05-Buenavista2022 Part1-Auditor's Report

INDEPENDENT AUDITOR’S REPORT
HONORABLE DAVE D. DUALLO

Municipal Mayor
Local Government Unit of Buenavista, Bohol
Qualified Opinion
We have audited the financial statements of the Municipality of Buenavista, Bohol which
comprise the Statement of Financial Position as at December 31, 2022, and the Statement of
Financial Performance, Statement of Changes in Net Assets/Equity, Statement of Cash Flows and
Statement of Comparison of Budget and Actual Amounts for the year then ended, and Notes to
the Financial Statements, including a summary of significant accounting policies.
In our opinion, except for the effects of the matter described in the Basis of Qualified Opinion
section of our report, the accompanying financial statements present fairly, in all material
respects, the financial position of the Municipality of Buenavista, Bohol as of December 31, 2022
and its financial performance, its cash flows, and its comparison of budget and actual amounts for
the year then ended in accordance with International Public Sector Accounting Standards
(IPSASs).
Basis for Qualified Opinion
1. The existence, completeness and condition of the Property, Plant and Equipment (PPE)
totaling ₱353,792,224.12 (net of depreciation) could not be ascertained due to non-completion
on the conduct of one-time cleansing by the LGU as required under COA Circular No. 2020-
006, thereby casting doubt on the validity and accuracy of the year-end account balance.
2. Unserviceable properties were not yet disposed due to the failure of the Inventory/Disposal
Committee to effect the disposal procedures as provided in Section 79 of Presidential Decree
(PD) 1445 and COA Circular No. 2020-006, thus overstating the Property, Plant & Equipment
(PPE) as of December 31, 2022 and depriving the LGU with additional income had these been
disposed of.
3. Infrastructure Projects were not reclassified/recorded to the proper Property, Plant and
Equipment (PPE) accounts upon completion contrary to Paragraph 14 of the International
Public Sector Accounting Standards (IPSAS) 17 and Section 50, Volume 1 of the Manual on
the New Government Accounting System (NGAS) For Use in Local Government Units
(LGS), thus, understating the PPE accounts while the related depreciation expenses were not
recognized.
4. Infrastructure projects with net book values totaling ₱4,130,429.47 which were destroyed by
Typhoon Odette are still included under the Property, Plant and Equipment (PPE) and no
request for relief from accountability for these destroyed projects were processed contrary to
Section 151 of COA Circular 92-386 dated October 20, 1992 and Section 73 of P.D. 1445,
thus, overstating the PPE accounts of the municipality.
1
5. Discounts on Real Property Tax and Special Education Tax were not recognized in the books
in violation of Section 22 of New Government Accounting System Manual for LGUs Volume
I, thus overstating the Real Property Tax/Special Education Tax Receivable account and
Deferred Income account thereby affecting the fair presentation of the financial statements.
We conducted our audit in accordance with International Standards of Supreme Audit Institutions
(ISSAIs). Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the agency in accordance with the ethical requirements that are relevant to our
audit of the financial statements, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IPSASs, and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
Those charged with governance are responsible for overseeing the LGU’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
COMMISSION ON AUDIT
By Authority of the Chairperson:
Very truly yours,
JOVIE M. BALIO
State Auditor IV
OIC- Audit Team Leader
Date: February 28, 2023

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INDEPENDENT AUDITOR’S REPORT

HONORABLE DAVE D. DUALLO

Basis for Qualified Opinion

Auditor’s Responsibilities for the Audit of the Financial Statements

Very truly yours,

Date: February 28, 2023

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