COA orders NFA to return P231-M cash incentives, rice subsidies
MANILA, Philippines – The Commission on Audit (COA) has directed officials and employees of the National Food Authority (NFA) to return to the government over P231 million in cash incentives and rice subsidies it deemed to be irregular.
State auditors discovered the performance scores used to justify the Collective Negotiations Agreement Incentives (CNAI) in 2020 and 2021 amounting to P144.045 million did not match the validated performance scorecards issued by the Governance Commission for GOCCs (GCG).
According to COA’s 2023 audit report on the NFA released in December 2024, the NFA used performance ratings of 85% for 2020 and 75% in 2021 — different from the GCG’s 26.32% and 43.96% performance ratings for the agency in those years.
Only government agencies that obtained performance scores of 70% or higher are qualified to receive the CNAI, according to Department of Budget and Management circulars 2020-5 and 2021-3.
Meanwhile, state auditors also discovered that the rice subsidies amounting to P87.126 million had no prior approval. It emphasized that several government resolutions explicitly stated that this benefit requires presidential approval before release.
“Considering that the NFA did not secure the approval of the President of the Philippines prior to the grant of the rice subsidy to its officers and employees, the said grant in the form of one bag 50-kg. premium rice per month per employee…has no legal basis,” COA said.
The COA also questioned whether the NFA used savings to fund the cash incentives, citing financial statements that revealed budget deficits of P15.838 billion in 2020 and P9.801 billion in 2021.
The audit team suggested that the funding might have been drawn from the budget allocated for procuring palay from local farmers since the agency’s budget has no allocation for additional compensation.
“Any unutilized inventory costs are presumably related to palay procurement fund which could not be considered as savings to be used for other purposes since the fund released by the DBM for palay procurement has a specific purpose,” COA said. – Rappler.com