COMPLIANCE AUDIT
No RLRN and RPCRNS prepared
11. Management did not prepare the Report on Local Road Network (RLRN) and the
Report on the Physical Count of the Road Network System (RPCRNS), as
mandated under COA Circular No. 2015-008, dated November 23, 2015, thereby,
the reported balance of the Road Networks account in the financial statements
amounting to ₱57,192,222.97 could not be verified. Likewise, the absence of such
reports could potentially affect Management decisions, possibly leading to delays
in formulating policies for infrastructure development and maintenance.
11.1 COA Circular No. 2015-008, dated November 23, 2015, was issued to provide
“Accounting and Reporting Guidelines on the Local Roads Asset Management
System.” Item VI thereof requires the General Services Officer (GSO), at the end
of each accounting period, to render a Report on LRN for the concerned local
government unit. In the absence of a GSO, the report shall be prepared by the
property custodian or the designated personnel. Moreover, the Inventory
Committee is also tasked with preparing the RPCRNS.
11.2 However, the Audit Team was not provided with the required RLRN and
RPCRNS. While the RLRN Ledger and Property Cards are accessible to the Audit
Team through e-NGAS, no RLRN was submitted by the GSO or concerned
personnel and the Inventory Committee also did not prepare the RPCRNS.
11.3 It is emphasized that the submission of the RLRN and RPCRNS is crucial for
efficiency, accountability, and sustainable infrastructure growth. Furthermore,
infrastructure development and maintenance may be affected, as authorities
would lack the necessary data to prioritize road repairs and upgrades, potentially
resulting in deteriorating road conditions and delays in implementing new
projects.
11.4 Moreover, conducting a physical count of the Road Networks by the Inventory
Committee is essential for establishing monitoring and reconciliation between the
amounts recorded in the books of accounts and the actual existence of these road
networks, which are reported at ₱57,192,222.97 at year-end. The Municipality’s
propriety and ownership of these infrastructure assets should be validated.
11.5 Therefore, preparing both reports is a vital procedure for ensuring reconciliation,
thus, the reports are necessary tools for Management decisions, specifically in
formulating policies for transportation and mobility improvements. The non-
preparation of such reports may delay infrastructure development and
maintenance.
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