The Negros Oriental II Electric Cooperative 2 has paid P39,590,000 to a contractor in China in 2011, but the contracted imported concrete poles will arrive next week yet.
This was noted in a report submitted by the audit committee composed of Sahara Andaya, Dahlia Cual and Eduisa Rositte Diocos, during the 33rd General Assembly of the cooperative, recently.
The report said that importation of the concrete poles was supposed to be on installment basis from 2011 to 2015, but 17 post-dated checks had been forwarded already in 2011, for a total of P39.59 million of checks, which are as good as cash.
The contract of NORECO 2 with SUMAI in China is for the importation of 1,500 concrete poles, but only 226 were initially shipped.
When asked about the rush in paying the amount when the contract was on installment basis, acting general manager Dionefred Macahig of NORECO 2 said, he cannot explain for the previous management.
Macahig, however, clarified that an amended contract was approved so the cooperative will not be paying interest. The supplier has returned P4.7 million to NORECO 2, representing the interest for five years, he disclosed.
Other findings are that of delayed payments of power bills, resulting in interests amounting to P5.2 million in 2010; overpayments to suppliers for P1.812 million; over-remittance of generation VAT and systems loss VAT; under-remittance of VAT for years 2009 and 2010; and negative balance in the inventory account materials and supplies-electric net balance of P7.8 million.
The audit committee said the cooperative must exercise prudence and due care in cash management, while ensuring accuracy in handling financial information.
It proposed that management prioritize disbursements of funds, and that capital expenditures must be based on capital budget to protect the cash position of the cooperative. It has also recommended that all disbursements go through a pre-audit, among others.*JG
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