Biological Assets Acquisition Date Acquisition Cost
Piglets 2006 and prior years ₱ 63,400.00
Cattles 2019 989,934.00
Carabaos July 8, 2021 987,555.14
Goats 11/04/2022 299,900.00
Cattles 08/16/2022 477,600.00
Sheep 12/27/2024 492,830.00
Total ₱3,311,219.14
3.4 Our interview with the Municipal Accountant revealed that the piglets acquired
by the Municipality costing ₱63,400.00 have been recorded in the books since
CY 2006. He stated there were no available records to ascertain the whereabouts
and condition of these animals.
3.5 The Municipal Accountant further explained that the reported amounts for the
cattle, carabaos, and goats purchased from 2019 to 2022 were based on the
physical inventory report submitted by the Municipal Agriculturist. Our review
of this inventory report on Biological Assets revealed that the fair market prices
for the biological assets purchased during this period were recorded at their cost
at the time of purchase.
3.6 The Municipal Agriculturist explained that the prices for the cattle, carabaos, and
goats were still recorded at their acquisition cost because an auction market for
these animals could not be found. She further mentioned that these assets were
dispersed to various beneficiaries and were not intended for sale, leading her to
believe that fair values less costs to sell were not necessary. However, she assured
the Audit Team that they would determine the fair values less costs to sell of the
biological assets in 2025.
3.7 Since the Biological Assets were not reported at fair value less costs to sell, the
reported amounts in the financial statements were unreliable.
3.8 We recommended and the Municipal Agriculturist agreed to provide the
Municipal Accountant with an inventory of biological assets, along with the
prevailing market price for each item as of the reporting date and
information on the prevailing cost to sell these biological assets.
Non-preparation of JEVs for book reconciling items in the BRS - ₱1,314,220.44
4. The Municipal Accountant did not prepare Journal Entry Vouchers (JEV) for book
reconciling items in the Bank Reconciliation Statements (BRS) totaling
₱1,314,220.44, contrary to Item 3.3 of COA Circular No. 96-011 dated October 2,
1996, resulting in an understatement of both the Cash in Bank and Liability
accounts by the same amount.
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