Instead of recording inventory purchases as assets and then expensing them when used, some offices immediately charged them as expenses, making expenses too high and inventory too low.

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Original Audit Finding Excerpt

"162 c) Property and Supply Sections to immediately furnish copies of delivery and acceptance documents to the respective Accounting Division/Section as basis for timely recognition in the books. b: Unrecorded issuances of inventories - P24,596,961.04 1.47 Pertinent provisions under Chapter 8, Volume I of the GAM for NGAs are as follows: • Section 7. Recognition as Expense. When inventories are sold, exchanged, or distributed, the carrying amount of those inventories shall be recognized as an expense in the period to which the related revenue is recognized. If there is no related revenue, the expense is recognized when the goods are distributed or the related service is rendered. • Section 10(b). Semi -Expendable Property. These tangible items shall be recognized as expenses upon issue to the end-user. • Section 17(g). Records, Forms and Reports to be prepared and/or maintained. Report of Supplies and Materials Issued ( RSMI) (Appendix 64) – shall be prepared by"

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