COA flags Malabon City over P2.18B 'unreliable' year-end Cash in Bank balance


The Commission on Audit (COA) has flagged the Malabon City government over its P2.183 billion "unreliable" year-end balance of Cash in Bank (CIB) and the P4.265 billion Property, Plant, and Equipment (PPE) accounts.

In letter to Malabon City Mayor Jeannie N. Sandoval, COA said: "The accuracy, existence and validity of the year-end balance of the CIB account totaling P2.183 billion was unreliable due to the noted discrepancies of P392.859 million and (P24.877 million) when compared with the balances per cashbook and per bank confirmation, respectively."

The letter dated May 16, 2024 was sent to Mayor Sandoval by Atty. Maria Carmina Paulita B. Juguilon Pagayawan, director IV of COA.

In its letter which summarized the annual audit report for 2023, COA said the "unreliable" balance was attributable to the absence of reconciliation between the subsidiary ledger (SL) and cashbook and the "significant delay" of the city government in the preparation and submission of the Bank Reconciliation Statement (BRS), which it said was contrary to Section 74, Chapter 3 of Presidential Decree No. 1445, Section 181.c of Government Accounting and Auditing Manual (GAAM), Volume I, and COA Circular No. 96-011.

COA has asked Sandoval to direct the City Accounting Department (CAD) to properly document and adjust in the books the derecognition of three bank accounts declared as closed by the Philippine National Bank (PNB). 

Moving forward, Malabon's CAD has been asked to regularly prepare and submit the BRS to COA within the prescribed period.

As for the City Treasury Department (CTD), COA said CTD should record in the cashbook the two bank accounts maintained with the Land Bank of the Philippines (LBP) with a combined book balance of P1,087,657.71 and recognize in the cashbook the time deposit maintained with the same bank amounting to P1,547,535.39.

At the same time, COA questioned the "unreliable" year-end balance of the city's PPE accounts amounting to P4.265 billion. One concern was the "lumped" PPE items, which were described as "Beginning Balances" and without appropriate description amounting to P37.638 million, it said

Another issue cited by COA were the PPEs inclusion in the Report on the Physical Count of PPE (RPCPPE) but not recognized in the books of accounts, as well as the PPEs taken up in the books but not in the RPCPPE in the amounts of P56.859 million and P554.116 million, respectively.

It said its auditors wondered why the RPCPPE included 41 units of PPE items without costs and 36 units of missing properties worth P4.473 million, which resulted in the "unreconciled discrepancy" of P497.258 million between the accounting records and the inventory report.

It then tasked the  CAD to determine the composition and details of the PPE items lumped and recorded as Beginning Balances and without appropriate description. 

The Inventory Committee, on the other hand, needs to establish the costs of the 41 units of PPE items while the City General Services Department (CGSD) needs to verify whether the missing PPE were disposed of or transferred to other government agencies, it said.