THE COMMISSION on Audit (CoA) has flagged the Philippine Center for Postharvest Development and Mechanization (PhilMech) over its unrecorded inventories worth P1.2 billion, resulting in inconsistencies in its financial statements.
In a Viber message to 大象传媒, PhilMech Director Dionisio G. Alvindia said: 鈥淧hilMech鈥檚 accounting department has already derecognized P1.08 billion or 93% of the tagged unrecorded inventory. The remaining 7% or 鈧87,431,506 are being prepared to be adjusted this June 2024.鈥
CoA auditors noted the unrecorded inventories of donated agricultural machinery resulted in the overstatement of the agency鈥檚 inventories and understatement of maintenance and operating accounts.
鈥淭he 鈥榰nrecorded issued inventories鈥 pertain to the already received, possessed, and donated Property, Plant and Equipment (PPE) to rice farmers鈥 cooperatives and associations (FCAs), which were affected by the 鈥榬ecord timing difference鈥 in recognizing the releases of those PPEs in our financial books of accounts,鈥 explained Mr. Alvindia.
State auditors noted that a total of 1,855 donated machinery in the form of tractors, rice mills, and harvesters, among others, worth P1.2 billion has already been donated to farming cooperatives and local government units despite remaining in the agency鈥檚 year-end inventory account.
CoA recommended that PhilMech direct its accounting department to 鈥渋mplement and streamline control processes鈥 to properly settle the inventory transaction of donated machinery.
PhilMech鈥檚 mandate is to commercialize and mechanize the domestic agriculture sector鈥檚 postharvest mechanisms to reduce agricultural product losses.
CoA also flagged PhilMech鈥檚 low disbursement rate of the Rice Competitiveness Enhancement Fund鈥檚 (RCEF) mechanization program.
鈥淭he foregoing benefits notwithstanding, gaps in the implementation of the Program were noted such as low disbursement rate of 7.62% or 鈧388.58 million of the 鈧5.10-billion total cash allocations received for FY (Fiscal Year) 2023,鈥 the audit agency said.
Mr. Alvindia said the low disbursement rate is due to incomplete billing documents filed by suppliers of agricultural machinery.
鈥淭he target disbursements did not materialize as expected, but we are now accelerating the disbursements of funds at the close of this first semester to P19.8 billion, or more than 76% of the total obligated amount, to be disbursed for prior year payables,鈥 he added.
RCEF receives P10 billion a year from collected rice tariffs. Of the total, it sets aside P5 billion to fund farm mechanization. 鈥 Kenneth Christiane L. Basilio
