Wednesday, July 26, 2006
Audit office questions P325M supplies
By Rene H. Martel
CEBU CITY -- The Commission on Audit (COA) asked Cebu City Hall to conduct a physical inventory of supplies and properties after finding P325.83 million worth of items with "doubtful validity." Record-keeping seems to be the problem.
The General Services Office (GSO), for example, has to reconcile the difference of P202.47 million in the inventory reports of 18 properties, plants and equipment (PPE) with those reflected in the books of account.
It also failed to submit inventory reports on other PPEs such buildings, highways and bridges amounting to P1.68 billion.
In its 2005 annual audit report, COA said the supplies and properties could not be traced because accountable officers could not be located.
Accountabilities of retired personnel remain in the books and inventory reports on perishable items such as food and crops do not tally with the book of accounts.
"Most of their balances per books do not reconcile with those in the custody of accountable officers, who replied to our confirmation requests," COA said.
Overstatement
The need to update records is also underscored by the overstatement of Cebu City's cash in the banks.
Since its records reflect a bigger amount than what it actually has in the banks, City Hall "may spend beyond its resources." Worse, it might issue bouncing checks.
COA said the City overstated its cash savings by P87.38 million because of unrecorded disbursements and other items.
These include the garnishment of bank deposits amounting to P53.72 million, after the City lost its case on a land dispute, and check disbursements worth P8.48 million that were not forwarded to the accounting office.
City Administrator Francisco Fernandez told COA the garnished amount is still awaiting final decision in the courts and could still be recovered, hence its inclusion in the City's bank deposits.
As to Cebu City's foreign loans, COA found them to be understated by P42.714 million. City Hall records reflected a smaller amount compared with bank records.
City Hall pegged it at P5.19 billion. But when COA verified with conduit Land Bank of the Philippines (LBP), it is already P5.23 billion.
The difference, COA learned, was due to fluctuating conversion rate of the yen against the peso.
Discrepancy
The discrepancy was "between the billings of LBP Plaza Independencia and its office."
The loan was chiefly used to pay for the South Reclamation Project, now called the South Road Properties.
Domestic loans, on the other hand, were overstated by P27.43 million. The bank's records showed the City owed it P37.60 million but City Hall placed it at P65 million.
Also, accrued interests of MCDP Loan 1 and 2 and other domestic loans totaling P162.38 million were not recorded as payables in the loan accounts for the general fund.
COA recommended that the accounting office have its personnel in charge of the loan accounts to make extra effort to reconcile regularly its records with that of the banks.
Balancing
In analyzing inventory accounts of office supplies, accountable forms, spare parts, construction materials, drugs, medicine and other properties, COA came up with P387.98 million.
But 83.98 percent or P325.83 million of that could not be established as true or existing items.
That is because balances in the books, established from confirmations sent by the accountable officers, were "very much higher" than actual inventories.
"Other inventories cannot be determined because some accountable officers did not reply to our confirmation requests," COA said. Those who responded only had a total balance of P62.14 million.
Accountable officers are also not identified.
Others, COA said, are already either retired or resigned from City Hall. And no proper turnover of records was made.
A former employee of the City Engineer's Office, for example, still has to account for items worth P4.12 million recorded under his accountability.
Inventory
In coming up with the report, COA had to ask for confirmations because of the lack of related inventory reports.
"Conduct a physical inventory to determine the actual balance on hand and require the accountable officers to prepare and submit their utilization reporters immediately," COA suggested.
It, however, acknowledged GSO's reasons for the difference in the PPE accounts, which include office equipment, software, vehicles, and other transportation equipment.
GSO officer-in-charge Ester Cubero explained that the difference is because of the sale of junk vehicles and equipment whose original costs were not yet removed from the books, and the inclusion of several unserviceable equipment units.
As to the other PPEs, such as land improvements, buildings, hospitals and health centers, markets and infrastructures, which amount to P1.68 billion, COA simply told GSO to submit the inventory reports. (Sun.Star Cebu)
(July 26, 2006 issue)
Write letter to the editor. Click here.
Join the Sun.Star message board. Click here. |
Impeach raps v. Arroyo endorsed to House body