City’s recording of P16.79M PhilHealth payment ‘erroneous’

By: Gerome Dalipe

THE Iloilo City Government 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 Commission on Audit, in its annual report for 2018, 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.

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

The rules provide for the Guidelines on the Conversion of the Chart Accounts to ensure the liability account used to record the income received in advance does not fall in any of the specified deferred credit accounts.

“Thus, this resulted in the inaccurate balances of affected accounts in the financial statements,” the COA report read.

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.

The accountant is also urged to verify that correct accounts are used in the recording of transactions pursuant to COA Circular 2015-009.

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

Such 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.