MANILA - The Commission on Audit has questioned the Southern Philippines Development Authority (SPDA) for undervalued parcels of land each amounting to P1.00, contrary to the Philippine Accounting Standards (PAS).
In its annual audit report, the COA reiterated its audit finding for the years 2012 and 2014, wherein it found out that the SPDA violated paragraph 15 of PAS 16 which provides that “an item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost.”
The SPDA is a government-owned and controlled corporation which is mandated to promote development in the Southern region by exercising the powers of a corporation and acquiring, leasing or holding personal and real properties, among others.
The COA noted that the SPDA disclosed that the real properties which were acquired through deed of donation or turned over by the defunct Mindanao Development Authority were recorded in the books at P1.00 each and some were recorded at minimal value.
“The management also admitted the need to appraise the value of these properties as basis in recording for fair presentation in the financial statements, however, no action was made on the appraisal of these properties to date,” the COA said.
Ten parcels of land with a total area of 24,145 hectares were valued at P1 each or a total of P10.
The COA identified the location and projects as Bonbon Agricultural Development Project in Butuan City; Basilan Fishpond Projects in Veteran Avenue and Panigayan, Basilan; Bagumbayan, Sultan Kudarat; Wao and Bumbaran, Lanao Del Sur; Lagundi, Pikit, Cotabato, Liguasan Marsh Development Project; Autonomous Region in Muslim Mindanao Compound in Cabatanga, Zamboanga City; ARMM Compound in Cotabato City; Barangay Sasa, Davao City; and Libungan, Cotabato.
According to the COA, the land account of SPDA stated at P9.527 million is undervalued because of the ten properties.
“Failure of the management to appraise these items at its fair value violated PAS 16 and understated the land account in the financial statements,” the COA said.
The COA however said that the SPDA has already agreed to take steps towards the proper valuation of the questioned properties.
“The management has made the initial inquiry to Land Bank of the Philippines for the appraisal of the above-mentioned property. The Authority proposed to create an Asset Management Division as part of the proposed reorganization to closely work with the appraisal,” the audit body said.