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AG unhappy as millions flow through gov’t loopholes

Flowing free: The Auditor General is unimpressed with government’s debt and arrears recovery
The Auditor GeneraI (AG) has blasted government for dragging its feet in collecting more than P419 million owed in arrears by civil servants and members of the public, as well as another P77 million in student, motor and vehicle loans dating back to 2004 and earlier.

Pulane Letebele released her report for government and parastatals accounts last week, covering the fiscal year to March 2019.

Government’s porous debt collection flies in the face of an estimated P13.6 billion budget deficit for 2020/21 which will have to be funded through higher local borrowing, greater tax collection and dipping into the foreign reserves.

Letebele noted that despite repeated adverse comments in previous reports on the slow rate of collections, government revenue debts show that there was little improvements across most ministries and departments.

By April 2018, at least P440 million was owed to government in arrears and during the financial year to March 31, 2019, just P20.8 million was collected. A total of P372.5 million was abandoned across ministries during the period.

“Unless accounting officers in the ministries make concerted efforts to collect these concessionary debts, because of the government cash-based accounting, the public revenue will continue to suffer losses through abandonment with implications for the budgetary processes,” said Letebele.

Government arrears include debts owed by ordinary members of the public and corporations for various public services as well as internal debts owed by civil servants. Letebele was particularly irked by administrative debts such as those arising from private usage of private telephones by civil servants.

“(These) continue to be a dominant feature of these year-end balances with some coming from previous years.

“This is a

result of failure to comply with the terms of General Orders which require that the cost of unpaid private calls should be deducted from the salaries of the officers concerned,” she said.

Letebele also expressed frustration with the P1.7 billion owed by various government beneficiaries as advances. The amount includes the grant loan scheme to students, motor vehicle and property loan scheme to civil servants, salary overpayments and the training bond to civil servants.

Of the total amount as at March 2019, P77.7 million was classified as non-moving dating back to 2004 or earlier. Non-moving means no interest is being charged on the arrears and the advances have to be assessed as recoverable or non-recoverable.

Non-moving student loans were pegged at P23.6 million by March 2019, while the motor vehicle and residential property scheme for civil servants was about P78 million. Overpayment of salaries was about P19 million.

The fact that the advances are non-moving means government made the payments years ago, with Letebele noting that some dated before 2004 and had not been collected.

“In addition to the spectre of non-moving items there are also credit balances of large amounts, which suggest overpayments or accounting errors, which should have been investigated and timely corrective action taken,” she said.

“If properly managed and monitored some of these (advances) would have been considered for write-off.”


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