2.7. We also recommended and the Municipal Accountant agreed, to henceforth
accrue and record the SET exclusively in the books of the SEF, in accordance
with Section 235 of RA No. 7160 and Section 88 of the NGAS Manual for
LGUs, Volume I.
Long Outstanding Accounts Payable
3. The Accounts Payable balance of ₱14,059,061.35 was not fairly presented due to the
inclusion of unpaid obligations amounting to ₱2,465,908.11, of which ₱2,232,423.11
remained outstanding for more than two years and were neither reverted to the
unappropriated surplus, contrary to Section 98 of Presidential Decree No. 1445 and
Section 9, Volume I, of the New Government Accounting System (NGAS) Manual,
thus, may no longer represent valid claims.
3.1 COA Circular No. 2015-009 dated December 1, 2015, defines Accounts Payable as
an account used to record the receipt of goods or services on account in the normal
course of trade and business operations. Accordingly, Accounts Payable are
considered current liabilities, as they meet the criteria set forth under paragraph 83 of
the International Public Sector Accounting Standard (IPSAS) 1, which states that a
liability should be classified as current when it is expected to be settled in the normal
course of the entity’s operating cycle or is due to be settled months after the reporting
date.
3.2 Relative thereto, Section 98 of the P.D. No. 1445 provides that any unliquidated
balance of accounts payable in the books may be reverted to the unappropriated
surplus of the general fund, provided that these have been outstanding for two years
or more and against which no actual claims, administrative or judicial, have been
filed or which are not covered by perfected contracts on record.
3.3 While we are aware that the above provisions pertain specifically to the unliquidated
balances of accounts payable in the books of the national government, Honorable
Celso D. Gangan, former Chairman of the Commission on Audit, as stated in his 5th
Indorsement dated September 2, 1998, reads in part:
“ Every statute be construed in connection with those already
existing in relation to the same subject matter and should be
made to harmonize and stand tighter if they can be done by fair
and reasonable interpretation. (City of Naga vs Agna SCRA 176)
x x x.”
34
