Iloilo town finished only 2 of 15 development projects, COA finds

ILOILO CITY — Implementation delays, flawed engineering designs, excessive vehicle purchases, and missing supporting documents marred how Ajuy, Iloilo used its 20% Municipal Development Fund (DF), a Commission on Audit (COA) report showed.

Under Section 287 of the Local Government Code, local government units must allocate at least 20% of their annual National Tax Allotment to priority socio-economic development projects.

COA said, however, that its findings indicate Ajuy struggled to turn the funds into completed, functional public infrastructure.

Of the 15 programmed projects for 2025 under the DF, only two were completed by year-end, the audit report showed.

The local government initially planned to implement 11 projects using the fund.

The Sangguniang Bayan (SB) then passed multiple legislative measures during the year that heavily altered the development plans.

The SB reprogrammed PHP 44.15 million initially allocated to six projects into 10 new initiatives.

It also consolidated PHP 10.809 million from 34 continuing projects from prior years into seven projects.

The municipal engineer told COA that failed biddings, incomplete lot acquisition paperwork, storm surge disruptions, delayed engineering designs, and late third-quarter budget reprogramming hindered project execution.

The COA report noted that the local government augmented its engineering office by hiring two additional civil engineers and an electrical engineer to speed up project planning and monitoring.

COA also flagged disbursements under the 20% DF totaling PHP 65.811 million that lacked complete supporting documentation at the time of audit. COA said this violated Section 4(6) of Presidential Decree No. 1445, the Government Auditing Code of the Philippines, and cast doubt on the propriety of the transactions.

The audit report said the Municipal Accountant submitted all missing disbursement attachments to COA on March 6, 2026.

Physical deficiencies, design concerns

COA also identified construction defects and questioned the appropriateness of certain infrastructure projects.

A March 31, 2026, ocular inspection of a 118-linear-meter road in Sitio Nabalas, Barangay Culasi, revealed pockmarks scattered across the concrete pavement, which risk rapid deterioration into potholes if left unaddressed.

The road project was completed only on Jan. 8, 2026.

COA noted that the Municipal Engineering Office coordinated with the contractor to repair the pavement defects in Barangay Culasi before releasing retention payments.

COA also criticized the perimeter fence built at the Luca People’s Village in Barangay Luca.

COA said the fence, built at a National Housing Authority Yolanda permanent housing site, did not fully enclose the village and stood on land not yet formally turned over to the local government.

Yolanda permanent housing sites were built for families displaced by Super Typhoon Yolanda (international name Haiyan), which struck the Visayas in November 2013.

Auditors noted that an expensive fence built along a slope to catch hill runoff was inappropriate, and that lined drainage canals would have been far more effective and economical.

The COA report did not identify the budget or exact cost of the fence.

Vehicle procurement hit

COA also raised concerns over the local government’s multimillion-peso vehicle acquisition program, citing operational mismatches, unfulfilled contractual terms, and improper account retention.

The local government spent PHP 37.628 million for 25 vehicles — nine pickup trucks and 16 commuter vans — and PHP 5 million for two specialized emergency vehicles.

The two emergency vehicles, an ambulance and a dual-AC patient transport van, were delivered in January 2026.

Before this purchase, the local government already had four serviceable ambulances.

With the two specialized units delivered in early 2026, the local government directly operates five ambulances and one patient transport vehicle.

COA said buying 25 additional vehicles for the local government to manage was beyond its actual operational capacity.

Although all 25 vehicles had been physically turned over to recipient barangays for local use, ownership remained recorded in the local government’s books.

As a result, the municipality continued to pay annual insurance premiums using local funds, according to the report.

The local government entered into separate memoranda of agreement with the recipient barangays in March 2025. However, COA inspections found that the barangays had not complied with two key requirements.

First, the agreements required the barangays to provide basic medical kits, emergency supplies, and equipment that must remain inside the vehicles. Auditors found none of these during their inspections.

Second, the vehicles were required to display official emblems or stickers identifying them as “EMERGENCY SERVICE VEHICLE,” along with the name of the recipient barangay. These markings were also absent.

To address COA’s recommendations and relieve the municipality of recurring insurance, repair, and maintenance expenses, the Office of the Municipal Administrator executed 25 deeds of donation, transferring ownership of the vehicles to the recipient barangays.

The deeds officially transferred ownership, financial liability, and administrative control of the vehicles to the designated recipient barangays.