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AOM No. 01 - Cash

The cash balance reported as of December 31, 2020 could not be verified due to: (1) A bank account containing P14,463.88 for disaster relief funds was not recorded in the books. (2) Bank reconciliation statements were submitted more than a year late, contrary to regulations requiring submission within 20 days of the following month. This affected the fair presentation of the financial statements. The auditors recommend recording the undiscounted bank account and submitting timely bank reconciliation statements going forward.

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0% found this document useful (0 votes)
495 views2 pages

AOM No. 01 - Cash

The cash balance reported as of December 31, 2020 could not be verified due to: (1) A bank account containing P14,463.88 for disaster relief funds was not recorded in the books. (2) Bank reconciliation statements were submitted more than a year late, contrary to regulations requiring submission within 20 days of the following month. This affected the fair presentation of the financial statements. The auditors recommend recording the undiscounted bank account and submitting timely bank reconciliation statements going forward.

Uploaded by

Ragnar Lothbrok
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The correctness of the Cash in Bank – Local Currency, Current Account amounting

to P1,226,022.61 as of December 31, 2020 was not established due to: (a) the Cash in
Bank balance of P14,463.88 for the BDRRMF was not recorded in the books; and
(b) delayed submission of Bank Reconciliation Statements for more than one year
contrary to Annex 11 (B) of the Manual on the Financial Management of
Barangays, thus affecting the fair presentation of the financial statements.

Manual on the Financial Management of Barangays provides:

“Annex 11 (B) – The BRS shall be prepared to reconcile the cash balance
per books and per bank. It shall be submitted to COA
Auditor on or before the 20th of the following month.”

Review of the Bank Reconciliation Statement and Statement of Financial Position


as December 31, 2020 disclosed the following deficiencies:

1. Special bank account maintained for disaster fund with balance of P14,463.88
per bank statement was not recorded in the books;

The bank account is maintained with LBP San Juan Branch per Savings
Account Number 4182100590. The balance per bank statement as of December
31, 2020 was P14,463.88.

The amount reflected in Statement of Financial Position does not include the
cash balance transferred to the Special Trust Fund bank account. Thus, the
Cash and Cash Equivalents account is understated equivalent to the unrecorded
bank balance.

2. Delayed submission of Bank Reconciliation Statements;

The Barangay maintains 2 depository bank accounts, one for General Fund
account and the BDRRM Fund account. The Barangay prepared and submitted
Bank Reconciliation Statements for the General Fund and the BDRRMF.
However, it was not submitted monthly, which is on or before the 20th day of
the following month.

The non-recording of the Cash in Bank account for the disaster funds, understated
the Cash in Bank balance reported at year end by P14,463.88.

While the delayed preparation and submission of the BRS resulted to non-
detection and correction of errors between the book and bank and reconciliation of both
records could have been done to present fairly the Cash in bank account in the financial
statements.

We recommend that the:

a. Municipal Accountant record the bank account maintained for the disaster
funds; and

b. Prepare and submit the Bank Reconciliation Statements for each bank account
on or before the 20th day of the following month.

May we have your comments on the foregoing audit observations within five (5)
calendar days from receipt hereof.

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