The Lapu-Lapu City Government is preparing for a crucial meeting with state auditors after the Commission on Audit (COA) flagged its 2024 year-end celebration expenses as an irregular use of public funds.
Audit Findings and the Public Purpose Test
In its 2024 audit report, COA identified P395,500 in disbursements for the city's Year-End Evaluation Program as irregular. The amount was used for employee activities, including cash raffle prizes, caroling contests, and parlor games like the newspaper dance and "pera o bayong." Individual prizes ranged from P400 to a substantial P50,000.
State auditors ruled that these expenses violated Sections 2 and 4(2) of Presidential Decree No. 1445, the Government Auditing Code. COA emphasized that while aimed at boosting morale, using public money for "chance-based and entertainment activities" failed the fundamental requirement of serving a direct public purpose. The audit team classified the costs as non-essential and personal under COA Circular No. 2012-003.
The City's Defense and Awaiting Exit Conference
Lone District Representative Junard “Ahong” Chan, who was the city mayor at the time of the event, has submitted the local government's response. In an interview on Thursday, December 18, 2025, Chan stated they are now awaiting an exit conference with COA, expected before the end of December, to further justify the expenditures.
Chan defended the spending, citing the Local Government Code's provisions on general welfare and employee productivity. He argued the celebration was not merely a social event but an internal governance activity designed to motivate staff, foster unity, and provide a venue for performance reflection. He also noted the expenses were covered by an approved supplemental budget and aligned with employee welfare programs permitted by relevant guidelines.
Recommendations and the Path Forward
COA has recommended that the Lapu-Lapu City LGU must either provide a solid legal basis for such payments to employees or refrain from similar expenses in the future. The commission stressed the need for prudence, efficiency, and economy in all uses of government funds.
The outcome of the upcoming exit conference will determine if the city's justification is accepted or if it will be required to address the disallowance formally. This case highlights the ongoing tension between internal employee incentives and the strict legal mandate for public spending to benefit the broader community.
