5.4 Given the previous table, the accounting entries illustrating the use of the unspent
LDRRMF would be as follows:
LGU Books
Particulars General Fund Trust Fund
Dr. Expenses
Use of the unspent LDRRMF -
Cr. Cash
Dr. Trust Liabilities–DRRMF
Cr. Transfers from Unspent
At the end of the year, reporting date -
Current Year DRRM
Funds to the Trust Funds
Dr. Transfers from Unspent
Current Year DRRM
Closing -
Funds to the Trust Funds
Cr. Expenses
5.5 On May 16, 2024, the Municipal Development Council (MDC) passed Resolution
No. 5, s. 2024, to reprogram the CY 2019 to 2023 unexpended Quick Response Fund
(QRF) due to the Municipality being under a state of calamity from the impact of the
El Niño Phenomenon. The said MDC resolution was then approved in the
Sangguniang Bayan Resolution No. 2024-063, which authorized the appropriation of
the LDRRMF in the Trust Fund for the purchase of rice to mitigate the effects of the
phenomenon.
5.6 Management purchased 1,500 sacks of rice for a total of ₱4,116,000.00 for the
affected constituents of the Municipality. The payment was covered by Disbursement
Voucher No. 300-2024-07-27 and Check No. 1515811 dated July 11, 2024.
5.7 However, the related Journal Entry Voucher indicated that while the Welfare Goods
Expense account was used to record the distribution of the rice, the amount was not
closed to Trust Liabilities-DRRMF. Instead, the transaction was recorded as a credit
to Subsidy from Other Funds, inaccurately reflecting income where none should
exist. The illustrative accounting entries above were not adhered to. Consequently,
proper accounting of the transaction was not ensured.
5.8 We recommended and the Municipal Accountant agreed to strictly adhere to the
illustrative accounting entries prescribed under COA Circular Nos. 2012-002
and 2015-009 in recording the utilization of the unspent LDRRMF to ensure
proper accounting and accurate financial reporting of trust fund transactions.
5.9 The Municipal Accountant had submitted Unnumbered JEV to rectify the erroneous
entries.
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