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COA: Kawit LGU Short of P214-Million Revenue Target, Incurs Budget Deficit

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The Municipality of Kawit, Cavite fell short of its revenue target by P213.9 million in 2022, according to the Commission on Audit (COA) in its latest report.

The audit agency attributed the shortfall to the failure of the Local Finance Committee (LFC) to determine the income reasonably projected as collectible, as required by the Local Government Code of 1991.

The COA report revealed that the Municipality only collected P558.7 million of the estimated P772.6 million revenue for 2022, or 72.32 percent. The bulk of the uncollected revenue came from local sources, particularly tax revenue, which amounted to P226.3 million.

Kawit LGU also spent more than it earned, resulting in a deficit of P48.1 million for the period.

The COA noted that Kawit Municipality had been consistently underperforming in its revenue generation for the past five years, with an average collection rate of 76.52 percent.

It can be noted that there was recurring shortfall in the Municipality’s collections for the past five years, COA said.

However, this was not considered by the LFC in determining the current year’s income reasonably projected as collectible.

As a result, the Municipality was deprived of additional funds which could have addressed the needs of its constituents, the COA said.

Moreover, the collection rate for CY 2022 decreased to 72.32 percent from 84.53 percent in CY 2021.

The audit agency urged the Municipality to improve its revenue forecasting and collection efficiency, as well as to rationalize its expenditures, to avoid further financial difficulties and to provide better services to its constituents.

The COA reiterated its previous year’s recommendation that the Kawit Mayor Angelo Emilio Aguinaldo direct the LFC to analyze the trend in the collection of tax revenues in the previous years and determine the amount of income which has reasonable assurance of collectivity and use the data as inputs or benchmark in the preparation of Annual Budget for the ensuing fiscal year.

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