COA flags HUDCC for Marawi fund diversion

MANILA, Philippines — The Commission on Audit (COA) has ordered the Housing and Urban Development Coordinating Council (HUDCC) to return the P5 million that it allegedly diverted to another government agency.

COA auditors said the fund was intended for rehabilitation projects in Marawi City.

In its annual audit report on HUDCC, the COA noted that the council on May 30, 2018, executed a memorandum of agreement (MOA) with the National Commission on Muslim Filipinos, tranferring P5 million to the agency to sponsor the participants of the “2018 HAJJ for the Internally Displaced Persons (IDPs) of Marawi City” in their pilgrimage to the holy city of Mecca in Saudi Arabia. 

COA said the transferred amount was drawn from the P500-million fund that the Office of the President (OP) allocated to HUDCC for the operational expenses of Task Force Bangon Marawi (TFBM).

The COA said the fund was strictly intended to be used for the “recovery, reconstruction and rehabilitation of the City of Marawi and other affected localities.”

The COA pointed out the agreement between the OP and the HUDCC even enumerated the allowable expenses for which the P500-million fund shall be utilized, such as for clearing operations, settlement of land conflict and road right-of-way, military and police security needs, rehabilitation of priority roads and bridges, procument of medical/health equipment and services, installation of closed-circuit televisions, construction of barangay halls and rural health centers, augmentation for electrical and water requirements and livelihood interventions.

The COA said part of the fund shall also be used for technical assistance to the local government of Marawi City in the formulation of a Comprehensive Land Use Plan to be executed through a MOA between HUDCC and Housing and Land Use Regulatory Board.

The audit body pointed out sponsorship of any event or travel is not among the allowable expenses listed in the agreement.

“The purpose of the fund transfer was not among the authorized expenses enumerated in the original MOA between OP and HUDCC,” the audit report read.

The COA pointed out that under Section 4 of PD 1445 or the Government Auditing Code, “trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received.”

The COA said Section 6 of the General Appropriations Act for 2018 also states that “trust receipts shall be disbursed in accordance with the purpose for which the fund is created.”

The audit body found no merit in HUDCC’s defense that the purpose of the fund transfer was for “social healing” of the victims of the Marawi siege. 

“The audit team noted their comments; however, we stand with the observation that the fund transfer was not among the authorized expenses enumerated in the original MOA between OP and HUDCC,” the COA said.

The COA said it issued a Notice of Disallowance to HUDCC on Feb. 18, 2019 to compel the return of the transferred amount. 

“We recommended that (HUDCC) management refrain from charging unrelated expenses to the TFBM Fund and see to it that all disbursements from the trust fund were in accordance with the intended purpose; and cause the refund/return of the transferred fund to TFBM,” the COA said. 

On May 2017, armed conflict erupted in Marawi after the Islamic State (IS)-inspired local terrorist group Maute led by brothers Omar and Abdullah laid siege on the city with the help of Abu Sayyaf leader Isnilon Hapilon.

This prompted President Duterte to cut short his visit to Russia and place the entire Mindanao region under martial law.

The battle between government troops and the militant forces lasted until October, leaving the city in ruins with about a thousand people dead and more than 3,000 displaced.

In its report issued last May 22, the International Committee of the Red Cross (ICRC) noted that over 100,000 people have remained homeless and unable to reclaim their normal lives despite several aid efforts by the government in Marawi City.

ICRC’s Philippine delegation head Martin Thalmann said the displaced people of Marawi who were left with invisible scars due to the delay in the city’s rehabilitation now “want to stand on their own feet again and stop depending on assistance” because they “have grown tired and frustrated.”

Thalmann added Marawi residents in evacuation areas or staying with their relatives are still encountering problems in getting drinkable water, sustainable livelihood and most especially permanent shelters.

Sen. Leila de Lima said the government should reassess if the combined efforts of concerned government agencies and private and foreign donors are properly applied to ensure rehabilitation and rebuilding the lives of IDP families.

“The issues in the war-ravaged city, especially involving shelters and livelihood, remain unheeded. It’s high time for the government to analyze and rethink their strategies to find out if these can truly rehabilitate Marawi,” she said.

Unfinished projects

In the same audit report, the COA called out HUDCC for several unfinished projects totaling P11.714 million.

“We have noted that as of Dec. 31, 2018, HUDCC had several outstanding projects consisting of 11 survey works and setup of one Human Resource Information System amounting to P11,536,182.23 and P178,304.00, respectively,” the report read.

The land survey projects for potential socialized housing sites were supposed to be done in Palawan, Baguio City, Pangasinan, Quezon, Cabanatuan, Pampanga, Misamis Oriental and Iligan City while the information system was supposed to be set up in Manila.

The report showed the completion of the projects has been delayed for 646 days to 1,257 days or for more than one to three years.

“However, verification of records and inquiry from the management revealed that liquidated damages were not imposed on the contractors/consultant despite delays from nine months to two years,” the report read.

“We recommended and (HUDCC) management agreed to instruct (its) Asset Reform Group to regularly monitor the progress of the projects in accordance with the MOA and other pertinent laws, rules and regulations; (and) if warranted, impose liquidated damages to the contractors/consultants for every day delay as deemed reasonable in accordance to the rate stipulated in the MOA,” it added. – With Cecille Suerte Felipe