The Commission on Audit (COA) has flagged the provincial government’s “underspending” on COVID-19 response including appropriations for frontline health workers, citing a low utilization of its available budget in 2020.
This was one of the main findings contained in the 2020 audit report newly released by the COA.
State auditors pointed out an unutilized funding of around P186 million that should have been spent for vaccines, medicines and personal protective equipments for medical frontliners.
“The provincial government has a rather low COVID-19 fund utilization rate of 51.53 percent, leaving an unutilized budget of P186 million as of December 2020,” the report stated.
The COA report also pointed to “deficiencies” in the utilization of Covid funds that had been used by the provincial government, including an alleged over-spending in the purchase of rapid diagnostic kits, “ineligible disbursements” of Bayanihan Funds from the national government and unliquidated cash advances.
The report noted that the province exceeded its spending on rapid test kits by P2.3 million.
Of some P122.6 million received by Palawan from Bayanihan Funds in 2020, the COA report said the province was able to use only 51 percent of the amount for COVID response.
The report also criticized the provincial government’s spending for its frontline health workers, noting an unutilized budget of over P10.8 million for medicines and PPEs.
“The amount could have been used to give frontliners, whose lives are in danger from COVID-19 pandemic, the possible maximum protection available by utilizing the fund given by the national government,” the report stated
The report also pointed out an outstanding unliquidated COVID-19 funds of over P2.3 million involving cash advances made by accountable officers in district hospitals of the provincial government.
Reply to findings
In its initial reply to the findings, which was also contained in the report, the provincial government explained that most of its funds for COVID-19 “are already obligated” and that the utilization of its funds are “on process.”
It stated that increased spending on rapid test kits are covered by the province’s appropriation ordinances.
COA also flagged the accuracy of the province’s account balance of more than P5 billion, noting discrepancies of at least P104 million due to non-reconciliation of cashbook balances, and flagged more than P56 million of unaccounted amounts for 33 provincial government banks account.
“The accounting record shows a total cash-in-bank account balance of ₱5,118,061,102.26 while the treasury and the bank records show ₱5,013,979,431.90 and ₱5,313,683,525.60. Comparison of the balances showed a discrepancy of ₱195,622,423.34 between the accounting and bank records while the treasury and bank records show a discrepancy of ₱299,704,093.70. Likewise, the discrepancy between the accounting and treasury records amounted to ₱104,081,670.36,” wrote Lynflor M. Adolfo, COA regional director.
More than P306 million fuel funds recorded between 2014 and 2020 were also probed as it was “erroneously recognized” which was inconsistent with the provincial government’s liabilities.
At least 50 accountable officers were also served with demand letters to explain the unliquidated cash advances amounting to P64 million, which were granted despite the absence of a certificate of liquidation from the Provincial Accountant.
The state auditors also identified P120 million from Sunlight International Island Resort Inc., an amount which was received out of the compromise agreement entered into between the Palawan provincial government and the Palawan Council for Sustainable Development (PCSD), that was “erroneously recorded” as a guaranty deposit payable instead of trust liabilities, affecting the “fair representation” of the accounts.
The Provincial Treasurer’s Office, in a letter addressed to COA dated February 17, insisted that the reconciliation statement is “solely for the consumption” of its office, declining to provide the state auditors with the required documents.
“In as much as we want to give your requested reconciliation statement, we cannot do so as it may result in discrepancy with the bank reconciliation statement of the Office of the Provincial Accountant,” read the Provincial Treasurer’s Office’s correspondence to COA.
In its observation and recommendation note, the COA audit team went to Provincial Treasurer’s Office on February 18 and asked them to produce the said reconciliation of cashbook balance with the subsidiary accounting records.
However, they could not present any which belied the Provincial Treasurer’s assertion that they maintained their own reconciliation statement of cashbook balance.
“Even assuming that the Provincial Treasurer’s Office maintains such reconciliation, it cannot unjustly refuse to provide this Office with a document which the law requires their Office to maintain. To unjustly refuse is an assault to the powers and functions of this Commission vested by no less than the highest law of the land,” read the observation notes from the state auditors.
The officer-in-charge of the Provincial Accountant Office commented that they are still waiting for the copy of bank statements from Landbank in order to prepare its bank reconciliation statement (BRS).
Out of the 33 accounts, 18 were submitted on March 5 while 14 were submitted on June 4.
COA recommended the Provincial Treasurer to assess the provincial government’s dormant accounts and consider closing them and return the funds to the source agencies.
The state auditors also asked the Provincial Accountant to regularly obtain bank statements and to validate all the dispensing items to avoid discrepancies.