The municipality could not prove that the fixed assets it reported actually exist or are worth the stated amount because many items could not be located and records did not match.

Why It Matters

Recommended Actions

• Authorize the PMT to be temporarily relieved of all their regular duties to devote full time in the conduct of the physical inventory taking until the same is completed
• And (b) require the PMT to (i) prepare a Physical Inventory Plan (PIP) containing, at the least, the specific assignment/duties of the members, cut-off date and a schedule specifying the dates and locations of the inventory taking activities from start up to the target completion date of the physical inventory
• (ii) exhaust all diligent efforts to establish the non-existing/missing PPE
• (iii) conduct an investigation to determine the last known location/office where the missing PPE were issued/installed, person accountable, circumstances of the loss, and the persons responsible for the loss, among others
• And (iv) refer to COA Circular No. 2020-006 dated January 31, 2020 and take immediate steps in accounting and derecognition of non-existing/missing PPE to address the issue on the fairness of presentation of the financial position of the Municipality.

Original Audit Finding Excerpt

"The existence, completeness, and valuation of the PPE items with carrying value of ₱334,029,923.93 as of December 31, 2021 could not be ascertained due to unlocated properties and unreconciled records of the MAO vis-à-vis the Property Management Team’s (PMT) physical inventory amounting to ₱103,526,852.37 contrary to Section 6.3 of COA Circular No. 2020-006 dated January 31, 2020."

Source Document