The Commission on Audit (COA) has called the attention of Provincial Government of Palawan (PGP) to resolve the ‘doubtful’ and ‘unreliable’ accounts for CY 2020 stated in COA Reports.
Based on the Report the COA finds the following:
- The completeness and accuracy of the Cash-in-Bank (CIB) account balances totaling ₱5,118,061,102.26 as of December 31, 2020 is doubtful due to (a) unrecorded unadjusted transactions totaling ₱16,610,335.90 in 37 bank accounts; (b) unidentified/unaccounted amounts totaling ₱56,895,123.65 due to nonpreparation of Bank Reconciliation Statement (BRS) for 33 bank accounts; and (c) discrepancies amounting to ₱104,081,670.36 due to non-reconciliation of cashbook balances with subsidiary accounting records.
- The existence and accuracy of the Inventory account balance aggregating ₱202,076,623.86 as of December 31, 2020 are unreliable due to (a) non-conduct of physical count of inventories and for submitting an incorrect Report on Physical Count of Inventories (RPCI); (b) improperly maintained supplies ledger cards (SLC) resulting in discrepancies between the SLC and the General Ledger (GL) balances; (b) recording the issuance of 8,320 units of roof mounted individual Solar Home Systems costing ₱39,936,000.00 without complete supporting documents; and (d) inexistent Fuel, Oil & Lubricants Inventory valued in the books at ₱105,412,780.73.
- The existence, completeness and accuracy of the reported balances of Property, Plant and Equipment (PPE) and Investment Property accounts comprising 45.31 percent of the total assets of the PGP, with carrying amount of ₱7,131,302,374.20 as of December 31, 2020 are not reliable due to (a) non-conduct of annual physical inventory; (b) unidentified PPE reflected in the books at ₱442,056,252.69; abnormal/negative balances in 226 subsidiary ledgers of PPE carried in the books at ₱3,087,215.94; and (c) variance of ₱1,371,080,833.51 and ₱11,905,873.24 in the recomputation of Accumulated Depreciation in the General Fund and Special Education Fund books.
- Non-capitalization of fuel, oil and lubricants used in the construction of Road Networks amounting to ₱306,134,893.48 for CYs 2014 to 2020 which understated the yearend balances of Road Networks and Government Equity accounts; and expenses and liabilities for undelivered fuel and lubricants were erroneously recognized in the books, inconsistent with accrual basis of accounting, thus overstating liabilities and understating the equity account balance by ₱38,701,697.14 as of December 31, 2020.
- Receipt of ₱120,000,000.00 from Sunlight International Island Resort, Inc. out of the compromise agreement entered into with PGP and Palawan Council for Sustainable Development (PCSD) was erroneously recorded as Guaranty Deposit Payable instead of Trust Liabilities hence affected the fair presentation of both accounts in the Statement of Financial Position. COA also stated in the Reports that the PGP has a low COVID-19 fund utilization rate of 51.43% leaving an unutilized budget of ₱186,082,604.57 as of December 31, 2020, including the ₱10,864,990.00 budget for medicines, vitamins, vaccines and personal protective equipment of medical health workers, thus impeding the efficient use of fund in handling response to the COVID-19 pandemic. Other deficiencies were noted such as;
- Expenditures ‘exceeded’ the appropriations by ₱3,352,800.00 in violation of Section 4 of Presidential Decree (P.D.) No. 1445 and Section 305 of the Local Government Code of 1991;
- Used rapid diagnostic kits worth ₱8,370,000.00 were not ‘derecognized’ in the books;
- ‘Ineligible’ disbursement of Bayanihan Grant to Provinces (BGP) totaling ₱5,169,444.81 contrary to Item Nos. 3.5 and 3.6 of the Department of Budget and Management (DBM) Local Budget Circular (LBC) No. 126 dated April 13, 2020.;
- Cash advances for food supplies totaling ₱3,280,685.79 remained ‘unliquidated’ as of year-end.
“Seven accountable officers were granted additional cash advances despite non-liquidation of previous advances contrary to Item 4.1.2 of COA Circular No.97-002 dated February 10, 1997 and discrepancies of ₱1,785,947.18 in the liquidation of cash advances.” as stated in the reports.
According to COA, the audit observations and recommendations contained in the Report were discussed with the PGP officials and staff concerned during the exit conference held on May 28, 2021.
COA also revealed that the 18 recommendations embodied in the CY 2019 Annual Audit Report (AAR), six (6) were fully implemented and 12 were fully partially implemented by the PGP.