MANILA, Philippines (UPDATED) – The Nueva Ecija provincial government is unlikely to meet its expenses and obligations after it incurred a projected cash deficit of around P139.99 million, state auditors warned in its Observations and Findings in the 2015 Annual Audit Report (AAR) of the Province of Nueva Ecija on Tuesday, June 7.
Nueva Ecija had P434.76 million in available cash during the budget year but it had incurred P177.226 million in trust liabilities, including remittances of taxes withheld to the Bureau of Internal Revenue (BIR), and employee contributions to the Government Service Insurance System (GSIS), Pag-IBIG, and PhilHealth, the Commission on Audit said.
Even with a P257.531 million cash balance, the Nueva Ecija provincial government had P393.866 million in additional obligations – P202.533 million in accounts payable, P133.593 million in unobligated calamity funds, and P57.74 million in unused Development Fund balance – as well as P3.656 million in deferred credit.
“While the province had an excess balance of cash over trust and inter/intra-agency liability, the amount…was not sufficient to cover for payments of accounts payable as of yearend…and obligations that may be incurred from continuing appropriations/unexpended balances as of the 20% Development and Calamity Funds totaling P393,865,891.85,” COA said.
State auditors also told the provincial government the cash deficit forecast meant its trust fund had been used for purposes it was not meant for, in violation of Section 305 (e) of the Local Government Code of 1991, which states trust funds can only be spent for their intended specific purpose.
COA also issued adverse findings on the failure of the province to remit to other local government units their share of the taxes on sand, gravel and other resources totaling P20.966 million.
The report also cited P35.616 million in unremitted government personnel contributions to the GSIS, partly incurred during the previous administration. The unremitted contributions may prevent provincial employees from acquiring loans and other benefits.
The province was also warned about its failure to turn over withholding taxes to the BIR as Nueva Ecija has P63.405 million in unpaid dues as of year end. – Rappler.com
(Editor’s Note: The cash-deficit mentioned above is a projected cash deficit. We have edited the article accordingly.)