OTHER AUDIT OBSERVATIONS

OTHER AUDIT OBSERVATIONS

DISCUSSION:

Non-implementation of Executive Order No. 712 due to non-receipt of implementing guidelines.

Section 2 (1), (2), and (5) of Executive Order (EO) No. 712 dated March 11, 2008 provides that: The DILG shall, subject to existing laws, advise LGUs to suspend, to wit:

1. the establishment and operations of new and existing transportation terminals that charge fees and require compulsory use by public utility vehicles;

2. the enforcement of re-routing schemes that violate the authorized route as provided for the PUV franchises;

3. xxx

4. xxx

5. the implementation of local programs, projects and ordinances that have impact on the cost of operations of public utility vehicles without first coordinating and getting the approval of the DOTC to ensure that these programs, projects and ordinances do not prejudice public interest by way of higher fares.

Relevant to the impact on additional fares from the pier/town proper to the Bus Terminal, a sworn statement of two (2) regular travellers, who are personally aggrieved of the prevailing situation, have submitted to the team their notarized comments in particular are attached for record and reference purposes.

In reply to our letter dated August 6, 2008, requesting of the action taken, if there is any in so far as the above cited provision of EO No. 712, states that, relative to this: Please be informed that the Department is not yet implementing Section 2 of the subject EO, due to non-issuance of its implementing guidelines. Moreover, DILG and DOTC is in the process of formulating the implementing guidelines through a Joint Memorandum Circular to be issued soonest. Immediate implementation at their level is subject to receipt of said guidelines.

Notwithstanding the certification issued by the Municipal Engineer that the construction of Bulan Common Bus Terminal and abattoir under contract with S.R. Baldon Construction & Supply and Steven Construction & Supply, respectively, has been implemented, but construction of the said projects are still on-going as of July 24, 2007, which revealed probable liquidated damages to be determined by the TAS RTSO of COA Region V, Legaspi City.

Inspite of the Certificate of Acceptance and Turn-Over issued by the Hon. Helen C. De Castro dated December 4, 2007, contract review for the Integrated Bus Terminal and Slaughterhouse has not been rendered/submitted to the team by the Technical Service Office as of this date, November 5, 2008, when the exit conference is being undertaken by the Regional Cluster Director of LGS Cluster III Sub-Cluster II of COA RV Legaspi City at the Office of the Municipal Mayor of LGU Bulan, Sorsogon with several department heads. As regards to contract review, a final tracer under 5^th indorsement dated November 10, 2008 was forwarded to the Regional Cluster Director, Local Government Sector, Cluster III, Sub-Cluster II, both of COA Regional Office No. V, Rawis, Legaspi City, requesting immediate submission of the contract review of the aforementioned projects of LGU Bulan, Sorsogon.

A reply on our request dated September 18, 2008, was received by the team on November 12, 2008 from the BIR Revenue District No. 68, Sorsogon City stating among others that our request is a violation of Section 270 in relation to Section 71 of the National Internal Revenue Code, as amended and the requesting party is not included among the enumerated exception under Section 270 of the Tax Code in so far as our request for a Certification/Statement of taxes paid due the BIR covering the Deed of Donation executed by Mrs. Aniceta O. De Castro as the donor of a parcel of land situated at Barangay Fabrica, Municipality of Bulan, Province of Sorsogon in favour of LGU Bulan, consisting of an area of ten thousand square meters (10,000 sq. m.).

Income and revenue on operations of the LGU’s Heavy Equipment as recorded in the cashbook registered the following, to wit:

2006	2007	2008
		January to June
P85,000.00	P107,513.00	P35,300.00

Pending receipt by the team of monthly reports for official travel and the corresponding monthly reports of fuel consumption per equipment, the team cannot render an opinion on the recorded income, whether there was an under/over statement of income from the operation of the same.

An exit conference was conducted by Supervising Auditor, Tita B. Embestro, presided by the undersigned on November 5, 2008, with the presence of Hon. Mayor Helen C. De Castro, and other Department Heads at Municipal Hall of LGU Bulan, Sorsogon. As a consequence of said exit conference, a final tracer was issued under 5^th indorsement dated November 10, 2008, requesting immediate submission of contract review of the Integrated Bus Terminal and Slaughterhouse of LGU Bulan, Sorsogon.

Series of communication pertaining to the non-submission of contract review by RTSO, revealed that management failed to submit the required PERT/CPM of the twin projects abovementioned. Unnumbered memorandum to this effect was issued to the undersigned by Supervising Auditor Tita B. Embestro dated February 13, 2009, but it was only on March 5, 2009, when subject PERT/CPM was received by this end, under 1^st indorsement dated February 26, 2009 and March 4, 2009 from Hon. Mayor Helen C. De Castro of LGU Bulan, Sorsogon and Auditor Jose Rey Binamira of PAO Sorsogon, respectively.

On March 5, 2009, PERT/CPM of Bulan Integrated Bus Terminal was forwarded to the Regional Director , thru the Supervising Auditor, Cluster III, Sub-Cluster II, LGS both of COA Regional Office No. V, Rawis, Legaspi City, in compliance with unnumbered memorandum dated February 13, 2009.

We extend our thanks for the cooperation and support extended to us by the Honorable Mayor Helen C. De Castro, Municipal Treasurer, Accountant, Budget Officer and Other Official and Employees of LGU Bulan, Sorsogon, and the Audit Team Leader, Team I, LGS Province of Sorsogon during our special audit engagements.

Prepared and Submitted by:

(SGD.) ROSS A. OBEJAS

State Auditor IV

LGS – Province of Masbate