Commission On Audit: Dr. Josephine B. Sabando

Republic of the Philippines
COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City
INDEPENDENT AUDITOR’S REPORT
DR. JOSEPHINE B. SABANDO

Hospital Director
Quezon City General Hospital
Quezon City
Qualified Opinion
We have audited the financial statements of the Quezon City General Hospital, which
comprise the Statement of Financial Position as at December 31, 2020, and the Statement
of Financial Performance, Statement of Changes in Net Assets/Equity, Statement of Cash
Flows, Statement of Comparison of Budget and Actual Amounts for the year then ended,
and Notes to Financial Statements, including a summary of significant accounting
policies and other explanatory information.
In our opinion, except for the effects and possible effects of the matters described in the
Basis for Qualified Opinion section of our report, the accompanying financial statements
present fairly, in all material respects, the financial position of the Quezon City General
Hospital as at December 31, 2020, and its financial performance, cash flows, changes in
net assets/equity, comparison of budget and actual amounts for the year then ended, and
its notes to financial statements in accordance with International Public Sector
Accounting Standards (IPSAS).
Basis for Qualified Opinion
The validity, existence and completeness of the reported balance of the Property, Plant
and Equipment amounting to P2,042,203,580.92 could not be relied upon due to
unreconciled variance of P77,008,331.46 between the balance of the Report on the
Physical Count of Property, Plant and Equipment amounting to P2,119,211,912.38 and
the accounting records, and non-compliance with the guidelines and procedures in the
conduct of inventory pursuant to COA Circular No. 2020-006 dated January 31, 2020,
and Section 49 of the Government Accounting and Auditing Manual (GAAM), Vol. I.
The validity, existence and completeness of the reported balance of Inventory accounts in
the aggregate amount of P373,612,220.41 could not be relied upon due to unreconciled
difference of P80,430,831.59. between the Report on the Physical Count of the
Inventories amounting to P293,181,388.82 and the accounting records contrary to of
Sections 2 and 111 of Presidential Decree No. 1445, COA Circular No. 2018-003 dated
November 21, 2018, Section 491 of the GAAM, Vol. I. Moreover, stock cards and
Supply Ledger Cards were not maintained as required in Sections 182 and 205, of the
Government Accounting Manual for Local Government Units, Vol. I.
We conducted our audit in accordance with 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, and we have fulfilled 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 qualified opinion.
Emphasis of Matter Paragraph
Without modifying our opinion, we draw attention to Note 26 of the Notes to Financial
Statements, which explains that the restated financial statements for the year ended
December 31, 2019 have been restated from those which we originally reported on
June 24, 2020.
Responsibilities of Management and Those Charged

with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the 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 misstatement, whether due to fraud or error.
Those charged with governance are responsible for overseeing the agency’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 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.
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Commission On Audit: Dr. Josephine B. Sabando

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Commission On Audit: Dr. Josephine B. Sabando

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Republic of the Philippines

INDEPENDENT AUDITOR’S REPORT

DR. JOSEPHINE B. SABANDO

Basis for Qualified Opinion

We conducted our audit in accordance with International Standards of Supreme Audit

Emphasis of Matter Paragraph

Responsibilities of Management and Those Charged

Auditor’s Responsibilities for the Audit of the Financial Statements

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