financial statements;
c. Various maintenance and operating expenses, amounting P55,893,386.84, were
lumped under the Other Maintenance and Operating Expenses account, instead of
being classified under the appropriate expense accounts, inconsistent with
Paragraph 27 of IPSAS 1 and COA Circular No. 2015-009 dated December 1, 2015,
thus, affecting the fair presentation of the affected accounts in the financial
statements as of year-end;
d. The inadequate monitoring of fund transfers to various Non-Government
Organizations (NGOs) or People’s Organizations (POs) since 1994 has led to an
accumulated balance of ₱46,497,781.78, which contradicts COA Circular 2007-001
dated October 25, 2007, and adversely affects the reliability of the year-end
financial statement account balances;
e. Completed projects funded by the 20 percent Economic Development Fund (EDF)
amounting to ₱45,718,667.86, still remained in the Construction in Progress (CIP)
Accounts, inconsistent with Paragraph 27 of IPSAS 1 and Section 50 of the NGAS
Manual for LGUs, Volume I, thereby overstating the CIP account and understating
the appropriate Property, Plant and Equipment (PPE) and Depreciation Expense
accounts;
f. Tangible items below ₱50,000.00, accounted as semi-expendable property, totalling
₱45,600,127.26, are included in the PPE account due to the non-implementation of
the change in accounting policy retroactively, thus, affecting the fair presentation
of the PPE account in the financial statements;
g. The Buildings, Hospitals and Health Centers, and Motor Vehicles accounts of the
City include items, totaling ₱4,655,979.35, that do not meet the asset recognition
criteria, contrary to IPSAS 1 and 17, and Section 4.2 of COA Circular No. 2020-
006 dated January 31, 2020, thus affecting the fair presentation of these accounts in
the financial statements; and
h. The reported balance of the Biological Assets account, totaling P1,123,860.00, is
uncertain due to: (a) incomplete and unreconciled inventory count; (b) dormant
accounts exceeding ten years; (c) non-maintenance of required ledger and property
cards; and (d) the lack of recognition and measurement of stocks in accordance with
IPSAS 27, thus affecting the accurate presentation of the accounts in the financial
statements.
Significant audit observations and recommendations
In addition to the above-noted deficiencies, below are the significant audit observations and
recommendations noted in the course of the audit:
a. One hundred twenty-one (121) parcels of land of undetermined value, acquired
through donation, were not recorded in the books due to delays of concerned offices
in providing the City Accountant with the Deeds of Donation, valuation reports,
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