Private sector asked Dar to explain COA findings on misuse of at least 46.681 B fund supposedly allotted to help farmers during the critical Covid 19 pandemic

September 22, 2021

The private sector has asked Agriculture Secretary William D. Dar to explain the findings of Commission on Audit (COA) showing the misuse of an estimated P46.681 billion of public funds supposedly expected by farmers amid their sufferings due to the Covid 19 pandemic.

   In a letter to Dar dated September 1, 2021, the Philippine Chamber of Agriculture and Food Inc. (PCAFI) said it is “disturbed” about COA’s 2020 regular audit report.

   “Sixty days have now passed from the release of the final report of COA regarding the performance of DA on the use of public funds. We would like therefore to seek clarification from your office,” said PCAFI President Danilo V. Fausto.

    “As you are well aware, we are working very hard to help increase the budget of Department of Agriculture  (DA) and these COA findings will greatly jeopardize our effort of generating additional resources for our agriculture sector.”

   At least seven items have been cited by COA in ita audit.

   The three main items are a P4.553 billion “unobligated amount” due to delays in procurement process and discontinuance of project implementation; P9.896 billion (16.6% of total DA budget) returned budget due to delay in delivery of goods, delayed submission of disbursement vouchers for payment; and P17.542 billion “non-liquidated” fund. 

   This non-liquidated fund is in the form of DA’s fund transfers to non government agencies (NGA), local government units (LGU), government owned and controlled corporations (GOCC), and people’s organizations (PO).

   “Government officials are the steward of public funds and it is incumbent upon them to make sure that these funds are properly accounted for in the interest of the public that it serves,” said Fausto.

   PCAFI lamented that DA just “returned” the budget supposedly allotted for the fight against African swine flue (ASF).

   “We can only speculate that DA failed to obligate the additional amount of P4 billion recommended by the Department of Budget and Management (DBM) for DA’s budget for the swine sector in order to address the problem of the ASF. Thus, no real addition to the budget of DA.”

   A total of P9.454 billion was separately found by COA  to have been misused.

   “Audit suspensions, disallowances and charges during the year and in prior years amounted to ₱1.331 Billion and ₱10.506 Billion, respectively or a total of ₱11.837 Billion.  Only ₱2.33 Billion or 20.13% were settled.  This leaves unsettled suspensions, disallowances and charges of ₱9.454 Billion.”

   Even the use of Bayanihan 1 and 2 fund has been questionable while it supposed to be what farmers depended on in rice seed assistance during these critical times of the pandemic.

   “Out of the total allotment for Bayanihan I & II of ₱27.035 billion, ₱24.8421 billion was utilized or obligated leaving an unobligated amount of ₱2.193 billion due to the delay in the procurement process, non-implementation of projects due to unavailability of inbred certified seeds and late release of funds.”

   These are the other concerns for which PCAFI asked DA to explain:

1.   Procurement contracts of nine DA offices of ₱2.076 billion involving procurement of fertilizers, seeds and other agricultural products;

2. Non-compliance with DA memorandum orders and circulars in the distribution of livestock, feeds, fertilizers, seeds and other agricultural products by 12 DA offices with a total of ₱1.057 billion.

3. Reimbursement of claims for fertilizer resulted in overpayment of ₱214.894 million due to payment to unqualified beneficiaries and erroneous computation.

   These overpayments are a result of misapplication of the unit price of fertilizers monitored by the Fertilizer and Pesticides Authority (FPA); errors in the number of bags used; and error in the unit price and the number of bags used in the computation of the reimbursements.

    “There is unreliability in the reimbursement of ₱0.963 million due to management’s failure to provide the data on area planted, number of procured fertilizer and the correct information on the number of fertilizer procured as basis in the determination of the total amount to be reimbursed.”

4. Laxity in the reporting of farmer beneficiaries in the master list submitted to Development Bank of the Philippines (DBP)  resulted in the over remittance in the payroll amounting of ₱35.83   million. 

5. Over remittance represents financial subsidy of ₱21.494 million and food assistance of ₱14.336 million of  7,146 beneficiaries that were reported two or three times.

6.  Leniency in the reporting of farmer beneficiaries  in the master list for rice subsidy submitted to Land bank resulted in the over remittance of payroll P35.64 million. This over remittance is caused by 6,912 beneficiaries (85% of whom are from Region I) that were reported two to three times.

   “Despite the cleaning and correction of errors in the list of beneficiaries by the regional field office (RFOs), the payroll files submitted by the DA-ICTS to Land Bank still included the names of beneficiaries that are listed twice or thrice.”

   “Moreover, farm size of farmer beneficiaries was not provided in the master list or payroll file. Without the required farm size, it is difficult to validate if the farmer beneficiaries were qualified for the financial assistance of ₱5,000.00 paid thru cash/pre-paid cards.

7.  Accuracy of farmers’ data base could not be relied upon due to the assignment of multiple Registry System for Basic Sectors in Agriculture (RSBSA) numbers to a single farmer beneficiary and the assignment of RSBSA number to two or more farmer beneficiary.

   “RSBSA serves as a requirement and basis for providing financial assistance, subsidiary funding and insurance services for farmers.  Those registered in the electronic database by government agencies are given priority in the targeting of their respective programs.

   “It is a means to identify farmers and fishermen that shall benefit from agriculture-related programs including  Financial Subsidy for Rice Farmers (FSRF), Rice Farmers Fertilizer Assistance (RFFA), and Cash and Financial Subsidy for Marginalized Farmers and Fisherfolks (CSFMFF).

7. “Six provinces/city in Regions IX, X, XII had issued a single RSBSA number to at least 20 or more farmer beneficiaries. Example: RSBSA No. 10-13-21-10 was issued to 208 farmer beneficiaries and RSBSA No. 10-13-012 issued to 178 farmer beneficiaries in Bukidnon province.” (Melody Mendoza Aguiba)

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