CEBU, Philippines - The Municipality of Balamban has violated an order from the Department of Finance for maintaining accounts in a private banking institution without prior approval.
The Commission on Audit said that it is in violation of DOF Department Order No. 27-05, dated December 9, 2005 which provides that “All Provincial, City and Municipal Treasurers, Commissioners of BIR and BOC, Heads of attached agencies of the DOF and Heads of GOCCs shall deposit and maintain their depository accounts with Land Bank of the Philippines, and Development Bank of the Philippines.
By way of exception, and subject to prior approval of the DOF, Provincial, City and Municipal Treasurers, Commissioner of BIR and BOC, Heads of attached agencies of DOF and Heads of all GOCCs may likewise deposit their funds and maintain depository accounts with banks where government has shares of stocks of which are allowed by law to be government depository banks.â€
In the audit of the municipality, as of December 31, 2012, COA noted that Balamban maintained three General Fund – bank accounts with PNB – Toledo City Branch.
COA also noted that the municipality availed of loans amounting to P17M from the PNB under promissory note and hold-out agreement in 2008 and 2009 to finance the site development of Mandayao Hills, Balamban Housing Project. The loan balance as of December 31, 2012 was P2.5 million.
COA recommended that the municipality transfer its bank accounts with the PNB to Land Bank of the Philippines – Toledo City Branch, as soon as the loans payable are fully paid.
This is to eliminate exposure of government funds from certain risks, particularly on possible insolvency and irregularities of private banks, otherwise, secure authority from the DOF for its deposits and maintenance of the bank accounts with the PNB, the COA recommended.
The municipality has reportedly informed the audit team that they are going to transfer the accounts with the PNB to LBP once the loans are fully paid. — (FREEMAN)