LDRRM Erroneous Accounting Entries
5. Payments for various LDRRM supplies and equipment were incorrectly recorded,
resulting in the overstatement of Other Supplies and Materials Inventory
(₱168,334.00), Other Property, Plant and Equipment (₱99,500.00), and Other
MOOE (₱40,250.00), and the understatement of Semi-Expendable Disaster
Response and Rescue Equipment (₱109,595.00) and Disaster Response and Rescue
Equipment (₱198,489.00), thereby affecting the accuracy of the financial statements
as of December 31, 2024.
5.1 COA Circular No. 2012-002 dated September 12, 2012, provides for the accounting
and reporting guidelines for the Local Disaster Risk Reduction and Management
Fund (LDRRMF) of LGUs, National DRRM Fund given to LGUs, and receipts from
other sources. Section 5.1.7 thereof states, “Equipment purchased for disaster
response and rescue operations or activities shall be recorded in the General Fund
books of accounts using the account Disaster Response and Rescue Equipment.”
5.2 COA Circular No. 2015-009 dated December 1, 2015, prescribes the Revised Chart
of Accounts for Local Government Units to record and report the financial
transactions of LGUs. Annex B thereof contains the description of accounts and the
instructions, which partly provides:
Account Title Disaster Response and Rescue Equipment
Account Number 1-07-05-090
Normal Balance Debit
Description This account is used to record the cost incurred in the
purchase or assembly or fair value, if acquired through
donation or transfers without cost, of equipment used solely
for disaster response and rescue activities. Credit this
account for derecognition of the carrying amount of the
replaced parts in major repairs, or disposal.
Subsidiary Ledgers:
01 – Firefighting Equipment and Accessories
02 – Flood Rescue Equipment
03 – Earthquake Rescue Equipment
04 – Volcanic Eruption Rescue Equipment
05 – Landslide Rescue Equipment
5.3 On the other hand, COA Circular No. 2022-004 dated May 31, 2022, provides the
guidelines on the implementation relative to the increase in the capitalization
threshold from ₱15,000.00 to ₱50,000.00. Specifically, Section 4 thereof requires that
tangible items that meet the definition and recognition criteria of Property, Plant, and
Equipment (PPE) but cost is below ₱50,000.00 shall be accounted in the books of
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