1.18. The City Mayor had already directed the concerned personnel to comply with all the
recommendations.
Unreconciled balance of PPE per books and per count - ₱57,969,559.01
2. The validity, existence, and accuracy of the PPE accounts totaling ₱488,780,849.81
could not be ascertained due to the unreconciled difference of ₱57,969,559.01 between
the PPE balances in the Report on the Physical Count of PPE (RPCPPE) and the
books of accounts, thus, affecting the fair presentation thereof in the Financial
Statements. These unreconciled differences could have been properly and adequately
addressed had Management implemented the one-time cleansing of PPE as
prescribed in COA Circular No. 2020-006.
2.1. The persistent discrepancies in the PPE accounts of government agencies have
become a long-standing issue, preventing the accurate determination of PPE balances
reflected in the financial statements. If not addressed effectively, this condition will
continue to undermine the fair presentation of the financial position of government
agencies, depriving the government of reliable and essential information for decision-
making and accountability regarding these assets.
2.2. To address this, COA Circular No. 2020-006, dated January 31, 2020, was issued to
provide guidelines and procedures for inventory taking, the recognition of PPE items
found at stations, and the disposition of non-existing or missing PPE items. The
Circular aims to ensure a one-time cleansing of PPE accounts within government
agencies, establishing verifiable PPE balances concerning their existence, condition,
and accountability. Section 5 of the Circular outlines the following key guidelines:
a. Each agency must conduct a physical count of all PPE, including purchased,
donated, and constructed items.
b. The Head of the Agency must form an Inventory Committee, with members
from the Accounting and Property Divisions, to complete the inventory in
three months or less.
c. Committee members must be temporarily relieved of their regular duties to
focus on the inventory.
d. The entire inventory must be witnessed by a COA Auditor or designated audit
team members.
e. The Head of the Agency may also require an Internal Audit Service/Unit
representative to observe.
f. The Inventory Committee is responsible for confirming the existence,
completeness, and condition of all PPE.
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