BY GEROME DALIPE IV
ILOILO – The Commission on Audit (COA) called on the Leon municipal government to conduct and prepare a complete net book value report of all its assets.
In their annual audit reports 2023, COA noted the inventory of the municipality’s property; plant and equipment (PPE) worth P553.25 million could not be ascertained due to non-preparation of the physical inventory and report on physical count of all its assets.
Such practice is contrary to the New Government Accounting System (NGAS), which requires government units and agencies to conduct and prepare complete and accurate plant, property, and equipment account balances at the end of every fiscal year.
Sections 5 and 6 of COA Circular No. 2020-006 dated Jan. 31, 2020, also provide the guidelines and procedures in the conduct of physical count of property, plant, and equipment (PPE), and disposition for non-existing or missing items for PPE account balances of government agencies.
In the audit report, the auditors said the town’s inventory committee conducted a physical count of the municipality’s properties at the end of the year.
But the auditors said the committee failed to prepare the physical inventory and report and submit the same to the accounting office and the audit team which could have been used to verify the balances of the PPE accounts as reflected in the financial statements.
“Further verification showed that the inventory committee also failed to prepare the physical inventory plan (PIP) containing, at the least, the specific assignments or duties of the committee members, the cut-off date, and the schedule specifying the dates and locations of the inventory taking activities from start-up to the targeted completion of the physical inventory,” the auditors said.
Hence, COA noted the deficiencies rendered the agency’s inventory ineffective, thus, casting doubts on the existence, accuracy, and reliability of the balances of the PPE accounts in the financial statements at year-end.
Likewise, the auditor said that verification of reports on PPE accounts disclosed that the physical inventory and report being maintained by the municipal accountant were not updated, hence, reconciliation of their balances could not be facilitated.
The municipal accountant told auditors that the municipal government had already assigned personnel to update the physical inventory and report.
However, due to the voluminous transactions, the town accountant said she was not able to update the physical inventory and report.
Likewise, the auditors said they found out the storekeeper disclosed that she was assigned as the municipality’s storekeeper despite the absence of an office order designating her to such a position.
The storekeeper said she could not prepare the required reports since she was still familiarizing herself with the duties and functions and the reports to be prepared.
In the audit reports, the auditors recommended that the inventory committee to prepare the physical inventory plan and the report on the physical count of PPE and submit the report to the accounting office for reconciliation and to the audit team for verification in compliance with the COA circular.
The auditors also recommended that a corresponding executive order be issued designating the general services officer or storekeeper to perform the functions and responsibilities of the town’s supply and property unit./PN
