COA: DND, 183 LGUs didn’t follow rules for disaster funds in 2015

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The Commission on Audit releases its first-ever report on how funds for disaster risk reduction and management were used by national and local officials

MANILA, Philippines (Jan. 22, 2017) — The Commission on Audit (COA) found that the Department of National Defense (DND) and local government units failed to follow rules for using disaster funds in 2015.

In a 52-page Consolidated Report on the Audit of Disaster Risk Reduction and Management (DRRM) Fund released on Thursday, January 19, COA listed 183 LGUs which failed to comply with Section 21 of Republic Act (RA) 10121 or the Philippine Disaster Risk Reduction and Management Act.

Under this provision, LGUs are required to transfer unspent balance of the Local Disaster Risk Reduction and Management Fund (LDRRMF) into a special trust fund to serve as standby funding for emergency purposes.

The amount that was not transferred to a special trust fund totaled P3.05 billion ($61 million):

  • National Capital Region – P1.993 billion
  • Region 4A (Calabarzon) – P220 million
  • Region 3 (Central Luzon) – P208 million
  • Region 5 (Bicol) – P129.792 million
  • Region 10 (Northern Mindanao) – P115.274 million
  • Region 2 (Cagayan Valley) – P65.7 million
  • Region 1 (Ilocos) – P65.53 million
  • Region 6 (Western Visayas) – P59.99 million
  • Region 9 (Zamboanga Peninsula) – P46 million
  • Negros Island Region – P44.55 million
  • Region 8 (Eastern Visayas) – P44.5 million
  • Region 12 (Soccsksargen) – P14.6 million
  • Region 7 (Central Visayas) – P13.79 million
  • Region 13 (Caraga) – P10.464 million
  • Cordillera Administrative Region – P9.24 million
  • Region 11 (Davao) – P5.424 million
  • Region 4B (Mimaropa) – P2.49 million

Disaster funds amounting to P244.997 million ($5 million) were improperly spent on activities not related to risk management while 12 LGUs had undocumented purchases worth P19.36 million ($387,240).

COA also added that 57 LGUs failed to create a Local Disaster Risk Reduction and Management Office (LDRRMO) while 112 LGUs did not prepare their annual LDRRMF Investment Plans which would have guided proper usage of funding for disaster preparedness activities, procurement of emergency supplies and equipment, and post-disaster rehabilitation programs, among others.

The report also indicated that about 278 LGUs violated COA Circular No. 2012-002 which required them to submit a report on the sources and utilization of their disaster funds.

The report, the first of its kind to be released by COA, aims to provide “an overall picture of the management of the DRRM funds” by the national government, related agencies, and the National Disaster Risk Reduction and Management Council (NDRRMC).

Improper QRF usage

The DND was also scrutinized in the COA report.

State auditors discovered that out of the P572.9 million ($11.5 million) allocated for disaster response in 2015, the DND only used P236.31 million ($4.7 million). Out of this amount, only P128.63 million ($2.6 million) were paid out while the remaining funds were obligated for purchase orders, contracts, or deliveries pending approval.

COA also stressed that the DND should not have transferred P120.27 million ($2.4 million) to various implementing agencies (IAs) after they failed to liquidate previously transferred funds since 2008.

The following agencies with unsettled accountabilities identified in the report include:

  • Office of Civil Defense (2008 to 2014) – P203.89 million
  • Philippine Army (2012 to 2013) – P110.379 million
  • Philippine Navy (2012 to 2014) – P66.25 million
  • Armed Forces of the Philippines (AFP) General Headquarters (2013 to 2014) – P54.246 million
  • Philippine Air Force (2012 to 2013) – P20.116 million
  • Philippine Military Academy (2014) – P1.236 million

It recommended that the DND “refrain from granting additional fund transfers to IAs with outstanding balances and to closely monitor the liquidation of fund transfers” so that the funds are used properly and promptly.

The report also highlighted the improper usage of the Quick Response Fund (QRF).

“The utilization of funds amounting to P73,929,934.91 for repairs/reconstruction, using the QRF, was not in accordance with the intended purpose of [the] QRF as authorized in the DND’s budget,” COA said.

The QRF is supposed to be “earmarked for immediate needs for relief and rescue” during calamities, not repairs.

Out of the P73.93 million ($1.5 million) from the DND’s QRF, P41.82 million ($836,486) were transferred to AFP-Finance for the repair of the AFP Commissary and Exchange Service, EP Condos, Camp Lapu-Lapu Army Station Hospital, Headquarters Service Command building, DND building, Special Operations Team Barracks, and the Central Command Motor Pool.

Meanwhile, P32.1 million ($642,066) were transferred to the Office of Civil Defense for the construction of OCD Regions 2 and 9 offices and purchase of OCD Region 2 equipment.

“RA 10121 cites QRF as stand-by fund for relief and recovery programs in order that situation and living conditions of people in communities or areas stricken by disasters, calamities, epidemics, or complex emergencies may be normalized as quickly as possible,” state auditors told the DND.

COA also said repairs and construction activities should have been handled by the Department of Public Works and Highways (DPWH).