Significant discrepancies exist between accounting records and physical property counts due to missing reports from regional offices, unverified asset items, and misclassified property.

Why It Matters

Recommended Actions

• Management institute preventive and corrective measures over the reporting, recording and monitoring controls on PEs, to minimize, if not eliminate, the discrepancy between the AD and the concerned Office’s records by: Establishing accountability of GSD and each SO/RO/DO
• Instilling regular coordination among concerned Offices on their responsibilities
• Addressing proper classification of accounts based on the status and/or disposition of the property pursuant to provisions of applicable IPSAS
• And Performing necessary activities that will not only provide fair presentation of the PE accounts in the books but also serve the best interest/benefit for the government. Such activities include, among others, the following: For GSD/SO/ROs: Fast track the transfer of titles of PPMO’s land under the possession and control of respective LGUs, government agencies, electric cooperatives and individual beneficiaries
• And Assess the condition of PEs and identify the PEs that are no longer serviceable for immediate disposal to generate additional funds for the NHA. For AD: Account all properties that are not recorded in the books but are existing in the GSD/SO/ROs by requiring the submission of relevant documents such as Deed of Donation or Conveyance from third parties as a basis in the recording
• Reclassify to expense the remaining semi-expendable items in the GSD/SO/ROs
• Request from the end-user the documents on the transfer of accountability to others, and inquire on the reason why the missing properties are still unlocated in the GSD/SO/ROs
• And Request from SO/ROs for the supporting documents in cases of donation, awarded or sold to LGUs and beneficiaries to derecognize the property.

Original Audit Finding Excerpt

"The Property and Accounting Units shall undertake collaborative procedures to ensure that all PPEs included in the RCPPEs are duly recorded in their respective records and that the Property Cards (PCs) maintained by the Property Unit and the PPELCs maintained by the Accounting Unit are reconciled. Based on the comparison of recorded PE accounts of P508.812 million as at December 31, 2022 for Machineries and equipment, Transportation equipment, Furniture and fixtures, and Other property and equipment against the RPCPPE of P384.405 million for the same accounts as submitted by the AD, there is an unreconciled amount of P124.407 million. Details are as follows: The discrepancy of P124.407 million is attributed to the following: Non-submission of the RPCPPE of six SO/ROs Among the RPCPPEs that were submitted by the Financial Services Group (FSG), South Sector and Regions III to VII Offices did not provide their respective physical inventory reports given that they were instructed to"

Source Document