Professional Documents
Culture Documents
For CY 2010, the appropriations of the City Government of Caloocan for the
General and Special Education Funds totaled P5.43 billion. Obligations charged
against these appropriations amounted to P3.18 billion.
The operating income of P3.10 billion collected during the year was sourced
from the following:
Scope of Audit
The audit covered the accounts and operations of the City for the year 2010
and was aimed at determining whether management presented fairly the financial
statements of the City in adherence to the generally accepted accounting principles;
whether prevailing laws, rules and regulations have been complied with; and whether
funds were utilized in the most efficient, effective and economical manner. Financial,
compliance, and value for money (VFM) audits were conducted to achieve these
audit objectives.
The following are the significant findings and recommendations in the audit
of the City Government of Caloocan for the year 2010:
1. Cash in Bank, Local Currency, Current Account balances for eight (8) depository
accounts were materially bigger by P278.49 million over the confirmed bank
balances. On the other hand, seven (7) depository accounts had book balances
which were P13.06 million less than the corresponding bank balances. These
instances rendered the reliability of the cash account balance of P413.45 million
doubtful. The inadequacy of records brought about these unreconciled differences
between the book and the bank balances. (Finding No. 2.1, Page 23)
2. The inadequacy of documents and property/ledger cards that would establish the
individual historical costs of Buildings acquired by the City prior to June 30, 2004
in the total amount of P 1.45 billion resulted in managements inability to provide
for depreciation as required under Section 4, par. (o), Volume I of the NGAS
Manual. Thus, the corresponding depreciation expense and accumulated
depreciation accounts were both understated by an undetermined amount.
(Finding No. 1.1, Page 19)
3. The expenses related to the Katipunan Bond transactions (CY 2001 to 2007) in
the amount of P38.86 million were not recognized in the books of accounts,
thereby overstating the Cash in Bank, LCCA-Trustee Bank account by P38.86
million and the Government Equity account by P 0.17 million and understating
the related asset account by P38.69 million. (Finding No. 1.2, Page 20)
We recommend that a representative from the City Accountants Office
personally coordinate with the trustee bank, Philippine National Bank, to secure
documents necessary to substantiate the subject P38.86 million expenses related
to the Katipunan Bonds so that these would be taken-up in the books of accounts.
We also recommend that the City Accountant and the City Treasurer
monitor the liquidation of cash advances by sending demand letters regularly,
particularly to accountable officers and employees who are still in active service
and the withholding of the payment of any money due them in case of failure to
liquidate/settle.
Finally, cash advances of former officials who are now deceased and
where the Citys effort to collect or to settle is futile may be written-off upon
proper authorization from the Commission on Audit.
5. Earnings from the operation of the citys waterworks system totaling P89.35
million for the years 2006 to 2010 did not sufficiently meet its operating expenses
for the same period owing to the inability of the City to generate the needed
revenue that will sustain operations. (VFM Finding No. 1, Page 38)
6. The correctness of the amounts payable to the GSIS and the BIR totaling to
P81.75 million and P81.87 million, respectively, could not be established due to
the non-completion of the reconciliation of the records of the City and those of the
GSIS and the BIR. (Finding No. 4.2, Page 34)
We recommend that management finish the reconciliation of the balances
in question to establish the accuracy of the amounts due these government
agencies.
7. The City could have earned P76.56 million had it adopted in its Revenue Code
Sections 236 and 237 of R.A. 7160 which allows additional taxation on idle real
property units. (Finding No. 3.1, Page 27)
8. Had the City directly managed the operations of the Maypajo market and leased
out the unoccupied areas to its optimum capacity, pursuant to Sections 260 to 265,
Chapter III of the Revenue Code of the City, it could have earned additional
revenue of P37.18 million per year. (VFM Finding No. 2, Page 40)
We recommend that the available spaces in the second and third floors be
advertised so that these could generate additional revenue. We further
recommend that demand letters be issued to defaulting lessees and be required to
vacate the premises should they fail to settle so that interested parties may be
given the opportunity to lease. Seek legal action if demands remain unheeded.
9. The reciprocal accounts Due to Other Funds (424) and Due from Other Funds
(144) were both understated by P45.03 million and P19.34 million, respectively,
because interfund transactions were not recorded in the corresponding books.
(Finding No. 1.3, Page 22)
10. Funds received from the National Government for various specific purposes had
remaining book balances totaling P3.60 million, although the purposes for which
these have been received were already attained. (Finding No. 2.2, Page 26)
Remit to the National Treasury the unutilized portion of the fund transfers.
11. The absence of a specific policy requiring the submission of audited financial
statements and/or quarterly income tax returns as basis in the computation of
business taxes as well as tax enforcement through the examination of the books of
accounts of business establishments led to the understatement of the declared
annual gross receipts and consequently the under-collection of said taxes.
(Finding No. 3.2, Page 28)
We also recommend that the City Treasurer exercise the power to examine
the Books of Accounts and pertinent records of business establishments to
confirm the accuracy of gross receipts declared in the application for renewal of
business taxes and licenses for the given year.
12. The City Building Official failed to issue occupancy permits for 532 Real
Property Units (buildings and improvements) constructed in years 2008 and 2009.
Thus, the Office of the City Assessor had no basis to assess and issue tax
declarations thereon. Hence, the appropriate property taxes pertaining to these
property units were not collected on time. (Finding No. 3.3, Page 30)
13. The share of each of the Citys 188 barangays from Real Property Taxes (RPT) in
the total amount of P168.45 million, covering 2010 and prior years, has yet to be
released due to the absence of individual subsidiary ledger records for the account
Due to Local Government Units (LGUs) Barangay. (Finding No. 4.3, Page 35)
The City should immediately release the long overdue barangay shares
from RPT in accordance with the provision of Section 271 (d) of RA 7160
particularly on the distribution of RPT proceeds.
14. Lots donated by the National Housing Authority (NHA) for the Citys socialized
housing program have yet to be transferred to target-beneficiaries because the
revision of the subdivision plan is still to be undertaken. Further, the guidelines on
the disposition of said lots still needed the approval of the Local Inter-Agency
Committee (LIAC). As a result of the delay, informal settlers were able to occupy
the property. (Finding No. 4.4, Page 37)
We recommend that the necessary survey fund be provided by the City for
the revision of the subdivision plan. Further, we reiterate our previous
recommendation that the Local Inter-Agency Committee facilitate the submission
of procedures and guidelines governing the disposition of the socialized lots to
support Sangguniang Panlunsod Resolution No. 1777, series of 2006, authorizing
the City Mayor to facilitate the disposition of Camarin I and II projects.