Independent Auditor’s Report on the Financial Statements
We rendered a qualified opinion on the fairness of the presentation of the financial statements
for the year then ended taking exception to the effects of the following:
1. The Inventory Committee was not able to conduct a complete physical inventory count for
the one-time cleansing of the Property, Plant, and Equipment (PPE) accounts thereby
raising concerns about the existence and fairness of the presentation of the PPE balances
of ₱377,956,496.66 in the financial statements, including movable properties totaling
₱82,252,926.83 as of December 31, 2024; and
2. The accuracy of the Accountable Forms, Plates and Stickers inventory account in the total
amount of ₱1,074,559.30 is unreliable because the Municipal Treasurer did not conduct a
physical count of inventory items every semester and did not prepare the Summary of
Supplies and Materials Issued (SSMI), which is the basis for recording the utilization of
inventory items, thereby overstating the Inventory account by ₱889,767.22 and
understating the Expense account of the same amount, affecting the fair presentation of the
accounts in the financial statements.
Significant Observations and Recommendations
In addition to the above-noted deficiencies, below are the significant audit observations and
recommendations noted in the course of the audit:
1. The balances of the Real Property Tax (RPT) Receivable and Special Education Tax (SET)
Receivable accounts as of December 31, 2024, between the records of the Municipal
Accounting Office (MAO) and the Municipal Treasurer’s Office (MTO) showed a
difference of ₱8,907,556.24 due to the non-reconciliation of their records and the non-
recording of the RPT and SET receivables. Consequently, the RPT/SET Receivable and
Deferred Income accounts, as presented in the financial statements, are deemed unreliable.
We recommended that the Municipal Mayor direct:
a. The Municipal Accountant and Municipal Treasurer to reconcile the difference
between the RPT and SET Receivables account balances totaling ₱8,907,556.24 and
henceforth, conduct periodic reconciliation, together with the Municipal Assessor, of
the total collectibles from the Basic and Special Education Tax with the RPT and SET
Receivables account balances to prevent the accumulation of unreconciled differences;
b. The Municipal Treasurer to furnish the Municipal Accountant a duly certified list of
taxpayers with the amount due and collectible for the current year as basis for recording
the RPT and SET Receivable accounts in compliance with Chapter 3, Section 20 of the
NGAS Manual for LGUs, Volume I; and
c. The Municipal Accountant to maintain subsidiary ledgers for RPT and SET receivables
to support the general account in the financial statements.
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