LGUs not required to adopt ATMs for payroll, says DILG

The Department of the Interior and Local Government (DILG) does not require local government units (LGUs) to adopt the automated teller machines (ATM) in disbursing salaries of their employees.

DILG Undersecretary Austere Panadero said Thursday that it is impossible for some municipalities to abandon the old payroll system of distributing cash stuffed in envelopes, pointing out that not all areas in the country have ATM facilities.

He said not all depository banks of LGUs, such as the Land Bank of the Philippines, the Development Bank of the Philippines and the Philippine Veterans’ Bank, offer ATM services, especially those in far-flung communities.

“These depository banks of LGUs only have ATMs in the cities,” Panadero told the Inquirer.

In the case of Makati City, the only LGU in Metro Manila that pays the services of its casual and regular employees in cash, Panadero said it could be that “most of the LGUs in Metro Manila happen to see the advantages of using the ATM system.”

Asked if adopting a digital system would help curb corruption, Panadero said: “If the so-called ATM process passed the COA (Commission on Audit) audit, then that would be a safeguard against corruption.”

“At the end of the day, if the payroll system that the LGU is using is consistent with the accounting and auditing rules of COA, then there’s no problem having that kind of system,” he said.

Asked if the DILG has any policy requiring LGUs to use the ATM system in releasing their employees’ salaries, he said: “There’s none. We cannot force LGUs to have that kind of system. It’s up to the LGUs and their depository banks.”

“Can you imagine an island municipality, say in the Visayas, being required to do that? It would be really difficult for them if the ATM service is not available in their area,” Panadero said.

He, however, said using the ATM system would mean less paperwork for the LGUs.