Were rice importers subsidized by NFA?

“Hastily approved.” “Audit takes years or at least months in this case.” These are remarks made by a COA auditor and Sen. Franklin Drilon regarding the liquidation of PCSO’s P325-million “intelligence funds” for the period 2008-2010. (“Former COA chair may be liable in PCSO fund mess—Drilon,” Inquirer, 7/11/11)

Going through audit reports is an arduous task. A 2006 audit report on the National Food Authority (NFA), dated March 22, 2007—which means enough time had lapsed to come up with a complete report, according to Senator Drilon and a COA auditor—is most notable for the absence of COA’s comments, recommendations and actions taken. Based on the latest available audit, the NFA’s deficiency had quadrupled to P102 billion as of 2009! (Adjustments in PCSO’s financial reports should not alarm Manuel Morato; NFA deficiencies in 2005 were revised from P28 billion to P32 billion; its 2006 deficiencies, from P42.7 billion to P43.7 billion.

On June 30, 2006, the COA released a detailed 75-page audit, the highlight of which was a 7-page report—“Value for Money Audit” on the flawed auction of NFA-imported, “newly arrived” rice, which resulted in government losses of up to P2.134 billion in 2005. The auction involved “7,181,702 bags valued at P8.847 billion” of imported premium rice grade in various regions. For 2006, a 12-page audit report was released in March 2007, without comments and recommendations. Thus, the COA opposition to the conduct of rice auctions in 2005, and several “deficiencies” got downplayed.

Quoted from the 2005 audit report: “By any stretch of imagination, it is not difficult to conclude that these affluent awardees/buyers/traders are not deserving of subsidy from the NFA (which) has a staggering amount of indebtedness.” The NFA is saddled with P177 billion in debts as of 2010.

It is lamentable that “red flags” on the NFA were already raised in 2005 (or much earlier) by the COA report, but that did not reach media’s radar screen. That it took a private audit team in 2010 to conduct a diligence report is a wake-up call to public servants.

Motivated, the COA undoubtedly will live up fully to its mandate, and with the public’s unwavering support, the agency can be in the mold of the General Auditing Offices of other nations.

—MANUEL BONDAD, [email protected]