By: Gerome Dalipe
STATE auditors have asked the Iloilo City Government to review the recording of its financial obligations to its suppliers or contractors.
In its annual report, the Commission on Audit (COA) urged the City Government to at least “exert effort” in determining its “other payables” account amounting to P138.26 million in 2018.
“In addition, failure to use the proper accounts in the recording of transactions could result in the inaccurate balances of accounts in the financial statements which can give management and other users misleading information necessary in their decision making,” the COA report read.
The auditors, in their annual report of the City’s financial transactions for 2018, said the City’s financial obligations to its suppliers or contractors are “doubtful” due to some errors in the subsidiary ledger of account balances.
These include unreconciled or lack of detail amounting to P91.20 million; negative balances of P10.25 million; settlement of audit disallowances of (P3.66 million); and stale checks, (P.913 million).
Thus, the auditors concluded that the presence of the unreconciled and no detail and negative account balances are indications of lapses or deficiencies in the recording of transactions.
Such practice by the City Hall violated COA Circular 2015-009, which prescribes the Revised Chart of Accounts for local government units, and Presidential Decree 1445, or the Government Auditing Code of the Philippines.
Thus, these affect the fair presentation of the affected accounts in the financial statements, the auditors noted.
In their report, the auditors asked the city accountant to exert efforts to trace and determine the unreconciled subsidiary ledger account balances.
The accountant is also tasked to review and analyze the lapses or errors in the recording of payables particularly those with negative balances, stale checks, and settlement of audit disallowances, among others.
The city accountant is also urged to adhere strictly to COA Circular 2015-009 in the use of the prescribed accounts in the recording of transactions to ensure accuracy and reliability of the accounts in the financial statements.
