The province of Aurora had cash deficit of P127 million, which the Commission on Audit (COA) attributed to “poor financial management.”
The state auditors said the provincial government accumulated debts of P315.94 million by 2012.
The deficit reached P127.37 million by the end of that 2012.
Aurora’s General Fund and Trust Fund was a negative P87.52 million, while Trust Fund totalled negative P41.78 million.
Only the Special Education Fund remained strong at P1.93 million, leaving a total overdraft of P127.37 million.
Auditors said the public and social projects will suffer because of the financial crunch.
“The insufficiency of cash to support the province’s expenditures had an adverse effect in the delivery of public services, that is, most of the planned activities included in the appropriation were not performed, executed or delivered within reasonable time,” the audit team said.
In 2011, Aurora had a cash overdraft of P86 million in the General Fund, resulting in the payments of prior years’ liabilities in 2012.
“[Payments] were charged to the current year’s income or realized revenues. Thus, current year’s collections were mostly used to pay out prior years’ obligations,” COA reported.
The debts snowballed in 2012.
The auditors also found out that the province’s revenues were spent “mostly for administrative expenses.”
“Thus, [this]leaves minimal funds for the implementation of significant programs and projects,” COA noted.
Personal services amounted to P27.52 million or 56 percent of total revenues, 20 percent higher than the 45-percent limitation set by law.
They added that without a “concrete remedy” to mitigate the cash deficit, it might defeat a reliable budgeting system.
Auditors urged Aurora officials to adopt austerity measure to “improve cash position.”
The officials were also asked to iron out annual expenditures, spending ceiling for economic, social, and general services and proper allocation of expenditures.
The provincial capitol agreed “to exercise prudence in fiscal” considering that COA’s audit observation has already been raised in 2011, when Aurora “failed to provide a remedy or solution and the recurrence of similar situation.”
JOHN CONSTANTINE G. CORDON