Guimbal Executive Summary 2013

EXECUTIVE SUMMARY
Einführung
The Municipality of Guimbal is a fourth class, but a clean, peaceful and progressive
municipality located 29 kilometers away from Iloilo City. Guimbal has a total land area of
4,461 hectares and is composed of 33 barangays, 22 rural and 11 urban barangays located
in the poblacion area. Presently, Guimbal has a population of 32,325 with 6,368
households.
The following are the optimal objectives of the Municipality of Guimbal:
1. Enhance and more effectively utilize the skills, abilities and resources;
2. Strengthen understanding and relationship and address issues of value, attitude,

motivation and condition in order to support sustainable participation and a
locally driven agenda;
3. Building on local capacity and ongoing learning and adaptation;
4. Long-term investments and integration of activities at various levels to address

complex problems.
Financial Highlights
The Municipality of Guimbal appropriated the total amount of P71.884 Million,

while total obligations incurred reached P54.917 Million. Details of the agency’s financial
position are as follows:
2013 2012 Increase/(Decrease)

Assets 134,787,098.57 155,985,580.31 (21,198,481.74)
Liabilities 36,154,289.88 65,935,713.87 (29,781,423.99)
Government Equity 98,632,808.69 90,049,866.44 8,582,942.25
The financial condition of the Municipality of Guimbal for the year ended
December 31, 2013 with comparative figure of last year’s performance is shown below:
2013 2012 Increase/(Decrease)

Income 63,160,399.36 56,279,712.18 6,880,687.18
Expenses 54,297,059.35 50,305,205.69 3,991,853.66
Net Income 8,863,340.01 5,974,506.49 2,888,833.52
Scope of Audit
A financial and compliance audit was conducted on the accounts and operations of
the Municipal Government of Guimbal, Iloilo for the year ended December 31, 2013. The
audit was conducted to ascertain the propriety of financial transactions and compliance of
the Local Government Unit (LGU) 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.
Auditor’s Opinion on the Financial Statements
The Auditor rendered a qualified opinion on the fairness of presentation of the

financial statements due to the failure of the agency to conduct actual inventory count of its
Property, Plant and Equipment.
Significant Findings and Recommendations
I. Financial and Compliance Audit
1. The Municipality granted Productivity Enhancement Incentive (PEI) of

P25,000.00 per employee, or a total of P2,337,500.00, contrary to Section 1.3 of
Budget Circular No. 2013-3, dated November 21, 2013 and Section 4 of
Executive Order No. 80, thereby incurring additional expenditures amounting to
P1,862,500.00 which could have been used instead to fund projects that are
beneficial to its constituents.
We recommend the refund of the excess amount of Productivity

Enhancement Incentive for CY 2013 totaling P1,862,500.00 paid to the Municipal
officials and employees.
We also recommend that management see to it that payments for

allowances and other personnel benefits should be based on laws, rules and
regulations authorizing such payments to avoid the suspension and disallowance
of the amount.
2. The local government of Guimbal, Iloilo has exceeded its Personal Services (PS)
limitation for CY 2013 by P1,431,909.01, contrary to Section 325(a) of Republic
Act No. 7160 and pertinent provisions of Local Budget Circular (LBC) No. 98,
dated October 14, 2011, resulting to an imbalance fund allocation in favor of
personal services rather than for the delivery of basic services and development
projects.
We recommend that LGU management observe strictly the rules,

regulations and guidelines specifically provided in appropriating expenses for
Personal Services.
We also recommend that the LGU management initiate and optimize the
generation of resources and revenues, and ensure that all taxes and other revenues
of the LGU are collected in order to increase the allowable PS level. Pertinent
thereto, the Sangguniang Bayan should enact the corresponding ordinances
levying taxes, fees and charges and prescribe the rates thereof and should come up
with judicious and holistic evaluation of the reasonableness of projected revenues
and other receipts.
We likewise recommend that the Municipal Finance Committee should set

realizable collection targets in order to arrive at a doable budget that would
respond to the actual need of the Municipality instead of creating more
unnecessary positions that may not redound to the betterment of the LGU.
3. Cash advances amounting to P 3,160,070.28 remained unliquidated as of

December 31, 2013 contrary to the provisions of Section 89 of PD 1445 and COA
Circular No. 97-002, dated February 10, 1997, thus exposing government funds to
the possibility of being misused for unauthorized purposes.
We recommend that the Local Chief Executive require the immediate

settlement of all cash advances after the purpose for which these were granted had
been served, or an accounting had already been made thereof pursuant to Section
89 of PD 1445 and COA Circular No. 97-002.
We further recommend that additional cash advance should not be given

to accountable officers unless their previous cash advances are first liquidated
and/or settled, and consider withholding the salaries of the concerned accountable
officers until they liquidate/settle their cash advances in line with existing
regulations.
4. Collections received were not deposited intact daily, the following banking day or
a soon as collections reach the amount of Ten Thousand Pesos (P 10,000.00),
resulting to accumulated amount of collections consisting of cash and checks
remaining in the possession of the Municipal Treasurer, contrary to Section 28 of
COA Circular No. 92 – 382, thus the risks of loss, misappropriation or
misapplication exist.
We recommend that the Municipal Treasurer deposit intact all collections

turned over to her by the collectors with the authorized depository bank daily, not
later than the next banking day or as soon as collections reach the amount of Ten
Thousand Pesos (P10,000.00) to preclude any risk of loss, misappropriation or
misapplication.
5. Cashbook for Cash in Treasury was not updated due to the failure of the
Municipal Treasurer to record immediately her transactions for the day resulting
to unverifiable cash balance by funds in the hands of the Municipal Treasurer,
contrary to Section 26 of the NGAS for LGU.
We recommend that the Municipal Treasurer record all her transactions
immediately for the day with the debit and credit totals ruled and closed. All
totals shall be written legibly in ink and the balances shall be carried forward as
the opening balances of the Cash Book for the next day. The difference of the
totals of Debit and Credit columns should tie-up with the running balance column.
6. Some agency personnel who are entrusted to issue and collect government funds
are not properly designated and bonded contrary to the provisions of Section 64 of
PD 1445 and Section 305 (f) of Republic Act No. 7160, thus the collection of
public funds, as well as, the safekeeping thereof is being put to risk.
We recommend that the Local Chief Executive properly designate the

accountable officers in-charge of collecting funds for the government and to
instruct the Municipal Treasurer to file the appropriate bonds with the Bureau of
Treasury for said collectors.
7. The Liquidating/Disbursing Officer’s office is not properly secured exposing

government funds and property to risk of loss thru theft due to its accessibility to
unauthorized personnel contrary to sound internal control.
We recommend that a separate cubicle for the Liquidating/ Disbursing

Officer must be provided by the agency. Such partition must be appropriately
enclosed and given corresponding lock. The Liquidating/ Disbursing Officer must
ensure that only authorized personnel are allowed to have access to the room in
order to protect government funds and property against risk of loss thru theft.
8. Official Receipts were not issued in sequential order which is inconsistent with
the provisions of Section 73 of GAAM, Vol. 1 resulting to difficulty in the
determination of balances of accountable forms and possibility of loss of
unaccounted official receipts.
We recommend that the collector issue the official receipts in numerical

sequence so that balances of unused accountable forms could be easily
determined. Requisition of another set of accountable form must be made only
when the previous one is entirely used up for proper accounting and to avoid loss
of ORs in their possession.
9. Disbursements charged against the Special Education Fund (SEF) amounting to

P214,496.08 from January to December 2013 were not in accordance with the
provisions of Republic Act No. 5447 and DECS-DBM-DILG Joint Circular Nos.
01-A and 01-B, thus defeating the purpose for which the Fund is established.
We recommend that the Local Chief Executive stop the practice of

charging expenditures not within the purview of RA 5447. They should see to it
that activities to be funded by the SEF are included in the list of projects/activities
that could be charged against the Special Education Fund pursuant to the pertinent
provisions Republic Act No. 5447.
10. Failure of the Municipal Disaster Risk Reduction and Management Officer
(MDRRMO) to submit a monthly Report on Sources and Utilization of Disaster
Risk Reduction Management Fund (DRRMF), contrary to the provision of COA
Circular 2012-002, prevented the timely verification of the correctness and proper
utilization of the Municipal Disaster Risk Reduction Fund for CY 2013.
We recommend that management adhere strictly with the provision of

Item 5.1.5 of COA Circular 2012-002, dated September 12, 2012 and submit
regularly to the COA Audit Team of the Municipality the monthly Report on
Sources and Utilization of the Municipal Disaster Risk Reduction Management
Fund on or before the 15th day after the end of each month through the Municipal
Disaster Risk Reduction Management Council and the Municipal Development
Council.
11. Trip Tickets of the government vehicles used by the Municipality of Guimbal,
Iloilo, on official business were not accomplished properly resulting to
unverifiable fuel consumptions per official trip, contrary to COA Circular No. 85–
55-A, dated September 8, 1985.
We recommend that management see to it that the trip tickets of all

vehicles used for official business by the Municipality are accomplished properly.
All information needed in accomplishing a trip ticket should be provided as
required in the trip ticket form in order that the purpose of the trip and fuel
consumption could be established.
We also recommend that in case of faulty odometers, actual test run

should be done by management to determine the actual distance traveled per liter
of each vehicle owned by the Municipality as basis for computing fuel
consumption.
Summary of Implementation of Audit Recommendations
Of the three (3) recommendations embodied in the 2012 Annual Audit Report,
one (1) was fully implemented and two (2) were not implemented.

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EXECUTIVE SUMMARY

The following are the optimal objectives of the Municipality of Guimbal:

2. Strengthen understanding and relationship and address issues of value, attitude,

3. Building on local capacity and ongoing learning and adaptation;

4. Long-term investments and integration of activities at various levels to address

The Municipality of Guimbal appropriated the total amount of P71.884 Million,

2013 2012 Increase/(Decrease)

2013 2012 Increase/(Decrease)

Auditor’s Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the

Significant Findings and Recommendations

I. Financial and Compliance Audit

1. The Municipality granted Productivity Enhancement Incentive (PEI) of

We recommend the refund of the excess amount of Productivity

We also recommend that management see to it that payments for

We recommend that LGU management observe strictly the rules,

We likewise recommend that the Municipal Finance Committee should set

3. Cash advances amounting to P 3,160,070.28 remained unliquidated as of

We recommend that the Local Chief Executive require the immediate

We further recommend that additional cash advance should not be given

We recommend that the Municipal Treasurer deposit intact all collections

We recommend that the Local Chief Executive properly designate the

7. The Liquidating/Disbursing Officer’s office is not properly secured exposing

We recommend that a separate cubicle for the Liquidating/ Disbursing

We recommend that the collector issue the official receipts in numerical

9. Disbursements charged against the Special Education Fund (SEF) amounting to

We recommend that the Local Chief Executive stop the practice of

We recommend that management adhere strictly with the provision of

We recommend that management see to it that the trip tickets of all

We also recommend that in case of faulty odometers, actual test run

Summary of Implementation of Audit Recommendations

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