Auditors to city hall: Don’t get garbage collection expenses from 20% dev’t fund


LIPA CITY—The city’s solid waste management program landed again in the audit reports of the Commission on Audit for the second straight calendar year.

If the 2015 audit report saw the COA warn the city government to follow Republic Act 9184 (Ecological Solid Waste Management Act) or face the consequences, in 2016 two audit observations see the role of the city’s garbage collection and hauling.

One of the auditor’s observations related to garbage was that some P29,233,774.34 intended for “garbage hauling and disposal” was charged to the city’s 20 Percent Development Fund. This fund was mandated by the Department of the Interior and Local Government (DILG) for local government units to use for socio-economic development and environmental management programs.

Garbage haulers from a barangay transfer trash from the barangay's own garbage truck to that of RC Bella Waste Management and Disposal Services. (photo by Marlon Alexander Luistro / The Filipino Connection)

Garbage haulers from a barangay transfer trash from the barangay’s own garbage truck to that of RC Bella Waste Management and Disposal Services. (photo by Marlon Alexander Luistro / The Filipino Connection)

DILG’s Joint Memorandum Circular 2011-1 wrote that the following environmental management programs are covered: reforestation and urban greening; construction of sanitary landfills, materials recovery facilities and purchase of garbage trucks and related equipment; flood and soil erosion control projects; and other environmental management projects that promote air and water quality plus the productivity of the coastal habitat, land and forest land.

Out of the P137,865,974.61 total of the 20% Development Fund allocation for calendar year 2016, garbage hauling and disposal was worth P29,233,774.34. Construction materials for road improvements in various barangays was worth P7,980,682.60. Wages of job order employees was worth P927,928.55. Tarpaulins produced were worth P27,850, deodorizer and sanitizer purchased were worth some P315,000, and garden tools purchased were some P37,750.

All these expenses, COA said, “did not conform to the general policy” of DILG’s JMC 2011-1. The said JMC also disallowed expense items such as administrative expenses (cash gifts or bonuses and food allowances for example); salaries, wages or overtime pay; traveling expenses and purchases of furniture, equipment, appliances, and vehicles.

As for the cost for garbage hauling and disposal culled from the 20 Percent Development Fund, COA said JMC 2011-1 covers the construction or rehabilitation of sanitary landfills, materials recovery facilities and purchase of garbage trucks and related equipment.

Lipa City’s dumpsite had been long closed since 2004. The city government was reported to have not purchased new garbage trucks.

“These expenses should have been charged against the regular appropriation for personnel services and maintenance and other operating expenses (MOOE) under the General Fund fo the City Government,” COA wrote.

In response, City Administrator Atty. Leo Latido wrote COA on April 18, 2017 that the said expenses made under the 20 Percent Development Fund “are not included in the enumeration and, therefore, excluded.”

COA stood firm on its observation on the use of the 20 Percent Development Fund last year. It called the city mayor to require the Local Development Council that only the projects covered and allowed by DILG JMC 2011-1 will be allocated funds from the 20 Percent Development Fund.

The other observation pertains to how the city government should properly estimate the costs of the budget for garbage collection and hauling. This has particular reference to the P23,458,905.69 estimated cost that was paid to contracted hauler RC Bella Waste Management and Disposal Services.

In short, COA noted that documents surrounding the procurement of a garbage hauler last year were not in order before the bidding and after the award was given to RC Bella. In addition, the correct cost of hauling garbage “per trip” depending on size off the truck (whether it can haul 20 or 40 cubic meters per trip) should be properly ascertained.

A garbage truck which hauled 20 cubic meters of trash is paid P7,987.37 per trip. Although, there were some trucks that can accommodate 40 cubic meters and tallying got lost along the way —only to discover that these trucks were paid twice the P7,987.37 amount, for a total of P15,974.74.

When garbage hauling ensued and weekly payments were made to the contracted hauler, the COA said the “reasonableness of the amount paid to the contractor… was not ascertained due to lack of (a) detailed breakdown of the Approved Budget for the Contract (ABC).”

COA recommended to the city mayor’s office to “submit the detailed breakdown of the ABC and of the contract amount” that sufficiently shows the complete breakdown of costs for garbage collection and hauling. Missing support documents were also being required.

The city government had supplied the missing documents, for evaluation by COA, the audit report wrote.

What is not certain is if the P29,233,774.34 includes payments made by the city government to RC Bella or these were used for other purposes related to garbage hauling and disposal.

Since 2013, RC Bella Waste Management and Disposal Services was hired as Lipa City’s garbage collector, servicing 34 barangays and disposing the collected wastes to a sanitary landfill in Barangay Bubuyan, Calamba, Laguna.

Last year, the City Council allotted P32 million budget for garbage hauling.

The contract with the hauler expired on December 31, 2016 causing backlogs in garbage collection on the first two weeks of 2017, before winning bidder 7MG Hauling Services Philippines, Corp. took the job on January 17.

The city government later terminated the contract with 7MG on March 30, citing mismanagement and lack of experience in rendering the city’s hauling and disposal services, as well as the firm’s lack of control and disciplinary measures of drivers and garbage collectors.

It eventually re-hired RC Bella as its garbage collector.



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