The Local Land Transportation Franchising and Regulatory Board (LTFRB-10) and the Land Transportation Office (LTO-10) are now launching their own investigation on the incident involving a vehicular mishap Wednesday that killed 15 people at Dangcagan, Bukidnon.

LTRFRB-10 regional director Mandangan Darimbang and LTO-10 regional director Porcawa Dia separately said they are looking on the incident with focus on the license, franchise and insurance policy of the 10-wheeler truck that rammed the L300 van with its 15 passengers who all died on the spot.

Darimbang said the Isuzu 10-wheeler truck driven by Gilbert Gonzaga-Lalin at the time of the incident looks like a cargo truck.

However, he said they do not have any record of this truck having any franchise as well as corresponding proper insurance policy which are requirements for all cargo trucks.

“We are investigating this angle of the case to make sure that they are properly held accountable,” he told Gold Star Daily yesterday.

He added that they also want to remind all cargo trucks to properly comply with the traffic, franchise and insurance laws before hitting the road.

Dia for his part said, although most of the investigation is for the police, they are delving into this vehicular incident for more “data analysis.”

Meanwhile, Darimbang said their LTFRB-10 records reveal that the owner of the L300 Van which was transporting the 15 passengers is Mario Guden and that it has a “No Fault Insurance Policy” with Passenger Accident Managers, Inc. (PAMI).

He said this means that all passengers on board the L300 passenger van will be covered with insurance regardless of who was actually at fault during the incident.

He added that each of the 15 passengers will receive at least P60,000 each after complying with the necessary no fault insurance policy requirements such as death certificate and proof of the legitimacy of the claimant among others.

Those who were reported killed are Juanito Alcober, Merly Daog, Virgilio Nacion, Bernardo Lagria, Geraldine Siloy and two-year old son Joel, Rommel Perez, Rogelia Talara, Lionel Bracero, and Madeleine Bracero. Four casualties were still unidentified. Also reported killed was the passenger vehicle’s driver and owner, John Michael Limbaga.

Dangcagan Police Station chief Inspector Teresita Taperta-Salana said 10-wheeler which was bound for Midsayap, North Cotabato was trying to negotiate a curve at the Sitio Mahayag, Poblacion, Dangcagan area when its tires blew up and the driver lost control.

She said the truck lost control and rammed on the oncoming L300 van which was enroute from Cagayan de Oro City to Kibawe via Valencia City .

She added that they are now preparing a charge of reckless imprudence resulting in multiple homicide against the truck driver.

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Police authorities have now placed under their custody the driver and his two helpers of the 10-wheeler Isuzu truck which rammed a van killing 15 passengers in Dangcagan, Bukidnon late afternoon Wednesday.
Among those who died on the spot include Guillerma Sarrientas, Juanito Alcobar, Merly Daug, Virgilio Nutson, Bernarda Lagwera, Geraldine Sitoy, Rogelio Talura, Ronel Bracero, Madelyn Bracero, Romel Perez, John Micheal Limbaga and Lea Vacalares. All are residents of Dangcalan, Bukidnon.
Dangcalan Police Station chief police inspector Teresita Taperta-Salana said the van was on its way to Valencia City from the town of Kibawe while the 10-wheeler truck was on its way to Midsayap.
She said the truck’s wheels exploded while negotiating curve in Sitio Mahayag, Dangcalan, Bukidnon around 2:00 pm..
She said witnesses saw how the truck was speeding when one of its tire wheels on the right side exploded with the driver losing control.
“The truck then rammed the van killing all the passengers on the spot,” she said over dxIF Bombo Radyo.
She added that it was the worst vehicular accident in Dangcagan.
Taperta-Salana said they are now putting under custody the 10-wheeler Isuzu truck, truck driver and his helpers who were all rushed to the hospital.
She said the driver and his helpers sustained several head injuries and bruises.

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Republic Act 4566, otherwise known as the “Contractor’s License Law” requires that all persons/entities engaged in the construction contracting business in the Philippines be licensed to do so.

Construction is a business that requires high technical skills and considerable resources and ingenuity. And contracting is not merely selling of services, but is selling of the contractor’s capability which is measured by his financial and technical resources and his track record.

The Provincial Government of Bukidnon had been partnering with the Bukidnon Filipino-Chinese Chamber of Commerce and Industry, Inc. (BFCCCII) thru Memorandum of Agreement (MOA) for the construction of its school projects and housing units. In 2006, the Agency entered into MOA with the BFCCCII for its FY 2006 School Building Projects totaling P17.5 Million, plus a supplemental MOA in the total amount of P3.150 Million for four (4) additional construction of school building projects, and another MOA for the Construction of 64 Housing Units of Bukidnon Housing Project (Phase IV) for P8.8 Million.

In the MOA, BFCCCII accepts the responsibility for the Construction of School Buildings at the area in accord with the approved Program of Work (POW) and MOA, and obliges to undertake the Construction of the subject projects in accordance with the schedule of works, standards and specifications mandated by the POW. Payments to BFCCCCII shall be made through periodic billings based on statement of works accomplished duly certified by the Provincial Inspectorate and Monitoring Team recommended by the Provincial Engineer and approved by the Provincial Governor. Upon billing, ten (10) percent retention money shall be deducted. And the construction of the school buildings shall be done simultaneously and be completed on the time frame specified by the respective POW.

For its part, the provincial government thru the Provincial Engineer shall exercise technical supervision over the Construction of School Buildings being implemented, and shall assign an engineer/supervisor to oversee and monitor the operations through periodic inspection, verification and measurement of completed works to ensure that work programs, standards and specifications are being followed by BFCCCII.

By analogy, the terms and conditions of the MOA of DOLE, DFA, DepED, and the Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. (FFCCCII), the umbrella organization of BFCCCII, vis-a-vis the MOA of BFCCCII with the Provincial Government of Bukidnon (PGB) provide, among others, that:

MOA DOLE, et.al.with FFCCCIIMOA BFCCCII with PGB

FFCCCII will initiate/arrange/facilitate the engagement of qualified and competent contractors to undertake the actual construction of classrooms according to the standards/specifications agreed by all parties. (Emphasis supplied)

BFCCCII x x x hereby accepts the responsibility for the construction x x x at the area in accord with the POW and MOA.

BFCCCII x x x obliges to undertake the construction of the above-mentioned projects in accordance with the schedule of works, standards and specifications mandated by the program of works. (Emphasis ours)

Comparatively speaking, the responsibilities of the “contractors” are not analogous. Thus, we opined that the direct engagement of the services of BFCCCII by the provincial government for the construction of its school building projects and housing projects is not in accord with the provisions of RA 4566.

The lawmakers in enacting the afore-cited law took note of the pitfalls of an unregulated construction industry that resulted to varying problems, such as:

Abandonment of projects thereby increasing construction costs and delaying project completion;

Below-standard quality of work; and,

Influx of “fly-by-night” contractors.

The environment which the construction industry operates is one imbued with a tremendous amount of public interest. Thus, public reliance on the capacity, integrity and resourcefulness of contractor dictates that safeguards be instituted to protect public interest.

The PGB resorted to this type of arrangement with BFCCCII because of failures of the bidding process for the projects either due to bid offers above the approved budgets for the contracts (ABC) or non participation by the qualified contractors in the bidding due to unrealistic budgets for the projects.

In the instant case, the school building projects could not be implemented simultaneously and BFCCCII experienced the unavailability of skilled and unskilled laborers in the project areas as pointed out in the management’s reply letter to our follow up communication relative to the status of implementation of the audit recommendation/s on the government-wide sectoral performance audit on School Building Programs for Elementary Education of the Provincial Government of Bukidnon for CYs 2002-2003 (Management Services Report No. 2003-03C, Performance Audit), delaying the enjoyment by the targeted beneficiary-students of the comforts and convenience provided by good classroom facilities. And conformance as to the quality of the projects could not be validated due to the non-submission of the materials testing results.

Recommendation

Revisit the approved budget of the contracts (ABCs) in the event of failure of public bidding due to bid offers above the ABCs, and update the standard costings for the projects to be able to come up with a realistic project cost estimates. Refrain from directly engaging the services of BFCCCII in the construction projects of the province.

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1. The agency incurred irregular expenditures totaling P54.7 Million (Annexes A to D) representing extra cash gift ranging from P40,000.00 to P100,000.00 and additional extra cash gift ranging from P10,000.00 to P20,000.00 each to its provincial officials and employees, exceeding the maximum amount of P5,000.00 per employee as fixed in RA 6686, as amended; thus, unreasonably impairing its liquidity.

Republic Act No. 6686, AN ACT AUTHORIZING ANNUAL CHRISTMAS BONUS TO NATIONAL AND LOCAL GOVERNMENT OFFICIALS AND EMPLOYEES STARTING CY 1988, allows, other than the Christmas bonus equivalent to one month basic salary, the payment of additional cash gift of One thousand pesos (P1,000.00). Subsequently, R. A. No. 8441, which was approved in December 22, 1997, increased the subject additional cash gift to Five thousand pesos (P5,000.00) starting the Christmas Year 1997. The increase was implemented over a period of three (3) years, the full implementation of which was for the Christmas Year 1999 and thereafter.

On November 2, 2002, the President initially authorized the grant of extra year-end bonus for CY 2002 to all government personnel in agencies covered by or following Republic Act (RA) No. 6758, the Salary Standardization Law, and in entities exempt from RA 6758. The grant was implemented by way of Budget Circular No. 2002-3 dated November 8, 2002 at a maximum amount of P5,000.00 per personnel, subject to the compliance by the agencies of the conditions set therein. The same maximum amount of P5,000.00 was fixed under Budget Circular No. 2003-7 dated December 5, 2003 for the grant of the same benefit for CY 2003. Subsequent budget circulars issued by the Department of Budget and Management implementing Presidential approval for the grant of the same benefit no longer mentioned the maximum amount afore-stated.

In 2006, the Sangguniang Panlalawigan of Bukidnon enacted Ordinance No. 2006-060(9th SP) appropriating, among others, the lump-sum amount of P33,120,000.00 in the general fund for extra cash gift as follows:

Provincial Governor – P40,000.00

Vice-Governor – P100,000.00

Sangguniang Panlalawigan Members – 13 x P80,000.00

Chief of Offices, Employees, Casual & Contractual – P40,000.00 each

The same sanggunian further enacted Ordinance No. 2006-064(9th SP) appropriating, among other items of appropriations, the amount of P8,260,000.00 in the general fund for extra cash gift. In the same year, the local legislative council similarly enacted Ordinance No. 2006-061(9th SP) appropriating, among others, the total amount of P19 Million in economic enterprise fund for extra cash gift to regular/contractual/casual – 475 officials and employees at P40,000.00 each. Another supplemental appropriations of P4,760,000.00 was also appropriated in the economic enterprise fund thru Ordinance No. 2006-065(9th SP) for extra cash gift. These appropriations are exclusive of the total amount of P16 Million in the general fund for extra cash gift for national officials and employees and DepED personnel, and the total appropriations of P18,865,000.00 in the general fund and economic enterprise fund for wages differentials of job-order personnel of the province, but in substance the appropriations amounted to the provision of extra cash gift. The wages differentials were paid in two (2) installments: firstly, at P20,000.00 per person; and, secondly, at P5,000.00 each.

The local legislative body of the province committed conflict of interest by passing Ordinance No. 2006-060(9th SP) allocating cash gift of P100,000.00 for the Vice-Governor and P80,000.00 for each member of the sanggunian, amounts at great disparity with those granted to the Provincial Governor and other provincial officials and employees for similar benefits.

The examination of the disbursement vouchers and/or payrolls covering payment of the subject benefits disclosed that the Agency had indeed paid extra cash gift of P100,000.00 to the Provincial Vice-Governor, P80,000.00 each to the members of its Sangguniang Panlalawigan, and P40,000.00 each to the Provincial Governor and to its other regular and casual officials and employees as well as consultants. It was noted further that the province had likewise paid additional extra cash gift of P20,000.00 each to the members of its sanggunian, and P10,000.00 each to the Provincial Governor and to its other regular and casual officials and employees as well as consultants.

The grant of the subject extra cash gift and additional extra cash gift on top of the regular extra cash gift of P5,000.00 per employee, as categorically authorized and established in prior issuances of the Department of Budget and Management, is bereft of legal basis, it being contrary to the principal law – RA 6686, as amended by RA 8441 - authorizing payment of cash gift. In effect, the Agency incurred irregular expenditures totaling to P54.7 Million (Annexes A to D) and, therefore, unnecessarily impairing its liquidity.

Management Comment

The Honorable Provincial Governor, in his comments to our similar observations in the year 2005, argued as follows:

“The Provincial Government of Bukidnon has been granting extra bonus/cash gift to its Sangguniang Panlalawigan members, regular and job-order employees after first securing Presidential approval. For instance, in Calendar Year 2003, I wrote President Gloria Macapagal Arroyo, x x x, and sought her approval for the grant of additional bonus for the personnel of the Provincial Government of Bukidnon. The president then categorically signified her approval by writing in the same letter that she has no objection, and then affixed her signature thereon. In Calendar Year 2004, I wrote the president a letter, x x x., again requesting for the grant of additional bonus to the Provincial Government of Bukidnon personnel. This time the approval of the president was signified through Local Budget Memorandum No. 2004-45, x x x. You will notice however that said local budget memorandum was addressed to ALL local officials nationwide, perhaps, so as not to burden the president of requiring her to signify her individual approval which would be too taxing on her part. ”

In all instances that the Provincial Government of Bukidnon granted additional bonuses to its personnel, the conditions set in the budget memorandum were strictly followed. The extra bonuses where charged against the savings of the Provincial Government of Bukidnon and the PS limitations were not violated.”

The Provincial Governor has won the support of the Regional Director of DBM Region X, Cagayan de Oro City, who opined that: “ x x x, LGUs are given wide discretion on the amount to be granted each personnel and as to what scheme/method of implementation to adopt on the grant of ECB as long as it is within the requirements provided in LBM No. 2005-48 and the Local Government Code of 1991, to wit: (a) availability of funds (savings) and (b) must be within the PS limitation.”

Auditor’s Rejoinder

The amount of additional benefit/extra cash gift authorized to be paid to eligible local government personnel is neither fixed nor hinted in the Local Budget Memorandum No. 2005-48 dated December 7, 2005, or in Local Budget Memorandum No. 2006-51 dated December 18, 2006, covering the grant of additional benefit/extra cash gift to personnel of local government units for FY 2006.

Rules and regulations issued by executive or administrative officers pursuant to, and as authorized by, law have the force and effect of laws. And, it bears emphasis that where the law speaks in clear and categorical language, there is no room for interpretation thereof. It must be applied as it is written, or it must be taken exactly what it says. The omission in LBM No. 2006-51 of the maximum amount that could be granted as additional extra cash gift to local government personnel in the year 2006 should have been gathered from the statutes relating to the same subject matter, or the statutes in pari materia. On the presumption that whenever the legislature enacts a provision it has in mind the previous statutes relating to the same subject matter, it is held that in the absence of express repeal or amendment therein, the new provision was enacted in accord with the legislative policy embodied in those prior statutes, and should be construed together. Beside, the provisions of local budget memoranda governing the grant of the subject benefits cannot be above its source, the RA 6686, as amended. Suffice it to say, accessories follow the principal.

Recommendation

Grant benefits only in full accord with the express provision or otherwise the legislative intent of the law or regulation authorizing the grant of the same.

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Section 10 of the New Government Accounting System (NGAS) Volume II, provides the following provisions:

“xxx The subsidiary ledger (Annex 5) is a book of final entry containing the details or breakdown of the balances of the controlling account appearing in the General Ledger. Posting to the subsidiary ledgers generally come from the source documents. Examples of general ledger accounts which has subsidiary ledgers are Cash-Disbursing Officer, Cash In bank – Local Currency Current Accounts, Accounts Receivable, Accounts Payable, Special Accounts in General Fund, etc. The totals of the subsidiary ledger balances shall be reconciled to their respective control account at the end of every month.”

The debits to the general ledger of cash in bank (control) should have a corresponding debits to subsidiary ledgers of the same account. The credits to the general ledger of cash in bank (control) should have the corresponding credits to the subsidiary ledgers affected of the same account.

It was observed that the entries in the subsidiary ledgers were not reconciled with the general ledger because of the absence of information as to dates and as to the reference of source documents. The reconciliation of the entries between the subsidiary ledgers and general ledgers were made only during audit. (Annex B)

With this condition, Section 10 of NGAS Volume II was violated and the balances of accounts were affected .Management Comment:Management failed to reply the Audit Observation Memorandum, which they promised during the exit conference last February 8, 2005.

Recommendation:

Require the accounting personnel to reconcile the entries in the subsidiary ledgers with the entries in the general ledgers every end of the month to ensure correctness of the balance of each account.

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The audit necessitated the study and test of the financial transactions and operations of the province, to determine whether these were properly conducted and that the provincial government was complying with applicable laws and regulations including the budgetary requirements.

As to our favorable observation, we noted that,

Total number of livelihood loan beneficiaries is 31,976 in the total amount of P145,848,614.93, showing that management is concerned with the poor constituents.

However, the following deficiencies were noted

The report of inventories was not submitted pursuant to Section 375 of the Local Government Code, thus fixed assets in the total amount of P1,328,055,434.71

an not be ascertained.

Section 375 of the Local Government Code of 1991 provides the following provisions:

“xxx Primary and secondary accountability for government property.

(a) Each head of department or office of a province… shall be primarily accountable for all government property assigned or issued to his department or office. The person or persons entrusted with the possession or custody of government property under the accountability of any head of department or office shall be immediately accountable to such officer.

The head of a department or office primarily accountable for government property may require any person in possession of the property or having custody and control thereof under him to keep such records and make reports as may be necessary for his own information and protection.

(c) Buildings and other physical structures shall be under the accountability and responsibility of the provincial or city general services officer or the municipal mayor or punong barangay, as the case may be.

(d) Every officer primarily accountable for government property shall keep a complete record of all properties under his charge and render his accounts therefore semiannually to the provincial or city general services officer or the municipal mayor or punong barangay, as the case may be.”

The financial statements of the Province of Bukidnon showed a total fixed assets of P1,328,055,434.71 as of December 31, 2004. (Annex A)

Management created a committee to conduct inventory of fixed assets of the Province of Bukidnon, but the corresponding inventory report was not submitted as of date of report, in violation of the foregoing regulations.

In view of the absence of the report, an audit of fixed assets could not be made. Alternative audit procedures can not be made because the General Services Officer failed to show the ledger cards of fixed asset acquired during the previous years. This condition had been existing since many years had passed.

Management Comment:

Management failed to reply the Audit Observation Memorandum which they promised during the exit conference on February 8, 2005.

Recommendations:

Require the Chairman of the Inventory Committee to submit the inventory report to the Provincial General Services Officer (PGSO) copy furnished the Commission on Audit.

Require the general services officer to list down all the titles of lands owned by the province, indicating thereon the Title number, area, assessed value and location.

The General Journal for CY 2004 together with the supporting documents were not submitted because the same were not yet completed, in violation of COA Circular No. 95-006, thereby the post audit of journal vouchers could not be made pursuant to COA Circular Nos. 86-253 and 90-343.

Section 6.05 of COA Circular 95-006 dated May 18, 1995 as amended, states among others the following:

“xxx The officials involved in the daily recording of transactions in the books of accounts shall turn over the receipts and the disbursement records with all paid vouchers and documents evidencing the transaction to the Auditor within ten (10) days from date of receipt of said documents.”

COA Circular No. 90-343 provides that the head of the agency shall approved all Journal Vouchers (JV) affecting cash transactions. COA Circular No. 86-253 also provides that the concerned auditors should post audit all JVs affecting cash transactions.

All financial transactions of the government should be covered by disbursement vouchers for disbursements and by official receipts for collections and these transactions are recorded in the Journal of Disbursements and Journal of Collections, respectively. All other financial transactions that are not covered by disbursement vouchers and official receipts are recorded in the General Journal (GJ) by means of the accounting entries in the Special Journal Vouched (SJV) which is the Journal Entry Voucher (JEV) in the New Government Accounting System.

Transactions recorded in the GJ included proceeds and payment of loans, liquidation of cash advances, adjustment of supplies and many others, which involved big amounts affecting cash accounts and for these reasons, COA Circular Nos. 90-343 and 86-253 were issued in order to determine regularity.

The agency failed to submit the required GJ with the supporting documents because the same were not yet arranged and they were still in the process of completing the documents. Due to this deficiency the audit of the vital financial transactions of the agency were not completed.

Management Comment:

Management failed to give written comment on the Audit Observation Memorandum which they promised during the exit conference last February 8, 2005.

Recommendation:

Require the accounting unit to facilitate completion of General Journals and Journal Entry Vouchers and submit to COA the General Journals together with the corresponding JEVs and supporting documents.

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• Findings No.10 COA Annual Audit Report 2005

The procuring entity shall, upon written request of the contractor which shall be submitted as a contract document, make an advance payment to the contractor in an amount equal to fifteen percent (15%) of the total contract price, to be made in lump-sum (amount) or, at most, two installments according to a schedule specified in the instructions to Bidders and other relevant Tender Documents. This advance payment shall be repaid by the contractor by deducting fifteen percent (15%) from his periodic progress payments. (c.f. Annex E of IRR of RA 9184).

The Manual, as revised and amended, defines “Advances to Contractors” as the account used to record the payment authorized by law (RA 9184) to be made in advance to contractors upon submission of the required bond or standby letter of credit. The same further prescribes that “during the construction period, agency assets and public infrastructures shall be taken up in the books as “Construction in Progress” with appropriate asset classification.”

On March 24, 2004, the Agency entered into a Contract Agreement for the Design and Construction of Provincial Hospital of Third Level Referral Hospital, 150-Bed Capacity, located at Malaybalay City, Bukidnon, with J.M. Luciano Construction, Inc. in the amount of P112,531,263.60. Short of the formal letter request from the contractor claiming advance payment as evidenced on the payment voucher, the Agency paid on April 27, 2004 the sum of P15 Million as first and partial installment of the mobilization costs of P16,879,689.54 allowable from the contract. The second and final installment of P1,879,689.54 was paid to the same contractor on July 1, 2004. Both payments were debited to the “Construction in Progress – Agency Assets” account. The contract works will be completed within 730 calendar days from date of receipt by the contractor of the Notice to Proceed on March 24, 2004.

Aware of the errors committed in recording the advance payments, the Accounting Department corrected, among others, the affected Construction in Progress accounts by crediting it and debiting the “Advances to Contractors “ (181) account. But, the second and final installment of the progress payment referred to above was inadvertently omitted in the correction. As such, it remained as debit to the Construction in Progress – Agency Assets account.

In effect, the Construction in Progress – Agency Account (264) was overstated by P1,879,689.54 with an inverse understatement in the Advances to Contractors account. If not corrected further, it will result to abnormal balance (negative) in the subject prepayment account after full recovery of the advances.

Management Comment/Action:

The Accounting Department acknowledged the recommendation and appropriate Journal Entry Voucher (JEV No. 10006010680 dated January 31, 2006) was prepared and recorded in the books of accounts; that the affected accounts were accordingly corrected.

Recommendation:

We recommend that the Accounting Department thoroughly review the proposed accounting entries in the journal vouchers to effect adjustments or correction of erroneous accounting entries prior to their recording in the books of accounts to prevent or minimize misstatements in the financial statements of the agency.

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Section 2 of PD 1445 provides that: “It is the declared policy of the State that all resources of the government shall be managed, expended or utilized in accordance with law and regulations, and safeguarded against loss or wastage through illegal or improper disposition, with a view to ensuring efficiency, economy and effectiveness in the operations of the government.”

Extant records of our office disclosed that the Agency acquired in May 2002 a number of the plant and machinery assets of BRCI TOMATO PASTE PROCESSING PLANT (the Plant, for brevity) located at Manolo Fortich, Bukidnon, in an auction at an aggregate price of P37,344,240.00, which funds came from its reverted appropriations for Livelihood Projects. The acquisition of the Plant was moved by the Agency’s desire to boost the agro-industry development in the province, encourage its constituent-farmers to venture into the production of high value crops particularly tomatoes, and to generate employment opportunities for its constituents. All these noble intentions of the present leadership are manifested in the letter dated March 18, 2002 of Honorable Governor addressed to the Local Sangguniang Panlalawigan, and formed part of the preamble to Resolution No. 2002-128, series of 2002, of the 8th SP of the province.

In our visit to the Plant, we observed that it has remained idle despite the lapse of considerable time from its date of purchase or over three (3) years from its date of acquisition. We further observed that the ideal room temperature required in the main control panel building has not been maintained due to the absence of operational air-conditioning units. Moreover, the CATERPILLAR 30 DIESEL FORKLIFT with deflated tires, costing P420,000.00 and forming part of the accessories to the Plant acquired by the Agency, is also deteriorating.

Another kind of loss that can be imputed to the costs of the Plant is in the nature of foregone interest income which, at conservative estimates, amounts to P6 Million [P37,344,240 x 5.5% x 3.66 years (May 2, 2002 to December 31, 2005)], net of 20% withholding tax.

In brief, the continued idleness of the Plant is costing the local government not only the rapid deterioration of the Plant occasioned by action of the undesirable elements and its non-use or losses thru theft; but, also in terms of foregone interest income which could have been earned had the money been invested in time deposit placements. Beside, the inhabitants have been denied the employment opportunities so dreamed of by the present leadership.

Recommendation:

We recommend that management rehabilitate and put the Plant into its immediate use; conduct intensive campaign and convince the farmers to plant and produce tomatoes and other raw agricultural products sufficient for the requirements of the Plant thru contract growing, if feasible; and, establish product marketing networks.

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Pursuant to Section 156 of COA Circular No. 92-386 the local chief executives shall require an annual physical inventory of all supplies or property of the local government unit as of December 31 of each year. The inventory report shall be submitted to the local chief executive and copy furnished the provincial, city or municipal auditor concerned.

For the year 2005, the agency initiated the conduct of physical inventory of its property, plant and equipment valued at P1,438,749,826.89 in its balance sheet as of December 31, 2005.

Though management had completed the count, neither the inventory report thereon was finalized nor the result reconciled with the accounting records.

Inquiry from the General Services Office and Provincial Accountant as to the status of the inventory report yielded no tangible results.

The absence of subsidiary records of these assets did not permit us the application of alternative audit procedures so as to satisfy ourselves as to the accuracy of the reported valuation of the subject assets.

Recommendation:

Require the Chairman of the Inventory Committee to submit the inventory report to the Provincial General Services Officer (PGSO), copy furnished the Commission on Audit. Henceforth, direct the Provincial Accountant and the Provincial General Services Officer to reconcile their property records.

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The agency cites priority road, irrigation, power, environment protection and other infrastructure projects covering Bukidnon in the  Medium Term Public Investment Program for Mindanao, 2007-2010.

Included are the ongoing P450 million Talakag Irrigation Project; P1.9 billion Misamis Oriental-Bukidnon-Agusan del Norte-Butuan City Road;  P4.608 billion  Mindanao East-West Lateral Road; and Misamis Oriental-Bukidnon By-Pass Road (from the DPWH lump sum allocation).

Also, the P210 million Rehabilitation of Pulangui IV Hydroelectric Power (HEP) Plant Reservoir  in Maramag, Bukidnon; P250 million Mindanao North Coast Integrated Area Development Project; and the Proposed P162 million Integrated Management and Protection of Watershed and Coastal Areas and P60 million Rural Roads for Food under the Food for Work Program.

Meanwhile, as an offshoot of RDC-10 Resolution  No. 14 (s. 2006) recommending the widening into four lanes of the Sayre Highway-Puerto-Damulog stretch.

The Department of Public Works and Highways Regional Office 10 also slated the continuing rehabilitation, upgrading and widening of the Sayre Highway (from Puerto, Cagayan de Oro to Dologon in Maramag, Bukidnon) in 2008-2010.

Aside from the preventive and regular maintenance fund allotments, some P136 million allocation for the Maramag-Maridugao Road in 2008 is proposed for realignment to the Sayre Highway particularly along Boundary Alae of Manolo Fortich to Kisolon of Sumilao, Bukidnon.

Another P50 million is also allotted for the Mangima section this year.

As part of the Mindanao Super Region’s development strategy, inter-regional projects are implemented traversing Bukidnon like the P3.272 billion Talaingod, Davao del Norte – Valencia, Bukidnon Road and the P8.010 billion Abaga-Kirahon-Maramag-Bunawan 230 KV Transmission Project.  Mindanao-wide Small Irrigation Projects, Farm to Market Roads and Barangay Electrification Program are also expected to cover the province as well. (with NEDA)

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