PALACE  ON  AUDIT  REPORT:  WE  HAVE  NOTHING  TO  HIDE

MANILA, June 2, 2008 (STAR) By Paolo Romero - Malacañang maintained there are no irregularities in the handling and disbursement of funds in the Office of the President (OP) despite a preliminary report made by the Commission on Audit (COA) claiming unliquidated cash advances and other discrepancies last year.

Having unliquidated cash advances in government agencies is nothing new, according to Executive Secretary Eduardo Ermita, since it takes time to collect receipts and other documents to justify the disbursements.

“The (COA) report is factual and things like these are updated so we should not see something illegal just because the report noted some discrepancies that are common in such a huge organization as in any government,” Ermita said.

“This (report) is not something we are alarmed about. We have nothing to hide,” he said.

Ermita said it was understandable the report got attention since it dealt with the Office of the President.

Ermita assured the inconsistencies pointed out by COA would be reconciled once the necessary documents are gathered and organized.

He said the OP is a huge government entity with several offices and agencies under its control and supervision that have to finish also their respective accounting procedures.

Gloria Bundoc, director of the OP Finance Office sent a letter to The STAR, pointing out last Saturday’s article that cited the COA annual audit report contained no statements that was made basis of the report.

“There were however statements, not contained in the report but were made to appear as if to have been lifted from the same document,” Bundoc said.

“These distorted the facts and presented conclusions that created confusion and misunderstanding among the public. For one, management’s comments were not given credit,” she said.

Bundoc said, “it is unfortunate that some sectors have injected opinionated words like ‘diverted’, ‘unbooked’, ‘unusual error’, ‘embarrassing and irregular’ to generate a negative picture of the Office of the President.”

Bundoc stressed the findings in the report are not yet final and are subject to reconsideration and/or appeal to COA.

“What is evident, however, is the fact that all receipts other than the budget were issued official receipts and deposited to the Bureau of Treasury,” she said.

Further, all expenses and obligations adhere to the specific purposes authorized by the Department of Budget and Management Special Allotment Release Order (SARO), Bundoc said.

“The issues at hand are the accounting entries in the books of accounts of the OP,” she said.

Bundoc said the article gave emphasis to the unliquidated cash advances and receivables granted for foreign travels.

“For the record, all the expenses incurred for these foreign trips are receipted for and are fully liquidated as of 2008,” she said.

Bundoc though admitted a discussion on whether a special disbursement officer should join the President’s delegation in foreign travels.

On the issue of “Isang Bayan, Isang Produkto, Isang Milyong Piso,” Bundoc said the program was institutionalized under Executive Order No. 176 in 2002.

Under this program, the government will allot funding assistance or seed capital to every city or municipality qualified small and medium enterprises for six percent interest-bearing loan.

Bundoc said the transactions are fully recorded, accounted and substantiated in the books.

“However, the issue here again is the accounting treatment of the transaction as to whether or not the transaction is to be taken as a loan to OP or a loan to local government units by the OP,” she said.

Bundoc reiterated the fact that the COA report is not yet final “and that any subsequent report on the matter should be made after the findings thereon have become final.”

“We further note that the OP, in its earnest effort to comply with the government accounting and auditing standards, has strongly pursued the adoption of the electronic New Government Accounting System (eNGAS) in order to avoid the recurrence of financial issues and accounting treatment,” she said.

In focus

Lawmakers, however, are divided on whether to put the OP under investigation over the issue.

Senate President Manuel Villar said they would definitely open an inquiry and summon the concerned Palace officials over the unwarranted expenses.

He said the inquiry would be scheduled on the deliberations for the 2009 budget of the OP.

“The finance committee of the Senate can look into these during the deliberations of the budget. We are expecting to get the copy of the proposed 2009 budget in August, a month after the SONA (State of the Nation Address),” Villar said.

Congressmen, particularly administration lawmakers, are expected to defend the OP over its expenses.

“Every president since the late President (Manuel) Roxas has posted unliquidated cash advances in every fiscal year they were in office,” Aklan Rep. Florencio Miraflores pointed out.

“An unliquidated cash advance simply means that expenses incurred were not fully liquidated at the time the audit was held. As to her (Mrs. Arroyo’s) travel, it’s better to have a president who interacts with the people than one who closets herself in her fortress,” he said.

Deputy Majority Leader Arthur Defensor said an unliquidated cash advance “denotes a time lag in the submission of receipts and reports backing up a particular expense.”

“It points to a delay, not an anomaly. Besides, it is not the President who holds cash advances; it is her officials,” he said.

Senior Deputy Majority Leader Neptali Gonzales ll said he is sure the OP “can fully explain and pinpoint where the unliquidated funds are.”

“It’s just a matter of reconciling their records with the COA,” Gonzales said.

Gonzales admitted that during his stint as mayor of Mandaluyong City, there were occasions that they were delayed in liquidating some cash advances. “And this did not mean that we squandered the money,” he said.

For his part, Palawan Rep. Abraham Mitra said the COA report gives the impression that it covers the President’s “inner sanctum only.”

“But Malacañang is a big universe. When we speak of OP, it includes 59 other agencies, offices and commissions, which are clustered under OP,” he said.

This is the reason why loans for One Town, One Product project, which is supervised by the Department of Trade and Industry, are booked as OP expenditures because Malacañang is the “fund originator,” he said.

Palawan Rep. Antonio Alvarez said Mrs. Arroyo’s foreign travel cost “is not big if compared to the expenses incurred by leaders of other countries.”

“By global standards, she travels light. She piggybacks on commercial flights. …And the investments she brings home are many times more than the cost of the trip,” he said.

During the past two years, Mrs. Arroyo has made several trips abroad. She went to Europe twice in three months in the latter part of 2007, with large delegations of allies from the House tagging along in both trips.

As for the President’s donations, Davao del Norte Rep. Anton Lagdameo said the presidency “is one big charity dispensing operations.”

“The funds it gets from Pagcor (Philippine Amusement and Gaming Corp.) are used to aid indigent patients, calamity victims, those whose houses have been razed by fire or blown away by a typhoon. The beneficiaries are in the thousands yearly,” he said.

Lagdameo said it is unavoidable that documentation shortcuts are resorted to in the desire to help victims.

The COA report found the irregular transactions in clear breach of government accounting and auditing rules mark financial transactions in the OP under Mrs. Arroyo in 2007.

The Philippine Center for Investigative Journalism reported that the COA report on the presidency for 2007 contained 11 qualified comments and observations on these erroneous entries – mostly the same errors COA had noted in its 2006 audit of the same office.

COA also pointed out that of the 11 audit recommendations it made in the 2006 audit, only four were fully implemented, three partially implemented, and four was not implemented at all by Malacañang.

Sen. Francis Escudero raised the ethical issue on the reports.

“There is a civil code and code of ethics provision that prohibits ‘extravagance in times or acute public want,’” Escudero said.

He agreed with Villar that the unwarranted spending by the OP might be raised during budget deliberations. –With Jess Diaz, Christina Mendez 


Chief News Editor: Sol Jose Vanzi

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