PCGG flagged over ‘unrecorded’ ill-gotten wealth recoveries

MANILA, Philippines — The Commission on Audit (COA) has called out the Presidential Commission on Good Government (PCGG) over 122 art pieces and P54.61 million in surrendered or recovered stocks which remain unrecorded in its books.

In its 2021 PCGG Annual Audit released recently, the COA noted “laxity in the monitoring and recovery efforts” in connection with the ill-gotten wealth of the Marcos family and their alleged cronies.

For instance, 772,594,488 shares of stocks worth P54.614 million, which were surrendered by the defendants or were recovered by the government, remain unrecorded in the PCGG’s books as of Dec. 31, 2021.

The COA said that while the PCGG reasoned out that a majority of the shares of stocks were already inactive, the entire amount should have still been inventoried in its books.

“The non-recording of the surrendered/recovered shares is tantamount to voluntarily giving away possession and control of what is due to the government and without due regard to existing accounting and auditing rules and regulations,” the COA report said.

It pointed out that instead of outright non-recognition of the surrendered and recovered stocks, the PCGG could have requested the inactive ones to be dropped off from its books but only after submitting the “appropriate documents to support its derecognition, pursuant to existing accounting and auditing rules and regulations.”

Unrecorded art pieces

In the same audit report, the COA also called out the PCGG over 122 pieces of artwork which are not entered in its books as of end-2021.

“One hundred twenty-two pieces of surrendered artworks such as paintings, statues, jars, framed wood carvings, wood carvings, tapestries, lithographs, framed cross-stitch artwork, wine goblet, upright piano, decanter, collage, brass item, abstract, news clipping, framed news print, drawings, plaque, and brass sculpture found at PCGG station remained unrecorded in the books of PCGG, thereby understating agency’s Abandoned/ Surrendered Property/Assets account by its total fair market value which are yet to be determined,” the COA said.

The COA recommended that the PCGG direct its Asset Management Department to “verify the accuracy of the inventory report, cause the appraisal of properties and coordinate with the Chief Accountant for proper accounting/recording in the books.”

In a comment, the PCGG said it has already conducted an inventory of the subject artworks on July 12, 2019 and that based on the appraisals conducted by Salcedo Auctions Inc. in March 2020 and August 2021, the surrendered artworks were valued at P28.383 million while the sequestered artworks were worth P316,000.

Uncollected dividends

Meanwhile, the COA said the PCGG’s laxity in transferring titles over several surrendered or recovered shares of stocks to the government led to the non-collection of dividends since 2005.

The audit body’s record also showed that out of the 269 surrendered, recovered or sequestered stock certificates (STCs) equivalent to 925,496,541 shares under the custody of the PCGG, the agency received dividends from only 13 STCs equivalent to 13,273,060 shares.

The COA’s record showed that the dividends received by the PCGG from 1987 to 2004 amounted to P1.858 billion, but earning stopped there as “none was received since 2005.”

“The non-collection of dividends and return of investments by the PCGG may be attributed to non-transfer of titles over said shares in the name of the Republic of the Philippines thru the PCGG. The titles were not transferred to the government since 1986, hence, any returns for that matter may have been credited to the original registered owners to the disadvantage of the government,” the COA said.

The COA recommended to the PCGG to look into subject shares of stocks under its custody “for possible collection of dividends particularly those considered as active investments.”

The COA said the PCGG must also “investigate inactive shares especially on the issue of dividend collection prior to its inactivity.”

In a comment, incorporated in the audit report, the PCGG committed to “institute appropriate measures to monitor and ensure collection of dividends and return of investments due to PCGG from surrendered, recovered and sequestered shares of stocks.”

The PCGG is an agency created by the late president Corazon Aquino on Feb. 28, 1986 by virtue of Executive Order No. 1 to lead the recovery of the ill-gotten wealth of the Marcoses and their cronies believed to have been amassed during the late dictator Ferdinand Marcos Sr.’s 20-year rule.