COA: Iloilo City let unbonded workers handle public cash

ILOILO CITY — The Commission on Audit (COA) has flagged the Iloilo City government for recurring internal control deficiencies in its local economic enterprises (LEEs), where unbonded personnel and workers with expired fidelity bonds were allowed to collect public revenues and handle official cash tickets.

In its audit of the LEEs, COA found that accountable officers in public markets, designated parking areas, and the new slaughterhouse delegated the collection of market fees and the issuance of cash tickets and Accountable Form No. 51 to unbonded staff.

COA said 69 job order workers and six plantilla, or permanent, employees were performing collection duties without the required fidelity bonds. This exposed public funds to the risk of unrecoverable loss and misappropriation.

The personnel were deployed at the Iloilo Terminal Market, Iloilo Central Market, Jaro Big Market, La Paz Public Market, Mandurriao Public Market, Arevalo Public Market, Jaro Small Market, the new slaughterhouse, and various designated parking areas.

Of the 69 job order workers, 32 assisted in issuing cash tickets at parking areas managed by the Local Economic Enterprise Office (LEEO).

In public markets, 13 job order workers served as market collectors, 18 assisted in collecting cash tickets, two helped issue tickets, three assisted in issuing community tax certificates, and one performed administrative and collection duties.

The audit also identified unbonded plantilla employees assigned as market collectors at the Iloilo Terminal Market and Iloilo Central Market, with two at each facility.

A spot audit by the City Treasurer’s Office at the Iloilo Central Market further found an accountable officer collecting revenue with an expired fidelity bond.

During verification, COA said, official cash tickets assigned to the officer could not be examined. A job order worker had taken the forms home overnight without authorization and failed to return them in time for audit inspection.

An examination of the Report of Collections and Deposits also revealed a PHP 100 cash ticket overage. Auditors counted 1,607 physical tickets, each valued at PHP 5, against only 1,587 pieces reported on hand, a difference of 20 tickets.

COA noted that the issue is a repeat finding. A similar audit observation and recommendation had been communicated to LEE management in the previous calendar year but remained unaddressed throughout 2025.

The commission emphasized that delegating cash handling to unbonded personnel violates Section 305(f) of Republic Act No. 7160, or the Local Government Code of 1991, which requires all local government officers with custody of public funds to be properly bonded.

A fidelity bond is a form of insurance that protects the government against losses caused by the dishonesty of employees who handle public funds.

COA pointed out that job order workers are non-plantilla personnel and cannot be covered by the Bureau of the Treasury’s fidelity bond scheme.

Consequently, in the event of fund shortages, theft, or misappropriation, the city government would be unable to recover lost public funds through government indemnification claims.

“We acknowledge the limited number of plantilla personnel in LEEs and the need for the augmentation of outsourced workers to ensure their smooth operation and revenue generation,” COA said.

“However, it needs to be highlighted that the delegated responsibility of the bonded AOs to JO workers is not covered by their respective fidelity bond, which may cause the denial of future claims had there been a shortage,” COA added.

Heavy volume during bagsakan hours

The LEEO explained that the delegation of duties was necessary because of severe operational constraints.

It further said existing plantilla collectors were insufficient to handle the heavy volume of merchandise and livestock brought into public markets and the slaughterhouse during peak trading hours, particularly the early morning and late night bagsakan periods.

LEEO added that six plantilla collectors without individual bonds were assigned merely to assist bonded accountable officers in managing the influx of vendors.

To address the deficiencies, COA recommended that the city strictly enforce bonding requirements and ensure that only duly bonded accountable officers handle collections and keep custody of accountable forms and cash tickets.

COA also called for the immediate removal of officers with expired fidelity bonds from cash-handling duties, an end to the transfer of accountable forms and collected funds to unbonded job order workers, and a review of LEE operating procedures by the Internal Audit Services Office to strengthen internal controls.

According to the Agency Action Plan and Status of Implementation report, the city had fully implemented the requirement that all active revenue collectors be properly bonded.

However, draft policies prohibiting the transfer of accountable forms to job order workers and establishing stronger internal control measures remained partially implemented and under administrative review.