The Commission on Audit (COA) flagged the Candoni municipal government in Negros Occidental for various financial management issues, among them inconsistent accounting of property and equipment, and unremitted collections.
In a report covering financial activities in 2023, the audit agency found a glaring P188.934 million difference between accounting reports and the town’s Report on the Physical Count of Property, Plant and Equipment as of the end of that year.
The report reflected a total net book value of P453.197 million in land, infrastructure, machinery, transport equipment and other assets. Meanwhile, the actual asset count was valued at just P264.263 million.
The commission said properties recorded in the LGU’s official report “were not found by the inventory team,” thus the inconsistency. It said such difference “casts doubt on the reliability of PPE (property, plant and equipment) balances… affecting the fair presentation of the PPE accounts in the financial statements.”
The COA also flagged notable and consistent delays in the remittance of collections and deposits, “raising concerns about cash management practices and potential impacts on liquidity and financial reporting accuracy.” The delays varied from between 10 days to as long as 100 days.
“Delayed remittance affects the LGU’s cash flow management, potentially leading to inaccuracies in cash forecasts and liquidity planning. It may also result in missed project implementation opportunities or the need for additional financing to cover operational expenses,” the commission said in a 2024 report.
It traced the delays to various factors, including “inadequate internal controls over cash handling and reconciliation processes” as receipts are not validated, and insufficient training among staff members.”
On the COA’s urging, the Candoni LGU agreed to require collectors to remit collections in a timely manner and to “implement robust controls and monitoring mechanisms” to prevent delays.
The audit agency also found that the municipal government charged P1.214 million in unpaid personnel services to Advances for Payroll—a cash advance not reflected in the town’s Statement of Financial Position as of the end of 2023.
Apparently, the amount was “inadvertently debited” to Advances for Payroll instead of personnel services.
“The recording of these unpaid expenses in the books overstates the advances for payroll and equity accounts,” the commission said.
The COA recommended that the municipal accountant make sure to correctly record and reconcile balances and undertake a thorough year-end review.