PCGG didn’t account for $50M from Marcos–COA

Even the main government agency tasked with recovering billions of dollars in Ferdinand Marcos’ ill-gotten wealth overlooked a simple auditing procedure.

The Philippine Commission on Good Government failed to record in its book of accounts some $50 million in Swiss deposits held in escrow at the Philippine National Bank in violation of rules, the Commission on Audit has observed.

In view of this lapse, transaction documents were not submitted for auditing, and the fund was not accounted for and its disbursement was not audited, the COA said in its 2010 annual audit report on the commission.

“Except as may otherwise be specifically provided by law, or competent authority, all money and property officially received by a public officer  in any capacity or upon any occasion must be accounted for as government fund and government property,” it said, citing Presidential Decree 1445 or the Auditing Code of the Philippines.

The money was part of the Swiss deposits of the Marcos wealth that had been forfeited in favor of the Philippine government.

The Supreme Court ruled in July 2003 that the forfeited deposits be transferred and deposited in escrow at the PNB. It stood at $658.1 million, plus interest, as of January 2002. Two years later, the Sandiganbayan issued a writ of execution for the transfer of the deposits.

In its 2007 annual audit report, COA noted that only $624 million was transferred, leaving a balance of $34.1 million.

The COA said that in October last year it inquired from new PCGG Chairman Andy Bautista about the status of the cash balance of the Swiss deposits with PNB, but did not receive any reply.

As of October 2010, the fund retained with the PNB amounted to $50.4 million, consisting of $20 million representing the balance of the 5 percent litigation fund retained by the PCGG for the recovery of the Arelma account in the United States and the WestLB Fund in Singapore, and the $30.4-million WestLB Fund.

COA also observed that from 2004 to 2010, the PCGG disbursed some $3.9 million for travel alone from January 2004 to September 2010.

“The PCGG use of this fund was marked by the following attributes: Apparently unliquidated; illegally disbursed; clearly excessive, and in some instances, ultra vires, in that it was used for travels clearly beyond the stated parameters of the fund,” it said.