The Commission on Audit (COA) said the Cebu Provincial Governments assets, expenses and payable accounts were found to be understated by P60.4 million last year.
This was because the goods that the provincial government purchased, delivered and accepted were not booked as accounts payable, the COA said.
All purchases were already paid, but it was recorded in the accounting books either as expense of asset account.
COA said the accounting system manual for local government units (LGUs) stated that liability shall be recognized at the time goods and services are accepted or rendered, and supplier’s bills are received.
Acting Cebu Provincial Accountant Emmanuel Guial said he issued a memorandum last December 6, requiring the different departments to submit documents on their payables.
Guial said it’s beyond his control if not all documents were submitted for recording.
COA told them to make appropriate adjustments in the following year to correct the expense accounts used in recording the payment of the items purchased. Auditors said it will be booked as the prior year’s adjustment.
COA, in its findings, also said Cebu Province did not strictly comply with the Government Procurement Reform Act, or Republic Act (RA) 9184.
The bids and awards committee (BAC), which plays a major role in the procurement process was advised to follow the law.
State auditors said members of BAC who are in-charge of advertising and recommending the award of contracts should be familiar with and knowledgeable on the law.
COA said it is “mandatory upon all procuring entitles,”
There were nine deficiencies noted for the 2010 procurement procedures of the Provincial Government.
Among these are the lack of procurement plan and unreasonable delay in the period of action pertaining to procurement activities, such as issuances of notices of awards.