AFP funds from UN 'never audited'

By RG Cruz, ABS-CBN News

Posted at Feb 23 2011 08:45 PM | Updated as of Feb 24 2011 06:46 AM

MANILA, Philippines - Reimbursements for the Armed Forces of the Philippines (AFP) from the United Nations (UN) for Peacekeeping operations during the time of former military comptroller Carlos Garcia were never audited.

This was the revelation by Commission on Audit Assistant Commissioner Lourdes Castillio before a joint inquiry of the House of Representatives committees on National Defense and Security and Appropriations.

Castillio told the joint committee that they only started auditing in 2004. Prior to that, they had no documents to work on as there were no separate books of accounts for the UN fund.

"We have only one audit report for one agency and in that matter we have prepared report for GHQ-AFP [that] includes expenses received by the agency…we have no specific report for that matter, no separate books prepared for AFP."

Castillio said a special audit only began on the UN peacekeeping funds when the Ombudsman requested for it, asking former state auditor Heidi Mendoza to take the lead on the task.

Pressed further by Defense Committee chair Rodolfo Biazon, Castillio said, "No report. We were not furnished copy of report of expenses and receipts. We were never furnished copy of it."

Castillio said documents relevant to such an audit were hard to acquire. "We were not given easy access to these records."

Elmer Cato of the Department of Foreign Affairs (DFA) told the committees in his presentation that a total of $66.5 million in reimbursements from the UN were received from 2000 to 2010. Of the amount, $14.8 million went to equipment, while $51.7 million went to troop allowances.

Cato confirmed that there were instructions from the AFP for UN reimbursements to be credited to an AFP account in the UCPB Alfaro branch in Makati City.

However, DFA Undersecretary Leslie Gatan said a reimbursement worth $3.3 million in check was withheld by the DFA and deposited in a consul account in New York after concerns were raised over the Garcia case. That amount is intact and is due to be credited to an account of the Bangko Sentral ng Pilipinas in New York for remittance to the National Treasury.

Appropriations Committee chair Joseph Emilio Abaya noted that this check, in a way, gives some credence to Mendoza's earlier testimony that there is a missing $5 million check issued by the UN and picked up by an unknown AFP officer.

Gatan, however, maintained that the UN already denied Mendoza's statement on the check.

Defense undersecretary Lorenzo Batino confirmed there is no separate account for the UN reimbursements.

"All funds from UN entered into AFP accounts, just not separated into separate book of accounts but they were entered and subject to audit."

The joint hearing then instructed the Commission on Audit to review all UN reimbursements.

Biazon said the apparent use of "too much discretion" in the handling of the UN funds was the problem.

Cato, in the meantime, told the committees that the memorandum of understanding between the government and the UN on the reimbursement money does not bind the government on how much it will pay the deployed personnel.

The MOU merely states how much the UN will pay for the personnel, but leave discretion to the government on what to do with the money.

"MOU states only how much UN will pay, [it] doesn't state how much [the] country should pay up. [It's] up to the country to come up with policy on distribution."