₱133,160.00, affecting the fairness of the presentation of the financial statements,
particularly the Statement of Financial Performance.
4.9 We recommended and the City Accountant agreed to:
4.9.1 Make the necessary adjustments to correct the erroneous recording of
prior period expenditures to reflect the actual financial performance of
the City Government of Bayawan, in conformity with Section 119 of PD
1445 and IPSAS 1; and.
4.9.2 Direct the Accounting Clerk assigned to record the expenditures to,
henceforth, review those that pertain to the prior period and journalize
these items as adjustments to equity and corresponding real or accrued
accounts rather than to current period expenditures or nominal accounts.
Funds transferred to NGOs/POs recorded as Loans Receivables – ₱23,682,271.32
5. The Loans Receivable – Others account includes financial assistance to
cooperatives or non-governmental organizations/people’s organizations
(NGOs/POs), totaling ₱23,682,271.32, which is inconsistent with COA Circular
Nos. 2007-001 and 2015-009, dated October 25, 2007, and December 1, 2015,
respectively, thus defeating the purpose of providing financial assistance to the
intended NGO/PO and affecting the fair presentation of the Loans Receivable
account in the Statement of Financial Position.
5.1 Sections 34 and 36 of Republic Act (RA) No. 7160 recognize the role of people's
and non-governmental organizations in the pursuit of local autonomy. Therefore,
LGUs shall promote their establishment and operation. With this premise, the
LGU, through its local chief executive and with the concurrence of the Sanggunian
concerned, may provide assistance, financial or otherwise, to such NGOs/POs, for
economic, socially-oriented, environmental, or cultural projects to be implemented
within its territorial jurisdiction.
5.2 In accordance therewith, the Commission on Audit issued COA Circular No. 2007-
001 dated October 25, 2007, to provide clear guidelines for the grant, utilization,
accounting, and auditing of the funds released to these organizations. This issuance
intends to ensure conformity to the prescribed financial accounting procedures in
the New Government Accounting System for related transactions, put in place the
necessary controls, promote transparency and accountability, and monitor the
implementation of projects funded out of the funds granted.
5.3 Section 3.0 of the said Circular also emphasizes that the guidelines established
therein shall apply to all funds granted to NGOs/POs, because all government
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