Annex A Republic of the Philippines COMMISSION ON AUDIT Commonwealth Avenue, Quezon City INDEPENDENT AUDITOR’S REPORT The Secretary Department of Social Welfare and Development Batasan Hills, Quezon City Unmodified Opinion We have audited the accompanying financial statements of Additional Financing for the Kapit-Bisig Laban sa Kahirapan – Comprehensive and Integrated Delivery of Social Services: National Community Driven Development Project (KC-NCDDP) – World Bank/International Bank for Reconstruction and Development (WB/IBRD), which comprise the Statement of Financial Position, as at December 31, 2023, and Statement of Financial Performance, Statement of Cash Flows and Statement of Changes in Net Assets/Equity for the year then ended, and Notes to the Financial Statements, including a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying financial statements presents fairly, in all material respects, the financial position of the AF KC-NCDDP–WB/IBRD as at December 31, 2023, and of its financial performance, statement of cash flows and statement of net assets/equity, for the year then ended and Notes to Financial Statements, including a summary of significant accounting policies in accordance with the International Public Sector Accounting Standards (IPSAS). Basis for Opinion We conducted our audit in accordance with the International Standards of Supreme Audit Institutions (ISSAIs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the agency 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 financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 17 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the IPSAS, 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. 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 ISSAIs will always detect a material misstatement when it exists. 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, misrepresentations, or 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 agency’s internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.  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. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit observations, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them 18 all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. COMMISSION ON AUDIT By: ALMA A. BACULI State Auditor V Supervising Auditor 16 August 2024 19 DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT Consolidated Central Office and Regional Offices STATEMENT OF CHANGES IN NET ASSET/EQUITY Fund Cluster 02- Foreign Assisted Project AF-KC-NCDDP (IBRD 9191-PH) As of December 31, 2023 Note 2023 2022 (restated) Balance at December 31, 2022 3,761,326,817.15 1,167,353,296.75 Changes in Accounting Policy Prior Period Adjustment Other Adjustments 21 (904,491,163.38) Restated Balance 2,856,835,653.77 1,167,353,296.75 Changes in Net Assets/Equity for the Calendar Year Adjustment of net revenue recognized directly in net assets/equity Closing of Cash - Treasury/Agency Deposit - Regular (1,568,964.21) (693,539.89) Surplus for the period 1,065,869,614.70 1,690,175,896.91 Total recognized revenue and expense for the period 1,064,300,650.49 1,689,482,357.02 Others Balance at December 31, 2023 3,921,136,304.26 2,856,835,653.77 This statement should be read in conjunction with the accompanying notes 24 DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT Consolidated Central Office and Regional Offices Condensed Statement of Financial Performance Fund Cluster 02- Foreign Assisted Project AF-KC-NCDDP (IBRD 9191-PH) As of December 31, 2023 Account Title Note 2023 2022 (restated) Revenue Service and Business Income 16 1,473,855.82 1,028,686.93 Total Revenue 1,473,855.82 1,028,686.93 Maintenance and Other Operating Expenses Maintenance and Other Operating Expenses 17 809,381,791.17 60,095,684.84 Non-Cash Expenses 18 15,623,900.45 7,194,415.72 Current Operating Expenses 825,005,691.62 67,290,100.56 Surplus (Deficit) from Current Operations (823,531,835.80) (66,261,413.63) Net Financial Assistance/Subsidy to NGAs, LGUs, 19 GOCCs 1,889,465,986.83 1,756,437,310.54 Losses 64,536.33 - Suplus (DeficIt) for the period 1,065,869,614.70 1,690,175,896.91 This statement should be read in conjunction with the accompanying notes 22 DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT Consolidated Central Office and Regional Offices Condensed Statement of Financial Performance Fund Cluster 02- Foreign Assisted Project AF-KC-NCDDP (IBRD 9191-PH) As of December 31, 2023 Account Title Note 2023 2022 (restated) Revenue Service and Business Income 16 1,473,855.82 1,028,686.93 Total Revenue 1,473,855.82 1,028,686.93 Maintenance and Other Operating Expenses Maintenance and Other Operating Expenses 17 809,381,791.17 60,095,684.84 Non-Cash Expenses 18 15,623,900.45 7,194,415.72 Current Operating Expenses 825,005,691.62 67,290,100.56 Surplus (Deficit) from Current Operations (823,531,835.80) (66,261,413.63) Net Financial Assistance/Subsidy to NGAs, LGUs, 19 GOCCs 1,889,465,986.83 1,756,437,310.54 Losses 64,536.33 - Suplus (DeficIt) for the period 1,065,869,614.70 1,690,175,896.91 This statement should be read in conjunction with the accompanying notes 22 DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT Consolidated Central Office and Regional Offices Condensed Statement of Financial Position Fund Cluster 02- Foreign Assisted Project AF-KC-NCDDP (IBRD 9191-PH) As of December 31, 2023 Account Title Note 2023 2022 (restated) ASSETS Current Assets Cash and Cash Equivalents 4 1,331,165,397.05 2,679,045,788.93 Receivables 5 2,706,035,792.68 165,819,521.88 Inventories 6 4,316,699.49 5,281,568.82 Other Current Assets 7 20,000.00 - Total Current Assets 4,041,537,889.22 2,850,146,879.63 Non Current Assets Property, Plant and Equipment 8 82,684,183.44 60,367,944.91 Intangible Assets 9 57,050.04 73,350.00 Other Non-Current Assets 10 347,329.86 110,000.00 Total Non-Current Assets 83,088,563.34 60,551,294.91 TOTAL ASSETS 4,124,626,452.56 2,910,698,174.54 LIABILITIES Current Liabilities Financial Liabilities 11 182,776,771.31 52,009,953.26 Inter-Agency Payables 12 13,168,135.90 240,339.86 Total Current Liabilities 195,944,907.21 52,250,293.12 Non-Current Liabilities Trust Liabilities 14 725,193.82 704,980.00 Other Payables 15 6,820,047.27 907,247.65 Total Non-Current Liabilities 7,545,241.09 1,612,227.65 TOTAL LIABILITIES 203,490,148.30 53,862,520.77 Net Assets/Equity 3,921,136,304.26 2,856,835,653.77 TOTAL LIABILITIES AND NET ASSETS/EQUITY 4,124,626,452.56 2,910,698,174.54 This statement should be read in conjunction with the accompanying notes 21 DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT CONSOLIDATED CENTRAL OFFICE AND FIELD OFFICES NOTES TO FINANCIAL STATEMENTS FUND CLUSTER 2- FOREIGN ASSISTED PROJECTS IBRD LOAN NO. 9191-PH: KC-NCDDP ADDITIONAL FINANCING FOR THE YEAR ENDED DECEMBER 31, 2023 1. General Information The financial statements of the Department of Social Welfare and Development-Office of the Secretary were authorized for issue on February 8, 2024 as shown in the Statement of Management Responsibility for Financial Statements signed by Director Wayne C. Belizar, Director for Financial Management Service and Undersecretary Edward Justine R. Orden Office of the Undersecretary for General Administrative and Support Services Group. On February 15, 1915, upon creation of the Public Welfare Board during the American Regime, the government started to get involved in social welfare. The board was established to coordinate, regulate and supervise social services activities and other charitable works rendered by religious orders and organizations. Finally, in 1917, the first government orphanage was established. As a result of several changes by the government in its bureaus and departments, the original Public Welfare Board of the year 1915 became the DSWD. After this, the Social Welfare Administration was formally created by virtue of EO No. 396 dated January 13, 1951, which later was made into a Department under RA No. 5416 known as the Social Welfare Act approved in 1968. The responsibility of the Department was to provide comprehensive program of social welfare services designed to ameliorate the living conditions of distressed Filipinos, particularly those who are handicapped by reason of poverty, youth, physical and mental disability, illness and old age, or who are victims of natural calamities including assistance to members of the cultural minorities. With the provision of DSWD Mandate under EO No. 15, DSWD was transformed from the rowing to steering role that usher in the new vision, mission and goals for the Department. The DSWD envisions all Filipinos free from hunger and poverty, have equal access to opportunities, enabled by a fair, just, and peaceful society. In the pursuit of its vision, the DSWD mission is "to lead in the formulation, implementation, and coordination of social welfare and development policies and programs for and with the poor, vulnerable and disadvantaged. DSWD CO registered office address is located in Constitution Hills, Batasan Pambansa Complex, Main Road, Quezon City, Philippines. 2. Statement of Compliance and Basis of Preparation of Financial Statements The consolidated financial statements have been prepared in accordance with and comply with the IPSAS pursuant to COA Resolution No. 2014-003 dated January 24, 2014 and COA Circular No. 2021-004 dated July 21, 2021 to enhance the accountability and 25 transparency of the financial reports and ensure comparability of financial information The adoption of these standards did not result in substantial changes to the Agency’s accounting policies and had no material effect on the amounts reported for the current and prior financial years. The financial statements are presented in Philippine Peso, which is the functional and reporting currency of the Agency and 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 consolidated financial statements are prepared on an accrual basis in accordance with the IPSAS. 3.2 Financial instruments a. Financial assets Initial recognition and measurement Financial assets within the scope of IPSAS 29 Financial Instruments: Recognition and Measurement are classified as financial assets at fair value through surplus or deficit, loans and receivables as appropriate. The DSWD determines the classification of its financial assets at initial recognition. The DSWD's financial assets include cash and receivables. Subsequent measurement The subsequent measurement of financial assets depends on their classification. Loans and receivables Loans and 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 calculated by taking into account 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 The DSWD derecognizes a financial asset or, where applicable, a part of a financial asset 26 or part of DSWD of similar financial assets when the rights to receive cash flows from the asset have expired or is waived; the DSWD has transferred its rights to receive cash flows from the asset; or has assumed an obligation to pay the received cash flows in full without material delay to a third party; and either: (a) the DSWD has transferred substantially all the risks and rewards of the asset; or (b) the DSWD has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Impairment of financial assets The DSWD assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include the following indicators: ● The debtors or a group of debtors are experiencing significant financial difficulty; ● Default or delinquency in interest or principal payments; ● The probability that debtors will enter bankruptcy or other financial reorganization; ● Observable data indicates a measurable decrease in estimated future cash flows (e.g. changes in arrears or economic conditions that correlate with defaults). b. Financial liabilities Initial recognition and measurement Financial liabilities within the scope of IPSAS 29 are classified as financial liabilities at fair value through surplus or deficit. The entity determines the classification of its financial liabilities at initial recognition. The DSWD’s financial liabilities include payables. Subsequent measurement The measurement of financial liabilities depends on their classification. Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is 27 recognized in surplus or deficit. 3.3 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, cash in bank for local and foreign currencies and treasury/agency accounts, 3.4 Inventories Inventory is measured at cost upon initial recognition. To the extent that inventory was received through non-exchange transactions (for no cost or for a nominal cost), the cost of the inventory is its fair value at the date of acquisition. The weighted average method shall be used for costing inventories. This method calls for the recalculation of the average cost of all items in stock after every purchase. The weighted average cost is the total cost of all units subsequent to the latest purchase, divided by their total number of units available. Inventories are recognized as expense when deployed for utilization or consumption in the ordinary course of operations of the DSWD. 3.5 Property, Plant and Equipment Recognition An item is recognized as 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 or services, for rental to others, or for administrative purposes; and ● are expected to be used during 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 or fair value of the item can be measured reliably. Measurement at Recognition An item recognized as property, plant, and equipment is measured at cost. A PPE acquired through a non-exchange transaction is measured at its fair value as at the date of acquisition. 28 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 estimate 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. Measurement after Recognition After recognition, all property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation The depreciation charge for each period is recognized as expense unless it is included in the cost of another asset. Initial Recognition of Depreciation 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 15th of the month. However, if the PPE is available for use after the 15th of the month, depreciation is for the succeeding month. Depreciation Method The straight line method of depreciation is adopted unless another method is more appropriate for agency operation. Estimated Useful Life The DSWD uses the Schedule on the Estimated Useful Life of PPE by classification prepared by COA and uses a residual value equivalent to at least five percent of the cost of the PPE. Impairment An asset is said to be impaired when its carrying amount exceeds its recoverable service 29 amount or recoverable amount due to fall in market value of an asset. Derecognition The DSWD 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. 3.6 Leases Operating lease Operating leases are leases that do not transfer substantially all the risks and benefits incidental to ownership of the leased item to the DSWD. Operating lease payments are recognized as an operating expense in surplus or deficit on a straight line basis over the lease term. DSWD as a lessor. DSWD as a lessor Leases in which the DSWD does not transfer substantially all the risks and benefits of ownership of an asset are classified as operating leases. Rent received from an operating lease is recognized as income on a straight-line basis over the lease term. Contingent rents are recognized as revenue in the period in which they are earned. The depreciation policy for PPE is applied to similar assets leased by the entity. 3.7 Intangible Assets Recognition and Measurement Intangible assets are recognized when the items are identifiable non-monetary assets without physical substance; it is probable that the expected future economic benefits or service potential that are attributable to the assets will flow to the entity; and the cost or fair value of the assets can be measured reliably. Intangible assets acquired separately are initially recognized at cost. Recognition of an Expense Expenditure on an intangible item shall be recognized as an expense when it is incurred unless it forms part of the cost of an intangible asset that meets the recognition criteria of an intangible asset. 30 Subsequent Measurement The useful life of the intangible assets is assessed as either finite or indefinite. Intangible assets with a finite life is amortized over its useful life. The straight line method is adopted in the amortization of the expected pattern of consumption of the expected future economic benefits or service potential. An intangible asset with indefinite useful lives shall not be amortized. Intangible assets with an indefinite useful life or an intangible asset not yet available for use are assessed for impairment whenever there is an indication that the asset may be impaired. The amortization period and the amortization method, for an intangible asset with a finite useful life, are reviewed at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on an intangible asset with a finite life is recognized in surplus or deficit as the expense category that is consistent with the nature of the intangible asset. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the surplus or deficit when the asset is derecognized. 3.8 Changes in accounting policies and estimates The DSWD recognizes the effects of changes in accounting policy retrospectively. The effects of changes in accounting policy are applied prospectively if retrospective application is impractical. The DSWD recognizes the effects of changes in accounting estimates prospectively by including in surplus or deficit. The DSWD correct material prior period errors retrospectively in the first set of financial statements authorized for issue after 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 assets/equity for the earliest prior period presented. 3.9 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 31 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 value was 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 were translated on initial recognition during the period or in previous financial statements, are recognized in surplus or deficit 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. 3.10 Revenue from non-exchange transactions Recognition and Measurement of Assets from Non-Exchange Transactions An inflow of resources from a non-exchange transaction, other than services in kind, that meets the definition of an asset are recognized as an asset if the following criteria are met: ● It is probable that the future economic benefits or service potential associated with the asset will flow to the entity; and ● The fair value of the asset can be measured reliably. ● An asset acquired through a non-exchange transaction is initially measured at its fair value as at the date of acquisition. Recognition Revenue from Non-Exchange Transactions An inflow of resources from a non-exchange transaction recognized as an asset is recognized as revenue, except to the extent that a liability is also recognized in respect of the same inflow. As DSWD satisfies a present obligation recognized as a liability in respect of an inflow of resources from a non-exchange transaction recognized as an asset, it reduces the carrying amount of the liability recognized and recognizes an amount of revenue equal to that reduction. Measurement of Revenue from Non-Exchange Transactions Revenue from non-exchange transactions is measured at the amount of the increase in net assets recognized by the entity, unless a corresponding liability is recognized. Measurement of Liabilities on Initial Recognition from Non-Exchange Transactions The amount recognized as a liability in a non-exchange transaction is the best estimate of the amount required to settle the present obligation at the reporting date. 32 Fees and fines not related to taxes The DSWD recognizes revenues from fees and fines, except those related to taxes, when earned and the asset recognition criteria are met. Other non-exchange revenues were recognized when it is probable that the future economic benefits or service potential associated with the asset will flow to the entity and the fair value of the asset can be measured reliably. Gifts and Donations The DSWD recognizes assets and revenue from gifts and donations when it is probable that the future economic benefits or service potential will flow to the entity and the fair value of the assets can be measured reliably. Goods in-kind are recognized as assets when the goods are received, or there is a binding arrangement to receive the goods. If goods in-kind are received without conditions attached, revenue is recognized immediately. If conditions are attached, a liability is recognized, which is reduced and revenue recognized as the conditions are satisfied. On initial recognition, gifts and donations including goods in-kind are measured at their fair value as at the date of acquisition, which were ascertained by reference to an active market, or by appraisal. An appraisal of the value of an asset is normally undertaken by a member of the valuation profession who holds a recognized and relevant professional qualification. For many assets, the fair value is ascertained by reference to quoted prices in an active and liquid market. Transfers The DSWD recognizes an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset, except those arising from services in-kind. Services in-Kind Services in-kind are not recognized as asset and revenue considering the complexity of the determination of and recognition of asset and revenue and the eventual recognition of expenses. Transfers from other government entities Revenues from non-exchange transactions with other government entities and the related assets are measured at fair value and recognized on obtaining control of the asset (cash, goods, services and property) if the transfer is free from conditions and it is probable that the economic benefits or service potential related to the asset will flow to the Department of Social Welfare and Development and can be measured reliably. 33 3.11 Budget information The annual budget is prepared on a cash basis and is published on the government website. A separate SCBAA was prepared since the budget and financial statements were not prepared on comparable basis. The SCBAA was presented showing the original and final budget and the actual amounts on comparable basis to the budget. 3.12 Employee benefits The employees of DSWD are members of the GSIS which provides life and retirement insurance coverage. The DSWD recognizes the undiscounted amount of short term employee benefits, like salaries, wages, bonuses, allowance, etc., as expense and as a liability after deducting the amount paid. The DSWD recognizes expenses for accumulating compensated absences when these are paid (commuted or paid as terminal leave benefits). Unused entitlements that have accumulated at the reporting date were not recognized as expense. Non accumulating compensated absences, like special leave privileges, are not recognized. 3.13 Measurement uncertainty The preparation of financial statements in conformity with IPSAS requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities, at the date of the financial statements and the reported amounts of the revenues and expenses during the period. Items requiring the use of significant estimates include the useful life of capital assets. Estimates are based on the best information available at the time of preparation of the financial statements and were reviewed annually to reflect new information as it becomes available. Measurement uncertainty exists in these financial statements. Actual results could differ from these estimates. 4. Cash and Cash Equivalents Account Name 2023 2022 (Restated) Cash - Collecting Officer 1,518,411.35 134,466.42 Cash in Bank - Local Currency, Current Account 1,329,646,985.70 2,678,911,322.51 Total 1,331,165,397.05 2,679,045,788.93 Cash - Collecting Officer has a remaining balance in the amount of ₱1,518,411.35. It was remitted to the Bureau of Treasury on the first banking day of January 2024. Cash in Bank- Local Currency, Current includes the funds that were deposited with Authorized Government Depository Bank (AGDB) in accordance with GAFMIS 34 Circular Letter No. 2003-005 dated November 21, 2003 as National Community Driven Development Project (Peso)- WB IBRD Office Amount Central Office 490,911,333.23 CAR 34,549,194.05 I 385,830.89 II 16,579,433.00 III 37,566,752.42 IV-A 17,827,191.48 IV-B 19,711,195.56 V 218,979,093.71 VI 116,701,710.03 VII 60,637,520.03 VIII 233,865,838.88 IX 40,761,151.05 X 8,594,847.08 XI 9,500,834.49 XII 10,907,767.88 XIII 12,167,291.92 Total 1,329,646,985.70 5. Receivables 5.1 Loans and Accounts Receivables Account Name 2023 2022 (Restated) Accounts Receivable 7,860.00 - Total 7,860.00 - This pertains to Field Office VIII ₱7,860.00 overpayment of travel expenses for the month of June 2023 of Papa, Ruel et. al 5.2 Inter-Agency Receivables Account Name 2023 2022 (Restated) Due from National Government Agencies 114,349.19 - Due from Local Government Units 521,863,167.22 142,579,385.62 Total 521,977,516.41 142,579,385.62 Due from National Government Agencies this refers to Field Office XI replenishment of credit line from Procurement Service-DBM, Clearing Account for air transportation regarding Philippine Airlines and Cebu pacific airlines for CY 2023. Due from Local Government Units pertain to the funds transferred by the Field Office to the Barangay Local Government Units’ Trust Accounts for the implementation of the KC-NCDDP sub-projects 35 5.3 Other Receivables This account consists of the following: Account Name 2023 2022 (Restated) Due from Officers and Employees 3,627.25 3,627.25 Due from Non-Government Organizations/ 2,184,024,563.51 23,221,097.60 People's Organizations Other Receivables 22,225.51 15,411.41 Total 2,184,050,416.27 23,240,136.26 Due from Officers and Employees pertains to the amount receivables from employees due to overpayment and to be deducted from their salaries. Due from Non-Government Organizations/People’s represents funds released to non- formal organizations/groups and Request for Fund releases to NGOs/POs beneficiaries of the various modalities of the KALAHI program. Other Receivables pertains to Field Office X deposit made to Golden Uptown Arcade / Khu Felicisimo Jr. 6. Inventories Inventory items of the Department includes the following: Inventory Held for Consumption 2023 2022 (restated) Office Supplies Inventory 2,194,951.49 2,570,477.82 Other Supplies and Materials Inventory 98,928.00 869,453.004 Sub-total 2,293,879.49 3,439,930.82 Semi - Expendable Machinery and Equipment Semi - Expendable Office Equipment 1,104,214.00 922,214.00 Semi Expendable Information and Communications 401,174.00 321,182.00 Technology Equipment Semi - Expendable Other Equipment 120,800.00 Sub-total 1,505,388.00 1,364,196.00 Semi-Expendable Furniture and Fixtures Semi Expendable Furniture and Fixtures 517,432.00 477,442.00 Sub-total 517,432.00 477,442.00 Total Inventories 4,316,699.49 5,281,568.82 Inventory Held for Consumption 2023 2022 (restated) Carrying Amount, January 1, 2023 3,439,930.82 3,439,930.82 Additions/Acquisitions during the year 12,738,297.82 Expense during the year except write-down (13,884,349.15) Adjustment during the year Write-down during the year 36 Reversal of Write-down during the year Carrying Amount, December 31, 2023 2,293,879.49 3,439,930.82 Semi-Expendable Machinery and Equipment Carrying Amount, January 1, 2023 1,364,196.00 1,364,196.00 Additions/Acquisitions during the year 3,465,905.57 Expense during the year except write-down (3,324,713.57) Adjustment during the year Carrying Amount, December 31, 2023 1,505,388.00 1,364,196.00 Semi-Expendable Furniture and Fixtures Carrying Amount, January 1, 2023 477,442.00 827,792.00 Additions/Acquisitions during the year 1,879,212.30 Expense during the year except write-down (1,488,872.30) Adjustment during the year (350,350.00) (350,350.00) Carrying Amount, December 31, 2023 517,432.00 477,442.00 Total Inventories 4,316,699.49 5,281,568.82 Office Supplies Inventory consists of office supplies, IT supplies and janitorial supplies in stockroom for the use in the operation of KALAHI Other Supplies and Materials Inventory pertains for the supplies and deliveries of batteries and tires for stockpile. Tangible items which are classified as PPE but below the capitalization threshold of ₱50,000.00 are considered semi-expandable properties 7. Other Current Asset 7.1 Advances Accounts 2023 Advances to Special Disbursing Officer 20,000.00 Total 20,000.00 Advances to Special Disbursing Officer pertains to advances granted for the provision of grants and assistance for the implementation of various DSWD programs and projects and services. 8. Property, Plant and Equipment Property, Plant and Equipment for CY 2023 are summarized as follows: 37 Other Furnitures, Machinery and Transportation Property Fixtures and Total Equipment Equipment Plant and Books Equipment Carrying Amount, 34,229,876.74 23,798,770.49 2,223,450.00 115,847.68 60,367,944.91 January 1, 2023 Additions/ 29,057,625.35 3,845,000.00 923,832.30 33,826,457.65 Acquisitions Reclassification Total 63,287,502.09 27,643,770.49 3,147,282.30 115,847.68 94,194,402.56 Disposals Depreciation (As per Statement of (11,847,182.55) (3,336,069.13) (399,145.33) (25,203.48) (15,607,600.49) Financial Performance) Adjustments 4,409,364.35 (66,160.71) (245,822.30) 4,097,381.34 Impairment Loss (As per Statement of Financial Performance) Carrying Amount, December 31, 2023 (As per Statement 55,849,683.89 24,241,540.65 2,502,314.67 90,644.20 82,684,183.41 of Financial Position) Gross Cost (Asset Account Balance 72,804,369.10 29,591,506.88 2,945,160.00 132,650.00 105,473, 685.98 per Statement of Financial Position) Less : Acc. (16,954,685.18) (5,349,966.23) (442,845.33) (42,005.80) (22,789,502.54) Depreciation Allowance for Impairment Carrying Amount, December 31, 2023 (As per Statement 55,849,683.92 24,241,540.65 2,502,314.67 90,644.20 82,684,183.44 of Financial Position) Property, Plant and Equipment is carried at cost less accumulated depreciation. Regular maintenance, repair and minor replacements are charged against Maintenance and Other Operating Expense (MOOE). 9. Intangible Assets Intangible Assets Total Carrying Amount, January 1, 2023 73,350.00 73,350.00 Additions/ Acquisitions Reclassification Total 73,350.00 73,350.00 Disposals Depreciation (As per Statement of (16,299.96) (16,299.96) Financial Performance) Adjustments 38 Intangible Assets Total Impairment Loss (As per Statement of Financial Performance) Carrying Amount, December 31, 2023 (As per Statement of Financial 57,050.04 57,050.04 Position) Gross Cost (Asset Account Balance 81,500.00 81,500.00 per Statement of Financial Position) Less : Accumulated Depreciation (24,449.96) (24,449.96) Allowance for Impairment Carrying Amount, December 31, 2023 (As per Statement of 57,050.04 57,050.04 Financial Position) 10. Other Non-Current Assets 10.1 Prepayments Account Name 2023 2022 (restated) Prepaid Rent 110,000.00 110,000.00 Other Prepayments 237,329.86 Total 347,329.86 110,000.00 Prepaid Rent pertains to Field Office X consists of three months’ security deposit to Golden Uptown Arcade / Khu Felicisimo Jr under check no. 1355448 dated 12/31/2021. Other Prepayments pertains to Field Office IX purchase of communication allowance from service providers for the use of KC RPMO and ACT staff. 11. Financial Liabilities Account Name 2023 2022 (restated) Accounts Payable 180,524,366.08 50,689,977.13 Due to Officers and Employees 2,252,405.23 1,319,976.13 Total 182,776,771.31 52,009,953.26 Accounts Payable pertains to unpaid obligations for the delivered goods and services as of December 31, 2023. Due to Officers and Employees consist of unpaid salaries, reimbursement of transportations and per diem, communications and other unpaid claims as of December 31, 2023. 39 12. Inter-Agency Payables Account Name 2023 2022 (restated) Due to BIR 13,094,049.32 166,253.28 Due to Pag-IBIG 17,500.00 17,500.00 Due to Philhealth 14,856.58 14,856.58 Due to GOCCs 41,730.00 41,730.00 Total 13,168,135.90 240,339.86 Due to BIR consists of income tax deducted from employees and suppliers that are remitted in the ensuing year. Due to Pag-IBIG comprises Pag-IBIG Premiums, Multi-Purpose Loan and Housing Loan which were also remitted during the ensuing month. Due to Phil Health is the unremitted balance from Phil Health premiums that are included in the remittance of the ensuing year. Due to GOCCs include deductions from salaries of MOA workers for their respective loans payable to Social Security System and the same was remitted during the first month of the ensuing year. 14. Trust Liabilities Account Name 2023 2022 (Restated) Guaranty/Security Deposits Payable 725,193.82 704,980.00 Total 725,193.82 704,980.00 Guaranty/Security Deposits Payable in Field Office CAR P689,730.00 pertains to the Performance Security and or Retention Fees, which are returned after completion of the needed services and the lapse of validity period 15. Other Payables Account Name 2023 2022 restated Other Payables 6,820,047.27 907,247.65 Total 6,820,047.27 907,247.65 Other Payables in Field Office II P6,675,479.61 represents unpaid remittances to Social Welfare Employees Association of the Philippines (SWEAP), Social Security System, Mutual Benefit Association (MBA), and the set-up of Accounts Payable for FY 2023 to be used for Community Grant to Barangay Local Government Unit and Suppliers for 2024. 40 16. Service and Business Income Account Name 2023 2022 (Restated) Fines and Penalties - Service Income 345,899.89 585,305.44 Interest Income 1,127,955.93 443,381.49 Total Service and Business Income 1,473,855.82 1,028,686.93 Fines and Penalties - Service Income is the amount charged or being collected by the Department from various contractors/ suppliers for late delivery of goods and services as specified in the Purchase Order. Interest Income represents income earned from various bank accounts of the Department which were remitted to the Bureau of Treasury. 17. Maintenance and Other Operating Expenses 17.1 Traveling Expenses Particulars 2023 2022 (Restated) Traveling Expenses - Local 172,152,482.38 1,578,635.13 Total 172,152,482.38 1,578,635.13 Traveling Expenses - Local includes airfare, per diems and other related travelling expenses of DSWD Officials and Employees on official business to attend various activities within the country for 2023. 17.2 Training and Scholarship Expenses Particulars 2023 2022 (Restated) Training Expenses 590,875,789.58 20,211,389.71 Total 590,875,789.58 20,211,389.71 Training Expenses pertains to payment of honorarium of resource persons, board and lodging and/or hotel accommodation of participants during training and traveling expenses of participants to various trainings, seminars and workshops. It also includes course fees and or registration fees of DSWD officials and employees to training and seminars. 17.3. Supplies and Materials Expenses Particulars 2023 2022 (Restated) Office Supplies Expenses 13,223,059.15 18,255,606.28 Accountable Forms Expenses 11,200.00 Medical, Dental and Laboratory Supplies Expenses 365,000.00 139,884.00 Fuel, Oil and Lubricants Expenses 1,201,606.62 509,408.27 41 Particulars 2023 2022 (Restated) Semi-Expendable –Office Equipment 1,029,655.00 1,193,633.00 Semi Expendable Information and Communications Technology Equipment 2,295,058.57 3,813,712.17 Semi Expendable Communication Equipment 299,900.00 Semi Expendable –Other Equipment 494,735.00 Semi Expendable –Furniture and Fixtures 1,488,872.30 3,627,781.89 Other Supplies and Materials Expenses 661,290.00 2,056,153.00 Total Supplies and Materials Expenses 20,275,741.64 30,390,813.61 Office Supplies Expenses- This account is used to recognize the cost or value of purchased/acquired office supplies used for operations. Accountable Forms Expenses- This account is used to recognize the cost of accountable forms with or without money value such as Official Receipts and Checks issued by banks. Medical, Dental and Laboratory Supplies Expenses- This account is used to recognize the costs of medical, dental and laboratory supplies issued to end-users for DSWD operations. Fuel, Oil and Lubricants Expenses- This account is used to recognize the costs of fuel, oil and lubricants issued for use of government vehicles and other equipment in connection with DSWD operations/projects. Semi-Expendable -Office Equipment Expenses- This account is used to recognize the cost of semi-expendable machinery and equipment used in DSWD operation. Semi-Expendable Furniture, Fixtures This account is used to recognize the cost of semi-expendable machinery and equipment used in operation. Other Supplies and Materials Expenses- This account is used to recognize the cost of inventories issued to end users not otherwise classified under the specific inventory expense accounts. 17.4. Utility Expenses Particulars 2023 2022 (Restated) Water Expenses 195,573.65 13,062.90 Electricity Expenses 1,608,365.02 453,254.40 Total Utility Expenses 1,803,938.67 466,317.30 Water Expenses payments for the water consumption at DSWD Central Office and KALAHI CIDSS Building. In Field Office represents water expenses 42 incurred from January to December 2023 at KALAHI-CIDSS sub-office and its share in the main building in the FO. Electricity Expenses are payments made to MERALCO for the electric consumption at DSWD Central Office and KALAHI CIDSS Building. In Field Office represents water expenses incurred from January to December 2023 at KALAHI-CIDSS sub-office and its share in the main building in the FO. 17.5. Communication Expenses Particulars 2023 2022 (Restated) Postage and Courier Services 164,711.03 Telephone Expenses- Mobile 4,556,794.53 1,097,548.00 Internet Subscription Expenses 258,162.00 Total Communication Expenses 4,979,667.53 1,097,548.00 Postage and Courier Services represents payment made to the LBC Express, Inc. and Intertraffic Transport Corp. for courier services of the department. It also includes liquidation of cash advance for Operating Expenses by the Social Welfare Attache at foreign posts. Telephone Expenses consists of mobile expenses made to Globe Telecom, Inc. and Smart Communications, Inc. for the Globe and Smart cellular phones used by DSWD officials and employees and the individual reimbursements made for the communication load allowance in lieu of prepaid card allocation for 2023. Internet Subscription Expenses This account is used to recognize the cost of using internet services in DSWD operations. 17.6. Awards/Rewards and Prizes Particulars 2023 Prizes 395,000.00 Total Prizes 395,000.00 Prizes in Field Office V P110,000.00 represents the development incentives given to community volunteers during the “Regional Bayani Ka! Desk Review” as well as the cash prizes given to the winners of the “Bayanihan Para sa Pag Usbong: A Kalahi-CIDSS Digital Poster Making Contest”. In Field Office XI P250,000.00 is cash prizes given during Regional Bayani Ka Awards 2023 and DSWD Onse Caravan 2023. 17.7 Professional Services Particulars 2023 2022 (Restated) Auditing Services 10,840.00 43 Consultancy Services 1,876,040.00 941,673.00 Other Professional Services 1,869,900.00 157,666.15 Total Professional Services 3,756,780.00 1,099,339.15 Auditing Services pertains to Field Office II travel expense reimbursement of the regional auditors used for site validation in different municipalities under KALAHI implementation. Consultancy Services includes payment to service providers engaged in the development of systems and the program/project consultants. Other Professional Services are payments to DSWD hired workers under the Cost of Service Contracts for the period January to December 31, 2023. 17.8 General Services Particulars 2023 2022 (Restated) Janitorial Services 1,223,307.12 183,802.88 Security Services 238,425.91 Total General Services 1,461,733.03 183,802.88 Janitorial Services. In Field Offices are payments made to utilities and other job order workers for their services rendered to the field office and sub-regional offices. Security Services refers to payments for security services rendered at DSWD FO XI facilities. 17.9 Repairs and Maintenance Particulars 2023 2022 (Restated) Repairs and Maintenance - Buildings and 80,200.00 1,089,605.32 Other Structures-Building Repairs and Maintenance - Machinery and 108,000.00 151,224.00 Equipment –Office Equipment Repairs and Maintenance - Transportation 1,020,787.03 Equipment Repairs and Maintenance -Motor Vehicles 1,889,993.05 Total Repairs and Maintenance Expenses 2,078,193.05 2,261,616.35 Repairs and Maintenance accounts refers to ordinary repairs made to various assets to ensure that it continues to operate and maintains its functionality and performance 44 17.10 Taxes, Insurance Premiums and Other Fees Particulars 2023 2022 (Restated) Fidelity Bond Premiums 2,674,548.75 840,765.00 Insurance Expenses 753,774.90 14,108.74 Total Taxes, Insurance Premiums and Other Fees 3,428,323.65 854,873.74 Fidelity Bond Premiums pertains to payment for the premium of fidelity bond of the officials Insurance Expenses pertains to payment to the Government Service Insurance System for insurance from fire and other perils for various DSWD buildings and motor vehicles. 17.11 Other Maintenance and Operating Expenses Particulars 2023 2022 (Restated) Advertising, Promotional and Marketing 2,513,511.00 32,240.00 Expense Printing and Publication Expenses 1,100,417.50 422,942.97 Representation Expenses 547,189.16 715,746.00 Transportation and Delivery Expenses 195,922.88 Rent/Lease Expenses- Building and Structures 2,040,926.86 Rent/Lease Expenses- Motor Vehicles 323,912.00 718,050.00 Rent/Lease Expenses- Equipment 95,200.00 ICT Software Subscription 14,257.43 Other Maintenance and Operating Expenses 1,342,804.81 62,370.00 Total Other Maintenance and Operating 8,174,141.64 1,951,348.97 Expenses Advertising, Promotional and Marketing Expenses are payment made to AJ and TJ Printing for DSWD Mission/Vision. Printing and Publication Expenses are payment for the Delivery/ Printing/Reproduction of documents/tarpaulin/materials in celebration of various activities of the Department. Representation Expenses are payment for food expenses during meetings, forums and other various activities of the department. It also includes liquidation of Cash Advances by the Social Welfare Attaché for operating expenses at foreign posts. Transportation and Delivery expenses are payments made for the delivery of various relief items from DSWD NRLMS to DSWD Field Offices. 45 Rent/ Lease Expenses- This account is used to recognize rental/lease of land, buildings, facilities, equipment, vehicles, machineries. ICT Software Subscription- pertains to Field Office CAR cost for the IP VPN connection of Field Office, Centers, Institutions, Extension Offices and Provincial Action Team Offices Other MOOE includes the payment of various DSWD operating expenses that do not fall within the specific accounts. 18. Non-Cash Expenses 18.1 Depreciation Particulars 2023 2022 (Restated) Depreciation - Machinery and Equipment- Machinery 66,160.71 949.92 Depreciation - Machinery and Equipment- Office Equipment 2,132,588.98 1,325,542.64 Depreciation - Machinery and Equipment- ICT Equipment 9,360,845.15 3,810,272.78 Depreciation - Machinery and Equipment- Communication Equipment 98,988.33 41,261.67 Depreciation - Machinery and Equipment- Other Equipment 188,599.38 Depreciation-Transportation Equipment- Motor Vehicles 3,336,069.13 1,947,736.39 Depreciation - Furniture, Fixtures and Books - Furnitures and Fixtures 399,145.33 43,700.00 Depreciation - Other Property, Plant and Equipment 25,203.48 16,802.32 Total Depreciation 15,607,600.49 7,186,265.72 The Depreciation for Buildings and Other Structures, Machinery and Equipment, Transportation Equipment, Furniture and Fixtures and Books, Other Property, Plant and Equipment are periodic cost allocation for the wear and tear of the Department's PPE. 18.2 Amortization Particulars 2023 2022 (Restated) Amortization-Intangible Assets 16,299.96 8,150.00 Total Amortization 16,299.96 8,150.00 Amortization This pertains to Field Office IX amortization of computer software anti-virus covering period of January –December 2023. 46 19. Net Financial Assistance/Subsidy Financial Assistance/Subsidy from NGAs, LGUs, GOCCs Particulars 2023 2022 Total Financial Assistance/Subsidy from NGAs, LGUs 9,903,584,779.56 6,608,750,723.60 Subsidy from National Government 5,043,558,678.75 3,394,736,456.75 Subsidy from Central Office Agencies 4,860,026,100.81 3,214,014,266.85 Less: Total Financial Assistance/Subsidy to NGAs, LGUs 8,014,118,792.73 4,852,313,413.06 Subsidy to Regional Offices/Staff Bureaus 4,860,026,100.81 3,214,014,266.85 Subsidies - Others 3,154,092,691.92 1,638,299,146.21 Net Financial Assistance/Subsidy 1,889,465,986.83 1,756,437,310.54 The account Subsidy to Regional Offices/Staff Bureaus pertains to transfer of funds through funding checks charged against Loan Proceeds to Field Offices for the implementation of KC-NCDDP. The Subsidies-Others is recorded upon the liquidation of the communities/LGUs of the grant provided to them for the implementation of the project. The account Subsidy from National Government is further broken down as follows: Particulars 2023 Receipt of Notice of Cash Allocation (NCA) 5,041,184,368.81 Tax Remittance Advice (TRA) 2,374,309.94 Subtotal 5,043,558,678.75 Less: Adjustment Reversion of Lapsed NCA Total 5,043,558,678.75 20. Loan Application in FY 2023 IBRD Loan No. 9191-PH: KC-NCDDP-Additional Financing This is for the Additional Financing for the KALAHI CIDSS - National Community Driven Development Project (KC-NCDDP), entered by the Republic of the Philippines and International Bank for Reconstruction and Development (IBRD) last December 21, 2020 with a total loan amount of US$300,000,000.00. The objective of the Project is to empower communities in targeted municipalities to achieve improved access to services and to participate in more inclusive local planning, budgeting and implementation. 47 On December 12, 2023, the Department submitted to the IBRD the fifth WA for this loan for Advance to Designated Account amounting to US$29,181,544.89. Consequently, the said amount with an equivalent peso amount of PhP1,625,266,142.65 was credited to the Treasurer of the Philippines Foreign Currency Deposit – Dollar Account on December 18, 2023. As of December 31, 2023, the cumulative total withdrawal application is US$296,252,525.44. The balance amounting to US$3,747,474.56 will be withdrawn in FY2024, if the Project still needs funds for the completion of the Project. 21. Prior Period Adjustment Liquidation of prior years’ cash advances, other maintenance and operating expenses refunds and adjustments on the payment of prior years’ not yet due and demandable are the prior period adjustments resulting to over/under statement of Net Assets/Equity of 2022 The effect of restatement on those financial statements is summarized below. There is an effect on the 2022 Statement of Financial Performance and Financial Position. Effect on 2022 Statement of Financial Performance: Particular Amount Net Increase in Income Accounts 0.00 Net Increase in Expense Accounts 910,724,412.66 Decrease in Surplus/Deficit 910,724,412.66 Effect on 2022 Statement of Financial Position: Particular Amount Net Decrease in Assets 909,128,570.70 Net Decrease in Liabilities 4,637,407.32 Net Increase in Beg. Of Net Asset/Equity 6,233,249.28 Decrease in Net Assets/equity 910,724,412.66 Prior Period Adjustment pertains to liquidation of prior years’ fund transfers amounting to 907, 991,041.81 and changes in MOOE amounting to 2,733,370.85. It comprises of 2022 net adjustment of 904,491,163.38 (909,128,570.70 less 4,637,407.32) and adjustments from CY 2021 and prior years amounting to 6,233,249.28. Particular 2022 2022 Restated Adjustment Changes in MOOE Travelling Expense 2,000,000.00 1,578,635.13 (421,364.87) Training Expense 19,818,117.81 20,211,389.71 393, 271.90 Office Supplies Expense 18,684,958.86 18,255,606.28 (429,352.58) 48 Particular 2022 2022 Restated Adjustment Semi-Expendable-Office 1,052,355.00 1,193,633.00 141,278.00 Equipment Semi-Expendable- 2,727,442.17 3,813,712.17 1,086,270.00 Information and Communications Technology Equipment Semi-Expendable-Other 373,935.00 494,735.00 120,800.00 Equipment Other Supplies and 2,436,383.89 3,627,781.89 1,191,398.00 Materials Expenses Water Expenses 13,686.35 13,062.90 (623.45) Other Professional 141,067.95 157,666.15 16,598.20 Services Repairs and Maintenance- 675,672.03 1,020,787.03 345,115.00 Transportation Equipment Fidelity Bond Premiums 334,515.00 840,765.00 506,250.00 Depreciation-Office 1,401,740.41 1,325,542.64 (76,197.77) Equipment Depreciation-ICT 3,915,828.88 3,810,272.78 (105,556.10) Equipment Depreciation-Furniture 78,215.48 43,700.00 (34,515.48) and Fixtures Fund transfer to Brgy Subsidies-Others 730,308,104.40 1,638,299,146.21 907,991,041.81 Decrease in 783,962,023.23 1,694,686,435.89 910,724,412.66 Surplus/Deficit 20. Related Party Transactions 20.1 Key Management Personnel The key management personnel of the DSWD are the Head of the Agency, the members of the Executive Committee which consists of the Undersecretaries and the Assistant Secretaries, and the members of the Management Committee which consists of the Directors of the Offices, Bureaus, and Services. 49 DSWD-GF-OIO I REV02 \ 22 SEP 2023 VOSWO w D«|>anment of Socti^l WeifArn and OevAlopmem baconc pujpihas Appendix A STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS Fund Cluster 02 - Foreign Assisted Projects Fund KC-NCDDP - Additional Financing (IBRD 9191-PH) The management of Department of Social Welfare and Development is responsible for all information and representations contained in the accompanying Statement of Financial Position as of December 31, 2023 and the related Statement of Financial Performance, Statement of Cash Flows, Statement of Comparison of Budget and Actual Amounts, Statement of Changes in Net Assets/Equity and the Notes to Financial Statements for the year then ended. The financial statements have been prepared in conformity with the International Public Sector Accounting Standards and generally accepted state accounting principles, and reflect amounts that are based on the best estimates and informed judgment of management with an appropriate consideration to materiality. In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition and liabilities are recognized. WAYNE C. BELTZAR AT/TY. EDWARD JUSTINE R. O Director IV, Financial Management Service Undersecretary for GeneraL^ - linistration^nd Support Sefvices foup 1 I FEB ?0Z4 Date Signed Date Signed V i DSW D Central Office. IBP Road. Balasan Pambansa Complex. Constitution Hills, Quezon City. Philippines 1126 Website: http://www.dswd.gov.ph Tel Nos.: (632) 8 931-8101 to 07 Telefax: (632) 8 931-8191