Billions of public funds strangely deviated

TALKS these days on corruption associated with non-governmental organizations (NGOs) could have been avoided if the Department of Budget and Management (DBM) and the Commission on Audit (COA) had not been remiss in safeguarding public funds.

In 2012 the DBM, COA and other implementing agencies (IAs) inordinately deviated from their conscientious and prudent role in handling the discretionary spending program authorized by Congress involving the controversial Disbursement Acceleration Program (DAP).

That year the Executive branch spent a whopping P21.3 billion in equity, unbelievably way above the P2.1 billion authorized by Congress. This represents an increase of P19.3 billion, or a 926-percent deviation.

Also in 2012, the branch spent P24.1 billion for subsidy, P6 billion more than the P18.2 billion authorized by Congress. This clearly represents a 32.7-percent deviation.

My researchers were not the first ones who discovered these huge deviations while gathering materials for my book, Trail of Graft and Plunder, due for publication before the year ends.

University of the Philippines (UP) economist and former Budget Secretary Benjamin E. Diokno was the first when he vetted, in particular, the 2012 General Appropriations Act (GAA).

“Strictly speaking,” Diokno said, “the GAA allows the transfer of funds [not only the Priority Development Assistance Fund, or PDAF] to civil-society organizations [CSOs], NGOs or people’s organizations [POs] as implementors of programs and projects, but under well-defined conditions.”

According to him, the GAA requires that fund transfers to CSOs shall be made only when earlier fund releases, if any, availed of by the CSOs shall have been fully liquidated pursuant to pertinent accounting and auditing rules and regulations.

Public funds are strictly covered by COA rules on budget releases and project implementation.

Under COA rules, public funds are never released directly to NGOs, CSOs or any other PO, whether they came from the unconstitutionally declared PDAF or other sources of appropriations, like the DAP.

Fund releases are only made to IAs, which could be a department, an agency or a local government unit under the Executive branch.

Funds are never released to members of the Senate and the House of Representatives.

“The choice of the NGO as the implementing service or supply contractor is the responsibility of the agency head, not the senator or [House representative], even in the case of PDAF or other off-budget public funds,” Diokno said, adding that “the contract cannot be provided to an NGO at the whim and caprice of the head of the implementing agency.”

“If the legislator insists on awarding the service/supply contract to his [or her] chosen supplier or contractor, it is the responsibility of the head of the IA to advise the legislator that it can’t be done, since it would violate some existing rules, mainly the Government Procurement Reform Act,” he said.

The ex-budget chief also said “a general provision in the GAA requires that a report on the fund releases indicating the names of CSOs shall be prepared by the agency concerned and duly audited by the COA, and shall be submitted to the Senate Committee on Finance and the House Committee on Appropriations, either in printed form or by way of electronic document.”

Diokno emphasized that it is the responsibility of the head of the IA to require no less than an audit by the COA.

The questions are: “Has the COA audited the concerned IAs? Has the agency concerned submitted the COA-audited reports to the Senate Committee on Finance and the House Committee on Appropriations?”

“What have these two powerful congressional committees done to the reports? Did they review or promptly refer them to the archives, where they might quickly fade into oblivion?” the budget expert from the UP School of Economics asked.

source:  Business Mirror / Database - Cecilio T Arillo