Estimated
Public Infrastructure Assets
Useful Life
Box Culvert (Highway Drainage) 25
Pipes Culvert 15
Rehabilitation, Repairs and Maintenance
• Concrete Re-blocking 10
• Asphalt Overlay (Asset Preservation) 5
Bridges (Major Repairs):
• Concrete 20
• Steel 10
• Lined Canals (Concrete or Grouted Riprap) 2
2.5 However, an examination of the lapsing schedule for the local road network
accounts revealed that the depreciation expense was computed by deducting a
10% residual value from the total cost of the road network and applying a
uniform estimated useful life of ten years, which is inconsistent with the above-
mentioned provisions.
2.6 On November 7, 2024, the Audit Team inquired with the Provincial Accountant
whether a Local Road Network Ledger Card (LRNLC) was maintained for
roads and their components. On November 18, 2024, the Audit Team was
informed that their office maintains subsidiary records for road networks, which
can be accessed through the Financial Management Information System
(FMIS). However, our review of the subsidiary ledger maintained in the FMIS
revealed that it only shows the debits and credits of each road network.
2.7 Item VII (a) of the Circular requires the use of the Local Road Network Ledger
Card, as outlined in the format presented in “Annex D” of the Circular. This
ledger details, among others, the cost of each road component based on the
physical count, the estimated useful life of each component, and the carrying
amount after accounting for accumulated depreciation and impairment losses.
Additionally, this subsidiary record includes the maintenance history of the road
network.
2.8 As a result of this deficiency, and in the absence of a physical inventory as noted
in the previous audit observation, the cost of each road component could not be
determined. Consequently, the accuracy of the accumulated depreciation for
each component, as well as the appropriate useful life to be applied, remains
unverified. The lack of proper documentation, the absence of detailed subsidiary
records, and non-compliance with the prescribed procedures undermine the
accuracy and transparency of financial reporting for these assets.
2.9 We recommended and the Provincial Accountant agreed to ensure the
immediate establishment and proper maintenance of LRNLC for all road
networks and their components prescribed in Annex D of COA Circular
No. 2015-008, and based on a thorough physical inventory of all road
networks and their components.
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