Editorial: Elephant in the room

REMEMBER that story of the six blind men and the elephant? Recent pronouncements on the state of the Capitol’s finances have created a similar situation.

In a press conference Monday, Acting Gov. Agnes Magpale revealed that the Provincial Government’s payables had reached P900.97 million, but that its general fund was only P81 million as of Jan. 8 as certified by the Bureau of Local Government Finance (BLGF).

She didn’t say the Province was bankrupt, but the picture she created wasn’t reassuring: a heap of suppliers’ bills too large for the Capitol’s available cash to cover.

Is it unusual for the Province to find such a large amount of payables at the end of the year? Apparently not.

At the end of December 2010, the Capitol was in a similar spot. It had P950.38 million in liabilities or payables. But it also had P28.93 billion in assets and P27.98 billion in government equity, the Commission on Audit (COA) reported.

By focusing on Capitol’s payables and omitting other things like its revenues as of yearend, the camp of Acting Governor Magpale gave us only a partial picture—the tail or ear of the elephant, as it were.

Suspended Gov. Gwendolyn Garcia, in press interviews last Dec. 27, pointed out that some expenditures that should have been charged to the trust fund were charged instead to the general fund.

In hindsight, COA made a similar observation in 2011. It said that the Province had treated P204.46 million for the repairs or improvements of roads as “procurement of goods, instead of infrastructure projects.” State auditors advised the Province, “If the project is clearly infrastructure, management should treat it as such in order to protect government interests.”

COA has also observed that the Province pursued some infrastructure projects without a resolution from the Provincial Board authorizing these contracts. But at no point has COA ever pointed out that the Province, during Garcia’s eight years in office so far, spent beyond its means or mismanaged its funds.

Unfortunately, Governor Garcia has not helped her situation by repeatedly challenging the acting governor to a debate. Did the Province fall short or did it meet its revenue targets for 2012? What was the Provincial Government’s plan, before the suspension took effect, for Capitol’s payables to be met?