The municipality's property and equipment records did not match between departments, and construction-in-progress and property accounts were incorrectly recorded, making the asset values inaccurate.

Why It Matters

Recommended Actions

• Require the Inventory Committee (IC) and the GSO, in coordination with the Municipal Accounting Office (MAO), to: (a) conduct a complete physical inventory of PPE and public infrastructure assets, and reconcile the results with the MAO's PPE records to ensure accuracy, valuation, existence, and completeness of the reported carrying value of the Municipality's PPE, including buildings
• And (ii) update the PCs to include complete acquisition details and descriptions of PPE
• (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 (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, from the Bureau of Internal Revenue or independent appraisers, to determine the fair value of donated properties to facilitate their proper recognition in the books of accounts.

Original Audit Finding Excerpt

"Annex B ACTION PLAN MONITORING TOOL Sector: Local Government Sector Prepared by: Rachel Mary Angela C. Murillon Date: Team: R3-11 Approved by: Elsa SB. Puno Date: Agency Audited: Municipality of Pulilan, Bulacan Audit Period: For the period ended December 31, 2024 AAR Date: June 24, 2025 AGENCY ACTION PLAND and STATUS OF IMPLEMENTATION RESULTS OF COA VALIDATION Audit Observations Audit Recommendations Status of Reason for Action Taken / Status of Actual Remarks Action Plan Target Implementation | Partial/ Delay/ Action To be | Follow | Implementation | Implementation Implementation Non- Taken Date Implementation, i applicable MAO is Jun-25 | Dec-25 |For further continuously reconciling records with the GSO;| Already — identified| fully depreciated assets for] verification of GSO) as to the existence; Oct-25 |(a) Implemented. Not Applicable (N/A). To exert| continuous — effort GSO in the| MEO reconciliation of Ic (PPE records] between the MAO) AAR CY2024 Implemented. Obser"

Source Document