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CoA warns: PCSO charity funds may soon be depleted

By Ben R. Rosario

The Commission on Audit has warned that the charity funds of the Philippine Charity Sweepstakes Office may soon be depleted as it uncovered the disbursement of R5.890 billion to finance activities not included in the State lottery firm’s mandate to help the poor.

This was learned from the 2017 annual audit report for the PCSO which also disclosed that lotto thermal papers it has procured were overpriced by R291.48 million by supplier TMA Group of Companies Pty. Limited, an Australian firm locked in a long legal controversy with the PCSO over disagreements over the supply contract.

In the same report, CoA also observed that:

1. Conflicts over the lotto paper supply agreements entered into by the PCSO with TMA and the Philippine Gaming Management Corp. has resulted in the “critical inventory balance of lotto supplies” during the year.

2. Online Keno gaming operations of the PCSO have incurred deficits in its prize fund from 2006 to 2017, saying that prize payouts have exceeded the allocated amount for prizes by R4.283 billion.

3. Release of R2.2 million for the 2017 PCSO Christmas Party at the EDSA Shangri-La Hotel and Resort in Mandaluyong City, with the State-owned lottery firm spending R2,000 per head for 1,100 officials and employees, is considered extravagant expenditure.

4. For paying R1.469 million in goods and services for the PCSO 2017 Christmas celebration, suppliers were freed from payment of withholding tax.

“Expenses not related to charity programs and projects, hence not in accordance with Section 6.B of Republic Act No. 1169, as amended, totaling R5.890 billion, were charged to the Charity Fund, which may deplete the same and eventually affect the delivery and implementation of the mandated purposes of the CF,” CoA said.

For 2017, the CF utilization reached R18.035 billion, exceeding the net allocated amount of R14.405 billion, thus, incurring a R3.533-billion deficit.

State auditors said the deficit was caused by the disbursement of R5.890 billion to activities that “were not related to health programs, medical assistance and services, and or charities of national character” as provided for under the PCSO charter.

They said disbursements from the CF that should have been excluded were Commission on Higher Education program, R318,589,872; payment of documentary stamp taxes to the Bureau of Internal

Revenue, R5,298,392,920.89; salaries of employees assigned to the PCSO Charity Clinic, R67,980,884.41; and medical benefits of all PCSO employes, R204,593,025.54.