Findings No.4 COA Annual Audit Report 2006

July 25, 2008

4. Maintenance of index cards for business taxpayers were not updated and were not correctly recorded, hence accurate assessment and proper monitoring of taxpayers could not be attained.

Individual taxpayer’s records should be maintained to facilitate verification and monitoring of business permits and licenses paid by business establishments of Gingoog City.

Verification of the Business Taxpayer’s Index Card maintained by the License and Fees Division, City Treasurer’s Office revealed that these were not updated and not correctly recorded due to the following:

some of the data reflected in the index card did not tally with the payment record as seen in the computers of the tax collectors of that division;

some of the entries made in the index card reflected an official receipt number which is used by a barangay treasurer of Barangay 24-A;

some of the entries made reflected an official receipt number which was cancelled; and

some of the entries made were cancelled transactions;

Some of the individual index cards are incomplete as to name of business, the nature of business, and gross receipts during the previous year;

The individual index cards are not segregated as to active and inactive files.

Investigation conducted on the above discrepancies revealed the following:

The recording of payments of business taxes in the index cards were made either by a casual employee or a job order employee, assigned in their division. Hence, person responsible of any discrepancies found can not be readily pinpointed because some of these employees were no longer connected with the City Treasurer’s Office.

After payments on business taxes were received by the collectors, these were immediately recorded to the individual index cards of these businessmen. But no coordination was made by the collectors to said recorder on some transactions that were cancelled.

There were also payments on business taxes that were not recorded properly on the index cards of business establishments because at the time of payment said casual/job employee assigned to record were absent or were not at the office.

In the process of our investigation, our recommendation was implemented that a permanent employee should be assigned to record the business taxes transactions in the individual index cards of business establishments and this should be duly signed by her to assume responsibilities.

But the updating and the incorrect recording of the individual index cards of business establishments remained uncorrected; as a result, accurate assessment and proper monitoring of taxpayers could not be attained.

The City Treasurer, during the exit conference, promised to instruct the Chief of the License and Fees Division to keep tract of the recording of payments of business taxes in the individual index cards of business establishments and update said card for proper monitoring of taxpayers as recommended. He also instructed that index card of individual taxpayer will be safeguarded and must be locked every after business hours.

Recommendations:

Instruct the Chief of the Business and License Division of the City Treasurer’s Office to update and correct the recording of business taxes paid in the individual index cards of business establishments so that verification and monitoring of business permits and licenses can readily be undertaken accurately.

Instruct the permanent employee assigned in recording payments of business taxes in the individual index cards to record only those payments once these are duly remitted/received by the liquidating officer of the Cash Division. Likewise, record properly the actual official receipts issued for the business taxes payment in the individual index cards of business establishments. All of the information of payments recorded in the index cards should be duly signed by her, to easily pinpoint responsibility in case of misposting and/or manipulation of records.

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