On a Facebook page ”Basura” published an auditors report showing the inconsistencies of the PCSO funds amidst Duterte’s recent shutdown of the agency and a potential privatization. Now, the question remains — where did the funds go?

MORE THAN P30 billion earnings of Philippine Charity Sweepstakes Office for the past two years are missing, official documents show.

An independent auditor’s report dated June 14, 2019 and signed by Belen B. Ladines, Supervising auditor of the Commission on Audit indicated that the missing PCSO income for 2017 and 2018 were allocations for charity, new building and payments for winnings and dividends.

NUMBERS DID NOT MATCH

It also indicated that financial reports and income receipts were manipulated and bank balance do not reconcile with financial records of the PCSO.

“Faithful representation of the balance of cash and cash equivalents account presented in the financial statements in the amount of P9.815 billion as of December 31, 2018 was not established due to variances totalling to P509.22 million between balances per books and confirmed bank balances,’’ the report said.

TOKEN ASSISTANCE

Grumbling from charity seekers had been reported since last year, that PCSO medical aid had dwindled significantly, compared to the previous administration’s medical assistance.

“PCSO under the Duterte administration gave only a token of P15,000 financial assistance regardless of illness and hospital bill,’’ a recipient told Basura.

“I don’t want to sound ungrateful but, but the effort of lining from dawn till dusk for at least a week, and the help is not even worth it, because you also spend on food and fare to get the guarantee letter,’’ the recipient said.

Previous records showed that medical assistance from previous administrations was relatively MORE SUBSTANTIAL THAN THE CURRENT ONE.

“As long as your papers are in order and your hospital expenses are big, the financial assistance is at least half of that,’’ according to a long time employee of the PCSO who agreed to talk, on the condition of anonymity.

DWINDLED AND SUSPICIONS OF DIVERTED FUNDS

When asked why the policy on financial assistance was changed: “We had to make do with what we had, because the agency cash flow had quickly dwindled in the past two years, we ourselves cannot explain it, where did the money go?”, the PCSO employee said.

Pressed for details, the PCSO employee added, “we hear discreet discussion of funds being diverted to other “charity’’ operations that particularly peaked last year.’’

MORE UNCONFIRMED REPORTS & POSSIBLE COVER-UPS

“Talks of monetary rewards for policemen who neutralized a drug addict or pusher supposedly came from the PCSO funds, but cannot properly record it as such is also ripe inside the agency, they cannot completely cover up the whole scheme,’’ the employee added.

UNRECORDED SMALL TIME LOTTERY INCOME ( STL)

The same report which was said to be the trigger of President Rodrigo Duterte’s order to suspend PCSO operations revealed that around P16 billion income from Small time Lottery were not entered in the agency records.

STL was created by the previous government to eradicate the illegal numbers game, jueteng which was also a source of corruption of policemen and politicians.

“STL accounts were understated by P7.320 billion, P2.983 billion and P6.034 billion respectively due to non-recognition of Presumptive Monthly Retail Receipts for calendar years 2017 and 2018 despite being valid revenues and receivables from authorized STL agents,’’ the auditor’s report said.

Sources in the Palace said that Duterte was informed of a connivance between STL operators and some former and current PCSO officials to hide the money from the records and fill their own pockets.

But a source familiar with the set- up said “that huge amount of money and manipulation of records could not be done by a single person. “.

ORDER TO SHUT DOWN, LIKE THE WAR ON DRUGS

Edwin, not his real name, is a legitimate operator from Baguio City. He calls the shutdown order as anti-poor and irresponsible.

“The local lotto operators are victims of Duterte’s incompetence and irresponsibility. We have nothing to do with their corruption, but we are the most affected,’’ Edwin said when asked about his sentiments of the president’s order to close down all PCSO licensed gambling operations.

“What will happen to our capital, what will we use to pay the rent and salary of the staff? It’s just like his war on drugs, its anti-poor.,’’ the lotto operator said.

“We are treated like criminals,’’ he added.

NO LET-UP

No arrests so far have been made, but the police have reportedly closed around 24,000 gambling establishments. Duterte ordered the police and the military to close them all down within 24 hours.

COA PROPOSAL

Contrary to what Duterte implied in his dramatic announcement on Friday evening that it was his decision to suspend PCSO operations because “he hates corruption’’.
The report indicated that it was COA who made the proposal.

“Management is responsible for assessing the PCSO’s ability to continue as a going concern, disclosing, as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate PCSO or to cease operations, or has no realistic alternatives, but to do so.’’

ERRONEOUS RECORDING OF CHARITY TRANSACTIONS LED TO MISSING FUNDS

The COA report also mentioned that around P233 million of charity funds could not be accounted for.

“The retained- earnings charity funds account with a year-end balance of P2.722 billion was understated by 232.600 million due to erroneous recording of certain transactions pertaining to the charity fund.’’

UNCLAIMED WINNINGS NOT IN CHARITY ALLOTMENTS

“The PCSO is mandated that all balances of any funds shall be regularly reverted to and form part of the charity fund, thus there is nothing left to be declared and remitted as dividends,’’ the report said.

As of December 2018, according to the report, the PCSO is still negotiating with the Finance Department not to remit P8.422 billion of unclaimed winnings from 1994 to 2011.

OVERSTATEMENTS OR UNDERSTATEMENTS

“Performance Bonds Payable accounts having balance of P4.044 billion in the financial statements as of December 31, 2018 was overstated by P497.163 million, while the balance of the other affected accounts were misstated of the same amount.’’

DOUBLE PAYMENTS

It also said that cash equivalents was also overstated by P8.631 million due to reversion of cash account of reported unreleased checks which were already cleared by the bank and debited from the PCSO bank accounts.

INTEREST FROM NEW BUILDINGS FUND ALLOCATION

Assets generated as well as liabilities incurred from the P2.5 billion trust fund maintained with the Land Bank of the Philippines for the construction of the PCSO building was not reported separately in the Statement of Financial Position of PCSO as of December 2018.

Due to this error, records of cash equivalents, prepayments and liabilities were understated by P509.424 million, P16.801 million, P1.549 million, and P3.438 million totalling to P531.212 million.

While the financial assets was overstated by 524.336 million.

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