Where Our Taxes Go or Special Audit Office Report 2012-03

Today as the flood alerts are pouring in, it seem somehow appropriate to read about the Pork Barrel Scandal that has inundated the political lamdscape of the Philippines. The alleged Pork Barrel Queen and her brother are in hiding. It is easy to hate one of the suspects but what about the others and what about the crime?

The Special Audit Office Report No 2012-03: Government Wide Performance Audit Priority Development Assistance Fund (PDAF) and Various Infrastructure Projects Including Local Projects (VILF) is an interesting set of documents from the press release; to the executive summary; and to the full report. here is some passages from the press release:

… For CYs 2007-2009, the Commission validated that about PHP 101.6 Billion was released by the DBM in VILP nationwide, PHP 12 Billion in PDAF to agencies covered in the audit, and PHP 2.36 Billion from allocation for Financial Assistance to LGUs and Budgetary Support to GOCCs, also for projects identified by legislators. The VILP releases included PHP 20 Million from the allocation of a certain Luis Abalos who, however, was not a member of the 13th or 14th Congress.
Out of the total releases aforesaid, PHP 8.374 Billion in PDAF and PHP 32.664 Billion in VILP were covered in the Audit, representing 58% and 32%, respectively, of the total PDAF and VILP accounted for.

A total of PHP 6.156 Billion was transferred by the Agencies to eighty two (82) Non- Government Organizations (NGOs). This came from the PDAFs of twelve (12) Senators and around 180 Representatives. Ten (10) of the NGOs, which received a total of PHP 2.157 Billion, are presently linked to Janet Lim Napoles. Six (6) other NGOs, on the other hand, which received a total of PHP 189 Million, were found to have included the legislators, whose PDAF was transferred to the NGO, or a relative, as incorporator/officer.

In respect of infrastucture projects funded from VILP, about PHP 1.393 Billion were funded from the allocations of three (3) Senators and six (6) Representatives who were identified from the schedule of hard projects submitted by the DBM and from the records of the audited agencies, and several unidentified legislators.

Releases to LGUs for soft projects, on the other hand, amounted to PHP 2.034 Billion, funded from the allocations of 14 Senators and about 33 Representatives identified from the records of the audited agencies, and some others who were not identified…

Take time to read the report – they are available as pdfs and the links are just above – it goes beyond what any news report or opinion post may come up with. Why?

For one it gives a great amount of detail of how the Priority Development Assistance Fund (PDAF) and Various Infrastructure Projects Including Local Projects (VILF) were used. Inside the report is the name of agency, senators, congressmen, non-government organizations, benficiaries and projects. The report also includes the findings of the audit in detail and communication between the team who did the audit and all those involved. What is intereesting though is in the full report and looking at the different tables on the table of contents. A number of the tables. Evident by their title, gives one an idea how pork barrel is spent and how how one can manipulate the system. Here are some of them (Format: Table No/Title of Table/page number, titles in bold contains very interesting facts ) :

17/Documents Purportedly Signed by Legislators/Authorized Representatives/50
18/Status of Address of Selected NGOs/50
19/Salaries and Administrative Expenses Charged by NGOs/52
20/Persons Connected to Different NGOs/52
21/List of Beneficiaries Taken from CYs 2007 and 2008 Published Board/Bar Passers in Various Profession/53
22/Transactions Denied by Suppliers/54
23/Suppliers That Cannot Be Located or Non-Existent with Some Submitting Deficient Documents/55
24/Suppliers That Confirmed Transactions But Submitted Questionable Documents/56
25/Suppliers That Did Not Reply But Submitted Questionable Receipts

26/NGOs with Legislators and/or their relatives as Incorporators/58
27/Legislators Who Denied Signatures on Documents Submitted by NGOs/59
28/Legislators with Allocations Released to Various IAs but Requested their Allocations to be Transferred to the Same NGOs/60
29/Beneficiaries Who Attended the Same or Similar Seminars/Trainings and Received Multiple Number of Kits/62
30/Projects Implemented in the Same Barangays by Different NGOs/63
31/Nationwide Conduct of Same or Similar Trainings and Distribution of Kits/64
32/Funds Transferred to Three Municipalities/69
33/Transactions of IAs Not Compliant with R.A. No. 9184 and/or not Eligible for Funding under PDAF and with other Documentary Deficiencies/72
34/Documents Submitted by DA-RFU III, V, XI Purportedly Signed by Legislators/Authorized Representatives/78
35/Projects/Programs for Implementation of Covered IAs/80
36/Releases to Cooperatives/80
37/Cooperatives that Submitted Fund Utilization Report/83
38/Legislators Requested to Confirm their Signatures/84
39/SEA-K Members with Delayed Payments/86
40/Reasons for Returned Confirmation Letters/87
41/Projects with Deficiencies/90
42/Projects Funded from the Allocation of Various Legislators/91
43/Projects Constructed on Private Properties/93
61/Procurements of LGUs not compliant with RA 9184 Charged to Releases for Soft Projects
62/Suppliers of Mandaluyong City that Denied Transactions
63/LGUs with Questionable Transactions
64/LGUs with Suppliers Who are Not Fully Reporting their Transactions
65/Items Procured by LGUs that Cannot Be Presented or Accounted
66/Sectors Requested to Confirm their Transactions with the Covered LGUs
67/Disbursements for Financial Assistance and Operating Expenses of LGUs and Other Government Agencies

The audit uncovered a money trail shows how pork barrel can be siphoned off.

In the end the report recommended the following:

1. DBM

• Maintain an accurate record and accounts of each legislator and ensure that releases for the projects of each legislator does not exceed their respective appropriation;

• Determine if the request for allocation from a legislator is properly within the GAA menu; if not, to advise the legislator of ineligibility and hold the issuance of SARO;

• Expressly state in the SARO that the amounts covered thereby shall not be transferred by the IAs to an NGO when there is no appropriation or ordinance authorizing the same;

• Consider issuing more specific guidelines on the utilization of PDAF indicating, among others, the specific projects earmarked for the implementation by the NGOs, should there be any, and the specific pro- poor programs of the government that should be addressed under PDAF;

• Secure the commitment of the IAs to implement the project before releasing any amount to them and closely monitor project implementation; and

• Blacklist all NGOs found submitting questionable documents, not liquidating fund transfers on time and not capable of implementing the projects, and take other actions appropriate under the circumstances.

2. IAs

• Accept funds only for projects within their mandate, administrative and technical capabilities to manage, implement and monitor;

• Ensure that only projects eligible for funding under PDAF are implemented;

• Release funds to the NGOs only for projects earmarked under the appropriation law or specific ordinance for their implementation;

• Select NGOs in the manner required under existing rules and regulations;

• Require NGOs to comply with R.A. No. 9184 and its IRR in all their procurements as funds transferred to them retained their character as public funds;

• Support all transactions with valid and complete documents;

• Blacklist NGOs and their officers for submitting questionable documents, failure to effectively implement the project, or fully document their disbursements, or liquidate funds transferred to them within the prescribed period, and take other actions appropriate under the circumstances;

• Submit status report on the implementation of the PDAF project to the concerned legislator.

• Comply with existing laws, rules and regulations at all times;

• Return expired SAROs/unused funds;

• Require the NGOs to submit to the auditorial authority of the COA; and

• Immediately investigate and determine accountable officers and employees responsible in the inefficient management and implementation of PDAF projects and file appropriate charges for gross dereliction of duty, among others.

• Require compliance by the NGOs with the Procurement Act and other applicable laws and regulations in the disbursement of funds.

3. For Legislators

• Limit participation in the implementation of PDAF project to identification of projects and IAs;

• Ensure that the identified projects are eligible to be funded under PDAF and that IAs have the mandate, technical and administrative capabilities and willingness to implement the projects;

• Require the identified IAs to submit progress and financial reports on the implementation of project;

• Ensure that projects identified are the projects most beneficial to the constituents;

• For Congressmen, to limit the project coverage within their congressional districts; and

• For Partylist Representatives, to limit the project coverage within their respective Sectors

It is also important to note that the audit covered a period of time before the Aquino Government and begs the question is this still happening now? Also, As you might note the Report measures taken are mostly corrective, which is good but because of the gravity of the theft and conspiracy involve more punitive measures needs to be taken. All those suspected must be brought to court so that justice would be survive. To ignore it would be aggravating the situation and who knows where this would leave, at best a society cynical of its institutions or worse a faction of society convinced that a purge should be done.

A Chief Justice of the Philippines Sureme Court was once impeached for misdeclaring his income and assets. What should be done to those suspected of being part of a conspiracy to steal money from the Nation?

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