COA: Sara left DepEd with P12 billion disallowances, suspension, charges

MANILA, Philippines — The Commission on Audit (COA) has called out the Department of Education (DepEd) over its failure to settle its huge disallowances, suspensions and charges, which stood at P12.3 billion as of the end of 2023, the last full year of Vice President Sara Duterte as the agency’s secretary.

The COA’s 2023 annual audit report on the DepEd showed that from P11.4 billion in unsettled Notices of Suspension (NSs), Notices of Disallowances (NDs) and Notices of Charge (NCs) at the beginning of the year or as of Dec. 31, 2022, the agency made little to zero progress in trimming down the amount, even incurring additional NSs and NDs, thus leaving a total unsettled balance of P12.3 billion as of Dec. 31, 2023 – an increase of P903 million year-on-year. The NSs, NDs and NCs stemmed from the DepEd’s several transactions or fund disbursements with adverse audit findings.

“Non-compliance with existing laws, rules and regulations resulted in P10,099,733,281.52 in suspension, P2,190,140,136.53 in disallowance and P7,383,880.88 in charges, for a total of P12,297,257,298.93 as of Dec. 31, 2023, which remained unsettled,” the COA’s audit report read.

Under COA Circular 2009-006, or the Rules and Regulations on Settlement of Accounts (RRSA), state auditors shall issue an NS to suspend a transaction or disbursement that they think may result in pecuniary loss to the government.

The issuance of the NS is meant to give the concerned office the opportunity to justify any questionable transaction or fund disbursement.

If the auditors are not satisfied with the justification, they shall issue a Notice of Disallowance (ND) to compel the return of the disallowed amount by the concerned officials.

Meanwhile, a Notice of Charge (NC) is issued by state auditors for erroneous computation, non-collection or under-collection as well as for non-remittance or under-remittance of collections due to the national government.

“An audit suspension or disallowance/charge shall be settled by the persons responsible or liable therefor through compliance with the requirements, or payment/restitution or by any of the modes of extinguishment of obligation provided by the law, respectively,” the COA’s Circular 2009-006 stated.

Based on the breakdown provided by the COA in its audit report, from a beginning balance of P9.2 billion in NSs, the DepEd was only able to settle P3.2 billion.

The DepEd, however, also incurred P4.1 billion in additional NSs from January to December 2023, thus leaving a balance of P10.1 billion as of year-end.

For NDs, the audit breakdown showed that of the P2.1-billion beginning balance, the DepEd was only able to settle P23.4 million.

Records also showed that the agency incurred additional disallowances amounting to P58.1 million during the year, leaving a total unsettled balance of P2.2 billion as of end of 2023.

The COA’s records showed that the DepEd’s Central Office was responsible for the bulk of unsettled disallowed transactions amounting to P1.2 billion, while the remaining amount was incurred by its 15 regional offices (ROs).

As for NCs, while no additional amount was incurred in 2023, the COA said the DepEd was only able to settle P177,648.39 out of its P7.6-million beginning balance, thus leaving a total of P7.4 million in unsettled amount as of the end of 2023.

Nonetheless, the DepEd management has committed to settle its NSs, NDs and NCs, the COA added.

P7 billion unliquidated CAs

In the same audit report, the COA also flagged the DepEd for the accumulation of unliquidated cash advances (CAs), which stood at P7 billion as of end of 2023.

“The DepEd did not strictly adhere to the laws, rules and regulations in the grant, utilization and liquidation of cash advances which resulted in the accumulation of unliquidated CAs amounting to P6,959,017,036.51 contrary to prescribed rules and regulations,” the COA said.

The breakdown showed that the DepEd central office and all its ROs, including the National Capital Region (NCR), Cordillera Administrative Region (CAR) and ROs I to XIII all have unliquidated CAs as of Dec. 31 last year.

Among the lapses and violations of the audit rules, observed by state auditors was the grant of additional CAs amounting to a total of P280 million despite non-liquidation of previous ones, according to the COA.

It also said that the liquidation of CAs in the total amount of P1.3 billion was not enforced to employees before they have retired, resigned, died or have gone absent without official leave.

The agency added that there was also P4.6 million in CAs that were granted “without legal/proper authority and/or specific purpose,” while P107.9 million in CAs were transferred from one accountable officer (AO) to another.

Furthermore, P56.5 million in CAs that was granted to several AOs who were not bonded at all or to those who have posted insufficient bonds.

The COA said payments of service recognition incentives and other payables totaling P191.4 million were also made through grant of CAs instead of direct payments.

Other deficiencies noted by the agency were the grant of CAs to “defray regular expenses not eligible to be charged thereon;” allowing liquidation of CAs below the required 75 percent of the amount granted and grant of CAs despite non-observance of documentary requirements, among others.

Unutilized

The COA also flagged the DepEd’s over P15.486 billion in unutilized funds last year, allocated for the construction of classrooms, computerization program, procurement of learning tools and equipment, among others, mainly due to delays in procurement and other inefficiencies in project implementation.

“Unutilized allotments totaling P15,486,386,293.63 were mainly caused by the delayed/partial/non-implementation of various programs, activities and projects (PAPs) and unfilled plantilla positions,” the COA said in the same report.

The agency’s breakdown showed that last year, the agency failed to reach any of its target accomplishments under its PAPs for the year.

The COA noted that as of end of 2023, the DepEd has P816.7 million in unutilized fund for its Basic Education Facilities Program.

The COA said this was due to failure to carry out the construction and repair of school buildings and classrooms as well as procurement of school furniture.

The audit body noted that only 3.01 percent or 192 out of the target of 6,379 classrooms were constructed in 2023, mainly because of “modifications in the projects’ design.”

“A total of 4,391 classrooms are still under construction, and 550 are yet to undergo various stages of procurement,” it said.

Of the targeted 7,550 classrooms to be repaired, the COA noted that only 208 classrooms were completed while 2,135 classrooms are still undergoing repair and “a very significant target of 5,207 are still to be procured.”

Among the PAPs discussed in the audit report was the DepEd’s Learning Tools and Equipment (LTE) Program with an unutilized balance of P2.27 billion out of the allocated budget of P5.1 billion.

The COA noted that based on the DepEd’s Annual Procurement Plan for 2023, technical, vocational, livelihood (TVL), and science and mathematics equipment (SME) learning tools were supposed to be delivered to DepEd in May and June 2023, and March and June 2023, respectively.

The audit body, however, noted that the 14 contracts with an aggregate amount of P1.36 billion for the procurement of TVL and SME packages were only signed on Dec. 29 last year.