ROAD TAX BIGGEST SCANDAL OF DECADE
Sen. Miriam Defensor Santiago, chair of the economic affairs committee, said the road tax, collected since 2001 from every motor vehicle , is “the biggest scandal of this decade,” because officials refused to observe guidelines, turning it into “secret” pork barrel funds for influential politicians.
The senator said the road tax is the government’s third largest source of tax revenue.
Santiago said the road tax collected from 2001 to July 2009 reached a total of some P56.5 billion, but most of it was given at random by the Road Board secretariat, which has only nine members, of which only five are technical people.
“The road tax is not part of the budget, thus there is no legislative oversight when Congress deliberates on the annual budget. There is no transparency, because DPWH and the Road Board do not post on their websites the list of projects and programs actually funded,” she said.
“The Road Board executive director is in effect a dictatorial king of a financial empire, accountable to no one, with freedom to set giant kickbacks from public funds,” she said.
The feisty senator said that the road fund was not allocated according to legal procedures, but was based instead on the request of politicians, other government officials, and district engineers.
“Contrary to law, billions of funds were diverted from road maintenance and allegedly used to install traffic lights, road safety devices, and vehicle pollution equipment. These all reeks of overpricing and ghost purchases,” she said.
The senator cited the World Bank Report of February 2009, which in effect states that the percentage of paved national roads in good to fair condition increased only by 1.1 percent per year since the road tax was collected.
“The road tax has not been abused; it has been raped. We should check the lifestyle of the Road Board secretariat executives and if justified charge them with plunder and with illegal overdrafts,” she said.
Santiago said the Road Board executive directors were: 2004 Remedios Belleza, 2005-07 Rodolfo Puno, 2008 Puno and Danilo Valero, and 2009 Valero.
The Road Board, which meets once every quarter, is composed of four cabinet members from public works, transportation, budget, and finance, with three private sector representatives.
The Road Board is assisted by a secretariat with only five technical people: executive director, fiscal controller, executive assistant, engineer, and accountant.
“A multi-billion agency like the Road Board, with five technical people are incapable of monitoring the use of public funds and supervising projects and activities,” the senator said.
Santiago said it was “anomalous” for the executive director to refuse to submit documents as demanded by the COA on the pretext that the public works secretariat has not yet approved the request.
COA submitted to the public works secretary a written request last March 23, and followed it up on May 18, but until now the documents have not reached the COA.
“Why is the executive director so reluctant to tell the public about the allocation of the funds, what actual procedures he followed, and the criteria and basis for selecting the roads? This is a big stink,” she said.
Santiago said that the COA audit report lists many violations of existing budget, accounting, and auditing rules and regulations, including:
- Overstatement of receivables – P 160 M
- Unreliable yearend balances of inventory accounts – P 31.6 M
- Unreliable property, plant, and equipment balances – P 453 M
- Invalid charges – P 76 M
- Irregular issuance of gasoline to private vehicles – P 0.48 M and non-compliance with prescribed controls on fuel consumption.
- Irregular and excessive disbursements in the implementation of projects – P 12 M
- Fund for national roads used for provincial road – P 10 M
- Failure to remit unutilized balances of fund transfer – P 0.56 M
- Failure to post warranty security for completed projects – P 57 M
- Overdraft by regional offices – P 1.47 B
- Unreconciled deposits of collections and penalties – P 1.26 B
- Inadequate road maintenance in Region 4
- Absence of guidelines in determining number of workers needed and manner of payment for OYSTER program (Out-of-School Youth Serving Toward Economic Recovery) – P 567 M
- Unimplemented MVUC projects – P 57 M
- Unfinished MVUC projects for more than two years – P 5.7 M
- LTO Motor Vehicle Inspection Unit (MVIS) Project not operational
- Idle smoke emission test equipment – P 5.5 M
- Slow implementation of projects under Special Vehicle Pollution Control
- Unremitted taxes withheld – P 1.9 M