ANNUAL AUDIT REPORT

ON THE

HIMAMAYLAN CITYNEGROS OCCIDENTAL

FOR THE YEAR ENDED, DECEMBER 31, 2010

Republic of the PhilippinesCOMMISSION ON AUDITOffice of the Regional Director

Regional Office No. VIUngka I, Pavia, Iloilo

June 15, 2011

Hon. Agustin Ernesto G. BasconCity Mayor Himamaylan City, Negros Occidental

Sir:

Pursuant to Section 2, Article IX-D of the Philippine Constitution and Section 43(2) of Presidential Decree No. 1445 otherwise known as the “Government Auditing Code of Philippines”, and in line with this Commission’s efforts towards informing Management on how fiscal responsibility has been discharged, we are pleased to transmit the report of our Auditor on her audit on the accounts and operations of the City Government of Himamaylan, Negros Occidental, for the year ended December 31, 2010.

The audit was conducted to ascertain the propriety of financial transactions and compliance of the local government unit to prescribed rules and regulations. It was also made to ascertain the accuracy of financial records and reports, as well as the fairness of presentation of the financial statements.

A value for money audit was likewise conducted to determine whether the local government unit’s programs/projects/activities, and/or the management of its resources had been carried out economically, efficiently and effectively.

We request that the comments and observations contained in the attached report be appropriately acted upon and would appreciate being informed of the actions taken thereon within one (1) month from receipt hereof.

We acknowledge the cooperation and support extended to our Auditor and her staff during the audit.

Very truly yours,

Copy furnished:

Sangguniang PanlungsodCity of Himamaylan, Negros Occidental

The Regional DirectorDepartment of Interior and Local Government, Region VI

The Regional DirectorDepartment of Budget and Management, Region VI

The Regional DirectorBureau of Local Government Finance, Region VI

Republic of the PhilippinesCOMMISSION ON AUDIT

OFFICE OF THE SUPERVISING AUDITORAUDIT GROUP I – PROVINCE OF NEGROS OCCIDENTAL

February 28, 2011

MEMORANDUM FOR:

SALVADOR P. ISIDERIORegional Director IVCommission On AuditRegional Office No. VIUngka I, Pavia, Iloilo

In compliance with Section 2, Article IX-D of the Philippine Constitution and pertinent sections of Presidential Decree No 1445, we conducted a financial and compliance audit on the accounts and operations of the City of Himamaylan, Negros Occidental for the year ended December 31, 2010.

The audit was conducted to ascertain the propriety of financial transactions and compliance of the Local Government Unit to prescribed rules and regulations. It was also made to ascertain the accuracy of financial records and reports, as well as the fairness of the presentation of the financial statements.

A value for money audit was likewise conducted to determine whether the LGU’s programs/projects/activities, and/or the management of its resources had been carried out economically, efficiently and effectively.

Our attached report consists of four parts. Part I contains the Audit Certificate, the Statement of Management Responsibility for Financial Statements, Audited Consolidated Financial Statements and Notes to Financial Statements. Part II presents the Detailed Findings and Recommendations which were discussed with concerned Management officials and staff, for: a) Financial and Compliance Audit, and b) Value

for Money Audit. Part III contains the Status of Implementation of Prior Years’ Audit Recommendations. Part IV presents the Annexes, which includes: a) Financial Statements by Funds, b) Status of Appropriations, Allotments and Obligations, and c) Other Supplementary Schedules and Related Supporting Documents.

There is a reasonable assurance that the financial statements are free of material misstatements and were prepared in accordance with applicable laws, rules and regulations and in conformity with generally accepted state accounting principles.

The LGU still failed to conduct a physical inventory and render a report thereon, of its property, plant and equipment valued at P262,830,952.26 at year end. The inadequacy of its records did not permit us to apply adequate alternative procedures to determine the validity of these accounts. Cash in Bank reconciling items in the total amount of P26,969,368.67 as between general ledger, cashbook, and bank balances continue to distort the fairness of presentation of cash account in the financial statements. Cash advances to Officers and Employees of P4,835,627.58 remained unliquidated as of December 31, 2010. Mobile phones and laptops valued at P4,937,410.20 and P2,427,474.79, respectively, were not physically inventoried to determine its existence. Depreciation expenses were not completely recognized as at year-end for some property, plant, and equipment valued at P3,075,273.13. Nonetheless, the LGU’s transactions were in accordance with generally accepted accounting principles (GAAP).

In our opinion, except for the effect of any adjustments which might have been made had the LGU conducted a physical count of its property, plant and equipment, and reconciled its cash in bank balances as of December 31, 2010, or had the record allowed us to apply alternative procedures, the accompanying financial statements present fairly, in all material respects, the financial position of the City of Himamaylan, Negros Occidental, as of December 31, 2010, and the results of its operations and cash flows for the year then ended in conformity with generally accepted state accounting principles.

Our audit was conducted in accordance with generally accepted state auditing standards and we believe that it provides reasonable basis for the results of audit.

EXECUTIVE SUMMARY

Highlights of Financial Operation

a. Sources and Application of Funds

Actual operating income realized during the year at P415,048,503.59, is P40,325,364.76 or 10.76% higher than last year’s income P374,723,138.83. The increase is attributed to the increase in IRA, collection of local taxes and other income.

Total operating expenditures incurred during the year at P272,777,183.07 is P 47,838,991.68 or 21.27% higher than last year’s expenses at P224,938,191.39.

b. Appropriations

Total appropriation for the year at P571,063,217.89, is 10.42% higher than last year’s appropriation at P517,166,015.41, as shown below:

IncreaseFund 2010 2009 Amount GF P 566,533,256.62 P 512,659,133.14 P 53,874,123.48 SEF 4,529,961.27 4,506,882.27 23,079.00

------------------ ------------------ ---------------------- Total P 571,063,217.89 P 517,166,015.41 P 53,897,202.48 ============ ============ ============

c. Obligations

Of the total obligation incurred during the year at P400,711,532.93, P386,301,861.48 pertained to Current Appropriations, consisting of P 382,759,267.74 from the General Fund and P3,542,593.74 from the Special Education Fund. The amount of P14,409,671.45 pertained to Continuing Appropriations, consisting of P14,332,171.45 from the General Fund and P77,500.00 from the Special Education Fund.

d. Financial Ratios

2010 2009 Increase/ (Decrease)

Current Ratio 7.42:1 16.53:1 (9.11) Net Working Capital P427,492,831.94 P422,888,803.26 P4,604,028.68Quick Ratio 7.39:1 16.46:1 (9.08) Debt Ratio 0.18:1 0.20:1 (0.02) Debt Equity Ratio .06:1 0.06:1 -

Scope of the Audit

A financial and compliance audit was conducted on the accounts and operations of the City Government of Himamaylan, Negros Occidental for the year ended December 31, 2010. The audit was conducted to ascertain the propriety of financial transactions and compliance of the agency to prescribed laws, rules and regulations. It was also made to ascertain the accuracy of financial records and reports, as well as the fairness of the presentation of the financial statements.

A value for money audit was also conducted to ensure economy, efficiency and effectiveness in the carrying out of the City’s plans and targets and/or in the management of its resources.

Auditor’s Opinion on the Financial Statements

The auditor, taking exception on the effect of any adjustments which might have been made had the city conducted the physical count of its property, plant and equipment amounting to P 262,830,952.26 as of December 31, 2010; reconciled its cash in bank balances; and had its fixed assets been completely provided with depreciation expenses, rendered an unqualified opinion on the accompanying financial statements as they present fairly, in all material respects, the financial position of the City of Himamaylan, Negros Occidental, as of December 31, 2010, and the results of its operations and cash flows for the year then ended in conformity with the generally accepted accounting principles.

Significant Findings and Recommendations

1. Expenses incurred in 2009 that were not taken up as accounts payable were charged to 2010 appropriations/budget, in violation of sections 305 (a) and 350 of the Local Government Code of 1991.

The City Treasurer is advised to strictly comply with the provisions of section 305 (a) and 350 of the Local Government Code of 1991, otherwise expenditures of funds in violation of this law shall be a personal liability of the official or employee responsible therefor.

2. Cash In Bank reconciling items on the various accounts of the agency are not properly recorded/effected as of December 31, 2010, thereby distorting the fair presentation of cash account in the financial statements.

Employee in charge in the preparation of monthly bank reconciliation reports should exert efforts in coming up with monthly bank reconciliation reports and in locating reconciling items, and if found to be valid adjustments, should prepare the necessary adjusting/correcting entry for approval of the City Accountant.

3. Cash advances in the amount of P4,835,627.58 were not liquidated pursuant to section 89 of PD 1445.

The City Accountant should require settlement of cash advances granted to officials and employees, and should not allow additional cash advances unless the previous one is first liquidated and accounted for in the books, pursuant to section 89 of PD 1445.

4. Mobile phones and laptops valued at P4,937,410.20 and P2,427,474.79, respectively as of December 31, 2010 were not physically inventoried to determine its fair value. This is notwithstanding the fact that some of these items were already lost by recipients, while other holders had transferred/retired, and some items were no longer serviceable.

We recommend to the General Service Officer to conduct physical count of all mobile phones and laptops issued as of December 31, 2010, and take appropriate action on units that were lost or no longer found in the possession of the accountable officer.

5. Claims for the repair and maintenance of motor vehicles were processed and paid despite deficiencies or lack of the supporting documents hence, veracity of the recorded amount is unreliable.

We recommend to local chief executive to designate a technically skilled personnel to conduct the pre-repair evaluation for all the motor vehicles before the same will be subjected to repair/overhauling and or replacement of parts.

It is likewise recommended that the City Accountant and the City Treasurer shall not certify and pay the transactions, respectively unless the pre-repair inspection report prepared by the duly designated personnel has been conducted and attached to the claim.

6. Depreciation expense was not provided for watercrafts with book value of P3,075,273.13 pursuant to COA Circular No. 2003-007 dated December 11, 2003, thus fixed assets are not fairly presented in the financial statements.

The City Accountant should provide correct depreciation expenses every year pursuant to COA Circular No. 2003-007 dated December 11, 2003, for fair presentation of assets account in the financial statements.

7. Road concreting projects costing P26,960,000.00 which were implemented by administration, and involving delivery of fresh concrete, asphalt sealant and formworks were found to be not favorable for the city government of Himamaylan, as inspection of actual delivery of materials cannot be strictly imposed pursuant to section 4.3.5 of COA Circular 2009-002 dated May 18, 2009.

We encourage and recommend to the City Engineer to resort to itemized materials request rather than fresh concrete and lump-sum delivery of asphalt sealant and formworks, so that proper and timely check of delivery of materials be imposed pursuant to COA Circular No. 2009-002 dated May 18, 2009.

Status of Implementation of Prior Year’s Audit Recommendations

Of the six (6) recommendations advanced in prior year’s report, three (3) were fully implemented, two (2) were partially implemented, and one (1) was not implemented.

TABLE OF CONTENTS

Part I Page No.

Audit Certificate 1 Statement of Management Responsibility 3

for Financial Statements Financial Statements

a. Consolidated Balance Sheet 4b. Consolidated Statement of Income and Expenses 5c. Consolidated Statement of Cash Flows 6

Notes to the Financial Statements 7

Part II

Detailed Findings and Recommendations 14 Financial and Compliance Audit Value for Money Audit

Part III

Status of Implementations of Prior Year’s Audit 22Recommendations

Part IV

Annexes 32

a. Financial Statements by Fundsb. Status of Appropriations, Allotments and Obligationsc. Others

Republic of the PhilippinesCOMMISSION ON AUDITOffice of the Regional Director

Regional Office No. VIUngka I, Pavia, Iloilo

AUDIT CERTIFICATE

HON. AGUSTIN ERNESTO G. BASCONCity MayorHimamaylan CityNegros Occidental

Pursuant to Section 2, Article IX-D of the Philippine Constitution and pertinent provisions of Presidential Decree No. 1445, we have audited the accompanying consolidated balance sheet of the City of Himamaylan, Negros Occidental as of December 31, 2010, and the related consolidated statement of income and expenses and cash flows, for the year then ended. These financial statements are the responsibility of the Himamaylan City’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

Except as discussed in the following paragraph, we conducted our audit in accordance with laws, COA and INTOSAI standards, and applicable Generally Accepted Auditing Standards (GAAS). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides reasonable basis for our opinion.

As presented in our Comments and Observations, the local government unit still failed to conduct a physical inventory and render a report thereon, of its property, plant and equipment valued at P262,830,952.26 at year end. The inadequacy of its records did not permit us to apply adequate alternative procedures to determine the validity of these accounts. Cash in Bank reconciling items in the total amount of P26,969,368.67 as between general ledger, cashbook, and bank balances continue to distort the fairness of presentation of cash account in the financial statements. Cash advances to Officers and Employees of P4,835,627.58 remained unliquidated as of December 31, 2010.

Mobile phones and laptops valued at P4,937,410.20 and P2,427,474.79, respectively were not physically inventoried to determine its existence. Depreciation expenses were not completely recognized as at year-end for some property, plant, and equipment valued at P3,075,273.13. Nonetheless, the LGU’s transactions were in accordance with generally accepted accounting principles (GAAP).

In our opinion, except for the effect of any adjustments which might have been made had the agency conducted a physical count of its property, plant and equipment as of December 31, 2009 or had the record allowed us to apply alternative procedures, the financial statements referred to above present fairly, in all material respects, the financial position of the City of Himamaylan, Negros Occidental, as of December 31, 2008, and the results of its operations and cash flows for the year then ended in conformity with the generally accepted accounting principles.

COMMISSION ON AUDIT

March 30, 2011

Republic of the Philippines

City Government of HimamaylanProvince of Negros Occidental

Statement of Management Responsibility forFinancial Statements

The Management of the CITY GOVERNMENT OF HIMAMAYLAN is

responsible for all information and representation contained in the Balance Sheet as of

December 31, 2010 and the related Statement of Income and Expenses and Statement

of Cash Flows for the period then ended. The financial statements have been prepared

in conformity with generally accepted accounting principles and reflect amounts that

are based on best estimates and informed judgment of management with an appropriate

consideration of materiality.

In this regard, management maintains a system of accounting and reporting

which provides for the necessary internal controls to ensure that transactions are

properly authorized and recorded, assets are safeguarded against unauthorized use or

disposition and liabilities recognized.

Consolidated Balance Sheet

Consolidated Statement of Income and Expenses

Consolidated Statement of Cash Flow

Notes to Financial Statements

1. General/Agency Profile

The City of Himamaylan was made among the sub-division of the Province of Negros Occidental thru Act 2657 dated February 24, 1916 as found under Section 43 of Administrative Code of the Philippine Island. It was reclassified from fourth class to third class municipality on July 1, 1993 in accordance with the provision of section 8 of the 1991 Local Government Code. In 1997, Himamaylan was again reclassified from third class to first class municipality, pursuant to Department Order No. 97-3 (48) dated May 16, 1997 of the Department of Finance. On February 17, 2000, the public hearing was held on House Bill No. 6237 introduced by Congressman Jose Apolinario I. Lozada, Jr., converting the Municipality into a Component City of the Province of Negros Occidental. Finally, on March 5, 2001, Republic Act 9028 was signed into law converting the Municipality of Himamaylan to City of Himamaylan.

The financial statements presented and reported are those of the City Government of Himamaylan, a component City in the Province of Negros Occidental, consisting of the Statement of Income and Expenses, Balance Sheet and Statements of Cash Flows. These financial statements are presented separately for the account of General Fund, the Special Education Fund and Trust Fund with separate books of accounts as required under Section 308 and 309 of the Local Government Code.

The statements have been prepared in accordance with the generally accepted state accounting principles and standards under the New Government Accounting System (NGAS) for the Local Government Units.

2. Basis of Financial Statements Presentation

The Statements have been prepared in accordance with generally accepted state accounting principles and standards as prescribed under the New Government Accounting System (NGAS) for the Local Government Units.

3. Summary of Significant Accounting Policies

3.1 A modified accrual basis of accounting is used. Expenses are recorded when incurred and reported in the financial statement in the period to which they relate. Income is on accrual basis except for transactions when accrual basis is impractical or when other methods are required by law.

3.2 Properties of the Government when used by the general public are accounted for under the Public Infrastructure/Reforestation Projects.

3.3 The Straight Line Method of Depreciation is used in depreciating the Property, Plant and Equipment with estimated useful lives ranging from 5 to 40 years. A residual value computed at 10% of the cost of asset is set and depreciated starts on the second month after the purchase.

3.4 Payable accounts are recognized and recorded in the books of accounts only upon acceptance of the goods inventory/other assets and rendition of services to the LGU.

3.5 The agency is adopting the electronic New Government Accounting System (e-NGAS) Chart of Accounts, and accounts were classified to conform with the new Chart of Accounts prescribed under COA Circular No. 2004-008.

4. Correction of Fundamental Errors

Fundamental errors of prior years are corrected using the prior year’s adjustments account, while errors affecting current year’s operation are charged to the current year’s account.

5. Cash and Other Cash Accounts

This account consists of:Cash in Vault 743,693.79Cash-Disbursing Officer 62,420.00Cash in Bank-Local Currency-Current Account 142,543,310.10Cash in Bank-Local Currency- Savings Deposits 32,524,412.19Cash in Bank-Local Currency-Time Deposit 2,947,877.80Total 178,821,713.88

6. Receivables

This account consists of:Loan Receivables-GOCCs 3,151,700.00Loan Receivables-Others 3,429,239.63Real Property Tax Receivables 205,839,238.99Due from Officers and Employees 2,720.00Due from NGS’s 549,624.76Due from GOCC’s 3,916.60

Due from LGU 227,308.99Due from NGO’s/PO’s 15,227,519.91Due from Other Funds 68,762,791.57Advances to Officers & Employees 4,859,191.58Other Receivables 2,179,322.06Total 304,232,574.09

7. Inventories

This account consists of:

Accountable Forms Inventory 1,914,955.00

8. Prepayments

This account consists of:

Deposits on Letter of Credits 9,164,434.32

9. Property, Plant and Equipment

This account consists of:

BalanceDec. 31, 2009

Net Addition(Reduction)

BalanceDec. 31, 2010

Land 77,619,058.49 - 77,619,058.49Land Improvements 27,527,512.58 (1,572,335.85) 25,955,176.73Buildings 54,335,282.35 (6,701,399.11) 47,633,883.24Office Equip. Fur. & Fixt. 44,828,304.84 (11,266,544.49

)33,561,760.35

Machineries & Equipment 62,647,661.05 (21,759,369.36)

40,888,291.69

Transportation Equipment 44,770,914.50 (13,517,565.86)

31,253,348.64

Other Prop., Plant & Equip 7,442,794.72 (1,523,361.60) 5,919,433.12Public Infrastructures 23,746,856.55 - 23,746,856.55CIP-Public Infra/Ref. 139,703,100.39 76,399,259.28 216,102,359.67CIP-Agency Assets 267,175,054.40 40,932,674.58 308,107,728.98Other Assets 13,285,296.42 - 13,285,296.42

Total 763,081,836.29 60,991,357.59 824,073,193.88

Accumulated Depr. 60,035,434.60 37,051,216.97 77,883,977.23

Total Net Book Value 703,046,401.69 23,940,140.62 746,189,216.65

10. Current Liabilities

This account consists of:

Accounts Payable 50,342,946.77Due to Officers & Employees 100,436.69

Due to BIR 612,586.98Due to GSIS 1,755,064.87Due to PAG-IBIG (20,783.74)Due to Philhealth 16,063.91Due to Other NGAs 1,173,023.54Due to GOCC’s 242,160.59Due to LGU’s 7,717,032.68Due to Other Funds 127,640.80Guaranty Deposits Payable 3,790,132.41Performance/Bidders/Bail Bonds Payable 1,134,142.93Other Payables (373,167.08)Loans Payables-Domestic 59,360,519.39Deferred Real Property Tax/SET Income 207,068,439.02Other Deferred Credits 1,914,955.00Total 334,961,194.76

11. Government Equity

The changes in government equity is provided below:

Government Equity, Beg. 875,621,839.25Add/(Deduct):

Retained Operating-Surplus 119,709,438.53Prior Year’s Adjustments (615,713.71)Transferred to Registry 0.00

Government Equity, End 994,715,564.07

12. Income Accounts

Professional Tax 10,016.80

Amusement Tax 81,458.45Business Taxes 2,259,904.99Community Tax 555,736.90Occupation Tax 100.00Property Transfer Tax 237,247.58Real Property Tax 9,240,446.61

Tax on Sand, Gravel & Other Quarry Products 12,112.50Fines and Penalties-Local Taxes 2,173,062.88Fees on Weights and Measures 14,160.75Franchising and Licensing Fees 290,211.00Permit Fees 1,411,561.03Registration Fees 263,440.00

Clearance and Certificate Fees 452,469.60Garbage Fees 43,080.00Income from Cemetery Operations 274,755.00Income from Markets 820,080.00Income from Slaughterhouses 48,441.00Rent Income 1,093,441.50Fines and Penalties-Business Income 175,610.25Income from Grants and Donations 105,510.85Interest Income 2,919,537.52Internal Revenue Allotment 390,655,749.00Share from PAGCOR/PCSO 953,025.80Miscellaneous Income 1,457,826.51Other Fines and Penalties 376,890.33Total 415,925,876.85

13. Expenditure Accounts

Salaries and Wages - Regular 43,724,901.05Salaries and Wages – Casual 40,302.00

Personnel Economic Relief Allowance (PERA) 7,769,052.39Additional Compensation (ADCOM)Representation Allowance (RA) 1,785,690.00Transportation Allowance (TA) 1,701,450.00Clothing/Uniform Allowance 1,314,000.00Subsistence, Laundry and Quarter Allow. 1,040,815.00Productivity Incentive Allowance 466,000.00Other Bonuses and Allowances 977,300.00Honoraria 40,220.00Hazard Pay 1,534,661.56Overtime and Night Pay 3,263,008.52Cash Gift 1,665,000.00

Year End Bonus 3,768,311.00Life and Retirement Ins. Contributions 5,192,632.64Pag-ibig Contributions 386,887.50Philhealth Contributions 519,376.34ECC Contributions 325,274.41Terminal Leave Benefits 566,286.51Other Personnel Benefits 13,529,886.00Travelling Expenses-Local 5,551,989.74Training Expenses 3,873,795.98Scholarship Expenses 1,642,580.00Office Supplies Expenses 5,060,462.70Accountable Forms Expenses 235,110.00Food Supplies Expenses -

Drugs and Medicines Expenses 2,021,479.82Medical, Dental & Lab. Supplies

Expenses842,300.68

Gasoline, Oil and Lubricants Expenses 18,241,517.02Agricultural Supplies Expenses 1,900,097.95Other Supplies Expenses 13,164,703.64Water Expenses 2,303,971.50Electricity Expenses 15,341,197.52Cooking Gas Expenses 2,396.00Postage and Deliveries 8,000.00Telephon Expenses-Landline 674,039.33Telephone Expenses – Mobile 352,098.00Membership Dues and Contr. to Org. 544,000.00Advertising Expenses 136,153.00Rent Expenses 4,900.00Subscriptions Expenses 47,754.00Consultancy Services -Environment/Sanitary Services -Security Services 480,000.00Other Professional Services 190,300.00Repairs & Maint.-Land Improvements 36,039.00

Repairs & Maint.-Elect., Power & Energy Structures 5,702,193.78 Repairs & Maint.-Office Buildings 1,918,287.00 Repairs & Maint.-School Buildings 2,813,375.53 Repairs & Maint.-Hospital & Health Centers 440,173.15 Repairs & Maint.-Markets & Slaughterhouses 569,568.44 Repairs & Maint.-Other Structures 2,877,401.72 Repairs & Maint.-Office Equipment 141,532.00 Repairs & Maint.-Furniture and Fixtures 44,936.50 Repairs & Maint.-IT Equipment & Software 281,842.00 Repairs & Maint.-Communication Equipment 8,682.00 Repairs & Maint.-Construction & Heavy Equipment 3,154,642.00

Repairs & Maint.-Firefighting and accesories 112,330.00 Repairs & Maint.-Other Machineries & Equipment 58,357.00 Repairs & Maint.-Motor Vehicles 7,658,593.92 Repairs & Maint.-Watercrafts - Repairs & Maint.-Other Property, Plant & Equipment 590.00 Repairs & Maint.-Roads, Highways and Bridges 5,604,466.51 Repairs & Maint.-Parks, Plazas and Monuments 1,061,172.50 Repairs & Maint.-Art. Wells, Res., PS & Conduits 700,255.76 Repairs & Maint.-Irrigation, Canals and Laterals 219,137.75 Repairs & Maint.-Flood Controls 8,488.00 Repairs & Maint.-Other Public Infrastructures 254,316.09 Subsidy to Local Government Units 50,000.00 Subsidy to NGO’s/PO’s 2,200,000.00 Donations 20,440,956.84

Confidential Expense 150,000.00 Miscellaneous Expense 4,572.16 Taxes, Duties and Licenses 341,903.64 Fidelity Bond Premiums 123,566.25 Insurance Expenses 1,888,867.23 Depreciation-Land Improvements 144,203.16 Depreciation-Electrification, Power & Energy Structures 556,000.50 Depreciation-Office Buildings 203,906.52 Depreciation-School Buildings 1,122,662.72 Depreciation-Hospital and Health Centers 60,480.92 Depreciation-Market and Slaughterhouses 359,297.40 Depreciation-Other Structures 510,667.68 Depreciation-Office Equipment 1,599,746.61 Depreciation-Furniture and Fixtures 1,156,300.67 Depreciation-IT Equipment 1,619,443.09 Depreciation-Library Books 547,536.37 Depreciation-Machineries 153,364.44 Depreciation-Communication Equipment 881,817.52 Depreciation-Construction & Heavy Equipment 3,844,328.45 Depreciation-Firefighting Equip. & Accessories 192,386.54 Depreciation-Medical, Dental & Laboratory Equipment 364,237.88 Depreciation-Military and Police Equipment 26,581.32 Depreciation-Sports Equipment 42,355.54 Depreciation-Technical & Scientific Equipment 71,648.64 Depreciation-Other Machineries & Equipment 550,549.96 Depreciation-Motor Vehicles 2,546,601.89 Depreciation-Watercrafts 1,199.84 Depreciation-Other Transportation Equipment 19,253.52 Depreciation-Other Property, Plant & Equipment 354,051.43 Discount on Real Property Taxes 771,862.41 Other Maintenance & Other Operating Expenses 51,563,647.01

Interests Expenses 5,818,077.72 Other Financial Charges 61,644.00

Total 296,240,002.32

PART II – FINDINGS AND RECOMMENDATIONS

2. Expenses incurred in 2009 that were not taken up as accounts payable were charged to 2010 appropriations/budget, in violation of sections 305 (a) and 350 of the Local Government Code of 1991.

Section 305 (a) of the Local Government Code of 1991 provides that, “No money shall be paid out of the local treasury except in pursuance of an appropriation ordinance or law.” Further, section 350 of the said code states that, “All lawful expenditures and obligations incurred during a fiscal year shall be taken up in the accounts of that year.” For the month of January 2010, the following are contracts/expenses that were incurred in 2009 but were paid out of CY 2010 appropriations:

Acct. Code

Account Name Amount

221 Office Equipment 31,900.00223 IT Equipment & Software 106,590.00755 Office Supplies Expenses 64,460.25765 Other Supplies Expenses 67,160.00805 Repairs & Maint.-Elctr., Power & Energy Structures 281,725.00811 Repairs & Maint.-Office Buildings 84,892.00815 Repairs & Maint.-Other Structures 96,078.00851 Repairs & Maint.-Roads, Highways & Bridges 9,514.50852 Repairs & Maint.-Parks, Plazas & Monuments 32,883.00854 Repairs & Maint.-Artesian Wells, Res., PS & Conduits 94,883.92

Total P870,086.67 The payment of these 2009 expenses out from CY 2010 budget ordinance are not in pursuant to an appropriation law and violative of existing rules and regulations.

The City Accountant explained that these 2009 expenses were actually back up with funds when he classified it to appropriated retained earnings upon closing of the books in 2009. Only that, these were not taken up as accounts payable since specific creditors and actual amount could not be determined yet that time. He

further explained that for those 2009 expenses which were charged to current budget, he will just correct it by charging the same to prior year’s adjustments.

Recommendation

The City Treasurer is advised to strictly comply with the provisions of section 305 and 350 of the Local Government Code of 1991, otherwise expenditures of funds in violation of this law shall be a personal liability of the official or employee responsible therefor.

3. Cash In Bank reconciling items on the various accounts of the agency are not properly recorded/effected as of December 31, 2010, thereby distorting the fair presentation of cash account in the financial statements.

Local treasurers, accountants and other local accountable officers shall render their accounts within such time, in such form, style, and content and under such regulations as the Commission on Audit may prescribe. (Section 347, R.A. 7160)

At the close of each month, depositories shall report to the agency head, in such form as he may direct, the condition of the agency account standing on their books. The head of the agency shall see to it that reconciliation is made between the balance shown in the reports and the balance found in the books of the agency.

We verified the various bank reconciliation reports of the agency and disclosed that already identified reconciling items were not adjusted/effected in the books. Presented below are the discrepancies noted on the ledgers, cashbooks, and bank reconciliation reports balances:

Balances As PerFund & Account Bank Ledger Cashbook Bank Remarks

(Unadjusted) (Unadjusted) Statement General Fund

C/A#060110700140 Postal Bank

32,758,836.28 25,377,085.54 34,518,293.99 As per bank reconciliation report, adjusted balance of book and bank is P33,040,057.07.There is a reconciling amount of P7,662,971.53 as between cashbook and ledger.

C/A#1172-1020-14 LBP 94,348,867.72 59,765,415.04 85,076,839.90 As per bank reconciliation report, adjusted balance of book and bank is P75,740,485.91.There is a reconciling amount of P15,975,070.87 as between cashbook and adjusted ledger balance.

C/A#0745-016750-030 DBP 6,647,514.46 6,395,681.55 6,395,681.55 Bank reconciliation report was not sub-mitted.

Savings AccountThere is a reconciling difference of P158,960.22 as between ledger and bank balances.

S/A#1171-1092-01 LBP 12,437,384.20 12,437,384.20S/A#1171-0023-00 LBP 1,688,242.07 1,688,242.07S/A#0745-016751-160 DBP 18,557,746.14 18,557,746.14

Total 32,524,412.19 32,683,372.41 32,683,372.41

SEF FundC/A#06011-070015-9 Postal

Bank5,076,318.71 4,732,718.77 - Bank reconciliation

report was not sub-mitted.

There is a reconciling difference of P343,599.94 as between ledger and cashbook balances.

S/A#0745-016752-530 DBP 180,059.15 180,059.15 - There is no Cash in Bank-S/A balance in the trial balance of SEF.

Trust FundC/A#060110700-205 Postal

Bank3,711,772.93 3,453,505.15 - Bank reconciliation

report was not sub-mitted.

There is a reconciling difference of P258,267.78 as between ledger and cashbook balances.

Time Deposit#1173- LBP 569,493.75 571,386.69 571,386.69 There is a

0009-32 reconciling difference of P1,892.94 as between ledger and cashbook balances.

S/A#2898376406000017 PNB 2,388,546.24 2,388,546.24 - There is no Cash in Bank-S/A balance in the trial balance of Trust Fund.

The non-submission of monthly bank reconciliation reports and inability of the accounting office to determine and identify these reconciling items, continue to distort the cash in bank balances thus, created doubts on the fair presentation of this account in the financial statements.

Recommendation

Employee in charge in the preparation of monthly bank reconciliation reports should exert efforts in coming up with monthly bank reconciliation reports and in locating reconciling items, and if found to be valid adjustments, should prepare the necessary adjusting/correcting entry for approval of the City Accountant.

4. Cash advances in the amount of P4,835,627.58 were not liquidated pursuant to section 89 of PD 1445.

Section 89 of PD 1445 provides that, “No cash advance shall be given unless for a legally authorized specific purpose. A cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served. No additional cash advance shall be allowed to any official or employee unless the previous cash advance given to him is first settled or a proper accounting thereof is made.”

Section 339 of the Local Government Code of 1991 also provides that,

“No cash advance shall be granted to any local official or employee, elective or appointive, unless made in accordance with the rules and regulations as the Commission On Audit may prescribe.”

The unliquidated cash advances of the City of Himamaylan as of December 31, 2010 amounted to P4,835,627.58, or higher by P573,164.51 as compared to last year unliquidated cash advance of P4,262,463.07. While previous year’s cash advances in the amount of P4,181,390.58 were liquidated/settled after the service of demand letters to concerned officers and employees, the current balance however, is still higher as compared to last year because most of this year’s

cash advances remained unsettled as at year-end, contrary to section 89 of PD 1445. Recommendation

The City Accountant should require settlement of cash advances granted to officials and employees, and should not allow additional cash advances unless the previous one is first liquidated and accounted for in the books, pursuant to section 89 of PD 1445.

5. Mobile phones and laptops valued at P4,937,410.20 and P2,427,474.79, respectively as of December 31, 2010 were not physically inventoried to determine its fair value. This is notwithstanding the fact that some of these items were already lost by recipients, while other holders had transferred/retired, and some items were no longer serviceable.

When government funds or property are transferred from one accountable

officer to another, or from an outgoing officer to his successor, it shall be done upon properly itemized invoice and receipt which shall invariably support the clearance to be issued to the relieved or out-going officer, subject to regulations of the Commission. (Section 77, PD 1445)

On the other hand, section 124 of the New Government Accounting System Manual, Volume I, provides that, “The local chief executive shall require periodic physical inventory of supplies and property. Physical count of inventory items by type shall be conducted semestrally and reported in the Report of the Physical Count of Inventories (RCPI). This shall be submitted to the Auditor concerned not later than July 31 and January 31 of each year for the first and second semesters, respectively.

Physical count of property, plant and equipment by type shall be annually and reported on the Report on the Physical Count of Property, Plant and Equipment (RPCPPE). This shall be submitted to the Auditor concerned not later than January 31 of each year.”

While it is incumbent upon the General Services Officer to conduct physical count of the property, plant and equipment of the city, and submit the corresponding physical inventory reports to the Auditor every end of the accounting year, we noted that this was not done timely this year, most especially to mobile phones and laptops which can just be personally carried from place to place and from one person to another. This is notwithstanding the reports we received that some of these items were already lost by recipients, while other holders were transferred/retired from the service, and some of these items were no longer serviceable. Based on the data we gathered, so far, the city government of Himamaylan had purchased 518 units of mobile phones and 51 laptops as of December 31, 2010, with total book value of P7,364,884.99. These numbers per

subsidiary ledgers of the city does not, however reconciled with the number of accountable officers who were issued a memorandum receipt. (Annex C)

Recommendation

We recommend to the General Services Officer to conduct physical count of all mobile phones and laptops issued as of December 31, 2010, and take appropriate action on units that were lost or no longer found in the possession of the accountable officer.

6. Claims for the repair and maintenance of motor vehicles were processed and paid despite deficiencies or lack of the supporting documents hence, veracity of the recorded amount is unreliable.

Pursuant to section 6.08 of COA Circular No. 95-006, the agency is required to conduct the pre-repair evaluation of the subject vehicle before the actual repair is undertaken. This is necessary in order for the management to determine the extent of work to be undertaken and make an estimate of cost of repair in making job request. This will also guide the management to determine whether the repair/overhauling/parts replacement of the subject vehicle is economical and necessary based on cost analysis.

Section 4(6) of Presidential Decree 1445, also provides that, “Claims against government funds shall be supported with complete documentation.”

Repair and maintenance of motor vehicles amounting to P7,658,593.92 were made possible even without the required pre-repair evaluation. In almost cases of repair, the following common observations were noted:

1. No pre-repair inspection was conducted 2. Purchase Requests (PRs) and Purchase Orders (Pos) were not

completely and properly accomplished.3. Price Quotations were not properly filled up as to date4. Some Delivery Receipts were not dated as to date of delivery.5. Inspection and Acceptance Reports were not properly accomplished

as to date of inspection and acceptance.6. In some cases, the date of the delivery receipts is ahead than the date

of the Purchase Order7. No Report of Waste Materials for parts replaced/pulled-out.8. No scope and duration of work stated in the labor contract.9. There were no plans and specifications for the body repair, painting

and re-upholstery of car seats.

The absence of these requisites renders the transactions doubtful and unreliable.

Recommendation

We recommend to local chief executive to designate a technically skilled personnel to conduct the pre-repair evaluation for all the motor vehicles before the same will be subjected to repair/overhauling and or replacement of parts.

It is likewise recommended that the City Accountant and the City

Treasurer shall not certify and pay the transactions, respectively unless the pre-repair inspection report prepared by the duly designated personnel has been conducted and attach to the claim.

7. Depreciation expense was not provided for watercrafts with book value of P3,075,273.13 pursuant to COA Circular No. 2003-007 dated December 11, 2003, thus fixed assets are not fairly presented in the financial statements. COA Circular No. 2003-007 dated December 11, 2003, was issued to

provide policies and guidelines on the computation of depreciation of government property, plant and equipment for allocating the same over their useful life and fair presentation of the financial statements.

It was provided in the said circular that the straight-line method of computing the depreciation for government property, plant and equipment shall be adopted, and that a residual value equivalent to ten percent (10%) of the acquisition cost/appraised value shall be deducted before dividing the same by the estimated useful life.

We noted in the review of the financial statements of the city that depreciation expense for watercrafts with book value of P3,075,273.13 was not provided. For the past years, recorded accumulated depreciation was only P1,199.84.

Since the city government of Himamaylan is e-NGAS user, according to the officer in charge of the system, this is one aspect of the system that requires upgrading since monthly/yearly depreciation expenses are not automatically generated.

Recommendation

The City Accountant should provide correct depreciation expenses every year pursuant to COA Circular No. 2003-007 dated December 11, 2003, for fair presentation of assets account in the financial statements.

.

8. Road concreting projects costing P26,960,000.00 which were implemented by administration, and involving delivery of fresh concrete, asphalt sealant and formworks were found to be not favorable for the city government of Himamaylan, as inspection of actual delivery of materials cannot be strictly

imposed pursuant to section 4.3.5 of COA Circular No. 2009-002 dated May 18, 2009.

Section 4.3.5 of COA Circular No. 2009-002 dated May 18, 2009, provides that, “Inspections of construction project accomplishments shall be mandatory on the payment for the first and last progress billings. The Auditor may, however, conduct random on-the-spot inspection of on-going infrastructure projects or request inspection of project at any time he may deem necessary.”

Implementation of road concreting projects of the city government of Himamaylan, are most often times done by administration, wherein the usual materials included in the purchase order for delivery are as follows:

Fresh Concrete @ P4,330.00 per cubic meter 16mm diameter x 6.0m RSB Asphalt Sealant (not quantified per item but contractor is paid on lump sum

amount) Formworks (not quantified per item but contractor is paid on lump sum

amount)

For calendar year 2010, eighteen (18) road concreting projects with a total project cost of P26,960,000.00 were implemented by the City Engineer’s Office of Himamaylan (Annex D). These projects were all subjected to pre-audit pursuant to COA Circular No. 2009-002 dated May 18, 2009, and in all cases, result of inspection of COA Technical Specialist disclosed the following observations:

The delivered construction materials cannot be quantified since they were already applied in the project at the time of inspection;

No test result for fresh concrete; Traversal crack was noted; Formworks materials used in the project should be itemized and shall be

properly accounted and turned over to the property custodian Asphalt sealant applied to the project shall be itemized instead of lump

sum payment to contractor

Our review of the supporting documents to these projects likewise disclosed that claims for the payment of materials, claims for the payment of labor, and claims for the payment of equipment rental are sometimes not reconciled, specifically the dates and the duration of project implementation, thus showing delays in the accomplishment.

Although management finds this manner of implementation easier and simple, it is however not favorable considering the many adverse observations noted in audit due to audit techniques used in checking the project, like inspection cannot be strictly imposed.

Recommendation

We encourage and recommend to the City Engineer to resort to itemized materials request rather than fresh concrete and lump sum amount delivery of asphalt sealant and formworks, so that proper and timely check of delivery of materials be imposed pursuant to COA Circular No. 2009 dated May 18, 2009.

PART III - STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT RECOMMENDATIONS

Audit Observation Recommendation Ref Management ActionStatus of

ImplementationReason for

Partial/ Non-Implementation

1. Of the P40,770886.37 balance for Motor Vehicles account as of December 31, 2009, P18,031,472.62 of which is unreconciled figure. This is due to some motor vehicles were recorded in the books even without Certificate of Registration, while other that have Certificates of Registration were not recorded as part of the agency’s asset.

The General Services Office and the Accounting Department should initiate appropriate reconciliation of the various Motor Vehicles with Certificate of Registration but were not recorded in the books, and those motor vehicles which were recorded in the books of the agency but have no CR.

AAR2009

The effort of the management to reconcile the figures is on-going.

Not Implemented.

Non-availability of needed documents.

2. Disbursements for the repair and maintenance of motor vehicles for CY 2009 in the aggregate amount of P8,749,824.35 were processed and paid despite deficiencies or lack of supporting documents, in violation of section 4 (6) of PD 1445, thus veracity of the amount is unreliable.

We recommend that the local chief executive shall designate technically skilled personnel to conduct the pre-repair evaluation for all the motor vehicles, before the same is subjected to repair/overhauling and or replacement of parts.

AAR2009

Management requires pre-repair evaluation report as one of the supporting documents to the transaction for repair.

Implemented.

3. Net reconciling items for book balance amounting to P6,039,982.38 for the General Fund with Land Bank of the Philippines remained unadjusted making the cash in bank account overstated.

We recommend that the BRS for the General Fund, the Special Education Fund, and the Trust Fund with the Philippine Postal Savings Bank shall be submitted immediately in order to determine all valid reconciling items, so that appropriate adjustments can be taken up in the respective books of account.

We further recommend that the amounts of loan amortization which were auto-debited by the bank from the agency cash in bank balance shall be properly recorded in the books.

AAR2009

Submitted the BRS as of December 31, 2010, only for Savings Account.

Bank reconciliation reports for current accounts not yet submitted as of this writing.

PartiallyImplemented.

Bank statements from the depository banks not yet available.

4. The City failed to implement a general revision of real property assessment, as required under Section 219 of Republic Act 7160 (RA 7160), thus depriving the local government unit of additional revenues which may be used to finance priority projects that will benefit the constituents.

We recommend that the City Assessor shall comply the provision of Section 219 of RA 7160. General revision of assessments and property classification shall be done with urgency to augment revenues of the city which may be used to finance priority projects that will benefit its constituents.

AAR2009

The City Assessor’s Office is in the process of implementing the general revision of real property assessment by year 2012.

PartiallyImplemented.

5. Reports of monthly fuel consumption of government motor vehicles were not prepared and submitted to the Office of the Auditor in violation of the pertinent provisions of Section 361 of the Government Accounting and Auditing Manual (GAAM) Volume I and COA Circular No. 77-61

We recommend that the Office of the General Services shall cause the accomplishment and submission of the Monthly Report of Fuel Consumption and computation of gasoline consumption in compliance with the provision of Section 361 Volume 1 of the GAAM and COA Circular No. 77-61 to enhance management information for effective conservation and proper utilization thereof.

AAR2009

Management submitted the Monthly Reports of Fuel Consumption, as required.

Implemented.

6. Contracts, Purchase Orders and the like are not furnished to the Auditor, within five (5) working days from its execution, contrary to Commission On Audit Circular No. 2009-001 dated February 12, 2009, thereby forfeiting its purpose of implementing a systematic and effective review process with a view of generating timely and relevant audit results.

The City Mayor as Head of Local Government Unit should require concerned officials and employees to strictly comply with the requirements of furnishing the Auditor a copy of government contracts, purchase orders and their supporting documents within five (5) working days from its execution to avoid sanctions provided under COA Circular No. 2009-001 dated February 12, 2009.

AAR2009

The Auditor is now being furnished by the management of the contracts, purchase orders and their supporting documents.

Implemented.

7. The balances of Property, Plant and Equipment (PPE) accounts totaling P105,381,789.25 remained doubtful due to the inability of the management to conduct physical inventory, maintain property ledger/cards and reconcile records of the City Accountant’s Office and General Services Office, contrary to Sections 119, 120 and 124 of NGAS Manual, Vol. 1.

We recommend that the City Mayor issue an Executive Order creating an inventory committee, instructing them to conduct the physical inventory taking of the properties owned by the city. The inventory taking shall be made as of December 31 and an inventory report shall be prepared in General Form 41(A) and submitted to Auditor not later than January 31 of each year.

The General Services Office and the Accounting Office shall religiously maintain property cards and property ledger cards, respectively. Both records shall be reconciled by them.

AAR2008

Inventory Report for CY 2009 is not yet submitted.

Not Implemented.

Still in the process of complying.

8. Cash Advances totaling P2,605,234.00 were not fully liquidated at year end contrary to the provisions Civil Service Commission (CSC) Resolution No. 040676 dated June 17, 2004.

We recommend that the City Mayor shall require all accountable officers to liquidate their outstanding cash advances, especially those which remained outstanding for over one (1) year, and to enforce strictly the stated provisions of law.

AAR 2007

A Memorandum was issued to the City Accountant.

Partially Implemented.

Personnel with outstanding cash advances were not given additional cash advances, yet cash advance were not fully liquidated as of year-end.

We likewise recommend that management shall cause the immediate and full settlement of prior years’ cash advances and ensure that the salaries of these accountable officers are withheld when no liquidation is made after January 20, 2008 to conform to Section 5.9 of COA Circular No. 97-002, as stated.

We further recommend that the Accountant submit the Liquidation Vouchers together with the Report of Disbursements and its supporting documents necessary for us to complete the audit of prior year’s and current cash advances pursuant to the provisions of the above stated circular, and

We also recommend that the Accountant should make a formal demand to the concerned officials or employees pursuant to Section 3, Rule of CSC Resolution No. 04-0676 dated June 17, 2004.

9. Allocation for the Integrated Solid Waste Management Program (ISWMP) under the 20% Development Fund did not identify specific projects and activities contrary to DILG Memorandum Circular No. 99-66 dated April 23, 1999 thus resulting in disallowance of P380,791.02 due to the indiscriminate construction/repair of structures at the Eco Center.

We recommend that erring officials and employees should refund the amount disallowed without prejudice to the filing of a criminal/administrative case against them for fraud/negligence in the performance of their official functions.We recommend that the City Planning Development Office shall prepare an Annual Investment Plan that clearly specifies the programs, projects and activities to be undertaken for the calendar year. Such AIP shall be consistent with the Regional Development Investment Plan and with the Medium Term Philippine Development Plan. The Local Finance Committee should also ensure that budgetary allocations are also itemized and in harmony with the AIP.

AAR 2007

A request for reconsideration has been made by the erring official.

Not Implemented.

10. The payment made to the contractor in the amount of P63,226,611.09 for the construction of the new public market was not in accordance

Require the LBP management to explain the unauthorized debit from the account of the City of the amount automatically credited to the account of

AAR 2006

Management had already created an Inventory Committee, with the General Services Office as

Partially Implemented

The Management justified that they were only implementing

with the build and transfer contract and grossly disadvantageous to the agency.

Dynamic Builders and Construction Co. The computed interest as of December 31, 2006 corresponding to the amount debited should also be charged against that erring bank personnel.

It is also recommended that negotiation should be made with LBP for the change in the loan proviso pertaining to interest charges. Considering that this is a capital investment, it is more financially rational that a fixed rate of interest be solicited.

The amount of rebate equivalent to 2% of the payment made should be collected from the contractor.Otherwise, the amount shall be jointly and severally charged against the Local Chief Executive, City Accountant, City Treasurer and City Engineer as liable persons.

The LGU shall strictly conform to the stipulations in the contract. Henceforth, the Local Chief

Chairman. Reports by the GSO has it that committee has started, but was not able to inventory Committee to conduct, if possible, an Inventory on a six (6) months basis.

The Management will require each department to make a physical count of the properties assigned or issued to it for submission and verification by the Inventory Committee.

Management sought confirmation from the previous chairman of the Committee on Laws, Rules and Legal Matters of the Sangguniang Panlungsod regarding the proper construction of 20% rebate provided for in

the policy adopted by or actions of the Sangguniang Panlungsod, in the matter of making payments to the contractor.

Management got the confirmation that 2% rebate would apply only against the interest rate imposable if payments were made by installments.

Since no

Executive shall make sure that, prior to payments for infrastructure projects, a review be made to ensure that all contract provisions are complied.

We recommend that the City Development Officer submit the approved Revised APP, if any, together with the PPMP for each individual projects implemented.

It is likewise recommended that the City Engineer should only implement projects that are included in the approved APP pursuant to Sections 7.1, 7.2 and 7.5 of R.A. 9184.

the contract.

The City Development Officer had been instructed to submit the approved APP together with PPMP for each individual projects implemented.

Management likewise directed the City Engineer to implement only projects that are included in the approved APP.

interests were imposed on installment payments by the contractor, a rebate cannot also be claimed by the City, according to said Committee Chairman.

The City Planning and Development Officer failed to submit APP and PPMP.

11. The Animal Dispersal Program of the City may not be effectively implemented due to the absence of policies and procedures pertaining thereto.

The Mayor constitutes a committee, which shall establish policies and guidelines for animal dispersal program.

The Office of the City Agriculturist or Veterinarian is tasked to collect all data pertaining to beneficiaries to this program and monitor their compliance in terms of payment stated in the MAO.

AAR2005

PartiallyImplemented

A review of the past Animal Dispersal Program had been conducted. The errors in the program were identified especially on the matters of monitoring, control and the

responsibilities of the beneficiaries.

12. Guidelines for the Swine Dispersal City Wide Program were not instituted, thus dispersals could not be properly monitored and accountabilities determined.

Formulate a guideline for the project with specific on the qualifications of beneficiaries, terms of repayment and responsibilities of both beneficiaries and department tasked to oversee the project.

An inventory be conducted on the swine that have already been dispersed and the corresponding MAO accomplished.

AAR2005

PartiallyImplemented

Upon finalization of the revised or new dispersal program, its implementation shall be strictly checked or monitored.

The Revised or New Dispersal Program is not finalized. An inventory of the subjects of Animal Dispersal Program is being undertaken. The availability or existence of the listed beneficiaries is being verified.

13. Properties amounting to more than P37 Million were not insured with Government Service Insurance System.

We recommend that all buildings owned by the City should be insured with Government Service Insurance System pursuant to R.A 656, as amended.

AAR2003

During the year the city only insured the main city hall building and four units LOGOFIND school buildings.

PartiallyImplemented

The city does not have enough appropriation for insurance to cover the whole building owned by it.

PART IV - ANNEXES