Erroneous Recording of Recoupment of Advances to Contractors
Department of Public Works and Highways · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceWhen the government takes back advance payments from contractors through their progress billings, this was not recorded correctly in three district offices. Some were not recorded at all, and some were recorded as a different type of liability, making the financial statements incorrect.
Why It Matters
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Original Audit Finding Excerpt
"1.101 Verification and examination of the year -end balance of the Advances to Contractors account revealed that recoupment of advances to contractors from their progress billings was either unrecorded or erroneously credited to Guaranty/Security Deposits Payable in the books of accounts of three DEOs resulting in the overstatement of the account by P3,651,692.85, summarized as follows:"