Press Release
September 4, 2013

Statement of the Senate Minority Group on the issue
of Transfer of Funds to NGOs

    Reports and news accounts on the Special Audit Report of the Commission on Audit on the implementation of legislators' Priority Development Assistance Fund (PDAF) and Various Infrastructure including Local Projects, covering the period 2007 to 2009, have apparently highlighted the issue of the transfer of funds to non-government organizations or NGOs.

     The COA Report states that: "Significant amounts of funds were released by the DBM to IAs without the IAs' respective endorsements and considering their mandated functions, and administrative and technical capabilities to implement projects. Thus, the funds were either merely transferred to NGOs with implementation of projects hardly monitored or funds remained unused as of audit date. NGOs are not included among the IAs of PDAF as identified in the GAA, hence, such transfers are without legal basis." (emphasis supplied)

      The Senate Minority Group, however, wishes to point out that the COA Report is wrong.

     General Appropriations Acts (GAAs) of previous years and even the GAA of the current year contain provisions allowing for the transfer of funds to civil society organizations, non-government organizations, and people's organizations, subject to certain conditions.

     The practice of allowing NGOs to participate in the implementation of government projects was first introduced in 2007, when a special provision in the budget of the Department of Education was inserted to "encourage the participation of non-government organizations (NGOs) in the construction of school buildings ..."

     Subsequently, the 2009 GAA provided for a specific provision on the "Limitations on Fund Transfers to Non-government Organizations and People's Organizations" under Section 75, which states that:

     "It is hereby declared a policy of the government not to allow non-government organizations and people's organizations to participate in the implementation of any program or project of the national and local government units until such time that any earlier fund releases availed of by the said non-government organizations and people's organizations shall have been fully liquidated pursuant to pertaining accounting and auditing rules and regulations, as certified by the head of the agency concerned and the Commission on Audit auditor.

     The government agency and local government units shall ensure that the non-government organizations and people's organizations that they deal with are legitimate. A report on the fund releases indicating the names of non-government organizations and people's organizations shall be prepared by the agency and duly audited by the Commission on Audit and shall be submitted to the Senate Committee on Finance and the House Committee on Appropriations." (emphasis supplied)

     The above-mentioned provisions clearly support our stand that: first, the transfer of funds to NGOs does have legal basis; and second, that it is not the responsibility of the legislators to ascertain the legitimacy of the NGOs which the IAs work with in the implementation of our projects. That burden falls on the IAs and the local government units concerned as provided by law.

      The 2013 GAA even amended this rule as it now requires the liquidation of at least 70% of the latest fund transfer availed of by the NGOs, before additional fund transfers are made.

      Precisely, the provisions of the budget law have already established the parameters within which our PDAF must be implemented by the concerned government agencies. Unfortunately, however, these guidelines and standards were evidently not followed.

     It is even more unfortunate that members of the Senate Minority Group have been pilloried and scorned by the media and by the public for this lapse in the implementation of the law.

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