation is to ensure that the PPE in the accounting

records actually exist and that all PPE in the RPCPPE are recorded in the books of
accounts. This is espoused in Section C.3, Chapter V of the Manual on Property
Custodianship, quoted as follows:

“After the physical inventory taking, the Inventory Committee shall

reconcile the results of the count with the property and accounting records.

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 The inventory listing of the supplies and materials shall be checked against
the stockcards maintained by the Accounting and finally against the control
accounts. On the other hand, the inventory listing of the equipment shall be
checked with the property card maintained by the Property as against the
equipment ledger cards maintained by the Accounting and total therefore
shall be compared with those in the general ledger.”

Due to the unreconciled balances of the RPCPPE and the accounting records, the
existence of assets and the correctness of the recorded PPE account balances as of
December 31, 2013 could not be ascertained.

1.2 “Reconciling Items” totaling P589.139 million recognized in the books of

accounts as PPE

One of our previous year’s findings was the recording of various PPE as
“Reconciling Items” totaling P589,138,913.23, which up to this date, the CAO
failed to provide the details/breakdown, contrary to Section 111 of P.D. 1445,
which 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.”

These reconciling items enumerated in Table 1 contributed to the cause of the non-
reconciliation of the RPCPPE and the accounting records.

Table 1
Accumulated
Particulars Acquisition Cost Depreciation as of
December 31, 2013
General Fund
Land 207,695,291.59 Not Applicable
Land Improvements 225,143,346.22 0.00
Office Buildings 116,034,657.03 0.00
Market and Slaughterhouse 6,712,410.33 0.00
Other Structures 14,253,501.19 0.00
Office Equipment 1,642,988.65 0.00
Watercrafts 1,095,303.03 0.00
Sub-total 572,577,498.04 0.00
Special Education Fund
Other Structures 849,362.51 0.00
Office Equipment 271,834.99 0.00
IT Equipment and Software 92,240.00 0.00
Other Machineries and Equipment 267,251.60 0.00
Other Transportation Equipment 478,000.00 0.00
Other Property, Plant & Equipment 14,602,726.09 1,683.00
Sub-total 16,561,415.19 1,683.00
Totals 589,138,913.23 1,683.00

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 The accumulated depreciation amounting to P1,683.00 as of December 31, 2013
for the Other Property, Plant and Equipment was understated since the reconciling
items, which were part of the PPE, were not depreciated since 2004 for the reason
that their details could not be identified. As a result, the net book value of such
account was overstated due to the unapplied amount of depreciation, while the
depreciation expense for the period ended December 31, 2013 was, likewise,
understated, and consequently, the equity for the period were overstated by the
same amount.

1.3 Tangible assets worth P0.679 million small enough to be considered as PPE
classified in the accounting records as PPE.

COA Circular No. 2005-002 dated April 14, 2005, provides the list of small
tangible assets with corresponding estimated useful life which shall be recorded as
inventories upon acquisition and expense upon issuance.

Despite our previous year’s findings, we still noted that several tangible assets
totaling P679,306.99, detailed in Table 2, with estimated serviceable life of more
than one year but small enough to be considered as PPE, were included in the
inventory report and still classified in the books of accounts as PPE instead of the
inventory/expense account.

Table 2
To be classified as
Military
Medical, Hardware
PPE Account and Other
Acquisition Office Dental and Other and Monobloc
Police Inventory
Cost Supplies Laboratory Supplies Construction Furniture
Supplie Items
Supplies Supplies
s
General Fund
Office Equipment 74,460.00 71,300.00 - - 470.00 - 2,690.00 -
Furniture and 370,980.0
- - - - - - 370,980.00
Fixtures 0
IT Equipment and 146,304.4
- - - 146,304.49 - - -
Software 9
Medical, Dental and
Laboratory 4,462.50 - 4,462.50 - - - - -
Equipment
Military and Police
3,900.00 - - 3,900.00 - - - -
Equipment
61,471.0
Other PPE - 1,600.00 - - 36,260.00 23,611.00 -
0
661,577.9
Sub-total 71,300.00 6,062.50 3,900.00 146,774.49 36,260.00 26,301.00 370,980.00
9

Special Education Fund

IT Equipment and
16,309.00 - - - 16,309.00 - - -
Software
Other PPE 1,420.00 - - - - 1,420.00 - -
Sub-total 17,729.00 - - - 16,309.00 1,420.00 - -
679,306.9 71,300.0 3,900.0 163,083.4 37,680.0 370,980.0
Grand Total
9 0 6,062.50 0 9 0 26,301.00 0

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The non-reclassification to the correct account of the said items understated the
expense account and overstated the PPE account by P679,306.99 and the
Government Equity account by the amount of the item already issued to end-users.

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 We have recommended that Management:

a. Continuously reconcile the result of the physical count with the property and
accounting records;

b. Adjust the books of accounts and the property records, as warranted, after
reconciliation;

c. Continuously analyze the reconciling items in the PPE account, and

accordingly prepare correcting journal entries to reflect the correct balances of
the affected accounts;

d. Reclassify to the proper Inventory account tangible assets with estimated useful
life of more than one year but small enough to be considered and recorded as
PPE; and

e. Record the items as expense upon issuance of the small tangible items and
tender the corresponding Inventory Custodian Slip to the personnel to whom
the items are issued for proper monitoring, control and accountability.

Management replied that the CGSO and CAO are continuously making the efforts
to reconcile the balances; however, a full reconciliation is not possible pending the
determination of the details/breakdown of the selected accounts for documentation
purposes.

Management also commented that right after assumption of office of the CGSO
Head in 2002, the City Treasurer’s Office had turned over all documents relative to
properties of the City. The CGSO in turn had re-issued all Property Accountability
Receipt (PAR), the equivalent of Acknowledgement Receipt for Equipment (ARE),
to all properties identified and accounted for. The CGSO issued the PARs/AREs to
properties physically existing and identifiable during the physical inventory.
However, the corresponding PAR/ARE was not issued to properties that have no
breakdown or was recorded in lump sum in the accounting records.

Management, likewise, replied that the CGSO is continuously correcting the

entries and classifications of tangible assets with estimated serviceable life of more
than one year but small enough to be considered as PPE and that the said Office is
closely coordinating with the CAO in reclassifying the items.

1.4 Understatement of depreciation on several PPE accounts resulting in incorrect

valuation of PPE

Generally Accepted Accounting Principles defines depreciation as an allocation of

cost over the estimated useful life of an asset. It is the process of reducing the
historical cost of an asset by an annual amount relating to the amount of asset
usage.

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NGAS Manual, Volume III, provides the information in setting-up the
Accumulated Depreciation and Depreciation on several PPE accounts, while COA
Circular No. 2004-003 dated October 4, 2004 provides uniform guidelines on the
computation of depreciation expense for Property, Plant and Equipment. The said
Circular provides that computation of depreciation is based on straight-line
method. A residual value equivalent to 10 percent of the acquisition cost shall be
deducted before effecting the depreciation by dividing over its estimated useful
life. Also, any adjustments resulting from changes in the number of useful life of
property according to its account classification are supported by the same Circular.

Review of the Schedule of PPE showed that no depreciation was computed on the
following structures and other transportation equipment. This understated the
Depreciation Expense and Accumulated Depreciation accounts by P1,028,668.34
(Table 3) for CY 2013. Further, we noted that most of the PPE, with useful lives of
five to 30 years, completed and purchased prior to the implementation of the New
Government Accounting System, are not provided with depreciation. Computation
of the depreciation that should have accumulated through the years for the said
property items corresponded to P16,094,378.20 (Table 4).

Table 3
Per Schedule of PPE Computed
Depreciation
Particulars Acq. Date Est. Life Amount per Audit

Marikina Sports Center Library, West Grandstand 31-Dec-2007 30 1,921,759.70 57,652.79

Two-storey Health and Livelihood Center, Libis
1-Aug-2006 0 5,383,631.78 242,263.43
Bulelak, Barangay Malanday
Market Mall, E. Jacinto St., Barangay Sta. Elena 1-Aug-2006 30 1,097,086.89 32,912.61
Market Mall, Kapitan Vencion, Barangay Sta. Elena 1-Aug-2006 30 3,344,586.57 100,337.60
Market Mall, P. Dela Paz St., Barangay Sta. Elena 1-Aug-2006 30 19,757,993.67 592,739.81
Multi-Purpose Hall, Pugad-Lawin Champaca,
9-Dec-2004 10 27,690.00 2,492.10
Barangay Parang
BMX Bike 26-Apr-2004 10 3,000.00 270.00
Total 1,028,668.34

Table 4
Accumulated Depreciation
Particulars As of December 31, 2013

Hospital and Health Centers 1,776,598.49

Markets and Slaughterhouses 5,323,926.77
Other Structures 5,159,456.32
Medical, Dental and Laboratory Equipment 450,000.00
Technical and Scientific Equipment 78,491.25
Other Machineries 60,138.00
Motor Vehicles 1,558,834.25
Other Transportation Equipment 2,610.00
Other PPE 1,684,323.12
Total 16,094,378.20

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Review disclosed that various PPE accounts with useful lives that have already
elapsed were not fully depreciated up to this date. Also, the depreciation applied to
other PPE accounts with remaining useful lives was inadequate. These inadequate
provision and lack of full depreciation understated the expense account and total
operating expenses by P10,638,786.58, and overstated operating income by the
same amount. On the other hand, the Government Equity account was overstated
by P80,485,703.20 and the Accumulated Depreciation account was understated by
the same amount. Details of the overstatement and understatement are shown in
the following table:

Table 5
Per Books Per Audit Under/Over Depreciation
Account Name Depreciation Accumulated Depreciation Accumulated Depreciation Accumulated
for CY 2013 Depreciation for CY 2013 Depreciation for CY 2013 Depreciation

General Fund
Land
15,357.84 16,637.66 15,357.87 76,789.35 (0.03) (60,151.69)
Improvements
Office Buildings 4,846,009.21 26,164,234.63 7,504,393.96 33,730,844.22 (2,658,384.75) (7,566,609.59)
School Buildings 2,365,748.57 15,969,745.84 4,751,915.64 21,912,320.66 (2,386,167.07) (5,942,574.82)
Hospitals and
4,088,057.28 20,342,463.68 4,088,057.20 20,653,749.84 0.08 (311,286.16)
Health Centers
Markets and
2,349,867.65 2,900,869.49 846,425.80 6,446,751.78 1,503,441.85 (3,545,882.29)
Slaughterhouses
Other Structures 16,361,130.07 52,807,314.41 16,661,208.62 60,821,617.49 (300,078.55) (8,014,303.08)
Office Equipment 254,320.93 2,389,439.25 287,218.38 2,835,004.81 (32,897.45) (445,565.56)
Furniture and
1,601,678.61 9,838,967.81 1,666,702.16 11,027,741.63 (65,023.55) (1,188,773.82)
Fixtures
IT Equipment and
6,920,522.58 26,137,033.38 8,549,969.66 27,531,258.84 (1,629,447.08) (1,394,225.46)
Software
Library Books 27,058.32 2,969,106.77 32,358.12 4,026,243.69 (5,299.80) (1,057,136.92)
Machineries 65,281.08 1,190,233.56 65,281.13 1,465,825.35 (0.04) (275,591.79)
Communication
660,627.48 3,604,230.94 723,755.31 4,589,305.58 (63,127.83) (985,074.64)
Equipment
Construction and
9,421,776.06 50,109,877.02 12,887,203.41 62,081,970.14 (3,465,427.35) (11,972,093.12)
Heavy Equipment
Disaster Response
and Rescue - 209,972.22 6,373.68 258,618.60 (6,373.68) (48,646.38)
Equipment
Medical, Dental
and Laboratory 1,006,221.36 3,960,575.30 357,375.72 1,909,037.16 648,845.64 2,051,538.14
Equipment
Military and
75,523.45 569,184.31 62,671.16 617,994.44 12,852.29 (48,810.13)
Police Equipment
Sports Equipment 189,380.16 470,877.38 189,375.83 479,270.97 4.33 (8,393.59)
Technical and
Scientific 189,978.67 1,693,005.89 188,959.72 1,809,242.62 1,018.95 (116,236.73)
Equipment
Other Machineries
212,364.39 2,658,283.53 212,364.99 3,635,093.15 (0.60) (976,809.62)
and Equipment
Motor Vehicles 9,108,681.60 68,398,615.37 9,550,210.26 79,203,189.55 (441,528.66) (10,804,574.18)
Watercrafts 151,341.12 766,410.99 151,341.09 780,660.93 0.03 (14,249.94)
Other
Transportation 225,978.81 2,570,657.20 212,100.52 3,278,763.61 13,878.29 (708,106.41)
Equipment
Other Property,
Plant and 10,884,526.71 52,306,903.39 12,323,308.78 62,144,768.99 (1,438,782.07) (9,837,865.60)
Equipment
Sub-total 71,021,431.95 348,044,640.02 81,333,929.00 411,316,063.39 (10,312,497.05) (63,271,423.37)
Account Name Per Books Per Audit Under/Over Depreciation

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 Depreciation Accumulated Depreciation Accumulated Depreciation Accumulated
for CY 2013 Depreciation for CY 2013 Depreciation for CY 2013 Depreciation
Special
Education Fund
School Buildings 24,683,346.16 81,383,663.07 26,948,131.99 102,709,095.27 (2,264,785.83) (21,325,432.20)
Office Equipment 115,050.60 1,455,399.81 115,050.60 1,456,662.90 - (1,263.09)
Furniture and
280,147.22 981,129.49 307,424.20 1,006,485.12 (27,276.98) (25,355.63)
Fixtures
IT Equipment and
1,306,129.98 7,592,730.21 1,328,511.83 9,049,874.26 (22,381.84) (1,457,144.05)
Software
Construction and
- 160,312.50 25,650.00 256,500.00 (25,650.00) (96,187.50)
Heavy Equipment
Technical and
Scientific 4,398,085.44 13,284,931.32 2,391,287.64 7,230,988.16 2,006,797.80 6,053,943.16
Equipment
Motor Vehicles - 2,279,861.36 - 2,364,300.00 - (84,438.64)
Other Property,
Plant and 1,508,265.85 5,975,152.37 1,501,258.53 6,253,554.25 7,007.32 (278,401.88)
Equipment
Sub-total 32,291,025.25 113,113,180.13 32,617,314.78 130,327,459.96 (326,289.53) (17,214,279.83)
Total 103,312,457.20 461,157,820.15 113,951,243.78 541,643,523.35 (10,638,786.58) (80,485,703.20)

The understatements of the Depreciation Expense and Accumulated Depreciation

accounts, therefore, aggregated P11,667,454.92 and P96,580,081.40, respectively,
which resulted in the incorrect valuation of PPE.

We have recommended that the City Accountant:

a. Provide depreciation on the assets of the City following the guidelines provided
under COA Circular No. 2004-003; and

b. Adjust the understatement of Accumulated Depreciation in previous years to be

able to present the PPE at its proper valuation.

Management replied that in compliance with the recommendation, depreciation

charges on assets were already reflected in the books of accounts. They also
commented that while electronically, depreciation is system generated, any PPE
therefore which were not provided with depreciation is due to system error.
However, they assured that, periodically, they will look into the errors so that the
prescribed depreciation for each PPE will be provided.

1.5 Completed projects recorded as Construction-in-Progress not reclassified to

proper PPE accounts.

The NGAS Manual defines Construction-in-Progress (CIP) account as the cost or

accumulated value of the assets that are still under construction. Hence, projects
that are not yet completed at the end of the period are reported in the books of
accounts as CIP. As soon as the project is completed, the CIP for agency assets is
closed to the appropriate asset account, and for public infrastructures funded from
the City’s revenue, the CIP is transferred to the Public Infrastructures account,
which is closed to Government Equity at the end of the year.

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Comparison of the accounting and engineering reports relative to the infrastructure
projects implemented by the City disclosed that various CIP accounts totaling
P217,655,133.67 as of December 31, 2013, which were reported as 100 percent
complete by the City Engineering Office (CEO), were still recorded in the
accounting reports as CIP. Based on the report of the CEO, these CIP accounts had
been completed between CYs 2009 to 2013. Given this condition, the provision
for depreciation on the affected PPE accounts was deferred resulting in the
understatement of the Depreciation Expense and Accumulated Depreciation
accounts and overstatement of Government Equity.

The table below summarizes the afore-said completed CIP accounts and the year of
their reported completion.

Table 6
Year Completed
Account 2009 2010 2011 2012 2013 Total

Agency Assets 50,579,174.79 4,406,126.65 5,444,997.28 1,617,476.73 113,378,844.42 175,426,619.87

Roads, Highways & Bridges - - 19,532,272.42 3,292,338.08 10,060,853.98 32,885,464.48
Other Public Infrastructures - - 421,202.28 1,198,627.98 7,723,219.06 9,343,049.32
Total 50,579,174.79 4,406,126.65 25,398,471.98 6,108,442.79 131,162,917.46 217,655,133.67

Moreover, the project costs of CIP accounts in the accounting records were not the
same as the costs reported by the CEO, showing a difference of P41,163,909.22.
This indicated a probability that the figures recorded in the books of accounts may
not reflect the correct costs of the assets, which may result in the misstatement of
the affected PPE accounts and the Registry of Public Infrastructure upon
reclassification.

On the other hand, the CEO did not identify the status of some CIP accounts.
Disclosure of project status is important for facility of determination if the
corresponding projects are still ongoing or are already completed.

We have recommended that:

a. The City Accounting and the City Engineering Offices reconcile their records
to determine the status and correct balances of the affected CIP accounts;

b. The City Engineering Office provide the City Accounting Office with copies of
the report of completed projects and other necessary documents; and to cause
the transfer of these projects from the CIP accounts to the appropriate PPE
accounts and Registry of Public Infrastructures; and

c. Based on the adjusted data, the City Accounting Office compute for the
required depreciation on the completed projects, and accordingly adjust the
balances of the affected accounts.

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 Management commented that the CEO have already provided the City Accounting
Office with copies of reports of the completed projects and other necessary
documents needed to update reports relative to the infrastructure projects
implemented for CYs 2009-2013. Also, they are now in the process of reconciling
their records to determine the status and correct balances of the affected CIP
accounts.

2. Drugs and Medicines Inventory

2.1 Unsubstantiated balance of Drugs and Medicines Inventory – P4.444 million

Section 124, Volume I of the NGAS Manual provides that: “the local chief
executive shall require periodic physical inventory of supplies or property. Physical
count of inventory items by type shall be conducted semestrally and reported in the
Report of the Physical Count of Inventories (RPCI) ….”

Pursuant to the above provision, the City Inventory Team (CIT) assigned at the
City General Services Office (CGSO) conducted a periodic inventory taking of
supplies and property and equipment for the semesters ending June and December
2013. We noted, however, that the count was confined to the stock in the
warehouse, such as construction materials, office supplies, property and equipment
with Property Acknowledgement Receipts, like motor vehicles and heavy
equipment.

Drugs and medicines were not counted since, based on interview, these were
already transferred to the City Health Office (CHO). On the other hand, while the
CHO prepared its report on a monthly basis for the inventory of drugs and
medicines, such report was not submitted to the CGSO or CAO for reconciliation
and adjustment. This set up is not consistent with Section C.3, Chapter V of the
Manual on Property Custodianship which provides that the result of the physical
inventory taking shall reconcile with the property and accounting records.

As of December 31, 2013, the accounting records showed a balance of

P4,443,804.53 of the Drugs and Medicines Inventory account. This balance is
supported with the details in the Supplies Ledger Cards (SLCs) maintained under
the e-NGAS. However, the balance is not supported with an inventory report
prepared by the CIT to serve as basis for reconciliation of details of drugs and
medicines on hand with the SLCs.

36
 We had recommended and Management agreed that the:

a. CIT include drugs and medicines in the conduct of physical inventory taking,
prepare the corresponding report, and reconcile the data with the CGSO and
CAO records; and

b. CHO submit the monthly report on the inventory of drugs and medicines to the
CGSO or CAO for reconciliation and adjustment.

2.2 Inappropriate basis in recording issued drugs and medicines

The City Warehouse of the CGSO serves as the centralized stockroom for its
supplies, including drugs and medicines, and property items. It is also the site of
deliveries and inspections before these assets are issued to the requesting office.

In the case of drugs and medicines, after inspection and tagging of the items at the
City Warehouse, these are transferred and stored at the stockroom of the Supply
Section, CHO, as this has air-conditioned room facilities and refrigerators suited
for storing drugs and medicines. The transfer is documented by a Requisition and
Issue Slip (RIS), which serves as reference in the preparation of the Summary of
Supplies and Materials Issued (SSMI) submitted to the CAO by the CGSO. On the
basis of the SSMI, with the RIS as supporting document, the CAO records the
drugs and medicines as issued. By this process, the transferred drugs and
medicines to the CHO are already expensed in the accounting records when,
actually, there are still available stocks in the CHO Supply Section for distribution
to the various end-user sections of the CHO and the City Health Centers upon
request.

At the CHO, the issuance of the drugs and medicines are supported with an
accomplished RIS prepared by the requesting end-user sections and City Health
Centers. The RIS is filed by the Supply Officer and not submitted to the CGSO.
The above existing practice in recording the issuances of drugs and medicines was
not reflective of the actual utilization of the said supplies. Had the CIT counted the
remaining inventory at the CHO for the semester ending June and December 2013,
and reported it to the CAO, the correct balance of such inventory could have been
reflected in the books of accounts. The non-recording of the ending inventory,
therefore, overstated the reported drugs and medicines expenses and
correspondingly understated the respective inventory account balances.

We had recommended and Management agreed that the CHO, CGSO and CAO
undertake proper coordination for the complete and accurate recording of issuances
and ending inventory of drugs and medicines.

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2.3 Non-moving Drugs and Medicines Inventory sub-accounts

Review of the accounting records disclosed that various sub-accounts of the Drugs
and Medicines Inventory account totaling P1,046,243.11 were non-moving for a
year to seven years, indicating that there was neither procurement nor issuance of
the items. Based on past observation, the regular shelf life of medicines is two
years. This condition suggests, therefore, that the corresponding items could
already have expired.

Ocular inspection conducted by the City Auditor’s Office on sample non-moving

inventories disclosed a negative result, which meant that there were no expired
items on hand. The non-existing, non-moving balances of the sub-accounts,
therefore, overstated the Drugs and Medicines Inventory account and understated
the corresponding expense account.

We have recommended that the City Accounting Office:

a. Analyze the details of the affected accounts and make the appropriate
adjustments; and

b. Coordinate with the concerned offices for the appropriate action to be

undertaken.

2.4 Subsequent procurement of drugs and medicines undertaken despite adequate

available stocks on hand

Verification of reports of the Supply Section, CHO disclosed that as of December

31, 2012, drugs and medicines have an adequate ending stock balances, which
would cover the needs for CY 2013. In spite of the availability of stocks, the City
procured additional stocks based on the 2013 Project Procurement Management
Plan (PPMP) of the CHO. Table 7 shows the stock balances at the beginning of
CY 2013, quantity of procured stocks, issuances during the year, and balances at
year end.

Table 7
Stock on Receipt Stock on
Unit of Total
Particulars Hand as of for Total Hand as of
Measure Issued
Dec. 31, 2012 CY 2013 Dec. 31, 2013
Amoxicillin Caps. Piece 3012 2500 5512 1997 3515
Cefalexin Caps. Box 868 400 1268 452 816
Cotrimoxazole Tab. Box 1175 825 2000 1018 982
Mefenamic Acid Tab. Box 2164 1100 3264 1594 1670
Multivitamins Caps. Box 2550 1500 4050 2345 1705

The preparation of the PPMP, as provided under Section 7 of R.A. 9184, requires a
judicious and meticulous planning in accordance with the planned projects and

38
 activities of the office. Past data of issuances and utilization as well as the
available balances of the items at the time of procurement, among other matters,
are important inputs to be considered prior to procurement. These requirements
could be addressed with the conduct of inventory taking at periodic intervals and
review of past data.

If these planning attributes are not objectively employed and considered, the
procured items may be excessive or deficient than what is needed and may not
suitably address the requirements for the City health programs and projects. This
condition may cause delay or hamper the accomplishment of the project, with
impact on the prioritization in the use of City resources to the detriment of the
intended beneficiaries.

We have recommended that in planning for the procurement of drugs and

medicines, the CHO consider past data on requirements of all end-users including
the City Health Centers, and inputs from the Department of Health, so that
available funds are more appropriately programmed for the needs of the City for its
health programs and projects.

2.5 Unaccounted drugs and medicines and other items from the DOH – P8.679
million

Drugs and medicines, medical supplies, and medical equipment worth

P4,384,701.73, P3,001,721.92, and P1,292,744.00, respectively, received from the
Center for Health Development/Department of Health (DOH), National Capital
Region, were not recorded in the books of accounts due to the absence of a
document as basis by the City Accounting Office for such recording. The Supply
Officer of the CHO was not able to submit to the CGSO a report or document
covering the receipt of such goods, which in turn should have been submitted to
the CAO.

The non-recording is not in accordance with the requirements of P.D. 1445 and
R.A. 7160, as follows:

“Except as may otherwise be specifically provided by law or competent

authority all moneys and property officially received by a public officer in
any capacity or upon any occasion must be accounted for as government
funds and government property. Government property shall be taken up in
the books of the agency concerned at acquisition cost or an appraised
value.” (Section 63, P.D. 1445)

“Every officer primarily accountable for government property shall keep a

complete record of all properties under his charge and render his accounts
thereof semi-annually to the provincial or city general services officer or the

39
 municipal mayor or punong barangay, as the case may be.” (Section 375.d,
R.A. 7160)

The non-recording also extended to issuances of the goods to end-users. Such lack
of recording of the receipt and issuances understated the balances of the affected
accounts, Drugs and Medicines Inventory, Medical, Dental and Laboratory
Supplies Inventory, and Medical, Dental and Laboratory Equipment and the related
expense accounts, with consequential effect to the Government Equity account.

We have recommended that the Supply Officer of the CHO prepare and submit to
the CGSO the corresponding report of receipt and issuances of drugs and
medicines and all the other items from the DOH to adhere to Section 63, P.D. 1445
and Section 375.d of R.A. 7160. The CGSO, for its part, furnish a copy of the
report to the CAO for proper and timely recording in the books of accounts.

3. Formulation and implementation of the program under the 20% Development

Fund not in accordance with the provisions of RA 7160

3.1 Projects programmed for implementation under the City’s Local Development
Plan (LDP) not initiated by the Local Development Council

Section 106 of R.A. 7160 provides that each local government unit shall have a
comprehensive multi-sectoral development plan to be initiated by its development
council and approved by its sanggunian. For this purpose, the development council
at the provincial, city, municipal, or barangay level, shall assist the corresponding
sanggunian in setting the direction of economic and social development, and in
coordinating development efforts within its territorial jurisdiction.

Section 107 (b) of the same Act provides the composition of Local Development
Councils, as follows:

“The city or municipal development council shall be headed by the

mayor and shall be composed of the following members:

1. All punong barangays in the city or municipality;

2. The chairman of the committee on appropriations of the
sangguniang panlungsod or sangguniang bayan concerned;
3. The congressman or his representative; and
4. Representatives of non-governmental organizations operating in
the city or municipality, as the case may be, who shall constitute
not less than one-fourth (1/4) of the members of the fully
organized council.”

40
 The City Mayor constituted through Executive Order No. 003-10 dated July 23,
2010 the composition of the City Development Council (CDC) to include those
representations as specified in the above-mentioned provision.

The 20% DF budget for CY 2013 was approved by the CDC Executive Committee
under Resolution No. 01 dated January 4, 2013, containing the enumeration of
programs and projects that comprise the LDP. The Resolution indicated that the
programs and projects formulated under the development plan of the City, and
upon the directive of the CDC, the CDC Executive Committee conducted the
review and assessment of the Plan. However, there are no available documents
that would show that the LDP was initiated by the CDC. In the absence of such
document, it would seem that the CDC has not carried out its function to represent
the different sectors outlined in R.A. 7160 in the formulation of the projects funded
out of the Fund. We also noted that the Plan was not approved by the Sangguniang
Panlungsod, which is not in accordance with Section 106 of the same law.

We have recommended that Management comply strictly with Sections 106, 107
(b) and 111.3 (b) of R.A. 7160, and ensure that the City Development Plan is
approved by the Sangguniang Panlungsod and that this be operationalized for the
execution of envisioned programs/projects/activities for the City’s constituents’
benefits.

Management replied that the CDC passed Resolution No. 01, Series of 2014 on
February 4, 2014 approving the 2014 DF Budget and that an Ordinance was
enacted by the City Council on February 19, 2014 adopting the CDC Resolution.

3.2 No Annual Investment Program (AIP) formulated for programs with lump-sum
appropriation of P27.000 million

The CDC did not convene for the formulation of the AIP. The AIP shall
specifically identify the priority programs, projects and activities that are to be
funded out of the 20% DF, including the detailed annual allocation for each
program, project and activity which should be compliant with the policy and
guidelines set forth under DILG-DBM Joint Memorandum Circular No. 2011-1.

Section 3.1.2 of the Local Budget Circular (LBC) No. 70 dated March 14, 2000,
issued by DBM states that:

“The AIP shall be prepared by using AIP Form No. 1 and shall be submitted
to the Sangguniang for approval.”

Verification revealed that CDC did not prepare the AIP of the City’s Local
Development Plan (LDP) for CY 2013, as required under the above-cited LBC.
Despite this, however, the City was able to implement the programs in the LDP as
manifested in the utilization of funds for identified programs and projects.

41
 We further noted that the Kaayusan and Kalikasan programs were allocated with
lump-sum appropriations amounting to P21 million and P6 million, respectively, or
a total of P27 million, which could not be validated in the absence of the
detail/breakdown of projects that should have been included in the AIP. The
related information is shown below:

Table 8
Program Projects Amount Total

Kaayusan Various Infrastructure Projects P15,000,000.00

P21,000,000.00
Bikeways Program 6,000,000.00
Kalikasan Improvement of Public Parks 6,000,000.00 6,000,000.00
Total P27,000,000.00

Review disclosed that there were projects implemented during the year, such as
road and roadside improvements and development of parks, which could be
associated under the Kaayusan and Kalikasan programs, despite the absence of an
AIP. While this may be so, the reason for preparing an AIP could not be dispensed
with in order to carry out the objective of the 20% DF. Without the AIP, the City is
not guided with the specific programs and projects to be undertaken under the
Fund.

We have recommended that the City Development Council: (a) prepare the AIP,
as required under Section 3.1.2 of Local Budget Circular No. 70 dated March 14,
2000, that specifically identifies priority programs, projects and activities (PPA)
including the detailed annual allocation for each PPA which is compliant with the
policy and guidelines set forth under DILG-DBM Joint Memorandum Circular No.
2011-1; and (b) submit the AIP to the Sangguniang Panlungsod for proper
approval.

3.3 Partially compliant and non-compliant projects and improper utilization

The City’s Local Development Plan (LDP) for CY 2013 approved by the CDC
Executive Committee showed the different projects programmed for
implementation under the 20% DF’s current year’s budget and continuing
appropriations available for reprogramming in the amount of P112,225,630.80 and
P25,214,941.54, respectively, or a total appropriation of P137,440,572.34.

Sections 3 and 4 of DILG and DBM Joint Memorandum Circular (JMC) No. 2011-
1 dated April 13, 2011 specifically enumerates the different development projects
which may be funded out of the 20% DF, categorized namely as social, economic
and environmental development, and the expense items that are not related to
and/or not connected with the implementation of development projects, programs
and activities that shall not be paid out of the said Fund, respectively.

42
 Out of the total appropriations of P137,440,572.34, projects programmed for the
rehabilitation and repair of City Health Centers in the amount of P12.000 million,
or 8.73 percent, were considered compliant with the JMC, while projects
programmed for the rehabilitation and repair of other City government structures
and facilities in the amount of P86.440 million, or 62.89 percent, were not
compliant since these projects do not fall among the priority projects categorized in
the JMC (see table below).

Table 9

Further review disclosed that under the GF Proper, there were projects which
maybe categorized under the JMC, such as rehabilitation/improvement of roads.
Conversely, there were also projects programmed in the 20% DF which may be
classified in the GF-Proper.

3.4 Projects implemented by the City not in accordance with Section 5 of DILG-
DBM JMC No. 2011-1

The table below contains the projects implemented by the City out of the 20%
Development Fund.

Table 10
Not Compliant
Particulars Amount Compliant Total Jan-June July-Dec
Training Expenses 1,616,488.00 - 1,616,488.00 261,810.00 1,354,678.00
Office Supplies Expenses 248,772.75 - 248,772.75 216,944.00 31,828.75
Other Supplies Expenses 1,426,365.00 - 1,426,365.00 453,350.00 973,015.00
Advertising Expenses 725,120.42 - 725,120.42 70,400.00 654,720.42
Printing and Binding Expenses 10,535,181.92 - 10,535,181.92 2,440,084.05 8,095,097.87

Environment/Sanitary Services 13,463,900.00 - 13,463,900.00 - 13,463,900.00

Repair and Maintenance -
Land Improvements 1,335,660.93 - 1,335,660.93 289,744.09 1,045,916.84
Office Buildings 2,462,180.41 - 2,462,180.41 107,232.00 2,354,948.41
Hospitals and Health Centers 23,158.00 - 23,158.00 19,478.00 3,680.00
Other Structures 1,733,747.86 - 1,733,747.86 27,702.80 1,706,045.06
Motor Vehicles 34,443.60 - 34,443.60 34,443.60 -
Other Public Structures 4,290,303.66 - 4,290,303.66 1,049,309.15 3,240,994.51
Other MOOE 1,597,877.26 - 1,597,877.26 876,657.75 721,219.51

43
 Not Compliant
Particulars Amount Compliant Total Jan-June July-Dec
Office Supplies Inventory 1,119,374.00 - 1,119,374.00 433,888.00 685,486.00
Other Supplies Inventory 34,753.00 - 34,753.00 144.00 34,609.00
Construction Materials Inventory 16,978,603.78 9,574,320.74 7,404,283.04 284,859.25 7,119,423.79
Other Structures 678,398.30 - 678,398.30 - 678,398.30
IT Equipment and Software 85,600.00 - 85,600.00 - 85,600.00
30,000.00 30,000.00
Other Machineries and Equipment - 30,000.00 -
Motor Vehicles 11,136,237.00 - 11,136,237.00 10,276,000.00 860,237.00
Other Property, Plant and 2,068,825.00 - 2,068,825.00 220,425.00 1,848,400.00
Equipment
Construction in Program -
Agency Assets 8,344,924.64 6,651,453.08 1,693,471.56 - 1,693,471.56
Roads, Highways & Bridges 5,715,932.51 5,715,932.51 - - -
Parks, Plazas & Monuments 2,407,020.00 - 2,407,020.00 1,034,769.30 1,372,250.70
Waterways, Aqueducts, 830,661.45 249,870.00 580,791.45 - 580,791.45
Seawalls, River Walls and
Others
Other Public Infrastructures 233,882.90 86,400.00 147,482.90 - 147,482.90
Total 89,157,412.39 22,277,976.33 66,879,436.06 18,097,240.99 48,782,195.07
In Percentage of:
Compliant & Not-Compliant 100.00% 24.99% 75.01%
Not Compliant 100.00% 27.06% 72.94%

In effect and as shown in Table 10, the projects implemented for CY 2013 in the
total amount of P66,879,436.06, or 75.01 percent, utilizing the 20% DF, were not
in accordance with the afore-cited JMC. In subsequent audit of transactions for the
second semester of CY 2013, the same issues continued to subsist despite the
recommendations contained in the interim audit report. The non-compliant
projects implemented from July to December 2013 amounted to P48,782,195.07,
or 72.94 percent of the total non-compliance. This high percentage of non-
compliance does not adhere to Section 5.0 of the JMC which states that:

“It is the responsibility of every Provincial Governor, City and Municipal

Mayor and Punong Barangay to ensure that the 20% of the IRA is optimally
utilized to help achieve desirable socio-economic development and
environmental outcomes…. Further, all concerned local chief executives are
hereby reminded that utilizing such fund, whether willfully or through
negligence, for any purpose beyond those expressly prescribed by law or
public policy shall be subject to the sanctions provided under the Local
Government Code and under such other applicable laws.” (Emphasis ours)

Moreover, despite our prior year’s audit recommendation, projects were not
realigned to the proper fund/program charges.

The improper utilization of the 20% DF resulted in the non-achievement of the

purpose/objective for which the said Fund was established to the disadvantage of
the intended beneficiaries.

44
 We have recommended that Management:

a. Allocate the 20% DF for development projects that shall contribute to the
attainment of desirable socio-economic development and environmental
management outcomes and shall partake the nature of investment or capital
expenditures;

b. Utilize the Fund to finance priority development projects and programs, as

embodied in the duly approved Local Development Plan that directly support
the Philippine Development Plan, the Medium-Term Public Investment
Program and the Annual Investment Program; and

c. Effect the necessary adjusting entries for the amount totaling P66,879,436.06
and P38,727,524.33, which pertains to the projects funded under the 20% DF
for CYs 2013 and 2012, respectively, that did not comply with the requirements
for projects under the Fund.

During the exit conference, Management informed that in its CY 2014

Development Plan, projects are already in conformity with the JMC.

4. Priority Development Assistance Fund (PDAF)/Disbursement Acceleration

Program (DAP)

4.1 Non-conformity of the utilization of PDAF/DAP funds to the intended purpose

Trust Funds shall consist of private and public monies which have officially come
into the possession of the local government or of a local government official as
trustee, agent or administrator, or which have been received as a guaranty for the
fulfillment of some obligation. A trust fund shall only be used for the specific
purpose for which it was created or for which it came into the possession of the
local government units. (Section 309 (b) of RA 7160)

Prior to the Supreme Court Decision declaring the PDAF as unconstitutional, the
Department of Budget and Management issued National Budget Circular No. 547
dated January 18, 2013 which prescribed the guidelines on the release of funds
chargeable against the PDAF for FY 2013. The PDAF shall be used to fund
priority development programs and projects identified by the Members of Congress
from the PDAF project menu in accordance with the said Circular. Fund releases,
as a rule, are covered by Special Allotment Release Orders (SAROs) which
indicate the intended purpose of the PDAF.

Review showed that utilization of the fund covered by three SAROs did not
conform to the intended purpose. In our analysis and as enumerated in Table 11,
total utilization amounted to P3,035,537.89, but expenses totalling P933,955.89,
such as but not limited to, printing of various tarpaulin for various activities,

45
procurement of polo/t-shirts as assistance to various organizations, office supplies,
spare parts and mass cards, were not compliant to the purposes stated in the
SAROs.

Table 11
Expenses
Available Total Not
SARO No. Purpose Balance Utilization Compliant

BMB-G-13- 1. Financial assistance to indigent and

T000000133 displaced families, families in
crisis situations, community
organizations, Civic and
community Activities, etc.,
includes but not limited to the
following: 3,575,000.00 2,656,307.89 867,475.89

.a Financial assistance;
.b Burial assistance;
.c Medical assistance;
.d Balik
probinsya/transportation
assistance;
.e Educational assistance; and
.f Other anti-poverty
assistance programs

2. Assistance to the City Government

of Marikina for the purchase of one
(1) unit Patrol/Multi-purpose
Vehicle for deployment to the
Office of the City Mayor

3. Assistance to the City Government

of Marikina for the purchase of one
(1) unit Patrol Motorcycle for
deployment to the Office of the
City Mayor.

BMB-G-12- Implementation of social services to

T000002805 indigent and displaced families, families
in crisis situation 309,499.21 280,820.00 65,320.00

BMB-G-11- Assistance to Indigents and displaced

T000004531 families, families in crisis situations 1,190,544.92 98,410.00 1,160.00
Total 5,075,044.13 3,035,537.89 933,955.89

Further verification disclosed that a release out of the DAP of the government,
covered by SARO No. G-12-00423 in the amount of P6,000,000.00 was recorded
in the books of accounts as PDAF. Our review of the documents on this release
showed the following purposes:

a. Support and financial assistance to indigents and displaced families, families in

crisis situations, community organizations, civic and community activities, etc.
(includes financial assistance, burial assistance, balik-probinsiya/transportation
assistance).

46
 b. Sports Development Program, which includes (1) support for medals, trophies
and uniforms for local sports/youth events and (2) assistance for local and
exercise events like Basketball Liga, Marathon, Biking, Chess and other Board
Games, Darts, Badminton, Walkathon, Traditional Sports and Game community
aerobics and other recognized sports.

However, expenses charged to this release disclosed that the funds were instead
used to procure items which were not supportive of the stated purpose of the
release. Among others, the procured items and services totalling P1,052,394.00
were spare parts, office and other supplies, various appliances for gift giving,
health benefit package for employees of national office and other supplies for
various activities.

Such utilization of the PDAF/DAP funds on items and activities which were not
related or aligned to the purposes of their release defeated its objectives to the
detriment of the intended beneficiaries.

We have recommended that Management:

a. Cause the return or refund from the General Fund to the Trust Fund the amount
of P933,955.89 on PDAF and P1,052,394.00 on DAP, which were used to
procure items and services not aligned with the purpose of the respective
releases of the funds; and

b. Pursuant to the Supreme Court Decision promulgated on November 11, 2013:

(1) include the P933,955.89 PDAF funds as part of the balance to be reverted to
the National Treasury; while (2) the DAP funds remain as Trust Fund to be
utilized for the purpose it was intended.

Management agreed to comply with the recommendations and requested the grant
of sufficient time to raise the required wherewithal to fully comply with the
recommendations.

4.2 Unexpended PDAF not reverted to the National Treasury – P20.449 million.

The balances of the unexpended PDAF are as follows:

Table 12
Balance Unexpended
Fund/ as of Receipt Unpaid Bal. As of
Status and Details/SARO No. 31-Dec-2012 in CY 2013 Utilization Obligation 31-Dec-2013
GENERAL FUND-
No SARO
December 13, 2012 1,000,000.00 - - 1,000,000.00
March 27, 2013 1,000,000.00 - - 1,000,000.00
March 27, 2013 1,000,000.00 - - 1,000,000.00
Total- General Fund 1,000,000.00 2,000,000.00 - - 3,000,000.00

47
 Balance Unexpended
Fund/ as of Receipt Unpaid Bal. As of
Status and Details/SARO No. 31-Dec-2012 in CY 2013 Utilization Obligation 31-Dec-2013
No utilization for CY 2013
08-04520 2,189,430.85 - - 2,189,430.85
02-0392 2,000,000.00 - - 2,000,000.00
BMB-G-11-02211 1,000,000.00 - - 1,000,000.00
09-04046 707,313.42 - - 707,313.42
BMB-G-11-T000004259 600,000.00 - - 600,000.00
BMB-G-13-T000002290 500,000.00 - - 500,000.00
04-044 294,250.00 - - 294,250.00
04-0658 200,000.00 - - 200,000.00
06-07493 80,000.00 - - 80,000.00
BMB-G-11-T000001948 52,284.43 - - 52,284.43
08-07034 34,857.50 - - 34,857.50
G-11-01026 17,960.00 - - 17,960.00
ROCS 09-01847 14,370.33 - - 14,370.33
05-01477 12,603.99 - - 12,603.99
07-07935 7,007.00 - - 7,007.00
08-01928 5,053.25 - - 5,053.25
ROCS-06-03669 3,685.44 - - 3,685.44
G-09-08022 188.90 - - 188.90
G-10-0401 180.00 - - 180.00
Total 7,219,185.11 500,000.00 - - 7,719,185.11
With Utilization for CY 2013
G-10-08272 1,428,430.00 80,000.00 - 1,348,430.00
BMB-G-12-T000000106 1,895,000.00 682,500.00 - 1,212,500.00
BMB-G-11-T000004531 1,190,544.92 98,410.00 - 1,092,134.92
BMB-G-13-T000000133 3,575,000.00 2,656,307.89 - 918,692.11
ROCS-09-04971 532,927.36 191,126.19 - 341,801.17
G-10-09678 309,200.88 20,000.00 - 289,200.88
BMB-G-12-T000000683 3,200,000.00 2,983,808.00 - 216,192.00
03-0663 178,543.00 28,500.00 - 150,043.00
BMB-G-11-02085 500,000.00 367,980.00 - 132,020.00
08-4389 6,756.81 2,000.00 - 4,756.81
08-6340 1,000,000.00 996,940.00 - 3,060.00
08-01505 3,337.55 3,000.00 - 337.55
G -10-09332 2,500,000.00 520,000.00 - 1,980,000.00
ROCS-08-07752 107,670.97 39,495.00 - 68,175.47
BMB-G-12-T000002805 309,499.21 280,820.00 - 28,679.21
Total 13,161,910.70 3,575,000.00 8,950,887.08 - 7,786,023.12
No SARO/No data available
Cong. Rafael Mariano 1,000,000.00 - - - 1,000,000.00
Robert Barbers 100,000.00 - - - 100,000.00
Loreta ann Rosales 87,554.36 - - - 87,554.36
No data available 35,775.60 - - - 35,775.60
Total 1,223,329.96 - - - 1,223,329.96
Unpaid obligation
BMB-G-12-T000002969 1,487,500.00 - 767,500.00 720,000.00
Total- Trust Fund 23,091,925.77 4,075,000.00 8,950,887.08 767,500.00 17,448,538.19
GRAND TOTAL 24,091,925.77 6,075,000.00 8,950,887.08 767,500.00 20,448,538.19

48
Details of these balances are as follows:

a. The Bank Reconciliation Statement as of November 31, 2013 for Development

Bank of the Philippines (DBP) account no. 0435-021897-030 under the GF
showed PDAF as a reconciling item in the total amount of P3,000,000.00.
Verification on the Statement of Accounts issued by DBP disclosed credit
entries for PDAF in the amount of P1,000,000.00 on December 13, 2012 and
two P1,000,000.00 on March 27, 2013. Management informed that despite its
request for the copies of SAROs with the Department of Budget and
Management, no SAROs were forwarded to the City, hence, the funds
remained as reconciling items in the General Fund (GF). These were
unrecorded in the books as of December 31, 2013.

b. The unexpended balance of PDAF received by the City pertaining to various

projects amounted to P17,448.538.19 as of December 31, 2013, exclusive of
interests earned from the bank. This amount, together with the balances of
other funds recorded in the Trust Fund (TF), such as but not limited to, transfer
of funds made by government agencies and from private individuals and
entities for specific purpose, suppliers/contractors guarantee deposits and
collections received or amounts withheld in trust for the account of government
agencies, was deposited in bank accounts maintained by the City for TFs. The
Accounting Office recorded each TF in separate subsidiary ledgers. Review
disclosed the following status and details of the unexpended balances of PDAF:

1. PDAF covered by 19 SAROs with a corresponding total of P7,719,185.11

reported zero utilization in CY 2013;

2. Fifteen PDAF releases registered utilizations totaling P8,950,887.08 in CY

2013, leaving an unexpended balance at year end of P7,786,023.12;

3. There were no available data or covering SAROs for four PDAF with a
total amount of P1,223,329.96; and

4. One PDAF has an unpaid obligation of P767,500.00 as of December 31,

2013 for the delivery of three units multi-cabs. The transaction was covered
by Purchase Order No. 1310-3232 dated October 7, 2013. The reported
unexpended balance of P17,448,538.19 as of December 31, 2013 for the TF
was net of the unpaid commitments of P767,500.00 and the earned interest
income.

The Supreme Court, in an En Banc Decision promulgated on November 19, 2013,

declared the PDAF articles as unconstitutional. The Court also decided that the
temporary injunction dated September 10, 2013 that it had issued on the matter was
declared permanent. As a result, the Court ruled: “the disbursement/release of the
remaining PDAF funds allocated for the year 2013, as well as for all previous
years, which are, at the time this Decision is promulgated, not covered by Notice of

49
 Cash Allocations (NCAs) but only by Special Allotment Release Orders (SAROs),
whether obligated or not, are hereby ENJOINED. The remaining PDAF funds
covered by this permanent injunction shall not be disbursed/released but instead
reverted to the unappropriated surplus of the general fund.”

We had recommended and Management agreed to remit the unexpended balances

of PDAF to the National Treasury, together with the earned interests that accrue to
the principal amount that is currently maintained in the bank.

Management has already remitted the unexpended balance of the PDAF to the
Bureau of the Treasury as evidenced by Official Receipt No. 4704861 dated May
26, 2014 in the amount of P18,885,690.08.

5. Accumulated interest income totaling P27.264 million earned from Trust Fund
deposits in various bank accounts

Section 311 of Republic Act No. 7160 provides that:

“Local treasurers shall maintain depository accounts in the name of their

respective local government units with banks, preferably government-owned,
located in or nearest to their respective areas of jurisdiction. Earnings of each
depository accounts shall accrue exclusively thereto.” (Emphasis ours)

As of December 31, 2013, the total interest income earned from bank deposits for trust
funds totaled P27,263,777.41 taken up in the books of accounts under the Due to LGUs
account. These interests have accumulated over the years covering monies deposited in
two banks under four Local Currency, Current Accounts (LCCA), and in one Time
Deposit (TD) account. Trust Fund monies received are deposited in any of the existing
bank accounts. The details of these bank deposits and the corresponding interests earned
are as follows:

Table 13
Interest Accumulated
Classification/ Balance as of
Bank For the Account of Earned for Interest as of
Account No. Dec 31, 2013
CY 2013 Dec 31, 2013

LCCA:
PVB 01001-000162-7 Various accounts 87,638,674.89 365,333.91
LBP 2722-1013-00 World Health Organization 723,254.57 568.61
LBP 2722-1018-82 Food Safety II 40,822.56 20.90
LBP 2722-1015-30 Healthy Tourists Parks 36,185.49 18.54
88,438,937.51 365,941.96 17,148,174.01
PVB TD: 1015-90042-3 58,713,929.74 1,136,473.63 10,115,603.40
Total 27,263,777.41

50
 The interests earned were recorded in the books in lump sum amounts based on the bank
book/bank statements, but were not recorded in the subsidiary ledgers reflecting the
breakdown of the respective interests earned for each Trust Fund sub-account.

We also noted that the utilization of the trust fund monies were limited only to the
principal amounts received, excluding any interests earned therefrom. Trust Fund
balances of existing or on-going projects remain deposited in the designated bank
accounts, thus, continuously earning interest income that accumulated in the books of
accounts.

The largest deposits are under LCCA No. 01001-000162-7 and the Time Deposit,
sources of which were trust funds from the National Government, like the Priority
Development Assistance Fund that was recently decided upon by the Supreme Court as
unconstitutional.

Moneys that accrue as trust funds in the custody of the City are to be utilized in the
implementation of the particular programs and projects identified to be funded for the
benefit mainly of the City constituents. As there are other priority projects implemented
or lined up to be implemented by all sectors of the government that needs the infusion of
funds, the available interest income earned from the deposits of the Trust Fund sourced
from the National Government, just like the PDAF, may need to be returned to the
government, rather than left stagnating in the bank.

We have recommended that the City Accountant:

a. Pro-rate the total interests earned based on the respective principal deposits per trust
fund source per bank account. This follows with all future interests earned from trust
fund bank accounts unless a pronouncement is made by a competent authority on the
appropriate action to be taken; and

b. Record in the respective subsidiary ledgers the pro-rated interests corresponding to

each trust fund.

6. Undisposed donations with specific purpose

Local Government Units are not prohibited to receive from and donate to other LGUs,
organizations, constituents or others, for legitimate purposes. One particular instance in
which this activity is done pertains to disaster-related donations.

51
Section 21 of Republic Act No. 10121 provides that upon the recommendation of the
LDRRMO and approval of the sangguniang concerned, the Local Disaster Risk
Reduction and Management Council (LDRRMC) may transfer the said fund to support
disaster risk reduction work of other LDRRMCs which are declared under state of
calamity. Further to this, Section 4.1.4 of COA Circular 2012-002 dated September 12,
2012, explicitly enumerated the sources and allocation of the LDRRM Fund. Among the
stipulated sources are funds received from other LGUs and other sources.

As regards the receipt of monies from other government agencies or private entities,
Section 309 (b) of Republic Act No. 7160 required that it shall be maintained in the Trust
Fund books to account for such receipt only to be used for the specific purpose for which
it was created or for which it came into the possession of the LGU.

The Trust Fund-Other Payables account as of December 31, 2013 included donations
received as early as 2005 to the current year from different sources for various specific
purposes in the total amount of P1,571,294.83. The summary is shown below.

Table 14
Year of Receipt
Nature 2005 2006 2007 2009 2012 2013 Total

52,240.1
Disaster related 0.00 42,730.00 0.00 7 694,799.66 541,375.00 1,331,144.83
Scholarship 0.00 0.00 110,000.00 0.00 0.00 0.00 110,000.00
Other purposes 105,000.00 0.00 25,150.00 0.00 0.00 0.00 130,150.00
52,240.1
Total 105,000.00 42,730.00 135,150.00 7 694,799.66 541,375.00 1,571,294.83

Verification disclosed that these donations were not utilized and have remained
undisposed until this time, thus, the very intention of the donor in extending assistance
was not satisfied. We also noted that the donations for disaster-related activities totaling
P1,331,144.83, as indicated in the above table were not reclassified/recorded as Trust
Liability- DRRM pursuant to Section 5.1.12 of COA Circular No. 2012-002.

Management explained that the projects/activities for which the noted donations
pertained to were carried out and accomplished, with funds sourced from the General
Fund of the City. Except for the disaster-related activities, the purposes of the other
donations are regular projects/activities of the City, which are included as items in the
budget.

We are cognizant that the City has continuously worked on the projects/activities into
which the received donations were related. We have also noted that indeed the
projects/activities were accomplished with enough budgets from the General Fund.
However, the fact remains that the financial help that came from the various donors have
remained undisposed for years and were not infused into the intended purposes. Had
Management utilized the amounts, the corresponding figures from the general budget
could have been made available to other vital undertakings of the City for the benefit of
its constituents.

52
 We have recommended the following:

a. Donations received that were intended for disaster activities caused by typhoons
Maring, Habagat and Yolanda may be utilized for post disaster-related projects
subject to the requirements of Section 6.5 of the National Disaster Risk Reduction
and Management Council (NDRRMC), Department of Budget and Management
(DBM) and Department of the Interior and Local Government (DILG) Joint
Memorandum Circular (JMC) No. 2013-1 dated March 25, 2013, which states that:
“The unexpended balances of the LDRRMF may be released and utilized for new
expenditure items upon submission of a revised AIP as approved by the local
sangguniang and Local Chief Executive (LCE) upon recommendation of the
LDRRMC in accordance with the approved LDRRMP;”

b. Donations received for projects/activities that are ongoing or regularly held may be
utilized on the same or related undertakings subject to the approval of the
Sanggunian;

c. Devise a mechanism on the utilization and disposition of donations intended for

specific purpose that are received from all sources; and

d. Reclassify the disaster-related donated amounts totaling P1,331,144.83, as well as all

succeeding donations, to Trust Liability –DRRM under the Trust Fund.

Management replied that in compliance with the recommendation, the City Accounting
Office has already reclassified the account, Other Payables, to the Trust Liability-DRRM
under JEV No. 2014-03-000279 dated March 7, 2014 in the amount of P1,331,144.83,
and that they will coordinate with the LDRRMC for inclusion in the revised AIP of the
said amount for the approval of the Sanggunian.

7. Representation and Transportation Allowance (RATA)

7.1 Unauthorized claim of RATA by Officers-in-Charge (OIC)

Section 9.1.1 of Local Budget Circular (LBC) No. 103 dated May 15, 2013 issued
by the Department of Budget and Management provides that "An OIC of a
position, authorized in an LGU staffing pattern and entitled to RATA, may be
authorized to collect the RATA for the position on reimbursable basis, if stipulated
in the office order designating him/her as such.”

Verification of disbursements disclosed that officials in an acting capacity were

paid RATA for CY 2013. While the LBC allowed an OIC of a position for the
entitlement of RATA, in the Office Order issued to the respective officials,
payments for RATA for the designated position was not stipulated. Further, upon
inquiry with the Personnel Office, no records would show that a revised Office

53
 Order was issued to the concerned officials specifying the granting of RATA.
Table 17 shows the details.

Table 15
Designation Office Order Total RA TA Period Covered
Acting Assist Chief of the No. 040-10 dated July 27, 2010
129,600.00 64,800.00 64,800.00 Jan to Dec 2013
BPLO
Acting Assistant City No. 0078-09 dated March 5, 2009
129,600.00 64,800.00 64,800.00 Jan to Dec 2013
Accountant
Acting Chief of Parks and No. 0044-07 dated Feb. 28, 2007
108,000.00 54,000.00 54,000.00 Jan to Sept 2013
Recreation Office
Total 367,200.00 183,600.00 183,600.00

In the case of the Acting Chief of Parks and Recreations Office, aside from RATA,
he was issued a service vehicle duly acknowledged by him on January 9, 2013.
Item 8.2.1 of Local Budget Circular No. 103 dated May 15, 2013 does not allow
claim for transportation allowance when the official is issued a service vehicle.

We have recommended that Management:

a. Consider the issuance of a revised Office Order for the concerned officials with
the provision that they are authorized to collect RATA, with ratification
pertaining to the previous claims, except for Mr. Maderal who is assigned a
government vehicle hence, not authorized to claim TA; and

b. Require the refund of the paid TA of the Acting Chief of Parks and Recreation
Office in the total amount of P54,000.00.

In response to our recommendation, the City Accounting Office requested for the
issuance of a revised Office Order with the provision to collect RATA for the
Acting Assistant City Accountant.

7.2 Unauthorized claim of Transportation Allowance

Item 8.2.1 of Local Budget Circular No. 103 dated May 15, 2013 issued by the
Department of Budget and Management provides that those who are assigned or
who use government motor transportation shall no longer be entitled to the TA, but
only to the commutable RA for the month. This is supported by the Supreme Court
in its Decision in Aida Domingo versus the Commission on Audit (G.R. No.
112371 October 7, 1998), which states that:

"The transportation allowance … shall not be granted to officials who are

assigned a government vehicle or use government motor transportation,
except as may be approved by the President of the Philippines. …”

Verification of disbursements for CY 2013 disclosed officials who have been

issued with government-owned motor vehicles for official use, as documented in
the Property Acknowledgment Receipts, were still paid TA. Table 18 shows the
details of the payment.

54
 Table 16
Not Allowable Reason
Position/Office Total Allowable
Amount Period With Vehicle Issued
City Mayor/Mayor’s Office 114,000.00 - 114,000.00 Jan to Dec 2013 since July 2, 2010
City Vice Mayor/Vice-Mayor’s
Office 90,000.00 - 90,000.00 Jan to Dec 2013 since July 2, 2010
City Councilor/City Council’s Office 42,000.00 37,500.00 4,500.00 July 8 to 31, 2013 since July 8, 2013
City Councilor/City Council’s Office 6,000.00 3,000.00 3,000.00 July 15 to 31 2013 since July 15, 2013
City Councilor/City Council’s Office 6,000.00 1,500.00 4,500.00 July 9 to 31, 2013 since July 9 2013
City Councilor/City Council’s Office 6,000.00 1,500.00 4,500.00 July 9 to 31, 2013 since July 9, 2013
CGDH III/City Planning Office 72,000.00 31,500.00 40,500.00 Jun 7 to Dec 2013 since June 7, 2013
CGDH III/City Transportation
Management Development Office 72,000.00 - 72,000.00 Jan to Dec 2013 since Oct 21, 2002
CGDH III/Business Permits and
Licensing Office 72,000.00 16,500.00 55,500.00 Mar 26 to Dec 2013 since March 26, 2013
CGDH III/City Assessor’s Office 72,000.00 16,500.00 55,500.00 March 26 to Dec 2013 since March 26, 2013
CGDH III/City Personnel Office 72,000.00 - 72,000.00 Jan to Dec 2013 since July 8, 2010
CGDH III/City Environment
Management Office 72,000.00 - 72,000.00 Jan to Dec 2013 since Oct 30, 2009
City Accountant/Accounting Office 72,000.00 - 72,000.00 Jan to Dec 2013 since July 6, 2010
CGDH III/City Health Office 72,000.00 - 72,000.00 Jan to Dec 2013 since Nov. 5, 2009
CGDH II/Parks Development Office 66,600.00 - 66,600.00 Jan to Dec 2013 since July 6, 2010
CGADH III/City Treasurer’s Office 66,600.00 14,850.00 51,750.00 March 26 to Dec 2013 since March 26, 2013
CCADH III/City Council Office 72,000.00 66,000.00 6,000.00 December 2013 since Dec. 3, 2013
CGADH III/Center for Excellence 64,800.00 - 64,800.00 Jan to Dec 2013 since July 21, 2010
CGADH III/City Budget Office 64,800.00 58,050.00 6,750.00 Nov 28 to Dec 2013 since Nov. 28, 2013
CGDH III/Marikina Sports Park 72,000.00 - 72,000.00 Jan to Dec 2013 since July 7, 2010
ABC President/City Council Office 3,483.72 - 3,483.72 Dec 1-18, 2013 since June 2011
ABC President/City Council Office 2,516.02 - 2,516.02 Dec 19-31, 2013 since 2008
Former CB Officer 66,000.00 - 66,000.00 Jan to Nov 2013 since July 5, 2010
Former City Treasurer 48,000.00 - 48,000.00 Jan to Aug 2013 since Jan. 28, 2010
Total 1,366,799.74 246,900.00 1,119,899.74

The following section of the DBM-LBC Circular, likewise, provides the

responsibility of the Local Chief Executives for the proper implementation of the
afore-cited Section.

“15.0 Responsibilities of Local Chief Executives

Local Chief Executives shall be held responsible for the proper

implementation of this Circular. They shall be held liable for any
grant of RATA not in accordance with the provisions of this
Circular, without prejudice, however, to the refund of any undue
payments received by the officials and employees concerned.”

The non-compliance by the City to the express provision of the regulation caused
the inappropriate disbursement of funds totaling P1,119,899.74 for CY 2013, to the
prejudice of the City.

55
 We have recommended that Management:

a. Stop the granting/payment of Transportation Allowances to officials who are

issued government vehicles pursuant to Item 8.2.1 of the DBM Local Budget
Circular No. 103; and

b. Require the refund by the concerned officials of the Transportation Allowances

received for CY 2013 in the total amount of P1,119,899.74.

Some officials commented that the service vehicle is used by the designated liaison
officer in transacting official business with other government agencies such as the
GSIS, Pag-IBIG, DBM and PhilHealth.

8. Pamantasan ng Lungsod ng Marikina (PLMar)

8.1 Appointees to executive positions not qualified pursuant to Civil Service

Commission Memorandum Circular (CSC MC) No. 27, s. 2001 (amending and
clarifying Section 12 of Rule XIII of CSC MC No. 15, s. 1999)

The PLMar originally engaged the services of a Vice President (VP) for Academic
Affairs and a VP for Administrative Affairs covered by contracts of employment
with specific terms that ended on May 31, 2013 and May 15, 2013, respectively.
Prior to the expiration of the two contracts, the PLMar Board of Trustees held that,
in the exigency of the service, both incumbent VPs would continue their services in
the university in hold-over capacities until the selection of qualified appointees.
Consequently, the President of PLMar issued Office Orders No. 24 and 25 both
dated July 19, 2013, designating the two VPs in Officers-in-Charge-Vice President
(OIC-VP) capacities for Academic Affairs and for Administrative Affairs. Both
directly report to the University President and were responsible for the University’s
over-all academic development program.

In our evaluation of the appointments of the two OIC-VPs, we noted that these
were not in accordance with Section 12.a of the CSC MC No. 27, s. 2001, which
provides that, “(a) No person who has reached the compulsory retirement age of 65
years can be appointed in the government, subject only to the exception provided
under sub-section (b) hereof.” Section 12.b further states that, “A person who has
already reached the compulsory retirement age of 65 can still be appointed to a
coterminous/primarily confidential position in the government.”

Both appointees were already more than the retirement age of 65 years at the time
of their current appointments, therefore, the exceptions mentioned in the issuance
did not apply because they were no longer qualified for such positions. The
appointments were neither co-terminus nor the positions held were primarily
confidential in nature, but rather permanent positions based on the plantilla of
PLMar. In the case of OIC-VP for Administrative Affairs, we further noted that

56
 she was already 65 years old when she was hired under contractual status as VP for
Administrative Affairs.

8.2 Designation as OIC-VP not compliant with CSC MC No. 5, s. 1985

Further review disclosed that the respective contracts of employment of the

appointees embodied the following duties and responsibilities:

a. As OIC-VP for Academic Affairs -

 Work closely with the deans, graduate program coordinators and directors
of the different colleges of the University to facilitate the university-wide
curriculum development program;
 Implement, exercise, and preserve the University’s mission and vision for
academic excellence;
 Recommend academic policies to the President;
 Attend conferences and seminars, and whenever designated, represent the
President in external affairs and meetings concerning academic affairs and
development programs; and
 Perform other duties that may be assigned by the President.

b. As OIC-VP for Administrative Affairs -

 Implement administrative orders and policies, and initiate the development

of plans for strategic change;
 Exercise general supervision and control of offices in the administrative
department;
 Recommend administrative policies, pertaining to business administration
of the different offices and departments;
 Review all types of correspondence pertaining to administrative matters;
 Attend conferences and seminars and, whenever designated, represent the
president in external affairs and meetings concerning administrative affairs
and development; and
 Perform other duties that may be assigned by the president.

Aside from being over their retirement age, both officers were hired under
contracts of employment; hence, they were both considered contractual employees.
The duties and responsibilities assigned to them confirmed that they both exercised
control or supervision over teaching and non-teaching personnel of PLMar, who
were holders of plantilla positions or whose positions in the service were
permanent. This set up is contrary to Item No. 6 of CSC MC No. 5, s. 1985, which
rules that:

“Contractual employees and consultants …. In no case should they

be designated Officers-in-Charge or Executive Directors or the like

57
 wherein they exercise control or supervision over regular personnel
in the hiring agency. ….”

The appointees actually performed the duties and responsibilities called for by the
positions. The OIC-VP for Academic Affairs exercised control over teaching and
non-teaching personnel. Among other functions performed, she issued various
memoranda governing the conduct of the affairs of the various colleges of PLMar,
as well as the designations of professors and other personnel to certain committees
or undertakings. She held meetings with the Deans and other officials of the
academe, and issued guidelines indicating the order by which activities were to be
accomplished.

On the other hand, the OIC-VP for Administrative Affairs performed various tasks,
such as, among others, acted as member of the hiring committee, partook in the
decision-making over audit committee concerns, called meetings, ordered specific
assignments to the different colleges and offices, decided on matters or issues
brought before her office, and issued memoranda containing specific instructions
for compliance of employees.

The acts performed indicated that the appointed OIC-VPs have discretion over
school operational matters, and exercised supervision and control over teaching
and non-teaching personnel of PLMar, thus, contradicted Item No. 6 of CSC MC
No. 5, s. 1985.

We have recommended that the PLMar Board of Trustees ensure compliance to the
CSC requirements in all future Contracts of Employment to be issued.

The PLMar President replied that the above-mentioned audit observations will be
discussed in their next Board meeting.

Inquiry from Management disclosed that the PLMar Board has appointed new
vice-presidents who are qualified in the executive position effective June 2014 in
compliance with Section 12.a of the CSC MC No. 27, s. 2001.

9. 5% MMDA Contribution

9.1 Appropriated amount for the five percent MMDA contribution was less by
P17.364 million

Section 10 of R.A. 7924, otherwise known as An Act Creating the Metropolitan

Manila Development Authority, states that:

“Five percent (5%) of the total annual gross revenue of the preceding
year, net of the internal revenue allotment, of each local government

58
 unit mentioned in Section 2 hereof, shall accrue and become payable
monthly to the MMDA by each city or municipality. …”

Review of the City Budget for CY 2012 showed that the above provision was not
strictly complied with, hence, the amount appropriated for the 5% statutory
contribution to MMDA was short by P17,364,400.38, computed as follows:

Table 17
Total Operating Income for CY 2012 1,520,865,353.00
Add: Discount on Real Property Tax 169,358,194.55
Total Gross Revenue for CY 2012 1,690,223,547.55
Less: IRA realized for CY 2012 518,291,220
Total Gross Revenue Net of IRA for CY 2011 1,171,932,327.55
Section 10 of R.A. 7924 5%
5% Subsidy to MMDA for CY 2012:
Per Audit 58,596,616.38
Per Annual Budget 41,232,216.00
Short in Appropriation 17,364,400.38

Although the five percent contribution to MMDA was already deducted by the
DBM from the Internal Revenue Allotment of the City, the corresponding
appropriation should be correctly applied to reflect the true budget and for the
accurate allocation of the City’s resources.

We have recommended that Management:

a. Re-compute the appropriation of the statutory contribution to MMDA for

Budget Year 2014 to ensure full compliance with R.A. 7924; and

b. Reconcile the total payments by the City with the books of accounts of
MMDA. Any unpaid balance should be appropriated and correspondingly
remitted to MMDA.

Management remarked that the five percent contribution to MMDA appropriated

for Budget Year 2014 is P43,000,000.00.

10. Annual Procurement Plan (APP)

10.1 Non-compliant APP

The City’s APP for CY 2013 was prepared by the Bids and Awards Committee
(BAC) Secretariat, reviewed by the BAC Chairman, and approved by the City
Mayor, with an amount of P186,730,139.90. The APP was based from the
consolidated Project Procurement Management Plan (PPMP) from each
Department of the City.

59
a. Inconsistent item categories and amounts per APP as against the
consolidated PPMPs

Analysis showed inconsistencies in categorizing items and amounts carried

forward from the PPMP to the APP. These inconsistencies are summarized in
Table 20.

Table 18
Difference
Project/Particulars Per APP Per Audit
Over/(Under)

Office Supplies 13,052,451.83 16,789,236.93 (3,736,785.10)

Janitorial Supplies 4,892,964.00 3,085,667.88 1,807,296.12
Office Equipment 0.00 919,354.60 (919,354.60)
Other Maintenance and Other Operating
Expenses (OMOOE) 0.00 15,717,013.25 (15,717,013.25)
Property, Plant and Equipment (PPE) 0.00 21,258,739.72 (21,258,739.72)
Medicines and Drugs & Medical Supplies 14,745,170.00 14,515,113.00 230,057.00
Services 30,800,000.00 25,360,170.00 5,439,830.00
Other Supplies/Foods 8,444,968.00 0.00 8,444,968.00
Accountable Forms 2,162,435.00 0.00 2,162,435.00
Capital Outlay 8,529,968.00 0.00 8,529,968.00
Public Works 104,102,183.07 104,102,183.07 0.00
Total 186,730,139.90 201,747,478.45 (15,017,338.55)

The total APP and the audited amount based from the PPMPs supporting the APP
differed by P15,017,338.55. The difference was caused by various reasons noted
in our review, as follows:

 There were expense categories included in the APP which were not found in
the consolidated PPMPs and vice versa. As shown in Table 18, the requirement
for other supplies/foods, accountable forms and capital outlay were included in
the APP, but these were not categorized as such in the PPMPs of the
Departments. On the other hand, there were expense categories (like office
equipment, PPE and OMOOE) that were included in the PPMPs which were
not grouped as such in the APP.

 There were items improperly categorized in the PPMPs, thus, were

consolidated as such in the APP. For instance, the requirement for the
improvement of the Multi-purpose Recovery Facility and the exhibit area were
categorized in the PPMP of the City Environment Management Office as IT
equipment and software. In the APP, this was included as an item for Public
Works.

 There were inaccurate footings of totals indicated in the consolidated PPMPs,

as against the audited amounts (Table 19).

60
Table 19
Per
Difference
Department Consolidated Per Audit
Over (Under)
APP
MCDC and other offices 55,106,118.20 55,111,618.20 (5,500.00)
PIO and other offices 18,854,874.00 18,854,874.00 0.00
VMO and other offices 11,745,560.48 11,746,360.48 (800.00)
Accounting and other offices 5,799,985.00 2,922,824.50 2,877,160.50
MISCC and other offices 4,230,710.45 6,089,211.45 (1,858,501.00)
Treasury and other offices 2,887,646.75 2,920,406.75 (32,760.00)
Total 98,624,894.88 97,645,295.38 979,599.50

b. APP not completely accomplished

Section 6, Article I of R.A. 9184 prescribed the standardization of the procurement

process and the forms. It states, “(t)o systematize the procurement process, avoid
confusion and ensure transparency, the procurement process, including the forms to
be used, shall be standardized insofar as practicable.” It further provides that, “for
this purpose, the GPPB shall pursue the development of generic procurement
manuals and standard bidding forms, the use of which once issued shall be
mandatory upon all Procuring Entities.”

The City’s APP was prepared using the prescribed GPPB form and contained the
consolidated requirements from each Department of the City. However, review
disclosed that the APP summary did not indicate the complete information required
to be indicated in the prescribed form. This was also true in the case of the APP
form prescribed per category that supported the APP summary. The undisclosed
information was as follows:

1. APP summary

 PAP code
 PMO/end-user
 Schedule of the procurement activities to be undertaken (from pre-
procurement conference to acceptance/turnover)
 Brief description of the related program/project

2. APP supporting schedule

 monthly quantity requirement per item of procurement

 PS-DBM itemized price catalogue

It is emphasized under Section 7, Article II of R.A. No. 9184 that all procurement
should be meticulously and judiciously planned by the Procuring Entity.
Following such guideline, government agencies are encouraged to prepare an APP

61
 for their operational requirements in order to properly organize and schedule the
procurement activities and to completely consider the needs and obtain the most
reasonable price for the City. Non-compliance with the governing guidelines
defeats the intent and objective of the regulation to the disadvantage of the City.

We have recommended that:

a. The BAC Secretariat, who is responsible for the preparation of the APP
pursuant to Section 7.3.4 of R.A. 9184, strictly comply with the requirement
under Section 7 of the same law; and

b. All concerned Departments undertake proper review and coordination in all

levels of the preparation of the APP in order to prevent the occurrence of errors.

Management replied that the 2014 APP will be prepared in compliance with
Section 7 of RA 9184. It also informed that:

a. The BAC will call a procurement officers meeting to appraise them with the
use of the prescribed form and the appropriate entries to be made on the
relevant forms.

b. The BAC is now consolidating anew all PPMPs to include all the expense
categories under MOOE, Capital Outlay, Public Works and Services.

11. Gender and Development (GAD)

11.1 GAD Plan and Budget

To promote women empowerment and pursue equal opportunities for women and
men, equal access to resources and development outcome, and elimination of any
forms of discrimination and inequality, the City needs to develop plans, programs
and mechanisms to realize these endeavors. To achieve this, the City must provide
funds to be utilized for such purpose.

Section 36.a of the Magna Carta for Women, or R.A. No. 9710, authorizes
government agencies and local government units to allocate at least five percent of
the agency’s or the local government unit’s total budget appropriations, which
reads as follows:

“… The cost of implementing GAD programs shall be the agency’s or the

local government unit’s GAD budget which shall be at least five percent
(5%) of the agency’s or the local government unit’s total budget
appropriations.”
Despite our previous year’s findings on the audit of GAD, we still noted that the
amount appropriated for CY 2013 was short by P53,859,706.11 (Table 22).

62
 Table 20
Particulars Amount
Total Appropriations per Annual Budget for CY 2013 1,626,822,558.17
Section 36.a of RA 9710 5%
Appropriations-
Per Audit 81,341,127.91
Per Budget 27,481,421.80
Difference 53,859,706.11

As a result of under-budgeting, the funds originally budgeted maybe inadequate to

address various gender issues; hence, the City’s pursuit to gender equality and
women empowerment could not be fully attained.

We have recommended that the City Budget Office appropriate the correct amount
to ensure that the budget for the GAD is adequate to address various gender issues.

11.2 No GAD Code

The third paragraph after Section 36(a) of R.A. No. 9710 encourages LGUs to
develop and pass a GAD Code, herein quoted as follows:

“…

Local government units are also encouraged to develop and pass a GAD
Code based on the gender issues and concerns in their respective localities
based on consultation with their women constituents and the women’s
empowerment and gender equality agenda of the government. The GAD
Code shall also serve as basis for identifying programs, activities, and
projects on GAD.”

To help LGU in the preparation of the GAD Code, the Philippine Commission on
Women (PCW), Department of the Interior and Local Government, Department of
Budget and Management and National Economic and Development Authority
issued Joint Memorandum Circular (JMC) No. 2013-01 for the Guidelines on the
Localization of the Magna Carta of Women.

Item 5.E. of the JMC states that:

“1) All LGUs shall formulate and pass their GAD Codes or ordinances to
support the LGU’s efforts in promoting, protecting and fulfilling
women’s human rights, women’s economic empowerment and gender-
responsive governance towards the attainment of gender equality and
women’s empowerment.

63
 2) The LGU GFPS shall assist the Local Sangguniang in the formulation of
a GAD Code or ordinance.….”

Interviews conducted disclosed that to date, the City Council has yet to formulate
the policies that express adherence to GAD concepts relevant to the City’s efforts
towards the attainment of gender equality and women’s empowerment and pass the
GAD Code. Without the GAD Code, some gender issues were not addressed due
to lack of support and commitment of some City personnel as shown in the table
below. Hence, the City, particularly the GAD Management Team (The City’s GAD
Focal Point System), may not be able to sustain its effort in promoting, protecting
and fulfilling women’s human rights, women’s economic empowerment and
gender-responsive government towards the attainment of gender equality and
women’s empowerment. Also, commitment/ participation of officers and
employees and other concerned personnel may not be established due to the
absence of enabling ordinance or GAD Code to encourage their
participation/commitment.

Table 21
Gender Performance Actual Variance/
GAD Activity Target
Issues Indicator Result Remarks

GAD main- Continuing Attendance to Two batches Not Difficulty of

streaming gender and legal Gender Sensitivity of GST for Conducted coordinating
education Training of PNP- PNP- GAD
Marikina, PCP Marikina, initiatives
Commanders PCP with PNP
Commanders

Conduct of Training Not Sensitizing

training and series for Conducted the
attendance of selected LGU institution
target personnel officers/empl was in slow
oyee on process due
“Advanced to
Gender personnel’s
Concepts” & lack of
“Planning interest in
using Gender GAD
analysis”

Prevention Continuing Legal Education Gender and Not Barangay

of Violence Capacity Legal Conducted Officials
Against Building and Education for disinterested
Women and other Support Barangays in attending
Their Services for GAD related
Children Barangay VAW trainings
(VAWC) Desk Officers while most
(BVDOs) and BPOWs
Barangay Peace heads acted
and Order positively
Workers compared to
(BPOWs) BVDOs,

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 Gender Performance Actual Variance/
GAD Activity Target
Issues Indicator Result Remarks
even with
the latter’s
attendance
to GAD
related
trainings

Establishment, Establish an Established Meeting Experienced

Operation, and operation Referral operational with difficulty in
Maintenance of System for VAWC Referral identified establishing
VAW Referral Network members, commitment
Network System System for discussions of members,
VAWC of possible especially
victims- service from line
survivors protocols, agencies in
and Marikina
agreement
for MOA
signing of
members to
formalize
network

We have recommended that GAD Code should be formulated and be passed

pursuant to the afore-cited provisions of the law and rule.

B. Performance Evaluation

1. Special Education Fund (SEF) Utilization

Section 272 of R.A. No. 7160, otherwise known as the Local Government Code, states
that “(t)he proceeds … accruing to the Special Education Fund (SEF) shall be
automatically released to the local school boards: … the proceeds shall be allocated for
the operation and maintenance of public schools, construction and repair of school
buildings, facilities and equipment, educational research, purchase of books and
periodicals, and sports development as determined and approved by the Local School
Board.” (Underscoring ours)

Under the Code, the annual school board budget is prepared annually by the division
superintendent, city superintendent or district supervisor, as the case may be, and
approved by the Local School Board. The budget, under Section 100 (b) of the Code,
shall be supported by programs, projects, and activities of the school board. The Code
further states under Section 100 (c) that the budget shall give priority to the following:

a. Construction, repair, and maintenance of school buildings and other facilities of

public elementary and secondary schools;

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b. Establishment and maintenance of extension classes when necessary; and
c. Sports activities at the division, districts, municipal, and barangay levels.

The budget/appropriation pertaining to the SEF for three successive years covering CYs
2011 to 2013 is summarized in Table 22, and the significant information and
observations noted as a result of our analysis and review are discussed thereafter.

Table 22
Budget/Appropriation Average
Particulars 2011 2012 2013 Total Amount %

Personal Services
Salaries and Wages and
other personnel services-
Casual Teachers and 42,094,938.92 46,956,771.72 51,655,462.00
Other Non-teaching
personnel

Research and
52,619,283.99 54,104,746.57 57,870,000.00
Evaluation Allowances
Longevity Pay 2,823,000.00 2,823,000.00 3,075,600.00
Hazard Pay 441,000.00 465,000.00 510,000.00
Total 97,978,222.91 104,349,518.29 113,111,062.00 315,438,803.20 105,146,267.73 70.90%
42,480,262.0
MOOE 51,983,061.08 37,791,842.43 37,665,882.53
127,440,786.04 1 28.65%
Capital Outlay
666,666.6
Other PPE 2,000,000.00 0.00 0.00
2,000,000.00 7 0.45%
School Buildings 0.00 0.00 0.00 0.00 0.00 0.00%
151,961,283.9 142,141,360. 444,879,589. 148,293,196.4
Totals 150,776,944.53
9 72 24 1 100%

a. SEF budget not fully compliant with the prioritization set under RA 7160

The total budget/appropriation for the three-year period amounted to

P444,879,589.24, broken down into Personal Services, Miscellaneous and Other
Operating Expenses and Capital Outlay.

 Personal Services (PS)

The budget for PS consistently shared the biggest chunk with an average of
P105,146,267.73, equivalent to 70.90 percent of the P148,293,196.41 average
total budget for the three-year period. A substantial portion of the budget was
spent on Research and Evaluation Allowances (REA). For CY 2013, the budget
for PS was P113,111,062.00, of which REA’s allocation was P57,870,000.00, or
51.16% of the total PS.

 Miscellaneous and Other Operating Expenses (MOOE)

The average allocation for MOOE covering the three years amounted to
P42,480,262.01, or 28.65 percent of the total budget for three years. Analysis
showed a declining trend of allocation from P51,983,061.08 in CY 2011 to

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 P37,791,842.43 in CY 2012, and down to P37,665,882.53 in CY 2013, as shown
in the table.

 Capital Outlay – Other Property, Plant and Equipment

This item was allocated with a total of P2,000,000.00 in the CY 2011 budget,
which is equivalent to 1.32 percent of the total budget for that year. We noted
that in the succeeding two budget years, this item was no longer included in the
budget allocation.

 Capital Outlay – School Buildings

For three straight years covered by the analysis, there was no allocation for
construction and repairs of school buildings, thus, were not among the priorities
in the SEF budget during those years. Review of records disclosed that there
were reported additions totaling P386,261,564.53 to the School Buildings
account in CY 2011, funded from various sources and completed in 2011.

 Capital Outlay – Continuing Appropriation

At the beginning of CY 2013, the continuing appropriation for Capital Outlay

had a balance of P2,415,667.64. This was the source of funding in the
procurement of chairs, tables and window blinds totaling P893,414.69, and IT
equipment amounting to P128,600.00 during said year.

The above information about the budget does not support the concerns that were
gathered during the interview with officials from selected six elementary and six
secondary schools within the jurisdiction of the City. The following are the results of
the interview:

 Budget needs for Capital Outlay

1. Additional school buildings and rooms, especially with the implementation of

the K to 12 program that requires an additional 2 years in high school

2. Lot for the construction of additional buildings (Marikina Heights High

School)

3. Completion of the 3-storey building at Kalumpang National High School

which was delayed due to insufficient funding from the Priority Development
Assistance Fund. The construction started two years ago, with the first and
second floors already completed, but the third floor is still undergoing
construction up to present

4. Space/Rooms to house students, laboratory equipment, computers and other

educational properties and paraphernalia

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 5. Enough comfort rooms and service areas

6. Computer units for students under the Information and Communication

Technology program, which is part of the Department of Education’s
(DepEd) implementation of the Strengthened Technical-Vocational Education
Program and Technology and Livelihood Education Curriculum for the
Junior High School starting SY 2012-2013. Due to limited funds that
resulted in the deficient number of available computer units and computer
rooms, all secondary schools visited were not ready for the effective
implementation of this program.

7. LCD TV or large LCD monitor with speakers and USB port for each
classroom. Teachers who were interviewed explained that the LCD TV or
monitor was more advantageous than putting up one computer room that
could only house six LCD computer monitors and one mother server for the
e-learning program (media presentation and reading assessment) that could
only be utilized by six or so students at a time. If funds were limited, they
suggested prioritizing the grades five and six levels, until all levels will be
accommodated.

The interviewees further stated that using such type of equipment will result
in a more realistic presentation, especially in the Science subject that is noted
to be more interesting to students. Also, it requires less time for the teachers
to prepare their lessons since some of the data are available online.

8. Equipment and facilities for the Home Economics, Agri-Fishery Arts and
Industrial Arts in some schools, which were selected to implement the K to
12 program so that the goal of the DepEd to produce skilled and qualified
individuals who are equipped with the appropriate knowledge in technology
for new endeavors may be attained

9. Blackboards in the newly completed school building (Nangka Elementary

School)

 Budget needs for the Operation and Maintenance of School Buildings and
Facilities

1. Upgrading of the electrical power lines of Marikina and Sta. Elena High
Schools, two of the biggest schools with huge electrical loads;

2. Rehabilitation of the dome to eradicate/minimize the noise from the outside

surroundings of Marikina High School;

3. Treatment of the Rodriguez building at Kalumpang Elementary School that is

infested by termites, and repair of its dilapidated ceiling and roof gutters; and

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 4. Unpaid telephone bills of the Marikina Heights High School in the amount of
P7,000.00 due to unavailability of funds. This resulted in the disconnection
of the telephone line.

While the above identified concerns are confronting the school authorities, we noted
that these were not considered in the preparation of the budget. The Annual School
Board budget for CYs 2011 to 2013 did not contain the prioritized projects set out
under R.A. 7160. The issues raised, which were unaddressed, were setbacks that
could hinder the successful realization of the purpose of the SEF as envisioned under
the law.

We have recommended that the School Division Superintendent and the Local
School Board:

a. formulate the budget for SEF following the priorities set under Sections 272 and
100(c) of R.A. 7160 with due consideration of the related concerns and issues
reported by the school officials; and

b. encourage the school officials to formally report their issues and concerns for the
proper consideration and deliberation of the Local School Board.

b. Utilization of the SEF budget not in accordance with RA 7160 and the DECS-
DBM-DILG Joint Circular No. 01

Further to the provisions of R.A. 7160 relating to SEF, DECS-DBM-DILG Joint

Circular No. 01 dated April 14, 1998 was issued for more detailed guidelines in
carrying out its objectives of the fund. Section 4 thereof provides that, the Local
School Board shall give priority to the following expenses:

“Operation and Maintenance of public schools, including organization of

extension, non-formal, remedial and summer classes as well as payment of
existing allowances of teachers granted by local government units
chargeable against the SEF as of December 1997, provided that any
additional allowances that may be granted to teachers by LGU shall be
charged to the general fund of the LGUs subject to existing budgeting rules
and regulations. …”

The obligated amounts pertaining to the SEF for three successive years covering
CYs 2011 to 2013 is summarized in the Table 23.

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Table 23
Obligation Average
Particulars
2011 2012 2013 Total Amount %
Personal Services (PS)
Salaries and Wages and
other personnel
services-Casual 42,034,896.65 45,534,921.18 41,865,401.87
Teachers & Other Non-
teaching personnel
Research and
52,619,283.99 54,011,017.15 57,034,549.24
Evaluation Allowances
Longevity Pay 2,823,000.00 2,795,538.37 2,546,909.35
Hazard Pay 441,000.00 465,000.00 510,000.00
Total Personal Services 97,918,180.64 102,806,476.70 101,956,860.46 302,681,517.80 100,893,839.27 73.83%
MOOE 44,020,229.25 30,114,835.06 31,129,959.53 105,265,023.84 35,088,341.28 25.68%
Capital Outlay
Other PPE 1,999,500.00 0.00 0.00 1,999,500.00 666,500.00 0.49%
School Buildings 0.00 0.00 0.00 0.00 0.00 0.00%
Totals 143,937,909.89 132,921,311.76 133,086,819.99 409,946,041.64 136,648,680.55 100.00%

 Allowances under Personal Services (PS)

The average PS of P100,893,839.27 is 73.83 percent of the P136,648,680.55

average total obligations for the three-year period 2011 to 2013. For CY 2013,
the total obligation amounted to P101,956,860.46 of which, P97,655,510.20 were
recorded as expenses for the following:

Table 24
Amount
Particulars Obligated

Salaries and Wages- Casual and other related personnel benefits:

 Casual non-teaching personnel 25,494,419.06
 Casual teaching personnel 5,649.432.55
 Financial Assistance to public school teachers 8,710,900.00
Sub-total 39,854,751.61
Paid to School Administrators, Teachers and Non-Teaching DepEd Personnel and
Casual Teachers:
 Other Bonuses and Allowances (Code 719) 54,361,332.59
 Longevity Pay (Code 722) 2,929,376.00
 Hazard Pay 510,050.00
Sub-total 57,800,758.59
Grand Total 97,655,510.20

Additional allowances are authorized to be granted pursuant to Section 458

(a.1.xi) of R.A. 7160 which provides that, “when the finances of the city
government allow, provide for additional allowances and other benefits to …,
public elementary and high school teachers, … stationed in or assigned to the
city;” This provision was supported by the issuance of DECS-DBM-DILG Joint
Circular No. 01, which specifically mentioned the allowances to be granted with
the cut-off date of December 1997. Any additional allowances that may be

70
 granted after the cut-off date shall be charged against the General Fund of the
City.

Table 26 shows that in CY 2013, other bonuses and allowances totalling

P54,361,332.59 were paid and charged against the SEF. These were granted after
the cut-off of December 1997 as provided in the afore-mentioned Joint Circular,
thus, not allowed.

 Financial Assistance charged to SEF and recorded under Salaries and

Wages-Casual account

Further verification also disclosed that in CY 2013, the SEF was utilized in the
grant/payment of financial assistance totaling P8,710,900.00 (Table 27) to public
school teachers, contrary to Section 4 of the same Joint Circular, which is not
allowed. Moreover, the grant was inappropriately recorded in the books of
accounts as “Salaries and Wages-Casual”.

Table 25
Date Particulars Reference Amount
JEV-2013-12-000871/
Payment of Salaries and Wages thru Bank
RD-077-2013/
Dec. 26, 2013 – Mkna. Public School Teachers -
OBr No. 0042013-12-
Financial Assistance CY 2013 1,925,000.00
000320
JEV-2013-12-000839
To transfer of fund from PVB SEF Fund Ck#006117
to LBP General Fund for payment of OBr No. 0042013-12-
Dec. 27, 2013
Financial Assistance CY 2013 of Mkna. 000319
Public School Teachers DV No. 200-1312- 6,446,000.00
000235
Liquidation of Cash Advance- Financial JEV-2013-12-000850
Dec. 27, 2013 Assistance CY 2013 of Marikina Public OBr No. 0042013-12-
School Teachers 000321 339,900.00
Total 8,710,900.00

 Inappropriate funding and payment of Research and Evaluation Allowances

(REA) from SEF

On February 17, 2010, the City Council issued Ordinance No. 021 which
authorized the grant of monthly REA of P2,000.00 to all public elementary and
secondary school teachers and other DepEd officials assigned in the City.
Subsequently on December 4, 2013, the City Council issued Ordinance No. 35,
which expanded the covered officials and increased the amounts of the
allowance, with information presented in Table 26.

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 Table 26
Ordinance No.
Position 021 35
(From) (To)

Superintendent P2,000.00 P9,000.00

Assistant Superintendent 2,000.00 7,500.00
Division/District Supervisors 2,000.00 6,000.00
Div. Coordinators 0.00 6,000.00
Principal/School Heads/OIC 2,000.00 6,000.00
Dept./Unit Heads 0.00 6,000.00
Teachers 2,000.00 2,000.00
Non-Teaching Personnel 0.00 2,000.00

As presented in the above table, the non-teaching personnel were authorized to

be granted with the allowance. Under Section 458 (a.1.xi) of RA 7160, non-
teaching personnel are not entitled to additional allowances.

In both Ordinances, the City Council allowed the charging of the allowances to
SEF, which is not in accordance with DECS-DBM-DILG Joint Circular No. 01
dated April 14, 1998.

Moreover, in the audit of the paid payrolls for the monthly REA, we noted that
the amounts paid for the period January to October 2013 exceeded the rates
authorized under City Ordinance No. 21 series of 2010 by a total of
P17,218,276.46.

 Lack of Legal Basis for Longevity Pay and Hazard Pay charged against SEF

The amount charged against the SEF for longevity pay and hazard pay totaled
P2,929,376.00 and P510,050.00, respectively, in CY 2013. Management was not
able to present the legal basis for the charging thereof to the said fund.

We have recommended that the Local School Board and concerned City Officials:

a. Refrain from utilizing the SEF for purposes other than those enumerated in
Sections 272 and 100.c of R.A 7160 and Section 4 of DECS, DBM and DILG
Joint Circular No. 01;

b. Stop the inappropriate charging of allowances and other benefits against the SEF.
Seek authority from the City Council for the payment of salaries and wages,
REA, longevity pay, hazard pay, and other personnel related benefits to be
charged against the General Fund, subject to the availability of funds for the
purpose and the ceiling limitation on Personal Services;

c. Submit authority for charging longevity pay, hazard pay and financial assistance
against the SEF; and

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d. Cause the restoration of the amounts inappropriately charged against the SEF
from the General Fund.

Management commented that:

a. The allocation of the SEF budget drastically changed when an ordinance granting
50% discount on real estate taxes was enacted in 2009 due to the ravages brought
by Typhoon Ondoy.

b. For the inappropriate utilization of the SEF budget:

 The research and evaluation allowance was authorized under City Ordinance
No. 35;
 Salaries and wages and other personnel services such as clerks, guards,
librarians and drivers are included in the operational and maintenance of
school and that their presence is indispensable in the daily operations;
 The grant of financial assistance was authorized by the City School Board
under Resolution No. 4 dated December 18, 2013.

By way of a rejoinder, the contention that the authority for the grant of the allowance
emanates from the City Ordinance does not hold since the Ordinance is not absolute
and not superior over what the law provides.

In addition, financial assistance is not among the allowable charges against the SEF,
pursuant to Section 272 and 100.c of the same law and Section 4 of the DECS, DBM
and DILG Joint Circular No. 01. It is not enough that the grant of assistance or
allowance is covered by School Board Resolutions or City Ordinances for that
matter. Such resolutions or ordinances must still be harmonized with the law,
government rules and regulations.

If the Local School Board will not be able to present a legal basis for the grant of
longevity and hazard pays, the same will be disallowed in audit.

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C. Major Accomplishments versus Targets

The City’s most notable accomplishments for CY 2013 totaled P161,505,601.00. These
are composed mainly of construction/improvements of roads and acquisition of disaster
preparedness and rescue equipment broken down as follows:

Amount per
Accomplished
Projects/Activities Budget Accomplishment
Targets
Report

Roads, Highways and Bridges

Road Concreting
3/4/2013-
Eden St. New Market Subd., Sto. Niño 5/23/13 3,250,000.00 3,361,939.00
Desseret St. New Market Subd., Sto. 3/4/2013-
Niño 5/20/13 3,200,000.00 3,079,890.00
3/4/2013-
Manti St. New Market Subd., Sto. Niño 5/25/13 3,900,000.00 3,704,915.00
Concreting of Alley at Princess Caroline 8/30/2013-
HOA 9/30/2013 251,561.67 251,562.00

Road and Roadside Improvement

2/18/2013-
Jasmin St., San Isidro, Con. Uno 7/2/2013 7,318,314.90 7,529,627.00
2/28/2013-
Rosal St., San Isidro, Con. Uno 5/25/13 1,531,028.69 1,525,659.00
2/28/2013-
Camia St., San Isidro, Con. Uno 5/25/13 1,711,898.96 1,719,236.00
2/28/2013-
Santan St., San Isidro, Con. Uno 5/28/13 1,991,815.88 1,987,362.00
Freedom Park Road, Sta. Elena 4,500,000.00
Victory Hills Subd., Pricess St., Brgy.
Fortune 389,684.26
Sub-total 28,044,304.36 23,160,190.00

Roadside/Sidewalk Improvement
Roadside Improvement
Austin St., Jesus dela Peña 1,999,940.00
Riverside Drive-Austin to St. Mary 1,362,840.00
3/4/2013-
St. Anne St., Provident Village, Tañong 7/22/2013 2,400,000.00 2,366,454.00
1st Ave., Goodrich Villa., Concepcion 2/28/13-
Uno 5/31/2013 1,416,131.96 1,416,132.00
Sidewalk Improvement
Mansanas St., Marikina Heights 1,756,711.43
Mansinitas St., Marikina Heights 877,282.12

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 Amount per
Accomplished
Projects/Activities Budget Accomplishment
Targets
Report
2/28/13-
Senegal St., Greenheights Subd., Nangka 8/15/2013 1,196,293.80 5,544,568.00
3/4/13-
Rome St., Greenland Phase 6/11/2013 2,864,001.21 3,799,482.00
St. Paul/St. Lazarus/St. Michael, Tierra 3/4/2013-
Vista 5/7/2013 1,746,932.68 2,073,663.00
2/28/13-
Buenmar St., Greenland Phase I, Nanka 8/15/2013 5,975,000.00 5,363,037.00
St. Claire II Subd., Concepcion Uno 1,060,312.45
Tantiana St., Simeona Vill., Concepcion 3/4/2013-
Uno 5/21/2013 2,757,815.22 2,227,471.00
Givenchy St., Simeona Vill., Concepcion 3/4/2013-
Uno 5/21/2013 2,843,136.11 2,834,648.00
Drainage Outfall-Katipunan to
Concepcion Creek, Con. Uno 16,000,000.00
Milky Way, Fortune 754,585.32
Uranus, Fortune 423,303.96
Sub-total 45,434,286.26 25,625,455.00

Structures
Construction of Trade Center Building
@ Sta. Elena (Tambakay Lim) 16,000,000.00
Construction of Multipurpose Hall @ 7/15/2013-
Ruby St., Malanday 11/29/13 1,262,658.62 1,269,956.00
Sub-total 17,262,658.62 1,269,956.00

Purchase of tools and equipment for disaster preparedness

One unit Dredging Machine 12/2013 45,000,000.00 45,000,000.00
One unit Crawler Type Excavation
Backhoe 12/2013 10,700,000.00 10,700,000.00
One unit Wheeler Dump Truck 7/2013 7,200,000.00 7,200,000.00
Aerial Basket 7/2013 12,000,000.00 12,000,000.00
Generator Set 7/2013 3,800,000.00 3,800,000.00
200 units Handheld Radio 6/2013 1,600,000.00 1,600,000.00
Test Messaging Alert System 6/2013 10,000,000.00 10,000,000.00
One unit Medical Oxygen Refilling
Machine 12/2013 550,000.00 550,000.00
One lot Basic Fire Rescue Equipment 7/2013 1,500,000.00 1,500,000.00
One set branded Hydraulic Shoring set 6/2013 2,600,000.00 2,600,000.00
One unit brand new Tender Truck 6/2013 12,500,000.00 12,500,000.00
Two units Ambulance w/ complete
accessories 7/2013 3,000,000.00 3,000,000.00
Medicines and Medical Supplies 12/2013 1,000,000.00 1,000,000.00

75
 Amount per
Accomplished
Projects/Activities Budget Accomplishment
Targets
Report
Sub-total 111,450,000.00 111,450,000.00
Total 202,191,249.24 161,505,601.00

D. Status of Suspensions, Disallowances and Charges

The 2009 Rules and Regulations on the Settlement of Accounts in its Chapter IV, Section
17, Period to Appeal, provides that:

“17.1 Any person aggrieved by a disallowance or charge may within six

(6) months from receipt of the notice, appeal in writing as prescribed
in these Rules. A disallowance or charge not appealed within the
period prescribed shall become final and executory.
…”

As reported in the Statement of Audit Suspensions, Disallowances and Charges

(SASDC) for the period ending December 2013, the total disallowances of P826,527.91
pertains to payment for overtime services rendered by officials whose equivalent rank is
higher than a chief of division. The corresponding Notices of Disallowances were
received on various dates in September 2013 by the persons liable.

Pursuant to the cited Rules and Regulations, the persons liable filed their Appeal dated
February 18, 2014 on February 25, 2014 to the Office of the Director, Local Government
Sector, National Capital Region, Commission on Audit, on February 25, 2014.

76