Beruflich Dokumente
Kultur Dokumente
COMMISSION ON AUDIT
Regional Office No. XIII
Butuan City
ON THE
Annex A
Agency sign-off:
_______________________________ __________
Name and Position of Agency Officer
Date
Note: Status of Implementation may either be (a) Fully Implemented, (b) Ongoing,
(c) Not Implemented, (d) Partially Implemented, or (e) Delayed
Action
Taken/
Action
to be
Taken
VICTORIANA P. MAQUILING
Supervising Auditor
Sir:
In compliance with Section 2, Article IX-D of the Philippine Constitution and
Section 43 of the Government Auditing Code of the Philippines (PD1445), we
conducted a financial and compliance audit on the accounts and operations of the
Butuan City Water District, Butuan City for the year ended December 31, 2013.
The audit was conducted to verify that the Agencys financial reports are free
of material misstatements and were prepared in accordance with applicable laws, rules
and regulations and in conformity with generally accepted state accounting principles.
Except for the effects of the noted deficiencies, as discussed in detail in Part
III of this report, there is reasonable assurance that the financial statements are free of
material misstatements and were prepared in accordance with applicable laws, rules
and regulations and in conformity with generally accepted state accounting principles.
Our audit was conducted in accordance with the Philippine Public Sector
Standards of Auditing and we believe that it provides reasonable bases for the results
of audit.
EXECUTIVE SUMMARY
INTRODUCTION
The Butuan City Water District was created by virtue of Resolution No. 256
adopted by the Municipal Board of the City of Butuan in its regular meeting on March
28, 1974 pursuant to Presidential Decree No. 198, as amended. The Resolution was
approved by the City Mayor on April 1, 1974.
On June 6, 1974, the District was given its Conditional Certificate of
Conformance officially recognized by the Local Water Utilities Administration
(LWUA).
The Management of the District is governed by a policy making body whose
functions are to formulate and to establish sound operating policies of the District in
order to maintain its viability and self-sufficiency.
The policy making body is composed of five (5) representatives from the
different sectors of the community with a term of six years, as provided by P.D. 198,
appointed by the City Mayor of Butuan City.
Presidential Proclamation No. 1076 dated September 4, 1997 declared the
preservation of 4,367.44 hectares of the Taguibo River Watershed Forest Reserve at
Taguibo, Butuan City.
Since July 2008, the District has expanded its service area connections from
the initial number of 16 to 53 urban and rural barangays out of the 86 total numbers of
barangays in Butuan City boosting the total number of service connections to 37,703.
In CY 2007, it completed its Phase II Comprehensive Water Supply System Project,
involving development of new water supply source, installation of 900 mm. diameter
transmission line from the new source at Sitio Iyao, Barangay Anticala which
stretches for nine kilometers to Barangay Taguibo, construction of Infiltration
Gallery, 467 linear-meter tunnel, pressure regulating valve structure, water treatment
and storage facilities.
FINANCIAL HIGHLIGHTS
For CY 2013, the Butuan City Water District had total assets of
P1,295,457,657.92, total liabilities and deferred credits of P956,298,071.03 and
equity of P339,159,586.89. Net income for CY 2013 was P22,833,491.31, which is
388% more than the CY 2012 income of only P4,678,366.81.
OPERATIONAL HIGHLIGHTS
For CY 2013, the District has the following financial ratios to show for its
performance.
A. Liquidity Ratios indicate the ability of the District to meet/pay short
term (1 year) obligations.
i
Ratio
Formula
Ratio
1. Current Ratio
2. Quick Ratio
Cash+Receivables/Current Liab.
(122,293,227.60/43,354,638.59 =2.82)
(80,466,424.53/25,417,280.92 =3.17)
3. Net Working
Capital
2013
3.24:1
2012
3.95:1
2.82:1
3.17:1
97,045,205.12
74,988,165.05
The ratios above showed that although the District is very liquid, current ratio
slightly decrease in CY 2013 as compared to CY 2012. But on the positive note,
working capital increased, meaning more funds to carry its operations.
PLANS AND TARGETS AGAINST ACCOMPLISHMENTS
For CY 2013, the District has the following major projects and corresponding
accomplishments:
1. WMMP
2. Rehabilitation of Emenville Reservoir
3. Renovation of Engineering Office
4. Steel Collar Plate - Brgy. Anticala
5. Construction of Deepwell - Brgy Taguibo
6. Ampayon/Pagatpatan Temporary Lines
7. Dumalagan Expansion Line
8. Perimeter Fence of Pinamanculan Sub-station
9. Water Meter Maintenance Program
10. Improvement of BOD Room/Library
11. Meter Shop-Pump Station 1
12. Brgy. Mahayahay Multi-purpose hall
13. CR at Brgy. Mahayahay
14. Libertad In Line Booster Pump
15. Barangay Anticala-Capsulized Manhole
16. Pinamanculan Steel Reservoir
14,887,717.00
3,611,567.24
122,104.85
597,461.60
2,774,747.50
548,199.86
1,186,194.00
490,914.05
13,083,230.01
329,473.89
212,457.40
215,156.42
203,692.86
1,858,264.12
137,781.05
1,893,645.83
In progress
In progress
Completed
Completed
Completed
Completed
In progress
Completed
In progress
In progress
Completed
In progress
In progress
In progress
In progress
In progress
Per Actual
279,464,818.91 P
Per Budget
286,695,722.83 P
Variance
(7,230,903.92)
62,671,852.60
35,978,799.52
51,908,454.00
18,598,966.56
87,473,254.92
256,631,327.60
22,833,491.31 P
75,557,058.92
43,657,400.65
52,791,168.54
24,930,873.48
86,264,591.88
283,201,093.47
3,494,629.36 P
(12,885,206.32)
(7,678,601.13)
(882,714.54)
(6,331,906.92)
1,208,663.04
(26,569,765.87)
19,338,861.95
ii
SCOPE OF AUDIT
A financial and compliance audit was conducted on the accounts and
operations of the District for Calendar Year 2013. The audit consisted of verification,
reconciliation and analysis of accounts, and such other procedures considered
necessary to ascertain the extent of compliance with laws, rules and regulations and
budgetary requirements.
INDEPENDENT AUDITORS REPORT
The Auditor rendered a qualified opinion on the fairness of presentation of the
financial statements as of December 31, 2013 due to some deficiencies noted in the
accounts as discussed in Part III of this report.
SUMMARY OF SIGNIFICANT FINDINGS AND RECOMMENDATIONS
1.
2.
3.
4.
The District still hired a Technical Services Consultant for the Office of
the Board of Directors on January to April 2013 who was paid the total
amount of P 60,000.00 which was considered unnecessary per COA
Circular No. 85-55A because her tasks can be handled by the existing
personnel of the District.
Discontinue the engagement of a Technical Services Consultant specially that
she is out of the country. Fill up the position of Board Secretary if it is
necessary.
5.
6.
supported with the list of available records and extent of confirmation made
as to its collectability and the reasons for the adjustments thereof, subject to
certain conditions:
1. Death of the respondent official/ employees; or
2. Unknown whereabouts of the official/employees, and that he could
not be located despite extra-diligent effort to find him; or
3. Incapacity to pay or insolvency of the respondent employee;
4. The account remained unpaid and outstanding for more than 5
years despite diligent efforts to collect exerted by the accountable
officer; and
That all conditions aforementioned shall exist and be certified to by the
respective accountable officer.
7.
8.
The Districts four units of vehicles were not registered in the name of the
District and were still not marked with For Official Use Only and the
agency name, contrary to Section 58 of P.D. 1445 and COA Circular
No. 75-6.
Exert effort in facilitating the immediate transfer of the ownership of the
subject vehicles to the Butuan City Water District as the registered owner. In
the meantime, pending the transfer of ownership and the change to
government plate, implement the marking of the vehicles with the prescribed
three (3) inches For Official Use Only together with the name and logo of
the District.
9.
vi
This Period
NS/ND/NC
Settlement
Ending Bal.
12/31/2013
Notice of Suspension
Notice of Disallowance
Notice of Charge
153,400.00
15,236,213.63
-
600,000.00
10,258,072.51
-
600,000.00
25,494,286.14
-
Total
15,389,613.63
10,858,072.51
26,094,286.14
153,400.00
Details
ND#2013-001 to 012-101(2011)
ND#2013-013 to 023-101(2011)
ND#2013-026 to 036-101(2011)
ND#2013-037-101(2011)
ND#2013-038 to 127-101(2011)
ND#2013-128 to 132-101(2011)
ND#2013-133-101(2011)
ND#2013-134 to 193-101(2011)
ND#2013-194 to 198-101(2011)
Amount
Rice Subsidy
Meal Subsidy
Subsistence Allowance
Gift Certificates
Excessive RATA
BOD-Financial Assistance
Year-end Incentives
BOD-Honorarium
Excessive Travelling Allowance
TOTAL
4,759,630.00
2,194,500.00
593,253.60
396,121.00
2,082,330.00
98,000.00
P
10,123,834.60
Amount
CGS-ND-2013-001
CGS-ND-2013-002
CGS-ND-2013-003
CGS-ND-2013-001
92,492.20
2,183,370.00
865,400.00
12,023,931.43
Total
15,165,193.63
vii
viii
TABLE OF CONTENTS
Part
Page
AGENCY BACKGROUND
II
8
13
4
7
III
24
IV
46
ANNEXES
B. MISSION
Butuan City Water District, a service-oriented entity, endeavours to preserve
the environment, deliver quality service and satisfy its customers.
C. VISION
A leader in the water and sanitation industry advancing integrated water
resource management.
D. FINANCIAL HIGHLIGHTS
The comparative financial condition and results of operations of the Butuan
City Water District for Calendar Years 2013 and 2012 were as follows:
2013
2012
Increase/Decrease
Amount
%
Financial Condition
Assets
Liabilities
Equity
1,295,457,657.92 P
956,298,071.03
339,159,586.89
1,273,021,571.37 P
956,432,318.23
316,589,253.14
22,436,086.55
(134,247.20)
22,570,333.75
2%
0%
7%
279,464,818.91 P
169,158,072.68
110,306,746.23
87,473,254.92
22,833,491.31 P
267,025,185.64 P
160,958,824.29
106,066,361.35
101,387,994.54
4,678,366.81 P
12,439,633.27
8,199,248.39
4,240,384.88
(13,914,739.62)
18,155,124.50
5%
5%
4%
-14%
388%
Results of Operation
Income
Expenses
Operating Income
Interest and Bank Charges
Net Income
E. OPERATIONAL HIGHLIGHTS
For CY 2013, the District has the following financial ratios to show for its
performance.
A. Liquidity Ratios indicate the ability of the District to meet/pay short
term (1 year) obligations.
Ratio
Formula
Ratio
1. Current Ratio
2. Quick Ratio
Cash+Receivables/Current Liab.
(122,293,227.60/43,354,638.59 =2.82)
(80,466,424.53/25,417,280.92 =3.17)
3. Net Working
Capital
2013
3.24:1
2012
3.95:1
2.82:1
3.17:1
97,045,205.12
74,988,165.05
The ratios above showed that although the District is very liquid, current ratio
slightly decrease in CY 2013 as compared to CY 2012. But on the positive note,
working capital increased, meaning more funds to carry its operations.
B. Financial Leverage Ratios indicates how much of the Districts assets
are financed through borrowings or liabilities.
Ratio
Formula
Ratio
1. Debt Ratio
2013
72%
2.Debt/Equity
Ratio
2.77:1
2012
74%
3.02:1
Data showed that 72% of the Districts total assets for CY 2013 and 74% for
CY 2012 were financed through borrowings or debts. It also showed that its liability
ratios were 3.02:1 of its equity for CY 2012 and 2.77:1 for CY 2013, showing
unhealthy financial leverage indicator since creditors and not equity have more claims
over its assets.
P 14,887,717.00
3,611,567.24
122,104.85
597,461.60
2,774,747.50
In progress
In progress
Completed
Completed
Completed
548,199.86
1,186,194.00
490,914.05
13,083,230.01
329,473.89
212,457.40
215,156.42
203,692.86
1,858,264.12
137,781.05
1,893,645.83
Completed
In progress
Completed
In progress
In progress
Completed
In progress
In progress
In progress
In progress
In progress
Per Actual
279,464,818.91 P
Per Budget
286,695,722.83 P
Variance
(7,230,903.92)
62,671,852.60
35,978,799.52
51,908,454.00
18,598,966.56
87,473,254.92
256,631,327.60
22,833,491.31 P
75,557,058.92
43,657,400.65
52,791,168.54
24,930,873.48
86,264,591.88
283,201,093.47
3,494,629.36 P
(12,885,206.32)
(7,678,601.13)
(882,714.54)
(6,331,906.92)
1,208,663.04
(26,569,765.87)
19,338,861.95
Qualified Opinion
In our opinion, except for the possible effects of the matter described in the
preceding paragraph, the financial statements present fairly, in all material respects,
the financial position of Butuan City Water District as at December 31, 2013, and its
financial performance and its cash flows for the year then ended in accordance with
the Generally Accepted Accounting Principles.
Emphasis of Matter
We draw attention to Note 7 to the financial statements which pertains to the
uncertainty of the appeal filed by the District with the Local Water Utilities
Administration (LWUA) for the cancellation of the pre-termination fee amounting to
P17,143,088.76 for Loan Account No. 3-757 and 4-2531 which is already in the
Office of the Government Corporate Council (OGCC) for final decision.
Likewise, Note 9 to the financial statement emphasized that part of the
properties were held as collateral for the loan from the DBP amounting to P550M.
These include the Land, Building and Structures, PRV and Pumping Station No 1.
Other Matter
For CY2013, allowances and benefits amounting to P2,644,558.25 were still
granted to the Districts officials and employees without legal basis despite the
issuance by the Auditor of Notices of Disallowances on prior years claims.
COMMISSION ON AUDIT
By:
VICTORIANA P. MAQUILING
Supervising Auditor
2012
2,074,496.79 P
30,000.00
30,000.00
79,946,597.90
1,208,544.76
30,000.00
48,310,359.02
82,081,094.69 P
49,548,903.78
Account No.
Balance
Savings 1
0805-019620-530
324,752.57
Current
0805-019619-030
1,281,638.60
Savings 2
0805-019621-530
20,487.97
JSA-Savings 2
0805-019505-530
67,848,547.21
Savings
0805-019620-531
75,111.00
Savings
0361-1158.72
Savings
0033-006749-001
252,155.42
10,143,905.13
P
79,946,597.90
2011
Accounts Receivable
P
Installment Sales Receivable
less : Allowance for Doubtful Accounts
34,401,765.09 P
1,338,988.03
(616,712.67)
30,447,426.76
470,093.99
(156,568.45)
35,124,040.45 P
30,760,952.30
14
Zone
01 to 05
06 to 10
11 to 15
16 to 20
Amount
6,119,045.93
6,287,252.79
10,883,322.75
11,112,143.62
34,401,765.09
616,712.67
33,785,052.42
Total
Less: Allowance for Doubtful Accounts
Net Realizable Value
P
P
2012
98,164.67 P
205,498.04
4,167,717.11
26,899.70
388,437.94
4,182,873.00
4,471,379.82 P
4,598,210.64
Date
RD Policarpio
Saranggani Mixer
FF Cruz Construction
Receivable from former BCWD employees
Receivable from various concessionaires
Receivable from various water districts
Others
Total
15
12/31/2008
10/31/1996
12/31/2006
varoius dates
varoius dates
varoius dates
varoius dates
Amount
P
3,024,996.48
630,531.53
118,492.00
15,967.42
16,075.45
47,865.63
313,788.60
4,167,717.11
2012
513,491.11 P
41,610.00
583,056.38
86,682.15
344,281.00
5,744,498.62
94,094.64
5,850,235.00
4,848,667.18
582,250.39
44,290.00
348,439.89
61,845.15
490,111.00
4,557,115.74
110,694.64
3,290,960.00
5,855,103.99
18,106,616.08 P
15,340,810.80
2012
138,185.74 P
Advances to Contractors
Guaranty Deposits
1,092,070.59
106,630.53
368,544.84
998,819.87
601,643.58
658,020.40
17,143,088.76
17,389,656.43
238,105.46
P
19,213,094.13 P
19,521,672.07
16
2013
52,690.81 P
431,150.00
16,000.00
549,279.27
42,950.51
1,092,070.59 P
2012
52,690.81
431,150.00
16,000.00
463,620.55
12,581.00
22,777.51
998,819.87
P 211,398.20
P 19,166.66
P 7,540.60
P 238,105.46
2012
706,755.00 P
699,636.15
706,755.00 P
699,636.15
Accu. Dep'n
Balance, End
6,779,041.90 P
1,054,100,283.41
77,132,909.13
176,720,764.81
784,004.82
134,409.02
8,580,864.23
30,345,439.61
P
165,353,844.82
16,800,311.25
59,820,804.74
532,835.44
5,948,554.57
-
6,779,041.90
888,746,438.59
60,332,597.88
116,899,960.07
251,169.38
134,409.02
2,632,309.66
30,345,439.61
1,354,577,716.93 P
248,456,350.82 P
1,106,121,366.11
Part of the properties were held as collateral for the loan refinancing
availed from the DBP amounting to P 550M. Properties include the Land, Bldg.
& Structure such as the Admin Bldg. and Lot, PRV and Pumping Station No 1.
17
Also form part of this account is the Phase II project amounting to a total
of P947,601,138.01. This was previously included in Construction-in-Progress
and was only reclassified as completed project last year CY 2011 subject for
depreciation. Components of this project include, among others, the transmission
and distribution pipelines, civil work structure, installation of valves, service
vehicles used in the project, and electro-mechanical equipment.
The Phase II project was temporarily turned over to the District on June
2005, but was commissioned for operation only on June 2007. However, to date,
there has been no final acceptance executed because of the on-going case filed
against RD Policarpio arising from the said project.
Construction in-Progress account amounting to P 30,345,439.61covers on-going
projects which aimed to improve the services of the District, to wit:
WMMP
Multi-Purpose Hall at Mahayahay
CR at Mahayahay
Emenville Reservoir Rehab
Line Booster Pump Station and Site Devt.
Bod Record Room / Library
Perimeter Fence at Pump Station 2
Bunkhouse Renovation
Deep Wellat Brgy. Taguibo
Dumalagan Expansion Line
Pump Station at Taguibo
Perimeter Fence at Pinamanculan
Construction of CR at Training Hall
Ground Steel Reservoir
EMT (for adjustment)
Ubod-Ubod&Basay Upgrading of lines
Malalag Expansion
Lemon Expansion
Brgy. Mahay&Amakan Upgrading
Tiniwisan Upgrading
Casa Peral Upgrading
Sunrise, Ampayon
Dalingdingan Expansion
Upgrade Mag 500
Backfilling
Renovation of CR @ garage
Renovation of GM's Office
Renovation of Physicians Clinic
Renovation of Conference room
Repainting Of Boardroom Walling
Construction of CR at Emenville Reservoir
Renovation of AGM's Office
Total
18
16,351,100.66
204,398.60
142,585.00
3,999,903.80
2,053,204.12
296,526.50
103,540.00
13,922.00
584.40
74,634.16
77,824.00
115,600.00
430.00
1,817,900.00
(2,630.00)
440,063.76
48,544.48
700,210.88
1,022,579.01
1,182,689.00
126,207.52
49,321.00
517,741.52
350,000.00
31,476.70
158,907.00
197,043.10
35,224.95
11,808.00
45,380.00
149,631.45
29,088.00
30,345,439.61
2012
Sinking Fund-DBP#0805-026855-530
P
Other Reserve Funds
Intangible Assets / IT Software
Other Assets
Total Other Assets
P
Less: Accumulated Amortization-Intangible Assets
29,034,813.64 P
306,298.00
343,638.48
14,920.00
29,699,670.12 P
66,358.48
20,968,259.46
306,298.00
82,838.48
14,920.00
21,372,315.94
40,438.48
29,633,311.64 P
21,331,877.46
200,298.00
100,000.00
6,000.00
P 306,298.00
The Environmental Guarantee Fund was established last March 2010 per
Board Resolution No. 024, Series of 2010, as fund source for the indemnification
of damages caused by the Phase II Water Supply System Project and the
immediate rehabilitation and/or restoration of affected parties, communities and
ecosystems.
Other Assets P 14,920.00
This consists of Property and Equipment with useful life of more than one
year but small enough to be depreciated. This is maintained by recording a par
value of P1.00 for every properties of this kind.
19
2012
14,006,221.50
2,580,029.75
11,236,617.02
15,531,770.32
43,354,638.59
898,249,195.70
941,603,834.29
12,616,110.48
2,217,047.34
10,584,123.10
10,197,368.63
35,614,649.55
907,782,916.85
943,397,566.40
Amount
Tradepoints, Inc.
December 2013
EC La Forteza
December 2013
1,527,051.20
December 2013
941,217.00
December 2013
787,750.00
December 2013
741,370.70
Moldex Products
December 2013
444,814.52
Vocom Enterprise
December 2013
439,000.00
RD Policarpio
December 2013
506,476.63
December 2013
430,153.82
Makati Foundry
December 2013
436,516.00
Kupler Industries
December 2013
368,000.00
December 2013
292,578.50
December 2013
380,165.00
December 2013
4,103,128.13
Total
2,608,000.00
14,006,221.50
Amount
Due to GOCC
Due to NGA's
1,045,862.66
1,511,347.16
22,819.93
2,580,029.75
Amount
4,004,743.63
5,985,709.63
580,711.36
Due to Members
474,802.07
Others
190,650.33
20
11,236,617.02
Type/Kind
of Loan
Current
Portion
Long Term
Total Amount
Paying
Period
Amortization
Period
Monthly
Amortization
December 2010
- November
2025
4,158,836.33
2,623,404.95
LWUA
Open
Account Bill
4-2531
Supplemental
Works - RWIG
RWIG
TOTAL
LWUA
19,232,891.60
19,232,891.60
3,350,000.00
3,350,000.00
22,582,891.60
22,582,891.60
DBP
3965-004004-7
P 550M
9,574,127.39
3965-004007-6
P 350M
5,439,348.06
3965-004008-9
P 5.5M
203,839.59
3965-004010-1
P 2.38M
95,064.68
3965-004009-6
P 5.4M
TOTAL DBP
TOTAL LOANS PAYABLE
522,547,590.62
532,121,718.01
180
months
340,907,630.19
346,346,978.25
180
months
November 2012
- October 2027
5,174,561.23
5,378,400.82
180
months
April 2013
March 2028
50,395.15
2,235,853.46
2,330,918.14
180
months
April 2013
March 2028
22,356.30
219,390.60
4,800,668.60
5,020,059.20
180
months
December 2013
Nov. 2028
51,593.93
15,531,770.32
875,666,304.41
891,198,074.42
15,531770.32
898,249,195.70
913,780,966.02
6,906,586.69
The LWUA Loan account nos. 3-324, 3-265,and 3-521 were paid in full
last November 2013.
Furthermore, the request for a decrease in interest rate on loans to DBP
was finally approved and implemented this month, December 2013. From a rate
of 10% for the P550M and 9.5% for the P350M loan and the other loans, it was
decreased to 7.5% per annum.
12.0
12,719,064.25
543,598.89
1,431,573.60
P 14,694,236.74
21
27,693.48
Breakwater
28,000.00
NORMINRMC
1,100.00
Bidding Fees
1,279,819.22
(67,784.50)
6,413.04
53,449.02
42,000.00
10,677.49
6,844.52
38,361.33
5,000.00
1,431,573.60
2012
Government Equity
Donated Capital
Retained Earnings
2,367,355.65 P
15,546,853.94
321,245,377.30
2,367,355.65
15,546,853.94
298,675,043.55
339,159,586.89 P
316,589,253.14
Government Equity refers to assets turned over by the National and Local
Government during the inception and initial operations of the District. Included is
the donated lot by the City Government with TCT No. 6033 amounting to Ninety
Seven Thousand Six Hundred Sixty Pesos Only (P 97,660.00). Also included in
this account is the donated lot, with market value of P100,000, by E.B. Villarosa for
Reservoir Site located at Emenville Subdivision with a land area of 400 sq. m.
22
2012
Balance, Beginning
P
Add: Net Income for the Year
Add/Deduct: Prior Year Adjustment
298,675,043.55 P
22,833,491.31
(263,157.56)
302,872,851.42
4,678,366.81
(8,876,174.68)
Balance, End
321,245,377.30 P
298,675,043.55
Debit
Credit
157,501.90 P
30,536.00
123,059.28
30,901.22
38,067.49
52,792.45
73,821.54
384,918.72 P
121,761.16
CY 2013
276,020,722.35 P
3,444,096.56
279,464,818.91 P
150,559,106.12
18,598,966.56
87,473,254.92
256,631,327.60 P
264,377,970.21
2,647,215.43
267,025,185.64
144,433,428.74
16,525,395.55
101,387,994.54
262,346,818.83
22,833,491.31 P
4,678,366.81
Income
23
CY 2012
Billed Water
Consumption
(m3)
Revenue
Water %
Non-Revenue
%
Allowable
Excess
January
February
March
April
May
June
July
August
September
October
November
December
a
797,442
611,082
663,849
764,106
826,031
738,584
863,529
917,498
659,835
885,167
797,315
1,024,043
b
540,170
549,293
501,622
580,902
578,285
621,204
606,264
556,721
551,695
584,906
636,260
570,679
c=b/a
67.74%
89.89%
75.56%
76.02%
70.01%
84.11%
70.21%
60.68%
83.61%
66.08%
79.80%
55.73%
d=1-c
32.26%
10.11%
24.44%
23.98%
29.99%
15.89%
29.79%
39.32%
16.39%
33.92%
20.20%
44.27%
e
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
f=d-e
12.26%
-9.89%
4.44%
3.98%
9.99%
-4.11%
9.79%
19.32%
-3.61%
13.92%
0.20%
24.27%
Total
9,548,481
6,878,001
72.03%
27.97%
20%
7.97%
Month
Converting non-revenue water losses for the period January to December 2013
using the average water rate of P20.86/m3 (minimum charge of P208.65 for the first 10
m3 of water = P208.65/10) would result to an estimated revenue loss of P5,294,555.87.
This amount is computed by deducting unbilled metered water percentage from NRW
percentage, to come up with water revenue losses net of the allowable 20% NRW.
Details of computation is shown below:
24
% of
Meter
Unbilled
Water
(g=f/a)
NRW % in
Non Revenue
Excess of
Water in m3 (In Rate/m3
20% less
Excess of 20%) of Water
Unbilled %
(i=hxa)
(h=e-g)
Month
Water
Production
(m3)
(a)
a
January
February
March
April
May
June
July
August
September
October
November
December
797,442
611,082
663,849
764,106
826,031
738,584
863,529
917,498
659,835
885,167
797,315
1,024,043
540,170
549,293
501,622
580,902
578,285
621,204
606,264
556,721
551,695
584,906
636,260
570,679
67.74%
89.89%
75.56%
76.02%
70.01%
84.11%
70.21%
60.68%
83.61%
66.08%
79.80%
55.73%
32.26%
10.11%
24.44%
23.98%
29.99%
15.89%
29.79%
39.32%
16.39%
33.92%
20.20%
44.27%
12.26%
-9.89%
4.44%
3.98%
9.99%
-4.11%
9.79%
19.32%
-3.61%
13.92%
0.20%
24.27%
48,342
53,214
47,146
43,219
45,166
33,551
32,748
34,505
27,234
129,615
9,012
3,218
6.06%
8.71%
7.10%
5.66%
5.47%
4.54%
3.79%
3.76%
4.13%
14.64%
1.13%
0.31%
6.20%
-18.60%
-2.66%
-1.68%
4.52%
-8.65%
6.00%
15.56%
-7.74%
-0.72%
-0.93%
23.96%
49,442
-113,641
-17,689
-12,836
37,374
-63,888
51,811
142,772
-51,061
-6,387
-7,420
245,337
20.86
20.86
20.86
20.86
20.86
20.86
20.86
20.86
20.86
20.86
20.86
20.86
1,031,351.78
-2,370,559.60
-368,988.37
-267,763.13
779,617.47
-1,332,699.51
1,080,781.63
2,978,232.26
-1,065,132.46
-133,241.16
-154,781.20
5,117,738.16
Total
9,548,481
6,878,001
72.03%
27.97%
7.97%
506,970
5.31%
2.66%
253,814
20.86
5,294,555.87
Revenue
Water (m3)
(b)
Revenue
Water %
(c=b/a)
Excess from
Meter
Non
20%
Unbilled
Revenue %
Allowable ( Water -Per
(d=100%-c)
e=d-20%)
MDS (f)
Estimated
Losses (k=ixj)
NRW percentage, address possible causes of the problem such as illegal connections
and pilferages through random surprise inspections of water meters and lines.
Conduct also rehabilitation of old and defective water meters and pipelines to
strengthen against high water pressure that may cause leakages.
2.
Fund for CY 2013. These were granted in pursuant to Board Resolution No. 044-2013
dated March 23, 2013. The authority to disburse such fund was granted by the Office
of the President on September 6, 2012. Summary of the funds advanced is as follows:
JEV#
JEV Date
13-06-094
13-09-016
13-12-140
6/30/2013
9/30/2013
12/31/2013
Amount
P
300,000.00
150,000.00
150,000.00
600,000.00
Further verification revealed that the funds were liquidated through the
issuance of certifications, signed by the General Manager and the Program
Administrator (Annex 2) and not by the credit advice from the COA Chairman or his
representative as required by COA Circular 2003-003.
Recommendation:
a. Ensure that cash advances for intelligence fund should only be considered
fully liquidated upon receipt of the credit advice from the COA Chairman
or his/her representative.
b. Restore the cash advance account until after the receipt of the Credit
Notice from the COA.
During the exit conference, Management commented that they dropped the
cash advances from their books because they have not received any credit notice from
the office of the COA Chairman for all their liquidations that they submitted for the
last two (2) years. The GM also want to clear the advances in the books since he will
be retiring soon.
We stressed to them that the policy on the liquidation should be followed, that
is, cash advances for intelligence fund will be liquidated and dropped from the books
upon the receipt of credit notice from the COA Chairman. We also asked for copies of
the transmittal letters of their liquidation submitted to the COA Chairman, for us to
follow up the liquidation specially that the GM will be retiring soon and needs to be
cleared of his cash advances.
3.
Records disclosed that the District still granted in CY2013 allowances and
fringe benefits regularly or on a monthly basis to its officials and employees without
legal basis despite our audit recommendation contained in the prior years Annual
Audit Reports to stop granting the following unauthorized allowances and benefits:
1.) Rice Allowance P1,000.00
2.) Meal Subsidy Allowance at P70.00 per day
27
3.) Subsistence Allowance of P500.00 per month for Officials receiving fixed
RATA
4.) Medical/Dental/Ophthalmological benefits at P9,000.00 per year/
personnel
The total amount of P2,644,558.25 were granted for such allowances and
fringe benefits for CY 2013 as follows:
Allowances Granted
1. Rice Allowance
P1,000.00/month
2. Meal Subsidy Allowance P 70.00 / day
3. Subsistence Allowance
P 500/month
5. Medical Allowance
P 9,000.00/employee
5. Dental Allowance
Total
Annex #
814,000.00 Annex 3
694,550.00 Annex 3.1
36,000.00 Annex 3.2
1,100,008.25
Annex 3.3
2,644,558.25
4. Water districts shall comply strictly with the parameters laid down by the
Department of Budget and Management for the continued receipt of
allowances and benefits enjoyed as of July 1, 1989 embodied in two (2)
separate letters of the Secretary of Budget and Management addressed to
the General Manager, Davao City Water District and the President,
Philippine Association of Water Districts (PAWD) dated November 9,
2002 and April 27, 2001, respectively, which letters shall be denominated
as Annexes A and B and form integral part of this Resolution.
Furthermore, the General Appropriations Act provides among others:
Section 15 Restrictions on the Use of Government Funds No
government funds shall be utilized for the following purposes:
(e) Pay honoraria, allowances or other forms of compensation to any
government official or employee, except those specifically authorized by law.
The provisions of this section shall also apply to GOCCs.
Implementation shall be in accordance with the rules and regulations issued
by the DBM, in coordination with the COA.
Executive Order No. 518 also provides that:
Section 2 - Declaration of Policy xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
The budgets of government-owned or controlled corporations shall
observe the budget, organization and compensation policies and guidelines
which govern agencies of the national government and which are contained in
pertinent budget and compensation laws, rules and regulations.
Notices of Disallowances were already issued for the years 2008, 2009, 2010
and 2011 which were appealed by the Management of Butuan City Water District but
denied by COA-CARAGA Regional Director. These were further appealed to the
COA Commission Proper. Notices of Disallowances for the same allowances for
CY2012 were also issued and were currently on appeal at the Regional level. For
CY2013 allowances, Notices of Disallowance will be issued accordingly.
Recommendation:
Stop the granting of allowances and benefits without legal or valid basis and
require immediate refund by the concerned officials and employees of the
amount received.
During the exit conference, Management commented that what they are
granting to their officials and employees were only those allowances that the LWUA
and DBM approved.
We stressed to the Management that although the LWUA is an authority in
their operations, the granting of said allowances is not allowed by the above-cited
laws and regulations. In fact, there is already a Supreme Court decision sustaining the
29
disallowance issued for the same allowances that BCWD granted. We, however
advised Management that they may continue their appeal on their disallowed
allowances, as it is their right to do so.
4.
The District still hired a Technical Services Consultant for the Office of
the Board of Directors on January to April 2013 who was paid the total
amount of P 60,000.00 which was considered unnecessary expenditures
per COA Circular No. 85-55A because her tasks can be handled by the
existing personnel of the District.
Under Section 2(2), Article IV-D of the 1987 Constitution, the Commission on
Audit (COA) shall have exclusive authority, subject to the limitation in this Article, to
xxxx promulgate accounting and auditing rules and regulations, including those for
the prevention of irregular, unnecessary, excessive, extravagant, or unconscionable
(IUEEU) expenditures or uses of government funds and properties.
Section 4.0 of COA Circular No. 2012-003 defines Unnecessary
expenditures as:
The term pertains to expenditures which could not pass the test of prudence
or the diligence of a good father of a family, thereby denoting nonresponsiveness to the exigencies of the service. Unnecessary expenditures are
those not supportive of the implementation of the objectives and mission of the
agency relative to the nature of its operation xxx. An expenditure that is
not essential or that which can be dispensed with without loss or damage to
property is considered unnecessary.
The consultancy contract was awarded through negotiated procurement which
was approved per Board Resolution No. 118-2011 dated October 25, 2011. The
contract was renewed in March 2012, still awarded through negotiated procurement
which stipulated payment of P30,000.00 per month, thus, Notices of Disallowance
were issued, for it was considered unnecessary expenditures.
Review of the transactions of the District for CY 2013 revealed that
Management still hired the services of a Technical Services Consultant for the Office
of the Board of Directors for the period January to April 2013 despite the audit
finding and recommendation contained in the CY 2012 Annual Audit Report.
Further verification revealed that the consultant was still paid even if she was
out of the country, receiving half of the amount of her monthly professional fee
(Annex 4) because Management claimed she was still able to serve her duties as
consultant, just like other consultants of big corporations who are communicating
with their clients thru cellphones, teleconferencing and other modern means of
communications. For CY 2012, the Consultant was in the country only from January
to March, and was already out of the country since April 2012.
It was noted that the main accomplishment of the consultant was the
preparation of board resolutions, a task that can be done/handled by existing
personnel of the District. There was also no evidence that showed her
accomplishment of research and review of documents. From the summary of
accomplishment submitted to support her consultancy/professional fee, there was no
30
direct proof that she was performing tasks as a consultant. Even the tasks in her
consultancy contract as enumerated below can be handled by existing personnel of the
District.
The following duties and responsibilities might be handled by the
secretary/clerk of the Board:
a. Review minutes of board meetings as prepared by the Minutes and Agenda
Officer and institute revisions and/or amendments;
b. Review the existing policies and recommend revisions and/or amendments
as necessary to be constructed in coordination with the Interim General
Manager or the General Manager;
c. Oversee records keeping and filing of important documents;
d. Prepare board resolutions and communications for the Office of the Board
of Directors;
e. Consult the Interim General Manager/General Manager in the
preparation of agenda of board meetings;
f. Attend board meetings.
The succeeding duties and responsibilities might be handled by the Board of
Directors and/or other Officials of the BCWD:
g. Review the implementation of policies and/or policy setting actions;
h. Review the preparation of Annual Budget specifically for the Office of the
Board of Directors;
i. Act as a liaison with other water district organizations where the
membership of the Board is associated such as the Philippine Association
of Water Districts (PAWD) and other WD associations;
j. Attend out-of-town conventions, conferences, seminar/workshops,
meetings, etc. where the presence of the Consultant is required by
Management; the former shall be entitled to traveling and other valid
expenses/allowances incidental thereto in accordance with the legal
provisions of the law.
These duties might be performed by the Legal Retainer of BCWD:
k. Review legal cases of BCWD and track the development and/or status of
each case, which files are being kept and maintained in the Office of the
Board;
l. Ensure confidentiality and safekeeping of important records and
documents in the Office of the Board.
Management commented that they hired the services of a Technical Services
Consultant because they do not have a full time Board Secretary and that they have
full trust and confidence in their technical consultant whom they hired due to her
expertise in board related matters.
We respect the trust and confidence the Board of Directors have on the
consultant as well as the expertise she is known of but it is our opinion that the
District needs someone who is present during board meetings and on full time regular
duty to help them assess the operation of the District. For the meantime that the
31
District do not have a full time Board Secretary, the Minutes and Agenda Officer and
a clerk/secretary are very much capable of doing clerical works enumerated in items
(a-e) above.
Thus, the hiring of a Technical Services Consultant for the Office of the Board
of Directors is considered unnecessary expenditures under COA Circular No. 85-55A.
Notice of Disallowance will be issued later for this transaction.
Recommendation:
Discontinue the engagement of a Technical Services Consultant specially that
she is out of the country. Fill up the position of Board Secretary if it is
necessary.
During the exit conference, Management commented that they already
discontinued the services of their consultant in CY 2014. They are also planning to
open the position of a technical specialist and hire someone who will be an expert on
the operation of the District.
5.
COA Circular Letter No. 2004-01 dated May 7, 2004 provides that the account
balance in the General Ledger should always reconcile with the subsidiary ledger.
In addition, the New Government Accounting System requires that controlling
accounts shall be supported with subsidiary ledgers whose total shall equal the
balance of the controlling account.
Examination of records disclosed that the book balances of Accounts
ReceivablesCustomers (water sales) and Installment Sale Receivables (Service
Connection and Materials) amounting to P34,401,765.09 and P1,338,988.03,
respectively, or a total of P35,740,753.12 reflected in the general ledger maintained
by the Accounting Division as of December 31, 2013 did not reconcile with the
Aging of Accounts Receivable maintained by the Billing Division of the Commercial
Department amounting to P33,841,222.52 (Annex 5), showing a difference of
P1,899,529.60.
Analysis of the entries in the general ledger showed that there were
adjustments made reducing the amount of accounts receivables for water bills due to
adjustments on penalties, discounts for senior citizens, tax withheld imposed by
government agencies and other adjustments which have long been automatically
32
deducted from the aging schedule but were deducted in the books of accounts much
later. This is one of the reasons for the unreconciled balance of P1,899,530.60,
thereby casting doubt on the fairness of the presentation of the receivable account in
the financial statements.
We have been communicating with the Commercial Department on the
possible reconciliation of the Accounts Receivable and Installment Sales Receivable
but they reasoned out that they only received their data from the Electronic Data
Processing (EDP) Department which maintains the Billing and Collection System of
the District, where the Accounts Receivable originated. The EDP on the other hand
claims that they also want to come up with a reconciled balance and was in fact
working on it but it was not made a priority because they were busy with other tasks.
Recommendation:
a. Require the Accounting Department to coordinate with the programmer of
the Billing and Collection System and look for the cause of the
discrepancy to arrive at the reconciled balance.
b. Assign a permanent personnel in the accounting and the billing section of
the Finance and Commercial Department respectively, whose main duties
and responsibilities include among others to review, analyze and trace all
adjustments reflected in the Commercial Department so that the accounting
and the commercial department records will be consistently reconciled at
any period in time.
During the exit conference, the Accounting Department commented that a
reconciliation will be possible if the EDP Department where the aging of accounts
receivable is generated, will furnish them the monthly aging for them to reconcile the
discrepancy. Management also assigned a personnel from the Commercial
Department that handles the receivables after it is generated by the EDP to help in
the reconciliation.
6.
Year
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Total A/R considered as Non-Current
CY 2013 Disconnections
No. of Concessionaire
1
2
2
2
6
11
5
9
26
66
48
67
55
61
75
103
110
147
110
98
119
113
111
178
198
274
230
268
429
430
413
472
4,175
1,377
Amount
P
12.00
1,344.80
299.20
101.20
1,864.90
1,475.00
1,396.51
5,137.31
13,688.71
48,371.36
35,494.33
78,341.78
54,757.36
37,111.68
73,876.33
168,715.92
181,901.93
301,787.26
230,267.19
343,268.21
371,737.79
320,658.39
211,916.23
280,007.14
292,131.70
466,047.22
312,524.39
438,670.33
947,623.04
1,100,426.43
1,053,412.29
1,102,525.44
8,451,573.74
3,074,722.83
35
As a result, the Receivables and Other Asset accounts of the District were not
fairly presented in the financial statements.
Recommendations:
1. Require the Bookkeeper to make necessary adjustment to reclassify the
inactive accounts to Other Assets-Non Current Receivables account.
2. Exhaust all means to collect the amounts by sending out bills, statements
of accounts or demand letters to verify the existence of the concessionaires
in their indicated address. Otherwise, agency officials may request
authority to write-off uncollectible/dormant accounts from the
Commission on Audit following the guidelines under COA Circular No.
97-001 dated February 5, 1997.
3. Review or analyze the dormant accounts in accordance with the guidelines
and procedures mentioned in E.O. 431. If the analysis or review is not
possible due to the absence of records and documents, the District should
seek for the civil remedies or request for the write-off and/or adjustments
of the account balances from the Commission on Audit. The request
should be duly supported with the list of available records and extent of
confirmation made as to its collectability and the reasons for the
adjustments thereof, subject to certain conditions:
a. Death of the respondent official/ employees; or
b. Unknown whereabouts of the official/employees, and that he could
not be located despite extra-diligent effort to find him; or
c. Incapacity to pay or insolvency of the respondent employee;
d. The account remained unpaid and outstanding for more than
5 years despite diligent efforts to collect exerted by the accountable
officer; and
That all conditions aforementioned shall exist and be certified to by
the respective accountable officer.
During the exit conference, Management commented that they have started
sorting these inactive accounts to verify its status, whether collection is still possible
or not anymore. They have started the procedures for write-off but they find the
requirements very tedious to produce. However, they promised to prioritize
addressing this long in-active accounts by following the recommendation and identify
and prepare necessary documentation for accounts that will be recommended for
write-off.
They also promised to re-classify the accounts as recommended and come up
with a fairly presented accounts in their financial statements.
7.
Government
Comml./Industrial
Residential
TOTAL
Active Connection
565
2,756
46,201
49,522
Inactive Connection
47
548
5,021
5,616
612
3,304
51,222
55,138
Total
Active
9,407,241.34
9,407,241.34
6,242,143.11
2,845,155.96
776,000.68
2,192,412.87
12,055,712.62
Inactive
29,073.25
29,073.25
196,814.93
375,105.62
284,728.98
10,211,049.94
11,067,699.47
Totals
9,436,314.59
9,436,314.59
6,438,958.04
3,220,261.58
1,060,729.66
12,403,462.81
23,123,412.09
826,652.36
454,843.48
1,281,495.84
4%
22,289,606.32
11,551,616.20
33,841,222.52
100%
28%
68%
Both for active and inactive accounts receivable aged thirty days and below
amounted only to P9,436,314.59, or 28% of the total Accounts Receivable, while
those aged 31 days or over are already considered past due per Collection Policy of
the District which amounted to P23,123,412.09 or 68% of the total receivables of
P33,841,222.52, and the remaining 4% or P1,281,495.84 was charged as penalty.
37
Account No.
125-1
125-2
125-3
125-4
Amount
416,799.19
192,635.79
297,370.31
566,952.23
1,473,757.52
ANNEX 7
ANNEX 7.1
ANNEX 7.2
ANNEX 7.3
Review of Accounts Receivable for the years 2011, 2012 and 2013, showed
increased uncollected accounts on trade receivables as shown in the graph below:
Year
35,740,753.12
Trade A/R
30,603,995.21
28,350,662.14
Other
Receivables
2013
4,167,717.11
2012
4,182,873.00
2011
2013
2012
4,324,316.63
2011
0.00
10,000,000.00
20,000,000.00
30,000,000.00
40,000,000.00
2013
38
8.
The Districts four units of vehicles were not registered in the name of the
District and were still not marked with For Official Use Only and the
agency name, contrary to Section 58 of P.D. 1445 and COA Circular No.
75-6, thus ownership could not be ascertained and control over the assets
is inadequate.
39
Description of Vehicle
Year Acquired
Value
2008
1,693,030.00
2008
1,308,614.00
2011
634,000.00
2011
634,000.00
Interview with the Property Officer revealed that the two (2) Toyota Hilux
(Blue and Red) were purchased way back in January, 1999. However, these were
entered only in the inventory records in CY 2011 because these two vehicles were
part of the loan granted by the LWUA and to date, it remained as a private vehicle
registered under the name of the contractor, R.D. Policarpio and Co. Efforts were
made to transfer the registration from private to government, however, the documents
required by the Land Transportation Office were not available from the LWUA Office
or from R.D. Policarpio Co., hence, transfer of ownership failed.
While, the two vehicles first mentioned above, the Toyota Hilux (dark blue)
and Toyota Hi-Ace Van (white) were not given due course by Management in
transferring the ownership from R.D. Policarpio Co. to the District because of
security reason.
In effect, ownership of subject vehicles is not fully ascertained and controls
over the property are not adequate. Further, if the said deficiency were not given due
course, chances are that all expenses in connection with the use of the same vehicles
will be disallowed in audit as these are not government property.
Recommendation:
Exert effort in facilitating the immediate transfer of the ownership of the
subject vehicles to the Butuan City Water District as the registered owner. In
the meantime, pending the transfer of ownership and the change to
government plate, implement the marking of the vehicles with the prescribed
three (3) inches For Official Use Only together with the name and logo of
the District.
During the exit conference, Management commented that the two (2) vehicles
were acquired through Phase II Projects, part of the package in the form of loan with
the LWUA. Accordingly, they will secure pertinent documents for the transfer of
ownership to BCWD after the case in Arbitration Tribunal filed by the Contractor
against LWUA and BCWD is finally disposed off.
The other two (2) vehicles, Toyota Vigo-pick-up and Toyota Hi-Ace Van which
are assigned to GM Sang Tian and the BOD are used with green plates for overriding
security reasons. However, the LTO allowed the BCWD to use the green plates for
such reason and continued the registration of said vehicles but with government
stickers pasted on the windshields.
40
9.
The District have a computerized Billing and Collection System that captures
the collection data of all Accountable Officers of the District. This system was
developed by the Electronic Data Processing (EDP) Department of the District.
During the course of our audit, we were provided with the collection data from
the data base of the system. We noted that there were gaps in the numerical sequence
of the ORs issued by each Accountable Officer. It was later learned that the data
includes only the collections from water bills. The gaps were either ORs that were
cancelled or issued for the other collections ( sale of PE tubes, installation, other
collections). We inquired whether it was possible to incorporate the other
collections into the water sales collection but we were told that it would take another
program to add that feature. Since we are after the completeness of the collection
report, we were forced to manually trace the other collections and incorporate the
same in the collection data taken from the system.
The design of the system is susceptible to misuse of the ORs since these are
not issued numerically and makes verification of collection accounts tedious and time
consuming considering the voluminous ORs that were issued daily by each collector.
Recommendation:
41
already used. The design of the system is not capable of readily identifying if an OR is
used twice.
It is important that testing should be done first to see how much time will it
take for the system to identify if an OR is already used, if it will really lagged the
collection of accounts. This feature should be incorporated because its a high risk if a
system allows the issuance of an OR twice or more.
d. There were instances that the ORs were not issued in numerical
sequence. Also, duplicate ORs were not properly filed intact for easy
verification. Further, original copies of cancelled ORs were not filed
with the duplicate copies.
Further verification of the cash accounts of the AOs revealed that there were
times when ORs issued per systems data were not issued in numerical sequence
(Annex 10). Interview with the AO revealed that the actual ORs were really issued in
numerical sequence. The gaps in the system was due to system downtime and system
errors.
It was also found out that the duplicate copies of the ORs were not properly
filed by each AO making it very difficult during verification. The ORs were
supposedly bundled per AO per day but because of voluminous OR and the AOs were
not aware that these ORs were still to be audited, they just left them without proper
filing.
There were also cancelled ORs that the original copies were not filed with the
duplicates and marked Cancelled. Only the duplicate copies were marked
cancelled (Annex 11). The original copies were only found after digging into all the
ORs in the cash division bodega.
Recommendation:
a. Management review the Collection System and incorporate controls to
include complete series of ORs issued for collections made to ensure
completeness of collection report.
b. Management require the AOs to file ORs properly on a daily basis, properly
labeled by date and by AO. Original copy of cancelled ORs should be filed
together with its duplicate copies and properly marked on its face with the
word Cancelled.
Management promised to follow the recommendation and require its
Accountable Officers to file intact its accountable forms and reports to facilitate
audit.
e.
43
This Period
NS/ND/NC
Settlement
Ending Bal.
12/31/2013
Notice of Suspension
Notice of Disallowance
Notice of Charge
153,400.00
15,236,213.63
-
600,000.00
10,258,072.51
-
600,000.00
25,494,286.14
-
Total
15,389,613.63
10,858,072.51
26,094,286.14
153,400.00
Details
ND#2013-001 to 012-101(2011)
ND#2013-013 to 023-101(2011)
ND#2013-026 to 036-101(2011)
ND#2013-037-101(2011)
ND#2013-038 to 127-101(2011)
ND#2013-128 to 132-101(2011)
ND#2013-133-101(2011)
ND#2013-134 to 193-101(2011)
ND#2013-194 to 198-101(2011)
Rice Subsidy
Meal Subsidy
Subsistence Allowance
Gift Certificates
Excessive RATA
BOD-Financial Assistance
Year-end Incentives
BOD-Honorarium
Excessive Travelling Allowance
TOTAL
Amount
P
4,759,630.00
2,194,500.00
593,253.60
396,121.00
2,082,330.00
98,000.00
P
10,123,834.60
Amount
CGS-ND-2013-001
CGS-ND-2013-002
CGS-ND-2013-003
CGS-ND-2013-001
92,492.20
2,183,370.00
865,400.00
12,023,931.43
Total
15,165,193.63
45
Recommendation
Ref.
Management
Action
Status of
Implementation
CY 2011 AAR
1.
Require
the
Accountant and the
Members
of
the
Inventory Committee
to
reconcile
the
balances
in
the
Inventory
Report
against the balance per
Balance Sheet PPE
accounts and Property
Cards records.
AAR
2011
Implemented
2.
Require
the
Accountant to prepare
the
prescribed
subsidiary ledgers in
accordance
with
Sections 11 and 12 of
the NGAS Manual,
Volume II.
AAR
2011
Implemented
3.
AAR
2011
46
Implemented
Reason for
Partial/NonImplementation
Audit Observation
Recommendation
Ref.
Management
Action
Status of
Implementation
Reason for
Partial/NonImplementation
made.
4.
AAR
2011
Manageme
nt
still
grants
allowances
for
CY
2013.
Not
Implemented
Management
believed they
are entitled to
such
allowances
5.
Stop
the
granting/payment of
Confidential
and
Intelligence
Funds
unless there is an
approval
by
the
President
of
the
Philippines. Submit to
the COA Chairman
accomplishment
reports
and/or
liquidation reports on
the Confidential and
Intelligence
Funds
disbursed.
AAR
2011
Manageme
nt already
secured the
necessary
authorizati
on
but
liquidation
was
not
done
properly.
Partially
Implemented
They
liquidated the
CA
without
the
credit
notice
from
COA because
they
have
submitted their
liquidation but
its been two
(2) years, yet
COA have not
issued
any
credit notice.
6.
Representation Allowance
and
Transportation
Allowance (RATA) paid
to the Officials of the
Water District for CY
2011 were in excess of the
authorized
rate
by
P593,257.60 as provided
under Corporate Budget
Circular No. 18 dated
November 18, 2000 and
the equivalent positions in
the
General
Appropriations Act.
AAR
2011
Some
officials
already
corrected
their claim
for RATA
but others
still
continue to
claim
excess
amounts.
Implemented
Management
still continue
to
grant
excessive
RATA
to
some officials.
7.
AAR
2011
47
Implemented
Audit Observation
Recommendation
Ref.
Management
Action
Status of
Implementation
addition of a Year-End
Supplemental Incentive of
P479,121.52 or a total of
P2,491,444.64 for CY
2011 in violation of
Executive Order No. 7,
Memorandum
Circular
No.
015-10
and
Administrative Order No.
103 and COA Resolution
No. 2004-006.
immediate refund of
the excess payment of
honoraria,
year-end
financial
assistance
and
year-end
supplemental incentive
and all other benefits
received without legal
basis.
AAR
2011
Implemented
9. Shopping or as the
need arises method
of procurement was
resorted to on the
purchases of supplies,
materials
and
equipment
totaling
P4,391,219.48 instead
of public bidding,
contrary to Section 10
of the Implementing
Rules and Regulations
of R.A. No. 9184.
AAR
2011
Implemented
Consider
procuring
units of Multi-Cabs for
official service use
instead of entering into
rental contract.
AAR
2011
8.
48
Multicab
Service
Vehicles
were still
rented but
Not
Implemented
Reason for
Partial/NonImplementation
Management
claimed it is
more
advantageous
to the District
to rent than to
Audit Observation
rental basis.
Recommendation
Ref.
Management
Action
with
lower
price.
Status of
Implementation
Reason for
Partial/NonImplementation
CY 2012 AAR
1. Allowances and fringe
benefits amounting to
P6,253,260.74
were
granted to its Board of
Directors, officials and
employees without legal
basis.
Cash
Advances
for Submit to the Office of
Intelligence
Fund the COA Chairman all
amounting to P600,000.00 liquidation vouchers
for CY 2012 was liquidated and supporting papers
by
issuing
only
a for disbursements out
certification signed by the of the Intelligence
General
Manager
and Fund for proper audit.
Program Administrator that
funds were used in
connection
with
Cash advances for
Project/Program
Intelligence
Fund
Confidential/Intelligence
only
be
Data Gathering, and not should
considered
fully
by the Credit Advice from
the COA Chairman or liquidated upon receipt
his/her representative in of the credit advice
the
COA
accordance with COA from
Chairman
or
his/her
Circular 2003-003 dated
49
AAR
2012
Manageme
nt continue
to appeal
the
disallowan
ces issued.
AAR
2012
AAR
2012
Not
Implemented
Management
believed they
are entitled to
such
allowances
Implemented
Manageme
nt submits
the
liquidation
to the COA
Chairman
and drops
the
advances
from
the
books.
Partially
Implemented
They
liquidated the
CA
without
the
credit
notice
from
COA because
they
have
submitted their
liquidation but
its been two
(2) years, yet
COA have not
issued
any
credit notice
Audit Observation
Recommendation
Ref.
Management
Action
Status of
Implementation
Reason for
Partial/NonImplementation
representative.
Bank
Reconciliation
Statements
were
not
submitted on time and
supporting documents were
not attached to the BRS in
accordance
with
the
provision of COA Circular
96-011.
AAR
2012
Implemented
AAR
2012
Partially
Implemented
Management
did
not
prioritize the
marking of the
vehicles
because they
believe their
internal
control on the
use of these
vehicles
is
more
than
enough
to
prevent
unnecessary
use or abuse.
6.
Discontinue
the
engagement
of
a
Technical
Services
Consultant and adhere
to the provision of RA
9184 in awarding
contracts
thru
negotiated
procurement.
AAR
2012
Partially
implemented
The
recommendati
on
was
implemented
in the late part
of CY 2014.
AAR
2012
4.
50
Manageme
nt promised
to
implement
the
recommend
ation.
Manageme
nt already
opened a
plantilla
position
that whose
job
description
includes
the work of
the
consultant.
Implemented
Audit Observation
8.
Recommendation
Ref.
Unserviceable property
which were no longer
being used by the District
as reported in the Inventory
and Inspection Report of
Unserviceable
Property
amounting
to
P
3,720,251.42 were not
reclassified to the Other
Assets Account. Likewise,
these property were not
disposed of to generate
additional income.
Conduct
physical
inventory
of
all
unserviceable property
and accomplish the
Inventory
and
Inspection
Report.
Submit this report to
COA for inspection
and appraisal, after
which conduct public
auction of those which
still have salvage
value and destroy
those which have no
economic value.
Management
Action
Status of
Implementation
AAR
2012
Implemented
AAR
2012
Implemented
Instruct
the
Accounting Section to
prepare the necessary
adjusting entry to
reclassify
the
unserviceable
fixed
assets
to
Other
Assets. Subsequently,
the assets shall be
dropped from the
books after these are
sold or disposed of.
Observe
periodic
reconciliation of loan
accounts with LWUA,
DBP
and
other
creditors to establish
correct
balances.
Strictly
observe
promptness in the
payment of loans to
avoid
penalties/surcharges
and
also
make
representations with
LWUA to condone
penalties/surcharges
that might be incurred
in the future.
Hold the
responsible
officials
for the
51
Reason for
Partial/NonImplementation
Audit Observation
Recommendation
Ref.
Management
Action
Status of
Implementation
Reason for
Partial/NonImplementation
Manageme
nt
personnel
identified
to facilitate
GAD
activities
were sent
to
attend
seminars
on GAD.
Partially
Implemented
Management
is still learning
on the basics
of
GAD
implementatio
n.
52
AAR
2012
PART V - ANNEXES
Annex
1. LWUA Memo Circular No. 004-10
2. Intelligence Fund Liquidation Certificate
3. Summary of Allowances for CY 2013
3.
- Rice Allowance
3.1
- Meal Subsidy
3.2
- Subsistence Allowance
3.3
- Medical/Dental/Optical Allowance
4. Summary of Consultancy Payment CY 2013
5. Aging of Accounts Receivable CY2013
(Active and Inactive Accounts)
6. Schedule of Percentage of Past Due Accounts
Aged Less Than 30 days and Over 30 Days
7. Unpaid Accounts Zone 125-1
7.1 Unpaid Accounts Zone 125-2
7.2 Unpaid Accounts Zone 125-3
7.3 Unpaid Accounts Zone 125-4
8. OR Numbers in the Collection System that have different pre-printed
OR numbers
9. OR Numbers used twice in the Collection System
10. ORs not issued in numerical sequence
11. Cancelled ORs original not filed and stamped cancelled