COA tells city’s GSO to account inventory

THE COMMISSION on Audit (COA) questioned the process of the General Services Office (GSO) in a report on the local government’s inventories for calendar year 2016.

 According to the COA, year-end inventory balances amounting to P436,563,085.42 have “doubtful validity.”

 The COA report said that the GSO should have conducted a periodic physical count of inventory items. “Hence, no Report of the Physical Count of Inventories (RPCI) was submitted to the audit team for CY 2016,” the audit report said.

 It said that the department did not submit its summary of supplies and materials issued (SSMI) by various offices and divisions.

These were “contrary to pertinent rules and regulations on supply management.”

Sec. 124 of the Manual on the New Government Accounting System for Local Government Units provides  “The local chief executive shall require periodic physical inventory of supplies or property. Physical count of inventory items by type shall be conducted semestrally and reported in the Report of the Physical Count of Inventories (RPCI). This shall be submitted to the Auditor concerned not later than July 31 and January 31 of each year for the first and second semesters, respectively.”

“This procedure is indispensable and important as it gives credence to management’s assertion that the assets exist. On other hand, the submission of SSMI is very relevant to afford the proper recognition of expense in the books,” the COA report said.

 The COA report said that the proper inventory procedures were “not faithfully performed.”

“Inquiries with the concerned GSO personnel revealed that no physical count of supplies and materials was conducted for the year as they have focused on the physical count of Plant, Property, and Equipment (PPE).”

 The COA said that the local government should take measures to make sure that the city’s accounts were balanced throughout its various documentary statements submitted for audit.

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