CEBU, Philippines — The Cebu provincial government has yet to settle more than P126 million worth of transactions disallowed by the Commission on Audit.
In its audit report for calendar year 2020, COA stated that disallowances of P126,225,993.07 and suspensions of P166,100 remain unsettled as the Capitol only made total settlements of P440,574 and P205,880 on its disallowances and suspensions, respectively, for the year.
COA rules define disallowance as the disapproval in audit of a transaction, either in whole or in part. The term applies to the audit of disbursements as distinguished from “charge” which applies to the audit of revenues/receipts.
As for the financial and compliance audit of COVID-19 funds, COA said that the sales proceeds amounting to P6,801,777.90 deposited to the Land Bank Calamity Fund account of the province by the participating municipalities from the operations of Tindahan Sa Kapitolyo were not recorded in the books of accounts and were presented as reconciling items in the Bank Reconciliation Statement as of December 31, 2020.
This resulted in the understatement of the Cash in Bank-Local Currency, Current Account and the overstatement of the Due from LGUs account by the same amount, inconsistent with the provisions the International Public Sector Accounting Standards (IPSAS) 1.
The Provincial Accounting Office informed that it cannot prepare the accounting journal entry to take up the direct deposits made by the various municipalities for the sales from Tindahan sa Kapitolyo due to non-submission of the copies of deposit slips by the concerned LGUs.
COA also said that the Provincial Bids and Awards Committee on Goods accommodated the amendment to order, without governor’s approval, the supply of 6,500 boxes of Quickchow noodles totaling P2,857,680 to Lucky Me noodles with a total cost of P3,447,360 which was P589,680 or 20.6% above the original contract price.
In reply, the province explained that the cancellation of the Quickchow noodles was due to the unavailability of stocks and that although the price of Lucky Me noodles was higher, it was still “within the suggested price ceiling” of the Department of Trade and Industry.
COA added that contracts totaling P138,297,365.51 for the procurement of goods and services through Emergency Procurement under the Bayanihan Act did not contain the required warranty clause.
The warranty clause is where the supplier/contractor warrants that, the goods or projects to be delivered or implemented shall be free from defects and conform to quality standards and technical specifications of the said contract.
In turn, the provincial government explained that although the contracts or purchase orders on various emergency procurements were issued without the warranty clause, they had withheld one percent retention from the payment as warranty security and the Provincial Accounting Office issued the Certificate of Guaranty Deposit.
No material misstatement
COA also rendered an “unmodified opinion” on the Cebu provincial government’s presentation of its financial statements, which means that government auditors concluded that the financial statements were prepared, in all material respects, in accordance with the applicable financial reporting framework and free from material misstatement.
Four Capitol programs were also “determined to be a catalyst for change, despite the COVID-19 pandemic.” They are:
The Tindahan sa Kapitolyo (TSK), an initiative to help the poor and marginalized constituents in the countryside by providing them access to basic commodities and allowing them to purchase based on the DTI-mandated price ceilings on a rationed basis;
The SUGBUSOG (Sugbuanong Busog, Luwas, ug Himsog), a program which aims to provide every family the opportunity to venture into a more productive undertaking while at home by producing food through agriculture;
Cash Assistance to Locally Stranded Individuals wherein the provincial government extended cash assistance totaling P3,219,925.00 to 1,010 constituents of the province across the country, referred to as Locally Stranded Individuals (LSIs). The program was launched to extend help to those who do not have enough means to sustain themselves during the Enhanced Community Quarantine; and
Sugbo-Negosyo (Panginabuhing Sugbuanon, Hayag nga Kaugmaon) which is a microenterprise assistance program to promote sustainable, upliftment and growth through business opportunities.
In 2020, the provincial government also complied with the full disclosure policy required by the Department of Interior and Local Government, COA said.
The audit also found that Cebu Province has a total of 857.178 kilometers of roads with a total cost of P2,362,933,638.34.
COA added that for 2020, Capitol spent a total of P161,244,584.38 for local road additions and major repairs, reductions for derecognition and impairment was recorded in the books.
Cebu was also recognized for its collection efficiency, having been ranked in the top 5 among all provinces in the Philippines. — JMD (FREEMAN)