The Commission on Audit (COA) has found as "unauthorized" and "doubtful" the P42.1 million fees and charges imposed by the Cabanatuan City government in Nueva Ecija to its taxpayers in 2023 for lack of appropriate city ordinances.
In its 2023 annual audit report, COA said that Cabanatuan City has been doing the "unathorized" collection of fees and charges for the past years.
It said that the city government collected a total amount of P42,111,360.54 in 2023, which brought its accumulated sum of "doubtful" taxes to P63,917,043.18.
It noted that the biggest chunk of the taxes was claimed by the Manuel V. Gallego Cabanatuan City General Hospital (MVGCCGH) for its Laboratory/Pharmacy/Dialysis Fund, which was P30,704,524.61. The same hospital also claimed P9,152,981.60 for its Debit Credit Payment Method (DCPM).
It also said the Department of Public Works and Highways (DPWH) collected a huge amount as well for its Building Permit Fees with the amount of P16,135,700.72. Meanwhile, the Department of Social Welfare and Development (DSWD) collected several fees such as P808,617.22 for its Nutrition Fund, P568,214.88 for its SEA Recovery Fund, P263,938.50 for its Travel Clearance, and many more, it added..
At the same time, COA said the city's Local Civil Registry (LCR) got P1,030,951.54 for its Filing Fees, while the Environment Protection Division (EPD) collected P1,061,033.52 for Violations Using Plastic.
"The recording of these fees, granting that they were authorized, under the Due to LGUs account was improper, as they were not fund transfer as specified in the revised Chart of Accounts mentioned above," the COA noted in its AAR.
"Moreover, the inclusion of the MVGCCGH’s DCPM in the account was likewise erroneous as they were collections/fund transfer from National Government Agency (NGA) – the PhilHealth, therefore should have been taken up under Due to NGA account."
State auditors said that these deficiencies had been "long standing for three years," which meant that the city government did not address the issues that were flagged by the COA. In its past AARs, the COA recommended that the city's taxes should have prior authority from its legislative body through an ordinance, as provided in Sections 132 and 305(c) of the Local Government Code (LGC).
The audit team has maintained its earlier recommendations for the City Treasurer to discontinue the imposition of unauthorized fees and taxes, unless proven that it is supported by an ordinance enacted by the Sanggunian Panlungsod.
The COA likewise directed the City Accountant to revert the accumulated balance of P63,917,043.18 to the General Fund for inclusion in the annual budget/supplemental budget for proper appropriation. "We also reiterated our recommendation that responsible offices include in their budgets the regular expenditures which they used to charge in the aforementioned Trust Fund accounts," the COA said.