GOVERNMENT auditors have required officials and employees of the National Food Authority (NFA) to refund P144.045 million in cash incentives and P87.126 million worth of rice subsidies released in 2023 based on dubious performance ratings for 2020 and 2021.
In its 2023 audit of the NFA uploaded on December 1, 2024, the Commission on Audit (COA) said the NFA gave itself higher performance scores which were used as bases for paying executives and employees P84.877 million Collective Negotiations Agreement Incentives (CNAI) in 2020 and P59.168 million in 2021.
However, auditors found the numbers suspicious after they found that the NFA got lower scores issued by the Governance Commission for GOCCs (GCG).
“The NFA used performance ratings of 85 per cent for CY 2020 and 75 per cent for CY 2021 as basis for the grant of the CNAI which are not consistent with the GCG validated Performance Scorecards of the NFA showing ratings of 26.32 per cent and 43.96 per cent for CYs 2020 and 2021, respectively,” the COA said.
Citing Budget Circular Nos. 2020-5 and 2021-3 issued by the Department of Budget and Management (DBM), auditors pointed out that only agencies that garnered performance scores of 70 percent or higher may qualify for CNA incentives.
Hence, they declared, the P144.045 million NFA cash incentives were irregular.
In addition, the audit team found that the NFA management relied on the CNA of 2018 that it signed with the NFA Employees Association (NFAEA) which only had a three-year effectivity ending on September 6, 2021.
“Based on the foregoing, the CNA approved on September 6, 2018 by the NFA Management and the NFAEA had already expired and ceased to be valid when the NFA Management granted the CYs 2020 and 2021 CNAI to its officials and employees in CY 2023,” the COA said.
“The Management-Union Consultative Council (MUCC) Resolution Nos. 01 and 03, series of 2023, both approved on February 20, 2023, for the grant of the CYs 2020 and 2021 CNAI… have no force and effect as they are anchored on a CNA that is no longer subsisting,” the commission added.
Moreover, auditors doubted that the agency can validly declare any savings which can be used for the grant of CNA incentives, noting that the audited Financial Statements showed the agency posted a P15.838 billion deficit in 2020 and P9.808 billion in 2021.
Likewise, auditors also questioned the approval of rice subsidies totaling P87.126 million for officials and employees of the NFA who were hired on July 1, 1989 onwards.
Auditors noted that according to Presidential Decree No. 1597 s. 1978, Memorandum Order No. 20 s. 2001, Joint Resolution No. 4 s. 2009, and Executive Order No. 7, s.2010 the subsidy was a fringe benefit that required prior presidential approval.
“Considering that the NFA did not secure the approval of the President of the Philippines prior to the grant of the rice subsidy to its officers and employees, the said grant in the form of one bag 50-kg. premium rice per month per employee… has no legal basis,” the COA said.
In the absence of any appropriation in the agency budget for additional compensation, the audit team said funding may have come from the budget intended for the procurement of palay from local farmers.
“Any unutilized inventory costs are presumably related to palay procurement fund which could not be considered as savings to be used for other purposes since the fund released by the DBM for palay procurement has a specific purpose,” it pointed out.