COA flags P3 million aid to barangays

CEBU, Philippines — The Commission on Audit (COA) has flagged the Lapu-Lapu City government’s disbursement of P3.05 million in financial assistance under its Garbo sa Lapu-Lapu 2025 program after finding that checks intended for barangays were issued in the names of individual barangay and Sangguniang Kabataan (SK) officials.

In its 2025 audit observations, COA said the payment arrangement was inconsistent with Section 93 of Presidential Decree No. 1445, which provides that government payments should be made directly to the creditor entitled to receive the money or to a disbursing officer for official disbursement.

The audit team warned that issuing the checks to individual officials instead of the intended barangay recipients could weaken internal controls and expose public funds to possible misappropriation.

The P3.05 million covered financial assistance for 12 barangays under the city’s Garbo sa Lapu-Lapu 2025 program.

Based on the audit report, the city issued the checks on November 13 and 18, 2025, with most of the barangays receiving P250,000 each.

The beneficiaries listed in the report were Buaya, Looc, Poblacion, Marigondon, Babag, Calawisan, Pusok, Canjulao, Gun-ob, Agus, Basak, and Sabang.

The checks for Buaya, Looc, Poblacion, Marigondon, Babag, Calawisan, Pusok, Canjulao, and Gun-ob were issued in the names of their respective punong barangays.

For Agus, the check was issued in the name of the barangay kagawad, while the check for Sabang was issued in the name of its SK chairperson.

The report listed P300,000 for Sabang, while the other 11 barangays were each allocated P250,000, bringing the total to P3.05 million.

COA noted that issuing the checks under individual officials’ names meant the proceeds could not be deposited directly into the corresponding barangay accounts without the intervention of the named payees.

According to the audit team, this arrangement reduced accountability over fund transfers and complicated the audit trail needed to establish whether the financial assistance reached and was used by its intended beneficiaries.

The Office of the City Accountant required the concerned payees to submit liquidation documents covering the amounts they received. However, COA said this requirement, although it served as a control to promote accountability, did not replace the preventive measure under Section 93 of PD No. 1445 requiring payments to be made directly to the parties entitled to receive them.

In a letter dated March 19, 2026, the City Treasurer explained that the office understood that a contingent participating in the event consisted of a cluster of two or more barangays.

Because of this arrangement, the Tourism Office prepared the payroll or voucher in the name of the contingent representative, who served as the claimant of the subsidy, instead of naming a specific barangay as the recipient.

The City Treasurer committed to taking measures to strengthen existing controls.

COA acknowledged the explanation but maintained that the financial assistance remained intended for the barangays as the ultimate beneficiaries, regardless of the organizational arrangement adopted for the event.

The audit team recommended that the city, through the City Treasurer, issue future financial assistance directly to the barangays or their official accounts to strengthen accountability, maintain internal controls, and ensure that public funds can be traced to their intended recipients.

“Accordingly, the disbursement process should be structured in a manner consistent with Section 93 of PD No. 1445 by ensuring that payments are made directly to the entitled recipients or through duly authorized disbursing officers, thereby maintaining adequate accountability, transparency, and audit traceability over public funds,” the state auditors noted. (CEBU NEWS)