In 2024, the provincial government of Catanduanes hired or rehired a total of 2,580 job order workers and maintained P352 million in time deposits in two local banks.
These were among the findings of the Commission on Audit in its Annual Audit Report of the LGU’s transactions for said year.
It noted that the hiring/rehiring of JO personnel was not supported with established policy guidelines inconsistent with Section 124 of PD No. 1445 or the Government Auditing Code of the Philippines.
“(T)hus, (it) may not be responsive to and may pose risks towards achieving the overall objectives of the
Province,” the report stated.
Of the total JO workers, 983 or 38 percent were employed in the Sangguniang Panlalawigan while the Governor’s Office and the Eastern Bicol Medical Center accounted for 553 and 237, respectively.
These workers were assigned to the different departments of the PLGU, the EBMC and to other national government agencies, local government units, and schools, among others, and the job description of these JOs complemented the functions of the departments where they are assigned, the audit team observed.
Likewise it said that while 89 percent of the approved Plantilla of personnel was filled (677 out of 759), the JOs hired were more than triple the number of permanent personnel.
“Except for two offices, the Provincial Person with Disability Affairs Office and the Provincial Cooperative Development Office, all other offices had employed JOs half or more than the number of permanent employees,” the report emphasized.
Other JOs, mostly from the Offices of the Governor and the Legislative were deployed to other LGUs, national government offices and schools, with the wages charged to the budget of the Governor’s Office and from the budget of every member of the legislative department.
The audit team observed that for JOS assigned to the legislative department, the nature of their work was not in furtherance of legislative tasks.
“For other departments of the PLGU with limited work areas, the presence of more JOs cramped the workplaces,” it stressed. “It likewise unnecessarily puts a question on the ability of permanent personnel to perform their jobs having several JO assistants at hand.”
The report opined that the hiring or rehiring or deployment should approximate the need of the offices to maximize productivity of the workers.
It further noted that audit made on sample payrolls and its supporting documents disclosed that most of the jobs performed by these JOs are similar or duplications, with the job descriptions mostly for clerical and utility works.
Delays in the payment of wages of Job Order personnel were noted in CY 2024, raising concerns on organizational efficiency, the audit showed.
“The above scenario does not speak well of the agency’s human resource management practices. This has even caught the attention of the print and broadcast media for some time and yet the concern remained unresolved,” it added.
Management could have minimized the delay had there been guidelines in the hiring/rehiring of JOs, the COA said.
P352-M in time deposits
On the other hand, yearly audit found out that cash totaling ₱352,930,155.73 were placed by the provincial government in two local banks as time deposits.
The amount could have been used to finance or augment funds for programs and projects of the provincial government or pre-terminate existing loans, the Commission said.
It particularly underscored that interest expenses paid by the agency for bank loans are higher compared to the interest income earned from time deposits, it stated, an indication of poor financial management.
Under Section 21 of COA Circular No. 92-382, 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.
Section 22 of the same circular defines idle funds as 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.
The audit of the PLGU’s cash in banks as of December 31, 2024 revealed that it has eight (8) Time Deposit accounts with two local banks totaling ₱352,930,155.73.
Based on previous financial statements, the placement of these TDs has been practiced by the LGU for a long time, with the LGU earning interest income from these deposits.
The COA team, however, observed that loans were acquired by the LGU from 2021 to 2024 to finance programs and projects despite the existence of idle funds.
It said that as per consolidated financial statements, the total domestic loans payable of the LGU amounted to ₱126,226,176.95, with the placements in the TDs more than enough to cover the loans at the end of 2024.
Likewise, comparison of the income from TD placements and the interest expense paid disclosed that for CY 2024, the interest expense incurred exceeded the income earned by ₱5.267 million, the government watchdog stressed.
While the LGU is allowed to place its idle funds in time deposits as per Section 21 of COA Circular 92-382, sound financial management would entail a regular review of the results of past actions against the desired results, the report said.
This would require the participation of the Local Finance Committee (LFC) responsible for financial oversight of the province particularly the revenues and its applications pursuant to Section 316 of RA 7160 or the Local Government Code of 1991.
“(P)lacement of cash in time deposits caused the agency to incur higher costs by acquiring bank loans instead of using the funds for programs and projects in the annual budget or through a supplemental budget,” the audit report maintained, adding that as per bank confirmation, the time deposits were dormant as of the end of 2024.
(to be continued)