EXECUTIVE SUMMARY

A. Introduction

The City of Manila was founded on June 24, 1571 as a municipal government; it
became the first chartered City by virtue of the Philippine Commission Act 183 on
July 31, 1901 and gained autonomy with the passage of Republic Act (RA) No. 409
or the “Revised Charter of the City of Manila” on June 18, 1949.

The personnel complement of the City in CY 2020 totaled 16,572 composed of the
following:

Executive Office City Council Total

Elected 2 37 39
Permanent 8,380 125 8,505
Co-Terminus - 462 462
Temporary/Casual 66 - 66
Consultant - 40 40
Contractual 82 5 87
Job Order 5,788 1,585 7,373
Total 14,318 2,254 16,572

B. Financial Highlights

2020 2019 Increase/(Decrease)

Assets P74,464,757,574 P67,492,137,416 P6,972,620,158
Liabilities 22,420,747,872 16,182,961,583 6,237,786,289
Equity 52,044,009,702 51,309,175,833 734,833,869
Income 15,888,791,653 16,556,924,350 668,132,697
Expenses 17,874,675,033 11,615,936,761 6,258,738,272
Transfers, 292,600,487 - 292,600,487
Assistance and
Subsidy from
Transfers, 325,724,179 480,894,105 (155,169,926)
Assistance and
Subsidy to

The total appropriations for the General Fund (GF) and Special Education Fund
(SEF) of the City for CY 2020 totaled P19.229 billion. The obligations charged
against these appropriations amounted to P18.066 billion:

2020 2019 Increase/(Decrease)

Appropriations 19,228,702,046 22,232,284,289 (3,003,582,243)
Obligations 18,066,127,058 10,062,320,227 8,003,806,831

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 The total income of P18.215 billion collected during the year was sourced from the
following:

Particulars GF SEF Total

Tax Revenue P7,721,427,819 P2,024,544,291 P9,745,972,110
Share from National 3,511,205,844 - 3,511,205,844
Taxes
Service and Business 1,440,139,411 9,469,556 1,449,608,967
Income
Shares, Grants and 338,733,000 - 338,733,000
Donations
Gains 2,877,256,677 - 2,877,256,677
Miscellaneous Income 28,902 28,902
Total Income P16,181,392,140 P2,034,013,847 P18,215,405,987

C. Operational Highlights

The City reported, among others, the following significant accomplishments:

a. Coronavirus Disease 2019 (COVID-19) Response:

 Provided 12 quarantine facilities with a total bed capacity of 545;
 Converted the Canonigo covered court and Fugoso Delpan Complex as
temporary shelters for street dwellers;
 Installed washroom and comfort rooms at RASAC covered court for the
locally stranded individuals;
 Conducted mass swab testing for 22,207 market vendors, mall workers, hotel
employees and public transport drivers;
 Opened the Manila Drive-Thru Testing Area;
 Distributed 453,917 food packs from March 22 to May 31, 2020;
 Distributed Social Amelioration Program/Monthly Monetary Allowance to
149,566 senior citizens (SCs) from September 11 to December 4, 2020; and
 Distributed tablets, 25,084 laptop tables and 21,588 school supplies to the
students of 117 barangays.

b. Awarded lot located at Havana Estate (Yutivo), Sta. Ana, Manila to 34 families
through the Land-for -the-Landless Program;

c. Entered into a Memorandum of Agreement (MOA) with various food companies

to provide careers for 335 SCs and 82 persons with disabilities (PWDs);

d. Entered into a MOA with Foodpanda and Grab to provide livelihood to 753 and
571 tricycle divers, respectively, who have lost jobs due to enhanced community
quarantine;

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e. Granted P100,000.00 cash gift for eighteen centenarians;

f. Installed real time Air Quality Monitoring Station at Mehan Garden;

g. Construction/ Repair/ rehabilitation/ improvement/ upgrading/ installation of

various structures and facilities:
 Construction of 15-storey housing project – Tondominium 1 & 2;
 Construction of 15-storey housing project – Binondominium 1;
 Construction of 10-storey Ospital ng Maynila Medical Center;
 Renovation of 2nd Floor Dialysis Building at Gat Andres Bonifacio Memorial
Medical Center;
 Opening of the New Foreshore Super Health Centre and Lying-In Clinic in
Tondo, Manila with the help of SM Foundation;
 Redevelopment of the five-hectare Manila Zoological and Botanical Garden;
 Rehabilitation of twelve projects/1,833 square meters government facilities
and offices, three parks and playgrounds, and two sports complex;
 Installation of 22,000 LED solar-powered road studs on five streets;
 Installation of solar roofing panel on 19 high school and elementary schools;
 Installation and repair of 2,390 streetlights; and
 Bundling of wires and cable operations on 30 major streets.

h. The City received the following awards/recognitions during the year:

 Asia Leaders Awards 2020

Honorable City Mayor Francisco “Isko Moreno” Domagoso as Man of the
Year

 City and Municipalities Competitiveness Index 2020

For Highly Urbanized Cities Category:
1st Place – Overall Competitiveness Award
1st Place – Most Competitive in Government Efficiency Award
1st Place – Most Competitive in Infrastructure Award
3rd Place – Most Competitive in Economic Dynamism
3rd Place – Most Competitive in Resiliency

 9th Digital Governance Award 2020

2nd Place – Best in Government Internal Process – Go! Manila mobile
application
2nd Place – Best in Customer Empowerment – Go! Manila mobile application
2nd Place – Best in LGU Internal Processes

 Association of Tourism Officers of the Philippines – 21st Annual National

Convention
Grand Winner – Move Your Destination Forward! video contest

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  Philippine Chamber of Commerce and Industry: Gawad Bayaning Kalusugan
- Sta. Ana Hospital Manila COVID Warriors

D. Scope and Objectives of Audit

The audit covered the accounts and operations of the City of Manila for the period
January 1 to December 31, 2020. The objectives of the audit are to: (a) be able to lend
credence to Management’s assertions on the financial statements; (b) recommend
agency improvement opportunities; (c) determine compliance with existing laws,
rules and regulations; and (d) determine the extent of implementation of prior years’
audit recommendations.

E. Independent Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the

financial statements (FS) as of December 31, 2020 due to: (a) the accounting errors
that misstated the affected cash-in-bank account balances; and (b) the accounting
deficiencies that weigh on the quality of information presented in these FS. These
accounting errors and deficiencies are discussed in detail in Part II of the report, and
summarized as follows:

1. Accounting errors in recording cash-in-bank (CiB) transactions amounting to

P66,815,141.99 resulted in the misstatement of affected CiB accounts and
weighed on the fair presentation of these accounts in the City’s FS.

We recommended that Management:

a. Prepare the adjusting entry to record the 6,169 checks with a total amount of
P5,912,799.87 in the Check Disbursements Journal;

b. Adopt preventive and corrective measures to address the deficiencies in

accounting for the CiB; and

c. submit supporting documents as basis for recording of the transactions from

CYs 2014 to CY 2020 in the amount of P60,902,342.12.

2. Deficiencies in accounting for property, plant and equipment (PPE) undermine

the quality of PPE information presented in the City’s FS.

We recommended that Management:

a. Provide depreciation for the 4,087 depreciable PPE items totaling

P10,262,638,264.46;

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 b. In the absence of documents establishing the acquisition cost of four PPE
items with nominal costs totaling P20,061.43, measure these PPE using their
fair value and disclose the valuation in the Notes to FS;

c. Record PPE individually in the PPE records; and

d. Instruct the Office of the City Accountant and City General Services Office
to indicate in their PPE records the condition of the PPE using common
condition codes as well as the information listed in paragraph 2.3.2, Part II of
this report.

F. Other Significant Observations and Recommendations

1. The Joint Venture Agreement (JVA) entered into by the City of Manila with
B. Braun Avitum Philippines, Inc. (BBAPI) does not have certain provisions
prescribed in City Ordinance No. 8346 and has unclear and inadequate
stipulations which are disadvantageous to the interest of the City.

Pursuant to paragraph 10 of the JVA, we recommended that Management come

up with JVA addendum/amendments or similar binding document to correct the
provisions and deficiencies therein that work against the interest of the City with
the end view of, among others:

a. increasing the City share in the revenue of the joint venture (JV)
commensurate to the City’s contribution/investment therein; and

b. taking-over the procurement of pharmaceuticals and other consumable items

utilized in the dialysis of patients to: (i) conform with the relevant provisions
of RA No. 9184; and (ii) ensure reasonable pricing and compliance to quality
standards of these items.

If BBAPI refuses the correction of the foregoing provisions and deficiencies

therein that work against the interest of the City, terminate the JVA but ensuring
in the process the uninterrupted dialysis treatment services by the City.

2. Unsubmitted documents supporting the JVA with JBROS Construction

Corporation for the Arroceros Compound Mixed-Use Development prevented the
full evaluation of and casts doubt on the validity of the Swiss Challenge to which
such JV project was subjected. Further, the continuing failure of the JBROS to
perform its obligations under the JVA deprives the City beneficial use of the
Arroceros Compound; and the City has not fully protected its interest by its failure
to require JBROS to post performance bond covering the period within which the
latter is obligated to complete the joint venture project.

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 We recommended that the City:

a. Submit the documents enumerated in paragraph 4.7 to establish the validity

of the Swiss Challenge;

b. Rescind the JVA in view of the continuing failure of the JBROS to perform
its obligations under this JVA and in order to realize beneficial gain from the
herein Arroceros Compound; and

c. Prospectively, protect reasonably the interest of the City by ensuring that

JVAs are adequately bonded.

The aforementioned observations together with the corresponding recommendations

were discussed with Management officials concerned during the exit conference on
August 5, 2021. Management views and comments were incorporated in the report,
where appropriate.

G. Summary of Suspensions, Disallowances and Charges as of year-end

The audit suspensions, disallowances and charges amounting to P42.538 million,

P67.166 million and P31.317 million, respectively, remained unsettled by the
concerned officers/employees and third parties determined to be liable thereto due to
the inability of the Management to fully enforce settlement of the same as required
under Section 7.1.1 of COA Circular No. 2009-006 dated September 15, 2009.

H. Status of Implementation of Prior Years’ Audit Recommendations

Of the 79 prior years’ audit recommendations contained in the 2017, 2018 and 2019
Annual Audit Reports, 23 or 29.11 percent were fully implemented, 32 or
40.51 percent were partially implemented and 24 or 30.38 percent were
unimplemented.

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