The Commission on Audit-7 has found out certain violations in fund management committed by San Remigio municipal government, particularly in its appropriations, procurement, and disbursement procedures.
First was the remittance of P620,833.36 in payment of San Remigio’s P1 million long-term loan, sourced from the Presidential Social Fund in 2004, that was in turn used for relending to the San Remigio Employees Association.
The presidential fund was intended for lending to small and medium enterprises under the “Isang Bayan, Isang Produkto, Isang Milyong Pisong Programa ni Pangulong GMA.”
The COA-7 found out that the municipal government has paid its dues but then the payment made had no appropriation, violating Section 350 of Republic Act 7160, or the Local Government Code, which mandates that “no money shall be paid out of the local treasury except in pursuance of an appropriations, ordinance or law.”
State auditors, acting on this violation, recommended that the Municipal Council approve an appropriation ordinance covering the LGU’s payment of such loan, including interests.
The second violation of the San Remigio government was on procurement of goods and services, which COA-7 found to be accomplished by shopping or without public bidding, in violation of Section 48.2 of the R.A. 9184 Implementing Rules and Regulations, which mandates that public bidding shall be adopted as a general mode of procurement, with sufficient lead time for such process.
“In our audit of transactions for calendar year 2007, shopping was the primary mode of procurement of the municipality. Bidding was done only on selective basis,” COA-7 noted in its report.
COA-7 also observed that commonly used supplies were purchased by each department and purchases were not consolidated that deprived the LGU the huge discounts when they had been purchased in bulk.
COA-7 then reminded the bids and awards committee to minimize the practice of procuring goods and services by shopping and that different department heads should prepare and submit their individual project procurement management plan for consolidation to the BAC.
“Due to the absence of the Annual Procurement Plan, the municipality could not always resort to shopping as a primary mode of procurement,” said COA-7.
The third reported violation of San Remigio was on disbursement of funds, amounting to over P1.3 million, which was taken from the General Fund instead of from the 20 percent Municipal Development Fund.
COA-7 found that the municipality’s 20 percent development fund was used instead for labor in the maintenance of building, honoraria, repairs, catering services, and purchases of various equipment. “These disbursements do not fall in any category of legitimate projects,” said the report.
The state auditors reminded San Remigio that Section 3 of the Joint Memorandum Circular of the Department of Interior and Local Government and the Department of Budget and Management provides that all projects to be covered by this fund shall be used for social, economic and environmental management. — Garry B. Lao/RAE