Ong seeks timely release of 30% RPT shares to barangays

CEBU, Philippines —  The Cebu City Council, through Association of Barangay Councils (ABC) President Franklyn Ong, manifested the need for the timely distribution of the 30 percent share of the barangays in real property tax (RPT) for this year.

This, after the Commission on Audit (COA) flagged the City Government’s non-distribution of the 30 percent share of the barangays in RPT that amounted to P204 million.

During the Cebu City Council regular session on Wednesday, Ong raised the “failure” of the City Treasurer’s Office (CTO) to distribute the barangays’ share, which deprived the component areas of the city.

Ong said it is also a violation of the Local Government Code of 1991, which mandates that the CTO should distribute the barangays’ share on the fifth day of every quarter from the time they receive the RPT revenue.

He said that the share of the barangays is crucial for their survival as it is a primary resource to support their services.

“This humble manifestation is just hoping that moving forward, our treasury department can timely distribute the RPT share of the barangay,” said Ong.

In the 2024 audit report of the COA, among the observations noted by the auditors was the non-recognition of the realized portion totaling up to P340 million of the deferred revenue from the advance collection of RPT. According to the state audit, this deferment has resulted in an understatement of the City's reported income.

The state auditors also flagged the non-distribution of the 30 percent share for the barangays, totaling up to P204 million for the past fiscal years 2020 to 2024. This non-compliance, the COA noted, had deprived the component barangays of their “lawful share” from RPT income.

The COA emphasized that the Cebu City Government has an existing in-house RPT program, which served as the basis for collection utilized by the Cebu Treasurer’s Office (CTO) and the City Assessor’s Office (CAO).

In the audit report, it was noted that the assessor's office was still hesitant to proceed in taking up the realized portion until after its book balance matches or reconciles with the record of the CTO.

“It was also revealed that the in-house RPT system cannot pull out data in real time. All changes made to particular data from the latest date have a retroactive effect since the date of recording,” the report read.

The COA reported that the CTO already explained that one reason for the discrepancies—especially for advance payments recorded prior to 2024—was the application of tax credits as advance payments.

It added that this has resulted “somehow in penalties in the system that they cannot explain.”

It was said that the differences in the records, mainly due to the rounding of decimal places, coupled with the real-time posting issue of the RPT system, prompted the CTO to stop applying tax credits as advance payments.

It was also because of this that the supposed 30 percent RPT share of the barangays was still not recorded and distributed in the year the advance RPT collections were realized, which would have augmented the barangays' resources for programs and projects.

Further verification disclosed that part of the total balance of the reported deferred revenue for RPT collections is the 30 percent share of the component barangays for the past five years.

“Thus, in adherence to the abovementioned provisions, these 30 percent share should have been already transferred to the Due to LGUs account and eventually distributed to the different barangays in the year they are supposed to be realized,” the COA report reads.

In line with this, COA reiterated its recommendation that Management, through the CAO and CTO, alongside the Management Information and Computer Services, develop effective measures to address the recorded discrepancies which made the CAO reluctant to adjust the City's books of accounts.

The state auditors further recommended that the methods or courses of action to be developed must be supported by a clear plan specifically stating the responsibilities of each office involved and a realistic timeline.

It also stated that once the discrepancies are sorted out, the CTO shall provide the CAO with the distribution schedule of the 30 percent barangay share of RPT.

It further recommended that the assessor's office immediately record the realized portion of the advance collections and the distribution of the 30 percent RPT share of barangays using the following proposed adjusting entries. (CEBU NEWS)