PROPER SPENDING | The Davao City government assures the Commission on Audit that it will align its 2023 and succeeding budgets to comply with government rules on allowable expenses. (Photo by BARRY OHAYLAN)
MANILA, Philippines- The local government of Davao City made “inappropriate” expenditures after it charged P6.45 million against its 20-percent development fund, which goes against rules for such funding, according to the Commission on Audit (COA).
Citing the COA’s audit compliance report on Davao City, specifically on the utilization of the 20-percent development fund for 2022, state auditors said the city government appropriated a total amount of P2.1 billion for the fund.
However, their observations cited expenditures “not allowed” to be charged under the P2.1-billion development fund, including catering services (P125,000), financial assistance for centenarians (P3.2 million), payment for prizes of Davao Sports Festival 2022 (P1.9 million), meal allowances (P802,964) and payment of badminton court rental (P56,700), among others.
Overall, the city government spent P6.45 million from the development fund, which state auditors noted was “not in accordance” with the guidelines under a joint memorandum circular of the departments of budget and management, finance, and interior and local government.
Under these guidelines, the development fund should only be spent on development projects and programs that are “essential to the promotion of the general welfare of the people.”
‘Misinterpretation’
Auditors said they inquired with Davao City’s budget office and the city accountant’s office, which both told the COA that the expenditures were “due to management’s (Davao City) misinterpretation” that the expenses were allowed.
“As a result, the purpose for which the fund has been established was defeated, and the optimal utilization of the fund was not achieved,” the COA said in its compliance report on Davao City.
It also pointed out that if the Davao City government had “properly identified” the projects and had it “carefully evaluated” the expenditure items, the expenses could have been avoided and could have been used for the city’s priority projects.
Other cities with appropriated development funds had been commended by the COA after showing how they properly utilized the allotted budget. Among these cities are Manila, Makati, Pasig, Taguig, Mandaluyong, Parañaque and Quezon in Metro Manila, and Cebu and Mandaue in Cebu province.
The Davao City government had earlier committed that it would use its development fund for social development projects like the construction of buildings and bridges, general public services, economic development program, and environmental development.
State auditors, in their recommendation, asked the city government of Davao to stop its practice of charging such non-related expenditures to the 20-percent development fund.
It also told the city government to require its budget office to review and evaluate the expenditure items under the development fund and to prevent any expenses of “disallowable items.”
City officials told the COA during their exit conference that the local government would align its 2023 and succeeding budgets to comply with existing rules and laws, particularly rules governing the development funds, an assurance that the auditors commended.
The report was sent to Davao City Mayor Sebastian Duterte, who started serving his three-year term on June 30, 2022. He succeeded his sister, now Vice President Sara Duterte, who served as mayor until the first half of 2022.