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Coa To Audit Philippine National Red Cross: Bayano, Hazel Cortel, Ramon JR

The document discusses the issue of whether the Commission on Audit (COA) has jurisdiction to audit the Philippine National Red Cross (PNRC). It outlines that the PNRC is defined as an independent, non-governmental organization under Republic Act 10072. As such, the COA chairman stated they do not have jurisdiction to audit the PNRC, except for PhilHealth payments. While the COA can audit some NGOs receiving government funds, the PNRC is funded through private donations and the Constitution exempts the PNRC from government audit due to its independent status.

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122 views3 pages

Coa To Audit Philippine National Red Cross: Bayano, Hazel Cortel, Ramon JR

The document discusses the issue of whether the Commission on Audit (COA) has jurisdiction to audit the Philippine National Red Cross (PNRC). It outlines that the PNRC is defined as an independent, non-governmental organization under Republic Act 10072. As such, the COA chairman stated they do not have jurisdiction to audit the PNRC, except for PhilHealth payments. While the COA can audit some NGOs receiving government funds, the PNRC is funded through private donations and the Constitution exempts the PNRC from government audit due to its independent status.

Uploaded by

lovelycruz yano
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Bayano, Hazel

Cortel, Ramon Jr.

COA TO AUDIT PHILIPPINE NATIONAL RED CROSS

BACKGROUND OF THE ISSUE

 President Rodrigo Duterte is insisting on an audit of the Red Cross following his verbal
tussle with Sen. Richard Gordon, who concurrently chairs the PRC.
 The President has said that because the PRC receives money from both the Philippine
Charity Sweepstakes Office and the Philippine Amusement and Gaming Corp., it is
subject to a government audit.
 Senator Gordon has said that PRC cannot be audited.
 The PRC further said that under Republic Act 10072, the PRC is defined as "a voluntary,
independent, and autonomous, non-governmental organization."
 With this, the organization does not receive appropriations from the government, said the
PRC.
 COA’s Chairman, Mr. Aguinaldo said, “We do not have the jurisdiction to audit the
Philippine Red Cross. The only thing we can audit is Philippine Health Insurance Corp.
payments to the Philippine Red Cross.” He also said that the audited payments to Red
Cross would be part of COA’s audit of PhilHealth.

CONSTITUTIONAL PROVISIONS AND LIMITS

Section 2(1) of Art. IX-D of the 1987 Constitution states that:

xxx The Commission on Audit shall have the power, authority, and duty to examine,
audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures
or uses of funds and property, owned or held in trust by, or pertaining to, the
Government, or any of its subdivisions, agencies, or instrumentalities, including
government-owned or controlled corporations with original charters, and on a post-
audit basis:

a. constitutional bodies, commissions and offices that have been granted fiscal
autonomy under this Constitution;

b. autonomous state colleges and universities;

c. other government-owned or controlled corporations and their subsidiaries; and

d. such non-governmental entities receiving subsidy or equity, directly or indirectly,


from or through the Government, which are required by law or the granting
institution to submit to such audit as a condition of subsidy or equity. However,
where the internal control system of the audited agencies is inadequate, the
Commission may adopt such measures, including temporary or special pre-audit,
as are necessary and appropriate to correct the deficiencies. It shall keep the
general accounts of the Government and, for such period as may be provided by
law, preserve the vouchers and other supporting papers pertaining thereto. xxx

The Philippine National Red Cross is not one of the subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporation with original charters
that it could audit since it is considered as a non-government humanitarian organization as
clearly provided for in Sec. 3 of RA 10072, otherwise known as the Philippine Red Cross Act of
2009.

Section 3 of RA 10072 states that:

xxx The Philippine Red Cross shall be recognized as the voluntary, independent and
autonomous nongovernmental society auxiliary to the authorities of the Republic of the
Philippines in the humanitarian field, to assist said authorities in discharging the
obligations set forth in the Geneva Conventions and the Statutes of the International Red
Cross and Red Crescent Movement. Pursuant to the fundamental principle of unity, the
Philippine Red Cross shall be the only national society of the Red Cross in the Republic
of the Philippines and be directed by a central body, and shall perform the duties
inherent upon such status over the entire Philippine territory. xxx

The same law does not subject the Philippine National Red Cross to audit by the COA.
However, on Section 7(h) it shall, at the end of every calendar year, submit to the President of
the Philippines an Annual Report Containing its activities and showing its financial condition.
Still, the said provision merely directs PNRC to submit an annual report to the Office of the
President and is not tantamount to being subjected to an audit.

Also, Republic Act No. 95, otherwise known as the PNRC Charter. The PNRC is a non-
profit, donor-funded, voluntary, humanitarian organization, whose mission is to bring timely,
effective, and compassionate humanitarian assistance for the most vulnerable without
consideration of nationality, race, religion, gender, social status, or political affiliation. The
PNRC provides six major services: Blood Services, Disaster Management, Safety Services,
Community Health and Nursing, Social Services and Voluntary Service.

In Liban vs. Gordon (GR No. 175352), the Supreme Court held that the PNRC must also
be seen to be, autonomous, neutral and independent in order to conduct its activities in
accordance with the Fundamental Principles. The PNRC must not appear to be an instrument or
agency that implements government policy; otherwise, it cannot merit the trust of all and cannot
effectively carry out its mission as a National Red Cross Society. It is imperative that the PNRC
must be autonomous, neutral, and independent in relation to the State.

To ensure and maintain its autonomy, neutrality, and independence, the PNRC cannot be
owned or controlled by the government. Indeed, the Philippine government does not own the
PNRC. The PNRC does not have government assets and does not receive any appropriation from
the Philippine Congress. The PNRC is financed primarily by contributions from private
individuals and private entities obtained through solicitation campaigns organized by its Board of
Governors, as provided under Section 11 of the PNRC Charter.

Although it was mentioned that “as a National Society of the International Red Cross and
Red Crescent Movement, can neither be classified as an instrumentality of the State, so as not to
lose its character of neutrality, as well as its independence, nor strictly as a private corporation,
since it is regulated by international humanitarian law and is treated as an auxiliary of the State.

The Philippine Red Cross enjoys a unique and special status as it is mandated to be an
important partner and auxiliary of the government in discharging humanitarian services in
accordance with its obligations under international law.

The Philippine Red Cross’s independence also entails that it does not receive funding
from the government. This organization is purely volunteer-driven. However, this does not limit
the Philippine Red Cross from being on the first line of response during disasters and
emergencies. In fact, its independence allowed the organization to respond and come up with
life-saving solutions even before any other institution acts.

Exemption

Section 4.8 of COA Circular No. 96-003, one of the duties of the government is to “request
the COA for special audits of (NGO) on (a) case-to-case basis. The same circular provides that
under Section 6.2, state auditors can “conduct special audits of NGOs/POs upon request by proper
authorities or as determined by the Chairman.”

However, under Article 9 of the 1987 Constitution, COA’s power to conduct a post-audit
basis on NGOs shall only be limited on all the accounts “pertaining to expenditures or uses of
funds by such non-government entities receiving subsidy or equity directly or indirectly from or
through the government.

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