2. The existence, validity, and correctness of the Inventory accounts totalling ₱3,256,023.87
as of December 31, 2024, have not been established due to (a) non-conduct of the year-end
physical count, (b) non-compliance with the Perpetual Inventory Method, and (c) non-
maintenance of supplies ledger cards and stock cards by the Offices of the Municipal
Accountant and Municipal Treasurer, respectively, thereby, affecting the fairness of the
presentation of these accounts in the FS.
3. Biological Assets valued at ₱379,219.80 that have been in the books for more than 10
years, were not stated at fair value as of the reporting date due to the non-submission of the
Inventory Report of Breeding Stocks and the prevailing market price for each item by the
Municipal Agriculturist to the Municipal Accountant, thus, rendering the existence and
valuation of the account presented in the FS doubtful and unreliable.
Significant Audit Observations and Recommendations
In addition to the above-noted deficiencies, below are the significant audit observations and
recommendations noted in the course of the audit:
1. Monthly Bank Reconciliation Statements (BRS) for CY 2024 were not prepared and
submitted to the Office of the Auditor, thus the total balance of the accounts Cash in Bank-
Local Currency Current (1-01-02-010) and Cash in Bank-Local Currency Savings (1-01-
02-020) could not be validated, hindering the timely reconciliation book and bank balances
and the detection of errors and/or fraud, if any.
We recommended that the Municipal Accountant prepare and submit to the Audit Team
the monthly BRS pursuant to Sections 3.2 and 3.4 of COA Circular No. 96-011 dated
October 2, 1996.
We further recommended that the Municipal Accountant and Municipal Treasurer closely
coordinate and regularly reconcile their respective records for early detection and
correction of adjustments and errors, if any, pursuant to Section 74 of P.D. No. 1445.
2. The accuracy and reliability of the Local Road Network (LRN) account totaling
₱149,095,838.93 could not be ascertained due to various deficiencies noted, thereby
affecting the fair presentation of the account in the financial statements.
We recommended that the:
a. Inventory Committee conduct the physical count of the Municipality’s local roads and
thereafter, prepare and submit the RPCLRN to the Audit Team, Municipal Accountant,
and Supply Officer;
b. Municipal Engineer provide the Municipal Accountant and the Supply Officer with a
complete description and segregation of road components for road projects;
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