After COA report MCWD assures: P61 millio intact

CEBU, Philippines —  The Metro Cebu Water District (MCWD) has clarified that the P61 million in unreconciled funds noted by the Commission on Audit (COA) remain “intact” and “accounted for.”

The statement from MCWD was sent to the media following a report that a P61 million sum was "missing" from MCWD's books, as stated in the report by the state auditors.

"We assure our consumers and the public that MCWD's funds remain secure with our depository banks, and all disbursements are made with the utmost prudence," said the statement, signed by General Manager Edgardo Donoso.

According to MCWD, the report caused confusion among the public, leading to the misconception that these funds were actually "missing." They emphasized that the funds "have remained intact and fully accounted for" in MCWD's depository bank account.

They added that the reconciliation differences noted by COA were due to delayed recording of funds.

"We explained that the delay in recording was due to the time needed to verify pertinent documents from our depository bank," they said.

MCWD further assured that it remains committed to maintaining the integrity and reliability of its financial statements. They also mentioned that they have implemented measures to ensure the fair and timely reconciliation of accounts.

These measures include strengthening the reconciliation processes to promptly detect and address discrepancies in bank transactions, as well as strictly issuing monthly financial statements by the 20th of the following month to facilitate timely account updates.

"We urge the public to refrain from making unfounded accusations and assure everyone once again that MCWD's funds are properly accounted for and secure," their statement also reads.

In the COA report for 2023, as stated on their website, under the Auditor's Report on the Financial Statements, it was indicated that reconciling items presented in the Bank Reconciliation Statement as of December 31, 2023 in the net amount of P61,955,793.62 had not been recorded or posted in the books of accounts as of December 31, 2023.

It added that this resulted in the understatement of the reported "Cash in Bank - Local Currency" account by the same amount, contrary to Paragraph 15 of the Philippine Accounting Standards (PAS) 1.

Under the section for Significant Audit Observations and Recommendations, COA also noted that the dormant "Other Receivables" account, totaling P64,653,612.02, remained in the books as of December 31, 2023.

They added that this occurred because the Water District did not initiate the "derecognition" of receivables that had been outstanding for more than 10 years, contrary to COA Circular No. 2023-008, dated August 17, 2023.

They also noted that MCWD did not provide an Allowance for Impairment for the Other Receivables account, which affected the fair presentation of the Financial Statements as prescribed under PAS number 1.