Findings No.2 COA Annual Audit Report 2004

July 25, 2008

The subsidiary ledgers for cash in bank do not tally with the general ledger, because posting of entries were not reconciled, in violation of Section 10, NGAS Volume II, thus it affected the balances of the accounts.

Section 10 of the New Government Accounting System (NGAS) Volume II, provides the following provisions:

“xxx The subsidiary ledger (Annex 5) is a book of final entry containing the details or breakdown of the balances of the controlling account appearing in the General Ledger. Posting to the subsidiary ledgers generally come from the source documents. Examples of general ledger accounts which has subsidiary ledgers are Cash-Disbursing Officer, Cash In bank – Local Currency Current Accounts, Accounts Receivable, Accounts Payable, Special Accounts in General Fund, etc. The totals of the subsidiary ledger balances shall be reconciled to their respective control account at the end of every month.”

The debits to the general ledger of cash in bank (control) should have a corresponding debits to subsidiary ledgers of the same account. The credits to the general ledger of cash in bank (control) should have the corresponding credits to the subsidiary ledgers affected of the same account.

It was observed that the entries in the subsidiary ledgers were not reconciled with the general ledger because of the absence of information as to dates and as to the reference of source documents. The reconciliation of the entries between the subsidiary ledgers and general ledgers were made only during audit. (Annex B)

With this condition, Section 10 of NGAS Volume II was violated and the balances of accounts were affected .Management Comment:Management failed to reply the Audit Observation Memorandum, which they promised during the exit conference last February 8, 2005.

Recommendation:

Require the accounting personnel to reconcile the entries in the subsidiary ledgers with the entries in the general ledgers every end of the month to ensure correctness of the balance of each account.

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Written by admin · Filed Under Bukidnon, Commission on Audit