COA: Toledo gave funds sans papers

CEBU, Philippines - The Toledo City Government has transferred funds amounting to P1.1 million to two organizations even if the transactions were not supported by required documents.

This is what the Commission on Audit (COA) discovered in its review of City Hall’s 2012 disbursements. It identified Lingap Children’s Development Center, Inc. and Consolatrix College as recipients of the questioned allocations.

It cited COA Circular No. 2007-001 that sets that a non-government organization (NGO)/people’s organization (PO) shall submit a proposal or application for funding accompanied by, among others, a certificate of registration with concerned government agencies.

The circular provides the guidelines in the granting, utilization, accounting and auditing of funds released to NGOs and Pos.

It also requires a financial report audited by an independent Certified Public Accountant for the past three years preceding the date of project implementation. This is to insure that the NGO/PO has a stable financial condition and that the funds provided shall not be its sole source of funds.

Other requirements are the work and financial plan; sources and details of proponents’ equity participation in the project; complete project proposal approved/signed by its officers, which shall include the objectives, target beneficiaries, feasibility studies, risk assessment, designs, plans, blueprints, charts, among others.

The project should likewise be covered by a Memorandum of Agreement (MOA), which shall embody the terms of reference.

The City has been giving an annual donation of P1 million to Lingap Children’s Development Center, Inc., while Consolatrix College also got P100,000 as financial assistance for the Hinulawan Festival in 2012.

However, COA’s verification of fund releases disclosed that the donations were not supported whatsoever by documents as required, thus casting doubt on the legality, validity and propriety of their disbursements.

Releases to the Lingap Children’s Development Center, Inc. and Consolatrix College were made on February 22, 2012 and May 10, 2012, respectively.

“However, upon verification, no Fund Utilization Report, which shall be certified by the Accountant of the above non-government organizations and approved by its president or chairman, has been submitted to the City as at year end,” the audit report said.

In response, the City explained that it was not aware of the documentary requirements stipulated in COA Circular No. 2007-001.

However, the circular, dated October 25, 2007, was addressed also to city and municipal mayors aside from the governors of provinces and heads of all government bureaus and agencies, among others.

COA recommended that the City submit the required supporting documents on the funds disbursed to the two organizations. 

Supposedly, release of funds for such purpose requires a lengthy process and equally lengthy list of requirements to be fulfilled first.

In particular, Section 6.1 of the circular stipulates that “no funds shall be released before the signing of the MOA.”

COA audited the transaction in fulfillment of its role under Section 7 of the said circular, which is to audit such grant of funds.

Its tasks include ascertaining the GO’s (government organization) compliance with the accreditation, awarding, and monitoring procedures; and compliance of both the GO and the NGO/PO with the provisions of the circular and of the MOA entered into by the parties concerned.

The COA is also mandated to check the “economy, efficiency, and effective of the fund utilization” and to validate the “receipt of the benefits, such as services, goods, or funds, by the intended beneficiaries”.

Section 9 of Circular No. 2007-001 also sets that legal remedies be pursued as sanction to violations of its provisions.

This time, though, COA merely advised City officials to stop the practice of releasing funds without documentary requirements; otherwise, they shall be held liable for irregular releases of funds. —(FREEMAN)