The Commission on Audit has flagged the National Electrification Administration for the release of P10.45 billion in subsidies to 102 electric cooperatives between 2012 to 2014 despite the non-liquidation of its released subsidies in the past.
In a 2018 special audit report, state auditors said the P10.45 billion worth of government subsidies were processed and released several times to various electric cooperatives without considering unliquidated balance of their previous subsidies.
“The intervals between releases of funds were too close and sometimes simultaneous and apparently, without taking into consideration the liquidation of previous/prior releases as required by relevant regulations,” the report read.
“In addition, the actual cost incurred for particular project cannot be ascertained, thus, any excess in subsidies cannot be established at this time for refund to NEA, as required under the MOA [between NEA and electric cooperatives].”
COA said the electric cooperatives violated two NEA rules that led to the accumulation of non-liquidated subsidies and difficulty in establishing the correct receivable account from the electric cooperatives.
NEA, for its part, told COA that the amount of unliquidated subsidy releases to 102 electric cooperatives went down to P403 million as of March 22 due to NEA Memorandum No. 2017-009 issued on April 6, 2017 addressed to all electric cooperatives providing that the liquidation of subsidy funds released for completed projects would form part of the parameters for electric cooperatives’ overall assessment and awards.
In response to COA, NEA also directed the electric cooperatives to submit liquidations of their own government subsidies before they could get rewards, incentives, benefits, allowances and salary upgrade.
According to NEA, P207 million in excess funds had already been returned as of Dec. 31, 2018.
It also asked the cooperatives to submit supporting documents for liquidation or execute an affidavit of undertaking.
“These actions are initiated in ensuring the liquidation of subsidies released to electric cooperatives within the prescribed period. However, the audit team ‘s observation that NEA continuously processed and released subsidies even without liquidating first prior or previous funds given to the electric cooperatives was not acted upon,” the report said.
