CEBU, Philippines - The Commission on Audit (COA) has discovered that the Cebu City officials have violated state audit procedures when they made some payments without proper supporting documents and for an excessive debt servicing cost.
COA-7 regional director Delfin Aguilar advised Mayor Tomas Osmeña to always comply with the proper procedures that any government expenditures should be properly supported with documents.
Supervising auditor-5 Helen Hilayo said the state auditors have discovered that the city had spent P944,044 for extra ordinary expenses from January to May 2008 despite of incomplete supporting documents.
The state auditor said most of the expenses incurred were spent for food and drinks served during meetings of city officials and accommodation of various visitors without supporting documents to indicate the names and how many persons were entertained, including the purpose why they were entertained using public funds.
Hilayo said most of the disbursement vouchers were supported only with receipts, without even indicating the mode of procurement used and the purpose for which such expenses were incurred.
“The propriety and legality of these expenses could not be assessed due to inadequate documentation or incomplete information in the supporting documents,” Hilayo said in her report to Aguilar.
According to Hilayo the accounting personnel of City Hall charged with pre-audit functions should ensure that disbursement vouchers are supported with adequate pertinent documents to prove the legality and propriety of the expenses incurred.
Meanwhile, the state auditors also found out that the city officials also violated the provisions of the Government Accounting and Auditing Manual (GAAM) when they spent P729.3 million in 2008 for the payment of its debt services that exceeded the allowed 20 percent of the regular income.
The COA annual audit report of Cebu City for 2008 showed that the city’s regular income under general fund-proper was only P1,782,480 so the state auditors said the allowed amount for debt servicing is only P356,495,818 and not P729.3 million.
“The very high cost of debt servicing may jeopardize the provision of basic services to the city’s constituents,” the state auditors said.
The amount for the city’s debt servicing increased because of the interest of the city’s loan from Japan when the city failed to pay on time its loan obligation.
Osmeña was advised by the state auditors that he should instruct the local finance committee to appropriate funds for the payment of interest on all loans when they fall due to prevent such similar case so that basic services to the constituents may not be jeopardized due to the payment of high financial costs.
In other audit report, COA also discovered that the city had spent millions of pesos out of the so-called Pagcor funds even if such expenses are not in accordance with the condition as provided for in the agreement.
COA said the charges to the Pagcor funds accounts of the traveling expenses and registration fees in national conventions of court employees, purchase of air-conditioners and other office equipment for some national offices serving the city, payment of meals, financial assistance to the Sinulog Foundation Inc. for the holding of grand parade and the purchase of vehicles for the use of the General Services Office are not in accordance of the guidelines.
“The improper use of the Pagcor funds – the city’s share of the income of the Philippine Amusement and Gaming Corporation – diminishes the amount intended for the marginalized sector of our society,” the state auditors said.
The state auditors advised Osmeña to prioritize the use of Pagcor funds for projects and activities which will redound to the social and economic welfare of the less fortunate segments of the community, as envisioned by its grantor, so that the much needed government assistance can reach the intended beneficiaries. — Rene U. Borromeo/NLQ (THE FREEMAN)