THE reason for being of state auditors is so somebody or someone could keep tab of the funds collected from the people as their contribution to the government from the earnings they make.
A government exists for the people so they would be able to live in an orderly manner and in peace and quiet. In return, the people pay taxes as a form of tithe to finance the public organization.
A state audit observation memorandum on the City of Cebu’s cash and current liability accounts for the year 2012 pointed out that the city government incurred a potential overdraft of almost a billion pesos.
As reported in one of the city’s newspapers, the Commission on Audit said that Cebu City’s cash balance at the end of 2012 totaled P1,016,168,077.
But this did not meet its “current obligations and trust liabilities that reached P1.981,726,196.” This amount, in fact, still do not include the intra-agency payables of P2.9 billion which then creates a deficit of almost P965,558,119.
The problem is that the city appears to have “misapplied” the trust fund collections.
Consequently, it has been unable to pay its current obligations. Thus, the city is said to have violated certain sections of Republic Act 7160, otherwise known as the Local Government Code.
To be more specific under this consideration, the city violated last year Sections 305 and 337 of the Local Government Code on top of Section 4 of Presidential Decree No. State 1445, otherwise known the Audit Code of the Philippines.
Cebu City’s quick asset ratio for 2012 also showed it has .97:1, which is deemed lower than the ideal 1:1. This ratio is said to measure the ability of a local government unit to use assets to pay its current liabilities.
Toward this goal, the audit observation memorandum (AOM) which the city auditor prepared late last April asked the city mayor to require both the city accountant and the city treasurer to monitor cash utilization and refrain from using trust funds other than for its intended purpose.
The state auditor said that the officers concerned failed to determine the capability of the city to fulfill its obligations, thus there is that urgency of the city
government to implement corrective measures to ensure adequacy of cash.
The city auditor recommended further that the city should exercise prudence in the use of the limited cash resources of the city and thus, should not continue the incorrect practice of incurring obligations without the corresponding cash back-up.
In this sense, it appears wise for the city mayor to be advised to direct enforcement of tax collection as well as institute well-designed ways and means that will help improve the city’s resources.
In a sense, Cebu City, as a typical growing and developing urban center, should strive to achieve a stable means of meeting its financial needs through wise utilization and collection of taxes and the willing support of its inhabitants.
The point is, taxes and tax collection should be the main objective of urban development by all those who live in the city.