COA flags closed, non-existent balances in Capitol’s 2019 Cash-in-bank account

COA said the Capitol’s Cash in Bank-Local Currency, Current Account in 2019 included balances of accounts that are either closed or non-existent. | CDN Digital file photo

CEBU CITY, Philippines — The Commission on Audit has asked the Capitol to reflect the “correct and true account balances” and ensure the fair presentation of its accounts in its financial statements.

This as the state auditors noted that the Capitol’s “Cash in Bank-Local Currency, Current Account” included balances from a non-existing account and three closed bank accounts.

Those included of the closed and non-existent accounts resulted in an overstatement of P504,004.11 in the Cash in Bank-Local Currency, Current account for the year 2019.

The closed accounts are those maintained by Capitol-run hospitals.

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“The Provincial Accounting Office was not able to effect the necessary journal entries for the closed bank accounts maintained by the  provincial/district hospitals,” COA said.

The reflected closed accounts were those of the Cebu Provincial Hospital-Carcar in the Development Bank of the Philippines (DBP), and the Badian District Hospital and MJ Cuenco Memorial Hospital in Malabuyoc which were with the Land Bank of the Philippine (LBP).

The declared amounts in the closed accounts were P28,547 for the CPH-Carcar, P59,681.76 for the BDH, and P77,319.82 for the MJMH.

The bulk of the said overstated amount is under the non-existing account of the Mandaue District Hospital which is not among the hospitals managed by the Cebu provincial government.

According to the Philippine Public Sector Accounting Standards, the Cash in Bank, as part of the government unit’s assets, should only reflect resources “controlled” by the provincial government “from which future economic benefits or service potential are expected to flow to the entity.”

“Confirmation made from the bank on the covering accounts disclosed that these were already closed due to change/transfer of bank account to another branches,” COA said.

“The Subsidiary Ledgers of the accounts also included an account in the name of Mandaue City District Hospital in the amount of P338,455.53 which is neither a bank account nor a deposit,” the state auditors added.

Quoting its inquiry with the Provincial Accounting Office, COA said that the bank accounts in question were already closed “but the corresponding entry/s were inadvertently not taken.”

“We recommend that management require the Provincial Accountant to record the appropriate adjusting journal entry to ensure the fair presentation of the Cash in Bank and other affected accounts in the financial statements./dbs