Findings No.5 COA Annual Audit Report 2006
July 25, 2008
5. Individual debtors of loans funded from PNPL Loan repayments totaling P2,063,971.95 and PNPL-SAIL II/SPDA of P9,110.48 have remained unidentified as of year-end caused by the failure of the Accounting Office to create subsidiary ledger of loan recipients coupled with the absence of initiative of both the Provincial Accounting and Agriculture Offices to dig up previous disbursement voucher consequently its collection could not be effected.
Section 04.e of the National Government Accounting System (NGAS) Volume I requires the accounting unit to maintain the books of original and final entries which include maintenance of subsidiary ledgers.
In the prior years audit recommendation, the Accounting Office had been required to reconcile the General Ledger and Subsidiary ledger balances with the record of the Provincial Agriculture Office since they don’t have the individual names of borrowers. While, the Provincial Agriculture Office has index cards of borrowers, their total receivables did not jibe with the total record of the Accounting Office.
Before the actual adoption of the computerized accounting system of the Province, the Accounting Office was instructed by this Office to update all their records including the subsidiary ledgers (SL).
Finally, the Province adopted the computerized accounting system in October, 2006. However, the total of Loans Receivable with individual borrowers still did not jibe with the General Ledger (GL) total. So, they just encoded the reconciling amount in lump sum. Though such procedure was initially allowed for the sake of having the same totals for the SL and GL, the Office should not continue to report the same.
On August 28, 2006, an advisory letter was sent to the Local Chief Executive requesting for the formulation of a duly approved Operational Scheme for the Plant Now Pay Later Program. At year end, the Provincial Agriculture Office submitted the required operational manual. However, Office responsible for the collection and records keeping was still not clearly provided. In its absence, smooth flow of its operation would not be likely attained.
Although, PNPL operations manual did not clearly state the office responsible for its record keeping, the work is clearly the major function of the accounting unit. The Office is tasked to provide reliable financial information to end-users.
Such condition continue to exist because the Accounting Office failed to create subsidiary records of loan recipients coupled with the absence of initiative of both the Provincial Accounting and Agriculture Offices to dig up the previous vouchers/records for the purpose of identifying loan recipients.
Consequently, collection of the total loans receivable of P2,073,082.43 could not be effected.
The Provincial Accountant replied the reconciliation is on-going and they have formulated a flowchart for the smooth flow of the operations which will be presented for confirmation by offices concerned and approval of the Provincial Governor.
Require the Provincial Accounting Office to dig up previous records/ vouchers starting from the ledger to the journals and vouchers to identify the loan recipients. Further, Provincial Accounting Office is required to adhere with the provisions of Section 04.e of the National Government Accounting System (NGAS) Volume I.
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