NCMF’s $1M SPENDING FOR 2019 HAJJ IS OF DOUBTFUL VALIDITY: COA

The Commission on Audit (COA) is gunning after top executives of the National Commission on Muslim Filipinos (NCMF) for what it says is the “doubtful validity” of the $1-million disbursements for Muslims who joined the Hajj in 2019.

In a six-page Audit Observation Memorandum (AOM) No. 2021-004-(2019) dated February 22, 2021, COA audit team leader Estrellita M. Aguilar and supervising auditor Rachel S. Policarpio said they had audited the liquidation of the housing expenses totaling $1-million (P51.4 million) for the Hajj season of 2019 but questioned how the money was spent.

“Payment of housing accommodations for Hajj season 2019 of $1-million or P51.4 million is of doubtful validity due to the deficiencies noted in the submitted official receipts and acknowledgment receipts by the Special Disbursing Officer (SDO) of the Hajj Finance Committee for the year 2019,” Aguilar and Policarpio stressed.

COA said it is the duty of accountants to sift through physical, electronic, testimonial, analytical and documentary evidence to support their opinions, findings, conclusions, and judgments based on these pieces of evidence while it is the duty of NCMF Secretary Saidamen Pangarungan to ensure that funds are safeguarded and all financial reports, records and other reports are submitted to COA for examination, disallowances are settled and all transactions are kept above board.

AOM No, 2021-004-(2019) was addressed to NCMF Secretary Saidamen Balt Pangarungan, executive director Tahir Lidasan Jr., Khamil M. Manalundong, OIC-Finance and Management Service (FMS), Noroden M. Balindong, FMS acting chief accountant, Ms. Zenaida P. Alonto, former FMS acting chief accountant, Zainoden m. Usudan, chief, Bureau of Pilgrimage and Endowment, Ms. Junainah D. Nuska, chief and special disbursing officer (SDO), Hajj Finance Committee and Ms. Dulenda B. Lidasan, former chief, Hajj Finance Committee.

COA said on December 13, 2018, NCMF, represented by Pangarungan, signed a housing accommodation contract with the Maad Al-Masiyah Co. of Makkah, Saudi Arabia, represented by executive director Abdalaziz Alsoat, for the housing accommodations of Filipino pilgrims from July 24, 2019 to August 31, 2019, with 30% to be paid on February 15, 2019, another 30% on March 15, 2019, the third payment of 30% on April 20, 2019, and the final 10% on August 20, 2019. Maad Al-Masiyah, however, then sent a billing statement on March 10, 2019, asking that 50% of the amount of $1-million be paid in cash as the company would use the money to establish a travel agency in the Philippines. The other half or $1-million was to be remitted through online transfer to their bank account, the same way that NCMF paid its obligation on February 15, 2019.

On April 5, 2019, Pangarungan designated Junainah Nuska as SDO and chairperson of the Hajj Finance Committee and authorized her to withdraw the $500,000 from the NCMF dollar account with the Philippine National Bank (PNB) for the second installment of the partial payment to Maad Masiyah. Three days later, the accounting division of NCMF FMS prepared two disbursement vouchers (DVs) for two SDOs-- Nuska and Dulcenda Lidasan—for $500,000 each. COA noted the DVs for Nuska and Lidasan were both unnumbered and undated even as they were covered by Journal Entry Vouchers (JEVs)—JEV No. 19-04-0009 HAJJ dated April 8, 2019, for the $500,000 cash advance to Lidasan and JEV No. 19-04-0010 HAJJ dated April 8, 2019, for the $500,000 cash advance to Nuska.

“On April 10, 2019, Mr. Abdel Aziz Alsoat- the Executive Director of Maad Masiyah Co. issued unnumbered Official Receipt and Acknowledgment Receipt in the amount of US$500,000 representing the partial payment of the NCMF in the hotel contract for the Hajj 2019, it was noted that the payment was done in Quezon City as stated in the receipts,” COA noted.

COA added that validation from the bank statement for the NCMF PNB Dollar Account No. 1103-6024-9141, which came from Mutawiff fees deposited by Filipino pilgrims showed that the amount of $1-million was debited on April 16, 2019 and converted to P51.4 million as proven by Nuska’s withdrawal slip.

Aguilar and Policarpio said that on September 4, 2019, they conducted a cash examination on the accountability of Nuska that included the $1-million payment of the housing accommodation for Hajj 2019.

The COA team disallowed the submitted acknowledgment receipts since Alosat issued the receipt using the logo of NCMF and the signatory and designation of the Maad Al-Masiyah Co. differed. In the contract, the name was ABDALAZIZ ALSOAT, Executive Manager, while in the acknowledgment receipt, the name was ABDEL AZIZ ALSOAT, Executive Director.

COA was also puzzled by the change in the mode of payment in Hajj 2019 to cash while the manner of payment during the previous year’s pilgrimage was bank-to-bank, with the Saudi Franci Bank directly paying the obligation to the bank account of the service provider.

The commission also criticized the insufficiency of documents for the payment of hotel accommodations since the service provider, Maad Al-Masiyah, did not provide the list of pilgrims who attended the Hajj and stayed in the hotel. Finally, COA said the SDO has no authority to withdraw another $500,000 from the NCMF PNB Dollar Account.

COA said that on October 17, 2019, the Audit Team sent a confirmation letter to the Philippine Consulate General to the Kingdom of Saudi Arabia through the supervising auditor of the Department of Foreign Affairs (DFA) in order to verify the authenticity of the receipts of Maad Al-Masiyah but no reply was received, so the result of the cash examination on Nuska’s accountabilities has not been released.

On December 14, 2020, the NCMF accounting personnel submitted the liquidation vouchers of Nuska to support the cash advance of $1-million but the COA found glaring differences from the documents Nuska had submitted to the COA for the cash examination.

For the cash examination, what was submitted was the unnumbered official receipt from Maad Al-Madsiyah Co. dated April 10, 2019, for $500,000, and covered by Official Receipt (OR) No. 06250 to back up Report of Disbursement (ROD) No. M-19-12-169 dated January 30, 2020, for the liquidation of disbursements of Lidasan.

The unnumbered official receipt issued by Maad Al-Masiyah Co. dated September 20, 2019, for $500,000 was submitted during the cash examination. OR No. 06251 for submitted by the SDO to the FMS for the disbursement report and covered by ROD No. M-19-12-170 dated January 30, 2020, for the liquidation of the cash advance of Nuska.

COA said it was difficult to reconcile the fact that two housing agreements were submitted to support the disbursement of $1-million, which was supposed to be for the payment of the second installment to the Maad Al-Masiyah Co. Lidasan submitted a housing agreement with Elyas Co. for Hajj and Umrah while Nuska submitted the contract with Maad Al-Masiyah Co.

“In view of the foregoing stated sequence of events, the deficiencies noted in the submitted acknowledgment/official receipts and other supporting documents… render the transactions doubtful,” COA argued. Aguilar and Policarpio asked the chief SDO of the Hajj Finance Committee to explain in writing the reason for the deficiencies in the acknowledgment and official receipts issued by Maad Al-Masiyah Co.

They also sought the list of Filipino pilgrims who stayed at the Al Hidaya Towers, which is owned by Maad Al-Masiyah Co., during Hajj 2019. Aguilar and Policarpio stressed the president or executive director of the hotel should validate the names of the Filipino pilgrims based on their records, as well as the number of pilgrims who actually stayed in the hotel.

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