COA Findings on Basey

An excerpt of the COA Annual Audit Report for CY 2012:

 

"Payments of financial assistance under the Aid to Individual in Crisis Situation (AICS) Program and to different Barangays for various purposes in the total amount of P981,606.00 and P360,800.00, respectively; and various donations to other individuals/entities through reimbursement of SB members and direct payment to recipients in the total amount of P1,274,000.00, were made notwithstanding the absence of the basic documents supporting the claims, contrary to the provisions of DSWD Department Order No. 22, as amended by Administrative Order No. 5, Series of 2008, and Section 4 (2 & 6) of P. D. 1445, thus, casting doubt on the necessity and propriety of the transactions.

Department of Social Welfare and Development (DSWD) Department Order No. 22, Series of 1995, dated August 1, 1995 provides for the AICS Service, which refers to the provision of timely and appropriate aid to individuals/families in distress brought about by a sudden severe event or a series of stressful situations during which their social functioning is impaired and their resources are inadequate to cope with the problem.

  DSWD Administrative Order No. 5, Series of 2008, in so far as relevant, sets the Programs/Services and Strategies/Interventions handled by its Crisis Intervention Units (CIU), which are:

• Rescue operation to respond to cases needing immediate action in coordination with law enforcers and other government agencies;

• Counseling/Critical Incident Stress Debriefing;

• Limited Financial and Material Assistance – this is the provision of limited assistance in cash or in kind for food, clothing, medicines, transportation, burial and other immediate needs to individuals and families, whose normal functioning has been hampered due to stressful situations brought about by socio-economic difficulties.

• Limited Financial Assistance:

• Burial assistance – outright cash not exceeding P3,000.00 may be extended to the client.  Amounts between P3,001.00 and P5,000.00 shall be issued thru a check payable to the funeral parlor.

• Transportation assistance - outright cash not exceeding P3,000.00 may be extended to the client.  Amounts between P3,001.00 and P5,000.00 shall be issued thru a check payable to the transport company and/or client shall be escorted by the CIU staff to purchase ticket.

• Medical assistance – medicines/hospitalization.  Ceiling amounts mentioned above apply to medicines, with the check payable issued to the accredited drugstore.  Assistance during hospital confinement is through a check made payable to the hospital.

• Educational assistance – tuition fee payments of individuals only, with the check made payable to the school.

• Other emergency needs – outright cash not exceeding P2,000.00 to cases not within the categories mentioned, such as milk for babies, impending eviction from houses, etc.

• Limited Material Assistance – food and clothing assistance

• Referral Services – pertains to a process of linking the client to other agencies in order to avail of assistance that is not provided by the CIU.  Includes referral for temporary shelter;

• Monitoring and augmentation assistance to disaster victims;

• Coordination/networking with other agency for the conduct of home-visitation to families and relatives for their integration; and

• Referral of clients to other agencies providing assistance for their rehabilitation and appropriate assistance.

Implementing procedures include the intake interview, wherein the social worker on duty will gather collateral information about the client using a prescribed General Intake Sheet (GIS).  The worker shall prepare an assessment/impression of the case which shall be the basis for the recommendation for the provision of assistance.  A certificate of eligibility shall also be prepared by the social worker, signed by the client, and then approved by the Unit Head, which shall serve as a basis for the release of assistance as long as there is consistency of the claimant’s signature in case the latter cannot produce a valid ID.

Supporting documents, in original or certified true copy forms/documents shall also be required from clients based on the assistance requested, as follows:

• Any valid ID (Postal ID, Driver’s License, SSS ID, Senior Citizen’s ID or Barangay Certificate in the absence of any valid ID);

• Clinical Abstract/Medical Certificate from a licensed physician for request for medical assistance;

• Funeral contract/Registered Death Certificate for burial assistance;

• Enrollment assessment form for educational assistance;

• X xx

The above supporting documents shall be submitted for auditing purposes except for the prescribed GIS and Social Case Study Report or case summary which shall remain in the CIU file for confidentiality purposes.

In addition, Section 4 (6) of Presidential Decree No. 1445 otherwise known as the Government Auditing Code of the Philippines provides that claims against government funds shall be supported with complete documentation.

In addition, paragraph 2 in the same section of the said decree states that government funds and property shall be spent or used solely for public purpose.

• Financial assistance under the Aid to Individual in Crisis Situation (AICS) Program in the amount of P981,606.00.

Our verification of the transactions of the municipality showed a total disbursements of P981,606.00 (see Annex M) for the payments of various  assistance  under the Aid to Individuals Crisis Situation (AICS).  This assistance were either in the form of financial assistance, medical assistance, burial assistance, educational assistance, and food assistance paid either directly to individuals, embalmer services, thru reimbursement of the Municipal Mayor, and thru Treasurer’s cash advance/petty cash fund replenishment broken down as follows:

1	Thru Reimbursement of the Mun. Mayor
	- Financial Assistance	P	270,376.00
	- Medical Assistance		156,475.00
	- Medicines Assistance		6,000.00
	- Food Assistance		42,190.00
	- Burial Assistance		7,600.00
	-Other Various solicitations		79,665.00
	TOTAL		562,306.00
2	Thru Petty Cash Repl. Of of the Mun. Treasurer-OIC
	- Food Assistance		9,600.00
	- Medical Assitance		10,800.00
	- Medicines Assistance		26,800.00
	- Financial Assistance		6,600.00
	- Educational Assistance		3,500.00
	- Shelter, Employment, & Transpo. Assistance		9,700.00
	TOTAL		67,000.00
3	Directly Paid to Individuals
	- Financial Assistance		60,700.00
	- Medical Assistance		24,200.00
	- Educational Assistance		8,000.00
	-Food & Shelter Assistance		19,000.00
	TOTAL		111,900.00
5	Directly to Paid Embalming Service
	- Burial Assitance		240,400.00
	GRAND TOTAL	P	981,606.00

As can be observed out of the total disbursement, 57% or P562,306.00 were made on a reimbursement basis in the office of  the Local Chief Executive (see Annex N), 25% or P240,400.00 were directly paid to the Embalming Service Dealer (see Annex O ),  11% or P111,900.00 were directly paid to the recipients and 7% or P67,000.00were paid through the cash advance of the Treasurer.  The Educational assistance of P8,000.00 was directly paid to the student instead of the school to which they are enrolled in.

Payment of this assistance through reimbursement basis implies that the recipients were paid without going through the normal procedures prescribed in the implementation of the program contrary to the guidelines set in DSWD Department Order No. 22. Hence the following deficiencies were noted to wit: 

• Grant of Financial Assistance, Burial Assistance, and Food Assistance in the aggregate amount of  P 320,166.00 paid from the reimbursement of the Municipal Mayor were not  supported with DSWD Assessment Report, Barangay Certificates or valid IDs of the recipient.

• Grant of Medical and Medicine Assistance in the aggregate amount of P162,475.00 paid also from the reimbursement of the Municipal Mayor were mostly supported only with prescriptions of the physician,  and  only a few are supported with DSWD Assessment Report, Medical Abstract from licensed physician. All were not supported with Barangay Certificates or valid IDs of the recipient.

• Also, Burial Assistance paid directly to the embalming service dealer in the aggregate amount of P240,400.00 were supported only with death certificate and official receipt. No DSWD Assessment Report and  Barangay Certificates or valid IDs were attached;

• ·Educational assistance of P8,000.00 was directly paid to the recipients instead of the school where they are enrolled, and not supported with the required enrolment form. Likewise, not supported with the assessment report from the DSWDO and valid IDs or Barangay Certificates;

• Other various donations in the total amount of P79,665.00 paid also from the reimbursement of the Municipal Mayor for various solicitation letters do not fall under the AICS Program thus, maybe considered private in character.

These documents, along with the intake interview, ensures that the person requesting financial assistance had undergone step-by-step evaluation and had been found to be in an immediate crisis/stressful situation that is emergency in nature, and is therefore qualified to receive such funds under the program.

Furthermore, our review of the Annual Budget of the municipality for CY 2012 showed that there was no specific appropriation for AICS. However, our further examination disclosed that it has other related appropriation in the Office of the Municipal Social Welfare and Development (MSWD), Office of the Mayor, with the same Account Code 878- Donation Expense as follows:

Office	Budget	Acct. Code	Purpose
Office of the Mayor	P 500,000.00	878	Not specified.
Office of the Social Welfare and Development	20,000.00 100,000.00	878 878A	Assistance for Disabled & Elderly. Emergency Assistance Program
TOTAL	P620,000.00

As can be gleaned, the total amount spent for the program is more than the appropriated amount in the annual budget as programmed in the Office of the Municipal Social Welfare Development Officer and Office of the Mayor.   The total appropriated amount is P620,000.00 only, while the total expenditures amounted to P 981,606.00.

The failure of the responsible officers to submit complete supporting documents and to observe the prescribed procedures cast doubt on the propriety of the implementation of AICS Program and hence the funds under the service are exposed to misuse and/or abuse in its disposition.

During the exit conference, the Municipal Mayor agreed to comply with the requirements especially on the implementation of the DSWD Program.

• Financial Assistance given to different Barangays, Association of Barangay Captains (ABC) and for SK activities in the total amount of P360,800.00.

Audit disclosed that aside from the mandatory aid to barangays as contained in its regular budget in the amount of P255,000.00.  The LGU also disbursed several financial assistance to the different barangays, Association of Barangay Captains (ABC) and to SK activities in the total amount of P105,800.00 (see details in Annex T). The summary is as follows:

Purpose	Amount
Financial Assistance -51 Brgys	P255,000.00
Additional assistance:
Financial Assistance	51,000.00
Summer Sport –Brgy San Antonio	6,000.00
Jetmatic pump –Brgy.Balud	7,000.00
Pathway – BrgyGuirang	10,000.00
Filling Materials-Bgy Dolongan	10,000.00
Fin Assistance –Bgy Villa Aurora	5,000.00
Fin Assistance-BgySugponon	5,000.00
Fin Assistance-Bgy Pelit	4,000.00
Pathway-Bgy Guirang	2,800.00
Basketball- Bgy Amandayehan	5,000,00
Sub-total	105,800.00
Grand Total	P 360,800.00

It was also noted in audit that all these transactions were not supported with Official Receipts of the respective barangays, or that of the ABC which serve as evidence that the funds were officially received by the said barangays/ABC. As a consequence the funds received may not be officially accounted as barangay or ABC funds hence the funds may be used, other than the purpose for which it were given.

Funds transferred to the barangays in a form of financial assistance from the municipality either through the Barangay Chairman, Brgy. Kagawad, Brgy Treasurer and Sk Chairman should always be supported with Official Receipt of the barangay concerned for proper accounting. It is in turn the responsibility of the respective barangays to account for the actual expenditure of the funds. It was also noted that, in two instances, it was instead the Municipal Treasurer which issued the official receipts for the amount of P5,000.00 given to Brgy Villa Aurora and Brgy. Sugponon allegedly for the return of the check it previously issued to the said barangays.

Other deficiencies noted are as follows:

• The amount of P255,000.00 which was a cash advance of the Municipal Treasurer and P51,000.00 given to the ABC president have no covering disbursement vouchers but were reported as part of Donation Expense. Hence there is no assurance that the funds were spent for official purpose. It should be noted that the amount of P255,000.00 is different from the other mandatory “Aid to Barangays” of P5,000 each for the 51 barangays or a total of P255,000.00.

• Except for the amount of P7,000.00 given to Brgy. Balud, the said financial assistance were not supported with resolutions of the Brgy, SK or ABC stating the necessity for the solicitation and unavailability or insufficiency of funds in the organization. The same were only supported with solicitation letters of the Brgy/SK Chairman or one of the Kagawads. It would be noted that the Barangays, SKs or even the ABC has their own funds for their operation thus the decision of the necessity to solicit funds outside of their organization should come from all its members.

The lack of complete supporting documents for this transactions cast doubt on the necessity and propriety of the transactions

During the exit conference, management admitted their deficiency and agreed to observe on the proper and complete documentation  of a transaction to avoid doubt on the propriety of a transaction.

• Various other donations to other individuals/entities through reimbursement of SB members and direct payment to recipients in the total amount of P1,274,000.00.

Audit also disclosed that other Donation Expense incurred were financial assistance given to individuals. Entities other than those falling under the “Assistance to Individuals in Crisis Situations” (AICS) program. These were made mostly through reimbursement basis of the SB members and some were directly paid to such individuals and entities in the total amount of P1,274,000.00. This consists of the following:

	Particulars		Amount
1	Various and Misc. Donations/Solicitation
	thru Reimbursement of SB Members	P	1,212,000.00
2	Financial Assistance to Employees of  BNHS, DOJ, Parole & Probation for training, Seminar/Convention		36,500.00
3	Financial Assistance to Individuals to Swimming Competition		8,000.00
4	Financial Assitance to HFB-MPC		5,000.00
5	Financial Assitance to BAMFESCAMOSA- Alberto Llema		4,000.00
6	Financial Assistance to Salvacion Elem. School thru SB Ocop		5,000.00
7	Financial Assistance given to town fiesta decoration		3,500.00
	TOTAL	P	1,274,000.00

The above disbursements were not supported with the appropriate supporting documents contrary to Section 4 Paragraph 6 of PD 1445.

Payment for the reimbursement of SB members for various miscellaneous donations and solicitations in the total amount P1,212,000.00 are supported only with Reimbursement Expense Receipt (RER) and solicitation letters (see Annex L). These transactions could hardly fall under any of the programs of the LGU.

Financial assistance given to an employee of the DOJ, Parole and Probation Office and DepEd for trainings/seminars/conventions in the total amount of P36,500.00 were not supported with Itinerary of Travel/ OR for registration fee and certification from their respective agencies that no such claim was made.

Financial assistance to Salvacion Elementary School in the amount of P5,000.00 respectively were not supported with  official receipts. Hence this could not be properly accounted in the said schools. These items should have been more properly charged to Special Education Fund.

Financial assistance given to private organization such as HFB-MPC in the amount of P5,000.00 for the prizes of their general assembly and also to participants in swimming competitions in the total amount of P8,000.00 as well as decorations of town fiesta in the amount of P3,500.00, may be considered private in character hence contrary to Sec. 4 paragraph 2 of PD 1445.

The failure to observe certain policies on disbursement of government funds and lack of complete documents to support these expenditures in the total amount of P1,274,000.000 is contrary to Section 4 Paragraphs 2 and 6 (Fundamental principles) of PD 1445. Hence creating doubt on the necessity and propriety of the transactions. Disbursement of government funds if not fully documented and not in accordance with proper procedures may just go to waste. 

During the exit conference, management agreed to follow the recommendation.  However, they inquired of what proper documents to support that would allow payment of the same transaction.

We recommend that management should strictly implement the provisions of DSWD Department Order No. 22, as amended by Administrative Order No. 5, Series of 2008, and Section 4(2 & 6) of P. D. 1445. This recommendation is without prejudice to the issuance of Notices of Suspension and/or Disallowance resulting from post-audit of transactions."