COA questions P13M CPA loan to non-calamity victims

CEBU, Philippines - The Commission on Audit has called the attention of the Cebu Port Authority over the release of P13 million to its officers and employees, regardless if they were affected or not by a strong earthquake and super typhoon Yolanda last year.

COA said the CPA Board had acted beyond its authority when it issued a resolution granting the loans in the amount of P12.99 million.

“The loan grant is without legal basis as the use of the corporate funds cannot be considered public purpose,” read the audit report on CPA’s 2013 transactions.

The audit report also stated that the accounting division did not record the interest of five percent per annum from the loans granted, resulting in the understatement of the account due of officers and employees by P1,941,236.10.

COA said there is no provision in the CPA Charter that authorizes the board to grant calamity loans.

“So we believed that the issuance of Resolution Nos. 240-2013 and 251-2013 authorizing the grant and foregoing basic loan requirements, respectively, are beyond its authority,” the state auditors said.

Citing Section 4(2) of  Presidential Decree No. 1445 and Section 600 of  the Revised Administrative Code, COA stressed that to constitute a public purpose, the benefit must be bestowed upon those who will enjoy it as members of the public, and not as individuals.

“The loan grant was exclusive to CPA officers and employees  only, hence the use of government funds was not for public purpose but for the personal benefits of the officials and employees of CPA,” COA said.

Perusal of the disbursement voucher and its supporting documents, COA found that the management’s guidelines in the granting of the calamity loan, per November 22, 2013 memorandum of the general  manager, were  not followed  since  the  employees/applicants  were not required to provide proofs that they or their relatives were directly affected by the two calamities.

“No proof was required in view of Board Resolution No. 251-2013 approving the request of the CPA Employees Union to forego the requirements.  Thus the loans granted could no longer be considered as calamity assistance loan,” COA said.

During an exit conference with COA, CPA management reportedly explained that the loan was granted and that some requirements were set aside due to the clamor of the employees’ union.

COA recommended that the account “due from officers and employees” be adjusted to include the total accrued interest income of P1.94 million to reflect the corrected debit of P14.93 million to the account.

State auditors further recommended that CPA stop the practice to ensure that government  funds are utilized most efficiently and effectively and in accordance with existing rules and regulations. (FREEMAN)