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 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;
2. The correctness of Loans Payable balance per books in the amount of ₱385,608,730.24 as
of December 31, 2023 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; and
3. 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, which could also
hinder the discovery of shortages or errors, if any, while adversely affecting the reliability
of the balance presented 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. Cash advances totaling ₱4,209,529.72 remained unliquidated as of December 31, 2024,
thus, expenses were not properly recognized on periods these were incurred, affecting the
fair presentation of the financial statements at year-end.
We reiterated our recommendation that the Municipal Accountant pursue the immediate
liquidation of all outstanding cash advances by issuing final demand letters to the
accountable officers concerned. In cases where liquidation is still not effected within the
prescribed period despite due notice, the appropriate sanctions should be enforced,
including the withholding of salaries in accordance with existing rules and regulations.
Furthermore, we recommended that the Municipal Accountant conduct regular
monitoring and timely reporting of unliquidated cash advances to the Local Chief
Executive, to ensure proper oversight and to facilitate appropriate administrative actions
as necessary.
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