supported by detailed records for each item. Regular purchases shall be recorded
through the inventory account, and issuances recognized as they occur. However,
purchases made from the petty cash fund for immediate use or stock shall be
directly charged to the appropriate expense accounts.
4.2 In CY 2024, Management requested the purchase of accountable forms,
agricultural and marine supplies, animal/zoological supplies, drugs and medicines,
medical, dental, and laboratory supplies, office supplies, welfare goods, and other
supplies and materials. Payments thereof were directly recorded in the books as
outright expenses by debiting the related expense account, as summarized below:
Account Amount
Other Supplies and Materials Expenses ₱ 2,178,346.00
Drugs and Medicines Expenses 1,900,559.30
Office Supplies Expenses 1,366,808.06
Welfare Goods Expenses 517,700.00
Agricultural and Marine Supplies Expenses 498,859.00
Medical, Dental, and Laboratory Supplies Expenses 414,006.40
Animal/ Zoological Supplies Expenses 259,677.00
Accountable Forms Expenses 37,612.00
Total ₱ 7,173,567.76
4.3 Our review of the DV’s supporting documents revealed that it was not supported
by lists or records documenting the distribution or consumption of the above
supplies.
4.4 The Accountant explained that these were directly issued to end-users upon receipt
due to the unavailability of a storage room. She added that the medical, dental, and
laboratory supplies expenses were expensed outright upon adoption of the accrual
system of BIR.
4.5 As a result of the foregoing, the stock balance could not be readily determined,
while the inventory account balances could not be ascertained, which could result
in the misstatement of inventory and expense accounts at the end of the year.
4.6 We recommended and Management agreed to install internal control
mechanisms by using the RIS to request supplies and materials from stock
and to consolidate them in the SSMI, which shall be submitted to the
Municipal Accountant for recording in the appropriate expense accounts for
the supplies consumed.
4.7 We further recommended and Management agreed to establish a secure and
appropriate storage facility for supplies and materials to facilitate proper
inventory management and control.
4.8 Lastly, we recommended and the Municipal Accountant agreed to stop the
practice of recording purchases of supplies and materials directly to expense
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