Findings No.1 COA Annual Audit Report 2006

July 28, 2008

Out of the total cost of the Property, Plant and Equipment of the P447,197,901.54, the validity and accuracy of the account Property, Plant and Equipment amounting to P196,187,686.19 could not be ascertained due to the failure of the City General Services Office to complete the conduct of the physical inventory of the said account.

Verification disclosed that the Inventory Committee conducted the physical inventory of the Property, Plant and Equipment of the city. However, it was revealed that no property/accounting records were maintained by the General Services Office and Accounting Office for the previous years starting December 31, 2002 downwards costing P196,187,686.19.(Appendix A ) Only the property, plant and equipment procured for the last four years which amounted to P251,010,215.54 were inventoried.

The unavailability of the records caused the non-reconciliation of the balances between the accounting records and the records maintained by the City General Services office.

Similar observations caused the auditor’s qualified opinion in the previous year’s Annual Audit Report and since the accounting and property records were unavailable for the previous years procurement from December 31, 2002 downwards, the same observation is reiterated in this year’s report.

In effect, the condition affected the account’s presentation in the financial statements.

RECOMMENDATION:

To reduce the risk of misstatement of the Property, Plant and Equipment accounts, consider the following:

1. Require the CGSO and Accounting Office to complete the recording of the PPE on the property cards and equipment ledger cards;

2. Require the CGSO and Accounting Office to reconcile the PPE account for the procurement of the assets for the period December 31, 2002 downwards;

3. Require CGSO to submit the Report of the Physical Count of the Property, Plant and Equipment to the Office of the Auditor; and

4. Require the CGSO to submit the Inventory and Inspection Report of Unserviceable Property to the Office of the Auditor.

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Written by admin · Filed Under Commission on Audit, Valencia City