basic facilities and services. This would have prevented the need for the
realignment of certain projects throughout the year.
9.8 We recommended and the Municipal Engineer agreed to evaluate the
feasibility and closely monitor the implementation of the various PPAs
according to the approved development plan as required under Section 476
(4) of R.A. No. 7160. In addition, we recommended and Management agreed
to consider all possible limitations, including the availability of equipment,
during the planning stage.
No separate bank account for 20% DF - ₱36,807,717.53
10. Management does not maintain a separate bank account for its 20 percent
Development Fund (DF) special account as required under Sections 310 and 313
of Republic Act (RA) No. 7160, making it difficult to determine, in a timely
manner, the availability of actual cash backup of the unutilized balance of
₱261,520,856.29 as of December 31, 2024, which consists of current and continuing
appropriations for the implementation of development projects.
10.1 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:
10.1.1 Public utilities and other economic enterprises;
10.1.2 Loans, interests, bond issues, and other contributions for specific purposes;
and
10.1.3 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.
10.2 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.
10.3 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.
10.4 However, during our examination of the utilization of the 20 percent DF, which
included verifying the projects funded through the account and the corresponding
journal entries for each charge, we observed that the funds for the 20 percent DF
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