Findings No.1 COA Annual Audit Report 2005

July 25, 2008

1. The reliability and validity of the Property, Plant and Equipment balance of P1.604 Billion as of December 31, 2005 cannot be fully established due to the failure of the Physical Inventory Task Force to complete the physical inventory count. Read more

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Findings No.9 COA Annual Audit Report 2004

July 25, 2008

9. Other Deferred Credits Payable account is overstated by P208,261.50 while P2,893,680.50 has no subsidiary ledgers casting doubt on the correctness of the account. Read more

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Findings No.8 COA Annual Audit Report 2004

July 25, 2008

8. Slow implementation of development programs and/or projects that generate jobs and livelihood opportunities, resulting to the suspension of the immediate vital services and benefits that could have accrued to its constituency. Read more

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Findings No.7 COA Annual Audit Report 2004

July 25, 2008

7. The composition of Government Equity account reflecting a balance of P1,863,987,091.65 was not disclosed/established in the Notes to Financial Statements, casting doubts on the correctness and reliability of the financial statements. Read more

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Findings No.6 COA Annual Audit Report 2004

July 25, 2008

6. Purchases of supplies and materials were directly recorded as expenses instead of inventories contrary to Section 114, Volume I of the New Government Accounting System (NGAS). Likewise, the Auditor was notified of the deliveries made preventing him to verify the existence of the items. Read more

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Findings No.5 COA Annual Audit Report 2004

July 25, 2008

5. Granting of Hardship Allowance giving to several public schools teachers was not in accord with the special provisions of the General Appropriations Act of 2003, rendering the payments made in the sum of P300,132.08 irregular.

In the post-audit of transactions charged to special education fund disclosed payments of hardship allowance to locally funded public school teachers assigned in the remote areas, as follows:

PayeeParticularsDV. No.AmountBriones, Rey et.alHardship Allow.056 21,465.28 Abueva, Fe et.alHardship Allow.096 16,453.00 Abueva, Fe et.alHardship Allow.099 56,773.26 Briones, Rey et.alHardship Allow.117 9,654.40 Briones, Rey et.alHardship Allow.203 11,927.16 Briones, Rey et.alHardship Allow.205 10,814.02 Abueva, Fe et.alHardship Allow.232 61,750.02 Briones, Rey et.alHardship Allow.233 11,927.16 Briones, Rey et.alHardship Allow.283 11,927.16 Abueva, Fe et.alHardship Allow.287 38,172.51 Abueva, Fe et.alHardship Allow.327 14,977.59 Briones, Rey et.alHardship Allow.329 22,363.36 TotalP300,132.08

The special provisions of the 2003 General Appropriations Act provides entitlement of hardship allowance to public school teachers assigned to remote areas accessible only by hiking, animal ride or banca. There being no more public school in Iligan City located in remote areas accessible only by hiking, animal ride or banca, grant of said allowance is not proper.

Recommendation:

For want of legal basis and pending the resolution of the issue, henceforth, payment of hardship allowance to public school teachers shall be put to hold.

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Findings No.4 COA Annual Audit Report 2004

July 25, 2008

4. P44.361 Million appropriations intended for local development projects out of the 80% proceeds derived from National Wealth was not utilized during the year, depriving the city inhabitants of the benefits that could have accrued Read more

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Findings No.3 CAO Annual Audit Report 2004

July 25, 2008

3. The City Government, under the previous administration, had availed loan of P50 Million to fund various projects despite its sufficiency of cash, thereby incurring unnecessary expense of P1.650 Million for interest payment. Certainly, not in keeping with the requirements provided under Sections 2 and 4 (4) of Presidential Decree No. 1445.

Sections 2 and 4 (4) of Presidential Decree No. 1445 provides that “the Head of a government agency and all those who exercise authority over the financial affairs, transactions, and operations of the agency, shall take care of the management and utilization of government resources in accordance with law and regulations, and that they are safeguarded against loss or wastage to ensure efficient, economical, and effective operations of the government.”

On February 13, 2004, then City Mayor, Franklin M. Quijano approved SP Resolution No. 03-970, “A Resolution Confirming and Ratifying the Authority to Honorable Franklin M. Quijano for the additional Fifty Million Pesos (P50,000,000.00) Loan entered into with the Development Bank of the Philippines (DBP) to Finance the various Waterworks Improvement Projects of the Iligan City Waterworks System (DBP), as authorized by Resolution No. 83-637.” The Loan is payable in five (5) years, inclusive of 1 year grace period in principal, in consecutive sixteen (16) quarterly amortization, to commence on the 5th quarter from initial draw down until fully paid.

Of the P50 Million, P20 Million was initially released on March 1, 2004, incurring P1.650 Million financial charges/interest from March 1, 2004 to December 31, 2004. As of audit date, the proposed projects to be funded from the proceeds of loans are still in the planning stage, its program of works and related plans and specifications are still undergoing refinement, so to speak. In effect, the city is paying financial charges on loan that the city is not actually benefiting therewith.

This was the subject of our AOM No. 2004-011 dated July 14, 2004 to which the present management did not respond. In that AOM, we suggested the abrogation of the P50 Million Term-Loan with the Development Bank of the Philippines, considering that the city is awash of cash, and may not be necessary, at the moment, to encourage the inflow of cash through borrowing. To do so, would in effect paying interest on money that the city does not need and is not actually benefiting other than for “deposits only”, thereby placing the City Government of Iligan in an unfavorable position.

At year-end, balances of Cash in Banks Time and Current accounts for the general fund amounting P398.064 Million and P141.353 Million, respectively, showing that the city is still awash of cash.

Management opined that the loan was initiated by the previous administration. It was already approved when the new administration assumed office.

Recommendation:

Direct the Accounting Office to determine the balances of continuing appropriations no longer needed. With proper authorization of the Sangguniang Panlungsod, have it reverted as source of funds on the proposed supposedly funded from borrowings. If savings are sufficient, terminate the contract of loan for the remaining P30 Million.

But, if savings generated from reversion are not adequate, review the unimplemented projects under continuing appropriations for the reversion of the funds of less urgent projects to give way for the most urgent ones. In this way, the City could generate funds for the projects without resorting to borrowings.

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Findings No.2 COA Annual Audit Report 2004

July 25, 2008

2. Ownership of acquired Land through purchased worth P90.1 Million have not been transferred to the City Government. Likewise, Land acquired through donation has not been recorded in the books. All these cast doubts on the accuracy and validity of the Land account. Read more

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Findings No.1 COA Annual Audit Report 2004

July 25, 2008

1. Setting-up of Real Property and Special Education Tax Receivables account at the beginning of the year was not in accordance with Section 20, Vol. I of the NGAS Manual, resulting to the understatement of Real Property Tax/Special Education Tax Receivable account by P299,447,632.83 and Deferred Real Property Tax Income/Deferred Special Education Tax Income account by same amount. Read more

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