OF the country’s 10 wealthiest cities, nine received commendations from the Commission on Audit for being fully compliant on the proper utilization of their respective 20 percent Development Fund.
Only Davao City failed to get a clean bill after auditors found P6.454 million in expenditures that were tagged as “inappropriately charged” and therefore contrary to the guidelines set under the Joint Memorandum Circular No. 1 issued by the Department of Budget and Management (DBM), Department of Finance (DOF), and the Department of the Interior and Local Government (DILG).
The Compliance Audits covered transactions of local government units from January 1 to December 31, 2022 and were intended “to increase the responsiveness of the guidelines and promote greater autonomy, transparency, and accountability in the local government units’ appropriation and utilization of their respective 20 percent Development Fund.”
Section 287 of RA No 7160 or the Local Government Code requires all LGUs to set aside at least 20 percent of their Internal Revenue Allotment (IRA) shares for development programs, projects, and activities that promote effective governance and the general welfare of the people.
Quezon City, the wealthiest city in the country, received a P7.938 billion IRA in 2022 from which it allocated P1.588 billion for its 20 percent Development Fund.
The compliance audit showed the bulk of the funds went to the construction of public buildings and roads (P1.023 billion) and flood control and sewer systems (P363 million).
Makati City set aside P393.33 million from its IRA of P1.96 billion, which was used for medical supply procurement (P278.71 million) and payment for interest on loans previously drawn for developmental projects (P103.77 million).
Manila’s IRA amounted to P4.603 billion last year from which it drew P995.7 million or 21.6 percent for Development Fund, for acquisition of medical equipment (P366 million), hospital supplies (P176 million), drugs and medicines (P127 million), and assistance to hospitals and health centers (P115 million).
Pasig City received IRA totaling P2.432 billion in 2022 from which it reserved a full 37 percent for Development Fund that went to social development projects (P238 million), economic development (P86 million) and environmental programs (P162 million).
Taguig City allotted 34.2 percent or P901.16 million from its P2.634 billion IRA to fund pandemic response, infra projects, street lighting, and purchase of heavy equipment.
Mandaue City spent P262.69 million on the acquisition of lots as relocation sites for calamity victims and informal settler families, the rehabilitation of the Butuan River, the development of parks and open spaces, flood control, and road maintenance out of its IRA amounting to P1.313 billion.
Mandaluyong City set aside P288.7 million from its P1.443 billion IRA which funded drainage, street, and sidewalk improvement (P163.73 million), Garden of Life Cemetery (P88.68 million), street lighting (P21.82 million), and construction of Hagdan Bato barangay hall (P14.47 million).
Out of Cebu City’s P3.205 billion IRA, P641.35 million went to social development programs (P207 million), environment activities (P197 million), and economic development (P226 million).
Davao City received the biggest IRA in 2022 totaling P8.207 billion, up P2.265 billion from its P5.942 billion share in 2021.
Out of that amount, the city set aside P2.129 billion for the Development Fund. Among the big items funded were road development (P578.15 million), buildings (P424.514 million), non-infrastructure social development projects (P305.4 million), and “other infrastructure” (P255 million).
However, auditors found expenditures that are not allowed to be charged under the 20 percent Development Fund.
Among the expenses flagged in the audit were P2.9 million spent on cash prizes, officiating fees, phone expenses, vehicle rental, and representation expenses; and P3.4 million for catering services and financial assistance to the city’s centenarians.
“Inquiry with the City Budget Office and the City Accountant Office revealed that the reasons for the inappropriate charging of the above-mentioned expenditures were due to management’s misinterpretation of the provision, believing that said expenditures were allowed,” the audit team said.
During an exit conference, the city management assured auditors that succeeding budgets on Development Fund will comply with rules and regulations on utilization.
