By: Gerome Dalipe
State auditors called out the Iloilo City Accounting Office over erroneous posting of remittance due to the Bureau of Internal Revenue (BIR) amounting to P13.79 million in 2018.
In their annual report, the auditors said the City’s lapses in the posting of transactions due to BIR account led to unreconciled account balances of P742,702.44.
Likewise, city accountant’s over or under remittances and non-remittance of prior years’ balances amounting to P793,474.10, and P5,825,204.23 respectively.
This practice “might affect the reliability and accuracy of the City’s account balance,” the auditors said.
Verification of the City Government’s financial statements and its supporting schedules, including the subsidiary ledgers as of Dec. 31, 2018 revealed that obligations to BIR account totalling P13,792,899.32.
These dues include unreconciled balances amounting to P742,702.44 and negative balances totaling P793,474.10.
Sec. 251 of Republic Act 8424 (Tax Reform Act of 1997) provides that any person who willfully fails to withhold such tax, or account for and remit such tax will be liable upon conviction to a penalty equal to the total amount of the tax not withheld, or not accounted for and remitted.
Likewise, the auditors discovered the subsidiary ledgers showed the unreconciled balances in prior years’ balances continued since 2006 and were just carried in the books of account.
Such malpractice ran contrast to Section 2.80(A) of Revenue Regulations No.02-98 and Section 251 of R.A. No. 8424, thus affecting the reliability and accuracy of the account balance.
“The existence of negative and unreconciled balances in the SLs of the due to BIR account are indications of erroneous entries resulting in doubtful accuracy and reliability of the affected accounts in the financial statements,” read the COA report.
In the report, the auditors asked the city accountant to review and reconcile the withheld and to ensure that the correct amount of taxes are withheld and remitted to the BIR.
The city accountant is also urged to review thoroughly the journal entries made before posting the same in the subsidiary ledgers to ensure accurate recording of transactions and reliable balances of accounts.
