Department of Agriculture squandered P14B–COA

By: Marlon Ramos - 10 years ago

Agriculture Secretary Proceso Alcala. INQUIRER FILE PHOTO/ ALEXIS CORPUZ

MANILA, Philippines–Another stalwart of President Aquino’s Liberal Party is in hot water for the alleged misuse of billions in public funds.

The Department of Agriculture (DA), under Agriculture Secretary Proceso Alcala, squandered more than P14.4 billion in 2013 in questionable projects that it implemented despite violations of laws and regulations, according to the Commission on Audit (COA).

The COA made public its report on Tuesday, a day after the Sandiganbayan sentenced Oriental Mindoro Gov. Alfonso Umali Jr. to up to 10 years in prison for graft.

Umali is the treasurer of the Liberal Party, which is expected to field Interior Secretary Mar Roxas as its presidential candidate in next year’s elections.

Both Alcala and Umali are political supporters of the President, who has made the fight against corruption the centerpiece of his “tuwid na daan” (straight path) governance.

In its review of the agriculture department’s financial transactions, the COA said the department wasted huge sums on several anomalous programs using the regular funds it received from the national government and allotments from the Priority Development Assistance Fund (PDAF) and Disbursement Acceleration Program (DAP).

The Supreme Court has struck down as unconstitutional the PDAF, a pork barrel of lawmakers, and the DAP that pooled savings of agencies and funded various projects aimed at pump-priming the economy.

Napoles NGOs

Some of the irregularities in the DA that state auditors discovered were the releases of funds to several nongovernment organizations (NGOs), including one set up by businesswoman Janet Lim-Napoles, the suspected architect of the P10-billion pork barrel racket.

The COA also found out that some attached agencies of the department, such as the National Agricultural and Fishery Council (NAFC), implemented projects that were not part of its mandate.

It said a number of projects were left incomplete despite the release of allotted funds while others were undertaken without the necessary documents for the proper liquidation of funds.

P7.8B for roads

Of the big-ticket projects it approved, the DA spent the biggest amount for the construction of 1,079.2 kilometers of road networks under its Farm-to-Market Road Development Project (FMRDP).

The COA said the department allocated P7.8 billion for the infrastructure project in 2013, but it was only able to complete 270.4 km worth P1.7 billion after a year.

The audit agency said the remaining P6.1 billion for farm-to-market roads were “either not yet started or implemented,” still ongoing or “no status provided.”

Under the law, the COA said, among the DA’s tasks was to finance infrastructure projects involving the “restoration and rehabilitation of irrigation systems, postharvest facilities and farm-to-market roads aimed at providing better opportunity to [a] majority of the farmers by increasing their income and making food more affordable to the public.”

With the help of local government units and the Department of Public Works and Highways, the agriculture department was mandated to construct rural roads infrastructure “that act or function as access roads to production areas and are not otherwise classified as national, provincial, city or municipal.”

The FMRDP includes the construction of barangay (village) roads, road openings and upgrading or improvement of existing farm-to-market roads.

“The goal of the FMRDP to provide transport facilities for agricultural and fisheries commodities to reduce the production costs of farmers and fisherfolk, and making food affordable to the public was not fully attained,” the COA said.

“As a result of the delayed and non-implementation of the projects, the objective of the program to provide efficient transport facilities to farmer-beneficiaries for their products was not fully attained as of yearend,” it noted.

Alcala’s reply

In its answer to the COA audit findings, Alcala’s office said the accomplishment reports from the agriculture department’s regional field units (RFUs) and field offices were being reviewed.

Alcala also vowed to “coordinate with the RFUs for the revalidation of projects through field monitoring and conduct problem-solving sessions with the implementing agencies.”

“Measures are being taken to implement the audit recommendations,” Alcala said, noting that the delay in the completion of the project was due to various constraints.

“The template for (farm-to-market road projects) is under revision to include information, such as right-of-way, obstruction within the construction limits, and unstable peace and order situation to minimize problems causing delay in the implementation of the projects,” he added.

P4.3B in loans uncollected

State auditors also took to task the DA for its failure to maximize the Agricultural Competitiveness Enhancement Fund (Acef) due to its failure to collect P4.3 billion in loans it released to various private businesses.

Created under Republic Act No. 8178, or the Agricultural Tariffication Act, after the Philippines became a member of the World Trade Organization in 1996, the Acef was intended to act as a “safety net” for small farmers and fishermen affected by the trade liberalization policies adopted by the government.

The fund, collected from the tariffs of imported agricultural products, was supposed to finance the construction of farm-to-market roads, postharvest facilities, irrigation facilities, credit, research and development, and extension services for the agriculture sector.

Acef, which the agriculture department suspended in January 2011 after the COA declared that it failed to help marginalized farmers, was originally set to expire in 2007, but was extended until this year.

“The objective of the Acef to protect farmers and fisherfolk against unfair trade practices and to increase productivity by providing the necessary support services may not be properly evaluated by management due to lack of efficient evaluation, implementation and monitoring mechanism and controls on the projects,” the COA said.

P229M unreleased loans

The audit commission said the department also approved loans amounting to P229 million that it had yet to release to 12 business enterprises whose applications for financial assistance were approved as early as 2007.

“This could affect the viability of the project because of the time lapsed between the approval of loans and the actual implementation of the projects. The financial and feasibility study done before may not be appropriate if the said projects will be implemented in the succeeding year,” the COA said.

State auditors also uncovered “deficiencies” in several projects funded by P4.8 billion in DAP funds.

The projects included construction of farm-to-market roads, credit financing for livestock sector and financial assistance for the cultivation of high-value commercial crops.

“The implementation of the objectives of the DAP projects were inefficient and ineffective… due to the deficiencies in the implementation of the projects,” the COA said.

In addition, the COA said P224.5 million in PDAF allocations of several lawmakers was also put to waste because the projects financed by the pork barrel were “ineffective.”

Enrile, Pangandaman’s PDAF

Of the amount, it said NAFC spent P199.4 million, including P45 million from detained Sen. Juan Ponce Enrile and P30 million from Lanao del Sur Rep. Mohammed Pangandaman, to livelihood projects outside its mandate.

Alcala’s office said the department had already suspended the allocation of funds to NAFC since June 2012 and that it had sent demand letters “requesting the full liquidation of the fund transfers.”