Misclassification of Property, Plant and Equipment Items
Department of Public Works and Highways · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe DPWH recorded some of its property and equipment in the wrong categories. For example, road networks were recorded as power supply systems, and buildings were recorded as road networks. This makes the accounting records inaccurate, even though the total value of assets might be correct.
Why It Matters
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Original Audit Finding Excerpt
"1.96 Analysis of the PPE accounts showed that various items were inappropriately recorded under other PPE accounts, thereby overstating the PPE account and understating the other PPE account, amounting to P645,756,024.14. This, however, does not have any effect on the Statement of Financial Position but affects the accuracy and reliability of the PPE account balances."