11. On November 25, 2024, the Audit Team invited the Municipal Mayor, along with other
officials and employees, to an Entrance Conference on December 10, 2024. In the
Entrance Conference Agenda (ECA), the required submission of FS and other
supporting reports and documents was included. In fact, the specific financial
statements, schedules, reports and other supporting documents were enumerated in the
ECA, for which Management was reminded to submit on or before the mandated
deadline, which is on February 14, 2025. It was also agreed that Management submit
whatever documents and reports requested by the audit team which would be available,
even before February 14. However, the Municipal Accountant and concerned personnel
did not comply.
12. A month before the deadline, the audit team reminded the Office of the Municipal
Accountant on their commitment to submit. The audit team issued the First Letter of
Demand on January 14, 2025, reiterating what has been agreed during the Entrance
Conference, i.e. to submit the financial statements, trial balances, and bank
reconciliation statements for the financial year ended December 31, 2024 on February
14, 2025. The audit team also reminded Management to submit the rest of the requested
documents and reports as soon as available, as agreed.
13. Due to the non-submission of the financial statements, trial balances, and bank
reconciliation statements on February 14, 2025, we issued a Second Letter of Demand
on March 18, 2025, requesting that the Municipal Accountant promptly submit the
required financial statements and reports. However, to date, the Municipal Accountant
still has not submitted complied. Only the Check Disbursement Journals (January to
December 2024) and Cash Receipts Journals (April 2024 only) for the Special
Education Fund (SEF) were received by this office.
14. Our interview with the Municipal Accountant disclosed that the delayed preparation
and submission of the FS was due to the large volume of transactions and the limited
manpower in the Office of the Municipal Accountant. She also added that most of the
documents are still not completed, thus, she cannot complete the preparation of the FS.
Further, she emphasized that the Municipal Government of Siaton is using a manual
accounting system, which can significantly slow down the process of consolidation and
reporting. Manual systems are less efficient than automated ones, leading to delays in
data entry, processing, and report generation.
15. The delayed submission of the FS hindered timely audits and reviews, the outcomes of
which are necessary for Management to make informed decisions in their daily
operations. Also, the late submission of the FS affected their usefulness in providing
relevant and timely information vital to decision-making by Management and higher
authorities.
16. We recommended and the Municipal Accountant agreed to improve the processes
within the accounting office to streamline the preparation and timely submission
of the required financial reports to the Audit Team.
17. Additionally, we suggested and the Municipal Accountant agreed to consider
implementing the Electronic New Government Accounting System (eNGAS) to
automate manual accounting processes and expedite the generation of Financial
Statements.
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