EXECUTIVE SUMMARY

A. Introduction

As a city, Naga is one of the country’s oldest. Originally called Ciudad de Nueva Caceres, it was one of the five cities created by royal Spanish decree in the late 16th century.

Even before the coming of the Spanish colonial government, Naga, which was then a flourishing village off the riverbanks of the storied Naga River, was already a thriving community. The name “Naga” derived its origin from the narra trees, which were, then in abundance.

Thus, in 1573, when the Spanish Troops arrived led by Capt. Juan de Salcedo, the colonizers were amazed to find a community with a fairly well advanced culture. In 1574, Captain Pedro de Chaves founded Ciudad de Nueva Caceres in Spain. Naga, the premiere native village and then a Spanish pueblo, formed part of the Spanish colonial city.

Nueva Caceres remained the capital of Ambos Camarines provinces and later of the Camarines Sur province until the formal creation of the independent component city of Naga under the Philippine Republic. Naga’s birth as a chartered city formally took place on June 18, 1948 by virtue of Republic Act No. 305. Rep. Juan Q. Miranda sponsored this legislative act which put flesh into the city’s bid to become among the only few independent component cities in the country. Sixty years later, Naga has evolved into a national and global community, primarily for its award winning best practices and innovations initiated domestically and abroad. B. Highlights of Financial Operation

For Calendar Year 2008, the city government collected P489.8 million which is 6.73% higher than the estimated income of P458.9 million and 5.6% higher than the collected amount of 463.6Million in 2007.

2008 2007 Local taxes P 161,845,223.82 P 163,022,951.02 Permit and Licenses 14,419,230.20 10,714,931.92 Service Income 10,101,507.06 8,497,484.73 Business Income 47,550,852.20 44,353,826.77 Other Income 255,885,976.13 237,087,662.24

Total P 489,802,789.41 P 463,676,856.68

Annual Budget appropriation for the year 2008 is P 569,783,932.25 which is 12.00 % more than that of last year of P 508,746,185.39. Out of the total appropriation for the year 2008, P473,623,000.08 was obligated while P96,160,932.17 remained unobligated at year end.

Of the income realized aforementioned, P460.9 million was expended during the year

as shown below with comparative figures for calendar year 2007, viz:

2008 2007 Personal Services P 195,805,124.90 P 177,217,272.58 Maintenance and Operating Expenses 154,687,316.22 155,603,812.78 Financial Expenses 7,963,498.27 11,899,533.63 Subsidies and Donations 38,581,011.59 34,126,814.80 Capital Outlay 63,908,334.40 88,091,371.55

Total P 460,945,285.38 P 378,847,433.79 As shown below, the City’s assets, liabilities and residual equity as of December 31,

2008 increased/(decreased) by 5.52%, (2.74%) and 8.28% respectively than that of last year. On the other hand, its current ratio of 2.95 increased by 0.41 while debt/equity ratio of .30 is lower by .03:

2008 2007 Assets P 1,459,077,064.73 P 1,382,709,213.81 Liabilities 336,257,029.47 345,741,870.84 Government Equity 1,122,820,035.26 1,036,967,342.97

The following are the significant programs and projects undertaken by the city

government for 2008 which were validated by the City Auditor’s Office, through the assistance of the COA Technical Audit Specialists. There were other projects implemented by the city government which were submitted to the COA Regional Technical Audit Division for appropriate action, whose inspection and evaluation reports are still in progress:

Programs/Projects/Activities

Unit

Actual Cost

% of Accomplishment

Urban Settlements Development Fund Socialized Housing – Sitio Canada

1 project

P5,528,500.00

100%

Urban Redevelopment Fund 1. Rehabilitation/Improvement Sidewalks

(Phase 1) at CBD1 2. Installation of 100 units lamp posts at

CBD1 3. Construction of Brgy. Hall at Carolina 4. Movable drainage cover, topping of

pavement at Lerma 5. Improvement of Day Care Center at San Isidro 6. Road concreting Urban Poor Site at Panicuason 7. Concrete road topping at Concepcion

10 projects 2,648,780.48

1,770,111.86 1,530,000.00

385,000.00

288,700.00

403,501.50

100%

100% 100%

100%

100%

100%

C. SCOPE OF AUDIT

A financial and compliance and value for money audit were conducted on the operations of Naga City for Calendar Year ended December 31, 2008. The audit included, but not limited to, the analysis of financial and accounting records, determination of the validity and propriety of the agency’s transactions. The value for money audit was focused mainly on the agency’s Priority Development Assistance Fund (PDAF), 20% Local Development Fund, Special Education Fund (SEF), Economic Enterprise and Official Development Assistance (ODA). D. AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

The Auditor rendered a qualified opinion on the financial statements as the validity, existence and correctness of the recorded balance of the agency Inventories and Property, Plant and Equipment accounts valued at P3,079,308.38 and P838,036,762.15, respectively could not be ascertained because the agency was not able to complete the conduct of physical inventory of its properties and the existing records did not allow application of alternative audit procedures.

E. SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS

For the exception cited above, the Auditor recommended the completion of the conduct of physical inventory and the submission of the reports thereon to the Auditor. In addition, the following are the other significant findings and the corresponding recommendations.

Pequeña 8. M. Austria Lot 9. Drainage at Villa Fulgentes, Sabang 10. Road concreting at Compradia, Zone 6 San Felipe

197,259.78 500,000.00 200,000.00

241,912.67

100% 100% 100%

100%

Solid Waste Management 1. Three (3) units mini dumptruck

1 project

329,000.00

100%

Barangay Development Fund

1. Improvement of Day Care Center 2. Drainage Canal at Bagumbayan Sur 3. Barangay Hall (Phase I) at Brgy. Panicuason, Naga City

3 projects

226,529.05 222,974.00

699,526.61

100% 100%

100%

I – FINANCIAL AND COMPLIANCE AUDIT

1. Cash advances amounting to P997,775.38 were granted without first settling or a

proper accounting thereof was made of the previous cash advance, while cash advances totaling P5,119,679.84 were not liquidated within the prescribed period, contrary to Sections 4.1.2 and 5.1 of COA Circular No. 97-002, respectively. These procedural defects created doubts on the validity and regularity of the grant and liquidation thereof.

We recommend that the Office of the City Accountant should ensure that

Sections 4.1.2 and 5.1 prescribed in COA Circular No. 97-002 which pertain to the grant and liquidation of cash advance be strictly enforced.

Further, the agency is enjoined to undertake administrative remedial measures

and/or appropriate legal actions for the recovery and/or settlement of unliquidated cash advances. Failure of the accountable officers to liquidate their cash advances within the prescribed period shall constitute a valid cause for withholding of salaries.

2. Reconciling items with a net amount of P999.90 affecting the account Cash-

Disbursing Officers were not taken up in the agency books, contrary to Section 112 of P.D. 1445, thus, overstating the account balance by the same amount. We recommend that the City Accountant should prepare the necessary adjustments in the Journal Entry Voucher and to record immediately the adjusting journal entries in the appropriate agency books.

3. LGU-Naga City remittances of various income taxes withheld pertaining to CY

2008 were paid to a BIR Revenue Collection Officer, contrary to BIR Memorandum dated November 27, 2007 and more so, not in conformity with Revenue Memorandum Order No. 10-2006 dated December 12, 2005, thus, resulted to occurrence of illegal scheme made by the BIR Revenue Collecting Officer to defraud the government, for an estimated amount of P3,844,629.45 and for the LGU to be penalized and imposed with adverse sanctions by BIR.

We recommend that the Local Chief Executive should initiate the agency’s registration with the BIR Integrated Tax System and enrollment in the BIR Electronic Filing and Payment System (eFPS) for the filing and payment of the Income Taxes Withheld by the agency in accordance with Revenue Memorandum Order No. 10-2006.

4. The entries made in recording the BIR tax refund payable for over-withheld taxes on compensation for 2007 totaling P840,097.24 in the agency books were found not appropriate contrary to Section 112 of P.D. 1445, thus, understating the account Due from NGAs and the account Due to BIR by P840,097.24.

We recommend that the City Accountant immediately draw the necessary Journal Entry Vouchers and record the adjusting journal entries in the appropriate agency books.

5. Remittances of Income Taxes Withheld on Compensation for December 2007 and January 2008 were not recorded in the agency books and inappropriate account was used in recording the remittance made for the month of February 2008 contrary to Section 112 of P.D. 1445, thus, overstating the accounts Due from NGAs by P840,097.24; Due to BIR by P751,870.19 and Tax Refund Payable by P88,227.05.

We recommend that the City Accountant immediately draw the necessary Journal Entry Vouchers and record the adjusting journal entries in the appropriate agency books.

6. Inaccurate amount of personal exemptions applied in the computation of withholding tax deducted from employees’ monthly compensation income, among others, resulted in huge amount of tax refund on employees remitted taxes withheld for 2007 to the Bureau of Internal Revenue (BIR), driving the agency to pay in advance P840,097.24 to the employees with over-withheld taxes in 2007 as required in the BIR annualized withholding tax method. The amount could have been used just in time for the agency’s own operation. We recommend that the Office of the City Human Resource and Management Officer require all agency employees to prepare and submit an updated Certificate of Update of Exemption and of Employer’s and Employee’s Information (BIR Form 2305) together with the required attachments and to furnish the City Accountant’s Office a certified copy of the updated list of all the agency employees personal exemptions for proper application in the computation of the withholding tax on compensation income. We also recommend that the City Accountant with the support and assistance of the City Electronic and Data Processing Unit, review and update/upgrade the accounting office computer Personnel Information System program pertaining to its payroll system which includes the computation of the withholding tax on compensation income of employees.

7. Shares on the Income on Real Property Tax (RPT) of the 27 barangays of the

city were not immediately released by the City Government of Naga within the period prescribed by Section 271(d) of the Local Government Code as amended, thus depriving each barangay government of the immediate use of said funds and exposing the same to risk of misappropriation and/or unauthorized use.

We recommend that the amount of P3,278,410.19 share of the barangays on

the RPT collected by the City for the months of June to December, 2008 should be remitted immediately to avoid unwanted sanctions.

We also recommend that the City Accountant should dutifully and promptly

remit all barangay shares on RPT in the succeeding quarters as prescribed under Section 271 (d) of the Local Government Code.

8. The LGU was delayed in the submission of CY 2008 reports and accounts contrary to Section 122 of P.D. 1445, known as “The Government Auditing Code of the Philippines” and other pertinent COA Regulations thus, restricted timely post audit of accounts, and detection and correction of recording errors.

We recommend that the City Accountant should immediately submit the

remaining reports and accounts for Calendar Year 2008 and to strictly observe Section 8 of COA Circular No. 94-001 and Section 3.2 of COA Circular No. 96-11 in the ensuing year, so that timely post audit of transactions will be facilitated and early detection and correction of recording error/s can be timely effected.

9. Long existing reconciling items reflected in the Bank Reconciliation Statements

(BRS) as of December 31, 2008 of several bank depository accounts of the City remained unadjusted, contrary to Section 3.3 of COA Circular No. 96-11, thus, Cash in Bank accounts were rendered inaccurate and unreliable.

We recommend that the City Accountant should draw the appropriate

adjusting journal entries with corresponding supporting documents and record the book reconciling items in the respective agency fund books. Regarding the erroneous recording by bank, the City Accountant must inform the City Treasurer with the necessary data so that an advice for a Debit and Credit Memo can be requested from the bank to effect inter-fund transfers.

For the long outstanding checks, we recommend that management should

follow the guidelines stated in Section 189 of GAAM Vol. 1. The City Accountant is advised to prepare and record the adjusting journal entry in the appropriate agency book to revert back to the appropriate fund the issued check amount and establish the liability of the City.

Likewise, the City Treasurer is reminded of the provision of Section 59 of the

Manual on the New Government Accounting System, that at least one month before a check become stale, he should send a written notice to the payee of the existence of the check.

10. Out of the total P8,091,315.41 Due From NGOs/Pos, the amount of P7,223,424.21

were not liquidated within the prescribed period and the release of additional fund to various NGOs/POs in the amount of P2,291,071.77 was approved even without an interim Fund Utilization Report of the previous release had been submitted contrary to Sections 5.4 and 4.5.5 of COA Circular No. 2007-1, respectively, thus created doubts on the veracity of the intended purpose/s of the funds released and validity of its fund utilization and the accomplishment of its objectives could not be ensured.

We recommend that the signing officials of Naga City to the MOA should

cause the close monitoring of the project implementation and verification of financial records and reports of the NGO/PO to provide assurance that its intended purpose is accomplished and ensure that the provisions of the MOA and COA Circular No. 2007-001 are complied with.

II – VALUE FOR MONEY AUDIT

11. The 20% Local Development Fund could have been appropriated and utilized for development projects geared towards the attainment of desirable socio-economic development and environmental outcomes which partake the nature of investment and capital expenditures that would directly generate jobs and livelihood opportunities for the people of Naga City, rather than for expenditures appropriately chargeable against Maintenance and Other Operating Expenses (MOOE), had the City Development Council conscientiously adhered to the general policies and projects covered under Joint Memorandum Circular No. 1, series of 2005. We recommend that the City Development Council should prepare through its Secretariat and approved an Annual Investment Plan that would conscientiously adhere to the general policies and guidelines on the appropriations and utilization of the 20% of the Annual Internal Revenue Allotment for development projects that would partake the nature of investment and capital expenditures as enumerated under the Joint DILG-DBM Memorandum Circular No. 1, s. 2005.

12. More elementary and secondary public schools’ students of the city could have

benefited in terms of better school facilities, services and activities had the Naga City School Board (NCSB) vigorously pursued the timely and full implementation of all the programs and activities as embodied in the CY 2008 total appropriations amounting to P50,100,102.72 under the Special Education Fund.

We recommend that the Naga City School Board should closely monitor and

vigorously pursue the timely and full implementation of all the programs and activities as embodied in the school board budget which are considered necessary and intended to immediately benefit the students in the public schools of Naga City.

13. The Implementing Rules and Regulations (IRR) of the Quality Universal

Elementary and High School Education in Naga otherwise known as QUEEN Program duly ratified by the Sangguniang Panlungsod was not yet presented by the QUEEN Management Team, thus, validity of the expenditures charged to the QUEEN Fund totaling P4,442,825.60 in 2008 could not be ascertained and accomplishment of its objectives could not be ensured.

We recommend that the City QUEEN Management Team should formulate and approve a detailed and comprehensive Implementing Rules and Regulations of the QUEEN Program duly ratified by the Sangguniang Panlungsod that would effectively enforce the provisions of the Ordinance and would provide basis for the regularity of the funds released and validity of the disbursements made.

14. The city could have earned additional income from market stalls rental in CY

2008 by as much as P3,981,445.59 had the City Public Market Administration been more aggressive and determined in collecting the monthly stalls rental and had strictly enforced Sections 142 and 144 of the City Ordinance No. 2004-123, An Ordinance Codifying and Revising the various Revenue Ordinances of the City of Naga, and For Other Purposes.

We recommend that the Naga City Public Market Administration should:

1. Be more aggressive and determined in its collection efforts and strictly enforce the pertinent provisions of City Ordinance No. 2004-123 applicable to delinquent market stallholders and space occupants.

2. Immediately send out demand letters to delinquent stallholders to pay their arrears and after the lapse of the grace period declare the stall vacant and submit the same to the Market Committee for proper adjudication.

3. Whenever compromise agreement is entered into between the market stallholders and the Market Administrator, it should be in writing duly notarized to establish legal enforceability.

15. The Accountable Officer allows other Accountable Officers and other personnel

assigned at the Naga City Public Market Office to use and issue his entrusted official receipts to LGU clients, contrary to Item 16 of the Specific Policies on Collections, Chapter I of the Handbook on Cash Examination, thus, breaking the trust given by the agency and moreover, the accountable officer may not be personally aware of possible improper use/application of the official receipts to the detriment of the government.

We recommend that accountable officer/s entrusted with the safekeeping, proper and authorized use or application of official receipts should desist from allowing other person/s to use and issue official receipts in their behalf, in consonance with Item 16 of the Specific Policies on Collections, Chapter I of the Handbook on Cash Examination to prevent possible improper use/application of the official receipts to the detriment of the government.

It is also recommended that an evaluation on the personnel complement assigned on the collections/ remittance of the revenues of the Naga City Public Market and Abattoir be performed to assess whether the number of personnel assigned is sufficient to perform their assigned duties and responsibilities without delegating the use or application of entrusted official receipts to unauthorized employees.

16. Had the City Government of Naga implemented the various Priority

Development Assistance Fund received from 2005 to 2008 coming from legislators amounting to P12,279,700.00, the constituents of Naga City could have enjoyed the benefits that may have been derived therefrom and the different purpose for which the amounts were released could have been attained.

We recommend that the Local Chief Executive should be dynamic and aggressive in implementing the intended projects/programs of the PDAF received from 2005 to 2008 amounting to P12,279,700.00 in the ensuing year and to include in its regular monitoring the PDAF projects and programs being implemented.

The foregoing statements together with the other findings and recommendations contained in this report were discussed with the city officials and employees concerned in a conference held on April 3, 2008. Management views and reactions were considered in this report where appropriate. F. STATUS OF IMPLEMENTATION OF PRIOR YEAR’S AUDIT

RECOMMENDATIONS

Of the eleven prior year’s audit recommendations embodied in the 2007 Annual Audit Report, four (4) were implemented, six (6) were partially implemented and one (1) was not implemented.

TABLE OF CONTENTS

PART I Audited Financial Statements Pages Audit Certificate 1 1 Statement of Management Responsibility 2 Consolidated Balance Sheets 3 Consolidated Statement of Income and Expenses 4 Consolidated Statement of Cash Flows 5 Notes to Financial Statements 6 PART II Detailed Audit Findings and Recommendations Financial and Compliance Audit 22 Value for Money Audit 40 PART III Status of Implementation of Prior Year’s Audit

Recommendations 55

PART IV Annexes 63 Financial Statements by Fund Status of Appropriations, Allotments and Obligations Others

PART - I

AUDITED FINANCIAL STATEMENTS

Republic of the Philippines COMMISSION ON AUDIT

Regional Office No. V Rawis, Legazpi City

AUDIT CERTIFICATE

Hon. JESSE M. ROBREDO City Mayor Naga City We have audited the accompanying Balance Sheet of the Naga City Government, as of December 31, 2008, and the related Statements of Income and Expenses and Cash Flows for the year then ended. These statements are the responsibility of the auditee. Our responsibility is to express an opinion on these financial statements based on our audit. Except as stated in the succeeding paragraph, we conducted our audit in accordance with laws, COA and INTOSAI standards and applicable generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement/s. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

As discussed in our findings and recommendations, the agency was not able to complete the conduct of physical count on the bulk of its Inventories and Property, Plant and Equipment valued in the books at P3,079,308.38 and P838,036,762.15, respectively. The inadequacy of records did not permit us to apply adequate alternative procedures to determine the validity of the balances of these accounts although some of its major assets such as buildings, office equipment, furniture and fixtures, machineries and equipment and transportation equipment exist and being used in its operations. In our opinion, except for the effect of any adjustments which might have been made had the agency completed the conduct of physical count on the bulk of its Inventories and Property, Plant and Equipment and had there been records to satisfy ourselves as to their validity, the accompanying financial statements present fairly, in all material respect the financial position of the City of Naga as of December 31, 2008, and the results of its operations and its cash flows for the year then ended in accordance with applicable generally accepted accounting principles.

April 13, 2009

2008 2007ASSETSCurrent assets Cash (Note 5) P 303,488,672.49 P 272,970,436.33

Receivables (Note 6) 153,342,431.80 135,486,286.77 Inventories (Note 7) 3,079,308.38 3,135,099.19 Prepayments (Note 8) 4,241,282.95 3,784,989.04 Other Current Assets (Note 9) 58,471.95 58,471.95

Total Current Assets P 464,210,167.57 P 415,435,283.28 Property, Plant and Equipment (net of depreciation) (Note 10)

Land P 151,929,789.46 P 146,296,289.46 Land Improvements 387,548,242.61 387,043,435.77 Buildings 278,446,609.55 278,172,460.55 Office Equipment, Furniture and Fixtures 23,624,329.49 25,499,796.56 Machineries and Equipment 21,549,905.14 15,455,006.58 Transportation Equipment 11,728,734.52 12,874,495.96 Other Property Plant and Equipment 16,190,729.10 17,630,678.87 Public Infrastructures 4,249,213.65 329,034.45 Construction in Progress 98,223,657.38 82,597,046.07

Total Property, Plant and Equipment P 993,491,210.90 P 965,898,244.27 Other Assets (Note 11) P 1,375,686.26 P 1,375,686.26 TOTAL ASSETS P 1,459,077,064.73 P 1,382,709,213.81

LIABILITIES AND EQUITYLIABILITIESCurrent Liabilities (Note 12) P 157,495,445.39 P 163,723,755.81 Long-Term Liabilities (Note 13) 63,003,061.40 90,036,940.36 Deferred Credits (Note 14) 115,758,522.68 91,981,174.67

Total Liabilities P 336,257,029.47 P 345,741,870.84

EQUITYGovernment Equity, Beg. P 1,036,967,342.97 P 960,297,050.97 Add/Deduct:

Retained Operating Surplus 92,765,838.43 84,829,422.89 Prior Year's Adjustments ( Note 15.1) 4,716,140.41 26,224,663.57 Transfers to Registry (11,629,286.55) (34,383,794.46)

Government Equity, End (Note 15) P 1,122,820,035.26 P 1,036,967,342.97 TOTAL LIABILITIES AND EQUITY P 1,459,077,064.73 P 1,382,709,213.81

(See accompanying Notes to Financial Statements)

City of NagaConsolidated Balance SheetAs of December 31, 2008

(With Comparative Figures for CY 2007)

2008 2007Income (Note 16)

Local Taxes (Net of Discounts) P 161,845,223.82 P 155,567,876.07 Permits and Licenses 14,419,230.20 10,714,931.92

Service Income 10,101,507.06 8,497,484.73 Business Income 47,550,852.20 44,353,826.77 Other Income 255,885,976.13 237,087,662.24 Total Income P 489,802,789.41 P 456,221,781.73

Less: ExpensesPersonal Services (Note 17.1) P 195,805,124.90 P 177,217,272.58 Maintenance and Other Operating Expenses (Note 17.2) 154,687,316.22 148,148,737.83 Financial Expenses (Note 17.3) 7,963,498.27 11,899,533.63 Total Expenses (Note 17) P 358,455,939.39 P 337,265,544.04

Net Operating Income P 131,346,850.02 P 118,956,237.69 Less: Subsidies and Donations (Note 18) 38,581,011.59 34,126,814.80 NET INCOME P 92,765,838.43 P 84,829,422.89

City of Naga

(See accompanying Notes to Financial Statements)

Consolidated Statement of Income and ExpensesFor the Year Ended December 31, 2008

(With Comparative Figures for CY 2007)

2008 2007Cash Flows from Operating Activities

Cash Inflows: Collection from taxes P 167,147,789.08 P 144,773,077.65

Share from Internal Revenue Collections 238,737,831.00 226,608,963.00 Receipts from sale of goods and services 72,071,589.46 63,566,243.42 Interest Income 7,897,833.28 5,556,389.19 Other Receipts 1,608,792.91 28,067,332.64 Total Cash Inflow P 487,463,835.73 P 468,572,005.90

Cash Outflows:Payments-To suppliers/creditors P 135,046,367.21 P 107,279,734.10 To employees 201,109,120.41 176,021,544.50 Interest Expenses 7,844,052.26 10,216,110.93 Other Expenses 17,108,151.77 15,917,352.01 Total Cash Outflow P 361,107,691.65 P 309,434,741.54

Net Cash Operating Activities P 126,356,144.08 P 159,137,264.36 Cash Flows from Investing Activities

Cash Outflows:To Purchase Property, Plant and Equipment P 63,908,334.40 P 88,091,371.55 To Grant/Make Loans to Other Entities 4,917,524.94 9,895,107.00 Total Cash Outflow P 68,825,859.34 P 97,986,478.55

Net Cash Investing Activities P (68,825,859.34) P (97,986,478.55) Cash Flows from Financing Activities

Cash Outflows:Payment of Loan Amortization P 27,012,048.58 P 11,952,230.61 Total Cash Outflow P 27,012,048.58 P 11,952,230.61

Net cash from financing activities P (27,012,048.58) P (11,952,230.61) Net increase in cash P 30,518,236.16 P 49,198,555.20 Cash at the beginning of the year 272,970,436.33 223,771,881.13 Cash at the End of the Period P 303,488,672.49 P 272,970,436.33

City of NagaConsolidated Statement of Cash FlowsFor the Year Ended December 31, 2008

(With Comparative Figures for CY 2007)

Notes to Financial Statements As of December 31, 2008

1. General/Agency Profile

Sixty years after it became a chartered city, Naga has been referred to as model

government entity worthy of emulation. It did not only retain its reputation as the center of faith and the hub of industry in the Bicol Region but also it acquired a national and global reputation for its various awards in best practices, public service, and as a cost effective city, most improved city, child-friendly, women-friendly and more.

Financially, the city have “done more with less” despite the prevailing economic

crisis and the limited budgetary resources. It prevailed through effective management and dedicated workforce. The city has once again outperformed its previous year’s performance. Current income grew by PhP 31,796,945.13 from 2007 to 2008 which was characterized by a 35% increase in the collection of permits and licenses. This alone will concur to the fact that more and more establishments are setting-up business in the city let alone the 2009 opening of the biggest mall in the entire Bicol Region which will generate more jobs and transients.

The charter of the City of Naga was created by the Senate and the House of

Representatives through the enactment of Republic Act No. 305 which took effect on June 18, 1948. From a municipality in the province of Camarines Sur, Naga has transformed into a chartered city.

As required under Sections 308, 309 and 310 of the Local Government Code,

separate books are maintained for the General Fund, Special Education Fund and Trust Fund.

The Special Education Fund, which consist of the proceeds of one percent (1%) tax on the assessed value of the real property in addition to the basic real property tax is automatically released to the school board, which in turn is used for the following purposes:

1. Operation and maintenance of public schools in Naga City 2. Construction and repair of school buildings, facilities and equipment 3. Educational research for the improvement of the quality of education 4. Purchase of books and other school supplies 5. Sports development.

The Trust of the city consists of private and public monies which have come into the possession of the city, and disbursed in fulfillment of the purpose for which it were received or created.

The General Fund is used to account for such monies and resources received and disbursed from the City Treasurer’s Office and which are available for payment of expenditures and obligations of the City Government of Naga. The Internal Revenue Allotment has accrued to the General Fund. In addition, the economic enterprise maintained by the city have also accrued to the Special Accounts of the General Fund, such as the following:

1. Naga City Abattoir 2. Naga City Hospital 3. Naga City Public Market

2. Basis of Financial Statements Presentation

The consolidated financial statements have been prepared in accordance with

applicable laws, rules, and regulations, and in conformity with the Generally Accepted State Accounting Principles and Standards.

3. Significant Accounting Policies

The costs of inventories are based on perpetual inventory method and priced following the Moving Average Method.

Property, Plant and Equipment are carried at historical cost. Infrastructures under

construction in-progress are valued following the construction period theory.

The straight line method of depreciation is followed. For equipment, vehicles and other assets subject to depreciation, depreciation is computed on the month following the date of purchase.

The share from the Internal Revenue Collections are accounted for under the accrual method and Real Property Taxes are accounted under the modified accrual method of accounting. All other taxes, fees, charges and other revenues are accounted using the cash method of accounting.

4. Correction of Fundamental Errors

Fundamental errors of prior years are corrected by using the Prior Years’ Adjustments

account while errors affecting current years’ operation are effected to the current year’s accounts.

5. Cash P 303,488,672.49

This account is broken down as follows:

2008 2007 Cash in Vault P 18,275,725.15 P 17,278,271.69Cash – Disbursing Officers 4,321,802.52 8,091,027.32Petty Cash Fund 7,340.00 2,790.50Cash in Bank - Local Currency, Current Account 75,499,575.97 69,470,437.98Cash in Bank - Local Currency, Savings Account 203,463,858.68 175,708,084.74

Cash in Bank - Foreign Currency, Savings Account 1,920,370.17 2,419,824.10

TOTAL P 303,488,672.49 P 272,970,436.33

6. Receivables P 153,342,431.80

This account includes the following: 2008 2007 Receivable Accounts:

Accounts Receivable P 34,958.05 P 31,564.53Due from Officers and Employees 3,079,876.77 2,762,927.95Loans Receivable – Others 44,732,774.90 38,167,105.58Real Property Tax Receivable 26,981,616.66 19,466,765.93

Special Education Tax Receivable 15,576,605.63 9,528,928.61 Sub-Total P 90,405,832.01 P 69,957,292.60 Inter-Agency Receivables: Due from NGAs P 4,510,515.54 P 4,012,396.21 Due from LGUs 9,049,939.69 806,035.93

Due from NGOs/Pos 8,091,315.41 9,454,459.79

Sub-Total P 21,651,770.64 P 14,272,891.93 Intra-Agency Receivables:

Due from Other Funds P 32,361,068.41 P 42,363,649.07

Sub-Total P 32,361,068.41 P 42,363,649.07 Other Receivables: Receivables - Disallowances/Charges P 1,748,279.81 P 1,748,279.81

Other Receivables 7,175,480.93 7,144,173.36

Sub-Total P 8,923,760.74 P 8,892,453.17

Total P 153,342,431.80 P 135,486,286.77

The account Due from Officers and Employees is categorized into two namely;(1) Cash Advance for Travel and (2) Receivable from collectors and cashiers for shortages & receivables from employees for absences/leave without pay and tardiness.

The amount of P3,111,838.24 as Due from NGOs/POs represents funds released as financial assistance to various organizations subjected to liquidation. Grant of subsequent financial assistance require settlement of previous release.

The Accounts Receivable – Disallowances / Charges represents amount due from agency officials, employees and creditors/dealers resulting from audit disallowances that have become final and executory.

7. Inventories P 3,079,308.38 This account consists of : 2008 2007 Office Supplies Inventory P 1,022,263.79 P 1,343,552.05Accountable Forms Inventory 259,848.80 486,174.69Drugs and Medicines Inventory 808,177.90 798,702.90Medical, Dental and Laboratory Supplies Inventory 165,967.00 165,967.00Agricultural Supplies Inventory 30,780.40 219,642.15Other Supplies Inventory 504,037.45 31,660.40Other Agricultural, Fishery and Forestry 198,833.04 89,400.00 Product Inventory 89,400.00

Total P 3,079,308.38 P 3,135,099.19

8. Prepayments P 4,241,282.95 This account consists of : 2008 2007 Prepaid Insurance P 370,096.79 P 118,064.70Prepaid Interest 33,790.51Advances to Contractors 3,651,950.26 3,413,897.93 Other Prepaid Expenses 219,235.90 219,235.90 Total P 4,241,282.95 P 3,784,989.04

9. Other Current Assets P 58,471.95

This account consists of :

2008 2007

Guaranty Deposits P 58,471.95 P 58,471.95

Total P 58,471.95 P 58,471.95

10. Property, Plant and Equipment P 993,491,210.90 This account consists of :

Balance Net Addition/ Balance

Dec. 31, 2007 (Reduction) Dec. 31, 2008

Land

P 146,296,289.46 P 5,633,500.00 P 151,929,789.46 Other Property, Plant & Equipment: Land Improvements P 392,354,249.76 P 329,567.02 P 392,683,816.78

Electrification, Power & Energy Structure 0.00 1,785,911.86 1,785,911.86

Buildings 325,048,314.12 10,634,864.18 335,683,178.30

Office Equipment, Furniture & Fixtures 47,346,927.60 3,086,824.36 50,433,751.96

Machineries and Equipment 28,586,676.66 9,142,420.70 37,729,097.36

Transportation Equipment 25,627,635.29 1,453,900.00 27,081,535.29

Other Property, Plant & Equipment 27,228,752.19 665,269.22 27,894,021.41

Public Infrastructure 329,034.45 (329,034.45) 0.00

Construction in Progress 82,597,046.07 19,875,824.96 102,472,871.03

Total P 929,118,636.14 P 46,645,547.85 P 975,764,183.99

Grand Total P 1,075,414,925.60 P 52,279,047.85 1,127,693,973.45

Accumulated Depreciation P 109,516,681.33 P 24,686,081.22 P 134,202,762.55

Net Amount P 965,898,244.27 P 27,592,966.63 P 993,491,210.90 On November 6, 2008, almost 70% of the total area of the 2nd and 3rd Floors of the Naga City Public Market was raised by fire resulting to damages of goods and of the building structure. Authoritative bodies pronounced the place as condemned area that needs major repairs and renovations. Public Infrastructures amounting to P11,629,286.55 were transferred to the Registry of Public Infrastructures.

11. Other Assets P 1,375,686.26

This account consist of the following:

2008 2007

Work/Other Animals P 78,200.00 P 78,200.00

Breeding Stocks 14,000.00 14,000.00

Arts, Archeological Specimen and Other Exhibits 632,354.36 632,354.36

Other Assets 651,131.90 651,131.90

Total P 1,375,686.26 P 1,375,686.26

12. Current Liabilities P 157,495,445.39 This account consists of : 2008 2007 Payable Accounts: Accounts Payable 63,653,503.06 P 63,973,381.03Due to Officers and Employees 1,220,321.51 5,579,681.91 Sub-Total P 64,873,824.57 P 69,553,062.94Inter-Agency Payables:

Due to BIR P 1,299,745.14 P 458,982.23Due to GSIS 3,265,058.94 161,263.26Due to PAG-IBIG 653,682.65 673,890.50Due to PHILHEALTH 194,222.10 178,110.6Due to Other NGAs 18,375,726.95 13,801,050.59Due to Other GOCCs 815,152.55 21,255.72

Due to LGUs 4,220,065.95 4,757,080.13

Sub-Total P 28,823,654.28 P 20,051,633.03Intra-Agency Payables:

Due to Other Funds P 28,234,393.21 P 42,544,346.89

Sub-Total P 28,234,393.21 P 42,544,346.89Other Payables :

Guaranty Deposits Payable P 10,836,631.80 P 8,274,547.47Performance/Bidders/Bail Bonds Payable 3,486,477.70 3,256,117.90Tax Refunds Payable 493,127.79 3,418.93

Other Payables 20,747,336.04 20,040,628.65

Sub-Total P 35,563,573.33 P 31,574,712.95

Total P 157,495,445.39 P 163,723,755.81

13. Long-Term Liabilities P 63,003,061.40 This account consists of : 2008 2007 Loans Payable- Domestics Municipal Development Fund (PREMIUMED II) P 0.06Philippine Veterans Bank 576.82Development Bank of The Philippines P 48,000,000.00 69,555,812.98

Land Bank of the Philippines 15,003,061.40 20,458,720.12

Sub-Total P 63,003,061.40 P 90,015,109.98

Other Long-Term Liabilities P 0.00 P 21,830.38

Sub-Total P 0.00 P 21,830.38

Total P 63,003,061.40 P 90,036,940.36

The deposit in escrow at DBP amounting P17,555,812.98 under Current Account No. 1064-405-4 in the name of the City of Naga was used to settle partially the loan for the construction of the Metro Naga Convention Center/Coliseum.

14. Deferred Credits P 115,758,522.68 This account consists of the following:

2008 2007 Deferred Special Education Tax Income P 15,576,605.63 P 9,528,928.61Deferred Real Property Tax Income 26,981,616.76 19,466,766.53

Other Deferred Credits 73,200,300.29 62,985,479.53

Total P 115,758,522.68 P 91,981,174.67 15. Government Equity P 1,122,820,035.26 This account consists of : 2008 2007 2 (a) portion pertaining to the plant, property and equipment including public infrastructures in-process P 909, 306,420.04 P 797,141,333.88 (b) equity set aside to finance capital projects

with appropriations provided in the previous

years (continuing appropriations) 13,647,408.40 21,529,243.19 (c) equity allocated to settle existing obligations 110,955,304.51 163,723,755.81 (d) available for operations 88,910,902.11 54,573,010.09 Total P 1,122,820,035,26 P 1,036,967,342.97

15.1 PRIOR YEARS’ ADJUSTMENTS DEBIT CREDIT BALANCE Prior Year's Expenses

Cash advance liquidated this year P 6,000,386.02 P 745.00

Other expenses incurred for prior year 10,996.22

Returned Check 82,756.61

Refund of collection 108,332.02 129,366.08

Adjustments 496,151.66 193,356.33

Prior Year's Income

Interest Earned for prior year 2,860.34 427,276.98

Other income collected for prior year 2,295,853.88

Cancelled check 5,199.06

Reverted payables which were outstanding For 2 years or more 8,346,953.43

Receivables from excess claims 18,872.52

TOTAL P 6,701,482.87 P 11,417,623.28 P 4,716,140.41

16. Income Accounts P 489,802,789.41

16.1 Local Taxes P 161,845,223.82 This account consist of the following: 2008 2007 Amusement Tax P 935,504.14 P 1,465,745.04Business Tax 66,678,296.25 63,242,689.03Community Tax 2,924,825.56 2,638,161.97Franchise Tax 366,885.22 718,894.70Occupation Tax 465,700.83 452,304.07Printing and Publication Tax 3,678.93Property Transfer Tax 5,766,027.02 7,218,564.39Real Property Tax 39,038,954.02 36,972,587.51Special Education Tax 50,145,853.23 48,081,788.24Tax on Delivery Trucks and Vans 1,269,309.06 745,346.05Tax on Sand, Gravel and Other Quarry Products 30,774.53 66,178.08

Fines and Penalties - Local Taxes 2,044,972.54 1,420,691.94

Total Local Taxes P 169,670,781.33 P 163,022,951.02

Less: Discounts

Discounts on Real Property taxes P 3,416,884.24 P 3,250,554.52

Discounts on Special Education Tax _ 4,408,673.27 _ 4,204,520.43

Total Discounts P 7,825,557.51 P 7,455,074.95

Sub-Total P 161,845,223.82 P 155,567,876.07 16.2 Permits and Licenses P 14,419,230.20

This account consist of the following: 2008 2007 Fees on Weights and Measures P 42,320.00 P 47,400.00Permit Fees 11,708,222.41 8,122,105.52Registration Fees 2,172,184.54 2,190,945.45

Other Permits and Licenses 496,503.25 354,480.95

Sub-Total P 14,419,230.20 P 10,714,931.92

16.3 Service Income P 10,101,507.06 This account consist of the following: 2008 2007 Clearance and Certification Fees P 3,431,529.38 P 4,051.962.98 Garbage Fees 534,724.00 528,191.00Inspection Fees 4,435,408.27 2,352,825.96Library Fees 18,390.00 29,756.5Medical, Dental and Laboratory Fees 1,137,904.00 1,039,805.60Processing Fees 255,040.00 236,290.00

Other Service Income 288,511.41 258,652.69

Sub-Total P 10,101,507.06 P 8,497,484.73

16.4 Business Income P 47,550,852.20 This account consist of the following: 2008 2007 Hospital Fees P 2,583,348.60 P 2,547,952.05Income from Cemetery Operations 279,580.00 257,030.00Income from Markets 22,481,398.52 20,154,566.44Income from Slaughterhouses 6,644,450.05 7,465,678.61Printing and Publication 454.54 7,010.74Rent Income 13,913,693.51 12,813,611.01Tuition Fees 430,050.00 407,950.00Other Business Income 865,211.65 544,301.74

Fines and Penalties - Business Income 352,665.33 155,726.18

Sub-Total P 47,550,852.20 P 44,353,826.77

16.5 Other Income P 255,885,976.13 This account consist of the following:

2008 2007 Income from Grants and Donations P 7,339,468.89 P 3,553,665.55

Insurance Income - 123,898.74

Interest Income 7,991,233.96 5,559,309.34

Internal Revenue Allotment 238,737,831.00 226,608,963.00

Share from PAGCOR/PCSO 504,248.84 -

Miscellaneous Income 1,313,193.44 1,241,825.61

Sub-Total P 255,885,976.13 P 237,087,662.24

Grand Total P 489,802,789.41 P 456,221,781.73

17. Expenditure Accounts P 358,455,939.39 This account is broken down into three, as follows:

17.1 Personal Services P 195,805,124.90

2008 2007 Salaries and Wages – Regular P 68,217,107.54 P 62,784,095.98Salaries and Wages – Casual 24,109,205.64 22,396,132.73Salaries and Wages – Contractual 18,084,045.89 15,639,828.52Personnel Economic Relief Allowance (PERA) 4,861,419.33 4,987,732.88Additional Compensation ( ADCOM) 14,795,682.85 15,105,795.08Representation Allowance (RA) 2,183,431.74 2,047,500.00Transportation Allowance (TA) 2,100,100.00 1,969,200.00Clothing/Uniform Allowance 3,384,500.00 3,464,000.00Subsistence, Laundry & Quarter Allowance 100,000.00 -Productivity Incentive Allowance 1,631,516.61 1,552,000.00Other Bonuses and Allowances 18,215,887.92 14,333,430.69Honoraria 2,187,779.89 694,200.63Hazard Pay 304,097.41 275,468.70Longevity Pay 551,706.88 326,000.00Overtime and Night Pay 264,330.90 1,084,992.82 Cash Gift 4,150,375.00 4,332,500.00Year End Bonus 8,046,963.18 7,625,016.44Life and Retirement Insurance Contributions 11,044,973.38 10,266,336.68 PAG-IBIG Contributions 1,002,550.00 1,029,275.94PHILHEALTH Contributions 1,092,850.00 1,017,250.00ECC Contributions 749,997.67 720,088.52Retirement Benefits- Civilian 2,091,614.15 -Retirement Benefits- Military/ Uniformed 875,352.44 -Terminal Leave Benefits 919,252.41 894,467.09Health Workers Benefits 979,852.15 1,291,717.71

Other Personnel Benefits 3,860,531.92 3,380,242.17

Sub-Total P 195,805,124.90 P 177,217,272.58

17.2 Maintenance & Other Operating Expenses P 154,687,316.22 2008 2007 Traveling Expenses – Local P 3,374,293.21 P 2,961,758.74Traveling Expenses – Foreign 5,000.00 77,026.24Training Expenses 426,211.00 279,046.50Office Supplies Expenses 2,877,132.43 2,960,584.57Accountable Forms Expenses 562,035.02 575,184.66Animal/Zoological Supplies Expenses 71,124.25 141,149.00Food Supplies Expenses 1,497,294.20 2,697,020.58Drugs and Medicines Expenses 5,099,977.98 3,137,245.78Medical, Dental and Lab. Supplies Expenses 2,685,060.49 1,910,886.16Gasoline, Oil and Lubricants Expenses 14,109,385.28 12,077,046.46Agricultural Supplies Expenses 265,186.20 396,772.75Textbooks and Instructional Materials Expenses 138,666.40 114,042.00Other Supplies Expenses 3,773,619.74 5,286,615.04Water Expenses 7,171,425.71 4,955,979.34Electricity Expenses 35,630,661.13 31,911,528.18Cooking Gas Expenses 76,135.04 12,817.29Postage and Deliveries 35,946.45 46,292.08Telephone Expenses – Landline 881,018.98 1,129,627.14Telephone Expenses – Mobile 413,103.00 298,281.81Internet Expenses 174,681.45 189,562.54Cable, Satellite, Telegraph, and Radio Expenses 18,000.00Membership Dues and Contributions to Organizations 140,000.00 326,426.60Advertising Expenses 787,891.92 715,180.00Printing and Binding Expenses 481,336.10 131,750.25Rent Expenses 2,795,591.69 2,398,806.90Representation Expenses 78,377.01 79,325.35Transportation and Delivery Expenses 14,607.00 445,199.31Subscriptions Expenses 63,470.50 53,282.00Survey Expenses 6,400.00Rewards and Other Claims 20,600.00Consultancy Services 709,647.92 768,341.89Environment/Sanitary Services 3,622,402.50 3,885,035.44Janitorial Services 2,500.00Other Professional Services 241,904.00 17,050.00Sub-total P 88,230,086.60 P79,999,464.60

Sub-total forwarded P 88,230,086.60 P79,999,464.60Repairs and Maintenance - Land Improvements 108,000.00 Electrification, Power and Energy Structures 4,815,156.48 4,392,975.30 Office Buildings 1,941,336.48 843,442.61 School Buildings 596,145.95 1,086,879.80 Hospitals and Health Centers 312,102.00 45,316.00 Markets and Slaughterhouses 950,244.39 270,858.60 Other Structures 1,316,318.50 1,989,010.20 Office Equipment 161,722.29 198,813.00 Furniture and Fixtures 108,182.00 27,421.40 IT Equipment and Software 301,117.00 444,444.00 Machineries 547,311.00 146,513.20 Agricultural, Fishery and Forestry Equipment 13,533.50 Communication Equipment 6,784.00 Construction and Heavy Equipment 2,761,107.41 422,966.00 Fire fighting Equipment and Accessories 39,500.00 Hospital Equipment 5,691.00 32,721.00 Military & Police Equipment 2,790.00 Sports Equipment 16,628.60 13,230.00 Technical and Scientific Equipment 77,369.00 78,470.04 Other Machineries and Equipment 177,779.63 66,035.00 Motor Vehicles 4,572,744.10 4,593,085.07 Watercrafts 8,360.00 Other Transportation Equipment 61,853.42 Other Property, Plant and Equipment 391,223.08 118,697.62 Roads, Highways and Bridges 2,489,051.92 5,574,867.13 Parks, Plazas and Monuments 1,174,215.42 Artesian Wells, Reservoirs, Pumping Stations and conduits 296,937.00 2,510,007.00 Flood Controls 432,852.50 384,000.50 Waterways, Aqueducts, Seawalls, Riverways 1,008,865.00 Other Public Infrastructures 3,357,322.25 3,518,749.14Confidential Expenses 372,300.00 554,340.00Intelligence Expenses 320,000.00 568,860.00Extraordinary Expenses 21,805.34 62,726.00Miscellaneous Expenses 144,552.00Taxes, Duties and Licenses 698,742.29Fidelity Bond Premiums 48,939.75 57,856.55Insurance Expenses 635,716.49 1,220,094.68Sub-total P 118,409,602.39 P109,336,628.44

Sub-total forwarded P 118,409,602.39 P109,336,628.44 Non-Cash Expenses Depreciation - Land Improvements 1,609,250.04 1,531,584.50 Electrification, Power and Energy Structures 1,422.00 1,422.00 Office Buildings 4,117,345.96 3,996,563.54 School Buildings 1,166,582.01 1,029,858.50 Hospitals and Health Centers 104,283.97 100,349.88 Markets and Slaughterhouses 1,112,295.33 1,078,597.96 Other Structures 3,860,207.91 3,828,651.02 Office Equipment 2,693,288.17 2,642,215.42 Furniture and Fixtures 215,737.63 199,475.74 IT Equipment 1,613,198.61 1,461,566.19 Library Books 440,067.02 433,100.52 Machineries 133,540.78 20,684.53 Agricultural, fishery and Forestry Equipment 2,880.00 2,160.00 Communication Equipment 310,566.79 305,164.39 Construction and Heavy Equipment 1,198,343.67 693,781.17 Fire fighting Equipment and Accessories 86,747.29 86,747.29 Hospital Equipment 44,565.71 43,133.21 Medical, Dental and Laboratory Equipment 11,983.41 11,131.58 Military and Police Equipment 14,428.44 9,408.82 Sports Equipment 661.50 661.50 Technical and Scientific Equipment 520,127.94 485,200.89 Other Machineries and Equipment 723,676.61 666,297.96 Motor Vehicles 2,402,642.52 2,402,006.09 Watercrafts 197,018.92 197,018.92 Other Property, Plant and Equipment 2,105,218.99 2,040,518.94 Other Maintenance and Operating Expenses 11,591,632.61 15,544,808.83 Sub-Total P 154,687,316.22 P 148,148,737.83

17.3 Financial Expenses

P 7,963,498.27

2008 2007 Documentary Stamps Expenses P 69,125.50 P 3,300.00Interest Expenses 7,877,842.77 11,782,169.63Other Financial Charges 16,530.00 114,064.00

Sub-Total P 7,963,498.27 P 11,899,533.63Grand Total P358,455,939.39 P 337,265,544.04

18. Subsidies and Donations P 38,581,011.59 This account consist of the following: 2008 2007 Subsidy To Local Government Units P 14,087,881.55 P 10,095,240.87Subsidy to NGOs/POs 3,111,838.24 5,701,753.68Subsidy to Other Funds 223,125.00 595,000.00Donations 21,158,166.80 17,734,820.25 Total P 38,581,011.59 P 34,126,814.80

Subsidy to Other Funds amounting to P223,125.00 represent the contribution to Metro Naga Trust Fund for the four quarters of 2007 for the wages of personnel and other operating expenses of Metro Naga Development Council.

19. Related Transactions

MEMORANDUM OF AGREEMENT / JOINT VENTURES WITH VARIOUS AGENCIES

IMPLEMENTED IN CY 2008 DATE NAME OF AGENCY PARTICULARS

January , 2008 HEIRS OF SPOUSES MARIANO DY-LIACCO JR. and BEATRIZ URSUA-DY-

LLACCO

In support of and in furtherance of the Socialized Housing Program of the City, the Heirs of Dy-Llacco agreed to convey, cede and transfer an area of 11,505 square meters declared under OCT 505, and allow the city to pay only for the 11,057 square meters due to encroachment by the National Highway to the 448 square meters. The total consideration shall be for an amount of Five Million Five Hundred Twenty Eight Thousand Five Hundred Pesos (P5,528,500.00.)

May 19, 2008 COMMUNITIES PHILIPPINES CAM. SUR

INC.

The City of Naga , having an existing inventory of HLURB accredited socialized housing units in Jolly Neighbors Resettlement Project located at Barangay Sta. Cruz, Naga City, and the Communities Philippines Cam. Sur, Inc. in compliance to Sec. 18 of RA 7279 agree to the mutual covenants and stipulations as follows: 1. Assignment of 173 Socialized Housing Units participating, and 2. Agree on the warranties and representations as stipulated under Nos. 2(a-c) of par. 7 of this MOA.

June, 2008 NAGA CITY GOVERNMENT

EMPLOYEES ASSOCIATION, INC.

(NACIGEA)

MOA between the City and NACIGEA authorizing the monthly payroll deduction from salaries of employees in the amount of Ten (P10.00) pesos for permanent and casual employees, voluntary contribution of Fifty (P50.00) pesos for Department Heads, and One Hundred (P100.) pesos for elected officials, as financial assistance to employees who would be in critical health condition and death benefit assistance as agreed upon by the members.

June 2008 FPM CORPORATION REPRESENTED BY MR.

FORTUNATO P. MENDOZA

The contract between the City and FPM Corporation for the operation of the Naga City Central Bus Terminal Complex, inclusive of the terminal proper, stalls, booking offices, other vending areas, the existing terminal management office(first and second floors), and the rest of the buildings and its appurtenances including the parking and open spaces but excluding the undeveloped portion of the second floor for a period of five (5) years commencing upon receipt by FPM Corporation of the Notice of Ratification to be issued by the Sangguniang Panlungsod and the Notice to Operate from the City Mayor as required under Ordinance No. 2002-049. FPM Corporation shall pay on its first year of operation to the City the total sum of Thirteen Million Five Hundred Thousand Pesos (P13,500,000.00) Philippine currency, computed annually, in accordance with the fees stated in Ordinance No. 2002-047. The total amount of lease rental shall be increased by five percent (5%) annually reckoned from the date of effectivity of this agreement.

June 12, 2008 THE NATIONAL COMMISSION ON THE

ROLE OF FILIPINO WOMEN(NCRFW), and THE ASSOCIATES IN

RESEARCH AND COMMUNITY

EMPOWERMENT SERVICES (ARCES)

The Metro Naga Development Council(MNDC), a recipient of project grants from the Gender-Responsive Economic Actions for Transformation of Women (GREAT WOMEN) Project funded by the Canadian International Development Agency (CIDA), and The NCRFW as the lead executing agency of CIDA has partnered with ARCES, a Metro Naga-based NGO engaged in research and community empowerment, enterprise development and gender issues, in the design of the baseline assessment of LGU

competencies and the development of the research tools, agree to develop sustainable SMEs that can create more, better and decent jobs for both men and women, and to contribute to a gender-responsive environment for the economic empowerment of women, particularly women in micro-enterprise.

Sept. 4, 2008 THE NATIONAL COMMISSION FOR

CULTURE AND THE ARTS (NCCA)

The NCCA, a government institution mandated to cater to the development of Philippine culture and arts has approved an amount of P174,000.00 and had entered into this MOA with the city government for the conduct of a two-day culture and heritage awareness training workshop among 100 sanggunian members and barangay officials of the city, aimed at promoting culture and the arts of Naga through relevant community-centered and culturally-grounded training program for social solidarity and peace, and to facilitate interaction and dialogue on community heritage concerns on the use of culture and the arts as a tool for social transformation.

20. Subsequent Events The following remittances were made in January, 2009: Bureau of Internal Revenue P 658,071.04 Government Service Insurance System 2,881,885.49 Pag-Ibig Fund 491,171.61 Philhealth ___187,775.00 TOTAL P 4,218,903.14 Settlements of cash advances for the following accounts were made in January, 2009: Due from Officers and Employees P 172,904.36

Due from NGOs/Pos 100,000.00 TOTAL P 272,904.36

PART - II

DETAILED FINDINGS AND RECOMMENDATIONS

DETAILED FINDINGS AND RECOMMENDATIONS

I – FINANCIAL AND COMPLIANCE AUDIT

A. CASH ACCOUNTS

1. Cash advances amounting to P997,775.38 were granted without first settling or a proper accounting thereof was made of the previous cash advance, while cash advances totaling P5,119,679.84 were not liquidated within the prescribed period, contrary to Sections 4.1.2 and 5.1 of COA Circular No. 97-002, respectively. These procedural defects created doubts on the validity and regularity of the grant and liquidation thereof.

Section 4.1.2 of COA Circular No. 97-002 states that, “No additional cash

advances 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.”

Cash advances both by the cash disbursing officers and employees which

remained unliquidated as of December 31, 2008 amounted to P7,401,679.29 (Annex 1). Analysis of these cash advances disclosed that the amount of P997,775.38 (Annex 2) was granted without first settling or a proper accounting thereof was made of the previous cash advance, contrary to Section 4.1.2 of COA Circular No. 97-002.

Further, out of the total cash advances of P7,401,679.29, the amount of

P5,119,679.84 (Annex 2) was not liquidated within the prescribed period. This is not in keeping with the provision of Section 5.1 of COA Circular No. 97-002 which states thus, “The AO shall liquidate his cash advances as follows:

5.1.1 Salaries, wages, etc. – within five(5) days after each fifteen (15)

day/end of the month pay period. 5.1.2 Petty Operating Expenses and Field Operating Expenses – within

twenty (20) days after the end of the year; subject to replenishment as frequently as necessary during the year.

5.1.3 Official Travel – within sixty (60) days after return to the Philippines in the case of foreign travel or within thirty (30) days after return to his permanent official station in the case of local travel, as provided for in EO 248 and COA Circular No. 96-004.

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 and the instruction of other sanctions as provided for under paragraphs 9.2 and 9.3 hereof.”

These observations are reiteration of the audit findings contained in the

previous audit reports so as to remind management of their firm implementation of COA Circular 97-002 in the grant and liquidation of cash advances. Accordingly,

these procedural defects created doubts on the validity and regularity of the grant and liquidation thereof.

Worthy to note that compared with last year, unliquidated cash advances as of

December 31, 2008 totaling P7,401,679.29 is lower by P3,452,275.98 than the previous year’s balance of cash advances, hence a decrease by 32%.

The city management responded positively. Accounting of the previous cash

advance was already made before a new cash advance is granted. As to the unliquidated cash advances amounting to P5,119,689.94, the city management has sent out demand letters to individuals to liquidate their cash advances. Liquidations were recorded in January and February, 2009 pertaining to the balance of cash advances as of December 31, 2008. The Auditors were also informed by the City Accountant that effective April, 2009, a list of unsettled cash advances as of March 27, 2009 shall be submitted to the Payroll Officer to effect deduction from April 1 to 15, 2009 payroll.

We recommend that the Office of the City Accountant should ensure that

Sections 4.1.2 and 5.1 prescribed in COA Circular No. 97-002 which pertain to the grant and liquidation of cash advance be strictly enforced.

Further, the agency is enjoined to undertake administrative remedial measures

and/or appropriate legal actions for the recovery and/or settlement of unliquidated cash advances. Failure of the accountable officers to liquidate their cash advances within the prescribed period shall constitute a valid cause for withholding of salaries.

2. Reconciling items with a net amount of P999.90 affecting the account Cash-Disbursing Officers were not taken up in the agency books, contrary to Section 112 of P.D. 1445, thus, overstating the account balance by the same amount.

Section 112 of P.D. 1445, known as “The Government Auditing Code of the

Philippines” states that: “Each government agency shall record its financial transactions and operations conformably with generally accepted accounting principles and in accordance with pertinent laws and regulations.” An examination of the cash and accounts of Ms. Cyrrene T. Mongoso, Cashier III, designated as Cash-Disbursing Officer was conducted on May 8, 2008 covering the period from June 12, 2007 to May 8, 2008. After review of the transactions from the date of the last examination to the date of current examination, it was noted that generally, cash advance disbursement vouchers, as entered in the cashbook, were properly approved and payments duly acknowledged and that the corresponding liquidation reports and supporting documents were properly made. However, in determining that the cash advance balance in the Cashbook of the accountable officer as of date of examination is reconciled with that of the accounting and related records, it was disclosed that there were certain reconciling items with a net amount of P990.90 in the agency books which were not yet adjusted as of May 8, 2008 in the

Cash-Disbursing Officer subsidiary ledger account balance of the concerned accountable officer. The adjustments noted pertain to an over-liquidation of cash advances by P0.10 per CB# 2959 dated July 5, 2006 and an unrecorded liquidation report submitted on October 30, 2007 for the reimbursement of telephone expenses-mobile of Mr. Ramon Florendo per CB# 5122-13 in the amount of P1,000.00. However, further inquiry with concerned personnel disclosed that the amount of P1,000.00 pertains to unrecorded liquidation on the cash advance made to Delia Obana. In effect, the Cash-Disbursing Officers subsidiary account balance of Cyrrene T. Mongoso as of May 8, 2008 in the agency books was overstated by a net amount of P999.90. As such, we propose that the adjusting journal entries in Annex 3 should be prepared to take up the adjustments noted using a Journal Entry Voucher (JEV) and accordingly record in the appropriate agency books. During the exit conference, the City Accountant said that adjustment was already effected. Copy of the Journal Entry Voucher shall be submitted to the Office of the Auditor. We recommend that the City Accountant should prepare the necessary adjustments in the Journal Entry Voucher and to record immediately the adjusting journal entries in the appropriate agency books.

B. PROPERTY, PLANT AND EQUIPMENT (PPE) 3. The correctness and validity of the Inventories and Property, Plant and

Equipment (PPE) accounts totaling P3,079,308.38 and P838,036,762.15, respectively as of December 31, 2008, cannot be established due to the continued inability of management to complete the conduct of physical inventory and prepare the Reports on the Physical Count of Inventories and Physical Count of Property, Plant and Equipment, contrary to Section 124 of the New Government Accounting System (NGAS) Manual, Volume 1 and Section 156 of COA Circular 92-386.

Section 124 of Volume I of the Manual on New Government Accounting System (NGAS) provides thus, “The local chief executive shall require periodic physical inventory of supplies or property. Physical count of inventory items by type shall be conducted semestrally and reported in the Report of the Physical Count of Inventories (RPCPI.) This report 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 made 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.”

Further, Section 156 of COA Circular 92-386 dated October 20, 1992

supports that the local chief executive shall require an annual physical inventory of all supplies or property of the LGU as of December 31 of each year, to be conducted by office or department by a committee of three consisting of the representative of the local chief executive as chairman and the general services officer, city/municipal or barangay treasurer, as the case may be, and the supply accountable officer of the department or office concerned, as members. The inventory report shall be submitted to the local chief executive and copy furnished the provincial, city or municipal auditor concerned.

Inventories and Property, Plant & Equipment account showed a year-end balances of P3,079,308.38 and P838,036,762.15 per books, respectively. (Annexes 4 & 5)

Previous audit reports already contained same observation but still no Report

of the Physical Count of Inventories and Report on the Physical Count of Property, Plant and Equipment as of any given date has been submitted to the audit team.

The Officer-in-Charge of the General Services Department brought up during

the exit conference that inventory taking was not continued because of the deficiency in manpower and due to the failure of almost 75% of the Departments/Offices to submit to his Office the list of the properties being used and/or assigned to their concerned offices. However, it was resolved that actual inventory taking will be started by posting a property tag to each property in every office on an “as is where is basis”.

We recommend that concerted efforts be exerted to conduct the physical

inventory taking of all the properties and inventories of the City and submit the inventory reports to the concerned authorities.

It is likewise recommended that proper form as specified by Section 124 of

Volume I of the Manual on NGAS be followed in reporting the physical count of inventories and property, plant and equipment by type to facilitate reconciliation with the accounting records later.

C. TRUST LIABILITIES 4. LGU-Naga City remittances of various income taxes withheld pertaining to CY

2008 were paid to a BIR Revenue Collection Officer, contrary to BIR Memorandum dated November 27, 2007 and more so, not in conformity with

Revenue Memorandum Order No. 10-2006 dated December 12, 2005, thus, resulted in occurrence of illegal scheme made by the BIR Revenue Collecting Officer to defraud the government, for an estimated amount of P3,844,629.45 and for the LGU to be penalized and imposed with adverse sanctions by BIR.

Bureau of Internal Revenue (BIR) Memorandum dated November 27, 2007 (Annex 6) treating on the request to allow Revenue Collection Officers (RCOs) to receive tax payments, in cash or in checks over the P10,000.00 threshold, provides that:

“Pursuant to Section III (4) of Revenue Memorandum Order (RMO) No. 4-2007, “The issuance of RORs shall be limited to tax payments, in cash or in check, not exceeding the amount of Ten Thousand Pesos (P10,000.00) per return”. Considering, however, the limited accommodation being extended by the Authorized Agent Banks to taxpayers paying thru the banking facilities and so as not to hamper collection efforts of regional offices/district offices, it is hereby recommended that the threshold for tax payments received by RCOs be increased to P20,000.00.”

In compliance with COA Memorandum dated April 29, 2008 issued by Assistant Commissioner Gloria S. Cornejo of the Local Government Sector requesting the local accountants to send confirmation letter to the BIR for the confirmation of BIR remittances for CY 2008, the City Accountant of Naga sent a confirmation letter to the BIR Revenue District Office No. 65, Naga City, on January 25, 2009 requesting confirmation of the receipt and the taking up in the books of BIR, the CY 2008 various withholding taxes remittances made by Naga City. The City Accountant further requested that the BIR confirmation reply should be addressed to the COA Audit Team Leader, City Auditor’s Office, Naga City, and copy furnished the City Accountant. Accordingly, the Auditor received the BIR confirmation reply dated February 5, 2009. Analysis made on the BIR confirmation reply disclosed that it has become the practice of LGU-Naga City to remit/pay the various monthly BIR Income Taxes Withheld to Mr. Alan M. Competente, Revenue Collection Officer (RCO) of the Revenue District Office No. 65 assigned at the Municipality of Cabusao, Camarines Sur who acknowledged the receipt of the payment through the issuance of a Revenue Official Receipt (ROR) even though the amount paid exceeds the allowed amount of P20,000.00, contrary to the cited BIR Memorandum. Further analysis on the confirmation data reply duly signed by the Revenue Collection Supervisor and noted by the Revenue District Officer (Annex 7) revealed that there were discrepancies in the amount of several payments made by the City Government when compared to the amount reported by the Revenue Collection Officer to the BIR. The total discrepancies noted on the suppliers withholding taxes amounted to P3,844,629.45 in 2008 (Annex 8).

Review of the original copy of the ROR received by LGU-Naga City, issued by the Revenue Collection Officer pertaining to those remittances found to have discrepancies showed that the amounts as reported by the City Accountant in the remittance data for confirmation by the BIR were correct. However, based on the confirmation reply made by BIR officials, it showed that the concerned Revenue Collection Officer has under-remitted/deposited the collections received by him from the City Government of Naga on its BIR remittances totaling P3,844,629.45 for 2008 (Annex 8), to the detriment of the Philippine Government. Initial talks made with the Assistant Revenue District Officer of RDO No. 65 in Naga City disclosed that the BIR has formed a Fact Finding Investigation Team and that the investigation of the instant case is in progress. Accordingly, we also made initial verbal report and assistance in providing the pertinent documents to the assigned Auditor in charge in auditing BIR RDO No. 65 transactions for her verification and appropriate action. As far as LGU-Naga City is concerned, the agency has correctly and faithfully remitted/paid the amounts to the BIR Revenue Collection Officer, however, the issue on under-remittance/deposit could have been avoided if payments were not made to the BIR Revenue Collection Officer, much more that the amounts remitted/paid exceeded P20,000.00 which is contrary to the cited BIR Memorandum. We believe that the right procedure is that all income taxes withheld and received by LGU-Naga City should have been remitted/paid to the BIR through the Electronic Filing and Payment System (eFPS) as mandated by Revenue Memorandum Order (RMO) No. 10-2006 dated December 12, 2005 inasmuch as the City of Naga has its own e-mail account and internet access. The system ensures that all payments made by the agency through the eFPS will be received and recorded correctly in the bank account of the BIR thru the bank debit system using the internet banking facilities of any BIR Authorized Agent Banks accredited to accept payment through eFPS. Item III - Policies, paragraph A of the RMO states that: “eFPS shall be available to all taxpayers with e-mail account and internet access who are registered with the BIR Integrated Tax System (ITS). Taxpayers who avail of eFPS shall enroll online with the eFPS through BIR website. For Large Taxpayers, Excise Taxpayers, Top 10,000 taxpayers identified/notified by the Commissioner under Revenue Regulations No. 17-2003, Stock brokers, Insurance Companies, Government Agencies and Instrumentalities including Local Government Units (LGUs) and Contractors and/or Suppliers transacting business with government, enrollment to eFPS shall be mandatory (underscoring ours). Failure to comply with this provision shall be punishable under Section 275 of the NIRC of 1997 and the pertinent implementing regulations.”

Section 275 of the National Internal Revenue Code (NIRC) of 1997 provides that “any person who violates any provision of this Code or any rule or regulation promulgated by the Department of Finance, for which no specific penalty is provided by law, shall, upon conviction for each act or omission, be punished by a fine of not more than One thousand pesos (P1,000.00) or suffer imprisonment of not more than six (6) months, or both.” In this regard, to avoid unwanted future adverse sanctions by the Bureau of Internal Revenue under Section 275 of the NIRC of 1997 and to avoid occurrence of illegal scheme to defraud the government through the use of RORs by BIR Revenue Collection Officer/s, we suggest that the City of Naga should register now with the BIR Integrated Tax System and enroll in the eFPS following the revised guidelines and procedures as mandated under Revenue Memorandum Order No. 10-2006. In response, the City Treasurer has immediately instructed the personnel-in-charge in the preparation of the BIR remittance to remit the various taxes withheld to the Land Bank of the Philippines and Development Bank of the Philippines, Naga branch effective December, 2008. Also, the Office of the City Treasurer had already coordinated with the BIR Revenue District Office No. 65 regarding the city’s registration with BIR Integrated Tax System and enrollment in the BIR Electronic Filing and Payment System (eFPS). We recommend that the Local Chief Executive should initiate the agency’s registration with the BIR Integrated Tax System and enrollment in the BIR Electronic Filing and Payment System (eFPS) for the filing and payment of the Income Taxes Withheld by the agency in accordance with Revenue Memorandum Order No. 10-2006.

5. The entries made in recording the BIR tax refund payable for over-withheld taxes on compensation for 2007 totaling P840,097.24 in the agency books were found not appropriate contrary to Section 112 of P.D. 1445, thus, understating the account Due from NGAs and the account Due to BIR by P840,097.24.

Section 112 of P.D. 1445, known as “The Government Auditing Code of the

Philippines” states that: “Each government agency shall record its financial transactions and operations conformably with generally accepted accounting principles and in accordance with pertinent laws and regulations.”

Audit of the account Due to BIR from January to June 30, 2008 disclosed that

there were improper entries made in recording the BIR tax refund payable for the over-withheld taxes in 2007 which were eventually offset from the 2008 monthly employees BIR income tax withheld on compensation. Records revealed that in 2007, employees over-withheld taxes on compensation, duly refunded in advance by the agency to the employees, amounting to P840,097.24, were not properly recorded in the agency books. Instead of debiting the account “Due from NGAs” to recognize the

amount due from the Bureau of Internal Revenue (BIR) for the advance payment made by the agency to the employees for the excess tax withheld in 2007, the account “Due to BIR” was used. See Annex 9 for the suggested adjusting journal entries. In effect, the accounts Due from NGAs and Due to BIR were understated by P840,097.24.

The City Accountant, in her reply to the audit observation issued, explained that the city government is allowed under the National Internal Revenue Code to offset from the succeeding remittances the balance of tax refund until its full recovery. It was later found, however, that it is more appropriate to set up a receivable account from the BIR for the tax refunds which the city has paid in advance. She has promised to prepare the necessary adjusting/correcting entries to effect adjustments.

We recommend that the City Accountant immediately draw the necessary Journal Entry Vouchers and record the adjusting journal entries in the appropriate agency books.

6. Remittances of Income Taxes Withheld on Compensation for December 2007 and January 2008 were not recorded in the agency books and inappropriate account was used in recording the remittance made for the month of February 2008, contrary to Section 112 of P.D. 1445, thus, overstating the accounts Due from NGAs by P840,097.24; Due to BIR by P751,870.19 and Tax Refund Payable by P88,227.05.

Section 112 of P.D. 1445, known as “The Government Auditing Code of the

Philippines” states that: “Each government agency shall record its financial transactions and operations conformably with generally accepted accounting principles and in accordance with pertinent laws and regulations.”

Audit of the account Due to BIR from January to June 30, 2008 disclosed that

remittances made to the BIR for the income taxes withheld on compensation pertaining to the months of December 2007 and January 2008, duly received by the BIR on January 7 & 15, 2008 and February 11, 2008, respectively, were found unrecorded in the agency books. Furthermore, the journal entry made and recorded in the agency books for the remittance of income tax withheld on compensation for February 2008 was found inappropriate. The non-recording and use of an inappropriate account recorded in the agency books resulted in the overstatement of the accounts: Due from NGAs by P840,097.24; Due to BIR by P751,870.19, and Tax Refund Payable by P88,227.05. See Annex 10 for the suggested adjusting journal entries.

The City Accountant explained that remittances for December, 2007 and January, 2008 were inadvertently not recorded in the agency books because no cash was actually remitted to the BIR. A tax return was submitted to the BIR to effect

remittance and offset the amount of tax refunds paid for taxable year 2007. For February, 2008, the account Tax Refund Payable was inadvertently credited instead of the account Due From NGAs. The fact that no receivable account from BIR was booked up at year end for the tax refunds, the account Due from NGAs was not credited in this instance. The City Accounting office has promised to prepare the necessary correcting entry as recommended.

During the audit exit conference, the City Accountant said that adjustment was already effected. Copy of the Journal Entry Voucher shall be submitted to the Office of the Auditor.

We recommend that the City Accountant immediately draw the necessary Journal Entry Vouchers and record the adjusting journal entries in the appropriate agency books.

7. Inaccurate amount of personal exemptions applied in the computation of withholding tax deducted from employees’ monthly compensation income, among others, resulted in huge amount of tax refund on employees remitted taxes withheld for 2007 to the Bureau of Internal Revenue (BIR), driving the agency to pay in advance P840,097.24 to the employees with over-withheld taxes in 2007 as required in the BIR annualized withholding tax method. The amount could have been used just in time for the agency’s own operation.

Sec. 2.78 of the Bureau of Internal Revenue (BIR) Revenue Regulations No. 2-98 provides that: “the withholding of tax on compensation income is a method of collecting the income tax at source upon receipt of the income. It applies to all employed individuals whether citizens or aliens, deriving income from compensation for services rendered in the Philippines. The employer is constituted as the withholding agent.”

Review of the Annual Information Return of Income Taxes Withheld on

Compensation (BIR Form 1604-CF) duly received by the BIR on January 31, 2008 revealed that adjustments on over-withheld taxes for the year 2007 amounted to P840,097.41 in the General Fund (GF) and P19,119.00 in the Special Education Fund (SEF). In effect, the agency had to refund the over-withheld taxes on compensation income of employees totaling P859,216.41 in 2008 as required in the BIR annualized withholding tax method. The agency was only able to deduct the amount of P840,097.24 in the GF from the remittance amount of taxes withheld from compensation income of the employees upon filing of the remittance returns from January to March 2008, while recovery of refunded amount in the SEF is still on-going. On the other hand, we noted that there is still a difference of P0.17 (P840,097.41-P840,097.24) in the GF between the amount reported in the Annual Information Return and the amount refunded to the employees. This requires further adjustment. In this case, we are concerned that instead of using the refunded amount

just in time for the agency’s own operation, the agency assumed payment of what the Bureau of Internal Revenue should be paying.

Interview with the concerned accounting employee assigned to prepare the

withholding tax on employees compensation income disclosed that a large portion of the over-withheld taxes on compensation income was due to insufficient amount of personal exemptions applied in computing the monthly income tax withheld on compensation income for permanent and casual employees in 2007. The accounting employee found the personal exemptions data included in the computer Personnel Information System program lacking the amount for the additional personal exemptions, thus, was obliged to resort to manual encoding. Furthermore, most of the casual employees have not submitted their respective updated personal exemptions information to the accounting office. Corrections on these personal exemptions based on circularized confirmation list on personal exemptions (basic and additional) from the employees were only made in the latter part of 2007, particularly, when the Annual Information Return on Income Taxes Withheld on Compensation was being prepared. This resulted in many individual excess tax withheld, where the amount of cumulative tax already deducted and withheld is greater than the annual tax due. This could have been prevented if at the start of the year, accurate employees’ personal exemptions (personal and additional) were applied. It was also noted that the agency has no complete records of the employees Application for Registration (BIR Form No.1902) and the Certificate of Update of Exemption and of Employer’s and Employee’s Information (BIR Form 2305) where the personal and additional exemptions of the employee are indicated. These BIR forms should be supported with authenticated/certified birth certificates (employee and qualified dependent) and marriage contract for married employees. In this regard, we suggest that the City Human Resource Management Office require all the agency employees to prepare and submit an updated Certificate of Update of Exemption and of Employer’s and Employee’s Information with supporting authenticated/certified birth certificates of the employee and his qualified dependents and duly certified marriage contract for married employees. An updated list of the personal exemptions of all employees should be furnished the accounting office to be used in updating its personnel information data. This would ensure that personal exemptions are accurately applied in the computation of the withholding tax on employee’s compensation income and would result in a much lower tax refund in the ensuing year. The City Accountant replied that she has coordinated with the Human Resource and Management Office as well as with the Electronic Data Processing Office to require from the employees an update of their individual annual income tax data and the upgrade of the payroll program to be able to make an adjustment on a monthly basis so that by year-end, the taxes withheld are correctly adjusted.

The City Human Resource and Management Officer also replied that effective 2009 and thereafter, at the start of the year, all employees will be required to submit BIR Form 2305 to the CHRMO, copy furnished the City Accountant. We recommend that the Office of the City Human Resource and Management Officer require all agency employees to prepare and submit an updated Certificate of Update of Exemption and of Employer’s and Employee’s Information (BIR Form 2305) together with the required attachments and to furnish the City Accountant’s Office a certified copy of the updated list of all the agency employees personal exemptions for proper application in the computation of the withholding tax on compensation income. We also recommend that the City Accountant with the support and assistance of the City Electronic and Data Processing Unit, review and update/upgrade the accounting office computer Personnel Information System program pertaining to its payroll system which includes the computation of the withholding tax on compensation income of employees.

D. REAL PROPERTY TAX REMITTANCE OF CITY TO BARANGAYS

8. Shares on the Income on Real Property Tax (RPT) of the 27 barangays of the city were not immediately released by the City Government of Naga within the period prescribed by Section 271(d) of the Local Government Code as amended, thus depriving each barangay government of the immediate use of said funds and exposing the same to risk of misappropriation and/or unauthorized use.

Section 271 (d) of the Local Government Code, as amended, require thus:

“The share of each barangay shall be released, without need of any further action, directly to the barangay treasurer on a quarterly basis within five (5) days after the end of each quarter and shall not be subject to any lien or holdback for whatever purpose.”

Aging of the remittances made reflected a delay of 62 days on the RPT shares collected for the previous year totaling P6,907378.96 (Annex 11). On the other hand, while RPT share for the month of January was partially remitted ahead of time, share for the rest of the months excluding the last quarter of 2008 were remitted as shown in Annex 11, beyond the required five days after the end of each quarter.

The P3,278,410.19 balance of the “Due to LGUs” account as of December 31,

2008 pertaining to RPT shares of the 27 barangays is comprised of the following unremitted RPT shares for CY 2008, viz;

MONTH WITHHELD AMOUNTJune (unremmitted balance) P 191,015.11 July 676,096.03 August 552,017.37 September 0.03 November 539,491.94 December 1,319,789.71

TOTAL P 3,278,410.19 Take note that the RPT share for the month of June was supposed to be

remitted on the 5th day of July while those withheld for the months of July and August should have been remitted on October 5, 2008.

The facts presented showed that notwithstanding the cited provision of the

Local Government Code, the city had repeatedly defaulted in the immediate quarterly release of the entire barangay share on the RPT income of Naga City.

Inquiry revealed that the entire monthly RPT share of each barangay was not remitted in full because of the practice of the Accounting Department to withhold certain amount to cover the payment of supplies borrowed by the barangay from the General Services Department of the City and other expenses for barangay accounting services.

We emphasize that the share of the barangays’ Real Property Taxes collected

by the Office of the City Treasurer do not constitute income or revenues that pertain or accrue to the City of Naga, for they are mere trust receipts that should be remitted to respective barangays within the reglementary period afore-mentioned. Non-remittance of subject taxes within the prescribed period deprive the barangay government of the immediate use of said funds. It also exposes the same funds to risk of misappropriation and/or unauthorized use.

The City Accountant explained in her reply to our Audit Observation

Memorandum previously issued, that it was their practice to transfer the barangay shares to Trust Fund when there was an account “Cash in City Treasury”. However, they already stopped that practice and have transferred all the Trust Fund balance out of the RPT collections to the various barangays of Naga City. They have also installed a system and assigned personnel who will process the transfer of barangay RPT shares from the General fund to all the barangays of the city.

As regards the unremitted amount of P1,419,128.85 representing the months

of June, July and August, 2008, the City Accountant explained in her letter dated April 3, 2009 that it was already part of the P2,341,589.04 remittance made on October 2, 2008 while RPT shares for November and December were already remitted in full in January, 2009.

Presented in Annex 11 is the balance of P3,558,757.49 as of August, 2008 in

the General Fund prior to transfer of fund from General Fund to Trust Fund in the

amount of P2,139,628.98 on September 23, 2008. The difference of P1,419,128.51 pertains to accumulated unremitted balances of RPT share of the barangays for the previous months which remained unremitted even after the remittance on January, 2009 of the November and December, 2008 RPT shares. We maintain that our recommendation be implemented.

We recommend that the amount of P3,278,410.19 share of the barangays on

the RPT collected by the City for the months of June to December, 2008 should be remitted immediately to avoid unwanted sanctions.

We also recommend that the City Accountant should dutifully and promptly

remit all barangay shares on RPT in the succeeding quarters as prescribed under Section 271 (d) of the Local Government Code.

E. SUBMISSION OF FINANCIAL STATEMENTS/ACCOUNTS/MANDATORY REPORTS

9. The LGU was delayed in the submission of CY 2008 reports and accounts

contrary to Section 122 of P.D. 1445, known as “The Government Auditing Code of the Philippines” and other pertinent COA Regulations thus, restricted timely post audit of accounts, and detection and correction of recording errors.

Section 122 of P.D. 1445, known as “The Government Auditing Code of the

Philippines” provides that the Commission may under regulations issued by it require the agency heads, chief accountant, budget officers, cashiers, disbursing officers, administrative or personnel officers, and other responsible officials to submit trial balances, physical inventory reports, current plantilla of personnel, and such other reports as may be necessary for the exercise of its functions”.

In line with this, COA Circular No. 94-001 was issued, quoting among others,

the responsibilities of concerned agency officials on the submission of reports and accounts. “Section 7. The accountable officer shall submit within five (5) days after the end of each month, reports of collections and/or disbursements and other required reports to the chief accountant for recording in the books of accounts.”

“Section 8. The Chief Accountant, Bookkeeper or other authorized official performing accounting and/or bookkeeping functions of the audited agency shall ensure that: the reports are submitted to the auditor within (10) days from such receipts.” “Section 9. In line with the principle of fiscal responsibility, the head of the agency, who is primarily responsible for all government funds and property pertaining to his/her agency, shall ensure that the required financial and other reports

and statements are submitted by the concerned agency officials in such form and within the period prescribed by the Commission.”

Also, Section 3.2 of COA Circular No. 96-11 requires that, “The Local

Accountants shall within ten (10) days from receipt of the Bank Statements, reconcile the same (BS) with the General Ledgers (GL) and prepare the BRS in five (5) copies, to be distributed as follows:

1. Original - bank manager thru the resident auditor 2. Duplicate – local auditor 3. Triplicate – local treasurer 4. Quadruplicate – COA Regional Director 5. Quintuplicate – Provincial/City/Municipal Accountant Records of the Office of the Auditor showed that some of the LGU’s reports

and accounts were submitted beyond the prescribed time set by the Commission (Annex 12). The untimely submission of the required reports and accounts therefore, has precluded the Auditor to timely post audit the city’s transactions and recording error/s was/were not immediately detected and corrected.

In response to this observation, the City Accountant explained that November

and December accounts were not transmitted on due date because of the unavailability of racks where vouchers are to be placed in folded form and in chronological order. Said racks were delivered only in January, 2009. She promised however, that the remaining accounts in their custody will be submitted immediately. As regards the delayed submission of Bank Reconciliation Statements, the City Accountant stressed that it is caused by the limited personnel in her department considering the tremendous increase of the city’s transactions, thus resulting to overloading of functions to the personnel assigned with the BRS preparation. Also contributory factor is the delayed issuance by the depository banks of the monthly Bank Statements.

The City Treasurer also explained that his Office have been submitting the

required reports to the City Accountant daily and that the report for the transactions for the last day of each month is usually submitted within five days after the end of the month except when the last day falls on a day before Saturday, Sunday or Holidays, in which case reports are submitted the following working day.

Records of the City Auditor’s Office however revealed that not all Bank

Reconciliation Statements and Accounts for the year 2008 were submitted to the same office by the City Accountant.

We recommend that the City Accountant should immediately submit the

remaining reports and accounts for Calendar Year 2008 and to strictly observe Section 8 of COA Circular No. 94-001 and Section 3.2 of COA Circular No. 96-11 in

the ensuing year, so that timely post audit of transactions will be facilitated and early detection and correction of recording error/s can be timely effected.

F. BANK RECONCILIATION STATEMENT

10. Long existing reconciling items reflected in the Bank Reconciliation Statements (BRS) as of December 31, 2008 of several bank depository accounts of the City remained unadjusted, contrary to Section 3.3 of COA Circular No. 96-11, thus, Cash in Bank accounts were rendered inaccurate and unreliable.

Section 3.3 of COA Circular No. 96-11 provides that “The Local Accountants

shall draw Journal Vouchers to record all valid reconciling items that require adjustment and correction in the General Ledger.

Submitted BRS as of December 31, 2008 for some of the bank depository

accounts of the City reflected the following long existing reconciling items, viz; Inclusive Dates Gen. Fund SEF Trust Fund TOTAL

Addition to Book Balance:Interest Income 3.30.08 to 9.30.08 75,549.55 24,561.59 57,620.99 157,732.13

Erroneous Recording 11.07.02 to 9.08.08 0.81 0.80 - 1.61

Unrecorded Credit Memo 12.21.98 to 6.30.06 3,803.36 5,000.00 - 8,803.36

Unrecorded Cash Deposit 1.04.05 to 1.04.05 15,000.00 15,000.00

Returned Checks 5.03.06 18,377.00 - 18,377.00

TOTAL 97,730.72 29,562.39 72,620.99 199,914.10

Deduction from Book Balance:Erroneous recording 1.13.95 to 9.30.08 646,852.60 30.41 20.00 646,903.01

Debit Memo 1.13.94 to 9.30.08 430,387.73 7,350.00 7,475.00 445,212.73

Returned Checks 8.04.04 to 8.14.04 8,036.20 8,036.20

Service Charge/Checkbooklet 8.31.04 to 11.30.04 16,500.00 400.00 16,900.00

TOTAL 1,101,776.53 7,380.41 7,895.00 1,117,051.94

Addition to Bank Balance:Erroneous recording 6.29.96 to 9.30.08 777,113.04 13,792.45 1,222.66 792,128.15

Unrecorded Deposit 2.24.05 to 5.9.08 - 50,170.71 50,170.71

Check still for clearing 4.25.08 4,995.03 - 4,995.03

TOTAL 782,108.07 13,792.45 51,393.37 847,293.89

Deduction from Bank Balance:Outstanding Checks 1.24.04 to 5.30.08 39,501.30 36,498.11 24,808.34 100,807.75

Erroneous recording 12.29.99 to 9.30.08 122,323.54 100.00 877,473.47 999,897.01

TOTAL 161,824.84 36,598.11 902,281.81 1,100,704.76

One of the sound policies of internal control is to bring into agreement two

independent but related records through the process of reconciliation. Through regular reconciliation, the integrity of all cash records will be proved, errors in recording both by bank and the accounting unit will be immediately detected thus, necessary adjustments will be timely effected.

Although the BRS were prepared by the Accounting Unit for some of the City’s depository accounts, book and bank reconciling items were not timely effected in the agency books, thus, defeating the very purpose of reconciliation.

From the cited data, it can be gleaned that various long existing book and

bank reconciling items still remained unrecorded. As a result, the cash in bank account balance appearing in the agency book did not reflect the accurate amount. Hence, there is a need to adjust the reconciling items in the agency books to show the accurate balance of the General Ledger (GL) cash in bank account after taking into consideration the necessary supporting documents and computations, if any, as bases in preparing the adjusting journal entries, in conformity with Section 3.3 of COA Circular No. 96-011.

Further, outstanding checks totaling P100,807.75 which were issued by the

City from January 24, 2004 to July 23, 2008 are now considered stale. Stale checks are those that have been outstanding for over six months from date of issue or as prescribed by the depository bank.

Section 189 of GAAM, Vol. 1, provides the general guidelines in the

replacement of lost/destroyed and obsolete checks, thus: If a check is lost, destroyed, or becomes stale or obsolete the issuing agency may issue a replacement check which shall be made under such regulation in regard to issuance and payment and upon compliance with requirements and observance of a specific requirements, that a stale and/or obsolete check shall be replaced with a new one provided that original check is presented/surrendered for cancellation.

According to Section 59 of the Manual on the New Government Accounting

System it is the duty of the City Treasurer to send a written notice to the payee of the existence of the check at least a month before a check becomes stale.

Also, erroneous recordings which are addition to and deduction from bank

balance in the amount of P 792,128.15 and P999,897.01, respectively were errors alleged to be committed by bank way back 1996 up to September 2008. Interview with the accounting staff in-charge of preparing the BRS revealed that these pertains to erroneous deposits by bank to other depository accounts of the City maintained with the same bank. In cases like this, bank should be notified within the given period to effect immediate adjustments; otherwise, the bank will presume that all transactions reflected in the bank statement were correct. This is a reiteration of the previous year’s audit finding in which management is reminded to take appropriate actions immediately.

The City Accountant agreed during the exit conference that adjustments will

be made on those book errors when the corresponding copy of Debit and Credit Memos are already secured from the concerned depository banks, and upon the availability of the necessary documents to adjust other reconciling items. Also, liability will be set up to adjust those stale checks.

We recommend that the City Accountant should draw the appropriate adjusting journal entries with corresponding supporting documents and record the book reconciling items in the respective agency fund books. Regarding the erroneous recording by bank, the City Accountant must inform the City Treasurer with the necessary data so that an advice for a Debit and Credit Memo can be requested from the bank to effect inter-fund transfers.

For the long outstanding checks, we recommend that management should

follow the guidelines stated in Section 189 of GAAM Vol. 1. The City Accountant is advised to prepare and record the adjusting journal entry in the appropriate agency book to revert back to the appropriate fund the issued check amount and establish the liability of the City.

Likewise, the City Treasurer is reminded of the provision of Section 59 of the

Manual on the New Government Accounting System, that at least one month before a check becomes stale; he should send a written notice to the payee of the existence of the check.

G. OTHERS

11.Out of the total P8,091,315.41 Due From NGOs/POs, the amount of P7,223,424.21 were not liquidated within the prescribed period and the release of additional fund to various NGOs/POs in the amount of P2,291,071.77 was approved even without an interim Fund Utilization Report of the previous release had been submitted contrary to Sections 5.4 and 4.5.5 of COA Circular No. 2007-1, respectively, thus created doubts on the veracity of the intended purpose/s of the funds released and validity of its fund utilization and the accomplishment of its objectives could not be ensured.

Section 4.5.5 of COA Circular No. 2007-001 dated October 25, 2007 states

that “In case of staggered fund releases or new fund release covered by another MOA, no NGO/PO shall receive additional releases unless an interim Fund Utilization Report of the previous release certified by its Accountant and approved by its President/Chairman is first complied with, showing a summary of expenses and a status report of accomplishment evidenced by pictures. The validity of this document shall be verified by the internal auditor or equivalent official of the GO.”

Also, Section 5.4 of COA Circular No. 2007-001 requires thus, “Within sixty

(60) days after the completion of the project, the NGO PO shall submit the final Fund Utilization Report certified by its Accountant and approved by its President/Chairman to the GO, together with the inspection report and certificate of project completion rendered/issued by the GO authorized representative, list of beneficiaries with their acceptance/acknowledgement of the project/funds/goods/services received. The validity of these documents shall be verified by the internal auditor or equivalent official of the GO and shall be the basis of the GO in recording the fund utilization in

its books of accounts. These documents shall support the liquidation of the funds granted to the NGO/PO.”

Analysis of the funds released to various Non-Governmental Organizations

(NGO) and People’s Organizations (PO) disclosed that out of the total balance of the Due From NGOs/POs account as of December 31, 2008 in the amount of P8,091,315.41, 89% or P7,223,424.21 remained unsettled even after a considerable extended period after its grant(Annex 13). Aging of the P8,091,315.41 showed that P4,666,805.64 (Annex 14) or 57.6% refer to funds released from CY 2007 and prior years, thus not in keeping with Section 5.4 of COA Circular 2007-001.

Further analysis of these funds released to NGOs/POs revealed that the

amount of P2,291,071.77 (Annex 13) was granted without first settling or a proper accounting thereof was made of the previous grant, contrary to afore-cited Section 4.5.5 of COA Circular No. 2007-001.

Considering the above premise, the receivable amount of P2,291,071.77 from

various NGOs/POs could have been avoided had the concerned city officials closely monitored the NGOs/POs compliance with the stipulations in the MOA and the provisions of COA Circular 2007-001 prior to release of the additional grant.

Also, the responsible city officials should have caused the inspection of

project implementation and verification of the NGOs/POs financial records and reports to make sure that the purpose of the grant has been achieved and the stipulations in the MOA specially the liquidation within the period of 60 days upon completion of the project were complied. In so doing, the existence of the long existing Due From NGOs/POs amounting to P7,223,424.21 could have been prevented.

The City Accountant mentioned in the management comment dated April 3,

2009 that concerning the release of new cash advance to the NGOs/POs, accounting of the previous cash advance was already made before a new cash advance is granted. The management has already sent out demand letters to the concerned NGOs/POs to liquidate their cash advances. It was also mentioned during the exit conference that the created Project Monitoring Committee will take charge in monitoring the implementation and compliance of the NGOs/POs of the stipulations in the MOA.

We recommend that the signing officials of Naga City to the MOA should

cause the close monitoring of the project implementation and verification of financial records and reports of the NGO/PO to provide assurance that its intended purpose is accomplished and ensure that the provisions of the MOA and COA Circular No. 2007-001 are complied with.

II – Value for Money Audit

A. 20% DEVELOPMENT FUND

12. The 20% Local Development Fund could have been appropriated and utilized for development projects geared towards the attainment of desirable socio-economic development and environmental outcomes which partake the nature of investment and capital expenditures that would directly generate jobs and livelihood opportunities for the people of Naga City, rather than for expenditures appropriately chargeable against Maintenance and Other Operating Expenses (MOOE), had the City Development Council conscientiously adhered to the general policies and projects covered under Joint Memorandum Circular No. 1, series of 2005.

Section 287 of RA 7160, otherwise known as the Local Government Code of 1991, requires each local government unit (LGU) to appropriate in the annual budget at least 20% of the Internal Revenue Allotment (IRA) for development projects. Joint Memorandum Circular No. 1, s. 2005 dated September 20, 2005 of DILG and DBM provide the guidelines on the appropriation and utilization of the 20% of the Annual IRA for development projects in order to enhance accountability of LGUs in undertaking development projects. The general policies included in these guidelines are as follows:

a. It shall be utilized to finance the priority projects, as embodied in the duly approved local development plan that directly support the Medium-Term Philippine Development Plan and the Medium-Term Public Investment Program.

b. All projects to be funded shall contribute to the attainment of desirable

socio-economic development and environmental management outcomes; partake the nature of investment and capital expenditures; and take into consideration cost recovery and entrepreneurship.

The projects covered under the guidelines are the following:

1. Social Development 1.1 Establishment or rehabilitation of Productivity Enhancement Center

for out-of-school youths, women, minors, displaced families, indigenous people, differently-abled persons and older persons;

1.2 Establishment or rehabilitation of Manpower Development Center; 1.3 Construction or rehabilitation of health centers, rural health unit or

hospital, and purchase of medical equipment; 1.4 Construction or rehabilitation of a local government-owned potable

water supply system;

1.5 Installation of street lighting system; 1.6 Preservation of cultural/historical sites. 1.7 Other programs or projects of similar nature.

2. Economic Development

2.1 Implementation of a livelihood/entrepreneurship development program or project.

2.2 Construction/rehabilitation of a communal irrigation or water impounding system and purchase of post harvest facilities such as farm or hand tractor with trailer, thresher, mechanical drier and the like.

2.3 Construction/rehabilitation of farm-to-market roads. 2.4 Construction/rehabilitation of local roads or bridges; and 2.5 Other programs or projects of similar nature.

3. Environment Management

3.1 Construction/rehabilitation of sanitary landfill or controlled dumpsite and purchase of a garbage truck or related equipment.

3.2 Community reforestation or urban greening projects. 3.3 Flood control programs or projects such as de-clogging of canals or

de-silting of rivers. 3.4 Other environmental management programs or projects that promote

air and water quality, as well as productivity of coastal or freshwater habitat, agricultural land and forest land.

Noticeable is that the above projects are mainly funded as “capital outlays”. Under Section 306 (d) of the Local Government Code, capital outlays refers to appropriations for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of the local government concerned, including investments in public utilities such as public markets and slaughterhouses. The CY 2008 Annual Investment Plan (Annex 15) to be funded out of the Local Development Fund (LDF) equivalent to 20% of IRA was approved under City Development Council (CDC) Resolution No. 1, s. 2008 dated January 10, 2008 amounting to P45,321,792.60. On August 27, 2008, the CDC approved Resolution No. 2, s. 2008 allocating P1,641,828.20 out of the underestimated IRA share for 2008 for the implementation of some socio-economic and developmental programs, projects and activities. Also, on December 9, 2008, City Ordinance No. 2008-107 was enacted appropriating the amount of P783,945.40 out of the P3,919,727.00 unprogrammed IRA for programs and activities under the Local Development Fund. In addition to these LDF 2008 appropriations, the 2007 Continuing Appropriations reprogrammed in 2008 amounted to P21,441,256.46, thus, the total Local Development Fund for 2008 had reached P69,188,822.66.

Below is the summary computation:

20% of 2008 Annual Budget 20% of Under-estimated IRA Unprogrammed IRA LDF 2008 Appropriation Add: Continuing Appropriation - 2008 Total Local Development Fund – 2008

P P P

45,321,792.60 1,641,828.20 783,945.49 47,747,566.20 21,441,256.46 69,188,822.66

The City Development Council has also approved on September 1, 2008 Resolution No. 4, s. 2008 reprogramming the LDF program for the year 2008 by realigning the amount of P4,000,000.00 from various LDF Accounts and appropriating the same to the Solid Waste Management Support Fund for the purpose of procuring one unit of Bulldozer in support to the City’s Solid Waste Management Program. The program/project/activity changes that have occurred on the 2008 Local Development Fund Total Authorized Appropriations is shown in Annex 16 and the Statement of Appropriations and Obligations as of December 31, 2008 (Annex 17) would show the obligations made and the unobligated balances for better understanding of the agency’s performance in implementing the various socio-economic and developmental projects supposed to be undertaken in 2008. It appeared based on the Statement of Appropriations and Obligations, that the agency was able only to obligate 80.27% of its total appropriations for the year after combining the current and continuing appropriations. Worthy to note however, that for the current year appropriation, the agency was able to post 86.73% obligations on its planned projects/programs and activities for the year. Perusal of the CY 2008 Annual Investment Plan funded out of the 20% Development Fund revealed that, just like in the previous year, except for the Social Development, Urban Redevelopment, Barangay Development Programs and Projects and some of the Solid Waste Management projects (like the acquisition of heavy equipment), all other programs/projects/activities included in the Annual Investment Plan did not partake the nature of investment and capital expenditures. These were mostly for livelihood loans (financial assistance), repairs and maintenance and other operating expenditures of the LGU, which activities can be appropriately funded from the General Fund of the LGU, contrary to the intended purpose and the general policies set forth on the appropriation and utilization of the 20% Development Fund. Review of the Statement of Income and Expenses (Annex 18) and the Pre-Closing Trial Balance for the year ended December 31, 2008 of the Local Development Fund (Annex 19) as well as examination of related financial transactions on a test basis, disclosed that a considerable amount of the LDF was not actually utilized for development projects as mandated by the cited Joint Memorandum Circular No. 1, s. 2005, but were used for other expenses appropriately chargeable against Maintenance and Other Operating Expenses (MOOE). Expenses

like office supplies, internet and telephone expenses, meals and snacks, room accommodation, vulcanizing of flat tires, repairs and maintenance of buildings, offices, vehicles and equipment, spare parts of various service vehicles and equipment, fuel and oil consumption, travel expenses, radio plugging, rent expenses, and considerable amount of financial assistance lodge under the Other Maintenance and Operating Expenses were disbursements more appropriately chargeable against the MOOE and some disbursements were for personal services and donations which did not partake the nature of investment and capital expenditures. Thus, it showed that the city government deviated from the intended purpose, policies and guidelines set forth for the use of the 20% Local Development Fund. Had the City Development Council conscientiously adhered to the general policies and guidelines on the appropriation and utilization of the 20% Local Development Fund, the people of Naga City could have benefited more from other viable and sustainable development projects and programs that would directly generate jobs and livelihood opportunities as well as contribute to the attainment of desirable socio-economic development and environmental management outcomes, rather than for expenses appropriately chargeable against the MOOE of the LGU. This audit observation was previously included in last year Annual Audit Report and is reiterated this year for management to consider in its next preparation of the Annual Investment Plan.

The Acting City Budget Officer explained during the audit exit conference that a more appropriate programming was already made in the CY 2009 Budget where programs/projects/activities partakes the nature of investment and capital expenditures.

We recommend that the City Development Council should prepare through its Secretariat and approved an Annual Investment Plan that would conscientiously adhere to the general policies and guidelines on the appropriations and utilization of the 20% of the Annual Internal Revenue Allotment for development projects that would partake the nature of investment and capital expenditures as enumerated under the Joint DILG-DBM Memorandum Circular No. 1, s. 2005.

B. SPECIAL EDUCATION FUND 13. More elementary and secondary public schools’ students of the city could have

benefited in terms of better school facilities, services and activities had the Naga City School Board (NCSB) vigorously pursued the timely and full implementation of all the programs and activities as embodied in the CY 2008 total appropriations amounting to P50,100,102.72 under the Special Education Fund.

One of the principles of sound management and fiscal administration is that the utilization of appropriated funds should be maximized as soon as possible so that its intended benefits and/or services could be enjoyed by the targeted beneficiaries.

Likewise, Section 100 of RA 7160 provides among others, that “the annual

school board budget shall give priority to the following:

1. Construction, repair and maintenance of school buildings and other facilities of public elementary and secondary schools;

2. Establishment and maintenance of extension classes where necessary and 3. Sports activities at the division, district, municipal and barangay levels.”

Evaluation of the operations of the School Board for CY 2008 disclosed that it

had appropriated the amount of P50,100,102.72 for its programs, projects and activities during the year under the Special Education fund. Of this amount however, only P32,741,450.31 or 65.35% of the total budget were utilized and/or implemented, hence, leaving the unexpended balance of P17,358,652.41 or 34.65% of its total budget (Annex 20).

Breakdown of the unexpended balance of P17,358,652.41 is shown below:

Personal Services P 2,062,509.81 Maintenance & Other Operating Expenses(MOOE) 6,706,919.52 Capital Outlay 8,589,223.08 TOTAL P 17,358,652.41

The above data showed that the largest unexpended amount pertains to Capital

Outlay. The amount of P8,589,223.08 could have been used to fund the programmed construction, maintenance and/or repair of school buildings which should be given priority according to Section 100 of RA 7160. This is followed by unexpended MOOE amounting to P6,706,919.52 which could have financed the projected expenditures under Pupil/Student Development and Special Programs and Projects stated in the Naga City School Board Budget CY 2008 (Annex 21).

As to sufficiency of funds needed, the Schedule of Monthly Income and

Obligations (Annex 22) would show that for the month of January, 2008, the total income accruing to Special Education Fund (SEF) amounted to P16,220,846.05 which was 47.70% of the estimated income of P34,000,000.00 (Annex 21) for the year, while for the month ended August, 31, 2008, SEF income already reached P35,476,014.77 or 104% of the estimated income.

Further, it is worth mentioning that at the beginning of the year, there was a

surplus of P16,000,000.00 which was appropriated and has formed part of the P50,000,000.00 NCSB Budget for CY 2008 under Resolution No. 01 s. 2008 and is therefore, immediately available for obligation in January. Total SEF appropriations reached to P50,100,102.72 in CY 2008 due to subsequent approval of several additional appropriations by the NCSB.

The above information, therefore, showed that the SEF has met its targeted

income and that the NCSB has sufficient fund to finance their projected expenditures for Calendar Year 2008.

The non-implementation of the remaining programs, projects and activities

during the year is not in consonance with the above-cited principle of sound management and fiscal administration and has therefore, deprived the students in the elementary and secondary public schools of Naga City of more benefits in terms of better school facilities, services and activities.

Management responded thru the Naga City School Board Administrator that it

is their task to spend on priority programs/projects at a minimal cost but which is beneficial to the school children. It pointed out that the school board prepares an annual budget based on those submitted by stakeholders. Also, enumerated in the letter were the reasons of the unexpended SEF such as: 1) failure of the school/office to request the additional two casual employees and failure of the office of the Department of Education to submit ahead of time the number of locally funded teachers needed per school with the corresponding enrollment report; 2) The amount intended for the purchase of textbooks was realigned to Infrastructure due to the absence of the official list of textbooks and instructional materials; 3) Delay of the second release of the QUEEN Fund due to the non-liquidation of the first release by several PTAs; 4) preparation of the Program of Work for additional classrooms were finished during rainy season where prices of construction materials went up, thus, construction was postponed until prices were normalized; 5) lower number compared with expected pupils who availed of the Summer Enrichment Program; and 6) late submission of the itemized listing of materials for the Division Achievement Test by grade level so it was only purchased in January, 2009. Therefore, being conservative on the way money was spent does not mean that facilities, services and activities are sacrificed but instead, they operate to have forced savings for the continuing educational development.

Notwithstanding the justifications offered, we emphasized that the alleged

poor coordination between the public school officials and the city government of Naga and the alleged savings for the delayed implementation could not compensate for the time and opportunity lost in terms of benefits that could have been enjoyed by the students of the Naga City public schools. We maintain that our recommendation be implemented.

We recommend that the Naga City School Board should closely monitor and

vigorously pursue the timely and full implementation of all the programs and activities as embodied in the school board budget which are considered necessary and intended to immediately benefit the students in the public schools of Naga City.

14. The Implementing Rules and Regulations (IRR) of the Quality Universal Elementary and High School Education in Naga otherwise known as QUEEN Program duly ratified by the Sangguniang Panlungsod was not yet presented by the QUEEN Management Team, thus, validity of the expenditures charged to the QUEEN Fund totaling P4,442,825.60 in 2008 could not be ascertained and accomplishment of its objectives could not be ensured.

On November 27, 2007, the Sangguniang Panlungsod has enacted City

Ordinance No. 2007-045, an ordinance institutionalizing the Quality Universal Elementary and High School Education in Naga with an objective of ensuring that all school children in Naga City will be able to access and complete elementary and high school education. Section 10 of this Ordinance, provides thus: “Within thirty (30) days from effectivity of this Ordinance, the City QUEEN Management Team shall prepare and approve a detailed and comprehensive Implementing Rules and Regulations to effectively enforce the provisions of this Ordinance, subject to the ratification of the Sangguniang Panlungsod.”

Records disclosed that for the year 2008, total expenditures charged to the

QUEEN fund amounted to P4,442,825.60 (Annex 23). Expenses charged to the QUEEN Fund were disbursed in two ways: 1) thru cash advances to various Parents-Teachers Associations(PTA) where amount released was based on a project proposal prepared by the requesting Parents-Teachers Association duly approved by the City Mayor, and 2) thru direct payment to the concerned payee for various expenditures.

Inquiry with concerned city officials and verification of the Utilization

Reports on the cash advances granted to various schools’ Parents-Teachers Association in Naga City disclosed that the QUEEN Program has no approved Implementing Rules and Regulations yet as required by the cited Ordinance. Accordingly, this Office has already issued an Audit Observation Memorandum No. 2008-02(2008) dated September 8, 2008 duly received by the Office of the Mayor on September 10, 2008 where an approved IRR was requested but to date, no reply yet from the management has been received.

Due to the absence of the IRR of the QUEEN Program, validity of the

disbursements made under said program could not be ascertained and accomplishment of its objectives could not be ensured.

Without the approved IRR duly ratified by the Sangguniang Panlungsod, all

QUEEN Program expenses charged against the Special Education Fund totaling P4,442,825.60 may be disallowed in audit.

The City Government replied that it acknowledged the failure of the QUEEN

Management Team to finalize the draft the soonest possible time as mandated in the ordinance, nonetheless, the delay provided the QUEEN Management Team with vital information which they have learned from the initial release of the QUEEN fund and which was incorporated in the IRR. Accordingly, the IRR was recently submitted to the Sangguniang Panglungsod for ratification.

We recommend that the City QUEEN Management Team should formulate

and approve a detailed and comprehensive Implementing Rules and Regulations of the QUEEN Program duly ratified by the Sangguniang Panlungsod that would effectively enforce the provisions of the Ordinance and would provide basis for the regularity of the funds released and validity of the disbursements made.

C. ECONOMIC ENTERPRISES

15. The city could have earned additional income from market stalls rental in CY 2008 by as much as P3,981,445.59 had the City Public Market Administration been more aggressive and determined in collecting the monthly stalls rental and had strictly enforced Sections 142 and 144 of the City Ordinance No. 2004-123, An Ordinance Codifying and Revising the various Revenue Ordinances of the City of Naga, and For Other Purposes.

Cited under Article VII, Chapter VIII of the City Ordinance No 2004-123 are

the following provisions governing the Naga City Public Market, viz;

“Section 142.- a. Any award of occupancy of any of the market stalls referred to in previous sections of this ordinance maybe revoked or cancelled by the Market Awards Committee after proper hearing, if the same has been found to be in gross violation of the following rules, viz;

1. Nonpayment of monthly rentals for a period of at least two (2) months;

2. xxx Section 144-A. The lessee of a stall, who fails to pay the monthly rental fee within the prescribed period shall pay a surcharge of twenty five percent (25%) of the total rent due. Failure to pay the rental fee for six (6) consecutive months shall cause automatic cancellation of the contract of lease of stall, without prejudice to suing the lessee for the unpaid rents at the expense of the lessee. The stall shall be declared vacant and subject to adjudication.”

Scrutiny of the Report on Delinquent Stall Rentals as of December 31, 2008

prepared by the Office of the Market Administrator disclosed a total collectibles of P3,981,445.59 (Annex 24). Summary is shown in the next page:

Table 1 – Summary of Total Collectibles

SECTION TOTAL Collectibles Total Arrears in CY 2008 & PY

Total Accumulated Arrearages under

Compromise

Groundfloor 1,761,404.07 726,017.34 1,035,386.73

Secondfloor 1,758,299.17 1,098,982.08 659,317.09

Third Floor 461,742.36 331,808.27 129,934.09

TOTAL 3,981,445.60 2,156,807.69 1,824,637.91

Verification of this report revealed that out of the 987 stallholders, 247 were

delinquent on paying their monthly rentals for a period ranging from three months and more. For CY 2008 alone the average arrears reached five monthly rentals. Data from Annex 24 showed that several stallholders have not paid their monthly stall rental for 10, 15, 20, 25, 30, 50 and even up to 82 straight months. This resulted in a total arrears in CY 2008 and prior years of P2,156,807.69 as shown in Table 1 above.

The report also disclosed the amount of P1,824,637.91 as total accumulated

arrearages under compromise agreement. It can be gleaned from Annex 24 that the stallholders who have long period of accumulated arrearages covered by compromise agreement were also those who have incurred longer months of unpaid rents in the succeeding period after the compromise agreement was made. Upon validation, it was unveiled that compromise granted by the Market Administrator to individual delinquent stallholder was only verbal; hence, recorded computation of total payables as of a given date on the Market Occupant’s Rental Record (see samples as Annex 25) has no legal enforceability. One of the market personnel has related upon inquiry that a compromise becomes acceptable once the Market Administrator approve the delinquent stallholder’s appeal with a promise to pay at least one-half of his total arrearages. This kind of compromise agreement however did not work favorably for the market collection efficiency and proved to be an exercise in futility having no legal enforceability.

The above cited data and facts clearly indicate that the City Public Market Administration has not been aggressive and persistent in collecting the monthly stalls rental for several years and failed to strictly enforce the provisions of Sections 142 and 144 of the City Ordinance No. 2004-123. This resulted in a total collectibles of P3,981,445.60 as shown in Table 1 above.

The Officer-in-Charge of the Naga City Public Market informed during the

audit exit conference that his Office has already issued demand letters to several delinquent stallholders as initial step of their aggressive collection efforts.

We recommend that the Naga City Public Market Administration should: 1. Be more aggressive and determined in its collection efforts and strictly enforce

the pertinent provisions of City Ordinance No. 2004-123 applicable to delinquent market stallholders and space occupants.

2. Immediately send out demand letters to delinquent stallholders to pay their arrears and after the lapse of the grace period declare the stall vacant and submit the same to the Market Committee for proper adjudication.

3. Whenever compromise agreement is entered into between the market stallholders and the Market Administrator, it should be in writing duly notarized to establish legal enforceability.

16. The Accountable Officer allows other Accountable Officers and other personnel assigned at the Naga City Public Market Office to use and issue his entrusted official receipts to LGU clients, contrary to Item 16 of the Specific Policies on Collections, Chapter I of the Handbook on Cash Examination, thus, breaking the trust given by the agency and moreover, the accountable officer may not be personally aware of possible improper use/application of the official receipts to the detriment of the government.

Item 16 of the Specific Policies on Collections, Chapter I of the Handbook on Cash Examination states that: “An official receipt is an accountable form held in trust by the Collecting Officer/Treasurer/Property Officer or other person duly authorized to possess or have custody thereof. He shall be responsible for its safekeeping, the proper and authorized use or application thereof and the reporting of its use and condition; and shall be liable for loss, damage or deterioration occasioned by negligence in the keeping or use thereof.”

Verification of the official receipts of Mr. Jude John Martin Rey, Local Revenue Collection Clerk II of the City Treasurer’s Office, covering the period from June 5, 2007 to May 7, 2008 (See Annex 26) disclosed that some of the official receipts were being used and issued by other Accountable Officers and other personnel assigned at the Naga City Public Market Office. This was evidenced by different initials shown on the issued official receipts.

By allowing other Accountable Officers (AOs) and other personnel to use and

issue the entrusted official receipts, the accountable officer breaks the trust placed on him by the agency. Moreover, the accountable officer concerned may not be personally aware of possible improper/unauthorized use or application of the official receipts which may be committed by the employee and other Accountable Officers who issued the subject Accountable Forms to the detriment of the government. Thus, it is worth mentioning that in case of improper/unauthorized use or application of the official receipts by the assigned Casual employee and other accountable officers, the accountable officer entrusted with the AFs will still be responsible and liable for loss, damage or deterioration and or alterations occasioned by negligence in the keeping or use of official receipts.

Furthermore, the practice indicates a weak internal control on property and

cash management which may result in various irregularities in the reporting and remittance of the collections that is due the Local Government of Naga City. In fact, the LGU of Naga City filed a legal complaint dated January 20, 2009, addressed to

the City Prosecutor of Naga City for malversation through falsification of public documents against Frederick Arias and Rowena delos Santos alleging among others that the accused Accountable Officers mandated under the “Goodwill Ordinance” to collect “Goodwill payments” were able to malverse public funds by willfully, maliciously and feloniously confederating with each other to falsify the duplicate and triplicate copies of Official Receipts issued to goodwill applicants/payors and thereby appropriated for their personal benefits the total amount of One Million Nine Hundred Forty-Six Thousand Seventy Five pesos (P1,946,075.00). The subject falsified Official Receipts includes Accountable Forms issued to and under the custody of Mr. Jude John Martin Rey.

Verification made with the Accountable Officers assigned at the Naga City Public Market Office (NCPMO) during an interview revealed that the practice of allowing other AOs and employees to issue Official Receipts in his/her behalf is due to the lack of personnel. It was likewise noted that considering the bulk of the increasing transactions pertaining to the collections and remittance of the revenues generated from the Naga City Public Market and Abattoir, there were only four (4) bonded Accountable Officers officially assigned.

Based on the underlying circumstances and gravity of possible future occurrence of similar case of malversation of funds due to the prevailing weak internal control on property and cash management, it appears that there is an immediate need to evaluate the sufficiency of present personnel complement in the NCPMO assigned as collectors in relation to their work assignment which should not result in delegating the use or application of entrusted official receipts to unauthorized employees.

It was resolved during the audit exit conference by the representative of the City Treasurer’s Office and the Officer-in-Charge of the Naga City Public Market that four additional collectors will be designated from among the permanent employees assigned at the Naga City Public Market to reinforce the existing collectors. Existing manpower of the Market Office will also be evaluated in compliance to the recommendation. We recommend that accountable officer/s entrusted with the safekeeping, proper and authorized use or application of official receipts should desist from allowing other person/s to use and issue official receipts in their behalf, in consonance with Item 16 of the Specific Policies on Collections, Chapter I of the Handbook on Cash Examination to prevent possible improper use/application of the official receipts to the detriment of the government.

It is also recommended that an evaluation on the personnel complement assigned on the collections/ remittance of the revenues of the Naga City Public Market and Abattoir be performed to assess whether the number of personnel assigned is sufficient to perform their assigned duties and responsibilities without delegating the use or application of entrusted official receipts to unauthorized employees.

D. PRIORITY DEVELOPMENT ASSISTANCE FUND 17.Had the City Government of Naga implemented the various Priority

Development Assistance Fund received from 2005 to 2008 coming from legislators amounting to P12,279,700.00, the constituents of Naga City could have enjoyed the benefits that may have been derived therefrom and the different purpose for which the amounts were released could have been attained.

National Budget Circular No. 476 dated September 20, 2001 provides the guidelines on the release of Funds Chargeable Against the Priority Development Assistance Fund (PDAF) for the Second Semester of FY 2001 and thereafter.

Item 3.0 PROCEDURES of the above Circular provides the following:

3.1. Requests for release of funds chargeable against the PDAF shall be supported by the following:

3.1.1 Project profile per Annex “B” of this Circular. The list of programs/projects to be submitted shall be in accordance with Sections 2.2, 2.3, 2.4 and 2.5 above; and

3.1.2 Endorsement from the implementing agency except those programs/projects to be undertaken by the LGUs.

3.2 Submission under Sections 3.1.1 and 3.1.2 above shall serve as basis of

the Department of Budget and Management (DBM) for the release of the Special Allotment Release Order (SARO) and the corresponding Notice of Cash Allocation (NCA) to the implementing agency.

3.3 LGUs shall take up releases charged against the PDAF as trust accounts

in their books of account.

Item 5.0 Monitoring – The programs/projects funded under the PDAF shall be included in the regular monitoring activity of the implementing agency. These agencies are encouraged to post the same in their website.

The Report on Priority Development Assistance Fund (PDAF) by LGU-Naga

City from the PDAF of Congressmen and Senators as of December 31, 2008 (Annex 27) submitted by the City Accountant showed that for CY 2008, the City Government has received from the PDAF of Congressman Arnulfo Noli Fuentebella the amount of P3,000,000.00 per SARO No. 08-05267 dated June 19, 2008, the purpose of which is for the Rehabilitation of GSP Building in Naga City. To date however, this project has not yet been implemented. Inquiry made with the City Budget Officer and City Accountant disclosed that the actual SARO has not yet been received; instead, the Office of the Mayor has received on July 11, 2008 the Notice of Funding Check Issued dated July 5, 2008 from the DBM, Regional Office No. V, Legazpi City. It was only in the Notice of Funding Check Issued that the SARO number was mentioned but not the specific purpose for its release. The purpose of its release was

learned only when somebody was following up the status of receipt and implementation of the released PDAF of Congressman Fuentebella and that somebody informed the personnel of the Accounting Office that the intended purpose of its release was for the rehabilitation of the GSP Building in Naga City.

Further analysis of the report submitted by the City Accountant revealed that

the following releases of PDAF amounting to P9,279,700.00 received by LGU-Naga City from 2005 to 2007 still remained not implemented in 2008, thus:

SARO

No. Date of

Saro

Congressman/Senator Purpose of

release

A m o u n t

Remarks 05-06140 12/6/2005 Sen. Franklin Drilon None P1,500,000.00 11/3/2006 Sen. Joker Arroyo None 1,000,000.00 3/12/2007 None None 250,000.00 4/07/2007 None None 1,000,000.00 07-09805 12/17/2007 None None 5,000,000.00 With NFCI* None None 250,000.00 None None 250,000.00 Loretta Ann Rosales Philhealth para

sa Masa 29,700.00

T o t a l P_9,279,700.00

*NFCI – means Notice of Funding Check Issued received by LGU-Naga City from DBM, Regional Office No. V, Legazpi City on January 10, 2008.

Hence, up to now, a total of P12,279,700.00 of PDAF released by legislators from 2005 to 2008 still remained not implemented, to the detriment of the constituents of Naga City who could have already enjoyed the benefits that may have been derived from these previously released priority development assistance funds. Worthy to note, however, that on February 4, 2009, the bidding for the rehabilitation of the GSP Building in Naga City worth P3,000,000.00 was already conducted. It can be seen from the tabular presentation that these PDAF may not have been implemented because the purpose of their release and the name of the legislator is unknown which is quite unusual. Much more, no SARO document has been received by the agency pertaining to these released PDAF which is required under NBC No. 476. It appears also that even the Office of the City Mayor was not regularly monitoring the status of these PDAF and its immediate implementation as required under NBC No. 476. Inquiry made with concerned city officials disclosed that PDAF amounts received were credited in the respective agency bank account thru a bank credit memo, however, there was no information provided as to the name of the legislator and the purpose of its release. Moreover, no SARO and in many instances, no NFCI were received from the Department of Budget and Management.

Based on the underlying circumstances, it becomes apparent that the concerned city officials were not aggressive and properly coordinated in pursuing the receipt of the required SARO and NFCI from the Department of Budget and Management or in availing other means of obtaining the required documents and information regarding the PDAF received from different legislators.

From the receipt of the PDAF amount in the bank account of the agency, the City Treasurer should notify the Office of the Mayor of such receipt with the information that there was no specific purpose of its release stated in the bank credit memo so that the assigned personnel from the City Mayor’s Office may perform appropriate follow-up to the office/s of concerned legislator/s. The City Budget Office should also initiate the follow-up of the SARO and NFCI from the DBM Regional Office or from DBM main office, if needed. The City Mayor’s Office may also coordinate with the legislators from whom request for financial assistance were made in obtaining information as to the status of the agency’s request.

It cannot be disregarded then that the constituents of Naga City could have enjoyed by now the benefits that may have been derived from the intended projects/programs of the PDAF received from legislators and that the different purpose for which the amounts were released could have been already attained, had the City Government of Naga aggressively implemented the various Priority Development Assistance Fund received from 2005 to 2008 coming from legislators amounting to P12,279,700.00 in 2008. In the event that the intended purposes are known and they appear to be no longer in line with the immediate need of the present time, request for realignment may be made if allowed under the provisions of NBC No. 476, with the concurrence/endorsement of the program/project proponent legislator and certification from the head of the accounting unit/local treasurer duly noted by the local chief executive that the fund being requested for realignment has not yet been obligated and is still available. The City Budget Officer responded during the audit exit conference that representation with the DBM Regional Office, Legazpi City has already been made and it was learned that the original intent of the Local Chief Executive in requesting for the Priority Development Assistance Fund will be the basis in implementing the PDAF received by the LGU. Hence, the City Mayor issued a Memorandum to the City Engineer dated March 3, 2009 showing the intended specific projects to be implemented out of the balances of the PDAF from various legislators and further directing the City Engineer to prepare and submit the corresponding programs of work (POW) for his approval and that such POW should be submitted for bidding not later than end of May, 2009. We recommend that the Local Chief Executive should be dynamic and aggressive in implementing the intended projects/programs of the PDAF received

from 2005 to 2008 amounting to P12,279,700.00 in the ensuing year and to include in its regular monitoring the PDAF projects and programs being implemented.

PART III

STATUS OF IMPLEMENTATION OF PRIOR YEAR’S RECOMMENDATIONS

Status of Implementation of Prior Year’s Recommendations

A review of management’s actions on our previous year’s audit recommendations disclosed that out of 11 audit recommendations, four were implemented, six were partially implemented and one was not implemented, status of which are as follows:

Audit Observation

Recommendation

Management Action

Status of Implementation *

Reason for Partial/ Non Imple- mentation

I PI NI Both Report on the Physical Count of Inventories and Report on the Physical Count of Property, Plant and Equipment as of December 31, 2007 were not submitted due to the non-completion of the physical inventory-taking of all the city properties, contrary to Section 124 of Volume I of the Manual on New Government Accounting System (NGAS), hence, validity and correctness of the Inventories and Property, Plant and Equipment accounts valued at P3,135,099.19 and P819,272,920.36, respectively could not be ascertained.

We recommend that for the inventory team to easily facilitate the completion of physical count, they must request all offices to submit a list of all properties therein. Concerted efforts should be exerted to finish the physical inventory taking of all the properties of the City and submit the inventory reports thereon to the concerned authorities. It is likewise recommended that proper form as specified by Section 124 of Volume I of the Manual on NGAS be followed in reporting the physical count of inventories and property, plant and equipment by type to facilitate reconciliation with the accounting records later.

There is partial accomplishment as of the year-end due to deficiency in manpower to focus on the particular detailed counts and record maintenance to be done on regular and continuous bases. Concerted and cooperative efforts of all offices shall be required and need to observe the prescribed supply and property management including the system of appraisal and disposal thereof.

X

Deficiency in manpower. Several Offices did not comply with the submission of list of inventories and PPE of their concerned offices.

Bank Reconciliation Statements as of December 31, 2007 of several bank depository accounts of the City under the General Fund and Trust Fund were not

We recommend that the City Accountant should prepare and submit the Bank Reconciliation Statements of all the above-cited bank depository accounts as of

Balances for these several bank depository accounts where no regular bank statements were issued by the banks had been regularly monitored as to

X

Deficiency in manpower. Delayed submission of

prepared and submitted by the City Accountant contrary to Section 3.2 of COA Circular No. 96-11, hence, accuracy of the balances of those bank accounts is not assured.

December 31, 2007 for proper verification by the Auditor and to promptly comply with the requirements of Section 3.2 of COA Circular 96-11 in the ensuing year.

consistency of reconciled cash balances, and adjustments as to interest credits and charges were regularly done. At year-end, Bank Reconciliation Statements were already prepared individually specific for these accounts. Monthly BRS shall be prepared in the succeeding year.

monthly bank statements by several depository banks.

Long existing reconciling items reflected in the Bank Reconciliation Statements (BRS) as of December 31, 2007 of several bank depository accounts of the City remained unadjusted, contrary to Section 3.3 of COA Circular No. 96-11, thus, Cash in Bank accounts were rendered inaccurate and unreliable.

We recommend that the City Accountant should draw the appropriate adjusting journal entries with corresponding supporting documents and record the book reconciling items in the respective agency fund books. Regarding the erroneous recording by bank, the City Accountant must inform the City Treasurer with the necessary data so that an advice for a Debit and Credit Memo can be requested from the bank to effect inter-fund transfers. For the long outstanding checks, the management should follow the guidelines stated in Section 189 of GAAM Vol. 1. The City Accountant is advised to prepare and record the adjusting journal entry in the appropriate agency book to revert back to the appropriate fund the issued check amount and establish the liability of the City. Likewise, the City

Majority of the long existing reconciling items have already been adjusted. Some items still reflecting were those pertaining to the requests made to the concerned banks for the Debit Memos in order to support and record adjustments in the books. Management shall find ways and means to substantiate and support the adjustments in the succeeding year.

X

Deficiency in manpower. No available copy of DMs or CMs from bank.

Treasurer is reminded of the provision of Section 59 of the Manual on the New Government Accounting System, to send a written notice to the payee of the existence of the check at least a month before a check becomes stale.

The Accounting Department did not transfer the accumulated amount of P37,158,901.22 from General Fund(GF) to Special Education Fund (SEF), which pertains to the 1% share of the SEF in the Real Property Tax, contrary to Art. 363 of the Implementing Rules and Regulations of Republic Act No. 7160, thus, resulted in the overstatement and at the same time understatement of the cash position of the GF and SEF, respectively as of December 31, 2007 by the same amount.

We recommend that the City Accountant should transfer all the funds accruing to SEF and to automatically release to SEF its share on the Real Property Tax in the following year as prescribed by Article 363 of the Implementing Rules and Regulations of Republic Act RA 7160. Accordingly, Journal Entry Voucher should be drawn by the City Accountant to record the transfer of fund from the GF the amount of P37,158,901.22 to the SEF by debiting the account Due to Other Funds (SEF Share on RPT collections). Subsequent transfer of fund by the City Treasurer using the respective fund bank checking account should be effected. Likewise, reconciliation of the pertinent reciprocal accounts is enjoined. Eventually, this will enable the Local School Board to program their projects and activities based on these proceeds and more importantly, will ensure fair presentation of the

Beginning January 2008, the City Accounting Office had been regularly preparing the monthly full transfer of SEF collection to the Naga City School Board Fund. The balance as appearing in the year-end report of SEF represents collections in the last month of the year. It has been a culture for taxpayers to pay during the last days of the quarter, and the CTO accepting payments even during the long Christmas Holidays. Full transfer of which shall be done on the succeeding months when the SEF share has been properly identified.

X

Not all funds accruing to SEF were transferred in CY 2008.

financial statements.

Cash advances amounting to P1,896,885.55 were granted without first settling or a proper accounting thereof was made of the previous cash advance, while cash advances totaling P8,168,269.61 were not liquidated within the prescribed period, contrary to Sections 4.1.2 and 5.1 of COA Circular No. 97-002, respectively. Thus, casting doubts on the validity and regularity of the grant and liquidation thereof.

We recommend that the Office of the City Accountant should ensure that Sections 4.1.2 and 5.1 prescribed in COA Circular No. 97-002 which pertain to the grant and liquidation of cash advance be strictly enforced. Further, the agency is encouraged that administrative remedial measures be undertaken and/or appropriate legal actions be initiated for the recovery and/or settlement of unliquidated cash advances. Failure of the accountable officers to liquidate their cash advances within the prescribed period shall constitute a valid cause for withholding of salaries.

Management had been very strict already in granting cash advances, and no instance that a cash advance had been given to an individual or group of aggrupation with existing cash advance. Perhaps due to lack of personnel that shall focus and closely monitor the liquidation of these accounts, the period of settlements as prescribed has not been given priority. The Accounting Office shall be provided with a personnel solely to settle and monitor these accounts.

X

Lack of personnel that shall focus and closely monitor the liquidation of cash advances.

Guidelines and policies set by the management on the amount and term of loan granted to the recipients of the LGU’s Proyektong Pangkabuhayan Program were not strictly implemented resulting to inequitable and arbitrary extension of loans.

We recommend that the agency should strictly observe their policies and guidelines with regards to its Proyektong Pangkabuhayan Program to ensure an equitable extension of loans.

Recommendations were duly complied and implementation of which produced positive results, as follows: 2007-2008 Annual Accomplishments: Loan Collection, increased by 29% (from 6.4 to 8:3M); Loan Releases, increased by 59% (from 8.6 to 13.6m); Beneficiaries increased by 34% (from 1,102 to 1,471)

X

Procurement of goods worth P50,000 and below

We recommend to the members of the Bids and

Beginning in the year 2008, BAC has adopted

X

falling under the condition set in Negotiated Procurement were purchased using the shopping method contrary to Section 52 of RA 9184, and Sections 53 and 54 of Resolution No. 04-2006 amending Implementing Rules and Regulations-A (IRR-A) of Republic Act No. 9184.

Awards Committee to adopt the procedures set forth in Negotiated Procurement in the purchase of goods worth P50,000 and below as required by Section 53 and 53.h of Resolution No. 04-2006 amending IRR-A of RA 9184. Likewise, Shopping shall be used only if either of the two conditions specified under Section 52 of the IRR of RA 9184 is present.

the recommendation for Negotiated Procurement as the alternative mode when there is no unforeseen contingency requiring immediate purchase.

Inadequate amount was appropriated for the cost of implementing the Gender and Development (GAD) Plan for 2007 and no GAD Accomplishment Report for 2007 was prepared, thus, not in accordance with the provisions of Sec. 30 of the GAA Act, FY 2007 Vol. 103, No. 1 and the guidelines set under Joint Circular No. 2004-1 issued by the DBM, NEDA and NCRFW. These deficiencies resulted to inadequate implementation, monitoring and evaluation of GAD related activities of the LGU.

We recommend that the local chief executive with the support of concerned officials, POs and NGOs comply with the guidelines mandated under the Joint Circular No. 2004-1 to ensure compliance with Executive Order No. 273 and be able to contribute to the Philippines commitment to pursue women’s empowerment and gender equality in the country.

In partnership with the Naga City Women's Council (NCWC), city departments were ask to prepare their respective budgets for year 2009. This matter was reiterated in the Budget Call issued by the City Budget Office. The individual GAD Budget was consolidated by the NCWC and easily exceeded the mandated 5% of the 2009 annual appropriation.

X

The City could have saved the entire amount of P6,133,049.52 representing interest expense foregone, had it

We recommend that the City consider paying other long term loans out of its own fund if found sufficient and unrestricted

Self Financing as suggested was not preferred by management in the settlement of said Long-Term Obligation.

X

self-financed the buy out of the PREMIUMED II loan balance to the Department of Finance instead of securing a loan from the Land Bank of the Philippines (LBP) in the amount of P21,822,634.80.

because it can save financial resources by avoiding the payment of loan interest in the succeeding period. On the other hand, if the City prefers not to settle thru self financing, they must take into account potential maximum interest income which would be generated if they opt to place their unrestricted funds on government depository banks offering higher interest rate.

Although it was true that there was unrestricted available cash balance as of July 31, 2007 amounting to P32,447,566.80, the figure might not be available considering the appropriations made by the city in its Annual Budget and in its Supplemental Budgets using the declared surplus at year-end, and of which claims for contracted services had already been obligated.

The City was not able to provide adequate measures to protect grants to NGOs/POs for CY 2007 amounting to P11,775,944.47 contrary to the provisions provided by COA Circular No. 96-003. Thus, there is less assurance that the projects undertaken by the NGOs/POs are supportive of the programs or thrusts of the LGU. Likewise, value delivered to the beneficiaries was not ensured.

The management is enjoined to conform to the provisions stated under COA Circular No. 96-003 with emphasis on the accreditation requirements of qualified NGOs/POs and the performance of the required monitoring activities. This will ensure that the projects undertaken by the NGOs/POs are supportive of the programs or thrusts of the LGU and the value was delivered to the intended beneficiaries.

Concerned groups who have no Accreditation Permits are now in the process of securing said permits from the Sangguniang Panglunsod. Likewise the General Standards for the project implementation, acceptance and monitoring is also now in the process of authorization. In the meantime, the Project Monitoring Committee is tasked to follow-up and verifies the status of project implementation and reports of which are required for those making settlements of the cash advances given.

X

The 20% Local Development Fund (LDF) could have been appropriated and utilized for programs and projects that partake the nature of

We recommend that for the ensuing year, the city government should prepare an Annual Investment Plan that should adhere strictly to the general policies and

For Budget Year 2009, Appropriation for Local Development Fund comprise Capital Expenditures in socio-economic development

X

Budget for CY 2008 still includes MOOE

investment and capital expenditures that would directly generate jobs and livelihood opportunities for the constituents of the city, rather than for other expenses appropriately chargeable against Maintenance and Other Operating Expenses (MOOE), had the city government adhered strictly to the general policies and guidelines on the appropriation and utilization of the 20% LDF.

guidelines on the appropriation and utilization of the 20% of the Annual Internal Revenue Allotment (IRA) for Development projects, particularly for those projects that should partake the nature of investment and capital expenditure as enumerated under the Joint DILG-DBM Memorandum Circular No. 1, s. 2005 dated September 20, 2005.

and in environmental management. MOOE items have been transferred to the budgets of responsible offices or to non-office accounts. Utilization of which shall be made particularly for projects and programs that shall partake the nature of investments and capital expenditures.

items. Audit finding was reiterated in the CY 2008 AAR.

* Legend: I - Implemented PI – Partially Implemented NI – Not Implemented

PART - IV

ANNEXES

I. Financial Statements by Fund A. General Fund A1. Balance Sheet A2. Statement of Income and Expenses A3. Statement of Cash Flows B. Special Education Fund B1. Balance Sheet B2. Statement of Income and Expenses B3. Statement of Cash Flows C. Trust Fund C1. Balance Sheet C2. Statement of Cash Flows II. Status of Appropriations, Allotments and Obligations (SAAO) D. SAAO – Current Legislative Appropriation (General Fund and SEF) III. Others

I – FINANCIAL STATEMENTS BY FUND

A. General Fund B. Special Education FundC. Trust Fund

ANNEX A.1

2008 2007ASSETSCurrent assets Cash P 242,876,481.20 P 236,658,891.42

Receivables 102,024,164.02 79,177,507.83 Inventories 3,079,308.38 3,135,099.19 Prepayments 4,233,360.66 3,777,066.75 Other Current Assets 58,471.95 58,471.95

Total Current Assets P 352,271,786.21 P 322,807,037.14 Property, Plant and Equipment (net of depreciation)

Land P 151,929,789.46 P 146,296,289.46 Land Improvements 384,807,280.29 384,163,141.45 Buildings 247,141,152.57 252,656,992.69 Office Equipment, Furniture and Fixtures 12,637,854.06 13,827,016.52 Machineries and Equipment 21,483,094.69 15,376,338.94 Transportation Equipment 11,460,877.37 12,510,210.24 Other Property Plant and Equipment 13,494,534.16 14,830,143.98 Public Infrastructures 4,249,213.65 329,034.45 Construction in Progress 98,223,657.38 82,597,046.07 Total Property, Plant and Equipment P 945,427,453.63 P 922,586,213.80

Other Assets P 814,021.96 P 814,021.96 TOTAL ASSETS P 1,298,513,261.80 P 1,246,207,272.90

LIABILITIES AND EQUITYLIABILITIESCurrent Liabilities P 122,151,038.31 P 122,699,972.82 Long-Term Liabilities 63,003,061.40 90,036,940.36 Deferred Credits 84,276,469.14 68,780,049.06

Total Liabilities P 269,430,568.85 P 281,516,962.24

EQUITY Government Equity, Beg. P 964,690,310.66 P 905,804,011.12 Add/Deduct:

Retained Operating Surplus 71,908,751.08 67,291,633.67 Prior Year's Adjustments 4,112,917.76 25,978,460.33 Transfers to Registry (11,629,286.55) (34,383,794.46)

Government Equity, End P 1,029,082,692.95 P 964,690,310.66 TOTAL LIABILITIES AND EQUITY P 1,298,513,261.80 P 1,246,207,272.90

(With Comparative Figures for CY 2007)

CITY OF NAGA Balance Sheet

As of December 31, 2008GENERAL FUND : 100

ANNEX A.2

2008 2007Income

Local Taxes P 119,524,928.10 P 114,941,162.78 Permits and Licenses 14,419,230.20 10,714,931.92

Service Income 10,101,507.06 8,497,484.73 Business Income 47,550,852.20 44,353,826.77 Other Income 255,792,575.45 237,084,742.09

Total Income P 447,389,093.01 P 415,592,148.29 Less: Expenses

Personal Services P 180,409,351.52 P 161,774,800.31 Maintenance and Other Operating Expenses 150,722,293.79 144,403,311.14 Financial Expenses 7,963,498.27 11,899,533.63

Total Expenses P 339,095,143.58 P 318,077,645.08 Net Operating Income P 108,293,949.43 P 97,514,503.21 Less:Subsidies and Donations Subsidy to Local Government Units P 14,087,881.55 P 10,095,240.87 Subsidy to NGOs/POs 916,025.00 1,797,808.42 Subsidy to Other Funds 223,125.00 595,000.00 Donations 21,158,166.80 17,734,820.25 Total P 36,385,198.35 P 30,222,869.54 NET INCOME P 71,908,751.08 P 67,291,633.67

(With Comparative Figures for CY 2007)

CITY OF NAGA Statement of Income and Expenses

For the Year Ended December 31, 2008GENERAL FUND: 100

ANNEX A.3

2008 2007Cash Flows from Operating Activities

Cash Inflows: Collection from taxes P 108,078,377.38 P 110,922,126.21

Share from Internal Revenue Collections 238,737,831.00 226,608,963.00 Receipts from sale of goods and services 72,071,589.46 63,566,243.42 Interest Income 7,897,833.28 5,556,389.19 Other Receipts (2,199,631.49) 19,370,945.38 Total Cash Inflow P 424,585,999.63 P 426,024,667.20

Cash Outflows:Payments-To suppliers/creditors P 130,798,624.92 P 101,142,173.59 To employees 182,285,399.50 162,176,747.18 Interest Expenses 7,844,052.26 10,216,110.93 Other Expenses 7,299,249.40 12,274,223.44 Total Cash Outflow P 328,227,326.08 P 285,809,255.14

Net Cash Operating Activities P 96,358,673.55 P 140,215,412.06 Cash Flows from Investing Activities

Cash Outflows:To Purchase Property, Plant and Equipment P 56,703,374.67 P 85,340,264.45 To Grant/Make Loans to Other Entities 6,425,660.52 5,953,316.21 Total Cash Outflow P 63,129,035.19 P 91,293,580.66

Net Cash Investing Activities P (63,129,035.19) P (91,293,580.66) Cash Flows from Financing Activities

Cash Outflows:Payment of Loan Amortization P 27,012,048.58 P 11,952,230.61 Total Cash Outflow P 27,012,048.58 P 11,952,230.61

Net cash from financing activities P (27,012,048.58) P (11,952,230.61) Net increase in cash P 6,217,589.78 P 36,969,600.79 Cash at the beginning of the year 236,658,891.42 199,689,290.63 Cash at the End of the Period P 242,876,481.20 P 236,658,891.42

(With Comparative Figures for CY 2007)

CITY OF NAGA Statement of Cash Flows

For the Year Ended December 31, 2008GENERAL FUND: 100

ANNEX B.1

2008 2007ASSETSCurrent assets Cash P 31,897,902.80 P 5,445,619.19

Receivables 45,900,335.14 54,376,851.85 Prepayments 1,650.61 1,650.61

Total Current Assets P 77,799,888.55 P 59,824,121.65 Property, Plant and Equipment (net of depreciation)

LandLand Improvements P 2,740,962.32 P 2,880,294.32 Buildings 31,305,456.98 25,515,467.86 Office Equipment, Furniture and Fixtures 10,986,475.43 11,672,780.04 Machineries and Equipment 66,810.45 78,667.64 Transportation Equipment 267,857.15 364,285.72 Other Property Plant and Equipment 2,696,194.94 2,800,534.89 Construction in Progress Total Property, Plant and Equipment P 48,063,757.27 P 43,312,030.47

Other Assets P 561,664.30 P 561,664.30 TOTAL ASSETS P 126,425,310.12 P 103,697,816.42

LIABILITIES AND EQUITYLIABILITIESCurrent Liabilities P 1,370,914.27 P 8,384,658.50 Deferred Credits 31,317,053.54 23,036,125.61

Total Liabilities P 32,687,967.81 P 31,420,784.11

EQUITY Government Equity, Beg. P 72,277,032.31 P 54,493,039.85 Add/Deduct:

Retained Operating Surplus 20,857,087.35 17,537,789.22 Prior Year's Adjustments 603,222.65 246,203.24 Transfers to Registry -

Government Equity, End P 93,737,342.31 P 72,277,032.31 TOTAL LIABILITIES AND EQUITY P 126,425,310.12 P 103,697,816.42

(With Comparative Figures for CY 2007)

CITY OF NAGA Balance Sheet

As of December 31, 2008SPECIAL EDUCATION FUND : 200

ANNEX B.2

2008 2007Income

Local Taxes P 50,145,853.23 P 48,081,788.24 Other Income 93,400.68 2,920.15

Total Income P 50,239,253.91 P 48,084,708.39 Less: Expenses

Personal Services P 15,395,773.38 P 15,442,472.27 Maintenance and Other Operating Expenses 11,790,579.94 11,200,501.64

Total Expenses P 27,186,353.32 P 26,642,973.91 Net Operating Income P 23,052,900.59 P 21,441,734.48 Less:Subsidies and Donations Subsidy to Local Government Units P Subsidy to NGOs/POs 2,195,813.24 P 3,903,945.26 Total P 2,195,813.24 P 3,903,945.26 NET INCOME P 20,857,087.35 P 17,537,789.22

(With Comparative Figures for CY 2007)

CITY OF NAGA Statement of Income and Expenses

For the Year Ended December 31, 2008SPECIAL EDUCATION FUND: 200

ANNEX B.3

2008 2007Cash Flows from Operating Activities

Cash Inflows: Collection from taxes P 59,069,411.70 P 33,850,951.44

Total Cash Inflow P 59,069,411.70 P 33,850,951.44 Cash Outflows:

Payments-To suppliers/creditors P 5,107,568.07 P 6,137,560.51 To employees 18,696,144.17 13,847,689.57 Other Expenses 3,116,591.70 3,720,602.71 Total Cash Outflow P 26,920,303.94 P 23,705,852.79

Net Cash Operating Activities P 32,149,107.76 P 10,145,098.65 Cash Flows from Investing Activities

Cash Outflows:To Purchase Property, Plant and Equipment P 7,204,959.73 P 2,751,107.10 To Grant/Make Loans to Other Entities (1,508,135.58) 3,941,790.79 Total Cash Outflow P 5,696,824.15 P 6,692,897.89

Net Cash Investing Activities P (5,696,824.15) P (6,692,897.89) Cash Flows from Financing ActivitiesNet increase in cash P 26,452,283.61 P 3,452,200.76 Cash at the beginning of the year 5,445,619.19 1,993,418.43 Cash at the End of the Period P 31,897,902.80 P 5,445,619.19

(With Comparative Figures for CY 2007)

CITY OF NAGA Statement of Cash Flows

For the Year Ended December 31, 2008SPECIAL EDUCATION FUND: 200

ANNEX C.1

2008 2007ASSETSCurrent assets Cash P 28,714,288.49 P 30,865,925.72

Receivables 5,417,932.64 1,931,927.09 Prepayments 6,271.68 6,271.68

Total Current Assets P 34,138,492.81 P 32,804,124.49 TOTAL ASSETS P 34,138,492.81 P 32,804,124.49

LIABILITIES AND EQUITYLIABILITIESCurrent Liabilities P 34,138,492.81 P 32,639,124.49 Deferred Credits - 165,000.00

Total Liabilities P 34,138,492.81 P 32,804,124.49 TOTAL LIABILITIES AND EQUITY P 34,138,492.81 P 32,804,124.49

(With Comparative Figures for CY 2007)

CITY OF NAGA Balance Sheet

As of December 31, 2008TRUST FUND : 300

ANNEX C.2

2008 2007Cash Flows from Operating Activities

Cash Inflows:Collection from Employees P PCollection from SuppliersOther Receipts 3,808,424.40 8,696,387.26 Total Cash Inflow P 3,808,424.40 P 8,696,387.26

Cash Outflows:Payments-To employees 127,576.74 P (2,892.25) To suppliers (859,825.78) Other Expenses 6,692,310.67 (77,474.14) Total Cash Outflow P 5,960,061.63 P (80,366.39)

Net Cash Operating Activities P (2,151,637.23) P 8,776,753.65 Net increase in cash P (2,151,637.23) P 8,776,753.65 Cash at the beginning of the year 30,865,925.72 22,089,172.07 Cash at the End of the Period P 28,714,288.49 P 30,865,925.72

(With Comparative Figures for CY 2007)

CITY OF NAGA Statement of Cash Flows

For the Year Ended December 31, 2008TRUST FUND: 300

II – STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS

ANNEX D

CODE FUNCTION/PROGRAM/PROJECT Appropriation Allotment Obligations UnobligatedGRAND TOTAL 569,783,932.25 569,783,932.25 473,623,000.08 96,160,932.17

1000 GENERAL PUBLIC SERVICES 146,639,917.93 146,639,917.93 131,023,237.49 15,616,680.44

Executive Services (Mayor) 14,984,597.18 14,984,597.18 13,522,771.46 1,461,825.72

1011 General Administration 13,699,455.96 13,699,455.96 12,417,278.01 1,282,177.95

PS 5,615,415.83 5,615,415.83 5,615,415.83 -

MOOE 5,284,040.13 5,284,040.13 4,202,580.59 1,081,459.54

CO 2,800,000.00 2,800,000.00 2,599,281.59 200,718.41 1014 Barangay Secretariat 1,285,141.22 1,285,141.22 1,105,493.45 179,647.77

PS 988,016.79 988,016.79 988,016.79 -

MOOE 297,124.43 297,124.43 117,476.66 179,647.77 Legislative Services 19,333,736.20 19,333,736.20 18,861,762.79 471,973.41

1021 Legislation 19,333,736.20 19,333,736.20 18,861,762.79 471,973.41

PS 15,732,033.57 15,732,033.57 15,732,033.57 -

MOOE 2,624,270.50 2,624,270.50 2,152,297.09 471,973.41

CO 977,432.13 977,432.13 977,432.13 - Administrative Services (Administrator 2,665,266.19 2,665,266.19 2,402,463.55 262,802.64

1032 Personnel Officer 2,665,266.19 2,665,266.19 2,402,463.55 262,802.64

PS 1,998,684.08 1,998,684.08 1,998,684.08 -

MOOE 666,582.11 666,582.11 403,779.47 262,802.64 Planning and Development Coordination 3,790,702.94 3,790,702.94 3,746,180.29 44,522.65

1041 General Administration 3,790,702.94 3,790,702.94 3,746,180.29 44,522.65

PS 3,643,886.35 3,643,886.35 3,643,886.35 -

MOOE 146,816.59 146,816.59 102,293.94 44,522.65 Civil Registry (Civil Registrar) 2,955,281.03 2,955,281.03 2,882,629.78 72,651.25

1051 General Administration 2,955,281.03 2,955,281.03 2,882,629.78 72,651.25

PS 2,540,680.06 2,540,680.06 2,540,680.06 -

MOOE 414,600.97 414,600.97 341,949.72 72,651.25 General Services (General Services Officer 10,140,243.52 10,140,243.52 9,587,227.01 553,016.51

1061 General Administration 10,140,243.52 10,140,243.52 9,587,227.01 553,016.51

PS 4,414,580.14 4,414,580.14 4,414,580.14 -

MOOE 5,725,663.38 5,725,663.38 5,172,646.87 553,016.51 Budgeting Services (Budget Officer) 2,211,747.60 2,211,747.60 2,085,890.60 125,857.00

1071 General Administration 2,211,747.60 2,211,747.60 2,085,890.60 125,857.00

PS 1,971,865.87 1,971,865.87 1,971,865.87 -

MOOE 239,881.73 239,881.73 114,024.73 125,857.00

CONSOLIDATED

CITY OF NAGA

STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATION

(Current Legislative Apropriation)

FOR THE YEAR ENDED DECEMBER 31, 2008

CODE FUNCTION/PROGRAM/PROJECT Appropriation Allotment Obligations UnobligatedAccounting Services (Accountant) 5,852,960.71 5,852,960.71 5,701,292.38 151,668.33

1081 General Administration 5,852,960.71 5,852,960.71 5,701,292.38 151,668.33

PS 5,497,863.01 5,497,863.01 5,497,863.01 -

MOOE 355,097.70 355,097.70 203,429.37 151,668.33 Treasury Services (Treasurer) 11,826,434.03 11,826,434.03 11,795,571.99 30,862.04

1091 General Administration 11,826,434.03 11,826,434.03 11,795,571.99 30,862.04

PS 10,166,964.02 10,166,964.02 10,166,964.02 -

MOOE 1,659,470.01 1,659,470.01 1,628,607.97 30,862.04 Assessment of Real Property (Assesso 7,788,125.79 7,788,125.79 6,751,015.51 1,037,110.28

1101 General Administration 7,788,125.79 7,788,125.79 6,751,015.51 1,037,110.28

PS 6,241,667.09 6,241,667.09 6,241,667.09 -

MOOE 1,546,458.70 1,546,458.70 509,348.42 1,037,110.28 Auditing Services (Auditor) 80,000.00 80,000.00 75,671.93 4,328.07

1111 General Administration 80,000.00 80,000.00 75,671.93 4,328.07

MOOE 80,000.00 80,000.00 75,671.93 4,328.07 Information Services 4,636,798.46 4,636,798.46 4,196,241.41 440,557.05

1121 General Administration (EDP) 2,189,942.26 2,189,942.26 1,856,768.88 333,173.38

PS 1,459,534.30 1,459,534.30 1,459,534.30 -

MOOE 730,407.96 730,407.96 397,234.58 333,173.38 1122 Library Services 2,446,856.20 2,446,856.20 2,339,472.53 107,383.67

PS 1,934,779.32 1,934,779.32 1,934,779.32 -

MOOE 512,076.88 512,076.88 404,693.21 107,383.67 Legal Services (Attorney/Legal Officer) 1,996,227.98 1,996,227.98 1,927,089.50 69,138.48

1131 General Administration 1,996,227.98 1,996,227.98 1,927,089.50 69,138.48

PS 1,626,258.83 1,626,258.83 1,626,258.83 -

MOOE 369,969.15 369,969.15 300,830.67 69,138.48 Prosecution Services 104,000.00 104,000.00 99,334.97 4,665.03

1141 General Administration 104,000.00 104,000.00 99,334.97 4,665.03

MOOE 104,000.00 104,000.00 99,334.97 4,665.03 Administration of Justice (Inferior Court) 240,000.00 240,000.00 229,989.15 10,010.85

1151 Regional Trial Court 80,000.00 80,000.00 80,000.00 -

MOOE 80,000.00 80,000.00 80,000.00 - 1158 City/Municipal Trial Court 160,000.00 160,000.00 149,989.15 10,010.85

MOOE 160,000.00 160,000.00 149,989.15 10,010.85 Police Services 10,465,347.00 10,465,347.00 6,769,416.56 3,695,930.44

1181 General Administration(Public Safety Offic 10,465,347.00 10,465,347.00 6,769,416.56 3,695,930.44

PS 3,889,033.66 3,889,033.66 3,889,033.66 -

MOOE 596,313.34 596,313.34 358,798.62 237,514.72

CO 5,980,000.00 5,980,000.00 2,521,584.28 3,458,415.72

FOR THE YEAR ENDED DECEMBER 31, 2008

CONSOLIDATED

CITY OF NAGA

STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATION

(Current Legislative Apropriation)

CODE FUNCTION/PROGRAM/PROJECT Appropriation Allotment Obligations Unobligated

Local Development Fund 738,000.00 738,000.00 625,106.95 112,893.05

1914 Peace and Order 738,000.00 738,000.00 625,106.95 112,893.05

MOOE 738,000.00 738,000.00 625,106.95 112,893.05 Miscellaneous General Public Services 46,830,449.30 46,830,449.30 39,763,581.66 7,066,867.64

1999 Others 46,830,449.30 46,830,449.30 39,763,581.66 7,066,867.64

MOOE 46,830,449.30 46,830,449.30 39,763,581.66 7,066,867.64 3000 EDUC., CULT., SPORTS & MANPOWER DEV 59,188,134.36 59,188,134.36 41,567,828.46 17,620,305.90

3321 Public Education 42,811,313.12 42,811,313.12 27,446,145.15 15,365,167.97

Elementary Schools 22,327,177.16 22,327,177.16 16,049,831.35 6,277,345.81

PS 10,134,583.85 10,134,583.85 8,334,140.34 1,800,443.51

MOOE 4,524,808.31 4,524,808.31 2,241,759.80 2,283,048.51

CO 7,667,785.00 7,667,785.00 5,473,931.21 2,193,853.79 3322 Secondary Schools 19,378,507.56 19,378,507.56 10,440,787.94 8,937,719.62

PS 7,160,722.56 7,160,722.56 6,898,656.26 262,066.30

MOOE 4,550,000.00 4,550,000.00 2,269,715.97 2,280,284.03

CO 7,667,785.00 7,667,785.00 1,272,415.71 6,395,369.29 3324 Vocational/Technical School 1,105,628.40 1,105,628.40 955,525.86 150,102.54

PS 606,500.00 606,500.00 606,500.00 -

MOOE 499,128.40 499,128.40 349,025.86 150,102.54 Education Subsidiary Services 1,200,000.00 1,200,000.00 1,172,415.00 27,585.00

3331 Medical Subsidiary Services 1,200,000.00 1,200,000.00 1,172,415.00 27,585.00

MOOE 1,200,000.00 1,200,000.00 1,172,415.00 27,585.00 Manpower Development 2,145,770.00 2,145,770.00 1,247,480.60 898,289.40

3351 Mngt. Tool (Seminar Expen.& Training Proje 2,145,770.00 2,145,770.00 1,247,480.60 898,289.40

MOOE 2,145,770.00 2,145,770.00 1,247,480.60 898,289.40 Other Educ., Sports & Manpower Dev't. Ser 7,411,251.24 7,411,251.24 6,135,551.32 1,275,699.92

3392 Sports Development/Physical Fitness 2,920,000.00 2,920,000.00 2,629,119.14 290,880.86

MOOE 2,920,000.00 2,920,000.00 2,629,119.14 290,880.86 3399 Sundry Educational Services 4,491,251.24 4,491,251.24 3,506,432.18 984,819.06

PS 1,606,477.61 1,606,477.61 1,606,477.61 -

MOOE 2,884,773.63 2,884,773.63 1,899,954.57 984,819.06 Local Development Fund 5,619,800.00 5,619,800.00 5,566,236.39 53,563.61

3999 Others 5,619,800.00 5,619,800.00 5,566,236.39 53,563.61

MOOE 5,619,800.00 5,619,800.00 5,566,236.39 53,563.61 4000 HEALTH SERVICES 29,103,450.36 29,103,450.36 27,477,291.71 1,626,158.65

Health Services (Health Officer) 13,621,240.25 13,621,240.25 13,439,146.73 182,093.52

4411 General Administration 13,621,240.25 13,621,240.25 13,439,146.73 182,093.52

PS 11,105,010.75 11,105,010.75 11,105,010.75 -

MOOE 2,516,229.50 2,516,229.50 2,334,135.98 182,093.52

(Current Legislative Apropriation)

FOR THE YEAR ENDED DECEMBER 31, 2008

CONSOLIDATED

CITY OF NAGA

STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATION

CODE FUNCTION/PROGRAM/PROJECT Appropriation Allotment Obligations Unobligated

Hospital 15,482,210.11 15,482,210.11 14,038,144.98 1,444,065.13

4421 General Administration 15,482,210.11 15,482,210.11 14,038,144.98 1,444,065.13

PS 7,647,016.39 7,647,016.39 7,647,016.39 -

MOOE 7,835,193.72 7,835,193.72 6,391,128.59 1,444,065.13 6000 HOUSING AND COMMUNITY DEVELOPMEN 22,299,597.75 22,299,597.75 13,280,396.31 9,019,201.44

Community Development 7,617,171.29 7,617,171.29 7,568,931.51 48,239.78

6542 Resettlement, Zonal Impro. Proj., Urban & Ru 7,617,171.29 7,617,171.29 7,568,931.51 48,239.78

PS 1,937,360.90 1,937,360.90 1,937,360.90 -

MOOE 181,110.39 181,110.39 132,870.61 48,239.78

CO 5,498,700.00 5,498,700.00 5,498,700.00 - Local Development Fund 14,682,426.46 14,682,426.46 5,711,464.80 8,970,961.66

6918 Pur., Const. & Imp.of Gov't. Fac.-Housing & C 14,682,426.46 14,682,426.46 5,711,464.80 8,970,961.66

CO 14,682,426.46 14,682,426.46 5,711,464.80 8,970,961.66 7000 SOCIAL WELFARE SERVICES 44,763,310.50 44,763,310.50 43,619,712.13 1,143,598.37

Social Welfare Services (Social Welfare & D 9,349,160.26 9,349,160.26 8,876,021.70 473,138.56

7611 General Administration 9,349,160.26 9,349,160.26 8,876,021.70 473,138.56

PS 4,741,117.65 4,741,117.65 4,741,117.65 -

MOOE 4,608,042.61 4,608,042.61 4,134,904.05 473,138.56 Family Planning Services (Population Offic 4,694,045.25 4,694,045.25 4,557,920.05 136,125.20

7621 General Administration 4,694,045.25 4,694,045.25 4,557,920.05 136,125.20

PS 2,963,644.15 2,963,644.15 2,963,644.15 -

MOOE 1,730,401.10 1,730,401.10 1,594,275.90 136,125.20 Miscellaneous, Other Social Services 30,720,104.99 30,720,104.99 30,185,770.38 534,334.61

7993 Aids and Contribution to National Governm 320,000.00 320,000.00 302,420.00 17,580.00

MOOE 320,000.00 320,000.00 302,420.00 17,580.00 7994 Aids & Cont. to Gov't. Agencies Other than Na 19,015,404.99 19,015,404.99 18,629,878.04 385,526.95

MOOE 17,831,549.24 17,831,549.24 17,473,022.29 358,526.95

CO 1,183,855.75 1,183,855.75 1,156,855.75 27,000.00 7999 Others 11,384,700.00 11,384,700.00 11,253,472.34 131,227.66

MOOE 11,384,700.00 11,384,700.00 11,253,472.34 131,227.66 8000 ECONOMIC SERVICES 149,851,991.53 149,851,991.53 126,871,536.13 22,980,455.40

Agricultural Services 3,674,274.86 3,674,274.86 3,594,857.70 79,417.16

8711 General Administration (Agriculturist) 3,674,274.86 3,674,274.86 3,594,857.70 79,417.16

PS 3,364,520.32 3,364,520.32 3,364,520.32 -

MOOE 309,754.54 309,754.54 230,337.38 79,417.16 Veterinary Services (Veterinarian) 1,751,181.76 1,751,181.76 1,606,246.57 144,935.19

8721 General Administration 1,751,181.76 1,751,181.76 1,606,246.57 144,935.19

PS 1,411,843.40 1,411,843.40 1,411,843.40 -

MOOE 339,338.36 339,338.36 194,403.17 144,935.19

STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATION

(Current Legislative Apropriation)

FOR THE YEAR ENDED DECEMBER 31, 2008

CONSOLIDATED

CITY OF NAGA

CODE FUNCTION/PROGRAM/PROJECT Appropriation Allotment Obligations UnobligatedNat.Resources Services (Env. & Natural Re 23,762,055.67 23,762,055.67 22,997,384.53 764,671.14

8731 General Administration 23,762,055.67 23,762,055.67 22,997,384.53 764,671.14

PS 16,114,822.18 16,114,822.18 16,114,822.18 -

MOOE 7,647,233.49 7,647,233.49 6,882,562.35 764,671.14 Engineering Services 54,253,200.25 54,253,200.25 37,446,021.39 16,807,178.86

8751 General Administration 54,253,200.25 54,253,200.25 37,446,021.39 16,807,178.86

PS 15,527,022.04 15,527,022.04 15,527,022.04 -

MOOE 1,303,249.92 1,303,249.92 1,143,573.16 159,676.76

CO 37,422,928.29 37,422,928.29 20,775,426.19 16,647,502.10 Operation of Markets 7,255,902.94 7,255,902.94 7,159,605.10 96,297.84

8811 General Administration 7,255,902.94 7,255,902.94 7,159,605.10 96,297.84

PS 6,828,402.08 6,828,402.08 6,828,402.08 -

MOOE 427,500.86 427,500.86 331,203.02 96,297.84 Operation of Slaughterhouse 3,674,809.97 3,674,809.97 3,383,998.62 290,811.35

8812 General Administration 3,674,809.97 3,674,809.97 3,383,998.62 290,811.35

PS 2,941,803.45 2,941,803.45 2,941,803.45 -

MOOE 733,006.52 733,006.52 442,195.17 290,811.35 Economic Development Programs 8,707,440.49 8,707,440.49 7,182,380.91 1,525,059.58

8852 Tourism Projects 3,564,694.28 3,564,694.28 2,256,712.88 1,307,981.40

PS 237,600.00 237,600.00 237,600.00 -

MOOE 2,327,094.28 2,327,094.28 2,019,112.88 307,981.40

CO 1,000,000.00 1,000,000.00 1,000,000.00 8853 Commercial Development Projects (Trade, Fa 938,854.63 938,854.63 813,776.64 125,077.99

PS 479,053.46 479,053.46 479,053.46 -

MOOE 459,801.17 459,801.17 334,723.18 125,077.99 8859 Other Eco. Dev't. Proj.( NC Price Coord. C 160,000.00 160,000.00 138,106.30 21,893.70

MOOE 160,000.00 160,000.00 138,106.30 21,893.70 8872 Other Eco. Dev't. Proj.( METRO PESO) 4,043,891.58 4,043,891.58 3,973,785.09 70,106.49

PS 3,820,818.56 3,820,818.56 3,820,818.56 -

MOOE 223,073.02 223,073.02 152,966.53 70,106.49 Local Development Fund 42,869,275.59 42,869,275.59 39,599,101.31 3,270,174.28

8911 Agricultural Development Projects 1,028,242.93 1,028,242.93 242,221.50 786,021.43

MOOE 1,028,242.93 1,028,242.93 242,221.50 786,021.43 8912 Tourism Projects 1,535,142.58 1,535,142.58 159,840.40 1,375,302.18

MOOE 1,535,142.58 1,535,142.58 159,840.40 1,375,302.18 8918 Purchase, Const. & Impro.of Gov't.Fac.-Econo 28,879,537.55 28,879,537.55 28,175,156.98 704,380.57

MOOE 7,223,181.10 7,223,181.10 7,219,823.71 3,357.39

CO 21,656,356.45 21,656,356.45 20,955,333.27 701,023.18

CONSOLIDATED

CITY OF NAGA

STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATION

(Current Legislative Apropriation)

FOR THE YEAR ENDED DECEMBER 31, 2008

CODE FUNCTION/PROGRAM/PROJECT Appropriation Allotment Obligations Unobligated

8919 Other Economic Services Projects 11,426,352.53 11,426,352.53 11,021,882.43 404,470.10

MOOE 701,323.50 701,323.50 405,860.00 295,463.50

CO 10,725,029.03 10,725,029.03 10,616,022.43 109,006.60 Miscellaneous Economic Services 3,903,850.00 3,903,850.00 3,901,940.00 1,910.00

8999 Others 3,903,850.00 3,903,850.00 3,901,940.00 1,910.00

CO 3,903,850.00 3,903,850.00 3,901,940.00 1,910.00 9000 OTHER PURPOSES 117,937,529.82 117,937,529.82 89,782,997.85 28,154,531.97

Public Debt 38,597,373.49 38,597,373.49 34,855,523.95 3,741,849.54

9921 Loan Amortization – Domestic 38,597,373.49 38,597,373.49 34,855,523.95 3,741,849.54

MOOE 38,597,373.49 38,597,373.49 34,855,523.95 3,741,849.54 Retirement and Other Benefits 30,422,203.89 30,422,203.89 28,862,535.67 1,559,668.22

9931 Lump-Sum Appropriations 30,422,203.89 30,422,203.89 28,862,535.67 1,559,668.22

PS 30,422,203.89 30,422,203.89 28,862,535.67 1,559,668.22 Miscellaneous Other Purposes 48,917,952.44 48,917,952.44 26,064,938.23 22,853,014.21

9991 Outlays in Conn.w/ Dis.& Other Cal., Other tha 450,895.00 450,895.00 - 450,895.00

MOOE 450,895.00 450,895.00 450,895.00 9993 Aids to National Government Agencies 108,000.00 108,000.00 97,074.10 10,925.90

MOOE 108,000.00 108,000.00 97,074.10 10,925.90 9997 Aids to Non-Government Entities, Not Elsewhe 1,990,000.00 1,990,000.00 1,860,175.02 129,824.98

MOOE 1,990,000.00 1,990,000.00 1,860,175.02 129,824.98 9998 Budgetary Reserves 19,949,326.05 19,949,326.05 - 19,949,326.05

MOOE 19,949,326.05 19,949,326.05 19,949,326.05 9999 Others 26,419,731.39 26,419,731.39 24,107,689.11 2,312,042.28

MOOE 21,151,302.98 21,151,302.98 19,007,649.36 2,143,653.62

CO 5,268,428.41 5,268,428.41 5,100,039.75 168,388.66

FOR THE YEAR ENDED DECEMBER 31, 2008

CONSOLIDATED

CITY OF NAGA

STATUS OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATION

(Current Legislative Apropriation)

III - OTHERS

ANNEX 1 Summary of Cash Advances

2 Analysis of Cash Advances 3 Proposed Adjusting Journal Entries in the Agency Books 4 List of Inventories 5 List of PPE 6 BIR Memorandum dated November 29, 2007 7 BIR Confirmation Reply 8 Summary Schedule of Discrepancies Noted in CY 2008 LGU-Naga

Remittances vs. BIR Acknowledgement of Payments 9 Summary of Suggested AJE on Over Withheld Tax Refund

10 Summary of Suggested AJE for Unrecorded Remittances 11 Aging of Due to LGUs 12 Status Report on Submission of Accounts 13 Analysis of Due From NGOs/POs 14 Aging of Due From NGOs/POs 15 Annual Investment Plan 16 LDF Total Authorized Appropriation 17 SAAO-LDF 18 Statement of Income & Expenses – LDF 19 Pre-Closing Trial Balance – LDF 20 SAAO – SEF 21 NCSB Budget CY 2008 22 Schedule of Monthly Income & Obligations 23 Certification – Total Obligations for QUEEN 24 Report on Delinquent Stall Rentals as of December 31, 2008 25 Samples of Market Occupants Rental Recod 26 Samples of ORs Issued Under the Accountability of Mr. Jude Rey 27 Report on PDAF Received by LGU-Naga City

ANNEX 1

SUMMARY OF CASH ADVANCESAs of December 31, 2008 LGU-Naga City

General FundSpecial Education

Fund Trust Fund TOTALCash Disbursing Officer Php2,376,437.43 Php1,787,818.62 Php157,546.47 Php4,321,802.52Due From Officers and Employees 2,325,221.45 443,246.95 311,408.37 3,079,876.77

TOTAL CASH ADVANCES Php4,701,658.88 Php2,231,065.57 Php468,954.84 Php7,401,679.29

ANNEX 2

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

Cash Disbursing Officer - Account 103GENERAL FUND

Abaño, Atty. Aldrico* 2,000.00 2,000.00 2,000.00

Abonal, Arthur/GSD-Supply Officer IV 3/9/2000 904 278998 Purchase of 1 Unit Engine 42,000.00 42,000.00 42,000.00

Abonal, Esteban/SPO-City Councilor 9/1998 3775 145498 Civic Parade 1998 39,953.30 39,953.30 39,953.30

Agra (Concep.Peq.Treas.)* 500.00 500.00 500.00

Aguilar, Jose* 250.00 250.00 250.00

Aguja, Armando* 2,450.00 2,450.00 2,450.00

Alberto, Atty. Edmundo* 411.94 411.94 411.94

Añonuevo, Antonio/Supvg.Environ. Spec. 5/24/2000 2158 309783 Permit & processing for ECC 4,615.00 4,615.00 4,615.00

Apolonio, Susan 8/1993 Women's Summit, 8/26-27/1993 18,768.40 18,768.40 18,768.40

Arias, Frederick/Market Supervisor 3/6/08 947 26474880 Repair/overhauling of MB 100 van plate #SCN 506 17,966.56 17,966.56 17,966.56

Arzadon, Ruben 9/3/1986 2487 346074-0 5,000.00 5,000.00 5,000.00

Badiola, Leticia T. 1/6/05 21 637569 Personal Services 0.30 1/13/05 139 637579 (3.00)

6/26/2007 3110 720105 250.00 247.30 247.30

Barbosa, Jacinto 400.00 400.00 400.00

Barrios, Ruel/CTO-Admin.Officer IV 6/9/2006 2554 21125438 Purch.- 1 Unit 10 Lits. Calib. Bucket & (60.00) 4/10/2007 1676 719850 Expense on food & accomm. 99,700.00 99,640.00 99,640.00

Belleza, FO1Ma. Eliza DG 3918 913752 Cash Advance for BFP Augmentation Personnel (Peñ 14,000.00 14,000.00 14,000.00 Benito, Manuel/CTO-Asst.City Treasurer Acct.code 881 - 700.00

7/8/08 2936 913548 Manuel P. Benito- cash advance of confidential =881 284,100.00 10/08 284,100.00

11/27/08 5248 27789113 Manuel P. Benito - pyt.for registration fee of 1,000 boy (187,500.00) 12/9/08 5398 27789224 CA for livelihood loan 168,687.43 550,087.43 549,387.43 550,087.43

Benosa, Ofelia/City Market Office Metro Aide 5/5/2006 1931-2 Cash 6th Mayor's Cup 20,000.00 20,000.00 20,000.00 Buena, Lilia* 3,000.00 3,000.00 3,000.00 Cabrera, Victor 5/15/2000 1981 27843 Summer Fest 10,845.35 10,845.35 10,845.35 Calleja, Wilfran/CAgO-City Agriculturist 4/23/2007 1957 719862 Training and other expenses 33,806.00 33,806.00 33,806.00 Campillos, Rolando/UPAO-Community Office 6/29/200 2786 Process. Fee-submission Subdv. 0.41 0.41 0.41 Capaciete,, SPO3 Raul U.* 2/14-18/2005 565 Crim. Invest. Sem.,NCF Rev.Hall 20,000.00 20,000.00 20,000.00 Casareno, Francia/DSWD Social Worker I 4/14/2006 1515 638872 Food Assistance Maintenance 20,000.00 20,000.00 20,000.00 Ciudadano, Rosemarie/CPDO-Planning Offic 4/13/2007 1749 23174346 White printing & photocopying 25,500.00 25,500.00 25,500.00 Cuyo, Jose Jr./Supvg.Admin.Officer I 5/8/2007 2276 720022 Dozens of sando & shorts 17,750.00

10/17/08 4494 Purchase of Guhi & publication of invitation to apply fo 9,677.00 27,427.00 9,677.00 27,427.00 De la Torre, Gil- SPO Secretary 8/1/08 3356 913619 Voyadores Festival 2008 100,000.00

9/2008 4224-17 To take up adj. on JEV# 3356, 8/1/08 for CA used du 150,000.00 250,000.00 150,000.00 250,000.00 Del Rosario, Jesse/Raul S. Roco Library-AdminAide VI 8/26/08 3649 27787906 Purchase of of books & improvements of the Hall Fam 25,000.00 25,000.00 25,000.00 Deveterbo, Alano/ Raul S. Roco Lib.-Admin. AideIII 10/29/2005 3467-1 Cash the Raul S. Roco Day Act.= (2,076.00)

10/27/2005 Add'l. subs.- Raul S. Roco Day Act.= 11,710.00 9,634.00 9,634.00 Fernandez, SPO3 Lorna 49,050.00 49,050.00 49,050.00 Florendo, Ramon/BSTC Administrator 9/18/2003 4022 Peñafrancia Regatta 2003 21,000.00 21,000.00 21,000.00

ANALYSIS OF CASH ADVANCES

As of December 31, 2008Provision of 97-002 not complied

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

General, Leo Ricardo 2/7/08 516 26474584 City-wide taxmapping drive 5,000.00 5,000.00 5,000.00 Goce, Atty. Ceferino* launching activity, Feb. 11,2008 1,130.00 1,130.00 1,130.00 Hallig, Paulita G. 2/27/08 723 913141 space rental & freight exp./ JEV# 0.40 0.40 0.40 Imperial, Capt. Eduardo* 2,000.00 2,000.00 2,000.00 Lavadia, Kgd. Julian 12/21/2000 5784 0344801 24,365.00 24,365.00 24,365.00 Lomeda, Roseller 4043 27788199 CA for Peñafrancia Fest 2008 PNP Augmentation Pe 100,000.00 100,000.00 100,000.00 Luciano, Dr. Luningning/City Hospital - Chief 3/8/2007 1176 23173952 PCSO Endowment Fund 50,000.05 50,000.05 50,000.05 Luneta, Alfredo/ CTO Revenue Collection Off 3/30/2007 1613 23174262 Musical inst., chorale, unif.,etc. 34,000.00 34,000.00 34,000.00 Maceda, Blandino M.* 10,000.00 10,000.00 10,000.00 Madridano, Ma. Concepcion 11/08 5167 913903 cash advance for X-mas trade fair 65,000.00

12/9/08 5594 27789379 CA for Basic Paralegal Training for BCW & Bantay Fa 46,500.00 111,500.00 46,500.00 111,500.00 Manalo, Vangie/Day Care Worker II 10/21/2003 4533-3 Cash Mat. & prizes for Children's Month Celeb. 232.00 232.00 232.00 Mongoso, Cyrrene T. 7/5/06 2959 639251 (0.10)

10/24/2007 5000 912686 1,000.00 999.90 liquidated 12/03 but not posted

Mongoso, Florencio Jr./M PESO City Gov't. D 6/24/2004 3040 16881758 Bal. from subsidy used for the 7,453.74 7,453.74 7,453.74 Nuñez, Abundio* Search for Miss Bicolandia 2004 8,804.05 8,804.05 8,804.05 Olayta, M.* 200.00 200.00 200.00 Oliver, Reuel/ EDP City Gov't. Chief/Dept. Head I 9/21/2007 4564 24797033 Purchase of Animation Supplies 100,000.00 100,000.00 100,000.00 Orozco, Oscar/City ENRO Dept. Head I 7/26/2006 3239 718842 Purch.- Dissolved Oxygen Meter 43,000.00 43,000.00 43,000.00 Pascual, Lilian 10/24/08 4613 913823 Culture & Heritage Awareness, 10/25-26/08 82,400.00 82,400.00 82,400.00 Rañola, Justo-Bgy. Treas.* 388.15 388.15 388.15 Rodriguez ,Prudencio V.III, NACIGEA, Pres. 12/18/08 5515 913951 CA used for Year End Evaluation 250,000.00 250,000.00 250,000.00 Rosales, Atty.,Fiel/ Former SPO Secretary 446 Subs.- excess pyt. for Fines & pen under ORD#2001- 48,425.00 48,425.00 48,425.00 Rosin, Rodel/ Community Officer Asst. I 9/27/2001 4418 off. supplies/ snacks- induct. & cultural 8,261.75 8,261.75 8,261.75 San Joaquin, Rosanna/Bgy.Trea.-Cal,N.C. 7/12/2006 3049 21125796 Training on Scene of the Crime Oper. 8,000.00 8,000.00 8,000.00 Sergio, DC Nathan/SPO-City Councilor 10/01& 11/2002 4440 & 4502 411869&411920 Bal.- subs. for Customs Duies & Taxes 14,125.05 14,125.05 14,125.05 Tacorda, Perlita/ CMO Admin. Off. I 11/20/2007 5388 24797669 Membership & other Fees for CITYNET 94,903.70 94,903.70 94,903.70 Transferred from Infra. Fund* 5,500.00 5,500.00 5,500.00 Tubig, Evelyn/CTO-Administrative Off. 4/20/2007 1909 719859 Purchase of various office supplies 8,258.07 8,258.07 8,258.07 Villamer, Ester/CHO Admin. Off II 1/25/2007 400 23173354 Shippment of hosp. equpt. for Med. Miss. 23,599.83 23,599.83 23,599.83 Villanea, Nestor/BSTC Proj.Devt.Off. 306-7 Cash Blessing & Inauguration of Kidsmart 760.00

4/15/08 1629 913258 8th summer science fun-Filled Celeb. 0.25 760.25 760.25 Vinluan, Federico/ Raul S. Roco Library 2003 Book Week Celeb. Activities 2003 P 8,357.85 Acting City Librarian 2004 JEV# 2941-42, 8/05- Adjusting Entry 5,800.00

7/2005 2583-33 Adjusting Entry 1,169.95 7/2005 3625-32 Adj.Entry- Library Enhance Activity 250.00 15,577.80 7,219.95 15,577.80

Zantua, Rowena 3/7/08 988 26474918 2 days seminar on the passage of Special Law RA 93 4,000.00 4,000.00 4,000.00 TOTAL 2,376,437.43 762,784.38 2,375,442.63

SPECIAL EDUCATION FUND

Alano de Veterbo 3/13/2006 3/12-16/2006 travel to Manila 4,000.00 4,000.00 4,000.00 Benedick Warren Ubante-Principal, Tinago HS 11/18/2008 701 School Intramurals 7,000.00 7,000.00 7,000.00 Edna C. Porteria balance of CA for exp. during Palarong Pamb. '99 220,039.90 220,039.90 220,039.90

Provision of 97-002 not complied

ANALYSIS OF CASH ADVANCES

As of December 31, 2008

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

Madeline Joson 10/2007 696 honorarium of speakers-QUEEN Parenting 51,800.00 purchase of batteries 15,000.00 66,800.00 15,000.00 66,800.00

Marcelino Relayo 10/5/2007 676 CA for Step Skills cup on 10/2/07 at Sabang NHS 13,800.75 13,800.75 13,800.75 TOTAL 311,640.65 15,000.00 311,645.75

TRUST FUND

Antonio Anonuevo May 29,93 40.00 40.00 40.00 Gayanilo, Ma. Socorro Nov-06 0.47 0.47 0.47 Julius Elad, JR. Sep-08 24,824.50 24,824.50 24,824.50 Ester Villamer Oct-98 1,480.00 1,480.00 1,480.00 Leonora A. Fuerte 12/1-24/08 51,435.00 51,435.00 Rosemarie I Ciudadano Jun-08 63,900.00 63,900.00 63,900.00 Myrna J. Abayon Aug-08 14,500.00 14,500.00 14,500.00 Elizabeth DA. Ludovice 11/20-29/07 1,366.50 1,366.50 1,366.50

TOTAL 157,546.47 - 106,111.47

Due from Officers & Employees - Account 123GENERAL FUND

ABAD, Nelly S.B. 4/4/07 1664 719839 F/A -NC Little League Baseball Team,(4 Officials & co 30,000.00 30,000.00 30,000.00 ABAINZA, Jeremias 7/2006 For adjustment (Withholding Tax payable deducted fr 400.00 400.00 400.00 ABANTE,Melanie 3,500.00 3,500.00 3,500.00 ABAROA, Aida 3/19/08 1304 26475176 National Convention & Seminar of Legal Researcher 8,000.00 8,000.00 8,000.00 ABAWAG, Elizabeth 2,600.00 2,600.00 2,600.00 ABSALON, Rene Abiada 5/8/08 1939 913321 Rene Abiada Absalon-CAT-Manila-May 9-11, 2008 3,840.00 3,840.00 3,840.00 ADOLFO, Ma.Mawilyn Concepcion 4/11/08 1542 26475333 Bacolod City- 6th National Convention & seminar, ap 2,000.00 2,000.00 2,000.00 AGAWA, Pros.Alfredo 2,200.00 2,200.00 2,200.00 AGUILAR, Armando 4/26/07 2092-10 Cash Convention Seminar of Process Servers Assoc. of the 3,140.00 3,140.00 3,140.00 AGUILAR, Hernani 2/26/07 595-2 Cash Manila, 2/10-14/08 - To conduct field study of the rec 17,320.00 17,320.00 17,320.00 AGUILAR, Lourdes 1765-10 Cash Davao 7,000.00 7,000.00 7,000.00 ALANO, Virginia 6/7/07 2750-28 Cash Seminar Workshop on Records & Archives Managem 7,840.00 7,840.00 7,840.00 ALBAO, Insp. B. 10,000.00 10,000.00 10,000.00 ALBEUS,Ramon 6/2006 3752-4 Cash BLGF Meeting, 6/23-26/06 P 130.00 130.00

9/2006 4192-4 Cash Quezon City, 9/26-29/06 430.00 430.00 430.00 2/22/08 822- Cash Manila,2/10-13/08 - To confer with the LAMP-NTRC V 3,835.00 4,395.00 3,835.00 4,265.00

ALCALA, Eden 4780 Lucena City 10,000.00 10,000.00 10,000.00 ALCANTARA, Dolores 10/14/08 4419 913800 Dolores S. Alcantara - CAT/Albay, 10/15-17/2008 4,859.20 4,859.20 4,859.20 ALCERA, Zoraida 4/25/08 1776-7 Cash Manila, 4/28-5/2/08 - To attend the 100th PDA Annnu 400.00 400.00 400.00 ALINIANTE, Noeli 7/6/05 Cash Submitted reports of Jolly Neighbors Resettlement Pr 400.00 400.00 400.00 ALTEA, Ma. Eden 10/03 4572-11 Cash Manila, 10/03 4,406.00 4,406.00 4,406.00 AMARO, Hector 10/25/2005 3459-14 Cash Manila, 10/25-27/05 P 3,395.96

2/22/08 882-16 Cash Manila, 2/25-31/08 - To submit requirements for secu 160.00 160.00 4/4/08 1423 913193 Hector C. Amaro- CAT-Manila- April 6-8, 2008/JEV#1 1,018.00 4,573.96 1,018.00 4,573.96

ANDAYA, Joey 07/00 3625 Davao P 6,8 6,898.00 6,898.00 2/00 761 Gen. Santos City, 30,0 30,000.00 36,898.00 36,898.00

Provision of 97-002 not complied

ANALYSIS OF CASH ADVANCES

As of December 31, 2008

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

ANDUFANCIA, Edgar 4/17/07 5,900.00 5,900.00 5,900.00 ANGELES,Fe 4/98 1762-06 Cash 3,500.00 3,500.00 3,500.00 AÑONUEVO, Albert 10/2/08 4288 913781 Albert Añonuevo - CAT/ Manila 10/04-10/2008 3,100.00 3,100.00 3,100.00 ANTANG,S. 11/97 4541-20 Cash 322.00 322.00 322.00 AQUINO Jr.Hilario 3/98 1258-11 Cash P 3 322.00 322.00

11/97 4650-02 Cash ' 32 322.00 644.00 644.00 ARDEZA, Roberto 12/11/08 5435 913939 Rigoberto P. Ardeza - CAT/Albay 12/15-16/2008 1,528.00 1,528.00 1,528.00 ARROYO, Mila R. 5/02 4504 Indonesia, 5/02 P 64,05 66,357.00 66,357.00 66,357.00 ASENCE, Lourdes V. 8/9/04 3725-27 Cash Manila, 8/9-14/04 5,542.00 5,542.00 5,542.00 ASPA, Jowel 1/06 176-14 Cash To drive official vehicle MB 100, Manila, 1/15-17/06 4,300.00 4,300.00 4,300.00 AUREUS, AngeloEphraim 10/03 4345-07 Cash 5,100.00 5,100.00 5,100.00 AVENGOZA,Ramon 3/98 0970-09 Cash 1,000.00 1,000.00 1,000.00 AYO, Antonio 8/02 6978 Bacolod 10,325.00 10,325.00 10,325.00 AYUSIP, Ariel 5/05 1711-2 Cash Manila, 5/11-14/05 224.00 224.00 224.00 AZCARRAGA, George 4/17/07 1801-10 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 BACARES, A. 4/02 2313-1 Cash 1,000.00 1,000.00 1,000.00 BALANE, Virgilio 3/7/08 986 26474916 Manila Hotel, 20th NPLP Convention/Seminar & the 1 8,100.00 8,100.00 8,100.00 BALDEMORO, Marie Ann 5/9/08 1949-29 Cash Manila, 5/13-16/08- To attend Real Out of Improve St 5,380.00 5,380.00

8/15/08 3519 Cash Marie-Ann R. Baldemoro - cat - Legaspi City 8/19/08 - 10,700.00 16,080.00 16,080.00 BALISNOMO, Rowena 12/8/06 5192-21 Cash To follow up the Land Title of City Library, 12/6-9/06 4,920.00 4,920.00 4,920.00 BAÑES, Julieta 3/7/08 981 26474911 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,500.00 6,500.00 6,500.00 BANZUELA, Nelson 10/05 3413-5 Cash To coordinate with school officials on Travelling Centr 642.00

3/14/08 1122-8 Cash Daet, 3/16-18/08 - To promote & encourage hosting o 3,604.00 4,246.00 3,604.00 4,246.00 BARRAMEDA, Primo 3/98 0925-12 Cash 5,180.00 5,180.00 5,180.00 BARRIOS, Ruel 5/22/08 2204 913403 CAT-Manila- May 24-27, 2008 800.00

7/7/08 2920 913544 CAT-Manila- July 8-11, 2008 2,640.00 2,640.00 7/7/08 2921 913545 CAT-Manila -July 8-11, 2008 -calibration fee 1,500.00 4,940.00 1,500.00 4,940.00

BASBAS, Ofero 1/9/08 93-1 Cash Manila, 1/9-13/2008 - To meet with Animation Consul 17,700.00 17,700.00 17,700.00 BATURIANO, Filemon 3/05 1404-29 Cash Manila, 3/9-12/04 14,726.20 14,726.20 14,726.20 BELLEZA , Rodrigo 11/00 1191 Cash 2,600.00 2,600.00 2,600.00 BENITO, Heriberto 4/17/07 1801-2 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 BENITO, Manuel 10/03 4532-02 Cash Legazpi City, 10/21/03 17,785.04 17,785.04 17,785.04 BERCASIO, D. c/o Rose Ciudadano 303 0968 Cash 2,592.00 2,592.00 2,592.00 BERGANCIA, Fe 2/03 0765-11 Cash Davao 7,000.00 7,000.00 7,000.00 BERIÑA, Lourdes 12/03 5418-17 Cash Quezon City, 12/03 2,316.00 2,316.00 2,316.00 BERMEJO,Alma S. 4/11/08 1535 26475326 Bacolod City- 6th National Convention & seminar, apr 2,000.00 2,000.00 2,000.00 BIEN, Noemi 8/04 3580-40 Cash Cebu City , 8/2-4/04 1,500.00 1,500.00 1,500.00 BINALLA, Florentino 4/16/08 1631 913260 Tagbilaran City-5th National Convention & Gen. Asse 8,930.00 8,930.00 8,930.00 BODLAO, M. 4/02 3235 Cebu City , 04/02 11,236.00 11,236.00 11,236.00 BOLIVAR, Emily 4/05 1309-8 Cash Iloilo City, 4/13-15/05 5,914.00 5,914.00 5,914.00 BONCODIN, Ernesto 4/11/08 1537 26475328 Bacolod City- 6th National Convention & seminar, ap 2,000.00 2,000.00 2,000.00 BONGALONTA, Jesus 8/8/07 3976-14 Cash To observe Best Practices in Tax Collection, Marikina 3,440.00 3,440.00 3,440.00

Provision of 97-002 not complied

ANALYSIS OF CASH ADVANCES

As of December 31, 2008

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

BONGAT, John G. 3/03 1105-13 Cash Cebu City P 12,316.00/ JEV# 3740-19,8/08-To take 49,156.49 49,156.49 49,156.49 BONGIAD, Conrado 7/04 3413-3 Cash Legazpi City, 7/19/04 400.00 400.00 400.00 BONGON,Eduardo 11/04 5013-11 Cash Manila, 11/24-26/04 P 940 4,080.00 4,080.00 4,080.00 BORDADO, Gabriel H.,Jr. 5/13/08 2013 913330 Manila- May 14-17, 2008/ JEV# 2327-47, 5/08- Liq. O 269.51

6/4/08 2351 913501 Manila-June 5-7, 2008/ JEV# 3353-9, 7/08-Liquid. Of 20.00 20.00 8/08 JEV#3740-2 To take up adj. to entry made on JEV# 3183 dtd 7/23/ (1.00)

9/30/08 4211 913777 CAT - Manila, 10/1-5/2008/Liq.=RC&DEP 4759, 11/3 828.00 1,116.51 828.00 1,116.51 BORIGAL, R. 2/98 9537-03 Cash 322.00 322.00 322.00 BORJA, Vito 6/21/07 3020-4 Cash To observe the implementation of Learning in Mongol 0.14 0.14 0.14 BOSCH, Merly V. 6/04 3102-16 Cash Davao & Tacloban, 6/25-7/4/04 3,000.00 3,000.00 3,000.00 BRAGAIS, Hon. Zenaida 8/7/07 3854-4 Cash Seminar Workshop for Executive & Vice-Executive Ju 800.00 800.00 800.00 BROJAN, Nelson 9/98 3940-06 Cash 2,880.00 2,880.00 2,880.00 BUENA, LILIA. 01/97 0415-15 Cash P 2,470.00 12,524.00 12,524.00 12,524.00 BUENA, Romeo 4/18/08 1412 26475264 Romeo T. Buena, Jr.- CAT- Manila- April 7-11, 2008 9,600.00 9,600.00 9,600.00 BUENDIA, Eserlina 12/08 5337 913930 Ederlina N. Buendia - CAT/Baguio City, 12/8-14/2008 8,558.00 8,558.00 8,558.00 CABANOS,Melbet 4/98 1849-11 Cash 3,720.00 3,720.00 3,720.00 CABRERA , Victor 02/98 0788-04 Cash Palawan 7,184.00 7,184.00 7,184.00 CACERES, Cristeta 7/04 3247-1 Cash Manila, 7/7-10/04 5,700.00 5,700.00 5,700.00 CALINGACION, Menandro For adjustment 268.50

12/11/08 5436 913940 Menandro U. Calingacion - CAT/Albay, 12/15-16/2008 1,528.00 1,796.50 1,528.00 1,796.50 CALLEJA, Delia N. 11/22/07 5466- Cash Buhi, 11/29/07 P 70.04 70.04 70.04 70.04 CALLOS, Judge Nelson 4/99 2031 Cash 6,312.00 6,312.00 6,312.00 CAMPILLOS, Rolando 3/06 1151-3 Cash Manila, 3/15-16/06 76.00

11/5/08 4798 27788793 Rolando SI. Campillos - CAT/ Batangas City, 11/7-8/2 6,120.00 6,196.00 6,120.00 6,196.00 CANO, Gina 3/04 1698-3 Cash Manila, 3/23-24/04 P 158.00 2,048.00 2,048.00 2,048.00 CAPIRAL, Joy 7/26/06 3260 718863 Joy Capiral- cash advance for travel to Manila-July 27 40,100.00 40,100.00 40,100.00 CARAMAT, Pura 10/17/07 4898-7 Cash To participate in Orgullo kan Bikol Regional Trade Fa 4,056.00 4,056.00 4,056.00 CARANDANG, Arthur 3/6/08 960 26474893 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,700.00 6,700.00 6,700.00 CARDAMO, Michelle 10/99 4198-01 Cash Manila 3,322.00 3,322.00 3,322.00 CARESOSA, Dr. Reynaldo 10/22/08 4643 27788664 15th Annual Conven. Emergy Medicine ( Phil. Society 10,005.36 10,005.36 10,005.36 CARPIO, Nila G. 3/6/08 975 26474905 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,500.00 6,500.00 6,500.00 CASARENO, Francia 5/29/08 2281 913465 Francia C. Casareno- CAT - Manila-June 2-6, 2008 6,940.00 6,940.00 6,940.00 CASTILLO, Emerlita 6/8/07 2794-17 Cash Perform Field Training Exercises (Bgy.Sn. Felipe), Ba 3,000.00 3,000.00 3,000.00 CASTILLO, Fely 4/05 1309-5 Cash Iloilo City, 4/13-15/05 5,914.00 5,914.00 5,914.00 CASTILLO,Emenie 11/97 4650-03 Cash Manila P 322.00 1,772.00 1,772.00 1,772.00 CHAVEZ, Gladys 4/11/08 1539 26475330 Bacolod City- 6th National Convention & seminar, ap 2,000.00 2,000.00 2,000.00 CLAVERIA, Monina 05/03 2148-06 Cash 1,532.00 1,532.00 1,532.00 CLEDERA, Herman 3/04 1680-31 Cash Pili, Camarines Sur, P 3,160.00 3,260.00 3,260.00 3,260.00 CLEDERA,Angelina 3/6/08 2397-01 Cash 312.00 312.00 312.00 COMOTA, Vicente 8/04 3580-37 Cash Cebu, 8/2-4/04 1,500.00 1,500.00 1,500.00 CONTRERAS, Jaime 10/03 4572-15 Cash Manila, 10/24/03 9,871.00 9,871.00 9,871.00 CORAS, R. 11/00 5132 Legazpi City 582.00 582.00 582.00

ANALYSIS OF CASH ADVANCES

As of December 31, 2008Provision of 97-002 not complied

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

CORTEZ, WilliamJR. 5/04 2668-6 Cash Manila, 5/1/04 P 3,400.00 13,050.00 13,050.00 13,050.00 DASCO, Glenda 4/18/08 1413 26475265 Glenda Dasco- CAT- Manila- April 7-11, 2008 11,600.00 11,600.00 11,600.00 DE ASIS, Cecilia 6/15/07 2968-4 Cash Observation Visit on Children's Welfare & Best Innova 176.71 176.71 176.71 DE CASTRO, Atty. Paz 04/01 1860 Cash 3,160.00 3,160.00 3,160.00 DE GUZMAN, Arlene 7/6/07 3397-8 Cash Joint Confer. of Provincial & City Treas. Focal Person 800.00

8//07 For adjustment - 700.00 1,500.00 700.00 1,500.00 DE GUZMAN, George 12/96 1152-07 Cash P 10,121.50 14,651.50 14,651.50 14,651.50 DE LA CRUZ, Romeo 4/17/07 1801-9 Cash 114th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 DE LA VEGA, Rodolfo 8/98 3301-4 Cash 5,292.08 5,292.08 5,292.08 DE LOS REYES, Nenebeth 2/26/07 987-20 Cash Trans. urine specimen, filing applic. For accredt'n & li 4,730.00

12/3/08 5327-64 Nenebeth delos Reyes - CAT- Manila - 12/2/08 - follow 8,760.00 13,490.00 8,760.00 13,490.00 DE LOS SANTOS, Prospero 4/03 1567-04 Cash Manila 1,000.00 1,000.00 1,000.00 DEL CASTILLO, Ma.Consuelo 3/6/07 1106- Cash Registration Fee- Training Workshop on Budget Exec 1,500.00 1,500.00 1,500.00 DEL CASTILLO, Salvador 3/19/08 1311 26475183 Mla.- 3/ 28-30, 2008-7th PCL Nat'l. Congress/ Php 18 1,280.00

4/15/08 1576 913246 Masbate City - 3rd Board Meetg.& 2nd Reg'l. Cong. ,4 30.00 1,310.00 30.00 1,310.00 DEL ROSARIO, Joselito 02/99 447-4 Cash 2,942.00

4/13/05 1327-10 Cash Manila, 4/11-14/05 2,940.00 2,940.00 8/2/07 3820-18 Cash 9th Foundation Anniv. Of PRIMO, Manila, 7/20-22/07 580.00 580.00 4/4/08 1422 913192 Joselito del Rosario-CAT- Zamboanga-April 6-10, 200 15,084.00 15,084.00 10/2/08 4260 27788363 Salvador Del Castillo - CAT/Manila - Bacolod , 10/9-1 6,661.00 28,207.00 6,661.00 28,207.00

DEL ROSARIO,Angela 5/98 1993-12 Cash 4,970.00 4,970.00 4,970.00 DEL VILLAR, Jesus 11/22/07 5457 24797728 Cash advance for travel to Quezon City-Nov. 25-28,2 4,730.00 4,730.00 4,730.00 DELOVIERES,J.SPO2 02/98 791-4 Cash 720.00 720.00 720.00 DEOCAREZA , Francisco 11/9/04 4887 Cagayan de Oro, 11/24-27/04 200.00 200.00 200.00 DESTURA, Francisco 2/24/04 1016-9 Cash Manila & Silang, Cavite, 2/24-27/04 2,178.00 2,178.00 2,178.00 DIZON, Daisy (OCC-RTC) 3/17/08 1195 26475090 Nat'l. Conven. & Sem.of Social Workers, Baluarte, Vig 7,000.00 7,000.00 7,000.00 DOLLENTAS, Ester S. 11/16/05 3670-3 Cash F/A Delegates to the 4th National STEP Competition 20,000.00 20,000.00 20,000.00 DOLOR, Gregorio 11/10/08 4887 913856 Gregorio I. Dolor - CAT/Pili, CS - 11/11-14/2008 750.00 750.00 750.00 DOMAGSANG, F. 10/02 3831 4,800.00 4,800.00 4,800.00 EBIO, Senen Jr. 8/09 3198-24 Cash Lucena City 900.00 900.00 900.00 EDUARDO, Rodolfo 11/03 4953-3 Cash Manila 9,390.50 9,390.50 9,390.50 ELANO, Lorenzo 11/24/04 5013-10 Cash Manila, 11/24-26/04 3,740.00 3,740.00 3,740.00 ELCAMEL, Ernesto 10/97 4125-15 Cash Manila 28,651.32 28,651.32 28,651.32 ELCAMEL, Noel 8/26/05 2918-3 Cash To get CPU from National Library, Manila, 8/26/05 2,100.00 2,100.00 2,100.00 ELLA, Elmer 8/8/07 3976-15 Cash To observe Best Practices in Tax Collection, Marikina 3,440.00 3,440.00 3,440.00 ENOJOSA, Randy 11/9/05 3622-12 Cash To get Annual Allocation of Materials from the Americ 3,100.00 3,100.00 3,100.00 EVA, Ma. Theresa E. 11/9/05 3595-9 Cash 30th Annual Convention & Induction Ceremony of Ph 30.00 30.00 30.00 ESTRELLA, Alvin 12/24/06 701-10 Cash 60th National Students Basketball Chamionship & BA 2,880.00 2,880.00 2,880.00 FELICITAS Radaic c/o Dr.A.Saberon 10/05 4396 F/A Round-trip travel allowance, 2nd Bicol Workshop 4,106.00 4,106.00 4,106.00 FELIZMENIO, Francisco 01/01 163 10,001.00 10,001.00 10,001.00 FERNANDEZ , Lorna 6/25/2004 3102-21 Cash Davao & Tacloban, 6/25-7/4/04 3,000.00 3,000.00 3,000.00 FERNANDO, Alan 3/7/2008 985 26474915 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,500.00 6,500.00 6,500.00

ANALYSIS OF CASH ADVANCES

As of December 31, 2008Provision of 97-002 not complied

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

FERNIZ, Geroben 5/02 3454 Cash Legazpi City 384.00 384.00 384.00 FLORA Halili 8/04 3580-41 Cash Cebu City, 8/2-4/04 1,500.00 1,500.00 1,500.00 FLORENDO,Ramon 2/99 0418-78 Cash 219.00

1/30/08 382-15 Cash CA for Petty Cash-Expenses in BSTC Office (For adju 5,000.00 5,219.00 5,000.00 5,219.00 FRANCIA, Obette 3/6/08 977 26474907 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,500.00 6,500.00 6,500.00 FRANCISCO, Noel 8/10/07 3904-16 Cash Conf.& workshop on the Convent'n. on the Rights o 1,727.50 1,727.50 1,727.50 GERONA, Elnora 8/04 3580-37 Cash Cebu City, 8/2-4/04 1,500.00 1,500.00 1,500.00 GO, Ederlie 6/8/07 2794-16 Cash Field Training Exercises (Bgy. Lerma), Batangas City, 3,000.00 3,000.00 3,000.00 GONZALES, Angel O. 12/04 5123-6 Cash Legazpi City, 12/3/04 8,123.00 8,123.00 8,123.00 GREGORIO, Ma. Eva 10/2/08 4242 27788347 Maria Eva C. Gregorio - CAT/Manila, 10/4-10/08/ JEV 1,420.00

10/31/08 4756 27788759 Maria Eva C. Gregorio - CAT / Manila 260.00 1,680.00 260.00 1,680.00 GUERIÑA,Antonio Jr. 3/7/08 984 26474914 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,500.00 6,500.00 6,500.00 GUTIERREZ, Alfredo 6/03 3643-25 Cash Legazpi City 522.00 522.00 522.00 HALILI, Flor 8/2006 3806-3 Cash To attend Presentation of the Public Governance & S 1,920.00 1,920.00 1,920.00 IMPERIAL, Rodolfo 12/03 5420-3 Cash 309.72 309.72 309.72 INOPIA, Estrella O. 6/04 3102-22 Cash Davao & Tacloban, 6/25-7/4/04 3,000.00 3,000.00 3,000.00 INTIA, Hermie Jesus 11/04 4973-9 Cash Naga City, 11/16-17/04 3,140.00 3,140.00 3,140.00 JACOB, Ma. Christine 11/97 4541-4 Cash P 4,440.00 7,600.00 7,600.00 7,600.00 JACOB,James 2/97 0547-01 P 1,100.00 78,424.25 78,424.25 78,424.25 JAMITO, Melissa 10/6/05 3365-12 For adjustment 1,030.00 1,030.00 1,030.00 LABRADOR, Arnel et al 4/15/08 1577 913247 Masbate City - To work as support staff during the 3rd 13,600.00 13,600.00 13,600.00 LATUMBO, Aida 3/17/08 1198 26475093 Nat'l. Conven. & Sem.of Social Workers, Baluarte, Vig 7,000.00 7,000.00 7,000.00 LAVADIA, Elizabeth 8/9/07 3899-3 Cash Manila, 8/8-13/07 Php 6,620.00-6,616.00=4 /JEV 34,575.60

1/31/08 417 26474504 CAT- Manila/Cagayan-Feb. 2-7,2008 13,336.00 47,911.60 13,336.00 47,911.60 LAVADIA, Julian Jr. 10/2006 4688-6 Cash Manila & Boracay, Aklan, 10/20-24/2006 8,886.00 8,886.00 8,886.00 LEE,Nida 7/30/04 3580-38 Cash Cebu City , 8/2-4/04 1,500.00 1,500.00 1,500.00 LEGACION, Nelson 11/6-7/04 4887-1 Cash Manila P 100.00 100.00

11/05 2467-28 Cash To file case at ourt of Appeals Mariano vs. Naga City, 8,347.00 8,347.00 4/4/08 1420 913190 Zamboanga-April 6-10, 2008 P 15,084.00-12,134.0 2,950.00 11,397.00 2,950.00 11,397.00

LEONARDO, Lydio 6/05 3077-7 Cash Manila, 6/24-30/04 1,766.00 1,766.00 1,766.00 LICMOAN, Rommel 4/17/07 1801-8 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 LLANTERO, Melchor 6/8/06 2545-9 Cash Submit sample enzyme for lab. testing , learn how to 2,865.00 2,865.00 2,865.00 LLAVANES, Viswanathan V. 7/27/06 3263-9 Cash To attend the 3 days Regional Traning of School Pap 2,800.00 2,800.00 2,800.00 LOMEDA, Roseller P. 5/13/05 1701-1 Cash Manila, 5/11-14/05 402.00 402.00 402.00 LUMBERIO, Gil 2/2006 464-4 Cash To attend the launching of the Phil. Sports Institute & 3,000.00 3,000.00 3,000.00 LUNTOK, E. 11/99 4439-24 Cash 1,500.00 1,500.00 1,500.00 MAGISTRADO, Cesar 4/15/2008 1611-7 Cash Sta.Rosa City, 4/16-19/08 -To secure computer instal 7,480.00 7,480.00 7,480.00 MALANYAON, J. 03/97 1250 Cash 500.00 500.00 500.00 MALENIZA, Pablo 11/10/08 4888 913857 Pablo Maleniza - CAT/Pili, CS - 11/11-14/2008 750.00 750.00 750.00 MANALO, Evangeline 10/97 4026-09 Cash Cebu City P 3,820.25 6,731.70

10/31/08 4757 27788760 Evangeline S. Manalo - CAT / Manila/ JEV# 5698-16, 591.00 7,322.70 591.00 7,322.70 MANCERA Randy 10/5/07 4732-8 Cash Official business, Manila, 10/1/07 580.00

As of December 31, 2008Provision of 97-002 not complied

ANALYSIS OF CASH ADVANCES

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

10/10/08 4373 913794 Randy mancera - CAT/Manila , 10/12-17/2008 4,160.00 4,740.00 4,160.00 4,740.00 MAÑO, Anselmo 3/25/08 1315-8 Cash Legazpi City, 3/26/08- To attend the PhilGEPS Trainin (11.75)

11/25/08 5158 27789040 Anselmo B. Maño - CAT/Manila, 11/25-27/2008 2,060.00 2,048.25 2,048.25 MANZANO, Cyril 3/6/08 976 26474906 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,500.00 6,500.00 6,500.00 MARAÑO, Margie (OCC-RTC) 3/17/08 1196 26475091 Nat'l. Conven. & Sem.of Social Workers, Baluarte, Vig 7,000.00 7,000.00 7,000.00 MARAÑO, Wilfredo 9/29/08 4201 27788317 Wilfredo Maraño - cash advance for registration of pe 3,385.00 3,385.00 3,385.00 MARTIN, Joel 11/04 5013-13 Cash Bangkok, Thailand 11/19-24/04/RC & DEP 2338, 6/3/ 7,996.80 MARTINEZ, Amelia 3/99 1479-03 Cash P 9,100.00 9,100.00

8/99 3024-01 Cash 1,450.00 1,450.00 1,450.00 02/00 930 2,050.00, Quezon City 2,050.00 12,600.00 2,050.00 12,600.00

MARTINEZ, Gimena 3/17/08 1197 26475092 Nat'l. Conven. & Sem.of Social Workers, Baluarte, Vig 7,000.00 7,000.00 7,000.00 MENDOZA, Francisco 6/01 2427 P 1,565.00 11,414.00 11,414.00 11,414.00 MERCADO, Jose Mari 8/18/04 3875-21 Cash Manila, 8/18-21/04 8,986.00 8,986.00 8,986.00 MORANO, Evangeline 7/05 3524-11 Cash Legazpi City, 7/27/2005 220.00 220.00 220.00 MOTOS, Nicolas 2/24/06 701-1 Cash To attend the UN Habitat Conference Canvas I-serve 6,090.00

7/4/08 123 913534 Nicolas C. Motos, Jr.- CAT-Manila- July 3-6, 2008 19,700.00 25,790.00 19,700.00 25,790.00 MURILLO, Honesto 6/01 3013 1,230.00 1,230.00 1,230.00 NACOR, Antonette Majella 3/6/08 965 26474895 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,700.00 6,700.00 6,700.00 NATIVIDAD, Joey 6/05 2089 To attend the Seminar Workshop on Exploring Health 1,500.00 1,500.00 1,500.00 NATOR, Romeo 5/03 7148-04 Cash Tagaytay City 1,532.00 1,532.00 1,532.00 NAVARRETE, Mercy 10/05 3440-5 Cash To observe & acquire firethand info. pertaining to E-N 11.66 11.66 11.66 NAVARRO, Francis Xavier 8/05 3356-12 Cash P 1,920.00 3,940.00 3,940.00 3,940.00 NOGRA, Joseph 1/03/07 360-4 Cash Training on ICT Project Management, Manila, 1/24-26 4,440.00 4,440.00 4,440.00 OJEDA,Yolanda 07/97 2887-01 Cash 1,812.00 1,812.00 1,812.00 OLIVER, Ruel 8/05 2816-2 Cash To attend meeting on Land Bank Real Estate, Manila 25,609.00 25,609.00 25,609.00 OLVINA, Odilon 11/98 3408-12 Cash Manila, 11/98 3,600.00 3,600.00 3,600.00 OROZCO , Oscar 01/00 359 Butuan City, 41,922.50 41,922.50 41,922.50 ORQUITA,Olivia E. 4/11/05 1309-4 Cash Iloilo City, 4/13-15/05 5,914.00 5,914.00 5,914.00 PAAÑO, Benji 3/15/06 1147-5 Cash To get & receive the official receipt & office supplies o 800.00 800.00 800.00 PABILANDO, Teodoro 5/04 2646-15 Cash Manila, 5/18-29/04 6,882.00 6,882.00 6,882.00 PADRE, Benjamin Jr. 12/03 5339-28 Cash Manila 2,902.62 2,902.62 2,902.62 PAJARILLO, Sherryl Ann 12/16/08 5471 91344 CAT/Legaspi City, 12/17/08 320.00 320.00 320.00 PALACAY,Jessica 4/98 1762-01 Cash 3,500.00 3,500.00 3,500.00 PALMIANO, Leon 9/28/07 4633-4 Cash CMEAP Natioal Convention, Pili, Cam. Sur, 9/28/07 600.00

12/10/08 5416-5 Cash Leon B. Palmiano - CAT - Manila - 12/11-13/08 - to pu 3,120.00 3,720.00 3,120.00 3,720.00 PANDAY, Augustine 4/17/07 1801-12 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 PANOLLO, Honorio Jr. 22,860.00 22,860.00 22,860.00 PAPA, Pelagio Jr.(Br.3,MTCC) 4/17/07 1801-4 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 PARONE, Othello(Br.3,MTCC) 4/19/07 1863-20 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 PASCUAL, Lilian 6/8/07 2794-21 Cash Submitted official entry of the NC POC (2nd for Best P 75.00 75.00 75.00 PASIS, Remedios 4/98 1484-09 3,720.00 3,720.00 3,720.00

Provision of 97-002 not complied

ANALYSIS OF CASH ADVANCES

As of December 31, 2008

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

PEÑAFLOR, Francisco 2/04 1016-7 Cash Manila & Silang, Cavite, 2/24-27/04 6,328.00 6,328.00 6,328.00 PEÑAFLOR, Lydia 4/17/07 1882-14 Cash To transact official matters relative to the purchase of 3,100.00 3,100.00 3,100.00 PERALTA, Jovanie 2/01 0525 Cash Manila 10,392.00 10,392.00 10,392.00 PEREZ, Jose 4/21/01 1417-11 Cash Manila, 4/18-20/05 3,100.00

4/4/08 1421 913191 Jose b. Perez- CAT- Zamboanga-April 6-10, 2008 15,084.00 18,184.00 15,084.00 18,184.00 PEREZ, Ruel 12/11/08 5437 913941 Ruel Perez - CAT/Albay, 12/15-16/2008 1,528.00 1,528.00 1,528.00 PRESENTACION, Pablito 08/97 3318-05 Cash P0.02 1,200.02 1,200.02 1,200.02 PRILLES, Wilfredo 8/30/2006 3806-4 Cash To attend the Presentation of the Public Governance 1,920.00 1,920.00 1,920.00 PUECO, A. 02/98 0791-03 Cash 720.00 720.00 720.00 PUNO, Lumen 2/8/07 593-3 Cash Meeting with DOST Undersecretary, Legazpi City, 2/8 1,280.00 1,280.00 1,280.00 QUEBEDO, James Andrew. c/o J. Cuyo 01/03 0256 P 1,200.00 1,000.00 1,000.00 1,000.00 RAMORES, M. 02/98 0466-05 P 1,800.00 1,800.00 1,800.00 1,800.00 RANARA, Ramon 2/24/06 701-4 Cash To attend the Capability Building Program for LCES, S 2,100.00 2,100.00 2,100.00 RASCO, Gerardo 3/10/08 998-23 Cash Manila,3/5-7/08- To follow up the release of MB 10 1,877.50 1,877.50 1,877.50 RAYMUNDO, M. III 05/97 1809 1,362.00 1,362.00 1,362.00 REFORSADO, Roderick 6/28/06 2856-4 Cash Legazpi City 56.50

4/14/08 1560 913239 Manila- April 16-19, 2008/ JEV# 2327-45, 5/08- Liq. 70.00 126.50 126.50 REGALADO, Achilles Andrew 4/19/07 1883-1 Cash To attend the 14th national Convention Seminar Work 5,900.00 5,900.00 5,900.00 REGIDOR, Yolanda 9/01 3692 383.00 383.00 383.00 REGMALOS, Yelanie 08/99 3173-10 Cash Lucena City P 2,400.00 28,652.00 28,652.00 28,652.00 RENTOY, Tomas VII G. 12/17/07 5785 24797893 Manila- Dec. `8-20, 2007 6,000.00 6,000.00 6,000.00 RENTOY,FO2 Tomas 10/04 4253 Peñafrancia Fiesta, BFP 14,280.00 14,280.00 14,280.00 RENTOY,Minda 09/97 3901-17 1,400.00 1,400.00 1,400.00 REONDANGA, Allen 10/8/08 4308 913791 Allen L. Reondanga - CAT/ Japan - 10/09-30/2008 7,470.00 7,470.00 7,470.00 REY, Ma. Esperanza 6/04 3107-17 Cash Davao & Tacloban, 6/25-7/4/04 1,365.00 1,365.00 1,365.00 REY, Teresita 2/8/06 418-12 Cash Training Workshop on Environmental Scanning, Cebu 26,344.00 26,344.00 26,344.00 REYES, Arnel,Sr. 2/7/07 570-13 Cash To drive for VM Bordado, Manila, 2/6-8/07 18,882.07 18,882.07 18,882.07 RICO, John Michael 6/15/07 2945-9 Cash to conduct observation visit on Children Welfare an 692.00 692.00 692.00 ROBLEDO, Lorence 4/20/07 1912-5 Cash National Convention of Process Servers Assoc., Lega 2,840.00 2,840.00 2,840.00 RODRIGUEZ, Myra For adjustment - 575.00 575.00 575.00 ROMANILLOS,Lizabel 4/98 1762-08 3,500.00 3,500.00 3,500.00 ROSALES, Agapito 4/19/07 1885-4 Cash NPNP Convention Seminar, Boracay, Aklan 4/11-13/0 16,940.00 16,940.00 16,940.00 ROSALES, Atty. Fiel 02/97 0505-34 36,694.50 36,694.50 36,694.50 ROSANA, Gloria 11/03 4878-05 Manila 123.00 123.00 123.00 ROSIN, Cesar Bob 4/20/04 2123-4 9,297.00

11/26/08 5201 27789071 Cesar Bob M. Rosin Jr. - CAT/ Manila, 11/26-30/2008 19,848.00 29,145.00 19,848.00 29,145.00 ROSIN, Rodel 04/02 2918 Baguio City, 2,191.08 2,191.08 2,191.08 RUBIO, Arnel Jose 4/19/07 1883-19 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 SADIA, Crispin 4/19/07 1883-23 Cash 14th National Convention Seminar Workshop, Iloilo C 10,900.00 10,900.00 10,900.00 SAEZ, Mansueto 11/15/05 3653-8 Cash Continuing Legal Education Seminar, Manila, 11/17-2 7,500.00

2/21/08 784 26474756 Registration fee, Regent Hotel, 2/ -MCLE Seminar, 2 500.00 500.00

ANALYSIS OF CASH ADVANCES

As of December 31, 2008Provision of 97-002 not complied

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

SALAPARE,JP 10/98 4347-05 1,300.00 1,300.00 1,300.00 SALCEDO, Nestor 4/26/07 2092-13 Cash Convention Seminar of Process Servers Assoc. of the 3,140.00 3,140.00 3,140.00 SALOMON, Numeriano 10/5/04 4480- Cash Manila, 9/12-14/04 5,800.00 5,800.00 5,800.00 SALVADOR, Joseph 4/15/08 1573 913243 Joseph Salvador.- CAT- Manila- April 16-19, 2008 5,560.00 5,560.00 5,560.00 SAMBO, Felicito 05/97 1809 5,408.00 5,408.00 5,408.00 SAN AGUSTIN, Marietta 7/19/06 3121-12 Cash To attend the C-Team Conference & Vice-Presidens 3,493.00 3,493.00 3,493.00 SAN ANTONIO, Zeus Angelo 10/7/04 4502-32 Cash Manila, 10/3-7/0004 /JEV# 592,2/08 20,606.01 20,606.01 20,606.01 SAN BUENAVENTURA , Rhea 4/06 2075-2 Cash Legazpi City, 4/1-5/1/04 4,080.00 4,080.00 4,080.00 SAN JOSE, Muriel 04/01 1672 Cash 6,071.00 6,071.00 6,071.00 SAN JUAN,R. 03/98 0970-11 Cash 1,000.00 1,000.00 1,000.00 SAN PABLO,Jose 06/99 2248-10 Cash 1,200.00 1,200.00 1,200.00 SANARES, Ronnie 3/26/06 1775-12 Cash Registration Fee , 3/26-27/06 1,080.00 1,080.00 1,080.00 SANTONIA, Remedios S. 3/7/08 979 26474909 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,500.00 6,500.00 6,500.00 SAULON, Emily 11/05 3559 18928677 To submit project proposal of the delegation to the Eu 10,740.00 10,740.00 10,740.00 SEBASTIAN, Eric 4/11/08 1546 26475337 F/A-CAT- Palarong Pambansa Puerto Princesa-Eric 1,157.00 1,157.00 1,157.00 SEÑAR, G. 08/99 3348-20 Cash Manila 7,000.00 7,000.00 7,000.00 SEPTIMO, Elmer 06/99 2809-33 Cash Legazpi City 284.00 284.00 284.00 SERGIO, D.C. Nathan 11/00 5253 P 3,074.00 (JEV# 5404 / 12/1-15/08 Payroll-Liq. Of 1,845.70 1,845.70 1,845.70 SERVIDAD, Daniel 09/97 3893 P 2,524.5 3,687.58 3,687.58 3,687.58 SORIANO, Joveliza.-Associate Prosecution Atty II 8/24/06 3717 18th Nat'l. Conven. & 9th Annual Nat'l. Election of the 19,180.00

3/5/2008 959 26474892 Manila Hotel, 20th NPLP Convention/Seminar & the 1 6,700.00 25,880.00 6,700.00 25,880.00 SUMAYAO, Edwin 4/11/06 1622-24 Cash To get book allocation from the National Library, Man 8,060.00 8,060.00 8,060.00 TURIANO, Xytuz 03/98 0925-14 Cash 5,180.00 5,180.00 5,180.00 VALENCIANO, Donn R. 4/17/07 1801-7 Cash 14th National Convention Seminar Workshop, Iloilo C 5,900.00 5,900.00 5,900.00 VARGAS, Irma 10/03 4345-15 Cash Manila P 1,250.00 1,497.00

1/31/08 400-22 Cash Muntinlupa City, 1/30-2/3/08 - To rescue minors & file 3,300.00 3,300.00 10/10/08 4372 913793 Irma SA. Vargas - CAT/ Manila, 10/12-16/2008 9,035.00 13,832.00 9,035.00 13,832.00

VARGAS, Jayson 2/10/05 491-9 Cash Quezon City, 2/9-12/05 P 1,200 1,900.00 1,900.00 1,900.00 Various Off. & Employees 117,233.41 117,233.41 117,233.41 VELASCO, Francisco 07/97 2770-22 Cash P 1,700.00 4,982.00 4,982.00 4,982.00 VELASCO, JM. 04/02 2631 10,000.00 10,000.00 10,000.00 VELASCO, Rosa Imelda 10/17/05 3324-7 Cash 31st Phil.Business Conference, Manila, 10/9-14/05, M 2,838.45 2,838.45 2,838.45 VERDADERO, Domingo 04/01 1857 3,160.00 3,160.00 3,160.00 VERDADERO, Virgilio 11/97 4336-06 P 200.00 13,342.00 13,342.00 13,342.00 VERDEJO, R. 02/99 0447 Cebu 5,000.00 5,000.00 5,000.00 VIBAL, Cristina et al 4/20/07 1913-30 Cash Registration Fee - Enhancement Course on Leave Ad 3,600.00 3,600.00 3,600.00 VILLACRUZ, Erwin 3/2006 Cash P 560.00 720.00 720.00 720.00 VILLAFLOR, Victor 12/13/05 4004-1 Cash Mandatory Procurements Workshop to be conducted 3,000.00 3,000.00 3,000.00 VILLANEA, Nestor 10/7/08 4284 913786 Nestor Villanea - CAT / transportation expenses for m 26,000.00 26,000.00 26,000.00 VILLAR, Rodolfo 8/22/08 3739-13 To service off. Gov't. vehicle plate# XPW 339 to Mani 1,200.00 1,200.00 1,200.00 VILLARE, J. 08/99 3178-28 110.55 110.55 110.55 VILLAVER, Fidelia 3/7/08 987 26474917 Manila-Validation session on the draft Legal Procedu 100.00 100.00 100.00

ANALYSIS OF CASH ADVANCES

As of December 31, 2008Provision of 97-002 not complied

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

VINLUAN, Federico 1/2008 JEV# 0095 Liq. of C/A-To take up payment thru ATM of 1/1-15/20 4,721.10 4,721.10 4,721.10 ZANTUA, Domingo 11/21/06 4942-2 Cash To attend Trade Fair, Manila, 11/25-12/1/2006 640.00 640.00 640.00

TOTAL 2,018,453.82 184,469.00 2,018,364.62

Due from Officers & Employees - Account 123SPECIAL EDUCATION FUND

Alano de Veterbo 3/13/2006 146-1 Cash travel to Mla. 5,460.00 5,460.00 5,460.00 Bob Rosin 11/13/2006 743-3 Cash travel to Pasig City 11,400.00 11,400.00 11,400.00 Cecilia Ledesma 11/8-12/08 4,158.00 4,158.00 4,158.00 Daniel Casanes 6,200.00 6,200.00 6,200.00 Eduardo Laureles 11/25/2008 716 890073 Dist. Competition 612.00 612.00 612.00 Eleanor Peña 5/20/2008 overpymt of salary 0.06 0.06 0.06 Evangeline Morano to inspect meals during the palarong Bikol '05 180.00 180.00 180.00 Johanna Sanchez w/ CA in GF 200.00 200.00 200.00 Joselito del Rosario 5/20/2008 339 889822 BSP Annual Council Meeting at Tagaytay 5/21-23 7,440.00 7,440.00 7,440.00 Josie Cortes 3/13/2008 183 cash salary differential for refund 469.50

3/19/2008 191-6 Cash salary for refund 3/1-15/08 5,469.50 5,939.00 5,939.00 Jovert Frondoso 2/29/2008 146-3 Cash excess of salary claimed 413.59 413.59 413.59 Ma. Nena Parato beyond 2006 900.00 900.00 900.00 Mariano de Guzman 10/15/2008 636 890017 balance of CA for the STEP Skills Comp. 98.69 98.69 98.69 Marieta Pelagio 2,506.98 2,506.98 2,506.98 Nilda Noleal 12/5/2006 797-22 Cash 2006 Regl competition 8,720.00 8,720.00 8,720.00

Otilla Sierra 11/27-29/08 Legazpi City 25,000.00 25,000.00 25,000.00 Randy Maullion 11/13/2007 785 889466 To Koronadal City, S. Cotabato 63,200.00 63,200.00 63,200.00 Raquel Luzande 8,000.00 8,000.00 8,000.00 Rowena Tabilog 9/9/2008 562 889969 Travel to Albay 9/9-11 3,000.00 3,000.00 3,000.00 Salvacion Selga 10/10/2008 630 890013 2008 Regl Elem & Sec Schools Press Con, Albay 195,100.00

10/16/2008 639 890019 add'l CA for the '08 Regl Elem & Sec Press Con 15,600.00 210,700.00 210,700.00 TOTAL 364,128.32 - 364,128.32

TRUST FUND

Purificacion Rito Aug. 22,01 410 1,500.00 1,500.00 1,500.00 Reuel M. Oliver 6//29/07 bal of various CA -unliquidated 800.00 800.00 800.00 Francisco Mendoza April 30/04 584-76 1,431.00 1,431.00 1,431.00 Luzviminda Era 5/19/2005 888 58.00 58.00 58.00 Florencio T. Mongoso 3/28/07 271 Travel to Manila 26,408.00 26,408.00 26,408.00 Huberto I. Ursua 11/6/08 1,690.00 1,690.00 1,690.00 Evangeline Fuentes 5/19/05 4,558.00 4,558.00 4,558.00 Alex M. Cayetano 8/08 19,976.24 19,976.24 19,976.24 Mila SD. Raquid Arroyo 12/13/04 950.00 950.00 950.00 Arvin Willy Fajardo 10/8/03 1,284.00 1,284.00 1,284.00 Wilfredo Prilles, Jr. 11/12/08 5,360.00 5,360.00 5,360.00 Melissa Sieglinde B. Bulaong 9/26/08 905 Travel to Mla. 9/30, 10/1-6/08-Gayon Bikol 94,400.00

As of December 31, 2008Provision of 97-002 not complied

ANALYSIS OF CASH ADVANCES

City of Naga

Purpose of Balances as Date Granted Voucher # Check# Cash Advance Amount of 12/31/08 4.1.2 5.1

Rodolfo de la Vega 8/20/04 1528-1 travel to Mla 8/9-22/04 900.00 900.00 900.00 Neil Bryan Ballaran 8/20/04 1528 Tagaytay 5,900.00

10/5/04 1853-1 Manila- 10/5-7/04 6,000.00 2088 Manila- 11/14-15/04 4,500.00 4,500.00 1051 Manila- 6/21/05 6,000.00 6,000.00 1224 Manila- 7/18-21/05 5,000.00 27,400.00 5,000.00 15,500.00

Ernesto T. Elcamel 10/8/2004 1882 travel to Mla 8,790.00 8,790.00 8,790.00

Ramon Obusan, et al. 9/16/2004 597round trip tkets to the invited member of the board of judges, voyadores fest. 28,697.00 28,697.00 28,697.00

Sheila P. Condeno 3/29/2005 391 Balance from 26,073.00 CA exps for Nat'l.Network 644.00 4/11/2006 427 travel to Cebu 13,522.00 14,166.00 13,522.00 13,522.00

Rosa Imelda Velasco 2008 1,300.00 3/17/2006 travel to Mla 28,306.00 29,606.00 29,606.00

Rolando SI. Campillos 7/15/2005 1148 travel to Mla 2,070.00 2,070.00 2,070.00 Maria Cecilia Agravante 5/19/2005 888-5 travel to Los Baños 4,558.00 4,558.00 4,558.00 Gerald Alan Peñaflor 2/8/2008 125-1 travel to Silang, Cavite 2,720.00 2,720.00 2,720.00 Evangeline Palencia 2/8/2008 125 travel to Silang, Cavite 3,800.00 3,800.00 3,800.00 Paulita Hallig 1/24/2006 0.50 0.50 0.50 Renato A. Abardo 11/16/2004 25.63 25.63 25.63 Lynn Prilles 3/18/2008 260 bal of CA-to attend 2nd DepEd conf on mathematics 1,280.00 1,280.00 1,280.00 Evangeline Chavez 3/18/2008 261 to attend 2nd DepEd Natl Conf on Mathematics 8,220.00 8,220.00 8,220.00 Ramon R. Albeus 10/22/2008 1032 to attend LAMP2-ISF consultation workshop 3,940.00 3,940.00 3,940.00 Jesus Bongalonta 4/4/2008 304 Field tour, Manila 10,320.00 10,320.00 10,320.00

TOTAL 210,508.37 29,022.00 197,969.47 GRAND TOTAL 991,275.38 5,009,533.94

Legend: 4.1.2 No additional cash advance shall be given unless previous cash advance has been settled 5.1 The AO shall liquidate his cash advances within the required period.

Prepared by: Reviewed by:

Provision of 97-002 not complied

ANALYSIS OF CASH ADVANCES

As of December 31, 2008

ANNEX 3

PROPOSED ADJUSTING JOURNAL ENTRIES IN THE AGENCY BOOKS

1. Cash – Disbursing Officers (Account Code 103) P 0.10 Prior Years’ Adjustments (Account Code 684) P 0.10 To adjust the over-liquidation of cash advance recorded per CB# 2959 dated July 5, 2006.

2. Prior Years’ Adjustments P1,000.00 Cash – Disbursing Officers P1,000.00

To take up the unrecorded liquidation of cash advance on October 30, 2007 per supporting papers for the reimbursement of telephone expenses-mobile of Mr. Ramon Florendo per CB# 5122-13. Prepared by: JOHANSON V. DISUANCO State Auditor IV Audit Team Leader

List of Inventories for CY 2008 without Report on the Physical Count of Inventories ANNEX 4City of Naga

Office Supplies Inventory 156 Php1,022,263.79 Php1,022,263.79 - Accountable Forms Inventory 156 259,848.80 259,848.80 - Drugs and Medicines Inventory 159 808,177.90 808,177.90 - Medical, Dental and Laboratory Supplies Inventory 160 165,967.00 165,967.00 - Agricultural Supplies Inventory 162 30,780.40 30,780.40 - Other Supplies Inventory 165 504,037.45 504,037.45 - Construction Materials Inventory 168 198,833.04 198,833.04 Other Agricultural, Fishery and Forestry Products Inventory 176 89,400.00 89,400.00 -

TOTAL Php3,079,308.38 3,079,308.38Php -

Special Edu. Fund Account Title Account

Code CONSOLIDATED GEN. FUND

List of Property, Plant and Equipment for CY 2008 without Report on Physical Count of Property, Plant and Equipment ANNEX 5City of Naga

Book Value Cost Accumulated Depreciation Book Value Cost Accumulated Depreciation

Land Improvements 385,766,596.75Php 383,025,634.43Php 387,125,319.14Php 4,099,684.71Php 2,740,962.32Php 5,558,497.64Php 2,817,535.32Php Electrification, Power and Energy Structures 1,781,645.86 1,781,645.86 1,785,911.86 4,266.00 - Office Buildings 53,577,841.77 53,577,841.77 73,539,333.67 19,961,491.90 - School Buildings 55,458,690.01 24,878,933.59 29,633,248.77 4,754,315.18 30,579,756.42 32,307,997.02 1,728,240.60 Hospitals and Health Centers 4,696,516.57 4,696,516.57 5,263,591.11 567,074.54 - Markets and Slaughterhouses 42,132,465.48 42,132,465.48 48,981,161.00 6,848,695.52 - Other Structures 122,581,095.72 121,855,395.16 145,073,144.76 23,217,749.60 725,700.56 884,701.97 159,001.41 Office Equipment 10,466,264.37 8,191,877.62 24,262,794.52 16,070,916.90 2,274,386.75 2,670,305.55 395,918.80 Furniture and Fixtures 4,419,761.93 740,066.70 1,256,912.60 516,845.90 3,679,695.23 4,474,301.55 794,606.32 IT Equipment and Software 6,155,961.17 3,475,146.80 6,467,622.46 2,992,475.66 2,680,814.37 6,610,665.50 3,929,851.13 Library Books 2,582,342.02 230,762.94 564,834.43 334,071.49 2,351,579.08 4,126,315.35 1,774,736.27 Machineries 1,191,416.66 1,191,416.66 1,441,587.12 250,170.46 - Agricultural, Fishery and Forestry Equipment 1,000,960.00 1,000,960.00 1,006,000.00 5,040.00 - Communication Equipment 1,619,737.73 1,591,367.12 3,607,263.92 2,015,896.80 28,370.61 38,700.30 10,329.69 Construction and Heavy Equipment 15,322,787.82 15,322,787.82 20,683,818.51 5,361,030.69 - Firefighting Equipment and Accessories 163,855.97 163,855.97 771,087.00 607,231.03 - Hospital Equipment 463,181.81 463,181.81 617,800.85 154,619.04 - Medical, Dental and Laboratory Equipment 211,516.18 211,516.18 248,089.90 36,573.72 - Military and Police Equipment 381,009.85 381,009.85 461,306.45 80,296.60 - Sports Equipment 4,373.25 4,373.25 7,350.00 2,976.75 - Technical and Scientific Equipment 977,510.37 939,070.53 3,695,515.84 2,756,445.31 38,439.84 51,545.00 13,105.16 Other Machineries and Equipment 213,555.50 213,555.50 5,099,032.47 4,885,476.97 - Motor Vehicles 9,524,267.89 9,256,410.74 22,747,936.22 13,491,525.48 267,857.15 750,000.00 482,142.85 Watercrafts 809,966.63 809,966.63 2,189,099.07 1,379,132.44 - Other Transportation Equipment 1,394,500.00 1,394,500.00 1,394,500.00 - - Other Property, Plant and Equipment 16,190,729.10 13,494,534.16 24,527,439.26 11,032,905.10 2,696,194.94 3,366,582.15 670,387.21 Construction in Progress- Agency Assets 98,223,657.38 98,223,657.38 98,223,657.38 - - Work/Other Animals 78,200.00 78,200.00 78,200.00 - Breeding Stocks 14,000.00 14,000.00 14,000.00 - Arts, Archeological Specimen and Other Exhibits 632,354.36 632,354.36 632,354.36 -

TOTAL 838,036,762.15Php 789,973,004.88Php 911,399,912.67Php 121,426,907.79Php 48,063,757.27Php 60,839,612.03Php 12,775,854.76Php

Account Title CONSOLIDATED General Fund Special Education Fund

ANNEX 8 SUMMARY SCHEDULE OF DISCREPANCIES NOTED ON CY 2008

LGU-NAGA REMITTANCES VS. BIR ACKNOWLEDGMENT OF PAYMENTS

Nature of Remittances

Period Covered

LGU-Naga City Payments ROR No. DATE AMOUNT

BIR Acknowledged AMOUNT

Amount of Discrepancy

Withholding Tax

General Fund

2008

1. Supplier 2. Supplier 3. Supplier 4. Supplier 5. Supplier 6. Supplier 7. Supplier 8. Supplier 9. Supplier 10. Supplier 11. Supplier

SEF

12. Supplier

January February March April May June July August Sept. October Nov. Nov.

3048098 2/11/2008 3048330 3/10/2008 3871700 4/10/2008 3871951 5/09/2008 402740 6/10/2008 697131 7/10/2008 1123036 8/08/2008 1123362 9/10/2008 1434937 10/10/2008 1437818 11/10/2008 1439701 12/10/2008 1439699 12/10/2008 T O T A L

P P

335,381.57 378,052.23 353,546.48 552,328.02 223,603.02 567,759.30 681,664.40 319,679.71 609,455.41 660,107.08 386,947.01 178,074.60 5,246,598.83

P P

75,770.04 100,757.84 142,983.45 131,417.52 53.855.03 165,759.17 171,200.87 87,087.63 164,629.90 162,082.60 97,003.83 49,421.50 1,401,969.38

P P

259,611.53 277,294.39 210,563.03 420,910.50 169,747.99 402,000.13 510,463.53 232,592.08 444,825.51 498,024.48 289,943.18 128,653.10 3,844,629.45

Prepared by:

ANNEX 9 SUMMARY OF SUGGESTED ADJUSTING JOURNAL ENTRIES PERTAINING TO OVER-WITHHELD TAX REFUND ON COMPENSATION AND INAPPROPRIATE ACCOUNT USED

Agency Book Should Be Suggested Correcting/Adjusting Entries Entries Made (GF – CDJ for February 2008)

1. JEV No. 511 - Ricardo Alba, et. al. Due to BIR (412) P 1,396.14 Tax Refund Payable (429) P 1,396.14 To take up the over-withheld tax on compensation Tax Refund Payable (429) P 1,396.14 Cash- Disb. Officers (103) P 1,396.14 To record the payment of tax refund.

2. JEV No. 511-1 – Melissa Abad, et. al Due to BIR (412) P344,015.71 Tax Refund Payable (429) P344,015.71 To take up the over-withheld tax on compensation Tax Refund Payable (429) P344,015.71 Cash- Disb. Officers (103) P344,015.71 To record the payment of tax refund.

3. JEV No. 511-2 - Jose Abad, et. al Due to BIR (412) P482,243.49 Tax Refund Payable (429) P482,243.49 To take up the over-withheld tax on compensation Tax Refund Payable (429) P482,243.49 Cash- Disb. Officers (103) P482,243.49 To record the payment of tax refund.

4. Adjustment of tax refund for 2007 for Wilson M. Mesia, et. al (JEV Nos. 43-10, 43-18, 56-4, 82-16 & 82-17 totaling P7,876.39, recorded in the CDJ for the Month of Jan. 2008. Also, JEV No. 234-4 amounting to P4,565.51, recorded in the CDJ for the Month of March 2008. The grand total is P12,441.90. Due to BIR (412) P 12,441.90 Tax Refund Payable (429) P 12,441.90 Tax Refund Payable (429) P 12,441.90 Cash – Disb. Officer (103) P 12,441.90

1. Due from NGAs (136) P 1,396.14 Tax Refund Payable (429) P 1,396.14 SAME 2. Due from NGAs (136) P344,015.71 Tax Refund Payable (429) P344,015.71 SAME 3. Due from NGAs (136) P482,243.49 Tax Refund Payable (429) P482,243.49 SAME

4. Due from NGAs (136) P12,441.90 Tax Refund Payable (429) P12,441.90 SAME

1. Due from NGAs (136) P 1,396.14 Due to BIR (412) P 1,396.14 2. Due from NGAs (136) P344,015.71 Due to BIR (412) P344,015.71 3. Due from NGAs (136) P482,243.49 Due to BIR (412) P482,243.49 Adjusting Entry: 4. Due from NGAs (136) P12,441.90 Due to BIR (412) P12,441.90

Prepared by:

JOHANSON V. DISUANCO State Auditor IV Audit Team Leader

ANNEX 10 SUMMARY OF SUGGESTED ADJUSTING JOURNAL ENTRIES FOR UNRECORDED REMITTANCES OF INCOME TAXES WITHHELD AND INAPPROPRIATE ACCOUNT USED

Agency Book Should Be Suggested Correcting/Adjusting Entries General Fund

Income Taxes Withheld Remittance to BIR for December 2007

1. No entry made Income Taxes Withheld Remittance to BIR for January 2008.

2. No entry made Income Taxes Withheld Remittance to BIR For February 2008. Entry Made: 3. Due to BIR (412) P488,848.82 Tax Refund Payable (429) P 88,227.05 Cash in Bank (111) 400,621.77

1. Due to BIR (412) P228,248.20* Due from NGAs (136) P228,248.20 To record the remittance of income taxes withheld on compensation for December 2007 offset from the over-withheld taxes for CY 2007 duly refunded to employees by the agency. *(P227,922.09 + P326.11 = P228,248.20) 2. Due to BIR (412) P523,621.99 Due from NGAs (136) P523,621.99 To record the remittance of income taxes withheld on compensation for January 2008 offset from the over-withheld taxes for CY 2007 duly refunded to employees by the agency. 3. Due to BIR (412) P488,848.82 Due from NGAs (136) P 88,227.05 Cash in Bank (111) 400,621.77 To record the remittance of income taxes withheld on compensation for February 2008 offset from the balance of the over-withheld taxes for CY 2007 duly refunded to employees by the agency.

1. Due to BIR (136) P 228,248.20 Due from NGAs (412) P228,248.20 To record the remittance of income taxes withheld on compensation for December 2007 offset from the over-withheld taxes for CY 2007 duly refunded to employees by the agency. 2. Due to BIR (412) P523,621.99 Due from NGAs (136) P523,621.99 To record the remittance of income taxes withheld on compensation for January 2008 offset from the over-withheld taxes for CY 2007 duly refunded to employees by the agency. 3. Tax Refund Payable (429) P 88,227.05 Due from NGAs (136) P88,227.05 To correct the inappropriate account used in offsetting the balance of the over-withheld taxes for CY 2007 duly refunded to employees by the agency.

Prepared by:

JOHANSON V. DISUANCO State Auditor IV Audit Team Leader

Aging of Due to LGUs (Account Code 418) ANNEX 11RPT Share of the 27 Barangays of Naga CityNaga CityFor CY 2008

due dateno. of days

delayedDate Particulars Reference Dr Cr Balance2008

Beg. Balances GL/FS Schedule 2,851,153.38 1/5/2008 62January RPT w/held on Adv. pyt 4,056,225.58 6,907,378.96 1/5/2008 62

RPT w/held for January 1,294,639.25 8,202,018.21 4/5/20088,202,018.21

Feb RPT w/held for February 1,070,127.55 9,272,145.76 4/5/2008 789,272,145.76

Mar RPT w/held for March 1,914,695.02 11,186,840.78 4/5/2008 7810 Cash transfer of RPT share JEV#993 6,781,472.26 4,405,368.52

for Nov.-Dec. '07 Ck#913159 4,405,368.52 4,405,368.52

Apr RPT w/held for April 878,256.56 5,283,625.08 7/5/2008 78adj due to dishonored ck GJ 1,417.44 5,282,207.64

5,282,207.64 May RPT w/held for May 442,160.82 5,724,368.46 7/5/2008 78

5,724,368.46 June RPT w/held for June 911,515.58 6,635,884.04 7/5/2008 78

23 Cash transfer of RPT share JEV#2600 4,305,239.95 2,330,644.09 for Feb. to May Chk#27787176 2,330,644.09

2,330,644.09 July RPT w/held for July 676,096.03 3,006,740.12 10/5/2008 45

3,006,740.12 3,006,740.12

Aug RPT w/held for August 552,017.37 3,558,757.49 10/5/2008 453,558,757.49

Sept RPT w/held for September 838,129.98 4,396,887.47 10/5/2008 more than 80 days

23 Cash transfer of RPT share JEV#4098 2,139,628.98 2,257,258.49 for Chk#27788241 2,257,258.49

OR#7009041 2,257,258.49 Oct RPT w/held for October 725,910.70 2,983,169.19 1/5/2009

17 Pymt of RPT share to 27 Ck#2778637-663 838,129.95 2,145,039.24 bgys 2,145,039.24

2,145,039.24 2,145,039.24

Nov RPT w/held for November 539,491.94 2,684,531.18 1/5/200920 Pymt of RPT share to 27 JEV#5131-157 725,910.70 1,958,620.48

bgys 1,958,620.48 Dec RPT w/held for December 1,319,789.71 3,278,410.19 1/5/2009

14,791,799.28 15,219,056.09 3,278,410.19

AMOUNT

Reviewed by:

JOHANSON V. DISUANCO

State Auditor IV Audit Team Leader

ANNEX 13City of Naga

Date Voucher Purpose of Balances as

Name Granted # Check# Cash Advance Amount of 12/31/08 4.5.5 5.4General Fund

Bicol Skills Foundation 3/11/2004 1402 Subsidy -11th Nat'l. Skills Competition 1,500,000.00 1,500,000.00 1,500,000.00 Isarog Garden Society 5/28/08 2276 913461 c/o Mr. Juan Las- F/A for the 1st & 2nd Qrtr. 140,000.00

11/27/08 5241 27789106 financial assistance 157,500.00 297,500.00 157,500.00 140,000.00 HELP Learning Center 8/21/2007 4042 24796647 Bal. from 3rd & 4th Quarter subsidy 12,500.00

11/13/08 5002 27788933 HELP Learning Center - salaries & wages of staff for the last quarter 65,000.00 of 2008& liquidation CA 7/23/08 77,500.00 65,000.00 12,500.00

Camarines Sur NGO Dev't. 9/02 8134 Subsidy 159,900.00 159,900.00 159,900.00 NC Senior Citizens' Fed.Inc. 2/8/08 612 26474609 Subsidy for the 1st Qrtr. 50,000.00

7/24/08 3228 27787646 c/o Josefina Constantino- financial assist. 50,000.00 50,000.00 10/20/08 4542 27788587 NC Sr. Citizen Fed. Inc./clo. Josefina B. Constantino - financial assistan 50,000.00 150,000.00 50,000.00 150,000.00

NC People's Council JEV#2793-18,6/08 (2,608.80) 4/3/08 1409 26475261 financial assistance -1st qrter release 200,000.00 7/2/08 2826 27787361 financial assistance for the 2nd quarter 200,000.00 200,000.00

11/10/08 4890 913859 financial assistance 200,000.00 200,000.00 11/24/08 5124 27789006 financial assistance 140,000.00 737,391.20 140,000.00 400,000.00

Bicol Transport Service Coop. 11/21-22/03 5001 15584733 Subsidy-Bicol Reg'l.Transport Congress 20,000.00 20,000.00 20,000.00 Metro Naga Taekwondo Assn. 4/21/04 2159 Subsidy c/o Mario Pisa 23,400.00 23,400.00 23,400.00 UCFI c/o Jason Neola,City Mayor's Off. 5/2003 1848 Subsidy 39,969.00 39,969.00 39,969.00 Naga Division of City Schools Coop. 986 Subsidy 30,000.00 30,000.00 30,000.00 NC Fed. of Persons w/Disabilities 2369 16881380 Subsidy c/o Bernardita Gabriel 47,200.00 47,200.00 47,200.00 NC Urban Poor Federation 7/23/08 3205 27787630 financial assistance 96,500.00 96,500.00 96,500.00 Camarines Sur Bowlers Assoc. 8/16/2004 3840 16882210 Subsidy 5,000.00 5,000.00 5,000.00 Guardians Brotherhood Inc. 5/24/2005 1800 Subsidy c/o Francisco A. Plantado 20,000.00 20,000.00 20,000.00 Pag-iribang Bantay Arangay 8/31/2005 2933 18928227 Subsidy c/o Jose DL Parco 91,800.00 91,800.00 91,800.00 Bicol Ass'n. of Tertiary Schools 2/16/2006 471 21124344 Subsidy 20,000.00 20,000.00 20,000.00 Met. Naga Chamber of Comm. & Ind. 400,000.00

4/9/08 1500 913219 Subsidy 4th Bicol Business Week 300,000.00 700,000.00 300,000.00 700,000.00 KSBK c/o Cecilia A. Amparado 3/26/2007 1469 23174135 Subsidy 150,000.00 150,000.00 150,000.00 NNOTODA 4/23/04 2222 Subsidy c/o Jose De la Rosa 13,000.00 13,000.00 13,000.00

TOTAL 4,179,160.20 1,162,500.00 3,619,269.00 Special Education Fund

Abcede ES PTA, Inc. 11/12/2007 780 889462 pyt. of school maintenance and operating expenses 51,747.75 51,747.75 51,747.75 Balatas ES PTAS, Inc. 5/9/2008 308 889799 pyt. of school maintenance and operating expenses 14,875.00 14,875.00 14,875.00 BSP NC Council C/O Lea Fungo 10/19/2007 726 889428 14th Nat'l. Scout Jamboree, Mt Makiling, Los

Baños, Laguna, Oct. 21-27, 2007 2,488.79 2,488.79 2,488.79 Calauag ES PTA, Inc. 7/18/2008 448 889895 pyt. of school maintenance and operating expenses 313.71 313.71 313.71

ANALYSIS OF DUE FROM NGOs/POs

As of December 31, 2008Provision of COA Cir.No.2007-001 not complied

ANNEX 13

City of Naga

Date Voucher Purpose of Balances as Name Granted # Check# Cash Advance Amount of 12/31/08 4.5.5 5.4

CSNHS PTA , Inc. 3/202007 153 756522 pyt. of school maintenance and operating expenses 100,000.00 CSNHS PTA , Inc. 6/11/2008 387 889854 pyt. of school maintenance and operating expenses 307,282.00 407,282.00 307,282.00 407,282.00 Carolina ES PTA, Inc. 3/5/2008 156 889695 pyt. of school maintenance and operating expenses 7,514.41 7,514.41 Carolina NHS 3/23/2007 166 756531 pyt. of school maintenance and operating expenses 100,000.00 107,514.41 100,000.00 Con. Pequeña NHS 3/23/2007 167 756532 pyt. of school maintenance and operating expenses 10.50 Con. Pequeña NHS PTA, Inc. 9/28/2007 640 889361 pyt. of school maintenance and operating expenses 19,728.80 19,739.30 19,739.30 Del Rosario ES PTA, Inc. 1/30/2008 69 889631 cancellation and replacement of check due to

incident of robbery 640.30 640.30 640.30 Don Leon Mercado HS PTA, Inc. 7/18/2008 449 889896 pyt. of school maintenance and operating expenses 8,662.64 8,662.64 Don Leon Mercado HS PTA, Inc. 11/22/2007 816 889489 pyt. of school maintenance and operating expenses 8,845.18 17,507.82 17,507.82 Don Manuel Abella ES PTA, Inc. 4/9/2008 250 889766 pyt. of school maintenance and operating expenses 99,600.00 99,600.00 Don Manuel Abella ES PTA, Inc. 12/19/2007 915 889571 pyt. of school maintenance and operating expenses 102,600.00 202,200.00 202,200.00 Grandview ES PTA, Inc. 2/27/2008 138 889680 pyt. of school maintenance and operating expenses 11,764.30 11,764.30 11,764.30 GSP C/O Lani Menia 12/24/2008 760-12 cash Senior Scouts Day with Elderly, 12/27/2008 1,000.00 1,000.00 GSP C/O Lani Menia 12/24/2008 760-13 cash School Coordinator's Rountable Confeence, 12/27/2008 2,000.00 2,000.00 GSP C/O Lani Menia 12/12/2008 746 890093 cash advance for expenses to 2nd Talents and Fund Galore 5,000.00 5,000.00

, 12/13/2008

GSP C/O Lani Menia 8/13/2008 503 889927 Council Board Meeting, 8/8/2008 1,000.00 1,000.00 GSP C/O Lani Menia 8/13/2008 502 889926 Regional Trainers' Gathering, 8/15-17/2008, Lucena City 2,000.00 11,000.00 3,000.00 Jose Rizal ES PTA, Inc. 11/5/2007 750 889443 pyt. of school maintenance and operating expenses 4,243.84 Jose Rizal ES PTA, Inc. 6/16/2008 397 889858 pyt. of school maintenance and operating expenses 58,275.00 62,518.84 58,275.00 62,518.84 Mac Mariano ES PTA, Inc. 11/19/2007 803 889480 pyt. of school maintenance and operating expenses 163,350.92 163,350.92 163,350.92 Morada Ramos PTA, Inc. 10/1/2007 647 889367 pyt. of school maintenance and operating expenses 57.25 57.25 57.25 NACITEA c/o Nydia Sol/Pres. 9/15/2008 574 889978 52nd Foundation Anniversary, 9/3/2008, CNHS 50,000.00

Pavilion

NACITEA c/o Nydia Sol/Pres. 12/17/2008 748 890095 Teachers and Employees Day, 12/18/2008, 50,000.00 50,000.00 NACITEA c/o Nydia Sol/Pres. 12/17/2008 748 890095 Family Day of Queen Beneficiaries, 12/21/2008 250,000.00 350,000.00 250,000.00 50,000.00 Naga Central School I PTA, Inc. 2/15/2008 114 889663 pyt. of school maintenance and operating expenses 89,287.11 89,287.11 89,287.11 Naga City Sped Center PTA, Inc. 2/19/2008 119 889668 pyt. of school maintenance and operating expenses 14,175.00 14,175.00 14,175.00 Naga City Science HS PTA 11/22/2007 817 889490 pyt. for expenses of Family Day Program of Queen 111,847.20 111,847.20 111,847.20

Beneficiaries and additional honorarium of speakers

of Queen Parenting Seminar Advisers

Pacol ES PTA, Inc 10/1/2007 648 889368 pyt. of school maintenance and operating expenses 5,925.79 5,925.79 5,925.79 Panicuason ES PTA, Inc. 11/15/2007 795 889474 pyt. of school maintenance and operating expenses 6,113.36 Panicuason ES PTA, Inc. 6/5/2008 369 6/5/2008 pyt. of school maintenance and operating expenses 45,416.07 51,529.43 45,416.07 51,529.43 Rosario Maramba ES PTA, Inc. 9/28/2007 634 889355 pyt. of school maintenance and operating expenses 2,538.96 Rosario Maramba ES PTA, Inc. 3/25/2008 197 889724 pyt. of school maintenance and operating expenses 100,625.00 103,163.96 100,625.00 103,163.96

As of December 31, 2008Provision of COA Cir.No.2007-001 not complied

ANALYSIS OF DUE FROM NGOs/POs

ANNEX 13City of Naga

Date Voucher Purpose of Balances as

Name Granted # Check# Cash Advance Amount of 12/31/08 4.5.5 5.4Sabang ES 3/27/2007 182 756544 pyt. of school maintenance and operating expenses 224.00 Sabang ES PTA, Inc. 11/6/2007 755 889448 pyt. of school maintenance and operating expenses 27,781.53 28,005.53 27,781.53 28,005.53 Sabang HS PTA, Inc 3/10/2008 170 889706 pyt. of school maintenance and operating expenses 141,405.00 141,405.00 141,405.00 San Isidro ES 3/27/2007 192 756553 pyt. of school maintenance and operating expenses 20,000.00 20,000.00 20,000.00 San Rafael ES PTA, Inc. 10/9/2007 691 889399 pyt. of school maintenance and operating expenses 717.90 717.90 717.90 Sta. Cruz ES PTA, Inc. 10/16/2007 707 889411 pyt. of school maintenance and operating expenses 495.96 495.96 495.96 Tabuco Central School PTA, Inc. 10/16/2007 712 889415 pyt. of school maintenance and operating expenses 175,000.00 Tabuco Central School PTA, Inc. 3/26/2008 204 889730 pyt. of school maintenance and operating expenses 169,606.00 344,606.00 169,606.00 344,606.00 Teodora Moscoso 3/27/2007 186 756548 pyt. of school maintenance and operating expenses 20,000.00 20,000.00 20,000.00 Tinago Central School PTA, Inc. 2/13/2008 111 889660 pyt. of school maintenance and operating expenses 26,053.50 26,053.50 26,053.50 Triangulo ES PTA, Inc. 10/2/2007 659 889377 pyt. of school maintenance and operating expenses 318.91 Triangulo ES PTA, Inc. 2/6/2008 91 889646 pyt. of school maintenance and operating expenses 2,323.53 2,642.44 2,323.53 2,642.44 Villa Corazon ES 3/27/2007 180 756542 pyt. of school maintenance and operating expenses 20,000.00 20,000.00 20,000.00 Villa Grande ES PTA, Inc. 8/12/2008 497 889922 replacement of check previously cancelled 34,300.00 34,300.00 34,300.00

TOTAL 2,437,155.21 1,128,571.77 2,129,166.01 TRUST FUND

Pag-asang Kauswagan 3/2/2005 500,000.00 500,000.00 500,000.00 (ACRES)Associates in Research & Comm. Emp.Sev,In 6/26/2008 285,000.00 285,000.00 285,000.00 Gawad Kalinga Foundation 3/2/2005 690,000.00 690,000.00 690,000.00

TOTAL 1,475,000.00 - 1,475,000.00 GRAND TOTAL 8,091,315.41 2,291,071.77 7,223,435.01

Legend: 4.5.5 - no NGO/PO shall receive additional release unless an Interim Fund Utilization Report of the previous release

certified by its Accountant and approved by its President/Chairman is first complied with.

5.4 - within 60 days after the completion of the project, the NGO/PO shall submit the final Fund Utilization Report

certified by its Accountant and approved by its President/Chairman to the GO together with its supporting

documents to support the liquidation of the funds granted to NGO/PO

ANALYSIS OF DUE FROM NGOs/POs

As of December 31, 2008Provision of COA Cir.No.2007-001 not complied

ANNEX 14City of Naga

no date 2002 2003 2004 2005 2006 2007 Sub-Total 2008 TOTAL

GF 477,200.00 159,900.00 59,969.00 1,541,400.00 111,800.00 20,000.00 162,500.00 2,532,769.00 1,646,391.20 4,179,160.20 SEF 944,036.64 944,036.64 1,493,118.57 2,437,155.21 TF 1,190,000.00 1,190,000.00 285,000.00 1,475,000.00 TOTAL 477,200.00 159,900.00 59,969.00 1,541,400.00 1,301,800.00 20,000.00 1,106,536.64 4,666,805.64 3,424,509.77 8,091,315.41

AGING of the DUE FROM NGOs/POs Balance as of December 31, 2008

Schedule of Monthly Income and Obligations ANNEX 22SPECIAL EDUCATION FUNDCY 2008LGU-Naga City

Month Special Education Tax Discount Monthly SET Interest Prior Year's Accumulated Monthly Accumulated Income Income Adjustments SEF Income Obligations Obligations

(Net of Discount) Beginning Balance (per Statement of Operation) 17,527,527.59 January 19,451,840.13 3,230,994.08 16,220,846.05 (364,434.01) 33,383,939.63 644,552.43 644,552.43 February 3,279,630.18 219,625.55 3,060,004.63 - 36,443,944.26 1,295,570.01 1,940,122.44 March 5,970,998.65 411,526.99 5,559,471.66 (210,833.41) 41,792,582.51 4,435,227.18 6,375,349.62 April 2,947,039.03 77,806.64 2,869,232.39 (87,495.00) 44,574,319.90 1,364,328.27 7,739,677.89 May 1,393,398.14 38,397.30 1,355,000.84 (37,466.66) 45,891,854.08 5,922,616.54 13,662,294.43 June 2,718,497.74 118,444.65 2,600,053.09 15,789.27 (388,576.04) 48,119,120.40 823,832.93 14,486,127.36 July 2,112,021.19 26,109.83 2,085,911.36 (286,259.07) 49,918,772.69 3,561,255.27 18,047,382.63 August 1,746,866.17 37,160.69 1,709,705.48 (562,480.16) 51,065,998.01 2,316,744.07 20,364,126.70 September 2,780,620.80 95,945.67 2,684,675.13 (317,107.00) 53,433,566.14 3,532,360.71 23,896,487.41 October 2,340,195.65 34,470.96 2,305,724.69 16,827.51 (324,656.90) 55,431,461.44 1,901,537.39 25,798,024.80 November 1,536,217.16 20,374.88 1,515,842.28 (2,494.59) 56,944,809.13 1,318,481.96 27,116,506.76 December 3,868,528.39 97,816.03 3,770,712.36 60,783.90 3,185,025.49 63,961,330.88 5,544,797.39 32,661,304.15 TOTAL 50,145,853.23 4,408,673.27 45,737,179.96 93,400.68 603,222.65 32,661,304.15