the SSMI contributed to the overstatement of the inventory accounts, which has been
noted to increase over the years. Other factors included inadequate records to fully
account for the inventory items and insufficient internal controls to accurately track
the releases of items held in stock.
3.7. More importantly, we noted that the City’s RPCI submitted by the CGSO was not
fully compliant with the template required under NGAS. We appreciate the
additional details provided in the actual report; however, the column labeled
“QUANTITY” merely duplicated another column labeled “ON HAND PER
COUNT”, which explains the zero shortage/overage reported. Instead, it should have
included the “BALANCE PER CARD” column against which the results of the
quantity actually counted should be compared. The RPCI form, Annex 48 of NGAS,
Volume II, refers to this column as the “quantity of items or articles appearing in the
Supplies Ledger Card” maintained by the Accounting Office as required under
Section 114 of NGAS, Volume I.
3.8. We emphasize the importance of this issue, which has been repeatedly brought to the
attention of City officials over the years and on which no comprehensive action has
been taken nor given any priority until now. While we greatly appreciate the City’s
effort, through the CGSO, to conduct an annual physical inventory, it is crucial to
note that its impact will always depend on the ultimate reconciliation of the count
results with the book balances. The audit recommendations are meant to improve the
City’s operations and rectify the discrepancies for the protection of the government;
nothing less than an effort to address this ongoing deficiency is expected.
3.9. In the same vein, we cannot tolerate this inaction that has rendered doubtful, even up
to this time, the existence and propriety of these assets. We would like to emphasize
Section 105(1) of Presidential Decree (P.D.) No. 1445, which states the liability of
accountable officers (AOs) regarding government property as follows:
“Every officer accountable for government property shall be liable for its
money value in case of improper or unauthorized use or misapplication
thereof, by himself or any person for whose acts he may be responsible. He
shall likewise be liable for all losses, damages, or deterioration occasioned by
negligence in the keeping or use of the property whether or not it be at the
time in his actual custody.”
3.10. We reiterated our recommendations that the City Mayor require:
3.10.1. The Inventory Committee and the CGSO to prioritize the
reconciliation of the RPCI with the accounting records and identify
those responsible for the missing inventories who should be held
accountable for their value as shown in the accounting records;
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