Findings No.1 COA Annual Audit Report 2004

July 28, 2008

The management did not properly monitor and enforce settlement of audit disallowances of P 1,676,517.90 as required. As a result, the city government did not recover the amount of money lost.

Section 8 of the 1993 revised Manual on Certificate of Settlement and Balances provides, among others, the responsibilities of the Chief Accountant, Bookkeeper or other authorized official performing accounting and/or bookkeeping functions of the audited agency. They are as follows:

He shall ensure that the audit charges and disallowances including their settlements are properly monitored; and

He shall also ensure that the subsidiary ledgers/records are maintained and properly updated for each official/employee determined to be liable for the amount disallowed/charged.

Verification of records showed that disallowances to barangay officials of P599,250.00 have no subsidiary ledgers. The Commission Proper affirmed the disallowances on August 20, 2002 per COA Decision No. 2002-167.

By not maintaining a subsidiary ledger of persons liable, management may encounter problems later. The identification of the persons liable may not be easily traced. On the other hand, officials and employees having disallowances of P59,975.00 were cleared from money accountability, allowing them to retire without paying the city government their obligation arising from the disallowance.

Settlements made during the year on the disallowances either thru payroll deduction or outright refund amounted to only P 711,940.00 or 29.80% out of P2,388,457.90, thus leaving a balance of P 1,676,517.90. (HYPERLINK “OroquietaCity04_Annexes.xls” \o “Annexes 1 – 4″Annex 1)

Had Management enforced settlement of the amount of audit disallowances, the city government could have available fund for its use.

The management promised however, to correct its lapses.

Recommendation

Require the City Accountant to keep and maintain updated subsidiary records of each person determined to be liable to facilitate close monitoring and collection of accounts. Advise from time to time concerned persons the status of their account balances and enforce settlement thereof. Advise also the Pre-Audit Section to process claims of persons intending to leave government service, only upon submission of unconditional clearance from money accountability otherwise, they will assume the liability.

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Written by admin · Filed Under Commission on Audit, Oroquieta