COA sees P1.5B discrepancy in Naga’s assets vs actual count

By Mark A. Gomez

A discrepancy of over P1.5 billion between the financial statement and the physical count of assets of the city government of Naga was noted by the Commission of Audit (COA) in its latest audit report, which was received by the city on June 28 this year.

The COA audit report said the financial statements submitted by the cify government is not in accordance with Section C.3, Chapter V of the Manual on Property Custodianship, which provides that after the physical inventory taking, the Inventory Committee shall reconcile the results of the count with the property and accounting records .

The audit report shows that as of Dec. 31, 2021, the physical count and accounting records of property, plant and equipment of Naga did not tally with the financial statement and showed a total discrepancy of P1,577 billion.

Based on the city government’s report on physical count of property, plant and equipment (RPCPPE), its properties have a total amount of ₱ P3,378,813,153.41 while the balance of their financial statements (BFS) has a total amount of ₱ 4,956,125,273.93 or a discrepancy of P1.577 billion.

When asked for his comment on the audit report, Frank Mendoza, city budget office chief, said that the main reason why the amount of discrepancy ballooned to over P1.5 billion is due to the fact that the city government has not yet remove the records of the depreciated properties and it is still included in their financial statement .

For example 20 years ago, the city government implemented a road project worth P2 million, then later on it was repaired with a cost of another P 2 million. The amount that will appear on their financial statement would be P4 million even if the cost of the original road had already depreciated, Mendoza said.

He said his office is having a hard time looking for the financial records of the properties acquired by the city in the distant past, thus they cannot easily justify the depreciation of these assets without supporting documents.

Mendoza said the process of cleansing of the inventory and records of assets is on-going and it is expected to be 80 to 90 percent complete by year-end.