2.8.4. Require the City Accountant and the Property and Supply Officer to
regularly reconcile the records, investigate any discrepancies, and make
the necessary adjustments to ensure the accurate presentation of the PPE
account balances.
2.9. The City Mayor had already directed the City Accountant and the City General
Services Officer to regularly reconcile their records, investigate any discrepancies,
and make the necessary adjustments to ensure the accurate and fair presentation of
the PPE account balances. The City also appreciated the Audit Team’s favorable
appreciation of its efforts to comply with COA Circular No. 2020-006 based on its
correspondence with the COA Professional Development Office (PDO). Due to time
constraints, however, the city personnel were not able to pursue the face-to-face
seminar offered by the PDO-PIDS, but instead the city personnel were able to attend
a webinar in December 2024 with the Association of Government Internal Auditors.
Attendees during the webinar were able to prepare a workshop output on the PIP. The
PIP will be further refined by the CGSO and the inventory committee once the City’s
manpower complement is sufficient to undertake the tasks. The City assured the
Audit Team of its compliance with the recommendations.
Overstated inventory account balances - ₱56,550,299.47
3. Discrepancies were noted between the physical count and the book balances of
inventory accounts, totaling ₱41,852,147.26, ₱9,526,853.75, and ₱5,171,298.46 under
the GF, Special Education Fund (SEF), and Trust Fund (TF), respectively, departing
from the requirements under Sections 114, 121, and 124 of the Manual on the New
Government Accounting System (NGAS) for Local Government Units (LGUs),
Volume I, due to delays in recording inventories consumed and issued, along with
lack of priority in reconciling the two records and the use of a deficient report format,
which substantially overstated the inventory account balances by ₱56,550,299.47 as
of December 31, 2024.
3.1. Section 124, Chapter 7 of the NGAS Manual for LGUs, Volume I provides the
guidelines on the inventory of supplies, viz:
“The local chief executive shall require periodic physical inventory of
supplies or property. Physical count of inventory items by type shall be
conducted semestrally and reported in the Report of the Physical Count of
Inventories (RPCI). This shall be submitted to the Auditor concerned not later
than July 31 and January 31 of each year for the first and second semesters,
respectively.”
3.2. The purpose of the physical count is to determine the existence of government
properties, especially the movable assets which are prone to loss or misuse, and to
verify the accuracy of supply records. Furthermore, the conduct of the physical count
will not prove beneficial if the RPCI is not duly reconciled with accounting records
since the main purpose of the physical inventory is to ensure that all the assets of the
LGU are intact and accounted for. Section 114 of the NGAS, Volume I, states in part
38
