The Presidential Commission on Good Government (PCGG) had failed to preserve the P581.3 million recovered, surrendered and sequestered assets which have deteriorated and occupied by informal settlers as of Dec. 31, 2024.

In its 2024 annual audit report, the Commission on Audit (COA) said the PCGG has the power to sequester or claim control over any building or office wherein ill-gotten wealth or properties may be found.

After which, the proceeds from the sale of assets by the PCGG should be deposited with the National Treasury, it said.

In its report, the COA said that the PCGG was allotted P23,521,721.69 for the preservation of recovered, surrendered, and sequestered assets.

But for the past years, the COA noted that the budget allocations have primarily been spent on legal services and payment of taxes, insurance premiums, and other fees.

Thus, it said that minimal funds were left for asset preservation, and as of Dec. 31, 2024, the assets valued at P581,334,453.79 were inadequately preserved.

The COA report stated that when its audit team checked on the assets, it discovered that some lands and properties had already been occupied by informal settlers.

Works of art that have been recovered were not stored properly and risk being destroyed by humidity, or worse, stolen, it said.

"The absence of fences and security guards on government lands could result in unauthorized occupancy of individuals, leading to difficulties in eviction, future development, and loss of government revenue," it pointed out.

The COA added: "The lack of proper storage for expensive artworks can lead to significant deterioration and security risks. As a result, artworks are exposed to humidity, dust, pests, and physical damage, which can degrade materials such as canvas, paper, and paint. Inadequate storage also increases the risk of theft, misplacement, and unauthorized access, particularly for valuable or historically significant pieces."

At the same time, the COA said that the PCGG had also failed to pay real property taxes, which state auditors warned might lead to legal disputes or asset forfeiture.

The jewelries recovered also bear outdated appraisals, which the audit team said would lead to incorrect valuations and inaccurate financial reporting, it also said.

While the PCGG admitted that these issues were caused by budget constraints, the COA said that these happened due to lack of proper planning for program implementation.

The COA recommended that the PCGG should develop and finalize programs accompanied by comprehensive documentation to ensure the effective preservation of recovered, surrendered, and sequestered assets.

It also encouraged the PCGG to make additional representation for support from the Department of Budget and Management (DBM) to help boost the sale or administration of its assets.