Annualauditreport 2013

Republic of the Philippines
COMMISSION ON AUDIT
Commonwealth Ave., Quezon City
ANNUAL AUDIT REPORT
on the
LAL-LO WATER DISTRICT

Lal-lo, Cagayan
For the Year Ended December 31, 2013

COMMISSION ON AUDIT
Regional Office No. II
Tuguegarao City, Cagayan
October 3, 2014
ENGR. JOSE JACOB S. MEDINACELI

General Manager
Lal-lo Water District
Lal-lo, Cagayan
Dear Manager Medinaceli:
We are pleased to transmit our Annual Audit Report on the accounts and operations of
the Lal-lo Water District, Lal-lo, Cagayan for the year ended December 31, 2013, in
compliance with Section 43 of the Government Auditing Code of the Philippines (PD 1445).
The audit was conducted to ascertain the propriety of financial transactions and
compliance with prescribed rules and regulations. It was also made to ascertain the accuracy
of financial records and reports, as well as the fairness of the presentation of the financial
statements.
The report consists of four parts: Part I- Financial Statements, Part II- Observations
and Recommendations, Part III- Status of Implementation of Prior Years Recommendations
and Part IV- Annexes. The observations and recommendations were discussed with the
concerned management officials in an exit conference held on June 30, 2014. Management
comments were included in the report, where appropriate.
Among the significant observations discussed are as follows:
1. The validity of the Loans Payable account amounting to P39,565,433.02 as of
December 31, 2013 in the books of accounts cannot be ascertained due to the non
reconciliation of the balance in the general ledger with the balance per records of
the Local Water Utilities Administration (LWUA) having a discrepancy of
P10,326,172.65.
2. The land donated by the LGU of Lal-lo, where the plant and building and other
structures of the District were erected amounting to P5,524,649.99 and
P504,838.08, respectively, are not yet registered in the name of the District thus
exposing the risk of divestment on the possession of the land.
3. The three parcels of land purchased from 2004 to 2012 and recorded in the books
of accounts amounting to P456,000.00 were not yet titled in the name of the
District contrary to Sec. 39 of Presidential Decree (PD) No. 1445, hence,

ownership over the property is not absolute.
We request the District to accomplish the attached Agency Action Plan and Status of
Implementation (AAPSI) on the Audit Observations and Recommendations and submit within
sixty (60) days from receipt of this report, pursuant to Section 90, General Provisions of
Republic Act 10352, otherwise known as the General Appropriations Act of 2013.
We acknowledge the cooperation extended to the audit team by the officials and staff
of that District which facilitated our audit and submission of this report.
Very truly yours,
VIRGILIO P. BAUTISTA
State Auditor V
Officer-In Charge
CC:
The Board of Directors

Lal-lo,Cagayan

COMMISSION ON AUDIT
September 29, 2014
MR. VIRGILIO P. BAUTISTA
State Auditor V
Officer-In-Charge
Commission on Audit
Sir:
In compliance with Section 2, Article IX-D of the Philippine Constitution and
pertinent provisions of Presidential Decree No. 1445, we conducted an audit on the accounts
and operations of the Lal-lo Water District, Lal-lo, Cagayan for the year ended December 31,
2013.
The audit was conducted to ascertain the propriety of financial transactions and
compliance with prescribed rules and regulations. It was also made to ascertain the accuracy
of financial records and reports, as well as the fairness of the presentation of the financial
statements.
The report consists of four (4) parts: Part IFinancial Statements, Part IIObservations
and Recommendations, Part IIIStatus of Prior Years Audit Recommendations and Part IV
Annexes. The observations and recommendations were discussed with management officials
in an exit conference held on June 30, 2014. Management comments were included in the
report, where appropriate.
We rendered a qualified opinion on the fairness of presentation of the financial
statements of the District because the validity of the Loans Payable account amounting to
P39,565,433.02 as of December 31, 2013 in the books of accounts cannot be ascertained due
to the non-reconciliation of the balance in the general ledger with the balance per records of
the Local Water Utilities Administration (LWUA) having a discrepancy of P10,326,172.65.
Likewise, the Districts assertion on the validity, existence and correctness of its Property,
Plant and Equipment with a net book value of P39,414,413.95 could not be relied upon due
to the following reasons: (1) the land donated by the LGU of Lal-lo, where the plant and
building and other structures of the District are erected amounting to P5,524,649.99 and
P504,838.08, respectively, are not yet registered in the name of the District thus exposing the
risk of divestment on the possession of land; (2) the three parcels of land purchased from
2004 to 2012 and recorded in the books of accounts amounting to P456,000.00 were not yet
titled in the name of the District contrary to Sec. 39 of Presidential Decree (PD) No. 1445,
hence, ownership over the property is not absolute.
Our audit was conducted in accordance with generally accepted auditing standards and
we believe that it provides reasonable basis for the results of audit.
Very truly yours,
KATHLEEN C. BAUTISTA
Attorney V
OIC-Supervising Auditor
EXECUTIVE SUMMARY
A. Highlights of Financial Information
The Lal-lo Water District primarily derived its P7,201,534.71 operating revenues for
CY 2013 from services rendered to its concessionaires for water metered sales and other
service income. The agencys assets, liabilities and capital deficiency for the year were
P49.33 million, P66.71 million, and (P17.38 million), respectively.
B. Operational Highlights
During the year, the districts operating revenues increased by P558,456.51 due to the
increased number of concessionaires availing its services. The District is continuously
implementing the construction and expansion of its water system in order to extend and
improve its services in the distant barangays of Lal-lo.
C. Scope of Audit
A financial and compliance audit was conducted on the accounts and operations of the
Lal-lo Water District for the year ended December 31, 2013. The audit consisted of review of
operating procedures, inspection of the principal programs and projects, interview of
concerned government officials and employees, verification, reconciliation and analysis of
accounts, and such other procedures considered necessary to ascertain the fairness of
presentation of the financial statements and compliance by the agency to laws, rules and
regulations.
D. Auditors Opinion on the Financial Statements
The Auditor rendered a qualified opinion on the fairness of presentation of the
financial statements because the validity of the Loans Payable account amounting to
P39,565,433.02 as of December 31, 2013 in the books of accounts cannot be ascertained due
to the non-reconciliation of the balance in the general ledger with the balance per records of
the Local Water Utilities Administration (LWUA) having a discrepancy of P10,326,172.65.
Likewise, the Districts assertion on the validity, existence and correctness of its Property,
Plant and Equipment with a net book value of P39,414,413.95 could not be relied upon due
to the following reasons: (1) the land donated by the LGU of Lal-lo, where the plant and
building and other structures of the District are erected amounting to P5,524,649.99 and
P504,838.08, respectively, are not yet registered in the name of the District thus exposing the
risk of divestment on the possession of land; (2) the three parcels of land purchased from
2004 to 2012 and recorded in the books of accounts amounting to P456,000.00 were not yet
titled in the name of the District contrary to Sec. 39 of Presidential Decree (PD) No. 1445,
hence, ownership over the property is not absolute.
E. Significant Observations and Recommendations

1. The validity of the Loans Payable account amounting to P39,565,433.02 as of
December 31, 2013 in the books of accounts cannot be ascertained due to the non
reconciliation of the balance in the general ledger with the balance per records of the
Local Water Utilities Administration (LWUA) having a discrepancy of
P10,326,172.65.
We recommended that the Accounting Processor reconcile the balance of the Loans
Payable per book of the District and per LWUA record in order to ascertain the correct
amount of Long-term Loans and to reflect the appropriate adjustments.
2. The land donated by the LGU of Lal-lo, where the plant and building and other
structures of the District are erected amounting to P5,524,649.99 and P504,838.08,
respectively, are not yet registered in the name of the District thus exposing the risk of
divestment on the possession of land.
We recommended that management secure the Deeds of Donation of the two lots and
submit the same to the Registry of Deeds to facilitate the immediate transfer of title of
ownership on the land where the Districts plant and building and other structures are
erected.
3. The three parcels of land purchased from 2004 to 2012 and recorded in the books of
accounts amounting to P456,000.00 were not yet titled in the name of the District
contrary to Sec. 39 of Presidential Decree (PD) No. 1445, hence, ownership over the
property is not absolute.
We recommended that management facilitate the titling of the three lots in the name of
the District to protect the interest of the government and avoid the possibility of third
party claims over said property.
F. Status of Implementation of Prior Years Audit Recommendations
Out of eight audit recommendations contained in the CY 2012 Annual Audit Report,
four recommendations were implemented and the other four were not implemented which
were reiterated in Part II of this years report.
TABLE OF CONTENTS
Page
PART I- Financial Statements
Independent Auditors Report

Statement of Management Responsibility for the Financial
Statements
Condensed Balance Sheet (With Comparative Figures for 2012)
Condensed Statement of Income and Expenses (With
Comparative Figures for 2012)
Condensed Statement of Changes in Equity (With Comparative
Figures for 2012)
Condensed Statement of Cash Flows (With Comparative Figures
for 2012)
Notes to Financial Statements
1
3
4
5
6
7
8
PART II - Observations and Recommendations

Financial and Compliance Audit
PART III- Status of Implementation of Prior Years Audit
Recommendations
PART IV- Annexes
Annex A Detailed Balance Sheet
Annex B Detailed Statement of Income and Expenses
Annex C Detailed Statement of Cash Flows
Annex D Detailed Statement of Changes in Equity
A.
13
20
PART I - FINANCIAL STATEMENTS

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City, Philippines
INDEPENDENT AUDITORS REPORT
The Board of Directors
Lal-lo, Cagayan
Pursuant to Section 2, Article IX-D of the Philippine Constitution and pertinent provisions of
Presidential Decree No. 1445, we have audited the accompanying financial statements of the
Lal-lo Water District, Lal-lo, Cagayan, which comprise the Statement of Financial Position as
of December 31, 2013 and the Statement of Income and Expenses, Statement of Changes in
Equity and Statement of Cash Flows for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with State accounting principles, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Philippine Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from material
misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessment, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Basis for Qualified Opinion
As discussed in Part II- Observations and Recommendations portion of this report, the
validity of the Loans Payable account amounting to P39,565,433.02 as of December 31, 2013
in the books of accounts cannot be ascertained due to the non reconciliation of the balance in
the general ledger with the balance per records of the Local Water Utilities Administration
(LWUA) having a discrepancy of P10,326,172.65. Likewise, the Districts assertion of
validity, existence and correctness of its Property, Plant and Equipment with a net book value
of P39,414,413.95 could not be relied upon due to the following reasons: (1) the land
donated by the LGU of Lal-lo, where the plant and building and other structures of the
District are erected amounting to P5,524,649.99 and P504,838.08, respectively, are not yet
registered in the name of the District thus exposing the risk of divestment on the possession of
land; (2) the three parcels of land purchased from 2004 to 2012 and recorded in the books of
accounts amounting to P456,000.00 were not yet titled in the name of the District contrary to
Sec. 39 of Presidential Decree (PD) No. 1445, hence, ownership over the property is not
absolute.
Qualified Opinion
In our opinion, except for the effects and the possible effects on the financial statements of the
matters referred to in the preceding paragraph, the financial statements present fairly, in all
material respects, the financial position of the Lal-lo Water District as of December 31, 2013
and of its financial performance and its cash flows for the year then ended in accordance with
State accounting principles.
COMMISSION ON AUDIT
By:
KATHLEEN C. BAUTISTA
Attorney V
OIC-Supervising Auditor
September 1, 2014
2

Lal-lo, Cagayan
STATEMENT OF MANAGEMENTS RESPONSIBILITY

FOR THE FINANCIAL STATEMENTS
The management of Lal-lo Water District, Lal-lo, Cagayan is responsible for all
information and representations contained in the accompanying Balance Sheet as of
December 31, 2013 and the related statements of Income and Expenses and Cash Flow for
the year then ended. The financial statements have been prepared in conformity with rules and
regulations and generally accepted state accounting principles and reflect amounts that are
based on the best estimates and informed judgment of management with appropriate
consideration to materiality.
In this regard, management maintains a system of accounting and reporting which
provides the necessary internal controls to ensure that transactions are properly authorized and
recorded, assets are safeguard against unauthorized use or disposition and liabilities are
recognized.

Condensed Balance Sheet
As of December 31, 2013
(With comparative figures for 2012)
2013
2012
Assets
Current assets
Cash (Note 5)
Receivables, net (Note 6)
Inventories (Note 7)
Prepayment and Deferred Charges
6,021,180.01
4,755,979.69
653,182.34
587,417.98
24,600.00
5,873,171.68
4,693,957.92
607,510.03
571,703.73
-
Non-current assets
Property, Plant and Equipment, net (Note 8)
Other Asset
43,306,737.42
39,414,413.95
3,892,323.47
41,706,715.96
40,739,873.95
966,842.01
Total assets
49,327,917.43
47,579,887.64
Liabilities
Current Liabilities (Note 9)
Non-current Liabilities (Note 10)
66,710,257.34
27,144,824.32
39,565,433.02
58,345,638.01
18,024,716.08
40,320,921.93
Equity
Total liabilities and equity
Liabilities and equity
(17,382,339.91) P
49,327,917.43
(See Accompanying Notes to Financial Statements)
(10,765,750.37)
47,579,887.64

Condensed Statement of Cash Flows
For the Year ended December 31, 2013
2013
2012
Cash flows from operating activities

Cash inflows
Cash outflows
Cash provided by operating activities
P
P
P
P
6,985,701.76
(4,879,493.75)
2,106,208.01
Cash flows from investing activities

Cash inflows
Cash outflows
Cash used in investing activities
(1,050,000.00)
(1,050,000.00)
Total cash provided by (used in) operating, investing

and financing activities
P
(4,051,834.30)
(5,108,042.31)
(5,108,042.31)
Cash flows from financing activities

Cash inflows
Cash outflows
Cash used in financing activities
Cash, beginning of period
4,693,957.92
8,745,792.22
Cash, end of period
4,693,957.92
4,693,957.92

Condensed Statement of Changes in Equity
2013
Government equity, beginning of period

Additions (deductions)
Government equity, end of period
P
P
Donated capital, beginning of period

Donated capital, end of period
Retained earnings (deficit), beginning of period

Retained earnings (deficit), end of period
Total Equity
2012
15,873,897.61
825,045.09
16,698,942.70
P
P
15,468,397.61
405,500.00
15,873,897.61
(26,639,647.98) P
(7,441,634.63)
(34,081,282.61) P
(21,386,316.80)
(5,253,331.18)
(26,639,647.98)
(17,382,339.91) P
(10,765,750.37)

Condensed Statement of Income and Expenses
2013
Income
Business and Service Income (Note 11)

Other Income (Note 12)
Rebates and discounts
7,343,673.42
2012
P
7,201,534.71
155,672.16
(13,533.45)
Expenses
Personal Services
Maintenance and Other Operating Expenses
Financial Expenses (Note 13)
13,442,637.20
2,772,819.81
4,023,846.71
6,645,970.68
Net Income (Loss)
(6,098,963.78) P
(See Accompanying Notes to Financial Statements)
6,674,271.39
6,643,078.20
40,728.03
(9,534.84)
11,212,859.25
2,333,603.83
2,981,777.81
5,897,477.61
(4,538,587.86)
NOTES TO FINANCIAL STATEMENTS

CY 2013
1. Agency Background
1.1
The Lal-lo Water District (LWD) was created in early 1990s. However, it did not
attain its normal business operations and was abandoned due to unknown reasons.
Later, in April 2003, thru the initiative of Mayor Florante C. Pascual, together with
the Municipal Council, Lal-lo Water District was formed pursuant to Presidential
Decree No. 198, as amended.
1.2
The Districts Mission is to make quality water accessible to every Lal-loqueno

and its Vision is to promote good health and sanitation through potable water
service.
1.3
The programs and expansion were made and carried out by the Lal-lo Water District
Board of Directors and management in partnership with LWUA so that water, which
is an essential part of life, reaches the taps of all if not majority of the people in the
service area of the municipality.
1.4 The district is categorized as a small water district. The Lal-lo Water District is
managed through policies formulated by its Board of Directors, in accordance with
the regulation imposed by the Local Water Utilities Administration, National
Government Agencies and other regulatory and oversight bodies.
2. Basis of Financial Statements
2.1
The water district adopts the Commercial Practices System- New Government
Accounting System (CPS-NGAS) Manual for Local Water District prescribed by the
Local Water Utilities Administration (LWUA). The Financial Statements were
presented using the chart of accounts in the CPS-NGAS.
3. Significant Accounting Policies

3.1
Accrual Basis of Accounting Expenses/Income are recognized when

incurred/realized and reported in the financial statements in the period to which they
relate. Payable accounts are likewise recognized and recorded in the books of
accounts only upon acceptance of the goods/inventory/other assets and rendition of
services to the agency.
3.2
Disbursement Procedure In recording expenditures, the Voucher System is

followed in which vouchers payable is credited prior to payment and debited when
paid.
3.3
First-In, First-Out Costing Method - Supplies and materials purchased for

inventory purposes are recorded at cost using the First-In, First-Out (FIFO) method.
3.4
Property, Plant and Equipment (PPE) Property, Plant and Equipment are
recorded at historical cost including installation, survey services, freight and other
incidental expenses incurred in the acquisition less accumulated depreciation.
Construction in progress account is used for all capital expenditures relating to the
implementation of project and shall be closed to proper account upon project
completion.
3.5
Method of Depreciation - The straight line method is used in the computation of

depreciation. A residual value equivalent to 10% is maintained before dividing the
cost by the estimated useful life.
4. Correction of Fundamental Errors

Errors of prior years are corrected by using the Prior Period Adjustment account and
eventually closed to Retained Earnings at year end. Errors affecting current year
operations are charged to the current years accounts.
5. Cash
5.1 This account is composed of the following:
Accounts
Cash on Hand
Working Fund- District
Working Fund- Project
Cash in Bank (LBP-LWUA)
Cash in Bank (PNB, Bank Reserve)
Cash in Bank (Coop. Bank of Cagayan)
Cash in Bank (LBP-District)
Cash in Bank (PNB, Terminal Pay)
Cash in Bank (PNB, Loan Amortization)
Total
2013
P
13,821.81
5,000.00
5,000.00
955,201.98
770,841.45
120,818.61
273,057.44
360,430.13
2,251,808.27
P 4,755,979.69
2012
P
16,065.93
5,000.00
0.00
2,916,447.57
544,584.35
70,973.98
360,635.98
180,106.77
600,143.34
P 4,693,957.92
5.2. Cash on Hand includes undeposited collections from water sales.

5.3. Working Fund represents amount set aside which is used for small expenditures.
6. Receivables, net
6.1. This account consists of the following:
Accounts
Accounts Receivable Customers
Accounts Receivable Others
Total
Allowance for Doubtful Accounts
Receivables, net
2013
2012
650,804.19 P 606,489.51
34,490.75
19,516.51
685,294.94
626,006.02
(32,112.60)
(18,495.99)
653,182.34 P 607,510.03
6.2 Accounts Receivable Customers account represents amount due from customers
for water sales.
6.3 Accounts Receivable - Others represents material service connection fees due from
customers.
7. Inventories
7.1
This account consists of the following:
Accounts
Chemicals and Filtering Supplies Inventory
Other Inventories
Total
7.2
2013
P 16,500.90
560,872.08
P 587,417.98
2012
P 28,645.15
543,058.58
P 571,703.73
Other Inventories account consists of pipes, water meters and other materials used
for service connections.
8. Property, Plant and Equipment, net

8.1
This account is composed of the following:
Accounts
Land
Plant
Building and Other Structures
Office Equipment
Land Transport Equipment
Other Machinery and Equipment
Furniture and Fixture
Sub-total
Add: Construction Work in Progress
Less: Accumulated Depreciation
2013
456,000.00
35,641,486.74
1,949,493.11
208,976.35
114,550.00
6,643,806.82
63,983.50
45,078,296.52
3,282,806.49
8,946,689.06
P39,414,413.95
P
Property, Plant & Equipment, Net
10
2012
456,000.00
38,285,440.38
1,949,493.11
201,676.35
114,550.00
6,536,661.82
63,983.50
47,607,805.16
145,355.00
7,013,286.21
P40,739,873.95
P
8.2
The composition of Accumulated Depreciation is the following:
Accumulated Depreciation
Plant
Building and Other Structures
Office Equipment
Furniture and Fixture
Total
2013
P 5,698,931.72
363,725.04
158,356.16
28,337.88
2,659,165.58
38,172.68
P 8,946,689.06
2012
P 4,503,030.30
297,021.55
133,205.09
15,258.77
2,034,147.77
30,622.73
P 7,013,286.21
2013
P15,189,789.49
26,609.99
21,741.29
10,256.45
2,700.00
3,819.94
3,074.98
1,173,947.00
2012
P11,852,576.49
20,611.93
18,887.18
8,406.42
2,000.00
5,160.61
1,900.00
1,261,717.50
2,843,118.14
7,384,076.12
13,071.86
472,619.06
P27,144,824.32
1,581,400.64
3,113,375.17
9,825.14
148,855.00
P18,024,716.08
9. Current Liabilities
9.1

Accounts
Interest Payable
Due to National Government Agencies
Due to GOCC (GSIS Payable)
Due to GOCC (GSIS Loans Payable)
Due to GOCC (HDMF Payable)
Due to GOCC (HDMF Loans Payable)
Due to GOCC (Philhealth Payable)
Current Portion on Long Term Debt-2013
Current Portion on Long Term Debt-balance of
Prior Years
Loan Penalty Payable
Deferred Tax Liability (Franchise Tax)
Other Payables
Total
9.2
Due to National Government Agencies represents taxes withheld from payroll and
from purchases of goods and services.
9.3
Other Payables consists of the following:
Particulars
Materials received on account
Unpaid materials from supplier
Due to officers and employees (refunds BIR)
Total
11
2013
P 472,098.00
0.00
521.06
P 472,619.06
2012
3,500.00
145,355.00
0.00
P 148,855.00
P
10. Non Current Liabilities

This pertains to Loans Payable account which represents various loans received from
LWUA on various dates, with different terms and interest rates, to wit:
Particulars
2013
P40,320,921.93
( 1,173,947.00)
418,458.09
P39,565,433.02
Long term debt

Current portion of long term debt -2012
Additional loan releases
Total
2012
P41,582,639.43
(1,261,717.50)
0.00
P40,320,921.93
11. Business and Service Income

This pertains to Generation, Transmission & Distribution Income which consist of the
following:
Accounts
Metered Sales
Unmetered Sales
Miscellaneous Service Income
Penalty Charges
Total
2013
P 6,870,153.73
2,800.00
52,973.00
275,607.98
P 7,201,534.71
2012
P 6,349,931.55
8,298.00
35,866.00
248,982.65
P 6,643,078.20
2013
P
8,398.09
147,274.07
P 155,672.16
2012
6,844.83
33,883.20
40,728.03
2013
P 3,337,213.00
3,304,487.68
4,270.00
P 6,645,970.68
2012
P3,395,825.00
2,500,962.61
690.00
P5,897,477.61
12. Other Income

Accounts
Interest Income
Others
Total
13. Financial Expenses

Accounts
Interest expense
Loan Penalty Expenses
Bank Charges
Total
12
PART II - OBSERVATIONS AND RECOMMENDATIONS
PART II - OBSERVATIONS AND RECOMMENDATIONS

Financial and Compliance Audit
Unreconciled balances of Loans Payable account between the books of accounts of
the District and LWUA records
1.
The validity of the Loans Payable account amounting to P39,565,433.02 as of

December 31, 2013 in the books of accounts cannot be ascertained due to the
non reconciliation of the balance in the general ledger with the balance per
records of the Local Water Utilities Administration (LWUA) having a
discrepancy of P10,326,172.65.
1.1. Section 111 (1) Presidential Decree (PD) No. 1445, otherwise known as the
Government Auditing Code of the Philippines provides:
Keeping of accounts. The accounts of the agency shall be kept in
such detail as is necessary to meet the needs of the agency and at the
same time be adequate to furnish the information needed by fiscal or
control agencies of the government.
1.2. Audit of Loans Payable account showed that the balance as of December 31,
2013 reflected in the general ledger of the District did not tally with the
balance as recorded in the LWUA books of accounts. The balance of the said
account in the books of the District totaled to P39,565,433.02 while LWUA
records totaled to P29,239,260.37, having a discrepancy of P10,326,172.65.
Hence, the accuracy of the Loans Payable account as of December 31, 2013
cannot be ascertained, thereby affecting its fair presentation in the financial
statements.
1.3. The details of LWUA records are presented below:
Loan Account No.
4-2104A
4-2104B
4-2238
4-2445
Loans Outstanding
9,665,472.28
6,404,948.18
3,933,745.90
9,235,094.01
29,239,260.37
1.4. This is a reiteration of a previous years observation, which up to the year in

audit has not been acted upon by the management.
1.5. We recommended that the Accounting Processor reconcile the balance of
the Loans Payable per book of the District and per LWUA record in order
to ascertain the correct amount of Long-term Loans and to reflect the
appropriate adjustments.
13
1.6. Management agreed with the recommendation.

Donated land without Transfer Certificates of Title
2.
The land donated by the LGU of Lal-lo, where the plant and building and other
structures of the District are erected amounting to P5,524,649.99 and
P504,838.08, respectively, are not yet registered in the name of the District thus
exposing the risk of divestment on the possession of land.
2.1. Article 708 of the New Civil Code states that:
The Registry of Property has for its object the inscription or
annotation of acts and contracts relating to the ownership and other
rights over immovable property.
Sec. 76 of Presidential Decree 1445 states that:
Transfer of property between government agencies. Any
government property that is no longer serviceable or needed by the
agency to which it belongs may be transferred without cost or at an
appraised value, to other agencies of the government upon authority
of the respective heads of agencies in the national government, or
the governing bodies of Government Owned or Controlled
Corporations (GOCCs), other self governing boards or commission
or the government, or of the local legislative bodies for Local
Government Units (LGUs) concerned.
2.2. Verification of records disclosed that the land where the Districts plant and
building and other structures are erected amounting to P5,524,649.99 and
P504,838.08, respectively, were not yet titled in the name of the District. No
Transfer Certificates Title (TCTs) or any other documents showing proof of
ownership were presented during the audit.
Management alleged that there are Deeds of Donation of the land where the
office building and other structures are located. However, management failed
to produce these Deeds, thereby belying their existence.
2.3. This is a reiteration of a previous years observation, which up to the year in
2.4. We recommended that management secure the Deeds of Donation of the
two lots and submit the same to the Registry of Deeds to facilitate the
immediate transfer of title of ownership on the land where the Districts
plant and building and other structures are erected.
2.5. Management agreed with the recommendations.
14
Purchased lots without Transfer Certificates of Title totaling to P456,000.00

3.
The three parcels of land purchased from 2004 to 2012 and recorded in the
books of accounts amounting to P456,000.00 were not yet titled in the name of
the District contrary to Sec. 39 of Presidential Decree (PD) No. 1445, hence,
ownership over the property is not absolute.
3.1 Sec. 39 of P.D. 1445 provides that:
(1)
xxx
(2) In case of deeds to property purchased by any government agency, the

Commission shall require a certificate of title entered in favor of the
government or other evidence satisfactory to it that the title is in the
government
(3)
It shall be the duty of the officials or employees concerned including
those in non-government entities under audit, or affected in the audit of
government and non-government entities, to comply promptly with these
requirements. Failure or refusal to do so without justifiable cause shall
constitute a ground for administrative disciplinary action as well as for
disallowing permanently a claim under examination, assessing additional
levy or government share, or withholding or withdrawing government
funding or donations through the government.
3.2
Ownership to land and land rights are established on the basis of genuine
Original Certificate of Title (OCT) or Transfer Certificate of Title (TCT)
registered with the Registry of Deeds, free from any liens and encumbrances.
3.3 Review of the documents in relation to the lands purchased by the District
disclosed that the following three lots were not in the name of the District, to
wit:
Year Acquired
2004
Location
Sta. Maria, Lal-o
Area
240 sq.m.
2012
Magapit, Lal-lo
70sq.m.
140,000.00
2012
Catayauan, Lal-lo
400sq.m
280,000.00
Total
Acquisition Cost
P 36,000.00
P 456,000.00
The Deeds of Sale were the only proof of ownership and basis in recording the
Land account in its books of accounts, which were presented by the District.
Management failed to transfer the purchased lots in the name of the District
15
because they believed that the Deeds of Sale were sufficient proofs of
ownership of the lots.
3.4 Moreover, the District has not paid the Tax Declarations of Real Property for
the two parcels of land located at Sta. Maria and Magapit, Lallo. Land
conveyance is effected through registration in the Registry of Land Titles and
Deeds, which has an office in every city and municipality.
Although there were Deeds of Sale executed, this document is not registered
with the Registry of Deeds. This exposes the District to risk of possible loss of
properties as ownership over the lots is not absolute.
3.5 This is a reiteration of a previous years observation, which up to the year in
3.6 We recommended that management facilitate the titling of the three lots in
the name of the District to protect the interest of the government and
avoid the possibility of third party claims over said property.
3.7 Management agreed with the recommendations.
PhilGEPS account is not used in its procurement activities

4.
The Water District is not using its Philippine Government Electronic

Procurement System (PhilGEPS) account in the conduct of its procurement
activities contrary to the requirement of Article No. III Section 8 of the
Republic Act No. 9184 or otherwise known as Government Procurement
Reform Act of the Philippines.
4.1
Article III Section 8 of the Republic Act No. 9184, also known as Government
Procurement Reform Act of the Philippines, provides that:
To promote transparency and efficiency, information and
communications technology shall be utilized in the conduct of procurement
procedures. Accordingly, there shall be a single portal that shall serve as the
primary source of information on all government procurement. The
Government Electronic Procurement System (G-EPS) shall serve as the
primary and definitive source of information on government procurement.
4.2
Upon inquiry, we were informed that the Water District is duly registered with
PhilGEPS. However, the account was not used in the posting of the Invitation
to Apply for Eligibility and to Bid for various projects/procurements conducted
by the District for CY 2013.
16
Further verification revealed that there were no attached Bid Abstract Notice
and Award Notice Abstract in the disbursement vouchers showing proof of
posting in the PhilGEPS.
4.3
We recommended that the District post an Invitation to Apply for

Eligibility and to Bid in the PhilGEPS to promote transparency in all of its
procurement transactions and to extend equal opportunity to private
suppliers who are eligible to participate in public bidding.
4.4
Management agreed with the recommendation.
Use of Other Payables account instead of the Accounts Payable account

5.
The account Other Payables was used instead of Accounts Payable to account
for unpaid purchases of material from suppliers contrary to the definition of
accounts embodied in the chart of account used by the water district in
recording its financial transactions.
5.1
The Commercial Practices Systems Manual for Water Districts approved under
the jurisdiction of Local Water Utilities Administration (LWUA) provides the
definition of the following account titles in their chart of accounts:
Other Payables included other liabilities not falling under any of the
specific liability accounts.
Accounts Payable consists of amount of indebtedness arising from trade/
business.
5.2
Our audit revealed that unpaid materials purchased from suppliers are being
recognized in the Other Payables account which contradicts the use and
purpose of the account as stated in its aforementioned definition. The Accounts
Payable is the proper account to be used based on its definition as stated above.
5.3
We recommended that the Accounting Processor reclassify the unpaid

purchases of materials booked in the Other Payable account to Accounts
Payable and to use said account in recording purchases of all types of
inventories.
5.4
17
Gender and Development

6. The agency did not appropriate five percent (5%) of its annual budget for 2013
for GAD purposes which is not in compliance with the General Provisions of the
General Appropriations Act (GAA) for CY 2013, particularly Section 28 thereof,
thereby compromising the agencys mandate and capability to effectively address
gender issues and promote womens empowerment.
6.1
Sec. 28 of 2013 GAA. Programs/Projects Related to Gender and Development.

All agencies of the government shall formulate a Gender and
Development (GAD) Plan designed to address gender issues within their
concerned sectors or mandate and implement applicable provisions
under R.A. 9710 or the Magna Carta of Women, Convention on the
Elimination of All Forms of Discrimination Against Women, the Beijing
Platform for Action, the Millenium Development Goals (2000-2015), the
Philippine Plan for Gender-Responsive Development (1995-2025), and
the Philippine Development Plan (2011-2016).
The GAD Plan shall be integrated in the regular activities of the
agencies, which shall be at least five percent (5%) of their budgets. For
this purpose, activities currently being undertaken by agencies which
relate to GAD or those that contribute to poverty, alleviation, economic
empowerment especially of marginalized women, protection, promotion,
and fulfillment of womens human rights, and practice of genderresponsive governance considered sufficient compliance with said
requirement. Utilization of the GAD budget shall be evaluated based on
GAD performance indicators identified by said agencies.
The preparation and submission of Annual GAD Plans and
annual GAD Accomplishment Reports shall be guided by J.C. No. 200401 dated April 5, 2004 issued by DBM, NEDA, and Philippine
Commission on Women (formerly the National Commission on the Role
of Filipino Women), as well as other guidelines on GAD Planning and
Budgeting that may be issued by the appropriate oversight agencies.
6.2
Verification disclosed that the District failed to appropriate five percent (5%)
of its annual budget for CY 2013 which is not in compliance with the
aforecited GAA provision thereby compromising the capability to effectively
address gender issues and promote womens empowerment.
18
6.3
We recommended that the District prepare a GAD Plan and allocate 5%

of its total budget for implementation.
6.4
Compliance with Tax Laws, Rules and Regulations

7.
8.
The District has complied with tax laws and appropriately withheld taxes form
payment of goods and services, contracts, as well as income taxes of employees,
and franchise tax in accordance with tax laws, rules and regulations.
7.1
Verification of the Districts compliance with tax laws disclosed that the
District paid Income and Withholding Taxes amounting to P529,665.90 and
remitted the same to the Bureau of Internal Revenue for CY 2013.
7.2
We recommended that the District continue to comply with tax laws, rules
and regulations.
7.3
GSIS Premiums and Contributions

For CY 2013, a total amount of P247,642.17 of GSIS premiums were deducted from
the salaries of officials and employees and have been remitted in accordance with R.A
No. 8291.
9.
Settlement of Accounts
As of December 31, 2013, there were no issued suspensions, charges and
disallowances to the District.
19
PART III - STATUS OF IMPLEMENTATION

OF PRIOR YEARS RECOMMENDATIONS
20
PART III - STATUS OF IMPLEMENTATION OF PRIOR YEARS

RECOMMENDATIONS
Audit Observation
/Recommendation
Management
Action
Ref.
1. The validity of the Loans Payable AAR

account amounting to P41,582,639.43 as 2012
of December 31, 2012 in the books of
accounts cannot be ascertained due to
the non reconciliation of the balance in
the general ledger with the balance per
records of the Local Water Utilities
Administration (LWUA) having a
discrepancy of P11,303,922.09.
Status of
Implementation/
Reasons for
Partial/Non
Implementation
Not
Implemented.
Reiterated in
Part II, Finding
No.1 of this
Report.
We recommended that the Accounting

Processor reconcile the difference between
the balance of the Loans Payable per book
of the District and per LWUA record in
order to ascertain the correct amount of
Long-Term Loans and to reflect the
appropriate adjustments.
2. The District failed to compute AAR
depreciation on its depreciable assets in 2012
violation of Secs. 67 and 68 of the
NGAS Manual and COA Circular No.
2004-003, thereby overstating the asset
accounts and understating the expense
accounts presented in the financial
statements.
We recommended that management
comply strictly with the provisions
prescribed in the above cited guidelines on
the computation of the depreciation of the
depreciable assets in order to present fairly
the valuation and presentation of the
affected PPE accounts on the financial
statements and the results of its
operations.
20
The management
provided for the
right amount of
Depreciation
Expense through
a proper adjusting
journal entry.
Fully
Implemented.
Audit Observation
/Recommendation
Management
Action
Ref.
3. The land donated by the LGU of Lal- AAR

lo where the plant and building and 2012
other structures of the District are
erected amounting to P5,524,649.99 and
P504,838.08, respectively, are not
owned absolutely by the District due to
the absence of Transfer Certificate of
Titles (TCTs), thus exposing the risk of
divestment on the possession of land.
Status of
Implementation/
Reasons for
Partial/Non
Implementation
Not
Implemented.
Reiterated in
Part II, Finding
No. 2 of this
Report.

facilitate the titling of the two lots by
assessing the adequacy of documents that
will support the data for titling. Prepare
plans to initiate activities on how to
pursue complete titling process of the two
(2) lots promptly in order to have an
absolute ownership of the land where the
Districts plant and building and other
structures are constructed.
4. The balance of Other Assets account AAR
of P966,842.01 in the Balance Sheet is 2012
understated
due
to failure of
management to record unserviceable
properties
in
the
amount
of
P2,925,481.46 that are still recorded
under the PPE account, contrary to Sec.
143, Volume III of the National
Government
Accounting
System
(NGAS) Manual.
require the Senior Accounting Processor
to immediately draw a Journal Entry
Voucher to reclassify the unserviceable
properties from the PPE to Other Assets
account in order to present fairly the
21
Proper journal
entry was
recorded to
reclassify the
unserviceable
properties from
Property, Plant
and Equipment
account to the
Other Assets
account.
Fully
implemented.
Management
Action
Audit Observation
/Recommendation
affected accounts
statements.
in
the
Ref.
Status of
Implementation/
Reasons for
Partial/Non
Implementation
financial
Not
Implemented.
Reiterated in
Part II, Finding
No. 3 of this
Report.
5. The validity of ownership of three (3) AAR

parcels of land purchased from 2004 to 2012
2012 and recorded in the books of
accounts amounting to P456,00.00 could
not be ascertained due to the absence of
Transfer Certificates of Title (TCT)
which is contrary to Sec. 39 of
Presidential Decree (PD) No. 1445.
facilitate the titling of the three lots by
assessing the adequacy of documents that
will support the data for titling. Prepare
plans to initiate activities on how to
pursue complete titling process of the
three lots promptly in order to present the
correct amount of its Land account
recorded in the books of accounts.
6. Payments of gasoline totaling to AAR
P69,223.63 were made without complete 2012
documentation in violation of Section
4(6) of Presidential Decree No. 1445,
thus casting doubts as to the propriety
of these disbursements.
Complete
documentation
was observed
pertaining to
these transactions
during 2013.
Fully
implemented.
We recommended that the District ensure

that all disbursements be supported with
complete documentation pursuant to
Section 4(6) of PD 1445.
7. Procurement of one (1) unit printer, AAR
surge protector and uninterrupted 2012
power supply amounting to P7,300.00
was erroneously recorded as Office
22
Fully
An adjusting
entry was effected implemented.
to correct the
error committed.
Audit Observation
/Recommendation
Management
Action
Ref.
Status of
Implementation/
Reasons for
Partial/Non
Implementation
Supplies Expenses instead of IT

Equipment, thus overstating the
expenses and understating the assets of
the District of same amount in the
Financial Statements.
We recommended that the Accounting

Processor make an adjusting entry to
reclassify the affected accounts for fair
presentation in the Financial Statements.
8. The agency did not appropriate five AAR
(5%) percent of its annual budget for
2012
2012 for GAD purposes which is not in
compliance with the General Provisions
of the General Appropriations Act
(GAA) for CY 2012, particularly
Section
28
thereof,
thereby
compromising the agencys mandate
and capability to effectively address
issues
and
promote
womens
empowerment.
We recommended that the District prepare
GAD Plan and allocate 5% of its total
budget for implementation.
23
Not
Implemented.
Reiterated in
Part II, Finding
No. 6 of this
Report.
Annex - A
Page 1 of 3

Detailed Balance Sheet
As of December 31, 2013
2013
2012
13,821.81 P
10,000.00
4,732,157.88
4,755,979.69
16,065.93
5,000.00
4,672,891.99
4,693,957.92
ASSETS AND OTHER DEBITS

CURRENT ASSETS
Cash
Cash- Collecting Officer
Working Fund
Payroll Fund
Cash in Bank- Local Currency
Cash in Bank- Foreign Currency
Total
Receivable Accounts
Accounts Receivable
Allowance for Doubtful Accounts
Accounts Receivable- Net
Notes Receivable
`
Total
Other Receivables
Advances to Officers and Employees
Due from Officers and Employees
Receivable- Disallowances/Charges
Rent/lease Receivable
Insurance/Reinsurance Claims Receivable
Other Receivable
Total
Inventories
Office Supplies Inventory
Fuel, Oil and Lubricants
Chemicals and Filtering Supplies Inventory
Maintenance Supplies Inventory
Service Connection Materials Inventory
Transmission and Distribution Materials Inventory
Construction Materials Inventory
Other Inventories
Total
Prepayments, Deposits and Deferred Charges
Prepaid Rent
Prepaid Insurance
Advances to Contractors
Guaranty Deposits
Other Prepayments and Deposits
Other Deferred Charges
Total
TOTAL CURRENT ASSETS
650,804.19
(32,112.60)
618,691.59
618,691.59
34,490.75
34,490.75
10,045.00
16,500.90
560,872.08
587,417.98
(3,000.00)
27,600.00
24,600.00
6,021,180.01
626,006.02
(18,495.99)
607,510.03
607,510.03
28,645.15
543,058.58
571,703.73
5,873,171.68
Annex - A
Page 2 of 3
NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
Land and Other Improvements
Land
Land Improvements
Accumulated Depreciation- Land Improvements
Total
Plant, Buildings and Structures
Plant (UPIS)
Accumulated Depreciation- Plant
Buildings and Other Structures
Accumulated Depreciation- Buildings and Other Structures
Total
Equipment and Machinery
Office Equipment
Accumulated Depreciation- Office Equipment
Accumulated Depreciation Land Transport Equipment
Accumulated Depreciaton- Other Machinery and Equipment
Total
Furniture, Fixtures and Books
Furniture and Fixtures
Accumulated Depreciation- Furniture and Fixtures
Books
Total
Construction-in-Progress
Construction-in-Progress- Plant
Construction-in-Progress- Buildings and Other Structures
Total
TOTAL PROPERTY, PLANT AND EQUIPMENT
OTHER ASSETS
Other Assets
TOTAL OTHER ASSETS
TOTAL ASSETS AND OTHER DEBITS
456,000.00
456,000.00
456,000.00
456,000.00
35,641,486.74
(5,698,931.72)
1,949,493.11
(363,725.04)
31,528,323.09
38,285,440.38
(4,503,030.30)
1,949,493.11
(297,021.55)
35,434,881.64
208,976.35
(158,356.16)
114,550.00
(28,337.88)
6,643,806.82
(2,659,165.58)
4,121,473.55
201,676.35
(133,205.09)
114,550.00
(15,258.77)
6,536,661.82
(2,034,147.77)
4,670,276.54
63,983.50
(38,172.68)
25,810.82
63,983.50
(30,622.73)
33,360.77
1,115,285.77
2,167,520.72
3,282,806.49
39,414,413.95
145,355.00
145,355.00
40,739,873.95
3,892,323.47
3,892,323.47
49,327,917.43 P
966,842.01
966,842.01
47,579,887.64
Annex - A
Page 3 of 3
LIABILITIES, EQUITY AND OTHER CREDIT ACCOUNTS
CURRENT LIABILITIES
Payable Accounts
Accounts Payable
Notes Payable
Insurance Premium Payable
Pension and Retirement Benefits Payable
Total
Inter-Agency Payables
Due to National Government Agencies (BIR, etc.)
Due to Government Owned and/or Controlled Corporation
Due to Local Government Units (in-Lieu Share, etc.)
Total
26,609.99 P
41,592.66
68,202.65
Other Payables
Due to Officers and Employees
Contractor's Security Deposits
Accrued Light and Power
Other Payables
Total
20,611.93
36,354.21
56,966.14
521.06
472,098.00
472,619.06
148,855.00
148,855.00
4,017,065.14
15,189,789.49
7,384,076.12
26,590,930.75
2,843,118.14
11,852,576.49
3,113,375.17
17,809,069.80
13,071.86
13,071.86
9,825.14
9,825.14
TOTAL CURRENT LIABILITIES
27,144,824.32
18,024,716.08
NON-CURRENT LIABILITIES
Loans Payable
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
39,565,433.02
39,565,433.02
66,710,257.34
40,320,921.93
40,320,921.93
58,345,638.01
Loans/ Lease Payable

Current Portion of Long-term Debt
Interest Payable
Loan Penalty Payable
Lease Payable
Total
DEFERRED CREDITS
Deferred Tax Liability (Franchise Tax)
Deferred Income from Penalty Charges
Customers' Deposit
Other Deferred Credits
TOTAL DEFERRED CREDITS
EQUITY
Government Equity
Capital/Equity Reserve
Donated Capital (OPIC)
Retained Earnings
TOTAL EQUITY
TOTAL LIABILITIES, EQUITY AND OTHER CREDIT ACCOUNTS
P
16,698,942.70
(34,081,282.61)
(17,382,339.91)
49,327,917.43 P
-
15,873,897.61
(26,639,647.98)
(10,765,750.37)
47,579,887.64
-
Annex - B
Page 1 of 3

Detailed Statement of Income and Expenses
2013
Business and Service Income:
Generation, Transmission and Distribution Income
Rent/Lease Income
Interest Income
Other Business and Service Income
Fines and Penalties- Service Income
Discounts
Rebates
Total Business and Service Income
Less: Operating Expenses:
Operation Expenses:
Personal Services
Salaries and Wages
Personnel Economic Relief Allowance (PERA)
Additional Compensation (ADCOM)
Representation Allowance
Transportation Allowance
Clothing and Uniform Allowance
Monetization of Leave Credits
Honoraria (Directors' Fees & Remunerations,etc)
Year-end Bonus
Overtime and Holiday Pay
Other Bonuses and Allowances
Life and Retirement Insurance Contributions
PAG-IBIG Contributions
PHILHEALTH Contributions
ECC Contributions
Provident Fund Contributions
Other Personnel Benefit Contributions
Pension Benefits- Regular
Retirement Benefits - Regular
Vacation and Sick Leave Benefits
Other Personnel Benefits
Total Personal Services
Other operations Expenses
Office Supplies Expense
Fuel, Oil and Lubricants Expenses
Other Supplies Expenses
Travel Expenses
Training and Scholarship Expenses
Water
2012
6,872,953.73 P
8,398.09
52,973.00
275,607.98
(5,831.62)
(7,701.83)
7,196,399.35
6,643,078.20
6,844.83
33,883.20
(9,534.84)
6,674,271.39
1,867,477.82
74,499.98
74,499.93
58,000.00
58,000.00
25,000.00
176,256.00
113,649.00
30,628.13
61,000.00
139,712.16
7,500.00
14,812.50
6,000.00
65,784.29
2,772,819.81
1,501,885.00
120,000.00
48,000.00
48,000.00
25,000.00
187,156.00
84,822.50
21,735.84
60,000.00
121,789.80
6,000.00
11,150.00
6,000.00
92,064.69
2,333,603.83
43,494.20
40,568.76
125,924.00
96,510.00
-
63,241.88
35,380.30
119,363.00
28,300.00
-
Annex - B
Page 2 of 3
Electricity
Fuel
Postage and Deliveries
Telephone Expenses- Landline
Telephone Expenses- Mobile
Internet Expenses
Printing Expenses
Advertising, Promotional and Marketing Expenses
Taxes, Duties and Licenses
Fidelity Bond Premium
Franchise and Regulatory Requirements Expenses
Insurance Premiums
Representation Expenses
Awards and Rewards
Indemnities and Other Claims
Rent/ Lease Expenses
Survey Expenses
Research, Exploration and Development Exp.
Generation, Transmission and Distribution Exp.
Extraordinary and Miscellaneous Expenses
Membership Dues and Cont. to Organizations
Cultural and Athletic Expenses
Other Subsidies
Donations
Legal Services
Auditing Services
General/Janitorial Services
Security Services
Computer Data Processing Services
Other Professional Services
Doubtful Accounts Expenses
Depreciation - Land Improvements
Depreciation - Plant (UPIS)
Depreciation - Buildings and Other Structures
Depreciation - Office Equipment
Depreciation - Communication Equipment
Depreciation - Laboratory Equipment
Depreciation - Land Transport Equipment
Depreciation - Other Machinery and Equipment
Depreciation - Furniture and Fixtures
Other Maintenance and Operating Expenses
Total Other Operations Expenses
Total Operation Expenses
40,688.71
2,139.60
11,062.61
16,200.00
2,988.00
61,972.00
12,095.00
172,167.78
59,974.00
1,451,113.54
900.00
360.00
10,300.00
100.00
36,205.63
1,500.00
13,616.61
945,218.03
58,484.87
24,165.57
13,079.11
513,531.30
7,549.95
2,005.00
3,763,914.27
6,536,734.08
32,029.95
1,339.00
24,217.90
15,600.00
1,785.00
30,046.00
14,776.00
159,083.90
22,571.00
1,010,005.69
5,056.00
6,000.00
4,650.00
1,000.00
11,423.76
625,095.47
43,894.19
20,461.35
13,078.93
357,240.52
3,792.87
2,649,432.71
4,983,036.54
Maintenance Expenses:
Repairs and Maintenance - Plant (UPIS)
Repairs and Maintenance - Bldgs. & Other Struct.
Repairs and Maintenance - Office Equipment
216,455.44
5,200.00
270,828.10
30,156.00
1,383.00
Annex - B
Page 3 of 3
Repairs and Maintenance - Laboratory Equipment

Repairs and Maintenance - Land Transport Equip't
Repairs and Maintenance - Construction Equip't
Repairs and Maintenance - Other Mach.and Equip't
Repairs and Maintenance - IT Equipment
Repairs and Maintenance - Communication Equipment
Repairs and Maintenance - Artesian Wells, Reservoir
Repairs and Maintenance - Furniture and Fixtures
Total Maintenance Expenses
Total Operation and Maintenance Expenses
Utility Operating Income
Other Income
Gain on Sale of Assets
Gain on Investment
Other Gains
Subsidy from National Government
Subsidy from local Government Units
Subsidy from Gov't Owned and/or Controlled Corp.
Other Subsidy Income
Grants and Donations
Other Income
Total Income
Miscellaneous Income Deductions
Loss on Sale of Assets
Loss of Assets
Other Losses
Net Income Before Interest & Financial Charges
Bank Charges
Commitment Fees
Documentary Stamps Expenses
Interest Expenses
Loan Penalty Expenses
Net Income (Loss) for the Period
P
13,232.00
24,750.00
295.00
259,932.44
6,796,666.52
399,732.83
6,130.00
23,848.00
332,345.10
5,315,381.64
1,358,889.75
147,274.07
547,006.90
1,358,889.75
547,006.90
(4,270.00)
(3,337,213.00)
(3,304,487.68)
(6,098,963.78) P
1,358,889.75
(690.00)
(3,395,825.00)
(2,500,962.61)
(4,538,587.86)
Annex - C
Page 1 of 1

Detailed Statement of Changes in Equity
2013
Government equity, beginning of period

Government equity, end of period
Donated capital, beginning of period

Donated capital, end of period
Retained earnings (deficit), beginning of period
Prior Period Adjustment
Adjustments during the year
Net Loss
Retained earnings (deficit), end of period
Total Equity
2012
15,873,897.61
825,045.09
16,698,942.70
15,468,397.61
405,500.00
15,873,897.61
(26,639,647.98)
(1,342,670.85)
(6,098,963.78)
(34,081,282.61)
(21,386,316.80)
(714,743.32)
(4,538,587.86)
(26,639,647.98)
(17,382,339.91) P
(10,765,750.37)
Annex - D
Page 1 of 1

Detailed Statement of Cash Flows
2013
Cash Flows from Operating Activities
Cash Inflows:
Collection of Water Bills
P
Collection of Other Revenues
Refund of overpayment of expenses and Cash Advances
Receipt from Project
Working Fund
Guarantee Deposit from customer
Total Cash Inflows
Cash Outflows:
Payment of Operating Expenses:
Payroll
Fuel/Power for Pumping
Chemicals
Other Operation and Maintenance Expenses
Purchase of Supplies Inventory
Total Cash Outflows
Total Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Cash Inflows:
Proceeds from Short-Term Investments
Total Cash Inflows
Cash Outflows:
Purchase/construction of
UPIS
Total Cash Outflows
Total Cash Used by Investing Activities
Cash Flows from Financing Activities
Cash Inflows:
Proceeds from Borrowings (Loans Payable)
Cash Outflows:
Cash Payment of interest on loans payable and other financial charges
Total Cash Used by Financing Activities
Cash Provided (Used) by Operating, Investing and Financing Activities
Add: Cash and Cash Equivalents, Beginning
Cash and Cash Equivalents, Ending
P
2012
7,071,186.57
695,389.09
14,727.76
837,256.18
5,000.00
3,000.00
8,626,559.60
(1,664,101.22)
(1,179,561.11)
(32,359.72)
(3,299,769.11)
(566,549.74)
(6,742,340.90)
1,884,218.70
(1,424,371.75)
(808,399.48)
(16,800.00)
(2,176,157.80)
(453,764.72)
(4,879,493.75)
2,106,208.01
(1,822,196.93)
(1,822,196.93)
(1,822,196.93)
(5,108,042.31)
(5,108,042.31)
(5,108,042.31)
62,021.77
4,693,957.92
4,755,979.69
-
6,978,539.11
7,162.65
6,985,701.76
(1,050,000.00)
(1,050,000.00)
(4,051,834.30)
8,745,792.22
4,693,957.92
-

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