PSC released P170M of financial assistance to sports associations without the required documents

The Philippine Sports Commission (PSC) has released P170 million of financial assistance to different national sports associations (NSAs) despite lacking documentary requirements in violation of COA and PSC rules, the Commission on Audit (COA) said.

Based on the 2018 annual audit report on PSC, COA said requests for P170 million of financial assistance were still processed by the NSA Affairs Office, approved by the PSC Board of Commissioners even without the required documents under the PSC and COA rules.

Under COA rules, the NSAs should submit the following documentary requirements to be eligible for financial assistance from PSC:

• certificate of registration from the Security and Exchange Commission (SEC)

• authenticated copy of the latest Articles of Incorporation showing the original incorporators/organizers and the Secretary’s certificate for incumbent officers, together with the Certificate of Filing with the SEC
• audited financial reports for the past three years preceding the date of project implementation

• disclosure of other related business

• sworn affidavit of the secretary of the nongovernment organizations/peoples organizations (NGO/PO) that none of its incorporators, organizers, directors or officers is an agent of or related by consanguinity or affinity up to the fourth civil degree to the official of the agency authorized to process and/or approve the proposed MOA, and release funds

• certification from the accountant that the previous cash advance granted to the NGO/PO has been liquidated and properly taken up in the books

• memorandum of agreement incorporating the relevant terms and provisions

PSC policies, on the other hand, require NSAs to submit the invitation from the organizer, competition details, copy of passports of the delegation, and general information sheet of the NSAs.

“Our review of the 184 disbursement vouchers covering fund releases to 48 NSAs totaling ?170,256,336.35 disclosed that the above-mentioned requirements were not attached as part of the supporting documents,” COA said.

In response, the PSC management told state auditors that PSC already issued an advisory to all NSAs on January 30, 2019 requiring NSAs to submit the documents necessary for proper review by the audit team.

PSC has agreed to the recommendations made by the COA which include:

• directing the NSA Affairs Office to conduct due diligence in evaluating requests for financial assistance to make sure that the necessary documents related to relevant PSC policies and COA rules and regulations are complied with

• requiring NSAs to submit the lacking documents for proper review of the transactions

Unliquidated funds

On top of the questionable release of P170 million of financial assistance to NSAs, the Audit commission called out the PSC for granting P114.9 million of additional financial assistance to 29 NSAs even if the previous fund releases have not yet been liquidated in violation of COA rules and PSC law.

COA rules do not allow nongovernment organizations and people’s organizations to participate in implementing any program or project of government agencies until earlier fund releases have been fully liquidated and certified by the head of agency concerned and the COA Auditor.

The implementing rules and regulations of the PSC law states that subsequent financial assistance (FA) is not allowed unless the requesting party, organization, or NSA has fully submitted the liquidation report.

“The Evaluation Report prepared by the NSA Affairs Office addressed to the PSC Chairman noted that said NSAs have outstanding balances. Nevertheless, the PSC Board of Commissioners still approved the grant of additional financial assistance in order not to hamper the trainings and participation of the athletes and coaches to sports competitions, in particular the 18th Asian Games held last August 2018 in Indonesia,” state auditors said.

While the PSC required the president or the secretary general of the NSA to sign an affidavit of undertaking—making the signatory personally accountable to the additional FA—COA maintained such affidavit does not guarantee financial assistance has been liquidated since it was observed that the financial assistance still remained unliquidated even if the affidavit has been completed.

“The grant of additional FA despite the existence of unliquidated prior advances resulted in the accumulation of outstanding balances at year-end,” COA said.

The Audit commission has recommended that the PSC require the acting head of the NSA Affairs Office to discontinue processing requests for new financial assistance to all NSAs with unliquidated advances.

COA has tasked the PSC Board of Commissioners to stop granting additional financial assistance to NSAs with outstanding accounts.

The PSC has agreed to COA’s recommendations. —VDS, GMA News