REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT
REGIONAL OFFICE NO. VIII
LGAS C – Leyte II and Biliran Province
Provincial Satellite Auditing Office (PSAO)
Baybay City, Leyte

Team R8-03, Baybay City

AOM No. 2023-001

Date: July 3, 2023

AUDIT OBSERVATION MEMORANDUM (AOM)

For: HON. GERSON C. OLANTIGUE

Punong Barangay
Barangay Hinabay
Inopacan, Leyte

Attention: Georgia O. Paco

Barangay Treasurer

Nancy Clyte M. Abella- Lagario

Municipal Accountant

We have audited some of the Barangay transactions for Calendar Years 2020,
2021 and 2022, and observed the following deficiencies:

Overstated Due to LGU

1. Fully implemented projects with corresponding Fund Utilization Reports

(FURs) sourced from Financial Assistance from the LGU was not
recognized as income and not deducted from the Due to LGU account,
contrary to contrary to Section 111 (2) of Presidential Decree No. 1445 and
COA Circular No. 94-013 thus, the Due to LGU was overstated by
₱500,000,00, while income was understated by ₱496,604.83.

1.1. Section 111 (2) of PD 1445 provides that the highest standards of honesty,
objectivity and consistency shall be observed in the keeping of accounts to
safeguard against inaccurate or misleading information.

AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte

1.2. COA Circular No. 2015-009 dated December 1, 2015 prescribed the Revised
Chart of Accounts for LGUs to conform with the adoption of the Phil. Public
Sector Accounting Standard (PPSAS).

Due to LGUs
2-02-01-070
Credit

This account is used to record the receipt of funds for delivery of

goods/services as authorized by law, fund transfers from LGUs for the
implementation of specific programs or projects, share in LGU income and
other inter-agency transactions. Debit this account for delivery of
goods/services, liquidation of funds received, receipt of share in LGU income
and settlement of liabilities.

1.3. Review of the Due to LGUs account of the Barangay revealed that it has a
general ledger balance of ₱1,174,102.14 as of December 2022.

1.4. However, audit of transactions for CY 2020 to 2022 disclosed that projects
charged to Financial Assistance totaling ₱496,604.83 were already fully
implemented and with corresponding FURs submitted to the source agency as
follows:
Table 1. Fully Implemented Projects charged to FA with corresponding FURs
PPE/to be
Financial Disbursements recognized
Source Assistance Project as income
Amount
Particulars Amount
Construction of Materials and
LGU 247,558.40 247,558.40
250,000.00 Pathways (Going Labor
Inopacan
to Sitio Bairan) Returned FA 2,441.60  
Construction of Materials and
LGU Pathways (Going 249,046.43 249,046.43
250,000.00 Labor
Inopacan to Sitio Pandong
Bato) Returned FA 953.57  
Total 500,000.00     500,000.00 496,604.83

1.5. Since the purpose for which the funds were received has been completed or
implemented and a corresponding FUR for the same is submitted to the
source agency, income should be recognized and the corresponding FA
should be deducted from the Due to LGUs account.

1.6. Due to the noted deficiency, the Due to LGUs account was overstated by
₱500,000.00 while income was understated by ₱496,604.83, thus adversely
affecting the fair presentation of the year-end financial statements.

AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte

1.7. We recommend that the Municipal Accountant make a correcting entry
to deduct the amount of ₱500,000.00 to the Due to LGUs account and
recognize income of ₱496,604.83.

2.0. Cost of completed project still remained in Construction in Progress (CIP)

– Infrastructure Assets and were erroneously not recorded as PPE
amounting to ₱361,995.00 and ₱48,175.00 respectively, contrary to COA
Circular No. 2015-009 dated December 1, 2015, and Philippine Public
Sector Accounting Standards, thus the affected account balances in the
financial statements are deemed unreliable.

2.1. COA Circular No. 2015-009 dated December 1, 2015 prescribed the Revised
Chart of Accounts for LGUs to conform with the adoption of the Phil. Public
Sector Accounting Standard (PPSAS).

Construction in Progress-Infrastructure Assets

1-07-10-020
Debit

This account is used to record the accumulated cost or other appropriate

value of infrastructure assets which are still in the process of construction or
acquisition. Credit this account for reclassification to the appropriate
Infrastructure Asset account upon completion.

2.2. The Philippine Application Guidance (PAG) to Philippine Public Sector

Accounting Standards (PPSAS) 17 provides the guidelines on the recognition of
depreciation, methods of depreciation, determination of depreciable amount,
residual value and useful life of PPE. PAG 3 provides the following guidelines
on initial recognition of depreciation: Depreciation of an asset begins when it is
available for use as when it is in the location and condition necessary for it to be
capable of operating in the manner intended by management. For simplicity and
to avoid proportionate computation, depreciation shall be for one month if the
PPE is available for use on or before the 15 th of the month. However, if the PPE
is available for use after the 15th of the month, depreciation shall be for the
succeeding month.

2.3. Review of implementation of projects funded by LGU revealed that of the

project already completed with a total amount of ₱410,170.00 , the amount of
₱361,995.00 still remained under CIP - Infrastructure Assets and were not
reclassified to its proper PPE account while the amount of ₱48,175.00 were
erroneously not recorded as PPE. Details shown in table 2.

Table 2. List of completed projects with amounts that remained in CIP and not recorded as PPE
Amount
Project Date Particulars Recoded as not recorded as Total
CIP PPE Account
Rehabilitation of 5/20/202 Labor 48,175.00 48,175.00
Water System 1
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
 Project Date Particulars Amount Total

(20% DF)   Materials 361,995.00   361,995.00

TOTAL 361,995.00 48,175.00 410,170.00

2.4. Since the aforementioned completed projects which still form part of the CIP
accounts at year end were not reclassified to the appropriate PPE accounts and
some capitalizable cost were not recorded as PPE, depreciation expense was
also not recognized during the years these were utilized. Depreciation needs to
be provided because an asset is bound to undergo wear and tear over a period
of time. The working capacity and effectiveness of the asset is reduced due to
passage of time.

2.5. The above-noted omissions of the Municipal Accountant resulted in

misstatements of some PPE accounts and Depreciation Expenses, thus,
affecting their fair presentation in the financial statements as of December 31,
2022.

2.6. We recommend that the Municipal Accountant prepare the Journal

Entries to reclassify the noted CIP - Infrastructure Assets to their proper
PPE accounts and to record as PPE the unrecorded costs of the completed
projects.

2.7. Moving forward, we recommend that the Municipal Accountant

recognize the appropriate depreciation expense of the LGU’s assets from
the times these are acquired or completed.

Erroneous recording for Distribution of Relief/Welfare Goods

3. The reports on the distribution of various relief goods to the

families/household affected by calamities charged to the Local Disaster
Risk Reduction Management Fund for the CY 2020 and 2021 amounting
to ₱43,235.00 and ₱23,400.00, respectively, were erroneously recorded as
Food Supplies Expense instead of Welfare Goods for Distribution upon
initial recording and Welfare Goods Expense upon distribution contrary
to Sections 2 and 4 of Presidential Decree (P.D.) No. 1445 and COA
Circular No. 2015-009 dated December 1, 2015, thus, the propriety of the
program could not be ascertained while the accounts Welfare Goods
Expense and Food Supplies Expense were misstated for CY 2020 and
2021.

3.1 Section 2 of P.D. 1445 states that:

“It is the declared policy of the State that all resources of the
government shall be managed, expended or utilized in accordance with law
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
 and regulations, and safeguard against loss or wastage through illegal or
improper disposition, with a view to ensuring efficiency, economy and
effectiveness in the operations of government. The responsibility to take care
that such policy is faithfully adhered to rests directly with the chief or head of
the government agency concerned.”

3.2 While Section 4 of P.D. 1445 provides, that financial transactions and
operations of any government agency shall be governed by certain
fundamental principles. Paragraph 6, thereof, states that claims against
government funds shall be supported with complete documentation.

3.3 Moreover, COA Circular No. 2015-009 dated December 1, 2015 prescribed
the Revised Chart of Accounts for LGUs to conform with the adoption of the
Phil. Public Sector Accounting Standard (PPSAS). On recording of expenses,
the following accounts were prescribed to be used by LGUs:

Welfare Goods for Distribution

1-04-02-020
Debit

This account is used to record the cost of goods for distribution to people
affected by calamities/disasters/ground conflicts such as canned goods,
blankets, mats, kitchen utensils, flashlights and other similar items. Credit
this account for issuance to end-users, transfers or write-down.
Welfare Goods Expenses
5-02-03-060
Debit

This account is used to record the cost of goods issued/distributed to people

affected by calamities/disasters/ground conflicts such as canned goods,
blankets, mats, kitchen utensils, flashlights and other similar items. This also
includes the cost of food served to people affected by
calamities/disasters/ground conflicts.
Food Supplies Expense
5-02-03-050
Debit

This account is used to record the cost of food issued to

hospital/rehabilitation patients, jail inmates and the like.

3.4 Audit of disbursements in CYs 2020-2022 disclosed that the Barangay

procured a total of ₱66,635.50 goods for distribution paid from the BDRRMF.
Details on the purchase of various relief goods in response to COVID-19 and
victims of Typhoon Odette charged to the Local Disaster Risk Reduction
Management Fund are as follows:
Table 3. Food Items and Other Relief Goods

AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte

 Check
Date Relief Goods Amount
No.
0493742 3/18/20 10 Sacks of Rice- P19,450.00; ₱43,235.00

5 boxes of noodles (beef)-

P3,275.00;

5 boxes of young’s Town-

P9,450.00;

3 boxes of Kopiko Coffee-

P8,600.00; and

3 boxes of sabon (Champion)-

P2,460.00
'0556066 12/24/21 8 sacks of Rice- P16,800.00; ₱23,400.00

200 pcs of Tinapa/sardines-

P4,000.00; and

4 boxes of noodles- P2,600.00

GRAND TOTAL ₱66,635.00

3.5 Perusal of the submitted documents related to the distribution of the purchased
relief goods revealed that upon procurement, a total of ₱66,635.00 was
erroneously recorded as Food Supplies Expense instead of Welfare Goods for
Distribution upon initial recording and Welfare Goods Expense upon
distribution.

3.6 The erroneous entry of expense in the books resulted in the following
misstatements:
Table 4. Misstatements
Account Understatement Overstatement
Food Supplies Expense - ₱43,235.00
(2020)
Welfare Goods Expense ₱43,235.00 -
(2020)
Food Supplies Expense ₱23,400.00
(2021)
Welfare Goods Expense ₱23,400.00
(2021)
TOTAL ₱66,635.00 ₱66,635.00

3.7 We recommend that the Municipal Accountant direct the Bookkeeper

record issuances of relief goods not as Food Supplies Expense but as
Welfare Goods Expense.
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
Non-disclosure of LDRRMF to the Notes to FS

4. There was no disclosure in the Notes to Financial Statements pertaining

to the amount and details of the unexpended balance of Local Disaster
Risk Reduction Management Fund (LDRRMF) as of December 31, 2022
amounting ₱485,644.75 despite the materiality and significance of such
amount in barangay level, contrary to COA Circular No. 2012-002 dated
September 12, 2012, thus significant information of value to users of
financial statements was not provided.

4.1. COA Circular 2012-002 dated September 12, 2012 was issued to prescribe
accounting and reporting guidelines for the LDRRMF of LGUs (including
BLGUs) and NDRRMF given to LGUs and Receipts from other sources.

4.2. Whereas, Section 5.1.16 of the same Circular states “The amount and details
of the unexpended balance of LDRRMF shall be discussed in the Notes to
Financial Statements”. A sample of disclosure was attached as Annex D of
the same circular.

4.3. Verification of amounts presented in the Annual Budget and Supplemental

Budgets prepared for Calendar Years 2020, 2021 and 2022, it was disclosed
that the Barangay appropriated the amounts of ₱86,099.74, ₱92,731.60, and
₱120,653.40, respectively. Moreover, Report showing the balances and list of
utilizations made in CY 2020, 2021 and 2022 submitted by the Barangay
Bookkeeper based on the RAO of the Barangay, states that the unexpended
BDRRMF balance as of December 31, 2019 amounted to ₱252,795.01. Details
are shown in Table 5.

Table 5. BDRRMF balance

Particulars Amount
  2020 2021 2022
Beginning Balance 252,795.01 295,659.75 364,991.35
Current Appropriation 86,099.74 92,731.60 120,653.40
Actual Expenses 43,235.00 23,400.00  
Balance as of year-end 295,659.75 364,991.35 485,644.75

4.4. As can be seen in Table 3, the Barangay Local Government Unit of Hinabay,
Inopacan, Leyte still has a significant amount of unexpended BDDRMF
balance of ₱485,644.75 as of December 31, 2022. However, review of the
Notes to Financial Statements disclosed that amount and details of the
unexpended balance of LDRRMF were not discussed.

4.5. The Notes failed to disclose the amount available, utilized and balances during
the four-year period under audit, CYs 2020, 2021 and 2022. The balance
should have been discussed in a detailed manner so as to give additional value
to the financial statements.
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
4.6. We recommend that the Barangay Bookkeeper and Municipal
Accountant disclose the amounts in the succeeding Notes to Financial
Statements to show the details of the unexpended balance of the
BDRRMF.
Incomplete LDRRMF Investment Plan

5. Prior year’s unexpended DRRMF were not transferred to the Special

Trust Fund nor was included in the LDRRMF Investment Plan for CYs
2020, 2021, and 2022, contrary to Sections 4.4 and 5.1.2 of COA Circular
2012-002, thus, the funds were left idle in the bank and the objectives of
the fund were not attained.

5.1. Section 4.4 of COA Circular 2012-002 states “The unexpended LDRRMF
shall accrue to a special trust fund solely for the purpose of supporting disaster
risk reduction and management activities of the Local Disaster Risk Reduction
Management Council (LDRRMC) within the next five years. The
LDRRMCs shall decide on the use of the unexpended balance of
LDRRMF which shall be incorporated in the Local Disaster Risk
Reduction Management Fund Investment Plan.”

5.2. Whereas, Section 5.1.2 of the same circular states, “A LDRRMFIP for the
DRRM program shall be prepared annually. It shall present the 30%
allocation for QRF in lump sum and the allocation for disaster mitigation,
prevention and preparedness with details as to projects and activities to be
funded. The LDRRMFIP shall also include a separate caption, the list of
projects and activities charged to the unexpended LDRRMF of previous
years.”

5.3. Upon examination of the LDRRMF Investment Plan attached to the Annual
Budget, it was observed that the LDRRMF Investment Plan only included the
items/activities intended to be undertaken/procured out of the current year’s
budget. Also, it was noted that in every Supplemental Budget, a separate
LDRRMF Investment Plan was prepared to identify how the additional funds
will be used, but none was made for the unexpended balances of prior years.

5.4. As previously seen in Table 3 presented in Observation No. 2, the Barangay

Local Government had a balance of ₱252,795.01 out of its prior year’s
LDRRM as of December 31, 2019 but the Statement of Financial Position of
the barangay showed a Trust Liabilities balance of zero denoting that the
portion of ₱252,795.01 which represented the unused 70% Mitigation Fund-
MOOE and 30% QRF was not recorded under Trust Liability – DRRM and
was not transferred to the Special Trust Fund. The same observations were
noted for CYs 2020, 2021, and 2022. Consequently, the unexpended balances
of prior years’ cannot be used in the absence of the LDRRMFIP which should
have indicated the PPAs for which said prior years’ balances will be used for.

AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte

5.5. While it is true that the BDRRM Council will decide on the use of the
unexpended balance of LDRRMF, the same should be reflected in the
LDRRMFIP. Moreover, the continued non-utilization of the unexpended
LDRRMF from previous years left the funds idle in the bank instead of using
the fund to improve the LGU’s capability on disaster mitigation, prevention
and preparedness, especially with the current surge of the COVID-19
pandemic.

5.6. We recommend that the Barangay Kagawad who is the Chairman of the
Committee on Appropriation (CCA), provide breakdown of the
₱252,795.01 BRRM Fund unexpended balance as of December 31, 2022
which should only include the unexpended balances for the past 5 years.

5.7. We also recommend that the Municipal Accountant thru her Designated
Bookkeeper record the prior year’s unused BDRRM Fund as Trust
Liabilities under Special Trust Fund, based on the amount provided by
the CCA.

5.8. Further, we recommend that the Punong Barangay, as Chairman of the

LDRRM Council, identify the project/s to be funded from the
unexpended BDRRM Fund of previous years, incorporate the same in the
LDRRMF Investment Plan and implement the project/s to fully equip the
Barangay and its residents in times of disasters.

Minimal Utilization of 70% Mitigation of 5% BDRRMF

6. The 70% Mitigation Fund of the Barangay Disaster Risk Reduction

Management Fund (BDRRMF) for CY 2020 to 2022 totaling ₱209,639.32
were not utilized, contrary to Section 2 (e) of RA 10121, thus, the fund
was not fully maximized to respond and address the existing state of
calamity and the capability of the barangay and its residents to cope with
adverse effects of disasters was neither strengthened nor enhanced.

6.1. Section 2 (e) of RA 10121 provides:

SEC. 2 Declaration of Policy. – It shall be the policy of the State to:

xxx

(e) Develop, promote, and implement a comprehensive National

Disaster Risk Reduction and Management Plan (NDRRMP)
that aims to strengthen the capacity of the national
government and the local government units (LGUs), together
with partner stakeholders, to build the disaster resilience of
communities, and' to institutionalize arrangements and
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
 measures for reducing disaster risks, including projected
climate risks, and enhancing disaster preparedness and
response capabilities at all levels;

6.2. Item 4.0, paragraph 2 of NDRRMC, DBM, and DILG Joint Memorandum
Circular No. 2013-1 dated March 25, 2013 states that the LDRRMF shall
cover the thirty percent (30%) lump-sum allocation for Quick Response Fund
(QRF) and the seventy percent (70%) allocation for disaster prevention and
mitigation, preparedness, response, rehabilitation and recovery.

6.3. COA Circular No. 2012-002 on Accounting and Reporting Guidelines of the
Local Disaster Risk Reduction and Management Fund (LDRRMF) of the
Local Government Units dated September 12, 2012 provides these relevant
provisions, to wit:

5.1.2 A LDRRMFIP for the DRRM program shall be prepared

annually. It shall present the 30% allocation for QRF in lump-
sum and the allocation for disaster mitigation, prevention and
preparedness with details as to projects and activities to be
funded. The LDRRMFIP shall also include under a separate
caption, the list of projects and activities charged to the
unexpended LDRRMF of previous years. Xxx.

6.4. Barangay Hinabay appropriated annually 5% of its estimated revenue from

regular sources for disaster risk management activities in CYs 2020-2022 in
accordance with Section 21 of Republic Act No. 10121. The composition of
the BDRRMF for the said period is shown in Table 6.

Table 6. BDRRMF for CY 2018-2022

PPA CY 2020 CY 2021 CY 2022
30% QRF 25,829.92 27,819.48 36,196.02 89,845.42
70% Mitigation Fund 60,269.82 64,912.12 84,457.38 209,639.32
Total BDRRM Fund 86,099.74 92,731.60 120,653.40 299,484.74
Utilization:      
30% QRF (43,235.00) (23,400.00) (66,635.00)
70% Mitigation Fund  
Balance 42,864.74 69,331.60 120,653.40 232,849.74

6.5. The 30% QRF were rightfully utilized in CY 2020 and 2021 in response to the
incurrence of various calamities due to COVID-19 and Typhoon Odette.

6.6. Our audit showed that the BDRRM Fund Investment Plan (BDRRMFIP) was
prepared for CYs 2020, 2021 and 2022. However, there was no monitoring
made by the BDRRM Council on the programs and projects to be
implemented for BDRRM. This resulted in the non-implementation of
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
 projects, programs and activities identified in the BDRRMFIP. There was
also no evaluation on the implementation of the PPAs included in the
BDRRMFIP if these were still implementable on the year they were proposed.

6.7. The Audit Team also noted that the 70% Mitigation Fund for CY 2020 to 2022
were not utilized totaling ₱209,639.32. The BDRRMFIP was also not revised
during the year. On the other hand, the CY 2022 BDRRM Fund totaling
₱120,635.40 were not utilized despite the presence of the COVID-19
pandemic.

6.8. With the foregoing conditions it is clear that the lack of monitoring and
evaluation on the implementation of the BDRRM Plan, contributed to the low
utilization and implementation of projects in the 5% BRRM Fund. Thus, the
5% BRRM Fund was not fully maximized to respond and address the existing
state of calamity due to COVID-19 and the capability of the barangay and its
residents to cope with adverse effects of disasters was not strengthened nor
enhanced.

6.9. We recommend that the Punong Barangay and the Barangay Disaster
Risk Reduction Management Officer:

a. Monitor and evaluate the Programs/Projects/Activities

incorporated in the BDRRMFIP so as to avoid duplication of
programs and make room to projects that can address the current
state of calamity or any calamity that may possibly arise. Revise
the Plan, if necessary and still indicate specific timeframes;

b. Utilize the current year’s 5% LDRRM Fund in accord with the

approved BDRRM Investment Plan to ensure that their
utilizations are well-planned and duly authorized by the BDRRM
Council; and

c. Implement the projects, programs and activities (PPAs) identified

in the BDRRMF Investment Plan during the year to ensure full
utilization of the BDRRM Fund.

20% Development Fund

7. Balances from prior years completed programs and projects totaling

₱71,415.45 were not reverted and re-appropriated in CY 2022, contrary
to Section 322 of Republic Act No. 7160, hence, the Barangay was
deprived of additional funding for other important PPAs while
constituents were deprived of the benefits that could been derived had the
amount was re-appropriated.
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
7.1. Section 322 of the Philippine Local Government Code provides:

SECTION 322. Reversion of Unexpended Balances of

Appropriations, Continuing Appropriations. - balances of
appropriations authorized in the annual appropriations ordinance
shall revert to the surplus of the general fund at the end of the fiscal
year and shall not thereafter be available for expenditure except by
subsequent enactment. However, appropriations for capital outlays
shall continue and remain valid until fully spent, reverted or the
project is completed. Reversions of continuing appropriations shall
not be allowed unless obligations therefor have been fully paid or
otherwise settled.

The balances of continuing appropriations shall be reviewed as part

of the annual budget preparation and the Sanggunian concerned may
approve, upon recommendation of the local chief executive, the
reversion of funds no longer needed in connection with the activities
funded by said continuing appropriations subject to the provisions
of this Section. (emphasis supplied)

7.2. Evaluation of the Annual and Supplemental Budgets of Barangay Hinabay,

Inopacan, Leyte disclosed that the Barangay appropriated the total amount of
₱1,265,799.05 as 20% Development Fund for CYs 2020-2022. Breakdown of
the appropriation is shown in Table 7.

Table 7. 20% DF Appropriation for CYs 2020-2022

Appropriation
Calendar Program/ Project
Year Activity/ Description Annual Supplemental
Total
Budget Budget
Rehabilitation of Brgy.
₱310,000.00 ₱ (283,201.05) ₱ 26,798.95
Road
2020 Food Supplies Expense ₱ 0.00 ₱75,000.00 ₱75,000.00
Other Supplies and
85,000.00 85,000.00
Materials Expense
Isolation Rooms 150,000.00 150,000.00
2021 Rehabilitation of Water
330,000.00 124,786.50 454,786.50
System
2022 Rehabilitation of
440,000.00 33,613.60 473,613.60
Brgy. Road (Sitio Bud)
TOTAL ₱1,080,000.00 ₱ 185,199.05 ₱1, 265,199.05

7.3. Further, review of the project implementation and utilization of the same fund,
the Audit Team positively noted that the four identified projects of the
barangay as priority projects for CYs 2020-2022 were all implemented as of
December 31, 2021. Out of the ₱1,265,199.05 appropriation, only
₱1,053,389.90 was utilized hence, leaving a savings of ₱120,049.05 out of the
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
 6 projects. Details of utilization and implementation are shown in Table 8
while comparison of appropriation and disbursements are shown in Table 9.

Table 8. Utilization of 20% DF in CY 2018-2021

Check Check Gross Check
Payee Project
Date No. Amoun Amount
Supplies and
Hilongos Installation materials for
06/25/202 121,681. 115,162.
0493759 Pacific General Rooms installation of
0 00 37
Merchandise Isolation
Room
Labor for
06/25/202 Georgia O. Installation of 20,150. 20,150.
0493763
0 Paco Isolation 00 00
Room
Materials for
Hilongos
06/25/202 Kitchen Tools Installation of 76,408. 72,315.
0493762 Pacific General
0 for Isolation Isolation 90 16
Merchandise
Room Room
Labor for
05/18/202 Georgia O. Rehabilitatio 48,175. 48,175.
0555975
1 Paco Rehabilitation n of Water 00 00
of Water System
System Materials for
Hilongos
05/20/202 Rehabilitatio 361,995. 342,602.
0555980 Pacific General
1 n of Water 00 40
Merchandise
System
Labor payroll
of concreting
10/19/202 Georgia O. 101,500. 101,500.
0613463 Concreting of of Brgy.
2 Paco 00 00
Brgy. Road Road (Sitio
(Sitio Bod) Bod)
Materials for
Hilongos
11/02/202 concreting of 323,480. 306,150.
0613469 Pacific General
2 Brgy. Road 00 72
Merchandise
(Sitio Bod)
₱1,053,389.9 ₱1,006,055.6
GRAND TOTAL
0 5

Table 9. Appropriation vs. Project Cost

Calendar Project Cost/
Project Appropriation Savings Remarks
Year Utilization
2020 Food Supplies
₱75,000.00   ₱75,000.00 Unutilized
Expense

Other Supplies
and Materials ₱85,000.00 ₱76,408.90 ₱8,591.10 Unutilized
Expense
Isolation ₱150,000.00 ₱141,831.00 ₱8,169.00 Unutilized
Rooms

AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte

Calendar Project Cost/
Project Appropriation Savings Remarks
Year Utilization
Rehabilitation
of Water
System ₱26,798.95   ₱26,798.95 Unutilized
(Supplemental
Budget)
Reappropriated to
Rehabilitation of
Sub-Total (2020) ₱336,798.95 ₱218,239.90 ₱118,559.05 Water System for CY
2021 amounting to
₱91,760.10

Rehabilitation ₱330,000.00 ₱330,000.00 ₱0.00 Utilized

2021
of Water
System ₱91,760.10 ₱80,170.00 ₱11,590.10 Unutilized
  ₱33,026.40   ₱33,026.40 Unutilized
No reappropriation
Sub-Total (2021) ₱454,786.50 ₱410,170.00 ₱44,616.50 for CY 2022 (Savings
as of December 2021)

Rehabilitation 440,000.00 424,980.00 ₱15,020.00 Unutilized

2022 of Brgy. Road
(Sitio Bud)
33,613.60   ₱33,613.60 Unutilized
Sub-Total (2022) 473,613.60 424,980.00 ₱48,633.60  
           
Reappropriation for
Savings for CY 2020 ₱118,559.05 ₱91,760.10 ₱26,798.95 CY 2021 amounting to
₱91,760.10
Savings for CY 2021 ₱44,616.50   ₱44,616.50  
Savings for CY 2022 ₱48,633.60   ₱48,633.60  
Total Savings ₱211,809.15 ₱91,760.10 ₱120,049.05  

7.4. As can be seen in Table 8, savings totaling ₱71,415.45 was made out of the
implementation of the three completed priority projects under 20%
Development Fund as of December 31, 2021. Since the projects are already
completed, the amount of ₱71,415.45 could have been reverted/ re-
appropriated in CY 2022 to other 20% DF PPAs.

7.5. Since balances from previously completed projects was not re-appropriated
and remained unutilized, the Barangay was deprived of additional funding for
other important PPAs while constituents were deprived of the benefits that
could been derived had the amount was appropriated.

7.6. We recommend that the Punong Barangay and Barangay Treasurer re-
appropriate the balances of completed projects amounting ₱120,049.05 as

AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte

 of December 31, 2022, to other PPAs so that funds are utilized to its
optimum to help achieve the desirable socio-economic development and
environmental outcomes of the LGU.

8. Programs and activities to address the concerns of senior citizens and

persons with disabilities were not implemented, as required in DBM-
DSWD Joint Circular No. 2003-01, thus the Barangay was not able to
support the needs of the elderly and person with disabilities in their
locality

8.1. DBM-DSWD Joint Circular No. 2003-001 dated April 28, 2003 was issued to
prescribe guidelines for the implementation of Section 29 of the General
Appropriations Act of 2003 which states that the plans, programs and projects
intended to address the concerns of senior citizens and persons with disability
shall be integrated in the regular activities of the agencies. Sections 4.2 and
4.3 thereof directs all government agencies, departments, bureaus, offices,
commissions and state universities and colleges to allocate at least one
percent (1%) of their respective budget to be utilized in the implementation of
programs/projects/activities/services which will address the needs of older
persons and persons with disabilities (PWDs).

8.2. Our perusal of the Annual Budgets of the barangay disclosed that there was no
appropriation for Senior Citizens and PWDs for CY 2019 and 2020 while a
total of ₱38,500.00 were appropriated for programs and activities for the
periods 2021 & CY 2022 as shown in Table 12.

Table 12. Fund for Senior Citizens and PWDs Programs/Projects

Appropriation (should be
Year Estimated IRA 1% of IRA)
2020 1,580,000.00 -
2021 1,650,000.00 16,500.00
2022 2,200,000.00 22,000.00
Total 38,500.00

8.3. However, review of the disbursements of the Barangay in CY 2020 to CY

2022 disclosed that no expenses were made for the implementation of the
programs, projects, activities and services intended for the elderly persons and
PWDs. Consequently, during these periods, the concerns of the total well-
being of elderly persons and PWDs were not provided.

8.4. We recommended that the Punong Barangay include in its annual

programs, activities that will benefit the well-being of Elderly Persons and
PWDs in the Barangay, the cost of which should be at least one percent
(1%) of their respective budget and ensure its implementation.
AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte
 May we have your comments on the foregoing audit observations within five
(5) calendar days from receipt hereof.

MA. SHIELA T. ELMIDO

State Auditor II
OIC- Audit Team Leader

SANTIAGO P. SEÑASE
State Auditor IV
OIC-Supervising Auditor

Proof of Receipt of AOM:

Hon. GERSON C. OLANTIGUE

Punong Barangay
Date: _________________________

GEORGIA O. PACO
Barangay Treasurer
Date: ______________

NANCY CLYTE M. ABELLA- LAGARIO

Municipal Accountant
Date: ______________

AOM No. 2022-001 Brgy. Hinabay, Inopacan, Leyte