EXECUTIVE SUMMARY

The Municipality was organized upon issuance of Executive Order No. 2 under
the name “Payabon.” On June 26, 1959, the name “Payabon” was changed to Bindoy in
honor of the former Governor of Negros Oriental Herminigildo Villanueva whose
nickname was “Bindoy.”

At present, the Municipality of Bindoy is classified as a third class municipality,

comprised of 22 barangays under its territorial jurisdiction and with a total land area of
17,652 hectares.

PERSONNEL COMPLEMENT

The Municipality of Bindoy has a total personnel complement of 84 consisting

of 73 regular employees and 11 elected officials assigned in 15 departments as follows:

Department No. of Personnel

1. Office of the Municipal Mayor 18 (1 elected official)

2. Sangguniang Bayan Office 10 elected officials
3. Office of the Municipal Secretary 4
4. Office of the MPDC 2
5. Office of the Municipal Budget Officer 2
6. Office of the Municipal Civil Registrar 2
7. Office of the Municipal Accountant 5
8. Office of the Municipal Treasurer 9
9. Office of the Municipal Assessor 3
10. Municipal Health Office 12
11. Office of the Social Welfare Officer 3
12. Department of Agriculture 5
13. Office of the Municipal Engineer 1
14. Maintenance of Waterworks System 4
15. Operation of Market & Slaughterhouse 4
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Total 84
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MAJOR ACCOMPLISHMENTS/AWARDS

The municipality is a recipient of the Red Orchid Award from the Department of
Health and the Gawad Pasalamat Award from the Bureau of Fisheries and Aquatic
Resources in 2013.

HIGHLIGHTS OF FINANCIAL OPERATIONS

Sources of Funds

The municipality earned a total income of P77,600,465.82 in calendar year 2013

showing an increase of P6,564,031.31 or 9%, as illustrated below:

Increase/
2013 2012 (Decrease) %
Local Taxes 2,503,295.15 2,477,695.01 25,600.14 1%
Permits and Licenses 271,066.27 249,535.93 21,530.34 9%
Service Income 318,903.00 304,673.00 14,230.00 5%
Business Income 4,576,131.24 4,772,332.72 (196,201.48) -4%
Other Income 69,931,070.16 63,232,197.85 6,698,872.31 11%
Total 77,600,465.82 71,036,434.51 6,564,031.31 9%

Appropriations

Current year appropriations of the LGU amounted to P78,584,636.84 while CY

2012 showed appropriations of P72,007,586.39 or an increase of P6,577,050.45 or
9.13%. Continuing appropriations increased by P1,816,621.44 or 26.15% compared to
CY 2012 as shown below:

Current Appropriations

Increase Percentage
Fund 2013 2012 (Decrease) %
General Fund P78,169,636.84 P71,505,586.39 P6,664,050.45 9.32
SEF 415,000.00 502,000.00 ( 87,000.00) (17.33)
Total P78,584,636.84 P72,007,586.39 P6,577,050.45 9.13

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Continuing Appropriation

Increase Percentage
Fund 2013 2012 (Decrease) %
General Fund P 8,525,000.00 P 6,763,365.51 P1,761,634.49 26.05
SEF 239,876.00 184,889.05 54,986.95 29.74
Total P 8,764,876.00 P 6,948,254.56 P1,816,621.44 26.15

Obligations

Obligations pertaining to the current year appropriations of the LGU amounted to

P70,141,017.03 while that of CY 2012 amounted to P67,551,392.85 an increase of
P2,589,624.18 or 3.83%. On the other hand, obligations incurred under continuing
appropriations increased by P760,949.39 or 83.82% more than CY 2012, as shown
below:

Current Appropriations

Increase Percentage
Fund 2013 2012 (Decrease) %
General Fund P69,815,983.17 P67,166,985.99 P2,648,997.18 3.94
SEF 325,033.86 384,406.86 ( 59,373.00 ) (15.54)
Total P70,141,017.03 P67,551,392.85 P2,589,624.18 3.83

Continuing Appropriation

Increase Percentage
Fund 2013 2012 (Decrease) %
General Fund P1,600,000.00 P 907,840.61 P692,159.39 76.24
SEF 68,790.00 - 68,790.00 -
Total P1,668,790.00 P 907,840.61 P760,949.39 83.82

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Financial Ratios:

Increase Percentage
2013 2012 (Decrease) %
Current Ratio:

Current Assets P34,717,136.33 P26,875,519.40

Current Liabilities P34,140,192.95 P28,501,858.00
1.02.:1 0.94.:1 0.08:1 9%
Debt-Equity Ratio

Total Liabilities P43,704,996.84 P39,301,581.89

Government Equity P92,467,807.62 P79,526,214.29
0.47:1 0.49:1 (0.02:1) (4%)

For 2013, the municipality’s liquidity slightly increased by 0.08:1 or 9%. On the
other hand, its debt-equity ratio showed a little decrease of 0.02:1 or 4% due to the
increase in liabilities, particularly in its Due to Other NGAs account.

SCOPE OF AUDIT

A Financial and Compliance Audit was conducted on the accounts and operations
of the Municipality of Bindoy, Negros Oriental for the calendar year 2013. The audit
was conducted to ascertain the propriety of the financial transactions and compliance of
the agency to prescribed laws, rules and regulations. It was also made to ascertain the
accuracy of the financial records and reports, as well as the fairness of the presentation of
the financial statements.

Our examination consisted of the verification of records on a test basis, review of

operating procedures, inspection of projects, interview with concerned officials and
employees, analysis of accounts and such other procedures necessary in the
circumstances.

AUDITOR’S OPINION ON THE FINANCIAL STATEMENTS

The auditor rendered a qualified opinion in the financial statements because of

the municipality’s failure to conduct a physical count of its movable assets valued at
P30,565,904.81 at year end, and the inadequacy of its records did not allow the
application of alternative procedures to verify the accuracy of these accounts. Likewise,
the failure of management to require the liquidation of cash advances granted to officers
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and employees resulted in the overstatement of the receivable account and
understatement of expense account by P2,286,289.96. In addition, collection and
disbursement accounts under the Special Education Fund were not submitted to the audit
team, thus preventing us from reviewing and verifying the propriety and validity of the
transactions recorded in the books for CY 2013.

SIGNIFICANT FNDINGS AND RECOMMENDATIONS

The following are the significant findings and corresponding recommendations:

A. FINANCIAL AND COMPLIANCE

1. The municipality still failed to conduct the physical count of movable assets
contrary to Section 156 of COA Circular No. 92-386 dated October 20, 1992 and
Section 124 of the New Government Accounting System (NGAS) Manual for
LGUs Volume I, thus the existence and reliability of Property, Plant and
Equipment recorded at P30,565,904.81 as of December 31, 2013 could not be
ascertained.

RECOMMENDATIONS

We reiterate our recommendations that:

a. The local chief executive immediately require the conduct of the physical
inventory count and submission of a report thereon to the audit team.
b. The accountant and treasurer maintain the ledger cards and property
records, respectively, as required by existing regulations.
c. The results of the annual physical inventory be reconciled with the
accounting and property records and the necessary adjustments made so
that these records will agree with the actual count and the related accounts
will thus be presented fairly in the financial statements.

2. The municipality failed to implement the required publication of 21 on-going

projects/programs/activities contrary to COA Circular No. 2013-004 dated
January 30, 2013, thus transparency and accountability in government spending
were not fully achieved.

RECOMMENDATION

We recommend that management immediately comply with the

requirements of COA Circular No. 2013-004 on Information and Publicity of
Programs/Projects/Activities of Government Agencies to promote transparency,
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 accountability and provide information on matters of public concern in the use of
government funds.

3. Not one of the nineteen (19) projects under the 20% Economic Development
Fund with total appropriations of P5,045,000.00 was implemented in CY 2013,
disregarding the municipality’s mandate of delivering basic services to its
constituents as required under Section 287 of Republic Act No. 7160, thus,
depriving municipal constituents of its timely benefits.

RECOMMENDATIONS
We recommend that management should:

a. Evaluate whether the projects are still needed. If not, realign the funds to
other priority projects of the LGU.

b. Henceforth, properly plan and coordinate with the concerned officials as

to what projects are to be prioritized and see to it that there are no
problems in the site where the planned project is to be implemented so as
not to hinder its implementation and completion;

c. Provide sufficient funding for the purchase of ambulance and the

Construction of BLISS Multi- Purpose Building and coordinate with the
Municipal Engineer for the preparation of the Program of Work;

d. Require the concerned officials to address whatever problems may have

hindered the implementation of the projects.

4. Failure of the municipality to observe strictly the provisions of COA Circular No.
97-002 and Section 89 of PD 1445 on the grant and liquidation of cash advances
resulted in the accumulation of unliquidated cash advances amounting to
P2,286,289.96 as of December 31, 2013, of which 60.62%, or P1,385,875.72 had
been long overdue, thus exposing government funds to possible risk of misuse.

RECOMMENDATIONS

We recommend that the Municipal Accountant:

1. Send demand letters to the employees with unliquidated cash advances

requiring the immediate liquidation of their cash advances, otherwise
impose the sanctions provided by existing regulations, such as withholding
of the amounts from the salaries of accountable officers concerned.
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 2. Desist from granting additional cash advances unless the previous cash
advance has been settled or proper accounting thereof has been made in
order to avoid accumulation of the same. Under no circumstances shall a
new advance be used to liquidate a previous one.

3. Require strict compliance with the general guidelines in the

liquidation/settlement of cash advances, particularly COA Circular No.
2003-003 on the audit and liquidation of intelligence and confidential
funds of LGUs, to avoid misuse of government funds.

5. The Disbursing Officer was granted additional cash advances for salaries, wages,
allowances, honoraria and other similar payments amounting to P455,500.00 even if
there were still existing balances of his cash advances in the amount of P498,206.82 as
of November 30, 2013 in violation of COA Cir. 2012-001 dated June 14, 2012 thus,
exposing the amount to possible misuse.

RECOMMENDATIONS:

It is recommended that management

a. Require the Disbursing Officer to settle immediately his previous cash

advances first before making another cash advance;

b. Require the Disbursing Officer to always attach to his cash advance voucher a
copy of the duly-approved payrolls or list of payees with their net payments as
well as all other documents required under COA Circular No. 2012-001 dated
June 14, 2012.

c. Require the Municipal Accountant to desist from processing the cash advance
voucher of the Disbursing Officer unless he has fully settled all his previous
cash advances.

6. Salaries and wages paid to casual employees and Honorarium of a Security Guard
were charged to the Special Education Fund contrary to Section 272 of the Local
Government Code of 1991, Section 2 of DECS-DBM-DILG Joint Circular No.
01-A and Section 1.4 of Letter of Instructions No. 1462 resulting in illegal
expenditures amounting to P 54,640.00, adversely affecting the attainment of the
priority purposes of the fund such as the organization of extension classes and
purchase of textbooks.

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 RECOMMENDATIONS

We recommend that:

1. The Local School Board stop utilizing the SEF for the salaries and
wages of casual employees and honorarium of a security guard pursuant
to Section 1.4 of LOI No. 1462.

2. Henceforth, charge the honoraria of the security guard and salaries and
wages of casual employees to the General Fund by appropriating
sufficient amounts for these expenses.

7. Report of Disbursements and Collections together with paid vouchers, official

receipts and corresponding documents with the related financial reports of the
General, Special Education and Trust Funds were not submitted by the Municipal
Accountant to the Auditor within the reglementary period, as required under
Section 107 of the Government Auditing Code of the Philippines and the pertinent
provisions of COA Circular Nos. 95-006, 96-007 and 96-011 and Section 70 and
72 of the NGAS Manual, thus causing delay in the review and verification on
the propriety and validity of the transactions recorded in the books and
preparation/submission of the annual audit report for CY 2013.

RECOMMENDATIONS

We recommend that management:

1. Adhere strictly to the prescribed time frame for the submission of monthly
accounts and financial reports to the office of the Auditor pursuant to
Section 107 of the Government Auditing Code of the Philippines and the
pertinent provisions of COA circular Nos. 95-006, 96-007 and 96-011 as
well as Section 70 and 72 of the NGAS Manual for LGUs, Volume I.

2. Direct the Municipal Accountant to submit the monthly accounts to the

Office of the auditor promptly after these are recorded/posted in the
General and Subsidiary Ledgers so that the Auditor could conduct the
required review and verification of the transactions as well as validate the
propriety of the account balances per books at any particular month or
period.

8. The Disbursing Officer failed to update, rule, close and indicate the balance of his
cash in his cashbook daily as required in the Instructions for Cashbook-Cash
Advances in the Manual on NGAS for LGUs, thus his accountability at any given
time could not be readily determined.
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 RECOMMENDATIONS

We recommend that the Disbursing Officer:

a. Post to the appropriate column of the Cashbook-Cash Advances all

transactions for the day, foot the debit and credit columns, rule and
balance the cashbook daily in compliance to Sections B and C of the
Instructions for Accomplishing Cashbook-Cash Advances of the Manual
on NGAS for LGUs.

b. Forward the ending balance of cash of the previous day as the beginning
balance for the next day.

c. Compare, at the end of each day, the actual cash on hand against the
balance shown in the cashbook to ensure that his cash accountability is
intact.

9. The failure of the municipal treasurer and all collectors to prepare and submit
their Report of Accountability for Accountable Forms (RAAF) for consolidation
by the Local Treasurer and the non-submission of the Consolidated Report of
Accountability for Accountable Forms (CRAAF) by the Municipal Treasurer
since CY 2011 to present, in violation of Sections 50 and 51 Volume II of the
New Government Accounting System made it difficult to consolidate the
issuances and balances of the accountable forms and establish the proper
accountability and responsibility for accountable forms.

RECOMMENDATIONS

We recommend that management:

a. Require the treasurer and all collectors to immediately prepare and submit
the Report of Accountability for Accountable Forms (RAAF) after the end
of each month as provided under Section 50 of the NGAS, Volume II for
easy consolidation of accountable forms from CY 2011 to present.
Henceforth, prepare the same monthly.
b. Require the Municipal Treasurer to submit the Consolidated Report of
Accountability for Accountable Forms (CRAAF) as provided in Section
51, Volume II of the NGAS since CY 2011 to present. Henceforth,
prepare the same monthly and submit to the auditor for audit purposes.

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 10. Copies of contracts/purchase orders were not submitted for audit and verification
within five (5) days from issuance contrary to COA Circulars 2009-001, 87-278,
89-299 and 96-010, which prevented the auditor from conducting review and
evaluation of the terms and conditions of the contract at the most appropriate time
and manner.

RECOMMENDATIONS:

We recommend to management that

1. Copies of perfected contracts/purchase orders together with the

supporting documents should be submitted to the auditor within five (5)
days after approval in compliance with COA Circular Nos. 2009-001, 96-
010, 89-299 and 87-278.

2. The copies to be furnished to the auditor should be separate from those

being attached to the disbursement vouchers for post-audit purposes.

11. The Municipality failed to create a Local Governance Transition Team in violation
of DILG Memorandum Circular No. 2013-33, thus an effective turn-over to the
incoming officials and the transparency and accountability objectives of the
directive was not fully achieved.

RECOMMENDATIONS:

It is recommended that

a. Management explain why they failed to comply with DILG Memorandum

Circular No. 2013-33.

b. Management conduct a physical inventory of their Property, Plant and

Equipment and assemble/gather all required records, documents and
information, on the status of activities during the previous term for purposes
of transparency.

B. GENDER AND DEVELOPMENT

12. The municipality did not appropriate funds for Gender and Development (GAD)
contrary to Section 2.3 of PCW, NEDA and DBM Joint Circular No. 2012-01 nor
prepare a GAD Plan and Budget and the subsequent Accomplishment Report, thus
neglecting the implementation of GAD programs and activities and hindering the
attainment of GAD goals.
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RECOMMENDATION:

We reiterate our recommendation that henceforth, management appropriate at least

five percent (5%) of the total budget for Gender and Development programs/activities/
projects, prepare the required Annual GAD Plan and Budget as well as the Annual GAD
Accomplishment Report at the end of the calendar year pursuant to Section 2.3 of Joint
Circular No. 2012-01 of the Philippine Commission On Women (PCW), National
Economic and Development Authority (NEDA) and the Department of Budget and
Management (DBM).

STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT

RECOMMENDATION

Of the twenty three (23) recommendations embodied in the CY 2012 and prior
years’ Annual Audit Reports, six (6) were fully implemented, five (5) were partially
implemented and twelve (12 ) were not implemented.

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