The Commission on Audit has directed the municipality of Moalboal to furnish it with a project proposal to support the acquisition of heavy equipment amounting to P5.8 million, which COA said could have been used for “worthwhile projects.”
In its report for the audit it conducted on Moalboal for 2007, COA said the town failed to show records of the project proposal that would support payment for the backhoe loader with breaker and a grader the town has purchased from Monark Equipment Corporation.
On October 31, 2006, former Moalboal Mayor Inocente Cabaron filed a loan with the Land Bank of the Philippines amounting to P13.521 million to finance the town’s infrastructure and development projects.
The loan was subsequently released on September 28, 2007 and P5,858,277 was paid directly to the winning bidder, Monark Equipment, which was recorded in the books accounts December last year.
However, the P5.8 million was P498,843 short of the P6,357,120 per purchase order because it was paid based on the approved Letters of Credit and the prevailing rate when the transaction was consummated.
To pay for the balance, Moalboal released its first payment on December 28, 2007 amounting to P435,318.43 for the interest and principal at P142,404.28 and P292,913.85, respectively. Likewise, the interest of 9.75 percent imposed by the bank is subject to quarterly re-pricing.
COA said the town an approximate P2,848,085.60 as interest for the next five years, on top of the money it would need to maintain the equipment.
“We cannot tell at this early whether the action of management was beneficial for the people of Moalboal since the equipment have just been availed but just wanted to point out the interests it has to pay for the loan…unless management maximizes the utilization of the heavy equipment and make it self-liquidating to help cover up the payment of interest at an approximate amount of P2,848,085.60,” COA said.
The town’s officials said they badly needed the heavy equipment to implement the road projects in the barangays. They said an ordinance will be enacted that would enable the town to rent the heavy equipment to other entities once its own projects are accomplished. — Garry B. Lao/JMO