The Commission on Audit has called the attention of the Philippine Charity Sweepstakes Office for non-remittance of earnings worth P8 billion.
In a 2018 audit report, the state auditors flagged the PCSO for failure to remit P8.426 billion worth of dividends to the national treasury from 1994 to 2016, a violation of Republic Act 7656.
COA also flagged the PCSO for a P4-billion shortfall over debts incurred by some small town lottery operations.
Under the law, government-owned -and -controlled corporations must declare and remit at least 50 percent of their annual net earnings as cash, stock or property dividends to the national government.
The law’s implementing rules and regulations also provides that all GOCCs “should annually declare and remit dividends directly to the National Government in the name of the Treasurer of the Philippines on or before May 15 of each year.”
“This is a reiteration of the audit observations as Management has not complied yet with recommendation to remit dividends due the national government,” the audit report read.
PCSO, for its part, said it had no annual net earnings, citing its savings just came from operations after deducting all the operating expenses which were reverted to and form part of the charity fund.
It invoked the Office of the Government Corporate Counsel’s Dec. 20, 2016 Opinion 198 stating that the PCSO was not covered by RA 7656 as its net earnings were already allocated by law, earmarked for certain expenses, and all unused balance in any of its funds are reverted to charity fund.
COA argued that under its Jan. 17, 2018 memorandum, the provisions of RA 7656 must be interpreted in such as way that they could be harmonized in accordance with the rules on statutory construction.
It maintained PCSO was not among the GOCCs exempted from the coverage of Section 4 of RA No. 7656’s implementing rules and regulations.
“We recommended that Management settle the P8.426-billion dividends in arrears due to the National Government in compliance with RA No. 7656, once their request for exemption will be denied by the Department of Finance,” it cited.
“To date, the PCSO is still in negotiation with the DOF, on whether or not it would be required to remit the dividends from 1994 to 2016 and is also in close coordination with the said Department regarding the proposed settlement of arrears in dividends,” PCSO said.