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COA flags PSALM’s P10-B net discrepancy

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By Myrna M. Velasco

The Commission on Audit (COA) has flagged state-run Power Sector Assets and Liabilities Management Corporation (PSALM) on what was reckoned as P10 billion “net discrepancy” on its receivables from national government agencies; and what were deemed as “doubtful entries” on its financial books.

In a letter to PSALM President and CEO Irene Joy Besido-Garcia, the State auditor indicated that the company’s financial statement entries of P15.134 billion in 2017 and P53.709 billion in 2016 were “not reliable due to the negative results of confirmation with a net discrepancy of P10.033 billion between the records of PSALM and other government agencies.”

COA cited in particular “the inclusion of dormant accounts transferred from National Power Corporation (NPC) books in calendar year 2009 in the amount of P11.118 billion.”

That supposedly was inclusive of prepayment accounts totaling P190.892 million consisting of various creditable withholding taxes, which COA claimed is not in compliance with its Circular.

Further, the State audit agency questioned PSALM’s entries of the P3.864 billion and P2.007 billion (in 2017 and 2016, respectively) for power plant and equipment (PPE), noting that such were “not fairly presented as required” under prescribed accounting standards.

COA stressed that “the existence of P2.059 billion was doubtful due to its non-inclusion in the physical inventory report.”

PSALM was similarly reproached on “several unserviceable properties in the power plants amounting to P1.142 billion,” that have remained undisposed as of end-year 2017.

In addition, COA specified that some PSALM-acquired assets amounting to P48.525 million “was not reconciled with the physical inventory report for calendar year 2017 and the transmission related assets owned by the National Transmission Corporation amounting to P125.346 million were included in the PPE account.”

The State auditor also raised doubts when it comes to “the accuracy and reliability of the accounts” relating to prepayments with the Bureau of Internal Revenue (BIR), chiefly the input value added tax (VAT) amounting to P34.44 billion in 2017; and P37.669 billion in 2016.

COA noted that there had been “significant variance of P13.014 billion between the total amount of input VAT presented in the VAT Returns and the general ledger account balance for input VAT account and the amount reported in the annual income tax return (or BIR Form 172) and the creditable withholding tax account ledger in the amount of P432.031 million.”

The audit agency noted that such had been contrary to the conceptual framework on financial statements as well as the prescribed accounting rules.

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