Findings No.2 COA Annual Audit Report 2006

July 26, 2008

The City’s Accountable Officers were either insufficiently bonded in violation of Sec. 101 (2) of the Government Auditing Code of the Philippines (P.D. 1445) and Art. 405 (m) of the Local Government Code of 1991 (R.A. 7160), thereby exposing government funds and properties to undue risk.

In order to safeguard government funds from malversation and embezzlement and to establish accountability of public officers who has access to government funds, Sec. 101 (2) of P.D. 1445 prescribes that –

“Sec. 101. Accountable officers; bond requirement.

x x x

Every accountable officer shall be properly bonded in accordance with law.”

Similarly, Art. 405 (m) of R.A. 7160 mandates that “ every officer of LGU whose duties permit or require the possession or custody of local funds shall be properly bonded, and such officers shall be accountable and responsible for said funds and for the safekeeping thereof in conformity with the provisions of law.”

During the cash examinations of the accountable officers of the City for the first and second semesters for CY 2006, we have established that the bonds covering the risk liabilities of the accountable officers were not promptly renewed by the concerned officials. Some of them were collecting funds for the City with expired or unrenewed bonds, thus exposing the same funds to undue risks.

The City Treasurer explained that they had paid the premiums for the bond to the Bureau of Treasury only last September 2006, on a lump sum payment for all the accountable officers even though they have different expiry dates of their bonds, hence during the cash examinations they were not able to present their bond certificates.

Attached herewith as Annex E is the Schedule of Accountable Officers with Insufficient Bonds for a better appreciation of this findings.

As a rejoinder, we reminded the City Treasurer that it is required by law that every government employee or officer whose duty requires the possession on custody of government funds shall be covered by sufficient bond, thus it is incumbent upon his office to see to it that accountable employees under his supervisions are covered by sufficient and effective bonds.

The City Treasurer had assured us that their Office will facilitate and promptly renew the bonds of the accountable officers so as not to unnecessarily expose the government funds to risks.

Recommendation:

Direct the City Treasurer to promptly attend to the renewal of the bonds of the accountable officers under his supervision

Written by admin · Filed Under Commission on Audit, Malaybalay