Cebu City Hall told to explain 2015 P6.2B deficit

THE Commission on Audit (COA) called on the Cebu City government to explain its deficit amounting to P6.2 billion that it incurred in its annual transactions last year.

In last week’s exit conference, state auditors said the city has outstanding current and past obligations, remittances and other liabilities totaling P10.6 billion as of December 31 last year.

They said the city’s available net cash balance is only P4.3 billion leaving them with a P6.2 billion shortfall.

The COA auditors said their records showed that Cebu City has outstanding payables to the Bureau of Internal Revenue (BIR), Government Service Insurance System (GSIS), Pag-ibig, and Philhealth totaling P84.4 million.

COA also stated that the city has not returned to the national treasury its utilized Priority Development Assistance Fund (PDAF) and Countrywide Development Fund (CDF) totaling P80.067 million as of December last year.

“The unexpected balance for continuing and current capital outlay and local disaster risk reduction and management fund of P8.1 billion is now without cash back up,” the COA’s findings stated.

COA said the P55 million granted by the Department of Interior and Local Government (DILG) to the city as a recipient of the Seal of Good Housekeeping in 2011 intended for the Material Recovery Facility Program has yet to be used.

About P71.6 million has yet to be released by the city to the 80 barangays as their share in real property tax collection, affecting their delivery of services to their constituents.

State auditors also said the city spent P8.9 billion last year or an excess of P4.1 billion of the disbursement ceiling of P4.8 billion contrary to law.

Section 337 of Republic Act 7160 provides that “total disbursements from any local fund shall not exceed 50 percent of the uncollected estimated revenue accruing to such local fund in addition to the actual collections.”

The COA said the city government should require the City Accountant, City Budget Officer and City Treasurer to monitor cash use and refrain from using cash balances intended for trust funds and other trust liabilities and reserves.

Cebu City Acting Mayor Margot Osmeña said the resolution ratifying the disbursement of the P800 million cannot cure the defect of the disallowance issued by COA to the city.

Osmeña said the resolution also cannot amend the budget ordinance to address the deficiency cited by COA.

Yesterday was the deadline for returning the money that was issued a notice of disallowance by the COA.

But Acting City Legal Officer Eleodoro Diaz said they still have six months to appeal the COA notice of disallowance.