The Commission on Audit (COA) has questioned Lapu-Lapu City’s release of P3.05 million in financial assistance to 12 barangays under its Garbo sa Lapu-Lapu 2025 program after the checks were issued in the names of individual barangay and Sangguniang Kabataan officials instead of the intended recipients.
In its 2025 audit observations, COA said the arrangement did not comply with Section 93 of Presidential Decree No. 1445, which requires government payments to go directly to the creditor entitled to receive them or to a disbursing officer authorized to handle the funds.
Auditors warned that issuing checks to individual officials instead of the barangays could weaken internal controls, complicate fund tracking and expose public money to possible misappropriation.
The financial assistance covered Buaya, Looc, Poblacion, Marigondon, Babag, Calawisan, Pusok, Canjulao, Gun-ob, Agus, Basak and Sabang. The city issued the checks on Nov. 13 and 18, 2025.
Sabang received P300,000, while each of the other 11 barangays was allocated P250,000, bringing the total assistance to P3.05 million.
The checks for Buaya, Looc, Poblacion, Marigondon, Babag, Calawisan, Pusok, Canjulao and Gun-ob were issued in the names of their respective punong barangays. The check for Agus was issued to a barangay kagawad, while the assistance for Sabang was placed under the name of its Sangguniang Kabataan chairperson.
COA noted that the named individuals had to intervene before the proceeds could be deposited into the respective barangay accounts. This, auditors said, weakened accountability over fund transfers and made it more difficult to establish whether the assistance reached its intended beneficiaries and was properly used.
The Office of the City Accountant required the payees to submit liquidation documents for the amounts they received. However, COA said liquidation requirements alone did not replace the preventive controls prescribed under Section 93 of PD No. 1445.
In a letter dated March 19, 2026, the City Treasurer explained that the office understood the event’s participating contingent to consist of a cluster of two or more barangays.
Under this arrangement, the Tourism Office prepared the payroll or voucher in the name of the contingent representative, who acted as the claimant of the subsidy, rather than identifying a specific barangay as the payee.
The City Treasurer committed to strengthening the city’s existing controls.
COA acknowledged the explanation but maintained that the barangays remained the ultimate beneficiaries of the financial assistance, regardless of how the participating groups were organized for the event.
The audit team recommended that the city issue future assistance directly to the intended barangays or their official accounts to improve accountability, maintain internal controls and ensure the traceability of public funds.
“Accordingly, the disbursement process should be structured in a manner consistent with Section 93 of PD No. 1445 by ensuring that payments are made directly to the entitled recipients or through duly authorized disbursing officers, thereby maintaining adequate accountability, transparency, and audit traceability over public funds,” the state auditors noted.
Photo courtesy of Wikipedia
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