IPSAS, thereby not presenting fairly the balances of the Breeding Stocks and Plants
and Trees accounts. Therefore, the total Biological Assets reported in the financial
statements as at year-end is not reliable.
3.8. This observation was communicated to Management through Audit Observation
Memorandum (AOM) No. 2025-02(2024)-Bindoy dated February 12, 2025.
3.9. We reiterated our recommendation that:
3.9.1. The OIC – Municipal Agriculturist, conduct an inventory of breeding
stocks and plants and trees as of the end of each year and thereafter
render a report including the fair market value of these items to the
Municipal Accountant, for proper recording in the books of the LGU;
3.9.2. The OIC – Municipal Agriculturist henceforth keep a systematic record
of the Municipality’s breeding stocks and trees, reporting births, deaths
and disposal, and in case of death and disposal, facilitate request for
relief of accountability in accordance with COA Circular No. 92-386
dated October 20, 1992 to appropriately drop the amount from the
books; and
3.9.3. The Municipal Accountant disclose the composition of the Biological
Assets account in the Notes to the Financial Statements in accordance
with IPSAS 27 to provide relevant information that may affect the
fairness of the presentation of the financial statements.
3.10. During the exit conference, the OIC – Municipal Agriculturist affirmed that there
were no breeding stocks on hand. According to the Municipal Planning and
Development Coordinator, the plants and trees pertain to seedlings provided by the
Department of Environment and Natural Resources for the National Greening
Program. Nonetheless, the Municipal Accountant assured the Audit Team that
adjustments will be made in the current year.
Inventory
4. The accuracy and reliability of the inventory account in the total amount of
P9,617,624.95 could not be ascertained due to failure to conduct a physical count of
inventory items every semester and to prepare the Summary of Supplies and
Materials Issued (SSMI), which is the basis for recording the utilization of inventory
items, contrary to Sections 121 and 124, Chapter 7 of the New Government
Accounting System (NGAS) Manual for Local Government Units, thereby affecting
the fair presentation of the account in the financial statements.
4.1. Section 21 121 and 124, Chapter 7 of the NGAS Manual for Local Government
Units, set forth the procedures for accounting for supplies or property, as follows:
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