BY GEROME DALIPE IV
ILOILO City — The Commission on Audit (COA) has raised concerns about p12.627 million in unliquidated fund transfers by the city government to 66 barangays, according to its latest annual audit report.
COA auditors revealed that these barangays failed to submit the required Fund Utilization Reports to the City Accountant’s Office, in violation of COA Circular Nos. 94-013 and 2012-001.
The report also noted that the unliquidated funds resulted in an overstatement of receivables in the city’s financial statements.
This contravenes the fair presentation principles outlined under Paragraph 27 of the International Public Sector Accounting Standard (IPSAS 1).
Sec. 4. 6 of COA Circular No. 94-013 requires the implementing agencies (barangays in this case) to submit the Report of Checks Issued (RCI) and Report of Disbursement (RD) within 10 days after the project ends or at the end of each month.
The same rule also mandates that liquidation be done in a timely manner to ensure proper accounting of funds.
Under paragraph 27 of IPSAS 1, financial statements must faithfully represent the financial position of the government, which includes proper reporting and recognition of assets, liabilities, revenues, and expenses.
The audit findings showed that about 66 implementing barangays failed to submit the required Fund Utilization Reports (FURs) and supporting documents for 137 fund transfers from 2012 to 2021.
This constitutes non-compliance with COA Circulars Nos. 94-013 and 2012-001, which mandate timely reporting and documentation for fund utilization, the auditors said.
Some P11.817 million, or 93.60 percent of the total unliquidated balance, was allocated for pandemic-related aid in 2020 but remains unliquidated.
In addition, newly elected barangay officials report that supporting documents were misplaced or not turned over by previous treasurers.
The auditors said the absence of proper turnover procedures exacerbates the difficulty of verifying fund utilization.
Without proper liquidation, COA warned the risk of these funds being deemed uncollectible increases.
The disclosure from the City Accountant’s Office revealed persistent non-compliance by implementing barangays (IBs) despite capacity-building efforts.
Only eight out of 74 IBs submitted Fund Utilization Reports (FURs) with complete supporting documents, covering 18 out of 155 fund transfers for CY 2023.
This represents a compliance rate of just 10.8% in terms of IBs and 11.6% in terms of fund transfers.
Despite conducting training and workshops focused on fund grant, utilization, and liquidation, the majority of IBs failed to meet reporting requirements.
The auditors said the implementing barangays have shown a pattern of non-compliance over the years, even when provided guidance and resources.
Replying to the auditor’s report, the city officials noted that final demand letters were sent to the barangays requiring them to submit Fund Utilization Reports (FURs) by August 15, 2023.
Barangays failing to comply were informed they would be required to fully refund the unliquidated amounts.
Mayor Jerry Treñas told auditors the outstanding balance was reduced by P1.119 million.
The mayor said the workshops conducted by the Department of the Interior and Local Government (DILG) and city officials aim to strengthen barangay officials’ knowledge and capacity to manage and liquidate funds.
The involvement of key city offices such as the City Accountant, City Budget Officer, ensures a comprehensive approach to addressing the compliance gaps, he added.
State auditors asked Treñas to direct village officials to conduct capacity-building training/workshops to equip newly elected Punong Barangays and their Barangay Treasurers with the knowledge and skills to properly handle, utilize, and liquidate fund transfers.
COA also urged the city officials to seek the involvement of the President of the Liga ng mga Barangay to ensure widespread participation and compliance.
The auditors added the village officials should instead focus on topics such as financial accountability, documentation, reporting requirements, and proper turnover of records during leadership changes./PN
