THE Commission on Audit’s (COA) 2017 annual audit report on the Iloilo provincial government shows how sloppy the administration of Gov. Arthur Defensor Sr. is in handling public funds, particularly the Special Education Fund (SEF) which is supposed to help the youth.

The SEF became the center of discussions after Defensor raised the possibility of pulling out of the Western Visayas Regional Athletic Association (WVRAA) games in February 2019 because he cannot transfer funds to the Department of Education (DepEd) for lack of authority from the Sangguniang Panlalawigan.

The SP cannot authorize the governor to sign the memorandum of agreement with DepEd because it is still deliberating the 2019 budget. The Local Government Code mandates that the SP cannot tackle other issues until the budget for the current year is approved.

But the Budgeting Manual for Local Government Units issued by the Department of Budget and Management stipulate that the provincial government can disburse the SEF for sports activities without the intervention of the SP since it is a special fund.

In its 2017 annual audit report, COA even dissuaded the Capitol from transferring SEF allocations to National Government Agencies (NGAs) and Local Government Units (LGUs) due to liquidation problems.



The audit report said that the Defensor administration did not require the recipient NGAs and LGUs timelines for the implementation of SEF-funded projects, programs and activities (PPAs).

Also, the Capitol did not observe strict monitoring and demand for liquidation, thus fund transfers totaling P87,982,181.82 from the SEF to various NGAs and LGUs remained unliquidated.

The fund transfer scheme in the disbursement of the SEF also resulted in the following problems:

-immediate implementation could not be imposed, depriving target beneficiaries to timely avail the benefits of the PPAs; and

-proper utilization of the fund could not be ascertained, thereby exposing the same to the risk that such was not used for the purpose intended.

The SEF is allocated for the operation and maintenance of public schools, construction and repair of school buildings, facilities and equipment, educational research, purchase of books and periodicals and sports development as determined and approved by the Local School Board (LSB).

Among the budgeted PPAs of the Provincial LSB are the procurement of school equipment, repair/rehabilitation/completion of school buildings and facilities, and sports activities.

COA review of the disbursements on the utilization of the SEF showed that the implementation of its PPAs was delegated to Various National Government Agencies (NGAs)-National High Schools and DepEd Iloilo and LGUs through fund transfers.

From Jan 1 to Oct 31, 2017, fund transfers totaling to P28,600,350.73 and P35,734,313.00 were made to various NGAs and LGUs, respectively.

Monitoring of the liquidation of these transfers and that of prior years revealed that only P19,156,020.50 (or  42.23%) of P45,357,190.95 and P11,076,471.51 (or 15.20%) of P72,857,482.88 were liquidated by various NGAs and LGUs, leaving a balance of P26,201,170.45 and P61,781,011.37, respectively as of Oct 31, 2017.

The table below shows the status of fund transfers from the SEF: