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 Inventory Committee was not able to conduct a complete physical inventory count
for the one-time cleansing of the Property, Plant, and Equipment (PPE) accounts, thereby
raising concerns about the existence and fairness of the presentation of the PPE balances
of ₱452,816,644.68.00 in the financial statements, including movable properties totaling
₱68,683,853.89, as of December 31, 2024;
2. The entire Loans Payable account amounting to ₱95,973,110.17 was incorrectly
classified as a current liability despite including amortizations due from 2026 to 2039,
thereby overstating current liabilities by ₱89,158,886.28, understating the non-current
liabilities by the same amount, and affecting the fair presentation and reliability of the
financial statements as of year-end; and
3. Cash – Local Treasury account balance per general ledger in the total amount of
₱1,292,249.00 as of December 31, 2024, does not reconcile with the cashbook balance of
₱258,739.86, resulting in an unreconciled difference of ₱1,033,509.14, thus affecting the
fair presentation of the recorded balance of the Cash account 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. Property, Plant, and Equipment (PPE) under the Trust Fund totaling ₱3,521,153.86 were
neither transferred to the General Fund nor provided with depreciation allowances, thus
adversely affecting the fairness of presentation of the financial statements.
We recommended that:
a. The Municipal Mayor require the Municipal Engineer to provide the Municipal
Accountant with a report on completed Trust Fund projects so that these can
immediately be transferred to the General Fund.
b. The Municipal Mayor require the Municipal Accountant to prepare journal entries to
transfer the completed PPE amounting to ₱3,521,153.86 under the Trust Fund to the
General Fund.
c. The Municipal Mayor require the Municipal Accountant to recognize the
corresponding depreciation expenses for the completed projects in the General Fund.
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