PHISGOC exemption claim for SEA Games rejected

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    GOVERNMENT auditors have shot down the claim of the Philippine Southeast Asian Games Organizing Committee Foundation Inc. (PHISGOC) that it is not covered by a Commission on Audit circular governing transfer of government funds to non-government organizations or people’s organizations (NGO/PO).

    In a 137-page audit report on the Philippine Sports Commission (PSC) released last December 22, the COA said PHISGOC is an NGO as far as COA Circular No. 2007-001 is concerned, which means it is bound by the requirements before it can qualify for government funding.

    These requirements include an application supported by financial reports for the past three years, a Work and Financial Plan (WFP), details of proponent’s contribution to the project which should be equal to 20 percent of total cost in the form of labor, land, facilities, or equipment.

    Auditors said the PSC’s financial records showed PHISGOC received a total of P2.034 billion in 2019 and additional “financial assistance” of P417.55 million from January to June 2020.

    Of the said amounts, the sum of P2.23 billion remains unliquidated.

    In its remarks to the audit report, PHISGOC contended that the Philippine hosting of the 30th SEA Games in 2019 is “sui generis” (in a class of its own) because it benefited the entire country and the Filipino people and not a limited number sector defined in the circular as beneficiary.

    It said the COA circular’s financial capability and equity requirement are not applicable to the SEA Games.

    PHISGOC also invoked government support for its participation, saying Congress approved all proposed expenses and requirements as contained in the SEA Games Master Plan.

    In addition, it reminded the COA that the same master plan secured the approval of the “Cabinet and the President during the Cabinet meeting of 06 May 2019.”

    However, it assured the COA that it will make a full liquidation of all government money received and will submit all “invoices, billings, statement of accounts, (and) purchase orders/contracts.”

    In its rejoinder, the audit team balked at the claim of exemption even if this was supported by the PSC.

    It has also issued a notice of suspension against the PSC-PHISGOC transactions for non-submission of the documentary requirements.

    “Accordingly, Notice of Suspension (NS) No. 2020-02 was issued by the audit team requiring both the PSC and PHISGOC to submit the WFP and report showing the overall budgetary requirements in connection with the holding of the 30th SEAG,” the team said.

    A notice of suspension serves as a warning to submit all the documentary requirements that, unless complied with within the reglementary period, may ripen into a notice of disallowance which will require liable individuals to refund the full amount involved.

    Auditors noted that the PSC, PHISGOC, and the Philippine Olympic Committee all previously acknowledged the applicability of COA Circular No. 2007-001 in the memorandum of agreement (MOA) and the Tripartite Agreement executed among them.

    “It is stated in both the MOA and the Tripartite Agreement that the PSC is bound to ensure that PHISGOC complies with COA Circular No. 2007-001. PHISGOC is an NGO within the purview of the COA circular and must therefore be treated as the same,” they declared.

    The COA noted that PHISGOC remitted P196.806 million to the PSC supposedly representing accommodation collection revenues totaling P164.486 million (February 2020) and broadcast revenues amounting to P32.32 million (July 24, 2020).

    However, in the absence of documents showing the basis for the revenue-sharing mechanism, the commission said there is no way to determine if the amount represented the “reasonable government share.”