DAR flagged over P948 million unliquidated fund transfer

MANILA, Philippines — The Commission on Audit (COA) has flagged the Department of Agrarian Reform (DAR) over unliquidated fund transfers to various agencies and local government units (LGUs) totaling P948.065 million, which remained outstanding for over 10 years.

In its 2021 annual audit report uploaded on its website on June 29, the COA noted that of a total of P1.031 billion in funds that the DAR has transferred to various national government agencies (NGAs), LGUs and government-owned and controlled corporations (GOCCs) only 8.03 percent or P83.278 million was liquidated as of Dec. 31, 2021, leaving 91.93 percent or P948.065 million unliquidated despite their due dates.

The total fund transfers include P47.421 million from 2021 and P983.922 million from previous years.

The COA said the DAR still failed to compel the recipient agencies to account for the funds that they received even if it had already been called out by the audit team for the likewise very low liquidation of its fund transfers in 2020.

“Despite audit reiterations, CO (Central Office) still failed to monitor the timely liquidation of fund transfers to IAs (implementing agencies) considering that only 1.94 percent liquidations from prior years’ fund transfers were accounted during the year... hence, leaving a huge unliquidated balance affecting the accuracy of the recorded expense accounts and receivable accounts in the financial statements,” the COA said.

The COA pointed out that the same circular also states that the “IA shall return to the SA any unused balance upon completion of the project.”

The COA said a validation by the audit team revealed that of the P254.360 million unliquidated fund transfers to the NGAs, 75.35 percent or P191.656 were outstanding for more than 10 years.

Similarly, the COA noted that of the P474.997 million unliquidated fund transfers to the LGUs 78.65 percent or P373.585 million were outstanding for more than 10 years.

“The audit team also failed to find any proof that (DAR) management called the attention of the IAs/LGUs that received funds for projects implementation, to submit liquidation reports, nor required them to refund any excess funds for completed projects, if any,” the COA said.

The audit body specifically cited DAR’s transfer of funds to the LGUs of Zambales in 2007 to 2009 totaling P24.253 million for supposed construction of farm-to-market roads in the barangays of the municipality of Botolan and for re-gravelling of barangay roads in the municipality of Cabangan.

“The amount is non-moving and has been the subject of our audit observation in the previous year without any liquidation during the year (2021),” the COA said.

As for the unliquidated fund transfers to the GOCCs amounting P131.219 million, the COA said the audit team could not validate their status due to DAR’s failure to submit the subsidiary ledgers (Sls) in violation of Presidential Decree 1445 or the Government Auditing Code.

The COA recommended to the DAR to direct its offices to assign a respective focal person who will be in charge of monitoring the implementation of projects and coordinate with the IAs for the submission of liquidation reports and the return of any unexpended/ unutilized funds particularly for projects already completed and aged over 10 years.

Meanwhile, in the same audit report, the COA also questioned the validity of the DAR’s P287.257 million worth of purchases and other financial transactions due to non-submission of contracts and other supporting documents.

“Copy of government contracts, purchase orders and their supporting documents totaling 5,738 with corresponding amount of P287.257 million were not submitted within the prescribed period and with delays in submission ranging from 1 to 398 days,” the COA said.

“Likewise, review of submitted copies of contracts and purchase orders disclosed various deficiencies,” it added.

Among the deficiencies that the COA noted was the splitting of contracts or dividing the procurements into a series of purchase orders despite the similar nature of items procured. The COA said there were also POs/Job Orders that do not indicate the date of conforme of the supplier.

The COA, nonethelesss, said the DAR had already agreed to the audit recommendation to ensure the proper and timely submission of contracts and POs with supporting documents.

The COA said the DAR also committed to stop the practice of splitting government contracts and POs “to ensure efficiency, transparency and obtaining the most advantageous price in government procurement.”

DOST deficiencies

Meanwhile, the COA has also called out the Department of Science and Technology (DOST) over several deficiencies in the implementation of its flagship program for micro, small and medium enterprises (MSMEs).

In its 2021 annual audit report on the DOST, the COA noted that the agency, particularly its Regional Office (RO) 2 (Cagayan Valley) still has P113.119 million uncollected receivables from the MSMEs that were beneficiaries of the Small Enterprise Technology Upgrading Program.

COA records showed that the uncollected dues were outstanding for over one to 19 years. The audit body said this indicates the DOST’s “inadequate measures” in monitoring the project and enforcing collections.