Endowment program on, says PCSO

PCSO Chairperson Margarita Juico. FILE PHOTO

The Philippine Charity Sweepstakes Office (PCSO) on Sunday said its endowment program that was providing funding to charitable organizations was still operating although grants to certain institutions had been stopped.

Aleta Tolentino, a member of the PCSO board of directors, said the endowment program continued to hand out grants as scheduled as part of the agency’s 2011 corporate budget.

The state agency did stop giving out grants to certain organizations because the money they requested was no longer covered by the present budget, Tolentino told the Philippine Daily Inquirer on the phone.

“What these groups sought were [funds] they should have had in 2009 or 2010 which was before our administration. The groups did not liquidate so these payables were not recorded in the books of account,” the audit manager said.

Tolentino issued the clarification after the Inquirer reported on Sunday a statement of PCSO Chairperson Margarita Juico that the state-run agency had stopped providing more than P116 million in monthly or quarterly financial assistance to 112 charitable organizations, including at least 53 run by Catholic and religious organizations.

Juico said the funding was stopped after the PCSO discovered that these organizations had used the money for salaries and administrative expenses, instead of health-related expenditures.

The move drew criticism from former PCSO Chairman Manuel Morato, describing it as “cruelty to disadvantaged members of our society.”

Asked what Juico meant when she said the grants had been stopped, Tolentino said the PCSO chair was referring to the release of funds to charitable organizations that failed to liquidate within a fiscal year when their endowments were granted.

Reporting on how the grants was used is part of the memorandum of agreement a charitable organization signs with the PCSO, Tolentino said.

Stricter process

The PCSO board learned about the misuse of grants after implementing a stricter liquidation process for beneficiaries.

Its auditors have found out that a huge portion of the grants financed the salaries of employees of charitable organizations and funded operating expenses, such as electricity and other utilities, according to Tolentino.

This practice goes against the agency’s mandate to fund “health and medical expenses” of the poor, she said.

No delisting

The audit manager also said that the PCSO had not delisted organizations from its endowment program and that the agency even encouraged these groups to seek funding for 2012.

But as to where the grants would go, this would be evaluated closely by the PCSO board, Tolentino said.

Grants approved for this year are still going to be handed out to the organizations as long as they promptly submit liquidation reports.

“Before the former [PCSO] management was not keen on monitoring the liquidation reports but these are  required under the memorandums of agreement (MOA) between the PCSO and the beneficiaries,” she said.

Since the release of grants is done in installments depending on what the MOA stipulates, each organization must submit to the PCSO an accounting of how the money was spent before another portion of the fund is released, according to Tolentino.

Under review

The misuse of funds has prompted the PCSO to review the endowment program in its entirety and assess whether people in need benefited from the money the agency gave to groups, especially nonhealth charitable organizations.

The endowment program “has not been scrapped but it’s evaluated for its effectivity,” Tolentino said.

What the board wanted to determine was if it was better to “channel the [financial] assistance” through charitable groups, which were private in nature, or release it directly to people, she said.

“In the next endowment program, we’re thinking of placing a limit on the use of the grants to an organization’s administrative expense,” she said.

Any changes in the endowment program that the PCSO board intends to implement will take effect next year, Tolentino said.

Continue support

Reacting to Juico’s statement, Bayan Muna Representative Teodoro Casiño urged the PCSO to continue its financial support to the 112 charitable organizations to prevent the poor from ending as collateral damage in the agency’s “house cleaning.”

“As the review of the accounts of these charitable institutions are ongoing, their aid from the PCSO should continue considering that their beneficiaries are orphans, the sick, children, indigents and other disadvantaged persons. It must just be ensured that the aid really goes to the beneficiaries and not on anything else,” Casiño said.

He said that while he supported the need to end the abusive practices of charity institutions, the PCSO should not sacrifice the welfare of the beneficiaries considering that the agency was considered their “last resort” for their medical and social needs.

Malacañang said charitable institutions would have to realize that they could not use charity funds of the PCSO, which is saddled with the previous administration’s debts, for their own operations.

Undersecretary Abigail Valte, President Aquino’s deputy spokesperson, said that PCSO charity funds were meant for beneficiaries of charitable organizations, but not for the organizations themselves.

“If the PCSO is sifting through funds, that is to find out which are the legitimate organizations,” Valte said in an interview over state-run Radyo ng Bayan, defending the PCSO decision. With reports from Gil Cabacungan Jr. and TJ Burgonio