Findings No.4 COA Annual Audit Report 2004

July 28, 2008

4. Balances of various cash advances from the national government agencies recorded as trust fund by the city government in the total amount of P146,408.54 were not returned to the national agencies concerned as required under the existing regulations.

Section 84(2) of Presidential Decree No. 1445 had mentioned that Trust Funds shall not be paid out of any public treasury or depository except in fulfillment of the purpose for which the trust was created or funds received.

Examination of the Trust Fund account, particularly Due to Other National Government Agencies disclosed that there were funds received by the City Government in the form of advances from these agencies for a specific purpose. Further verification of the account revealed that the intended purpose had already been served but the records showed that they had still balances totaling P146,470.54. (HYPERLINK “OroquietaCity04_Annexes.xls” \o “Annexes 1 – 4″Annex 4)

Management had even prepared and submitted the corresponding status reports of disbursements to concerned agencies as these are subject to liquidation. However, management was not able to remit the balances due to said agencies.

The non-remittance of the unused balance of the fund showed that there was no full liquidation of the account to the trustor.

Management confirmed this observation and consented to rectify the deviation.

Recommendation

Require the City Accountant and the City Treasurer to remit to the national government the unexpended balance of trust funds for which the purposes were already been achieved. Otherwise, request agencies concerned for an authority to use the fund balances for local projects.

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Written by admin · Filed Under Commission on Audit, Oroquieta