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Monday, September 12, 2005
COA rebukes town for P3M overdraft
By Jeanette P. Malinao
Sun.Star Staff Reporter
Tudela town in the Camotes group of islands had a cash balance of P163,949.07 at the end of 2004.
But it needs to raise P3.57 million more, if it intends to pay its total payables amounting to P3.73 million.
The Commission on Audit (COA), in its audit report for the island town, said Tudela’s spending more than what it has, or what auditors call an overdraft, is not a first for the municipality.
“The incurrence of an overdraft at yearend was also noted in the previous year and management did not bother to correct the deficiency by prioritizing expenditures,” the report stated.
Auditors said the repeated overdraft “might have been caused by making obligations without appropriation.”
This, COA said, is a violation tantamount to “misappropriation and juggling of public funds, an act punishable by law.”
Priorities
COA advised the local chief executive to “take alternative action on how to prioritize” expenditures.
Any overdraft incurred at the end of the year should be covered with the first collections of the succeeding fiscal year.
The commission also told the municipal accountant and treasurer to “often update” the chief executive on the “true financial condition of the LGU.”
Tudela’s payables listed by COA represent “deductions withheld from the salaries of officials and employees for their income taxes, life and health insurance and payment of loans,” among several others.
The Municipal Government failed to remit these, COA reported.
Payables
Tudela still owes the Bureau of Internal Revenue (BIR) P1,596,732.
It also failed to remit P491,478 to the Government Service Insurance System (GSIS), P48,871 to the Pag-ibig Fund and P22,775 due for PhilHealth.
Tudela also has other payables: P29,3231 due to officers and employees, P83,775 due to National Government agencies, P467,248 due to local government units, P339,720 due to “other funds,” P64,919 due to Land Bank of the Philippines or CFI Cooperative.
It also has an item for “accounts payable,” totaling P753,237.
Tudela did not implement any major project in 2004, though its expenses slightly increased (by 1.7 percent) because of personnel services and maintenance and operating expenses.
It received P500,000 financial assistance from the Provincial Government to repair its public market.
No deposits
Aside from the overdraft, COA also scored Tudela’s practice of not depositing “immediately and intact” all its collections.
As of Dec. 31, 2004, its total “undeposited collections” amounted to P139,281 for the general fund, plus P70,277 for the special education fund.
Auditors also found that collecting officers did not remit their collections daily to the liquidating officer, even if their areas of assignment are near the office of the town treasurer.
If these practices of the treasurer and collecting officers are tolerated, COA said, they run the risk of losing government funds.
COA also noted that Tudela’s real property tax receivable is not accurate, because it is based only on the assessor’s certification of the town’s total assessed value.
Earlier, Tudela was also included in a Sun.Star Cebu report on some towns’ mishandling of a P1-million loan that they got from the Presidential Social Fund.
While COA corrected other towns only for erroneous accounting entries, Tudela was asked to refund the amount for “unconscionable expenditures that resulted in wastage of public funds.”
Aside from the fact that the money was “not utilized for the purpose it was intended,” several violations were also noted in its disbursement.
It was used to buy a “defective” fishing boat without going through proper procurement procedures. Worse, the boat is now “beyond economic repair” and “cannibalized.”
An amount of P250,000 in “financial assistance for a socio-civic project” from Malacañang was also not recorded in the books, and was “never received” by the town.
(September 12, 2005 issue)
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