The 2019 COA Audit Reports:

Virac LGU has no data on RP tax credits due to taxpayers

(Part 2)


The Commission on Audit’s review of financial statements has shown that the Virac municipal government did not report or disclose the amount of real property tax credits due to some of its 30,000 taxpayers as of Dec. 31, 2019.

In its Annual Audit Report for the past year, the COA said the Municipal Treasurer’s Office (MTO) was unable to provide the necessary schedule and information to the Municipal Assessor’s Office because they could not capture the schedule of excess payment of RPT in the Electronic Tax Revenue, Assessment and Collection System or E-TRACS.

The treasurer told the audit team that the application of the suspension of the CY 2018 revision was tedious on their part because the E-TRACS was already configured using the CY 2018 schedule of market values.

According to the report, MTO personnel had transacted “off-ledger” or performed manual computations using the CY 2013 assessed value and applied tax credits, if any.

After manually determining the net RPT dues, the computation was forwarded to the cashier for payment, with official receipt details encoded in batch back to the E-TRACS to update taxpayers’ ledgers.

“Because of large volume of advance collections, complexity of application of tax credit using manual computation, and lack of competent personnel, the MTO could not maintain a summary of tax credits due to its taxpayers,” the COA stated.

It also found that there were MTO transactions where the CY 2013 assessed values could not be found in the E-TRACS, thus casting doubt on completeness and integrity of the database maintained by the assessor’s office.

Competent personnel were not assigned for the maintenance of E-TRACS, it pointed out, with MAsO and MTO performing independently their tasks in the system without anyone supervising the overall functions of the E-TRACS and ensuring coordination between the two offices.

It may be recalled that the provincial government passed an ordinance in 2018 approving a higher schedule of market values of real properties in Catanduanes, with Virac LGU implementing it in the third quarter of 2018.

However, the Sangguniang Panlalawigan suspended the implementation of the measure from Jan. 1 to Dec. 31, 2019, with Virac implementing the suspension in the first quarter of CY 2019.
But for the advance collection of RP taxes in CY 2019 for CY 2020 RPT dues, the LGU already used the CY 2018 revised values as basis of assessment, despite the province suspending again the implementation of higher values for yet another year.

Under the two ordinances suspending the general revision ordinance, “any advance or excess payment as a result of the implementation of PO 004-2018 should be treated as tax credit against future real property tax liability/ies of the owner.”

Among the recommendations of the audit team for the LGU was to direct the MTO to work back on CY 2018 and CY 2019 transactions in order to compute the tax credits as of Dec. 31, 2029 and maintain a schedule of taxpayers with their corresponding tax credit balances.

It also urged the LGU to consider hiring or outsourcing of Information Technology professional or specialist to maintain E-TRACS and ensure coordination between MTO and MAsO in its use.


Lack of work plan, budget for SWM

On the other hand, the COA noted the lack of comprehensive plan for Solid Waste Management, with the final disposition of residual solid waste not in accordance with existing laws.

Administered by the Office of the Mayor, the SWM was not institutionalized and had no separate comprehensive budget for its operation, including an appropriation for the maintenance of vehicles and wages of garbage collectors.

There was no permanently appointed or hired official to manage SWM operations, with department heads in concurrent capacity designated as SWM head.

The team also noted that some barangays had Materials Recovery Facilities but waste segregation was not practiced, with urban waste directly collected from households and delivered to the open dumpsite without segregation.

The LGU had a shredding machine for plastics and leaves that could be used as mixtures for hollow-block making and fertilizers but the same remained unutilized, the COA bared.

It was disclosed that on Jan. 14, 2020, the DENR-EMB regional office had already enjoined Virac LGU to cease immediately the operation, close and rehabilitate the open dumpsite at Casoocan and Magnesia del Sur.

A separate letter also showed that the Central Material Recovery Facility at San Isidro Village did not fully comply with Republic Act 9003.


Excessive communications expenses for LGU execs

A review of the financial statements likewise indicated that expenses for communications totaled P570,000 for CY 2019, with the LGU paying cellular phone load allowance of P2,000 each by way of reimbursement to the mayor, members of the Sangguniang Bayan and department heads.

These were “unreasonably high” considering the affordable means of communications available in the market, including promotional rates such as unlimited call and text ranging from P200 to P600 per month, the auditors stated.

There were no documents or reports attached to the vouchers to ascertain actual utilization of load allowances, they added.

In its comment, the LGU said the P2,000 load allowance was not even enough, as an increase in load allowances for data charges was necessary due to unreliable internet connection.


P1.9-M transportation allowances to LGU officials

The audit report revealed that transportation allowances totaling P1.9 million were still granted to department heads without deduction despite the provision of government service vehicles to their respective offices, in violation of Section 6.2.1 of Local Budget Circular No. 102, resulting to incurrence of illegal expenditures.

It also cited a Supreme Court ruling in “Aida Domingo vs. Commission on Audit,” G.R. No. 112371 where it was pointed out that there are two instances when transportation allowance cannot be granted to a government official: when he or she is assigned a vehicle, and when he or she uses government transportation facilities.

In reply, the LGU management claimed that several department heads for whom vehicles were assigned decided to turn them over to be used as transport of teams in charge of special projects like the Project Monitoring Committee, COVID Task Force, tax campaign task force, research team for the Sangguniang Bayan, environment monitoring and the like.

The COA, however, stood by its observation that LGU officials who use government vehicles must have a corresponding deduction in their Transportation Allowance.


(to be continued)

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