1.

The barangay was not able to comply with the transition provision on the phased
recognition of the Local Road Networks in the books of accounts which requires 75%
compliance at the end of year 2018 as stated under Item IX of COA Circular No.
2015-008 due to the absence of Local Road Inventory and Road Map, resulting in
understatement of the assets reflected in the financial statements.

1.1 COA Circular No.2015-008 dated November 23, 2015 prescribes the Accounting and
Reporting Guidelines on the Local Roads Asset Management System. Item IV of the
said Circular states that “Public Infrastructures shall form part of and be recorded in
the books as Property, and Equipment, Public infrastructures include among others
the road network system.”

1.2 In addition, Items VI and VII of the same Circular mandate the General Services
Officer to maintain a Local Road Inventory and Road Map and the Municipal
Accountant to disclose in the Notes to Financial Statements the total road network
system of the municipality. The transition provision under Item IX presents the
timetable of the phased conversion of the Local Road Networks to be made within
four years at the following targets:

1. End of 2016 – 25%

2. End of 2017 – 50%
3. End of 2018 – 75%
4. End of 2019 – 100%

1.3 Likewise, Annex B of COA Circular No. 2015-009 provides the description of the
Revised Chart of Accounts for Local Government Units (LGUs), particularly the
Road Networks (Account No. 1-07-03-010) which shall be used to record the cost
incurred in the purchase or construction or fair value, if acquired through donations or
transfers without cost of roads, highways and bridges, railways, subways, and other
road network facilities such as footbridge, traffic lights and road signages for public
use.

1.4 Our verification of records showed that there was no recorded Public Infrastructure
Assets-Road Networks in the books of accounts of the barangay.

1.5 Inquiry with the concerned Accounting Officer disclosed that there were no
subsidiary records being maintained yet for roads and road components for every road
network as required in the aforementioned Circular.

1.6 Likewise, the Punong Barangay admitted that they were not able to conduct an
inventory of the road network, hence, were not able to prepare a Local Road
Inventory and Road Map as at year-end as the basis for compliance with the
requirement of the aforementioned COA Circular. In the absence of such inventory,
the phased conversion would not be complied with.

1.7 We recommended that the Punong Barangay to:

 a. Coordinate with the Municipal Engineering Office and Municipal Assessor’s
Office on the preparation of the road map of the barangay, including the
determination of the land value of the road networks to facilitate the
preparation of a proper inventory and reporting of the barangay’s road
network system;

b. Create a Committee to undertake the inventory of barangay road networks

including the segregation of the road components for road projects; and
thereafter, for submission the Municipal Accountant for recording purposes.

The barangay did not fully utilize the PhilGEPS (Philippine Government Electronic Procurement
System) in its procurement activities and as a consequence Invitation to Bid for projects
implemented in CY 2015 to CY 2018 were not posted in the PhilGEPS Electronic Bulletin Board
contrary to Section 8.1.1 of the IRR of R.A. No. 9184 and Executive Order No. 17 series of 2011.

4.1 Section 8.1.1. of the Implementing Rules and Regulations of RA 9184 provides that:

“To promote transparency and efficiency, information and communications

technology shall be utilized in the conduct of procurement procedures. Accordingly,
there shall be a single portal that shall serve as the primary source of information on
all government procurement. The PhilGEPS shall serve as the primary and definitive
source of information on government procurement xxx.”

4.2 Section 5 of Executive Order No. 17 series of 2011 states among others that:

“All government procuring entities are mandated to use the PhilGEPS in its
procurement activities, and shall post all opportunities, notices, awards, and
contracts in it as the central portal of government procurement transactions in
accordance with R.A. 9184 and its IRRs”.

4.3 Our audit revealed that the barangay did not post its procurement activities in the
PhilGEPS. Invitations to Bid were only posted into conspicuous places within the
barangay premises.

4.4 Because of non posting of the Invitation to Bid in PhilGEPS, it could not be ascertained
whether the procurement process for the barangay projects was conducted in the most
transparent and competitive manner.

4.5 We recommended that the Barangay make full use of the PhilGEPS, subsequently,
all procurement activities should be posted in the said system, in accordance with
 Section 8.1.1 of the Implementing Rules and Regulations of RA 9184 and Section 5
of Executive Order No. 17 series of 2011.

5. The annual GAD Plan and Budget (GPB) was not reviewed and approved by the DILG
Regional Office as provided under PCW-DILG-DBM-NEDA Joint Memorandum
Circular No. 2013-01, thus, identified programs, projects and activities cannot be
ascertained whether it is in response with the gender issues and concerns of the locality.

5.1 The PCW-, DILG-DBM-NEDA & DBM Joint Circular No. 2013-01 dated July 18, 2013,
as amended by Joint Memorandum Circular No. 2016-01 dated January 12, 2016, item
C6(4) states, among others that:

“Barangays shall submit their GPBs to the C/MPDO to ensure the alignment of
the barangay GAD PPAS with the priorities of the city/municipality and then from the
C/MPDO submit the same to the C/MLGOO for its review and endorsement. Reviewed
and endorsed GPBs shall be returned to the concerned barangays, for incorporation in
their Annual Budgets.”

5.2 The Circular prescribe guidelines and procedures for the formulation, development,
submission, implementation, monitoring and evaluation including accounting of results
of agency annual GAD plans and budgets (GPBs), and GAD accomplishment reports
(AR); and provide the mechanics for the development of programs, activities and projects
(PAPs) to respect, protect and fulfill the rights of women at the socio-cultural, economic
and political spheres.

5.3 Records showed that although the annual GAD Plan and Budget (GPB) of the barangay
for CY 2018 was not submitted for review and approval by the DILG Regional Office.
Also, the GPB was not prepared in conformity with the prescribed form as it did not
indicate some vital information on gender issues, cause of the gender issue and
performance indicator which are necessary for the proper evaluation and monitoring of
programs and activities concerning gender development.

5.4 Upon review, the GAD Fund for programs and activities on health services, indigency
program, peace and order, and social services. These programs may have focus common
gender needs but cannot be ascertained whether it is in response or addressed gender
issues and concerns of the locality.

5.5 We recommended that the management comply with the provisions of PCW-DILG-
NEDA-DBM Joint Circular No. 2013-01 dated July 18, 2013 on the preparation,
review and approval of GAD Plan and Budget. The GAD Focal Person is advised to
monitor and evaluate the implementation of programs and activities of the
approved GPB.
The validity and correctness of Due from LGUs amounting to P12,146.91 could not be
ascertained due to the absence of pertinent records or documents to substantiate them
contrary to Section 2 and 111(2) of P. D. 1445.

6.1 Section 2 of P. D. 1445 states that:

“It is the declared policy of the State that all resources of the government shall be
managed, expended or utilized in accordance with law and regulations, and safeguarded
against loss or wastage through illegal or improper disposition, with a view to ensuring
efficiency, economy and effectiveness in the operations of government. The responsibility
to take care that such policy is faithfully adhered to rests directly with chief or head of
the government agency concerned.

6.2 Section 111 (2) provides that:

“The highest standards of honesty, objectivity and consistency shall be observed

in the keeping of accounts to safeguard against inaccurate or misleading information.”

6.3 Review of the Financial Statements of the Barangay for CY 2018 disclosed that Due from
LGUs amounting to P12,146.91 remained outstanding as of December 31, 2018.

6.4 Further review revealed that the balance was outstanding since 2012 and there were no
records, subsidiary ledgers, and other pertinent records to support the above amount,
hence, its validity and propriety could not be ascertained.

6.5 This is a prior year’s audit recommendation where no action has been taken by the
concerned officials.

6.6 We recommended that concerned officials exert efforts to document the dormant
receivables of P12,146.91 to establish the validity and propriety of the account and
issue/send demand letters, if warranted, to enforce collection.

6.7 Management agreed to implement the audit recommendation.

7. Accounts Payable in the amount of P1,548.23 as of December 31, 2018 was not properly
supported with documents contrary to Section 40, Book VI of the Revised
Administrative Code, thus casting doubt on their validity and correctness.

7.1 Section 40, Book VI of the 1987 Revised Administrative Code provides that,
 “No obligation shall be certified accounts payable unless the obligation is funded
on a valid claim that is properly supported with sufficient evidence and unless there is
proper authority for its incurrence. Any certification for non-existent or fictitious
obligations and/or creditor shall be considered void.

7.2 Verification of the financial statements showed that the Accounts Payable had a balance
of P1,548.23 prior to 2018.

7.3 It was also observed that there were no subsidiary ledgers and or schedule to support the
Accounts Payable account hence, the creditors cannot be identified.

7.4 The absence of identified creditors hindered the audit team to confirm/verifies the
existence and validity of said obligations.

7.5 Likewise, it is emphasized that liabilities are recognized only when goods are
delivered/services rendered and the presence of bills issued by the suppliers/creditors.
From the foregoing, Subsidiary Ledgers are prepared/ maintained to control the same.

7.6 This is a prior year’s audit recommendation where no action has been taken by the
concerned officials

7.7 We recommended that the Barangay Treasurer and/or the Record Keeper verify
and trace the possible origin of the documents as basis in recording the Accounts Payable.
Otherwise, require the Municipal Accountant to revert the same to the unappropriated
surplus of the barangay.