The Commission on Audit (COA) has raised significant concerns over the financial management of Cebu City, following its annual audit of the local government's 2024 financial statements. The findings, released on December 6, 2025, highlight a critical gap between planning and actual spending, casting doubt on the transparency and efficiency of how public funds are handled.
Qualified Opinion on Financial Statements
The state auditors issued a qualified opinion on the city's financial reports. The core issue centers on the city government listing P11.18 billion in obligated funds as actual expenditures in its performance report. COA emphasized that this money had not yet been physically disbursed.
This accounting practice, according to COA, distorts the true picture of the city's spending and severely impacts the "reliability, transparency and accountability" of its financial disclosures. A qualified opinion indicates that while the statements are mostly accurate, material misrepresentations exist that auditors cannot overlook.
Low Utilization of Development Funds and Other Deficiencies
Beyond the reporting discrepancy, the audit uncovered severe underutilization of crucial budgets. The Local Development Fund (LDF), mandated for infrastructure and social services, was alarmingly underused. Out of a total LDF of P3.9 billion, only P290.8 million (7.4%) was actually spent. COA warned that this delayed or non-implementation of projects hinders socio-economic development and withholds essential public services from residents.
Other major findings include:
- Waste Management Costs: The city spent P407.7 million on waste hauling and tipping fees, a direct result of non-operational materials recovery facilities (MRFs) and poor enforcement of waste segregation laws.
- Asset Control Issues: A P1.46-billion unreconciled difference was found in records of Property, Plant, and Equipment (PPE). Furthermore, donated assets like patrol motorcycles and K9 working dogs, valued at P25.99 million, were not properly recorded.
- Inventory Problems: P4.25-billion worth of city inventories could not be fully validated due to missing physical counts.
- Treasury Lapses: Collections from 2020 to 2024 were not deposited daily as required by rules, exposing public money to risk.
Implications and Required Corrective Actions
The audit findings have direct consequences for Cebu City's residents. The low LDF utilization means delayed or canceled projects for roads, health centers, and disaster resilience. The high cost of waste management represents funds wasted due to non-compliance with environmental laws. The asset and inventory discrepancies weaken accountability and increase the risk of loss of public property.
Despite posting a P242.9-million surplus in 2024—a reversal from the 2023 deficit of P579.7 million—this positive note is overshadowed by the operational deficiencies. COA's report now serves as a formal mandate for the Cebu City Government to act. Key areas for correction include resolving 102 prior unimplemented audit recommendations, developing a concrete plan to boost LDF spending using real-time monitoring tools, and conducting a full reconciliation of all city assets and inventories.
The full weight of the qualified opinion now rests on city officials to demonstrate they can move beyond merely planning to spend funds, to actually implementing projects and converting public resources into tangible services for the people of Cebu.
