Part of Cebu City Hall’s Special Education Fund (SEF) in 2015 was used to pay for allowances and other expenses, which was not allowed under the guidelines on using the fund, state auditors said.
The Commission on Audit (COA) 7 found out that a total of P111.25 million in expenses were charged to the SEF even if this was not allowed based on audit rules and guidelines on the fund use.
In one of the observations of the COA-7 in its Annual Audit Report (AAR), among the expenses charged to the SEF were the salaries of casual employees (P17.5 million), utility expenses (P4.8 million), bonuses (P1.65 million), terminal leaves or monetization of leaves (P1.35 million) and payment for guards and watchmen (P980,393), among others.
The audit of another P80.6 million in allowances was also suspended by COA for lack of legal basis.
COA said allowances and compensation like cost of living allowance (COLA) and amelioration allowance among others were deemed part of the employees’ standard salaries.
“We recommend (to the) management (City Hall) to advise the local school b oard to stop the grant of additional compensatory allowance and the use of the fund other than its intended purpose,” COA said in its report.
Under Section 272 of Republic Act 7160 or the Local Government Code, the SEF can only be used for operation and maintenance of public schools, construction and repair of school buildings, facilities, and equipment, educational research, purchase of books, and sports development.
The observations, according to the state auditors, were earlier relayed to the city government.
In their comment, the city government explained that also under the Local Government Code, when finances of the city government allow, they can provide additional allowances and other benefits to judges, prosecutors, public elementary and high school teachers and other national government officials assigned to the city.
But the COA insisted that payment of allowances and other compensation, which is considered integrated in the basic salary, are deemed unauthorized.
This is based on Department of Budget and Management (DBM) Budget Circular No. 2001-03.