9.9 Management explained that these funds were placed into time deposit accounts
while they are not yet implemented to earn higher interest compared to ordinary
savings accounts. As of December 31, 2024, however, these time deposit accounts
earned just a total of ₱3,481,504.17, averaging only 0.90% of the total amount
deposited, as shown below:
Bank Account Number Term Amount Total Interest
Development Bank of the 0740-026xxx-xxx Semi-annually ₱ 163,516,759.51 ₱ 1,966,093.68
Philippines
Development Bank of the 0740-026xxx-xxx Quarterly 7,049,392.48 5,723.67
Philippines
Land Bank of the Philippines 1181-06xx-xx Monthly 49,815,483.34 211,834.11
Land Bank of the Philippines 1181-07xx-xx Semi-annually 164,747,062.62 1,297,852.71
Total ₱ 385,128,697.95 ₱ 3,481,504.17
9.10 The Audit Team recognizes the initiative and resourcefulness of the City
Government in investing its unutilized capital appropriations in time deposit
accounts to generate higher interest income and therefore, higher revenue.
However, the specific guidelines for bank depository accounts under the Local
Government Code of 1991, as clarified in COA Circular No. 92-382, require that
only those considered as idle funds can be freely invested in government
securities or higher yield time deposits.
9.11 In view of the foregoing, timely implementation of programmed projects and
activities of which funds were placed into different time deposit accounts may
be hindered or delayed due to time restrictions, as indicated in the terms of these
time deposits. If funds are not promptly accessible, service delivery and
infrastructure development may be disrupted.
9.12 We recommended that Management transfer the funds from the time
deposit accounts to the City’s regular savings or current account upon
maturity to ensure cash availability when required for project
implementation in compliance with COA Circular No. 92-382.
9.13 We further recommended that Management review the funds intended for
capital outlay projects that are placed in time deposit accounts and assess
whether these projects are still subject to implementation or not. If not, such
funds shall be reverted to the unappropriated surplus of the General Fund
and realigned to appropriate capital expenditures.
9.14 Management commented that they would still evaluate the funds. The City
Mayor added that, given their current income, they plan to save on financial
expenses by paying off loans earlier.
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