Samboan officials ordered to return P610,000 in gifts

Samboan town officials and employees were ordered to refund a total of P610,000 in cash gifts given to them by the municipal government and another P209,160 representing the increase on the officials’ Representation and Transportation Allowances.

In an audit report it released yesterday, the Commission on Audit-7 said the extra cash gift of P10,000 was granted to each of the municipal officials and employees even if the 55 percent Personal Services limitation had already been exceeded, which is a violation of the Local Budget Memorandum 54 that was issued on December 19, 2007.

LBM-54 was issued to inform local government units of President Gloria Arroyo’s authorization to LGUs to grant additional benefit/extra cash gifts to their personnel for the year 2007.

The grant of additional benefit or extra cash gift is to be charged against the savings of LGUs, subject to pertinent budgeting, accounting and auditing rules and regulations on the conditions that it shall be within the limitation that shall be computed in accordance with the circular.

But COA cited that the municipality allowed the granting of extra benefit aside from the regular cash gift of P5,000 that the town is giving its officials and employees. The extra cash gift of P10,000 each was covered by Supplemental Budget No. 6.

However, according to the computation made by the Provincial Budget Office, it was found out that the municipality had exceeded the 55 percent PS limitation required for a 5th class municipality.

COA said that the total income of the municipality from regular sources for the year 2005 was P18,342,302.97, and 55 percent of which is P10,088,266.63 while the total PS appropriation per annual budget was P12,917,262.13.

“Thus, prior to the granting of the extra cash gift, the municipality had already exceed the PS cap by P2,828,995.50. Hence, the grant of extra cash gift was in violation of LBN-memorandum no. 54,” the COA said in a report.

In its answer, the municipal government said the total income for fiscal year 2005, which was used by PBO in its computation, was incorrect since it was based on budget records and not on the financial statement submitted to COA.

The municipal government further explained that the cost of devolution for health workers amounting to P2,777,783.75 should be waived and deducted from their PS appropriation.

But COA noted that the PS allocation of devolved personnel is included in the PS appropriation.

As to the increase in RATA of the town officials, COA recommended that they refund the excess payment of such allowance and told the municipal government to refrain from implementing new RATA rates and observe the PS limitation.

Meanwhile, COA found out that the several sheet accounts of Samboan were misstated due to erroneous accounting entries made on loan received from the President’s Social Fund worth P1 million and the non-booking up of accrued interest expense and payable worth P186,562.50.

State auditors said Samboan received in January 2003 the amount of P1 million from the Office of the President for the project “Isang Bayan, Isang Produkto, Isang Milyong Pisong Programa ni Pangulong Gloria Macapagal-Arroyo.”

The municipal accountant explained that the amount was not recorded as a loan since they were not informed upon its receipt, explaining further that the memorandum of agreement between the Office of the President and the municipal government was not yet signed until now.

The Office of the President had already sent two demand letters informing the municipality of their unpaid loan amortization and interest.   — Mitchelle L. Palaubsanon/WAB