DonCarlos Bukidnon2019 Audit Report

Republic of the Philippines
COMMISSION ON AUDIT
LGS-C- Province of Bukidnon
Malaybalay City
OFFICE OF THE SUPERVISING AUDITOR
May 15, 2020
Hon. Ma. Victoria O. Pizarro, CPA

Municipal Mayor
Municipality of Don Carlos
Province of Bukidnon
Dear Mayor Pizarro:
We are pleased to transmit the Annual Audit Report (AAR) on the audit of the
Municipality of Don Carlos, Province of Bukidnon for Calendar Year 2019 in
compliance with Section 2, Article IX-D of the Philippine Constitution and Section 43
Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the
Philippines.
The audit was made to (a) ascertain the level of assurance that may be placed on
management assertions on the financial statements; (b) recommend agency improvement
opportunities; and (c) determine the extent of implementation of prior years’
unimplemented audit recommendations.
The audit was conducted in accordance with International Public Sector Standards on
Auditing, and we believe that it provided a reasonable basis for the audit results.
The auditor rendered a qualified opinion on the fairness of the presentation of the
financial statements of the Municipality of Don Carlos for the year ended December 31,
2019 as discussed in the Independent Auditor’s Report presented in Part I of the report.
The significant findings and observations that need immediate action are as follows:
1. The Construction in Progress- Infrastructure Assets account is overstated by

P36,778,123.02 representing the cost of completed projects not yet adjusted to
appropriate asset account contrary to the rules and regulations set forth under the
International Public Sector Accounting Standards (IPSAS), thus, correspondingly
resulted in the understatement of the Infrastructure Assets account and misstatements
of other affected accounts as reported in the year-end Financial Statements.
2. The Construction in Progress –Buildings and Other Structures amounting to
P141,758,289.24 is understated by P16,631,851.54 because the Municipality did not
opt to capitalized the borrowing costs that are directly attributable to the construction
of the 2 Storey Mall-Type Commercial Building appropriated under the 20% Local
Development Fund where the nature of the source of the funding requires the entity
to do so, contrary to the rules on capitalization of the borrowing costs under the
International Public Sector Accounting Standards (IPSAS) 5 Volume I, hence,
affecting the fair presentation of the Financial Statement account balances as of
December 31, 2019.
3. There is an unreconciled balance of Construction in Progress account between the

Municipality’s General Ledger and its supporting schedules by a total of
P16,345,104.77 due to the agency’s failure to maintain complete subsidiary ledgers
for the said account as required under Section 10 of the New Government
Accounting System (NGAS) Manual Volume 2, hence, the balance appearing in the
financial reports as of December 31, 2019 under the CIP- Infrastructure Assets
account cannot be ascertained.
4. The Municipality failed to record at the start of ensuing year, previous and current
years Real Property Tax Receivable and Deferred Real Property Tax Income totaling
P12,293,395.70, a non-compliance to the provisions of Section 246 of RA 7160 and
Section 19 of the Manual on New Government Accounting System, thus, huge
amount of real property tax collectible was not reflected in its year-end financial
statement.
5. Collections made in CY 2019 totaling P2,94,442.98 in the General Fund and P2,
061,665.47 in the Special Education Fund were not booked during the year but
recorded in CY 2020 due to the failure of the Municipal Treasurer to submit the
pertinent Reports of Collections & Deposits on time to the Office of the Municipal
Accounting Office for recording the same in the books of accounts, which condition
is inconsistent with the matching/consistency principle of accounting that resulted to
understatement of Cash, Revenue and Liability accounts presented in the financial
statements as of December 31, 2019.
6. The Interest Income amounting to P2,095,682.69 as of December 31, 2019 is

understated by a total of P160,358.53 because accrued interest was not recognized at
the end of the year contrary to Section 111 and 112 of PD 1445, thereby affecting the
fair presentation of the year-end Financial Statements thereof.
7. The accuracy and validity of the reported balance of Other Receivable totaling
P87,167.85 under the Trust Fund is highly doubtful as this has remained dormant for
more than fifteen (15) years and the itemized account names and balances of the
same could hardly be determined because of the absence of any detailed supporting
schedules which is not in consonance with Sections 6.1 and 6.2 of COA Circular No.
2016-005, thus, depriving the government of funds for its operations and affecting
the fair presentation of accounts in the Financial Statements (FSs).
8. The Municipality used the Direct Expense Method instead of the Perpetual Inventory
Method in the recording of purchases of its Drugs and Medicines while issuances
thereof were not evidenced by Requisition and Issue Slips (RIS ) which was not
compliant with the International Public Sector Accounting Standards (IPSAS) No. 12
and Section 114 of NGAS Manual pertaining to Perpetual Inventory Method for
supplies resulting in unreliable balances of Inventory and Expense accounts.
9. The amount appropriated for four (4) projects/programs/activities under the 20%
Development Fund- Continuing Appropriation totaling P12,650,000.00 remained
unutilized and intended projects remained unimplemented as of December 31, 2019
contrary to the provision of Section 18 of Republic Act No. 7160, hence the
objective to provide efficient and effective provision of the basic services and
facilities was not attained, prejudicing the intended beneficiaries of the projects.
10. The Agency paid monetary award its officials and employees for its PRAISE
(Program on Awards and Incentives for Service Excellence) system totaling
P2,670,000.00 without satisfying the basic documentary requirements as set forth in
Civil Service Commission (CSC) Memorandum Circular No. 01, s. 2001, thus,
casting doubt on the validity and propriety of the pertinent disbursement.
These and the other audit observations, together with the recommended course of action
which were discussed by the Audit Team with you and other municipal government
officials in an exit conference on March 10, 2020, are discussed in detail on Part II of the
report.
We acknowledge the support and cooperation extended to our Audit Team by the
officials and employees of the agency which facilitated to completion of this Report.
Very truly yours,
JOSEPHINE G. MURILLO
State Auditor IV
Acting Supervising Auditor
Copy furnished:
1. The Sangguniang Bayan, Don Carlos Bukidnon
2. The Regional Director, DILG RX, Cagayan de Oro City
3. The Regional Director, BLGF RX, Cagayan de Oro City
4. University of the Philippines Law Center (soft copy)
5. National Library (soft copy)
6. O N (soft copy)
COA Central Library
h
COMMISSION ON AUDIT
Office of the Audit Team Leader
April 3, 2020
Ms. Josephine G. Murillo

State Auditor IV
Acting Supervising Auditor
Madam:
We are submitting, in compliance with Article IX-D of the Philippine Constitution and
pertinent Sections of Presidential Decree No. 1445, the Annual Audit Report (AAR) on
the Municipality of Don Carlos, Province of Bukidnon for the year ended December 31,
2019.
The audit was conducted to ascertain the propriety of financial transactions and the
accuracy of financial records and reports, as well as, the fairness in the presentation of
accounts in the financial statements.
Our attached report consists of four parts, Part I contains the Audited Financial
Statements, Part II details of the Significant Observations and Recommendations, which
were discussed with the Municipal Officials during the Exit Conference on March 10,
2020; Part III provides the Status of Prior Years’ Audit Recommendations, and Part IV
shows the Appendices.
We rendered a qualified opinion on the presentation of the financial statements as of

December 31, 2019, for reasons stated in the report and audit certificate.
Our audit was conducted in accordance with International Standards of Supreme Audit
Institutions (ISSAIs) and we believe that it provides reasonable bases for the results of
the audit.
We acknowledge the cooperation and support extended to us by the officials and

employees of the Municipal Government of Don Carlos.
Very truly yours,
FLORISA O. VIRTUDAZO
State Auditor IV
Audit Team Leader
COMMISSION ON AUDIT
Commonwealth Avenue,
Quezon City
ANNUAL AUDIT REPORT
ON THE
MUNICIPALITY OF DON CARLOS

PROVINCE OF BUKIDNON
For the Year Ended December 31, 2019

EXECUTIVE SUMMARY
A. INTRODUCTION
The Municipality of Don Carlos, Bukidnon was created under Republic Act.
No.4800 dated June 18, 1968. The said Municipality belonged to the Third Congressional
District of Bukidnon.
The Municipality’s management and administration of fiscal and development

affairs Conform to the National Government’s thrust for sustainable social economic
growth. Its right to manage and administer its own affairs derived from the provisions of
Republic Act No. 716, otherwise known as the Local Government Code of 1991. The
Municipality of Don Carlos comprises 29 Barangays and presently, it is still classified as
first class municipality.
B. FINANCIAL HIGHLIGHTS
Financial Condition
2019 2018 Increase/(Decrease)
Assets P 766,655,186.65 P 712,083,105.35 P 54,572,081.30
Liabilities 380,349,801.38 353,406,771.28 26,943,030.10
Government Equity P 386,305,385.27 P 358,676,334.07 P 27,629,051.20
Appropriations
The Municipality of Don Carlos appropriated the total amount of
P370,959,349.83 in the General Fund and P4,506,430.00 in the Special Education Fund
for the Calendar Year 2019 or a total of P375,465,779.83 and appropriated the total
amount of P204,734,000.00 in the General Fund and P2,970,000.00 in the Special
Education Fund for the Prior Year 2018 or a total of P207,704,000.00, as follows:
CY 2019 PY 2018
General Fund SEF General Fund SEF
Personnel Services 95,354,291.00 76,922,470.00
MOOE 190,878,564.42 4,261,430.00 82,560,770.00 1,083,000.00
Capital Outlay 18,308,220.00 245,000.00 1,949,000.00 1,887,000.00
Debt Service 10,350,000.00
LDRRMF 11,263,155.00 9,520,150.00
20% Development Fund 53,777,119.41 22,100,610.00
Aid to Barangays 290,000.00 290,000.00
Allocation for Senior
1,088,000.00 1,041,000.00
Citizens and PWD
TOTAL 370,959,349.83 4,506,430.00 204,734,000.00 2,970,000.00
Continuing appropriation for General Fund amounted to P178,561,922.18 and
P248,656,068.90 for CY 2019 and PY 2018 while continuing appropriation for Special
i
Education Fund amounted to P752,035.22 and P2,229,585.22 for CY2019 and PY 2018,
respectively.
C. OPERATIONAL HIGHLIGHTS
The Municipality is envisioned to be the leading Agri-Industrial tourism and trade

center of southern Bukidnon managed by dynamic leaders with empowered and God-
centered citizenry living a peaceful ecologically-balanced and climate change resilient
environment. During the Calendar Year 2019, the Municipality generated a total revenue
of P221,217,182.97, showing an increase of 11,372,806.73 or 5.42% in comparison with
the Prior Year 2018. The increase was attributed mainly from the increase in Tax
Revenue, Share from National Taxes and Other Income amounting to P3,050,947.91,
P15,393,558.00 and P419,232.57, respectively.
D. SCOPE OF AUDIT
The audit covered the operations of the Municipality of Don Carlos, Province of
Bukidnon for the year ended December 31, 2019.
The objectives of the audit were to ascertain the fairness of presentation and
reliability of the consolidated financial position and the results of operations for the year
then ended, and to determine whether the programs, projects and activities for the year
were attained in an efficient, economical and effective manner. We also conducted
compliance audit to check the validity and propriety of the transactions and adherence to
pertinent laws, rules and regulation.
E. INDEPENDENT AUDITOR’S REPORT ON THE FINANCIAL STATEMENTS
The Auditor rendered a modified opinion on the fairness of the presentation of the
financial Statements due to the following:

appropriate asset account, thus, correspondingly resulted in the understatement of the
Infrastructure Assets account and misstatements of other affected accounts as reported in
the year-end Financial Statements, contrary to the rules and regulations set forth under
the International Public Sector Accounting Standards (IPSAS).

P141,758,289.24 is understated by P16,631,851.54 because the Municipality did not opt
to capitalized the borrowing costs that are directly attributable to the construction of the 2
Storey Mall-Type Commercial Building appropriated under the 20% Local Development
Fund where the nature of the source of the funding requires the entity to do so, contrary
to the rules on capitalization of the borrowing costs under the International Public Sector
Accounting Standards (IPSAS) 5 Volume I, hence, affecting the fair presentation of the
Financial Statement account balances as of December 31, 2019.
ii
3. There is an unreconciled balance of Construction in Progress account between
the Municipality’s General Ledger and its supporting schedules by a total of
P16,345,104.77 due to the agency’s failure to maintain complete subsidiary ledgers for
the said account as required under Section 10 of the New Government Accounting
System (NGAS) Manual Volume 2, hence, the balance appearing in the financial reports
as of December 31, 2019 under the CIP- Infrastructure Assets account cannot be
ascertained.
4. The Municipality failed to record at the start of ensuing year, previous and
current years Real Property Tax Receivable and Deferred Real Property Tax Income
totalling P12,293,395.70, a non-compliance to the provisions of Section 246 of RA 7160
and Section 19 of the Manual on New Government Accounting System, thus, huge
amount of real property tax collectible was not reflected in its year-end financial
statement.
5. Collections made in CY 2019 totaling P2, 194,442.98 in the General Fund and
P2, 061,665.47 in the Special Education Fund were not booked during the year but
recorded in CY 2020 due to the failure of the Municipal Treasurer to submit the pertinent
Reports of Collections & Deposits on time to the Office of the Municipal Accounting
Office for recording the same in the books of accounts, which condition is inconsistent
with the matching/consistency principle of accounting that resulted to understatement of
Cash, Revenue and Liability accounts presented in the financial statements as of
December 31, 2019.

understated by a total of P160,358.53 because accrued interest was not recognized at the
end of the year contrary to Section 111 and 112 of PD 1445, thereby affecting the fair
presentation of the year-end Financial Statements thereof.
more than fifteen (15) years and the itemized account names and balances of the same
could hardly be determined because of the absence of any detailed supporting schedules
which is not in consonance with Sections 6.1 and 6.2 of COA Circular No. 2016-005,
thus, depriving the government of funds for its operations and affecting the fair
presentation of accounts in the Financial Statements (FSs).
8. The Municipality used the Direct Expense Method instead of the Perpetual
Inventory Method in the recording of purchases of its Drugs and Medicines while
issuances thereof were not evidenced by Requisition and Issue Slips (RIS ) which was
not compliant with the International Public Sector Accounting Standards (IPSAS) No. 12
and Section 114 of NGAS Manual pertaining to Perpetual Inventory Method for supplies
resulting in unreliable balances of Inventory and Expense accounts.
F. SUMMARY OF SIGNIFICANT OBSERVATIONS AND

RECOMMENDATIONS
iii
In addition, the following is a summary of significant observations and
recommendations in the audit and/or evaluation of the operations of the Municipality of
Don Carlos for the year 2019 which need immediate action. These and other audit
observations and recommendations are fully discussed in Part II of this Report, and were
discussed by the Audit Team with you and department heads and staff in an exit
conference on March 10, 2020.
1. Allocation from their Special Education Fund (SEF) for Early Child Care
Developent program was not provided as required under Section 7 (b) of RA No. 10410,
otherwise known as the "Early Years Act of 2013", thereby depriving the intended
beneficiaries of the expected benefits which could be derived from the program.
We recommended to the management to review the budget as well as the

Programs, Activities and Projects (P/A/Ps) of the Municipality to align with the
requirements stated under Section 7 (b) of RA No. 10410, otherwise known as the "Early
Years Act of 2013" which provides for the allocations of SEF for the ECCD Program so
that the intended beneficiaries/school children can enjoy the benefits and their
educational standards will be uplifted.
2. The Municipality paid Rice Allowances to its officials and employees during
the Calendar Year 2019 totaling P3,816,977.27 without legal basis because its payment
constitutes additional compensation as stated in the technical review analysis sheet by the
Provincial Local Finance Committee, thus, the legality and validity of such disbursed
transactions cannot be ascertained.
We recommended to the management to immediately discontinue the

disbursements of the said Rice Allowances to the officials and employees of the
Municipality and adhere strictly to specific statutory authority in the appropriation of
fund as reviewed by the Provincial Local Finance Committee and include only on the
priorities the grant of personnel compensation benefits expressly authorized by law.
3. The amount appropriated for four (4) projects/programs/activities under the

20% Development Fund- Continuing Appropriation totaling P12,650,000.00 remained
unutilized and intended projects remained unimplemented as of December 31, 2019
contrary to the provision of Section 18 of Republic Act No. 7160, hence the objective to
provide efficient and effective provision of the basic services and facilities was not
attained, prejudicing the intended beneficiaries of the projects.
We recommended to the management to require the Municipal Engineer and

Other Officers concerned to: 1.) Reassess the viability of PPAs funded under the 20%
Development Fund, and fast-tract its implementation to warrant delivery of benefits to
the intended beneficiaries; 2.) If projects were no longer feasible then revert the funds to
unappropriated surplus under the 20% Development Fund.
iv
4. The Agency paid monetary award to the officials and employees for its
PRAISE (Program on Awards and Incentives for Service Excellence) system totaling
P2,670,000.00 without satisfying the basic documentary requirements as set forth in Civil
Service Commission (CSC) Memorandum Circular No. 01, s. 2001, thus, casting doubt
on the validity and propriety of the pertinent disbursement.
We recommended to the management to submit the following documents in order

to facilitate continuance of our audit and validate that the Municipality have met all the
CSC Memorandum Circular requirements warranting the grant of the monetary awards:
a) Detailed Employee Suggestions and Incentive Awards System; b) Documents
evidencing the generation of savings due to any extraordinary contribution or exceptional
accomplishment by an employee which resulted in such monetary savings. In case
savings are generated, monetary awards shall be granted which shall not exceed 20%
thereof; c) Approved Program on Awards and Incentives for Service Excellence
(PRAISE) Model by the Civil Service Commission (CSC)
F. SUMMARY OF NS, ND AND NC ISSUED DURING THE YEAR

There were no audit suspensions, disallowances and charges in the audit of
transactions of the Municipality of Don Carlos, Bukidnon for the Calendar Year 2019.
Beginning CY 2019 Ending

Audit Action Balance (as of Balance (as of
Issuances Settlement
Dec. 31, 2018) Dec. 31, 2019)
Suspensions - - - -
Disallowances - - - -
Charges - - - -
TOTAL - - - -
G. STATUS OF IMPLEMENTATION OF PRIOR YEAR’S

RECOMMENDATIONS
There were nine (9) audit findings and recommendations embodied in the Prior
Year 2018 Annual Audit Report. Five (5) recommendations were fully implemented,
three (3) were partially implemented and one (1) was not yet implemented
v
TABLE OF CONTENTS
PART I – AUDITED FINANCIAL STATEMENTS Page
 Independent Auditor’s Report 1-4

 Statement of Management Responsibility 5
 Consolidated Statement of Financial Position 6
 Consolidated Statement of Financial Performance 7
 Consolidated Statement of Cash Flows 8
 Consolidated Statement of Changes in Net Assets/Equity 9
 Consolidated Statement of Comparison of Budget and Actual Amounts 10-11
 Notes to the Financial Statements 12-28
PART II – DETAILED FINDINGS AND RECOMMENDATIONS
 Financial 29-47
 Compliance 48-61
 Value for Money 61-63
 Inclusion of Evaluation/Other Audit Observation 63-64
PART III –STATUS OF IMPLEMENTATION OF PRIOR YEARS’
RECOMMENDATIONS 65-70
PART IV - APPENDICES
 Financial Statements by Fund 71-80

 Schedules
Appendix E- Status of Appropriations, Allotments and Obligations (All
Funds) 81-85
Appendix F- Computations of Depreciation Expenses for Completed
Infrastructure Projects and their Corresponding Accumulated Depreciations
as of December 31, 2019 86
Appendix G- Interest Recorded as Expense from Calendar Year 2016 to
2019 in relation to the Construction of 2 Storey Mall-Type Commercial 87
Building 88
Appendix H- Per supporting schedule of CIP- Infrastructure Assets
Appendix I.1-I.2- Summary and Details of Collections on 2019 recorded in 89-91
CY 2020 92
Appendix J- Inventory of Drugs and Medicines as of December 31, 2019 93
Appendix K- Special Education Fund (SEF) Appropriations for CY 2019
Appendix L.1-L.12 – Rice Allowances paid for the months January to 94-105
December, 2019
Appendix M.1-M.11- Records and Remittances of Due to BIR for each 106-117
fund as of December 31, 2019
PART I – AUDITED FINANCIAL STATEMENTS
COMMISSION ON AUDIT
Regional Office No. X
Provincial Capitol, Malaybalay City
Audit Group C- Province of Bukidnon
INDEPENDENT AUDITOR’S REPORT
Hon. Ma. Victoria O. Pizarro, CPA

Municipal Mayor
Province of Bukidnon
We have audited the accompanying consolidated financial statements of the Municipality

of Don Carlos, Province of Bukidnon, which comprise the Statement of Financial
Position as of December 31, 2019, and the Statement of Financial Performance,
Statement of Changes in Net Assets/Equity, Statement of Cash Flows and Statement of
Comparison of Budget and Actual amount for the year then ended, and notes to financial
statements, including a summary of significant accounting policies.
In our opinion, except for the effects of the matter described in the Bases for Qualified
Opinion section of our report, the accompanying financial statements present fairly, in all
material respects, the financial position of the Municipality of Don Carlos, Province of
Bukidnon as of December 31, 2019, and its financial performance, its cash flows, and its
comparison of budget and actual amounts for the year then ended in accordance with
International Public Sector Accounting Standards (IPSASs).
Bases for Qualified Opinion

appropriate asset account, thus, correspondingly resulted in the understatement of the
Infrastructure Assets account and misstatements of other affected accounts as reported in
the year-end Financial Statements, contrary to the rules and regulations set forth under
the International Public Sector Accounting Standards (IPSAS).

P141,758,289.24 is understated by P16,631,851.54 because the Municipality did not opt
to capitalized the borrowing costs that are directly attributable to the construction of the 2
Storey Mall-Type Commercial Building appropriated under the 20% Local Development
Fund where the nature of the source of the funding requires the entity to do so, contrary
to the rules on capitalization of the borrowing costs under the International Public Sector
Accounting Standards (IPSAS) 5 Volume I, hence, affecting the fair presentation of the
Financial Statement account balances as of December 31, 2019.
1
3. There is an unreconciled balance of Construction in Progress account between the
Municipality’s General Ledger and its supporting schedules by a total of P16,345,104.77
due to the agency’s failure to maintain complete subsidiary ledgers for the said account as
required under Section 10 of the New Government Accounting System (NGAS) Manual
Volume 2, hence, the balance appearing in the financial reports as of December 31, 2019
under the CIP- Infrastructure Assets account cannot be ascertained.
4. The Municipality failed to record at the start of ensuing year, previous and current
years Real Property Tax Receivable and Deferred Real Property Tax Income totalling
P12,293,395.70, a non-compliance to the provisions of Section 246 of RA 7160 and
Section 19 of the Manual on New Government Accounting System, thus, huge amount of
real property tax collectible was not reflected in its year-end financial statement.
5. Collections made in CY 2019 totalling P2, 194,442.98 in the General Fund and P2,
061,665.47 in the Special Education Fund were not booked during the year but recorded
in CY 2020 due to the failure of the Municipal Treasurer to submit the pertinent Reports
of Collections & Deposits on time to the Office of the Municipal Accounting Office for
recording the same in the books of accounts, which condition is inconsistent with the
matching/consistency principle of accounting.

understated by a total of P160,358.53 because accrued interest was not recognized at the
end of the year contrary to Section 111 and 112 of PD 1445, thereby affecting the fair
presentation of the year-end Financial Statements thereof.
more than fifteen (15) years and the itemized account names and balances of the same
could hardly be determined because of the absence of any detailed supporting schedules,
depriving the government of funds for its operations and affecting the fair presentation of
accounts in the Financial Statements (FSs).
8. The Municipality used the Direct Expense Method instead of the Perpetual Inventory
Method in the recording of purchases of its Drugs and Medicines while issuances thereof
were not evidenced by Requisition and Issue Slips (RIS) which was not compliant with
the International Public Sector Accounting Standards (IPSAS) No. 12 and Section 114 of
NGAS Manual pertaining to Perpetual Inventory Method for supplies resulting in
unreliable balances of Inventory and Expense accounts.
We conducted our audit in accordance with the International Standards of Supreme Audit
Institutions (ISSAIs). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the agency in accordance with the Revised Code of
Conduct and Ethical Standards for Commission on Audit Officials and Employees (Code
of Ethics) together with the ethical requirements that are relevant to our audit of the
financial statements, and we have fulfilled our other ethical responsibilities in accordance
2
with these requirements and the Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our Qualified opinion.
Key Audit Matters
Except for the matter described in the Bases for Qualified Opinion section, we have
determined that there are no other key audit matters to communicate in our report.
Responsibilities of Management and Those Charged with Governance for the

Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with the International Public Sector Accounting Standards and
for such internal control as management determines is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management’s responsibility for assessing the

agency’s ability to continue as a going concern, disclosing as applicable, matters related
to going concern and using the going concern basis of accounting unless management
either intend to liquidate the agency or to cease operations, or has no alternative but to do
so.
Those charged with governance are responsible for overseeing the agency’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free form material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not guarantee that an audit conducted in accordance with ISSAIs will
always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decision of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISSAIs, we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:
 Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve
3
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
 Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Agency’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt
on the Agency’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Agency to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit observations, including
any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
COMMISSION ON AUDIT
BY:
FLORISA O. VIRTUDAZO
State Auditor IV
Audit Team Leader
March 9, 2020
4
PROVINCE OF BUKIDNON
STATEMENT OF MANAGEMENT RESPONSIBILITY

FOR FINANCIAL STATEMENTS
The Management of the Municipality of Don Carlos is responsible for all

information and representation contained in the Statement of Financial Position as of
December 31, 2019 and the related Statement of Financial Performance, Statement of
Changes in Net Assets/Equity, Statement of Comparative Budget and Actual and
Statement of Cash Flows for the year the ended.
The Financial Statements have been prepared in conformity with the International
Public Sector Accounting Standards and reflect amounts that are based on best estimates
and informed judgment of management with an appropriate consideration of materiality.
In this regard, management maintains a system of accounting and reporting which

provides for the necessary internal controls to ensure that transactions are properly
authorized and recorded, assets are safeguarded against unauthorized use or disposition
and liabilities are recognized.
MA. VICTORIA O. PIZARRO, CPA

Municipal May
5
Municipality of Don Carlos, Bukidnon
Consolidated Statement of Financial Position
As of December 31, 2019
(With Comparative Figures for CY 2018)
NOTE 2019 2018

ASSETS
Current Assets
Cash and Cash Equivalents 4 330,956,219.64 328,080,779.69
Receivables 5 1,133,075.09 858,767.46
Inventories 6 220,236.04 1,734,348.00
Prepayments and Deferred Charges 7 1,240,440.52 1,232,732.27
Total Current Assets 333,549,971.29 331,906,627.42
Non-Current Assets
Property, Plant and Equipment 8 433,105,215.36 380,176,477.93
Total Non-Current Assets 433,105,215.36 380,176,477.93
Total Assets 766,655,186.65 712,083,105.35
LIABILITIES
Current Liabilities
Financial Liabilites 9 20,705,490.80 23,189,178.96
Inter-Agency Payables 10 171,606,379.73 148,767,118.22
Intra-Agency Payables 11 1,165,797.88 833,116.08
Trust Liabilities 12 47,241,622.48 37,965,249.48
Other Payables - 2,727,075.77
Total Current Liabilities 240,719,290.89 213,481,738.51
Non-Current Liabilities
Financial Liabilities 122,210,981.14
Deferred Credits/Unearned Income
Provision
Bills/Bonds/Loans Payable 13 112,434,102.66
Other Payables 14 27,196,407.83 17,714,051.63
Total Non-Current Liabilities 139,630,510.49 139,925,032.77
Total Liabilities 380,349,801.38 353,406,771.28
Equity
Beg. Balance 358,676,334.07 313,104,730.42
Adjustments 2,717,011.97 10,958,485.01
Prior Period Adjustment (2,071,052.10) 949,273.70
Surplus/(Deficit) for the Period 26,983,091.33 33,663,844.94
Total Equity 386,305,385.27 358,676,334.07
Total Liabilities and Net assets/Equity 766,655,186.65 712,083,105.35
(See accompanying Notes to Consolidated Financial Statements)
6
Consolidated Statement of Financial Performance
2019 2018
NOTE
Revenue
Tax Revenue 15 21,217,237.51 18,166,289.60
Share from Internal Revenue Collections 16 177,646,584.00 162,253,026.00
Other Share from National Taxes -
Service and Business Income 17 20,412,711.64 27,791,311.22
Shares, Grants and Donations 18 161,797.85 308,958.42
Gains -
Other Income 19 1,778,851.97
Total Revenue 221,217,182.97 208,519,585.24
Less: Current Operating Expenses

Personal Services 20 88,964,761.47 70,848,637.99
Maintenance and Other Operating
78,168,323.34
Expenses 21 75,496,569.83
Non-Cash Expenses 22 10,668,223.42 6,084,344.38
Financial Expenses 23 8,199,590.42 8,170,414.23
Total Current Operating Expenses 183,329,145.14 163,271,719.94
Surplus (Deficit) from Current Operations 37,888,037.83 45,247,865.30

Add(deduct):
Transfer, Assistance and Subsidy From 1,324,791.00
Transfer, Assistance and Subsidy To 24 (10,904,946.50) (12,908,811.36)
Surplus (Deficit) for the Period 26,983,091.33 33,663,844.94

Consolidated Statement of Cash Flows
7
2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Cash Inflows 339,719,744.88 382,651,204.47
Collection from Taxpayers 37,158,627.51 32,188,857.25
Share from Internal Revenue Allotment 177,646,584.00 162,253,026.00
Receipts from business/services income 2,859,615.84 2,698,490.84
Interest Income 2,095,682.69 2,592,547.96
Dividend Income 164,134.95 -
Other Receipts 126,545,172.53 182,918,282.42
Cash Outflows 326,137,683.79 257,295,287.31
Payment of Expenses 14,031,351.64 2,301,031.85
Payment of Suppliers and Creditors 129,872,407.74 87,468,878.71
Payments to Employees 100,783,793.62 82,344,965.26
Interest Expenses 7,111,206.13 5,760,636.98
Other Expenses 74,338,924.66 79,419,774.51
Net Cash Provided by (Used In) Operating Activities 13,582,061.09 125,355,917.16

CASH FLOWS FROM INVESTING ACTIVITIES
Cash Outflow (929,742.66) (139,013,915.54)

Purchase/Construction of Investment Property - (8,445,518.08)
Purchase/Construction of Property, Plant and
Equipment (929,742.66) (130,568,397.46)
Net Cash Provided by (Used In) Investing Activities (929,742.66) (139,013,915.54)

CASH FLOWS FROM FINANCING ACTIVITIES
Cash Outflows (9,776,878.48) (44,689,960.24)
Payment of Loan Amortization (9,776,878.48) (44,689,960.24)
Net Cash Provided by (Used In) Financing Activities (9,776,878.48) 44,689,960.24

Increase (Decrease) in Cash and Cash Equivalents 2,875,439.95 31,031,961.86

Cash and Cash Equivalents, January 01, 2019 328,080,779.69 297,048,817.83

CASH AND CASH EQUIVALENTS, ending 330,956,219.64 328,080,779.69


Consolidated Statement of Changes in Net Assets/Equity
8
2019 2018

EQUITY

Government Equity, Beg. Balance 358,676,334.07 313,104,730.42
Prior Period Adjustment -2,635,947.10 10,958,485.01
Adjustment 3,281,906.97 949,273.70
Surplus/(Deficit) for the Period 26,983,091.33 33,663,844.94

TOTAL EQUITY, End 386,305,385.27 358,676,334.07


Statement of Comparison of Budget and Actual Amounts
9
MUNICIPALITY OF DON CARLOS, BUKIDNON
Budgeted Difference Difference
Particulars Notes
Social Services and Social Welfare Amounts Original and Actual Amounts Final Budget
Personnel Services 18 3,097,700.00
Original 3,122,330.00
Final Final(24,630.00)
Budget 2,940,522.02 and181,807.98
Actual
Maintenance and Other Operating Expenses 19 521,000.00 1,488,996.00 (967,996.00) 1,167,312.69 321,683.31
General Fund
Capital Outlay 20 - 1,500,000.00 (1,500,000.00) - 1,500,000.00
A. LocalServices
Economic Sources
1. Tax Revenue
Personnel Services 21 11,999,250.00 12,061,124.00 (61,874.00) 11,556,572.96 504,551.04
a. Tax Revenue - Property 1 2,684,000.00 2,684,000.00 - 2,530,769.55 153,230.45
Maintenance and Other Operating Expenses 22 19,284,590.00 22,128,348.43 (2,843,758.43) 18,984,581.75 3,143,766.68
b. Tax
Capital Revenue - Goods and Services
Outlay 2
23 9,900,000.00
210,000.00 9,900,000.00
505,000.00 -
(295,000.00) 11,931,228.39
395,110.00 (2,031,228.39)
109,890.00
c. Other Local
Othe r Purposes : Taxes 3 2,761,000.00 2,761,000.00 - 3,462,309.51 (701,309.51)
Total Service
Debt Tax Revenue 15,345,000.00 15,345,000.00 - 17,924,307.45 (2,579,307.45)
2. Non-Tax
FinancialRevenue
Expense - - - - -
Amortization
a. Service Income 4 -
4,125,000.00 -
4,125,000.00 - -
3,983,630.85 -
141,369.15
LDRRMF
b. Business Income (Econ. Ent.) 5 23,526,016.00 23,526,016.00 - 14,068,487.10 9,457,528.90
Maintenance
c. Other Incomeandand
Other Operating Expenses
Receipts 24
6 9,568,205.00
3,690,500.00 9,603,155.00
3,690,500.00 (34,950.00)
- 9,603,155.00
4,139,445.66 -
(448,945.66)
TotalCapital
Non-TaxOutlay
Revenue 25 1,660,000.00
31,341,516.00 1,660,000.00
31,341,516.00 -- -
22,191,563.61 1,660,000.00
9,149,952.39
20% Development Fund
B. External Sources
Maintenance and Other Operating Expenses - - - - -
1. Share from the National Internal Revenue Taxes (IRA) 7 177,646,584.00 177,646,584.00 - 177,646,584.00 -
Capital Outlay 26 35,709,000.00 53,777,119.41 (18,068,119.41) 17,793,959.85 35,983,159.56
2. Share from GOCCs / PCSO 8 231,000.00 231,000.00 - 161,797.85 69,202.15
Share from National Wealth
3. Other Shares from
Maintenance and National Tax Collections
Other Operating Expenses -- -- -- -- --
a. ShareOutlay
Capital from Ecozone -- -- -- -- --
b. Share
Allocation forfrom EVAT
Senior Citizens and PWD - - - - -
c. Share fromand
Maintenance National
OtherWealth
Operating Expenses - - - - -
Capital
d. ShareOutlay
from Tobacco Excise - - - - -
Tax(Aid
Others
4. Other to Barangays)
Receipts - 49,952,958.83 (49,952,958.83) 49,952,958.83 -
Personnel Services
a. Grants and Donations -- -- -- -- --
Maintenance and Income
b. Other Subsidy Other Operating Expenses
(Surplus CY 2018 & Reversion) 27
9 290,000.00
- 290,000.00
49,952,958.83 -
(49,952,958.83) 240,000.00
49,952,958.83 50,000.00
-
Capital Outlay - - - - -
5. Inter-local Transfer - - - - -
Total Current Approrpiations 224,564,100.00 274,517,058.83 (49,952,958.83) 193,839,975.20 80,677,083.63
6. Capital /Investment Receipts - - - - -
Continuing Appropriations
Generala. Sale
PublicofSeCapital
rvice sAssets - - - - -
b. Sale
Capital of Investments
Outlay 28 -
29,940,051.60 -
29,752,826.69 -
187,224.91 -
15,504,165.52 -
14,248,661.17
Educationc. Proceeds from Collections of Loan - - - - -
Receivable
C. Receipts from Borrowings - - - - -
Capital Outlay 29 2,100,752.57 950,903.57 1,149,849.00 341,550.00 609,353.57
Health, Nutrition
Total Revenue and Population Control
and Receipts 224,564,100.00 274,517,058.83 (49,952,958.83) 267,877,211.74 6,639,847.09
Capital Outlay
Expenditures 30 168,685.00 167,855.00 830.00 - 167,855.00
Labor
Currentand Employment
Appropriations
Capital
General Outlay
Public Services - - - - -
Housing and Community Development
Personnel Services 10 61,742,602.00 65,557,306.00 (3,814,704.00) 62,420,642.45 3,136,663.55
Maintenance and Other Operating Expenses 11 50,855,698.00 55,156,989.06 (4,301,291.06) 46,969,831.78 8,187,157.28
Social Services and Social Welfare
Capital Outlay 12 478,220.00 16,108,220.00 (15,630,000.00) 489,995.00 15,618,225.00
Capital Outlay 31 38,423.03 28,542.63 9,880.40 - 28,542.63
Education
Economic Services
Personnel
Capital Services
Outlay 13
32 2,643,150.00
1,414,892.55 2,743,150.00
1,183,643.00 (100,000.00)
231,249.55 1,882,513.12
13,000.00 860,636.88
1,170,643.00
OtheMaintenance
r Purposesand: Other Operating Expenses 14 11,503,950.00 13,851,604.93 (2,347,654.93)
- 6,241,088.55 7,610,516.38
-
Capital Outlay 15 - 195,000.00 (195,000.00)
- - 195,000.00
-
Health, 20% MDF
Nutrition and Population Control 33 65,757,401.57 47,689,282.16 18,068,119.41 8,278,354.22 39,410,927.94
5% MDRRMf
Personnel Services 34
16 2,123,769.50
12,078,400.00 2,088,819.50
11,870,381.00 34,950.00
208,019.00 254,830.00
10,344,706.27 1,833,989.50
1,525,674.73
Utilization
Maintenance andofOther
Barrowings - Const.
Operating of 2-Storey Mall
Expenses 35
17 57,335,843.09
2,922,335.00 57,335,843.09
2,898,335.00 -
24,000.00 -
2,809,983.76 57,335,843.09
88,351.24
Total
CapitalContinuing
Outlay Approrpiations 158,879,818.91
- 139,197,715.64
- 19,682,103.27
- 24,391,899.74
- 114,805,815.90
-
Total Appropriations 383,443,918.91 413,714,774.47 (30,270,855.56) 218,231,874.94 195,482,899.53
Labor and Employment
Personnel Services - - - - -
Special Education Fund
Maintenance and Other Operating Expenses - - - - -
Revenue
1. Tax Revenue
Housing and Community Development
a. Tax Revenue - Property 3,593,700.00 3,593,700.00 - 3,292,930.06 300,769.94
PersonnelRevenue
2. Non-Tax Services - - - - -
Maintenance
a. and Other Operating Expenses
Business Income - - - - --
Capital
Total Outlay
Revenue & Receipts -
3,593,700.00 -
3,593,700.00 - -
3,292,930.06 -
300,769.94
Expenditures
Curre nt Appropriations
Education
Personnel Services - - - -
Maintenance and Other Operating Expenses 3,348,700.00 3,348,700.00 - 1,396,380.61 1,952,319.39
Capital Outlay 245,000.00 245,000.00 - 166,460.00 78,540.00
Total Current Approrpiations 3,593,700.00 3,593,700.00 - 1,562,840.61 2,030,859.39
Education
Capital Outlay 1,664,765.22 752,035.22 912,730.00 - 752,035.22
Total Continuing Approrpiations 1,664,765.22 752,035.22 912,730.00 - 752,035.22
Total Appropriations 5,258,465.22 4,345,735.22 912,730.00 1,562,840.61 2,782,894.61
10
DON CARLOS, BUKIDNON

For the Year 2019
Notes to Condensed Financial Statements
Note I –Profile
The Municipality of Don Carlos, Province of Bukidnon was created by virtue of

Republic Act No. 4800 dated June 18, 1966. It is located in the Southern part of the
province and approximately 1,575 kms. away from Manila. The municipality has a
total land area of 21,372 hectares mostly utilized for agriculture which comprises 64%
of the total land use. It has a total population of 71,658 with a total household of
14,309.
It comprises Twenty Nine (29) Barangays namely, Don Carlos Sur, Don Carlos Norte,
Bismartz, Bocboc, Buyot, Cabadiangan, Calao-Calao, Embayao, Kalubihon, Kasigkot,
Kawilihan, Kiara, Kibatang, Mahayahay, Manlamonay, Maraymaray, Mauswagon,
Minsalagan, New Nongnongan, New Visayas, Old Nongnongan, Pinamaloy, Pualas,
San Antonio East, San Antonio West, San Francisco, San Nicolas, San Roque and
Sinangguyan.
The Municipality is envisioned to be the leading Agri-Industrial tourism and trade

center of southern Bukidnon managed by dynamic leaders with empowered and God-
centered citizenry living a peaceful ecologically-balanced and climate change resilient
environment.
Its mission is to promote peace and order, encourage investments increase agricultural
production, develop and preserve the environment through active and good
governance.
True to its mandate, the local government of Don Carlos has been a consistent
awardee of various fields such as Education, Nutrition, Health, Investment promotion,
Agriculture, Peace & Order &, Financial Management and Good Governance.
For CY-2019, The LGU has been conferred various awards and recognition from
different groups and agencies to wit;
- Bronze Award, Enhanced program to Institutionalized Meritocracy and Excelence in

Human Resource Manangement(PRIME-HRM) conferred by the cicil Service
commission Central Office, 24th day of July 2019 in Pasay City
- Seal of Child-Friendly local Governance, confirmed by the council for the welfare of
children, 10th day of april, 2019
- Top 1- 2017 BLGF Collection Target for Business Taxes, Fees & Other Charges,
Economic Enterprise, conferred by the Bureau of Local Government Finance
(BLGF), 13th day of August, 2019
11
- Rank # 10, 2019 Overall Most competitive 1st to 2nd Class Municipalities in
Northern Mindanao, 7th Regional Competitiveness Summit.
Note 2 - Statement of Compliance and Basis of Preparation of Financial

Statements
The financial statements of the LGU have been prepared in accordance with and
comply with the Philippine Public Sector Accounting Standards (PPSAS).The
accounting policies have been applied starting the year 2015. The accounts used are
those provided for in the revised Chart of Accounts issued under COA Circular No.
2015-009 dated December 1, 2015.
The financial statements have been prepared based on historical cost unless stated
otherwise and are presented in pesos, which is the functional and reporting currency of
the LGU. The notes to FS attached component of the Financial Statements.
Note 3 - Summary of Significant Accounting Policies
3.1 Basis of accounting
The financial statements are prepared on an accrual basis in accordance with the
Philippine Public Sector Accounting Standards (PPSAS).
3.2 Revenue recognition
Revenue from non-exchange transactions
Taxes, fees and fines
The LGU recognizes revenues from taxes and fines when the event occurs and the
asset recognition criteria are met. To the extent that when there is a related condition
attached that would give rise to a liability to repay the amount, liability is recognized
instead of revenue. Other non-exchange revenues are recognized when it is
improbable that the future economic benefit or service potential associated with the
asset will flow to the entity and the fair value of the asset can be measured reliably.
Revenue from exchange transactions
Rendering of services
The LGU recognizes revenue from rendering of services by reference to the stage of
completion when the outcome of the transaction can be estimated reliably. The stage
of completion is measured by reference to labor hours incurred to date as a percentage
of total estimated labor hours. Where the contract outcome cannot be measured
reliably, revenue is recognized only to the extent that the expenses incurred.
12
Interest income
Interest income is accrued using the effective yield method. The effective yield
discounts estimated future cash receipts through the expected life of the financial asset
to that asset’s net carrying amount. The method applies this yield to the principal
outstanding to determine interest income each period
3.3 Property, plant and equipment
All Property, Plant and Equipment are stated at cost less accumulated depreciation and
impairment losses. Cost includes expenditure that is directly attributable to the
acquisition of the items. When significant parts of property, plant and equipment are
required to be replaced at intervals, the LGU recognizes such parts as individual assets
with specific useful lives and depreciates them accordingly. Likewise, when a major
inspection is performed, its cost is recognized in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are satisfied. All other repair and
maintenance costs are recognized in surplus or deficit as incurred. Where an asset is
acquired in a non-exchange transaction for nil or nominal consideration the asset is
initially measured at its fair value.
Depreciation on assets is charged on a straight-line basis over the useful life of the
asset. Depreciation is charged at rates calculated to allocate cost or valuation of the
asset less any estimated residual value over its remaining useful life.
The management adopted Commission on Audit (COA) circularno.2017 -004ndated

Dec. 13,2017 For the estimation of useful life of Property, Plant and equipment.
Leased assets may consist of vehicles and machinery. The assets’ residual values and
useful lives are reviewed, and adjusted prospectively, if appropriate, at the end of each
reporting period. An asset’s carrying amount is written down immediately to its
recoverable amount, or recoverable service amount, if the asset’s carrying amount is
greater than its estimated recoverable amount or recoverable service amount. The
LGU derecognizes items of property, plant and equipment and/or any significant part
of an asset upon disposal or when no future economic benefits or service potential is
expected from its continuing use. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the surplus or deficit when the asset is
derecognized.
Public Infrastructures were not previously recognized in the books. The LGU availed
of the 5-year transitional provision for the recognition of the Public Infrastructure. For
the first year of implementation of the PPSAS, the LGU will not recognize the Public
Infrastructure in the books of accounts.
3.4 Financial Liabilities
13
Initial recognition and measurement
Financial liabilities within the scope of IPSAS 29 are classified as financial liabilities
at fair value through surplus or deficit or loans and borrowings, as appropriate. The
LGU determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognized initially at fair value and, in the case of loans
and borrowings.
The LGU group’s financial liabilities include trade and other payables, bank
overdrafts, loans and borrowings.
Subsequent measurement
The measurement of financial liabilities depends on their classification.
3.5 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and cash at bank, deposits on call
and highly liquid investments with an original maturity of three months or less, which
are readily convertible to known amounts of cash and are subject to insignificant risk
of changes in value. For the purpose of the consolidated statement of cash flows, cash
and cash equivalents consist of cash and short-term deposits as defined above, net of
outstanding bank overdrafts.
3.6 Inventories
Inventory is measured at cost upon initial recognition. To the extent that inventory was
received through non-exchange transactions (for no cost or for a nominal cost), the
cost of the inventory is its fair value at the date of acquisition.
Costs incurred in bringing each product to its present location and condition is
accounted for, as follows:
a) Raw materials: purchase cost using the weighted average cost method;
b) Finished goods and work in progress: cost of direct materials and labor and a
proportion of manufacturing overheads based on the normal operating capacity, but
excluding borrowing costs.
After initial recognition, inventory is measured at the lower of cost and net realizable
value. However, to the extent that a class of inventory is distributed or deployed at no
charge or for a nominal charge, that class of inventory is measured at the lower of cost
and current replacement cost.
Net realizable value is the estimated selling price in the ordinary course of operations,
less the estimated costs of completion and the estimated costs necessary to make the
sale, exchange, or distribution. Inventories are recognized as an expense when
deployed for utilization or consumption in the ordinary course of operations of the
LGU.
14
3.7 Changes in accounting policies and estimates
The LGU recognizes the effects of changes in accounting policy retrospectively. The
effects of changes in accounting policy are applied prospectively if retrospective
application is impractical.
The LGU recognizes the effects of changes in accounting estimates prospectively by
including in surplus or deficit.
3.8 Budget information
The annual budget is prepared on the modified cash basis, that is, all planned costs and
income are presented in a single statement to determine the needs of the LGU. As a
result of the adoption of the Modified cash basis for budgeting purposes, there are
basis, timing or entity differences that would require reconciliation between the actual
comparable amounts and the amounts presented as a separate additional financial
Statement, in the statement of comparison of budget and actual amounts.
3.9 Significant judgments and sources of estimation uncertainty
Judgments
In the process of applying the LGU’s accounting policies, management has made
judgments, which have the most significant effect on the amounts recognized in the
consolidated financial statements.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The LGU based its assumptions and estimates on
parameters available when the consolidated financial statements were prepared.
However, existing circumstances and assumptions about future developments may
change due to market changes or circumstances arising beyond the control of the
LGU. Such changes are reflected in the assumptions when they occur.
Useful lives and residual values
The useful lives and residual values of assets are assessed using the following
indicators to inform potential future use and value from disposal
a) The condition of the asset based on the assessment of experts employed by the
LGU;
b) The nature of the asset, its susceptibility and adaptability to changes in technology
and processes;
c) The nature of the processes in which the asset is deployed; and
15
d) Changes in the market in relation to the asset
16
Note 4- Cash and Cash Equivalent
ACCOUNT 2019 GF SEF TF STF 2018 GF SEF TF STF

Petty Cash 744.43 744.43 73,025.34 73,125.34 (100.00)
Cash in Bank -
Local Currency,
Current 44,093,663.7 37,752,531.1 1,133,565.3 13,484,507.0
Account 99,161,913.92 15,277,347.27 2,038,371.77 6 2 73,497,742.63 11,614,955.14 6 6 47264715.07
Cash in Bank -
Local Currency,
Savings 43,066,201.6 8,011,065.6 64,129,698.2
Account 231,793,561.29 171,184,687.87 8,076,286.40 9 9,466,385.33 254,510,011.72 172,979,100.58 5 5 9390147.24
10,114,658.1 87,159,865.4 47,218,916.4 9,144,631.0 77,614,105.3
TOTAL 330,956,219.64 186,462,779.57 7 5 5 328,080,779.69 184,667,181.06 1 1 56,654,862.31
Note 5- Receivables

Due from NGA's -
Due from LGUs 500,000.00 500,000.00 -
Due from Other Funds 27,250.77 27,250.77 398,492.70 398,492.70
Due from Non-
Government
Organizations/Peoples'
s Organization 295,420.28 295,420.28 295,420.28 295,420.28
Advances for
Operating Expenses 31,236.55 31,236.55 4,437.03 (3,062.97) 7,500.00
Advances to Special
Disbursing Officer 176,400.00 176,400.00 73,500.00 73,500.00
Advances to Officers
and Employees 15,600.00 15,600.00 -
Other Receivables 87,167.49 250.04 86,917.45 86,917.45 86,917.45
TOTAL 1,133,075.09 750,737.36 86,917.45 295,420.28 858,767.46 468,929.73 - 94,417.45 295,420.28
Note 6- Inventories

Office Supplies Inventory 220,236.04 220,236.04 331,444.20 331,444.20
Accountable Forms, Plates and
Stickers 1,847.80 1,847.80
Agricultural and Marine
Supplies Inventory 1,401,056.00 1,401,056.00
TOTAL 220,236.04 220,236.04 - - 1,734,348.00 333,292.00 - 1,401,056.00 -
Note 7- Prepayments and Deferred Charges

17
Advances to
Contractors 1,240,440.52 382,779.79 857,660.73 1,232,732.27 - 1,232,732.27
TOTAL 1,240,440.52 - - 382,779.79 857,660.73 1,232,732.27 - 1,232,732.27
Note 8- Property, Plant and Equipment

Land 33,088,037.11 33,088,037.11 32,088,037.11 32,088,037.11
Road
Nertworks 20,752,388.63 20,752,388.63 13,157,424.71 13,157,424.71
Accumulated
Depreciation -
Road Networks -583,880.25 -583,880.25 (181,875.74) (181,875.74)
Flood Control
System 6,644,967.59 6,644,967.59 2,717,082.66 2,717,082.66
Accumulated
Depreciation -
Sewer Systems -413,308.50 -413,308.50 (86,040.95) (86,040.95)
Water Supply
Systems 192,328.95 192,328.95 192,328.95 192,328.95
Accumulated
Depreciation -
Water Supply
Systems -12,180.84 -12,180.84 (6,090.42) (6,090.42)
Power Supply
Systems 478,677.00 478,677.00 478,677.00 478,677.00
Accumulated
Depreciation -
Power Supply
Systems -14,452.99 -14,452.99 (14,452.99) (14,452.99)
Parks, Plazas
and Monuments 19,364,493.13 19,364,493.13 2,162,890.06 2,162,890.06
Accumulated
Depreciation -
Parks, Plazas
and Monuments -1,212,981.79 -1,212,981.79 (63,333.33) (63,333.33)
Other
Infrastructure
Assets 3,285,041.80 3,285,041.80 4,111,770.75 4,111,770.75
Accumulated
Depreciation-
Other
Infrastructure
Assets (26,179.75) (26,179.75)
Buildings 17,224,601.51 17,224,601.51 16,568,793.09 16,568,793.09
Accumulated -678,252.92 -678,252.92 (323,551.01) (323,551.01)
18
Depreciation -
Buildings
1,609,171.6 1,609,171.6
School Building 21,539,383.87 19,930,212.25 2 7,410,673.87 5,801,502.25 2
Accumulated
Depreciation -
School
Buildings -819,886.32 -819,886.32 (186,238.58) (186,238.58)
Slaughterhouses 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
Other
Structures 20,176,190.32 20,176,190.32 20,176,190.32 20,176,190.32
Accumulated
Depreciation -
Other
Structures -113,822.52 -113,822.52 (64,396.66) (64,396.66)
Machinery 550,190.19 99,750.00 450,440.19 489,436.19 38,996.00 450,440.19
Accumulated
Depreciation -
Machinery -40,423.15 -13,086.25 (27,336.90) (34,746.14) (7,409.24) (27,336.90)
Office
Equipment 4,090,862.38 4,090,862.38 4,952,859.39 4,896,939.39 8,400.00 47,520.00
Accumulated
Depreciation -
Office
Equipment -3,041,955.87 -3,041,955.87 (3,697,832.59) (3,697,832.59)
Information and
Communication
Technology
Equipment 12,525,823.32 12,430,063.32 95,760.00 12,857,885.40 12,415,970.40 95,760.00 137,805.00 208,350.00
Accumulated
Depreciation -
Information and
Communication
Tec -6,572,502.81 -6,569,168.76 (3,334.05) (6,524,457.79) (6,521,123.74) (3,334.05)
Agricultural
and Forestry
Equipment 2,963,170.00 2,963,170.00 544,295.00 544,295.00
Accumulated
Depreciation -
Agricultural
and Forestry
Equipme -345,309.02 -345,309.02 (72,813.82) (72,813.82)
Communication
Equipment 1,578,384.25 1,578,384.25 1,834,976.16 1,834,976.16
Accumulated
Depreciation -
Communication
Equipment -932,375.52 -932,375.52 (1,127,708.82) (1,127,708.82)
Construction 69,130,951.11 69,130,951.11 71,449,951.11 71,449,951.11
and Heavy
19
Equipment
Accumulated
Depreciation -
Construction
and Heavy (26,910,502.45
Equipment -30,116,982.17 -30,116,982.17 ) (26,910,502.45)
Disaster
Response and
Recue
Equipment 159,880.00 159,880.00 102,535.00 102,535.00
Accumulated
Depreciation -
Disaster
Response and
Recue Equip -11,447.50 -11,447.50 (52,977.49) (52,977.49)
Medical
Equipment 800,947.00 800,947.00 1,195,302.50 1,195,302.50
Accumulated
Depreciation -
Medical
Equipment -222,417.78 -222,417.78 (437,156.73) (437,156.73)
Sports
Equipment 48,022.00 48,022.00 48,022.00 48,022.00
Technical and
Scientific
Equipment 475,433.00 475,433.00 467,495.00 467,495.00
Accumulated
Depreciation -
Technical and
Scientific
Equipment -321,116.82 -321,116.82 (295,545.00) (295,545.00)
Other
Machinery and
Equipment 795,436.84 757,071.84 38,365.00 1,345,905.24 1,226,790.24 38,365.00 80,750.00
Accumulated
Depreciation -
Other
Machinery and
Equipment -136,074.86 -133,695.26 (2,379.60) (468,004.26) (465,624.66) (2,379.60)
Motor Vehicles 1,057,809.77 1,057,809.77 792,576.80 792,576.80
Accumulated
Depreciation -
Motor Vehicles -620,694.85 -620,694.85 (616,122.08) (616,122.08)
Other
Transportation
Equipment 1,579,950.00 1,579,950.00 1,579,950.00 1,579,950.00
Accumulated -1,014,255.75 -1,014,255.75 (1,055,585.50) (1,055,585.50)
Depreciation -
Other
Transportation
20
Equipment
Furniture and
Fixtures 1,138,563.14 1,138,563.14 4,691,595.47 4,601,125.47 90,470.00
Accumulated
Depreciation -
Furniture and
Fixtures -673,210.26 -673,210.26 (3,039,920.40) (3,039,920.40)
Books 293,495.70 293,495.70 242,225.70 242,225.70
Accumulated
Depreciation -
Books -14,025.70 -14,025.70 (14,025.70) (14,025.70)
Construction in
Progress- Land
Improvements - 60,009.95 - 60,009.95
Construction in
Progress -
Infrastructure
Assets 90,108,922.76 18,605,622.54 7,275,955.95 64,227,344.27 76,400,410.44 40,671,031.23 36,366.00 35,693,013.21
Construction in
Progress -
Building and
Other
Structures 149,246,981.35 141,758,289.24 7,488,692.11 145,790,904.68 141,760,514.24 684,195.95 3,346,194.49
Work/zoo
Animals 525,000.00 525,000.00 525,000.00 525,000.00
Other Property,
Plant and
Equipment 3,735,000.78 3,735,000.78 300,405.80 288,415.80 11,990.00
Accumulated
Depreciation -
Other Property,
Plant and
Equipment -3,534,159.95 -3,534,159.95 (259,574.22) (259,574.22)
2,160,686.2 2,961,648.1
TOTAL 433,105,215.36 351,952,536.77 6 14,764,648.06 64,227,344.27 380,176,477.93 337,610,727.07 6 3,702,739.49 35,901,363.21
Note 9- Financial Liabilities

ACCOUNTS 2019 GF SEF TF STF 2018 GF SEF TF STF
Accounts 18,253,521.71 18,144,458.10 109,063.61 18,554,259.19 18,067,966.49 486,292.70
21
Payable
Due to Officers
and Employees 1,546,093.85 1,544,343.69 1,750.16 4,634,919.77 4,633,169.61 1,750.16
Interest Payable 905,875.24 905,875.24 -
TOTAL 20,705,490.80 20,594,677.03 110,813.77 23,189,178.96 22,701,136.10 488,042.86
Note 10- Inter-Agency Payables

Due to BIR 1,439,768.37 1,439,768.37 39,947.92 39,947.92
Due to GSIS 72,997.30 72,997.30 1,262,362.17 1,262,362.17
Due to PAG-
IBIG 814,457.46 804,757.46 9,700.00 377,828.34 376,728.34 1,100.00
Due to
PHILHEALTH -2,912.00 -2,912.00 77,596.35 77,596.35
Due to Other 79,502,871.8
NGAs 117,906,590.08 4,216,363.25 34,187,354.97 6 125,951,265.31 4,419,688.51 48,097,041.18 73,434,535.62
Due to LGU's 51,375,478.52 1,746,140.68 445,102.77 49,184,235.07 21,054,618.13 1,405,126.24 671,064.09 18,978,427.80
79,502,871.8
TOTAL 171,606,379.73 8,277,115.06 445,102.77 83,381,290.04 6 148,763,618.22 7,581,449.53 671,064.09 67,075,468.98 73,434,535.62
Note 11- Intra-Agency Payables

Due to Other
Funds 1,165,797.88 444,254.90 5,380.61 143,547.92 572,614.45 833,116.08 313,962.36 37,758.67 102,998.74 378,396.31
TOTAL 1,165,797.88 444,254.90 5,380.61 143,547.92 572,614.45 833,116.08 313,962.36 37,758.67 102,998.74 378,396.31
Note 12- Trust Liabilities

Trust Liabilities 8,092,135.94 1,460,809.71 6,631,326.23 7,109,638.69 3,480,317.76 3,629,320.93
Trust Liabilities
- Disaster Risk
Reduction and 15,248,776.6 10,957,016.5
Management F 15,248,776.60 0 10,957,016.51 1
Bail Bonds
Payable 98,696.00 98,696.00 98,696.00 98,696.00
Guaranty/
Security
Deposits
Payable 23,802,013.94 15,583,200.70 44,067.46 2,759,408.18 5,415,337.60 19,799,898.28 15,903,357.22 51,897.46 1,094,960.67 2,749,682.93
27,295,440.4 17,336,020.3
TOTAL 47,241,622.48 15,583,200.70 44,067.46 4,318,913.89 3 37,965,249.48 15,903,357.22 51,897.46 4,673,974.43 7
Note 13- Bills/Bonds/Loans Payable
22
ACCOUNTS TOTAL GF SEF TF STF 2018 GF SEF TF STF
Loans Payable -
Domestic 112,434,102.66 112,434,102.66 122,210,981.14 122,210,981.14
TOTAL 112,434,102.66 112,434,102.66 122,210,981.14 122,210,981.14
Note 14- Other Payables

10,598,731.1
Other Payables 27,196,407.83 7,299,446.77 118,087.17 14,550,458.90 5,228,414.99 20,441,127.40 6,883,361.70 231,958.83 0 2,727,075.77
10,598,731.1
TOTAL 27,196,407.83 7,299,446.77 118,087.17 14,550,458.90 5,228,414.99 20,441,127.40 6,883,361.70 231,958.83 0 2,727,075.77
Note 15- Tax Revenue

Community
Tax 958,105.46 958,105.46 909,808.11 909,808.11
Real Property
Tax - Basic 2,530,769.55 2,530,769.55 2,230,861.40 2,230,861.40
Special 3,292,930.0 2,766,119.3
Education Tax 3,292,930.06 6 2,766,119.30 0
Business Tax 11,931,228.39 11,931,228.39 10,831,526.46 10,831,526.46
Tax on Sand,
Gravel and
Other Quarry
Products 2,023,260.00 2,023,260.00 1,038,510.00 1,038,510.00
Amusement
Tax 2,750.00 2,750.00 2,228.64 2,228.64
Franchise Tax 151,300.00 151,300.00 111,925.00 111,925.00
Tax Revenue -
Fines and
Penalties -
Other Taxes 326,894.05 326,894.05 275,310.69 275,310.69
3,292,930.0 2,766,119.3
TOTAL 21,217,237.51 17,924,307.45 6 18,166,289.60 15,400,170.30 0 - -
Note 16- Share from National Taxes

Share from Internal
Revenue Collections 177,646,584.00 177,646,584.00 162,253,026.00 162,253,026.00
TOTAL 177,646,584.00 177,646,584.00 162,253,026.00 162,253,026.00
Note 17- Business and Service Income
23
Permit Fees 1,686,350.63 1,686,350.63 1,395,106.25 1,395,106.25
Clearance and Certification
Fees 1,492,033.02 1,492,033.02 1,745,024.14 1,745,024.14
Occupation Fees 715,225.00 715,225.00 660,455.24 660,455.24
Fishery Rentals, Fees 12,728.00 12,728.00 -
Fees for Sealing and
Licensing of Weights and
Measures 90,022.20 90,022.20 77,293.00 77,293.00
Other Service Income 264,911.00 264,911.00 206,668.80 206,668.80
School Fees 4,756,863.00 4,756,863.00 11,587,331.00 11,587,331.00
Rent Income 1,981,611.00 1,981,611.00 1,420,439.34 1,420,439.34
Road Network Fees 2,503,620.00 2,503,620.00 2,339,800.00 2,339,800.00
Receipt from Market
Operation 3,196,666.30 3,196,666.30 3,150,249.10 3,150,249.10
Receipts from
Slaughterhouse Operation 336,085.40 336,085.40 352,618.65 352,618.65
Sales Revenue 18,176.40 18,176.40 59,953.74 59,953.74
Garbage Fees 527,850.00 527,850.00 469,050.00 469,050.00
Hospital Fees 734,887.00 734,887.00 375,154.60 375,154.60
Interest Income 2,095,682.69 2,095,682.69 2,592,547.96 2,592,547.96
TOTAL 20,412,711.64 20,412,711.64 26,431,691.82 26,431,691.82
Note 18- Shares, Grants and Donations

Subsidy from General
Fund Proper/Other Special
Accounts
Share from PCSO 161,797.85 161,797.85 308,958.42 308,958.42
TOTAL 161,797.85 161,797.85 308,958.42 308,958.42
Note 19- Other Income

Miscellaneous
Income 1,778,851.97 1,778,851.97 1,359,619.40 1,359,619.40
TOTAL 1,778,851.97 1,778,851.97 1,359,619.40 1,359,619.40
Note 20- Personal Services

24
47,160,590.4
Salaries and Wages - Regular 2 47,160,590.42 41,823,777.21 41,823,777.21
Salaries and Wages -
Casual/Contractual 622,686.01 622,686.01 329,549.10 329,549.10
Personnel Economic Relief
Allowance (PERA) 3,068,911.19 3,068,911.19 2,810,228.89 2,810,228.89
Representation Allowance (RA) 2,115,900.00 2,115,900.00 2,145,600.00 2,145,600.00
Transportation Allowance (TA) 2,115,900.00 2,115,900.00 2,145,600.00 2,145,600.00
Clothing/Uniform Allowance 797,950.00 797,950.00 690,000.00 690,000.00
Subsistence Allowance 213,500.00 213,500.00 176,477.00 176,477.00
Laundry Allowance 28,950.00 28,950.00 24,325.00 24,325.00
Honoraria 708,670.83 708,670.83 567,176.00 567,176.00
Hazard Pay 1,363,304.33 1,363,304.33 1,161,253.44 1,161,253.44
Overtime and Night Pay 32,904.49 32,904.49 -
Year End Bonus 4,325,356.48 4,325,356.48 3,356,005.75 3,356,005.75
Cash Gift 670,635.20 670,635.20 604,000.00 604,000.00
Other Bonuses and Allowances 4,444,346.96 4,444,346.96 3,951,070.00 3,951,070.00
Life and Retirement Insurance
Contributions 5,678,360.59 5,678,360.59 4,780,526.02 4,780,526.02
PAG-IBIG Contributions 950,914.35 950,914.35 739,237.28 739,237.28
PHILHEALTH Contributions 486,133.24 486,133.24 421,205.95 421,205.95
Employees Compensation Insurance
Premiums 153,457.08 153,457.08 206,791.16 206,791.16
Terminal Leave Benefits 3,949,058.83 3,949,058.83 1,231,707.44 1,231,707.44
10,077,231.4
Other Personnel Benefits 7 10,077,231.47 3,684,107.75 3,684,107.75
88,964,761.4
TOTAL 7 88,964,761.47 70,848,637.99 70,848,637.99
Note 21- Maintenance and Other Operating Expenses

Traveling Expenses - Local 2,455,022.31 2,455,022.31 3,133,673.11 3,133,673.11
Training Expenses 4,083,731.46 4,083,731.46 3,115,729.36 3,115,729.36
Scholarship Grants/Expenses 2,007,318.60 2,007,318.60 1,600,100.00 1,600,100.00
Office Supplies Expenses 2,777,579.15 2,777,579.15 2,365,901.70 2,365,901.70
Accountable Forms Expenses 485,122.00 485,122.00 477,117.25 477,117.25
Food Supplies Expenses 325,210.75 325,210.75 334,836.00 334,836.00
Drugs and Medicines Expenses 1,750,835.00 1,750,835.00 1,855,061.35 1,855,061.35
Medical, Dental and Laboratory
Supplies Expenses 446,160.50 446,160.50 844,797.00 844,797.00
Fuel, Oil and Lubricants
Expenses 7,149,658.51 7,149,658.51 6,697,809.73 6,697,809.73
Agricultural and Marine
Supplies Expenses 52,541.40 52,541.40 87,510.80 87,510.80
Other Supplies and Materials
Expenses 650,732.61 650,732.61 1,276,055.74 1,274,255.74 1,800.00
Water Expenses 195,933.53 189,259.73 6,673.80 113,265.66 103,590.26 9,675.40
Electricity Expenses 5,506,722.68 5,456,168.97 50,553.71 4,533,949.22 4,486,501.87 47,447.35
25
Postage and Courier Services 18,100.00 18,100.00 26,506.00 26,506.00
Internet Subscription Expenses 221,201.70 184,942.90 36,258.80 234,491.84 223,676.43 10,815.41
Awards/Rewards Expenses - - 44,300.00 44,300.00
Prizes - - 764,458.00 764,458.00
Confidential Expenses - - 188,300.00 188,300.00
Legal Services 14,000.00 14,000.00 20,000.00 20,000.00
Auditing Services 293,184.26 293,184.26 352,758.01 352,758.01
Repairs and Maintenance -
Infrastracture Assets 3,521,848.10 3,521,848.10 3,388,454.04 3,388,454.04
Repairs and Maintenance - 1,875,924.1
Buildings and Other Structures 1,193,246.96 752,579.90 440,667.06 2,299,662.61 423,738.50 1
Machinery and Equipment 1,846,178.33 1,846,178.33 1,813,532.78 1,800,532.78 13,000.00
Transportation Equipment 253,018.00 253,018.00 257,550.00 257,550.00
Furniture and Fixtures 1,045.00 1,045.00 - -
Taxes, Duties and Licenses 233,257.65 233,257.65 483,405.84 483,405.84
Fidelity Bond Premiums 72,131.25 72,131.25 4,128.75 4,128.75
Insurance Expenses 382,601.90 382,601.90 271,440.01 271440.01
Advertising Expenses 27,027.50 27,027.50 38,427.60 38,427.60
Printing and Publication
Expenses 2,005.00 2,005.00 19,798.00 19,798.00
Representation Expenses 2,022,140.59 2,022,140.59 919,783.76 919,783.76
Rent Expenses 327,200.00 327,200.00 314,520.00 314,520.00
Membership Dues and
Contributions to Organizations 298,200.00 298,200.00 565,000.00 565,000.00
Subscriptions Expenses 23,183.00 23,183.00 16,803.00 16,803.00
Donations 1,797,064.00 1,797,064.00 1,221,535.00 1,221,535.00
Other Maintenance and
Operating Expenses 35,063,368.09 34,204,740.35 858,627.74 38,487,661.18 37,752,458.29 735,202.89
2,693,865.1
TOTAL 75,496,569.83 74,103,788.72 1,392,781.11 78,168,323.34 75,474,458.18 6
Note 22- Non-Cash Expenses

Depreciation - Infrastructure Assets 1,858,831.19 1,858,831.19 363,520.19 363,520.19
Depreciation – Bldgs & Other Structures 1,037,775.51 1,037,775.51 559,215.45 559,215.45
Depreciation - Machinery and Equipment 7,568,352.28 7,568,352.28 6,791,319.30 6,791,319.30
Depreciation - Transportation Equipment 171,293.02 171,293.02 139,540.89 139,540.89
Depreciation - Furniture and Fixtures 30,270.50 30,270.50 316,818.40 316,818.40
Depreciation - Other PPE 1,700.92 1,700.92 -
10,668,223.4
TOTAL 2 10,668,223.42 8,170,414.23 8,170,414.23
26
Note 23- Financial Expenses
Interest Expense 8,017,081.37 8,017,081.37 5,760,636.98 5,760,636.98
Other Financial Charges 182,509.05 182,509.05 323,707.40 323,707.40
TOTAL 8,199,590.42 8,199,590.42 6,084,344.38 6,084,344.38
Note 24- Transfer, Assistance and Subsidy To

Subsidy to Other Local
Government Units 240,000.00 240,000.00 250,000.00 250,000.00
Subsidies - Others (Financial
Subsidy) 2,628,200.00 2,628,200.00 1,838,258.00 1,838,258.00
Transfers of Unspent Current
Year DRRM Funds to the
Trust Funds 7,186,836.50 7,186,836.50 6,947,826.09 6,947,826.09
Transfer for Project Equity
Share/LGU Counterpart 849,910.00 849,910.00 3,872,727.27 3,872,727.27
TOTAL 10,904,946.50 10,904,946.50 12,908,811.36 12,908,811.36
Note 25- Reconciliation of Net Cash Flows from Operating Activities to Surplus/(Deficit)
GF & SEF
2019 2018
Surplus 26,983,091.33 33,663,844.94
Non-cash Transactions:
Depreciation 10,668,223.42 6,084,344.38
(Increase)/Decrease in Receivables 274,307.63 (368,320.22)
(Increase)/Decrease in Other Current Assets 701,663.89 153,563,739.86
(Increase)/Decrease in (Increase)/Decrease in (52,282,777.56) (110,240,897.61)
Investments due to revaluation
Increase/(Decrease) in Payables 27,237,552.38 42,653,205.81
Net Cash from Operating Activities 13,582,061.09 125,355,917.16
Note 26- SCBAA Reconciliation

27
Reconciliation between actual amounts on a comparable basis as presented in this statement and in the Statement of Financial
Performance for the Year Ended December 31, 2019
Income Personal MOOE Financial Capital Outlay
Services Expenses
Comparison Statement of Budget and Actual 267,877,211.74 89,144,956.8 86,015,953.53 43,070,964.59
2
Entity Differences
Basis Differences: (49,952,958.83) - (182,509.05) 8,199,590.42 (35,287,716.40)
Income not considered budgetary items - - - -
Non-cash income (Surplus CY 2018 & Reversion) (49,952,958.83)
Gain on Sale of Assets
Receipts not considered as income - - - -
Sale of capital assets
Borrowings
Budgetary items not considered as expenses - -
Debt Service (Loan Amortization, Retirement of Debt Instruments) (182,509.05) 182,509.05
Interest Expenses capitalized 8,017,081.37 (8,017,081.37)
Capital Expenditures - - (27,270,635.03)
Timing Differences: - (180,195.35) (11,729,655.76) - (7,783,248.19)
Prepayments charged to current appropriations
Unconsumed Inventories charged to current appropriations
Consumed Inventories & deferred charges charged to prior period
appropriations
Commitments (Obligated but not delivered/billed) (180,195.35) (11,729,655.76) (7,783,248.19)
Per Statement of Financial Performance- General Fund 217,924,252.91 88,964,761.4 74,103,788.72 8,199,590.42 0
7
Special Education Fund

Comparison Statement of Budget and Actual 3,292,930.06 - 1,396,380.61 166,460.00
Entity Differences -
Basis Differences: (166,460.00)
Budgetary items not considered as expenses (166,460.00)
Capital Expenditures (166,460.00)
Timing Differences: - - (3,599.50) - -
Prepayments charged to current appropriations
Unconsumed Inventories charged to current appropriations
Consumed Inventories & deferred charges charged to prior period (3,599.50)
appropriations
Commitments (Obligated but not delivered/billed)
Per Statement of Financial Performance – Special Education Fund 3,292,930.06 0 1,392,781.11 0 0
28
PART II- DETAILED FINDINGS AND
RECOMMENDATIONS
PART II- DETAILED FINDINGS AND RECOMMENDATIONS
A. FINANCIAL
The audit was aimed to ascertain the propriety of financial transactions and
compliance of the agency with prescribed rules and regulations. It was also made to
ascertain the accuracy of financial records and reports, as well as the fairness of
presentation of the financial statements.
The audit consisted of testing the adequacy of the related systems and controls set
by the agency and verification of the accuracy, legality and completeness of the financial
transactions of the agency as well as the application of the other audit procedures
considered necessary under the circumstances.
It was also aimed at determining whether the municipality’s financial statements

present fairly its financial position and results of operations, and whether applicable laws,
rules and regulations were followed.
However, we noted that:

P36,778,123.02 representing the cost of completed projects not yet adjusted
to appropriate asset account contrary to the rules and regulations set forth
under the International Public Sector Accounting Standards (IPSAS)., thus,
correspondingly resulted in the understatement of the Infrastructure Assets
account and misstatements of other affected accounts as reported in the year-
end Financial Statements.
The International Public Sector Accounting Standards (IPSAS) provides the

complete set of the Chart of Accounts to be used by the government agencies under audit,
among which is the proper recognition of the Infrastructure Assets which are existing in
the Municipality. The IPSAS provides the following definitions of some specific
Infrastructure Assets as well as their related Accumulated Depreciations (including their
corresponding account numbers and normal balances):
03 Infrastructure Assets
Account Title Road Networks

Account 1-07-03-010
Number Debit
Normal
Balance This account is used to record the cost incurred in the purchase or
construction or fair value, if acquired through donation or transfers
Description 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. Credit this account for the
derecognition of the carrying amount of the replaced portion.
29
Subsidiary ledgers shall be maintained for each road and each
component of the road.
Transition period of 5 years.
Account Title Accumulated Depreciation - Road Networks
Account 1-07-03-011
Number Credit
Normal
Balance This account is used to record the allocation of cost of road networks
in accordance with the prescribed policy on depreciation. Debit this
Description account upon derecognition of the asset.
Subsidiary ledger shall be maintained for the depreciation of each

road component.
Account Title Accumulated Impairment Losses - Road Networks

Account 1-07-03-012
Number Credit
Normal
Balance This account is credited for the amount recognized to reduce the
carrying value of road networks to its recoverable amount due to
Description impairment. Debit this account upon derecognition of the asset or
reversal of impairment.
Subsidiary ledger shall be maintained for the impairment of each road

component.
Account Title Water Supply Systems

Account 1-07-03-040
Number Debit
Normal
Balance This account is used to record the cost incurred in the purchase or
construction or fair value, if acquired through donation or transfers
Description without cost, of water source facility such as artesian wells,
dams/reservoirs, pumping stations and conduits; irrigation canals and
laterals; waterways, aqueducts, water utilities systems and other
water supply facilities for public use or for income generating
purposes. Credit this account for derecognition of the carrying
amount of the replaced portion.
Account Title Accumulated Depreciation - Water Supply Systems

Account 1-07-03-041
Number Credit
Normal
Balance This account is used to record the allocation of cost of water supply
30
systems in accordance with the prescribed policy on depreciation.
Description Debit this account upon derecognition of the asset.
As of December 31, 2019, it was noted that the Municipality reported
Construction in Progress –Infrastructure Assets balances which were already completed
(as shown in the table below). These were included in the Statement of Financial Position
as such and disclosed in the Municipality’s Notes to Financial Statements for the
Calendar Year 2019. It was also noted that there are some projects that are still awaiting
for complete supporting documents in order to reclassify to proper asset accounts.
Fund Contract Contract Contract Date JEV No.

Title Amount Duration Completed
Special Spillway P 1,175,773.37 By Admin Sep. 6, 2017 2017-08-227
Trust Fund Construction 2017-08-217
(GPBP) 2017-09-239
2017-09-240
Special Improvement 18,999,999.93 Oct. 18, 2014 Jan. 20, 2016 2015-01-
Trust Fund and to June 18, 0011
(Sagana at Extension of 2015 2015-05-003
Ligtas na Level II & III 2015-07-005
Tubig Para PWS (Phase 2015-12-008
sa Lahat I) 2016-01-001
Program)
Special Extension of 9,326,393.77 Aug. 13, Feb. 26, 2016-10-009
Trust Fund Level II & III 2016 to Apr. 2019 2016-11-013
(Sagana at PWS (Phase 10, 2017 2017-05-007
Ligtas na II) 2019-05-006
Tubig Para
sa Lahat
Program)
Trust Fund Rehabilitation 7,275,955.95 Feb. 5, 2019 Aug. 14, 2019-06-123
of Local to June 2, 2019 2019-07-152
Access Road, 2019 2019-08-181
Rizal Street,
Pob. Sur, Don
Carlos
TOTAL P 36,778,123.02
The effect of not reclassifying these Construction in Progress- Infrastructure

Assets to their proper asset accounts which represent the cost of completed projects
misstates some of the year-end Statement of Financial Position and Statement of
Financial Performance account balances as follows:
Account Title Understatement Overstatement

Construction in Progress- 36,778,123.02
Infrastructure Assets
Infrastructure Assets 36,778,123.02
31
Accumulated Depreciation 8,725,946.99*
Government Equity 8,725,946.99
*Computations of Depreciation Expenses and the corresponding Accumulated

Depreciations are shown in Appendix F of this audit report.
Management’s Comment
The management commented, we quote, “There was a project that was recently
completed but still awaiting its Certificate of Completion, thus, was not yet booked. We
will coordinate with the concerned office for the proper documents so as not to delay
reclassification of this CIP- Infrastructure Asset account to the appropriate asset
account. Also, the recommendation was noted and as for the other projects completed in
the prior years, we will reclassify these to their appropriate asset accounts.”
Recommendation
We recommended to the Local Chief Executive to require the Accountant to

coordinate with Municipal Engineer for proper documentation of the completed projects
of the Municipality as the Accountant’s basis in the reclassification entry for the
Construction in Progress –Infrastructure Assets account to the appropriate asset accounts
and in the computation and recording of the corresponding annual depreciation for fair
presentation in the Financial Statements. Also, require the Accountant to adjust the CIP-
Infrastructure Assets account to their appropriate asset account and other affected
accounts as follows:
Infrastructure Assets 36,778,123.02
Construction in Progress 36,778,123.02
Accumulated Depreciation 8,725,946.99

P141,758,289.24 is understated by P16,631,851.54 because the Municipality
did not opt to capitalized the borrowing costs that are directly attributable to
the construction of the 2 Storey Mall-Type Commercial Building
appropriated under the 20% Local Development Fund where the nature of
the source of the funding requires the entity to do so, contrary to the rules on
capitalization of the borrowing costs under the International Public Sector
Accounting Standards (IPSAS) 5 Volume I, hence, affecting the fair
presentation of the Financial Statement account balances as of December 31,
2019.
The updated guidelines on the appropriation and utilization of the 20% of the
Annual Internal Revenue Allotment (IRA) for development projects (Joint Memorandum
Circular No. 2017 – 1 dated February 22, 2017) states that development projects to be
funded under the 20% LDF shall contribute to the attainment of desirable socio-economic
32
development and environmental management outcomes of the LGU, and shall partake the
nature of investment or capital expenditures.
In this bearing, since the interest incurred in relation to the long-term borrowing
of the LGU cannot be avoided as it is necessary in order to obtain the qualifying asset
(Construction of the 2 Storey Mall Type Commercial Building) and the nature of the
charges of the borrowing cost (20% LDF) partakes the nature of investment or capital
expenditures as stated above, the allowed alternative treatment of the borrowing costs
wherein interests incurred is included as part of the cost of the asset must hence be opted.
The International Public Sector Accounting Standards (IPSAS) 5, Volume I stated

the following guidelines in accounting for Borrowing Costs:
“Borrowing Costs
6. Borrowing costs may include:

(a) Interest on bank overdrafts and short-term and long-term borrowings;
(b) Amortization of discounts or premiums relating to borrowings;
(c) Amortization of ancillary costs incurred in connection with the
arrangement of borrowings;
(d) Finance charges in respect of finance leases and service concession
arrangements; and
(e) Exchange differences arising from foreign currency borrowings, to the
extent that they are regarded as an adjustment to interest costs.
Borrowing Costs—Allowed Alternative Treatment

Recognition
1. Borrowing costs shall be recognized as an expense in the period in which

they are incurred, except to the extent that they are capitalized in accordance
with paragraph 18.
2. Borrowing costs that are directly attributable to the acquisition,
construction, or production of a qualifying asset shall be capitalized as part of the
cost of that asset. The amount of borrowing costs eligible for capitalization shall
be determined in accordance with this Standard.
3. Under the allowed alternative treatment, borrowing costs that are directly
attributable to the acquisition, construction, or production of an asset are
included in the cost of that asset. Such borrowing costs are capitalized as part of
the cost of the asset when (a) it is probable that they will result in future economic
benefits or service potential to the entity, and (b) the costs can be measured
reliably. Other borrowing costs are recognized as an expense in the period in
which they are incurred.
4. Where an entity adopts the allowed alternative treatment, that treatment
shall be applied consistently to all borrowing costs that are directly attributable
to the acquisition, construction, or production of all qualifying assets of the
entity.
33
Borrowing Costs Eligible for Capitalization
5. The borrowing costs that are directly attributable to the acquisition,

construction, or production of a qualifying asset are those borrowing costs that
would have been avoided if the outlays on the qualifying asset had not been made.
When an entity borrows funds specifically for the purpose of obtaining a
particular qualifying asset, the borrowing costs that directly relate to that
qualifying asset can be readily identified.”
As of December 31, 2019, the Municipality of Don Carlos incurred interests in

the current and prior years totaling P16,631,851.54 in relation to its loans from Landbank
of the Philippines (LBP) for the construction of a 2 Storey Mall-Type Commercial
Building in which the appropriation for the same was sourced from the 20%
Development Fund- “Capital Outlay”. The interests incurred were then treated as
“outright expense” for the years they were incurred and closed to the Government Equity
Account, as shown in the table below.
Interest Incurred in relation to the Construction of 2 Storey Mall-Type Commercial

Building and Charged to Outright Expense
Source of Fund Amount of Interest Year Charged to Expense

20% LDF 8,017,081.37 CY 2019
20% LDF 5,760,636.98 PY 2018
20% LDF 1,924,829.43 PY 2017
20% LDF 929,303.76 PY 2016
TOTAL P 16,631,851.54*
*Breakdown of the details on the interest expenses recorded each year is shown in
Appendix G of this audit report.
The result of the above condition understates the reported balance of the
Government Equity and Construction in Progress- Buildings and Other Structures
accounts by a total of P16,631,851.54 respectively and hence, affects the fair presentation
of the reported year-end balances of the Financial Statements.
The management commented, we quote, “We will align the method used in
recording of the borrowing costs with the guidelines on the appropriation and utilization
of the 20% of the Annual Internal Revenue Allotment (IRA) for the Municipality’s
development projects.”
Recommendation
34
We recommended to direct the Municipal Accountant to align the method used in
recording of the borrowing costs with the guidelines on the appropriation and utilization
of the 20% of the Annual Internal Revenue Allotment (IRA) for the Municipality’s
development projects set forth under Joint Memorandum Circular No. 2017 – 1 dated
February 22, 2017 and perform adjusting entries (as stated below) following the
International Public Sector Accounting Standards (IPSAS) 5 Volume I (Borrowing Cost
—Allowed Alternative Treatment) so as to fairly reflect the balances of the accounts in the
Financial Statements. Disclose also the method used in recording the borrowing costs in
the year-end Financial Statements.
Construction in Progress –Buildings and Other Structures 16,631,851.54

3. There is an unreconciled balance of Construction in Progress account

between the Municipality’s General Ledger and its supporting schedules by a
total of P16,345,104.77 due to the agency’s failure to maintain complete
subsidiary ledgers for the said account as required under Section 10 of the
New Government Accounting System (NGAS) Manual Volume 2, hence, the
balance appearing in the financial reports as of December 31, 2019 under the
CIP- Infrastructure Assets account cannot be ascertained.
Chapter 1 (The Books of Accounts, Registries and Cash Records) of the “New
Government Accounting System (NGAS) Manual Volume 2” partly states that the books
of accounts used by the local government unit shall consist of the following:
“1. records for recording transactions in chronological order, known as the

journals or books of original entry; and
2. records for classifying and summarizing the effects of the transactions on

individual accounts, known as ledgers or books of final entry.”
With this, Section 10 of the same chapter states about the Subsidiary Ledger (SL)
which must also be maintained by the agency. The Subsidiary Ledger (Annex A) is a book
of final entry containing the details or breakdown of the balances of the controlling
account appearing in the General ledger. Postings to the subsidiary ledgers generally
come from the source documents. Examples of general ledger accounts which has
subsidiary ledgers are Cash – Disbursing Officers, Cash in Bank – Local Currency
Current Accounts, Accounts Receivable, Accounts Payable, Special Accounts in the
General Fund, etc. The totals of the subsidiary ledger balances shall be reconciled to
their respective control account at the end of every month.
The General Ledger balance for Construction in Progress- Infrastructure Assets

account as of December 31, 2019 amounted to P18,605,622.54, however, its supporting
schedule amounted only to P2,260,517.77 as of the even date showing a difference of
P16,345,104.77 and hence, unreconciled. The following data show a summary of the
unreconciled balance on the said account (the breakdown of the details per supporting
schedule of the CIP-Infrastructure Assets is shown in Appendix H):
35
TOTAL, Per supporting schedule of CIP- Infrastructure Assets 2,260,517.77
TOTAL, Per General Ledger of CIP- Infrastructure Assets 18,605,622.54
Difference (Unreconciled) P16,345,104.77
The CIP- Infrastructure Assets account was not supported with completed
subsidiary ledgers particularly those infrastructure projects implemented in the prior
years. The Municipal Accounting Office (MACCO) was not furnished with the pertinent
Program of Works (POWs) for each implemented infrastructure projects and Purchase
Requests (PR) did not provide specific details as to amount, location and other relevant
information. Accordingly, the source of these balances were from lump sum
appropriation from prior years and reconciliations of these balances and retrieval of
documents are currently ongoing.
As a result, the balance reflecting in the Financial Statements as of December 31,

2019 amounting to P18,605,622.54 under the Construction in Progress- Infrastructure
Assets account cannot be ascertained, affecting the fair presentation thereof.
Management’s Comment:
The management commented, we quote, “We will continue in giving our utmost
efforts in retrieving the necessary documents in order to answer the unreconciled
Construction in Progress- Infrastructure Assets balance between the General Ledger and
its supporting schedules. In fact, there was a substantial decrease of the unreconciled
balance from the prior year because of continuous coordination among concerned
offices to trace and determine the unreconciled balances and of retrieving these
documents.”
Recommendation:
We recommended to the management to direct the Municipal Accountant to trace

and determine the unreconciled Construction in Progress- Infrastructure Assets balance
between the General Ledger and its supporting schedules to ascertain the balances of the
account as reflected in the Financial Statements as of December 31, 2019.
4. The Municipality failed to record at the start of ensuing year, previous and
current years Real Property Tax Receivable and Deferred Real Property Tax
Income totaling P12,293,395.70, a non-compliance to the provisions of
Section 246 of RA 7160 and Section 19 of the Manual on New Government
Accounting System, thus, huge amount of real property tax collectible was
not reflected in its year-end financial statement.
Section 246 of RA 7160 provides for the date of Accrual of Tax. It mandated that
the real property tax for any year shall accrue on the first day of January and from that
date it shall constitute a lien on the property which shall be superior to any lien,
mortgage, or encumbrance of any kind whatsoever, and shall be extinguished only upon
the payment of the delinquent tax.
36
The Manual on the New Government Accounting System presents the basic
policies and procedures to be adopted by all local government units. Section 19 thereof
states that for recording real property taxes the modified accrual shall be used for. This
means that at the beginning of the year, Real Property Tax Receivable and Special
Education Tax Receivable shall be established. This is in view of the need to record in
the books not mere income estimates from real property taxes but actual receivables from
said taxes.
To avoid appropriating uncollected revenues which might result to huge cash

overdraft, the same shall be credited to Deferred Real Property Taxes Income/Deferred
Special Education Tax Income.
The Statement of Financial Position of the municipality shows no establishment

of Real Property Tax Receivable and Deferred Real Property Taxes Income accounts
both for the General and Special Education Funds. Per data gathered by this Office, the
RPT receivable of the municipality as of January 1, 2019 is shown below:
Report on Real Property Assessment

As of the Quarter Ending December 31, 2018
as of 4th Quarter Ending December 31, 2018

# of
Real Total Rate
Taxable Property
Pro- Assessed Assessed of Basic Tax SEF Tax
with Total
perty Value Value net of Lev Collectible Collectible
Restrictions
Restriction y
Residential 9557 150,364,100.0 355,610.00 150,008,490.0 1% 1,500,084.9 1,500,084.9 3,000,169.80
Agricultural 8714 322,383,819.00 29,074,867.1 0293,308,951.9
1%
02,933,089.5 02,933,089.5
5,866,179.04
Commercial 938 118,687,973.00 012,741,460.0 0
105,946,513.0 1%
2
1,059,465.1 2
1,059,465.1 2,118,930.26
0 0 0 3 3
Industrial 43 57,381,620.00 - 57,381,620.00 1% 573,816.20 573,816.20 1,147,632.40
Mineral - - - - - -
Timber - - - - - -
Special - - - - - -
 Hospital 9 8,024,210.00 - 8,024,210.00 1% 80,242.10 80,242.10 160,484.20
 Scientific - - - - - -
 Cultural - - - - - -
 Others - - - - - -
Total
Taxable 1926 656,841,722.0 42,171,937.1 614,669,784.9 6,146,697.8 6,146,697.8 12,293,395.7
Properties 1 0 0 0 1% 5 5 0
The foregoing condition results to an understatement of affected Statement of

Financial Position accounts. The Financial Statement fails to reflect the municipality’s
huge amount of property tax collectible which Management may adopt measure/s or
remedies to accelerate their collectability rate for possible use for some envisioned
programs, projects and activities.
Management’s Comment:
37
The management commented, we quote, “The Municipality will enhance
reconciliation on its real property tax collectible balance so that the correct balance will
be reflected on the financial statements. Some of the concerns was because of the
furnishing of reports needed being the bases in recording taxable property, thus, we will
try to make some improvements in this area.”
Recommendation:
We recommended to the management, that every start of the year, to require the
Municipal Assessor to furnish the Municipal Treasurer and Municipal Accountant the
Report on Real Property Assessment as the basis in recording the taxable Real Property,
accruing for both General and Special Education Funds. Also, the Municipal Treasurer’s
and Accounting Offices arrive at the correct real property tax collectible balance so that
the same could be reflected in the financial statements of the municipality.
5. Collections made in CY 2019 totaling P2, 194,442.98 in the General Fund and
P2, 061,665.47 in the Special Education Fund were not booked during the
year but recorded in CY 2020 due to the failure of the Municipal Treasurer
to submit the pertinent Reports of Collections & Deposits on time to the
Office of the Municipal Accounting Office for recording the same in the
books of accounts, which condition is inconsistent with the
matching/consistency principle of accounting that resulted to understatement
of Cash, Revenue and Liability accounts presented in the financial
statements as of December 31, 2019.
The International Public Sector Accounting Standards (IPSAS) states the

following definition of accounts:
Account Title Cash – Local Treasury

Account Number 1-01-01-010
Normal Balance Debit
Description This account is used to record the amount of cash received by the Local Treasurers
for deposit to Authorized Government Depository Bank (AGDB). Credit this
account for deposits to AGDBs.
Account Title Cash in Bank - Local Currency, Current Account

Normal Balance Debit
Description This account is used to record deposits with AGDBs, trust receipts authorized
under specific contracts and agreements; Revolving Fund under specific laws; and
credit advices/memos received from the AGDBs. This account is credited for check
drawn against the account, debit advices/memos received from the AGDBs.
Account Title Due to LGUs

Normal Balance Credit
Description This account is used to record the receipt of funds for delivery of goods/services as
38
authorized by law, fund transfers from LGUs for the implementation of specific
programs or projects, share in LGU income and other inter-agency transactions.
Debit this account for delivery of goods/services, liquidation of funds received,
receipt of share in LGU income and settlement of liabilities.
Account Title Due to National Government Agencies

Description This account is used to record the receipt of funds for delivery of goods/services as
authorized by law, fund transfers from NGAs for implementation of specific
programs or projects and other inter-agency transactions. Debit this account for
delivery of goods /services, liquidation of funds received and settlement of
liabilities.
Account Title Accounts Payable

Description This account is used to record receipt of goods or services on account in the normal
course of trade and business operation. Debit this account for payment or
settlement of liabilities.
The matching principle is one of the basic underlying guidelines in accounting.

The matching principle directs an agency to report an expense on its income statement in
the period in which the related revenues are earned. Further, it results in a liability to
appear on the Statement of Financial Condition for the end of the accounting period. The
matching principle is associated with the accrual basis of accounting and adjusting
entries.
If an expense is not directly tied to revenues, the expense should be reported on

the income statement in the accounting period in which it expires or is used up. If the
future benefit of a cost cannot be determined, it should be charged to expense
immediately.
Account Title Community Tax

Description This account is used to record the taxes levied upon every inhabitant of the
Philippines, 18 years of age or over, who have been regularly employed for at
least 30 continuous working days during the calendar year; or who is in business
or occupation; who owns real property with an aggregate assessed value of
P1,000 or more and who is required by law to file an income tax return. This
account also includes the annual community tax levied upon
partnership/corporation engaged in or doing business in the Philippines and
required by law to file an annual income tax return.
Subsidiary ledger:
51 - Community Tax – Individual

52 - Community Tax – Corporation
39
For Corporation
Account Title Real Property Tax- Basic

Description This account is used to record the basic tax imposed on real property such as
land, buildings, machinery and improvements affixed or attached to the real
property.
Subsidiary ledger:
Subsidiary:
01 - Real Property Tax Land

02 - Real Property Tax Building
03 - Real Property Tax Machinery
Account Title Business Tax

Description This account is used to record the taxes on persons or entities in the course of
trade or business.
Subsidiary ledgers:
01 – Business Tax – Manufacturers, assemblers, etc. – this includes taxes

imposed on manufactures, assemblers, repackers, processors, brewers, distillers,
rectifiers and compounders of liquors, distilled spirits, and wines or
manufacturers of any article of commerce. (Sec. 143 (a) of RA 7160.
02 – Business Tax – Wholesalers, distributors, etc. – this includes taxes imposed
on wholesalers, distributors or dealers in any article of commerce. (Sec. 143 (b)
o RA 7160
03 – Business Tax – Exporters, etc. – this includes taxes on exporters, and on
manufacturers, millers, producers, wholesalers, distributors, dealers or retailers
of essential commodities. (Sec. 143 (c).
04 – Business Tax- Retailers – this includes taxes imposed on business
establishments engaged in the sale of goods where the purchaser buys the
commodity for their own consumption irrespective of the quantity of the
commodity sold.
05 – Business Tax- Contractors and Independent Contractors – this includes
taxes imposed on persons (natural or juridical) not subject to professional tax
involve in the sale of all kinds of services for a fee.
06 – Business Tax – Banks and other Financial Institutions – this includes
business taxes imposed on banks and banking institutions, insurance companies
and financing companies.
07 – Business Tax - Peddlers – this includes business taxes imposed on retailers
selling their commodities on foot or motorized along the way.
99 – Business Tax – Other Businesses - this includes business taxes imposed not
otherwise previously classified.
Account Title Franchise Tax
40
Description This account is used to record the tax imposed by local government units on
businesses enjoying franchise.
Account Title Tax Revenue - Fines and Penalties - Other Taxes

Description This account is used to record all fines and penalties imposed on other taxes.
Account Title Permit Fees

Description This account is used to record the fees and charges collected in the exercise of
regulatory powers. This includes permit fees collected from businesses,
building, zonal location and others.
Subsidiary ledgers:
1- Business Permit Fees

2- Building Permit Fees
3- Zonal/Location Permit Fees
4- Tricycle Operators Permit Fees
5- Fishery Rental Fees and Privilege Fees
6- Fees on Weights and Measures
7- Other Permit and Licenses
Account Title Clearance and Certification Fees

Description This account is used to record the fees collected for the issuance of
clearances/certificates to individuals/organizations/groups/corporations.
Subsidiary ledgers:
1 Police Clearance
2 Secretary’s Fees
3 Health Certificate
4 Real Property Tax Clearance
5 Other Clearance and Certification
Account Title Occupation Fees

Description This account is used to record the fees imposed on all individuals employed or
practicing their callings which do not require board examinations.
Account Title Fees for Sealing and Licensing of Weights and Measures
41
Description This account is used to record the fees imposed for sealing and licensing of
weights and measures in accordance with Sec. 148 of RA 7160.
Account Title Other Service Income

Description This account is used to record the fees collected from service income not falling
under any of the specific service income accounts.
Account Title Sales Revenue

Description This account is used to record the income from sale of merchandise and other
inventory items and services in the regular course of business.
Account Title Garbage Fees

Description This account is used to record the fees for garbage collection and other
environmental and sanitation fees.
Account Title Hospital Fees

Description This account is used to record the fees/charges for hospital services rendered
including medical, dental and laboratory services.
Account Title Miscellaneous Income

Description This account is used to record the receipt revenue and receipts not elsewhere
classified under any specific income account.
Review of Reports of Collection and Deposits (RCDs) disclosed that total

collections of P4, 256,108.45 made in CY 2019 for General Fund Proper Fund (P2,
194,442.98) and Special Education Fund (P2, 061,665.47) were recorded in CY 2020.
(Details are shown in Appendix I.1-I.2)
The Office of the Municipal Treasurer failed to submit the pertinent Reports of
Collections & Deposits (RCDs) duly supported with official receipts to the Office of the
Municipal Accountant, the reason for the non-booking of the said collections in the books
of accounts in CY 2019.
42
The condition is not consistent with the above-mentioned matching/consistency
principle of accounting that resulted to understatement of Cash, Revenue and Liability
accounts presented in the financial statements as of December 31, 2019.
The management commented, we quote, “The Municipality had not booked

during the year its collections made in the current year because it could hardly cope up
with the timeframe in meeting cut-offs and eventually, in recording these collections. The
Municipality will exert efforts to diligently monitor cut-offs as well as the collection
reports for recoding purposes. If warranted, the Municipality will include on its
disclosure (e.g. Notes to Financial Statements) the said collections made in the current
year that were not booked during the year.”
Recommendation
We recommended to the management to require the Municipal Treasurer to

diligently monitor that collections should be cut-off at the end of the month to report
collections made for the period. Subsequently, prepare collection reports for their
submission to the Municipal Accountant’s Office. He latter should demand complete
submission of collection reports from the former to properly account collections made
either remitted or not remitted during the year. Otherwise, the condition does not follow
with the consistency principle of accounting and resulted to understatement of Cash,
Revenue and Liability accounts presented in the financial statements as of the end of the
year.

understated by a total of P160,358.53 because accrued interest was not
recognized at the end of the year contrary to Section 111 and 112 of PD 1445,
thereby affecting the fair presentation of the year-end Financial Statements
thereof.
Chapter 2 of PD 1445, Accounts and Accounting states that:
“Section 111. Keeping of accounts.
(1) The accounts of an agency shall be kept in such detail as is necessary to

meet the needs of the agency and at the same time be adequate to furnish the
information needed by fiscal or control agencies of the government.
(2) The highest standards of honesty, objectivity and consistency shall be
observed in the keeping of accounts to safeguard against inaccurate or
misleading information.
Section 112. Recording of financial transactions.
43
Each government agency shall record its financial transactions and operations
conformably with generally accepted accounting principles and in accordance
with pertinent laws and regulations.”
Also, the Local Government Chart of Accounts of the International Public Sector
Accounting Standards (IPSAS) provides the following definition in the recording of
transactions:
“Interest Receivable (1-03-01-070)- This account is used to record the amount of

accrued interests on advances and investments. Credit this account for receipt of
the interest. At the cut-off period, record the expected interest as interest
receivable based on effective interest rate.”
Review of the details of the High-Yield Savings Accounts of the Municipality

obtained from Landbank as of December 31, 2019 disclosed the following information:
High Yield Savings Interest Income Withholding Tax Interest Income Net of
Account Number Withholding Tax
1541120307 P 50,154.90 P 10,030.98 P 40,123.92
1541122997 56,275.26 11,255.05 45,020.21
1541120471 42,089.99 8,418.00 33,671.99
1541128995 6,954.58 1,390.92 5,563.66
1541123004 37,084.79 7,416.96 29,667.83
1541129584 7,888.65 1,577.73 6,310.92
TOTAL P200,448.17 P 40,089.64 P 160,358.53
The non-provision of the Interest Receivable resulted to understatement of the

account in the Year-End Statement of Financial Position. In such case, it could affect the
reliability of the Financial Statement of the Municipality as of December 31, 2019 as it
renders the correctness of the recorded interest receivable balance doubtful.
The management commented, we quote, “The accrued interest was not yet
recognized at the end of the year as the bank statements being the bases in recording
these interests were not yet available at year-end, thus, the interests that should
supposedly be recorded for that period were recorded in the ensuing year. However, we
will note the recommendation and interests that could already be calculated and
determined at year end will be recognized as interest receivable.”
Recommendation
We recommended to the management to instruct the Municipal Accountant to

recognize accrued interest receivable and interest income accounts. Set up subsidiary
record for interest earned on each savings account for the period to facilitate transfer
thereof to General Fund Proper in order to enhance the monitoring of interest earned and
its balances.
44
7. The accuracy and validity of the reported balance of Other Receivable
totaling P87,167.85 under the Trust Fund is highly doubtful as this has
remained dormant for more than fifteen (15) years and the itemized account
names and balances of the same could hardly be determined because of the
absence of any detailed supporting schedules which is not in consonance with
Section 6.1 and 6.2 of COA Circular No. 2016-005, thus depriving the
government of funds for its operations and affecting the fair presentation of
accounts in the Financial Statements (FSs).
COA Circular 2016 -005 dated December 19, 2016, 6.0: GENERAL
GUIDELINES states the following:
“6.1 All government entities shall conduct regular monitoring and analysis of
receivable accounts to ensure that these are collected when these become due and
demandable and that cash advances and fund transfers are liquidated within the
prescribed period depending upon their nature and purpose; and
6.2 All government entities shall prepare the schedule of all receivables,
unliquidated cash advances, and fund transfers of December 31, 2015 and
quarterly thereafter.”
The Status of Other Receivables as of December 31, 2019 however discloses an

unidentified Other Receivable balance of P87,167.85 which could not be further
validated because the agency could not provide any supporting schedules showing the
details of the latter as of the moment.
Further verification revealed that the balance has long been outstanding since the
year 2004, as this was already disclosed in the financial statements of the said year but
still without any detail as to its individual account names and balances. Also, accordingly,
the turn-over by various bookkeepers through the years make it difficult to trace the
details of the original transactions on the said account.
The unreliable receivable account balance due to unsupported dormant receivable

which has long been outstanding/remained past due/dormant affects the fair presentation
of the accounts in the Financial Statements (FS) and also deprived the government of
funds for its operations which could be utilized in other services of the Municipality had
the latter conducted regular monitoring and analysis of receivable accounts to ensure that
these are collected when these become due and demandable.
The management commented, we quote, “The balances of the said account were
only turned over for several years, thus, retrieval of the documents to support these
balances is not easy. However, we will review the details and its status for appropriate
action.”
45
Recommendation
We recommended to the management to require the Municipal Accountant to

review the details and status of the balances to determine the appropriate action to be
done. The write-off of balances may be recommended by the Accountant if warranted
subject to prescribed procedures, rules, and regulations of COA.
8. The Municipality used the Direct Expense Method instead of the Perpetual
Inventory Method in the recording of purchases of its Drugs and Medicines
while issuances thereof were not evidenced by Requisition and Issue Slips
(RIS) which was not compliant with the International Public Sector
Accounting Standards (IPSAS) No. 12 and Section 114 of NGAS Manual
pertaining to Perpetual Inventory Method for supplies resulting in unreliable
balances of Inventory and Expense accounts.
Paragraph 9 (b) 12 of International Public Sector Accounting Standard provides

that:
“ inventories as assets in the form of materials or supplies to be consumed or

distributed in the rendering of services. Paragraph 44 of the same standards
provides that when inventories are sold, exchanged or distributed, the carrying
amount of those inventories shall be recognized as an expense in the period in
which the related revenue is recognized. If there is no related revenue, the
expense is recognized when the goods are distributed or the related service is
rendered.”
New Government Accounting System for Local Government Unit,

Volume 1, Section 114 states that:
“Perpetual Inventory Method. – Purchase of supplies and materials for stock,

regardless of whether or not they are consumed within the accounting period,
shall be recorded as inventory following the perpetual inventory method. Under
the perpetual inventory method, an inventory control account is maintained in the
General Ledger on a current basis. In addition, detailed inventory records are
maintained for each inventory item.
Regular purchases shall be coursed thru the inventory account and issuances
thereof shall be recorded as they take place, except those purchased out of the
petty cash fund which shall be for immediate use and for stock in which case shall
be charged immediately to the appropriate expense accounts.”
During the year, the Municipality purchased P1,750,835.00 drugs and medicines
charged to General Fund Proper and these were treated in the books as outright expense.
However, inventory report submitted by the Municipal Health Office disclosed that there
were still stocks of medicines available for issuances.
46
The Municipal Health Office did not prepare and maintain individual stock cards
and other required inventory forms, such as Stock Cards and Summary of Drugs and
Medicines in the receipt of the latter. A logbook showing the description of the medicine,
the quantity, the printed name, address and signature of the recipients was then prepared
but not duly accomplished. Also, no Requisition and Issue Slip (RIS) was prepared by
Requisitioning Officer when distributed to Health Centers and other offices.
In effect, there is an understatement of Drugs and Medicines Inventory account by

P58,545.00 representing the value of medicines still on hand while overstating the
Government Equity at the same amount. (Appendix J shows the Inventory of Drugs and
Medicines as of December 31, 2019). Moreover, there is no point of order for the
procurement of these drugs and medicines when there’s no available data.
Recommendation
We recommended to the management to:
 Strictly adhere to the provisions of the NGAS Manual;

 Require the accountant to stop the practice of recording/charging regular
purchases of drugs and medicines immediately to the expense accounts and
should maintain on a current basis in the General Ledger (GL) and Inventory
Account all purchases of drugs and medicines for stock, regardless of whether or
not they are consumed within the accounting period. Issuance thereof shall be
recorded based on the Report of Drugs and Medicines Issued;
 Require the accountant to maintain and update regularly the Ledger Card for each
inventory stock which shall contain the details of the GL accounts and to
reconcile their cards/records regularly with that of the Municipal Health Office;
and
 Designate a General Services Officer (GSO) and to conduct an inventory of
supplies and materials annually, prepare a Report on the Physical Count of
Inventories by type of inventory as of given date, prepare on a monthly basis
Report on Supplies and Materials Issued (RSMI) based in the Requisition and
Issue Slips, and maintain Stock Cards for inventories and reconciled with the
records of the Accounting Office regularly.
B. COMPLIANCE
8. The orderly and timely disposal of its unserviceable properties amounting to

P3,735,000.78 were not initiated contrary to Section 79 of P.D. 1445, which
may not be beneficial to the government in terms of higher appraisal value
for the property, lesser storage cost and better management of limited
storage space.
Section 79 of P.D. 1445 provides that:

47
“Destruction or sale of unserviceable property. When government property has
become unserviceable for any cause, or is no longer needed, it shall, upon
application of the officer accountable therefore, be inspected by the head of the
agency or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsalable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest
bidder under the supervision of the proper committee an award or similar body in
the presence of the auditor concerned or other duly authorized representative of
the Commission, after advertising by printed notice in the Official Gazette, or for
not less than three consecutive days in any newspaper of general circulation, or
where the value of the property does not warrant the expense of publication, by
notices posted for a like period in at least three public places in the locality where
the property is to be sold. In the event that the public auction fails, the property
may be sold at a private sale at such price as may be fixed by the same committee
or body concerned and approved by the Commission.”
A test validation and inspection of Other Property Plant and Equipment account
disclosed that various unserviceable property of the Municipality remained in its vicinity
which is in the state of being full during inspection. Summary list of disposable assets
submitted to this office as of December 31, 2019 which are not yet disposed with a total
value of P3,735,000.78 is shown in the table below.
OFFICE TOTAL COST OF UNSERVICEABLE/

OBSOLETE ITEMS
Sangguniang Bayan Office P 302,526.00
Philippine National Police 237,000.00
Municipal Treasurer's Office 70,327.00
Municipal Planning and Development Office 345,413.00
Municipal Mayor's Office 62,159.78
Municipal Health Office 105,050.00
Municipal Engineering Office 2,319,000.00
Municipal Budget Office 74,825.00
Municipal Assessor's Office 85,300.00
Municipal Agriculture Office 30,000.00
Liga ng Barangay 30,000.00
Fire Department 22,250.00
Department of Interior and Local Government 51,150.00
GRAND TOTAL P 3,735,000.78
The failure to have timely and orderly disposal of unserviceable properties could
hinder the generation of greater benefits to the Municipality in terms of higher appraisal
value for the property, lesser storage cost and better management of limited storage
space.
The management commented, we quote, “The necessary procedures to be

undertaken as recommended were noted. As of the moment, the Municipality lacks the
48
necessary manpower/committee to take charge on the disposal of these unserviceable
properties, but it did initiate on identifying and reclassifying the properties as initial step
on the disposal and dropping of the same.”
Recommendation
We recommended to the management to require the Municipal Treasurer to timely

prepare the Inventory and Inspection Report on Unserviceable Property (IIURP) to report
all unserviceable and obsolete items previously taken up in the books as assets so that
they may be properly monitored, disposed of and dropped from the accounts.
Also, we recommended to the management to create a disposal committee to

conduct inspection/inventory of disposable assets and determine its appraised value and
the mode of disposal in accordance with the existing guidelines on supply and property
management.
10. Allocation from their Special Education Fund (SEF) for Early Child Care
Development program was not provided as required under Section 7 (b) of
RA No. 10410, otherwise known as the "Early Years Act of 2013", thereby
depriving the intended beneficiaries of the expected benefits which could be
derived from the program.
Section 7 (b) of RA No. 10410, otherwise known as the "Early Years Act of 2013"
provides that LGUs shall include allocations from their SEF for the ECCD Program as
follows:
“SEC. 7. Implementing Arrangements and Operational Structures. – The

implementation of the National ECCD System shall be the responsibility of the
ECCD Council.
xx
(b) Responsibilities of Local Government Units. – Local government units (LGUs)
shall include allocations from their Special Education Fund (SEF) and Gender
and Development (GAD) Fund in addition to other local funds to be utilized for
the following purposes:
(1) Support the implementation of their ECCD Program;

(2) Organize and support parent cooperatives to establish community-based
ECCD programs;
(3) Provide counterpart funds for the continuing professional development of their
ECCD public service providers; and
(4) Provide the facilities for the conduct of their ECCD Program.”
Verification of the Registry of Appropriations and Allotments of the Special
Education Fund (shown in Appendix K of this audit report) and review of the
Program/Project/Activities of the agency as of December 31, 2019 revealed that there
was no allocation for the Early Child Care Development programs as enumerated in the
above provision. Total appropriation for the Special Education Fund (SEF) as of the date
49
amounted to P3,593,700.00 but the Function/Program/Project/Activity showed no
allocation for the Early Child Care Development programs as specifically stated in the
above provision.
The non-allocation of Early Child Care Development programs from the Special
Education Fund (SEF) is not only contrary with the guidelines set under the above
cited provisions but also deprived the intended beneficiaries of the program where the
amount allocated could have been utilized for the program.
The management commented, we quote, “We have conducted a meeting with the
Local School Board and explained regarding the mandatory allocations of SEF for the
Early Child Care Development (ECCD) Program and they have agreed for the provision
of the allocation. We will comply with the recommendation and follow the guidelines
provided.”
Recommendation
We recommended to the management to review the budget as well as the

Programs, Activities and Projects (P/A/Ps) of the Municipality to align with the
requirements stated under Section 7 (b) of RA No. 10410, otherwise known as the "Early
Years Act of 2013" which provides for the allocations of SEF for the ECCD Program so
that the intended beneficiaries/school children can enjoy the benefits and their
educational standards will be uplifted.
11. The agency did not furnish copies of perfected contracts on Supply and
Delivery project totaling P14,336,244.87 and Infrastructure Project
amounting to P25,089,221.29 to the audit team within the period prescribed
under COA Circular No. 2009-001, hindering the generation of timely and
relevant audit results on the legality, validity and propriety of the documents
within the contract.
Under COA Circular No. 2009-001 dated February 12, 2009, government agencies
are required to furnish the Auditor with a copy of perfected contracts and purchase orders
within five (5) working days upon approval together with the supporting documents for
review, to wit:
“3.1 Contracts
3.1.1 Within five (5) working days from the execution of a contract by the
government or any of its subdivisions, agencies or instrumentalities, including
government-owned and controlled corporations and their subsidiaries, a copy of
said contract and each of all the documents forming part thereof by reference or
incorporation shall be furnished to the Auditor of the agency concerned. In case
of agencies audited on an engagement basis, submission of a copy of the contract
50
and its supporting documents shall be to the Auditor of the mother agency or
parent company, as the case may be.”
Review of contracts revealed that some of the contracts and their supporting
documents furnished by the BAC to the Office of the Auditor were not within the
required five (5) working days from the execution of a contract. Data obtained from the
Schedule of the Submission of Contracts as of December 31, 2019 shows the following
delayed contracts:
Contracts on Supply and Delivery Projects Received in the Calendar Year 2019
No. of
Working Contract Name Contract Date of Notice Date Contract
Days from to Proceed was Submitted
Date Amount
Contract
was
Perfected
29 Supply & Delivery of 2,112,793.27 December 5, January 15,
Fuel Intended for 2019 2020
Municipal Heavy
Equipment, Dumptrucks
and Other Municipal
Vehicles of LGU, Don
Carlos, Bukidnon
25 Supply and Delivery of 247,510.00 August 1, September 4,
Various Construction 2019 2019
Materials intended for
Bone Niche
Construction-Phase 1,
Don Carlos (Complete
Bid)
6 Supply and Delivery of 3,515,800.00 September September 25,
Various Grocery Items 17, 2019 2019
intended for
Supplemental Feeding for
Children among 58 Day
Care Centers of LGU,
Don Carlos, Bukidnon
22 Supply and Delivery of 3,988,338.40 March 18, April 17, 2019
Various Construction 2019
Materials for the
Construction of DCPC
Gate, Guard House &
Perimeter Fence - Lot A
(Complete Bid)
6 Supply and Delivery of 968,850.00 February 12, February 19,
Materials for
Rehabilitation of Local
51
Roads at Aguinaldo
Street, Poblacion, Don
Carlos, Bukidnon
(Complete Bid)
27 Supply and Delivery of 991,283.00 December January 23,
Lights & Sound 16, 2019 2020
Equipment with
Installation for Municipal
Gym
12 Supply and Delivery of 554,449.00 January 21, February 7,
Materials intended for
Organic Fertilizer
Production Storage for
Farmers at Bocboc,
Buyot, Minsalagan,
Sinangguyan, Old
Nongnongan & San
Antonio West
59 Supply and Delivery of 560,505.00 November February 21,
Construction Materials 26, 2018 2019
intended for Concreting
of Municipal Road along
Magsaysay St. ( Lot B
only)
Construction Materials 2019 2019
intended for Concrreting
of Municipal Road along
Magsaysay St. ( Lot A
only)
Various Construction (TOTAL) 2019 2019
Materials intended for 437,199.99
Organic Fertilizer (Lot A);
Production Storage for
66,850.00
Farmers Association at
Bocboc, Buyot,
(Lot B);
Minsalagan, 50,400.00
Sinangguyan, Old (Lot C)
Nongnongan & San
Antonio West (Complete
Bid)
TOTAL P14,336,244.8
7
Contracts on Infrastructure Projects Received for the Calendar Year 2019
52
No. of
Working Contract Name Contract Date of Notice Date Contract
Days from to Proceed was Submitted
Date Amount
Contract was
Perfected
24 Construction of Two- 8,450,583.60 March 22, April 25, 2019

Storey Building intended 2019
for Hall of Justice-Phase
1 (Straight Contract)
18 Rehabilitation of Local 7,275,955.95 January 15, February 8,
Access Road (.63673 2019 2019
km) at Rizal Street,
Poblacion, Don Carlos,
Bukidnon (Straight
Contract)
25 Construction of 7,502,744.97 January 14, February 4,
Municipal Cemetery 2019 2019
Development Site Phase
1 (Straight Contract)
16 Construction of Water 1,859,936.77 January 11, February 4,
System at Barangay 2019 2019
Kiara (L-III) (Straight
Contract)
TOTAL P25,089,221.2
9
The failure on the part of the agency to furnish copies of the perfected contracts
within the period prescribed by the above-mentioned provision bars the facilitation of the
review and evaluation process necessary to generate timely and relevant audit results.
Had the contracts been submitted within the required timeframe, a systematic and
effective review process had been conducted, evaluating the completeness and
compliance of requirements of applicable laws, rules and regulations, for the advantage
of the government.
The management commented, we quote, “Copies of the perfected contracts were

not furnished to the Auditor within the five (5) working days as prescribed under the
circular due to the lack of necessary staff/manpower who can focus on the completion of
the documents to be attached in the contracts. For this reason, the timely submission of
the latter was hampered. However, we will render extra efforts and will coordinate with
the concerned offices to facilitate the timely submission of the latter. Also, we will review
the procedures involved and ensure that only those necessary will be undertaken to save
time and cope up with the deadline.”
Recommendation
53
We recommended to the management to strictly implement the provisions
mentioned under COA Circular No. 2009-001 and direct the personnel-in-charge to
render extra efforts with the release of contracts to furnish to the Commission on Audit,
within five (5) working days upon issuance.
12. The Municipality paid Rice Allowances to its officials and employees
during the Calendar Year 2019 totaling P3,816,977.27 without legal basis
because its payment constitutes additional compensation as stated in the
technical review analysis sheet by the Provincial Local Finance Committee,
thus, the legality and validity of such disbursed transactions cannot be
ascertained.
Presidential Decree No. 1445 (Ordaining and Instituting a Government Auditing

Code of the Philippines), Preliminary Title General Provisions, Section 4 partly states the
following principles:
“Financial transactions and operations of any government agency shall be

governed by the fundamental principles set forth hereunder, to wit:
1. No money shall be paid out of any public treasury of depository except in

pursuance of an appropriation law or other specific statutory authority.
xx…
7. All laws and regulations applicable to financial transactions shall be faithfully

adhered to.
8. Generally accepted principles and practices of accounting as well as of sound

management and fiscal administration shall be observed, provided that they do
not contravene existing laws and regulations.”
Review of the Status of Appropriations, Allotment and Obligations of the

Municipality as of December 31, 2019 revealed that a total appropriation of
P4,107,500.00 was allocated for Rice Allowances under Appropriation Ordinance No.
2018-517. However, it was noted on the result of the technical review analysis sheet by
the Provincial Local Finance Committee that the appropriation was already disallowed
by the said committee as it lacks legal basis and hence, not in pursuance to a specific
statutory authority. The appropriation related to the latter including the obligations
incurred for the year is shown as follows:
OFFICE Appropriatio SB # 02 Total Obligation

n Ordinance Appropriation
No. 2018-517
Municipal Mayor’s Office 240,000.00 240,000.00 240,000.00
Mun Vice Mayor’s Office 30,000.00 30,000.00 30,000.00
Sangguniang Bayan Office 360,000.00 360,000.00 360,000.00
Secretary to the SBO 150,000.00 150,000.00 150,000.00
Mun Treasurer’s Office 450,000.00 (55,000.00) 395,000.00 395,000.00
54
Mun Assessor’s Office 420,000.00 (25,000.00) 395,000.00 395,000.00
Mun Budget Office 120,000.00 (30,000.00) 90,000.00 90,000.00
Mun Planning & Dev’t Office 210,000.00 (42,500.00) 167,500.00 167,500.00
Local Civil Registry Office 540,000.00 540,000.00 540,000.00
MDRRMO 60,000.00 (30,000.00) 30,000.00 30,000.00
Mun Health Office 630,000.00 630,000.00 630,000.00
MSWD Office 120,000.00 120,000.00 120,000.00
Mun Engineering Office 690,000.00 690,000.00 690,000.00
Market, Slaughterhouse & 120,000.00 120,000.00 120,000.00
Bus Terminal
Don Carlos Polytechnic 150,000.00 150,000.00 150,000.00
College
TOTAL 4,290,000.00 (182,500.00) 4,107,500.00 4,107,500.00
Post-audit of the disbursements in relation to the grant of the said allowances

revealed that a total of P3,816,977.27 as shown in the above table were actually paid
during the Calendar Year 2019 (the payroll of the related disbursement is shown in
Appendix L.1 to L.12 of this audit report).
The effect of granting Rice Allowances to the officials and employees of the
Municipality casts doubt in the legality and validity of the transactions because it is
without legal basis and constitutes additional compensation as stated in the technical
review analysis sheet by the Provincial Local Finance Committee.
The management commented, we quote, “It was in good faith that the
Municipality appropriated the related Rice Allowances. In fact, prior to the
appropriation it was already recommended by the Provincial Budget Office that the
Municipality could appropriate such provided that it is within the PS limitations.
Unfortunately, it was disclosed by the Provincial Budget Office that per review of the
DBM, it constitutes additional compensation. We have noted the recommendation and
will wait further for final action.”
Recommendation:
We recommended to the management to immediately discontinue the

disbursements of the said Rice Allowances to the officials and employees of the
Municipality and adhere strictly to specific statutory authority in the appropriation of
fund as reviewed by the Provincial Local Finance Committee and include only on the
priorities the grant of personnel compensation benefits expressly authorized by law.
13. The General Fund (GF) Proper maintained by the Municipality included on
its remittances to the Bureau of Internal Revenue (BIR) those withheld from
55
the other funds despite the latter’s failure to timely transfer these amounts
withheld to the General Fund (GF) Proper contrary to the Monthly
Remittance Return of Value-Added Tax and Other Percentage Taxes
Withheld Guidelines and Instruction which condition is indicative to
inappropriate use of funds.
Monthly Remittance Return of Value-Added Tax and Other Percentage Taxes

Withheld Guidelines and Instruction (BIR Form No. 1600) states the following on its
filing date:
“The withholding tax return shall be filed and the tax paid on or before the tenth
(10th) day of the month following the month in which withholding was made.”
It is the Standard Operating Procedure of the Bureau of Internal Revenue (BIR),

Bukidnon that only one remittance shall be made for all withholding taxes due to them by
any government agency.
In compliance with the SOP, the General Fund (GF) Proper maintained by the
Municipality remitted all withholding taxes including those withheld from the other
funds. However, verification of the Due to BIR account disclosed that the General Fund
(GF) Proper remittances included those from other funds despite the latter’s non-transfer
of funds to GF Proper. Also, the GF Proper did not establish or record Due from Other
Funds account representing the amount it remitted without the transfer. (Details of Due to
BIR on each fund is shown in Annex L)
To comply with the filing date, the Municipal Accounting Office just gathered the
BIR alphalist to be remitted from other funds as their bases to draw checks in payment of
all withholding taxes of the Municipality.
In effect, the practice of the Municipality is indicative of inappropriate use of

funds because the remittance of GF Proper to BIR accruing to other funds has no cash
reserve in the absence of the actual cash transfer.
The management commented, we quote, “The Municipality will comply with

setting up Due to Other Funds account in the GF Proper so as to establish liability from
other funds in the absence of actual transfer of cash from the other funds.”
Recommendation
We recommended to the management to set-up “Due to Other Funds” account in

the GF Proper to establish liability from other funds in the event time is the essence to
56
cope with the deadline set by the BIR and when there is still no actual cash transferred
yet from other funds.
14. The Agency paid monetary award its officials and employees for its PRAISE
(Program on Awards and Incentives for Service Excellence) system totaling
P2,670,000.00 without satisfying the basic documentary requirements as set
forth in Civil Service Commission (CSC) Memorandum Circular No. 01, s.
2001, thus, casting doubt on the validity and propriety of the pertinent
disbursement.
The Civil Service Commission (CSC) Memorandum Circular No. 01, s. 2001,
which is pursuant to CSC Resolution No. 010112 dated January 10, 2001, adopted the
following revised policies, among others, on Program on Awards and Incentives for
Service Excellence (PRAISE) and we quoted:
“1. Every department or agency shall establish its own employee suggestions and
incentive awards system.”
“2. The System shall be designed to encourage creativity, innovativeness

efficiency, integrity and productivity in the public service by recognizing and
rewarding officials and employees, individually or in groups for their
suggestions, inventions, superior accomplishments and other personal efforts
which contribute to the efficiency, economy, or other improvement in government
operations, or for other extraordinary acts or services in the public interest.”
“6. The PRAISE shall provide both monetary and non-monetary awards and
incentives to recognize, acknowledge and reward productive, creative, innovative
and ethical behavior of employees through formal and informal mode. For this
purpose, the System shall encourage the grant of non- monetary awards.
Monetary awards shall be granted only when the suggestions, inventions,
superior accomplishments and other personal efforts result in monetary savings
which shall not exceed 20% of the savings generated.”
“8. The PRAISE shall be institutionalized through the creation of a PRAISE

Committee in all agencies of the government.”
The Municipality paid payroll to its 131 officials and employees totaling
P2,670,000.00 as follows:
JEV Number Amount Number of Personnel

100-2019-0012-0012 (DCPC/SHS) 67,500.00 4
100-2019-0012-0090 (MEEO) 75,000.00 4
100-2019-0012-4623 (GF Proper) 2,527,500.00 123
TOTAL 2,670,000.00 131
57
The submitted paid payrolls were not supported with the required documents
mentioned in the above-mentioned Memorandum Circular except for its PRAISE
Committee Resolution No. 02-2019 dated December 2, 2019 granting monetary PRAISE
incentive to officials and employees of the Municipal Government of Don Carlos,
Bukidnon for 2019.
Accordingly, the payment of such award was based merely on the PRAISE
Committee Resolution. Unless the above mentioned requirements are complied, the
payment casts doubt as its the validity and propriety.
The management commented, we quote, “It was then the instruction of the
Provincial Budget Office that the Municipality could warrant the grant of PRAISE as
long as the PS limitations were satisfied. The Municipality has generated its savings,
e.g., savings from unfilled positions and in order to recognize efforts for the generation
of the savings, it was agreed to grant the employees with the latter. As to the basic
documentary requirements not yet furnished to COA, the Municipality will comply with
such as well as on the other recommendations.”
Recommendations
We recommended to the management to submit the following documents in order

to facilitate continuance of our audit and validate that the Municipality have met all the
CSC Memorandum Circular requirements warranting the grant of the monetary awards:
a. Detailed Employee Suggestions and Incentive Awards System

b. Documents evidencing the generation of savings due to any extraordinary
contribution or exceptional accomplishment by an employee which resulted in
such monetary savings. In case savings are generated, monetary awards shall
be granted which shall not exceed 20% thereof.
c. Approved Program on Awards and Incentives for Service Excellence
(PRAISE) Model by the Civil Service Commission (CSC)
15. The Acquisition by the Agency of private land for Airport Development
Project costing P18,237,845.13 was not supported with complete
documentation evidencing the processing of the said acquisition contrary to
violation to COA Circular 2012-001 and Executive Order No. 1035, thus
validity, propriety and legality of the transaction could not be determined
and in which case, causes delays in the implementation of the said project.
COA Circular 2012-001 enumerates the general guidelines in the acquisition of

real property which in part, states that:
“13.1 Land
58
Documentary Requirements common to both Negotiated Purchase and Payment
by Court Decision
 Project parcellary survey plan showing that said lot and structures are within
the boundaries of the right-of-way
 Structural Mapping Plan of the lot affected
 Certification by the implementing agency that the claim is not within the
original ROW of a converted local road
 Certification from the Head of the Implementing Office that there is no previous
pending claim and previous payment on subject property
 Environmental Clearance Certificate (ECC) as required under Section 8 of RA
No. 8974
 Copy of latest updated master list of Project-Affected-Persons (PAP) approved
by Agency’s authorized representative
 In case of death of claimant or owner, judicial settlement duly advertised in a
newspaper of general circulation
Additional Documentary Requirements-

For Negotiated Purchase
 Independent Appraisal Report/Regional Committee Resolution indicating the

valuation of the land. Valuation should be based on the provisions of RA No.
8974
 Applicable BIR Zonal Valuation
 Certified Photocopy of Authority/Agency Resolution to Purchase Land or Land
Rights indicating the approved/established valuations or BIR Zonal Valuations
 Deed of Absolute Sale registered with the Register of Deeds where the land is
located
 Certified Photocopy of Tax Clearance from Assessor’s Office where the land is
loacted
Certificate Authorizing Registration (CAR)
Capital Gains Tax (CGT)
Documentary Stamp Tax (DST)
Transfer Tax
If registered land:
 If whole lot is acquired, Transfer Certificate of Title (TCT) Certificate of Land

Ownership Award/Original Certificate Title/Emancipation Patent
(CLOA/OCT/EP) certified as true copy by the Register of Deeds and Tax
Declaration (TD) certified as true copy by the Assessor’s Office in the name of
the procuring entity or previous owner depending on the provisions of the sale
 If portion of lot is acquired, certified photocopy of TCT and TD in the name of
the procuring entity or previous owner with annotation of sale”
Moreover, because the processing of acquisition of private properties or rights-of-

59
way (ROW) which are needed for development projects is one of the major causes of
delays in the implementation of the said projects, Executive Order No. 1035 provides the
procedures and guidelines for the expeditious acquisition by the government of private
real properties or rights thereon for infrastructure and other government development
projects, which also, in part, states the following:
“TITLE A
ACTIVITIES PREPARATORY TO ACQUISITION OF PROPERTY
Sec. 4.Detailed Engineering/Surveys. The implementating government

agency/instrumentality concerned shall, well in advance of the scheduled
construction of the project, undertakes detailed engineering, including parcellary
surveys to indicate the location and size of the sites and to determine ownership
of the land to be acquired, including the status of such landownership.
TITLE B
PROCEDURE FOR ACQUISITION OF PROPERTY
Sec. 6.Acquisition Through Negotiated Sale. As an initial step, the government

implementing agency/instrumentality concerned shall negotiate with the owner of
the land that is needed for the project for the purchase of said land, including
improvements thereon. In the determination of the purchase price to be paid, the
Ministry of Finance and the Provincial/City/Municipal Assessors shall extend full
assistance and coordinate with the personnel of the government implementing
agency concerned in the valuation of lands and improvements thereon taking into
consideration the current and fair market value declared by the owner or
administrator of the land, or such current market value as determined by the
assessor, whichever is lower, prior to the negotiation.”
During the course of the audit however, it was noted that documents forwarded to
the audit team as of this date were incomplete to evidence that adequate procedures for
the acquisition of the real property (land) were actually undertaken. Only Deed of
Absolute Sale of the real property was submitted and hence, do not adequately support
the said government transaction.
Moreover, because the agency did not submit Parcellary Survey Plan of the
project,
Structural Mapping Plan of the lot affected and any such documents showing the
activities performed preparatory to the acquisition of the property, there is doubt whether
proper procedures were undertaken as the existence of Deed of Sale of the property
without the said plans clearly affects the reliability of the process of the acquisition as a
whole as without the latter it is impossible to clearly determine the location and size of
the sites and the ownership of the land to be acquired, including the status of such
landownership.
60
The failure of the agency to submit the complete documents not only affects the
validity, propriety and legality of the acquisition of the real property but also causes delay
in the implementation of the project. This delay would eventually cause a big drain on the
government’s financial resources in view of increased project costs, which, had it
properly complied upon, could still be utilized in other government projects.
The management commented, we quote, “As the said acquisition of land involves
encumbrances, the Municipality had already processed and settled the requirements with
the BIR and other concerned offices. As of this date, the Municipality was in the process
of settling the requirements with the DENR. We will furnish the COA with the documents
related with the acquisition and will exert efforts in order to successfully settle the
requirements with the DENR.”
Recommendation
We recommended to the management to direct the personnel-in-charge with the

submission of the required documents as mentioned under COA Circular 2012-001 and
submit such other documents deemed necessary for the auditorial review and in the
technical evaluation hereof to the Commission on Audit. Also, we recommended to the
management to follow the provisions under Executive Order No. 1035 for the expeditious
acquisition of the real property for the Infrastructure Project and other government
development projects.
C. VALUE FOR MONEY AUDIT
16. The amount appropriated for four (4) projects/programs/activities under the
20% Development Fund- Continuing Appropriation totaling P12,650,000.00
remained unutilized and intended projects remained unimplemented as of
December 31, 2019 contrary to the provision of Section 18 of Republic Act
No. 7160, hence the objective to provide efficient and effective provision of
the basic services and facilities was not attained, prejudicing the intended
beneficiaries of the projects.
Section 18 of republic Act No. 7160, otherwise known as the Local Government
Code of the Philippines provides that local government units shall have the power and
authority to establish an organization that shall be responsible for the efficient and
effective implementation of their development plans, programs, objectives and priorities.
Verification of the record disclosed that there were four (4)

programs/projects/activities appropriated for more than two (2) years which remained
unimplemented/unutilized as of December 31, 2019. The said projects are the following:
Continuing Appropriation:
Function/Program Appropriation Year Unobligated
Appropriated Balance
61
1. Development of Public Cemetery- 7,150,000.00 2017 7,150,000.00
Construction of Pathways, Canals
and Backfilling
2. Construction/Rehabilitation of 4,200,000.00 2016 4,200,000.00
Local Roads (Concreting of
Municipal Road/Streets)
3. Mini Mobile Materials Recovery 300,000.00 2016 300,000.00
Facility
4. Purchase and Development of 1,000,000.00 2015 1,000,000.00
Land for the relocation of informal
settlers
Total Continuing Appropriation P 12,650,000.00 P 12,650,000.00
20% DF
Accordingly, the Municipality is currently extending its efforts in the rigid

implementation of its development projects especially those that were appropriated in the
prior year, however, four (4) of the projects still remained unimplemented to date and
needs reassessment as to their viability in the implementation.
Funds are available for the implementation of these projects but the Municipality
failed to implement the programs/projects, thus the intended beneficiaries missed the
opportunity of improved socio-economic developments and/or depriving them the
benefits that could have been derived from the programs/projects.
The management commented, we quote, “In comparison with last year’s, the
Municipality has been exerting efforts in the implementation of the projects under the
20% Development Fund for this Calendar Year 2019 which decreased the number of
unimplemented projects to four (4). There were already several projects under the
Continuing Appropriation that were implemented within the year, and the Municipality
will continue to assess/implement the remaining unimplemented projects reflected in the
Continuing Appropriation.”
Recommendation
We recommended to the management to require the Municipal Engineer and

Other Officers concerned to:
1. Reassess the viability of PPAs funded under the 20% Development Fund, and
fast-tract its implementation to warrant delivery of benefits to the intended
beneficiaries.
2. If projects were no longer feasible then revert the funds to unappropriated

surplus under the 20% Development Fund.
D. INCLUSION OF EVALUATION/AUDIT OBSERVATION
62
Compliance with BIR and GSIS Laws and Regulations
In compliance with BIR Regulation No. 2-98 dated April 17, 1998 and BIR
Memorandum Circular No. 5-006 dated November 2, 2006, the Municipality properly
withheld the total amount of P3,874,555.62 and remitted the same amount as of
December 31, 2019 to the Bureau of Internal Revenue (BIR).
The Municipality is also in compliance with existing laws, rules and regulations
on proper deductions and remittances of GSIS Premiums in accordance with the
provisions of Republic Act No. 8291.
Hiring of Casuals, Job Orders, Contractuals, Consultants
The municipality’s workforce consists of skilled workers, laborers and office

workers. The skilled workers and laborers are essential to meet the LGU’s additional
specifications required in order to carry such functions as in the repairs and maintenance
of the municipality’s facilities, municipal and barangay roads and any such functions
which carry out more complex physical or mental tasks than routine job functions. Also,
office workers are equally important as they were utilized by the municipality in
performing administrative and other basic tasks in the office.
The municipality involved the services of 110 regulars, 3 casuals, 366 job orders
and 5 contractual for the Calendar Year 2019. It was noted that these personnel were
properly accounted for and their salaries/wages have not surpassed the 55% limitation on
personnel services expenditures.
Gender and Development
Executive Order No. 273 dated 8 September 1995, otherwise known as the
“Philippine Plan for Gender-Responsive Development, 1995-2025”, directs, among
others, all government agencies, departments, bureaus, offices and instrumentalities,
including government-owned and controlled corporations, at the national, sub-national
and local levels to institutionalize Gender and Development (GAD) efforts in government
by incorporating GAD concerns, as spelled out in the Plan, in their planning,
programming and budgeting process; and that in view of the Plan’s long-term goal of
fully integrating GAD concerns into the whole development process, the mainstreaming
of GAD in various government agencies shall be the responsibility of the heads of
concerned agencies and their respective offices, with the assistance of their Women in
Development (WID)/GAD Focal Points to ensure institutionalization thereof.
There are various relevant programs and projects of the municipality of Don
Carlos related to Gender and Development. Of the total budget of the LGU amounting to
P224,564,100.00 (from the Municipal Economic Enterprise amounting to P6,017,000.00,
Don Carlos Polytechnic College, P14,147,100.00 and from the General Fund Proper,
P204,400,000.00), 5.12% or P11,496,000.00 was allocated to GAD budget and 80.81%
63
or P9,290,244.58 was actually expended in providing GAD related activities in areas
such as to capacitate the identified men and women as primary advocates in the
promotion of responsible parenthood; uplifting living condition thru augmentation of
family income; upholding the rights of women and children; decreasing the number of
drug users; reducing the incidence of malnutrition; and the like.
64
PART III- STATUS OF IMPLEMENTATION OF PRIOR
YEARS’ AUDIT RECOMMENDATIONS
PART III – STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT
RECOMMENDATIONS
There were nine (9) audit findings and recommendations embodied in the Prior
Year 2018 Annual Audit Report. Five (5) recommendations were fully implemented,
three (3) were partially implemented and one (1) was not yet implemented.
Audit Observation Ref Manage- Status of Reason

ment Implementation for
Action Partial/No
n
Implemen
tation
65
1. A. Lump sum appropriations AAR Implemented
were present in the municipality’s 2018
budget under Continuing
appropriations for development
projects totalling P14,655.535.91,
where their presence is not only
inconsistent with Article 454(d) of the
IRR of Republic Act 7160 but it
precluded the Auditor to easily
validate their specific
accomplishments and reconcile them
with accounting records.
B. There is an unreconciled balance of

Construction in Progress account
between the Municipality’s General
Ledger and its supporting schedules
by a total of P26,090,705.61 as a
result of the presence of lump sum
appropriations in the budget of the
LGU, hence, the balance appearing in
the financial reports as of December
31, 2018 as P40,671,031.23 under the
CIP- Infrastructure Assets account
cannot be ascertained.
We recommended that the unobligated

lump sum appropriations of P10,
535,745.21 be itemized or identified
as to their specific locations. Such
itemized appropriations shall be for
specific development projects,
programs and activities embodied in
the approved local development plan
formulated and prioritized by the
Local Development Council.
Thereafter seek approval from the
Sanggunian before any disbursements
be made pursuant to above stated
provision of law. In so doing all
developmental projects are duly
accounted and listed in the books of
accounts.
Moreover, direct the Municipal

Accountant to trace and determine the
66
unreconciled Construction in
Progress- Infrastructure Assets
balance between the General Ledger
and its supporting schedules to
ascertain the balances of the account
as reflected in the Financial
Statements.
2. The orderly and timely AAR Partially Updated
disposal of its unserviceable properties 2018 Implemented and
amounting to P4,650,276.83 were not reiterated
initiated nor reclassified to “Other in AAR
2019
Assets” account, which may not be
beneficial to the government in terms
of higher appraisal value for the
property, lesser storage cost and better
management of limited storage space,
contrary to Section 79 of P.D. 1445,
thus, creating doubt on the year-end
balance of its Property Plant and
Equipment as stated in the financial
statements.
We recommended that the Municipal

Treasurer should timely prepare the
Inventory and Inspection Report on
Unserviceable Property (IIURP) to
report all unserviceable and obsolete
items previously taken up in the books
as assets so that they may be properly
monitored, disposed of and dropped
from the accounts. In addition,
Municipal Accountant should
reclassify the unserviceable properties
to Other Assets account.
Also, we recommended that

management creates a disposal
committee to conduct
inspection/inventory of disposable
assets and determine its appraised
value and the mode of disposal in
accordance with the existing
guidelines on supply and property
management.
3. The Accrued Interest Payable AAR Implemented
of an agency’s loan was not 2018
67
recognized at Year-End which
resulted to understatement of the
account by a total of P984,384.34,
contrary to Section 111 and 112 of PD
1445, thereby casting doubts as to the
reliability and proper disclosure of
their Interest Payable Account as of
December 31, 2018.
We recommended to instruct the

Municipal Accountant to recognize
accrued interest payable at year-end
and set-up subsidiary record for each
loan accounts in order to enhance the
monitoring of loan payments and the
balances.
4. The unexpended Local AAR Implemented
Disaster Risk Reduction and 2018
Management Fund from 2011 to 2013
totalling P2,411,996.00 was not
reverted back to the General Fund
contrary to Rule 18, Section 3 of the
Implementing Rules and Regulations
of Republic Act 10121 or the
Philippine Disaster Risk Reduction
and Management Act of 2010 and the
NDRRMC-DBM-DILG Joint
Memorandum Circular No. 2013-1
dated March 25, 2013, hampering the
utilization of the fund to other social
services and affecting Statement of
Financial Condition balances as of
year-end.
We recommended the Municipal

Accountant to follow the afore-cited
provision. Regularly review the
unexpended LDRRMF which are
already more than five (5) years in the
special trust fund. Consequently, the
pertinent amounts should be reverted
back to the general fund of the
municipality following the afore-cited
entries so that it can be utilized by
68
making it available for other social
services as stipulated therein.
5. The Acquisition by the Agency AAR Not Reiterated
of private land for Airport 2018 Implemented in AAR
Development Project costing 2019
P18,237,845.13 was not supported
with complete documentation
evidencing the processing of the said
acquisition contrary to violation to
COA Circular 2012-001 and
Executive Order No. 1035, thus
validity, propriety and legality of the
transaction could not be determined
and in which case, causes delays in
the implementation of the said project.
We recommended that management to

direct the personnel-in-charge with the
submission of the required documents
as mentioned under COA Circular
2012-001 and submit such other
documents deemed necessary for the
auditorial review and in the technical
evaluation hereof to the Commission
on Audit. Also, we recommend to
follow the provisions under Executive
Order No. 1035 for the expeditious
acquisition of the real property for the
Infrastructure Project and other
government development projects.
69
6. Contract Cost or Final AAR Implemented
Approved Bill of Quantities for the 2018
contract entered into by the
Municipality of Don Carlos with
Wing-An Construction and
Development Corporation for the
Design & Build Scheme for the
Construction of a Two (2) Storey
Mall-Type Building is higher than the
COA evaluated cost by 6.75% or P
13,021,780.78, hence excessive.
We recommended that Management

should take necessary legal action to
recover the 6.75% or P 13,021,780.78
variance between the contract cost and
COA evaluated cost from the
concerned Contractor whenever the
opinion of COA Regional Office is
sustained by the General Counsel
7. The agency did not furnish copies AAR Partially Updated
of perfected contracts on Supply and 2018 Implemented and
Delivery materials totalling reiterated
P8,937,051.66 to the audit team in AAR
2019
within the period prescribed under
COA Circular No. 2009-00, hindering
the generation of timely and relevant
audit results on the legality, validity
and propriety of the documents within
the contract.
We recommended that management

strictly implement the provisions
mentioned under COA Circular No.
2009-001 and direct the personnel-in-
charge to render extra efforts with the
release of contracts to furnish to the
Commission on Audit, within five (5)
working days upon issuance.
8. Amount appropriated for 17 AAR Partially Updated
projects/programs/activities under the 2018 Implemented and
20% Development Fund totaling reiterated
P46,350,610.00 remained in AAR
2019
unimplemented, of which 13
projects/programs/activities
amounting to P25,950,000.00 are
70
under Continuing Appropriation and 4
projects/programs/activities
amounting to P20,400,610.00 are
under the Current Appropriation for
CY 2018, contrary the provision of
Section 18 of Republic Act No. 7160,
hence the objective to provide
efficient and effective provision of the
basic services and facilities was not
attained, prejudicing the intended
beneficiaries of the projects.
We recommended to require the

Municipal Engineer and Other
Officers concerned for proper
prioritization of fully funded projects
to ensure their completion on its target
set, thus precluding unwarranted delay
of the implementation of programs,
projects and activities.
9. Agency paid its quarterly Loan AAR Implemented
Amortization including interest 2018
thereof amounting to P4,635,106.17
and P3,332,395.86, respectively, for
the period from May 5, 2018 to
December 31, 2018, which were
sourced from the 20% Development
Fund instead of the projected income
generated from stall rentals, had the
Project been completed within the
target date of completion.
We recommended that Management

should undertake possible measures to
expedite the full implementation and
total completion of this project.
71
PART IV- APPENDICES
Appendix A
Statement of Financial Position (By Fund)
2019
LGU
PARTICULARS
TOTAL GF SEF TF
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS
Cash on Hand
Cash Local Treasury 744.43 744.43
Cash in Bank-Local Currency
Cash in Bank -Local Currency, Current
99,161,913.92 15,277,347.27 2,038,371.77 81,846,194.88
Account
Cash in Bank -Local Currency, Savings
231,793,561.29 171,184,687.87 8,076,286.40 52,532,587.02
Account
Total Cash and Cash Equivalent 330,956,219.64 186,462,779.57 10,114,658.17 134,378,781.90
RECEIVABLES
Inter-Agency Receivables
Due from NGAs 295,420.28 295,420.28
Due from LGUs 500,000.00 500,000.00
Intra-Agency Receivables
Due from Other Funds 27,250.77 27,250.77
Advances
Advances for Operating Expenses 31,236.55 31,236.55
Advances to Special Disbursing Officer 176,400.00 176,400.00
Advances to Officers and Employees 15,600.00 15,600.00
Other Receivables
Other Receivables 87,167.49 250.04 86,917.45
Total Receivables 1,133,075.09 750,737.36 - 382,337.73
INVENTORIES
Inventory Held for Consumption
Office Supplies Inventory 220,236.04 220,236.04
Total Inventories 220,236.04 220,236.04 - -
PREPAYMENTS and DEFERRED CHARGES
Prepayments
Advances to Contractors 1,240,440.52 1,240,440.52
Total Prepayments and Deferred Charges 1,240,440.52 - - 1,240,440.52
Total Current Assets 333,549,971.29 187,433,752.97 10,114,658.17 136,001,560.15
NON- CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
Land
Land 33,088,037.11 33,088,037.11
Infrastructure Assets
Road Networks 20,752,388.63 20,752,388.63
Accumulated Depreciation-Road Networks (583,880.25) (583,880.25)
Flood Control Systems 6,644,967.59 6,644,967.59
Accumulated Depreciation-Flood Control
(413,308.50) (413,308.50)
Systems
Water Supply Systems 192,328.95 192,328.95
Accumulated Depreciation-Water Supply (12,180.84) (12,180.84)
71
Systems
Power Supply Systems 478,677.00 478,677.00
Accumulated Depreciation-Power Supply
(14,452.99) (14,452.99)
Systems
Parks, Plazas and Monuments 19,364,493.13 19,364,493.13
Accumulated Depreciation-Parks, Plazas and
(1,212,981.79) (1,212,981.79)
Monuments
Other Infrastructure Assets 3,285,041.80 3,285,041.80
Buildings and Other Structures
Buildings 17,224,601.51 17,224,601.51
Accumulated Depreciation-Buildings (678,252.92) (678,252.92)
School Buildings 21,539,383.87 19,930,212.25 1,609,171.62
Accumulated Depreciation-School Buildings (819,886.32) (819,886.32)
Slaughterhouses 1,000,000.00 1,000,000.00
Other Structures 20,176,190.32 20,176,190.32
Accumulated Depreciation-Other Structures (113,822.52) (113,822.52)
Machinery and Equipment
Machinery 550,190.19 99,750.00 450,440.19
Accumulated Depreciation-Machinery (40,423.15) (13,086.25) (27,336.90)
Office Equipment 4,090,862.38 4,090,862.38
Accumulated Depreciation-Office Equipment (3,041,955.87) (3,041,955.87)
Information and Communication Technology
12,525,823.32 12,430,063.32 95,760.00
Equipment
Accumulated Depreciation-Information and
(6,572,502.81) (6,569,168.76) (3,334.05)
Communication Technology Equipment
Agricultural and Forestry Equipment 2,963,170.00 2,963,170.00
Accumulated Depreciation-Agricultural and
(345,309.02) (345,309.02)
Forestry Equipment
Communication Equipment 1,578,384.25 1,578,384.25
Accumulated Depreciation-Communication
(932,375.52) (932,375.52)
Equipment
Construction and Heavy Equipment 69,130,951.11 69,130,951.11
Accumulated Depreciation-Construction and (30,116,982.17
(30,116,982.17)
Heavy Equipment )
Disaster Response and Rescue Equipment 159,880.00 159,880.00
Accumulated Depreciation-Disaster
(11,447.50)
Response and Rescue Equipment (11,447.50)
Medical Equipment 800,947.00 800,947.00
Accumulated Depreciation-Medical
(222,417.78) (222,417.78)
Equipment
Sports Equipment 48,022.00 48,022.00
Technical and Scientific Equipment 475,433.00 475,433.00
Accumulated Depreciation-Technical and
(321,116.82) (321,116.82)
Scientific Equipment
Other Machinery and Equipment 795,436.84 757,071.84 38,365.00
Accumulated Depreciation-Other Machinery
(136,074.86) (2,379.60)
and Equipment (133,695.26)
Transportation Equipment
Motor Vehicles 1,057,809.77 1,057,809.77
Accumulated Depreciation-Motor Vehicles (620,694.85) (620,694.85)
Other Transportation Equipment 1,579,950.00 1,579,950.00
Accumulated Depreciation-Other
(1,014,255.75)
Transportation Equipment (1,014,255.75)
Furniture, Fixtures and Books
Furniture and Fixtures 1,138,563.14 1,138,563.14
Accumulated Depreciation-Furniture and
(673,210.26) (673,210.26)
Fixtures
Books 293,495.70 293,495.70
72
Accumulated Depreciation-Books (14,025.70) (14,025.70)
Construction in Progress
Construction in Progress - Infrastructures
90,108,922.76 18,605,622.54 71,503,300.22
Assets
Construction in Progress - Buildings and
149,246,981.35
Other Structures 141,758,289.24 7,488,692.11
Other Property, Plant and Equipment
Work/Zoo Animals 525,000.00 525,000.00
Other Property, Plant and Equipment 3,735,000.78 3,735,000.78
Accumulated Depreciation - Other Property,
(3,534,159.95)
Plant and Equipment (3,534,159.95)
Total Property, Plant and Equipment 433,105,215.36 351,952,536.77 2,160,686.26 78,991,992.33
Total Non-Current Assets 433,105,215.36 351,952,536.77 2,160,686.26 78,991,992.33
TOTAL ASSETS 766,655,186.65 539,386,289.74 12,275,344.43 214,993,552.48
LIABILITIES
CURRENT LIABILITIES
Financial Liabilities
Payables
Accounts Payable 18,253,521.71 18,144,458.10 109,063.61
Due to Officers and Employees 1,546,093.85 1,544,343.69 1,750.16
Interest Payable 905,875.24 905,875.24
Total Payables 20,705,490.80 20,594,677.03 110,813.77 -
Total Financial Liabilities 20,705,490.80 20,594,677.03 110,813.77 -
Inter-Agency Payables
Due to BIR 1,439,768.37 1,439,768.37
Due to GSIS 72,997.30 72,997.30
Due to PAG-IBIG 814,457.46 804,757.46 9,700.00
Due to PHILHEALTH (2,912.00) (2,912.00)
Due to NGAs 117,906,590.08 4,216,363.25 113,690,226.83
Due to LGUs 51,375,478.52 1,746,140.68 445,102.77 49,184,235.07
Total Inter-Agency Payables 171,606,379.73 8,277,115.06 445,102.77 162,884,161.90
Intra-Agency Payables
Due to Other Funds 1,165,797.88 444,254.90 5,380.61 716,162.37
Total Intra-Agency Payables 1,165,797.88 444,254.90 5,380.61 716,162.37
Trust Liabilities
Trust Liabilities 8,092,135.94 8,092,135.94
Trust Liabilities - Disaster Risk Reduction
15,248,776.60 15,248,776.60
and Management Fund
Bail Bonds Payable 98,696.00 98,696.00
Guaranty/Security Deposits Payable 23,802,013.94 15,583,200.70 44,067.46 8,174,745.78
Total Trust Liabilities 47,241,622.48 15,583,200.70 44,067.46 31,614,354.32
Total Current Liabilities 240,719,290.89 44,899,247.69 605,364.61 195,214,678.59
Non-Current Liabilities
Financial Liabilities
Bills/Bonds/Loans Payable
Loans Payable - Domestic 112,434,102.66 112,434,102.66
Total Bills/Bonds/Loans Payable 112,434,102.66 112,434,102.66 - -
Total Financial Liabilities 112,434,102.66 112,434,102.66 - -
Other Payables
Other Payables 27,196,407.83 7,299,446.77 118,087.17 19,778,873.89
Total Non-Current Liabilities 139,630,510.49 119,733,549.43 118,087.17 19,778,873.89
TOTAL LIABILITIES 380,349,801.38 164,632,797.12 723,451.78 214,993,552.48
73
NET ASSETS/EQUITY
Net Assets/Equity (Annex D) 386,305,385.27 374,753,492.62 11,551,892.65
Equity in Joint Venture -
Total Net Assets/Equity 386,305,385.27 374,753,492.62 11,551,892.65 -
TOTAL LIABILITIES AND NET ASSETS/EQUITY 766,655,186.65 539,386,289.74 12,275,344.43 214,993,552.48
Appendix B
Statement of Financial Performance (By Fund)

74
LGU
PARTICULARS
TOTAL GF SEF TF
REVENUE
TAX REVENUE
Tax Revenue - Individual and Corporation
Community Tax 958,105.46 958,105.46
Tax Revenue - Property
Real Property Tax- Basic 2,530,769.55 2,530,769.55
Special Education Tax 3,292,930.06 3,292,930.06
Tax Revenue - Goods and Services
Business Tax 11,931,228.39 11,931,228.39
Tax on Sand, Gravel and Other Quarry
Products 2,023,260.00 2,023,260.00
Amusement Tax 2,750.00 2,750.00
Franchise Tax 151,300.00 151,300.00
Tax Revenue - Fines and Penalties
Tax Revenue - Fines and Penalties -
Other Taxes 326,894.05 326,894.05
Total Tax Revenue 21,217,237.51 17,924,307.45 3,292,930.06 -
SHARE FROM NATIONAL TAXES
Share from Internal Revenue Collections
(IRA) 177,646,584.00 177,646,584.00
SERVICE AND BUSINESS INCOME
Service Income
Permit Fees 1,686,350.63 1,686,350.63
Clearance and Certification Fees 1,492,033.02 1,492,033.02
Occupation Fees 715,225.00 715,225.00
Fishery Rental Fees and Charges 12,728.00 12,728.00
Fees for Sealing and Licensing of
Weights and Measures 90,022.20 90,022.20
Other Service Income 264,911.00 264,911.00
Business Income
School Fees 4,756,863.00 4,756,863.00
Rent Income 1,981,611.00 1,981,611.00
Road Network Fees 2,503,620.00 2,503,620.00
Receipt from Market Operations 3,196,666.30 3,196,666.30
Receipt from Slaughterhouse
Operation 336,085.40 336,085.40
Sales Revenue 18,176.40 18,176.40
Cost of Sales
Cost of Sales -
Net Sales Revenue 18,176.40 18,176.40 - -
Garbage Fees 527,850.00 527,850.00
Hospital Fees 734,887.00 734,887.00
Interest Income 2,095,682.69 2,095,682.69
Total Service and Business Income 20,412,711.64 20,412,711.64 - -
SHARES, GRANTS AND DONATIONS
Share
Share from PCSO 161,797.85 161,797.85
Grants and Donations
Total Shares, Grants and Donations 161,797.85 161,797.85 - -
TOTAL REVENUE 219,438,331.00 216,145,400.94 3,292,930.06 -
75
LESS: CURRENT OPERATING EXPENSES
PERSONNEL SERVICES
Salaries and Wages
47,160,590.4
Salaries and Wages - Regular
47,160,590.42 2
Salaries and Wages -
Casual/Contractual 622,686.01 622,686.01
Other Compensation
Personal Economic Relief Allowance
(PERA) 3,068,911.19 3,068,911.19
Representation Allowance (RA) 2,115,900.00 2,115,900.00
Transportation Allowance (TA) 2,115,900.00 2,115,900.00
Clothing/Uniform Allowance 797,950.00 797,950.00
Subsistence Allowance 213,500.00 213,500.00
Laundry Allowance 28,950.00 28,950.00
Honoraria 708,670.83 708,670.83
Hazard Pay 1,363,304.33 1,363,304.33
Overtime and Night Pay 32,904.49 32,904.49
Year End Bonus 4,325,356.48 4,325,356.48
Cash Gift 670,635.20 670,635.20
Other Bonuses and Allowances 4,444,346.96 4,444,346.96
Personnel Benefits Contributions
Retirement and Life Insurance
Premiums 5,678,360.59 5,678,360.59
Pag-IBIG Contributions 950,914.35 950,914.35
PhilHealth Contributions 486,133.24 486,133.24
Employees Compensation Insurance
Premiums 153,457.08 153,457.08
Other Personnel Benefits
Terminal Leave Benefits 3,949,058.83 3,949,058.83
Other Personnel Benefits 10,077,231.47 10,077,231.47
Total Personnel Services 88,964,761.47 88,964,761.47 - -
MAINTENANCE AND OTHER OPERATING
EXPENSES
Traveling Expenses
Traveling Expenses - Local 2,455,022.31 2,455,022.31
Training and Scholarship Expenses
Training Expenses 4,083,731.46 4,083,731.46
Scholarship Grants/Expenses 2,007,318.60 2,007,318.60
Supplies and Material Expenses
Office Supplies Expenses 2,777,579.15 2,777,579.15
Accountable Forms Expenses 485,122.00 485,122.00
Food Supplies Expenses 325,210.75 325,210.75
Drugs and Medicines Expenses 1,750,835.00 1,750,835.00
Medical, Dental and Laboratory
Supplies Expenses 446,160.50 446,160.50
Fuel, Oil and Lubricants Expenses 7,149,658.51 7,149,658.51
Agricultural and Marine Supplies
Expenses 52,541.40 52,541.40
Other Supplies and Materials Expenses 650,732.61 650,732.61
Utility Expenses
Water Expenses 195,933.53 189,259.73 6,673.80
Electricity Expenses 5,506,722.68 5,456,168.97 50,553.71
Communication Expenses
76
Postage and Courier Services 18,100.00 18,100.00
Internet Subscription Expenses 221,201.70 184,942.90 36,258.80
Professional Services
Legal Services 14,000.00 14,000.00
Auditing Services 293,184.26 293,184.26
Repairs and Maintenance
Infrastructure Assets 3,521,848.10 3,521,848.10
Repairs and Maintenance - Buildings
and Other Structures 1,193,246.96 752,579.90 440,667.06
Repairs and Maintenance - Machinery
and Equipment 1,846,178.33 1,846,178.33
Transportation Equipment 253,018.00 253,018.00
Repairs and Maintenance - Furniture
and Fixtures 1,045.00 1,045.00
Taxes, Insurance Premiums and Other Fees
Taxes, Duties and Licenses 233,257.65 233,257.65
Fidelity Bond Premiums 72,131.25 72,131.25
Insurance Expenses 382,601.90 382,601.90
Other Maintenance and Operating
Expenses
Advertising Expenses 27,027.50 27,027.50
Printing and Publication Expenses 2,005.00 2,005.00
Representation Expenses 2,022,140.59 2,022,140.59
Rent Expenses 327,200.00 327,200.00
Membership Dues and Contributions
to Organizations 298,200.00 298,200.00
Subscription Expenses 23,183.00 23,183.00
Donations 1,797,064.00 1,797,064.00
Other Maintenance and Operating
Expenses 35,063,368.09 34,204,740.35 858,627.74
Total Maintenance and Other Operating
Expenses 75,496,569.83 74,103,788.72 1,392,781.11 -
FINANCIAL EXPENSES
Financial Expenses
Interest Expenses 8,017,081.37 8,017,081.37
Other Financial Charges 182,509.05 182,509.05
Total Financial Expenses 8,199,590.42 8,199,590.42 - -
NON-CASH EXPENSES
Depreciation
Depreciation - Infrastructure Assets 1,858,831.19 1,858,831.19
Depreciation - Buildings and Other
Structures 1,037,775.51 1,037,775.51
Depreciation - Machinery and
Equipment 7,568,352.28 7,568,352.28
Depreciation - Transportation
Equipment 171,293.02 171,293.02
Depreciation - Furniture, Fixtures and
Books 30,270.50 30,270.50
Depreciation - Other Property, Plant
and Equipment 1,700.92 1,700.92
Total Non-Cash Expenses 10,668,223.42 10,668,223.42 - -
TOTAL CURRENT OPERATING EXPENSES 183,329,145.14 181,936,364.03 1,392,781.11 -
SURPLUS (DEFICIT) FROM CURRENT
OPERATIONS 36,109,185.86 34,209,036.91 1,900,148.95 -
ADD (DEDUCT): TRANSFERS, ASSISTANCE AND
SUBSIDY
Financial Assistance/Subsidy to
77
Subsidy to Other Local Government Units 240,000.00 240,000.00
Subsidies - Others 2,628,200.00 2,628,200.00
Transfers to
Transfers of Unspent Current Year DRRM
Funds to the Trust Funds 7,186,836.50 7,186,836.50
Transfers for Project Equity Share /LGU
Counterpart 849,910.00 849,910.00
Total Transfers, Assistance and
Subsidy to 10,904,946.50 10,904,946.50 - -
NET FINANCIAL ASSISTANCE/SUBSIDY (10,904,946.50) (10,904,946.50) - -
Miscellaneous Income
Miscellaneous Income 1,778,851.97 1,778,851.97
Net Other Non-Operating Income/(Losses) 1,778,851.97 1,778,851.97 - -
SURPLUS (DEFICIT) FOR THE PERIOD 26,983,091.33 25,082,942.38 1,900,148.95 -
Appendix C
Statement of Cash Flows (By Fund)

LGU
PARTICULARS
TOTAL GF SEF TF
78
Cash Flow from Operating Activities
Cash Inflows
Collection from taxpayers 37,158,627.51 30,572,689.82 6,585,937.69
Share from Internal Revenue Allotment 177,646,584.00 177,646,584.00
Receipts from business/service income 2,859,615.84 2,859,615.84
Interest Income 2,095,682.69 2,095,682.69
Dividend Income 164,134.95
Other Receipts 126,801,297.09 24,577,100.93 164,134.95 95,474,123.52
Total Cash Inflows 339,719,744.88 237,495,548.72 6,750,072.64 95,474,123.52
Cash OutFlows
Payments of expenses 14,031,351.64 12,685,410.65 1,345,940.99
Payment to suppliers and creditors 129,872,407.74 77,675,171.83 633,313.38 51,563,922.53
Payment to employees 100,783,793.62 100,783,793.62
Interest Expense 7,111,206.13 7,111,206.13
Other Expenses 74,338,924.66 26,904,206.84 3,634,331.11 43,800,386.71
Total Cash Outflows 326,137,683.79 225,159,789.07 5,613,585.48 95,364,309.24
Net Cash Flows from Operating Activities 13,582,061.09 12,335,759.65 1,136,487.16 109,814.28
Cash Flow from Investing Activities
Cash Inflows
Total Cash Inflows - - - -
Cash OutFlows
Purchase/Construction of Investment Property - -
Purchase/Construction of Property, Plant and 929,742.66 763,282.66 166,460.00
Equipment
Total Cash Outflows 929,742.66 763,282.66 166,460.00 -
Net Cash Flows from Investing Activities (929,742.66) (763,282.66) (166,460.00) -
Cash Flow from Financing Activities
Cash Inflows
Total Cash Inflows - - - -
Cash OutFlows
Payment of loan amortization 9,776,878.48 9,776,878.48
Total Cash Outflows 9,776,878.48 9,776,878.48 - -
Net Cash Flows from Financing Activities (9,776,878.48) (9,776,878.48) - -
Total Cash Provided by Operating, Investing and
2,875,439.95
Financing Activities 1,795,598.51 970,027.16 109,814.28
Add : Cash at the Beginning of the year 328,080,779.69 184,667,181.06 9,144,631.01 134,268,967.62
Cash Balance Ending December 31, 2019 330,956,219.64 186,462,779.57 10,114,658.17 134,378,781.90
Appendix D
Statement of Changes in Net Assets/Equity (By Fund)

2019
PARTICULARS
TOTAL GF SEF TF
79
NET ASSETS/EQUITY
Balance at January 1, 2019 358,676,334.07 347,485,881.81 10,625,557.26 564,895.00
Adjustment to Government Equity, beginning -
Add (Deduct)
Change in Accounting Policy -
Prior Period Errors -
Restated Balance 358,676,334.07 347,485,881.81 10,625,557.26 564,895.00
Add (Deduct) Changes in net assets/equity during the
Year
Adjustment of net revenue recognized -
directly in net assets/equity
Unrealized Gain/(Loss) from Changes in the -
Fair Value of Financial Assets
Suplus (Deficit) for the period 26,983,091.33 25,082,942.38 1,900,148.95
Total recognized revenue and expenses for the
26,983,091.33 25,082,942.38 1,900,148.95 -
period
Add (Deduct): Others
Transfer of Completed Infra. Projects/PPE to Registry -
Transfer of Funds (from) / to Other Funds -
Prior Period Adjustments (2,635,947.10) (1,263,698.54) (807,353.56) (564,895.00)
Other Adjustments 3,281,906.97 3,448,366.97 (166,460.00)
386,305,385.2 11,551,892.6
Balance at December 31, 2019 374,753,492.62 -
7 5
Appendix E
Status of Appropriations, Allotments and Obligations

Pre-closing
GENERAL FUND
Current Appropriations
Month December 31, 2019

FUNCTIONS/PROGRAM/ APPROPRIATIONS ALLOTMENT OBLIGATION BALANCES OF
80
CODE PROJECT ALLOTMENT
GRAND TOTAL 274,517,058.83 274,517,058.83 193,839,975.20 80,677,083.63
CURRENT YEAR
A APPROPRIATIONS 274,517,058.83 274,517,058.83 193,839,975.20 80,677,083.63
P.S. 95,354,291.00 95,354,291.00 89,144,956.82 6,209,334.18
M.O.O.E 95,483,072.42 95,483,072.42 76,172,798.53 19,310,273.89
C.O. 18,308,220.00 18,308,220.00 885,105.00 17,423,115.00
Discretionary Fund 41,201.00 41,201.00 0.00 41,201.00
Aid to Barangay 290,000.00 290,000.00 240,000.00 50,000.00
20% MDF 53,777,119.41 53,777,119.41 17,793,959.85 35,983,159.56
5% MDRRMF
(M.O.O.E.) 6,234,693.50 6,234,693.50 6,234,693.50 0.00
5% MDRRMF (C.O.) 1,660,000.00 1,660,000.00 0.00 1,660,000.00
5% MDRRMF (30%
QRF) 3,368,461.50 3,368,461.50 3,368,461.50 0.00
GENERAL PUBLIC
1000 SERVICES 136,822,515.06 136,822,515.06 109,880,469.23 26,942,045.83
P.S. 65,557,306.00 65,557,306.00 62,420,642.45 3,136,663.55
M.O.O.E 55,156,989.06 55,156,989.06 46,969,831.78 8,187,157.28
C.O. 16,108,220.00 16,108,220.00 489,995.00 15,618,225.00
4000 HEALTH SERVICES 14,768,716.00 14,768,716.00 13,154,690.03 1,614,025.97

P.S. 11,870,381.00 11,870,381.00 10,344,706.27 1,525,674.73
M.O.O.E 2,898,335.00 2,898,335.00 2,809,983.76 88,351.24
C.O. 0.00 0.00 0.00 0.00
SOCIAL WELFARE
7000 SERVICES 6,111,326.00 6,111,326.00 4,107,834.71 2,003,491.29
P.S. 3,122,330.00 3,122,330.00 2,940,522.02 181,807.98
M.O.O.E 1,488,996.00 1,488,996.00 1,167,312.69 321,683.31
C.O. 1,500,000.00 1,500,000.00 0.00 1,500,000.00
ECONOMIC
8000 SERVICES 27,466,214.00 27,466,214.00 24,577,987.80 2,888,226.20
P.S. 10,324,714.00 10,324,714.00 9,987,459.76 337,254.24
M.O.O.E 16,781,500.00 16,781,500.00 14,287,668.04 2,493,831.96

C.O. 360,000.00 360,000.00 302,860.00 57,140.00
ECONOMIC
ENTERPRISES 24,018,013.36 24,018,013.36 14,481,878.58 9,536,134.78
P.S. 4,479,560.00 4,479,560.00 3,451,626.32 1,027,933.68
M.O.O.E 19,198,453.36 19,198,453.36 10,938,002.26 8,260,451.10
C.O. 340,000.00 340,000.00 92,250.00 247,750.00
9000 OTHER PURPOSES 65,330,274.41 65,330,274.41 27,637,114.85 37,693,159.56

81
Aid to Barangay 290,000.00 290,000.00 240,000.00 50,000.00
20% MDF 53,777,119.41 53,777,119.41 17,793,959.85 35,983,159.56
5% MDRRMF
(M.O.O.E.) 6,234,693.50 6,234,693.50 6,234,693.50 0.00
5% MDRRMF (C.O.) 1,660,000.00 1,660,000.00 0.00 1,660,000.00
5% MDRRMF (30%
QRF) 3,368,461.50 3,368,461.50 3,368,461.50 0.00
Pre-closing
GENERAL FUND
December 31, 2019

FUNCTIONS/PROGRAM/ BALANCES OF
CODE
PROJECT
APPROPRIATIONS ALLOTMENT OBLIGATION
ALLOTMENT
154,170,022.4
GRAND TOTAL 178,561,922.18 178,561,922.18 24,391,899.74 4
CONTINUING 154,170,022.4
B. APPROPRIATIONS 178,561,922.18 178,561,922.18 24,391,899.74 4
GENERAL PUBLIC
1000 SERVICES
CAPITAL OUTLAY 29,847,621.51 29,847,621.51 15,504,165.52 14,343,455.99
4000 HEALTH SERVICES

CAPITAL OUTLAY 169,515.00 169,515.00 0.00 169,515.00
SOCIAL WELFARE
7000 SERVICES
CAPITAL OUTLAY 48,303.43 48,303.43 0.00 48,303.43
ECONOMIC
8000 SERVICES
CAPITAL OUTLAY 885,385.00 885,385.00 13,000.00 872,385.00
ECONOMIC
ENTERPRISES
CAPITAL OUTLAY 4,011,358.67 4,011,358.67 341,550.00 3,669,808.67
9000 OTHER PURPOSES

NON-OFFICE
CAPITAL OUTLAY 279,655.00 279,655.00 0.00 279,655.00
20% MDF
CAPITAL OUTLAY 83,825,520.98 83,825,520.98 8,278,354.22 75,547,166.76
82
5% MDRRMF
CAPITAL OUTLAY 2,158,719.50 2,158,719.50 254,830.00 1,903,889.50
UTILIZATION OF
BORROWINGS
CAPITAL OUTLAY 57,335,843.09 57,335,843.09 0.00 57,335,843.09
Post-closing
GENERAL FUND
Current Appropriations
Month December 31, 2019

CODE
PROJECT
ALLOTMENT
GRAND TOTAL 248,906,249.76 248,906,249.76 193,839,975.20 55,066,274.56
CURRENT YEAR
P.S. 89,144,956.82 89,144,956.82 89,144,956.82 0.00
M.O.O.E 76,172,798.53 76,172,798.53 76,172,798.53 0.00
C.O. 18,308,220.00 18,308,220.00 885,105.00 17,423,115.00
Discretionary Fund 0.00 0.00 0.00 0.00
Aid to Barangay 240,000.00 240,000.00 240,000.00 0.00
20% MDF 53,777,119.41 53,777,119.41 17,793,959.85 35,983,159.56
5% MDRRMF
(M.O.O.E.) 6,234,693.50 6,234,693.50 6,234,693.50 0.00
5% MDRRMF (C.O.) 1,660,000.00 1,660,000.00 0.00 1,660,000.00
5% MDRRMF (30%
QRF) 3,368,461.50 3,368,461.50 3,368,461.50 0.00

GENERAL PUBLIC
1000 SERVICES 125,498,694.23 125,498,694.23 109,880,469.23 15,618,225.00
P.S. 62,420,642.45 62,420,642.45 62,420,642.45 0.00
M.O.O.E 46,969,831.78 46,969,831.78 46,969,831.78 0.00
C.O. 16,108,220.00 16,108,220.00 489,995.00 15,618,225.00

HEALTH
4000 SERVICES 13,154,690.03 13,154,690.03 13,154,690.03 0.00
P.S. 10,344,706.27 10,344,706.27 10,344,706.27 0.00
M.O.O.E 2,809,983.76 2,809,983.76 2,809,983.76 0.00
C.O. 0.00 0.00 0.00 0.00

SOCIAL WELFARE
7000 SERVICES 5,607,834.71 5,607,834.71 4,107,834.71 1,500,000.00
P.S. 2,940,522.02 2,940,522.02 2,940,522.02 0.00
M.O.O.E 1,167,312.69 1,167,312.69 1,167,312.69 0.00
C.O. 1,500,000.00 1,500,000.00 0.00 1,500,000.00
83

ECONOMIC
8000 SERVICES 24,635,127.80 24,635,127.80 24,577,987.80 57,140.00
P.S. 9,987,459.76 9,987,459.76 9,987,459.76 0.00
M.O.O.E 14,287,668.04 14,287,668.04 14,287,668.04 0.00
C.O. 360,000.00 360,000.00 302,860.00 57,140.00

ECONOMIC
ENTERPRISES 14,729,628.58 14,729,628.58 14,481,878.58 247,750.00
P.S. 3,451,626.32 3,451,626.32 3,451,626.32 0.00
M.O.O.E 10,938,002.26 10,938,002.26 10,938,002.26 0.00
C.O. 340,000.00 340,000.00 92,250.00 247,750.00

9000 OTHER PURPOSES 65,280,274.41 65,280,274.41 27,637,114.85 37,643,159.56
Aid to Barangay 240,000.00 240,000.00 240,000.00 0.00
20% MDF 53,777,119.41 53,777,119.41 17,793,959.85 35,983,159.56
5% MDRRMF
(M.O.O.E.) 6,234,693.50 6,234,693.50 6,234,693.50 0.00
5% MDRRMF (C.O.) 1,660,000.00 1,660,000.00 0.00 1,660,000.00
5% MDRRMF (30%
QRF) 3,368,461.50 3,368,461.50 3,368,461.50 0.00
Pre-closing
SPECIAL EDUCATION FUND
Current and Continuing Appropriations
Mont
h December 31, 2019
CODE
PROJECT
ALLOTMENT
GRAND TOTAL 3,593,700.00 3,593,700.00 1,562,840.61 2,030,859.39
CURRENT YEAR
P.S. 0.00 0.00 0.00 0.00
M.O.O.E 3,348,700.00 3,348,700.00 1,396,380.61 1,952,319.39
84
C.O. 245,000.00 245,000.00 166,460.00 78,540.00

CONTINUING
B APPROPRIATIONS
C.O. 752,035.22 752,035.22 0.00 752,035.22
Post-closing
Current and Continuing Appropriations
Mont
h December 31, 2019
CODE
PROJECT
ALLOTMENT
GRAND TOTAL 1,641,380.61 1,641,380.61 1,562,840.61 78,540.00
CURRENT YEAR
A APPROPRIATIONS 1,641,380.61 1,641,380.61 1,562,840.61 78,540.00
P.S. 0.00 0.00 0.00 0.00
M.O.O.E 1,396,380.61 1,396,380.61 1,396,380.61 0.00
C.O. 245,000.00 245,000.00 166,460.00 78,540.00

CONTINUING
B APPROPRIATIONS
C.O. 752,035.22 752,035.22 0.00 752,035.22
85
Appendix F
Computations of Depreciation Expenses for Completed Infrastructure Projects and their corresponding Accumulated Depreciations as
of December 31, 2019
Period covered
Annual Depreciation Accumulated
(for the
Contract Title Contract Date Depreciation Expense for Depreciation as
computation of
Amount Completed Expense (10% the Calendar of December
depreciation
annually) Year 2019 31, 2019
expense)*
Spillway Sep. 6, 2 years and 3
1,175,773.37
Construction 2017 months 117,577.34 117,577.34 264,549.01
Improvement and
Extension of Level Jan. 20, 3 years and 11
18,999,999.93
II & III PWS (Phase 2016 months
I) 1,899,999.99 1,899,999.99 7,441,666.64
Extension of Level
Feb. 26,
II & III PWS (Phase 9,326,393.77 10 months
2019
II) 932,639.38 777,199.48 777,199.48
Rehabilitation of
Local Access Road, Aug. 14,
7,275,955.95 4 months
Rizal Street, Pob. 2019
Sur, Don Carlos 727,595.60 242,531.87 242,531.87
TOTAL 36,778,123.02 3,677,812.30 3,037,308.68 8,725,946.99
*period covered does not include the month the project was actually completed
86
Appendix G
Interest Recorded as Expense from Calendar Year 2016 to 2019 in relation to

the Construction of 2 Storey Mall-Type Commercial Building
For the Calendar Year 2019
JEV No. Month Incurred Amount of Interest

2019-02-0147 February P 1,848,231.82
2019-05-0543 May 1,712,828.75
2019-08-1080 August 1,831,691.75
2019-11-1688 November 1,718,453.81
2019-12-0218 December 905,875.24
TOTAL P 8,017,081.37
For the Prior Year 2018

2018-02-0189 February P 1,130,957.50
2018-05-0673 May 1,297,283.62
2018-08-1250 August 1,567,628.21
2018-12-0319 December 1,764,767.65
TOTAL P 5,760,636.98

2017-02-1567 February P 462,112.80
2017-05-1973 May 462,112.80
2017-08-2430 August 462,112.80
2017-10-2788 October 462,112.80
2017-11-2900 December 76,378.23
TOTAL P 1,924,829.43

2016-08-0857 August P 467,190.96
2016-11-1357 November 462,112.80
TOTAL P 929,303.76
GRAND TOTAL (FROM CY 2017-2019) P 16,631,851.54

Appendix H
87
Per supporting schedule of CIP- Infrastructure Assets
Name of Amount of Fund Mode of Cost to Check
Project Project Per Source Implementation Date Disbursement
POW/Contract Journal No.
Drainage 283,500.00 20% By 271,030.00 04-0447
Canal @ MDF/2014 Administration
Rizal St.
60LM with
cover
Drainage 2,000,000.00 20% By 1,389,427.77 03-0346
Canal Gen. MDF/2017 Administration 03-0347
Miguel St. 08-1340
550 LM 09-1498
cover, side
curb & side
grated inlets
Proposed 10,000,000.00 Supplementa 50,000.00 12-4413
Developmen l Budget #1
t of CY 2019
Municipal
Plaza Phase
1 @ Sur,
Don Carlos
Bukidnon
Rehab of 85,262.00 20% MDF By 39,000.00 05-0654
Local Road 2017 Administration
@
Magsaysay
St. Don
Carlos,
Bukidnon
Drainage 282,917.29 20% MDF By 231,030.00 04-0466
Canal @ 2016 Administration 03-0381
Zamora St. (Savings) 03-0380
& Diego 04-0428
Silang St,;
Drainage
Canal 30 LM
with cover
130 lm cover
only
Drainage 283,500.00 20% By 271,030.00
Canal @ MDF/2014 Administration
Rizal St. 60
LM with
cover
TOTAL 12,935,179.29 2,260,517.77
Appendix I.1
88
Summary of Collections on 2019 recorded in CY 2020
Accounts General Fund Special Education Fund Grand Total

Account
Explanatio
Code
n Debit Credit Debit Credit Debit Credit
Cash - Local 1-01-01-010
Treasury (001) 2,194,442.98 2,194,442.98 2,061,665.47 2,061,665.47 4,256,108.45 4,256,108.45
Cash in Bank -
Local Currency,
Current 1-01-02-010
Account (001) 2,194,442.98 2,061,665.47 4,256,108.45 -
Accounts 2-01-01-010
Payable (001) 176.00 1,030,832.73 - 1,031,008.73
Due to Other 2-02-01-050
NGAs (001) 598.35 1,030,832.74 - 1,031,431.09
2-02-01-070
Due to LGUs (001) 1,123,053.81 - 1,123,053.81
Community 4-01-01-050
Tax (001) 11,651.00 - 11,651.00
Real Property 4-01-02-040
Tax - Basic (001) 821,103.89 - 821,103.89
4-01-03-030
Business Tax (001) 44,324.25 - 44,324.25
4-01-03-070
Franchise Tax (001) 250.00 - 250.00
Tax Revenues -
Fine and
Penalties - 4-01-05-040
Other Taxes (001) 7,681.88 - 7,681.88
4-02-01-010
Permit Fees (001) 7,673.60 - 7,673.60
Clearance and
Certifications 4-02-01-040
Fees (001) 16,330.00 - 16,330.00
Occupation 4-02-04-140
Fees (001) 7,950.00 - 7,950.00
Fees for Sealing
and Licensing
of Weights and 4-02-01-
Measures 060-(001) 350.00 - 350.00
Other Servuce 4-02-01-990
Income (001) 6,000.00 - 6,000.00
4-02-02-180
Sales Revenue (001) 44.00 - 44.00
4-02-02-190
Garbage Fees (001) 2,150.00 - 2,150.00
4-02-02-200
Hospital Fees (001) 6,195.00 - 6,195.00
Miscellaneous 4-06-01-010
Income (001) 138,911.20 - 138,911.20
Total 4,388,885.96 4,388,885.96 4,123,330.94 4,123,330.94 8,512,216.90 8,512,216.90
Appendix I.2
Details of Collections on 2019 recorded in CY 2020
89
JEV # 100-2020- JEV # 100-2020- JEV # 100-2020-01- JEV # 100-2020-01-
01-001 01-002 003 005 Total
Account
Code Amount Amount Amount Amount Amount
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
1-01-01- 279,495.5
010 (001) 51,828.68 51,828.68 7 279,495.57 489,300.82 489,300.82 1,373,817.91 1,373,817.91 2,194,442.98 2,194,442.98
1-01-02- 279,495.5
010 (001) 51,828.68 7 489,300.82 1,373,817.91 2,194,442.98
2-01-01-
010 (001) 176.00 176.00
2-02-01-
050 (001) 598.35 598.35
2-02-01-
070 (001) 28,797.92 155,053.09 281,673.49 657,529.31 1,123,053.81
4-01-01-
050 (001) 2,022.50 1,902.50 7,726.00 11,651.00
4-01-02-
040 (001) 17,896.94 103,368.73 187,782.33 512,055.89 821,103.89
4-01-03-
030 (001) 7,931.25 900.00 35,493.00 44,324.25
4-01-03-
070 (001) 250.00 250.00
4-01-05-
040 (001) 3,052.50 3,395.00 1,234.38 7,681.88
4-02-01-
010 (001) 500.00 5,000.00 2,173.60 7,673.60
4-02-01-
040 (001) 1,050.00 3,210.00 2,260.00 9,810.00 16,330.00
4-02-04-
140 (001) 1,200.00 1,500.00 450.00 4,800.00 7,950.00
4-02-01-
060-(001) 350.00 350.00
4-02-01-
990 (001) 3,000.00 3,000.00 6,000.00
4-02-02-
180 (001) 44.00 44.00
4-02-02-
190 (001) 2,150.00 2,150.00
4-02-02-
200 (001) 690.00 1,830.00 860.00 2,815.00 6,195.00
4-06-01-
010 (001) 171.32 3,050.00 2,077.50 133,612.38 138,911.20
558,991.1
103,657.36 103,657.36 4 558,991.14 978,601.64 978,601.64 2,747,635.82 2,747,635.82 4,388,885.96 4,388,885.96
JEV # 200-20-01-00001 JEV # 200-20-01-00002 JEV # 200-20-01-00003

Account Code Amount Amount Amount
Debit Credit Debit Credit Debit Credit
90
1-01-01-010 (001) 44,913.68 44,913.68 258,421.82 258,421.82 469,455.82 469,455.82
1-01-02-010 (001) 44,913.68 258,421.82 469,455.82
2-02-01-070 (001) 22,456.84 129,210.91 234,727.91
4-01-02-040 (001) 22,456.84 129,210.91 234,727.91

89,827.36 89,827.36 516,843.64 516,843.64 938,911.64 938,911.64
Total (JEV # 200-20-01-0001

JEV # 200-20-01-00004 JEV # 200-20-01-00005 to 00005)
Account Code
Amount Amount Amount
Debit Credit Debit Credit Debit Credit
1-01-01-010 (001) 1,280,139.73 1,280,139.73 8,734.42 8,734.42 2,061,665.47 2,061,665.47
1-01-02-010 (001) 1,280,139.73 8,734.42 2,061,665.47
2-02-01-070 (001) 640,069.86 4,367.21 1,030,832.73
4-01-02-040 (001) 640,069.87 4,367.21 1,030,832.74

17,468.8
2,560,279.46 2,560,279.46 4 17,468.84 4,123,330.94 4,123,330.94
Appendix J
Inventory of Drugs and Medicines as of December 31, 2019

91
UNIT
NAME OF QUANTITY PRICE AMOUNT
ISSUE
Aluminum magnesium tablet boxes 30 70.00 2,100.00
Cefalexin 250 mg/5ml 60 ml bottles 144 32.00 4,608.00
Cefalexin 500 mg capsule boxes 20 292.00 5,840.00
Doxycycline 200mg cap 100 s boxes 19 147.00 2,793.00
Ferrous sulfate bottles 144 16.00 2,304.00
220mg/5ml(60ml)
Gliclazide 30 mg tab 100’s boxes 10 320.00 3,200.00
Metformin hydrochloride 500 boxes 26 60.00 1,560.00
mg tablet
Multivitamins capsule boxes 33 84.00 2,772.00
Multivitamins syrup 60ml bottles 50 18.00 900.00
Omeprazole 20 mg cap 100’s boxes 20 108.00 2,160.00
Oral rehydration salts boxes 20 35.00 700.00
glucosol
Parcetamol 100 mg/ml drops bottles 144 14.00 2,016.00
Paracetamol 250 mg/5ml bottles 70 15.00 1,050.00
syrup 60 ml
Paracetamol 500 mg tab 100’s boxes 100 47.00 4,700.00
Piroxicam 20 mg capsule boxes 5 182.00 910.00
Salbutamol guaifenesin 1 bottles 288 16.00 4,608.00
mg/50 mg per 5 ml
Simvastatin 20 mg tab 100’S boxes 10 180.00 1,800.00
Simvastatin 40 mg tablet bottles 10 - Not found in PO
Vitamin B1B6B12 100 mg boxes 70 106.00 7,420.00
tablet 100’s
Zinc Vita Syrup 60 ml bottles 288 23.00 6,624.00
Zinc drops 15 ml bottles 20 24.00 480.00
TOTAL 58,545.00
Appendix K

STATUS OF APPROPRIATIONS, ALLOTMENT & OBLIGATIONS
92
as of December 31, 2019
Function /Program Account APPROPRIATION TOTAL
Project Activity Code Annual Budget S.B. # S.B. # 02 AUGMENTATION APPROPRIATION

01
SEF - DISTRICT I
MAINT. & OTHER OPR. EXPENSES:
- Other Supplies and Materials Expenses 5-02-03-990 12,000.00 12,000.00
- Water Expenses 5-02-04-010 12,000.00 12,000.00
- Electricity Expenses 5-02-04-020 50,000.00 50,000.00
- Internet Subscription Expenses 5-02-05-030 24,000.00 24,000.00
- Repairs and Maintenance - Buildings and Other 5-02-13-040 42000 42,000.00
Structures (Tilting of School Sites)
- Repairs and Maintenance - Machinery and Equipment 5-02-13-050 35,000.00 35,000.00
Repair of ICT Parts & Eqpt.
- Other Maintenance and Operating Expenses - 5-02-99-990 160,000.00 160,000.00
Salaries/Wages of Utility Workers
Educational Research
Sport's Development
Sub-total . . . . . . 580,000.00 0.00 0.00 0.00 580,000.00
- Information and Communication Technology 1-07-05-030 8,000.00 8,000.00
Equipment - Computer Printer
- Construction in Progress - Building and Other 1-07-10-030 350,000.00 350,000.00
Structures - Repair of 2 Classroom Bldg. - DCCES

01
CAPITAL OUTLAY:
Structures - Repair of Classroom - DCCES
- Sports Equipment - Sports Development 1-07-05-130 20,000.00 20,000.00
Sub-total . . . . . . 391,271.00 0.00 0.00 0.00 391,271.00
Total SEF - DISTRICT I . . . . . . . . 971,271.00 0.00 0.00 0.00 971,271.00
SEF - DISTRICT II
- Water Expenses 5-02-04-010 12,000.00 12,000.00
- Electricity Expenses 5-02-04-020 36,000.00 36,000.00
- Internet Subscription Expenses 5-02-05-030 20,000.00 20,000.00
Salaries/Wages of Utility Workers
Sports Development
Sub-total . . . . . . 438,000.00 0.00 0.00 0.00 438,000.00
CAPITAL OUTLAY:
Equipment - Lapatop & Printer
- Construction in Progress - Building and Other 1-07-10-030 1,013,158.00 1,013,158.00
Structures - Const./Repair of 10 Classroom Building
Sub-total . . . . . . 1,213,158.00 0.00 0.00 0.00 1,213,158.00
Total SEF - DISTRICT II . . . . . . . . 1,651,158.00 0.00 0.00 0.00 1,651,158.00
SEF - DISTRICT III
Educational Research
Sports Development
- Other Maintenance and Operating Expenses 5-02-99-990 14,271.00 14,271.00

01
Sub-total . . . . . . 234,271.00 0.00 0.00 0.00 234,271.00
CAPITAL OUTLAY:
Equipment - Computer Printer
Structures - Repiar of 10 Classroom Buidling
Sub-total . . . . . . 737,000.00 0.00 0.00 0.00 737,000.00
Total SEF - DISTRICT III . . . . . . . . . . . 971,271.00 0.00 0.00 0.00 971,271.00
GRAND TOTAL SEF. . . . . . . . . . 3,593,700.00 0.00 0.00 0.00 3,593,700.00
Appendix L.1
Rice Allowances
For the Month of January 2019
93
OFFICE JEV No. Number Amount
of
Payees
Municipal Mayor's Office 100-19-01-162 4 10,000.00
Municipal Vice Mayor's Office/ 100-19-01-168 13 32,500.00
Sangguniang Bayan Office
Secretary to the Sangguniang Bayan 100-19-01-166 3 7,500.00
Office
Municipal Treasurer’s Office 100-19-01-173 13 32,500.00
Municipal Assessor's Office 100-19-01-167 6 15,000.00
Municipal Budget Office 100-19-01-172 3 7,500.00
Municipal Planning and Development 100-19-01-171 5 12,500.00
Office
Local Civil Registry Office 100-19-01-172 3 7,500.00
Municipal Disaster Risk Reduction 100-19-01-165 1 2,500.00
and Management Office
Municipal Health Office 100-19-01-170 18 45,000.00
Municipal Social Welfare and 100-19-01-174 4 10,000.00
Development Office
Municipal Engineering Office 100-19-01-164 10 22,500.00
Municipal Economic Enterprise Office 100-19-01-008 3 7,500.00
Municipal Agriculture Office 100-19-01-169 11 27,500.00
Human Resource and Management 100-19-01-171 3 7,500.00
Office
Municipal Accounting Office 100-19-01-174 8 20,000.00
Municipal Administrator's Office 100-19-01-163 8 20,000.00
Don Carlos Polytechnic College 100-19-01- 3 7,500.00
01870
TOTAL 300,500.00
Appendix L.2
For the Month of February 2019

of
94
Payees
Office
Municipal Planning and Development 100-19-02-355 5 12,500.00
Office
Development Office
Office
Don Carlos Polytechnic College 100-19-02-01927 4 10,000.00
TOTAL 302,500.00
Appendix L.3
For the Month of March 2019

of
Payees
95
Secretary to the SBO 100-19-03-654 3 7,500.00
MPD Office 100-19-03-659 5 12,500.00
MDRRM Office 100-19-03-660 1 2,500.00
MSWD Office 100-19-03-658 4 10,000.00
HRM Office 100-19-03-657 3 7,500.00
CASUAL 2 5,000.00
CASUAL 1 2,500.00
Regular 100-19-03-273 2 5,000.00
Regular 100-19-03-276 2 5,000.00
Regular 100-19-03-303 2 5,000.00
Regular 100-19-03-312 1 3,977.27
TOTAL 328,977.27
Appendix L.4
For the Month of April 2019
96
Number
OFFICE JEV No. of Amount
Payees
MPD Office 100-19-04-1133 6 15,000.00
MDRRM Office 100-19-04-1137 1 2,500.00
MSWD Office 100-19-04-1142 4 10,000.00
Don Carlos Polytechnic College 100-19-04- 4 7,500.00
CASUAL ( MACCO & MEEO) JEV on May 2 5,000.00
CASUAL (DCPC) 100-19-04- 1 2,500.00
TOTAL 310,000.00
Appendix L.5
For the Month of May 2019

97
of
Payees
Mun Vice Mayor's Office/ SBO 100-19-05-1403 13 32,500.00
MPD Office 100-19-05-1390 6 15,000.00
MDRRM Office 100-19-05-1397 1 2,500.00
MSWD Office 100-19-05-1396 4 10,000.00
MEE Office 100-19-05-040 4 10,000.00
HRM Office 100-19-05-1400 4 10,000.00
CASUAL ( MACCO & MEEO) 100-19-05-1346 2 5,000.00
CASUAL (DCPC) 100-19-05-141 1 2,500.00
TOTAL 330,000.00
Appendix L.6
For the Month of June 2019
OFFICE JEV No. Number of Amount

Payees
98
Secretary to the SBO 100-19-06-1730b 4 10,000.00
MPD Office 100-19-06-1729 5 12,500.00
MDRRMO 100-19-06-1721 1 2,500.00
MSWD Office 100-19-06-1725 4 10,000.00
MEE Office 100-19-06-052 4 10,000.00
HRM Office 100-19-06-1720 4 10,000.00
Mun Administrator's Office 100-19-06-2087 10 25,000.00
CASUAL (DCPC) 100-19-06-204 1 2,500.00
TOTAL 322,500.00
Appendix L.7
For the Month of July 2019

of
Payees
99
Municipal Vice Mayor's Office/ SBO 100-19-07-982 1 2,500.00
MPD Office 100-19-07-2122 6 15,000.00
MDRRMO 100-19-07-2118 1 2,500.00
MSWD Office 100-19-07-2123 4 10,000.00
HRM Office 100-19-07-2124 4 10,000.00
CASUAL ( MACCO & MEEO) 2 5,000.00
CASUAL (DCPC) 100-19-07-235 1 2,500.00
CASUAL (DCPC) 100-19-07-2128 1 2,500.00
SK Federation 100-19-07-2133 4 10,000.00
TOTAL 320,000.00
Appendix L.8
For the Month of August 2019
OFFICE JEV No. Number of Amount

Payees
100
MPD Office 100-19-08-2665 6 15,000.00
MDRRM Office 100-19-08-2668 1 2,500.00
MSWD Office 100-19-08-2666 4 10,000.00
MEE Office 100-19-08-0068 4 10,000.00
HRM Office 100-19-08-2672 4 10,000.00
CASUAL (DCPC) 100-19-08-267 1 2,500.00
TOTAL 320,000.00
Appendix L.9
For the Month of September 2019
Number
OFFICE JEV No. Amount
of Payees

101
Office
Municipal Planning and 100-19-09-3044 5 12,500.00
Development Office
Municipal Economic Enterprise 100-19-09-0069 4 10,000.00
CASUAL (DCPC) 100-19-09-307 1 2,500.00
CASUAL (DCPC) 100-19-09-3325 1 2,500.00
TOTAL 325,000.00
Appendix L.10
For the Month of October 2019
Number
Payees
102
Development Office
Development Office
CASUAL (DCPC) 100-19-10-361 1 2,500.00
TOTAL 320,000.00
Appendix L.11
For the Month of November 2019
Number
Payees
103
Development Office
Development Office
CASUAL (DCPC) 1 2,500.00
TOTAL 320,000.00
Appendix L.12
For the Month of December 2019
OFFICE JEV No. Payee Amount
100-2019-12- 5 12,500
Municipal Mayor’s Office
4405
Municipal Vice Mayor’s Office & 100-2019-12- 13 32,500
Sangguniang Bayan Office 4411
Secretary to the Sangguniang Bayan 100-2019-12- 4 10,000
Office 4409
104
100-2019-12- 13 32,500
Municipal Treasurer’s Office
4398
100-2019-12- 6 15,000
Municipal Assessor’s Office
4403
100-2019-12- 3 7,500
Municipal Budget Office
4399
Municipal Planning and 100-2019-12- 5 12,500
Development Office 4404
100-2019-12- 4 10,000
Local Civil Registry Office
4397
Municipal Disaster Risk Reduction 100-2019-12- 1 2,500
and Management Office 4407
100-2019-12- 18 45,000
Municipal Health Office
4408
Municipal Social Welfare and 100-2019-12- 4 10,000
Development Office 4401
100-2019-12- 10 25,000
Municipal Engineering Office
4400
Market, Slaughterhouse & Bus 100-2019-12- 4 10,000
Terminal 087
100-2019-12- 4 10,000
Don Carlos Polytechnic College 072 & 100-
2019-12-090
100-2019-12- 12 30,000
Municipal Agriculture Office
4406
Human Resource & Management 100-2019-12- 4 10,000
Office 4402
100-2019-12- 7 17,500
Municipal Accounting Office
4396
100-2019-12- 10 25,000
Municipal Administrator’s Office
4410
TOTAL 317,500
Appendix M.1
Due to BIR
FUND: General Fund Proper
Amount of Amount Date Reference No. per

Month Due to BIR Remitted Remitted Journal
recorded for (DV/JEV/OR/Check
the month No.)
January, 2019 916,761.09 - 02/08/2019 -
February, 2019 456,852.77 438,363.83 03/08/2019 JEV # 100-2019-02-
105
126
421,570.19 412,195.59 04/10/2019 JEV # 100-2019-03-
March, 2019 252
607,830.58 988,067.63 05/08/2019 JEV # 100-2019-04-
April, 2019 449
1,242,973.73 597,145.83 06/10/2019 JEV # 100-2019-05-
May, 2019 581
669,080.84 929,957.21 07/10/2019 JEV # 100-2019-06-
June, 2019 694
716,394.25 1,179,449.6 08/05/2019 JEV # 100-2019-07-
July, 2019 4 887
573,885.58 1,118,281.7 09/10/2019 JEV # 100-2019-08-
August, 2019 5 1061
September, 534,769.46 639,797.57 10/2019 JEV # No. 100-
2019 2019-09-2157
1,355,889.58 812,684.13 11/11/2019 JEV # 100-2019-10-
October, 2019 1594
November, 524,654.38 635,328.15 12/10/2019 JEV # 100-2019-11-
2019 1596
December, 2,539,162.29 1,368,785.0 02/08/2019 JEV # 100-2019-12-
2019 4 1825
17 174,3
TOTAL 4,348.92 48.92
Appendix M.2
FUND: Special Education Fund
Amount of Amount Date Reference No. per

Month Due to BIR Remitted Remitted Journal
recorded for (DV/JEV/OR/Check
the month No.)
3,1 January 16,
January, 2019 4,161.32 08.94 2019 JEV # 2019-01-009
February, 2019 1,686.65 - - -
March, 2019 2,507.18 - - -

106
5,2 April 29,
April, 2019 1,430.39 46.21 2019 Jev # 2019-04-053
1,4 May 16,
May, 2019 3,965.77 30.39 2019 Jev # 2019-05-062
3,9 June 26,
June, 2019 3,915.21 65.77 2019 Jev # 2019-06-083
July, 2019 5,169.22 - - -

11 125,2 August 22,
August, 2019 9,659.89 67.74 2019 Jev # 2019-08-112
September,
2019 9,375.93 - - -
October, 2019 8,198.52 - - -

November,
2019 5,717.39 - - -
December, 21,0 December
2019 8,561.45 51.93 10, 2019 Jev # 2019-12-187
14,2 December
- 77.94 23, 2019 Jev # 2019-12-201
174,3
TOTAL 174,348.92 48.92
Appendix M.3
FUND: MEEO
Amount of Amount Reference No. per

Month Due to BIR Remitted Date Remitted Journal
recorded
for the (DV/JEV/OR/Chec
month k No.)
3
January, 2019 4,161.32 ,108.94 January 16, 2019 JEV # 2019-01-009
February, 2019 1,686.65 - - -
March, 2019 2,507.18 - - -
107
5
April, 2019 1,430.39 ,246.21 April 29, 2019 Jev # 2019-04-053
1
May, 2019 3,965.77 ,430.39 May 16, 2019 Jev # 2019-05-062
3
June, 2019 3,915.21 ,965.77 June 26, 2019 Jev # 2019-06-083
July, 2019 5,169.22 - - -
119,659.8 125
August, 2019 9 ,267.74 August 22, 2019 Jev # 2019-08-112
September,
2019 9,375.93 - - -
October, 2019 8,198.52 - - -

November,
2019 5,717.39 - - -
December, 21 December 10,
2019 8,561.45 ,051.93 2019 Jev # 2019-12-187
14 December 23,
- ,277.94 2019 Jev # 2019-12-201
174,348.9 174
TOTAL 2 ,348.92
Appendix M.4
FUND: TRUST
Amount of Amount Date Reference No per

Due to BIR remitted/ remitted/ journal
Month
recorded for transferred to transferred (DV/JEV/OR/Check
the month GF to GF No.)
Check #s 0468006;
26,3 0468009; 0468010;
January - -
50.70 0468014; 0468019;
036227
February 15,4 - Check #s. 468020;
108
0468035; 0468037;
72.82 - 0468041; 0468043;
0468048; 0468049
Check #s. 0468055;
0468056; 0363228;
83,0 25,6 March 1,
March 0468063; 0468067;
91.54 80.52 2019
0468068; 0468069;
468074
Check #s. 0468080;
5,3
April - - 0468087; 0468089;
26.19
0468094
Check #s. 0468098;
0468099; 0468100;
39,3 104,5 May 21, 0371906; 0371909;
May
21.08 60.73 2019 0371901; 0371914;
0371916; 371922;
0371924
Check #s. 0371925;
0371926; 0371927;
477,8 0371931; 0371932;
June - -
90.63 0371933; 0371934;
0371935; 0371936;
0371937
Check #s. 0371940;
0371941; 0371942;
100,1
July - - 0371943; 0371944;
18.92
0371945; 0371946;
0371947
Check #s. 371950;
0371951; 371952;
142,8
August - - 371953; 0371954;
53.62
0371955; 0371956;
371957; 0371958
Check #s. 0371961;
0371962; 0371963;
270,1 760,1 September 0371964; 0371965;
September
27.73 84.25 30, 2019 0371966; 0371967;
0371968; 0371969;
0371970
Check #s. 0371973;
2,2 0371974; 0371975;
October - -
62.07 371976; 0371977;
0371978; 0371979
Check #s. 371982;
7,2
November - - 0371983; 0371984;
85.26
0371985; 0371986
109
Check #s 0371989;
0371990; 0371991;
33,8 313,5 December
December 0371992; 0371993;
34.08 09.14 18, 2019
0371994; 0371995;
0371996
1,203,9
TOTAL
1,203,934.64 34.64
Appendix M.5
FUND: STF - GPBP

Amount of Amount Reference No per
Date remitted/
Due to BIR remitted/ journal
Month transferred to
recorded for transferred to (DV/JEV/OR/Che
GF
the month GF ck No.)
January
- - - -
February
- - - -
March
- - -
8,34
April
7.60 - - Chk# 0422411
110
8,34
May
- 7.60 May 21, 2019 Chk# 0422412
June
- - - Chk# 0422413
2,48
July
1.28 - - -

August
- - - -

September
- - - -

October
- - - -

November
- - - -
2,48
December
- 1.28 Dec 16, 2019 Chk# 04422414
10,82 10,82
TOTAL
8.88 8.88
Appendix M.6
FUND: SALINTUBIG
Date remitted/
recorded for transferred to (DV/JEV/OR/Check
GF
the month GF No.)
January
- - - -
53,24
February
6.37 - - Chk# 417920
34,92
March
6.42 - - Chk# 417922
111
April
- - - -
214,24 88,17
May
2.72 2.79 May 20, 2019 Chk# 417927
202,92 Chk# 0417928 &
June
0.80 - - 0417929
July
- - - -
August
- - - -
September
- - - -
October
- - - -
19,67
November
1.54 - - Chk# 0417930
436,83
December
- 5.06 Dec 17, 2019 Chk# 0417931
525,00 525,00
TOTAL
7.85 7.85
Appendix M.7
FUND: STF-AIRPORT
Date remitted/
recorded for transferred to (DV/JEV/OR/Check
GF
the month GF No.)
3,32
January - - Chk# 0443831
7.59
February - - - -
3,36 3,32 Chk# 0443866 &
March
8.04 7.59 March 1, 2019 0443871
112
1,23
April - - Chk# 0443882
3.38
56 4,60 Chk# 0443885 &
May
2.50 1.42 May 15, 2019 0443889
2,16
June - Chk# 0443898
7.58 June 19, 2019
85
July - - Chk# 0496613
6.18
August - - - -
2,37
September Chk# 0496631
4.60 Sept 24, 2019
October - - - -
November - - - -
1,25 7,21 Chk# 0496647 &
December
2.63 3.49 Dec 18, 2019 0496640
15,14 15,14
TOTAL
2.50 2.50
Appendix M.8
FUND: MDRRMF
Month Amount of Amount Date Reference No per
recorded for transferred to transferred (DV/JEV/OR/Check
January -
- - -
February -
- - -
March -
- - -
April -
- - -
May -
113
- - -
June -
- - -
July 1,535.89 Check # 0422511
- -
August 1,906.25 Check # 0422513;
- - Official Receipt No.
8745959
September 875.00 Check # 0422514
- -
October 209.47 ColJ-10-003 (BIR
- - Refund)
November -
- - -
December 8,276.78 12,803.39 Check # 0422516 &
0422517
TOTAL 12,803.39 12,803.39
Appendix M.9
FUND: DAR-IFAD
Month Amount of Amount Date Reference No per
recorded for transferred totransferred (DV/JEV/OR/Check
January - - -
February - - -
March 392,052.15 - Check # 0476601
April - - -
May - 392,052.15 Check # 0476501
June - - -
July 322,279.78 - Check # 0476604
August - - -
September - - -
114
October - - -
November - - -
December 543,513.08 865,792.86 Check # 0422516 &
0422517
TOTAL 1,257,845.01 1,257,845.01
Appendix M.10
FUND: DCPC
Month Amount of Amount Date remitted/ Reference No per
Due to BIR remitted/ transferred to GF journal
January 45,424.69 28,314.18 January 28, 2019 JEV # 2019-029-01
February 11,654.47 - - -
March 17,681.93 - - -
April 15,913.12 30,045.00 April 1, 2019 JEV # 2019-100-04
May 15,504.63 - - -
June 8,010.08 34,560.17 June 7, 2019 JEV # 2019-180-06
July 10,811.79 - - -
August 10,454.61 21,053.77 August 6, 2019 JEV # 2019-243-08
September 13,174.14 21,482.20 September 5, 2019 JEV # 2019-276-09
115
October 26,155.31 16,733.87 October 3, 2019 JEV # 2019-319-
10
November 3,496.12 - - -
December 16,813.40 27,450.90 December 4, 2019 JEV # 2019-380-12
15,454.20 December 23, 2019 JEV # 2019-382-12
TOTAL 195,094.29 195,094.29
Appendix M.11
FUND: DCPC-SENIOR
Month Amount of Amount Date remitted/ Reference No per
Due to BIR remitted/ transferred to GF journal
January 3,490.45 - - -
February 1,474.18 - - -
March 4,964.63 March 21, 2019 JEV # 2019-009-03
April 3,447.57 - - -
May - - - -
June - - - -
July 461.00 - - -
August - - - -
116
September 3,908.57 September 5, 2019 JEV # 2019-039-09
October - - - -
November 10,994.56 - - -
December 45,558.39 56,552.95 December 23, 2019 JEV # 2019-095-12
65,426.15 65,426.15 December 18, 2019 JEV # 2019-002-12
TOTAL 130,852.30 130,852.30
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Republic of the Philippines

OFFICE OF THE SUPERVISING AUDITOR

May 15, 2020

Hon. Ma. Victoria O. Pizarro, CPA

Dear Mayor Pizarro:

1. The Construction in Progress- Infrastructure Assets account is overstated by

3. There is an unreconciled balance of Construction in Progress account between the

6. The Interest Income amounting to P2,095,682.69 as of December 31, 2019 is

Very truly yours,

Ms. Josephine G. Murillo

We rendered a qualified opinion on the presentation of the financial statements as of

We acknowledge the cooperation and support extended to us by the officials and

Very truly yours,

ANNUAL AUDIT REPORT

MUNICIPALITY OF DON CARLOS

For the Year Ended December 31, 2019

The Municipality’s management and administration of fiscal and development

The Municipality is envisioned to be the leading Agri-Industrial tourism and trade

E. INDEPENDENT AUDITOR’S REPORT ON THE FINANCIAL STATEMENTS

1. The Construction in Progress- Infrastructure Assets account is overstated by

2. The Construction in Progress –Buildings and Other Structures amounting to

6. The Interest Income amounting to P2,095,682.69 as of December 31, 2019 is

F. SUMMARY OF SIGNIFICANT OBSERVATIONS AND

We recommended to the management to review the budget as well as the

We recommended to the management to immediately discontinue the

3. The amount appropriated for four (4) projects/programs/activities under the

We recommended to the management to require the Municipal Engineer and

We recommended to the management to submit the following documents in order

F. SUMMARY OF NS, ND AND NC ISSUED DURING THE YEAR

Beginning CY 2019 Ending

G. STATUS OF IMPLEMENTATION OF PRIOR YEAR’S

PART I – AUDITED FINANCIAL STATEMENTS Page

 Independent Auditor’s Report 1-4

PART II – DETAILED FINDINGS AND RECOMMENDATIONS

 Financial Statements by Fund 71-80

INDEPENDENT AUDITOR’S REPORT

Hon. Ma. Victoria O. Pizarro, CPA

We have audited the accompanying consolidated financial statements of the Municipality

Bases for Qualified Opinion

1. The Construction in Progress- Infrastructure Assets account is overstated by

2. The Construction in Progress –Buildings and Other Structures amounting to

6. The Interest Income amounting to P2,095,682.69 as of December 31, 2019 is

Key Audit Matters

Responsibilities of Management and Those Charged with Governance for the

In preparing the financial statements, management’s responsibility for assessing the

Auditor’s Responsibilities for the Audit of the Financial Statements

As part of an audit in accordance with ISSAIs, we exercise professional judgment and

STATEMENT OF MANAGEMENT RESPONSIBILITY

The Management of the Municipality of Don Carlos is responsible for all

In this regard, management maintains a system of accounting and reporting which

MA. VICTORIA O. PIZARRO, CPA

NOTE 2019 2018

Municipality of Don Carlos, Bukidnon

Total Revenue 221,217,182.97 208,519,585.24

Less: Current Operating Expenses

Total Current Operating Expenses 183,329,145.14 163,271,719.94

Surplus (Deficit) from Current Operations 37,888,037.83 45,247,865.30

Surplus (Deficit) for the Period 26,983,091.33 33,663,844.94

(See accompanying Notes to Consolidated Financial Statements)

Municipality of Don Carlos, Bukidnon