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Cebu News

COA commends Capitol’s proper use of development fund

Gregg M. Rubio - The Freeman

CEBU, Philippines —  The Commission on Audit (COA) lauded the Province of Cebu for utilizing the P13.7 billion Development Fund for 2022 solely for development projects.

In a letter dated April 28, 2023, Supervising Auditor Jenny Dayola told Governor Gwendolyn Garcia that the utilization of the 20 percent development fund by the provincial government is in compliance, in all material respects, with the Department of Budget and Management (DBM), Department of Finance (DOF), and Department of Interior and Local Government (DILG) Joint Memorandum Circular (JMC) No. 1 dated November 4, 2020.

The said JMC provides the general guidelines on the appropriation and utilization of 20 percent of the annual Internal Revenue Allotment now called national tax allocation for development projects.

The Province of Cebu had appropriated the amount of P8.5 billion for priority development projects in 2022, which, according to COA, is even above the 20 percent minimum requirement of P1.16 billion based on the province’s national tax allocation of P5.8 billion.

Continuing appropriations of the 20 percent development fund from 2019 to 2021 amounted to P5.2 billion. The state audit agency said out of the total current appropriation, P2.9 billion was expended or utilized. Likewise, it said, that various resolutions and ordinances were issued authorizing the reprogramming and realignment of funds.

Analysis also showed that the appropriated programs, projects, and activities are proper to be charged under the 20 percent development fund.

“The Development Fund did not include any expenditure items that are not allowed to be charged against the Fund such as personal services, administrative expenses, traveling expenses, training expenses, purchase, maintenance or repair or administrative office’s equipment and motor vehicles for administrative purposes,” read COA’s observation.

Meanwhile, vouching of disbursement revealed that sampled transactions charged against 20 percent DF did not fall under items not allowed under the JMC; hence, considered eligible PPAs under 20 percent DF.

Thus, COA said that more economic, social and environmental development projects beneficial to its constituents can be implemented by the Province through optimization of the fund utilization, which may ultimately contribute to the attainment of desirable socio-economic targets and outcomes of the LGU.

“We commend Management for ensuring that only allowable expenditure items were charged against the 20 percent Development Fund pursuant to Section 3.2.5 of the DBM-DOF-DILG JMC No. 1 dated November 4, 2020,” COA said.

The audited utilization of the 20 percent DF of the Province of Cebu covers the period January 1 to December 31, 2022.

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