Lapu-Lapu flagged for improper use of traffic violation penalties

THE Lapu-Lapu City Government was flagged for not observing the proper budgeting process of the law when it disbursed close to P900,000 from traffic violation penalties.

According to the Commission on Audit’s (COA) 2023 audit report, the City disbursed a total of P850,440 without following usual financial procedures that defied specific sections of Republic Act (RA) 7160, or the Local Government Code of 1991.

The following are the disbursements charged against traffic violation penalties:

• Cash advance intended for the payment of honorarium of resource speakers on June 29, 2023 amounting to P9,000.

• Payment for 600 meals, including snacks and lunch, for the training/seminar of newly hired traffic enforcers on July 20, 2023 amounting to P194,880.

• Payment for 4,000 booklet citation tickets (carbonized) on Aug. 1, 2023 amounting to P600,000.

• Payment for 12 cylinders of liquefied petroleum gas (used for road markings) on Aug. 3, 2023 amounting to P46,560.00.

The COA report stated that the City breached Sections 305 (a) and 306 (b) in relation to Section 22 (c) of RA 7160, which require appropriations ordinances for fund disbursements.

An appropriation is a formal authorization issued by an ordinance that directs the payment of local government funds for services and goods, under specific conditions or for designated purposes.

Moreover, while the trust fund (TF) assumes collections from traffic violations are allocated to the TF, the Traffic Code does not provide a clear procedure for how these funds should be used, which contravenes Section 22 (c) of RA 7160.

Recommendations, City’s response

In their recommendation, state auditors said the City Government should classify collections from traffic violations as income of the General Fund (GF).

This would ensure that the funds will undergo the “usual budgeting process in compliance with accounting, budgeting, auditing laws, and rules and regulations.”

In item 10.7 of the COA audit, the city accountant, during the exit conference, stated that fines and penalties from traffic violations will be recorded in the GF starting January 2024 as one of the sources of funds for the budgeting process

SunStar Cebu tried to reach Mayor Junard Chan for comment but he has yet to respond as of press time.

The COA audit added that as the disbursements of the funds did not follow the required procedures or lacked proper guidelines, these could be classified as “irregular expenditures,” based on COA Circular 2012-003, dated Oct. 29, 2012.

A portion of the 2023 COA report said, “Irregular expenditures are incurred if funds are disbursed without conforming to prescribed usages and rules of discipline.”

The COA report added that any transaction that deviates from or does not meet the prescribed standards is also considered irregular.

Similarly, transactions that do not follow or violate appropriate procedural rules are also deemed irregular. / DPC