STRENGTHENING THE MORAL MOORING
Safeguarding of Assets
Definition of Safeguarding Asset
Protecting the assets through a good internal control system. The objective is to guard against
loss of assets because of theft, accidental destruction, and errors. Assurance must exist that
transactions related to assets have been properly processed and that appropriate physical
handling and control over assets exist.
Safeguarding of assets is defined as procedures that "provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements."
Based on the National Guidelines on Internal Control Systems
Safeguard asset is responsible stewardship of public resources requires that all money and
property officially received by the a public officer in any capacity or upon any occasion must be
accounted for as government funds and government property.
Government property shall be taken up in the books of the agency concerned at acquisition
cost or an appraised value.(Sec 42, Chapter 7, Subtitle B, Book V, Title I, EO 292 or the
Administrative Code of 1987)
Safeguarding assets in the public sector involves the judicious use of :
government fund
facilities
including document
records and;
human resource in the
delivery of public services
Proper documentation and recording are appropriate controls that eliminate the vulnerability
of assets to misuse, loss, distruction and other hazzards.
Proper procurement and use of the Philippine Government Procurement System (PHILGEPS)
improves the likelihood that quality goods and services are obtained at the least cost and in a
timely and transparent manner.
Policies and procedures of an agency should also be designed to prevent or detect loss of assets
and record on a timely basis
INTERNAL CONTROL ESSENTIALS IN SAFEGUARDING ASSETS
Internal control refers to the plan of organization and all the coordinated methods and
measures adopted within an organization or agency to safeguard its assets, check the accuracy
and reliability of its accounting data, and encourage adherence to prescribed managerial
policies.
This legal definition is supplemented by the policy that “all resources of the government shall
be managed, expended or utilized in accordance with law and regulations and safeguarded
against loss or wastage through illegal or improper disposition to ensure efficiency, economy
and effectiveness in the operations of government. The responsibility to take care that such
policy is faithfully adhered to, rests directly with the chief or head of the government agency is
concerned“(Section 1, Chapter 1, Subtitle B, Book V of the Administrative Code of 1987).
The definition of internal control is amplified in the COA Government Accounting and Auditing
Manual (GAAM) Volume III which states that “internal control comprises the plan of
organization and all the methods and measures adopted within an agency to ensure that
resources are used consistent with laws, regulations and policies; resources are safeguarded
against loss, wastage and misuse; financial and non-financial information are reliable, accurate
and timely; and operations are economical, efficient and effective” (Section 32, Title 2, Volume
III of the GAAM).
Internal control over safeguarding of assets against unauthorized acquisition, use or disposition
is a process, effected by an entity's board of directors, management and other personnel,
designed to provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the entity's assets that could have a material
effect on the financial statements.
Such internal control can be judged effective if the board of directors and management have
reasonable assurance that unauthorized acquisition, use or disposition of the entity's assets
that could have a material effect on the financial statements is being prevented or detected on
a timely basis.
