THE Commission on Audit (COA) has noticed that 55 projects of Cebu province worth P192 million did not have any sanction from the provincial council.
In the 2011 audit report on the Cradle of Christianity in Asia, state auditors noticed that there were 55 projects which lacked resolution from the provincial council, despite a 2008 Supreme Court ruling which requires a provincial chief to have the council issue a resolution first before a contract gets green light.
The audit team stated the province tapped different private companies for 55 contracts worth P192.82 million, all were charged to “lump sum appropriation.”
COA said that these projects violated an SC en banc decision which stated that unless provided in the Local Government Code, “no contract may be entered into by the local chief executive on behalf of the local government unit without prior authorization by the sanggunian concerned.”
The SC jurisprudence also said that projects worded broadly “need for a covering contract for every specific project that in turn requires approval by the sanggunian.”
Upon review Cebu’s 2010 and 2011 annual and supplemental budgets, the auditors said that the province couched the projects “in generic terms.”
The heftiest, worth P42.48 million, read as: “To payment of 49.64 percent work accomplishment, billing#2 for the supply of materials (inplaced) and other incidentals for the repair/improvement of provincial roads, Cebu province (District 2-West).”
Nature of the programs, which were taken against the 20-percent development fund, involved electrification projects, road construction and repair, water supply, housing programs, hospital construction, and heritage sites restoration, all of which were with “partial or full payment” in 2011.
COA said that even if an annual procurement plan supported the development fund budget, some items were still in generic terms and the budgeted amounts in lump sum, “thus, necessitating a [council]resolution” that would authorize the governor to enter into a contract.
Cebu officials replied that the COA misinterpreted the Supreme Court decision. They said that the Court ruling decided on a reenacted budget, which was not the case for the 55 projects.
In the ruling, the Court held that its decision should not be misapplied to proscribe to all or any contracts that the local chief executive entered into without the council’s authorization.
“In cases, for instance where the local government unit operates under an annual as opposed to a reenacted budget, it should be acknowledged that the appropriation passed by the sanggunian may validly serve as the authorization,” the Court decision read.
The provincial capitol said that the appropriation ordinance served as the provincial council’s go-ahead for then governor and now Representative-elect Gwendolyn Garcia to sign the 55 contracts, which made them “duly passed and approved” by the council.
The auditee said that COA’s basis on a portion of the SC decision “is a mere ‘obiter dictum’ [passing comment]and not controlling.”
“[Absent] then of any categorical ruling from the Supreme Court, the province of Cebu maintains that there is no need for such [council]authority as appropriation ordinances for the projects already constitute prior authorization,” the reply read.
By way of rejoinder, the audit team stood pat on their findings.
“Lump sum appropriations will obviously require specific sanggunian resolutions prior to its prosecution following the Local Government Code and the aforecited jurisprudence,” auditors said.
They asked the provincial capitol to follow the law on the necessity of a council resolution before the governor enters into project contracts should these are not described in sufficient detail in the appropriation ordinance.