Independent Auditor’s Report on the Financial Statements
The Auditor rendered a qualified opinion on the financial statements of the City of Tanjay for
the year ended December 31, 2024, due to the following exceptions:
1. The validity, existence, and accuracy of the Property, Plant and Equipment (PPE) accounts
totaling ₱753,170,785.01 could not be ascertained due to the unreconciled difference of
₱9,530,828.25 between the PPE balances in the Report on the Physical Count of PPE
(RPCPPE) and the books of accounts, thus affecting the fair presentation thereof in the
Financial Statements. These unreconciled differences could have been properly and
adequately addressed had Management implemented the one-time cleansing of PPE.
2. The accuracy and reliability of the Local Road Network (LRN) account balance totaling
₱545,659,882.49 could not be ascertained due to the: (a) non-conduct of inventory of local
roads and non-preparation of a separate Report on the Physical Count of LRN; (b) non-
maintenance of the LRN Ledger Card and LRN Property Card showing a complete
description and cost segregation of LRN components; (c) non-provision of depreciation for
LRN items; and (d) lack of full disclosure of the total road networks in the Notes to the
Financial Statements, thereby affecting the fair presentation of the account in the financial
statements.
3. Various inventory accounts totaling ₱151,601,129.37 were still recorded in the books
despite their non-existence because the Summary of Supplies and Materials Issued was not
completely prepared or recorded in the books, thereby affecting the fair presentation of the
inventory accounts in the financial statements.
4. Fourteen completed projects under the Trust Fund (TF) totaling ₱87,392,781.11 were not
transferred to the General Fund (GF) due to insufficient monitoring and improper
recording, thus, overstating the Construction in Progress account in the TF while
understating the related PPE accounts in the GF by the same amount, as well as the
depreciation expense by ₱29,358,125.96, which affected the fair presentation of these
accounts in the financial statements.
5. The presence of accounts totaling ₱32,174,051.07 that have remained outstanding for more
than two years and which may no longer represent valid claims but were not reverted to
the unappropriated surplus casts doubt on the reliability and validity of the Accounts
Payable balance of ₱141,031,284.69 in the Financial Statements and precludes any
beneficial use of said funds. Moreover, payables totaling ₱798,241.42 were merely
estimated obligations which overstated both the liability and related expense accounts and
understated the City’s actual results of operations.
6. The Fuel, Oil, and Lubricants Inventory balance of ₱25,390,434.14 was overstated while
the related expense account was understated because the utilization thereof was not
appropriately recognized in the books, thereby affecting the fair presentation of the account
in the financial statements.
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