AOM No.: I l-001
Date: January 14,2011
AUDIT OBSERVATION MEMORANDUM (AOM)
lor
Hon. Jed Patrick E. Mabilog
City Mayor
City of Iloilo
Attentron. Ms. Ninda D. Atrnado
City Budget Officer
Ms. Michelle O. Lopez
City Accoun$ant
We have auolted the account Representatron Expenses (783) and observed that out of
tlre total expenditures of P3,822,803.18 for Fiscal Year 2010, *3,617,428.69 or 94 62% did
not fall within the purview of official meetings/confbrences/entertainments contrary to the
Updated Description of Accounts under the New Government Accounting System per COA
Circular No. ?004-008, and Section 336 of Republic Act No. 7160 thus, resulting in
inappropliate use of the lirnd and overstatement of Representation Expenses in the financjal
statements.
A total of P4,094,000.00 was appropriated for Representation Expenses under the
LG'LI's annual and supplemental budgets fbr Fiscal Year 2010. Based on the Updated
Description of Accounts under the New Government Accor"urting System per COA Circular
No. 2004-008 dated September 20, 2008, Representation Expenses should be for official
meetings/conferences/enterlainments. As provided in Sec. 336 of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991, flrnds should be available
exclusively for the purpose for which they have been appropriated. On the contrary, the
arnount provided for Representation Expenses totaling P3,617.428.69 was used by the LGU
management fbr activities rvhich are inconsistent with the intended purpose, summarized as
lollorvs:
t\.
\\'t
\
\
I
7
/
Amount
Particulars
i.
2,
3.
4.
5.
6.
Floldmg actlvltles, programs and events
Procurettrent of supplies and services
Payrnent of traveling expenses
pr_ricl.rase of flowers for the bereaved family of the dead
schools,
Grant olfinancial assistance to the barangays, government
and private individr-rals and organizations
Paytnent of registration fees
Pui'chase of birthday cakes for the senior citizens
.
8. Purchase oflechon
9. Sponsorships extended to government and private organizations
7
10. Others
P
939"056 65
578,834.48
566,857.67
531,900 00
394,766.00
109,100.00
106,690.00
78,000.00
68.945.00
243,278.89
P3,617.428 69
Total
rrom tne tbregorng tnat Some expenoirures which should have
Extra Ordinary Expenses
been classified as'Or5er \{aintenanc. und Operating Expenses,
Expenses were disbursed
(Discretionary Expenses). Traveling Expenses and Office Supplies
Based on the.review of the
as Representation Expenses (Please see Annex A for details).
of appropriations for the
buclget registries, this ma1 have been done due to insulliciency
othei accouuts.
tt couid
Oe gleaneo
expenses within
We recommencl that the LGU management limrt its representatron
spending is intended for
the purview of rules goveruing such and .*u." that government
public pllrposes.
measures
we firlher recommencl that the city Budget offrcer lnstitute tighter control
respective
the
against
ro asceftain that governrnerrt obligations o.. "hutg"d appropriately
Duoget> :'o; proper and correct reporting
(i 5)
we have Your comments on the tbregoing audit observation within fifteen
calendar days from receipt hereot.
N'[ay
OFELIA T. DEMEGILLO
Statd Auditor IV
Audit tleam Leader
? g^
W,*,q*L
plnon E. LIM
lunnn
State Auditor V
Supervising Auditor