7. Disclosures in the Notes to Financial Statements on the Road Networks account
balance of ₱2,021,608,101.86 is incomplete, departing from the faithful
representation requirement of the IPSAS and the reporting guidelines under COA
Circular No. 2015-008, dated November 23, 2015, thereby, providing inadequate
financial information to users of the financial statements and affecting the
usefulness of said information to its constituents.
7.1 One of the attributes for information to be useful in financial reporting, as provided
for under the “Conceptual Framework for General-Purpose Financial Reporting by
Public Sector Entities” of the IPSAS, is a faithful representation of the economic
and other phenomena that it purports to represent. Paragraph 3.10 of such
framework states that faithful representation is attained when the depiction of the
phenomenon is complete, neutral, and free from material error.
7.2 Further, paragraph 29 of IPSAS 1, in substance, states that fair presentation also
requires an entity to provide additional disclosures when compliance with the
specific requirements in IPSASs is insufficient to enable users to understand the
impact of particular transactions, other events, and conditions on the entity’s
financial position and financial performance, among others.
7.3 Anent thereto, the Commission on Audit issued COA Circular No. 2015-008, dated
November 23, 2015, to provide for the “Accounting and Reporting Guidelines on
the Local Roads Asset Management System.” Among the requirements in
reporting of the Road Networks account (1-07-03-010) is the disclosure of the total
road network system in the Notes to the Financial Statements, in 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.”
7.4 Our review of the Notes to Financial Statements of the City Government showed
that the Road Networks account balance as of December 31, 2024, is aggregated
to the Infrastructure Assets with a total carrying amount of ₱2,837,945,216.40.
Disclosure on the Road Networks account (1-07-03-010) only includes the
properties turned over by the Department of Public Works and Highways (DPWH)
to the City Government for CY 2024, stated as follows:
89 Property, Plant and Equipment also includes various properties turned-over by
DPWH to the LGU of Bayawan in 2024 with the total amount of ₱313,681,331.83.
Furthermore, these transferred properties were included in the Government Equity
– Others. Details as follows:
56
