3.13 It was further emphasized that, since the CY 2025 Annual Budget was already
approved, Management shall implement the audit recommendation in the
preparation of the CY 2026 Annual Budget.
3.14 We recommended and Management agreed that the City Budget Officer, in
coordination with the City Accountant, enforce and institutionalize the
proper use of accounts in accordance with COA Circular No. 2015-009 when
consolidating the City’s annual budget by developing comprehensive SOPs
that outline the proper procedures for budget preparation, expense
classification and monitoring for each office, unit or department. This will
ensure proper and appropriate recording of all expenditures in the books of
accounts in compliance with the IPSASs.
Unliquidated balance of Due from Non-Government Organizations (NGOs) or People’s
Organizations (POs) totaling ₱46,497,781.78
4. The inadequate monitoring of fund transfers to various NGOs/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.
4.1 COA Circular No. 2007-001 dated October 25, 20075 prescribes the Revised
Guidelines in the Granting, Utilization, Accounting and Auditing of the Funds
Released to NGOs/POs.
4.2 Section 5.4 thereof provides that within 60 days after the project’s completion,
the NGO/PO shall submit the final Fund Utilization Report, certified by its
Accountant and approved by its President/Chairman, to the Government
Organization (GO), along with the inspection report and certificate of project
completion rendered/issued by the GO authorized representative, as well as a list
of beneficiaries acknowledging the project/funds/goods/services received. The
validity of these documents shall be verified by the Internal Auditor or equivalent
official of the GO and shall be the basis of the GO in recording the fund utilization
in its books of accounts. These documents shall support the liquidation of funds
granted to the NGO/PO.
4.3 Likewise, the Due from NGOs/POs account, as described in COA Circular No.
2015-009 dated December 1, 20156, is used to recognize the amount of advances
granted to NGOs/POs for the implementation of specific projects. The account is
credited for the liquidation of advances.
4.4 Verification of the financial statements as of December 31, 2024, revealed that
5 Previous promulgations to provide control and guidance in the granting, utilization, management and recording of
funds released to NGOs/POs were COA Circular Nos. 95-003 and 96-003 dated February 15, 1995, and February 27,
1996, respectively.
The adoption of the New Government Accounting System (NGAS) in 2002 prompted COA to revise the existing
guidelines on the matter to ensure conformity to the prescribed NGAS financial accounting procedures for related
transactions, put in place necessary controls in the release and utilization of funds, promote transparency and
accountability, including monitoring of the implementation of projected funded out of the funds granted.
6
Prescribing the Revised Chart of Accounts for Local Government Units
61
