Date Agency Purpose Amount
Office of the Implementation of Socio-Civic Project
8/22/2024 1,000,000.00
President Fund
Health Emergency Allowance for January-
9/12/2024 DOH 7,092,000.00
July 2023
DSWD-RFO Social Pension Program for Second
10/4/2024 12,432,000.00
VII Semester of 2024
DSWD-RFO Ayuda Para sa Kapos and Kita Program
11/29/2024 15,000,000.00
VII (AKAP) for CY 2024
Total ₱ 65,332,120.00
3.3 However, a review of the Statement of Cash Flows revealed that the
aforementioned receipts were not reported under operating activities. During an
interview, the Municipal Accountant explained that the amounts were instead
offset against payments to suppliers. This treatment was subsequently confirmed
through an examination of the supporting schedules attached to the Statement of
Cash Flows.
3.4 The foregoing accounting treatment distorts the true nature and magnitude of both
cash inflows and outflows, resulting in a misrepresentation of the Municipality’s
operating activities. It undermines the reliability of the Statement of Cash Flows,
impairs transparency, and may hinder stakeholders’ ability to make informed
decisions based on the reported cash flows.
3.5 We recommended and the Municipal Accountant agreed to ensure that all
cash receipts from fund transfers by the National Government are properly
recorded under operating activities in the Statement of Cash Flows and
should not be offset against payments to suppliers in accordance with
Paragraphs 18, 19, and 22 of IPSAS 2.
Unrecorded subsidies from the national government and associated expenses - ₱50,286,760.00
4. Subsidies from the National Government, in the form of fund transfers totaling
₱50,286,760.00, along with associated expenses, were not recorded in the books of
accounts, which is inconsistent with paragraphs 12, 23, 48 and 49 of International
Public Sector Accounting Standard (IPSAS) 23, resulting in an understatement of
both the net financial subsidy and current operating expenses by the same amount.
4.1 IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers),
prescribes the requirements for the financial reporting of revenue generated from
non-exchange transactions. While revenues received by the public sector entities
arise from both exchange and non-exchange transactions, the majority of the
revenue of governments and other public sector entities is typically derived from
non-exchange transactions, such as taxes and transfers.
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