THE Department of Budget and Management (DBM) 7 denied the Cebu City Government’s appeal to reconsider its decision declaring the bulk of the P405.55-million second supplemental budget (SB 2) of the City last year as inoperative.
DBM Director Carmela Fernan reiterated that the use of retained operating surplus and reversion of accounts payable in the previous years cannot be used to support and fund a supplemental budget.
Although the DBM previously allowed the City to use the retained operating surplus and reversion of accounts payable as sources of funds for an SB, Fernan said such practice cannot be continued.
“While this office may have unwittingly allowed the use of those aforesaid sources of funds in the past, prudence and propriety dictate that such inadvertence be not committed again,” she said in a letter to City Legal Office Chief Jerone Castillo dated April 27.
Appeal
The City earlier asked the DBM to reconsider its decision and declare the SB 2 operative in its entirety considering that retained operating surplus and reversion of accounts payable have been consistently used to support an SB for eight years, starting 2005 up to 2013.
But as in their previous decision, Fernan said 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.
She said funds are deemed actually available when there are savings. This means these are free of any obligation.
Fernan then said they have been constantly refreshing their technical expertise and knowledge to continuously improve their review function on local government unit’s (LGU) budgets.
She said they want to avoid “oversight and/or omissions” to make sure that annual budgets and SB’s have complied with the budgetary requirements and other limitations set forth in the Local Government Code as well as other applicable laws, rules and regulations.
“In view of the foregoing, we regret to return the request (for reconsideration) without favorable action,” she added.
Return
Based on a primer on the DBM website, a budget that has been declared inoperative is returned to the local chief executive to be adjusted, and the treasurer is told not to disburse any funds from that budget.
However, it does not state what the DBM can do in case the funds have already been spent.
Sought for comment on DBM’s decision, Mayor Michael Rama, in his news conference yesterday said the City will make another appeal.
He said he will have the matter resolved by the City Legal Office.
Asked what the City will do to charges already made on items declared by DBM as inoperative, the mayor said it is what it is.
“If it has served the public purpose, then that’s it. If there is no corruption, then that’s it,” he said.
Among the specific items in the SB 2 that were declared inoperative by the DBM are the P9.78 million budget for city sponsored activities and the P100,000 budget for confidential and intelligence expenses.
The SB 2 was passed by the City Council in October last year.