BAGUIO City, the country’s summer capital, is feeling the heat from government auditors who have raised questions on the disbursement of the city’s P61 million COVID-19 funds in 2020 through several cash advances.
The sum, which came from the Bayanihan Grant to Cities and Municipalities (BGCM), the city government’s Quick Response Fund (QRF), and its supplemental budget, was released to two “disbursing officers,” both of whom came from the City Treasurer’s Office.
A breakdown of the 11 cash advances released showed one disbursing officer received P24 million while the other held P37 million.
Release of cash advances is allowed for government transactions, but auditors noted that in the case of Baguio City, the guidelines were not followed. There was no submission of the specific purpose why the cash advances were drawn; no supporting documents to show cost estimates, description of items to be purchased and no technical specifications or quantity of items to be acquired.
The audit team, in its report released April 21, pointed out that under Government Procurement Policy Board (GPPB) Circular No. 01-2020, procuring entities like local government units (LGUs) are required to prepare documents to show the project name, approved budget for the contract, technical specifications or scope of work, delivery date, required quantity, and other relevant information
“The absence of supporting documents, or even estimates of quantities and description of items to be procured out of cash advances indicated that the City government granted cash advances without considering details of project requirements,” the Commission on Audit said.
The problem does not end there, however, as auditors found that the disbursing officers broke down the cash entrusted to them into smaller amounts ranging from P1 million to P10 million, which were handed down to “accountable officers” of the General Services Office (GSO).
This is a more serious breach of the rules since none of the GSO personnel who received the money are bonded and are not allowed to “handle cash advances of such nature and magnitude.”
To show proof of cash changing hands, the disbursing officers merely submitted “acknowledgment receipts.”
The COA noted that even the two disbursing officers were only bonded to handle the maximum of P1 million at any given time.
In its reaction to the audit observation, the city government invoked “extraordinary circumstances” during the pandemic, admitting that “certain accounting and auditing rules and regulations were not strictly implemented.”
It said the decision was motivated by the desire to speed up transactions because “time was extremely of the essence” and that it was not resorted to “perpetuate fraud.”
The audit team also questioned the use of cash to pay for goods and medical supplies worth P51.162 million, contrary to COA Circular No. 97-002 as well as RAA 11469 or the Bayanihan to Heal as One Act.
Among the purchases made in cash were assorted canned goods from TSH Corp. for P4.576 million and a second transaction worth P3.878 million; commercial rice from Charlife Palay Buying Station for P3.264 million, and commercial rice from Double J Grains Trading for P3.7 million.
Considering the amounts involved and the nature of the transactions, the auditors pointed out that payment by checks would have been more practical, saying the use of cash was “more difficult, impractical or impossible.”
The city government insisted that had it followed the rules for cashless transactions, it would not have been able to purchase the supplies in a timely manner.
