Municipality of Guiuan, Eastern Samar. Facebook 

MANILA--The local government of Guiuan, Eastern Samar has denied using any discretionary fund in its 2023 Extraordinary and Miscellaneous Expenses (EME). 

The office of Mayor Annaliza Gonzales-Kwan released this statement in light of reports that the Commission on Audit (COA) flagged Guiuan’s alleged overspending on EME.

COA flags Guiuan town for spending millions despite P26,000 discretionary fund limit

According to the agency’s Annual Audit Report, Guiuan spent P6.56 million when the cap was only P26,465. It said EME is formerly known as discretionary funds.   

The LGU explained, however, that “the amounts appropriated and spent under the 2023 Budget were not intended as discretionary fund.” 

“LGU-Guiuan under the administration of Mayor Annaliza Gonzales-Kwan, in fact, has never appropriated any discretionary fund in its budget,” the statement said.                                     

“Unlike the expenses under the discretionary fund which are supported by mere certifications, all the expenses made under the EME, i.e., trainings, seminars and catering services, culture and sports were supported by receipts and went through the stringent procurement process,” it added.   

The LGU said its budget was approved by members of the Sangguniang Bayan. 

"According to Republic Act 7160 or the Local Government Code of 1991, “the annual appropriations for discretionary purposes of the local chief executive shall not exceed two percent (2%) of the actual receipts derived from basic real property tax in the next preceding calendar year." 

Since Guiuan’s 2021 Real Property Tax was P1.32 million, the ceiling for its 2023 EME was set at P26,465. 

The Mayor’s office admitted that an error happened since the excess appropriation was supposed to be under the Maintenance and Other Operating Expenses (MOOE) but was put under EME. 

This was acknowledged in the COA report which said: “the Municipal Accountant explained that the Municipality committed an honest error in assuming that the EME account was a misnomer for the Other Maintenance and Other Operating Expenses account, hence the considerable amount of appropriations for EME that is included in the approved budget of the Municipality.” 

In order to comply with the COA findings, the LGU has started realigning the budget from the EME account to the MOOE.