The Dangerous Drugs Board on Monday responded to published articles of the Philippine Star and Manila Standard concerning the 50-million-peso fund transfers to various institutions which remain unliquidated up to fiscal year 2018.
The agency clarified that the said funding support, amounting to 77 Million annually under the GAA, only covers government agencies particularly treatment and rehabilitation facilities of the Department of Health and those of the Local Government Units since the Comprehensive Dangerous Drugs Act of 2002 or Republic Act 9165 only allows funding support for the establishment, maintenance and operations of treatment and rehabilitation facilities that are being operated by government institutions. Furthermore, no funds were downloaded to GOCCs for similar purposes.
Early 2018, DDB did an inventory of the recipients of the financial assistance to impose the need for the funds to be utilized and liquidated since the backtracking revealed that some received the funds five years ago and beyond.
In the same year, DDB re-established and strengthened its Monitoring and Inspection Committee with the COA Audit Team assigned to its agency as Observers. The said committee forwarded demand letters and imposed upon the recipients the need to fully utilize and liquidate the funding support or revert the unutilized funds to the Dangerous Drugs Board. The Committee also visited the different facilities to check the status of the projects being implemented including the ones which were recently provided with the financial support.
Given the initiated measures, DDB was able to collect more than 21 Million Pesos from the underspending and unutilized funds from the previous recipients. The said amounts were remitted to the Bureau of Treasury.
As a matter of process, all beneficiaries enter into a Memorandum of Agreement with the Dangerous Drugs Board to secure the financial assistance. The strict compliance to the provisions of the MOA is a serious commitment of DDB to ensure its effective implementation and transparency on the funding support.
The funds provided by DDB are directly downloaded to identified beneficiaries which are being vetted by a standing committee of the board composed of the DDB Secretariat, DND, PDEA, DOH, DSWD, DILG, CHED and NYC. The project execution is the responsibility of the beneficiaries who have the authority to use the funds within the bounds of the provisions of the MOA.
Upon completion of the project, the COA assigned to the receiving entity audit the funding utilization and implementation of the project. In turn, the beneficiaries submit the verified audit reports to DDB which are needed to fully account the funds released to them.
In 2018, DDB has reiterated the need to liquidate the funding support within 1 year. This new policy changed the provisions of the old MOAs that were used to seal the agreements with the identified beneficiaries of the funding support. The new provision is aligned with DBM’s policy on the cash-based budgeting which mandates the utilization of the funding in 12 months or 1 year upon its release.
Meanwhile, in the case of the Bukidnon Treatment and Rehabilitation Facility which received 6.5 Million from DDB in 2018, the support was allotted for the facility’s initial operations since it did not have a budget under the 2018 General Appropriations Act.
The delay in the utilization and liquidation of the funding was caused by the absence of fiscal autonomy of the said facility since it was established just last year. The administrative and financial oversight of the center was placed under the Cagayan de Oro Treatment and Rehabilitation Facility which had to administer the provision of needs using the DDB support. Thus, the amount was not fully utilized in the expected timeframe due to the cited circumstances. To address the matter, the DDB has directed its Monitoring and Inspection Committee to guarantee the facility’s compliance to the provisions of the MOA on the funding support. DOH was also informed regarding the observation of COA and DDB for possible interventions.
Under the recently issued Internal Guidelines prescribing the rules on the funding assistance to treatment and rehabilitation facilities, DDB Chairman (Secretary) Catalino S. Cuy directs the blacklisting of entities that do not fully utilize and liquidate the funding support given by DDB. Stricter policies are being imposed such as the quarterly submission of verified audit reports to keep track of the budget utilization process on the part of the recipients. These documents are regularly being submitted to the DDB and its Resident Auditors for validation.
DDB’s Monitoring and Inspection Committee also conducted a dialogue with the COA Audit Team on the need for other dormant liquidation of financial assistance beneficiaries to be written-off considering that some of these remain unsettled since 1998 due to circumstances caused by fire, change of management, lost records, etc. The requested write-off accumulates to more than three hundred thousand pesos which, if approved, will be deducted from the accumulated amount of the financial assistance that remain unliquidated.
The DDB assures concerned authorities that it has properly responded to COA’s instruction on the matter and that the Audit Observation Memorandum is being addressed by the agency’s leadership to avoid similar findings in the future.