THE disbursements made by the Cebu City Government in its P405.55-million second supplemental budget (SB 2) last year are legal, contrary to a recent comment issued by the Department of Budget and Management (DBM).
DBM declared the bulk of the SB 2 amounting to P286.88 million “inoperative.”
It did not consider the retained operating surplus and reversion of accounts payable as valid sources of funds for the additional budget.
In a recent executive session, the Cebu City Council asked the representatives of the executive department to explain as to what will happen to the items charged to the SB 2.
City Legal Office Chief Atty. Jerone Castillo told the body that the disbursements are “proper” and “legal,” as the budget was implemented before DBM issued its review results.
The second extra budget was approved by the City Council last October, while the DBM review was released last month.
“There was a recent case declaring the usage of the DAP (Disbursement Acceleration Fund by the National Government) to be unlawful, but it did not in any way affect the disbursements made. In fact, the Supreme Court said it would not affect disbursements made prior to declaration that it is illegal,” Castillo said.
He said that only the court can declare with finality that the City cannot make charges against the SB 2, which is covered by an appropriation ordinance.
The lawyer said that the City can still challenge the DBM ruling, as there are many remedies available, such as by filing motion for reconsideration.
Castillo, however, questioned the inconsistencies of the DBM in reviewing the City’s budget.
Accounts
He pointed out that from 2005 until 2013, DBM declared operative the budgets supported by retained operating surplus and reversion of accounts payable.
“There are inconsistencies on the approval of these sources of funds,” he said.
He said they will further study the review on the SB 2 and submit comments about it to the DBM and the council. When a budget is declared inoperative, it is returned to the local chief executive for adjustments, and the treasurer will be 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.
During the session, members of the local finance committee were asked to appear before the council, but they failed to attend because of prior commitments.