AUDIT OBSERVATIONS AND RECOMMENDATIONS
A. FINANCIAL AUDIT
Property, Plant, and Equipment (PPE)
1. The Municipality of Jimalalud did not effectively follow the guidelines and
procedures specified in COA Circular No. 2020-006 dated January 31, 2020,
regarding the one-time cleansing of Property, Plant, and Equipment (PPE), thus
affecting the fairness of presentation of the PPE accounts amounting to
₱401,762,927.72 in the financial statements at year-end and depriving the
government’s access to reliable and useful information for decision-making and
accountability for these assets.
1.1. COA Circular No. 2020-006 dated January 31, 2020, was issued to prescribe
guidelines and procedures for inventory-taking, recognizing existing items at the
station, and addressing the disposition of nonexistent or missing PPE items. This
one-time cleansing of PPE accounts for government agencies aims to establish
verifiable PPE balances as to existence, condition, and accountability.
1.2. As of December 31, 2024, the financial statements showed a PPE balance of
₱401,762,927.72, as follows:
Accumulated
Account Cost Depreciation Net Book Value
Immovable Properties
Land ₱ 13,367,376.21 ₱ 0.00 ₱ 13,367,376.21
Land Improvements 4,602,846.15 0.00 4,602,846.15
Infrastructure Assets 145,994,812.54 9,284,053.02 136,710,759.52
Buildings and Other Structures 121,519,850.91 2,435,671.35 119,084,179.56
Construction in Progress 93,331,075.16 0.00 93,331,075.16
Subtotal – Immovable Properties ₱378,815,960.97 ₱ 11,719,724.37 ₱367,096,236.60
Movable Properties
Machinery and Equipment ₱ 23,181,104.50 ₱ 15,719,939.48 ₱ 7,461,165.02
Transportation Equipment 34,581,637.31 13,361,625.23 21,220,012.08
Furniture, Fixtures, and Books 5,438,491.75 823,769.85 4,614,721.90
Other Property, Plant, and Equipment 3,631,678.77 2,260,886.65 1,370,792.12
Subtotal – Movable Properties ₱ 66,832,912.33 ₱ 32,166,221.21 ₱ 34,666,691.12
Total PPE ₱445,648,873.30 ₱ 43,885,945.58 ₱ 401,762,927.72
1.3. Our review of the LGU’s compliance with the said circular revealed the following
points that need to be addressed:
25
