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THE Commission on Audit has found that six state-run pension funds and housing agencies have not credited P18.188 billion in collections to the accounts of members and borrowers who paid contributions and loan amortizations in 2015.
Based on the 2015 Annual Financial Report on Government-Owned or Controlled Corporations (GOCC) released last October 24, the Social Security System topped the list with P9.939 billion in “undistributed collections” consisting of premiums from members and loan payments of borrowers.
At second spot was the Armed Forces of the Philippines-Retirement and Separation Benefits System (AFP-RSBS) with P4.914 billion and the Government Service Insurance System (GSIS) coming in at third with P2.697 billion.
The rest of government financial institutions in the list released by the COA were:
Social Housing Finance Corporation – P372.626 million;
Home Development Mutual Fund (HDMF or PagIBIG Fund) – P264.132 million; and
Small Business Corporation (SBC) – P1.807 million
Despite the fact that the sums were already in hand for the said GOCCs, auditors noted that they were not declared as in the statement of assets thereby understating the said account and bloating the declared liabilities.
The COA warned that delays in crediting such collections in the individual accounts of members or borrowers could cause them injury in terms of lower entitlement computation or double collections.
“(T)he collections of premiums and loans (that) have not been posted to the individual member’s accounts affect the accuracy and correctness of presentation of members’/pensioners’ data …ultimately delaying the processing of benefits of members/pensioners,” the state audit agency said.
For GSIS, the COA said members could be affected by lesser loan proceeds because of their unposted loan payments even if, in reality, they are paying consistently through salary deductions.
“The failure of the GSIS to post accurately and timely the payments should not redound to the members’ benefits, hence, refund for any reconciled/posted payments should be automatically made,” it said.
Under the existing Policy and Procedural Guidelines No. 265-14 dated September 30, 2014 it is the members who are required to initiate the refund procedures although state auditors pointed out that it is very unlikely that they are even aware that their payments were not properly accounted.
In the case of HDMF, auditors pointed out that such delays are considered violations of the Accounting Memorandum Order Nos. 2009-002 and 2014-003 which require proper reclassification of undistributed collections within a maximum of 15 days.
“Member paying amortization will not benefit to this since his loan balance will not reflect immediately the correct/actual loan balance due to the delayed posting…(and) deprives members from accumulation of dividends from the time the payment or remittance should have been posted,” the COA added. (30)
CRIMINAL cases filed at the Sandiganbayan against ranking government officials climbed 208 percent from January to June 2016 compared to the same period last year, according to a report released by the Office of the Ombudsman on Thursday.
A breakdown of the resolved cases by the Ombudsman showed there were 413 criminal charges filed against public officials holding the positions of municipal mayor, head of a government firm, or higher in the first six months of the year, way higher than in the first half of 2015 when only 134 cases were filed.
Total number of cases filed at Sandiganbayan reached 1,196 wherein 42 percent of the defendants were high-ranked government executives, 47 percent comprised of low-ranked public officials, and the remaining 11 percent were private respondents implicated because of conspiracy.
According to the same report, local government officials had the most number of criminal cases filed with 288 followed at some distance by members of the House of Representatives with 43, and officials of state Universities and Colleges with 40. The rest of the government agencies posted single-digit numbers.
For those whose cases have already completed trial and were decided by the graft court, 2016 continued to be a bad year as the Office of the Special Prosecutor collected 51 convictions against 20 acquittals for a 72 percent conviction rate. This was however a shade lower than the 75 percent mark achieved by the OSP for the same months last year.
Graft charges continued to top the cases filed against erring public officials with 132 information, followed by violations of PD 1445 or the State Audit Code and Usurpation of Official Functions both with 44 counts each.
Among those who were criminally indicted during the period covered in the report were Senator Joseph Victor “JV” Ejercito for alleged graft and illegal use of public funds when he was San Juan City mayor; dismissed Makati City Mayor Jejomar Erwin “Junjun” Binay for suspected graft and falsification of public documents concerning the Makati Parking Building project; and former Pangasinan Governor now Rep. Amado Espino in connection with the alleged illegal black sand mining in his province.
Also charged earlier this year were former Reps. Rodolfo Valencia (Oriental Mindoro), Marc Douglas Cagas IV (Davao del Sur), Alvin S. Sandoval (Malabon-Navotas), Arrel Olaño (Davao del Norte) and Arthur Pingoy (South Cotabato) in connection with the reported multi-billion pesos Priority Development Assistance Fund (PDAF) scam.
Former Bureau of Customs commissioner and incumbent Muntinlupa City Rep. Rozzano Rufino Biazon was also charged with graft based on allegations of PDAF misuse.
FOUR officials of the Department of Budget and Management (DBM) have asked the Sandiganbayan Seventh Division to junk the latest motion of the Office of the Ombudsman asking for their preventive suspension based on two pending graft charges.
In their nine-page Joint Opposition, DBM Undersecretary Mario L. Relampagos, Budget and Management specialist Rosario Nuñez, and administrative assistants Lalaine Paule and Marilou Bare protested that they have already served three previous suspension orders all arising from similar cases involving alleged irregularities in the disbursement of Priority Development Assistance Fund (PDAF) or “pork barrel” allocations of lawmakers.
These were for periods covering July 28 to October 25, 2015 in the graft cases against former Senator Juan Ponce Enrile, November 12, 2015 to February 9, 2016 in the graft cases of former Benguet Rep. Samuel Dangwa, and January 13 to April 11, 2016 for the graft charges against former Cagayan de Oro City Rep. Constantino Jaraula.
Each of the defendant is facing 104 counts of graft charges filed in various divisions of the graft court. They were accused of conspiring with the lawmakers and executives of bogus private foundations in defrauding the government by funneling PDAF into non-existent livelihood or agricultural assistance projects.
A preventive suspension is effective for 90 days during which the public official’s pay is withheld.
“Accused humbly implore the aid and succor of the Honorable Court. Despite the tremendous suffering, they remain hopeful – confident in the ability and wisdom of the Honorable Court to dispense justice. It is difficult enough to be dragged into these PDAF cases without any basis, to be suspended and lose means of livelihood is grossly unjust,” the DBM officials said.
The defendants claimed they were wrongfully dragged into the PDAF cases even if they were not accountable officers in the contemplation of existing laws since they never had custody of the PDAF.
Likewise, they pointed out that no direct evidence of their alleged conspiracy with other accused was presented in court.
They said the act of signing the Special Allotment Release Order (SARO) and the Notice of Cash Allocation (NCA) do not constitute a covert criminal act.
In the case of Relampagos, he invited the Court’s attention to check that he did not sign any SARO or NCA.
“Note that the accused have already suffered greatly when they served (earlier) preventive suspensions. Wherefore, in the highest interests of substantial justice, it is most respectfully prayed that the Motion to Suspend Pendente Lite be denied for utter lack of merit,” the defendant DBM officials said
THE Commission on Audit on Wednesday reports that more than two years after super typhoon Yolanda devastated Tacloban City, the local city government’s rehabilitation particularly on public infrastructure, relocation of residents, and rebuilding the local fishing industry efforts has faltered due to delays and irregularities.
The 2015 audit report on the city government cited adverse findings relative to the P146.76 million infrastructure project funded under the Recovery Assistance for Yolanda (RAY), the P32.545 million Mariculture Park Rehabilitation Program, and the P728.26 million Emergency Shelter Assistance program.
Based on the report, funding for the said projects have been turned over to the city government by the Department of Interior and Local Government under DILG-RAY, the Bureau of Fisheries and Aquatic Resources (BFAR), and the Department of Social Welfare and Development (DSWD).
The COA said P100.23 million earmarked for 31 projects – construction/repair of barangay halls and mini-gymnasiums – have not delivered the intended benefits for city residents.
A status of implementation report dated February 3, 2016 submitted by the City Engineer’s Office of the audit team showed none of the 31 projects have been completed.
However, the city government has not imposed liquidated damages on the erring contractors contrary to the provisions of the Government Procurement Reform Act which sets a penalty of one-tenth of one percent of the incomplete portion for everyday of delay.
“During the exit conference, the City Accountant commented that they shall impose liquidated damages on these projects once submitted to them for payment,” the COA said.
On the other hand, a separate batch of 19 infrastructure projects likewise funded under DILG-RAY Batch 2 worth P46.53 million have been suspended after serious problems were determined after the contracts were awarded to begin construction.
Among the reasons cited were: revisions to the original plan, insufficient area, project site reduced by road widening, and situating the project within the designated “No Build Zones.”
“Further audit of documents disclosed that these projects were already awarded during the month of September 2015 and the contract duration are good for 60, 90 and 120 calendar days only. Thus the projects were supposed to be completed last November 2015, December 2015, and January 2016, respectively,” the audit team pointed out.
Numerous violations of program guidelines were also reported in the implementation of the Emergency Shelter Assistance (ESA) Program by the City Social Welfare and Development Office (CSWDO) wherein auditors, in a random sampling of 734 families, found that one in every five beneficiaries who were given cash assistance was not qualified.
“For CY 2015, the City Government of Tacloban disbursed a total amount of P728,260,000 for the DSWD Emergency Shelter Program for 138 barangays. The [CSWDO] did not follow some of the program implementation guidelines,” the audit team said.
The COA noted that among those who received cash assistance under the ESA were households with monthly incomes of P15,000 or higher, those who continue to reside in or refuse to move from “No Build Zones”, and families that already received full shelter assistance from international and private organizations.
At the same time, cases of disparity in distribution were reported where owners of partially-damaged homes received the full assistance cost of P30,000 while those with totally-damaged houses were only given P10,000.
Further validation revealed that no physical inspection of the recipient households’ living quarters was conducted by the social welfare officers contrary to the program intent.
“With the results of the validation, the main purpose of the DSWD-ESA Program is defeated,” the COA said.
During exit conference the Head of the CSWDO pinned the blame on the Yolanda-affected families saying they “did not give true information during the assessment for the processing of the DAFAC [Disaster Assistance Family Access Cards].”
The same city official said the DSWD should extend the shelter assistance to the whole Tacloban City population because the area was “totally devastated” and a wide portion of the city has been declared a no dwelling zone.
The COA however recommended that the City Mayor require strict compliance by the CSWDO to the guidelines and criteria for the selection of beneficiaries.
Likewise, it warned that Notices of Suspension and Disallowance will be issued for transactions that violated procedures.
A notice of suspension will require those held liable to submit documents to prove validity of the fund disbursement and failure to do so will mean the said transaction will be disallowed on audit. Disallowance will compel those held liable to reimburse the government for the entire sum.
On the BFAR-implemented Mariculture Park Rehabilitation Program (MPRP), auditors reported that the project was also plagued by delays caused by poor planning and non-observance of deadlines by selected suppliers.
Under the project, 150 fish cages each worth P160,000 or a total of P24 million were supposed to be distributed to suitable recipients. A separate allocation of P8.545 million was set aside to stock the fish cages with 1.22 million bangus fingerlings.
“During the year, the city disbursed a total amount of P23.7 million to pay for 150 fish cages. The City Government of Tacloban did not meet the timeline to completely implement and liquidate the funds transferred by the BFAR,” the audit report noted.
However, only 95 cages have been released to recipients as it was later found that one cropping of bangus would mean feed costs of P216,000 per fish cage which eliminated fishing families that cannot come up with that kind of money.
To make matters worse, not one fingerling has been delivered even if the contract was supposedly awarded to a supplier as early as October 16, 2014.
“As of April 18, 2016, the procurement of the 1,220,714 fingerlings… with a total contract price of P8,544,998 were not yet delivered. Consequently, the supplier has incurred delays for more than one year,” the COA said.
THE operating expenses of the Office of the President jumped to P8.075 billion in 2015 compared to P2.205 billion in 2014 or an increase of over 266 percent.
This was shown in the OP’s Financial Statements included in the 2015 audit report released by the Commission on Audit last July 14.
The COA however submitted no adverse findings on the increase saying this was “due to the expenses incurred during the whole year duration of hosting the APEC (Asia-Pacific Economic Cooperation) 2015 from December 8, 2014 to November 19, 2015.”
The biggest surge was noted in the maintenance and other operating expenses (MOOE) which rose to P7.206 billion in 2015 from only P1.389 billion the year before. Personnel services (PS) showed only a slight uptick to P785.533 million in 2015 as opposed to P711.445 million for the preceding year.
A breakdown of the MOOE provided under the Notes to Financial Statements showed several items climbing sharply including food supplies, consultancy services, other general service, other professional services, rent/lease expenses, representation expenses, donations, and transportation equipment.
Below is the year-on-year comparison of the said items:
Consultancy Services – P1.781 billion in 2015 (from P71.11 million in 2014)
Donations – P1.52 billion (from P5.075 million)
Rent/Lease expenses – P1.45 billion (from P81.99 million)
Representation Expenses – P845.506 million (from P125.34 million)
Transportation Equipment – P252.354 million (from P20.399 million)
Other Professional Services – P99.956 million (from P39.676 million)
Other General Services – P69.328 million (from P1.021 million)
Food Supplies Expenses – P53.36 million (from P10.417 million)
On the other hand, the COA reported that the OP has failed to coordinate with implementing agencies to liquidate P2.552 billion fund transfers for APEC-related activities.
“The balance of fund transfers sourced from the International Commitment Fund (ICF) to nine national government agencies of P2,552,270,615.50 …was not yet liquidated as at December 31, 2015,” the commission said.
The failure to liquidate runs afoul of the COA Circular No. 94-013 which provides that details of fund usage should be submitted by implementing agencies no later than 10 days after the end of the project while unused balance of such funds should be returned to the source agency.
Based on the audit report, the Department of Interior and Local Government (DILG) received the biggest amount with P1.67 billion followed by the Presidential Communications Operations Office (PCOO) with P519.199 million, and the Department of Tourism with P246.732 million.
All three agencies have failed to liquidate even a single centavo of their fund disbursement. They have also not returned any balance or unutilized cash.
Responding to the audit finding, the OP said it has already requested the COA for assistance in prioritizing the audit of all APEC related expenses.
The Philippine Health Insurance Corp. defective registry data base poses danger to its operation — Commission on AuditJuly 7th, 2016
THE defective registry data base of the Philippine Health Insurance Corp. (Philhealth) poses operational danger to its operations, which includes the delivery of basic health services to the public.
This is what was discovered by the Commission on Audit following its examination of Philhealth’s records. Consequently, it has recommended that the corporation undertake steps to update its records after an examination last year revealed that millions of members have defective registry data.
In its 2015 report on Philhealth, the COA said an audit team found that the Philhealth Members Database (PMD) for 4,287,546 members contained missing entries in their records including 3.037 million with no dates of birth, 1.25 million with no middle names, 1,117 with no first names, and 39 without last names.
This number represented six percent of the 66,051,787 total membership of Philhealth.
“The data contained in the PMD were examined and it was observed that there were deficiencies that would affect the relevance, reliability, and completeness of information included therein. These deficiencies could adversely affect the delivery of services to members and to the operation of Philhealth,” auditors said.
Another finding was the incorrect filling up of the requirement for “middle name” wherein only the middle initial was provided. This represented 4,587,697 members on the database.
At the same time, columns for middle name, birthday, and status were also found missing in the records of 207,485 members which presented problems in verification in cases where members have identical first names or last names. Entries in the absent columns would have provided the needed information.
Meanwhile, in the “Status” column that would have shown whether a member is active or a senior citizen, the COA found 938,094 members have invalid entries or “null” values.
It was in the “Birthday” column however that auditors found the biggest surprise.
One member’s birth year was shown to have been encoded as 1752 which would make the said person 264 years old. Still, Philhealth listed the member’s status as “active.”
There were also a total of 338,528 centenarians all born before January 1, 1901 all still listed as “active” instead of “senior citizens” on the PMD.
At the other end of the extreme are 7,530 Philhealth members who were registered after the cutoff date of December 31, 2015.
The COA said such entries are “improbable” and should require immediate revalidation.
It likewise recommended that the Philhealth create a mechanism in its system to automatically recognize a member as a “senior” once he or she turns 60 years old.
“The noted deficiencies though immaterial in size relative to its database were essentials in the determination of Philhealth members’ identities,” it pointed out.
The commission said such defects in the member’s record could create problems like delay in the posting of contributions and non-availment of benefits.
BANGKO Sentral ng Pillipinas (BSP) Governor Amando M. Tetangco Jr. tops the list of highest-paid government officials last year with total earnings of P13.957 million according to the 2015 Report on Salaries and Allowances released by the Commission on Audit Tuesday.
Tetangco’s pay includs P6.693 million in basic salary, P3.912 million bonuses/incentives, P2.448 million allowances, and P879,456.73 in discretionary funds.
Government Service Insurance System (GSIS) general manager Robert G. Vergara, who was top earner in 2012 and 2013, came in second with P13.449 million in earnings. He and Tetangco were the only ones in the list with eight-figure take-home pays from last year.
A breakdown of Vergara’s pay showed he received P7.402 million in basic salary, P3.81 million in bonuses/incentives, and P1,442 million in allowances, along with small amounts in honorarium and discretionary funds.
At third spot is Securities and Exchange Commission (SEC) chairperson Teresita J. Herbosa with P9.801 million in total pay. She is the only government official included in the list who was not from a government financial institution (GFI).
The rest who made it on the top 20 highest-earners were:
4.) Development Bank of the Philippines (DBP) board director Anthony T. Robles – P9.368 million
5.) BSP deputy governor Nestor A. Espenilla Jr. – P9.181 million
6.) BSP deputy governor Diwa C. Gunigundo – P9.156 million
7.) DBP executive vice president Alexander A. Patricio – P9.058 million
8.) BSP deputy governor Vicente S. Aquino – P9.032 million
9.) DBP executive vice president Benel D. Lagua – P8.529 million
10.) DBP executive vice president Fe Susan Z. Prado – P8.451 million
11.) Social Security System (SSS) president Emilio S. De Quiros Jr. – P8.293 million
12.) Home Development Mutual Fund (HDMF) CEO Darlene Marie Berberabe – P8.09 million
13.) Bases Conversion and Development Authority (BCDA) president Arnel Casanova – P7.813 million
14.) Supreme Court associate justice Diosdado M. Peralta – P7.803 million
15.) Philippine Amusement and Gaming Corp. (Pagcor) chairman Cristino L. Naguiat Jr. – P7.778 million
16.) DBP president Gil A. Buenaventura – P7.5 million
17.) Pagcor president Jorge V. Sarmiento – P7.283 million
18.) BSP-Monetary Board member Juan D. de Zuniga Jr. – P7.138 million
19.) DBP senior vice president Donna P. Shotwell – P7.132 million
20.) BSP-Monetary Board member Felipe M. Medalla – P7.119 million