EXECUTIVE SUMMARY

Introduction

The Municipality of Alaminos is a third-class Municipality, composed of 15 Barangays and

an agro-industrial town that lies within the third congressional district of the Province of
Laguna. It has a land area of 5,476 hectares and is situated 46 kilometers from Santa Cruz
and 73 kilometers southeast of Manila. The Municipalities of Calauan and Bay are located
north of Alaminos, the City of San Pablo on the south and east and the City of Santo Tomas
in Batangas Province on its west. The Maharlika Highway passes through the Municipality
and is connected directly to Manila through the South Luzon Expressway.

The Organizational Structure of the Municipality is as follows:

a. Key Officials

Municipal Mayor - Hon. Glenn P. Flores

Municipal Vice Mayor - Hon. Victor L. Mitra

Members of the Sanggunian:

1. Hon. Nicole A. Pampolina
2. Hon. Janis Angela J. Ilagan
3. Hon. Bernadeth V. Alvarez
4. Hon. Edgardo R. Briz
5. Hon. Jacklyn A. Villanueva
6. Hon. Juan D. Briz
7. Hon. Jeyson C. Abu
8. Hon. Gorgonio M. Abrigo
9. Hon. Lorenzo B. Zuñiga, Jr. - ABC President
10. Hon. Christian F. Averion - SK Federation President

Municipal Accountant - Mr. Christian Paul M. Malabuyoc

Municipal Treasurer - Ms. Rowena C. Landicho
Municipal Budget Officer - Ms. Irene O. Banawa

b. No. of Personnel Complement

Permanent 90
Temporary 42
Job Order 125
Elected Official 12
Co-Terminus 3
Total 272

Audit Objectives

The objectives of the audit are to: (a) determine the level of assurance that may be placed
on Management’s assertions on the financial statements; (b) verify the propriety of financial
transactions and on a limited extent, determine the level of compliance with applicable laws,
rules and regulations; (c) recommend agency improvement opportunities; and (d) determine
the extent of implementation of prior year’s audit recommendations.

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Scope of Audit

The audit covered the accounts and operations of the Municipal Government of Alaminos,
Laguna for the period January 1 to December 31, 2022. The audit was made in accordance
with International Public Sector Accounting Standards (IPSASs) and we believe that it
provided a reasonable basis for the audit results.

Financial Highlights

For Calendar Year 2022, the Municipality of Alaminos, Laguna generated a total income of
P277,991,484.77 from local taxes, permits and licenses, service and business income and
internal revenue allotment. The total funds utilized for the year amounted to
P196,649,465.44 out of the total appropriation of P302,910,241.21.

The Municipality’s total assets, liabilities, government equity, revenue and expenses for CY
2022 as compared to CY 2021 are as follows:
Increase
Financial Position 2022 2021 (Decrease)
Assets P 635,409,622.57 P 541,364,334.73 P 94,045,287.84
Liabilities 83,307,587.31 73,982,466.05 9,325,121.26
Equity 552,102,035.26 467,381,868.68 84,720,166.58

Financial Performance
Revenue P 277,991,484.77 P 198,255,942.78 P 79,735,541.99
Expenses
Personnel Services 73,937,679.49 67,465,041.80 6,472,637.69
Maintenance and Other
Operating Expenses 96,857,336.12 64,627,165.41 32,230,170.71
Non-Cash Expenses 16,740,011.40 17,731,962.22 (991,950.82)
Net Financial Assistance
Subsidy and Transfers (3,996,735.38) (3,650,965.74) (345,769.64)
Surplus for the Period P 86,459,722.38 P 44,780,807.61 P 41,678,914.77

Independent Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of the presentation of the financial
statements due to the following:

Physical Inventory Plan (PIP) was not immediately prepared and submitted before the
conduct of one-time cleansing of Property, Plant and Equipment (PPE) accounts, resulting
to unfinished physical count of all PPEs as of year-end and precluding the Audit Team to
witness the conduct of entire inventory taking, thus existence, condition and accountability
of all PPEs, excluding Construction in Progress, with a carrying amount of P244,107,157.92
could not be ascertained.

In addition, a discrepancy of P15,600,306.83 was noted between the reported Real

Property Tax (RPT) and Special Education Tax (SET) Receivables and the Certified
Statement of Delinquency as of December 31, 2022, thus casted doubt on the accuracy
and reliability of the reported balances of the Receivable accounts and the related Deferred
Income accounts.

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Moreover, adequate disclosures in the Notes to Financial Statements for various accounts
totaling P92,953,444.60 were not fully provided by the Municipal Accountant, thus limiting
the information intended for financial statement users.

For the exceptions cited above, we recommended that the Municipal Mayor:

1. direct the Inventory Committee to prepare the supplemental PIP that shall contain the
specific assignments/duties of the Committee members, the cut-off date and a schedule
specifying the dates and locations of the inventory taking activities in order to finish the
physical count of PPEs and submit the same before the conduct of one-time cleansing
in order for the Audit Team to witness the conduct of entire inventory taking, in
accordance with Commission on Audit (COA) Circular No. 2020-006, to ascertain the
existence, condition and accountability of all PPEs.

2. direct the Municipal Accountant and Municipal Treasurer to:

a. identify the causes of the noted discrepancies and immediately make necessary
adjustments between their records; and

b. in coordination with the Municipal Assessor, conduct regular reconciliation of

records to correct any discrepancies immediately and ensure that the year-end
balances of their records are reconciled and consistent with each other.

3. require the Municipal Accountant to disclose the required supporting information in the
Notes to Financial Statements in accordance with International Public Sector
Accounting Standards (IPSASs) for the ensuing year.

Other Significant Observations and Recommendations

Summarized below are the other significant audit observations and recommendations in the
audit of the Municipality of Alaminos for the year 2022:

1. The accuracy and reliability of Cash in Bank – Local Currency, Current Account are
doubtful since two bank accounts with a total balance of P33,950.00 were not recorded
by the Municipal Accountant and the Municipal Treasurer, contrary to IPSASs No. 1,
thus understatement of both Cash in Bank – Local Currency, Current Account and
Government Equity by P33,950.00. Moreover, there were delays in the preparation and
submission of Bank Reconciliation Statements (BRS), contrary to COA Circular No. 96-
011, thus affecting the timely review of the financial accounts of the Municipality and the
communication of deficiencies, if there is any.

We recommended that the Municipal Mayor direct the Municipal Accountant and the
Municipal Treasurer to secure the necessary documents, identify the purpose and
record the two bank accounts with a total balance of P33,950.00.

We also recommended that the Municipal Mayor instruct the Municipal Accountant to
prepare and submit BRS to the Office of the Auditor within 10 days from receipt of the
Bank Statements, in compliance with COA Circular No. 96-011.

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2. Balances of fund transfers from various National Government Agencies (NGAs) totaling
P208,966.26 were not immediately returned to concerned Source Agencies (SAs) after
completion/implementation of the pertinent programs, projects and activities (PPAs),
contrary to COA Circular No. 94-013. Moreover, fund transfers from various SAs
totaling P4,553,237.76 remained not fully utilized as of December 31, 2022, hence,
defeated the purposes of funds and deprived the Municipality and its constituents of the
expected benefits from the timely implementation of PPAs.

We recommended that the Municipal Mayor instruct the Municipal Treasurer to return
the unused balance of P208,966.26 to its respective NGAs which can be valuable
addition to the limited funds available for distribution to other government agencies.

We also recommended that the Municipal Mayor, in coordination with the assigned focal
persons to fast track the implementation of the PPAs incorporated in the fund transfers
received from NGAs so that the Municipality and its constituents will benefit from the
timely completion/implementation of those PPAs. Otherwise, we recommended the
return of the unutilized amount to the SAs so it can be distributed to other government
agencies with urgent need of fund.

3. Purchase Orders (POs) and Notices of Delivery with a total contract amount of
P13,192,267.66 for Calendar Year (CY) 2022 were not submitted to the Office of the
Auditor within the prescribed period, contrary to Item 3.2.1 of COA Circular No. 2009-
001 and Item A(2) of COA Circular No. 96-010, thus causing undue delay in the review
and evaluation process and hindered the communication of any defects/deficiencies
found thereon. Moreover, several POs were not sufficiently filled up and are lacking vital
information, contrary to Section 37 of the Manual on the New Government Accounting
System (MNGAS) for Local Government Units (LGUs), Volume II and Item B of COA
Circular No. 96-010, thus affected the determination of the suppliers’ compliance with
the terms and conditions of the contract.

We recommended that the Municipal Mayor direct the Municipal General Services
Officer (GSO) to:

a. furnish the Office of the Auditor with a copy of PO, irrespective of amount and each
of every supporting document, within five working days from the issuance thereof, in
compliance with Item 3.2.1 of COA Circular No. 2009-001;

b. notify the Office of the Auditor of the time and date of every scheduled delivery of
procured items within 24 hours from its acceptance, in compliance with Item A(2) of
COA Circular No. 96-010.

c. complete the lacking information from the noted POs to avoid the issuance of Notice
of Suspension; and

d. adhere with Item B of COA Circular No. 96-010 on the preparation of PO complete
with all the necessary information pertaining to the procurement to ensure that the
supplier will deliver the items in accordance with the terms and conditions of the
contract.

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4. Payment for fuel, oil and lubricants totaling P4,588,345.63 were not supported with
properly accomplished driver’s trip tickets, and monthly report of official travels to
substantiate the authenticity of the use of diesel/gasoline for official travels undertaken,
contrary to COA Circular No. 77-61 or the “Manual on Audit for Fuel Consumption of
Government Motor Vehicles”, thereby casting doubt as to reasonableness and propriety
of the total fuel expenses recorded in the books.

We recommended that the Municipal Mayor instruct the:

a. Municipal Accountant and the Municipal GSO to verify and ascertain that payments
for fuel, oil and lubricants are duly supported with completely filled up driver’s trip
tickets for proper evaluation on the propriety and reasonableness of fuel
consumption;

b. Vehicle drivers concerned to completely fill up or indicate the following data or

information on the Driver’s Trip Ticket:

1. Time of departure and arrival of the trip

2. Balance in tank at the beginning and end of the trip
3. Distance travelled
4. Odometer reading
5. Liters of gasoline purchased and consumed for the trip
6. Name of passengers and their respective signatures

c. Vehicle drivers concerned to prepare on a monthly basis, the Monthly Report of

Official Travels for proper analysis, verification and the necessary audit action on
fuel consumption.

5. Adequate detailed engineering activities were not conducted for four development
projects with a total budget of P5,900,000.00, contrary to Annex “A” of the 2016
Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184,
resulting in delay of the completion of the said projects.

We recommended that the Municipal Mayor instruct the Municipal Engineer to conduct
adequate detailed engineering activities in accordance with the provisions of Annex “A”
of the Revised IRR of RA No. 9184 to ensure that plans are well prepared to minimize
problems in the implementation of development projects.

6. The Municipality of Alaminos was not able to prepare contract of services,

memorandum of agreement (MOA) and job order between the Municipality and the
individual, contrary to Civil Service Commission (CSC) Resolution No. 02-0790 thus,
may result to the inclusion of prohibited stipulation and non-compliance with the
guidelines of the Resolution.

We recommended that the Municipal Mayor direct the Human Resource Management
Officer to:

a. prepare the contract of services, MOA and job order between the Municipality of
Alaminos and the individual; and

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 b. strictly adhere with the provisions of CSC Resolution No. 02-0790 regarding policy
guidelines for contract of services, MOA and job order.

7. The Municipality was not able to optimally utilize its 20 percent Development Fund, as
only P27,383,057.40 or 40.55 percent of the total fund of P67,520,936.99 were utilized
for Calendar Year (CY) 2022, contrary to Items 3.2.1 to 3.2.3 of the Department of
Budget and Management (DBM), Department of Finance (DOF), Department of the
Interior and Local Government (DILG), Joint Memorandum Circular (JMC) No. 2020-1,
thus depriving the intended beneficiaries of the optimum benefits and services that can
be derived therefrom.

We recommended that the Municipal Mayor direct the Municipal Planning and
Development Coordinator and other concerned officials to:

a. effectively plan the priority development PPAs to be included in the Annual

Investment Plan by considering its feasibility and necessity and strictly follow the
implementation timeframe for monitoring purposes; and

b. optimize the utilization of the 20 percent Development Fund to help attain desirable
socio-economic development and environmental outcomes of the Municipality, in
accordance with Items 3.2.1 to 3.2.3 of the DBM-DOF-DILG JMC No. 2020-1.

8. The unutilized balance of the Local Disaster Risk Reduction and Management Fund
(LDRRMF) totaling P2,397,383.56 which have been outstanding for more than five
years was not reverted back to the Unappropriated Surplus of the General Fund,
contrary to Section 5.1.13 of COA Circular No. 2012-002, thus limiting the fund that
should have been available for current appropriation.

We recommended that the Municipal Mayor direct the Municipal Accountant to revert
the unexpended balance of P2,397,383.56 back to the Unappropriated Surplus of the
General Fund, in compliance with Section 5.1.13 of COA Circular No. 2012-002 dated
September 12, 2012.

9. The Gender and Development (GAD) Accomplishment Report (AR) submitted were not
supported with the required documents, contrary to Philippine Commission on Women
(PCW), Department of the Interior and Local Government (DILG), Department of
Budget and Management (DBM), National Economic and Development Authority
(NEDA), Joint Memorandum Circular (JMC) No. 2013-01, as amended by PCW-DILG-
DBM-NEDA JMC No. 2016-01, thus precluded the assessment and evaluation of the
reported accomplishments.

We recommended that the Municipal Mayor direct the GAD Focal Person to include in
the submission of the GAD AR the documents enumerated in Item 4.C.8(5) of PCW-
DILG-DBM-NEDA JMC No. 2013-01, as amended by PCW-DILG-DBM-NEDA JMC No.
2016-01, to facilitate the assessment and evaluation of reported accomplishments.

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Summary of Total Suspensions, Disallowances and Charges as of Year-End

The Statement of Audit Suspensions, Disallowances and Charges (SASDC) as of

December 31, 2022 showed no audit suspension, disallowance and charge.

There was no information available as to the Municipality’s suspensions, disallowances and

charges prior to the implementation of the Rules and Regulations on the Settlement of
Accounts (RRSA) prescribed under COA Circular No. 2009-006 dated September 15, 2009.

Status of Implementation of Prior Year’s Audit Recommendations

Of the 29 audit recommendations embodied in the Calendar Year (CY) 2021 Annual Audit
Report (AAR), 23 were fully implemented, two were partially implemented and four were not
implemented by the Municipality of Alaminos.

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