Cebu City Hall has made a significant budgetary decision for 2026, completely eliminating the allocation for the traditional Charter Day service incentive. This move, confirmed by city officials, stems from unresolved audit findings and the current financial challenges facing the local government.
Deliberate Budgetary Exclusion
According to Councilor Dave Tumulak, chairman of the City Council budget committee, the decision to remove the Charter Day bonus funds was made early in the budget deliberations through an initiative led by the Office of the Mayor. Tumulak emphasized that this was not an oversight or error but a calculated step to protect both the city and its employees from potential legal and financial repercussions.
He explained that the executive department intentionally omitted the funding due to findings from the Commission on Audit (COA). Under the approved 2026 annual budget, the line item for the Charter Day service incentive under Personal Services shows a zero allocation, reflecting this strategic adjustment.
Audit Findings and Financial Risks
Tumulak cited unresolved audit observation reports that previously flagged similar bonus disbursements. In 2024, the city allocated P83,675,000 for Charter Day incentives, which increased to P139,020,000 in 2025. However, state auditors have questioned certain aspects of past fund releases, raising the risk that future bonus distributions could be suspended or disallowed if compliance issues persist.
Mayor Nestor Archival had previously warned that issuing bonuses despite pending audit issues and the city's strained financial condition could lead to COA issuing a Notice of Suspension or, more severely, a Notice of Disallowance. This proactive measure aims to avoid such penalties and ensure fiscal responsibility.
Impact and Future Considerations
The removal of the Charter Day bonus highlights the city's efforts to address audit concerns and manage its finances prudently. While this may disappoint employees who have come to expect the incentive, officials stress that it is a necessary step to safeguard public funds and maintain legal compliance. The city will continue to monitor its financial health and audit status, with hopes of reinstating the bonus in future budgets once issues are resolved.
