Quezon City passes COA development fund review; Davao City flagged

MANILA, Philippines —  The Quezon City government, under Mayor Joy Belmonte, has passed the Commission on Audit (COA)’s review of the utilization of its P1.588-billion development fund for last year, while the Davao City government has been flagged for inappropriately charging from its 2022 DF P6.454 million worth of expenses not related to development projects.

Based on the COA’s 2022 Compliance Audit Report (CAR) on QC’s utilization of its DF, the city government was able to comply with Section 287 of Republic Act 7160, also known as the Local Government Code of 1991, mandating local government units (LGUs) to appropriate in their respective annual budget at least 20 percent of their annual Internal Revenue Allotment (IRA) for implementation of development projects.

The audit body noted that of the QC government’s P7.938-billion total IRA for 2022, exactly 20 percent or P1.588 billion was appropriated for 72 development projects, programs and activities (PPAs).

The COA said this was on top of the QC government’s P1.781-billion continuing DF appropriation from the previous year for 21 PPAs; thus, the QC government had a total of P3.369-billion DF at its disposal for implementation of the total of 93 development PPAs.

The state auditor added that as of the end of last year, the QC government had been able to utilize P835.359 million of its DF appropriation, completing the implementation of 68 development PPAs, while 25 more PPAs are ongoing.

The COA also noted that the QC government was able to comply with the joint guidelines of the Department of Budget and Management (DBM), Department of Finance (DOF) and the Department of the Interior and Local Government (DILG), on the expenditures that shall not be charged against the DF.

“Based on the audit work performed, we found that the utilization of the 20-percent DF of the Quezon City government complies with the provisions of Item 3.2.5 of the DBM-DOF-DILG JMC (Joint Memorandum Circular) No. 1 dated Nov. 4, 2020,” the COA’s report stated.

Under the DBM-DOF-DILG JMC No. 1, personal services expenditures such as salaries, wages, overtime pay and other personnel benefits; administrative expenses such as supplies, meals, representation, communication, water and electricity, petroleum products and the like; traveling expenses, whether domestic or foreign, and registration fees and other expenses related to the conduct of and participation to trainings, seminars, conferences or conventions, shall not be charged against the DF.

Also not allowed to be charged against LGU’s DFs are expenses related to the purchase, maintenance or repair of administrative office’s furniture, fixtures, equipment or appliances, as well as purchase, maintenance or repair of motor vehicles used for administrative purposes.

The audit breakdown showed that the QC government allocated its P1.588-billion 2022 DF for land improvements, road networks, flood control system, sewer system, power supply system, building construction, hospital and health center facilities and other structures.

The QC government has earned the distinction as the richest LGU and richest city in the country with total assets of P443.406 billion in 2022, based on the Annual Financial Report on LGUs released by the COA last week.

The QC government has been holding such distinction since 2020.

Davao City called out

Meanwhile, in a separate compliance audit report, the COA has called out Davao City for inappropriately charging against its DF P6.454 million worth of expenses not related to development projects.

Based on the audit body’s record, the Davao City government had appropriated a total of P2.129 billion DF in 2022 for the implementation of 109 development PPAs.

The COA did not elaborate on the status of the implementation of the PPAs, but said that P6.454 million worth of expenses not related to development PPAs was “inappropriately charged against the 20-percent DF.”

“Expenditures totaling P6.454 million were inappropriately charged against the 20-percent development fund, not in accordance with the guidelines set forth under the DBM-DOF-DILG JMC No. 1, thereby defeating the purpose for which the fund has been established and the optimal utilization of the fund was not achieved,” the COA said.

The inappropriately charged expenses included payments for catering services, prizes for sports festivals, payments for services rendered during sports festivals, meals, representation and telephone allowances, rental of badminton court, financial assistance to the city’s first centenarian awardee and purchase of inventories, among others.

It added that during the exit conference, the city government assured COA that the DF allocation for 2023 and succeeding years would be “in compliance with existing laws, rules and regulations governing the utilization of the said fund.”