4.2 In CY 2024, the Municipality purchased a P4.8 outdoor LED wall display, wall
mounted, with a size of 4m x 5m = 40sqm (H x W) and panel size of 1m x 0.5m
(H x W), amounting to ₱3,997,000.00. The disbursement was covered by
Disbursement Voucher No. 100-2024-08-5280 dated August 21, 2024. The related
Purchase Request indicates that the purpose of the equipment is to serve as public
information equipment for the Municipality’s mega market.
4.3 However, the related Journal Entry Voucher covering the recording of the purchased
equipment in the books of accounts of the Municipality showed that it was
improperly recognized as Office Equipment (1-07-05-020).
4.4 As provided in the description of the account Information and Communication
Technology Equipment (1-07-05-030), it is used to record the cost incurred in the
purchase of information and communication technology equipment, which includes
hardware (computers, printers, scanners, and the like) and pre-loaded software such
as but not limited to operating systems which are included in the cost of the computer
hardware. This also includes data communications equipment and such other
peripherals and auxiliary equipment necessary to put the system into operational
mode.
4.5 Hence, recording the above equipment as Office Equipment (1-07-05-020) instead of
Information and Communication Technology Equipment (1-07-05-030) is
inconsistent with the abovementioned Circular.
4.6 Consequently, both asset accounts, including the related depreciation expense
accounts, were overstated and understated, respectively, as of December 31, 2024.
4.7 We recommended and the Municipal Accountant agreed to:
4.7.1 Prepare the necessary accounting entries to rectify the recording of a P4.8
outdoor LED wall display costing ₱3,997,000.00, which was recognized as
Office Equipment (1-07-05-020) instead of Information and
Communication Technology Equipment (1-07-05-030), and to adjust the
corresponding depreciation expense accounts; and
4.7.2 Henceforth, refer to the description of accounts as a guide in recording
expenses in the books of accounts in adherence to COA Circular No.
2015-009 dated December 1, 2015, to avoid making erroneous accounting
entries in the books of accounts.
4.8 The Municipal Accountant submitted JEV No. 100-2025-04-024 dated April 25,
2025, reclassifying the outdoor LED wall display and correcting the depreciation
expense for the affected asset accounts.
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