Cebu City’s appeal on P84 million disallowance junked

MANILA, Philippines — The Commission on Audit (COA) has upheld the notices of disallowance (NDs) it issued against Cebu City Mayor Michael Rama and other city officials, which required them to return the P84.48 million in financial calamity assistance they granted to themselves as well as to employees in December 2013.

In a decision dated Jan. 24, 2022, but uploaded on the COA website only yesterday, the COA denied for lack of merit Rama’s petition for review, which assailed the validity of the 30 NDs issued against him and  the other respondents.

The notices, dated June 23, 2014, stemmed from the city government’s disbursement of a total of P84.48 million on Dec. 23, 2013 as financial calamity assistance to officials and employees.

The assistance was supposedly intended to hasten their recovery from the magnitude-7.2 earthquake and Super Typhoon Yolanda in October and November of the same year, respectively.

State auditors said that while the intention of the financial assistance was good, the disbursement of the funds was not compliant with the law, particularly with Republic Act (RA) 7160 or the Local Government Code as well as with COA Circular 97-002.

The audit team leader and the COA-local government sector supervising auditor discovered that the budget for the assistance was not sourced from the city’s calamity fund.

The amount was instead charged against the city’s annual appropriation through the passage of a supplemental budget by the city council.

The audit team said the financial calamity assistance was not among the allowable expenses provided under RA 7160, which warrants the enactment of a supplemental budget.

State auditors said that under COA Circular 97-002, cash grants may be allowed only under valid circumstances, but the amount must not exceed P15,000 for each transaction.

The audit team said each city official and employee received P20,000 in calamity assistance.

In affirming the validity of the NDs, the COA’s Commission Proper said that while the passage of the supplemental budget for the grant of the assistance was supported by two city ordinances, the fund disbursement still violated the law.

The COA cited Section 321 of RA 7160, which states that a supplemental budget may be enacted in times of calamity, but only for the purchase of supplies and materials or payment of urgent services involving prevention of imminent danger and loss of life or property.

”It is also worth emphasizing that a considerable period of time has lapsed after the calamities occurred when the financial asistance was distribued on Dec. 23, 2013,” the COA said.

The decision was signed by former COA chair Michael Aguinaldo and COA Commissioner Roland Pondoc.