Misclassification of semi-expendable property as PPE
Department of Public Works and Highways · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceItems bought for less than P50,000 each were recorded as expensive fixed assets instead of being treated as minor or semi-expendable property, inflating the value of the agency's property and equipment.
Why It Matters
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Original Audit Finding Excerpt
"Various tangible items with costs falling below the capitalization threshold of P50,000.00 were carried in the books of accounts as PPE, instead of recognizing or reclassifying these items as Semi-expendable properties or charged to Accumulated Surplus/(Deficit) accounts."