January 30, 2023

OF LAPSES & DISALLOWANCES IN DISBURSING CITY FUNDS

The red flags recently raised by concerned agencies in the audit and review of the budget allocations and expenditures of the city government of Baguio have brought up the need for City Hall to assess the budget management method it employed the past year so that it would remain compliant to procedures even under pressure during difficult times and emergencies.
The lapses, which the Commission on Audit has pointed out in the city’s spending P61 million of its P158M Covid-19 response fund; and the long list of disallowances by the Department of Budget and Management of millions worth of budget for various purposes create a crack on the local administration’s claim for transparency.
It is unfortunate because these funds, we trust, truly went to its intended uses: to respond to the emergencies presented by the Covid-19 pandemic, and for the approved projects and activities intended to improve public service, respectively.
The lapses that were ruled as circumventions of COA rules ranged from cash advances without detailing the purpose, without proper documentation, without ensuring that previous cash advances were settled, to transferring the cash advances from one accountable officer to another.
Due to a “clerical mistake,” the city council last week had to pass an appropriation ordinance to cover a portion of the city’s annual budget which the DBM disallowed after finding out some appropriated amounts in the approved annual budget intended for nine projects are higher than the amounts indicated in the annual investment plan for the same purpose. Under the law, the DBM said any amount provided in the approved budget that is higher than the amount provided in the AIP shall be disallowed in the budget review.
Among other disallowed appropriations are the amounts to cover the hazard pay of various city government personnel; and excess appropriations for two reclassified positions under the City Health Services Office. For these, the city government will file a motion for reconsideration.
Given that everybody did not have much time to prepare for the pandemic, we acknowledge the way the city government has responded to the situation, which was to run against time to make sure the supply of basic needs are enough for residents to endure lockdowns, the city have equipped frontliners, and the city is able to mitigate the spread of the disease or deal with Covid cases.
As concerned city officials explained, there was a need to facilitate measures given the extraordinary circumstance brought by the Covid-19, which led to certain accounting and auditing rules being not strictly implemented due to the limitations in mobility and manpower.
However, while we agree that the situation called for being expeditious, it cannot be made an excuse to not strictly observe the rules, especially since we are dealing with public funds. The local finance managers all the more should have been cautious in handling these funds knowing that every penny counts under uncertain times, and public funds up to the last centavo is subject to audit and review pandemic or not, unless otherwise provided by law.
When the Bayanihan law stated that the funds related to Covid response may be allocated expeditiously, we take it to mean not having to dispense with budgeting guidelines, which include the basics – proper documentation, accounting, and liquidation.
These basics, we believe, should not be disregarded, regardless of the situation, because handling public funds always requires accountability.
As the global health crisis caused problems never before experienced and derailed systems in all fronts, we expected the road to recovery and living safely under the new normal would not be easy; and sure, there would be lapses and challenges. What is important is for us not to allow the situation to get the better of us.
Our Covid-19 response efforts may not be perfect, but still, the city government and the public have to work hard to adjust to volatile times, without sacrificing the basics which we ought to abide.

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