COA to Toledo City: Justify ‘extravagant’ travel, training expenses

| Toledo City Government Facebook page

CEBU CITY, Philippines — The Commission on Audit or COA has asked the officials of Toledo City in western Cebu to submit justification on their travel and training expenses which were classified as ‘extravagant’ expenditures.

This after COA, in its 2020 Audit Report, noted that Toledo City spent a total of P2,245,560 in travel expenses to various destinations for conducting year-end activities amid the call of the national government for austerity measures due to the emergency health situation.

The travel expenses ‘undermined the importance of the city’s capability in promoting efficient and effective governance in mitigating, responding and recovering from the impact of covid-19.’

COA also recommended the city to stop charging the travel expenses of job orders and employees of other government agencies to the city.

“We recommend that the City officials submit justification on their travel and training expenses which were classified as “extravagant” expenditure pursuant to Annex E.3 of COA Circular 2012-003 dated October 29, 2012. Likewise, we recommend that the City stop charging the travel expenses of JOs and employees of other government agencies to the city,” read one of the three significant observations and recommendations of COA.

Annex E.3 states the ‘conduct of out-of-town meeting which can be made within the office premises’ as one of the cases considered ‘extravagant’ expenditures of government funds.

Apart from that, COA also noted the suspension orders on the Design and Build of Sports Complex Phase 1 with a contract cost of P648.37 million that were issued without the approval of the local chief executive, wherein work stoppage reportedly lasted 283 calendar days and the liquidated damages were not imposed.

“We recommend that Management submit the lacking documents, prepare reports on the work stoppage and justify the deficiencies noted above for the Audit Team’s evaluation,” read the recommendation.

For its third observation, COA noted the lack of supporting documents required under the Department of Social Welfare and Development (DSWD) for the disbursement of the Social Amelioration Program under the Bayanihan to Heal as One Act amounting to P46,134,000.

“…thus, casting doubt on the regularity of the claim. Also, some beneficiaries did not sign in the payroll, thus rendering the receipts of such assistance doubtful,” it read further.

“We recommended that the City Social Welfare and Development Office submit the lacking documents as well as the liquidation reports  of the remaining cash advances and explain the cash assistnace disbursed totaling P756,000 without signatures of the beneficiaries in the payroll,” read the recommendation.

In its qualified opinion on the financial statements, COA noted a net difference of P405,509,340.51 on the Property, Plant and Equipment.

This after the reported balance of Property, Plant, and Equipment of P3,669,123,891.51 per accounting records, did not reconcile with the balance in the Summary PPE submitted by the General Services Department amounting to P3,263,614,551.

It also noted the unreliability of the Cash in Bank — Local Currency, Currency Account balance totaling P2,729,117,540.97 due to five reasons which included: unreconciled difference between the unadjusted book balances presented in the Bank Reconciliation Statement (BRS) and the General Ledger (GL); existence of prior years’ deposit in transit in BRS; classification of 16 stale checks issued in CY 2014 to CY 2020 as outstanding checks; erroneous treatment of interest earned; and unadjusted prior year’s reconciling items due to the inability of the management to secure proper documentation as basis for adjustment in the agency’s book.

It further said that the Accounts Payable amounting to P31,653,254.22 could not be relied upon citing that the said account remained outstanding for two or more years and that it was not reverted to the Unproppropriated Surplus.

“The City’s records did not permit the application of adequate alternative procedures to verify the said inventories, property, plant and equipment since no records, such as property cards, stock cards, property, plant and equipment ledger card and stock ledger card were maintained by the agency. Likewise, the Cash in bank balance cannot be verified since no information on what bank and branch the cash is deposited. The said amount does not appear on any bank confirmations made,” read the qualified opinion.

However, COA has noted the significant accomplishments of the city in terms of administrative services, environmental management, and social services.

For the administrative services, Toledo City was awarded second place for being one of the most improved component cities of Cebu in its efforts to put up Negosyo Center.

Another highlight is the regular collection of garbage around the city with the purchase of new dump trucks for Solid Waste Management and other environment-related management in the city.

For social services, a total of 17,000 senior citizens benefited from the financial assistance provided by the city in the year 2020, and that they continuously provided service to children to reduce malnutrition as well as assistance to indigent people.

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/dbs