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Executive Summary

Introduction

Agency Profile

The LGU of San Fabian, Pangasinan was created by the Spanish Supreme Court, Royal Audiencia on
March 21, 1717. The town seat of government was founded in (Barrio Arceo) now Barangay Angio and
was named after the saint and martyr, Saint Fabian, the twentieth Pope of the Roman Catholic Church.
Pope Saint Fabian died as martyr under the oppressive reign of Emperor Decius on January 20, 250,
hence on this date the town honors him in its annual town fiesta.

And the Municipality’s vision is “By year 2020 San Fabian shall emerge as an agro- industrial and tourism
oriented city of self-reliant and good centered people, with equal social, economic and political
opportunities, led by pro- active, pro- people development oriented leaders, in an atmosphere of peace,
justice and progress”.

Organizational Set-Up

San Fabian is a 1st class municipality with thirty-four (34) barangays. It is under the stewardship of Hon.
Constante B. Agbayani, Municipal Mayor who won in the May 2016 Local Elections. The total work force
as of year-end was three hundred forty-seven (347) personnel.

Methodology And Scope Of Audit

A financial and compliance audit was conducted on the accounts and operations of the municipality. The
audit consisted of review of operating procedures, interview of Municipal Officials and employees,
verification of accounts and such other procedures, considered necessary under the circumstances. A
Value for Money (VFM) Audit was also conducted to determine whether resources has been managed
and utilized in an economical, efficient and effective manner on selective basis.

Auditor’s Opinion On The Financial Statements

A qualified opinion was rendered on the fairness of the presentation of the financial statements
because the existence, completeness and accuracy of balances of Property, Plant and Equipment
accounts with a net booked value of ₱92, 926, 265. 14 as of December 31, 2016, could not be
ascertained due to unbooked real properties amounting to ₱22, 536, 026.04; absence of Transfer
Certificate of Title in the name of Municipality to support land ownership amounting to ₱10, 861,
431.96; unsubmitted Report on Physical Count of the Property, Plant and Equipment (RPCPPE) on or
before January 31, 2017 and non-filing of Property Acknowledgement Receipt and non-maintenance of
property control cards by the Property Custodian. Also, paid disbursement vouchers were not submitted
to COA amounting to ₱20,629,285.67, thus casting doubts on the monthly balances of cash and expense
accounts.

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Significant Findings And Recommendations

Summarized below are some of the significant observations and recommendations contained in the
report which were discussed with management during the exit conference. Management comments
were incorporated in the report, where appropriate.

Favorable Observations

Seal of Child-Friendly Local Governance

The Municipality of San Fabian was conferred on November 13, 2015 in Quezon City, Philippines with
2015 Seal of Child-Friendly Local governance by the Council for the Welfare of Children for its
commitment in promoting child rights to survival, development, protection and participation, towards a
Child-Friendly Philippines; A Caring and Protective Society For, By and With the Children.

Statement of Audit Suspensions, Disallowances and Charges (SASDC)

There were no audit suspensions and disallowances issued to the Municipality of San Fabian as of
December 31, 2016.

Status of Implementation of Prior Year’s Audit Recommendation

Of the thirty-nine (39) prior year’s audit recommendations embodied in the 2015 Annual Audit Report,
only five (5) were fully implemented, twenty-seven (27) were partially implemented and seven (7) were
not implemented.

Re: UPDATE OF KEY INITIALS (2018)

Pls. accomplish the attached file to secure specimen signatures, initials and contact nos. of signatories in
the Disbursement Vouchers and other related documents for reference, records and better means of
communication. Kindly submit it in two copies on or before February 10, together with your monthly
reports. Thank you.