COA to Rama: Be prudent

CEBU, Philippines - The Commission on Audit (COA) recommended to Mayor Michael Rama to make a thorough review of the operations of the city in order to increase its revenue collection or reduce expenses as one way to stop the declining net surplus of the city.

COA also advised the mayor to adopt the provisions on austerity measures contained in Administrative Order No. 103.

The state auditors have noticed that the city’s net surplus has continuously gone down from 2008 to 2012.

Records show that in 2008, the Cebu City government’s net income, after deducting the expenses, was still P956 million for the General Fund and P163.2 million for the Special Education Fund (SEF).

The following year, the city’s net surplus for the General Fund was still P931.8 million and P65.2 for the SEF.

The amount of net surplus again went up to P1.3 billion and P62 million for the General Fund and SEF in 2010, then P598 million for the General Fund and P79.8 million for the SEF in 2011.

 But according to Delia Monte de Ramos, COA Cluster Director for Local Government Units in Central Visayas, the figure continued to go down last year to only P195 and P9.3 million for the General Fund and SEF, respectively.

“The trend is alarming since it shows that income earned by the city was being used up by the expenditures needed for the operation of the city. These expenditures are not Capital Outlay such as public infrastructures with long term benefit to the public, but it is the cost of running the city within the specified period which only benefits that given period,” the COA report stated.

Monte de Ramos said the financial audit conducted by the state auditors showed that the decrease in net income of the city was attributable to the material increase in several personal services or the salaries and benefits of the employees and maintenance and other operating expenses (MOOE). 

For the salaries of regular City Hall employees, the amount went up from P249.5 million in 2011 to P285.8 million in 2012, while the salaries of the contractual workers increased from P15.7 million in 2011 to P18.9 million last year.

It was also learned that the salaries of the casual workers also went up from P401 million in 2011 to P442.2 million in 2012.

The total expenses for personal services that already included all benefits had increased from P1.049 billion in 2011 to P1.180 million last year.

COA reminded the mayor of the provisions of Administrative Order No. 103 which strongly urged all local government units to adopt the provisions of the austerity measures of the government by reducing the cost of its expenses.  (FREEMAN)