Philippines' Department of National Defence misused relief fund

Philippines' Department of National Defence misused relief fund

MANILA, Philippines - A "huge portion" of the P352.5 million (S$31.6 million) in emergency funding of the Department of National Defence in 2013 had been misused by the military, which spent money meant to help victims of natural disasters to pay for its fuel consumption and repairs of its offices, state auditors have discovered.

According to the Commission on Audit (COA), P843.5 million in Quick Response Fund (QRF) of the DND had also remained unliquidated since 2012.

Answering the findings of the COA, the defence department maintained that the emergency fund was "utilized for the purpose it was released to DND."

In its periodic audit, the COA found out that a number of projects under the DND's emergency fund had yet to be completed by its attached units despite the release of the budget.

It said the DND had spent only P6.65 million, or less than 2 per cent of its QRF for 2013, for the purchase of relief items for the victims of Supertyphoon "Yolanda" (international name: Haiyan) which left 6,300 people dead and caused unimaginable destruction in the Visayas region that year.

"The year 2013 would have been the opportune time to use the QRF for the purpose it was released due to the various calamities that occurred," the COA said in a report posted on its website.

"However, the transfer of funds to IAs (implementing agencies) for projects not within the purposes of QRF, the noncompletion of the projects and the minimal liquidation by IAs of the fund transfers, defeat the purpose of the fund," it added.

As stated in the General Appropriations Act (GAA), the COA said the QRF was specifically intended to be used as "a stand-by fund for relief, rehabilitation and reconstruction programs" for residents of communities affected by disasters.

"There are only a few agencies which were appropriated with QRF and these were released to them by virtue of the functions they hold. They are bound by the provisions of the GAA and the elemental purpose of the funds," it said.

"On the part of DND, (the funds) were released to alleviate the situation and living conditions of calamity victims so that their conditions may be quickly normalized. Though they may use the same for pre-disaster activities, the genuine purpose of the funds should not be disregarded," the commission stressed.

Among the implementing agencies that received QRF from the DND were the Army, Navy, Air Force, Office of the Civil Defence (OCD), Philippine Military Academy, the Armed Forces Philippines Finance Center and the Veterans Memorial Medical Center.

"A huge portion of the QRF was transferred to various bureaus under the (DND) for the acquisition of equipment, petroleum, oil and lubricants, training, construction/repairs and improvement which were not all consistent with the purposes of QRF…, thus, defeated the purpose of the fund," the COA said.

In 2013, it said the DND released nearly P452 million to its attached agencies for the purchase of rescue equipment, but the procurement had not been completed.

The COA said the DND's agencies spent almost P360.8 million in emergency funding for training programs and for the construction, repairs and renovation of offices.

"(The funds) have not been used for the intended purpose of the QRF," the COA concluded.

The COA also questioned the transfer of nearly P36 million to the OCD, saying the DND's action did not appear "to be appropriate since the relief and rehabilitation activities supposed to be funded out of QRF are not included among the functions of OCD."

"Moreover, (the) OCD was already allocated with QRF under (its annual budget)," the COA said.

In addition, the COA auditors raised doubts if the AFP Finance Center had spent its QRF allocation of P21.1 million on relief and rehabilitation, pointing out that no liquidation documents had been submitted so far.

DND defends programme

"The DND embarked on a programme that would ensure that the capacity of its bureaus, most especially the AFP, the first responders in disaster response operations, and the OCD, tasked with administering a comprehensive national defence and disaster risk reduction and management programme, are enhanced," the department said.

It argued that the requirement for the use of QRF, like the submission of budget preparation forms and monthly cash programming, was "contradictory" to the purpose of the emergency fund since calamities were "totally unpredictable."

The DND also claimed that the liquidation of the transferred funds "limits what can be utilized in preparation for, during and after the occurrence of such emergencies" because such situation may happen just days after the other.

"Realistically, the preparation of a comprehensive relief and rehabilitation plan/programs should come after the postdisaster needs assessment conducted by the OCD, in consultation with (local officials) and other stakeholders. This takes time, sometimes too long for communities already in need of immediate assistance," the DND said.

Despite this, the defence department vowed that it would observe "due diligence in the utilization of the QRF and shall comply with the instructions on the strict monitoring of the projects and liquidation of fund transfers."

Early planning needed

The COA, however, reiterated that the "preparation of the plans/programs for relief and rehabilitation does not have to be done after the disaster."

"Activities for the QRF allotted each year should have been planned even before the occurrence of disaster to ensure that the needed assistance can be delivered to calamity victims," it said.

The COA also urged the DND to come up with a programme of expenditures for the QRF, including relief and rehabilitation programs to help victims of natural disasters.

The agency asked the DND to "closely monitor and direct the IAs to expedite the implementation and completion of the projects in order that these projects can be used to alleviate the difficulties of victims and assistance can be readily extended when needed."

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