COA unearths another budget department mess

By Beting Laygo Dolor, Editor

MANILA – It looks like the Commission on Audit (COA) has opened a Pandora’s box of scams and scandals at the Department of Budget and Management (DBM).

Specifically, the Procurement Service (PS) of the DBM has been caught in yet another case of a wholesale and unauthorized misuse of funds.

This time, the COA ordered the PS-DBM to return to the government’s coffers more than P3 billion (about $54.54 million) it had placed in an unauthorized bank account.

While the funds were placed in a high-yield saving account which therefore appears to be beneficial to the national treasury, such placements are not within the authority of the Budget department.

Also, because of the large sum involved, most if not all of the country’s commercial banks are eager to grab such a placement, and brokers commissions can be involved.

In the absence of a bidding, it is possible that the DBM did not receive the highest interest earnings for the P3 billion.

The DBM was ordered by COA to return P3.001 billion to the Bureau of Treasury, after an audit conducted in 2021 found that the funds had been deposited at the Development Bank of the Philippines.

According to COA, “It is not in PS-DBM’s mandate to make investments and it has no authority to invest in a high-yield savings account. The practice of investing cash in a High Yield Savings account, therefore, deviates from its mandate of procurement of CUSE (common use supplies and equipment) which requires the utilization of funds.”

State auditors found that the bank account was opened more than five years ago. Officials at PS-DBM could not specify the source of the funds.

This was not the first time that the COA had flagged the PS-DBM for maintaining a high-yield savings account. In 2020, the Procurement office was warned after it was found that such an account had been opened at the Land Bank of the Philippines.

The placements in the banks were in violation of Executive Order No. 431 dated May 30, 2004.

Failure to return the P3 billion is contrary to Department of Finance-DBM-COA Joint Circular No, 04-2012 dated Sept. 11, 2012, which says that all dormant accounts along with unnecessary special and trust funds shall be reverted to the general fund.

The PS-DBM is currently being investigated by Congress for its role in purchasing “pricey” and “outdated” laptops for the Department of Education valued at P2.4 billion.

Last year, the PS-DBM was also implicated in the purchase of overpriced and substandard medical supplies from Pharmally Pharmaceutical Corp amounting to P12 billion.

DBM officials said this week that the P3 billion bank placements would be returned to the national treasury.

Budget Secretary Amenah Pangandaman, however, pleaded with congressmen not to abolish the PS-DBM, asking that they be given “another chance.”

She added that she would “defer to the wisdom of the Congress if they really wish to abolish PS-DBM.”