The Trade and Investment Development Corp. (TIDCORP) which was a conduit for the notorious Disbursement Acceleration Program (DAP) or known otherwise as the Presidential pork barrel under the term of former President Benigno Aquino continued to book huge losses from questionable transactions based on the recent Commission on Audit (CoA) report.
The organization’s mandate is to facilitate international trade by offering financial or other assistance nor guarantees to local enterprises particularly small or medium-sized companies.
The CoA report indicated that the staggered booking over five years of the deficiency in allowance for expected credit loss (ECL) of the state firm that totaled P932.978 million was contrary to state standards.
As at 31 December 2018, the Retained Earnings and Loans Receivable were overstated by P795.252 million and P198.843 million, respectively, while the Pari-passu Payable is understated by P596.409 million.
Under section 5.5 of the Philippine Financial Reporting Standards, an entity shall recognize a loss allowance for ECL on a financial guarantee contract.
Car lease queried
The CoA also directed TIDCORP to use legal remedies to recover the P2.074 million outstanding car lease payments of officers.
State auditors flagged the outstanding lease payments which were not collected upon the separation of the former employees from TIDCORP.
The audit agency said this is contrary to Section 5(b) of the Rules and Regulations for the implementation of the Motor Vehicle Lease Purchase Plan (RR-MVLPP) for government financial institutions (GFI) officials as approved by the President.
CoA cited the provisions of the Bangko Sentral ng Pilipinas Monetary Board Resolution 132 which provides for the plan that involves the acquisition of motor vehicles to be leased or sold to a qualified GFI.
The state auditors also mentioned Section 5(b) of the RR-MVLPP requires the officer who availed the plan will have to submit to the lease purchase agreement which will be bound by the rules and regulation provided in the plan.
Receivables pile up
However, if the concerned separated or retired officer from the service before the end of the 10-year lease term, the purchase price shall be paid by the officer in full minus the rental already paid.
CoA reported that at the end of 2018, the TIDCORP has stated a total Lease Payments Receivable of P11.707 million and upon its audit, the account disclosed that P2.074 of the total amount were the outstanding balance from the resigned and retired officers and members of the board.
It said TIDCORP has not implemented the payment policy that was provided under Section 5(b) of the RR-MVLPP.
“We noted that a former officer, who resigned in June 2018, did not pay her outstanding lease receivable balance of P1.088 million upon her separation from the service,” the audit agency said in the report.
“Further, she has not rendered at least five years of service to TIDCORP and has not paid at least 50 per cent of the total cost of the vehicle as of her resignation, contrary to BR Nos. 1553 and 1578,” CoA added.
President’s okay needed
CoA reiterated their previous recommendations to consider the payment policy stated under the Section 5(b) of the RR-MVLPP saying that the latter policy requires full payment by concerned officer or directors.