P8.6B in DND funds on hold amid AFP corruption issue

The government is withholding some P8.6 billion in Department of National Defense (DND) funds to shield it from possible diversion in light of alleged corruption within the Armed Forces of the Philippines (AFP). Budget Secretary Florencio Abad said the amount is part of the DND’s P68.85 billion total personnel services allotment and represents savings from unfilled or vacated uniformed and non-uniformed positions. He said the government will release only funds for filled uniformed and non-uniformed positions in the DND. He said in the past, “savings" from unfilled or vacated positions in the Armed Forces were diverted to other uses because the personnel services (PS) allotments had been released in full. “Now, the national government will release PS allotments only for filled positions, or an estimated 80% of all positions. For 2011, some P8.602 billion has been withheld and shielded from possible diversion," Abad said in a statement. The 2011 Staffing Summary indicates that there are 135,699 uniformed and non-uniformed positions in the AFP. Abad said an updated report of the roster of uniformed and non-uniformed personnel of the AFP should now be submitted by the DND to the Department of Budget and Management (DBM) for a precise picture of real funding requirements. Rabusa exposé He said this is one of the four reforms the DBM will implement to prevent diversion and misuse of funds as revealed by retired military budget officer Lt. Col. George Rabusa before a Senate investigation last week. “The revelations of former Lt. Col. George Rabusa on the supposed diversion and misuse of national defense funds compels us to go deeper into the disbursement and procurement practices of the defense establishment," said Abad. He said the Aquino administration will take advantage of the opportunity to escalate reforms in the utilization of DND funds. “Even as we have already established reforms and safeguards, we cannot afford to be complacent. We will shine daylight into how the defense establishment spends the people’s money and eliminate all possible openings for these rackets," he said. He said in the past, the “conversion" of maintenance and other operating expenses (MOOE) and capital outlay (CO) allotments of the AFP and the “certification" of expenditures without supporting documents were made possible with poor internal control. Abad said steps are currently being considered, in consultation with Defense Secretary Voltaire Gazmin, to counter the practices by standardizing MOOE and CO requirements of military camps and make this information available to them. He said this is similar to what has been done in the case of the Philippine National Police, where the MOOE has been allocated on a police-per-capita basis of P1,000 per month. Abad said already the MOOE of agencies attached to the AFP General Headquarters—such as the Philippine Military Academy, Presidential Security Group and AFP Medical Center —are being released directly to them. He said “conversion" and “certification" practices had also thrived because, in the past, the DND enjoyed the release of allotments even without submitting accountability reports. He cited the recently-terminated Kalayaan Barangay Program, where only the names and amounts of projects, without supporting documents, were submitted. No report, no release To address this, technical visits have been made by DBM to verify budgetary accounts, validate the status of programs, projects and activities and instruct the agency’s finance group on how to comply with DBM reportorial requirements. “This has already been emphasized to them: no report, no release," Abad said, adding that the DND and the AFP will undergo agency performance review. He also said additional notice of cash allocation (NCA) releases will only be made based on the DND’s cash program and bank report of NCA balances. In the past, additional NCAs had been released even without reports on the utilization and disbursement of funds, Abad said. He said accountability reports of all agencies, including the DND and AFP, will be published on the DBM website. To further ensure that procurement will not be disadvantageous to the public coffers, DND and AFP, like all other agencies, are being encouraged to procure all their common supplies and equipment from the Procurement Service, he said. “In fact, we are considering the issuance of a directive requiring the purchase of these common supplies and equipment from the Procurement Service," Abad said. He said purchasing the common supplies and equipment from the Procurement Service will be advantageous because the agencies will not need to go through bidding and the supplies and equipment can be purchased at much lower cost, given the Procurement Service’s market power. Abad also said that “national security" could not be used as a generalized reason to sidestep the Aquino government’s transparency and accountability thrust. “Even the military has to follow standards of daylight. Unless there are valid national security concerns, there will be no special treatment when it comes to the prudent and judicious management of the people’s funds," he stressed. - KBK, GMANews.TV