COA: Bogo violated local budget memo

Bogo City violated a Local Budget Memorandum when it exceeded from what was authorized limitation for personal services, the Commission on Audit said.

Based on the details and comments of the COA, it was found out that then municipality of Bogo granted extra cash gifts and additional benefits to its regular and casual employees totaling P4,537,399.62 last year.

Review of the municipality’s transactions revealed that regular and casual employees were granted extra cash gifts at P20,000 and P5,000, respectively, totaling P2,754,950; with additional benefits granted to regular employees equivalent to their one-month salary, while casual employees received P3,750.00 to P4,950.00 each for a total amount of P1,782,449.62.

The total actual personal services expenses had exceeded by P8,281,457.40 or 29.27 percent over the allowable personal service limitation while the personal service appropriation had exceeded by P16,508,351.03 or 58.34 percent.

Local Budget Memorandum No. 2006-51 provided for the grant of additional benefits and extra cash gifts to personnel of LGUs, but subject to “pertinent budgeting, accounting and auditing rules and regulations.”

Section 325 of Republic Act 7160 states that the total appropriations for personnel in one year should not exceed the 45 percent for first- to third-class provinces, cities and municipalities; and 55 percent of the total annual income from regular sources for fourth-class or lower.

Under COA rules, the personal service account of local governments covers basic pay, allowances, bonuses, cash gifts, incentives, and benefits of government employees and officers.

It was also discovered that medical supplies amounting to P3,999,621.46 from Le Jumont Pharmaceuticals were purchased out of the Priority Development Assistance Fund intended for payment of accounts payable.

The COA said that the payment was not in conformity with Section 305 of Republic Act 7160. Under the section, trust funds in the local treasury shall not be paid out except in fulfillment of the purpose for which the trust was created or the funds received.

A letter request was sent to then Bogo Mayor Celestino “Tining” Martinez III to the Secretary of the DBM for the realignment of the use from its intended project to the purchase of medicines, but no approval yet was received from the Secretary of the DBM prior to the purchase of medicines.

Although there was an affirmation from DBM, the commission noted that the letter was received by Bogo on July 11, 2006 after the bidding was conducted on April 25, 2006 and the purchase of medicines was paid on June 29, 2006.— Garry B. Lao/MEEV