EXECUTIVE SUMMARY
A.
Introduction
The enactment of Republic Act (RA) 9165, also known as “The
comprehensive Dangerous Drugs Act of 2002,” revolutionized and reformed the
Philippine drug enforcement system. It reorganized the Dangerous Drugs Board
(DDB) as a policy and strategy-formulating body, more importantly, it created the
Philippine Drug Enforcement Agency (PDEA) as a single-mission agency to lead
all other law enforcement agencies in the fight against illegal drugs, to serves as the
implementing arm of the DDB, to exercise operational supervision over drug
enforcement units of other law enforcement agencies and to coordinate the
participation of other sectors in the national anti-drug campaign.
The PDEA is headed by a Director General with the rank of Undersecretary
and assisted by two Deputy Director Generals, one for Operation and the other for
Administration, both with the rank of Assistant Secretary.
As provided for under RA 9165, PDEA has ten national staff services,
namely:
1. Administrative and Human Resource Service
2. Financial Management Service
3. Logistic Management Service
4. Intelligence and Investigation Service
5. Internal Affairs Service
6. Plans and Operations Service
7. Legal and Prosecution Service
8. Compliance Service
9. International Cooperation and Foreign Affairs Service
10. Preventive Education and Community Involvement Service
The law also provides the establishment of the PDEA Academy to oversee the
recruitment and training of all PDEA agents and personnel, as well as the
formulation of programs of instruction for career and specialized anti-drug training
courses. Further, the Agency maintains and supports its 17 regional offices and 31
satellite offices nationwide.
As of December 31, 2012, a total of 1,420 manpower complement composed
the organizational structure of the agency, of which 1,275 are plantilla positions,
138 case monitor and consultants and 7 contractuals.
i
B.
Financial Highlights
A comparative analysis of allotment and utilization of funds for the years
2012 and 2011 is shown below:
Particulars
Financial Condition
Total Assets
Total Liabilities
Total Equity
Result of Operations
Total Income
Total Expenses
Excess of Income over
Expenses
Sources/Uses of Funds
Allotments Received
Obligations Incurred
Unobligated Balance
2012
2011
Increase/
Decrease
448,892,703.65
42,296,922.02
406,595,781.63
488,565,901.90
39,673,198.25
83,324,350.44 (41,027,428.42)
405,241,551.46
1,354,230.17
805,742,795.39
724,579,944.23
707,188,368.72
636,159,157.80
98,554,426.67
88,420,786.43
81,162,851.16
71,029,210.92
10,133,640.24
754,219,316.00
754,219,316.00
-
705,663,054.00
705,662,511.00
543.00
48,556,262.00
48,556,805.00
(543.00)
The Statement of Allotment, Obligations and Balances as of December 31,
2012 is shown in Annex A.
C.
Operational Highlights
The agency’s operational highlights for CY 2012 are shown in the table
below:
Major Final Output
Enforcement of laws against
dangerous drugs
Accomplishment
Conducted 9,885 anti-drug operations, wherein
PDEA seized an estimated P2.42 Billion worth of
drug and non-drug evidence and arrested 10,159
drug personalities, which subsequently led to
filling of 12,534 drug cases.
Saturation drives led to the neutralization of 233
local drug groups and three transnational drug
syndicates operating in the country.
Dismantled seven shabu clandestine laboratories:
one large-scale, three medium-scales and three
small-scales; one chemical warehouse; 10 shabu
tiangges and 63 drug dens.
ii
Eradicated 148 marijuana plantation sites covering
an estimated land area of 187,222 square meters
in Region 1, 2, 3 4B, 11, 12 and CAR.
Control of regulation against
Dangerous Drugs and
Precursors and essential
chemicals
Preventive education and
involvement of the
community against
dangerous drugs
Intensified drug interdiction with the support of
anti-drug task forces of other law enforcement
agencies leading to the arrest of 25 perpetrators
and seizure of illegal drugs from incoming
shipments and outbound packages estimated to be
worth P282 Million.
Issued 12,900 permits and licenses to registered
medical
practitioners
and
pharmaceutical
industries.
In coordination with government and private
stakeholders,
launched
49,321
advocacy
campaigns, seminars and symposia to encourage
participation of citizenry and to raise awareness
against illegal drugs.
Moreover, PDEA continued to forge strong relationships with other
government agencies, government owned and controlled corporations, local
government units, non-government organizations and other sector to support the
anti-drug campaign. In consonance with its mandate to formulate and implement
programs to foster international cooperation, PDEA hosted 14 visits and courtesy
calls of foreign counterparts to foster and maintain good working relationships.
D.
Scope of Audit
The audit covered the review of accounts and operations of the PDEA for the
year 2012. The audit was aimed to ascertain the propriety of the disbursements, the
adequacy of the books of accounts and the fairness and reliability of the financial
reports. Transactions of the agency were also examined to determine whether
existing laws, rules and regulations were complied with.
E.
Auditor’s Report on the Financial Statements
The Auditor rendered a qualified opinion on the fairness of presentation of the
financial statements as of December 31, 2012 due to the following significant audit
observations:
1.
Accuracy and validity of the Due from NGAs and Due from GOCCs account
balances as of December 31, 2012 totaling P83,188,014.97 was doubtful due
iii
to the difference of P14,812,741.82 between the balance per books and results
of confirmation which cannot be identified and reconciled.
F.
2.
The failure of the Logistics Management Service (LMS) to submit promptly
the Report of Supplies and Materials Issued (RSMI) and the Financial
Management Service (FMS) to record the RSMIs received resulted in the
discrepancy between the balances per book of P19,551,227.54 and per Report
on the Physical Count of Inventories (RPCI) of P15,522,073.09 thus
overstated the balances of the affected Inventory accounts and understated the
affected expenses and Prior Years’ Adjustment accounts by the same amount.
3.
The accuracy, validity and existence of the reported balance of the Property,
Plant, and Equipment (PPE) account in the financial statements totaling
P378,851,305.74 was doubtful due to: a) the discrepancy between the book
balance and the Report on the Physical Count on Property, Plant and
Equipment (RPCPPE) of P125,094,861.71; b) non provision of allowances
for depreciation of the Military and Police Equipment; and (c) non
maintenance of PPELC and PC.
4.
The failure of the LMS to submit to the FMS the required documents to serve
as a basis for recording in the books of accounts the cost of various structures
totaling P41,862,870.84 which were already finished and turned-over to the
agency resulted in the overstatement of the Construction in Progress-Agency
Asset account and the understatement of the corresponding PPE accounts by
the same amount.
Observations and Recommendations
The following are the other significant audit observations and corresponding
recommendations, which were discussed with Management officials concerned
during the exit conference on March 8, 2013, details of which are discussed in the
report. Management views and comments were incorporated in the report, where
appropriate.
1.
Trust receipts reported under the Cash in Bank-Local Currency, Current
Account amounting to P1,214,299.36 deposited with the Land Bank of the
Philippines (LBP) was without authority and contrary to Executive Order
(E.O.) No. 338 dated May 17, 1996.
We recommended and Management agreed to request exemption from the
Permanent Committee created under Section 45, Chapter 5, Book VI of E.O.
No. 292 on the maintenance of LBP Account and in case, the same is not
granted remit the balance of LBP Account No. 1862-1025-13 to the National
Treasury.
iv
2. Land and building owned by the defunct Economic Intelligence and
Investigation Bureau (IIEB) transferred to PDEA by virtue of E.O. No. 227
could not be settled due to the absence of a joint resolution or guidelines on the
settlement of the assumed obligation of PDEA to the National Housing
Authority.
We recommended and Management agreed to facilitate the drafting of the joint
resolution on the settlement of the assumed obligation of PDEA to NHA so that
the interest and penalties would no longer accumulate and for the eventual
recording of the transferred land and building in the books of the agency.
F.
Implementation of Prior Year’s Audit Recommendations
Of the four prior year’s audit recommendations contained in the Annual Audit
Report for CY 2011, two were implemented, one was partially implemented and
one was not implemented.
v