Findings No.8 COA Annual Audit Report 2005

July 25, 2008

8. Payments of honorarium amounting to P425,200.00 to certain city officials and employees, which were improperly charged against appropriation for livelihood projects, is in violation to Section 294 of RA 7160.

Section 294 of Republic Act 7160 provides thus

“Section 294. Development and Livelihood Projects. – The proceeds from the share of local government units pursuant to this chapter shall be appropriated by their respective Sanggunian to finance local development and livelihood projects: Provided, however, That at least eighty percent (80%) of the proceeds, derived from the development and utilization of hydrothermal, geothermal, and other sources of energy shall be applied solely to lower the cost of electricity in the government unit where such a source of energy is located.”

In the course of audit, we noted payments of honorarium to certain city officials and employees covering the periods from January 2005 to October 31, 2005 which were improperly charged against appropriations earmarked for development and livelihood projects, that is, from 20% of the share in the proceeds from National Wealth, to wit:

PayeesPeriod CoveredAmountZalsos, Jose L., et. al.January to February, 2005P 59,000.00Belmonte, Vicente F. Jr., et. al.January to March, 200578,300.00Zalsos, Jose L., et. al.March 1-31, 200529,500.00Belmonte, Vicente F. Jr., et. al.July 1-31, 200526,100.00Zalsos, Jose L., et. al.May to June, 200558,200.00Belmonte, Vicente F. Jr., et. al.June 1-30, 200526,100.00Zalsos, Jose L., et. al.June 1-30, 200528,700.00Belmonte, Vicente F. Jr., et. al.June 1-30, 200527,300.00Zalsos, Jose L., et. al.August 1-31, 200526,200.00Belmonte, Vicente F. Jr., et. al.September 1-30, 200565,800.00TotalSept. to October, 2005 P =SUM(ABOVE) 425,200.00

Payments of this nature are not contemplated in the said provision (Sec.294, RA 7160). The 20% is to be spent on development and livelihood projects. This can be gleaned from the defined expressed usage of the 80%, which is corollary to the 20%. Explicit is the requirement that the 20% shall be appropriated for local development projects and local livelihood projects. Spending the latter other than its defined usage defeats the purpose of the law.

Payment of honorarium as compensation to services rendered, whenever authorized, shall be charged against appropriations for honorarium.

Recommendations

Stop spending public funds other than the purpose for which such funds were appropriated.

Require the city officials and employees concerned to refund the amount of honorarium received since these are not supported with an appropriation.

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