City’s P5M financial aid remains unliquidated

CEBU, Philippines - The Commission on Audit (COA) finds City Hall’s disbursement of close to P3.5 million for the payment of wages of job order personnel hired last year highly  regular because this was charged to the City’s calamity fund.

Delia E. Monte de Ramos, COA Cluster Director for Local Government Units, said the personnel were actually assigned to perform regular operations of the city, particularly those under the Office of the Mayor and the Department of Engineering and Public Works (DEPW).

Monte de Ramos said the charging of  amount to the calamity fund is unlawful and it violated the guidelines provided for under Republic Act 10121 or the Philippine Disaster Risk-Reduction and Management Act of 2010.The state auditors explained that Section 1 of the law provides that the calamity fund, which is equivalent to five percent of the estimated revenue from regular sources shall be set aside as Local Disaster Risk-Reduction Management Fund.

It will be used to support disaster risk-reduction management activities like pre-disaster preparedness programs including training, purchase of life-saving rescue equipment, supplies and medicines for post disaster activities, for the payment of premiums on calamity insurance and construction of evacuation centers.

Monte de Ramos concurred to the findings of her state auditors that the officials who authorized the payment and charging of job order workers’ salaries to the calamity fund are also liable for violating the provisions of Presidential Decree 1445 or the State Audit Code.

COA said Budget Officer Nelfa Briones explained that the certifications made were limited only as to the existence of available appropriation on the obligation requests processed for the payments of the job order workers’ salaries.

The state auditors recommended that the respective payees and the persons or City Hall officials responsible for the processing, approving and paying of the highly questionable disbursements be required to refund the amount totaling to P3,499,789.

COA also found out that the unexpended balance of the Local Disaster Risk-Reduction Management Fund amounting to P105.3 million as of last December 31, was not transferred to the special trust fund so that it can be used only for calamity-related expenditures.

It was reported that the City Treasurer’s Office had already started to transfer the unexpended balance to the special trust fund in compliance with the provisions of the law.

A number of local government units (LGUs), non-government organizations (NGOs) and people’s organizations (POs) that were recipients of financial assistance from the Cebu City Government amounting to more than P5 million failed to liquidate the amount they received.

This is among the several findings of the Commission on Audit (COA) after its auditors reviewed and audited the city’s accounts and other financial transactions last year.

Records show that several NGO’s and PO’s were given financial assistance by the City Government amounting to P509.4 million to help their respective organizations.

Among the recipients were local government units badly hit by typhoon and other kinds of calamities.

The law provides that the recipients should submit utilization reports of how they spent the amount but they failed to comply.

Part of the amount were received by the recipients over two years ago but in the city’s books of account, the amount remains unliquidated.

The memorandum of agreement clearly provides that a liquidation report must be submitted to the City in compliance with accounting and auditing rules and regulations, and the unused funds after the implementation of the project shall be returned to the city.

COA told the City Government to must issue demand letters to the recipient LGUs, NGO’s or PO’s to liquidate the amount they have received and refund the unexpended balance.

The state auditors also reminded city officials not to grant another financial assistance to the concerned LGUs, NGO’s or PO’s until they have liquidated their previous financial assistance. – (FREEMAN)