Inventory Accounts
3. The existence, validity, and correctness of the Inventory accounts totaling
₱3,013,247.40 as of December 31, 2024, have not been established due to (a) non-
conduct of the year-end physical count, (b) non-compliance with the Perpetual
Inventory Method, and (c) non-maintenance of supplies ledger cards and stock cards
by the Offices of the Municipal Accountant and Municipal Treasurer, respectively,
which goes against the provisions set forth in the NGAS Manual for LGUs, Volume
1, thereby, affecting the fairness of the presentation of these accounts in the financial
statements.
3.1. As of December 31, 2024, the financial statements showed an Inventory account
balance of ₱3,013,247.40, which consisted of the following:
Account Amount
Inventory Held for Distribution
Agricultural Produce for Distribution ₱ 8,500.00
Inventory Held for Consumption
Office Supplies Inventory 0.02
Accountable Forms, Plates, and Stickers 324,208.02
Drugs and Medicines Inventory 0.15
Medical, Dental, and Laboratory Supplies Inventory 155,454.60
Construction Materials Inventory 1,405,135.00
Other Supplies and Materials Inventory 1,119,949.61
Total ₱ 3,013,247.40
3.2. Our audit of the Municipality’s inventory account records revealed the following:
3.2.1. Non-conduct of year-end physical count
3.2.1.1. Section 124, Volume I, of the Manual on the New Government
Accounting System (NGAS) for LGUs states that the local chief
executive shall require the semestral physical inventory of supplies
or property and the submission of the Report of the Physical Count
of Inventories (RPCI) to the auditor concerned not later than July 31
and January 31 of each year for the first and second semesters,
respectively.
3.2.1.2. However, in a phone inquiry, the Acting Municipal Treasurer
disclosed that no Office Order was issued to reconstitute the
Inventory Committee, which would carry out the physical count of
its inventories. He added that although the Municipality previously
had an Inventory Committee, the Office Order creating it could no
longer be located, and its members comprising the said committee
could not be recalled. Hence, verification of the above amounts
could not be performed, affecting the existence and correctness of
the inventory accounts in the financial statements.
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