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Executive Summary EXECUTIVE SUMMARY INTRODUCTION The Municipality of Dumingag, formerly a barangay of Molave, was created by virtue of Executive Order No. 283 dated December 27,1957, signed by the late President Carlos P. Garcia with Isidoro Y. Real, Sr, the first mayor. It has a land area of 61,850 hectares of which thirty-two (32%) percent comprised of agricultural lands and composed of 44 barangays. It is located in the eastern part of the Province of Zamboanga del Sur. Dumingag is a 2nd class municipality and is famed as one of the “Cleanest and Greenest Municipality” in Region IX. It is also one of the national winners of the “Sentrong Sigla Program” of the Department of Health (DOH) and UNICEF and named in the Hall of Fame as the “Most Child Friendly Municipality in the Philippines among the 4th – 6th class municipality category in CY 2001. One of the allures of the municipality aside from being clean and green was the full implementation of the Municipal Ordinance No. 004 s. 1997 as amended by Municipal Ordinance No. 029 s. 2001and further amended by Municipal Ordinance No. 004 s. 2003, declaring the entire municipality as a “No Smoking Zone”. With the leadership of the Municipal Mayor, Honorable Nacenciano M. Pacalioga, Jr., the municipality has continued to grow and is on the process of trying to boost the local income by implementing several income generating projects. HIGHLIGHTS OF FINANCIAL OPERATION For calendar year 2010, the budget was sourced from the following income items: Income Amount Percentage Unappropriated balance Tax Revenue P P2,881,659.60 3.64% General Income Permits and Licenses 2,045,000.00 2.58% Service Income 1,245,000.00 1.58% Business Income 1,605,000.00 2.03% Internal Revenue Allotment 70,855,213.00 89.48% Other income 550,000.00 .69% Total Income 79,181,872.60 100.00% To carry out the municipality’s objective, the following appropriations were authorized: Appropriation Amount Percentage Personal services P 34,866,051.16 44.03% MOOE 19,405,922.86 24.52% Capital Outlay 4,071,095.33 5.14% Non-Office expenditure 20% Economic Development 16,671,042.60 21.05% 5% Calamity Fund 4,167,760.65 5.26% Total Appropriations P79,181,872.60 100.00% SCOPE OF THE AUDIT An audit was conducted on the accounts and operations of the Municipality of Dumingag, Zamboanga del Sur as of December 31,2010. The audit consisted of reviewing the operating procedures, inspection of programs and projects, interview of concerned government officials and employees, verification, reconciliation and analysis of accounts, and such other procedures we considered necessary under the circumstances. AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS The Auditor rendered a qualified opinion on the financial statements which are discussed in the attached Report. SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS AND FAVORABLE OBSERVATIONS Favorable Observations The Municipality of Dumingag is one of the “NO SMOKING ZONE” of the Province of Zamboanga del Sur, by virtue of its local ordinance. Under the leadership of Municipal Mayor Nacianceno M. Pacalioga, Jr., it has implemented various livelihood programs utilizing the Dumingag Women’s Association, viz: • Sinamay weaving in cooperation with FIDA and DOLE • Abaca scrunch project which produced bags, table runners and placemats It has also implemented various environmental development projects, viz: • Synchronized clean-up activities for its beautification and sanitation program. • Established and maintained the Ecological Park which showcases the following; - biodegradable composting and material recovery facility in the LGU controlled dumpsite. - Vermi-meal production - MRF building, non-biodegradable shredder and styro-plastic densifier in the recycling facilities for non-bio wastes. • Implemented the Ecological Solid Waste Management program under RA 9003. • Campaigned for sustainable organic agriculture The municipality has also implemented various agricultural related projects, viz: • Rehabilitation of Dapiwak-Sinonok farm to market road • Rehabilitation of Dulop-Salvador farm to market road • Construction of Salvador small water impounding project • Rehabilitation of Manlabay Irrigation • Construction of Lipawan diversion dam • Construction of San Pablo Bagsakan Center • Construction of Lower Landing Farmer’s Center • Construction of Lower Landing BIO-N laboratory building • Construction of Datu Tutukan multi-purpose drying pavement Significant Findings 1. Cash advances remained unliquidated due to management’s non-adherence with the guidelines in the grant and liquidation of cash advances provided under COA Circular 97-002 dated February 10, 1997 thus resulted to the accumulation of a huge balance at year end. Require full liquidation of cash advances as soon as the purpose has been rendered. There should be a full settlement and proper accounting of previous cash advance prior to the approval and release of new/additional cash advances to all accountable officers. Appropriate actions should be instituted against all accountable officers who failed to liquidate their cash advances within the prescribed period. 2. The Inventory Committee failed to conduct physical count of the Property, Plant and Equipment valued at P150,752,139.31 for CY 2010 in violation of the provisions of Section 124 of the New Government Accounting System Manual, thus rendered the accuracy of the account balance doubtful. Further, no reconciliation was made of the property ledger cards of the GSO with the ledger cards of the Accounting Department, as mandated of Section 114 of the NGAS. Require full liquidation of cash advances as soon as the purpose has been rendered. There should be a full settlement and proper accounting of previous cash advance prior to the approval and release of new/additional cash advances to all accountable officers. Appropriate actions should be instituted against all accountable officers who failed to liquidate their cash advances within the prescribed period. 3. The non-adherence of the management to the New Government Accounting System renders its financial statement doubtful and affects the fair presentation. Require the Municipal Accountant to adjust accordingly the deficiencies noted in items a, b and c. Also, the latter is required to support the PPE account with subsidiary schedules. Furthermore, it is required to maintain special accounts for public utilities, 20% development fund and loan of the municipality. 4. Report of Checks Issued (RCI) was not prepared daily contrary to Section 55 of Volume II of the Manual on the New Government Accounting System resulting to the delay in its submission and recording in the books of accounts and precluded early verification and post-audit of the Auditor. Require the Cashier to prepare the Report of Checks Issued (RCI) daily and submit the original copy together with the disbursement vouchers to the office of the auditor in accordance with the guidelines set forth in Section 55 of the Manual on New Government Accounting System. 5. Monthly and quarterly trial balance were not submitted within the reglementary period in violation of Section 70 of NGAS, volume I, resulted to the delayed verification of the said report and may result to the suspension of payment of the salary of the concerned official without prejudice to any disciplinary action that may be instituted against such official or employee. Require the Municipal Accountant, to submit the trial balances according to the provisions of Section 70 of the New Government Accounting System (NGAS), Volume I, to facilitate the immediate submission of the required reports considering that the deadline set had already lapsed. Also, explanation must be submitted by the concerned official why no administrative and/or criminal sanction could be taken against her for failure to comply with the requirements of law. 6. Prior year expenses with a total amount of P180,726.08 not covered by an appropriation ordinance were charged to current appropriation contrary to Section 305 (a) of RA 7160, resulting to losses of government funds and overstatement of current year expenses. Secure a Sangguniang Bayan resolution to authorize the charging of these expenses to the current appropriation. Otherwise it shall be disallowed in post-audit. The municipal government must adhere to fundamental principles in managing its financial affairs, transactions and operations. 7. The Local Chief Executive failed to comply with DILG Memorandum Circular No. 2010-83 dated August 31, 2010 on its responsibility to faithfully adhere to this provision forfeiting the commitment of good governance. Extra effort must be exerted to faithfully adhere of the requirement as mandated under DILG Memorandum Circular No. 2010-83 dated August 31, 2010 which requires “Full Disclosure of Local Budget and Finances, and Bids and Public Offerings”. The Office concerned must be monitored as to compliance made to this effect so for the Local Chief Executive to conform with the requirements of law as specifically directed. 8. The agency failed to prepare and endorsed GAD plan and budget in violation of DBM-, NEDA-NCRFW Joint Circular No. 2004-1, which renders their GAD activity doubtful and will result to the suspension of the cost of its activity. Require the agency to prepare and submit GAD plan and budget to NCRFW to comply with the provisions of law. 9. Disbursements and Collection and Deposits for all funds were not submitted within the prescribed period as mandated under Section 7.3 of COA Circular No. 94-006 dated February 17, 1994 causing delay in the verification of transactions and hinders early detection of errors and/or questionable transactions for adjustments, correction and its possible suspension and/or disallowances. Require the Municipal Accountant to adhere strictly the provision provided under Section 7.3 of COA Circular No. 94-006 dated February 17, 1994. She must submit all transaction documents within the reglementary period so not to obstruct the early action of the Auditor on those transactions. 10. Disbursements for legal services of private lawyer at 15,000.00 per month were made contrary to COA Circular No.
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