AOM 2019-01 Brgy Lapinig Del Sur, Lapinig
AOM 2019-01 Brgy Lapinig Del Sur, Lapinig
AOM 2019-01 Brgy Lapinig Del Sur, Lapinig
COMMISSION ON AUDIT
Audit Team R8-06, LGS-D – Province of Northern Samar
Provincial Satellite Auditing Office
Brgy. Dalakit, Catarman, Northern Samar
We have audited the accounts and operation of the barangay for CYs 2016-2018 and
observed the following deficiencies and/or errors:
1. Barangay Financial Statements and schedules for CYs 2016-2018 remained not
submitted contrary to Accounting Circular No. 2006-002 dated December 19, 2006,
thus, depriving management of information on its financial position and results of
operations.
Accounting Circular No. 2006-002 dated December 19, 2006 prescribed the use
of the Systems and Procedures Manual on the Management of Barangay Funds and
Property and Accounting System Manual for Barangays under the New Government
Accounting System (NGAS).
Absence of financial statements hindered the audit team to render an opinion and
deprive management/stakeholders of information on the financial position and the results
of its operations for the period ended.
On the other hand, Section 4(6) of Presidential Decree 1445 provides: “Claims
against government funds shall be supported with complete documentation.”
Period/Date of
Particulars Amount (net of tax)
Payment
REHABILITATION OF WATER SYSTEM
(replacement of jetmatic pumps & other accessories)
7/27/18 Supplies and materials 20,850.00
9/27/18 Supplies and materials 8,440.00
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Period/Date of
Particulars Amount (net of tax)
Payment
Sub-Total 29,290.00
The provisions of this IRR are in line with the commitment of the GoP to promote
good governance and its effort to adhere to the principles of transparency,
accountability, equity, efficiency, and economy in its procurement process. It is
the policy of the GoP that procurement of Goods, Infrastructure Projects and
Consulting Services shall be competitive and transparent, and therefore shall
undergo competitive bidding, except as provided in Rule XVI of this IRR.
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RULE XVI – ALTERNATIVE METHODS OF PROCUREMENT
48.1. Subject to the prior approval of the HoPE, and whenever justified by the
conditions provided in this Act, the Procuring Entity may, in order to
promote economy and efficiency, resort to any of the alternative methods of
procurement provided in this Rule. In all instances, the Procuring Entity
shall ensure that the most advantageous price for the Government is
obtained.
48.2. In accordance with Section 10 of this IRR, as a general rule, the Procuring
Entities shall adopt competitive bidding as the general method of
procurement and shall see to it that the procurement program allows
sufficient lead time for such competitive bidding. Alternative methods of
procurement shall be resorted to only in highly exceptional cases provided
for in this Rule.
Moreover, Annex H of the same IRR provides that barangays are only allowed to
resort to alternative mode of procurement (i.e. Shopping or Small Value procurement) if
the Approved Budget for the Contract (ABC) did not exceed the threshold of ₱50,000.00.
Republic Act No. 9184 states that as a general rule, all procurements shall
undergo competitive/public bidding, unless it was determined that it cannot be ultimately
pursued by the Procuring Entity. Hence, alternative modes shall be resorted to, thru a
resolution from the Bids and Awards Committee (BAC) justifying the reasons.
Also, the IRR of the same law states that a barangay can only resort to alternative
mode of procurement (i.e. Shopping or Small Value) if the Approved Budget for the
Contract (ABC) would not exceed the threshold of ₱50,000.00. Moreover, if the
Procuring Entity decides to implement the construction of the project by administration,
the materials shall still be subjected to competitive bidding, if warranted.
The payment for the construction materials was not supported with resolutions
from the Bids and Awards Committee (BAC) justifying the alternative mode of
procurement resorted to by the barangay, if such was the case.
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Evidently, the contract amount itself already exceeded the threshold for
Alternative Mode of procurement (i.e. Shopping or Small Value) by ₱126,370.75. Thus,
the barangay should have purchased the materials thru public bidding.
2.a.1. For accountability purposes, the end-user or the recipient of small tangible
items shall be issued an Inventory Custodian Slip.
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f. Any shortages shall be looked into and the AO shall be held
accountable for the loss.”
Audit of transactions covering January 1 to December 31, 2018 showed that the
Barangay purchased small tangible items totaling ₱53,500.00. The items purchased are
presented below:
All of these items were not supported with Inventory Custodian Slip (ICS) or
Property Acknowledgment Receipt (PAR), thus, it was difficult to determine the
whereabouts of the properties and to properly identify the persons accountable thereof.
In addition to the absence of ICS or PAR, the barangay treasurer did not maintain
a property ledger card for each kind of property purchased by the barangay and the
physical count of PPE was, likewise, not conducted.
d. Require the Municipal Accountant to record the all the PPE owned by the
LGU-Barangay.
5. Continuous payment of regular and recurring expenditures thru the cash advance of
the barangay treasurer amounting to ₱205,777.53 is not in conformity with the
principle on the disbursements of government funds that should be directly paid to
the payees pursuant to Section 93 of Presidential Decree 1445 and COA Circular No.
97-002.
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Section 93 of Presidential Decree 1445 provides:
Further, Item 2 of COA Circular No. 97-002 dated February 10, 1997 provide
the following:
Reference/ DV
No. Payee Purpose Amount
101-18-03-019 NORSAMELCO Electricity expense 10,316.26
Registration fee SK Mandatory
101-18-06-033 UEP, Catarman 16,000.00
Orientation and Training
101-18-06-039 Rosalie's Tailoring Basketball uniform 11,950.00
101-18-06-044 Christian C. Gajoy Traveling expense 8,000.00
Masonry and sanitary works
101-18-12-110 Rolly A. Piandiong 15,000.00
(Improvement of Multi-Purpose Hall)
101-18-12-112 Jayson D. Briones Painting Works of Multi-Purpose Hall 27,000.00
Severa Glass and
101-18-12-114 Labor: window grills MPH 19,000.00
Aluminum Supply
101-18-12-115 BIR Remittance of taxes withheld 4,624.13
Sofia’s General
101-18-12-117 DRRM equipment – Sound system 38,000.00
Merchandise
LIGA ng mga
LIGA dues 5,000.00
Barangay
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For CY 2018, it was disclosed that the Barangay Treasurer drew cash advances
amounting to ₱1,414,634.28 for the payment of various expenses of the LGU.
Verification revealed that out of these cash advances, ₱451,908.26 or 32% were
disbursements that should have been paid thru check directly drawn to the payees.
As shown in the table, the cash advances were used to pay the reimbursements of
traveling expenses of the barangay officials in the encashment of check and attendance to
various meetings and seminars, supplies, equipment, registration fees to trainings and
seminars, payment of electricity bills, various labor works in contract and remittance of
taxes. These are regular, recurring and not in small amount expenditures to be charged to
the Petty Cash Fund.
The practice of paying out of cash advance is not in conformity with the rules and
regulation that disbursements of government funds should be made thru check. Further, it
not only exposes the fund to loss and theft, it likewise, burdened the Barangay Treasurer
in preparing the liquidation reports.
May we have your comments on the foregoing audit observations within fifteen (15)
calendar days from receipt hereof.
JOCELYN L. MARCELINO
OIC-Audit Team Leader
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3. Ricky L. Gabay Mun. Accountant
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