COA questions 'misuse' of PNoy's PDAF in Cagayan de Oro

By Michael Punongbayan, The Philippine Star

Posted at Jul 06 2013 08:58 AM | Updated as of Jul 06 2013 06:16 PM

MANILA, Philippines - President Benigno Aquino III gave more than P11.49 million of his own Priority Development Assistance Fund (PDAF) to Cagayan de Oro City in Misamis Oriental last year to finance relief and operational assistance and for the repair, rehabilitation and reconstruction of school buildings, irrigation and flood control systems, roads, and bridges in areas affected by calamities.

The city government, then headed by Vicente Emano as mayor, however, used the amount for a different purpose – the second phase construction of the water system in Barangay Indahag.

State auditors, in a report released last Wednesday, questioned the city government’s action since it used Aquino’s pork barrel allocation for a different purpose other than what was specified in a Special Allotment Release Order (SARO) issued in December 2011, without asking for approval from Malacañang.

“As noted, construction of water system is not among the projects or activities to be funded from the PDAF…,” the Commission on Audit (COA) said.

“Any proposed changes, modifications or revision of the defined uses or purposes thereof require prior consent and/or approval of the grantor, in this case, the President of the Philippines or his authorized representative,” it said.

“However, despite the absence of an approval from the Office of the President amending or modifying the intended purpose/use of the fund, still the agency continued to implement the project. To date, the project is already 97.45 percent completed,” it added.
The COA report noted that per Aquino’s directive, a check for P50 million dated Dec. 23, 2011 was deposited at the Land Bank of the Philippines branch in Cagayan de Oro City and credited to the current account of the city government.

Using a portion of the fund, the city government implemented the contract for the construction of the second phase of the Indahag water system with C. Dy Builders and General Merchandise as its contractor for P11,498,873.42 in 2012.

In defense, the city accountant argued that the SARO representing the P50-million PDAF of Aquino was a lump sum, thus they did not wait for the President’s approval and implemented the project immediately.

The city officials explained that based on the SARO, the money was “to cover the cash requirements of Cagayan de Oro City for relief and operational assistance and for the repair, rehabilitation and reconstruction of school buildings, irrigation system, flood control and roads and bridges in areas affected by calamities” and taken up as subsidy to local government units.

Pointing the finger at the Department of the Interior and Local Government (DILG), the city accountant told COA that the verbal instruction of the department, relayed through its city director, “that we send the proposal and if it is accordance with the purpose of the SARO and for Typhoon Sendong-related projects, it needs no further approval, which the management also holds the same opinion.”

“The SARO being issued in lump sum and did not in any way mentioned subject to submission of specific project identification, it is requested that this be considered,” the city accountant said.

State auditors, however, disagreed, saying the SARO, upon scrutiny, specifically disclosed the purpose for the use of Aquino’s PDAF.

“It is a basic principle of government expenditure that funds shall be used only for the purpose it is intended. Using the funds for purpose other than that it is originally intended, requires approval from higher authorities,” the COA report said.