3.3 In the audit of the Training Expenses (5-02-02-010) account totaling
₱23,324,920.33, it was found that about ₱7,123,563.14 pertain to expenses for
travel, such as travel per diems and incidental expenses. These expenditures should
have been recorded in the Travel Expenses – Local (5-02-01-010) account.
3.4 Similarly, the examination of the Other Supplies and Materials Expenses (5-02-03-
990) account totaling ₱61,091,535.26 disclosed that there were expenses for meals
and snacks served during training sessions and/or gatherings amounting to about
₱8,627,700.00, such as consultative workshops, council meetings, awarding of
outstanding farmers and fisherfolks, conduct of renewal/granting of License to
Own and Possess Firearms, and blood donation activities, among others. These
expenses should have been recorded either in the Extraordinary and Miscellaneous
Expenses (5-02-10-030) or to Training Expenses (5-02-02-010) accounts.
3.5 In view of the foregoing, expenditures totaling ₱15,751,263.14 (₱7,123,563.14 in
Training Expenses and ₱8,627,700.00 in Other Supplies and Materials Expenses)
have been recorded or classified in accounts which did not best describe their
nature of incurrence.
3.6 It must be noted that proper recording of these expenses is critical in management's
decision-making process, especially during budgeting and appropriation of
expenditures. This would allow Management to encourage accountability of its
officials and employees and enable them to evaluate the activities within the City
Government.
3.7 Moreover, during the audit of cash advances and other receivables, we also noted
that there were cash advances made by officers and employees pertaining to travel
and intelligence purposes, which were recorded in the Other Receivables (1-03-06-
990) account, summarized as follows:
Cash advances made for traveling expenses ₱ 45,806.00
Cash advances for intelligence purposes 10,000.00
Total ₱ 55,806.00
3.8 It is emphasized that proper recording of these cash advances is also critical in
management's decision-making process, because it would enable them to evaluate
the activities within their government unit.
3.9 Even if the accounts misclassified pertained to the same class of transactions, i.e.
all expenses and all cash advances or receivables, they can still affect the fairness
of the presentation of each account, and influence the interpretation of the users of
financial information. Further, as previously mentioned, the account classification
can influence the decision-making process of Management.
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