COA urges Capitol: Guard disaster fund

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Tuesday, June 3, 2014

CEBU CITY -- On paper, Cebu Province had P131.76 million for disaster risk reduction and management, which was the combined amount from 2011 and 2012.

The Commission on Audit (COA) recently asked the Capitol why this amount wasn’t transferred to a special trust fund, as required by the Disaster Risk Reduction and Management Act or Republic Act 10121.

In a reply dated May 28, 2014, the Provincial Finance Committee said that at the end of 2012, when Vice Governor Agnes Magpale took over as acting governor, the Capitol had P91 million, which wasn’t enough for its payables.


In a “situation as tight as this,” the unspent P131.76 million could not be transferred to a trust fund because “the Province was also confronted with fund requirements for the current year’s operation, on top of huge payables to be settled.”

Provincial Budget Officer Danilo Rodas signed the reply, which was addressed to Governor Hilario Davide III through his chief of staff and Provincial Legal Officer Orvi Ortega.

Deficit spending

State auditors said the Province’s failure to transfer the unspent disaster risk reduction and management (DRRM) funds violated an audit circular.

“We recommend that the Provincial Budget Officer, in coordination with the Provincial Accountant, transfer the unexpended balance of the LDRRMF to the special trust fund for the purpose of supporting disaster risk reduction and management activities within the next five years,” COA recommended.

LDRRMF stands for the Local Disaster Risk Reduction and Management Fund.

Rodas, in his answer, also explained that the Capitol had to do “deficit spending” in 2012 and that its “income targets were less than actual expenditures.”

“When I asked the treasurer how much was our disaster fund, he told me the amount on paper,” Magpale recalled. She had taken over as acting governor until May 2013, while then Governor Gwendolyn Garcia (now congresswoman of the third district) served a 180-day suspension ordered by the Office of the President and the interior department.

In the first half of 2013 and after Governor Davide’s term started, Magpale said, the Province had P71 million in LDRRMF, which was used when typhoon Yolanda struck northern Cebu last November.

What’s COA’s call?

After the earthquake last October 15 and typhoon Yolanda less than a month later, the Provincial Budget Office prepared an obligation request, which would have transferred P48.44 million (from the 2012 LDRRMC balance) to a trust fund account, Rodas wrote.

“However, the Provincial Accountant was again hesitant to proceed with the transfer without incorporating the same (the amount) in a supplemental budget,” he added.

The Province, the finance committee suggested, should ask COA to explain or issue a ruling on how unspent disaster risk reduction funds should be handled.

The provincial accountant’s view is that these unspent funds must revert to the general fund. Also, current funds cannot be used to support appropriations from the previous years, except through a supplemental budget.

However, the budget officer’s view is that unused disaster funds at the end of the year should not revert to the general fund, unless they remain unused after five years.

The finance committee also recommended that the Capitol avail itself of a credit line with a bank “to fund the PDRRMF on installment (need) basis.” (Sun.Star Cebu)

Published in the Sun.Star Cebu newspaper on June 04, 2014.

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