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P. 110-Casiguran Aurora09 Part2-Findings and Recommendations10-Casiguran Aurora09 Part2-Findings and RecommendationsRatings: (0)|Views: 494|Likes: 2Published by Kasiguruhan AuroraMore info:Published by: Kasiguruhan Aurora on Aug 17, 2011Copyright:Attribution Non-commercialAvailability:Read on Scribd mobile: iPhone, iPad and Android.download as DOC, PDF, TXT or read online from ScribdFlag for inappropriate content|Add to collectionSee moreSee lesshttps://www.scribd.com/doc/62472131/10-Casiguran-Aurora09-Part2-Findings-and-Recommendations04/07/2014pdftextoriginal A.FINANCIAL AND COMPLIANCE AUDITDisbursement vouchers which are subject to pre-audit were paid even withoutaudit action in violation of the pertinent provision of COA Circular No. 2009-002.
1.In view of the rising incidents of irregular, illegal, wasteful and anomalousdisbursements of huge amount of public funds and disposal of property in general,and in line with the policy of the state of ensuring efficiency, economy andeffectiveness in the operation of the government, COA Circular No. 12009-002 datedMay 18, 2009 was issued reinstituting selective pre-audit in government financialtransaction.2.Some of the basic and compelling provisions of the said circular were enumeratedin Section 6.0 thereof – Duties and Responsibilities of Agency Officials, such as:
Submit to the Auditor concerned all disbursement vouchers which aresubject to pre-audit;
Ensure that no transactions are paid out without evidence of the auditaction of the concerned Auditor;-Submit copies of contract, purchase/letter orders, loan agreement; and-Ensure that disbursement vouchers are duly supported with the requisitedocuments, among other.Further, the circular requires that – -All cash advances except for payroll, intelligence, and those granted for travel regardless of amount shall pass through pre-audit-The liquidation of cash advance shall first be audited and thecorresponding credit notice shall be issued before the same be taken up inthe book The grant of cash advance and their liquidation shall be govern by thefollowing guidelines set forth in COA Circular No. 97-002, to wit:a) No cash advance shall be given unless for a legally specific purpose. b) No cash advance shall be allowed to any official or employee unless the previous cash advance given to him is first liquidated and/or accountedfor.c) A cash advance shall be liquidated/reported on as soon as the purpose for which it was granted has been served.d) Except for cash for travel, no officer or employee shall be granted cashadvance unless he is properly bonded in accordance with law or regulation. The amount of cash advance which may be granted shall notexceed the maximum cash accountability covered by his bond, ande) No cash advance shall be granted for payment on account of infrastructure project or other undertaking on a project basis.16
3.In the post-audit of disbursement of the municipality, it was observed that cashadvances were utilized for the purchase of spare parts, communication equipment,supplies, other incidental expenses, salaries and travelling expenses and had beeneffected and paid even without passing thru the required pre-audit. Cash advance werealso allowed even when the accountable officers had still unliquidated balance which isinconsistent with the above mentioned regulation.4.Moreover, disbursement voucher submitted for pre-audit which was returned for noted deficiencies were not re-submitted but had already been paid5.The regulation regarding the implementation of selective pre-audit was not properly enforced by the agency despite earlier briefing and/or orientation of the officialconcerned. Consequently, timely review of the transaction could not be readilyundertaken, thus deficiency if any, was similarly, cannot be communicated to the agencyfor immediate adjustment/correction of the official concerned. Efficiency andeffectiveness in the implementation of the program, project and activities of the agencytherefore, were likewise not ascertained at once.6.This was discussed in the Audit Observation Memorandum No. AOM 2009-001dated November 10, 2009, sent to and was duly received by the management. It wasexplained that compliance with COA Circular No. 2009-02 was not fully observed, because they are not yet prepared for its implementation. They assured us however, thatcompliance with the regulations shall be observed in the succeeding transactions.7.We advise the Municipal Mayor to require the accountable officer concern, particularly the head of the internal audit unit to submit for audit action all disbursementvouchers including their supporting documents subject to pre-audit.8.Henceforth, to avoid the sanction provided for in Section 11.2 of the sameCircular, which state that and we quote:9.Section 11.2 – Transactions or claim covered by this circular but not submitted for pre-audit shall be a ground for initiating administrative disciplinary action in accordancewith Section 127 of PD 1445 and Section 55, Title I-B Book V of the RevisedAdministrative Code of 1987, without prejudice to the disallowance of the transaction in post-audit, if warranted, compliance with the above cited regulation shall be strictlyobserved and adhered to.
The municipality allowed the claim for payment/reimbursement of the amount paidto a private law practitioner in violation to Section 2.2 Article IX-D of the 1987Philippine Constitution.
10.COA Circular 98-002 states that “Accordingly and pursuant to the power vested by the constitution, the Commission has the exclusive authority to promulgate accountingand auditing rules and regulations including for the prevention and disallowance of irregular, unnecessary, excessive extravagant and/or unconscionable expenditure or usesof public fund or property”.17
11.Meanwhile, Section 2.2 Article IX-D of the 1987 Constitution provides that public fund shall not be utilized for payment of the services of a private legal counsel or law firm to represent government agencies or instrumentalities including GOCCs andlocal government unit in court or to render legal services for them. With respect to localgovernment unit, Section 481 of RA 7160 provides that it should be the legal officer of the municipality who should handle its legal affair including representation in court.12.In the absence of the Municipal Legal Officer, the Provincial Prosecutor/Fiscalshall serve as legal officer and can represent a municipality in law suit as provided under Section 1683 of the Revised Administrative Code and complemented by Section 3, RA2264 or the Local Autonomy Law.13.In the post-audit of disbursement of the municipality, particularly liquidationvoucher of Mr. Menandro M. Alvarez, Private Secretary for his cash advance of P65,000.00, P11,951.00 of which was allowed under Credit Notice No. 2009-001,whereas P53,049.00 was disallowed.14.While we agree that Mr. Alvarez is an employee of the municipality, henonetheless failed to show he represented the municipality in hiring a private legalcounsel. The fact is, and record would show that he is a respondent in a complaint filed by former SB members against a particular project implemented by the municipalitywherein the Municipal Mayor was found innocent/acquitted of the charges. Not only ishiring of private legal counsel prohibited but much less, Mr. Alvarez has acted on his personal behalf so that using public fund was devoid of legal basis, hence thedisallowance.15.The Municipal Mayor is advised not to allow reimbursement or payment of legalfees for services rendered by a private counsel as it is against the established law and jurisprudence. In the event that availing legal service cannot be avoided or in case of exceptional circumstances, the written conformity and acquiescence of the Solicitor General and the Commission on Audit shall first be secured before hiring or employing a private lawyer or law firm as provided under COA Circular No. 98-002.
Construction in Progress account of P12,531,647.00 remained open in the books of accounts despite the infrastructure projects they referred to were already completedcontrary to Section 50 of the NGAS Manual for local government unit, thusartificially bloated the assets and government equity account.Public Infrastructure account of P7,034,239.21 not yet categorized as to theirspecific asset account and likewise, not transferred yet to registry of publicinfrastructure
16Construction in Progress account refers to accumulated value of infrastructure projects or agency assets while still under construction or process. This may be classifiedeither as agency assets or public infrastructures.18
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