Improper Charging of Prepayments Directly to Outright Expenses
Department of Public Works and Highways · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe DPWH treated some advance payments, like vehicle registration and insurance premiums, as immediate expenses instead of spreading them over the period they cover. This means the financial statements show higher expenses and lower assets than they should.
Why It Matters
Recommended Actions
No recommendations are available for this finding yet.
Original Audit Finding Excerpt
"1.106 Verification of the General Ledger (GL) of Taxes, Premiums and Other Fees accounts and the related JEVs of Mt. Province 1 st DEO under DPWH CAR disclosed that payments for registration of service vehicles and fidelity bond premiums of accountable officers made in 2023 were fully recognized as an outright expense. This should have been recognized as prepayments while the expired portion thereof should have been adjusted by crediting/deducting the prepayments. As such, the amount corresponding to the unexpire d portion at the end of the accounting period of P478,345.06 was not properly recognized as prepayments."