State auditors have told the National Agricultural and Fishery Council (NAFC) to be judicious and frugal in its expenses after they found that it allegedly incurred expenses that exceeded the prescribed budget for Representation Expenses by P4.4 million.
The recommendation was made in a 2014 audit report on NAFC by the Commission on Audit (COA).
“The agency did not observe economy measures in its disbursements for food/catering services during meetings resulting in expenses exceeding the budget for Representation Expenses by P4.4 million or 4,002 percent in CY [Calendar Year] 2014,” the auditors said.
According to COA, the General Appropriations Act (GAA) of 2014 provides a budget of P110,000 for Representation Expenses to NAFC.
“Comparison of the approved budget of P110,000.00 per GAA for Representation Expenses with the actual amount of P4,512,392.42 incurred in CY 2014 showed an expenditure, over and above the budget, of P4,402,392.42 or by 4,002 percent, contrary to Section 18 of the General Provisions of GAA for CY 2014, which provides, ‘Government funds shall be utilized in accordance with the appropriations authorized for the purpose,” the auditors said.
Based on the audit report, the P4.512 million is broken down into the P175,369.77 pertaining to “Representation Expense per book” and the P4,337,022.65 incurred for meals and snacks served during meetings.
According to the auditors, NAFC incurred meals and snacks during executive meetings totaling P53,608.11 and P175,369.77 charged to Extraordinary and Miscellaneous Expenses (EME) and Representation Expenses, respectively, in 2014.
The cost of the meals and snacks totaling P4.34 million was alternately charged to Other Maintenance and Operating Expenses (OMOE) and Due to NGAs (national government agencies) accounts instead of to the Representation Expenses account, they said.
The auditors added that this was “contrary to COA Circular No. 2013-002,” which describes the Representation Expenses account as one used to record expenses incurred for official meetings, conferences or entertainments.
The same circular describes the EME account as one used to record the sum paid for expenses incidental to the performance of official functions, such as meetings and conferences, public relations, educational, cultural and athletic activities, and membership fees in government organizations.
Meanwhile, the OMOE account is used to record other operating expenses, which do not fall under any of the specific maintenance and other operating expense accounts.
“Based on the above definition of Representation Expenses account, the amount of P4,337,022.65 incurred for meals and snacks served during meetings should have been charged to Representation Expenses instead of to OMOE and Due to NGAs accounts. The total amount of Representation Expenses should have been P4,512,392.42,” the auditors said.
“Of the total amount of P4,512,392.42, P3,483,508.00 went to procurement of food and catering services from NAFC-DA Multi-Purpose Cooperative (NADAMCO) for regular/routine office meetings and conferences without the conduct of public bidding,” they added.
“The meals and snacks served during ordinary meetings were charged against agency funds, when such should have been personally shouldered by the concerned officials and employees considering that the holding of meetings was part of their regular functions,” the auditors said.
Also, catered meals and snacks were “unnecessarily provided as evident in the following instances” according to the auditors: breakfast and AM snacks were served although the meetings began at 10 a.m; AM snacks and lunch were served although the meeting began at 11:30 a.m., and; lunch was served although the meeting started after lunch.
They said the quantities of food ordered/served during meetings exceeded the number of participants as per signed Attendance Sheet.
“As such, the excess foods were served to other personnel who were not part of the meetings,” the auditors added.
“Such practice is contrary to COA Circular No. 2012-003 dated October 29, 2012, prescribing the guidelines on Irregular, Unnecessary, Excessive, Extravagant and Unconscionable expenses,” they said.
Further, according to the auditors, Notices of Meeting were not attached to the voucher before payments were made to validate the following data: the actual quantities of food ordered/served during the meeting versus the number of participants per Notice of Meeting; participants per attendance sheet versus participants per Notice of Meeting; meeting time/place and duration of meeting to determine the type of meals to order, and; purpose/ agenda of the meeting.
“Section 4.6 of Presidential Decree 1445 provides, ‘Claims against government funds shall be supported with complete documentation,’” they said.
“We recommended and Management [NAFC] agreed to (a) be judicious and frugal in its expenses in consonance with COA Circular No. 2012-003 dated October 29, 2012; (b) keep expenses within the budget; and (c) stop the practice of charging Representation Expenses to other accounts,” the auditors added.