Corruption Red Flags: Excesses in government spending

Lian Buan
Rappler conducts an analysis of 323 audit reports of government agencies to find irregularities and flagged spendings. Part 2 tackles excesses in spending, travels and ghosts of the pork scam.


  • Half of all national government agencies (NGAs) and government-owned and controlled corporations (GOCCs) have excessive spending
  • Excessive travels cost the government P587 million in 2017
  • The government is yet to account for irregular transfers to NGOs from the pork barrel scam

READ: Part 1 | Corruption Red Flags: Fake transactions, doubtful accounts in government spending

MANILA, Philippines – “Change your lifestyle, less expense,” was the marching order of then president-elect Rodrigo Duterte speaking from Davao City before he took over the presidency.

He has put many heads on the chopping block for his “one whiff of corruption and you’re out” policy.

Rappler analyzed audit reports of 323 national government agencies and government-owned and controlled corporations (GOCCs) for 2017, and found where the excesses are. (The Commission on Audit has just recently started releasing 2018 audit reports.)


We scanned the audit reports for excessive spending, “excess” being among the words that seems to get on the nerve of Duterte when he rants against corruption.

Of 323 agencies, 109 have excesses. They were either spendings for salaries, benefits and allowances that exceeded the allowable limits. Many of them were excessive spending on mobile phone load, fuel, and training/conference costs.

  • Road Board

In the case of the Road Board, an agency under the Department of Public Works and Highways (DPWH), auditors found that some projects were either overpriced or overpaid by the millions.

This is not simple excess, but in COA’s words, “unconscionable expenditures…which are disallowable in audit.”

COA found that 3 projects were overpriced by a combined amount of P7.9 million, based on auditors’ evaluated costs. 

In another project in Benguet, the Road Board paid a bill of P10.38 million which “was in excess of the actual accomplishment by P3,539,975.35.” 

COA already recommended disciplinary or administrative actions against the erring personnel “for the loss of government fund thru their fault or negligence.”

  • Maritime Industry Authority

The Maritime Industry Authority (MARINA) was called out for its failure to “strictly observe pertinent laws, rules and regulations resulting in the incurrence of irregular, unnecessary, excessive and extravagant expenses.”

MARINA spent P19.26 million for training, representation and transportation allowances, overtime pay, daily subsistence allowance, mobile communications, bus rentals, and extraordinary and miscellaneous expenses. 

MARINA also spent P23.4 million for the payments of tuition and accommodation, foreign travels, leased venues for trainings, rentals of photocopying machines, office space, audio-visual and procurements for janitorial and security services. 

These were found to have violated several laws and circulars.

  • Manila International Airport Authority  

For the Manila International Airport Authority (MIAA), auditors flagged its payment of P142.53 million in overtime (OT) fees to its personnel, which exceeded the ceiling by P103.378 million.

MIAA was found to have allowed the payment of overtime fees even though the policy is to grant personnel compensatory time off in lieu of such fees. A budget circular requires this instead of paying overtime in cash. 

“Also, we were precluded from evaluating the necessity of the OT services rendered as there were no accomplishment reports submitted or attached to the payrolls or a work plan/program supporting or justifying the grant of OT services with pay,” said the auditors.

  • People’s Television Network Inc  

The People’s Television Network Inc (PTNI), the state-run channel, came under fire last year for an advertising deal with the Tulfo-owned Bitag media and the Department of Tourism (DOT) – a deal that may hold involved people liable for graft, said COA.

That was a transaction in 2017, a year when PTV turned out to have spent Maintenance and Other Operating Expenses (MOOE) that reached P47.43 million in excess of its corporate budget.

“Public funds were applied other than for which such funds were appropriated by law contrary to the Art. 220, Chapter Four of the Revised Penal Code,” said COA, as it threatened disallowance.

  •  Department of Tourism

The DOT, on the other hand, spent P19.5 million in sponsorships of NGOs, but auditors said the department was too “generous” in that it granted sponsorship requests without strict guidelines that would have prevented excesses. (READ: More fun? Inefficiencies in Teo’s DOT term raise audit red flags)


Duterte’s biggest pet peeve is excessive travel, often warning he would fire officials who travel often, and actually firing higher education chairperson Patricia Licuanan over it.

COA was able to identify 32 agencies with travels flagged for being either excessive, unliquidated, or unsupported by documents. All in all, the travels cost the government P587,612,458.

  • General Headquarters of the Armed Forces of the Philippines and Office of the Vice President 

The travels of top two agencies – the General Headquarters of the Armed Forces of the Philippines (GHAFP) and the Office of the Vice President (OVP) – were not necessarily excessive, but were flagged by COA for not following liquidation rules. 

The P488.698 million amount for the GHAFP is a lumped amount of unsettled accountabilities including foreign and local travels, payroll, and other operating expenses.

COA did not provide a breakdown in its 2017 audit report of the GHAFP. Auditors also noted that the unliquidated balance goes back up to 27 years ago.

Records showed that the accumulation of cash advances is attributable to the granting of additional cash advances to accountable officers while previous ones were not yet fully liquidated,” said COA.

 As for the OVP, auditors said that the cash advances for local travels were not liquidated within the prescribed period of 30 days. Officials also did not immediately refund the excesses of their advances.

COA said the OVP should automatically withhold the salaries of those officials upon failure to comply.

  • Department of Tourism

It is the DOT, the 3rd on the list, which was categorically flagged for excessive travels.

“There are no specific guidelines on foreign travels by the DOT-CO personnel, with traveling allowances aggregating to P19,290,878.50 incurred in CY 2017, thus, exposing the government to risks of incurring expenditures for excessive and extravagant travels abroad,” auditors said of the DOT.

Tourism Promotions Board or TPB’s chief in 2017, the controversial Cesar Montano, was also flagged for spending P2.276 million for foreign travels in that year. Montano’s deputy for International Promotions spent P1.97 million, which COA deemed “excessive and impaired TPB’s compliance” with its mandate under the Tourism Act to be “most economical.”

  • RTVM

At the RTVM, the broadcast crew that always tails Duterte wherever he goes, auditors wanted an investigation of overpriced local airline tickets.

Calling the “excess payments illegal,” auditors compared their liquidation report with costs verified with Philippine Airlines, and discovered that tickets for their April trips were overpriced by P459,323.

RTVM admitted to COA that they did not verify supporting documents. COA recommended to “investigate whether RTVM personnel were involved in the controversy, and file the corresponding charges, if warranted.”

On top of that, RTVM was found to have had excessive cash advances for its travels, as much as P4.579 million. In 2017, the refunds of excesses “went as high as 93.07%.”

Delays in the submission of liquidation documents may not have been encountered, but the grant of excessive Cash Advances itself unnecessarily exposed said cash to the risk of loss, theft or misuse,” said COA.

Duterte has already signed an Executive Order that prohibits junkets and limits business-class travel for government officials.

NGO Problems

The pork barrel scam, one of the biggest corruption scandals in the history of the Philippine government, involved irregular transfers to questionable non-governmental organizations or NGOs.

The scandal prompted the Supreme Court to declare unconstitutional the Priority Development Assistance Fund (PDAF) or discretionary funds, which were largely misused using NGOs as conduits.

It turns out that in 2017, agencies have still so far failed to account for anomalous transfers to NGOs that go as far as back as 10 years. This means millions remain unliquidated or unrecovered.

There are 28 agencies that suffer from this problem, two of them have already been shut down – the National Agribusiness Corporation (NABCOR) and the Philippine Forest Corporation. Both defunct agencies are still being audited and have yet to liquidate tens of millions of pork barrel transfers to NGOs.

Of the 28 agencies, the Philippine Veterans Affairs Office (PVAO), Philippine Council for Industry, Energy, and Philippine Council for Industry, Energy and Emerging Technology Research and Development (PCIEERD) and the National Commission on Indigenous Peoples (NCIP) had the most recent flagged transactions with NGOs.

  • Philippine Council for Industry, Energy and Emerging Technology Research and Development

The PCIEERD transferred, through implementing agencies (IAs), P303.78 million to NGOs, but these funds remained unliquidated when COA did its audit report for 2017. 

This was the offered justification: “The most common cause of non-compliance by the IAs of their obligation was that the project team focused more on the field work and not much on the administrative tasks. Also, it takes quite some time for the Accountant to verify the transactions reported in the Financial Reports.”

  • Philippine Veterans Affairs Office

For PVAO, auditors found that fund transfers worth P9.444 million to the Filipino War Veterans Foundation (FILVETS) were unliquidated. Auditors also flagged deficiencies in the contracts with FILVETS, such as the lack of a record of what service or good the veterans received under the project.

  • National Commission on Indigenous Peoples

As for NCIP, fund transfers worth P160,000 to farmers and fisherfolk cooperatives were also unliquidated.

As Duterte reached the halfway mark, his anti-corruption campaign will have more teeth if there is a more proactive action to strengthen COA and use its audit reports to slowly, but surely, clean up government. 

– with research from Jane Bautista, Frances Roberto, Jomar Villanueva, Flint Gorospe, Josiah Antonio and Dana Cruz/ 

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Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email or tweet @lianbuan.