Updated September 23, 2019, 11:10 AM
By Myrna M.
Velasco
The Commission on Audit (COA) has
flagged state-run Power Sector Assets and Liabilities Management Corporation
(PSALM) on P14.950 billion worth of entry that it allegedly “overstated” in its
book of accounts and financial records, including P11.18 billion worth of
dormant accounts.
The State audit agency primarily
questioned “the inclusion of dormant accounts without supporting documents
transferred from the NPC (National Power Corporation) books in the amount of
P11.18 billion,” which it claimed is contrary to Philippine Public Sector Accounting
Standards (PPSAS).
To note, PSALM is the
transferee-firm of the assets and liabilities of NPC when its power assets had
been privatized and the entire electricity sector had to go through
restructuring process as prescribed under the Electric Power Industry Reform
Act (EPIRA).
The COA formally raised the
questioned financial entries in separate sets of correspondence that it sent to
PSALM President Irene Joy B. Garcia and the board of directors of PSALM chaired
by Finance Secretary Carlos G. Dominguez III.
The State auditor similarly quizzed
PSALM on “the recognition of prepayments pertaining to various creditable
withholding taxes in the amount of P1.538 billion,” which had been booked as
inter-agency receivables.
COA further emphasized that PSALM
also committed “erroneous classification of 12-percent VAT (value added tax) in
the amount of P1.487 billion from the sale of the Pantabangan-Masiway and Magat
power plants.”
It stressed that such entry
“understated the account” because that was booked as “other assets-prepayments”
from inter-agency receivables due from national government agencies.
The audit agency likewise indicated
that the power firm booked “accruals in the amount of P10.945 billion” under
‘other-payables account’ instead of having these entries as ‘financial
liabilities-accounts payable,’ which it said is contrary to the accounting
rules set forth by the COA.
It similarly noted that PSALM’s
asset-in-trust with NPC account balance amounting to P7.735 billion “remained
unreconciled with NPC’s trust liability account balance of P1.346 billion.”
Such “unreconciled entry” then,
according to COA, left a variance of P6.390 billion as of its financial review
period, which has essentially been “affecting the fair presentation of the
account.”
The other important matters tackled
by the State auditor in PSALM’s financial report are the “back wages claims” of
the NPC Drivers and Mechanic Association (DAMA) for which NPC and PSALM are the
respondents; and another one is prepayment concern on concession fees of the
National Grid Corporation of the Philippines (NGCP) which is currently pending
for arbitration proceedings in Singapore.
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