DBM unit sat on P10.87 billion for years, COA finds | Inquirer News
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UNUTILIZED FUNDS

DBM unit sat on P10.87 billion for years, COA finds

/ 05:42 AM August 22, 2021

MANILA, Philippines — The Procurement Service (PS) of the Department of Budget and Management (DBM) failed to remit to the national treasury P10.87 billion in unutilized funds that were meant for the purchase of common-use supplies and equipment for government agencies.

The Commission on Audit (COA) said the unused funds were “dormant for years” and deprived the government of cash that could have been used for other programs.

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This figure includes P10.864 billion in unused balances from government agencies for two years or more, and P5.957 million in dormant funds since 2011.

“The nonremittance of the total advances of P10.87 billion, or P10.864 billion plus P5.957 million representing unutilized or undelivered [supplies and equipment] and unidentified depositors in the books, deprived the government of the use of funds in the implementation of its projects/programs,” the 2020 audit report read.

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The previously little-known PS recently came under fire amid allegations it bought overpriced face masks, face shields and other supplies for the Department of Health (DOH).

The DOH transferred around P42 billion to the PS last year, with P2 billion left over as potential savings but ended up being reverted to the national treasury.

The PS was also scolded for P95.44 million in “slow-moving” COVID-19 supplies that were bought at expensive prices in April and May 2020 but were unsold as of the end of 2020.

Lawmakers in both chambers of Congress want to invite former PS executive director Christopher Lao for him to shed light on the allegations over the P42-billion fund transfer.

An agency under the DBM, the PS is the central procurement agency for common-use supplies and equipment, and even airline tickets, of government agencies.

Client agencies remit in advance the funds needed to purchase their supplies, materials and equipment to the agency, but unused or excess funds in the agency’s custody should be reverted to the Bureau of the Treasury (BTr).

A big chunk, or P8.945 billion, of funds transferred by other agencies were unutilized for four years or more, while P1.918 billion was unused for the past two to three years.

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State auditors learned that “only agencies who have requests for refunds and have reconciled balances with the PS were processed for the refund of their unutilized balances.”

In 2020, the PS refunded P157.015 million to 57 client agencies, while P1.209-billion identified balances of 155 client agencies were allocated to the cash sweep of the BTr when it searched for funds for the COVID-19 response.

A P5.957-million balance, in addition, has been dormant since 2011 with no client agency claiming the said balance.

The PS was unable to identify which client agencies made the deposits to the Land Bank of the Philippines, and the bank had no records of the agencies which made the deposits.

The PS agreed to remit the P10.870-billion unutilized balance to the BTr, and to inform the client agencies of the remittance of the funds.

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