Republic of the Philippines

MUNICIPALITY OF MAINIT
Province of Surigao del Norte

OFFICE OF THE MUNICIPAL ACCOUNTANT

Notes to Financial Statements

(All amounts in Philippine Peso unless otherwise stated)

Note 1 – General Agency Profile

The Municipality of Mainit was created by virtue of Executive Order No. 39 and in
the Reenactment of R.A No. 7160 dated January 1, 1931.

The Municipality continually discharged the basic function of promoting health and
safety, improving morals, maintaining peace and order and other functions through
the support of the Chiefs of Offices of the Municipal Government which is
responsible in delivering the basic social, economic, legislative services for the
constituent’s economic growth.

Note 2 – Basis of Financial Statement Presentation

The Financial Statements has been prepared in accordance with the Philippine
Public Sector Accounting Standards.

Note 3 – Summary of Significant Accounting Policies

 The Agency uses the Accrual basis of accounting. All expenses incurred are
recognized when incurred and reported in the financial statement in the period
to which they relate. Income is on accrual basis except for transactions where
accrual basis is impractical or when other method is required by law.

 The modified obligation system is used to record allotment received and

obligation incurred. Separate registries are maintained to continue allotments
and obligations for each class of allotment.

 Plant, Property and Equipment are carried at cost less accumulated depreciation.

 For assets under construction, all related expenses incurred during the
construction of the project are capitalized and those incurred after the
construction are charged against the operating cost.

 The straight-line method of depreciation is used in depreciating the property and

equipment with estimated useful lives ranging from three (3) to twenty (20)
years.
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  Liabilities are recognized only upon receipt of goods and rendition of services.

 Interest Expense is classified under Financial Expenses. Interest Expenses

recorded in the books pertain to interest payment to Land Bank of the
Philippines. Interest payment to MDFO is capitalized to Construction in
Progress and will form part of the Multi-Purpose Center project cost.

 Accounts were classified in conformity with the new chart of accounts

prescribed under the Philippine Public Sector Accounting Standards created on
January 01, 2014.

Note 4 – Correction of Fundamental Errors

 Fundamental errors of prior years are corrected by using the prior year’s
adjustment accounts while errors affecting the current year’s operations are
charged to the current year’s accounts.

Note 5 – Cash and Cash Equivalents

Account Title 2020 2019

Cash Local Treasury ₱ 6,138,466.73 ₱ 3,801,079.06

Cash in Bank – Local Currency, Current
Account 710,990.94 101,388,998.69

Cash in Bank -Local Currency, Savings

Account 120,150,413.43 -

Cash in Bank – Local Currency, Time

Deposits 645,756.60 645,339.90

 Total Cash and Cash Equivalents ₱127,645,627.70 ₱105,835,417.65

Note 6 – Receivables

Account Title 2020 2019

Advances for Payroll ₱ 11,800.00 ₱ 118,900.19
Advances to Special Disbursing Officer 355,715.26 1,462,649.75
Due from Officers and Employees 146,479.50 224,079.50
Accounts Receivable 1,216,395.00 2,079,025.00
Real Property Tax Receivable - 1,556.16
Special Education Tax Receivable - -
Due from National Government Agencies - 18,822.00
Due from Local Government Units 2,608,057.07 2,396,310.49
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 Due from Other Funds 3,199,698.52 4,173,105.79
Receivables – Disallowances/Charges 2,074,918.88 2,074,918.88
Advances to Officers and Employees 15,792,007.83 14,413,783.07
Other Receivables 61,458.51 309,473.47
Total Receivables ₱ 25,466,530.57 ₱ 27,272,624.30

Note 7 – Inventories

Account Title 2020 2019

Office Supplies Inventory ₱ 66,186.40 ₱ 66,186.40

Food Supplies Inventory 67,087.00 -

Drugs and Medicines Inventory 79,050.00 79,050.00

Total Inventories ₱ 212,323.40 ₱ 145,236.40

Note 8 – Prepayments and Deferred Charges

Account Title 2020 2019

Advances to Contractors ₱ 6,988,804.38 ₱ 8,656,786.12
Total Prepayments and Deferred Charges ₱ 6,988,804.38 ₱ 8,656,786.12

Note 9 – Property, Plant and Equipment

Account Title 2020 2019

Land ₱ ₱
1,326,700.99 1,326,700.99
Other Land Improvements 726,616.61 796,897.08
Road Networks 39,852,950.34 37,156,904.39
Flood Control Systems 5,808,968.33 6,422,950.20
Water Supply Systems 29,273,572.81 26,903,518.78
Power Supply Systems 561,637.7
316,073.50
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Parks, Plazas and Monuments 3,225,959.16 3,654,583.00
Buildings 37,059,916.00 35,204,355.77
School Buildings 1,918,205.57 2,019,405.39
Hospitals and Health Centers 4,362,195.99 3,503,004.86
Markets 8,895,811.3
8,528,898.38
1
Hostels and Dormitories 451,275.70 498,647.18
Other Structures 42,011,344.68 43,520,383.54
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 Machinery 399,000.00 -
Office Equipment 1,332,144.9
2,265,091.32
0
Information and Communication
2,798,581.81 2,766,079.62
Technology Equipment
Agricultural and Forestry Equipment 3,003.33 6,233.33
Communication Equipment 175,474.09 189,848.14
Construction and Heavy Equipment 1,987,053.2
1,583,547.53
4
Disaster Response and Rescue Equipment 3,051,182.17 3,641,729.00
Medical Equipment 24,415.0
15,352.00
0
Technical and Scientific Equipment 74,311.63 99,591.91
Other Machinery and Equipment 2,273,230.08 2,583,564.91
Motor Vehicles 2,538,994.09 2,786,955.34
Watercrafts 4,912.82 4,912.82
Furniture and Fixtures 563,968.60 520,458.84
Books 580.00 580.00
Construction in Progress – Infrastructures 48,328,928.0
8,667,856.46
Assets 5
Construction in Progress – Building and
71,031,560.09 4,259,131.72
Other Structures
Other Property, Plant and Equipment 3,883.37 3,883.35
Total Property, Plant and Equipment ₱270,313,207.4 ₱239,000,310.4
5 4

Note 10 – Financial Liabilities – Current

Account Title 2020 2019

Accounts Payable ₱ 18,263,390.91 ₱ 7,322,396.97
Due to Officers and Employees - 130,631.52
Loans Payable – Current Portion 1,244,002.28 1,261,334.73
Total Financial Liabilities - Current ₱ 19,507,393.19 ₱ 8,714,363.22

Note 11 – Inter-Agency Payables

Account Title 2020 2019

Due to BIR ₱659,896.77 ₱229,911.81
Due to GSIS 504,143.67 467,753.73
Due to Pag-IBIG 144,796.16 52,535.17
Due to PhilHealth 586,212.86 431,754.64
Due to NGAs 25,470,649.04 17,109,924.76
Due to LGUs 9,629,016.61 7,498,641.79
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 Total Inter-Agency Payables ₱ 36,994,715.11 ₱ 25,790,521.90

Note 12 – Intra- Agency Payables

Account Title 2020 2019

Due to Other Funds ₱ 6,039,109.47 ₱ 9,112,097.85
Total Intra-Agency Payables ₱ 6,039,109.47 ₱ 9,112,097.85
Note 13 – Trust Liabilities

Account Title 2020 2019

Trust Liabilities ₱ 2,599,833.36 -
Bail Bonds Payable 31,950.00 -
Total Trust Liabilities ₱ 2,631,783.36 -

Note 14 – Deferred Credits / Unearned Income

Account Title 2020 2019

₱
Deferred Real Property Tax -
1,556.16
Deferred Special Education Tax - -
Total Deferred Credits/Unearned Income ₱ - ₱ 1,556.16

Note 15 – Other Payables

Account Title 2020 2019

Other Payables ₱ 20,286,604.40 ₱ 19,589,305.84
Total Other Payables ₱ 20,286,604.40 ₱ 19,589,305.84

Note 16 – Financial Liabilities – Non-Current

Account Title 2020 2019

Loans Payable – Domestic ₱ 53,262,215.75 ₱47,388,478.15
Total Financial Liabilities – Non-Current ₱ 53,262,215.75 ₱ 47,388,478.15

Note 17 – Revenues

Share from National Taxes

Account Title 2020 2019

Internal Revenue Allotment ₱106,219,505.00 ₱ 94,496,192.00

Tax Revenue

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 Account Title 2020 2019
Business Tax ₱ 1,372,384.09 ₱ 1,430,259.51
Community Tax 218,025.26 270,795.84
Real Property Tax – Basic 2,104,996.72 3,503,433.31
Professional Tax 41,579.49 20,000.00
Special Education Tax 3,972,139.12 2,904,072.41
Taxes on Sand, Gravel and Other Quarry
344,430.00 101,250.00
Products
Fines and Penalties – Other Taxes 104,196.00 96,633.00
Total Tax Revenue ₱ 8,157,750.68 ₱ 8,326,444.07

Service Income and Business Income

Account Title 2020 2019

Fees for Sealing and Licensing of Weights
₱ 32,180.00 ₱ 30,050.00
and Measures
Permit Fees 852,714.02 817,967.05
Registration Fees -
Occupation Fees - 1,250.00
Clearance and Certification Fees 448,984.21 592,281.18
Inspection Fees 94,576.26 75,626.26
Other Service Income 214,701.67 245,780.93
Total Service Income 1,643,156.16 1,762,955.42

Rent Income 110,380.80 97,645.00

Road Network Fees 214,150.00 209,650.00
Waterworks System Fees 427,625.75 482,005.50
Receipts from Operation of
6,396,516.07 9,057,847.52
Hostels/Dormitories & Other Like Facilities
Receipt from Market Operations 1,082,964.00 946,640.00
Receipt from Slaughterhouse Operation 195,040.00 171,120.00
Receipt from Cemetery Operations 800.00 11,200.00
Receipts from Printing and Publication - 2,054.60
Garbage Fees 194,400.00 153,263.00
Hospital Fees 124,740.00 93,268.00
Interest Income 62,715.38 110,025.29
Other Business Income 1,072,147.00 2,008,086.00
Total Business Income 9,881,479.00 13,342,804.91
Total Service and Business Income ₱ 11,524,635.16 ₱15,105,760.33

Other Income

Account Title 2020 2019

Share from National Wealth ₱ - ₱ -
Share from PAGCOR - 55,901.64
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 Gain on Sale of Property, Plant and
- -
Equipment
Miscellaneous Income 819,655.37 218,376.76
Total Other Income ₱ 819,655.37 ₱ 274,278.40

Note 18 – Personal Services

Account Title 2020 2019

Salaries and Wages – Regular ₱ 28,989,894.59 ₱24,153,691.11
Salaries and Wages – Casual/Contractual 3,622,305.00 3,092,315.00
Personal Economic Relief Allowance
2,932,909.10 2,133,363.62
(PERA)
Representation Allowance (RA) 1,833,750.00 1,670,625.00
Transportation Allowance (TA) 1,833,750.00 1,665,000.00
Clothing/Uniform Allowance 762,730.00 746,000.00
Subsistence Allowance 195,449.30 191,250.00
Productivity Incentive Allowance 440,000.00 635,000.00
Other Bonuses and Allowances 3,425,000.00 3,205,000.00
Laundry Allowance 1,800.00 1,800.00
Hazard Pay 319,781.90 291,453.70
Cash Gift 659,500.00 635,000.00
Year End Bonus 5,487,920.05 4,535,013.00
Retirement and Life Insurance Premiums 3,080,912.79 2,473,245.69
Pag-IBIG Contributions 162,000.00 149,200.00
PhilHealth Contributions 415,104.94 293,483.38
Employees Compensation Insurance
103,285.15 96,856.41
Premiums
Terminal Leave Benefits 2,290,015.06 3,573,669.00
Total Personal Services ₱ 56,556,107.88 ₱49,541,965.91

Note 19 – Maintenance and Other Operating Expenses

Account Title 2020 2019

Traveling Expenses – Local ₱ 592,968.94 ₱1,963,071.21
Training Expenses 279,236.00 747,596.00
Scholarship Grants/Expenses 475,000.00 -
Office Supplies Expenses 798,996.82 994,122.06
Accountable Forms Expenses 120,675.00 199,360.00
Animal/Zoological Supplies Expenses 55,195.00 102,825.00
Food Supplies Expenses 3,518,380.68 2,039,109.02
Welfare Goods Expenses
Drugs and Medicines Expenses 254,850.50 293,475.00
Medical, Dental and Laboratory Supplies
399,410.00 99,625.00
Expenses
Fuel, Oil and Lubricants Expenses 1,663,213.70 1,518,340.80
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 Account Title 2020 2019
Chemical Filtering Supplies Expenses 150,294.00 235,060.00
Agricultural and Marine Supplies Expenses 140,099.00 106,801.00
Other Supplies and Materials Expenses 1,351,887.25 2,278,765.72
Electricity Expenses 3,161,302.54 2,682,467.71
Water Expense 17,280.00 29,569.20
Telephone Expenses 201,816.20 271,367.33
Internet Subscription Expenses 345,388.21 284,240.42
Cable, Satellite, Telegraph and Radio
20,000.00 20,000.00
Expenses
Representation Expenses 136,207.00 172,865.00
Advertising Expenses 40,000.00 48,082.00
Printing and Publication Expenses 328,791.40 158,175.00
Auditing Services 38,244.95 45,287.41
Other General Services - 266,266.00
Other Professional Services 312,000.00 249,080.00
Repairs and Maintenance – Land
- -
Improvements
Repairs and Maintenance – Buildings and
996,334.75 573,160.07
Other Structures
Repairs and Maintenance – Machinery and
191,772.57 80,584.00
Equipment
Repairs and Maintenance – Transportation
686,529.64 443,921.68
Equipment
Repairs and Maintenance – Infrastructure
54,492.00 110,919.00
Assets
Repairs and Maintenance – Other Property,
73,175.00 84,725.00
Plant and Equipment
Donations - -
Confidential Expenses 65,835.50 1,830,000.00
Fidelity Bond Premiums 38,962.50 28,050.00
Insurance Expenses 307,250.06 647,760.86
Other Maintenance and Operating Expenses 21,214,667.95 24,982,012.85
Total MOOE ₱ 38,030,257.16 ₱43,586,684.34

Note 20 – Non-Cash Expenses

Account Title 2020 2019

Depreciation – Land Improvements ₱ 70,280.47 ₱ 5,404.17
Depreciation – Infrastructure Assets 7,101,921.75 4,852,705.89
Depreciation – Buildings and Other
3,743,066.06 3,598,346.40
Structures
Depreciation – Machinery and Equipment 2,232,377.26 2,003,552.83
Depreciation – Furniture, Fixtures and Books 114,898.33 48,057.94
Depreciation – Transportation Equipment 596,294.58 579,556.88
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 Account Title 2020 2019
Depreciation – Other Property, Plant and
- -
Equipment
Total Non-Cash Expenses ₱ 13,858,838.45 ₱11,087,624.11

Note 21 – Financial Expenses

Account Title 2020 2019

Interest Expense ₱ 917,795.42 ₱ 1,063,675.36
Total Financial Expenses ₱ 917,795.42 ₱ 1,063,675.36

Note 22 - Local Disaster Risk Reduction Management Fund (LDRRMF)

The LDRRMF represents the amount set aside by the LGU to support its disaster risk
management activities pursuant to R.A. No. 10121 otherwise known as the
“Philippine Disaster Risk Reduction and Management Act of 2010.” The amount
available and utilized during the year totaled ₱15,307,761.69 and ₱11,859,658.07,
respectively, broken down as follows:

Amount
Available Utilized Balance
Current Year Appropriation:
 Quick Response Fund
(QRF) ₱1,828,005.55 ₱1,828,005.55 ₱ -
 Mitigation Fund (MF)
 MOOE 2,765,346.27 2,765,346.27 -
 Capital Outlay 957,757.9
1,500,000.00 542,242.02 8
Total Current Year 957,757.9
Appropriation 6,093,351.82 5,135,593.84 8
Continuing Appropriation:      
Continuing 2019
1,500,000.00 1,500,000.00 -
Special Trust Fund 7,714,409.87 5,224,064.23 2,490,345.64
Total ₱15,307,761.69 ₱11,859,658.07 ₱3,448,103.62

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