“To the Court’s mind, the entire process involving the distribution and
release of the LGSEF is constitutionally impermissible. The LGSEF is
part of the IRA or just share of the LGUs in the national taxes. To
subject its distribution and release to the vagaries of the implementing
rules and regulations, including the guidelines and mechanisms
unilaterally prescribed by the Oversight Committee from time to time,
as sanctioned by the assailed provisos in the GAAs of 1999, 2000, and
2001 and the OCD resolutions, makes the release not automatic, a
flagrant violation of the constitutional and statutory mandate that the
just share of the LGUs shall be automatically released to them. The
LGUs are, thus, placed at the mercy of the Oversight Committee.”
(underscoring supplied)
15.7 Given this ruling, the LGSEF should have been recorded under the General Fund
and made available for use by the LGU, instead of being withheld or restricted and
subjected to the guidelines prescribed by the Oversight Committee, which is
unconstitutional. Therefore, the non-utilization of the LGSEF, being part of the
IRA, deprived the constituents of the benefits that would have been gained had the
amount been used for additional projects.
15.8 We recommended and Management agreed to revert the balance of the
LGSEF from the Due to NGAs to the General Fund and utilize the amount in
accordance with budgetary requirements and general limitations under
Sections 324 and 325, respectively, of R.A. No. 7160, and other existing laws,
rules, and regulations.
Collections not deposited intact at the end of the business day or on the next banking day
16. Collections totaling ₱97,976.04 for the Special Education Fund and ₱11,304.90 for
the General Fund were not deposited intact at the end of each business day or on the
next banking day as required under Section 32 of the New Government Accounting
System (NGAS) Manual, Volume I for Local Government Units (LGUs), thereby
exposing government funds to the risk of loss or misappropriation due to weak
internal controls over cash handling.
16.1 Section 32 of the NGAS Manual, Volume I, for LGUs, requires that the
Treasurer/Cashier deposits intact all collections as well as all collections turned
over to him by the collectors/tellers with the authorized depository bank daily or
not later than the next banking day. He must record all deposits made in the
cashbook and prepare the Report of Collections and Deposits (RCD).
16.2 Our review of the Municipality’s year-end transactions disclosed that collections
on December 27, 2024, totaling ₱97,976.04 for the Special Education Fund (SEF)
and ₱11,304.90 for the General Fund (GF) were not deposited on the next banking
day, as shown on the next page:
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