COA calls out Capitol for ‘loose’ internal audits

By: Gerome Dalipe

STATE auditors told the Iloilo Provincial Project Monitoring and Implementing Unit and internal auditors to review and verify the documents attached to liquidation reports of at least three proponent groups.

This is due to the failure of the Iloilo Provincial Government to verify the supporting documents filed by the proponent entities in their liquidation report in 2018.

The practice is contrary to Sec. 4-4-3.1(d) of the Philippine Rural Development Project (PRDP) Financial Management Operations Guidelines.

This resulted in the crediting of expenses which exceeded the amount authorized in their work and financial plan and those which were not related or necessary in their operations, according to the Commission on Audit (COA).

“Although, all of the liquidation reports were passed in audit by the Province’s Internal Auditor, deficiencies in the supporting documents were still observed,” read the COA report.

Sec. of the Philippine Rural Development Project (PRDP) Financial

Management Operations Guidelines requires proof of verification by the Provincial Government official on the validity of the documents submitted by the proponent group.

The three proponent groups are Bingawan Organics and Natural Farming Advocates Association, Inc. in Bingawan, Iloilo; Travel N Tours, and Central Panay Green Revolution Association Inc.

Liquidation report submitted by Bingawan Organics showed that P104,753 of the P479,944.433 liquidation was credited despite of supporting documents that did not relate to their operations and utilization of supplies that were not substantiated.

Bingawan Organics installed an electricity line last Sept. 14, 2017. However, the liquidation report showed payment of electricity expenses from July 26, to Oct. 26, 2017.

Likewise, the electric bills were not in the name of Bingawan Organics, but of someone else.

Bingawan Organics also purchased 367 liters of fuel totaling P10,110 purportedly for its operations.

While they allotted a budget for fuel in their submitted work and financial plan, the necessity of such expenses was not substantiated.

Likewise, there was also no proof that Bingawan Organics has its own vehicles or equipment that uses fuel, the auditors said. Thus, it casts doubt whether such was actually used for its operations.

The auditors also said the P10,000 used for the salaries of two Bingawan Organics was irregular, pursuant to Sec. 4.4-3.1(e) of the Financial Management Operations Manual.

On the other hand, the auditors said the Provincial Government paid P80,000.38 to a travel agency for the hauling services of 83 tons of substrates or mudpress.

This despite the fact the company signified that logistic, hauling, and trucking was not one of the services offered.

There was no other supporting document attached to validate that the said travel and tour company was authorized by the Securities and Exchange Commission to perform

hauling services, casting doubt on the integrity of the transaction, the auditors said.

Lastly, the Central Panay’s liquidation report showed that P40,000 out of the P186,000 utilized the fund to procure 32 pieces of drums.

But a review of their work and financial plan revealed that only P20,000 was budgeted, but the cost of procured drums totalled to P40,000.

The Financial Management Operations Manual requires the local government unit’s internal auditor to audit the fund utilization report submitted by the Provincial Government.

Thus, auditors said the verification of the attached documents should also be simultaneously carried out.

“The purpose of Internal Audit is to give assurance that the fund was utilized for the purpose it was intended, and to ensure that all supporting documents are proper, legal and valid,” the auditors stressed.

Likewise, the auditors urged provincial accountant to reverse the credited amount and require the Provincial Government to submit documents to support the propriety of the expenses.