COA uncovers irregularities In San Miguel

THE Commission on Audit (COA) uncovered irregularities in its Annual Audit on the Municipality of San Miguel and left the heavy burden of rectifying the same to Mayor Silvino Evangelista and the local Sangguniang Bayan. The audit, part of the routine government audit team's functions was conducted to ascertain the propriety of financial transactions and compliance of the agency with prescribed rules and regulations. It was also made to ascertain the accuracy of financial records and reports as well as the fairness of the presentation of the financial statements,” writes regional cluster director Charlita Leopoldo to Mayor Evangelista. In its post audit report, COA stumbled upon the town's illegal disbursements, unremitted collections, uncollected dues, un-reconciled bank statements and illegal heavy-equipment rental rates. These put the town in loose financial footing.

The COA annual audit report noted mismatched bank statements in the municipal ledgers so it recommended religious recording of deposits. Over late remittances of collections, the team reminded the mayor that the municipal treasurer must impose daily remittances as provided by law. The audit team headed by state auditor Jeremia Lagunda also bared P733,148 dues as cash shortage of Municipal treasurer Trinidad Millare. The amount could have been used for the town's benefit, COA surmised. COA then told local officials that if Millare could not settle the accountability, retention of money to satisfy indebtedness be implemented against her as per legal procedures. Furthermore, the COA uncovered disbursements amounting to P1,586,901.65 needing proper supporting documents, in possible violation to the Government Accounting and Auditing Manual (GAAM).

Records show that a post audit in October of 2005 revealed that payments were made despite the absence of necessary supporting documents to validate the claims, violating section 168 of the GAAM On this, COA noted unspecified cash advances, non-issuance of memorandum receipts, not properly filled trip tickets and gas slips, not submission of official receipts upon liquidation and vouchers without the signature of the Municipal Accountant. Moreover, the town granted a special rate to Hanjin in heavy equipment rental. This, COA said is in violation of Municipal ordinance and in return understated the income of P132,465.70. Despite a resolution by the SB specifically authorizing the mayor to sign the deal using a special rate, COA said it was still illegal and said review of the lease agreement should have been done before sealing the deal. Even more bleak is the town's granting of an extra cash gift of P1,595,000 to which the government audit team recommended a refund.

The refund, state auditors noted, comes because the cash windfall contained deficiencies. First, COA found out that the cash gift was over the 55% personnel services cap in violation of local budget circulars for 4th-5th class towns. Second, the state auditors saw that the payments were from un-appropriated surplus balances and underestimated Internal Revenue Allotment, making it illegal. Then COA saw that the town illegally granted P82,500 honorarium to the chairman and members of the Bids and Awards Committee from the annual appropriations, instead of the legal sources as stipulated in a Department of Budget Circular no 2004-5A of October 7, 2005 . Because of the legal impediment, the amount should be refunded, COA said. Other than that, COA said the town also should institute measures in its system of entering its ledgers to reclassify assets.

According to sources, San Miguel implemented in different modes the seven COA recommendations. Since the audit, San Miguel officials have required the Municipal Accountant to book-up unrecorded check disbursements and set up accounts due from town officers and employees. The town leaders have also asked COA to write off determined collectible and doubtful accounts pursuant to existing laws. Furthermore, on unremitted collections, the San Miguel dads directed the Municipal Treasurer to require intact daily remittances to safeguard government funds from loss or misapplication and to deposit such daily.

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