1.10.4. Determine the status of implementation of the projects recorded under
the CIP–Land Improvements account and prepare the necessary
adjusting entries accordingly.
1.11. We further recommended that the Municipal Accountant and the Municipal
Engineer establish a regular monitoring process of the Municipality’s CIP
accounts to ensure the timely transfer of completed projects to the appropriate
PPE accounts.
1.12. The Municipal Accountant has already started transferring projects from the CIP
accounts to their appropriate PPE accounts and has promised to record the
corresponding current and prior year depreciation expenses by the end of CY 2025.
She added that they will begin transferring the projects from the CIP account
immediately after the final payment to the contractor, supported by the required
documents.
Accounts Payable
2. The Accounts Payable balances of ₱25,680,544.86 was not fairly presented due to
the inclusion of undocumented unpaid obligations amounting to ₱2,084,423.19, of
which ₱1,761,964.63 remained outstanding for more than two years and were
neither reverted to the unappropriated surplus, contrary to Section 98 of
Presidential Decree No. 1445 and Section 9, Volume I, of the New Government
Accounting System (NGAS) Manual, thus, may no longer represent valid claims.
2.1. The NGAS Manual for Local Government Units (LGUs) was prescribed to ensure
proper accounting of all financial transactions of the LGUs. Section 116 thereof
provides the requisition procedures for supplies, while Section 121 provides the
reporting on the issuance of supplies/materials, viz:
2.2. COA Circular No. 2015-009 dated December 1, 2015, defines Accounts Payable as
an account used to record the receipt of goods or services on account in the normal
course of trade and business operations. Accordingly, Accounts Payable are
considered current liabilities, as they meet the criteria set forth under paragraph 83
of the International Public Sector Accounting Standard (IPSAS) 1, which states that
a liability should be classified as current when it is expected to be settled in the
normal course of the entity’s operating cycle or is due to be settled months after the
reporting date.
2.3. Relative thereto, Section 98 of the P.D. No. 1445 provides that any unliquidated
balance of accounts payable in the books may be reverted to the unappropriated
surplus of the general fund, provided that these have been outstanding for two years
or more and against which no actual claims, administrative or judicial, have been
filed or which are not covered by perfected contracts on record.
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