KAWIT, Cavite — The Commission on Audit (COA) has released a report highlighting an alarming cash deficit of ₱234,678,771.45 in the local government unit (LGU) of Kawit, Cavite under Mayor Angelo Aguinaldo, for the calendar year 2023.

According to the audit, the municipality’s cash and cash equivalents were insufficient to cover current liabilities, leading to this significant financial shortfall as of December 31, 2023.

The report detailed that the General Fund had a cash and cash equivalent of ₱8,843,463.73, while the Trust Fund had ₱32,623,141.89.

However, these amounts were not enough to meet the current liabilities totaling ₱239,286,366.22 for the General Fund and ₱36,850,910.85 for the Trust Fund. This financial shortfall contravenes Section 337 of Republic Act No. 7160, known as the Local Government Code of 1991, which stipulates that local funds should not exceed 50% of the uncollected estimated revenues.

Over the past five years, the cash position of Kawit has worsened, with the cash deficit growing from ₱12,664,433.61 in CY 2018 to ₱234,678,771.45 in CY 2023. The COA report attributes this deficit primarily to the municipality’s inability to achieve its revenue targets from local sources, as evidenced by significant discrepancies between budgeted and actual revenues in 2023.

For instance, the budgeted tax revenue was ₱397,322,006.71, but the actual collection was only ₱218,221,605.17, a shortfall of ₱179,100,401.54.

The COA has recommended that the Municipal Mayor direct the Local Finance Committee to implement stringent measures to eliminate the cash overdraft. These measures include exercising diligence in managing municipal funds, limiting expenditures to the total income realized, and reducing unnecessary operating expenses until the deficit is resolved.

Furthermore, the COA suggested a thorough analysis of the tax and non-tax revenues from previous years to inform the preparation of a more realistic annual budget for the upcoming fiscal year. This step is crucial for ensuring financial stability and preventing future deficits.

The audit findings serve as a wake-up call for local officials to enhance revenue collection strategies and fiscal management practices to safeguard the financial health of Kawit, Cavite. The public awaits the response from local authorities on how they plan to address these financial challenges and restore fiscal balance.