WITH SO MUCH attention diverted to national officials such as legislators and their misuse of the pork barrel, little attention is focused on local government units, those little kingdoms governed by local executives who feel that they are under various stages of autonomy, both real and imagined.

However, journalists should also learn to investigate local government units, because LGUs handle significant amounts of money, says Director Carmelita Antasuda, officer-in-charge of the Local Government Sector of the Commission on Audit. Antasuda says many LGUs get away with corruption because newsmen do not know what to watch out for.

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Antasuda briefed 16 senior journalists and editors on how COA investigates local government units during the PCIJ’s seminar-workshop for Mindanao journalists entitled Governance by Numbers: Investigative Reporting and Numeracy.

For example, Antasuda said many LGUs are so notorious for bad record keeping and inventories that outgoing local officials end up carting away office furniture and appliances when they leave office. This, Antasuda says, is because many LGUs do not even bother with inventories and clearances. As a result, the incoming local officials have to practically rebuild their office from scratch.

Antasuda also gave reporters tips on how to spot red flags or what she called “potential indicators of deficiencies” in local government units.

She listed the red flags as follows:

  • If the LGU has no annual investment programs for the implementation of its projects
  • If there are lump sum appropriations in the local budget. “Kailangan detailed ang budgets,” Antasuda said.
  • If there are payments of transactions outside the “regular mode of disbursement.” For example, Antasuda said payments are almost always to be made through checks, except for payrolls and petty cash transactions. “Magtaka ka if the transaction of five million pesos is paid for in cash,” she said.
  • If there are handwritten invoice receipts

“The reports of the LGUS should be detailed,” Antasuda said. “If the reports are not detailed, then you should wonder.”

As well, Antasuda cautioned against the creation of intelligence funds by LGUs. Intelligence funds are lump sum funds that are often not liquidated by officials.

However, Antasuda pointed out that LGUs are not even supposed to have intelligence funds, because intel funds are only supposed to be used by military units. What LGUs are allowed to have are confidential funds. Even then, only LGUs with peace and order issues should have confidential funds.

Journalists and editors taking part in the seminar-workshop however raised concerns over whether COA auditors are really operating independently from the units or agencies that they are supposed to be monitoring.

One newsman pointed out that he had witnessed a local auditor coaching local officials on how to find loopholes in auditing rules.

Part of the problem, the newsman said, is the fact that many COA auditors do not even have their own offices, and are forced to rely on rooms or buildings provided them by the local government units that they are supposed to be guarding.

Antasuda acknowledged this problem, but added that the COA is presently trying to address this issue. Antasuda said that COA has started constructing its own buildings so that auditors are independent from the LGUs.

However, only eight provincial satellite offices have been constructed by the COA. There are eight provinces spread across the country.

 

1 Response to ‘Red Flags’ in auditing LGUs

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ANTONIO REYES MANGANTI

May 12th, 2014 at 9:07 pm

Good Evening,

Lahat po ng nasa talakayan nyo ay halos nagaganap sa aming Lalawigan (Ang Bulacan). Katulad na lamang po ng COA REPORT YEAR END December 31, 2012 sa Lalawigan ng Bulacan. Ang COA Report pong ito ay kakikitaan ng katakot-takot na IREGULARIDAD. Ganito po ang nakasaad:

1.) COLLECTION NOT RECORDED WITHIN PROPER PERIOD (60.5 MILLION PESOS) – Collection from various sources totalling P60,484,246.31 recieve during the months of January to February 2012 were treated as deposit in transit and recorded in the books in December 2011 contrary to paragraph 31 of the framework for the preparation and presentation of Financial Statements, resulting in the understatement of Cash and Goverment Equity at year end of CY 2012.

2.) UNLIQUIDATED CASH ADVANCE (200.25 MILLION PESOS) – Cash advances granted to 25 officers and employees amounting to P200,257,285.94 remain unliquidated as of December 31, 2012 Contrary to section 89 of Presidecial Decree No. 1445, COA Circular Nos. 97-002 and 2012-004 dated February 10, 1997 and November 28, 2012, respectively, resulting in the non-recording of expenses pertaining thereto.

3.) BUDGET OVERRUN FOR DONATION EXPENDITURES (P87.97 MILLION PESOS) – The lack of specific policies and guidelines on the grant of donations with an approved budget of P32 MILLION PESOS forCY 2012 resulting in uncontrolled spending causing expenditures on financial assistance to exceed the budget by P89.82 MILLION PESOS, thus affecting the implementation of other priority programs in the Province.
4.) MARAMI PA PO. PLEASE REFER TO COA WEBSITE.

THANK,

ANTONIO R. MANGANTI

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