CEBU, Philippines - The Commission on Audit–7 discovered some defects in the financial transactions of the municipal government of San Fernando such as the unliquidated cash advances of its officials and workers, failure to close public infrastructures as well as failure to conduct physical count on property, plant and equipment.
In its annual latest report, the state auditors revealed that municipal officials and workers have incurred about P2.273 million in unliquidated cash advances last year.
But despite the deficiency, the town still granted additional cash advances although the previous cash advances have not been settled.
This violates COA Memorandum Circular 97-002, which the memorandum provides that “no additional cash advances shall be allowed to any official or employee unless the previous cash advance given to him is settled”.
“These cash advances were granted for the purpose of attending seminar, travel, office supplies, school activities and expenses for Suroy-Suroy sa Sugbo,” the auditors said.
The state auditors also said that granting additional cash advances and allowing these to remain outstanding for long period is not sound management practice and exposes government funds to possible risk of loss or misappropriation.
“If cash advances are already spent, their non-liquidation results in an overstatement of assets, an understatement of expenses and a corresponding overstatement of net income and government equity.”
The state auditors already informed the town officials about the deficiency but the latter reportedly remained unresponsive.
“Failure to liquidate his/her cash advance within the prescribed period shall constitute a valid cause for withholding of his salary,” COA-7 said.
The municipal government also failed to conduct physical count on property, plant and equipment (PPE) totaling to P92,536,121.69 which auditors said violated Section 124 of the National Government Accounting Manual.
The COA said that there was no inventory report was submitted by the Municipal Treasurer to support the account in the financial statements. They said that the PPE were not charged with depreciation in which the government auditors said was a violation of Section 4 of the National Government Accounting System.
It was also disclosed that the municipal accountant and treasurer did maintain the required property ledger card thus, “the existence and the amount of overstated assets and expenses of reported property, plant and equipment could not be ascertained or determined”.
During the exit conference, the municipal officials cited the “lack of personnel” for failing to conduct physical inventory of PPE.
Mayor Lakambini Reluya reportedly assigned two personnel to act as the general service officers to conduct the inventory and report preparation.
Likewise, the municipal accountant also vowed to compute the depreciation based on the Table of Useful Life.
“Coordination should be made between the accountant and the treasurer to establish the acquisition cost and estimated useful life of the property, plant and equipment. Henceforth, see to it that the current purchases should be charged with depreciation after two months from the date of purchase,” the auditors said.
Further, the municipal government failed to close public infrastructures worth more than P32 million to the government equity account and in the Registry of Public Infrastructures. — Garry B. Lao/BRP (THE FREEMAN)