of each year. The RPCLRN shall be reconciled with the accounting
records, and the necessary adjusting entries must be prepared before the
statement date;
b. The City Engineer provides the City Accountant and the CGSO with
a complete description and segregation of all road components for road
projects, ensuring proper cost allocation and asset valuation;
c. The CGSO keeps complete and updated LRNPC for all roads and their
components, ensuring compliance with the required documentation
standards; and
d. The City Accountant maintains the LRNLC, provides depreciation for
all depreciable components of the road network, and discloses the total
road network system in the Notes to the FS, following the prescribed
format in COA Circular No. 2015-008.
Unclassified maintenance and operating expenses items totaling ₱55,893,386.84 were
lumped under Other MOOE account
3. Various maintenance and operating expenses, amounting ₱55,893,386.84, were
lumped under the Other Maintenance and Operating Expenses account, instead
of being classified under the appropriate expense accounts, inconsistent with
Paragraph 17 of International Public Sector Accounting Standards (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.
3.1 According to the IPSAS 1, general-purpose financial statements aim to provide
information about the financial position, financial performance, and cash flows of
an entity that is useful to a wide range of users when making and evaluating
decisions about resource allocation. Moreover, in the public sector, these financial
statements should provide useful information for decision-making and
demonstrate the accountability of the entity for the resources entrusted to it.3
3.2 Paragraph 17 of the same standard states that the financial statements should
provide information about an entity’s expenses4 to meet its objectives.
3.3 Section 113 of Presidential Decree (PD) 1445, also known as the State Audit Code
of the Philippines, states that the chart of accounts for government agencies shall
be prescribed by the Commission on Audit (COA) and shall be so designed to
permit the agency heads to review their activities according to selected areas
of responsibility to allow for a clearer definition of obligation accounting
leading to more precise budgetary control.
3.4 In line with this, the Commission issued COA Circular No. 2015-009 dated
December 1, 2015, prescribing the use of the Revised Chart of Accounts for Local
Government Units. Annex B of the same Circular defines Other Maintenance and
Operating Expenses, with account number 5-02-99-990, as an account to be used
3
Paragraph 15 of IPSAS 1 – Presentation of Financial Statements
4
Paragraph 17(e) of IPSAS 1 – Presentation of Financial Statements
58
