COA lists 19 audit violations of Legazpi water firm

LEGAZPI CITY—A GOVERNment-owned water utility firm here is under public scrutiny after the Commission on Audit reported that it had violated audit rules and guidelines in 2006 involving almost P11 million of its funds.

The COA report said the Legazpi City Water District (LCWD), the capital’s water supplier for 27 years, had committed 19 audit violations, including illegal disbursement of corporate funds, understatement of loans payable, misclassification of expenses, and unrecognized tax and interest liabilities.

The report was done in October 2007 and was released in the wake of the LCWD’s implementation of a 47-percent water rate increase.

The increase was questioned for alleged bidding anomalies and lack of consultation before the LCWD sealed a deal with Philippine Hydro Inc., which will run a P300-million bulk water supply project and sell water to the LCWD for P13.50 per cubic meter.

Raul Chua, LCWD general manager, said the violations were only procedural in nature and could be rectified.

“None of the violations pertained to malversation of funds. We did not rob any amount from the corporation. But we have been victims of trial by publicity even if the COA findings cannot yet even be considered final,” Chua said.

One violation cited by the COA was the LCWD’s failure to comply with requirements under Presidential Decree No. 198 in the repair and rehabilitation of the Rapu-Rapu Water Supply System, resulting in the illegal disbursement of corporate funds worth P1.3 million.

The report also noted that after a COA inspection on May 23, 2007, a P389,900 Honda Civic described in the LCWD’s books as “In Service” and “Fully Depreciated” could not be found.

Based on previous audits, it said, the Honda Civic was under Chua’s car plan.

Contesting the COA claim that the car plan was not authorized by the LCWD’s board, Chua showed the Inquirer an authenticated copy of a board resolution showing that he was legally “entitled to a car plan.”

“It is for this reason that we are filing an appeal to the COA for its wrong observations, though we will readily accept the correct ones,” he said.

Chua said most items in the report were nothing but “errors,” like misclassification of expenses, which they were already correcting based on the COA recommendations. Ephraim Aguilar, Inquirer Southern Luzon