COA tells Borbon execs, employees to refund RATA increase, bonuses

CEBU - The Commission on Audit directed officials and employees of Borbon town to refund the increase in the representation and transportation allowance and extra bonuses granted to them last year because the funds were illegally disbursed.

COA said the disbursement of the close to P2 million for the increase in RATA and extra bonuses was illegal because it was released without enacting a supplemental budget.

COA said the town violated Section 305 of the Local Government Code of 1991, which states that no money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or law.

Borbon reportedly released P1,456,500 for the increase of representation and transportation allowance (RATA) amounting to P245,000; extra cash gift for officials and employees amounting to P1,020,000 and yearend bonus amounting to P191,400.

COA said even the municipal council secretary does not have a record of the disbursements.

Yet even if the transactions were authorized, COA said the same would still have been disallowed because the disbursements exceeded the 55 percent limitation on personal services.

Aside from the illegal disbursements, COA said Borbon also has an accumulated unliquidated cash advances amounting to P2,079,857.02.

Government auditors attributed the lapse to the failure of the town to liquidate their cash advances on time, as well as to the granting of new cash advances despite the previous ones still unliquidated.

COA further noted the absence of a full time accountant, which reportedly contributed to the delay in the submission of accurate financing statements. Mayor Bernard Sepulveda was then directed to appoint a full time accountant.

“The municipal mayor should immediately hire a full time accountant so that accurate and reliable financial reports can be submitted on time,” the COA said.

The town’s yearend trial balances as of December 31, together with its supporting schedules and the financial statements were due for submission on Feb. 11, 2008, however, the reports were submitted only after almost two months on April 12, 2008. The reports were also reportedly incomplete. 

Only the consolidated balance sheet, consolidated statements of income and expenses, and cash flow were submitted on April 12.  

A COA circular provides that cash advances for salaries and wages should be liquidated within five days from the 15th or from the end of the month, corresponding to a particular pay period.

The same circular also disallows additional cash advances to any official or employee unless previous cash advances have been settled. — Garry B. Lao/JMO (THE FREEMAN)