The Commission on Audit (COA) called out the Department of Agriculture (DA) for “unliquidated and unsupported” fund transfers amounting to P22.128 billion as of end-2017.
The funds, according to the COA’s annual audit report on the DA, were transferred to implementing agencies (IAs) and nongovernment organizations/peoples organizations (NGOs/POs) a decade ago.
The report noted that about P1.95 billion, or nearly 9 percent, of the total funds in question are considered “dormant” as these have been released 10 years ago.
“Considering that the fund transfers were granted several years ago, there is a strong possibility that the funds had already been expended and the projects/activities should have been completed,” the state auditors said in the report.
“The likelihood of occurrence of misuse of funds is also high due to lack of liquidation of the fund transfers,” they added.
In terms of source breakdown, the DA’s total fund transfers to local government units (LGUs) were the highest unliquidated amount at P11.53 billion.
This was followed by dues from national government agencies which tallied to P3.6 billion over the years.
The DA’s unliquidated fund transfers to government-owned and -controlled corporations and NGOs/POs accumulated to P4.116 billion and P1.121 billion, respectively.
Among the factors cited by the COA report that lead to the accumulation of DA’s unliquidated fund transfers over the years were lack of monitoring and enforcement on the submission of liquidation reports.
In particular, the COA report noted that the memorandum of agreement between Bureau of Animal Industry (BAI) and IAs “lacked the provision on the monthly submission of the Report of Checks Issued and the Report of Disbursements to support the utilization of funds.”
The COA report observed that there was a failure in the part of the management of Bureau of Soils and Water Management and Foreign Assisted Projects “to closely monitor and enforce the submission of liquidation reports by AIs.”
In the case of the Cordillera Administrative Region (CAR), the COA report said its LGUs did “not bother to liquidate the funds on time as required.”
The state auditors noted that there was “weak monitoring policy over the project implementation and utilization due to lack of personnel.” The change of leadership in LGUs also affected project implementation, according to the report.
The COA report said the DA also made fund transfers to IAs amounting to P54.115 million that “were not duly supported contrary to COA Circular 2012-001 dated June 14, 2012.”
“We recommended and the management agreed to instruct all DA offices to send demand letters to IAs/NGOs/POs to compel them to submit the liquidation reports, as well as the progress reports/terminal reports and/or require refund of the unused funds, if any; and request for write-off of dormant fund transfers in accordance with COA Circular 2016-005,” the COA report read.
The state audit agency required the DA “to submit the lacking documents for fund transfers to IAs to avoid disallowance.”