COA questions SC use of savings

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COA questions SC use of savings
The COA says the Court declared 'savings' in 2012 even with unpaid obligations that year, and used funds from its 2013 budget to pay for accountabilities incurred in 2012

MANILA, Philippines – Two weeks after the Supreme Court declared as unconstitutional a government program that taps savings for other projects, the Commission on Audit (COA) released a report questioning the Court’s handling of its own savings amounting to P3.19 billion ($73.3 million)* in 2012.

“Our audit revealed that in CY 2012, the Supreme Court declared as savings the total amount of P3.19 billion or 22% of the total Notices of Cash Allocations (NCAs) of P14.72 billion ($338 million) from the Department of Budget and Management (DBM),” COA said in a report released to the media over the weekend.

The  DBM released the NCAs to the SC for its 2012 operations and projects.

NCA releases are based on the Monthly Cash Program (MCP) submitted by an agency to the DBM. The MCP contains a complete breakdown of an agency’s “pre-determined” expenditures including payment for goods and services as they become due.

COA noted that the Court declared “savings” that year even as SC obligations during that period were unpaid. The Court also kept its “savings” and chose to use funds from its 2013 budget to pay for accountabilities incurred in 2012, according to COA.

“We noted…that various claims for transactions totaling P114,426,478.83 ($2.63 million) pertaining to period May to December 2012 were paid only in 2013 because of delay in the submission of required documentations to support the claims,” COA noted.

“Cash allocations intended for 2013 were utilized for 2012 obligations,” it added.

In 2012, the SC was headed by then chief justice Renato Corona until his dismissal in June that year following a historic impeachment trial. Chief Justice Maria Lourdes Sereno replaced Corona in August 2012.

In its reply to the audit findings, SC admitted that it was not the first time it got creative with its budget.

It said various unpaid claims in 2011 were paid out in 2012 because the endorsements for payment were transmitted late.

This means that the “savings” becomes a lump sum that may be rechanneled for any purpose, program or project as long as it is already in existence at the time the national budget was enacted.

A Statement of Allotment, Obligations and Balance (as of December 31, 2012) attached to the audit report showed budgetary allotments for the SC and lower courts in 2012 totaled P15.859 billion ($364.5 million), out of which salaries, allowances, bonuses and benefits of court officials and personnel amounted to P12.384 billion ($284.65 million).

The sum of P3.074 billion ($70.626 million) was set aside for “maintenance and other operating expenses (MOOE)” and P401.473 million ($9.2 million) for “capital outlay (CO).”

However, only the sum of P2.524 billion ($57.98 million) was obligated from the MOOE funding which left an unexpended balance of P549.254 million ($12.6 million).

The same breakdown showed that obligations for capital outlay was only P35.27 million ($810,000), carried over from previous years with not a centavo incurred during the year, leaving an unexpended balance of P366.203 million ($8.4 million).

Added to the P4.94 million ($113,500) balance from payment of Personal Services, the judiciary ended up with a whopping P920,394,097.62 ($21,143,904)  “unexpended balance” from its budget.

COA recommended that the SC should properly monitor usage of funds for the implementation of programs and projects included in its annual budget.

It also insisted that the judiciary should adhere to existing procedures and guidelines in the submission of claims and supporting documents.

JDF usage unclear

COA reported that Judiciary Development Fund (JDF) collection in 2012 dropped slightly to P788.33 million ($18.11 million) compared to P803.6 million ($18.46 million) in 2011.

However, the SC allocated P838.776 million ($19.27 million) of JDF as “cost of living allowances (COLA)” for justices, judges and court personnel and P209.694 million ($4.8 million) for “acquisition/maintenance of court facilities.

This became possible because of remaining funds from previous years which rounded off the total JDF balance to P1.052 billion ($24.17 million).

Auditors said the SC had ignored recommendations made in the 2011 report to draft a system for the proper utilization of the 20% of JDF.

“The corresponding recommendations were not implemented by Management. The absence of guidelines prevented the utilization of the 20% allocation of the JDF for the acquisition/maintenance of facilities of the courts,” the report noted.

COA said the SC should have prepared an Annual Procurement Plan (APP) for repairs or construction of structures, or for the purchase of new equipment as provided under Republic Act 9184 or the Government Procurement Reform Act.

The SC, however, insisted that it needs a free hand to determine which needs of the judiciary must be prioritized, as collections may not be enough to fund all the projects earmarked against the 20% portion of the JDF.

Under this system, the power to approve usage for the said funds is wielded by the Chief Justice or the SC en banc.

COA, however, said this procedure currently being observed by SC runs counter to the provisions of Presidential Decree 1949 that created the fund. –

*$1 = P43.5

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