AUDIT OBSERVATIONS AND RECOMMENDATIONS
A. FINANCIAL AND COMPLIANCE AUDIT
One-Time Cleansing of Property, Plant, and Equipment
1. The Inventory Committee was not able to conduct a complete physical inventory
count for the one-time cleansing of the Property, Plant, and Equipment (PPE)
accounts mandated under COA Circular No. 2020-006 thereby raising concerns
about the existence and fairness of the presentation of the PPE balances of
₱377,956,496.66 in the financial statements, including movable properties totaling
₱82,252,926.83 as of December 31, 2024.
1.1. COA Circular No. 2020-006, dated January 31, 2020, was issued to prescribe
guidelines and procedures for inventory-taking, recognizing items found at the
station, and disposing of nonexistent or missing PPE items. This aims to facilitate a
one-time cleansing of PPE accounts of government agencies to establish verifiable
balances regarding existence, condition, and accountability.
1.2. Section 5.1 of the circular states that “Each government agency shall conduct a
physical count of all its PPE, whether acquired through purchase or donation,
including those constructed by administration and found at station.”
1.3. Our verification of the Municipality’s year-end financial statements showed that, as
of December 31, 2024, PPE had a total balance of ₱377,956,496.66, which represents
50% of its total assets amounting to ₱754,806,041.25, detailed as follows (see
Appendix 1 for details):
Account Net Book Value
Immovable Properties
Land ₱ 2,965,303.54
Land Improvements 1,476,125.82
Infrastructure Assets 215,058,420.65
Buildings and Other Structures 76,203,719.82
Sub-total – Immovable Properties ₱ 295,703,569.83
Movable Properties
Machinery and Equipment ₱ 54,902,231.10
Transportation Equipment 22,239,039.66
Furniture, Fixtures, and Books 2,759,872.21
Other Property, Plant, and Equipment 2,351,783.86
Sub-total – Movable Properties ₱ 82,252,926.83
Total PPE ₱ 377,956,496.66
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