Trust fund for contributions opposed

CEBU, Philippines - The Cebu City Legal Office and City Treasurer’s Office is opposing the proposed ordinance establishing a trust fund out of the city’s appropriations, donations and contributions for the construction of the Cebu City Medical Center.

This was disclosed yesterday during the public hearing on the proposed measure authored by City Councilor Eugenio Gabuya, Jr.

Gabuya said that the proposed measure aims “to avoid co-mingling of public funds, there shall be created and established a trust fund out of these donations and contributions which shall be deposited with the Office of the Treasurer.”

“Appropriation out of this trust fund shall be made only for the construction of the new Cebu City Medical Center and for all other compulsory and essential projects connected therewith and should never be diverted or deviated for any other purpose whatsoever without the prior approval from the Sangguniang Panglungsod,” the measure reads.

City lawyer Jerone Castillo said he has spoken with the members of the Local Finance Committee on the matter, adding that they have reservations as to establishing a trust fund for already appropriated items.

While admitting the nobility of the purpose of the ordinance, Castillo said that approved appropriations under the city government’s general fund should be separate from a trust fund.

Castillo cited section 309 of the local government code which states that “trust funds shall consist of private and public monies which have officially come into the possession of the local government or of a local government official as a trustee, agent or administrator.”

“Meaning, there is a purpose in receiving the fund, number one as trustee, as agent, or administrator.    That  is   why we have serious reservations as to making a trust fund out of local funds because there are certain provisions for general funds,” he said, adding that there is no problem if the city government will establish a trust fund out of the donations and contributions.

He also cited section 308 of the local government code which states that “local funds-every local government unit shall maintain a General Fund which shall be used to account for such monies and resources as may be received by and disbursed from the local treasury.”

Castillo said that the city government cannot use the trust fund from the general fund because the law says that it should be separate accounts.

Further, he cited section 310 of the local government code which states that “local accountants and treasurers shall maintain separate books and depository accounts, respectively, for each fund in their custody or administration.”

He asked the City Council a week to extensively study the matter for the legal ramifications of the proposed ordinance.

For her part, City treasurer Diwa Cuevas said that the city government already has a trust fund for the donations from various sectors for the construction of the hospital.

City Councilor Margarita Osmeña said that Cuevas should sit down with the proponent of the proposed measure on her suggestions on how to make sure that the funds appropriated, donated, and contributed for the construction of the hospital will only be spent for the purpose and not for other obligations of the city.

Gabuya said he filed the proposed ordinance after the executive department utilized the P300 million to fund the distribution of financial assistance to the senior citizens on December 2014. The amount was appropriated by the City Council for the construction of CCMC.

Osmeña said that the purpose of the ordinance is to make sure that funds appropriated and donated for the CCMC construction will be used only for it. — (FREEMAN)