Cebu News

COA on PAGCOR money: City misused P2.57M funds

Jean Marvette A. Demecillo - The Freeman

CEBU, Philippines - The Commission on Audit (COA) has found that the Cebu City government misused its share of funds from the Philippine Amusement and Gaming Corporation (PAGCOR) amounting to P2.57 million.

COA found out that the money was used to purchase a vehicle and monoblock chairs, among others, expenditures that do not live up to the purpose of the PAGCOR funds: Projects that promote economic opportunities and help improve the situation of the less privileged.

The city government gets P4 million voluntary assistance from PAGCOR every month as share in casino revenues.

“The amount of P2,579,163.60 was suspended in audit because this was charged by the city against the Trust Fund-PAGCOR even if this was not covered under its proper handling and utilization,” reads the March 14 notice signed by Supervising Auditor Cymbeline Celia Chiong Uy.

COA Audit Team Leader Maria Daisy Bercede said the people responsible for the transaction include Mayor Tomas Osmeña, former mayor Michael Rama, City Accountant Arlene Rentuza, and all members of the City Council in the previous administration.

The notice was addressed to Osmeña and City Accountant Arlene Rentuza.

COA asked the city officials to settle the audit suspension within 90 days to prevent the disallowance of the transaction.

Some of the projects allowed to be charged against the PAGCOR funds include scholarships to include high-impact short courses as computer science, tailoring, among others; infrastructure projects that are essential to the community; projects that have to do with the improvement of peace and order in the locality; and projects involved in the extension of emergency assistance to victims of natural disasters, among others.


COA noted that the city used P1 million to buy a brand new Toyota Innova last September and P848,865 for the payment of supply and delivery of 63 pieces of monoblock chairs and other items.

The purchase was made during Osmeña’s new term as mayor shortly after he assumed office last July 2016.

During Rama’s term, COA noted that P161,441 was used for electrical upgrading at the Mabolo Elementary School; P472,857 was spent to pay for 1,246 monoblock chairs; and P96,000 to pay for four sets of collapsible tent.

COA said these transactions violated Section 4.3 of Presidential Decree 1445, which states that “trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received.”

COA said PAGCOR also has its own guidelines governing the proper handling and utilization of the funds it remits to the city government.


Osmeña said he has yet to receive a copy of the notice but will follow the COA order.

“If we have to, we will ask permission from PAGCOR. We don’t use this (fund) for travelling. We don’t use this for whatever. We’re subject to scrutiny. We have no problems with that,” he said, adding, he will explain the city’s spending to COA.

“We have P90 million in PAGCOR funds. That shows you that we’re not just spending it anywhere,” he added.

Rentuza, for her part, said the city’s Local Finance Committee has yet to meet to discuss the matter. (FREEMAN)


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