2018 COA Reports: Gigmoto transferred dev’t funds without appropriation ordinance
posted 10-Sep-2019  ·  
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An audit of the Gigmoto municipal government’s transactions last year has discovered that the LGU transferred appropriations of the 20% Development Fund from one project to another without an approved appropriation ordinance covering a supplemental budget.

According to the report, P5 million originally intended for the concreting of a farm-to-market road under the Philippine Rural Development Program (PRDP) was reprogrammed to five other projects: Construction/Extension of Municipal Evacuation Center, P2 million; Construction/Extension of Biong Seawall, P1 million; Construction/Extension of Biong Seawall, P1 million; and, Installation of Solar Powered Street Lights, P1 million.

“(T)ransfer of appropriations from one project item to another even by ordinance (is) prohibited,” the Commission on Audit pointed out, adding that the only exception is when savings from the appropriation of the office of the local chief executive or the presiding officer would augment certain items but within the same expense class by appropriate ordinance.

In addition, Section 321 of the Local Government Code provides that any changes in the annual budget shall be done by way of a supplemental budget but it must be supported with a certification on the availability of funds by the local treasurer, it stated.

While the fund transfer is similar to a budget augmentation, the COA team said, it is not valid since augmentation implied the existence of a budget item or project with an appropriation that was subsequently determined to be deficient.

“In the case at bar, there were no items or projects determined to be deficient that needed fund augmentation,” it stressed. “Rather, these were new projects needing funds for implementation.

An interview with the budget officer disclosed that the transfers of appropriations were authorized only by Municipal Resolutions, and there was no certification from the treasurer as to the availability of funds, the report bared.

“Clearly, these were cases of realignment in which funds were seemingly appropriated to non-existing items in the budget,” the COA stressed, describing the disbursements of funds for the re-aligned projects as “illegal” for lack of appropriation ordinance covering a supplemental budget duly reviewed by the Sangguniang Panlalawigan.

The yearly review by the state auditing agency also uncovered the wide salary gaps between department heads and next-ranked employees in eight departments.

It found that the municipal assessor, accountant, budget officer, planning & development coordinator, engineer, civil registrar, agriculture officer, and social welfare and development officer, who are on salary grade 24 (except for the agriculture officer who is SG-20), differed in SG levels ranging from 9 to 20.

For instance, it said, the assessor, engineer and SWD officer’s next-in-rank subordinate are at SG-4.

The increase in Gigmoto’s population and the downloading of various national government functions to the LGU show that the department head along cannot do the job, which has to be shared with each and every employee in each department, the COA stressed.

“(H)aving an organizational structure where the department head and the next-in-rank has a wide salary gap does not promote justice and fairness,” it added, noting that several LGU personnel had already voiced out the scale discrepancy in the LGU’s staffing pattern to the audit team.

It also noted that the positions of treasurer, budget officer and civil registrar are still unfilled.

It recommended that the local chief executive make a study on the organizational structure and staffing pattern to correct the wide salary gaps among employees for better delivery of public service.

Among the other significant audit observations in the report were: lump-sum appropriation of Solid Waste Management (SWM) projects in the 2018 budget; low collection efficiency on Real Property and Special Education Taxes; and, failure to initiate and implement the project for the acquisition of water purifying machine that would immediately deliver potable water to victims of calamities.

The administration, however, was commended by the COA for its substantial implementation of programs and projects funded by national government agencies, a high 86% implementation of 20% Develiopment Fund projects and programs, substantial utilization of funds for Gender and Development (GAD) programs, and substantial 95% liquidation of cash advances for 2018.

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