Press Release
November 7, 2019

'Pasa-load' procurement creates artificial spending, delays projects worth billions

Government should end the scourge of "artificial spending" by preventing the transfer of allotments from one agency to another in order to cover up the failure to spend.

Ang nangyayari kasi ngayon, para lang masabi na "obligated" na ang allotment ay pinapasa ito sa ibang ahensya.

Ginagawa ito upang maipagmalaki na obligated na ang isang pondo, at hindi na ma-revert back sa Treasury.

But the result is that funds are not spent, but are merely parked in another agency. This subverts the very essence of cash budgeting, which seeks to accelerate disbursement. This creates the illusion of money spent when what happened was the budgetary equivalent of passing the buck.

Halimbawa, kung mayroong bibilhin sana ang AFP or PNP na kagamitan, kaysa i-bid kaagad ay ipinapasa sa Procurement Service ng DBM (PS-DBM) ang responsibilidad sa procurement.

In the books of the AFP or PNP, the funds have been obligated, when in reality, they have not been.

Ganoon din ang mga pondong inilaan sa DOTR. Ipapa-subcontract ang procurement. And in the report card, that money has been marked as obligated.

One favorite repository of parked allotments is the Philippine International Trading Corp.

Ang tanong: Ano ang competence ng mga ahensyang ito to, say, conduct a due diligence-compliant procurement of highly-specialized goods like trains, ships, planes and automobiles?

Another practice in previous years was for a department, like the DSWD, suffering from budgetary indigestion for having more than what it can chew, transferring funds to other departments.

But this transfer of obligational authority to outsource procurement has not expedited the purchase of goods and services, according to COA itself.

The PNP once engaged the services of the PITC to procure equipment amounting to P1.35 billion, but managed to deliver only P137.5 million worth of purchases by end of last year, or 1/10th of the amount.

As of December 2018, the PNP still has to collect about P5.08 billion worth of projects from PS-DBM intended for the procurement of common-use supplies, materials and various equipment, military and police supplies, and municipal police stations.

The COA 2018 audit report for PITC noted that the corporation has received about P30.63 billion worth of fund transfers from various agencies.

Meanwhile, the COA report for PS-DBM in the same year said that the agency has P17.04 billion due to various government agencies for the procurement of various items and projects.

Dapat matigil na ang ganitong "lateral transfer" of funds whose intent is to to beat the clock, a pasa-load scheme to extend the life of an appropriation about to expire.

Dapat gamitin ng parehong kapulungan ng Kongreso ang oversight powers nito during the budget implementation to determine the real status of an appropriation.

In fairness to DBM, ayaw nilang maging dumping ground of expiring allotments, doing what agencies are supposed to do.

Just to laymanize some budget-speak: Appropriations ang tawag sa gastusin na authorized by Congress. Kapag ni-release ng DBM sa ahensya ang authority na gamitin ito, ang tawag ay allotment. Ang allotment, kapag ginamit sa pag-order ng goods and services, ang tawag, obligations. Ang bayad sa obligations, o mga goods and services na na-deliver na, ay disbursements.

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