The municipality moved leftover disaster fund money meant for capital projects into a trust liability account, which is not allowed by COA rules. Part of this money should have stayed in the regular fund as a continuing appropriation to complete ongoing projects.

Why It Matters

Recommended Actions

• Ensure compliance with the provisions of RA No. 10121 to achieve a disaster-resilient community continuously
• (b) require the MA to make the necessary adjustments to correct the balance of the TL - LDRRMF as of year-end
• And (c) strengthen internal controls over the encoding and classification of expenses in financial reports by conducting regular reviews of financial reports, implementing validation procedures prior to report submission, and providing refresher training to personnel responsible for financial data entry to minimize the risk of similar errors in the future

Original Audit Finding Excerpt

"the erroneous transfer of the unutilized balance of Capital Outlay (CO) to Trust Liabilities (TL) – DRRMF contrary to Section 5.1.10 of COA Circular No. 2012-002 dated September 12, 2012"

Source Document