Ghost projects, ghost expenses

EYES WIDE OPEN - Iris Gonzales - The Philippine Star

Our country has been spooked by ghost employees and taxpayers money has been spirited away. Sadly, I’m not just talking about the recent ghost employee scandal hounding the Bangko Sentral ng Pilipinas. It has happened and it’s probably happening in other government offices as well.

In my previous column, I put the spotlight on these ghost employees or the payroll fraud prevalent in all three branches of government. It’s particularly notorious in local government units and in Congress or the offices of our lawmakers. How ironic.

But as a reader pointed out, it’s not only ghost employees that are common in the Philippines but ghost projects and ghost expenses as well — from the southern Philippines to the northernmost tip of the country, our government executives have been trying to steal taxpayers’ money.

There are ghost farm-to-market roads, ghost schools, ghost hospitals, etc.

How unfortunate this is and it speaks volumes on where we are now. No wonder we are lagging behind our peers when it comes to access to quality education; or that in remote areas, many still do not have access to quality healthcare or that our farmers are unable to access a bigger market for their produce.

In Tabuk, Kalinga for instance, the provincial government allotted P2.29 million supposedly for the improvement of the Mangali-Banagao farm-to-market in the province but the Commission on Audit (COA) disallowed the payment after discovering that the project was a fraud.

In a notice of disallowance dated April 10, 2019 addressed to then Governor Jocel Baac, COA supervising auditor Leah Daguio and audit team leader Bernadette Pekas said that the amount of P2.29 million which was allegedly used by the provincial government to pay the contractor of the project was disallowed in audit due to “non-accomplishment of all the items of work in the approved program of works that included clearing, grubbing and layout; common earth excavation, solid rock excavation and billboard.” (Sunstar, May 2019).

In Lanao del Sur, an investigation by authorities found out that in 2011, some P11 million in public funds were siphoned through a fictitious project involving the supposed construction of water reservoirs.

Last year, the Sandiganbayan convicted Jamaloden Faisal, former general manager of the Tugaya Water District, to reclusion perpetua after finding him guilty of malversation related to the project. (PNA, June 2023).

In 2019, COA flagged delayed and unimplemented projects from the DPWH which amounted to more than P100 billion, apart from the P118-worth of projects that also violated the country’s procurement law in 2018.

In ARMM, the administration of president Noynoy has discovered ghost projects, ghost schools, ghost teachers and ghost soldiers.

ARMM also failed to remit to the Government Service Insurance System the insurance premiums or contributions deducted from the monthly pay of government employees in the region. (GMA News, 2011)

The Marcos administration must put an end to this. He can start by acting on the ghost employee issue at the BSP if only to send a message to the public that he is serious in busting ghosts in government.

Moving forward, the different branches of government can put in place internal controls to prevent fraudulent activities. By implementing these measures, our government offices can significantly reduce the risk of fraud.

Some mechanisms listed in an article published by the blog Papaya Global were meant for the prevention of ghost employees in organizations but these may also apply in the case of ghost projects and ghost expenses.

Whistle-blower policies

One suggestion is to strengthen whistle-blower policies to “create a structured and confidential mechanism for employees to report concerns, unethical behavior, or fraudulent activities without fear of retaliation.”

Unfortunately, in the Philippines whistle-blowers end up being demonized or become subject of character assassination. This should not be the case. Reports of suspicious activities in a government office should be encouraged so that unscrupulous individuals will think twice before committing fraud.

Segregation of duties

Another suggestion is to segregate duties, which involves assigning different individuals or teams to handle various aspects of the payroll process, in the case of ghost employees. This may also apply to various aspects of procurement and budget processes to safeguard against ghost projects.

Mandatory vacations

Papaya Global said mandatory vacations may also be an effective control mechanism.

“When an employee is on vacation or leave, their absence can expose irregularities in their responsibilities. Colleagues or supervisors may notice unusual activities or discrepancies in work tasks or financial records during the employee’s absence, which could indicate fraudulent activity. In addition, fraudsters often rely on maintaining continuous access to financial systems and records to cover their tracks. Mandatory vacations disrupt this continuity by forcing individuals involved in fraudulent activities to temporarily step away from their schemes, making it more difficult to conceal their actions.”

COA’s diligent and continuous flagging of fraud in the bureaucracy should also be matched with concrete actions from authorities such as the filing of cases and hopefully, conviction of those who are guilty.

The wheels of justice grind impossibly slow in the Philippines which is perhaps one of the reasons why government executives are not afraid to create fraudulent payrolls and fictitious projects just to siphon public funds.

This, too, must change. If we are to get rid of ghosts, it’s time the government does serious ghost-busting.

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Follow her on X, formerly Twitter @eyesgonzales. Column archives at EyesWideOpen (Iris Gonzales) on Facebook.

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