Findings No.2 COA Annual Audit Report 2006

July 28, 2008

2. Land and Office Building amounting to P2,527,610.74 and P4,488,485.14, respectively, charged against the Trust Fund accounts were not transferred to the General Fund books after the completion of the projects contrary to the provisions of Sec. 97 AND 104, Volume I of the New Government Accounting Manual, as amended providing pro-forma accounting entries of the transactions.

Sections 97 and 104, Volume I of the New Government Accounting System Manual provide that:

“Sec. 97. Project Expenditures – The construction period theory shall apply for expenditures on infrastructure projects of the Trust Fund. For other projects, expenditures shall be debited to the appropriate expenditure account. Expenditures shall be close to Project Equity account at year-end or upon completion, whichever comes first.

The Project Equity account was later converted to Government Equity account pursuant to COA Circular No. 2004-008 dated September 20, 2004 providing for the Revised Chart of Accounts.

Sec. 104, Volume I of the New Government Accounting System Manual provides guidelines for the pro-forma accounting entries for Trust Fund, particularly par. v thereof that upon completion of the project, the accounts shall be transferred to the General Fund Books.”

Verification disclosed that Land valued at P2,527,610.74 and Office Building valued at P4,488,485.14 were still reflected in the Trust Fund books despite the completion of the project.

We referred the situation to the City Accountant and he explained that he overlooked compliance of the said regulations during the year end and willing to observe compliance this ensuing year.

The above condition is violative of the provisions of Sec. 97,Volume I of the New Government Accounting System Manual, as amended, and Sec. 104 of the same manual.

RECOMMENDATION:

Advise the City Accountant to effect the transfer of the completed projects funded out the trust fund accounts to the general fund books in conformity to the provisions of Sec. 97, Volume I of NGAS, as amended and Sec. 104 of the same manual.

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