COA sees ‘unauthorized expenses’ in 2016 DND disaster funds

commission on audit
Image by

But the department insists it used its Quick Response Fund correctly, saying that their role in disaster involves organizing, training, and equipping first responders from the AFP

MANILA, Philippines (May 11, 2017) — The defense department spent close to P75 million in “unauthorized expenses” from its Quick Response Fund (QRF), the Commission on Audit (COA) said in a report released Wednesday, May 10.

State auditors said P29.81 million was used for “supplies and equipment” and P44.47 million for the “repair and construction of buildings.” The way the money was spent, however, supposedly contradicted the fund’s purpose, according to COA.

“Disbursements …were not in accordance with the guidelines set on how the QRF shall be utilized. It is expressly provided that the QRF shall in no case be used for pre-disaster activities nor be realigned for any other purpose,” said the commission.

The fund, said state auditors, should be used as a “standby fund for relief and recovery programs” meant to make sure areas hit by disaster normalize as fast as possible. The amount had apparently been sourced from the Department of National Defense (DND)’s 2014 and 2015 QRF funds.

The COA said that the P29.81 million was used for the “procurement of equipment and goods which is a pre-disaster activity.” The P44.47, meanwhile, was used for the “repair and construction of buildings which do not fall on the definition of QRF.”

But the department, in a reply to the COA’s findings, said they did not violate any standing policies, pointing our that their role in disaster includes leading “command and control activities,” which involve organizing, training, and equipping first responders from the Armed Forces of the Philippines.

They pointed out that former president Benigno Aquino’s veto message in the 2014 budget said that the QRF may be used in prepositioning goods, emergency response units, and support items and equipment.

“These include the necessity for the AFP to rehabilitate or repair buildings and facilities as allied support to responses of the AFP in humanitarian aid and disaster relief missions,” said the department.

State auditors also questioned the inclusion of PAF Huey helicopter repairs worth P33.074 million since this was not supported by documents. The department also allegedly failed to justify why the QRF was used for repairs.

Republic Act 10121 mandated agencies to divide their disaster funds into two – 70% for pre-disaster programs and 30% for QRF.

The COA said the department should include relief and rehabilitation programs in its yearly programmed budget. It also told defense officials to create a report justifying the use of the QRF in the purchase of goods and supplies, as well as the rehabilitation of military structures.

The breakdown of expenses is as follows:

  • Astartez Defense and Rescue Solutions – P11.218 million for individual defense equipment for Philippine Air Force
  • Boston Home Inc. – P6.19 million for two water purification units with trailer
  • Dane Degala Pharmacy – P4.999 million air ambulance equipment
  • JV of Philippine Life Saving Equipment Inc. – P1.04 million specialized equipment for rescue boats
  • Dane Degala Pharmacy – P981,200 drugs and medicines for PAF
  • PJ Cruz Construction and Trading – P980,100 supply and delivery of 90,000 bottles purified water
  • Stone of David Tactical Equipment Company – P3.824 million ready-to-eat meals
  • Armada Rescue and Safety Equipment Corp. – P116,880 for 10 percent retention fee
  • Oliveros Protective Equipment and Maritime Supplies – P134,000 for 10 percent retention fee
  • PJ Cruz Construction and Trading – P331,600 for 10 percent retention fee
  • Aeromaxis Maintenance Products Inc. – P33.074 million repairs and spare parts for Huey helicopter with Tail Number 662
  • FJ Tiu Associates Construction and Development – P1.683 million for construction of MIG8 field office
  • Forman Construction Services – P260,088 repair of NOLCOM Health Center
  • Forman Construction Services – P643,880 repair of other structures in NOLCOM
  • Forman Construction Services – P1.7 million power supply system of NOLCOM
  • Forman Construction Services – P269,850 repair of NOLCOM market
  • Forman Construction Services – P254,966 repair of NOLCOM school building
  • Forman Construction Services – P1.051 million repair of building at NOLCOM
  • Forman Construction Services – P5.539 million repair of building at NOLCOM