Inconsistent Application and Errors in Impairment Loss Policies and Estimates
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency made mistakes and applied its bad debt rules inconsistently, causing major errors in the calculated impairment allowances and financial statements.
Why It Matters
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Original Audit Finding Excerpt
"Analysis of the variance of P6.655 million out of P6.939 million between the Allowance for impairment loss per audit and per books revealed that the net difference is mainly attributed to non-recognition of Impairment loss totaling P16.982 million for outstanding account balances of NHA, NGC, and Pinatubo Project Management Office (PPMO), which have remained outstanding for over 365 days, and an overstatement of recognized impairment loss amounting to P23.637 million for dormant accounts. It was observed that the dormant accounts under NHA books were subjected to the full amount of impairment loss, rather than the 30 per cent allowance rate as specified in Note 3.3 of the Notes to FS of the Authority."