The municipality's accounting and property records do not agree, leaving a gap of over 1.1 billion pesos. This means the town cannot confirm that the assets it claims to own truly exist or are valued correctly.

Why It Matters

Recommended Actions

• Require the IC and the GSO, in coordination with the MEO, to: (i) conduct a complete inventory of all PPE items, including land, public infrastructure assets, and buildings
• And (ii) update the PCs to include complete acquisition details and descriptions of PPE items
• (ii) institutionalize periodic reconciliation of property records and the results of physical inventory of PPE with the MAO’s PPE records
• (b) direct the MA to: (i) prepare adjusting entries to correct the accounting errors that resulted in the understatement of the CIP account and overstatement of the corresponding PPE accounts and AP account
• (ii) ensure that all infrastructure costs are initially recognized under the CIP account and transferred to PPE only upon project completion and acceptance
• (iii) strengthen coordination with the MEO to secure timely and accurate status reports, including percentage of completion and actual cost incurred as of year-end
• (c) create a Special Committee to: (i) gather all available ownership documents to facilitate titling of parcels of land purportedly owned by the Municipality and allocate the necessary budget for titling expenses
• And (ii) request appraisal services from the Bureau of Internal Revenue or accredited appraisers to determine the fair value of donated properties to facilitate recognition of their proper recognition of these in the books of accounts.

Original Audit Finding Excerpt

"due to: (a) unreconciled PPE balances between the Municipal Accounting Office (MAO) and the General Services Office (GSO) amounting to ₱1,172,258,629.88, attributable to incomplete documentation and fragmented asset custodianship"

Source Document