Capitol will hire accountants to look into its P872M liability

The provincial government will be hiring accountants to look into the erroneous accounting entries that earned Capitol at least P872 million in liabilities last year.

This after Governor Gwendolyn Garcia expressed surprise when she found out that the province has huge liabilities, which was contrary to her report during her State of the Province Address in July that Cebu remains debt-free.

While Cebu ranked first in terms of gross income among the 79 provinces in the country, it only landed seventh in terms of net income. The province earned P1.5 billion gross income but it incurred about P1.26 billion expenses, leaving only P247.07 million in net income in its coffers.

This prompted the governor to issue a memorandum to Capitol pre-audit section head Manual Guial, who in return explained that the province's P872 million liabilities was due to "wrong accounting entries" of the provincial accounts.

It was found out that provincial accountant Marieto Ypil had erroneously recorded the assets as liabilities.

Garcia said the errors, which have been going on for years, should be corrected although she did not categorically say if she would change guards at the accounting office.

The governor expressed disappointment when she found out that the Commission on Audit noted the same observations in the Capitol's 2005 budget as in the past years despite the fact that she regularly met with COA officials and concerned Capitol department heads to find out the necessary corrections.

One erroneous entry that Guial cited in his report to the governor was the P200 million that the province earned from selling lots. When asked to explain, Ypil reportedly said that Capitol was going to part with properties so that he had it recorded as a liability instead.

Even the Capitol's payment of P55 million to national government agencies such as Government Service Insurance System was recorded as liabilities. Garcia said that also recorded as a liability was the Capitol's financial assistance to local government units.

"I intend through our outsourcing to employ a number of accountants to minutely go over all of our documents and books in order to come up with a 2006 financial statement at the end of this year that is true, accurate and reflective of the actual financial position of the province..." Garcia said.

She stressed that this is aimed "to guide me accordingly, and the plans, programs and direction that we are pursuing for I cannot be wisely guided with a financial statement that claims and creates a P872 million liability borne out of totally erroneous interpretations." - Cristina C. Birondo/LPM