Fight against corruption: Square pegs in round holes

Once in awhile, this column gets some interesting reading that merits a wider circulation. While I may not totally agree with our featured reader’s point of view with regards some of his opinions, for purposes of sharing with others a unique proposition or stand, we are giving space to excerpts of a long e-mail sent by Marcelo L. Tecson of San Miguel, Bulacan.

"May I respectfully write as a concerned citizen on a proposition of national interest: that blatant acts of corruption, like the P728-million fertilizer scam, can be detected and prevented if the distinguished highest officials of the land will join hands, map out what needs to be done, and do everything to minimize, once and for all, the continuing corruption in our midst that sucks the lifeblood of the nation.

"As a certified public accountant (CPA) who once made a living out of practicing the art of fraud prevention in private and public sectors, I suppose I can see why the Philippine government has not attained respectable success in its fight against corruption.

"What seems disappointing and puzzling is that the pillars of the auditing profession, who can help minimize corruption, have not made their presence felt in the alleviation of the problem. Is it because they are not familiar with the systems and control procedures for the government’s trillion-peso annual disbursements – the source of large-scale corruption usually reported by the Commission on Audit?

"Examples of alleged corruption are overwhelming, such as: the past textbook scam, the multi-billion-peso Clark Centennial scam, the PIATCO contract, the Diosdado Macapagal Boulevard overpricing, the COMELEC-Mega Pacific computer deal, the P728-million fertilizer scam, and the P20-billion diverted Marcos funds.

Obvious error

"The obvious error in the protracted anti-corruption war constitutes the mother of all reasons why the Philippine Government has not won against corruption, that is, half of its anti-corruption program is managed by square pegs in round holes: courtroom-expert lawyers who are laymen on the basic weapon against corruption – sound internal control, or fraud-prevention system – the area of expertise of a breed of professionals, CPAs, who specialized as auditors and made the art of fraud prevention their lifetime career.

"For example, topnotch lawyers might have seen many times the television newscasts years ago about how Governor Chavit Singson obtained a P200 million cash advance for the purchase of tobacco flue-curing equipment, then had a part of it misappropriated.

"The news might have registered nothing to them except for the anomalous diversion of a significant part of the cash advance to an illegal purpose. However, internal control specialists would see much more.

"They would know that granting of cash advances should be generally limited to small expenditures like transportation and travel expenses, not for such multi-million-peso purchase of equipment, which should have been subjected to public bidding by the provincial government itself, not handled solely by the provincial Governor.

"The cash advance violated the internal control rule that no one person should be in complete control of transactions, a situation that eliminates checks and balances and facilitates fraud even without the connivance of other persons.

"With the very lax rule on granting of cash advances, especially with the absence of pre-audit on subsequent cash advances even without full liquidation of old ones, the result is the present staggering P17.1 billion unliquidated cash advances in the government!

Having the right professionals

"It is astounding how World Bank (WB), Asian Development Bank (ADB), and the Philippine Government have, for years, missed the obvious in the pursuit of the foreign-assisted and lawyer-managed national anti-corruption program: having the right professionals -CPAs who specialized as auditors – at the forefront of the war against corruption.

"Having the wrong professionals conceptualize and implement the nation’s anti-corruption roadmap is like having an engineer argue a case before the Supreme Court. This monumental omission is one of the key factors in the government’s failure to minimize corruption.

"In college, students aspiring to become CPAs studied auditing that included internal control and fraud prevention. Later, over the years, as CPAs who practice the auditing profession, they gained audit expertise and attained professional maturity, so that whatever fraud-prevention knowledge lawyers learned by accident – and accidents do not always happen – in the course of their overseeing the country’s anti-corruption campaign, CPAs learned by design in college and in actual training and practice, to the extent that it has become instinctive to them.

"Therefore, why didn’t WB and ADB require the Philippine Government, as precondition to their technical and financial assistance, to utilize capable CPAs in the anti-corruption war? Or, on its own, why didn’t the Office of the President, or the government, employ fraud-prevention expert CPAs in fighting corruption? Haven’t concerned government officials heard of these professionals?

"If right men, materials, and equipment are needed in the successful pursuit of any major undertaking, in the government’s anti-corruption program it does not employ some of the crucially needed right men."

Any reactions or comments on the above?

Cinnabon pasalubong craze

Shipping magnate Arben Santos, a die-hard Blue Eagle fan and also known as "godfather" of a number of ex-Ateneo star basketball players such as Richie Alvarez and Rico Villanueva, among others, is grinning ear to ear nowadays. Not because the Ateneo team is winning (the Blue Eagles got clipped by the Cardinals in the round of eight of the Collegiate Champions League) but because of a new craze at the domestic terminal - Cinnabon as the top choice as pasalubong.

Although still in a makeshift stall at the old domestic terminal where passengers of Cebu Pacific and other lesser weight airlines are being cramped, Cinnabon is selling like hot cakes. Arben Santos, the franchise holder of Cinnabon in the Philippines, is hoping that soon they will be able to open an outlet at the more plush terminal where PAL operates.

Elevating Collegiate Basketball

Congratulations to Dindo Pumaren and the University of the East Red Warriors for clinching the Collegiate Champions League Championship. In so doing, the University of the East will receive scholarship and athletic facilities funding assistance in the amount of P500,000. Runner-up San Beda Red Lions, the reigning NCAA Champion, will receive P200,000 while the surprise package of the tournament, a "wild card" entry seeded fourteenth, the Jose Rizal University Heavy Bombers, will get P100,000 and the eight-seeded Mapua Cardinals settles for the P50,000 fourth placer prize.

The eight-playing days of the CCL knock-out competition (loser goes home) produced exciting and high-intensity games. The players appreciated the challenge of competing with other teams belonging to other leagues. The competition elevated collegiate basketball to another level.

Even if winning the UAAP crown, the NCAA title or the Cebu basketball league are great achievements in their own rights, besting other teams and being the last team standing after a knock-out no second-chance duel is a feat to brag about. Something to look forward to as a higher goal.

Poker Tour at Cebu-Lahug

This weekend Casino Filipino Cebu-Lahug at Waterfront Hotel, Cebu will host the Philippine Poker Tour Million-Peso Hold’em Philippine Championship, the biggest non-wager poker skills tournament in the country. Winners of this satellite tournament will earn seats to the Grand Finals that will be held at Casino Filipino Pavilion, Manila on 16th and 17th December 2006.

Details about the venues and schedules of other qualifying/satellite tournaments are posted in the Philippine Poker Tour (PPT) official web site at HYPERLINK "http://www.PhilippinePokerTour.com" www.PhilippinePokerTour.com. Those interested to join these satellite/qualifying tournaments and win seats to the Grand Finals on 16th to 17th December 2006 may also call the PPT Secretariat (c/o Cindy) at 817-9092 or 812-0153.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected] or at [email protected]. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.