Errors and omissions in recording of Advances to Contractors
Department of Public Works and Highways · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency made mistakes in tracking money advanced to contractors. It did not record repayments of advances and used the wrong accounts for some transactions, causing the balance of advances to contractors and related accounts to be wrong on the financial statements.
Why It Matters
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Original Audit Finding Excerpt
"1.119 The reported balance of the Other Assets accounts is net overstated by P341,065.59 due to: (a) errors and omissions in the recording of Advances to Contractors due to non-recording of recouped/recovered advances amounting P32,696.77 and erroneous accounts used in recording recoupm ent and progress billings totaling P1,284,627.88; and (b) erroneous recording of Prepaid Insurance due to non -adjustment of the unexpired portion of prepayments initially recorded as an expense totaling P1,157,403.06 and misclassifications of insurance prepayments amounting to P181,144.00 . These are not in accordance with Section 2 of Chapter 2 and Section 53 of Chapter 19, Volume I of the GAM for NGAs and Revised Chart of Accounts (RCA) 2019."