December 9, 2022

The City Treasurer’s Office and the City Accounting Office have been directed by the Commission on Audit to update their records of leaseholders in the public market and Burnham Park to ensure the proper computation of accounts due from these leaseholders.

The COA’s recommendation stemmed from its 2021 audit which showed that P41,750,989.45 rent income including penalties on the lease of stalls at the market and at Burnham Park, and lot rentals at Burnham Park from 2012 to 2021 were not accounted for in the books and reported in the year-end financial statements on the years that were earned, thereby understating the receivable income.

The COA also recommended for the CTO to follow the accrual basis of accounting, not the current practice where income from rental is recorded only when it was collected, instead of when it was earned.

The COA also suggested for the CTO to strengthen its collection system of rentals after records show that some lessors have unpaid rentals of between one month to 22 years.

It cited the Tax Ordinance, which states that in cases of delinquency, availing of civil remedies such as filing in court for collection should be pursued.

The CTO said it has experienced difficulty in collecting rent as the lessors were affected by the pandemic but it is not remiss in its obligation as they continue to issue notices of delinquency, demand letters, and notices of cancellation of lease.

For years, the CTO has been accepting promissory notes as a remedy in the settlement of delinquent accounts.

But the COA said this remedy is not provided for in the Tax Ordinance.

If the CTO continues to permit the use of promissory notes to settle delinquent payments, the COA recommended for the local government to set a standard or criteria as to who may avail and come up with uniform computations of penalties, surcharges, interests, and other delinquent charges.

As part of the reforms being done in the market, the city council recently passed an ordinance granting amnesty to sub-lessors at the city public market.

The amnesty, which is for three months, aims to end the illegal subleasing, sale, and mortgage of stalls. – Rimaliza A. Opiña

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