impact of particular transactions, other events, and conditions on the entity’s
financial position and performance, among others.
3.3 Anent thereto, the Commission on Audit issued COA Circular No. 2015-008, dated
November 23, 2015, to provide the “Accounting and Reporting Guidelines on the
Local Roads Asset Management System.” Among the requirements for reporting
Road Networks account (1-07-03-010) is the disclosure of the total road network
system in the Notes to the Financial Statements, following the format provided
below:
“The LGU has a total of ____ kilometers of roads with a total cost of
Php_____________. For the year ended, the agency spent a total of
Php_____________ for local road additions, Php_____________ for major repairs
and Php_____________ for regular maintenance. Reductions in the amount of
Php_____________ were recorded due to derecognition, Php_____________ for
impairment and Php_____________ impairment were reversed.”
3.4 Our review of the Trial Balances of the Municipal Government showed that the
Road Networks (1-07-03-010) account balance as of December 31, 2024, is
₱57,192,222.97. This amount does not appear in the Notes to Financial Statements
and is only included in the total Infrastructure Assets balance of ₱133,812,990.60.
No additional disclosures were made regarding the composition of Infrastructure
Assets, which may include Road Networks, Flood Control Systems, Water Supply
Systems, Power Supply Systems, Parks, Plazas, and Monuments, as well as Other
Infrastructure Assets.
3.5 The absence of disclosures in the Notes to Financial Statements, particularly
regarding the Road Network account, has resulted in incomplete financial
information, which departs from the fair presentation attribute required in the cited
provisions of IPSAS and COA Circular No. 2015-008. As a result, the usefulness
of the financial information contained in the financial statements for users, insofar
as road networks are concerned, is also affected. Therefore, users of the financial
statements, particularly the constituents of the municipality, are deprived of
essential and appropriate financial information.
3.6 We recommended and the Municipal Accountant agreed to, henceforth,
include the required disclosures for the Road Network account as required
under COA Circular No. 2015-008.
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