Agriculture Undersecretary Belinda Gonzales issued the order in the wake of what she called "unfounded allegations" from the political opposition that the funds were used to help President Arroyo’s presidential campaign.
The funds were set aside to purchase affordable fertilizer for farmers under the government’s Farm Inputs and Farm Implements Program.
Gonzales said the program is a regular one of the DA "that aims to assist local government units in boosting agricultural production and help augment the rural incomes of their farmer constituents."
The department’s regional field units are in charge of disbursing the funds to project proponents.
Gonzales rejected earlier reports that millions of pesos from the fertilizer fund went to aid politicians allied with the Arroyo administration.
She said the department "adopts the regular and standard procedures in the transfer, release and disbursement of funds in accordance with government accounting and auditing regulations."
Gonzales issued the order to the department’s regional field units "as a step toward putting a stop to all speculations that funds were used for purposes other than boosting agricultural production and increasing the incomes of local farmers."
The Senate committee on agriculture and food, chaired by Sen. Ramon Magsaysay Jr., is currently conducting an inquiry to find out where the fertilizer funds went.
In its report, the Commission on Audit said it could not account for millions of pesos in fertilizer funds. It said many congressional districts that received the money failed to conduct an accounting of its uses.
The opposition suspects Malacañang diverted the money to fund Mrs. Arroyo’s presidential bid last year, and allege that she cheated her way to victory.