These are some of the garbage compactor trucks turned over by Hino Motors Philippines Corp. to the Cebu City government in November 2019. | CDN file photo
CEBU CITY, Philippines – State auditors requested the Cebu City Government to properly account for the purchase of 21 garbage trucks worth a total of over P147 million.
The Commission on Audit (COA), in their annual audit report for Cebu City for the fiscal year of 2019, found out that city officials failed to record the 21 garbage trucks in their books of accounts despite having received the equipment.
“Twenty-one garbage trucks with a total cost of ₱147,780,000.00 were not recorded in the books of accounts of the City as of December 31, 2019, despite its delivery within the year… because of the failure of concerned offices to submit to the Office of the City Accountant the pertinent documents thus, understating the asset, its related accumulated depreciation, and expense accounts,” COA said.
As a result, the auditing agency told authorities from the city government to provide an explanation to the matter and to require the City Budget Officer to set-up an obligation for the payment of the trucks.
“We (also) recommend requiring the city account City Accountant to prepare Journal Entry Vouchers (JEVs) to record the trucks in CY (Circular Year) 2019… (and) direct the DGS (Department of General Services) Officer and the City Accountant to reconcile the inventory and accounting records on the garbage trucks,” COA added.
Citing response from city hall officials, state auditors noted that the city’s accounting office vowed to record the transaction pertaining to the garbage trucks.
It can be recalled that the city government allocated a total of P232.5 million as part of its annual budget for 2019 for the acquisition of new garbage trucks. The move was made in an effort to minimize expenses meant for the collection of the city’s garbage.
Cebu City, with a population of over 1 million individuals, produces an average of 600 tons of garbage daily. Part of the funds also included the purchase of the vehicles’ fuel, maintenance, and other corresponding operating expenses.
Based on COA’s report, the city government issued two Purchase Orders (PO) to buy nine, brand new units of six-wheeler 12.0-cubic meter garbage compactor trucks, and 12 more brand new units of six-wheelers of 8.0 cubic meter garbage compactor.
“On November 12, 2019, the City accepted the delivery of the 21 six-wheeler garbage trucks from its supplier. However, its Acceptance and Inspection Reports were undated and revealed that they were partially received,” said COA.
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“The non-recording of the trucks understated the assets of the City and its related accumulated depreciation and depreciation expense that should have been calculated from the date of its delivery,” they added.
COA has expressed a qualified opinion on how the city government handled its finances, assets, liabilities, and equities for the entire year of 2019.
Based on the General Accepted Accounting Principles (GAAP), qualified opinions are issued when auditors are unable to give an unqualified opinion. Unqualified opinion meant that financial statements shared to auditors are presumed to be free of irregularities. /bmjo