COA to sue agencies for pocketing cash advances

Despite yearly reminders from COA, officials of agencies have failed to liquidate cash advances in the span of 10 to 15 years, the COA chief tells senators

MALVERSATION CHARGES. COA Chairperson Grace Pulido-Tan tells senators her agency will sue agencies and officials for malversation for failing to liquidate cash advances even after 10 to 15 years. Rappler photo

MANILA, Philippines – After exposing the extent of the pork barrel scam, the Commission on Audit (COA) will focus its efforts on another widespread anomaly: billions of pesos in cash advances presumably pocketed in government agencies.

COA Chairperson Grace Pulido-Tan told the Senate blue ribbon committee that her agency will file criminal cases against government officials who failed to liquidate cash advances in the span of 10 to 15 years. She refused to name the agencies and officials involved.

“We were able to come up with a list of these individuals and organizations that have not made liquidations and we are now in the process of making suyod (going over it) so we can file the appropriate cases through the Office of the Ombudsman,” Tan said on Thursday, January 30.

Tan explained that besides funneling pork barrel funds to non-governmental organizations (NGOs) without bidding or negotiated procurement, implementing agencies violated the law by failing to liquidate cash advances.

“We have a provision in law, of criminal law, that when somebody is given a cash advance and is not able to liquidate that within the prescribed period and upon demand, there is already a presumption in law that that money was malversed,” Tan said upon questioning from Senator Benigno Aquino IV. 

Tan said that COA circulars specify that liquidations should be done within 30 to 90 days, depending on the item of expense. Still, COA found that, even after 10 to 15 years, some agencies and officials have not yet liquidated the money.

She said the COA has been calling the agencies’ attention about the “build-up” in their unliquidated cash advances through its regular audit reports. Yet the agencies did not act on the findings and instead transferred the cash advances to the NGOs.

“I saw the billions in unliquidated cash advances or cash transfers. I said we better make a final demand on all these agencies to do something about it and even publish that in the newspaper,” said the COA chief.

She said the COA will file the cases in two months.

Asked about the amounts involved, Tan said: “In the aggregate, billions. There [is] one agency that would have a billion or so in unliquidated cash advances. It’s also possible.”

This prompted committee chairman Teofisto “TG” Guingona III to say, “Certainly, very revealing.”

Guingona’s committee held its 7th hearing into the multi-billion peso pork barrel scam, where lawmakers allegedly funneled their Priority Development Assistance Fund (PDAF) to fake NGOs of alleged scam mastermind Janet Lim-Napoles in exchange for kickbacks.

The focus of the hearing was NGO registration and accreditation, and rules for government owned or controlled corporations (GOCCs) to avoid a repeat of the scam. (READ: Why fake NGOs got away)

PDAF conduits abolished

The COA identified the National Agribusiness Corporation (Nabcor), ZNAC Rubber Estate Corporation (ZREC), National Livelihood Development Corporation (NLDC), and Technology Resources Center (TRC) as GOCCs that allowed lawmakers’ PDAF to be siphoned off to fraudulent NGOs.

During the hearing, lawyer Cesar Villanueva, chairman of the Governance Commission for GOCCs (GCG), said that his agency recommended the abolition of Nabcor and ZREC even before the scam was exposed.

Villanueva said Nabcor had been consistently suffering financial losses while ZREC sourced 30% of its commissions from PDAF projects.

“If instead of being the one to undertake projects, [the GOCC] goes out and sources projects to NGOs, it has no reason for being,” Villanueva said.

The GCG chief said that his agency will also recommend the abolition of NLDC, TRC, and the Philippine Forest Corporation (PhilForest). 

“There [will be] no more remaining GOCC that was a conduit of PDAF, none named in the COA report,” Villanueva said.

“Our general rule is to let the private sector do business and the implementing agency must show that it is necessary for national development [or else we abolish it],” he added.

Senators Jinggoy Estrada, Ramon “Bong” Revilla Jr, and Juan Ponce Enrile have blamed the implementing agencies for failing to vet the bogus NGOs. The 3 senators face plunder complaints over the scam.

Principal whistleblower Benhur Luy said the heads of the agencies were in on the scam and received a 10% commission. The officials though told the Senate they were simply negligent in vetting NGOs but were not aware of the scheme.

‘GOCC board members don’t do jobs’

COA’s Tan suggested that board members of GOCCs be required to undergo a “good governance seminar” for them to be acquainted with their responsibilities. Villanueva supported her proposal.

Under procurement laws and regulations, implementing agencies must hold a competitive bidding or negotiated procurement before allowing an NGO to participate in a government contract. None of this happened in the scam.

“We saw that GOCC board members didn’t understand their roles, how to act responsibly, especially if they were assigned to agencies like Nabcor, ZREC. Most of the board members are agriculture assistant secretaries or undersecretaries. Walang naglakas-loob sabihin sa mga senador na dapat dumaan sa proseso,” Tan said. (None of them had the courage to tell senators to follow the proper process.)

Tan said, “Either ‘di nila naintindihan ang role nila o ‘di sila naglakas loob sa mga senador.” (Either they did not understand their role or they didn’t have the courage to call out senators.) –


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