COA: Boljoon lost P.5 million in unearned income

CEBU, Philippines - Mismanagement of its waterworks system and the failure to collect taxes during market days prevented the town of Boljoon from collecting revenues close to P.5 million in 2007.

The Commission on Audit-7 said that such revenues would have augmented town operations in 2008.

“In order to improve and earn better income for its waterworks system, proper management of the operations must be instituted. Collection efforts on delinquencies must be improved,” the COA report read.

COA regional director Delfin Aguilar furnished a copy of their audit report to Boljoon Mayor Deogenes de Rama on May 29, 2009.

De Rama has assured COA that they will institute corrective measures including the possible computerization of their collection system.

In 1998, the town established a water system and charged P2 to P4.50 for the first 10 cubic meters of water. It’s P2 for residential purposes, P3.50 for commercial and P4.50 for industrial use. Water rates have remained the same since.

The consumption in excess of 50 cubic meters is charged P10 for residential, P15 for commercial and P20 for industrial use.

“The municipality has a waterworks system which when properly managed can generate income to support its projects,” the report read.

However, the municipal government only managed to collect P488,186.55 in their 2008 operations while the year’s expense reached P745,882.74 earning a deficit of P257,696.19.

The auditors said that delinquency was encouraged because of failure of the municipal government to impose penalties on their delinquent water consumers.

One consumer was found to have P127,724 in unpaid dues. But the municipal government has not initiated legal action to compel the delinquent water consumer to settle his delinquencies.

As of December 2008, a total of 98 water meters were also found to be defective.

In their discussion with COA, the municipal treasurer blamed the failure of their office clerk to prepare their ledgers for the collection deficiency.

“When consumers come to their office to pay their bills, the collectors cannot make the subsidiary ledger as reference so they will just follow what is stated in the bill which does not reflect the unpaid amount…As a result there were instances when current bills were paid first but the previous months were not,” said the audit report.

The clerk in charge of the town’s water system said she cannot cope with the demands of her work since she is working alone. She does the issuance of water billing, record payments and send out notices to delinquent payers.

The municipal water system has more than 1,000 concessionaires, she added.

Auditors said that the municipal government should collect the unpaid bills, adjust their water rates in order to cope with rising prices of commodities and replace damaged water meters.

Also, the town has unpaid water bills amounting to P361,516.15.

The municipal government was also asked to pass an ordinance to authorize the treasurer to tax participants of the barangay San Antonio’s market day.

Farmers selling their goods during the January 14, 2008 market day told auditors that they were not taxed for selling their produce there.

“Aside from waterworks, market (operations) is also another source of income that a municipality can have,” read the audit report.

While they failed in their collection, auditors said that the municipal government incurred an overpayment of P101,234.59 in withholding taxes which they paid the Bureau of Internal Revenue.

In their post audit of disbursement vouchers, auditors found that the overpayment resulted from the payment to BIR of their officials and employees 2007 withholding taxes even if such due have not been deducted from their salaries.

    The town, however, assured the commission that adjustments will be made so that the overpayment could be deducted from their collectibles. — Garry B. Lao/BRP (THE FREEMAN)