THE Commission on Audit (COA) has found an over-remittance of building permit fees by the Lapu-Lapu City Government to the Department of Public Works and Highways (DPWH).
Audit observations contained in the COA 2023 report revealed that an excess total of P502,310.32 was paid to the DPWH for their share of the collected building permit fees.
The audit report further disclosed that the City also made an over-remittance of P780,442.27 in the February 2023 collections on May 16, 2023; but noted that collections for March and April were remitted in full in June 2023.
“Despite offsetting the collections made from May 2023 to December 2023 against the over-remittance, the balance of the over-remittance still stands at a substantial amount of P502,310.32,” states a portion of the audit report.
City’s response
State auditors recommended that executives should direct the city treasurer to prevent instances of over-remitting payments to the National Government, involving funds not budgeted, which could affect the general fund’s operations.
In response, the City requested the Bureau of the Treasury (BTr) to correct the incorrect remittance to the DPWH account. The agency has yet to respond.
Paragraph 7.7 noted that the City did not remit the DPWH’s share starting from the May 2023, until such request was approved.
SunStar Cebu tried to reach Mayor Junard Chan through text message; but he also has yet to respond.
Joint Memorandum Circular (JMC) 001 of the DPWH and the Department of the Interior and Local Government (DILG) authorizes “procedural guidelines for the disposition of the 20 percent generated from building permit fees and other charges” under the National Building Code of the Philippines (PD 1096).
The JMC states that the local treasurer must send five percent of the income to the DPWH secretary’s account under the Special Account 154 through the BTr.
DILG’s Memorandum Circular 2014-153, dated Dec. 12, 2014 also mandates that both the local chief executives and local treasurers must promptly enforce the provisions outlined in the JMC.
Road projects
Still under the 2023 audit observations, state auditors also found discrepancies in the City’s financial and documentation management practices on issues pertaining to road projects.
COA flagged the City’s required supporting documents and records in the compensation payment of road lots as incomplete.
According to the COA report, the compensation paid for parcels of land affected by existing road or road opening totaling P7,976,288.91 were not supported by complete documents.
The recommendations state that the City had agreed to submit to the audit team the lacking documents required under COA Circular 2012-001 for evaluation.
In its response, the City said some “documents may only be processed after the execution of the deed of sale” and other documents were available but were not submitted.
With regards to the payment compensation, a re-appraisal of property has been requested.
The COA report said paying just compensation based on current valuations is highly disadvantageous to the government and unfair to property owners whose properties were taken around the same period but were earlier compensated at a lower valuation.
As a rejoinder, City officials were instructed to submit all available required documents.
If the documents cannot be obtained, state auditors said it may lead to further issues, including the potential non-registration of the acquired land parcels, as mentioned in previous audit observation for 2021 (Audit Observation Memorandum 2022-026 (2021), dated Feb. 15, 2022), which remained unimplemented.
Payments of just compensation for properties affected by the existing roads totaled to P3,177,988.06.
The state auditors recommended the officials to submit justifications on the payment of just compensation at the current valuation for the audit team’s evaluation.
They also reminded the City to adhere to Section 4, Rule 67 of the Rules of Court, which imposes that compensation should be based on the value at the time the property was taken or when the complaint was filed, whichever occurs first. / DPC