5.6. Being dormant for more than five years is unusual for these accounts since the fair
value of the animals should be regularly monitored based on physical and price
changes.
5.7. Furthermore, a review of the Schedule of Biological Assets as of December 31, 2024,
showed that the inventories of biological assets lacked necessary data such as but not
limited to – a) type of breeding stock, b) description, c) quantity, d) unit cost, and e)
birth, death, transfers, and sale.
5.8. Our inquiry with the Municipal Accountant revealed that breeding stocks were not
reflected at fair value less costs to sell at the end of every reporting period due to the
Municipal Agricultural Office’s inability to submit the required inventory and the
prevailing market price for each item. Per the schedule submitted by the Municipal
Accountant, it only accounted for 23 carabaos, 15 heifers, and 12 piglets, valued at
₱332,500.00, ₱15,000.00, and ₱2,203.00, respectively, totaling ₱349,703.00. The
composition of the remaining ₱1,365,800.00 was not detailed in the schedule, of
which ₱399,000.00 was merely carried over as beginning balances, and ₱966,800.00
was attributed to the lack of inventory reports from the Municipal Agriculturist.
5.9. In an undated letter, the Municipal Agricultural Officer traced the dispersals of 10
heads of cattle, 80 heads of piglets, and 38 heads of goats. However, it did not account
for the remaining livestock due to the unavailability of the documents. In a phone
inquiry, he explained that he was unaware of the requirement to submit the prevailing
market prices of breeding stocks at the end of each reporting period to the Municipal
Accountant. As a result, changes in market value, births, and reductions due to death
or distribution were not recorded in the books.
5.10. Due to the foregoing, the existence and condition of these biological assets cannot be
ascertained. Furthermore, the said accounts were not reported at fair value less cost
to sell as of December 31, 2024, in consonance with the aforementioned IPSAS,
thereby not presenting fairly the balances of the Breeding Stocks.
5.11. We recommended and the Municipal Agriculturist agreed to:
5.11.1. Conduct an inventory of breeding stocks as of the end of each year and
thereafter render a report including the fair market value of these items
to the Municipal Accountant, for proper recording in the books of the
LGU; and
5.11.2. Keep a systematic record of the Municipality’s breeding stocks,
reporting births, deaths, and disposal, and in case of death and
disposal, facilitate requests for relief of accountability in accordance
with COA Circular No. 92-386 dated October 20, 1992, to
appropriately drop the amount from the books.
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