Boards and senior officials of these government-owned and controlled corporations (GOCCs) have been found to be breaking the law according to the latest publicly available Commission on Audit Report on Discretionary, Extraordinary and Miscellaneous Expenses:

1. Bangko Sentral ng Pilipinas (BSP)
2. Land Bank of the Philippines (LBP)
3. Philippine Ports Authority (PPA)
4. Metropolitan Waterworks and Sewerage System (MWSS)
5. Philippine Charity Sweepstakes Office (PCSO)
6. Philippine Amusement and Gaming Corporation (PAGCOR)

The Commission on Audit (COA) Report on Discretionary, Extraordinary and Miscellaneous Expenses by Selected GOCCs and Local Government Units (Report No 2007-5) finds (Emphases ours. – Editor):

“Overall the audit concluded that the existing systems on the allocation and utilization of funds intended for extraordinary and miscellaneous expenses by selected GOCCs and LGUs were not effective in ensuring that the limitations prescribed under existing rules and regulations were observed and that funds were used for the purposes intended. 

“Extraordinary and miscellaneous expenses annual rates of the officials of selected GOCCS as approved by their governing boards, ranged from P72,000 to P5.0 million. These rates far exceed the GAA-prescribed annual rates for each official of P68,000 to P230,000 by P9,000 to P12.83 million.

“Thus, in general, upon review by the DPM of their budgets, GOCCs were instructed to limit disbursements for this purpose within the rates prescribed in the GAA. In the case of GOCCs covered in this audit, such instruction was not adhered to.”   

Source:  Summary Conclusion (verbatim) Executive Summary Page 5 -7 of the COA audit report (2007-5) which was submitted to the Honorable Rolando G Andaya Jr, Secretary of the Department of Budget and Management (DBM) by Susan P Garcia, Director IV, COA on July 28, 2008

Notes from the Philippine Public Transparency Reporting Project:

1. According to the COA report, despite the General Appropriations Act (GAA) limitations put on expenses, the governing boards of the GOCCs are acting illegally according to the audit, by setting expense rates in excess of these. Moreover, in some cases, reported expenses even exceeded the illegal levels set by the governing boards.
2. The Philippine Public Transparency Reporting Project is writing to the Secretary of the DBM to ask what new measures have been put in place as a result of this report.
3. The Philippine Public Transparency Reporting Project is writing to the COA to determine whether a new audit has been completed since 2007-5 and if so, what its findings are and whether it could be made available.
4. The allocation and utilization of funds intended for extraordinary and miscellaneous expenses are governed by COA circular No. 85-55A dated September 8, 1985 and section 25 of the General Provisions of the GAA for National Government Agencies (NGAs),  COA Circular No 2006-001 for GOCCs and section 325 (h) for Local Government Units.
5. You can read the full COA and other audit reports here at the COA Government Wide Performance Audit page.

Write, call or email the Secretary of the Department of Budget and Management Rolando G Andaya, at the Department of Budget Management, General Solano Street, Malacanang, Metro Manila Tel (02) 735 4933 and email dbmtis@dbm.gov.ph to ask:

1. What action he and his senior staff have taken against those Boards and staff found to have broken the law over expenses
2. What concrete steps he and his senior staff have taken to ensure the law is now being followed by the relevant Boards and officials. We will publish relevant cell phone numbers of DPM officials when we can.

If you have ideas on how we can collectively help improve the DBM’s ability to control and manage GOCCs, please let us know. Alternatively, post your comments or questions here and we will present them to senior staff at the DBM and ask for their response.