2. The Accounts Payable balance of ₱4,479,781.22 was not fairly presented due to the
inclusion of ₱428,893.60 which remained outstanding for more than two years and was
not reverted to the unappropriated surplus, thus, may no longer represent valid claims.
3. Property, Plant and Equipment (PPE) acquired in CY 2024 totaling ₱408,532.00 was
erroneously recognized in the books of accounts as Other Supplies and Materials
Inventory instead of the appropriate PPE accounts, hence, both the asset accounts and the
related depreciation expense accounts were overstated and understated, respectively, as of
December 31, 2024.
Significant Findings and Recommendations
The following are the significant observations and recommendations in the audit and/or
evaluation of the operations of the Municipality for CY 2024. These and other audit
observations discussed by the Audit Team with Management in an exit conference on June
19, 2025, are fully presented in Part II of this Report.
1. Tangible items acquired in CY 2024 with a total cost of ₱627,373.00 were
incorrectly classified under "Other Supplies and Materials Inventory" instead of
under the appropriate semi-expendable property accounts. Furthermore, these
items were neither expensed upon issuance nor supported by the complete set of
prescribed forms and records. These lapses may result in misstatements of semi-
expendable property and expense accounts, thereby affecting the accuracy and
reliability of the financial statements at year-end.
We recommended that the Municipal Accountant strictly adhere to the accounting and
reporting guidelines prescribed under COA Circular No. 2024-006. Specifically, tangible
items costing below ₱50,000.00 and meeting the definition of semi-expendable property
should be:
• Recorded under the appropriate semi-expendable inventory accounts upon
acquisition, and
• Recognized as an expense upon issuance to end-users, with proper accounting entries
reflected in the books of accounts.
We further recommended that the Municipal Treasurer, Municipal Accountant, and all
accountable officers ensure the preparation, maintenance, and use of all required forms,
registries, and reports for the proper tracking, issuance, transfer, return, and disposal of
semi-expendable properties, as enumerated in Section 4.7 of COA Circular No. 2024-
006.
2. The cost of 1,500 sacks of rice, amounting to ₱4,116,000.00, charged to the previous
years’ unexpended LDRRMF was recognized as credit to Subsidy from Other
Funds instead of closing the recorded Welfare Goods Expenses account to the Trust
Fund Liabilities-DRRMF account, thus, proper accounting was not assured.
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