account for all the inventory balances. Furthermore, she acknowledged that she was
not able to prepare the necessary adjusting entries due to work overload and being
preoccupied with other equally important accounting duties. Finally, the
Accounting Office also did not maintain supplies ledger cards like the GSO.
3.7. The Accountant and the General Services Officer explained that they have never
maintained supplies ledger cards and stock cards because the former assumed that the
GSO maintained the stock cards and that the same would suffice, while the latter did
not deem it necessary because the purchased inventories were immediately released
to the requisitioning office even if most of these inventories were still for further
distribution by the said office.
3.8. As a result, the balances of these inventory accounts were not fairly presented in the
financial statements because their utilization or issuance was not properly recognized
in the books, thus understating expenses and overstating the inventory accounts.
3.9. We recommended and Management agreed to comply with the following:
3.9.1. The GSO submit to the Accounting Office within 30 days from receipt of
the Audit Observation Memorandum (AOM) the SSMIs, duly supported
with the RIS and other records accounting for all the inventories
purchased in prior years that have already been utilized but still remain
recorded in the books; otherwise, accountability for any unaccounted
inventories shall be exacted from the persons to whom these were issued;
and
3.9.2. The Accounting Office retrieve the SSMIs reportedly submitted by the
GSO within 30 days from receipt of the AOM, verify their completeness,
and prepare the necessary adjusting entries to the inventory accounts, as
warranted.
3.10. Additionally, we recommended and the City Mayor agreed that henceforth,
3.10.1. The GSO and Accounting Office invariably maintain stock cards and
ledger cards, respectively, for each type of inventory to facilitate
reconciliation with the actual stocks on hand;
3.10.2. The GSO strictly comply with the proper preparation and timely
submission of the SSMI based on the RIS of the end-users, duly
supported by the distribution sheets acknowledged by the recipients of
goods for distribution; and
3.10.3. The Accounting Office immediately prepare the JEV to record the
expenditures based on the SSMI submitted by the GSO after checking its
completeness and the propriety of the attached RSIs so that the latter can
immediately rectify any deficiencies and the expenses can be recorded in
the books within the proper accounting period.
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