12.16 Moreover, review of the Registry of Appropriations, Allotments, and
Obligations (RAAO) reveals that the allotment for this project was classified
under Capital Outlay. However, the actual disbursement covered the
procurement of service wires for distribution, which are considered inventory
items rather than capital assets.
12.17 Thus, the procurement of service wires should not have been charged against
the Capital Outlay appropriation without prior reclassification and Sanggunian
authorization.
12.18 Furthermore, past practices do not serve as legal justification for the current
issue if they are inconsistent with statutory requirements. Each appropriation
must be assessed independently to ensure compliance with existing laws and
regulations.
Unliquidated Funds of ₱7.4 million and Violation of Separation of Powers
13. The propriety of the transfer of funds to the Philippine Councilor’s League (PCL)
amounting to ₱7,400,000.00 is questionable because (a) it was approved for
payment despite an outstanding unliquidated fund transfer of ₽12,019,725.32,
contrary to Section 3.0 of COA Circular No. 2012-001 dated June 14, 2012, and
(b) the fund was intended for the implementation of programs and projects under
the responsibility of the executive, thereby violating the separation of powers
principle.
13.1 Sections 508 and 509 of RA No. 7160, also known as “The Local Government
Code of the Philippines,” provide that elective local officials of local
government units have the right to form their own leagues or federations whose
Constitution and by-laws must always conform with the provisions of the
Philippine Constitution and existing laws.
13.2 Further, Section 510 of the Act states that the leagues and federations may derive
their funds from the contributions of individual league or federation members
or from fund-raising projects or activities. The local government unit concerned
may appropriate funds to support the leagues or federation organized subject to
the availability of funds.
13.3 On December 29, 2023, the Provincial Government entered into a
Memorandum of Agreement with the Philippine Councilors League (PCL)-
Negros Oriental Chapter for the transfer of Provincial funds of ₱400,000.00 to
support various programs, activities, and the regular operations of the PCL.
be incurred or the contract to be entered into. Should the appropriation ordinance, for instance, already contain in sufficient detail the
project and cost of a capital outlay such that all the local chief executive needs to do after undergoing the requisite public bidding is to
execute the contract, no further authorization is required, the appropriation ordinance already being sufficient.
On the other hand, should the appropriation ordinance describe the projects in generic terms such as ‘infrastructure projects,’
“inter-Municipal waterworks, drainage, and sewerage, flood control, and irrigation system projects,’ ‘reclamation projects’ or
‘roads and bridges,’ there is an obvious need for a covering contract for every specific project that in turn requires approva l by
the sanggunian.
Specific sanggunian approval may also be required for the purchase of goods and services which are neither specified in the appropriation
ordinance nor encompassed with the regular personal services and maintenance operating expenses.” (Emphasis supplied)
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