P300M in Capitol funds unaccounted – COA

By: Gerome Dalipe and Francis Allan L. Angelo

THE fate of more than P300 million in taxpayers’ money doled out by the Iloilo provincial government to various local government units (LGUs) over the years remains uncertain due to lack of monitoring and control on the part of the Capitol.

In its 2018 annual audit report, the Commission on Audit (COA) scored the Iloilo Capitol for its failure to monitor and analyze fund transfers to other LGUs.

COA also rapped the Capitol for not issuing demands to the “delinquent LGUs” to liquidate the amounts they received. In fact, the provincial kept doling out funds to these “delinquent LGUs.”

According to the audit report, the unliquidated fund transfers to other LGUs totalled P391.67 million as of Dec. 1, 2018.

COA said the Capitol could have arrested the aging fund transfer if only it followed the audit agency’s Circular No. 2016-005 which states “that all government entities shall conduct regular monitoring and analysis of receivable accounts to ensure that these are collected when these become due and demandable and that cash advances and fund transfers are liquidated within the prescribed period depending upon their nature and purpose.”

The Capitol transferred funds to other LGUs, municipalities and barangays under its jurisdiction, to accelerate the implementation of various Projects, Programs, and Activities (PPAs).

Each transfer was covered by Memorandum of Agreement (MoA) which provided for the responsibilities of the parties and the terms and conditions of implementation.

Among the responsibilities of the recipient LGUs is to implement the project within six months from the execution agreement. The provincial government, on the other hand, will require the recipient LGUs to submit the fund utilization report and report of disbursements upon its completion.

 

AGING FUND TRANSFERS

But a review of the Capitol’s finances indicated that the liquidation for fund transfers were not regularly monitored and analyzed. As of December 31, 2018, fund transfers for more than one year, amounting to P142,207,111.43, remained outstanding.

COA also found that additional fund transfers totaling P273,894,600.40 were granted in 2018 despite the fact that some of the recipient LGUs were not able to submit their liquidation reports for previous transfers. These transfers were deemed due and demandable since these exceeded the six-month period of implementation as stated in the MoA.

For 2018, only P90,844,330.42 liquidations were credited, which increased the unliquidated fund transfers from P208,621,609.10 in 2017 to P391,671,879.08 in 2018.

 

FINGER-POINTING

The Office of the Provincial Accountant pointed to the Office of the Governor and he Provincial Planning and Development Office as the ones responsible for the monitoring and analysis of fund transfers to other LGUs.

The accountant acknowledged that there were fund transfers that were long overdue for liquidation with no demand letters issued.

He explained that some fund transfers for the implementation of hard infrastructure projects may not be feasibly made within the six-month period provided in the MoA, considering that it will undergo the required procurement process.

“Allegedly, some of the recipient-barangays have limited internet access and no PhilGEPS account, thus took a longer period to successfully award contracts or purchase orders. Nevertheless, he (accountant) agreed that demand will be issued to all local government units with outstanding fund transfers and assured that he will visit various municipalities to meet and conduct dialogue with their respective Accountants relative to this concern,” the audit report added.

COA also called out the Capitol’s attention to the P56.83 million that were transferred from the Special Education Fund to various national government agencies and LGUs.

The state auditors urged the governor to direct the Local School Board Secretariat to coordinate with the Provincial Planning and Development Office Monitoring Division to validate all fund transfers and issue demand letters, if necessary.

The auditors also urged the provincial accountant to reconcile their records with the implementing agencies so that proper adjusting entries may be drawn and liquidation demanded, if warranted.

 

RECOMMENDATIONS

In the report, the state auditors recommended to the governor to direct the provincial accountant to coordinate with the provincial planning and development officer to monitor the status of the fund transfers’ implementation.

The provincial accountant should also analyze the outstanding fund transfers, and issue demand letters to concerned local government unit to liquidate.

Likewise, the auditors urged the governor to stop the release of fund transfers to other local government units that have not implemented or liquidated previous fund transfers that are due and demandable.

The governor also review the draft controls, policies and guidelines submitted by the Internal Audit Services so that all corrections, modifications or revisions could be enforced, approved and applied in subsequent transfers.