DND explains 'unauthorized' bank accounts with P1.813-B total balance

Published July 11, 2021, 3:34 PM

by Martin Sadongdong

The Department of National Defense (DND) clarified Sunday, July 11, that some of the “unauthorized” bank accounts of the Armed Forces of the Philippines (AFP) that were flagged by the Commission on Audit (CA) cannot be closed immediately as these contain the depository accounts of the military’s on-going projects.

A Philippine flag is hoisted as Defense Secretary Delfin Lorenzana (right) talks to Armed Forces of the Philippines Chief of Staff Gen. Cirilito Sobejana during the celebration of the 123rd Philippine Independence Day on June 12, 2021. (Photo courtesy of DND)

Defense Secretary Delfin Lorenzana said he already issued a guidance to the AFP through its Chief of Staff, Gen. Cirilito Sobejana, to expedite the closure of some 20 bank accounts with a total balance of P1,812,797,567.87 that were maintained “without the required authority.”

“The DND-AFP has been processing the closure of these accounts in adherence to the COA guidelines. However, some accounts cannot be closed outright as these are the depository accounts for our current projects, most of which are multi-year obligations,” Lorenzana said.

In its 2020 annual audit report of the AFP General Headquarters (GHQ) released last Friday, the COA flagged the AFP over its alleged failure to close 20 unauthorized bank accounts that were maintained “despite the absence of express written authority from the Permanent Committee.”

The Permanent Committee was created under the Administrative Code of 1987 and is composed of the secretaries of the Department of Finance (DOF) and Department of Budget and Management (DBM) as chairpersons, and COA officials as its members.

Under Section 45 of the Administrative Code of 1987, the Permanent Committee shall “monitor and evaluate the activities and balances of all Funds of the national government other than the General fund.”

“We recommended that Management promptly comply with the cited rules and close the stated bank accounts, or obtain authority from the Permanent Committee for its retention,” the COA said.

Accordingly, the COA said that Finance Secretary Carlos Dominguez already sent a formal letter to Lorenzana dated June 19, 2020 recommending that the bank accounts be closed and the outstanding balance returned to the national treasury.

The COA reportedly found the bank accounts in the AFP Modernization Act Trust Fund (AFPMATF)-Central Office, AFP Educational Benefit System Office, AFP Real Estate Office, and GHQ Central Office among others.

Lorenzana said the DND has already issued its guidance to the AFP upon their recept of advide from the DOF and the findings by the COA.

But since some of the bank accounts cannot be closed immediately, Lorenzana said they have already informed the DOF and COA about the situation of the accounts.

He also assured that the future projects of the defense and military departments “will be henceforth places in the remaining authorized accounts” of the DND and AFP.