Argao’s P12M transferred to LGUs unliquidated

CEBU, Philippines - The Commission on Audit has discovered that a total of P12 million of funds of the Municipality of Argao transferred to other local government units for the implementation of various infrastructure, development, or community projects may have remained unliquidated for more than one year.

This is due to the failure of the municipality to closely monitor submission of liquidation or disbursement reports, thereby misstating the balance of certain accounts in the financial statements.

COA Circular No. 94-013 dated December 3, 1994 requires that all cash transferred to implementing units shall be liquidated by the latter thru the submission of the Report of Disbursements.

Succeeding releases to LGU-Implementing Units shall only be made once the Reports of Disbursements of the previous advances are submitted. 

Further, the return of any unused balance of the advance after completion of the project is required.

As of December 31, 2012, COA found that due from LGUs-General Fund and Trust Fund amounted to P10.5 million and P1.6 million, respectively.

“We requested for a schedule of the Due from LGUs account but until the preparation of this report, we have not received any,” said COA in its 2012 annual audit report.

COA said that the funds were for infrastructure, development, or community projects of the municipality which projects may have already been completed.

However, the required reports and supporting documents were not yet submitted by the grantees, thus recording of asset or expense account in the books of the municipality could not be undertaken.

COA recommended that close monitoring on the submission of liquidation reports be undertaken by the Municipality.

Concerned LGU Accountants should be reminded or required to immediately submit the Reports of Disbursements and to return unused balance of fund transfer so that corresponding expenditures can be recorded in the books of accounts.

Meanwhile, COA also found that rules and regulations in the grant of financial assistance of the municipality to non-government organizations (NGOs) and people’s organizations (POs) and monitoring over the submission of liquidation reports on the utilization were not strictly enforced resulting in unliquidated grants of P2.4 million.

As of December 31, 2012, the Municipality of Argao granted financial assistance to NGOs and POs from the General Fund in the amount of P467,348 and from the Trust Fund in the amount of P2 million.

COA said that the financial assistance may have remained unliquidated for more than one year due to the failure of the various grantees to submit the Fund Utilization Report as required by law.

COA also recommended that the municipal government make concrete efforts by sending demand letters to NGOs/POs for the immediate settlement of their outstanding balances and improve the present monitoring and control measures on the liquidation of fund releases.

“For future grants of financial assistance to NGOs/POs, strict adherence to COA Circular No. 2007-001 is enjoined to ensure prompt liquidation thereof,” it added. (FREEMAN)