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Monday, October 03, 2005
Audit body tells LGUs to monitor records
By Danilo V. Adorador III
THE city administrator and revenue collections chief of Ozamis City Government in Misamis Occidental failed to enforce strict monitoring collections among its collection clerks, the Commission on Audit (COA) 2005 report said.
COA observed this accounting flaw, along with the unreliable financial reports and transactions erroneously charged to certain accounts that marred last year's financial records of Ozamis City.
Laxity in monitoring revenue collections resulted to the delay of remittance of daily collections in the amount of P221,959.59 last year, COA report said.
The auditing team in its report found out that revenue collectors were allowed to store money in their hands for as long as three to 65, thus "exposing cash that was temporarily held to risk of loss or misappropriation".
"Section 29 of the New Government Accounting System (NGAS) Manual provides that at the close of each business day, collectors/tellers shall accomplish the Report of Collections and Deposits (RCD) and submit it to the Treasurer/Cashier concerned to whom the cash collected shall be turned over," COA said.
Non-compliance of this regulation was particularly observed on the revenue collection clerks assigned in the public market and that of the Integrated Bus/Jeepney Terminal (IJBT) of Ozamis City.
In other violations, the COA 2005 report revealed that the Ozamis City government charged various disbursements with no more appropriation to its Other Maintenance and Operating Expenses (MOOE) account, totaling to P1,837.473.7,--instead of asking for realignment of funds.
The transactions wrongfully charged to the MOOE account ranged from vehicle insurance premiums, traveling expenses, telephone bills, procurement of spare parts, and even radio program expenses, among others.
"Initial inquiry revealed that most of the transactions with erroneous charges were those with appropriations already exhausted during the year," the auditing team said in its report.
To complicate its financial woes, COA also discovered that the city government in its Supplemental Budget No. 4 last year allotted funds for extra gift, honoraria, among others, "despite the uncertainty of its revenues contrary to sound management practice".
It then tried to borrow P10,000,000.00 from the local branch of the Philippine National Bank (PNB) itemized as "Bridge Financing" to fund the said Supplemental Budget No. 4, as learned from the City Accountant when interviewed by COA.
This in effect, incurred the City government P5,896,625.00 and were not recorded as payables in the books of accounts, which violated again COA regulations.
As a result, COA strongly emphasized to the City government that availment of the loan could not be made in the absence of projects.
It added, "In case management availed of a loan, the same could not be used to pay the above accounts."
The city's total income last year could not also be ascertained due to the absence of several financial records, "hence the determination of whether the income generated are sufficient to meet operating cost could not be achieved."
In 2004, audit disclosed that the city government only posted income on its market, slaughterhouse, hospital and cemetery operations.
COA observed that the City Accountant did not maintain Special Accounts complete with subsidiary records/ledgers that will show the income and expense transactions of each enterprise making the determination of the profitability of each enterprise difficult.
To prevent the exhaustion of funds in which the City government had enormous experience, COA advised all department heads to "limit expenditure within the budget ceiling".
It also urged the City Accountant not to approve the obligation slip if there are no appropriations for the transaction.
(October 3, 2005 issue)
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