City gov't fails to account some P1B PPE
The Treñas administration has yet to account some P1,079,514,843.66 of the total P1,134,165,139.07 Property Plant and Equipment (PPE) of the city government as reflected in the 2005 audit report of the Commission on Audit (COA).
The result of the 2005 audit report showed that of the city's total PPE of P1,134,165,139.07, the commission was only able to validate the amount of P54,650,295.41 or 4.82 percent using ocular inspection and verification of records.
The P1,079,514,843.66 unaccounted government properties constitute 95.18 percent of the total PPE. The report covers the city's balance sheet as of December 31, 2005.
The COA audit report for the calendar year 2005 which reflected the city's unaccounted properties was signed by Ms. Arlene Togonon, State Auditor V, Regional Cluster Director of the Commission on Audit. The same audit report was furnished to the Sangguniang Panlungsod for their comments and observations.
"The inadequacy of the property records maintained by the GSO and Accounting Office did not permit the COA to use alternative audit procedures on some of the PPE items, thus 95.18 is still considered inaccurate and unreliable."
In the same audit report, the commission attributed the inaccuracy and unreliability of the of the total PPE in the absence of supporting documents and related property records maintained in the General Service Office (GSO).
The commission lamented that since 1992, no physical count of the city's PPE has been conducted to ascertain the actual existence of the PPE neither is there a system or activity at present to ensure reconciliation of the PPE by the GSO and the Accounting Office on a monthly/periodic basis.
"This was already the case when the records were turned over to the GSO from the City Treasurer's Office way back in 1992. According to the GSO, the process of straightening and updating the inventory report is almost impossible due to lack of old records to support the PPE accounts."
The Accounting Office neither maintains property plant and equipment ledger cards for each item of PPE as required under Section 114 of the Manual on New Government Accounting System (NGAS) for local government units, Vol. 1 due to lack of manpower. PPE acquired prior to conversion to the NGAS could no longer be identified. It cannot be re-classified to their proper accounts due to lack of subsidiary records previously maintained.
The commission also lamented that similar observations caused the auditor's qualified opinion in the previous year's Annual Audit Report. "Since no substantial action has been taken to correct the deficiencies, the same observation is reiterated in this year's report."
The audit report also viewed that the non-booking of donated assets under PPE contributed to misstatement of the PPE accounts and has exposed donated properties "to possible loss." The situation may also discourage future donations.
"Our review and evaluation of the process disclosed that properties/assets acquired by the City of Iloilo through contributions from the private sector and non-government organizations or other government agencies both local and foreign were not taken up in the books."
According to the audit report, the accounting office had no basis in recording the properties due to lack of supporting documents. They were not furnished of the donation papers or of the list of donated assets and their appraised values.
The same COA report stated that accordingly the GSO only included in their inventory report or list of properties that passed their office and has issued corresponding Acknowledgment Receipts of Equipment (ARE) if passed to the end user. Similarly, the Accounting Office does not have copies of donation papers and even those with AREs issued by the GSO. Thus, the same were not recorded in the PPE accounts of the city.