8.6 Due to the incorrect classification of the capital gains tax, documentary stamp tax,
and property transfer tax as expenses instead of capitalizing them as part of the
land’s cost, the PPE account was understated, while expenses were overstated by
₱480,012.50
8.7 We recommended and the Municipal Accountant agreed to prepare an
appropriate journal entry to reclassify the taxes as part of the cost of land to
ensure proper asset valuation and compliance with IPSAS 17.
8.8 On May 19, 2025, the Municipal Accountant submitted Journal Entry Voucher
(JEV) No. 2025-01-002040, which reclassified the taxes paid as part of the cost of
land.
Late submission of year-end financial statements
9. 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.
9.1 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.
9.2 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 Sec. 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.
9.3 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.
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