City accountant told to record expense account

By: Gerome Dalipe

STATE auditors have urged the Iloilo City Accounting Office to ensure that expenses and obligations incurred are recognized and recorded in the appropriate asset or expense account.

In its annual report, the Commission on Audit (COA) asked the city accountant to set up the corresponding payable account if no payment is made yet.

The auditors issued such call after the city accounting’s office erroneously recorded its payment transactions for PhilHealth premiums for the public’s medicare insurance amounting to P16.79 million for years 2012 to 2013.

The auditors also noted the City’s financial obligations to PhilHealth in prior years amounting to P16.79 million representing years 2012 and 2013 premiums on Medicare Para sa Masa program were recorded as liabilities in the books of account.

Likewise, several sports supplies bought in 2017 amounting to P.799 were not booked as prior period adjustment, instead of liabilities.

The practice ran contrast to Revised Chart of Accounts for Local Government Units and COA Circular 2015-009.

“Non-recording of expenditures and obligations on the period or year the same were incurred, as well as the failure to use the proper or correct accounts in the recording of transactions might result in inaccurate and unreliable balances of accounts in the financial statements,” read the COA report.

Likewise, the City’s payments to PhilHealth on the Indigent-Medicare Para sa Masa for 2018 accounts amounting to P8.54 million were recorded as insurance expenses instead of other maintenance and operating expenses.

In a statement of accounts sent by Philhealth to the mayor, the City committed to enrolling 51,025 families for the period Jan. 1, 2012 to Dec. 31, 2013, in 2012.

The City Government was billed a total of P122,460,000, or P61,230,000.00 per year for the 2-year period covered in the 1st year of implementation.

In its 2012 to 2013 annual budget and supplemental budget, the City appropriated the total amount of P62,748,312.00 for the City’s share, an indigent program for Medicare Para Sa Masa. The amount billed by Philhealth for 2012-2013 amounted to P91.84-million.

But the total appropriations of the City for the program was only P62,748,312 thus, leaving a balance of P29,096,688 with no appropriation.

Likewise, the City was able to pay P43,806,600 of the amount billed, leaving arrears of P48,038,400.00 which were not taken up as payables of the City Government in 2012-2013.

Of the total arrears of P48.04 million, the City Government paid P16,012,800 as partial payment.

The transaction also violated COA Circular 2015-009, thus resulted in the overstatement or understatement of the accounts in the financial statements as of Dec. 31, 2018.

The auditors asked the city accountant to properly record the transaction with the correct account to ensure that these are accurate financial statements.

In their report, the auditors directed the city accountant to ensure that expenditures and obligations incurred are recognized and recorded in the appropriate asset or expense account.