COA finds irregularities in P2.1-B DOST program for MSMEs

MANILA, Philippines - The Commission on Audit (COA) has uncovered various irregularities in a program being implemented by the Department of Science and Technology (DOST) for micro, small and medium enterprises (MSMEs).

In a 2014 report released yesterday, state auditors said the government has so far invested P2.103 billion for the DOST’s Small Enterprise Technology Upgrading Program (SETUP).

The COA report said SETUP funds are being mismanaged, misused and lost due to the evaluation mechanisms used to determine the viability of project proposals, the release of financial assistance to project proponents and the monitoring system.

The program aims to enable MSMEs to improve productivity and efficiency through the infusion of appropriate technologies to improve their products, services and/or operations; human resource training; technical assistance and consultancy services; design of functional packages and labels; and assistance in the establishment of product standards, including testing; database management system and technology acquisition.

State auditors said inadequate and ineffective evaluation of project proposals and lax enforcement of memoranda of agreement provisions between the agency and the proponents have resulted in delinquent accounts amounting to P74.606 million.

The COA report said the “unsound practice” of the DOST to release money to the proponents, instead of to the supplier upon delivery of the equipment, resulted in P122.9-million losses for the government.