4.1 COA Circular No. 96-011 dated October 2, 1996, provides guidelines on the
preparation of the BRS. Item 3.3 of the circular requires the accountant to draw
journal vouchers to record all valid reconciling items that require adjustment and
correction in the General Ledger (GL).
4.2 Our review of the BRS for the month of December 2024 disclosed a total
outstanding checks of ₱5,982,103.39. However, our verification of the
outstanding checks based on the records of the Municipal Treasurer’s Office
indicated that out of the ₱5,982,103.39, ₱291,181.58 were released to the payees
in January 2025 while ₱1,023,038.86 remained unreleased as of February 20,
2025. Presented below are the details of these checks:
4.3 As shown in the table above, the total checks amounting to ₱1,314,220.44 should
not have been classified as outstanding checks, as they had not been released to
the payees as of December 31, 2024. Instead, these checks should be added to the
unadjusted balance per book in the Bank Reconciliation Statement (BRS).
Consequently, adjusting journal entries should be made to debit the Cash in Bank
account and credit the appropriate liability account.
4.4 An interview with the Municipal Accountant revealed that he recorded the checks
totaling ₱1,314,220.44 because these were dated December 27, 2024, even
though the checks were not released yet as of December 31, 2024. However, this
practice was contrary to the check disbursement process prescribed in the New
Government Accounting System (NGAS) Manual for Local Government Units
(LGU), Volume I. Section 44 of the NGAS Manual requires that the accountant
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