Category Archives: Gulf War Claims

Stories written on the claims for compensation by Filipinos affected by the 1990-1991 Invasion of Kuwait from the United Nations Compensation Committee.

The fight continues, Part 3

OFFICIALS of the Philippine Claims and Compensation Committee Secretariat (PCCCS) will have something to explain regarding the report released by the Commission on Audit (COA) late last year. Said report stipulated that a total of US$1,200,779.19 was earned, as income, from the interest of the compensation money remitted by the United Nations Compensation Commission (UNCC) within a four-year period. Out of this interest earning only US$239,565.24 was reported spent for operational expenses.

According to Mr. Alecks Pabico of the Philippine Center for Investigative Journalism (PCIJ), the COA report was submitted to Vice President and Department of Foreign Affairs (DFA) Secretary Teofisto Guingona in October 2001. It is not clear, as of this writing, if COA findings were verified and acted upon as per recommendation of the government audit team.

The special audit report, of which copy was obtained by PCIJ and generously shared by Mr. Pabico to this writer, covered transactions and operations of the PCCCS from March 1997 to March 31, 2000. March 2000 was the time that the scam involving then Undersecretary Benjamin Domingo was exposed for the first time by leading journalists based in Manila.

For clarity and information of all claimants and followers of this series on Gulf War compensation payments to Filipino victims, a summary of the COA report is hereunder presented:

On accounting and reporting of funds

COA could not verify the financial transactions as well as balances of accountability of the funds received from UNCC because of lack of record. The PCCCS did not prepare and maintain financial records! Proofs of financial transactions presented by the PCCCS officials to the audit team comprised merely of bank statements and improvised claim vouchers with supporting documents for identification of claimants. There were no books of accounts to record the receipt and disbursement of funds!

Based on bank statements and the list of payees from May 1997 to March 31, 2000, total remittances from the UNCC amounted to US$126,673,018.88. Disbursements from the fund totaled only to US$39,316,146.95.

The most interesting part of the summary report provided by Mr. Pabico follows:

“Total interest income earned was US$1,200,779.19, and only US$239,565.24 was used to pay for operating expenses of the PCCCS.”

“However, veracity of the balances could not be made in the absence of financial records and supporting documents. A discrepancy in the balance of interest earned as reflected in the bank records was discovered, amounting to US$63,929.74 as of March 16, 2000. The PCCCS says the difference represents amounts inadvertently not considered by the audit team. But the auditors counter that it was a result of the unavailability of the PCCCS’ disbursement records during the audit.”

Accordingly, PCCCS officials submitted a well-prepared schedule of payments but the amounts of disbursements could not be verified by the audit team as “there were no underlying documents to prove their validity.”

On internal control

There was obvious disarray within the PCCCS as far as internal control is concerned. COA noted that the system of recording of funds received from the UNCC and the subsequent disbursements to claimants and the service charges against interest earned “needs improvement.” Furthermore, it concluded that “the organizational structure of the PCCC Secretariat does not provide for an adequate check and balance in the functions of custody and record-keeping or accounting.”

Disbursements pertaining to PCCCS’ operations were “not covered by duly approved vouchers and other supporting documents, such as approved requisition and issue voucher (RIV), purchase order (PO), inspection and acceptance reports, thus making it difficult to determine the legality, propriety and validity of payments.” Requests for operating expenses and authorization, the COA discovered, were all done verbally.

The report noted that “all other disbursements for the operating expenses were paid in cash by the designated special disbursing officer regardless of amount upon presentation of official receipts, invoices, payroll and acknowledgement receipts.”

Payments of claimants’ money, as earlier mentioned, were supported by claim vouchers and the required supporting documents for identification purposes.

The audit team also discovered that compensation payments, in the form of a cheque, was signed only by Domingo. No countersignature was found anywhere in the copies of cheques given out to payees. Domingo also approved underlying documents such as notice of approval of claim, checklist and transmittal letter to the bank.

It is very interesting to note that at the time of the report “cash advances amounting to P96,044.60 granted to various officials (including former Undersecretary Benjamin Domingo) have not yet been liquidated.”

Procurement process

Disbursements made by PCCCS from December 24, 1999 to March 14, 2000, as reviewed by COA, showed “that purchases of various equipment amounting to P821,305.00 did not go through the regular and proper procurement process such as bidding of canvass from at least three bona fide dealers.”

It was also discovered the absence of documents such as requisition and issue vouchers and purchase orders to show that the equipment were acquired at the most advantageous prices.

Staff benefits

The COA report discovered “double-payment in the granting of benefits to the PCCC Secretariat personnel. Employees from the Department of Foreign Affairs (DFA), Overseas Workers Welfare Administration (OWWA), Department of Justice (DOJ), Central Bank of the Philippines (CBP) and PIA assigned to the PCCCS office received 13th month pay, clothing allowance, cash gift, performance incentive pay even when they already received the same from their mother agencies.

COA, at the end of the report, has recommended a follow-up audit of the missing financial statements.

Author: Freda Editha O. Contreras
Published on: June 30, 2002

 

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The fight continues, Part 2

PART 1 of this series was published November 30, 2001. Part 2 is published only today, six months later. It is out of the norm, I admit, but natural and circumstantial events followed one after another in my ‘not-so-ordinary life’ since November 2001 that writing a follow-up story on time was not just possible.

A lot has transpired in the Gulf War comp payments scenario itself that it will take two to three series more in order to fully cover the current status. I can of course summarize everything in one go but that would mean a longer-to-read page for you readers and followers of this series. I would guess you would prefer shorter versions. (Not too short though as I am required to at least write each time a story of no less than 400 words.)

In the previous story, I shared the official response of DFA Supervising Undersecretary (of PCCCS) Merlin Magallona to the letter of complaint sent to President Gloria M. Arroyo by a number of Filipino claimants in August 2001. Along with the response came “Payment History” by category and date of remittance from the UNCC and claims status of the initial 65 signatories of the complaint letter.

I would say that the Philippine Claims and Compensation Committee Secretariat (PCCS), headed by Secretary General Bayani Mangibin was too generous to reveal the information. I couldn’t believe my luck at first, especially when I read and discovered the dates of remittance coming from the UNCC from the first batch in March 1997 up to August 2001. Right there in front of my eyes and then were the missing links to and dates of the UNCC payments to the Philippines, outside those published by the UNCC itself on its website! The missing data which I repeatedly looked for in the past many years!

It might be recalled that the very first payment released by the UNCC to the PCCCS was in late 1995 or early 1996 (?), for the 45 successful claimants of Category B (serious injuries or death). Actual date of release of payment by UNCC of the approved fund, in the total amount of US$155,000, was not identified anywhere in UNCC’s press releases posted on the web. As previously informed, fund release by UNCC was initially reported online on April 22, 1999. I found it strange that only once – on February 17, 2000 – was the Philippines included among the many countries paid by the UNCC.

With the PCCCS payment history generously shared to me last September 14, 2001, I discovered, to my amazement, that the UNCC remitted twice a year to the Philippines beginning in 1997! Under Category A claims which were divided into six installments by the UNCC, it was reported that remittances were received within a period of two years commencing on March 12, 1997 and ending on October 28, 1999. Category C payments, on the other hand, were reported received by the PCCCS between October 8, 1997 and October 28, 1999, also within a period of two years. All the above belonged to the first batch of UNCC payments of compensation.

Second batch of payments, as noted, was initially remitted by UNCC on the same day – October 28, 1999 – that the first batch concluded. On that day, the PCCCS received US$ 46,021,600.00, the highest single remittance ever received so far! Please take note that the over-all total of approved claims by Filipinos is US$174.9 million!

My contention in my previous stories that compensation payments to the Philippines had been suspended by the UNCC ‘numerous’ times now seemed to be incorrect. I have come up to the original conclusion because of the gross delay of payments to rightful claimants. With the figures in hand, I observed that UNCC indeed regularly sent money to the PCCCS, but whether those were paid out promptly to the claimants was not very clear.

Of course, as experienced by the claimants themselves – my self included – there really was a gross and deliberate delay in payments of the compensation money. The PCCCS officials were obviously keeping the money in the bank for quite a long period of time! For interest earning, of course, because after all, as repeatedly claimed, the PCCCS was sanctioned by the UNCC to derive their operation expenses from the interest of the money as a whole – not from the individual claimant. As ruled by the UNCC, service fee equivalent to no more than 1.5% of the total claims amount, shall be borne by individual claimant.

An official report from the Commission on Audit (COA) released early this year has proven that the PCCCS officials have earned interest of over a million US dollars from its operation from May 1997 to March 31, 2000!

Alecks Pabico of the Philippine Center for Investigative Journalism (PCIJ) who has been working hand-in-hand with me in the past year in exposing the Gulf War comp funds mess, when he sent the COA report, had this to say:

“i feel vindicated that my own report’s findings, as well as freda’s and what all of us have been suspecting all along, correspond to what the coa’s findings are. coa has also recommended a follow-up audit of the missing financial statements.”

Should I say more?

Author: Freda Editha O. Contreras
Published on: May 30, 2002

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