DOTr: Transfer of Unspent Funds to Attached Agencies Legal

Wazzup PIlipinas!

The Department of Transportation (DOTr) explained the legality and the wisdom behind the downloading of the department’s 2015 unused funds to its attached agencies, which was pointed as (a) possibly illegal (b) a move to “pass the buck” and not to “spend the buck”

During the plenary deliberations at the Senate last November 22, DOTr said some of these funds were downloaded to its attached agencies via a Memorandum of Agreement (MOA), a move guided by existing government audit regulations.

Allowed by COA

Downloading funds to an attached agency is allowed under Commission on Audit (COA) Circular 94-013 dated 13 December 2014. The circular states that the source agency, which originally programmed a project and received the appropriation for a project, is allowed to transfer funds to any department or office of the national government capable of implementing or continuing the project.

“Downloading of projects through an MOA is guided by COA, which ensures that the transferred fund is properly taken up in the books of both agencies and are used only for the intended purpose,” said DOTr Undersecretary for Finance Garry De Guzman.

Limited time

The new administration took over 30 June 2016, giving the new DOTr office six months to allocate the unspent funds from its 2015 budget before its expiry on 31 December  2016.

Government agencies have two years to allocate its budget before it will be reverted back to the National Treasury as “unobligated” funds.

Entering into a MOA with attached agencies is seen as a practical way to ensure that specific projects will continue.  

“We are trying to handle backlogs from the past budget as much as we can, but this was a transition phase. We came in six months prior to the reversion of funds,” he said.

From PHP 19.2-billion in June 2016, the DOTr was able to obligate PHP 1.3-billion, leaving the total amount of unspent funds for 2015 to PHP 17.9-billion as of October 2016.

What will happen to the remaining PHP 17.9-billion ?

Of the remaining unspent funds, PHP 7.9-billion was downloaded to the DOTr’s attached agencies, PHP 6.2-billion was allotted for procurement until the end of the year, while the remaining PHP 3.8-billion will be reverted back to the Treasury.

Most of the downloaded funds were meant to bankroll regional airport projects. Among the recipients of the unspent funds were the: Manila International Airports Authority (MIAA), Clark International Airport Corporation (CIAC), Civil Aviation Authority of the Philippines (CAAP), and Philippine Ports Authority (PPA).

ATTACHED AGENCY	AMOUNT (est.)
Manila International Airports Authority	PHP 474-Million
Clark International Airport Corporation	PHP 800-Million
Civil Aviation Authority of the Philippines	PHP3.1-Billion

Why it is better to download funds than revert it?

Government agencies are supposed to spend funds and not save it.  When government spend the infrastructure funds, it implements the projects previously identified and approved to be beneficial for the citizens.

Transparency and accountability

The DOTr assures the public that the budget spent and allocated will be accounted for and properly taken up in the books of all agencies concerned. Apart from the FOI portal of the government, the major infrastructure agencies -- DOTr, DPWH, BCDA and the NEDA will launch a Transparency Portal that will have the project details of all the major infrastructure projects of the Duterte administration

“Proper accounting and reporting shall be made to ensure the appropriate utilization of funds,” added De Guzman.