Executive Summary

A. Introduction

The Municipality of Midsalip, Province of was created thru Republic Act No. 4871 dated May 8, 1967. It has a total land area of 29,873.4557 Has. The date of fiesta is on March 19 in honour of the Patron Saint Sr. San Jose. Its foundation anniversary is on September 9. It is a 4th class municipality with 33 barangays.

Midsalip prior to its creation was a flourishing settlement under the municipality of . It was later passed on to the municipality of Aurora then to become a part of the jurisdiction of the municipality of Molave. Prior to its becoming a municipality it was a of the municipality of Liargao, now Ramon Magsaysay.

Midsalip is one of the progressive towns in the province of Zamboanga del Sur. Its brandishing riches and fertile land dazed by the gleaming treasures stimulate the people to inhabit the place. It comprises 33 barangays enveloping the heart of the town. These barangays are eventually feeders of treasure being endowed with gems being enjoyed and cherished by the people for their existence.

MIDSALIP. ITS LEGENDARY BACKGROUND. Long before the Japanese occupation and the installation of the Puppet Republic (Second Republic) in the years between 1942-1945, Midsalip has been given the birth by early settlers who migrated into the place. The early settlers were Subanen tribes under the political leadership of Datu Lumbos Guilingan who settled himself at a certain barrio under the municipality of . Datu Lumbos Guilingan was revered by the Subanens and Muslims alike that they would always pay homage to him being the Datu and fearless leader. These early settlers who were scattered in the different places of Midsalip found the name of their place where they lived in, and Midsalip is one of those places given its name as “Migsalip”. Midsalip by its origin was a name given by the Subanens to a river separating lebilop (Bibilop) and Bakahan (Bacahan). It is this river which accumulates all the waters coming from different small rivers and creeks, such as Talipunan River, Guma, Susu-an, Cumarom and Bacahan rivers. Several numbers of creeks eventually become feeders of the water of all these constituent rivers. Migsalip River collects this water and empties it thru Ecuan river, which is seemingly big because it also collects water from big rivers of Migsalip, Canipay, Bakulan and other big rivers. This Migsalip River was subsequently known by almost all settlers who were dwelling therein and also gained its popularity by those people who were visioning to come into this place and share the richness of the place. Datu Guilingan who was then a visiting Datu over his political dominion confirmed it to be the name of the river, but become the founded name Migsalip River and adopted it to be the name of the place as a barangay. Midsalip then was not only the name of the river, but become the name of the place. Migsalip or Magsalip got its name from the river Migsalip. The word Migsalip is a Subanen term, which literally means, “Collect” or “Accumulate”. Others pronounce it as Magsalip or Mocsalip. This is so, because Subanen people deliver it with the hard stress and with glottal difficulty.

It is noted above that early settlers customarily gave the name of the place where they are settling. It follows then that all names given to all the barangays in Midsalip at present were not

i original names one who come in the later years nor insisted changes of them, but rather they are original names given by the early Subanen settlers and subsequently confirmed and adopted by Datu Lumbos Guilingan.

EARLY SETTLERS. Years before the Second World War, several groups of Christians and Subanens migrated into the place. They ventured to come after hearing that Midsalip was a flourishing place for livelihood. These early first settlers were known as the group of Apolonio (Aboan) Lagarnia who arrived in Midsalip in the year 1943, when Midsalip was yet a virgin forest. He was born on May 5,1874 at Sindangan, . Apolonio Lagarnia and his group traveled from Sindangan to Midsalip crossing several mountains, rivers, and hills. His group was met by another travelers who found their way from eastern part of the municipality of . They were the group of Cano Calling and Canuto (Canut) Tosing. They settled themselves at barrio Buloron which accordingly was yet a vast tract of forest that only wild pigs and monkeys were dominating. Subsequently, the groups of Kandong, Antipas, Abelon, Galisandan and Sacandao found their place at Bacahan, Bibilop and Canipay. They inhabited therein peacefully and lived in abundance.

In the year 1948, a group of settlers from Tangub, Misamis Occidental journeyed from Molave passing Liargao and reaching Midsalip. This group guided by the advancement of education was composed of Candido Aljas, Valeriano Balayong, Isidro Macalolo-oy, Alejandro Albor and then they settled themselves in a temporary vinta while overseeing the wonders and treasures of Migsalip. The group started to cultivate the area along with the Subanens. In order to fulfill their desire of owning the vast tract of land, Candido Aljas who was the most educated among the Christian group petitioned the government to release the land to the rightful individual cultivators. Fortunately, the petition was granted by the government and as a result. Engineer Fabian of the Bureau of Lands Stationed at Molave, this province, was sent to the place to conduct the survey and then worked out for the release of the surveyed land to the individual cultivator.

MIGSALIP TO MIDSLIP. In view of the glottal difficulty experienced by the educated group in pronouncing the word Migsalip, they found it with the great ease to pronounce Midsalip than Migsalip.This advancement was brought along with a political steps forward. Reasons for changing was reflected, such that Midsalip is found in a remote place, and it become the rendezvous for travelers who journeyed from , Misamis Occidental, Pagadian then a town to Molave. Midsalip then took to its own substantive meaning, “Mid” means Middle or Center and “Salip” is a rendezvous. The word has its Spanish derivations so that Midsalip partakes the associated meaning of a place for “center of rendezvous” or “center of meeting”.

B. Financial Highlight

The financial condition, results of operation and sources and application of funds of the Municipality of Midsalip, Province of Zamboanga del Sur, for calendars years 2013 and 2012 were as follows:

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Increase CY2013 CY2012 (Decrease) Financial Condition Assets Php 191,812,289.06 Php 181,110,559.56 Php 10,701,729.50 Liabilities 27,517,171.54 24,492,544.19 3,024,627.35 Government Equity 158,386,859.30 146,826,006.19 11,560,853.11 Result of Operations Total Operating Income 69,405,083.23 65,306,053.66 4,099,029.57 Total Operating Expenses 47,717,567.57 43,711,479.23 4,006,088.34 Net Income (Loss) 11,607,632.11 12,232,345.52 (624,713.41) Current Year Appropriation, Allotments,& Obligation Appropriations Allotments Obligations Balance PS Php 46,248,431.56 Php 46,248,431.56 41,076,906.23 5,171,525.33 MOOE 28,756,534.43 28,756,534.43 22,974,996.38 5,781,538.05 CO 979,347.63 979,347.63 810,695.85 168,651.78 Total Php 75,984,313.62 Php 75,984,313.62 Php 64,862,598.46 Php 11,121,715.16

Continuing Appropriation, Allotments,& Obligation Appropriations Allotments Obligations Balance PS Php Php - MOOE 2,392,000.00 2,392,000.00 1,372,914.00 1,019,086.00 CO 858,000.00 858,000.00 568,397.00 289,603.00 Total Php 3,250,000.00 Php 3,250,000.00 Php 1,941,311.00 Php 1,308,689.00

Increase CY2013 CY 2012 (Decrease) Local Taxes Php 5,986,062.36 Php 2,096,915.08 Php 3,889,147.28 Permits & Licenses 73,430.86 174,036.40 (100,605.54) Service Income 84,003.04 128,545.54 (44,542.50) Business Income 3,076,423.84 2,444,816.05 631,607.79 Other General Income 157,038.26 297,171.03 (140,132.77) Internal Revenue Allotment 60,028,124.87 60,164,569.56 (136,444.69)

C. Scope of Audit

The report covered the audit of the financial accounts and operations of the Municipality of Midsalip. The audit is made to ascertained the fairness of presentation of the Municipality of Midsalip’s financial condition as of December 31, 2013 and the results of its operation for the year then ended.

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The audit included review of operating procedures, verification, reconciliation and analysis of accounts, interview with concerned officials and such other procedures which were considered necessary under the circumstances.

D. Auditor’s Opinion on the Financial Statement

The Audit Team rendered a qualified opinion on the financial statements for calendar year 2013. The reason for the exception is discussed in the audit certificate.

E. Significant Observation and Recommendations

1. Cash in vault amounting to P629,357.02 at year end for the three funds were not deposited intact to the depository bank in violation to Section 32 of the Manual on New Government Accounting System, thus exposing it for possible misuse and depriving the LGU of the use of said funds.

Recommendation:

The Municipal Treasurer should follow strictly the provisions cited in Section 32 of the Manual on New Government Accounting System, Volume I which provides that collections should be deposited intact to the depository bank to avoid misuse or losses thru theft and robbery. Reconciliation must be made between the cashbooks maintained by the Municipal Treasurer with the subsidiary ledgers of the Accounting Department every end of the month. The difference of P455,374.79 should be reconciled first before finalizing the financial statements for the month of February, 2014.

2. Settlement of the cash advances in the amount of P3,455,014.60 was not made by the officers and employees of the municipality contrary to the provisions of Section 5.1.3 of COA Circular 97-002 date February 19, 1997 and Section 89 of PD 1445 and COA Circular No. 2012-004, resulting to long outstanding cash advances as of December 31, 2013.

Recommendation:

We further recommend withholding of salaries or any amount due to the concerned officials and employees pursuant to the provisions of COA Circular No. 97- 002 dated February 19, 1997. Immediate liquidation should be made to avoid legal sanctions for non-liquidation thereof as provided under article 217 of the Revised Penal Code which states in unequivocal terms that:” The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he had put such missing funds or property to personal use.”

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Further, Liquidations of cash advances for Intelligence and Confidential Fund should be made within one month from the date the purpose of the cash advance was accomplished and send to COA Manila for issuance of credit advice pursuant to COA Circular No. 2003-003.

3. Out of the 29 bank accounts maintained by the LGU, only five bank accounts were reconciled with the books of accounts in violation to Par.3.2 and 3.4 of COA Circular No. 96-011 dated October 2, 1996, casting doubt on the validity of the Cash in Bank account amounting to P85,242,077.05

Recommendation:

The Municipal Accountant should prepare monthly bank reconciliation statement and submit to the Office of the Auditor together with the paid checks for verification. Prepares immediately Journal Entry Voucher to adjust the reconciling items noted. Those bank accounts with dormant amount should be closed immediately to avoid bank charges.

4. Procurement of drugs and medicine amounting to Php 308,081.42 were not accompanied by a certification signed by the requisitioning officer that the drug products being requisitioned or procured fall within and conform with PNDF Vol. I, current edition in violation of section 2 of EO No. 49 dated January 21, 1993 which may construed as a conduct grossly prejudicial to the best interest of the service.

Recommendation

Submit to this office the certification signed by the requisitioning officer that the drug products being requisitioned or procured fall within and conform with PNDF Vol. I, current edition. And let this be served as a warning pursuant to Rule 76 of the IRR for 1st violation.

5. The Municipal Officials failed to remit tax withheld on goods and services totaling P945,831.84 to the BIR in violation to Section 699, par. 1 of PD 1445 and guidelines set in RA 1051 and 7649, exposing said amount to possible misuse.

Recommendation

Require the government employee designated to prepare and consolidate the remittance of taxes withheld from compensation and goods and services due to BIR monthly in accordance with Section 699, par. 1 of PD 1445 and personally assume any penalty and surcharge due for the late remittances.

6. Appropriations intended for Special Education Fund (SEF) arising from special levy on real property tax during the year and totaling P 248,599.00 was not fully utilized thereby depriving the intended beneficiaries of the expected benefits as provided in Section 100 (b), 272 and 309 (a) of the Local Government Code (RA 7160).

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Recommendation:

The Local Chief Executive, as Chairman of the Local School Board and School Supervisors as co-chairmen should implement the programs and activities as presented in the SEF Work and Financial Plan for the year so that the intended beneficiaries/school children can enjoy the benefits and their educational standards will be uplifted. Failure to implement the said programs defeated the purpose of establishing such fund.

7. Insufficient awareness of the LGU of RA 9003 and its IRR hinders the success of the solid waste management causing harm to the environment.

Recommendation

To address technical capability problems of the LGU, the LGU may asked the expertise of the Department of Science and Technology. If feasible, establish an Office or unit to be in charge solely for the solid waste management services under the Office of the LCE

Conduct information, education and campaign drives on proper segregation of waste on a continuous basis. The LGUs might find the information, education and communications activities from other LGUs that have good practices in solid waste management that will be helpful in addressing the issue of community involvement in solid waste management.

8. The Annual GAD Accomplishment Report of the LGU does not conform to the required format in accordance with Annex B of PCW-DILG-DBM and NEDA Joint Memorandum Circular No. 2012-01 “Annual GAD Planning and Budgeting Guidelines” depriving its constituents and employees of the gender responsive information.

Recommendation

The LGU should strengthen its GFPS, if feasible establish a GAD Office or unit under the Office of the LCE that will support and coordinate all GAD-related PPAs and concerns of the LGU GFPS.

Submit to this Office the required format of accomplishment report and provide a clear cut distinction of the gender issues of the GAD activity

The agency through the GFPS shall regularly assess or monitor if the GAD budget is being spent for what it was intended for and check on the extent and actual cost of implementing the GAD activities.

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The LGU should activate its GAD Focal Point System (GFPS) Executive Committee (Execom), a Technical Working Group and/or a Secretariat pursuant to Section 4.2 of the Circular The GFPS Execom shall be composed of the LCE as the Chair and shall have the LGU Department Heads, Chairs of the Sangguniang Committees on Women, Children and Family, and Appropriation; and representatives from the PNP’s Women’s Desk, Indigenous Peoples, Persons with Disabilities, private sector, academe and recognized and/or accredited non-government organizations as well as women associations as members. The GFPS TWG shall be composed of, but not limited to, key staff from the various LGU Offices/departments or committees represented in the GFPS Execom, including a representative from the LCE’s office, members from the private sector, academe and civil society organizations as appropriate. The GFPS TWG Chair shall be elected from among the GFPS TWG members.

9. Had the LGU enforce the examination of books of accounts pursuant to the Municipal Revenue Code of the Municipal Government of Midsalip the municipality could have collect additional income from business taxes.

Recommendation

The LGU should enforce the examination of books of accounts pursuant to provisions of Municipal Revenue Code.

10. The frequency of posting of reports in conspicuous places within the municipality was not strictly followed by the Municipal Officials in violation of DILG Memorandum Circular No. 2011-08A dated January 13, 2011 and DILG Memorandum Circular No. 2011-134 dated September 19, 2011 thus, defeating the declared policy of the state in promoting good local governance.

Recommendation:

We recommend that the DILG Officer should monitor the compliance of the LGU of the DILG Circulars mentioned above and ensure that the frequency of postings will be strictly followed. Bulletin board placed at the market place should be covered with a sliding glass and should be updated. Transfer to another place the 3rd conspicuous place determined by the LGU at the entrance gate of the elementary school, and bulletin board shall be reconstructed.

11. The LGU failed to post the bid opportunities and other notices in PhilGEPS of various procurement not in accordance with Section 8.2.3 of the IRR-A that shall render the contract null and void and the erring government official/s administratively liable in accordance with RA 6713 and other pertinent laws, rules and regulations, and appropriate sanctions.

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Recommendation

The LGU may send its personnel in charge of the posting to attend trainings or may refer to other LGUs that has technical knowledge in the posting of the required documents as mandated by the IRR of the Law of Procurement.

12. Priority Projects funded out of 20% Local Development Funds for the calendar year 2013 were not fully implemented depriving the constituents timely benefits that could be derived from environmental and socio- economic development.

Recommendation:

It is recommended that the Municipal Engineer shall be advised to hasten the implementation of identified priority projects. If possible, assign additional competent personnel to facilitate early preparation of the detailed engineering design and estimates so that the projects could be implemented as early as possible.

The Local Development Council shall take careful evaluation in identifying priority development projects which could respond to the utmost needs of the community and to avoid project realignment in the future.

13. Accounting and Reporting guidelines in the implementation of Local Disaster Risk Reduction and Management Fund (LDRRMF) set under COA Circular No. 2012-002 dated September 12, 2012 were not properly followed.

Recommendations:

To correct the noted deficiencies, we recommend the following:

1. The LDRRMO shall be instructed to prepare annually the LDRRMFIP in the prescribed format pursuant to par 5.1.2 of COA circular 2012- 002.

The LDRRMFIP shall be reviewed and updated annually to include the activities to be funded from the unexpended QRF and DRRMF-MOOE of the previous years which were transferred to the Special Trust Fund. (par 5.1.15)

2. The Municipal Budget Officer shall be required to maintain a separate Registry of Appropriations, Allotments and Obligations for the LDRRMF for QRF, MOOE and CO.

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3. The Report of Sources and Utilization of LDRRMF shall be prepared and certified correct by the Municipal Accountant and submitted on or before the 15th day after the end of each month to the auditor through the LDRRMC and Municipal Development Council.

14. The unexpended/unobligated balance of Local Disaster Risk Reduction and Management Fund (LDRRMF) for the calendar years 2011 and 2012 totaling P5,032,628.45 transferred from General Fund was not recorded in the Trust Fund book , hence the “cash” account was understated. Likewise, the “liability” account was also understated by the same amount.

Recommendation:

We recommend the following:

1. The Municipal Accountant shall be instructed to record the amount transferred to the Special Trust Fund under the account Trust Liability-LDRRM (Code 438), as shown below:

LGU Books Particulars General Fund Trust Fund 1. Incurrence Dr. Expense or of expense Asset charged to the CR. Accounts LDRRMF Payable or Cash (current appropriations) 2. Transfer of Dr. Subsidy to Dr. Cash unexpended Other Funds Cr. Trust Quick Cr. Cash Liability- Response and DRRM(with Mitigation subsidiary for Funds-MOOE the source at the end of and year) the year

2. Further , the Municipal Accountant shall be advised to transfer the unexpended balance of DRRMF for the calendar year 2013. He shall coordinate with the Municipal Budget Officer to identify the balances intended for 30% QRF and LDRRF-MOOE out of the total amount of P3,100,666.20. A Journal Entry Voucher (JEV)shall be drawn by the former to effect the transfer using the given sample entries. A subsidiary ledger shall be maintained for every year of transfer. However, the unexpended balance for Capital Outlay, if any, shall remained in the General Fund as continuing appropriation pursuant to par. 5.1.11.

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3. All concerned shall be advised to strictly observe the guidelines set in COA Circular No. 2012-002 dated September 12, 2012 in the implementation of its LDRRMF.

15. Human Resources Plan for calendar year 2013, as control measure was not prepared, hence the necessity of hiring personnel thru job orders and contract of services could not be determined.

Recommendation:

1. As control measure, the Human Resource Management Officer shall be instructed to complete the preparation of the Human Resource Plan. This document shall be prepared every year for determination and evaluation of the necessity of the personnel to be hired during the period.

2. Ensure that specific duties and responsibilities are stipulated in the contract of services/MOA or Job Orders to avoid overlapping of responsibilities and functional duplication of works.

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ RECOMMENDATION

We made follow-up on the action taken by the LGU to implement the recommendations of prior years and noted the following:

Status of 2012AAR Implementation Fully none Implemented Partially 9 Implemented Not 8 Implemented Total 17

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