CTO defends P600M flagged by COA

CEBU, Philippines — Advance payments that have not been reflected in the system are the reason behind the 788 percent increase in unrecorded deposits and disbursements of the Cebu City government, which was called out by the Commission on Audit (COA) in its recent report.

According to the Cebu City Treasurer's Office (CTO), the advance payments were not reflected since it’s a new system implemented in 2019.

But Cebu City Treasurer Mare Var Reyes expressed optimism that the city can curb the increase by this year's audit.

In its 2023 annual audit report, the COA flagged down more than P609 million unrecorded deposits and disbursements of Cebu City. COA added that despite having the same observation during the previous audit report, the unrecorded deposits even rose to 788 percent.

The report said that credits or deposits in the city’s current bank accounts amounting to P609,519,462.64 and disbursements totaling P27,795,565.32 from fiscal years 2014 to 2023 were not taken up in the books of accounts.

But Reyes clarified that what was flagged down were amounts that were deposited but were not recorded in the city's books of accounts.

According to Reyes, these amounts have accumulated since implementing the new system in 2019, especially on Real Property Taxes. She clarified that this new system was done in coordination with COA itself, as well as the city's Management Information and Computer Services (MICS), and the city's accounting office.

She explained that when they deposited 2019 collections, they also included the advance payments for the years 2021, and 2022.

However, in the same year, 2019, these payments were not realized as "income" of the city hence left unrecorded in the new system.

"Ang atoang bag-ong system man gud is murag wala kayo ga realize ana niya ug advance payment so dapat pag 2020 gihimoan siyag separate nga report nga kani nga mga amount, income ni sya for this year kay pag 2019 although deposited sya sa bangko, wa sya ma record as income sa 2019 kay deferred payments man sya," said Reyes.

Reyes on the other hand, admitted that they have "lapses" in handling these deposits, however added that it shouldn't only be the CTO that should take the responsibility as it is a joint effort with other departments who should be devoted to implementing the new system. She stressed that the new system even has the green light from COA.

Reyes said several meetings have already been done to reconcile these records.

"Kay daghan kaayo siya nga nga real property units nga kinahanglan i-reconcile every year," said Reyes.

Among the measures being done, said Reyes, is to temporarily halt the acceptance of advance payments from the taxpayers until such time that the records are cured.

"Mas kuyaw siguro kung naay bayad nga wala ma resibohan, at least kani siya, nasud jud siya ang pag record ra gyud," said Reyes.

In her capacity as city treasurer, Reyes admitted she agreed to the said proposed 2023 budget in hopes that more income-generating ordinances, such as the revised Real Property Tax Code, will be implemented, but to no avail.

During their exit conference with COA, she said that she had already given word to finish the reconciliation of these records, but has yet to be completed since there's a long process in tracing back the payments.

Despite this, Reyes expressed that she still believes that Cebu City has the best payment system among other local government units (LGUs) as they opted not to outsource through a third party.

"Kita we have our own developers...silay nag develop (sa system), ang MICS, so anytime na mutawag mi nila ma focus gyud nila kay naa raman sila dinhi," she said.

Reyes also emphasized that it would be a "disadvantage" for the city should they halt the acceptance of advance payments permanently.

According to her, even though the advance payments will not be realized as income in the same year, its interests becomes income-generating.

Although she admitted that the 788 percent increase in the unrecorded amounts is "alarming", Reyes said that among the biggest factors that also contributed to this rise is the transfer of the Special Education Fund that did not make it to the cut-off date, hence was also not recognized before the COA audit wrapped up.

As for the questioned "unrealistic" income projection also flagged down by COA, Reyes said they did not want to be the reason why the priority projects of the administration would not be realized due to the city’s limited collection.

She added that attached to the income projection were collection remedies that hopefully would be implemented through a city ordinance, but to no avail when it remained pending in the legislative table. —/ATO (FREEMAN)