City Hall told to hasten classification of capital asset accounts

By: Gerome Dalipe

THE Commission on Audit (COA) has ordered the Iloilo City Government to hasten the classification of its account containing capital assets amounting to P798.71-million in 2018.

In its annual report, the state auditors doubted the reliability of the City Government’s account balances on property, plant, and equipment (PPE) as of Dec. 31, 2018.

That’s because the balance sheets were not supported with schedules or details of the classification of the property, plant, and equipment, the auditors said.

Such ran contrast to the provisions of the New Government Auditing System Manual for local government units, thus may result in doubtful reliability of the account balances in the financial statements.

Section 205 of the Local Government Code also requires the local assessor to prepare and maintain an assessment roll of all real property, whether taxable or exempt, within its jurisdiction.

Likewise, Sec. 374 of the Local Government Code of 1991 requires every LGU to provide for the establishment of an archival system to ensure the safety and protection of all government property and public documents.

Based on the review, auditors said the City’s financial statements and subsidiary ledgers showed property, plant, and equipment accounts have an ending balance of P5,443,684,031.56.

Of the amount, some P798,711,842.85 are not supported with schedules nor has no details.

“Un-reconciled balances of the on property, plant, and equipment accounts in the subsidiary ledgers and the financial statements imply erroneous recording of transactions, hence, casts doubt on the correctness and the reliability of the account balances in the financial statements,” read the COA report.

Likewise, the auditors asked the City Government to present more reliable property, plant, and equipment balances in the financial statements.

The city accountant and the City General Services Office are urged to expedite the identification of these property, plant, and equipment and for submission for reconciliation of records.

The General Services Office is also tasked to obtain from the City Assessor’s Office a copy of the latest assessment roll containing the list of all real properties declared owned by the City Government.

The auditors also asked the city accountant to review the entries in the property, plant, and equipment subsidiary ledgers with unidentified items.

The city accountant is tasked to make the necessary adjustments to correct the balances of affected accounts, and continuously coordinate with the City General Services Officer in the reconciliation of unidentified property, plant, and equipment.