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Findings No.4 COA Annual Audit Report 2004

July 26, 2008

Retention of prior years’ Accounts Payable under the General Fund P6,922,258.43, which no actual claim, administrative or judicial, has been filed and which has been outstanding for two (2) years or more has resulted in the immobilization of funds.

Section 98 of the Government Auditing Code of the Philippines (P.D. 1445) provides that unliquidated balance of accounts payable which has been outstanding for two (2) years or more and against which no actual claim, administrative or judicial, has been filed or which are not covered by perfected contracts on record may be reverted to the unappropriated surplus of the agency.

Verification of Accounts Payable disclosed that an unliquidated balance of P6,922,258.43, which has been obligated in prior years, has remained outstanding as claims against the Agency despite the doubtful validity and actual existence of these claims.

The failure of the Agency to ascertain the validity of such claims and consequently effect the proper adjustment resulted in the unnecessary retention of funds which could have been reverted to the unappropriated surplus of the Agency.

The Management has commented that the failure to revert the unliquidated balances of the prior years’ accounts payable was overlooked due to the volume of work of the Accounting Department.

We had advised the concerned agency employees to review and validate te legality and propriety of the amounts of claim against the Agency and to effect the necessary adjustment if the same are found to be without valid claimants or undocumented claims.

RECOMMENDATION:

Verify and validate the legality, existence and validity of the prior years’ outstatnding accounts payable and revert the same to the unappropriated surplus of the General Fund of the Agency if it is established that such claims are found to be undocumented and without valid claimants, pursuant to Sec. 98 of the Government Auditing Code of the Philippines (P.D. 1445).

Written by admin · Filed Under Commission on Audit, Malaybalay 

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