Press Release
August 19, 2010

Recto to Ombudsman: 'Level up' anti-graft drive by running after public execs who racked up P4.7B in illegal expenses

Sen. Ralph G. Recto today said the Office of the Ombudsman should train its guns on public officials who continue to ignore "demand letters" from the Commission on Audit (COA) to return to state coffers some P4.7 billion in disallowed expenses for fiscal year 2008.

"I would like to politely remind the Ombudsman to level up their campaign by also running after these public officials," Recto said, noting that not a single centavo has been reported returned by the involved officials and their agencies.

"The recovery of these illegal disbursements is of paramount importance. The impact of such possible inflow of funds to a new government scouring for fresh revenues may help divert its attention from ultimately VAT-ing the toll roads," he added.

Recto stressed the Ombudsman's focus should be on the recovery of the disallowed expenditures, which is a graver spending offense than unanswered calls to settle unliquidated cash advances. He said a "disallowance" is more harmful than an "unliquidated expense" as the former is illegal spending that must be reimbursed to the government.

Unliquidated expenses, on the other hand, are advances whose proof of spending has yet to be reported or backed up by receipts, according to Recto.

"In the case of an unliquidated advances, there could just be delay in settlement, but in the case of an audit disallowance, there is a finality of finding that funds involved have been spent irregularly and thus must be returned," Recto, Senate ways and means chair, said.

Recto said findings by the COA for the year 2008 revealed that public officials from various agencies racked up a total of P4.75 billion in "disallowances", which are now part of the mountain of government receivables.

Disallowances and charges posted in 2008 slightly rose by P42 million from the P4.71 billion reported in fiscal year 2007.

The COA report does not even cover "disallowances" incurred by local governments and government corporations.

Recto also said government's "other outstanding receivables" have ballooned to P24.1 billion in 2008 from P20.4 billion in 2007 based on COA's findings.

He said bulk of the receivables or about P20.83 billion represents collections by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), which accredited collecting banks failed to remit to the Treasury by end of 2008.

"I hope that this has been remitted in full by now. Measures should be instituted to prevent delay in the remittance in taxes collected by proxy," he said.

Recto said the fiscal vigilance being displayed by the Office of the Ombudsman should be met with enthusiasm but it should be re-directed to a more worthy target.

"The anti-graft watchdog should bark up another tree," he said.

He said what should be withheld are the salaries of those public officials who committed illegal spending in 2008 as exposed by COA.

Ombudsman Merceditas Guiterrez has ordered nine government agencies to withhold the salaries of their accountable officers for their failure to liquidate cash advances amounting to some P2.4 billion.

The agencies are the Department of Education (DepEd) with unliquidated cash advances of P1.6 billion; Commission on Elections (Comelec), P406 milion; Philippine National Police (PNP), P313.3 million; Bureau of Jail Management and Penology (BJMP), P18 million; Bureau of Immigration (BI), P9.8 million; Department of National Defense (DND), P6.3 million; Bureau of Customs (BoC), P392.65 million; Philippine Ports Authority (PPA), P368.48 million; and National Police Commission (Napolcom), P226.88 million.

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