Election Result for Davao del Norte – Province
July 6, 2010
MEMBER, HOUSE OF REPRESENTATIVES of DAVAO (DAVAO DEL NORTE) – SECOND LEGDIST
Candidate Party Votes Percentage
LAGDAMEO, Antonio Jr F. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 56264 100.00%
Statistics
Total number of Voters who actually voted 64217
PROVINCIAL GOVERNOR of DAVAO (DAVAO DEL NORTE)
Candidate Party Votes Percentage
DEL ROSARIO, Rodolfo P. LIBERAL PARTY 51988 100.00%
Statistics
Total number of Voters who actually voted 64217
PROVINCIAL VICE-GOVERNOR of DAVAO (DAVAO DEL NORTE)
Candidate Party Votes Percentage
SUAYBAGUIO, Victorio, Jr. R. LIBERAL PARTY 36372 64.61%
ISRAEL, Rogelio E. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 19921 35.39%
Statistics
Total number of Voters who actually voted 64217
MEMBER, SANGGUNIANG PANLALAWIGAN of DAVAO (DAVAO DEL NORTE) – SECOND PROVDIST
Candidate Party Votes Percentage
GAVINA, Janet G. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 41507 17.89%
DACALUS, Ely C. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 32729 14.10%
DUJALI, Alan R. INDEPENDENT 31829 13.72%
LU, Daniel A. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 23426 10.09%
DUCO, Hernanie L. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 20412 8.80%
MALIGRO, Demetrio C. LIBERAL PARTY 19335 8.33%
AYUSTE, Araceli L. LIBERAL PARTY 18118 7.81%
SAN JUAN, Artemio V. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 17353 7.48%
STA. ANA, Rolando A. LIBERAL PARTY 14812 6.38%
ROYO, Salvador R. INDEPENDENT 10410 4.49%
COCAMAS, Conrado D. INDEPENDENT 2133 0.92%
Statistics
Total number of Voters who actually voted 64217
Election Result for Panabo City
July 6, 2010
MAYOR of DAVAO (DAVAO DEL NORTE) – PANABO CITY
Candidate Party Votes Percentage
SILVOSA, SR., Jose D. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 35368 57.47%
PELIGRO, Rico L. LIBERAL PARTY 25900 42.09%
MIJARES, Norberto A. INDEPENDENT 270 0.44%
Statistics
Total number of Voters who actually voted 64217
VICE-MAYOR of DAVAO (DAVAO DEL NORTE) – PANABO CITY
Candidate Party Votes Percentage
GAMAO, James G. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 39985 68.31%
DE LA PEÑA, Francisco Jr P. LIBERAL PARTY 18548 31.69%
Statistics
Total number of Voters who actually voted 64217
MEMBER, SANGGUNIANG PANLUNGSOD of DAVAO (DAVAO DEL NORTE) – PANABO CITY – LONE DIST
Candidate Party Votes Percentage
GAVINA, Janrey G. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 33832 7.00%
DUJALI, Gregorio 111 U. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 33573 6.94%
CATALAN, Roy J. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 30269 6.26%
CAGAPE, Ruperto Jr. B. INDEPENDENT 29202 6.04%
TANONG, Jannet N. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 28769 5.95%
BLASE, Emeterio E. INDEPENDENT 25376 5.25%
GERALDO, Raquel B. INDEPENDENT 25047 5.18%
DOLON, Demetrio B. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 24880 5.15%
GLODO, Jovito M. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 24275 5.02%
PIEDAD, Alan G. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 23501 4.86%
YAMBAO, Manuel S. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 23187 4.80%
RANAIN, Jamalon B. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 23089 4.78%
ARGUELLES, Gabriel L. INDEPENDENT 19373 4.01%
GARCIA, Larry P. INDEPENDENT 17557 3.63%
DULAY, Dionisia J. LIBERAL PARTY 16928 3.50%
PUDE, Artemio L. LAKAS KABALIKAT NG MALAYANG PILIPINO CHRISTIAN MUSLIM DEMOCRATS 14525 3.00%
RELAMPAGOS, Janris Jay G. INDEPENDENT 12693 2.63%
GIL, Febe N. INDEPENDENT 12495 2.58%
MAHIPOS, Raul D. INDEPENDENT 9831 2.03%
PAMISARAN, Emmanuel G. INDEPENDENT 8779 1.82%
MAILWAS, Elmer M. LIBERAL PARTY 8436 1.74%
SALILING, Walton M. LIBERAL PARTY 8063 1.67%
DALUPE, Pepito B. LIBERAL PARTY 7425 1.54%
TILAON, Crescenciano Jr. A. LIBERAL PARTY 7180 1.49%
VELENCIO, Ronald E. LIBERAL PARTY 6246 1.29%
PUYOD, Mauro Raymundo L. INDEPENDENT 5923 1.23%
AQUINO, Joselito B. INDEPENDENT 3024 0.63%
Statistics
Total number of Voters who actually voted 64217
· · · · ·
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Panabo City 2007 COA Audit 12
July 4, 2010
VALUE FOR MONEY AUDIT
1. Utilization of funds amounting to P68,276,000.00 was incurred under the Locally Funded Projects without sound program designs and justification, the budget for which was just earmarked without prior proposal and which contradicts provision of Section 2 & 4 (4) of PD 1445.
“The head of a government agency and all those who exercise authority over the financial affairs, transactions, and operations of the agency, shall take care of the management and utilization of government resources in accordance with law and regulations, and that they are safeguarded against loss or wastage to ensure efficient, economical, and effective operations of the government (Sections 2 and 4(4), PD 1445). As such, he is immediately and primarily responsible for all government funds and property pertaining to his agency. He shall also be responsible in ensuring the proper granting, utilization and liquidation of all cash advances in accordance with existing rules and regulations.”
“That government funds and property should be fully protected and conserved, and that irregular, unnecessary, excessive or extravagant expenditures or uses of such funds and property should be prevented.”
Verification of records show that the said projects had no sound basis to be pursued for want of sufficient justification. The projects undertaken were without need indicators. Review of the different program designs of the city reveals only a litany and a narrative of objectives, expected results, projects, activities and budget but none of the indicators for the need of such programs.
And equally important finding is the non-availability of accomplishment report which would have reinforced the validity of the projects. What benefit the constituents have derived from the projects or what difference do these projects make in the lives of the constituents? These considerations would have legitimized these transactions. Otherwise, this office could not sufficiently appreciate these utilizations and therefore deems them irregular and unnecessary.
Additionally, a lump sum appropriation for Locally Funded Projects of the City amounting to P68,276,000.00 was approved in an Appropriation Ordinance No. 31-06, series of 2006 before the program designs was submitted for approval by the LCE. Transposing the flow of transactions, implementers of the projects had the appropriation passed first before the program designs were even submitted. Officially, the submission and approval of all budget proposals/program designs should always precede the approval of the budget.
This practice of the agency of reversing the official course of action will open opportunities for the improper utilization of funds since appropriation is already available for expenditure and programs can be designed on the basis of what the department head wants and not on the basis of what the constituents needs.
Art. 413(e)(3,6) on the submission of budget proposals by heads of offices or departments also provide that:
(e) X x x . .
3. Brief description of the functions, projects, and activities for the ensuing fiscal year, expected results for each function, project, and activity, and the nature of work to be performed, including the objects of expenditure for each function, project, and activity;
6. Accomplishment reports for the last two (2) preceding and the current fiscal years.
Management explained that the implementations of program/activities were done in accordance with their approved program designs.
Recommendation for Panabo City Government:s:
Direct the official responsible in the preparation of budget to follow strictly the mandates of laws in order to harmonized its budgeting with the accounting of all transactions of the agency and to deter future disallowances in audit.
Stop the practice of appropriating/allocating funds to all offices without the itemized program/activities in violation to laws and institute appropriate charges to erring officials and employees found to have contributed or caused the appropriation and disbursement of funds resulting to wastage of loss of government monies.
2. Projects amounting to P 12.4M under the 20% DF were funded contrary to Joint Memorandum Circular no. 1, s 2005 of DBM and DILG which resulted to inefficient and ineffective delivery of basic services to the constituents.
Joint Memorandum Circular no. 1 s,2005 : (Annex D)
“ xxxx
The 20% of the IRA intended for development projects shall be utilized for the following:
1.0 Social Development
1.1 Establishment or rehabilitation of Productivity Enhancement Center for out-of-school youths, women, minors, differently-abled persons and older persons.
1.2 Establishment or rehabilitation of Manpower Development Center.
1.3 Construction or rehabilitation of health centers, rural health unit or hospital, and purchase of medical equipment;
1.4 Construction or rehabilitation of a local government-owned potable water supply system;
1.5 Installation of street lighting system;
1.6 Preservation of cultural/historical sites;
1.7 Other programs or projects of similar nature.
2.0 Economic Development
2.1 Implementation of a livelihood/entrepreneurship development program or project
2.2 Construction/rehabilitation of a communal irrigation or water impounding system and purchase of post harvest facilities such as farm or hand tractor with trailer, thresher, mechanical drier and the like;
2.3 Construction/rehabilitation of farm to market road;
2.4 Construction/rehabilitation of local road or bridges; and
2.5 Other programs or projects of similar nature.
3.0 Environmental Management
3.1 Construction/ rehabilitation of sanitary landfill or controlled dumpsite and purchase of a garbage truck or related equipment;
3.2 Community reforestation or urban greening projects
3.3 Flood control programs or projects such as de-clogging of canals or de-silting of rivers.
3.4 Other environmental management programs or projects that promote air and water quality, as well as productivity of coastal or freshwater habitat, agricultural land and forest land.
It shall be the responsibility of every Provincial Governor, City and Municipal Mayor and Punong Barangay to ensure that the 20% of the IRA is optimally utilized to help achieve desirable socio-economic development and environmental outcomes.”
LGU’s must be equally held accountable for any acts deviating from the expressed provisions of law. It cannot be over emphasized that one of the primary concerns of the national government is to ensure that public funds, like the 20% development fund, shall be spent judiciously and only for the very purpose for which such funds are intended.
The Department of Budget and Management in its Updated Operations Manual for LGUs dated June 2005 came up with provisions for the optimum utilization of the fund to help achieve desirable socio-economic development and environmental outcomes. Accordingly, development projects that may be funded are those that are intended for social development, economic development, and environmental management.
Review of the 2007 budget for the 20% development fund as authorized by Appropriation Ordinance No. 31-06 reveals that out of P47,090,265.00, a total of P 12,415,000.00 worth of projects do not qualify for funding under 20% Development ( Annex E )
It was also observed that some projects could have been properly charged against Special Education Fund.
Nevertheless, management assured the team that the City Planning and Development Office is now in the process of correcting the list of Development Projects funded under 20% Development Fund for CY 2008 which shall conform to the social development and environmental management as stipulated under the circulars issued by the DBM and the DILG.
Recommendation for Panabo City Government:
Direct the members of the City Development Council and the City Planning and Development Office to come up with projects relating to socio-economic and environmental outcomes which aim to improve the areas as envisioned or intended for by the government. Necessarily, concerned officials have to be careful in their choice of projects as not to include those which can otherwise be funded out from other sources.
3. Due to poor planning and monitoring, projects amounting to P 61.9M implemented under 20% development fund, deprived the constituent of the benefits due them.
Provision of Section . 287 of RA 7160 provides that,
“ Local Development Projects. – Each local government unit shall propriate in its annual budget no less than twenty percent (20%) of its annual internal revenue allotment for development projects.x x x x x x .”
Likewise provision of Section 305 of the same RA mandates that,
“g) Local governments shall formulate sound financial plans, and the local budgets shall be based on functions, activities, and projects, in terms of expected results;
h) Local budget plans and goals shall, as far as practicable, be harmonized with national development plans, goals, and strategies in order to optimize the utilization of resources and to avoid duplication in the use of fiscal and physical resources;
In the LGU’s AIP and Annual Budget, a total amount of P47,090,265.00 was approved for development projects representing the 20% of Internal Revenue Allotment of the City Government of Panabo. During the year, there were reverted. A supplemental appropriations amounting to P 15,680,765.00 and P 1,075,000.00 worth of appropriation were reverted, thereby the total budget for development fund totaled P 61,996,030.00
Ocular inspections were conducted during the period January 15-25, 2008 purposely to determine the actual physical existence of the projects, as well as to ascertain the effectiveness and efficiency in the implementation of the projects during the year. For CY 2007, of the 96 projects inspected costing P12,360,000.00 (Annex F), 22 projects or 23% amounting to P 1,815,000.00 (Annex G) were found not constructed in their specified location; 39 projects worth P5,960,000.00 (Annex H) were unfinished; and 16 road maintenance projects amounting to P2,450,000.00 (Annex I) could not be determined, because the roads are still damaged. The gravel are alleged to have been washed out by heavy rains.
Verification of documents and interviews with some of the government officials and employees concerned and with the intended beneficiaries of the projects yield the following information:
1. Funds were allocated and approved before the preparation of programs of work for a certain projects. This means that the programs of work were prepared to fit in the budgeted amount.
2. There was no monitoring and diligent supervision of the implementation of the projects.
3. For the rehabilitation of Matsouka road, the barangay officials were not informed when the project was started. Had they been informed, they would have wanted that the longest Matsouka road be rehabilitated first for it was severely damaged. That is being used. Allegedly, the road that was repaired is located along the property of a government official and which is seldom used because it leads to a dead end way.
4. Some programs of work have exorbitant estimates of item of works. Judging from the appearance of some projects reported to have been completed already, the finished structure is not worth the reported expended amount. Good case samples are the construction of a covered court at J.P. Laurel in the amount of P 250,000.00 where only five pedestals were found upon inspection; and the construction of a cable way installation of a hanging bridge at Barangay Nanyo where only two foundations are existing.
5. Some program of works do not contain a scope of work. The development projects of nine puroks at Barangay Salvacion are good examples where the hollowblocks were just piled in front of the barangay hall .
6. Some projects were not listed in detail in the AIP and Annual Budget but were reflected as a lump appropriation. Additionally, locations were also not clearly specified.
During the exit conference, the concerned officials gave the following reasons:
1. For projects which were not found in its specified locations, the following justifications were asserted. Some materials were reportedly delivered already and stocked in the bodega; and some were deposited in shops for fabrication. Some projects were alleged to have erroneous titles like the construction of stage and bleachers at San Pedro where only a stage was found because the bleachers were not included in the POW.
2. Due to the numerous, petty projects under the 20% DF as well as the locally funded projects, it is difficult for the concerned personnel to monitor and supervise the implementation diligently.
3. For the program of works which do not have a scope of work, it has been justified that it was the discretion of the requesting barangay officials to decide on what needs to be done with the materials.
4. On the lump sum appropriation of projects, it is more on the discretion of the local chief executive to what barangay will the funds be released.
In totality, the team’s assessment of the implementation of the 20% development projects was that there was wastage of government resources for the greater number of projects had not benefited the supposed use and advantage of the same.
Recommendation for Panabo City Government:
Adhere strictly to the guidelines set on the appropriation and utilization of the 20% of the annual internal revenue allotment (IRA) for development projects pursuant to Joint Memorandum Circular No. 1, s. 2005 dated September 20, 2005.
Prioritize and implement projects which will directly and immediately benefit the intended beneficiaries.
Never leave the unfinished projects unusable for years for it will tantamount to losses of government funds and property.
Panabo City 2007 COA Audit 11
July 4, 2010
11. Incurrence of expenses P3,833,813.15 for meals and snacks was not essential in the performance of duties & implementation of programs/projects contrary to Section 343 of RA 7160 and are thereby not allowed in audit.
Section 343 of RA 7160 provides for the prohibition against expenses for reception and entertainment. – No money shall be appropriated, used, or paid for entertainment or reception except to the extent of the representation allowances authorized by law x x x . . . . .
Post audit made on the various disbursements for meals and snacks disclosed that it was incurred in three hundred twenty four (324) occasions by various offices/departments of the city government (Annex C). The justification of the necessity of the expenses could not be sufficiently established since most of the activities for which meals and snacks were served were activities relative to the regular functions and duties of an office. Consequently, the expenses incurred were unnecessary and not in consonance with effective delivery of public services. Moreover, the attendance sheets attached with names and signatures of the alleged participants were also questionable.
In answer to the audit observation memorandum, this is what management had to say, “the city therefore takes exception for food and beverages served during meetings, seminar and conferences by the Executives and Legislative departments of the City as stated in Section 363 of GAAM Vol. II. The committee meetings conducted by the City Council which justify the incurrence of such expenses are as vital as the meetings and conferences conducted by the Executive department in the implementation of its programs. COA Decision No. 413-95 is therefore proof that such expenses are not contrary to law.”
Granting that the subject COA Decision No. 413-95 allowed the request for reconsideration of the disallowances made on the cost of food and beverages served during the council’s committee meetings on the ground of reasonableness of the costs of the food and snacks served and that subject expenses were incurred during committee meetings of the Municipal Council, this may not be similarly applicable to the disbursements in question. Although, expenses being questioned were correspondingly incurred during the city’s committee meetings, these may not be reasonable enough to merit such reconsideration. Nevertheless, further review on subject disbursements will be made by this office in order to arrive at a reasonable and fair judgment that is within the ambit of the law.
Recommendation for Panabo City Government:
Refrain from providing representation expenses/meals and snacks in the budget and for the City Budget Officer to propose only those expenses on representation that are within the bounds of law.
Panabo City 2007 COA Audit 10
July 4, 2010
10. Disbursements representing procurement of goods were not included in the Annual Procurement Plan violated provisions of Section 7 of the IRR of RA 9184 thereby causing irregular utilization of government funds.
Republic Act No. 9184, otherwise known as the Government Procurement Reform Act which took effect October 9, 2003 prescribed the necessary rules and regulations of the procurement activities of the government. Provision of Section 7, Rule II of the Implementing Rules and Regulations states:
7.1. x x x . . . No government procurement shall be undertaken unless it is in accordance with an approved Annual Procurement Plan (APP). In the case of projects funded from lumpsum appropriations, the head of the procuring entity shall immediately update the APP to include such projects or contracts.
7.2. Each procuring entity shall judiciously prepare, maintain and update an APP for all its procurement that shall include, for each individual project, a Project Procurement Management Plan (PPMP). The APP shall bear the approval of the head of the procuring entity or second-ranking official designated by the head of the procuring entity to act on his behalf and must be consistent with its duly approved yearly budget.
7.3. The PPMP shall include: a) the type of contract to be employed; b) the extent/size of contract scopes/packages; c) the procurement method to be adopted, and indicating if the procurement tasks are to be outsourced as provided in Section 53(e) of this IRR-A; d) the time schedule for each procurement activity; and e) the estimated budget for the general components of the contract e.g., civil works, goods and consultancy services. x x x . . .
7.4. The preparation and updating of the PPMPs shall be the responsibility of the respective Project Management Offices (PMOs) or end-user units of the procuring entities, while the consolidation of these PPMPs into an APP shall be lodged with the BAC Secretariat of that procuring entity. x x x …
7.5. Updating of the individual PPMPs and the consolidated APP for each procuring entity shall be undertaken every six (6) months or as often as may be required by the head of the procuring entity. Implementation of any project not included in the procuring entity’s APP shall not be allowed.
Transactions made by the City of Panabo from January 2007 to December 2007 disclosed that procurements of goods on gasoline, oil, & lubricants, meals, snacks, spare parts and etc. were incurred in the absence of an approved APP/PPMP. In like manner, the 20% development fund and the locally funded projects which have a total budget amount of P47,090,265.00 and P68,276,000.00 respectively, were similarly utilized on procurements of goods without the corresponding programs or designs which should have been part of the programmed Annual Procurement Plan of the city. This is a clear violation of provision of Section 7, Rule II IRR of RA 9184 which states that “implementation of any project not included in the procuring entity’s APP shall not be allowed”. (Section 7.5)
Up to report writing, the City still has not come up with an Annual Procurement Plan due to failure of some department heads to submit their Annual Procurement Program and for the BAC to consolidate the Project Procurement Management Plan to GSO and for the GSO to incorporate it into one Annual Procurement Plan of the city. This practice is brazen disregard of the provisions of RA 9184.
This is a prior year audit finding and reiterated this year due to its materiality and significance.
The GSO committed to comply the said deficiencies for this year’s procurement. Preparation of Annual Procurement Plan (APP) and Project Procurement Plan (PPMP) observed had been properly noted. Members of the BAC will ensure that all procurement will be supported by APP and PPMP for the individual project.
Recommendation for Panabo City Government:s:
Ensure that all procurements undertaken by the LGU for the year should be in accordance with an approved Annual Procurement Plan (APP) that shall include, for each individual project, a Project Procurement Management Plan (PPMP) and submit a copy of the same to the Office of the Auditor for reference. Proper charges may be filed against concerned officials or the members of the BAC for violation of the same.
Strictly comply with the general guidelines of procurement in accordance with Section 7, Rule II of the Implementing Rules and Regulations of RA 9184 dated October 9, 2003.
Panabo City 2007 COA Audit 9
July 4, 2010
9. Disbursements made under Other Maintenance and Operating Expenses (969) in the total amount of P19,932,884.50 were found irregular and contrary to provisions of Section 366, Vol. III of NGAS.
Section 366. Other Maintenance and Operating Expenses. This account is used to record the cost of all other expenses not otherwise classified under any of the specific expense accounts.
Post audit of vouchers under this account revealed that disbursements to this account include the following expenses from different offices which are classified under a specific expense account ( Annex B).
* Allowances
* Cash prizes
* Honorarium
* Meals & snacks
* Job Order
* Other Expenses
* Photocopy/Binding
* Stipend
* Streamers/billboards
* Supplies
* Uniforms/Shirts
* Assistance
The subject disbursement as presented can be classified to other specific expense accounts, therefore are not qualified to be disbursed or recorded under account 969. Recording or charging these under account 969 only shows that appropriation respective to those particular accounts have been exhausted already. The practice obviously provides a lee-way for end-users to spend way beyond their approved appropriation for the year.
Account other maintenance and operating expenses (969) is not a buffer account which can house unlimited charges of different classifications. It only records transactions under this code that pertains to expenses of fund or accounts that are not classified as mandated by regulation. Therefore, any other transaction not stipulated in the regulations are considered improper and sanctioned disallowed.
Further verification disclosed that the bulk of this charges are from the locally funded programs hence, it can be easily concluded that those programs were not properly planned and considered.
Management officials concerned, justified that the disbursements made under MOOE may not be properly classified as irregular, as quoted under the definitions of the provisions of Section 162 of the GAAM.
Recommendation for Panabo City Government:s:
We advice all officials to carefully plan programs under their respective departments so that improper charges can be avoided in the future.
We also enjoin the Local Finance Committee to conduct semi-annual review and general examination of cost versus accomplishments against performance standards applied in undertaking development projects for purposes of sound budgeting.
Likewise, be guided by rules and regulations provided by the DBM particularly the mandate that: “All departments and offices in the LGU are required to submit accountability reports to the Local Finance Committee thru the Local Budget Officer in order to effectively monitor the efficiency of the LGU’s fund utilization as well as assess performance in attaining prescribed goals and objectives.
Panabo City 2007 COA Audit 8
July 4, 2010
8. Special accounts were not maintained for 20% Development Fund amounting P42,356,957.00 contrary to provisions of Section 313 of RA 7160, denying easy access to information necessary for monitoring and evaluation.
Provisions of Section 313 of RA 7160 is hereby reproduced as follows:
“Section 313. Special Accounts to be Maintained in the General Fund. – Local government units shall maintain special accounts in the general fund for the following:
(a) x x x
(b) x x x
(c) Development projects funded from the share of the local government unit concerned in the internal revenue allotment and such other special accounts which may be created by law or ordinance.”
Likewise, pertinent provisions of NGAS Manual states as follows:
“Section 105. Special Accounts in the General Fund – Local Government units shall maintain special accounts in the General Fund for public utilities xxx; and development projects funded from the share of the local government concerned from
the internal revenue collections… xxx and such other special accounts which may be created by law or ordinance.”
“Section 106. Objectives for the Maintenance of Special Accounts- Accounting procedures for the operation of the special accounts are adopted in order to:
a. x x x . . .
b. Provide adequate information as to the assets, liabilities and equity of each special account.”
“Section 107. Special Accounts Subsidiary Ledger – Special accounts shall be maintained through the use of complete subsidiary ledger. In case the LGU maintains a number of the same economic enterprise, each shall have its own set of subsidiary ledger x x x .”
These reports shall form part of the schedules of the General Fund trial balance.
The following are details of the 20% Development Fund incurred by management.
20% Development Fund Subsidy to LGU 18,435.00 Other Public Infrastructure 21,132,354.33 R&M – Roads, Highways & Bridges 15,242,971.21 Land 250,000.00 Artersian Wells, Reserviors, Pumping Station
509,775.99 Irrigation, Canals & Laterals 116,490.24 Flood Control 4,354,785.23 Furniture & Fixtures 72,540.00 Other MOOE 59,605.00 Electrification 600,000.00
Total
42,356,957.00
Our verification revealed that the procedures for the maintenance of a special account under the General Fund for 20% development fund were not adopted. No separate subsidiary ledgers were maintained. All disbursements under this fund were incorporated with the current operating expenditure, transactions of which makes it hard for the user to determine and know the flow of its utilization. The classification is contrary to accounting and auditing rules and regulations and in effect does not provide easy access on information which checks status of project or that which enables supervision and monitoring of its implementation.
The Accounting Office will maintain a special account for the 20% Development Fund effective this year 2008.
Recommendation for Panabo City Government: for Panabo City Government:
Require the City Accountant to maintain a special account for the 20% development fund in the General Fund through the use of complete set of subsidiary ledgers. Separate financial statements such as Balance Sheet, Statement of Income and Expenses and Cash Flows should be prepared at year-end and presented as part of the schedules of the General Fund Trial Balance. The procedure will encourage transparency in government activities or transactions.
Panabo City 2007 COA Audit 7
July 4, 2010
7. Irregular appropriation of funds to Liga ng mga Barangays and leagues in the amount P1,754,409.95 contravenes Art. 214(d) Rule XXIX of IRR of RA 7160 and DILG Memo Circular No. 93-67 dated May 25, 1993, resulting to its suspension in audit.
Provision of Article 214(d) of Rules and Regulation Implementing the Local Government Code of 1991 states that:
(d) Funding -
(1) Funds of the leagues and the liga ng mga barangay shall be sourced from:
(i) Contributions of member LGUs the amount of which shall be prescribed under the constitution and by-laws of the league. The membership fee and annual due shall be charged against any available fund of the LGU concerned.
DILG Memo Circular No. 93-67 dated May 25, 1993 in part states that:
“ x x x . . .
It is for this reason that this Department, in support of the leadership of the leagues and federations, appeal to the members concerned to appropriate from their respective local funds the necessary amount for membership fees and annual dues as prescribed in their Constitution and By-Laws to be remitted to the treasurer of their respective local chapters chargeable against their respective local funds, subject to the usual accounting and auditing rules and regulations.
x x x . . ”
What the law provides for the LGUs funding support to the leagues and federations is limited only to their membership fees and annual dues and not to finance or appropriate funds for their operation in payment for PS, MOOE, and Capital Outlays. The action of the city government in providing appropriation to the Office of the Liga ng mga Barangays and Phil. Councilors League is devoid of legal basis, hence, expenditures incurred relative to its operation were irregular.
For the year 2007, the Liga ng mga Barangays and Phil. Councilor’s League incurred an expenditure in the city’s budget in the total amount of P1,754,409.95 detailed as follows:
Expenses Liga ng mga Barangay Phil. Councilors League Furniture & Fixtures 30,000 IT Equipment and Software 40,000 Motor Vehicles 60,000 Salaries & Wages – Casual 78,363 PERA 5,523 ADCOM 21,613 Clothing allowance 4,000 Productivity Incentive Bonus 2,000 Cash Gift 7,500 Year End Bonus 7,877 Life & Retirement Ins. Cont. 9,240 Pag-ibig Contribution 1,600 PHILHEALTH Contribution 938 ECC Contribution 770 Other Personnel Benefit 254 Training Expenses 172,454 Travelling Expenses – Local 56,282 93,480 Other Supplies Expenses 44,999 18,600 Gasoline, Oil & Lubricant Expenses
326,939
149,873 Telephone Expenses – landline
7,076 R&M – Office Equipment 20,000 Other MOOE 454,500 140,530
TOTAL
1,179,474
574,937
The LGU justified that appropriations in favor of the Liga and other local government unit and elective official’s leagues in the nature of assistance or aid to the leagues are lawful exercise of local autonomy and the general welfare clause under Section 16 of R.A. 7160 which provides that every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as the powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare.
The Office of the Liga ng mga Barangay is not an organic office of the LGU but rather an association whose funding for its operation could be properly derived from membership fees, annual dues and contributions from members.
Recommendation for Panabo City Government: for Panabo City Government:
Instruct the Sangguniang Panlungsod, Budget Officer, LFC and other officers concerned to refrain from appropriating funds to Liga ng mga Barangay and the Phil. Councilor’s League and to conform within the limitation provided by law and all expenditures incurred which were irregular and violative to the above provision are disallowed in audit.
Panabo City 2007 COA Audit 6
July 4, 2010
6. The legality/propriety of providing an appropriation to national government offices stationed in or assigned to the city in the amount of P 8,228,400.00 contravenes Section 458 of RA 7160, denying the city the benefits of economic development.
Provisions of Section 458 of RA 7160, provide for the powers, duties, functions and compensation of the Sangguniang Panlungsod, thus:
“x x x . . .
(xi) When the finances of the city government allow, provide for additional allowances and other benefits to judges, prosecutors, public elementary and high school teachers, and other national government officials stationed in or assigned to the city;
x x x . .”
Clearly, the law only provided for additional allowances and other benefits to NGA officials assigned in the agency. Therefore, the law proscribes any appropriation for the operation of national government offices, unless otherwise provided by law or regulation. However, verifications reveal that a total of P8,228,400.00 in the city’s 2007 budget had been approved for the operation of national government offices assigned in the agency. Such being the case, there exist violation of the above-cited regulation.
It is worth stressing that, power of the Sangguniang Panlungsod is not plenary and absolute. This is only a delegated authority, limited and dependent on what is authorized by law. Approving an appropriation in the city’s budget in 2007 for the operation of the different national government offices is over and above the power of the Sangguniang Panlungsod.
Below are the total appropriations provided to different national offices assigned to the city which resulted to a suspension in audit for want of legal basis.
AGENCIES PS MOOE CO TOTAL Aid to Bureau of Fire Protection
314,135 1,665,864 1,980,000 Aid to Phil. National Police 2,930,565 58,500 2,989,065 Aid to Phil. Maritime Command 246,865 246,865 Support to City Prosecutor’s Office
180,000 108,230 288,230 Support to Coast Guard 49,457 49,457 Support to Mun. Trial Court 99,841 99,841 Support Parole & Probation 60,732 29,000 89,732 Support to Public Attorney’s Office
100,000 100,000 Support to Regional Trial Court – B4 69,085 69,085 Support to Regional Trial Court – B34 91,680 91,680 Support to Clerk of Court 49,457 49,457 COMELEC 1,054,601
_________ 1,091,087
__________ 29,299
_________ 2,174,988
__________ Total
1,648,736
6,462,865
116,799
8,228,400
Aid may be extended to any government offices; but before approval of the grant, it should first be subjected to the requirements provided for by accounting and auditing rules and regulations.
Management justified that Section 458 of RA 7160 only authorizes the grant of allowances and other benefits to judges, prosecutors and other government officials stationed in the City. There is nothing in the section which prohibits the City from giving subsidies to national agencies operating in the City, specially when the agencies are involved in the delivery of basic services and facilities to the constituents of the City. In other words, the said section is permissive only in nature and not prohibitive.
The National Government Offices has its own budget provided by GAA, the justification that their budget is not enough could not be appraised in the absence of evidence to attest the same. The practice is fast becoming a regular and mandatory obligation of the LGU rather than on availability of funds, a rule rather than an exception, and presently is slowly eating a big bulk of the LGUs funding.
Recommendation for Panabo City Government:
Follow strictly the provision under Section 458, Chapter 3, Title Three, Book III of RA 7160 or be made liable for disallowances resulting from the irregular or illegal application of authority.
Panabo City 2007 COA Audit 5
July 4, 2010
5. Benefits due to officers and employees in the amount of P1,433,508.93 were erroneously recorded under Accounts Payable account resulting to the overstatement of said account which is inconsistent to the provisions of Section 141,Vol. III of NGAS.
Section 141, Vol. III of the New Government Accounting System Manual states:
“Accounts Payable (401) – This account is used to record obligations/indebtedness to contractors/suppliers arising from the purchase of goods and services. This also includes those held under escrow by government agencies and other obligations in connection with the agencies’ operations, trade/business.”
This account is used as a credit entry for amount of liabilities arising from goods delivered or services rendered; excess payments received from private entities; and amount of liabilities arising from the cancellation of checks issued for which replacement shall be made; and definitely not for allocation of charges for payments of benefits due to officers and employees.
Such allocation can be correctly credited under account Due to Officers and Employees (403). Shown below are the list of claims that are erroneously credited to accounts payable to wit:
Terminal Leave – various employees P 1,142,547.61 Transfer of funds to Provincial Govt. of Davao del Norte
224,000.00 Unclaimed Travelling Expenses for CY 2007 – various employees
66,961.32
______________ Total P 1,433,508.9
The City Accountant acknowledges the error and committed to make necessary adjustments.
Recommendation for Panabo City Government: for Panabo City Government:
Advise the city accountant to properly review journal entries made before approval of JEVs in order to avoid erroneous entries in the future.
