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    AOM 2023-003 Erroneous Recording of Accounts Payable

    Uploaded by

    Kean Fernand Bocabo
    1) The Commission on Audit found deficiencies in the Accounts Payable account of the Municipality of Abuyog. 2) Liabilities to officers and employees totaling ₱3,034,985.34 were erroneously recorded as Accounts Payable instead of Due to Officers and Employees. 3) This resulted in Accounts Payable being overstated and Due to Officers and Employees being understated by ₱3,034,985.34 at year end. The Commission on Audit recommends adjusting the erroneous entries and recording liabilities to officers and employees using the proper Due to Officers and Employees account.

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    AOM 2023-003 Erroneous Recording of Accounts Payable

    Uploaded by

    Kean Fernand Bocabo
    393 views4 pages
    1) The Commission on Audit found deficiencies in the Accounts Payable account of the Municipality of Abuyog. 2) Liabilities to officers and employees totaling ₱3,034,985.34 were erroneously recorded as Accounts Payable instead of Due to Officers and Employees. 3) This resulted in Accounts Payable being overstated and Due to Officers and Employees being understated by ₱3,034,985.34 at year end. The Commission on Audit recommends adjusting the erroneous entries and recording liabilities to officers and employees using the proper Due to Officers and Employees account.

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    1) The Commission on Audit found deficiencies in the Accounts Payable account of the Municipality of Abuyog. 2) Liabilities to officers and employees totaling ₱3,034,985.34 were erroneously recorded as Accounts Payable instead of Due to Officers and Employees. 3) This resulted in Accounts Payable being overstated and Due to Officers and Employees being understated by ₱3,034,985.34 at year end. The Commission on Audit recommends adjusting the erroneous entries and recording liabilities to officers and employees using the proper Due to Officers and Employees account.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    393 views4 pages

    AOM 2023-003 Erroneous Recording of Accounts Payable

    Uploaded by

    Kean Fernand Bocabo
    1) The Commission on Audit found deficiencies in the Accounts Payable account of the Municipality of Abuyog. 2) Liabilities to officers and employees totaling ₱3,034,985.34 were erroneously recorded as Accounts Payable instead of Due to Officers and Employees. 3) This resulted in Accounts Payable being overstated and Due to Officers and Employees being understated by ₱3,034,985.34 at year end. The Commission on Audit recommends adjusting the erroneous entries and recording liabilities to officers and employees using the proper Due to Officers and Employees account.

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    REPUBLIC OF THE PHILIPPINES

    COMMISSION ON AUDIT
    REGIONAL OFFICE NO. VIII
    LGAS C –Leyte II and Biliran Province
    New Ormoc City Hall
    Ormoc City, Leyte

    Team R8-03, Abuyog, Leyte

    AOM No.: 2023-003


    Date : May 17, 2023

    AUDIT OBSERVATION MEMORANDUM

    Hon. Octavio J. Traya, Jr.


    Municipal Mayor
    Abuyog, Leyte

    Attention: Ms. Michelle L. Efren


    Municipal Accountant

    We have audited the Accounts Payable account of the Municipality of Abuyog


    and observed the following deficiencies/errors:

    1. Liabilities to Officers and Employees for salaries, benefits and other


    emoluments as of December 2022 totaling ₱3,034,985.34 were erroneously
    recorded as Accounts Payable instead of Due to Officers and Employees
    contrary COA Circular No 2015-009, thus the Accounts Payable was
    overstated by ₱3,034,985.34 while Due to Officers and Employees was
    understated by the same amount at year end.

    1.1. COA Circular No. 2015-009 dated December 1, 2015 prescribed the Revised
    Chart of Accounts for LGUs to conform with the adoption of the Phil. Public
    Sector Accounting Standard (PPSAS). On recording of liabilities, the following
    account was prescribed to be used by LGUs:

    Due to Officers and Employees 2-01-01-020


    Credit

    This account is used to record incurrence of liability to officers and employees


    for salaries, benefits and other emoluments. Debit this account for settlement or
    payment to officers and employees.
    Accounts Payable 2-01-01-010
    Credit

    AOM NO. 2023-003- Erroneous recording of Accounts Payable-Abuyog Leyte Page 1 of 3


    This account is used to record receipt of goods or services on account in the
    normal course of trade and business operation. Debit this account for payment
    or settlement of liabilities.

    1.2. Review on the additions to Accounts Payable account as of December 2022


    revealed that liability to Officers and Employees totaling ₱3,034,985.34 were
    erroneously recorded in Accounts Payable account instead of Due to Officers and
    Employees as follows:

    Table 1. Liabilities to Officers and Employees


    Date Particulars Reference Amount
    General Fund      
    To adjust accounts payable-
    12/31/22 Subsistence Allowance 10AJE 99,870.00
    To adjust accounts payable-
    12/31/22 Laundry Allowance 11AJE 8,430.00
    To adjust accounts payable-
    12/31/22 Hazard Pay 12AJE 191,776.00
    To adjust accounts payable-
    12/31/22 Overtime and Night Pay 13AJE 92,205.17
    To adjust accounts payable-
    12/31/22 Salaries and Wages-Regular 7AJE 14,771.77
    To adjust accounts payable-
    12/31/22 Representation Allowance 8AJE 175,500.00
    To adjust accounts payable-
    12/31/22 Transportation Allowance 9AJE 175,500.00
    Trust Fund      
    To adjust accounts payable-
    12/31/22 Salaries and Wages-Regular GJ 347,472.39
    To adjust accounts payable-
    Salaries and
    1,146,956.20
    12/31/22 Wages-Casual/Contractual GJ
    To adjust accounts payable-
    Personal Economic Relief
    12,181.60
    12/31/22 Allowance (PERA) GJ
    To adjust accounts payable-
    12/31/22 Representation Allowance GJ 67,500.00
    To adjust accounts payable-
    12/31/22 Transportation Allowance GJ 67,500.00
    To adjust accounts payable-
    12/31/22 Honoraria GJ 363,609.77
    To adjust accounts payable- 215,0
    12/31/22 Overtime Pay GJ 48.44
    To adjust accounts payable-Year- 16,6
    12/31/22 End Bonus GJ 64.00
    AOM NO. 2023-003- Erroneous recording of Accounts Payable-Abuyog Leyte Page 2 of 3
    Date Particulars Reference Amount
    To adjust accounts payable-Other 40,0
    12/31/22 Bonuses and Allowances GJ 00.00
    Total 3,034,985.34

    1.3. Due to the above noted deficiency, the Accounts Payable account was overstated
    by ₱3,034,985.34 while the Due to Officers and Employees account was
    understated by the same amount at yearend.

    1.4. We recommend that the Municipal Accountant make the necessary


    adjustments for the above erroneous entries and record the liabilities to
    officers and employees using the Due to Officers and Employees account.

    May we have your comments on the foregoing audit observations within five (5)
    calendar days from receipt hereof.

    MA. SHIELA T. ELMIDO


    State Auditor II
    OIC Audit Team Leader

    SANTIAGO P. SEÑASE
    State Auditor IV
    OIC Supervising Auditor

    Proof of Receipt of AOM:


    Name of Receiving
    Officer Signature Date Received
    Officer
    Municipal Mayor
    Municipal Accountant

    AOM NO. 2023-003- Erroneous recording of Accounts Payable-Abuyog Leyte Page 3 of 3


    AOM NO. 2023-003- Erroneous recording of Accounts Payable-Abuyog Leyte Page 4 of 3

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