COA Rundown: Gov’t agencies with deficiencies, irregularities in 2020

August 20, 2021

The Commission on Audit did not single out a single agency as it flagged deficiencies and irregularities it
observed about government agencies under the executive branch in their handling of public funds in
2020.

The COA afterward drew the ire of President Rodrigo Duterte who ranted against the state auditors and
asked them to stop releasing their annual reports.

“Stop that flagging, g**d*** it. You make a report. Do not flag and do not publish it because it will
condemn the agency or the person that you are flagging,” Duterte said.

COA Chairperson Michael Aguinaldo remained steadfast and pointed out their constitutional duty during
a congressional hearing last Tuesday.

“We understand the concern of the President, but of course, to begin with, you know we do not flag; we
observe and recommend. The flagging is actually a term used by media, pero kami, hindi nag-flag.
Because some of our observations are actually positive, hindi naman pina-flash ‘yung positive,” he was
quoted as saying.

“So ayon, pero so far as the work of the Commission on Audit, tuloy pa rin kami, we have a
constitutional mandate, we have to comply with that,” he added.

While state auditors are now caught in the crosshairs of some government officials, they earned praises
and support from Filipinos for holding them accountable for the use of public funds, particularly during
the year when the pandemic hit.

Some social media users have also kept track of the departments and offices COA had already flagged.

They shared screenshots of Google searches about them, a collage of screenshots of news reports, and
even a witty game of bingo.

COA’s annual audit reports are publicly available on its website.

Flagged national government agencies and COA’s findings so far

Based on reports, here are the departments under the executive branch that COA had called out for
irregularities.

 Department of Health – P67.32 billion worth of deficiencies by the end of 2020

 Department of Budget and Management – P95.45 million worth of COVID-19 items from private
suppliers which are “slow-moving”
 Department of Transportation – P2.16 billion undelivered license plates to registered car and
motorcycle owners since 2014
 Land Transportation and Regulatory Board – Only 1% or around P59 million of the P5.58 billion
funds dedicated to PUV drivers and operators were used
 Department of Information and Communications Technology — P170.273 million worth of
laptops, tablets and pocket Wi-Fi devices purchased from a questionable firm
 Overseas Workers Welfare Administration (OWWA) – P1.269 million worth of hygiene kits,
snacks and bottled water purchased from a construction supplier; also P969,920.00 worth of
hygiene kits, sanitary napkins and thermal scanners purchased to a firm which turned out to be
a residential street in Pasay City
 TESDA and NTF-ELCAC – Highly questionable transfer of P160 million worth of TESLA funds to its
regional funds for National Task Force to End Local Communist Armed Conflict (NTF-ELCAC)
projects, citing lack of authority
  Department of Social Welfare and Development – Incorrect or lack of documents for P28 million
released for rebels under the government’s Enhanced Comprehensive Local Integration Program
(E-CLIP) and P4 million released for the Livelihood Settlement Grant (LSG) assistance
 Commission on Higher Education – Only P59.97 billion or 82.34% of its P72.83 billion budget
were utilized
 Department of Education – Lapses in the use of P3.22 billion of DepEd funds as of December 31,
2020
 Philippine Ports Authority – Around P10.8 million worth of infinity pool construction for its
training compound in La Union
 Department of Agriculture – P34.45 billion worth of funds lacked “complete accounting records”
and had “accounting errors/omissions”
 Philippine National Police – Using only 12% or P86.57 million of the P722.95 million worth of
anti-insurgency funds in 2020
 Department of the Interior and Local Government – P3.63 billion in “unliquidated fund
transfers” to government offices, both national and local, and non-government organizations
 Department of Labor and Employment – Several deficiencies in the use of P7.27 billion of P7.31
billion budget for cash assistance programs
 Department of Environment and Natural Resources – Piling up of P46.56 million seized forest
products which resulted to losses to the government; P56.80 million more worth of confiscated
equipment that were left idle
 Department of Foreign Affairs – Underutilized cash allocation that resulted in the return of
39.39% or P8.29 billion to the Treasury; Failure to reconcile ledgers containing P350.76 million
 Department of Energy – Released only 66.57% or P879.40 million of funds out of P1.83 billion
allotment
 Philippine Charity Sweepstakes Office – Paid state-run People’s Television Network P154.21
million worth of airtime and production of lottery draws even without a contract
 Presidential Communications Operations Office – Massive hiring of 375 contractual workers,
resulting in “unnecessary spending” worth P71 million.

COA: Audit reports made public for transparency

Raapler.com | AUG 17, 2021

The Commission on Audit (COA) said on Tuesday, August 17, that it publishes the annual audit reports of
government agencies for transparency.

"COA publishes the Annual and other Audit Reports only in our website for transparency purposes," said
Jonathan Beltran of COA's public information office.

Asked for a statement on their mandate, Beltran cited the Constitution. "Sections 2(1), 2(2) and 3 are
explicit and instructive," he said.

Section 2(1) says COA has the power, authority and duty to examine and audit all accounts of
government, while Section 2(2) says COA also has the exclusive authority to define the scope of the
audit and examination.

COA declined request for an interview on the DOH audit report itself.

"With apologies, we do not grant interviews re: audit of pandemic funds. We refrain from giving
reactions. We also cannot offer any additional information other than those included in our audit
reports. Thank you so much for understanding our situation," Beltran said.

The annual reports are the result of a year-long audit by resident auditors deployed to government
agencies.

Agencies are first given the confidential audit observation memorandum (AOM), which they can answer
or explain.
The public annual report will contain the findings, the agency's explanation, and in some cases, auditors'
rejoinder.

The 1987 Constitution, which created COA, states: "No law shall be passed exempting any entity of the
Government or its subsidiary in any guise whatever, or any investment of public funds, from the
jurisdiction of the Commission on Audit."

COA chairman: 'Tuloy pa rin kami'

COA chairman Michael Aguinaldo told the House of Representatives on Tuesday, August 17, that they
will carry on despite the attacks.

"Tuloy pa rin kami, we have a constitutional mandate, we have to comply with that, you know I do have
a force of about 9,000 people in COA who are very dedicated, very professional, and you know who are
committed to do the work that they do,” Aguinaldo said.

On Facebook, former COA commissioner Jose Fabia responded to the latest verbal attacks on COA,
describing the agency as patriotic.

"COA nating mahal. Tunay na nagmamahal sa bayan. Salamat sa pagtupad sa inyong sinumpaang
tungkulin," Fabia said.

Several senators had also called out Duterte for castigating COA over the audit report, and reminded
him that "no one can dictate" on the commission.

PNP chief meddles

Philippine National Police (PNP) chief Police General Guillermo Eleazar, whose office has no direct
business with the COA, said the agency's audit reports should not be publicized by the media.

"Kaya nga lang, pinakamaganda sana, 'wag na lang sanang ipa-media, kagaya no'ng dating sitwasyon
noon na dire-diretso lang sa amin," Eleazar said during the Kapihan sa Manila Bay event on Wednesday,
August 18.

He added: "Recently napansin namin na talagang lumalabas sa media, at well, we can say na talagang
kapag lumabas 'yon, even though the intention of the COA is napakaganda, pero 'pag isinulat na po kasi
'yan, hindi naman po natin masisi ang ating mga kasamahan sa media, pero kapag nasulat na para bang
nagkasala na ang ating mga ahensya."

Eleazar made the remarks even though audit reports are not given directly to journalists but are
uploaded instead to the COA's website for transparency.

A day after his controversial remarks, Eleazar retracted his statement.

"I stand corrected. During a consultation, which I initiated last night with concerned officials of the
Philippine National Police, the entire process on how disbursements work and up to the level of COA
intervention were discussed. And it was made clear to me that the COA does not issue press statements
and instead posts its audit reports on its website as part of its constitutional mandate for transparency,"
the PNP chief said in a statement on Thursday, August 19.

COA's report on the DOH drew massive public backlash, as auditors found billions of unused pandemic
funds, including P11 billion supposedly for hazard pay of front liners, and more than P3 billion in foreign
aid.

COA also flagged the DOH for transferring P42.4 billion worth of COVID-19 funds to different
government agencies, either for procurement or payment for supplies, or for implementation or fielding
out the programs. These transfers had no required memorandum of agreement and other supporting
documents, "thus posing questions on regularity of transactions," said COA.
Last week, amid negative public sentiment, COA's central office issued a rare press clarification saying
there was no finding that funds were lost due to corruption.

Indeed, annual audit reports do not make corruption findings.

In special instances, COA can do a fraud audit or even a special audit. COA can also issue notices of
disallowance, which has the effect of invalidating the transaction and ordering the agency to return the
money to the national treasury.

COA's lack of prosecutorial power enables agencies to contest these notices for years. It also means that
agencies can ignore the recommendations, but COA can report yearly if the agencies have complied or
not.

The agencies that can launch an investigation even in the absence of a complaint are the Office of the
Ombudsman and the Department of Justice (DOJ). They have done so in the past without the benefit of
an audit report, but both are taking a passive stance and said they will let COA process run its course.

COA chairman Michael Aguinaldo, an Aquino appointee will retire in March 2022.

Commissioner Roland Pondoc was appointed by Duterte in 2018. The 3rd slot in the 3-man commission
is still unfilled, up for Duterte's appointment.