Findings No.4 COA Annual Audit Report 2005

July 25, 2008

4. Collections ranging from P109,405.27 to P760,577.78 were not deposited intact on a daily basis or not later than the next banking day, in violation of Section 32 of the Manual on the New Government Accounting System (NGAS) for Local Government Units, Volume 1.

Section 32 of the Manual on the New Government Accounting System (NGAS) for Local Government Units, Volume I, states that the Treasurer/Cashier shall deposit intact all his collections as well as all collections turned over to him by the collectors/tellers with the authorized depository bank daily or not later than the next banking day. He shall record all deposits made in the cashbook and prepare the Report of Collections and Deposit (RCD).

Records disclosed that collections turned over by the collectors/tellers, particularly at the end of every quarter for Calendar Year 2005, were not deposited intact on a daily basis or not later than the next banking day with the authorized depository bank. Summary of the collections and deposits is as follows:

Date of Collection

AmountDepositedDate of DepositMarch 31, 2005 P973,184.75 P 571,578.95

401,605.80 April 1, 2005

April 4, 2005June 30, 2005 P109,405.27 P 104,969.62

4,435.65 July 1, 2005

July 4, 2005September 30, 2005 P292,159.70 P 250,723.62

41,436.08 October 3, 2005

October 4, 2005December 29, 2005 P760,577.78 P 396,448.42

364,129.36 January 2, 2006

January 4, 2006

Interview conducted with Ms. Isidra A. Abogatal, LRCO-II, Liquidating Officer designate, of the City Treasurer’s Office, revealed that the delay in the deposit is caused by the delay in the turn over of cash collections by some of the collectors, particularly at the Land Tax Division. Verification disclosed that the collectors were not preparing their Report of Collections and Deposits (RCD) at the close of each business day. Instead, the RCDs were prepared one to two days delayed, more particularly at the end of each quarter, where cash collection is huge and a number of taxpayers are paying their tax dues. According to Ms. Abogatal, RCDs of the collectors (particularly Land Tax collectors) during end of a particular quarter were submitted to her one to two days after the cut-off period.

Interview with Ms. Erma Valdevilla, Records Officer I, currently the Systems Administrator of the Real Property Tax System (RPTS) of the City Treasurer’s Office, revealed that the collectors are preparing their RCDs not at the close of every business day but on the first hour of the following day. According to her, there are periods, specially at the end of every quarter, where the collectors, upon the approval of their head, requested accommodation of payments of some taxpayers, even after the cut-off period or deadline of payments, by adjusting the system date of the computer retroactively so as not to reflect the tax penalties in the tax billing of a particular taxpayer in the RPTS. These in turn delays the preparation and accomplishment of the collector’s individual RCD, and eventually delays the turnover of collections to the designated liquidating officer at the Cashier’s Office.

As a result, collections were not deposited intact on a daily basis or on the next banking day at the authorized depository bank.

During the exit conference, the Asst. Treasurer proposed a cut-off scheme so that all collections/payments shall be deposited intact on a daily basis as required. She committed to implement our recommendations.

Recommendations:

Stop the practice of accommodating the payments of the taxpayers and adjusting the system date of the computer after the cut-off date just to avoid penalties.

Instruct all collectors to prepare their individual Report of Collections and Deposits at the close of each business day in accordance with Section 29 of the Manual on the New Government Accounting System (NGAS), Volume I, and turnover the collections to the Liquidating Officer.

Instruct the Cashier to deposit the cash collections intact with the authorized depository bank daily or on the next banking day.

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