Erroneous Recording of RPT Penalties
6. Inconsistent with COA Circular No. 2015-009, penalties from Real Property Tax
(RPT) and Special Education Tax (SET) collections totaling ₱1,934,234.14 in CY
2024 were erroneously recorded in the books of accounts as Real Property Tax -
Basic (4-01-02-040) instead of Tax Revenue - Fines and Penalties - Property Taxes
(4-01-05-020), hence, both income accounts were overstated and understated,
respectively, as of December 31, 2024.
6.1. COA Circular No. 2015-009 dated December 1, 2015, prescribes the Revised Chart
of Accounts for Local Government Units to record and report the financial
transactions of LGUs. Annex B thereof contains the description of accounts and the
instructions, which partly provides:
Account Title Real Property Tax- Basic
Account Number 4-01-02-040
Normal Balance Credit
Description This account is used to record the basic tax imposed on real
property such as land, buildings, machinery and improvements
affixed or attached to the real property.
Subsidiary ledger:
Subsidiary:
01 - Real Property Tax Land
02 - Real Property Tax Building
03 - Real Property Tax Machinery
Account Title Tax Revenue - Fines and Penalties - Property Taxes
Account Number 4-01-05-020
Normal Balance Credit
Description This account is used to record all fines and penalties charged in
relation to the collection of property taxes.
01 - Real Property Tax Basic Land – Penalty
02 - Real Property Tax Basic Building – Penalty
03 - Real Property Tax Basic Machinery – Penalty
04 - Special Education Tax – Penalty
6.2. In CY 2024, the Municipality collected penalties from the Property Tax (RPT)
Receivable and Special Education Tax (SET). As of December 31, 2024, the
penalties collected amounted to ₱967,117.07 each, totaling ₱1,934,234.14, broken
down on the next page.
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