COA flags DOJ over P621-million fund transfer

MANILA, Philippines — The Commission on Audit (COA) has flagged the Department of Justice (DOJ) over its “undocumented” transfer of P621.6-million unused funds to its ATM payroll account instead of reverting the money to the national treasury in accordance with the rules.

In its annual audit report published on its website on Thursday, the COA said its audit team’s review of several subsidiary ledgers (SLs) revealed that the DOJ transferred a total of P621,646,352.48 from its Modified Disbursement System (MDS) Regular Account with Land Bank of the Philippines to its ATM Current Payroll Account with the same bank in 2017.

“In the analysis of the SLs, we noted that there were transfer of funds where no corresponding payments were made while there were also payments with no corresponding transfer of funds,” the COA report read.

“We believe that the undocumented transfer of funds was all the result of transferring unexpended balance of allotment received from MDS Regular (Account) to Local Currency, Current Account-ATM account,” it added.

The COA said that under National Budget Circular (NBC) No. 567 dated Jan. 3, 2017 issued by the Department of Budget and Management, cash allocations under the MDS Regular Account shall only be valid “until the last working day of the 3rd month of that quarter” and if unused, it must be returned to the Bureau of Treasury.

The COA also cited President Duterte’s veto message for the 2017 General Appropriations Act (GAA), in which he states that “all agency heads are directed to ensure obligation of programs, activities and projects funded under FY 2017 GAA not later than Dec. 17, 2017,” otherwise the unused fund must be returned to the national treasury.

The COA said that during the exit conference with DOJ management, “it was known that fund transfers from MDS Regular account to LBP Current Account were made for unexpended balances of allotments received.”

“The ATM account was used as a parking account for unused NCA (Notice of Cash Allocation) to avoid lapsing,” the COA report read.

“We recommended that the Finance Service stop the practice of transferring funds to the ATM Payroll account for transactions without valid expenditures and to return to the BTr any deposit without valid obligations,” it added.

Worse, the COA said that as of Dec. 31, 2017, the ATM Payroll Account’s balance only stands at P93,602,196.92

The COA said this was “unusually huge” if the real purpose of the fund under the ATM Payroll Account was for the payment of salaries of the employees.

“If accounting for the said transaction had been followed properly, the SL balance of the ATM Payroll bank account should only be the maintaining balance required by the bank or P10,000,” COA said.