Account for P118M-cash advances, Cebu City Hall told

STATE auditors warned Cebu City Hall to liquidate P118 million worth of cash advances made since 2000 and to explain its allocation for personnel services (PS) which exceeded the 45 percent ceiling of its P4 billion annual budget.

The Commission on Audit (COA) said the city government exceeded its PS allocation by P62.4 million.

Part of the P118.3 million unliquidated cash advances included P6 million in intelligence funds for Mayor Michael Rama.

“There were no records on file or communication received from the Accountable Officer containing information on the Status of Fund utilization,” the 2011 audit report stated.

The commission said Cebu City Hall’s cash advances went up by P45.6 million in 2011 compared to a year ago.

It also noted the city’s “excessive purchase” of 6,000 fire extinguishers worth P10 million and the loss of 18 firearms issued to police and some officials.

Rama assured COA that the city’s PS allocation was still within the 45 percent ceiling authorized by the Local Government Code.

He also ordered the City Legal Office to send demand letters to those with unliquidated cash advances.

But Rama said he wanted to dissociate himself from advances released to accountable officers before his term started on July 1, 2010.

Of the cash advances, about P19.4 million was released in excess of P50,000 last year, which COA said would make the unidentified recipient liable under the Solana Covenant of the Civil Service Commission.

Some of the advances were also released to accountable officers who already died, retired from service and those who already left city hall.

Failure to liquidate cash advances is a violation of Presidential Decree No. 1445.

Auditors said failure to liquidate cash advances may be used as grounds to withhold the salary of accountable officers.

As a first class city, Cebu City Hall is authorized to appropriate 45 percent of its budget to personnel services.

Excess appropriation were found in Supplemental Budget (SB) 1 worth P19.115 million, SB2 at P3.066 million and SB 3 at P40.261 million. A computation of the Department of Budget and Management didn’t include retirement payments.

Rama told COA in his Jan. 20 letter that the DBM observations raised were made using unsigned Certified Statement of Receipts, “which did not reflect the correct data.”

The mayor added that waived items like leave credits, subsistence allowance, laundry allowance and hazard pay that were authorized in the Budget Operations Manual for local government units were not considered in the DBM-7 observation.

But COA in its audit report, supported the DBM observation.

COA said its own evaluation may place the city’s PS allocation at close to P70 million if it included the P6.8 million allocation for honoraria to barangay environmental officers.

Instead of placing the amount under the PS account, it was placed under the account for Maintenance and Other Operating Expenses.

Regional COA Director Sabiniano Cabatuan said they are giving the city government one month to address the audit observations and implement the corrective measures.

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