Republic of the Philippines

COMMISSION ON AUDIT
Commonwealth Ave., Quezon City

CONSOLIDATED REPORT

on the Audit of the

DISASTER RISK REDUCTION

MANAGEMENT (DRRM) FUND

For the Year Ended December 31, 2016

 Republic of the Philippines
Commission on Audit
Office of Civil Defense
Camp Gen. Emilio Aguinaldo, Quezon City

February 02, 2018

Secretary Delfin N. Lorenzana

Department of National Defense
Chairman
National Disaster Risk Reduction Management Council
Camp Aguinaldo, EDSA, Quezon City

Consolidated Report on the audit of the

Disaster Risk Reduction Management (DRRM) Fund
For the year ended December 31, 2016

1. Pursuant to Section VII, 9 of COA Memorandum 2014-009 dated August 28, 2014, we have
prepared this Report consolidating the issues and observations in the audit of DRRM Funds
of various government agencies (national, local and corporate sectors) for the year 2016. This
report is being made in the absence of a single/consolidated report on financial data on
disaster management, particularly on the receipt and utilization thereof. This will serve as
valuable reference in the programming of DRRM Funds by the Council Members and
various government agencies as this will enable them to see the overall picture of the
management of DRRM Funds.

2. This consolidated report highlights the financial and operational data on DRRM which were
included in the Annual Audit Reports of the following agencies:

a) Department of Agriculture
b) Department of Education
c) Department of Health
d) Department of the Interior and Local Government
 Bureau of Fire Protection
 Philippine National Police
e) Department of National Defense
 Office of Civil Defense
f) Department of Public Works and Highways
g) Department of Science and Technology
 Advanced Science and Technology Institute
h) Department of Social Welfare and Development
i) Department of Trade and Industry

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 j) Department of Transportation
 Philippine Coast Guard
k) Local Water Utilities Administration
l) National Electrification Administration
m) National Housing Authority
n) National Irrigation Administration

3. The audit observations and recommendations included herein are those reported and fully
discussed in the respective AARs of the following agencies:

a) Department of Agriculture
b) Department of Education
c) Department of Health
d) Department of National Defense
 Office of Civil Defense
e) Department of Public Works and Highways
f) Department of Science and Technology
 Advanced Science and Technology Institute
g) Department of Social Welfare and Development
h) Department of Transportation
i) National Electrification Administration

Financial and Operational Highlights

4. Financial Highlights

4.1. Sources of Funds for the National Government Agencies (NGAs)

 General Appropriations Act (GAA)

a. NDRRMF

The National Disaster Risk Reduction and Management Fund (NDRRMF) is

appropriated under the annual General Appropriations Act (GAA) which shall be used
for disaster risk and reduction or mitigation, prevention and preparedness activities
such as but not limited to training of personnel, procurement of equipment and capital
expenditures. It can also be utilized for relief, recovery, reconstruction and other works
or services in connection with natural or human-induced calamities which may occur
during the budget year or those that occurred in the past two years from the budget
year.

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 b. Quick Response Fund (QRF)

The QRF is allocated to the agencies identified in the GAA FY 2016 as stand-by-fund
to be used in accordance with the purposes authorized in the respective provisions of
the implementing agencies.

c. Yolanda Rehabilitation and Reconstruction Program Fund (YRRPF)

The amount of Eighteen Billion Eight Hundred Ninety Five Million Five Hundred
Thirty One Thousand Pesos (₱18,895,531,000.00) was appropriated under the GAA
for FY 2016 (R.A. 10717).

d. Allocation from agency’s regular budget

All departments, bureaus, offices and agencies of the government are authorized to use
a portion of their appropriations to implement projects designed to address DRRM
activities in accordance with the guidelines issued by the NDRRMC in coordination
with the Department of Budget and Management (DBM) pursuant to Section 22.e of
RA No. 10121.

 Cash Donations from Local and Foreign Sources

Cash donations are assistance or contribution from local or foreign donor entity/individual
to the National Government for DRRM projects/program.

4.2. Sources of funds for the LGUs

 General Fund Current Year Appropriation

Not less than five percent (5%) of the estimated revenue from regular sources shall be set
aside to support disaster risk management activities such as, but not limited to, pre-disaster
preparedness programs, including training, purchasing life-saving rescue equipment,
supplies and medicines, for post-disaster activites, and for the payment of premiums on
calamity insurance.

Thirty percent of the five percent of the fund appropriated for DRRM shall be allocated to
the QRF or stand-by fund for relief and recovery projects and activities.

 Funds transferred to the NDRRM Fund

These are funds received from the National Government for DRRM activities upon the
recommendation of NDRRMC and approval of the President.

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  Funds received from other LGUs and other sources

These are cash donations received from other LGUs, local and foreign sources.

5. Operational Highlights

National and Corporate Government Sectors

The available fund for NDRRMF and its utilization are summarized below with details shown
in Annex A:

Allotments QRF YRRPF Donations Total

Beginning
₱2,131,831,497.33 ₱5,640,094,194.45 - ₱ 549,538,730.81 ₱ 8,321,464,422.59
Balance
Receipts
for the 596,463,823.75 10,252,590,000.00 2,270,285,315.00 1,100,292,299.07 14,219,631,437.82
Year 2016
Funds
2,728,295,321.08 15,892,684,194.45 2,270,285,315.00 1,649,831,029.88 22,541,095,860.41
Available
Utilization
Amount 1,912,561,519.10 8,585,991,583.51 176,417,661.89 1,473,190,058.45 12,148,160,822.95
Percentage 70.10% 54.02% 7.77% 89.29% 53.89%
Ending
₱815,733,801.98 ₱7,306,692,610.94 ₱2,093,867,653.11 ₱176,640,971.43 ₱10,392,935,037.46
Balance

₱15.893M

₱8.586M

₱2.728M
₱1.913M ₱2.270M
₱1.650M ₱1.473M
₱0.176M

Allotments QRF YRRPF Donations

Total Receipts Total Utilization

Figure 1. Total Funds Available with their corresponding utilization (in Millions)

As shown in the figure above only 53.89 percent of the total available fund for NDRRMF has
been utilized. This represents 70.10 percent utilization of GAA allotments, 54.02 percent

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 utilization of QRF, 7.77 percent utilization of YRRP Fund and 89.29 percent utilization of
donated funds.

6. Major Accomplishments

The National Disaster Risk Reduction and Management Council (NDRRMC), through the
Vice-Chairpersons of the four (4) thematic areas and its executive arm, the Office of Civil
Defense (OCD), ensures that the requirements of RA 10121 and the National DRRM Plan
(NDRRMP) are accomplished. Continuous coordination and collaboration on activities that
aims to achieve a safe, resilient, and climate change-adaptive Filipino communities were done.

For FY 2016, the Council formulated plans and policies pertaining to disaster prevention
and mitigation, preparedness, response, and rehabilitation and recovery measures. Key policies
included the review of RA 10121 and its Implementing Rules and Regulations, Guidelines on
the Management of the Dead and Missing, among others.

The Council convened regularly to discuss key issues on DRRM, not only during actual
disasters but also during the pre-disaster phase. Pre-Disaster Risk Assessment (PDRA)
meetings were regularly conducted to ensure optimum response measures. Such efforts
resulted in significant decrease as to the extent of damages for both natural and human induced
incidents. Details shown in Annex B:

CY 2016 CY 2015 Decrease

Casualties 393 423 30
Affected Families 378,673 2,801,264 2,422,591
Damaged Houses 5,028 133,327 128,299
Damaged Properties:
Infrastructure ₱643,335.00 ₱8,456,629.00 ₱7,813,294.00
Agriculture 13,637,906.00 32,590,764.00 18,952,858.00
Commercial 45,045.00 993,132.00 948,087.00
TOTAL ₱14,326,286.00 ₱42,040,525.00 ₱27,714,239.00

The NDRRMC also ensured continuous coordination and collaboration with other
stakeholders, including the civil society and non-government organizations. This include
attendance and participation to local, regional and international conferences on DRRM,
conduct of drills and exercises, searching for excellent practices on DRRM and humanitarian
assistance, forging of partnerships and agreements, joint commemoration of events, among
others.

More importantly, the NDRRMC member agencies performed their respective tasks on
DRRM as identified in the NDRRMP. In this report, the contributions of the National
Economic and Development Authority (NEDA), the Department of Science and Technology
(DOST), the Philippine National Police (PNP), the Philippine Coast Guard (PCG), the Bureau
of Fire Protection (BFP), and the Metropolitan Manila Development Authority and other
agencies are identified.

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I. Accomplishments in the Creation of a Sound Policy Environment on DRRM

Section 4 of RA 10121 provides for the development of policies and plans and the
implementation of actions and measures pertaining to all aspects of disaster risk reduction and
management, including good governance, risk assessment and early warning, knowledge
building and awareness raising, reducing underlying risk factors, and preparedness for
effective response and early recovery.

For this purpose, the NDRRMC continuously formulated plans and policies that would
uphold the goals in the National DRRM Framework of having a safer, adaptive, and disaster
resilient Filipino communities toward sustainable development.

For FY 2016, the significant policies formulated by the Council are as follows:

 Rapid Emergency Telecommunications Team (RETT) Manual of Operations

 IMPLAN “Itim na Nazareno for 2016”
 Guidelines on the Management of the Dead and Missing

Other plans and policies were also formulated and approved, as follows:

1. Contingency Plan for Bombings;

2. Humanitarian Response Protocol;
3. Guidelines on the Formulation of Contingency Plan for Natural and Human Induced
Hazards and Adoption of the Contingency Planning Guidebook;
4. Constitution of the NDRRMC Technical Working Group (TWG) on the Development of
the Emergency Operation Centre (EOC) Training Course Design;
5. 19th Gawad Kalasag Revision of Guidelines and Criteria for the "Search of Excellence on
DRRM and Humanitarian Assistance";
6. Joint Task Group Emergency Preparedness and Response (JTGEPR) Strategic Action Plan
for ASEAN 2017;
7. OPLAN NINA Land and Air Response Operations for TY Nina; and
8. Guidelines on the Interoperability of Incident Management Teams (IMS) and the Response
Clusters

The Council also came up with the initial review and drafts of the following policies for
subsequent approval of the Council in 2016:

1. Review of the RA 10121 Implementing Rules and Regulations

2. NDRRMC Memorandum Circular (MC) on the Guidelines Governing the Utilization of
Local and Foreign Cash Donations and In-kind Donations received by the NDRRMC
through the OCD
3. Draft Policy on Disaster Risk Financing and Insurance
4. NDRRMC Memorandum Circular (MC) on the Enhanced Policy Guidelines on the
Philippine International Humanitarian Assistance (PIHA)

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II. Convening of the National DRRM Council

The Council regularly conducts meetings not only during and after actual disasters but also
prior to the occurrence. For FY 2016, the NDRRMC convened for the following agenda:

1. Full Council Meetings;

2. First, second and third Focus Group Discussion on the Philippine Position on the World
Humanitarian Summit;
3. Final Coordinating meeting with the World Humanitarian Summit;
4. Preparedness Meeting for La Niña;
5. NDRRMC Preparatory Meeting re Visit of the UN Deputy Secretary General to the
Philippines;
6. Pre-Disaster Risk Assessment (PDRA) for the Extended Core Group Meeting re: El Nino
and La Nina; and
7. PDRA Semana Santa 2016

During the Full Council Meetings, key matters discussed include the presentation of the
draft Amendatory Bill for RA 10121 and its Implementing Rules and Regulations.

III. Institutional Linkages

The NDRRMC worked hand in hand with other key stakeholders on DRRM, the most
notable of which were the:

1. Engagement with the private sector by conducting the first ever NDRRMC-Private Sector
Partnership Dialogue held in March 2016 at the Tower Club in Makati City;

2. National Simultaneous Earthquake Drills (NSED) which were conducted nationwide,

with the OCD Regional Offices taking the lead in their respective areas of responsibility;

3. Gawad KAlamidad at Sakuna LAbanan SAriling Galing ang Kaligtasan (KALASAG)

Program which is the Council’s annual recognition scheme in search for excellence in
DRRM and humanitarian assistance; and

4. Forging of Agreements with Partners

 Memorandum of Agreement between the NDRRMC and the National Commission on

Muslim Filipinos
 MOA with the Pugad Lawin
 International Search and Rescue Advisory Group (INSARAG) Urban Search and
Rescue (USAR)
 World Humanitarian Summit
 Asian Ministerial Conference for DRR (AMCDRR)
 Conduct of the Asian Day for Disaster Management (ADDM) and the International
Day for Disaster Reduction (IDDR)
 Observance of the National Disaster Consciousness Month (NDCM)
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IV. Accomplishments of NDRRMC Member Agencies

Thematic Area 1: Disaster Prevention and Mitigation

Outcome 1: DRRM and CCA mainstreamed and integrated in national, sectoral, regional
and local development process

a) DOST PHILVOLCS capacitated stakeholders on Rapid Earthquake Damage

Assessment System (REDAS) software as a tool for mainstreaming DRR in local
development process, contingency planning and preparedness by conducting 17
REDAS trainings in 2016.

b) National Economic and Development Authority (NEDA)

 Issued the guidelines for the formulation of the Philippine Development Plan
(PDP) and the Philippine Investment Plan that direct the integration policies and
strategies for DRRM; and
 Co-developed with the World Bank the Disaster Socio-economic Resilience
Assessment Methodology, which integrated DRRM in socio-economic planning
and investment programming as aid in identifying the most effective policy and
investment options for increasing resiliency and reducing assets and well-being
losses from natural disasters.

Outcome 2: DRRM and CCA-Sensitive Environmental Management

a) Bureau of Fire Protectionensured fire safety of buildings and establishments by

inspecting 1,443,568 establishments out of the total target of 1,393,332, or 103.61
percent accomplishment rate.

b) DOST-PCIEERD

 Integrated Scenario-Based Assessment Impact and Hazards (ISAIAH) by

improving WebSafe (a municipal level risk assessment and incident reporting and
visualization tool in the NOAH website), developed WebSAFE mobile app free
for download, refined delineation of urban areas using remote sensing, updated
building delineation of the 15 pilot provinces, and provided risk information for
14 extreme weather event in PDRA meetings convened by the NDRRMC;
 Developed Wireless Sensory Network System for structural Integrity Monitoring
of Bridges (SMART Bridge) by installing weather and theft-proof Micro-Electro-
Mechanical Systems(MEMS) based accelerometer device and wireless system
that shall enable remote-condition monitor of bridges;
 Inventoried existing hydrologic monitoring devices, systems, and monitoring
policies and guidelines of the NWRB;
 Conducted initial drone training and assembly to PHIVOLCS for the
development of Information Gathering and Utilization Systems using small

8
 Unmanned Airborne Vehicles (UAVs) for disaster risk assessment, monitoring
and response;
 Compiled precipitation data from both satellite measurements and completed
spectral analysis of Tropical Rainfall Measuring Mission (TRMM) data for the
regional scales of variability in precipitation (RSVP);
 Deployed Early Warning Systems in Disaster-prone areas by calibrating 701 out
of 811 installed rain gauges, calibrating 440 new units, installing 315 new units
to the regional offices, and installing 7 early warning stations in Regions III and
VII;
 Conducted marine weather forecasting using High Frequency Doppler Radar by
installing and commissioning HFDR system in Zambales;
 Designed and developed aerial mapping and imaging systems and standards;
 Produced storm surge inundation maps of all 67 coastal provinces in the
Philippines;
 Developed Project e-Bayanihan and ReliefOps.ph to provide a nationwide web-
mobile based system for participatory disaster management and data and
analytics-based recommendations for the prepositioning and allocation;
 Produced 201 high-resolution flood hazard maps (1:10,000) out of the 257 river
basins identified for mapping; and
 Conducted the PHL-MICROSAT Program, which deployed Diwata-1 to space
from the International Space Station for capturing images that are useful for
different applications like land use monitoring and aquatic resources monitoring
and assessment.

c) DOST - PHIVOLCS

 Produced and disseminated earthquake and multi-hazard maps for Cebu, Bohol,
Davao del Norte, and Davao City. Volcanic hazard maps were developed for the
provinces surrounding Bulusan and Kanlaon Volcanoes;
 Earthquake risk maps were developed for Cebu, which include economic loss,
casualties, and building damages; and
 Launched the Valley Fault Atlas, wherein 131 hard copies and 1,579 data copies
(CD) were distributed. It was also downloaded from the PHIVOLCS website for
106,233 times.

Outcome 6: End-to-end monitoring (monitoring and response), forecasting, and early

warning systems are established and/or improved

a) DOST-PAGASA

 Ensured an enhanced monitoring and warning system through the completion of

the Zamboanga Doppler Radar, inauguration of the Doppler Radar in Iloilo,
acquisition of two Mobil X-Band Radar being utilized in Baler, completion of the
Tagum FFWS for the Tagum Libuganon River Basin;
 Installed and commissioned High Frequency Doppler Radar (HFDR) system in
Zambales and Palawan; and
9
  Improved end-to-end monitoring and warning systems by emplacing integrated
multi-parameter and real-time monitoring technologies in eight monitored
volcanoes.

Thematic Area 2: Disaster Preparedness

Outcome 7: Increased awareness and enhanced capacity of the community to the threats
and impacts of all hazards

a) Philippine National Police developed and distributed more than 99,500 copies
of Safety Tips flyers and posted such in social media.
Outcome 8: Communities are equipped with necessary skills and capability to cope with
the impacts of disasters

a) Philippine National Police trained 19,592 personnel on disaster preparedness,

rescue, and relief operations.

b) Philippine Coast Guard participated in the Nationwide Simultaneous

Earthquake Drills (NSED), conducted WASAR trainings to PCG personnel and
attended the handover procedure workshop for the National Disaster Response
Plan.

Outcome 12: Well-established disaster response and relief operations

a) Philippine Coast Guard (PCG)

 Disseminated advisories pertaining to tropical cyclones to all PCG units;

 Cancelled trips/voyages of all vessel to the affected areas of typhoon;
 Coordinated with concerned agencies on the preparations, planning,
dissemination and related undertakings;
 Conducted information drive on disaster preparedness;
 Organized 150 deployable Response group, 16 aluminum boats, 2 rubber boats
and rescue equipment for possible deployment;
 Involved in forced evacuation and in repacking and distribution of at least 220
sacks of relief goods;
 Rescued 26 persons, evacuated 7,935 and assisted 2,835 persons during the
typhoon;
 Activated Task Force “Sagip Nina” by Coast Guard NCR-CL to provide
assistance to the affected population;
 Organized 22 deployable group for possible deployment for Typhoon Nina; and
 Dispatched 5 DRG on board m-35 trucks with rubber boats to Bicol Region, one
in Malabon.

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 b) MMDAconducted trainings and orientation on DRRM for a total of 63,599
persons against the target of 39,000 and gave first aid treatment to 244 patients in
the shortest time possible.

Outcome 14: Integrated and coordinated Search, Rescue and Retrieval (SRR) Capacity

a) Philippine National Police (PNP)

 Detailed PNP personnel to different NSUs and at the NDRRMC OPCEN to

monitor TS Nina;
 SAF provided five teams to augment AFP for SRR operations;
 Various PRO deployed personnel to different locations to assist the DSWD in the
loading of relief goods and to provide security to relief convoy from the
NDRRMC to the affected areas;
 All affected PROs were instructed to deploy personnel to render law and order
operations to provide support to other clusters and to provide security along major
thoroughfares, and to assist stranded travelers and relief convoys from Metro
Manila;
 SAF provided 34 personnel to augment AFP for SRR operations and activated
the SRR teams.

b) Bureau of Fire Protection (BFP)

 Activated OPLAN PAGHALASA and OPLAN LISTO during Typhoon Carina,

Julian and Lawin;
 BFP rescue and medical teams provided rescue and medical assistance to the
typhoon victims during and after evacuation; and
 Concerned BFP fire stations in the typhoon affected areas conducted clearing
operations.

Outcome 15: Evacuated safely and on time affected communities

a) Philippine National Police evacuated 10,684 families or a total of 30,642

individuals.

Outcome 16: Temporary shelter and/or structural needs are adequately addressed

a) Philippine National Police posted 135 personnel at the evacuation centers to

assist the DSWD and to provide other public safety services and during Typhoon
Lawin, PROs 1, 2, 3, and COR were directed to dispatch WCPC personnel to
ensure that the rights of women and children at the evacuation centers are
protected.

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Thematic Area 4: Disaster Rehabilitation and Recovery

Outcome 20: Damages, Losses and Needs assessed

a) NEDA

 Participated in various preparatory activities and in the conduct of Post Disaster

Needs Assessment for TYs Nona, Ferdie, and Lawin;
 Coordinated the preparation of regional RRPs for areas highly affected by TYs
Lando and Nina in Regions 3, CALABARZON, MIMAROPA and VIII; and
 Convened RDRRMC Committee on Rehabilitation and Recovery to discuss
initial damage assessment and early recovery initiatives, and conduct of
workshops for the crafting of the rehab and recovery programs, among others.

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7. Inventory of Equipment Acquired through Donations

National Government Sectors

QUANTITY
AGENCY LOCATION ITEM / DESCRIPTION AMOUNT
2015 2016
DepEd RO I Aircon 14 not indicated
RO VIII Projector 2 57,600.00
Laptop Computer 1 34,988.00
Aircon 19 361,950.00
Sub total 36 ₱454,538.00
DOH RO III Desktop Computer 2 103,772.00
Family Tent 8 90,160.00
Folding Bed 10 12,000.00
Cotton Bed 3 4,500.00
RO X Incubator 8 1,073,083.84
UV Lamp 1 12,700.00
Vaccine Refrigerator 3 233,696.00
Centrifuge 13 1,123,947.39
Gynecological Simulator 1 16,103.05
Laptop Computer 9 345,960.00
Vehicles 3 1,400,000.00
Desktop Computer 127 6,343,114.36
Autoclave 5 1,118,439.17
Bacticinerator 2 100,000.00
Analytical Balance 2 86,608.00
Binocular 13 646,631.20
Microscope 15 655,153.40
Distilling Apparatus 2 5,267,800.00
Colony Counter 2 113,250.00
Hotplate 1 29,092.79
Drying Oven 1 43,944.00
PH Meter 1 50,000.00
Pipet Washer 1 17,500.00
Stripettor 2 73,203.00
Vortex Shaker 1 50,000.00
Bio safety Cabinets 3 450,781.42
Sprayer 2 358,400.00
MGIT Bactec 2 1,922,740.70
UPS 1 84,399.11
Vortex Mixer 1 20,211.72
PCR Workstation 1 16,983.61
Thermocycler 1 119,706.23
Cold Room with Generator 1 685,000.00
Water Bath 6 263,926.06
Aircon 3 167,493.20
Sub total 257 ₱23,100,300.25
DSWD Central Office Scanner 1 20,900.00
Projector 1 31,000.00
Desktop Computer 15 741,892.80

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 QUANTITY
AGENCY LOCATION ITEM / DESCRIPTION AMOUNT
2015 2016
DSWD Central Office Laptop Computer 30 9 1,425,543.96
Printer 5 45,796.50
FO I Laptop Computer 5 94,771.20
FO II Laptop Computer 4 75,816.96
FO III Laptop Computer 6 113,725.44
FO IVA Laptop Computer 9 170,588.16
FO IVB Laptop Computer 3 56,862.72
FO V Laptop Computer 5 94,771.20
FO VI Laptop Computer 5 94,771.20
FO VII Laptop Computer 6 113,725.44
FO VIII Printer 27 247,301.10
External Hard drive 15 62,976.60
Projector 2 64,421.70
Camera 1 4,290.48
Tripod 1 5,000.00
Laptop Computer 5 94,771.20
FO IX Laptop Computer 6 113,725.44
FO X Laptop Computer 5 94,771.20
FO XI Laptop Computer 6 113,725.44
FO XII Laptop Computer 5 94,771.20
FO CAR Laptop Computer 2 37,908.48
FO CARAGA Laptop Computer 4 75,816.96
FO NCR Laptop Computer 24 454,901.76
NROC NROC Warehouse 6 39,023,763.30
NROC Office Building and
Dormitory, semi-concrete, two- 1 3,863,378.08
storey, 530 sq.m
Sub total 198 16 ₱47,431,688.52
INFLATABLE RUBBER
OCD CO BOAT WITH 40HP outboard 4 3,840,000.00
motor (w/ accessories)
RO VIII Vehicle 1 1,366,517.85
VARIOUS PROPERTY AND
RO III EQUIPMENT FOR various 25,857,610.95
DISTRIBUTION
Sub total 5 ₱31,064,128.80
GRAND TOTAL 239 16 ₱78,950,355.32

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8. Inventory of Equipment Purchased out of DRRMF / Donated Fund

National Government Sectors

QUANTITY AMOUNT
Out of
AGENCY Location ITEM / DESCRIPTION Out of
2015 2016 Donated
DRRMF
Funds
DND SAO AFP Generator set with accessories 1 819,992.00
Specialized Equipment - Rescue
PAF 1 1,150,700.00
Boat
Air Ambulance Equipment Various 5,980,500.00
Individual Equipment Various 6,880,000.00
PN Water Purification with Trailer Various 11,520,243.88
Sub total 1 1 ₱25,531,443.88 ₱819,992.00
Central Office Sofa Seat, leather with 2
DA 1 49,200.00
Office single seaters seats
Office table, rectangle, glass top
1 37,800.00
pane
Sub total 2 ₱87,000.00
DOH RO III Printer 1 7,750.00
AED Trainer 1 9,200.00
Short Spine Board 2 5,200.00
Cervical Collar and other medical
36,400.00
supplies
Emergency Light 3 11,150.00
Kendric Extrication Device 2 27,800.00
Handheld Radio 4 11,600.00
Responder Helmet 8 47,200.00
Nebulizer 1 5,900.00
Megaphone 1 3,500.00
Sub total 23 ₱165,700.00
DPWH Zambales Oven 1 165,100.00
Sample Splitter 1 18,800.00
Analytical Balance 2 159,150.00
Dessicator 1 15,520.00
Machine with Abrasive Charges 1 123,500.00
Color Guide 1 35,000.00
Standard Mold 3 77,400.00
Mixer with Bowl & Paddle 2 150,200.00
Ilocos Norte Chairs 17 82,199.00
Computer table 1 2,100.00
Steel Filing Cabinet 2 25,000.00
Laptop Computer 1 56,500.00
UPS 2 9,800.00
Office Table 6 55,800.00
Camera 1 19,500.00
Cellphone 10 437,500.00
Southern
Steel Filing Cabinet 1 10,500.00
Leyte
Desktop Computer 2 150,000.00
Licensed Microsoft Office
2 22,000.00
Software
15
 QUANTITY AMOUNT
Out of
AGENCY Location ITEM / DESCRIPTION Out of
2015 2016 Donated
DRRMF
Funds
Southern
DPWH Laptop Computer 2 114,000.00
Leyte
Aircon 3 28,500.00
Sub total 62 ₱1,758,069.00
Central
DSWD Aircon 6 191,200.00
Office
Printer 7 104,930.00
Portable Bag Closer 16 416,000.00
Hualian Impulse sealer 50 92,500.00
Laptop Computer 3 77,100.00
External Drive 25 94,875.00
Powerbank 25 55,000.00
Tablet 7 419,986.00
Sub total 79 60 ₱1,374,491.00 ₱77,100.00
GRAND TOTAL 165 63 ₱28,751,003.88 ₱1,062,792.00

16
 Significant Audit Observations and Recommendations

A. National and Corporate Government Sectors

Utilization of the Quick Response Fund

9. QRF of the Department of National Defense amounting to ₱74,672,986.72 was utilized

for the procurement of supplies and equipment and for the repair/construction of
buildings which do not fall within the definition of QRF as stated in the Special Provision
of GAA 2014 (RA 10633). Moreover, only ₱386,835.00 was disbursed out of the
₱336,585,000.25 or 0.11 percent pertaining to the continuing appropriations of QRF for
CY 2015.

9.1. General Appropriation Act of 2014 (RA 10633) - Quick Response Fund - provides that:
“The amount of Three Hundred Fifty Two Million Five Hundred Thousand Pesos
(₱352,500,000.00) for the Quick Response Fund (QRF) shall serve as a stand-by fund
to be used exclusively for relief, rehabilitation and reconstruction programs and
projects in order that the situation and living conditions of people living in communities
or areas stricken by calamities, epidemics, crises and catastrophes occurring during the
year may be normalized as quickly as possible. xxx.” It is expressly provided that the
QRF shall in no case be used for pre-disaster activities nor be realigned for any other
purpose.

9.2. The President declares that, “ xxx, I hereby affirm that the Quick Response Fund lodged
under the budgets of front-line agencies in times of calamities is more effective when
utilized as well for the pre-positioning of goods, emergency response units, and other
allied support items and equipment in order that the situation and living conditions of
people in communities or areas stricken by calamities, epidemics, crises and
catastrophes are normalized as quickly as possible.”

9.3. In CY 2015, DND was provided a budget of ₱352,500,000.00 for QRF of which
₱15,914,999.75 was utilized.

9.4. For CY 2016, DND had a total appropriation of ₱536,585,000.25 for disaster risk
reduction and management services, as shown below:

Amount
From GAA CY 2016 ₱ 200,000,000.00
From Continuing Appropriation 336,585,000.25
Total ₱ 536,585,000.25

9.5. During the year, DND transferred to the Philippine Air Force a total of ₱386,835.00
for the rehabilitation of its facilities damaged by Typhoon Lando. Said amount was 0.1
percent of the 2015 QRF appropriation of ₱352,500,000.00.

17
9.6. Meanwhile, the amount of ₱74,286,151.72 has been paid out of the 2014 QRF
appropriation for the procurement of supplies and equipment; and for the
repair/construction of buildings. Details are as follows:

Nature of
Supplier Particulars Amount
transaction
Astartez Defense and Acquisition of ₱11,217,990.60
Rescue Solutions Individual Defense
Equipment for PAF
Boston Home 2 units of water 6,192,000.00
Incorporated purification unit with
Payment for trailer
equipment
Dane Degala Pharmacy Air Ambulance 4,999,300.00
Equipment
JV of Philippine Life Acquisition of 1,035,630.00
Saving Equipment Inc. specialized equipment of
2 units of rescue boats
Subtotal ₱23,444,920.60
Dane Degala Pharmacy Drugs and medicines for ₱981,200.00
PAF
PJ Cruz Construction & Payment for supply and 980,100.00
Trading delivery of 90,000
Payment for goods bottles purified drinking
water
Stone of David Tactical Prepositioned supplies 3,823,937.50
Equipment Company project –Meal Ready to
Eat
Subtotal ₱5,785,237.50
Armada Rescue and ₱116,880.00
Safety Equipt. Corp
Oliveros Protective 134,000.00
Acquisition of personal
Equipment and Retention fee
protective equipment
Maritime Supplies
PJ Cruz Construction & 331,600.00
Trading
Subtotal ₱582,480.00
Total Procurement for Goods and Equipment ₱29,812,638.10
Procurement of spares ₱33,073,650.66
Aeromaxis Maintenance
for Huey Helicopter tail
Products Inc.
no. 662
FJ Tiu Associates Construction of MIG8 1,682,804.05
Construction and Dev. Field Team Office
Repair of Health Center 260,087.95
Payment for
Forman Construction of NOLCOM-
repairs/construction
Services ORIGINALLY
268087.95
Forman Construction Reconstruction of Other 643,880.00
Services Structure of NOLCOM
Reconstruction of Power 1,698,480.00
Forman Construction
Supply System of
Services
NOLCOM
Forman Construction Repair of Market of 269,850.00
Services NOLCOM

18
 Nature of
Supplier Particulars Amount
transaction
Forman Construction Payment for Repair of School Bldg of 254,966.04
Services repairs/construction NOLCOM
Forman Construction Repair of Bldg at 1,050,931.42
Services NOLCOM
Forman Construction Repair of Bldg at 5,538,863.50
Services NOLCOM
Subtotal for Repairs and Construction ₱44,473,513.62
Grand Total ₱74,286,151.72

9.7. Examination and review of the aforementioned transactions disclosed the following
lapses:

a) Disbursements amounting to ₱74,286,151.72 out of CY 2014 QRF was not in

accordance with the guidelines set on QRF utilization. The amount of
₱29,812,638.10 was used for the procurement of equipment and goods which is a
pre-disaster activity; while the amount of ₱44,473,513.62 were used for the repair
and construction of buildings which do not fall on the definition of QRF as stated
in the Special Provisions of GAA of 2014.

b) The procurement of equipment and goods are envisioned as pre-disaster activities

which the above provisions expressly prohibits. While these items are inevitably
helpful during disasters or calamities, it is not in line with the intention of the QRF
which should be utilized in prepositioning activities as well as rehabilitation of and
reconstruction of communities affected by calamities, epidemics, crises and
catastrophes.

c) Disbursements for the repair of PAF Huey Helicopter with tail no. 662 in the
amount of ₱33,073,650.66 and ₱1,424,982.87 for the repairs/constructions of
different offices and buildings of the AFP or a total of ₱34,498,633.53 were not
supported with documents or justifications to validate the use of the QRF Fund.

d) On the other hand, records also showed that only ₱386,835.00 was utilized out of
the obligated amount of ₱25,337,841.02 for CY 2015 QRF for the rehabilitation of
facilities damaged by Typhoon Lando and the balance of ₱311,247,159.23 reached
expiration period and reverted to the National Treasury.

9.8. It was also noted that the QRF for CY 2016 totaling ₱200,000.000.00 was not utilized
during the year because no allotment was released for the purpose.

9.9. The President tasked the DND to undertake swift and efficient coordination activities
with the Department of Social Welfare and Development (DSWD) to prevent the
overlapping of pre-positioning activities to prevent wasteful duplication of the
provision of goods. With 14 typhoons that entered the Philippines Area Responsibility
(PAR) with typhoons Lawin and Nina making land fall to name a few, this would have
been the perfect opportunity for the QRF to be used by the DND. However, the DND

19
 failed to utilize the funds appropriated by the Congress which would be a big help to
the rightful beneficiary of the funds.

9.10. It is reiterated that the DND:

a. prepare Program of Expenditure for QRF that will include a comprehensive

relief and rehabilitation plan/programs addressing and normalizing as quickly
as possible, the situation and living conditions of victims, communities or areas
stricken by calamities, epidemics, crises and catastrophes occurring during the
year;

b. justify the procurement of goods and equipment, and repairs/construction of

AFP Buildings using the QRF;

c. create a committee to coordinate with the other concerned agencies for the
non-duplication of projects using the QRF;

d. regularly post the Quarterly Reports of the Utilization of the QRF in the DND
website; and

e. strictly comply with the afore-cited provision of the law.

9.11. Management comments:

a. DND QRF projects are all covered with duly approved programs of expenditure
and transferred to implementing agencies in accordance with COA Circular No. 94-
013. However, in 2016, the QRF was not or minimally utilized because of the
limitations on its utilization and differing interpretation on how QRF is going to be
utilized.

b. There are several agencies appropriated with QRF such as the DPWH for the road
rehabilitation and repairs of facilities, the DSWD for the people affected through
food distribution and the OCD for the non-food items. The DND ever since is more
for command and control activities such as the organization, training and equipage
of the AFP, as first responders. This has been further affirmed in former President
Aquino’s veto message on the GAA 2014 that the QRF can be used to preposition
goods, emergency response units and allied support items and equipment. These
include the necessity for the AFP to rehabilitate or repair buildings and facilities as
allied support to responses to AFP and HADR missions.

c. On 13 February 2017, SND approved Department Circular No. 04 on the DND

Website Policy and Content Guidelines in line with the iGovPhil Project. Another
Home under the DND Transparency Seal has been included for Compliance to
GAA-Required Reports separate from AO25-Required Reports. Thus, starting 1st
Quarter 2017, Compliance to GAA-Required Reports will be posted in said Home.
This includes the Quarterly Report on the Utilization of the QRF. To date, quarterly
20
 QRF utilization is reported in FAR 1 under MFO 2: Disaster Risk Reduction and
Management (DRRM) Services and posted in the DND Transparency Seal under
BFARs.

10. The Tondo Medical Center (TMC) in NCR did not allot at least five percent of MOOE
for the DRRM. Moreover, Bifenthrin and D-dtranscyphernothrin amounting to 5.758
million acquired through emergency procurement, still remain to be unissued, which
defeats the purpose of its emergency nature

10.1 Section IV of DOH Administrative Order (AO) No. 2012-0013 dated July 20, 2012
requires all implementing agencies to ensure the availability of funds for logistics to be
used in emergencies and disasters of at least five percent of the MOOE allotted annually
solely for this purpose which is accessible at any given time.

10.2 Moreover, Department Order (DO) No. 2016-0053 dated March 9, 2016 was issued to
provide guidelines on the release of funds from Health Emergency Management
Bureau (HEMB) while DO No. 2016-0209 dated August 16, 2016 was issued to
provide guidelines on the sub-allotment and utilization of funds from the HEMB for
the implementation of HEM Program to selected DOH RO and Hospitals for CY 2016.

10.3 Verification showed that the HEMs Program of TMC did not allot at least five percent
of the MOOE of ₱59.526 million or equivalent to ₱2.976 million for the procurement
of standby logistics for disaster preparedness contrary to DOH AO No. 2012-0013
dated July 20, 2012. For CY 2016, the disaster activities funded by HEMs of ₱0.500
million only ₱0.145 million were disbursed which shows the ineffective planning of
work targets and implementation of program activities.

10.4 The DOH sub-allots its funds to different ROs/hospitals for the implementation of their
HEMB Program. DOH-HEMB, a unit office in the DOH-CO created to provide priority
action and strategies for effective rehabilitation and reconstruction wholly on health
aspect of affected community after a disaster, issued corresponding guidelines on the
sub-allotment and utilization of these funds in which recipient ROs/hospitals that
handled the disbursements are responsible for the increase of undisbursed rate of sub-
allotments.

10.5 For CY 2016 out of the ₱1,247.762 million funded by QRF and HEMB Fund for the
DOH-CO disaster activities, three percent or ₱42.692 million is unobligated and 63
percent or ₱753.257 million is undisbursed.

10.6 However, of the undisbursed QRF of ₱650.687 million, the amount of ₱210.928
million are still with the DOH as of December 31, 2016 for the procurement of portable
microbiological water testing kits and Zika package.

10.7 Moreover, the two inventories that are procured in CY 2016 under emergency
procurement namely Bifenthrin and D-dtranscyphernothrin of ₱115.151 million, five

21
 percent or 5.758 million of which are still among the unissued inventories as of
December 31, 2016 which defeats the purpose of its emergency nature.

10.8 It was recommended and the DOH Secretary agreed to direct the Heads of TMC
and OSEC-HEMB to:

a. allot at least five percent of their MOOE for procurement of standby logistics
as prepositioned goods in case of disaster and prepare plans in the utilization
of the Disaster Fund (TMC);

b. improve plans in the utilization of the Disaster Fund and fast track
implementation of the program activities (HEMB);

c. submit the accomplishment report as a basis of validation of the utilization of

the HEM fund (HEMB);

d. strictly abide with the guidelines of fund utilization and reporting

requirements as prescribed by the DOH (HEMB); and

e. enforce immediate distribution/issuance of the procured inventories to its

intended recipients to meet the purpose of the DRRM Fund following the First
to Expire, First-Out (FEFO) Policy on the issuance of inventories/equipment
(HEMB).

Unutilized National Risk Reduction and Management Fund

11. Of the 172 disaster-related infrastructure projects amounting ₱1,850,736,547.09 of

DPWH - Region V, only one project was completed, leaving the 12 projects on-going
while 159 remained unimplemented due to late release of SAROs and scarcity of
construction materials; thus, affecting the level of preparedness of the community from
the occurrence of natural calamities and increasing the risk of damage to the region in
case of disaster.

11.1 The National Disaster Risk Reduction and Management Plan (NDRRMP) fulfills the
requirement of RA No. 10121 of 2010, which provides the legal basis for policies, plans
and programs to deal with disasters.
The NDRRMP covers four thematic areas, namely:

 Disaster Prevention and Mitigation;

 Disaster Preparedness;
 Disaster Response; and
 Disaster Rehabilitation and Recovery

11.2 Of the four thematic areas of the NDRRMP, fund released to the DPWH is for the
Disaster Rehabilitation and Recovery which restores and improves facilities, livelihood

22
 and living conditions and organizational capabilities and reduced disaster risk in
accordance with the “building back better” principle. These funds will be used to
restore any infrastructure projects damaged by natural calamities.

11.3 Review of the approved Disaster-Related and Emergency Fund of the DPWH Regional
Office V and Masbate 1st District Engineering Office amounting to ₱1,850,736,547.09
revealed that 172 projects were planned to be implemented during the year. However,
only one project was completed, 12 were on-going and 159 were unimplemented as at
year-end. Breakdown are as follows:

Office Amount No. of Status of Implementation

Projects Completed On-going Unimplemented
RO No. V ₱1,526,266,760.00 158 0 0 158
Masbate 1st 324,469,787.09 14 1 12 1
Total ₱1,850,736,547.09 172 1 12 159

11.4 The delay in the implementation and procurement of these infrastructure projects was
attributed to the late release of SAROs, delay in the conduct of detailed engineering
and scarcity of construction materials in the market.

11.5 Considering that the purpose of the fund was intended mostly for the construction,
rehabilitation and improvement of flood control systems in different flood prone areas
in the Bicol Region, the immediate implementation and completion thereof could have
addressed disaster related concerns; hence, the objective for which the fund was
released could have been fully attained.

11.6 The purpose of the early recovery or protection of the victims during disasters and
emergencies for which these projects are intended suffered setback due to the absence
of these infrastructures.

11.7 It was recommended that DPWH make representation with DBM for the timely
release of SAROs to ensure the immediate implementation and completion of on-
going and unimplemented projects, in order to effectively increase the level of
preparedness of the community from the occurrence of natural calamities and
mitigate the risk of damage in case of disaster.

Non-conformity with Policies and Procedures

12. The criteria and procedure for enlistment of Accredited Community Disaster Volunteers
(ACDVs) as well as the Manual of Operations for volunteers were not developed by the
Office of Civil Defense.

12.1 Section 9 (o), RA 10121 requires OCD to “prepare the criteria and procedure for the
enlistment of Accredited Community Disaster Volunteers (ACDVs). It shall include a
manual of operations for the volunteers which shall be developed by the OCD in
consultation with various stakeholders”.
23
 12.2 Volunteer is defined as “individual/person or group who for reasons arising from their
socio-developmental, business and corporate orientation, commitment or conviction,
contribute time, service, and resources whether full time or part time base to a just and
essential social development cause, mission or endeavor in the belief that their activity
is mutually meaningful and beneficial to public interest as well as to themselves”.

12.3 To augment the personnel complement of the Local Government Units, volunteers are
needed. OCD shall conduct trainings to capacitate volunteers, to assist the Local
Disaster Risk Reduction and Management Office personnel in time of disaster. As such,
they are entitled to compensatory benefits and individual personnel accident as
provided in Section 13 of RA 10121.

12.4 Section 13 of RA 10121 states that, “The government agencies, CSOs, private sector
and LGUs may mobilize individuals or organized volunteers to augment their
respective personnel complement and logistical requirements in the delivery of disaster
risk reduction programs and activities. The agencies, CSOs, private sector and LGUs
concerned shall take full responsibility for the enhancement, welfare and protection of
volunteers, and shall submit the list of volunteers to the OCD, through the LDRRMOs,
for accreditation and inclusion in the database of community disaster volunteers”.

12.5 Interview with Policy Development and Planning Service Office of OCD disclosed that
there was an attempt to prepare such criteria, however the lack of personnel prevented
them to do so. It was only in 2016 that its Organizational Structure and Staffing Pattern
(OSSP) had been approved.

12.6 There are established volunteers mobilized by various agencies and LGUs, while OCD
focused their activities towards the implementation of various programs/projects
responsive to the disaster preparation and mitigation.

12.7 The non-preparation of the said criteria and the procedures exposed the volunteers to
possible risks in performing their duties and misuse of funds in giving benefits to non-
qualified volunteers.

12.8 It was recommended that OCD instruct the concerned officials to prepare the
criteria and the procedures for the enlistment of ACDVs in compliance with
Section 9.O of RA 10121.

Improper charging of disbursements

13. Various disbursements were improperly charged against the Yolanda Recovery and
Rehabilitation (YRRP)Fund, resulting in increased unexpended balance from ₱152.668
million to ₱272.459 million, which has not been returned to National Electrification
Administration (NEA) contrary to Sections 2 and 7 of the MOA.

24
13.1 The aftermath massive hit of Typhoon Yolanda affected the electric distribution lines
of 33 Electric Cooperatives (ECs). As an immediate response of the government thru
NEA and for the speedy rehabilitation of damaged distribution lines and the immediate
resumption of power service in the affected areas of 33 ECs, NEA immediately
extended calamity loans to the concerned ECs while waiting for the receipt of subsidy
funds from the National Government.

13.2 On January 3, 2014, NEA received from the NG a subsidy fund for the implementation
of the YRRP amounting to ₱3.929 billion under SARO No. BMB-F-13-01330 dated
December 27, 2013 with NCA No. BMB-F-13-0024883.

13.3 Upon release of the abovementioned subsidy funds, the calamity loans extended to the
affected ECs were converted into subsidy grants and successive calamity grants were
released.

13.4 For CY 2016, the following Electric Cooperatives with YRRP subsidy funds were
audited:

1. BANELCO
2. DORELCO
3. LEYECO III
4. LEYECO V
5. CAPELCO
6. ESAMELCO

13.5 Our audit was guided by the following provisions of the MOA:

a. Section 2 provides that: “THE RECIPIENT shall use the funds, which may be in
the form of materials and equipment requisitioned, cost of labor and peso releases
requested by the RECIPIENT from NEA, solely and exclusively for the project(s)
adverted to in Schedule A, and in no case diverted or used for purposes unrelated
to said projects such as but not limited to money market placements, and other
related forms of investments not related to the project, payments for amortization
on loans and/or credit accommodations obtained by the RECIPIENT from
creditors, payment of power bills, salaries, wages, honoraria and other similar
benefits of RECIPIENT’S regular personnel. Appropriate actions shall be imposed
on any Board of Directors who voted affirmatively to the diversion of funds or
otherwise violated this provision and any officer or employee who implemented the
same.”

b. Section 7 provides that “It is agreed that all amount in excess of total disbursements
and cost of unimplemented project including interest earned thereon shall be
returned/remitted to NEA or the Recipient may request written authority from NEA
to use the savings/balance as well as interest accruing to the fund for activities allied
to the project. NEA Memorandum Circular No. 2013-022 dated 30 September 2013
provides that the request of ECs for written authority from NEA to use the

25
 savings/balances of subsidy funds shall be considered only for balances amounting
to ₱100,000.00 and above. Excess balances below ₱100,000.00 shall be returned to
NEA one month after NEA’s final inspection and acceptance. ECs requesting for
realignment are given three (3) months from NEA’s final inspection and
acceptance. Request for realignment shall no longer be accepted beyond this
period.”

13.6 The abovementioned YRRP projects were already completed and energized on various
dates which were inspected by NEA representatives as evidenced by the issued
Certificate of Final Inspection and Acceptance (CFIA).

13.7 Status of Power Restoration as of December 31, 2014, with the information that the
rehabilitation/reconstruction of distribution lines of the ECs affected by Typhoon
Yolanda was undertaken from the fourth quarter of 2013 to second quarter of 2014, and
all affected 341 municipalities, 7,059 barangays and 1,454,272 households have been
energized, connected and served.

26
13.8 Review of the Accounting of Funds (AOF) and its corresponding liquidation documents are summarized as follows:

AF Per EC AF Per Audit

Amount Received by
EC Name Deficit from Deficit from
EC Fund Utilization Unexpended Utilization Total Unexpended
Subsidy Receipts Subsidy Receipts

BANELCO ₱79,971,993.36 ₱85,683,364.44 - (5,711,371.08) ₱81,625,027.19 - ₱(1,653,033.83)

DORELCO 485,251,210.73 332,582,917.38 ₱152,668,293.35 - 290,643,250.50 ₱194,607,960.23 -

ESAMELCO 233,463,567.03 286,285,264.09 - (52,821,697.06) 276,063,786.48 - (42,600,219.45)
LEYECO III 213,663,449.94 316,995,239.10 - (103,331,789.16) *135,811,980.44 77,851,469.50 -
LEYECO V 547,380,459.33 629,870,452.34 - (82,489,993.01) 556,534,849.69 - (9,154,390.36)
CAPELCO 468,566,695.80 522,344,504.29 (53,777,808.49) 502,005,324.37 - (33,438,628.57)

Total ₱2,028,297,376.19 ₱2,173,761,741.64 ₱152,668,293.35 ₱(298,132,658.80) ₱1,842,684,218.67 ₱272,459,429.73 ₱(86,846,272.21)

27
13.9 Paragraph 4.b of the NEA Memorandum dated February 20, 2017 on Guidelines on the
YRRP Project Implementation and Release of Funds to the ECs states that:

“The second and succeeding releases, which in no case shall the balance be more than
the 10% retention, shall be based on progress billing thus, the EC shall be required to
submit original copies of duly signed accomplishment and fund utilization for the
previous release. Moreover, the original copy of the disbursement voucher supported
by the following reports/documents, where applicable, shall also be submitted”
(emphasis ours)

13.10 Examination of the liquidation documents attached to the Accounting of Funds (AOF)
revealed that certain disbursements were improperly charged against YRRP Fund. The
details are as follows:

a. Payment of payroll salaries of regular employees for eight months and even before
the hit of Typhoon Yolanda;
b. Materials Charge Tickets (MCTs) charged to the subsidy beyond completion date
of the last lateral line or issuance of the CFIA;
c. Expenses against the subsidy which were not related to the projects such as
purchase of laptops, printers, expenses for town fiesta, lechon for despedida of the
task force kapatid, vitamins, purchase of 32” LED TV for recreation, refrigerator,
goat, live carabao, sweatshirts, rainboots, raincoats, meetings and inspection of
Board Member for electrification program;
d. Payments of benefits for Task Force Kapatid without prior approval from NEA;
e. Other expenses not supported with necessary documents;
f. Net or excess of material charges over actual use in the project or computation
errors in the MCTs; and
g. Charged Input Vat against the subsidy fund.

13.11 The said NEA Memorandum also enumerates the reports/documents required to be
submitted to NEA, to wit:

By Administration/Task
By Contract
Force Kapatid
Materials and Labor (supply, delivery,
installation
 Contract
 Accomplishment Report
 Official Receipt
 Abstract of Bids with Bid Documents

Materials
 Abstract of Bids with Bid Documents  Abstract of Bids with Bid
 Contract Documents
 Official Receipt  Purchase Order
 Purchase Order  Receiving Report
 Receiving Report  Inspection Report
 Inspection Report  Material Credit Tickets
and Summary of MCrt

28
 By Administration/Task
By Contract
Force Kapatid
 Material Charge Tickets
and Summary of MCT
Labor
 Contract  Payroll
 Accomplishment Report  Memorandum of
 Official Receipt Agreement
 Abstract of Bids with Bid Documents  Official Receipt or
Reimbursement Expense
Receipt

13.12 Likewise, NEA Memorandum No. 2013-023 dated October 10, 2013 on the
Submission of Original Documents to Support the Liquidation of Subsidy Funds
Released to the ECs categorically enumerates the reports/documents needed to support
the liquidation for the electrification projects.

13.13 Based on the above-cited provisions, the above expenses should be charged against the
ECs General Fund as these expenses were not included in the coverage of YRRP
mandated under Presidential Decree No. 269, as provided in the MOA:

“x x x there is a need for government to subsidize cost relative to the cost of fuel and
minor repairs/maintenance and/or vehicle rentals directly used in the project,
rehabilitation of distribution lines and/or systems damaged by typhoons, earthquakes
and other related calamities x x x.”

13.14 The LEYECO III submitted Certifications from the Municipal Disaster Risk Reduction
and Management Office dated February 7-8, 2017 to NEA stating that the EC was
heavily affected by Typhoon Yolanda. Said EC also submitted a sworn statement from
the General Manager, that the SEP 2012 Project was completed within the period from
June 16, 2012 to March 2013, however, this was not yet inspected by NEA
representative/s before Typhoon Yolanda hit on November 2013. Further examination
showed that the sworn statement/affidavit did not indicate the details of the damaged
cost of LEYECO III properties including its accountability from the subsidy funded
projects, considering that these documents were prepared after the audit period.

13.15 Moreover, the revised AFs has no documents to validate the charges made such as
MCTs.

13.16 The OIC Technical Services clarified that although those items were included in the
YRRP Policy, the release of fund is still subject to their evaluation.

13.17 Included in the abovementioned NEA guidelines for YRRP is No. 4.F on Project Audit
which states that “The NEA audit team shall conduct examination of liquidation
documents as well as compliances to Memorandum of Agreement (MOA) provisions
and conditionalities.”

29
 13.18 The submitted reports and DVs were not supported by the required documents due to
non-conduct of pre-audit by NEA Audit Team.

13.19 NEA recommended that the concerned ECs:

a. Return/refund the unexpended/unutilized balance of the subsidy received in

accordance with Sections 2 and 7 of the MOA and other NEA Memoranda on
the proper use of subsidy funds, furnishing immediately the COA Office a
photocopy of the official receipt, for monitoring purposes;

b. Request approval for any deviations from the MOA and furnish COA Office
of the approved copy, if any;

c. Release the remaining balance but only up to the amount allowed in the audit;

d. Ensure compliance on the submission of documentary requirements required

under NEA Memorandum Nos. 2013-022 and 2013-023;

e. Compel the NEA internal audit team to conduct examination of the liquidation
of documents as required in the NEA guidelines for YYRP; and

f. Ensure accuracy/correctness of the reports submitted, particularly the

Accounting of Funds

Receipt of foreign donations without prior clearance and approval

14. Foreign donations of ₱751.913 million received by the DSWD from the Government of
Australia were without prior clearance and approval by the President of the Philippines
and not deposited with the BTr; thus, the necessary protocol review to ensure that all
donations for projects and programs are in sync with the government funding and thrusts
was bypassed. In the absence of said approval/clearance, disbursements amounting to
₱581.158 million is without authority.

14.1 Section 6 of the CY 2016 GAA provides that: “xxx. In case of donation from foreign
governments, acceptance thereof shall be subject to the prior clearance and approval
by the President of the Philippines upon recommendation of the Secretary of Foreign
Affairs.”

14.2 It further states that: “the receipts from cash donations and proceeds from sale of
donated commodities shall be deposited with the National Treasury and recorded as a
Special Account in the General Fund and shall be available to the implementing agency
concerned through a Special Budget pursuant to Section 35, Chapter 5, Book VI of
E.O. No. 292.”

30
14.3 Article 4 of General Agreement on Development Cooperation (GADC) between the
Government of Australia (GOA) and the Government of the Republic of the Philippines
(GRP) signed on October 28, 1994 provides that the Australian International
Development Assistance Bureau of the Department of Foreign Affairs and Trade shall
be the coordinating authority for the Government of Australia while the National
Economic and Development Authority (NEDA) shall be the coordinating authority for
the GRP.

14.4 In CYs 2014 to 2016, the DSWD, as represented by the Secretary, entered into an
agreement with the GOA, represented by the Department of Foreign Affairs and Trade
(DFAT), for the implementation of the following programs:

DFAT program funds not remitted to the BTr

Amount Received
Project Name Year
(In Million)
Improving Access to Early Learning through Community-led
₱487.954
Approach 2014
Social Protection Reforms 52.500
Social Support for Disaster Response 104.247
2015
56.772
Social Protection Reforms
2016 50.440
TOTAL ₱751.913

14.5 The above amounts were recorded as CIB–LCCA and Income from Grant and
Donations-Cash for the respective years of receipt and were directly deposited to the
Land Bank of the Philippines (LBP) for the account of the DSWD as provided for in
the provision for Deposit and Disbursement of GOA funds of the MOA.

14.6 While the agreement states that the funding of the said programs was born out of the
terms of the GADC, the insertion of “prior clearance and approval by the President of
the Philippines upon recommendation of the Secretary of Foreign Affairs” in the GAA
suggests certain amendment for compliance by the Philippine Government that may
not necessarily affect previously approved agreements.

14.7 Moreover, the Agreement specifies that the NEDA is the coordinating authority for the
GRP but records show that it is the DSWD Secretary who signed the Direct Funding
Agreement, contrary to Article 4 of the GADC.

14.8 The failure of the DSWD to secure prior clearance and approval by the President of the
Philippines upon recommendation of the Secretary of Foreign Affairs and non-
compliant signatory to the Agreement is contrary to established rules and regulation on
donations; thus, the process bypassed necessary protocol reviews to ensure that all
donations for projects and programs are in sync with the government funding and
thrusts.

14.9 Further, non-remittance of the donated funds to the BTr may affect the judicious
formulation and implementation of special budgets reflective of the national objectives

31
 of ensuring that funds are utilized and operations are conducted effectively,
economically, and efficiently.

14.10 DSWD proceeded with the receipts and disbursements of the donated funds even
without the prior approval of the President of the Philippines contrary to Section 6,
Paragraph 3, General Provisions of RA No. 10717 or the GAA of FY 2016 which states
that: “Disbursements or expenditures by agencies in violation of the above
requirements shall be void and shall subject the erring officials and employees to
disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter
7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal
laws.”

14.11 The table below summarizes the receipts and disbursements of various DFAT grants
with its corresponding accomplishments pertaining to programs/projects of the DSWD.

Receipts and Disbursements of DFAT Grants

DFAT Grant Amounts (in Million) % Accomplishment
No. Received Disbursed Utilized
70184 ₱487.954 ₱466.935 95.69 Of the total funded 374 Sub-Projects
Improving (SPs) -
Access to Early  338 SPs (90%) already completed
Learning and directly benefitted 113,754
through households;
Community-led  27 SPs (7%) ongoing
Approach implementation;
 9 SPs (3%) are yet to start
70013 104.247 57.598 55.25  Construction of one unit
Support Warehouse and various
Program for improvements at DSWD National
Disaster Resource Operations Center
Response (NROC) of P34,748,999.46;
 Trainings - Workshop on
Inventory and Warehouse
Management;
 Psychosocial Support Trainings;
 Manual of operations on
Donations, Logistics,
 Production and warehouse
management (on-going);
 Disaster Response Manuals for
FOs (on-going)
70507 Social 159.712 56.625 35.45  Various
Protection Seminars/Trainings/Workshops/
Reforms Study/Reports on DSWD’s Social
Protection Reforms
Total ₱751.913 ₱581.158

14.12 Verification showed that the purposes of the program/s were accomplished within the
timeframe as evidenced by the above disbursements. The duration period for DFAT
No. 70184 ended in December 2016 while the end-date for the other two programs will
32
 be on December 2017. All grant agreements were signed by the DSWD Secretary on
behalf of the GRP pursuant to the documents entitled “Subsidiary Arrangement
Between the GRP and the GOA – Support for the National Disaster Coordinating
Council Collective Strengthening of Community Awareness to Natural Disaster”.

14.13 Since there was no presentation of any evidence of the approval of the President of the
Philippines, upon the recommendation of DFA Secretary, the programs/projects
enclosed in the agreements entered into by the Agency were likewise not approved by
the Philippine Government; thus, making the disbursements/expenses void ab initio or
to be treated as invalid from the outset pursuant to Section 6 Paragraph 3, General
Provisions of RA No. 10717 GAA of CY 2016.

14.14 It was recommended that the DSWD:

a) Seek clearance and approval of the President upon the recommendation of the
DFA on all donation agreements with foreign governments as well as
disbursements thereof; and

b) Remit to the BTr the amounts received in accordance with Section 35, Chapter
5, Book VI of EO No. 292.

14.15 Management Comment:

The DSWD has continuing authority to enter into subsidiary agreements with agencies
of the GOA based on the General Agreement on Development Cooperation (GADC)
entered into by the GRP and GOA dated 28 October 1994.

The GADC authorized “agencies, statutory authorities or organizations” of the GOA

and the GRP to “conclude subsidiary arrangements in respect of specific activities.”
Because the DSWD is not aware of any subsequent agreement or issuance by either the
GRP or the GOA revoking this provision, the authority given by this provision is
deemed to be continuing and because the DSWD, as an agency of the GRP, has an
implicit continuing authority to enter into subsidiary agreements with other agencies of
the GOA, it is sufficient compliance with the requirement under various GAA for
“prior clearance and approval of the President of the Philippines upon
recommendation by the Secretary of the Foreign Affairs.”

Nevertheless, to avoid any misunderstanding or ambiguity, in the future, the DSWD

shall seek explicit approval from the President before accepting donations from foreign
governments.

NEDA is not the only GRP agency that may enter into subsidiary agreements with the
GOA. As previously stated, Article 5.1 for the GADC authorized “agencies, statutory
authorities or organizations” of the GRP to enter into such subsidiary arrangements.
The DSWD is an agency of the GRP and the Secretary is the head; thus, the DSWD
Secretary has sufficient authority to sign DFAT Agreement.

33
 The donor/grantor, the GOA through the DFAT, authorized the deposit of the donated
funds into the DSWD accounts; thus, DSWD was exempted from remitting these funds
to the BTr.

14.16 Auditor’s Rejoinder:

The GAA is the highest law that establishes the national budget of the Philippines. It,
likewise, provides a system of receipt and utilization of funds to ensure that this will
achieve the purpose with impact on the lives of the Filipinos and the nation as a whole.
The latest provisions of the GAA in CY 2014 to 2016 set the guidelines that should be
followed by all officials in the Government to ensure that the budget/funds are utilized
and operations are conducted effectively, economically, and efficiently.

Misstated and Unreconciled Inventory Balances

15. The recorded balance of Inventory of DSWD was overstated by a net amount of ₱964.568
million due to non-preparation and submission of RSMIs to the Accounting Office for
recording of all consummated/issued inventories. Moreover, the accuracy and existence
of the balance of inventory in five FOs amounting to₱1,647.590 million were not
ascertained due to non-conduct of physical count, non-maintenance of SL and SLC,
dormant prior years balance, and non-conformity with the perpetual inventory system.

15.1 Section 9, Chapter 8 of GAM Volume I, states that, “supplies and materials purchased
for inventory purpose shall be recorded using the Perpetual Inventory System, resulting
in a more accurate inventory records and a running total for the cost of goods sold in
each period. Regular purchases shall be coursed through the inventory account and
issues thereof shall be recorded as they take place except for supplies and materials
purchased out of PCF for immediate use or on emergency cases which shall be charged
directly to the appropriate expense accounts.”

15.2 Section 17 requires, among others, the following Records, Forms and Reports to be
prepared and/or maintained.

a) Supplies Ledger Card (SLC) – shall be used to record materials received, issued
and the balance both in quantity and amount at any time. It shall be maintained by
the Accounting Division/Unit for each kind of supplies and materials. The IAR,
RIS, RSMI, PO and DR serve as the original sources of information for making
entries on the card.

b) Stock Card (SC) – shall be used to record all receipts and issues of supplies and the
balance in quantity at any time. It shall be maintained by the Property and/or Supply
Division/Unit for each item in stock.

c) Report of Supplies and Materials Issued (RSMI) – shall be prepared by the

Property and/or Supply Custodian based on the RIS and shall be used by the

34
 Accounting Division/Unit as basis in preparing the JEV to record the supplies and
materials issued.

d) Report on the Physical Count of Inventories (RPCI) – shall be used to report the
physical count of supplies by type of inventory as at a given date. It shows the
balance of inventory items per card and per count and shortage/overage, if any.

15.3 Section 53 of the GAAM, Volume III, further provides that “accountability for the
custody and use of an asset is to be assigned, maintained and periodic comparisons
shall be made of the existing asset with the recorded accountability and appropriate
action taken on any differences.”

15.4 The recorded Inventory as of December 31, 2016 amounted to ₱2.726 billion, however,
review of the balances per inventory account showed that the balances of inventories
in DSWD-CO, NCR, FO 4A, and FO X1 differed with those in the report of physical
count, with a total variance of ₱964.568 million, as shown in the table below:

Unreconciled Book Balance and Report of Physical Count (in million)

Total Remarks/
Inventories Some Cause/s of
RPCI Books Difference
the Differences
Welfare Goods for Distribution ₱122.913 ₱965.856 ₱842.943
Medical Dental & laboratory
No RSMI prepared
supplies for distribution 0.000 31.905 31.905
and submitted to
Construction Materials for
Accounting Office
Distribution 0.000 6.577 6.577
Office Supplies Inventory 16.312 25.443 9.131
Other Supplies and Materials 0.608 49.707 49.099
Drugs and Medicines Inventory 0.088 0.140 0.052
Unrecorded
Medical, Dental & Laboratory
supplies
Supplies 0.063 0.003 (0.060)
Construction Materials Inventory 1.840 1.563 (0.277)
Textbooks and Instructional No inventory on
Materials Inventory 0.000 0.137 0.137 hand
Food Supplies for Distribution 0.000 13.842 13.842
Food Supplies Inventory 0.542 11.589 11.047
Accountable and non-Accountable
forms invty 0.009 0.184 0.175
Semi expendable items 0.883 0.88 (0.003)
Grand Total ₱143.258 ₱1,107.826 ₱964.568

35
 15.5 Moreover, the following observations were noted in the FOs:

Field Offices
Observations
IVA V VI VIII XI
Lapses in the documentation and recording of inventories √ √ √ √ √
Misclassification of accounts √ √
Failure to conduct physical inventory √
Grant of contract to ineligible bidders √
Lack of supporting documents √
Inefficient warehouse management √
Inadequate facilities for storage √

15.6 It was recommended that the DSWD Secretary require the concerned FO to:

a. conduct physical count of inventories and prepare a Report thereon; prepare

RSMI and submit to Accounting unit for recording of issued inventories;

b. implement internal control measures to ensure that inventories are

safeguarded from possible wastage and misappropriation;

c. instruct the Property and Accounting offices to diligently prepare, maintain

and update their Inventory Records, Forms and Reports, consequently
reconcile the same; and

d. make the necessary adjustments in the books of accounts,if there is any.

Non submission of reports and documentary requirements

16. Non-submission of consolidated reports on the status of Disaster Risk Reduction and
Management Fund by the OCD as Secretariat/implementing arm of NDRRMC is
contrary to RA 10121; thus, sacrificing the transparency and accountability of funds.

16.1 Section 22 (d), RA 10121 states that, “All departments/agencies and LGUs that are
allocated with DRRM fund shall submit to the NDRRMC their monthly statements on
the utilization of DRRM funds and make an accounting thereof in accordance with
existing accounting and auditing rules”.

16.2 The submitted monthly reports by all agencies and LGUs shall be consolidated by the
Office of Civil Defense to produce annual reports, as required under Section V.A.2 of
COA Circular No. 2014-002.

16.3 Section V.A.2, COA Circular No. 2014-002 states that the OCD shall prepare monthly
reports consolidating the Reports on the Receipt and Utilization of the DRRMF sourced
from GAA and Cash Donations as well as annual reports based on the consolidated
monthly reports. The monthly and annual reports shall be submitted to the NDRRMC
36
 on the 10th day of the succeeding month and on or before the 15th day of January of the
succeeding year, respectively, copy furnished the COA Auditor of the OCD.

16.4 Transparency of and accountability in the use of disaster funds is considerably

important to the donors, stakeholders and the public. Availability of information in the
receipt and utilization of National Disaster Risk Reduction and Management Fund and
donations will show the whole picture on how the fund was used.

16.5 The Policy Development and Planning Service of OCD reasoned out that there was no
report submitted by the concerned agencies and LGUs. Hence, there are no reports to
be consolidated.

16.6 The COA is required to prepare an Annual Consolidated Report of Disaster Risk
Reduction and Management Fund based on the submitted reports of the audit team of
the concerned agencies and LGUs.

16.7 The non-submission of the above-cited reports precludes the audit team to validate the
data reported by various audit teams in the presentation of the overall picture of the
situation of Disaster Risk Reduction and Management Fund. The Consolidated Report
on the Audit of DRRM Funds will guide the stakeholders to perform better in
addressing disaster risk reduction management issues.

16.8 It was recommended and the OCD Administrator agreed that as the secretariat
of NDRRMC, to require the stakeholders to submit the consolidated reports in
compliance with Section 2.2 of RA 10121 and Section V.A.2, COA Circular No.
2014-002.

17. Perfected contracts for the implementation of projects of the DepEd taken from Quick
Response Fund for CY 2015 to CY 2016 totaling ₱5,042,075.40 were not submitted to
COA within the prescribed period; thus, impeded the conduct of auditorial, legal and
technical contract review.

17.1 As provided in Section 3.1.1 of COA Circular No. 2009-001 dated February 12, 2009,
within five (5) working days from the execution of a contract by the government or any
of its subdivisions, agencies or instrumentalities, including GOCCs and their
subsidiaries, a copy of said contract and each of all the documents forming part thereof
by reference or incorporation shall be furnished to the Auditor of the Agency
concerned. Section 3.1.2 of the same circular also enumerates the documentary
requirements of the contract for review.

17.2 Further, Section 14.1 of the Revised Implementing Rules and Regulations of Republic
Act No. 9184 provides the functions and responsibilities of the BAC Secretariat which
states, among others, that the Secretariat shall prepare minutes of meetings and
resolutions of the BAC, take custody of procurement documents and other records,
manage the sale and distribution of bidding documents to interested bidders, advertise
and/or post bidding opportunities including bidding documents & notices of award,
37
 monitor procurement activities and milestones for proper reporting to relevant agencies
when required and consolidate PPMPs from various units.

17.3 Evaluation of the agency’s compliance with the prescribed period of submitting the
perfected contracts to COA including the necessary documents disclosed that the Bids
and Awards Committee was not able to submit copies of the contracts of the three
projects within five days after execution. Details of the perfected contracts due for
submission are as follows:

Contractor Scope of Work Contract Amount

Repair of classroom damaged by typhoon
JTA Builders ₱ 576,220.00
Nona at Hinogbakan ES, Marihatag, SDS
Digos Constrak Corporation Expenses for the repair of 19 classrooms for 3,430,716.40
the three identified NHS (Carrascal,
JTA Builders 1,035,139.00
Felisberto Verano & Lingig NHS)
Total ₱5,042,075.40

17.4 The non-submission of perfected contracts and all pertinent documents by the Bids and
Awards Committee to COA Office impeded the timely review and evaluation of the
propriety of the contracts entered into by and between the DepEd and private
contractors. Moreover, the non-submission of bidding documents casts doubts on the
regularity of procurement process; thus, the most advantageous terms for the
government is not guaranteed.

17.5 The delay was attributed to the improper keeping and custody of contracts and technical
documents. It should be noted that the same deficiency was communicated to the
Management thru issuance of AOM No. 2016-005(’15) dated February 4, 2016.
Subsequently, Management submitted the contracts on February 24, 2016, however,
the Audit Team returned it for lack of some required documents.

17.6 It was recommended that the Department of Education direct the Bids and
Awards Committee to submit the perfected contracts and all its pertinent
supporting documents to the COA Office to facilitate technical review and
evaluation of the contracts. Ensure that complete documents are submitted and
duly labeled in accordance with the checklist and suggested template provided to
the BAC Secretariat on August 1, 2016.

38
B. Local Government Units (LGUs)

The results of audit of LDRRM funds disclosed the following observations:

Non-conformity with RA 10121

a) Ten LGUs failed to allocate funds for Local Disaster Risk Reduction and Management
Fund (LDRRMF) contrary to Section 21 of Republic Act (RA) No. 10121; thus, no DRRM
projects and programs of the concerned LGUs have been implemented.

Section 21 of RA No. 10121 provides:

“The present Local Calamity Fund shall henceforth be known as the Local Disaster
Risk Reduction and Management Fund (LDRRMF). Not less than five percent (5%) of
the estimated revenue from regular sources shall be set aside as the LDRRMF to
support disaster risk management activities such as, but not limited to, pre-disaster
preparedness programs including training, purchasing life-saving rescue equipment
supplies and medicines, for post- disaster activities, and for the payment of premiums
on calamity insurance. The LDRRMC shall monitor and evaluate the use and
disbursement of the LDRRMF based on the LDRRMP as incorporated in the local
development plans and annual work and financial plan. Upon the recommendation of
the LDRRMO and approval of the sanggunian concerned, the LDRRMC may transfer
the said fund to support disaster risk reduction work of other LDRRMCs which are
declared under state of calamity.

Below are the LGUs in the following regions which failed to allocate LDRRM Funds:

No. of
Region Amount
LGUs
CAR 3 -Not indicated-
Region II 1 -Not indicated-
Region III 1 -Not indicated-
Region IVA 2 ₱ 5,773,881.70
Region VII 1 3,056,764.70
Region VIII 1 -Not indicated-
Region XIII 1 -Not indicated-
TOTAL 10 ₱ 8,830,646.40

b) The Local Disaster Risk Reduction and Management (LDRRM) functions of 45 LGUs
were not efficiently and effectively discharged in accordance with the provisions of RA
No. 10121; thus, setting limits on the full attainment of the objectives of the appropriated
fund in the locality due to: (a) non-preparation of LDRRMP and (b) lack of mandatory
positions in the LDRRMO.

39
 Section 12 of RA 10121 enumerates the various functions of Local Disaster Risk
Reduction and Management Office (LDRRMO) which were not carried out by the
LGUs in the following regions:

Region No. of LGUs

CAR 5
Region I 1
Region II 3
Region III 4
Region IVB 2
Region V 1
Region VI 2
Region VII 22
Region VIII 1
Region XIII 4
TOTAL 45

c) There was no Local Disaster Risk Reduction and Management Office (LDRRMO)
created in 19 LGUs as required under Section 11 of RA No. 10121; thus, disaster risk
reduction and management activities and projects was not fully implemented and
monitored.

Section 11 of RA 10121 provides:

“Organization at the Local Government Level. - The existing Provincial, City, and
Municipal Disaster Coordinating Councils shall henceforth be known as the
Provincial, City, and Municipal Disaster Risk Reduction and Management Councils.
The Barangay Disaster Coordinating Councils shall cease to exist and its powers and
functions shall henceforth be assumed by the existing Barangay Development Councils
(BDCs) which shall serve as the LDRRMCs in every barangay. x x x”

The LGUs of the following regions did not organize their respective LDRRMO which
will be responsible for ensuring the protection and welfare of the communities during
disasters and emergencies:

No. of
Region
LGUs
CAR 1
Region I 3
Region III 4
Region IVA 1
Region IVB 2
Region V 1
Region VI 1
Region VII 2
Region X 1
Region XIII 1
NIR 2
TOTAL 19

40
d) Failure of 272 LGUs to a) properly utilize the appropriated LDRRMF in the amount of
₱1,018,488,755.91 and b) transfer the unexpended/unutilized/unobligated LDRRMF
balances in the total amount of ₱1,017,879,448.88 to the Special Trust Fund (STF) were
not in keeping with Section 21 of Republic Act (RA) No. 10121.

Section 21 par. 1 and 2 of RA No. 10121 itemized the programs for the proper
utilization of the NDRRMF and QRF.

Section 21 par. 3 of RA No. 10121 states that: “Unexpended LDRRMF shall accrue to
a special trust fund solely for the purpose of supporting disaster risk reduction and
management activities of the LDRRMCs within the next five (5) years xxx.”

The above-cited provisions were not carried out by 272 LGUs in the following regions:

No. of
Region Amount
LGUs
CAR 9 ₱ 13,349,055.62
Region I 36 104,325,100.81
Region II 9 115,168,913.54
Region III 16 95,806,154.54
Region IVA 37 577,113,772.37
Region IVB 9 4,962,690.32
Region V 24 136,499,521.94
Region VI 12 75,587,318.81
Region VII 34 291,076,258.29
Region VIII 24 95,822,962.35
Region IX 7 4,842,613.87
Region X 5 89,401,902.17
Region XIII 27 138,959,559.87
ARMM 12 21,635,175.12
NIR 11 271,817,205.17
TOTAL 272 ₱2,036,368,204.79

Non-conformity with COA Circular 2012-002

e) One hundred LGUs failed to prepare or submit the LDRRMFIP for the projects and
activities for disaster mitigation, prevention and preparedness as required under Section
5.1.2 of COA Circular 2012-002. Thus, time frames, sources of funds and expected output
was not explicitly defined.

Section 5.1.2 of the said Circular states that, “A LDRRMFIP for the DRRM program
shall be prepared annually. It shall present the 30% allocation for QRF in lump-sum
and the allocation for disaster mitigation, prevention and preparedness with details as
to projects and activities to be funded. The LDRRMFIP shall also include under a
separate caption, the list of projects and activities charged to the unexpended LDRRMF
of previous years.”

41
 The following table enumerates the number of LGUs per Region which failed to
prepare LDRRMFIP:

No. of
Region
LGUs
CAR 6
Region I 14
Region II 4
Region III 3
Region IVA 10
Region IVB 6
Region V 13
Region VI 6
Region VII 15
Region VIII 5
Region X 1
Region XII 1
Region XIII 13
NIR 3
TOTAL 100

f) Expenses for LDRRM activities, amounting to ₱19,560,613.00 were charged against the
QRF despite the absence of a declaration of state of calamity in 11 LGUs.

Section 5.1.3 of COA Circular 2012-002 states that, “The release and use of the
LDRRMF shall be supported by the following documents: a. Local Sanggunian
Resolution and the declaration of state of calamity for the QRF, b. LDRRMFIP for
projects and activities listed in the approved plan as incorporated in the local
development plan and annual work and financial plan.”

Below are the regions with LGUs which charged their expenses against the QRF
without declaration of state of calamity:

No. of
Region Amount
LGUs
Region I 1 ₱498,200.00
Region II 2 256,713.76
Region IVA 1 -Not indicated-
Region V 1 8,000,000.00
Region X 1 3,205,496.88
Region XIII 1 198,313.50
ARMM 2 1,393,310.23
NIR 2 6,008,578.63
TOTAL 11 ₱19,560,613.00

g) Two hundred fifty-six LGUs failed to a) prepare and timely submit themonthly report
on Sources and Utilization of Disaster Risk Reduction Management Fund (DRRMF) and
b) observe the accounting and reporting guidelines provided under Paragraph 5.1.5 of
COA Circular No. 2012-002 dated September 12, 2012 rendering the evaluation of
LDRRMF plan, accomplishments and fund utilization difficult.
42
 Section 5.1.5 of the COA Circular No. 2012-002 states that, “A Report on Sources and
Utilization of DRRMF shall be prepared and certified correct by the Local Accountant.
The LDRRMO shall submit the report on or before the 15th day after the end of each
month through the LDRRMC and Local Development Council (LDC) to the COA
Auditor of the LGU.”

The LGUs in the following regions failed to submit the required monthly reports:

Region No. of LGUs

NCR 1
CAR 5
Region I 19
Region II 19
Region III 16
Region IVA 38
Region IVB 12
Region V 23
Region VI 26
Region VII 27
Region VIII 19
Region IX 11
Region X 2
Region XII 2
Region XIII 20
ARMM 14
NIR 2
TOTAL 256

h) The unexpended/unutilized prior years’ balances of seven LGUs in the total amount of
₱89,203,246.49, were not included in the LDRRMFIP for programs/projects/activities
related to disaster management and prevention; thus, depriving the municipality’s
constituents of the benefits.

Section 5.1.15 of the COA Circular No. 2012-002 states that, “The LDRRMFIP shall
be reviewed and updated annually to include activities to be funded from the QRF and
DRRMF-MOOE of the previous years which were transferred to the Special Trust
Fund”

The LGUs in the following regions were not able to include the STF balance in their
LDRRMFIP:

No. of
Region Amount
LGUs
Region VII 1 ₱55,298,223.79
Region VIII 5 19,065,691.70
Region X 1 14,839,331.00
TOTAL 7 ₱ 89,203,246.49

43
 Non-conformity with DILG Memoranda

i) LDRRMF in the total amount of ₱119,276,926.80 was spent by 107 LGUs for activities
that are not disaster risk management related contrary to DILG Memorandum Circular
No. 2012-73 dated April 17, 2012.

DILG Memorandum Circular No. 2012-73 states that, “The LDRRMF is to be used for
disaster risk management activities, support to other affected LGUs and quick response
fund or stand-by fund for relief and recovery programs.”; thus,aforementioned
transactions of the LGUs in the following regions are considered irregular.

Region No. of LGUs Amount

CAR 13 ₱ 18,565,000.00
Region I 7 573,206.88
Region II 9 7,197,031.64
Region III 6 8,433,717.07
Region IVA 10 41,478,135.26
Region IVB 3 899,037.59
Region V 2 445,675.64
Region VI 13 7,352,792.69
Region VII 12 1,984,176.27
Region VIII 8 2,831,830.54
Region IX 3 2,015,563.19
Region X 2 10,713,460.00
Region XIII 11 7,269,282.37
ARMM 1 460,000.00
NIR 7 9,058,017.66
TOTAL 107 ₱119,276,926.80

j) For the above observations, it was recommended that the Local Chief Executives of the
concerned LGUs undertake the following activities:

a) comply with the statutory appropriation of not less than five percent of estimated
revenue from regular sources to obtain sufficient funds to carry out the disaster risk
management activities and attain the objective of RA 10121;

b) formulate a comprehensive and integrated LDRRMP in accordance with RA 10121

in close coordination with the local development councils as well as create
mandatory positions or designate employees to the LDRRMO to implement and
monitor LDRRM projects and activities;

c) organize a LDRRMO as required under Section 11 of RA No. 10121;

d) require the Chief Accountant to transfer the unexpended/unobligated balance to

STF as well as strictly comply with the the provisions of Section 21 of RA 10121 in
the proper utilization of the LDRRMF;

44
e) prepare a LDRRMFIP with the details of the funded projects and activities for
disaster mitigation, prevention and preparedness in the DRRM investment plan
pursuant to 5.1.2 COA Circular No. 2012-002 dated Sept 12, 2012;

f) refrain from charging expenses against QRF without resolution and declaration of
state of calamity as required under Section 5.1.3.1 of COA Circular 2012-002 dated
September 12, 2012;

g) require their concerned officials to prepare and submit a duly certified Report on
Sources and Utilization of LDRRMF on or before the 15th day after the end of each
month, in compliance with Section 5.1.5 of COA Circular No. 2012-002 dated
September 12, 2012;

h) include the utilization of the unexpended balance for DRRM, which is under the
Trust Liabilty – DRRM, in the LDRRMFIP for programs/projects/activities related
to disaster management and prevention; and

i) strictly abide with the provision of DILG Memorandum Circular No. 2012 -73 and
refrain from incurring and charging expenses not related to disaster risk reduction
management activities to DRRM fund.

45
 STATUS OF IMPLEMENTATION OF PRIOR YEARS’ AUDIT RECOMMENDATIONS

We have followed-up the actions taken by the agency to implement the prior years’ audit recommendations and the results of our validation
are as follows:

No. of Recommendations Status of Implementation

21 Fully Implemented
14 Partially Implemented
0 Not Implemented
35 Total

Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
1. The procurement by BFAR-RFOs of Consolidated
Fishing Gear/Paraphernalias (FGPs) to Report CY 2015
support the livelihood programs of p. 16
fisher folks in four out of five recipient
Regions affected by Typhoon Yolanda
were delayed and not in accordance
with the required specifications which
resulted in delayed distribution thereof
or non-acceptance by some
beneficiaries; thus, attainment of the
objective of the program to improve the
socio-economic condition of the target
beneficiaries slowed down.

It was recommended that the The targeted number of units for Partially
Management of BFAR-RFOs prioritize distribution in 2015 has been Implemented
the timely distribution of FGPs by completely distributed in CY 2016
coordinating with the concerned RFOs I, IV A and V.
46
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
Provincial folks and direct the OIC- As of December 31, 2016, BFAR
Provincial Fishery Officers to coordinate RFO VI was able to finished
with the LGUs to expedite the fabricating 654 units of fiberglass
transportation of the finished boats for fishing boats. Of the 654 units, only
distribution to its intended beneficiaries. 404 units were distributed to
beneficiaries while the remaining 250
units are still on hand subject for
polishing of boat hulls and availability
of transportation to haul the subject
fiberglass boats to the beneficiaries.

Of the 404 fiberglass fishing boats

distributed, management was able to
secure only 217 acknowledgement
receipts as of December 31, 2016. In
addition, management was able to
submit the master list of beneficiaries
of all the provinces in Region VI. The
Provincial Fisheries Officers are
tasked to secure from the LGUs the
remaining 187 acknowledgement
receipts.

47
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
2. Late release of fund, delayed Consolidated
implementation of programs, non- Report CY 2015
compliance of requirements and lack of p. 17
identified DRRM activities/projects
resulted in the underutilization of
DRRMF in the total amount of
₱594,983,487.00.
The following courses of actions were
recommended for the management of:

a. LWUA to facilitate the release of the The Area Operation is in the process Partially
unutilized funds to the intended water of preparing report. Implemented and
districts to ensure that the projects are reiterated 2016
immediately carried out and fully AAR of LWUA
implemented;

b. DA to require the Officers-in-Charge Justification was submitted with the Fully

in the implementation of Typhoon corresponding work and financial Implemented
Glenda rehabilitation plan/program plan.
to prepare plan of activities for the
implementation of various projects
and comply the documentary
requirements necessary for the
payment of financial assistance;

c. DSWD to coordinate with the Monthly monitoring and validation is Partially Status of CSAP as
concerned LGUs in the payment of being undertaken by the DSWD-FO Implemented of December 31,
LGUs counterpart and submission of Project Management Teams (PMTs) 2016:
all documentary requirements for to ensure timely completion of the a. Completed -
shelter projects. 63,746,
48
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
shelter assistance before funds are b. Ongoing -
downloaded to them; and 6,415,
c. Not Yet Started
-13,030.

d. DOH to improve their risk reduction Management agreed to improve their Partially Still in process of
management plans, the risk reduction management plans, the Implemented validation with
implementation of the corresponding corresponding activities’ HEMB personnel
programs/activities, and fund implementation and fund utilizations
utilizations taking into consideration taking into consideration Philippine
the NDRRMP 2011-2028. National Disaster Risk Reduction and
Management Plan 2011-2028 and fast
track implementation of the program
activities.

3. A sound relief goods inventory system Consolidated

was not established at the DSWD Report CY 2015
resulting in the spoilage of an estimated p. 19
₱11.896 million worth of sardines.
Moreover, erroneous recording of such
inventory under Financial Assistance to
NGAs instead of Welfare Goods for
Distribution Inventory resulted in the
misstatement in both accounts.
It was recommended that the DSWD
Secretary direct the Property
Management Division to properly
comply with the following:

49
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
a. Set clear/written guidelines (or NROO practices a return policy Fully
quality control procedures) wherein upon discovery of Implemented
concerning the inspection, acceptance damaged/spoiled items, the
and remedies in case of discovery of Department, through its Procurement
unwanted items like spoiled, Service immediately coordinates with
tampered and/or dented goods; its supplier (in this case, the Fortune
Group Corporation) for the 100%
replacement of the goods.

Moreover, NROO has drafted a

Manual of Operations which aims to
consolidate best practices,
standardize, and provide
guidelines/systems/processes on the
Department’s disaster relief
operations specifically on the
management of donations, logistics,
production and warehouse, which
includes quality control standard’s
embedded in every process.

The Writeshop for the Finalization of

the Manual of Operations was held in
Mandaluyong City last 13th through
16th of June 2016 and was attended by
NROO, DSWD FOs and CO staff.

In 2016, the NROO conducted several

capacity building activities attended
by participants from all Field Offices,
NROO, VDRC, DReAMB, PS and
50
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
AS to ensure that the best practices are
being adapted.

b. Monitor strictly the movement of The NROO has strengthened its Fully
goods stored at the warehouse so that internal control procedures/ Implemented
those nearing their expiry date may be mechanisms on warehouse
disposed ahead than those with late management for proper monitoring by
expiry dates; adhering to principles of First In, First
Out (FIFO), First Expire, First Out
c. Follow-up and monitor the (FEFO); and other good and Fully
replacement of the expired goods; established industry practices in Implemented
Inventory Management.
d. Monitor closely the storage
conditions of the warehouse in In its effort to continuously improve Fully
relation to the required storage its operation and have a reliable and Implemented
conditions of the relief goods; accurate inventory and monitoring of
relief goods which will result to more
efficient delivery of goods to disaster
victims, the Department of Social
Welfare and Development developed
the Relief Goods Inventory
Management Service.

e. Look into the causes of the spoilage, Identified causes of spoilage and Fully
leakage or bulging of the subject entered into agreement with the Implemented
sardines and make the necessary supplier for the replacement of
action (e.g. storage conditions, damaged goods.
blacklisting of unscrupulous
suppliers) to avoid the same incidents
from happening again;

51
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
f. Conduct investigation on the alleged Management negotiated for the Fully
tampering of expiry dates and file return/replacement of all spoiled Implemented
appropriate action against the Fortune sardines and the supplier complied,
Group (supplier), if warranted, and; thus no further actions were taken.
4. QRF in the aggregate amount of Consolidated
₱128,626,827.51 was utilized for fund Report CY 2015
transfer for repairs and reconstruction p. 20
of DND and Bureaus’ facilities which
are not in accordance with the purposes
of QRF, and as transfer of funds to
Implementing Agencies with huge
unliquidated balances, resulting in the
slow utilization of the funds and non-
liquidation thereof and delayed
completion of disaster-related projects,
prejudicial to the calamity victims who
are the intended beneficiaries.
Moreover, some items procured out of
QRF were priced higher or excessive
by at least ₱1,967,062.44; thus, are
disadvantageous and likewise rendered
unreasonable the procurements from
QRF.

It was recommended that the DND

Management:

a. strictly implement the provisions of Memo dated 17 June 2016 was issued Partially Reiterated in 2016
the GAA on the utilization of QRF; to Executive Director, NDRRMC Implemented AAR of DND
directing, among others, to initiate the

52
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
b. refrain from granting additional fund review of existing policies on QRF Fully
transfers to IAs with outstanding utilization, not only of DND and Implemented
balances and closely monitor the OCD, but for all departments /
liquidation of fund transfers so that agencies with QRF allocations; and
the purpose/s for which the fund propose necessary amendments if any.
transfers are made are immediately
carried out and fully implemented; During the DND Wide Program
Performance and Budget Execution
c. ensure that procurement out of QRF Review FY 2015 and 1st Semester FY Partially
are strictly in accordance with RA 2016 conducted on 23 February 2016 Implemented
9184, particularly that for single and 22 & 30 Aug 2016, SND directed
calculated bidders; the ABC is the settlement of all outstanding cash
reasonable in amount by taking into advances and fund transfers including
consideration various factors in QRF.
setting up the ABC pursuant to the
Procurement Manual and hold Likewise, management endeavored to
concerned personnel administratively limit or refrain from granting
liable for failure to set reasonable additional fund transfers to IAs with
ABCs for the projects; and outstanding balances. In FY 2016,
QRF transfers were limited to only
d. refund the overpriced amount of one project amounting to ₱386,840.00 Partially
₱1,967.062.44. for unobligated amount for DND- Implemented
QRF Programs and Projects specified
under the POE of DND-QRF FY 2015
for Typhoon Lando of PAF.

Department Order No. 162 dated 13

May 2016 was issued creating Inquiry
Committee on the Procurement of
Bottled Water from PJ Cruz
Construction and Trading and Other
53
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
QRF Procurement Projects with ABC
issues. Inquiry Committee Report was
submitted to SND on 11 Oct 2016.

5. The QRF of DepEd amounting to Consolidated

₱3,345,689.62 had lapsed due to Report CY 2015
incorrect assessment/validation of p. 25
school site proposed for
relocation/construction of classrooms
and lack of coordination between the
Budget Section and Physical Facilities;
thus, the needs of recipient schools
experiencing shortage of facilities
caused by Typhoon Pablo was not
addressed.

It was recommended that DepEd enjoin

the Division PFC/Engineer to strengthen
the monitoring of project implementation
and the Budget Officer to monitor the
efficient utilization of allotments
received in line with the government’s
policy to deliver quality goods and
services to the public through efficient
and effective spending of public funds
and timely implementation of programs
and projects.

54
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
6. Five infrastructure projects totaling Consolidated
₱6,368,782,496.00 implemented by the Report CY 2014
Department of Social Welfare and p.15
Development (DSWD), Department of
the Interior and Local Government
(DILG) and Philippine Institute of
Volcanology and Seismology
(Phivolcs) were not completed nor
started within the specific contract
timedue to delayed release of funds,
non-coordination and monitoring; thus,
deprived the public of the immediate
and maximum use of the said projects.

The following courses of actions were

recommended:

a. DILG to closely monitor the project Partially

implementation and require the Implemented
concerned LGUs to hasten the
completion of subprojects in order to
facilitate the rehabilitation and
returning to normalcy of government
services and economic activities in
their respective areas;

b. PhiVolcs to prepare a written criteria The copy of Final document Fully

for the selection of new sites for criteria for site selection have been Implemented
deployment of new landslide sensor furnished to COA.
system to serve as basis for
scoring/evaluation of all surveys made
55
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
with the end-view to hasten and Sensor systems were installed in 38 of
facilitate the identification of possible 40 sites by June 2016, and in the
sites and coordinate/collaborate remaining two replacement sites by
effectively with University of the November 2016.
Philippines (UP) to fast-track the
manufacture and delivery of needed
sensors and data loggers to ensure that
the newly-deployed and installed
sensors will be able to communicate
with the PhiVolcs data computers and
evaluate results.

7. The lack of appropriate work program Consolidated

of DILG that is responsive to disaster Report CY 2014
risk reduction management and climate p. 16
change adaptation (DRRM/CCA) and
the lack of related coordinative
activities among the implementing
offices resulted in the underutilization
of Disaster Risk Reduction and
Management Funds (DRRMF) with
18.82 percent utilization rate and 9.03
per cent absorptive capacity because
the road map for Disaster Preparedness
has not been presented/developed by
the DILG as vice chairperson of the
National Disaster Risk Reduction
Management Council (NDRRMC).

Regional Implementation

56
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
The failure to evaluate properly the
project design on debris management
under Task Force Pablo of the
Proponent LGU in Region XI resulted
in funded projects with unattainable
implementation scheme.

We recommended that Management

present:

a. Disaster Preparedness framework - The National Disaster Preparedness Partially The NDPP and
envisioned in the NDRRMC Plan as Plan (NDPP) and Minimum Standards Implemented Standards are set
the road map for “Enhancing LGU was drafted and approved in July 2015 for printing and
Capacity on DRRM-CCA” and, by the NDRRMC. The NDPP sets distribution on the
framework for the members of the first semester of
Preparedness Thematic Are and sets FY 2016.
“Coordination Mechanism and Ways
of Working for Disaster
Preparedness”.

b. Requires the PMO to develop a work - An operations Manual is also being Partially The operation
plan responsive to DRRM-CCA drafted to strengthen the internal Implemented manual is for
(preparedness) with coordinated systems and organization of the finalization and
activities of the implementing offices Outcome group to improve approval.
and the regions. implementation.
Further, we recommended that
management designate a team within
Project Management Office (PMO), that
will coordinate with LGA and other
DILG Bureaus and which shall be
57
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
responsible for facilitation, assessment,
consolidation and monitoring of all
matters relating to the DRRM-CCA Plan

8. Only ₱4,620,654,581.86 or 62 percent Consolidated

of the ₱7,453,732,576.08 QRF Report CY 2014
transferred to various implementing p. 22
agencies was utilized due to inadequate
planning, delayed release of SARO and
downloading to field offices,
incompatibility with the mandate of the
agency and delay in procurement
process resulting in wastage of
government resources, delay in the
implementation of projects, depriving
the communities with the much needed
rehabilitation.

The following courses of actions were

recommended:

a. The officials of the concerned source Fully

agencies closely monitor the Implemented
utilization of fund transfers so that the
purpose for which the transfers are
made are immediately carried out and
fully implemented;

b. The concerned officials of DA ensure  Conducted site visitation and Fully

that funds released are fully utilized coordinate with the LGU and Implemented
to benefit the typhoon affected beneficiaries.
58
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
farmers to assist them in  Led the casual monitoring of
rehabilitating their farms and recover milkfish input assistance project.
their losses;  Ensured compliance of the audit
recommendation by fully utilizing
the funds released to them.

c. The concerned officials of OCD  Formulation of an Annual Plan and Fully

make representation with the DBM, Budget (APB) backed-up by an Implemented
through the DND, for the Annual Procurement Plan (APP)
reassessment of the allocation of the with its corresponding Procurement
QRF taking into account the Plan and Management Program
functions of each of the implementing (PPMP);
agencies of the NDRRM, as defined  Crafted and issued Memorandum
under RA No. 10121, with the view No. 803, s.2014 with subject:
of providing only what is necessary in Management and Utilization of QRF
the performance of their functions, allocation which rescinded the OCD
the OCD in particular to ensure that Memo No. 505,s.2012 with subject:
the government resources are utilized Guidelines on the use of QRF;
to the optimum level to the advantage  Procurement and prepositioning of
of those victimized by calamities; Non-Food Items (NFIs) even before
the occurrence of calamities
ensuring that the much needed
assistance will be provided
immediately to calamity-stricken
areas.
 Of the noted unutilized QRF balance
of P923,153,721.00, the amount of
P507.779M representing the
unutilized QRF for 2014 has been
fully obligated for the procurement
of NFIs through the Philippine
59
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
International Trading Corporation
(PITC) and Procurement Service-
Department of Budget and
Management (PS-DBM) . Further,
of the FY-2015 QRF of P530M,
P104M has already been utilized for
disaster management operations and
the remaining balance is earmarked
for the procurement of additional
NFIs and as reserve for
contingencies.

d. The concerned officials of DSWD  QRT at the DSWD-CO and levels Fully
institute procedures to expedite the organized and deployed to LGUs to Implemented
release/distribution of ESA to the assist in the payout and/or project
prioritized recipients and to implementation.
coordinate with the OSEC for the  Forged a tri- partite agreement with
immediate release of the additional the DILG and Ugnayan ng Bayan at
ESA to pay the remaining qualified Simbahan (UBAS) for the
beneficiaries of the financial monitoring and validation of ESA
assistance due them; complaints/grievance for
appropriate action.

e. The concerned officials of DSWD  DSWD officials conducted meetings Fully

impose strictly the stipulations in the with the beneficiaries to comply Implemented
MOA regarding committed with the stipulations on the
responsibilities of all the parties Memorandum of Agreement.
involved in the implementation of the
CSAP to achieve fully the benefits

60
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
and operating objectives of the
program; and

f. The concerned officials of DepEd  Most of the budget was used to fund Partially
ensure the optimum utilization of the repair and rehabilitation of Implemented
funds received through timely school buildings damaged by
releases of SARO to operating units typhoons Amang, Lando, and Nona.
and consider releasing sub-allotment There is a need for the DepEd
order on the basis of cost allocation engineers to conduct actual
per damaged school to the recipient validation of damages to determine
operating units as their authority to the extent of repair/rehabilitation
implement the repairs, rehabilitation, works or replacement needed by the
or replacement of damaged school schools. This process takes some
buildings and facilities affected by time and is the basis for the
calamities for the efficient utilization allocation of funds under QRF.
and completion of projects to  On the late releases of sub-allotment
normalize as quickly as possible the to regions/divisions: A large share of
situation of communities needing the funds downloaded in the last
much of the availability of learning quarter were for the programs
facilities. wherein DepEd requires the
submission of Resolution to Award
prior to the downloading of funds
(i.e. BEFF and QRF). The
Department has adopted this policy
to ensure that the allotments
downloaded to the field units are
fully obligated.
9. Donations in the aggregate amount of Consolidated
P850,228,982.41, which were received Report CY 2014
by OCD and DSWD from foreign and p. 25
local donors were not utilized in full,
61
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
depriving the calamity victims of the
much needed assistance to alleviate
their difficulties.

The following courses of actions were

recommended:

a. The concerned officials of OCD to:

 ensure that donations are utilized Partially

for the intended purpose in a Implemented
timely manner and facilitate the
early determination of the actual
number of affected victims and
their immediate needs for the
purpose of ensuring the
improvement of their living
conditions;

 revisit DND Memorandum Order  Conducted an OCD inter-division Fully

No. 1 and NDCC Memorandum and NDRRMC member agencies Implemented
Order No. 13 with the end view of series of meetings to discuss on the
aligning them with the provisions recommended actions related to the
of RA 10121 for an effective management of donated funds and
administration of cash donations, the crafting of an updated guidelines
with focus on the concerns of the in its utilization and management.
calamity victims;

 formulate a comprehensive plan,  Relatedly, the OCD has formed a Partially For decision and
to be recommended to NDRRMC, Technical Working Group (TWG) Implemented approval of the
which contains the specific rulings tasked to review the existing rules council.
62
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
and procedures on how to utilize and guidelines on the utilization of
the donations in accordance with donated funds. To date, the TWG
the functions of each member of has already finished its review and
the council, i.e. DSWD for crafted new set of guidelines to be
distribution of relief good, DPWH presented to the NDRRMC for its
for repair and rehabilitation of approval. The said guidelines will
infrastructure; and ensure timely and efficient
utilization of the donated funds as
well as focus on early response and
recovery of disaster affected areas,
copy of which is hereto attached.

b. The concerned officials of OCD and  OCD’s compliance with COA Partially Remittance was
DSWD remit to the Bureau of Circular No. 2014-002 dated April Implemented held in abeyance
Treasury the unutilized balance after 15, 2014 was held in abeyance due in anticipation of
the purpose has been served to the ongoing assessment of the approval of the
recovery and rehabilitation activities guidelines which
of areas affected by major disasters would authorize
such as Typhoon Yolanda, Bohol OCD to devote the
earthquake and armed conflicts in unexpended
Zamboanga City as well as ongoing balances of the
review and updating the guidelines donations to fully
in the utilization of donated funds. rehabilitate the
However, OCD is already reviewing area affected by
the status of the donated funds and the calamity.
will either remit to the Bureau of
Treasury or return to the donors the
unutilized funds in compliance with
the above-cited COA Circular No
2014-002 dated April 15, 2014.

63
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
10. The procurement and acceptance by Consolidated
DSWD of relief goods was made Report CY 2014
without considering the absorptive p. 26
capacity and condition of the
warehousing facilities and personnel,
available stocks, shelf life or expiry
dates and the actual needs of Field
Offices (FOs) resulting in undistributed
and expired or about to expire relief
goods amounting to P5,115,200.00.

It was recommended and the Secretary

agreed to direct the concerned DSWD
officials to:

a. prioritize and fast track the Construction of additional warehouse Fully

distribution of the remaining relief at NROC and other FOs were Implemented
goods especially those food items inaugurated in CY 2016.
soon to expire, otherwise, these will
be damaged/spoiled that would result FO VII request for additional
to wastage of government funds; warehouse personnel was approved by
the HRDB and currently on process at
b. transfer immediately the relief food FMS. Fully
items to any other storage area Implemented
suitable for storing perishable goods Enhancement was already
in order to avoid early deterioration finished and waiting for further
and spoilage of the food items that instruction from IMB on the
may likewise result in wastage of effectivity of its implementation.
government funds;

64
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
c. consider, among others, the following For review of guidelines and Fully
factors in its future procurement and submission of recommendation to the Implemented
acceptance of relief goods to meet the Secretary.
objective of the procurement and
prevent overstocking and/or 1) To enhance the mechanized
expiration: (i) absorptive capacity system at NROC if found
and condition of the warehousing necessary after the dry run
facility and personnel to 2) To review the quantity
accommodate procured items; (ii) prepositioned goods in the FOs
availability of goods prior to the nearest to NROO considering the
procurement of additional relief items enhanced capacity of its
based on the needs of the disaster repacking and storage system.
affected FOs or let the DSWD FOs do 3) Follow through action on the
their own procurement and make request for hiring additional
them responsible and accountable for warehouse personnel.
the same; and (iii) shelf-life or expiry 4) Follow through action on the
date of goods to be procured and implementation of RGIMS.
distributed to recipient beneficiaries;

d. observe proper procurement planning Due to the short shelf life, noodles will Fully
and monitoring of relief goods for the no longer be procured and included in Implemented
procurement and distribution to the the FFPs composition. Also,
intended beneficiaries that would aid improvements on the warehousing
in making decision as to the necessity facilities are already being
of procuring additional relief goods undertaken.
during disaster relief operations so
that huge balances of stocks after
each relief operation could be
avoided and to ensure efficient and
effective delivery of the relief goods;

65
 Reason for
Status of
Observations and Recommendations Reference Management Action Partial/Non
Implementation
Implementation
e. consider reducing the inventory level Fully
of relief goods commensurate with Implemented
the actual requirements of the FOs
and avoid placing POs after the
critical period of relief operation to
avoid huge balances of inventories;
and

f. Assign additional personnel during Fully

relief operations to properly and Implemented
collectively store/pile the goods
received from various sources to
prevent its immediate
spoilage/deterioration and to
facilitate efficient monitoring and
reporting of the status of relief
operation.

66
 Acknowledgement

We wish to express our appreciation to the Auditors of various national and local government
agencies that provided the financial data and observations on DRRM management in their respective
audited agencies and to the management and staff of the Office of Civil Defense for their cooperation
and assistance.

We request that appropriate actions be taken on the various audit recommendations consolidated
in this Report.

67
 ANNEX A

NATIONAL GOVERNMENT SECTOR

STATUS OF FUND PER GAA
As of December 31, 2016

Beginning Balance, 12/31/2015

RECEIPTS Unutilized Balance,
[a] Utilization
Agency TOTAL 12/31/2016
[d] (a-d) or (c-d)
Amount [e]
Reference No. Amount Reference
[c]
Prior Years
BMB-E-15-0011236 1,971,422.42 1,971,422.42 1,971,422.42
BMB-E-15-0011237 101,014,880.00 101,014,880.00 101,014,880.00
BMB-E-15-0011238 250.00 250.00 250.00
BMB-E-15-0011239 3,555,372.96 3,555,372.96 3,555,372.96
Department of Agriculture
BMB-E-15-0011240 14,273,359.00 14,273,359.00 14,273,359.00
NCA-BMB-E-15-0009280 33,684.04 33,684.04 33,684.04
SARO-BMB-E-15-0006226 2,550,152.55 2,550,152.55 2,550,152.55
BMB-E-15-0011231 554,939.11 554,939.11 554,939.11 -
Prior Year Balances 2,051,316.25 2,051,316.25 1,612,319.76 438,996.49
A-15-0003573 135,455,760.00 135,455,760.00 109,028,445.89 26,427,314.11
A-15-0021674 243,194,000.00 243,194,000.00 2,431,940.00 240,762,060.00
A-15-0001791 5,864,277.34 5,864,277.34 5,864,277.34
Department of Public Works and Highways
A-15-0002871 15,611,590.28 15,611,590.28 15,611,590.28
A-15-0008102 15,179,725.08 15,179,725.08 15,179,725.08
A-15-0023067 177,135,796.68 177,135,796.68 177,135,796.68 -
A-15-0028338 237,901,298.60 237,901,298.60 237,901,298.60 -
NCA-BMB-B-15-0011142 142,113,643.82 142,113,643.82 117,848,925.66 24,264,718.16
NCA-BMB-B-15-0011085 100,479,741.00 100,479,741.00 76,998,868.19 23,480,872.81
Department of Social Welfare and Development SARO No. BMB-B-15-0004886 90,964,609.00 90,964,609.00 82,443,105.96 8,521,503.04
SARO No. BMB-B-15-0017256 123,367,476.00 123,367,476.00 118,945,120.00 4,422,356.00
SARO No. BMB-B-15-0019326 329,543,298.48 329,543,298.48 322,041,033.62 7,502,264.86
DOST (ASTI) SARO-BMB-E-15-0012026 72,000.00 72,000.00 72,000.00 -
Department of Energy (NEA) NCA-BMB-C-16-0004382 803,980,000.00 803,980,000.00 562,508,499.40 241,471,500.60
TOTAL 2,131,831,497.33 415,037,095.28 2,546,868,592.61 1,809,522,292.87 737,346,299.74
CY 2016 Receipts
A-16-0022958 54,094,732.89 54,094,732.89 54,094,732.89 -
A-16-0025187 6,420,567.21 6,420,567.21 6,420,567.21 -
DPWH
A-16-0028732 28,488,428.37 28,488,428.37 28,488,428.37 -
A-16-0031678 92,423,000.00 92,423,000.00 14,035,497.76 78,387,502.24

TOTAL - 181,426,728.47 181,426,728.47 103,039,226.23 78,387,502.24

GRAND TOTAL 2,131,831,497.33 596,463,823.75 2,728,295,321.08 1,912,561,519.10 815,733,801.98
 ANNEX A
NATIONAL GOVERNMENT SECTOR
STATUS OF QUICK RESPONSE FUND
As of December 31, 2016
AMOUNT TRANSFERRED TO OTHER AGENCIES/ UNUTILIZED BALANCE,
TOTAL
RECEIPTS UTILIZATION LGUs/GOCCs 12/31/16
AGENCY NAME Reference No. (a+b)
Beginning Balance, 12/31/2015 [b] [d] Name of Amount (c-d-e)
[c] Purpose
[a] Agency [e] [f]
Prior Years
Department of National
408,924,284.51 408,924,284.51 15,039,410.00 82,637,715.28 311,247,159.23
Defense
Office of Civil Defense 465,998,282.74 465,998,282.74 33,120,745.94 432,275,987.00 601,549.80

Department of Transportation
1,758,462,737.35 1,758,462,737.35 BTr reversion 758,462,737.35 1,000,000,000.00
and Communication

Department of Public Works

792,363,785.93 792,363,785.93 129,940,579.03 662,423,206.90
and Highways
Department of Education 874,325,929.81 874,325,929.81 862,617,984.80 11,707,945.01
DOH 489,283,265.75 489,283,265.75 489,283,265.75
DA 500,000,000.00 500,000,000.00 500,000,000.00
NIA 213,536,741.93 213,536,741.93 213,536,741.93
DSWD 137,199,166.43 137,199,166.43 131,561,281.83 5,637,884.60
TOTAL 5,640,094,194.45 - 4,789,358,286.09 1,172,280,001.60 1,273,376,439.63 2,445,656,441.23 3,194,437,753.22
CY 2015
DA E-16-0016335 465,090,000.00 465,090,000.00 465,090,000.00
B-16-0009991 662,500,000.00 662,500,000.00 580,153,911.01 82,346,088.99
B-16-0011767 842,500,000.00 842,500,000.00 697,248,080.11 145,251,919.89
B-16-0017108 842,500,000.00 842,500,000.00 763,173,594.47 79,326,405.53
Department of Social Welfare B-16-0023382 662,500,000.00 662,500,000.00 604,563,818.51 57,936,181.49
and Development B-16-0029431 662,500,000.00 662,500,000.00 634,151,454.55 28,348,545.45
B-16-0030615 662,500,000.00 662,500,000.00 227,076,484.70 435,423,515.30
B-16-0037698 662,500,000.00 662,500,000.00 - 662,500,000.00
GAA 2016 RA 10717 1,325,000,000.00 1,325,000,000.00 1,173,864,948.37 151,135,051.63
Department of Education GAA 2016 RA 10717 1,000,000,000.00 1,000,000,000.00 956,564,657.91 43,435,342.09
DOH GAA 2016 RA 10717 510,000,000.00 510,000,000.00 12,555,203.47 4,559,000.00 492,885,796.53
OCD GAA 2016 RA 10717 530,000,000.00 530,000,000.00 118,854,080.32 411,145,919.68
DOTr GAA 2016 RA 10717 125,000,000.00 125,000,000.00 125,000,000.00
DPWH GAA 2016 RA 10717 1,300,000,000.00 1,300,000,000.00 367,569,908.86 932,430,091.14

TOTAL - 10,252,590,000.00 10,252,590,000.00 6,135,776,142.28 4,559,000.00 6,140,335,142.28 4,112,254,857.72

GRAND TOTAL 5,640,094,194.45 10,252,590,000.00 15,041,948,286.09 7,308,056,143.88 - - 1,277,935,439.63 8,585,991,583.51 7,306,692,610.94
 ANNEX A

NATIONAL GOVERNMENT SECTOR

STATUS OF FUND FOR YOLANDA REHABILITATION AND RECONSTRUCTION PROGRAM
As of December 31, 2016

RECEIPTS Unutilized Balance,

Utilization 12/31/2015
Agency TOTAL
[d] (a-d) or (c-d)
Beginning Balance, 12/31/2015 Amount [e]
Reference
[a] [c]
Prior Years

TOTAL - - - - -
CY 2016 Receipts
E-16-0034866 54,115,520.00 54,115,520.00 54,115,520.00
E-16-0034867 7,600,000.00 7,600,000.00 7,600,000.00
Department of Agriculture E-16-0034870 201,557,020.00 201,557,020.00 176,417,661.89 25,139,358.11
E-16-0034872 793,085,000.00 793,085,000.00 793,085,000.00
E-16-0034868 345,441,500.00 345,441,500.00 345,441,500.00
- A-16-0034434 750,001,227.00 750,001,227.00 750,001,227.00
A-16-0034437 9,382,458.00 9,382,458.00 9,382,458.00
Department of Trade and Industry A-16-0034439 87,161,772.00 87,161,772.00 87,161,772.00
A-16-0034440 2,112,900.00 2,112,900.00 2,112,900.00
A-16-0034435 4,401,000.00 4,401,000.00 4,401,000.00
Philippine Coast Guard A-16-0028779 15,426,918.00 15,426,918.00 15,426,918.00
- -
TOTAL 2,270,285,315.00 2,270,285,315.00 176,417,661.89 2,093,867,653.11
 ANNEX A

NATIONAL GOVERNMENT SECTOR

STATUS OF CASH DONATIONS
(Received form Foreign/Local/CSOs)
As of December 31, 2016

TOTAL UNUTILIZED BALANCE,

Beginning Balance, 12/31/2015 Receipts DONATIONS UTILIZATION 12/31/16
Agency
[a] [b] (a+b) [d] (c-d)
[c] [e]
[a]
Office of Civil Defense 385,133,793.69 880,313.19 386,014,106.88 325,754,314.57 60,259,792.31
Department of Social Welfare and
164,404,937.12 1,002,063,779.50 1,166,468,716.62 1,145,516,153.39 20,952,563.23
Development
TOTAL 549,538,730.81 1,002,944,092.69 1,552,482,823.50 1,471,270,467.96 81,212,355.54
CY 2016
Department of Social Welfare and
97,348,206.38 97,348,206.38 1,919,590.49 95,428,615.89
Development
TOTAL - 97,348,206.38 97,348,206.38 1,919,590.49 95,428,615.89
GRAND TOTAL 549,538,730.81 1,100,292,299.07 1,649,831,029.88 1,473,190,058.45 176,640,971.43
Annex B