OVP confidential expenses up, subsidies down – COA

MANILA, Philippines — The Office of the Vice President (OVP) incurred P125 million in confidential expenses in 2022 while cutting down expenses on social subsidies such as medical and burial assistance for the underprivileged sectors by P147.56 million, the latest Commission on Audit (COA) report showed.

A breakdown of the OVP’s Maintenance and Other Operating Expenses (MOOE) for 2022 showed that the agency incurred P125 million in confidential expenses from zero confidential expenses in 2021. It was not stated in the audit report from where exactly under the OVP’s funds its confidential expenses were sourced.

The MOOE breakdown can be found under the Notes to Financial Statement section of COA’s 2022 annual audit report on the OVP.

The OVP had no confidential and intelligence fund (CIF) allocation under Republic Act 11639 or the General Appropriations Act for 2022, but secured P500 million in CIF allocation from Congress for 2023 under RA 11936 or the 2023 GAA.

The COA said the OVP’s confidential expenses “pertain to the expenses for the safe implementation of various projects and activities under the Good Governance Program and the conduct of official engagements, and functional representation in international and domestic events as instructed by the President.”

A review of COA’s annual audit reports on OVP for 2016 to 2021, under then vice president Leni Robredo, showed no confidential expenses for those years.

Meanwhile, the same MOOE breakdown showed that the OVP has cut down its “subsidies” for underprivileged sectors by P147.56 million or to P358.95 million in 2022 from P506.51 million in 2021.

Showing the biggest decrease under subsidies expenses was the “utilization of transferred funds to hospitals for Medical Assistance Program” to P30.54 million in 2022 from P167.24 million in the previous year, a drop of 81 percent.

“Medical/burial assistance” also went down to P304.67 million in 2022 from P327.27 million in 2021.

The OVP’s “welfare goods expenses” which consisted of relief items distributed to areas affected by the COVID-19 pandemic and various calamities also went down to P19.6 million in 2022 from P35.24 million in the previous year.

Expenses for drugs and medicines were likewise cut down to P1.75 million from P5.43 million in 2021.

The COA said these expenses account for medicines and vitamins distributed as care kits under the now-defunct Bayanihan E-Konsulta, Swab Cab and Vaccines Express programs.

Expenses for medical, dental and laboratory supplies also decreased to P11.98 million from P31.99 million in 2021. These expenses accounted for antigen test kits, oximeters, thermometers, face masks, face shields and other personal protective equipment used and distributed during various COVID-19 operations of the OVP, the COA said.

On the other hand, “sustainable livelihood and training subsidy” increased year on year to P20.14 million from P7.43 million.

Satellite offices

Meanwhile, in the same audit report, COA also flagged the OVP for rushing the establishment of its satellite offices (SOs), resulting in violation of the procurement law in connection with the purchase of property and equipment.

“The immediate establishment of OVP SOs without enough equipment to operate led to purchases of PPE (property, plant and equipment) and semi-expendable property totaling P668,197.20, not fully compliant under the relevant procedures and provisions of Republic Act No. 9184 (Government Procurement Reform Act) and its Implementing Rules and Regulations,” the COA said.

The OVP had previously said in a press statement that at least six regional SOs were established on July 1, 2022, the first day in office of Vice President Sara Duterte, supposedly to speed up the delivery of services to people in the provinces.

The COA, however, said that because of the establishment of the SOs even without enough equipment, the OVP opted to “purchase of PPE and semi-expendable property” using the cash of its officers.

The COA said that though the officers’ expenses were eventually paid through reimbursements, the non-adherence to standard procurement procedures such as the conduct of competitive bidding or other accepted alternative modes of procurement, defeated the purpose of RA 9184 which is to promote transparency.

“Although a quotation was attached, ensuring that the lowest price was obtained in the market, OVP’s failure to undergo these purchases in processes and procedures required under RA 9184 and its IRR defeats the purpose of the Procurement Law, which is to standardize and to improve transparency in the procurement process,” the COA said.

“The immediate establishment of OVP’s SOs without standardized and streamlined processes in handling and reporting of acquired PPE resulted in late reporting and recording of purchased property,” the COA added.

In a reply incorporated in the audit report, the OVP said its Administrative and Financial Services Office Group heads saw procurement through reimbursement as the best option at that time to address the immediate need of the newly established SOs.

“Nonetheless, the SO staff exercised the necessary diligence to ensure that the items purchased are of the required quality and at the lowest price offered in the market,” the OVP said.

“Moving forward, all transactions pertaining to procurement of PPE and Semi-Expendable Property for SOs will be processed following the guidelines under RA No. 9184 accordingly. Rest assured that we remain committed to ensuring that all OVP properties are used prudently,” it added.