CEBU CITY, PHILIPPINES — The Commission on Audit (COA) has flagged ₱10.12 million worth of unliquidated cash advances granted to officials and employees of Minglanilla municipal government, citing violations of government accounting rules.
Based on its 2024 Annual Audit Report (AAR), COA said cash advances totaling ₱10,115,490 remained unliquidated as of December 31, 2024, even though the purposes for which these were granted had already been completed.
State auditors said the lapse is contrary to Section 89 of Presidential Decree No. 1445 and COA Circular No. 97-002, which require cash advances to be liquidated within prescribed periods depending on their nature, and fully settled by year-end.
Of the total amount, ₱186,990 was recorded under “Advances to Officers and Employees,” while ₱9,928,500 fell under “Advances to Special Disbursing Officers.” According to COA, the records show that ₱4.82 million had been outstanding for less than one year, ₱190,940 for more than one year but up to three years, and ₱5.11 million for over three years.
COA said prolonged non-liquidation resulted in the overstatement of receivables and understatement of expenses, contrary to International Public Sector Accounting Standards (IPSAS) 1, which requires the fair presentation of financial statements on an accrual basis.
The issue had already been raised in the 2023 audit report. COA noted that while demand letters were issued in the previous year, many advances remained unsettled, and the municipal accountant failed to submit proof that the notices were received.
The municipal government agreed with COA’s recommendations to locate accountable officers with long-overdue advances, issue demand letters, withhold salaries where applicable, and assess the collectability of accounts.
For balances involving deceased officers, the local government committed to initiate write-off procedures in accordance with COA Circular No. 2023-008.
Underutilized funds
In the same audit report, COA also flagged the municipal government for the idle or underutilization of ₱17.77 million in government funds and for failing to implement ₱4.3 million worth of disaster risk reduction projects in 2024.
COA said funds totaling ₱17,769,134.66 received from various national and local agencies for infrastructure, disaster response, and socio-economic programs remained idle or underutilized as of December 31, 2024.
The audit found that several projects amounting to ₱25.29 million were either unimplemented or only partially implemented, with some funds remaining unused for periods ranging from three months to as long as 10 years.
COA said this was inconsistent with Section 2 of Presidential Decree No. 1445, which mandates the efficient, economical, and effective use of government resources, and Section 305(l) of the Local Government Code, which requires shared fiscal responsibility among local officials. The same issue had been raised in Minglanilla’s 2023 audit report.
“The non-utilization of the funds deprived the Municipality and the intended beneficiaries of the benefits that could have been derived therefrom,” COA said.
The audit body reiterated its recommendation for the municipal government to evaluate stalled projects, address implementation constraints, and fast-track ongoing programs. Management agreed to adopt remedial measures to ensure the proper and timely use of funds in line with conditions set by funding agencies.
Unimplemented disaster projects
COA also found ₱4.3 million worth of projects under the Local Disaster Risk Reduction and Management Fund Investment Plan (LDRRMFIP) that were unimplemented in 2024, contrary to the objectives of Republic Act No. 10121, or the Disaster Risk Reduction and Management Act.
The amount forms part of Minglanilla’s ₱33.25 million disaster allocation for 2024, which includes ₱23.275 million for mitigation and preparedness and ₱9.975 million for the quick response fund.
Unimplemented items included waterways management, river and coastal clean-up activities, council meetings and consultations, and the procurement of office, training, and heavy equipment, as well as additional transport vehicles.
The Municipal Disaster Risk Reduction and Management Office (MDRRMO) told auditors that some projects overlapped with programs of other departments or were already provided by other agencies, while certain expense items were deemed ineligible charges to disaster funds.
COA stressed that the local disaster council could have revised the investment plan and realigned funds to other priority disaster programs to avoid non-utilization, warning that residents may have been deprived of the intended benefits.
“The non-utilization of these fund allocations may have deprived its constituents of their intended benefits had these been reprogrammed to other disaster mitigation and/or preparedness projects, programs and activities in accordance with the IRR of RA 10121,” COA said.
The audit team recommended closer coordination among departments, avoidance of overlapping projects, and stricter compliance with rules governing the use of disaster funds. Municipal management agreed to implement these measures.
| Written by Mitchelle L. Palaubsanon
