Late submission of year-end financial statements
7. The Municipal Accountant was unable to submit the year-end financial statements
(FS) of the Municipality for CY 2024 within the prescribed period, contrary to
Section 41(2) of PD No. 1445 and Section 4.1 of COA Circular No. 2010-01 dated
March 2, 2010, thus preventing municipal officials concerned from utilizing timely
financial information, which is essential for making informed decisions.
7.1 Section 41(2) of Presidential Decree (PD) No. 1445, or the Government Auditing
Code of the Philippines, provides that the chief accountant or the official in charge
of keeping the accounts of a government agency shall submit to the Commission
year-end trial balances and such other supporting or subsidiary statements as may
be required by the Commission not later than the fourteenth day of February.
7.2 Moreover, the same provision is found in Section 4.1 of COA Circular No. 2010-
01 dated March 2, 2010, which states that the accountant shall submit the year-
end FS and schedules to the auditor on or before February 14 of each year. This
amends the provisions in Section 3.1 of COA Accounting Circular Letter No.
2007-002 dated January 19, 2007, which provides that year-end FS shall be
submitted within 60 days after December 31 of each year.
7.3 Consistent with the adoption of the Philippine Sector Accounting Standards
(PPSAS) in the LGUs, Section 3.4 of COA Circular 2016-004 dated September
30, 2016, prescribed the presentation of the financial statements as follows:
a. Statement of Financial Position;
b. Statement of Financial Performance;
c. Statement of Changes in Net Assets/Equity;
d. Cash Flow Statement;
e. Comparison Statement of Budget and Actual Amounts (SCBAA); and
f. Notes to Financial Statements.
7.4 On January 22, 2025, the Audit Team requested the submission of the FS,
including schedules of subsidiary ledger balances of the controlling accounts in
the general ledger (GL) as of December 31, 2024. However, the Municipal
Accountant did not comply.
7.5 Due to the non-submission of the financial statements on February 14, 2025, we
issued a demand letter on February 17, 2025, requesting that the Municipal
Accountant promptly submit the year-end financial statements. On March 3,
2025, the Municipal Accountant submitted the completed FS and trial balances.
7.6 Our interview with the Municipal Accountant disclosed that the delayed
preparation and submission of the FS was due to the large volume of transactions
in the last quarter of 2024. He said that with more transactions, there's a
significant increase in the amount of data that must be entered and processed.
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