Arroyo gov’t spent P36 billion in unauthorized expenditures in 2007

Published by rudy Date posted on December 14, 2008

Critics preparing next year’s impeachment complaint against Pres. Arroyo may want to consider this: the administration spent over P36 billion in 2007, well above the sum approved by Congress for that year. This amount excludes funds they were not able to release in agency budgets including those transferred to over-all savings.

This is the finding in a budget study conducted by the International Center for Innovation, Transformation, and Excellence in Government (INCITEGov), a group of former senior Arroyo government officials who are critical of the administration. Former Arroyo budget Secretary Emilia Boncodin led the study.

The group examined sums spent and allocated by the national government in 2007 using the 2009 National Expenditure Program (NEP, the budget proposal the president sends Congress annually) as key reference.

What enabled the government to exceed its budget limits, according to Boncodin, is the fact that the budget for 2007 was approved late—after the fiscal year has already started. This gave the administration the power to reenact portions of the 2006 budget to finance government expenditures from January to March 2007.

When the 2007 budget was finally approved, however, the administration also used up the entire year’s appropriations, in addition to the reenacted portion of the 2006 budget that it used in the first quarter.

The 2009 NEP, for instance, showed that in 2007, the defense department’s Office of the Secretary (DND – OSec) was allowed to reenact practically its entire 2006 budget (around P592 million).

New General Appropriations for the DND – Osec in the General Appropriations Act (GAA) for 2007 (RA 9401) was only P576 million. But the reenactment of the 2006 budget allowed its available appropriations for 2007 to balloon to P1.286 billion. Of this amount, the DND – Osec spent P985 million—well in excess of the budget Congress authorized it to spend for that year.

Without the reenacted budget, the total available appropriations for the unit should have only been around P694 million. This already includes other appropriation sources made available to the unit for that year. In fact, for 2009, the total proposed obligations for the DND-Osec is only P532 million, according to the NEP.

This is true across almost all of the departments, Boncodin said. In some cases, departments even reenacted more than the equivalent of a quarter of the 2006 budget. “This is untenable,” she said.

The Constitution provides that in cases when Congress fails to pass a budget law, the budget for the previous year is automatically reenacted. This practice, however, is a wrong interpretation of the constitutional mandate, according to Boncodin.

Since Congress eventually approved RA 9401 (2007 budget), the administration should have used it to determine spending limits. To avoid exceeding its authorized budget, the administration should have considered the re-enacted portion of 2006 budget as “advances” on the 2007 budget. This meant the amount spent for the first quarter of the year should have been deducted from the sum government agencies were allowed to spend for the entire year.

Budget authority given by Congress under the GAA, Boncodin pointed out, is good for one fiscal year. “A fiscal year is supposed to be 12 months. You cannot use the entire budget given for 2007 in just 9 months.”

To prevent similar incidents from happening in the future, Boncodin advised Congress to add a new provision in the budget law that prohibits the adding of reenacted appropriations to the current appropriations as this violates the one-fiscal-year concept of the general appropriations law.

Alternatively, Congress should pass a resolution in the event of failure to enact new appropriations.

Moreover, Boncodin said, Congress should make it a point to always approve a new budget on time, before the beginning of the fiscal year. “If the president fails to submit a budget (30 days after the State of the Nation Address), it can be a ground for impeachment,” she pointed out.

If the Constitution puts that much stress on the executive’s responsibility to submit a budget proposal on time, Congress should take it upon itself to give as much importance to approving the budget on time as well. –Gemma Bagayaua,

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