EXECUTIVE SUMMARY

A. Introduction

The City of Mandaluyong was converted into a Highly Urbanized City under Republic Act
(RA) No. 7675, otherwise known as "The Charter of the City of Mandaluyong," signed by
President Fidel V. Ramos on February 9, 1994. On April 10, 1994, a plebiscite confirmed
the conversion of Mandaluyong from a municipality to a highly urbanized city.

Pursuant to RA No. 7160 or the Local Government Code of 1991, the City enjoys the
autonomy in managing, deciding, and planning its administrative, fiscal, social, and
economic development in ensuring the general welfare of its residents in conformity with
the national government thrust for sustainable social and economic growth.

The City Government of Mandaluyong is under the leadership of

Mayor Benjamin S. Abalos Sr., Vice Mayor Carmelita A. Abalos, and the twelve-member
City Council or Sangguniang Panlungsod. In addition, the City is represented in the
national congress by a lone representative.

The City consists of two districts, subdivided into 14 barangays in District I and
13 barangays in District II.

The City's vision is to become an empowered community with a competent government

sector, human resources, and benevolent private sector working in an atmosphere of
mutual assistance, shaping Mandaluyong into a sustainable and globally competitive
City and an effective partner in nation-building. At the same time, its mission is to
continuously perform efficiently in the areas of governance, administration, social
services, economic development, and environmental management, instilling among its
citizenry the values of collective action and maintaining competence towards self-
reliance and sustainable development.

For CY 2022, the personnel complement of the City as of December 31, 2022, totaled
5,658, composed of the following:

Status Quantity
Permanent 840
Contractual (Medical) 256
Service Contractual 772
Casual 1,741
Job Order 2,003
Elective Officials 15
Consultant 31
Total 5,658

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B. Financial Highlights

The financial position of the City as of December 31, 2022, is as follows:

2022 2021 Increase

Assets 31,935,025,023.65 30,950,141,269.36 984,883,754.29
Liabilities 4,442,312,275.22 3,793,848,238.56 648,464,036.66
Equity 27,492,712,748.43 27,156,293,030.80 336,419,717.63

On the other hand, its financial performance for the Calendar Year (CY) 2022 is reported
as follows:

Increase/
2022 2021
(Decrease)
Income 6,226,450,101.93 5,791,809,460.06 434,640,641.87
Expenses 5,637,802,753.88 5,109,627,324.59 528,175,429.29
Transfers, Assistance,
255,710,240.42 203,864,123.94 51,846,116.48
and Subsidy
Net Income 332,937,107.63 478,318,011.53 (145,380,903.90)

For CY 2022, the appropriations of the City for the General Fund and Special Education
Fund totaled to P10,471,018,025.24. Accordingly, obligations charged against these
appropriations amounted to P6,695,076,803.12.

Fund Appropriation Obligation

General Fund
Current 6,851,026,792.92 5,457,919,332.77
Continuing 2,950,042,534.32 698,047,041.63
Sub-Total 9,801,069,327.24 6,155,966,374.40
Special Education Fund
Current 669,948,698.00 539,110,428.72
Sub-Total 669,948,698.00 539,110,428.72
Grand Total 10,471,018,025.24 6,695,076,803.12

C. Operational Highlights

The City's significant accomplishments during the year included the following:

 The COVID-19 efforts the City sourced from the Local Disaster Risk Reduction and
Management Fund (LDRRMF) are as follows:

 The City expended at least P261,153,594.58 to assist in food, non-food,

financial, and medicinal supplies to the affected population, front liners,
responders, and volunteers during the year.

 The City charged the LDRRMF – Special Trust Fund the amount of
P8,507,188.80 to procure PPE, disinfecting equipment, medicines, and medical
supplies for front liners, responders, and volunteers.

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  The City utilized P306.875 million, or 97.42 per cent of its Gender and Development
(GAD) Budget for 79 PPAs, including two reprogrammed projects and three
programs attributed to GAD.

 Project Therapy, Education, and Assimilation of Children with Handicaps (TEACH)

has received six international and national awards/citations since its establishment in
2007, thus, significantly contributed to its mandate of basic delivery of services and
facilities to its constituents as enshrined under the Local Government Code.

D. Scope and Objectives of Audit

The audit covered the accounts and operations of the City of Mandaluyong for the period
January to December 31, 2022. The objectives of the audit are to: (a) be able to lend
credence to management's assertions on the financial statements; (b) recommend
agency improvement opportunities; (c) determine compliance with existing laws, rules,
and regulations; and (d) determine the extent of implementation of the prior years' audit
recommendations.

E. Independent Auditor’s Report on the Financial Statements

The Auditor rendered an Unmodified Opinion on the fairness of the presentation of the
Financial Statements.

F. Significant Audit Observations and Recommendations

The following are the significant audit observations and recommendations included in
Part II of the report:

1. The year-end balances of Cash in Bank accounts of the City differ by P11.679 million
from the adjusted bank balances as of December 31, 2022, mainly caused by the
reconciling items not recorded in the books contrary to COA Circular No. 96-011.
Thus, understating the Cash and Cash Equivalents and Government Equity as of
December 31, 2022, by P11.679 million, respectively.

We recommended the following:

a. The City Accounting Department (CAD) –

 Retrieve the documents/information/records as early as CY 2007 until the

present to serve as the basis for the correction/adjustment of the reconciling
items. In case of no avail, request before this Office copies of the required
documents/information/record if the same were initially submitted hereto;

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  Upon retrieval of the necessary documents/information/records, draw journal
entry vouchers to record all valid reconciling items that require adjustment
and/or correction in the books;

 Reconcile the balances of Cash in Bank – Local Currency, Current

Account and Cash in Bank – Local Currency, Savings Accounts with the
adjusted bank balances per Bank Reconciliation Statements (BRS);

b. The City Information and Communications Technology Department regularly

coordinates with the City Treasurer’s Department regarding transactions
involving systems and/or online processes, and the latter transmits all transaction
documents to CAD on a constant and timely basis to facilitate the immediate
reconciliation of accounting and treasury records and to avoid the recurrence of
this observation; and

c. Henceforth, strictly adhere to the provisions of COA Circular No. 96-011 relative
to the preparation of BRS.

2. The year-end balances of fund transfers from National Government Agencies

(NGAs) for implementation of specific programs or projects totaling P28.435 million
recorded in the Due to NGAs account do not reconcile by P51.091 million contrary to
COA Circular No. 2016-005. Thus, the reliability and accuracy of the above fund
transfers totaling P28.435 million cannot be ascertained.

We recommended that Management:

a. Ascertain the balances of the fund transfers from various NGAs through
confirmation and other means. Upon confirmation, reconcile the same and
prepare the necessary adjusting entries;

b. For fund transfers in which balances remained inactive or non-moving in the

books for 10 years or more and where a settlement could no longer be
ascertained, apply before the Commission for an authority to write off the said
balances following the procedures under COA Circular No. 2016-005; and

c. Prospectively, conduct regular and periodic verification, analysis, and validation

of the existence of the fund transfers under COA Circular No. 2016-005 to avoid
the recurrence of this observation.

3. Cash Advances (CAs) granted amounting to P32.963 million remained unliquidated,

despite serving the purposes for which they were availed contrary to the rules and
regulations on the grant, utilization, and liquidation of CAs under COA Circular
No. 97-002 dated February 10, 1997. Moreso, the non-liquidation of the CAs from
CY 2011 and prior years may constitute probable cause for filing malversation
charge under Article 217, and failure to liquidate cash advance under Article 218,
both of the Revised Penal Code or criminal prosecution under Section 128 of
Presidential Decree No. 1445.

We reiterated our previous years' recommendation that Management requires:

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 a. The responsible Accountable Officers (AOs) to immediately liquidate their
existing CAs with the CAD and/or refund the same to the City Treasurer's Office;

b. The City Legal Officer to issue a final demand letter to erring AOs and institute
available judicial remedies to recover the unliquidated CAs, more particularly
those CAs from CY 2011 and prior years;

c. The City Accountant to withhold the salary of erring AOs who failed to liquidate
their CAs after the final demand from the City Legal Office;

d. The City Accountant and City Legal Officer to consider the provisions of
Sections 8.1 to 8.3 of COA Circular No. 2016-05 dated December 19, 2016, for
the writing-off of the accounts of those unliquidated CAs whose AOs are
deceased or liquidation thereof is highly improbable;

e. The Internal Audit Division to review the existing policy of the City in the granting,
utilization, and liquidation of CAs, and if possible, institute additional measures to
provide for more efficient and effective procedures to ensure that CAs granted
are immediately liquidated within the required period;

f. The City Accountant to ensure that all CAs are fully liquidated at the end of each
year; and

g. Strict compliance with the provisions of COA Circular No. 97-002 and COA
Circular No. 2012-004.

The observations above and the corresponding recommendations were discussed with
Management officials concerned during the exit conference on April 11, 2023.
Management views and comments were incorporated in the report, where appropriate.

G. Status of Suspensions, Disallowances, and Charges

As of December 31, 2022, the Statement of Audit Suspensions, Disallowances, and

Charges shows the following:

Notices of
Total
Suspension Disallowance Charge
Beginning Balance,
January 1, 2022 P26,304,649.14 P36,806,066.07 P5,740,682.88 P68,851,398.09
Less: Settlements 11,898,761.31 1,479,565.65 1,000,000.00 14,378,326.96
Balance as of
December 31, 2022 P14,405,887.83 P35,326,500.42 P4,740,682.88 P54,473,071.13

H. Status of Implementation of Prior Years' Audit Recommendations

Of the 77 audit recommendations in the CYs 2021, 2020, 2018, 2017 and 2016 Annual
Audit Reports, 44 or 57.14 per cent, were fully implemented, 31 or 40.26 per cent, were
partially implemented, and two or 2.60 per cent were not implemented during the year.