9.19 Hence, the preparation of feasibility studies and cost-benefit analyses is
indispensable. These documents would provide a clear understanding of the
project’s potential impact and justify the commitment of such a significant
portion of the 20% Development Fund for principal loan amortizations over
several years. Without this assessment, the prolonged allocation of funds for
debt repayment could constrain the province’s ability to implement future
developmental projects. Furthermore, the incurrence of substantial incidental
expenses could adversely affect the delivery of basic services, which may hinder
the realization of its vision as a frontliner in public service.
9.20 We recommended and Management agreed to conduct in-depth analyses
and a comprehensive feasibility study, including assessments of financial
viability, socio-economic feasibility and management feasibility, to evaluate
compliance with the purpose and intent of Section 296(b) of RA No. 7160
and Section 2 of PD No. 1445. Additionally, the study must address the
viability and necessity of the project, the financial sustainability of the loan
repayment, and the overall impact on the Provincial Government’s
finances.
9.21 Management submitted feasibility studies for the Medical City and District
Hospitals on February 6, 2025, as part of their reply. These submissions are still
subject to examination and evaluation by the Audit Team.
Socio-Civic Fund Lacks Proper Beneficiary Validation
10. The ₱49,870,000.00 Socio-Civic Projects Fund (SPCF) from the Office of the
President for farmers, fisherfolk, and other marginalized families severely affected
by the El Niño may not have reached its intended beneficiaries, as the supporting
documents do not show that the Department of Agriculture (DA) and Department
of Social Welfare and Development (DSWD) was involved in identifying the
beneficiaries, while the supporting papers submitted pertained to the “Ayuda sa
Kapos ang Kita Program” (AKAP), a separate DSWD initiative to low-income
families and individuals facing economic hardships due to inflation, which may
render the disbursements illegal.
10.1 Section 4(3) of PD No. 1445 provides that Trust Funds must be available and
may only be utilized for the specific purpose for which the trust was established
or the funds were received.
10.2 Similarly, Section 94 of the NGAS Manual, Volume I, states that a trust fund
consists of private and public monies that have officially come into the
possession of the local government or a local government official acting as
trustee, agent, or administrator, or that have been received as a guarantee for the
fulfillment of an obligation. This fund shall only be used for the specific
purpose for which it was created or for which it came into the possession of
the local government unit.
10.3 On June 27, 2024, the Provincial Government received ₱50 million from the
Office of the President, acknowledged under Official Receipt (OR) No.
06059601. On July 1, 2024, the Sangguniang Panlalawigan authorized the
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