Auditors find NFA 'badges of fraud'

By Marvin Sy, The Philippine Star

Posted at Jan 31 2014 02:12 AM | Updated as of Jan 31 2014 10:12 AM

MANILA, Philippines - Amid reports of the resurgence of rice smuggling in the country, the Commission on Audit (COA) has initiated a fraud audit of the National Food Authority (NFA).

COA chairman Grace Pulido Tan told the Senate Blue Ribbon committee yesterday that the audit would cover transactions of the NFA in the last five to seven years.

Tan said the COA reviewed its audit reports on the NFA for the past few years and saw “some badges of fraud,” prompting the commission to take a closer look at the matter.

She said in conducting the fraud audit, the COA took into consideration the current congressional inquiry on the rice smuggling issue.

Tan said a fraud audit is a special audit that the agency undertakes once it sees that irregularities might have been committed.

She said there were various instances when the irregularities or discrepancies found in the audit of government agencies do not necessarily mean that illegal activities were committed.

“Sometimes they are not too familiar with the applicable laws, sometimes they are just a bit lax in the implementation (of laws). But it is a different case when there is a pattern or it appears that it was planned and that’s why we are pursuing a fraud audit in this particular case,” Tan said.

She clarified the audit would cover not only the Arroyo administration, but also the current one as the issue on rice smuggling cropped up in recent months.

Tan said the COA was able to get a lot of information from the hearings conducted by the Senate and the House committees handling the rice smuggling issue.

In 2010, several rice smuggling incidents were reported nationwide such as at Subic Bay Freeport where large rice shipments were seized.

NFA officials were questioned including a former tourism official who allegedly brokered for the traders wanting to bring the shipment out.

During the latter part of the Arroyo administration, it was alleged the NFA over-imported rice, a lot of which ended up rotting in warehouses.