The Commission on Audit has called the attention of the Department of Budget and Management Procurement Service (PS-DBM) for an unauthorized P3-billion high-yield investment in government banks outside its mandate.
It cited the failure of the PS-DBM to revert the investment to the general fund of the Bureau of Treasury in violation of Executive Order No. 431 issued on May 30, 2004.
The action was also against the Department of Finance-DBM-COA Joint Circular No. 04-2012 issued on Sept. 11, 2012, mandating that all dormant accounts and unnecessary special and trust funds be reverted to the general fund.
The 2012 joint circular said dormant accounts refer to collections authorized by law to be deposited with an authorized government depository bank and have remained inactive for more than five years.
“Review of the cash in bank [such as] time deposits, local currency disclosed that the PS-DBM invested its funds in high-yield savings account with the LBP and the Development Bank of the Philippines (DBP), to earn interest at higher rates as compared to that of a current or savings account,” COA’s report said.
“It is not in PS-DBM’s mandate to make investments and it has no authority to invest in a high-yield savings account. The practice of investing cash in a high yield savings account, therefore, deviates from its mandate of procurement of CSEs which requires the utilization of funds,” it said.
The COA also said that while PS-DBM’s high-yield savings account was terminated and the proceeds were returned to its LBP current account in 2020, the DBP high-yield savings account remained with a balance of P3.001 billion.
“Out of the balance, P1.363 million which represents interest income earned was automatically swept into the account of the BTr as evidenced by the credit advice issued by the DBP on March 18, 2022,” it said.
“The fund source of the P3.000 billion deposited with the DBP could not be specifically identified. Since the funds with the PS-DBM’s are fund transfers from client-agencies whose budgets are provided on an annual basis, any fund balance is to be reverted to the general fund. Also, the high-yield savings account has been established for more than five years and has remained inactive, with the incurrence of interest income as the only transaction,” it added.
Given the findings, the COA has recommended that PS-DBM ask its head of Treasury Division to immediately remit the balance of the savings to the BTr.