7.3 In the Municipality, the Treasurer receives the monthly BS from the bank, along
with the copies of DM/CM. Thus, it is crucial for the Municipal Treasurer to
coordinate with the Municipal Accountant to ensure that the latter receives copies
of the documents/reports from the bank. Additionally, it is essential for the
Municipal Accountant to request copies of these documents/reports from the
Office of the Municipal Treasurer on a monthly basis, as he/she is required to
prepare monthly BRS, which will be submitted to the assigned Auditor, to confirm
the reconciliation of the Cash-in-Bank balances.
7.4 An examination of the financial statements was conducted, and the audit team
noted that the Cash-in-Bank – Local Currency Current Account (CIB-LCCA)
balance as of December 31, 2024, amounted to ₱60,137,598.45. Further
verification of the monthly BRS revealed that even after the Office of the
Municipal Accountant identified the reconciling items, there were still
discrepancies between the amounts reported in the financial statements and those
presented in the BS, as shown below:
Special
Particulars General Fund Education Fund Trust Fund Total
Per books (financial statements) 43,574,520.74 2,967,043.10 13,596,034.61 60,137,598.45
Reconciling items - (31,061.97) 86,237.80 55,175.83
Adjusted book balance, Dec. 31, 2024 43,574,520.74 2,935,981.13 13,682,272.41 60,192,774.28
Per bank statements 52,352,555.82 2,935,980.80 13,808,887.45 69,097,424.07
Reconciling items (838,058.19) 0.33 (198,136.00) (1,036,193.86)
Adjusted bank balance, Dec. 31, 2024 51,514,497.63 2,935,981.13 13,610,751.45 68,061,230.21
Discrepancy (overstated/(understated) (7,939,976.89) - 71,520.96 (7,868,455.93)
7.5 As can be seen from the table above, the CIB-LCCA balance for the General Fund
(GF), as reported in the financial statements, is understated by ₱7,939,976.89,
while the CIB-LCCA balance for the Trust Fund (TF) is overstated by ₱71,520.96.
7.6 Further inquiry revealed that the overstatement of the TF is due to the fact that the
Office of the Municipal Accountant had not secured the corresponding BS of one
TF account, with Account No. 0292-0035-28, of the same amount. As a result, no
BRS was prepared for that account. However, regarding the understatement in the
GF, the Office of the Municipal Accountant explained that this discrepancy may
be due to unreconciled items, which the Office has yet to determine.
7.7 The Municipal Accountant explained that in previous years, his office lacked
coordination with the Office of the Municipal Treasurer and did not receive copies
of BS, CM/DM, and other relevant documents/reports necessary for preparing
monthly BRS promptly. In fact, the Office of the Municipal Accountant was unable
to submit the monthly BRS of its CIB accounts in a timely manner during those
years.
7.8 The lack of coordination and noncompliance with Section 3.0 of COA Circular No.
96-011 as well as Section 74 of PD No. 1445 resulted in delayed and incomplete
bank reconciliations, causing discrepancies of ₱7,939,976.89 in the General Fund
and ₱71,520.96 in the Trust Fund. Consequently, the accuracy of the reported
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