Revotelution

COA can minimize unmitigated corruption in the government’s more than TRILLION-PESO budgeted annual expenditures through issuing a CIRCULAR re-imposing selective PRE-AUDIT of multi-million-peso transactions susceptible to corruption. This means that audited government agencies and entities cannot pay selected expenditures subject to COA pre-audit unless approved or passed in audit by COA auditors. The enabling COA circular, to be issued pursuant to COA's powers under the Constitution, will have the FORCE OF LAW, as in the case of earlier COA circulars already upheld in Supreme Court decisions. 

Thereafter, COA Commissioners and auditors, who can say NO even to the nation’s President, can prevent impending irregular disbursements detected in pre-audit through disapproving or refusing to pass in audit the covering disbursement vouchers BEFORE payments are effected--or when it is not yet too late to stop the consummation of the anomalous transactions. In this case, it is illegal for the Cashier to prepare checks for the COA-rejected disbursement vouchers. It is also illegal for any government official to order the preparation of such checks and for check signatories to sign the same. Those responsible for illegal disbursements will be held jointly and severally liable for the losses sustained by the government. If payments are made just the same in defiance of COA’s disapproval, guilt of culprits once prosecuted can be readily established by the Office of the Ombudsman before the Sandiganbayan.

EXECUTIVE SUMMARY: HOW TO FIGHT CORRUPTION IN PHILIPPINE SETTING

MAGNITUDE AND EVIL IMPACT OF THE PESTERING CORRUPTION PROBLEM

As reported by World Bank sometime back, the Philippine government has lost some $48 billion to corruption in a span of 20 years as early as some years ago, bigger than its borrowings of $40.6 billion over the same period. (Elena Torrijos, “$48B lost to graft in 20 years—WB,” Philippine Daily Inquirer, December 2, 1999, p. 4).

Despite the efforts of our anti-corruption government offices to curb corruption, it has worsened in succeeding years and goes on unabated to this day. “Ombudsman Merceditas Gutierrez said that at least P1.3-trillion (about $25 billion) in public revenue were lost due to fraudulent practices of some government officials and agencies from 2001 to 2005. Speaking at the start of a seminar-workshop on Integrity Development and Public Accountability at the Quezon City Hall, Gutierrez said the money lost could have been used in improving health, education and social welfare services and to reduce the national debt. ‘Bigger amounts have been lost to corruption. We could have wiped out totally our foreign debt if we used the amount for that purpose, and would still have a surplus,’ Gutierrez said.” (Julie Javellana-Santos, “Philippine Govt Lost $25 Billion the Last 5 Years to Corruption: Ombudsman,” Arab News Online, May 24, 2006)

WHY THE GOVERNMENT CANNOT LICK CORRUPTION: BECAUSE HALF OF THE ANTI-CORRUPTION WAR IS NOT WAGED AT ALL;  WORSE, WHEN GRAFTERS ATTACK, ANTI-CORRUPTION DEFENDERS ARE NOWHERE TO BE FOUND 

The Forgotten Half of the Anti-Corruption War

In general, the government cannot lick corruption because of its FAILURE TO WAGE AN ALL-OUT WAR against it, as betrayed by, among other things, the following MAJOR DEFECTS of the seemingly fragmented and incoherent national anti-corruption program:

•  The power and independence intentionally granted by the Constitution to COA in the grand design to curb corruption is simply wasted by highest COA officials. 

COA’s constitutional authority is not utilized where it will be most useful—prevention of management fraud in government, or the hard to stop staggering cases of corruption, because committed by high government officials themselves who are supposed to stop corruption in their jurisdiction pursuant to PD 1445, such as in the case of the P728-million fertilizer scam apparently orchestrated by then Agriculture Undersecretary Joc-joc Bolante, with the probable knowledge and instigation of higher government officials.

Internal check in government disbursements as performed by Chief Accountants and Internal Auditors ceases to function once their influential government-agency big bosses themselves are the perpetrators of corruption. Therefore, the constitutionally powerful and independent Commission on Audit--which is not under any of the three branches of government--should step into the picture, but it does not, thereby affording high government officials a field day in their corruption.

•  The expertise of internal-control-specialist CPA’s is not tapped:  laymen on internal control manage the national anti-corruption program, as in the case of the lawyer Merceditas Gutierrez who served as the nation’s anti-corruption czar while chairman of the Presidential Anti-Graft Commission (PAGC).

As stated, having laymen on internal control manage the national anti-corruption program is like having an engineer argue a case on a question of law before the Supreme Court.

•  One of two types of corruption is overlooked in the anti-corruption campaign:  focus is on graft in revenue collections, no conscious and meaningful effort against fraud in fund disbursements. 

In the absence of COA pre-audit, the national anti-corruption program does not address squarely the problem of staggering corruption in the disbursement of the government’s more than TRILLION-PESO annual budget, which comes from both taxes and loans.

•  One of two modes of fighting corruption is not employed in the anti-corruption drive: thrust is on punitive system, no real effort on preventive aspect. 

The punitive system--or the long winded investigation, prosecution, and conviction of grafters--has no direct connection to prevention of corruption because punitive action  can only be done AFTER corruption is committed, and it generally does not result to recovery of absconded public funds. The punitive system is just as effective--or as useless—as our array of penal laws that can either prevent or not prevent crimes, it all depends on the choice of the prospective criminals. What is needed is a direct corruption prevention system, like partial COA pre-audit, which can prevent the consummation of irregular transactions—whether grafters like it or not--precisely because the transactions are irregular and do not conform to government accounting and auditing regulations, and as such can be detected and thereby prevented by COA if it will audit multi-million-peso government transactions prior to payment.  

•  One of two anti-corruption weapons is intentionally held back: COA does 100% post audit, it totally cast aside pre-audit. 

There is simply no way 100% COA post audit can prevent corruption, no matter how blatant and substantial it is--like the P728-million fertilizer scam--because it is undertaken AFTER successful perpetration of corruption. What needs to be done is for COA to simply advance on a selective basis the timing of its audit of substantial government disbursements--from the present post audit or AFTER payment, which is already too late to prevent the crime, to the recommended pre-audit or BEFORE disbursement, when COA can still detect and stop the consummation of anomalous transactions.

The Missing Anti-Corruption Defenders During the Perpetration of Corruption 

On a specific case basis, the government cannot prevent corruption because when each act of major corruption is committed, the thousands of anti-corruption defenders in the touted anti-corruption government commissions and offices—a heavy burden to taxpayers—are nowhere to be found. For example, when the P728-million fertilizer scam was being committed, where were our following responsible government officials?

1.  Where was the government agency Chief Accountant, who was supposed NOT to pass for payment any disbursement vouchers covering transactions that do not comply to government accounting and auditing rules? Did he sign and pass for payment the disbursement vouchers even if the transactions were irregular, did he object but was overruled by higher agency officials, was he bypassed in the processing of vouchers, or checks were prepared even without vouchers at all.

2.  Where was the government agency Internal Auditor, if any? Unfortunately, even if there was one, his normal internal audit function would consist of review of operations and transactions on a post facto basis, so he could not have prevented the fertilizer scam either.

3.  Where was the Agency Head—the Secretary of Agriculture—who, according to COA's lame excuse for its abolition of pre-audit years ago, was responsible for the prevention of anomalies in his agency pursuant to PD 1445? Why did the Office of the President, COA, PAGC, the Office of the Ombudsman, and the Senate Blue Ribbon Committee that investigated the fertilizer scam, never asked him to account for the fertilizer anomaly under his jurisdiction?

4.  Where were the PAGC officials? Of course, they could not have prevented the scam because they are not the front line corruption-prevention officials in the scheme of things. There is no direct connection between what they are doing in their offices in Metro Manila and the prevention of fraud in government collections and disbursements in all government offices and corporations nationwide.

5.  Where were the Office of the Ombudsman officials? Just like PAGC officials, they could not have prevented the anomaly because they come into the picture only AFTER corruption is committed; their office is not geared towards direct corruption prevention in government cash transactions. 

6.  Where were the Chairman, Commissioners, other officials, and auditors of the 12,000-strong constitutionally powerful and independent COA organization, which has resident auditors in government agencies and corporations nationwide? How could they fail to prevent the easily detectable and therefore preventable modes of corruption—like diversion of funds, gross overpricing, ghost deliveries, and blatant adulteration—in the fertilizer scam? It is obvious that their self-imposed 100% post audit of government transactions has rendered themselves INEFFECTIVE as far as prevention of major corruption in government disbursements is concerned.

In effect, we have the paradox and tragedy of having more than ONE MILLION officers and employees in the entire government bureaucracy, yet we do NOT have even ONE single solitary officer or employee whose job or duty is to directly prevent corruption in the government's more than ONE-TRILLION-PESO annual disbursements. The job can be essentially done, as was done for years in the past, through simply advancing on a selective basis the timing of COA audit—from the present post audit, or AFTER payment of transactions, to the recommended pre-audit, or BEFORE payment. This ridiculous situation explains the inability of anti-corruption government officials to prevent the predominant type of media-reported corruption—fraud in government disbursements, especially in multi-billion-peso annual procurement and infrastructure contracts.

(To be continued . . .)