The Commission on Audit (CoA) found that the local government of Cebu City’s 2024 financial statements contain material misstatements and questionable expenditures totaling P11.18 billion, according to the agency’s 2024 Independent Auditor’s Report.

CoA stated that while the city’s financial statements are partially compliant, the errors undermine their overall reliability.

The auditors cited P11,180,308,503.34 in expenditures that were reported as “actual amounts” despite being based merely on obligated funds and not on actual disbursements.

This practice, CoA said, is a departure from proper accounting standards and “affected the reliability, transparency, and accountability of financial reporting.”

Obligated funds are money committed through approved contracts but not yet spent, while actual disbursements reflect real cash outflows paid to vendors.

The audit report flagged massive deficiencies in the city’s asset records. The CoA could not ascertain the reliability and existence of P4.25 billion in inventories due to incomplete physical counts.

Furthermore, balances for Property, Plant and Equipment (PPE) could not be validated because of an incomplete physical count and an unreconciled difference of P1,465,962,940.84 between the City Accounting Office and the Department of General Services.

The CoA also cited that P1,343,757,921.72 in PPE had been written off without following mandated guidelines for one-time cleansing, resulting in understated assets accounts. Minor items were also overlooked, including unaccounted breeding stocks valued at P38,600, contributing to unreliable asset entries.

It also identified several issues related to unrecorded income and missing liabilities, as the city failed to recognize P340,326,307.25 in realized revenue from advance Real Property Tax collections.

Also unrecorded were donated PPE items worth P22,997,999.17, which included four patrol motorcycles and 11 K9 working dogs.

Liability reporting was also deemed unreliable due to the non-recording or non-disclosure of three pending court cases with unfavorable outcomes that amounted to P13,073,627.82.

Other issues included negative balances totaling P8,325,815.87 in the subsidiary ledgers of four accountable officials due to uncorrected errors, which distorted the reported Cash Local Treasury account.

Additionally, bank reconciliation issues persisted, with auditors noting a net unreconciled difference of P4,821,389.82, which affected the reported P3.66 billion Cash in Bank balance.