AUDIT OBSERVATIONS AND RECOMMENDATIONS
FINANCIAL AUDIT
Unreconciled difference of various PPE accounts - ₱72,894,810.00
1. The non-reconciliation of a net difference amounting to ₱72,894,810.00 between the
General Ledger balance and the Report on the Physical Count of Property, Plant
and Equipment (PPE), contrary to the guidelines and procedures in the One-Time
Cleansing of PPE embodied in COA Circular No. 2020-006 dated January 31, 2020,
rendered the balance of the PPE account as of December 31, 2024, with a gross
amount of ₱113,077,252.99, unreliable and inaccurate.
1.1 COA Circular No. 2020-006 dated January 31, 2020, prescribes the guidelines
and procedures for inventory taking, recognition of those PPE items found at the
station, and disposition of non-existing/missing PPE items for the one-time
cleansing of PPE accounts of government agencies to establish PPE balances that
are verifiable as to existence, condition and accountability.
1.2 The same circular provides the following guidelines, to wit:
“5.1 Each government agency shall conduct a physical count of all its PPE,
whether acquired through purchase or donation, including those
constructed by the administration and found at the station.
5.2 The Head of the Agency shall create an Inventory Committee composed
of an adequate number of members to be able to complete the physical
inventory in three months or less. The Inventory Committee shall have at
least one member each from the Accounting and Property
Divisions/Units of the agency.
5.3 The members of the Inventory Committee shall be temporarily relieved
of all their regular duties to devote their full time to the conduct of the
physical inventory taking until the same is completed.
5.4 The entire inventory taking shall be witnessed by the Commission on
Audit (COA) Auditor. The Audit Team Leader and/or any of his/her audit
team members may be assigned for the purpose.
5.5 The Head of the Agency may also require a representative from the
agency's Audit Service/Unit to witness the inventory taking.
5.6 Each government agency shall adopt a uniform property identification
system for PPE wherein a unique Property Number shall be assigned for
each PPE item, using the following numbering system:
35
