Part 2: COA flags ‘systematic failure’

 

Editor’s Note: All findings cited in this report are based solely on COA’s Annual Audit Report for CY 2024. This article was first published on Gold Star Daily on Dec. 12, 2025.

(Second of a three-part series)

STATE auditors have flagged the City Government for a “systematic failure” in its financial controls, citing records that show five active officers alone holding P74,367,044 in unliquidated cash advances — a procedural breach of state audit rules.

In its Annual Audit Report for the Calendar Year 2024, the Commission on Audit (COA-10) disclosed that the city government granted additional cash advances to officials who had not yet settled their previous accounts.

Despite strict regulations requiring the settlement of previous advances before new ones are released, the audit lists multiple officers as “Still Connected with Agency” while maintaining significant unliquidated balances.

“The head of the agency is ultimately responsible for overseeing these processes, and implementing measures to enhance monitoring and enforcement will help promote financial accountability and proper fund management,” the auditors stated [Observation 3.42, Book I, Part II, p. 93].

Understanding the violation

To grasp the gravity of these findings, it is necessary to look at the fiscal discipline guidelines set by the COA and the Local Government Code of 1991 (Republic Act 7160).

Under Philippine law, “unliquidated” does not automatically imply funds were missing or stolen, but that they were not accounted for within the required timeframe using receipts and vouchers.

Officials are required to liquidate cash advances usually within 20 days after the intended purpose is completed. Crucially, COA Circular No. 97-002 explicitly prohibits granting new advances until previous ones are fully liquidated.

Accountable officers (AOs) remain personally liable for any unliquidated funds.

However, the recent audit disclosed that the city government has yet to liquidate millions of pesos in overlapping advances. This led state auditors to question the accuracy of the city’s book balances for operating expenses.

COA noted that the accuracy of advances amounting to P221.928 million (2023) and P421.468 million (2024) could not be fully ascertained due to non-compliance with liquidation rules [Observation No. 3, Book I, Part II, p. 83].

Key irregularities flagged by auditors include:

• Cash advances unliquidated beyond the required deadline, with some accounts non-moving for over three years.
• Unsettled advances from retired, separated, or deceased officers.
• Multiple grants given to single officers without settling prior balances.
• Liquidations lacking required supporting documents.

A pattern of recurring grants

Audit records indicate, according to COA’s documentation, a pattern of recurring grants released despite the prohibition. 

One specific case cited in the ledger is Anecia C. Tongson (AO-57), the City Social Welfare and Development Officer. Audit records indicate a pattern of recurring grants despite her account remaining open.

The audit team flagged 18 transactions for Tongson as “Multiple Grants” as of Dec. 31, 2024.

Sixteen of these transactions, listed under the “City Government of Cagayan de Oro General Fund Unliquidated Cash Advances (Appendix C, Book II), were granted in both January 2024 and December 2024.

While two of the “Multiple Grants” transactions ― dating back to late 2023 ― were listed under “City Government of Cagayan de Oro General Fund Unliquidated Cash Advances to Officers and Employees (Appendix D, Book II).

According to the report, Tongson received nine separate advances in January 2024 alone — from Jan. 23 to Jan. 31 — totaling P35,397,000 [Appendix C, p. 84 and 92, Par. 3.4, 3.6, and 3.34, Book II]. 

Auditors noted that other accountable officers with the highest number of multiple grants included AO-39 and AO-54 (nine grants each), and AO-47 and AO-157 (eight grants each) [Appendix C and D of the General Fund].

“The City did not consistently follow the prescribed rules and regulations governing cash advances... specifically the prohibition of granting new advances when prior ones remain unsettled,” the report reads [Observation No. 3, Book I, Part II, p. 64].

The data: Top accountable officers

Based on Book II, Appendix C of the 2024 Audit Report, the following active officers hold the highest unliquidated cash advance balances:

Anecia C. Tongson (AO-57): P35,397,000. Composed of nine separate entries granted in January 2024. AO-57 is the City Social Welfare and Development Officer, based on the city government’s official website.

Xsyclyn Faith B. Lumbatan (AO-39): P12,950,000. The sum of at least 19 entries between May 2023 and December 2024. Entries range from P49,000 to a P4.25 million grant in July 2024. AO-39 is listed as both the Officer-in-Charge of the Human Resource Management Office and the Acting Secretary to the Mayor.

Jann Guillmore G. Actub (AO-02): P10,571,134. Includes funds for the Higalaay Festival (P63,134), the anti-trafficking program (P5.5 million), and the integration program (P5 million). All three entries were flagged as “multiple grants.” AO-02 is the Official Spokesperson for the Mayor.

RC Tsini Solis II (AO-54): P9,000,000. Records show Solis received two separate cash advances on Sept. 1, 2023, for food subsidy assistance while previous accounts remained open. AO-54 is a designated Special Disbursing Officer.

Cyril W. Ranile (AO-46): P6,448,910. Total unliquidated advances for Operating Expenses as of Dec. 31, 2024. AO-46 is the Acting Department Manager of the Office for Community Affairs.

Another officer, Sheila B. Lumbatan (AO-38), the Chief of Staff to the Mayor, was noted for receiving multiple cash advances totaling P2,100,000, with her first advance granted on March 9, 2023.

Internal control deficiencies

The recurring finding — issuing new cash advances while prior ones remain unsettled — constitutes a breach of fundamental financial protocols. Treasury Circular No. 02-2009 requires that funds must be for a legally specific purpose and supported by an approved bond application if the accountability exceeds P5,001.

Failure to liquidate within the specified period can lead to administrative consequences, such as salary withholding, and potential criminal liability.

Observation 3.2, Book I, Part II, p. 83-84

Observation 3.3, Book I, Part II, p. 84

Auditors noted that while this issue appeared in prior audits, the City has yet to file requests to write off dormant receivable accounts [Observation 3.25, Book I, Part II, p. 91].

Recommendations and response

COA-10 has recommended that the City Accounting Department stop the practice of granting multiple cash advances to employees with unsettled accounts, send demand letters to concerned employees, and ensure full liquidation at the end of each year.

The City Government acknowledged the findings, stating the increase in unliquidated cash advances for CY 2024 was “largely due to the urgent need to sustain essential operations” [Observation 3.44, Book I, Part II, p. 94].

The City Government agreed with the recommendations and committed to enforcing stricter policies. It also stated it would take steps to request write-offs for advances held by retired, separated, or deceased officers.

Gold Star Daily has reached out to the City Finance Office and the named officials, through the Office of the City Mayor and Office of the City Administrator, for clarification regarding these unliquidated balances. Their side will be published as soon as it is available.

(This is the second in a series of reports on the Cagayan de Oro City audit findings, covering the Calendar Year ended Dec. 31, 2024.)