Thursday, August 23, 2007 COA tells MCIAA: hasten titling of 704 lots
AIRPORT officials have yet to act on a recommendation to get titles for land the Mactan Cebu International Airport Authority (MCIAA) owns, the Commission on Audit (COA) said in a memo.
COA said that the P1.459 billion recorded in MCIAA’s “land account” was still based on a tax declaration. There are 704 parcels of land that remain untitled and 30 lots without tax declarations.
The recorded value of P52.296 million for the 30 lots was computed at 40 percent of the prevailing market price in 2002.
“We recommended that the management should exert extra efforts for the titling of the parcels of land reportedly owned by MCIAA as this will not only confirm ownership but will also ensure accurate computation of real property taxes,” the COA memorandum reads.
The COA also suggested that the MCIAA management seek assistance from licensed independent experts for the appraisal of its land, as required by law.
COA noted that in an exit conference, General Manager Danilo Augusto Francia assured that titling MCIAA lots is an ongoing activity, though it takes a long time.
Auditors also stated that the MCIAA’s practice of offsetting the rental income of P1.4 million against MCIAA’s long-term payable to Acoland Inc. is not consistent with the rules.
Acoland is the developer of MCIAA’s 90 hectares in the Mactan Economic Zone (MEZ) II.
COA reminded the MCIAA management that presentation of financial statements requires that assets and liabilities, and income and expenses, “shall not be offset unless required or permitted by a standard or an interpretation.”
“It is important that assets and liabilities and income and expenses are reported separately,” read the COA memo.
MCIAA’s liability resulted from disbursements made by Acoland in developing MEZ II. Acoland is to remit to MCIAA, as rent, a percentage of its collections from premises leased.
In August 2006, the long-term liability of MCIAA with Acoland (P1,402,008.19) was offset against Acoland’s remittances for the payment sharing scheme.
“The practice is not allowed under the current accounting standards,” the COA said in its memo.
But Francia said that offsetting is the way business is done around the world. He cited the case of a telecommunications company that gave pushcarts to MCIAA for the use of passengers.
“Actually, that is not really a donation but payment for advertising because Smart puts its name on every pushcart,” Francia said. (EOB)
