COA flags P187.9-M Marinduque loans

In 2015, the provincial government of Marinduque entered into a loan agreement with the Development Bank of the Philippines in the amount of P 300-M to finance various infrastructure projects. It was met with vigorous opposition in the province that included cases filed by private citizens before the court and a complaint before the Ombudsman. 

In 2019, the newly-elected governor, Gov. Presbitero J. Velasco, Jr. reported during his first 100 days address that negotiations had been conducted with DBP to reduce the loan from P245-M to P187-M.

Manila Bulletin:

The Commission on Audit has flagged the availment by the Marinduque provincial government of loans amounting to P187.9 million despite maintaining 16 time deposit accounts reaching P293 million.

In its 2019 annual audit report for the province, CoA also questioned the decision to allocate public funds to open time deposit accounts, pointing out that there “lacked authorization from the Sangguniang Panlalawigan.”

Auditors said there are proofs showing that the provincial government, currently headed by Gov. Presbitero Velasco, has idle funds to set aside for deposit to high yielding bank transactions.

Despite the adverse audit observation, the provincial government still received commendations for various accomplishments.

 CoA cited the province for receiving the Seal of Good Financial Housekeeping in 2019 and for being recognized by the Department of Social Welfare and Development for “Best Person with Disabilities Worker” in Region 4-B  for the same year.

State auditors also lauded Marinduque for its submission of the “2019 year-end Trial Balances and accompanying Financial Statements on Feb. 11, 2020.”

Velasco, a retired associate justice of the Supreme Court, was also congratulated by CoA for his election as president of the League of Provinces of the Philippines.

Responding to the adverse CoA findings on the propriety of opening time deposit accounts, the provincial government said it is eager to “strictly and efficiently utilize the allocated funds to effectively deliver services to the public.”

Officials vowed to study the availment of loan financing at much lower interest than the 4.5 percent imposed by the Development Bank of the Philippines in order to pre-terminate its outstanding loans from the State-run bank.

In its audit observation, CoA said Marinduque availed of DBP loans amounting to P187,987,991.94 to finance various infrastructure projects in 2015, despite the fact that the province still has P293,005,347.42 kept in 16 time deposit accounts.

According to auditors, the provincial government incurred interest expenses and taxes amounting to P16,620,265.37 from the DBP borrowing but earns only P9,634,510.56 in net interest for its bank deposits.

All time deposits were transacted with the Land Bank of the Philippines branch in Boac, Mariinduque. 

CoA said the said this is an “indication of poor financial management” on the part of the province.

Moreover, the Time Deposit accounts maintained in the GF and Special Education Fund (SEF) totaling P295,005,347.42 lacked authorization from the Sangguniang Panlalawigan and proofs that these are idle funds contrary to Commission on Audit (CoA) Circular No. 92-382 dated July 3, 1992, as amended by CoA Circular No. 1993-382-A dated March 17, 1993, thus, the propriety of maintaining the Time Deposit accounts was not supported with legal basis,” COA said.

This article first appeared in Manila Bulletin. With minor edit.

Also read:

Kasong pang-Ombudsman laban sa mga tiwali sa Marinduque (July 13, 2016)

Sa P300-M: Liham ng Marinduque vice-gov sa gov