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Friday, September 16, 2005
City's finance records a mess: Audit
By Lizanilla J. Amarga
AN AUDIT team from the Commission on Audit (COA) said they were having problems reconciling P83 million in account items of the City Government of Cagayan de Oro in their conduct of city's annual audit report.
The team also noted that for the last five years the "reliability and validity of cash advances were in question" because City Hall's accounting department "failed to prepare the required bank reconciliation statements."
COA Cluster Director Mariano Kintanar in his 72-page audit report said they doubt the "accuracy, validity and reliability" of bank reconciliation statements of City Hall for the past five years.
Kintanar explained that these bank reconciliation statements (BRS) are very essential "to reconcile the cash balance per book and the cash balance per bank in order to ensure the accuracy, reliability and/or validity of the depository account balances in the accounting records and in the monthly trial balance and the year-end financial statements."
COA officials who requested anonymity told Sun.Star Friday that the report referred to those prepared annually by COA from 1999 to 2003, the same period when Mayor Vicente Emano took over as the city mayor of Cagayan de Oro.
Emano through City Accountant Wilma Rugay sent a letter dated Feb. 4, 2005 to the audit office stating that they have partially complied with the COA findings.
She said, "The findings are noted. However, it is to be informed that the City Accounting Department has partially complied on the previous findings made. It has initiated and complied with the suggested resolution on the problem concerning the volume of transactions, the number of period covered and the deficiency of reports earlier accepted by COA."
"Hence, the completion of the submission of the Bank Reconciliation Statement including prior years in included in the compliance activity of the Office. The City Accounting Department shall be instructed and ordered by the City Mayor to fast track compliance to this findings in CY 2005."
But Kintanar's letter still voiced dissatisfaction despite Rugay's explanation.
"The accuracy, validity, and reliability of the Cash in Bank-Local Currency, Current Account could not be fully ascertained due to non-reconciliation of prior years reconciling items totaling P83,173,867.12," he said in his Audit Certificate dated Feb. 24, 2005,
He added "due to the status of the agency's records, we were unable to satisfy ourselves as to the veracity of the amounts of the aforementioned accounts by means of other auditing procedures."
Kintanar is making sure that City Hall's accounting department will prioritize the reconciliation of the P83 million funds especially the 2003 funds.
Kintanar's team audited the accompanying consolidated balance sheet of the city as of Dec. 31, 2004 and the related statements of Income and Expenses and Cash Flows for the year then ended.
"These financial statements are the responsibility of the City of Cagayan de Oro's management. Our responsibility is to express an opinion on these financial statements based on our audit," Kintanar said.
The COA reported how prior years reconciling items for the account Cash in Bank--Local Currency, Current Account (111) totaling P83,173,867.12 "remained unadjusted in the books of accounts casting doubts as to the accuracy, validity and reliability of the cash in bank balances for the current year."
For 2004 alone, the COA report said the accounting department prepared and submitted 102 Bank Reconciliation Statements.
The COA report enumerated items that "should be reconciled in order to arrive at a reliable and valid cash in bank balances for the current year" that included those from the General Fund, Special Education Fund and Trust Fund amounting to P83 million.
Under General Fund accounts include P21.9 million from the Development Bank of the Philippines (DBP) and P8.8 million from the Land Bank of the Philippines (LBP), P5.4 million from Philippine Postal Savings Bank (PPSB), P5.9 million from PCI Bank, P7.83 million from PAB, P1.4 million from PNB and P3.3 million from Philippine Veterans Bank.
For Special Education Fund, P3.7 million from DBP and P5.1 million from PPSB while under the Trust Fund, P9.4 million from DBP and P10.3 million from LBP.
(September 16, 2005 issue)
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