Findings No.10 COA Annual Audit Report 2006

July 25, 2008

10. Only P60,852.41 or 0.154% was settled for calendar year 2006 on accumulated audit disallowances/charges totaling P39,467,817.44 on all funds as recorded in the books of accounts.

Section 9.1 of the Revised Manual of Certificate of Settlement and Balances (CSB) provides, among others, that the Head of Agency shall ensure that disallowances and charges are settled within the prescribed period, the requirements of transactions suspended in audit are complied with, and appropriate actions are taken on the deficiencies noted as contained in the Notice of Suspension (NS), Notice of Disallowances (ND), Notice of Charge (NC) and Audit Observation Memorandum (AOM).

Audit disallowances/charges under the General Fund, Trust Fund and Special Education Fund covering the period from calendar year 1978 to 2002 reached P39,467,817.44 as reflected in the trial balance as follows: [Annex D]

Name of Fund

Disallowances/ChargesGeneral Fund P 38,514,024.08Trust Fund 798,084.33SEF155,709.03Grand Total P 39,467,817.44

Review of records disclosed that only P60,852.41 was settled on all audit disallowances/charges as booked-up in the books of accounts from January 1 to December 31, 2006.

In reply to our Audit Observation Memorandum, the City Accountant commented that only P60,852.41 or 0.154% was settled for disallowance because the employees/persons liable for disallowance were no longer in government service and the entities involve were no longer transacting with the city government, considering that these documents have remained dormant and outstanding for several years.

Recommendation:

Monitor settlement of audit disallowances/charges. Henceforth, ensure that government auditing rules and regulations are strictly complied with before processing claims/effecting payments to minimize disallowances and charges in audit.

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Written by admin · Filed Under Commission on Audit, Gingoog City