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COA flags PCSO for not remitting dividends worth P8B to national gov’t

/ 05:06 PM July 10, 2019

MANILA, Philippines — The Commission on Audit (COA) has called out the Philippine Charity and Sweepstakes Office (PCSO) for not remitting half of the annual dividends, which amounts to more than P8 billion, from 1994 to 2016.

COA’s audit report released Monday explained that Section 3 of Republic Act 7656 requires all government-owned or controlled corporations (GOCCs) like the PCSO to declare and remit at least 50 percent of their annual net earnings to the national government (NG).

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As the PCSO has P16.85 billion reported net earnings from 1994 to 2016, it should have remitted P8.426 billion.

“This is a reiteration of the audit observations as management has not complied yet with the recommendation to remit dividends due to the NG,” COA explained.

COA said, however, that the PCSO and the Office of the Government Corporate Counsel (OGCC) have previously claimed that the concerned office is not covered by RA 7656 because its net earnings and unutilized balances are converted into Charity Funds (CF).

“PCSO management explained that it does not have annual net earnings. What it generates are savings from operations after deducting all the operating expenses, which are reverted to and formed part of the CF,” the commission said.

“Likewise, the OGCC, in its Opinion No. 198, Series 2016 dated December 20, 2016, stated that PCSO is not covered by RA No. 7656 as its net earnings were already allocated by law and earmarked for certain expenses, and all unutilized balance in any of its funds shall revert to the CF,” it added.

COA, however, clarified in a memorandum released in January 2018 that sections of R.A. 7656 and R.A. 1169 or the PCSO charter — which says that all balance should be reverted as CFs — can be harmonized.

What may happen is that funds can only be converted to CFs after the declaration and remittance of the required dividends.

Still, COA asked the PCSO management to settle the outstanding dividends as the Department of Finance (DOF) made it clear that PCSCO is not exempt from R.A. 7656.

“It is the position of the audit team that the PCSO must comply with the Dividends Law, considering that it was not expressly exempted from the coverage of R.A. No. 7656,” COA noted. /ee

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TAGS: COA, Commission On Audit, dividends, PCSO, Philippine Charity and Sweepstakes Office, Philippine news updates
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