Republic of the Philippines COMMISSION ON AUDIT Commonwealth Avenue, Quezon City

ANNUAL AUDIT REPORT

on the

MUNICIPALITY OF TANUDAN

For the Year Ended December 31, 2011

Republic of the Philippines COMMISSION ON AUDIT Cordillera Administrative Region Audit Group I-Kalinga Bulanao, Tabuk City, Kalinga June 5, 2012 Hon. JOHNWELL W. TIGGANGAY Mayor Municipality of Tanudan Province of Kalinga S i r: We transmit herewith the Annual Audit Report on the Municipality of Tanudan for the year ended December 31, 2011 in compliance with Section 2, Article IX-D of the Philippine Constitution and Section 43 of Presidential Decree No. 1445. The audit was aimed to ascertain the propriety of financial transactions and compliance with prescribed rules and regulations. However, the Audit Team was not able to conduct a complete audit of transactions for the year due to the agencys failure to submit the required vouchers, reports and year-end financial statements. The report consists of four parts: Part I State Auditors Report on the Financial Statements; Part II - Comments and Observations; Part III - Status of Implementation of Prior Years Audit Recommendations; and Part IV Annexes. The comments and observations were discussed in an exit conference held on May 29, 2012 with concerned Management officials and staff whose comments were incorporated in the report where appropriate. We request that the comments and observations contained in the said report be fully addressed and we would appreciate being informed of the actions taken within 60 days from receipt hereof, pursuant to Section 95 of the General Provisions of Republic Act No. 10147, otherwise known as the General Appropriations Act of 2011. We acknowledge with thanks the cooperation extended to the audit team by the officials and staff of that agency. Very truly yours, LEAH S. DAGUIO Supervising Auditor

EXECUTIVE SUMMARY
A. Introduction By virtue of Executive Order No. 42, dated June 25, 1963, Tanudan became a regular municipality and has sixteen (16) Barangays. It has a total personnel complement of 59 composed of elected and regular officials and employees headed by Honorable Johnwell W. Tiggangay. B. Scope of Audit The audit was limited only to transactions covering January to May 2011 due to the failure of management to submit vouchers, reports and financial statements from June to December 2011. C. State Auditors Report on the Financial Statements We could not render an opinion on the fairness of presentation of the financial statements due to the above-stated failure of the agency to submit the financial statements, reports and paid vouchers. D. Significant Comments and Observations 1. Financial reports, disbursements vouchers, official receipts and other transaction documents were not submitted, delayed or incomplete in violation of existing laws, thereby hampering the timely conduct of validation and substantive tests necessary to ascertain the validity, propriety and accuracy of transactions of the municipality. We have recommended that the Local Chief Executive (LCE): (a) require the Acting Municipal Accountant and other officials concerned to strictly adopt necessary measures to ensure compliance with existing laws and regulations for the timely submission of reports of the LGUs transactions; and (b) consider the hiring of a new accountant who can efficiently perform the job.

E. Settlement of Accounts

Unsettled suspensions, disallowances and charges 10,200,000.00, 582,305.21 and 4,127.00, respectively.

amounted

to

We have recommended that management notify persons determined liable for the amounts disallowed and exert efforts to locate the copies of NS, ND and NC issued to support the recorded disallowances as well as the reported suspensions and charges for further action to be made. F. Status of Implementation of Prior Years Audit Recommendations Out of the 17 prior years audit recommendations embodied in the 2010 Annual Audit Report, 7 were partially implemented and 10 were not implemented during the year. The non-implementation of the audit recommendations had somewhat affected the agencys performance and operations.

TABLE OF CONTENTS Part I - Financial Statements - State Auditors Report on the Financial Statements Part II - Comments and Observations - Financial and Compliance Audit - Settlement of Accounts Part III - Status of Implementation of Prior Years Audit Recommendations Part 1V - Annexes A Last and final tracer dated February 20, 2012 B Final tracer dated January 27, 2012 C AOM No. 11-007 dated September 28, 2011 6 2 4 1 Page

PART I FINANCIAL STATEMENTS

PART II COMMENTS AND OBSERVATIONS

PART III STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT RECOMMENDATIONS

PART IV ANNEXES