COA to Bogo: Explain cash advances, RATA, cash gifts

Unliquidated cash advances, extra cash gifts and representation and transportation allowance exceeding the allowable amount are what officials of Bogo City have to explain to the Commission on Audit in relation to their operations last year. 

After auditing Bogo’s 2007 operations, COA found out that the city failed to liquidate cash advances amounting to P1,456,430.31 representing intelligence funds and travel expenses; that it has given out extra cash gifts totaling P2,300,574; and issued RATA amounting to P4,158,014.30, which are beyond the limitation for personal services.

“A review of the agency’s annual budget showed that the city exceeded its Personal Service limitation,” COA said in its audit report, adding that the city is only allowed up to P30, 871,524 for personal services, which is equivalent to 45 percent of the actual regular income of the succeeding year.

Based on the town’s personal services appropriation, COA found out that Bogo had P37, 739,052.57 or with an excess of P7, 002,528.38. Meanwhile, the town’s total actual personal services for 2007 totaled P35, 145,212.71 or with an excess of P4, 273,688.61. This reportedly violated the 45 percent rule.

COA has instructed Bogo’s budget officer to strictly follow the Department of Budget and Management Circular in releasing the benefits of the city’s officials and employees.

COA also observed that cash advances granted in the previous years amounting to P865,265.72 remained unliquidated and that various employees were granted cash advances last year even though they were not bonded.

Of the total cash advance granted for 2007 amounting to P8,771,865.15, only P8,196,143.06 was liquidated, COA said.

COA said the unliquidated cash advances would not have accumulated if the city strictly enforced the rules and settled the liquidation immediately.

Section 2.0 of the Local Budget Memorandum No. 54 provides that the grant of additional benefit or extra cash gift shall be charged against the savings of the LGU’s subject to pertinent budgeting, accounting and auditing rules and regulations.

“Municipal officials and employees should adhere to the rules and regulations on the grant, utilization and liquidation of cash advance pursuant to COA circular 97-002 otherwise administrative and legal sanctions be imposed for violation,” COA said.

COA Circular 97-002 provides that cash advances must be liquidated at the end of the year. The same circular also provides remedial measures to ensure full liquidation, including withholding the salaries of officials concerned.

The guidelines also state that officials or employees who have outstanding unliquidated cash advances should not be given additional cash advances.

In its report, COA cited Bogo’s budget officer as saying the city had implemented the rate of a first class city for its RATA, notwithstanding the fact that Bogo is still a newly created sixth component class city. This discrepancy could have caused the erroneous computation for the RATA and resulted to the overpayment of the same.

COA further found out that the city paid a retainer’s fee to a legal consultant, amounting to P192,647, which is reportedly a violation of the rules. In 1998, COA issued a circular, which prohibits the hiring of private legal counsels to represent local government units in court.

In their post-audit check dated December 28, the amount represented the payment of the contract of services of the lawyer as city legal officer from July 1 to December 31.

However, COA noted that the contract of service included a contract amount of monthly compensation equivalent to that of a department head and further included bonuses, cash gifts and other additional benefits.  Garry B. Lao/JMO

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