Ref No. Audit Observations Audit Recommendations Agency – Action Plan Status of Implementation Reason for Non Implementation if applicable Action Taken/ Action to be taken Action Plans Person/Dept. Responsible Target Implementation Date From To 1 Procedural lapses on the grant, liquidation, accounting and monitoring of cash adv ances totaling P5.440 million resulted in the (a) continued accumulation of the idle f unds f rom unsettled accountabilities; (b) misclassif ication of accounts understated and ov erstated the Adv ances to Of f icers and Employ ees and other Receiv ables account, respectiv ely , both by P95,496.00; (c ) non-recognition of Impairment Loss and non-prov ision of Allowance f or Impairment f or accountabilities of deceased employ ees totaling P3.628 million; and (d) exposure of f unds to possible loss/misuse in v iew of lapsed f idelity bond, not in accordance with COA Circular No. 97-002 dated February 10, 1997, International Public Sector Accounting Standard (IPSAS) 1, and Treasury Circular No. 02-2009 dated August 6, 2009. We recommended that the Municipal May or ensure strict compliance with the prov isions of COA Circular No. 97-002 and CSC Memorandum Circular No. 12 s. 2012 on the grant, utilization and liquidation of cash adv ances to av oid accumulation of outstanding cash adv ances. Moreov er, the Municipal May or is adv ised to make a f ormal request f or the writing-of f of unliquidated cash adv ances of deceased AOs, with the necessary supporting documents. We also recommended the Municipal May or to instruct the Municipal Accountant to: (i) continue requiring immediate liquidation f rom employ ees with outstanding cash adv ances; (ii) property classif y the account f or the unliquidated balance of AOs whether Adv ances to Of f icers and Employ ees or Other Receiv ables; (iii) Coordinate with the HRMO, concerned gov ernment agencies, and indiv iduals connected with the AOs, to ascertain the home/ business/of f ice address of AOs no longer connected with the LGU, connected with other gov ernment agencies, and those with undetermined status, so that demand letters will be ef f ectively served to them; and (iv ) Ensure the timely renewal of f idelity bonds of AOs. To comply with audit recommendations and submit the required supporting documentation to the Audit Team Municipal Accounting Of f ice January 2024 December 2024 Partially implemented; ongoing As per Municipal Accountant’s letter dated Nov ember 25, 2024, regarding on the request of updates on the progress of status of implementation, the Of f ice of the May or issued Administrativ e Order No. 004 on July 1, 2024, this order outlines the Guidelines on the Grant and Utilization of Cash adv ances f or Trav el and Other Purposes. 2 Fair presentation of Receiv ables totaling P200.189 million as at y ear-end is doubtf ul in v iew of (a) rights ov er loans receiv able totaling P13.781 million could not be established due to absence of documents; (b) unrecognized impairment loss totaling P0.456 million on loans receiv able with remote collection; (c) dormant and non-mov ing Other Receiv ables totaling P6.981 million; (d) unaccounted settlements totaling We recommended that the Municipal May or require the Accountant to: a. On the absence of documents on loans receiv able: (i) Exert more ef f orts in locating the documents/records pertaining to the loans To comply with audit recommendatio ns and submit the required supporting document to the Audit Team Municipal Accounting Of f ice January 2024 December 2024 (a) Partially implemented; ongoing (b) Implemented The Municipal Accountant's response as of Nov ember 2024 remains the same as stated in their letter dated June 20, 2024, they are committed to f inding way s to comply with the Audit Recommendation, will prepare and ef fect the necessary adjustments, and are committed to inf orming/updating the Audit Team: (a) The Municipal Accountant commented that transactions f or the receiv ables totaling P 13,781,337.89 without supporting documents such as loan agreements, amortization schedule, and subsidiary ledgers took place way back in 2010, and the only record lef t was the AGENCY ACTION PLAN AND STATUS OF IMPLEMENTATION Audit Observation and Recommendation For the Calendar Year 2023 As of December 31, 2024
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 2 of 11 P3.968 million on f inal and executory disallowances; and (e) inv alid decrease in the Receiv ablesDisallowances/Charges account amounting to P0.258 million, contrary to International Public Sector Accounting Standards (PSAS) 1, Section 64 of the Gov ernment Accounting and Auditing Manual (GAAM), Volume I, and COA Circular No. 2016-005 dated December 19, 2016, among others. granted to establish the v alidity and legality of the claims against the debtors; b. On the unrecognized impairment of loans receiv able, and the dormant and non-mov ing Other Receiv ab2222222222les: (i) Conduct periodic and thorough monitoring, rev iew and analy sis of the outstanding balances of the Receiv ables, especially at y ear-end, to test whether or not such f inancial assets are impaired; and (ii) Formulate or adapt a policy to determine the collectability of the receiv ables, taking into account the aging of accounts, collection experiences of the agency , expected loss experiences and identif ied doubtf ul accounts, to prov ide appropriate allowance f or impairment; c. On the unaccounted settlements f or f inal and executory disallowances, and the inv alid decrease in the Receiv ablesDisallowances/Charges account: (a) Submit to the Audit Team: (i) the copy of Of f icial Receipts upon ref und/pay ment/settlement by the persons liable; (ii) Employ ee's pay s lip and pay roll showing the amounts deducted, and Accountant's Certif ication, f or settlements made through salary deduction; and (iii) Certif ication of Accounts Af f ected ev ery time there is settlement, f or the preparation of NSSDCs; and (b) Ensure that recording of pay ment/ref und of ND/NC shall be done only upon receipt of NSSDC f rom the Audit Team; and d. Ef f ect necessary adjusting journal entries to present f airly the f inancial statements as of y ear-end. (c) Partially implemented; Ongoing (d) Partially implemented; Ongoing amount in the general ledger. Thus, the current staf f could not prov ide the specif ic details. Moreov er, she added that ev en though they dev ote their time and workf orce to locating the needed documents in the records room, they are not optimistic that the same will be retriev ed and f ound in the records room. (b) The of f ice will also record an impairment loss of P 456,000.00 and make the necessary adjustments. They will also rev iew other receiv ables requiring impairment and dev elop a policy f or measuring and v aluing receiv ables. (b) They will study , analy ze, and try to dev elop/f ormulate any f ramework/policy f or the measurement and v aluation of receiv ables and recognize the appropriate allowance f or impairment f or receiv ables that are already impaired. Also, the discrepancies/errors are noted, and the necessary adjustments will be examined and made. (c) Demand letters hav e been sent f or receiv ables, but most indiv iduals inv olv ed could not be located, resulting in a low recov ery rate. (d) The of f ice will inv estigate discrepancies in the withheld salaries of Ms. Maridel A. Ralleta and Ms. Lourdes Abeleda and correct any errors. They will also attempt to locate Ms. Ralleta's pay roll records f rom 2015 to 2019. 3 Liabilities totaling P 618.558 million as at December 31, 2023 are not f airly presented due to the (a) non-rev ersion of long outstanding Accounts Pay able totaling ₽0.355 million to Accumulated Surplus (Def icit) account; (b) erroneous recognition of liabilities totaling P9.534 million; and (c) unv erif iable liabilities totaling P79.753 million, contrary to the We recommended that the Municipal May or to implement cost-ef f ective measures, and prudence in handling gov ernment f unds, pursuant to Section 2 of PD No. 1445, to maintain its ability to meet current obligations and require the Municipal Accountant to: To comply with audit recommendations and submit the required supporting document to the Audit Team Municipal Accounting Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions As per the Municipal Accountant’s response letter regarding the Nov ember 2024 status of implementation update, their request to ask the LCE to issue a memorandum setting a y ear-end cutof f f or transactions was granted. The Municipal Accounting of f ice will send letters/notices to dif f erent of f ices/sections and agencies regarding the cutof f dates.
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 3 of 11 International Public Sector Accounting Standards (SAS) 1 resulting in misstatements of v arious accounts. (a) Ef f ect the necessary adjusting entries to f airly present the af f ected accounts in the f inancial statements; (b) Conduct periodic monitoring and rev iew of accounts pay able to determine the long outstanding liabilities that may be rev erted to the General f und; (c) Practice prudence in the rev iew of transactions bef ore the same are recorded in the books of accounts to av oid accounting errors; and (d) Exhaust all means to retriev e the supporting documents of the unv erif iable liabilities f or proper accounting thereof . 4 Fair presentation of the y ear-end balances of Inv entories and Property Plant and Equipment (PPE) accounts totaling P40.551 million and P2.010 billion, at cost respectiv ely , was doubtf ul in v iew of unresolv ed procedural lapses in accounting and inv entory /property management which caused discrepancies between the balances per Financial Statements and Reports on Phy sical Count of Inv entories and PPE as of December 31, 2023, totaling ₽40,461,511.85 and P633.825 million, respectiv ely , in contrav ention with Section 114 of Presidential Decree (PD) No. 1445, Sections 490 (a) and (c) of the Gov ernment Accounting and Auditing Manual (GAAM) Volume 1, and International Public Sector Accounting Standards (IPSAS) 1. We recommended that the Municipal May or ensure that a sound sy stem of internal control f or Inv entories and PPE are installed, implemented and monitored f or the f air presentation of the af f ected accounts in the f inancial statements. We also recommended that the Municipal May or require the: a. concerned Of f ices/Departments hav ing custody of inv entories to: (i) conduct a complete phy sical count of all Inv entories and prepare the corresponding RPCI f ollowing the f ormat prescribed in Annex 48 of the NGAS Manual f or LGUs and submit the same to the GSO f or consolidation; (ii) submit to the GSO and Municipal Accountant the certif ied distribution lists of inv entories as soon as the same are issued to the ultimate users/ benef iciaries/ stakeholders; To comply with audit recommendations Concerned Of f ices or Departments, General Serv ices Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions As of Nov ember 2024, the concerned of f ices prov ided a distribution list of inv entories to the GSO and Accounting Of f ice as they issued to the users. b. GSO and the Municipal Accountant to: (i) build up their records and religiously maintain complete perpetual inv entory records of the Inv entories and PPE; (ii) inv estigate the discrepancies noted in the audit and ef f ect the necessary adjustments in their records; (iii) upon receipt of PCI and RPCPPE f rom the Inv entory Committee and concerned To comply with audit recommendations General Serv ices Of f ice and Municipal Accounting Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions As per the update of the General Serv ices Of f icer last Nov ember 2024, they submitted a master list of unserv iceable properties subject to disposal to the accounting of f ice f or the population of data. Despite joint ef f orts to locate the necessary data/documents, it remains unav ailable.
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 4 of 11 of f ices/departments, conduct reconciliation between their perpetual inv entory records; c. Inv entory Committee to: (i) conduct a complete phy sical count of all Inv entories and PPE and prepare the corresponding PCI and RPCPPE based on the perpetual inv entory records of GSO and Accounting Unit; (ii) undertake disposal proceedings f or the unserv iceable property ; To comply with audit recommendations Inv entory Committee January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions As per the update of the General Serv ices Of f icer last Nov ember 2024, the General Serv ices Of f ice continues to conduct phy sical counts of inv entories and PPE f or the preparation of RPCI and RPCPPE. They are also working to pull out the unserv iceable properties f rom v arious of fices. d. Municipal Accountant to: (ii) ensure strict compliance with the accrual basis of accounting in recording receipt, issuance and adjustments, if any , of Inv entories; (ii) Ef f ect necessary adjusting journal entries to f airly present the af f ected accounts in the f inancial statements. To comply with audit recommendations Municipal Accounting Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions The Municipal Accountant's response as of Nov ember 2024 remains the same. They will ensure strict compliance with the accrual basis of accounting f or the receipt, issuance, and adjustments of inv entories, making necessary adjusting journal entries to accurately ref lect the af f ected accounts in the f inancial statements. 5 Def iciencies noted in the setting-up of Real Property Tax (RPT) and Special Education Tax (SET) Receiv ables, recording of collections and recognition and distribution of income f rom Real Property and Special Education Taxes, not in accordance with Paragraphs 27 and 59 of the International Public Sector Accounting Standards (IPSAS) 1 and 23, respectiv ely , and Sections 19(b), 20, 22, 23 and 86 of the Manual on the New Gov ernment Accounting Sy stem (NGAS) f or Local Gov ernment Units (LGUs), Volume 1. Thus, the accuracy and reliability of the balances of the Real Property Tax (RPT) and Special Education Tax (SET) Receiv ables and their corresponding Def erred Income, Other Def erred Credits, Tax Rev enue - Fines and Penalties - Property Taxes, Discount on RPT and SET and Discount on Adv ance Pay ments accounts under the General Fund (GIF) and Special Education Fund We recommended the Municipal May or to require the: (i) Municipal Treasurer to f urnish the Municipal Accountant, at the beginning of the y ear, a certif ied list of taxpay ers and the amount due and collectible f or the y ear for the proper establishment of Real Property and Special Education Taxes Receiv ables based on the Real Property Account Register/Taxpay er's Index Card; To comply with audit recommendatio ns and submit the required supporting document to the Audit Team Municipal Treasurer’s Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions As per the update of the Municipal Treasurer last Nov ember 2024, their of f ice is maintaining its monthly submission of RPT Collection Report to the Municipal Accounting Of f ice. The of f ice is continuously updating the list of taxpay ers with uncollected dues in preparation f or the submission of a y ear-end report of the f inal list of delinquent taxpay ers that will be submitted to the Municipal Accountant. (ii) Municipal Accountant to: (a) regularly take up in the books of accounts of the total RPT/SET tax dues based on the To comply with audit recommendatio ns and submit the required supporting Municipal Accounting Of f ice January 2024 December 2024 Partially implemented; ongoing The Municipal Accountant's response as of Nov ember 2024 remains the same as their letter dated June 20, 2024, in which the Municipal Accountant inf ormed us that they tried to correct the entries as noted in the prior y ear's observ ations. Howev er, they still failed due to a v oluminous workload and will request assistance in order to account f or the amounts properly . They also inf ormed us that their of f ice has
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 5 of 11 (SEE) books as at December 31, 2023, could not be ascertained. certif ied list of tax due and collectible f urnished by the Municipal Treasurer; (b) coordinate with the Municipal Treasurer f or proper reconciliation of the discrepancy in the recorded balances of RPT and SET Receiv ables as against the total amount of tax delinquencies indicated in the Real Property Tax Owners Delinquency Listing and prepare the necessary adjusting entry to present the correct and reliable balances of RPT and SET Receiv able accounts in the f inancial statements as at y ear-end; (c) ensure that RPT and SET Receiv ables are properly recognized only in the y ear they are earned; and (d) analy ze the net ef f ect of the f oregoing observ ations in the f inancial statements and draw the necessary adjusting entries in the General and Special Education Fund books to ref lect the correct balance of the af f ected accounts; and document to the Audit Team already coordinated with the MTO regarding the correct amounts/ reports/ documents they should f urnish so they can properly reconcile with their records and ef f ect the necessary adjustments/ corrections. Also, the of f ice tries to f ollow the correct entries and will prov ide the Audit Team with the adjustments/ entries made once the reconciliation is done. (iii) Municipal Accountant and Treasurer to analy ze and determine the cause of the def iciencies between their records, prepare reconciliation and draw the necessary adjusting journal entry , and submit to this Of f ice the actions taken to establish the correct balances of the subject receiv ables. To comply with audit recommendat ions and submit the required supporting document to the Audit Team Municipal Accounting Of f ice and Municipal Treasurer’s Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions In a letter f rom the Municipal Treasurer dated December 6, 2024, they are in constant coordination with the Municipal Accounting Of f ice. 6 The procedures and remedies f or enf orcing collections allowed under the Local Gov ernment Code were not f ully implemented, causing accumulation of the recorded Real Property Tax (RPT) and Special Education Tax (SET) Receiv ables to P108.661 million as at y ear-end, needing a much-improv ed collection ef f ort on the part of the Municipal Treasurer to generate more income to support the LGU's programs, projects and activ ities (PPAs). We recommended that the Municipal Mav or instruct the Municipal Treasurer to (i) continue exerting more ef f ort and undertake appropriate measures and strategies to strengthen the existing tax collection sy stem and improv e the Municipality 's rev enue perf ormance; and (il) monitor the pay ment of real property taxes due f or the current y ear and impose the av ailable remedies and procedures as authorized under the Local Gov ernment Code. To comply with audit recommendations Municipal Treasurer’s Of f ice January 2024 December 2024 Partially implemented; ongoing The Municipal Treasurer’s Of f ice is constantly f ocusing on the Rev enue Generation Program set in order to improv e and strengthen the collection sy stem of the LGU. Tax mapping activ ities, site inspection of business establishments, examinations of books of accounts of the business taxpay ers, continuous sending of notices of delinquencies and v arious tax collection campaigns are being undertaken to enhance the rev enue collection perf ormance of the LGU.
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 6 of 11 We also recommended that the Municipal Accountant coordinate with the Municipal Treasurer f or proper reconciliation of the recorded balances of RPT and SET Receiv ables as against the Report of Collections by the MTO and prepare the necessary adjustments to present the correct and reliable balances of the accounts in the f inancial statements. To comply with audit recommendations Municipal Accounting Of f ice January 2024 December 2024 Partially implemented; ongoing The Municipal Accountant's response as of Nov ember 2024 remains the same: The of f ice has tried to f ollow the correct entries in last y ear’s AOM in recognizing the adv ance pay ments, discounts, and penalties. Howev er, they f ailed along the way due to a v oluminous workload. 7 Salaries and wages totaling P7.467 million were paid to the job order and contract of serv ice employ ees despite the absence of suf f icient and appropriate documents, contrary to Item 1.2.1 of COA Circular No. 2012- 001 dated June 14, 2012. Moreov er, the corresponding DVs and pay rolls f or claims totaling P17.273 million were not y et submitted to the Audit Team thus, the propriety and regularity of claims could not be determined. In v iew of the f oregoing, we recommended that the Municipal May or instruct the: a. Heads of the Municipal Of f ices to review the DTRs and accomplishment reports of the contractual and/or job order personnel under their respectiv e of f ices bef ore approv ing the same to ensure that all pertinent supporting documents are duly accomplished; and To comply with audit recommendations Heads of the Municipal Of f ices June 2024 December 2024 Observ ed and implemented f or all current and f uture transactions The Of f ice acknowledges the recommendation prov ided. The Municipal May or will direct the f ollowing actions to enhance procedural accuracy and ensure compliance with administrativ e standards: (i) Each Head will be instructed to thoroughly rev iew the Daily Time Records (DTRs) and accomplishment reports submitted by contractual and/or job order personnel under their superv ision. This rev iew will be conducted prior to approv al, ensuring all required supporting documents are accurately completed and duly attached. b. Municipal Accountant to immediately submit the lacking DVs/Pay rolls and supporting documents on the abov e-noted def iciencies and hencef orth ensure that claims f or pay ments are complete and duly accomplished to establish the v alidity , legality, and propriety of transactions bef ore processing of pay ment. To comply with audit recommendations and submit the required supporting documentation to the Audit Team Municipal Accounting Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions The Municipal Accountant's response as of Nov ember 2024 remains the same. The Municipal Accountant will be directed to immediately submit any outstanding Disbursement Vouchers (DVs), Pay rolls, and supporting documents related to prev iously noted def iciencies. Mov ing f orward, the Municipal Accountant will ensure that all claims f or pay ment are f ully documented and appropriately completed to establish the v alidity, legality , and propriety of each transaction prior to processing pay ment. 8 Cost def iciencies totaling P3.661 million, computed by the COA Region IV-B Technical Audit Group (TAG) in the technical rev iew, ev aluation and inspection of three inf rastructure projects implemented by the Municipal Gov ernment of San Jose, resulted f rom non-adherence with approv ed plans and specif ications, to the disadv antage of the gov ernment and its intended benef iciaries. Moreov er, the contract amount of the project, Construction of Riv er Protection (Gabions), was f ound higher than the COA Allowable Cost Estimate by P0.146 million pursuant to Department of Works and Highway s (DPWH) Department Order No. 197 dated December 07, 2016 and COA We recommended that the Municipal May or require the: a. Concerned contractors to correct and rectify the af orementioned def iciencies at their own expense, and prov ide pictures and/or proofs of compliance to the Municipal Accountant f or the ev entual submission to the Audit Team. Otherwise, require them to ref und the equiv alent cost of def ects/deficiencies; and b. Municipal Engineer to; i) submit plausible explanation and/or justif ication on the contract cost exceeding the COA Cost Estimate, and hencef orth ensure that the computation of the ABC is strictly in To comply with audit recommendations and submit the required supporting documentation to the Audit Team Municipal Engineering Of f ice January 2024 December 2024 Partially implemented; ongoing As per the Municipal Engineer’s response dated Nov ember 25, 2024, the status of implementation regarding AAR Item No. 8 on the contract cost exceeding the COA cost estimate remains the same as their response on June 14, 2024.
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 7 of 11 Resolution No. 2020-014 dated January 31, 2020, thereby rendered the reasonableness of the cost of the project doubtf ul. accordance with the DPWH Department Order No 197 and COA Resolution No. 2020-014; ii) adhere to the technical specif ications of pay items pursuant to the DPWH Blue Book; and iii) Closely monitor the project implementation and ensure that projects are implemented in accordance with the approv ed plans and specif ications We also recommended that the Municipal Accountant, upon submission of the required technical documents f rom the Municipal Engineer, immediately submit the same to the Audit Team to f acilitate f urther rev iew and ev aluation. To comply with audit recommendations and submit the required supporting documentation to the Audit Team Municipal Accounting Of f ice January 2024 December 2024 Partially implemented; ongoing The Municipal Accountant's response as of Nov ember 2024 remains the same: They assure that they will immediately f urnish the COA with any documents or updates that they receive from the Municipal Engineers' Of f ice regarding the subject def iciencies. 9 Procurements of goods and inf rastructure projects totaling P51.526 million and P77.506 million, respectiv ely , were made not in accordance with the prov isions of the 2016 Rev ised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184. Moreov er, pay ments thereof and other procurements charged against the LDRRMF and 20% DF amounting to P9.371 million and P41.907 million, respectiv ely , were made despite incomplete/improper documentation, contrary to COA Circular No. 2012-001 dated June 14, 2012 thus, casting doubts on the v alidity , legality , competitiv eness and transparency of the procurement process and project implementations undertaken by the Municipality . We recommended that the Municipal May or instruct the: a. BAC and its TWG to: (i) ensure that all procurement activ ities undertaken by the Municipality are strictly in accordance with the prov isions of the 2016 Rev ised IRR of RA No. 9184; (ii) be cautious and exercise prudence in the examination of eligibility and technical documents submitted by the prospective bidders in f aithf ul adherence to relev ant prov isions of the 2016 Rev ised IRR of RA No. 9184 to prev ent the award of contract to ineligible contractors/suppliers; (iii) immediately submit the lacking bidding documents to the Audit Team to arriv e at a decision in audit; and (iv ) strictly comply with the prescribed period of f urnishing the COA Auditor copies of contracts including the documentary requirements to f acilitate timely rev iew and ev aluation as prescribed by COA Circular No. 2009-001 and COA Circular No. 2012-001; To comply with audit recommendations Bids and Awards Committee January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions In response to the letter dated Nov ember 18, 2024, the of f ice thereby prov ided an update on the status and the action taken of the Bids and Awards committee to comply with the Audit Observ ation No. 2024-009 and its recommendation, to wit: (i) The Bids and Awards Committee observ es and already implements all the recommendations cited in the audit observ ation f or all the current and f uture transactions, and are stricter and more v igilant in scrutinizing the documents submitted by the bidders bef ore and af ter bidding. (ii)The Bids and Awards Committee has already submitted the lacking documents mentioned in the AOM. (iii) The Bids and Awards Committee has already made necessary adjustments with the end-user with regard to the stricter compliance to what is required to the procurement process. b. Municipal Engineer to: i) ensure compliance with DPWH DO No. 197 s. 2016 on the rev ised guidelines in the preparation of ABC; and To comply with audit recommendations and submit the required supporting documentation to the Audit Tea Municipal Engineering Of f ice January 2024 December 2024 (i) Partially implemented; ongoing (ii) Partially implemented; ongoing The Municipal Engineering Of f ice has acknowledged the delay attributed to the project implementation: i) The of f ice is acknowledging the lapse in compliance to the contract duration in the implementation of the Project no. 2 (Upgrading of Farm to Market Road at Sitio Panggulay an to Sitio Sulaf ay , Brgy . Monteclaro) regarding 1
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 8 of 11 ii) closely monitor the project implementation and ensure that construction schedules are strictly f ollowed to ensure that projects are implemented ef f iciently and ef f ectively in accordance with the approv ed plans and specif ications within the contract duration; and (iii) Partially implemented; ongoing (iv ) Partially implemented; ongoing batch of concrete f or lay ing. By the time of that last batch, on that day of the scheduled contract completion, they did not approv e the pouring due to the sizes of coarse aggregates on site that the contractor was able to correct the next day . Since the said remaining work is only f or sev eral hours only , they did not consider it as negativ e slippage considering its percent weight. With all the abov e circumstances, they will impose Liquidated Damages in the f uture whenev er they encounter issues same as this. (ii) Project No. 1 (Opening with Concreting of Farm to Market Road at Brgy . Naibuan) is a road opening in which they were not able to consider certain requests of the cultural minorities’ constituents regarding the boundaries and the existing trails. That in the end, they were able to solv e through dialog and other engineering interv entions to satisfy their requests. Project no. 12 (Concreting of Farm to Market Road at Purok II, Brgy . Magbay ) also reminded them that they should not alway s rely on the existing roads, existing boundaries and through local knowledge by the barangay of f icials alone but also through surv ey v erif ication through DENR. (iii) For them to hav e construction duration is f rom the result of PERT -CPM, and it is a good tool in monitoring project's progress. S-Curve is also a good tool f or cash f low that the contractor is using and submits to the BAC as f inancial documents. Regarding how they prepare their S-Curv e is in their choosing and according to their construction methodology. Dif f erence in actual accomplishment against the submitted S-Curv e is normal, considering it is alway s projected or estimated and the SWA is at Partial stage. Sometimes the chronology of works to be done can be changed according to the site condition. When in heav y downpour of rain, the contractor tends to change the work f rom masonry to roof ing works, so that they can still work in present actual condition. But then, 50%, 60% and 100% is already a big dif f erence that we have to discuss with the contractor during the prebid conf erence to pattern their S-Curv e to the prepared PERT-CPM to av oid a big dif f erence in actuality and in accordance to our duration of contract computation. (iv ) As of now, they are strengthening the project management sy stem and calibrated action in warning negativ e slippage is on their top priority . They did acknowledge the importance of such action to be able to prev ent slippage and ef f ectively deliv er the project on time.
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 9 of 11 c. Municipal Accountant to i) immediately submit the lacking supporting documents including the unsubmitted check disbursement v ouchers, f or v erif ication, to arriv e at a decision in audit, and hencef orth ensure that all claims are duly supported with complete and proper documentation bef ore processing of pay ment to establish the v alidity and propriety of transactions; and ii) Cause the imposition/collection of liquidated damages to concerned suppliers. To comply with audit recommendations and submit the required supporting documentation to the Audit Team Municipal Accounting Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions In the letter f rom the Municipal Accounting Of f ice dated Nov ember 25, 2024, they stated that their of f ice sent a demand letter to Mina De Oro Motors Incorporated on July 17, 2024, demanding pay ment of liquidated damages. They receiv ed it v ia registered mail on September 6, 2024. 10 Procurements of goods and inf rastructure projects totaling P51.526 million and P77.506 million, respectiv ely , were made not in accordance with the prov isions of the 2016 Rev ised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184. Moreov er, pay ments thereof and other procurements charged against the LDRRMF and 20% DF amounting to P9.371 million and P41.907 million, respectiv ely , were made despite incomplete/improper documentation, contrary to COA Circular No. 2012- 001 dated June 14, 2012 thus, casting doubts on the v alidity, legality , competitiv eness and transparency of the procurement process and project implementations undertaken by the Municipality . In v iew of the f oregoing, we recommend that the Municipal May or comply with the existing prov isions regarding the realignment or reprogramming of PPAs. We f urther recommend that the Municipal May or direct the (i) LDRRM Council to prepare the LDRRMFIP based on the total amount of Continuing Appropriations under LDRRMF to ensure the attainment of the objectiv es of LDRRMF in strengthening the capacity to build disaster-resilient communities and to enhance disaster preparedness at all lev els; and To comply with audit recommendations Municipal Disaster Risk Reduction Management Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions As per the Municipal Disaster Risk Reduction and Management Of f icer’s response dated Nov ember 22, 2024; (i) They likewise maintain their commitment to remain steadf ast in adhering to the guidance of the Commission on the matter and to alway s abide by the guidelines on the allocation and utilization of Local Disaster Risk Reduction and Management Fund (LDRRMF) as prov ided f or under NDRRMS-DBM-DILG Joint Memorandum Circular (JMC) No. 2013-1 dated March 25, 2013 in the exercise of our mandate. (ii) To ensure that the commitment of their of fice on the audit observ ation is f ulf illed, all completed f inancial documents and its supporting papers pertaining to all expenditures chargeable against the LDRRMF and the General Fund allocated f or DRRM are being digitized/scanned prior to pay ment and f iled on a database being maintained by the Administrativ e Section, to serv e as backup f ile f or ref erence of this office. This is aside f rom the regular logbook being maintained f or the purpose and the diligent scrutiny that all supporting documents are intact prior to its f inal submission to the Treasury f or pay ment. On the matter pertaining to the use of rescue v ehicles, the undersigned ensures that all requests f or use of these resources were approv ed by the Local Chief Executiv e, with approv ed trav el orders and supported by certif icates of appearance. A logbook and f ile f or this purpose is likewise maintained f or tracking and ref erence. (iii) This of f ice, as the executiv e arm of the MDRRM Council, has been in close coordination with the members of the Local Finance Council on the status of f unding av ailability and status of program implementation. To date, upon query f rom the Municipal Accountant and as ref lected on the f und Utilization report dated October 31, 2024 submitted to this of f ice, the CY 2018 unutilized LDRRMF remains to be reconciled. Said f und utilization report is hereto attached as Annex A. Clarif ication on the current status of
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 10 of 11 reconciliation ef f orts on this matter would be best answered by the of f ice of the Municipal Accountant and the Municipal Budget Of f ice. ii) Municipal Budget Of f icer and Municipal Accountant to expedite the reconciliation of their records f or the prompt transf er of the total unexpended/unutilized balances of LDRRMF in the Trust Fund books under the Trust Liability -DRRM account solely f or the purpose of supporting disaster risk reduction and management activ ities within the next f iv e (5) y ears. To comply with audit recommendations Municipal Budget Of f ice January 2024 December 2024 Partially implemented; ongoing As per the Municipal Budget Of f icer’s response dated Nov ember 29, 2024, the status of implementation regarding AAR Item No. 10 on the LDRRM Fund f or the Calendar Year 20023 remains the same as of Nov ember 2024. They said that the reason f or the partial delay in the account reconciliation of the Local Disaster Risk Reduction and Management (LDRRM) Fund arises f rom the Municipal Accountant's ref usal to accept the reconciled f igures f or the y ears 2013 to 2018. This ref usal is specif ically due to the absence of phy sical copies of supporting disbursement v ouchers f or certain transactions. Although both the Municipal Accounting Of f ice and the Municipal Budget Of f ice hav e made ef f orts to v erif y the records and reconcile discrepancies, the lack of these crucial supporting documents has hindered the f inalization of the reconciled balances. iii) Municipal Accountant to immediately submit the required supporting documents, including the unsubmitted check disbursement v ouchers, f or v erif ication, to arriv e at a decision in audit, and hencef orth ensure that all claims are duly supported with complete and proper documentation bef ore processing of pay ment to establish the v alidity and propriety of transactions. To comply with audit recommendations and submit the required supporting documentation to the Audit Team Municipal Accounting Of f ice January 2024 December 2024 Partially implemented; ongoing The Municipal Accountant's response as of Nov ember 2024 remains the same. They acknowledged the recommendation to submit the necessary supporting documents, including the pending check disbursement v ouchers, f or v erif ication. Steps will be taken promptly to prov ide these documents to assist with the audit process. Additionally , the Municipal Accountant will put measures in place to ensure that all f uture claims include complete and proper documentation prior to pay ment processing. This will help establish the v alidity and propriety of all transactions going f orward. 11 Utilization of the 20% Dev elopment Fund (DF) was not f ully maximized due to the inclusion of not well-planned and procurement-and-implementationready programs, projects and activ ities (PPAs) such that, of the P191.792 million current and continuing appropriations, only a total of P118.935 million or 62.01 percent was expended/utilized per Fund Utilization Report, thereby depriv ing the constituents of the immediate benef its or serv ices that could hav e been obtained had the dev elopment projects been implemented. We recommended that the Municipal May or, with the assistance of the Local Dev elopment Council, the Municipal Planning and Dev elopment Coordinator, maximize the utilization of the 20% DF by including those PPAs that are well-planned and procurementand-implementation-ready to expedite the procurement and implementation of the identif ied dev elopment projects to attain the desirable socioeconomic dev elopment and env ironmental management outcomes of the LGU and f or the intended users/benef iciaries to enjoy the immediate benef its f rom said dev elopment projects. To comply with audit recommendations Municipal Planning and Dev elopment Of f ice January 2024 December 2024 Partially implemented; ongoing As per the Municipal Planning and Dev elopment Coordinator’s response dated December 05, 2024, the COA audit report noted that of the total continuing appropriations amounting to P 191,792,000.00, only P 118,935,000.00 (62.01%) was utilized. The COA recommended that the Municipal May or, with the assistance of the Local Dev elopment Council (LDC) and the Municipal Planning and Dev elopment Of f ice (MPDO), maximize the utilization of these f unds. In response to the COA’s recommendation, the Municipal May or, with the assistance of the LDC and the MPDO, took action to realign the remaining f unds. Appropriation Ordinance No. 2024-022 (A) realigned P 50,306,566.00 f or v arious projects. Ef f orts are underway to utilize the remaining balance of the f und. Other appropriated projects are currently undergoing the bidding process and are expected to be completed by the end of 2024.
Municipality of San Jose Re: Agency Action Plan and Status of Implementation Page 11 of 11 Prepared by: Review ed by: Approved by: RICA MAE S. DIOSAY JOSEPH E. SALGADO, EnP REY C. LADAGA Unit Head for Management Audit/ IAS Oversight Committee Chairperson Municipal Mayor Economic Researcher MARICOE VENN C. PACLIBAR Unit Head for Operations Audit/ Population Program Officer II VIRGILIO M. AGUILOS, JR. IAS Section Head/ Project Development Officer III 12 The Municipality was not able to secure a duly endorsed GAD Plan and Budget (GPB) f rom the Department of the Interior and Local Gov ernment (DILG) Prov incial Of f ice contrary to Section 4.1.C.6 of Philippine Commission on Women (PCW)-Department of the Interior and Local Gov ernment (DILG)- Department of Budget and Management (DBM)-National Economic and Dev elopment Authority (NEDA) Joint Memorandum Circular (JMC) No. 2013-01, s. 2013 as amended by Section 5 of the PCWDILG-DBM-NEDA JMC No. 2016-01 dated January 12, 2016, thus, whether the utilization of GAD f unds totaling P25.995 million, was responsiv e to the existing gender issues and concerns in the Municipality could not be determined. We recommend that the Municipal May or, through the GAD Focal Point Sy stem, ensure reconciliation of the respectiv e records/reports with the Municipal Accounting Of f ice to ref lect accurate and reliable data/inf ormation and to av oid conf usion on the part of the users of these reports. To comply with audit recommendations Municipal Planning and Dev elopment Of f ice January 2024 December 2024 Observ ed and implemented f or all current and f uture transactions As per Municipal Planning and Dev elopment Coordinator/GAD Focal Person’s response dated December 05, 2024 regarding the item No. 12 of the Annual Audit Report (AAR), which noted the Municipality ’s f ailure to secure a duly endorsed GPB f rom the Department of Interior and Local Gov ernment (DILG) Prov incial Of f ice, the f ollowing correctiv e action hav e been taken: (a) The GAD Focal Point Sy stem has reconciled records with the Municipal Accounting Of f ice to ensure accurate and reliable data. (b) The GPB f or 2024 and 2025 has been rev iewed and aligned with the guidelines outlined in the PCWDILG-DBM-NEDA JMC No. 2016-01. As of Nov ember 2024, the Prov incial Planning and Dev elopment Of f ice (PPDO) and the DILG Prov incial Field Of f ice hav e f ully endorsed the GPBs f or both 2024 and 2025, conf irming f ull compliance with the required requirements.