AUDIT OBSERVATIONS AND RECOMMENDATIONS
A. FINANCIAL AUDIT
Property, Plant, and Equipment
1. The Municipality of Vallehermoso did not effectively follow the guidelines and
procedures specified in COA Circular No. 2020-006 dated January 31, 2020,
regarding the one-time cleansing of PPE, thus affecting the fairness of presentation
of the PPE accounts amounting to ₱375,535,879.35 in the financial statements (FS) at
year-end and depriving the government’s access to reliable and useful information
for decision-making and accountability for these assets.
1.1. COA Circular No. 2020-006 dated January 31, 2020, was issued to prescribe
guidelines and procedures for inventory-taking, recognizing existing items at the
station, and addressing the disposition of nonexistent or missing Property, Plant, and
Equipment (PPE) items. The objective of this one-time cleansing of PPE accounts
for government agencies is to establish verifiable PPE balances as to existence,
condition, and accountability.
1.2. As of December 31, 2024, the FS showed a PPE balance of ₱375,535,879.35, as
follows:
Accumulated
Account Cost Depreciation Net Book Value
Immovable Properties
Land ₱ 4,513,818.03 ₱ 0.00 ₱ 4,513,818.03
Land Improvements 1,167,991.36 1,109,591.79 58,399.57
Infrastructure Assets 239,105,902.24 92,919,248.38 146,186,653.86
Buildings and Other
169,704,019.21 36,208,627.31 133,495,391.90
Structures
Construction in Progress 4,376,652.30 0.00 4,376,652.30
Subtotal – Immovable
₱418,868,383.14 ₱130,237,467.48 ₱288,630,915.66
Properties
Movable Properties
Machinery and Equipment ₱120,014,018.28 ₱ 44,832,563.49 ₱ 75,181,454.79
Transportation Equipment 30,157,214.22 21,279,151.71 8,878,062.51
Furniture, Fixtures, and
360,000.00 187,625.00 172,375.00
Books
Other Property, Plant, and
7,391,177.85 4,718,106.46 2,673,071.39
Equipment
Subtotal – Movable
₱157,922,410.35 ₱ 71,017,446.66 ₱ 86,904,963.69
Properties
Total PPE ₱576,790,793.49 ₱201,254,914.14 ₱375,535,879.35
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