Several officials and employees of the Cebu city Government have unliquidated cash advances amounting to almost P100 million as of the end of 2014, according to the Commission on Audit.
This was one of 12 deficiencies pointed out in COA’s Annual Audit Report for 2014.
This was the fourth straight year the Cebu city government received an “adverse opinion” from COA regarding its financial statements.
Sought for comment, Mayor Michael Rama, who was in Manila yesterday, said the COA’s observations would be answered by the city.
“We’re thankful that they have findings and give us an opportunity to explain. Our people don’t do things recklessly,” he said.
He said the annual COA report will be discussed by City Administrator Lucelle Mercado with concerned City Hall staff.
“The important thing is that the auditor’s findings don’t say public funds were stolen. Findings that need to be answered will be answered,” said Rama.
Cash advances are supposed to be fully liquidated at the end of the year.
COA recommended that Mayor Rama direct personnel to immediately settle their cash advances which reach P99.9 million and stop the practice of granting additional cash advances unless the previous ones are first settled.
The salaries of accountable officers should be withheld for this, said auditors.
Other findings:
1. Auditors noted the use of P300 million set aside for construction of the Cebu City Medical Center (CCMC) of which P203.7 million was used for the distribution of cash asid to senior citizens, persons with disabilities, barangay officials and other workers.
COA questioned the demolition of the old CCMC building by contractor JLC Corporation because there was lack of proper documentation of the scrap materials from the quake-damaged building.
2. A P25.1 million contractor for the city government’s use of a private landfill in Consolacion for garbage disposal was “highly questionable”, said COA, because it was awarded without a proper bidding.
3. Auditors noted that barangay officials who received P412 million in financial assistance should be required to liquidate the amount with supporting documents especially for infrastructure projects. Those with hefty unliquidated balances shouldn’t receive more aid, said COA.
Top of the list was Barangay Kalunasan with P23.6 million in unliquidated balances.
Barangay Lahug came in second with P17 million and barangay Poblacion Pardo came in third with P14.7 unliquidated balances.
4. The same recommendations were made by COA for P66.8 million worth of assistance given to Non-Government Organizations (NGOs) and People’s Organizations (Pos) which didn’t submit reports on how they used public funds.
5. COA said the mayor should direct all offices to conduct a physical inventory of supplies and materials.
The non-conduct of iinventories has resulted in an an “unreliable” amount of P809.8 million, said COA.
6. Misrecording of cash aid to local government units affected by typhoons Sendong and Yolanda amounting to P17.9 million was aslo noted.
These were recorded under the “due from LGUs” account instead of as a direct expense under the Donation Account.
COA said this resulted in an overstatement of the receivable account and understatement of the expense account.
Auditors said this should be adjusted “to record all cash assistance” to the Donation account for “fair presentation of the account balance.”
7. City Hall should immediately create an Inventory Committee to account for all the PPE (Property, Plant and Equipment) accounts and Inventory items owned by the city.
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