CEBU, Philippines — At least three barangays in Cebu City have been called by the council to explain findings by the Commission on Audit (COA) regarding budget deficits.
During the Cebu City Council’s regular session last Wednesday, the body reviewed COA reports for 32 barangays, where it was found out that three barangays have been required to submit an explanation due to budget deficits noted by state auditors.
These three barangays are Basak Pardo, Lahug, and Lorega San Miguel.
The council first asked the chairman of Barangay Basak Pardo to explain the deficit in 2020, amounting to P2,226,216.56.
The COA report on the Financial Statements (FS) indicated that Brgy. Basak Pardo has a total of P246,000.00 in unreleased or returned cash aid from the intended beneficiaries under the Social Amelioration Program during the COVID-19 pandemic.
State auditors noted that the funds have not been returned by the accountable officer to the barangay treasurer, resulting in a loss of resources for the barangay.
In addition, the report noted that cash advances totaling P716,583.45 for the same barangay remained unliquidated as of December 31, 2020, thus affecting the "timing of the expense recognition."
Lastly, COA reported that several disbursements from previous years remained unrecorded in the barangay's book of accounts, totaling P15,289,360.21 for the year ending 2020. This led to the overstatement of the Cash in Bank - Local Currency, Current Account.
One significant observation and recommendation by COA in their 2020 report was that the barangay may have resorted to splitting some of its 2020 contracts or purchases totaling P2,268,112.00 to take advantage of the Small Value - Negotiated Procurement (SVNP).
COA attributed this mainly to the improper preparation of the Annual Procurement Plan (APP), as required under Section 7 of RA No. 9184, resulting in reduced procurement competitiveness.
“We recommended that the Punong Barangay provide an explanation for the improper preparation of the APP for 2020, despite the clear mandate of RA No. 9184, and why it oftentimes resorted to Small Value - Negotiated Procurement by breaking the purchases into smaller quantities,” reads part of COA's recommendation.
The council further sought an explanation from the chairman of Brgy. Lahug regarding the deficits incurred in 2021, totaling P4,082,034.94, and the deficit in 2020, amounting to P8,957,406.46.
Under the Auditor’s report section on the FS, they noted that cash advances totaling P26,076,225.08 in 2020 and P26,084,319.36 in 2021 remained unliquidated as of December 31 of those years.
They also noted that several disbursements from previous years remained unrecorded in the barangay's books of accounts, totaling P32,876,821.04 for 2020 and 2021, resulting in the overstatement of the Cash in Bank - Local Currency, Current Account.
Further, the council also called the attention of Barangay Lorega San Miguel to explain the deficit noted in the barangay in 2022, amounting to P5,769,394.97. – Iris Hazel Mascardo/ATO
In their financial statements, auditors noted an understatement of the year-end balance of the Cash in Bank - Local Currency, Current Account by P43,058.23, due to unrecorded check disbursements, stale checks, and erroneous entries or over-recording.
They also reported that cash advances totaling P713,298.52 for the calendar year 2022 remained unliquidated, affecting the timing of expense recognition, while the year-end balance of the Other Supplies and Materials Inventory account, amounting to P285,983.75, remained dormant for more than ten years.
However, it was shown that the three barangays had submitted compliance reports attached to their corresponding COA reports, showing prudence in addressing the COA findings.