Republic of the Philippines COMMISSION ON AUDIT

Commonwealth Avenue, Quezon City

ANNUAL AUDIT REPORT ON THE

MUNICIPALITY OF BONGAO
Province of Tawi-Tawi

For the Year Endedthe Philippines December 31, 2008 Republic of

COMMISSION ON AUDIT
Autonomous Region in Muslim Mindanao OFFICE OF THE REGIONAL DIRECTOR
ARMM Compound, Cotabato City Tel. # 421-7738 loc 134 Fax # 421-1233 E-mail: coa-armm@info.com.ph

May 13, 2009 HON. ALBERT T. QUE Municipal Mayor Municipality of Bongao Dear Mayor Que: Pursuant to Section 43 of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the Philippines, we are pleased to transmit the Annual Audit Report on the accounts and operations of the Municipality of Bongao for the Calendar Year ended December 31, 2008. The audit findings together with the corresponding recommendations are discussed in detail in the report. We request that the recommendations be immediately implemented and we will appreciate being informed of the action/s taken thereon within one (1) month from receipt hereof. We acknowledge the cooperation extended to our Auditor by the Honorable Mayor and his Staff. Very truly yours, y of the Chairman: KHEM N. INOK Director IV Regional Director

Copy Furnished: 1. The President Thru: The Regional Secretary Department of Interior and Local Government Autonomous Region in Muslim Mindanao ORC Compound, Cotabato City 2. The Regional Director Bureau of Local Govt. Finance Regional Office No. IX Zamboanga City 3. The Regional Director Department of Budget and Management Regional Office No. IX Zamboanga City The Honorable Governor Province of Tawi-Tawi The Presiding Officer and Sangguniang Bayan Members Thru: The SB Secretary Municipality of Bongao Province of Tawi-Tawi File The Regional Director Commission on Audit Autonomous Region in Muslim Mindanao Cotabato City File The Acting Supervising Auditor Provinces of Tawi-Tawi & Basilan COA-ARMM File Audit Team Leader

4. 5.

6.

7.

8.

COMMISSION ON AUDIT
Autonomous Region in Muslim Mindanao OFFICE OF THE SUPERVISING AUDITOR May 11, 2009
ARMM Compound, Cotabato City Tel. # 421-7738 loc 134 Fax # 421-1233 E-mail: coa-armm@info.com.ph

Republic of the Philippines

ATTY. KHEM N. INOK Regional Director Commission on Audit Autonomous Region in Muslim Mindanao Cotabato City Sir: In compliance with Section 2, Article IX-D of the Philippine Constitution and pertinent sections of Presidential Decree No. 1445, we conducted a Financial and Compliance Audit on the accounts and operations of the Bongao Municipal Government, Tawi-Tawi, for the year ended December 31, 2008. The Audit was conducted to ascertain the propriety of financial transactions and compliance of the agency to prescribed rules and regulations. It was also made to ascertain the accuracy of financial records and reports, as well as the fairness of the presentation of the financial statements. Our report consists of four parts: Part I Audited Financial Statements, Part II Detailed Findings and Recommendations, Part III Status of Implementation of Prior Years Recommendations, and Part IV Annexes, which were all discussed with concerned management officials and staff. We rendered a qualified opinion on the fairness of presentation of financial statements, as of December 31, 2008, for reasons as stated in the audit certificate. Our audit was conducted in accordance with generally accepted state auditing standards and we believe that it provides reasonable bases for the results of audit. Very truly yours, NONA A. IMLAN State Auditor V Acting Supervising Auditor

Republic of the Philippines Autonomous Region in Muslim Mindanao COMMISSION ON AUDIT Autonomous Region in Muslim Mindanao Province of Tawi-Tawi

OFFICE OF THE TEAM LEADER

Municipality of Bongao

April 21, 2009 NONA A. IMLAN State Auditor V/Supervising Auditor Provinces of Tawi-Tawi and Basilan Commission on Audit - ARMM ARMM Complex, Cotabato City Madam: In compliance with Section 2, Article IX-D of the Philippines Constitution and pertinent sections of Presidential Decree No. 1445, we conducted a financial and compliance audit on the accounts and operations of the Municipal Government of Bongao, Tawi-Tawi for the year ended December 31, 2008. The audit was conducted to ascertain the propriety of financial transactions and compliance of the agency with prescribed rules and regulations. It was also made to ascertain the accuracy of the financial records and reports, as well as the fairness of the presentation of the financial statements. Our report consists of four parts: Part I Audited Financial Statements, Part II Detailed Findings and Recommendations, Part III Status of Implementation of Prior Years Recommendations, and Part IV Annexes, which were all discussed with concerned management officials during the exit conference held on April 20, 2009. There is reasonable assurance that the financial statements are free of material misstatement/s and were prepared in accordance with applicable laws, rules and regulations and in conformity with generally accepted state accounting principles. However, we emphasize that the LGU failed to conduct physical inventory of its property, plant and equipment with book value of P 131,941,783.14 and did not provide depreciation on its depreciable PPEs totaling P 28,417,040.35. Our Audit was conducted in accordance with generally accepted state auditing standards and we believe that it provides reasonable basis for the results of the audit. Very truly yours,

MAUREEN D. AMIL State Auditor III

Audit Team Leader

EXECUTIVE SUMMARY INTRODUCTION The Municipality of Bongao created on July 01, 1959 by virtue of Executive Order No. 355. It is a 3rd class municipality consisting of 35 barangays. The Municipality is under the administrative supervision of the Autonomous Region in Muslim Mindanao (ARMM) since November 19, 1989, pursuant to Republic Act No. 6734 enacted on June 08, 1989, otherwise known as The Organic Act of ARMM. Like any other local government unit, the Municipality enjoys total independence in managing, deciding and planning its own administrative, fiscal and development affairs in conformity with the National Governments thrust for sustainable social and economic growth. As provided by Muslim Mindanao Act No. 25, the Municipality serves as the dynamic mechanism for developmental processes and effective governance of the inhabitants within its territorial jurisdiction. In the pursuit of attaining its state purposes, it exercises power to generate and apply resources, power of eminent domain, corporate powers and authority to negotiate and secure grants. HIGHLIGHTS OF OPERATIONS For the year, the Municipality approved a budget of P 87,187,506.38 out of the estimated funds available for appropriation of P 87,846,354.00. The budgetary projection from LGU share on Internal Revenue Allotment (IRA) is P 81,264,928.00. The total income realized during the year is P 84,887,441.55 and the total expenditures incurred is P 85,850,641.49 with a deficit of P 963,199.94. The actual IRA received is P 80,975,371.00 and the reported collection from local sources is P 3,912,070.55. SCOPE OF AUDIT A financial and compliance audit was conducted on the accounts and operations of the Municipality for Calendar Year 2008, using applicable provisions of the National Government Accounting System Manual (NGAS), the Local Government Code of 1991 (R.A. No. 7160), PD 1445, and such other laws, rules and regulations. The audit consisted of review of operating procedures, reconciliation, interview with accountable

and other concerned officials, issuance of demand and letter requests, and other alternative procedures deemed necessary.

AUDIT OPINION ON THE FINANCIAL STATEMENTS The Auditor rendered a qualified opinion on the fairness of presentation of the financial statements due to the possible effects of adjustments that might have been made had the LGU conducted a physical inventory of its Property, Plant and Equipment with book value of P 31,941,783.14 and had it provided depreciation on its depreciable PPEs totaling P 28,417,040.35. SIGNIFICANT FINDINGS AND RECOMMENDATIONS A. Financial and Compliance Audit 1. The validity, existence and correctness of the Property, Plant and Equipment accounts totaling P 31,941,783.14 could not be ascertained due to the failure of the LGU to conduct a physical inventory in Calendar Year 2008, as required under Section 124, Volume I of the NGAS Manual, thus affecting the fair presentation of the accounts in the financial statements. We reiterate our recommendation for the LGU to conduct periodic physical inventory of its property, plant and equipment. Items that are beyond economic repair shall be properly disposed and dropped from the books. 2. Depreciable property, plant and equipment amounting to P 28,417,040.35 were not depreciated due to the absence of property subsidiary ledgers and other records as basis for the computation of the depreciation, contrary to Section 4, paragraph (o), Volume I of the NGAS Manual, thus affecting the fair presentation of the Property, Plant and Equipment and expense accounts. The LGU should exert effort to secure the documents necessary to reconstruct the PPE accounts so that depreciation for the current and previous years maybe computed to arrive at the correct valuation of the property, plant and equipment. In case the necessary data could no longer be secured after exhausting all possible means, we recommend that appraisal of the PPEs be considered in order to establish the correct book values. 3. Copies of Purchase Orders (POs)/Contracts and Acceptance and Inspection Reports (AIR) covering the procurement of supplies, materials and equipment were not submitted to the Auditors Office on time for the conduct of evaluation and inspection of items purchased, contrary to Section A (1-2) of COA Circular No. 96-010 dated August 15, 1996 and Section 118 of the NGAS Manual, Volume I, respectively. We recommend that copies of Purchase Orders/Contracts and Acceptance and Inspection Reports be submitted to the Auditors Office as required under Section A

(1-2) of COA Circular No. 96-010 and Section 118 of the NGAS Manual, Volume I. 4. Bank Reconciliation Statements (BRS) on all funds as of December 31, 2008, were not prepared by the Municipal Accountant, thus casting doubt on the validity and reliability of the Cash in Bank, Local Currency Current Accounts in the total amount of P P 9,134,310.31. Direct the Municipal Accountant to prepare the monthly bank reconciliation statement and submit the same to the Office of the Auditor promptly and regularly. 5. The Budget Officer did not maintain Registries of Appropriation, Allotment and Obligation for Capital Outlay, Maintenance and Other Operating Expenses, Personal Services and Financial expenses, thus the Status of Appropriation, Allotment and Obligation (SAAOb) as of a given date for the year 2008 cannot be readily prepared. The Budget Officer should maintain the Registries of Appropriation, Allotment and Obligation for each class of expenditure as prescribed to ensure the preparation of the SAAOb as of a given date anytime and establish a strong internal control on obligation of expenses. B. Value for Money Audit 6. Evaluation on the utilization of P 16,195,074.00 for the implementation of various programs and activities from January to December 2008 under the 20% Development Fund could not be ascertained due to the absence of accomplishment reports. The officials exercising fiscal responsibility over the transactions pertaining to 20% Development Fund should observe efficiency in planning and monitoring the proper implementation of programs, projects and activities of the LGU funded out this Fund. STATUS OF IMPLEMENTATION RECOMMENDATIONS OF PRIOR YEARS AUDIT

Of the nine (9) audit recommendations contained in the CY 2007 Annual Audit Report, two (2) were implemented, one (1) was partially implemented and six (6) remain not acted. Two (2) of these are reiterated in the current report as they affected the fair presentation of the financial statements.

TABLE OF CONTENTS

PART

PARTICULARS AUDITED FINANCIAL STATEMENTS Audit Certificate Statement of Management Responsibility Consolidated Balance Sheet Consolidated Statement of Income & Expenses Consolidated Statement of Cash Flows Notes to Financial Statements FINDINGS AND RECOMMENDATIONS Detailed Findings and Recommendations Value for Money Audit STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT RECOMMENDATIONS ANNEXES A - Consolidated Balance Sheet, by Fund B - Consolidated Statement of Income and Expenses, by Fund C - Consolidated Statement of Cash Flows, By Fund D - Statement of Appropriations, Allotments, and Balances E - Schedule of Property, Plant and Equipment F - Schedule of PPE without Depreciation

PAGE 2 3 4 5 6 7 11

II III

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26 27 28 29 32 33

IV

PART I AUDITED FINANCIAL STATEMENTS

Republic of the Philippines COMMISSION ON AUDIT Autonomous Region in Muslim Mindanao OFFICE OF THE SUPERVISING AUDITOR Provinces of Tawi-Tawi & Basilan ARMM Complex, Cotabato City Tel Nos. 421 1233

AUDIT CERTIFICATE The Honorable Mayor Municipality of Bongao Province of Tawi-Tawi

We have audited the accompanying Balance Sheet of the Municipal Government of Bongao as of December 31, 2008 and the related Statements of Income and Expense and Cash Flows for the year then ended. These financial statements are the responsibility of the management of the Municipal Government of Bongao. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws and generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement/s. Our audit included examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. It also included assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. However, as presented in our comments and observations, the LGU failed to conduct a physical inventory of its property, plant and equipment as of year-end valued in the books at P 31,941,783.14. It also did not provide depreciation on its depreciable assets costing P 28,417,040.35. The inadequacy of its records did not permit us to apply adequate alternative procedures to determine the validity and the propriety of the property, plant and equipment account. In our opinion, except for the effect of any adjustments which might have been made had the LGU conducted a physical count of its property, plant and equipment as of December 31, 2008, and had it provided depreciation on all its depreciable assets, or had the record allowed us to apply alternative procedures, the financial statements referred to above present fairly, in all material respect, the financial position of the Municipal Government of Bongao as of December 31, 2008, and the results of its operation for the year then ended, in accordance with applicable laws, rules and regulations and in conformity with generally accepted state accounting principles. COMMISSION ON AUDIT By: NONA A. IMLAN State Auditor V Supervising Auditor February 14, 2009

MUNICIPAL GOVERNMENT OF BONGAO CONSOLIDATED BALANCE SHEET As of December 31, 2008 (With Comparative Figures for CY 2007) 2008 ASSETS Current Assets Cash (Note 5) Receivables (Note 6) Inventories (Note 7) Total Current Assets Property, Plant and Equipment (net of depreciation) Land and Land Improvements Buildings Office Equipment, Furniture and Fixtures Machinery and Equipment Transportation Equipment Other Property, Plant and Equipment Construction in Progress Total Property, Plant and Equipment (Note 8) Other Assets TOTAL ASSETS LIABILITIES AND EQUITY LIABILITIESCurrent Liabilities (Note 10) Deferred Credits Total Liabilities EQUITY Government Equity (Note 11) 30,237,161.78 27,989,697.8 4 12,317,926.02 12,317,926.02 4,422,496.68 0.00 4,422,496.68 9,134,310.31 582,404.09 47,334.02 9,764,048.42 3,588,892.12 429,593.35 47,334.02 4,065,819.49 2007

6,137,339.82 18,841,756.90 4,267,906.88 1,382,882.67 685,796.87 26,100.00 600,000.00 31,941,783.14 849,256.24 42,555,087.80

6,137,339.82 14,279,278.0 9 4,101,104.07 1,865,827.97 888,740.76 34,800.00 190,028.08 27,497,118.7 9 849,256.24 32,412,194.5 2

TOTAL LIABILITIES & EQUITY

42,555,087.80

32,412,194.5 2

(See accompanying Notes to Financial Statements) MUNICIPAL GOVERNMENT OF BONGAO CONSOLIDATED STATEMENT OF INCOME AND EXPENSE For the Year ended December 31, 2008 (With Comparative Figures for CY 2007) 2008 Income Local Taxes Permit and Licenses Service Income Business Income Other General Income TOTAL INCOME N Less: Expenses Personal Services Maintenance and Other Operating Expenses Financial Expenses TOTAL EXPENSES Operating Income Add: Subsidies from Other NGAs Total Less: Subsidies to LGUs Subsidies to LGUs Total NET INCOME 1,455,497.55 128,908.71 546,892.00 1,729,319.00 81,026,824.29 84,887,441.55 2007 1,232,504.50 291,233.95 335,444.00 1,217,528.00 58,859,590.47 61,936,300.92

24,481,277.83 55,869,804.39 7,077.00 80,358,159.22 4,529,282.33 0.00 4,529,282.33 0.00 5,492,482.27 5,492,482.27 (963,199.94)

22,744,528.68 34,921,655.33 91.39 57,666,275.40 4,270,025.52 0.00 4,270,025.52 0.00 5,879,860.63 5,879,860.63 (1,609,835.11 )

MUNICIPAL GOVERNMENT OF BONGAO CONSOLIDATED STATEMENT OF CASH FLOW For the Year Ended December 31, 2008 (With Comparative Figures for CY 2007) 2008 Cash Flow from Operating Activities: Cash Inflows: Collection from taxpayers Share from Internal Revenue Collections Receipts from Sale of goods or services Other Receipts Total Cash Inflow Cash Outflows: PaymentsTo Suppliers/Creditors To employees Other Expense Total Cash Outflow Net Cash from Operating Activities Cash Flows from Investing Activities: Cash Inflows From Sale of Property, Plant & Equipment Cash Outflows To Purchase Property, Plant & Equipment Net Cash from Investing Activities Cash Flows from Financing Activities Cash Inflows 2007

1,455,497.55 80,975,371.00 2,405,119.71 7,397,840.09 92,233,828.35

2,240,451.55 53,450,826.0 0 2,136,872.50 9,326,169.74 67,154,319.7 9 44,568,691.9 6 22,744,528.6 8 169,377.87 67,482,598.5 1 (328,278.72)

49,917,667.01 31,491,529.64 428,755.70 81,837,952.35 10,395,876.00

0.00 4,850,457.81 (4,850,457.81 )

0.00 51,000.00 (51,000.00)

From Acquisition of Loan Cash Outflows Payment of Loan Amortization Net Cash from Financing Activities Net Increase in Cash Cash at Beginning of the Period Cash at the End of the Period

0.00 0.00 0.00 5,545,418.19 3,588,892.12 9,134,310.31

0.00 0.00 0.00 (379,278.72) 3,968,170.84 3,588,892.12

NOTES TO FINANCIAL STATEMENT Note 1 General/Agency Profile The Municipality of Bongao was created on July 01, 1959 by virtue of Executive Order No. 355. It is a third (3rd) class municipality, consisting of 35 Barangays. It is the premier commercial center of the Province of Tawi-Tawi and the seat of the Provincial Government. The Municipality is under the administrative supervision of the Autonomous Region in Muslim Mindanao (ARMM) since November 19, 1989, pursuant to Republic Act No. 6734 enacted on June 08, 1989, otherwise known as the Organic Act of ARMM. Note 2 Basis of Financial Statements Presentation The financial statements have been prepared in accordance with the Generally Accepted State Accounting Principles and Standards. Note 3. Summary of Significant Accounting Policies: 3.1 The LGU uses a modified accrual basis of accounting. Expenses are recognized when incurred and reported in the financial statements in the period to which they relate. Income is on accrual basis except for transactions where accrual basis is impractical or when other methods may be required by law. Real property taxes are accounted following the modified accrual method of accounting and the cash basis of accounting is used for all other taxes, fees, charges and other revenues.

3.2 Petty Cash Fund (PCF) account is maintained under the Imprest System. All replenishments are directly charged to the expense account. The PCF is not used to purchase regular inventory items for stock. 3.3 Property, Plant and Equipment are carried at historical cost. Properties of the government, which are used by the general public, are dropped from Property, Plant & Equipment account and recorded in the Registry of Public Infrastructure/Reforestation Projects. 3.4 The straight-line method of depreciation is followed. Public Infrastructure/Reforestation Project not used in operation are not subject to depreciation. Depreciation is not likewise charged to Infrastructure projects under construction.

3.5 For assets under construction, all related expenses incurred during the construction of the project are capitalized and those incurred after the construction are charged against the operating cost. 3.6 Payable accounts are recognized and recorded in the books of accounts only upon acceptance of the goods, inventory or assets and rendition of services to the local government unit. 3.7 Financial expenses such as bank charges and interest on loans are separately classified from MOOE. Note 4. Correction of fundamental errors Fundamental errors of prior years are corrected by using the Prior Years Adjustments account. Errors affecting current years operation are charged to the current years accounts. Note 5. Cash This account is broken down as follows:
Account Name Cash in Vault Cash-Disbursing Officer Petty Cash Fund Cash in Bank LCCA Total Balance Dec. 31, 2007 966,730.34 178,268.00 5,000.00 2,438,893.78 P 3,588,892.12 Addition/ (Reduction) (966,730.34) (178,268.00) 0.00 6,690,416.53 5,545,418.19 Balance Dec. 31, 2008 0.00 0.00 5,000.00 9,129,310.31 P 9,134,310.31

Note 6. Receivables This account is broken down as follows:

Account Name Accounts Receivable Due from Officers and employees Due from GOCC Due from LGUs Due from Other Funds Other Receivables Total Balance Dec. 31, 2007 60,000.00 13,729.11 100.00 209,404.12 0.00 146,360.12 P 429,593.35 Addition/ (Reduction) (60,000.00) 0.00 (100.00) (209,404.12) 422,314.86 0.00 P 152,810.74 Balance Dec. 31, 2008 0.00 13,729.11 0.00 0.00 422,314.86 146,360.12 P 582,404.09

Note 7. Inventories The total inventories of P 47,334.02 pertain to account 156 Accountable Forms Inventory. Note 8. Property, Plant and Equipment This account consists of :
PARTICULARS Land Land Improvements Office Buildings Market & Slaughterhouse Other Structures Office Equipment Furniture and Fixtures IT Equipment and Software Const.& Heavy Equipment Motor Vehicles Other Transportation Equipment Other Property, Plant & Equipment Construction in Progress Total Accumulated Depreciation Net Amount Balance Dec. 31, 2007 P 300,000.00 5,837,339.82 5,762,163.28 8,082,114.81 435,000.00 156,179.26 3,851,416.38 587,774.80 3,164,338.50 711,000.00 844,438.36 87,000.00 190,028.08 P30,008,793.29 2,511,674.50 P27,497,118.79 Addition/ Balance (Reduction) Dec. 31, 2008 P 0.00 P 300,000.00 0.00 1,985,364.00 0.00 2,577,114.81 135,740.00 86,995.00 65,244.00 0.00 0.00 0.00 0.00 409,971.92 5,260,429.73 815,765.38 P 3,327,439.88 87,000.00 600,000.00 P35,269,223.02 3,327,439.88 P31,941,783.14 5,837,339.82 7,747,527.28 8,082,114.81 3,012,114.81 291,919.26 3,938,411.38 653,018.80 3,164,338.50 711,000.00 844,438.36

Note 9. Depreciation The LGU failed to provide the depreciation on its Property, Plant and Equipment with total acquisition cost of P 28,417,040.35 due to the absence of pertinent documents to support the computation.

Note 10. Current Liabilities 10

This account is broken down as follows:

PARTICULARS Due to Officers and Employees Due to BIR Due to GSIS Due to Pag-IBIG Due to PHILHEALTH Due to NGAs Due to LGUs Due to Other Funds Guarantee Deposits Payable Performance/Bidders/Bail Bonds Payable Other Payable Total P Balance Dec. 31, 2007 P 28,758.93 1,796.22 23,348.20 21,475.61 3,525.00 2,958,206.95 409,259.23 209,404.12 284,754.00 104,801.50 377,166.92 4,422,496.68 Addition/ Balance (Reduction) Dec. 31, 2008 0.00 P 28,758.93 9,808.40 (947.13) (180.68) 0.00 7,234,446.34 294,576.77 212,910.74 0.00 145,000.00 (185.10) 7,895,429.34 P 11,604.62 22,401.07 21,294.93 3,525.00 10,192,653.29 703,836.00 422,314.86 284,754.00 249,801.50 376,981.82 12,317,926.02

Note 11. Government Equity This account is broken down as follows:

PARTICULARS Balance, Beginning Add: Transfer of completed projects - General Fund Prior Years Adjustment AMOUNT P P 3,190,793.88 19,870.00 ------------------27,989,697.84

3,210,663.88 P 31,200,361.72

Total Add/(Less): Retained Operating Surplus Current Operations (Net Income per Statement of Income and Expense) Balance, End

(963,199.94) P 30,237,161.78

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PART II FINDINGS AND RECOMMENDATIONS

Detailed Findings and Recommendations

12

A. Financial and Compliance

1. The validity, existence and correctness of the Property, Plant and Equipment accounts totaling P 31,941,783.14 could not be ascertained due to the failure of the LGU to conduct a physical inventory in Calendar Year 2007, as required under Section 124, Volume I of the NGAS Manual, thus affecting the fair presentation of the accounts in the financial statements. As of year-end, the LGU failed to conduct a physical inventory of its property, plant and equipment valued at P 31,941,783.14 (Annex A). It also failed to prepare a periodic Report on the Physical Count of Property, Plant and Equipment (RPCPPE). Subsidiary ledgers maintained are only on those PPEs acquired during the current administration. The failure of the LGU to conduct a physical inventory is a gross violation of Section 124, Volume I of the NGAS Manual which requires that physical count of property, plant and equipment shall be made annually and reported in the Report on the Physical Count of Property, Plant and Equipment (RPCPPE). The report shall be submitted to the Auditor not later than January 31 of each year. Similarly, Section 156 of COA Circular No. 92-386 dated October 20, 1992, requires the local chief executive (LCE) to create a committee to conduct an annual physical inventory of all supplies and property under his control. The committee shall be composed of the representative of the LCE, the treasurer and property or supply officer or accountable officer, as members. Due to the failure of the LGU to conduct physical inventory, the existence, condition and whereabouts of the fixed assets cannot be correctly ascertained and unserviceable property, if there is any, cannot be dropped from the books. Management Comment: The audit finding is well-taken. An inventory will be conducted not later than June 30, 2009. Recommendation: We reiterate our recommendation for the LGU to conduct periodic physical inventory of its property, plant and equipment. Items that are beyond economic repair shall be properly disposed and dropped from the books. 2. Depreciable property, plant and equipment amounting to P 28,417,040.35 were not depreciated due to the absence of property subsidiary ledgers and other records as

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basis for the computation of the depreciation contrary to Section 4, paragraph (o), Volume I of the NGAS Manual, thus affecting the fair presentation of the Property, Plant and Equipment and expense accounts. Section 4, paragraph (o), Volume I of the NGAS Manual provides that: Depreciation. The straight-line method shall be used. A residual value equivalent to ten percent (10 %) of the cost shall be set-up and depreciation shall start on the second month after purchase/completion of the property, plant and equipment (PPE). Public infrastructures shall not be charged any depreciation. We have noted in our audit that similar to Calendar Years 2005 to 2007, there was no provision for the depreciation of most of the depreciable property, plant and equipment of the LGU for the current year (Annex B). This is due to the absence of property subsidiary ledgers and other records/documents evidencing the acquisition of the PPEs, which could have served as basis in the computation of depreciation. The failure of the LGU to provide depreciation on depreciable PPEs resulted in the overstatement of the book value of the PPEs. Management Comment: Depreciation on PPEs purchased during the current administration can be provided. The Municipal Accountant will initiate the reconstruction of the PPE accounts. Recommendation: The LGU should exert effort to secure the documents necessary to reconstruct the PPE accounts so that depreciation for the current and previous years maybe computed to arrive at the correct valuation of the property, plant and equipment. In case the necessary data could no longer be secured after exhausting all possible means, we recommend that appraisal of the PPEs be considered in order to establish the correct book values. 3. Copies of Purchase Orders (POs)/Contracts and Acceptance and Inspection Reports (AIR) covering the procurement of supplies, materials and equipment were not submitted to the Auditors Office on time for the conduct of evaluation and inspection of items purchased, contrary to Section A (1-2) of COA Circular No. 96010 dated August 15, 1996 and Section 118 of the NGAS Manual, Volume I, respectively. Section A (1-2) of COA Circular No. 96-010 dated August 15, 1996 provides that:

14

1. A copy of any letter or purchase order, irrespective of amount, and all supporting documents thereto shall be submitted to the unit Auditor concerned within five (5) days from issuance. Xxx 2. The agency official responsible for accepting deliveries of procured items, shall, within twenty-four (24) hours from such acceptance, notify the Auditor of the time and date of the scheduled deliveries. In the case of partial delivery of any item in the P.O., the copy to be submitted shall indicate which items have been delivered, and which have not. Corollary thereto, Section 118 of the New Government Accounting System (NGAS) Manual, Volume I provides that: Deliveries of items purchased by the local government units shall be accepted first by the general services officer before inspection. Inspection of purchases shall be made by the authorized inspector/s for conformity with specification in the order. Acceptance and inspection shall be made using the Acceptance and Inspection Report (AIR). The furnishing of copies of Purchase Orders/Contracts, Acceptance and Inspection Reports, etc., will enable the Auditors Office to conduct timely evaluation of contracts/purchase orders and verification of the procured items. Weakness or deficiencies noted in the course of audit can be communicated immediately to management for appropriate remedial action. For CY 2008, copies of Purchase Orders were submitted to the Auditors Office after the prescribed period. Contracts and Acceptance and Inspection Reports were not furnished the Auditors Office. Management Comment: The LGU has no regular Supply Officer. In the meantime, the Municipal Treasurer will take charge of the submission of the Purchase Orders/Contracts, Acceptance and Inspection Reports to the Auditors Office. Recommendation: We recommend that copies of Purchase Orders/Contracts and Acceptance and Inspection Reports be submitted to the Auditors Office as required under Section A (1-2) of COA Circular No. 96-010 and Section 118 of the NGAS Manual, Volume I. 4. Bank Reconciliation Statements (BRS) on all funds as of December 31, 2008, were not prepared by the Municipal Accountant, thus casting doubt on the validity and

15

reliability of the Cash in Bank, Local Currency Current Accounts in the total amount of P 9,134,310.31. Based on the Balance Sheets as of December 31, 2008, the balances of the Cash in Bank-Local Currency Current Account are as follows: Fund General Fund Trust Fund SEF Total Amount 31,563.19 9,102,747.12 0.00 P 9,134,310.31 P

However, the accuracy and validity of the cash accounts cannot be ascertained as there were no Bank Reconciliation Statements prepared by the Municipal Accountant during the (12) months. The balances of the Cash in Bank-LCCA on all funds were derived from the unadjusted balance of the general ledgers. No adjustments were made to reconcile the amounts with the bank balances arising from outstanding checks, bank debit and credit memos, and other reconciling items. Consequently, the Cash in Bank-LCCA as of year-end may either be overstated or understated. Section 74 of PD 1445, States: At the close of each month, depositories shall report to the agency head, in such form as he may direct the condition of the agency account standing on their books. The head of the agency shall see to it that reconciliation is made between the balance shown in the reports and the balance found in the books of the agency. COA Circular 96-011 dated October 02, 1996 states: 3.2 The Local Accountants shall within ten (10) days from receipt of the Bank Statement reconcile the same (BS) with the General Ledger (GL) and prepare the BRS in five (5) copies, xxxx 3.3 The accountant shall draw journal vouchers to record all valid reconciling items that require adjustment and correction in the GL. 3.4 The duplicate and quadruplicate copies of the BRS including the paid checks, original copies of the debit/credit memos, shall be submitted to the auditor concerned for verification within ten (10) days from receipt after the end month. 3.5 The Auditor shall verify the duly certified BRS and supporting schedules within ten (10) days from receipt of the same.

16

3.6 The Auditor shall after verification, affix his signature on the BRS under the notation VERIFIED AND FOUND CORRECT and furnish the COA Director concerned the duly verified BRS on a monthly basis or where there is an urgent need for the same.xxx A bank reconciliation statement serves as a basis in determining the correct cash in bank balance of the LGU and prove the integrity of the cash balance in the books of accounts. Management Comment: The audit finding is well-taken. Recommendation: Direct the Municipal Accountant to prepare the monthly bank reconciliation statement and submit the same to the Office of the Auditor promptly and regularly. 5. The Budget Officer did not maintain Registries of Appropriation, Allotment and Obligation for Capital Outlay, Maintenance and Other Operating Expenses, Personal Services and Financial expenses, thus the Status of Appropriation, Allotment and Obligation (SAAOb) as of a given date for the year 2008 cannot be readily prepared. The approved appropriation for the year 2008 is P 87,187,506.38 broken down as follows: a. b. c. Personal Services MOOE Capital Outlay Total P 25,014,994.90 61,444,602.48 727,909.00 -------------------P 87,187,506.38 ============

Audit observation made on the Budget Office records disclosed that each class of expenditure mentioned above did not have the corresponding registry which is a violation of Section 18 of NGAS, Volume II which states: Registry of Appropriations, Allotments and Obligations (RAAO) The Registry of Appropriations, Allotments and Obligations is prepared for function/program/project, allotment class, current/continuing appropriations and fund. This record shall be maintained xxx to monitor appropriations, allotments received and the obligations incurred against said allotments. The balance is extracted every time an entry is made to prevent incurrence of obligations in excess of allotments received or approved appropriations.

17

Thus, the Statement of Appropriation, Allotment and Obligation (SAAO) cannot be prepared as of a given date. Aside from this, the control of said expenditures is weak and the unobligated balance cannot be determined thus charges for a particular object may result to overdraft. Section 2.2 of COA Circular No. 2006-02 dated January 31, 2006 provides that: The Head of the Budget Unit shall certify the existence of available appropriation, take charge of budgetary activities as provided under Section 344 and Section 475, respectively, of R.A. 7160, the Local Government Code, and shall maintain the Registries of Appropriations, Allotments and Obligations as prescribed under the Manual on the New Government Accounting System for Local Government Units. Management Comment: The audit finding is well taken. Recommendation: The Budget Officer should maintain the Registries of Appropriation, Allotment and Obligation for each class of expenditure as prescribed to ensure the preparation of the SAAOb as of a given date anytime and establish a strong internal control on obligation of expenses.

B. VALUE FOR MONEY AUDIT

6. Evaluation on the utilization of P 16,195,074.00 for the implementation of various programs and activities from January to December 2008 under the 20% Development Fund could not be ascertained due to the absence of accomplishment reports. Pursuant to Section 287 of RA 7160, otherwise known as the Local Government Code of 1991, each local government unit (LGU) is required to appropriate in the annual budget no less than twenty percent (20%) of its annual Internal Revenue Allotment (IRA) for development projects. While the Local Government Code empowers local authorities to manage their own internal affairs consistent with the notion of local autonomy, it should be emphasized that one of the primary concerns of the national government is to ensure that public funds, like the 20% Development Fund, shall be appropriated and judiciously disbursed only for the purpose or purposes for which such funds are intended. Our audit disclosed that, during the year, P 16,195,074.00 was disbursed out of the 20% Development Fund. The evaluation of ultimate end results in the 18

implementation of these programs could not be established. There is no factual basis to determine whether these programs had contributed to the development of the Municipal and the general welfare of its inhabitants due to the non-availability of pertinent documents and reports serving as success indicators such as: 1. Accomplishment report and progress report on the program implementation with tangible and quantifiable data to support the attainment of its objectives. 2. Monitoring reports on the accomplishment of activities related to the implementation of said programs/projects/activities. Management Comment: The Office of the Municipal Engineer is used to prepare an Annual Accomplishment Report. The Report for the year will be submitted to the Auditor within five (5) days. Recommendation: The officials exercising fiscal responsibility over the transactions pertaining to 20% Development Fund should observe efficiency in planning and monitoring the proper implementation of programs, projects and activities of the LGU funded out this Fund.

19

PART III STATUS OF PRIOR YEARS AUDIT RECOMMENDATIONS

20

Of the nine (9) audit recommendations contained in the CY 2007 Annual Audit Report, two (2) were implemented, one (1) was partially implemented and six (6) remain not acted. Two (2) of these are reiterated in the current report as they affected the fair presentation of the financial statements.
Audit Observation 1. The validity, existence and correctness of the Property, Plant and Equipment accounts totaling P 27,497,118.79 could not be ascertained due to the failure of the LGU to conduct physical inventory in Calendar Year 2007, as required under Section 124, Volume I of the NGAS Manual, thus affecting the fair presentation of the accounts in the financial statements. 2. Depreciable property, plant and equipment amounting to P 23,854,561.54 were not depreciated due to the absence of property subsidiary ledgers and other records as basis for the computation of the depreciation, contrary to Section 4, paragraph (o), Volume I of the NGAS Manual, thus affecting the fair presentation of the Property, Plant and Equipment and expense accounts. Recommendation We reiterate our recommendation for the LGU to conduct periodic physical inventory of its PPEs. Items that are beyond economic repair shall be properly disposed and dropped from the books. Ref 2007 AAR Management Action Status of Implementation Not implemented. Reiterated as Finding # 1. Reason for Partial/NonImplementation

We recommend that depreciation be provided and the related accumulated depreciation accounts for all depreciable assets be updated in accordance with the NGAS Manual, for a realistic presentation of the value thereof in the financial statements. Also, manage-ment must exert effort to secure the documents necessary to reconstruct the PPE accounts so that depreciation for the current and previous years maybe computed to arrive at the correct valuation of the property, plant and equipment.

2007 AAR

Not implemented Reiterated as Finding # 2

21

Audit Observation

Recommendation Require the Municipal Budget Officer and Municipal Accountant to determine all obligations with valid claims and revert to the unappro-priated surplus (Government Equity Account) the accounts payable that has no valid or existing creditors or claimants considering the lapse of time.

Ref 2007 AAR

Management Action

Status of Implementation Implemented

Reason for Partial/NonImplementation

3. Other
Payable amounting to P 377,166.92 had remained outstanding for more than two (2) years contrary to the provisions of Section 98 of Presidential Decree (PD) 1445. The absence of subsidiary ledgers cast doubt on its validity.

4. The failure of the Municipal Treasurer to submit the Consolidated Report of Accountability for Accountable Forms (CRAAF) to the Office of the Auditor within five (5) days after the end of the month as required under Section 51, Volume II of the NGAS Manual hindered the prompt detection of unaccounted and loss of accountable forms.

Require the Municipal Treasurer to designate a regular personnel who will take charge of the preparation of the CRAAF to ensure prompt submission to the Office of the Auditor.

2007 AAR

Implemented

22

Audit Observation 5. Casual employees were utilized/assigned to perform collecting functions due to manpower constraints, contrary to Section 65 of the Government Accounting And Auditing Manual (GAAM), Volume I.

Recommendation We advise the Municipal Treasurer to strictly comply with Section 65 of GAAM, Volume I, such that only regular employees should be designated as collectors to ensure accountability. We recommend to the Municipal Mayor to fill the vacant positions in the Office of the Municipal Treasurer, as these are collection related, to prevent manpower shortage.

Ref 2007 AAR

Management Action

Status of Implementation Not Implemented

Reason for Partial/NonImplementation

6. The balance of the receivable accounts at year-end is unreliable due to the failure of the management to recognize in the books the Real Property Tax (RPT) and Special Education Tax (SET) Receivables as required under Section 20, NGAS Manual, Volume I

The Municipal Assessor should update the Master List of Real Property Taxpayers to provide the Municipal Treasurer an accurate basis in the preparation of a certified list showing the names of taxpayers and the amount due and collectible for the year. The certified list shall be the basis of the Municipal Accountant in setting up the RPT and SET Receivables as required under Section 20, NGAS Manual, Volume I.

2007 AAR

Not implemented

23

Audit Observation 7. Purchase of office supplies and other supplies during the year amounting to P 308,495.44 and P 187,254.38, respect-tively, were directly issued to end users and charged to the expense account with-out coursing through the inventory, contrary to Section 114, Chapter 7, Volume I of the NGAS Manual. Stock Cards and Supplies Ledger Cards were likewise not maintained and Summary of Supplies and Materials Issued were not prepared, contrary to Sections 119 121 of the same Manual. 8. The LGU failed to submit regularly on due dates the Reports of Collections and Disbursements together with the receipts and paid vouchers to the Auditor, as required under COA Circular No. 94-006, as amended, This resulted to the delay in the issuance of notices of suspensions, charges and disallowances and consequently, the issuance of the Certificate of Settlement and Balances.

Recommendation The LGU should adopt the perpetual inventory method in recording purchase of supplies and materials. The LCE should direct the Municipal Accountant and Treasurer to prepare and maintain records and reports as required by the NGAS Manual to ensure that the correct amount of inventory and expense accounts are taken up in the books.

Ref 2007 AAR

Management Action

Status of Implementation Not implemented

Reason for Partial/NonImplementation

Direct the Municipal Treasurer and the Accountant to submit regularly on due dates the Report of Collections and Disbursements together with the receipts and paid vouchers and documents evidencing their transactions, as required by COA Circular No

2007 AAR

Partially implemented

24

Audit Observation 9. Non remittance of Real Property Tax Share of ARMM thus incurring a liability amounting of P 276,888.52 as of December 31, 2004 in disregard of Sec. 108 Chapter 4 of GAAM Vol. I and sec. 69 of PD 1445.

Recommendation Direct the Municipal Treasurer to remit promptly the share of ARMM on Real Property Tax collected in consonance with Section 69 of PD 1445.

Ref 2007 AAR

Management Action

Status of Implementation Not implemented

Reason for Partial/NonImplementation

25

PART IV - ANNEXES

26

Annex A
MUNICIPAL GOVERNMENT OF BONGAO CONSOLIDATED BALANCE SHEET As of December 31, 2008 Totals ASSETS Current Assets Cash (Note 5) Receivables (Note 6) Inventories (Note 7) Total Current Assets Property, Plant and Equipment (net of depreciation) Land and Land Improvements Building Office Equipment, Furniture and Fixtures Machinery and Equipment Transportation Equipment Other Property, Plant and Equipment Construction in Progress Total Property, Plant and Equipment (Note 8) Other Assets TOTAL ASSETS General Fund Trust Fund SEF

9,134,310.31 582,404.09 47,334.02 9,764,048.42

31,563.19 13,729.11 47,334.02 92,626.32

9,102,747.12 0.00 9,102,747.12

0.00 568,674.98 0.00 568,674.98

6,137,339.82 18,841,756.90 4,267,906.88 1,382,882.67 685,796.87 26,100.00 600,00.00 31,941,783.14 849,256.24 42,555,087.80

6,137,339.82 18,841,756.90 4,267,906.88 1,382,882.67 685,796.87 26,100.00 0.00 31,341,783.14 849,256.24 32,283,665.70

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

600,000.00 600,000.00 0.00 9,702,747.12

0.00 0.00

568,674.98

LIABILITIES AND EQUITY LIABILITIESCurrent Liabilities (Note 10) Deferred Credits Total Liabilities EQUITY Government Equity (Note 11) TOTAL LIABILITIES & EQUITY 12,317,926.02 0.00 12,317,926.02 2,615,178.90 0.00 2,615,178.90 9,702,747.12 0.00 9,702,747.12 0.00 0.00 0.00

30,237,161.78 42,555,087.80

29,668,486.80 32,283,665.70

0.00 9,702,747.12

568,674.98 568,674.98

27

Annex B
Municipal Government of BONGAO CONSOLIDATED STATEMENT OF INCOME AND EXPENSE For the Year ended December 31, 2008

Totals Income Local Taxes Permit and Licenses Service Income Business Income Other General Income TOTAL INCOME Less: Expenses Personal Services Maintenance and Other Operating Expenses Financial Expenses TOTAL EXPENSES Operating Income Add: Subsidies from National Govt Total Less: Subsidies to Other LGUs NET INCOME 1,455,497.55 128,908.71 546,892.00 1,729,319.00 81,026,824.29 84,887,441.55

General Fund

Trust Fund

SEF

1,073,208.94 128,908.71 546,892.00 1,729,319.00 81,026,824.29 84,505,152.94

0.00 0.00 0.00 0.00 0.00

382,288.6 1 0.00 0.00 0.00 382,288.6 1

24,481,277.83 55,869,804.39 7,077.00 80,358,159.22 4,529,282.33 0.00 4,529,282.33 5,492,482.27 (963,199.94)

24,481,277.83 55,869,804.39 7,077.00 80,358,159.22 4,146,993.72 0.00 4,146,993.72 5,492,482.27 (1,345,488.55)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 382,288.6 1 0.00 382,288.6 1 0.00 382,288.6 1

28

Annex C
Municipal Government of BONGAO CONSOLIDATED STATEMENT OF CASH FLOWS For the Year ended December 31, 2008

TOTALS Cash Flow from Operating Activities: Cash Inflows: Collection from taxpayers Share from Internal Revenue Collections Receipts from Sale of Goods/services Other Receipts Total Cash Inflow Cash Outflows: PaymentsTo Suppliers/Creditors To employees Other Expense Total Cash Outflow Net Cash from Operating Activities Cash Flows from Investing Activities: Cash Inflows From Sale of Property, Plant and Equipment Cash Outflows To Purchase Property, Plant and Equipment Net Cash from Investing Activities Cash Flows from Financing Activities Cash Inflows Cash Outflows Net Cash from Financing Activities Net Increase in Cash Cash at Beginning of the Period

General Fund

TRUST FUND

SEF

1,455,497.55 80,975,371.00 2,405,119.71 7,397,840.09 92,933,828.35

1,073,208.94 80,975,371.00 2,405,119.71 51,453.29 84,505,152.94

0.00 0.00 0.00 7,346,386.80 7,346,386.80

0.00 0.00 0.00 0.00 0.00

49,917,667.01 31,491,529.64 428,755.70 81,837,952.35 10,395,876.00

49,317,667.01 31,491,529.64 0.00 80,809,196.65 3,695,956.29

600,000.00 0.00 13,255.82 613,255.82 6,733,160.98

0.00 0.00 415,529.88 415,529.88 (33,241.27)

0.00 4,850,457.81 (4,850,457.81)

0.00 4,850,457.81 (4,850,457.81 )

0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00 5,545,418.19 3,588,892.12

0.00 0.00 0.00 (1,154,501.52 ) 1,186,064.71

0.00 0.00 0.00 6,733,160.98 2,369,586.14

0.00 0.00 0.00 (33,241.27) 33,241.27

29

Cash at the End of the Period

9,134,310.31

31,563.19

9,102,747.12

0.00

Annex D
Municipal Government of BONGAO STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS (Current Legislative Appropriation) (Consolidated) As of December 31, 2008 Function/Program/Project/A GENERAL PUBLIC SERVICES Executive Services (Mayor) General Administration Personal Services MOOE Capital Outlay Vice-Mayor Personal Services MOOE Capital Outlay Legislative Services Legislation Personal Services MOOE Capital Outlay Secretary to Sangguniang Personal Services MOOE Planning and Development General Administration Personal Services MOOE Civil Registry (Civil General Administration Personal Services MOOE Budgeting Services (Budget General Administration Personal Services MOOE Accounting Services General Administration Personal Services MOOE Treasury Services Appropria Allotme Obligati Unoblig Balance

6,917,251. 2,340,000. 92,814.00 959,290.94 1,500,000. 0.00

6,852,70 2,329,02 92,814.0 959,290. 1,500,00 0.00

6,852,70 2,329,02 92,814.0 959,290. 1,500,00 0.00

0.00 0.00

0.00 0.00 0.00

5,005,180. 1,950,000. 500,000.00 1,176,759. 433,503.59

5,005,18 1,940,83 500,000. 1,176,75 433,503.

5,005,18 1,940,83 250,200. 1,176,75 433,503.

0.00 0.00 249,800. 0.00 0.00

1,882,895. 435,778.60

1,882,89 435,778.

1,882,89 435,778.

0.00 0.00

720,583.79 179,467.67

720,583. 179,467.

720,583. 179,467.

0.00 0.00

977,014.55 265,082.17

977,014. 265,082.

977,014. 265,082.

0.00 0.00

1,142,043. 284,741.30

1,142,04 284,741.

1,142,04 284,741.

0.00 0.00

30

General Administration Personal Services MOOE Capital Outlay

3,350,081. 550,000.00 135,095.00

3,350,08 550,000. 135,095.

3,350,08 550,000. 135,095.

0.00 0.00

Assessment of Real General Administration Personal Services MOOE Auditing Services (Auditor) General Administration MOOE Information Services General Administration MOOE Legal Services General Administration MOOE MCTC MOOE Police Services General Administration MOOE Fire Protection Services General Administration MOOE

1,027,325. 172,000.0

1,027,32 172,000.

1,027,32 172,000.

0.00 0.00

350,000.0

350,000.0

350,000.0

0.00

338,003.3

338,003.0

338,003.0

0.00

104,600.0 50,000.00

104,600.0 50,000.00

104,600.0 50,000.00

0.00 0.00

760,000.0

758,459.9

758,459.9

0.00

195,583.3

195,583.3

195,583.3

0.00

Repair and Maintenance of Government General Administration MOOE 9,000,000 SUB-TOTAL 42,795,09

9,000,000 42,708,86

9,000,000 42,459,06

0.00 249,800

EDUCATION, CULTURE, MANPOWER DEVELOPMENT Maintenance of Sports Centers, Athletic and Playgrounds Sports MOOE 2,245,000 SUB-TOTAL HEALTH SERVICES General Administration MOOE SUB-TOTAL HOUSING AND COMMUNITY Sanitary Services 2,245,000

2,243,368 2,243,368

2,243,368 2,243,368

0.00 0.00

3,750,000 3,750,000

3,745,205 3,745,205

3,745,205 3,745,205

0.00 0.00

31

MOOE Street Cleaning Garbage Collections Street Lighting

860,000.0 4,050,000 1,500,000

858,711.7 4,037,274 1,500,000

858,711.7 4,037,274 1,500,000

0.00 0.00 0.00

Social Welfare Services MOOE General Administration Family Planning Red Cross OTHERS SUB-TOTAL ECONOMIC SERVICES Municipal Economic General Administration MOOE Engineering Services General Administration Personal Services MOOE SUB-TOTAL OTHER PURPOSES Retirement and Other Lump-Sum Personal Services Outlays in Connection with Other Calamities, other Budgetary Reserves MOOE Others MOOE SUB-TOTAL Aid to Barangays Local Development Fund Peace and Order MOOE IT Department General Administration MOOE Community Development General Administration MOOE Capital Outlay SUB-TOTAL

1,560,000 100,000.0 5,000.00 2,200,000 10,275,00

1,556,420 100,000.0 5,000.00 2,195,852 10,253,25

1,556,420 100,000.0 5,000.00 2,195,852 10,253,25

0.00 0.00 0.00 0.00 0.00

1,870,000

1,870,000

1,870,000

0.00

856,567.6 192,000.0 2,918,567

856,567.6 192,000.0 2,918,567

856,567.6 192,000.0 2,918,567

0.00 0.00 0.00

1,000,000

1,000,000.00

530,825.54

469,174

4,048,768 2,750,000 7,798,768 35,000.00

4,048,768 2,738,601 7,787,369 35,000.00

4,048,768 2,738,601 7,318,195 35,000.00

0.00 0.00 469,174 0.00

1,060,000

1,050,867

1,050,867

0.00

150,000.0

138,068.7

138,068.7

0.00

16,195,07 17,405,07

16,195,07 0.00 17,384,01

16,195,07 17,384,01

0.00 0.00 0.00

32

GRAND TOTAL

87,187,5

87,040,6

86,321,6

718,97

Annex E AAR Page 10

Schedule of Property, Plant and Equipment As of December 31, 2008

Acquisition Cost P 300,000.00 5,837,339.82 7,747,527.28 8,082,114.81 3,012,114.81 291,919.26 3,938,411.38 653,018.80 3,164,338.50 711,000.00 844,438.36 87,000.00 600,000.00 P 35,269,223.02 Accumulated Depreciation P 0.00 0.00 0.00 0.00 0.00 69,990.39 52,744.69 492,707.48 1,781,455.83 581,125.03 288,516.46 60,900.00 0.00 P 3,327,439.88

PARTICULARS Land Land Improvements Office Buildings Market & Slaughterhouse Other Structures Office Equipment Furniture and Fixtures IT Equipment and Software Const.& Heavy Equipment Motor Vehicles Other Transportation Equipment Other Property, Plant & Equipment Construction in Progress TOTAL PROPERTY, PLANT & EQUIPMENT

Book Value P 300,000.00 5,837,339.82 7,747,527.28 8,082,114.81 3,012,114.81 221,928.87 3,885,666.69 160,311.32 1,382,882.67 129,874.97 555,921.90 26,100.00 600,000.00 P 31,941,783.14

33

Annex F AAR Page 11 Schedule of PPE without Depreciation in CY 2008 As of December 31, 2008

PARTICULARS Land Improvements Office Buildings Market & Slaughterhouse Other Structures Furniture and Fixtures TOTAL

Acquisition Cost 5,837,339.82 7,747,527.28 8,082,114.81 3,012,114.81 3,737,943.63 P 28,417,040.35

Accumulated Depreciation 0.00 0.00 0.00 0.00 0.00 0.00

Book Value 5,837,339.82 7,747,527.28 8,082,114.81 3,012,114.81 3,737,943.63 P 28,417,040.35

34