Erroneous Recording of Supplies and Materials as Outright Expenses
Department of Public Works and Highways · 2023
This summary was generated automatically from the source document and may contain errors. It is not an official interpretation and should not be relied upon as legal guidance. Review the original excerpt and source document to verify before citing or acting on it.
What Happened?
Category: Financial ManagementIssue: Non-compliancePurchased supplies were immediately expensed instead of being recorded as inventory, so inventory balances are too low and expenses are too high.
Why It Matters
Recommended Actions
No recommendations are available for this finding yet.
Original Audit Finding Excerpt
"Reconciliation made on the Report on Physical Count of Inventories (RPCIs) and Supplies Inventory accounts at December 31, 2023 of Isabela 1st DEO in Region II disclosed that there were on-hand supplies which were directly recorded as outright expenses instead of initially recording them through the inventory accounts and thereafter recognize as expenses upon issuance or distribution to the end users. Also, it has been the practice of Zamboanga City DEO in Region IX to recognize inventories in the books as outright expenses, whereby inventories purchased and received were immediately recorded as expenses."