13.5 We recommended and Management agreed to, henceforth, ensure that all
purchases are supported by the appropriate and complete documentation,
pursuant to PD No. 1445 and the Revised IRR of RA No. 9184, as amended
by RA 12009.
Meals and snacks during regular and administrative meetings - ₱1,164,842.50
14. The Municipal Government incurred costs for meals and snacks served during
regular and administrative meetings, budget and public hearings, social pension
payouts, courtesy calls, and similar events, totaling ₱1,164,842.50, and
inappropriately charged these costs to Other Supplies and Materials Expenses,
contrary to COA Circular No. 2012-003, dated October 29, 2012, leading to
unnecessary expenditures and excessive disbursements beyond the allowable limit
for discretionary spending.
14.1 In CY 2024, the Municipal Government of Basay incurred expenditures
amounting to ₱1,164,842.50 for meals and snacks served during various regular
and administrative meetings of officials and employees, as well as budget and
public hearings, social pension payouts, courtesy calls of Police officers and the
Philippine Army, assessments for Seal of Good Local Governance, Gender and
Development, among others. (See Appendix 3 for details)
14.2 However, these expenditures were inappropriately charged to the Other Supplies
and Materials Expenses account, instead of being classified under Extraordinary
and Miscellaneous Expenses (EME) or charged against the respective officials’
Representation Allowances, contrary to COA Circular No. 2012-003 and Section
325(h) of Republic Act (RA) No. 7160
14.3 Section 4.1 of COA Circular No. 2012-003 defines unnecessary expenditures as
those that do not meet the test of prudence or diligence expected of a good father
of a family. These are expenditures that are not essential to the effective delivery
of services and can be dispensed with without causing loss or damage to
government property or operations. The mission and thrusts of the agency
incurring the expenditures must be considered in determining whether an
expenditure is necessary or not.
14.4 Furthermore, Section 325(h) of RA No. 7160 imposes a limit on the annual
appropriations for discretionary funds of the Local Chief Executive, capping it at
two percent (2%) of the actual collections from basic real property taxes in the
preceding year. In CY 2023, the Municipality of Basay collected a total of
₱477,632.00 in real property taxes, making the allowable EME allocation for CY
2024 only ₱9,552.64. However, records reveal that the Municipal Government
appropriated ₱50,866.31 and disbursed ₱58,448.00 for EME, exceeding the
statutory limit by ₱48,895.36.
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