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The 25th Annual International Consortium on Governmental Financial Management (ICGFM) International Conference with the theme “Achieving Real Accountability: a Balancing Act Among Stakeholders” was held  May 15 – 20, 2011 in Miami Florida. 


Dir. Leonor D. Boado of the Commission on Audit’s Fraud Audit and Investigation Office (FAIO) is being congratulated by Ms. Charbett Duckett, partner at Williams Adley & Co, and ICGFM vice president,  after her presentation.



The 25th Annual International Consortium on Governmental Financial Management (ICGFM) International Conference with the theme “Achieving Real Accountability: a Balancing Act Among Stakeholders” was held last May 15 – 20, 2011 in Miami Florida.  The MSI Integrity Project (iPro) supported the attendance of Dir. Leonor Boado in this event not only as a participant but also as a speaker. 


Dir. Boado’s presentation on the topic "Auditors and Investigators Working Together to Fight Corruption” was very well received by the conference participants.  In her speech, she described the extent of corruption in the country using the level of poverty and the people’s perception as standards.  She claims that corruption is not the only cause of poverty in the country but the mother of all causes.  Poverty exists despite the recognized noteworthy qualities of the Filipinos of being industrious, skillful and creative.  The country’s vast natural resources do not translate to a good life for the majority of the citizens because of corruption.  The people’s perception that corruption is real has become so pervasive that initiatives of the government to fight it have been treated with indifference.  One wonders why even with the existence of stringent anti-corruption laws and the presence of Constitutional bodies such as the Office of the Ombudsman and Commission on Audit, endowed with enormous powers to run after erring public officials, corruption still pervades.  Other government institutions have been created to specifically stop the growing cases of corruption to no avail. These show the magnitude of the problem of corruption in the country that whatever conscious efforts the government and groups of concerned people do are not enough to eradicate it. 


Dir. Boado noted that corruption still thrives due to lack of systematic, automatic, speedy and strict enforcement of laws on accountability. Aptly put, she said opportunity plus impunity equals corruption.  For one, the personalities involved in the drive against it are sometimes the very people who are committing the gravest act of corruption. This is not to say that because they steal big, they can easily circumvent prosecution or delay the judicial process leaving the people even more frustrated with the government.


But according to her, all is not lost in the fight against corruption.  With the support of the United States Agency for International Development through the Management Systems International and its Integrity Project (MSI-iPro), a collaboration between the Office of the Ombudsman (OMB), the Commission on Audit (COA) and the Civil Service Commission (CSC) was forged to create the Constitutional Integrity Group (CIG).  The MSI-iPro facilitated the closer and sustained cooperation between the OMB and COA.  The two agencies signed a Memorandum of Agreement for a more coordinated approach to fighting corruption by forming Joint Investigation Teams (JIT). Capability-building trainings were conducted nationwide for the OMB investigators and prosecutors by the COA to familiarize them on auditing laws, rules and regulations.  Complementarily, the OMB trained the COA auditors on the rules and procedures on corruption investigation and prosecution, and help them become effective witnesses in court.  These trainings were also attended by selected CSC personnel.


The OMB and COA are now jointly investigating and are expected to produce air-tight corruption cases to eventually prosecute erring officials successfully.  Dir. Boado is optimistic that this partnership will reduce or stop all together the opportunities for corruption and likewise send a message to all public servants that they should serve not rob the government.



Dir. Boado receiving the Certificate of Appreciation from Ms. Duckett for serving as speaker during the conference.


Auditors and Investigators Working Together to Fight Corruption

The Philippine Experience[1]


by Director Leonor D. Boado, Esq., CPA

Fraud Audit and Investigation Office

Philippine Commission on Audit



The Philippines is replete with stringent laws that exact accountability from public officers. Theoretically, that should make life difficult for the corrupt.  For one, our penal law punishes the embezzlement of funds or property amounting to $4.50 with 6 years imprisonment.  The failure to render accounts for a period of 2 months is punished with 2 years and 4 months in prison.  Qualified theft of public funds amounting to $150 carries a maximum of 20 years imprisonment.


For another, the Philippine Constitution devotes one whole section (Article XI) to “Accountability of Public Officers.”

It begins with a noble principle beautifully worded thusly:

“Public office is a public trust.  Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives.”


The Constitution likewise created the Office of the Ombudsman and endowed it with enormous powers over any act or omission of any public official or employee which appears to be illegal, unjust, improper, or inefficient. It strengthened the Commission on Audit or COA by infusing it with the exclusive authority to determine, prevent and disallow improper use of public funds and property.  It recognized the Sandiganbayan, the special anti-graft court having jurisdiction over high ranking officials accused of corruption.  Sandiganbayan is a Filipino word meaning one to whom the people repose their trust. 


With the Office of the Ombudsman and the COA at the helm, and the stringent laws on accountability in force, there should be no reason why corruption should exist.


It is therefore puzzling why there is the perception reported by Transparency International that the Philippines is among the most corrupt in Asia and in the rest of the world. 



But perception may or may not be proportionate with reality.  So we need a gauge or standard to determine whether or not the perception approximates the reality. We can offer our poverty level and our citizens’ perception of corruption as standards. 


There is no doubt that a great majority of our people are poor.  Studies done by international agencies on the Philippines’ poverty situation show that of around 90 million people, 20 million are living below $1.25/day while over 40 on less than $2/day.  (That would not even buy a hamburger here.)


Personally, I do not understand why many of us are so poor. 

Let me inform that Filipinos are very skillful, industrious and creative.  Hon. Hillary Clinton recognized this when she told the President of the Philippines that she has not found a group of people more industrious than Filipinos.  It is not rare to find an individual holding two jobs a day.  Or, a student working at night to support his studies as well as the needs of his family.

May I inform also that the Philippines is very rich in natural resources.  Years ago, an Arabian visitor said that God did not give us oil but gave us everything.  He was wrong. God also gave us oil as deposits have been discovered in the gorgeously beautiful island of Palawan, one of the 7107 islands of the Philippines.

So, with very rich natural resources and very industrious and skillful people, why are most Filipinos poor?  

A June 30, 2008 article of the Philippine Daily Inquirer explained why.  It reported that “In 1997, the Office of the Ombudsman estimated that the government lost $48 billion to corruption in the previous 20 years.” 

With such huge amount lost, it can only translate to increase in poverty.  There is a direct link between corruption and poverty: the level of poverty is directly proportionate with the level of corruption.  To put it succinctly, for every case of corruption, one child will not eat or a father will sell his kidney or a mother will be buried in a landslide or a sibling will be carried by raging floodwaters.

Concededly, corruption is not the only cause of our poverty but it is the mother of all causes.

Lack of disaster preparedness drives families to poverty because we are hit by typhoon very often.  Deforestation thru illicit sale of permit to cut trees increases incidents of flooding and landslide. Farm-to-market road fund allotted by the government to help farmers bring their produce in the market is diverted to some pockets that it is now termed “farm-to-pocket” funds. Land ownership by influential few causes many farmers to remain in land bondage. There are many job vacancies available but graduates are poorly matched because the standard of education has been eroded by shortage of schools and educators. 

Actually, you have lured many of our good teachers here offering them salaries which our government cannot afford.  

A teacher in the Philippines earns about $350 a month.  Her monthly here is her one year salary back home.


True, many corrupt officials are charged before the court but because they steal big, they can hire lawyers who skillfully delay the judicial process. Due process has become an endless process.


And because of this sad situation, the citizens’ perception is that corruption is real.  In fact, our perception of corruption has become so pervasive that we now have corruptionary – dictionary of corruption words and phrases.  This book was prepared by volunteer students and researchers from the Center for People Empowerment in Governance (CenPEG).  It contains about 400 corruption related terms and jargon and the list is growing. 

Examples of these words are:

     Trapo  (tra - po) – a combination of the first syllables of the words traditional politician.  Trapo is a Filipino word meaning rags or tattered cloth for wiping dirt and therefore the traditional politician is presumed to be dirty.

     Moderate your greed – corruption is addictive and the greed of the corrupt becomes excessive, thus they are admonished to moderate their greed.

     Tongpats  (tong – pats) – reverse spelling of the word patong (pa – tong), meaning “on top.” It describes the illicit mark-up on government contracts to cover under-the-table commission or kickback.


     Ninoy – nickname of Benigno Aquino, Jr., father of the Philippine President and husband of former President Cory Aquino.  Ninoy’s face can be found on the P500 bill.  When a traffic policeman apprehends a driver for alleged violation of traffic laws and says “Ninoy,” he is demanding a P500 bribe (about $10).


The people’s exasperation over corruption catapulted our President to the highest office because of his campaign slogan: “no corruption, no poverty.”


Corruption subsists due to lack of systematic, automatic, speedy and unbending enforcement of laws on accountability.  In other words, without enforced accountability, corruption flourishes and poverty abounds.   Put differently, opportunity plus impunity equals corruption.


This is not to say that the Government did not try to remedy the situation.  Public records will show that it did, indeed. 

The Philippine Senate and the House of Representatives each has a Committee on Justice, Committee on Good Government, Blue Ribbon Committee all of which investigate corruption in government.  There is also the Presidential Commission on Good Government to recover ill gotten wealth.  We had the Presidential Anti Graft Commission to investigate Presidential appointees accused of corruption. The defunct Presidential Anti-Smuggling Group was tasked to go after smugglers and their protectors in government. The Anti-Money Laundering Council to report and monitor money launderers and the banks that cuddle them; and so many more.


However, if the personalities involved in the drive against corruption do not inspire belief or are corrupt also, the whole thing becomes a farce. 

So what do we do?  Well, what we do in the Commission is we still try and do our best.  And as we are partnering with the Ombudsman, we hope that we could make a dent. 

For, I would like to believe that of the anti-corruption agencies we have, the most formidable are the Office of the Ombudsman and the COA.

The COA and the Office of the Ombudsman are very much feared institutions because of their enormous oversight powers over public officials and employees. But they have not been getting their act together. If they did, and should, these two agencies can be a force to reckon with – a “fear factor,” a deterrent to unscrupulous public officers.

The need for such concerted act cannot be overemphasized for the result of audit of the COA is forwarded to the Ombudsman for prosecution of the erring official.  The output of our forensic audit is the input of the Ombudsman’s investigation prosecution.


For a better understanding, let me discuss very briefly their creation and mandate.

The Office of the Ombudsman was created by the 1987 Constitution as protector of the people.  It was given enormous power to prosecute erring public officers and employees.  It has an active role in the enforcement of laws against corruption other offenses that may be committed by such officers and employees.

The powers of the Ombudsman include investigation of any act or omission alleged to be illegal, improper, or inefficient.

It can take action against a civil servant and order his removal, suspension, demotion, fine, censure, or prosecution.  It can demand the submission of documents relating to contracts or transactions.


On the other hand, the COA has existed for 112 years since the Spanish colonial rule in the Philippines. It was called the General Auditing Office and headed by an Auditor General.  Later, the Auditor General was replaced by a collegial leadership of the Chairman and two Commissioners.  In 1987, the new Constitution expanded the powers of the COA which include audit of all revenues and expenditures or uses of public funds and property; the exclusive authority to disallow irregular, illegal, unnecessary, unconscionable, excessive, or extravagant (IIUUEE) expenditures; and the authority to promulgate accounting and auditing rules and regulations.


The Commission is thus authorized to set up the accounting system of the government; maintain the budgetary accounts; and report on how the budgeted amounts were disbursed.  It can investigate the commission of fraud in government transactions. Nothing is exempt from our audit for the Constitution in mandatory and prohibitory language bans the Congress from enacting any law authorizing such exemption.


With such expansive and extensive oversight authority of the Ombudsman and the COA, corrupt officials’ inclination to satisfy their greed should be clipped. However, militating against such is the lack theretofore of the minimum coordination and cooperation between them.  In fact, there were frictions at times because the Ombudsman often directed the COA to conduct audit investigation of complaints it receives.  Naturally, the COA is offended considering that they both have separate mandates and the audit agency has limited personnel and budget just like all others. 

Thus, meanwhile that they are debating on whether or not the COA should act on the Ombudsman’s directive, time is wasting away and the case becomes cold.  To the great pleasure of the officials accused of corruption and to the utter dismay of the complainant.  Thus the need to thresh out these differences.

Recently, the two agencies realized the immediate need for cooperation and coordination to arrest the growing number of corruption cases.  So in 2004, the COA and the Ombudsman together with other agencies involved in the investigation and prosecution of corruption banded together and came up with a joint anti-corruption plan.  The members called it the Solana Covenant.  It outlined concrete initiatives to be undertaken by these agencies with a more coordinated approach to fighting corruption.


Somewhere along the way, the enthusiasm of the members fizzled out and the group hibernated until in 2009.  A new collaboration among the Ombudsman, the COA, and the Civil Service Commission was forged bringing into existence the Constitutional Integrity Group (all three are creatures of the Constitution). 

In 2010, the United States Agency for International Development (USAID) through the Management System International and its Integrity Project (MSI-IPro) entered into the picture and facilitated the closer and sustained cooperation between the Ombudsman and the COA.  The timing could not have been more perfect.

To respond to the urgent and imperative need to address the respective concerns between the two agencies for a harmonious working relationship, the following steps were undertaken:

1.   The Fraud Audit and Investigation Office (FAIO) which I head was designated as the focal office for COA. I met several times with my counterpart in the Ombudsman to map out our coordination efforts.

2.   The offices held separately a series of Focus Group Discussions in March and April of 2010 to identify and propose solution to the issues and concerns adversely affecting the investigation and prosecution by the Ombudsman of cases arising from audit reports

3.   Core personnel of the two offices met preliminarily to narrow down the issues and concerns and propose possible solutions.

4.   The output of that small group was presented in plenary for finalization.

5.   This culminated to a joint workshop entitled “Strengthening Institutional Commitments between the Commission on Audit and the Office of the Ombudsman: Towards Winning Corruption Cases.” 

In that workshop, the following targets were achieved:

a.   Plan of action based on the results of the discussions;

b.   Memorandum of Understanding between and by the representatives of the COA and the Ombudsman; and

c.   Memorandum of Agreement to be signed by the Heads of the Ombudsman and the COA.

The plan of action identified concrete activities, within a timeframe, to solve the identified issues and concerns.

These activities are as follows:

1.   Draw guidelines in conducting joint investigation for high-profile cases;

2.   Identify focal units for issues that require coordination between the two agencies, and to monitor/track cases; 

3.   Create records unit and establish storage facilities to preserve documents and evidence

4.   Set up of a case management system at both offices

5.   Conduct cross trainings for capability building for forensic audit, investigation and prosecution; and

6.   Develop joint guidebook on case-building and prosecution; identify the crime and the corresponding evidence needed.


On June 15, 2010, the Memorandum of Agreement for close coordination and cooperation between the auditors and investigators in the fight against corruption was signed by the Chairman of the COA and by the Ombudsman. One month thereafter, to make operational the Memorandum of Agreement, the two agency heads met again and signed two joint circulars: on the case management system and on the conduct of the joint investigation.  


As to the capability-building of the auditors and investigators, nationwide trainings were conducted by the COA for the benefit of Ombudsman investigators and prosecutors to familiarize them on auditing laws, rules and regulations.  The prosecutors of the Ombudsman returned the favor and trained COA personnel all over the country on the rules and procedures on corruption investigation and prosecution, and help them become effective witness in court. 

A side benefit of these exchanges is that the relationship between the forensic auditors and the Ombudsman prosecutors has become more personal. Now, communication between them is more on real time, so instead of writing to each other which takes about a month or two to get the results, a telephone call or a personal appearance in the office will do the job in just one or two days.


On the joint investigation activity, the agencies agreed on the following criteria for a case to be covered:

1.             Amount involved is at least $1.20 million

2.             Respondents are high ranking officials like mayors, corporate managers, directors, and the like.

An unwritten criterion to narrow the choice is the greater impact of the case on the public for there are many cases that can fall within the two criteria. Already, three big ticket cases are lined up for investigation. One of these cases has been the subject of a series of case conferences last year between the forensic auditors and the prosecutors.  The investigation is proceeding satisfactorily and is now in the report writing stage. 

The joint investigation team or JIT is composed of select investigators and forensic auditors. Before the JIT, our fraud audit report is transmitted to the Ombudsman which will subject it to another fact-finding investigation. If the investigators are satisfied that the pieces of evidence gathered are sufficient, they will recommend its preliminary investigation in another department.  It thus takes too long to complete the process before the case goes to the Sandiganbayan.  It is not surprising for a complaint to take two years or more to ripen into a court case and the trial of the case can take even longer.

Precisely, the FAIO was created to help arrest the growing number of corruption cases.  We receive around 10 complaints a day, so we cannot do much with less than 50 forensic auditors and perennial shortage of investigation and IT equipment. 

The FAIO is also tasked to cleanse the ranks of auditors.  We investigate and file administrative disciplinary cases against auditors who have neglected or failed to check abuses in their respective agencies. We must remember that they are the first line of defense against corruption as they are resident auditors. Thus, in a little over two years, we have investigated and charged 83 auditors for various infractions. And in the same period, we submitted 30 fraud audit reports to the Office of the Ombudsman.  These are significant cases that involve millions of pesos lost to corruption. 

Examples of these cases are as follows:

1.    Failure to issue receipts and to record in the books grants and donations amounting to over $100,000 to a government agency involved in alleviating the plight of poor people living in urban areas


2.   Purchase of rubber boats overpriced by over $100,000


3.   Renting service vehicles for $235,000 instead of purchasing


4.   Failure of a mayor of a fourth class municipality to liquidate cash advances of $63,000 since 2004


5.   Livestock raisers’ program which failed due to connivance with favored input suppliers involving more than 10 million dollars.

The above reports were completed prior to the creation of the JIT and as of today none of these cases has been filed in court.


It is hoped that with the JIT members working shoulder to shoulder, the period of investigation and filing of cases in court will be shortened. 


As earlier stated, the JIT is working at present on a big ticket case.  The team has so far uncovered the following findings:

1.   Allowances/benefits and bonuses granted were excessive in number and excessive in amount


2.   Future benefits and allowances were paid in advance to trustees by accruing and paying the amounts before year end and through cash advance.  This is double illegality for not only are they disqualified to receive benefits and allowances, these should not  be paid thru cash advance and should not be accrued


3.   Consultants and non-organic personnel who were not entitled were also granted benefits


4.   Compound instead of single accounting entry concealed the irregular transactions


5.   The allowances and benefits were doubly claimed from Personal Services account and from Maintenance and Other Operating Expense account to which class these do not belong


6.   These allowances and benefits were also taken from the two kinds of Funds held by the agency.  In other words, the same benefit was taken four times – from Personal Services, from Maintenance and Other Operating Expense, and from two Funds


7.   The total amount of the illegal disbursements is estimated to reach not less than $2 million

The immorality of this fraud is mind-boggling and nauseating, to use a very mild term. 


It is my personal wish that with the collaboration between the auditors and the investigators, we will achieve the following:

1.   Identify and charge erring public officials


2.   Prosecute them successfully


3.   Send a message to other public servants that they should  serve not rob the government, and


4.   Recover the amounts lost.


The Ombudsman and COA believe that they have created a lethal partnership and expect to reduce opportunities and thus clip the inclinations of corrupt officials. They should not only moderate their greed but deaden it all together. 


With the legal guidance of the investigators, the case building of our forensic auditors is expected to produce air-tight cases that will stand the rigors of trials.

To repeat, corruption subsists due to the lack of systematic, automatic, speedy and unbending enforcement of laws on accountability.  Without enforced accountability, corruption flourishes and poverty abounds.   Opportunity plus impunity equals corruption. 


As the Holy Book says: Because sentence against a bad work has not been executed speedily, that is why the heart of the sons of men has become fully set in them to do bad. (Ecclesiastes 3:11)


Through the successful prosecution of cases jointly investigated, the COA-Ombudsman JIT expects to instigate a ‘fear factor’ that will send this message –


Corruption is a crime that is not tolerated by the Philippine society and is severely punished under Philippine laws.

So God help us!

[1] A presentation at the 25th Annual International Financial Management Conference of the International Consortium on Governmental Financial Management, Miami, Florida, USA, May 20, 2011.




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Ehem -- the anti-corruption initiative of the Philippine Jesuits echoes the urgent call for cultural reform against corruption in the Philippines.
Ehem aims at bringing people to a renewed sensitivity to the evil of corruption and its prevalence in ordinary life. It seeks ultimately to make them more intensely aware of their own vulnerability to corruption, their own uncritiqued, often unwitting practice of corruption in daily life.
Ehem hopes to bring people, in the end, to a commitment to live the way of Ehemplo --- critical of corruption, intent on integrity!
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