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 ended, taking exceptions to the effects of the following:
1. The Local Government Unit did not take advantage of the guidelines and procedures on
the one-time cleansing of Property, Plant, and Equipment (PPE), thus affecting the fairness
of presentation of the financial position in the financial statements and depriving the
government of reliable and useful information in decision-making and accountability for
these assets.
2. The Real Property Tax (RPT) and Special Education Tax (SET) receivables were not
properly set up and maintained, thus showing nil balances instead of ₱34,098,709.48,
thereby understating the RPT and SET receivables by the same amount.
3. The transfer of the unexpended balance of the LDRRMF- Quick Response Fund (QRF)
and the Maintenance and Other Operating Expenses (MOOE) of the Mitigation Fund (MF)
was not recorded in the Trust Fund books during the year, contrary to Items 5.1.10 and
5.1.12 of COA Circular No. 2012-02 dated September 12, 2012, resulting in the
understatement of the receivable and trust liability accounts by ₱5,512,645.49.
Significant Observations and Recommendations
The following are the significant audit observations and recommendations in the audit and/or
evaluation of the operations of the Municipal Government for CY 2024. These, and other audit
observations discussed by the Audit Team with Management in an exit conference on June 9,
2025, are fully presented in Part II of this Report.
a. The Cash in Bank balances showed a discrepancy of ₱(3,068,540.08), net of
outstanding checks, compared to the confirmed balances from the depository bank,
which remained unadjusted because book reconciling items in the Bank
Reconciliation Statements (BRS) were not recorded during the year, thus presenting
an inaccurate and unreliable balance in the financial statements.
We recommended that the Municipal Accountant:
a. Immediately complete the reconciliation of all bank accounts and ensure that all valid
reconciling items identified in the BRS are properly adjusted in the Municipality’s books;
b. Strictly comply with Sections 3.2 and 3.3 of COA Circular No. 96-011, which require
timely reconciliation and adjustment of the General Ledger within 10 days from receipt of
the bank statements;
c. Establish and enforce internal control procedures, including setting fixed monthly
deadlines for the preparation and review of BRS and requiring prompt investigation and
resolution of all reconciling items; and
iii
