Completed projects under 20 per cent Economic Development Fund (EDF) totaling
₱45,718,667.86 still remained in the Construction in Progress (CIP) account
5. Completed projects funded by the 20% EDF amounting to ₱45,718,667.86, still
remained in the 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 Property, Plant and Equipment (PPE) and
Depreciation Expense accounts.
5.1 Section 50 of the NGAS Manual for LGUs, Volume I, provides that during the
construction period, agency assets and public infrastructures shall be taken up in
the books as CIP with appropriate asset classification. Upon completion of the
project, the CIP for agency assets shall be closed to the appropriate asset account.
5.2 Notably, the Department of Budget and Management (DBM), Department of the
Interior and Local Government (DILG), and Department of Finance (DOF) issued
various guidelines7 on the appropriation and utilization of the 20% Economic
Development Fund (EDF). On a general note, one of the purposes for issuing
these guidelines is to promote transparency and accountability in the utilization
of such funds.
5.3 The Audit Team’s review of the subsidiary ledgers of CIP accounts in the 20%
EDF as of December 31, 2024 revealed that 999 items, aggregating
₱500,244,248.42 recorded since 2006, still remained in the CIP Accounts, as
follows (See Appendix 4):
Year No. of No. of Years in
Account Amount
recorded Items CIP Account
Construction in 2008-2013 ₱ 42,932,947.77 203 > 10 years
Progress – 2014-2018 26,883,152.02 86 6-10 years
Building and
Other Structures 2019-2023 66,284,180.89 62 1-5 years
(20% EDF)
Subtotal 136,100,280.68 351
Construction in 2007-2008 13,523,503.68 76 > 15 years
Progress – 2009-2013 87,106,625.14 226 10-15 years
Infrastructure 2014-2018 128,865,697.17 232 6-10 years
Assets
2019-2023 129,527,425.37 95 1-5 years
(20% EDF)
Subtotal 359,023,251.36 629
Construction in 2007-2008 201,884.68 3 > 15 years
Progress – Land 2009-2011 3,732,332.01 14 11-15 years
Improvements
2012-2020 1,186,499.69 2 1-5 years
(20% EDF)
Subtotal 5,120,716.38 19
Grand Total ₱ 500,244,248.42 999
7
DILG-DBM Joint Memorandum Circular (JMC) No. 2011-1 dated April 13, 2011, DILG-DBM JMC No. 2017-1
dated February 22, 2007 and DBM-DOF-DILG JMC No. 1 dated November 4, 2020
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