Incorrect recognition of meals and snacks - ₱594,689.00
6. Expenditures totaling ₱594,689.00 incurred for serving meals and snacks during
various gatherings, such as public hearing, capability building, women’s month
celebration, and planning, were incorrectly recorded as Other Maintenance and
Operating Expenses (5-02-99-990), instead of Training Expenses (5-02-02-010) or
Extraordinary and Miscellaneous Expenses (5-02-10-030), which is inconsistent
with COA Circular No. 2015-009, dated December 1, 2015, and negatively impacts
the effectiveness of financial information available for decision-making by
Management.
6.1 Paragraph 15 of the International Public Sector Accounting Standards 1 clarifies
that the objectives of a general-purpose financial statement are to provide
information about the financial position, financial performance, and cash flows of
an entity that is useful to users in making and evaluating decisions about the
allocation of resources. In the public sector, more specifically, the purpose of
financial reporting is mainly to provide information useful for decision making and
to demonstrate accountability of the government agency.
6.2 In this regard, the Commission on Audit is responsible for designing the Chart of
Accounts for government agencies, enabling agency heads to review their activities
according to selected areas of responsibility and allowing for a clearer definition
of obligation accounting, which leads to more precise budgetary controls. Thus, it
issued COA Circular No. 2015-009, dated December 1, 2015, to prescribe a
uniform chart of accounts for local government units. Annex A of the [said]
Circular defines the following accounts:
Account Account Description
No.
Other Maintenance and 5-02-99-990 Used to record expenses not falling
Operating Expenses under any of the specific
maintenance and other operating
expense accounts.
Training Expenses 5-02-02-010 Used to record the costs incurred
for the participation/attendance in
and conduct of trainings,
conventions and
seminars/workshops. It includes
training fees, honoraria of lecturers,
cost of handouts, supplies,
materials, snacks and all other
expenses related to training.
Extraordinary and 5-02-10-030 Used to recognize the amount paid
Miscellaneous Expenses for expenses incidental to the
performance of official functions,
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