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EXECUTIVE SUMMARY
INTRODUCTION
The City of Sta. Rosa attained cityhood by virtue of Republic Act No. 9264 that
was ratified through a plebiscite on July 10, 2004.
The City was recognized as a fast rising investment capital of south Luzon next to
Metro Manila and the Information Communication Technology (ICT) Hub of Southern
Luzon. The City was an awardee of the Seal of Good Housekeeping given by the
Department of Interior and Local Government (DILG) in recognition of the City’s efforts
in advancing the principles of accountability and transparency in local governance.
The City Government is managed by Mayor Arlene B. Arcillas, assisted by Vice-
Mayor Arnel DC Gomez and the Members of the Sangguniang Panlungsod.
The Organizational Structure of the City is as follows:
a. Key Officials
City Mayor Hon. Arlene B. Arcillas
Vice Mayor Hon Arnel DC Gomez
Members of the Sanggunian:
1. Hon. Theresa C. Aala
2. Hon. Luisito B. Algabre
3. Hon. Mythor C. Cendaña
4. Hon. Eric T. Puzon
5. Hon. Antonia T. Laserna
6. Hon. Paulino Y. Camaclang Jr
7. Hon. Petronio C. Factoriza
8. Hon. Raymond Ryan F. Carvajal
9. Hon. Laudemer A. Carta
10. Hon. Edward Fernandito S. Tiongco
b. No. of Personnel
Complement
Permanent 995
Temporary 0
Casual 1,150
Contractual 19
Job Order 383
Elective Officials 13
Coterminous 53
Total 2,613
The City maintains three funds, namely: General Fund (GF), Special Education
Fund (SEF) and Trust Fund (TF). It also maintains special account in the General Fund
for 20% Development Fund, Calamity Fund, Hospital, Cemetery, Market and
Slaughterhouse.
FINANCIAL HIGHLIGHTS
For Calendar Year (CY) 2015, the City Government has a total appropriation of
₱2,650,863,522 from its General Fund (GF) and Special Education Fund (SEF)
amounting to ₱2,219,908,722 and ₱430,954,800, respectively. The City also has
Continuing Appropriation of ₱97,470,414. This budget was resolved and approved in the
City’s Annual Budget and Supplemental Budgets.
Out of the City’s appropriations, the amount of ₱2,441,650,348 was allotted.
Obligations incurred for the GF and SEF amounted to ₱1,960,069,397 and ₱349,398,295,
respectively, or a total of ₱2,309,467,692, while only ₱5,708,000 was obligated for the
Continuing Appropriation. The realized net income of the City Government for all funds
amounted to ₱ 472,354,438.
The total assets, liabilities, government equity, income and expenses for CY 2015
of the City Government are as follows:
Assets ₱ 6,125,757,345
Liabilities 1,527,250,603
Equity 4,598,506,742
Income 2,701,246,308
Expenses 2,062,696,285
SCOPE OF AUDIT
Financial and compliance audit, as well as value for money audit were conducted
on the accounts and operations of the City Government of Sta. Rosa for CY 2015. The
audit consisted of the inspection of programs and projects, interview of concerned
local officials and employees, verification, analysis and reconciliation of accounts, and
such other procedures considered necessary.
The audit was conducted to ascertain the propriety of financial transactions,
compliance with prescribed rules and regulations and the economical, efficient and
effective utilization of resources. It was also made to ascertain the accuracy of financial
records and reports, as well as the fairness of the presentation of financial transactions.
AUDIT OPINION ON THE FINANCIAL STATEMENTS
The Auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements because the validity, accuracy and existence of Property, Plant and
Equipment accounts recorded in the books with net book value of ₱4,566,054,241.21
remained doubtful due to: (a) variance of ₱2,968,828,166.51 between the records of the
Office of City Accountant (OCA) and the Report on the Physical Count of Property,
Plant and Equipment (RPCPPE) submitted by the City General Services Office (CGSO);
(b) Inclusion of unserviceable properties totaling ₱7,657,211.74 in the books; (c)
unaccounted properties totaling ₱2,227,978.40 at the time of physical inventory; and (d)
inclusion of disposed scrap/unserviceable items and unserviceable motor vehicles with a
total value of ₱23,310,049.59 and ₱11,076,365.92, respectively. Further, the ownership,
propriety and validity of land recorded in the books amounting to ₱66,175,285.00 are
doubtful due to the lack of Torrens Title conveying ownership of the land to the City
Government.
SIGNIFICANT OBSERVATIONS AND RECOMMENDATIONS
For the exceptions cited above, we reiterated our previous recommendations that
the City Mayor; (a) direct the OCA and CGSO to fast track the reconciliation of the PPE
accounts’ balance per books and RPCPPE, and to make the necessary
corrections/adjustments in the records and books of accounts, respectively; and instruct
the Office of the City Accountant and the City General Services Officer to observe proper
maintenance and updating of the PPELCs and PCs, provide the complete and necessary
information in both records to facilitate verification and reconciliation, and to effect the
necessary adjustments of their records, if warranted; (b) avoid the further deterioration of
the unserviceable properties by requiring the CGSO to prepare the necessary documents
for the disposal of the unserviceable properties; request the disposal of the unserviceable
properties; and dispose the unserviceable properties upon approval of the request, and
after the disposal, require the City Accountant to drop the disposed properties from the
City’s book of accounts; (c) instruct the CGSO to prepare a report on the
missing/unaccounted equipment, and require the persons concerned to produce the same,
otherwise, require them to pay the equivalent money of lost/unaccounted equipment, in
compliance with Section 105 of PD No. 1445; and (d) instruct the City Accountant to
request the return of the documents from the COA – Regional Office No. IV-A, and drop
the disposed properties in the book of accounts.
We also reiterated our previous recommendation that the City Mayor direct the
City Assessor, the City Treasurer and the City General Services Officer to continue the
facilitation of the transfer of titles of lots in the name of City Government of Santa Rosa
to protect the interest of the government, continue the completion and submission of the
documentary requirements for the newly purchased lots, and the City Accountant make
the necessary adjustments for the cancelled transaction for the fair presentation of the
Land account balance in the financial statement.
Other significant observations and recommendations are the following:
1. Audit of cash advances granted by the City Government with a year-end balance of
₱8,581,381.41 showed deficiencies, which resulted in the overstatement of assets
and understatement of affected expense accounts in the financial statements and
exposes government fund to risk of loss and/or misappropriation, to wit:
a. Cash advances amounting to ₱8,581,381.41 remained unliquidated at year-end,
contrary to the provision of Item 4.1.3 and 5.8 of COA Circular No. 97-002 dated
February 10, 1997 and COA Circular No. 2012-004 dated November 28, 2012
We reiterated our recommendation that the City Mayor instruct the City
Accountant to require the concerned officers/employees to immediately liquidate
their outstanding cash advances. In addition, institute the necessary administrative
and legal actions against the accountable officers who failed to liquidate their cash
advances on time.
b. Cash advances totaling ₱2,766,791.93 were granted to officers/employees with
unsettled cash advances, contrary to Item 4.1.2 of COA Circular No. 97-002 dated
February 10, 1997.
We recommended that the City Mayor reprimand the City Accountant to stop
granting cash advances to officers and employees with outstanding cash advances,
and to strictly monitor the granting and utilization of cash advances.
We also recommended that the City Accountant immediately issue demand letters
to the concerned accountable officers to liquidate their long outstanding cash
advances, or withhold the salaries of those defaulting accountable officers.
c. Post-audit of liquidation reports showed the following deficiencies which cast
doubt to their validity, propriety and legality:
Liquidation Reports totaling ₱2,594,787.50 were not supported with complete
documentation;
Excess claim of travelling and training expenses of ₱202,055.88; and
Non-essential and/or unnecessary items totaling ₱9,907.76 were charged to
cash advances.
We recommended that the City Mayor:
require the concerned accountable officers to complete the documentation of
the submitted Liquidation Reports, otherwise, the transactions will not be
allowed in audit, and
require the immediate refund of the excess claim of traveling and training
expenses and unnecessary expenses, and strictly comply with the provisions
of EO 298 and NBC No. 486.
d. Cash advances amounting to ₱2,586,996.93 were granted to 47 officials and
employees of the City Government without the necessary bond, in violation of
Item 4.2 of Treasury Circular No. 02-2009 and Item 7.1 of COA Circular No. 97-
002 dated February 10, 1997.
We reiterated of previous recommendation that the City Mayor make the
necessary actions to ensure that only duly bonded and authorized
official/employees are granted cash advances to avoid exposure of government
funds to high risk of loss and non-recovery in case of embezzlement and misuse.
e. Cash advances totaling ₱1,145,696.00 were liquidated beyond the prescribed
period, contrary to Items 4.1.3 and 5.1.3 of COA Circular No. 97-002 dated
February 10, 1997.
We recommended that the City Mayor direct the concerned City officials and
employees to ensure that all cash advances are liquidated within the prescribed
period, and require the concerned accountable officers the immediate and timely
liquidation of their cash advances.
We further recommended that all the City officers and employees with
outstanding cash advances be reminded of the sanctions provided under Section 8,
Rule V of CSC Resolution No. 04-0676 dated June 17, 2004 as amended by CSC
Resolution No. 12-00103 dated January 12, 2012.
f. Cash advances in the amount of ₱118,500.00 were granted to two City
Government employees in excess of their maximum bond cash accountabilities,
defeating the purpose of Treasury Circular No. 02-2009 dated August 6, 2009.
We recommended that the City Mayor oblige the City Accountant to ensure that
the cash advances granted to an employee and/or officer does not exceed his/her
maximum cash accountability.
2. Review of the implementation of the “Construction of Sports Complex at Barangay
Tagapo, City of Santa Rosa, Laguna” project amounting to ₱589,900,000.00 showed
the delayed completion of the project which deprived the City Government as well as
its constituents of the benefits and immediate use of the facilities, defeating the
purpose to which the loan was acquired.
We recommended that the City Mayor direct the City Engineering Office to provide
the Audit Team of the requested information/explanation for the causes of the long
delays in the project implementation, duly supported with documents to support the
information/explanation to be given, and immediately submit the following requested
documents to enable the Audit Team to evaluate and determine the actual status of the
work accomplished for the project, to wit:
a. Clear copy of the Programme Evaluation Review Technique/Critical Path Method
(PERT/CPM) of the project
b. Latest Status of Work Accomplished (SWA)
c. Variations Order, if approved
d. Time Extensions, if there is any
e. Other documents relative to the time suspension and extension of the contract, if
there is any
3. Audit of the payments made for the “Construction of City Hall Extension at City of
Santa Rosa, Laguna” totaling ₱337,831,922.43 showed deficiencies and not
supported with proper and complete documentation, contrary to Paragraph 6, Section
4 of PD No. 1445 and Paragraph d, Section 168 of the GAAM, Volume I, casting
doubt on the legality and regularity of the disbursements.
We recommended that the City Mayor direct the City Accountant and the City
Engineer to immediately submit the documents needed to support the progress
payments to avoid the issuance of Notice of Suspension.
4. Audit of the payments made for the “Construction of Sports Complex at Barangay
Tagapo, City of Santa Rosa, Laguna” for CY 2015 totaling ₱177,552,127.03 showed
deficiencies and not supported with proper and complete documentation, contrary to
Paragraph 6, Section 4 of PD No. 1445 and Paragraph d, Section 168 of the GAAM,
Volume I, casting doubt on the legality and regularity of the disbursements.
We recommended that the City Mayor direct the City Accountant and the City
Engineer to submit the documents needed to support the progress payment to avoid
the issuance of Notice of Suspension.
In addition, submit proof that the project implementation is on schedule and is
satisfactorily undertaken to support the payments for the substitution of the retention
money.
5. Liabilities amounting to ₱73,492,727.28 were recorded without complete
documentation, contrary to Section 4 (6) of PD No. 1445 and COA Circular No. 97-
004 dated July 1, 1997, hence, casting doubt on the legality, correctness and
reasonableness of expenditure.
We recommended that the City Mayor instruct the Chief Accountant to retrieve and
evaluate all the documents pertaining to the unpaid payables, and submit the related
disbursement vouchers, in compliance with the guidelines of Section 4 (6) of PD No.
1445 and COA Circular No. 97-004 dated July 1, 1997 on recording of liabilities.
6. The actual rate of collection of Real Property Tax (RPT) and Special Education Tax
(SET) of the City increased by 5.53% due to massive tax campaign and effective
collection procedures, thus giving additional funds to finance various projects of the
City. However, the City could have benefited more if it had availed the remedies
provided under 256 of RA No. 7160 to enforce collection of accumulated delinquent
taxes for the years 2013 to 2015 totaling ₱54,817,923.95.
We recommended that Management continue maintaining its collection efficiency
and further enhance its performance thru the conduct of massive information and tax
campaign among its constituents. We also recommended that Management avail the
remedies provided under Section 260 of RA No. 7160 to enforce collection of
delinquent Real Property Tax.
7. The reliability and existence of the recorded inventories totaling ₱45,528,787.42 as of
the end of the year could not be ascertained due to:
a. non-implementation of the perpetual inventory method by the City Government of
Santa Rosa;
b. failure to prepare and maintain the Supplies Ledger Cards (SLCs) by the Office of
the City Accountant (OCA); and
c. failure to prepare and submit the Report on the Physical Count of Inventories
(RPCI) as required under Section 114 of the MNGAS for LGUs, Volume I and
Section 56, Volume II of the same Manual.
We reiterated our prior year’s audit recommendation that the City Mayor direct the
CGSO and OCA to strictly comply with the provisions of the aforementioned
regulations of the MNGAS and require:
a. the Accountant to:
record the purchase of supplies and materials for stock as inventory following
the perpetual inventory method; and
maintain SLC for each commodity/stock for reconciliation with the GL
controlling accounts;
b. the CGSO to:
properly maintain and observe correct recording in the SC for each type of
inventory;
record all receipts and issuances of supplies;
reconcile periodically with the ledger cards of OCA;
prepare and submit regularly the RSMI to the Accounting Unit;
conduct physical count of inventories; and
prepare and submit the RPCPI to the Auditor not later than January 31 of each
year; and
c. the Accountant and the Supply Officer to:
reconcile the RPCI with the GL controlling accounts; and
verify and adjust any discrepancies.
8. Excess of expenses over income in the amount of ₱33,944,484.54 was incurred by the
Santa Rosa Community Hospital (SRCH) in CY 2015 due to the non-realization of its
estimated budget/income and substantial increase of expenditures, particularly on
drug and medicines, and medical, dental and laboratory supplies expenses, giving
negative impression on the effective management of the SRCH operation.
We recommended that the City Mayor require the City Accountant, City Treasurer
and Director of Santa Rosa Community Hospital to coordinate closely in monitoring
the utilization of funds of SRCH, and make sure that all the expenditures are within
the budgeted amount.
We also recommended that the City Mayor, with the assistance of City Accountant,
City Treasurer and Head of SRCH, handle the operations of SRCH with the diligence
of a good father of a family to prevent incurrence of net loss in its financial operation.
Lastly, since the hospital renders the very important health services to its constituents,
consider its actual needs in the budget preparation to determine the subsidy to be
given to SRCH so that it will not incur deficit in its financial statements.
9. Receivables totaling ₱31,809,126.95 from various debtors remained outstanding for
several years due to failure of the City to adopt efficient and aggressive collection
strategies, contrary to Sections 35 and 37 of PD No. 1445, thus casting doubt on the
collectability of the accounts and may further result in the loss of government funds.
We recommended that the City Mayor instruct the City Accountant and the City
Treasurer to institute all possible legal remedies against the concerned accountable
persons. We also recommended that the City Accountant:
issue demand letters and cause the withholding of salary for those defaulting
officers and employees;
determine the breakdown of Self-Employment Assistance Loan Program and
provide and maintain Subsidiary Ledgers of each debtor with outstanding balance
from the said program; and
request the write-off of receivables with no certainty of collection or follow-up
the request if there is a pending request for its writing-off from the Commission
on Audit, with the reminder that all proofs that efforts have been initiated to
collect the same be submitted to the said agency.
Moreover, compel the members of Bagong Pag-asa Neighborhood Association to pay
their outstanding balance, or else foreclose the property pertaining to the defaulting
debtor.
In addition, require the City Cooperative Officer to provide all possible records
relative to the defaulting multi-purpose cooperatives and coordinate with the City
Accountant and the City Treasurer for possible settlement of the long outstanding
receivables.
Lastly, we recommended that the City Government formulate and adopt an effective
policy for its granting and collection of loans and financial assistance to various
individuals or groups.
10. Priority Development Assistance Fund (PDAF) and other funds received from
legislators and other National Government Agencies with an unexpended balances
totaling ₱19,694,914.13 remained in the General Fund books under the Due to Other
NGAs (416) account since CY 2011, in violation of NBC No. 476 dated September
20, 2001 and Section 3 of PD No. 1445, resulting in the overstatement and
understatement of the Due to Other NGAs account in the General Fund and Trust
Fund, respectively, and deprives the national government of the opportunity for the
immediate use of funds for other priority programs had it been returned by the City to
the National Treasury or source agencies.
We reiterated our recommendation that the City Mayor direct the Chief Accountant
to:
effect the necessary adjustments/journal entries in the books of account to present
the correct balance of the Due to Other NGAs account in the General and Trust
Funds financial statements;
review, analyze, and/or reconcile Due to Other NGAs account, together with the
other related accounts in the trial balance, and determine the proper disposition of
the dormant trust funds; and
remit/revert all unexpended/dormant balances to the source agency/National
Treasury so that these can help augment the finances for other priority
projects/programs of the national government or other agencies.
11. Inspection and technical evaluation of the Proposed Construction of Bone and Coffin
Crypt Building (Phase II) and Proposed Construction of City Hall Extension projects
of the City Government showed that the projects were completed beyond the contract
time, thus incurred Liquidated Damages (LD) in the amount of ₱459,742.35 and
₱15,639,362.06, respectively.
We recommended that the City Mayor, thru the City Engineer, inform the contractor
about the incurrence of liquidated damages relative to the projects they had
undertaken with the City Government, and request the payment totaling
₱16,099,104.41.
12. The Annual Investment Plan (AIP) contained programs appropriated in lump-sum
amounts, hindering the proper evaluation of the Fund utilization.
We recommended that the City Mayor instruct the City Planning Development
Coordinator to identify the specific programs and projects relative to the 20%
Development Fund totaling ₱11,945,157.00 in order to validate and evaluate the
utilization of the funds according to existing regulations.
13. Propriety of payments for consultancy services totaling ₱9.24 million could not be
ascertained due to the absence of reports/outputs where the accomplishments of the
consultants could be validated, contrary to Section 4 (6) of PD No. 1445 and COA
Circular No. 2012-001 dated June 14, 2012, Terms of Reference and Contracts of the
Consultant.
We recommended that the City Mayor instruct the Acting OIC of the Human
Resources Management Office (HRMO) and the City Accountant to require the
prompt submission of the consultants’ Accomplishment Reports and see to it that
copies of which are attached to the payroll to support the claims of the consultants.
14. The City appropriated funds from the 20% Development Fund for four
programs/projects totaling ₱7,500,000.00 that did not partake the nature of
investment or capital expenditures, contrary to Item 2.3 of Joint Memorandum
Circular No. 2011-1 dated April 13, 2011, defeating the purpose of the Fund.
We reiterated our recommendation that the City Mayor instruct the City Accountant,
City Budget Officer and the City Planning Development Coordinator to appropriate
and fully utilize the 20% Development Fund exclusively for socio-economic
programs and projects, which are in the nature of investment or capital expenditures
in accordance with the DILG Joint Memorandum Circular No. 2011-1 dated April 13,
2011, for the benefit of the constituents, and to ensure the proper use thereof to
enhance the general welfare of the people.
15. The reliability and existence of the recorded inventories of the Santa Rosa
Community Hospital (SRCH) totaling ₱7,325,267.05 as of year-end could not be
ascertained due to non-implementation of the perpetual inventory method, failure to
prepare and maintain the Supplies Ledger Cards (SLCs) by the Office of the City
Accountant (OCA), while the Stock Card and the Report on the Physical Count of
Inventories (RPCI) prepared and maintained by the SRCH were not in the prescribed
format as required under Section 114 of the MNGAS for LGUs, Volume I and
Section 56, Volume II of the same Manual.
We recommended that the City Mayor direct the Medical Director, SRCH, CGSO and
OCA to strictly comply with the abovementioned provisions of the MNGAS and
require:
the Accountant to record the purchase of supplies and materials for stock as
inventory following the perpetual inventory method, and maintain SLC for each
commodity/stock for reconciliation with the GL controlling accounts;
the SRCH to maintain SC in the required format for each type of inventory and to
record all receipts and issuances of supplies, reconcile periodically with the stock
cards of CGSO and ledger cards of OCA, and prepare and submit regularly the
RSMI to the Accounting Unit;
the Accountant and the Supply Officer to prepare and submit RPCI in the
prescribed format, and reconcile the RPCI with the GL controlling accounts,
verify and adjust any discrepancies; and
the Director of SRCH, CGSO and OCA to coordinate closely in the monitoring of
medical, drugs and dental supplies, materials and all assets of SRCH to have an
accurate and reliable financial statement.
16. Audit of the amount transferred by the Department of Social Welfare and
Development (DWSD) for its Supplemental Feeding Program implemented by the
City showed the following deficiencies:
a. Disbursement for the Supplemental Feeding Program (SFP) implemented by the
City Social Welfare and Development Office (CSWDO) totaling ₱5,424,000.00
was made thru cash advance in the name of the City Treasurer, instead of the
creditors/payees, in violation of Section 93 of PD No. 1445, COA Circular No.
97-002 dated February 10, 1997 and the Implementing Rules and Regulations of
RA No. 9184, thus exposing government funds to risks of loss and/or
misappropriation.
b. Non-withholding of government tax of at least ₱244,285.87 for the purchases of
foodstuff intended for SFP totaling ₱5,424,000.00, contrary to the Bureau of
Internal Revenue (BIR) Regulations No. 2-98 issued on May 17, 1998 and
depriving the government of the much needed funds.
c. Payments were made/processed even without complete documentary
requirements, in violation of Section 4 (6 and 7) of PD No. 1445 and COA
Circular No. 97-004 dated July 1, 1997, thus casting doubt on the correctness and
reasonableness of expenditures.
We recommended that the City Mayor require the CSWD Officer, City Accountant
and City Treasurer to:
refrain from paying the procurement of the program thru cash advance, instead
issue check directly payable in the name of the creditor/payee to whom payment
is due;
strictly comply with the revenue regulation on withholding of taxes for the
procurement of goods and services;
submit liquidation report/disbursement voucher to the Auditor with complete
documentary requirements to prevent the issuance of Notice of Suspension/
Disallowance in audit; and
follow the procurement laws in the purchases of goods and services for the
program.
17. Expenditures totaling ₱4,168,052.17 charged against the Special Education Fund do
not fall within the primary purpose of the Fund, contrary to Section 272 of RA No.
7160 as implemented by DECS, DBM and DILG Joint Circular Nos. 01-B, 01-A and
01 dated June 25, 2001, March 14, 2000 and April 14, 1998, respectively, thus
defeating the purpose for which the Fund was established.
We recommended that the Local School Board officials strictly observe the
provisions of Section 272 of RA No. 7160, DBM Local Budget Circular No. 62 and
DBM Compensation Policy Guidelines No. 98-1 relating to the defined usage or
utilization of the SEF in order to consider the said expenditures allowable in audit.
Likewise, comply with the provisions of DECS-DBM-DILG Joint Circular No. 01, s.
of 1998 in identifying projects/programs and activities chargeable against SEF, where
the budget should reflect an equitable distribution of SEF mandated priority projects.
18. The balance of Accounts Payable as of December 31, 2015 totaling ₱378,688,750.48
included claims amounting to ₱3,946,708.17 which have been outstanding in the
books for two years or more, but were not reverted to the Unappropriated Surplus of
the General Fund, contrary to Section 98 of PD No. 1445, thus these may no longer
represent valid claims, and the validity, existence and correctness of the balance
cannot be relied upon.
We reiterated our previous recommendation that the City Mayor direct the Chief
Accountant to:
determine the legitimacy of the transactions, and if found to be valid claims,
communicate with the concerned payees for the payment/settlement of the
accounts;
revert to the Unappropriated Surplus of the General Fund those that proved to be
with no legal claims; and
conduct periodic review and monitoring of the Accounts Payable account so that
this account will consist only of valid claims against the City Government.
19. Cash balance at year-end of ₱3,624,991.91 of Santa Rosa Community Hospital
(SRCH) was insufficient to cover its current liabilities totaling ₱16,039,309.38, thus
incurring cash deficit of ₱12,414,317.47, contrary to Section 308 of RA No. 7160.
We recommended that the City Mayor require the City Accountant, City Treasurer
and Director of Santa Rosa Community Hospital to coordinate closely in monitoring
the cash balance of SRCH to ensure that enough fund is available to pay its
obligations, and consider different strategies to increase the City’s income, and
intensify collection to cover such deficit.
20. Fund transfers to Non-Governmental Organizations/People’s Organizations
(NGOs/POs) amounting to ₱3,553,120.00 were not supported with complete
documentation, in violation of Sections 4.4 and 4.5 of COA Circular No. 2007-001
dated October 25, 2007, Section 4(6) of PD No. 1445 and COA Circular No. 2012-
001 dated June 14, 2012, casting doubt on the legality and regularity of the grants.
We reiterated our recommendation that the City Accountant strictly adhere to the
provisions of COA Circular No. 2007-001 dated October 25, 2007 on the granting,
utilization and accounting of funds released to NGO/PO, by complying with the
documentary requirements, to ensure their physical and legal existence and financial
condition, otherwise, the said disbursements will be suspended or disallowed in audit.
21. The accuracy of Cash in Bank-Local Currency, Current Account balance shown in
the financial statements at ₱823,316,192.94 could not be determined due to a net
difference of ₱3,115,750.52 noted between the General Ledger and the cashbook,
contrary to pertinent provisions of the GAAM and the MNGAS for LGUs, affecting
the fair presentation of the financial statements.
We reiterated our previous recommendation that the City Accountant and the City
Treasurer regularly reconcile the Cash-in-Bank account balances per ledger and per
cashbooks, and to immediately effect the adjustments/corrections noted therein.
We also recommended that the City Accountant conduct regular verification of the
credit and debit memos issued by the bank, and immediately effect the necessary
adjustments/corrections in the books, otherwise, the said reconciling items will be
considered shortage/overage of the City Treasury. On the other hand, the City
Treasurer immediately inform the City Accountant of the credit and debit memos
issued by the bank to enable the latter to effect the necessary adjustments in the
books.
22. Audit of Job Order (JO)/Casual/Contractual Services disclosed several deficiencies
summarized as follows:
a. The City does not have written policies and guidelines on the procurement of Job
Order services, thus rights and obligations of the City and the JO personnel were
not clearly established, and the risk that different rules and procedures might be
applied to different JO personnel, contrary to a sound system of internal control.
We reiterated our previous recommendation that the City Mayor:
issue and institute standard written policies and guidelines on the hiring of JO
services to categorically establish rights and obligations of the City and JO
personnel and minimize the risk of applying various policies and guidelines in
the hiring of JOs;
observe strictly the implementation of the hiring process for JO personnel,
ensuring that all JO personnel go through the said process and meet the
qualifications required for each position;
consider to integrate in the JO files other documents consisting of other
personal, school or employment records, but not limited to the following: (a)
Birth and Marriage Certificates; (b) Evidence of educational attainment such
as elementary or high school records, diploma and/or transcript of records or
training certificates; (c) NBI Clearance (especially from those who render
security and janitorial services) and; (d) Medical clearance for JOs working in
hospitals, clinics or other related fields to ensure that the right people are hired
for the implementation of the programs of the City;
require JO applicants to undergo reasonable screening process to ascertain
their identity and qualifications, and to make sure that they are not employed
in other local government unit; and
ensure that the hiring of JO personnel is adequately planned, taking into
consideration the need of each Department/Office, the estimated number of
JOs to be hired, their wages and qualifications.
b. Liquidation of cash advances for payments of wages of JO personnel were
processed and disbursed without the required supporting documents, contrary to
Section 4 (6) of PD No. 1445 and COA Circular No. 2012-001 dated June 14,
2012, hence, validity, propriety and legality of the claims could not be
determined.
We reiterated our previous recommendation that Management strictly adhere to
the provisions of Section 4 of PD No. 1445 and COA Circular No. 2012-001, and
attach the required supporting documents for the liquidation of cash
advances/payment for wages of JO personnel.
c. The City Government’s hired casual and JOs totaling 1,464 workers, 1,083 and
381 for casual and JOs, respectively, comprises 57.82% of the City’s total
workforce or 396 (37.08%) more than the City’s permanent employee of 1,068,
thus the existing organizational structure and staffing pattern of the City may not
be appropriate.
We reiterated our previous recommendation that the City Mayor undertake the
following courses of action:
Review and study the current plantilla position to come up with a more
realistic organizational structure for the City, since the existing organizational
structure seems inappropriate based on the current workforce of the City;
Limit the hiring of casuals and JOs to those that are extremely necessary
according to the immediate and actual needs of each Office, with
consideration on the financial capability of the City government; and
Fill-up the vacant plantilla position to hire qualified employees who will
provide the regular services provided by the City.
23. The unexpended Priority Development Assistance Fund (PDAF) balance of
₱329,503.68 and other payables due to National Government Agencies amounting to
₱1,747,776.82 or a total of ₱2,077,280.50 remained in the Trust Fund books since CY
2011, contrary to Executive Order No. 431 dated May 30, 2005, Paragraph 3, Section
122 of the GAAM, Volume I, and Sections 4.9 and 6.7 of COA Circular No. 94-013
dated December 13, 1994, thus depriving the national government of the opportunity
for the immediate use of funds for other priority programs.
We reiterated our previous recommendation that the City Mayor direct the Chief
Accountant to:
review, analyze, and/or reconcile the account, together with the other related
accounts in the trial balance, to determine the proper disposition of these dormant
trust funds;
remit/revert all unexpended/dormant balances to the source agency/General Fund
or Bureau of Treasury so that it can help augment the finances for other priority
projects/programs of the national government or other agencies; and
effect the necessary adjustments/journal entries in the books of account.
24. The account Due from Other Funds under the General Fund with year-end balance
amounting to ₱1,673,732.58 has no corresponding reciprocal account Due to Other
Funds under the Trust Fund, thus rendering the said account unreliable.
We recommended that the City Mayor instruct the City Accountant to prepare
adjusting entries to correct error, for proper presentation of the accounts in the
financial statements.
From now on, strictly adhere to the accounting principles as provided in the MNGAS
to ensure proper presentation of the accounts in the financial statements.
25. The balance of ₱491,624.43 allocated for medical assistance to poor/indigent patients
re: Medical Assistance Program of the Department of Health (MAP-DOH) remained
unutilized as of the end of the year, thus depriving the intended beneficiaries of the
benefits that could be derived therefrom.
We recommended that the City Mayor instruct the person-in-charge of the DOH-
MAP fund to strictly follow the provisions of the Memorandum of Agreement
(MOA) and DOH Administrative Order (AO) No. 2015-0025 dated June 16, 2015,
which does not include the necessity of requiring the patients to obtain endorsement
letters from the representatives to avail the medical assistance.
26. Accountable forms totaling ₱354,413.84 were procured by the City from a private
printer, Ready Forms Incorporated, contrary to the Department of the Interior and
Local Government (DILG) Memorandum Circular No. 2012-32, resulting in irregular
expenditures.
We recommended the refund of the cost of accountable forms totaling ₱354,413.84
purchased from RFI, or justify in writing why the amount should not be disallowed in
audit; and to stop the practice of procuring accountable forms from private printers
not recognized as government printers by the DILG and the Government Procurement
Policy Board (GPPB).
27. Audit of the Motor Vehicles account of the City of Santa Rosa revealed the following
deficiencies that affect the fair presentation of the account in the financial statements,
and casts doubt on the ownership of some motor vehicles:
a. Twenty-one (21) units of motor vehicles (MVs) are not covered with
Acknowledgement Receipts for Equipment (ARE) and one unit had lapsed ARE,
in violation of Section 42 of the MNGAS for LGUs, Volume II and Sections 492
and 493 of the GAAM, Volume I;
b. Thirteen (13) units of MVs were not registered with the Land Transportation
Office (LTO), 29 units had lapsed LTO registration and five units MVs were still
not registered in the name of the City Government of Santa Rosa, depriving the
City Government of full ownership and control over these properties; and
c. Thirteen (13) units MVs were not insured with the GSIS and three units had
lapsed insurance policy, to the disadvantage of the City Government just in case
these vehicles incurred accident.
We reiterated our prior year’s audit recommendations that the City Mayor instruct the
CGSO and the OCA to continue to:
a. issue and renew the AREs of all the motor vehicles owned by the City in
accordance with Section 492 of the GAAM;
b. monitor the registration and insurance of all the motor vehicles and see to it that
all vehicles are registered and insured within the reglamentary period; and
c. cause the transfer of registration of the vehicles not registered in the name of the
Santa Rosa City.
28. Consultancy Contracts were not submitted to the Office of the Auditor within five
working days upon approval, together with the supporting documents for review, in
violation of COA Circular No. 2009-001 dated February 12, 2009. Also, most of the
Consultants have been consecutively in service for more than five years, which
contradicts the definition of a consultant wherein services should be for a short
duration and with a definite output.
We reiterated our previous recommendation that the concerned officials of the City to
reassess the need of hiring consultants, and determine their capabilities based on
proven expertise, experience and capability to avoid unnecessary and excessive
expenditures.
We also recommended that the HRMO Officials continue to update the Personal Data
Sheets (PDSs) of the Consultants, and require certifications on recent seminars and
trainings attended.
Also, prepare the evaluation reports on the Consultants’ services to support the
contract renewal.
We also request the submission of the basis or guidelines being used by the City in its
determination of the rate of honorarium of the Consultants.
29. Verification of the submitted Utilization Report for Medical Assistance Program of
the Department of Health (MAP-DOH) fund prepared by the Office of the Chief of
Santa Rosa Community Hospital showed the following deficiencies, casting doubt on
the validity, propriety and legality of the disbursements made:
a) Sixty-nine (69) Charge Slips amounting to ₱72,132.00 were processed despite the
absence of signatures of the responsible officials/employees;
b) The proof of legitimacy of the claimants were not presented; and
c) The Certificates of Indigency issued by the respective Barangay of the
beneficiaries were not required as additional proof to the eligibility of the
beneficiaries to medical assistance.
We recommended that the City Mayor require the authorized official/employee in-
charge of the preparation of the Utilization Report of the MAP to submit Charge Slips
certified and signed by the proper authorities that the sixty-nine patients were actually
existing and treated. Likewise, validate the submitted documents from any
identification cards presented by the claimants in order to determine the accuracy and
legitimacy of the claims
We also recommended that the City Mayor require the officials/employees concerned
to insist from the claimants the submission of the Certificate of Indigency issued by
the barangay.
30. Out of 41 projects costing ₱125,193,219.80 appropriated for 20% Local Development
Fund, only 35 projects with a total cost of ₱77,663,611.24 or 62.30% were
implemented during the year, thus deprived the constituents of the City of the benefits
they could have enjoyed from the development projects derived from the fund. Also,
low utilization rate of the fund was noted as only ₱46,961,538.84 or 60.47% of
₱77,663,611.24 was paid as of December 31, 2015.
We recommended that the City Mayor require the Planning Development Coordinator
to ensure that prioritized projects under the 20% Development Fund are fully
implemented as planned.
We also recommended that the City Mayor instruct the concerned City officials to
improve the utilization rate of the Fund.
31. Audit of the City Government’s implementation of 2016 planned Gender and
Development (GAD) programs, projects and activities (PPAs) and its compliance
with GAD laws, rules and regulations disclosed the following deficiencies:
a. The implementation of the City’s GAD program/projects/activities during the
year were restricted due to low utilization of GAD Fund and Budget, as only 34%
or ₱35,176,252.95 of the approved budget of ₱103,649,609.00 was expended and
only 21 activities or 36% of the 58 programmed/planned activities for
implementation during the year were either implemented or partially
implemented, thus the intent of GAD on promoting gender-responsive
governance, protecting and fulfilling women’s human rights, and promoting
women’s empowerment as mandated by the policies enumerated in Joint
Memorandum Circular No. 2001-01 of DILG, DBM and NCRFW was not fully
achieved.
We recommended that the City Mayor instruct the GAD Focal Point Team to
fully implement the GAD Plan and Budget and see to it that all expenses incurred
are in accordance with the approved budget by:
strictly monitoring the implementation of the planned GAD program, projects
and activities;
indicating clearly defined target in the “Performance Target” column of the
AGPB to ensure the smooth implementation of the projects;
indicating in the “Actual Result” column of the AGAR the actual
accomplishment for a truthful evaluation and assessment of the activities
implemented; and
seeing that the amount obligated and actual amount utilized are closely
monitored and reconciled, to ensure the reliability of the GAD reports.
b. The City’s GAD Database which will serve as the source of information to serve
as basis for an evidenced-based and gender-responsive planning, programming
and policy formulation for GAD was not yet established, affecting the City
Government’s promotion of gender-responsive governance.
We recommended that the City Mayor instruct the Local GAD Focal Point Team
(LGFPT), LGFPT-TWG and the GAD Focal Point Coordinator to utilize the
existing database, planning and data-gathering tools and management information
system, to generate gender statistics and sex-disaggregated data and other GAD-
related information from primary and secondary sources such as surveys and
studies for the meantime that the GAD Database could not be immediately
established, so that the City will have a source of information for its GAD
planning, programming and policy formulation for GAD.
32. Audit of the City Government’s budget and utilization of Local Disaster Risk
Reduction Management Fund (LDRRMF) and its compliance with laws, rules and
regulations governing the fund disclosed the following deficiencies:
a. The City failed to maximize the utilization of LDRRMF, as only 73% or
₱53,336,210.27 of the approved budget of ₱76,623,813.00 for “Preparedness and
Mitigation (70%)” was utilized, defeating the aims of RA No. 10121, the
“Philippine Disaster Risk Reduction and Management Act of 2010” to strengthen
and develop processes to better prepare and lessen the impact of deadly and costly
natural and man-made hazards and disasters.
We recommended that the City Government, thru its LDRRMC, fully implement
the LDRRMF programs, and see to it that all expenses incurred are in accordance
with the approved budget. In addition, strictly monitor the implementation of the
planned GAD program, projects and activities, to ensure that the plan is fully
implemented. With these, the intent of GAD on promoting gender-responsive
governance, protecting and fulfilling women’s human rights, and promoting
women’s empowerment as mandated could be fully achieved.
b. The City failed to submit the required LDRRMF reports provided under COA
Circular No. 2012-002, giving difficulty in the evaluation of LDRRMF
accomplishment and fund utilization.
We recommended that the LDRRMO comply with the provision and guidelines
set forth in COA Circular No. 2012-002, and prepare and submit all required
reports/documents in the prescribed format within the time frame provided.
c. The City failed to transfer the unexpended balance of the LDRRMF QRF and
DRRMF MOOE to the Special Trust Fund under the account “Trust Liability –
DRRM” (Code 438), contrary to Section 5.1.10 of COA Circular No. 2012-002
dated September 12, 2012, defeating the purposes and objectives of the fund as
stated under RA No. 10121, otherwise known as the Philippine Disaster Risk
Reduction and Management Act of 2010.
We reiterated our recommendations that:
the City Accountant and the Budget Officer determine the actual unexpended
balance of the LDRRMF QRF and DRRMF MOOE for CY 2015;
the City Treasurer transfer the determined amount of unexpended balance of
LDRRMF to the Trust Fund; and
the City Accountant to:
- record the amount transferred to “Trust Liability-DRRM” (Code 438);
- continuously maintain its Subsidiary Ledgers; and
- discuss in detail in the Notes to the Financial Statements the amount and
details of the unexpended balance of LDRRMF.
33. The City Government did not fully comply with the prescribed guidelines for the
implementation of Republic Act No. 9003 dated January 26, 2001, otherwise known
as Ecological Solid Waste Management Act of 2000, resulting in the following
deficiencies, which compromise the efficient and effective discharge by the City
Government of Santa Rosa of its Solid Waste Management functions as provided by
Section 17 of Republic Act No. 7160, thus resulting in negative impact on the
preservation of the environment and health of its citizen:
a. The composition of the City Solid Waste Management Board was not in
accordance with Section 12 of RA No. 9003, thus may affect the formulation of
the Solid Waste Management Plan, and the implementation of the same.
We recommended that the City Mayor form or establish a complete set of Solid
Waste Management Board, pursuant to Section 12 of Republic Act No. 9003 or
the “Ecological Solid Management Act of 2000 for effective formulation and
implementation of the City's Solid Waste Management Plan.
b. Meetings of the City Solid Waste Management Board were not done regularly,
contrary to Item 4, Section 12 of RA No. 9003, thus the implementation of the
Solid Waste Management Plans by the Component Barangays of the City were
not strictly monitored.
We recommended that the City Mayor require the City Solid Waste Management
Board to conduct regular meetings, to ensure that the Component Barangays
support the City in the implementation of the Solid Waste Management Plans, and
to immediately act in case of problems encountered in its implementation.
c. Absence of Multi-Purpose Environment Cooperatives or Association, contrary to,
and defeating the purpose of Section 13 of RA No. 9003.
We recommended that the City Mayor encourage and support the establishment
of Multi-Purpose Environment Cooperatives or Association that will help
promote the implementation of RA No. 9003.
d. The Notice of award, Invitation to Bid or Request of Submission of Price
Quotations for the “Collecting, Hauling and Disposal of Solid Waste of the City”
contract of the City were not posted in PhilGEPS, contrary to the Revised
Implementing Rules and Regulation of Section 54 of Republic Act No. 9184.
We recommended that the City Mayor require the Bids and Awards Committee
(BAC) to strictly comply with the provisions of RA No. 9184 to ensure healthy
competition in the bidding of procurement projects of the City Government.
e. The documentation of the qualification of the contractor awarded the “Collecting,
Hauling and Disposal of Solid Waste of the City” was inadequate, casting doubt
to the ability of the Contractor to efficiently and effectively undertake the
collection, hauling and disposal of wastes generated by the City.
We recommended that the City Mayor require the BAC to strictly require the
submission of the complete Contractor's eligibility documents, evaluate the ability
of the Contractor, and ensure that the bidder's equipment, manpower and other
resources are actually free and not committed to other business interest of the
bidders, to ensure that the awarded Contractor can efficiently and effectively
undertake the collection, hauling and disposal of waste generated by the City.
f. The required volume of garbage collection of 21,569 cubic meters per month was
not met by the Contractor, contrary to Article 3.3 of the contract it entered with
the City Government. Further, the correctness of the volume of garbage collected
cannot be validated due to inadequacy of the documents and information
supporting the claims.
We recommended that the City Mayor direct the CENRO Head to:
establish systematic measures that will assess and measure the performance of
the contractor in the collection, hauling and disposal of solid wastes of the
City Government;
assign personnel that will witness the actual weighing of the waste collected to
ensure that the volume reported were correct;
ensure that the required volume stated in the contract are met and strictly
adhered by the Contractor, and only the exact amount of waste collected are
billed by the Contractor; and
require the Contractor to refund the amount paid equivalent to the
variance/difference of the required volume in the contract against the actual
waste collected for the period July to December, 2015.
g. Six (6) out of the seven Materials Recovery Facility (MRF) located in different
Barangays of the City were non-operational, thus the implementation of waste
segregation at source were not fully implemented.
We recommended that the City Mayor require the coordination of City Solid
Waste Management Board (CSWMB), Barangay Solid Waste Management Board
(BSWMB) and CENRO to:
determine the problems of the non-operational MRF, and require its
repair/rehabilitation to make it operational; and
ensure that all barangays are provided with MRFs that are properly
maintained and operated.
h. The City failed to strictly implement the provisions of the City of Santa Rosa
Environment Code which resulted in improper transfer, processing and disposal
of solid waste, thereby risking the health of its constituents and environment to
the negative effects of pollution.
We recommended that the City Government strictly implement the provisions of
the Environment Code, and impose penalties to those who will be caught
violating the same.
Our observations and recommendations were discussed with the City officials
and employees concerned in an exit conference held on April 29, 2016, and we are
pleased to note their favorable reactions thereon.
Status of Implementation of Prior Year’s Audit Recommendations
Out of the 94 audit recommendations embodied in the 2014 Annual Audit Report,
30 were fully implemented, 42 were partially implemented and 22 were not implemented
by the City Government.