COA FLAGS MASSIVE CITY HALL ACCOUNTING ABNORMALITIES UNDER EX MAYOR BABA YAP

COA Finds P35.8 Million in Unrecorded Gasoline Expenses During Ex City Mayor Baba Yap Administration

TAGBILARAN CITY — A Commission on Audit (COA) report has uncovered massive accounting abnormalities involving over P35.8 million in gasoline and supplies inventories during the administration of former Tagbilaran City Mayor Baba Yap.

According to the audit findings, city officials failed to properly record the issuance of P6,555,525.49 in gasoline and P29,247,717.43 in other supplies inventories as of December 31, 2013.

The unrecorded transactions led to overstated inventory and equity accounts, in direct violation of Section 123 of the Manual on the New Government Accounting System (NGAS) for Local Government Units.

Auditors discovered that while these inventories had been “fully utilized,” the issuances were never documented in official books.

“This represents a shocking breach of financial controls,” said a government accounting specialist familiar with LGU audits but not authorized to speak publicly about the case. “When inventory worth millions is used without proper documentation, it creates an environment where misappropriation can easily occur.”

The audit also revealed that the Tagbilaran City Government had not submitted a Report of the Physical Count of Inventories (RPCI) since 2010, violating Section 124 of the NGAS manual.

The section explicitly requires local chief executives to conduct physical inventory counts semiannually and submit reports by July 31 and January 31 each year.

“Without conducting physical inventory of supplies and rendering RPCI as required earlier, the integrity of property custodian could not be ascertained,” the COA report states.

The failure to conduct and document physical inventories for over three years raised serious questions about accountability and transparency. Inventory control systems are designed to prevent corruption, theft, misuse, and waste of government resources.

Procurement and inventory management experts point out that gasoline, in particular, requires strict monitoring due to its high susceptibility to unauthorized use or diversion.

“The absence of proper documentation makes it impossible to verify whether these supplies were used for legitimate government purposes,” noted a public finance expert from the University of the Philippines. “Without records showing who received what supplies and for what purpose, there’s simply no accountability.”