1.10 The non-recording of the appropriate asset accounts resulted in the non-recognition of
the related depreciation expenses. Thus, the corresponding Accumulated Depreciation
accounts were understated, while the surplus account was overstated by the same
amount for the period. Collectively, these deficiencies have adversely affected the
accuracy and fair presentation of these account balances in the financial statements.
1.11 We recommended and Management agreed that:
1.11.1 The Municipal Accountant coordinate with the Municipal Engineer in
identifying the projects that have long been completed but are still
recorded in the CIP accounts;
1.11.2 The Municipal Accountant record the transfer of the cost of the
completed projects from CIP accounts to the respective PPE accounts
once these are identified;
1.11.3 The Municipal Accountant record the corresponding depreciation
expenses for the current and prior years;
1.11.4 The Municipal Accountant prepare individual subsidiary ledgers for each
project to ensure proper recording and monitoring; and
1.11.5 The Municipal Accountant and the Municipal Engineer regularly
monitor the Municipality’s CIP accounts to ensure the timely transfer of
completed projects to the appropriate PPE accounts.
RPT and SET Receivables established based on an erroneous assessment roll
2. Inconsistent with Section 248 of Republic Act (RA) No. 7160, the Real Property Tax
(RPT) Receivable and Special Education Tax (SET) Receivable, both established at
the beginning of CY 2024 at ₱9,822,743.90 each, were based on an erroneous
assessment roll due to an outdated tax system, rendering the balances of both
receivable accounts as of December 31, 2024, unreliable.
2.1 Section 248 of RA No. 7160 provides that “The provincial, city or municipal assessor
shall prepare and submit to the treasurer of the local government unit, on or before the
thirty-first (31st) day of December each year, an assessment roll containing a list of all
persons whose real properties have been newly assessed or reassessed and the values
of such properties.”
2.2 At the beginning of CY 2024, the Municipal Accountant established the receivables
for RPT and SET at ₱9,822,743.90 each, covered by Journal Entry Voucher Nos.
100-2024-01-007 and 200-2024-01-02, respectively. According to her, the amount
was computed at 1% of the assessed value of real properties totaling ₱982,274,390.00
as of December 31, 2023.
33
