Cebu City’s P11-billion expenditures flagged

Local

THE 2024 financial records in Cebu City have come under scrutiny.

This after state auditors issued a qualified opinion, flagging over P11 billion in misstated expenditures, incomplete inventory checks, and major reconciliation gaps across key accounts.

In its 2024 Independent Auditor’s Report, the Commission on Audit (COA) said multiple exceptions prevented the city government from securing an unqualified or “clean” audit opinion, citing deficiencies that undermine transparency, accountability, and compliance with public sector accounting standards.

COA’s top finding showed that ₱11.18 billion in reported expenditures were based on obligated amounts rather than actual disbursements —a misstatement auditors said affected the reliability of the city’s budget performance report.

The agency also questioned the accuracy of the city’s asset records, noting that ₱4.25 billion worth of inventories could not be validated due to incomplete physical counts. Property, Plant and Equipment (PPE) accounts were similarly unreliable, with auditors flagging an unreconciled ₱1.46-billion difference between the City Accounting Office and the Department of General Services.

COA also noted that the city wrote off ₱1.34 billion in PPE balances without complying with national asset-cleansing guidelines.

Unrecorded income and assets also surfaced in the audit, including ₱340.3 million in advance Real Property Tax collections and ₱26 million in donated equipment, among them patrol motorcycles and working dogs, that were not reflected in the city’s books.

COA further cited the absence of provisions for three court cases totaling ₱13 million in potential liabilities.

Cash records reflected additional discrepancies, including negative balances in the accounts of four accountable officials and a ₱4.82-million gap between bank and book balances affecting the reported ₱3.66-billion cash-in-bank account.

Beyond accounting issues, COA flagged operational inefficiencies, including the city’s use of only 7.4 percent of its ₱3.92-billion Local Development Fund in 2024. Auditors warned that the poor utilization delayed priority projects and hindered development goals.

Waste management remained another major concern, with Cebu City spending ₱407.7 million on hauling and tipping fees last year. COA linked the ballooning cost to the failure to fully operate Materials Recovery Facilities and the city’s weak enforcement of waste-segregation laws.

State auditors also noted inconsistent compliance with laws requiring daily deposits of collections from 2020 to 2024, exposing public funds to risks of loss or misuse.

As of end-2024, the city had ₱423.8 million in audit suspensions and ₱833 million in disallowances still awaiting settlement. Of 174 prior audit recommendations, only 41 were fully implemented.

Despite these findings, COA said the city’s financial statements “present fairly, in all material respects” its 2024 financial position, except for the issues listed under the Bases for Qualified Opinion.

Former Mayor Raymond Alvin Garcia has yet to release an official statement on the report.(TGP)