MANILA – A government audit has uncovered the misuse of trust funds by the municipality of Kawit in Cavite province, according to a report by the Commission on Audit (COA).

The audit found that Kawit, under the administration of Mayor Angelo Aguinaldo, failed to return Php3,327,283.06 pesos borrowed from its Trust Fund for various General Fund expenses in 2000, violating Section 4(3) of Presidential Decree 1445.

“The Municipality did not appropriate and provide funds in the General Fund to return the amount borrowed from Trust Fund…which affected the financial condition of the latter Fund,” the COA report stated.

The municipality’s financial statement as of December 31, 2020 showed total assets of P37,488,392.55 pesos, which auditors noted was not properly covered by cash. Only P17,825,065.71 pesos in cash and cash equivalents were on hand.

Auditors recommended the Municipal Mayor Angelo Aguinaldo direct the Local Finance Committee to allocate funds to repay the borrowed amount and ensure trust funds are used only for their intended purpose.

The Local Finance Committee has agreed to propose including the repayment in the 2023 Municipal Annual Budget, according to the management’s comment in the report.

COA called for further evaluation of the circumstances behind the utilization of trust funds for purposes other than what they were established for, which it said violated presidential decree provisions on trust fund expenditures.