3.4. As shown in the table above, there is a significant difference of ₱8,907,556.24
between the RPT Receivable and SET Receivable account balances between the
MTO and MAO records as of December 31, 2024.
3.5. Our verification revealed that the Municipal Accountant records the RPT and SET
Receivables at the beginning of the year based on the Assessment Roll from the
Municipal Assessor because the Municipal Treasurer did not furnish the Municipal
Accountant with a duly certified list showing the names of taxpayers and the amount
due and collectible for the year which serves as the basis for recording the RPT/SET
receivable. This practice raises concerns about the accuracy and reliability of the
recorded receivables and may contribute to discrepancies in the RPT/SET receivable
account at year-end.
3.6. The Municipal Treasurer on the other hand clarified that the failure to furnish the
Municipal Accountant with the duly certified list of taxpayers, along with the
corresponding amounts due and collectible for the year, was an unintentional
oversight. He explained that this happened because he had merely followed the
procedures previously observed by the former Municipal Treasurer.
3.7. It is important to emphasize to Management that non-compliance with the guidelines
outlined in Chapter 3, Section 20 of the NGAS Manual for LGUs can significantly
affect RPT and SET collection efficiency as well as the management of delinquent
accounts. Incorrectly recording these receivables may result in an understatement of
actual revenue, impacting overall collection efficiency and causing delays in
collecting outstanding accounts, ultimately affecting the municipality’s cash flow and
budgetary planning.
3.8. Meanwhile, the Municipal Accountant confirmed that reconciliation between the
records of the Municipal Accountant’s Office (MAO) and the Municipal Treasurer’s
Office (MTO) was not conducted at the end of the year. Additionally, subsidiary
ledgers for the RPT/SEF receivable account were not maintained. She explained that
this non-compliance was an unintentional oversight caused by the overwhelming
workload during that period.
3.9. Management must understand that reconciling the Municipal Accountant and
Treasurer’s records for RPT and SET receivables is crucial for ensuring the accuracy
and integrity of financial records. When these records are not reconciled, significant
discrepancies can lead to, among other issues, financial misstatements, lack of
accountability, and even potential fraud.
3.10. In this particular case, there is a significant difference of ₱8,907,556.24 between the
MAO and MTO records as of December 31, 2024. Therefore, the RPT and SET
receivable account balances, along with their corresponding Deferred RPT and SET
Income accounts shown in the financial statements at the reporting date, are
unreliable.
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