COA flags Clark Dev’t Corp. over unauthorized use of housing units by board members

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Metro Manila (CNN Philippines, April 11) -- The board of directors of the Clark Development Corporation were provided housing units without specific authority under the law, the Commission on Audit said.

“The Board of Directors of the Clark Development Corporation were provided housing units (staff houses/villas) without the specific authority to enjoy the benefit under the law or charter, or approval from the Office of the President,” said COA in its annual audit report for 2020.

According to Presidential Decree No. 1445, "Government funds and property shall be spent or used solely for public purposes.”

Meanwhile, the Executive Order No. 24, s. 2011 also states that “salaries, allowances, benefits, and other bonuses shall not be allowed unless specifically authorized by law or charter and approved by the President.”

The CDC Circular No. 20-1, dated Oct. 22, 2020, provides that a housing unit can be awarded to board members. However, the circular also states that awarding such benefits should be “properly observed and not abused.” It added that the award shall be determined by the CDC chairman, vice chairman, and president.

But the said circular remained unpublished and only a Secretary’s Certificate dated February 11, 2021 was issued as a basis for its approval.

“However, the Audit Team was precluded in determining the specific date of its effectivity date since the aforementioned Circular has not yet been signed by the former CDC Chairman due to his resignation; thus, it remained unpublished,” said COA.

Citing records, the state auditors also noted that some of the board members have been occupying the eight units since 2017. It added that the villas have incurred an aggregate amount of P1.23 million for electricity and water consumption.

Moreover, five of the housing units were renovated in 2018 at the expense of the CDC amounting to P3.56 million.

The annual audit report also showed that the BODs only attended an average of three meetings per month. Hence, the COA did not see the necessity of providing a staff house to the officials.

The CDC is a non-chartered, government-owned and -controlled corporation duly registered with the Securities and Exchange Commission.

With these findings, the state auditors recommended the CDC president and CEO to advise the BODs to vacate their respective staff houses or villas. It also recommended that the BODs, if warranted, to refund the aggregate utility expenses incurred during the period of their occupancy.

The COA also recommended that the CDC should seek the approval of the Office of the President to grant additional benefits to the BODs.

In response to the recommendations, the management said that BODs need houses near CDC.

“As the governing body of CDC, it is important that they are immediately available and present during official events and meetings,” read the report, citing the CDC.

“The BODs performing their official functions are not limited to attendance to meetings as they have to know what is happening on the ground; thus, their presence in Clark is required from time to time,” it added.

Although the intention of the management may be good, the state auditors said in a rejoinder that they did not find the response “acceptable” in the light of E.O. No. 24.

“Had the said E.O. intended to allow the board members to receive other benefits on top of what they are already enjoying, it would have expressly stated so,” said COA.

The CDC is a non-chartered, government-owned and -controlled corporation duly registered with the Securities and Exchange Commission.

Review of policies

In a separate statement, the CDC further responded to the findings. The management said it conducted a review of the CDC’s policies concerning the use of staff houses.

“CDC President and CEO PBGen Manuel R. Gaerlan (Ret.), who assumed his office on January 14, 2021, directed management to review CDC’s policies pertaining to the use of vehicles and staff houses by individuals and government offices, including the COA auditor who enjoys the same privilege,” read the statement released on April 12.

“The review started since the audit observations were received earlier this year. Several communications have already been exchanged between CDC and COA towards the resolution of this concern. The news reports actually came out after the audit observations were discussed as a special agenda in the board meeting held on April 8, 2021,” it added.

Moreover, the CDC justified that it is “more cost effective” for the BOD to stay in houses than in hotels. It also commented on the P1.23 million the villas supposedly incurred on utilities.

“We also need to clarify the aggregated amount of P1.23 million spent for utilities. The reckoning periods of the individual house utility expenses vary from three months to 41 months. The total does not represent a uniform assessment of expenses,” said CDC.