COA seeks Ombudsman probe into misuse of DAR funds

MANILA, Philippines – The Commission on Audit (COA) affirmed an earlier notice of disallowance and ordered the refund of P61.5 million in incentives illegally paid to Department of Agrarian Reform (DAR) officials from 2007 to 2009.

COA also said the records and audit findings will be referred to the Office of the Ombudsman for investigation and possible filing of charges.

The case involved the Agrarian Reform Fund (ARF) which was used to pay P61.5 million worth of incentives and other cash benefits to officials and employees of DAR Central Luzon under the Collective Negotiation Agreement (CNA).

COA said former budget secretary Rolando Andaya may be held liable for submitting an opinion in 2008 that DAR was allowed to use the ARF for the CNA. Other officials who authorized the diversion of funds are also liable, according to state auditors.

They are now ordered to pay back the amount to the government, which will restore it to the special fund.

But there's a bright spot for employees who received the cash incentives, as COA cited an earlier Supreme Court (SC) ruling that exempts some of them from returning the money.

"The SC has ruled that by way of exception, passive recipients or payees of disallowed salaries, emoluments, benefits, and other allowances need not refund such disallowed amounts if they received the same in good faith," COA said.

COA Chairman Michael Aguinaldo, Commissioner Jose Fabia, and Commissioner Isabel Agito unanimously ruled that the ARF is for the exclusive use of "payment of compensation to landowners and expenses involved in the implementation of support services" for the Comprehensive Agrarian Reform Program (CARP).

COA clarified that the CNA is legal, but the use of the ARF was not.

The ARF was a fund set aside by former president Corazon Aquino in 1987, with an initial amount of P50 billion for agrarian reform. The special fund was later augmented through the sale of forfeited assets of the Marcos family and cronies. – Rappler.com