COA warns NHA against using funds ‘borrowed’ from other agencies

MANILA, Philippines – The National Housing Authority (NHA) “borrowed” 4.901 billion pesos from trust funds of other government agencies and spent it on other housing projects not covered by the intended purpose of the money, according to state auditors.

In its 2020 audit report on the NHA, the Audit Commission (COA) called on the agency to stop using trust funds from other government agencies for unauthorized purposes, warning that its officials and employees could be subject to disciplinary action and criminal charges.

The COA said that 4.901 billion pesos from the 11.568 billion pesos in trust funds from the Ministry of Public Works and Highways (DPWH), the Ministry of Transport (DOTr) and the President’s office “were used to cover the needs. cash flow from other projects / programs (NHA) in 2019 and 2020. ”

This was contrary to the provisions of the 2020 Finance Law, Presidential Decree No. 1445 or the Government Control Code and a 1994 COA circular on the granting, use and liquidation of fund transfers to executing agencies.

Resettlement sites

This “exposes the officers concerned to disciplinary action” under Executive Decree No. 292 or the 1987 Administrative Code, and to criminal liability under existing criminal laws, the COA said.

The trust funds were intended for the resettlement of informal settlers affected by the North-South Suburban Railways Project under DOTr, the Marawi Town Rehabilitation Project under the President’s Office, the Project Harbor Link, C-5 North Link and South Link and the North Luzon Expressway-South Luzon Expressway connector project under the DPWH.

The three Memoranda of Understanding (MOA) for these projects stipulated that the funds were to be used “only for the purposes prescribed” in the MOA.

The COA found that 4.901 billion pesos had been spent on other projects related to the R-10 expansion project, the rehabilitation and housing of victims of typhoons “Yolanda” and “Sendong”, transitional housing and rehabilitation of the town of Marawi, housing for informal settlers affected by the rehabilitation of Manila Bay, the North Triangle project and people living in dangerous areas, as well as housing projects for police and military personnel .

State auditors added that “projects that have recently started have the highest percentage of borrowing out of the total project fund,” ranging from 12 percent to 71 percent of the project fund.

The largest amount borrowed was from DOTr’s North-South Suburban Railroad Extension Project, with 448.319 million pesos or 71 percent of its funds of 631.820 million pesos taken and used for other projects.

NHA explains

The NHA explained that the borrowing or “cross-access of restricted cash” was carried out to “temporarily increase the cash shortages of other projects / programs” pending the release of funds by the Department of Budget and Development. management (DBM).

As of June 30, 2021, the NHA said it had returned 1.699 billion pesos to agency trust funds, leaving a balance of 3.201 billion pesos. The agency was also expecting P2.121 billion from the Treasury Office for the various NHA programs.

But for the COA, the current state of trust funds “indicates that the relevant provisions on its administration are not applied by the NHA”.

“A continuing violation subjects officials and employees at fault to disciplinary measures … and to appropriate criminal measures under existing criminal laws,” the audit body warned.

The commission said the findings were a reiteration of audit observations made in previous years.

He told the NHA to stop the practice and instead ask DBM to release funds for NHA housing projects so that the “borrowed” funds can be returned to agency trust funds.

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