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Findings No.4 COA Annual Audit Report 2006

July 26, 2008

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

Section 174 of Government Accounting and Auditing Manual (GAAM), Volume I provides that:

“The Accountable Officer (AO) shall reconcile the cashbook balance with the cash on hand daily. The Accountable Officer and the Accountant shall reconcile their records (the cashbook and the subsidiary/general ledger) at least at the end of each quarter.

Furthermore, 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. Below is the comparative figure between the cash book and the ledger records:

EMBED Excel.Sheet.8

An interview with the incumbent OIC-Provincial Accountant disclosed that Cash Disbursing Officer composed of unliquidated cash advances by disbursing officers.

Verification of Cash in Bank and Cash Disbursing Officer balances as of December 31, 2006 disclosed total discrepancies of P62,918,894.89 (Annex B and C) between accounting records and cashbook balances analyzed as follows:

Per Ledger/Accounting Records - P 300,467,567.93

Per Treasurer’s Cashbooks - 237,548,673.04

Difference - P 62,918,894.89

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Compared to last year’s discrepancy of P123,917,656.49 it has decreased by P60,998,761.60 or 49%, presented as follows:

This is a prior year audit finding but is hereby reiterated due to the materiality of the amount.

Further verification disclosed that the discrepancies for the non-reconciliation of the records are as follows:

- Some checks issued by the Provincial Treasurer within the month but not yet received by the claimant were not recorded in the journal of checks issued; thus Monthly Reports of Checks Issued is overstated against the Journal of Checks Issued

Preparation and submission of the monthly Bank Reconciliation Statement is not updated

Some dormant and doubtful accounts were not corrected/adjusted.

The accounting and treasury personnel failed to reconcile their balances at least every quarter.

Had there been proper coordination between the Accounting Division and Treasury Division, any discrepancy noted could be immediately adjusted 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 the year end.

The Provincial Treasurer and OIC-Provincial Accountant assure as to give priority attention to the matter to reflect the correct amount it its books of accounts.

RECOMMENDATION

Require the Provincial Treasurer to record all checks issued during the month in the Monthly Reports of checks Issued for the accounting personnel to record in the Journal of Checks Issued.

Instruct the Provincial Treasurer and OIC-Provincial Accountant to reconcile the balances between the cashbooks and ledgers monthly.

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

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