COA flags town over unspent disaster, development funds

ILOILO CITY — State auditors have flagged the municipal government of Badiangan, Iloilo, for using only 27.38% of its disaster fund in 2025 and leaving six priority development projects unimplemented by year-end.

In its 2025 annual audit report on the municipality, the Commission on Audit (COA) said both lapses were inconsistent with the national disaster risk reduction law and budget rules, and that the objectives of both funds were not fully attained.

PHP 17.3 million in disaster funds unused

Of the PHP 23.787 million available under the Local Disaster Risk Reduction and Management Fund (LDRRMF) in 2025, the town used only PHP 6.512 million.

This left PHP 17.275 million, or 72.62%, unused by the end of the year.

COA said the low utilization was inconsistent with Republic Act 10121, or the Philippine Disaster Risk Reduction and Management Act of 2010, and that the town’s objectives of reducing disaster risks and enhancing disaster preparedness and response capabilities “were not fully attained.”

Under RA 10121, local government units (LGUs) must set aside at least 5% of their estimated revenue from regular sources for the LDRRMF.

Badiangan appropriated PHP 7.991 million for 2025, equivalent to 5% of its estimated regular revenue, according to COA.

Of that amount, PHP 5.594 million went to the Mitigation Fund, which covers 70% of the LDRRMF, while PHP 2.397 million went to the Quick Response Fund, which covers the remaining 30%.

The town used PHP 3.212 million, or 40.19%, of its 2025 appropriation.

It also used only PHP 72,400, or 29.89%, of a PHP 242,201 continuing appropriation.

The rest of the available fund consisted of PHP 15.553 million in unexpended balances from 2020 to 2024 held in the Special Trust Fund (STF), of which only PHP 3.228 million, or 20.75%, was used.

Balances dating back to 2020

COA’s data showed that none of the PHP 4.009 million carried over from 2024 was spent in 2025.

Of the PHP 4.067 million balance from 2021, only PHP 662,706 was used.

The town spent PHP 1.587 million of its PHP 3.438 million balance from 2023 and PHP 978,232 of its PHP 1.799 million balance from 2022.

The PHP 2.241 million balance from 2020 was not used at all.

RA 10121 allows unspent LDRRMF balances to be placed in a special trust fund for disaster-related use over the next five years. Any amount still unused after that period reverts to the LGU’s General Fund.

COA said the unused 2020 balance, which was due to lapse in 2026, was reverted to the General Fund on Jan. 28, 2026.

7 disaster projects not implemented

Auditors found that of the 23 programs, projects, and activities (PPAs) under the LDRRMF, seven were not implemented as of Dec. 31, 2025.

These had a combined allocation of PHP 13.088 million and included geohazard mapping and risk assessment, financial assistance for victims of Severe Tropical Storm Paeng, post-disaster capacity building, and structural improvements to the Municipal Evacuation Center.

Paeng, known internationally as Nalgae, struck the country in late October 2022 and caused widespread flooding in parts of Western Visayas.

Six of the 23 PPAs were fully completed in 2025. These were mainly civil works, including slope protection structures in Sitio Dawis, Barangay Astorga-Malublub, and Barangay Calansanan, as well as municipal drainage canals.

The remaining 10 PPAs were only partially implemented or still ongoing by year-end.

“This low utilization rate could adversely affect the Municipality’s disaster preparedness and response capabilities to mitigate the effects of future calamities and disasters in its communities,” COA said.

The audit agency noted that the finding repeated an observation from the previous year’s audit.

COA also cited a 2012 Department of the Interior and Local Government memorandum circular directing local chief executives to use their disaster funds to procure basic rescue and response equipment and to carry out the national disaster risk reduction and climate change action plans.

It further invoked Presidential Decree 1445, the Government Auditing Code, which requires government resources to be used efficiently, economically, and effectively.

The decree states: “The responsibility to take care that such policy is faithfully adhered to rests directly with the chief or head of the government agency concerned.”

COA recommended that the municipality properly plan, closely monitor, and evaluate LDRRMF-funded PPAs so that problems causing delays are addressed in time.

It also called on the local disaster risk reduction and management council to study and, if necessary, revise its LDRRMF investment plan to determine the causes of delays and nonimplementation, including those involving prior years’ unspent funds.

The findings were communicated to the municipality through an audit observation memorandum dated March 25, 2026.

6 development projects unimplemented

In a separate finding, COA reported that six priority projects worth a combined PHP 4.422 million under Badiangan’s 20% Development Fund (DF) were not implemented as of Dec. 31, 2025.

Under the Local Government Code, LGUs must set aside at least 20% of their annual National Tax Allotment (NTA) for development projects.

In 2025, Badiangan appropriated PHP 40.492 million from its NTA share for 34 DF projects.

Of these, 21 projects worth PHP 31.095 million were funded under an appropriation ordinance passed on Dec. 26, 2024, and 12 projects worth PHP 8.952 million under a supplemental budget dated July 21, 2025.

One project worth PHP 446,008 was added through another supplemental budget on Dec. 16, 2025.

Four of the 34 projects, worth PHP 2.422 million, were not implemented. These were a PHP 500,000 perimeter enclosure for an open court, a PHP 1.3 million slope protection project at Calansanan Bridge, a PHP 175,559 pathway concreting project in Ilongbukid, and a PHP 446,008 tourist rest area.

Two other projects worth PHP 2 million, funded under prior years’ DF, also remained unimplemented. One of them was a PHP 1 million purchase of information and communication technology equipment for the Community-Based Monitoring System, funded in 2023.

COA said two of the six projects are to be reprogrammed, while the rest are to be implemented in 2026.

The audit agency said the nonimplementation was inconsistent with a 2020 joint memorandum circular of the Department of Budget and Management, the Department of Finance, and the Department of the Interior and Local Government.

The circular requires that DF-funded projects be “well-planned and procurement-and-implementation-ready.”

Auditors said the reasons for nonimplementation showed that the projects “were not well-planned or procurement-and-implementation-ready.”

As a result, COA said, the desired socio-economic targets and outcomes “were not fully attained,” depriving residents of the intended benefits.

COA recommended that the municipal mayor direct the implementing offices to expedite the completion of stalled projects, fast-track the reprogramming of funds to other workable projects, and conduct periodic reviews of PPAs to ensure their timely and feasible implementation.

The findings were communicated to the municipality through an audit observation memorandum dated March 27, 2026.