AUDIT OBSERVATIONS AND RECOMMENDATIONS
A. FINANCIAL AUDIT
Property, Plant, and Equipment (PPE)
1. The Municipality of La Libertad 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 PPE, thus affecting the fairness of presentation
of the PPE accounts amounting to ₱401,189,329.31 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
₱401,189,329.31, as follows:
Accumulated
Account Cost Depreciation Net Book Value
Immovable Properties
Land ₱ 50,802,566.41 ₱ 0.00 ₱ 50,802,566.41
Infrastructure Assets 47,193,840.13 16,552,206.30 30,641,633.83
Buildings and Other Structures 59,012,491.41 26,880,916.06 32,131,575.35
Construction in Progress 241,785,439.09 0.00 241,785,439.09
Subtotal – Immovable Properties ₱398,794,337.04 ₱ 43,433,122.36 ₱355,361,214.68
Movable Properties
Machinery and Equipment ₱ 48,245,682.91 ₱ 28,727,278.88 ₱ 19,518,404.03
Transportation Equipment 70,000,300.38 44,004,977.99 25,995,322.39
Furniture, Fixtures, and Books 611,566.73 356,423.37 255,143.36
Other Property, Plant, and Equipment 1,701,401.63 1,642,156.78 59,244.85
Subtotal – Movable Properties ₱120,558,951.65 ₱ 74,730,837.02 ₱ 45,828,114.63
Total PPE ₱519,353,288.69 ₱ 118,163,959.38 ₱401,189,329.31
1.3. Our review of the local government unit’s (LGU’s) compliance with the said circular
revealed the following points that need to be addressed:
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