the measurement criteria of IPSAS 27. Specifically, as previously discussed,
Management has not provided a grouping of biological assets based on
significant attributes, the selection of attributes used in the market as a basis
for pricing, identification of a relevant market and quoted prices, and other
reference prices when active markets do not exist.
4.23 As a result, the accuracy of the breeding stock accounts is doubtful. Similarly,
gains or losses arising from the initial recognition and changes in the fair value
less cost to sell during the period have likely been misstated. However, the
extent of these misstatements cannot be determined due to the absence of the
necessary information. The noncompliance with the prescribed measurement
standards affects the reliability of the affected accounts in the financial position
and performance.
4.24 We recommended and the Provincial Agriculturist and the Provincial
Veterinarian agreed to complete the inventory of all breeding stocks and
provide the Provincial Accountant and the Audit Team with the results of
the physical count, including information on the prevailing fair market
value and cost to sell for each item as of the reporting date.
4.25 We further recommended and the Provincial Accountant agreed to: (a)
prepare the necessary adjusting entries to record any changes in the fair
market value less cost to sell of the breeding stock, including births of
offspring or dispositions, based on the required information to comply
with the measurement criteria of IPSAS 27; and (b) maintain the Work,
Other Animals, and Breeding Stocks Ledger Card that contains all
relevant details, including information on the acquisition, births of
offspring, and dispositions of breeding stocks.
4.26 Finally, we recommended and Management agreed that the Provincial
Accountant’s Office (PAccO), in coordination with the Office of the
Provincial Agriculture (OPA) and the Office of the Provincial
Veterinarian (OPV), design and implement the necessary accounting
policies and procedures to strengthen internal controls over the Provincial
Government’s biological assets. These policies include provisions for
ensuring the timely flow of relevant accounting information concerning
biological assets from the operating units to the PAccO, thereby enhancing
the accuracy and accountability for succeeding years.
Misclassification of Service Drop Wire Resulting in Overstatement of CIP Accounts
5. Service drop wires procured by the Provincial Government for distribution to
various barangays were erroneously recorded as Construction in Progress (CIP)-
Buildings and Other Structures instead of Construction Materials for
Distribution, contrary to paragraph 11 of the IPSAS 12, resulting in the
overstatement of the CIP accounts by ₱11,495,167.80 and the understatement of
the Inventory and Expense accounts by an undetermined amount, pending
submission of the Inventory Transfer Report (ITR).
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