Dumanjug leaves P1 million loan idle
The Commission on Audit said the municipal government of Dumanjug committed a violation in handling a P1-million loan they received from the Office of the President.
In its 2007 audit report, the government auditors said that the town failed to invest the loan immediately, which caused it to defer the benefits it could have enjoyed.
The amount came from the President’s Social Fund for her “Isang Bayan, Isang Produkto, Isang Milyong Pisong Programa ni Pangulong Gloria Macapagal-Arroyo”, a five-year term loan with a grace period of one year and at six percent interest per year.
COA said from the time the loan was released to Dumanjug, it was not utilized by the town for the specific purpose. The memorandum of agreement was signed between Mayor Cesar Baricuatro and Secretary Ricardo Saludo last Nov. 2004.
The amount was entered as a trust account in the books and deposited as a time deposit and as collateral for its P1.5 million loan with the Land Bank of the Philippines, which is payable in one year.
In a letter sent to Saludo last December 2006, Baricuatro sought approval for the loan to be used for the construction of a slaughterhouse for its economic enterprise, but no reply was received.
Accounting records also showed that as of
The interest income it earned from the current/time deposits were just minimal at an average of 2.6 percent compared to the interest it has to pay for the loan.
COA also recommended that appropriate funds for the repayment of principal and interest in the total amount of P653,750, which has become due and payable to avoid paying any penalties.
The auditors also wants the town to communicate with the Office of the President for adjustment on the loan repayment schedule since the loan was not used six months after it was given, or the town should propose for a compromise or restructuring of the loan.
Meanwhile, COA also found out that close to P1 million additional and extra cash gifts granted to officials and employees exceeded its limitation on personal services.
The town appropriated P943,000 at P10,000 each. But based on the town exceeded the 45 percent personal services limitation required considering that Dumanjug is a third-class municipality.
The state auditors said that Dumanjug violated the Local Budget Memorandum No. 54, which states that the additional benefit and extra cash gift shall be within the personal services limitation.
The state auditors have recommended that all officials and employees who received the P10,000 each should refund the amount immediately. — Garry B. Lao/BRP
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