6.11. We recommended and the City Mayor agreed to direct the CGSO to fully
account for the fuel purchases based on valid supporting documents, assign a
specific person to prioritize the preparation of the liquidation reports, to the
extent possible, ensure the immediate submission of the utilization reports to the
CAO, and pinpoint responsibility for any fuel that cannot be accounted for.
Purchases of supplies and materials directly recorded as outright expenses - ₱20,835,818.81
7. Inventory procedures for the procurement of supplies and materials totaling
₱20,835,818.81 were not in accordance with Sections 114, 120, 121, and 122, Chapter
7 of the Manual on NGAS for LGUs, Volume I, resulting in an understatement of the
inventory and an overstatement of the City’s expense accounts, a breakdown of
internal controls in property and supply management, and an increased risk of
exposing unissued supplies to loss or misuse.
7.1. Section 114, Chapter 7 of the NGAS Manual for LGUs, Volume I provides the basic
accounting principles to be followed in recording the procured supplies and materials,
viz.:
Sec. 114. Perpetual Inventory Method. Purchase of supplies and materials
for stock, regardless of whether or not they are consumed within the
accounting period, shall be recorded as inventory following the perpetual
inventory method. Under the perpetual inventory method, an inventory
control account is maintained in the General Ledger on a current basis. In
addition, detailed inventory records are maintained for each inventory item.
Regular purchases shall be coursed thru the inventory account and issuances
thereof shall be recorded as they take place, except those purchased out of the
petty cash fund which shall be for immediate use and for stock in which case
shall be charged immediately to the appropriate expense accounts.
7.2. Moreover, Sections 120 and 121 of the same Manual provide the guidelines for
recording the delivered supplies and their issuances in the books of the accounts
(please see paragraphs 3.1 for the exact provisions).
7.3. Finally, Section 122 clearly outlines the general procedures of the inventory system
and identifies the responsible person or unit.
7.4. Our review of the City’s accounting records revealed that the City spent a total of
₱20,835,818.81 on various supplies and materials in CY 2024. The summary per fund
is presented below, along with corresponding details in the attached annexes.
Account
No. Account Title GF TF Total
Code
Office Supplies Expenses
1 1-04-04-010 ₱5,385,860.73 0.00 ₱5,385,860.73
(Appendix G-1)
Accountable Forms
2 1-04-04-020 554,690.00 0.00 554,690.00
Expenses (Appendix G-2)
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