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Ref.
                  Audit Observations                       Audit Recommendations                   Status of Implementation


AAR    25.     As of December 31, 2020, the 37. We recommended that the Municipal                       Unimplemented
2020     Municipality maintained a deposit of       Treasurer transfer the depository account   Management had submitted the
p.34     ₱617,142.89 with the Rural Bank of         maintained with the RBBI to either Land     following documents:
         Bacong, Inc. (RBBI), a private bank,       Bank of the Philippines, Dumaguete
AAR      contrary to Section 311 of Republic Act    Branch, or Development Bank of the          a)      Sangguniang        Bayan
2016     (RA) No. 7160 and Department of Finance    Philippines, Dumaguete Branch, in           Resolution No. 45, dated
         (DOF) Department Circular No. 01-2017      compliance with Section 311 of RA No.       February 27, 1998, requesting the
         dated May 11, 2017, which amount           7160 or DOF Department Circular No. 01-     monetary Board of the Central
         exceeded the maximum insurable amount      2017 dated May 11, 2017.                    Bank of the Philippines an
         of ₱500,000.00 with the Philippine Deposit                                             authority for the LGU to deposit
         Insurance Corporation (PDIC), thus,                                                    with the RBBI;
         exposing public funds to high risk of loss
         in case of bank closure or bankruptcy.                                                 b)      Certificate of Authority
                                                                                                of RBBI from the Bangko Sentral
                                                                                                ng Pilipinas to accept or create
                                                                                                demand deposits; and

                                                                                                c)     Certification from     the
                                                                                                PNP Provincial Office.

                                                                                                Aside from invoking the
                                                                                                “security and safety risks”,
                                                                                                Management believed that it was
                                                                                                more advantageous to the
                                                                                                government to deposit daily and
                                                                                                transact to an accessible and
                                                                                                hassle-free bank within the
                                                                                                locality with shorter queues,
                                                                                                unlike other banks in the city.
                                                                                                Time and distance matter due to
                                                                                                lesser personnel.

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