COA to LGUS: Improve market collections

CEBU, Philippines - The Commission on Audit has asked the local government units to adopt measures to improve the collection of income from its market operations.

Last year’s audit findings reveal that some LGUs in the Province of Cebu spent more on market operations than revenue collection, resulting to losses in the economic enterprise.

“In the verification and analysis of the operations for calendar year 2010, it was noted that the operational expenses of the Market Operations exceeded its total revenues during the same period,” the audit finding reads.

In Danao City, operations of the market incurred operational expenses of P12.2 million which was 5.33 percent higher than its P11.5 million income although the targeted income for the year in the amount of P10 million was met by the city government.

The same findings were also noted in the municipality of Compostela with no elected officials implementing the programs for more than a year now.

COA also found out that market operations in Compostela incurred expenses of P550,000 which was 37.5 percent higher than its income of P400,000 thereby incurring a loss of P150,000.

“Hence, it would be appropriate to minimize the expenditures to match with the income earned or find other means on how to equate expenses against income,” audit report said.

Although COA recognizes that an LGU is a service-oriented entity, it said that market operation as an economic enterprise should not be operated as additional burden to the government but as an income-generating venture that will help augment its limited resources.

“It should be noted that the objective of this economic enterprise is to maximize returns at least cost and provide additional income to the city or municipal government,” it said.

COA reported that some market operations have consistent incurrence of losses for the past years although the trend of such operational loss is diminishing.

COA recommended that LGUs should design/adopt measures and strategies to remedy the low collection of income from market operations and likewise minimize the expenses in relation to the said enterprise to at least break-even or lower their operating expenses. (FREEMAN)