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Monday, September 05, 2005
12 Cebu towns ‘misused’ loans
By Jeanette P. Malinao
Sun.Star Staff Reporter
TWELVE towns in Cebu committed at least four violations in handling the P1-million loan they each received from the Office of the President, the Commission on Audit (COA) noted.
These violations, the COA said, were common in the towns of Tudela, Poro and San Francisco in the Camotes islands, Alcantara, Alegria, Argao, Dalaguete, Malabuyoc, Dumanjug, Barili, Balamban and Ginatilan.
Government auditors cited violations ranging from erroneous or improper accounting entries, to the receipt or release of money without documentation, non-recording of the money in the books, and worse, the irregular purchase of an asset that is now “cannibalized.”
The amount came from the President’s Social Fund for her “Isang Bayan, Isang Produkto, Isang Milyong Pisong Programa ni Pangulong Gloria Macapagal-Arroyo,” mostly released before she was elected into office.
It was supposed to be a loan from the Office of the President, but some municipal officials recorded it as financial assistance from Malacańang, while others had no memorandum of agreement to show for the transaction.
Interests
The interest rate was not uniform among the towns. Alcantara and Balamban’s was six percent per annum for four years, but that of Alegria is payable within the same period but with 10 percent interest per year.
Dumanjug town’s was six percent interest per year, but payable in five years.
Barili and San Francisco are expected to pay 10 percent interest per annum, for three years.
While the amount was clearly a loan, Argao placed it in a time deposit, and did not record the loan, the time deposit and interest earned in its books.
Tudela recorded it as a “subsidy from other LGUs.” San Francisco and Ginatilan took it up as “financial assistance.” Alegria, Balamban and Dumanjug considered it as a trust fund.
COA, however, told the last three towns to make the correct accounting entries.
Balamban also loaned out P800,000 to the Don Bosco Multipurpose Cooperative and P200,000 to the Balamban Community Multipurpose Cooperative, without recording this in the “loans receivable” account.
Where’s money?
Ginatilan, for its part, explained it did not take up the amount as a loan, because the mayor is still “negotiating with the President” to consider it as financial assistance.
Still, the auditor required the accountant to take the account properly and to consider it up as monetary aid only when the President grants the request.
Aside from the P1 million it received in 2003, Tudela also reportedly received P250,000 in November 2002 for “socio-civic projects” from the same fund source.
The amount was never recorded in the books because “it was never received” by the municipal government.
COA, in its report, cited a letter from the head of the Office of the President’s special projects office, making a follow-up about the money.
“The former mayor Rogelio Bacquerfo should be made to account for the P250,000,” read the COA report.
As for the P1 million, Tudela could not provide auditors with a copy of the loan agreement.
One product
Even if it was for the “one-town, one-product program,” Tudela used it to buy one fishing boat worth P400,000 and its accessories amounting to P43,869.
COA said the purchase was irregular, as it was made through a direct purchase and did not follow the following procedures:
- No resolution of the committee on awards to justify the mode of procurement;
- Disbursement vouchers were not signed by the contracting party;
- Purchase request was not signed by the requisitioning officer, mayor and municipal treasurer; and
- Inspection report was not signed by the designated inspector.
“The fishing boat is now unserviceable and beyond economic repair, including the fishing net, the parts disintegrated and cannibalized. This unconscionable expenditure resulted in wastage of public funds,” said the report.
The former mayor, Treasurer Angelita Roble and Property Officer Tereso Enero are asked to refund the amount and remove the watercraft from the assets account.
Re-lent
As for Tudela’s neighbor, San Francisco, the Office of the President released the check in February 2003, ahead of the memorandum of agreement.
Worse, no document was given for signing when the amount was received, and the agreement now on file is undated and unsigned.
Of the P1 million, P650,000 was “re-lent” to the San Francisco Farmers and Fishermen Trading Federation, Inc. although the organization lacked documents for the releases.
COA also found that the transaction was listed as “subsidy to NGOs/POs,” an account that showed erasures or corrections.
The accountant of San Francisco, according to COA, failed to establish a loan payable to the Office of the President, and a loan receivable from the NGO.
In Dalaguete, officials released in September 2004 some P200,000 of the P1 million to the Dalaguete Federation of People’s Organizations, Inc.
Requirements set for the release was not met. There was no memorandum of agreement between the town and the NGO, so “the specific purpose of the assistance could not be identified and the legitimacy of the recipients could not be established.”
Mayor only
Further, the town could not present accreditation papers of the NGO, as the accountant said as she “does not have it on file.”
The money was released, and yet the Dalaguete Municipal Government told auditors that the agreement “is still to be prepared.”
Malabuyoc, meanwhile, also could not provide auditors a copy of the MOA. The mayor said they forwarded the MOA to the Department of Science and Technology, its partner in implementing the program.
The town “did not retain any copy” of the MOA.
As for Poro town, Sun.Star Cebu reported last Aug. 25 that it was also recorded as “financial assistance” instead of loan. The treasurer and the accountant said, “the check was received ahead of the agreement, and no document was given for signing when the amount was received.”
The MOA is “undated and signed by the mayor only.”
But records show that portion of the money was spent for purchase of fishing materials and fishing boats for 10 coastal barangays.
The Municipal Government told COA that they will collect the money back from the fishermen, but COA said the municipal accountant “failed to establish” a loan receivable from fishermen’s organization.
(September 5, 2005 issue)
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