5.19 The CPDO affirmed the intention of the program, which is to provide financial
assistance to NGOs/POs. The City Mayor commented that they only practiced the
scheme to give the farmers or cooperatives a sense of responsibility. However,
Management agreed to implement the audit team's recommendations.
Actual cash backup for current and continuing appropriations of the 20 percent DF cannot
be assured due to the non-maintenance of a separate bank account for the fund –
₱244,914,818.32
6. Management did not maintain a separate bank account for its 20 percent
Development Fund (DF) special account as required under Sections 310 and 313
of RA No. 7160, making it difficult to determine, in a timely manner, the
availability of actual cash backup of the unutilized balance of ₱244,914,818.32 as
of December 31, 2024, which consists of current and continuing appropriations for
the implementation of development projects.
6.1 Section 2 of PD 1445 emphasizes that all government resources shall be managed,
expended, or utilized in accordance with laws and regulations, and shall be
safeguarded against loss or illegal or improper disposition. This responsibility rests
directly with the head of the government agency concerned.
6.2 To ensure proper management and administration of funds, Section 310 of RA No.
7160 mandates the “Separation of Books and Depository Accounts”, wherein local
accountants and treasurers are required to maintain separate books and depository
accounts, respectively, for each fund in their custody. In relation thereto, Section
313 of the same RA enumerates the “Special Accounts to be Maintained in the
General Fund,” which includes the following:
6.2.1 Public utilities and other economic enterprises;
6.2.2 Loans, interests, bond issues, and other contributions for specific purposes;
and
6.2.3 Development projects funded from the share of the local government unit
concerned in the internal revenue allotment and such other special accounts
which may be created by law or ordinance.
6.3 Effectively managing government funds involves ensuring that a particular fund is
used only for its intended purpose and monitoring the actual status of cash
availability. Further, it also involves making sure that each project programmed
under the fund is backed up with actual cash.
6.4 Establishing and maintaining a separate bank account ensures the safeguarding of
funds. The receipts, transfers, and expenditures associated with these special
accounts will be appropriately addressed and recorded therein.
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