Sunday, September 07, 2008 Lapses in P1.2M loan catch COA's eye
UNPAID loans and an illegal increase in the allowances of town officials were among the lapses government auditors discovered when they reviewed Poro’s transactions in 2007.
The town government granted loans to a fishermen’s group worth P288,266 despite the absence of an agreement, said the Commission on Audit (COA) 7.
At least P389,340 lent to hog raisers last year remains unpaid, auditors said.
Likewise, appropriations for town officials’ representation and transportation allowances worth P270,000 and personnel services worth more than P5 million were illegal.
The town increased the town officials’ allowance, which cost a total of P270,000, last April and December 2007, COA found out.
Auditors asked the town officials to refund the excess payments and refrain from further releasing new representation and travel allowances to town officials.
“Had the town government implemented the release of the loan in accordance with the purpose… maximum benefits could have been derived and the purpose for which the loan was intended could have been attained,” COA 7 said in its annual report.
The town government released P914,966 in loans to the town folk and P288,266 to the Poro Unified Fishermen’s Association last year.
The first batch of loans was intended for small and medium enterprises (SMEs) under the “Isang Bayan, Isang Produkto, Isang Milyong Pisong Programa ni Pangulong Arroyo.”
But auditors questioned the release of the loan to the fishermen’s group despite the lack of a memorandum of agreement.
“No data were available on the repayment period and the interest rate of the loan granted. Furthermore, no payment has been made by the association in settlement of its obligation,” auditors said.
The town treasurer explained that the fishermen’s group had “difficulty” in settling its obligations, citing some failures in their project.
Auditors also disclosed that the town government failed to collect payments for much of the loan of P389,340 granted to hog raisers last year.
The town treasurer said that only P61,340, or about 16 percent, was collected as of Dec. 31, 2007 despite demand letters from the town government.
“Municipal officials concerned should convene with the beneficiaries and discuss matters to be able to come up with effective measures to enforce collection of overdue accounts,” auditors said.
Auditors also questioned the town government for granting additional appropriations for personnel services worth more than P5 million last year, which COA 7 said exceeded the 55 percent limit.
State auditors informed the town officials about the deficiency but they remained “unresponsive.”
Regional auditors verified that the town government released more than P19 million for personnel services, or about P5 million in excess, when the town was supposed to limit itself to P14 million.
“It was further noted that the actual personnel services expenditures exceeded the total appropriation” by P251,655, auditors said.
COA 7 asked the town’s budget officer and accountant to verify what the “excess” spending was for.
Otherwise, the excess amount must be charged to the town officials responsible for the release of the amount. (GMD)
