MONEY CHANGED HANDS

Of the P632.9 million in unliquidated cash advances and receivables, COA said P375.66 million was granted to various disbursing officers, including P222.98 million granted for foreign travels to just one Cashier. 

Further verification by COA showed that “the Cashier who was granted such cash advances has not been a member or party to such foreign travels.”  The practice, the report stressed, “is an indirect violation” of COA Circular 97-002, which says the “transfer of cash advance from one accountable officer to another shall not be allowed.” 

The COA report added: “The cash advances on foreign travel granted to the Cashier who was not a party to the said travel could not directly/personally perform an act such as making disbursements and taking care of receipts where he/she is not present to such travel.  This indicates that a person other than the one who was granted such cash advance made the disbursements abroad.”

UNBOOKED LOANS

Apart from unliquidated cash advances, COA for the second year in a row took issue with the unbooked “loans” that the presidency granted in 2003 and January 2004 under the so-called “Isang Bayan, Isang Produkto, Isang Milyong Piso” Program.  

Arroyo institutionalized the program under Executive Order 176 in 2002, supposedly “to stimulate local economic activity and growth of small and medium enterprises (SMEs).” 

Under the program, the president allocated a million pesos each to every city or municipality in the country. The amount went to individual “borrowers” who were reportedly granted not a doleout but a “loan” with six-percent interest, payable every three months to the Land Bank of the Philippines, across a four-year period. 

Arroyo's EO listed, among others, the Land Bank and the Small Business Guarantee & Finance Corp. (SBGFC) as funding sources, and the Department of Trade and Industry (DTI) as the lead agency.  

The funds were in truth sourced from the President's Social Fund (PSF), a discretionary account Arroyo controls, and which is funded by the presidency's share in the net earnings of Pagcor and PCSO. 

But the COA audit of the PSF showed deficiencies in the Fund. These include P216.5 million “loans” granted in 2003, and P52.9 million granted in January 2004 — all not recorded in the books.    

No subsidiary records were maintained for each “borrower,” and neither were accomplishment and financial and terminal reports required and submitted, the COA revealed. 

When COA requested records on the “loans,” Malacañang's Director of Finance gave a peculiar explanation. According to the report, “(the) Finance Director…stated that all these documents are being stored in the Office of the Special Projects at the Presidential Management Staff and which were not submitted/attached along with the Dvs (disbursement vouchers) due to the bulkiness of such documents but can be available for verification anytime.”