Findings No.1 COA Annual Audit Report 2004

July 25, 2008

1. Unserviceable Property, Plant and Equipment totaling P4,880,132.98 were not disposed of as required under COA Circular No. 92-386 dated October 20, 1992.Section 112 of the Manual on the New Government Accounting System, Volume I, defines supplies or property to include everything, except real property, which may be needed in the transaction of public business or in the pursuit of any undertaking, project or activity, whether in the nature of equipment, furniture, stationery, materials for construction or personal property of any sort, including non-personal or contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security and related services.

Section 167 of COA Circular No. 92-386, dated October 20, 1992 provides that when the supplies or property of a local government unit have become unserviceable from any cause, or are no longer needed, the officer immediately accountable therefore shall return the same to the head of the department or office who shall cancel the corresponding Memorandum Receipt. If no longer needed in the department, the head of the department or office shall return the same to the general services officer, municipal or barangay treasurer, as the case may be with the use of Property Return Slip (LGU Form No. 12). The general services officer, municipal or barangay treasurer, as the case may be, shall through the local chief executive, file an application for its disposal with the provincial, city or municipal auditor who shall conduct an inspection and determination whether the subject property is with or without value.

While it was observed that the City General Services Office (CGSO) continues to dispose unserviceable properties returned to their office, it was found that certain properties under the City Engineering Office were not reported as unserviceable property notwithstanding the fact that said properties have not been used since the time these were acquired by the City Government.

It was also found that properties from the Human Resource Management Office (HRMO) were inventoried and inspected as unserviceable since September 20, 2002 but was not disposed by the CGSO.

The following properties were found to be unserviceable during the physical inventory but remain as part of the Plant, Property and Equipment account:

QuantityArticlesIssuing OfficeTotal Value1Batching PlantCEO187,000.001Portable Welding machine powered by diesel engine

CEO

28,000.001Hydraulic Presser 10 Tons CapacityCEO16,550.001Pneumatic Tire ChargerCEO29,848.001Engine Performance AnalyzerCEO20,930.00110 TPH Mobile Rock CrasherCEO1,133,079.351Sheep’s foot accessory attachmentCEO2,475,777.932Log box stationHRMO129,525.001Log box Magnetic StationHRMO83,575.0012Magnetic Card Access and remote dataHRMO277,500.003Battery Pack with AVRHRMO43,812.001Computer Notebook Acer NoteHRMO49,500.002Log box magnetic StationHRMO176,063.003Micro Log with current Loop ConverterHRMO228,972.70GRAND TOTAL4,880,132.98

“The findings are noted. However, it is rather important to mention that the City General Services Office has been trying to dispose of unserviceable properties but often is confronted with the difficulty of disposal usually affecting the valuation of the assets to be disposed of since there are limited takers. Often, the interested buyers complained of the amount of the minimum bid as they find this as relatively high. The CGSO has to conduct another bidding, hence, the delay of disposal. Appropriate instructions, though shall be made to the CGSO and the City Accounting Department by the City Mayor to act on the above recommendation with dispatch.” (Annex A)

Recommendation:

Require the City General Services Officer to dispose the remaining unserviceable property pursuant to COA Circular No. 92-386 in order to unclog the office with unnecessary or no longer needed property and equipment and to generate additional income out of the sale proceeds of these unserviceable property.

Require the Accounting Department to prioritize the determination of other needed data/information of these property to speed up the disposal.

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Written by admin · Filed Under Cagayan de Oro, Commission on Audit