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COA Report - 2007

VIRAC, Catanduanes - Analyzing the financial condition of this province, the Commission on Audit in its 2007 report said the island province’s condition was not financially sound since the cash available at the time the audit was made was only P159.6 million where its total liability was 169.6 million., or a negative balance of P10 million.

With the liquidity ratio of .94 to 1, according to the COA report, this means that the province has no sufficient cash to pay or liquidate its current and long-term obligations.

It noted further that current assets of P272.10 million was higher than the total liabilities of P169.6 million, or a current ratio of 1.6 to 1 which meant that the provincial government was solvent to meet its current obligations.

Catanduanes became an independent province on October 24, 1945, thru Commonwealth Act 687. However, it was RA 7160 which gave local government units total independence in managing its administrative affairs, in conformity with the national government thrust for sustainable and economic growth.

The COA also noted that the P20.5 million it contracted with the World Bank SRRIP thru the Department of Interior and Local Governments was not recorded in the books of the provincial government, resulting to the understatement of assets and liabilities. The loan, according to the audit report, has remained “substantially” unpaid.

Further, it was pointed out that the provincial government recognized liabilities amounting to P6.36 million when in fact the goods intended to be acquired were not yet delivered by the supplier.

Following are the other salient findings by the COA audit report:

  • cash advances totaling P8.93 million remain unliquidated as of end of 2007, in violation of government accounting rules;
  • various procurement amounting to P963,930.13 were made thru reimbursement basis contrary to Section 12 of RA 9184, or the Government procurement Act. It was suggested that all procurement transactions be first evaluated by the bids and Awards Committee prior to actual procurement;
  • the provincial capitol negotiated a contract for rental of equipment at P7.4 million where the supplier showed an asset of only P50,000.”With such circumstance, the agency (provincial government) should not have rated the supplier as eligible and negotiated the contract with the supplier having no heavy equipment to be offered for lease,” COA stressed;
  • Procurement of textbooks thru direct contracting without coordinating with the division office of the Department of Education
  • Investment of P4 million SEF Fund in high yield savings account which is not allowed in the utilization of said fund;
  • Performance Bonus, Extra Cash Gift and excess Bonus totaling P8.7 million were given to capitol officials and employees despite the fact that the capitol has already exceed its Personnel Services (PS) limitations;
The report also underscored that out of six audit recommendations COA made on the province’s previous year’s violations, only one was accordingly implemented in 2007, two were partially implemented, and three were not at all implemented.(By Jose B. Perez - Bicolmail)

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