CAGAYAN DE ORO CITY, Philippines – The Commission on Audit (COA) has flagged the Davao City government for poor record keeping that has left donations, including several vehicles donated to City Hall last year, out of of his books at the end of 2021.
In a 2021 report, auditors said the donations, primarily for COVID-19 pandemic relief aid, were at “risk of loss, mishandling and diversion”.
The donations were received by the city government in the last full year of administration from then-mayor and now vice president and secretary of education Sara Duterte.
A copy of the annual audit report was sent to Duterte on May 20 by COA-Davao Area Manager Emilio Asi Jr., days after the election and just before the mayor took office as vice-president. President.
In the report, the auditors noted that the city government also adjusted its property inventory list by removing some 188.814 million pesos of local government property from the list on June 30, 2021 and November 29, 2021.
Auditors said they found several vehicles donated to the city government not listed in its books for “motor vehicles” and “grants and in-kind donations” as of December 31, 2021.
This, the COA said, is “contrary to International Public Sector Accounting Standards”.
Vehicles donated to the city government in 2021 were unregistered as of December 31, 2021. These include the following:
- A ground ambulance with medical supplies and paraphernalia from the Pitmaster Foundation Incorporated
- Four Chinese Embassy Modified Comfort Edition 12-seat JAC Ambulances
- Five 12-seat JAC pickup trucks from the Chinese Embassy
- A 17-seat JAC pickup truck from the Chinese Embassy
Auditors said the vehicles were delivered to the city government on September 21 and October 1, respectively, last year.
The COA said the vehicles were covered by deeds, and since ownership of the vehicles had already passed to the local government, these “should be recorded in the books of accounts”.
But auditors said the donated vehicles remained off the books at the end of the year.
“Since no available data was provided by the LGU (local government unit) apart from the deed of donation, the audit team cannot determine the fair value of the said vehicles,” said the COA.
The COA said the city’s accounting office disclosed that the vehicles were not recorded on its books because the documents were not reportedly forwarded to it by those who received the donations.
The auditors pointed out that although the city accountant is primarily responsible for the fair presentation of the city hall’s financial statements, he can only discharge his responsibility effectively if other offices under the local executive cooperate.
The COA said: “Ultimately, effective coordination between departments relies on leadership…. Indeed, the non-recognition of vehicles given at their fair value led to the underestimation.
The COA said auditors also found shortcomings in the receipt, tracking and monitoring of transactions involving in-kind donations, many of which were relief goods. He noted the absence of the required documents and reports.
While the city government took the initiative to support health workers and voters and received donations in the process, the COA said the documents required to document and monitor the receipt, use and balances of in-kind donations were not retained.
He cited some of the following findings:
- The summary or list of donations received, distributed and balances were not submitted to the ACO within the prescribed deadlines and were only submitted at the written request of the auditors.
- The submitted list lacked documentation such as proof of receipt listing the recipients of each donated item distributed, and an inventory of remaining undistributed items, if any.
- The acknowledgments of receipt submitted did not comply with the format prescribed by COA, which should have been prepared in triplicate: original to the donor, duplicate to the accounting unit and triplicate for the file.
- The registry of donated relief goods which should have detailed receipts, issues, balances as well as expiration dates and storage conditions was not prepared by the City General Service Office (CGSO).
- Stock cards for each type of relief goods received were not kept by the designated goods or supply manager.
- The city accountant has not received copies of receipts for in-kind donations received by the mayor’s office and the City Welfare and Development Office (CSWDO). The COA said this was important because it would have determined the value of the remaining donations and for its recording or disclosure accordingly.
The COA said auditors were told by staff at the general service office that donations were being received directly by the mayor’s office and the local welfare office.
Since these were not routed through the CGSO, the office did not properly document the donations.
COA also said that neither the mayor’s office nor the CSWDO informs the general service office of the donations they have received.
The COA said that the town hall offices “were unable to provide the other documents required apart from the acknowledgment of receipt of the said donations”.
According to the audit team, OSCG staff acknowledged that they were unaware of the new reporting guidelines for in-kind donations “which led to the occurrence of these noted deficiencies”.
“The absence and/or inadequacy of the documents, registers and reports necessary for the proper monitoring and control of donations received and issued expose them to the risk of loss, mishandling and misappropriation. Further, the liability of those involved in the distribution and custody of these items has not been properly established,” reads the COA report.
The COA report showed that donations received and used or issued by the city government were not disclosed in its “Notes to Financial Statements as of December 31, 2021.”
This was contrary to a rule established by the audit commission and, therefore, “transparency of transactions cannot be achieved”, the report reads in part.
Auditors said there were at least 49 sets of in-kind donations received by the local government from private and public entities to help disaster victims and people affected by the COVID-19 pandemic in Davao in 2021.
“But, a review of the notes to the financial statements revealed that no disclosure had been made regarding donated relief goods despite multiple donations received by the City Mayor’s Office (CMO) and the Social Welfare Office. and City Development (CSWDO) during CY 2021,” the COA said.
The COA stated that none of these items were indicated in the financial report of the town hall and that no documents such as acknowledgments of receipt from the mayor’s office, the CSWDO or the CGSO were prepared and submitted to the City Accountant’s Office (CAO) regarding donated property.
Such an omission, according to COA, “prevented the City from achieving full transparency of its transactions” because those responsible for verifying “the financial statements do not receive the essential information needed to arrive at a sound and most beneficial decision.” .
But on February 23, the CGSO sent the COA a letter that “acknowledged details of in-kind donations from public and private organizations and individuals.”
The COA said the CGSO affirmed that the donations had been distributed to the intended recipients, and that it “will implement the recommendations made by the audit team”.
CGSO submitted documents related to in-kind donations for disaster-affected communities in response to the COVID-19 pandemic on March 9. The COA, however, said the documents had not yet been assessed and validated.
“The CGSO admitted that there were transactions under the office of the city mayor, the office of disaster risk reduction and management of the city and the office of social protection and development of the city which did not were not properly documented…Nonetheless, management agreed with the recommendations,” the COA said. – Rappler.com