Irregularities uncovered in vehicle rentals of peace adviser’s office

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Irregularities uncovered in vehicle rentals of peace adviser’s office
(UPDATED) The Commission on Audit says the numerous vehicles used by the OPAPP were 'unconscionable and excessive'

MANILA, Philippines (UPDATED) – The Commission on Audit (COA) found that the Office of the Presidential Adviser on the Peace Process (OPAPP) spent at least P45 million on vehicle rentals in 2014 – 469% more than the appropriated budget.

According to state auditors, OPAPP did not follow its P7.97 million ($168,660)* appropriation for motor vehicle rentals as stated in its financial plan and schedule expenses. Instead, it incurred a total of P45.24 million ($957,000).

The audit report released by COA on December 18 also showed that the office rented a total of 294 vehicles in 2014 – 89 units on a monthly basis, and 205 on a “per activity” arrangement.

The rented cars were in addition to the 56 vehicles already owned by the agency.

COA pointed out in the report that OPAPP channeled funds from other programs for the shortfall without prior approval from the Department of Budget and Management (DBM).

Under the National Budget Circular Number 446 in 1995, rental of motor vehicles for more than 15 days is subject to approval by the budget secretary.  

“We verified compliance of OPAPP to the above requirements and found that 89 motor vehicles rented on a monthly basis for CY 2014 were not covered by an authority from the DBM,” the state auditors said in the report. “The necessity of renting 294 motor vehicles cannot be adequately established since the purposes or activities were not always indicated in the supporting documents.”

COA required OPAPP to submit records of all vehicle rental transactions in 2014 through letters dated January 16 and February 23.

The office, however, was only able to present the documents of 37 vehicles – 20 in Mindanao and 17 in Metro Manila.

However, according to Undersecretary Luisito Montalbo, OPAPP obliged with the necessary requirements by COA in January 2015.

“OPAPP has always maintained its commitment to good governance, especially to transparent and accountable management. It is for this that we have consistently practiced due diligence in the implementation of our programs, and strict compliance to government auditing and accounting rules and regulations,” he said.

Too much cars?

Auditors are also asking OPAPP to explain the necessity of renting 294 vehicles.  

“The numerous vehicles utilized by OPAPP on its day-to-day operations could be regarded as unconscionable and excessive under COA Circular No. 2012-003,” the COA said. “We recommended that the management explain/justify the necessity of renting said 294 vehicles.”

In a statement, OPAPP said that its vehicle rentals has a legal basis under Section 76 of the Administrative Code of 1987.

Under this clause, the expenditure is allowed given that “motor vehicle would be used by a presidential ad hoc body/agency mandated to perform a specific task within a specific period.”

OPAPP, Montalbo pointed out, is an ad hoc body under Executie Order No. 125, series of 1993.

“It is really per transaction, per need, that we rent vehicles,” Montalbo said. “For us to fulfill our function of monitoring the projects, which are, more often than not, located in hard-to-reach and conflict-affected areas, we have to deploy staff for site visits, community consultations.”

“So for this purpose, we do not have a choice but to rent vehicles,” he added.

Irregularities on papers?

COA stated in its report that the liquidation documents submitted by OPAPP on its vehicle rental expenses had “questionable registration details,” based on the database of the Land Transportation Office (LTO).

Two plate numbers, supposed to be assigned to a Toyota Fortuner and Mitsubishi Montero, weren’t manufactured yet as of April 2015, COA said.

In addition, details of other vehicles indicated in the rental papers did not tally with the official receipts or certificate of registrations (OR/CR) when validated with LTO.

  • A supposed plate number for a Toyota Grandia hired by OPAPP in June 2014 from a rental service in Marikina City is actually assigned to a motorcycle registered in Davao City, according to LTO Region 11.
  • A plate number for a Toyota Fortuner allegedly rented from Barlo Enterprises is still active and assigned to a 1978 Toyota Corona, LTO-Manila West Office disclosed.
  • The plate number of a Hyundai Tucson hired for 14 months also with Barlo Enterprises is actually registered to an Isuzu dump truck.
  • Two other Toyota Fortuner meanwhile were also found to have plate numbers registered to other type of vehicles while another car’s supposed plate number did not match with any unit registered with the LTO.

“OPAPP entered into lease agreement with firms that were not into the business of renting motor vehicles or not registered with the DTI (Department of Trade and Industry) and car lease firms that sub-contracted their services to private individuals to the disadvantage of the government,” the COA said.


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