The municipality recorded food packs and rice as still in inventory at year-end even though they had already been given away, making inventory look higher than it actually was.

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Original Audit Finding Excerpt

"Among the recorded inventories were the food packs (Welfare Goods for Distribution account) and rice (Agricultural Produce for Distribution account) costing ₱7,500,000.00 and ₱855,000.00, respectively. However, during the audit and exit audit conference, Management said that these inventories were already distributed to end-users as at year-end. Thus, this overstated the noted inventory accounts in the amount of ₱8,355,000.00."

Source Document