Not a few eyebrows among the newspaper-reading public were raised when the Tribune reported that in 2021, the provincial government of Catanduanes had parked P242 million in time deposits in three local banks.
Those who were taken by surprise most likely believed that lack of funds hampered the operations at the Capitol, as it often faced difficulty in paying the salaries, wages and benefits of personnel at the Eastern Bicol Medical Center (EBMC).
Actually, the finding of the Commission on Audit is a virtual repeat of its discovery in 2020 of P258 million in time deposits in the same banks, in apparently the very same accounts.
In its audit report for said year, the COA noted that except for one TD account, the rest of the accounts mentioned was not covered by authority from the Sangguniang Panlalawigan.
Likewise, it pointed out, there was no evidence that the cash used for the time deposits were idle funds in the General Fund.
Section 21 of COA Circular No. 92-382 provides that provinces, cities and municipalities may deposit with duly authorized depository banks idle funds in the General Fund under time deposit accounts, upon prior authority of the sanggunian and the approval of the chief executive.
The succeeding section defines idle funds in excess of normal operating requirements to “generally mean the level of funds which an entity can freely invest in government securities and/or fixed term deposits after considering provisions for coverage of regular and recurring operating expenses like salaries and wages, repairs and maintenance, inventories and supplies, debt servicing, etc., within the context of the entity’s cash operating cycle.”
Unremitted national collections and funds set aside for payment of obligations to government corporations/cooperatives shall not form part of the idle funds of local government units, the circular said, citing DOF Department Circular No. 6-90 issued on Dec. 6, 1990.
Aside from recommending that the chief executive secure post-facto authority from the SP for the ₱258.52 million placed under time deposits, the COA told the provincial government to determine whether the same are idle funds in the General Fund.
In response to the 2020 finding, the provincial government informed the audit team that “in view of the enormous amount of available cash for appropriations declared by the Provincial Treasurer (PT), the PGC shall conduct thorough planning and budgeting to identify related priority programs, projects and activities to help address recovery efforts from the effects of COVID-19 pandemic and Super Typhoon ‘Rolly’.”
Sure enough, the administration took P110 million from the time deposit in 2021 and allocated the funds to vital programs, projects and activities, which should have left P148 million in the said accounts.
But at the end of the year, the total amount in the time deposit accounts was almost back to the previous level at P242 million, hence, the same adverse finding from the auditors.
Now, assuming that the P242 million are indeed idle funds, then the Cua administration has the money to revert EBMC’s eco-enterprise status back to a Capitol-funded provincial hospital.
It may even have enough left over to ensure that it has adequate medicines, drugs, and medical supplies to do away with the problematic and illegal cash advances under the No Balance Billing policy.
But having the money is one thing; whether it has the political will to do what has to be done is another.
Auditor’s Rejoinder:
We acknowledged the actions taken by Management to review, and conduct thorough planning and budgeting of the big amount of idle cash to fund priority programs, projects and activities to help address recovery efforts from COVID-19 pandemic and Super Typhoon ‘‘Rolly’.
However, the Audit Team (AT) stood in its recommendation that new authority from the current SP shall be sought. As noted, the last authority granted by the previous SP was SP Resolution 213-2012 dated August 13, 2012 for DBP account only. If authority from the current SP will not be sought, this will preclude the current SP from examining and authorizing the utilization of such funds. Seeking authority from the SP will enable it to exercise its legislative power to decide whether to continue investing in time deposit or terminate the same. Circumstances change in succeeding years and the PGC may need funds to finance priority projects, thus SP may consider terminating investment in time deposit and authorize utilization of such funds. Every year, the SP authorizes the allocation and utilization of all available funds as well as the management thereof. Cash invested in time deposit is a source of income subject for appropriation, and only the SP as the legislative body is vested with powers under Republic Act No. 7160 to authorize the utilization thereof.