CEBU - The Commission on Audit-7 said the physical inventory conducted by the Sogod Municipal Government on its property, plant and equipment worth more than P74 million was not properly recorded last year, raising questions on the validity of the said assets.
The lapse, according to the latest audit report of COA, was a clear violation of the accounting system for local government units.
State auditors also raised doubt on the town’s balances per cashbooks worth millions of pesos since the accounts varied from its balances per general ledger as of Dec. 31, 2007.
The state auditors already sent an audit memorandum observation to Sogod Mayor Thaddeus Durano but it remained unclear whether the town’s chief executive has responded to it or not.
Verification made by state auditors showed that the town government recorded P74.710 million in property, plant and equipment, which represents about 84 percent of the municipality’s total assets.
However, COA said that the validity of the above assets “cannot be actually established” due to the failure to the town government to report physical account of the properties and equipment.
It was learned that Durano even formed a committee that conducted a physical inventory of the town’s assets.
“…The balance of the asset property, plant and equipment…could not be validated through comparison, cross checking against or reconciliation with the total cost per report to prove its physical existence,” the COA report said.
Durano has been asked by the auditors to prepare and submit report of the town’s assets to them not later than Jan.31 this year.
Likewise, the commission also disclosed the town’s failure to reconcile its balance per bank against its balance per book.
Comparison made by state auditors in the general fund showed that the balances in cashbooks was P2, 412,578 while in the balances per general ledger, the amount has reached P3,065,315 or a significant difference of P652,737.
In the trust fund, the town recorded P1, 937,593 under its cashbook balances while there was P2,022,421 recorded in the general ledger balance, or a difference of P84, 827.
“It was noted that the general ledger had bigger balances than the cashbooks in the general funds and in the trust fund. These differences indicate doubt as to the accuracy of the balances of the accounts,” state auditors added.
COA also said there were no reconciliation statements prepared by the municipal accountants on the above transaction.
The commission urged Mayor Durano to order the town accountant to prepare a monthly statement of the reconciliation of balances for cash in bank accounts between the town treasurer’s cashbook and the general ledger balances.
COA said they already issued a memo to the mayor for him to order the municipal accountant to reconcile the huge differences in the funds. — Garry B. Lao/WAB (THE FREEMAN)