COA questions Supreme Court savings

MANILA, Philippines–Supreme Court magistrates appropriated for themselves P3.2 billion in “savings,” or one-fifth of the high tribunal’s annual allocation for 2012, even though it still had some obligations to settle during the period.

This was revealed in the 2012 Annual Audit Report of the Supreme Court released last week by the Commission on Audit (COA), which questioned for a second straight year the high court’s savings.

“Our audit revealed that in CY 2012, the Supreme Court declared as savings the total amount of P3.19 billion or 22 percent of the total Notices of Cash Allocations (NCAs) of P14.72 billion from the Department of Budget and Management,” the COA said.

The COA noted that the Supreme Court declared these savings even though it still had unpaid obligations during the year, such as P114.426 million in transactions made from May to December 2012 that were  paid only in 2013 using that year’s allocation.

Not realistic

“The existence of expenses already incurred but not yet paid in different courts as of the end of the year showed that the MCP (Monthly Cash Program) prepared by management was not realistic or attuned with timelines set forth in the implementation of the agency’s programs and projects,” the COA said.

The COA noted that the NCA releases were dependent on the Supreme Court’s MCP, which contained a detailed “predetermined” expenditures schedule of payment for goods and services as they fell due.

In its reply, the Supreme Court did not dispute the COA findings even as it admitted that it had done this the previous year when it used 2012 funds to pay for unpaid claims in 2011.

The COA urged the Supreme Court to monitor the timely implementation of its programs and projects to ensure the utilization of its funds to fully attain its objectives for the year, and revisit its existing guidelines to ensure timely payment and avoid juggling of funds or paying 2012 expenses with 2013 funds.

The COA report noted that savings could be realized only from unused money from completed or discontinued programs and projects; from salaries or allowances due to vacancies in the payroll; and from unused funds resulting from improved systems and efficiency.

Chief Justice’s authority

Under Section 53 of the 2012 General Appropriations Act, the Chief Justice was authorized to “augment any item from savings” realized from congressional appropriations received by the high court, which meant he could use this lump sum fund for any item allocated in the national budget.

In 2012, the year Chief Justice Renato Corona was impeached and Maria Lourdes Sereno was appointed in his place, the high court used up only P2.524 billion of the P3.074 billion set aside for “maintenance and other operating expenses,” to generate P549.254 million in savings.

In the same year, the Supreme Court used up only P35.27 million of the P401.473 million it allocated for capital outlay which yielded  P366.203 million in savings. Added up, these two accounts raised over P900 million in savings for the court.

The COA report also noted that the Supreme Court had earmarked P838.776 million of the Judiciary Development Fund (JDF) as “cost of living allowances” for justices, judges and court personnel, and another P209.694 million for “acquisition/maintenance of court facilities” using roughly the unused JDF from previous years.

The COA frowned on this practice as it had previously recommended that the Supreme Court draw up guidelines on the use of the JDF and to adhere to these guidelines.

Runs counter to PD

“The corresponding recommendations were not implemented by management. The absence of guidelines prevented the utilization of the 20-percent allocation of the JDF for the acquisition/maintenance of facilities of the courts,” the report noted.

The COA said the procedure currently being observed by the Supreme Court ran counter to Presidential Decree No. 1949 which created the JDF.

In its reply, the Supreme Court said it required more flexibility in determining the judiciary’s spending priorities as its collections might not be sufficient to address all the projects earmarked against the 20-percent portion of the JDF, which was used with the discretion of the Chief Justice or the Supreme Court en banc.

Aside from its spending habits, the COA also questioned the high court’s opaque system in recording its receipt of NCAs as these inflows were recorded separately in the books of the Supreme Court and the lower courts, which made it difficult to verify the completeness of its records and reconcile its bank records.

The COA suggested the Supreme Court mandate its staff to properly fully accomplish the NCA allocation form to ensure accountability and coordinate with the DBM for setting up a separate account for the lower courts.