COA: DOST fails to collect P251M

The Department of Science and Technology (DOST) has failed to collect some P251 million from the beneficiaries of its flagship Small Enterprise Technology Upgrading Program (Setup), meant to empower micro, small and medium enterprises, the Commission on Audit (COA) revealed.

Under the program, qualified beneficiaries receive financial assistance, with the commitment to refund the money to the DOST once they start earning.

However, in its annual audit report, the COA said that due to premature termination of some contracts, the DOST failed to collect millions meant to be returned to them, the COA said.

“Other receivable balances pertaining to Setup projects include P461.150 million past due accounts for over one to 10 years, of which P251.040 million reported with uncollected refunds due to the inadequate/ineffective monitoring and evaluation on the viability of projects,” the COA said.

The rules of the program include the refund as part of the project proposal. Beneficiaries are required to state the dates that they expect to pay the loans. The beneficiaries are also tasked to give postdated checks to the DOST to ensure proper collection of the loans.

Unsuccessful businesses

But since the businesses of the beneficiaries were not very successful, this led to the DOST’s failure to collect, the COA said.

“Termination of contract agreements by various beneficiaries was due to the following: weak market demand, health problems of the owners, internal conflicts with the organization, low sales and others which ultimately led to nonpayment of their obligation to the government,” the COA said.

The audit body also flagged the “lax enforcement” of the provisions of the memorandum of agreement between the DOST and the beneficiaries as another factor for the millions of pesos which remain uncollected.

In its recommendation, the COA said the DOST should conduct a technology needs assistance to evaluate the viability of the proposals, prior to approving them.

“Include in the selection criteria of prospective proponents the stability of proponent’s business and its target markets to ensure returns on government investments and the attainment of the objective of bringing science and technology for countryside development,” the report said, adding that the department should also intensify its monitoring, after the release of funds.

The DOST has agreed to comply with the recommendation.