Pantar2012 Audit Report 2

Republic of the Philippines
COMMISSION ON AUDIT
OFFICE OF THE SUPERVISING AUDITOR
Audit Group G - Iligan City & Lanao del Norte Province
QPGC, Pigcarangan, Tubod, Lanao del Norte
TeleFax No. (063) 341-5660
March 25, 2013
HON. MOHAMMAD EXCHAN G. LIMBONA

The Municipal Mayor
Pantar, Lanao del Norte
SUBJECT: CY 2012 Annual Audit Report
Sir:
We are pleased to transmit the Annual Audit Report (AAR) on the audit of the accounts
of the Municipality of Pantar, Lanao del Norte for the period December 31, 2012, in compliance
with Article IX-D of the Philippine Constitution and Section 43 of Presidential Decree No. 1445.
The AAR contains results of the audit, which was primarily conducted to ascertain the
propriety of financial transactions, and agency compliance with prescribed rules and regulations.
The financial and compliance audit, which was conducted on a test basis, was primarily focused
on the validity and propriety of transactions as well as the fairness of the presentation of the
financial statements. The details of these results, which include positive and negative audit
observations as well as the corresponding recommendations, are discussed in the report.
We request that the recommendations be implemented and will appreciate being

informed of the positive actions taken hereon within one month from receipt hereof.
We acknowledge the cooperation extended to our team of Auditors by the officials and
employees of the Municipality of Pantar, Lanao del Norte.
Very truly yours,
By authority of the Chairman:

Copy Furnished :
1. The Regional Director

Department of Interior and Local Government
Regional Office No. X
Cagayan de Oro City

Bureau of Local Government Finance
Cagayan de Oro City

Department of Budget and Management
Cagayan de Oro City

Commission On Audit
Regional Office No. X
Cagayan de Oro City
5. The Assistant Commissioner

Local Government Sector
Commission on Audit
Quezon City
6. The Honorable Members of Sangguniang Bayan

Thru: The Secretary, Sangguniang Bayan
7. File – Supervising Auditor

COA-PAO, Pigcarangan
Tubod, Lanao del Norte
8. File – Audit Team Leader

COMMISSION ON AUDIT
OFFICE OF THE AUDIT TEAM LEADER
Audit Group G, Team 6, Lanao del Norte Province
TeleFax No. (063) 223-3465
February 26, 2013
The Supervising Auditor

Commission on Audit
Audit Group G
Iligan City & Lanao del Norte Province
Sir:
In compliance with Section 2, Article IX-D of the Philippine Constitution and Section 43
of the Presidential Decree No. 1445, we conducted a financial and compliance audit on the
accounts and operations of the Municipality of Pantar, Lanao del Norte for the period ended
December 31, 2012.
The audit was conducted to ascertain the propriety of financial transactions and
compliance of the agency with rules and regulations. It was also made to ascertain the accuracy
of financial records and reports, as well as the fairness of the presentation of financial statements.
The attached report consists of four parts: Part I –Financial Statements, Part II –
Comments and Observations, which were discussed with concerned management officials and
staff last February 13, 2013, Part III – Status of Implementation of Prior Years’ Audit
Recommendations and Part IV - Annexes.
There is reason to believe that the financial statements are not free of material
misstatement/s and were not prepared in accordance with applicable laws, rules and regulations
and not in conformity with generally accepted state accounting principles because the agency
failed to conduct physical inventory of government properties, and deficiencies noted in the
procurement of goods and services.
Our audit was conducted in accordance with generally accepted state auditing standards
and we believe that it provides reasonable basis for the results of audit.
Very truly yours,
ATTY. T’HASMIN M. ABDUL, CPA

State Auditor III
Audit Team Leader
COMMISSION ON AUDIT
Commonwealth Avenue
Quezon City
ANNUAL AUDIT REPORT
ON THE
MUNICIPALITY OF PANTAR
Province of Lanao del Norte
For the Period Ended December 31, 2012

EXECUTIVE SUMMARY
A. INTRODUCTION
The Municipality of Pantar came into existence by virtue of Presidential Decree No. 1521
dated March 15, 1971 and classified as 5th class municipality with twenty – one (21) barangays.
The Total land area of the municipality is approximately 9,010 hectares lot accommodate
18,440 population per 2012 census of National Statistic Office.
VISION
As a community that is morally, politically mature and economically progressive, where

Islam is a way of life that regulates all aspects of human existence, where every individual is
assured of equal protection of the law with a kind of government that is soundly established
whose priority concern is institutionalizing a just, equitable, peaceful, environment-friendly and
lasting Islamic social order.
MISSION
To strengthen capability of local leaders in the fields of excellence in good governance

and sustainable development towards a better quality of life of its citizenry who will be partners
in alleviating poverty, attainment of greater economic productivity, equitable distribution of
social amnesties and opportunities, protection of the environment and a society of law abiding
and God loving citizens living in an atmosphere of peace and harmony.
ORGANIZATIONAL SET-UP
The mayors who had served the municipality were:
Mayors Period
1. Hon. Cosain D. Campong 1979 - 1987
2. Hon. Osop P. Abbas 1987 - 1988
3. Hon. Baguio P. Limbona 1988 - 1989
4. Hon. Malik T. Alingan 1989 – 1998
2004 - 2007
5. Babai M. Daluma 1998 - 2004
6. Norlainie M. Gabriel Limbona 2007 - 2010
The elected officials for CY 2010-2013 were:
Mayor Hon. Mohammad Exchan Gabriel Limbona

Vice-Mayor Hon. Farouk Bashier Gubaten
SB Members Hon. Amrosin Macaraya Daluma
Hon. Cadar Macawaris Daluma
Hon. Gamal Alingan Onos
Hon. Faisal Dalan Gabriel
Hon. Ibrahim Ali Campong
Hon. Matalicop Batara Ali
Hon. Pacalaan Randao Macabantog
Hon. H. Jamal Asum Abdulcarim
ABC President Hon. Salima Ali Palao
FSK President Hon. Farnisa H. Wahab Said
The appointed department heads/ key official of the municipality were:
Municipal Treasurer Paganaebai Macaumbos

Municipal General Service Officer - Designate
Municipal Planning & Development Coordinator H. Esmaiel Cota Umpa
Municipal Accountant Saima Bonsalagan
Municipal Engineer Azis Macaraya
Municipal Assessor Amina Disomimba
Municipal Civil Registrar Minda M. Racmat
Municipal Administrator Panorama P. Daluma
Municipal Budget Officer Suharto M. Gubaten
Municipal Social Work Officer Gemma J. Bongaros - Asum
SB Secretary Mohd. Omar D. Gabriel
Municipal Agriculture Mauyag P. Mama
Municipal Health Officer Dr. Nasheba Asuncion Arumpac
B. FINANCIAL AND OPERATIONAL HIGHLIGHTS
The municipality’s assets, liabilities and equity as of December 31, 2012 were
P19,399,519.95, P13,156,090.12 and P6,243,429.83 respectively. These correspondingly
increased by 15.13%, 14.06%, and 17.43% respectively, over that of last year.
The Auditee’s results of income and expenses amounted to P926,840.33, which increased
by P344,697.79 compared with last year’s P582,142.54.
Increase / % over
2012 2011 (decrease) last year
Assets 19,399,519.95 16,850,761.49 2,548,758.46 15.13%
Liabilities 13,156,090.12 11,534,171.99 1,621,918.13 14.06%
Government Equity 6,243,429.83 5,316,589.50 926,840.33 17.43%
Revenue 37,905,466.60 37,964,790.31 -59,323.71 -0.16%
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Expenses 36,978,626.27 37,382,647.76 -404,021.49 -1.08%
Income 926,840.33 582,142.54 344,697.79 59.21%
In CY 2012, the Municipality of Pantar generated total revenue of P37,905,466.60. These

were all used as intended for the operation of the LGU`s development and programs. In support
of development plans, programs, projects and activities of the municipality, the following
amount were set aside to wit:
PS 17,536,308.00
MOOE 9,043,770.00
Capital Outlay 200,000.00
20% Development Fund 7,036,022.00
5% Calamity Fund 1,720,256.00
5% Gender Issues 350,000.00
Aid to BDF 210,000.00
Council for the Protection of Children 150,000.00
C. SCOPE OF THE AUDIT
In compliance with Section 2, Article IX-D of the Philippine Constitution and Section 43
of Presidential Decree 1445, we conducted financial and compliance audit on the accounts and
operations of the Municipality of Pantar, Lanao del Norte for the year ended December 31, 2012,
with particular emphasis on the verification, on a test basis, of (a) the propriety and validity of
the agency’s expenditures and revenues, and (b) the level of assurance that may be placed on
management assertions on the financial statements.
We have performed a Value-for-Money Audit on the operations of the Municipality of

Pantar, Lanao del Norte more specific on the implementation on the 20% Development Fund.
The audit was aimed to ascertain whether or not the resources and funds of the Agency were
economically, efficiently and effectively utilized for CY 2012.
The audit was aimed to determine whether the auditee has complied with applicable laws
and auditing principles, standards and requirements and whether it has controlled and utilized its
resources in the pursuit of its programs, projects and activities.
The audit was focused on cash, receivables, properties, liabilities/loans equity and
revenues inclusive of real property tax as well as 20% development fund, programs and projects,
for the Value for Money audit.
Our audit was conducted in accordance with the generally accepted state auditing
standards, International Standards on Auditing, and accordingly included such tests of the
accounting records and other related documents and evaluation of the design and operating
effectiveness of the controls and such other procedures, as necessary, in the audit.
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D. STATE AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
The Audit Team rendered a qualified opinion on the fairness of the presentations of the
financial statements of the Auditee as of December 31, 2012.
There is reason to believe that the financial statements are not free of material
misstatement/s and were not prepared in accordance with applicable laws, rules and regulations
and not in conformity with generally accepted state accounting principles because the agency
failed to conduct physical inventory of government properties, and deficiencies noted in the
procurement of goods and services.
Our audit was conducted in accordance with generally accepted state auditing standards
and we believe that it provides reasonable basis for the results of audit.
E. COMMENTS AND OBSERVATIONS
The Municipality was a recipient of seal of good housekeeping for the Calendar Year
2011. It did not engage or enter into double your money schemes perpetrated by the Aman
Futures Group Philippines Inc. and Jachob “Koko” Rasuman group. Audit verification was made
on the report on check issued for the Calendar Year 2012 as well as the use on confidential /
intelligence fund revealed that no monies / check were given to the agents of these groups. No
cash in vault was maintained by the Agency as this is vulnerable to use in investing in the
mentioned groups and no unliquidated cash advances made by the Municipal Treasurer at the
end of the year.
Deficiencies observed in the course of the audit were earlier communicated through
Audit Observations Memoranda (AOMs) and discussed in an exit conference conducted on
February 13, 2013, with concerned officials and employees. Their comments were incorporated
in this letter, where appropriate. The significant audit observations and recommendations shall be
incorporated in the Annual Audit Report (AAR) of the Municipality of Pantar for CY 2012.
The following are the deficiencies noted, with the corresponding recommendations:
1. Municipality Expenditures were paid out of the cash advance of the Disbursing
Officer designate, in violation to provisions of COA Circular No. 97-002.
Direct the Accountable Officer concerned to stop the practice of using cash advance in
paying operating expenses or claims of municipal officials and employees. Limit cash advances
to salaries or wages and travel expenses.
2. Due from Officers and Employees account amounting to P738,056.76 remained

unliquidated at the end of the year; thus, misrepresenting the cash, receivable and
operating expense accounts.
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Make a letter request to the COA inviting the attention of the Regional Legal
Adjudication Office (RLAO) for write-off/dropping in the books of accounts with all the
supporting papers/documents for consolidation.
3. The Agency did not avail the services of the Procurement Service (PS) of the
Department of Budget and Management as required in AO No.17 and Section 53 of
RA No. 9184 thereby not helping the government owned institution.
Management to prepare the Annual Procurement Plan for the commonly used supplies
consolidating all cost centers and submit to the PS DBM at the start of the year. The PS-DBM
should provide PS-Depot in Iligan City for accessibility.
4. The Agency failed to register with the Government Electronic Procurement System
(G-EPS); thus, it failed to achieve the purpose of the law to promote transparency
and efficiency as well as to ensure widest dissemination of bid opportunities.
To be able to use the G-EPS, the agency to register and designate the officials or
personnel authorized to transact with and operate the G-EPS from their terminals pursuant to
Section 8.2.3 of IRR, RA 9184; and Seek the assistance of the PS-DBM to ensure their on-line
connectivity and for the training of their personnel responsible for the operation of G-EPS from
their terminal in accordance with Section 8.3.1 of IRR-RA 9184.
5. Correctness, reliability and existence of property, plant and equipment totaling

P9,566,857.55 were not ascertained due to the failure of the Auditee to conduct
periodic physical inventory taking, contrary to Section 124 of New Government
Accounting System, Volume I. This affected the fair presentation of the fixed asset
accounts in the financial statement.
Create an appraisal / inventory committee to conduct actual physical inventory taking of

all properties, plant and equipment. Also instruct the Municipal Accountant to make necessary
adjustments on the records deficiencies noted in the course of inventory taking and in the
reconciliation of the inventory report with the subsidiary ledgers. After physical count and report
of PPE’s are completed, prepare and maintain a subsidiary ledger card on each equipment and
should bear a Property Number. The municipal accountant to provide residual value in
computing the depreciation. Fully depreciated property account should be transferred to Other
Asset account.
6. Municipal properties in the amount P9,566,857.55 are exposed to risks due to non-
compliance with Republic Act No. 6556 dated September 1, 1951 as amended by PD
No. 245 dated July 13, 1973.
Management should require the Administrative Officer to update the list of properties
that needs to be insured and submit the same to GSIS. This will guarantee that all properties are
adequately covered by insurance in order to protect the interest of the government. For lost /
damaged properties without covering insurance, liability therefore should devolve upon the
parties responsible.
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7. Inter-Agency Payables of the Agency totaling to P12,995,031.11 remained unsettled
at year end, in violation of provision of Section 6(a) of PD 1146.
The Management to direct the Municipal Treasurer / Accountant to remit regularly the
collections and contributions due to GSIS, BIR, Pag-ibig and Philhealth in accordance with RA
8291, PD 1752 and Revenue regulations No. 4-93. Reconcile records with the GSIS and various
government agencies with regard the actual payables and urge the Municipal Treasurer to remit
immediately the amount which was held in trust to subject offices, in compliance with RA 8291,
P.D. 1152 and Revenue Regulations No. 4-93. Avoid further payment of penalties that might be
imposed for late remittances. And let members avail of their legal/lawful benefits to avoid
further legal complications anent this issue.
8. The Management failed to comply DILG Memorandum Circular No. 2012-73 dated
April 17, 2012, thus, quick response and preparedness during the disaster cannot be
achieved.
Municipal officials exercising fiscal responsibility over the financial transactions and
operation for the 5% Calamity Fund to observe efficiency in planning and monitoring the proper
implementation of programs, projects and activities in compliance with Section 21 of RA 10121
for Local Disaster Risk Reduction And Management Fund (LDRRMF).
9. Had the implementation of the 20% Economic Development Fund amounting to

P6,972,780.33 have been maximized and effectively spent for prioritized projects
identified in DILG and DBM Joint Circular No.2011-1 dated April 11, 2011, thus,
the agency’s objective to provide economic stability and sustainable development
have been attained benefiting the constituents of the municipality.
Management to intensify the implementation especially of livelihood programs by

conducting information dissemination to include feasible projects, process of availing the
programs and the economic outcomes. Make available to those who have already undergone
seminars / trainings the necessary starting capital that would partake the nature of a loan so that
upon recovery of the amounts, these will be loaned out to other deserving beneficiaries.
10. Management failed to remit prior years BIR due in the total amount of P755,473.64.
Management to enforce their rights and power to go after these responsible personnels
who failed to remit the due to BIR. Enter into a compromise agreement with the BIR regarding
the prior year’s transactions.
11. The audit team cannot validate the expenditures in the amount of P350,000.00 for
Gender and Development activities because no concrete programs were formulated
as mandated under Executive Order No. 273.
Management to create a GAD focal point that advocates for, coordinates, guides and
monitors the development and implementation of the agency’s GAD plan and GAD-related
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programs, activities and projects and also tasked to prepare the annual GAD plan and budget in
coordination with the Budget Officer pursuant to Section 5.1 of the DBM, NEDA and NCRFW
Joint Circular 2004-1. Further, incorporate the approved GAD plan/budget in the budget
proposal for CY 2012 and onwards to ensure that the cost of implementing the GAD activities is
part of the approved budget and that at least 5% of the total agency appropriations as authorized
under the annual GAA, shall correspond to the activities supporting the GAD. The Management
to identify the GAD related expenditures in their existing LGU Budget and Plan to be
incorporated in the GAD Plan.
F. STATUS OF IMPLEMENTATION OF PRIOR YEARS’

AUDIT RECOMMENDATIONS
We made a follow-up on the action taken by the management of Municipality of Pantar,

Lanao del Norte to implement the recommendation on prior years and noted the following:
Status of Implementation No. of Recommendation

1. Full implementation 3
2. Partial implementation 3
3. Non-implementation 2
Partial and non-implemented recommendations are reiterated in this Annual Audit Report
for CY 2012 due to materiality and relevance. The results of the validation of the implementation
of prior year’s recommendations are presented in Part III.
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TABLE OF CONTENTS
Page
Part I 1-13
State Auditor's Report on the Financial Statements
Statement of Management Responsibility
Financial Statements
Notes to Financial Statements
Part II 14-27
Comments And Observations
 Financial and Compliance Audit
 Value for Money Audit
 Compliance With Tax Laws
 Gender Development
 Statement Of Audit Suspension, Disallowances And Charges
Part III
Status of Implementation of Prior Years Audit Recommendations 28-30
Part IV
Annexes 31-36
A. Balance Sheet- General Fund
Balance Sheet- Special Education Fund
Balance Sheet- Trust Fund
B. Statement of Income and Expenses – General Fund
Statement of Income and Expenses – Special Education Fund
C. Statement of Cash Flows – General Fund
Statement of Cash Flows – Special Education Fund
Statement of Cash Flows – Trust Fund
D. Status of Appropriations, Allotments and Obligation (SAAOB)
PART I – FINANCIAL STATEMENTS
COMMISSION ON AUDIT
OFFICE OF THE SUPERVISING AUDITOR
Audit Group G - Iligan City & Lanao del Norte Province
QPGC, Pigcarangan, Tubod, Lanao del Norte
TeleFax No. (063) 341-5660
STATE AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
Hon. Mohammad Exchan G. Limbona

The Municipal Mayor
We have audited the accompanying financial statements of the Municipality of Pantar,

Lanao del Norte which comprise the Balance Sheet as of December 31, 2012 and the Statements
of Income and Expenses and Cash Flows for the period then ended and a summary of significant
policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with International Financial Reporting Standards. This responsibility
includes: designing, implementing and maintaining internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether
due to fraud or error, selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our

audit. We conducted our audit in accordance with the Generally Accepted Auditing Standards.
These standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from material
misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances. An audit
also includes assessing the accounting policies used and the reasonableness of accounting
1
estimates made by the management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
basis for our audit opinion.
Basis for Qualified Opinion
As are discussed in Part II of the Report, Due from Officers and Employees account
amounting to P738,056.76 remained unliquidated at the end of the year; thus, misrepresenting
the cash, receivable and operating expense accounts and property, plant and equipment totaling
P19,234,636.03 were not ascertained due to the failure of the Management to conduct periodic
physical inventory taking.
Opinion
In our opinion, except for the effects on the financial statements of the matters referred to
in the preceding paragraph, the financial statements present fairly the financial position of the
Municipality of Pantar, Lanao del Norte, as of December 31, 2012, and the results of its
operations and cash flows for the period ended.
COMMISSION ON AUDIT
February 22, 2013
2
STATEMENT OF MANAGEMENT RESPONSIBILITY

FOR FINANCIAL STATEMENT
The management of the LGU- PANTAR, LANAO DEL NORTE is responsible for all
information and representations contained in the Balance Sheet as of December 31, 2012 and the
related Statement of Income and Expenses and Statement of Cash Flows for the period then
ended. The financial statements have been prepared in conformity with generally accepted
accounting principles and reflect amounts that are based on best estimates and informed
judgment of management with an appropriate consideration of materiality.
In this regards, management maintains a system of accounting and reporting which
provides for the necessary internal controls to ensure that transactions are properly authorized
and recorded; assets are safeguard against unauthorized use or disposition and liabilities
recognized.
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PROVINCE OF LANAO DEL NORTE
CONSOLIDATED DETAILED BALANCE SHEET
As of December 31, 2012
(With Comparative Figures for CY 2011)
2012 2011
ASSETS
Current Assets
Cash
Cash in Treasury P 36,318.94 P 69,562.34
Cash - Disbursing Officer - -
Cash in Bank - Local Currency - Current Account 44,415.72 70,206.02
Total Cash (Note 5.1) 80,734.66 139,768.36
Receivables
Due from Officer & Employees (Note 6.2) 738,056.76 738,056.76
RPT, Receivables 38,855.00 38,855.00
Special Education Tax Receivable 17,224.66 17,224.66
Due from GOCCs 2,353,793.33 2,353,793.33
Total Receivables (Note 6.1) 3,147,929.75 3,147,929.75
Property, Plant & Equipment (Net Depreciation)
Land 271,380.00 271,380.00
Building 1,359,353.38 1,359,353.38
Markets & Slaughterhouse - -
Other Structures 720,000.00 720,000.00
Office Equipment - -
Furniture and Fixtures 344,490.00 344,490.00
IT Equipment and Software 303,919.17 39,450.00
Library Books - -
Agriculture, Fishery & Forestry Equipment - -
Construction & Heavy Equipment 6,600,000.00 6,600,000.00
Military and Police Car 192,000.00 192,000.00
Motor Vehicle - -
Other Equipment 47,095.00 47,095.00
Roads, Highways & Bridges 2,343,322.99 -
Artesian Wells, Reservoirs, Pumping 152,000.00 152,000.00
Const. in Progress - Roads, Highways & Bridges 2,497,000.00 2,497,000.00
Const. in Progress - Parks, Plaza 200,295.00 200,295.00
Const. in Progress - Waterways, Aqueduct, etc. 570,000.00 570,000.00
Const. in Progress - Other Public Structure 570,000.00 570,000.00
Total Property, Plant & Equipment (Note 8.1) 16,170,855.54 13,563,063.38
TOTAL ASSETS P 19,399,519.95 P 16,850,761.49
LIABILITIES AND EQUITY

LIABILITIES
Payables
Accounts Payable 5,979.35 5,979.35
Due to BIR (Note 9.1) 755,473.64 765,382.78
Due to GSIS (Note 9.2) 10,460,536.03 9,086,508.76
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Due to Pag-ibig (Note 9.3) 844,096.44 721,496.44
Due to Philhealth (Note 9.4) 934,925.00 799,725.00
Loans Payable 99,000.00 99,000.00
Deferred Real Property Income (Note 9.5) 38,855.00 38,855.00
Deferred Special Education Tax Income (Note
9.5) 17,224.66 17,224.66
TOTAL LIABILITIES 13,156,090.12 11,534,171.99
EQUITY
Government Equity, Beg. 5,316,589.50 4,734,446.96
Add: Retained Operating Surplus
Current Operations 926,840.33 582,142.54
Prior Year's Adjustment - -
Less: Transfer to Registries
Prior Year's Adjustment
TOTAL EQUITY (Note 10.1) P 6,243,429.83 P 5,316,589.50
TOTAL LIABILITIES AND EQUITY P 19,399,519.95 P 16,850,761.49
(See Accompanying Notes to Financial Statements)
Certified Correct:
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CONSOLIDATED DETAILED STATEMENT OF
INCOME AND EXPENSES
For the Period ended December 31, 2012
2012 2011
Income:
Local Taxes P 32,752.24 P 38,214.21
Permits and Licenses 14,481.81 23,089.00
Service Income - -
Business Income - -
Other Income 37,858,232.55 37,903,487.10
TOTAL INCOME (Note 11.1) 37,905,466.60 37,964,790.31
Less: Expenses
Personal Services (Note 12.2) 16,830,303.50 15,197,487.95
Maintenance and Other Operating Expenses (Note 12.3) 20,148,322.77 22,185,159.81
TOTAL EXPENSES 36,978,626.27 37,382,647.76
Operating Income 926,840.33 582,142.54
Financial Expenses
Bank Charge - -
Income Before Subsidies, Donations and Extraordinary
items 926,840.33 582,142.54
Add:
Subsidy from Other National Gov't Agencies - -
Tota
l 926,840.33 582,142.54
Less
: Subsidies to Other Funds - -
Income before Extraordinary Items 926,840.33 582,142.54
Add: Extra Ordinary Items -
NET INCOME (LOSS) P 926,840.33 P 582,142.54
Certified Correct:
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CONSOLIDATED STATEMENT OF CASH FLOWS
2012 2011
Cash Flows from Operating Activities:
Cash Inflows:
Collection from taxpayers P 18,842.66 P 61,303.21
Share from Internal Revenue Collections 34,961,773.00 36,096,902.00
Other Receipts 2,924,850.94 1,806,585.10
Total Cash Inflow 37,905,466.60 37,964,790.31
Cash Outflows:
Payments -
To suppliers/creditors 20,148,322.77 20,520,630.08
To employees 16,830,303.50 15,197,487.95
Other Expenses/payments 985,874.03 1,762,156.23
Total Cash Outflow 37,964,500.30 37,480,274.26
Net Cash from Operating Activities (59,033.70) 484,516.04
Cash Flows from Investing Activities:
Cash Inflows:
From Sale of Property, Plant and Equipment -
From Sales of Debt Securities of Other Entities -
From Collection of Principal on Loans to Other
Entities -
Total Cash Inflow - -
Cash Outflows:
To Purchase Property, Plant and Equipment -
To Purchase Debt Securities of Other Entities -
To Grant/Make Loans to Other Entities -
Total Cash Outflow - -
Net Cash from Investing Activities -
Cash Flows from Financing Activities:
Cash Inflows:
From Issuance of Debt Securities -
From Acquisition of Loan -
Total Cash Inflow - -
Cash Outflows:
Retirement/Redemption of Debt Securities -
Payment of Loan Amortization - 449,027.53
Total Cash Outflow - 449,027.53
Net Cash from Financing Activities - (449,027.53)
Net Increase (Decrease) in Cash (59,033.70) 35,488.51
Cash at Beginning of the Period 139,768.36 104,279.85
Cash at the End of the Period (Note 5.1) P 80,734.66 P 139,768.36

Certified Correct:
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CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
I. General
1. Agency Profile
1.1 The Municipality of Pantar was created with the passage of P.D. 1551 on
June 11, 1978. It has 21 barangays and serves as a general purpose government for the
services and effective governance of the inhabitants within its territorial jurisdiction
(Section 444 of RA7160).
2. Basis of Financial Statements Preparation
2.1 The Consolidated Balance Sheet as of December 31, 2012 and the related
Statement of Income and Expense and Cash Flow for the year then ended, has been
prepared in accordance with applicable laws, rules and regulations and in conformity
with the Generally Accepted State Accounting Principles and Standards.
2.2 The Financial Statements are consolidation of the General Fund, Special
Education Fund & Trust Fund.
3. Significant Accounting Principles
3.1 The municipality uses accrual basis of accounting as mandated. All

expenses are recognized when incurred and reported in the financial statements in the
period to which they relate. Income is on accrual basis except for Real Property Tax
which is recorded as income when actually collected.
3.2 Plant, Property and Equipment are carried at historical cost.

Infrastructures under construction – in – progress are valued following the construction
period theory. Costs of public infrastructure for general public use are not carried in the
books.
3.3 For assets under construction, all related expenses incurred during the
construction of the projects are capitalized.
3.4 Payable accounts are recognized and recorded in the books of accounts
only upon acceptance of the goods / inventory / other assets and rendition of services to
the agency.
3.5 Accounts were classified to conform with the new Chart of Accounts
prescribed under the New Government Accounting System, which was implemented
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effective January 1, 2002, and as further reclassified and updated in compliance with
COA Circular Nos. 2003-001, 2003-002, 2004-003 dated June 17, 2003, August 1, 2003
and September 20, 2004, respectively.
4. Correction of Fundamental Errors
4.1 Fundamental errors of prior years are corrected using the Prior Year's
Adjustments account. Errors affecting current year's operations are charged to the current
year's accounts.
4.2 The amount shown as PY adjustment composed of disbursement out of

continuing appropriation.
II. Balance Sheet
5. Cash
5.1 The Cash account includes:
GF SEF TF Total
Cash in Vault 14,282.66 22,036.28 - 36,318.94
Cash in Bank 11,211.66 21,002.06 12,202.00 44,415.72
Total Cash 25,494.32 43,038.34 12,202.00 80,734.66
6. Receivables
6.1 Total receivables comprise:
Due from Officer & Employees - H. Dimalutang 738,056.76

RPT, Receivables 38,855.00
Special Education Tax Receivable 17,224.66
Due from GOCCs 2,353,793.33
Total Receivacles 3,147,929.75
6.2 The account Due from Officers and Employees includes of the
unliquidated cash advance of the late former Municipal Treasurer, Mr.
Dimalotang Honassan in the amount of P732,077.41. This unliquidated
cash advance existed in the cashbook for more than thirteen (13) years.
7. Inventories
7.1 During the period, the agency was able to procure office supplies for use
in different offices as well as drugs and medicines in accordance with the plans and
targets relative to the implementation of their programs and projects. Accordingly, all of
the items were issued to the requisitioning office.
9
8. Property, Plant and Equipment
8.1 The property, plant and equipment comprise the following:
Land 271,380.00
Building 1,359,353.38
Other Structures 720,000.00
Furniture and Fixtures 344,490.00
IT Equipment and Software 303,919.17
Construction & Heavy Equipment 6,600,000.00
Military and Police Car 192,000.00
Other Equipment 47,095.00
Roads, Highways & Bridges 2,343,322.99
Artesian Wells, Reservoirs, Pumping 152,000.00
Const. in Progress - Roads, Highways & Bridges 2,497,000.00
Const. in Progress - Parks, Plaza 200,295.00
Const. in Progress - Waterways, Aqueduct, etc. 570,000.00
Const. in Progress - Other Public Structure 570,000.00
Total Property, Plant & Equipment 16,170,855.54
9. Liabilities
9.1 Due to BIR represents the liability for collections received or amounts
withheld from officers and employees for remittance to the Bureau of Internal Revenue.
9.2 Due to GSIS represents the liability for collections received or amounts
withheld from officers and employees and government contribution for remittance to the
Government Service Insurance System (GSIS) from December 2004 to December 31,
2012.
9.3 Due to Pag-ibig represents the liability for collections received or amounts
withheld from officers and employees and government share for remittance to the Home
Development Mortgage Fund (HDMF).
9.4 Due to Philhealth represents the liability for collections received or

amounts used to record the liability for collections received or amounts withheld from
officers and employees and government share for remittance to the Philippine Health
Insurance Corporation (PHIC).
9.5 Other Payables consists of:
Deferred Real Property Income 38,855.00

Loans Payable 99,000.00
Deferred Special Education Tax Income 17,224.66
Total 155,079.66
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10. Government Equity
10.1 The government equity comprises:
Government Equity, Beginning 4,734,446.96

Add: Retained Operating Surplus
Current Operations 582,142.54
Prior Year’s Adjustment -
Less: Transfer to Registries
Government Equity, 2010 5,316,589.50
III. Statement of Income & Expenses
11. Income Accounts
11.1 Income comprises:

Community Tax 583 12,035.00
Real Property Tax 588 6,807.66
Permit Fees 605 5,150.00
Registration Fees 606 250.00
Special Education Tax 591 8,509.58
Clearance/Certification Fees 613 14,481.81
Internal Revenue Allotment 665 34,961,773.00
Miscellaneous Income 678 2,896,459.55
Total 37,905,466.60
12. Expenditure Accounts
12.1 All Disbursement / Expenditure made for CY 2012 is in accordance with

auditing and accounting rules of COA and based on approved Budget CY 2012 this
municipality.
12.2 Personal services include the following:
Salaries & Wages - Regular pay 701 8,472,646.60

Salaries & Wages – Contractual 706 4,979,000.00
Personal Economic Relief Allowance (PERA) 711 557,000.00
Additional Compensation 712 500,500.00
Representation Allowance (RA) 713 414,880.00
Transportation Allowance (TA) 714 414,880.00
Subsistence, Laundry and Quarters Allowance 716 73,800.00
Honorarium 720 382,126.75
Life and Retirement Insurance Contributions 731 856,609.43
PAG-IBIG Contributions 732 61,300.00
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PHILHEALTH Contributions 733 67,600.00
ECC Contributions 734 49,960.72
Total 16,830,303.50
12.3 The Maintenance and Other Operating Expenses include the following:
Traveling Expenses - Local 751 54,900.00

Training Expenses 753 272,238.70
Office Supplies Expenses 755 240,098.28
Food Supplies Expenses 758 640,722.05
Drugs and Medicines Expenses 759 1,430,007.55
Gasoline, Oil and Lubricants Expenses 761 331,957.40
Agricultural Supplies Expense 762 1,062,841.52
Postage & Deliveries 771 5,058.79
Telephone Expenses-Mobile 773 35,324.50
Printing and Binding Expenses 781 44,731.76
Representation Expenses 783 705,209.60
Subscription Expenses 786 21,375.50
Legal Services 791 139,784.30
Consultancy Services 793 316,009.42
Sanitary Services 794 1,297,157.50
Security Services 797 1,114,500.00
Repairs and Maintenance - Office Equipment 821 129,724.55
Repair & Maint. - Motor Vehicles 841 203,479.04
Repairs and Maint.- Public Infrastructure 851 6,406,781.66
Repairs and Maint - Artesian Wells, Reservoirs,
Pumping 854 762,966.00
Repairs and Maint - Irrigation, Canals & Laterals 855 851,924.91
Repair & Maint. - Other Public Infrastructure 860 983,890.00
Donations 878 905,300.90
Confidential Expenses 881 350,000.00
Intelligence Expenses 882 350,000.00
Miscellaneous Expenses 884 507,831.81
Other Maintenance and Operating Expenses 969 983,407.03
Bank Charges 971 1,100.00
Total 20,148,322.77
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13. Allotments, Obligations and Balances
13.1 The Allotment, Obligations and the corresponding balances are broken
down as follows:
Appropriation
s Allotments Obligations Balances
PS 17,536,308.00 17,536,308.00 16,830,303.50 706,004.50
MOOE 9,043,770.00 9,043,770.00 8,674,593.10 369,176.90
Capital Outlay 200,000.00 200,000.00 193,200.00 6,800.00
20% Development Fund 7,036,022.00 7,036,022.00 6,972,780.33 63,241.67
5% Calamity Fund 1,720,256.00 1,720,256.00 1,686,749.35 33,506.65
5% Gender Issues 350,000.00 350,000.00 350,000.00 -
Aid to BDF 210,000.00 210,000.00 210,000.00 -
Council for the Protection of
Children 150,000.00 150,000.00 150,000.00 -
36,246,356.00 36,246,356.00 35,067,626.28 1,178,729.72
Certified Correct:
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PART II – COMMENTS AND OBSERVATIONS
A. FINANCIAL AND COMPLIANCE AUDIT
I. CASH
MOOE paid out of cash advances
1. Municipality Expenditures were paid out of the cash advance of the

Disbursing Officer designate, in violation to provisions of COA Circular No.
97-002.
COA Circular No. 97-002 dated February 10, 1997 defines and regulates the
granting of cash advances. Examination of the liquidation of cash advances made by the
Disbursing Officer designate for the General Fund disclosed that the credits to his cash
advances included payments for maintenance and operating expenses, in connection with
the regular operation of the municipality such as, among others, traveling expenses,
repair and maintenance of Municipal Hall. It even included payments for reimbursement
to some officials.
Direct payment of cash for unrelated purposes out of the cash advance intended
for salaries, wages and other similar payments is not allowed, unless small and paid out
of the Petty Cash Fund which is set up at the beginning of the year.
Such being the case it is quite clear that the payments made by the disbursing
Officers-designate did not constitute expenditures for which he may claim credit in his
accounts, resulting to the overstatement of cash and understatement of expenses, which
will eventually create problems to the agency’s cash activities.
It should be noted that this is a prior year’s audit finding and recommendation and
reiterated in this report due to its importance and materiality and for management to take
immediate and serious remedial action.
Management Comments:
The municipal treasurer commented that cash advances were made because it is
hard for the employees to go down just to encash their checks and for convenience.
Recommendations:
Direct the Accountable Officer concerned to stop the practice of using cash
advance in paying operating expenses or claims of municipal officials and
employees. Limit cash advances to salaries or wages and travel expenses.
The municipal treasurer admitted the deficiency noted and promised not to
commit the same mistake in the future. Otherwise, third-party investigations can become
annoying and burdensome to management.
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II. ACCOUNTS RECEIVABLES
Unliquidated Cash Advances
2. Due from Officers and Employees account amounting to P738,056.76

remained unliquidated at the end of the year; thus, misrepresenting the cash,
receivable and operating expense accounts.
Provisions of COA Circular No. 97-002 dated February 10, 1997 provides in part
that all cash advances shall be fully liquidated at the end of each year.
The correctness of the financial statements of the Municipality as of December

31, 2012 could not be determined much less assured as it included the unliquidated cash
accountability of the former Municipal Treasurer who had permanently left the
government service due to his sudden death last January 1998. Its amount of P732,077.41
appeared in the financial statements of the Auditee for more than thirteen years. Hence,
the validity and correctness of the cash accounts could not be determined. Likewise, the
composition of cash account as to whether it includes cash items or purely cold cash
could not be determined. His immediate family was not aware of his accountability.
Thus, the recovery of the amount could not be ascertained, as the deceased accountable
officer had no real estate wherein the Auditee has legal right to claim thereon.
It should be noted that this is a prior year’s audit finding but reiterated due to the
materiality of the amount, which really affect the financial capability of the Auditee.
Management Comment:
The management promised to make a letter request to the COA inviting the
attention of the Regional Legal Adjudication Office (RLAO) for write-off/dropping in the
books of accounts with all the supporting papers/documents for consolidation. And the
Assistant Municipal Treasurer promised to completely liquidate her cash advances in the
ensuing year.
Recommendation:
Make a letter request to the COA inviting the attention of the Regional Legal
Adjudication Office (RLAO) for write-off/dropping in the books of accounts with all
the supporting papers/documents for consolidation.
The management is required to strictly comply with the rules and regulations
governing the liquidation of cash advances in accordance with the provisions of
Section 89 of PD 1445.
The agency committed to comply with the above provision of rules and
regulations. Towards this, the team shall undertake periodic monitoring.
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III. INVENTORIES
Commonly used supplies not purchased at the Procurement Service
3. The Agency did not avail the services of the Procurement Service (PS) of the
Department of Budget and Management as required in AO No.17 and
Section 53 of RA No. 9184 thereby not helping the government owned
institution.
Section 4 of Administrative Order No. 17 dated July 28, 2011 and DBM Circular
No. 2011-006 dated August 25, 2011 provides that common use supplies shall be
procured directly from the PS or its depots without need of public bidding as provided in
Section 53.5 of the Implementing Rules and Regulations of RA 9184.
In the course of our audit, it was noted that commonly used supplies were not
purchased from the Procurement Service of the DBM, in violation of Administrative
Order No. 17 dated July 28, 2011, DBM Circular No. 2011-006 dated August 25, 2011
and Section 53.5 of the Implementing Rules and Regulations of RA 9184.
With the non-availment of the PS-DBM in the procurement of commonly use

supplies, there was no assurance that the Management got the most advantageous price
considering that the determination of participants may have been limited to suppliers
known by agency officials and the management is not helping the government owned
institution.
Procuring Entity must consider the services of PS-DBM in the procurement of all
kinds of commonly used supplies. This will free them from the tediousness of attending
to recurring transactions, and provide greater time for the procurement of high value,
highly specialized requirements for its more significant projects. This is a reiteration of
prior year findings.
The management commented that they did not avail the PS-DBM because they
will incur additional expenses in traveling to PS-DBM to follow up the availability of the
items.
Recommendations:
Management to prepare the Annual Procurement Plan for the commonly

used supplies consolidating all cost centers and submit to the PS DBM at the start of
the year. The PS-DBM should provide PS-Depot in Iligan City for accessibility.
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Failed to register in PhilGEPS
4. The Agency failed to register with the Government Electronic Procurement

System (G-EPS); thus, it failed to achieve the purpose of the law to promote
transparency and efficiency as well as to ensure widest dissemination of bid
opportunities.
Section 91 of R.A. No. 10147 otherwise known as the General Appropriations

Act for FY 2011, the Government Procurement System (G-EPS) shall be used as the
primary source of information on government procurement of common-use supplies,
goods and equipment, and as a repository of all government procurement information,
pursuant to R.A. No. 9184 and its IRR.
All invitations to apply for eligibility and to bid, notices of award, and all other
procurement-related notices shall be posted in the G-EPS Electronic Bulletin Board in
accordance with the IRR of RA No. 9184, regardless of the method of procurement used.
IRR-A of R.A. No. 9184 Sec 8.3.1 provides that all procuring entities are
mandated to fully use the G-EPS in accordance with the policies, rules, regulations and
procedures adopted / disseminated by the GPPPB and embodied in this IRR-A.
In the PhilGEPS website, we found out that the Management was had not posted
any bid invitations. In effect, it failed to achieve the purpose of the law to promote
transparency and efficiency as well as to ensure widest dissemination of bid
opportunities.
Management emphasized that posting in the conspicuous area and in the bulletin
board of the Municipality was made.
Recommendations:
To be able to use the G-EPS, the agency to register and designate the
officials or personnel authorized to transact with and operate the G-EPS from their
terminals pursuant to Section 8.2.3 of IRR, RA 9184; and Seek the assistance of the
PS-DBM to ensure their on-line connectivity and for the training of their personnel
responsible for the operation of G-EPS from their terminal in accordance with
Section 8.3.1 of IRR-RA 9184.
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IV. PROPERTY, PLANT AND EQUIPMENT
Failed to conduct periodic physical inventory taking
5. Correctness, reliability and existence of property, plant and equipment

totaling P9,566,857.55 were not ascertained due to the failure of the Auditee
to conduct periodic physical inventory taking, contrary to Section 124 of New
Government Accounting System, Volume I. This affected the fair
presentation of the fixed asset accounts in the financial statement.
Section 124, New Government Accounting System, Volume I, requires the local
executive for a periodic physical inventory of properties. The physical count of property,
plant and equipment by type shall be made annually and reported on the Report on the
Physical Count of Property, Plant and Equipment (RPCPPE). This shall be submitted to
the auditor concerned not later than January 31, of each year.
The annual inventory report is the basis for reconciliation between the records
maintained by the Accountant and the Property and Supply Officer. It shall be
complemented by individual memorandum receipts. This is a control mechanism adopted
to ensure the correctness and reliability of records and the inventory reports.
The validity and accuracy of the Property, Plant and Equipment (PPE) account
totaling P9,566,857.55 were not validated and verified due to management’s failure to
conduct physical inventory taking of its assets. Further, their existence and serviceability
was not also verified. Lost or damaged properties was not also segregated and covered
by Inspection and Inventory Reports as a basis for dropping from the book. Breakdown
as shown below:
Building 1,359,353.38
Other Structures 720,000.00
Furniture and Fixtures 344,490.00
IT Equipment and Software 303,919.17
Construction & Heavy Equipment 6,600,000.00
Military and Police Car 192,000.00
Other Equipment 47,095.00
TOTAL 9,566,857.55
In the absence of an inventory report, the segregation of assets as to their

usefulness whether serviceable or unserviceable, was not possible. Damaged or lost
property could have been determined and proper adjustments in the books of accounts
could have been made upon approval of the Inspection and Inventory Report.
Verification of fixed assets accounts in the balance sheet showed that some
equipment has no ledger cards while others have. Due to failure to maintain property
ledger cards, the equipments recorded in the balance sheet could not be accounted for. As
18
a result, management assertion of ownership over these assets is questionable due lack of
property ledger cards on each equipment.
Alternative procedure to validate and ascertain the existence of the PP&E assets;
such as comparing the issued Memorandum of Receipt of Equipment (MRE) with the
subsidiary ledger cards and ocular inspection were not employed due to the absence of
source documents and prior years inventory report on file.
It was also observed that the Management failed to provide residual value in
computing the depreciation. The accumulated depreciation provided by the Management
exceeded the acquisition cost.
This is a prior year’s audit finding and is hereby reiterated due to materiality of
the amount that will affect the decision of the user of the financial statement.
When confronted, the LGU officials admitted the responsibility and eventually
created a committee to conduct actual physical inventory-taking and to appraise subject
properties. The accountant admitted the lapses but promised to abide by the NGAS rules
after the physical count of PPE’s has been completed.
Recommendations:
Create an appraisal / inventory committee to conduct actual physical

inventory taking of all properties, plant and equipment. Also instruct the Municipal
Accountant to make necessary adjustments on the records deficiencies noted in the
course of inventory taking and in the reconciliation of the inventory report with the
subsidiary ledgers. After physical count and report of PPE’s are completed, prepare
and maintain a subsidiary ledger card on each equipment and should bear a
Property Number. The municipal accountant to provide residual value in
computing the depreciation. Fully depreciated property account should be
transferred to Other Asset account.
Uninsured Property, Plant and Equipment
6. Municipal properties in the amount P9,566,857.55 are exposed to risks due to

non-compliance with Republic Act No. 6556 dated September 1, 1951 as
amended by PD No. 245 dated July 13, 1973.
Republic Act No. 656, otherwise known as the “Property Insurance Law”, as
amended by Presidential Decree No. 245, requires all government entities to insure with
19
the General Insurance Fund of the GSIS all its properties against any insurable risk and
pay the corresponding premium thereon.
Section 489, Chapter 2 of the GAAM Volume I requires that all heads of
department, offices of the national government etc. shall secure from the General
insurance fund directly all insurances or bonds covering properties, contracts, rights of
action and other insurable risk of their respective offices, including all those in which
their respective offices have an insurable risk and all those in which they have insurable
interest only. For this purpose, no insurance agent or general agent shall hereafter be
appointed or maintained to represent the General Insurance Fund and / or the
Government Service Insurance System.
As used in this section, insurable interest means every interest in property,

whether real or personal, or in relation thereto, or liability in respect thereof, of such
nature that a contemplated peril might directly indemnify the insured.
The agency has already accumulated total insurable assets of P9,566,857.55 of

which only the motor vehicles were insured. The failure to insure its assets exposes the
agency to unnecessary risks in case of any physical damage or loss of its assets due to
fire, theft and other unforeseen / fortuitous events.
Management Comment:
Recommendations:
Management should require the Administrative Officer to update the list of

properties that needs to be insured and submit the same to GSIS. This will
guarantee that all properties are adequately covered by insurance in order to
protect the interest of the government.
For lost / damaged properties without covering insurance, liability therefore

should devolve upon the parties responsible.
V. LIABILITIES
7. Inter-Agency Payables of the Agency totaling to P12,995,031.11 remained

unsettled at year end, in violation of provision of Section 6(a) of PD 1146.
Section 6(a) of PD 1146 provides that: “Compulsory deductions made from the
monthly salaries of employees such as GSIS, Pag-ibig and Medicare premiums and
20
contributions and the like should be remitted to the agencies concerned within the first
ten (10) days of each calendar month following the month to which the contribution
applies.”
Department of Budget and Management, Letter Circular No. 2001-16 dated

August 27, 2001, requires agencies/ LGU to remit promptly all withheld taxes due to the)
Bureau of Internal Revenue (BIR) and premium contributions to the Government
Services Insurance System (GSIS) Home Development Mutual Fund (HDMF) and Health
Insurance Corporation (PHIC), as the case may be.
As of December 31, 2012, the Auditee had the following Inter-Agency Payables:
Due to BIR 755,473.64

Due to GSIS 10,460,536.03
Due to Pag-ibig 844,096.44
Due to Philhealth 934,925.00
TOTAL 12,995,031.11
The above-cited regulations emphasize the primary responsibility of the LGU to

remit the collections and contributions due to various government agencies particularly
GSIS, BIR, Pag-ibig and Philhealth within the prescribed period.
Accounting and auditing rules and regulations requires that premiums

contributions, loan repayments and similar obligations held in trust and payable to
national government agencies, local government units and government owned/ and or
controlled corporations should be zero out or fully paid by every government agencies
concerned at every end of the year.
Late remittance to these respective government entities entailed appropriate

penalties as well as temporary suspensions on their respective employees’ transactions.
Such practice is not only disadvantageous to the government but also to the concerned
employees who cannot enjoy the services and privileges being extended by these
government entities like application of loans to GSIS and Pag-ibig as well as hospital
insurance with Philhealth.
Continued non-remittance of employer’s and employee’s premiums contributions

withheld is an apparent gross violation of the GSIS Act, the National Internal Revenue
Law, PD 1752 and other pertinent rules and regulations.
In addition, the non-remittance of the amounts could possibly result to misuse or

misappropriation of funds. And this deprived the recipient agencies of the immediate
utilization of the funds. So much also, that the employees-members of the GOCC, cannot
avail of the privilege provided for by GSIS, PAG-IBIG and PHILHEALTH to its
members because of the non-remittance of the premium contributions.
21
This is a prior year’s audit finding, although, there is a positive action made by
the management but it is reiterated to remind to continue take actions and payments.
Management Comment:
The Management disclosed that the unremitted pertains to the December 2012 to
be remitted in the ensuing year and prior years balances of which we are resolving to
enter into memorandum of agreement to the national government agencies concerned.
However, Management acknowledged the deficiency noted and promised to remit the
collection and contributions due to GSIS, Pag-ibig, BIR and Philhealth as this will be
monitored and reported on later by the audit team.
Recommendations:
The Management to direct the Municipal Treasurer / Accountant to remit

regularly the collections and contributions due to GSIS, BIR, Pag-ibig and
Philhealth in accordance with RA 8291, PD 1752 and Revenue regulations No. 4-93.
Reconcile records with the GSIS and various government agencies with
regard the actual payables and urge the Municipal Treasurer to remit immediately
the amount which was held in trust to subject offices, in compliance with RA 8291,
P.D. 1152 and Revenue Regulations No. 4-93. Avoid further payment of penalties
that might be imposed for late remittances. And let members avail of their
legal/lawful benefits to avoid further legal complications anent this issue.
VI. DOH FUND
The Municipality have not received any funding source from the DOH for the
Calendar Year 2012.
VII. LOCAL DISASTER RISK REDUCTION AND MANAGEMENT FUND

(LDRRMF)
8. The Management failed to comply DILG Memorandum Circular No. 2012-

73 dated April 17, 2012, thus, quick response and preparedness during the
disaster cannot be achieved.
Section 21 of RA 10121 provides that the LGU to allocate 5% of the estimated

revenues from regular sources for the LDRRMF. Such allocation to be utilized in
accordance with the Local Disaster Risk Reduction and Management Plan, annual work
and financial plan of the agency pursuant to DILG Memorandum Circular No. 2012-73
dated April 17, 2012.
Validation was made by the audit team and noted that the LGU failed to comply
with the reporting requirements and to save and allocate 5% of the estimated revenues
from regular sources for the LDRRMF fund and no special trust fund was created for the
22
purpose of supporting disaster risk reduction and management. Therefore, quick response
and preparedness during the disaster cannot be achieved, thereby depriving the
constituents of the Municipality of Pantar on their safety.
Management Comment:
The management committed to comply the recommendations.
Recommendation:
Municipal officials exercising fiscal responsibility over the financial

transactions and operation for the 5% Calamity Fund to observe efficiency in
planning and monitoring the proper implementation of programs, projects and
activities in compliance with Section 21 of RA 10121 for Local Disaster Risk
Reduction And Management Fund (LDRRMF).
B. VALUE FOR MONEY AUDIT
20% Economic Development Fund
9. Had the implementation of the 20% Economic Development Fund

amounting to P6,972,780.33 have been maximized and effectively spent for
prioritized projects identified in DILG and DBM Joint Circular No.2011-1
dated April 11, 2011, thus, the agency’s objective to provide economic
stability and sustainable development have been attained benefiting the
constituents of the municipality.
Pursuant to Section 287 of Republic Act 7160, otherwise known as the Local
Government Code of 1991, each local government unit (LGU) is required to appropriate
in the annual budget no less than twenty percent (20%) of its annual Internal Revenue
Allotment (IRA) for development projects.
To guide management on the proper utilization of this fund Section 2 of DILG

and DBM Joint Circular No.2011-1 dated April 11, 2011, provides that all projects to be
funded shall contribute to the attainment of desirable socio economic development and
environmental management outcomes and shall partake the nature of investment and
capital expenditures.
While the Local Government Code empowers local authorities to manage their
own internal affairs consistent with the notion of local autonomy, it should be
emphasized that one of the primary concerns of the national government is to ensure that
public funds, like the 20% Development Fund, shall be appropriated and judiciously
disbursed only for the purpose or purposes for which such funds are intended.
Pursuant to Section 2 of Executive Order No. 189, all local government units shall
accomplish the Annual Investment Plan (AIP) containing the details of programs,
23
activities and projects to be funded out of their respective development fund equivalent to
20% of IRA. It also, shows the corresponding project cost including the necessary fund
flows to approximate the reasonable timing in the release of funds.
For calendar year 2012, the Municipality has appropriated a total amount of
P7,036,022.00 for 20% Development Fund to finance various socio-economic
development programs, projects and activities. Evaluation on the disbursements of
P6,972,780.33 utilized from January to December 2012 for the implementation of various
programs and activities under the 20% Development Fund cannot be validated for failure
to submit breakdown of these expenses.
Recommendations:
Management to intensify the implementation especially of livelihood

programs by conducting information dissemination to include feasible projects,
process of availing the programs and the economic outcomes. Make available to
those who have already undergone seminars / trainings the necessary starting
capital that would partake the nature of a loan so that upon recovery of the
amounts, these will be loaned out to other deserving beneficiaries.
C. COMPLIANCE WITH TAX LAWS
10. Management failed to remit prior years BIR due in the total amount of
P755,473.64.
For Calendar Year 2012, the Management as a withholding agent of the Bureau of
Internal Revenue fully complied with BIR Regulations on withholding of taxes. They
remitted the value added and expanded withholding tax for the supplies and materials,
equipment and services it procured and taxes withheld on compensation. But it was noted
during the audit that they still have prior years unpaid due to BIR. Details are shown
below:
Balance as of Dec. 31, 2004 (Time of Hon. Babai Daluma) 14,719.04

Balance as of June 30, 2007 ( Time of Hon. Abdulmalik Alingan) 414,489.20
Bal. as of Dec. 31, 2009 (Time of Hon. Norlainie Limbona) 239,741.80
Bal. as of December 31, 2010 (Time of Hon. Moh. Exchan G. Limbona) 147,531.52
Total Carried Forward 816,481.56
Less: Overpayment made (January 1 December 31, 2011) 51,098.78
Overpayment made (January 1 December 31, 2012) 9,909.14
Total Due to BIR 755,473.64
We recommended that the Management to enforce their rights and power to

go after this responsible personnel who failed to remit the due to BIR. Enter into a
compromise agreement with the BIR regarding the prior year’s transactions.
24
D. GENDER AND DEVELOPMENT
Gender and Development (GAD) activities no concrete programs
11. The audit team cannot validate the expenditures in the amount of
P350,000.00 for Gender and Development activities because no concrete
programs were formulated as mandated under Executive Order No. 273.
R.A. No. 7192 and Executive Order (E.O.) No. 273 mandate agencies, including
LGUs to institutionalize GAD in government by incorporating the GAD concerns in their
planning, programming and budgeting process. The allocation of funds for the
implementation of a GAD Plan is a statutory requirement that must be complied with by
provinces, cities, municipalities and barangays.

DBM-NEDA-NCRFW JC No. 2004-1 (superseding DBM-NEDA-NCRFW JC
No. 2001-01), provides the guidelines for the preparation of annual GAD Plan and
Budget and Accomplishment Report to implement the Section on programs/projects
related to GAD as provided in Section 31 of the General Provisions of Republic Act No.
10147, otherwise known as the General Appropriation Act of CY 2011.
The GAD Plan is viewed as an integral part of the overall LGU plan. The
formulation of a GAD Plan shall follow the regular planning and budget
calendar/schedule of LGUs and shall be anchored on the existing Comprehensive Land
Use Plan, Provincial Development and Physical Framework Plan/Comprehensive
Development Plan, Local Development Investment Program and Annual Investment
Program (AIP) preparation.

A GAD Budget is the total amount provided in the General Fund Budget of the
LGU to finance the programs, projects and activities (PPAs) in the GAD Plan. The
earmarking of at least 5% of the total annual appropriation for GAD-related activities is
an indicative figure that should be attributed in the existing PPAs of LGUs’
budgets. Accordingly, the GAD budget must not be interpreted as an additional and
separate fund that will be provided by the national or local government.
The GAD Focal Point Chairperson, in close coordination with the LGU’s Budget
Officer, shall be responsible for the preparation of the GAD Budget. The costs of
functions and PPAs to implement the GAD Plan may include any or all of the following
items:
a. Personal Services;
b. Maintenance and Other Operating Expenses; and
c. Capital Outlays.

As required under DILG-DBM-NCRFW JC No. 2001-01, LGUs shall submit to
the DILG Provincial/City and Municipal Offices their GAD accomplishment reports not
later than the end of January of the ensuing year.
25
Verification on the implementation of Gender and Development activities for the
year 2012 revealed that the auditee failed to prepare the Annual Gender and Development
(GAD) Plan, hence, GAD activities cannot be validated whether such activities is within
the Annual GAD Plan conducted during the year, as required under Joint Circular No.
2004-1 and as provided for in the General Appropriations Act of CY 2012.
In our audit of the disbursements under the Gender and Development Program, it
showed that the GAD activities is included in the program of 20% Development Fund,
but we could not validate whether such activities is within the Annual GAD Plan because
of its failure to prepare the Annual Gender and Development Plan for the Calendar Year
2012.
The absence of GAD plan deprived the targeted beneficiaries in the workplace the
opportunity to enjoy and avail of its outcome in alleviating poverty, economic
empowerment especially of marginalized women, protection, promotion and fulfillment
of human rights and practice of gender responsive governance.
Management Comment:
Recommendations:
Management to create a GAD focal point that advocates for, coordinates,

guides and monitors the development and implementation of the agency’s GAD plan
and GAD-related programs, activities and projects and also tasked to prepare the
annual GAD plan and budget in coordination with the Budget Officer pursuant to
Section 5.1 of the DBM, NEDA and NCRFW Joint Circular 2004-1.
Further, incorporate the approved GAD plan/budget in the budget proposal

for CY 2012 and onwards to ensure that the cost of implementing the GAD activities
is part of the approved budget and that at least 5% of the total agency
appropriations as authorized under the annual GAA, shall correspond to the
activities supporting the GAD.
The Management to identify the GAD related expenditures in their existing

LGU Budget and Plan to be incorporated in the GAD Plan.
26
E. STATEMENT OF AUDIT SUSPENSION, DISALLOWANCES
AND CHARGES
For the Calendar Year 2012, below is the summary of Notice of Suspensions,
Disallowances and Charges issued to the Management.
Beginning This Period Settlement for Ending Balance

Balance (January 1 – the Year (As of December
(As of January 1, December 31, 31, 2012)
2012) 2012)
Notice of Suspension -0- -0- -0- -0-
Notice of Disallowance -0- -0- -0- -0-
Notice of Charge -0- -0- -0- -0-
Total -0- -0- -0- -0-
27
PART III – STATUS OF IMPLEMENTATION OF PRIOR YEARS’
AUDIT RECOMMENDATIONS
STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT RECOMMENDATIONS
Status of Reason for

Audit
RECOMMENDATIONS REF Management Imple- Partial / Non-
Observation
Action mentation Implementation
1. Expenditures classified under Direct the Accountable Officer concerned to stop AAR No action. Not Reiterated in this
maintenance and other operating the practice of using cash advance in paying 2011 implemented report.
expenses were paid out of the cash operating expenses or claims of municipal officials
advance of the Disbursing Officer and employees. Limit cash advances to salaries or
designate, in violation of the provisions wages and travel expenses.
of COA Circular No. 97-002; thus,
misrepresenting the cash and operating Direct the Municipal Accountant and the
expense accounts. Municipal Treasurer to adhere strictly to the rules
and regulations in the granting, utilization and
liquidation of cash advances to avoid legal
complications anent this issue.
2. Due from Officers and Employees Make a letter request to the COA inviting the AAR No action. Not Reiterated in this
account amounting to P732,077.41 attention of the Regional Legal Adjudication 2011 Implemented report.
remained unliquidated at the end of the Office (RLAO) for write-off/dropping in the books
year; thus, misrepresenting the cash, of accounts with all the supporting
receivable and operating expense papers/documents for consolidation.
accounts.
The management is required to strictly comply
with the rules and regulations governing the
liquidation of cash advances in accordance with
the provisions of Section 89 of PD 1445.
3. Correctness, reliability and existence Management should create an appraisal / inventory AAR Management Partially Reiterated in this
of property, plant and equipment committee to conduct actual physical inventory 2011 had created an Implemented report.
totaling P 21,347,169.28 were not taking of all properties, plant and equipment. Also inventory
ascertained due to the failure of the instruct the Municipal Accountant to make committee to
Auditee to conduct periodic physical necessary adjustments on the records anent conduct
inventory taking, contrary to Section deficiencies noted in the course of inventory inventories on
124 of New Government Accounting taking and in the reconciliation of the inventory municipal
System, Volume I. This affected the report with the subsidiary ledgers. properties.
fair presentation of the fixed asset
accounts in the financial statement.
4. The Annual Procurement Plan was The agency should prepare and submit the Annual AAR Annual Fully
not prepared as basis in the Procurement Plan as required pursuant to 2011 Procurement Implemented
procurement of goods, supplies and provision of Section 7 of Republic Act 9184 to Plan was made.
28
Audit
Observation
materials, in violation of the provision achieve efficiency, effectiveness and economy in
of Section 7 of Republic Act No. 9184; the procurement of supplies and materials. Ensure
hence, acquisition of supplies were not that this requirement is complied with and that all
efficiently, effectively and purchases of goods, supplies and materials are
economically managed. included in or covered by the approved Annual
Procurement Plan.
All end-users of the procuring entity should

individually prepare and submit an Annual
Procurement Plan/PPMP to the BAC Secretariat.
Direct the BAC Secretariat to consolidate the
Annual Procurement Plan based on all the
individual APP/PPMPs of the end-users, copy
furnished the local auditor.
5. The Auditor was not furnished The Agency should submit to the Auditor copies AAR Submitted. Fully
copies of contracts within five (5) days of the infrastructure contracts with complete 2011 Implemented
after their perfection, in violation of the supporting documents within five (5) days after
provision of COA Circular No. 76-34 signing and approval for auditorial, technical
dated July 15, 1976, as amended by review and timely inspection of the projects.
COA Circular No. 95-006; thus,
preventing the timely audit review.
6. Timely post-audit of vouchers, Direct the Municipal Accountant to submit AAR Submitted. Fully
payrolls, and receipts could have been promptly the monthly reports of collections and 2011 Implemented
made and management informed of disbursements to the Audit Team Leader or his
deficiencies noted for immediate duly authorized representative so that timely post-
correction had the required reports been audit of transactions could be made. In so doing,
submitted promptly by the Municipal management could be informed immediately of
Accountant to the Auditor or duly any deficiencies/errors detected and corrections /
authorized representative pursuant to adjustments thereof effected. Towards this, hire
COA Circular No. 95-006. and pay personnel.
7. The audit team cannot validate the Management must prepare a GAD Plan for the AAR Failed to Partially Reiterated in this
expenditures for Gender and agency to address gender issues within its mandate 2011 identify GAD Implemented report.
Development activities because no in which the cost of implementation shall be at related expenses
concrete program was formulated as least five percent (5%) of the agency’s total budget that were
mandated under Executive Order No. appropriations for the year and coordinate with already
273. NCRFW in the preparation of the GAD Plan. Send incorporated in
officials to a GAD seminar. their budget.
29
Audit
Observation
8. Unremitted collections and Reconcile records with the GSIS and various AAR Current Partially Reiterated in this
contributions due to various government agencies with regard to the actual 2011 contributions Implemented report.
government agencies totaling P payables and urge the Municipal Treasurer to were remitted
11,373,112.98 remained outstanding, in remit immediately the amount which was held in but prior years
violation of the provisions of RA 8291, trust to subject offices, in compliance with RA are not.
P.D. 1752 and Revenue Regulation No. 8291, P.D. 1152 and Revenue Regulations No. 4-
4-93. 93.
Avoid further payment of penalties that might be

imposed for late remittances. And let members
avail of their legal/lawful benefits to avoid further
legal complications anent this issue.
30
PART IV – ANNEXES
Municipality of Pantar ANNEX-A
BALANCE SHEET
SPECIAL
GENERAL FUND EDUCATION TRUST FUND TOTAL
FUND
ASSETS
Current Assets
Cash
Cash in Vault P 14,282.66 P 22,036.28 P P 36,318.94
Cash Disbursing Officer - -
Cash in National Treasury - -
Cash in Bank 11,211.66 21,002.06 12,202.00 44,415.72
Total Cash 25,494.32 43,038.34 12,202.00 80,734.66
Receivables
Due from Officers and Employees 732,077.41 5,979.35 738,056.76
RPT, Receivables 38,855.00 38,855.00
SEF, Receivables 17,224.66 17,224.66
Due from GOCCs 2,254,793.33 2,254,793.33
Due from NGAs/Pos 99,000.00 99,000.00
Total Receivacles 3,025,725.74 17,224.66 104,979.35 3,147,929.75
Property, Plant & Equipment (Net Depreciation)
Land 271,380.00 271,380.00
Building 1,235,353.38 124,000.00 1,359,353.38
Markets & Slaughterhouse - -
Other Structures 720,000.00 720,000.00
Office Equipment - -
Furnitures and Fixtures 344,490.00 344,490.00
IT Equipment and Software 303,919.17 303,919.17
Library Books - -
Agriculture, Fishery & Forestry Equipment - -
Construction & Heavy Equipment 6,600,000.00 6,600,000.00
Other Machineries and Equipment 47,095.00 47,095.00
Military and Police Car 192,000.00 192,000.00
Motor Vehicle - -
Roads, Highways & Bridges 2,343,322.99 2,343,322.99
Artesian Wells, Reservoirs, Pumping 152,000.00 152,000.00
Const. in Progress - Roads, Highways & Bridges 590,000.00 1,907,000.00 2,497,000.00
Const. in Progress - Parks, Plaza 200,295.00 200,295.00
Const. in Progress - Waterways, Aqueduct, etc. 570,000.00 570,000.00
Const. in Progress - Other Public Structure 570,000.00 570,000.00
Total Property, Plant & Equipment 12,232,760.54 - 3,938,095.00 16,170,855.54
TOTAL ASSETS P 15,283,980.60 P 60,263.00 P 4,055,276.35 P 19,399,519.95
LIABILITIES AND EQUITY

LIABILITIES
Payables
Accounts Payable 5,979.35 5,979.35
Due to BIR 755,473.64 755,473.64
Due to GSIS 10,460,536.03 10,460,536.03
Due to Pag-Ibig 844,096.44 844,096.44
Due to Philhealth 934,925.00 934,925.00
Deferred Real Property Income 38,855.00 38,855.00
Deferred Special Education Tax - 17,224.66 17,224.66
Loans Payable 99,000.00 99,000.00
TOTAL LIABILITIES 13,033,886.11 17,224.66 104,979.35 13,156,090.12
EQUITY
Government Equity, Beg. 1,331,763.74 34,528.76 3,950,297.00 5,316,589.50
Add:
Retained Operating Surplus
Current Operations 918,330.74 8,509.58 926,840.32
Prior Year's Adjustments -
Less:
Transfers to Registry
Prior Year's Adjustments -
TOTAL EQUITY P 2,250,094.48 P 43,038.34 P 3,950,297.00 P 6,243,429.82
TOTAL LIABILITIES AND EQUITY P 15,283,980.60 P 60,263.00 P 4,055,276.35 P 19,399,519.94
31
32
Municipality of Pantar ANNEX-B
Statement of Income and Expenses
SPECIAL
GENERAL FUND EDUCATION TOTAL
FUND
Income:
Local Taxes P P P
Community Tax 12,035.00 - 12,035.00
Real Property Tax 6,807.66 - 6,807.66
Special Education Tax - 8,509.58 8,509.58
Total Local Taxes 18,842.66 8,509.58 27,352.24
Permits and Licens es
Permit Fees 5,150.00 - 5,150.00
Regis tration Fees 250.00 - 250.00
Total Permits and Licenses 5,400.00 - 5,400.00
Service Income
Clearance and Certification Fees 14,481.81 - 14,481.81
Total Service Income 14,481.81 - 14,481.81
Other Income
Internal Revenue Allotment 34,961,773.00 - 34,961,773.00
Mis cellaneous Income 2,896,459.55 - 2,896,459.55
Total Other Income 37,858,232.55 - 37,858,232.55
TOTAL INCOME 37,896,957.02 8,509.58 37,905,466.60
Les s: Expens es
Personal Services
Salaries & Wages - Regular pay 8,472,646.60 - 8,472,646.60
Salaries & Wages - Contractual 4,979,000.00 - 4,979,000.00
Pers onal Economic Relief Allowance (PERA) 557,000.00 - 557,000.00
Additional Compensation 500,500.00 - 500,500.00
Repersentation Allowance (RA) 414,880.00 - 414,880.00
Trans portation Allowance (TA) 414,880.00 - 414,880.00
Subsistence, Laundry and Quarters Allowance 73,800.00 - 73,800.00
Honorarium 382,126.75 - 382,126.75
Life and Retirement Insurance Contributions 856,609.43 - 856,609.43
PAG-IBIG Contributions 61,300.00 - 61,300.00
PHILHEALTH Contributions 67,600.00 - 67,600.00
ECC Contributions 49,960.72 - 49,960.72
Total Personal Services 16,830,303.50 - 16,830,303.50
Maintenance and Other Operating Expens es
Traveling Expenses - Local 54,900.00 - 54,900.00
Training Expens es 272,238.70 - 272,238.70
Office Supplies Expenses 240,098.28 - 240,098.28
Food Supplies Expens es 640,722.05 - 640,722.05
Drugs and Medicines Expens es 1,430,007.55 - 1,430,007.55
Gasoline, Oil and Lubricants Expens es 331,957.40 - 331,957.40
Agricultural Supplies Expens e 1,062,841.52 - 1,062,841.52
Electricity Expens es - - -
Postage & Deliveries 5,058.79 - 5,058.79
Telephone Expenses - Mobile 35,324.50 - 35,324.50
Printing and Binding Expenses 44,731.76 - 44,731.76
Representation Expenses 705,209.60 - 705,209.60
Subscription Expens es 21,375.50 - 21,375.50
Legal Services 139,784.30 - 139,784.30
Consultancy Services 316,009.42 - 316,009.42
Sanitary Services 1,297,157.50 - 1,297,157.50
Security Services 1,114,500.00 - 1,114,500.00
Repairs and Maintenance - Office Equipment 129,724.55 - 129,724.55
Repair & Maint. - Motor Vehicles 203,479.04 - 203,479.04
Repairs and Maint.- Roads, Highways & Bridges 6,406,781.66 - 6,406,781.66
Repairs and Maint - Artes ian Wells , Res ervoirs , Pumping 762,966.00 - 762,966.00
Repairs and Maint - Irrigation, Canals & Laterals 851,924.91 - 851,924.91
Repair & Maint. - Other Public Infrastructure 983,890.00 - 983,890.00
Donations 905,300.90 - 905,300.90
Confidential Expens es 350,000.00 - 350,000.00
Intelligence Expens es 350,000.00 - 350,000.00
Mis cellaneous Expens es 507,831.81 - 507,831.81
Other Maintenance and Operating Expens es 983,407.03 - 983,407.03
Bank Charges 1,100.00 - 1,100.00
Total Maintenance and Other Operating Expenses 20,148,322.78 - 20,148,322.78
TOTAL EXPENSES 36,978,626.28 - 36,978,626.28
Operating Income 918,330.74 8,509.58 926,840.32
Financial Expenses
Interes t Expenses - - -
Income Before Subs idies, Donations and Extraordinary items 918,330.74 8,509.58 926,840.32
Add:
Subs idy from Other National Gov't Agencies - - -
Total 918,330.74 8,509.58 926,840.32
LesSubs
s: idies to Other Funds - - -
Income before Extraordinary Items 918,330.74 8,509.58 926,840.32
Add: Extra Ordinary Items - - -
NET INCOME (LOSS) P 918,330.74 P 8,509.58 P 926,840.32
33
ANNEX-C
Municipality of Pantar
STATEMENT OF CASH FLOWS
SPECIAL
GENERAL TRUST
EDUCATION TOTAL
FUND FUND
FUND
Cash Flows from Operating Activities:
Cash Inflows:
Collection from taxpayers P 18,842.66 P 8,509.58 P P 27,352.24
Share from Internal Revenue Collections 34,961,773.00 34,961,773.00
Receipts from sale of goods or services - -
Interest Income - -
Dividend Income - -
Other Receipts 2,916,341.36 2,916,341.36
Total Cash Inflow 37,896,957.02 8,509.58 - 37,905,466.60
Cash Outflows:
Payments -
To suppliers/creditors 20,148,322.78 20,148,322.78
To employees 16,830,303.50 16,830,303.50
Interest Expense - -
Other Expenses/payments - -
Total Cash Outflow 36,978,626.28 - - 36,978,626.28
Net Cash from Operating Activities 918,330.74 8,509.58 - 926,840.32
Cash Flows from Investing Activities:
Cash Inflows:
From Sale of Property, Plant and Equipment - -
From Sales of Debt Securities of Other Entities - -
From Collection of Principal on Loans to Other Entities - -
Total Cash Inflow - - - -
Cash Outflows:
To Purchase Property, Plant and Equipment 985,874.02 985,874.02
To Purchase Debt Securities of Other Entities - -
To Grant/Make Loans to Other Entities - -
Total Cash Outflow 985,874.02 - - 985,874.02
Net Cash from Investing Activities (985,874.02) - - (985,874.02)
Cash Flows from Financing Activities:
Cash Inflows:
From Issuance of Debt Securities -
From Acquisition of Loan -
Total Cash Inflow - - - -
Cash Outflows:
Retirement/Redemption of Debt Securities -
Payment of Loan Amortization -
Total Cash Outflow - - - -
Net Cash from Financing Activities - - - -
Net Increase (Decrease) in Cash (67,543.28) 8,509.58 - (59,033.70)
Cash at Beginning of the Period 93,037.60 34,528.76 12,202.00 139,768.36
Cash at the End of the Period P 25,494.32 P 43,038.34 P 12,202.00 P 80,734.66
Certified Correct:
34
ANNEX-D
STATUS OF APPROPRIATIONS, ALLOTMENTS, OBLIGATIONS AND BALANCES
(CURRENT LEGISLATIVE APPROPRIATION)
General Fund
Function/Program/Project Appropriations Allotments Obligations Balances

General Public Services
Executive Services ( Mayor)
General Administration
PS 4,105,452.00 4,105,452.00 4,096,846.84 8,605.16
MOOE 6,860,070.00 6,860,070.00 6,851,098.08 8,971.92
CO 200,000.00 200,000.00 193,200.00 6,800.00
FE - - - -
Sub- Total 11,165,522.00 11,165,522.00 11,141,144.92 24,377.08
Vice Mayor
PS 3,865,150.00 3,865,150.00 3,827,590.06 37,559.94
MOOE 340,000.00 340,000.00 336,950.05 3,049.95
Sub- Total 4,205,150.00 4,205,150.00 4,164,540.11 40,609.89
Support Services(Secretary to the
Sanggunian)
PS 456,649.00 456,649.00 358,386.70 98,262.30
MOOE 73,000.00 73,000.00 71,696.67 1,303.33
Sub- Total 529,649.00 529,649.00 430,083.37 99,565.63
Administrative Services ( Administration)
PS 456,649.00 456,649.00 420,427.33 36,221.67
MOOE 63,000.00 63,000.00 53,851.95 9,148.05
Sub- Total 519,649.00 519,649.00 474,279.28 45,369.72
Planning & Development Coordination
PS 707,760.00 707,760.00 614,017.56 93,742.44
MOOE 73,000.00 73,000.00 42,470.31 30,529.69
Sub- Total 780,760.00 780,760.00 656,487.87 124,272.13
34
Civil Registry (Civil Registrar)
PS 456,649.00 456,649.00 426,190.14 30,458.86
MOOE 28,000.00 28,000.00 25,992.20 2,007.80
Sub- Total 484,649.00 484,649.00 452,182.34 32,466.66
Budgeting Services (Budget Officer)
PS 456,649.00 456,649.00 420,483.18 36,165.82
MOOE 58,000.00 58,000.00 37,217.80 20,782.20
Sub- Total 514,649.00 514,649.00 457,700.98 56,948.02
Accounting Services (Accountant)
PS 456,649.00 456,649.00 390,396.28 66,252.72
MOOE 73,000.00 73,000.00 63,075.00 9,925.00
Sub-Total 529,649.00 529,649.00 453,471.28 76,177.72
Treasury Services ( Treasurer)
PS 1,864,194.00 1,864,194.00 1,736,491.42 127,702.58
MOOE 406,000.00 406,000.00 400,659.04 5,340.96
Sub- Total 2,270,194.00 2,270,194.00 2,137,150.46 133,043.54
Assessment of Real Property (Assessor)
PS 563,693.00 563,693.00 536,148.31 27,544.69
MOOE 28,000.00 28,000.00 8,974.25 19,025.75
Sub- Total 591,693.00 591,693.00 545,122.56 46,570.44
Health Services
Health Services ( Health Officer)
PS 1,193,640.00 1,193,640.00 1,139,995.08 53,644.92
MOOE 333,000.00 333,000.00 265,000.00 68,000.00
Sub- Total 1,526,640.00 1,526,640.00 1,404,995.08 121,644.92
Social Welfare Services
PS 613,226.00 613,226.00 600,916.09 12,309.91
35
MOOE 534,700.00 534,700.00 454,700.00 80,000.00
Sub- Total 1,147,926.00 1,147,926.00 1,055,616.09 92,309.91
Economic Services
Agricultural Services
General Administration ( Agriculturist)
PS 807,329.00 807,329.00 744,400.00 62,929.00
MOOE 63,000.00 63,000.00 62,907.75 92.25
Sub- Total 870,329.00 870,329.00 807,307.75 63,021.25
Engineering Services
PS 1,075,970.00 1,075,970.00 1,066,930.91 9,039.09
MOOE 58,000.00 58,000.00 - 58,000.00
Sub- Total 1,133,970.00 1,133,970.00 1,066,930.91 67,039.09
Cooperative Services
PS 456,649.00 456,649.00 451,083.60 5,565.40
MOOE 53,000.00 53,000.00 - 53,000.00
Sub- Total 509,649.00 509,649.00 451,083.60 58,565.40
Other Purposes
20% Development Fund 7,036,022.00 7,036,022.00 6,972,780.33 63,241.67
5% Calamity Fund 1,720,256.00 1,720,256.00 1,686,749.35 33,506.65
5% Gender Issues 350,000.00 350,000.00 350,000.00 -
Aid to BDF 210,000.00 210,000.00 210,000.00 -
Council for the Protection of Children 150,000.00 150,000.00 150,000.00 -
Sub- Total 9,466,278.00 9,466,278.00 9,369,529.68 96,748.32

GRAND TOTAL 36,246,356.00 36,246,356.00 35,067,626.28 1,178,729.72

Certified Correct:
36
37

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Pantar2012 Audit Report 2

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Republic of the Philippines

HON. MOHAMMAD EXCHAN G. LIMBONA

SUBJECT: CY 2012 Annual Audit Report

We request that the recommendations be implemented and will appreciate being

Very truly yours,

By authority of the Chairman:

1. The Regional Director

2. The Regional Director

3. The Regional Director

4. The Regional Director

5. The Assistant Commissioner

6. The Honorable Members of Sangguniang Bayan

7. File – Supervising Auditor

8. File – Audit Team Leader

February 26, 2013

The Supervising Auditor

Very truly yours,

ATTY. T’HASMIN M. ABDUL, CPA

ANNUAL AUDIT REPORT

For the Period Ended December 31, 2012

As a community that is morally, politically mature and economically progressive, where

To strengthen capability of local leaders in the fields of excellence in good governance

The mayors who had served the municipality were:

The elected officials for CY 2010-2013 were:

Mayor Hon. Mohammad Exchan Gabriel Limbona

The appointed department heads/ key official of the municipality were:

Municipal Treasurer Paganaebai Macaumbos

B. FINANCIAL AND OPERATIONAL HIGHLIGHTS

In CY 2012, the Municipality of Pantar generated total revenue of P37,905,466.60. These

C. SCOPE OF THE AUDIT

We have performed a Value-for-Money Audit on the operations of the Municipality of

E. COMMENTS AND OBSERVATIONS

2. Due from Officers and Employees account amounting to P738,056.76 remained

5. Correctness, reliability and existence of property, plant and equipment totaling

Create an appraisal / inventory committee to conduct actual physical inventory taking of

9. Had the implementation of the 20% Economic Development Fund amounting to

Management to intensify the implementation especially of livelihood programs by

F. STATUS OF IMPLEMENTATION OF PRIOR YEARS’

We made a follow-up on the action taken by the management of Municipality of Pantar,

Status of Implementation No. of Recommendation

STATE AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS

Hon. Mohammad Exchan G. Limbona

We have audited the accompanying financial statements of the Municipality of Pantar,

Management’s Responsibility for the Financial Statements

Our responsibility is to express an opinion on these financial statements based on our

Basis for Qualified Opinion

February 22, 2013

STATEMENT OF MANAGEMENT RESPONSIBILITY

judgment of management with an appropriate consideration of materiality.

In this regards, management maintains a system of accounting and reporting which

LIABILITIES AND EQUITY

(See Accompanying Notes to Financial Statements)

(See Accompanying Notes to Financial Statements)

(See Accompanying Notes to Financial Statements)

2. Basis of Financial Statements Preparation

3. Significant Accounting Principles

3.1 The municipality uses accrual basis of accounting as mandated. All

3.2 Plant, Property and Equipment are carried at historical cost.

4. Correction of Fundamental Errors

4.2 The amount shown as PY adjustment composed of disbursement out of

II. Balance Sheet

5.1 The Cash account includes:

6.1 Total receivables comprise:

Due from Officer & Employees - H. Dimalutang 738,056.76