COA questions amount of NIA receivables

The National Irrigation Administration (NIA) has yet to adjust its books to reflect the losses it incurred after President Rodrigo Duterte exempted small farmers from paying irrigation service fees (ISFs).

The Commission on Audit, in its 2017 audit report, doubted the accuracy of the P22.304-billion receivables recorded by the NIA, because it did not provide for the “impairment loss” on the unpaid ISFs.

The unpaid fees of farmers with landholdings of less than eight hectares should have been written off from NIA’s books, because Republic Act No. 10969 — signed into law last February — condoned these liabilities.

Receivables are amounts expected to be collected in terms of debt payments and other unpaid obligations.

Impairment loss pertains to items that suddenly decrease in recoverable value due to supervening events such as new legislation.

No loss provision

Auditors said the NIA’s failure to provide for the impairment loss in its 2017 books meant “the reliability and collectability” of the reported receivables “could not be determined.”

The total amount of forgone debts was not known yet, because the regional offices and even the central office “have not yet prepared the schedules” for the unpaid fees and overdue communal irrigation systems accounts of the small farmers.

Such data should have served as basis for computing the impairment losses.