By Ben Rosario
The Philippine Charity Sweepstakes Office (PCSO) owes the national government a total P8.42 billion in dividends that remains unremitted since 1994.
The 2018 PCSO annual audit report released this week by the Commission on Audit (COA) also indicated that the state lottery firm is being denied at least P4.607 share from the operations of Small Town Lottery outlets by 67 out of the existing 85 authorized STL agents (ASAs).
“PCSO has not declared and remitted dividends to the national government for divided years (DYs) 1994 to 2016 in the total amount of P8.426 billion, contrary to the provision under Section 3 of Republic Act (RA) 7656,” COA stated in the report.
Auditors noted that under RA 7656 all government-owned and -controlled corporations (GOCCs) are required to remit at least 50 percent of their annual net earnings to the national government.
COA had already called the attention of the PCSO on the unremitted dividends that has ballooned to P8,428,018,641.40 in the past 22 years.
PCSO explained in 2014 that it does not have net earnings and what it generates are savings from operations.
On the other hand, the Office of the Government Corporate Counsel, in its legal opinion issued December 20, 2016, stated that the PCSO is not covered by RA No. 7656 because its net earnings are being allocated for certain expenses and all unutilized balance in any of its funds should revert to the Charity Fund.
Reacting to the two claims, the PCSO’s Legal Affairs Office cited a COA memorandum issued in 2018, providing that all government firms must declare and remit at least 50 percent of their annual net earnings to the national government.
“Moreover, PCSO is not among the GOCCs exempted from the coverage of RA 7656, specifically enumerated under Section 4 of the Revised IRR to RA No. 7656,” said COA.
Thus, the state audit agency called on the PCSO management to settle its arrearages representing the dividends should their request for exemption be denied by the Department of Finance.
Meanwhile, government auditors called on the state lottery firm to “intensify collection of the Presumptive Monthly Retail Receipts (PMRR)” shortfall that should have been paid by concerned ASAs.
According to the audit report, the unpaid PMRR has reached P4.607 billion. It said the amount will go a long way in funding various charitable programs of the PCSO.
“Had the PMRR shortfalls due of P4.607 billion been promptly remitted to the PCSO, it could have been utilized to finance the various charity programs, particularly the individual Medical Assistance Program (IMAP) where many less fortunate individuals depend for their medical needs,” the COA said.
PCSO records examined by auditors disclosed that as of December 31, 2018, at least 85 ASAs remained operational.
“Verification, however, disclosed that out of the 85 operational AACs/ASAs the PMRR Shortfalls due to PCSO in the total amount of P4,607 billion remained unsettled by 67 AACs/ASAs as of December 31, 2018.
Reacting to the COA report, the PCSO management said it had already directed all department and branch managers of the government firm to strictly monitor PMRR compliance in their respective areas of assignment.