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Thursday, July 27, 2006
COA finds Talisay P69M ‘discrepancy’
Like Cebu City, the Talisay City Hall got a similar problem in the inventory report of its property, plant and equipment (PPE) accounts, as state auditors noted that these did not jibe with the P69.09 million that appeared in its book of accounts.
In its 2005 audit report, the Commission on Audit (COA) stated that the existence and validity of Talisay’s PPE accounts could not be determined because of incomplete inventory report, non-entry of dates of acquisition and amounts of individual assets.
In 2005, the City Government reported a total of P672.4 million as PPE and other assets accounts which were broken as follows: General Fund – P613.6 million; Special Education Fund – P14.4 million and Trust Fund – P44.3 million.
However, COA noted that the General Services Officer (GSO) submitted only a partial and incomplete inventory report as of October 2005 for PPE totaling P70.6 million, “excluding land, buildings, structures and computer software.”
Since the report lacks the dates of acquisition and amounts of the individual asset, the COA said it is difficult to reconcile with the records in the City’s accounting unit.
“Thus, PPE accounts presented in the financial statements are doubtful because of the absence of reconciliation between the two records amounting to P69,094,295.65 excluding the accounts land, land improvements, buildings, other structures, motor vehicles and computer software which are determined to be existing,” it said.
The report, though, quoted the GSO’s statements as saying that a partial inventory taking was conducted on City Hall’s PPE.
But GSO’s assigned staff failed to indicate in inventory reports the dates of acquisitions and amounts of assets as “references/data of these assets were taken from ARE (Acknowledgment Receipt for Equipment) on file which had no dates and amounts either.”
The auditor’s office also reportedly conducted a separate physical inventory but failed to complete it because of time and manpower constraints.
Hence, the COA directed the Talisay City GSO to form an inventory task force to complete the inventory taking and submit accurate inventory report, with dates and amounts, and follow the guidelines as provided for under Sections 118-120 of the New Government Accounting System (NGAS) manual.
In a related report, the COA found out that some PPEs and other supplies inventory were not booked up, resulting to understatement of the PPE and Government Equity accounts amounting to P47.1 million.
The COA said that the Talisay City modern slaughterhouse, the Talisay City College and Homeowner’s Association purchased some assets for their operations in 2005 but were not booked or capitalized as assets.
“These were directly debited to the Trust Liability accounts,” it said.
Similarly, state auditors observed that expenditures for projects implemented through financial assistance were not entered as capital account or under CIP (Construction in Progress) in the Trust Fund and General Fund accounts.
These assets totaling P47.1 million and purchased without booking up the corresponding asset accounts are as follows:
Talisay City College – P165,024.95; Slaughterhouse, P292,060.00; Homeowner’s Association – P1.2 million; Financial Assistance (Trust Fund) – P39.6 million and Financial Assistance (General Fund) – P5.6 million.
If not properly monitored, the COA warned that the non-booking up of these assets might lead to losing them “due to incorrect recording and lack of documentation like the issuance of ARE and not taking up in the inventory report.”
But the COA noted the Talisay City Hall’s explanation that the slaughter fees are still booked up in the Trust Fund account in the absence of an ordinance specifying the imposition of new fees.
Also, the City College is reportedly still in the transition period to become a state university.
In its recommendation, the COA directed City Hall to “take up” unrecorded asset accounts in the books as follows:
Under Trust Fund: Other Supplies Inventory – P5.1 million; Land – P724,578.58; Land Improvements – P6.2 million; Markets and Slaughterhouse – P28.5 million; Other structures – P14,641; Furniture and Fixtures – P314,640; Motor Vehicle, P400,000; Other PPE – P13,710 and Prior Year Adjustments – P41,406,825.71.
Under General Fund: Other Supplies Inventory – P4.6 million; IT Equipment and Software – P997,000 and Prior Year Adjustments – P5.6 million.
The COA also cautioned the bookkeeper/accountant to analyze the transactions well, record the entries correctly and be guided by Section 97 of NGAS manual.
It also recommended the transfer of accounts of the Talisay City College and new City Abattoir to the General Fund as Special Accounts. (GC)
For Bisaya stories from Cebu. Click here. (July 27, 2006 issue)
Write letter to the editor.Click here.
Join the Sun.Star message board.Click here.
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