State auditors issued notices of disallowance (NDs) in 2014 totaling P70.55 million in Disbursement Acceleration Program (DAP) transactions of the government-run Technology Resource Center (TRC).
In a 2014 audit report on the TRC, the Commission on Audit (COA) said the transactions were disallowed in audit “for non-submission of liquidation reports and/or deficiencies in the grant of funds for livelihood training programs to various non-government organizations (NGOs)” by the technology center.
According to COA, the Department of Budget and Management (DBM) issued a Special Allotment Release Order (Saro) and Notice of Cash Allocation (NCA) dated December 22, 2011 to TRC totaling ₱336 million “for livelihood trainings and development programs that provided that it should be part of the FY [Fiscal Year] 2011 DAP.”
The SARO provided that the allotment released shall be valid for obligation until December 31, 2012 while the validity of the NCA shall be until December 31, 2011, the auditors said.
It is a document solely issued by the DBM that authorizes implementing agencies to bid out projects.
The department must obligate a SARO before issuing an NCA, which in turn authorizes the release of the fund for the projects.
Saying in the audit report that they issued NDs, the auditors cited COA Circular 2012-001 and 2007-001, which provide guidelines and documentary requirements for fund transfers to NGOs, among others.
Under COA Circular 2007-001, the NGO or people’s organization (PO) shall submit a Fund Utilization Report to the government organization (GO) within 60 days after project completion.
The NGO/PO shall submit the inspection report and certification of project completion rendered/issued by the GO’s authorized representative, and list of beneficiaries with their acceptance/acknowledgment of the project/goods/services received.
“The validity of these documents shall be verified by the internal auditor or equivalent official of the GO and shall be the basis of the GO in recording the fund utilization in its books of accounts. These documents shall support the liquidation of funds granted to the NGO/PO,” the auditors quoted the circular.
“The ND requires the persons liable and/or accountable government officials and the NGOs to settle immediately the said disallowances,” they said.
The audit report, however, did not enumerate the NGOs.
Under the State Audit Code, audit disallowances become final and executory if these are not appealed within six months from receipt.
A disallowance is settled by payment of the amount disallowed “or by such other applicable mode of extinguishment of obligation as provided by law,” according to COA’s website.
“We recommend that management require the persons liable to settle the disallowance or appeal to the Commission on Audit within the prescribed period to support its compliance with the requirements of the law with regard to the DAP funds transactions,” the auditors said.
“Management [TRC] informed the concerned officers to comply within the prescribed period,” they added.
The TRC, created in 1977, is a government-owned and controlled corporation (GOCC) under the Office of the President.
It is mandated to create livelihood opportunities by promoting technology-based livelihood projects using information and communication technology, establishing technology and livelihood zones and centers and implementing resource-oriented livelihood programs.
The DAP, a stimulus package under the Aquino administration that aimed to fast-track public spending and push economic growth, was declared unconstitutional by the Supreme Court in July 2014.