The correctness of the reported zero balance of Inventory account as of the end
of CY 2018, 2019 and 2020 could not be ascertained due to non-submission of
Report on Inventory of Supplies (RISM), non-use of the Request for Issue Slip
(RIS), non-preparation of the Materials and Summary of Supplies and
Materials Issued (RSMI) and non-maintenance of Stock Cards, contrary to the
provisions in Chapter VI of the Manual on the Financial Management of
Barangays, thus the reported zero balance cannot be relied upon.
Pertinent Specific Policies and Procedures for Inventories of the Manual on
Financial Management for Barangays provides as follows:
6.1.11 Issuance of supplies shall be supported by an approved
Requisition and Issue Slip (RIS) as shown in Annex 20. At the
end of the month, the BT shall submit a Summary of Supplies
and Materials Issued (SSMI) - Annex 32 supported by the RIS
to the C/M Accountant as basis for recording the expense
account.
6.1.14 Stock Card (SC) shown in Annex 22 shall be maintained to
monitor and control procurement and issuance of supplies and
materials.
6.2.3 Inventory taking and Reconciliation
a. The Inventory Committee headed by the PB or his
authorized representative and the BT as his member shall
conduct a physical count of all the supplies and inventory
of the barangay at least once a year.
Annex 31 of the Manual on the Financial Management of Barangays
states that “Report on Inventory of Supplies and Materials (RISM) shall be
prepared by the Inventory Committee and approved by the Punong
Barangay. This report gives information on the physical count of inventory
items by type, including those unrecorded such as Office Supplies,
Accountable Forms, Drugs and Medicines, Food/Non-food Inventory, etc.
which are owned by the Barangay.”
Annex 32 of the same Manual states that “Summary of Supplies and
Materials Issued (SSMI) shall be prepared by designated personnel in the
Supply and Property Unit (SPU) on a weekly basis.”
Annex 22 states that “Stock Card shall be used to record all receipts
and issuances of supplies. It shall be maintained by the Barangay Treasurer
for each item of supply.”
Review of the Disbursement Vouchers submitted by the Barangay revealed
the following transactions presented in Table 1:
Table 1. Procurement of Supplies and Materials
Amount
Date Check No. Programs/Projects/
Disbursed
Activities
CY 2018
03/27/2018 923671 Purchase of medicines P 4,195.30
06/22/2018 923697 Purchase of office supplies 4,512.00
07/25/2018 959308 Purchase of office supplies 1,601.35
11/14/2018 959364 Purchase of office supplies 12,884.88
12/27/2018 959391 Purchase of office supplies 3,632.74
CY 2019
02/03/2019 985814 Purchase of office supplies 2,318.48
03/25/2019 985833 Purchase of office supplies 1,129.80
Purchase of drugs and
05/28/2019 985855 4,793.28
medicines
9/15/2019 14734 Purchase of office supplies 13,538.40
Purchase of tanod
12/12/2019 14784 22,625.00
paraphernalia
CY 2020
08/04/2020 34946 Purchase of medicines 4,000.00
09/24/2020 34958 Purchase of office supplies 500.00
10/27/2020 34971 Purchase of office supplies 10,572.48
10/27/2020 34980 Purchase of office supplies 7,106.40
Purchase of vitamins and
12/22/2020 35000 17,149.44
medicines
Total P 110,559.55
The above-mentioned procurements were recorded as an outright expense in
the books of accounts. This resulted to an overstatement of the Expense account
and an understatement of Inventory account.
Further, it was found out that the issuance of the office, medicines and
medical supplies were not supported with the Requisition and Issue Slip.
Understandably, no Summary of Supplies and Materials Issued was prepared by
the Barangay Treasurer.
Also, the Stock Card was not maintained by the Barangay Treasurer to
monitor and control the procurement and issuance of the supplies.
The Barangay Treasurer and the Punong Barangay as the designated
Inventory Committee did not conduct the physical count of the inventories, hence
no Report of Inventory of Supplies and Materials was submitted at year-end.
Due to these deficiencies, correctness of the reported balance of zero of the
Inventory account could not be ascertained.
We recommend that:
a. The Barangay Treasurer should maintain stock card for each item of
supply;
b. The Inventory Committee composed of the Punong Barangay and
Barangay Treasurer should conduct the physical count of the inventories
and prepare the Report on Inventory of Supplies and Materials (RISM) as
of the end of the year;
c. The Baranagy Treasurer should prepare the Summary of Supplies and
Materials Issued (SSMI) based on the Requisition and Issue Slip at the
end of the month; and
d. The Barangay Treasurer to submit the SSMI supported with Requisition
and Issue Slip to the Municipal Accountant as basis for recording the
expense account.
May we have your comments on the foregoing audit observations within
five (5) calendar days from receipt hereof.
