Presidential Commission Found Violating Audit Law

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Presidential Commission Found Violating Audit Law

By Vincent Michael Borneo

Monday, 08 August 2011

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Philippine soldiers take part in a training under the country's visiting forces agreement with the US in this file photo taken in Tarlac. The Commission of Audit pointed out in its annual audit report that the Presidential Commission on the Visiting Forces Agreement prevented it to conduct audit for fiscal year 2010. Photo courtesy of PCVFA

August heralds the systematic releases of the Commission on Audit (COA) annual audit reports (AAR) of all government agencies and entities and its report on salaries and allowances (ROSA) of all government officials in national government agencies, water districts, and government-owned and/or -controlled corporations (GOCCs).

Among findings from early 2010 audit reports just released is the revelation that a presidential commission prevented the audit agency from conducting an audit for fiscal year 2010.

It appears the Presidential Commission on the Visiting Forces Agreement (PCVFA) – an agency sitting within the Office of the President -- prevented the COA from doing an audit.

In her June 14, 2011 letter to the PCVFA currently headed by Executive Secretary Paquito Ochoa Jr., State Auditor Adela Dondonilla stated that “we are supposed to audit the Balance Sheet of the PCVFA as of December 31, 2010 and the related Statements of Income and Expenses and Cash Flows of 2010. However, in view of your failure to submit relevant documents in violation of Presidential Decree (PD) 1445 (Ordaining and Instituting A Government Auditing Code of the Philippines), the Manual on the New Government Accounting System (MNGAS Vol. I) and COA Accounting Circular Letter 2007-001, we were not able to conduct the necessary audit.” (underscoring supplied.)

Ochoa was named PCVFA chairman in October 2010. His vice chairmen are Foreign Affairs Secretary Albert Del Rosario and Defense Secretary Voltaire Gazmin while Justice Secretary Leila De Lima and Social Welfare and Development Secretary Corazon Soliman sit as members. Another member is retired Lieutenant General and Undersecretary Edilberto Adan, who is also PCVFA Executive Director. The executive director reports directly to the President.

The PCVFA, among its powers and functions, is mandated to ensure respect for Philippine laws, state policies and enforce strict compliance with the provisions of the Philippine-US VFA.

The current composition of the PCVFA is relatively new, having been appointed to office only in October 2010. Also, most of the expenses that COA has pointed out to the PCVFA were done during the last few months of the previous administration. The only holdover is Undersecretary Adan.

But still, as the COA has pointed out, the PCVFA’s “utilization of funds in 2010 could not be determined since the commission violated MNGAS Vol. I Sections 71 (Status of Appropriations, Allotments and Obligations) and 72 (Post Closing Trial Balance) due to non-submission of finance reports, reports of financial transactions, monthly reports of checks issued and supporting documents; and to maintain books of accounts.”

PCVFA executive director Edilberto Adan (far right) is yet to respond to queries on unliquidated cash advances, including his trip to Hawaii in February 2010 worth PhP 350,000. Photo courtesy of PCVFA

A cursory look at Presidential Decree 1445 (Government Auditing Code of the Philippines) also shows that the PCVFA is bound by Section 41.2 that states that “the chief accountant or the official in charge of keeping the accounts of a government agency shall submit to the COA year-end trial balances and such other supporting or subsidiary statements as may be required by the Commission not later than the fourteenth day of February. Trial balances returned by the Commission for revision due to non-compliance with accounting rules and regulations, shall be resubmitted within three days after the date of receipt by the official concerned.”

Moreover, Section 41.3 states that “failure on the part of any official or employee to comply with the provisions of the immediately preceding paragraph shall cause the automatic suspension of the payment of his salary and other emoluments until he shall have complied therewith. The violation of these provisions for at least three times shall subject the offender to administrative disciplinary action.”

A check with the PCVFA secretariat revealed that to date, no one in the past or current PCVFA has had his or her salary suspended.

The COA has also determined that “disbursement vouchers for January to March 2010 totaling PhP 2,008,305.60 (USD 47,816) had incomplete supporting documents” thus rendering the regularity, validity and correctness of the claims doubtful as of this time.

And there’s more. PhP 1,157,221.50 (USD 27,553) in cash advances were granted without following various COA rules.

These cash advances were for the following items, all of which have yet to be liquidated:

1. “Petty operating expenses” PhP 516,997 (USD 12,309)
2. “Car rental for Jan-Feb 2010” PhP 179,200 (USD 4,266)

3. “Office Supplies” PhP 43,272.50 (USD 1,030)
4. “Foreign travel of the Executive Director to Hawaii on February 20-26, 2010” PhP 350,438 (USD 8,344)

5. “Travel of 9 personnel to Ilocos Norte on March 4-7, 2010 for the Balikatan activities” PhP 67,314 (USD 1.602)

Adan has yet to respond to queries raised by the Philippine Public Transparency Reporting Project (PPTRP), while employees of the PCVFA Secretariat that holds office at the Department of Foreign Affairs (DFA) building in Pasay City refused to comment on the matter as they were not privy to the amounts being questioned by the COA.

This is quite peculiar since the PCVFA had a relatively small allocation for 2010 – PhP 7.088 million (USD 168,762) that laymen consider quite easy to manage and audit. But so far, there had been no submissions or audit. This is a black smear on the Office of the President.

The 2011 budget also has the same amount and hopefully, this year and the last can finally be audited since it is hard to fathom why within the Office of the President, a commission seems allergic to auditing and the daang matuwid (straight path). Philippine Public Transparency Reporting Project

(The author is a freelance writer and researcher on government policies and trends.)

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