4.2.3.3. The above non-movement of supplies resulted from the Accounting
Office's failure to keep the required SLC for each commodity/stock
and the Municipal Treasurer's non-maintenance of stock cards for
the receipt and disposition of supplies, especially those acquired in
the previous years.
4.3. As a result, the existence and accuracy of the recorded inventory items could not be
ascertained, thus affecting the fairness of the presentation of these accounts in the FS.
4.4. We recommended and Management agreed that:
4.4.1. Municipal Mayor create the Inventory Committee comprised of
members who can be relieved of their regular duties to devote full time
to conducting the physical inventory taking until the same is completed;
4.4.2. Inventory Committee prepare and submit a copy of the inventory reports
to the Auditor to verify compliance with Section 124 of the NGAS Manual
for LGUs, Volume I;
4.4.3. Municipal Accountant and Municipal Treasurer maintain the supplies
ledger cards and stock cards, respectively; and
4.4.4. Municipal Accountant strictly follow the Perpetual Inventory Method
for recording purchases of supplies and materials as required in the
NGAS Manual for LGUs.
Biological Assets
5. Biological Assets valued at ₱1,715,503.00 that have been in the books for more than
five years, were not stated at fair value as of the reporting date due to the non-
submission of a complete Inventory Report of Breeding Stocks and the prevailing
market price for each item by the Municipal Agriculturist to the Municipal
Accountant, contrary to Section 4.5.1 of COA Circular 2016-004 dated September 30,
2016, and the pertinent provisions of the IPSAS 27, thus, rendering the existence and
valuation of the account presented in the financial statements doubtful and
unreliable.
5.1. Paragraphs 16 and 19 of IPSAS 27 provide the recognition and measurement of
biological assets, to quote:
“ 16. A biological asset shall be measured on initial recognition and at each
reporting date at its fair value less cost to sell, xxx.
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