COA questions P660M for gov’t think tank

INQUIRER FILE PHOTO

MANILA, Philippines–The Commission on Audit (COA) has raised red flags on the use of P660 million from the Disbursement

Acceleration Program (DAP) that was given to a government think tank, saying that huge sums meant to boost the economy remained either unspent or unaccounted for.

Of the DAP funds granted to the Philippine Institute for Development Studies (PIDS) from 2011 to 2012, the think tank kept P213 million dormant in Landbank deposit accounts, the COA noted in a 2013 annual audit report released last week.

The COA also said the PIDS had failed to account for P297 million it channeled to government schools, universities and colleges (SUCs).

In addition, the COA said that even the P100 million in DAP funds that the PIDS, an attached agency of the National Economic and Development Authority (Neda), was able to spend for real estate turned out to be problematic.

The PIDS is a nonstock, nonprofit state corporation that provides research papers and studies to help the government in national planning and policy-making. It was created in 1977 by virtue of Presidential Decree No. 1201.

A blueprint of the agency’s research program called the PIDS Research Agenda is updated every five years to respond to emerging economic and social issues.

The areas added in the new master plan for 2010 to 2014 include geopolitics, metropolitan issues, infrastructure, industrial policies and conditional cash transfer.

“The utilization of the P560 million from the DAP granted to the PIDS and the CHEd (Commission on Higher Education) to fund various RDE (research, development and extension) projects did not accelerate spending as envisioned in the DAP.

Unused funds

“The expected amount that should have flowed as stimulus to boost the economy remained in the possessions of these agencies,” the COA said.

The PIDS requested the funds and it tapped the CHEd as a conduit for the deployment of the bulk of these funds—P536 million for distribution to 49 research projects in 25 SUCs.

But the COA said that of the amount given to the CHEd, P309.79 million was released as of end-2013, with P194.2 million left unused.

Socioeconomic Planning Secretary Arsenio Balisacan, PIDS chair, said the use of the P300 million in question was aboveboard.

“(What) we are using now for impact evaluation was budgeted last year for this year,” Balisacan said in an e-mail sent through the public affairs office of the Neda.

“The PIDS has not actually utilized all that yet. Some of these will spill into 2015,” said Balisacan, also the director general of the Neda.

Lesson learned

“We would want to wait for the experiences of PIDS and take stock of the lessons learned in our exercise before we lunge into a much bigger initiative for impact evaluation,” he said.

The COA asked the CHEd to fully account for some 2.4 million in interest income from the money kept in a bank account for one-and-a half years.

The auditing agency said that “aside from the check number in the CHEd report, no documents acknowledging the receipt of fund by each SUC was submitted.”

No copies of agreements

The PIDS also failed to submit the copies of the agreements between the CHEd and SUCs on the use of the DAP funds.

“It would be more appropriate for the PIDS to have a copy of these individual (agreements) since it is the institute that is primarily responsible for the DAP fund having received the full amount directly from the DBM (Department of Budget and Management),” the COA said.

For its part, the PIDS used only P36.764 million, or 66 percent, of the P56 million left in its coffers, with the balance of P19.235 million still untouched as of 2013.

Return interest income

The COA has ordered the PIDS to return the interest earned from the idle funds but the PIDS claimed that these were deposits in noninterest-earning accounts.

In its recommendations, the COA asked the PIDS to speed up the use of the DAP funds; urge the CHEd to force the SUCs to submit a liquidation report; suspend DAP releases to SUCs that have not yet used up their initial allocations; and return the unused DAP funds to the National Treasury, including the interest earned on the idle funds.

Bad land investment

The PIDS was granted P100 million in DAP funds for the purchase of a property in Quezon City from the National Housing Authority (NHA) in August last year.

The PIDS planned to use the property for its own building. Its main office is currently in Legazpi Village in Makati City.

But the COA noted that the 2,580-square-meter property turned out to be the site of the sewage treatment facility of Philippine Children Medical Center (PCMC).

Eviction of hospital

The hospital’s eviction from the area has prompted widespread opposition, forcing the PIDS and the NHA to suspend the deal.

“It was learned that the PIDS management was aware of this situation and that prior to the sale, the head of PCMC was informed of the ongoing negotiation, and he raised no objection against the transaction,” the COA said.

In its reply, the PIDS management insisted that the PCMC lot purchase was made in “good faith” as it exercised due care and prudence in verifying the circumstances surrounding the lot.

The PIDS management noted that it was the NHA that had agreed to assume the responsibility of relocating PCMC.

To resolve the problem, PCMC proposed to buy back the property from the PIDS but the COA noted that up to now, the DBM had yet to release funds to facilitate the deal.

In its recommendations, the COA suggested that the NHA replace the PCMC lot with another property of equal value and within the same vicinity and request the DBM to return PIDS’ P100 million to be deducted from PCMC’s annual subsidy.

Monitoring

For next year, the Neda is proposing to Congress P100 million for research and another P200 million for monitoring and evaluation, according to Balisacan.

“We would probably have similar resources next year. The whole intention is to make this a regular part of government work,” he said.

Balisacan said the Neda would need a feedback mechanism for projects that were not delivering what they were expected to deliver.

When outcomes and results are poor, the Neda will either stop them or correct what’s wrong with them, he said.

Through better monitoring, the Neda can also recommend additional funding for projects that are not properly or well-funded to give these better chances to address the country’s development constraints.

“That’s really the kind of inputs we would want to have from these studies,” Balisacan said.–With a report from Inquirer Research

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