COA: P900-M Malampaya funds went missing in 2 months

MANILA - In a span of only two months, P900-million worth of Malampaya funds suddenly went missing, the Commission on Audit said in a report released late Saturday.

The two months ran from the moment former Department of Agrarian Reform (DAR) Undersecretary Narciso B. Nieto sent a letter requesting the Department of Budget and Management (DBM) to release the sum for typhoon-stricken farmers on October 22, 2009, until the day the last check went out on December 23, 2009.

The report covered only funds channeled through DAR purportedly to help rehabilitate agrarian reform communities ravaged by typhoons Ondoy and Pepeng.

Not a single centavo of that money went to the supposed recipients as the whole transaction was plagued from the very start by phony documents, bogus non-government organizations (NGOs) and fake lists of agrarian reform beneficiaries (ARBs), the report read.

COA listed the 12 NGOs and the amount they siphoned off from public coffers as:

- Karangyaan Para sa Magbubukid Foundation Inc. (KPMFI) - P82.5M;
- Gintong Pangkabuhayan Foundation Inc. (GPFI) - P82.5M;
- Kaupdanan Para sa Mangunguma Foundation Inc. (KMFI) - P75M;
- Kasaganaan Para sa Magsasaka Foundation Inc. (KPSMFI) - P75M;
- Dalangpan Sang Amon Utod Kag Kasimanwa Foundation Inc. (DSAUKKFI) - P75M;
- Ginintuang Alay sa Magsasaka Foundation Inc. (GAMF) - P77.5M;
- Bukirin Tanglaw Foundation Inc. (BTFI) - P75M;
- Abundant Harvest for People's Foundation Inc. (AHPFI) - P75M;
- Tanglaw Para sa Magsasaka Foundation Inc. (TPSMFI) - P72.5M;
- Saganang Buhay Sa Atin Foundation Inc. (SBAFI) - P80M;
- Micro-Agri Business Citizens Initiative Foundation Inc. (MABCF) - P55M;
- Masaganang Buhay Foundation Inc. (MBFI) - P75M;

Letter to DBM

A letter-request by Nieto to the DBM on October 22, 2009 sent the ball rolling, according to government auditors.

Nieto's letter cited supposed appeals for assistance by 97 mayors in behalf of farmers badly affected by Ondoy and Pepeng.

COA, however, noted that there were only 28 letters from mayors received by DAR between October 19 and 21, 2009. The others only came in after Nieto has sent his request to DBM.

COA added the letters did not even come from the mayors themselves, but from the NGOs that were supposedly endorsed by LGUs to implement the projects.

"The request was not supported with any statistical data or analysis on purported farmer beneficiaries, much more the effect of the typhoons on them. There was even no proof that the requests were received by DAR on said dates. These are red flags that raised serious questions on the authenticity of the requests and purposes," COA said.

Nieto claimed good faith and said he only acted upon the instructions of then DAR Secretary Nasser C. Pangandaman, who told auditors through a counsel, that the project was above board and that he was unaware of any irregularity in the implementation.

DAR Director for Finance Management Service Teresita Panlilio said she presumed that the selection of NGOs was compliant with existing laws and regulations since the transaction was "government-to-government" or DAR to LGUs.

But the audit team pointed out that the rules only allow NGOs to implement government projects if there is a specific law designating them as implementing agencies.

"These transactions cannot likewise be considered government-to-government as claimed by Dir. Panlilio since DAR released the funds directly to NGOs and not to the concerned LGUs," COA added.

According to the supposed memorandum of agreement signed between DAR and the NGOs, the latter were to distribute various agricultural tools, protective gear, organic fertilizers, soil conditioners and seeds to farmer beneficiaries.

Verifying actual delivery, however, proved difficult for auditors because of lack of support documents in the liquidation report, including the identities of beneficiaries, their addresses and acknowledgment receipts.

Auditors also had a hard time establishing regularity because all 12 NGOs have long disappeared along with the money. - ABS-CBN News