Only seven audit observations, mostly due to recording lapses were reported by the Commission on Audit involving the use of government funds for the Cebu City government for 2017.
In its annual audit report for 2017, the Commission on Audit (COA) said the number was smaller compared to 2016, which had 11 audit observations, or only noted seven audit observations, most of which had something to do with recording lapses.
The number of audit observations for 2017 was lesser in comparison with the 11 audit observations which they raised in their 2016 report. These observations are discrepancies that need to be explained.
COA also gave the city government a qualified opinion for the second time since 2016.
“We expressed a qualified opinion on the fairness of the presentation of the financial statements of Cebu City for the year 2017,” COA stated.
Audit Observations
Except for the P3.1 million in un-liquidated cash advances taken from the city’s Special Education Fund (SEF) and trust fund, other 2017 audit observations were on unreconciled balances resulting from lack of proper recording and documentation.
An example is the “unreliable balances” of the city’s property, plant and equipment accounts amounting to P10.3 billion which resulted from unreconciled differences in the city’s accounting of the property records amounting to P840.2 million.
The differences were found to have resulted from the city’s failure to include some motor vehicles in their accounting inventory.
There were also some recordings that were found to have been duplicated.
However, COA Central Visayas Director Eden Rafanan said there was still a need for the city to address these audit observations.
Rafanan said the audit observations were already discussed with concerned department heads during an exit conference last February 27, 2018.
“We request that the recommended remedial measures be immediately implemented and will appreciate being informed of action(s) taken thereon by submitting the duly accomplished Agency Action Plan and Status Implementation within 60 days from receipt hereof,” said Rafanan in a June 29, 2018 letter to Cebu City Mayor Tomas Osmeña.
City Councilor Margarita “Margot” Osmeña said that while the latest COA report attests that the administration has improved in the handling of their financial statements, they’re still aiming for an unqualified opinion from state auditors.
“This is actually good, and we’re happy that we have handled our finances better than in the previous years but we’re also doing our best to have an unqualified opinion from them (COA),” said Margot, who chairs the council’s committee on budget and appropriations.
In their 2016 report, COA called the city’s attention to the P28.7 million in unremitted payments to BIR, GSIS, Pagibig and Philhealth and P42.2 million in unliquidated cash advances even if activities funded by these allocations were already completed.
Another P56 million which was released to non-government organizations (NGOs) and people’s organizations (POs) have also remained unliquidated while another P10.8 million in disbursements were not recorded because of non-submission of disbursement vouchers.