The pre-audit system should be restored. It reinforces the principle of accountability.
In the course of their deliberations the delegates to the Constitutional Convention of 1934-1935 reached a consensus that the aspects of the life of the soon-to-be independent Republic of the Philippines that most needed protection were (1) its elections; (2) its financial resources and (3) its civil service. When they became free to chart their own destiny, Filipinos needed to be protected from their government’s abuses and transgressions with regard to holding of elections, the administration of the national finances and the appointment of government personnel. To ensure that these concerns would not be subject to the shifting of political conditions, the Constitution makers of 1934-1935 incorporated them in the propose Basic Law as independent Constitutional commissions. Thus were born the Commission on Audit (originally the General Auditing Office), the Civil Service Commission and the Commission on Elections.
Until the outbreak of last year’s flood-control projects scandal, the Commission on Audit (COA) enjoyed the trust and respect of the Filipino people. The scandal produced numerous casualties – institutions and individuals – in the wake of the disclosures of a broad inter-institutional conspiracy to defraud the government of billions of taxpayer pesos. There is general agreement that one of the institutions that took a massive hit to its reputation was COA. Following the Congressional hearings’ findings of the role played by it in the scandal – failure to flag the contractual deficiencies and violations of the Department of Public Works and Highways (DPWH) contractors, failure to monitor the progress of public works projects and falsely certifying the existence, quality of execution or completion of projects – COA was downgraded from being a dependable protector of the nation’s financial capabilities to a co-conspirator in a mammoth scheme to defraud the government.
COA is bound to take steps to ensure the non-recurrence of its transgressions in the flood-control projects scandal, but the damage has already been done. It will take the Constitutionally mandated audit body a long time to regain the public trust and esteem that it once enjoyed.
COA’s performance with regard to the unlawful flood control projects – its overall performance, in truth – essentially is attributable to the fact that its work is done post facto. It enters the picture after the stipulated completion of the project or the termination of the contract. It is then that its personnel conduct a review and perform an autopsy – to borrow a medical term – on the project or contract. By then it’s too late; the injury to the national interest has been done. As the saying goes, there’s no point in closing the barn door when the horses have galloped away.
This state of affairs, where the COA, informs the nation of assault on the government’s financial capability in after-the-event fashion, is irrational and unacceptable. The government must not be left picking up the pieces hopelessly after the fraudster have run away with billions of taxpayer’s money.
On the side of COA, the most effective corrective measure is the restoration of the system of pre-audits that was in operation under GAO. Under that system the resident COA auditor in every department, agency or government corporation conducted an audit of a would-be government contractor, before the implementation of the contract, to spot red flags. A pre-audit would bring to light consequential information relating to (1) conflicts of interest, (2) beneficial-ownership structure, (3) basic financial capability, (4) nature of relationship with other contractors, e.g., whether the would-be contractor is merely using another contractor’s legal status, (5) operational track record and (6) excessiveness of project commitments. Had the COA pre-audit system been in effect then, surely there would have been red flags all over the place and the flood control abominations of 2024-2025 could have been avoided.
The pre-audit system was discontinued because of business-community complaints that the pre-audits were another layer of bureaucratic regulation and were causing projects to be delayed. This objection is easily met: limit the pre-audit to a fixed period, at the end of which a proposed project or contract will be deemed approved.
The pre-audit system should be restored. It reinforces the principle of accountability. The brief delay entailed by a pre-audit will surely be an infinitesimally small price to pay compared to the billions of taxpayer pesos lost by the government through the malperformance of, among others, COA.
(llagasjessa@yahoo.com)
