Failure to Reclassify Completed Projects from Construction in Progress
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceProjects that were already finished were left sitting in the construction account instead of being moved to regular property accounts, which distorted financial figures and depreciation expenses.
Why It Matters
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Original Audit Finding Excerpt
"b. 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, r espectively, due to the nonrecognition of corresponding depreciation."