Republic of the Philippines COMMISSION ON AUDIT Commonwealth Avenue, Quezon City MANAGEMENT LETTER on the Audit of CEBU BUS RAPID TRANSIT PROJECT of the Department of Transportation For the Year Ended December 31, 2023 N REPUBLIC OF THE PHILIPPINES COMMISSION ON AUDIT NATIONAL GOVERNMENT AUDIT SECTOR CLUSTER 7 - PUBLIC WORKS, TRANSPORT AND ENERGY DEPARTMENT OF TRANSPORTATION 1 The Columbia Tower Ortigas Ave., Mundaluyong City OFFICE OF THE RESIDENT AUDITOR June 27, 2024 Secretary JAIME J. BAUTISTA Department of Transportation The Columbia Tower, Ortigas Ave., Mandaluyong City Dear Secretary Bautista: We are pleased to transmit the Management Letter on the audit of Cebu Bus Rapid Transit Project for the year ended December 31, 2023, in compliance with Section 2, Article IX-D of the Philippine Constitution, Section 43 of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the Philippines, and Section 8(b) of Republic Act No. 8182, or the Official Development Assistance Act of 1996. We request that a status report on the actions taken on the audit recommendations be submitted, both in hard and electronic copies, within sixty (60) days from receipt of this letter, using the Agency Action Plan and Status of Implementation template prescribed under COA Memorandum No. 2014-002 dated March 18, 2014. We express our appreciation for the valuable support and cooperation extended to the Audit Team by the officials and staff of the Agency. Very truly yours, Atty. CHER Y ANNE kES-SULLA, CPA DOTr-COLUMBIA Supervising - rdit GSD- RECORDS Audit Group C - DOTr 1 JUN. 2TIM202: -,JO 04 R lu Il il E PH ITPPINFS COMMISSION ON AUDIT INDEPENDENT AUDITOR'S REPORT Secretary JAILE J. BAUTISTA Department of Transpoirtation The Columbia Tower, OrLigas Ave., Mandaluvong City Report on the Audit of Financial Statements Utnqualified Opinion We have audited the accompanying Financial Statements of the Cebi us Rapid Transit Projeet (CBRTP) financed under the International Bank for Reconstruction and Development (IBRD) Loan No. 8444-PI and Clean Technology Fund (CTF) Loan No. TF701 7646-PH, both from the World Bank, and Credit Facil ity Agreement (CFA) Loan No. CPH 1007-02-R, from the Agence Francaise de Developpenient (AVD) and implemented by the Department of Transportation (DOTr), which comprise the Statemenis of Financial Position as at December 31, 2023, and the Stateienits of Financial Performance, Statements of Changes in Net Assets/Equity, Statements of Comparison of Budget and Actual Amiounts and Statements of Cash Flows for the year ffhen ended, and Notes to the Financial Statements, including a summary of significanut accountinag policies and other explanatory information. In our opinion, the accompanying Financial Statements present fairly, in all material respects, the financial position of the CBRTP of the DOTr as at December 31, 2023, and the results of its financial performance, cash flows, changes in net assets/equity and the comparison of budget and actual amounts for the year then ended, in accordance with Ihe International Public Sector Accounting Standards (IPSASs). a asis for Unqualified Opinion We conducted our audit in accordance with International Standards of Suprieme Audit Institutions (ISSAIs). Our responsibilities under those standards are further described in the Auditors Responsibilities for Ilie Audit of the Project Financial Statements section of our Report We are independent of the DOTr in accordance with the Revised Code of' Conduct and Ethical Standards for Commission on Audit Officials and Employees (Code of Ethics) together with the ethical requirements that are relevant to our audit of the Project Financial Statements in the Philippines and we have fulfiled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these Financial Statements in accordance with IPSAS, and for such internal control as Management determines is necessary to enable the preparation of Financial Statements that are free from material misstatements, whether due to fraud or error. Those charged with governance are responsible for overseeing the DOTr's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAls will always detect a material misstatement when it exits. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with ISSAIs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal control. * Obtain an understanding of internal control relevant to the audit 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 DOTr's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimate and related disclosures made by Management. 2 * Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. COMMISSION ON AUDIT Atty. CHERR(AN ES-SULLA, CPA Supervising Au itor Audit Group C - DOTr 1 June 27, 2024 3 N REPUBLIC OF THE PHILIPPINES COMMISSION ON AUDIT NATIONAL GOVERNMENT AUDIT SECTOR CLUSTER 7 - PUBLIC WORKS, TRANSPORT AND ENERGY DEPARTMENT OF TRANSPORTATION 1 The Columbia Tower Ortigas Ave., Mundaluyong City OFFICE OF THE RESIDENT AUDITOR June 27, 2024 Secretary JAIME J. BAUTISTA Department of Transportation The Columbia Tower, Ortigas Ave., Mandaluyong City Dear Secretary Bautista: We are pleased to transmit the Management Letter on the audit of Cebu Bus Rapid Transit Project for the year ended December 31, 2023, in compliance with Section 2, Article IX-D of the Philippine Constitution, Section 43 of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the Philippines, and Section 8(b) of Republic Act No. 8182, or the Official Development Assistance Act of 1996. We request that a status report on the actions taken on the audit recommendations be submitted, both in hard and electronic copies, within sixty (60) days from receipt of this letter, using the Agency Action Plan and Status of Implementation template prescribed under COA Memorandum No. 2014-002 dated March 18, 2014. We express our appreciation for the valuable support and cooperation extended to the Audit Team by the officials and staff of the Agency. Very truly yours, Atty. CHER Y ANNE kES-SULLA, CPA DOTr-COLUMBIA Supervising - rdit GSD- RECORDS Audit Group C - DOTr 1 JUN. 2TIM202: -,JO 04 R lu Il il E PH ITPPINFS COMMISSION ON AUDIT INDEPENDENT AUDITOR'S REPORT Secretary JAILE J. BAUTISTA Department of Transpoirtation The Columbia Tower, OrLigas Ave., Mandaluvong City Report on the Audit of Financial Statements Utnqualified Opinion We have audited the accompanying Financial Statements of the Cebi us Rapid Transit Projeet (CBRTP) financed under the International Bank for Reconstruction and Development (IBRD) Loan No. 8444-PI and Clean Technology Fund (CTF) Loan No. TF701 7646-PH, both from the World Bank, and Credit Facil ity Agreement (CFA) Loan No. CPH 1007-02-R, from the Agence Francaise de Developpenient (AVD) and implemented by the Department of Transportation (DOTr), which comprise the Statemenis of Financial Position as at December 31, 2023, and the Stateienits of Financial Performance, Statements of Changes in Net Assets/Equity, Statements of Comparison of Budget and Actual Amiounts and Statements of Cash Flows for the year ffhen ended, and Notes to the Financial Statements, including a summary of significanut accountinag policies and other explanatory information. In our opinion, the accompanying Financial Statements present fairly, in all material respects, the financial position of the CBRTP of the DOTr as at December 31, 2023, and the results of its financial performance, cash flows, changes in net assets/equity and the comparison of budget and actual amounts for the year then ended, in accordance with Ihe International Public Sector Accounting Standards (IPSASs). a asis for Unqualified Opinion We conducted our audit in accordance with International Standards of Suprieme Audit Institutions (ISSAIs). Our responsibilities under those standards are further described in the Auditors Responsibilities for Ilie Audit of the Project Financial Statements section of our Report We are independent of the DOTr in accordance with the Revised Code of' Conduct and Ethical Standards for Commission on Audit Officials and Employees (Code of Ethics) together with the ethical requirements that are relevant to our audit of the Project Financial Statements in the Philippines and we have fulfiled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these Financial Statements in accordance with IPSAS, and for such internal control as Management determines is necessary to enable the preparation of Financial Statements that are free from material misstatements, whether due to fraud or error. Those charged with governance are responsible for overseeing the DOTr's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAls will always detect a material misstatement when it exits. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with ISSAIs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal control. * Obtain an understanding of internal control relevant to the audit 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 DOTr's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimate and related disclosures made by Management. 2 * Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. COMMISSION ON AUDIT Atty. CHERR(AN ES-SULLA, CPA Supervising Au itor Audit Group C - DOTr 1 June 27, 2024 3 Annex H DEPARTMENT OF TRANSPORTATION - CENTRAL OFFICE REVISED NOTES TO FINANCIAL STATEMENTS CEBU BUS RAPID TRANSIT PROJECT Fund Cluster 02 For the Year Ended December 31, 2023 General Information/Agency Profile 1.1 The financial statements of the Department of Transportation were authorized for issue on February 13, 2024 as shown in the Statement of Management Responsibility signed by Director for Finance Service, Ma. Marisa P. Malabag and OIC-Undersecretary for Administration and Finance/Assistant Secretary for Finance and Comptrollership, Jesus Nathaniel Martin B. Gonzales, the authorized representatives of the DOTr-OSEC CO. 1.2 The Department (then Ministry) of Transportation and Communications (DOTC) was created by virtue of Executive Order No. 546, series of 1979. It was later re- organized, both structurally and functionally by the issuance of subsequent legislations, as follows: (a) Executive Order No. 125 dated January 30, 1987, which was promulgated in conformance to Executive Order No. 5, series of 1986; (b) Executive Order No. 125-A dated April 13, 1987, to give further impetus to the declared policy of the State towards the maintenance and expansion of viable, efficient and dependable transportation and communication systems as effective instruments for the Department's objectives; (c) Executive Order No. 202, dated June 19, 1987, creating the Land Transportation Franchising and Regulatory Board as a sectoral office of the Department; (d) Executive No. 220, dated October 1988, creating the Cordillera Administrative Region, compelling the DOTC to establish a DOTC-CAR as its regional office; (e) Republic Act No. 7354, dated April 2, 1992, which took effect June 3, 1992, creating the Philippine Postal Corporation as an attached corporation to the DOTC from the former sectoral office, Postal Service Office; (f) Department Order No. 96-912 dated January 15, 1996, establishing the DOTC-CARAGA as its regional office; (g) Executive Order No. 477 dated April 15, 1988, transferring the Philippine Coast Guard to the DOTC as a sectoral office; (h) Republic Act No. 9497, dated March 4, 2008, creating the Civil Aviation Authority of the Philippines as an attached corporation to the DOTC from the former sectoral office, Air Transportation Office; (i) Executive Order No. 780 dated January 29, 2009, transferring the sectoral office, Telecommunications Office, from the DOTC to the Commission of Information and Communications Technology (CICT); () Republic Act No. 9993, dated July 27, 2009, establishing the Philippine Coast Guard as an armed and uniformed service to the DOTC from a former sectoral office, and (k) Republic Act No. 10844, dated May 23, 2016 creating the Department of Information and Communications Technology (DICT) and renaming the DOTC Page I of 14 60 to Department of Transportation (DOTr). Its registered office is located at Columbia Tower Ortigas Avenue. Barangay Wack-wack. Mandaluyong City. Philippines. 1.3 The mandate of the DOTr is to act as the primary policy. planning, programming, coordinating, implementing, regulating and administrative entity of the executive branch of the government in the promotion. development and regulation of a dependable and coordinated networks of transportation systems. as well as, in the fast, safe, efficient and reliable transportation services. 1.4 The Cebu Bus Rapid Transit Project (CBRTP) is the establishment of a transport system with around 33 bus stations and 176 buses that will run through the 23- km. corridor from Bulacao to Ayala, with link to Cebu's South Road Properties (SRP) via dedicated and exclusive bus-ways and mixed traffic operation from Ayala to Talamban in Cebu City. Its objective is to improve overall performance of the urban passenger transport system in the Project Corridor in Cebu City in terms of quality and level of service, safety and environmental efficiency. 2. Statement of Compliance and Basis of Preparation of Financial Statement The financial statements have been prepared, in accordance with and comply with the International Public Sector Accounting Standards (IPSAS) issued by the Commission on Audit per COA Resolution No.2014-003 dated January 24, 2014. The financial statements have been prepared on the basis of historical cost. unless stated otherwise. The Statement of Cash Flows is prepared using the direct method. 3. Summary of Significant Accounting Policies 3.1 Basis of Accounting The financial statements are prepared on an accrual basis in accordance with the International Public Sector Accounting Standards (IPSAS). 3.2 Cash and Cash equivalents Cash and cash equivalents comprise cash on hand and cash at bank, deposits on call and highly liquid investments with an original maturity of three months or less. which are readily convertible to known amount of cash and are subject to insignificant risk of change in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short- term deposits as defined above, net of outstanding bank overdrafts. Page 2 of 14 3.3 Financial Assets Initial Recognition and neasurement The DOTr recognizes a financial asset when it becomes a party to a contract with a right to receive cash or another financial asset from another entity. It determines the classification of its financial assets at initial recognition. The DOTr's financial assets include cash, accounts receivables, interest receivables and other receivables. Subsequent measurement The subsequent measurement of financial assets depends on their classification. Accounis Receivables. hilerest Receivables. Otler Receivables Accounts Receivables. Interest Receivables, Other Receivables are non- derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest method, less impairment. Amortized cost is calculatcd by considering any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. Losses arising from impairment are recognized in the surplus or deficit. Derecognition of Financial Asses The DOTr derecognizes a financial asset or. where applicable. a part of' a financial asset when: * The right to receive cash flows from the asset has expired or is waived; * The DOTr has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash 1lows in lil without material delay to a third party; and either: (a) the DOTr has transferred substantially all the risks and rewards of the asset; or (b) the DOTr has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. The derecognition of financial assets is subject to the provision of Presidential Decree (PD) No. 1445 on the writing-off of receivables and other policies issued by the COA. hopairhment of Financial Assets The DOTr assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. If Page 3 of 14 there is objective evidence that an impairment loss has been incurred. the DOTr shall measure the amount of the loss as the difference between the assets carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced either directly or the use of an allowance account and the amount of the loss is recognized in surplus or deficit. For all Receivable accounts. the Allowance for Impairment shall be provided in an amount based on collectability of receivable balances and evaluation of such factors as aging of accounts, collection experiences of the DOTr. expected loss experiences and identified doubtful accounts. Based on past experiences of the DOTr on the collectability of receivable balances, most creditors start to default after a year of payment. After years of reminding and demanding payment from them. then the receivablc balances is deemed bad debts and highly uncollectible. Thus. Allowance for Impairment of the DOTr was set at 100% for receivables of more than one (1) year identified by management as highly uncollectible, and 1% for receivables that are less doubtful in nature. This is supported by a Department Accounting Policy No. 2018-001 dated July 2018. 3.4 Property, Plant and Equipment Recognition An item is recognized as property, plant and equipment (PPE) if it meets the characteristics and recognition criteria as a PPE. The characteristics of PPE are as follows: * tangible items; * are held for use in the production or supply of' goods of services, for rental to others, or for administrative purposes: and * are expected to be used more than one reporting period. An item of' PPE is recognized as an asset if: * it is probable that future economic benefits or service potential associated with the item will flow to the entity: and * the cost of fair value of the item can be measured reliably. M11easurenent at Recogniion An item recognized as property. plant. and equipment is measured at cost. Page 4 ofI4 i A PPE acquired through non-exchange transaction is measured at its fair value asat the date of acquisition. The cost of the PPE is the cash price equivalent or, for PPE acquired through non-exchange transaction, its cost is its fair value as at recognition date. Cost includes the following: * its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates: * expenditure that is directly attributable to the acquisition of the items: and * initial estimates of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired. or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period. M/easurement after Recognition After recognition, all property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. When significant parts of property. plant and equipment are required to be replaced at intervals, the DOTr recognizes such parts as individual assets with specific useful lives and depreciates them accordingly. Likewise, when a major repair/replacement is done, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized as expense in surplus or deficit as incurred. Depreciation Each part of an item of property. plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The depreciation charge for each period is recognized as expense unless it isincluded in the cost of another asset. Initial Recognition ojDepreciation Depreciation of an asset begins when it is available for use such as when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. For simplicity and to avoid proportionate computation. the depreciation is for one month if the PPE is available for use on or before the 15Ih of the month. However. if the PPE is available for use after the 15'h of the month. depreciation is for the succeeding month. Page 5 or 14 4 Depreciation Method The straight-line method of depreciation shall be adopted unless another methodis morc appropriate for agency operation. Esfitiaedl thAeid Life The DOTr uses the Schedule on the Estimated Uscful Life of PPE by classification prepared by COA. The DOTr uses a residual value equivalent to at least 5% of the cost of the PPE. Impirnmen An asset's carrying amount is written down to its recoverable amount. or recoverable service amount, if the asset's carrying amount is greater than its estimated recoverable service amount. Derecognilion The DOTr derecognizes items of property, plant and equipment and/or any significant part of an asset upon disposal or when no future economic benefits or service potential is expected from its continuing use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the surplus or deficit when the asset is derecognized. 3.5 Financial Liabilities Mitial Recognition The DOTr shall recognize a financial liability in its statement of financial position when it becomes a party to the contract and goods/services have been delivered/rendered and accepted. Initial Afeasui-eient When a financial liability is recognized initially, an entity shall measure it at its fair value plus transaction costs that are directly attributable to the issue of the financial liability. Transaction costs are incremental costs that are directly attributable to the issue or disposal of a financial liability. An incremental cost is one that would not have been incurred if the entity had not issued or disposed the financial liability. Transaction costs include: (a) fees and commissions paid to agents. advisers, brokers and dealers: (b) levies by regulatory agencies and securities exchanges: and (c) transfer taxes and duties. Page 6 of 14 ft Derecognition of Financial Liability An entity shall remove a financial liability (or a part of a financial liability) from its statement of financial position when, and only when, it is extinguished. that is. when the obligation specified in the contract is discharged. waived, or cancelled, or expires. 3.6 Changes in accounting policies and estimates The DOTr recognizes the effects of changes in accounting policies retrospectively. The effects of changes in accounting policy are applied prospectively if retrospective application is impractical. The DOTr recognizes the effects of changes in accounting estimates prospectivelyby including in surplus or deficit. The DOTr corrects material prior period errors retrospectively in the first set of financial statements authorized for issue alter their discovery by: * Restating the comparative amounts for prior period(s) presented in which the error occurred; or * If the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and net asset/equity for the earliest prior period presented. 3.7 Foreign currency transactions Transactions in foreign currencies are initially recognized by applying the spot exchange rate between the function currency and the foreign currency at the transaction. At each reporting date: * Foreign currency monetary items are translated using the closing rate; * Nonmonetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction; and * Nonmonetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the date when the fair valueis determined. Exchange differences arising (a) on the settlement of monetary items, or (b) on translating monetary items at rates different from those at which they are translated on initial recognition during the period or in previous financial statements, are recognized in surplus or deficits in the period in which they arise, except as those arising on a monetary item that forms part of a reporting entity's net investment in a foreign operation. Page 7 of 14 3.8 Revenue from Exchange Transactions Aeavurenent ofrevenue Revenue shall be measured at the fair value of the consideration received or receivable. Inierest Income Interest income is accrued using the effective yield method. The effective yield discounts estimated future cash receipts through the expected life of the financial asset to that asset's carrying amount. The method applies this yield to the principal outstanding to determine interest income each period. 3.9 Budget information The annual budget is prepared on a cash basis and is published in the government website. As a result of the adoption of the cash basis for budgeting purposes, a separate Statement of Comparison of Budget and Actual Amounts is presented showing the basis, timing or entity differences. Explanatory comments are provided in the notes to the annual financial statements; first, the reason for overall growth or decline in the budget is stated, followed by details of overspending or under spending on line items. The annual budget figures included in the financial statements are for the CBRTP.These budget figures are those approved by the governing body at the beginning and during the year following a period of consultation with the public. The actual amounts under Receipts pertains to other cash collections and do not include receipt of Notice of Cash Allocations, while Payments pertain to cash/check/Auto-Debit Arrangement disbursements. 4. Cash and Cash Equivalents ... ~.'1p'AW Cash on Hand 8,822.02 0.00 Cash in Bank - Local Currency, Current Account 34,555.001.13 53.011,221.27 Cash in Bank - Foreign Currency, Savings Account 601,874.523.39 410,746,891.38 Cash - Treasury/Agency Deposit, Trust 0.00 0.00 Total Cash -a.nit8,3 S4 '6318126 4.1 Cash on Hand as of December 31, 2023 represents the Petty Cash Fund Page 8 of 14 balance held by Accountable Officer, Mr. Rolando D. Lara. 4.2 Cash in Bank - Local Currency, Current Account as of December 31, 2023 represents balance of the peso equivalent of the USD2.000.000.00 transferred from the Dollar Savings Account authorized from IBRD Loan No. 8444-PIH. 4.3 Cash in Bank - Foreign Currency 2022, A As Restated Savings Accounts-LBP-IBRD (Dollar S/A # 3134-0023-00) 426.128.726.66 230.612,883.39 Savings Accounts-LBP-Credit Facility Agreement(CFA) (Dollar S/A # 3134-0023-35) 175.745.796.73 180.134,007.99 SisAccnt f601874,523.39 410,746,891.38 4.2.1 Cash in Bank - Foreign Currency Savings Account as of December 3 1. 2023 represents year-end balances of the funding requirement for the CBRTP inder the International Bank for Reconstruction and Development (IBRD) and Credit Facility Agreement (CFA) translated to Philippine Peso at P55.675 for CY 2023 and P56.00 for CY 2022. 4.4 Cash - Treasury/Agency Deposit, Trust account balance of P93,384,733.13 as of December 31, 2022 represents the reverted NCA received under NCA- BMB-A-21-0011043 dated 03 September 2021 to cover funds for the implementation of CBRTP. This was dropped from the books in CY 2023 since it was already deposited back to the DOTr IBRD USD account in CY 2022 through receipt of working fund per NCA-BMB-A-22-0015411 recorded under RA22- 12-03639. Inter-Agency Receivables ccouzts ~ . .As2Rest22 Due from NGAs 728,264,250.001 0.00 Due from GOCCs 29.230.802.17 29,231,402.17 Due from LGUs 465,754,725.62 465,754,725.62 :Totals349,77 494,986,127.79 5.1 The Due from National Government Agencies account balance of P728,264,250.00 as of December 31, 2023 represents the first tranche of fund transfer to Department of Public Works and Highways (DPWH) under the amended MOA with DOTr for the Right of Way Acquisition (ROWA) for Cebu Intermodal and Integrated Transport System (formerly CBRT Project). Page 9 of 14 5.2 The Due from Government Owned and/or Controlled Corporations (GOCCs) account balance of P29,230,802.17 as of December 31, 2023 represents transfer of finds to National Housing Authority dated August 30, 2022 First Tranche for the CBRTP- Resettlement Activities funded under CY 2021 GAA. 5.3 The Due from Local Government Units (LGUs) account balance of P465,754,725.62 as of December 31, 2023 consists of: (1) P460.260.500.00 representing transfer of funds to the Cebu City for the 50% equivalent of the approved amount to cover the cost of land acquisition for the right of way of CBRTP including relocation of displaced landowners, residents. tenants & dwellers/informal settlers: (2) P17,500,000.00 representing First Tranche for the implementation of Greening Program of CBRT Project funded under CY 2017 GAA, and (3) P6.488.100.00 represents First Tranche of funds transferred to Talisay for the Resettlement Activities. In CY 2021. P601,101.04 and P15,325.225.00 was liquidated for funds transferred to Cebu City for the Right of Way Acquisition and Greening Program, respectively. In CY 2022. P2,567,548.34 was liquidated for the Right of Way Acquisition. Details of fund transfers and related liquidations/reversals are as follows: Balance, January 1, 2022 459,659,398.96 2,174,775.00 6,488,100.00 468,322,273.96 Less: Liquidations 2,567,548.34 0.00 0.00 2,567,548.34 Balance, December 31. 2022 457,091,850.62 2,174,775.00 6,488,100.00 465,754,725.62 (As restated) . ... Add: Fund Transfer 0.00 0.00 0.00 0.00 Add: Reversal of Liquidations 0.00 0.00 0.00 0.00 Balance, D6emliiL1 423 - 4457091850.2 23650 5 6488,100 465,754 725.62 6. Property, Plant and Equipment 2022 Acubs AsRestad *(in Php) Land 3,169,249.38 3.168,649.38 Construction in Progress 986,689,291.41 737.281,868.69 Total PPF 9t5884O.79 740,450518.07 6.1 Land account balance as of December 31, 2023 of P3,169,249.38 pertains to liquidation of fund transfer for the land acquisition for Right of Way of the CBRTP including relocation of displaced landowners, residents. tenants and dwellers/informal settlers. 6.2 Construction in Progress - Infrastructure Assets account pertains to payments of consulting services, remuneration of services rendered by Contract of Service and Job Order personnel of the Bus Rapid Transit- Page 10 of 14 National Program Management Office (BRT-NPMO) and various expenses relative to the project. The account was restated: (1) to reverse correcting entry made intended to reclassify Accumulated Surplus/(Deficit) to Construction in Progress account amounting to P15.725.00: (2) to reverse correcting entries made intended to reclassify Construction in Progress to Accumulated Surplus/(Deficit) account for the prior year's depreciation of ICT Equipment and Furniture and Fixtures amounting to P33,250.00 and 7.344.91. respectively. in compliance to COA AOM-23-015-102 (22); and (3) to reclassify to Other Professional Services the accrual for the payment of 1% Service Fee of Long Term Procurement Advisor amounting to P 94.334.00. 7. Advances to Contractors account pertains to unrecouped balance of advance payments made to various consultants in the implementation of the CBRTP amountinEw to P61,492,933.14 and P778,916.18 as of December 31, 2023 and 2022. respectively. Details are as follows: Particulars Total Balance. January 1. 2022 778,916.18 449,627.27 1,228,543.45 Less: Recoupment 0.00 449.627.27 449.627.27 Balance, December 31, 2022 778,916.18 0.00 778,916.18 Add: Addition 89,765,829.73 89.765.829.73 Less: Recoupment 29,051,812.77 29.051,812.77 Balance, Deceibe3142023 64492933.: -0,01. 61,492,933.14 8. Accounts Payable amounting to P107,522,457.25 and P27,048,826.92 as of December 31, 2023 and 2022, respectively, represents financial obligations to various payees in the implementation of the CBRTP. ~-2t DED and SC Consultant 105,548.892.22 25,112,656.67 Procuiement Advisor 0.00 1.839.468.01 Financial Management Specialist 490.855.22 0.00 Procurcment Service - DBM 0.00 94,334.00 Technical Support Consultant 0.00 1,478.24 Bitangiol. Arnold John P. 0.00 890.00 MERALCO 28.415.97 0.001 Contract of ServiceJob Order Workers 1,454.293.84 0.00 I Total t -107,522;457.25 27,048,826.92 9. Due to Officers and Employees account balance of P38,428.36 as of December 31, 2023 represents accruals for reimbursements of actual travelling expenses Page II of 14 incurred. 10. Inter-Agency Payables account consist of unremitted taxes withheld from DiD and SC Consultant, Procurement Advisor, Technical Support Consultants, remunerations of Job-Order and Contract of Service personnel under BRT NPMO and CBRT-PlU and utilities amounting to P4,873,208.84 and P3,715,839.51 as of' December 31, 2023 and December 31, 2022, respectively. This amount was subsequently remitted to the Bureau of Internal Revenue in January 2024 under RA24-01-00043. RA24-01-00044. RA24-01-00046 and RA24-01-00047. CY 2023 DueB to BIR WIittance Unremitted 'Tax Adjustment Balance Covered by 0.00 1,123,233.27 997,859.81 125.373.46 TRA ______ _____________ Not Covered 3.715,839.51 15,526.047.61 14.494,051.74 4.747.835.38 by TRA I i I _ TOTAL 3,715,839.51 16,649,280.88 15,491,911.55 4,873,208.84 11. Trust Liabilities account balance of P9,607,144.10 as December 31. 2023 represents the balance of Guaranty Security Deposits retained from progress billings for Cebu Bus Rapid Transit (CBRT) package 1: Civil Works Capitol to Cebu South Bus Terminal Urban Realm Enhancement (Link to the Port). 12. Accumulated Surplus 2022 p mOAs Restated Balance, January 1, 2023 1,669,209,008.26 2,120,284,255.57 Addl(Deduct): Changes in Accounting Policy Prior Period Adjustments for Income & Expense 24,869.91 Restated balance 1,669,209,008.26 2,120,309,125.48 Add/(Deduct): Changes in Net Assets/Equity for the Calendar Year Surplus/(Deficit) for the Period 1.119.968.593.37 178.298,943.72 Adjustment of Net Revenue Recognized Directly (I80.131.92) (536.014.327.81) in Net AssetsEquity i Others 890.0q (93.384.733.13) Total Recognized Revenue and Expense 1,119,789,351.45 (451,100,117.22) for the Period Balance, December 31y-0M 22988f8359.7 1 1,669,209,008.26 13. Service and Business Income account balance of P106,978.00 and P93,052.69 as of December 31, 2023 and 2022. respectively. represents interest income earned , Page 12 of 14 1i-om IB R ) und CFA acco uts ma iit aned [or CISRTP. 14. \Iaintenance and Other Operating Expenses account baåance of 1,072.00 is of Dcember 31L 2023 pertains to bank transaction fees deducted by the serviciil bank upon receipt of NCA for CBIRT Working Fund. Tlie accouni balance as o December 31, 2022 of zero was restated to P94,334.00, representing 1% Service Fcc of long Term Procurement Advisor. 1 Net Fiaincial Assistanc/eSubsidy 2023 2022 Particulars 23As RestaLed (in Php) NCA Received 748 .. 1974.36 37 19.502. 17 Add: Duc to 31R-covered b 997.859.81 C13RT i und 367.92 L27S5 108.709_126,27 Su bsid from National Governument 1,117,035,109.72 144,428.628,44 inancial AssistineSubsidy to L.GUs.GOCCs N[GOsrPOs ___.______________ .00 _____ iniail Assistance/Subsidy to LGUs,GOCCs NGOs/POs 0.00 (1.00 Fancial Assistancdubsidy 1,117,035,109.72 144,428,628.44 C Gains amounting to P55,062,2011.43 and P33,871,596.59 as of December 31, 2023 and December 31, 2022, respectively. represents gain from revalunation of' foreign cuirrencv denoin iiiated cash accounts at year-end. 17. Losses amouming to P52.234,623.78 as of December 31, 2023 represents loss from revaltiation oflforeign currency denominated cash aceounts at year-end. 18. Allotmients. Obligations and Balances Allotment Obiigation Disbutsement l Fund Caitegory Reverted Extended (in Php) i2 CO 568.337.000.00 z45 7,424.277.09 74.,2 132 1 10.'22 19. Reconciliation of SCBAA and Statemen t of Cash Flows Receipts Payments Particulars 2023 20&2 2023 j 2022 (i h'p) Per S( CH:\\ AI 5 & 6.97800 536.0113.302.69 74.623.213.2$ 886.103. 'er Sl 1.117.142.087.72 68(1.44 L93 1. 13 947.289.43 1.4 6N,058579.410 DifTerencE (1,117.035,109.72) (144,428,62844) (872,666,218.20) (688,172,475.43) Page 13 of 14 Rece.ipt of Noice o' 1.117.035.109.72 144.428.628.44 Csli Allocation Remittance to National 180.131.92 536.014.327.81 TFreasurý P>ment ofA ccountis 94.34 .00 PaI.,able Payu ment of .xpenses 1.072.00 Remittance of Iersonnel Benelit 14.494.051.74 10.545.772.06 Contributions & Mandator. Deduclions Release of Inter- 728.264.250.00 35.719.502.17 Agency Fund Translers Purchasw/Construction of Property. Plant & 129.555.171.08 105.892.873.39 1-:quipmeint __________ Remitiance off aNes Witlhhield Covered b 86.029.48 TRA (Prior Ycar ObliLation) Unreplenished Petty (8.822.02) Cash Page 14 øf 14