P26.5M spent without legal basis
COA MEMO TO LIM ADMINISTRATION
THE Dagupan City government spent P26.5 million for various development projects by in 2011, funded from the city’s Internal Revenue Allotment (IRA), without any legal basis, the Commission on Audit (COA) reported.
In an Audit Observation Memorandum (AOM) dated Feb. 10. 2012 addressed to Mayor Benjamin Lim and City Administrator Vladimir Mata, COA said the development projects were funded from the 20% development fund for 2011 but these were not approved by the Sangguniang Panlungsod (SP).
Thus, the COA said, the related incurrence of unauthorized expenses or contract entered into by the Management (city government) in the implementation of development projects “have no legal basis”.
The AOM was signed by Ofelia Celi, city auditor and audit team leader; and Pelilia Veloso supervising auditor.
COA noted that the SP did not authorize or approve the details and breakdown of expenditures of the 20% development fund as declared under Section VII, (b), of the Appropriation Ordinance No, 1963-2001 dated March 16, 2001.
The ordinance states, “The details and breakdown of expenditures of the 20% Development Fund is not authorized and shall be subject to further review and approval by the Sangguniang Panlungsod”.
With this, COA said it is apparent that all contracts or disbursements related to the development fund have no legal basis in view of the requirement that prior approval or authorization by the local sanggunian is necessary.
City Administrator Mata acknowledged Thursday noon that COA auditors were in his office to present the finding and were scheduled to have an exit conference with him in the afternoon.
Lim and Mata could not be reached for comment at presstime.
DEVELOPMENT FUND
In 2011, Dagupan had a total development fund of P79.4 million, representing the current share of P60.9 million and the P18.5million continuing fund for the previous year’s unimplemented projects.
In summary, the city incurred a total obligation of P42.6 million (P26.5 million for the current year and P16.05 of prior year’s fund), leaving a balance of P36.8 at the end of the year.
NO COMPLIANCE
Reacting to COA’s finding, Vice Mayor Belen Fernandez, SP presiding officer, said the determination by COA was lamentable but stressed that the city hall had it coming and the city council cannot be faulted for it.
Fernandez said both the city mayor and the city administrator were repeatedly reminded last year to submit the Comprehensive Development Plan and the Local Development Program to the SP for appropriate action and review but city hall never complied.
The vice mayor cited SP Resolution No. 6631-2011 authored by Councilor Jeslito Seen in their June 27, 2011 session requesting the Dagupan City Development Council, through Lim, to submit the Comprehensive Development Plan the Local Development Plan and the Local Development Investment Program to the SP for appropriate action and for review.
Then, records of the SP show that from June 27, 2011, the council repeatedly asked the executive department to submit these documents in compliance with Circular No. 1, Series of 2007 issued by the Department of the Interior and Local Government, the National Government, the National Economic and Development Authority and the Department of Finance.
The circular requires that the Annual Investment Plan be based on the Local Investment Development Investment Program and the City Development Plan. The executive department, she said, also did not comply to the request of the SP to authorize some department heads to come to the SP during their sessions to answer clarifications sought by the councilors.
Lim had issued a memorandum ordering all department heads not to appear before the SP without prior consent from his office.
REVIEW OF PROJECTS
COA also recommended that the city administration requests the SP to provide the mayor a copy of the results of the review of the proposed projects listed under the 20 percent development fund as stated in SP Ordinance No. 1963-2001.
Moreover, COA advised Lim to defer the implementation of the projects under the 20% development fund until after the receipt of the review made by the SP.
REVIEW
Reacting to the recommendation, Vice Mayor Fernandez opined that the council can no longer exercise its power of review over the projects in question since these had already been bid out to contractors, completed, and paid.
It would be highly anomalous, Fernandez said, if the SP would still review these projects after these had all been completed and paid for.
“If we review this, we would be answerable to our constituents and inviting a legal suit,” she said.
Fernandez warned that the council is already preparing to conclude the budget hearing for 2012 in two to three days, but the SP has not received the details of projects to be funded by 20 % development fund for 2012 and the Annual Investment Development Program from city hall.
“Without these details, the projects cannot be approved again,” she pointed out.
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