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Findings No.2 COA Annual Audit Report 2006

July 28, 2008

2. Various fertilizers and seeds loaned to farmers amounting to P728,000.00 were not properly documented thus exposing to the risk of not being collected.

A loan should be covered by a loan agreement between the City of Tangub represented by the City Mayor and the farmer.

The city`s program during the year was to help and assist farmers uplift their living conditions. Thus various activities and projects were prioritized through the City Agriculture’s Office. One of these was to release fertilizers and hybrid corn seeds to farmers in the form of loan.

Examination of the records disclosed that the city government purchased 1600 bags of fertilizers, and 100 bags of hybrid corn seeds totaling P728,000.00 in the middle of the year for distribution to farmers in the form of loan. (Annex 2) These purchases were properly funded and authorized. The loan agreement was signed by the barangay chairman on behalf of the farmers and the City Agriculturist on behalf of the city government regarding the manner and mode of payment of the loan. On the other hand, an agreement was entered into by and between the barangay chairman and the farmers indicating among others, their obligation upon the receipt of the loaned fertilizers and seed and the mode of payment. One provision was that the farmers will pay in kind upon harvest to be priced by the city agriculturist.

Out of the 1600 bags of fertilizers and 100 bags of hybrid seeds, only 365 bags and 35.5 bags respectively were loaned to farmers.

Further verification showed that after receiving the items from the General Services Office through a Requisition and Issue Slip (RIS), the items were then distributed to the farmers. The City Agriculture’s Office had then required the farmers to sign in a logbook to record the receipt of the items, showing the following data:

Local Government Unit;

Office;

Date, Sheet Number;

Description of the Item, Unit of Issue;

Item Number, Quantity, Unit Cost, Total Amount;

Name of End-User, Signature, and

Certification of the Correctness of the Issuance by the Head of Office

Thus, the accountability of the farmers could not be legally established, as the loan agreement was not made between the City Government and the farmers.

Therefore, the payment of loan is exposed to the risk of not being collected.

Recommendation

Require the City Agriculturist to prepare a contract to be signed by the City Mayor and the farmers showing the quantity and amount of fertilizers and/or corn seeds received by the latter from the former and the corresponding payment scheme as agreed by both parties. Require him also to monitor collections.

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

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