COA tells Santander: Recover P10.4 million

CEBU, Philippines - The Commission on Audit (COA) has told the local government of Santander to recover the cash amounting to P10.4 million deposited in the Rural Bank of Santander, Inc. which was held under receivership by the PDIC since 1999 and resulted in the loss on the part of the municipality.

Verification of the other asset account in the financial statement of the municipality in 2011 disclosed that the amount of P10,422,804.64 (P790,688.69 from General Fund and P9,632,115.95 from Trust Fund) represented Cash in Bank deposited in the Rural Bank of Santander, Inc..

The said private bank was held under receivership by the Philippine Deposit Insurance Corporation since 1999.

COA said that the amount has not been recovered by the municipality until now.

The unrecovered deposit in a private bank had been reported in the Annual Audit Reports in CY 2000 and 2010.

The documents related to the claims for recovery of the deposits were already submitted to the Provincial Attorney’s Office and the municipality had already received the amount of P200,000.00 insurance from PDIC.

COA reported that the legal action for recovery of remaining deposits were still in process in the Litigation Court of PDIC.

“No legal action was undertaken by the municipality to recover the amount from the municipal officials responsible for the deposit as recommended in the previous Annual Audit Report of the auditor,” the audit report reads.

COA recommended that the municipality should make a constant follow up with the Provincial Attorney as to the status of the claim for the money lost.

It also recommended that the Sangguniang Bayan should pass a resolution on how to recover the amount from the municipal officials who were responsible for the deposit in a private bank.

Meanwhile, COA also reported that the municipal treasurer failed to deposit all her daily collections intact and regularly, thus exposing public funds to possible misappropriation or loss thru theft.

In the analysis made by COA on the collections and deposits for CY 2011, it was observed there was a substantial balance of P797,815.20 in the Cash in Vault account.

Out of undeposited collections of P797,815.20 at year-end, only P313,649.50 was deposited on January 6, 2012.

“Substantial undeposited collections is highly disadvantageous to the municipality since it encourages commission of irregularities and misappropriation and the risk of loss through theft,” COA said.

COA told the municipal treasurer to deposit all the collections daily or not later that the next banking day as required by law.—/JPM (FREEMAN)