Equipment (PPE) items for the one-time cleansing of PPE accounts of government
agencies to establish verifiable PPE balances regarding their existence, condition,
and accountability. The PPE generally comprises a substantial portion of the total
assets of the LGU, thus it is important for Management to properly account for all
of its PPE, whether acquired through purchase or donation, and also including
those constructed by administration or contract.
3.2 The one-time cleansing is a one-time privilege granted to LGUs due to
discrepancies in the PPE account balances of government agencies, which have
become a perennial issue that has caused the non-establishment of the accuracy of
the PPE balances presented in the financial statements.
3.3 As of December 31, 2024, the PPE account reported in the financial statements
showed a total amount of ₱1,128,712,417.76, net of accumulated depreciation,
which includes a substantial amount of movable properties totaling
₱82,129,699.85. However, a review of the Municipal Government’s compliance
with the said circular revealed that it did not complete the necessary procedures to
cleanse its PPE account balances.
3.4 Section 6.0 of COA Circular 2020-006, dated January 31, 2020, discusses the
procedural guidelines for conducting the one-time cleansing of LGUs, which
include the following: (a) preliminary activities before conducting inventory
taking, (b) inventory taking, and (c) reconciliation of inventory counts per Report
on the Physical Count of Property, Plant, and Equipment (RPCPPE) with property
and accounting records.
3.5 Our inquiry with Management revealed that the one-time cleansing has already
started, but not all procedures were performed and completed on schedule. The
Inventory Committee initially prepared and submitted their Physical Inventory
Plan (PIP) with a cut-off date of October 24, 2024. However, on March 19, 2025,
which is seven months after the scheduled start of inventory on August 20, 2024,
the Committee submitted the 2024 PIP, inconsistent with Section 5.11 of the
aforementioned COA Circular, which required the submission of the approved PIP
to COA at least ten days before the scheduled start of the physical count.
3.6 It has also come to our attention that the members of the inventory committee had
varying schedules and workloads, which hindered them from completing the one-
time cleansing procedures. Apparently, temporary relief from their regular
functions was not implemented, as other workloads were also given priority. Due
to these constraints, they were unable to finish the process. It is crucial that the
committee prioritizes conducting the physical inventory until it is completed, as
required in Section 5.3 of the Circular mentioned above.
3.7 Moreover, we noted that the Inventory Committee has already begun physically
conducting an inventory of all of the Municipal Government’s movable properties
and has prepared the RPCPPE for movable properties only. However, our
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