City fails to pay various agencies

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Sunday, June 22, 2014


THE Cebu City Government has failed to settle its P81.7-million obligations to five different government agencies, COA said.

In the audit of the City’s financial transactions and operations in 2013, the Commission on Audit (coa) said the City failed to pay P2 million to the National Housing Authority (NHA), P31.17 million to the Bureau of Internal Revenue (BIR) and P35 million to the Government Service Insurance System (GSIS).

Some P8.33 million has also not been paid to the Home Mutual Development Fund, or Pag-ibig Fund, and P5.2 million to the Philippine Health Insurance Corp. (Philhealth).

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COA said the City’s failure to settle the obligations has deprived the National Government of additional income and the chance to use these funds.

COA said the City has incurred unnecessary expenses since the delay in the remittance of the funds was subjected to penalties and surcharges.

For the NHA, Cebu City State Auditor IV and audit team leader Cymbeline Celia Uy said the P2 million is a loan and supposed to be paid in 2006 yet.

The amount was used to finance the Kalamboan Alang sa Panimuyo Sa San Roque (Kapasar) Resettlement Project in Barangay San Roque.

The non-payment of the loan, Uy said, has resulted in a P1-million interest, which is an additional obligation of the City.

Uy asked the City Accounting Office to monitor the timely payment of its obligations in order to avoid unnecessary expenses due to non-payment.

For the City’s obligations to BIR, Uy said the P31.17 million represents balances of withholding taxes in 2013 and prior years that are supposed to be remitted.

Intact

Uy invoked Section 69 of Presidential Decree 1445 or the Government Auditing Code of the Philippines, which provides that public officers authorized to receive and collect taxes, revenues or receipts of any kind shall remit or deposit intact the full amount.

“The non-remittance of the said amount on time deprived the concerned government agencies (the chance) to generate additional revenue and to program the proper
utilization of the fund,” she said.

“Also, the accumulation of these unremitted taxes exposes the City to misappropriation of funds and imposition of surcharges, interest and penalties by the BIR,” she added.

During the exit conference, COA said they were told by the City that some P3 million have already been remitted to BIR.

Considering that the amount is small compared to the outstanding balance, COA asked the City to implement strictly the policies on the prompt remittances of taxes.

For GSIS, Uy said the P35 million represents unremitted contributions of the
employees.

Just like the withholding tax from the BIR, Uy said the contributions to the GSIS are supposed to be remitted within the first 10 days of the month which the contribution applies.

Uy lamented the failure of the City to remit on time the contributions, saying that
this does not reflect sound internal control.

Also, it did not only deprive GSIS the chance to finance its obligations but has also
prevented employees from availing themselves of benefits like housing and salary loans.

City Hall said, though, that the amount reflected in the COA findings still has to be verified, saying they have religiously remitted all that were due to various government agencies.

COA then recommended to the City Accounting Office to reconcile its records with GSIS to determine the correct amount of unremitted premiums.

They recommended that proper accounting and recording of the amount remitted be done in order to avoid interests on delayed remittances.

As for the City’s P8.33-million payable to Pag-Ibig, Uy said it represents balances from remittances in 2013 and the previous years.

Uy said the City already remitted P4.85 million or 58 percent of the total amount to Pag-Ibig in January this year.

However, Uy said the remaining balance was subjected to penalties and surcharges.

Uy said Pag-Ibig contributions are supposed to be remitted within 15 days from the date it was collected.

Because of this, Uy asked the City to remit Pag-Ibig contributions on time to prevent delay in the processing of the employees’ claims and prevent possible forfeiture of benefits.

As for the P5.2 million that the City owes to Philhealth, Uy said these are also balances in 2013 and previous years that were not remitted.

As of January this year, though, Uy said the City remitted P1.5 million or 29 percent of the total amount.

Uy said Philhealth contributions are supposed to be remitted on or before the 10th of the month.

The City, in its comment, said they will verify the amount provided in the COA findings, saying that remittances to government agencies were religiously paid.

COA then asked the City to immediately reconcile the account in order to determine the correct balance of unremitted contributions.

In its annual audit report, the COA has found a total of 43 deficiencies on the City’s financial transactions and operations in 2013.

Published in the Sun.Star Cebu newspaper on June 23, 2014.

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