COA uncovers discrepancies in accounting records of Cebu megadome project

CEBU — The Commission on Audit (COA) has uncovered several discrepancies in the accounting records of the Cebu megadome project.

In its report, the COA said that the provincial government had an estimated P52 million in "missing" accounts for property and equipment and another P23 million in office supplies, drugs, dental and laboratory supplies. There were also some P21 million in unliquidated cash advances, P3 million in unrecorded shares and income and an understatement of accounts in the Cebu megadome project.

Auditors unearthed the discrepancies and erroneous entries when at least P857,000 worth of expenses incurred during the launching of the P600-million megadome project were found recorded under a "construction in progress account" at a time when the project has not even started.

Under the national government accounting system, "construction in progress" accounts include costs of assets while "under construction" accounts include materials, labor, overhead and other costs. Expenses such as license fees and bonuses paid to the contractor for completing work ahead of schedule are also added to the total cost of the project.

But the P857,000 overstated and erroneously entered accounts seem to be only the tip of the iceberg. There were also missing accounts for inventories in property, office supplies, medicines and dental and laboratory supplies worth P75.3 million.

As of December 31, 2003, ledger balances showed that the total value of the property, plant and equipment of the provincial government amounted to some P429.3 million. But from actual ledger entries, inventory showed only P377.4 million or a difference of P51.9 million.

Similar flaws amounting to P23.4 million were found in inventory reports of office supplies, drugs, medicines, and medical dental laboratories. There were reportedly several misrepresentation in ledger entries because these were not updated and there was no periodic reconciliation. The provincial board approved the P600-million megadome project in March that was to be taken from the supplemental budget. To date, the project has been shelved. — Freeman News Service