Cebu City’s non-remittance of deducted tax blamed on flawed process

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IT'S the system that’s flawed, not the people.

This was how Cebu City Mayor Nestor Archival Sr. responded to mounting concerns over the city government’s failure to remit over P36 million in employee contributions, as flagged in the Commission on Audit’s (COA) 2024 Annual Audit Report.

“I would not say nga dili sila kamao (they are not capable),” Archival said in an interview. “Ang ako lang natan-aw is the process. Naay mga tawo nga kamao, but the process is wrong — meaning to say, daghan kaayo nga mga backlog nga wala nasulod.”

He urged the public and fellow officials not to immediately fault City Hall personnel involved in payroll and remittances, saying many of them are competent but are constrained by outdated systems and poor procedures.

“It’s not easy to say right away nga dili kamao. Tan-awon nato ang process unsaon nato. Dugay naman ni sila. They’ve been there, but wala lang masulod ang [remittances] — murag nag ong-ong,” Archival said.

The Commission on Audit found that the unremitted employee deductions included P6 million in taxes withheld for the Bureau of Internal Revenue (BIR), P4.3 million in PhilHealth contributions, P2.3 million in Pag-IBIG Fund premiums and loan payments, and P24 million in Government Service Insurance System (GSIS) contributions and loan amortizations — P14 million of which dates as far back as 2006.

COA warned that non-compliance with remittance schedules could result in penalties, delayed benefits, and even suspensions of health or housing coverage for affected employees.

Councilor and Minority Floor Leader Sisinio Andales delivered a privileged speech, describing the situation as a betrayal of the city’s workforce.

“These figures are not just numbers, they represent broken promises,” Andales said. “These may delay healthcare, suspend housing loans, freeze insurance coverage, and compromise retirement benefits for many of the city hall employees who have served with utmost dedication and integrity.”

Andales urged the City Accounting Office and Human Resource Development Office (HRDO) to submit a full compliance report and timeline. The City Council approved a resolution supporting this request.

“Behind every unremitted peso is a public servant… who may now face delays in accessing medical treatment, securing a home, retiring with dignity,” he added.

City Hall offices cited multiple hurdles: dormant records, unmatched employee data, late submissions, and staff shortages.

The HRDO said reconciling payroll for separated and job order employees with incomplete documentation has proven difficult. The CAO cited “timing differences” and workload backlogs.

Archival said any solution must begin by overhauling internal systems, not by placing blame.

“Let’s look at how we can fix the process. That’s where the problem lies,” he said, adding that future actions will be grounded on fairness and objectivity.

COA recommended that Cebu City reconcile outdated records, hasten remittance compliance, and consider hiring additional accounting and payroll staff to prevent further lapses.

Failure to resolve the matter, the agency warned, could end up costing the city even more, both financially and in terms of employee morale.(TGP)