4.5. Our examination of the financial statements showed that the biological assets account
balance of ₱379,219.80 remained unchanged for more than 10 years ending
December 31, 2024, composed of the following:
Biological Asset Quantity Amount
Breeding Stocks – 10801010
Unspecified livestock (prior to CY 2013) could not be determined ₱ 379,219.80
Table 1. Biological Assets
4.6. Being dormant for more than 10 years is unusual for these accounts since the fair
value of the animals should be regularly monitored based on physical and price
changes.
4.7. Our inquiry with the Municipal Accountant revealed that breeding stocks were not
reflected at fair value less costs to sell at the end of every reporting period due to the
Municipal Agricultural Office’s inability to submit the required inventory and the
prevailing market price for each item. He added that he could no longer provide the
composition of the breeding stocks since these were merely carried forward as
beginning balances.
4.8. In a phone inquiry, the Municipal Agriculturist explained that he was unaware of the
requirement to submit the prevailing market prices of breeding stocks at the end of
each reporting period to the Municipal Accountant. He added that due to the absence
of supporting documents, he could no longer determine the composition of the
₱379,219.80 balance. As a result, changes in market value, births, and reductions due
to death or distribution were not recorded in the books.
4.9. Due to the foregoing, the existence and condition of these biological assets cannot be
ascertained. Furthermore, the said accounts were not reported at fair value less cost
to sell as of December 31, 2024, in consonance with the aforementioned IPSAS,
thereby not presenting fairly the balances of the Breeding Stocks.
4.10. We recommended and the Municipal Agriculturist agreed to:
4.10.1. Conduct an inventory of breeding stocks as of the end of each year and
thereafter render a report including the fair market value of these items
to the Municipal Accountant, for proper recording in the books of the
LGU; and
4.10.2. Keep a systematic record of the Municipality’s breeding stocks,
reporting births, deaths, and disposal, and in case of death and disposal,
facilitate requests for relief of accountability in accordance with COA
Circular No. 92-386 dated October 20, 1992, to appropriately drop the
amount from the books.
4.11. We further recommended and the Municipal Accountant agreed to disclose the
composition of the Biological Assets account in the Notes to Financial Statements
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