Recurring deficiencies open opportunities for corruption – former COA chief Mendoza

Former COA chief Heidi Mendoza (File photo from an INQUIRER.net video)

MANILA, Philippines — President Rodrigo Duterte is right in saying that audit reports don’t mention public funds going to private pockets, but the repeated noncompliance with procurement laws and recurring accounting deficiencies by government agencies open opportunities for corruption, former Commission on Audit (COA) chief Heidi Mendoza said on Wednesday.

The government auditing body has recently been releasing accounts of the manner and amounts of taxpayer money used or not used by state agencies in the past year as part of its mandate to publicly disclose its annual audit reports, and one of the most controversial was about the Department of Health (DOH).

The COA cited numerous deficiencies in the use of a P67.3-billion pandemic response fund by the DOH, which undermined the timely and efficient response to the COVID-19 emergency last year.

It also reported that P11.8 billion of this amount was untapped, that more than P95 million in medicines and supplies were wasted and that the DOH failed to use P59.124 billion of its P200.9-billion budget in 2020.

“I am not saying there was corruption. The President was right,” Mendoza, former COA officer in charge, said in an online forum.

Defense of Duque

Mendoza was reacting to the president’s defense of the DOH and Health Secretary Francisco Duque III, saying the P67.3 billion was not stolen.

Duterte said the COA’s reports tainted the various government agencies and their heads with “corruption by perception.” He told the DOH to ignore the state auditing body.

“But the increased compliance issues, increased accounting deficiencies — they lead to increased opportunities for corruption,” Mendoza said.

“When there is a high level of compliance risk and the operating environment is permissive, like lockdowns and relaxed internal controls and audit, it’s conducive to corruption,” she said.

She said recurring findings from previous audits which may not have been addressed well by the COA would compel state auditors to find their root causes, including possible fraud.

“If the findings are there every year, we need to ask deeper questions. What is the implication on control mechanisms? Is this intentional?” Mendoza said.

Keeping neutral face

She said that the COA must remain objective and unblemished by politics and that the “audit report has to have a neutral face.”

“When I was with the COA, I sometimes felt that I wanted to answer certain issues. But I couldn’t. We have to balance the interest of the management (the agency up for audit). It wouldn’t do us good if the management was angry at us,” Mendoza said, recalling instances of doors being closed to state auditors.

Audit reports, she said, should be seen as “a vessel” to correct an agency’s lapses or deficiencies and that the COA should be considered a partner in governance and “the face of accountability.”

She also defended the agency from criticisms that it released the annual audit reports prematurely.

“It’s not premature, because there was an exit conference done. The management has submitted documents. And their compliance to the recommendations are included in next year’s monitoring of previous recommendations,” she said.

Good sign for 2022

Mendoza said Filipinos were becoming more interested in demanding accountability from government agencies in using public funds and that’s a good sign for the 2022 elections.

There is hope that voters may choose better leaders if they are interested in good governance and accountability, said Mendoza, a senior convener of the 1Sambayan opposition coalition.

“Citizens have an increased attention toward accountability. The people are learning to participate and are aware of the importance of accountability. We should take advantage of this,” Mendoza said.

“I am simply saying, if our citizens will continue to demand accountability and appreciate the value of audit reports, I think there is hope that they will choose good candidates.”