The Department of Agrarian Reform (DAR) spread out the P900-million contract awarded to jailed businesswoman Janet Lim-Napoles into 97 smaller contracts so that the memorandums of agreements (MOA) between the agency and 12 non-government organizations (NGOs) of Napoles can be signed by a former undersecretary, the Commission on Audit (COA) revealed.
A special audit on the Malampaya funds released to the DAR found that the contracts with the 12 NGOs linked to Napoles were split into 97 memorandums.
The memorandums, “one for each local government unit [did not]exceed P10 million even when the projects to be implemented by each NGO are practically the same,” the report said.
The audit covered Malampaya funds appropriated to DAR for the rehabilitation of communities devastated by Typhoons Ondoy and Pepeng.
DAR signed 97 MOAs with the 12 NGOs “on the same date and for the same projects,” or as many as nine memoranda for three NGOs.
The report found no justification for spreading out the contracts.
Auditors said that “splitting in any form is prohibited” under the Government Procurement Reform Act.
The audit team speculated that the memorandums were broken down into smaller parcels because P10 million “is the upper limit” of the amount which former undersecretary Narciso Nieto can sign.
In their review, auditors said Nieto signed the MOAs and vouchers. The checks were also signed by Nieto or by Teresita Panlilio, also a former undersecretary.
Any contract involving an amount higher than P10 million requires the signature of the department secretary.
COA said the NGOs received disbursement vouchers or checks on four dates in 2009: November 26 and December 3, 22 and 23.
Each check ranged between P5 million and P10 million, with one NGO, Tanglaw Para sa Magsasaka Foundation Inc., receiving P52.5 million in one day.
Auditors said that payments made between November 26 and December 3 were made even before the notice for cash allocations was released on December 21.
“This means that DAR used funds from other sources,” they said.
During the filing of charges at the Office of the Ombudsman, Justice Secretary Leila de Lima told reporters that Napoles already knew about the fresh stream of money that would be channeled to DAR even before its earmark.
The 12 NGOs then faked the MOAs for supposed livelihood projects.
In all, Napoles-linked NGOs received P900 million. The biggest recipients were the Gintong Pangkabuhayan Foundation Inc. and Karangyaan para sa Magbubukid Foundation Inc. at P82.5 million each.
The National Bureau of Investigation which prepared the criminal complaints against several government officials, said that DAR officials “exclusively selected” these 12 NGOs for 97 projects.