EXECUTIVE SUMMARY

A. Introduction

The Metropolitan Manila Development Authority (MMDA) was created under

Republic Act (RA) No. 7924 on March 1, 1995, based on the policy of the State to treat
Metropolitan Manila as a special development and administrative region wherein certain
basic services affecting or involving Metro Manila as metro-wide services were more
efficiently and effectively planned, supervised and coordinated by a development
authority as created therein, without prejudice to the autonomy of the affected local
government units.

Under the said Act, the MMDA shall perform planning, monitoring and
coordinative functions, and in the process exercise regulatory and supervisory authority
over the delivery of metro-wide services within Metro Manila without diminution of the
autonomy of the local government units concerning purely local matters.

Metro-wide services under the jurisdiction of the MMDA are those services which
have metro-wide impact and transcend legal political boundaries or entail huge
expenditures such that it would not be viable for said services to be provided by the
individual local government units (LGUs) in the Metropolitan Manila. These services
shall include the following key areas:

 Development Planning;
 Transport and Traffic Management;
 Solid Waste Disposal and Management;
 Flood Control and Sewerage Management;
 Urban Renewal, Zoning and Land Use Planning and Shelter Services;
 Health Sanitation, Urban Protection and Pollution Control; and
 Public Safety.

The MMDA is presently chaired by Mr. Danilo Delapuz Lim. He is assisted by

Deputy Chairman, Asec. Frisco S. San Juan, Jr. and General Manager Usec. Jose Arturo
S. Garcia, Jr. The MMDA is composed of the following offices:

Office Name of Official

Office of the Assistant General Manager for Operations AGM Roberto T. Almadin
Solid Waste Management Office Dir. Elsie I. Encarnacion
Traffic Discipline Office Dir. Neomie T. Recio
Health Public Safety and Environment Protection Office Dir. Ma. Loida L. Alzona
Flood Control and Sewerage Management Office Dir. Baltazar N. Melgar
Office of the Assistant General Manager for Finance and Atty. Romando S. Artes
Administration
Finance Service Dir. Maria Carolina M. Salgado

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 Office Name of Official
Administrative Service Dir. Lydia P. Domingo
Office of the Assistant General Manager for Planning AGM Jose V. Campo
Metropolitan Development Planning Service Mr. Jose Reynaldo B. Lunas
Physical Planning and Spatial Development Service Dir. Michael M. Gison

As of December 2019, the MMDA has a total personnel complement of 8,000,

consisting of seven presidential appointees, 16 co-terminus, 34 consultants, 2,902
permanent, 1,397 casual, five temporary, 2,897 job order (JO) employees and 742
personnel hired under the Out-of-School Youth Serving Towards Economic Recovery
(OYSTER) Program.

B. Financial Highlights

The MMDA received a total appropriation/allotment of P7,153,031,020.00 sourced

from GAA FY 2019 and local funds per MMC-MMDA Resolution No. 18-22 Series of
2018. Of the total allotments, P6,179,563,651.40 was obligated, leaving an unobligated
balance of P973,467,368.60. Details are shown below:
Obligations Unobligated Allotment
Source of Appropriations Allotments Disbursement
Incurred Total Extended
Funds
(Amounts in Php)
A. CURRENT YEAR
I. Agency Specific Budget
PS 47,909,000.00 47,909,000.00 47,854,432.00 47,299,432.00 54,568.00 54,568.00
MOOE 1,641,608,000.00 1,641,608,000.00 1,591,851,133.00 1,407,693,803.00 49,756,867.00 49,756,867.00
CO 1,677,436,000.00 1,677,436,000.00 1,413,068,380.00 453,533,140.00 264,367,620.00 264,367,620.00
3,366,953,000.00 3,366,953,000.00 3,052,773,945.00 1,908,526,375.00 314,179,055.00 314,179,055.00
II. Automatic Appropriations
RLIP – PS 4,401,000.00 4,401,000.00 4,391,852.00 4,391,852.00 9,148.00 9,148.00
4,401,000.00 4,401,000.00 4,391,852.00 4,391,852.00 9,148.00 9,148.00
III. Special Purpose Fund (SPF)
MPBF - PS 2,457,724.00 2,457,724.00 2,457,724.00 2,457,724.00 0.00 0.00
PGF - PS 3,463,296.00 3,463,296.00 3,463,291.00 3,415,878.00 5.00 5.00
CF - MOOE 18,429,000.00 18,429,000.00 15,600,000.00 15,600,000.00 2,829,000.00 2,829,000.00
24,350,020.00 24,350,020.00 21,521,015.00 21,473,602.00 2,829,005.00 2,829,005.00
Sub-total 3,395,704,020.00 3,395,704,020.00 3,078,686,812.00 1,934,391,829.00 317,017,208.00 317,017,208.00
B. LOCAL FUNDS
PS 1,545,324,875.53 1,545,324,875.53 1,501,367,646.79 1,428,741,123.30 43,957,228.74 43,957,228.74
MOOE 1,762,002,124.47 1,762,002,124.47 1,563,732,501.08 1,461,021,471.88 198,269,623.39 198,269,623.39
CO 450,000,000.00 450,000,000.00 35,776,691.53 8,112,649.35 414,223,308.47 414,223,308.47
Sub-total 3,757,327,000.00 3,757,327,000.00 3,100,876,839.40 2,897,875,244.53 656,450,160.60 656,450,160.60
TOTAL 7,153,031,020.00 7,153,031,020.00 6,179,563,651.40 4,832,267,073.53 973,467,368.60 973,467,368.60

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 The MMDA’s comparative financial condition and financial performance for
Calendar Years (CY) 2019 and 2018 are as follows:

2018 Increase/
2019
Particular (Restated) (Decrease)
(In PhP)
Financial Condition
Assets 16,777,119,875.83 14,965,492,239.12 1,811,627,636.71
Liabilities 1,851,746,520.56 1,715,567,822.89 136,178,697.67
Net Assets/Equity 14,925,373,355.27 13,249,924,416.23 1,675,448,939.04
Financial Performance
Revenue 755,334,629.31 598,142,832.29 157,191,797.02
Expenses 5,915,192,198.21 5,415,446,184.78 499,746,013.43
Surplus/(Deficit) from (5,159,857,568.90) (4,817,303,352.49) (342,554,216.41)
Current Operations
Other Non-Operating 500,000.00 14,016,077.54 (13,516,077.54)
Income and Losses
Net Gain/Loss (7,329,054.02) (7,073,879.73) (255,174.29)
Net Financial 6,842,135,561.96 5,787,716,109.50 1,054,419,452.46
Assistance/Subsidy
Surplus/Deficit for the 1,675,448,939.04 977,354,954.82 698,093,984.22
period

C. Operational Highlights

The Agency’s reported targets and actual accomplishments measured in terms of its
major final outputs (MFOs) are as follows:

Key-Result Areas/
Performance
Programs and Target Accomplishment Variance
Indicators
Projects
MFO 1: Safe and Well Maintained Sanitary Landfill
Ecological, safe and Available capacity Available space for 16 years 6 years
efficient solid waste of current landfill 10 years
disposal and space
management Percentage of solid 57% diversion rate 44.52% (12.48%)
ensured waste diverted as a
result of recycling
activities of LGUs
Percentage of 100% 100% -
compliance of
landfills of ECC
requirements and
other environmental
regulations
Percentage of daily 100% 100% -
reports on sanitary
landfills filled

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Key-Result Areas/
Performance
Programs and Target Accomplishment Variance
Indicators
Projects
Number of 12 MMT meetings 96 MMDA inspections 84
monitoring activities and inspections
conducted by
MMDA and Multi-
Partite Monitoring
Team (MMT) to
ensure operational
environmental
compliance
Number of 240 seminars 256 16
information,
education campaign
on solid waste
management
conducted
MFO 2: Traffic and Transport Management Services
Safe and Smooth Average travel time 2.44 mins/km Average travel time of 2.57 (0.13)
flow of traffic in in major mins/km min/km
Metro Manila thoroughfares
thoroughfares Average time to 15 mins 15 mins -
assured resolve traffic
obstruction along
Metro Manila major
thoroughfares
Percentage decrease 20% 53.66% 33.66%
of corruption
reported in traffic
operations
Percentage of traffic 100% 100% -
obstructions/
accidents reports
responded to within
fifteen (15) minutes
Number and 100% (2,300 traffic 99.13% (2,280 traffic (0.87%)
percentage of traffic constables) enforces)
constables deployed
at designated major
intersections and
thoroughfares at all
times
Percentage of 97% 97% -
reliability of traffic
signal lights
countdown timers
and CCTVs
MFO 3: Reduction of Flooding in Flood Prone Areas in Metropolitan Manila
Flood Mitigation Time of flood water Within 18 mins or Within 15 to 30 mins.
assured subsidence (for less
rainfall intensity of
less than 40mm/hr)
Percentage decrease 30% 33.54% 3.54%
in flooded areas

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 Key-Result Areas/
Performance
Programs and Target Accomplishment Variance
Indicators
Projects
Percentage 100% 100% -
reliability of all
pumping stations
and Effective Flood
Control Operation
System
Percentage of 100% 112.97% 12.97%
waterways and
drainage systems
declogged and
desilted
Projects completed 100% 0% (100%)
prior to on-set of
rainy season

Under MFO 1: Safe and Well Maintained Sanitary Landfill (SLF), the diversion
rate that was achieved at their level was only 44.52% as of September 20, 2019,
consultative meeting. To ensure operational environmental compliance, Solid Waste
Management Office (SWMO) has conducted a total of 96 regular inspections conducted
by MMDA personnel for CY 2019.

Under MFO 2: Traffic and Transport Management Services, target average travel
time of 2.44 mins/km was not achieved by MMDA due to the uncontrolled increase in the
volume of motorized vehicles simultaneous with the construction of flagship projects of
Department of Public Works and Highways (DPWH), Department of Transportation
(DOTr) and rehabilitation of several roads and bridges within Metro Manila.

The target number of 2,300 Traffic Enforcers was not achieved due to the non-
renewal of contract of Job Order personnel, retirement, resignation and termination of
some traffic personnel.

Under MFO 3: Reduction of Flooding in Flood Prone Areas in Metropolitan

Manila, several situations and circumstances, such as the time elapsed between the
preliminary engineering studies and the procurement process, unforeseen events and
issues which tend to occur affecting the supposed smooth implementation of the projects
hindered the 100% attainment of the completion of projects prior to on-set of rainy
season.

D. Scope and Objectives of Audit

The audit covered the review of accounts and financial operations of the Agency
for CY 2019 and to a limited extent, its reported accomplishments. The audit was
conducted to (a) verify the levels of assurance that may be placed on the Management’s
assertions on the financial statements; (b) determine the propriety of transactions as well as
the extent of compliance with applicable laws, rules and regulations; (c) recommend

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agency improvement opportunities; and (d) determine the extent of implementation of
prior years’ audit recommendations.

E. Independent Auditor’s Report

The Auditor rendered an Unqualified Opinion on the fairness of the presentation

of MMDA’s financial statements as of December 31, 2019.

F. Summary of Other Significant Observations and Recommendations

The other significant findings and recommendations, which are discussed in detail
in Part II of this Report, are as follows:

1. There were total misstatements of P19,391,501.85 due to the following accounting

errors and omissions affecting some accounts in the Financial Statements as of
December 31, 2019 of MMDA: (Observation No. 1)

a) Unreleased checks not reverted to Cash balance – P1.521 million

b) Net overstatement in Property, Plant and Equipment carrying value due to error
in computation of depreciation - P0.296 million
c) Unrecorded deliveries during the year covered with delivery receipts, invoices
and certificate of inspection and acceptance – P0.641 million
d) Existence of dormant abnormal/negative balance on Due to Pag-IBIG Account –
P16.934 million

We recommended and Management agreed to: a) direct the Chief Accountant to

effect the necessary adjusting entries for all unreleased checks at the end of the year
to recognize the restoration of the cash equivalent and the recognition of the
appropriate liability/payable account; and direct the Treasury Department to ensure
the completeness of submitted Schedule of Unreleased Commercial Checks at year-
end and improve coordination with the Accounting Division regarding the same; b)
direct the Chief Accountant to make the necessary accounting entries to recognize
the correct depreciation of Property, Plant and Equipment; c) direct the Chief
Accountant to effect the necessary adjustments in the books of accounts to reflect
the correct balances of the Account Payables and the respective expense accounts;
and implement a reliable system/control on the monitoring of submission of
documents by various offices to adhere with the deadlines of submission of various
documents, most particularly those set by Accounting Division to facilitate timely
recording of payables; and d) facilitate an extensive verification, analysis and
review of the negative balance of account Due to Pag-IBIG in the Financial
Statements and adjust appropriately, the identified reconciling items to bring the
account to its correct balance; strictly follow the guidelines prescribed under COA
Circular 97-001 on the proper disposition/closure of dormant funds/accounts of the

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 National Government Agencies; and likewise, designate a personnel that will be in-
charge in the regular analysis of the account to prevent the occurrence of the
undetected/unrectified errors.

2. Out of the total authorized budget of P7,153,031,020.00 received by MMDA in CY

2019, the amount of P6,179,563,651.40 or 86.39% was obligated, indicating a
reasonably high obligation-over-allotment rate. Moreover, of the total allotment,
P4,832,267,073.53 or 67.56% was actually disbursed due to delayed/non-
implementation of projects and procurement activities. (Observation No. 3)

We reiterated our previous recommendation and Management agreed to maximize

their efforts, and thus, hasten the disbursements of its funds, particularly capital
outlays caused by delay/non-implementation of projects and procurement activities
by promptly initiating and improving the procurement timelines, activities and
processes, among others, thus, improving its budget utilization and prevent the
accumulation of unobligated allotments as well as to ensure timely implementation
and completion of projects.

3. Various Traffic Engineering Center (TEC) projects totaling P810.393 million were
not implemented/completed within the specific contract time due to inadequate
planning and absence of coordination mechanism with the concerned LGUs,
communities and other agencies thereby, depriving the target communities of the
immediate benefit/use of the facilities, which is the safe and convenient movement
of persons and goods in particular. Moreover, a footbridge project with a budgeted
amount of P8.400 million was not implemented due to the absence of procurement
timelines in the Annual Procurement Plan (APP) and delays in the conduct of
procurement. (Observation No. 4)

We recommended and Management agreed to: (a) require Bids and Awards
Committee (BAC) Secretariat through BAC to include the Schedule of
Procurement Activities in the preparation of APP for CY 2020 and onwards in
accordance with Section 7 of RA No. 9184 and Government Procurement Policy
Board (GPPB) Resolution No. 20-2015; (b) improve procurement activities for the
timely prosecution and completion of its TEC projects; and (c) ensure full
coordination with other government agencies, among others, the DPWH and the
LGUs, as well as the community and private utilities, for a more effective and
synchronized planning of programs and projects.

4. Fifty-nine (59) of the 108 programmed flood control projects for CY 2019 with a
total cost of P639.561 million were not completed due to the absence of
procurement timelines in the APP and delays in the conduct of procurement.
Moreover, various projects totaling P500.368 million were not
completed/implemented within the specific contract time due to inadequate
planning and absence of coordination mechanism with the other concerned

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 agencies and stakeholders, which hindered the MMDA in attaining its objective to
mitigate flooding in the Metropolis. (Observation No. 5)

We recommended and Management agreed to: (a) require BAC Secretariat through
BAC to include the Schedule of Procurement Activities in the preparation of APP
for CY 2020, and onwards in accordance with Section 7 of RA No. 9184 and GPPB
Resolution No. 20-2015; (b) faithfully comply with the procurement
timelines/period prescribed under Section 38.1 of RA No. 9184; (c) expedite the
implementation of procurement activities for the timely prosecution and completion
of its flood control projects wherein procurement activities should be done as early
as the first quarter to ensure that completion of flood control projects before the
onset of the rainy seasons which normally starts in June and onwards; (d) improve
coordination with other government agencies, among others, the DPWH and the
LGUs, as well as the community and private utilities, thru regular meetings with
their respective focal persons, for a more effective and synchronized planning of
programs and projects; and (e) issues like relocation of informal settlers, viability of
the project sites and overlapping of projects with DPWH and LGUs should be
addressed and resolved during the feasibility or preliminary engineering study prior
to project implementation to arrive at decisions most advantageous to the
government.

5. The Agency’s Accountable Officers (AOs) were not compliant with the preparation
and accomplishment of the reports and/forms prescribed under Sections 32, 35 and
37 of Chapter 6, Volume I of the Government Accounting Manual for National
Government Agencies (GAM for NGAs) to determine/establish cash
accountabilities as Special Disbursing Officers (SDOs) and Petty Cash Fund
Custodians (PCFC) at any given time. (Observation No. 6)

We recommended and Management agreed to: (a) require the SDOs and PCFCs to
prepare and maintain a Cash Disbursement Record (CDRec) and Petty Cash Fund
Record (PCFR), in compliance with Sections 32 and 37, Chapter 6, Volume I of the
GAM for NGAs in recording all cash transactions on a daily basis, and foot, close
and certify the balance at the end of each month; (b) require all PCFCs to require
Petty Cash Voucher (PCV), duly signed/certified by authorized officials and
acknowledged by payee, before effecting payments out of the Petty Cash Fund
(PCF); (c) refrain from delegating duties and responsibilities of an AO to an
employee not designated as such which constitutes a weakness in internal control
and may result to loss or misappropriation of government funds; (d) direct the AOs
to settle/liquidate immediately their cash advances by submitting the liquidation
reports within the reglementary period when the purpose for which the cash
advances were granted had been served; (e) refrain from granting cash advances
unless the previous cash advance was already liquidated and accounted for in the
books; and (f) regularly monitor and review the liquidations of the cash advances of
the AOs as to avoid delays.

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6. Non-compliance with rules and regulations in the granting, utilization and
liquidation of cash advances resulted in (a) existence of long-outstanding balances
of P4.205 million and delay in the liquidation of advances totaling P58.676 million,
(b) use of cash advance for expenses which may practically be paid by check
amounting to P20.939 million, and (c) cash advances which exceeded the fund
requirements and failure to return the unexpended balance of P0.787. (Observation
No. 7)

We recommended and Management agreed to: (a) require the concerned AOs to
immediately liquidate their outstanding cash advances and to submit liquidation
reports within the prescribed period, otherwise, continued failure to do so, the Audit
Team will be constrained to advise the Head of Agency to cause or order the
withholding of the payment of any money due the AO in accordance with Section
9.3 of COA Circular No. 97-002 dated February 10, 1997; (b) exert extra efforts to
locate the whereabouts of the AOs with long outstanding cash advances and
exhaust all available options towards the settlement of their accountabilities; (c)
limit the amounts of cash advances for activities of the Agency undertaken in the
field to requirements of two months; (d) refund immediately the unexpended
balance upon completion of the purpose it was intended; (e) require the Accounting
Division to closely monitor liquidation of cash advances; (f) require the concerned
offices to properly plan logistical requirements for the various activities of the
Agency in order to procure them following the procedures prescribed under RA No.
9184; and to avoid the use of cash advances for the procurement thereof; and (g)
direct the SDO to submit the lacking documents as required under COA Circular
2012-001 dated June 14, 2012.

7. Despite prior years’ recommendations, the Agency has yet to comply with the
submission of the required financial reports/records with supporting transaction
documents, contracts/purchase orders and notices/certificates of acceptance of
deliveries within the prescribed period/deadlines which prevented the Audit Team
from the timely conduct of audit and evaluation of financial accounts and
transactions. (Observation No. 8)

We reiterated our previous recommendation and Management agreed to require all

concerned agency officials/personnel to strictly comply with the pertinent rules and
regulations on the submission of financial reports/records and copies of all
contracts, purchase orders, notices of deliveries including all supporting documents
thereof, within the prescribed deadlines.

8. Three hundred ninety-nine (399) serviceable vehicles were not registered in CY

2019 due to failure to comply with Land Transportation Office (LTO) inspection,
as most of them need to undergo repairs/rehabilitation. (Observation No. 9)

We recommended and Management agreed to: (a) ensure that all MMDA-owned
motor vehicles are promptly registered with LTO as government vehicles under the

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 name of MMDA; (b) renewals of the registration of all serviceable motor vehicles
be made within the periods prescribed by LTO to avoid payment of penalties; (c)
request from the DBM for funding/budget for the needed repairs of vehicles and if
possible for the acquisition of brand new motor vehicles; and (d) issue
penalty/sanctions for those end-user/s who will not coordinate with the Transport
Division for the registration of serviceable/operational vehicles to LTO.

9. Land acquired by MMDA for P6.193 million is still in the name of the previous
owner, thus the agency has no Title over the said land to prove ownership
(Observation No. 10)

We reiterated our previous year’s recommendation and Management agreed to

apply for the titling of the land in Tondo, in the name of MMDA from the Land
Registration Authority, to prove ownership over the land.

10. Excess balances of the proceeds from the sale of bid documents after the authorized
payment of honoraria to BAC members at the end of the year in the amount of
P25,368,826.56 were not deposited to the National Treasury in violation of Budget
Circular (BC) No. 2004-5A. (Observation No. 11)

In view of the foregoing, we recommended and Management agreed to direct the

Finance Department to remit the amount of P25,368,826.56 to the National
Treasury, the excess of the proceeds from sale of bid documents and from other
sources, as enumerated in Paragraph 6.1 of BC No. 2004-5A dated October 7,
2005, over the actual payments for honoraria and overtime of BAC and other
personnel involved in the Agency’s procurement activities at the end of the year.

The above observations and recommendations were discussed with concerned

Management officials in an exit conference conducted on July 22, 2020, and their
comments were incorporated in this Report, where appropriate.

G. Summary of Total Suspensions, Disallowances and Charges

Outstanding audit suspensions and disallowances as at December 31, 2019,

amounted to P70,264,422.00, and P861,853,266.65, respectively. There are no unsettled
charges as at year-end.

In addition to the above, 24 disallowances amounting to P37,476,816.43 issued

prior to the effectivity of the 2009 Rules and Regulations on the Settlement of Accounts
(RRSA) are still unsettled and shall continue to be enforced in accordance with the Rules
as provided under Section 28 thereof.

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H. Status of Implementation of Prior Years’ Audit Recommendations

Of the 136 outstanding prior years’ audit recommendations as at January 1, 2019,

59 were reiterated in Part II of this Report. Moreover, 58 were implemented and 19 were
not implemented as at year-end. Details are presented in Part III of this Report.

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