2018 COA Reports: 13 banks accounts unrecorded in San Miguel LGU’s books
 
San Miguel, Catanduanes  ·  
posted 13 days ago  ·  
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The Commission on Audit (COA) has discovered that 13 bank accounts of the San Miguel municipal government were not recorded in the agency’s books of accounts.

According to the 2018 audit report, the LGU’s unrecorded bank accounts had a total balance of P6.665 million as of Dec. 31, 2018, with the largest portions of about P2 million each intended for the Municipal Disaster Risk Reduction and Management (MDRRM) and the Grassroots Participatory Budget Process (GPBP). The disbursements were not likewise recorded in the books.

The auditors noted that the same thing happened in 2017 and 2018, with the finding used as basis in issuing an adverse opinion on the fairness of the presentation of financial statements.

“Despite continuous follow-ups on the implementation of the audit recommendation to record in the books of accounts all the transactions pertaining to the 13 bank accounts, the Municipal Accountant still neglected to comply with the audit recommendation for unknown reasons,” the report disclosed.

Since the transactions pertaining to the bank accounts were not recorded in the books and submitted for audit, the validity and propriety of transactions could not be ascertained, it added.

The review of last year’s financial transactions also flagged the unauthorized realignment of appropriations for 20% EDF and MDRRM Fund from one item to another without an approved appropriation ordinance.

According to the report, half of the 20% EDF counterpart funds for development programs in the amount of P2 million were realigned to three infrastructure projects while part of the P500,000 funding for acquisition of water purifier was realigned to another infra project costing P200,000.

The COA noted that these were new projects needing funds for implementation. An interview with the budget officer showed that the transfers of appropriations were authorized only by municipal resolutions and there was no certification from the treasurer as to the availability of funds.

“Hence, such realignment or re-appropriation of funds should have been done through an appropriation ordinance covering a supplemental budget to authorize the disbursement of funds for the projects,” it stressed, adding that such disbursements for the re-aligned projects were illegal.

It also observed that the LGU utilized a lump-sum appropriation for projects totaling P3.5 million also without an appropriation ordinance.

Under the rules, utilization of all capital outlay projects and lump-sum appropriations should bear the authorization of the Sanggunian for every specific project to be implemented, the report said.

“In the case at bar, project review showed that covering appropriations were in generic terms lacking in details such as place and program of works, thus it was mandatory to secure authorization from the Sanggunian,” the COA reminded the LGU.

The audit team also discovered that the daily collections were not remitted to the municipal, treasurer and, instead, the monies were deposited to the bank by the Revenue Collection Officers themselves and not the treasurer as required.

This led to the treasurer unable to verify whether collections were properly accounted and deposited intact.

The audit also turned up instances of split deposits wherein collections for a certain day were not deposited intact but instead fractions thereof were deposited in the succeeding days.

In addition, the COA bared, there were also incidents when official receipts were not issued in sequential order.

“Hence, there was always the risk of fraud since collections were deposited at the discretion of the collecting officers,” it underscored, adding that the practice carries with it the risk of exposing government funds to loss or misuse.

Ineligible expenditures totaling P1.738 million were also charged to the 20% EDF in violation of DILG-DBM Joint Memorandum Circular No. 2011-1.

It was found out that the LGU charged to the development funds the purchase of diesel fuel and battery, improvement of Eco park, and development of Solong Falls, which are not considered as development projects under the circular.

The municipal government has agreed to comply with the COA recommendations regarding its findings.

The other significant findings in the 2018 audit report were: intended programs for Solid Waste Management in the 20% EDF were not properly implemented; expenditures for the sports development exceeding the approved budget by P122,133; delay in the submission of required documents to COA; and, failure to collect additional taxes amounting to P2.672 million.


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