THE question whether the provincial government is a prodigal LGU surfaced when it fell short of adopting austerity measures in its expenditures. The Commission on Audit (COA) has said in its findings for the year ending December 31, 2013: “Management failed to exercise prudence and adopt the austerity measures under Administrative Order No. 103 dated August 31, 2004” issued by then President Glorai Macapagal-Arroyo.
COA indicated that the net income of the province took a nose-dive “by Php18,113,986.88 or 72.63% from P24,939,626.70 in 2012 to P6,825,639.82 in 2013.” This defeats the cost-reduction directive of the President and “depleting the LGUs net operating income at year end.” The presidential order mandates LGUs and other government agencies to institute cost-cutting measures “necessary in order to meet the country’s fiscal targets, maintain its macroeconomic stability and improve investor confidence and must undertake cost-cutting measures to reduce expenses.”
Among the expenditures not allowed or suspended by the AO include: all foreign travels; all locoa travels, unless urgently necessary and allowed; purchase of any type of motor vehicles, except ambulance and those required by the military and police; paid media advertisements, except those required in the issuance of agency guidelines, rules and regulations, the conduct of public bidding and the dissemination of important public announcement; conduct of training, seminars and workshops, except if funded by grants or if the cost may be recovered through exaction of fees; expansion of organizational units and workshops, except those following “scrap and build” policy or matched by the deactivation of existing units/position of the same costs; conduct of celebrations and cultural or sports activities not related to the core function of the agency, except athletic competitions conducted by public schools or SUCs’ and donations and contributions, grants and gifts, except if said activities are undertaken pursuant to the mandate of the donor agency, COA pointed out.
COA also pointed out that the presidential directive on austerity measure, at least ten (10%) percent should be saved from: services of consultants, technical assistants, contractual and casual employees; and consumption of fuel, water, office supplies, electricity and other facilities. “For this purpose, agencies are hereby authorized to install and use energy-efficient lights and fixtures and optimize the utilization of internet facilities especially for long distance communications.”
The provincial government referred to as management in COA report cited as justification of its expenditures the earthquake, wherein “repair/closure of bridge used by tourists in going to the tourism complex” caused the increase of the maintenance and other operating expenses (MOOE).” It said it is committed to enforce austerity measures in MOOE “so that savings can still be used in other priority projects.”
COA showed comparative income data of the province. The province incurred a decrease by Php11,624,307.60 or 11.75% of its income in 2013, which had only Php87,302,843.28, lower than PhP98,927,150.88 in 2012.
Its total operating expenses had increase by Php5,977,718.15 in 2013, which had Php77,564,185.92, higher than Php71,586,467.77 in 2012, COA said.
It said that the decrease in the income and increase of expenses contributed to the reduced income “by Php18,113,986.88 or 72.63% from P24,939,626.70 in 2012 to P6,825,639.82 in 2013.”
“The austerity measures required in AO No 103 was not strictly observed by the LGU rather it incurred 101.70% more of its other subsidies and 8.35% of MOOE items over the CY 2012 expenses thus, defeating the purpose of the said administrative order,” COA said.
COA strongly recommended that provincial government strictly comply with the AO to be able to reduce MOOE by ten percent and to increase the LGU’s net operating income. (rvo)