Findings No.2 COA Annual Audit Report 2004

July 28, 2008

The practice of management to charge to Other Maintenance and Operating Expenses (MOOE) for disbursements with no more appropriation resulted in the overstatement of the MOOE account by P 1,837,473.74.

COA Circular No. 2002-003 dated June 20, 2002 as updated under COA Circular Nos. 2003-001 and 2004-002 dated June 23, 2003 and September 4, 2004, respectively, prescribing the New Government Accounting System (NGAS), provides for the specific accounts for particular government transactions. Account 969 was provided to be used for expenses not otherwise classified under the specific maintenance and other operating expenses accounts.

Verification of various transactions disclosed that expenses with specific accounts in the amount of P 1,837,473.74 were charged to Other Maintenance and Operating Expenses (969) account. Most of the transactions which involved different offices of the local government were; payments of vehicle insurance premiums, gasoline/diesoline, rental, traveling expenses, telephone bills and procurement of office supplies and spare parts. (Annex 1)

Initial inquiry revealed that most of the transactions with erroneous charges were those with appropriations already exhausted during the year. Subsequent claims were charged to Other Maintenance and Operating Expenses account instead of requesting first for realignment of the funds from account 969 to the particular specific accounts.

The deficiency resulted to the overstatement of Other Maintenance and Operating Expense account in the amount of P 1,837,473.74 with the corresponding understatement by same amount of expenses in other appropriate accounts.

The City Accountant justified that their office received late the copy of Chart of Accounts on the updated NGAS hence, the expenditure accounts did not jibe with the new updated Chart of Accounts. She further explained that due to time element involved in the passage of resolutions for realignment, accounts with exhausted appropriations were readily charged to Account 969. However, she was amenable to the cited deficiency and she had brought the matter to the various department heads and recommended for the early request for realignment of balances to appropriate accounts to avoid occurrence of said deficiency in subsequent transactions.

Seminars on NGAS were conducted on the second semester of 2002 and agency personnel especially from the City Accountant’s Office had attended said seminars and were provided with the Manual on NGAS for LGUs which contained the Updated Chart of Accounts. Hence, the City Accountant should not use for the late receipt of Chart of Accounts as the reason. Moreover, it is the responsibility of the City Accountant’s Office to require the offices concerned to request for realignment of their budget.

Recommendation:

Advise all the department heads concerned to limit expenditure within the budget ceiling. In case realignment of expenses is necessary, require them to do it before the need arises in order not to hamper operations and not violate laws, rules and regulations. To enforce proper implementation, the City Accountant shall not approve the Obligation Slip if there are no more appropriations for the transaction.

Remittance of daily collections in the amount of P 221,959.59 was delayed from three to sixty five days due to laxity in enforcing Section 29 of the New Government Accounting System

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