The Commission on Audit (COA) has called out the City Government of Tagbilaran for its failure to properly monitor and enforce the liquidation of P15,733,000 in funds released to various non-governmental organizations (NGOs) and people’s organizations (POs).

The finding was highlighted in a recent audit report, raising concerns about financial management practices in the city.

According to the COA report, the unliquidated funds span a period from one year to over ten years, indicating a long-standing issue with the city’s fund management and oversight.

The audit observation, which was reiterated from the previous year’s findings, points to a systemic problem in Tagbilaran City’s handling of grants to NGOs and POs.

The report cited COA Circular No. 2007-001, dated October 25, 2007, which provides guidelines for the granting, utilization, accounting, and auditing of funds released to NGOs and POs. This circular stipulates that within 60 days after the completion of a project, the NGO or PO must submit a final Fund Utilization Report to the granting office (GO).

Additionally, the Memorandum of Agreement (MOA) should specify a period for the liquidation of funds granted to these organizations.

A breakdown of the unliquidated balance reveals that ₱5,733,000 falls under the General Fund (GF) and ₱10,000,000 under the Trust Fund (TF).

COA auditors found that only ₱200,000, or 1.27% of the total outstanding balance, was granted.

The remaining balances pertain to releases made in earlier years, for which liquidation reports should have already been submitted to the city government, COA said.

The age analysis of the unliquidated funds paints a concerning picture:

– 1 year and below: ₱200,000 (1.27%)

– 2 to 9 years: ₱14,603,000 (92.82%)

– 10 years or more: ₱930,000 (5.91%)

The breakdown shows that the vast majority of unliquidated funds have been outstanding for between 2 to 9 years, with a significant portion remaining unliquidated for a decade or more, COA found.

COA said the situation shows City Hall management’s failure to monitor fund utilization and enforce liquidation as required by COA Circular No. 2007-001. The circular was issued to ensure conformity with prescribed government accounting standards, promote transparency and accountability, and monitor the implementation of funded projects.

Furthermore, the audit report references COA Circular No. 2016-005, which outlines procedures for writing off dormant receivable accounts, unliquidated cash advances, and fund transfers.

Given that more than 12% of the total fund transfers are 10 years or older, COA suggests that management should focus on gathering documents for these accounts and consider requesting write-offs for funds unlikely to be liquidated.

In light of these findings, COA has made several recommendations to Tagbilaran City Government:

1. Send demand letters to the concerned NGOs and POs for liquidation.

2. Disqualify NGOs and POs with unliquidated fund transfers from receiving new funds until their previous transfers are properly liquidated.

3. Verify the actual ages of unliquidated fund transfers and, if applicable, request authority to write off dormant unliquidated fund transfers.