The Commission on Audit (COA) flagged the Clark Development Corporation (CDC) for providing members of its Board of Directors (BODs) with accommodation, service vehicles, and bicycles.
In its audit report of the CDC for 2020 dated April 6, COA said the government-owned and controlled corporation (GOCC) procured 13 units of brand-new service vehicles for the official use of its top officials and members of the Board on Aug. 20, 2020.
Of the13 newly procured service vehicles , seven were issued or assigned to the firm’s BODs in October 2020.
‘Irregular and unnecessary’
COA also found out that the amounts of reimbursable Representation Allowance and Transportation Allowance (RATA) claimed by two members of the BODs in 2020 exceeded the ceiling allowed under the implementing rules and regulations (IRR) of Executive Order No. 24, series of 2011 by P38,593.68.
EO No. 24 prescribed rules to govern the compensation of members of the BODs or Trustees in GOCCs, including government financial institutions.
State auditors said the amounts were “deemed irregular and unnecessary expenditures as defined in COA Circular No. 2012-003 dated October 29, 2012.”
COA noted that Section 2, Paragraph 3 of the EO No. 24 Implementing Rules and Regulation (IRR) provides that the total allowable reimbursable expenses per BOD for transportation and meals shall be P20,000 per month, or P240,000 per year.
“Based on the above-cited policy, it is clear that the Transportation Allowance (TA) of the members of the Board are subject to reimbursement and must be supported with the submission of appropriate receipts related thereto in an amount not exceeding P20,000 per month or an aggregate if P240,000 per year; thus, the provision or issuance of service vehicles to the aforementioned BODs is deemed unnecessary,” the COA report said.
State auditors noted that the two BODs still enjoyed the benefit of claiming gasoline even if they had already reached the limit for reimbursable RATA contrary to the guidelines of EO No. 24.
According to COA, CDC’s Assistant Vice President (AVP) for Finance assured them that the excess allowance incurred by the two BODs will be refunded thru deduction from their claims.
But the GOCC justified that BODs were assigned vehicles to allow them to discharge their official functions and give them the stature commensurate to their position.
Providing housing for officials sans authority
The COA reported that the firm’s BODs were provided housing units, such as staff houses and villas, without the specific authority to enjoy the privileges.
“Verification showed that eight housing units were accorded to the CDC BODs. Further, records revealed that some BODs have already been occupying the said units since the year 2017,” the COA report said.
As of December 31, 2020, COA said the villas already incurred an aggregate amount of P1,233,514.72 for electricity and water consumption.
“The use of government property for personal purposes is considered irregular and unethical under Section 4 of Presidential Decree (P.D.) No. 1445, COA Circular No. 2012-003 dated October 29, 2012, and Republic Act (R.A.) No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees,” it said.
The COA report also noted that five housing units being occupied by the BODs were renovated during the year 2018 at the expense of the CDC in the amount of P3,555,356.
In its response to COA, the firm requested for reconsideration since the BODs need transient houses proximate to CDC. The CDC argued that it is important that BODs are immediately available and present during official events and meetings.
Based on the report, another reason given by CDC was that the BODs help in promoting tourism and investment in Clark Freeport Zone (CFZ)/ Clark Special Economic Zone (CSEZ) in addition to their regular duties.
“While the intention of management may be good, we did not find the above comments acceptable in the light of E.O. No. 24 which requires specific authority and even the approval of the Office of the President for the grant of any form of allowance to the BOD,” state auditors said.
“Had the said E.O. intended to allow the Board members to receive other benefits on top of what they are already enjoying, it would have expressly stated so,” they added.
Irregularities on procured bikes
COA also called out CDC for procuring 10 mountain bikes and five units of road/gravel bicycles worth P487,250 “to promote a healthy lifestyle among its personnel during the time of pandemic” when eight of the bicycles were permanently deployed to CDC officials for personal use and only seven units were made available for general use.
State auditors also observed lapses in the procurement processes and documentation of the equipment.
“As such, the efficient and the effective use of government funds were not ensured compromising the principles of regularity and necessity in government expenditures,” the COA report said.
In response to findings of COA, auditors said the CDC chief agreed to make the bicycles available for the general use of all CDC employees;
The CDC official, it added, has also agreed to allocate funds, if warranted, for the procurement of bicycle safety gears and formulate specific guidelines on the usage of the bicycles.