COA: Many irregularities on funds of Baguio gov’t

BAGUIO CITY – The Commission on Audit recently found many irregularities on finances of the Baguio City government and how these were reported to the country’s auditing government body.

A final and executory audit disallowances and audit charges amounting to P2,034,842.32 and P3,479,925.31, respectively, for a total of P5,514,767.63 remained unsettled by the city government according to COA.

The agency also observed that of 72 audit recommendations in previous years’ audit reports, 28 were fully implemented by the city government, 32 partially implemented and 12 not implemented in 2018.

Lawyer Eden Rafanan, regional director of COA urged the City Accounting Office and General Services Offices to reconcile their records to ensure correctness and reliability of the property, plant and equipment (PPE) account balance.

 Another COA observation was the city’s local road network inventory account in 2015 which was targeted to be 75 percent complete in 2018 that was not met because the local road inventory report and corresponding road map were not prepared.

 “We have recommended that the City general Services Officer and the City Engineer coordinate and facilitate immediate preparation of the City’s Local Road Inventory Report and the corresponding Road Map in accordance with the costing and timelines provided under COA Circular 2015-008 and to submit the same to the City Accountant for proper recording,” the COA-CAR stated.

Along with the road network component, COA recommended provision for a depreciation and impairment losses of the city’s assets for proper valuation and recording to avoid misstatement of pertinent expense and asset accounts.

COA-CAR also computed a total of P667.877 million appropriated in the Local Development Fund that was unutilized, “out of which 45.50% or P303,161,250 pertained to calendar years 2004 to 2017 for the implementation of 172 projects and 54.47% or P362,716,528 was appropriated in calendar year 2018 to fund 123 projects.”

There were also 27 activities included in the 2018 Local Disaster Risk Reduction and Management Fund Investment Plan with a total budgeted amount of P11.116 million but were not implemented due to delays in the bidding process and on the procurement activities.

The audit commission recommended the concerned office coordinate with bids and awards committee to address specific issues that caused delay in the bidding process for infrastructure projects as well indicate complete specifications in purchase requests to facilitate timely procurement of disaster response and rescue equipment.

Following this, the local finance committee and other department heads in the city government were directed to review the city’s financial statement ending December 31, 2018 after qualified observation on five transactions.

 Mayor Mauricio Domogan issued memorandum 156, series of 2019, after receiving the COA’s audit’s report on May 24 expressing its findings on “the fairness of presentation of the financial statements of the city due to uncertainty in the validity and accuracy of the balance of the PPE account amounting to P1,868,705,928.71 due to a net discrepancy of P152,277,389.29 between the accounting and property records.”

Domogan directed city officials to immediately review and conduct measures to rectify the audit observations as pointed by COA within 60 days upon receipt of his order. The audit commission was uncertain on the unaccounted balance of the PPE marked as “for reconciliation” amounting to P181.619 million in the financial statements of the city government. It was also observed that a property was recorded in the General Ledger but not in the Report of Count of Property, Plant and Equipment (RCPPE) amounting to P181.158 million. Likewise, COA noted an unrecorded property amounting to P170.744 million was included in the report on RCPPE physical count and that there was inconsistent acquisition cost of various property between the accounting ad property records amounting to P39.805 million.