Findings No.1 COA Annual Audit Report 2004

July 26, 2008

1. Non-reconciliation between accounting records and the treasurer’s cashbook on Cash Accounts casts doubts on the validity and existence of the declared balances.

Chapter l of the Cash Examination Manual (4) requires the Accountable Officer to reconcile her/his cashbook entries with the accounting records at least quarterly.

Verification of records disclosed that the accounting records do not reconcile with the cashbook balances, to wit:

AccountingTreasuryDiscrepancyCash in Vault 220,776.83(1.05)220,775.78Cash in Bank 434,912,431.22303,886,766.45131,025,664.77TOTAL 435,133,208.05303,886,767.50131,246,440.55

An interview with the incumbent Provincial Accountant disclosed that the cash in vault existed prior to her assumption in the office. The balance of cash pertains to the retired Provincial Treasurer and is carried in the books of accounts by her predecessor.

When the incumbent Provincial Treasurer was interviewed, she reasoned that she had not received any amount of cash from her predecessor during the turn-over.

Verification of Cash in Bank balances as of December 31, 2004 disclosed total discrepancies of P131,025,664.77 between accounting records and cashbook balances analyzed as follows:

Per Ledger/Accounting Records - P 434,912,431.22

Per Treasurer’s Cashbooks - 303,886,766.45

Difference - P131,025,664.77 Annex A

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Further verification showed that there was no reconciliation made by the Accounting and the Treasury Division, thus any discrepancy of accounts could not be immediately known and corrected.

In effect, the cash accounts carried in the books are unreliable and doubtful as these do not reflect the actual cash position of the agency as of year end.

The Provincial Administrator and the Accountant alleged that due to lack of personnel and non-availability of supporting documents, this problem was not attended to. However, the management alleged that a committee is created who will focus on the matter.

Recommendation

Require the retired Provincial Treasurer to turn over the undeposited balance of P220,776.83 which remain in her possession despite of her separation from the government service. Otherwise, file appropriate charges against her.

Require the Provincial Accountant/Provincial Treasurer to reconcile and update their books and/or accounts balances.

Further, instruct the Provincial Accountant to reflect only the actual cash in bank accounts and to present the true and correct cash position of the Provincial Government.

Written by admin · Filed Under Commission on Audit, Lanao del Norte