4.5. Our examination of the financial statements showed that the biological assets account
balance of ₱457,500.00 remained unchanged for more than five years ending
December 31, 2024, composed of the following:
Biological Asset Amount
Breeding Stocks – 10801010
15 carabaos at ₱26,000.00 each (CY 2019 – Sagip-Saka, Department ₱ 390,000.00
of Agriculture)
Purchase of upgraded does and poultry (CY 2014) 67,500.00
Total ₱ 457,500.00
4.6. 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.
4.7. 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.
4.8. 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 their records, only ₱390,000.00,
representing 15 carabaos, could be traced, while the quantities of upgraded does and
poultry corresponding to the remaining ₱67,500.00 could not be identified, as these
were merely carried over as beginning balances.
4.9. In a phone inquiry, the Municipal Agricultural Officer explained that he was unaware
of the requirement to submit the inventory and prevailing market prices of breeding
stocks at the end of each reporting period to the Municipal Accountant. He added that
the inventory only accounted for the 15 carabaos dispersed to five barangays in CY
2019, while they could not trace the does and poultry acquired in CY 2014 due to the
unavailability of the documents. As a result, changes in market value, births, and
reductions due to death or distribution were not recorded in the books.
4.10. 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.
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