Findings No.3 COA Annual Audit Report 2005

July 25, 2008

6. In addition, please include in the determination of the reasonableness of the repayment scheme and submission of the required Approved Detailed Engineering Design and Plans of the City Slaughterhouse BOT Project.

Real Property Tax/Special Education Tax Receivable beginning balance for Calendar year 2005 was overstated by P81,079,446.44 due to non-compliance of Section 20 of the New Government Accounting Manual, Volume I.

Real Property Tax Receivable, and Special Education Tax Receivable for Calendar Year 2005 was set up based on estimates made by the Accounting Department instead of the Certified List of Taxpayers prepared by the City Treasurer as provided under Section 20, Chapter 3, Volume1 of NGAS.

Internal Control System Evaluation Questionnaire floated on August 9, 2005 disclosed that the City Accountant negatively replied on the question, Does the Treasurer furnish the Chief Accountant a duly certified list showing the name of taxpayers and the amount due and collectible during the year? Further she made a remark that a Statement of Total RPT receivable be furnished to the City Accounting,

In view of the noted information, verification was conducted thereon and disclosed that the City Treasurer’s Office has issued a certification relative thereto which was allegedly furnished to the City Accountant because the list of taxpayers as required by the regulation could not be immediately reproduced because the RPT data were stored in the computer server that connects the Assessor and Treasury Offices databank on Real Property Tax System (RPTS) but when subject certification was traced at the City Finance Record Section, the record in charged cannot produce a copy thereof.

Verification of Accounting records relative to the Journal Entry Voucher prepared for the setting up of receivable on Real Property Tax Receivable in the General Fund, disclosed a difference of P19,517,184.27 as shown below:

JEV # 101-05-01-451-11 - P 208,833,016.17

General Journal/General Ledger Entry - 228,350,200.44

Difference - 19,517,184.27

Moreover, further verification of reports of the City Assessors Office disclosed that as of December 31, 2004, the total Real Property Assessment Value for Taxable properties in the city was P9,031,568,810.00, with an equivalent Basic Tax Collectibles of P156,772,980.00 accruing to the General Fund, a half thereof will accrue to the Special Education Fund amounting to P78,386,490.00 as Section 235 of Chapter 5 of RA 7160 provides that an additiona1% on the assessed value of real property accrue to SEF.

Comparative analysis between the Assessors and Accounting records disclosed that the RPT and SET Receivables set up by the Accounting Office were bloated by P71,577,420.44 and P9,502,026.00, respectively, as shown below:

Basic Tax Collectible on Real Property Assessment

as of December 31, 2004Accounting Records based on prepared JEVAssessors Record based on Quarterly Report on Real Property AssessmentsDifferenceGeneral FundP228,350,200.44P156,772,980.00P71,577420.44SEF87,888,516.0078,386,490.009,502,026.00

The management agreed and accepted the aforementioned observation and agreed to correct the noted deficiency.

Recommendation

Prepare an adjusting entry to correct the noted deficiencies and make sure that succeeding setting up of Real Property/SE Tax Receivable Account should be in accordance with Section 20 of New Government Accounting System, Volume 1.

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