I.

RATIONALE

As of December 31, 2022, the PPE account balance for the Municipality of Tubajon is Php______,
constituting __% of the agency’s total assets. However, this same amount was a subject to an audit
observation due to an incomplete accounting records/documents.

Further, an evaluation of the recorded PPE account balances in both the accounting and property
records has revealed significant disparities, giving rise to concerns about the accuracy of the reported
amount in the financial statements. This condition, if not properly addressed, will consistently cause an
exception in the fairness of presentation of the financial position of the Municipality of Tubajon.
Ultimately, it will hinder the management’s ability to acquire dependable and valuable information
necessary for making well-informed decisions and ensuring proper asset accountability.

II. SCOPE AND LIMITATION

This Physical Inventory Plan covers all PPE assets owned by the Municipality of Tubajon, and is
exclusively intended for facilitating the execution of the One-time PPE Cleansing process in accordance
with the aforementioned COA Circular.

III. PURPOSE

This Property Inventory Plan outlines the responsibilities and duties of the Inventory Committee and its
members regarding the conduct of inventory taking, recognition of those found at station and
disposition for non-existing/missing PPE items for the one-time cleansing of PPE accounts of the
Municipality of Tubajon.

Additionally, this includes a sample template for creating a Physical Inventory Plan. This template is
intended for use by the offices for the initiated one-time PPE cleansing process. The template serves as a
guide to help these offices outline their plan for conducting a thorough inventory of their assets as part
of the PPE cleansing process.

IV. COMPOSITION OF THE INVENTORY COMMITTEE (IC) FOR THE ONE-TIME PPE CLEANSING

The Inventory Committee of Municipality of Tubajon for the One-time PPE Cleansing shall be composed
of the following:

INVENTORY COMMITTEE DESIGNATION/OFFICE PPE ACCOUNT

Chairperson Manager/Chief, Administrative ALL PPE Account
Section
Members Accounting Division / Finance ALL PPE Account
Section
Property Section/Unit ALL PPE Account
Engineering – Contract and Construction in Process -
Monitoring Section/Division Infrastructure Assets
Operations – EMD Motor Vehicles and Heavy/Light
Equipment
Operations – SMD Water Supply System
Witness COA and IAS Representative
The constitution of the inventory committee does not have a set limit on the number of members.
Furthermore, offices are not restricted from involving personnel from other offices in forming their
inventory committee.

Item 4.3 of the said COA Circular provided that the members of the Inventory Committee shall be
temporarily relieved of all their regular duties to devote their full time in the conduct of the physical
inventory taking until the same is completed.

V. DUTIES AND RESPONSIBILITIES OF THE INVENTORY

The general responsibilities of the Inventory Committee are as follows:

a. Plan/Strategize on how to conduct and complete the physical count with prescribed period;
b. Prepare a Physical Inventory Plan (PIP) containing, at the least, the specific assignment/duties of
the Committee members, the cut-off date, and a schedule specifying the dates and locations of
the inventory taking activities from start-up to the targeted completion of the physical inventory;
c. Submit PIP, duly approved by the Head of the Agency or his/her representative, to the COA Audit
Team at least ten (10) calendar days before the schedule start of inventory-taking activities;
d. Conduct the Physical Count and the cleansing or reconciliation of the PPE Account balances of
the LGU Tubajon.
e. Conduct regular meetings to monitor the progress of the conduct of Physical Count and the
Cleansing or reconciliation of PPE account balances;
f. Record and document all pertinent matters related to the above subject matter, including but
not limited to meetings, reports on the physical count and cleansing of PPE, and the like;
g. Craft and issue relevant policies and guidelines regarding the One-time PPE cleansing.

Below are the responsibilities/actions to be taken by the Inventory Committee before inventory taking:

1. Request from the concerned offices all relevant reports and documents, such as but not limited
to the following:

Documents/Reports Responsible Office

Property, Plant and Equipment Ledger Cards Accounting Department
(PPELCs)
Construction In Progress Ledger Cards (CIPLCs) Accounting Department
Property Cards (PC) Property Section/Procurement and Property Unit
(PPU)
Property Acknowledgment Receipts (PARs) Property Section
List of Contracts/Project Completion Reports Engineering/Operations Department / Division
(PCRs) or any related documents/reports and General Services Division (GSD)
pertaining to Infrastructure Assets, and Building
and Other Structures
Latest Report on Physical Count of PPE / Property Section
Inventory Count Form submitted by the different
Offices as of December 31, 2023

2. Prepare Annex E and F working papers. Annex E shall be prepared by the property, and/or
Accounting / Admin and Finance IC, while Annex F shall be prepared by the Accounting/Admin
and Finance, and/or Engineering and Operations IC.
3. Prepare list of PPEs to be physically counted in the ICF format (Annex A) as the basis for the
inventory taking activities.
4. Prepare supplies and materials needed in the conduct of the physical count such as new
property stickers and others.

Below are the responsibilities/actions to be taken by the Inventory Committee during inventory taking:

Responsible Person Functions / Activities

IC Chairperson Ensure that the inventory taking activities are executed in
accordance with the approved PIP. In case there are
planned activities/procedures that cannot be efficiently
performed, the Inventory Committee shall keep records of
the alternative activities/procedures undertaken and the
reasons for the deviation from the PIP.
IC Concerned Conduct the actual physical count to validate the existence,
completeness and condition of PPEs owned by the
Municipality of Tubajon.
IC concerned Assign new property number and tag all PPE item counted
with new property stickers containing the following
information, if applicable:
a. New Property Number
b. Description of the Property
c. Model Number
d. Serial Number
e. Acquisition date and cost
f. Accountable person
g. Space for the validation/signature of the Inventory
Committee
IC concerned Record/document the physical count daily in the Inventory
Count Form (ICF) and indicate all relevant information
including but not limited to the following:
1. New Property Number
2. Condition of the PPEs such as:
a. In good condition
b. Needing repair
c. Unserviceable
d. Obsolete
3. PPE items not included in the ICF but there is
reasonable basis to consider the same as owned by
the agency. This shall be described as “found at
station” which shall be indicated under the
“Remarks” column of the ICF.
4. PPEs included in the working papers but not found
during the physical count shall be indicated in the
“Remarks” column if the ICF as “non-existing” or
“missing”.
5. Other relevant information that may be useful
during the reconciliation process.
Below are the responsibilities/actions to be taken by the inventory committee after inventory taking:

Responsible Person Functions / Activities

IC Concerned Prepare the ICF (Annex A) and submit to the IC
Chairperson for review
IC Concerned Review the ICF
IC Prepare the New Report on Physical Count of
Property, Plant and Equipment (RPCPPE –
Appendix 73 of GAM) based on the data from the
ICF. This shall be prepared in four (4) copies
distributed as follows:

Original – COA
Copy 2 – Accounting Division
Copy 3 – Property Section
Copy 4 – Inventory Committee

The report shall be certified correct by the

Inventory Committee Chairperson and Members,
approved by the Head of Agency/Entity or his/her
Authorized Representative, and verified by the
COA Representative
IC Prepare the List of PPEs found at station (Annex B
of the above-mentioned COA Circular) and
established the cost/value of the Found at station
PPEs using the market/fair value of the item.
Then submit to the Manager for review.
Manager, PPD / Head of PPU Review the List of PPEs found at Station
IC Prepare the List of Non-Existing/Missing PPEs
(Annex C) of the above-mentioned COA Circular)
indicating on the remarks column “pending
request for relief”, if there is any
Manager, PPD/Head of the PPU Review the List of Non-Existing/Missing PPEs
IC from PPD/PPU Prepare Inventory and Inspection report of
Unserviceable Property (IIRUP). See Appendix 74
form and Instruction of the GAM
IC from PPD/PPU Reconcile the Property Cards with the new
RPCPPE and PPELCs
IC from PPD/PPU Prepare PCs for items found at station
IC from PPD/PPU Renew all PARs
IC from PPD/PPU Verify non-existing/missing PPEs if these were
already disposed of with supporting IIRUP or
transferred/donated to Regions/Project
Offices/other government agencies with
supporting Property Transfer Report (PTR).
IC from PPD/PPU Submit to the Accounting Unit the original copies
of the IIRUP and PTRs for disposed and
transferred PPE items, for recording in the books
of accounts.
IC from PPD/PPU Determine the person/s accountable for non-
existing/missing PPEs not otherwise disposed of
or transferred through the copy of the PARs, PCs,
other available property records.
IC from PPD/PPU Prepare a report to inform the Administrator of
the non-existing/missing PPEs without pending
request for relief and shall prepare letters
addressed to each concerned accountable
officer / personnel demanding the production of
the PPE he/she is accountable for.
IC from Accounting Division/Finance Unit /Section Reconcile the PPELCs / CIPLCs with the new
RPCPPE and PCs
IC from Accounting Division Update the PPELCs / CIPLCs
IC from Accounting Prepare/maintain PPELCs of PPEs found at station
IC from Accounting Prepare JEVs for non-existing/missing PPEs where
accountability can still be pin-pointed to
recognized the loss of PPE and to set up the
corresponding receivables from the concerned
accountable officer/personnel.
IC from Accounting Prepare JEVs for transferred/donated PPEs not
yet recorded in the books of accounts
IC from Accounting Ensure that the total balance of PPELCs / SLs tally
with the balances of controlling PPE accounts in
the General Ledger
IC from Accounting Prepare and submit the approved request for the
derecognition of the non-existing / missing PPEs
without available records, where accountability
can no longer be distinguished, to the COA.
IC from Accounting Prepare and maintain the Registry of
Derecognized PPEs (RDPPE-Annex D), if there’s
any, as well as the copy of the approved request
for derecognition including the
records/documents pertaining thereto.
IC from Accounting Disclose in the Notes to FS information on:
a. The total amount of non-existing/missing
PPEs included in the PPE balance,
supported with breakdown as to sub-
major PPE account group, together with
the following additional information, as
applicable:
i. A request for authority for derecognition
has been filed and still pending with the
COA stating the date of filing thereof, or
still to be filed; and/or
ii. The amount and breakdown of
derecognized PPEs which were
transferred to the RCPPE based on the
authority of derecognition granted by
COA; and
b. PPEs found at stations which are still
needing appraisal, supported with
breakdown as to sub-major PPE account
groups.

VI. DURATION OF THE INVENTORY TAKING

The process of conducting the physical inventory count will span a duration of three months.

VII. PHYSICAL INVENTORY PLAN (PIP)

Suggested format of the PIP /schedule of actual inventory taking is shown in Annex G. Please be
reminded of the following columns/fields to be accomplished:

a. Office/Location - the whereabouts /physical location of the PPEs to be physically counted.

b. List of PPE items – This shall contain all PPEs to be physically counted and shall be prepared in a
separate schedule using the ICF (Annex A) form.
c. No. of days – estimated number of days to complete the Inventory taking.
d. Target Start Date – Target date (mm/dd/yyyy) to start the Inventory taking.
e. Target Completion Date – Target date (mm/dd/yyyy) to complete the Inventory taking
f. Reporting Date – regular schedule or date to report the progress of the actual inventory taking
g. Assigned Inventory Committee – Name/s of Inventory Committee assigned to conduct actual
inventory.
h. Prepared by – Printed Name and Signature of Inventory Committee Chairperson.
i. Reviewed by – Printed Name and Signature of the Deputy Administrator for Administrative and
Finance Sector or Administrative and Finance Division Manager
j. Approved by – Printed and Signature of the Head of the Agency or his/her representative.

VIII. FLEXIBILITY CLAUSE

The Regional /Project Offices have the flexibility to either adopt this PIP format or create their own PIP
that suits the specific needs of their respective offices.

IX. EFFECTIVITY

This Memorandum Circular shall take effect immediately after approval.

For your guidance and compliance.

SIMPLICIA P. PEDRABLANCA
Municipal Mayor
Date _____________