MANILA - The Commission on Audit (COA) has flagged the continuous release of subsidies by the National Electrification Administration as it disbursed a total of P10.45 billion in subsidies given to electric cooperatives throughout the country despite unliquidated funds through the years.
In a special audit on NEA funds, state auditors said 1,301 transactions from 2012 to 2014 were continuously processed and funds were released to 102 electric cooperatives without considering the unliquidated balance of previous subsidies.
“The audit team recommended that NEA comply strictly with the prescribed guidelines for the release of subsidy and if possible, initiate “no liquidation, no subsidy” policy to safeguard the funds,” the COA said in the report.
The audit team also noted that the intervals between releases of funds were too close, without taking into consideration the liquidation of prior releases as required by government regulations.
The report said that 2010 and 2017 NEA memoranda provided that projects with the same classification shall be processed only if the previous projects funded by subsidy have been completed and closed out.
The NEA management, however, noted that as of March 22, 2019, only P403 million or 3 percent of the audited amount from 38 electric cooperatives remained unliquidated.
Some electric cooperatives were also required to execute an affidavit of undertaking to fully liquidate the subsidy fund balances, a move appreciated by the audit team.
“However, the audit team’s observation that NEA continuously processed and released subsidies even without liquidating first prior or previous funds given to the electric cooperatives was not acted upon,” the COA report said.
NEA Administrator Edgardo Masongsong received a copy of the special audit report on June 11, 2019.
The full copy of the report can be downloaded from the COA website.