Republic of the Philippines

Province of Davao del Sur

Municipality of Padada

MUNICIPAL ACCOUNTING OFFICE

March 10, 2023

ALMA C. RENEGADO
State Auditor IV
Supervising Auditor
Provincial Satellite Auditing Office
Capitol Compound, Matti, Digos City

Thru: ANDY JAYSON T. NAHINE

State Auditor II
Audit Team Leader

Madam:

This has reference to your Audit Observation Memorandum (AOM) No.2023-001

dated January 18,2023 with the following audit observations:

The Municipality did not submit to COA the Agency Action Plan and Status of
Implementation (AAPSI)report, contrary to Section 91 of RA 11518 (General
Appropriations Act for CY 2021) thus, the extent of compliance and action/s taken by
the Local Government Unit to implement the audit recommendations in the 2021
Annual Audit Report were not fully ascertained at year-end.

Please be advised that the management will formulate an action plan to implement
the audit recommendations. In line with this, the management has appointed the OIC-
Municipal Accountant as the new focal point person to coordinate with all the
departments concerned to collect/collate/consolidate the report and submit to COA
within the deadline set.

Rest assured that the management will immediately submit the duly accomplished
AAPSI form to the Audit team as soon as it becomes available.

Thank you very much and more power.

ERWIN APRIL C. MIDSAPAK

OIC-Municipal Accountant

FRANCISCO L. GUERRERO, JR., LPT, MPA

Municipal Mayor
 Republic of the Philippines
Province of Davao del Sur
Municipality of Padada

OFFICE OF THE MUNICIPAL MAYOR

March 6, 2023

ALMA C. RENEGADO
State Auditor IV
Supervising Auditor

Thru: ANDY JAYSON T. NAHINE

State Auditor II
Audit Team Leader

Madam:

This has reference to your Audit Observation Memorandum (AOM) No.2023-003

dated January 31,2023 with the following audit observations:

The LGU - Padada did not strictly enforce the control over the grant and
liquidation of cash advances as prescribed in Section 89 of Presidential Decree No.
1445 and pertinent provisions of COA Circular Nos. 97-002, 2012-001, thereby resulted
in the unliquidated cash advances totaling toP1,728,996.82 as at December 31, 2022.

Please be advised that the management will comply with the audit recommendation.
In this connection, the management, through the OIC-Municipal Accountant will inform
and require all the officers/employees concerned to prepare and submit immediately the
Liquidation Report form to the accounting unit in order to enforce the immediate
liquidation of unliquidated cash advances otherwise, the management will be
constrained to institute administrative sanctions such as but not limited to the suspension
of salary until full liquidation has been made.

Moreover, the undersigned have already instructed the OIC-Municipal Accountant in

coordination with the Acting Municipal Treasurer to strictly allow grants of cash
advances to officers/employees only after previous cash advance given is first settled or a
proper accounting thereof is made. Finally, the management will designate personnel
from the accounting office to closely monitor the granting of cash advances to
officers/employees and their subsequent liquidation, especially when it is close to year-
end

Thank you and more power.

ERWIN APRIL C. MIDSAPAK

OIC-Municipal Accountant

FRANCISCO L. GUERRERO, JR.

Municipal Mayor
 Republic of the Philippines
Province of Davao del Sur
Municipality of Padada

OFFICE OF THE MUNICIPAL MAYOR

March 6, 2023

ALMA C. RENEGADO
State Auditor IV
Supervising Auditor

Thru: ANDY JAYSON T. NAHINE

State Auditor II
Audit Team Leader

Madam:

This has reference to your Audit Observation Memorandum (AOM) No.2023-006

dated February 15, 2023 with the following audit observations:

The non-submission of the Report on the Physical Count of Property Plant and
Equipment (RPCPPE) and the inclusion of items below capitalization threshold of
P50,000.00 in the PPE accounts, contravened Sections 124 of New Government
Accounting System (NGAS) for LGUs and COA Circular No. 2022-004, thus raising
questions on the accuracy, completeness and existence of the said PPE accounts in the
amount of P305,334,089.57as they could not be relied upon, and resulting in the
overstatement/understatement for the misclassified PPE and other affected accounts in
the amount P17,056,774.65, as at year-end.

We wish to inform you that the management is amenable and will comply with the
aforementioned audit observation. In this light, the OIC-Municipal Accountant
manifested his commitment to prepare the necessary adjusting entries for the noted
deficiencies and reclassify all PPE items costing below the capitalization threshold of
P50,000.00 to the appropriate Expense account for items issued in the current year or
Prior Period Adjustments

In addition, the management already directed the Inventory Committee in close

coordination with the General Services Office and Municipal Accounting Office to cause
the complete conduct of the physical count of PPE.

Rest assured the management will immediately submit Report on the Physical
Count of Property Plant and Equipment (RPCPPE) after the completion of the physical
count of PPE.

Thank You and more power.

FRANCISCO L. GUERRERO JR., LPT, MPA

Municipal Mayor
 Republic of the Philippines
Province of Davao del Sur
Municipality of Padada

OFFICE OF THE MUNICIPAL MAYOR

March 3, 2023

ALMA C. RENEGADO
State Auditor IV
Supervising Auditor

Madam:

This has reference to your Audit Observation Memorandum (AOM) No.2023-13

dated February 22, 2023 with the following audit observations:

Procurement of goods totalling P1,705,526.17 were recorded in the books of

accounts as outright expenses instead of inventory account, contrary to Sections 114,
120 and 121 of the Manual on the New Government Accounting System (MNGAS)
for Local Government Units (LGU), thus resulted in the understatement of the
affected inventory account and overstatement of expense account.

We wish to inform you that the Management have designated a new Municipal
General Services Officer effective January 04, 2023. currently GSO is focused on the
physical inventory of Real Property Plant and Equipment under MGO- Padada
particularly on the procured supplies and materials for Goods to directly addressed the
afore-mentioned AOM. Hence, implementation of correct recording as to delienation of
stocks categorize as outright expenses instead of inventory account and the preparation of
Summary of Supplies and Materials Issued (SSMI ) together with the original copy of
Requisition and Issue Slip (RIS) to be submitted to the Municipal Accountant for the
proper disposition of the procured supplies.

With the collaborative effort, rest assured that we will do our best together with the
municipal accounting department to religiously adhere with your recommendations and
the GSO will implement the monthly indorsement of Report for Supplies and Materials
Issued (RSMI) within the prescribed period of submission.

Thank you and more power.

FRANCISCO L. GUERRERO JR., LPT, MPA

Municipal Mayor
 Republic of the Philippines
Province of Davao del Sur
Municipality of Padada

OFFICE OF THE MUNICIPAL MAYOR

March 3, 2023

ALMA C. RENEGADO
State Auditor IV
Supervising Auditor

Madam:

This has reference to your Audit Observation Memorandum (AOM) No.2023-07

dated February 15, 2023 with the following audit observations:

Despite prior years’ observation, Bank Reconciliation Statements were still not
regularly prepared monthly, contrary to Section 74 of the State Auditing Code of
the Philippines and COA Circular No. 96-011 preventing the timely verification of
the reports, thereby the accuracy of the reported balance of the Cash-in-Bank
account amounting to P50,554,175.00 as at year-end could not be ascertained.

Please be informed that the OIC-Municipal Accountant is in the process of preparing

the lacking monthly bank reconciliation statements. The delay in the submission is
attributed to the difficulty and set back in securing bank statements that is needed in the
preparation of said reports.

To address this perennial problem, the Local Government Unit is in the process of
enrolling LGU bank accounts to online banking facilities offered by the bank to access
account transaction history that will facilitate efficient preparation and submission of
monthly bank reconciliation statements.

In the meantime, we have already made a formal request to the bank for them to
furnish as with a copy of bank statements covering the aforementioned period to fast
track the preparation and immediate submission of said reports.

Thank you and more power.

FRANCISCO L. GUERRERO JR., LPT, MPA

Municipal Mayor
 Republic of the Philippines
Province of Davao del Sur
Municipality of Padada

OFFICE OF THE MUNICIPAL MAYOR

March 3, 2023

ALMA C. RENEGADO
State Auditor IV
Supervising Auditor

Madam:

This has reference to your Audit Observation Memorandum (AOM) No.2023-08

dated February 21, 2023 with the following audit observations:

The unexpended/unobligated balance of Quick Response Fund and Mitigation

Fund for CY 2022 totaling P6,102,327.65 was misclassified to Accounts Payable
account instead of Due to Other funds contrary to the revised chart of accounts
prescribed under COA Circular No. 2015-009, thereby resulting in the
understatement and overstatement of the affected accounts by the same amount