Failure to Reclassify Completed Projects from Construction in Progress
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency has finished building projects worth millions but still lists them as 'under construction' or records them incorrectly, which hides depreciation and misstates asset values.
Why It Matters
Recommended Actions
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Original Audit Finding Excerpt
"Completed and operational projects from the Construction in progress (CIP) account totaling P586.692 million were not reclassified to its appropriate PE accounts, resulting in the overstatement of Accumulated surplus account by 12.222 million and understatement of both the Depreciation expense and Accumulated depreciation accounts by P12.307 million and P24.529 million, respectively, due to the non-recognition of corresponding depreciation."