REGIONAL OFFICE NO. VII
M.J. Cuenco Avenue, Corner V. Sotto Street, Cebu City
INDEPENDENT AUDITOR’S REPORT
HONORABLE ERNIE T. UY
Municipal Mayor
Municipality of Mabinay
Province of Negros Oriental
Qualified Opinion
We have audited the financial statements of the Municipality of Mabinay, 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 of Qualified
Opinion section of our report, the accompanying financial statements present fairly in all
material respects, the financial position of the Municipality of Mabinay as at December 31,
2024, and its financial performance, its cash flows, and its statement of comparison of budget
and actual amounts for the year then ended in accordance with International Public Sector
Accounting Standards (IPSAS).
Bases for Qualified Opinion
As discussed in Part II of this report, the entire Loans Payable – Domestic account amounting
to ₱385,608,730.24 was incorrectly classified as a non-current liability despite including
amortizations due for 2026, thereby understating current liabilities by ₱40,132,228.49,
overstating the non-current liabilities by the same amount, and affecting the fair presentation
and reliability of the financial statements as of year-end.
Moreover, the correctness of Loans Payable balance per books in the amount of
₱385,608,730.24 as of December 31, 2024 could not be ascertained due to unreconciled
amounts between the financial statements and confirmed bank balances, resulting in an
understatement of the Loans Payable account of ₱1,879,315.04 affecting the fair presentation
of the account in the Financial Statement as of year-end.
Furthermore, the balances of Cash – Local Treasury account per ledger and per cashbook
showed a variance of ₱5,180,087.16 due to the non-conduct of at least a quarterly
reconciliation of records, thereby preventing the prompt determination of accountability,
