Ref.

Reason for
CY Management Status of
Audit Observation Recommendation Partial/Non-
2009 Action Implementation
Implementation
AAR
STATUS OF IMPLEMENTATION OF PRIOR YEARS AUDIT
RECOMMENDATIONS

Of the ten (10) audit recommendations contained in the CY 2009 Annual Audit
Report (AAR), none was implemented, one (1) was partially implemented while the
remaining nine (9) were not acted upon during the year and were reiterated in CY 2010
AAR. These are as follows:

Ref.
Reason for
CY Management Status of
Audit Observation Recommendation Partial/Non-
2009 Action Implementation
Implementation
AAR
I. Financial and Compliance Audit
Depreciation We advise Finding The Not Inadequacy of
expense was not Management to No. 1.1 management Implemented records to
provided for exert efforts to was not able establish the costs
buildings totaling locate the to comply Reiterated under of the properties.
P1.02 billion documents relative with their Finding
representing to the costs of the commitment No. 1.1
balances as of June buildings so that the that the
30, 2004 hence the corresponding created PPE
overstatement of depreciation Monitoring
said account and expense could be Team will
understatement of computed and conduct
depreciation taken-up in the physical
expense account by books. If it is no inventory,
an undetermined longer possible to assess and
amount get the historical inspect the
values, require the conditions of
City Appraisal the PPEs and
Committee to submit
determine the inventory
appraised values of report
the buildings to thereon.
serve as basis in
recording the book
values as well as in
preparing/updating
the property stock
and ledger cards
and ultimately in
providing the
depreciation costs.

43
43
 Ref.
Reason for
CY Management Status of
Audit Observation Recommendation Partial/Non-
2009 Action Implementation
Implementation
AAR
Initially, the
simultaneous
physical inventory
of the property
should be
completed thru the
coordinated efforts
of the General
Services Office and
the PPE Monitoring
Team.

Errors in recording We recommend that Finding The Not Monitoring and

interfund payables the City Accountant No. 1.2 reconciliation Implemented reconciliation of
and receivables make the necessary processes the account was
understated the correcting entries in which the Reiterated under not undertaken by
balances of the the books to adjust City Finding No. 1.3 the City
reciprocal accounts, the balances of the Accountant Accountant and
Due to Other Funds accounts Due to promised the City
(424) and Due from Other Funds and were not Treasurer.
Other Funds (144) Due from Other completely
by P45.30 million Funds. Likewise, undertaken.
and P18.05 million, there should be
respectively. close monitoring
and periodic review
of transactions in
order to ensure
accuracy.

Non recording of We recommend that Finding Letter was Not Difficulty in the
bond transactions in management No. 1.3 sent by the Implemented retrieval of bank
the amount of designate a City records since
P38.86 million representative from Accountants Reiterated under officers
overstated the the City Office to PNB Finding No. 1.2 previously in-
balances of Accountants Office requesting for charge of the
accounts Cash in to personally documents bond floatation
Bank, LCCA coordinate with the relative to the had since been
Trustee Bank and trustee bank, expenses transferred or no
Government Equity Philippine National incurred out longer in service.
and understated the Bank, to secure the of the bond
expense account. documents relative floatation.
to the P38.86
million expenses

44
 Ref.
Reason for
CY Management Status of
Audit Observation Recommendation Partial/Non-
2009 Action Implementation
Implementation
AAR
for the Katipunan
Bonds, thereby
facilitating the
recording of the
transactions in the
books of accounts.

Bank reconciliation We reiterate our Finding Bank Not Absence of bank

statements were not previous years No. 2.1 reconciliation Implemented documents for 13
updated for fifteen recommendation statements bank accounts to
(15) bank accounts that management were prepared Reiterated under serve as basis in
since 1997 thereby make strong for 16 Finding No. 2.1 the preparation of
resulting to non- representations with depository the bank
validation of the the Philippine accounts only. reconciliation
accuracy of the National Bank to statements.
balance of the secure the needed No action was Moreover, the
account Cash in bank statements in done by the lack of capable
Bank LCCA. order to reconcile Office of the personnel to
and effect the City handle the
necessary Accountant reconciliation
adjustments in the on the said hindered the City
year-end cash fifteen (15) Accountants
balance appearing accounts, Office in
in the books. A despite the preparing the
staff from the Accounts BRS.
accounting office Nos. 0005-
should be assigned 00814-001
to work on the and 005-
preparation of the 00783-001
bank reconciliation with PVB are
statements. active.

Additional revenue We recommend that Finding The City is Not The formulated
of at least P107.16 Management No. 3.1 still in the Implemented procedures and
million was not facilitate the process of guidelines that
attained for failure approval/passage of revising the Reiterated under will govern the
of the City to an ordinance subdivision Finding No. 4.4 transfer is still for
execute the sale of enumerating the plan. final approval by
property from the procedures and LIAC. Once
socialized housing guidelines approved, the
program and to governing the same will support
collect the real disposition of the the Sangguniang
property taxes socialized lots. Panlungsod Res.

45
 Ref.
Reason for
CY Management Status of
Audit Observation Recommendation Partial/Non-
2009 Action Implementation
Implementation
AAR
therefrom. No. 1777 s. 2006
authorizing the
City to dispose
these projects.

Taxation on We recommend that Finding Office of the Not Draft ordinance

103,941 real Management No. 3.2 City Assessor Implemented treating on the
property units facilitate the submitted to subject has not
(RPUs) of idle passage of an the Office of Reiterated under yet been
lands was not ordinance treating the Mayor his Finding No. 3.1 submitted to the
implemented for on the tax recommended Sangguniang
lack of tax rate to percentage to be tax rate to be Panlungsod for
be applied thus levied on idle lands imposed on its approval.
potential revenues for the collection of idle lands.
of approximately the additional ad
P592.5 million was valorem tax, which The
not collected. should not exceed discrepancies
5%. on identified
idle land was
corrected,
hence
decreased the
number of
RPUs in
2010.

The shares from We advise the City Finding Barangay Not Subsidiary
Real Property and Accountants Office No. 3.3 shares now Implemented records for the
Community Taxes to fast-track the identified in account were not
of the barangays for reconstruction of the Abstract Reiterated under maintained by the
CY 2004 and prior the subsidiary of Collection. Finding No. 4.3 City Accountant.
years remained not records to establish
released. the amount of
unreleased RPT and
community tax
shares of each
barangay, in
compliance with
Section 271 (d) of
RA 7160.

The amounts due to In order to adjust Finding Reconciliation Not Problems

GSIS and BIR the recorded No. 3.4 of records still Implemented encountered in

46
 Ref.
Reason for
CY Management Status of
Audit Observation Recommendation Partial/Non-
2009 Action Implementation
Implementation
AAR
totaling to P83.70 balances of the on-going. the reconciliation
million and P81.87 accounts Due to of payable
million, GSIS and Due to Reiterated under accounts caused
respectively, BIR in the financial Finding No. 4.2 delay in the
existing in the statements, we process.
books since 2004 recommend the
and prior years creation of a
remained not committee tasked
remitted due to solely to reconcile
insufficient records with the
documents to GSIS and the BIR.
establish the
correctness of such Management is
liabilities. enjoined to strictly
comply with the
GSIS and BIR
regulations on the
timely remittance
of the trust
collections.

The automated We advise the Head Finding Transfer of Partially The Information
system of the of SPPC to No. 3.5 facility to Implemented Technology
waterworks coordinate with the North City Office is still in
operation of the Information Hall was the process of
Serbisyong Patubig Technology Office effected. installing needed
ng Pamahalaang the enhancement of Management enhancement of
Caloocan (SPPC) the automation now in the the system.
remained without a system of SPPC, process of
reporting facility, which should enhancing
thus, the unpaid include a reporting automation
accounts were not facility that would system to
properly monitored facilitate the include
and taken up in the preparation of its reporting
books, contrary to financial reports. facility
Section 112 of PD needed in the
1445. preparation of
financial
reports.
II. Value for Money Audit
The operations of We reiterate our Finding Management Not No technical
Maypajo market previous years No. 1 posted Implemented committee was
could have recommendation advertisement formed to

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 Ref.
Reason for
CY Management Status of
Audit Observation Recommendation Partial/Non-
2009 Action Implementation
Implementation
AAR
generated an that the available for lease of Reiterated under conduct
additional revenue spaces in the vacant spaces Finding No. 2 evaluation and
of P37.20 million second and third of the market. study the
per year had floors be advertised possibility of
management opted so these could amending or
to directly manage generate additional rectifying
its operations and revenue. provisions in the
leased its vacant contract with the
areas to its We further Cooperative.
optimum capacity. recommend that
demand letters be
issued to the
religious
congregation and
illegal occupants at
the second and third
floors requiring
them to vacate the
premises so that
available and
existing spaces be
leased to interested
parties. Seek legal
action if demands
remain unheeded.

Finally, we reiterate
our
recommendation
that a technical
committee be
created to review
the lease contract
with the MMMPC,
to ensure that the
terms are
advantageous to the
government.

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