Dapitan City COA Audit Findings 1
July 1, 2010
DETAILS OF SIGNIFICANT FINDINGS
AND RECOMMENDATIONS
Finding No. 1
The City Government could have saved P1,811,605.12 on the payment of overtimes services covering the period from January-November 30, 2008 to permanent, temporary and casual employees had it implemented CSC-DBM Joint Circular No. 2, series of 2004 on the non-monetary remuneration of overtime services.
Joint Circular No. 2, series of 2004, of the Civil Service Commission and Department of Budget and Management dated October 4, 2004, provides for the non-monetary remuneration for overtime services rendered.
The circular provides for a uniform policy to avail of compensatory time-off in lieu of overtime pay pursuant to Section 1(d) of Administrative Order No. 103, issued by the Office of the President directing the continued adoption of austerity measures in the government.
Under this policy, an employee who renders services beyond the regular working hours will be given Compensatory Overtime Credit (COC) which could be used as time-off within the year these are earned, subject however to its uses and limitation, thus, if availed, he is excused from reporting to office during the regular official time with full pay and benefits.
The city government for the period from January, 2008 to November 30, 2008 pays a total amount of P1,811,605.12 for overtime services to various regular and casual employees assigned to different offices, details of which are as follows:
Office/Department
Amount
City Tourism Office
P 653,196.74
City Accountant’s Office
202,182.55
City General Services Office
222,755.66
City Engineering Office
313,386.54
City Treasurer’s Office
128,328.82
City Budget Office
179,797.19
City Agriculture’s Office
54,980.03
Dapitan City Resort Hotel
49,694.31
Management Information Office
4,713.56
Commission on Election
1,589.20
City Mayor’s Office
980.52
TOTAL
P1,811,605.12
The verification disclosed that generally, the overtime services are those that are not urgent in nature as to require completion within a specified time or that can be undertaken or could be well accomplished during the regular working office hours except for a few whose services are beyond the normal course of activity of an office that could not be avoided.
Also, it was observed that the determination by the Department Heads of the necessity to render overtime services was not properly evaluated. The specific outputs/services to be accomplished were not specifically indicated and quantified as basis for assessment by the City Mayor before authority to render overtime is granted. In addition, the overtime accomplishments attached to the payroll are inconsistent with the activities indicated in the remarks column of the daily time record likewise attached.
Apparently, the overtime services could be minimized if only department heads closely monitor and supervise their staff employees to maximize daily outputs.
Had the city government implemented the non-monetary remuneration for overtime services rendered in accordance with the guidelines under CSC-DBM Joint Circular No. 2, it could have saved the amount of P1,811,605.12 or the same could be utilized for more important programs, projects and activities beneficial to the general public.
Management Comment:
The city government agreed with our comments and informed us that effective October, 2008 overtime services were totally stopped with the exception of Accounting, Budget and the Treasury Offices for which the City Mayor issued Office Memorandum excepting these offices from the non-monetary remuneration of overtime services.
Recommendation:
1. The City Mayor, thru the City Administrator, must implement CSC-DBM Joint Circular by issuing Executive/Administrative Order on the non-monetary remuneration for overtime services.
2. Authority to render overtime services should be limited to those offices/employees whose services are urgently necessary in accomplishing specific outputs after thorough evaluation and assessments of such necessity.
3. Direct the concerned Department Heads to closely supervise and monitor their employees to maximize daily accomplishment/output.
Dapitan City 2008 COA Audit 6
July 1, 2010
DETAILED FINDINGS AND RECOMMENDATIONS
6. Motor vehicles owned by the city government are not marked with “For Official Use Only” with the name and logo of Office using the same which is in contrast to COA Circular No. 77-61 which attributed to the use of government vehicles for purposes other than official business and for other purposes in violation of Administrative Order No. 239, dated September 15, 2008.
Pursuant to Commission On Audit Circular No. 77-61, as amended, all motor vehicles owned by local government should be permanently marked with “For Official Use Only” under which should be written the corresponding name of the Office using the same.
While Administrative Order No. 239 prohibits the use of government vehicles for purposes other than official business, and for other purposes, it also requires to strengthen the government effort against the use of government vehicles other than official business in line with the government’s energy saving and anti-graft and corruption campaigns.
It was noted that motor vehicles of the City Government are not marked with “For Official Use Only” with the name and logo of the agency, for which unauthorized use thereof is very imminent. Much more, funds were utilized to provide its fuel, spare parts, repair and maintenance.
Marking of government vehicles with “For Official Use Only” serves as deterrent to daring government officials and employees from unauthorized use of the same.
Management Comment:
* The General Services Office is in the process of procuring materials for the marking of all city government motor vehicles with “For Official Use Only” with the corresponding name and logo of the agency as well as the name of Office where it is assigned.
Recommendation to Dipolog City Government:
* Require the City General Services Officer to cause the marking with “For Official Use Only” and name and logo of the agency to all motor vehicles owned and operated by the city government pursuant to COA Circular 77-61 and Administrative Order No. 239.
Dapitan City 2008 COA Audit 5
July 1, 2010
DETAILED FINDINGS AND RECOMMENDATIONS
5. The City Government hired and paid two (2) Consultants for Personnel Administration, Environment and Community Affairs and for National Concerns with corresponding professional fees at P18,000.00 each per month or a total amount of P432,000.00 as of December 31, 2008, which contravened Section 163 of Article 2, GAAM -Volume I.
Section 163 of Article 2, GAAM – Volume I, provides that:
“Article 2. Prevention of Irregular, Unnecessary, Excessive or Extravagant or Unconscionable (IUEEU) Expenditures.
Section 163. Unnecessary expenditures. – The term “unnecessary expenditures”, pertains to expenditures which could not pass the test of prudence or the obligation of a good father of a family, thereby no-responsiveness to the exigencies of the service. Unnecessary expenditures are those not supportive of the implementation of the objectives and mission of the agency relative to the nature of its operation. This could also include incurrence of expenditure not dictated by the demands of good government, and those the utility of which cannot ascertained at a specific time. An expenditure that is not essential or that which can be dispensed with without loss or damage to property is considered unnecessary. The mission ad thrusts of the agency incurring the expenditure must be considered in determining whether or not the expenditure is necessary.”
The services of these consultants could be dispensed with without loss or damage to property of the City Government of Dipolog. In addition, the Local Chief Executive has duly appointed Human Resource Management Officer, City Environment and Natural Resources Officer and City Legal Officer who could perform personnel administration, environment and community affairs as well as national concerns, respectively, thus the total amount of P432,000.00 paid for the services of these consultants was considered unnecessary. (See Annex “C”)
It was further observed in the verification of records that there were no specific accomplishments reported as their outputs for us to consider the necessity in the exigency of the government service.
Recommendations:
* We recommend that the contracts of consultancy of these two consultants shall no longer be renewed.
* Utilize the services of the City Legal Officer, Human Resource Management Officer and the City Environment and Natural Resources Officer in the performance of duties and functions done by the consultants to avoid unnecessary expenditures and instead, promote effectiveness, efficiency and economy in the pursuit of good governance.
Dapitan City 2008 COA Audit 4
July 1, 2010
DETAILED FINDINGS AND RECOMMENDATIONS
4. Delayed submission of Inspection and Acceptance Report for deliveries of medicines totalling P1,364,551.25 deprived COA to conduct inspection and get samples for the necessary testing by the Bureau of Food and Drugs, in contrast to Section 116, and Section 117 of COA Circular 92-386, known as the “Rules and Regulations on Supply and Property Management in the Local Governments.”
Section 116 of COA Circular 92-386 provides that:
“Surprise and Selective Inspections by the Local Auditors. – The provincial, city or municipal auditor or their representatives shall conduct a surprise and selective inspections of deliveries soon after their acceptance by the local government units.”
Section 117 of COA Cir. No. 92-386 also provides that:
“Drugs, Chemicals and Medicine. – Utmost care and caution shall be exercised at all times in the inspection of the following items:
a.) medicines and pharmaceuticals preparations – the analyses must conform to their formulas;
b.) drugs, chemicals including disinfectants – their analyses must conform to the USP, NF, BHF or BFD requirements; and
c.) insecticides, fungicides, etc. – the quality of these items shall be determined through laboratory analysis.
Quantity of samples required:
tablets . . . . . . . . . . . 30 tablets
ointments . . . . . . . . 100 grams
liquids . . . . . . . . . . . 100 cc.
solids . . . . . . . . . . . . 50 grams
capsules . . . . . . . . . . 5 capsules
The samples to be sent to BFAD for the necessary test shall be taken at random and shall be placed in a free- contamination container. The same shall be properly sealed with a strip of onion skin paper bearing the signature or initial of the dealer, requisitioner and inspector. The order, invoice and requisition numbers and the descriptions of the items shall be indicated on the container.”
It has been observed that submission of Inspection and Acceptance Report for large volume of deliveries of drugs and medicines amounting to P2,405,471.24 were delayed, thus, enabling COA no room for inspection while they are still in the bodega. The IAR were only verified long after the deliveries have been paid and the medicines were already issued to end users thus, samples were no longer available for necessary testing by BFAD.
Further evaluation of disbursement vouchers, disclosed that the agency failed to enforce the posting of performance bond by the suppliers to guarantee in case of non-compliance of the conditions and specifications provided in the contract of delivery or any other inconsistencies such as, quality failure in the samples inspected by BFAD.
Moreover, delayed delivery for twenty-five (25) days under DV No. 100-2008-04-2206, amounting to P430,942.06 was not imposed with liquidated damages of P11,383.37, against the supplier which should have been deducted from the contract price.
Management Comment:
* During the exit conference, it was agreed that samples will be taken at random and be sent to BFAD for testing at the expense of the agency and/or be charged to the supplier.
* The distribution of drugs and medicines to end users shall be made without prejudice to the result of the laboratory testing.
Recommendations:
* Require the City General Services Officer to submit the Inspection Report to the Agency Auditor after inspection and acceptance of the deliveries by the agency for verification purposes and to facilitate getting of samples for testing by the Bureau of Food & Drugs (BFAD) to ensure whether or not the medicine would conform and meet the specifications indicated.
* Require Bids and Award Committee to enforce posting of performance bond by the supplier of drugs and medicines as required under RA 9184 as a measure of guarantee of faithful performance and compliance with his obligations specified in the contract, otherwise, it shall be forfeited in favor of the agency.
* Liquidated damages should be imposed on delayed delivery amounting to P11,383.37.
Dapitan City 2008 COA Audit 3
July 1, 2010
DETAILED FINDINGS AND RECOMMENDATIONS
3. The value of property, plant and equipment recorded in the books at
P 153,268,543.96 as of December 31, 2008 was overstated by approximately P15.327 million due to the failure of the City Accountant to take up depreciation on a number of depreciable assets, contrary to Section 04 (O) of the Manual on the New Government Accounting System (NGAS) Volume I for Local Government Units.
Sec. 04 (O) of Volume I of the Manual on NGAS for LGUs provides:
“Basic features and Policies. – The new government accounting system has the following basic features and policies, to wit:
O. Depreciation. The straight-line method of depreciation shall be used. A residual value equivalent to ten (10%) of the cost shall be set-up and depreciation shall start on the second month after purchase/completion of the property, plant and equipment. Public infrastructures shall not be charged any depreciation.”
Verification of the financial statements showed no depreciation provided on the value of property, plant and equipment in the total amount of P 153,268,543.96 resulting in the overstatement of the affected PPE accounts. (See Annex “B“)
The Report of Inventory of PPE submitted by the City General Services Office as of December 31, 2008, does not provide date and cost of acquisition to a number of property plant and equipment which contributed to the inability of the City Accountant to provide the corresponding depreciation.
Management Comment:
* The City General Services Officer reasoned out in the difficulty of providing date and cost of acquisition on PPE acquired long time ago but still existing to date.
Recommendations:
* Require the City General Services Officer to provide date and cost of acquisition on all property, plant and equipment in the inventory report to facilitate recognition of depreciation of affected PPE accounts.
* Existing obsolete PPEs considered to have no more value should be dropped from PPE account and be accounted under Other Assets.
* Require the City Accountant to provide depreciation on all property plant, and equipment accounts in accordance with Section 4 (O) of the NGAS Volume I to establish their true valuation in the financial statements.
Dapitan City 2008 COA Audit 2
July 1, 2010
DETAILED FINDINGS AND RECOMMENDATIONS
2. The City Government failed to effectively and efficiently collect Real Property Taxes (RPT) and did not enforce the remedies available for the collection of Real Property Taxes as mandated under Article 347 of the Rules and Regulations Implementing the Local Government Code of 1991, thus resulted to an outstanding RPT receivables balance of P 18,460,568.14 as of December 31, 2008.
Based on our verification of the financial statements as of December 31, 2008, it showed that the agency has a material balance of RPT Receivables of P18,460,568.14 under the general fund. This has increased by P2,514,717.60 or 15.77% compared to the balance reported as of December 31, 2007 of P15,945,850.54. Out of the P18,460,568.14 RPT Receivables for the calendar year 2008, only P11,264,154.85 was collected as of December 31, 2008 or 61.02% collection efficiency of Real Property Taxes. This performance showed the leniency of the City Government in collecting RPT Receivables. Had the LGU enforced the remedies available for the collection of Real Property Taxes, it could have generated more revenues to implement more projects for the benefit of its constituents.
Details of Real Property Tax Receivables are shown as follows:
Calendar Year Amount
2002 (P 795,392.56)
2003 5,094,675.82
2004 2,709,422.39
2005 1,565,887.95
2006 1,110,204.90
2007 3,056,163.63
2008 5,719,586.01
Total P 18,460,568.14
Furthermore, the City Government did not enforce the remedies available for the collection of Real Property Taxes, as required in Article 347 of the Rules and Regulations Implementing the Local Government Code of 1991, which states as follows:
“Remedies for the Collection of Real Property Tax –
For the collection of the basic real property tax and any other tax levied under this Rule, LGU may avail of remedies by administrative or judicial action. The administrative remedies which are summary in nature are:
a) Levy on real property, and
b) Sale of Real Property at public auction.
The judicial remedy is availed of in the court of appropriate jurisdiction. These remedies are cumulative, simultaneous and unconditional, that is, any or use or all of these remedies or combination thereof may be resorted to and the use or non-use of one remedy shall not be a bar against the institution of the others. Formal demand for the payment of the delinquent taxes and penalties due is not a pre-requisite to such remedies. The notice of delinquency required in Article 346 of this Rule shall be sufficient for the purpose.
Had the City, through the Office of the City Treasurer, availed of the remedies provided for under Article 347 of the Implementing Rules and Regulations of the Local Government Code of 1991 in enforcing tax collection, it could have enforced taxpayers to settle their tax obligations due to the LGU and could have generated material increase in tax collections during the calendar year, thus, it will substantially reduce the balance of RPT receivables as of December 31, 2008. Moreover, an increase in RPT collections could have provided funds for the implementation of additional projects for the people of Dipolog City.
Management Comments:
* The balance of real property tax receivable has already been reduced due to the payment of real property tax by Zamboanga del Norte Electric Cooperative (ZANECO) in the amount of P5,553,848.79 during the year of audit.
* Judicial and administrative remedies will be enforced only after exhausting all possible measures without prejudice of the taxpayers’ right to settle amicably.
Auditor’s Rejoinder:
* Basically, payment of real property taxes by ZANECO has indeed increased RPT revenues to the agency, but neither had it significantly reduced RPT Receivables because a balance of P7,196,413.29 or 38.98% is still quite material.
* Interview with the City Assessor revealed that there were still lot of RPT delinquents after the tax amnesty expired last year. So, it is high time for the City Government to avail of the judicial and administrative remedies and sanctions in order to attain the estimated revenues.
Recommendation to Dipolog City Government:
* The City Government through the Office of the City Treasurer should intensify its effort to efficiently and effectively collect Real Property Taxes and avail of the remedies provided for in article 347 of the Rules and Regulations Implementing the Local Government Code of 1991. Improved collection efficiency of RPT will benefit the City Government and its constituents.
Dapitan City 2008 COA Audit 1
July 1, 2010
DETAILED FINDINGS AND RECOMMENDATIONS
1. Huge amount of cash advances and receivables totalling P21,337,668.15 remained unliquidated and/or unsettled at the end of December 2008, not only adversely affected both the cash and income accounts of the agency, but also a gross violation of Section 37 of P.D. No. 1445, otherwise known as the “Auditing Code of the Philippines”.
Section 37 of P.D. No. 1445, provides that:
“Retention of money for satisfaction of indebtedness to government. – When any person is indebted to any government agency, the Commission may direct the proper officer to withhold the payment of any money due such person or his estate to be applied in satisfaction of the indebtedness.”
It has been observed that most of the cash advances and receivables have been outstanding for five years and beyond, without giving even partial payment. This greatly placed the city government at a disadvantage position or wisely put, those involved, have enjoyed the benefits at the expense of the agency. (See Annex “A”)
If there had been sincerity in complying with the recommendations embodied in the previous COA Annual Audit Reports, these advances and receivables could have been settled speedily, if not full.
Further, we observed that refunds of these cash advances are usually made only upon retirement from government service of the concerned officer or employee.
Management Comment:
* Management promised to improve its collection efforts to reduce these unliquidated cash advances and receivables.
Recommendation to Dipolog City Government:
* Immediate settlement of these cash advances and receivables should be intensified through the joint action of the City Accountant and City Treasurer to withhold payment of any money due to all concerned officers and employees pursuant to Section 37 of P.D. No. 1445.
Dapitan City 2007 COA Audit on Gender and Development
July 1, 2010
Gender and Development
9. The livelihood assistance in the form of trainings and materials given to various women’s group did not provide the benefit for which the funds were intended due to the failure of CSWDO to monitor its project implementation and lack of seed capital to pursue the project.
The City Government recognizes the vital role of women in nation building. In its effort towards integration especially the disadvantaged and distressed women in economic, social, political, and cultural development, priority thrust program were conceptualized in the areas of economic and livelihood development to facilitate and maximize its participation in community affairs.
With the increasing number of unemployed women of working age, it felt that there is a clamor to provide them with comprehensive economic and livelihood development training program. An appropriation of P500,000.00 was set aside for these trainings and/or undertakings.
The training’s objectives are to gain access to employment through the provision of skills training and capital for self-employment; inculcate the value of positive work habit; productivity and self reliance; and to draw them to maximum participation in all community development undertakings.
Targeted beneficiaries for the practical skills development training require at least twenty-five (25) women members per barangay who will embark on intensive skills training and small scale entrepreneurship for self-employment and capability and to be technically assisted by the City Social Welfare & Development Office.
A total of thirty-seven (37) women’s groups were trained involving different project proposals from meat/food processing, dressmaking, handicraft, garment/dried fish trading, sewing, cosmetology, etc., which cost the city government of P289,250.00 of which P264,051.40 (See Annex “N”) are livelihood assistance in the form of various materials used for their projects.
Verification of the project proposals submitted revealed that before the group are trained and given the materials, the co-approval of a Sanggunian Panlungsod member who sits as the chairman of the Committee on Women and Family Relation is required, a move shrouded with political biases considering that the trainings were launched near election time.
After the training, materials used were given. The determination of the group’s loan obligation was based on the assessment or valuation of the materials. A Memorandum of Agreement was signed by the president of the association containing, among others, the following: (1) That the loan shall be paid on installment basis for one (1) or two (2) years, depending on the rate of return; (2) Submission of report by the women’s association to the CSWDO; (3) That the materials given shall be used solely for its intended purpose; and (4) That the funds generated shall be deposited in the bank and that the CSWDO shall be notified when these are withdrawn.
A selective post-evaluation and interviews with the women’s group (beneficiaries) revealed that out of the thirty-seven group proponents, a handful only were successful and some were not started at all for which the materials received remained idle in the barangay. The reasons given why the projects were not started or unsuccessful were the following:
1. Lack of monitoring on the part of the CSWDO to the projects;
2. Lack of seed capital and interest/involvement of members in the undertakings;
3. Trainings require enhancement;
4. Absence of product display center where these could be marketed and to create public awareness;
5. Personal attitude of members (some prefer to have his own project); and
6. Collection problems for those products sold on credit.
From the successful projects, to date the City Social Welfare and Development Office has yet to receive the installment payment.
The failure to monitor the project implementation and the inadequate funds given to the beneficiary deprived them of the purpose for which these are given.
Management Comment:
The social workers in charge in all units of the city promised to monitor the program and assured us that the issue on non-compliance with the program implementation be brought during the women’s month celebration. On the other hand, management is willing to provide additional space to be given to women’s group to serve as their display center of their product.
Recommendation for Dapitan City:
Direct the City Social Welfare and Development Office to intensify monitoring of project implementation. Integrate women’s group with the same project proposal to assess viability and marketability of the product. Provide additional funds to those projects that require additional capital. Likewise, the City Government should provide enough space that will serve as its product display center to create public awareness and marketability of their produce.
Dapitan City 2007 COA Value for Money Audit
July 1, 2010
Value-for-Money Audit
8. The City Government could have saved and utilized the savings in paying the extra cash gift of its officials and employees had it exercised prudence in the incurrence of expenses related to the holding of Kinabayo, Handuraw Festivals and its participation in other festivals in other parts of the country which cost the City’s coffers P13.581M for the last two (2) years.
The holding of the annual Handuraw Festival is authorized under Resolution No. 2006-310, that declares December 28-30 of every year as the Handuraw Festival. The annual celebration is in commemoration of the death anniversary of Dr. Jose P. Rizal, our national hero. This activity was uniquely designed to give our hero the highest honor, reverence, love and respect for all his heroic deeds and the legacies he bequeathed to the entire Filipino race that continuously influence and inspire the lives and visions of our foreign brothers as manifested like the inclusion of a subject about him in the school curriculum as done in the City of Litomerice, Czech Republic, and the erection of a huge and impressive Rizal’s Shrine in the City of Jinjiang, Republic of China.
Various activities were drawn in the annual event that include the Opening Exhibit, 3-day Painting Contest, Film Showing of Rizal’s Life, Rizal Look-a- Like Contest, Mutya sa Handuraw, Fluvial Parade, Float Parade, Street Dancing, Octava Choral Contest, among others.
The execution of the planned activities already entailed several meetings as early as September, 2006 where proposed expenses were already discussed by the Heritage Executive Committee to be taken from the appropriation under the “Maspatsada-WOW Dapitan” tourism project.
Aside from the Handuraw Festival, the City also celebrates the annual Kinabayo Festival every July in commemoration of the religious saint of the city.
The expenses for these undertakings including the participation in the annual Hudyaka Festival spearheaded by the Provincial Government of Zamboanga del Norte, and the participation in other festival in other parts of Mindano already entailed a budget of P14.030 million for the last two (2) years of which P13.581 million were obligated.
Verification of the expenditures incurred for Handuraw Festival for the last (2) years revealed that a large portion of disbursements were made thru cash advances in several occasions by the personnel of the Tourism Office (See Annex “L”) in the total amount of P3.677M of which P2.273M or 61.80% alone was in the name of Mr. Rodiolan S. Porlas, the City Tourism Officer.
Analysis of the liquidation documents disclosed that shopping were the usual mode of acquiring the supplies used for the various activities and was justified by a resolution from the Bids & Award Committee (BAC) that the supplies are urgently needed. In addition, reimbursements of expenses were further justified by a mere submission of certification that canvass was made to at least three (3) different suppliers when the same could be purchased regularly.
The procured items include construction materials used for the float and booths, meals and snacks served to various visitors, officials and employees alike who attended the preparatory activity. It also included T-shirts given to selected few as souvenir items.
The decision to purchase the supplies needed did not conform to the provision of Section 52 of IRR, RA 9184 which mandates that the use thereof should be made only where there is an unforeseen contingency requiring immediate purchase and that they are considered as ordinary or regular office supplies.
Prizes ranging from P50,000.00 to P100,000.00 were also given. The payment of honoraria to persons who serve as board of judges for all the activities was not uniformly applied and was not in accordance with the provisions of Budget Circular No. 2007-2 dated October 1, 2007 which mandates that the computation of the hourly rate should not exceed the rate of salary grade 28 step 8 for those whose services were considered superior knowledge or expert in his specific field
The payroll also revealed that for one activity, the honoraria given for the four (4) hour services was given a rate of P3,000.00 to P5,000.00 while media practitioners were given P2,000.00 a day on top of the hotel accommodation and transportation allowance given to them..
In addition, the granting of cash advance for this purpose was not properly controlled as additional ones were given even if the previous ones have not been accounted and/or properly liquidated. A detail of the indiscriminate granting thereof in the total amount PP4.518 million (See Annex “M”) has shown that an average of five (5) month delays was observed in its liquidation thus, the possible misuse of the same is not remote.
For CY 2007, the City Government failed to give the extra cash gift authorized in Local Budget Memorandum No. 54 dated December 19, 2007 to its officials and employees amounting to P5,000.00 each due to lack of funds.
Had management exercised prudence in the disbursement of scarce government resources, it could have saved funds for the payment of the extra cash gift mentioned above considering the economic hardship now being suffered by City Government officials owing to low salary rate and the lack of opportunity to earn additional income to sustain family needs.
Undoubtedly, the tourism investment program will benefit the City. However, such benefits could only be felt by the constituents in the long term.
Management Comment:
The Tourism Officer and the Chairman, Heritage Committee, explained that the festivals uplifted and promoted the tourism industry of the city due to the increase number of tourist arrivals. As to the payment of extra cash gift, there was really a savings however, it was reserved for the payment of loan amortization especially that the internal revenue allotment of the city for 2008 was reduced.
Recommendation for Dapitan City:
Direct the city tourism office tasked in the tourism promotion of the city to exercise prudence in the incurrence of expenditures relating to the conduct of festivals that are considered extravagant. Prioritize expenses according to necessity without sacrificing economy, efficiency and effectiveness in its program implementation. Those materials already used during the previous festivals should be kept in safe places for recycling purposes to be used in the ensuing years.
Those personnel who were given cash advances and remained outstanding as of December 31, 2007 be directed to fully settle and/or liquidate to avoid possible legal implication.
Dapitan City 2007 COA Audit 7
July 1, 2010
Value-for-Money Audit
7. The absence of the work and financial plan and lack of monitoring of the program implementation of the city’s electronic Local Government Unit (eLGU) computerization program resulted in the improper charges amounting to P501,716.88 and the discontinuance of the installation of the Treasury Module software.
The City Government appropriated funds amounting to P1.3M for the implementation of the electronic Local Government Unit (e-LGU) computerization program offered by the National Computer Center. To avail of the program, certain numbers of real property units are required.
Under this program, two (2) modules are to be installed, the Real Property Tax Assessment System or the electronic real property tax (e-RPTS) and the Treasury Module which has two (2) sub-modules namely, the electronic Business Permits and Licensing System (e-BPLS) and the electronic Treasury Operation Management System (e-TOMS).
In 2004, the electronic Real Property Tax Assessment Systems (eRPTS) was installed by the National Computer Center and personnel from the City Assessor’s Office and from the Management Information Systems Office (MISO) were trained for the purpose. The installation was made possible because the City Assessor’s Office submitted a bloated number of real property units (RPUs) to comply with the NCC’s minimum requirements. As the roll-out started, it was discovered that there were real property units (RPUs) that were included in the Assessment Roll which are non-existent, thus, more registered RPUs as against the actual number of registered property owners were found.
Likewise, the person from the Information Office who was trained and tasked to maintain the network’s operating system transferred to other Local Government Unit while the computer server being used malfunctioned to the extent that the data encoding of real property units was temporarily stopped until it was repaired.
A re-tax mapping was conducted to establish the accurate number of real property units (RPUs) on all properties in the fifty (50) barangays, however, as of December 31, 2007, only four (4) barangays were completed.
The snail paced re-tax mapping of the Assessor’s Office led to the suspension of the installation of the other software component, the Treasury Module, until the assessment records are cleansed and sanitized.
A verification of the charges to the computerization program fund revealed that there were expenditures inappropriately charged against the purpose for which it was established. It was noted that P152,778.00 worth of cellular phones; P100,990.00 worth of air conditioning units; and P31,098.88 cost of overtime pay of the accounting office personnel were charged to the fund. In addition, there were acquisitions of computer equipment amounting to P216,850.00 that were not used directly on the program as it was issued to the Licensing and Permit Division of the City Mayor’s Office, to the COMELEC and the Municipal Trial Court in City (MCTC), to name a few.
Provisions of Section 3.2 of the Budget Operations Manual provides for the preparation and submission of the Work and Financial Plan by the Head of each Department/Office/Unit. Its objectives are to enhance efficiency in the programming and utilization of the budget process; rationalize and/or schedule fund utilization and lastly to establish a means of measuring physical targets and corresponding level of efforts in accordance with schedule of fund utilization of the approved budget.
The scope and nature of the prepared work and financial plan is to present the financial operating requirement that will indicate the specific objective of expenditures and reflect the required cost or to ensure that amounts requested are to be utilized at the time required.
The un-reconciled number of real property units (RPUs) with the Assessment Roll led to the suspension of the installation of the other software (Treasury Module) as it shows incomplete numbers and amounts of all taxable properties located within the city. Moreover, the failure of the Management Information System Office to train other personnel on the e-RPTS system, in case the trained one is hired by other agencies, would not put the system in jeopardy. On the other hand, the uncontrolled charges to the fund due to the absence of the work and financial plan, as basis for control, resulted in the acquisition of equipment not related to the program.
Management Comment:
The chief of Management Information System Office justified that the transfer of trained personnel is beyond their control. As to the procurement of equipment not related to the program, its acquisition did not pass his office as the obligation request is controlled by the City Planning and Development Office, the appropriation being in the 20% economic development fund. He, however, assured that effective CY 2008, controls will be instituted by his office being in charge in the computerization program of the City Government.
Recommendation for Dapitan City:
Continue the cleansing and sanitation of assessment records with the actual real properties to present a correct real property collectibles. Authority must be given to the head of the Management Information System Office (MISO) to control the charges for which the funds are set aside. Likewise, require him to prepare and submit the Work and Financial Plan that contain the amount of funds to be utilized, the IT equipment to be acquired and utilized, for approval of the City Mayor. This will serve as basis for assessment and monitoring of the program implementation.
Assign permanent system, network and database administrator so that any glitches of the installed computer program could be attended to immediately.
