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 one-time cleansing of the Property, Plant, and Equipment (PPE) account amounting
to ₱449,640,288.56 as of December 31, 2024, was not yet implemented by the
Municipality due to their failure to complete the physical count and to reconcile the count
with the books, thereby the existence of movable properties amounting to
₱52,486,842.32, net of accumulated depreciation and the accuracy of the PPE balances
cannot be ascertained, affecting the fair presentation of these accounts in the financial
statements;
2. Property, Plant, and Equipment (PPE) under the Trust fund totaling ₱17,379,465.70 were
not transferred to the General Fund nor provided with depreciation allowances, thus
resulting in the understatement of the PPE accounts and depreciation expenses in the
General Fund; and
3. Biological assets with a book balance of ₱11,741,439.97 as of December 31, 2024 is not
fairly presented in the financial statements because no inventory report of the breeding
stocks and trees with their corresponding prevailing market prices as at reporting date
was submitted by the OIC – Municipal Agriculturist to the Municipal Accountant,
thereby the existence and condition of these assets as well as the reliability of the balance
of the biological assets account could not be ascertained.
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 accuracy and reliability of the inventory account in the total amount of
₱9,617,624.95 could not be ascertained due to failure to conduct a physical count of
inventory items every semester and to prepare the Summary of Supplies and Materials
Issued (SSMI), which is the basis for recording the utilization of inventory items, thereby
affecting the fair presentation of the account in the financial statements.
We reiterated our recommendation and Management agreed that the Local Chief
Executive:
a. Require the conduct of physical count of inventories every semester and submit a
report thereon to the Auditor concerned not later than July 31, and January 31 of each
year for the first and second semesters, respectively;
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