Fraud probe looms in museum fund transfer

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The Commission on Audit (COA) has repeatedly demanded that National Museum officials produce all the documents covering the P331.93-million Museum Endowment Fund (MEF) that was deposited in two private banks apparently without a go-ahead from higher authority.

COA also asked National Museum Director Jeremy Barns, Board of Trustees (BOT) Chairman Ramon del Rosario Jr., Asst. Directors Ana Ma. Teresa Labrador and Angel Bautista, and Chief Administrative Officer Dionisio Pangilinan—to change the name of the accounts from “National Museum of the Philippines” to the “National Museum.”

The officials have not complied with the commission’s directive and have also ignored a COA order to repay the money.

Now they face a full-blown investigation for possible fraud.


The Manila Times learned that a complaint regarding the transfer of the endowment fund was received by the Ombudsman on June 18.

The complaint first reached COA’s fraud audit team on May 10 and is jointly investigated by state auditors and Ombudsman probers.

“[This case] is not an ordinary audit anymore. There are indications of fraud,” another source knowledgeable about the matter said on condition of anonymity.

In a letter of endorsement to COA’s National Government Sector in Quezon City dated June 28, the museum’s resident auditor Victoria Yumang said museum officials ignored standard practices in transferring government funds to private banks.

Not only did they lack authorization from the Department of Finance and the Bangko Sentral ng Pilipinas to transfer the MEF to the Bank of the Philippine Islands (BPI) and Banco de Oro (BDO), they also failed to produce the supporting documents for the transfer.

“These withdrawal/transfers of the MEF to BDO and BPI in the total of P331,926,248.99 were not covered by any disbursement voucher but by mere memoranda; nor by any formal official receipt by the bank,” Yumang wrote. There were also no “quarterly reports of the status of the principals and the earnings.”

The resident auditor noted that the museum officials recently submitted lump investment reports from the initial investment in 2011 up to the present.

“This obviously is to make-up for the failure to submit the quarterly report,” Yumang said.

To date, the MEF remitted to the museum has reached P320 million—P250 million from Philippine Amusement and Gaming Corp. (Pagcor) and P70 million from Philippine Charity Sweeptakes Office ( PCSO). Under the R.A. 8492, or National Museum Act of 1998, the MEF should be deposited to government depository banks and only the interest should be spent for special projects of the museum.

In a statement sent to several media organizations, Barns said the endowment fund is “intact” in BPI and BDO. But because the museum’s accountants resigned in February and May last year, it was unable to complete the auditing process.

Barns described the MEF is one of the “most significant accomplishments achieved for the National Museum.” According to the certification of account balances from BPI and BDO, since the MEF was invested in 2011, the fund increased from P331.93 million to P370.94 million because of interest.

He assured that there “has been no incidence of plunder or anything of the sort,” and the allegations against him and Asst. Director Labrador “are baseless and preposterous, done by a group of disgruntled employees who have been active for decades in political intrigue inimical to the public service and who oppose the reforms to the organization that are ongoing.”

The Times learned that the museum’s books diligently list payables and even aging liabilities in fiscal years 2011 and 2012. Only the endowment fund is unaccounted for.

At the center of the controversy is Barns, who was appointed by former president Gloria Macapagal-Arroyo in 2010 and who was retained by the Aquino administration.

He was born in Australia where he earned his Commerce degree at the University of Queensland in 1995. He later finished his masters’ degree in Economics at De La Salle University in 2002.

The appointments of Barns and Labrador were invalidated in April 2012 by the Civil Service Commission who said they were holding career positions in accordance with the law. But the CSC reversed its own decision, declaring that these museum positions are co-terminous.

COA records show that the BPI account was opened a day before the MEF was transferred.

In the investment management agreement (IMA) with BPI dated December 7, 2011, P54.8 million from the MEF was transferred to the bank. But in the records of the Landbank of the Philippines (LBP), the fund transfer happened a day after, December 8, in two separate checks—P52.8 million and P16 million.

Apparently, only the P54.8-million manager’s check was covered by the IMA.

“Curiously, these two manager’s checks were purchased, debited from the [LBP] by virtue of the same unnumbered memorandum coming from Director Barns dated December 7, 2011,” COA said.

“If the intention was to invest a total of P70,800,000 under the same management agreement, there was no reason to break it into two checks.”

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3 Comments

  1. Looks like scams are being discovered left and right, up and down. Whew! When will these last?

    • Mabuti pa itong mga “CORRPUPT” gov’t. officials ay hindi na kailangan mag punta pa sa Middle East para lang mag hanap buhay gaya ng mga OFW, nakaw na lang ng mga remittances ng mga OFW. Hopefully, COA will do their part, swift justice.

  2. Mga kababayan, suriin at investigahan rin itong COA (Commission On Audit) as per info, tatanongtanong ito sa mga LGU’s at ganito: Commission Or Audit? BAKIT NAKALUSOT ANG TRANSAKSYON NG KAMARA DE REPRESENTANTE (if it is true) sa pagitan ng bugos na intities? Inbestegahan na itong COA. Malay natin naliligo ito ng mababangong commissions galing sa mga LGU’s. O, ano? Commission para sa akin? O I-Audit kita? Kuwentong barbero ‘yan mga utoy.