EXECUTIVE SUMMARY

A. Introduction

Republic Act (RA) No. 9165, also known as The Comprehensive Dangerous
Drugs Act of 2002 bolsters the role of the Philippine Drug Enforcement System. It
also redefines the Dangerous Drugs Board (DDB) as a policy and strategy-
formulating body by creating the Philippine Drug Enforcement Agency (PDEA) as
the leading agency amongst all other law enforcement agencies in the fight against
illegal drugs.

As an implementing arm of the DDB, among its mandate is to exercise

operational supervision over drug enforcement units of other law enforcement
agencies and to coordinate the participation of other sectors in the national anti-drug
campaign.

The PDEA is headed by Director General Wilkins M. Villanueva with the rank
of Undersecretary. He is assisted by two Deputy Director Generals, one for Operation
and the other for Administration, both with the rank of Assistant Secretary.

As provided under RA No. 9165, PDEA has 10 national staff services, namely:

1. Administrative and Human Resource Service

2. Financial Management Service
3. Logistic Management Service
4. Intelligence and Investigation Service
5. Internal Affairs Service
6. Plans and Operations Service
7. Legal and Prosecution Service
8. Compliance Service
9. International Cooperation and Foreign Affairs Service
10. Preventive Education and Community Involvement Service

The law also provides the establishment of the PDEA Academy to oversee the
recruitment and training of all its agents and personnel, as well as the formulation of
programs of instruction for career and specialized anti-drug training courses. PDEA
also maintains and supports 17 Regional Offices (ROs) and 31 Satellite Offices
nationwide.

As of December 31, 2020, a total of 3,133 personnel composed the

organizational structure of PDEA, of which 2,814 were permanent, 161 job orders
and 158 contractual personnel.

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B. Operational Highlights

Below are the reported accomplishments of PDEA for the Calendar Year (CY)
2020:

Organizational Outcomes / Accomplishment

Performance Indicators Target Actual Percentage
Dangerous Drugs Supply Reduction and
Suppression Program

Output Indicators

 Percentage of high value targets 35% 56.52% 161.49

arrested in total arrests

 Number of high impact operations 325 372 114.46

conducted during the year

 Percentage of drug-related 25% 55.73% 222.92

information and reports acted upon
which resulted to anti-drug
operations

C. Financial Highlights

The financial position, financial performance and sources and utilization of

funds of PDEA for CY 2020, with the corresponding figures for CY 2019, are shown
below:

Amount (P)
Particulars 2020 2019
(As Restated)
Financial Position
Assets 2,106,455,864.36 2,007,429,244.92
Liabilities 299,679,998.89 401,819,817.73
Net Assets Equity 1,806,775,865.47 1,605,609,427.19
Financial Performance
Revenue 215,400,000.00 48,521,400.00
Current Operating Expenses 2,699,570,824.81 2,697,049,210.08
Net Financial Assistance/Subsidy 2,687,640,447.29 2,687,188,862.93
Gains 1,512,505.29 1,626,277.45
Losses (2,449,239.66) (11,318.70)
Surplus/(Deficit) for the year 202,532,888.11 40,276,011.60
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 Amount (P)
Particulars 2020 2019
(As Restated)
Sources and Utilization of Funds
Appropriations 2,969,973,217.00 2,510,298,935.00
Allotments 2,919,673,217.00 2,517,375,935.00
Obligations Incurred 2,916,639,075.45 2,535,388,935.02
Disbursements 2,463,006,753.24 2,481,099,298.22
Unobligated Allotments 3,034,141.55 -

The Statement of Appropriations, Allotments, Obligations, Disbursements and

Balances for CY 2020 is shown in Annex A.

D. Scope of Audit

The audit covered the accounts and operations of the PDEA for CY 2020. It
was conducted to: (a) ascertain the level of assurance that may be placed on
Management’s assertions on the Financial Statements; (b) determine the propriety of
the transactions as well as extent of compliance with laws, rules and regulations; and
(c) determine the extent of implementation of prior year’s audit recommendations.
Moreover, the audit was conducted in accordance with International Standards of
Supreme Audit Institutions (ISSAIs).

E. Auditor’s Report on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of presentation of the

Financial Statements of PDEA as at December 31, 2020 because of the unrecorded
issued Inventories totaling P113,597,619.48 due to the non-preparation and monthly
submission of the Report of Supplies and Materials Issued by the Property and/or
Supply Custodian to the Accounting Division as basis in preparing the Journal Entry
Voucher (JEV) to record the supplies and materials issued, resulting in overstatement
of the Inventories and Accumulated Surplus accounts by the same amount as at
December 31, 2020.

F. Other Significant Audit Observation and Recommendations

The following are the other significant audit observations and the
corresponding recommendations.

1. The balance of the Advances for Operating Expenses account had accumulated to
P11,356,694.19 as at year-end due to the delayed liquidation of CAs disregarding
the provisions of COA Circular No. 97-002 dated February 10, 1997 on the grant,
utilization and accounting of CAs; thus, making the CA susceptible to loss or
misuse or theft, while long-kept supporting documents might be misplaced. In
addition, the practice of waiting for the full utilization of the CA and refund of
the unused balance to close their accountabilities resulted to the total refunded
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 amount of P261,976.25 to the Bureau of the Treasury which reduced the cash
allocation of the agency. (Paragraph No. 2)

We reiterated our prior year’s recommendation and Management agreed to study

the possibility of assigning one AO per region instead of different AO for
different purposes and maintain the CA on replenishment method of liquidation
for the regular cash advances.

The above findings were discussed with Management Officials concerned in the
exit conference held on June 9, 2021. Their views and comments were incorporated
in the report, where appropriate. Details are presented in the Part II of this report.

G. Implementation of Prior Year’s Audit Recommendations

Of the six audit recommendations embodied in the Annual Audit Report

(AAR) of CY 2019, five were implemented and one was not implemented. The
details are presented in Part III of this report.

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