2.3 Verification of the financial statements as of December 31, 2024, revealed that
the Road Networks account (1-07-03-010), with a book value of ₱97,548,062.80,
showed the following deficiencies contrary to the aforementioned Circular:
a) Incomplete inventory of local roads and Report on the Physical Count of
Local Road Network (RPCLRN)
2.3.1 Item V (1) of the Circular mandates conducting an inventory of local roads
under the LGU’s jurisdiction, while Item VI (3) requires the Inventory
Committee to prepare the RPCLRN to be submitted to the concerned
Auditor and Accounting Division/Unit not later than January 31 of each
year.
2.3.2 On January 18, 2025, the CGSO submitted the Inventory Report on
Property, Plant, and Equipment as of December 31, 2024 to the Audit
Team. An interview with the Inventory Committee revealed that an
inventory count of the road networks was conducted in CY 2023.
However, no subsequent annual inventories were performed. The
Inventory Committee encountered challenges in classifying road networks
into road lots, pavements, drainage and slope protection structures, and
other miscellaneous structures as required by the Circular. Additionally,
difficulties arose in determining the dates of construction and assessing
the physical condition of these assets.
2.3.3 As a result, the corresponding RPCLRN was not completely prepared,
further highlighting the challenges and limitations encountered by the
audit team.
b) Incomplete Local Road Network Ledger Cards (LRNLC), Local Road
Network Property Cards (LRNPC), and other records and a lack of cost
segregation of Local Road Network (LRN) components
2.3.4 Item VII enumerates the duties and responsibilities of the Local
Accountant, General Services Officer, City Engineer, and Local Chief
Executive, which include, among others, the following:
a. Local Accountant
1. Prepare the Journal Voucher (JV) to record the beginning
balance of the local road network and its component in the
general ledger and the Local Road Network Ledger Card,
respectively;
2. Support the JV with the Registry of Public Infrastructures for
Roads, working paper on the distribution of costs for the road
components, and working paper on the determination of the
depreciated replacement cost for road components with no
available cost per registry;
3. Keep and maintain subsidiary records and road components for
every road network; and
4. Prepare a lapsing schedule for the computation of the
depreciation for each component at the year of the year.
54
