Findings No.1 COA Annual Audit REport 2005

July 25, 2008

1. Parking/entry fees of Public Utility Buses in Agora Terminal amounting to P1,755,371.10, including interest and surcharges, remained uncollected as of December 31, 2005, in violation of Section I (e) of City Ordinance No. 2004-144, thus depriving the City of an increase or additional income.

Section 1 of the City Ordinance No. 2004-144 dated December 9, 2004, an ordinance amending Section 28-E, Parking and Entry Fees, of the City Ordinance No. 2003-137, otherwise known as the Market and Slaughterhouse Code of Gingoog City, partly provides that Parking and/or Entry Fees for public transportation is amended to P15.00 per unit/parking/entry.

Section 2 of said ordinance further provides that violation of the provisions of this ordinance shall be punished by fine of not less than P500.00 and/or imprisonment of ten (10) days or both, at the discretion of the court for the first offense; P1,000.00 and/or imprisonment of twenty (20) days or both at the discretion of the court for the second offence; P1,500.00 and/or imprisonment for one (1) month or both at the discretion of the court for the third and subsequent offences. Administrative fine and issuance of citation tickets are applicable to this provision.

Section 29 of the City Ordinance No. 2003-137, known as the Market and Slaughterhouse Code of Gingoog City, provides that market fees shall likewise be collected for the occupancy of market premises on a day to day basis.

Section 169 of Republic Act No. 7160 provides that where the amount of any revenue due a local government unit, except voluntary contributions or donations, is not paid on the date fixed in the ordinance, or in the contract, expressed or implied or upon the occurrence of the event which has given rise to its collection, there shall be collected as part of the amount an interest thereon at the rate not exceeding two percent (2%) per month from the date it is due until it is paid, but in no case shall the total interest on the unpaid amount or a portion thereof exceed thirty-six (36) months.

Records disclosed that two bus operators, the Bachelor Express, Inc. and the Bagong Lipunan Transit requested for the adjustment of the approved P30.00/unit/parking/entry fee for public utility buses as enacted under City Ordinance No. 2003-137, known as the Market and Slaughterhouse Code of Gingoog City.

The original rate as approved under the Gingoog City Tax Code of 1992 was only P5.00 per Public Utility Bus unit/parking/entry. With the efforts to raise revenue for the City Government, City Ordinance No. 2003-137, dated August 20, 2003 was approved increasing the parking/entry fee for public utility busses (PUBs) from P5.00 to P30.00.

The increase was deliberated in a public hearing on August 9, 2002 at the Penthouse, City Hall, Gingoog City.

The Branch Manager of the Bachelor Express, Inc. in its letter dated August 21, 2002, commented that the increase of parking fee for PUB from P5.00 to P30.00 was a whooping increase of 300% and counter productive in their business. They requested for a status quo in the rate of parking fee for PUBs and for the mean time that their request was not granted, no payment was made on this matter.

The proprietor of Bagong Lipunan Transit resented the approved P30.00 per unit/parking/entry by not parking their bus units in the terminal area for about two months starting in July 2004 when the City imposed the P30.00 per unit/parking/entry of all PUBs.

Due to negative reactions of the increase of parking fee from P5.00 to P30.00 per unit on PUBs, the Sangguniang Panlungsod reduced the rate from P30.00 to P15.00 per unit/parking/entry of Public Utility Bus, as enacted by City Ordinance No. 2004-144, dated December 3, 2004, amending Section 28-E, Parking and Entry Fees, of City Ordinance No 2003-137, otherwise known as the Market and Slaughterhouse Code of Gingoog City.

The Operators/Dispatchers of Public Utility Buses and Public Utility Jeeps were informed by the City Treasurer of the approved City Ordinance No. 2004-144 in his letter dated January 11, 2005.

Records disclosed that in spite of the adjusted parking and entry fee of P15.00 per unit, Bachelor Express, Inc. and Bagong Lipunan Transit still did not pay the parking and entry fee on a day to day basis as provided under Section 29 of City Ordinance No. 2003-137.

The Bachelor Express, Inc. commented that they still have to wait for their main office’s go signal to pay the adjusted rate.

A report was made by Ms. Dolorita B. Fernandez, dated January 5, 2006 addressed to Mr. Segundino C. Caballero, Market Supervisor IV, regarding the unpaid bill of the Bachelor Express, Inc. and Bagong Lipunan Transit from July 2004 o December 2005. This report was forwarded by the Market Supervisor to the City Treasurer, Mr. Marvin R. Mercado on January 5, 2006.

The report made by Ms. Fernandez was not based on actual trips of buses incurred per day by the bus operators but was based on estimated average trips per day of the two bus operators, without imposing the interest due on unpaid revenue on the date fixed in the ordinance, as provided under Section 169 of Republic Act No. 7160, as follows:

ParticularsBachelor

Express, Inc.Bagong Lipunan Transit

Estimated No. of Trips per Day

150 Trips

20 tripsApproved Per Unit/ Parking/Entry Fee

x 15

x 15 Due per DayP 2,250.00P 300.00x 30 daysX 30 daysDue per MonthP 67,500.00P 9,000.00Unpaid Monthsx 18 monthsX 18 monthsTotal Amount DueP 1,215,000.00P 162,000.00Less: Partial Payment-0-108,000.00

Total Unpaid Amount

P 1,215,000.00

P 54,000.00

Interview conducted on February 3, 2006 with Ms. Dolorita Fernandez revealed that a logbook is maintained by the City Market and Slaughterhouse Division for the actual trips made per month on the two bus operators. Based on the logbook, actual amount due for these operators are as follows, plus the interest due on unpaid amount, [Annex A and B], summarized as follows:

Particulars

Bachelor Express, Inc.

ANNEX ABagong Lipunan Transit

ANNEX B

TotalAmount Collectible from July 1, 2004 to December 31, 2005P1,377,870.00P192,255.00P1,570,125.00Add: Total interest due per Section 169 of R.A. 7160259,488.60

____________33,757.50

__________293,246.10

____________TotalP1,637,358.60P226,012.50P1,863,371.10Less: Partial Payment0.00

____________108,000.00

__________108,000.00

____________Amount CollectibleP1,637,358.60

==========P118,012.50

=========P1,755,371.10

==========

Non-payment of parking/entry fee of P15.00 per unit of the two bus operators as cited above violated Section 1 and 2 of City Ordinance no. 2004-144, Section 29 of City Ordinance No. 2003-137 and Section 169 of Republic Act No. 7160, thus depriving the City to generate additional income amounting to P1,755,371.10.

During the exit conference, the City Legal Officer and the City Treasurer promised to confer with the proprietors of the Bachelor Express, Inc. and Bagong Lipunan Transit, together with their Legal Counsels to discuss their violations on the herein Ordinance.

Recommendations:

Enforce collections of the unpaid amount of parking/entry fee amounting to P1,755,371.10 from the two bus operators described above. Otherwise, refer this matter to the City Legal Office for proper implementation of the sanction set under Section 2 of Sangguniang Panlungsod City Ordinance No. 2004-144 on violators of the provision of said ordinance.

Collect the correct amount due for parking/entry fees for public utility busses. Collection should be based on actual parking/entry per trip made by these busses pursuant to Section 1 of the City Ordinance No. 2004-144.

Instruct the In-charge of the Market and Slaughterhouse Division to enforce Section 29 of Sangguniang Panlungsod City Ordinance No. 2003-137 which provides that market fees shall be collected for the occupancy of market premises on a day to day basis and remit daily to the City Treasurer’s Office any amount generated from this. Stop the practice of collecting monthly based on estimated average buses per day to generate more income for the government coffer.

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Written by admin · Filed Under Commission on Audit, Gingoog City