The government's housing project inventory account is not accurate. Over half of the recorded amount (57.67%) is either unverified or includes projects that are already finished or cancelled, which should not be listed as ongoing work. This makes the financial statements misleading.

Why It Matters

Recommended Actions

• Review the WIP Inventory account and the RPPPA to ensure that only active and ongoing housing projects are reflected in both records, and prepare the necessary adjusting journal entries to reclassify the completed projects to the appropriate account

Original Audit Finding Excerpt

"Furthermore, housing projects valued at P1.682 billion have been reclassified from PE to PE for Distribution, and a further review and reclassification of other misclassified assets are underway. Regarding the derecognition of non-existing PE, validation efforts are in progress, with some regions having already submitted status reports to support the necessary adjustments. In terms of completed projects recorded under CIP, out of the total P123.851 million, P85.875 million has been reclassified, while the remaining projects are pending due to outstanding billing and completion thresholds. Additionally, P43.104 million worth of physically counted but previously unrecorded PE have now been recognized. The development of a formal policy on impairment is targeted for completion in CY 2026, pending further study and analysis. Meanwhile, coordination is ongoing to include PE reconciliation as a KPI, which is already reflected in the Individual Performance Commitment and Review (IPC"

Source Document