3rev AOM No. 2020-003.DPPF - draft.PPERecon

Republic of the Philippines
COMMISION ON AUDIT
Region XI, Davao City
Office of the Audit Team Leader

NGS Cluster 4 – Defense and Security
Audit Group 4J & 4K – Audit Team R11-11
DPPF Receiving Station, JP Laurel Ave., Davao City
AUDIT OBSERVATION MEMORANDUM
AOM NO. DPPF-2020-003(19)

February 10, 2020
JSUPT. ALBERTO R. TAPIRU JR.

Jail Superintendent
Officer-in-Charge
Bureau of Corrections
Davao Prison and Penal Farm
B. E. Dujali, Davao del Norte
Attention: MS. DOPHENE P. DELMO -GADIA

Chief, Accounting Section
CTO2 GLENN PETER G. CAMIA

Chief, Property Management Section
Review of the Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) for CY 2019 and verification of accounting records on PPE disclosed the
following deficiency:
The reported balance of PPE totaling P82,143,220.11 as of December 31, 2019 were
not adequately supported with PPELC as required in Section 42 of the Government
Accounting Manual (GAM), Volume 1 resulting in unreconciled balances of
P2,356,275.38 in the accounting and property records, thus affecting the accuracy of
the account balance at yearend.
1. Section 42 of GAM, Volume 1 provides, among others, that:
Accounting and Property Records to be maintained for PPE. The Chief

Accountant shall maintain the PPELC for each category of PPE. For check and
balance, the Property and Supply Office/Unit shall likewise maintain PC for PPE in the
custody to account for the receipt and disposition of the same. The balance per PC shall
be reconciled with PPELC maintained by the Accounting Division/Unit. Underscoring
supplied
AOM NO. DPPF-2020-003(19) 1

2. Furthermore, the above-mentioned Manual defines Property, Plant and Equipment
Ledger Card (Appendix 72) as a card that shall be kept in the Accounting Division/Unit for
each class of PPE. xxxxxxxx The Accounting Staff in charge in maintaining the PPELC
shall record promptly the acquisition, description, custody, estimated life, depreciation,
impairment, issue/transfers/disposal, repair history and other information about the
property. It shall be maintained by fund cluster.
3. Verification of accounting records on PPE accounts revealed that Property, Plant

and Equipment Ledger Cards (PPELC) were not maintained by the personnel-in-charge in
the accounting section.
4. Inquiry from the Accountant of the agency disclosed that PPELC were not
prepared and no reconciliation of records was undertaken due to the numerous accounting
activities she handles daily. Furthermore, she has other official duties and operational
functions which caused her to overlook the maintenance of such records.
5. Due to non-maintenance of PPELC in the accounting section, PPE balances at

yearend in the records of the accounting and property sections do not reconcile, to wit:
PARTICULARS AMOUNT
PPE accounts balance as of December 31, 2019 per
Accounting Report (FS) P82,143,220.11
PPE accounts balance as of December 31, 2019 per

Property Records/report (RPCPPE) P79,786,944.73
Difference P 2,356,275.38
6. Without complete and updated PPELC, reconciliation of balances per Property

Cards and Subsidiary Ledger Cards could not be done. This reconciliation is necessary to
ensure the accuracy of the agency’s financial reporting.
7. We call management’s attention on Section 111(1) of PD 1445 which provides,

among others, that:
The accounts of an agency shall be kept in such detail as is necessary to meet the
needs of the agency and at the same time be adequate to furnish the information needed by
fiscal or control agencies of the government.
8. We recommend that management instruct the Accountant to prepare and

maintain the required PPELC for check and balance as required in regulations and to
ensure accurate PPE account balances. Moreover, PPE records in the Accounting and
Property Sections should be periodically reconciled.
AOM NO. DPPF-2020-003(19) 2

May we have your comments on the foregoing audit observations within five (5)
calendar days from receipt hereof.
ROSELYN L. SALUDARES
State Auditor IV
Audit Team Leader
JULIA S. QUISAOT
State Auditor V
Regional Supervising Auditor
NGS Clusters 1-4
PROOF OF RECEIPT OF AOM:
Signature: _________________
Date: ___________________
AOM NO. DPPF-2020-003(19) 3

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Republic of the Philippines

Office of the Audit Team Leader

AUDIT OBSERVATION MEMORANDUM

AOM NO. DPPF-2020-003(19)

JSUPT. ALBERTO R. TAPIRU JR.

Attention: MS. DOPHENE P. DELMO -GADIA

CTO2 GLENN PETER G. CAMIA

1. Section 42 of GAM, Volume 1 provides, among others, that:

Accounting and Property Records to be maintained for PPE. The Chief

AOM NO. DPPF-2020-003(19) 1

3. Verification of accounting records on PPE accounts revealed that Property, Plant

5. Due to non-maintenance of PPELC in the accounting section, PPE balances at

PPE accounts balance as of December 31, 2019 per

6. Without complete and updated PPELC, reconciliation of balances per Property

7. We call management’s attention on Section 111(1) of PD 1445 which provides,

8. We recommend that management instruct the Accountant to prepare and

AOM NO. DPPF-2020-003(19) 2

PROOF OF RECEIPT OF AOM:

AOM NO. DPPF-2020-003(19) 3

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