COMMISSION ON AUDIT CIRCULAR NO.

97-005
July 1, 1997

TO : Heads of Departments, Agencies, Bureaus and Offices of the National

Government-Owned and/or Controlled Corporations, Local Government Units;
COA Assistant Commissioners and Directors; Chief Accountants/Heads of
Accounting Units; Heads of Auditing Units; and All Others Concerned.

SUBJECT : Amendment of COA Circular No. 86-200B dated January 3, 1986, increasing
toP10,000 and above the value of items to be categorized as Furniture,
Fixtures, Equipment, Work Animals and Books.

1.0 STATEMENT OF POLICY

Pursuant to the Commission's Constitutional mandate to recommend measures

necessary to improve the effectiveness and efficiency of government operations;
supportive of the national development goals and strategies to improve the quality of life
of every Filipino; and consonant with the role as partner in nation building, the
Commission continues to respond positively to enactments of government by way of
updating its issuances.

2.0 PURPOSE

This Circular is issued to increase the value of items to be categorized as

"Furniture, Fixtures, Equipment, Work Animals and Books" from P1,500 fixed in 1986
under COA Circular No. 86-200B to P10,000 and above, and to restate the affected
accounts in accordance with the GAAM, Volume II and COA Circular No. 94-009 dated
August 16, 1994.

3.0 INCREASE OF CAPITALIZATION BENCHMARK

The capitalization benchmark for items categorized as Furniture, Fixtures,

Equipment, Books and Work Animals (8-79-000) is hereby increased from P1,500 and
P10,000.

4.0 CONTROL MEASURES

In order to maintain adequate control over furniture, fixtures, equipment, books and
work animals costing below P10,000 and classified as Inventories-Semi-expendable
Supplies, Containers and Property, the following internal control measures and
accounting shall be instituted by the concerned agencies.
4.1 Furniture, fixtures, equipment, books and work animals costing below P10,000 per
unit of item shall be recorded as semi-expendable property or other appropriate
equivalent asset account in the concerned agency's books of accounts. In addition,
Memorandum Receipts (MRs) shall be maintained for purposes of control and
accountability.
4.2 The following accounts shall be used to record items classified as semi-expendable
 property:

Account Code Account Title

8-72-600 Inventories-Semi-Expendable
Supplies, Containers and
Property
8-86-600 Deferred Credits Semi-
Expendable Supplies,
Containers and Property
3-07-000 Supplies and Materials
4-36-000 Furniture, Fixture, Fixtures,
Equipment, and Books Outlay
4.3 A separate inventory-taking of all furniture, fixtures, equipment, books and work
animals classified under the category of semi-expendable Supplies, Containers and
Property and Fixed Asset accounts shall be done every year in accordance with
existing rules and regulations. Results of such inventory-taking shall be reconciled
with the books of accounts and adjustment(s), if any, shall be immediately effected.

5.0 EXCEPTIONS
5.1 Purchases and acquisition of library books and materials as well as livestock and
other non-expendable property used solely in research and development work shall
be governed by COA Circular No. 94-012 dated September 13, 1994 and COA
Circular Nos. 92-380 dated June 23, 1992 and 92-380A dated August 18, 1992,
respectively while purchases of Information Technology (IT) resources shall be
covered by COA Circular No. 97-003 dated May 22, 1997.
5.2 Request for exemptions from implementing the provisions of this Circular shall be
addressed to the Commission Proper.

6.0 REPEALING CLAUSE

All circulars and memoranda inconsistent herewith are hereby amended/modified

accordingly.

7.0 EFFECTIVITY

This Circular shall take effect immediately.

(Sgd.) CELSO D. GAÑGAN

Chairman

(Sgd.) SOFRONIO B. URSAL (Sgd.) RAUL C. FLORES

Commissioner Commissioner