COA report says Mandaue City property not properly accounted

CEBU, Philippines – The Commission on Audit-7 has found out that there was no proper inventory of all properties owned by the Mandaue City government -this because they do not have permanent personnel to keep track.

In its audit report conducted in 2009 but just recently released, COA found out there was also no preparation and submission of the updated inventory reports with the accounting records.

During their review COA found out that the inventory report for motor vehicles was not separated from the inventory report for construction and heavy equipment.

The condition of the properties was not stated under the "Remarks" column of the report considering that unserviceable properties should be classified under the "other assets" account and a separate report will be prepared.

Some properties were also erroneously reported in the inventory report such as Information Technology equipment being reported as office equipment, a description of hospital equipment as technical and scientific equipment and vice-versa.

Property numbers were also not indicated in the reports as some accounts had material difference in the amount as per ledger and per inventory report.

Subsidiary records in the accounting office were also not completed causing difficulty in the reconciliation. Comparison of the totals per inventory report and balance per books as of December 31, 2008 amounting to P555,777,557.54 showed a substantial difference of P295,768.579.27.

COA also said that the Mandaue City Department of General Services did not submit the required report on the physical count of the Property, Plant and Equipment for the city government as of December 31, 2009 despite the reminder sent for its submission.

What the DGS only submitted to COA was only the report of the inventory conducted in their own department only and not for the city.

During the exit conference, the officer-in-charge of the DGS explained that they only submitted the report for their office because they thought that the submission of inventory reports will be done by office.

He further said that the property section has no permanent personnel who will take charge in the preparation of reports and reconciliation of their records and for the unserviceable properties, these were not yet appraised by the appraisal committee.

Nenita Regencia, acting city accountant also reasoned out that one of the reasons for non-reconciliation is that some items classified as supplies and materials were recorded as asset accounts by the supply office and included in their inventory reports.

COA recommended that Dario Mago, officer-in-charge of the DGS, to conduct a physical count of properties owned by the city and to prepare and submit to the state auditor an updated inventory report of the physical count of the properties not later than every January 31 of each year as stipulated in Section 24 of the New Government Accounting System.

COA further recommended that the said official should also see to it that the properties are correctly recorded in the corresponding inventory report per account.

Those unserviceable properties will also be reported in the inventory and Inspection Report of unserviceable properties.

COA also recommended assigning permanent personnel of DGS and accounting office to give priority to the reconciliation of the two records and the DGS to maintain a perpetual inventory of records comprising of stock cards and property cards for supplies, property, plant and equipment in their custody. - /BRP (FREEMAN)