REGIONAL OFFICE NO. VII
M.J. Cuenco Avenue, Corner V. Sotto Street, Barangay Tinago, 6000 Cebu City
INDEPENDENT AUDITOR’S REPORT
HONORABLE MANUEL L. SAGARBARRIA
Provincial Governor
Province of Negros Oriental
Qualified Opinion
We have audited the financial statements of the Province of Negros Oriental, which
comprise the statement of financial position as of December 31, 2024, the statement of
financial performance, the statement of changes in net assets/equity, the statement of cash
flows, the statement of comparison of budget and actual amounts for the year then ended,
and notes to the financial statements, including a summary of significant accounting
policies.
In our opinion, except for the effects of the matter described in the Bases for Qualified
Opinion section of our report, the accompanying financial statements present fairly, in all
material respects, the financial position of the Province of Negros Oriental as of December
31, 2024, and its financial performance, its cash flows, and its comparison of budget and
actual amounts for the year ended in accordance with International Public Sector
Accounting Standards (IPSASs).
Bases for Qualified Opinion
1. The Local Road Networks account shows a balance of ₱373,712,461.98, which remains
unidentified due to the absence of the required inventory of local roads, hindering
reconciliation with the Registry of Public Infrastructure.
2. The depreciation expense of the Road Network, with an accumulated depreciation
balance of ₱471,365,166.38, was calculated using a uniform estimated useful life of ten
years and a ten per cent salvage value for the total cost rather than for each road
component, thus raising concerns about the reliability of the balance and resulting in an
undetermined amount of discrepancy.
3. The reliability of inventory, with a balance of ₱557,966,849.17 could not be ascertained
due to the absence of Supplies Ledger Cards, the inclusion of negative balances
amounting to ₱623,726.29, and the presence of dormant accounts totalling
₱22,200,675.08.
4. The breeding stocks, valued at ₱23,076,711.37, could not be relied upon due to
(a) incomplete inventory count, (b) non-maintenance of the Work, Other Animals and
Breeding Stocks Ledger Card, (c) dormant accounts exceeding ten years totalling
₱6,717,359.87, and (d) the non-recognition and measurement of stocks in accordance
with IPSAS 27, thereby causing misstatements in the breeding stocks and related
accounts for an undetermined amount.
