Govt should be grateful for excess payments

By Marian Z. Codilla
Cebu Daily News

CEBU City Mayor Tomas Osmeña voiced his displeasure yesterday over the Commission on Audit (COA) assessment that the city exceeded its debt payments by more than P700 million or above the 20-percent ceiling allowed for its debt payments.

He said the national government should be happy rather than be critical of the city's payments for the loan it procured to purchase the South Road Properties (SRP).

“It's not that we were throwing money. We are even helping the national government. If we don't pay (the loan), we will lose the 300 hectare (property in the SRP). We are not paying a private bank. The money went to the national government,” Osmeña said.

The COA's audit report on Cebu City caused Capitol officials to challenge the agency to substantiate its findings in light of Osmeña's claim that the city has a budget surplus of P250 million.

Capitol consultant Rory Jon Sepulveda said that based on COA report, the city government was wrong because it didn't allocate a budget for loan interests. “I find that hard to believe because the mayor is a financial analyst),” he said.

The 2008 audit report stated that the Cebu City government failed to pay interest on its SRP loan number 2 amounting to P169.9 million which accumulated from 2004 to 2007.

As a result, COA said loan number 2 was converted to loan number 3 which would then be penalized with additional interest.

Osmeña said the national government through the Land Bank of the Philippines (LBP) gets three percent of the city's total loan payments while the Japanese government collects only 2.7 percent interest.

Of the three percent, the LBP collects two percent and the Department of Finance gets one percent of the loan payments.

Osmeña said the awards the city government received were proofs that it didn't sacrifice the delivery of services and programs to the city residents.

“We have the best malnutrition program in the country. We have the best lupon in the country. Our dengue cases has reduced. I find that deplorable. We increased our allocation to the Cebu City Medical Center,” he said.

Osmeña also said the COA reminded them last year to keep a guest list of all the events the city sponsored with their discretionary funds since they only kept receipts.

The COA said P944,044 in discretionary expenses from January to May 2008 were unaccounted for.

Sepulveda said the lapse committed by Osmeña was tantamount to dereliction of duty and could be filed against him in court.

He said the Ombudsman can initiate an investigation on Cebu City's finances.

He said he found it hard to believe that the city failed to allocate payments for its loan interests.

“Rather than bragging about his skin and bones budget, Osmeña should add a little flesh to it so they can settle their loan obligations,” Sepulveda said.

Sepulveda also said the “city is going underwater” due to the mayor's fiscal mismanagement.

He was referring to Osmeña's remark about the province's proposed school in Naga town which was supposedly located in a property whose portions were submerged in water.

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Cebu LGU should refund excess payments.

Auditors identify Lapu budget flaws

By Doris C. Bongcac

VARIOUS projects worth P385 million that were implemented since 2005 have not been turned over to the Lapu Lapu City government.

The Commission on Audit in Central Visayas (COA-7) said delays in the project turn over have “deprived the city of the projected benefits and income that can derived from them.”

“It is recommended that the Chief Executive should follow up the turn over of these priority projects. If the contractor is in default, impose sanctions like liquidated damages and penalties,” auditors said in their report of the city's finances for last year.

The auditors also noted lapses in sourcing funds worth P6 million which the Lapu Lapu City government spent in 2008 on three expenditures.

Among the questioned appropriations were the P2.8 million spent for the city's beautification program, the P2.9 million spent for janitorial supplies and the P391,590 allocated for the Sinulog Grand Festival expenses.

The audit report said the city's beautification program was funded from the P11.6 million released by the Department of Tourism (DOT).

It also noted that Sinulog expenses was charged to the Special Education Fund (SEF) even if the activity “did not fall within the priority expenses (for said appropriation).”

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Accountable officials concerned should be made answerable for these anomalies!