PCSO: Personnel salaries being wrongly included in MOOE yielded wrong data
MANILA, Philippines — It appears that the erroneous projected contributions of the Philippine Charity Sweepstakes Office (PCSO) stemmed from the inclusion of allocated personnel salaries to the agency’s operating expenses, an official told a House panel on Tuesday.
During the House committee on appropriations’ resumption of deliberations on PCSO’s projected contributions for 2024, Assistant General Manager Lauro Patiag explained that in the Budget of Expenditures and Sources of Financing (BESF), the P1.9 billion set aside for Personal Services (PS) were included to the P51.55 billion Maintenance and Other Operating Expenses (MOOE).
As a result, MOOE was incorrectly bumped up to P53.53 billion, while still indicating the P1.9 billion for PS. This error in computation resulted into the Department of Budget and Management (DBM) predicting a net loss of P2.9 billion by end of 2023.
“For the format as presented under the BESF, Madam Chair, we’ll just correct first this figure, representing the personnel services. The [PS] was actually added to the [MOOE], that is why there is now that computation of deducting such amount,” Patiag said.
“The presentation of the DBM would show that the total maintenance and other operating expenses will be P53.53 billion. And then for the PCSO we submit that the PS of P1.9 billion was actually added to that account and therefore we should deduct that in order to arrive at the actual MOOE which is P51.55 billion. So the total expenses in that presentation should be P53.64 billion and not P55 billion as shown in the computation and reflected in the BESF,” he added.
The net loss, instead of being P2.9 billion, would only be P938.5 million, inclusive of P520.4 million income tax.
However, Patiag clarified that the computations would have not resulted in a net loss only if DBM included savings and game prizes that were forfeited after being unclaimed for over a year.
“So still, using this form as adopted by DBM, there is a negative of P938.5 projected net loss from the estimated revenues for 2023. But Madam Chair, just to share with you, this esteemed committee, that for budgeting purposes, there are other sources of revenue, funds for operation of the agency and among those sources are the savings for the operating fund, and also the forfeitures for the prizes unclaimed,” Patiag said.
“So for this purpose, since we have identified already the programs of the charity sector to finance the programs and activities and projects of the agency, so we have to source that P2.5 billion, and this P2.5 billion is part of the submitted form required by DBM under Form 705 showing the comparative sources of funds,” he added.
Eventually, Patiag said that the projected budget for 2023 would end in a zero balance, as they will be able to address the initial projection of a negative net income. Baguio Rep. Mark Go questioned this, saying that it cannot be the case because PCSO makes more money as projected.
Patiag then explained that the assumption is always that PCSO has spent its earnings
“As shown here, nakalagay dito the funds that you indicated as additional revenue comes from the previous year, and those prices that were not delivered to the winners, not claimed, so ito ‘yon. So at the end of the day, every year you are forecasting zero […] But you were never zero since time immemorial when you operated PCSO. Was there a time that you were negative or zero in PCSO?” Go asked.
“There is none, but for budgeting purposes it is important, it is necessary that it will restart to zero. Budgeting po ‘yon […] Assumption po kasi under the charter is that you will utilize all the funds,” Patiag answered.
PCSO was among the first agencies asked to present its financial plan, given that the agency is not given allocation from the National Expenditures Program or the proposed 2024 budget — rather, it supports the government’s revenue-collection measures.
However, lawmakers from the committee on appropriations led by senior vice chairperson and Marikina 2nd District Rep. Stella Quimbo deferred the deliberations on PCSO’s financial plan due to conflicting data.
Quimbo pointed out the inconsistencies — the projected negative net income for end of 2023 — while Minority Leader Marcelino Libanan and Antipolo Rep. Romeo Acop then moved to defer the deliberations on PCSO’s financial plan.
Quimbo noticed that the agency posted a net income of P4.2 billion net for the first half of 2023. But it predicted a negative P2.9 billion net in the NEP — a sharp P7.1 billion difference.
In comparison, the PCSO assistant general manager, Ma. Cristina Gregorio, who is also the accounting head, said the office was able to generate a P3.6 billion income for 2021 and a P4.2 billion net income for 2022.
Gregorio was asked to explain how the agency arrived at such a computation, but Quimbo was not satisfied with her answers. Eventually, Gregorio noted that they did not provide the DBM, which prepared the NEP, a P2.9 billion negative net income for 2023.