November
18, 2005
Mr. Jaime P. Naranjo
Director IV
Corporate Government Sector
Cluster III - Public Utilities
Commission on Audit
Commonwealth Ave., QC
Thru:
Mr. Digno T. Tumbokon
State Auditor IV
Office of the Auditor, LWUA
Dear Director Naranjo:
This
has reference to your letter dated October 3, 2005 enlisting
our cooperation and assistance to facilitate the implementation
of the NGAS in water districts, on the ground that the
issuance of LWUA Memorandum Circular No. 003-05 has been
rendered moot and academic with the denial of the request
for exemption of water districts from NGAS coverage.
We
would like to clarify that the Supreme Court decision
declaring water districts as GOCCs thereby subjecting
them under COA's regulations does not totally abrogate
LWUA's vital function of monitoring the operations of
water districts.
By
virtue of LWUA's regulatory power as a specialized lending
institution over the water districts, the latter have
to comply with the reportorial requirements to ensure
compliance with the prescribed operating standards. Thus,
it is not entirely correct to say that LWUA's authority
in implementing its function, requiring water districts
to comply with certain standards (e.g. Submission of periodic
CPS- prescribed Financial Reports, Monthly Data Sheet,
etc.) is deemed superseded by the Supreme Court's declaration
that water districts are GOCCs. In fact, the same decision
stated and it is admitted, that water districts are governed
by its charter (PD 198 as amended) under which LWUA's
regulatory function is enshrined.
In
fine, while LWUA interposes no objection to the water
districts' adoption of NGAS, it does not relinquish its
mandated function to monitor, regulate and set operating
standards for water district operations.
LWUA
will issue appropriate guidelines without prejudice to
the issuance of COA's customized financial accounting
manual for use of all Water Districts which shall embody
the accounting policies, rules and regulations relative
to the transactions of water districts.
Very truly yours,
LORENZO
H. JAMORA
Administrator
