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Executive Summary

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Executive Summary Executive Summary Introduction The Municipality of Laoac is considered as the youngest town of Pangasinan. It is classified as 4th class municipality and composed of twenty-two (22) barangays. The barangays constituting Laoac were all part of the town of Manaoag, Pangasinan because of their proximity with each other. It has a total land area of 4,060.72 hectares or 0.76% of the total area of the Province of Pangasinan. The municipality was created by virtue of Republic Act on March 5, 1980. It is bounded at the north and northwest by Pozorrubio, on the east by Binalonan, on the south by Urdaneta City and on the west by Manaoag, its mother town. Organizational Set – up The Municipality of Laoac, Pangasinan is headed by Honorale Mayor Silverio D. Alarcio, Jr. and the Sangguniang Bayan presided by MunicipalVice Mayor Rogelio P. Godoy. The total work force as of year-end was one hundred twelve (112) personnel, broken down as follows: Elected 11 Co – Terminus 1 Permanent 54 Casuals 20 Job-Orders 14 Contractuals 11 Consultant 1 Total 112 ======== Financial Profile The financial conditions and results of operations of the municipality for the calendar year 2013 compared with that of the last year’s are presented as follows: CY 2013 CY 2012 Increased Percentage (Decreased) (%) Assets 179,694,478.69 179,180,267.51 514,211.18 0.28% Liabilities 48,265,860.19 41,074,874.50 7,190,985.69 17.50% Government Equity 131,428,618.50 138,105,393.01 (6,676,774.51) (4.83%) Income 53,906,806.81 50,018,570.78 3,888,236.03 7.77% Expenses 56,989,219.64 48,698,678.66 8,290,540.98 17.02% Operational Highlights The major and significant accomplishments of the Municipality of Laoac are as follows: Plans/Targets Accomplishment % of Completion 1. Concreting of Barangay Roads 2,000,000.00 2,000,000.00 100% (Funded under the 20% MDF) 2. Farm to Market Road 700,000.00 700,000.00 100% (Funded under DA) LGU Awards For Calendar Year 2013, the Municipality of Laoac received the following awards: • Cleanest, Safest, and Greenest Municipality (Provincial Champion) • Likas Yaman Award For Environmental Excellence (Regional Champion) • Best LGU on Poverty Reduction Program Implementer (Provincial Champion) Scope of Audit The audit covered the accounts and operations of the Municipality for the calendar year 2013 to determine whether management presented fairly the financial statements in adherence to the generally accepted accounting principles; whether prevailing laws, rules and regulations have been complied with; and whether funds were utilized in the most efficient, effective and economical manner. A Financial and Compliance and Value for Money Audit were conducted to achieve these audit objectives. The audit was focused on the common audit thrust areas issued by the COA Local Government Sector for CY 2013 audit on LGUs as provided in COA Memorandum No. 07–2107 dated July 24, 2013. Auditor’s Opinion on the Financial Statements We rendered a qualified opinion on the fairness of the presentation of the Financial Statements of the Municipality of Laoac, Pangasinan for CY 2013 because the validity and existence of the Property, Plant and Equipment of the LGU amounting to P119,983,686.68 cannot be ascertained due to absence of complete physical inventory of all properties of the municipality. The team was not able to apply adequate alternative procedures to determine the validity and reliability of the PPE accounts constituting 68% of the total assets of the agency as, thereby affecting the reliability of the asset accounts. Significant Findings and Recommendations 1. The validity and existence of the Property, Plant and Equipment of the LGU amounting to P119,983,686.68 cannot be ascertained due to incomplete physical inventory. We have recommended the following: 1. The Municipal Mayor should require the Inventory Committee/Team to continue the conduct of physical count of all its properties, reconcile the PPE per inventory report with that of properties recorded in the books and to submit the Inventory Report to the Office of the Auditor as required by the above-mentioned regulations. 2. For the accounting unit to maintain property ledger card to all property, plant and equipment owned by the agency. The Municipal Treasurer to maintain Property Cards per category of property, plant and equipment, as required under Section 119, Vol. I of the NGAS Manual. 2. Collections from various revenues and receipts were not deposited intact to the authorized depository bank of the agency contrary to the provisions of Section 28 of COA Circular No. 92-382 and Section 32 of NGAS Manual, Volume I, thereby exposing government funds to possible loss or misappropriation. We have recommended that the Municipal Treasurer/collecting officer to observe and comply to the provisions of Section 28 of COA Circular No. 92-382 and Section 32 of NGAS Manual, which requires that collections shall be deposited intact with authorized depositories daily or not later than the next banking day. 3. Outstanding cash advances amounted to P897,171.55 as of December 31, 2013, in violation of the provisions of COA Circular No. 97-002, resulting to non-recognition of asset or expenses account. We have recommended to management the following: 1. Strictly observe the provisions of COA Circular No. 97-002 in granting, utilization and liquidation of cash advances and Section 89 of PD 1445 on the limitations of cash advances. 2. Cause the immediate liquidation of all outstanding cash advances especially those outstanding for a long period of time. In case the officials and employees concerned fail to liquidate/settle, apply sanctions as provided under Section 5.1.3 of COA Circular No. 97-002 which states: “Failure of the accountable officer to liquidate his cash advance within the prescribed period shall constitute a valid cause for the withholding of his salary.” 3. Stop the practice of granting additional cash advances to the same officials/employees who have still outstanding cash advance. 4. Refrain from granting cash advances other than the municipal officials and employees and only for the specified purpose as stated in the existing rule and regulations. 4. Real Property Tax (RPT) and Special Education Tax (SET) Receivables at year-end amounting to P4,115,194.23 and P4,507,365.64 respectively, were of doubtful validity in view of the absence of a certified list of taxpayers and the total amount of taxes due as required under Section 20 of the Manual on New Government Accounting System (MNGAS). We have recommended that the Municipal Treasurer in coordination with the Municipal Assessor prepare and furnish the Municipal Accountant with a duly certified list of taxpayers based on RPTAR/Taxpayer’s index card in compliance with Section 20 of the MNGAS and to provide an accurate and reliable basis in setting up of Receivables for RPT/SET. 5. Some of the programs/projects funded out of the 20% Development Fund were not Capital Outlay in nature which were not in consonance with the DILG and DBM Joint Memorandum Circular No. 2011-1 dated April 13, 2011. We have recommended that the Management should implement projects that partake the nature of investment and capital expenditures that contribute to the attainment of desirable socio economic development and environmental management outcomes as stated in the guidelines, in order to attain maximum benefits for which the fund was created. Status of Implementation of Prior Year’s Recommendations Of the five (5) prior year’s audit recommendations embodied in the 2012 Annual Audit Report, three (3) were partially implemented and two (2) remained not implemented. Comments and observations of the Audit Team on the Status of Prior Year’s Audit Recommendations were discussed in detail in part II of this report. .
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