THE National Housing Authority (NHA) used Disbursement Acceleration Program funds even after the Supreme Court (SC) declared DAP unconstitutional, state auditors said.
According to a 2014 audit report on the NHA by the Commission on Audit (COA), the NHA received several Special Allotment Release Orders (Saros) and Notice of Cash Allocation (NCA) from DAP funds totaling P11.05 billion and received cash totaling P7,715,366,000.
“Records showed that all the DAP funds were already obligated as of December 31, 2014. However, further verification revealed that only P6,950,392,925 [was]utilized and P764,973,075 [was]unutilized as of the same date,” the auditors said.
The P7.715-billion cash releases were for the following projects: Five-Year Housing Project for Informal Settler Families (ISF) living along Danger Areas in Metro Manila, Housing for the BFP/BJMP (Bureau of Fire Protection/Bureau of Jail Management and Penology) Personnel, North Triangle Relocation Project and Iloilo Resettlement Project.
“Further verification of the status of utilization of DAP subsidy funds provided by the Accounting Department as of December 31, 2014, [showed that]NHA has utilized a total of P6.950 billion for projects under the DAP funds, P6.285 billion [was]used before the SC ruling while P665.118 million [was]used after the promulgation of the SC decision,” the state auditors said.
Of the P665.118 million, P591.4 million was for the Five-Year Housing Project for Informal Settler Families (ISF) living along Danger Areas in Metro Manila; P8.32 million was for the Housing for the BFP/BJMP Personnel; and P65.37 million was for the North Triangle Relocation Project.
The High Court held DAP unconstitutional in July 2014.
According to COA, the use of P665.118 million DAP funds between July 1, 2014 and December 31, 2014 after the promulgation of the SC decision “constitutes an illegal transaction as defined under Section 1 of COA Circular No. 2012-003 dated October 29, 2012.”
The state auditors said P9,152,500 of the total P665,118,476.11 was suspended in audit because of non-submission of documents.
“The DVs [disbursement vouchers]and supporting documents for the remaining amount of P655,965,976.11 were not submitted as of December 31, 2014 but were completely submitted only in July 2015. Hence, review, evaluation and the completion of the audit of the covered transactions to determine compliance with laws, rules and regulations, including compliance with the above SC rulings, will be done in 2015,” they added.
Meanwhile, the P764.97-million DAP funds that remained unused were not returned to the Bureau of Treasury (BTr) as of year-end 2014.
The auditors then told the NHA to “[d]iscontinue the utilization of DAP funds” and to “[r]emit to the Bureau of Treasury the amount P764,973,075 representing the unutilized funds under DAP.”
The NHA was told to seek supplemental budget from the Department of Budget and Management (DBM) in order to fund the obligated DAP projects.
According to the audit report, the NHA sent a letter to the DBM dated April 23, 2015 on NHA’s request for guidance on the COA’s AOM (Audit Observation Memorandum) on the utilization of DAP funds. The DBM then clarified in a letter dated June 10, 2015 that “continued implementation of the same is legally justified” because the SC issued no injunction on the release of funds under the DAP, particularly those that have been obligated.
The state auditors agreed with the DBM’s comment.
“However, our concern is not only in the release of DAP funds but more specifically in the obligation and utilization, which the DBM did not address. Verification revealed that upon release of the SARO and NCA, NHA shall prepare the Request for Fund Allotment (RFA). The approved RFA is the basis for obligating the DAP funds. This practice is not in conformity with Article 1157 of the Civil Code of the Philippines, which provides that one of the sources of obligation is the contract. Hence, a contract should be first perfected before an obligation is recognized,” they said.
“Following the said COA Memorandum, the refund/return to the BTr of all unobligated and/or unutilized DAP funds refers to the actual cash releases that are unutilized regardless of whether it is obligated or not since SARO cannot be refunded,” the auditors added.
“Therefore, we maintain our position that NHA should discontinue the utilization of DAP funds, remit to the Bureau of Treasury all unutilized funds under DAP and request… a Supplemental Appropriations from DBM to fund the continuance of the DAP projects,” they said.
The NHA, a government-owned and controlled corporation (GOCC), operates under the administrative supervision of the Housing and Urban Development Coordinating Council and direct supervision of the Office of the President.
It is mandated to engage in shelter production and aims to provide housing assistance to the lowest 30 percent of the urban population through slum upgrading, squatter relocation, development of sites and services and construction of core housing units.