THE bulk of the Cebu City Government’s P405.55-million second supplemental budget (SB 2) last year is “inoperative,” according to the Department of Budget and Management (DBM) 7.
When a budget is declared inoperative, it is returned to the local chief executive to be adjusted, and the treasurer is told not to disburse any funds from that budget, according to a primer on the DBM website. It does not state, however, what the DBM can do in case the funds have already been spent.
The amount in question totals P286.88 million.
In a two-page letter to the City, dated Feb. 5, DBM 7 Director Carmela Fernan said they did not consider retained operating surplus and reversion of accounts payable in the previous years as sources of funds.
Of the P243.72 million approved budget in the general fund, P241.52 million was declared inoperative by the DBM.
This includes the P30.25-million reversion of accounts payable in 2011 and P211.27-million retained operating surplus in 2013.
Sources of funds
Of the P161.83 million approved budget in special accounts, P45.35 million is inoperative.
The amount is retained operating surplus for 2013.
According to Fernan, only funds that are actually available as provided for under Administrative Order 47, amending Article 417 of the implementing rules and regulations of Republic Act 7160, or the Local Government Code, can be considered sources of funds for an SB.
“Funds actually available refer to the amount of money actually collected as certified by the local treasurer at any given point during the fiscal year, which is over and above the estimated income collection for that point in year,” she said.
Fernan said funds are also deemed actually available when there are savings. This means these are free of any obligation.
“Both retained operating surplus and reversion of accounts payable do not conform to that definition. Specifically, the funds for the accounts payable should have been reverted back to the general fund in the event that the same are no longer enforceable or are waived/forfeited,” she said.
“Hence, the same are disqualified from being considered as sources of funds to support a supplemental budget,” she added.
In Fernan’s letter, among the specific items in the SB 2 that were declared inoperative are the P9.78 million budget for City-sponsored activities and the P100,000 budget for confidential and intelligence expenses.
Asked about the result of DBM’s review, Acting Mayor Edgardo Labella yesterday said he would reserve his comment after reading the document.
City Treasurer Diwa Cuevas echoed his sentiment.
City Budget Officer Marietta Gumia, for her part, said they will answer DBM’s observation and submit it to the agency.
The City’s SB 2 was passed last October.