The auditors could not verify the accuracy of the reported property and equipment values because the agency's records were incomplete or unreliable, and there was no way to confirm the amounts through other means.

Why It Matters

Recommended Actions

• Perform periodic conduct of physical count of PE and timely reconciliation between the accounting records and Reports on Physical Count of Property. Plant and Equipment / Inventory and Inspection Report of Unserviceable Properties (RPCPPE/IRUP), in accordance with the relevant COA Circular
• Collaborate with the stakeholders, such as Local Government Units (LGUs) and water districts to obtain supporting documents such as Deeds of Donation and Acceptance (ODA) or Deeds of Tumover and Acceptance (DOTA) for the proper disposition of PE assets, especially those recorded under Pinatubo Project Management Office (PPMO) and National Government Center (NGC) books that are already occupied and/or used by beneficiaries
• Reclassify PE accounts that are misclassified based on its status and/or disposition of the property in pursuant to provisions of applicable IPSAS
• Coordinate with the concerned Offices and derecognize non-existing PE items in the books of accounts in accordance with COA Circular No. 2020-006
• Reclassify the completed projects totaling P586.692 million from Construction in Progress (CIP) account to its appropriate PE and/or other asset accounts and recognize the related depreciation
• Recognize in the inventory report and financial records the assets that have been physically counted but not recorded, based on available information and documentation in accordance with COA Circular No. 2020-006
• Properly account and conduct the disposal of unserviceable PE items
• Formulate a policy in relation to impairment of PE assets to review its carrying amount and ascertain fair presentation of PE account balances in the books, in accordance with IPSAS 21: and Submut the plans on the idle 12 satellite offices. three multi-purpose centers, other structures/land improvements, and equipment located at the Balik Probinsya, Bagong Pag-asa (BP2) Depot.

Original Audit Finding Excerpt

"Further, the correctness of the reported consolidated carrying amounts of the Property and Equipment account of P3.810 billion and P3.692 billion as at December 31, 2023 and 2022, respectively, cannot be ascertained due to the noted recording, reporting, reconciliation, and monitoring deficiencies. The status of records of NHA did not permit us to apply alternative audit procedures."

Source Document