Probe on Malampaya fund misuse by 2 DA agencies sought

MANILA, Philippines – Officials and personnel of the Philippine Coconut Authority (PCA) and Bureau of Soils and Water Management (BSWM) will face investigation for their alleged involvement in the misuse of P117.940 million in Malampaya funds released in 2008.

In separate special audit reports both dated Dec. 15, 2015, the Commission on Audit called for an investigation on the PCA and BSWM, attached agencies of the Department of Agriculture, for various irregularities arising from how the money was spent.

Audit of the P107.940 million in Malampaya funds that DA released to PCA’s Coconut-Corn Intercropping Program showed that the CCIP “was not effectively undertaken and charges thereon are questionable.”

State auditors said the targeted number of farmer-beneficiaries was not attained, the fund was used to settle previously awarded contracts and the transactions were questionable.

Only 83,750 of 94,697 target beneficiaries of the CCIP received corn seeds for planting. The beneficiaries also received low quality corn seeds, the COA report said.

“Moreover, of the selected samples of beneficiaries who purportedly acknowledged receipt, significant number either denied receipt of the purportedly delivered items, or denied their signatures on the purported acknowledgment receipts, or cannot be located at their given addresses,” the COA report said.

PCA administrator Romulo Arancon Jr. denied that there were irregularities in the implementation of the CCIP.

“The administrator justified the change in estimated target area and claimed that the adjusted target area was 93.42 percent accomplished. The shortage in accomplishment was attributed to the El Niño phenomenon,” state auditors said.

Arancon also maintained that inferior quality seeds were replaced by suppliers and failure to locate farmers who benefitted from the program may be attributed to migration.

State auditors, however, stood firm on its findings and recommended an investigation on the liabilities of PCA officials and personnel responsible in the awarding of contracts to ineligible suppliers and receipt and distribution of low quality seeds.

As for the BSWM, COA said the P10 million in Malampaya funds that DA released to BSWM was also not properly utilized.

State auditors noted that out of the P5 million meant for the provision of STW pumps in corn areas, only P3.60 million was used for the intended purpose, while the balance of around P1.40 million was used instead for operating expenses for support activities for the project such as site validation and monitoring of project implementation.

“The selection criteria for the project site were not strictly observed, such that pumps were distributed in areas not suitable for pumps or have no need for the same, thus, they remained either underutilized or not utilized at all, and/or not distributed in appropriate quantities in the areas identified,” the COA report said.

“Moreover, the pumps were purchased from a supplier of questionable physical existence, while the whereabouts of six pumps cannot be established. Such condition could be partly attributed to the non-conduct of support activities for the project,” the audit report added.

As to the other P5 million, the audit team said the amount given to the municipality of South Upi in Maguindanao was not used for the development of new corn areas. The reported fund utilization was questionable because of spurious documents.

“The fund transfer was considered liquidated in the books of the BSWM on the basis alone of purported certification by the municipal mayor and accountant that the fund was used to pay Pacifica Agrivet Suppliers Inc. The signatories to the certification, however, denied their signatures or knowledge about the project, and the supplier also denied transacting with the municipality,” the COA report said.

“Under this condition, it is evident that the BSWM also failed to monitor the project with strong indication of non-implementation by the municipality,” the report added.

BSWM executive director Silvino Tejada defended the agency. He told the COA that BSWM acquired 50 units of pump and engine sets at the least cost due to efficiency and the balance of P1.40 million was considered as savings and used as operating expenses that were indirectly related to the implementation of the STW project.

As for the P5 million given to South Upi, Tejada said the BSWM acted in good faith in accepting the documents and reports from the municipality as fair presentation of the purported project implementation.

Tejada also told COA that an investigation on the matter has started and those found responsible would be dealt with accordingly.

Reacting to Tejada’s explanations, state auditors maintained that “the results of the audit clearly illustrate the failure of the BSWM in ensuring proper and effective utilization of the funds as manifested by the questionable procurement of pumps and spurious documents on the utilization of funds by the municipality of South Upi.”