COA: Nayong Pilipino can’t survive beyond seven years

THE Commission on Audit (COA) has expressed doubts that the operations of the Nayong Pilipino Foundation (NPF) can continue due to its lack of programs and alternative sources of funds.

The COA’s report on NPF’s financial standing in 2021 pointed out that the “effective and efficient operations of NPF are doubtful since most of the mandated purpose/objectives of NPF were not attained due to insufficient and/or absence of programs, activities and projects (PAPs), contrary to Section 1 of Presidential Decree (PD) 37 ‘Creating the Nayong Pilipino Foundation’ and Section 2 of PD 1445.”

The COA added, “[Expenditures] relative to the implementation of PAPs totaling P7.52 million only represent 14 percent and 7 percent of the total Maintenance and Other Operating Expenses and Total Current Expenses, respectively. Lastly, there is uncertainty in the ability of NPF to continue its operations in the future considering the absence of alternative sources of revenue, the funds for its operations would be fully depleted within six to seven years.”

The COA urged the NPF management to implement a long-term plan to address its fund depletion, introduce austerity measures and draw up programs “directly related” to the firm’s mandated purpose.

Previous COA reports actually proposed the abolition of the NPF due the lack of projects and continued depletion of funds. The audit agency even recommended NPF’s merger with the National Parks and Development Committee, a unit of the Department of Tourism (DOT), due to duplication of their functions. (See, “COA proposed abolition of Nayong Pilipino Foundation,” in the BusinessMirror, May 14, 2021.)

Hiring questioned

ALTHOUGH the NPF is also an attached agency of the DOT, it is not chaired by the Tourism Secretary, unlike other government-owned and -controlled corporations under the DOT.

The NPF’s recorded a net loss of P3.54 million, a turnaround from the P10.3 million profit it recorded in 2020.

The audit agency rendered a “qualified opinion” on the NPF’s financial statements for 2020 and 2021, as it could not determine if these were faithfully represented especially in the Property, Plant and Equipment Account (P19.31 million) and its Financial Liabilities, Trust Liabilities and Other Payables accounts (P14.24 million).

The COA also admonished the NPF for continuing to hire contractual employees instead of requiring the latter to apply for regular employment.

“Likewise, there were [contractual] personnel performing functions essential to the NPF that were without corresponding plantilla positions, thus depriving these qualified personnel” of benefits and salaries befitting regular employees.”

As of December 31, 2021, the NPF had 46 employees, nine of whom were regular employees, 30 were contractual and seven were job order personnel.

The audit agency pointed out the continued depletion of funds or resources of the NPF in the past four years.

“As of December 31, 2021, the net balance of the Trust/Investment Fund earmarked for the development of the Parañaque property is only at P754.682 million from P1.232 billion (representing the advance rental paid by RWBCI in 2014), or a decrease of P477.318 million (39 percent). However, subject decrease is not attributed to the purpose for which the Fund was earmarked, but rather on absence of other sources of revenue/funds to finance the operations of NPF. Likewise, as emphasized in previous paragraphs, the bulk of expenses of NPF was on General, Administrative and Support expenses and only a minimal amount is expended for the PAPs of NPF to attain its mandated purposes.”

Fund troubles

RWBCI (Resorts World Bayshore City Inc.), now known as Westside City Resorts World Inc., has a 25-year lease agreement with NPF for a 5.5-hectare property where an integrated casino resort and hotel will be constructed.

The COA reported that from 2018 to 2021, the “NPF has been withdrawing from the funds an average of P118.900 million a year….  If NPF would not introduce PAPs that would generate additional sources of funds/revenue and/or introduce improvements on fiscal management, the total remaining Trust Fund of P754.682 million would be depleted after 6.34 years.”

The COA was also unable to verify payables and advances to various customers, supporters and contractors totaling P17.25 million, which remained outstanding for more than two years, as there were no supporting documents.

The NPF also had unsettled audit disallowances totaling P41.940 million between 2015-2018.A