P864.5M Properties not Insured

The Commission on Audit (COA) found that the Cebu City Government failed to insure its properties such as machineries and other equipment worth at P864.5 million which is against the Property Insurance Law.

Most of the government-owned properties, including vehicles, are insured with the General Insurance Fund of the Government Service Insurance System (GSIS) to protect the concerned government office against any insurable risk.

When state auditors examined the books and other records of the Cebu City Government, they found out that although the vehicles of the City had been insured, the other properties valued at P864,543,940 were not.

The properties not insured were office equipment worth P242 million; IT equipment and software (P112 million); construction and heavy equipment (P91.9 million); firefighting equipment and accessories, (P67 million); hospital equipment, (P55 million); technical and scientific equipment, (P72 million); machineries and other kinds of equipment P122 million and several others.

The city only insured the buildings worth P1.3 billion and vehicles valued at P497 million.

The insurance code as amended by Presidential Decree 245 provides that “all departments, bureaus, offices, agencies and instrumentalities of the government are directed to insure against insurable risk all property and assets belonging to the government with the General Insurance Fund of GSIS.”

In the absence of insurance coverage, COA said, the government insurable interests are “not ably protected against contemplated peril that may occur, thus in the occurence of such event, the government will not be directly indemnified by the loss.”

There is no explanation from the Cebu City officials on why they failed to insure all the properties of the city.