CEBU CITY, Philippines – The Commission on Audit (COA) directed the Cebu City Government to properly account drugs, medicine, and laboratory supplies it purchased in 2019 that was worth a total of P132 million.
In their 2019 Annual Audit Report, COA found out that the city failed to record drugs and medicine supplies, and medical, dental and laboratory supplies in its inventory account.
COA said the city government purchased a total of P84, 679, 668.37 worth of drugs and medicine supplies, and P47, 320, 125.46 of medical, dental, and laboratory supplies in 2019.
But instead of logging these supplies on the city’s inventories, the auditing body said the city government treated these as outright expenses.
“Upon checking the related Inventory Expense accounts as of December 31, 2019, it was found out that all purchases of the City of drugs and medicines and medical, dental, and laboratory supplies were directly recorded as outright expense,” they stated.
COA, in turn, recommended the city government in setting up Inventory Accounts for these particular supplies in order for them to adopt the perpetual inventory method.
“(We also recommended to) coordinate directly with the DGS (Department of General Services), CCMC (Cebu City Medical Center) and CHD (City Health Department) for the submission of duly acknowledged Requisition and Issue Slips for the withdrawal or issuance of supplies and the Monthly Report of the Drugs and Medicines and Medical, Dental and Laboratory Supplies issued and its supporting documents,” they added.
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The city government, through the City Accounting Office, promised before COA it will be heeding the body’s recommendations.
The auditing agency pointed out that government agencies and local government units to classify materials and supplies for stock as assets using the Inventory Account, as per provisions found in the Philippine Public Sector Accounting Standards (PPSAS) and the New Government Accounting System (NGAS).
“For the failure to adhere to the prescribed accounting rules and regulations on the inventory accounts, the asset portion of the supplies was not recognized while the supplies expenses account was overstated,” COA said.
State auditors also flagged down the city’s decision to directly release the drugs, medicines, and laboratory supplies in bulk to end-users, in this case, the CCMC and CHD, adding that such move exposes them to the risk of misuse, theft, and wasteful utilization. /bmjo