Andaya: DOH fund transfer to DBM 'unconstitutional'

RG Cruz, ABS-CBN News

Posted at Aug 21 2021 12:47 AM

MANILA - A former head of the Department of Budget and Management (DBM) believes the fund transfer from the Department of Health (DOH) to the DBM’s Procurement Service for the purchase of common supplies and equipment violated the Constitution. 

Former Budget Secretary Rolando Andaya, who held the post from February 2006 to February 2010 during the Arroyo administration, said the fund transfer lacked a memorandum of agreement between the two departments. 

He disputed claims by former DBM Procurement Service (PS) head undersecretary Lloyd Christopher Lao that there was no need for an agreement between the two agencies for the fund transfer. 

Lao led the PS-DBM during the time of the transactions flagged by the COA.

“Not true yung sabi Usec. Lao na no need MOA (memorandum of agreement) between DBM and DOH. Unconstitutional 'yan. An entire provision sa 1987 Constitution was dedicated to prevent the very same act," Andaya told ABS-CBN News in a text message.

Andaya pointed out that Section 25, Paragraph 5, Article 6 of the 1987 Constitution states that, “no law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.” 

He added that COA has already raised the alarm on this since 2018. 

"I did the investigation myself but the secretaries snubbed the investigation. Remember (then DBM Sec. Benjamin) Diokno refused to appear sa committee. Ito 'yun. He actually fired the PS head noon for attending the hearing. At that time, DOTR had the highest amount of parked funds. Foreign-assisted projects. Super big amount just cant remember the exact amount. COA attended the investigation," he said.

"It was also Diokno that allowed these types of projects to be undertaken by PS-DBM. The mandate of PS is for the purchase of common use items of the national government lang and not big ticket infra or specialized items because wala naman sa DBM ang expertise on these matters."

"In fact, the staff of PS-DBM are not even manned by plantilla personnel. That is how highly skilled and technical that office is. As I said, it's only for common used items like paper, pen, ink, etc," Andaya said.

Andaya was also majority leader and appropriations committee chair in previous stints at the House. 

He explained that the unspent funds of DOH at the PS-DBM are contrary to the policy of a one-year cash budgeting where the cash for one year should be spent within the same year. 

“So you have billions of funds hidden sa DBM-PS not just from DOH but also DOTR (foreign-assisted projects). Why put these amounts in the departments when they will be transferred upon implementation. 'Di ba yung departments ang experts dapat sa field of work nila. What does DBM know about PPE and airports and subways?" he said.

Earlier Friday, Lao claimed that the PS-DBM followed the government’s procurement processes and that the transactions were all documented, and that the purchase of the face masks and shields were transferred by the health department to the PS-DBM as these items were considered "common supplies."

“When it was considered common use, common supplies, PS-DBM already has the authority to buy these items together with DOH, PITC, DSWD, LGUs, so all agencies now may procure such item under common goods and supply,” he said.

Health Secretary Francisco Duque, meanwhile, admitted during Friday's hearing that there was no memorandum of agreement between the DOH and the PS-DBM for the transfer of some P42 billion in COVID funds.

Bayan Muna Rep. Carlos Zarate flagged the PS-DBM because it was in charge of the procurement of many agencies. 

“Napakaraming procurement, di lang sa DOH, ang naka-sentro sa PS-DBM. Some other time, tignan na rin natin ang main function nito," he said.

The Bayan Muna lawmaker said Congress should review executive agencies' practice of asking the PS-DBM to procure on their behalf as there may be conflict of interest.

He asked Duque to explain why the DOH couldn't procure the supplies themselves. 

“During the first months of the pandemic, we tried to exhaust all means to procure these COVID-related items to ensure steady supply for health workers,” Duque replied. 

Allowing government agencies to rely on the PS-DBM for large procurements also leads to the waste of billions in taxpayers' money, Zarate said.

"Kung hindi dinownload ng DOH sa PS-DBM at sila ang personally nag-procure ng supplies na ito, at naka generate sila ng savings, that savings can be easily used," he said.

Lao has been invited by the House Committee on Public Accounts to its next congressional inquiry on the DOH funds flagged by COA. The Senate has also summoned the former DBM official for a hearing.

He said was ready to face the Senate as it looked into the DOH's fund transfer to his office.


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