REGIONAL OFFICE NO. VII
M.J. Cuenco Avenue, Corner V. Sotto Street, Barangay Tinago, 6000 Cebu City
INDEPENDENT AUDITOR’S REPORT
HONORABLE FATIMA C. CAÑAMAQUE
Municipal Mayor
Municipal Government of Basay
Province of Negros Oriental
Qualified Opinion
We have audited the financial statements of the Municipality of Basay, Province of Negros
Oriental, which comprise the statement of financial position as at December 31, 2024, and
the statement of financial performance, statement of changes in net assets/equity, statement
of cash flows and statement of comparison of budget and actual amounts for the year then
ended, and notes to the financial statements, including a summary of significant accounting
policies.
In our opinion, except for the effects of the matter described in the Bases for Qualified
Opinion section of our report, the accompanying financial statements present fairly, in all
material respects, the financial position of the Municipality of Basay as of December 31,
2024, and its financial performance, cash flows, changes in net assets/equity, and
comparison of budget and actual amounts for the year then ended in accordance with
International Public Sector Accounting Standards (IPSASs).
Bases for Qualified Opinion
As discussed in the Audit Observations and Recommendations under Part II of this Report,
the accuracy of the balance of Property, Plant and Equipment (PPE) accounts valued at
₱439.554.040.51, which include movable properties amounting to ₱66,016,501.17, cannot
be verified, because one-time cleansing procedures were not completed, particularly the
conduct of physical count of the Municipality’s properties. Moreover, ₱133,995,806.25 of
the total PPE were not provided with annual depreciation, thereby overstating the asset and
equity accounts by the amount of depreciation that should have been applied to these
properties.
Further, the total receivables were understated by ₱54,931,515.89, because no Real
Property Tax and Special Education Tax receivables were reported in the financial
statements due to the absence of coordination between the responsible offices. Also, the
accuracy of the cash in bank balance cannot be assured due to the substantial discrepancy
of ₱8,011,497.85 between the reported balance in the financial reports and bank statements,
which is yet to be reconciled.
