Tagkawayan Water District

NOTES TO FINANCIAL STATEMENTS 2016

1. Agency Background

The Tagkawayan Water District was established on June 6, 1980 with official turn-over of ownership, management and operation from the Municipality of Tagkawayan on July 31, 1980. A Conditional Certificate of Conformance No. 130 was issued by the Local Water Utilities Administration (LWUA) to the Water District on September 12, 1980. It started its operation on May 1, 1983.

Tagkawayan Water District is categorized as D, with 3,571 concessionaires as of December 31, 2016. It operates three water supply systems namely: Sakang River, Bamban Deepwell and Payapa Deepwell.

It has fifteen (15) employees on a permanent basis and is headed by a General Manager, Mr. Cirilo T. Frondoso.

The objectives of the District as mandated under P.D. 198, otherwise known as the Local Water Utilities Act are as follows:

1. Acquire, install, improve, maintain and operate water supply and distribution system for domestic use;

2. To provide, maintain and operate waste water collection treatment and disposal facilities, and;

3. To conduct such other functions and operations incidental to water resource development, utilization and disposal within the district, as necessary or incidental to said program.

The present members of the Board of Directors, the policy-making body of the District are as follows:

2. Basis of Financial Statement Presentation

The Financial Statements have been prepared in accordance with the Generally Accepted State Accounting Principles and Standards.

3. Summary of Significant Accounting Policies

1. Conversion to the New Government Accounting System (NGAS)

The District used the Commercial Practices System designed by LWUA in the recording of financial transactions and in the preparation of financial reports up to May 2006 and was converted to the New Government Accounting System (NGAS) effective June 2006.

2. Accounting for Fixed Assets

Property, Plant and Equipment is stated at cost, net of accumulated depreciation. Depreciation is computed on a straight line basis over the estimated useful life of the asset.

3. Recognition of Income and Expense

The District adapts the accrual method of accounting, wherein revenues are recorded in the period in which the service is given. Expenses are recorded in the period wherein the benefits are received.

4. Inventory Valuation

Materials and supplies inventories are stated at cost.

4. Cash & Cash Equivalent

This account consists of:

                          Cash – Collecting Officer                              2,027.10

                          Working Fund                                             10,000.00

             Payroll Fund                                              278,347.60            QCRB SA 12-000014-17

                                                                                              10,000.00            QCRB CA 66-000016-17

                                                                                            288,347.60

             Cash in Bank - Local Currency

                                                                                            171,282.14            QCRB SA 12-000024-17

                                                                                              10,000.00            QCRB CA 66-000028-17

                                                               5,246,390.48            LBP CA 2442-1056-29

                       7,598,607.31             LBP CA 2442-1141-13

                                                                                        13,026,279.93

                           Total Cash                                           13,326,654.63

Cash on hand amounting to P 2,027.10 pertains to the District’s remaining year-end collection that was deposited on 01/03/2017.

Working Fund of P 10,000.00 is under the custody of Ms. Ma. Lourdes A. Bulaclac.

QCRB SA 12-000014-17 and QCRB CA 66-000016-17 pertain to the District’s payroll fund combo account. Further, QCRB SA 12-000024-17 and QCRB CA 66-000028-17 pertain to the District’s general fund combo account. These 4 accounts are all maintained at Quezon Capital Rural Bank, Tagkawayan branch.

LBP CA 2442-1056-29 pertains to the District’s general fund maintained at Land Bank of the Philippines, Gumaca branch.

LBP CA 2442-1141-13 pertains to the first release for District’s Salintubig NG 2012 fund from LWUA maintained at Land Bank of the Philippines, Gumaca branch.

5. Receivables

This account consists of the following:

Accounts Receivables-Customers Active Accounts (57)                           43,072.95 Inactive Accounts (315)                     313,243.51	356,316.46
Other Receivables- Customers w/ balances on service connections, penalties, etc.	48,539.77
Total	404,856.23
Less: allowance for Doubtful accounts	(16,526.07)
Net	P 388,330.16

6. Inventories

The account consists of unissued materials & supplies which are kept in store to be used in District’s operation:

Office Supplies Inventory Chemicals and Filtering Supplies Inventory	147,135.99   10,510.49
Maintenance Supplies Inventory Spare Parts Inventory  Construction Materials Inventory Other Inventories Total	753,897.52   14,629.45   23,305.20 170,168.09 P 1,119,646.74

7. Deposits

Guaranty Deposits of P 571,409.91, with SA 0620-030558-160, is maintained at Development Bank of the Philippines, Lucena branch, which is the counterpart of the liability account, Customers’ Deposit.

8. Property, Plant & Equipment

Property Plant & Equipment are carried at cost less depreciation. Major improvement including incidental costs are capitalized while costs of maintenance and repairs are charged to expenses.

Construction-in-Progress of P 7,575.00 is the pending concrete water tank at Bamban PS for the realignment of the distribution lines at barangays Bamban and Mapulot.

9. Other Assets

Intangible Assets is the TWD website (www.tagkawayanwaterdistrict.org.ph) worth P 24,999.00, with accumulated amortization of P 4,874.87.

Sinking Fund of P 1,173,024.32, with SA 2441-0151-54, is maintained at Land Bank of the Philippines, Gumaca branch.

Other Reserve Funds of P 510,909.48, with CA 0620-030558-030, is maintained at Development Bank of the Philippines, Lucena branch, which is TWD’s reserve for terminal leave benefits of the employees.

Unserviceable assets waiting for COA’s approval for disposal 88,993.55

Machineries on stock for emergency need of Pumping Stations 13,975.00 P 102,968.55

10. Current Liabilities

Inter-Agency Payables consist of:

Tax on Compensation was remitted on 01/07/2016, JEV 16-01-013 P 36,343.64

Tax on Purchases was remitted on 01/07/2016, JEV 16-01-013 26,771.66

GSIS premiums was remitted on 01/07/2016, JEV 16-01-013 52,141.88

GSIS UOLI premiums was remitted on 01/07/2016, JEV 16-01-013 727.94

GSIS Loans was remitted on 01/07/2016, JEV 16-01-013 20,601.82

Pag-ibig premiums was remitted on 01/07/2016, JEV 16-01-013 7,800.00

Pag-ibig Loans was remitted on 01/07/2016, JEV 16-01-013 9,282.19

PHIC premiums was remitted on 01/07/2016, JEV 16-01-013 5,500.00

Total Due to National Government Agencies P 159,169.13

Loans Payable – Current Portion of Long-term Debt for LWUA LA 4-1985 consists of the loan balance of P 1,169,354.00 for the period of January – December 2017. LWUA loan LA 3-199 was already fully paid on 12/12/2016, per JEV 16-12-644 and OR #0022996, per JEV 17-01-33.

Interest Payable of P 15,322.00 was cleared on 01/17/2017, per JEV 17-01-33.

10. Loans Payable

The account represents balance of loan from LWUA under the following loan accounts:

11. Deferred Credits

            The Customers’ Deposit of P 444,070.00 consists of the meter and guaranty deposits of customers.

12. Prior Year’s Adjustments:

1. Bank interests for 2015                                                   (13,075.74)

2. GSIS refund on 2013 Motor Vehicle Insurance                 (2,646.00)

3. Adjustment on Other Assets                                             21,686.83

4. Adjustment on LWUA loan balance                                       (27.00)

5. Adjustment on inventory 2015                                             (132.00)

6. Allowance for doubtful accounts                                     (18,623.50)

Total                                                                            P 12,817.41

Prepared by:                                                                                  Checked and Verified by:

MARIA CECILIA F. MAGPANTAY                                                   YOLANDA C. DAGOS

      Sr. Acctg. Processor A                                                                  Div. Mgr. C, Admin. & Finance