The Supreme Court (SC) has been, if anything, too slow in using the World Bank loan for its Judicial Reform Support Project (JRSP) that it had to pay P1 million in commitment fees to the bank in 2010 and P15.86 million in commitment fees from 2004 to 2010, according to the Commission on Audit (COA).
Lenders charge commitment fees for funds that recipients fail to disburse as scheduled.
In its 2010 report on the Supreme Court, the COA said there was more than P4 million in unliquidated balances at the end of 2010 because of excessive cash advances.
In that same year, the COA said there were misstatements in accounting records, noting that there was a P5.1 billion difference between the book balance and balance of the cash in bank-local currency savings account. The difference was because of unrecorded or uncorrected items that were not adjusted by the end of 2010.
In its report, the audit agency said the Supreme Court had a low availment rate in the loan for the JRSP that it took from the International Bank from Reconstruction and Development (IBRD), one of the five institutions that compose the World Bank Group.
As a result, the high court was made to pay P1.079 million in commitment charges for the unwithdrawn principal amount of the loan in 2010.
It also noted that from 2004 to 2010, the government actually paid $314,083, or P15.86 million, in accumulated commitment fees.
The loan agreement with the IBRD for the project was drawn up in 2003 and amount of the loan was $21.9 million.
Project delays
According to COA, the scheduled loan availment for 2010 was P366.528 million, but the actual availment made by the Project Management Office (PMO) was only P34.752 million.
This was attributed to delays in the implementation of the project to rehabilitate and develop model courts, the COA said.
It noted that the construction of the Lapu-Lapu Hall of Justice and the feasibility study and engineering design for the Manila City Hall of Justice were completed by the end of 2010.
But the accomplishment and completion rate for the construction of the Angeles City Hall of Justice was just 44.65 percent. Construction was stopped in 2009 because of internal problems with the contractor. The PMO has been tasked to draw up new terms of reference and to search for a new contractor to complete the project.
Implementation issues
“With the reorganized component of the Supreme Court’s committees that oversee and coordinate the efficient and effective implementation of the JRSP programs/projects, there were still implementation issues during the year which resulted in the delay in the procurement and payment of works, goods and services. Hence, the World Bank continued to charge commitment fees on the Philippine Government account,” the COA said.
In its response to the COA report, the Supreme Court told the audit agency that it has taken steps to address the findings. It said periodic implementation review missions were being held to identify the strengths and weaknesses of the project.
Specific activities with corresponding budgets have been mapped out, with heavy emphasis on meeting deadlines. PMO staff members also serve as focal persons to fast-track the implementation of projects, the high court said.
Unliquidated
As for the P4 million unliquidated amount by the end of 2010, the COA said this resulted from the Supreme Court’s failure to strictly monitor the granting and liquidation of cash advances.
It said there were excessive cash advances because of an overestimation in the allocation of the budget for training seminars and conferences. Cash advances were also granted even if previous ones had not been settled yet.
Some of the advances were granted to court employees, including those from lower courts, for official travel and special purposes.