MUNICIPALITY OF SAN MATEO

RIZAL PROVINCE

AGENCY ACTION PLAN AND STATUS OF IMPLEMENTATION

Audit Observations and Recommendations
For the Calendar Year 2018
As of ____________________________

Agency Action Plan Reason for Partial/ Action

Person/ Target Delay/
Audit Recommen- Status of Taken/
Ref Audit Observations Action Dept. Implementation Non-
dations Implementation Implementation if Action to
Plan Respon-
From To applicable be Taken
sible
1. The reliability of the We reiterated our
recorded balances of prior years’
Property, Plant and recommendations
Equipment (PPE) that the Local Chief
accounts with a carrying Executive direct the:
amount of
P631,570,213.84 or
41.96 percent of the a. Inventory Munici
total assets is doubtful Committee to pal BU
and their existence and hasten the
condition could not be completion of the
readily and fully physical
established due to: (a) inventory of all
insufficient property the
records and inability of Municipality’s
the Inventory property and
Committee to conduct a correspondingly
complete physical
inventory of the prepare and
Municipality’s property submit to the
for the year as required Audit Team the
under Sections 114 and required
124 of the Manual on inventory report
the New Government
thereon. Any
Accounting System
(MNGAS) for Local discrepancies
Government Units noted between
(LGUs), Volume I; (b) the inventory
non-provision of report and
depreciation or accounting and
impairment for property property records
costing should be
P158,447,121.44; (c) investigated and
absence of complete make the
and detailed lapsing necessary
schedule; and
adjustments to
(d) Inclusion of obsolete
and unserviceable items reconcile the PPE
amounting to accounts;
P840,800.00.
b. concurrent
General Services
Officer to
maintain a
complete and
updated property
cards. The
balance per
property cards
should always
 reconcile with the
ledger cards of
the accounting
office to come
out with an
accurate and
reliable balance
of PPE accounts
in the
Municipality’s
books;

c. Municipal
Accountant to
provide a
complete Lapsing
Schedule to
support the PPE
balances as well
as the provision
for Depreciation
Expenses in the
financial
statements; and

d. GSO to prepare
the Inventory and
Inspection Report
of Unserviceable
Property (IIRUP)
 as basis for the
proper disposal.
2. The reliability and We reiterated our
correctness of the year- prior year’s
end balances of Cash in recommendation
Bank and Cash Local that the Local Chief
Treasury accounts Executive direct the:
amounting to
P536,476,621.36 and a. Municipal
P8,587,986.16, Treasurer and
respectively, could not Municipal
be ascertained due to Accountant to
the absence of periodic conduct
reconciliation between immediate
the accounting and reconciliation of
treasury records as well their respective
as accounting and bank records in order
records, and failure of to determine the
the Municipal cause/s of the
Accounting Office to discrepancies
make the necessary between the
adjustments for all General Ledger
valid reconciling items and Cashbook
in the Municipality’s balances for Cash
book, contrary to in Bank and Cash
Section 74 of Local Treasury
Presidential Decree accounts,
(PD) No. 1445, Section respectively, and
3.2 of Commission On to come up with
Audit (COA) Circular an accurate and
No. 96-011 dated reliable financial
October 2, 1996 and data;
Section 63(F) of the
Local Treasury b. Municipal
Operations Manual. Accountant to
immediately
prepare the
necessary
accounting
journal entries to
adjust all valid
reconciling items
in the
Municipality’s
books to avoid
accumulation
thereof, and to
present the
correct balances
of the Cash in
Bank accounts in
the financial
statements; and

c. Municipal
Accountant to
regularly submit
the Bank
Reconciliation
Statements of all
 bank accounts
within the period
prescribed by the
cited regulations.

3. The year-end balances We reiterated our

of Real Property Tax prior year’s
(RPT) and Special recommendations
Education Tax (SET) that the Local
Receivables amounting Chief Executive
to P122,896,177.44 and direct the:
P122,896,177.48,
respectively, were a. concerned
doubtful as to their Municipal officials
accuracy, validity and to determine and
reliability due to: find solutions as to
(a) non-preparation of the cause/s of the
subsidiary ledgers continuous
(SLs) to support the inability of the
recorded balances; (b) Treasurer to
setting up of the prepare and submit
Receivable accounts at the certified list of
the beginning of the taxpayers and the
year were based on tax collectible from
estimates provided by each at the
the Treasury Office beginning of the
instead of the certified year to the
list showing the name Municipal
of the taxpayers and the Accountant as a
corresponding amount basis of recording
of taxes due and the RPT and SET
collectible; and (c) Receivables, so
erroneous entries made that accurate and
on the setting up of reliable amount of
RPT and SET receivables can be
Receivables and their taken up in the
corresponding liability books of accounts
accounts, contrary to and Management
Section 20 of the will be provided
Manual on New with accurate
Government information needed
Accounting System in its decision
(MNGAS), for Local making. If
Government Units necessary, close
(LGUs), Volume I and coordination with
Section 248 of the the Municipal
Local Government Assessor should be
Code of 1991. done by the
Municipal
Treasurer in order
to come up with
the required list;

b. Municipal
Accountant to
establish
Subsidiary Ledgers
for RPT and SET
Receivables and
their corresponding
 Liability accounts
in coordination
with the Municipal
Treasurer and
Municipal
Assessor with the
aid of their
computerized
records to
safeguard against
inaccurate
information and
improvement of
the system for
control purposes;
and

c. Municipal
Accountant to set-
up the RPT and
SET Receivables
and their
corresponding
Liability accounts
in accordance with
Section 20 of the
MNGAS for
LGUs, Volume I
and make the
necessary
 adjustments in the
Municipality’s
book to present the
correct balance of
the Deferred RPT
and SET and Other
Deferred Credits
accounts in the
financial
statements.
4. Payment for the We recommended
procurement of various that the Local
medical, dental and Chief Executive
laboratory supplies, direct the:
and drugs and
medicines totaling a. Municipal
P3,719,774.76 and Accountant to
P17,190,136.99, adhere strictly
respectively, was with the
recorded as outright provisions of
expense, contrary to Section 51 of the
Section 51 of the MNGAS for
Manual on New LGUs, on the
Government proper recording
Accounting System and reporting of
(MNGAS) for Local all regular
Government Units purchases of
(LGUs), Volume I, supplies
thus resulted in the including the
understatement of medical, dental
inventory for said and laboratory
supplies and supplies and
overstatement of drugs and
related expense medicines
accounts. Moreover, supplies as
there was no internal inventory account
control being applied and maintenance
by the Municipality of subsidiary
over the receipt and ledger cards;
issuance of the same,
thereby exposing them b. Municipal Health
to possible loss and Office or
irregularities. Pharmacy
Department Head
to maintain stock
cards for control
and monitoring
purposes;

c. Municipal
Accountant and
Supply/Property
Officer ensure
that all donated
medical, dental
and laboratory
supplies and
drugs and
medicines from
other government
 agencies and
private entities
are properly
accounted in the
accounting and
supplies and
property records;
and

d. Pharmacist and
the Municipal
Health Officer to
submit the
Summary of
Supplies and
Materials Issued,
supported with
the Requisition
and Issuance
Slips to the
Municipal
Accountant,
which shall serve
as basis for
recording the
issuance of
supplies and
materials and the
preparation of the
Journal Entry
 Voucher (JEV).
5. Due from LGUs and We recommended
Due to LGUs accounts that the Local
amounting to Chief Executive
P4,035,049.51and direct the
P3,550,663.14, Municipal
respectively, have Accountant to:
discrepancies of
P2,621,684.42 and a. make a detailed
(P370,414.93) with review of all the
their respective recorded reciprocal
reciprocal accounts in accounts and
the books of the Rizal coordinate with the
Provincial Government Provincial
due to absence of Accounting Office
periodic reconciliation in order to
between the Municipal determine the
and Provincial cause/s of the
accounting records, unreconciled
thus, affecting the fair amounts.
presentation of the said Thereafter, make
accounts in the the necessary
financial statements. adjustments/
corrections in the
books of accounts
to present the
correct balances of
the affected
accounts; and
henceforth,
 b. exercise due
professional care
in the recording
and classifying
the
Municipality’s
financial
transactions to
ensure that the
balances of the
reciprocal
accounts at all
times be the
same.

6. Receivables and We reiterated our

Payables accounts in recommendation that
the total amount of the Local Chief
P2,416,540.20 and Executive with the
P20,404.51,respectivel concurrence of the
y, remained non- Municipal Council,
moving or dormant for hasten the
more than 10 years in submission of the
the books of accounts request of the
due to inability of the Municipal
Municipality to file the Accountant for the
request for authority to authority to write-off
write-off the said the dormant
dormant accounts to accounts to the
 the Commission on Commission on
Audit (COA) despite Audit, duly
previous year’s supported with the
recommendation, list of available
contrary to the records pertaining to
provisions of the accounts,
Presidential Decree certification as to the
(PD) No. 1445 and extent of validation
COA Circular No. made on the
2016-005, thus accounts, reasons
affecting the fair why the
presentation of these records/documents/s
accounts in the chedules could not
financial statements. be located and the
number of years the
accounts have been
dormant.

7. Cash advances of We reiterated that

P1,754,637.43 the Local Chief
remained unliquidated Executive direct
as of year-end, contrary the Municipal
to the provisions of Accountant to:
Section 89 of
Presidential Decree a. demand
(PD) No. 1445 and immediate
Commission on Audit settlement of all
(COA) Circular No. unliquidated cash
97-002, thus resulted in advances from
the overstatement of officials and
receivables and employees
understatement of concerned,
expense accounts pursuant to above
reported in the cited regulations.
financial statements of Further, ensure
the Municipality. that the officers
and employees
with outstanding
or unliquidated
cash advances
should not be
granted
additional cash
advance, until the
previous ones are
settled, to
preclude
accumulation of
unliquidated cash
advances.
Henceforth,
ensure that all
regulations
pertaining to cash
advances should
be strictly
enforced;

b. monitor the
outstanding cash
 advances of
officials and
employees and
demand
immediate
settlement after
its purpose has
been served; and

c. exert efforts to
compel the 12
officials/employe
es that are no
longer connected
or resigned from
the Municipality
to liquidate their
outstanding cash
advances
pursuant to COA
Circular No.
2012-004 dated
November 28,
2012.

8. The Municipality was We reiterated our

still not compliant with recommendation that
the transition provision the Local Chief
on the phased Executive direct the:
recognition of the
Local Road Networks a. concurrent
in the books of Municipal GSO
accounts of the to coordinate
Municipality, which with the
requires 75 percent Municipal
compliance at the end Engineer for the
of CY 2018, specified Road Network
under Item IX of Identification
Commission On Audit Number of local
Circular (COA) No. road projects to
2015-008 dated facilitate the
November 23, 2015, preparation of
due to absence of Road yearly inventory
Network Identification and reporting of
Number for the the
components of the Municipality’s
local road projects, thus road network
rendered the Road system;
Networks account’s
balance of b. Municipal
P41,590,806.54 Engineer to
doubtful as to its provide the
completeness and Municipal
existence. Accountant and
the Concurrent
Municipal GSO
the complete
description and
cost segregation
of road
 components for
road projects; and
thereafter; and

c. Municipal
Accountant to
record the
amount of road
networks
equivalent to the
required
transition
provision
percentage every
year starting from
CY 2016 to CY
2019.

9. One hundred ninety We recommended

seven (197) plantilla that the Municipal
positions of the Mayor direct the
Municipality were Municipal
unfilled, thus resulting Government Head,
in the hiring of HRMO to:
numerous job
order/contractual a. consider filling up
employees and delay in the vacant plantilla
the promotions of positions which are
competent municipal vital in the delivery
employees, contrary to of the basic
Section 11.3 of the services by hiring
Civil Service qualified
Commission, applicants or by
Commission on Audit promoting non-
and Department of permanent
Budget and deserving
Management (CSC, personnel to
COA and DBM) Joint permanent
Circular (JC) No. 1 positions, in
dated November 9, which, it would
2018. lessen the need to
hire job
order/contractual
workers; and

b. evaluate the
performance of
Casual/Job Order
employees to open
opportunity to
qualified
employees for
possible
appointment to
permanent regular
positions to
recognize their
exemplary
performance and
commitment in the
 government
service.
10. The Municipality was We reiterated that
not able to provide in the Local Chief
its Annual Budget Executive direct the:
(AB) of
P4,145,000.00 a a. Municipal
budgetary line item Budget Officer to
for the strengthening provide in the
and implementation Municipality’s
of the Programs, AB a budgetary
Project and Activities line item for the
(PPAs) of Local LCPC from the
Councils for the allocated one
Protection of Children percent IRA
(LCPC) of the specifically for
Municipality, strengthening and
contrary to Republic implementation
Act (RA) No. 9344 of PPAs thereof.;
and Department of the and
Interior and Local
Government (DILG) b. LCPC to
Memorandum maximize the
Circular (MC) No. utilization of the
2012-120, thus allocated LCPC
deprived the children fund through
of the benefits that adequate
could have been planning and
derived therefrom. identification of
priority PPAs for
 its proper
implementation
and strengthening
the LCPC and
ultimate
realization of
goals protecting
the children’s
rights and
welfare.
11. Advances for Payroll We reiterated that
and Due to Pag-IBIG the Local Chief
accounts with Executive direct the
abnormal balances in Municipal
the amount ofAccountant make a
P925.00 and detailed review of
P79,045.56 reflected the accounts and
a credit and debit determine the causes
balances, of the abnormal
respectively, in the balances and effect
Municipality’s books, the necessary
thereby casting doubt adjustments in the
on the accuracy of the books of accounts to
said accounts present the correct
balances and the balances of these
recording of theaccounts.
transactions.
12. The Municipal We reiterated our
Accounting Office recommendation that
was unable to the Local Chief
 maintain a special Executive direct the
account in the Municipal
General Fund (GF) Accountant to
for the 20% maintain special
Development Fund account in the
(DF) of the General Fund for
Municipality, development
contrary to Section projects funded from
313(c) of the the 20% share of the
Republic Act (RA) IRA to facilitate
No. 7160. reporting of
utilization and
monitoring of the
said fund and review
thereof.
13. Appropriation for We recommended
20% Development Fund that the Local Chief
(DF) of P91,131,525.30 Executive direct the:
for CY 2018 was not fully
utilized due to lack of a. Municipal
sufficient details and Planning and
specific timetable in the Development
Annual Investment Plan Officer (MPDO)
(AIP) of the Municipality, and Local
thus depriving its Development
constituents of the Council (LDC) to
immediate benefits that identify the
could have been derived priority
from using the said funds, programs,
contrary to the pertinent projects and
provisions of Department activities to be
of the Interior and Local funded under the
Government (DILG) and 20% DF and
Department of Budget and ensure that
Management (DBM) Joint detailed
Memorandum Circular allocation of
(JMC) No. 2017-1 and funds for each
DILG, National Economic project and
and Development relevant
Authority (NEDA), DBM information
and Department of including the
Finance (DOF) Joint timelines for the
Memorandum Circular implementation
No. 1 s. 2007. Moreover, are reflected in
the continuing the AIP so that
appropriations of proper
P1,191,484.20 under the monitoring and
20% DF was not utilized evaluation of the
for the implementation of Municipality’s
various development development
projects as of year-end to projects may be
the disadvantage of the undertaken; and
intended beneficiaries.
b. concerned
Municipal
officials to
maximize the
utilization of the
said fund to
achieve the
 desirable socio-
economic
development and
environmental
outcomes of the
Municipality as
envisioned.
14. The Municipality was
not able to fully We recommended
implement the three that the Local
projects funded under Chief Executive
the Local to:
Government Support
Fund-Assistance to a. come up
Municipalities measures in order
(LGSF-AM) in the to hasten the
total amount of implementation
P11,300,000.00 as of within the target
year-end, contrary to timeframe of the
Department of the programs and
Interior and Local projects funded
Government (DILG) out of the fund
Circular No. 2018-61 transferred from
and Department of the national
Budget and government so
Management (DBM) that constituents
Local Budget Circular can enjoy the
No. 114, thus benefits due
depriving its them;
constituents of the
immediate use and/or b. direct the
the benefits that could implementing
have been derived division and
from the supposed personnel
completed projects. assigned to fast
Moreover, the track the
recorded year-end implementation
balances of the funds and
transfer of accomplishment
P492,766.25, have of the projects so
discrepancies of that these projects
P1,175,046.13 from could
the source agency’s immediately
books totaling serve their
P1,667,812.38, purposes to the
caused by non- intended
submission of Fund beneficiaries;
Utilization Report of
the Municipality to c. continue
the respective strengthen
Accounting Offices of partnership with
the source agencies, National
thereby affecting the Government
reliability of the Agencies for the
affected accounts of implementation
the Municipality. of priority
projects
beneficial to the
constituents of
the Municipality;
 and

d. the Municipal
Accountant make
a detailed review
of the recorded
balances of the
fund transfers
from National
Government and
coordinate with
the source
agency’s
accounting office
to determine the
cause/s of the
discrepancies of
P1,175,046.13 in
order to present
the correct
balances in the
books of the
source agencies
as well as in the
books of the
Municipality.
Henceforth,
exercise due
professional care
in submitting the
 fund utilization
reports to the
respective
accounting
offices of the
source agencies
to effect the
correct balances
of the fund
transferred.
15. Local Disaster Risk We recommended
Reduction that the Local Chief
Management Fund Executive direct the:
(LDRRMF) amounting
to a. Municipal
P211,425.00 was Budget Officer to
inappropriately utilized appropriate fund
in the procurement of in the General
computers and printer Fund to restore
including its the amount of
accessories, which LDRRMF
were being used for utilized for the
regular activities of the items procured
Municipal Disaster not related to
Risk Reduction disaster risk
Management Office management; and
(MDRRMO) not afterwards,
related to support
disaster risk b. Municipal
management activities, Accountant and
 contrary to the Municipal
provisions of Treasurer to
Commission on Audit transfer in full the
(COA) Circular No. Cash totaling
2012-002 dated P211,425.00
September 12, 2012 from the books of
and National Disaster General Fund to
Risk Reduction and Special Trust
Management Council Fund, Trust
(NDRRMC), Liabilities-
Department of the DRRM account
Interior and Local as replenishment
Government (DILG), for inappropriate
Department of Budget utilization of the
and Management LDRRMF.
(DBM) and Civil
Service Commission
(CSC) Joint
Memorandum Circular
(JMC) No. 2014-1
dated April 4, 2014,
thereby defeating the
purpose of the fund.

16. Gender and We recommended

Development Plan and that the Local Chief
Budget (GPB) of Executive require
P30,332,215.74 which the Municipal
is less than the required Budget Officer to
five percent of the allocate the required
Municipality’s total five percent of the
budget appropriations total budget
of P979,209,688.05 appropriations for
was not fully utilized, the implementation
thus the genders issues of GAD Plan.
and concerns within the Likewise, direct the
Municipality were not GAD Focal Point
fully addressed to the Officer of the
disadvantage of Municipality to
intended beneficiaries, secure the proper
contrary to Philippine review and
Commission on endorsement of the
Women (PCW) - DILG Region Office
Department of the on the GPB
Interior and Local disclosing the
Government (DILG) - Agency’s programs,
Department of Budget projects and
and Management activities designed to
(DBM) - National address the gender
Economic concerns of its
Development Authority constituents and to
(NEDA) Joint ensure the efficient
Memorandum Circular utilization of the
(JMC) No. 2013-01 resources for the
dated July 18, 2013, as attainment of GAD
amended. Likewise, objectives.
the GPB was not
reviewed and endorsed
to the DILG Provincial
Office, thus identified
GAD activities may not
be supportive of GAD
objectives and
responsive to the
gender issues of its
constituents.

Agency sign off:

________________________________ _____________
Name and Position of Agency Officer Date

Note: Status of Implementation may either be (a) Fully Implemented (FI), (b) On going (O),
(c) Not Implemented (NI), (d) Partially Implemented (PI), or (e) Delayed (D)