Facade of the Department of Education Central Office in this photo taken on July 18, 2024.  Jonatjhan Cellona, ABS-CBN News 

MANILA – The Commission on Audit has flagged the Department of Education for its failure to settle nearly P12.3. billion from its 2023 budget.

In its annual audit report for 2023, state auditors said DepEd's disallowances, suspensions and charges totaled P12.3 billion by year-end.

"Non-compliance with the existing laws, rules and regulations resulted in P10,099,733,281.52 in suspension, P2,190,140,136.53 in disallowance, and P7,383,880.88 in charges, for a total of P12,297,257,298.93 as of December 31, 2023, which remained unsettled," the COA said.

Vice President Sara Duterte was still DepEd Secretary for the said fiscal year. She resigned from the Cabinet post last June.

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According to the COA report, the Notice of Suspension reached P10,099,733,281.52, the Notice of Disallowance amounted to P2,190,140,136.53, while the Notice of Charge totaled to P7,383,880.88 at the end of fiscal year 2023.

State auditors noted that the DepEd's starting unsettled balance on December 31, 2022 stood at around P11.3 billion, with the total increasing to P12.3 billion by the end of 2023.

In the breakdown of the unsettled amount, DepEd had P9.2 billion under the Notice of Suspension and incurred an additional P4.1 billion. COA said DepEd only settled P3.2 billion, leaving the total NS at P10.1 billion by the end of 2023.

DepEd incurred P58 million additional disallowances, pushing the total to P2.2 billion by year-end. The report said the agency settled P23.4 million of the total.

The DepEd central office had the highest amount of disallowances at P1.2 billion, none of this amount was settled by year-end.

As for the Notice of Charges, COA said DepEd did not incur new charges but it only settled P177,648.39 of the P7.6 billion starting balance from 2022. 

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Based on a COA circular, auditors shall issue a Notice of Suspension “for transactions of doubtful legality/propriety/regularity which may result in pecuniary loss of government.” 

If the transactions in question are not explained or validly justified with legal basis or documentation, these may be disallowed in audit.

Auditors will then issue a Notice of Disallowance (ND) or Charge for “transactions which are irregular/unnecessary/excessive and extravagant” as well as those considered illegal.

NDs are issued to notify those responsible for the disallowance and must be settled within six months from receipt.

As for the Notice of Charge, auditors issue this for wrong appraisal or assessment; or if the amount billed or collected is less than what is due the government.

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In the same COA Circular, state auditors said those responsible must settle the suspension or disallowance/charge.

"An audit suspension or disallowance/charge shall be settled by the persons responsible or liable therefor through compliance with the requirements, or payments/restitution or by any of the modes of extinguishment of obligation provided by law," it said.

In response, DepEd management agreed “to cause the immediate settlement” of the balance.

Once the suspension or disallowance/charge is settled, auditors will issue a Notice of Settlement or Suspension/Disallowance/Charge or NSSDC.

UNLIQUIDATED CASH ADVANCES NEAR P7-B

Similarly, state auditors called out DepEd for P7 billion in unliquidated cash advances.

"The DepEd did not strictly adhere to the laws, rules and regulations in the grant, utilization and liquidation of cash advances (CAs) which resulted in the accumulation of unliquidated CAs amounting to P6,959,017,036.51 contrary to prescribed rules and regulations," it said. 

COA reported the DepEd central office and all its regional offices accumulated hefty unliquidated cash advances.

"The existence of substantial accumulated unliquidated CAs is attributable to the lapses in the controls placed by Management in the granting, liquidation and monitoring of CAs, in disregard of the existing rules and regulations," COA said.

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The audit team said deficiencies included the grant of additional cash advances worth over P280 million despite the non-liquidation of previous ones.

COA also found long-standing unliquidated cash advances not liquidated within the prescribed period amounting to more than P1.3 billion as 'outstanding accountabilities' of administrative officers who have retired, resigned, died, or went absent without official leave.

Auditors noted P4.6 million in cash advances granted 'without legal/proper authority and/or specific purpose' in several regional offices. There was also a transfer of cash advances from one AO to another worth P107.9 million. 

Meanwhile, the COA also discovered cash advances of P56.5 million granted to AOs 'not bonded or with inadequate bond' while P191.4 million was used for payment of SRI and other payable through cash advances instead of direct payment.

Other deficiencies in CAs found by state auditors reached P140.4 million.

Concerned offices agreed to recommendations, including to stop granting additional cash advances if liquidations of previous ones are not yet done, enforce liquidation or settlement of unliquidated CAs to concerned AOs still in service, and salaries if they fail to liquidate outstanding balances and to impose appropriate penalties on erring AOs.

They will also ensure that CAs are granted for specific purposes and to designated AOS, refrain from transferring CA to establish proper accountability and to pay suppliers directly instead of using through advances.

ABS-CBN News has reached out to Duterte, through her spokesperson lawyer Michael Poa for comment on the COA findings. 

Poa said they have yet to receive a copy of the report.

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