The Local Finance Committee and other department heads in the city government of Baguio were directed to review the city’s financial statement ending December 31, 2018 after state auditors issued a qualified observation on five transactions.
Mayor Mauricio Domogan issued Memorandum No. 156, series of 2019, after receiving the Commission on Audit’s report on May 24, 2019 expressing its qualified opinion on “the fairness of presentation of the financial statements of the city due to uncertainty in the validity and accuracy of the balance of the Property, Plant and Equipment (PPE) account amounting to P1,868,705,928.71 due to a net discrepancy of P152,277,389.29 between the accounting and property records.”
Domogan directed city officials to immediately review and conduct measures to rectify the audit observations as pointed out by COA within 60 days upon receipt of his order.
The audit commission was uncertain on the unaccounted balance of the PPE marked as “for reconciliation” amounting to P181.619 million in the financial statements of the city government.
It was also observed that a property was recorded in the General Ledger but not in the Report of Count of Property, Plant and Equipment (RCPPE) amounting to P181.158 million.
Likewise, COA noted an unrecorded property amounting to P170.744 million was included in the report on RCPPE physical count and that there was inconsistent acquisition cost of various properties between the accounting ad property records amounting to P39.805 million.
Atty. Eden Rafanan, regional director of the COA recommended that the City Accounting Office and the General Services Offices should reconcile their records to ensure the correctness and reliability of the PPE account balance.
Another COA observation was the city’s Local Road Network Inventory account in 2015 which was targeted to be 75 percent complete in 2018 but was not met because the Local Road Inventory Report and the corresponding Road Map were not prepared.
“We have recommended that the City general Services Officer and the City Engineer coordinate and facilitate the immediate preparation of the City’s Local Road Inventory Report and the corresponding Road Map in accordance with the costing and timelines provided under COA Circular 2015-008 and to submit the same to the City Accountant for proper recording,” the COA-CAR stated.
Along with the road network component, COA recommends the provision for a depreciation and impairment losses of the city’s assets for proper valuation and recording which will avoid mistatement of pertinent expense and asset accounts.
COA-CAR have also computed a total of P667.877 million appropriated in the Local Development Fund that were unutilized, “out of which 45.50% or P303,161,250 pertained to calendar years 2004 to 2017 for the implementation of 172 projects and 54.47% or P362,716,528 was appropriated in calendar year 2018 to fund 123 projects.”
There were also 27 activities included in the 2018 Local Disaster Risk Reduction and Management Fund Investment Plan with a total budgeted amount of P11.116 million not implemented due to delays in the bidding process and on the procurement activities.
The audit commission recommends that the concerned office shall coordinate with Bids and Awards Committee to address specific issues that causes the delay in the bidding process for infrastructure projects as well as indicate the complete specifications in the purchase requests to facilitate timely procurement of disaster response and rescue equipment.
A final and executory audit disallowances and audit charges amounting to P2,034,842.32 and P3,479,925.31, respectively, for a total of P5,514,767.63 remain unsettled by the city government according to COA.
The agency also observed that of the 72 audit recommendations embodied in the previous years’ audit reports, 28 were fully implement by the city government, 32 were partially implemented and 12 were not implemented during 2018.**By Jessa Mardy P. Samidan
