Saturday, April 21, 2012

COA and OMB Ink MOA to Investigate and Prosecute Cases of Corruption in Public Office

MANILA, Philippines – The Commission on Audit (COA) and the Office of the Ombudsman (OMB) today launched a joint team to fast-track the investigation and prosecution of cases arising out of COA fraud audit reports. COA Chairperson Ma. Gracia Pulido Tan and Ombudswoman Conchita Carpio Morales signed the Memorandum of Agreement in the newly inaugurated office of the COA-OMB Joint Investigation Team located within the COA premises. Collaborating their anti-corruption initiatives as members of the Inter-Agency Anti-Graft Coordinating Council, COA and the OMB through the joint investigation team aim to ensure the efficient and successful filing, investigation and prosecution of cases involving graft, corruption and violations of the ethical code of conduct for public officials and government employees. "With the Office of the Ombudsman and the COA working together, we are confident that these cases will finally be resolved, the names of innocent individuals cleared, and the accountable officials meted the appropriate penalties," said Ombudswoman Morales. "We are constitutionally mandated in our respective capacities to ensure accountability and integrity in public office," added COA Chairperson Pulido Tan. "We will thus attend to these cases with the highest degree also of accountability and integrity." This institutional partnership is part of an ongoing effort to enhance and expand mutual assistance between COA and the OMB under the leaderships of Ombudswoman Morales and COA Chairperson Pulido Tan. Under the terms of the MOA, which will run for three years, the two Offices will share resources and expertise in the successful processing of cases under joint investigation. The designated focal persons for the COA-OMB Joint Investigation Team are Chief Executive Staff Atty. Gilbert G. Kintanar from the COA, and Deputy Special Prosecutor John I.C. Turalba from the OMB. source

Wednesday, August 17, 2011

Lifting of Pre-audit of Government Transactions

COA Commission Proper issued COA Circular No. 2011-002 dated July 22, 2011 withdrawing selective pre-audit under COA Circular No. 2009-002 and thereby lifts all pre-audit activities presently performed on financial transactions of the national government agencies, government owned and/or controlled corporations and local government units, except those required by existing law.


Tuesday, August 16, 2011

Gloria Macapagal-Arroyo got P98M advance before bowing out–COA

Former President Gloria Macapagal-Arroyo got an advance of P98.6 million from the Presidential Social Fund (PSF) one month before stepping down from office last year.

This according to Commission on Audit (COA) chief Grace Pulido Tan who appeared at Tuesday’s House committee on appropriations hearing on the proposed COA budget for 2012.

Tan said the advance of P98.6 million, which was released on May 28, 2010, was discovered during an ongoing audit of the PSF. The fund by that time should have been left untouched for her successor, now President Benigno Aquino III.

Tan said the P98.6 million was part of a P345 million remittance by the Philippine Amusement and Gaming Corp. (Pagcor) to the PSF.

She confirmed an earlier claim by Bayan Muna party-list Rep. Neri Colmenares that vouchers for the disbursement of the P345 million to two congressional districts closely linked to Arroyo were issued but later cancelled.

“We have the same figures. We have found the [amount] remitted to the PSF and receipted by the PSF. Part of this, P98.6 million, was taken from the June 2010 PSF. May advance, inadvance na dun. Nagalaw din po (There was an advance, it was taken from that. It had been touched),” Tan said.

In a previous House hearing, Colmenares said the P345 million was intended for two “lucky” congressional districts—the second district of Pampanga then represented by Mikey Arroyo and the second district of Camarines Sur represented by Dato Arroyo. Both congressmen are sons of the then president.
Tan said the COA was following the trail of the P345 million.

She said its disbursement could have only come from MalacaƱang since it had received Pagcor’s remittance.

“That’s something we are in the process of auditing. 2010 na yan medyo nahuhuli pa po (It happened in 2010 and we’re running a little late),” she said.

At the same time, the COA announced that it was keeping its policy of pre-auditing government projects but only for some agencies like the Armed Forces of the Philippines and the Philippine National Police.


Wednesday, August 10, 2011


Management Association of the Philippines
Manila Peninsula, Rigodon Ballroom
26 July 2011

by Ma. Gracia M. Pulido Tan
Chairperson, Commission on Audit

Thank you most sincerely for inviting me to share with you today my thoughts and
aspirations on a truly challenging but very timely topic, one that strikes at the very
core of what I have long set out to do with my very life as a daughter, sister, wife
and mother; a puny creature of God; an ordinary citizen; a professional; and now,
as public servant once again.
On my first day of office, I expressly declared my bottomline, and that is to bring to
our countrymen the COA that our Constitution has meant it to be, and properly
deliver to them their constitutionally mandated right to a full and proper accounting
of public funds which, after all, is theirs, yours and mine.
I thus laid out our immediate tasks:
1. Revisit our mandate and assess our directions;
2. Evaluate our organizational structure and management and business
processes and undertake all necessary reforms to institute best practice for
efficiency and effectiveness in carrying out our tasks and strengthening our
3. Continuously upgrade our capabilities, specially in the areas of forensic
accounting, fraud audit, and properly documenting our findings so they will
stand in the courts of law;
4. Engage citizen participation in the audit process and keep them informed of
the workings of the Commission within the bounds of due process and
confidentiality requirements, and,
5. Most of all, fastidiously work on ourselves and strive to grow each day in
professionalism, patriotism and integrity.
This is my roadmap at the Commission. I hope you will agree with me that it is a
roadmap to a culture of integrity.
I firmly believe that this is the only way to go, specially in light of the crucial role of
the COA in the fight against graft and corruption and in restoring credibility to and
confidence in our government which has been inflicted with deep wounds of untold
excesses and brazen raids on the treasury.
You and I know these all too well, as practically each day, the media carries banner
stories of this sad and sordid state of affairs.
I hope you will also agree with me that sound management policies and practices are
imperative in delivering on these tasks. I must confess, however, that apart from my
degree in business administration and accountancy, I have had no other formal
education in management.
But I have laid my vision, and draw the audacity to move and shake from my long
years of law practice and intermittent stints in government and international
consultancies, where I have had the privilege of entering the corridors of decision
makers and managers at the highest levels, and which honed my instincts to a great
Most of all, I derive strength from my faith in God, whom I firmly believe directed
me to this new chapter of my life and therefore equips me with the moral courage
for the job.
So how have we done at the COA in the three months that I have been at the helm?
Let me share with you some highlights.
Mandate, Organization, and Processes
A cardinal rule for me is that structures and practices that have a high
potential for compromising integrity must go.
I am pleased to inform you that last week, we at the Commission Proper
resolved to do away with pre-audit.
While its intentions were laudable, its implementation courted some dangers.
For one, its very nature and purpose - which is essentially an approval process of a
transaction before it can be carried out - gave rise to myriad reports that a quid pro
quo between the agency and our auditors take place every now and then, for without
COA’s approval, the transaction cannot proceed.
On the other hand, it has placed a big burden on auditors who are genuinely
cautious and thorough, and thereby bide for time to make a decision, resulting
however in delays in certain government projects and consequent penalties. In this
sense, the COA has been perceived as an “obstructionist” or, at the other end of the
spectrum, “nagpapapresyo.” So either way, damn if we do, damn if we don’t.
Pre-audit also partakes more of a management function, a task that could
compromise the independence and attest function of the COA and estop us from
revisiting or changing position where circumstances would otherwise warrant.
Pre-audit has also taken a considerable portion of our auditors’ time that
would otherwise have been devoted to meticulous regular audits.
Our review of pre-audit reveals that in the almost two-year period that it has
been in place, more than 500,000 transactions were pre-audited, involving an
aggregate value of more than PHP 535B. 87% of these were given “outright
approval;” 11% were “approved after compliance with auditor requirements”, and
only about 1% were denied.
These figures would indicate that for all the effort, we managed to “save”
government of about PHP 5.35B only. Surely, there must be less invasive and
burdensome ways by which to achieve the same result, if not better. The very high
percentage of outright approvals would also show that the concerned agencies may
have been generally fiscally responsible, after all.
Accordingly, except in agencies whose internal control systems are weak or
perhaps, even non-existent, pre-audit must go. We shall issue and publish a Circular
to this effect shortly, as soon as we finalize the transitory provisions and other
Residency Audit
As you know, we use the residency audit approach, where audit teams hold
office in their assigned agencies. This is designed to facilitate the ongoing review of
the agency’s operations, programs and activities, specially because we audit them
You are also well aware of the consequent problems we have had in this
regard. Remember the Garcia affair?
While the COA has a residency rule of three years, this has not been
implemented consistently. One consideration, I was told, is that a good level of
familiarity with the operations of the agency is required for a good audit. But wasn’t
it familiarity that was precisely at the root of the Garcia affair?
The residency approach is definitely under high-priority and urgent review.
It is taking a little longer than pre-audit, though, because we have about 7,000
people on the field. Initial findings – and the increasing number of complaints that
we have received – strongly indicate, however, that we may have to consider doing
away completely with this approach, and instead adopt a visitorial system.
This would mean recalling every resident auditor to home office, and
scheduling field work from time to time, pretty much how external auditors in the
private sector do. Of course, there are logistical concerns and we may just pilot
some agencies first. To test the waters, we have resolved to adopt the visitorial audit
in one agency, and we are now in the process of fleshing out the details.
Meantime, we issued COA Circular No. 2011-001 specifying the items all
heads and concerned officials of all our auditees are legally obliged to provide our
resident audit teams. This Circular also reminds them of the prohibition against
paying our personnel any honoraria, allowance, bonus or other emoluments. COA
Circular No. 2011-001 was published on July 13, 2011 in the Inquirer, Philippine
Star and Business World.
We are also reviewing the residency period of our auditors in their present
assignments so we can forthwith rotate those who are clearly overstaying.
Organization and Processes
Under the COA organizational structure (adopted in 2008), audit
observation memos and reports are signed and released by the Supervising Auditor.
Notices of disallowance, suspension or charge are also issued by the Supervising
Auditor, thus making an audit team virtually autonomous in its assigned agency.
This has resulted in the inconsistent application of compliance standards and
interpretation of transactions among agencies. One audit team may find an expense
irregular in its agency, but the audit team in another agency may find a similar
expense regular.
The general perception created is that the “lenient” auditor may be on the
take. On the other hand, the agency with the “strict” auditor would request
replacement. Imagine the delicate balancing act we have to make.
Autonomy has also resulted in what I would call a “fragmentation” of
transactions that involve, or cut across, several units or agencies. Either the “money
trail” is not followed to its conclusion, or the multi-agency projects are not evaluated
as a whole, but only in parts, resulting in different interpretation or characterization
of the project because each audit group would only be looking at the part that
involves their agency.
As an interim measure, I have therefore asked that all audit teams of
agencies involved in a multi-agency project or transaction coordinate closely and
work together to have a common understanding and appreciation of the entire
project and its component parts – from origination, stages of development,
approval, financing and implementation; validate their observations with one
another to ensure consistency; and issue one special consolidated report for a better
understanding of the various stakeholders.
A good example would be the MRT, which involves not only the DOTC but
the NEDA, DOF, BTr, GFI’s and GOCCs. Another would be the Malampaya
Funds, which not only involve the DOE, but all agencies which have received them
and funded projects out of the proceeds. Call it a package audit, if you will, and I
hope it would not only provide a complete picture but also serve as a check and
balance among our auditors.
Capacity Building
Another sound management policy, I believe, that will promote integrity is to
bring out the best in our human resource and build their confidence in themselves
and in their professional capabilities.
International Linkages
I am pleased to inform you that our auditors are among the world’s best.
Presently, we are the External Auditor of the Food and Agriculture Organization
based in Rome. Last May 19, in contention with heavyweights - Germany, France,
Spain and Malaysia, we were elected External Auditor of the World Health
Organization in Geneva. We are now working on our bid to be the External Auditor
of the International Atomic Energy Agency based in Vienna
For about 20 years until 2008, we were in the Panel of Auditors of the United
Nations, and maintained an office for the purpose in New York. We intend to get
back in 2014 and reclaim the honor of being the premier supreme audit institution
in Asia, if not the world.
Why all these efforts to take on overseas assignments, you may ask? Is there
not enough work at home? There is definitely more than enough, specially at these
crucial times, when we are re-tooling, as it were, and re-engineering our business
But we need international exposure to build confidence and pride among our
auditors, and encourage everyone in the organization to do her or his best at home
so she or he can take a shot at an international experience. It opens us up to best
practice and knowledge sharing . It is the best training program and impetus for
continuous professional development. And if one takes professionalism seriously,
one will have no qualms about living out a culture of integrity.
Fraud Audit and Forensic Accounting
Our focus now is to develop greater capacity in fraud audit and forensic
The complexity of financial transactions, rapid advances in technology, and
the ever-changing legal and regulatory landscape require so. Given the highly
trained and handsomely paid think tanks and craftsmen in many government units
and agencies today, it is imperative that we be at par, if not a step ahead.
I am sure our staff will appreciate the attention we are putting into this
highly specialized training, and will respond with a commitment to apply it without
fear or favor.
Prosecution and Evidence
It has certainly been a disappointment that big cases where we thought we
had the “smoking gun” have not prospered, not because they were not meritorious
but because of technical or procedural errors and/or on evidentiary grounds.
It is therefore important to encourage our auditors so they will not lose heart.
Obviously, they need to see that their hard work pays off.
Hence, we shall strengthen and intensify cooperation and coordination with
the Ombudsman. The appointment of Justice Carpio Morales, who is well known
for her probity and no-nonsense stance, is certainly most welcome, and we eagerly
look forward to working with her.
We shall provide more intensive training, preferably from well known legal
experts with a solid track record in successfully prosecuting graft cases, that our
auditors may be better equipped and further inspired. I am looking at tapping the
local legal community for this much needed assistance and already, several
volunteers have come forward.
Citizens’ Participation
This is a priority program, founded on the premise that public accountability
can prosper only with a vigilant and involved citizenry.
Accordingly, we have established a text hotline directly under my office
where they can call in complaints or concerns. This, of course, is in addition to
regular mail, fax and e-mail. The hotline and email facilities are on the COA
We have also taken measures to expedite the uploading of all audit reports in
our website so that any one interested can readily access them.
Citizens’ participation is not to be merely confined to complaints. We are in
the process of developing a comprehensive program that will integrate people’s
organizations, the media, the clergy and business chambers, among others, in
various aspects of the audit process: determining audit focus areas, validation of
documents, gathering information from the field, verifying the physical existence of
projects, checking on our auditors and assisting in their security.
We will have information campaign and training on procurement rules,
implementation of budgets, disbursements, basic accounting, and understanding
financial reports. It is a tall order but we are committed to see it through. Target
launch of the citizens’ participation program is by this year-end.
This idea came when I was discerning whether or not to accept the position. I
was so taken by it, and heavily influenced my decision to accept. I was pleasantly
surprised that shortly into the job, I received an invitation from the INTOSAI to
attend a Symposium in Vienna, precisely on the topic of “Effective Practices of
Cooperation between SAIs and Citizens to Enhance Public Accountability.” Little
did I know that citizens’ participation has become a hot, contemporary issue
elsewhere in the world, and I took that to mean that yes, we are on the right track.
Growing in Professionalism, Patriotism and Integrity
This has been the most challenging “deliverable” so far. Indeed, how does
one grow in professionalism, patriotism and integrity at this stage of life?
Surely, I have not quibbled on letting the ax fall where it must. I have not
hesitated to authorize the administrative investigation of those who have been prima
facie found to have acted improperly, and to file appropriate cases in court where
These are hard, painful decisions, but these I must do in order to instill
professionalism, patriotism and integrity at the COA. I am fully aware that these
are the hazards of my trade.
On the other hand, I have asked our Human Resources to come up with a
hiring and recruitment program for fresh graduates from state universities and
colleges to join our force.
We need at least 1500 accountants, lawyers, IT personnel, engineers and
other technical professionals by next year, not only because of our intensified work
program but to address the rapidly aging population of the COA. I believe that it is
best to work on the young, and appeal to their idealism and patriotism.
A culture of integrity is truly a formidable and inclusiv process. It requires
the active cooperation and involvement of all stakeholders. Each of them must want
it, and accept and own their respective roles in both the vision and the process. The
ultimate responsibility of the leader is to lead by example. Mapping a culture of
integrity therefore starts with him.
I can only hope that with what we have laid out to do and have already
worked on, we have set the tone and demonstrated that change can happen and it
starts from within.
I can only pray - and I ask you to pray for me and the COA, as well - that I
will continue to have the moral strength to carry on.


Message of COA Chairperson Maria Gracia Pulido-Tan for COA personnel

18 April 2011

My dear fellow Commissioners and Auditors,
Administrative and Support Staff, Friends:

Good morning. Thank you very much for your warm welcome.
Today marks the beginning of an entirely new chapter of my life, one that
never crossed my mind until that fateful day about a month ago today
when I received a totally unexpected call. I had served government
before, and I thought that I had “given back,” so to speak. After the brief
stint, I chose to slip into a rather comfortable life doing what I missed
while I was in active law practice, namely, spending more and better
quality time with my children and involving myself in various socio-religious
work and civil society groups, while doing consultancies in
between. It was the most quiet, relaxed and practically stress-free six
years of my adult life, one that I thought was mine to keep forever.
But God has other plans, and here I am.
Be assured that I accepted this position for no other reason than my
conviction that this is God’s will for me at this time of my life. I have
no desire for power, position, fame and riches. I am here only to do my
bit of bringing to our countrymen the COA that out Constitution has
meant it to be, and I will discharge my responsibilities with the highest
degree of professionalism, integrity and competence. I assume this solemn task for God
and country, and I ask for nothing from you other than your support and cooperation in
delivering to our people their constitutionally mandated right to full and proper
accounting of public funds which, after all, is theirs, yours and mine.
In the pursuit of this task, we will be relentless and bold. We shall not be daunted nor
shall we be cowed by any force that will seduce us to silence or any suppression of the
truth. These are opportune times, when COA has leaped into the consciousness of our
people and showed them the immense responsibility it carries to hold public servants
accountable, thanks to the courage and immeasurable capacity for self sacrifice of
Commissioner Heidi Mendoza, and all the other valiant men and women of the
Commission who have put God and Country above all. We cannot, and should not, falter
now. In the words of Suetonius in Deified Julius, “The die is cast,” and so “let us march
on, and go wherever the tokens of the gods and the provocations of our enemies call us.”
We will therefore do all that is incumbent upon us, and exercise them within the
constitutional and legal powers vested in the Commission. We will all revisit our
mandate and attune ourselves to it again, lest we have forgotten. We will evaluate our
organizational structure and management and business processes and undertake all
necessary reforms to institute best practice for efficiency and effectiveness in carrying out
our tasks and strengthening our independence.
In this regard, I will count on the
support specially of Commissioner
Espino, our “man of action,” who
has been your anchor and guide for
the last so many years. We will
continuously upgrade our
capabilities and build capacity,
specially in the areas of forensic
accounting, fraud audit, and
properly documenting our findings
so they will stand in the courts of
law. We will engage citizen
participation and keep them
informed of the workings of the
Commission within the bounds of due process and confidentiality requirements. Most of
all, we will fastidiously work on ourselves and strive to grow each day in
professionalism, patriotism and integrity.
The task ahead is certainly not for the fainthearted, but let us all take comfort in our
Lord’s promise that whom He calls, He will anoint and equip for battle.
Ladies and gentlemen of the COA, we have all been called; it is no accident of
circumstance that you have all chosen to serve in this institution. Let this be our highest
reward and constant source of strength. May we not forget that we are but pilgrims on
this earth and that we will pass this way only once, so whatever good we can do, let us do
it now. Fame, power and fortune will surely pass, but the legacy of an honest and
competent public service will live forever.
Again, my sincerest thanks for your warm welcome, and for this singular privilege of
leading the COA at these crucial times of our country’s history. Now, the real task


Wednesday, July 27, 2011

New COA chief seeks sweeping reforms

by David Dizon,
Posted at 05/05/2011

MANILA, Philippines - Commission on Audit (COA) chairman Ma. Gracia Pulido Tan on Thursday outlined her plans for the agency including sweeping reforms on how the COA conducts its audits.

Among the reforms being lined up by Tan are a review of the capacities and specialization requirements of resident auditors and the secondments of auditors to posts outside the country.

Tan said one of the major complaints against some COA auditors is the residency of auditors to choice government agencies, which allegedly leads to abuse.

She noted that some auditors such as former Intelligence Service of the Armed Forces of the Philippines (ISAFP) resident auditor Divina Cabrera are accused of staying at just one post for 10 years.

Cabrera has been accused of pocketing 2% of all intelligence contracts.

"We are going to review policy on residency of auditors kasi di ba ang dami mga complaints. Si auditor na ganito, 10 years na...Offhand, that's not good. Staying in an agency for so long is not good," Tan said.

The COA chief said Cabrera is under investigation after a complaint was filed about her extended stay in ISAFP.

"If there is sufficient lead to go on, for administrative investigation, then we can do that. My understanding is may complaint na naka-file. They can work until they are suspended. We do have a process. I don't want to forget that," she said.

Tan said she will not recommend a lifestyle check of auditors just yet since she believes that 95% of COA employees are dedicated to their work.

She said she asked COA's Human Resources Department to do an inventory of the agency's 8,500-plus employees including resident auditors.

She said she had received reports that at least one resident auditor has a secondment to New York City even though there is no ongoing audit in there.

"I want to know why they are there. If I cannot rationalize, they would have to come back," she said.

Auditing intel funds

Tan said COA would also like a review on the rules of audit for military intelligence funds especially since 80% of the expenses are only supported by a certification from the responsible officer. The theft of military intel funds was recently investigated in congressional investigations this year.

"Wala details. I understand the very nature of the intel funds has national security issues. Gusto ko ma-review yun kung ano pwede namin gawin sa audit that will be a little more substantive. Kasi kung ganun, parang clearing house lang kami...Ano limits ng confidentiality? Anu pwede i-detalye ng kaunti? Di naman pwede 80% puro confidential," she said.

She said the COA will also ensure that proper audit techniques will be conducted on projects of the Department of Public Works and Highways, considered one of the prime sources of corruption in government.

"Kung magbibilang ng pako, magbibilang ng pako. There are audit techniques maski sa private auditors hindi lahat tintignan, may sampling. The selection of a sample is also scientific so it will be representative. Pag may makita ka sa sample mo umabot ng 90% clean , clean na yan," she said.

'Heidi a big help'

Tan revealed she did not aspire for the top COA post but was prevailed upon to accept it by one of the Cabinet members.

She said the appointment of Senate whistle-blower Heidi Mendoza as COA commissioner has been a big help to the agency.

"When I was told Heidi will be a commissioner, I said 'Wow, great.' This is someone I can work with. Being a total outsider having had no practice before the COA and not knowing anyone there, I thought she will be a great help. Plus the fact that sabi ko 'Magkautak kami. She's anti-graft. She's for integrity. We speak the same language.' We've been OK, I can really count on her," she said.


COA elected as external auditor of WHO

The Philippine Commission on Audit (COA) was elected as the new external auditor of the World Health Organization from 2012 to 2015.

Citing a report from the Philippine Embassy in Geneva, the Department of Foreign Affairs (DFA) said the election was held a the 64th World Health Assembly on May 19.

Health Secretary Enrique Ona and Permanent Representative to the United Nations (UN) and Other International Organizations in Geneva Evan Garcia led the Philippine delegation, the DFA said in a news release on its website.

New COA Chairwoman Maria Gracia Pulido-Tan and COA Commissioner Heidi Mendoza were also part of the Philippine delegation, the DFA said.

Pulido-Tan delivered the winning presentation of the Philippines' bid for the prestigious position, the DFA added.

The WHO is the UN's public health arm. It is the directing and coordinating authority for health within the UN system.

It is responsible for providing leadership on global health matters, shaping the health research agenda, setting norms and standards, articulating evidence-based policy options, providing technical support to countries and monitoring and assessing health trends.