THE Commission on Audit (COA) has affirmed the Notices of Disallowance issued in 2017 against the municipal government of Rizal, Kalinga, for releasing payments totaling P13.81 million for graveling and concreting of farm-to-market roads despite the lack of budget appropriations.
In its 19-page decision, the COA en banc sustained the stand of the COA-Cordillera Administrative Region (CAR) that the disbursement of the LGU fund was illegal because the municipal government was operating on a reenacted 2016 budget.
It swept aside the explanation of then-mayor Marcelo dela Cruz Jr. that the funds came from savings from prior years and unutilized balances from the municipality’s 2015 annual budget totaling P14.55 million.
Auditors disallowed the payments for the road projects on the grounds that the expenditures were not supported by an appropriations ordinance and there was no approved supplemental Annual Investment Plan upon which such projects were based.
They said the fund release was a violation of the Local Government Code, which prohibits the disbursement of balances from the budget of prior years unless there was an appropriation ordinance.
“The disbursements were not authorized by an appropriations ordinance at the time they were released, making them unlawful and therefore properly disallowed. Perforce, the disbursements were illegal, and their disallowance is proper,” the COA en banc declared.
While the municipal government submitted Sangguniang Bayan Ordinance No. 2017-11 to cure the legal defect, auditors noted that the required submission to the Sangguniang Panlalawigan transpired only on April 6, 2021, or almost four years late.
“Patent disregard for laws and administrative issuances/regulations amounts to gross negligence, which makes the erring public officials liable for the return of the amount disallowed by reason thereof-and this remains true even if the disallowed expenditures were not for a dishonest purpose,” the COA added.
However, since the completion of the road projects was not disputed, the Commission said the Rizal municipal officials are no longer required to refund the disallowed sum.
“There being no question as to the existence of the infrastructure projects, and there is no finding by the auditor and the RD of any deficiency or overpricing of the infrastructure projects, the amounts that had been paid to the contractors/suppliers may be considered as the reasonable value for the services they rendered,” the COA said.
