Electric coops owe NEA P37.5 million in excess subsidy funds - COA

MANILA, Philippines - Various electric cooperatives (ECs) owe the National Electrification Administration (NEA) more than P37.5 million in excess subsidy funds.

In a report, the Commission on Audit (COA) said some of the unreturned funds date back as far as 2002, as in the case of the Leyte Electric Cooperative that owes NEA a total of P253,017 as of Dec. 31, 2010.

COA stressed the excess subsidy funds should be returned to finance other rural electrification programs in the country.

Among the electric cooperatives that failed to return excess subsidy funds for seven years are the Zambales Electric Cooperative and the Romblon Electric Cooperative.

The COA report noted the NEA is mandated to implement the country’s rural electrification program on an “area-coverage” basis under Presidential Decree 269.

To pursue this mandate, NEA is allowed by the national government to grant subsidy funds to various electric cooperatives for electrification of depressed and remote villages in the rural areas.

The funds will also finance the rehabilitation of distribution lines and systems damaged by calamities.

“Our audit of the subsidy funds released to various electric cooperatives disclosed that excess funds after the completion of the projects were not returned to NEA,” the COA report said.

State auditors said Paragraph 7 of the Memorandum of Agreement (MOA) entered into by and between the electric cooperatives and the NEA was violated.

The provision of the MOA states that that all unexpended subsidy balance shall be immediately returned/remitted to NEA to form part of a revolving fund that will allow the agency to provide grants and assistance to other electric cooperatives in need of electrification projects.

COA said NEA should require nine electric cooperatives to return excess subsidy funds in the total amount of P37,549,405 in accordance with the MOA so that the money can be used for other rural electrification programs.

State auditors also called the attention of NEA on ”properly funded but delayed or unimplemented projects” which result in the disadvantage of intended beneficiaries.

The COA also reminded NEA of some electric cooperative projects that were not yet completed for lack of electricity.

COA stressed that concerned electric cooperatives should be required to “energize” their projects to allow constituents to enjoy the benefits of government-funded electrification programs.