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THE Fee on Audit (CoA) has advisable to the Presidential Fee on Good Authorities (PCGG) the disposal of its automobiles that may not be repaired.
Primarily based on its 2021 audit report, the CoA stated the PCGG had 15 automobiles, 13 of which underwent repairs “with out due regard to the 30 % allowable restrict underneath COA Round 2012-003 (primarily based on the proportion of annual R&M over the carrying quantity of the automobile as of the given 12 months).”
Beneath the round, cost for restore of presidency gear that’s past 30 % of its or an identical gear’s present market value is taken into account an “extreme” expenditure.
Carrying quantity is acquisition price minus amassed depreciation.
“The 13 automobiles or 87 % of [the] company’s complete fleet have been already totally depreciated and valued within the books at salvage worth or merely 5 % of its acquisition price”, CoA stated.
CoA thus advisable that the PCGG “[i]nstruct the involved Accounting and Property personnel to conduct a cost-benefit evaluation and contemplate disposal of these that are not economically repairable.”
“As of Dec. 31, 2021, it spent a complete of P8,395,814.67 for repairs and upkeep or equal to 54 % of the entire acquisition price of its complete fleet aggregating P15,644,361.89”, CoA stated.
The PCGG administration informed CoA that the automobiles have been wanted to service officers and employees.
The PCGG administration additionally informed CoA that it had requested the Division of Finances and Administration (DBM) in earlier years for allocation in order that it might purchase new automobiles and that it was solely in 2017 that two new ones have been purchased.
“In 2020, they got allocation…however [it was] ultimately taken out for use for Covid responses,” the audit report learn, referring to the Coronavirus 2019 pandemic.
The PCGG administration stated it should hire automobiles to service officers and carry out operations that will require transportation if it would cease utilizing all obtainable automobiles. Upon inquiry in the course of the pandemic, the PCGG discovered that rental charges for automobiles ranged from P5,000 to P8,000 per day.
The audit report contained CoA’s response to the PCGG’s feedback.
CoA stated, “The justification/rationalization supplied by the Administration is partially thought of. The Auditors imagine that the observe continues to be not economically helpful since totally depreciated automobiles will incur extra repairs and upkeep prices particularly in the long term. As well as, the deferral of the disposal of those automobiles might result in additional deterioration and getting older which can end in decrease than anticipated restoration worth…”
“Additional, the Auditors want to make clear that the advice doesn’t imply to dispose [of] the automobiles concurrently since this may increasingly trigger disruption within the company’s operations and non-attainment of its goals. Administration could dispose [of] one or two automobiles at a time as a way to facilitate requests for funding from the DBM for the procurement of latest automobile/s,” CoA stated.
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