Commission on Audit. INQUIRER FILE PHOTO
MANILA, Philippines – State auditors have reminded the Social Housing Finance Corporation (SHFC) to strictly disburse funds as outlined in its mandate after discovering that more than P3 million in financial assistance given to vulnerable beneficiaries and contractual workers did not satisfy legal requirements.
In a 2020 audit report, the Commission on Audit (COA) told the SHFC to submit the legal basis for its disbursement of P 1.508 million for member beneficiaries and P 1.526 million for institutional contract of service employees, which were given as COVID-19 financial assistance during the lockdowns in 2020.
COA said that the grant of cash aid contravenes its mandate as the lead agency for implementing social housing programs for low-income earners in the formal and informal sectors.
“The grant of financial assistance totaling P 1.508 million to 887 vulnerable member beneficiaries during the enhanced community quarantine is without legal basis and runs counter to the mandate of the SHFC as well as to the Philippine Commission for Women memorandum circular 2020-03 dated April 27, 2020, resulting in the overlapping of functions with other government agencies tasked to respond to the crisis under the Bayanihan to Heal As One Act and Bayanihan to Recover as One Act,” a 2020 audit report on the SHFC read.
Attached to the Department of Human Settlements and Urban Development, the SHFC administers the Community Mortgage Program and the Abot-Kaya Pabahay Fund Program, which are amortization support and developmental financing programs, respectively.
In 2020, the SHFC disbursed P 1.508 million in assistance to 887 member-beneficiaries as cash assistance to homeowners associations and livelihood assistance, of which P 1.408 million was liquidated as of December 31, 2020.
The SHFC also approved a memorandum of its Gender and Development (GAD) officer proposing emergency relief operations, in which the SHFC will set aside P 2 million from its GAD funds to cover P 1,000 cash assistance for each vulnerable beneficiary.
It was to “cushion the impact brought about by the temporary loss of earning capacity because of the ECQ” implemented in April and May 2020 and to supplement food packs from local government units given to poor families.
This is apart from giving P 10,000 in livelihood financial assistance to member-beneficiaries who lost their jobs. Around P 978,000 was allotted under the capacity building/livelihood program.
The COA said the “cash donation and livelihood financial assistance/capacity-building expenses granted to the member beneficiaries have no legal basis and are not in accordance with the mandate of the SHFC.”
The SHFC was told to submit the legal basis for the financial assistance given to member beneficiaries, “otherwise the transaction is considered irregular in the absence of legal authority.”
The COA also reminded the state-run corporation to disburse funds from the GAD budget in accordance with its allowed uses relating to gender and development programs.
In response, the SHFC said the aid is part of its capacity building and livelihood program and is a “specific corporate strategy in helping underprivileged communities to have better living conditions.”
The disbursement was in accordance with its submitted GAD plan and budget under client-focused activities. The emergency relief proposal meant for food packs, safe drinking water and hygiene kits was “shifted into cash assistance due to procurement and mobilization constraints.”
In the same audit report, the COA also called out P 1.526 million in COVID-19 financial aid granted to 454 employees hired through the institutional contract of service.
State auditors said the cash assistance “is without legal basis” as it is contrary to a joint circular of the Civil Service Commission, COA and Department of Budget of Management.
The 454 employees were from the DBP Service Corporation and DBPSC Security Services Inc, which were the independent contractors and with SHFC as the principal.
“The payment was made directly to the ICOS employees despite the fact that there is no employer-employee relationship between SHFC and the personnel of the DBPSC and DBPSCSSI, The disbursement voucher is in the name of the Land Bank of the Philippines, and the bank directly credited the payment to the individual account of the personnel of the ICOS,” the COA noted.
State auditors stressed that since the board left it to the SHFC to approve the financial assistance, the approval in writing should have been included with the disbursement voucher.
The audit team added that the 454 employees received their salaries in full during the ECQ last year when the SHFC implemented a work-from-home and skeletal force arrangement.
The SHFC was told to submit the legal basis for the financial assistance, or “otherwise refund the financial assistance granted to them in the absence of legal authority.”
The agency said the cash aid was “justifiable” to help the employees amid the pandemic, and that it will be considered a “donation” and its approval is within the SHFC president’s authority.