account Local Road Network in the books of account shall be made within
four years, at the following targets:
End of 2016 - 25%
End of 2017 - 50%
End of 2018 - 75%
End of 2019 - 100%
2.3.19 Our review of the Notes to FS concerning Public Infrastructure, which
includes Road Networks, is as follows:
“Public Infrastructures were not previously recognized in the
books. The LGU availed of the 5-year transitional provision for
the recognition of the Public Infrastructure. For the first year of
implementation of the PPSAS in 2015, the LGU did not recognize
the Public Infrastructure in the books of accounts. Only in the
succeeding year will Public Infrastructure be recorded in the
books.”
2.3.20 Contrary to the requirement mentioned above, the disclosure in the Notes
to FS did not adhere to the standard format, which failed to keep users of
the financial statements adequately informed of the nature of the Road
Network account.
2.3.21 In the absence of the aforementioned records and reports, we could not
fully determine whether local road networks under the jurisdiction of the
City were completely recorded in the books of account, thereby affecting
the overall fair presentation of the Road Networks account in the City’s
financial statements.
2.4 This deficiency was included in the CY 2021 Annual Audit Report (AAR).
However, Management has not yet fully addressed the concern.
2.5 Management has encountered challenges in the inventory segregation of road
network components, particularly for projects implemented before 2015, due to
difficulties in retrieving the necessary documentation.
2.6 Moving forward, Management will explore potential solutions to address the
segregation of road components through coordination with the CPDO, CEO,
CAO, and CGSO. The CEO has confirmed that reflecting the segregation of the
road network components in the Program of Works is feasible.
2.7 We recommended and Management agreed to enjoin the concerned
department heads to take the following actions to ensure compliance with
COA Circular No. 2015-008 dated October 23, 2015, and improve the
accuracy and reliability of the Road Networks account:
a. The Inventory Committee conducts an annual physical count of all LRN,
and the results thereof are reported in the RPCLRN, which is to be
submitted to the Auditor and Accounting unit not later than January 31
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