The town's inventory records were off by about ₱6.74 million. In one instance, supplies that were already used were still counted as inventory, making inventory look too high. In another instance, medicines that were still on hand were written off as an expense, making inventory look too low. This made the financial statements unreliable and violated the applicable government accounting rules.

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Original Audit Finding Excerpt

"(2) net overstatement of the Inventory account balance of ₱9,137,451.70 by ₱6,742,537.19 attributed to the overstatement of the reported year-end balance by ₱8,355,000.00 due to non-recognition of issued inventories costing the same as expense; and understatement by ₱1,612,462.81 due to recognition of drugs and medicines still on hand valued at the same amount as expense contrary to IPSAS No. 12 and Chapter 7 of the Manual on the NGAS for LGUs, Volume I."

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